Blog - Robert Sinohue Great Loan Advice Danville California

Unemployment and Interest Rates Both Fall

Mortgage Rates Fall This morning it was announced that the US added 243,000 more jobs in January, the most jobs added since March and April of 2011. Unemployment followed suit and dropped to 8.5%; marking January as the fifth consecutive month unemployment has fallen. With these stats exceeding economists’ expectations, the market got off to a great start.

To add onto the good news, mortgage rates dropped to the lowest they’ve ever been in the entire 40 year history of the Freddie Mac Primary Mortgage Market Survey, shortly after the president announced details about his proposal to enable millions of homeowners the chance to refinance. At this time last year, borrowers were ecstatic to get a rate around 4.8%, and today we find rates almost a whole point lower.

Filed Under: Uncategorized

Banks Start To Loosen Up In Underwriting

FOMC senior loan officer survey 2011 Q4

After a half-decade of tightening mortgage guidelines, banks are starting to “loosen up”.

The Federal Reserve conducts a quarterly survey of its member banks and, last quarter, not a single responding bank reported having tightened its mortgage guidelines for prime borrowers.

A “prime borrower” is defined as one with a well-documented credit history, high credit scores, and a low debt-to-income ratio.

53 banks responded to the Fed’s survey and none said that mortgage guidelines “tightened considerably” or “tightened somewhat” between September and December 2011; 50 said that guidelines remained “basicaly unchanged”; 3 said that guidelines “eased somewhat”.

Mortgage applicants sometimes remark that the mortgage approval process can be challenging. Last quarter’s Fed survey hints that looser standards are coming.

Not since before the recession have banks lowered mortgage approval standards like this and it bodes well for this year’s Danville housing market. Real estate agents report that 1 in 3 home sale contracts fail with “declined mortgage applications” as a leading cause.

Looser mortgage lending standards should mean more home loan approvals for buyers, and fewer contract cancellations. This can spur the housing market forward.

Make note, though. “Looser standards” should not be confused with ”irresponsible standards”. It remains more difficult to meet bank standards as compared to 5 years. Today’s underwriters are more conservative with respect to household income, overall assets and credit scores.

Even as compared to one year ago:

Minimum credit score requirements are higher
Downpayment/equity requirements are larger
Maximum allowable debt-to-income ratios are lower

For buyers and refinancing households gaining approval, though, the reward is the lowest mortgage rates in a lifetime. Mortgage rates in California continue to fall, helping home affordability reach new highs.

If you’re in the market to buy a new home or refinance one, your timing is excellent.

Filed Under: Mortgage Guidelines Tagged With: Federal Reserve, FICO, Senior Loan Officer

What must I do to get pre-approved for a loan?

Trying to buy a home without a mortgage loan is next to impossible, for most people. A mortgage allows the homeowner to pay off the amount of the loan over a long period of time, in most cases its 30 years. Lenders make their money on mortgage loans from the interest that is charged on the loan throughout the payback period. Lenders will pre-approve a potential buyer before the fact so that the buyer can have a definite price range to consider. This gives the buyer confidence when searching for a home.

The first step in getting pre-approved for a loan is finding a trusting loan officer. If you don’t know where to find one, Real Estate agent s usually have good relationships with loan officers they trust. Another way would be to search the internet, now days spending a few minutes on the doing a little research on loan officers in your area is probably a smart thing to do.

Once you find a loan officer, they will review your financial status to determine where you stand. For this you will need to provide pay stubs, bank statements, W-2’s, and possibly tax returns. The loan officer will do a basic credit check and calculate the mortgage amount you can most likely handle. This process is usually free of charge and can be done over the phone or online.

Once the loan officer determines your status they will then explain what options are necessary to move forward in the home buying process, as well as the different programs that are being offered and which ones you qualify for.

If you decide to move in the home buying process and get a full approval for a loan. The mortgage professional will then run a more detailed analysis of your financials, which may involve presenting additional paperwork specific to your situation. At this point in the process you may start to incur fee’s that are payable to the lender.

When you want the loan for a specific property, the process will include an appraisal, possibly an inspection, and of course the final underwriting. If everything goes right and underwriting approves, you can close.

If you have any questions, or are ready to start the home buying process today, give Robert Sinohue with Guaranteed Rate a call. He is one of the top mortgage originators in the United States. With over 18 years of experience and over $750 million in mortgage loans funded throughout his career, He is a well known professional that focuses on building strong and long lasting relationships with each and every one of his clients.

Give Robert a call at 800-650-6097 or email rsinohue@guaranteedrate.com

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Filed Under: Mortgage Guidelines

Four Steps To A Stress-Free Refinance

With all this news about FHA helping lenders like Guaranteed Rate qualify more borrowers for refinances and the Stress Free Refinancing government instituting new refinancing programs, you may be considering looking into refinancing your home to take advantage of today’s record low rates. However, make sure you’re aware of the top four refinancing mistakes so that you can avoid them!

1. Refinancing When You Shouldn’t
Maybe your neighbor told you about the amazing low rate they refinanced with, or the news you’re seeing on our Facebook and Twitter is just making you anxious to join the party. Before you jump the gun, do some homework and make sure it’s the right move. Figure out the breakeven point for when savings outweighs the cost of refinancing. More importantly, determine how long you plan to stay in your current home – it’s usually a mistake to refinance on a home you’re not planning on staying in for several years.
2. Choosing the Wrong Loan Type
After you figured out you want to refinance, take time to establish what your objective is. Do you want to lower your overall payment regardless of the length of the loan? Do you want to be debt-free by a certain year? Consider the cost of the refinance in comparison to the financial benefits – is it worth it? Once you’ve answered these questions, talk to one of our loan officers to hear what type of loan will help you accomplish your goals.
3. Not Knowing Your Real Rates
When you’re looking at rates, make sure you’re comparing your APR (annual percentage rate) to know what your true rate will be. Check out our website to see a comparison of rates from various lenders to see which lender offers you the best rate.
4. Not Keeping Up With Your Borrower Responsibilities
As your lender, you rely heavily on us; however there are some obligations you have to take care of on your own. Make sure you have decent credit and avoid taking on any more debt, even after the refinance has been approved. Also, to make sure you get that low rate you worked so hard to find, check your lock-in dates so that you secure that interest rate, and make sure you turn in all documentation that’s needed as soon as it’s requested so you don’t delay your closing date, jeopardizing your interest rate.

Filed Under: Uncategorized

Home Affordability Threatened By Friday’s Jobs Report

3-month rolling average NFP

This week, once more, we find mortgage rates are on a downward trajectory. Conforming mortgage rates have returned to near all-time lows. After Friday morning’s Non-Farm Payrolls report, however, those low rates may come to an end.

It’s a risky time for California home buyers and would-be refinancers to be without a locked rate.

Each month, on the first Friday, the Bureau of Labor Statistics releases its Non-Farm Payrolls report for the month prior. More commonly called the “jobs report”, Non-Farm Payrolls provides a sector-by-sector employment breakdown, and the nation’s Unemployment Rate.

In December 2011, the government reported 200,000 net new jobs created, and an Unemployment Rate of 8.5%.

For January 2012, economists project 135,000 net new jobs with no change in the Unemployment Rate and, depending on how accurate those predictions are proved, FHA and conforming mortgage rates for homes in Blackhawk are subject to change. The monthly jobs reports tends to have an out-sized influence on the direction of daily mortgage rates.

The connection between jobs and mortgage rates is fairly direct.

Job growth is a key cog in the economic growth engine and mortgage rates change daily based on short- and long-term economic expectation. As more people join the workforce, economic expectations change; the economy tends to expand, breeding optimism among investment. When this occurs, it often spurs investment in the stock market, which tends to leads mortgage rates up.

In short, in a recovering economy, when job growth is strong, all things equal, mortgage rates rise. Home affordability suffers.

So, for today’s rate shoppers, Friday’s job report represents a risk. The economy has added jobs over 15 straight months, a streak that’s added 2.1 million people to the workforce. Although the jobs market remains weak and well off its peaks from last decade, a 15-month streak is worth watching. More jobs means more more income earned nationwide, more money spent by households, and more taxes collected by governments.

This items build a foundation for economic growth and Wall Street is watching.

If tomorrow’s Non-Farm Payrolls shows more jobs created than the estimated 135,000, mortgage rates are expected to rise. If the jobs figures falls short, mortgage rates should fall.

The Non-Farm Payrolls report is released at 8:30 AM ET.

Filed Under: The Economy Tagged With: Jobs Report, Non-Farm Payrolls, Unemployment Rate

FHA Adjusts Neighborhood Watch For Obama’s Refinance Plan

Obama Refinance The Federal Housing Administration (FHA) announced that it will no longer rank mortgage lenders based on performance of “streamlined” loans in its Neighborhood Watch system, in an effort to open up the program for more families.

Currently, FHA borrowers are allowed to refinance under the existing streamline program without a new appraisal, credit report or documentation, which is customary for standard refinances. However, as Guaranteed Rate reported earlier, due to FHA’s Neighborhood Watch, lenders have been denying some of these borrowers because it could compromise their status as FHA-lenders. By removing these streamlined refinance loans from lenders’ “compare ratio”, FHA has removed this problem for both borrowers and lenders.

“This will open the program up to many more families with FHA-insured loans” the White House stated. This is all a part of the president’s plan to increase refinances and help struggling borrowers.

Filed Under: Uncategorized

Case-Shiller Index Says Detroit And Washington DC Lead The Market

Case-Shiller Annual Change November 2011

Standard & Poors released its November 2011 Case-Shiller Index this week. The index measures the change in home prices from month-to-month, and year-to-year, in select U.S. cities.

According to the data, for the second straight month, home values fell in 19 of the Case-Shiller Index’s 20 tracked markets. In addition, also for the second straight month, Phoenix, Arizona was the lone Case-Shiller-tracked city in which home values rose.

Overall, November’s Case-Shiller Index showed a 1 percent decrease in home values between October and November 2011, and a near-4 percent decrease between November 2010 and 2011, putting home values at roughly the same levels as 8 years ago. Don’t read too far into it, however.

The Case-Shiller Index, though widely-cited, remains widely-flawed.

As a buyer or seller in Ruby Hill, for example, , relying on the Case-Shiller Index for market research can lead you to improper conclusions. To understand the Case Shiller Index’s methodology is to understand why.

First, the Case-Shiller Index draws its data from a very limited geography.

There are more than 3,100 municipalities nationwide. The Case-Shiller Index tracks just 20 of them. And they’re not the 20 largest, either. Four of the Top 10 Most Populous U.S. Cities are excluded (Houston, Philadelphia, San Antonio, San Jose) whereas Minneapolis and Tampa are not.

Minneapolis is the 48th largest city in the United States. Tampa is #55.

Next, when Case-Shiller Index gathers its data from its 20 cities, it only includes the home sale data of single-family, detached homes. This means that sales of condominiums and multi-unit homes are specifically excluded from the index. There are some cities — Chicago and New York, for example — where condominium sales represent a large percentage of the overall market.

The Case-Shiller Index ignores that.

And, lastly, when the Case-Shiller Index is published, it’s published on a 60-day delay. Its data is not “current”, therefore, and does little to tell buyers and sellers of Pleasanton and the country what’s happening in their home markets right this minute. Instead, the Case-Shiller Index tells us how the housing market looked two months ago.

If you’re active in the real estate market, either as a buyer or a seller, the Case-Shiller Index does you little good. For real-time data that actionable, speak to a real estate professional instead. It’s where you’ll find your best, most reliable and relevant information.

Filed Under: Housing Analysis Tagged With: Case-Shiller Index, Condominiums, Home Values

Do You Know How To Avoid The Four Most Common Mistakes Made When Buying A Home?

Buying a home is one of the biggest purchases of your life and you want to be cautious that you don’t make Homebuyer Mistakes any mistakes that you’ll regret later on. Here are the top four most common mistakes made when buying a home, along with tips on how to prevent yourself from doing them or how to recover if you have already made them.

Mistake #1: Not Getting Pre-Approved
The biggest mistake made by homebuyers and is the first thing you should do if you plan on buying a new home!
How to Prevent: Easy, get pre-approved! By getting pre-approved, you’ll be able to search for homes that affordable for you, while also putting you in a strong negotiation position when you make an offer.

Mistake #2: Not Using a Qualified Agent
If you’re not sure why you should use a buyer’s agent, click here. Ask friends, family or your loan officer for recommendations of who to use.
How to Recover: It’s never too late to get an agent, even if you’re already at contract, they can help with all the legal and negotiation aspects.

Mistake #3: Not Getting a Thorough Inspection
Getting a thorough inspection is the only way you’ll know you have real knowledge about the house.
How to Prevent: Hire a licensed home inspector. They take the emotion out of inspecting a home and give you a real, critique about the home you’re thinking to purchase.
How to Recover: If you didn’t hire a home inspector, try to get a good home warranty in case any issues do arise in the future.

Mistake #4: Focusing on Wants, Not Needs
This mistake is usually made by first-time homebuyers, but can happen to even the most experienced homeowner.
How to Prevent: Make a list of must-haves and refer to it when you’re house hunting. Make sure it is a list of NEEDS not WANTS.
How to Recover: If you’re in negotiations and realize you made this mistake, try using provisions of contract to either get out of the deal or fix the issues before you close.

Filed Under: Uncategorized

Supply Of New Homes At 6.1 Months Nationwide

New Home Supply 2010-2011

New Home Sales slowed into the New Year but the market for newly-built homes remains strong. For home buyers in California and nationwide, December’s New Home Sales report is yet one more signal that the housing market recovery may be underway.

According to the Census Bureau, the number of new homes sold in December 2011 slipped 2 percent to 307,000 units on a seasonally-adjusted, annualized basis nationwide.

A “new home” is a home that is considered new construction; a home for which the buyer will be the first owner and tenant.

As compared to December 2010, last months’ sales volume fell seven percent. It’s a statistic that suggests housing market weakness. However, in looking at a different component of the New Home Sales report — the supply of homes for sale — we’re forced to reconsider.

At the current pace of sales, every new home for sale nationwide would be “sold” in a matter of 6.1 months.

Economists believe that a 6.0-month supply defines a market in balance — anything quicker is termed a “seller’s market”. Statistics like that are enough to create urgency among today’s Pleasanton home buyers.

Unfortunately, the Census Bureau’s data may be wrong.

Although December’s New Home Sales report shows sales down 2 percent, the government’s data was published with a ±13.2% margin of error. This means that the actual New Home Sales figure may have been as low as -15.2 percent, or as high as +11.2 percent. And, because the range of possible values includes both positive and negative numbers, the Census Bureau had no choice but to assign its December data “Zero Confidence”.

It will be a few months before final revisions are made to December New Home Sales data. Until then, therefore, buyers should take cues from the market-at-large and the market-at-large hints at recovery. One example of this is homebuilders showing more confidence in their product than at any time in the last 5 years.

If your plans for 2012 call for buying new construction, therefore, consider using this lull to “make a deal”. As the year progresses, the great values in housing may be gone.

Filed Under: Housing Analysis Tagged With: Census Bureau, New Home Sales, New Home Supply

5 Simple Ways To Declutter Your Home

Declutter your home to help it sell faster When a home is listed for sale, its “clutter” can be the difference between a rapid sale and no sale at all.

Clutter, in its strictest sense, is defined as anything untidy; or in a disorderly state. In real estate, the term is broadened to include unnecessary furniture pieces; unwieldy artwork or collections; stacks of papers and/or magazines; and anything that otherwise restricts the open flow of a home’s floor plan.

In other words, clutter is anything that distracts from your home’s natural footprint.

As a home seller in Pleasanton , understanding how your home’s clutter can affect a buyer is paramount to helping your home sell faster, and at a higher contract price.

First, there’s the psychological angle. A potential home buyer may see clutter and think “mess”. Few people want to buy a house they find messy or otherwise disorganized.

Second, there’s the practical angle. A home that appears full of “things” also appears as if its lacking in storage space. This, too, can turn off buyers.

When you list your home for sale, here are basic tips to de-clutter your home. Some of this advice may not be practical with respect to your home, in particular, so make sure to ask your real estate agent for follow-up help.

In each room, remove photos, trophies, plaques and other personal items on display.
Remove large collections such as dolls, cars, miniature cans, and the like.
Remove worn throw rugs
Remove items from kitchen countertops, including small appliances
Remove items from bathroom countertops

You should also consider removing distinctive artwork from your walls, or replacing pieces with items that are more bland.

The over-reaching goal of de-cluttering is to depersonalize and neutralize your home so a buyer can visualize himself/herself living there. De-cluttering your home can also make your home appear larger, accentuating the features of each room.

It’s no wonder that minimally-cluttered homes tend to have a wider appeal among buyers.

Filed Under: Around The Home Tagged With: clutter, Home Sales, Listing