Archive for November, 2010

Rainy Day Savers Rewarded With Lowest Jumbo Mortgage Rates In History

Tuesday, November 30th, 2010
It has been a tough couple of years — almost the proverbial perfect storm — for clients needing to .
The Great Recession(depression?) has cut home values, turning some  upside down for borrowers. Falling values and tighter credit have made refinancing difficult and qualifying new borrowers even tougher unless they were very prudent over the last few years. Socking away money for the proverbial rainy day.
Low and no down payment and adjustable rate schemes are history. ARMs are available but clients want fixed. Why gamble with future rates when fixed is at historic lows?

But the storm may have completely passed. Across several states luxury home values have stabilized and insanely tough credit standards are being moved down to the 700 FICO score level or better, interest rates are at historic lows again, new creative loan plans are emerging and pent-up demand for high-end housing is eager to enter the market.
Cloud Computing Technology specialist David Sparks was surprised when we informed him he would be able to refinance his $1.5 million post modern-style house in Santa Monica and tap into the equity for an additional $75,000 so he could remodel his kitchen.
Sparks, refinanced his expensive adjustable-rate mortgage into a 30-year at 5.125 percent.
In 2009, the average rate on a 30-year jumbo mortgage was 6.86 percent compared to 5.25 percent in November, the lowest in history. That represents a significant savings for borrowers.
For example, a homeowner with a 30-year fixed jumbo mortgage balance of $900,000 at 6.25 percent pays $5,541 a month. The same balance refinanced into a 5.00 percent jumbo loan reduces the monthly figure by $710.
The jumbo mortgage market is alive and well for well-qualified borrowers, with well-qualified being the key word if you are still paying close attention. And creditworthy consumers are waiting much longer to close their jumbo mortgages while banks pore over financial documents and complete due diligence. 
Borrowers face considerably more scrutiny than they did before the epic financial meltdown that started in 2008. With 10% of jumbo mortgages at least 60 days late the focus of underwriting is finding and lending to rock solid borrowers who have survived the financial storm by being prudent with their finances.
It used to be that high-earning borrowers with excellent credit and ample cash reserves could sign a new multi-million dollar jumbo mortgage or refinance an existing loan on their posh digs with no questions asked.
Of course, that was before the economy tanked and the housing market went belly-up, making lenders skittish about financing any type of mortgage, especially since they had to hold the loans they made on their balance sheets. Return of capital became the most important element of any loan. Those that qualify are being rewarded for their prudence.
Most client’s refinancing are saving 1-2 thousand dollars a month because they are dropping their interest rates over 1%. The majority of jumbo mortgage loans funded over the last quarter were 30Y fixed. Maybe running with the herd is right once in awhile. The latest chart should really demonstrate how much money is on sale for SOLID borrowers.

And above all please get a jumbo loan that makes sense for your short and long term financial plans. If your ready to start the conversation, contact one of our seasoned advisors by visiting our . As always, have a prosperous day. 

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Stockton Short Sale

Tuesday, November 30th, 2010

Stockton, CA is a coastal city with approximately 243,000 residents, and it is the 13th largest community in the state. It has a mixed workforce that consists of both white and blue collar workers. It is also an extremely diverse city, and close to one quarter of the population consists of residents born outside of the United States. There are over 82,000 homes and apartments in Stockton, and property owners occupy 49% of them, renters occupy 45% of them, and the rest are vacant. The largest home variety in Stockton is the single family detached, and the most common number of bedrooms for a home is three.

The real estate market in Stockton, CA is extremely challenging and unpredictable, and this has created a number of short sales on primary and investment properties. A short sale occurs when the homeowner tries to sell their property for less than what they owe on it. The lender must agree to be “shorted” and release the lien for less than the amount they are owed. Many real estate agents in Stockton require the homeowner to complete a hardship packet. Once they receive it, they will meet to view the property and determine a list price. This is one reason that sellers should use a short sale expert, as they will know what price the bank will accept, as well as what price will attract potential buyers to the property.

As of November 2010, there were 5,963 foreclosure homes in Stockton, CA, and the average sales price of these homes was $130,132. In October 2010, 1 in every 119 housing units in Stockton received a filing for foreclosure. The highest rate of foreclosure action to housing units was in the 95212 zip code, where 1 in every 32 housing units received a filing for foreclosure. Following closely behind was the 95206 zip code with 1 in every 73 units. The zip code with the lowest rate of foreclosure actions was 95202, as they only saw 1 foreclosure action in every 295 housing units.

New laws are also being created in order to protect California residents during the short sale of properties. Beginning in January 2011, the first position lender will no longer be able to obtain a judgment of deficiency against the seller after the short sale of a property. The approval letter for a short sale and the fact that the lender accepts the funds will be considered payment in full by the borrower, and the deficiency will then be discharged. However, refinanced loans will not be affected by this changed.