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Access Real Estate Lending now has a 21 Guarantee* Program (Keys on Time) where we partner with
our Fulfillment Center to ensure that qualified purchase transactions fund on
or before the scheduled Close of Escrow Date.
We are averaging 16.87 days to close on these Keys on Time loans!
· Available
for Most Purchase Products
· Owner
Occupied / Investment / Second Home Property Types Quality
· Single
Family Residence & Condominiums
· The Close of
Escrow date must be a minimum of 18 Calendar Days from the date of the Complete
Loan Submission to Access Real Estate Lending Underwriting
· If Keys on Time loan does not close on
time, the borrower’s underwriting fee of $795!
Rules and Restrictions apply, so call us at 530.897.4090 for
more information. Read
Disclaimer here
Current Housing
Industry News
Market Statistics
- New Home Sales for March increase to 417K, slightly better than consensus estimates of 415K.
- Existing Home Sales for March down 0.6%; however, existing home sales are up 10.3% year-over-year and the median existing home prices is up 11.8% year-over-year.
- Freddie Mac reports that the 30-yr fixed rate conventional mortgage fell to 3.35% last week.
- Mortgage applications increased by 1.8% in the latest week with the Refi index gaining 3%. The purchase index fell by 1.4%.
- Case-Shiller data show that U.S. house prices rose 9.3 percent and 8.6 percent for the 20- and 10-city indexes, respectively, for the 12 months ending in February 2013, according to their repeat-sales house price index. The NAR median price rose by more than the Case-Shiller data, showing an 11.3 percent gain for the same 12-month period.
- The number of U.S. mortgages that were behind on payments or in foreclosure in March fell below the 5 million mark for the first time since 2008.
- Approximately 94% of REALTORS® who responded to the March REALTORS® Confidence Index (RCI) Survey expected constant or increasing home prices in the next 12 months
Competitive Market:
When you have a hot market, and inventory is low, it can
create quite the competitive market. In order to be a top consideration for
sellers, make sure you plan ahead, and are prepared to move forward with all of
your ducks in a row. It could be the difference between getting your offer
accepted, or rejected. Some important things to think about are credit scores,
income-to-debt ratios, source of down payment and percentage down, structuring
your offer with your Realtor, and length in time to close. With low inventory,
especially in California, Bidding Wars are back. To compete in these wars,
buyers need to prepare financially and know what they want. Sellers do not
always chose buyers offering the most money and instead will prefer offers
that are the most likely to go through. Working with a reliable lender and
having a Pre-Approval letter before finding a house worth fighting for will
provide buyers with a better competitive advantage. Get Pre-Approved now
Credit:
Credit Scores are key! Any score, lower than 740, has an
add-on to the cost of the loan, due to the delivery fee, to Fannie Mae or
Freddie Mac. These delivery fees increase with their level of risk…so the lower
the score, the higher the risk, the higher the delivery fee (and therefore,
cost of the loan). Often times, when given a chance by visiting a lender, early
in the process, there is time to observe the credit score and credit report.
Some clients have something as simple as a gas card that may have $290 on it,
yet a high credit limit of $300. By paying down this revolving account to less
than 30% of the high credit limit, credit risk scores can soar…sometimes saving
client tens of thousands of dollars, over the course of their loan. By offering
a “rapid rescore” from the credit bureau subsidiaries, scores can increase in a
matter of days, as opposed to waiting 60 days for the bureaus to report the
adjustments, appropriately.
Why is NOW the time to
buy?
Current Low Rates are
the only saving grace to Home Affordability!
The first couple of months of 2013 saw rates increase, giving
the industry quite a stir. However, April gave everyone some reassurance as
mortgage rates remained consecutively low (mid-three-percentile) since December
of last year.
Historically low interest rates have given homeowners a
significant boost to their purchasing power. Between 1985 through 1999
(pre-bubble period), 30-year fixed mortgage rates ranged between 6% and 13%,
and homeowners spent an average of 19.9% of their median monthly incomes, on
mortgage payments.
At the end of 2012, with mortgage rates in the 3-4% range, homeowners paid 12.6% of their monthly income on mortgage payments, down 36.9% from historic norms. However, homes have gotten more expensive in many areas, as wages dropped or stagnated but values rose over the last year as the real estate market rebounded. In the pre-bubble period, homebuyers spent 2.6 times their median annual income, on the purchase price of a home. But through the end of 2012, buyers nationwide were spending THREE TIMES their annual incomes, meaning homebuyers were buying homes that were 14.5% more expensive relative to their incomes than during the pre-bubble period.
"The days of historically high levels of housing affordability are numbered," said Zillow Chief Economist Stan Humphries. "Current affordability is almost entirely dependent on low interest rates, and there's no doubt that rates will begin to rise in the next few years. This will have an undeniable effect on demand for housing, as homebuyers will have to spend more of their incomes to buy a home." -- NMP Magazine
At the end of 2012, with mortgage rates in the 3-4% range, homeowners paid 12.6% of their monthly income on mortgage payments, down 36.9% from historic norms. However, homes have gotten more expensive in many areas, as wages dropped or stagnated but values rose over the last year as the real estate market rebounded. In the pre-bubble period, homebuyers spent 2.6 times their median annual income, on the purchase price of a home. But through the end of 2012, buyers nationwide were spending THREE TIMES their annual incomes, meaning homebuyers were buying homes that were 14.5% more expensive relative to their incomes than during the pre-bubble period.
"The days of historically high levels of housing affordability are numbered," said Zillow Chief Economist Stan Humphries. "Current affordability is almost entirely dependent on low interest rates, and there's no doubt that rates will begin to rise in the next few years. This will have an undeniable effect on demand for housing, as homebuyers will have to spend more of their incomes to buy a home." -- NMP Magazine
News from the Big
Leaguers
Fannie Mae has
revised guidance to allow principal curtailment in cases where it is a refund
to the lender for overpaid fees or charges by the borrower or to reduce the
amount of cash back such that the loan complies with maximum cash-back
requirements. Principal curtailment is limited to $2500 or 2% of the original
loan amount, whichever is less. Guidance on living trusts has been updated as
well, as Fannie has established a new Special Feature Code and clarified the
requirements for various signature blocks. Full details of the latter can be
found in the Seller Guide and will go into effect as of May 1st.
Effective immediately, servicers of Fannie loans for which the
foreclosure sale was held on or after October 1, 2012 are required to cancel
hazard insurance coverage for both borrower- and lender-placed policies within
14 calendar days of the property appearing on the Vacancy Report in
HomeTracker.
FHA MIP Change
On April 1, 2013, FHA increased their monthly mortgage insurance payments by .10 basis points.
On April 1, 2013, FHA increased their monthly mortgage insurance payments by .10 basis points.
Beginning June 3, 2013 homeowners, who get loans through FHA,
will have to pay mortgage insurance for the life of their loan. For loans in
which the loan-to-value begins at 90% or less, mortgage insurance premiums must
be paid for 11 years, up from 5 years (if borrower reaches 22% equity)
previously. This new rule will basically double the amount of total MIP if the
loan is paid to term. FHA also is proposing an increase in the minimum down
payments for Jumbo loans from 3.5% to 5%.
Example:
Purchase price: $175k
Down payment: 3.5%
Mortgage rate: 4%
Term: 30-year
Down payment: 3.5%
Mortgage rate: 4%
Term: 30-year
Currently, the MIP is required for approximately 9 years 9
months with normal amortization. The new program would require the MIP for the
life of the loan. In this example, the initial monthly MIP is $196.88. After
June 3, 2013 the total mortgage insurance payments that a buyer will pay back
will double from $20,838 to $42,447!
For buyers to avoid these increases, they will need to get into contract on a property prior to 6/3/2013. Since this is a drastic change by FHA, the best low down payment option for buyers is the 3% or 5% Down Conventional Loan with no monthly mortgage insurance. Over 10 years, compared to a FHA loan with new MIP change, a conventional buyer can save $376 a month or $35k total.
For buyers to avoid these increases, they will need to get into contract on a property prior to 6/3/2013. Since this is a drastic change by FHA, the best low down payment option for buyers is the 3% or 5% Down Conventional Loan with no monthly mortgage insurance. Over 10 years, compared to a FHA loan with new MIP change, a conventional buyer can save $376 a month or $35k total.
FHA Streamline
Refinance
There is still a window of time to save money getting an FHA
loan, especially since rates are low. Those who act now and refinance with a
FHA Streamline loan can make these savings even with a 1.75% upfront payment.
Example:
For a homeowner who made an FHA minimum 3.5% down payment and
is applying his/her monthly savings back to the new principal balance monthly,
they will save:
· An FHA loan
from January 2008, if refinanced today, will drop MIP 61 months faster
· An FHA loan
from June 2009, if refinanced today, will drop MIP 36 months faster
· An FHA loan
from April 2010, if refinanced today, will drop MIP 29 months faster
· An FHA loan
from October 2010, if refinanced today, will drop MIP 26 months faster
Easing Mortgage
Modifications on Fannie/Freddie Backed Loans
The overseer of Fannie Mae and Freddie Mac is directing
mortgage loan servicers this summer to begin offering a simplified mortgage
modification to some struggling borrowers whose loans are backed by the two
enterprises.
Beginning July 1, the Federal Housing Finance Agency said loan servicers will be required to reach out to eligible seriously delinquent borrowers and offer them a three-month trial loan modification without the borrower providing any financial documents or hardship letters. The payments could decrease more if the homeowner documents their income and financial difficulty.
Beginning July 1, the Federal Housing Finance Agency said loan servicers will be required to reach out to eligible seriously delinquent borrowers and offer them a three-month trial loan modification without the borrower providing any financial documents or hardship letters. The payments could decrease more if the homeowner documents their income and financial difficulty.
The program will end Aug. 1, 2015.
National Association of Realtors® 2012 Profile of Home Buyers
and Sellers - Highlights
Characteristics of
Homebuyers
- 39% of recent home buyers were first-time buyers, a slight rise from 2011, but closer to the historical norm of 40%
- The typical buyer was 42-years-old, a decrease from last year's 45-years-old
- The 2011 median household income of buyers was $78,600. The median income was $61,800 among first-time buyers and $93,100 among repeat buyers
- 65% of recent home buyers were married couples - the highest share since 2001. 16% of recent home buyers were single females - the lowest share since 2001.
- For 30% of recent home buyers, the primary reason for the recent home purchase was a desire to own a home
Characteristics of
Homes Purchased
- New home purchases continue to drag at a share of 16% of all recent home purchases
- The typical home purchased was 1,900 square feet in size, built in 1992, and had three bedrooms, two bathrooms
- 79% of home buyers purchased a detached single-family home
- The quality of the neighborhood, convenience to job, and overall affordability of home are the top three factors influencing neighborhood choice, however, neighborhood choice vaies considerably among household compositions
- When considering the purchase of a home, heating and cooling costs were at least somewhat important to 87% of buyers and commuting costs were considered at least somewhat important by 76% of buyers
The Home Search Process
- For 41% of home buyers, the first step in the home-buying process was looking online for properties, and 11% of home buyers first looked online for information about the home buying process
- The use of the Internet in the home search rose slightly to 90%, and for buyers under the age of 44 this share increased to 96%
- Real estate agents were viewed as a useful information source by 87% of buyers who used an agent while searching for a home
- The typical home buyer searched for 12 weeks and viewed 10 homes
- Approximately 9 in 10 recent buyers were at least somewhat satisfied with the home-buying process.
Home Buying and Real
Estate Professionals
- 89% of buyers purchased their home through a real estate agent or broker, similar to last year's report - a share that has steadily increased from 69% in 2001
- 40% of buyers found their agent through a referral from a friend or family member and 10% used an agent they had used before to buy or sell a home
- Two-thirds of recent buyers only interviewed one agent before they found the agent they worked with
- About 9 in 10 buyers would use their agent again or recommend to others.
Financing the Home
Purchase
- 87% of home buyers financed their recent home purchase. Among those who financed their home purchase, the buyers typically financed 91%
- The share of first-time buyers reported they have made some sacrifices such as reducing spending on luxury items, entertainment or clothing
- 23% of buyers reported the mortgage application and approval process was somewhat more difficult than expected and 17% reported it was much more difficult than expected
Home Sellers and their
Selling Experience
- 46% of home sellers traded up to a larger size and higher-priced home and 62% purchased a newer home
- The typical seller lived in their home for 9 years. The median tenure has increased in recent years. In 2007, the typical tenure in home was only 6 years
- 88% of sellers were assisted by a real estate agent when selling their home
- Recent sellers typically sold their homes for 95% of the listing price, and 60% reported they reduced the asking price at least once
- 40% of sellers offered incentives to attract buyers, most often assistance with home warranty policies and closing costs
Home Selling and Real
Estate Professionals
- 38% of seller who used a real estate agent found their agent through a referral by friends or family, and 23% used the agent they worked previously to buy or sell a home
- Approximately two-thirds of home sellers only contacted one agent before selecting the one to assist with their home sale
- 93% of sellers reported that their home was listed or advertised on the Internet
- Among recent sellers who used an agent, 84% reported they would definitely (66%) or probably (18%) use that real estate agent again or recommend to others.
For-Sale-by-Owner
(FSBO) Sellers
- The share of home sellers who sold their home without the assistance of a real estate agent was 9%. 33% of FSBO sellers knew the buyer prior to home purchase
- The primary reason that sellers choose to sell their home without the assistance of a real estate agent to a buyer they did not know was that they did not want to pay a fee or commission (43%), they sold it to a relative/friend/neighbor (25%), or the buyer contacted the seller directly (15%)
- Approximately one-third of FSBO sellers took no action to market their home, and 60% did not offer any incentives to attract buyers
The typical FSBO home sold for $174,900 compared to $215,000
among agent-assisted homes
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