Category: Home Loans

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5 Inspection Problems Buyers Shouldn’t Ignore

I enjoy posting my own artciles and sharing others. This one from the Real Estate Daily News is very share-worthy – enjoy – Sabrina

5 Inspection Problems Buyers Shouldn’t Ignore

Home buyers need to be extra vigilant about inspections in the early stages of a purchase because if problems are discovered too late in the process, it can “dash home owners’ dreams and budgets,” writes Yahoo! Finance in a recent article.

One home buyer in Long Island, N.Y., explains in the story that she didn’t discover the fixer-upper she bought needed $225,000 in repairs until after she purchased it.

Jonathan and Drew Scott, who educate viewers about transforming fixer-uppers on HGTV’s “Property Brothers,” offers up a checklist of five things buyers should look for to ensure they don’t buy a lemon.

Mold: Buyers should note any musty smells in the home and be on the lookout for any mold. Mold can be caused by improper air circulation as well as water leaks.
Pests: Termite damage can be widespread and costly to repair.
Outdated fixtures and wiring: Electrical problems in a home can cause fire hazards. Buyers should take note of any indication of faulty wiring, such as cable coming out of drywall.
Poor DIY jobs: Buyers should make sure that the previous home owner’s do-it-yourself projects were done correctly and are up to code. For example, poorly done flooring and painted-over wallpaper can be time-consuming and costly to fix.
Drainage problems: Sloping sod can cause flooding problems in a backyard, and a slow-draining sink could be an indication of a bigger problem. Buyers should test sinks and flush toilets to test for any potential problems.

Source: “Property Brothers: Don’t Buy a House Without Checking These 5 Things,” Yahoo! Finance (Aug. 19, 2013)

I read this article at: http://realtormag.realtor.org/daily-news/2013/08/22/5-inspection-problems-buyers-shouldn-t-ignore?om_rid=AACmlZ&om_mid=_BSFlH2B80sQKxz&om_ntype=RMODaily

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FHA Trims Waiting Period for Borrowers Who Experienced Foreclosure

Great news for those who experienced hardships during the economic downturn!

FHA Trims Waiting Period for Borrowers Who Experienced Foreclosure

The Federal Housing Administration (FHA) is allowing borrowers who went through a bankruptcy, foreclosure, deed-in-lieu, or short sale to reenter the market in as little as 12 months, according to a mortgage letter released Friday.

Borrowers who experienced a foreclosure must wait at least three years before getting a chance to get approved for an FHA loan, but with the new guideline, certain borrowers who lost their home as a result of an economic hardship may be considered even earlier.

For borrowers who went through a recession-related financial event, FHA stated it realizes “their credit histories may not fully reflect their true ability or propensity to repay a mortgage.”

In order to be eligible for the more lenient approval process, provided documents must show “certain credit impairments” were from loss of employment or loss of income that was beyond the borrower’s control. The lender also needs to verify the income loss was at least 20 percent for a period lasting for at least six months.

Additionally, borrowers must demonstrate they have fully recovered from the event that caused the hardship and complete housing counseling.

According to the letter, recovery from an economic event involves reestablishing “satisfactory credit” for at least 12 months. Criteria for satisfactory credit include 12 months of good payment history on payments such as a mortgage, rent, or credit account.

The new guidance is for case numbers assigned on or after August 15, 2013, and is effective through September 30, 2016.

I read this article at: http://www.dsnews.com/articles/fha-trims-waiting-period-for-borrows-who-experienced-foreclosure-2013-08-19

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A Cinderella Story – Michael and Two Condos

With 25+ years of combined Real Estate experience, The Caton Team is blessed with working with our clients one home after the other.

When Michael bought his first condo with Susan years ago – it was only natural for him to call her again now that he was ready to buy his next home. By now Susan & I had teamed up and I had the joy of working with Michael as well.

Such a professional and patient gentlemen, we started our journey early in 2013. Faced with limited inventory and competition we took our time to find choice properties and enjoyed finding the right condo complexes that would fit his lifestyle.

Finally on a sunny Tuesday we found a great 2-bedroom 2-bath condo in San Mateo. It was a short sale but we were up for the task. Offer in, up against three other offers – we were so happy to let him know his offer was accepted.

Then the wait begins. For a short sale, the seller has a long to-do list. Great clients do what they need to do to get a short sale approved. Other types of people brush their responsibility off. We knew short sales take time to get approved. We knew short sales are a LOT of work. Each week we checked in with the seller’s agent and received short and useless updates. We grew suspicious and Susan hit the Internet to do some investigating. Much to our surprise, the unit was set for foreclosure auction the following day! Quickly The Caton Team reached out to the seller’s agent to implore the urgency of a true update. Sadly, not all Realtors are created equal and this particular agent brushed us off again. We did all we could do as the buyer’s Realtor and the following day, with baited breath, we watched the auction site to see if it would be postponed. Right before our eyes the unit was sold at auction. When we called the sellers agent to get a handle on this situation – she kindly hung up the phone.

Without missing a beat Susan called Michael and we hit the ground running looking for a new home. It didn’t take long, another unit, very similar to the one we just lost, was for sale – but they were taking offers the following day!

Michael is a trooper; he met Susan at the home the next morning, saw it, wrote the offer and submitted by the deadline. By that evening we had the joy of telling him is offer was accepted! Within less than 24 hours we went from bad news to fantastic news.

It ain’t over till it’s over though – that is a fact. As the escrow proceeded we had a hiccup – the unit did not appraise for our offer price….which was less than the last sale of an identical unit. When interest rates went up – the market had turned from a sellers market early in the year to a different market in a matter of weeks. The appraiser was cautious – and we can’t blame him for being prudent. No one wants another bust! Thankfully both the listing agent and the sellers understood the situation and we were able to re-negotiate a win/win deal that evening.

The best feeling in the world is handing over the keys. Though it was a long and bumpy ride, The Caton Team was able to get our client a better home and in the end Michael is happy – and that makes everything worthwhile.

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Will The Mortgage Rate Spike Slow Market Recovery?

I love finding articles with timely information – had to share this fabulous article by Jed Kolko, Chief Economist on Trulia…

Enjoy and I would love to hear your insight and comments as well!

Will The Mortgage Rate Spike Slow Market Recovery?

Ever since mortgage rates started their steep climb in early May, we’ve all been on high alert, watching how higher rates will affect the housing market. For a would-be buyer calculating the mortgage payment on their dream home, the effects are obvious: the increase in the 30-year fixed rate from 3.59% in early May to 4.73% at the end of August (according to the Mortgage Bankers’ Association, or MBA) means a 15% increase in the monthly payment on a $200,000 mortgage. That should deter homebuyers and reduce mortgage applications, sales, and prices, right? In theory, yes, but of course the real world is much more complicated. Mortgage rates aren’t rising all on their own: other housing and economic shifts are happening at the same time.

Fortunately, the recent past is a useful guide. The 30-year fixed rate jumped .47 points in May 2013 and .51 points in June 2013, comparing the levels at months’ end (MBA). (Side point: the 30-year fixed reached 4.80 this morning, September 11, .22 points higher than at the end of June, which means July, August, and early September have seen much milder increases compared with the May & June spike.) But this year isn’t the only time when mortgage rates have jumped up: they also climbed at least .4 points in seven other months since 1999. With some simple time-series regressions, we traced out the typical paths of mortgage applications, sales, and prices in the months immediately after a mortgage rate spike.

The Month-by-Month Impact of a Rate Spike Our analysis of mortgage rates and other housing data from January 1999 through April 2013 – just before the current spike – shows that mortgage rates hit refinancing applications (MBA) earlier and harder than any other measure of housing market activity. (Not all of the data series are available back to 1999.) Here’s the timeline of what typically happens when rates spike by half a point in a month:

The month when rates spike: Refinancing applications typically fall by 45% in the month of a spike, with further falls one and two months after mortgage rates jump, compounding the effect. The drop in refinancing applications this year was roughly 50% cumulatively over two months, which actually looks small compared with similar rate jumps in the recent past.
1-2 months after the spike: Pending home sales and home-purchase mortgage applications typically decline slightly, though the effect isn’t statistically significant. New home sales also decline modestly.
3 months after a spike: New home sales and existing home sales drop. That means that the May mortgage rate spike should show up most strongly in August new home sales and existing home sales, both of which will be reported later this month (on September 25 and September 19, respectively).

Compared with the impact on refinancing, the impact of a rate spike on home-purchase mortgage applications and sales volumes is very small and not always statistically significant.

Refinance mortgage applications (MBA)	Same month as rate spike (plus additional impact 1-2 months after)	-45%	Yes	May data (already reported)
Pending home sales (NAR)	1 month after	-1.1%	No	June data (already reported)
Home-purchase mortgage applications (MBA)	2 months after	-2.6%	No	July data (already reported)
New home sales (Census)	3 months after (plus modest impact 1-2 months after)	-2.4%	Yes	August data, to be reported Sept 25
Existing home sales (NAR)	3 months after	-1.7%	Yes	August data, to be reported Sept 19
Sales prices (Case-Shiller, FHFA)	No short-term impact	N/A	N/A	N/A

Note: The “effect in month of biggest impact” equals the month-over-month change in the indicator for a 0.5 point rate spike, relative to when the mortgage rate doesn’t change, in percentage points.

The Longer-Term Impact of Sustained Rate Increases Even if the immediate impact of mortgage rate spikes is small – aside from the huge effect on refinancing – shouldn’t sustained rate increases should depress housing activity? Again, recent history tells a more complicated story. Since 1999, mortgage purchase applications and all measures of sales activity – NAR pending home sales, NAR existing home sales, and Census new home sales – have actually been higher when mortgage rates were higher. Sales prices were also the same level or higher (depending on the sales price index) when mortgage rates were higher compared to periods of lower rates. Of all the measures of housing activity, only refinancing applications were lower during periods of higher mortgage rates.

Here’s the missing piece of the puzzle: over the past decade and a half, mortgage rates have been higher when the economy was doing better. Since 1999, the correlation between the monthly unemployment rate – a good, if imperfect, measure of how the economy is doing overall – and the 30-year fixed rate was -0.8, making it a very strong relationship.

Furthermore, every measure of housing activity (except refinancing activity) improved when the overall economy did better. That means that a stronger economy is associated with BOTH higher mortgage rates AND more sales, higher home prices, and more home-purchase mortgage applications. That’s why these measures of housing activity go up when mortgage rates are higher.

If we statistically remove the effect of changes in the overall economy (by including the unemployment rate as a control in a simple statistical regression), then we see exactly what we’d expect: mortgage applications, sales, and home prices are all lower when mortgage rates are higher. In other words: all else equal, higher mortgage rates do depress housing demand.

As Rates Rise, All Else Won’t Be Equal When it comes to mortgage rates, all else is never equal. Three other factors will complicate or even offset the impact of the recent rise in mortgage rates, even if rates continue to climb: the strengthening economy, expanding inventory, and looser mortgage credit:

A post-recession economic recovery tends to push interest rates higher as demand for credit increases and if investors start to worry more about inflation. Furthermore, the Fed has said it will taper its bond-buying only if the economy seems strong enough to weather it. Both through market forces and the actions of the Fed, rising rates should be accompanied by a strengthening economy.
Inventory has been expanding for the past six months on a seasonally adjusted basis. More for-sale inventory on the market slows price gains: in fact, the Trulia Price Monitor and other price indexes have been slowing down before the May rate spike could have affected prices, pointing to expanding inventory as a likelier explanation for the price slowdown. While rising rates and expanding inventory should both slow down prices, these same two factors should pull sales in opposite directions. All else equal, rising rates should slow sales, but expanding inventory should boost sales – since more homes can be sold if there are more homes for sale. Therefore, even though this month’s sales data should be slowed by sales, it could be lifted by rising inventory.
Mortgage credit, though still tight, shows signs of loosening for two reasons. First, as they face diminishing demand for refinancing, banks might look to expand their home-purchase lending instead. Furthermore, new mortgage rules coming into effect next year will give banks more clarity about which loans are considered risky, hopefully making banks more willing to write mortgages deemed to be safer. The negative impact of rising rates, therefore, could be partially offset by looser mortgage credit.

All told, the housing market and the economy have a lot of moving parts. Aside from the sharp and immediate effect that rising mortgage rates have on refinancing, the impact of rising rates on the housing recovery is hard to pinpoint. This month’s sales reports, covering new and existing home sales from August, should show some decline from the May rate spike, but mortgage rates are just one of many factors affecting the housing recovery.

I read this article at: http://pro.truliablog.com/news/will-the-mortgage-rate-spike-slow-market-recovery/?ecampaign=tnews&eurl=pro.truliablog.com%2Fnews%2Fwill-the-mortgage-rate-spike-slow-market-recovery%2F

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4 Tips to Determine How Much Mortgage You Can Afford

I had to share this article – with our Fall Real Estate Market starting now – it’s a good time to think about your budget if you are planning on becoming a home owner! I find so many buyers thinking about the house they want before they consider the impact of home ownership on their day to day finances. Taking time now, before you house shop, to put your financial house in order – will help your chances in this competitive market today! Enjoy – Sabrina

4 Tips to Determine How Much Mortgage You Can Afford

By knowing how much mortgage you can handle, you can ensure that home ownership will fit in your budget.

1. The general rule of mortgage affordability

As a rule of thumb, you can typically afford a home priced two to three times your gross income. If you earn $100,000, you can typically afford a home between $200,000 and $300,000.  To understand how that rule applies to your particular financial situation, prepare a family budget and list all the costs of homeownership, like property taxes, insurance, maintenance, utilities, and community association fees, if applicable, as well as costs specific to your family, such as day care costs.

2. Factor in your downpayment

How much money do you have for a downpayment? The higher your downpayment, the lower your monthly payments will be. If you put down at least 20% of the home’s cost, you may not have to get private mortgage insurance, which costs hundreds each month. That leaves more money for your mortgage payment.

The lower your downpayment, the higher the loan amount you’ll need to qualify for and the higher your monthly mortgage payment.

3. Consider your overall debt

Lenders generally follow the 28/41 rule. Your monthly mortgage payments covering your home loan principal, interest, taxes, and insurance shouldn’t total more than 28% of your gross annual income. Your overall monthly payments for your mortgage plus all your other bills, like car loans, utilities, and credit cards, shouldn’t exceed 41% of your gross annual income.  Here’s how that works. If your gross annual income is $100,000, multiply by 28% and then divide by 12 months to arrive at a monthly mortgage payment of $2,333 or less. Next, check the total of all your monthly bills including your potential mortgage and make sure they don’t top 41%, or $3,416 in our example.

4. Use your rent as a mortgage guide

The tax benefits of homeownership generally allow you to afford a mortgage payment—including taxes and insurance—of about one-third more than your current rent payment without changing your lifestyle. So you can multiply your current rent by 1.33 to arrive at a rough estimate of a mortgage payment.  Here’s an example. If you currently pay $1,500 per month in rent, you should be able to comfortably afford a $2,000 monthly mortgage payment after factoring in the tax benefits of homeownership.   However, if you’re struggling to keep up with your rent, consider what amount would be comfortable and use that for the calcuation instead.  Also consider whether or not you’ll itemize your deductions. If you take the standard deduction, you can’t also deduct mortgage interest payments. Talking to a tax adviser, or using a tax software program to do a “what if” tax return, can help you see your tax situation more clearly.

By: G. M. Filisko

I read this article at: http://members.houselogic.com/articles/4-tips-determine-how-much-mortgage-you-can-afford/preview/

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The Importance of Working with a Good Lender

The Importance of Working with a Good Lender – by Sabrina

Buying a home is serious business; especially on the San Francisco Peninsula where even a one bedroom condo can run about half a million bucks.

And in an industry where time is money and money talks, from time to time I will encounter a lender – that offers great rates and low fees – upfront. And no customer service when you really need it.

Much too often a buyer is tempted to get the best rate – without really considering the whole picture.

Unless you are paying cash – the home loan is the most important aspect of buying a home – aside from the home itself.

So when taking into account that a home is generally the largest purchase of a person’s life – shouldn’t we work with a bank that treats it with the same respect? YES!

There are hundreds of steps from finding the home to getting the keys. The loan is probably the largest hurdle aside from home inspections.

Once a buyer’s contract is accepted by the seller – it’s rush time. Most offers have a time frame – called a contingency period – to have the bank do their appraisal and have the loan/purchase terms reviewed and approved by underwriting. It can be as long as 17 days in a buyers market – or as short as 5 days in a sellers market. And this is where we separate the men from the boys. Some of these out of state or on-line lenders are not located here – where one is buying – and it can be extremely difficult to get information and approvals done when they close shop at 5pm and it’s only 2pm here!

That friendly voice that quoted a buyer a fantastic rate isn’t calling us back anymore…..and when they do it’s often not what we were hoping to hear. For example, they need more time to review the file – therefore we need to push back the close of escrow date – which seems easy – but again – time is money. The seller is expecting the buyer to perform to the terms of the contract and it’s not worth losing a home due to a lackluster lender…..and changing lenders mid way is generally not an option.

So – what can a buyer do to be competitive? Work with a local lender. Once your credit is pulled the first time – a consumer has 30 days to loan shop without hurting their credit score. So do it! Loan shop the whole month and find the best rate, the best fees and make sure the lender is attentive, local and can move at the pace the current market is dictating.

The Caton Team has a list of Client Approved Lenders – so please reach out to us and we’ll introduce you to the team.

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6 Wills, Won’ts and Worries of 2013 Home Buyers…. great article – had to share…

When I read this – I just had to share….

6 Wills, Won’ts and Worries of 2013 Home Buyers

Trulia Article By Tara-Nicholle Nelson

If you’ve ever taken up running, you might know what it’s like to strap on your new shoes, head over to the track and take those first few strides, then feel a pain in your chest, heaviness in your feet and possibly, actually see stars. Maybe your last steps off the track were accompanied by the thought process: “Either I’m crazy, or runners are.”

Until you have talked to a legitimate, dyed in the wool runner and told them your story, explaining why you detest running with every iota of your being you won’t know the runner’s secret: everyone feels that way at first. It’s the normal physiological adjustment to the increased load you’re putting on your cardiovascular and musculoskeletal systems, this pain you felt when you took those first few steps. It goes away in just a moment, if and only if you keep on running.

Sometimes, knowing that others react to a tough situation by feeling the same emotions, thinking the same thoughts, or doing the same things you do flat out helps you feel less crazy, panicked and out of control of your situation. It’s the concept behind support groups but, last I checked, there really isn’t such a thing as group therapy for home buyers. (Well, some would say that’s what Trulia Voices is for, but I digress.)

Today’s rapidly rising prices and generally volatile market does make things tough for buyers, so we thought we’d systematically explore – and then share – what’s going on inside the minds of the buyers on today’s market. Hopefully, sellers will find some insights for marketing their properties, too.

Fresh off the presses, here are some of the insights and takeaways from our latest American Dream Survey, pinpointing the things today’s buyers worry about, will and won’t do in their quest to get their own corner of the American Dream: a home.

Worry: Mortgage rates and prices will rise before I buy. Trulia’s Economist Jed Kolko reports that “the top worry among all survey respondents who might buy a home someday is that mortgage rates will rise further before they buy (41%), followed by rising prices (37%).” The worry is valid, given the fact that the market was depressed for so long and has a long recovery road ahead of it. It’s compounded by the fact that buying a home has gone from something that used to take a month or two and now routinely takes 6 months, 9 months, a year or even longer!

Here’s the deal: you can’t stop prices from rising. And fixating on this particular fear poses the potential pitfall of rushing to buy or making compromises that will turn out badly in the end. Don’t dilly dally, if you’re ready and in the market, and don’t mess around making lowball offers with no chance of success. But otherwise, don’t let this fear drive your buying and timing decisions.

Will: Be aggressive. B. E. Aggressive. Economist Kolko explained, “among survey respondents who plan to buy a home someday, 2 in 3 (66%) would use aggressive tactics such as bidding above asking, writing personal letters to the seller, or removing contingencies, to name a few.” What buyers do and don’t do in the name of aggressively pursuing their dream homes (and, consequently, what sellers expect) is slightly different in every town.

Knowing that other buyers are facing down the same challenges you are and coming up with similar, aggressive solutions can help you feel a little less crazy about your thought processes and emotions and the desperate measures that come to mind when you hear how many others think “your” home is their dream home. And that puts you back in control of what can sometimes feel like an out-of-control situation. Reality check: you are 100% in the driver’s seat when it comes to how aggressive you want to be in your pursuit of any given home, and which specific tactics you leverage in the course of that pursuit.

Worry: I won’t find a home I like. Forty-three percent of people who plan to buy a home in the next 12 months expressed the concern that they might not be able to even find a property they like. Perhaps these people were just seriously persnickety, but I suspect there’s a bigger issue at play here. All of us can find a home we like, but whether there’s anything we like enough to buy in our price range is a completely separate issue.

This worry, then, seems to be closely related to the fear of rising prices – buyers are rightfully fearful that home value increases will put their personal dream homes out of their price range. This is why it’s super important to:

be aggressive about seeing suitable properties as soon as they come onto the market
work with an agent whose offer pricing advice you trust
adjust your house hunt downward in price range if the market dynamics include lots of over-asking sales prices, and
not to let months and months go by while you make lowball offers or otherwise be slow to come to the reality of what homes are actually selling for in your area.

The sooner you put yourself seriously in the game and make reality-based offers, the more likely you’ll be able to score a home you like in your price range.

Worry: I will have to compete with other buyers for the home I like. Twenty-seven percent of those who plan to buy at some point in the future and 32% of those who plan to buy in the next year said they feared the prospect of facing a bidding war. This worry is well-grounded. In California, the average property receives four offers – but stories of dozens of offers abound. And it’s not just a West Coast phenomenon: buyers from coast to coast trade tales of getting outbid and having to throw in their firstborn child, lastborn puppy and most precious earthly possessions just to get into contract.

Truth is, market dynamics vary from town to town, and even neighborhood to neighborhood, but if you’re buying on today’s market or planning to buy anytime soon, bidding wars, multiple offers and over-asking sales prices are a reality you will probably have to factor into your house hunt.

Won’t: Bid way more than asking. Only 9 percent of wanna-be buyers said they would bid between 6 and 10 percent over the asking price for a property. This finding surfaces the uber-importance of checking in with an experienced local agent to get a briefing on precisely how much over asking homes are selling for in your area. This empowers you to tweak your online house hunting price range low enough that you can make an over-asking offer and be successful without breaking the bank. And once you’ve gotten a reality-based estimate of the over-asking norm, it will loom less ominously in your mind’s eye as a potential American Dream-killer.

Worry: I won’t qualify for a mortgage. Thirty percent of all people who identified themselves as planning to buy a home in the future said they were worried they might not be able to qualify for a home loan. (Interestingly, only 25 percent of buyers in hot markets like Oakland and Las Vegas expressed this concern – rapidly rising prices and knowing lots of other buyers are closing transactions in your town seems to ease this fear.)

Of all the worries on the list, this is the one over which a smart buyer has the most power. So exercise it! Work with a mortgage broker who was referred by friends, family members or an agent you trust. And ideally, work with them months – even a year or more – before you plan to buy. They can help you put an action plan in place around boosting your savings and credit score, and minimize your debt and credit dings, that you can work to minimize mortgage qualifying dramas when the time is right. They can also help give you a stronger sense of what you can afford vis-a-vis your income, to help you anticipate any challenges related to what sort of home your dollar will buy in your market.

ALL: What worries do you have about today’s market? Which steps are you willing to take in your quest to achieve the American Dream?

I read this article at: http://www.trulia.com/blog/taranelson/2013/07/6_wills_won_ts_and_worries_of_2013_home_buyers?ecampaign=cnews20+and1308A&eurl=www.trulia.com%2Fblog%2Ftaranelson%2F2013%2F07%2F6_wills_won_ts_and_worries_of_2013_home_buyers

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call The Caton Team at 650-568-5522

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Thanks for reading – Sabrina

What Will Waiting to Buy a Home Cost You?

What Will Waiting to Buy a Home Cost You? Great article from Realtor.com

At the end of June, mortgage rates for a 30-year fixed-rate mortgage jumped to 4.5 percent, up from 3.9 percent on June 1 — and a notable jump from the historically low 3.35 percent monthly average rate toward the end of 2012. However, while higher rates do mean an increase in monthly mortgage payments, experts are urging potential home buyers not to resign themselves to renting for the next few years just yet — it’s still a good time to buy a home.

These moderate increases in payments may still be manageable, particularly if buyers look at less expensive properties, or negotiate a lower price.

For example, the difference in monthly payments for a $200,000 home at 3.9 percent and one at 4.5 percent is just $70.03. If budgeted correctly, this could be a manageable expense.

Rick Allen, chief operating officer of Mortgage Marvel, is one expert who says now is still the time to buy a house. His platform records online mortgage loan applications, about a million transactions a year, which serves as a barometer for how well the housing market is doing. He says that refinances are down, as to be expected with a rate increase, but that “shouldn’t scare people off.”

“Relatively speaking, rates are still at or near historic lows,” says Allen. “A 4.5 percent mortgage is still an incredibly attractive rate at which to finance a home. From a real estate perspective, we’re not far off from recent lows, and we’re heading to improve real estate values. The combination of those two factors make this still a good time to buy.”

As the unemployment rate continues to decline, Allen says we’ll see more potential homeowners enter the market as well. Though Allen says “theoretically, rates could go through the roof or back down to the floor” but he personally believes we’ll see rates around 5 percent through the end of the year.

This is the early stage of the recovery of the housing market, and the rising interest rates encourage potential home buyers to be more decisive, and act quickly. As more homes are bought, supply decreases, so prices may rise even further. So if you’ve been thinking about buying a home, don’t lose your confidence, but it may be prudent to act quickly as rates continue to rise.

My 2 Cents

I couldn’t agree more – and I am NOT trying to fear monger. The truth of the matter is – no one has control of the Real Estate market. We as a collective influence the market by our actions or lack of – but it the end – the market will move at its own pace. In our experience, those trying to figure it out or ‘play the game’ generally miss the boat of opportunity.

Instead The Caton Team has our clients consider what their overall plan is, and generally having a home to live in is pretty high on their list. So we tackle the market in the moment and do our best to achieve their goal of homeownership.

I read this article at: http://www.realtor.com/news/what-will-waiting-to-buy-a-home-cost-you/?cid=EML301130

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Email Sabrina & Susan at: Info@TheCatonTeam.com

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Thanks for reading – Sabrina

Changes are Coming to FHA Home Loans…

Changes are Coming to FHA Home Loans

I am a fan of the FHA home loan because it helps so many first time buyers get a home here on the SF Peninsula where home prices are an the high side. What saddens me are the recent changes in store for FHA clients.

Newly Originated FHA-Insured Loans Will Become More Expensive Beginning June 3, 2013.

One of the attractive features of FHA mortgages is the low down payment option. In fact, many FHA loan programs require as little as 3.5% down.

Today, mortgage insurance on FHA loans remains in place for a finite period of time. However, on most new FHA loans originated on or after June 3rd, the MI premium will remain for the life of the loan.

Now sure how this will impact you? Give The Caton Team a call or email!

If you or someone you care about have considered purchasing a home, please contact us immediately to ensure this new FHA policy doesn’t increase the lifetime cost of the transaction. Beating the June 3rd clock could potentially save thousands over the life of the loan.

And please do not be discouraged – there are several different loan options and programs available!

Thank you Melanie Flynn of First Priority Financial for this information. If you would like to connect with Melanie – give us a call or email!

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at: Info@TheCatonTeam.com

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