More Information on the $8,000 Tax Credit

The longer we wait, the better the information. Click here to see a very informative one-pager from the Illinois Association of REALTORS.

As always, contact me if you have any questions or need more info.

Couple New Lending Changes for Buyers

Here are some new lending updates that affect buyers effective immediately:

• Kitsap limits increased for FHA purchases: single family $475,000; duplex $608,100; three-plex $735,050; and four-plex $913,450
• Conventional financing now available for investors who own more than four homes.

The requirements are somewhat detailed so contact me for the specifics. Happy to help at your convenience.

Correction to Refundable Tax Credit

On Tuesday's video post I mentioned that the recently approved stimulus legislation included an $8,000.00 non-refundable tax credit. This is incorrect!

The tax credit is refundable which means if your taxes (joint return) are less than $8,000.00, then you would receive a check for the difference.

I apologize for any confusion.

Is Now A Good Time To Buy A House?

Dave responds to a question about whether now is a good time to buy a house or to wait.

Provisions of the $75B Mortgage Bailout Package

Although I'm certainly not the expert, not to mention the package is less than a week old, these are some of the provisions in the proposal as I understand them:

Homeowners who might be eligible:

• Those who have missed mortgage payments (don't know how many it takes) or who have been notified of a pending foreclosure
• Haven't yet missed a mortgage payment but who have a high income-to-debt ratio (I believe the number is greater than 38%)
• Mortgages aren't held by either Fannie Mae or Freddie Mac

Homeowners who are not eligible:

• Folks who have already lost their homes
• Those with vacation homes (second homes) or investment properties

As I mentioned, this program is so new the specifics are probably being debated as more and more politicians and administration officials actually read and try to interpret the wording.

Dave Jones and Walt Frey Discuss Ninja Principles

Walt Frey was the original Ninja Selling instructor and taught the classes beginning in 2003 in Washington State. Since then Walt has taught Ninja throughout the country.

The Ninja program is based on real estate principles developed by Larry Kendall, Chairman of The Group Inc., Fort Collins, CO, one of the premier real estate countries in the United States.

Now that H.R.1 (economic stimulus law) has been signed, there are several real estate specific provisions that may affect you. I've attached the spec sheet from the Washington REALTORS so you can have a look for yourself.

Give me a call if you have any questions.

Meet Dave Jones...LIVE!

I've been uploading videos to my website for the past several months and just realized I can also do this on my blog so here goes!

Should We Refinance our Mortgage

I'm including an information sheet that describes some behind-the-scenes actions by Freddie Mac and Fannie Mae provided by Cherie Kesti. You might find this interesting.

But the question remains: "how much money can we save if we refinance now?" You need to know your monthly payment (principal and interest only) and the cost of money. What's that?

OK, here are figures for the cost of borrowing money you can use. At 6% the cost to borrow $1,000 for 30 years is $6.00; at 5% the cost is $5.37; at 4.5% the cost is $5.07; at 6.5% it's $6.32; and at 7% the cost is $6.65.

For example, the prinicipal and interest only cost of borrowing $100,000 at 6% is $600.00 (100 X $6.00). Rates today are around 5% so the principal and interest cost to borrow $100,000 at 5% is $537.00 (100 X $5.37).

There will be costs to refinance and you won't know those until you've spoken with a loan officer. For argument's sake, let's say the cost to refinance is $5,000 and the interest rate of your mortgage is 6% and you want to refinance $100,000. Therefore, the principal and interest portion of your monthly payment is $600.00. If the rate on your refinance is 5%, then your monthly principal and interest payment portion would be $537.00, saving you $63.00 per month in principal and interest or $756.00 per year.

Lastly, divide the refinance cost ($5,000) by your annual savings ($756) to determine the pay-back period. In our example this would be a bit over six years. So if you were planning to stay in your home for the next six years, it may make good financial sense to refinance.

If you're considering refinancing, please consult with your accountant who will be able to help confirm your math and recommend whether this may be a good decision in the overall scheme of your financial situation.

Fed May Step in to Help Homeowners

In reading the news summary this morning, the Fed may be ready to flex its muscles (read leverage) to help homeowners who are 60 days delinquent on their mortgage payments.

Here's what the Fed could do: lower the mortgage amount; lower the interest rate; or lengthen the payment time.

This would occur when troubled asset relief program (TARP) funds have been provided to institutions holding those delinquent mortgages.

Kitsap County Market Statistics for February 1, 2009

This past week there were 38 new real estate purchase offers written. Of those 38 contracts, 11 were for either short-sales or foreclosed homes.

I believe the above information is very important so I'll continue to "break out" these numbers over the next several months or until something else changes in our markets.

The Silverdale market had four homes change to a "pending" status but of those four, one was a short-sale and one was a "make us an offer" situation.

However, with those four pendings, Silverdale's absorption rate dropped almost in half to 19.3 weeks of inventory available for sale.

County-wide, the absorption rate dropped about eight percent to 60.2 weeks of inventory for sale.

Although the drop in absorption rates is good news, this is happening because not very many new homes are being listed and the number of purchase contracts being written has remained fairly stable (mid-30s each week).