In recent weeks, we have seen so much rate volatility that it's hard to keep up! We find our underwriters nervously reviewing appraisals with an eye toward inflation and a downturn-- but in Washington State, things are much rosier. I get a lot of calls from California lenders wanting our loans!
Good News for Whatcom County: Fortunately property values in Whatcom County show a 4.6% increase in the last year. Realtors and appraisers I have spoken with consider this a 'normal' market. If you notice the accents in Starbucks these days--Bellingham is the 'place to invest'. If you bought a home in Washington in the 3rd Quarter of 2006 for $300,000 according to the OFFHEO that same house was worth $323,400 in the 4th Quarter of 2007. Check out their cool online calculator: http://www.ofheo.gov/calculator/Default.aspx
Where's the Beef? With all the news about 'rate cuts' consumers are befuddled as to why we brokers are not offering rock bottom Home Loan Interest Rates. The 'Fed cut in interest rates' is not helping consumers. These cuts are to the rates at which the Fed lends to Banks: assisting the banks and investors, like Fannie Mae and Freddie Mac for their losses on bad loans. While the Prime Rate has dropped 1.5% in recent months (the index for most credit cards) --have you seen your credit card rates going down? Private enterprise at work.
Buying or Refinancing? If you are in the market now, get your application into a good broker and work out your plan and timing. Mortgage Brokers fund 60% of home loans in the United States because we offer choice and personal accountability. Our esteemed competitors, the retail banks, really can't compete with the broad range of loans we offer. Bring your Bank's GFE into any good broker for a reality check and you could be very pleasantly surprised at what we can do!
Surprises: Your Interest Rate Lock may be subject to new Fannie Mae/Freddie Mac 'pricing adjustments'. Underwriters are exercising these new guidelines which came into effect just after Christmas '07. Which means your Rate could go up or you may have to pay points for certain risk factors including your FICO score or if you are borrowing more than 80% Loan to Value. Mortgage Insurance rates are mooted to rise next. So if you are borrowing more than 80% be prepared for that extra payment: the higher your 'risk factors' the higher the MI factor. MI is not the bogey man...it is tax deductible for most homeowners this year but-- like most tax breaks what the IRS giveth the IRS can taketh away!
The lesson here is to live within your means and save 20% for your down payment. What will they think of next?
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