Hood Canal Real Estate – 12 Ways to Get the Lowest Mortgage Rate!

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If you’re considering refinancing your mortgage, you’re likely to be looking for the lowest possible mortgagerefinance rate. Before you start shopping around for the lowest rates, you should establish your objectives and prepare your finances to improve your chances of qualifying for the lowest interest rate.
“First, figure out the best loan product to meet your financial goals, and then you can start looking for the most competitive mortgage rates,” says Michael Jablonski, executive vice president and retail production manager for BB&T Mortgage in Wilson, North Carolina.
To get the lowest mortgage refinance rates, first prepare your finances and then shop for interest rates with certain strategies in mind. Here are 12 ways to ensure you lock in the lowest refinance rate possible:

No.1: Raise your credit score

"Typically, a credit score of 740 or higher puts borrowers in the best tier for a conventional loan program," says Michael Smith, first vice president – business development manager for mortgage lending for California Bank and Trust in San Diego.
Most lenders require a minimum credit score of 620 to 640, but you'll pay a higher mortgage rate for conventional loans unless your score is 740 or above. However, some portfolio lenders set their own guidelines.

No. 2: Lower your debt

Paying bills on time and paying down your credit card balance can reduce your debt-to-income ratio (DTI), which improves your chances of qualifying for a low mortgage rate, says Jablonski.
"Don't buy a new car, make other major purchases or fill out multiple credit applications before you refinance, because all of those actions can hurt your credit profile," says Smith.
Even if you have a high credit score, you may be denied a refinance altogether or subjected to higher interest rates if your DTI ratio is too high, says Jablonski.

No. 3: Increase your home equity

Remember that your credit scores and the loan-to-value ratio of your property could have a much bigger impact on your refinance rate than a slight shift in average mortgage rates, says Malcolm Hollensteiner, director of retail lending sales for TD Bank in Vienna, Virginia.
"Both a lower-than-average credit score and a high loan-to-value can lead to a more expensive interest rate," he says.
If you are underwater on your mortgage, a Home Affordable Refinance Program (HARP) loan may be your best option.

No. 4: Organize your financial documentation

You should get your credit reports from all three bureaus to make sure there are no mistakes that need correcting before you apply for a refinance, says Smith.
A refinance application typically requires two years of tax returns with W2s, two recent pay stubs, and your two most recent bank and investment statements.
"Gathering these materials ahead of time can expedite the loan process and prevent you from paying extra for an extension of your rate lock," says Smith.

No. 5: Save cash for closing costs

Closing costs average about 2 percent of the loan amount.
"You can pay cash for the closing costs or, if you have enough equity, you can roll these costs into your new loan," says Hollensteiner. "Another option that some lenders offer is to pay a higher interest rate for a lender credit to cover those costs."

Shop smart for your refinance

Once your preparations are complete, you can begin to shop around for the refinance that works best for you.

No. 6: Start online

Deborah Ames Naylor, executive vice president of Pentagon Federal Credit Union in Alexandria, Virginia, recommends starting online with a refinance calculator that estimates your monthly payments at various loan terms.
"A shorter term loan will have a lower interest rate than a 30-year fixed-rate loan, but the payment will be higher because you're paying it off faster," says Naylor. "It's important to decide what payment you're comfortable making before you see a lender, because that payment could be much less than the payment you qualify for."

No. 7: Decide on a loan term

Barry Habib, founder and CEO of MBS Highway in New York City, says the loan term you choose needs to be made in the context of your other financial obligations and plans.
"If you have $30,000 in credit card debt and no savings for college, you may want to go for a 30-year loan to keep the payments as low as possible," says Habib. "Someone else may want a shorter term to build equity faster while another borrower might want a longer loan so they can keep their tax deduction as long as possible."

No. 8: Talk to multiple lenders

Once you’ve decided on your loan term ,it’s time to research loan products available from a credit union, a regional or community bank, a direct lender and a national bank to find out what special programs they offer, says Naylor.
"Many lenders offer 'portfolio loans,' ones they keep in-house instead of selling on the secondary market," she says. "They can be more flexible with those loans and offer special promotions."
Instead of choosing a lender solely based on current mortgage rates, Russ Anderson, senior vice president and a centralized sales executive with Bank of America in Los Angeles, says you need to find a lender you can trust. "People get too wrapped up in the rate rather than finding someone who will communicate with them," he says. "You need to find someone you trust, who will be engaged in your family's financial situation."

No. 9: Review all your loan options

Lenders can discuss various loan products when you interview them.
"There's a broad product mix of conventional financing, government-backed programs like FHA loans and special refinancing programs through the Making Home Affordable program," says Anderson. "A good lender can present the pros and cons of each of these programs in the context of your individual finances."

No. 10: Decide how you will finance your refinance

You’ll also need to decide how to pay for your refinance. Closing costs and lender fees can be paid at closing, wrapped into your loan balance or you can opt for a "no-cost" refinance.
"A no-cost refinance means that your lender will pay the fees and you'll pay a slightly higher interest rate of one-eighth to one-fourth percent," says Habib.
HSH.com's refinance calculator can help you decide the best way to finance your refinance.

No. 11: Compare mortgage rates and fees

Advertised mortgage rates are sometimes based on paying points, so you need to make sure you compare loans with zero points or the same number of points.
"It's important to shop for the same loan on the same day to get a true comparison of mortgage rates, because mortgage rates change every day," says Smith. "You need to explain to each loan officer all the criteria for your refinance, not just ask 'what's today's rate on a $200,000 loan?' You should also ask about loan processing times."
Shopping by APR can be confusing, since different lender fees and policies can affect the outcome. It is possible for two loans to have identical rates and fees and different APRs. Conversely, two loans could have the same APR but different interest rates. Because of this, it is usually better for you to focus instead on the two most important components of APR: interest rate and fees.
The most important component of your refinance will generally be the interest rate, so you'll of course want to pay attention to that. Fees and closing costs matter, but whether you want or need to pay them will depend upon your situation. There are times when paying costs to obtain the lowest possible rate can make sense and times when it does not.

No. 12: Know when to lock-in your rate

Once you’ve finalized your loan decision you should consult your lender about when to lock-in your rate.
"Processing times for different lenders can range from 30 to 45 days to more than 90 days," says Smith. "Typically, lenders will do a 30- or 45-day rate lock, so you should be consulting with your lender to determine the appropriate day to lock your loan. If you have to extend the lock or re-lock your loan, that will likely cost you more money."
While shopping around for a refinance may take a little longer than refinancing with your current lender, the rewards can last as long as your loan.

Hood Canal Real Estate, Hood Canal Properties, Hood Canal Homes, Hood Canal Lots, http://www.hoodcanalliving.com

Hood Canal Real Estate – Interest Rate Drop

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Interest Rates Move Lower:  The markets continue to suggest that there is indecision as to the future of market recovery. The stock market has roared back after a brief 10% correction and hit new historical highs this week. While those highs are incremental increases one would normally think that the bond markets would suffer pushing interest rates higher. The services and experts I watch have been suggesting that there is another rally pending in the bond market which would push rates lower. That looked like a good prediction as rates held ground during the stock market rally and moved back toward 18 month lows after a small move higher last week. The move lower in rates was largely caused by the Friday jobs report. While the numbers looked positive, the details suggest many of the jobs were created in low income sectors and included some holiday temp positions. The overall job numbers continue to suggest a tepid recovery with stagnant wages. This is holding down confidence in the economy by most market observers even though the stock market increases reflect strength among larger companies. Until the job market recovery gains in strength, the recovery in Real Estate will be muted. For now interest rates look to remain low and possibly move lower.

Industry News

"Every day you may make progress." Winston Churchill. The labor market has made great strides this year, as the economy has averaged 229,000 new jobs per month in 2014, the fastest pace since 1999. However, key details in the latest report show more progress is needed.
The October Jobs Report showed that 214,000 jobs were created, below the 235,000 expected. Of importance to note: a big percentage of the gains were concentrated in retailers, restaurants and bars—all of which typically increase ahead of the holidays.

On the surface, there was good news as the Unemployment Rate fell to 5.8 percent from 5.9 percent, reaching its lowest rate since July 2008. However, wage growth remains tepid, as hourly earnings rose by only 3 cents, with the year-over-year increase at just 2 percent. And the Labor Force Participation Rate (LFPR) came in at 62.8 percent, still near the lows last seen in 1978. The LFPR measures the proportion of working-age Americans who have a job or are looking for one, and it should be moving higher in a recovery.

In housing news, research firm CoreLogic reported that home prices, including distressed sales, rose at an annual pace of 5.6 percent in September. This was the slowest annual rate since August 2012, and well below the 11.8 percent gain recorded this past February. Housing price gains are definitely trending lower after their meteoric highs last year.

The bottom line is that home loan rates remain near some of their best levels of the year, and now is a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.

Real Estate Miscellaneous Stats

Northwest MLS Report For October: The new report summarizing October activity shows year-over-year gains in new listings, pending sales, closed sales and prices.
Northwest MLS members reported pending sales last month up nearly 6.9 percent from twelve months ago.  New listings that are coming on the market are receiving a substantially higher than normal sales activity in many market areas. More central markets are still experiencing a large backlog of buyers looking for homes while some outlying markets have seen a slowdown in competition for listings.
Although the pace of sales has slowed somewhat since June, agent managers say demand is steady, with about half of all new listings selling in the first 30 days. Last month,   pending sales of single family homes and condominiums outpaced the number of new listings. A comparison of total inventory shows a drop of nearly 3.7 percent from a year ago. At month end there were 23,501 active listings across 21 counties in the MLS database. That's nearly 900 fewer listings than the year-ago total of 24,391.
Statewide inventory at the end of October stood at 3.24 months, a slight drop from the previous month's figure of 3.7 months. In King County there is less than two months of supply, well below the four-to-six month level that many industry analysts use as a gauge of a balanced market. An exception to that is Snohomish county which had gains in inventory. As the selection expands, buyers who have been on the sidelines are being lured back into the market, according to MLS director John Deely, principal managing broker at Coldwell Banker Bain in Seattle. Deely observed  sellers are now seeing brisk activity and even multiple offers after adjusting their prices after they had languished on the market. This suggests buyers have become more sensitive to price and are watching inventory closely.
Closed sales were over 7500 for October. Prices on those sales were up 7 percent, rising from an area-wide median price of $271,000 to $290,000. Four counties reported double-digit price hikes, led by San Juan County, where prices jumped 18.4 percent, and Snohomish County, with a 17.4 percent year-over-year gain.
Brokers consensus is it is vital to property price listings under current conditions where buyer’s have been wary of recent price increases. Many buyers have to be selective and not enter in to bidding wars as student debt and down payment hurdles cap their ability to compete. Attention on listings suggests buyers are watching for level of interest before making offers hoping to stay out of competitive situations. This often does not work as others seem to do the same thing.
Northwest MLS brokers also commented on distressed sales and upticks in remodeling and new construction.
Local brokers point to the promise of increases in new construction by local builders, a positive economic forecast for the region, and more homeowners surfacing from being "under water" and now able to sell due to increase in appreciation. This creates conditions for 2015  gearing up to be as active if not more so than 2014.
Case Shiller August Report Indicates Changing Market :  Most recent housing numbers support what many agents have experienced over the last few months. Distressed sales are down, listings are up, listings are taking longer to sell, competition for listings has dropped and buyers are just not as urgent. As a result home values are increasing more slowly, Case Shiller reports that values in King, Snohomish and Pierce Counties were flat from July to August and were up 6.6% from one year prior. Some of the hottest markets slowed more dramatically such as major southern California cities and Las Vegas. While local price increases have slowed they are still robust. Most are concerned that continued price increases of 6% will slow the market because of affordability factors. Slowing Seattle area price increases have continued for the last 6 months and are likely to continue. Home prices in the area are now equal to August 2006 levels and are still 11% below peak values. Real Estate continues to be held back by slow job growth, slow wage growth, lack of equity for many potential move up buyers and lack of adequate first time buyers.

September Home Sales Surge in September:   Pending Home Sales in Western Washington surge 13% in September from the same time last year according to the NAR. Listings are also up so inventory only declined 1.2%. Market analysts suggest that there will be a leveling off but not a slow period  in our market activity as long as pricing increases stay at recent lower levels and interest rates do not rise. Our markets are currently out performing national readings. Closed sales for September also were up from last year by 4.6%. King County median value is up 9.5% from last year but, much of this could be due to the strength in the luxury market. OB Jacobi, president of Windermere Real Estate, noted luxury home sales in the Greater Seattle area have been very strong, with agents reporting stiff competition in certain segments of the market, especially for homes over $2 million. “I attribute this to Seattle’s economic boom, which is attracting an increasing number of high-paying, executive level professionals and international interest,” he remarked. Market experts stress the importance of not overvaluing a listing as buyers are informed about fair market pricing. King County supply is at 2.3 months and Snohomish County is at 2.8. International buyers, primarily from Asia, are a big part of local sales mostly on the Eastside. Home prices in Seattle 12% from 1 year ago to $517,000.00. Median prices in Bellevue is up 6.3% to $605,000.00 and Snohomish County was up 8.4% to $330,000.00. Stephen O’Conner with the UW Runstad Real Estate school expects the market to remain hot through the end of the year but says many buyers are still watching on the sidelines

Hood Canal Real Estate, Hood Canal Properties, Hood Canal Homes, Hood Canal Lots, http://www.hoodcanalliving.com