To view homes or property for sale visit our Bellingham Real Estate Search Page. For more details, or a custom home loan quote, contact Sidney Stonecypher at People’s Bank, 360-676-4597 or sidney.stonecypher@peoplesbank-wa.com. Remember that many variables come into play in determining the rate a lender will give a borrower. If you are getting a rate quote from a lender who does not have all your information, that rate may not be real. What with the low rates, it is still a great time to buy a house!

For more information on Bellingham Real Estate or to search for homes in the Bellingham and Whatcom County area visit www.JohnsonTeamRealEstate.com, your one stop Bellingham real estate and community information resource!

It’s that time again, time to update you on the latest in home loan and mortagage rates. If you are in the market for a home loan below are the mortgage rates as of today January 25th 2011, courtesy of Sidney Stonecypher at People’s Bank.

To view homes or property for sale visit our Bellingham Real Estate Search Page. For more details, or a custom home loan quote, contact Sidney Stonecypher at People’s Bank, 360-676-4597 or sidney.stonecypher@peoplesbank-wa.com. Remember that many variables come into play in determining the rate a lender will give a borrower. If you are getting a rate quote from a lender who does not have all your information, that rate may not be real. What with the low rates, it is still a great time to buy a house!

For more information on Bellingham Real Estate or to search for homes in the Bellingham and Whatcom County area visit www.JohnsonTeamRealEstate.com, your one stop Bellingham real estate and community information resource!

Bellingham Real Estate Home Loan Rates

It’s that time again, time to update you on the latest in home loan and mortagage rates. If you are in the market for a home loan below are the mortgage rates as of today January 18th 2011, courtesy of Sidney Stonecypher at People’s Bank.

To view homes or property for sale visit our Bellingham Real Estate Search Page. For more details, or a custom home loan quote, contact Sidney Stonecypher at People’s Bank, 360-676-4597 or sidney.stonecypher@peoplesbank-wa.com. Remember that many variables come into play in determining the rate a lender will give a borrower. If you are getting a rate quote from a lender who does not have all your information, that rate may not be real. What with the low rates, it is still a great time to buy a house!

For more information on Bellingham Real Estate or to search for homes in the Bellingham and Whatcom County area visit www.JohnsonTeamRealEstate.com, your one stop Bellingham real estate and community information resource!

Bellingham Real Estate Home Loan Rates

It’s that time again, time to update you on the latest in home loan and mortagage rates. If you are in the market for a home loan below are the mortgage rates as of today January 11th 2011, courtesy of Sidney Stonecypher at People’s Bank.

To view homes or property for sale visit our Bellingham Real Estate Search Page. For more details, or a custom home loan quote, contact Sidney Stonecypher at People’s Bank, 360-676-4597 or sidney.stonecypher@peoplesbank-wa.com. Remember that many variables come into play in determining the rate a lender will give a borrower. If you are getting a rate quote from a lender who does not have all your information, that rate may not be real. What with the low rates, it is still a great time to buy a house!

For more information on Bellingham Real Estate or to search for homes in the Bellingham and Whatcom County area visit www.JohnsonTeamRealEstate.com, your one stop Bellingham real estate and community information resource!

Bellingham Real Estate Home Loan Rates

It’s that time again, time to update you on the latest in home loan and mortagage rates. If you are in the market for a home loan below are the mortgage rates as of today January 4th 2011, courtesy of Sidney Stonecypher at People’s Bank.

To view homes or property for sale visit our Bellingham Real Estate Search Page. For more details, or a custom home loan quote, contact Sidney Stonecypher at People’s Bank, 360-676-4597 or sidney.stonecypher@peoplesbank-wa.com. Remember that many variables come into play in determining the rate a lender will give a borrower. If you are getting a rate quote from a lender who does not have all your information, that rate may not be real. What with the low rates, it is still a great time to buy a house!

For more information on Bellingham Real Estate or to search for homes in the Bellingham and Whatcom County area visit www.JohnsonTeamRealEstate.com, your one stop Bellingham real estate and community information resource!

Question:

We are shopping for our first home and it looks like we could cut our mortgage payment quite a bit if we took out an adjustable rate mortgage rather than a 30 year fixed rate loan.  What would you do?

 Answer:

What I would do may not be the best thing for you, because more than the rate is an issue in this decision.  We have used ARM’s extensively over the years and they were very good for us, but there were conditions in which we used fixed rate loans.  First, note that most ARMs now are actually a hybrid of the true ARM and a fixed rate loan.  The interest rate is fixed for the first years; 3/1 means the rate is fixed for the first 3 years.  At the end of that time, the rate may automatically adjust for the remainder of the loan, or you may need to refinance it.  Make sure you know what is going to happen at the end of that initial period.

When we are choosing a loan, we use the following questions to make the decision. 

What is the difference in the payment?  This morning the lowest rates I see in our area are 3.67% for a 30 year fixed and 2.62% for a 5/1 or 3/1 ARM.  Note: these are rates with 0 points – make sure you always compare rates with the same points.  At these rates, your principal and interest payment for a $250,000 loan would be $134 a month lower at the adjustable rate.

 What are all available adjustable rates?  As of this morning, the 3/1 and 5/1 rates are the same…lock in the lowest rate as long as you can.

 How long are you going to live in this house?  Always add a year or two…this may be determined not only by your wants, but also by the market, so give yourself some leeway.  Also, know what happens if you decide to move on and rent the house…you may not be able to adjust the loan at the end of the initial period.

 What happens at the end of the initial period?  Will you have to qualify for a new loan?  If the rate simply adjusts, how is the new rate determined?  Will there be additional loan fees?  What if the value of the home has fallen?  Costs to reset the loan could cut into your payment savings.

 What does the trend line for interest rates look like?  An upward trend line can mean you will be wishing for that earlier fixed rate when the adjustment time rolls around.  If rates are falling, you won’t feel as pressured to refinance (and pay the fees), if your existing rate is already low.

Is there a prepayment penalty?  If you need to change the loan (rates fall further, you want to lock in a long term fixed rate, you are changing jobs and don’t know if you will qualify at the end of the term, you want to keep the home as a rental and know you won’t be able to roll your existing loan when it adjusts) will you have to pay a lump sum for the right to pay off the loan?

As with all real estate questions, there is seldom a simple answer, but hopefully this will give you a guideline for making a decision.  Good luck!

For more information on Bellingham Real Estate or to search for homes in the Bellingham and Whatcom County area visit www.JohnsonTeamRealEstate.com, your one stop Bellingham real estate and community information resource!

Question:

When your house goes into foreclosure, do they inspect it and decide if it is a tear down or do they just sell it as is?

 Answer:

If it is a straight foreclosure:  homeowner doesn’t make payments, lender goes through the legal process and ends up with the house, what happens next looks something like this.

 Lender tries to determine value by having several real estate agents do BPOs (broker price opinions) or having an appraisal. 

Lender contacts a real estate agent to assess the condition of the property and make recommendations.  Usually this is an agent with whom they work regularly, so s/he knows how the lender prefers to approach a foreclosure.  Sometimes a professional inspection will be done.

 Lender determines how much more money they are willing to invest.  If the home is newer and can be cosmetically improved, they may do so.  If the home is in terrible condition, they may sell it as is.  If the home is liveable except for some minor issues, they may have those done.  At a minimum, they usually have the property cleaned up if needed.  

Different lenders have different procedures – there is no one size fits all answer.  In our area, I don’t believe I have ever seen a lender tear down a structure, but I understand this does happen elsewhere

For more information on Bellingham Real Estate or to search for homes in the Bellingham and Whatcom County area visit www.JohnsonTeamRealEstate.com, your one stop Bellingham real estate and community information resource!

Bellingham WA Home Loan Rates

It’s that time again, time to update you on the latest in home loan and mortagage rates. If you are in the market for a home loan below are the mortgage rates as of today December 21st, 2011, courtesy of Sidney Stonecypher at People’s Bank.

For more details, or a custom quote, contact Sidney Stonecypher at People’s Bank, 360-676-4597 or sidney.stonecypher@peoplesbank-wa.com. Remember that many variables come into play in determining the rate a lender will give a borrower. If you are getting a rate quote from a lender who does not have all your information, that rate may not be real. What with the low rates, it is still a great time to buy a house!

For more information on Bellingham Real Estate or to search for homes in the Bellingham and Whatcom County area visit www.JohnsonTeamRealEstate.com, your one stop Bellingham real estate and community information resource!

A Response to Comments on an Earlier Post

On October 27, 2008, I did a post regarding Bellingham real estate short sales, distressed properties & foreclosures.  In it, I defined these terms and others related to the process, and I also discussed the impacts on the Bellingham and Whatcom County real estate market.

Recently we received a comment on that post, raising some questions and making me realize we needed an update.  The discussion below consists of the comments and a response.

Comment: “ I am not sure this article answered the sentence preceding the link…’Bellingham and Whatcom County Real Estate is being increasingly affected by short sales and foreclosures…’  In what way is it being affected?”

Response:  The short answer is price.  Particularly when the market first started to see a number of short sales, they were often priced substantially below list prices for “normal” sales.  Some of these prices were “real” – that is, the home actually sold close to the listed price – but many were designed to create bidding and sold for considerably more than the list price. This is not seen as often now due to changes in MLS rules attempting to bring more credibility to pricing.  Whether the prices were real or not, they created a very strong impression that prices had dropped substantially.  Even if the list prices were

realistic, short sales and bank owned properties typically sold for less money than “normal” properties.  As more distressed properties entered the market, “normal” sellers realized they needed to compete, and all prices have drifted lower.  

            As of November 30, 2011, 13% of the homes for sale in Bellingham were distressed, 55.6% of the pending sales were distressed, and 25.4% of the sales in November 2011 were distressed.  It’s pretty obvious that buyers are looking for a good deal, and the “normal” sales have to compete.

Comment: “Real Estate prices are still too high in Whatcom.  More specifically, too high for this economy.  The cost of buying a home is out of balance with incomes, so either incomes need to rise or housing needs to fall.  I own a home and … what my home is “worth” greatly exceeds what I paid for it only a few years ago even after the bubble burst…”

Response:  Let’s begin by defining “worth or value”.  Unless a home has recently been sold, no one knows what it is “worth”, because that is determined by the price to which a ready, willing and able buyer and a ready, willing and able seller will agree.  A variety of methods are used to estimate value, but they do not establish it.  A current example from our practice:  a home was appraised at $235,000 in August.  The list price has gradually been reduced until it is now listed at $185,000.  The seller just accepted an offer of $175,000, and that could go down after the inspection is completed.  I can virtually guarantee that any home sold in 2005 or thereafter is worth less than the sale price at that time, unless very significant upgrades have been made.

            Affordability is a mixed bag.  According to the Washington Center for Real Estate Research at Washington State University, during the 2^nd quarter of 2011 (the most recent stats available), the Homeowner Affordability Index in Whatcom County was 128 (5^th lowest in the State of Washington).  The first-time buyer Homeowner Affordability Index was 63.7 (also the 5^th lowest in the State of Washington).  The higher the index number, the more affordable housing is relative to income.

Comment:  “Bank or mortgage companies are part of the problem.  They make statements that they can’t sell a house for less than XXX or refuse to sell a home at a loss…  Until banks “let go” and clear the market of these properties (by selling at reasonable prices even if at a loss to the bank to eager first time buyers) this market will continue to struggle.”

Response:  Lenders have been part of the problem, although not necessarily because they aren’t willing to take the losses.  Some of them, particularly the surviving very large lenders, still don’t have efficient systems in place to process these

properties…particularly the short sales…which leads to incredibly long waiting times for approval, properties being sold at foreclosure while they are in negotiation for a short sale, loan modifications being denied that could work for both parties, homeowners remaining in homes after skipping payments for months without notice of default, etc. 

            The flip side, however, is that in areas with massive numbers of properties in default, the delays have helped to feed homes into the market gradually rather than in one big batch.  This may have been a godsend to “normal” sellers by helping to keep prices somewhat more stable. 

            In the State of Washington, a new law took effect last July with requirements that may help distressed sellers negotiate more effectively and in a more timely manner with their lender.

An Observation:  It is worth repeating the numbers regarding distressed and “normal” sales from above: As of November 30, 2011, 13% of the homes for sale in Bellingham were distressed, 55.6% of the pending sales were distressed, and 25.4% of the sales in November 2011 were distressed.  Note the disparity between the percentage of active listings which are distressed, (the lowest percentage of the 3), the percentage pending sales which are distressed (the highest percentage of the 3) and the percentage of homes sold in November which were distressed.  A “normal” sale typically closes in about 30 days.  Most bank-owned properties close in 30 to 45 days.  A short sale may never close, and the default period of time to hear back from the lender according to our contract forms is 60 days…and it typically takes an additional 30 days to close.  Buyers and agents are learning about the frustrations, delays and risks of a short sale, which means the price for one has to be really good to tempt a buyer to go through the process.  This may actually lessen their impact on prices as fewer buyers want to mess with them.

For more information on Bellingham Real Estate or to search for homes in the Bellingham and Whatcom County area visit www.JohnsonTeamRealEstate.com, your one stop Bellingham real estate and community information resource!

1. Review health and dental care choices. Many employers allow you to make changes to your benefit plans now. Check with doctors and dentists to make sure they’re still in your plan’s preferred provider network and that your family has adequate coverage.

2. Review use-or-lose accounts. Pretax Flexible Spending Accounts (FSAs) are set up this way. Review your plan to see if you have some spending to do, or if your employer offers a grace period. Even then, make sure 2011 expenses are still allowed in 2012.

3. Review your withholding. Check the withholding calculator at the IRS website. If you haven’t been withholding enough to cover your taxes, you might want to increase the amount. Under-withholding can result in penalties.

4. Get ready for 2011 taxes. Check last year’s returns to see who needs to send you what tax documents, and by when. Make a list and follow up if anyone holds you up at the beginning of the year. Also, check last year’s return for itemized deductions. See if you should make deductible purchases now or wait until 2012.

Note: Be sure to consult with a tax professional before making any decisions related to your tax situation.

5. Set your 2012 financial goals. Now is the time to write down what you’d like to achieve financially next year. Save money for a down payment on a new house? Start a college fund for your kids? Put more into your retirement fund?

Thanks Sidney and People’s Bank for the wonderful and helpful tips!

For more information on Bellingham Real Estate or to search for homes in the Bellingham and Whatcom County area visit www.JohnsonTeamRealEstate.com, your one stop Bellingham real estate and community information resource!