What is the difference between a Preapproval Letter and a Loan Commitment Letter?

May 14, 2013 by 7 Comments

j0403639_2Last week I shared how it’s pretty much mandatory that if you are a home buyer making an offer on a home located in the greater Seattle area, you better be equipped with a strong preapproval letter from a reputable lender.

Some home buyers are taking this a step further and requesting a Loan Commitment Letter from their lender. What’s the difference?

There are actually three levels of qualifications that a potential home buyer may have after contacting a lender. Please keep in mind that not all lenders may have the same standards or definitions as what I’m posting here.

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Filed Under: Residential Purchase Tagged With: , , ,

Is it necessary in Seattle to get preapproved to make an offer on a home?

May 10, 2013 by 1 Comment

Recently one of my out of state clients who is looking to buy an investment home in Seattle asked “Is it necessary in Seattle to get preapproved?”

The short answer: YES!  Unless you’re paying cash! And if you are paying cash, be prepared to show the listing agent and seller that you have proof of funds.

Redfin’s “Bidding War Report” reveals Seattle is the 5th most competitive housing markets in the nation with 74.6% of offers “facing competition” (multiple offers) last month.

With Seattle area home sellers having more than just one offer from potential home buyers to choose from, you must be preapproved by a reputable local lender. Listing agents will help the seller review the offers to determine which one is the best for their situation.

According to the Bidding War Report, if you’re buying a home in Seattle, you may want to consider getting your home inspection done BEFORE making your offer (aka a “pre-inspection”). Last month, 14.3% of “winning offers” on Seattle homes had pre-inspections and 19% waived their inspection contingency.

Pre-Inspect-to-Play: This 2-bedroom, 1-bath home in Seattle’s Phinney Ridge neighborhood had 300 showings, 19 pre-inspections (a competitive strategy common in Seattle in which the buyer has the home inspected before submitting an offer so that they can safely waive the inspection contingency), and more than 30 offers….

What did the “winning offers” have for financing in Seattle last month? 

  • 63.1% used conventional financing
  • 4.8% used FHA or VA financing
  • 2.4% paid cash

10.7% of “winning offers” waived their financing contingency.  17.9% of “winning offers” included a cover letter, or a “love letter” to the seller about why they want to buy their home.

This is great news for home owners who have been contemplating selling their home. Last night, King 5 aired this story about a couple from Seattle who sold their home in a matter of days for more than they expected with several strong offers to choose from. 

Rising home prices will also help home owners who have been waiting for their home values to go up so they can refinance (if they don’t already qualify for HARP or a FHA/VA streamline refi). 

ATTENTION HOME BUYERS is the greater Seattle area: you’ve got to get your game on if you want to “win” in a multiple offer situation! Be sure to get preapproved from a local trusted lender. Your preapproval letter needs to be strong enough to give the seller and listing agent confidence that you are the most qualified buyer with the highest odds of having the transaction close quickly and without issues. Here’s a list of what you’ll need in order to be truly preapproved…if you’re working with a lender who has not requested these items, you’re probably just prequalifed and there is a HUGE difference.  

If you are considering buying or refinancing a home located in Seattle or anywhere in Washington state, where I’m licensed, I am happy to help you! I have been helping home buyers with their mortgage needs at Mortgage Master Service Corporation for 13 years. Click here for a rate quote or contact me to start the preapproval process.

Filed Under: Real Estate, Residential Purchase Tagged With: , , , ,

S&P Case-Shiller reports homes prices up in Seattle

April 30, 2013 by Leave a Comment

The  S&P/Case-Shiller Home Price Index was released this morning showing that home prices across the country are up 9.3% year over year through February based on the 20-City Composite. All 20 cities in the composite have reported increases in home prices over the last two months.

Some cites are experiencing double digit increases. Seattle’s home prices are up 9.3% year over year per this report.

SP Case Shiller Apr30
 

From the report:

“Home prices continue to show solid increases across all 20 cities,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “The 10- and 20-City Composites recorded their highest annual growth rates since May 2006; seasonally adjusted monthly data show all 20 cities saw higher prices for two months in a row – the last time that happened was in early 2005….”

If you are considering buying a home in Seattle or anywhere in Washington state, I strongly recommend that you meet with a licensed mortgage originator and start the preapproval process early. I’ll often meet with home buyer six months to a year before they’re planning on buying a home. If I can help you, please let me know!

Filed Under: Economy, Residential Purchase Tagged With: , ,

Buying a Duplex to live in with an FHA mortgage

April 26, 2013 by 4 Comments

mortgageporter-seattle-duplex-1One of my favorite blogs to follow, Get Rich Slowly, recently published Reader Stories: I bought a duplex to save money on rent. The author of the post describes how he used an FHA mortgage to buy a duplex and with renting out the unit he was not living in, he wound up paying less for his housing than when he was renting.

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Filed Under: FHA, Investment Property, Residential Purchase Tagged With: , ,

Your First Home Mortgage Guide Book

April 23, 2013 by 2 Comments

My most recent guide book, Your First Home Mortgage, is filled with information that I hope first time home buyers will find useful. Please feel free to share this book with anyone you know who is considering buying their first home.

You can find a collection of my other guide books and slide shows by visiting the Mortgage Porter library.

Remember, if I can help you with your mortgage needs, including buying or refinancing a home located anywhere in Washington state, I’m happy to help you! Click here for a free rate quote.

PS: If you’re interested in attending one of my home buyer seminars sponsored by the Washington State Housing Finance Commission, click here.

Filed Under: Books, First Time Home Buyer, Residential Purchase Tagged With: , ,

House Key Opportunity – Washington State Bond Mortgage Program

April 17, 2013 by 5 Comments

UPDATE MAY 1, 2014: FUNDS ARE BACK FOR HOUSE KEY ARE BACK – AND ARE LIMITED.   

House Key Opportunity is a mortgage program offered by the Washington State Housing Finance Commission. House Key Opportunity is probably the program you’ve heard about when someone mentions “state bond” mortgages. This program offers below market mortgage rates for a select group of home buyers and is often combined with a WSHFC second mortgage for down payment assistance. The rates are only available until the funds reserved for the program run out.

Here’s a quick review of House Key Opportunity:

  • Borrowers must be first time home buyers (or have not owned a home in the last three years) unless you’re buying in a “targeted area”.
  • Income limits apply based on the size of the household with the first mortgage. Additional income restrictions may apply with the DPA (down payment assistance) second mortgage.
  • Maximum acquisition cost applies based on county.
  • Home buyers must attend a WSFHC approved class.
  • Property must remain owner occupied or recapture tax applies.
  • Properties must have an inspection unless a 1 year warranty is provided by the builder.

The House Key Opportunity Program with down payment assistance programs are available to borrowers who meet specific program requirements. Amounts and terms of the DPA vary with each program. The second mortgage programs listed below may also be used with a Home Advantage first mortgage and are provided based on need. Not all of the DPAs listed below have constant funding so availability may be limited.

  • The HomeChoice Program: eligible borrowers must have a qualifying disability or have a family member with a qualified disability living with them. Maximum DPA is $15,000.
  • House Key Schools: borrower must be an employee of an accredited or state recognized K-12, public or private school including community and technical schools. Max DPA is up to $10,000.
  • House Key Veterans: eligible borrowers are veterans who received an honorable discharge and include members and honorably discharged former members of the Washington national guard and reserve or never remarried spouses and dependent/children of deceased veterans. Max DPA is $10,000.
  • New Home for You: available to first time home buyers (or targeted area) meeting criteria and buying a never occupied new construction home. This program is only available with a House Key first mortgage and requires credit scores of 680 or higher. Max DPA is $10,000.
  • House Key Plus ARCH: first time home buyers must be purchasing a home in designated areas of east King County. Max DPA is up to $30,0000.
  • Home Advantage Rebound: the home being purchased must be bank owned, foreclosed or a short sale. Max DPA is up to $10,000

Home buyers seeking down payment assistance, who do not want to buy in a targeted area or who are not first time home buyers or who do not meet the specific needs criteria, may opt for WSFHC Home Advantage Program.

For current rates on House Key Opportunity and more information about this program, click here.

As a Washington State Housing Finance Commissioned trained Loan Officer, I’m pleased to offer both House Key Opportunity and Home Advantage mortgage programs. Here as a list of WSHFC classes where I will be one of the instructors.

If I can help you with your home purchase or refinance on property located anywhere in Washington, please contact me.

Filed Under: Down Payment Assistance, Home Advantage Program, House Key Opportunity, Residential Purchase Tagged With: , , , ,

Home Advantage Mortgage with Down Payment Assistance

April 11, 2013 by 4 Comments

2013-03-07_0746Home Advantage is a program that is offered through the Washington State Housing Finance Commission.  Home Advantage is typically combined with a Home Advantage second mortgage that can finance closing cost and the down payment. Unlike the House Key program (state bond), this program has unlimited funds available for qualified Washington home buyers.

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Filed Under: Down Payment Assistance, FHA, First Time Home Buyer, Home Advantage Program, Residential Purchase Tagged With: , , , ,

Median Home Prices up 18.5% in King County

March 6, 2013 by Leave a Comment

A few days ago, I shared an article about how the greater Seattle – Bellevue – Everett area is one of the top 5 places in the country to be a home seller.  Yesterday’s article in the Seattle Times appears to back that up.

A record-low inventory of homes for sale in King County, very low interest rates and a growing Puget Sound economy combined to push the median price of houses sold in February to $365,000, an 18 percent jump over a year ago.

Only 2,947 homes were listed for sale in King County last month, down from 5,178 a year ago, according to Tuesday’s report by the Northwest Multiple Listing Service.

I’m currently working with several pre-approved buyers who are ready, able and wanting to buy a home in this area. What they need is more inventory.

If you have been considering selling your home, now could be the time. You may find that you have an advantage being listed before other homes plan to go on the market for Spring.

If you are planning on buying a home, I cannot stress enough how important it is to be prepared for competition. It’s crucial to be fully preapproved with a local, reputable mortgage professional.

If you’re considering buying a home in King County, or any county in Washington state, I’m happy to help you with your mortgage needs. 

Filed Under: Residential Purchase Tagged With: ,
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