Homeowners are leaving BILLIONS on the table!

Image result for free clip art   Mortgage rates have been so low for so long that it is hard to believe nearly everybody hasn’t refinanced to a lower rate yet. Believe it. More than 5 million borrowers could both qualify and benefit from a mortgage refinance, according to a new report from Black Knight Financial Services.

True, that is less than the nearly 7 million who could have refinanced just last spring, when the average rate on the 30-year fixed mortgage was below 3.7 percent. Today, thanks to the rout in the stock market, rates have fallen back just below 4 percent. About 2.4 million borrowers could potentially save $200 or more on their monthly mortgage payments and an additional 1.9 million could save $100 to $200 per month. Add it up, and that is $1.2 billion still on the table, according to Black Knight.

“If rates go up 50 basis points from where they are now, 2.1 million borrowers will fall out of the running; a 100-basis-point increase would eliminate another million, leaving only 2 million potential refinance candidates, the lowest population of refinance candidates in recent history,” said Ben Graboske, senior vice president at Black Knight Data & Analytics.

In other words, borrowers should act now, as mortgage rates are expected to rise through 2016. While mortgage rates do not follow the Federal Reserve’s moves exactly, they will rise with an improving economy and job growth.

The robust rise in home values has helped bring millions of borrowers back above water on their home loans, allowing them to qualify for a refinance. There is also, however, a the last housing boom, when people used their homes like ATMs, they are available at low rates. Their popularity, in fact, is growing again, up 35 percent in 2015 from 2014 levels.

Homeowners today have a collective $4.2 trillion in available home equity, up $600 billion over the last year, according to Black Knight. About 37 million borrowers could pull out an average $112,000 before hitting the amount of equity most banks require them to keep in the home. Average credit scores on new HELOC originations today, though, are at a record high.

Californians are the big winners in home equity. More than a third of the nation’s collective home equity is in the state. The state has the most borrowers eligible for a refinance and/or a HELOC. Texas and Florida are next with the most home equity ready to be tapped. Refinancing a primary loan is heavily rate-dependent, but borrowers are still willing to take out a HELOC at higher rates.

“While it’s not a hard and fast rule that borrowers won’t refinance into a higher rate in order to tap available equity — 23 percent of cash-out refi borrowers over the past six months did just that — for the most part, as rates rise, HELOCs will continue to become more popular to homeowners looking to tap available equity,” said Graboske.

Borrowers today appear to be more cautious about their home equity. Those who are taking the money out are using it to pay down debt or to improve their homes, adding value to the investment — as opposed to buying luxury vacations, cars and second homes as they did a decade ago, when home equity was more of an optimistic notion to lenders than an actual reality.
government refinance program, called HARP, for those still owing more on their loans than their homes are worth. To qualify, borrowers must have loans backed by Fannie Mae, Freddie Mac or the FHA. There are about 430,000 borrowers who could still benefit from HARP.


The Appraisal vs. Expectation gap

Appraised Values Remain Slightly Lower Than Homeowner Expectations, According to Quicken Loans Study

— Nationally, appraised values were an average of 1.87% lower than homeowner expectations.

— Gap between appraisal and owner estimates narrow for the third consecutive month.

— Home values rose 1.08% in November, 4.54% from a year prior, according to national HVI.

Quicken Loans, the nation’s second largest retail mortgage lender, today announced the average appraisal in November was 1.87 percent lower than the value the homeowner expected, according to the company’s national Home Price Perception Index (HPPI). The difference between the values was slightly higher in October, making November the third consecutive month the gap between values have narrowed. Overall, November marks the 10th straight month homeowners’ expectations of their home’s value exceeded the appraisers’ valuation, according to the national index.

The nation’s average home values continued to rise in November according to Quicken Loans’ national Home Value Index (HVI). Appraised values rose an average of 1.08 percent since October, and have increased 4.84 percent year-over-year.

Be sure to contact me if you would like to see what YOUR home could be worth in todays market.  


A Very Thankful Day

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There are days when it seems as if nothing goes right.  The coffee spills before you even get a sip,  the tire is flat on the car and the children all woke up with head colds.  It’s one of those days when you wish you could just crawl back in bed, go back to sleep and wake up to a better day.  We have all had them and they are no fun.  In the Real Estate business, we have a saying: Some days you are the windshield and some days you are the bug!

It is hard to be thankful on the days when you are the bug, but I try.  I think about my clients of the past and how many of them have become my cherished friends and wonder in what other profession could I change lives in such a profound way and also have the honor of becoming a trusted friend.  In some cases, I have been blessed to become “The family Realtor” to multiple generations.  This more than makes up for the days that I am the bug and not the windshield.

The Lake Oroville Real Estate Market this year has given me yet another reason to be thankful. There has been a pretty even ratio of buyers and sellers this year making it a bit easier to find that perfect fit at a good price.  I am really excited about 2016 and the new Real Estate adventures that await me.  I look forward to making new friends and spending time with old ones.

So whether you are having a Windshield day or a Bug day:   I wish you a wonderful and THANKFUL Thanksgiving.


Lake Oroville Poised for a Wet Winter… We Hope.

lake oroville visitor centerShowing lake property without a lake has been an escalating problem for a few years now.

The Lake Oroville area has some amazing sights and tons of recreational activities. Unfortunately, a large portion of them have to do with accessing the lake which is kind of hard these days. With the lake levels at an historic low, the lake has been in the news more than at any other time in history. It seems that every time I pick up an article or magazine that is talking about the drought, there is a picture of Lake Oroville in its depleted state. We have become the “poster child” for California’s near crisis drought conditions.

The effect on the Lake Oroville Real Estate market is debatable. The spring/summer has been great so far with plenty of buyers still looking for that vacation or retirement home by the lake. The interest rates are still low and the home prices while going up a bit, remain stable in the area and the prospect of a wetter than average winter is making everyone I talk to positively giddy. People seem to be optimistic that the lake will fill up again SOMEDAY!  Sellers are still selling and buyers are still buying, so from my perspective, things look pretty good.

According to MSN news, the ocean waters are warming up and we are in a position to experience an “El Nino” event that could rival the winter of 1997/1998. If you lived in the area at that time, you will remember the unbelievable amounts of rain that came down that year. My mom worked for the propane company in downtown Oroville at the time and recalls the huge propane tanks floating down the street on the flood waters. The engineers at the Lake Oroville Dam were very worried at one point that the dam would not hold all the water and that it would breach the dam. Scary stuff indeed.

I personally hope for a lot of rain spread out appropriately enough to fill the lake, but not to cause widespread flooding, but mother nature will do what she wants and we will deal with it. Hopefully, next spring I will be showing homes and showing off the beauty of our area that includes a FULL lake.


lake oroville visitor center    If you have been paying attention at all, you are aware of the rising prices of existing residential Real Estate here in the LAKE OROVILLE AREA, but a recent article in the Chico Enterprise record indicates that there is another sign that the Real Estate market is improving. Permit prices have now dropped to pre-recession levels making it more affordable to build new homes.

This is a significant savings for the commercial or residential developers, but it could also mean MORE $$$ IN YOUR POCKET if you own a piece of bare land and are thinking about or have begun the process of development. Even if you are not prepared to do the actual construction yet, you may want to consider taking out the necessary permits now if the project is not too far in the future. Most permits are good for a year or two and can be renewed for a nominal fee, so get those remodeling projects going or get busy on building that dream home because the LAKE OROVILLE REAL ESTATE MARKET IS MOVIN ON UP!