Archive for May, 2009
May 20th, 2009 | 
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Enjoy these links to multiple articles that have recently been published in the New York Times about Portland’s people, culture and places.
Portland, Portland Style: Touring by Bicycle
The index measuring current confidence rose two points, from 12 in April to 14 in May.
Any reading under 50 still indicates the majority of builders view conditions as poor.
“The fact that the May [Housing Market Index] continued to tick up from April’s 5 point increase provides confirming evidence that the improved confidence level was no fluke,” said NAHB chief economist David Crowe. “This continued increase indicates that home builders feel we’re at or near the bottom of the market and that positive signs lie ahead for builders and potential home buyers, provided that builder access to production credit significantly improves.”
A separate index measuring expectations for the next six months rose three points to 27.
It is the first back-to-back increase in builder confidence since February 2008 and is now at its highest level in eight months.
Builders and Realtors are hoping lower prices and historically low mortgage rates will overcome tighter lending standards. The housing market may also benefit this year from an $8,000 tax credit for homebuyers.
Earlier this month, the National Association of Realtors reported pending sales of existing homes rose 3.2 percent in March, the first back-to-back increase in pending sales in a year.
In my 23 years of selling real estate, I don’t know if there has ever been a better time for first time homebuyers to get into the market. Armed with record low 30 year fixed interest rates of 4.625%, an 18% reduction in home prices over the past year, a slew of homes on the market to purchase and now the $8,000 Home Buyer Tax Credit, this is an incredible opportunity.
What this means is that you will effectively be paid $8,000 (in the form of a tax credit, whether you paid the taxes or not) if you purchase a home. This is truly an amazing opportunity.
Thanks to the American Recovery and Reinvestment Act of 2009.
- The tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
- The tax credit does not have to be repaid.
- The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
- The credit is available for homes purchased after January 1, 2009 and before December 1, 2009.
- Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
To learn more, call Lee Davies Real Estate today. If you qualify, then this is the time to move and we look forward to educating and representing you.
Portland homeowners have a new reason to thank FHA due to the recent increase in mortgage loan limits. Buyers may obtain a fixed rate loan up to $417,000 in the Portland, Vancouver with only a 3.5% down payment!
Even better yet, today’s rate is 4.5% fixed for 30 years!
To learn more, call Lee Davies Real Estate today and we will introduce you to our partners Brian Page and Jeanine Roe at Northwest Mortgage Group to determine which financing option is in best for you. While we love selling homes, our goal is to educate our clients first, so that they can determine if this is the right time to move. We look forward to guiding you.
There are many attractive solutions for Jumbo mortgages and, thanks to the fact that second mortgages do still exist, Jumbo buyers with 20% down, can take advantage of these incredible 4.625% conforming rates.
To clarify, “Jumbo Buyers” refers to buyers who plan to finance more than $417,000, the conforming loan limit as established by Fannie Mae, Freddie Mac, and the federal government for Oregon. Therefore, many people who want to purchase a $700,000 home, with 20% down payment, have not had the luxury of obtaining these recently available sub 5% rates. In fact, Jumbo rates this past fall were generally above 7% and had a tremendous negative impact on the sale of homes above $500,000.
Last fall, a home purchase price of $700,000 with $140,000 down payment (20%), and a $560,000 loan at 7%, would have resulted in a monthly payment of $3,725 on a 30 year loan. Today, thanks to lower interest rates and new programs, borrowers have many options to choose from for the same scenario. Here are three options:
- Conforming first mortgages of $417,000 at 4.625% for 30 years creates a payment of $2144, and then add a second mortgage (US Bank) of $143,000 at 7.9% on a 20 year amortization for an additional $1187. The combined payment of the first and second would be $3331, resulting in a payment $394 lower today!
- Washington Federal now boasts Jumbo rates up to a loan amount of $600,000 at 5.75%. So, with our $560,000 loan amount the payment would be $3268 and result in a $457 savings.
- The ING 7 year A.R.M. will provide a buyer with a 4.875% fixed rate for 7 years. This translates into a payment of $2964 for a loan amount of $560,000 and a savings over last fall’s fixed rates of $761 every month!
These significant savings allows buyers to now comfortably afford a home they passed on last fall, or it could allow them to borrow an additional $100,000 while enjoying the same payment! Combine this with the fact that prices are down close to 18% over last year; the news is tremendous for home buyers.
To determine what your best acquisition strategy is, know that each of these programs has it’s advantages for buyers who have different circumstances. For the buyer who only wants a mortgage of $417,000, the second mortgage can be paid off quickly without payoff penalty, leaving one with the incredible long term rate of 4.625 for the life of the loan. The Washington Federal program is terrific to have the security of a Fixed 30 year mortgage today. And the ING A.R.M. is a terrific loan for those who know they will live in the home for less than 7 years as well as it gives buyers the most buying leverage with the lower payment.
To learn more, call Lee Davies Real Estate today and we will introduce you to our partners Brian Page and Jeanine Roe at Northwest Mortgage Group who will determine which financing option is in best for you. While we love selling homes, our goal is to educate our clients first, so that they can determine if this is the right time to move. Please consider us part of your consulting team.
