Archive for February, 2009
San Diego’s private mortgage insurance dilema
February 27th, 2009 Categories: Real Estate News, San Diego County Fixer of the Week, San Diego county Real Estate News
SAN DIEGO– Yesterday I received this email from a lender I use;
There is only 1 MI company left that does CONDOS to 90%…….
41% max DTI regardless of DU findings (edit:DTI=Debt to income)
70% owner occupancy (yikes)
Min credit score: 720(this has been for a bit)
The dilemma is that while there are so many positive things happening for home buyers right now such as low mortgage rates and the new tax credit, it does no good if you can not qualify for a loan.
One of the perks of the current climate for both buyers and sellers, is needing as little as 3.5% down for an FHA loan. But without a company that will write private mortgage insurance on your loan, which is often necessary on purchases with less than 20% down, this ability to purchase with a low down is essentially unavailable to you if you are buying an attached home.
Another aspect of these new guidelines that could have significant impact on our region is the 70% owner occupancy rate. In the past it has been 51%, so this is quite a jump. One of the issues that was coming up quite a bit locally was project that did not meet the 51% guideline due to REO/bank owned homes. The FHA and FNMA announced that they consider these homes owner occupied for the sake of ratios, however it is my understanding that lenders and private mortgage insurance do not have to abide by this. They can still use their own guidelines.
The significance to our region is that close to half of resale homes sold are either bank owned or short sales. So this is not a small portion of our local market.
Now the email says there is only one left. If that one stop writing policies, it will be impossible to purchase a condo for less than 20% and that does not play well in our area!!
Now, if your thinking the government would not let this happen, there is so much confusion with this industry that it is a possibility.
Check out this headline from smartbrief.com on 2/23/2009;
Mortgage insurance changes part of rescue program
The article goes on to say that, “Mortgage insurance protecting Fannie Mae and Freddie Mac from homeowners’ default will be included as part of the mortgage rescue plan, James Lockhart, director of the Federal Housing Finance Agency, assured the Mortgage Insurance Corp. of America.”
However, just this morning, uk.reuters.com had this;
U.S. has no plans to aid mortgage insurers: official
In this article the treasury department said it has, “no current plans to provide funds under the financial stability plan to mortgage insurance 
companies,” the official said.”
AND James Lockhart is now saying, “he would like to see mortgage insurance companies receive a capital injection under Washington’s financial market rescue plan.”
That’s a bit different than assuring the industry will be included.
So what does this mean to you? It means that if you are not getting straight and direct answers from your lender or your realtor, it is more a reflection on the environment than on their ability. Hopefully. I have heard from top to bottom that this is a market no one is familiar with and the rules are changing sometimes hourly.
If you are looking to buy an attached home, make sure you inform your lender about your down payment and ask about the PMI situation. I will gladly help you with any questions or concerns you may have.
“This is now a great opportunity to buy or refinance,” said Satnick, 44. “But getting the mortgage has gotten so hard it’s putting those properties out of reach of a lot of people.” -Robert Satnick,www.bloomberg.com, 2/27/2009
Use someone you trust.
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More good news for San Diego’s buyers and sellers
February 24th, 2009 Categories: Real Estate News, San Diego County Community News, San Diego county Real Estate News
SAN DIEGO– Well first we had the announcement regarding the first time home buyer’s tax credit. Today, FHA announced conforming loan limits are being moved back up. For a single family home, the new limit goes to $697,500 from the current limit of $546,250.
For buyers the direct impact of this change will be the savings on your interest rate. Currently the difference between conforming and non conforming is about 1.75% percent, based on rates provided by BankRate.com on 2/24/2009. Todays 30 year rate for conforming loans is 5.22 versus 6.91 for non conforming. Another impact will be the number of homes listed for sale to select from will increase as the payment on higher priced homes becomes more affordable.
If these new values were in place today and we use today’s interest rates, 
a simple interest payment on a $650,000 home at 5.22% would be approximately $2828.00 a month. If you applied today’s non-conforming rate of 6.92%, the payment would be approximately $3743 a month. That is a significant savings!!!
This savings for the buyer will have a direct impact on sellers also as your pool of buyers should increase significantly. In North County alone this would impact 657 listings today!!
Look for these changes to take effect in the next couple weeks.
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First time home buyer tax credit update
February 13th, 2009 Categories: Real Estate News
SAN DIEGO– While not official yet, it looks as though the first time buyer tax credit was trimmed from the proposed $15,000 to $8,000. This increase represents only a $500 increase from the existing $7,500 credit. However the significant change is the removal of the pay back requirement. Stay in the home for over three years and the money is free!!!
FIRST-TIME HOME BUYER CREDIT First-time home buyers are eligible for a refundable tax credit equal to 10 percent of the purchase price of their home, up to $8,000, if they made the purchase after Jan. 1, 2009, but before Dec. 1, 2009.
Unlike a similar credit that Congress provided last year, you don’t have to pay this one back over 15 years. The new credit, however, does phase out for individuals with incomes over $75,000 or married couples with incomes over $150,000 who file their taxes jointly. Also, you forfeit the credit if you sell the house within three years.-New York Times, 2/12/2009
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Solana Beach townhome perfect for triathlete
February 12th, 2009 Categories: Real Estate News, San Diego County Bike Rides, San Diego County Triathlon Race Reports, San Diego County run routes, San Diego county Real Estate News, Triathlon Club of San Diego Race Reports
SOLANA BEACH– If you have are looking for the perfect first home west of I-5 and have the active triathlon lifestyle, you MUST consider this Solana Beach townhome.
For those that are familiar with city of Solana Beach, you already now everything there is for living the California active lifestyle. For those that are not familiar, read on. It’s worth it!!
Solana Beach, located between Cardiff and Del Mar, is primarily lived west of I-5.
First you have plenty of beach for surfing, sunning and fishing anchored by Fletcher Cove. This also happens to be where the Friday morning Triathlon Club of San Diego swim starts. Staying with the swim theme, just up the hill on Lomas Santa Fe from the beach, you have the San Dieguito Boys and Girls club which has a great masters program.
For cycling, BnL Bike is located on the coast highway at just over a mile from this townhome. Time to ride? You have the ability to roll out your door and do a coastal ride or head inland for a Del Dios’ Lake Wohlford route, Del 
Sur or ?.
For the runner in us all, you can easily hit the coast running right from your new home or head up over the hill on Valley and connect with the running trails of the San Elijo lagoon.
Now for general fitness, there is the Boys and Girls club as well as Frog’s Fitness Center. Again all within a mile and a half.
Friends coming over? Head to Cedros Design District for some shopping, dining or live music at the Belly Up. You can also hit the Plaza on the coast 
highway for more dining choices.
Summertime? The Del Mar Fairgrounds is an easy walk. Invite friends over for a walk to the fair in June and then see the ponies run in July or checkout the 4 o’clock Friday’s live concerts there also.
What about the groceries? At the top of Stevens you have Henry’s, Bev and More, Dixieline plus many other shop, while across the freeway is Vons and more.
Heading downtown for a Padre or Charger Game? Want to do a ride from LA back to Solana? The Coaster and Amtrak train station is just around the corner.
Also Del Mar’s dog beach is an easy walk and a great playground that your best friend will love!!!
Again, ALL of this lies within a mile and half of your door, with the exception of the Vons.
There are a few things I especially like about the house itself.
Firstly, it is a 3 bedroom 2.5 bath with an attached garage that accesses the house through the common bath which is the perfect place to shed those sweaty clothes. Secondly, the three bedrooms are all upstairs and 
provide an opportunity for a guest bedroom AND an office. Thirdly, this homes sits on top of the hill on a cul de sac and has a huge greenbelt area just off your private patio which is a perfect spot for friends and a BBQ. Lastly, the owner has updated the home, it has a nice Provencal style kitchen, and added windows to bring in plenty of natural light. About the only thing I would do is add a couple skylights in the living room to enhance the openness of the cathedral ceilings.
If you are considering a coastal purchase, you really need to consider this Solana Beach townhome.
You can contact me here.
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First time home buyers tax credit doubles to $15000?
February 4th, 2009 Categories: Real Estate News, San Diego county Real Estate News
SAN DIEGO-Well San Diego’s first time home buyers are one step closer to getting a $15,000 tax credit, doubling the existing tax credit of $7,500. But remember, nothing is free.
Currently, first time home buyers can receive 10% of the purchase price of their first home up to $7500. The qualifying home must be purchased between April 9, 2008 to July 1, 2009. For anyone who has owned a home in the past, the definition of a first time buyer includes anyone who has not owned a home in the last three years prior to purchase of the new home. Additoinally there too are restriction as they relate to the income of the buyer(s).
As for the nothing is free part, this is really an interest free loan from the government in the form of a tax break. There is a repayment period of 15 years that starts after two years of ownership.
How do I repay the credit?You start repaying the credit in the second year after the tax year that the home was purchased.
So if you took the credit on your 2008 tax return, you begin repayment when you file your 2010 tax return. Your payments are set at $500 per year for 15 years.(edit by Brian: This is true if you received the entire credit. You pay back 6.67% of your tax credit a year)
They are “paid” as part of your tax liability. Depending on your tax situation, you either get $500 less on your refund each year, or you owe $500 more in taxes.
You might need to increase your withholding or make quarterly estimated payments to cover for the repayment and ensure that you don’t get penalized for under-withholding.
What if circumstances change?
- If you sell the house before the end of 15 years, you will have to pay the balance remaining on the credit on the tax return for the year the house was sold.
- If you no longer use the home as your principal residence (say you rent it out), you pay the remaining balance on the tax return for the year the use changed.
- If you die before the 15 years, the balance does not need to be repaid.
- If you get a divorce and the home is transferred to your spouse, your spouse will be responsible for future payments.
Source-http://turbotax.intuit.com
Stay tuned here for updates on this new and improved credit.
For more information on the first time home buyer’s tax credit you can go here and here.
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