Monday, April 16, 2018

Buy Now? Or Wait Until Next Year?

Should I Wait until next Year to Buy? Or Buy Now? [INFOGRAPHIC] | MyKCM

Some Highlights:

  • The Cost of Waiting to Buy is defined as the additional funds it would take to buy a home if prices & interest rates were to increase over a period of time.
  • Freddie Mac predicts interest rates to rise to 5.1% by 2019.
  • CoreLogic predicts home prices to appreciate by 4.3% over the next 12 months.
  • If you are ready and willing to buy your dream home, find out if you are able to!

Friday, April 13, 2018

March 2018 Real Estate Market Statistics

The following is the latest Real Estate Market Statistics for March 2018.
Click here for the full report

  • Sales:   2,371 in March 2018 vs 2,494 last March  -4.9 %
  • Pending Sales:   2,894 in March 2018 vs 3,043 last March:  -4.9%
  • New Listings:   3,648 in March 2018 vs 3,604 last March:  1.2%
  • Average Sales Price:   $435,000 in March 2018 vs $404,200 last March:  7.6%
  • Total Market Time: 55 days in March 2018 vs 58 days last March:  5.2%
  • Inventory in Months: 1.6 months in March 2018 vs 1.3 months last March
Inventory by Area:
  • NW Washington County   1.55 months
  • Beaverton/Aloha               0.69months
  • Hillsboro/Forest Grove     1.28 months

Thursday, April 12, 2018

What Is Private Mortgage Insurance (PMI)?

What Is Private Mortgage Insurance (PMI)? | MyKCM

When it comes to buying a home, whether it is your first time or your fifth, it is always important to know all the facts. With the large number of mortgage programs available that allow buyers to purchase homes with down payments below 20%, you can never have too much information about Private Mortgage Insurance (PMI).

What is PMI?

Freddie Mac defines PMI as:
“An insurance policy that protects the lender if you are unable to pay your mortgage. It’s a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%.
Once you’ve built equity of 20% in your home, you can cancel your PMI and remove that expense from your mortgage payment.”
As the borrower, you pay the monthly premiums for the insurance policy, and the lender is the beneficiary. Freddie Mac goes on to explain that:
“The cost of PMI varies based on your loan-to-value ratio – the amount you owe on your mortgage compared to its value – and credit score, but you can expect to pay between $30 and $70 per month for every $100,000 borrowed.” 
According to the National Association of Realtors, the average down payment for all buyers last year was 10%. For first-time buyers, that number dropped to 5%, while repeat buyers put down 14% (no doubt aided by the sale of their homes). This just goes to show that for a large number of buyers last year, PMI did not stop them from buying their dream homes.
Here’s an example of the cost of a mortgage on a $200,000 home with a 5% down payment & PMI, compared to a 20% down payment without PMI:
What Is Private Mortgage Insurance (PMI)? | MyKCM
The larger the down payment you can make, the lower your monthly housing cost will be, but Freddie Mac urges you to remember:
“It’s no doubt an added cost, but it’s enabling you to buy now and begin building equity versus waiting 5 to 10 years to build enough savings for a 20% down payment.”

Bottom Line

If you have questions about whether you should buy now or wait until you’ve saved a larger down payment, let’s get together to discuss our market’s conditions and help you make the best decision for you and your family.

Friday, April 6, 2018

What Drives Mortgage Rates?

Below is some information on mortgage rates from one of my preferred lenders, David Duty with Guild Mortgage.

As you may be aware, interest rates have been steadily increasing over the last few months.  Since most buyers are facing rates in the upper 4% to lower 5% range, I wanted to give a reminder on what is driving this push and where we are likely going from here. 

The graphic below shows what news will likely make rates go up or down.  The first thing to remember is that nearly all conventional (Fannie Mae/Freddie Mac) and government (FHA, VA, USDA) loans are sold on Wall Street as mortgage-backed securities (MBS’s).   If you’ve ever accidently clicked past CNBC on your way to the Blazer game (or The Bachelor), you’ll see detailed results for both the stock and bond markets. In general when the economy is booming Wall Street investors are making money in stocks, and when the economy is slow those same investors are playing it safe by buying bonds (or MBS’s).   The more the economy gets healthy and the more investors buy stocks, the higher mortgage rates typically go.  One big factor to keep in mind though--the single biggest enemy of MBS’s (and low interest rates) is inflation.  While the Feds are raising the bank-borrowing (and Prime) rates to control inflation, it’s the one thing to keep your eye on.

So where will the rates go from here you ask?  Given the persistent worries about inflation and the low unemployment forecast, most economists see mortgage rates continuing to rise.  How much will depend on all the factors listed on the graphic. I wouldn’t hesitate to encourage rate sensitive buyers to buy now instead of later.  You just can’t argue with the numbers.

Monday, April 2, 2018

Homework Series - April 2018

Five additional April 'To-Do's' to contribute toward a worry free summer include:
1. Tell insects to bug-off - seal openings in eaves, decks and other structures to keep out carpenter ants and bees.  Eliminate standing water to nix mosquitoes.  And, if needed, call a pro to destroy wasp and yellow jacket nests.
2. Prep your tools for lawn care - replace spark plugs, change the oil and sharpen the blades on your lawn mower.  Clean, sharpen and repair any garden tools.
3. Tune up the air conditioner - get a jump start before the season and have a license HVAC contractor clean and service your AC unit to ensure it works properly before the summer heat comes.
4. Check the attic and garage - look for signs of animal activity, repair or replace any damaged insulation, and ensure stored items are secure, container lids are tight and replace dust covers/moth replellants if needed.
5. Clean up bird feeders - give feeders a deep clean (not just a rinse) to remove all traces of old seed and winter mildew.  This will help prevent spreading disease to birds and not attract rodents and insects.