Good morning…
I hope you had a good weekend and are staying cool…the summer
heat is hitting us just as Obama’s visit stalls traffic for another week
or so. It took me an hour to get to an open house that’s normally
15 minutes away from where I live…but at least it was worth it!
On today’s call: Markets, Housing, Minimum Down Payment, Rates
- The stock market has erased some of its losses from last week
due to successful Greek elections and a positive homebuilder
sentiment index report. Unfortunately, the elections provided
no real solution to the bigger problem, and now investors’ are
focusing on Spain and it’s status with the Euro. The sentiment
index report rose to 29 in June, its highest level in 5 years. But
the benchmark is 50 so there’s a ways to go; the sentiment
hasn’t reached 50 in over 6 years. Keep an eye on the news on
Wednesday as it’s a big day for the Federal Open Market
Committee. They’re not expected to change interest rates, but
there be plenty of economic projections, which could give us
an idea of where things are headed (especially housing).
- The low homebuilder sentiment index number indicates that
more builders view sales conditions as poor than good. It’ll be
interesting to see how tomorrow’s housing starts report comes
in, as this is the actual results of those sentiments. This number
is not expected to change much. But it does seem like more and
more construction is popping up in the city, doesn’t it? The NAR
is expected to post an additional 90,000 sales in May in it’s
Existing Homes Sales report on Thursday. The homes sales figures
for Illinois have been solid the past few months and median prices
have shown signs of stabilizing. Hopefully May’s figures continue
the trend. Lenders are working on moving short-sale files faster
(although I’m skeptical on that) and inventory is starting to move
a little quicker. Has anyone noticed their business picking up?
- Down payments vary depending a numerous criteria such as the
loan program, the credit score, the type of property, etc. As I
mentioned last week, gift funds can be used to fund all, or a portion
of, the down payment. Here is a basic list of the percentages required
for purchasing a home these days:
1) Conventional = 5% down (20% to avoid mortgage insurance
or you split the loan into two)
2) Conventional condo = 25% minimum to get the most ideal rate
3) Conventional 2-unit = 20%
4) Conventional 3-4 unit = 25%
5) FHA = 3.5% minimum regardless
6) VA/USDA = 0%
7) Jumbo = 20%
8) Second home/Investment = 20%
If your client is looking at a particular property and they’re not quite
sure what the minimum down payment is, keep this handy or you can
just contact me.
- Interest rates are unchanged for the most part. The 30 year fixed is
still looking very impressive…in the mid-to-high 3% range. Still hard to
believe! With the LIBOR index now at 1.069, ARM rates are better
than ever. For example, a 7 year conforming ARM is under 3%!
Pattie, thanks for allowing me to host the open house on Saturday. I did
two pre-approvals this morning already…that home will sell quickly! If I
can be of assistance to anyone, please let me know. Have a great week…
JP
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