'30-Year mortgage rates fall below 4% for the first time'

For the first time ever, 30-year mortgage rates fall below 4%.  Not to be confused with 15year fixed-rates which hit a 50 year low of 3.26% a few weeks ago, the 30-year mortgages dropped below 4% for the first time in history.  The interest rate loan fell to 3.94% this week, the lowest rate since Freddie Mac began tracking it.

These record low mortgage rates can result in considerable savings for homeowners.  To show you the savings, take the 30-year interest rate from a few months ago, 4.6%, the difference between the 4.6% and the new 3.94% would decrease your monthly payment by $40 for every $100,000 borrowed.  Total your payments over the life of the loan and you would save almost $14,000 for every $100,000 borrowed. 

These drastic savings are why NOW is the most affordable homes have ever been.  If you look at it this way, for every 1% drop in interest rates, it will decrease your monthly payment by almost 10%.  Average that 10% drop over 30 years and that's a substantial savings.  Take the example above.  If you bought a home for $300,000, you would most likely put $50,000 or more down on the house, leaving a $250,000 mortgage.  If you could like in todays rate over the previous 4.6% your savings in payment over the 30 year life of your mortgage would total nearly $35,000.


If you are a homeowner or have been thinking of buying a home, and have questions about interest rates and mortgages, send me an email or give me a call.

Matt Ullrich
303.941.2452.mobile
303.415.2251.office
ullrich@boulderco.com
RE/MAX of Boulder, INC

'Green Living: Saving Energy This Season'

Fall weather is upon us and we find ourselves switching between the heater and the AC in the same day, driving up the costs of our utility bills.  Think green this fall and winter, save the earth and save your money.  Winter heating costs have risen in the last few years making it more enticing to go green and be energy efficient this year. 

You may all ready be thinking about going green to save some money, but how do I do get there?  Well let me tell you.  The first idea is to shop around electric providers.  Compare the rate per kwh and see if you could save money by switching companies.  The second idea if you have some money to spend is to upgrade your heating source.  Yes, there is a large upfront cost, but for most upgrades you will see the return on your investment in a few short years. Upgrades could be things around the home like installing energy efficient windows or upgrading to an energy efficient water heater.  You may even receive a tax credit for installing these upgrades.

Don't have the money to upgrade, don't sweat it.  There are easy tricks that are cheap to save some money on your bill.  On a cool night, walk through your house and find if there are and drafts coming from the windows, doors, or attic.  Then take a trip to your favorite local hardware store and pick up some supplies for a quick do it yourself fix.  You'll like yourself in January. 
You know how cold it gets during the winter, so while the days are still reaching the high 80's, look into fixing up some things around the home.  It will help keep some cash in your wallet.

Matt Ullrich
303.941.2452.cell
303.415.2251.office
ullrich@boulderco.com
RE/MAX of Boulder, INC

Funny real estate news: 'Having trouble selling your home right now? Make it more enticing'

A homeowner in Glenview, Ill is having problems getting her house to sell, so to sweeten the deal she bought $1,000 worth of booze to entice prospective buyers to take a second look at the home and emphasize the nearby nightlife of the town.  Full Story here. 

My Opinion: This certainly is an interesting incentive to make buyers think twice.  But there are a lot of homes on the market so how do you make yours more noticeable?  The first and most important rule is to have your home prices right.  That does not mean what the homeowner thinks it is worth, but what the market is saying people will pay for it.  Especially in this market when home values are hurting, prospective buyers are looking for VALUE in a home, which comes to my second point.  The second most important rule is if you are serious about selling your home, it needs to be presentable.  I'm not saying it needs to be staged but it will give you a huge advantage over the home down the street.  In today's market, especially, homebuyers are looking for that value and are looking for a home that they feel comfortable in and are ready to move into.  Lets say there are two homes on the market, both are priced correctly but home A is clean and staged, and B has 3 children and the house is a wreck...which home will sell?  -Getting back to the homeowner in Glenview, there are a lot of ways to make your home more vibrant to buyers, the $1,000 of liquor is a great idea.  Think of similar incentives to help your home be worth its value!


Matt Ullrich
303.415.2251.office
303.941.2452.mobile
ullrich@boulderco.com
RE/MAX of Boulder

'Increased Lending, Short Sales Necessary to Reduce High REO Inventories'

This has been a big question around the real estate world, what do we do with all of the real estate owned (REO) properties held by the government?  i.e. foreclosures.  After crunching the numbers and looking at the economics of the situation the solution is to continue to lend money and approve short sales.  (short sales are homes that are owned or in the process of being owned by the government/banks, they sell the home below market value to cover losses and get someone who can afford the home into the property).    The reasons behind continuing to loan and approve short sales are the negative affects of foreclosures.  When homes are foreclosed it is not just the homeowner that is hurt, but the entire community, the housing market, and the nation's economy.  By keeping the homes off the market in occupied the economy will have a better chance of improving.



Matt Ullrich
303.415.2251.office
303.941.2452.mobile
ullrich@boulderco.com
RE/MAX of Boulder

'A New Threat to Home Prices'

CNNMoney reports there is a new threat to home prices.  The threat is coming from a culmination of all financial issues facing Washington.  Between the growing national debt, the harrowing financial markets, and the weaning economic market, signs point to growing threat against home prices.  The issue: home mortgages will feel pressure on prices in high-end markets.  New loan limits are coming into play and these limits will mostly affect high-end markets and is said to affect 8% of the total U.S. housing market. 

You may be thinking, this will not affect me, this is only about high-end homes, wrong! If expensive homes stop selling, then prices for the houses under them will feel the pressure too.  As this issue will fall from high-end to low-end there is threat to the housing market.  Experts believe that President Obama will propose a major housing-related stimulus in the coming weeks as part of a broader economic plan.  May it be cutting conforming loans or creating more hurdles for 'jumbo' loans.

*related article here, CNNMONEY.com

Matt Ullrich
303.941.2452.cell
303.415.2251.office
ullrich@boulderco.com
RE/MAX of Boulder, INC

'The Way Appraisals are Sinking Real Estate Deals'

If you have sold a house recently in a depressed market than you are certainly aware of the current issue of appraisals.  In a down market home values drop and people sell their home below market value, appraisals are supposed to show/prove the worth/value of your home but if the homes around you are selling below market, this could mean trouble for you.  It is easy logic, but in order for an appraisal to take place someone comes out and inspects your home then, here's the kicker, they compare it to homes in the area that have recently sold that are similar to your home (comparables).  The problem is these comparables have been selling below market value in order to get the sale done.  The consequence is that your home is now taking a beating because the 'comparables', because they were sold below market value, now quality by association, your home will be appraised at a lower value.

What is going on here is a never ending cycle of bringing down home values.  The reason this keeps happening is before an offer is made a buyer gets an appraisal on the home and the appraisal comes in at $500,000 but the homeowner knows it is actually valued at $600,000.  The buyer knows that market says it is only worth $500,000 and will not make an offer higher than the appraisal.  This starts the cycle.  Now that the home dropped in value by $100,000, the next home will be brought down in value, and so on and so forth.  Currently there is no end to the cycle, the only way I see this ending is if buyers start paying over the appraised value or there is a second regulation in place to 'appraise' homes without bringing down the home values.

*for a similar article visit INMAN.com


Matt Ullrich
303.941.2452.cell
303.415.2251.office
ullrich@boulderco.com
RE/MAX of Boulder

'Mortgage Applications up 6.3% Last Week'

Last week mortgage applications rose 6.3% as many homeowners filed purchase applications or refinanced.  This rise in mortgage applications and be traced back to the record-low interest rates today.  With such low rates people are refinancing and saving big money.

The interest rates for a 30-yr fixed mortgage dropped from 4.23% to 4.17% and the average rate for a 15-yr fixed mortgage dropped from 3.41% to 3.4%.


Matt Ullrich
303.941.2452.cell
303.415.2251.office
ullrich@boulderco.com
RE/MAX of Boulder