Residential Real Estate in SW Washington State

Residential Real Estate Services with Passion, Integrity, Knowledge

Calm Down! The Real Estate Market is NOT Falling Apart

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There has been tremendous volatility in certain markets over the last few weeks (for example, the stock and currency markets). When this happens, some tend to lump all of their investments together and create an almost ‘Armageddon’ scenario where everything loses value quickly and dramatically. Real estate is an investment that can get caught up in this hysteria. Does the concern about the current housing market have merit?

  • Financial advisors have been warning us for months that the stock market was ripe for a “correction.”
  • Experts have been questioning the value of alternative currencies for over a year.
  • In contrast, here are the opinions of three major players in the residential housing market:

Ralph DeFranco, Chief Economist, Arch Capital Services Inc.

“It’s premature to worry about a housing bubble. The typical warning signs – excessive debt levels, poor quality loans, exponentially increasing home prices, rising vacancy rates and/or poor affordability compared to the past, and a high number of internet searches on house flipping – are not present.”

Liu-Down, Genworth Chief Economist

“My thoughts on many recent discussions of ‘housing bubble’ – the bar for a housing bubble is higher than just prices being above some fundamental value. There must be widespread behavior change as well such as higher levels of fraud and speculation.”

Fitch Report

“US home prices are on track for a 5% nominal gain for the 4th consecutive year, returning national prices to their highest level since 2007. The growth has been driven by historically low mortgage rates and unemployment plus solid population and personal income growth rates…a meaningful correction should only be triggered by an unexpected economic shock.”

Bottom Line

Speculation has driven certain markets over the last year. However, it has not been speculation, but instead people’s desire for homeownership, that has driven the real estate market.

Mortgage Pre-Approval for Buyers “and” Sellers!

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Financing Ad
Photo credit: Everyspoon via Flicker

Some time ago, I received a link to a Forbes article that  pretty much debunks what most people think about obtaining mortgage preapproval: “The Mortgage Pre-Approval Con” The article explains how mortgage preapproval works, what information is requested and evaluated by a mortgage officer, and so on. It’s a good article and pretty much says it as it is.

However, one critical fact missing is that most experienced Broker/Agents (that’d be me!) also work with mortgage professionals we trust. That’s because we have experience with them; we know that when they issue a preapproval, they have the level of knowledge and experience to perform. They also meet deadlines — one of the most difficult challenges facing purchases at the moment.

When working with Sellers, I may ask the Buyer presenting an offer to also be preapproved through a lender I trust. Of course that buyer can work with whomever they want … I just want to assure my client, the seller, that by accepting an offer there’s a good chance the sale will actually be completed.

Working with loan officers that have been vetted through experience, minimizes the “con” in mortgage pre-approval! 

For a list of loan officers I trust and work with, visit my Lender Resource page.

Questions to Ask a Loan Officer

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Photo thanks to Scott Macleod Liddle via Flicker

From my own practice, I know that Buyers often believe that they have the knowledge to make an informed choice in choose a loan officer or mortgage. Buyers are smart folks — they’ve done their homework; they’ve formed a relationship with their own bank; they feel that they can compare apples-to-apples when shopping for a mortgage.

In addition to comparing rates and costs, however, Buyers need to also ask these important questions of a mortgage professional:

  • Can you really close this purchase?
  • Will you provide the loan documents to escrow 2-3 days ahead of the closing date so that my purchase can close on time?
  • What is the minimum number of days you need to close this on time?
  • Will you call me back within a hour (or so) when I have a question?
  • Will you be in close contact with my Broker/Agent so that she knows what’s going on?
  • Will you explain the numbers to me that I don’t understand?
  • How many new purchase mortgages have you completed in the last year? What types? (i.e., do you have experience with VA loans, FHA, rehab loans, etc)
  • Will you meet or beat the builder’s preferred lender’s rates or current offer?
  • If you’re not a bank, to whom do you anticipate that your company typically sell my mortgage?
  • Will you be my trusted advisor, not just for this purchase, but going forward from here so that I know when it might be wise to consider refinancing? (or whatever)

See, it’s not just about rates and closing costs. It’s about making a wise decision based on the knowledge of your loan officer. I have a short list of trusted mortgage folks with whom I’ve worked for years! It’s a short list, because it’s very hard to find excellent loan officers! Both of these mortgage professionals do what they say, when they say, with the terms they say. They stay in touch with me so I can be of service to you. They stay in touch with you so you know what’s going on. Click here to visit the page that contains the names of these two ladies.

There are only two names on the list at the moment because I’m very picky. These two are consistent, and they’re always there for my clients and for me. I like that … It’s all about trust.

From a Realtor(r) — Online Mortgage Broker vs. Local Loan Officers

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From a Realtor(r) — Quicken Loans (online) vs. Local Loan Officers

In a recent press release, JD Powers ranked Quicken Loans as #1 with regard to customer satisfaction for home loan purchase and refinance origination. I wonder how they’d rank locally or if this is a national statistic?

Online handshakeWhile we increasingly become an online population with little or no face-to-face  communication, I’m not sure I agree that using online mortgage brokers vs. local loan officers is the best method of completing a home purchase. In all fairness, however, I haven’t had an opportunity of working with Quicken Loans with any buyer. I can tell you that clients of mine have worked with several of the other companies in the JD Powers rating list…and with mixed satisfaction. 

From my perspective, once financial qualification is determined, the most critical part of completing a mortgage loan is communication between all parties involved, not just the borrower and their loan company.

Working successfully through a transaction requires that a real estate broker also be kept informed. We’re out here trying to coordinate things from our side and knowing timelines and milestones on the loan side is critical. After all, we need to meet those deadlines as well.

Local Loan OfficerI always want to be sure to know exactly who to talk to (not just a voice in a department), but a real person that follows a mortgage application from start to finish. That said here’s a list of highly successful mortgage representatives with whom I work continually. They do what they say they will do, they know their loan products and they are masters at communication! I know, without a doubt, that they’d rank right up there with Quicken Loans, if not higher.

By the way, I’m all for making applications online, using email, texts, whatever. I regularly share info electronically and I absolutely love the convenience and security of using digital signatures. I just think it’s critical to have a single person with whom you’ve met and talked handle your transaction from start to finish. And be there later when you have questions or want to refinance. Your talented and qualified mortgage officer should be part of your suite of regularly used professionals, along with your real estate broker. We’re here for the long term, not just a single transaction.

Other articles you may find useful:

Questions to Ask a Loan Officer

 Mortgage Approval for Buyers “and” Sellers

 

King County Downpayment Assistance

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King County Downpayment Assistance

couple looking at house to buyWashington State’s Housing Finance Commission announced today that their House Key Plus ARCH downpayment assistance program has just received limited funding for borrowers purchasing in the Eastside Cities of King County, including areas extending from Bothell through about Issaquah.

This payment deferred program provides up to $30,000 in downpayment funds (depending on qualifications) for households earning 80% or less of the King County area median income. There are property purchase price limits involved and the buyer must still have about 2% of the purchase price (some gift funds can be used) to also contribute to the downpayment. There are also additional requirements relating to the property itself, whether the home is currently tenant occupied, and so on.

Documentation from House Key indicates that this time around funds are loaned at a 4% simple interest, with payment deferred until the time of resale of the property, when the property is refinanced, transferred to another owner, ceases to be the borrower’s primary residence, or at 30 years.

Additional information is available about the King County Downpayment Assistance program or through a Washington State Housing Finance Commission/House Key trained lender. In addition, because there are specific requirements for the home itself, you’ll also want to be sure to work with a House Key trained real estate broker.

From experience, I know that the amount of funds available go fast! If this is a program you feel might be beneficial to you, or if you have questions about the King County Downpayment Assistance program, please don’t hesitate to contact me.