FHA Loan Limits Back to $729,500

It is official – Congress has re-enacted the FHA loan limits back up to $729,500.  As of October 1st, the limits were decreased to $625,000. Through lobbying by the real estate community, the law was reversed and was signed on November 18th.

This higher loan limits open the door for more people to purchase a home, especially with the higher home prices in the Contra Costa & Alameda areas. More home, less down payment and somewhat less stringent credit score requirements make it easier to buy–especially for the first time home buyer who may have excellent credit, good jobs, but not 10% to 20% required by conventional loans.

 

 

Share this:
Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Mortgage Debt Forgiveness-Principal Reduction Program

The principal reduction program was introduced several months ago and there had been talk that more lenders would get on board with this program. But to the dismay of many, if either Fannie Mae or Freddie Mac are the investors holding your mortgage, this will not happen, according to an article that appeared in the New York Times.

I am not sure if the reasoning behind their decision makes sense and that is probably because I am out here and not in there. My thinking if the home ends up in either a short sale or forecelosure, in essence the principal is reduced. Once either one of these actions happens, the homes will be sold at market value, which is essentially what the principal reduction program is about.

It would also seem that the expense of either a short sale or foreclosure is far greater than the principal reduction. In either of the above scenarios, taxes are not being paid, homeowners dues where applicable are not being paid. If the home is vacant, then who knows what has been destroyed. The holding costs for the lenders plus any attorney fees are costs that would not be incurred with the principal reduction.

Essentially the mortgage principal reduction program works with homeowners who are current on their mortgage, have good credit, but are upside down on the mortgage, have had some type of hardship and are trying to hang on.

My questions – wouldn’t it be in the best interest of all parties to work with these homeowners? They are in the property, taking care of it, making mortgage payments.

Anyone in this type of situation, should check with their lenders to see if they are willing to participate with the principal reduction-short pay program. The first questions to ask “who is the investor holding my mortgage” – hopefully it is not Freddie or Fannie.

If you are in a distressed situation and would like to find options, such as a short sale, give me a call Linda 925.415.3046 or email

Share this:
Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

San Ramon Valley Foreclosure or Short Sale – You Can Now Buy A House

DownPaymentIs there a time frame I must wait to buy a house if I have a foreclosure or short sale?

People looking to purchase a house in the San Ramon Valley  area may qualify to purchase a home even with a Short Sale or Foreclosure on your credit.With this program you do not need to wait the standard two to three years before purchasing a home. If you’ve got the cash you can get a house.

Okay – What’s the Catch

The catch, if there is one, is the amount required for a down payment. If you have 35% to put down you can get a loan to purchase a home. Other than the foreclosure or short sale you must have credit scores in the 700s.

In addition to the down payment requirement, the interest rate may be 1/2 to 1 point higher than current interest rates. Which maybe okay as the interest rates are so low.

There are quite a few people who have had the misfortune of a short sale or foreclosure due to loss of job, relocation or other circumstances that are now on their feet and have the cash to make this work. And what better time to buy with the attractive prices for San Ramon & Danville homes on the market.

Call me to find out more. As a local real estate agent I do my best to stay on top of all the  financing programs for home buyers.

Share this:
Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

San Ramon Valley Housing Inventory Thru August 2011

San Ramon Valley Buyer or Sellers MarketSan Ramon Valley – Is it A Buyer’s or Seller’s Market

Months of inventory is used as a measuring stick to determine what type of real estate market we are experiencing. This is determined by the number of active listings and pending sales. We are using only those homes that went pending in the past 30 days, i.e. August 1 thru August 31.

According to the “experts” between 4 and 6 months is a balanced market:

  • Sellers Market = 0-3 months of inventory
  • Buyers Market = 7+ months of inventory
  • Neutral Market = 4-6 months of inventory

 Let’s See What Type of Market San Ramon Valley by City is experiencing:

August 2011 August 2010
City # Active Listings # Pending Sales Months of Inventory Months of Inventory Change 2010-2011 %
Danville 212 75 2.83 4.02 -30%
Alamo 99 25 3.96 3.30 +8.3%
Walnut Creek 241 98 2.46 3.51 -30%
San Ramon 237 130 1.82 2.84 -36%
Blackhawk 47 10 4.70 5.00 -6%
Diablo 12 0 0.00 16

 San Ramon Valley Inventory Levels June thru August 2011

City June 2011 July 2011 August 2011
Danville 2.84 3.3 2.83
Alamo 3.68 4.45 3.96
Walnut Creek 2.98 3.40 2.46
San Ramon 2.10 2.25 1.82
Blackhawk 4.82 5.33 4.70
Diablo 4.5 15 0.00

As can be seen from the data we are in more of a balanced market. Even though inventory is down, we are far from a Seller’s market.  Prices have yet to stabilize across the board. Again there are many niches within niches so to make a broad statement about prices up or down would need to be examined by the individual areas.

If you would like an evaluation for your neighborhood – please contact us for a free no obligation market analysis.

Share this:
Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

How To Buy More House with The Same Dollars

Save Money on Mortgage PaymentListen Up San Ramon Valley Home Buyers – 95% Financing is Real

Recently an email passed thru my inbox regarding 95% financing. Always on the look-out for any program making it easier for San Ramon area buyers to purchase a home, I immediately followed up on it.

I checked with a couple of lenders in my circle and they were unaware of the program. I asked that they please find out about it to see if it was worth pursuing for my San Ramon clients. Well it turns out this is a loan program that was popular in the past (not sure how far in the past) and is back. One of my lenders wanted to make sure he understood the program, inquired to those in his office that were aware of every program for financing. The answer YES this is a legitimate program. And it makes perfect sense.

95% mortgage loan has many benefits

When compared to a FHA loan at 3.5% down and with mortgage insurance added to the payment, utilizing the 95% money with PMI rolled into the loan amount provides buyers with the ability to purchase more home. It further makes sense since last week the interest rates dropped again to “all time lows” (I know we keep saying that but this time it’s true ).

Let’s take a look and compare a $500,000 purchase price:

FHA 3.5% Down Conventional 5% Down
Loan Amount                    $482,500  $475,000
Interest Rate  4.25%  4.75%
Taxes 1.25% $521/mo. $521/mo.
Homeowners Insurance $75/month $75/month
Mortgage Insurance 1.15% n/a
Principal & Interest $2,373.61 $2,477.82
Taxes $520.53 $520.53
Insurance $75.00 $75.00
Mortgage Insurance $462.39/mo. $0
Payment $3,431.53 $3,073.35

So bottom line, what does this really mean – if you qualify for a payment of $3400 per month then you will be able to afford more house for your money.Check with your loan officer to determine how much more.

Benefits of the 95% LTV & Lender Paid PMI:

  • Reduce your monthly payment
  • Afford more house with the same dollars
  • 95% financing
  • 680 Credit Score
  • Interest is deductible – MI is not

**Conforming loan programs only.

 

 

 

 

 

Share this:
Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Contra Costa July Home Activity – Market Update

Contra Costa Homes Sales Activity – Single Family Homes, Condos & Months of Inventory for All Areas

Single Family Home Activity for month ending July and Year to Date

For Cities in Contra Costa County below is the sales activity for July and year-to-date activity as compared to 2010. As can be noted all the Cities are showing a decrease in sales price from -2.4% for Moraga to -22.7% For Diablo. Blackhawk is the only area that can boast an increase of 3.8% over last year. That may be attributed to the fact that Blackhawk prices decreased over the past couple of years, and now the area is looking at a rebound.

Contra Costa County July Sales Activity
Condo/Townhome Activity for Month ending July and Year to Date:

Contra Costa County Condo Market UpdateCondo activity has suffered the most in all areas, due to the majority of these properties end up in foreclosure and many are cash only which lowers the prices further when no financing is available. Many investors have been purchasing these properties as rentals, as rental properties are currently in high demand.

Months of Inventory by City

July’s months of inventory is down 15% compared to the end of June by a little over a half percent, and down 40% compared to July 2010. According to historical standards the inventory is low and 6 months of inventory is viewed as a balanced market by the National Association of Realtors. All the Contra Costa cities in this report indicate less than the 6 month figure.

Contra Costa Inventory of Homes Ending July 2011

Share this:
Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Contra Costa Real Estate Market Update

Update for Contra Costa Home Sales Activity for the month ending June 30, 2011 – Activity and Average Sales Prices

Below are 2 charts (single family detached homes & townhomes) showing both the activity by units for all cities in Contra Costa and Average Sales Price as well. As can be noted Blackhawk is the only area where sales prices are up year to date.

Single Family Detached Homes

Activity by City # Units Average                                                          Sales Price by City

Townhome & Condo June Home Sales Results

For Single Family Homes some of the Cities (i.e. Blackhawk showing the most increase in sales and average sales price) are improving over previous months. Let’s look at May results

Average Sales price for the Month of May

  • San Ramon  Average Sales $705,162 and in June we now see $760,123 # Units 53 – more units closed in June
  • Moraga Average Sales price  $895,375 June results $984,844  Units Closed 12
  • Walnut Creek Average Sales price $711,365 – June $781,757 Same number of units closed
  • Clayton May results $485,805 – June results $520,408 same number of units closed
  • Danville showed a decrease with May results at $917,957 and June at $885,684 Same number of units

Inventories in most areas are still relatively low as shown in the chart below:

It is still too soon to tell what is going on in the market. The good news – homes are selling.

Source of data – CCAR

Share this:
Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

San Ramon Home Loan Limits to Drop September 30th

Fannie Mae & Freddie Mac Loan LimitsSan Ramon mortgage loans are not the only loans affected by the new rule, as conforming home loan limits will decrease across the nation effective October 1, 2011.

Bank of America is no longer accepting any loan applications that exceed the new limits as they want to ensure the loans will be funded prior to the change.

What Will the Impact Be with the Decrease in Home Loan Limits?

San Ramon  home loan limits were raised from $417,000 to a max of $729,750 about 3 years ago by Congress making it easier for home buyers to get mortgages which were backed by Fannie Mae, Freddie Mac and FHA. The down payment requirements were less with these government backed mortgages, such as an FHA loan at 3.5% down. The new lower limit of $625,500 in retrospect is not really that bad as Congress could have opted to go back to the lower limit of $417,000.

There are plenty of  homes in San Ramon and surrounding areas in Contra Costa & Alameda Counties for sale that are priced under $625,500. Home loans over this amount will require a higher down payment and possibly higher interest rate as they are considered jumbo rates.  The variance between the government backed and jumbo rates is not that significant – Jumbo 5.07% – FHA 4.62%.

Why Change Home Loan Limits Now

The change of lowering the government back limits is to reduce the government’s exposure in the mortgage industry and let private investor groups provide the funds for mortgages. In reality with these government backed securities it is the taxpayers that are footing the bill and taking the risk.

There are those that feel this is the wrong way to go with such a fragile housing market and really who knows. People bought houses before the mortgage limits were raised and I am sure they will continue to do so in the future.

My advice to those looking to buy a home in the San Ramon area and are not able to put 10 to 20 percent down, is to start your home buying process, as homes priced under $600,000 will be in high demand.

Share this:
Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

San Ramon Real Estate Activity May 2011

San Ramon Market Activity for May 2011 – Summary

May Year to Date
2010 2011 +/- 2010 2011 +/-
New Listings 93 55 -59% 422 476 +12%
Closed Sales 73 54 -73% 266 242 -9%
Average Sales Price $692.4 $687 -1% $773.4 $743.9 -3.8%
Average Days on Market 21.1 32 +34% 28 42 +53%
Percent of List Price 100% 98.5% 98% 98%

San Ramon Home Activity by Price – Detached Homes Thru May 31, 2011

Price Range Active Pending Closed YTD
$300,000 – $399,000 3 1% 2 1% 3 1%
$400,000 – $499,000 10 5% 21 13% 21 9%
$500,000 – $599,000 43 24% 25 16% 49 20%
$600,000 – $699,000 22 12% 27 17% 39 16%
$700,000 – $799,000 37 20% 29 18% 43 18%
$800,000 – $899,000 22 12% 23 15% 40 17%
$900,000 – $999,000 26 14% 15 10% 20 8%
$1,000,000+ 20 11% 15 10% 27 11%
183 157 242

Of The numbers above the following are:

Short Sales 29 16% 76 48% 21 9%
REOs (Bank Owned) 9 5% 15 10% 5 2%
Share this:
Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Danville Home Market Stats May 2011

Danville Market Activity for May – Summary

May Year to Date
2010 2011 +/- 2010 2011 +/-
New Listings 85 98 +15% 370 412 +11%
Closed Sales 47 59 +25% 195 197 +1%%
Average Sales Price $947,747 $899,043 -7% $895,131 $873,890 -3.4%
Average Days on Market 27 46 +70% 45 49 +6%
Percent of List Price 97% 93% -6% 93% 95% +2%


Danville Home Activity by Price – May 2011

Price Range Active Pending Closed YTD
$400,000 – $499,000 3 1.1% 7 15% 4 2%
$500,000 – $599,000 5 2% 7 15% 10 6%
$600,000 – $699,000 19 11% 12 9% 24 15%
$700,000 – $799,000 35 12% 24 22% 32 20%
$800,000 – $899,000 35 18% 15 14% 39 24%
$900,000 – $999,000 17 12% 14 13% 15 9%
$1,000,000+ 81 42% 27 25% 37 23%

Of The numbers above the following are Distressed Properties in Danville are:

Short Sales 26 13% 37 31% 33 17%
REOs (Bank Owned) 4 2% 9 8% 35 19%
Share this:
Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter