JVM's Blog

The only advantages of using an iBuyer are quicker access to cash and less effort prior to selling (no staging, repairs or showings). But sellers invariably get less for their homes.

Some of the iBuyers are losing as much as $100,000 per transaction.

iBuyers are also taking enormous risks b/c if the market turns while they are holding inventory, they could quickly lose billions.

Recent data shows that half of all homebuyers getting a mortgage in April put down over 20%.

But what about our low-down-payment buyers do they still have a shot in today's market? 

Our entire economy is like an 18-wheeler careening down a curvy mountain road at 80 mph with no brakes; nobody knows how the truck will slow down or what will happen.

I came home last night to a giant vat full of honey – not just a lifetime’s supply, but several lifetimes.

It turns out my wife Heejin ordered it when online shopping at Target and she was way too busy to vet honey sizes – so she just bought the first one she saw.

Things of this nature often happen in our house b/c Heejin thrives on chaos.

What crazy thing did Powell have the audacity to say?

We always try to close as quickly as humanly possible to make our clients’ offers more compelling than other offers, particularly cash offers. We also offer a “Close On-Time Guarantee” to make offers more compelling.

But the issues we face are the hold-ups from third parties over whom we have no control

The last time we saw significant inflation in the 1970s, the stock market tanked and didn’t recover for a decade and interest rates remained in double digits for years.

We constantly hear horror stories about the housing affordability crisis, and how it will push too many buyers out of the market and foster a correction of sorts. 

So – is the recent run-up in home prices exacerbating the "affordability crisis?"

The appraisal review requirement is one of the reasons why jumbo loans take at least a week longer to close than conforming (Fannie/Freddie) loans.

These appraisal reviews take anywhere from two to five days and can only be performed of course after the appraisal report is complete.

This is why we often get appraisal reports in “at value” for jumbo loans but we cannot release the appraisal contingency for several more days – while we wait for the review to come back.

What is the one thing that could crash housing?

A surge in interest rates could tank the housing market, b/c it would create major affordability issues and/or simply scare buyers out of the market.

Fortunately, many pundits like Barry Habib don't think that is in the cards for us - here is why. 

We spend about $750,000 per year on various technology applications with the primary goal of making the mortgage process as simple and as efficient as possible for our clients.

In a word – no.

Not even close in fact, as we underwrite to the same guidelines that everyone else does. In addition, our massive tech integrations truly do make life far easier for borrowers.

Grants and down payment assistance programs are offered by government entities with the goal to either loan or simply grant cash-starved buyers sufficient funds to cover the down payment, the closing costs, or both.

But – the problem we see time and again is that sellers very often won’t accept offers involving either grants or down payment assistance.

Our Zillow rep told us yesterday that searches for new homes are down 25% from recent months, as buyers appear to be “fatigued” and are putting their searches on hold.

Despite that fact, the market remains extraordinarily hot and we continue to see appraisals come in under contract price all too often.

This should not be surprising, as buyers continue to bid over the list price and the list prices themselves are often now higher than any of the nearby closed comparable sale prices.

Costco is a magical place where you can fill your cart with a 5 lb box of Cheez-Its, an 84 pack of Coors Light, a big-screen TV, and a mortgage.

I saw this tweet a few days ago from Nick Huber – whose Twitter account I typically enjoy.

"How to buy a house in a hot market:
Fire your buyers agent (or don't get one). You're at a disadvantage with a multi-offer scenario.
Work directly with the seller agent.
Make offer with 2% credit to seller and 1% more commission to the seller agent." 

When I read the tweet, I thought… “good gravy; what universe does he live in?”

So, does going straight to listing agents work in soft markets? 

In my opinion, no - here's why.

We get questions all the time asking whether properties are duplexes or single-family residences with in-law units. Unfortunately – there are no hard and fast rules. In today's episode, we outline the criteria that underwriters and appraisers evaluate.

We frequently save borrowers thousands of dollars every month with cash-out loans. Because interest rates remain surprisingly low in the face of recent inflation concerns, borrowers with any type of cash-out needs would be wise to consider their options now.

This is a guest blog by our long-time Marketing Director, Lindsey Hansen.

She wanted to share what she went through to buy a home so frustrated buyers everywhere will know they are not alone.

And, more importantly, so buyers know that they should hang in there.

With inflation here and only expected to get worse, many potential buyers are getting nervous and wondering what to do.

As a result, we thought we'd address a few major considerations today.

Many homebuyers take advantage of owner-occupied financing, even if they plan on renting out the properties, later on, because the rates and down payment requirements are so much lower.

These buyers do need to be careful and we've outlined some of these considerations.

We're sharing some important qualification reminders for borrowers who have spouses with low credit scores and/or lots of debt, borrowers who recently became self-employed, and those looking for a "Title Only" mortgage solution. 

America always seems to overcome enormous crises no matter how serious they might seem at first.

Here are just a few examples of crises that truly seemed insurmountable and how America managed to come out on top over and over again. 

COVID has changed everything – including marriage, as many couples realized they didn’t like each other when they had to actually spend time together. 😊 This is a great segue into important considerations in regard to divorces that divorcing couples, lenders, and real estate agents should keep in mind.

Crypto expert and former Goldman Sachs exec. Raoul Pal believes crypto and blockchain technology will transform the world and usher in a golden age that will increase global GDP by severalfold, and most importantly, allow everyone (not just the rich) to get richer.

Today's episode is breaking down the "Strange Economics of the Lumber Market." There is a huge glut of raw wood or logs, and the prices for such logs remain at record LOWS! This is a significantly positive sign for real estate and mortgages, as interest rates are now expected to drop in the coming months ahead. 

We're not here to toot our own horn... who are we kidding, yes we are. We just got our 1,000th five-star review and we're over the moon excited about it. We also stop bragging for just a moment to talk about rolling closing costs into a loan. 

Interest rates are pretty cut and dry, right? You hear interest rates are at 3.25% so you think you'll get a 3.25% interest rate, right?

Wrong! There are at least 13 reasons why your personal interest rate could be higher or lower.

We must be doing something right as a mortgage lender when other mortgage lender employees are still coming to us for their personal home loans. 

We've got a lot of topics to hit today!

This is why an investor with 70+ investment properties in California refuses to sell despite it being the hottest housing market we've ever seen.

It's not uncommon to owe income taxes to the IRS, but how does it impact your ability to obtain mortgage financing? Well... it depends on the financing. 

We're not saying to not file your taxes, but we are saying that waiting to do so might not be a bad idea.

We had two nearly identical borrowers get rate quotes that were 1/2% different on the same day last week.

The two borrowers were nearly identical for all factors, including loan amount (around $800,000); credit score (800s); down payment (25%); property use (owner-occupied); property type (SFR); and type of loan (30-Year Fixed).

There was one huge difference though: reserves.

There is an axiom in business that you have to choose either a high cost, high service niche with higher margins (like Nordstrom) or a low cost, no frills, lower margin niche (like Walmart), but you cannot be both.

So what should businesses, especially those in the real estate and mortgage industries do? 

Sellers can rent back a property they just sold (and remain in the home) for up to 60 days after close of escrow.

We often tell Realtors and buyers, however, to limit the rent-backs to 59 days to ensure that the new buyers are able to move into the property by day 60.

Adjustable Rate Mortgages are back with a vengeance!

These loans are a great option for borrowers with a shorter time-horizon or for borrowers who are feeling too much pain for missing out on 2020’s record low rates.

JVM's jumbo rates are now sometimes as much as 1/2% lower than conforming (Fannie/Freddie) rates.

We had an appraisal come in low last week, and the agents seemed to believe that our choice of “jumbo investor” (PenFed) had something to do with the low appraisal when that was not the case.

Jay gives Boomers a bad name in this blog... and Bon Jovi is wanted dead or alive (seriously, Jay is so over them as a band). 

We're also sharing some important reminders about credit inquiries and HOA dues so you can stop living on a prayer during the mortgage process. 

Are these Bon Jovi puns piercing you straight through the heart? Happy Friday y'all - we're finally more than halfway there to the weekend. 

What is the best way to buy a home for your child? 

Here's five options for parents who want to help their kids become homeowners! 

Have questions why there seems to be less and less housing inventory lately? There's a reason why, and it's not what you think. 

One of the most frustrating and expensive aspects of our business is dealing with low appraisals.

We had an appraisal come in slightly under contract price this week (unusual in this market, to say the least).

Our property fronted to a court or cul de sac, but its side was adjacent to a very busy thoroughfare.

Hence there was substantial traffic noise which is a perfect example of an “adverse external influence” that must be taken into account by the appraiser.

By coming in slightly low (like our appraiser above did), appraisers are often preventing much more significant value cuts that might come as a result of an appraisal review.

I encourage readers to read these two below blogs too, as there is much confusion over these issues whenever appraisals do come in low.

Either inflation or deflation is headed our way and Jay only has one piece of advice - diversify.

Links:

As mortgage rates continue to rise, many are asking, are refis gone for? Is there an affordability crisis? Jay answers both these questions and more in today's blog. 

Links:

For anyone not following the news, one of the world’s largest container ships got stuck in the Suez Canal last week, and the implications are both staggering and fascinating for the world, mortgage rates, and the real estate industry.