Bill Kamboukos

Home Sales On The Rise Again:

Four Months Of Improvement

In just recently released numbers, sales of existing homes rose in July for the fourth consecutive month, lending support to some economists who argue a recovery is near.

The figures indicate that sales of previously owned single-family homes were up 7.2% compared with June and 5% from July 2008, from a report from The National Association of Realtors. This was the largest monthly gain on record for existing-home sales since the National Association of Realtors started tracking these numbers in 1999.

According to Lawrence Yun, the National Association of Realtors chief economist, "The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales."

The numbers indicate that July home sales hit an annualized rate of 5.24 million proprieties, marking the first breach of the 5 million annualized rate mark since last September, when they hit 5.1 million. Since then, they have stayed in a very narrow range, bouncing between January's low of 4.49 million and October's high of 4.94 million.

This performance in July far exceeded expected numbers from many real estate experts that had forecast sales of 5 million.

This is of course positive news for the housing market moving forward. Of course lower home prices, historically low interest rates; the summer buying season and the $8,000 home buyer tax credit are all factors that are helping contribute to increased home sales.

As we move forward there are still many factors to be worked out to lead to a housing recovery and economic recovery, however the four months of rising home sales are certainly positive signs. With the current eight thousand dollar tax credit coming to an end soon, anecdotal evidence suggests that these numbers may continue to stay strong as we approach November 30^th as well. As always we will provide updates as they become available.

For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com

Credit Scores and Down Payments for Mortgage Loans

In today's mortgage and real estate market, two of the most common questions we receive are, what type of credit score do I need to purchase or refinance a home. And what type of down payment do I need to purchase a home. The answer is, it depends on the type of loan you can obtain, what type of property it is and whether you plan on living in the home or renting it, among other things. As always, this information is subject to change, but here is a brief synopsis of where we sit in the current market.

Credit Scores: First, one of the most important issues to consider is your credit score. We have written articles in the past which can be read on our blog about keeping good credit and improving your credit score and will provide more information in the near future as the scoring models change. But, the credit score you need will depend upon the type of loan you obtain.

The minimum score you will realistically be able to obtain financing with in this market will be a 620 fico score. With a 620 credit score you will be able to obtain an FHA loan, a Veterans Administration (if you are active or retired military) or even a conventional loan. However, if you score is in this range, it will probably make sense to not obtain a conventional loan as it will be pricier for a fico in that range.

Instead if you are looking to obtain a conventional loan, to obtain the most ideal rates you will now need a 740 fico, with good rates still available, but not the lowest available at 740, 720, 700, 680, and 660 and down to a 620 fico.

Down Payments: Next you must consider down payments for the type of loan you are looking for. The lowest down payment available is currently, nothing, as Veterans Administration loans do not require any down payment. These loans are of course for current or retired military with proper qualification however and only can be used for the home you will live in, no investment or second homes.

Then there is FHA mortgages which now have a minimum down payment of 3.5%. There are no restrictions on who can obtain an FHA loan and these types of loan even allow for someone not living in the home to help the buyer qualify, such as a parent co-signing for a child. However, these loans are again only for primary residences and no investment or second homes.

Finally, there are conventional loans. The minimum down payment for conventional loans will be 5% for a primary residence and even that is getting more and more difficult with 10% now becoming the norm. However, you can also finance second homes and investment properties as well through conventional loans, with a minimum of a 20% down payment required.

These are just some of the many factors to consider when purchasing or refinancing a home, but this should provide answers to two of the most common questions in today's market.

For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com

New Mortgage Regulations -

Add Protections But Could Delay Closings

These new rules came into place at the end of July and may lead to longer closing times in the coming months. Specifically they require lenders to:

• Provide a good faith estimate (GFE) of a mortgage's full cost within three business days of receiving an application.

• Not charge any fees until consumers receive the GFE. The only fee lenders can ask for upfront is a "reasonable fee" for obtaining the consumer's credit history.

• Wait seven business days after providing the initial loan costs before closing the loan.

• Offer a new estimate of the loan costs three business days before the closing date if the original annual percentage rate (APR) increases by more than one-eighth of a percentage point.

These new regulations are in effect now and as mentioned you may begin to see these lengthening the time frame to complete purchase and refinance transactions in the coming months. How much impact they have on increased transparency is yet to be seen, but we will provide updates on the effectiveness of these new regulations in the coming month. What we do know for now, is that one additional piece of regulation has been added to the mortgage lending process with the goal of protecting consumers, but the only guarantee at the moment is a lengthier loan process.

For more information on mortgage programs, rates and information for potential and current homeowners, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com

Home Prices Finally Stabilizing? -

Case-Shiller Index Points To It

After nearly three years of declining home prices, the value of U.S. homes finally grew on a monthly basis in May for the first time in nearly three years, according to a 20-city index released this past week.

The index showed a month-over-month increase of 0.5%, according to the report from financial data company Standard & Poor's and economists Case-Shiller. This was the first increase in the monthly index since July 2006.

Annually, home prices in the 20 cities have fallen 17.1%, but it was the second straight month that the year-over-year decline lessened.

According, to David Blitzer, chairman of the index committee S&P, "This could be an indication that home price declines are finally stabilizing."

However, Robert Shiller, the Yale economist who co-founded the index, says that there has been a decrease in foreclosure sales and that this shows up in the index statistics as a plus for home prices. But added that foreclosures could increase again in the near furture, but the future does look encouraging. In fact, with recent efforts of the government, confidence is moving higher and we are beginning to see signs of recovery in other areas as well.

On the other hand, Paul Bishop, the managing director of research for the National Association of Realtors, was glad to see the upturn but did not want to overemphasize the results of a single month, saying the economy is not out of the woods yet.

"Job losses could continue after the recession ends," he said. "That's where the economy intersects with consumers in the most tangible way. Until consumers have some level of confidence that the economy is improving, many will be reluctant to buy."

Where prices are heading from here is yet to be seen. However, with the price of homes in the current market, coupled with government intervention for modification for existing homeowners, tax credits for new homeowners and historically low interest rates, buyer activity has increased. More homeowners are now attempting to remain in their homes and new home buyers are trying to purchase homes. It will of course be very interesting to see where June and July's numbers come out when released. As always as more information becomes available we will pass along the information and analysis.

For more information on mortgage programs, rates and information for potential and current homeowners, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com

Where are mortgage rates going? -

Interest Rates One Percent Less Than Last Year

This past year has seen interest rates, on a national average, fall a full one percent from their levels last year, on 30 year fixed mortgages. It was not too long ago that any interest rate below 6% was seen as a good long term option. But as we saw the government step in and move interest rates below 6% and then below 5% and now as we sit in the low 5's on a national average, sentiment toward what a good interest rate is has changed.

Since the government stepped in to help aid mortgage rates move down at the beginning of the year many current and potential homeowners have had their minds set on obtaining elusive interest rates such as 4.5% or 4%. Now, that is not to say that it is not a good thing to try and obtain a great interest rate, but as we sit now already half way through the year and half way through the Federal Reserve's purchase program, we sit at a crossroads for long term interest rates.

We do not if we will ever get back to interest rate levels below 5% that we touched for a short time or even more so 4.5% or 4%. However, with the government intervention on a large scale set to end at the end of the calendar year, we may 6% rates before we get anywhere near 4% again.

What that means is that perhaps it is time to evaluate locking into a long term fixed rate before the end of the year if you already have not. If you plan on spending any considerable amount of time in your home, now may be the time to lock into what is still a historically low interest rate and stop chasing a rate that may never come to pass. At the end of the day, it may be your best option for at least one certainty going forward, in an uncertain market. As always, we will provide updates as we head into the latter part of the year and interest rates may see some added pressure.

For more information on mortgage programs, rates and information for potential and current homeowners, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com