Today, I want to briefly discuss a topic that will be of great importance for homeowners for years to come: interest rates.

Many people don't realize how lucky we are to have rates as low as they currently are! Over the last few years, we've been within half a percent of all-time historic lows. This is not sustainable, and you certainly can't expect it to last for much longer. In fact, the Fed has hinted many times that they plan to raise rates in the near future. When they do, rates will likely rise to as high as 6%, if not more!

When I first got started in real estate, rates were around 8% and no one complained or even thought twice about it. Going further back, rates were as high as 16% in the 1980s, and there was no down-payment assistance! Obviously then, if rates rise to 6% it won't be the end of the world. However, those few points will greatly affect your affordability.

If you plan on making a purchase, you need to act soon! If interest rates rise even .5%, you lose 5% of your purchasing power! If you were shopping for a home for $300,000, now you can only afford a home for $285,000. Meanwhile, there's no sign that appreciation will slow down anytime soon, so you'll lose even more purchasing power! In short, now is the time to get more home for less money, period. Waiting is only going to cost you!

If you have any questions about where rates are heading, or if you need real estate assistance of any kind, don't hesitate to give me a call or shoot me an email. I would love to hear from you!

It's time yet again for another brief update on the state of the Sacramento real estate market! Let's jump right in.

Historically, April is when the inventory of homes in our region (and sales activity) starts to rise more sharply than the rise that comes with the busy first quarter. Indeed, both are happening right now as we head into the second quarter. Additionally, the prices of homes, especially those below $700k, continue to show healthy appreciation and interest rates remain very attractive, as they're close to all-time lows!

We could dive into the numbers all day, but we don't think it would be very helpful. Rather, what's important is for you to get a specific & detailed analysis done on your property. You only have so long to really make the most of an active market, as activity starts to die off at the end of summer and the beginning of fall.

It's crucial to keep an eye on the supply of inventory relative to demand. In the $200K-$300K range, we currently have only 1.2 months, while the $300K-$400K range is only 1.5 months! Remember, anything under 3 months of supply is an extremely favorable market to sellers - so there's no better time to list your home if you want to get top dollar and sell quickly. If you price your home well, get it in good condition, and market it well, your home sale will be a success!

If you have any real estate questions, or if you would like our assistance making the most of the market, give us a call or shoot us a quick email. We would love to help you!

 Guest Post by Jeff Compton of Comstock Mortgage

Once your loan application is filled out and sent to the lender for review, the first thing they will look for is your ability to pay back the loan you are requesting. My team and I have a streamlined loan process to help you get your ducks in a row prior to this review. A grand slam loan package is in perfect order and answers all the important questions up front. We know what the lenders are looking for, based on long-term relationships with them and extensive knowledge of guidelines for a multitude of loan programs that are available today.

What is the lender looking for when they review the loan application?

The lender wants to know about your personal financial picture, including savings and credit history and your employment stability. The co-borrower's history is also taken into consideration. The lender also considers the loan amount and appraised value of the home you are looking to purchase. Not every applicant is approved the first time through the process. If the underwriter has any questions or concerns, he or she will require certain conditions be met before they approve the loan. Pre-approval prior to house hunting lets you know exactly how much you are qualified to borrow in advance.

What can I do on my end to make it easier?

Before taking out a home loan it helps to establish a consistent record of paying your bills on time. If you have utility bills that are overdue, bring these up to date. Make sure you are paying credit card installments in a consistent and timely manner.

We can help you evaluate your debt-to-income ratio to determine what mortgage payment will be comfortable and affordable for you on a monthly basis. Aim for having enough savings to cover your down payment, closing costs if necessary, and two months' expenses in case of emergency. We'll help you find the loan program that works for you.

If I just started a new job six months ago, can I still apply for a loan?

A stable employment history is important, but the lender does take human factors into consideration. If you've recently completed college or vocational training, or were released from the military, you have good cause to have a lack of consistent work history. If your profession is seasonal, and gaps in employment are normal in your field, there are loan programs that can work with your situation. If you are a freelancer or do contract work, the lender will look for consistency in income over the last two years. Also, if you recently changed jobs in the same line of work, this would be considered stable, consistent employment.

Consistency is the key word in the lender's mind. But know that lenders have developed many different loan structures to meet the needs of the general public. When your grandparents bought their first home, they probably put 50% down and made a lump sum payment when the note was due. Times have changed, and so have loan programs. My team and I stay on top of current mortgage trends. We monitor rates daily and have a support network of Realtors®, CPAs, Financial Planners and Credit Repair Consultants to lend you additional assistance.

If you have any further questions or would just like to get started please do give me a call/text or shoot me an email.

Jeff Compton
Sr. Loan Officer
Guild Mortgage
Direct Phone/Text 916-765-2900
jcompton@guildmortgage.net

www.JeffCompton.com

Today, we recap what we saw in real estate market in the Greater Sacramento area in 2014 and what you can expect to see over the next 12 months.

When asked how the market is doing, we tell people the answer is dependent on three key questions:

1. Which area?
2. What kind of property?
3. What price range? 

There are huge differences in market conditions once all three of those factors are considered. To get an idea of what our market looked like in 2014, we took a look at Central Sacramento, Folsom, Elk Grove, Roseville, and Granite Bay to get a general idea of the trends we've seen.

Broadly, we saw an increase in inventory, ranging anywhere from 12% to 33%. Homes that were on the market sat for a longer time, anywhere from 25% to 45%. Homeowners typically accepted offers 3% to 8% below the original asking price. However, there was an increase in the final selling price, as we saw values rise between 4% and 8%. 

After looking at those numbers, what can we expect in 2015? Well, we don't expect the market to get more forgiving any time soon. In fact, if interest rates increase, homes are going to be more expensive even if prices stay the same. To save yourself time and money moving forward, you need to adopt an effective strategy when entering the market.

If you're trying to sell in the coming year, you don't want to be one of the people who has their home on the market 25% longer and accepts 8% less money. But how can you avoid this fate? For starters, you can work with a real estate professional who has the necessary resources to get your home sold quickly and for top dollar.

Whether you're selling or buying, you want to take a look at each individual property and really assess it correctly. We can help you make the right decisions by giving you access to helpful information. If you have any questions about the market going forward, or would like our assistance making moves in our market, give us a call. We would love to help you accomplish your buying or selling goals!