university fix and flip: University RE Trends: Investing
- 12/17/08 05:00 PM
Loan Considerations for Buy and Hold InvestorsAs far as investment loans, little or no money down loans are impossible. However, lenders do permit the use of Home Equity Lines of Credit or second mortgages from other properties owned by the borrower as a source of down payment. Or, self-employed borrowers are using funds from business lines of credit to fund down payments or renovations (please note: there are asset seasoning guidelines for doing so and the debt incurred by accessing other credit lines must be accounted for against the borrower’s debt-to-income ratio). Thus, we have clients leveraging themselves with other homes … (0 comments)
university fix and flip: University Real Estate Trends: Fix and Flip Considerations...
- 12/17/08 05:00 PM
Loan Considerations for Fix & Flip / Short-Term InvestorsSecuring conventional financing on a fix & flip or short-term loan is not recommended. Most conventional lenders sell off their mortgages to investors on the secondary market. If the loan is paid off early (before six payments are made), the investor has not recovered their initial investment. The investor will attempt to recover their loss from the lender, who will ultimately come after the loan originator. The loan originator would then be obligated to pay back any premium paid out by the lender. If such activity becomes habitual with the loan officer, the … (0 comments)
university fix and flip: University RE Trends: Jumbo Mortgage Loans
- 12/17/08 04:59 PM
Loan Considerations for Jumbo MortgagesFor the Greater Metro Denver area, any loan amount greater than $417,000 is considered a jumbo loan. Fannie Mae and Freddie Mac assign different thresholds for various regions across the country. For instance, $417,000 is not considered a jumbo loan in a high cost city like San Francisco, yet there will still be higher rates for going above $417K. Due to the size of jumbo loans, they are considered greater risk for lenders, resulting in higher rates. Rates have fluctuated greatly over the past few years on jumbos. As of today, a 30 year fixed could range … (0 comments)
university fix and flip: University Real Estate Trends: Loans
- 12/17/08 04:58 PM
Loan Considerations for Loan Amounts Between $200K - $417KWith all the doom and gloom publications that are mostly exaggerated, many potential borrowers believe that home mortgage lending options have dried up. While underwriters and investors are scrutinizing files more closely, attractive rates and terms still exist for owner occupied purchasers seeking a conforming loan limit (under $417,000). FHA and VA can still lend up to 100% LTV and conventional permits up to 97% LTV. There are certain guidelines to meet when going to these high LTVs, but they are not impossible to surmount.Every home buyer should first ask themselves what payment … (0 comments)
university fix and flip: University Real Estate Trends: FHA Loans...
- 12/17/08 04:57 PM
FHA First-Time Buyer Tax CreditIn an effort to boost the sagging real estate market and overall economy, first-time home buyers are being offered a limited time tax credit when purchasing a primary residence. The highlights of the tax credit are:• The tax credit is available for first-time home buyers only. • The maximum credit amount is $7,500. • The credit is available for homes purchased on or after April 9, 2008 and beforeJuly 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. • The tax credit … (0 comments)
university fix and flip: University RE Trends: First Time Buyers
- 12/17/08 04:56 PM
Loan considerations for a first time buyerLending guidelines are changing on a daily basis for every type of loan: conventional, FHA, VA & commercial. Nevertheless, there are still very attractive first-time home buyer options available. If you are or will be a first-time buyer, it is critical to speak with a loan officer before looking at homes. It is a crushing feeling to view a home, picture making it your own and then find out that you cannot qualify to purchase it. A loan officer will pull credit, analyze debt-to-income ratios, review assets and income and determine what you can afford. … (0 comments)
university fix and flip: University RE Trends: FICO Scores and Interest Rates (Pt. III)
- 12/17/08 04:56 PM
How can you improve your FICO score?To improve one’s credit score, it’s critical to understand the factors influencing a credit score. The factors that contribute to a FICO score and the weighted percentages for each are as follows:• 35% — timeliness of payments • 30% — the ratio of used debt to allowable debt for consumer credit • 15% — length of credit history (the more credit history and showing proof of consistent timely payment, the better the score) • 10% — types of credit used • 10% — recent credit inquiries and recent new credit The greatest driver behind a … (0 comments)
university fix and flip: University RE Trends: FICO Scores and Interest Rates (Pt. II)
- 12/17/08 04:55 PM
How does your FICO score impact your interest rate on your loan?Low credit scores are deemed greater risk for lenders since the likelihood for defaulting on the loan increases. As such, lower FICO scores translate into higher interest rates. Mortgage lenders will group credit scores in a range, usually in 20 or 40 point increments, with interest rates progressively getting better for each higher interval. For example, a borrower with a middle credit score between 660 – 680 will have a higher interest rate (presuming all other variables being equal) compared to one with a 680 – 700 score. Typically, when … (0 comments)
university fix and flip: University RE Trends: FICO Scores and Interest Rates (Pt. I)
- 12/17/08 04:54 PM
What is a FICO score?FICO stands for Fair Isaac Corporation, a company that created the most used credit scoring model in the United States. An individual’s credit score is calculated through a statistical algorithm and is used as a factor in determining the likelihood of a borrower defaulting on a loan. FICO scores are generally used for obtaining mortgages, car loans or consumer credit. The scores are provided from the three major credit reporting agencies: Equifax, Experian and Transunion. Typically, there is a variance amongst the scores since each agency has a slightly different scoring formula. FICO scores range from 300 … (0 comments)
university fix and flip: University Real Estate Trends: Market Activity Update
- 12/17/08 04:53 PM
TOPIC: Improving conditions in Denver’s marketThere are some signs of strengthening in our Denver market. The metro area's inventory of available resale housing decreased 20% to 23,120 units in October from October 2007. Some of this reduced inventory is attributed to homeowners taking their properties off the market in frustration because their property is not selling, but lower inventory implies a strengthening market. Remember, the Denver area had housing inventory of 31,989 units in July 2006. Home sales rose 14% to 4,265 in September compared to the same month last year. This is due almost entirely to the lower-end of the … (0 comments)
university fix and flip: Investors in University: Understanding Egress Windows
- 11/04/08 02:09 PM
A lot of investors ask what an egress window is and when one is needed. Technically, it's a window for a room below grade that a municipality has deemed large enough to be safe for exit in case of emergency. While there are some variations, the window needs to be large enough that a firefighter with an oxygen bottle on their back could get in, then carry out an injured person in a fire. Most often, it's associated with a basement bedroom window, making it a legal bedroom. Basement bedrooms without egress windows are illegal. Installing an egress window makes them … (0 comments)
university fix and flip: Investor in University: Things to keep in mind when seeing a foreclosed home
- 11/04/08 02:08 PM
As investors we face a number of very real and very scary challenges. Making sense of this market is no mean feat and one has to be very careful with his or her investment. However, we usually think about danger as financial. Unfortunately, on rare occasion it can be even worse than that. The majority of the homes investors are buying these days are vacant and once in a while people break in and live in these properties illegally. The last thing you want to do is walk in on someone camped out in a house, perhaps conducting illegal an activity. This … (0 comments)
university fix and flip: University, Colorado 3Q 2008 Condo Price Performance
- 11/04/08 02:07 PM
The big message has not changed since last quarter - it's still a great time to be a buyer in the condo market. Prices are at a three year low in many areas, and interest rates on mortgages are still historically low.The average condo price in Metro Denver declined 4% between 2006 and 2007: from $187K to $180K. Homes dropped 3% in that time period. Looking just at the first nine months of 2008 vs. the same time period in 2007, the price dropped 6%: from $181K to $172K. Homes dropped 11% in that time period. From their peak prices in … (0 comments)
university fix and flip: The Truth about University's Home Inventory
- 11/04/08 02:05 PM
If you have not heard already, the inventory of home on the market in Denver has been declining. This is not true in many regions of the county. Your clients, who often only see national headlines, might not be aware of this favorable news. Our market has some unusual factors at work. Let's explore them, so you can better help your clients.If you look at the first chart (MOI 1), you'll see the MOI (months of inventory) for Denver's suburbs on the bottom axis and the average sales price in that suburb on the axis on the left side. Denver metro … (0 comments)
university fix and flip: University, Colorado 3Q 2008 Home Price Performance
- 11/04/08 02:04 PM
The average home price in Metro Denver increased +2% in the full year 2005 to the full year 2006. Comparing 2006 to 2007, the average home price across the metro dropped 3%, to $303,000. The average price in the first three quarters of 2008 was $272,000 vs. similar period of 2007 was $308,000: an 11% decrease. These numbers will be slightly different than Metrolist, as they are just Denver Metro and don't include outlying areas like Colorado Springs or Boulder.Much of the decline is a mix issue. For example, sales volume of homes over 4,000 square feet has plummeted in the … (0 comments)
university fix and flip: University, CO Real Estate Investing
- 11/04/08 02:03 PM
Investor often ask me what types of real estate investments are available on the market. Here's what we tell them. This is the first of several postings on the topic. Please offer comments - positive or negative! Assignments. If you don't have much equity to work with, and/or if your credit power is limited, assignments can be a way to get started in real estate investing. You will need to have a strong "sales" personality to succeed at it, though.
Rental Condo or Rental Home. Purchase of a residential property to be rented out to tenants, usually on a 6-12 month lease … (0 comments)
university fix and flip: University, CO 2Q 2008 Home Price Trends
- 11/04/08 02:02 PM
Recap of First Half 2008 Home Price Performance The average home price in Metro Denver increased +2% in the full year 2005 to the full year 2006. Comparing 2006 to 2007, the average home price across the metro dropped 3%, to $303,000. The half of 2008 was $275,000 vs. the first half of 2007 was $306,000: a 10% decrease. These numbers will be slightly different than Metrolist, as they are just Denver Metro and don't include outlying areas like Fort Collins, Colorado Springs, or Boulder. The average price of a foreclosure dropped -6% to $168,000 in the first half of 2008. … (0 comments)
university fix and flip: University, CO 1Q 2008 condo real estate trends
- 11/04/08 02:01 PM
Recap of First Quarter 2008 Condo Price Performance The average condo price in Metro Denver decreased -2% in the full year 2005 to the full year 2006, from $190,000 to $187,000. Comparing 2006 to 2007, the average condo price across the metro dropped -3%, to $180K. Looking at the first quarter 2008 vs. the first quarter of 2007, prices dropped 4%, from $175K to $169K. The average price of a foreclosure or short sale condo dropped from 2006 from 2007 by -6% to $108,000. The average price of a non-distress sale increased +2% to $211,000. Sales volume in January and … (0 comments)
university fix and flip: University, CO 1Q 2008 real estate trends
- 11/04/08 02:00 PM
Recap of First Quarter 2008 Home Price Performance The average home price in Metro Denver increased +2% in the full year 2005 to the full year 2006, from $309,000 to $317,000. Comparing 2006 to 2007, the average home price across the metro dropped 2%, to $311,000. The first quarter of 2008 was $278,000 vs. the first quarter of 2007 was $296,000: a 6% decrease. Note that prices in the first quarter are usually a bit less than the rest of the year. This is because families that tend to purchase larger, more expensive homes tend to move in the summer months … (0 comments)
university fix and flip: University, CO Fourth Quarter 2007 Home Price Performance
- 11/04/08 01:59 PM
Recap of Denver Fourth Quarter 2007 Home Price PerformanceThe average home price in Metro Denver increased +2% in the full year 2005 to the full year 2006, from $309,000 to $317,000.Comparing 2006 to 2007, the average home price across the metro dropped 2%, from $311,000. The average price of a foreclosure or short sale dropped in that time period -3% to $188,000. The average price of a non-distress sale increased 5% to $370,000. Sales volume over the last twelve months is off -4% for DSF/ASF. Foreclosure and short sale volume is up +31%; non-distress seller volume is off 20%. If … (0 comments)
Loan Considerations for Buy and Hold InvestorsAs far as investment loans, little or no money down loans are impossible. However, lenders do permit the use of Home Equity Lines of Credit or second mortgages from other properties owned by the borrower as a source of down payment. Or, self-employed borrowers are using funds from business lines of credit to fund down payments or renovations (please note: there are asset seasoning guidelines for doing so and the debt incurred by accessing other credit lines must be accounted for against the borrower’s debt-to-income ratio). Thus, we have clients leveraging themselves with other homes … (0 comments)
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