Recently in Financing Category

What is the maximum Seller Concession for a Buyer's Loan?

Well, that depends, and it's always best to consult with the Buyer's lender before your offer includes promises your lender can't keep. When you are negotiating for a buyer, keep the following in mind.

Type of Loan	LTC/CLTV	Maximum Seller Concession Allowed
Conventional Primary and 2nd Homes	Over 90%	3%
Conventional Primary and 2nd Homes	75-89.99%	6%
Conventional Primary and 2nd Homes	Under 75%	9%
Conventional Non-Owner Occupied	N/A	2%
FHA	N/A	6%
VA	N/A	4% Maximum for prepaid closing costs, funding fee & debt payoff

This information provided by Eileen Burke with Cobalt Mortgage in Seattle, a preferred lender.

Eileen also counsels that Seller concessions can not be paid in cash to the buyer, so if you are leaving money on the table, apply it to future home owner's insurance, property taxes, or *HOA dues.

We are in a very unusual market. For listings where the Sellers properly prepare the home and agree to list at a price the market recognizes as current, we are seeing very short market times and multiple offers. The other half of the market consists of homes that were priced too high originally and/or the Sellers are unwilling to lower them. It's this homes that the seller is often willing to assist the buyer in making the loan more attractive and sometimes just possible.

Representing a Buyer involves getting the best deal possible and this is one avenue to explore.

Representing a Seller and suggesting a Seller contribution in a counter offer may just be the ingredient that makes for a happy transaction.

Previously published on Active Rain

Newspapers and television keep talking about the housing recovery. Hello? The housing industry has recovered. If you've ever had a serious disease, major surgery, or been significantly injured in an accident, you long for recovery. You endure physical therapy, medication, and rehabilitation processes to, one day, get back to being your old self. But then one day you are old, and you've always been yourself, but you know that where you are now is not the recovery you hoped for. The housing market went through a period of drug induced euphoria between 2002 and 2007. Place the credit or blame where ever you want. I call it financing on crack. Investors wanted to make big money fast. Wall Street was doing anything to get bundles of loans they could then sell to investors. Lenders were going to 70% ratios (the norm always was, and is again 30%) on stated income (not anymore) just to make loans because Wall Street was buying. And the American public just had to buy a bigger and better home because next week it would be worth 50% or 80% or 100% more and we would have money to spend, spend, spend. Granted: Not everyone thought his way. But in retrospect, it should be obvious to all that the values reached in the real estate industry were not sustainable. They were not true values. In Seattle we have drifted back to the prices of 2005, and we linger at this point. That seems like a good thing to me. Prices on well kept homes are inching up. Prices on fixers are still trickling down. Why down? Because there is little upside for most DIYers in this market. The "it's fast money, honey" days are over for now. Look at any graph and you will see that we are in a stable market. For example the second and third graphs on the SeattleBubble Website show the decline percentage from the peak in many areas of the country has stopped. In Seattle, the price of homes sold over the past 36 months has changed only 3%, while in the 20 months before that it fell 23%. Lenders are being extra cautious to only make loans to people who can

• Pay them back
• Avoid default in the event of unexpected expenses
• Demonstrate financial stability

This is the market. The recovery is here and we are living it. Throw away that crack pipe, you're not addicted any more. Buying a home is not for everyone. Only do so if you want to, and if you are able to. You don't need to wait for verification from all of your friends. You don't need to wait for the newspaper to tell you that it is okay. You only need to see value, and move forward.

Also published on Seattle Real Estate with Glenn and Marjie

With historically low interest rates many homeowners are refinancing their mortgages.  If you are considering a refinance there are many reasons to consider a 15 year fixed instead of the 30 year fixed that most people opt for.  I recently saw this article on Walletpop.com that did a great job of summarizing 3 good reasons...

1. Pay your home off faster. To paraphrase Gordon Gekko, SPEED is good. Especially when it comes to paying your house off. As much heat as home ownership takes, the fact is, if you are ever in a position to pay off your mortgage, you nearly eliminate housing expenses, something that never happens when you rent. By definition, a 15-year mortgage positions you to own your home free and clear in half the time (of course, taxes and insurance don't go away). Just in time, actually, for many homeowners to pay for college tuition!

2. Free yourself from the market cycles. On a 30-year mortgage, nearly the first half of the loan is amortized in a way that you're primarily paying interest, so very little equity is being built up. As a result, many 30-year mortgage borrowers look to market appreciation for the only increase in equity they can count on during the first half of the life of their loan. And we all know that market appreciation simply isn't something we can rely on, especially these days.

With a 15-year loan, you pay your principal off more quickly. As a result, you build equity up consistently and without relying on the market to increase the value of your home.

3. Save tens, even hundreds of thousands of dollars.According to the National Association of Realtors, the median sales price for all existing American homes in August 2010 was $178,600. Finance that for 30 years at 4.375%, and you'll pay $140,338 in interest over the 30 years. Elect for a 15-year mortgage at 3.75% instead? You'll pay only $55,187 in interest over the life of the loan -- 60% less interest, a savings of over $85,000!

Something to consider if your equity position and monhtly income allows.

Fannie Mae has a new site designed to help homeowners. It's called Know Your Options and here's what Fannie Mae has to say about it:

If you are struggling with your mortgage payments or facing foreclosure, you may feel overwhelmed and frustrated. Many homeowners simply don't know what to do or where to go for assistance, and they feel too helpless to take action.

In Seattle, at the present time, less than 10% of homeowners are in one phase or another of the foreclosure process. In outlying areas the figure is higher. While our problem is not as serious as the problems in Arizona, Nevada, Florida and a few other states, this is a concern for us all on a neighborhood level. If you know of someone who is having a problem with a home modification loan, a short sale, foreclosure, or just currently having trouble making their house payment, this site is a good place to send them. It's easy to navigate and will clarify issues that are often hard to grasp.