Is a reverse mortgage right for you? Are you 62 or older with low income and high equity in your home? If so, a reverse mortgage just might be the right tool for your household budget. A reverse mortgage will allow you to stay in your home as long as you live (providing you keep your property taxes and property insurance current). You also won’t have to make that pesky mortgage payment every month! With home prices still high, this would be the best time to get your home appraised, as, the higher the appraisal, the more equity you can use for cash, if that is necessary. The first move should be to give Michael Mitchell a call at 530-406-2200 or 707-337-5970 and talk about your current and long term financial needs. If a reverse mortgage is the answer, then now is the time to get started!
Concessions from seller can help!
With fewer buyers vying for the same home, you are likely to be the only one making an offer on the home your prefer. So with this lack of competition, comes, in most cases, the ability to negotiate concessions from the seller, or even your real estate agent! For instance, if you were to purchase a home in Woodland for $650,000.00 and put 20% down, your loan amount would be $520,000.00. Today’s 30 year fixed rate at no points would be in the mid sixes, but lets use 6.5% for the sample. If the seller agrees to concessions of $11,835.00 that would buy down your rate to 4.50% for the first year and 5.50% for the second year, then fix at 6.5% for the remaining 28 years. If rates go down in that first two year period, or shortly after the two year period is over, then you can always refinance to the lower rate! If rates go higher, you at least know you will never be higher than 6.50%! The first two year period will see you making $11,835.00 less in payments – that is quite the savings! If you have questions for yourself or a friend regarding the use of concessions in a real estate purchase transaction, give Michael Mitchell a call at 503-406-2200, 707-259-1117, or 707-337-5970 Cell!
A Napa Realtor Tale
Spent the day yesterday with a Napa realtor. He told a story of a couple he represented that wanted to buy a home in Napa during the recent time period where multiple offers were the norm. In a nutshell, and against his advice, the couple he represented did not give their final and best offer for the home they really wanted. Consequently, they did not win the bidding war for their dream house, even though they could have afforded it. So they ended up buying a home in another close by community. But guess what, to this day, they lament not going all out for the home they really wanted. So the lesson is, “See home you must have…Give best offer if you must!” Certainly that applies to markets like the multiple offer market we were in, but does it apply now? Yes, the only difference is, in today’s market, you probably have some negotiation tools to use. Just don’t go so far to upset the seller so that they would never sell the home to you no matter what you offer! Make your dream home happen while you are the only buyer. If interest rates go down after you purchase, then you can refinance to the lower rate. Call Michael Mitchell at 530-406-2200, 707-259-1117 or 707-337-5970 cell to pre-qualify today!
Federal Reserve Update
Yesterday I told you the Federal Reserve had raised short term interest rates, but long term rates (mostly affected by treasury bonds) had remained little changed. Well, they caught up today! In most cases rates went up anywhere from 1/8th to 1/4 of a point. That still keeps them in the low 6’s, but not as comfortable as yesterday. Seems the Fed not only spooked the stock market, but the bond market too. The fed’s stated goal is to reign in inflation, so buckle up everybody…they are dedicated. It probably makes sense to start considering 7 year fixed and 10 year fixed (both amortized over 30 years) to keep payments down. If you have questions about that or want scenarios run, give Michael Mitchell a call at 530-406-2200, 707-259-1117 or 707-337-5970 cell!
Fed raises short term rates but long term rates stay steady!
The Federal Reserve raised short term interest rates again today…another .75% of a point. Although this usually puts pressure on long term rates (30 year fixed, etc) those rates basically stayed the same today as they change when the 10 yr treasury bond changes. In a nutshell, if bonds are purchased by big investors, then long term rates usually fall. If bonds are sold by these same investors, long term rates will rise. As of today, a no point 30 year fixed rate up to $715,000.00 would be in the low 6’s for an interest rate at no points. We will see what the future brings. In the meantime, people still need to buy, sell and refinance real estate, so give Michael Mitchell a call at 530-406-2200, 707-259-1117 or 707-337-5970 Cell, to discuss what financing path will work best for your current needs!
Pre-qualify!
Don’t forget to pre-qualify before you talk to your realtor! Realtors want to make sure they are working with a buyer in the correct price range. If you don’t have a pre-qualify letter, they will want you to get one before you shop for new homes. Call Michael Mitchell today and I will get you that letter today! 530-406-2200, 707-259-1117 or 707-337-5970 Cell!
Tip on Buying Your Dream Home
If you have found that dream home, make an offer now! When rates have risen, like they have recently, it takes a lot of your competition for that perfect home out of the picture. So in a lot of cases, you will be the only one negotiating with the seller! That is a lot better than having five other potential buyers bidding for your dream house! If rates go down, after you have claimed your new home, then you can refinance. If rates go up, you can be satisfied that you received the lowest rate when you purchased your home. So go for it! Claim that dream home today! Your realtor will still want to see that you are pre-qualified to buy that home, so call Michael Mitchell at 530-406-2200, 707-259-1117 or 707-337-5970 cell, mornings evenings, after hours and weekends!
Buy downs Helocs Etc.
The Federal Reserve is on a mission to curb inflation. To do that, they have been raising short term interest rates. This in turn puts pressure on long term rates to go up…which they have. So how to combat this in a world where most homeowners have current interest rates in the 4% arena and a good share have less then 3%? Well lenders are coming up with programs to try and help get buyers into homes, and refinance prospects who need options other than getting rid of their wonderful current low rate, even if they need cash out. For buyers this could mean Two-One Buydown. This means you would start with an interest rate, two percentage points less than the current market rate for the first year of the loan. Year two would be one percent below the rate when you received the initial loan, and years 3 though 30 would be at whatever current rates was when you received the initial loan. The thinking is, while you receive payment relief the first couple of years, if rates go down, you could refinance into a lower rate for the total length of the new loan. For cash out refinance borrowers who don’t want to give up their current low rate but need some money now, Home Equity Lines of Credit (Heloc, usually adjustable rate) are becoming popular as well as straight second mortgages ( fixed rate term and must take all the money at one time). For explanation of these options, give Michael Mitchell a call at 530-406-2200, 707-259-1117 or 707-337-5970 cell!
So you know!
Rates started a little higher today, but if you have 20% down, your conforming 30 year fixed interest rate would be 5.99% at zero points today. Your APR will be higher depending on your loan amount. For more scenarios please give Michael Mitchell a call at 530-406-2200, 707-259-1117 or 707-337-5970 cell!
Conforming loan limit now $715,000!
A couple (not all) lenders have estimated what the new conforming loan limits for 2023 will be, and are jumping the gun on offering them to the public! Mitchell Mortgage can get you the new conforming limit right now! It is $715,000.00! Call now to see if this helps your current needs for financing, Michael Mitchell 530-406-2200 or 707-259-1117 or 707-337-5970 cell.
