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This graph illustrates that the number of homes for sale in Big Bear is the lowest it has been in a year. Last month, there were 29% fewer available listings than what were available the same time last year. Also, 9% more homes sold in March 2013 than in March 2012.  Prices have stabilized and are even rising due to the limited supply.  We are seeing multiple offers and bidding wars again, the likes of which have not been seen since the housing boom several years ago.

This is good news for sellers who have been on the fence about when to list their homes for sale since the competition is low.  This is also good news for buyers who have been waiting for the “bottom” of the market since home prices are no longer declining as they were in recent years.

There are myths about the home buying experience that must be addressed.  We like to make it as stress-free as possible, so please read these 3 big myths about home buying:

Myth #1: “That house has been on the market so long I bet we can work the seller down easily.”

Not necessarily. Exceptionally high days on market could mean almost anything.  The seller could be bullheaded about their price.  The seller may not be particularly motivated to sell for emotional or other personal reasons.  Donʼt forget: A sales-weary seller isnʼt likely to respond to your host of rational reasons why their house should be a bargain.

Myth #2: “I want to look at foreclosed homes because theyʼre a real bargain and the banks need to unload them.”

Banks, like entrenched sellers, donʼt always make decisions which seem rational based on obvious information.  You can have a hard time divining the reason a bank chooses to reject an offer for a foreclosed or distressed property, and their decision may be based on financials which seem counterintuitive.  The truth is, many distressed sales can be longer and more fraught than regular sales.

Myth #3: “I liked this house a lot, but with this market, I bet it will still be there if I decide to buy it.”

Itʼs very painful to see a client love a home but fail to make a move to purchase that home.  If you fell in love with it, why wouldnʼt someone else?  Just because a property has been on the market a little while doesnʼt mean it will stay on the market.  The bonus myth in this one?  Your “perfect” home is probably going to be a home with some small compromises.  If you donʼt make an offer on a home, youʼre effectively saying, “Iʼm comfortable losing this home.”

Our job as Realtors is to represent your interests and do our best to protect you along the way.  If youʼre pursuing a Big Bear home purchase in the near future, please get in touch!

Interest rates are at an all time record low, but even a one-point increase can raise your monthly mortgage payment.  Here’s a look at how interest rates affect mortgage payments.

Written by Kathleen Pender at the San Francisco Chronicle

Borrowers who want to get a mortgage insured by the Federal Housing Administration should act quickly to avoid changes the agency is making to shore up its faltering insurance fund.

The U.S. Department of Housing and Administration announced the changes on Wednesday but didn’t announce the effective dates until Thursday.

Here’s the timing: FHA will raise the annual mortgage insurance premium on most loans that have a case number starting April 1 or later. To get a case number before the April 1 deadline and avoid the increase, borrowers should apply with a lender no later than March 25, says Julian Hebron, vice president with RPM Mortgage in San Francisco.

On most FHA loans, the annual premium will increase by 0.10 percentage point, or $100 per year for each $100,000 in loan amount.

For loans greater than $625,000 with a term longer than 15 years, the increase will be 0.05 percentage point, or $50 per year for each $100,000 in loan amount.

The premium itself varies depending on the loan size, term and loan-to-value ratio, but here’s an example:

For a $500,000, 30-year loan with a loan-to-value ratio greater than 95 percent, the new premium will be 1.35 percent, or $6,750 per year, up from 1.25 percent, or $6,250 per year. On a monthly basis, the premium increase amounts to about $42.

For a chart showing premiums increases for various loan types, check out Hebron’s blog at tinyurl.com/as4xsqb. These premium increases do not apply if a borrower refinances an existing FHA loan that was endorsed on or before May 31, 2009, into a new FHA loan under the streamline refinancing program.

FHA is not changing the one-time premium borrowers pay up front; it remains at 1.75 percent of the loan amount.

Bigger hit

In a potentially bigger hit, FHA borrowers will have to continue paying annual mortgage insurance premiums for a longer period of time – in most cases for the life of the loan.

This change will apply to new loans with case numbers starting June 3. To avoid this change, borrowers should try to apply by May 24, Hebron says.

In the past, FHA automatically canceled mortgage insurance on most loans when a borrower, anytime after five years, had made enough payments to reduce the balance to 78 percent of the original loan amount.

A borrower taking out a 30-year loan with 10 percent down could usually eliminate mortgage insurance after about six years making normal payments, or after five years if they made extra principal payments, Hebron says.

(If the original loan term was 15 years or less, the five-year rule didn’t apply; FHA would cancel the insurance when the balance dropped to 78 percent.)

In the future, if the borrower starts off with a loan-to-value ratio above 90 percent, FHA will collect the premium for the life of the loan. If the original ratio is between 78 and 90 percent, FHA will cancel the premium if the balance drops below 78 percent of the original loan amount anytime after 11 years.

Read more: http://www.sfgate.com/business/networth/article/FHA-mortgage-premium-to-rise-on-April-1-4250685.php#ixzz2KoIoHYx8