Changing Interest Rates of Jumbo & Conventional Home Loans

Changing Interest Rates of Jumbo & Conventional Home Loans

Changing Interest Rates of Jumbo & Conventional Home Loans

Interest rates for home loans which exceed $417,000 (jumbo loans) have been averaging a lower interest rate than a traditional 20% down conventional loan. Currently, a $250,000 loan is paying a higher interest rate than in jumbo loan.

Shouldn’t jumbo loans have a higher interest rate for putting the bank at a higher risk?

There are some changes changes that are happening in the current lending industry. Conventional loan fees have increased due to lenders sustaining losses. Also, lenders are using jumbo loans to entice wealthy individuals to serve their other financial needs such as brokerage services and financial management.

Is it going to stay this way?

No, it’s temporary. Now the high-end homes are selling, bankers are using the conventional loans to make up for some of the losses. Once the lenders start taking losses on the jumbo loans, it’ll change again.

Tune in to KXL’s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Should buyers & sellers purchase a home warranty?

Home Warranty

Should buyers & sellers purchase a home warranty?

Quite honestly, home warranties are a great idea.

When we’re selling a home, it’s something we use as a value proposition. We market the home warranty to potential purchasers. During the transaction, a home warranty can help with inspection or repair negotiations.

Recently we had an inspection on one of my listings where the inspector found that the furnace was functional but it was near the end of its useful life. In lieu of replacing the $3500 furnace, the seller offered the buyer a home warranty. If something goes wrong in the near future, for a service fee of $60, the buyer will have the furnace repaired.

What is the cost of a home warranty?

A one year home warranty will cost approximately between $400-$500 depending on which company and add-ons you choose. They’re definitely worth the money.

We purchase one every year for our house. Our oven stopped functioning so we filed a claim with the home warranty company. They weren’t able to repair it due to it’s age (they couldn’t find the parts to repair it) so they purchased us a brand new $1200 oven.

Our buyer specialists search for homes that offer complimentary home warranties as it provides additional protection for the buyer. However, if we cannot find a home where the seller is offering a home warranty, we suggest for our buyers to purchase one themselves.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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All About Reverse Mortgages

The Truth About Home Selling Rates

You may have heard a thing or two lately about reverse mortgages, but are they still a good idea? Were they ever a good idea?Reverse mortgages are quite challenging to classify as good or bad. It’s a tool for people over the age of 62 to get the equity of their house without having to make monthly mortgage payments. For most people, it can rather be complicated and confusing, maybe expensive.

Why is the federal government putting restrictions on this type of mortgage? FHA did a study as they’re mostly the ones doing insurance on these loans. They found out that almost 10% of a specific type of reverse mortgage was in default. Even though those who have reverse mortgages don’t have to make monthly mortgage payments, they do have to continue making tax and insurance payments. The study shows that the type of product which allows the most money upfront (a lump sum payment) led to a 10% or $2.8 billion of the FHA insurance fund in default. They eliminated that product and kept some of the mortgage products that allow a smaller amount upfront plus monthly payments.

So what’s the best advice about reverse mortgages? Get MORE advice. Talk to a financial planner or a trusted mortgage broker to make sure that it sets your needs.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to Real Estate advice from Portland’s Real Estate Advisor, Rick Sadle.

 

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Are You Qualified to Buy a New Home?

Many people are noticing that housing prices are going up and they are curious whether they are qualified to make a move.

The average priced home is $282,000 but we have to factor in the effect of higher end home sales happening recently. Using this amount,  a purchaser has to make $50,000 annual income to qualify. As for the minimum credit score, 640 is the acceptable number that we use. However, there are other loan programs which required income & credit score requirements vary but as a rule of thumb, the lower credit score you have, the higher interest rate you pay.
In terms of the downpayment, 3.5% is what typically applies as far as an FHA loan is concerned. Then again, there are programs out there that require zero downs.

With the upcoming potential changes in the immigration laws, there would be a probable impact to the housing market when millions of people who are living in the country illegally obtain legal status. Obviously, there will be an influx of potential buyers and most banks will be looking at a 12-month or more credit history.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to Real Estate advice from Portland’s Real Estate Advisor, Rick Sadle.

 

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Portland Real Estate: Buy vs. Rent

Portland Real Estate: Buy vs. Rent

For several months now, we’ve been hearing about the strong demand for houses. One of the reasons the housing market is re-ignited is affordability.

How affordable is it to buy a house?

Historically, it’s taken an average of 21.5% of the typical family’s income to make a mortgage payment on a median priced home. Last year, it took under 13% which is the lowest number since tracking back to 1970. Back in 1989, the median home price was $94,000 and interest rates were around 10%, which would make your mortgage payment around $825. In 2012, the median home price was $176,000 and the interest rates were around 3.4% which would make your payment $626. That’s almost $200 a month less 23 years later.

How much of a down payment does it take to buy a house nowadays?

With an FHA insured loan, you can get it in for as little as 3.5% down. There even are still some programs that allow 100% financing.

Is there a rule of thumb to decide if it makes more sense to buy vs. rent?

It comes down to affordability for that specific person. I would consider the money that I pay in rent and compare to what I might pay on a median priced home. You can Google mortgage calculator to help you.

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Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to Real Estate advice from the expert himself, Rick Sadle.

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