Lower Your Mortgage Payments ARIZONA

Academy Mortgage Corporation

Monday the 14th of May, I will be changing companies from Arizona Wholesale Mortgage Inc (a mortgage broker) to Academy Mortgage Corporation (a mortgage bank).

I am so excited about making this move to Academy who last year was voted the No. 1 Mortgage company in the US for Customer Service.  http://academymortgage.com/achievements/     This is a big deal for me as over the past year or so, I was continuously frustrated about the slowness of the approval process.   This was brought home to me recently when I was doing a loan for a very dear friend who had PERFECT CREDIT, very low Debt to Income ratio’s, and a fantastic new home he was buying.

Despite maybe being one of the best qualified candidates I had worked with in a log time, the loan took me 4 months and 2 lenders to complete.  I can tell you that in today’s market that makes no sense.  Homes are now selling rapidly and because of the demand, it would be easy for a seller to give up on a buyer that couldn’t get the financing done.

What I will have available at Academy is in house processors and in house underwriters.  In fact is needed, Academy is the home of “The 10 Day Close”.  That right, if the situation demands it, I will now have the ability to put a RUSH on the file and get it funded in 10 days if needed.   If is rush is NOT needed, we are still closing loans in an average of 23-26 days.

Ask yourself, “How much is it worth to close your loan on time?”.   I can tell you that if you have a home that you or your client absolutely loves and your financing doesn’t come through and you LOSE the home, then what price would you put on your financing coming through on time?

I will be working out of their beautiful new office on Pima Rd in Scottsdale.  Please stop by and visit me some time.

Last week, rates were a record low for most to the week.  I think that would hold true through this week as well.  What are you waiting for?

Dana

Dana Rasch NMLS 327037

Just read an interesting post from FICO Analytical Blog written by Rachel Bell.   The point of the article is that individuals FICO scores change over time, some get better and some get worse.  After the major fall out from the banking and real estate market, we would expect that many people have received some dings on their credit score.  At the same time however, with all the uncertainty in our economy right now, people with really great scores have gotten more numerous and the scores higher.As you can see from the above chart, the best scores of 800-850 is at the highest level since 2008 with 18.3 % of the population having scores at this level.   However as you move down the FICO score, you start to see a dropping off in the 700-749 level with only 15.5% of the population in this range which is the lowest that shows up in this chart going back to 2005.  Scores in the 600′s is relatively unchanged.

The analysis by Ms. Bell hypothesizes that people with good scores have really hunkered down have have reduced debt and at all costs made certain that all obligations are taken care of on a timely basis.   Others have been hurt and whereas they used to be in the 700′s may have experienced mortgage late payments, temporarily job disruptions, and other financial calamities which have moved them downward into the 600′s.

It is very important for YOU to know your FICO score and to protect your credit scores as all costs.  Also keep in mind that the only way you can get a TRUE FICO score is to get a mortgage Loan Originator pull your credit.  The scores that you can purchase on-line are NOT “Real” FICO scores but a consumer generated score designed for the credit agencies to make money from you.

Dana Rasch

Dana Rasch NMLS 327037

This morning, the news is that the US only created 115,000 new jobs for April.  This was below estimates and the markets are reacting negatively.   The Dow as of my writing this is down 147 points and the 10 year Treasury note had fallen 5 basis points to a yield of 1.88.

Generally, the MBS’s track the 10 year bond yield and at 1.88, the 30 year MBS rate hit an ALL TIME HIGH.

What this means to you is that the interest for a 30 year mortgage is the best it has been in all our life times.

Despite this, some are still holding back on either purchasing a new home or refinancing your current home.  Guys and Gals, “What are you waiting for?”

My advice is get going fast and make a decision that significantly affects your future.

Dana

Dana Rasch NMLS 327037

I found a very interesting article today about home prices and history.  In this article it indicates that housing prices fell an additional 3.5 % in the last quarter.  That in itself is interesting but the article goes on to discuss the value of owning a home now and puts it into a very interesting prospective.

Would you guess that housing prices after adjusting for inflation are now equal to prices in:

A.  2002

B. 1998

C. 1986

D. 1955

E. 1895

F. All of the above.

This is not a trick question, but the answer is F.  All of the above.   Look at this chart:

This chart is from Robert Shiller who is renown for his analysis on the housing market.  As you can see the “bubble” that we experienced back in 2004-2007 was so far out of the norm, that anybody SHOULD have seen this deflation coming.   I will be the first to admit that I did not.   I was in good company though as here in the Phoenix, there was virtually a feeding frenzy.

Now back to the question of whether it makes sense to own your home.  Here is a quote from the article:

“The good news is that houses–like apples and shoes–have functional value, and right now buyers are getting plenty of it for what they spend. The easiest way to see this is by dividing yearly rents by purchase prices for similar properties, to come up with a “rent yield”. Landlords literally collect rent yields; owner-occupants collect implied ones because they don’t have to pay rent.

In more than half of U.S. housing markets, the rent yield is over 10%. That’s a gross yield; buyers should subtract for things like taxes and maintenance. But even so, buyers in most markets will end up with yields of over 5%. That’s a pretty good deal at a time when 10-year corporate bonds of decent credit quality pay only 3%. And with the average 30-year mortgage rate sitting below 4%, financing terms are attractive relative to rent yields (for buyers who can get loans).”

So given this analysis and what you can purchase for your money with the current prices for both the home and the mortgage interest rates.  Here in the Phoenix area, I use a little multiplier to estimate a new clients monthly PITI payment.   All I do is multiply the loan amount by .0065 ($6.5 per $1000).   For Example a $200,000 loan should cost about 1,300.00 per month and depending on the address of the property here in Phoenix, that home will probably rent for a bit more than that.

Interest rates have dropped back down to their lowest again last week after poor economic news come out over the course of the week.  TODAY would be a great time to get started on a re-finance of your current mortgage or to find that new home.

Dana Rasch

Dana Rasch NMLS 327037

Click here for a video I just watched on CNBC.  This goes along with the article I referenced yesterday about Phoenix being the No. 1 market for home appreciation next year.

Dana

http://www.cnbc.com/id/15840232?play=1&video=3000085201

Dana Rasch NMLS 327037

There was a very interesting article out today indicating that banks are becoming more aggressive at  accepting short sales over completing the foreclosure process.   Actually, they should have been doing this all every since the market crashed in early 2008.

Consider how much the foreclosure process costs the banks including, legal fees, asset managers, extended zero rent on the property during the process, back taxes and liens against the property that have to be cleared before they can re market the property, and then the actual cost of paying a listing agent and selling agent to get the home sold.

In the beginning the number of short sales were absolutely overwhelming for the banks.  Systems were not in place to handle the process, and certainly the number of employees available were inadequate.  The result is that the market, both buyers and sellers, the banks and the mortgage brokers avoided short sales due to the complexity, extra work, and sheer slowness of the process.

That started changing a year or so ago and now all the problems in the paragraph above have been address and the process is smoother and quicker.

Last January, nationally pre-foreclosure sales (short sales) were up 33% over January of 2011.   In some states, short sales were up over 50% and even 100% in that state of Georgia.    Bank owned homes in the same month were only 2,500 home more that short sales.

If you are in an upside down mortgage situation and have considered a short sale as a solution to your dilemma, it might finally be the right time to move forward.   AND…. HERE IS SOME GOOD NEWS!

Yesterday a closed a new mortgage for a couple that had negotiated a short sale with their bank WITHOUT every missing a monthly payment.   Under FHA guidelines, if you can document all your mortgage payments on time even with a short sale, you can immediately purchase another home.   If you miss a payment or two however, you are looking at a 3 year wait until FHA will loan you money again.   (VA is a 2 year wait period)

If you want to discuss what your options are, please give me a call at  623-703-7099 and I will be happy to help you through the process.

Dana

Dana Rasch NMLS 327037

You read that right.  Don’t be shocked now, but I just read this interesting article from “Veros Real Estate Solutions” In the article, they are predicting growth in the Phoenix real estate market.  In fact, they are showing the Phoenix area as the best real estate market in the country.  The TOP 5 markets are as follows:

1.  Phoenix-Mesa-Scottsdale, AZ +5.0%
2.  Bismark, ND +4.3%
3.  Shreveport-Bossier, LA +3.4%
4.  Anchorage, AK +3.1%
5.  Fargo, ND/MN +2.7%

Maybe even more interesting in this list is the fact that Phoenix differs from ALL the other cities by the fact that the next 4 cities are all “OIL BOOM” cities.   Additionally, Phoenix is significantly larger than all these cities by a fact of 5 or more.

Whose in the bottom five?

1.  Bakersfield, CA -6.3%
2.  Modesto, CA -4.9%
3.  Fresno, CA -4.9%
4.  Reno-Sparks, NV-4.7%
5.  Stockton, CA -4.7%

Not surprisingly CA brings up the rear.  They are in real trouble in the Golden state, with people leaving the state in big numbers to escape the regulatory nightmare that the State has become.   California is the Greece of the United States and if they don’t turn things around soon, it is going to get a lot worse.

The city of Stockton, CA is in essence in Bankruptcy, and there lots of predictions about the City of Los Angeles being bankrupt by the end of 2014.

Aren’t you glad you live in Phoenix.

Enjoy your day

Dana

Dana Rasch NMLS 327037

Several times now, I have started to write about the up and downs of the interest rate market, but each time, I had difficulty figuring out WHY the rates were moving the way they were.

I’m still not sure I have an answer but I think, that now one else does either and this uncertainty is contributing to the funny movements in the rates.  Some days, I have seen some lenders lowering their rates in the middle day and at the same time others were moving rates up.

Obviously each lender has an in-house economist or trader who makes a final decision about rates daily.  All are just reacting the various bits of information about housing, bonds, bank health, government program or programs.

The bottom line however is that it is imperative that we watch these rates throughout the day so that we can choose the best and program that meets YOUR needs.

We have about 80 different lenders available to us from which to choose.  Each lender has a different focus and with experience we have figured out where to go for our customers depending on their needs and specifics of their personal situation.

Rates today, in case you are wondering were down this morning and have turned upwards in the past hour, and I am getting repricing notices from several of our lenders with higher prices.   Given what has been happening in the past couple of weeks, pretty typical.

Dana

From Mortgage Daily News comes this article:

With the new week comes new pain for Mortgages Rates, which rose to their highest levels of the year today.  Lenders have been adjusting their rate sheets all day and by varying degrees, so there’s greater than normal degree of variation between them.  For the most part, the 30yr Fixed Conventional Best-Execution Rate remains in the same 4.0% – 4.125% range, but for most lenders, borrowing costs at those rates are higher.

In addition, I am being informed by many of my lenders that 45 days in now the norm to get a mortgage completed.  The HARP2 program officially launched today and initial estimates are for strong demand for this amazing opportunity to refinance your home even if you owe more that your home is worth.