McKinneyMarketwatch

End Of The Year Market Report

December and January are normally a slower time in the market and then we usually start our climb up.  We will see when the climb starts this year.  We had an OK December and we should start January with some activity, but we want 2011 to be a better year.  I don’t think you will see prices go up this next year, but I don’t see them coming down, either. I do see interest rates continuing to rise even without much demand.  Most are at 5% now rather than the 4.25% we had been seeing during the past several months.  Perhaps if rates continue to rise, we will see buyers that are “on the fence” make the decision to buy.  I do feel we have a lot of buyers on the fence and they are scared about the future as are all of us.  We are in good shape with the economy here in Texas. I don’t predict  that anything will change our consistency here, so personally, I do not think it is a “scary” time to buy, but a very smart thing if you get the right advice.  Of course we are here to guide you or someone you know in the journey.

 

Market Watch for 2010!

First part of 2010 was very good with houses selling quickly because of the Tax Incentive we figured out.  We found out because after the Tax Incentive was cut off, our activity also stopped!   The buyers that are out there want good buys, so are they are coming in lower and expecting more.  Foreclosures are still there but with multiply contracts and bidding which doesn’t allow a buyer to “steal” the property.  Some of those foreclosures need to be left alone with all the work that is needed.  Don’t have too many investors in the market with cash since it is very hard to get a loan on some of those houses in their condition and very hard for an investor.

We are selling more FHA’s with 3.5% which anyone can use the Government loan and borrow close to $300,000.  FHA does have MIP but that mortgage insurance is now tax deductible, so just pay it.  Finding a lender that will do 5% down is still available on Conventional with PMI (private mortgage insurance) but harder to find.   There are very few second mortgages out there like we used to do.  (We were doing a lot of first and seconds to get an 80% loan to value.)  If there are any seconds, the interest rates are very high.  The seconds are the ones that have been wiped out on a foreclosure since the first wipes out any other loan (except a tax lien) when they foreclose on the property.

Getting qualified has been getting tougher though!  We could get you a loan with a credit score of 580 but now you must have a credit score of 640 in order to get an FHA loan which is the easiest loan to qualify for!  Keep working on those credit issues and don’t be late on your payments!

With interest rates still closer to 4.35% and lower and with prices "flat," what are you waiting for to buy?  Call us for your Planning and Strategy Meeting to see if you can or should buy (without obligation).

Should We Re-Finance Right Now?

Interest rates are really low right now.  We are closer to 4.75% and 5%!  Wow, that even sounds better than the 6.5% that we have been enjoying.  If you have a higher interest rate than 6.5%, we are sure you are thinking maybe you should refinance.  You will be getting information in the mail about refinancing and how cheap it is and how low of an interest rate, etc.  You’ll find it on the Internet too and you know anything you read on the Internet has to be true! 

 

There are some guidelines for you to follow if you think it is time to refinance.  First, your interest rate and the current interest rate should be 2% variance.  Just because you might be quoted that low of a rate, get it in writing.  Remember you have to qualify for a refinance and it takes money to refinance.  It is just like taking out a new loan.  (Hint:  you can reduce your title company charge on the title policy if you will go through the same title company that you bought and closed your house.)

 

Alright, if you have 2% difference, now you check with a lender and the fees will cost you $5,000.  You are saving $125 a month in your payment, so it will take close to 3 years to see that savings!  Do you see that?  So make sure you are happy with your house and it fits your needs for your family and you for the next 3 years or we think you are wasting your money in refinancing.  Yes, the lower payment is attractive, but count the cost first.  Call us and we will be happy to consult with you and refer you to a mortgage consultant that we trust to tell you the truth and guide you right.  By the way, one story we hear from those who are not our clients is that the rate was higher at closing that they thought and with the escrows, they ended up rolling more back into the mortgage!  Also, remember if you turn the loan back into a 30 year mortgage, you have just gone backward?!

 

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