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Dan the loanman

Time to buy!

Wednesday, January 25, 2012 - Article by: Dan the loanman - ArcStone Financial Services - Message

Yes there is promising news for California real estate and across the nation in 2012.

Homes Sales - Sales are stabilizing overall and were up 4.2% in December in the state. Of note is that 52% of Southern California home sales are "distressed" properties (1 in 3 foreclosures and 1 in 5 short sales). Good that they are selling because we will not be completely healthy until these homes are moved. Investors (26% of the sales) are getting great deals as are first time homebuyers and second home buyers - but they have to move fast to get in escrow. (Best time in long time to buy? - Read what the guy who called the crash says now HERE.

Home Values - Many believe the worst is over in most areas and many realtors are seeing multiple offers. With rates in the 4's homes have not been this affordable for a very long time. The median price for Los Angeles was $307,000 last month.

With rents rising homes are becoming cheaper than renting. For those who bought when prices were higher, see below (HARP 2.0).

Getting a Mortgage - Can you afford the payments? You can probably get a loan. If you can't you can't. In all cases there is lots of documentation, questions and getting the loan closed on time can be stressful. Buying a median price home today, with 20% down would cost only about $1,500/month including property taxes and insurance. Cheap.

Underwater? - Washington is finally getting it. Allowing homeowners to refinance who have always paid their mortgages on time but can't refinance because they are underwater on the loan is smart. More money in the borrower's pocket is more money into our economy. Yesterday I read that the talk of "low doc" and even "stated income" may be used in the future. Well, careful boys, but if a guy is working and has been current why not make it easy and let the banks take less?

The program is called HARP 2.0 (coming in March). There would be no minimum appraisal value. However, this program is only for loans owned by Fannie Mae or Freddie Mac closed between 2006 to 2009.

Commercial Property - Strength in office and industrial markets reflects growth prospects for employment. For homes it is all about jobs. Commercial was in a free-fall in 2008 and 2009 but it has started recovering. Especially strong jobs recovery is seen in San Diego and coastal areas of Los Angeles.

Most Frequent Question - Conforming loans, jumbo loans, Fannie, Freddie what's the difference?

o Fannie and Freddie loans are up to $625,500 loan (FHA to $729,750) and the max loan amount varies by county. Down payments as low as 3% (3 1/2 % FHA and ZERO VA-GO VETS!)

o Jumbo loans - Over $625,500 and cannot be sold to Fannie or Freddie and no HARP. Bit higher in rate 1/2 % or so and require at least 20% down.

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