James Wirth

It was a day at the beach for interest rates today after a modest improvement yesterday afternoon. Here's what we're seeing for a minimum credit score of 720:

4.875% Rate / 5.026% APR

Loan amount: $417,000
Down payment/equity: 20%
Loan Program: 30 Year Fixed

The past couple of days have brought consecutive price improvements landing us back under 5% after a few weeks of climbing rates. Those who continued to float when we were at 4.5%, this is a second chance to lock-in a rate with a 4 in it.

There is certainly no lack of news to comment on and yet I have remained relatively quiet and will yet delay a bit longer while the details become sufficiently clear. But here are a few considerations:

Yes, higher loan amounts through Fannie, Freddie, and FHA are on their way. If they use the same median home price as they did when deciding the higher loan amounts as part of the original housing stimulus bill passed last year, we'll be back up to $567,500. At this point though, it's "to be determined."

The tax credit was capped at $8,000, available for first time home buyers and is no longer repayable. I've heard conflicting reports of whether it will be retroactive to 2008 as to the repayability and the amount. Most reports say it's only for purchases in 2009 but another report indicated that an amended return could be filed for 2008.

So while all of that gets worked out, I'm holding my tongue.

Well, sort of.

Now I'm holding it.

Ok, now.

Aw heck. Mai-Tai anyone?

Mortgage rates have continued to resist any reduction beyond their current levels. In fact, the reason they have improved over the past couple of days has seemingly nothing to do with the new stimulus; rather the stock market has worsened on concerns over global economies and traders have instead invested in bonds. Other factors are at work as well, such as successful treasury auctions of late but the big mover is the stock market.

--James Wirth

The National Association of Realtors recently made a statement from President Charles McMillan, entitled:

Housing Stimulus and Stabilization Will Help Economic Recovery

(That's an active link if you'd like to view the statement, but the title summarizes it well-enough)

In a separate letter to Realtors that was forwarded to me and became the basis for this post (thanks Louise), NAR reiterated that the steps being taken through TARP, TALP, the new Treasury plan and the Housing Economic Stimulus Bill are all positive moves that will help the current crisis.

Here's my struggle with this -- it seems like an awfully expensive price-tag for what we're getting. That's a bold statement I know, but let me explain... no, there's too much... let me sum up:

$ Tax Credit: I was disappointed it wasn't bumped up to $15K and made available to every purchaser because it would have gotten people off of the fence where the $7,500-wait-$8,000 hasn't done much. It's nice that it's not repayable anymore and an extra $500 -- you know, wahoo and everything -- but I didn't see too many people really go crazy over it in the first place.

$ Bigger loans for cheaper: I am appreciative of the higher loan limits for our area but there are very few examples I've seen where buyers bought at the higher limit but couldn't at the lower.

$ Foreclosure mitigation makes sense at some level but it's only tip of the default iceberg. They're putting $50B toward hundreds of billions in pending foreclosures... How much of an impact does fixing (or stalling) 20% or less of an issue have on fixing the overall issue? Does our economy really support

Here's the burning question: is the potential benefit worth the cost or are we spending a dime to make a nickel? And how do we make sure we don't just spend the nickel, leaving the repayment of the dime to the next couple of generations?

Ok, that was two questions...

Let me bottom-line this: I understand focusing on security over consumerism; it's just a lot of money for my kids and their kids to be paying back and putting the effort on the effect instead of the cause.

I hope it's worth it.

Here's the irony: ignore the tax credit, the foreclosure mitigation, the higher loan limits. Take just about every element of the points of the new bill that are immediately focused on housing, just take them completely out of the picture, and it's still a really, REALLY great time to buy a home...

Almost seems like the need for this much "Stimulus" is, well, much ado about not that much... IMHO...

Thanks for reading! --James Wirth

Not me, apparently... my apologies for the lack of postings in the past couple of weeks.

Quite the buzz in the news today and I was tempted to rush out with a blog entry on the new tax benefit and how it will work. Except one thing:

WE DON'T REALLY KNOW YET! Stay tuned for more on that soon.

Here's the rate today:

5% Rate / 5.152% APR

P&I payment: $2,238.55
Loan amount: $417,000
Equity: 20% / Credit Score: 740
Loan Program: 30 Year Fixed

As always, thanks for reading! --James Wirth

No, really. This one's to the point.

4.75 that is. That's what the rate was on January 27th, 2009. Here's what it looks like:

4.75% Rate / 4.899% APR

P&I payment: $2,175.27
Loan amount: $417,000
Down payment/equity: 20%
Loan Program: 30 Year Fixed

Rates as of 01/27/09, subject to change without notice, etc. etc.

Mortgage rates had climbed back into the 5s for a bit there, gave us all a fright that everyone had missed the boat. But we're back a bit now, hopefully we'll take advantage of these historic lows before they climb again!

Thanks for reading! --James Wirth

A close family member of mine (whose identity will remain undisclosed for their own protection) has jokingly proclaimed that it's acceptable to say something, let's say, non-positive, about someone as long as you follow it up with "bless their hearts" (thus canceling out any potentially inflammatory nature of the preceding remark).

Over time this concept has been expounded upon to indicate that any time an individual or party is referenced and the comment followed up with "bless their heart(s)" that the listeners would be aware of the inferred inflammation, even if it was left unspoken.

I received numerous calls and emails yesterday in reference to an article posted over the weekend by the Seattle Times. The article carried a curious-if-somewhat misleading title, that read:

Stimulus package could cut "jumbo'' loan rates

Here's the article: http://seattletimes.nwsource.com/html/realestate/2008637847_loanlimits180.html. At a glance, the article seemed to infer that the conforming loan ceiling of $417K may be raised to $729,750.

Bless their hearts.

Upon closer examination we can see that what it appears to be referring to is the "Conforming Jumbo" or "Agency Jumbo" loan ceiling that was created by the Economic Stimulus Act of 2008. The maximum loan amount at the time was the lesser of $729,950 or 125% of the median home price for the area, and varied from MSA to MSA (that's "Metropolitan Statistical Area").

For example, here in the Greater Seattle Area (Seattle in the his-ouse!) the ceiling was $567,500. This 2nd tier was made permanent later in the year and was lowered to be te lesser of 115% of the area median home price or . Our ceiling for 2009 is $506K. But the article didn't exactly spell that out.

Bless their hearts.

Here's the original Act if you're looking for a light read: http://www.govtrack.us/congress/billtext.xpd?bill=h110-5140

In the article's defense, it did reference the "Jumbo Conforming" limits being considered, separately from the "Conforming" limit established at $417K.

It also mentioned that the maximum loan amount of $729,950 was for New York.

However, the devil's in the details and the devil was barely more than a footnote. One had to be super sleutherific to define how this change might impact the local market specifically.

Sheep's clothing and all that.

So here's my suggestion and not just for the Seattle Times -- dare I be so bold to request this generally of all media?

Oh yes. I dare.

Maybe, just maybe, the article heading could encapsulate the main point of the article. Yeah? Something like:

"Conforming Jumbo" rates may come down

The Sky's not falling but "Conforming Jumbo" rates may

And in the body of the article, they may consider clearly differentiating between "Conforming" and "Conforming Jubmo" loans and maybe even disclose the difference between the maximum loan ceiling and what it is for the local area. Just my two cents, the Timeis is free to give me change back if they wish.

Of course, this philosophy may explain why my blogs are not exactly spilling over with comments...

As far as the prospect of lower rates on Conforming Jumbo loans (for our area loans up to $506K) and the possibility of having higher limits, that would be most welcome!

If anyone at the Seattle Times does happen upon this posting (I'm not holding my breath but one can never be certain), I welcome any comments. However, it's possible they may continue on to a different blog, all the while thinking:

"That James Wirth... bless his heart."

As always, thanks for reading! --James Wirth