FHA 203K Home Loan

FHA 203K Home Loan Folsom & Sacramento, CA

The FHA rehab loan program, otherwise known as the 203(K), has been requested more and more by our clients, so I think it’s a good time to talk about it here. The 203(K) is broken into two programs, the Streamline and the Full. This loan program can work with FHA or Conventional home loans. The streamline permits work up to approximately $35,000 including the contingency holdback, and the Full permits more extensive work over $35,000. One thing to note is that this programs is not for any work the FHA deems as a luxury item, such as a pool.

203(K) Streamline Loan

Let’s just talk about the 203(K) Streamline. The Streamline permits homebuyers and homeowners to finance up to $35,000 into their mortgage to repair, improve, or upgrade the home they want to purchase or refinance. The Full 203(K) can go much higher than the streamline. Now, this includes work such as a roof, carpet, kitchen, bathroom, paint, downspouts etc. It’s a pretty extensive list of repairs and upgrades, and you can really improve the value of the home. The actual loan amount is based on the projected value of the home with the repairs and upgrades. Which may mean you walk in with more equity than if you bought a move in ready home. This program may not be used to do major structural work such as adding a room, moving a load-bearing wall or for projects that that will take over 6 months to complete.

203(K) For Homeowners

Are you not sure if you should Move or Improve? If you own a home that needs updating or repairs, you may be able to use a 203(K) Refinance to either make property repairs and improvements, or prepare your home for sale. It’s a great way to make your home move-in ready by remodeling the kitchen, painting the interior or purchasing new carpet. Plus, you have a better chance of getting top dollar for your home when you go to sell, as well as, potentially, a quicker sale when its move in ready! This type of loan product can also help you increase your equity faster. You won’t know unless you check it out.

203(K) History

The mortgage must be a first lien on a one-to-four unit owner-occupied dwelling. Over the years, lenders have successfully used the FHA 203(K) loan program in partnership with state and local housing agencies and nonprofit organizations to rehabilitate properties. This program was critical to municipalities that needed to revitalize neighborhoods and reclaim them as desirable areas to live. This revitalization is also good for the homeowners in the area, that felt helpless as their neighborhoods fell into disrepair, taking their home values down with them.

Everything Good Takes Time

As a loan product, it takes a little extra time and work for all, but this program can be very useful for homebuyers that are interested in a property that needs a little TLC. Buying a property that needs work means you may often get it at a lower price so you aren’t paying for someone else to do the renovations. As a result…instant equity!

The Real Truth About Rent vs Buy

The Real Truth About Rent vs Buying in Sacramento, CA

In the United States, there is somewhere around $13.1 trillion in total value of the equity held by over 75 million U.S. homeowners, according to the latest estimates from the Federal Reserve Board. And that works out to almost $175,000 per owning household. This is undeniable proof that homeownership is a crucial part of household wealth. In large part, because purchasers were able to put a good chunk of money down on a house, and to qualify for a mortgage. Paying for a mortgage actually helps produce more wealth, by freezing payment amounts and building equity through forced savings over the life of the loan.

A Mortgage is a Beautiful Thing

Having an option for a 30-year amortized, fixed-rate mortgage is a beautiful thing, providing an affordable route to purchasing a home while locking in today’s cost of that home for the life of the loan. The traditional rent versus buy argument compares the total monthly costs of buying a home with a mortgage with the corresponding rent. Although, that doesn’t take into account the equity that is built over time with a 15-year or 30-year Fixed Rate Mortgage. That simplistic  look at the dollar for dollar expenditure on a monthly basis, hides the fact that a mortgage is unlike a rent check. It’s really comparing apples and oranges, as they say!

A percentage of every monthly mortgage payment, after the interest is paid, goes toward the owner’s home equity. And over time, less of the mortgage payments go toward interest and more go toward equity, so the savings power is enhanced over the life of the loan. Whereas, if you continued to pay rent over the same 30 years, you end up with no asset and no equity at the end.  Even if the house only keeps pace with inflation over 30 years, which is a very conservative assumption, the forced savings built into a mortgage guarantees a homeowner is building wealth.

Building Equity in Your Sacramento Home

So it’s not just about the equalization of the monthly outlay of funds, it’s also the tax benefits, the principal paydown, and building equity. Just owning a home in the right neighborhood, that increases in value can build equity. Next, it’s what you can do with that equity… the smartest uses of equity are to put money back into your asset, your home, by keeping it maintained and upgraded, or to keep your debt at a low interest rate such as using it to pay for a kid’s college.

Now, that is the real truth about the power of homeownership over renting.

The Sacramento area, including Placer County, El Dorado County, and Yolo County is number 4 in the top Hottest Housing Markets in the nation, so now is a great time to buy or sell. So, check out the Home Buying University on the Resource Page to help you get started building wealth! Have a great week.

Clean Hard Water Spots

Clean Hard Water Spots from Dishes

For many reasons, you should remove hard water stains from glasses and dishes. Not only the dirty appearance it gives, but it can affect the health of your family.

What are Hard Water Spots?

Hard water is water with a high amount of mineral deposits like lime, silica, and calcium. When the water dries, the deposits are left behind, leaving unsightly spots on glass or ceramic surfaces, particularly in bathrooms and kitchens. Depending on the type minerals left behind, they can be harmful to your health as well as ugly! So, keeping these spots off your glassware and dishes can be important for your family’s’ health, too. We are lucky in the Folsom, CA area, where our water comes from Folsom Lake. Roseville, Granite Bay and other Sacramento area communities get water from Folsom Lake as well. Our water is considered “moderately soft” with very little mineral deposits.

Water Quality by Community

If you want to know where your water comes from and the quality of your drinking water, you can find out through your local governmental agencies. Here are a few of the local municipalities that manage the local water supplies:

Hard Water Spots Are Embarrassingly Ugly

Yes, those unsightly spots can be embarrassing when you are serving your guests a great wine in a glass with spots… or that beautiful table setting is marred with stains on your beautiful plates. Plus, they can be difficult to remove no matter how many times you wash your dishes. So, I came across a method for removing hard water from your dishes. For this method, you will need:

  • Distilled white vinegar
  • Cold water
  • Paper towels

Here’s How to Remove the Spots

First, be sure to buy a one-gallon jug of distilled vinegar to ensure that you have enough. Next, soak the dishes in a sink with half vinegar and half cold water between 3 and 4 hours. Take the dishes out one at a time, being sure to dunk them several more times in the sink before putting them in a drying rack. Use paper towels to wipe them all dry. You should repeat this every few months to make sure you keep removing hard water stains on your dishes. This will keep them extra-clean and sparkling.

Well, that’s my tip for this week! If you want to know today’s mortgage rates, or have questions, please give me a call! I’d be glad to help. Thanks for joining me. Have a great day.

How to Pick a Mortgage Professional in Sacramento

How to Pick a Mortgage Professional

How to Pick a Mortgage Professional in Folsom, El Dorado Hills and Greater Sacramento

As you know, buying a home can be exciting and hopeful but it can also be emotional. The Mortgage Professional or Loan Officer you select to start the process can be critical. It’s advisable to team up with a Loan Officer in the very beginning, that is local to the greater Sacramento area, whether it is Folsom, Roseville, El Dorado Hills, and so on.

Getting Pre-Approved on a Home Loan in Greater Sacramento

Now, you have the advantage of getting preapproved and knowing just what you can afford. Sometimes, you may have to spend a little time getting your finances in order before you can be pre-approved, and a good Loan Officer can direct you on where to go or what your options are upfront.

Start Shopping for a Home Loan Expert in Sacramento

So, let’s say you are all set, you got preapproved and you know how much you can afford to spend. Great! Now, you can start shopping. You find the home of your dreams and are so excited to make that offer! How does your preapproval help in your home buying experience? Well, honestly, most real estate agents won’t spend a lot of time showing you homes until you are preapproved.

From the Realtor’s perspective, it can waste everyone’s time if you can’t qualify for a loan, or if they are showing you homes you find out later, you can’t afford. It’s also a huge benefit when you finally find that dream home and you go to make an offer.

Your Loan Officer will usually supply you with a preapproval letter for the amount of the offer you intend to make. This shows the seller you should qualify for the loan as long as nothing has changed financially for you. In today’s market, where sellers may be looking at multiple offers, having a strong preapproval can go a long way. A good Loan Officer may also call the listing agent and give them input as to how strong of a borrower you are. Now, you should have a very competitive advantage over other offers.

Now let’s talk about what to look for in a Loan Officer.

First, you want someone you feel like you can trust. Buying a home is a life-changing experience. Next, look for how they communicate…

  • Do you click with them?
  • Do they understand your needs?
  • Are they customer focused?
  • Are they knowledgeable about the Housing Market in your area?
  • Do they work alone or have a team?
  • Do they look for the loan scenario that fits your goals?
  • Do they have access to all of the loan products available?
  • Are they up to date on the guidelines?

Another question to ask yourself is, “If I need Down Payment Assistance, is this Loan Officer able to assist me through that process?”

Selecting a Loan Officer

Selecting a great Loan Officer isn’t like picking your BFF, its more about trust and competency, with a high sense of urgency to get the job done, right, and on time. Every Loan Officer isn’t right for every person. Here at Iron Point Mortgage, in Folsom CA, we have Loan Officers that work with a highly skilled team to get the job done, throughout the Sacramento area. One of them should be the right one for you! Remember, I’m here to help, so give us a call.  Get started right and have a great home buying experience.

HUD Announcement Reduction in Mortgage Insurance

NEWS ALERT: HUD ANNOUNCEMENT REDUCTION IN MORTGAGE INSURANCE

This is great news coming out of Washington! As the nation’s housing market continues to improve, U.S. Housing and Urban Development Secretary Julián Castro, announced the FHA will reduce the annual premiums new borrowers will pay by half of a percent.  It is projected to save about 2 Million FHA homeowners an average of $900 annually and incite 250,000 new homebuyers to purchase their first home over the next three years.

In the aftermath of the nation’s housing crisis in 2008, the FHA had increased its premium prices in order to stabilize the health of its MI Fund.  Today’s reduction will significantly expand access to mortgage credit for these families and is expected to lower the cost of housing for the approximately 800,000 households who use FHA annually.

FHA’s new annual premium prices are expected to take effect towards the end of the month. FHA will publish a letter detailing its new pricing structure in the days to come.

With mortgage rates increasing slightly, this should help the FHA Home Loan borrower with their monthly payments. The rates are still hovering at half of the average mortgage rate of 8+% over the last 40 years. So, with that perspective, borrowing money to purchase a home continues to be affordable.

If you have any questions regarding this announcement, please feel free to call us. Thanks for watching, and have a great day.

6 Out of Top 10 Hottest Real Estate Markets are in the West

6 Out of Top 10 Hottest Real Estate Markets are in the West – Sacramento is #4!

Top 10 Metro Housing Markets

According to Realtor.com, who predicted a minor slowdown for the U.S. real estate market next year, most of the hottest metro markets are going to keep blazing in 2017. And where do they predict the heat to come from? Well, six out of the top ten hottest markets, are in the west! The western U.S. will continue to lead in prices and sales.

The top 10 in order are:

  1. Phoenix AZ
  2. Los Angeles CA
  3. Boston MA
  4. Sacramento CA
  5. Riverside / Ontario CA
  6. Jacksonville FL
  7. Orlando FL
  8. Raleigh NC
  9. Tucson AZ
  10. Portland OR

These top 10 markets have specific conditions in common

They all benefit from relatively affordable rental prices, low unemployment, and large populations of millennials and baby boomers. They are forecasted to see average price gains of 5.8% and sales growth of 6.3%, exceeding this year’s anticipated national growth of 3.9% and 1.9%, respectively. And while the limited availability of homes for sale continues to be a problem for home buyers, but an advantage to sellers, these markets are seeing growth in new construction that eases the supply shortage somewhat.

Here is the Sacramento valley, we have several areas experiencing high growth. The South 50 corridor from El Dorado Hills west, will start having homes on the market later this year. Rancho Cordova is growing in the Anatolia area and beyond. Elk Grove continues to expand south. Realtor.com actually expanded their list and western cities account for 11 of the top 25 metro markets on our list, including five in California. Again, this is just another source projecting our area to be a hot housing market this year. If you are considering buying or selling to move up, or even downsizing, get started today.

Give us a call, we can help. Thanks for reading my blog and I hope to hear from you soon.

How to Have the Greatest Year Ever

How to Have the Greatest Year Ever

I believe you can make next year your best year ever. Life doesn’t have to be hard, and you don’t have to be bored. It really comes down to being intentional. If you mean what you say and are motivated to get what you want, taking action with the intentions of meeting your goals will be second nature. Once you get the steps down, you won’t even have to think about it! Although, it does take some time to keep your goals in mind in everything you do. That is being intentional!

Well, after researching and reading articles, I came up with a list of 5 steps that can get you there. I have to say, I was very impressed with some of the blogs I read on this topic. So, follow these steps to create your best year ever:

  1. Reflect on last year. Ask yourself what worked and what didn’t. What events or activities did you really like, or dislike. Actually, take time to review your calendar so you don’t miss something important.
  2. Write down the major big visions you see for your life. Go up to the 40,000 foot level and make a list, like have a family, be financially independent, retire by you are 55, etc…
  3. Now set goals. What are your goals for this year, next 3 years, 5 years etc…
  4. Find your why. Why do you want what you want? Ask yourself the questions over and over, until you get down to the real reason.
  5. Set up systems to implement your plans. Calendar milestones you need to meet in order to complete your goals. If you are more visual, get an old school calendar and put it on the wall where you can check it every day.

Like this year, at the end of next year, review what you’ve done during the previous year and start the process over.

You can do this every year and make your next year your best yet. It’s all about living intentionally and to do that, you need to follow these steps.

The more I read, the more I understood how important these steps are, and I realized how they relate to real estate. Real Estate in Sacramento, Folsom, Roseville, Elk Grove, and the El Dorado County areas can be a great way to build wealth throughout your life time. If buying a home or becoming a real estate investor is something you wish to do, set your goals and be intentional. Well that’s my tip, and I hope it helps you have the best year ever. Give me a call if I can help with a preapproval or refinance. Have a great day.

History of Mortgage Rates

The History of Mortgage Rates (1981 – 2016)

You may be inundated with lenders tooting their horns about the near record low mortgage rates we experienced all of 2016. You hear it so often that you’ve tuned out. Well, it’s hard to appreciate where we are today if we don’t look at the past.

So let’s take a quick look:

Mortgage_Rate_History

  • In July 2016 – rates hit the lowest since 2012 = 3.44% with a cost of ½% and in August went even lower to 3.36%.
  • Today – average rates are about 4.02%
  • In December 2012 – The lowest since FNMA has kept records, rates were 3.35%
  • 10 Years Ago, in 2006 – we had a 6.41% annual average rate
  • At the turn of the Century, 2000 – 8.05% was the annual average
  • 20 Years Ago, in 1996 – it was 7.81%
  • 30 Years Ago, 1986 – it was 10.19%
  • The All-Time High was in October 1981 – at 18.45% with 2.3 points. That was the month that President Reagan was shot, Pope John Paul was shot, and the stock market reacted.

So, to put this in perspective, if you bought a house in October 1981 at $200,000 with 20% Down, your payment would be $2,471.17 plus taxes & insurance. If you bought a $500,000 house with today’s rates, your payment would be about $1,824.21 plus taxes and insurance. The mortgage interest rates play a huge role in affordability, balancing out today’s home values. My point is that looking back into history may be the dose we need to really appreciate where we are today and help you understand why lenders keep shouting from the rooftops.

As we go into the next year, the bond market is uncertain, so rates may continue to climb modestly, per many of the industry analysts. Regardless, rates historically are still very affordable and now is a time to lock it in. Whether you are buying your first home, moving up into that forever home, downsizing into a luxury home, or refinancing your existing home, don’t procrastinate or hedge the market.

FHA Home Loan and VA Home Loan

For many first-time homebuyers, there are low down payment options such as the FHA Home Loan and VA Home Loan. There are also down payment assistant programs like the Sapphire Grant Program, CalHFA Plus with Zip, and several others. There are even programs that help pay for part or all your closing costs like the one for teachers called the CalHFA Extra Credit Teachers Program.

If you’d like more information on any of these programs, for today’s mortgage rate, or to get preapproved, give us a call today to get started. We get it. We love to help you meet your homeownership goals.

Before Buying a Home in Sacramento

8 Things to Do Before Buying a Home in Sacramento

Buying a home is an intense process, especially so for first-timers. In some areas of Sacramento County there is competition for homes on the market. They can get snatched up quickly, so being prepared is prudent. In the El Dorado County areas, homes tend to take a little longer to sell, again, depending on the area. Being prepared in any market environment is a great strategy. The fall and winter Real Estate Market can be a great time to buy or sell. So, I’ve compiled a list of 8 things to do before buying a home.

  1. Make a List of What You Want – What are your “must haves” in a home, now and for the future? A wish list will get it straight in your mind, but also help an agent find homes best suited to your needs. Plus, it forces you to plan for your family’s future needs as well.
  2. Get Your Documents Together – Here are a few of the documents you will need to provide your Lender:
  • Check stubs
  • W2’s for the last two years and tax returns.
  • Bank statements, usually about two months’ worth.
  • And more…

If you are planning to buy a home and don’t know where these are, I suggest you locate them immediately. Then put them where you can access them quickly.

  1. Maximize Your Credit Score – Your credit score will weigh heavily on your ability to get a loan and get the best rates. Check it and make sure you have done everything possible to get it as high as you can. You can opt to have a credit company such as Blue Water Credit in Roseville, CA, take a look to see if there are ways to improve your score quickly.
  2. Get Your Mortgage Preapproval – A preapproval will let you know how much home you can afford. Depending upon your finances and credit score, you may also qualify for an FHA loan at 3.5% or Down Payment Assistance programs. In high demand markets, such as the Folsom Real Estate market, it will give you a strong advantage to have a preapproval when you make an offer.
  3. Do Neighborhood Research – Before you make an appointment to start seeing homes, make sure you research the neighborhoods you are interested in. Park in the neighborhood and just listen at different times of the day. And perhaps on different days as well! You may not hear that freeway noise on a Saturday afternoon, but at 5pm on a Tuesday, it is noticeable.
  4. Budget for Not-So-Hidden Fees – Ask your lender what fees and expenses you will encounter during the process, such as paying for an appraisal, home inspection, etc… and budget for those expenses.
  5. Stay Organized – You will need to have quick access to your documents and files. The quicker you respond to your Lender requests, the quicker you can be in your home.
  6. Hire a Realtor – Your lender may have agents they can refer, but make sure you really take some time in finding the right realtor that will represent you and understand your needs.

I hope these tips will help ease the process for your home buying experience. Buying a home doesn’t have to be stressful. It should be so, so worth it. Stay organized. Stay calm. If things don’t go your way, just remember why you wanted to buy a home in the first place. We get it. Give us a call, we can help. Thanks for joining me this week. Have a great day.

Donald Trump Presidency and the Housing Market?

What Does a Trump Presidency Mean to the Housing Market?

Well, we, the people have spoken and Donald J. Trump was elected as the 45th president of the United States

Change was demanded from the rural areas and that is what we will have. It was unexpected by even his campaign team! But it was a bit of a shock for many, especially on the West Coast. In our area, we have not actually experienced much in the way of job losses in US manufacturing. Nor have we had a lack of wage growth. So, what all does this mean for the housing market? Should you hurry up to buy before interest rates start rising? Or wait to see if the home values decline, if they do? What should we do?

First, we should all take a deep breath

The US equity markets are starting to calm down as the meaning of a Trump presidency unfolds. As for what this means to the housing market, it’s too early to make any predictions. But, Trump ran on a platform of deregulation, which could be good for real estate. Banks may have the freedom to offer more loan products, which in turn, could further energize the market as more buyers may qualify for home loans. As for the interest rates… well, the concerns over rising interest rates may be overstated, but we are already seeing them rise. Watching the bond market closely will be prudent. Although, the experts are still hopeful that the increases will cap at less than 5% by the end of 2017.

Trump proposed more infrastructure spending, which if it comes to light, this could boost employment and wages

Another positive for the housing markets. The proposed easing of land use regulations, may begin addressing the problem of housing affordability, which is a huge issue in California housing markets. The new construction industry is reporting only 40% staffed with tradesmen. When the recession hit, many of those workers went on to new careers, leaving a huge gap in available skilled workers. This new construction is critical to the Sacramento Real Estate Market, to relieve the low inventory issues and support a normal home value increase.

In the near-term we may see some temporary upheaval, including in the housing market, as the Trump presidency takes shape

But, for right now, there isn’t any need for panic in the housing sector. The Sacramento Housing Market should continue to be in good shape for the near future. FHA Home Loans are continuing to provide low down payment options, as are the VA Home Loans.