Monday, August 28, 2017

Has the “Bull Market” Run Its Course?

The Stock Market

Has the “Bull Market” run its course? Are we heading into a stock market correction?

These are just some of the questions investors, consumers, even government officials are asking in recent weeks. With the stock market down off of its recent highs, and with no clear direction happening, many are wondering if the fear of a market downturn may come to fruition.

The good news is that the fundamentals for a strong economy are very much in place. Low interest rates combined with good economic productivity, a great labor market, and strong corporate profits in many sectors, should limit any significant market correction.

Mortgage Bankers Association Loan Application Weekly Data

The mortgage market remains very close to flat in recent weeks. Purchase applications declined a seasonally adjusted 2.0 percent for the week ending August 18th. Refinance apps were up a measly 0.3 percent. With mortgage rates remaining very low, the refinance percentage of loan applications increased by 1.1 percent to 48.7 percent. Overall mortgage applications for home purchasing are up 9.0 percent from the same time last year.

Existing Home Sales & FHFA House Price Index

There continues to be mixed messages coming from the housing market. The report on existing home sales for the month of July showed another monthly decline of 1.3 percent to a lower than expected annualized rate of 5.440 million. Although sales in this sector have been in a downward trend, the current volume remains near the highs of the housing expansion which started after the housing crisis. The cause of the less than stellar numbers continues to be driven by one thing, and one thing only, and that is the lack of housing inventory. Demand remains very strong but the increase of sellers placing their homes for sale has yet to occur, as many industry experts had either expected or hoped,

Home prices came in softer than expected with a minimal increase of only 0.1 percent. Year-on-year home prices are higher by 6.5 percent, which is 4/10ths lower than the prior month’s 6.9 percent. The report is both good news and bad news. The slowing of home appreciation helps with home affordability. The downside is that less appreciation limits wealth growth for homeowners. What will be interesting to see is if homeowners see that values are no longer rising the way they were, maybe they will decide to cash-out and sell, which will be a boost to home sales.

Next week’s potential market moving reports are:

· Monday August 28th – Dallas Fed Manufacturing Survey
· Tuesday August 29th – S&P Corelogic Case-Shiller HPI, Consumer Confidence
· Wednesday August 30th - MBA Mortgage Applications, ADP Employment Report
· Thursday August 31st - First Time Jobless Claims, Pending Home Sales
· Friday September 1st – National Employment, Construction Spending, ISM Mfg Index

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, August 24, 2017

Mistakes to Avoid When Applying for a Mortgage

Before looking for your next home, it is important that you complete the mortgage pre-approval process. Once you receive a pre-approval, there are some common mistakes and pitfalls that could result in your mortgage being rescinded. A pre-approval is based on a snapshot of your employment, credit, income, and assets. If any of these criteria change, it may have a negative impact on your ability to obtain a mortgage and force the lender to deny the loan.

Below is a list of the most common mistakes that homebuyers make before receiving their final mortgage approval:

• Change in Employment - If your employment changes after receiving your pre-approval and before closing your mortgage, notify your loan officer immediately. Even if your new job is a promotion or pay increase, it may be subject to a probationary period. Also, if your employment includes income from commission, tips, bonuses, or is subject to job expenses, your lender may view this income as unstable until you show a 2-year history of this type of income.

• Cash Deposits - Government regulations and investor guidelines require mortgage lenders to document all large deposits within 60 days of applying for a mortgage. All large deposits must be documented showing the source of the funds. These include but are not limited to: cash gifts, the sale of assets, 401(k) loans, a transfer from one bank account to another, or any other large deposit. Transfers from a joint account will likely also require full disclosure of the originating account and a letter from the co-owner of the account that you have full access to the transferred funds.

• Inquiries/New Purchases- Any credit inquiries that are listed on your credit report for the previous 90 days, before applying for a mortgage, will need to be explained. If any new debt resulted, you will need to provide a statement, and the debt would need to be included in your debt ratio. Any deposits you make during the loan process for a new house such as: appliances, furniture, or home amenities will also need to be explained, documented, and included in your debt ratio.

• Overdrafts- Mortgage lenders will thoroughly review all bank statements that are provided for the mortgage loan. You will need to explain any over-drafts and what you have done to remedy the reason for the over-drafts in the future.

• Business Expenses - Mortgage lenders will require two years' tax returns. Business expenses, losses on rental property and business ventures reported on the returns will need to be explained and will likely be deducted from your overall income.

• New Debts- Household debts that are not included on your credit report, such as: spousal support, alimony, car payments from "buy here pay here" companies or a credit union that does not report their revolving or installment loan debts, will need to be documented and included in your debt ratio.

After applying for the mortgage loan, if you are concerned that any change in your financial picture may affect your loan approval, it is in your best interest to contact your mortgage loan officer. Inform them of the change immediately and always make sure you are honest with your mortgage loan officer, so they have an accurate picture of your financial situation. Inaccurate information or surprises during the mortgage process may result in your mortgage being denied, a devastating situation that can often be avoided.

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Monday, August 21, 2017

Common Roadside Emergencies - Adulting 101: Century 21

Because owning a home is only the beginning. Century 21 presents everything you need to know to master Adulting

Friday, August 18, 2017

Housing and Stock Markets Mixed, but Fall Forecasts are Positive

The Stock Markets

After a 271% rise in the stock market, rumbles of concern that it may be overpriced are starting to be heard on Wall Street. Many experts are expressing concern that the valuations are not warranted and that a correction may be forthcoming.

Thursday’s decline of 274 points was blamed primarily on concerns over the terrorist attack in Barcelona. However, many investors commented that they believe the size of the decline was exacerbated by the underlying concerns about how much the market has risen since the last correction.

Mortgage Bankers Association Loan Application Weekly Data

Purchase applications for home mortgages decreased a seasonally adjusted 2.0 percent for the week ending August 11th. For mid-August, purchase application increases or decreases within a few percentage points, week to week, are essentially indicative of a flat market. The good news is that purchase apps are higher by 10% from the same time last year. With mortgage rates continuing to remain low, refinance applications rose 2.0 percent. Refinancing increased by 1.1 of all mortgages to a level of 47.8 percent of all loans being financed.

Housing Starts

Housing starts unexpectedly declined to a lower than expected annualized 1.155 million. The current rate is now back to the same levels as March and April of this year. It is too early to determine, however there are signs that the final trend for 2017 might end up being lower than the prior year. On the positive side, there continues to be commentary that the Fall real estate market may bring stronger than normal due to the pent-up demand from a consistent lack of available inventory. The one thing to watch is what happens both domestically with President Trump policies, as well as any geo-political events, such as Thursday’s act of terrorism in Barcelona.

Housing Market Index

This index, which is comprised of feedback from the National Association of Home Builders which provides a rating of the general economy and housing market conditions, delivered an upside surprise this week. The latest reading was up by 4 points which was better than analyst’s expectations. The current level of the index indicates positive sentiment of the nation’s home builders on the future of the economy and housing.

Next week’s potential market moving reports are:

· Tuesday August 22nd – FHFA House Price Index
· Wednesday August 23rd - MBA Mortgage Applications, New Home Sales
· Thursday August 24th - First Time Jobless Claims, Existing Home Sales
· Friday August 25th – Durable Goods Orders

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, August 12, 2017

Economic Data Remains Strong; Purchase and Refinance Applications Increase

The Stock Markets

It has been a while since any vulnerability to the rising stock indices has existed. Economic data continues to remain strong and shows little sign of weakening. Geopolitical concerns over North Korea’s nuclear capabilities have been taking center stage all week on the news channels and the concerns are starting to show up in investor decisions with more money flowing into the bond market.

Mortgage Bankers Association Loan Application Weekly Data

Purchase applications for home mortgages increased a seasonally adjusted 1.0 percent for the week ending August 4th. Applications for refinances jumped 5.0 percent with the recent slight decline in rates. As mentioned in the previous section, concerns on the international fronts have investors starting to remove money from stocks and placing funds in bonds as a hedge against market uncertainty.

The housing market continues to remain ahead of last year. From the same date a year ago, the purchase index is up by 7.0 percent. The refinance portion of mortgage financing increased by 1.2 percent to represent 46.7 percent of all mortgage financing. Mortgage rates for the week declined by 3 basis points, which appears to be enough to stimulate a few more refinances.

Job Openings and Labor Turnover Survey (JOLTS)

Once again it is clear that there is a significant shortage of qualified candidates to fill the job openings that currently exist. For the month of June job openings rose sharply to 6.163 million. This is up from the prior month’s 5.702 million. Hiring has been struggling as the filling of these available positions declined sharply by 103,000. Although this index can be quite volatile, the recent data points to significant tightness in the labor market. Additionally, despite all the job openings, the reduction in hires is an indicator that many employers want to fill open positions, but they remain against paying significant wage increases to attract the help.

Noteworthy News

The airline industry, which is not known for stellar customer service, is dipping it toes into the water of two-way texting with customers. Up until now, airlines only offered text communication one-way, from airline to passengers, typically related to gate change announcements and flight schedule changes or delays.

Hawaiian Airlines and Jetblue have begun a service (albeit it is in the testing phase) that allows passengers to communicate with customer service staff via text. Passengers can even complain via text. This should be interesting to see what happens in the coming months as the airline industry is notorious for not listening.

Next week’s potential market moving reports are:

· Tuesday August 15th – Housing Market Index
· Wednesday August 16th - MBA Mortgage Applications, Housing Starts, FOMC Minutes
· Thursday August 17th - First Time Jobless Claims, Industrial Production
· Friday August 18th – Consumer Sentiment

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.

Wednesday, August 9, 2017

Don't Waste Your Time!: Get A Mortgage Pre-Approval

You've made that very personal decision, to consider buying a house of your own! You may have put off this moment, for a variety of reasons, including; indecisiveness; geographic; job-related; financial, etc, but now, you think, you're ready! So, what should you do first! The logical first-step is to discuss finance, and the all-important mortgage information, with a qualified mortgage broker or banker. If you have received a recommendation from someone you trust, and is knowledgable, begin with a conversation with that professional. If not, interview, and hire, a real estate professional, who will take care of your needs, and provide you with recommendations of reliable mortgage professionals. Either way, be certain to get a Mortgage Pre-Approval, before you begin your quest for the house of your dreams.

1. A pre-qualification is not a pre-approval: Beware, there is huge difference between being pre-qualified, and pre-approved! The former means that based on the basic information you have provided, you would be able to qualify to get a certain size mortgage. On the other hand, the latter means the broker/bank, has done a thorough review of your income, liabilities, etc, as they would before they issued a mortgage, and, as long as the house comps out, you will get a mortgage.

2. Other debts/liabilities: Lending institutions use a formula to determine how much mortgage one might qualify for. It takes into consideration all debt owed, and that combined with your new mortgage debt, cannot exceed a certain percentage. That is, in addition to, the mortgage must fall within a certain percentage of one's income.

3. What can you afford as a down-payment?: Traditionally, you are asked to put down 20% down-payment, and you can then use your mortgage for the balance. However, there are loans available, which require less down, but that means a higher monthly payment! You may also be in a position to put down more, and carry a smaller mortgage. This must be a combination of what you can actually afford, as well as your comfort level.

4. What can you afford monthly: The lending institution will come up with a maximum figure, they say you can carry monthly. They base this as a percentage of one's income. However, you may not feel comfortable with that amount of debt, so you must take that into consideration. All this valuable information will help you decide the price ranges you should look at, when you search for a home.

5. Move to the front of the line: Let's say you've taken into consideration the above information, and now are prepared and ready, to begin your search, in earnest. You have searched, and found the house you want, but others feel the same way. When there are competing offers, the buyer with a Pre-Approval, often is given more consideration, because it is considered a better bet, for the seller.

It is the responsibility of a qualified real estate professional to help you find the right house, at the best available price, with the least amount of hassle or wasted time! Make it easier on yourself, by beginning properly, by getting a Mortgage Pre-Approval.

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Sunday, August 6, 2017

How-to Host a BBQ - Adulting 101: Century 21

Ready to impress the neighbors?

Because owning a home is only the beginning. Century 21 presents everything you need to know to master Adulting

Thursday, August 3, 2017

Real Estate Closings: 5 Needs To Remember

Congratulations! You've hoped for, and found, the house, you believe, best serves your needs, requirements, concerns, etc. If you are like most people, you will be using a mortgage, to provide a significant amount of the necessary payment, and gone through the trials and tribulations of the process, and emerged successfully approved, for the amount you needed and/ or desired. Finally, before the deed on the house, transfers from the present owner, to you, you will have to emerge from what many first - time buyers, refer to, as the dreaded, real estate closing. Let's review 5 things, which may be requested from you, so you aren't surprised, but rather are as prepared as possible, thus making this, go far more smoothly, and with less stress!

1. Where the earnest money came from: Lending institutions often question, where one got the funds, to put down, also known as the earnest money. For example, if a property sells for $500,000, and you are to put 20% down, that means $100,000 down - payment. Generally, when you sign the contract, you will be expected to put an amount down, known as earnest money. This amount is often 10%, so in this case, someone would put $50,000 down, upon signing the contract, and a similar amount payable at the closing. You might often be asked to show where this money came from, by submitting a few months bank statements, or investment statements, etc.

2. Tax returns: Mortgage banks and brokers, generally require the buyer, to submit the two, most recent, years, tax returns. This is generally done, by signing a form, permitting, them to get these from the government. Be prepared to answer anything, which might tend to be somewhat confusing!

3. Investment statements: Gather the investment statements from your investments. Generally, you will be asked, also, for the past year, or two, and especially, the most recent few quarters.

4. Bank statements: You'll have to provide, at least, the last 2 bank statements, and some might ask for 3 or 4. Be certain these indicate, clearly, you can afford the home, you are purchasing.

5. Know your credit rating: Do you have a, high - enough, credit rating, to assure the lending institution? The best approach, is to fully evaluate this, carefully, prior to begin your house - hunting!

There are many other closing requirements, but the above 5, are consistent, and, if one is prepared properly, should be no problem! As the Boy Scout Motto goes, Be prepared!

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