Rates
Loving rates this week, as the stock market is crashing, rates have been improving, with rate going down nicely on Tuesday after the stock market we down over 300 points.
Last couple of days we have seen some soft trading, with the stock market trying to come back, but not making much gain.
US Economic numbers are not playing any role this week in mortgage rates, all the numbers have been pretty good, what is really affecting rates here in Idaho and across the US is China and Oil. And as long as these two stay in the news, rates will be following these items.
I am still in a floating to neutral stance right now, probably for another week, as the Stock market and Oil try to figure it out. Stock market is PRIME for a rally, but who knows when, and rates will probably raise on that news.
Top 10 Lists
A great way to keep in touch with past clients and also solicit new clients is to watch out for Real Estate Top 10 Lists.
Posting these list tells people that you are in tuned with the Idaho real estate market, and also give people thoughts about what their future holds, i.e. if you have friends of Facebook or regular emails, posting why Boise is in a Top 10 of something, might trigger a phone call.
Here are a few that have come up recently that you could post or help start a conservation:
Top 10 best places to Raise a Family: (Boise, Idaho ranked #2)
http://www.forbes.com/pictures/eddf45gihi/best-cities-for-raising-a-family/
Top 10 Hottest US Housing Markets: (Boise, Idaho Real Estate Market is #5)
http://www.businessinsider.com/hottest-us-housing-markets-in-2016-2016-1
You can also post information on items associated with Real Estate, this article is both educational (reason why you REALLY need to have a home inspection), and funny:
http://www.popularmechanics.com/home/outdoor-projects/how-to/g2409/23-home-inspection-nightmares-that-really-happened/
Always make sure that you preference the article with a personal message, and ALWAYS make sure you ask for the business. I see lots of Realtors post articles, but never ask for the business!
Also make sure that you don’t post too many, I have seen Realtors post 3-4 of these in 1 day, and people will just ignore them or worse “Hide” your posts or even worse “UnFriend” you!!
I typically recommend posting Monday, Wednesday and Friday’s. I typically post a review of Idaho Mortgage rates on Monday, something information about Idaho, Boise, or the Treasure valley on Wednesday, and then my Blog on Friday.
And finally, don’t share another Realtor’s post, all you are doing is advertising for them, cut/copy/paste into your own thread or email. Fluff it up and make it your own!
FICO score on their way out?
Lots of rumblings in Congress over the last month that would require Fannie and Freddie to abandon the common FICO credit score and look at utilizing other company credit score calculations, such as Experian’s Avantium score, AKA Credit Karma.
The FICO calculation lending is currently using is FICO 5, which was created back in the 90’s, we are not even using underwriting guidelines from the 90’s so why should we be using someone’s credit score based on a 90’s calculation.
Here is a pretty good article that makes the case: http://www.wsj.com/articles/silicon-valley-gives-fico-low-score-1452556468
Now don’t expect anything to happen overnight, or atleast this year, but it is good that they are talking about this.
And how would this affect lending, well current calculations include any medical bills and lates on medical bills, but some newer calculation throw out medical collections all together, thus boosting peoples scores, significantly.
We are starting to see medical collection not be too much of a factor in current FHA mortgage, where as FHA has indicated that they will go down to a 500 FICO score, see my past blog for details on that: http://goo.gl/MbcCbH
Moral of this story is: As lending slows down, due to the lack of refinance, due to interest rates going up, lenders are starting to scramble more and more to find new ways to get people qualified. This will inturn create new programs, such as Fannie Mae’s new HomePossible program, allowing for low MI and only 3% down. (More info coming in the next few weeks on this).
We are also hearing that lenders are going to start doing 2nd purchase mortgages, i.e. doing a 80% 1st loan, and a 15% 2nd loan, then the borrower only has to bring in 5% and avoids mortgage insurance.
I think 2016 is going to be the year of new guidelines and new “creative” mortgages, do we dare say sub-prime mortgage???