After the strong increase in number of units sold in December, January was a letdown, with unit sales down by 26% in Bellingham, although up in Whatcom County as a whole from 2009. February brought the numbers back, resulting in year to date sales nearly even in Bellingham compared to 2009 and up in Whatcom County overall. Bellingham has traditionally been the strongest residential sales area in the county, so the shift to greater strength in the county over the past 2 months has been an aberration – it will be interesting to see how the rest of the year develops. Prices continue to soften, with both averages & medians trending downward in most areas. Some details
January/February residential units sold decreased by 1.3% in Bellingham and increased 17.4% in Whatcom County as a whole over January/February 2009.
Average sale prices for homes in Bellingham during the first two months of 2010 were even with 2009, but the median fell by 8.4%
Average sale prices for homes sold in Whatcom County as a whole dropped by 4.7% from 2009, while the median was down 1.9%.
The strongest markets in Whatcom County in terms of residential units sold relative to a year ago were Ferndale and Birch Bay/Blaine, up by 100% and 28.6 % respectively. Their average prices dropped by 6% to 8.6%, but the median in Ferndale rose 12%.
Sudden Valley is holding its own, and Lynden is continuing to struggle.
The chart below shows unit sales, average sale prices and median sale prices over the past 3 years in Whatcom County as a whole.
For the complete Bellingham and Whatcom County statistics, charts and predictions visit the February Real Estate Report online. For ongoing real estate numbers, go to www.JohnsonTeamRealEstate.com. We update the site weekly with everything from interest rates to market conditions to information from Fannie Mae, the FED and the FDIC. Also, feel free to call us at (360) 303-2734 or e-mailInfo@JohnsonTeamRealEstate.comif you want to know more about a specific portion of the market – we track a lot more than we have space to report.
If your neighborhood would like a presentation or a link to your website of up-to-date information on real estate in the neighborhood, we can provide it – just give us a call.
www.JohnsonTeamRealEstate.com also includes a constantly updated list of newly listed properties and a list of properties being offered as short sales & foreclosures (REOs), as well as the entire listing database of the Northwest Multiple Listing Service, fully searchable to your specifications.
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Buying a new home can be a little scary, but it should be fun. What is not fun is getting part way into the process and finding out that you can’t get the loan you thought you could. Your first line of defense against this happening is to make sure your loan officer has all your financial information ASAP. Two things that can get your loan denied (even after a lender preapproval) are
You aren’t approved by the PMI company. You may be approved by the lender, but if you are putting less than 20% down on a conventional loan, you will be required to buy private mortgage insurance. PMI companies have become very picky, because their’s is the first loss in the event you default. If your credit score, debt ratio, amount of reserves or state of the market where you are buying make them a bit nervous, they may require a larger downpayment…or decline to provide the insurance. In that case, your lender will not loan you the money.
The condo association doesn’t qualify. Lenders have taken huge losses on condo loans, and guidelines that used to be ignored are being more strictly enforced. Some of them include:
No more than 10% of the units may be owned by a single entity. This can create problems if you are buying into a small complex.
The amount of the condo’s bond may be too low.
Cash reserves may be too low – they must typically be at least 60% of the annual association fees.
Home loan rates as of Wednesday, February 24 are in the following table. For more details, or a custom quote, contact SidneyStonecypher 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 and the tax credits, it is a great time to buy a house!
Down Payment
Interest Rate
APR
Credit Score
Points
Conventional 30 yr fixed
20%
4.875%
4.967%
740
1
Conventional 15 yr fixed
20%
4.250%
4.406%
740
1
Jumbo 30 yr fixed
20%
5.875%
5.960%
740
1
FHA 30 yr fixed
3.50%
4.750%
5.104%
580*
1
VA 30 yr fixed
0%
4.750%
5.122%
*
1
*Score requirement will vary by lender
If you have other questions about financing, don’t hesitate to contact us and we will get you the answer. If you are wondering, other people probably are as well. For general financing and market information, check out our website.
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Having a home loan denied can be embarrassing, frustrating and costly if you haven’t done your homework before you write that purchase agreement. When talking with a loan officer, make sure you give them all your information…and make sure it is accurate. Here are two things that can get your loan denied:
You have recently gone from salary to commission. Lenders typically do not count commission income unless that has been your income source for at least two years. If this has recently changed, you may need to wait unless your spouse’s income is sufficient for you to qualify.
Incorrect tax returns. Lenders can no longer rely on your copies of tax returns as proof of income - they must order transcripts from the IRS to confirm their accuracy. Common differences include exaggerated income, unreimbursed expenses and second home expenses. If you have just filed your return, it can take up to five weeks to get a copy of the transcript, so if you are thinking of buying, get your tax return in early.
Home loan rates as of Wednesday, February 17 are in the following table. For more details, or a custom quote, contact SidneyStonecypher 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 and the tax credits, it is a great time to buy a house!
Down Payment
Interest Rate
APR
Credit Score
Points
Conventional 30 yr fixed
20%
4.75%
4.87%
740
1
Conventional 15 yr fixed
20%
4.25%
4.41%
740
1
Jumbo 30 yr fixed
20%
5.75%
5.85%
740
1
FHA 30 yr fixed
3.50%
4.75%
5.10%
580*
1
VA 30 yr fixed
0%
4.75%
5.12%
*
1
*Score requirement will vary by lender
If you have other questions about financing, don’t hesitate to contact us and we will get you the answer. If you are wondering, other people probably are as well. For general financing and market information, check out our website.
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Getting a real estate loan is about a lot more than the amount of your downpayment and your current income. Two factors that can get your loan denied are
Excessive debt. Lenders measure your debt load by the DTI – debt to income ratio – which is the amount of your monthly payments divided by your gross monthly income. The typically allowable level has dropped from 55% to 45%. Pay off the credit cards and other small debts before you apply for a home loan. It will also improve your credit score, which will lower your interest rate!
Declining Income. This is particularly a problem for people who are self employed, because lenders are far more cautious with those borrowers. If your tax returns show less income for the current year than for the prior one, the lender is likely to use the lower number, and in some cases discount it further if they believe the trend is down in your industry.
Home loan rates as of Wednesday, February 10 are in the following table. For more details, or a custom quote, contact SidneyStonecypher 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.
Down Payment
Interest Rate
APR
Credit Score
Points
Conventional 30 yr fixed
20%
4.75%
4.88%
740
1
Conventional 15 yr fixed
20%
4.25%
4.40%
740
1
Jumbo 30 yr fixed
20%
5.75%
5.85%
740
1
FHA 30 yr fixed
3.50%
4.75%
5.10%
580*
1
VA 30 yr fixed
0%
4.75%
5.12%
*
1
*Score requirement will vary by lender
If you have other questons about financing, don’t hesitate to contact us and we will get you the answer. If you are wondering, other people probably are as well. For general financing and market information, check out our website.
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I was recently contacted by a young couple who were our clients in the purchase of their first home in Bellingham in 2006. They have decided it would be best for them to move for him to be closer to his job, and to do that, they need to sell their house. By the time we looked at the current value, we all realized that they don’t have enough equity to pay off their loan and their closing costs. If they sell, it will have to be a short sale, because they don’t have enough money to make up the difference.
A point of clarification here: these are people with a good job, who have been paying extra on their mortgage, with great credit. They fully qualified for their initial loan – it was not at a low teaser rate and they didn’t overstate their income. They are simply caught between declining real estate prices and increasingly strict downpayment requirements that make it impossible for them to sell or refinance.
They are currently exploring their options, and they have agreed to share the process in the hope that it will help someone else deal with the shock of finding they have a debt they can’t pay. At our meeting, we talked about sources of help and I made some suggestions as to people with whom they should talk. They had already talked with their original loan officer, who didn’t give them much hope. The first person I sent them to was an attorney, “Steve”. What follows, in their own words, is the first phase of their search for information and help.
Steve was very helpful. He also called a “short sale negotiator” to get a second opinion for us. They agree that Bank of America, especially, will not even talk to us about short sale or anything else as long as we are able to continue making our payments. He also said that there is great potential that we would still be required to pay off the second mortgage should the short sale go through. And any debt that is forgiven is being reported on 1099s as income to the seller. (But he said there is/was a law to protect homeowners that may be renewed and we would need to check with a good accountant for that.) He also told me that most short sales are being negotiated without a lawyer, and he doesn’t necessarily recommend using a lawyer for it. Then he suggested that I check out the web site for the White House on mortgage help.
I went to the web site and found a free counseling hotline number, which I called. They are nonprofit representatives of the federal government who are counseling people in our situation to help them know if they qualify for Obama’s helps. Even though the B of A rep told us we do not qualify for MHA, the counselor seemed to think his reasoning was wrong. In fact, once “John” is home again (next week, we hope), we are supposed to call back and have an hour counseling session with them wherein they will help us determine the best options available and even conference in our lender to get the process started under their supervision. It hinges a great deal on our income-to-expense ratio, and not as much on our assets. We qualify for counseling simply because we are in an ARM that will adjust soon. I am hopeful that this will lead either to a loan modification, or guidance as to a short sale.
I do have one question about the short sale which Steve did not answer for me. How on earth do we cover listing fees and closing costs on our sale in the event of a short sale? Can we roll them into the sale and just have the bank accept even less? (I admit that sounds like a pipe dream.) Some people we have talked to have made a short sale sound relatively painless. Others have made it sound worse than bankruptcy. And Steve mentioned that most people who short sell and have to retain part of their mortgage end up declaring bankrupcy and getting the debt forgiven in order to “start over.” I know people who’ve gone through bankrupcy, and we want to avoid that if at all possible. It would be our LAST resort!
Anyway, if you could answer my question about how closing costs are covered in a short sell, I’d really appreciate it. Otherwise, I’ll let you know what counseling turns up for us. Maybe what we find out will be something you can use to help guide any others in our situation.
Thanks, again, for all your help. I do feel like we are getting to some real answers, and hopefully some real solutions.
As they learn more, I will post the information here. In answer to “Mary’s” question, yes, closing costs can be rolled into the sale. If you would like a refresher on what some of these terms mean, an earlier post provides some definitions and explanations, including the potential impacts of short sales and foreclosures on both sellers and buyers.
If you have a story, please share it. This is a huge problem that we are going to continue to see for quite some time, and your experience, like theirs, might help someone else who never thought this could happen to them.
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