By Jason Kotar
RISMEDIA, May 27, 2008-With all of the changes and restrictions that have been introduced by Fannie Mae, Freddie Mac and the Mortgage Insurance companies, the one type of loan program that has not been affected is VA loans. As a matter of fact, VA loans now, with few exceptions, are THE 100-percent financing option available for purchasing a home.
Over the past few years, the proliferation of loan programs available often negated the value of a VA loan. The days of “liar loans” are over. Buyer required documentation of income and assets, increased focus on credit scores and declining market policies implemented by Fannie and Freddie have brought VA loans back into vogue. The VA loan program has stayed the course with its loan requirements. Let’s review some of them.
First, eligibility is generally limited to active and retired military personnel, as well as those who served in the National Guard or Reserves. There are other differences from traditional loan programs. The veteran must plan on occupying the home. The types of properties are limited to certain types: one to four family units; condominiums; town houses; and certain manufactured homes. Full documentation is required on all loans. All income must be proven with W-2’s or, if self employed, with tax returns. Employment records must be verified. Simply put, the VA wants to know that the loan that they are guaranteeing has a higher probability of being repaid. There are two other key differences between conventional loans and VA loans; a Certificate of Eligibility and a VA assigned appraisal. Basically, the VA wants to insure that the loan applicant meets their criteria for being considered for a loan and that the appraisal will fairly reflect its reasonable market value.
There are numerous advantages for a veteran to have a VA loan. With few exceptions, no down payment will be required. In addition, no mortgage insurance premiums will be levied. The buyer has a right to prepay without penalties or to assume an existing mortgage. Seller concessions of up to 4 percent are allowed. Loan amounts are allowed up to $417,000 with high cost areas like Alaska, Hawaii, etc. allowed to $625,500. The applicant is only required to prove assets needed for closing. For disabled veterans, property taxes may be reduced as well as VA funding fees.
The VA does not specifically look at an applicants credit score. They do take a hard look at the last two years of payment history. Any judgments and tax liens must be paid as well as any accounts out for collection.
Bankruptcies have to be two years out of discharge. The VA does require a “funding fee” of 2 to 3 percent to be charged for VA loans but, this amount may be rolled into the loan.
One final point, be careful of a VA loan applicant attempting to purchase a foreclosed (short sale) home owned by a Lender. The VA will not approve any repairs to a home prior to the sale to be paid for by the veteran.
I have attempted to cover the main features of the VA loan program. While there are significant differences from traditional loans, the elapsed time to get loans approved and closed, are comparable. The key is to work with mortgage professionals who understand the requirements. With some obvious benefits to your client, ask if they are a veteran during your initial conversation. It may make the difference in their qualifying for a mortgage.
Central Pacific HomeLoans and First Hawaiian Bank dropped their rates for a 30-year, fixed-rate mortgage by a quarter-point this week as the national average for mortgages dipped.
First Hawaiian Bank offered the 30-year loan for 5.5 percent with 2 points, down from 5.75 percent with 1.875 points last week, according to data from the Honolulu Board of Realtors.
Central Pacific HomeLoans also offered a rate of 5.5 percent for the 30-year, fixed-rate loan, with 1.875 points, down from 5.75 percent and 1.75 points last week.
American Savings Bank and Bank of Hawaii each dropped an eighth of a point to 5.625 down from 5.75 percent last week. American Savings Bank charged 1.75 points on its rate, while Bank of Hawaii offered 1.625 points.
Nationally, the 30-year mortgage averaged 5.98 percent with an average 0.5 point, down from 6.01 percent last week, and down from 6.37 percent last year, according to mortgage giant Freddie Mac.
"Interest rates for fixed-rate mortgages fell slightly this week on news of both weaker industrial production in April and consumer sentiment falling in May to its lowest level since June 1980," said Frank Nothaft, Freddie Mac vice president and chief economist.
The latest read on the national housing market shows home values are continuing to drop at historic rates.
The Washington-based Office of Federal Housing Enterprise Oversight reported Thursday that home prices fell 3.1 percent nationwide in the first quarter compared with the same period last year. The index also fell 1.7 percent from fourth-quarter 2007 to first-quarter 2008, the largest quarterly drop on record.
Prices fell in 43 states, with California and Nevada showing the biggest declines, at more than 10 percent.
Hawaii prices held steady, down just 0.3 percent in the past 12 months.
"The large overhang of real estate inventory awaiting sale continues to force price declines in many areas, but particularly in places that had seen very sharp appreciation," Patrick Lawler, the agency's chief economist, said in a prepared statement.
The government index is calculated by tracking mortgage loans of up to $417,000 that are bought or backed by the government-sponsored mortgage finance companies Fannie Mae and Freddie Mac. Legislation enacted in February temporarily raised the limit to $729,750 in high-cost areas.
Many of my clients get overwhelmed with all the real estate statistics they are bombarded with. Some from newspapers, some from agents, some from brokerages, some from the boards, some from friends and family....and more other sources...where do you go, how do you untangle the numbers, what do they mean to your property...!!!
Here are some points to consider as you are reading statistics..!
1- Who supplied you with the statistics - believe it or not statistics are the easiest form of mathematical numbers that can be tweaked to lean one way or another. Be safe and read statistics only from the Board of realtors - not news paper, not brokerages...etc
2- Be aware of the terms used - newspaper are notorious of saying for example "Real Estate sales are down 30%" - which could be true, however "sales" usually means number of properties sold "not" prices. Hence most of readers think the prices are crashing when they are not. There are many cases when prices are stable or going up or slightly down and number of sales are significantly down. Don't panic and sell your house - ask the question and make sure you read between the line and under the headlines of newspapers.
3- If you got information about some price statistics (or number of sales) and has some comparisons. You will need to make sure it is comparing to same month of different years (usually using current month and year) - Why- Because real estate market is seasonal; hence when comparing you need to make sure the comparisons are correctly referenced. As an example you can’t compare Feb 2005 with July 2006, the correct way is to compare July 2005 with July 2006- this is called month-to- month comparisons. Anther questions rises – How about what happened already between Jan 2006 and July 2006, can this be compared to Jan2005 and July 2005 – the answer is Yes – this what is called Year-to-date comparisons. Year-to-date comparisons give you a good sense of the market trend for that specific period, these kind of comparisons are very good indication how the market is doing only in a coherent trend market not a transitional market (up or down like 2006). In a transitional market month-to-month and year-to-date comparisons ends up to be whacked out – what is the solution – well, you need now to see what the trend is and compare the last few months in the same year – Ouch- what happened to the seasonal comparisons you told us about Fadi- well correct you can still do year-to-date or month-to-month comparisons however it is not enough you need to know where the market is going and what it is doing in the transitional market, hence understands the trend and keep in mind the seasonal effect, AND check point 4.
4- Beware of all island statistics, I strongly believe it is only a guide line what the over all market and economy is doing. But will never tell you what you should list your house for and what you will offer for a house – WHY – well the answer is simple and in tow folds. First fold in a normal market (balanced like these days 2007, not 2006, 2005, 2004..you knowJ) appreciation and depreciation, neighborhoods, constructions, beaches, views, locations, new laws…etc all these don’t apply to all neighborhoods…The second fold gets more complicated, it is whe market is in a steep dive(Early 90’s - price or number of sales), Rocketing upward (2001-2005), or in transition (2006) in these markets all island statistics is worse, because it is usually a pocket market is taking place, what applies to Kailua, doesn’t apply to Makiki, not to Makaha, not to Kaneohe (next door to Kailua), not pearl city – why – because in transition or upward and down spiral markets each neighborhoods will be in different stage and either appreciating more or depreciating more than the others and might have way more inventory or way less inventory…etc – What to do – look at neighborhood statistics and compare the same neighborhood to its self. BEST –cut to the chase- solution is to do a IMMEADIATE localized comparison analysis to your property with full statistics – not many folks can do that – call me or email me I can do that for you – there is a reason why my listings sell – and my buyers end up buying – don’t you just love my Advertisement here ..:-)
5- Where do I go for statistics to give me an idea where the real estate market is going: BOARD OF REALTORS, in this case it is Honolulu board of realtors. Where do I go to get statistics and comparisons for my immediate localized property/neighborhood – well just call me 808-428-3659 or email me fadihawaii@aol.com. Why use Honolulu board of realtors, or board of realtors for that matter – well – they are the unbiased and neutral resource you will ever get. Why use Fadi for the localized comparisons, because no matter how accurate all island statistics are it will never be able to tell you the dynamics around your property that will decide the price for your house, you need someone like Fadi to do the statistics and comparison analysis. Also all island – board of realtor statistics - will never be able to know if there is a brand new school coming up, Golf course, new laws, military spending, and more in specific area that will make the neighborhood more attractive or less attractive.
6- MSIR rule – If you want to forget all about statistics then at least watch what the following statistical parameters are doing : A- Median sale prices. B-Number of Sales. C-Interest Rates. If you master these for your own neighborhood and state interest rates, you will have a good idea what market is doing for your property. NOW wait a minute Fadi- how about other criteria’s and parameters that decides the market….like inventory….days on market(DOM)….—Well—Yes these are also important but all of those are side effects and are embedded in the MSIR rule. Think about it, and if not convinced call me 808-428-3659.
7- Which one should I follow average numbers or median number. PLEASE don’t look at average numbers. ALWAYS watch and look for Median numbers. Average numbers are always whacked-yes just like in Sopranos- Why are they whacked? - Well because if there are 10 properties sold for $500,000 and one property sold for $4 Million. Then watch the average…Oh man it is around $818,000...well is this correct representation of the 10 houses sold for $500,000? Does this mean the next $500,000 house should list their house for $818,000 – NO – you can see how one property with completely different value through off the real value of this neighborhood. Ok what is in for Median value for this example is $500,000 (wow what a surprise.:-)) it is a good representation of this neighborhood. If you don’t know how to get the median call me 808-428-3659 I can walk you through it.
Hawaii ranked 36th in the nation in home foreclosures rating in April, according to the latest report from RealtyTrac.
Last month, Hawaii ranked 45th.
Hawaii had 210 foreclosure filings in April, up 75 percent from March and up 218 percent from April 2007. There were 120 foreclosure filings last month and 66 foreclosures in April 2007.
Hawaii had a foreclosure rate of one filing for every 2,381 households, said the latest survey by California-based real estate research firm RealtyTrac.
Nevada had the highest foreclosure rate in the country again with one filing for every 146 households.
California had the second highest foreclosure rate, with one in every 204 households receiving a filing in April. Arizona ranked third, with one filing for every 224 households.
California had the highest number of foreclosures at 64,683.
Nationwide there were 243,353 foreclosure filings for the month, up 4 percent over March and up nearly 65 percent from April 2007, according to the report.
During April, sales of 256 single-family homes and 384 condominiums were reported through the Board’s MLS, decreases of 25.1 percent for single-family homes and 27.1 percent for condominiums, compared to the same month last year.
This brings total single family home sales on Oahu to 929 for the first four months of 2008, a decrease of 23.0 percent over the same time period one year ago. Total condominium sales through April were 1,421, a 24.7 percent decrease from last year.
The median prices paid for Oahu properties in the first four months of 2008 were $625,000 and $329,000, respectively, a decrease of 0.8 percent for single-family homes from the same time period in 2007 and an increase of 2.2 percent for condominiums.
The total dollar sales volume generated in the housing market for the first four months of this year was $1.311 billion, a decrease of 21.2 percent, or $352 million, compared to the $1.663 billion produced one year ago.
There is 3.9% decrease in Single Family Homes Median Sales Price from last year, while a 0.6% increase in Condominium Median Sales Price in April 2008 compared to the same month last year.
There is a 25.1% decrease in Single Family Homes Sales Volume from last year; and, a 27.1% decrease in Condominium Sales Volume in April 2008 compared to the same month last year.
“Median prices are holding pretty firm in the current Oahu housing market, at $639,000 and $327,000, in April,” sad Dana Chandler, President of the Honolulu Board of REALTORS®. “This contrasts with the significant losses of home values in Mainland cities tied mostly to the continuing credit crunch. We continue to be fortunate that this is still a stable environment for both buyers and sellers.”
“April’s data shows that there is enough demand, albeit lower than last year, to maintain our residential price levels,” added Harvey Shapiro, Research Economist at the Board of REALTORS®. “The U.S. Federal Reserve cut overnight interest rates this week by only 25 basis points, but this is seen as a positive move for the housing industry.”
*Source: The Honolulu Board of REALTORS®
Home and condominium sales on Oahu fell sharply in April but prices remained fairly steady.
Last month, 256 single-family homes were sold, a drop of 25 percent from the same month last year. The median sales price was $639,000, down 3.9 percent from April 2007 but up nearly 2 percent from March, the Honolulu Board of Realtors said Thursday.
The board said 384 Oahu condominiums were sold, 27 percent fewer than a year ago. The median sale price of $327,000 was up slightly from $325,000 a year ago and only 0.7 percent lower than in March.
Through the first four months of 2008, the board said the median price for single-family homes was $625,000, down 0.8 percent from the same period last year, and $329,000 for condos, up 2.2 percent from last year.
But the drop in sales volume is clearly being felt in commissions, fees and other financial activity related to real estate. The board said the total sales volume generated in the first four months from the resale of residential property was $1.31 billion, down 21 percent or $352 million from a year ago.
The Hawaii Senate has killed a measure that would have established online filing of real estate records with the state Bureau of Conveyances.
House Bill 2302 had the support of the Hawaii Association of Realtors, Starwood Vacation Ownership, the Escrow Association of Hawaii, a unit of the Hawaii Government Employees Association, the Hawaii Land Title Association, the Commission to Promote Uniform Legislation, and influential House Democrats, who introduced the measure.
"Technology has advanced and electronic communications are increasingly replacing paper documents," wrote the bill's authors. "The law of real property will need to transition to accommodate this change. The efficiency of real estate markets makes this imminently necessary."
Laura Thielen, chairwoman of the Department of Land and Natural Resources, which oversees the Bureau of Conveyances, in a statement Thursday expressed disappointment that Senate leaders refused to consider the bill.
"Given their past impatience with the department and mandate to make changes it seems peculiar that the Senate is now requiring Hawaii residents to wait another year before they can access the bureau online," Thielen said.
Thielen said the DLNR will continue to develop an online system and make any improvements it can without waiting for legislative action.
No reason was given for HB 2302 being held without action in a Senate committee, but the DLNR had opposed a Senate amendment that would have required a feasibility study on the implementation and impact of an electronic filing system.
Hawaii is the only state with a single statewide recording office. In most states, real estate records are handled by county government.
The Bureau of Conveyances has recently been subject to legislative investigation over charges of mismanagement and inefficiency that has led to a backlog in recording land transactions.
Title Information | Contact Us | How Escrow Works | Waikiki Schools | Oahu Real Estate listings | Mililani Real Estate | Lanikai Real Estate | Kekaiholo TV Ad | Kaimalie TV Ad | Professional Photos | kailua | Oahu Real Estate History - Pt 2 | Kailua Elementary Schools | Testimonials | Kailua Private Schools | Trump Tower Waikiki | Buyers Promotion | Links Directory | Hawaii Real Estate | Kailua Real Estate | Oahu Real Estate Tips 1 | Kaneohe Real Estate - Community Info | hawaiiKai | Hawaii Relocation | Hawaii Homes For Sale | Hawaii Homes | Kailua Public Schools | Kahala Real Estate | Hawaii Mortgages | Oahu Information | Oahu Real Estate History | Oahu Real Estate Tips2 | Oahu Homes For Sale | Kaneohe Real Estate | Waikiki Real Estate | Search for Properties | Hawaii Kai Real Estate | TV Advertisments | Life On Oahu | Factors In Picking A Home | Ewa Beach Real Estate - Community Info | Ocean Pointe Info | Military Moving To Hawaii | Oahu Real Estate Statistics | Honolulu Real Estate | Oahu Schools | Oahu Colleges | Oahu Private Schools | Windward schools | Central Schools | Honolulu Schools | Kailua History | Seller Promotions | Oahu Real Estate | Ritz-Carlton Maui | Green Today Initiative | First Time Buyers | Download Adobe Acrobat | News | Real Estate Glossary | Our Featured Homes | Home | Applying for a Loan | The Bi-Weekly Mortgage | Your Buying Power | Writing the Offer | Mold in the Home | Site Map | Bi-weekly Pmt Calc | Fixed Rate Mtg Calc | Mortgage Points Calc | Mtg Tax Savings Calc | ARM vs Fixed Rate Calc | Required Income Calc | Mortgage Payoff Calc | Refi Interest Savings Calc | Mortgage Calculators | Interest Only Calc | Request Industry Info | Staging Your Home | Types of Listing Contracts | The Listing Contract | The Back Yard | What's Earnest Money? | The Kitchen | Ethics in Real Estate | Real Estate Blog
Copyright © 2008 REO LLCPortions Copyright © 2008 a la mode, inc.Another XSite by a la mode, inc. | Admin Login| Terms of Use| Site MapAll rate, payment, and area information are estimates and approximations only.
