Not Too Late: Get Positioned to Buy South Bay Home

Federal Open Market Committee Keep Rates Loan through 2014

If you aren’t a homeowner yet, there’s still time for you to get positioned to buy. Ready to buy but haven’t started got started yet, now’s a great time to contact me to buy your South Bay home. Why? The Fed plan to keep interest rates low through 2014.

As reported on HousingWire, The Federal Open Market Committee said it will keep interest rates low at least through 2014 but will not yet act on further stimulus to a slow-growing economy.

“The Committee will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability,” according to the FOMC release 8/1.

The target rate of funds will remain between 0% and 0.25% for the next two years, unchanged since the Fed lowered it coming out of the financial crisis in 2008.

The central bank will continue a program to extend the average maturity of its holdings. In June, the Fed extended the so-called Operation Twist through the end of the year, by using principal payments from its holdings of agency debt and mortgage-backed securities to buy more agency mortgage bonds.

Committee members said household spending has been rising somewhat, but economic growth will remain only moderate “over the coming quarters and then pick up very gradually.”

What does this mean for you? The next two years will continue to be a good time to refinance if you haven’t already done so, so get your credit in shape and refinance your mortgage. Not a homeowner yet, save up for down payment and get your credit in shape, and buy a home with a low mortgage rate. Ready to buy in the South Bay now or want to know more how to get yourself positioned to buy? Give me a call at (310) 293-4886 or email me.

Home Buyers:
Tips for Financing Your Home Purchase

Click here to read this guide* for Home Buyers with tips on how to finance your next home purchase. Included are things you can do to:

1) Improve your credit score
2) Save for a down payment
3) Ask your mortgage professional

I have over 20 years living in and selling homes in the Los Angeles South Bay, so if you have further questions, please call me or email me at (310) 293-4886 | LucyGarber1@yahoo.com. My goal is to provide you the best in service so that you will refer me to all your friends and neighbors with confidence.

Lucy Garber

*Guide by Trulia

Mortgages and Offers

Are you shopping for a home in the Los Angeles South Bay? Get pre-approved to make your offer stronger in a multiple-offer home deal.

Don’t get pre-approval confused with pre-qualified. The latter means a lender has estimated what you can afford from your income, debt and credit information. Pre-approval puts you much closer to the actual loan and means the lender has done the legwork of pulling your credit report, checked your debt-to-income ratio and a more in-depth analysis of your financial situation.

Some home buyers wish to save money by shopping online for a mortgage, but this can be overwhelming when offers start coming in. According to Zillow Mortgage Marketplace, the average number of quotes their customers receive is 20. The terms of the loans may vary, a long with the qualification and documentation requirements. Some of these the home buyers will not discover until they are along in the process when timing is crucial.

An alternative to shopping online for a mortgage is going through a local South Bay mortgage broker who has access to a myriad of institutions and home mortgage loan package. The mortgage broker will look at your specific financials and match you with the best mortgage package for your particular situation. Since they do this on a daily basis, they can assess this more quickly and thoroughly than someone doing this for the first time. The mortgage broker will know what to look for and what questions to ask.

Email or call me at 310 293-4886 if you would like referrals to excellent mortgage brokers who have helped my home buyer clients purchase their South Bay dream home.

References sources: Home & Garden and California Association of Realtors

The Price is the Same,
but the Cost is Less

There is more and more research coming out showing that it makes great financial sense to purchase a home today. Whether it is Rent vs. Buy ratios, income-to-price ratios or income-to-mortgage payment ratios, purchasing a home right now is a bargain compared to historic norms. Now, you should look at the COST of a home today compared to pre-peak prices.

According to the S&P Case Shiller price index, residential real estate values have returned to 2003 first quarter prices. That, in itself, says something. However, when you factor in mortgage rates, the case for buying a home today becomes even more compelling.

In 2003, 30 year mortgage rates stood at 5.88%. Today, they are 4%. How does that impact the actual COST of a home? On a home purchased for $250,000, here is the difference in monthly cost:

 DATE LOAN AMOUNT INTEREST RATE MONTHLY PAYMENT
(P&I)
 2003 $250,000 5.88% $1,478.84
 TODAY $250,000 4.00% $1,193.54
 Difference in Mortgage Payment $2835.30

That means you save $285.30 a month, $3,423.60 a year and $102,708 over the life of a 30 year mortgage! You buy the home for the same PRICE but the COST is over $100,000 less.

This is why so many financial advisors are saying that this may be one of the greatest times in history to purchase a home.

To learn more, or to start the process to buy your home in the South Bay, call me, Lucy Garber at 310 293-4866.

$18 Billion – Wow!
California Mortgage Settlement Details

Hope Yet for Distressed California Homeowners

On February 9, Attorney General Kamala D. Harris announced that California secured up to $18 billion for its distressed homeowners as part of a $25 billion national multistate settlement with the country’s five largest loan servicers. More than $12 billion will be used to offer short sales or write down loans over the next three years for about 250,000 underwater homeowners in California, according to the attorney general. Relief will go to areas hardest hit by the foreclosure crisis within the first year of the settlement.

Although the actual settlement has not yet been released, the attorney general has stated that other financial benefits for California include $849 million for refinancing 28,000 borrowers who are underwater but current on their payments; $279 million restitution for 140,000 homeowners who were foreclosed upon between 2008 and 2011; $1.1 billion for unemployed homeowners, transitional assistance, and repairing blight; $3.5 billion to extinguish unpaid loans that remain after foreclosure for 32,000 homeowners; and $430 million to the state attorney general’s office for costs and fees. As part of a California guarantee, if the lenders fail to reduce principal balances by a minimum of $12 billion, they will be required to pay fines up to $800 million to the state.

The loans involved in this settlement are those owned or serviced by Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, and Ally Financial Inc. The settlement releases the five named lenders from certain federal and state claims pertaining to robo-signing and other foreclosure misconduct by the lenders. It does not affect any individual’s rights to bring legal action against a lender. It also does not apply to the majority of mortgage loans, which are those owned by Fannie Mae or Freddie Mac.

This mortgage settlement does not change any homeowner’s existing financial relationship with a settling lender. It does not relieve homeowners from any obligation. It does not require a settling lender to stop any foreclosure.

Homeowners seeking relief under the settlement agreement should contact their loan servicer or a HUD-approved housing counselor. More information including detailed FAQs is also available from the California Attorney General’s website, or visit the National Mortgage Settlement website.

Reference source: California Association of Realtors