WHEN CAN I BUY A HOME

          So if you have had a foreclosure or short sale or bankruptcy – when can you buy a home? The chart attached from the Realtor Magazine, March 2013 provides some helpful information. All cases are different so this chart is not set in stone. We just closed a couple who short saled their home 2 years ago and they were ready to buy. The key is to re-establish good credit after the incident took place. If the house foreclosure/short sale is the only incident on your credit report, it’s explainable. The same holds true for bankruptcy.

          See attached, but give us a call if you are 2 years removed from your housing crisis. We may have a plan that can get you back into homeownership.

Thanks,

Brian

Click For Short Sale Chart

This week’s blog: Courtesy of Kevin Bent Academy Mortgage 719-339-2728

2012 FINAL STATISTICS FOR HOME SALES IN COLORADO SPRINGS

           Yes all reports that 2012 was a rebound year are true. We finished the year with 2933 homes for sale which was 11.7% less than 2011. Sales equaled 9146 sales which was 8.1% better than the year before. Average sales price went up 5.8% to $230,415.

          So what does this mean for 2013? Home prices will go up! They will especially go up on homes below $300,000. Homes above $500,000 will continue to be flat if not dropping more. The reason is we still do not have enough high paying jobs to support all the upper end inventory. Interest rates are projected to stay low thru summer with slight increasing late spring.

          All of this is recovery! If you wait now, you will miss the end of the market. Get in if you can. We can show you how. Call us at 719-593-2963

Thanks,
Brian

 

COVENTIONAL LOAN VS. FHA LOAN

The housing finance market is again taking another hit with FHA   raising their MIP (Mortgage Insurance Premiums). They are raising the premium to 1.5% of the loan balance. When I started in 1986 this rate was .5% which made FHA a good option for folks. The advantage is and always has been low down payment. The required down payment for FHA is 3.5%. These funds can be gifted from family members and was a nice beginner home option.

Today, with a little more down payment, 5%, conventional loans may be a better option. Mortgage insurance varies depending on credit scores. The higher your credit score the lower your mortgage insurance premium. The attached graph illustrates the point with good credit scores. Today on a $200,000 loan with 5% down payment and a 721 FICO score, you would save $106 per month.

We used to always recommend FHA for folks with low down payment options. In addition, there is still VA, but it’s only available to veterans. Some private banks and credit unions are offering 3% down with 1% mortgage insurance premiums. All institutions have various guidelines. All are a little tougher.

Please give us a call and let us help with your decisions. Allow my 27 years of experience to work for you. See the graph attached and I will talk next week about Bond options.

Thanks,

Brian

Will the Elections change the market? Not right off! The effects of the elections will not really affect the market until there is a solution for jobs. Here in Colorado Springs the market is red hot below $250,000. Above $400,000 it’s real slow. The reason-JOBS. Our city has lost 1000’s of jobs and it’s our local government that needs to improve our area. It’s not directly related to the presidential election. The president can only do so much. Congress needs to work together. Our city needs to do the same thing. Our mayor Bach can only do so much. The city council needs to approve tax breaks to companies. Our Economic Development council needs to go looking for jobs. Our city utilities need to keep costs down. Our roads department needs to improve our roads. We need to expand the airport. We need to turn the lights on and let the world know we’re here.

So elect people who get these things done and our market will improve.

Thanks,
Brian

1.      Get Qualified by a licensed professional mortgage lender. This is the first and most important step. A good lender with lots of experience are game changers.
          A.    Pull that credit score, the better the score the better the mortgage
          B.     Run the income to debt ratio to find out what you can pay as payment
          C.     Consider your down payment options thru Conventional, FHA & VA loan programs
          D.    Have some savings
          E.     Don’t buy that car or anything big until you buy your home first

 2.      Choose a Realtor

 3.      Pick an area

 4.      Get insurance-shop rates with reputable firms

 5.      Arrange moving
           A.    Movers
           B.     Utilities
           C.     Food for friends helping.

6.      MOVE IN AND ENJOY!!       

            I hope you like my brief tour of buying a home. Please visit my Facebook (The Brian Maecker Team) or website (www.maecker.com) for more details.

Thanks,

Brian

           Now is a great time to sell!!  See the attached stats and you will see that inventory is down 19.9% and prices are up 3.8%.  In addition interest rates are still in the low 3’s.  We are selling homes on average in 61 days while the city average is 91.  Call us and we can show you how to take advantage of this turnaround.

Thanks,

Brian

Dear Friends,

            I hope my letter finds you well and getting used to writing “2012” on everything. We are coming out of 2011 with one of our better years. We closed 173 homes which is right up there with some of our record years. How did we do it? Your REFERRALS were a big part of our success. Over 110 of those transactions were a result of past clients and referrals. THANK YOU!! Your support and trust mean the world to us. I take that very seriously and we do the best we can in every situation.

            The other part of our success is honest straight forward information. The Colorado Springs market has now been on a downslide for 5 years. In 2011 we saw across the board another 5% drop in prices. Foreclosures and short sales remain a constant factor in pricing. They are affecting all price ranges, and all areas. We are battling this everyday as buyers want “Good Deals”. As you can imagine, this is a hard conversation to have with seller clients.

            That said, there is Good News! In 2011 we saw inventory has dropped 24% from 2010. So far through February 2012 that figure is remaining constant. There are a lot less foreclosures and short sales in the market. I still expect there to be a constant supply of these homes for next few years. The other Good News! Interest rates remain VERY LOW! As of today Kevin Bent @ Academy Mortgage quoted 3.75 on 30 year fixed mortgage.

            So what are we doing to succeed in these times? In addition to being straight forward with information, we have embraced technology. My website at www.maecker.com is the hub of all activities. That site is linked with over 60 domain names. We capture leads here and Realtor.com as well as Remax.com. We use 24 hour hotlines that text message my phone, it provides instant information to buyers and notifies me. We blog at coloradospringsblog.net weekly. I provide updates of the real estate market and yep, we also do facebook. Come visit and become a fan of “The Brian Maecker Team” and most important is the lead follow up. This is one area that hasn’t changed-I call and or email ALL LEADS.

            What’s 2012 market going to do? Recover. I think the bottom is here right now, except for the high end market. I see stabilization. I see some improvement in lower and middle priced homes. I see interest rates remaining low into the summer. I think our city is on the mend as long as we keep all our military here and employed. We do need more higher paying jobs to help the high end market.

            I am here to serve your Real Estate needs. I’m in my 26^th year and have sold over 4000 homes. Let me know if I can help you or your friends. I REALLY APPRECIATE YOUR LOYALTY AND YOUR REFERRALS!!

Thanks,

Brian

Anatomy of a Note Rate

How the Gfee change impacts rates and pricing

Our “new” mortgage business is full of complexities, regulation, and more regulation.  Over the past couple of weeks I’ve had many inquiries regarding the increase in guarantee fees (GFee) mandated by FHFA per Congress.  To dispel the confusion, I would like to take a couple minutes of your time to explain how this affects your borrower’s note rate. 

First, what is the actual Gfee?  The main component is charged to protect against credit related losses in the mortgage portfolio (think of it like Mortgage Backed Security Insurance), but small sub fees are also deducted to cover internal expenses for such services as:

·         Managing and administering the securitized mortgage pools

·         Selling the MBS to investors

·         Reporting to investors and the SEC

·         Maintaining the MBS on the open market,  general and administrative expenses

·         And now at least 10bps to cover the extended Payroll Tax cut (Note this is a 10 Year effective period)

Below is the FHFA release from December 29, 2011:         

“On Dec. 23, 2011, President Obama signed into law the Temporary Payroll Tax Cut Continuation Act of 2011. Among its provisions, this new law directs the Federal Housing Finance Agency (FHFA) to increase guarantee fees charged by Fannie Mae and Freddie Mac (the Enterprises) by no less than 10 basis points from the average guarantee fees charged by these companies in 2011 on single-family mortgage-backed securities.

This requirement is effective immediately, meaning that the average guarantee fees charged in 2012 need be at least 10 basis points greater than the average guarantee fees charged in 2011 and that this increase be remitted to the U.S. Treasury, rather than retained as reserves by the Enterprises. The law also requires FHFA to determine a schedule for guarantee fee increases over a two-year period that must satisfy other requirements of the law.

To begin implementation of these requirements, today I am directing Fannie Mae and Freddie Mac to announce before year-end to their seller-servicers that, effective April 1, 2012, the guarantee fee on all single-family residential mortgages shall increase by 10 basis points.

In early 2012, FHFA will further analyze whether additional guarantee fee increases are appropriate to ensure the new requirements are being met. FHFA will announce plans for further guarantee fee increases or other fee adjustments that will then be implemented gradually over the two-year implementation window, taking into consideration risk levels and conditions in financial markets. FHFA will monitor closely the increased guarantee fees imposed as a result of the new law throughout its effective period, which ends Oct. 1, 2021.”

How does it really work?

 I hope this clears up some of the murkiness of the changes that occurred.  2012 is positioned to be a pivotal year in many ways. If you have any pricing questions, never hesitate to contact me at lori.sorrels@caliberfunding.com or (719) 440-0433.

This week’s blog is courtesy of Lori Sorrels of Calibur Funding regarding new Gfee.

Did you know that home affordability is down to 2004 levels? Yes, today’s prices are in line with values that were before the “bubble”. This data and statement are supported by the Wall Street Journal on Feb. 9, 2011. In the Colorado Springs area as well as most of the country we have dropped 15-20% from the peaks of 2008.

            In the years from 2004-2008 the only thing driving the market was “funny money” you know the creative financing. Today remains a great time to buy as interest rates remain around 5%

            So why aren’t more people out here buying a home? Are you thinking values will continue to fall? Let’s look at this. One other fact that needs to be introduced is that interest rates will go up. So let’s look at why “NOW” is a good time. For example today a $200,000 loan @ 5% is a $1074.00 a month payment principal and interest. Let’s assume prices drop another 5% and rates go up to 6%. So a $190,000 loan @ 6% = $1139.00 a month. See what I mean!

            The solution is offer and hope to get the 5% price savings now and get the good rates. A $190,000 loan at 5% = $1020.00 per month. Sellers are anxious to make this work. They will also help with closing cost.

            Call us at the Brian Maecker Team and we will show you how to take advantage of this market.

Thanks,

Brian

I hope all of you had a nice Christmas season. Did you get what you asked for? Was Santa good to you? I hope so! Well as we roll into 2011, it’s all about what the market will give you.

            If you are a seller, the market is going to give you values that are similar to what we saw in 2004 and 2005. The market has lost all gains that we saw in the boom years. Those boom years stole buyers from today with all the creative mortgages and almost all those purchases are the foreclosures of today. If you are a seller the market will allow you to sell, but at a value that is probably much lower than you want.

            If you are a buyer, the good values are starting to go away. Most of the inventory below $300,000 has remained steady for the last 6 months. Below $200,000 we have actually seen some increases in some areas as inventory is tight. Interest rates have started to rise. We saw a low of 4 1/4% and today we are around 5%. I expect rates to gradually increase throughout the year topping out at just over 6%. If you are a buyer, the low point seems to be here if not already passed. The perfect storm of low rates and desperate sellers occurred in October and November.

            So as I have been preaching all year in 2010, I preach again in 2011. Don’t sell unless you are doing a move up or you have to. If you are a buyer, BUY NOW before rates and prices increase. Very few can hit the absolute low point. If we are not there, we are close. 2011 will be stable with no real appreciation. We still have lots of inventory to sell. There will be no booms like 2006-2008. Those were record years. We are closer to normal than most remember. I think 2012 will see growth and perhaps 2-3% appreciation and that will be the norm. When you compare to the volatility of stocks, real estate is stable and very safe over the long haul.

            HAVE A PROSPEROUS, SAFE AND HAPPY NEW YEAR!          

Thanks,

 Brian

This week’s blog is courtesy of the Wall Street Journal’s Brett Arends. Below is his article on 10 Reasons to Buy a Home.

By now, we are all seeing the results of the 2010 election. Whether your candidate got in or not, how will the results affect housing?

            In my opinion, in the short term not much. While the Republicans did make gains in the House and Senate, it will not change the amount of foreclosures in the system. Foreclosures will continue to make headlines throughout 2011. As a result, home prices will not see any gains and in fact we will probably see a bit more of a drop. Right now here in Colorado Springs and throughout the country inventory is up. In El Paso County, home inventory for sale is up 15%. The good news in this, is that I believe with a republican resurgence there should be more confidence. People hopefully will become more confident their jobs will stay intact. Because of the republicans there should be tax incentives for businesses to hire more people; this combined with record low interest rates should help eliminate the standstill in the economy.

            Long term, there are still issues. As well as the foreclosures, there are inflation concerns and the infamous health plan bill has some spikes in it that affect housing. I have not read it, but I have seen 3 reports now that says the Health Bill will tax housing in the future. I have heard it will be a 3% tax to pay for health. How housing and health bills got on the same laws, tells you how jacked up our government is. If that is true and the democrats raise capital gain taxes, you can kiss off any long term recovery.

            In all this is the “New Normal”. It was similar in the 1980’s & 1990’s. I don’t see any spikes in value anytime over the next 3-5 years. In El Paso County I think we will be flat in 2011 and start seeing some appreciation in 2012. Appreciation will probably not exceed 5% in any given year and 2-3% per year will be normal. Lenders need to loosen up a bit too. They have really heightened their standards and that needs to change to foster growth.

            Lets all forget about the “Good Ole Days” of 2004-2007. It’s almost 2011 and let’s start accepting the fact that a home is solid investment with slow growth. It’s not a cash register.

Thanks,

Brian