Say good bye to your HELOC money

Posted on May 25, 2008 by Ginger Wilcox

Have a home equity line of credit you were planning on taking money out of for an upcoming remodel, home purchase, or other need?  It may not be there when you need it! 

Sofia Nadjibi, Mortgage Broker at Union Trust Mortgage in Marin County gave me some words of wisdom to pass on to my clients:

If you consider your HELOC your “emergency account,” you should consider drawing some of that money out TODAY and putting it in a good interest-bearing account like ING Direct or a Money Market account. This is especially true if you don’t have at least 3-6 months of liquid savings already.
If you were planning to use your HELOC to purchase a real estate investment, or for remodeling, etc – same advice as above – draw it out and put it somewhere safe. You can always put it back later if you don’t need it- but very soon you may not be able to access this money at all.

What’s happening?  Chase Home Equity announced that they are exiting the lending market.  Other lenders (such as Citi, Washington Mutual, National City and Wells Fargo) are expected to freeze existing home equity lines of credit balances, meaning no more cash out.

Need a HELOC?   Local Marin County banks are expected to still offer home equity lines of credit- think Bank of Marin, Tamalpais Bank and others, but of course if you really need that HELOC money, I wouldn’t “bank” on it!

Roadblock to home ownership

Posted on May 10, 2008 by Ginger Wilcox

  MarinHomeStarting to think about buying a house in beautiful Marin?  You probably start your search on the internet.  You start looking at what homes are selling for, doing your initial research to see what you can afford, you might even call a realtor.

You aren’t really ready to look seriously for a home, just doing a little initial research and then you see it- your perfect dream home.   It is “the one” and you HAVE to have it.  You call your favorite Marin county realtor and say Ginger, “I want to put an offer on that home.”

“Great Joe,” I say, “did you call the mortgage broker I referred you to and get pre-approved?” 

……

……

“Joe, are you there?” roadblock

A year ago, you could almost get an approval in a hour or so.  It wasn’t a good one, but nobody really cared.  Right now, pre-approvals are taking about two weeks for Marin home buyers.  Why so long?  Well, there are a lot fewer places where you can go to get a jumbo loan in California, and even fewer lenders with reasonable rates. 

What we have here is called a roadblock.   

Fewer lenders available = a serious back log of buyers all going down the same single lane.  The road isn’t closed, but traffic is pretty slow.  The mortgage brokers I work with say it takes about two weeks for a pre-approval and suggest 60 days for a close of escrow. 

I have a secret for you.  (There is a way around the roadblock!)  Listen close…

Get pre-approved BEFORE you find your perfect Marin County dream home!

Fed Cuts Rates 0.75, Bear Stearns Collapses

Posted on March 18, 2008 by Ginger Wilcox

Can you say volatility with a capital V? The Federal Reserve cut rates today by 3/4 of a percent in an effort to aid the U.S. economy. This is no surprise in the wake of the Bear Stearns financial crisis, coupled with everything everything else going on in the market. The Fed has cut the benchmark lending rate by 2 percentage points just this year, the most significant cuts in nearly three decades! Sofia Nadjibi, mortgage broker at Union Trust in Greenbrae had this to say in an email today about the rate cut:

History shows us that in the wake of a Fed cut, Bond pricing may initially pop a bit higher in response, but generally very quickly reverses direction and gets worse. Fed cuts fuel inflation, because the lower rates just serve to make it more attractive to buy and finance goods and services…and remember, inflation is BAD for Long-Term Interest Rates, so we will likely see higher interest rates in the next few weeks.

Strap your seatbelt on and hold on tight. We are in tough times and they are going to continue for a while. This is a great opportunity for aggressive buyers to take advantage of the current economic climate and to negotiate hard. There are some amazing opportunities in the marketplace and in general, buyers are in the driver’s seat.

Conforming loan limits approved

Posted on February 8, 2008 by Ginger Wilcox

Both houses in the Congress have approved the economic bill which includes an increase in the conforming loan limit. The bill is set to go to President Bush, and is expected to be signed by Feb 15. The bill includes a one-year increase in the conforming loan limit to $625,000 nationwide and up to $729,000 in high-cost areas such as San Francisco and Marin County for loans that government-sponsored enterprises Fannie Mae and Freddie Mac can purchase.

What this means to Marin County buyers and homeowners:

If President Bush signs the bill, buyers in the lower end of the Marin market or buyers making large down payments will have more buying power. Currently, the interest rates on jumbo loans are more than a percent higher than conforming loans. We are also likely to see a slew of refinances, which could reduce the mortgage payments of many Marin residents with loan balances currently between $417,000 and $729,000.

The increased loan limit could also provide a confidence boost for struggling areas such as Novato and parts of San Rafael, where borrowers and buyers are more likely to be positively impacted by the increase.

Fed Drops Rates Again by 0.5%

Posted on January 31, 2008 by Ginger Wilcox

The Fed dropped rates another half percent yesterday.  “Today’s policy action, combined with those taken earlier, should help to promote moderate growth over time and to mitigate the risks to economic activity,” the Federal Open Market Committee said in a statement Wednesday.

Does this mean home mortgage rates will drop?  NOPE!  As I have explained before, The fed rate cuts do not directly impact mortgage interest rates, but it does impact homeowners with equity lines of credit (HELOC), people who carry credit card balances and other short term loans.  Sometimes these rate drops actually cause home mortgage rates to increase slightly.

The Fed is hoping consumers will spend money on their credit cars, or use their HELOCs, which pumps money into our economy.

What’s next?  Waiting to see…

Congress Stimulus Package Offers Financial Incentive to Marin Homeowners

Posted on January 26, 2008 by Ginger Wilcox

The economic stimulus package being discussed by Congress and the President may have a huge benefit to Marin home buyers and current Marin homeowners. In addition to tax rebates, another element of the package offers to increase the limit on Federal Housing Administration (FHA) loans and loans that Fannie Mae and Freddie Mac can buy. The new FHA and Fannie Mae/Freddie Mac loan limits would be increased to $729,750 under the current proposal.

Continue reading →

Mortgage Rate Ping Pong

Posted on January 24, 2008 by Ginger Wilcox

Mortgage Rate Ping PongMortgage rates dropped on Tuesday, and went right back up, higher yesterday than when they started Tuesday morning. Some lenders had 3-4 interest rate changes yesterday – during the same day! Conforming rates were up 3/8 of a percent. Some lenders stopped locking in rates because of the fluctuations.

Expect to see more volatility with rates…

Fed Cuts Rates 0.75%, Mortgage Rates Going Down, Down??

Posted on January 23, 2008 by Ginger Wilcox

Marin Real Estate- Magic 8 BallYesterday the Fed made a drastic move and cut the Federal fund rate by 0.75%. With this rate many people expected rates for home loans to drop substantially. Not the case… The fed rate cuts do not directly impact mortgage interest rates, but it does impact homeowners with equity lines of credit, people who carry credit card balances and other short term loans.

While not directly tied to the fed rate cut, mortgage rates did drop yesterday. Jumbo rates decreased 0.125% and conforming rates (loan amount under 417K) decreased 0.25%.

Continue reading →

Fed Rate Cut- What it means to YOU

Posted on September 21, 2007 by Ginger Wilcox

PercentangesAs expected, the Fed lowered the Federal fund rate on Tuesday. It also cut the discount rate by 50 basis points – this was not expected. This move shot a healthy dose of confidence in Wall Street causing stock prices to soar. So what does it mean to the mortgage market?

On the longer-term mortgages, the answer is likely to be “not much.” The Federal Reserve announced on Tuesday that it would cut the Federal funds rate from 5.25% to 4.75%. It also cut the discount rate, the rate that the Federal Reserve makes direct loans to banks, from 5.75% to 5.25%.

The rate cuts should translate into lower rates for short-term loans or adjustable loans such as home equity lines of credit, credit cards, business loans, and car loans. For individuals shopping for a 30-year fixed loan, the mortgage rate typically moves in-line with the interest rate on the 10-year U.S. Treasury note.

How does your credit score compare?

Posted on September 9, 2007 by Ginger Wilcox

Fico scoresEver wonder how your credit score compares to the rest of the U.S.?  Seattle Real Estate expert Ardell DellaLoggia has some great information about Average Credit Scores in the United States. She has nationwide charts as well as scores broken down by age group.

Interestingly enough, credit scores go up as people age.

Check it out to see how you compare!