SDblog

I had a client ask me why I thought it would be a good idea to refinance using an FHA loan instead of a convention loan with the increased new loan sizes (up to $697k in San Diego County). 

The main reason is if you are going to be over 80% Loan-to-value (i.e. your loan size is more than 80% of the appraised value).  With FHA, you do not pay monthly mortgate insurance (it is a percentage added on to the loan size), you pay it in the form of interest which is generally tax deducable.

This eliminates the need to qualify for PMI (private mortgage insurance).  PMI has become difficult because the PMI companies have taken major hits over the last year due to the foreclosure problems we are experiencing.  I have had more than one loan knocked out of the box because the PMI company would not approve the borrower.

If you are under 80% LTV, then using the normal conforming loan is preferable - you never need PMI when you are under 80% LTV.

Any more questions, just post a comment on the blog.

Thanks, Jan Farley

                                       

DARN!  I COULD HAVE BOUGHT A HOME!

WHY ARE YOU STILL PAYING RENT???

There are 17 one and two bedroom homes and condos in La Mesa available today from $125k - $199k.  And this same scenario is true in most areas throughout San Diego County.  This means that buying that first home in San Diego County is now not just a possibility, but a strong opportunity!  Your total monthly payment on a $199k purchase price, including taxes and any HOA fees (for a condo) could be in the neighborhood of $1,695 per month!  Of course there are variables, such as how much the HOA fee is, what interest rate you are able to lock, whether higher or lower.  With the tax savings you will have writing off your mortgage interest and the property taxes, you could actually be paying less than rent for the same property!

People, for most of us, this is a once in a lifetime opportunity to buy a home or condo in San Diego County at an affordable price with interest rates near historic lows, and with the stimulus package increasing FHA and conforming loan sizes to make it all happen for you.  Don't let the opportunity pass you by! 

Wow we have been waiting a while for this headline!  And very timely as well, don't you think, since I last week posted that I thought the buyer's market was quietly taking an exit stage left.  Being on the front lines, we real estate folk are always way ahead of those who think they are "in the know" and the media.  Of course, they had to follow the headline with the decline in prices.  But the decline in prices will itself begin to decline as buyers hit the market.  We are seeing multiple offers OVER the asking price - just like 2003 all over again (and with similar prices).  We still have bad issues with lending guidelines really making a harsh impact, but the temporary increase in conforming and FHA limits are really going to fuel the market this year.  We will need those increases to be extended for at least another year, if not permanently.

Get out there and buy a rental unit, people, while they still pencil out to have the rent actually cover your monthly PITI!  You will be sorry if you miss this market.

Jan Farley

Watch this video from CNBC regarding the new liquidity moves made to give Fannie and Freddie the ability to fund the new loan sizes up to $697k.  This is really going to be a shot in the arm for people to refinance out of adjustable rate mortages and to buy a home. 

http://www.cnbc.com/id/15840232?video=689319687

Thanks, Jan Farley

So the new loan limits are here!  For San Diego, the new conforming and FHA limits are $695,000.  For other pricier counties, the limits are up to $729,000.  VA loans unfortunately were not affected.  Also, we understand that FHA is going to be allowing a down payment of 1.5% instead of the 3% it has been for many years.  This would also be a great benefit.

So what does this mean for you?  Well, if you are a home buyer, you can now afford more of a home than you could last month, because you are no longer going to have to pay the much higher jumbo loan interest rates.  You may also be able to refinance, but many of you won't have the equity.  There are some things congress has been discussing to help you if you don't have any equity, so keep your eyes tuned and we will bring you that information as soon as it is available.

So now is the best time to buy in a real long time - get out there and buy a rental unit - the payments are so low now you can actually have positive cash flow!  Don't wait - we are seeing multiple offers now on homes and condos priced right  - looks like its gonna be 2003 all over again :)

Jan Farley

FHA has announced the new maximum loan amount for conforming loans in San Diego County: $697,500!  This is excellent news!  Many of us had used various formulas to try to figure out what the new limits would be, but this is more than we had hoped for.

Don't miss this limited time opportunity to refinance to a great fixed loan with no monthly PMI, and get rid of that 2nd that goes up and down with every whim of the Fed.  Call me today, 858-699-7480.

Jan Farley

Are you ready for a rebate?  There are some things you should know.  You must file your 2007 tax return in order to get the rebate.  What a great way to get us all to file on time for a change!  I wonder if that was the plan all along - pay us a bribe, whoops, I mean INCENTIVE to file our taxes on time!  Most people actually have to pay taxes, not just get a refund, so what a brilliant idea for getting money into the treasury. 

For the full scoop, see this article from rismedia.com.   http://rismedia.com/wp/2008-03-03/eager-for-stimulus-rebate-check-out-these-myths-and-facts/    

Thanks, Jan Farley