American Pacific Mortgage

American Pacific Mortgage

Monday, November 30, 2009

Rates Repeat Record Lows of 2009

Interest rates finished the day at their lows of the least equal to the lows of January and March. A 30 year fixed rate loan under $417,000 can be had at 4.375%-- depending of course on credit scores, loan-to-value and debt-to-income ratios.

If you have been sitting on the fence, now is the time to act! Expect delays in processing time due to high volume just as we saw earlier this year.

Wednesday, November 18, 2009

October Housing Market Stats

The numbers have just been released, and they indicate rising home prices and fairly stable volume. This is primarily attributed to continued low interest rates and prices, coupled with the federal tax credit.

The median closed sale price in Orange County last month was $436,500, which is up 3.9% over October 2008.

Sales of existing homes were basically flat, but foreclosures and defaults are rising. Entry level homes are the big news—60% of sales are in the price range under $400,000 and 10% are under $500,000. Anything in the high end, over $800,000, is taking much longer to sell and represents less than 4% of total sales.

Average down payments are just under 20% meaning most successful buyers are utilizing conventional financing. Any time a bank seller is involved, whether for bank-owned or a short sale situation, they tend to avoid FHA financing like the plague.

Short sales are picking up steam and getting easier as banks are avoiding foreclosure and are more amenable to work with the property owner.

Beautiful Buena Ventura

I visited downtown Ventura last weekend. Much to my surprise, it was a happening place! I was amazed at the number and variety of restaurants, clubs, and activities.

Although we were in Ventura earlier this year in March, on that trip we drove directly to the Harbor on a Friday evening. We had dinner at a restaurant, and slept on our dive boat in preparation for an early morning departure for scuba diving the Channel Islands. Our favorite Santa Barbara seafood restaurant, Brophy Bros, has a restaurant located there. The Harbor offers a great selection of other fun eateries and bars.

That Saturday we dove around Anacapa Island (the closest to Ventura) at three different locations. The most exciting was on the west side of the island, where we swam with a large group of sea lions, who followed us around and played with us.

During our visit last weekend—primarily for a high school football game—we stayed at a motel walking distance to the beach and historic pier, and a block to the downtown area.

After an early dinner on the pier to watch a spectacular sunset, we headed out to the game. Our first stop back in town, around 10:00 p.m., was the Bombay Bar & Grill which we had been advised was a dancing “hotspot.” Expecting to see a crowd of 20- and 30-somethings, we were greeted by a large group of all ages, dancing to a live band playing current top 40’s. No cover charge to enter! There was plenty of room at the bar, which was nice, and the bartender kindly held my purse while dancing. In the back of the restaurant, the club scene with a DJ was just getting started. Definitely a younger set there—and the action starts later.

Next we headed out on California towards Main Street, and crossed to another restaurant where we heard live music playing. On Main Street itself, we were greeted by more music on all sides. It felt like a battle of the bands. We heard everything from Jazz and Reggae to Rock and Hip Hop. I can’t wait to go back and explore some more!

Monday, November 16, 2009

More Details on the Tax Credit for Home Buyers

The tax credit extension for first-time homebuyers includes some new twists and turns:

1. Buyers must have a binding contract in place by April 30th, and the purchase must close by June 30, 2010.

2. The credit has been expanded to include a $6500 credit for existing homeowners. They must have owned a home in the last three years, and have lived in the same primary residence for five consecutive years during the past eight-year period.

3. Income limits have increased – up to $145,000 for individuals and up to $245,000 for joint filers. The amount of the tax credit decreases as the income increases.

Don’t procrastinate if you think you may be eligible for a full or partial credit and want to take advantage of this program. It can take you more than one or two offers in the current climate before an offer is accepted, and oftentimes bank sellers move more slowly to process offers than a typical owner-occupant. Most of my buyer-clients this year had to make multiple offers before one was accepted. Also, they seemed to have better luck with individuals or rehab companies than with the banks.

Remember, home prices over $800,000 don’t qualify. And, tax credit qualifiers must be at least age 18.

Rates have improved the last few days – but beware, as we are trading near the bond price highs of the year. They can deteriorate rapidly which could result in a rapid increase in rates. If you want to refinance take advantage of the rates ASAP!

Tuesday, November 10, 2009

Tax Credits and Rate Outlook

The big news last week in the Mortgage Biz was the extension of the tax credit for first time homebuyers. This credit is actually worth, dollar-for-dollar, any taxes paid or due for this year or next, up to a maximum of $8000. The amount of the credit depends on a number of factors including purchase price, gross income, etc. * This means you have to have paid taxes, or owe them, to collect the credit.

The bigger news is that the credit was actually amended to include “move-up” buyers who owned a home in the last five years.
There is quite a bit of fine print to the guidelines-- including a maximum home price of $800,000.

Please call me with questions and if I don’t know the answers, I will find out.

My daughter Katie qualified for the credit this year after her purchase of a condo in Ann Arbor. The whole process went very smoothly post-closing and she received her refund check in a few weeks.

On other fronts, interest rates continue to exhibit volatility, but are still very attractive.
Mortgage backed securities are currently trading just below their earlier highs of the year. This translates to rates that are near bottom, and long-term these will begin to rise as our economy levels out and improves. As soon as the hint of inflation is on the horizon we will see movement towards increasing yields. Translation: higher rates.

The Federal loan programs to refinance loans owned by Fannie and Freddie continue. If your loan is currently owned by one of these entities, and you do not currently pay mortgage insurance, you will not have to pay for MI, even if your current loan balance is equal to 125% of current value. Rates are comparable to current market rates, with good credit scores. The big catch is, who owns your loan? You can check this out yourself on these websites: