Bay Area Home Loans

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According to figures provided by FICO Inc., as of April 1010, 25% of consumers (about 43 million people) now have a credit score of 599 or below, making them big risks for lenders. This number is up from the historical level of 15%.  Interestingly, the number of consumers who have a top score of 800 or above has increased in recent years. Experts say this is mostly attributed to them cutting spending and paying down debt.  Obviously, consumers on the lowest end of the scale are less likely to try to borrow to buy a house or qualify to refinance

You’ve probably never seen anything like the table below.    It is Fannie Mae’s Risk Based Loan Level Price Adjustments. These “price adjustments” are subtracted from a borrower’s loan pricing, which pushes their mortgage rate higher. A borrower with a FICO score of between 680-699 takes a 1.50 point hit on their pricing at an 80% loan to value.

If this fee was paid at closing, on a $200,000 loan, it would cost the borrower an additional $3,000 to close! I don’t think we can blame Fannie and Freddie for adjusting their model to risk, but these loan level pricing adjustors will prevent many current homeowners from qualifying for a refinance and make first time buyers hesitate at the additional cost of buying.  Of course, some will look to FHA, which has less restrictive underwriting requirements and far fewer pricing adjustments, for financing.

Now you can see that there is a direct cost factor between the cost of a mortgage loan and your credit score.  The good news is that time is on your side if you are trying to rebuild your score.  Your score rises the longer you go through time maintaining prompt payment on your outstanding credit.  You are entitled to one free credit report a year, just visit www.annualcreditreport.com and get your free copy.  There are plenty of websites out there that claim to give you a free report but unless it’s www.annualcreditreport.com  you may be required to buy a product or subscribe to a service. 

With the complexity in today’s real estate market you will benefit from the advice and guidance of an experienced and knowledgeable real estate professional.  I’m always available to answer your questions or discuss your concerns.  Just text, call (650 325 7877) or email me for a prompt response.

If you are in the San Francisco Bay Area, I invite you to take a look at our Resource Center, www.AboutBayAreaHomes.com. There you will find links for active home listings, including bank owned and short sales, home loan information,  market activity reports, home seller strategies, staging and decorating, a suite of 19 calculators, plus my book, “Let’s Make a Deal, The Insiders Guide to Buying and Selling Real Estate” and more.

Russ Boyd and his team professionally assist buyers, sellers and homeowners in the Peninsula Communities of the San Francisco Bay Area. They serve clients in San Mateo, San Francisco, Santa Clara, Alameda and Contra Costa counties. Licensed as a Real Estate Broker by the California Department of Real Estate, 01264240. National Mortgage License Registry 230411.

Videos by Russ Boyd are syndicated by 

Mortgage applications to buy homes have plunged in recent weeks to the lowest level in more than 13 years.  I’m Russ Boyd and this decline comes as the housing recovery continues to struggle following the expiration of the homebuyer tax credit.

The Mortgage Bankers Association said application for mortgages to purchase a home sank last week driving the volume to its lowest level since December 1996. Year over year, applications for the week were down 43%.

Much of the slowdown has come since the April 30 expiration of homebuyer tax credit. Homebuyers had until that deadline to sign contracts. Congress extended the deadline to close deals to Sept. 30.

The government’s latest reading on new home sales plummeted to a record low in May, thanks largely to the expiration of the tax credit.

The MBA’s reading on refinancing applications and its overall mortgage application index also declined, each sliding a seasonally-adjusted 2.9%. Mortgage rates are holding near lifetime lows, however, the housing markets remain fragile.  In the Bay Area inventory continues to be low with bidding common on well priced homes.

With the complexity in today’s real estate market you will benefit from the advice and guidance of an experienced and knowledgeable real estate professional. I’m always available to answer your questions or discuss your concerns. Just text, call (650 325 7877) or email me for a prompt response.

If you are in the San Francisco Bay Area, I invite you to take a look at our Resource Center, www.AboutBayAreaHomes.com. There you will find links for active home listings, including bank owned and short sales, home loan information, market activity reports, home seller strategies, staging and decorating, a suite of 19 calculators, plus my book, “Let’s Make a Deal, The Insiders Guide to Buying and Selling Real Estate” and more.

Russ Boyd and his team professionally assist buyers, sellers and homeowners in the Peninsula Communities of the San Francisco Bay Area. They serve clients in San Mateo, San Francisco, Santa Clara, Alameda and Contra Costa counties. Licensed as a Real Estate Broker by the California Department of Real Estate, 01264240. National Mortgage License Registry 230411.