FHA Loans in Washington

Maybe you are buying your first home in Washington, or perhaps you're relocating to Washington from another state. Then again, you may be a long-time Washington resident who is looking to either refinance your current mortgage or take out a home equity loan for home improvements. Regardless of your situation, it's important that you educate yourself on Washington home loans before shopping for a home and/or mortgage. This article explains what you will need to know before seeking a home loan in Washington:

The median price of a home in Washington is $211,500. Recently, homes in Washington have been appreciating at rates well above the national average. As a result, income levels in many parts of Washington are too low to purchase a median-priced home with a conventional loan. Although average interest rates in Washington are below the national average, Washington has one of the lowest levels of home affordability in the nation.

In Washington, before a buyer submits an offer on a home, their real estate agent is required to present them with a completed Real Estate Transfer Disclosure Statement. This document, completed by the seller of the property, requires the seller to name all of the property that will be included in the purchase (refrigerator, stove, alarm system, etc.) and rate certain aspects of the conditions of both the included property and of the house itself. This document requires the seller to disclose any potential problems or hazards that may discourage the buyer from putting an offer in on the home.

Washington's Civil Code Provision of the Real Estate Act regulates the issuance of variable interest rates for the purchase of real estate. Therefore, borrowers who are issued large mortgage amounts are guaranteed a fixed rate mortgage. Washington law also prohibits the charging of interest more than one day prior to the recording of the mortgage even if the borrower received the loan prior to that time.

In July of 2002, Washington law enacted a set of anti-predatory lending laws in order to help protect Washington homebuyers from predatory lenders. Some of the provisions of this new set of laws include the prohibition of a lender charging points and fees in excess of 6% of the total principal financed amount, the prohibition of a mortgage company issuing a loan to a borrower in an amount that the borrower could not reasonably afford to repay, and the prohibition of the financing of single-premium credit insurance, among others.

If you're buying a home in the state of Washington, you qualify for both federal and state FHA, USDA, and VA loans. First-time home buyers qualify for Washington FHA loans with below-market interest rates, and, depending on their eligibility, may also qualify for a loan in order to cover down payment and/or closing costs. Teachers and other professionals who work in an educational capacity may qualify for Washington's Extra Credit Teacher Home Purchase Program, a down payment assistance loan with forgivable interest.

In addition to FHA loans, the state of Washington also offers comparable programs to persons with disabilities or persons who live with and care for persons with disabilities. The state also offers several unconventional loans designed to aid home-buyers with the costs of their monthly mortgage payment. For example, Washington's Interest Only PLUS loan provides qualified home-buyers with a 100% financing 35-year loan that only requires payments toward the accrued interest on the mortgage for the first five years of the loan -- borrowers do not have to pay toward the principal amount borrowed until after the first five years. The individual requirements of each of these loans vary depending on the county in which you are buying a house.

Stop Thinking About It. It's Time to Sell Your House. Inventory is Very Very Low in Northern Virginia

Now is THE Time to Sell Your Northern Virginia House!

The title of this blog post pretty much says it all.

I'll repeat it here:

If you've been thinking about selling your house in Northern Virginia, follow these four important steps:

1. Stop what you are doing right now. Seriously. Stop!
   
2. Stop "thinking" about selling your house.
   
3. Tidy up the house.
   

Why?

Northern Virginia Housing inventory is at EXTREMELY low levels. A "normal" or balanced market means that there is 6 months of inventory of houses on the market. More than 6 months inventory favors buyers who have lots of homes to choose from. Less than 6 months inventory favors sellers who can take advantage of the lack of inventory to entice the buyers to buy their home.

In Northern Virginia, housing inventory is VERY VERY low.

Consider:

City of Alexandria:

• 446 homes on the market
• 1,103 sales in last 6 months or 183.8 Alexandria home sales/month
• Currently ONLY 2.4 Months of housing inventory in Alexandria, VA

Arlington County:

• 593 homes on the market
• 1,495 sales in last 6 months or 249.2 Arlington home sales/month
• Currently ONLY 2.4 Months of housing inventory in Arlington, VA

Fairfax County:

• 2,455 homes on the market
• 8,300 sales in last 6 months or 1,383 Fairfax County home sales/month
• Currently ONLY 1.77 Months of housing inventory in Fairfax County, VA

Oh, one more reason to get started now: Buyers have until April 30th to take advantage of the extended first-time homebuyer tax credit. You might be able to take advantage of the move-up tax credit yourself.

Texas Housing Market

According to Housing Predictor, the Texas housing market isn't immune to the national recession, but most areas have been much slower to see drastic drops in home values. However, Texas has more than its share of problems, including the drug wars, which could have a major impact in terms of housing values.

As the center of the U.S. oil business, Texas is experiencing more job layoffs in the energy business with less energy exploration and drilling rigs being idled due to lower prices being paid for oil. Foreclosures are rising and foreclosed properties are only projected to increase in coming years.

The fallout from the credit crunch will become abundantly clear in the Lone Star state. The drug wars along the Texas border will also impact the value of housing. In El Paso, on the extreme western side of Texas bordering Juarez, Mexico, the economy is just beginning to feel the impact from the Drug Wars in Mexico, which is expected to affect housing values on the most south west edge of the community.

Housing values could suffer as much as a 50% loss from violence associated with the drug cartels. Juarez saw 1,600 murders from drug violence last year. Job lay-offs are also affecting the economy, making it harder for many to pay their mortgages. For now, El Paso is forecast to see average housing deflation of 8.7% this year.

In the state's largest metropolitan area, Houston home sales have been on a dive for close to two years, but values in many areas of the market have held up remarkably for the time being. About a third of all home sales are foreclosures, and as foreclosures increase with the moratoriums expiring values will fall. More business failures, job losses and bankruptcies are hitting the state's largest populated area. The impact will have a devastating blow on the Houston economy, which is forecast to see average home prices deflate 9.8% in 2009.

Despite a huge drop in new home construction mortgage, the Dallas-Fort Worth area still ranks second in the country in new home sales. Houston tops the nation. But home sales are well off their record pace and home values are falling. Sales haven't slowed to a halt like in many other areas of the country, but increasing foreclosures will begin to have a more severe impact on the market over the next year.

With a loss in population in Dallas and an estimated loss of more than 300,000 residents statewide, Texas is hurting. The downward pressure will increase towards the end of 2009 and produce fewer home and condo sales. Housing Predictor forecasts that the average price of a home in the Dallas area will deflate 9.2% by year's end.

San Antonio home prices are on the way down, falling more than most areas of the state as a result of having the most over-built housing market in Texas. Increasing defaults in sub-prime and conventional remodel mortgages are troubling San Antonio, which could see the worst foreclosure rate in the state before it gets through the credit crisis.

Bargain priced properties listed by bankers are making it tough for other homeowners to sell these days. Home sales are projected to slow further in 2009 in San Antonio as fall out from the foreclosure epidemic hits with forecast deflation of 10.2% on the average home.

In some parts of Austin the market has remained fairly stable compared to other areas of the country. The rate of decline hasn't been magnified as much as areas that experienced double-digit housing inflation, bolstered by a strong high-tech business in Austin, and a youth culture that is doing everything it can to buy their first home. First-time home buyers are a large percentage of total home buyers in this area.

Market Update: First-Time Home Buyers In Portland

I recently read that in Phoenix, 93% of September Home Sales were below $400k. The author says that Phoenix is essentially a tale of two markets, one where homes in the lower priced spectrum are selling & where high-end homes are sitting.

It's interesting to see how the first time home-buyer tax credit has been effecting the Portland market, so I included these numbers to see how Portland compares to the Phoenix sales by price range.

Portland is not quite as high as Phoenix, but still 85% of sales in Portland were below $400,000- which is up about 4% from September of 2008.

Also note that sales below $250,000 are up 9.4% from last September. A lot of those sales can probably be attributed to the $8,000 tax credit.

The tax credit is set to expire on November 30, and the debate rages on in Washington over its extension. It seems to have given the market in Portland a boost, so it will be interesting to see how the market fares if/when it expires.

If the tax credit does indeed expire, it would still take a lot for things to get worse this winter compared to last year. Last January, Portland saw sales activity drag to the lowest total in the Portland metro area since RMLS™ began keeping records in 1992.

Nevada housing market still suffering

The number of residential mortgage loans in Nevada that are either delinquent or in foreclosure reached 18 percent in the fourth quarter of last year, second only to Florida's 20 percent rate, the Mortgage Bankers Association reported Thursday.

"It doesn't look good," said Keith Schwer, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas.

The percentage of residential loans nationally that are delinquent or in foreclosure ran 12 percent, six percentage points less than in Nevada.

Nevada's 18 percent rate includes 11 percent of loans that are past due, an increase of more than 2.5 percentage points over the third quarter. Properties going through foreclosure, the other component, jumped 1 percentage point to 6.6 percent.

With the high delinquency rate, Schwer fears the number of foreclosures will rise in Nevada, particularly given the state's high unemployment rate.

"That creates a lot of economic pressure on households that have a mortgage," he said.

But Brock Davis, president of US Express Mortgage in Las Vegas, said many of the subprime borrowers, those with weak credit ratings, already have lost their homes. Lenders have started resetting the rates on adjustable rate mortgages held by prime borrowers, Davis said.

He hopes the number of foreclosures will be smaller, but he is concerned.

"I'm getting questions from good credit people about 'How does it affect me if I walk away' (and allow the lender to foreclose)," he said.

"This new second wave is just as big as the first wave and continues until December 2011," Davis said.

"My personal hope is that the second wave of better credit, first-time home buyers have more credit character and won't have foreclosure rates as high as the first wave of poorer credit homeowners."

Florida Housing Market

I read an article from the Florida Real Estate Journal that I thought I would share for my post this week. Since I have recently expanded the number of states that I can lend in, Florida's housing market is now of a greater interest to me and my readers. The article below is from that publication and discusses what's been going on in the industry, predictions for 2010, and how Florida stacks up against the rest of the country.

The president of a leading Central Florida homebuilder said the worst housing market he’s ever seen could start to show noticeable improvement in late 2010. Until then, homebuilders - and businesses in general - will have to focus on shrewd management to survive.

“In my 37 years of doing it, this is the most difficult time I’ve seen in the overall housing industry and everything that relates to it,” said Robert Adams of Highland Homes.

“This (downturn) is a little different because it was preceded by a high level of demand for housing that was largely artificial in a lot of markets in the country, including Florida,” he said. “Homes were built not for use by the buyer but for anticipated resale by the buyer.”

About 60% of the housing demand was artificial, Adams said, resulting in a near doubling of home prices from 2003 through the end of 2005.

“We have never seen that kind of rapid escalation. It was enabled and facilitated by mortgage programs that allowed a lot of folks to contract for homes who had no business doing it,” he said.

The house of cards began to fall at the end of 2005, Adams said, with housing demand collapsing amid a drop in consumer confidence. The last 18 months have seen an uninterrupted decline in new-home pricing, he said, and new-home starts in Polk County have fallen to an annual rate of 1,000 from 8,500 in 2005.

“We got left with a glut of inventory. Those things combined made this (downturn) very difficult,” he said.

The good news, Adams said, is that existing-home inventory is beginning to be absorbed, which must happen before a market recovery takes hold. The Florida Association of Realtors reported a 20% increase in sales in February from one year ago.

“Meanwhile, it’s a very competitive environment among the homebuilders striving to carve out a piece of a substantially reduced pie,” he said.

Highland Homes - which has about 20 projects in Polk, Hillsborough, Pasco and Lake counties - has seen a 40% drop in business from the most recent peak, compared to 75% for the industry in general, Adams said. Highland Homes’ pricing ranges from the $120,000s to the $250,000s.

Adams said he plans to expand Highland Homes into the Orlando market on a very limited basis, but he doesn’t expect an upswing in the housing market or a change in first-time home buyers confidence for some time to come.

“I don’t see much change for the foreseeable future. We’re prepared to slug it out through 2009, and we’ll be in the same environment through most of 2010. I would hope as 2010 comes to a close that we’ll see some improvement,” he said.

Colorado's Housing Market

Against all odds, the Colorado housing market has made its mark as a place that has gone against convention. When housing markets were booming elsewhere Colorado was slow, and when sales were sluggish for an odd variety of reasons Colorado boomed. That was until the nation's financial crisis, which pulled the state into the housing bust.

However, there are strong indications that many of Colorado's markets are beginning to move back to being unconventional, and that the bottom in much of the state may not be too far off. There are more than a few silver-linings in Colorado real estate. The number of homes selling is on a steady rise amid the fallout of the foreclosure epidemic.

The inventory of homes for sale remains relatively slim, accounting for a six month supply in Denver. Foreclosures make up the majority of sales with lower priced homes. As the mile high city dances to its own beat in the housing bust against the rest of the nation, home values are declining, but not at the rapid double-digit rates elsewhere. Despite a market that was caught in the worst foreclosure epidemic in history, home values are only slipping by single digits and are forecast to drop an average of 9.7% in 2009.

Foreclosures make up the majority of Denver's sales volume as homeowners are unable to make higher mortgage payments due to adjustable rate mortgages. Outside Denver, in the suburb of Aurora sales had a run-up only to slow before bargain-hunters came in to buy up properties at some of the lowest prices in nearly a decade.

Aurora has been hit hard by foreclosures and was one of the first communities in the country to get federal funds to maintain vacant homes. Foreclosures are projected to increase throughout 2009 as more homeowners default on their mortgages, adding to an excessive inventory of homes on the market. Housing Predictor forecasts Aurora will see home prices deflate 10.6% in 2009.

Boulder is also seeing an increase in home-buyers' activity, but hasn't yet experienced an increase in sales, despite the federal government's first time buyer's $8,000 tax credit. Home values have topped double digit losses in Boulder, which has a long way to fall before its housing market re-inflates. Boulder is forecast by Housing Predictor to see average homes deflate 14.8% in 2009.

Grand Junction had been an exception in falling Colorado real estate values for the longest time, at least partially boosted by its natural gas fields. But with the value of natural gas off its' high, drilling and exploration has been cut back triggering job layoffs. The economic fallout has forced businesses in Grand Junction into failure and increased foreclosures. Grand Junction is forecast to see housing values drop an average of 8.8% in 2009.

Near the native Alpines that help make this state a scenic wonderland, Colorado Springs is holding its own in the housing slump, despite an increase in foreclosed properties. Home prices have fallen modestly as the Colorado Springs area fairs much better than most of the state. Housing deflation is forecast to continue through the year hitting a lesser 7.4% in 2009.

During the boom many newcomers moved to Fort Collins to escape big city blues only to see the community grow. With fha remodel financing harder to get for a mortgage, Fort Collins housing sales slowed, sending the market's home values lower and they're forecast to remain that way over 2009 deflating 7.9%.