Seattle Mortgage Loan and Real Estate Blog

This has been the common theme this month in the mortgage world. We had a 24 hour window of record low rates in late January followed by wild upswings that brought rates up over 1% in less than 3 weeks!! This week has been VERY good for rates and now they are on a pretty good downswing.

I said it before and will say it again, get your applications in and ready to lock. The window of opportunity can be very short and if you get too greedy it could cost you thousands of dollars over time.

The Seattle market ended 2007 with a .5% value increase which seems bad but it was the 3rd best in the nation! The 4th quarter did see Seattle area prices start to drop but very slowly. Nationwide the real estate market is in for a very tough year. Hang in there and please call or email anytime if I can be of help.

I wanted to take a moment and relate my personal philosophy on the types of loans and lenders that created our current mortgage mess.  In regards to loan types the subprime and option ARM loans were the two biggest loan problems. Did mortgage brokers/bankers create these loans or did they just sell what Wall Street and the big banks said they wanted to buy? They just sold what they were told people wanted to buy. Did mortgage lenders do this in the best interst of their clients or themselves? That is a little tougher question as people were coming to us begging for these loans and if we didnt do them someone else would.

I personally never liked or recommended the Option ARM loan. In over 10 years of mortgage lending I think I have done a handful of these loans and that was only because my client demanded them even after I offered other safer loan choices.  Subprime was a little different, I still didnt like these loans but did them as a last resort for clients with credit or asset issues that would not get them into a home any other way.  MOST of my clients were able to get a little equity, improve their credit and get out of these loans and into good conventional mortgages within the two or three year fixed rate portion of the loan.  Those who continued to abuse their credit usually just sold the home and at least broke even or slightly ahead.

The only ARM loan I really recommend is the 5 year in either a fully amortized or interest only option.  I dont think interest only is a bad loan but you have to know how to manage it.

The mortgage rate markets ended up pretty flat to end January. We had a ton of big news, fed cuts etc...but it seemed that any bad news was offset by a good report or two and in the end rates on 30 year fixed conventional loans ended up around 5.5% for the week. Dont hesitate to get your loan applications in as I have over 15 clients right now who are completely approved and just waiting to lock in a rate. Till next time...cheers!