Michael Wolff's Real Estate & Finance Blog

Weekly Update! I apologize in advance for not having a post next week. I am getting married this weekend and will be on my Honeymoon! As much as I would love to keep my blog current, I think my wife may have a problem with it!

This week there were 125 new residential listings in the San Fernando Valley*. Looking pretty stable to me! Listings range from entry-level condos to lavish estates.

The highest priced listing is a single-family home in Encino listed at $5,975,000 by Kenneth Margolis and Angel Sheppard of Sotheby's International Realty. Property is a comfortable 8,600 square feet over 3 stories which includes 7 bedrooms and 9 bathrooms. Photos show a tennis court, pool, 3 car garage, wine cellar, half-pipe for you skaters and amazing views! Financing for this custom built home is readily available up to 90% of the sale price to the right buyer**.

Not too far away in Woodland Hills is a 1 bedroom, 1 bath co-op which is listed with Rachel Campbell of Pinnacle Estate Properties for $178,000.

In addition to a plethora of listings, this week has seen 70 newly closed sales. To give you an example of whats selling, sale prices ranged from a Tarzana REO Condo which sold at $254,900 up to a beautiful Mediterranean styled single family home in Encino that closed at $2,700,000. Everything from entry level up to lavish luxury, the perfect home is out there for you.

If you are looking to buy or sell a home, please don't hesitate to use me as a resource. Not ONLY can I assist you in financing, I can refer you to a top-notch Realtor in your area to help with listings or showings!

Michael Wolff

*Photos & information taken from the MLS and includes only the following cities: Van Nuys, Encino, Sherman Oaks, Studio City, Woodland Hills & Tarzana. Cities were chosen to show a good range of property types, prices and sizes. Proprty nformation not verified by Michael Wolff.

**Not a guarantee of financing. Super Jumbo, high LTV programs are available based on income, credit and asset qualifications.

*** Down payment could be a grant from an outside non-profit organization with Seller approved assistance. Ask me for help!

Sorry for the delay! It's been difficult to update this daily so I have decided to change this to a weekly thing.

This week there were 131 new residential listings in the San Fernando Valley*.

The highest priced listing is a single-family home in Sherman Oaks listed at $3,549,000 by Isidora Fridman of Ewing Sothebys.  Property is a comortable 7000 square feet over 2 stories which includes 6 bedrooms, 5 bathrooms, gourmet chef's kitchen, and family room with wet bar.  Financing for this Mediterranean home is readily available up to 90% of the sale price to the right buyer**.

Not too far away in Van Nuys is a 3 bedroom, 2 bath condo which is listed with Erik Reppe with Property Masters for $128,875.  This home is an Bank-Owned REO and priced perfectly for the First-Time Home Buyer.  Ideal property for FHA financing with minimal down payment of 3% required.***

In addition to a plethora of listings, this week has seen 60 newly closed sales.  To give you an example of whats selling, sale prices ranged from a Tarzana Condo which short-saled at $185k up to a brand new Spanish styled single family home in Sherman Oaks that closed at $3,595,000.  Everything from entry level up to lavish luxury, the perfect home is out there for you.

If you are looking to buy or sell a home, please don't hesitate to use me as a resource.  Not ONLY can I assist you in financing, I can refer you to a top-notch Realtor in your area to help with listings or showings!

Michael Wolff

*Photos & information taken from the MLS and includes only the following cities: Van Nuys, Encino, Sherman Oaks, Studio City, Woodland Hills & Tarzana.  Cities were chosen to show a good range of property types, prices and sizes.  Proprty nformation not verified by Michael Wolff.

**Not a guarantee of financing.  Super Jumbo, high LTV programs are available based on income, credit and asset qualifications.

*** Down payment could be a grant from an outside non-profit organization with Seller approved assistance.  Ask me for help!

Once you are satisfied that you are working with a top-quality professional mortgage advisor, here are the rules and secrets you must know to “shop” effectively.

First, IF IT SEEMS TOO GOOD TO BE TRUE, IT PROBABLY IS.

But you didn’t really need me to tell you that... Mortgage money and interest rates all come from the same places, and if something sounds really unbelievable, better ask a few more questions and find the hook. Is there a prepayment penalty? If the rate seems incredible, are there extra fees? What is the length of the lock-in? If fees are discounted, is it built into a higher interest rate?

Second, YOU GET WHAT YOU PAY FOR.

If you are looking for the cheapest deal out there, understand that you are placing a hugely important process into the hands of the lowest bidder. Best case, expect very little advice, experience and personal service. Worst case, expect that you may not close at all. All too often, you don’t know until it’s too late that cheapest isn’t BEST. But if you want the cheapest quote – head on out to the Internet, and I wish you the best of luck. Just remember that if you’ve heard any horror stories from family members, friends or coworkers about missed closing dates, or big surprise changes at the last minute on interest rate or costs…these are often due to working with discount or internet lenders who may have a serious lack of experience. Most importantly, remember that the cheapest rate on the wrong strategy can cost you thousands more in the long run. This is the largest financial transaction most people will make in their lifetime. That being said – I am not the cheapest. Of course my rates and costs are very competitive, but I have also invested in the systems and team needed to ensure the top quality experience that you deserve.

Third, MAKE CORRECT COMPARISONS.

When looking at estimates, don’t simply look at the bottom line. You absolutely must compare lender fees to lender fees, as these are the only ones that the lender controls. And make sure lender fees are not “hidden” down amongst the title or state fees. A lender is responsible for quoting other fees involved with a mortgage loan, but since they are third party fees – they are often under-quoted up front by a lender to make their bottom line appear lower, since they know that many consumers are not educated to NOT simply look at the bottom line! APR? Easily manipulated as well, and worthless as a tool of comparison.

Fourth, UNDERSTAND THAT INTEREST RATES AND CLOSING COSTS GO HAND IN HAND.

This means that you can have any interest rate that you want – but you may pay more in costs if the rate is lower than the norm. On the other hand, you can pay discounted fees, reduced fees, or even no fees at all – but understand that this comes at the expense of a higher interest rate. Either of these balances might be right for you, or perhaps somewhere in between. It all depends on what your financial goals are. A professional lender will be able to offer the best advice and options in terms of the balance between interest rate and closing costs that correctly fits your personal goals.

Fifth, UNDERSTAND THAT INTEREST RATES CAN CHANGE DAILY, EVEN HOURLY.

This means that if you are comparing lender rates and fees – this is a moving target on an hourly basis. For example, if you have two lenders that you just can’t decide between and want a quote from each – you must get this quote at the exact same time on the exact same day with the exact same terms or it will not be an accurate comparison. You also must know the length of the lock you are looking for, since longer rate locks typically have slightly higher rates.

Again, my advice to you is to be smart. Ask questions. Get answers. As you can imagine, I wouldn’t be encouraging you to shop around if I wasn’t pretty confident that I can give you a great value and serve you the very best.

Please post, call or email with any further questions you may have!

Michael Wolff

Home buyers that meet HUD's income, credit and asset requirements for an FHA insured loan can also qualify for a gift which can be used for their 3% down payment which is the minimum down payment required by HUD.  This gift comes from a non-profit 501(c)3 charitable foundation and never has to be repaid.  The only other requirements are Seller/Builder participation and a nominal processing fee ($300-$600) which can be paid by the Buyer, Seller or Lender.

FHA will insure loans up to 97% of the purchase price or appraised value, whichever is lower.  The max they will lend vary from county-to-county.  Look up your areas limits on HUD's website.

General FHA guidelines:

• No Minimum Credit
  • 620+ needed for new Jumbo FHA loans.
  • 500 or No FICO is possible, but subject to serious pricing hits and you may need some good compensating factors such as a DTI ratios and/or 6 months or more of housing payments in reserves.
    
• 31/43 DTI Limits.
  • 31% Back End Ratio which is your new monthly housing expenses divided by your GROSS monthly income.  Housing expenses include: Mortgage Payment, Property Taxes, Property Insurance, PMI and your Homeowners Association Dues if you live in a condo or other community that require it.
  • 43% Front End Ratio takes your new monthly housing expenses PLUS any other monthly expenses that may appear on your credit such as: Student Loan Payments (defered or not, consult your Loan Officer), Car Payments (unless you have 10 months or less left on your loan), Credit Card Minimum Payments and anything else that may be reporting such as Child Support, Alimony, etc.
  • DTI's in the 50's and even 60% ranges can possibly be approved with appropriate compensating factors such as High FICO scores, Low LTV (Loan-to-Value) and/or Significant Assets remaining after close.
• No Minimum Assets
  • There really isnt a minimum requirement for assets, just enough to close escrow and maybe $500.  As noted above, higher LTVs, higher DTI and lower FICO's may require more Assets.
• Owner Occupancy
  • Borrower must live in the property.  FHA allows non-owner occupied properties to be refinanced as long as the loan currently in place is an FHA and it is a Streamlined Refinance (i.e. no money is being taken out.)
    
• Property Types
  • Single Family and 2-4 Units are allowed as are Rural Properties and Double-Wide Manufactured homes.  Each property type has their own unique requirements, please contact your Loan Officer for more information.
• Loan to Value
  • FHA will insure a loan that is 97% the value of the home but will allow 100% or even 103% CLTV (Combined LTV) with a 3% or 6% outside 2nd mortgage.  These 2nd loans are hard to come by but are very popular when the Seller contributes closing costs by wants to get repaid at a later date or slowly over time.
• Non-Occupant Co-Borrowers
  • FHA will allow co-signers that do not intend to occupy the property.
  • The Non-Occupant's income will be added to the pot for DTI qualification but their liabilities will also be included.

Please feel free to drop me a line if you have any questions!

Today's Hot Sheet shows 24 NEW Residential Property Listings* in the San Fernando Valley were put on the market.  Prices ranged from a $159,000 Condo in Van Nuys to a $9,790,000 Single Family** home in Encino.  There is also a 12 unit apartment building listed in Van Nuys for $1.41m.

Additionally, there were 16 Closed Sales*.  Closed sales range from a Condo in Tarzana sold at $208,000 to a Single Family house in Sherman Oaks on Chandler that closed at $1,725,000.

I have only been posting stats from the last week or two, but the steadiness I am seeing shows that the market is still alive.

Southern California has been a market to watch. Home prices swelled earlier in the decade only to drop as much as 20-30%+ over the last 9 months alone. With the flood of foreclosures and short-sales prices may continue to decline which really hurts those in the market to sell.

However, it is a perfect time for First Time Home Buyers and Investors to pick up properties at huge discounts. If you find this information useful, please let me know. Local Realtors all have access to this information but without being a member or an affiliate member of the local Association you may not get all of the details.

*information taken from the MLS and includes only the following cities: Van Nuys, Encino, Sherman Oaks, Studio City, Woodland Hills & Tarzana

**Home previously owned by Al Jolson, Charlie Sheen, Katy Segal, Kirstie Alley and others... but not at the same time!