Low rates and new government programs are making homes more affordable and keeping the local real estate market exciting as the traditionally slower winter months approach.
In September, the Obama administration renewed its support of the housing market by announcing its efforts to expand the Home Affordable Refinance Program (HARP). HARP was created to give homeowners who owe more than their house is worth the opportunity to refinance their mortgages into historically low mortgage rates.
The HARP program allowed homeowners to refinance, with certain restrictions, up to 25 percent over the property's appraised value. As of June 30, 2011, more than 838,000 borrowers refinanced through the HARP program. Washington's new goal is to expand HARP. There is current discussion about raising the 125 percent loan-to-value limit that has been shown to limit some homeowners from refinancing. This would allow a homeowner to refinance even though their property appraises much below what is owed.
Local property owners who owe more than their property is worth and want to refinance should visit the government websites of Fannie Mae, Freddie Mac and/or the Federal Housing Administration to see if their loan is a government owned loan.
The lookup feature of the websites will tell you if your loan is owned by the government and if you qualify for the HARP program. You then would contact your current servicer (the company who sends your mortgage statement) to see if you qualify for the program. Also, should you have questions about the Making Home Affordable program that your servicer cannot answer or need further counseling, you can call the Homeowner's HOPE Hotline at 1-888-995-HOPE (4673).
It is the historic low rates that are encouraging homebuyers to get off the fence and search for a home.
As of Sept. 19, the average 30-year mortgage rates are at 4.18 percent and 15-year mortgage at 3.44 percent. This is a stark change from the average 6.5 percent rates in 2008. A typical Carlsbad home, roughly 2,800 square feet, that sells for around $700,000, at a 6.5 percent mortgage would have roughly the same payment as a $860,000 home at 4.3 percent. The rock-bottom rates create lower monthly payments and more affordable homes. And the winter is doubly good for home shoppers, as there are often fewer competing buyers. Sales slow as much as 30 percent during the winter months in North County San Diego. This creates an ideal opportunity for a buyer to negotiate favorable terms.
The prepared winter home buyer will have a strong grasp of what they can afford, keeping in mind that the costs of a home do not end with the mortgage payment. Property taxes, homeowners association fees, repairs, insurance, mello-roos fees, these are only some of the costs associated with owning a home. A mortgage broker can provide a prequalification letter. Its free and takes only a few minutes time.
Winter homebuyers should also be mindful of market-time. Sales are slow during the winter months. After 60 to 90 days on the market, homeowners often consider a change in their listed price. Savvy buyers will keep in contact with the listing brokers and be notified prior to a price reduction. Homebuyers can benefit by having the negotiation table free from competition while the price is still listed high.
And it is generally a good idea to get out and physically see property. The Internet has become an integral part of the home buying process, but it can create a powerful property bias. Grainy photos, neighborhood blog chatter or generalized local reviews from "happyneighbor543" can give you an inaccurate picture of a home or neighborhood.
By visiting homes you can create your own opinion of value and have a better grasp on what current homes are comparatively worth.
Tyson Lund can be reached at [email protected].
In September, the Obama administration renewed its support of the housing market by announcing its efforts to expand the Home Affordable Refinance Program (HARP). HARP was created to give homeowners who owe more than their house is worth the opportunity to refinance their mortgages into historically low mortgage rates.
The HARP program allowed homeowners to refinance, with certain restrictions, up to 25 percent over the property's appraised value. As of June 30, 2011, more than 838,000 borrowers refinanced through the HARP program. Washington's new goal is to expand HARP. There is current discussion about raising the 125 percent loan-to-value limit that has been shown to limit some homeowners from refinancing. This would allow a homeowner to refinance even though their property appraises much below what is owed.
Local property owners who owe more than their property is worth and want to refinance should visit the government websites of Fannie Mae, Freddie Mac and/or the Federal Housing Administration to see if their loan is a government owned loan.
The lookup feature of the websites will tell you if your loan is owned by the government and if you qualify for the HARP program. You then would contact your current servicer (the company who sends your mortgage statement) to see if you qualify for the program. Also, should you have questions about the Making Home Affordable program that your servicer cannot answer or need further counseling, you can call the Homeowner's HOPE Hotline at 1-888-995-HOPE (4673).
It is the historic low rates that are encouraging homebuyers to get off the fence and search for a home.
As of Sept. 19, the average 30-year mortgage rates are at 4.18 percent and 15-year mortgage at 3.44 percent. This is a stark change from the average 6.5 percent rates in 2008. A typical Carlsbad home, roughly 2,800 square feet, that sells for around $700,000, at a 6.5 percent mortgage would have roughly the same payment as a $860,000 home at 4.3 percent. The rock-bottom rates create lower monthly payments and more affordable homes. And the winter is doubly good for home shoppers, as there are often fewer competing buyers. Sales slow as much as 30 percent during the winter months in North County San Diego. This creates an ideal opportunity for a buyer to negotiate favorable terms.
The prepared winter home buyer will have a strong grasp of what they can afford, keeping in mind that the costs of a home do not end with the mortgage payment. Property taxes, homeowners association fees, repairs, insurance, mello-roos fees, these are only some of the costs associated with owning a home. A mortgage broker can provide a prequalification letter. Its free and takes only a few minutes time.
Winter homebuyers should also be mindful of market-time. Sales are slow during the winter months. After 60 to 90 days on the market, homeowners often consider a change in their listed price. Savvy buyers will keep in contact with the listing brokers and be notified prior to a price reduction. Homebuyers can benefit by having the negotiation table free from competition while the price is still listed high.
And it is generally a good idea to get out and physically see property. The Internet has become an integral part of the home buying process, but it can create a powerful property bias. Grainy photos, neighborhood blog chatter or generalized local reviews from "happyneighbor543" can give you an inaccurate picture of a home or neighborhood.
By visiting homes you can create your own opinion of value and have a better grasp on what current homes are comparatively worth.
Tyson Lund can be reached at [email protected].