The Federal Reserve (the Fed), led by Jerome Powell will decide tomorrow (4/10/24) whether they will lower interest rates further to help boost the economy. Trouble for the Fed though, is the economy, at least with the numbers they are reporting, seems to be doing quite well for itself! You may not feel that way, and most of the people I have conversations with, don’t feel that way. But, how ya’ gonna fight City Hall“?  Powell, and the rest of the Fed members, have to weigh how much they may spur inflation if they do lower rates.

I am not sure that is the point…the following is how I feel about the situation. While there is a chance that lower rates could spark more inflation and make everything cost more, there is a feeling among many that the current inflation is affecting households in a negative fashion. Meaning, people are noticing it costs way more right now for groceries, gas, clothing…the items we all need on a daily basis…not to mention housing! These people would welcome some relief with lower interest rates. One of the reasons people are paying so much for housing is lack of inventory. Everyone who has a 2,3 4 or even 5% home mortgage, doesn’t want to sell their home and then find another with a higher interest rate! If the Fed begins to cut rates, this could open up the housing market. We will see what tomorrow brings and make our plans for the future based on the outcome.

If you would like to discuss this further or how tomorrow’s fed decision might affect you, call Michael Mitchell at Mitchell Mortgage 530-406-2200, 707-259-1117 or Mobile at 707-337-5970!

New conforming loan amounts rise and are live today!

Conforming loan amounts rise for 2024 and they went up more than expected! Now, if necessary, a purchaser or refinancer, can borrow up to $766,550 on a single family residence and still remain below Jumbo loan status! 2-units have been raised to $981,500, 3-units $1,186,350 and 4-units are now $1,474,400. In high cost areas, the (Hi balance, or Super conforming) limits can go up to $1,149,825! Make sure you call Mitchell Mortgage to find out if your county is in the upper range or just the standard conforming limit. Although these loans can not be submitted to Fannie Mae and Freddie Mac at this time, lenders are getting a jump on the news and taking loans now that they will keep and then deliver after the first of the year. That means there is no waiting to take advantage of the new conforming loan amounts rise! Call Michael Mitchell at 530-406-2200, 707-259-1117 or 707-337-5970 Cell. We will answer all your questions and get started on that new loan today!

Help is on the way for 2-4 Unit buyers!

2-4 Units LTV reach 95 percent!  Owner occupied 2-4 Unit residences have been stuck at lower LTV’s (loan to value) for as long as I can remember. That is changing as of November 18th of 2023. At that time, Fannie Mae will accept loans for primary residence 2-4 unit properties at an LTV of 95%! Strictly investment properties will not be eligible for this change.  This is a great opportunity to own a home and and collect rents on the other units.  Recently, most lenders, in guessing what the new conforming loan limits will be, raised the maximum up to $960,300 for 2 units, $1,160,750  for 3 units and $1,442,600 for 4 units!  As soon as November 18th rolls around, you can use those for the new 95% LTV when you purchase a 2-4 unit property and you live in at least one of the units.  This may be the best way to afford your new home in the sense that the other units can pay some of, if not all of your mortgage!  Help is on the way for 2-4 Unit buyers!  Give Michael E. Mitchell a call at 530-406-2200, 707-259-1117 or cell at 707-337-5970 and find out how this new information can help you!

Lenders are not waiting until the new conforming loan limits are official, as one has bumped up the conforming limit on single family residences to $750,000! That means you could borrow $23,800 more right now than you could at any other time this year and still have a conforming loan. That will come in handy to anyone buying right now as conforming rates, compared to hi balance conforming rates are usually about a half of a point lower. That’s a lot of savings over the life of your new loan! When one lender takes the jump, usually, others follow quickly, so you will probably be able to expect this windfall from multiple lenders within a couple of weeks. Fannie Mae and Freddie Mac typically announce the updated conforming loan limits on 11/28 and then take about two weeks to update their system to accept loans using the new maximum. The fact that buyers and refinancers can take advantage now, almost two months before the official change, is going to make some people very happy! Two unit, three unit and four unit properties have also been raised! To get more information on these numbers and to find out how you can take advantage of this change right now, call Michael E. Mitchell at Mitchell Mortgage. 530-406-2200 and 707-337-5970 mobile!

The Fed (Federal Reserve) has kept rates the same in their latest meeting. No up, no down…so what does this mean for you and me? Well, since they at least hinted that they might raise rates again at their next meeting, then the obvious action to take is do your purchasing or refinancing now, not later! Remember, because of where interest rates are currently, you have less competition for that home you are dreaming about. Less competition means you might get seller concessions for closing costs, or maybe a lower purchase price…or maybe…BOTH! This of course only applies to the folks that have to do something now. Over the long run, I think we will see lower rates. The ones who buy now, can take advantage of a refinance if this scenario proves out. At any rate, “rates” are what they are for now! If you want to discuss how all this might affect your current situation, then call Michael E. Mitchell at Mitchell Mortgage today and use my cell phone of 707-337-5970. Good luck!

Thinking Points!  What goes up, must come down!  The reverse is true as well.  Remember the Covid-19 years?  Mortgage rates hit all-time lows and stayed that way longer than they should have.  This created the need to raise rates rapidly to cool down the economy.  It should have never come to that, but it seems no matter who is in charge of the Federal Reserve, they all seem to make the same mistake of never anticipating an end to a cycle…therefore, low rates for too long and then high rates for too long!  The cycle we are in now, high rates, will most likely continue until well past the obvious signs that the economy has slowed down, if history has anything to say about it.  Sooooo, here is my suggestion.  If you are purchasing, and can afford it, buydown the interest rate with discount points.  A one percent discount point will, in almost all cases, drop your mortgage rate by 1/4 percent.  Usually it takes around five years to make that back in the form of lower payments verses the money output of the discount point.  For example:  a $500,000 loan on a $625,000 primary residence property purchase today would be 7.25% for a 30 year fixed rate at zero points.  If you were to pay one discount point ($5,000.00) then your mortgage rate would drop to 7.00%.  The difference is $84.78.  That means after approximately 59 months (just under five years) you will have made that discount point back.  Also, make sure you tell your tax-preparer because you most likely will receive a deduction for paying any points on a mortgage purchase loan!  Mortgage rates change daily and sometimes several times a day.  This could also benefit you if you happen to hit a day when the spread in interest rate for that discount point is larger than normal.  That means your one discount point will get you 3/8’s lower interest rate!  In those cases, you will make that discount point back, in the above scenario, in around 39 months with the same tax advantage!  If rates come down after you have purchased your home, then hallelujah, you can refinance to a lower rate.  This is a lot to take in if you don’t do it everyday, so that’s where Mitchell Mortgage comes in to help guide you.  Call Michael E. Mitchell at 530-406-2200 or 707-337-5970 cell, and we will get you in that new home with financing that works for your pocketbook!

Pre-qualifying for a home loan is always a smart thing to do, but today’s real estate market makes it even more important. Pre-qualifying for a real estate loan in a buyer’s market is wise, but not as necessary, because you are likely to be the only person making an offer on the home. But today, the real estate market has low inventory, which makes it a seller’s market. This means you are likely to be compared to several other offers on the home you want to buy, and if you don’t have your pre-qualification letter handy, yourchances of winning a bidding war are diminished! Don’t make the mistake of waiting until the last minute. Make sure you are considered at the same time as all the other offers! Call Mitchell Mortgage today at 530-406-2200 Work or 707-337-5970. We will get you Pre-qualified for that dream home right away!

Make sure you put out your flag for Veterans Day today!  As the old saying goes, “If you love freedom, thank a veteran!”.  Veterans Day is the perfect time to bring out Charles M. Province’s poem, “It is the Soldier,”:  It is the Soldier, not the minister, Who has given us freedom of religion. It is the Soldier, not the reporter, Who has given us freedom of the press.  It is the Soldier, not the poet, Who has given us freedom of speech.  It is the Soldier, not the campus organizer, Who has given us freedom to protest.  It is the Soldier, not the lawyer, Who has given us the right to a fair trial.  It is the Soldier, not the politician, Who has given us the right to vote.  It is the Soldier who salutes the flag, Who serves beneath the flag, And whose coffin is draped by the flag, Who allows the protester to burn the flag.  

While you are at it, it would be a good time to donate to your favorite veterans charity!  Mitchell Mortgage thanks all Veterans, past and present for their contributions to this great nation!

Veterans can take advantage of VA financing at Mitchell Mortgage as well.  Up to to 100% of the value of the home can be borrowed in purchase circumstances, with no mortgage insurance!  Call Michael E. Mitchell at 530-406-2200 or 707-259-1117 cell, to discuss Veterans Options for purchase or refinance.

 

 

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!

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!