Tuesday, January 31, 2017

Dow Finally Hits 20,000


DOW 20,000, yes it finally happened!  After weeks of drifting all around it, the Dow closed above 20K and has remained there ever since. Although we cannot say it is firmly seated at this new level, the index has managed to hold on to the majority of the gains this week.

One thing that appears to be taking shape, which few experts seem to agree upon, is how the potential trade war will Mexico will impact the markets and U.S. economy.  In his first few days in office, President Trump has made his intentions clear to follow through on his campaign promise that he is not going to allow countries to take unfair advantage of the U.S. in trade.  Mexico is his first target.

In two bold moves, first the President has drawn a line in the sand with the President of Mexico in stating that “either Mexico agrees to pay for the construction of the border wall, or he is going to begin working towards taxing Mexican imports to pay for it”.  Mexico has refused to agree to this so Trump is indicating he is going to begin the process to make changes to how Mexican imports are taxed.

Secondly, the President has already put countries on notice that the U.S. will no longer participate in North American Free Trade Agreement in its current form.  This too will have a major impact on trade with Mexico.  Both of these declarations on trade can have significant ramifications on the markets and consumers, however there is little agreement by experts on exactly what the impact will be. 

There was a time where experts could fairly accurately predict market behavior on economic moves such as the one’s Trump is implementing.  However, to date nothing Trump has done, either before or after the election, has resulted in the market outcomes most economists predicted.  One thing is for sure, time will tell exactly what will happen.  While we wait, there guaranteed to be no shortage of concern as to the results of these potential unprecedented policy changes.

Challenges to the real estate market continue to exists.  Existing home sales in December declined 2.8 percent from the prior month.  Demand is NOT the issue.  Housing inventory is at the lowest level since 1999.  Current inventory is rated at 3.6 months, down from 3.9 in November. Adding to the inventory challenge is the number of buyers jumping into the market to purchase before mortgage rates rise.

On the positive side of housing, home prices remain strong.  The Federal Housing Finance Agency reported that home prices in November rose 0.5 percent.  Compared to the same time last year, prices are higher by 6.1%.  Agents around the country are reporting increased seller activity as well, however it is not near enough to satisfy the current buyer demand.

Next week’s many potential market moving reports are:

·        Monday January 30th – Pending Home Sales
·        Tuesday January 31st – S&P Corelogic Case-Shiller HPI and FOMC Meeting Begins
·        Wednesday February 1st - MBA Applications, Construction Spending, and ADP Employment
·        Thursday February 2nd - First Time Jobless Claims
·        Friday February 3rd – National Employment Data

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (707) 455-7070.

Thursday, January 26, 2017

Why/How Potential Home Buyers Must Address Credit: 6 Basic Steps/Points


You've made the decision, it's time to buy and own a house! You realize you will need a down - payment, and additional funds for closing expenses, etc. You figure your credit is fine, because you've checked your credit score, and have often been accepted for credit cards, auto loans, etc. However, quite often, potential home buyers, fail to recognize and/ or realize, it is necessary to examine whether they qualify for a mortgage, because there are other factors, which go into consideration, in this application process. Items such as percentage of debt to income, amount of unused credit lines, etc, may have some impact. Therefore, it might make sense, for you to sit down, in advance, with a qualified, professional mortgage broker or banker, and ask to be pre - approved, and not merely pre - qualified. The difference is that everyone who might be qualified, may not, upon further review, be approved! Here are 6 preliminary steps/ points to look at.

1. Request and review a full copy of your credit report: Look closely for what it says on your credit report, and not merely at your credit score. Are there any mistakes, or questionable items, which may cause you difficulty? You are entitled to a free copy, once per year.

2. Check for accuracy and correct: Review this report clearly, fully and completely. Are there any inaccuracies, etc? Immediately, in writing, question and/ or ask for an explanation of anything you consider possibly negative, especially if it appears inaccurate.

3. Address negative and/ or questionable items: You might have had to contest something in the past, or never received an invoice, and it was turned over to collections, and even though, you thought you corrected it, and/ or cleared it up at the time, it might still be lingering on your credit report. Immediately, in writing, address anything which might, even appear, negative!

4. Reduce/ pay down debt: The less debt of any sort, the better you will qualify for your mortgage! Reduce or pay it down, and avoid taking out any additional debt or lines of credit, no matter how good a deal it seems. Don't buy a new car and finance it, immediately before you seek a mortgage loan! Even interest - free offers for items, such as appliances, computers or furniture, might have a negative impact!

5. Save for down - payment, closing costs, fees: Know how much you will need for a down - payment, and closing costs, as well as any related fees. Create a reserve equal to at least six months mortgage payments. be prepared!

6. Do it yourself; or hire someone: You can undergo this, by yourself, or you can hire a mortgage banker or broker, to advise you, and help you prepare properly, to optimize your chances for getting the loan, you seek. But, do it!

Know your credit, the process, and how it might affect, you getting your mortgage! Don't wait for the last moment!

Article Source: http://EzineArticles.com/expert/Richard_Brody/492539

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Monday, January 23, 2017

Housing Starts, Refinance Applications and Home Buying Activity All Off to Great Start in 2017


The euphoria in the markets over the “Trump factor” has clearly worn off.  For three week’s now, the Dow Jones Industrial Average has been trying to break the 20,000 mark and has yet to do it.  Recent concerns over some of President (As of Friday January 20th) Trump’s policies and plans, as well as other happenings internationally, has investors concerned.

The big news this week has been in housing.  Real estate and mortgage professionals around the country are reporting a significant increase in purchase activity.  It appears that people who have been considering buying a home are now jumping into the market.  The reason for the increase in activity is attributed to both the end of the holiday hangover, and the fact that many purchasers want to get in while mortgage rates remain very low.

Next week there are three important housing reports coming out, however this week we already had a couple that confirm the positive direction of the market.  The Housing Market Index, which is a survey conducted by The National Association of Home Builders in which responders are asked to rate the general economy and housing market conditions, jumped an unusually strong 7 points in December.  This is pointing to significant positive momentum for housing heading into the new year.  As I stated earlier, buyer activity has already increased just in the last week.  Builder confidence is the highest since the sub-prime boom back in 2007.

Housing starts, which measures the registered start of a new residential building or home, leaped 11.3 percent in December.  The driving factor in the increase is multi-units versus single family homes, however the positive movement is still a very welcome sign for the direction of housing, and a great way to kick off the new year.

Mortgage rates have risen in the last week however, the recent rate decline did what it normally does, boosted refinance applications.  According to the Mortgage Bankers Association of America, applications for refinancing jumped 7.0 percent for the week ending January 13th.  Purchase applications declined 5.0 percent, however that number does not have me concerned at all.  Purchase activity almost always is down immediately following the holidays.  With the latest activity reported in the market just this week, it is clear buyers are hitting the streets.  As well, it appears that more sellers are listing their homes for sale which should begin to slowly ease inventory shortages that exist in many markets.

First time jobless claims were reported for the week of January 14th to be only 234,000.  This is the lowest the figure has been dating all the way back to the 1970’s.  This too is great for housing.

Next week’s potential market moving reports are:

·        Monday January 23rd – Dallas Fed Manufacturing Survey
·        Tuesday January 24th – Existing Home Sales
·        Wednesday January 25th - MBA Applications & FHFA House Price Index
·        Thursday January 26th - First Time Jobless Claims & New Home Sales
·        Friday January 27th – Durable Goods Orders & GDP

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (707) 455-7070.

Friday, January 20, 2017

Get Pre-Approved Before Buying Your Next Home


Prior to looking for a home, the first step you should take in the home buying process is to complete a mortgage pre-approval with a knowledgeable and trustworthy lender. Be sure to provide honest and accurate information to your lender. This will help the loan officer find the best mortgage options for you and ensure the fastest and smoothest loan approval process. The following suggestions will help expedite the loan process.

• Read All Documents - Make sure you thoroughly read all the loan documents. Ask your loan officer to explain anything that you do not understand. Never sign blank or incomplete documents.

• Be Truthful - Truthfully disclosure all your income sources and debts. Do not fabricate or alter any documents.

• Explain Your Employment History - Thoroughly explain and document any part-time employment or gaps in your employment history.

• Source and Document Your Funds - All gifts must be fully documented with a paper trail. Do not accept cash as a gift from a relative for the down payment. Only seasoned funds are acceptable as gifts.

• Credit Issues - Thoroughly explain and document all past credit problems.

• Educate - Ask your loan officers to explain the terms of the loan, including any prepayment penalties, variable rate features, and any stipulations on how to eliminate private mortgage insurance.

Once your pre-approval has been issued by the lender, be sure to ask your loan officer to review with you all the loan programs your pre-approval includes. If you are a first time home buyer, you may qualify for down payment assistance, a zero down mortgage, or a special interest rate. While looking for a new house, you may find a property that needs a renovation loan or a condominium that can only be financed with a particular loan type. If you are looking a newer house, a construction or draw loan may be the best mortgage type for you. Be sure you thoroughly understand all your financing options before finding the house of your dreams. During the house-hunting process, keep an open line of communication with your loan officer and discuss financing options and inform your lender of any major financial changes that happen between the date your mortgage pre-approval was issued and the loan closing. If any changes occur to your financial situation, such as: a new job, new loans, or large gift that you intend to use towards the down payment, be sure to inform your loan officer so he is aware of these changes.

Keeping your lender updated will eliminate delays and the surprise of a possible mortgage denial. Having a mortgage denied due to changes in your financial picture, especially after telling your friends and family you bought a house can be embarrassing and heartbreaking. Be sure to talk to your lender, so you have a thorough understanding of the mortgage requirements and programs available to you.

Article Source: http://EzineArticles.com/expert/Michael_Zuren_PhD./1966583

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Tuesday, January 17, 2017

New Mortgage Phenomenon Has Analysts Baffled


An interesting statistic has shown up for 2016 that has caught many real estate and mortgage experts by surprise.  According to the real estate website Trulia, the number of transactions failing to close after going into contract has risen sharply in many areas of the country. 

Trulia’s analysis has determined that property listings that moved from for-sale to pending sale, returned back to for-sale again in 2016.  This is almost twice as many that occurred versus 2015.  This is not focused in any particular region of the country.  96 of the nation’s 100 largest metro areas showed this trending increase.  This issue is occurring in high and low priced markets, large and small markets, and affluent and poorer neighborhoods.

For instance, in Ventura California, 11.6 percent of prospective sales failed to close.  This was the highest in the country.  This represents an increase of 3.1 percent from 2015.  Tucson Arizona was second with 10.8 percent that failed, which is 3.5 percent higher than 2015.  For perspective, the median home price in Ventura is $548,000, whereas Tucson median price is $176,000

2017 appears to be starting out stronger for mortgage applications and home purchases.  Now that Trump euphoria has seemed to ease, the stock market has been stable and mortgage rates have eased off their recent highs.  According to the Mortgage Bankers Association of America, applications for purchases and refinances increased 6.0 percent and 4.0 percent respectively for the first week of the year.

The employment sector continues to remain strong.  Although last Friday’s employment report for new hiring came in at 156,000, which was below analyst’s expectations, buried within the report was the strength in wage growth.  The Fed is continuing to watch what is happening with job hiring, however the increase of hourly earnings by 0.4 percent has now caught the attention of the Fed.  Rapid wage growth can lead to inflation.  Although the Fed wants inflation to increase, they are continuing to remain cautious in that any increase needs to be controlled.

Following last week’s labor department report was the first time jobless claims data released on Thursday.  Claims continue to remain very low at 247,000.  Continuing claims continued to improve with a decline of 29,000.

Finally, the Job Opening and Labor Turnover Survey (JOLTS) continues to show a significant gap between available job openings versus hiring.  It appears that employers continue to struggle to fill open positions as the number of new hires is far below the number of available positions.

Next week’s many potential market moving reports are:

·        Monday January 16th – Martin Luther King Holiday – All Markets Closed
·        Wednesday January 18th - MBA Applications, Consumer Price Index, House Price Index, Consumer Price Index, and Industrial Production
·        Thursday January 19th - First Time Jobless Claims and Housing Starts

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (707) 455-7070.

Saturday, January 14, 2017

The FHA 203k Mortgage Process Timeline


This article explains the process in chronological order for an FHA 203k rehabilitation mortgage. Prior to looking for a home, it is always advisable to complete a full pre-approval with your mortgage lender. After you have a fully signed purchase agreement and have completed your home inspection (if applicable), you will need to contact your mortgage professional to complete your mortgage application. The following steps will show you the workflow and general timetable for the FHA 203k loan.

Step One: Contractor's Estimate - Obtain a contractor's estimate that breaks down the repairs which are listed on the city point of sale report and any improvement items that you want added to your mortgage. The contractor will need to provide proof that he is registered with the city that the house is located in, licensed or bonded, and holds the proper licenses (if needed). The contractors licenses needed may include any of the following: electrical, roofing, HVAC, and/or plumbing. The estimate should be itemized and broken down between labor and materials.

Step Two: Mortgage Application - Contact your mortgage professional to complete your formal loan application. The documentation needed should include, but is not limited to the following: 30 days' pay stubs, 2 months' bank statements, last 2 years' tax returns and W2s, and copy of your driver's license and social security card. The following may also be needed: bankruptcy papers, divorce and separation agreement, and corporate tax returns (if you are self-employed). A homeowner's insurance quote should be obtained at this point.

Step Three: Appraisal - The FHA 203k appraiser may find additional repairs to be added to your contractor's estimate. If this happens you will need to provide an updated estimate prior to the appraisal being completed. Many lenders may also require a lead base paint inspection.

Step Four: 203k Paperwork - Once the appraisal is received, the buyer(s) and contractor will need to complete the 203k paperwork prior to the loan being submitted to underwriting.

Step Five: Underwriting - The loan file is submitted to an underwriter to make a final determination on the mortgage. Typically, FHA 203k loans will have approval conditions that will need to be satisfied prior to moving the loan to the closing department.

Step Six: Closing - A form called the "Closing Disclosure" has to be received by the buyer at least 3 days prior to signing their closing papers. Once the closing documents have been signed by both the buyer(s) and seller(s) and the mortgage is funded and filed with local court-house, the first disbursement from the 203k account is typically drawn within 2 to 4 weeks. The final disbursement from the 203k account usually will not occur until all the repairs and improvements are complete. The buyer(s) will also have to send written documentation to the lender that they acknowledge the repairs are completed to their satisfaction and the house passes a final re-inspected by the appraiser.

FHA 203k loans are subject to mortgage limitations according to the state and county where they are located. Also, the 203k streamline mortgage only allows up to $35,000 to be added to the mortgage for repairs and improvements. If the mortgage repairs exceed $35,000 or the contractor's estimate includes structural repairs, the mortgage would be deemed a full 203k loan and an FHA consultant would be required. On this loan type, borrowers should stay in contact with their mortgage professional to provide any additional information needed and ensure the mortgage is processed in a timely manner.

Article Source: http://EzineArticles.com/expert/Michael_Zuren_PhD./1966583

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Sunday, January 8, 2017

Housing Market Remains Strong Despite Uncertain Economic Future



Now that the holidays are over, let’s see if the Dow Jones Industrial Average can break the 20,000 mark.  Last week the index came very close, but investor concerns about U.S. and China trade relations had many sitting on the sidelines.  In addition, many people are just getting back from vacation and getting things going for the new year and the stock market was not their primary focus.

Even though this week had enough economic news to impact the markets, it did not seem like many were paying attention.  The ADP Employment Report, which typically can draw a significant market reaction, didn’t seem to do much in the investment community.  ADP reported a softer labor report than most experts had anticipated.  ADP announced that 153,000 new jobs were added in December.  Analysts were expecting closer to 172,000.

In the housing market, construction spending picked up heading into the latter part of the year.  The latest report for November 2016 showed a jump in spending by 0.9 percent.  That was significantly higher than analyst’s expectations.  Additionally, the spread between construction spending at this point versus the prior year increased to 4.1 percent.  This was a healthy increase from the prior month in which the spread year over year was only 3.4 percent. This is the best reading on construction spending since June 2016.  Residential construction accounted for a 1.0 percent increase in the report and the largest portion of the gain was in single family sector.

The Mortgage Bankers Association of American reported huge declines in refinance applications for the final week of the year.  According to the MBA’s latest report, refinance applications declined 22.0 percent.  Purchase applications only dipped 2.0 percent despite it being a major vacation week.  Mortgage rates have stopped moving upward and have even declined slightly in the last couple of weeks.  Now that the holidays are over, many eyes will be watching the direction of the housing market.  Many experts are anticipating the purchase and sale market to be the best since the 2008 recession.

On Wednesday, the FOMC released their minutes from the Open Market Committee Meeting.  The theme that seemed to come from reading the minutes is that the Fed is taking a wait and see attitude toward future rate increases.  There are many uncertainties regarding future government spending and tax cuts under the Trump presidency.  Any of the talked about initiatives can have a major impact on inflation and economic productivity.  For the time being, the Fed is planning for two interest rate increases in 2017.  However, they clearly indicated that they will adjust their forecasts as needed with so much unchartered governmental decisions lying ahead.

Next week’s potential market moving reports are:

·        Monday January 9th – Labor Market Index
·        Tuesday January 10th – JOLTS Report
·        Wednesday January 11th - MBA Applications
·        Thursday January 12th - First Time Jobless Claims
·        Friday January 13th – Producer Price Index and Retail Sales

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (707) 455-7070.

Friday, January 6, 2017

Get To Know Your Paycheck


Pay is the starting point of your finances—make sure you know how it’s split before hitting your bank.

Monday, January 2, 2017

Calm Holiday Season Expected to Usher in Volatile New Year


As expected, the markets are quiet this holiday week.  Trading volume is light, and the indices have remained within a narrow range.  Enjoy the calm, because it is likely that the markets will become more volatile as information regarding President Elect Trump’s governing intentions are released.  (This is not a political statement).  With the change from a Democratic governing body to now a controlling Republican Party, there will likely be many significant changes to government policy therefore creating economic uncertainty.

Despite the minimal trading activity this week, there were significant housing reports released that provided fuel for housing speculation for 2017.  The S&P Case-Shiller Home Price Index showed that price appreciation is not booming, but it continues to remain steady.  For the month of October prices increased 0.6 percent in the 20 major cities measured.  The increase was in-line with analyst’s expectations and there were no surprises in the report.

The East coast cities saw improvement in appreciation after having been somewhat stagnant for the better part of 2016.  The Pacific Northwest continues to dominate price increases with Seattle home prices rising a total of 10.7 percent from the same time last year.  Portland Oregon was second with a 10.3 percent gain.  Moving East, Denver Colorado came in third with year-on-year appreciation of 8.3 percent.

The housing market is beginning to feel the effect of the rise in mortgage rates. The Pending Home Sales Index declined by 2.5 percent in November.  A healthy rise in this index was expected and the reversal from the recent upward trend caught most experts by surprise.  The area hit hardest was the west coast.  In addition to rising rates impacting home sales, limited inventory continues to play its part in the challenge to housing as well.

What will hopefully add strength to the housing market in 2017 is the rapid rise of consumer confidence.  Since the election, confidence has been getting stronger and stronger.  The confidence index is up 12.9 points since the election.  An increase of this pace is virtually unheard of.  The level of 113.7 is the highest measurement of consumer confidence since August 2001.

First time jobless claims declined from their recent increase.  This is not un-common for this time of year.  Claims for the week ending December 24th were reported at 265,000.  This is far below 300,000 where employment concerns tend to increase.

Next week business returns to normal as the holiday season comes to an end.  There are a number of potential market moving reports this coming week:

·        Monday January 2nd - All Markets Closed
·        Tuesday January 3rd -  ISM Manufacturing Index & Construction Spending
·        Wednesday January 4th - MBA Applications & ADP Employment Report
·        Thursday January 5th - First Time Jobless Claims
·        Friday January 6th – National Employment Situation

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (707) 455-7070.