When it comes to buying homes, there are three groups to pay attention to.
The largest group of purchasers is existing homeowners who are “moving-up”, “moving-down”, or “moving-over”. They bought 44.6 percent of homes in June, up from 43.8 percent in May.
Then you have the second largest group, first time home buyers. The first time homebuyers showed some small signs of a pullback. They went from 36 to 35.7 percent of home purchases from May to June..
Finally you have the third and smallest group, investors. With the recent economic crash, we saw a spike in investor purchases, but we are beginning to finally see a pullback from this purchasing group. In June, investor home purchases went from 23.1 to 19.7 percent year over year.
What does all this mean? It means that the investors are pulling out and leaving room for the existing homeowners to make their switches. This is largely due to the increase in housing prices nationwide, making it less of a lucrative investment for someone simply trying to earn money on housing.
But for those individuals and families looking for a place to live, it opens doors for an investment in a structure to call your own, a place to call home.
Source: Campbell/Inside Mortgage Finance
Interest Rate Performance
This week has been a good week for interest rates. They have mostly stabilized, which is a good thing since the past two months have brought a fairly dramatic upward spike.
Interest Rate Future
It appears that interest rates will continue to be stable, and may even drop slightly. The interest rate market has had its ups and downs lately and now that we’ve have gotten over the initial shock, it seems that rates will remain steady - allowing us to heal a little.
This week we averaged about 25 days on closing purchases and refinances. This is a great average. Please understand that this varies widely from person to person depending on many circumstances.
Creekside Mortgage, Inc is proud to serve veterans in the Pacific Northwest. Give us a call today at 800.920.5420.
Every year the Southwest Washington Region - American Red Cross produces a book of helpful resources for military families. One of our favorite parts of the book is the section that lists various discounts at stores and for services.
They have compiled a list of 174 businesses that work hard to make life easier for military families. We’re excited to share our top five military discounts. Please be aware that these discounts can vary from location to location, so ask ahead of time.
- Avis - 25% off, online you should use coupon AWD #A555084
- Dunkin’ Donuts - Veterans advantage members save 10% on all online orders.
- Home Depot - 10% off
- Kohl’s - 15% off
- Nike - 10% off instore purchases
Remember to have your military ID handy and be flexible. Some employees may not be aware of the discounts - you may need to work with management to get it.
We know you worked hard and sacrificed a lot. We hope you are always treated right and hope you can take advantage of the discounts available to you.
Creekside Mortgage, Inc is a Veteran owned and operated mortgage company. Give us a call to and we’ll answer your questions. 800.920.5420.
What comes to mind when you think of the word “negotiate”? There are lots possible reactions to this word. Many people get nervous, other people feel a sense of pride in their ability to crush the competition.
Negotiating is really about two things. The first is to create a situation where all involved parties benefit, which leads to the second - to create a situation that is better than the alternative. With that in mind we want to share a tip to help you negotiate with the seller in this seller’s market.
Frequently some buyers and real estate agents will get so wrapped up in price that they forget about the other options available. If a seller is set on the asking price, but you don’t want to pay it, what can you do?
My parents were looking to buy a home a few years ago. The new property had several acres of field that needed to be maintained. The current owners had a small tractor to do the up-keep. My parents negotiated with the sellers and were able to keep the tractor with the purchase of the home, and the sellers got to keep the price where they wanted it.
Try to look for creative ways to get the deal closed. Being creative will make you stand out from the other buyers, and could help you close a deal much easier than simply offering asking price.
The market has been going crazy lately. Just yesterday the stock market closed at a record high. But if you look at a graph of how it has been closing over the past year, it looks like a mountain range.
Mortgage interest rates are just as volatile; it’s been impossible to predict what will happen from one day to the next. Just last month, after nearly one year of record low interest rates, we saw around a one percent increase in just a short period of time.
It seems as though the rates have started to stabilize, and our best guess is that they’ll stay that way for a while, but our guess and anyone else’s guess could sometimes be compared to monkeys throwing darts at the wall.
Your best bet is to pay attention to the rates as you house hunt, and after you've signed a purchase agreement, talk with your lender to see if it’s a good time to lock in your rate.
We've said it before, and we’ll say it many more times, rates are still way lower than they have been in the past few years. It is still an opportune time to refinance or purchase a new loan.
FHA is a really good program, especially for first time home buyers. The program is designed to help people transition from being a renter to being a homeowner by requiring as little as 3.5 percent down and by allowing most of your closing costs and fees to be wrapped into the loan.
The VA’s home loan program is also really good. It allows you to have no down payment and the closing costs can be paid by the seller. There is a funding fee however, but if you have a service related disability of 10 percent or more, then you don’t have to pay that fee.
So if FHA went head-to-head with VA, which would win?
Here’s an example of a situation that recently happened in our office. A borrower had been pushed to go with an FHA loan, so he came to us. We found out that he was receiving compensation for a service related disability, this meant that he was exempt from any fees that the VA would normally charge. If he had gone with an FHA loan, he would have had to pay upfront mortgage insurance and a monthly mortgage insurance. He would have been stuck with $212 a month in mortgage insurance or approximately $76,000 over the entire life of the loan. But since he went VA, he had no funding fees, needed no down payment, and no monthly mortgage insurance.
In this case the VA won by knockout!
We've noticed the sudden increase in home prices lately, and it seems like everyone else has too. So why does it seem like appraisers are missing the boat?
Lately, there has been an unusual spike in the number of appraisals that have come in low, and we understand this can cause a lot of frustration for home buyers trying to secure a loan. So we’ll go ahead and explain two things. First, why home values are increasing, and two, why appraisers aren't following suite.
Home values have been going up for several reasons, but there is one reason in particular that we have addressed before - the basic economic principle of supply and demand. We have a low amount of homes for sale, and a lot of eager home buyers ready to purchase. As the demand for homes increases, and supply decreases, we see prices go up.
So why don’t appraisers use supply and demand to adjust home values? Fairly recently, certain regulations have been put in place to prevent small housing bubbles from developing and bursting.
Appraisers previously could make adjustments to an appraised home based on the most current market values, but now the home values are largely determined by the previous six months of home sales in the area. This effectively slows down the price spikes, allowing the market to adjust more slowly.
So for now, it appears that appraisals will continue to come in low. There are steps you can take to help prepare for an appraisal that comes in low. We highly recommend calling your lender or real estate agent to find out what you can do to mitigate problems that may surface from an appraisal.
Creekside Mortgage, Inc has an expert team that can answer your questions about appraisals and home ownership. Give us a call today at 800.920.5420.
For over a year mortgage rates were dropping, and they hit what many experts are calling “the bottom”.
We worked hard to spread the word to US Veterans then, that it was an ideal time to refinance. We helped hundreds of Veterans improve their interest rates and purchase their dream homes. We loved helping these families, and loved seeing the joy behind their smiles when they signed.
Unfortunately, we were unable to get that word out to all Veterans in WA, OR, and ID, and now we've bounced up from “the bottom”. We've been surprised at the number of Veterans that have come trickling in with interest rates currently in the high 5 and low 6 percent range.
Even though rates have jumped up about 1 percent, if you’re one of those Veterans with a rate around 6%, you’ll want to jump in and start looking at refinancing right away.
Here’s a great reason to refinance. Did you know that for every $100,000 on a mortgage, a 1 percent interest rate increase will add approximately $50 per month to your monthly payment, and approximately $20,000 to the total amount of interest you will pay by the end of your loan?
Rates seem to have temporarily stabilized, making it an ideal time to talk with your lender about improving your financial situation. If you play it smart, you and your lender can still get you a great deal on a refinance or new purchase.
You know how the stock market is always going up and down? Sometimes mortgage rates can change just as unexpectedly. Because of that, deciding when to lock in a rate or whether to keep “floating” is a scary thing.
Once you've been pre-approved, your rate is floating. Floating means that your rate will be whatever the market dictates at the time you lock it in. Normally to even begin locking in a rate, you need to sign a purchase agreement, otherwise, you’re floating.
Locking in a rate means that for a certain period of time, usually about 30-45 days, you can be assured that your interest rate will be whatever you locked in.
But just because you can start to lock in a rate as soon as you have signed a purchase agreement, doesn't mean you should do it then.
So the next question is, when should I lock the rate? The answer, unfortunately, is complicated.
Rates tend to move up and down, just like the stock market, and they can be difficult to follow. But that doesn't mean they’re impossible to anticipate.
As soon as you start looking for a home, you should start getting familiarized with the current trends for rates. A good idea is to also play around with a mortgage calculator to test different payment scenarios for different interest rates.
One of your best bets is to rely on your VA loan expert for advice. They should be more aware of current market trends and be able to recommend the best course of action. They can usually point out what the rates have been doing and where it looks like they might go. They can even give a recommendation on whether it’s a good time to lock, or whether it’s worth the risk to wait.
All of that being said, it’s important not to have buyers remorse when you finally do lock in your rate. No one has a crystal ball to tell you what the future will hold. Plus, even if rates did go up a little after you locked in, you’d make home buyers from the 1990’s very jealous with today’s rates as low as they are.
Yesterday we talked about MPRs or minimum property requirements. We told you about dry rot and wood destroying insects. Today we have two more MPRs that you should look out for.
Improper access to the home is a big problem that’s easy to spot early on. The VA requires that the home be accessible by an all-weather road - that means no dirt roads. You can have public or private roads, but they need to be paved, graveled, or have some type of all-weather material to give you access year-round.
You’ll need to know about the maintenance agreement when dealing with private roads. Normally the VA requires an agreement that is signed by all homeowners on the private road, and some states even require that the agreement be written by an attorney.
Paint and electrical
Peeling and damaged paint on homes built before 1978 are considered hazardous because of the potential use of lead based paints. You can generally identify these problems in a walkthrough, and bring them up before making an offer.
While paint problems shouldn't be deal breakers, you should make note of them when choosing a home because they could lengthen the time to close the loan.
Electrical issues generally happen with older homes that haven’t been properly updated. When you’re inquiring about the house, asking about recent electrical work if the house is more than 20 years old is generally a good practice.
Even though loans can temporarily get hung up because of a MPR violation, it’s important to remember that they are there for your benefit.