Joe Montoya's Real Estate Blog

1903 Seal Way Discovery Bay  $ 495,000

Dream home on the water at Discovery Bay. Unbelievable at this price for full water/view with side yard access; 3 car garage, 3 bedrooms, 3 baths w/bonus room- Possible 4th Bdrm. Large deck, U Dock and fabulous views. Terrific kitchen w/all amenities and tons of appeal. Tile floors, stone fireplace & can accommodate extra large boat.
For more information contact Joe Montoya at 209-740-1447 or by email at joemontoya@gotracy.com For financing on this fabulous home on the water in Discover Bay contact Matt Rainer at mrainer@LoanSimple.com

Get the lowest interest rate on this Country Estate. 

Getting the Lowest Interest Rate on this Featured Home

THE lowest interest rates in decades sound enticing enough, but they are often out of borrowers’ reach.

Mortgage lenders adjust their rates based on perceptions of risk, so unless you can show you’re a low-risk borrower, you are unlikely to qualify for a rate that matches those seen in all the advertisements or headlines.

The rates quoted by Freddie Mac and others are averages drawn from a variety of financial institutions, and lenders use varied approaches to set them.  These rates are not necessarily available to al borrowers.  Consumers who want to try for the lowest rates available need to consider these basic factors.

CREDIT SCORE The ideal borrower has a FICO score of 740 or higher and that will put you in the best possible place for the best possible interest rate.  Currently, borrowers with scores 760  to 850 (perfect score) could qualify for rates as low as 3.95%.   That rate can change considerably depending on credit, loan amount, and other loan considerations.  

POINTS The lowest rates usually are decreased by paying a fee called a point, or 1 percent of the loan amount.   Rates can also be bought down, so ask before you sign on the dotted line and find out what it will take to get the best possible rate.  A lot will depend on your financial situation and how long you plan to live in your home.        

PROPERTY TYPES If you’re buying a duplex or a four-unit building, your rate will almost certainly be higher. Condominiums may also have a rate premium, especially if they are newer or your down payment is below 25 percent. Lenders charge more if you are not planning to live in the home. Commercial properties like apartment buildings have the highest rates, as they are usually considered riskier.

DOWN PAYMENT   Putting as large a down payment as possible will also help get you the most favorable terms on your new home loan.  If you can put 25% down payment you are most likely to get the most attractive rates out there.  Generally, the more equity you have in the home the more favorable the terms. 

LOAN LENGTH A lot depends on how long you plan to live in a home. If you’re likely to move in a few years, an adjustable-rate loan with a low interest rate fixed for, say, three to five years, and adjusted afterward, might work best. Also, rates on 15-year fixed-rate loans are lower than those on the 30-year — 0.77 percentage points, on average, last year, according to Freddie Mac.   Some borrowers may not need to have a long term loan because they do not plan to be in the area for 30 years.   And,  borrowers may also be able to reduce their mortgage rate when they enter into a “lock-in” agreement with a lender.   Lenders typically offer a lower rate for a shorter lock period because their risk to rising costs is more limited. 

Lenders typically agree not to change an offered interest rate for 60 days, but borrowers confident of a quick closing may be willing to accept a 45-day rate guarantee, or even a 30-day lock, in exchange for a small discount, because the transaction’s speed helps the lender reduce its risk.

For more information about this property or how to get the lowest interest rate for you, contact Joe Montoya at 209-740-1447 or by email at joemontoya@gotracy.com

Seems ever since we got into this mess, led mostly by the greed of everyone all focused this time on real estate, the government has been trying everything to help get us out.  I don’t think even the government realized the magnitude of what had been happening over the previous ten years. 

 I used to tell everyone it was the Tax Reconciliation Act of 1997 that was bringing us out of the oppressive effects of the Tax Reform Act of 1986.  Little did I know that this would lead to our demise in the real estate investment world as we knew it. 

Since none of the previous steps by the government to “fix” the mortgage melt down have had much success, let’s see what this new twist will do to help what has turned into an avalanche of “strategic foreclosures”, whereby homeowners in otherwise good standing and with no delinquencies have looked into the future and decided their underwater home was not to recover as previously assumed by most. 

HARP 2 refinance plan a boost to borrowers, banks
The Obama administration announced broad outlines of the revised Home Affordable Refinance Program on Oct. 24. Fannie Mae and Freddie Mac issued guidance last week that filled in most of the details.

Here is a recap according to a story in SF Gate

• HARP 2 greatly reduces or eliminates the risk-based fees Fannie and Freddie charge on many loans and virtually eliminates the chance that lenders will have to pay for losses on loans that go into default if they made underwriting mistakes. It also vastly streamlines the underwriting process.
• Although lenders can begin taking applications Dec. 1, it could take several months before the new loans are made. Fannie Mae said it won’t begin buying certain types of refinanced loans until March.
• To qualify, the existing loan must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009. The loan balance must be more than 80 percent of the home’s market value. The loan must be current for the past six months, with no more than one late payment in the past 12 months. Those who previously refinanced through HARP are ineligible.
• The new program improves on the existing HARP refi program by letting borrowers refinance into a new fixed-rate loan regardless of how much is owed. The existing program caps the new loan at 125 percent of the home’s market value.
• Homeowners also can refinance into a new adjustable rate loan that has a fixed rate for at least the first five years, but in this case the new first mortgage cannot exceed 105 percent of the home’s value.
• In most cases, borrowers won’t have to pay for a new appraisal (Fannie or Freddie will use their automated in-house appraisals) or have any particular debt-to-income ratio or credit score.
   
• Borrowers who refinance through their existing loan servicer generally won’t have to document their income or assets or have a particular credit score or debt-to-income ratio. The lender will only have to verify that one borrower on the loan has a job or other source of income, but not the amount of income.
   
• Homeowners who refinance through a new lender will have to meet additional underwriting requirements, but not as many as people who are refinancing through traditional routes.
• Borrowers can have a second loan on the house of any amount and still qualify, as long as the holder of the second mortgage re-subordinates it to the new loan. Most of the big lenders have agreed to do so, but there is no guarantee they or others will.  If borrowers have mortgage insurance on the existing loan, they must maintain it, but they should be able to transfer that insurance to the new loan at the old premium rate, according to Freddie Mac. The big mortgage insurers have agreed to allow this, but again there is no guarantee all will.
• There are still many questions about the program, such as what interest rates banks will charge, whether they will impose additional fees or underwriting requirements beyond what Fannie and Freddie require, and whether investors will be willing to buy securities backed by these new HARP 2 loans.

For more information on purchasing or selling a home, contact Joe Montoya at 209-740-1447 or by email at joemontoya@gotracy.com

Everyday I get asked, “When are foreclosures going to stop flooding the market and when will our real estate market get back to normal?”  Well, I don’t really think we are going to ever see “normal” again, if you define normal as the value of your home moving upwardly every month in gigantic steps; however, I do think the downward pressure on prices will level off, and then go back up to at least replacement costs as soon as enough government intervention is asserted. 

While I seldom agree with government intervention into the workings of free markets, there is a big difference here when it directly affects the cost of buying shelter for your family.  Obviously, government intervention got us into this mess, so why not get us out of it.  I found this article in the San Diego Union-Tribune written by Lily Leung.   It describes new programs in more detail. 

 Mortgage aid open to more Calif. borrowers
The state-run program, “Keep Your Home California,” which helps homeowners struggling to pay their mortgages now has broader eligibility guidelines.  Borrowers who did “cash-out” refinances and own multiple properties now are eligible for the program, according to California Housing Finance Agency officials.

Making sense of the story

•To date, Keep Your Home California has helped approximately 8,000 low- and moderate-income households that are behind on loan payments or close to default.
•There are four parts to the program: Mortgage help for the unemployed, mortgage aid for homeowners with documented financial hardship, relocation help for those in the midst of a short sale or deed-in-lieu of foreclosure, and reduction of principal.
•Homeowners who completed “cash-out” mortgage refinancing now are allowed to take part in the four programs outlined above, and borrowers who own more than one property also can apply for the program.  Previously, these two groups of borrowers were excluded from participation.
•Mortgage aid to unemployed borrowers also has been extended to nine months, instead of six.  Such homeowners can receive up to $3,000 a month.  To qualify, borrowers must be receiving unemployment benefits.
•Additionally, the program has reinstated up to $20,000 in past-due mortgage payments instead of the previous $15,000 cap.
•To review qualification guidelines, visit www.KeepYourHomeCalifornia.org or www.ConservaTuCasaCalifornia.org.
 Click a link below for more information

•More loan servicers added to $2B mortgage-aid program
•Distressed BofA borrowers in Calif. now have chance of principal reduction
•Obama reforms to help out-of-work homeowners
•$2 billion in aid open to struggling homeowners
 A state-run program that helps homeowners struggling to pay their mortgages now has broader eligibility guidelines, opening up help to borrowers who did “cash-out” refinances and own multiple properties, said California Housing Finance Agency officials on Monday.

The mortgage-aid effort, called Keep Your Home California, so far has helped close to 8,000 low- and moderate-income households that are behind on loan payments or close to default, according to agency leaders.

“This expanded eligibility will allow more families to qualify and receive greater assistance,” said California Housing Finance Agency Executive Director Claudia Cappio, in a statement. “We are continuously evaluating our experience so far and making adjustments like these based on the initial results of the Keep Your Home California program.”

Keep Your Home California has four parts that include: mortgage help for the unemployed, mortgage aid for homeowners with documented financial hardship, relocation help for those in the midst of a short sale or deed-in-lieu of foreclosure, and reduction of principal.   The program, paid for by the U.S. Treasury Department’s Hardest Hit Fund, is costing taxpayers $2 billion.

Monday’s announced changes include:

–Allowing homeowners who completed “cash-out” mortgage refinancing to take part in the four programs. Such borrowers were excluded before.

–Allowing borrowers who own more than one property to apply. Program officials said this will be particularly helpful to those who co-signed on properties for family members.

–Offering mortgage aid to unemployed borrowers for nine months, instead of six. Such homeowners can get up to $3,000 a month. To qualify, you must receive unemployment benefits.

–Reinstating up to $20,000 in past-due mortgage payments instead of the previous $15,000 cap.

To qualify, your mortgage servicer must take part in Keep Your Home California. Click here for the list of servicers.

Info: Call 888-954-KEEP(5337) between 7 a.m. and 7 p.m. Monday through Friday, and 9 a.m. to 3 p.m. on Saturdays. Visit: www.KeepYourHomeCalifornia.org or www.ConservaTuCasaCalifornia.org.

For more information contact Joe Montoya at 209-740-1447 or by email at joemontoya@gotracy.com