5 Reasons to Sell Before Spring

I am a big proponent of not waiting until Spring to list your house, this year in particular due to the even more severe shortage of inventory than normal.  This article, from http://www.keepingcurrentmatters.com, explains why.

Many sellers feel that the spring is the best time to place their home on the market as buyer demand increases at that time of year. However, the fall and winter have their own advantages. Here are five reasons to sell now. 

Only Serious Buyers Are Out 

At this time of year, only those purchasers who are serious about buying a home will be in the marketplace. You and your family will not be bothered and inconvenienced by mere 'lookers'. The lookers are at the mall or online doing their holiday shopping. 

There Is Far Less Competition 

Housing supply always shrinks dramatically at this time of year. The choices for buyers will be limited. Don't wait until the spring when all the other potential sellers in your market will put their homes up for sale. 

The Process Will Be Quicker 

One of the biggest challenges of the 2013 housing market has been the length of time it takes from contract to closing. Banks have been inundated with both purchase and refinancing loan requests. Both of these will slow in the winter cutting timelines and the frustration these delays cause both buyers and sellers. 

There Will Never Be a Better Time to Move-Up 

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 25% from now to 2018. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30 year housing expense with historically low interest rates right now. There is no guarantee rates will remain at these levels in years to come. 

It's Time to Move On with Your Life 

Look at the reason you decided to sell in the first place and decide whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?
You already know the answers to the questions we just asked. You have the power to take back control of the situation by pricing your home to guarantee it sells. The time has come for you and your family to move on and start living the life you desire. That is what is truly important.

Thanks to Kim Jones from Fidelity Bank for passing along this great article! 

New Lending Changes Coming in 2014

1. If you don't know what "QM" and "ATR" stand for yet, now is a good time to learn because you are sure to hear a lot about them in the months ahead. QM stands for "Qualified Mortgage" and ATR stands for "Ability-to-Repay." They need to be on your radar screen because they are the center-piece of a new set of mortgage rules set to roll out on January 10, 2014 that are a requirement of the seemingly never-ending Dodd-Frank Wall Street Reform and Consumer Protection Act. Attached is a thorough overview of the rules but below is a briefer summary of the key things you need to know.

2. Effective with the new set of rules, lenders will only be able to offer "Qualified Mortgages" that meet "Ability-to-Repay" standards. The intent is to eliminate many of the risky mortgage programs that caused the mortgage collapse five years ago.  Obviously, there are many politicians clueless to the fact that the industry has already naturally reacted and even over-corrected. Nevertheless, expect even more underwriting scrutiny moving forward as there is more at stake than ever for lenders to substantiate and document a borrower's income, debt, credit, and assets. Needless to say, there will only be "full doc" loans offered in the future.
3. Outlawed loan types moving forward include negative amortization, interest-only, balloons, and amortization periods over 30 years. No major losses on this list.
4. The most threatening new rule is a cap of 43% on the debt ratio. You are certain to hear a lot about this new cap but be aware that for the next seven years this cap does not apply to any Conforming, FHA, VA, or Rural Housing loans that get an automated approval. Fortunately, this is most of the loans made in 2013! Not sure what the significance of seven years is but unless this is overturned, the number of loans lenders can make is going to drop a lot in 2021 because a large percentage of loans made today do have debt ratios over 43%. For now, the greatest impact with this cap will be on Jumbo loans > $417,000.
5. A few other rules worth mentioning:

• There will be a cap on the points and fees that lenders can charge of 3% of the loan amount for loans > $100,000. Up to two additional discount points that are used to buy down rate will be allowed. There is ongoing discussion about which fees are part of the 3%. In its current state, this rule will give the consumer fewer mortgage options which is not a good thing. For example, programs that allow the borrower to pay for the PMI in advance rather than monthly might no longer be allowed.

• ARM loans must be underwritten at whatever the maximum possible loan rate is over the first five years of the loan.

• Another victim of this law is the Conventional 3% down loan. The minimum down for all Conventional loans moving forward will be 5%.

6. One of the key components of the new rules is the fact that borrowers who have been foreclosed on will actually have the ability to sue lenders claiming that they did not have ability to repay. Lenders have a "safe harbor" from such lawsuits, however, if they properly document loans and keep the interest rate on the loan within 1.5% of the "Average Prime Offered Rate" (APOR). You can bet that lenders will be going to a lot of trouble to only offer loans that meet the safe harbor requirements.  

Thanks to my buddy Mark Moore with Shelter Mortgage for this info!