Our Cloud

image link is broken
The problem with headlines…

November 30, 2011

By Dick Baker


The problem with headlines…

They rarely convey the whole story, just as the one above does not.  The problem is that most people don’t read far beyond headlines to digest the nitty gritty details they refer to.

Well, they’re at it again.  A headline in Wednesday’s Business section of a local newspaper proclaimed “Region fares poorly as home selling prices drop”. Granted, the local real estate market hasn’t been on fire this year, but our “region fares poorly…”? The body of the article states that our metro area recorded a 3.86% decrease in prices, then two paragraphs later quotes the nationwide drop as 3.7%.  Well, we did underachieve compared to the rest of the nation . . . by sixteen hundredths of one percent.

Clearly our industry faces challenges, primarily due to economic conditions.  But let’s not forget that there is a positive side to declining prices – it is truly a great time to buy!  Not only are prices down relative to recent years, but inventory is high (lots of great houses to choose from) and mortgage interest rates are at fire sale levels historically speaking.  And contrary to myth, mortgage money IS available.

The Toledo Region has many great things going for it, including affordable housing.  For a look at a freshly launched web site describing our region, go to http://toledoregion.com.

image link is broken
Survey Results – Is now the right time to buy?

December 20, 2010

By Ann Newman

Nearly eight out of 10 respondents believe buying a home is a good financial decision, despite ongoing challenges with the economy and housing market. That’s according to the 2010 National Housing Pulse Survey, an annual report released by the National Association of Realtors.

The survey, which measures how affordable housing issues affect consumers, also found job security concerns to be the highest in eight years of sampling, with 70% of Americans saying that job layoffs and unemployment are a big problem in their area; eight in 10 cite these issues as a barrier to home-ownership.

Despite economic uncertainty, 68% of those surveyed still believe now is a good time to buy a home; while that number is down from last year (75%), it’s up from 2008 (66%) and 2007 (59%). Lower home prices and record-low mortgage interest rates may be attracting buyers to the housing market—more than one-fourth of renters said they are thinking more about buying a home than they were a year ago. Sixty-three percent of renter respondents said that owning a home is a priority in their future, and nearly 40% said it was one of their highest priorities.

Lower home prices have improved affordability. In fact, the percentage of renters who are worried that the cost of housing is getting so unaffordable that they will never be able to buy a home has decreased steadily since 2007, from 63% to 57%.

The good news is that Americans are seeing more stability in the real estate market. Nearly seven out of 10 believe that home values have stabilized in their area; the same number expects home sales to remain about the same through the end of the year.

While nearly seven out of 10 say it’s harder to sell a home in their area today than it was a year ago, it’s less of a concern from last year when the number was 10 percentage points higher. This is most likely the result of lower home inventories.

image link is broken
Don’t forget to add a new house to your Christmas wish list…

December 10, 2010

By Emily Yerkes

You can get into a new home with as little as 3.5% down, rates are still under 5%!

image link is broken
Danberry Fall Newsletter

October 22, 2010

By kathyjaworski

The Danberry Real Estate Report – Fall 2010 edition is here!  To read the newsletter in it’s entirety, please click here: Fall 2010 Real Estate Report

image link is broken
Is Equity really Rising?

October 6, 2010

By Emily Yerkes

So, all that we have been hearing lately is how terrible the market has been doing and how foreclosures are rising.  While it hasn’t gotten much publicity, the Federal Reserve’s latest “flow of funds” statistical report on the nation’s finances found that homeowners’ net equity holdings have increased by 17.1% from the first quarter of 2009 through the second quarter of 2010, ending last June 30.

How is this possible?  Home prices may be up modestly in some parts of the country over that period of time – even double digits in a handful of the most volatile markets.  However those percentage gains are being measured against the shell-shocked lows of late 2008 and early 2009. Statistically, even the slightest increase in depressed median prices can look impressive.

So why doesn’t it seem like our own personal equity holdings have done this well?  The simple answer is the Fed’s rising equity finding is mainly good news for residential real estate; however the increase is not attributable solely to positive events.  The Fed makes its’ basic calculation the same way homeowners would:  You subtract your total mortgage debt from the estimated market value of your home; the remainder (if you have one) is your net equity.  The Fed has access to information about mortgage debt holding of banks and non-bank lenders, and uses a variety of governmental and private real estate data sources to obtain their quarterly values across the country.

There is no dispute that a 17% increase is a move in the right direction at the very least.  Values of homes are no longer on the downgrade nationwide and household debt loads are decreasing.  None of this necessarily helps the people still stuck with homes that are underwater or those who have lost their homes to foreclosures.  But for everyone else that cares about real estate, the latest Fed numbers suggest that the equity crash is over and a rebuilding with smarter credit habits is underway.

image link is broken
FHA is launching a refinance opportunity for Underwater Homeowners

September 28, 2010

By Ann Newman

In an effort to help underwater homeowners who owe more on their mortgage than the value of their property the department of HUD is adjusting their refinance program.   In short if a borrower is current on their mortgage and does not currently have an FHA mortgage, they can ask that their current lender write off at least 10% of the unpaid balance to qualify for a new FHA mortgage.

FHA Commissioner David H Stevens stated:

“We’re throwing a life line out to those families who are current on their mortgage and are experiencing financial hardships because property values in their community have declined. This is another tool to help overcome the negative equity problem facing many responsible homeowners who are looking to refinance into a safer, more secure mortgage product.”

To facilitate the program, the US Department of Treasury will be providing incentives to those who have an existing second lien who agree to reduce or eliminate their liens.

For more information about the program, visit here.

image link is broken
Interest Rates vs. Closing Costs

September 16, 2010

By Valerie Suelzer

The most common question most mortgage consultants get is “What is your rate?”  While this is obviously a very important question there is much more to that question than most people think.  I equate it to someone calling a car dealership and asking “How much is your car?”.

Interest rates can vary tremendously, depending on the answer to some of these questions of the potential borrower:

1)  What is your credit score?

2)  How much is your down payment?

3)  What will your loan size be?

4)  FHA or Conventional Loan?

5)  What mortgage term do you want – 30, 20, 15 or 10 year?

6)  Do you want a fixed rate or adjustable rate?

7)  If you are shopping for a mortgage are you being quoted with paying any points and if so, how many?

These are just some of the questions that need to be asked to answer “What is your rate?”.

When comparing one lending institution to another it is critical to get a Good Faith Estimate or as some call it, a Loan Cost Illustration, which will break down not only the rate and terms you want but will also itemize your closing costs and escrow deposits.  Many times when customers are shopping for an interest rate all they want to know is the rate, but they never ask how much the closing costs would be.  As the interest rate goes down the closing costs typically go up.

A borrower could call Bank A and they might quote a rate of 4.5% for a 30 year fixed term and then call Bank B and be quoted 4.25% for the same fixed rate and term.  Initially, they might think it’s a no brainer to go with Bank B with the lower rate.  However, since they didn’t ask about the closing costs they don’t know that Bank B’s closing costs are $7,000 compared to Bank A’s closing costs of $2,200.

This is why it’s imperative to know the answers to these question when shopping for a mortgage and always ask for a Good Faith Estimate or Loan Cost Illustration.

image link is broken
You do not have to have 20% down and a 750 credit score to buy a home.

September 8, 2010

By Emily Yerkes

It has been said over and over that in today’s market unless you have 20% down along with a 750 or better credit score, you cannot buy a home.  This is absolutely untrue!!!  In fact, you can buy a home with as little as 3.5% down and with a credit score of only 600.

Another common misconception when shopping for a loan is believing that the company with the lowest interest rate is the best deal.  Although the interest rate is a large part of buying a home, another factor that you need to be aware of are the fee’s that the company is charging you for your loan.  Just because the interest rate is low doesn’t mean that it is the best deal.  Always find out what the closing costs are along with the interest rate on the type of loan that you are applying for, and then make the decision on which is the best deal for you.

image link is broken
What’s happening in today’s mortgage world

August 26, 2010

By Greg Cepek

Over the last two years we’ve seen a little bit of everything.  Rates overall going lower and lower, the stock market up a little one day and down a lot the next which indirectly moves the rates and mortgage underwriting guidelines continuing to change. It all can be a little overwhelming for those in the market to buy a home.  With all that being said it is probably one of the best times to buy a home!

Thirty year fixed rates in the mid 4′s make payments much lower than when they were in the 6′s just a few years ago –  it can also give borrowers more purchasing power.

A $100,000 30-year mortgage at a fixed rate of 6.5% (where it was just a few years ago), makes a principle and interest payment $628.

A 30 year fixed rate at 4.5% makes a principle and interest payment $504 per month which is a $123 per month savings!

Another way to look at it is with a rate of 4.5% a borrower could finance $125,000 and have a principle and interest payment of $630. So, in other words, to have the same payment at 6.5% a borrower could afford a loan of $25,000 more to have roughly the same payment.

What this does is completely open up borrowers to a whole new range to look for their dream home!  On top of these historically low rates, FHA financing remains a very strong program with as little at 3.5% down payment and a minimum 600 credit score needed.

While it is true underwriting has changed some over the years, the borrowers that should be buying still are able to with not much change to the underwriting process.

Badges