Tag Archives: Interest Rates

Summer home sales in Boise, Idaho are smoking hot!

the Independence day weekend marks the mid point for summer sales for most of us. Boise’s 2015 sales season has been very hot from the early spring.  Unlike 2014, when we had a prolonged, colder winter, people seemed to be ready to start shopping in February.

Earlier on, in the start of the season, we say several homes sold at or above asking price.  Many others, have come back over the appraised value and some people still bought.  In most cases, a cancellation or re-negotiating  of the sales price happened.

Other interesting fact, the local real estate appraisers are factoring the “Production Builder penalty” into their valuations.  Without naming any specific names, we have several builders in the Treasure Valley who build hundreds of homes a year, typically in their own subdivisions.  If they build for less than “Custom Home Builders”, the value a home owner is going to be compared to other homes built by that builder.  They could be as much as $20/foot or more less than a custom home of the same size and finishes.  This has led to some upset realtors and home owner’s but its something to consider when buying or building a new home.

Realtors I work with are reporting multiple offers on newly listed homes in a matter of days if not the first day a home is listed on the local MLS.

As a result of our hot market, I am seeing longer times to appraise a home.  Loan underwriting times are getting longer as well as more home purchase loans are submitted.  FYI, Fairway Independent Mortgage Corporation underwriting times are about 5 business days right now.  Most loans are getting finished within 30 days of application.

Another trend I am seeing is people relocating from California, Nevada, and other states to the Boise area.  Many times they are retirees with pensions and cash from the sale of their previous home.  They can pay cash and close in a couple of days if they wish.  This may not be the best use of that lump sum, the HECM for Purchase Loan enables borrowers 62 or up to put up a fraction of the price of the new home and a reverse mortgage, or HECM, will cover the rest.  Expect to put down half and the Reverse Mortgage covers the rest.  Save the rest of your cash for getting outdoor and enjoying what Idaho has to offer.

Mortgage interest rates are still low.  They have moved up about .5% on a 30 year fixed rate loan from the low 3’s to the upper 3’s and low 4 percent rates as of today.  The “experts” keep saying rates are going to go up in the future, but so far they are holding at historically low rates.  You could be regretting not getting a home if you had the chance in summer of 2015 and didn’t.


3 questions to ask yourself before you sign that 15 year mortgage

Some things to consider when choosing a 15 yr. mortgage:

Can I make my payments if my income were to drop in the future?

Am I putting money into an emergency fund or my retirement accounts?

Do I have any other, higher rate loans that need to be paid?

If the answer to any of the above is “yes”, you might want to reconsider.

Getting a lower interest rate will not help you if you cannot make the higher payment in the future.  A better choice might be to take a 30 yr. mortgage and pay on it as if it were a 15 yr. mortgage.  You simply calculate how much it would take to pay it off in 15 yrs. and send in the additional principle with your payment. If you don’t have a calculator, here’s one.

Be sure you indicate that the additional funds are to be applied to principle, otherwise your lender may not know what to do with it and instead put it in your escrow account.

If you want to discuss this with a lender who will look at your total situation, here I am.



The lowest rate is usually not the best loan!

This might make some of you say “what has he been smoking?” but there is an important reason for this.  I see many people get sucked in to a “my rate is the lowest so I must have gotten the best deal” mentality.

You can’t go online without being bombarded with get a mortgage with a 2.25% rate(APR 2.78%) or other such message.  This is one of the most outrageous offers I have seen.  I can’t think of anyone who would be served by this offer. FYI, it was 3 yr. adjustable rate VA Loan with 1% discount and 1% origination plus all the other third party fees.

I know why online lenders offer it, to make the phones ring.  They later pull a bait and switch and get the borrower into a more realistic loan that their local bank or broker could have gotten them.  For most people, that would have been a 30 yr. fixed rate in the 3’s with either a no points/no origination fee structure.

Lenders offer a wide range of rates and terms for clients so they can select the best mortgage for their situation.  For some, they are never going to move and it might make sense to pay a discount point, origination fees, and closing costs.  On a 30 yr. fixed rate mortgage, it takes about 7 years to recoup the cost of a 1% discount point.  If you are sure you will live there for longer than 7  years, then you would come out ahead.  If you think  you might move in a few years, then don’t pay closing costs or even a 1% origination fee.  The no points/no origination fee option is a much better mortgage for your situation.

There is even an option called the No Cost Refinance that is very popular.  For the record, I call it Lender Paid Closing Cost Refinance as that is more accurate but the slang term is No Cost Refinance.

Here is how it works:  Say a lender offers 3.25% on a VA streamline refinance with no points, just third party  plus your escrow account set up.  That can be about 1.5-2% in most areas.  At 3.75%, that same lender may offer a lender credit of 2% that gets credited to the borrower to offset your closing costs and new escrow account set up.  This means you are not rolling any costs into the loan.  Yes, the rate is higher, but you didn’t pay anything upfront to get it.  The difference in payment might only be 25 dollars more and that would take 10-11 years to recoup if you rolled the closing costs into the new loan.

What I like to do with all my clients is to find out what their reasons are for getting the loan, their goals for the home, and sometimes even their retirement planning goals so that I can help them select the right loan for their situation.  This is why my past clients call me to help them finance their next home or to send a family member to me for help.

The shady gimickmeisters are coming out again

Its only a matter of time when an industry is growing before the slick gimickmeisters come out and try to get into what is percieved as easy money.

I get calls almost weekly from past clients and friends saying they a got a call or a mailer from a company offering a rate of 2.5% on a loan.

In most every case, the offer has been something they didnt think it was, ie a 10 yr fixed rate at 2.75% or a 2.25% VA loan that actually turns out to be a 3 yr adjustable rate with 1% origination and 1% discount points.  Compare that to a regualr 30 yr fixed rate VA loan in the 3.5% range with zero origination points and zero discount points.

My advice is to deal only with a local, trusted advisor, never someone over the phone.  If you don’t have one, I would love to help you.  I’m in Meridian, Idaho.  I can be reached at 861-7579.

Some local Idaho resources that other states don’t have.

In Idaho, we are blessed to have Idaho Housing and Finance Association, a local non profit agency.  IHFA has a far reaching mission to promote home ownership and affordable housing in Idaho.

I have used IHFA on numerous occasions to get the best possible loan and interest rates for my Idaho mortgage clients.  there are times when an IHFA loan is not the best loan for my client, but I always check early in the process.  IHFA also services their loans afterwards.  That means my Idaho mortgage clients will get a statement from IHFA and make their monthly mortgage payment to IHFA.  They have a local office in Boise, Idaho where one can even make a payment in person.

In addition, they offer home buyer education, down payment assistance, and housing counseling for those facing financial difficulties after they buy a home.

If you are a first time home buyer or a repeat buyer, you might be well served by using an Idaho Housing and Finance Association mortgage loan program.

to learn more about IHFA mortgages, call me at 208-861-7579.

Not everyone thinks its sunshine and unicorns in the Real Estate Market…..


In the Boise, Idaho real estate market, we have had a very good 2012 sales season.  Median prices have recovered about 25% from their lows.  This puts many homeowners back into an equity position, although there are many homeowners who are still “underwater” on their home values.

The analyst, Keith Jurow, says there is a large shadow inventory of bank owned homes that will hit the market.  Now, that doesn’t mean much in my market, Boise, Idaho nor may it mean anything in your individual marketplace.  Yes, there are bank owned homes in my market, in fact, I’ve been watching a couple of homes in my neighborhood go into their second winter without being listed for sale.  Eventually they do get on the market.  By controlling how much and how fast inventory is added, the banks can mitigate their loss.

For prospective homeowners in the Boise, Idaho real estate market, I would say don’t wait and try to time the bottom.  Interest rates are at historic lows and by all logic, will be higher in the future.  You might find that the home you are waiting on sold within days of being listed.  Furthermore, even a 1.0% increase in the historically low interest rates will equal a $112 higher payment per month on a $200,000 loan.  It wouldn’t take much to make interest rates jump from the low 3’s into the 4’s.

Anyway, I guess I will keep my sunny outlook for our market and try not to get hit by falling real estate unicorns.





Interest rates have moved up since the Presidential debates began.

Most people realize that a Mitt Romney administration would probably be better for business in this country. In my market, Boise Idaho, its almost assumed that he will be the next president.

The low interest rate environment is a function of many factors including a pessimistic outlook for business under the present administration.

In the mortgage industry, I have seen that a negative outlook on the economy or bad news in general tends to make or keep interest rates low. A strong economy or positive outlook tends to make interest rates increase.

With the recent presidential and vice presidential debates and the strong showing of Mitt Romney and Paul Ryan, their polling numbers have increased. This gives many the reason to think they will win the election and better times are coming. I think that interest rates will continue to increase gradually until the election.

If the President wins reelection, expect the rates to drop suddenly again. Should Romney be victorious, rates will most likely continue to increase.

A better economy will mean more, better quality jobs and that will mean more home purchases will be made.
For those who are sitting on the fence about refinancing their mortgage, this might be your last chance to grab those interest rates in the 3 percent ranges.

Should you be considering refinancing your Idaho mortgage? I would say run to your local, Idaho mortgage professional and apply today. 2 weeks from now you might miss the boat!

Rates just keep dropping!

This morning I logged on checked rates, they are lower than when I left on Friday.

What this means is that someone could buy a $190,000 home in the Boise, Idaho market and have a payment under $900 per month.  I based this on a Idaho Housing Fannie Mae 30 yr fixed rate with 20 % down.  For someone without a large down payment,  they can get into that house for $5600 down and a payment of $1050 per month with taxes and insurance in the Boise, Idaho market.


Now rates will go up in the future, so if you are thinking of buying;now if the time.  You’ll be kicking yourself next year.

Check this out to see what bargains are out there in the Boise, Idaho market.




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