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: , , , ,

HARP 3.0 Update

May 6, 2013 by Leave a Comment

Insider Mortgage Finance recently posted this teaser indicating that President Obama is pushing for the eligibility dates for HARP 3.0 to be expanded.

“The Obama administration has sent a message to the mortgage industry that it wants to expand the Home Affordable Refinance Program by changing the eligibility date for high loan-to-value and underwater borrowers who want to refinance loans financed by the government-sponsored enterprises. According to members of the Mortgage Bankers Association who attended a recent pow-wow at the White House, the administration wants to push the eligibility date for HARP into mid-2010 or so”

I say “teaser” because in order to read the full article, you need to $ubscribe. 

The odds of HARP 3.0 becoming a reality may be better should President Obama’s nomination of Representative Watt to head the FHFA become a reality.

Currently many home owners who had their mortgage securitized by Fannie Mae or Freddie Mac June 1, 2009 or later have not been eligible for a Home Affordable Refinance (HARP).

HARP allows home owners who have lost equity and who would otherwise qualify, to refinance at today’s very low interest rates. 

Having the securitization date expanded (if not removed completely) would be of great relief to many Washington state home owners. 

Stay tuned!

Filed Under: HARP - Home Affordable Refi Tagged With: ,

Mortgage Rate Update for the Week of May 6, 2013

May 6, 2013 by Leave a Comment

This week’s calendar is looking a little light as far as scheduled economic indicators which may influence the direction of mortgage interest rates. 

Thursday, May 9: Initial Jobless Claims

Wow…. that was exciting! 🙂

On Tuesday, the Treasury will begin to sell $27 billion in notes and bonds which may impact mortgage rates as they are based on mortgage backed securities (bonds).

Remember, you can follow me on Twitter @mortgageporter or on Facebook to trending information about mortgages. Of course you can always subscribe to my blog too. You can unsubscribe at any time.

If you are interested in refinancing or buying a home (primary, second home or investment property) in LaConner, Langley, Lynnwood or anywhere in Washington state, where I’m licensed, I’m happy to help you. Click here for a mortgage rate quote.

Filed Under: Economy Tagged With:

Why is the Jobs Report so important to mortgage rates?

May 3, 2013 by 1 Comment

MortgagePorter-JobsReportTypically on the first Friday of every month, the Bureau of Labor Statistics releases the Employment Situation Summary, otherwise known as The Jobs Report. This report details specific employment trends, including how many Americans are employed with “non-farm” jobs, trends in various fields of employment, income and hours worked. It also includes the “official” unemployment rate. The data contained in the Jobs Report carries a lot of weight and is considered one of  our country’s stronger economic indicators.

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Filed Under: Economy, Interest Rates Tagged With: , ,

Reader Question: Can Closing Cost be financed with a VA Loan?

May 2, 2013 by 3 Comments

I received this email from one of our subscribers:

 ”…with a VA mortgage,  can you finance buyer closing costs in excess of the purchase price (e.g. not ask for seller financing contributions, but just borrow them in excess of the purchase price)”

With a VA mortgage, the buyers closing cost cannot be financed, with exception to the VA funding fee, regardless of the appraised value.

The VA loan amount is limited to the purchase price, appraised value or VA county loan limit (or VA jumbo loan amount)*, whichever is less.

*NOTE: VA does not set actual loan limits on counties. They do set a limit as to their maximum guarantee (meaning zero down financing). In the greater Seattle/King-County area, the loan limit for zero down financing is currently $500,000. Click here for a complete list of VA loan amounts per county.  VA loan amounts exceeding $500,000 in the Seattle/King County area are considered VA Jumbos and will require some down payment depending on the difference between the sales price and county loan limit. 

USDA loans, on the other hand, will allow for buyers closing cost to be financed IF the appraised value is higher than the sales price. The loan amount is limited to the appraised value and must be applied to bona fide closing cost.

USDA loans are also zero down programs and are only eligible in specific designated rural areas, like Snoqualmie, Carnation or Duvall, and to borrowers who meet certain household income limits. 

Sellers can contribute towards closing cost for both of these mortgage programs and currently, low mortgage rates are often paired with enough rebate pricing to cover a majority of the closing cost.

Thanks for your question!

Filed Under: USDA, VA Mortgage Loans Tagged With: , , , ,

The Fed to continue keeping mortgage rates low

May 1, 2013 by Leave a Comment

The Fed just wrapped up their two day meeting and have issued their press release. Here are the tid-bits relating to keeping mortgage rates at artificially sweet and low levels.

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee decided to continue purchasing additional agenc mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

The Committee will closely monitor incoming information on economic and financial developments in coming months. The Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. The Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes. In determining the size, pace, and composition of its asset purchases, the Committee will continue to take appropriate account of the likely efficacy and costs of such purchases as well as the extent of progress toward its economic objectives.

As expected, there was no change to the Fed Funds rate.

If you would like to lock in a sweet and low mortgage rate for your home purchase or refinance for homes located in Washington state, please contact me.

Filed Under: The Fed - FOMC Tagged With: , ,

One month left before FHA mortgage insurance is permanent…SO WHAT??

May 1, 2013 by Leave a Comment

Borrowers not wanting to have FHA mortgage insurance as part of their mortgage payment for the life of the loan have about thirty days to take action. This shouldn’t be a reason to panic. 🙂

Effective FHA case numbers issued June 3, 2013 and later, FHA mortgage insurance will become a permanent part of the FHA mortgage payment.

Why do I say “SO WHAT?”

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Filed Under: FHA, Mortgage Insurance, Opinion 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: , ,
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