My business as a local mortgage broker usually doesn’t start to kick in until the beginning of February as most clients are really slow to move in January. However, this is the first year in a long time that the trend has been broken. My phone has not stopped ringing. Buyers want to buy and they want to buy now.
Why the change and excitement?
- We are starting to see a trend of more jobs being created. The first thing that many people read every week is the unemployment reports. This is a mental thing that really effects people making those big decisions in life like buying a house. I know every time I hear the unemployment rate has gone up, I truly hesitate in making any big purchases. Alternately, seeing job growth encourages people.
- Interest rates are crazy low. The thing that is different about the rates from last year is that jumbo lenders are now starting to lower their rates a lot. Why is this important? Jumbo lenders lend their own money. They are not selling your loan to get their investment back right away as a traditional loan sold to Fannie Mae or Freddie Mac would. They are lending you their money so when they give you a loan for $4,000,000, it’s their money and it’s now on their books. Not a lot has changed in the money markets from last year, but these jumbo lenders have lowered their rates a full 1% from last year. Why? Confidence – good old confidence.
- The appraisal report data shows a stable market trend. A year ago 4 out of 5 appraisals were done and the appraiser notated the market as a declining market still. Since the last quarter of 2011 that has reversed. Now every 4 out of 5 appraisals are in a stable market. These are real numbers baby. The data shows the values have now became stable.
- Jumbo lender guidelines are loosening up. Our two top jumbo lenders have given us more loose guidelines to help clients qualify for a home. One that stands out is using a co-signer to qualify for a loan. Only 3 months ago this wasn’t an option. So now if you need your parents help to buy that $2,000,000 house we can use them.
We would love to hear your opinion on the market and my thoughts. Am I crazy to predict appreciation? Let me know. by John Ciolino on January 19, 2012
The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.
First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713
Visit First Capital Online or call: 310-458-0010