Rates

Another week and economic news has been ignored, as all the economic news this week should of raised rates, but instead we saw rate stay low.  So what????

Well a majority of the reason for rate to remain stable this week is due to Japan.  With the 3rd largest economy now pretty much in a shamble, and growing more dire each day, more and more people have sold off their bonds and commodities and flocked to Bonds.

This has caused interest rates to remain stable, maybe fallen just a little.  So that makes most rates firmly in the high 4% range, with IHA having their FHA rate today at 4.55% (5.10 APR).

Like I said, most of the economic news this week was pretty good:

-NY Empire manufacturing index was up to 17.5 and increase over last months 15.43, which means that manufacturing in this district is growing, nice.

-February Housing starts were down 22.5% on an expectation of only be down 4.0%, ouch.  But keep in mind this is a national number.

-February PPI or inflation at the producer level was low, the core was only up 0.2%, which was inline with expectations.  This along with the CPI or Consumer Inflation, which was also in line, will prevent the Federal Reserve from raising rates to stem off any inflation worries, which will keep rates low.

-Weekly Jobless claims fell again, by 16,000, moving in the right direction.

-Phil Fed indes expected to be 28 was actuall a 43.4, higher the number, better the growth.

So with all of these items, interest rates remained pretty stable this week.

Housing recovery.

Well if you haven't heard, I think we are a housing recovery.

According to IMLS data, Ada County say it's 3rd month, yes 3, (isn't that a trend) months where sales have increased month over month, and 2 of those months were WINTER months!

According to IMLS data, Ada County was up 22% from last month and 15 % from Feb 2010.  While home prices were up 9.5% in Ada and a Whopping 10.4% in Canyon County.

Idaho Statesman article link here!

Sales Tip

Wouldn't it be nice to call some of your clients, who maybe have just had birthday's this year, that are now Eligible for the Idaho Circuit Breaker Tax Break on their homes!!!

tax.idaho.gov/i-1052.cfm

And maybe say Hi, how are you doing, have any friends and family that need a home???

Worked for me, I just had a client, which I sent out a birthday card to on Monday, and they turned an age where they could apply for this GREAT program.  And while I was on the phone with him, he gave me the name of his next door neighbor who needs to refinance his VA loan.  PERFECT!

And if you are not sending out birthday cards to each of your clients every year, SHAME ON YOU!

Good info

1-Want to get off pre-qual mailing lists and quit having companies peek at your credit reports??

www.optoutprescreen.com

Federal Leave Me Along and my Credit Report Also list.  I also have a link under my resources area, under Credit Repair!

2-Have you checked to see if State of Idaho owes you money, or someone has a refund for you but didn't get to you address.

I had a $150 Best Buy Rebate that for some reason never made it to my door.  I check the STate of Idaho web site, filled out the paperwork, and found out that someone owed me $150.  After a little more paperwork, I got a check for $150.  FOUND MONEY!!!!

Link to Check is HERE

Did you know?

According to the US Census, there is 167,564 vacant home in Nevada!!!!  Lets say 4 people per home, that is 607,256 people, or about 2/3 the population of IDAHO!

Rates continue to ease:

This week we saw interest rate continuing to ease, with the Prime Conventional Rates now entrenched under 5%.  IHA FHA is actually 4.60% (5.10 APR) and conventional rates are 4.75% (5.25 APR) or less!

This week we had 2 fold items that help rates go down:

1st was oil, with oil over $100 a barrell (by the way a barrell of oil is 42 gallons), there is quite a bit of concern that our fragile recover could be dampered by increase costs in oil.

Remember, oil is in alomost everything we use, from the gas in your car to the paint on your walls, to the plastic bottles you Mountain Dew is in.

So, increased oil, will start to affect quite a bit of items.

Next we had some not so good economic news this week:

Trade defecit was higher than expected, not a good sign.

Weekly unemployment 1st time filings were up 26,000, and we are back to 397,000 claims per week.

The goverment sold more of our debt this week, and investors snapped it up.  Which means people are not confident in putting their money into stocks and are fleeing back to bonds.  Another sign of weekening economy.

100% Financing

Lots of rumors out there that it is hard to get a home loan now, well I am here to tell you that is not the case.

No it is not 2006, where we can do 1 day out of a Bankruptcy with a 580 FICO but...

We can do FHA down to 580 FICO!

And we have a 3.5% 2nd loan for people over 700 FICO for 100% financing.

VA loans are still 100% Financing

RD loans are still 100% Financing

There are GRANTS available, up to $8,000 for low income qualified people!

RACE FOR THE CURE

It is time for Race for the Cure again, the only time of the year I come beggin for money.  Please go to my link and come race with us, no we don't race, we do the 5K walk!

http://boise.info-komen.org/site/TR/RacefortheCure/BOI_BoiseAffiliate?px=7755509&pg=personal&fr_id=2030

Any money you can sponsor with will be GREATLY appreciated!

WE ARE MOVING

1st Choice is moving locations, to a bigger and better building!!!!  AND more centrally located!  Our transition should be seemless, it will happen on 4/1/11 (no this isn't an April Fool's Joke).

I will be sending out lots of info but our new address will be:

3023 E. Copper Point Dr., Ste 101
Meridian, ID  83642

Same Phone Numbers, Same Email adress, same GREAT customer service and low rates!

Well another week and rates slide again, but why????

Well for the 4th straight week, we have seen rates below the 5.00%, mainly due to the unrest in the middle east and oil prices.

There are huge concerns that the Middle East could start crumbling even more, which would cause oil prices to spike, which could prevent our recovery to stall.

Even Saudi Arabia is concern and announced last week $13B in new social services, or in other words they will take all the oil revenue they receive for 1 hour.

Technically rates should of incrased this week, on Wednesday we saw the ADP employment numbers come in at 217,000 new jobs, and then today, we say the US Government numbers come in around 222,000 new jobs with unemployment going below 9% to 8.9% for the first time in over 2 years.

We also saw December's numbers revised to add another 58K jobs, and January revised from 36,000 jobs added to 63,000 jobs added.

Over all, rates should of increased, but they went down about .125 of a point this week, in late trading today.  But this, like I said last week, is temporary, it will only last as long as oil prices remain high, which will probably last only as long as there is turmiol in the Middle East.

Get'em while they are low!

Home Prices for Treasure Valley

I blogged yesterday, very short, READ IT.  CNN Money is predicting that Treasure Valley home prices will only decline 1% this year, and September 2011 to September 2012 they are expecting a 2.8% increase.

And in reviewing their numbers from the past, they have been pretty accurate.

Soooo

Interest rates at their lowest levels for 2011......

Home prices expected to rise.....

Sounds like the prime time to buy!!!!!

Ada County Home Owner's Exemption

Did you know you can file your Homeowner's exemption electronically!!!!  And Ada County will email you back a confirmation!!!!

I have the form to download on my web site at:

http://www.375loan.com/Resources/New_Home_Owner_Checklist/

It is in the right side brown box.

Investors

Had a realtor helping investors purchase a home, they were going to purchase 1 home for $100,000 and put $50K down.

But after talking iwth them and the RE agent, they decided that instead of 1 home, why not purchase 2 homes and put $25,000 down on each home. 

Putting 25% down is the sweet spot for mortgage rates.

The clients never thought of that, and figured they had to put more down in order to get the best rates.  So clients are now searching for another home, and the RE agent is searching for another home.

Moral of the story, happy clients buying 2 homes.

Moral of the story for the RE agent, happy clients purchasing 2 homes!!!!

Don't Forget

If you ever need a flyer, just look to the right, I have FHA, RD etc... flyers that you can download and print off!!!

This article came out today on CNNMoney, the overall article was kind of depressing, predictions that some markets would decline another 25%.  But after reading that and looking up our area

Don't think we can call the bottom, but we are darn close!

Rates ease:

Once again, interest rates eased, taking the 30 year Conventional below the 5.00% mark for the 2nd straight week.  The majority of the rate improvement is going to be temporary, and is mainly due to Libya.

Last week, as the Libyan government is starting to crumble, most investors around the world pulled their money out of stocks and into bonds, sending the 10 year bond below the 3.50% mark, which was a bottom resistance.

Technically it should then run to the 3.24% mark, but I feel it will be only a matter of time before Col. Kaudaffi leaves or is killed and stability will return to the region.

Technically rates should of not fallen, but risen last week.  All of the economic news was pretty good:

-Consumer confidence came in at 70.4, which is a great mark,  if you are a regular follower of the blog, and why should you be.  You will know that early last year, I felt it really would take the Consumer Confidence index to be in the 70's for us to have a decent comeback.  And now with it in the 70's, which is the highest since "the GREAT Recession", the recovery is taking hold.

-Existing home sales came in at 12% POSITIVE, and that is a great number, but the real number I liked was the amount of inventory on the market, falling from 7 months of inventory to 5.1 months of inventory.  This is a really positive sign, because as soon as we reach that 3 month level, it becomes a seller market again!!!

-The Michigan Consumer Sentiment index also was higher, expected to be 75.1 was actually 77.5.  Another positive number showing that the consumers are getting back into a more positive mood.

Home Prices

Let me hammer it once again, have you seen home prices???  Home have not been this affordable since EARLY 2000's late 1990's.

I had a Realtor do a MLS search for home, under $70,000 in Ada and Canyon, there were 697 of them.  So lets do some math.

$70,000 - 3.5% down payment = $67,550 (and yes we still have GRANTS and down payment assistance available for that 3.5%!)

At a interst rate today of 4.79% (5.30% APR) we get a PI payment of $354.00

Say $100 for taxes, $30 for insurance and $51 for MI = $181

Total Payment then is $536 per month.  FOR A HOME!

So that means someone making $9.43 per hour can afford a home.

Sales Tip

I was listening to a Retail Psychologist last week, someone who set up stores to encourage someone to purchase items, and did you know....

How many of you have signs for you listings that have the actual words "For Sale" on them, or do you just have your picture and company logo?

Did you know, a person in the market looking for a home, is more likely to stop at a home with a sign that has the words "For Sale" on it that one that just looks pretty?

As you drive down the road this week, look at signs and notice the ones that say "For Sale" and the ones that don't.

Maybe when you order your next signs, have "For Sale" on them???

FHA Pressure

FHA is putting more and more pressure on banks and lenders to lend, there is a concept.  So that is why we are seeing lenders willing to go down to 580 FICO scores for FHA loan, and I even have lenders that are willing to go down to 500 (with 10% down) for FHA loans.  

WOW, cheap home prices, FHA down to 580, Jobs on the rise, 100% financing available, looks like a GREAT spring!

AND....

So you may think or see a $50,000 home, might need a little work???  FHA 203K loan, yes!  See flyer to the left for all the details!

Rates took a Breather:

Well this week rates took a little breather, pretty much ended this week where they started.  Lets look at some of the economic numbers which helped us.

-NY state manufacturing data increase to a 15.43 from a 11.92, anything over 0 is good news, but we are really needing this number into the 20's.

-Business inventories rose to .8%, better than expected, which shows us businesses are purchasing more and keeping it.

-January PPI measure of inflation was at expectations, still now inflation at the producer level, but watch out, I think next month could be more interesting.  And inflation is going to be the topple of good interest rates.

So over all, the economic news was pretty positive this week, except for the unemployment weekly numbers, those were quite a bit higher than expected, but it was anticipated that this was mainly due to weather.

So the outlook for interest rates is for them to keep their slow climb up, I still suspect low to mid 5's by spring and mid to high 5's be end of summer.

Good Housing News:

We are starting to see some good numbers come out of housing, and on of the more positive ones, that really didn't get much attention was the Forclosure rate, it has actually dropped 10%, down to 8.5%, which is almost, almost back to where the Foreclosure rate was before the Great Depression, but not to the levels it was in 2004-2006.

This means less FC homes on the market, which will decrease inventory!

The next good news of the week was January housing starts, expected to be up 2.4%, was actually up 14.6%.  This means more builders are having a postivie outlook towards spring.  But what it also tells me is that lenders are more willing to pony up the dough for spec homes.

There was 4727 active in MLS with 1238 pending listing, now lets do the math, that would be a total of 5965 listing and 21% of those are sold.  That is a pretty good number.

Spoke with a listing agent this week, had a listing, on the market 15 days, priced right, and over the last weekend she got 4 offers and got into a bidding war.  WOW never thought I would say a bidding war again for real estate.

High end lots, getting scarce out there, builders are scambling for lots and they are going to have to develope.

Things are looking up!!!

Lending Changes

FHA taxing home buyers!  If you had heard, FHA will increase thier monthly MI from .90 to 1.15% on April 18, 2011.  This means if you don't have an address and a FHA case number BEFORE 4/15/2011, you will pay about $21 more per month for every $100,000 you borrow with FHA.

April 1st will also be a significant change affecting all lenders, banks, lenders, brokers.  The new lender compensation rule will go into affect.  How will this affect the industry?

The basic rule is this, a lender who accepts anytype of funds from a borrower, in the way of a origination fee, doc prep fee, processing fee, etc.. CAN NOT accept any other type of fee from the lender or other parties.

So this means that most lenders will not charge the borrower any fee, and you might think, well cool.  BUT NO, this means the lender will be charging a higher interst rate to make up that fee.

2nd, a lender in no way, can credit the borrower anytype of fee, so no more "lender" or "broker" credits at closing.  So lets say that the borrower has to come in with $300, and is unable to come up with that money.  Well normally I would just give a "Broker's Credit" for that $300 to get this person into their home, I call that customer service.

Well beginning 4/1/11, that is not possible, there is no way for the lender to give anytype of credit on the HUD.

Now @ 1st Choice, we feel that it should be the clients decision, so unlike what most lenders have commented, we will offer each client multiple options, and will ALWAY try to be the lowest rate.  Because when it really comes down to it, it should ALWAYS be about the rate.

Rates continue to rise:

Just like in the past weeks, rates continue to go up, breaking the 5% mark for the first time in over 1 year.

The main reason for this is pretty simple, and should continue, the Economy is Improving.

So lets look at some of the economic numbers that are showing improvements:

Although the Fed doesn't think so, inflation is raising it's ugly head, and as more inflation continues, it will cause concern that the Fed will have to raise rates, sooner than later. 

Retail sales continue to climb, after a pretty good December, it was anticipated that January's sales would be down due to the Weather, but there actually beat expectation, and for early numbers in February, they are looking good also.

So this means that the consumer is back in the market, and this is critical to coming out of the "Great Recession".  More spending means more jobs, means more spending, means more jobs...

Another sign that the economy is improving happened this week as the US tried to sell off it's debt.  We had a $32B, 3 year note auction this week, and it was not very pretty.  It looks like investors are not looking at putting their money in a conservative Bond, but the stock market.

Weekly Jobless claims fell, AGAIN, for 5th straight week, once again below the 383K mark, which is the lowest levels since 2008.  And continuing claims fell from 3.935M to 3.888M.  Still a huge number, but it is going down!

All of this news have sent rate over the 5.00% mark, and with no end in sight, rates should continue to climb through out the year.

But don't freak out!!!!  We all soon forget that during the hey day of 2003-2006 interest rates were in the mid to HIGH 6's!!!

Good news in Boise!

I have been in contact this week with quite a few builders and Realtors who represent builders.  And believe it or not, we may, may see developed lots dry up, probably by the middle of the year.

Over the last 3 years, there has been TONS of developed lots which have gone back to the banks and sold at auctions.  But in the last week, I have been told that although there is some out there, it is getting skinny.

AND

I have been told by 1 builder, that he is unable to find any more lots in his price range and is going to start developing his existing dirt!

This is good news for 3 reasons, 1st, we are getting rid of inventory out there.

2nd, developing lots costs money, and put construction people back to work.

3rd, there are people buying!!!

And going along with that, I have 1 builder who has more homes pre-sold since the 1st of this year then he did of ALL of last year.  And he is on track to go over his 2011 home construction goal in the next 2 weeks.

Fannie/Freddie going by!

The Feds today gave a preliminary "white paper" on slowly getting ride of Fannie and Freddie and giving the banks full control of Mortgages.

Although in the preliminary stages, I do believe we will see the end of the Government Guaranteing mortgage as they do right now.

We will probably see a minimum of 10% down for loans.

More to come!!!!

Major change for mortgage loans!

The new Frank/Dodd rule will go into affect on 4/1/11 regarding compensation for ALL loan officers, brokers/lenders and BANKS.

This is socialism at it's best, the government is basically regulating our wages, and unless there is some sort of stall, this new rule will go into affect on 4/1/11.

I will have more details as they come out, but like I said, it is the government telling us how much to make.  And I feel it is just the next step in over regulating the Real Estate world.  And the government next eye is Realtors, so watch out.  If the banking industry couldn't stop this regulation, I feel the RE industry isn't going to have much more power.

Watch for updated info.  But basically it will cause a Loan Officer compensation to be decreased and a Buyer Cost to increase. 

In this Blog:
Rates, keep going up
Is it time to invest?

Rates, keep going up:

Another week and another increase in interest rates. Let's look at some of the numbers.

The biggest movement in rates this week was caused by today's unemployment numbers. Although there were not what was expected, they were all right.

Unemployment went from 9.6% to 9.0%, with the US economy creating about about 36,000 non farm jobs. That in conjuction with Wednesday ADP number of +187,000 show that the US economy is adding jobs, but we still showed over 300,000 1st time application being processed.

Based on these numbers, and the fact that things are looking a little more positive in Egypt, has send interest rates up for the day.

Another number, that people really need to be watching is inflation, although the Federal Reserve believes it is under control, both Commodities and Energy inflation has been creaping up, quite rapidly. Which is causing some concern that the Fed may make a rate movement sooner than later, i.e. towards the end of the year.

All of this has had Bond traders selling, and with the Stock Market now over 12,000, we have seen the 10 Year Bond trade in the 3.64% range, which by all accounts should put interest rates into the 5.25% range.

You can see by the 10 year Bond chart that it has been steadily going up, up, up. Which is making interest rates go up, up, up.
We definately saw the bottom of the rates in November. It is anticipated that by spring, we could be in the Mid 5's for most of the conventional rates.


It is time to invest:

This week I have been speaking with quite a bit of investors who are purchasing homes, all of them can't buy them fast enough. So here is some insite from one of them:

-Interest rates are not going to get any better than they are right now.
-Although home prices will continue to decline for the next year or so, they will eventually start to go up. So get a good price on a home at a low rate.
-Monthly rents have been going up over the last 6 months, as a result of...
-According to 1 local data provider, vacancy rate is at 4%, which is the lowest it has been in years.
-More people are being forclosed upon at a faster pace, they have to live somewhere.

Here is 1 example of a investor I am doing 2 homes for:

Home #1 is in Boise, purchase price is $83000, (needs new carpet), he is putting 20% down, and the seller (bank) is paying all his closing costs. So his loan amount is $66,400 @ a 5.50% rate. His PI is $377.01,
Taxes are $122,
insurance is $45,
so his total payment is $544.
He has a potential rentor already at $755/month.

Home #2 is in Nampa, purchase price is $55,000, put 20% down, and seller is paying all closing costs. Loan amount is $44,000 @ a 5.50% rate.
His PI is $249.33
Taxes are $83
Insurance is $38
Total payment is $370.83
Renting it for $600/month

In this blog:

Rates ease just a little.
Bad News about Boise?
FHA relaxes FICO.
BofA hoses more people.
VA clients who are active.
IHA FHA 203K loan.

Rates ease just a little

Well rates have been trading in a pretty narrow band for the last 2 weeks, which as meant not much movement up or down, well at least until the last 2 days.

Rates have eased just a little on fears of what is happening in the Middle East, specifically in Egypt. Causing people to flee the stock market and hide their money in Bonds and Commodities.

Rates have been kept kind of high today, although a couple of my lenders did improve, but I think that Monday we should see some good rates, better than we have had in the last few weeks.

Overall, we have been blessed that rates have not risen much if any in the last 2-3 weeks, with all the pretty good economic news that has come out. I suspect that rates will continue to trade in this band and stay stable until spring, when economic news should be even better and causing some concern about inflation.

Boise Bad News???

Recent stories about Boise and the Treasure Valley have indicated it is looking for another 7% decrease in home prices. And although I do feel we will decline 5-8%, the news isn't all that bad.

Based on current MLS data there is 4722 active listing in the IMLS and 1066 pending. WHAT... I think this is pretty good news, that means 18% of listings are pending! Of these 2172 are distressed properties and 649 of those are pending, or 23% of all distress properties are pending. I am thinking this is pretty good news. And assuming that all of these will come off the market, not too shabby.

FHA relaxes FICO.

Yes, lenders are relaxing FICO requirement, all the way down to 580. Now that is a score which a client really has to have some good compensating factors to get, but I did get a 600 FICO score client approved today!!!! See Subprime is making a COMEBACK! Well they still have to qualify, be employed, and bring in 3.5% for a down payment, can we say GIFT? How about a 1st Time Home Buyer's Grant of $8,000?????

The Evil Empire Strikes Back!

Yes, Bank of America is at it again, trying to get your money. They recently announced that instead of the industry standard of a 15 day grace period to make your payment, remember mortgage payment is due on the 1st but can make it before the 15th with out any penalty. Well B of A is now taking that down to 9 days, removing 1 whole paycheck from a client to make their mortgage payment. Sure you can still make it, but with a LATE FEE!!!

VA clients

Here is your Marketing Phone call for the week. Go through your old client and find out which homes you did that had a VA loan. Then find out which ones are on active duty, Which means the hole Idaho National Guard 116th, then ask them what their interest rate. Base on the "service member relief act of 2006" any active duty Military Member, serving overseas, can get their interest rate reduce to 6.0%, Period, No Questions asked! Now it is temporary, until they come back. But it would make a GREAT phone call and a way to keep in touch.

Here is the article which I found, referencing this, (another one of the evil empires hosing Veterans!) Link Here!


IHA FHA 203K Loan!

You asked to fit, and NOW you have it. A rehab loan for all those short sales and Foreclosures that need some work.

FHA 203K loan allow a client to get up to $35000 or 10% of the purchase price for items which the previous owners may have removed or didn't take care of, like:

-New Appliances, including refrigerators
-New Carpet
-New Paint
-New Fixtures
-Mold removal
-How about a NEW DECK or PATIO (sorry no hot tub)

So let me put it simple:

Have a client who wants to buy a home but, the carpets are trashed and they took all the appliances and fixtures.

Client has a 620 or higher FICO score. (yes we can go down to 580, but really).

DONE! 3.5% down and the home is theirs!

Client has a 700 or higher FICO, use the 3.5% Good Reward Down Payment, and they come in with practically ZIP.

Well I usually talk about rates, but it looks like over the last 2 weeks rates have really found a narrow trading range, meaning they really are not jumping much.

Government rates are in the high 4's while conventional rates have been in the high 4's to low 5's.

But what has really changed is some guidelines, for the better!

FHA Down to 580?

First of all, we now have lenders that will do FHA loans down to 580 FICO scores, YES believe it or not 580, not this will require 3.5-5.0% down. But we can go up to a 45% Debt to income ratio!

AND there is no interest rate hits for the lower scores!!!

97% Conventional!

Yes, we can go conventional financing now to 97%. The MI is a little higher 1.15% which is a little higher than FHA .90%, but the Conventional Financing DOES NOT require the 1% Up Front Mortgage Insurance.

Grants Still Available!

Don't forget, Idaho Housing still has (up to) $8,000 Grants available for income qualified people, 1st time home buyers or single mom/dads. So have a 600 FICO score, go FHA, Purchase a $120,000 home, Need 3.5% or $4200, EASY, get a $4200 GRANT. Oh, you can use the other $3800 for closing costs!

FHA 203K Loans!!!!!

The most exciting program to come out!

Home buyers can now get money to fix up REO properties:

-New Carpet
-New Appliances
-New Waterheater
-New HVAC
-New Fixtures
-New Paint
-New Deck/Patio
-Bathroom remodel
-Kitchen remodel

IHA is rolling out this GREAT program that will allow a client up to $35,000 or 10% of purchase price to repair, remodel, update.

So ever say a REO that all the carpet was gone and said "I wish I had the money to put new carpet in" Well now you do!

Flier and complete details coming out next week!

Market Data

This week we saw building permits increase by 16.73%, one of the largest jumps in quite some time. The market was pretty positive about this data, although I am cautious. We know that builders pull permits about 90 days before the home is to be completed. So what this is a "Hope" of a strong spring. But I feel that this will just clog the market with more homes.

I truly feel that there will be a huge wave of foreclosures hitting the market in the spring or as we call it the "phantom" inventory. I have already seen Fannie Mae and Freddie Mac starting to dump more and more of their 'Home Path" or "Home Step" products on the market.

What was nice is that existing home sales jumped 12.34% in December and was only down .19% year over year. This was a nice surprise, especially since December was a really bad month for weather AND it is a holiday season. I feel that if we didn't have so much bad weather in the US, the Y o Y number would of been positive!