According to Lender Processing Services, first-time delinquent home loans fell to 0.84% of the 50.2 million active mortgages in March. That is the first month we have seen that number drop below 1% since 2007. The rate of first-time defaults, defined as loans that reached a period of 60 days in delinquency, peaked at 2.89% in January 2009.

The decline in new problem loans is proof of a recovering U.S. economy. Falling unemployment rates and rising home prices, combined with more than four years of banks tightening lending standards, are making the worst real estate crash since the Great Depression seem like a bad dream.

“Mortgage quality is improving rapidly,” said Mark Zandi, chief economist for Moody’s Analytics Inc. “Once we’re able to work through this last bulge of foreclosed property, which I think we’ll be able to do over the next 18 to 24 months, mortgage credit quality is going to look absolutely beautiful.”

To read the full article, please go here.

Mortgage loan interest rates are still very low, which is a great thing for prospective buyers. Unfortunately, inventory is still low which gives the sellers an upper hand in some ways. This high demand and low inventory give sellers the hope they’ll be able to make a profit or break even on their homes. There aren’t nearly enough homes to keep up with demand, however.

More and more people are jumping on the bandwagon and placing their homes for sale. Builders who put their projects on hold when the market took a downturn are working hard to make up for lost time. This doesn’t just include large builders like Garbett or Ivory Homes. Many small builders are snatching up any project they can find or knocking down old properties to build new ones.

While demand is so high and inventory is so low, buyers are doing what they can to get the home they want. Multiple offers and bidding wars are common and some prospective homeowners are agreeing to terms they perhaps wouldn’t have years ago.

For the time being, these circumstances are shifting the market into a seller’s market. It could, however, become a buyer’s market again when home prices rise too high.

Original article posted on KSL.

• Has less than perfect credit
• Has a gifted down payment of less than 20%
• Has student loans in deferment
• Has low credit scores
• Wants to finance high dollar amounts with as little as 3.5% down

FHA Facts

Mortgage Insurance:

• 1.75% Up-Front Mortgage Insurance Premium (UFMIP) on all loans regardless of the total down payment. This is typically financed into your loan, meaning you put 3.5% down but then add 1.75% back into the final loan amount to cover the fee.
• Monthly Mortgage Insurance is based on how much you put down and the term of your loan (15-year term loan has lower MI than a 30-year loan.) MI ranges from .45% per year to 1.55% depending on your term, loan amount and loan-to-value (LTV.)
• If you register your loan with FHA after 6/3/2013 and you finance greater than 90% LTV, the mortgage insurance fee will perpetuate for the life of the loan. If you finance less than 90% LTV, it will perpetuate for at least 11 years. This has been of great concern to many clients, but keep in mind the total costs of FHA with today’s 3.25% 30-year fixed rates are still pretty reasonable. Your APR will still be in the 4% range.

FHA is the Most Flexible Loan Product:

• It will allow for just 3.5% down, which may be gifted or loaned to you by a family member.
• You can borrow against a 401k, car or any other asset you own.
• It allows you to be financed down to a 580 FICO score.
• You can be financed two years out of a Chapter 7 bankruptcy.
• You can qualify while in a Chapter 13 bankruptcy and as soon as 3 years after a short sale or foreclosure.
• Also, keep in mind when you get over $600k, it is the absolute least down payment option available in some areas with loan amounts up to $729,750.

FHA is going to be more expensive, but it is also the most flexible loan product. All in all, total costs considered, it’s still a very cheap loan with an APR in the 4% range (as of today’s rates.)

Conventional and Private Mortgage Insurance:

• The least costly loans are conventional loans from Fannie Mae and Freddie Mac, which are government-sponsored enterprises that provide 90% or more of the conventional loans in this country today. With this lower cost come tighter guidelines and more underwriting scrutiny:
• Conventional high-balance loan limits will go as high as $625k and will have rates that vary with the borrower’s credit score, loan-to-value, property type (condo, single family residence, complex) as well as property use, such as second home or non-owner occupied.
• Conventional financing will allow you to finance up to 97% loan to value on the purchase of a new home up to the conforming loan limit of $417k.
• Conventional will also allow you to have an 80% first mortgage and a second mortgage (up to 97% if you can find a second mortgage lender that will go that high) to avoid mortgage insurance completely.
• Probably the biggest difference with conventional financing is the flexibility in how to pay for the Private Mortgage Insurance (PMI.) In the past, mortgage insurance was paid as a monthly premium, which can range from .28% to 1.35% depending on LTV, credit score and the term of the loan (15 year is cheaper than the 30 year term.)
• Today, PMI can be structured as a one-time up-front premium, typically anywhere from .25% to 3% of the loan amount, or can even be financed into the rate as a lender-paid mortgage insurance premium.

Those are a few of the differences between FHA and Conventional financing. I hope this article was helpful, but keep in mind the mortgage industry is always changing. It’s good to have a general overview and understanding, but don’t try to figure it all out alone. It is incredibly beneficial to work with someone who is a true market expert and can be trusted as an advisor. I suggest checking testimonials from past clients and getting referrals when selecting a mortgage professional to help you.

Props to Josh Mettle.

This has been an exceptionally busy spring in the real estate world. More homes are slowly being placed for sale, but there are even more buyers anxious to purchase property. If you have been waiting for the perfect time to put your home on the market, now is that time! Here are five reasons to sell your home now!

1. Home prices are stabilizing.
Price per square foot also seems to have rebounded. The average price per square foot in Salt Lake City is $112, which is slightly higher than the average in 2006. Good news for sellers in that area!

2. Get ahead of the competition.
According to the Utah Association of Realtors, absorption rates have improved by almost 33%. This means there are fewer homes for sale on the market, creating a greater demand. That, along with stabilizing prices, creates the perfect “seller’s market.”

3. Only serious buyers are out.
With the mortgage qualifications tightening up, only serious home buyers will be in the market. This raises the likelihood of selling your home. It’s always important to ask for a pre-qualification letter from a reputable lender, but most buyers are prepared with this documentation.

Selling your home now will give you the opportunity to continue to ride the appreciation wave, especially if you are looking at a larger, more expensive home. Supply is low, which is causing prices to go up. If you are looking to move up, you’ll want to try to lock in at today’s pricing with historically low interest rates below 4%.

5. Lenders are paying attention.
Most lenders have changed their processes to accommodate this market. That means that they have shifted their processes in order to close purchase transactions in a shorter timeline. As a result of this, you should be able to close within a 30 days of accepting your offer. If your offer asks for more than 30 days, don’t be afraid to ask why. Lenders understand the shift in the market towards purchases and want to make sure they can take care of you.

We’ll try to make this as brief as we can and give you the latest market info so you are informed. Right now there are more pent-up buyers and more demand for housing than we have ever seen in the entirety of our careers. Furthermore, we have never seen so much confusion! Some think the market is down, some think it’s up, and there are a lot of rumors. For those who hate stats and just want to read the main point, scroll down to: Synopsis (The Bottom Line)

Let us examine only the facts and no opinions in the following three scenarios:

#1 Salt Lake City Housing as a Whole (Condos and Townhouses Excluded)
#2 East Side vs. West Side
#3 Starter Level Homes with a Minimum of 2000 Sq. Ft and 2-Car Garage

#1 Salt Lake City Housing as a Whole (Condos and Townhouses Excluded)

Here you are looking at a quarterly snapshot of three things; houses placed for sale (GREEN), houses sold (RED), and median price (BLUE.)

Things to take note of: The bottom of the market was over a year ago. At that time, the median price on a house in Salt Lake City was about $190k. It bounced back to $220k at the end of 2012. Although the graph does not depict the first quarter of 2013 (which ends in 3 days), I’ll tell you where the median is now: median price as of today is $228k! We are now only $26k off the all-time high and we have made back $38k off the bottom in only eleven months. That’s 20% appreciation in less than 1 year.

Also note, the red and green lines have touched! What does this mean? Not only are prices skyrocketing, but there is nothing to buy! No inventory! Houses are selling as fast as they hit the market if they are priced correctly.

#2 East Side vs. West Side

The graphs below depict the same quarterly comparisons as the graph above, except we are now only looking at east side homes vs. west side homes.

East Side

Things to take note of: The median price peaked at $299k, bottomed at $239k, and ended at $266k last year. Now the median is $266k (not shown on graph.) That’s 12% appreciation in eleven months and only $33k away from the all-time peak of the market in 2008.

Once again, the green and red lines are touching.

West Side

Things to take note of: The median price peaked at $225k, bottomed at $160k, and ended at $186k last year. Now the median is $200k (not shown on graph.) That’s 25% appreciation in eleven months and only $25k away from the all-time peak of the market in 2008. Yes, what you are reading is correct. The west side has dramatically appreciated compared to the east side over the past year. What is the reason? When a market rebounds, the cheapest inventory is quickest to appreciate while everything else catches up.

Once again, the green and red lines are touching.

#3 Starter Level Homes with a Minimum of 2000 Sq. Ft. and 2-Car Garage

Things to take note of: This is east and west side combined, though the inventory reflected is houses with a minimum of 2000 sq. ft. with at least a 2-car garage. This includes all houses: bank repos, short sales, houses on main roads, etc… The median for houses falling within these criteria was $280k at the end of 2012 and is now $288k! That’s only 11% off of the all-time peak of $320K!

Synopsis (The Bottom Line)

This article is not meant to frustrate all the buyers out there, but to inform everyone on the facts. To be blunt, when the market sunk to the very bottom during the winter of 2010, many of us said two things:

Yearley is the CEO of Toll Brothers, a nationwide homebuilder. He believes that strength in housing will continue over the next few years. Available inventory is ridiculously low and that is adding to the rising housing prices. U.S. housing is the greatest value it’s ever been in our lifetimes – and probably the greatest value it will ever be. However, affordability is a function of 1) house prices, 2) mortgage rates, and 3) income. The first two crashed to an epic degree, making U.S. housing more affordable than ever despite the rising prices.

The steady rise in housing prices has created a significant uptrend, so housing is incredibly affordable and your risk is now reduced because this uptrend has returned. Housing is about to soar and this moment is your lowest-risk moment to buy. Don’t wait a moment longer!

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Utah County Phone Numbers

The certified rates are calculated by the County Auditor then approved by the State Tax Commission. The Utah State Tax Commission ensures the proposed rate is below the “certified rate,” which is a max set by state law to protect taxpayers from extreme increases. If the County Auditor’s rate is above the certified rate, public hearings are held before the rate can be approved.

After approval, the County Auditor divides the county into tax districts. The Treasurer’s Office then multiplies the total tax by the taxable value of your home and issues a bill by November 1st of each year. Salt Lake County’s property tax rates can be found on the Salt Lake County Treasurer website.