Tag Archives: Newport Beach

The Pre-Buying Don’ts

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In our last blog installment, we discussed some pre-buying do’s.  Equally important to your home buying preparatory work are several pre-buying don’ts:

1)   Don’t Go Credit-Crazy

As previously mentioned in the “do’s” post, it’s smart to monitor your credit in the months leading up to a home purchase.  With every new line of credit opening, your credit score gets dinged.  So if a creditor solicits you for another amazing credit card with major perks, don’t bite during this crucial time.  Avoid any financial transactions that require inquiry into your credit health.

2)   Don’t Get Behind on Bills

Having a late payment hit your credit report before closing can impact your ability to get the loan you need.  Payment history comprise about a third of your credit health.  Many banks require 12 consecutive months of on-time payments to qualify for a loan in the first place.  A 30-day late blemish could cause lenders to rethink your loan application all together.

3)   Don’t Switch Jobs

Any change in employment is a significant risk from a lender’s perspective.  Lenders desire clients with stable, reliable income and generally will ask you to provide a picture of income stability during the underwriting process, as stability equates to the less likelihood of default in the their eyes.  During this crucial time of financial scrutiny, don’t switch jobs, don’t go entrepreneurial and become self-employed, and certainly don’t quit your job.

4)   Don’t Buy Anything Major

Don’t buy a car or truck or any other form of transportation that you have to finance.  Buying one increases your debt-to-income ratio and that’s something loan officers don’t want to see.  Additionally, don’t buy furniture or major appliances before buying your new house.  Like financing a car, charging big-ticket items negatively impacts your financial standing.  Keep yourself in good graces with your lending institution by minimizing your large expenditures.

The process of purchasing a home can be long and complicated.  From the moment you decide to become a homeowner until you close on your dream house, you want to provide a clean bill of credit so that your home gets financed favorably. Even if you have good credit at the beginning of the journey, there are ways to blemish your qualifications and make lenders think twice.  Being fiscally absentminded or slightly irresponsible with your credit health could cost you down the line.

 

Getting Ready to Buy? A Few Do’s.

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You’ve been flirting with the market for months, touring open houses on the weekend and logging in late night hours on Redfin or Zillow.  You’ve pinpointed the ideal neighborhood that suits you best and have toured the schools in the district.  You are ready to take the plunge and buy.  What next?  A few do’s:

1)   Get a Realtor

A seasoned real estate agent can provide you with valuable insights on homes and neighborhoods during the search portion of your house hunt.  And even with the proliferation of online real estate search engines, when the time comes to write an offer, you will need an experienced real estate professional on your side to navigate the negotiations, escrow and closing process with you.  Over the years, the laws for home buying have become increasingly complex and the process is filled with many moving parts.  Ask your trusted friends for quality agent referrals and find yourself a good teammate.

2)   Get Preapproved for a Loan

Consulting a mortgage lender will help you get a clear picture of your purchasing power so make this step at the top of your list of to do’s.   Understanding what you can afford from a lending perspective helps define your house search so you don’t waste time looking at homes you cannot afford.  Plus, often the market moves fast on well-priced homes, so having a pre-approval letter in hand lines you up at the front of starting block.

3)   Make A Checklist of “Must Haves” in a House

No two houses are the same and no house is ever 100% perfect, but having a checklist for your ideal home is useful so you are efficient in your house hunt.  A house can always be redecorated to perfection but it’s a bigger headache if your new house is missing that home office you had hoped to have.

4)   Check Your Credit

Your credit score helps lending institutions determine the rate and terms they can offer you on the loan.  If your credit is high, meaning that your credit history indicates that you are fiscally responsible, lenders will see you as a low-risk investment and offer you a lower rate on your loan with good conditions.  If your score is low, lenders will think you are a riskier investment and charge you with higher interest rates to take on the perceived risk.  Get your credit scores from Equifax, Experian and TransUnion, the three major credit agencies, so you can see how you stack up in terms of investment risk and see if you have time to improve your credit health.

Stay tuned next week for a list of pre-buying don’ts.

Neighborhood Due Diligence

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The iconic adage in real estate has been and always will be “location, location, location.”  A house can always be remodeled and redecorated to suit your personal taste.  But, the neighborhood within which your home resides, will profoundly impact your lifestyle and how you enjoy your home in the years to come.

Within Newport Beach and other similar markets across the country, each neighborhood has its own unique personality and vibe.  If you are like most buyers, your home search frequently starts with neighborhood selection above all else.  So what makes a neighborhood appealing?  And what due diligence should one perform to identify the neighborhood of choice?  Here are a couple of ways you can be proactive in the hunt for the ideal neighborhood:

1)   Check on the schools.

Even if you don’t have children, buying a home in a good school district can pay off at the time of resale.  If you are looking for a home for your school-aged family, go to the school district’s website for more information.  Also, check out www.GreatSchools.org for ratings and see how neighborhood schools’ rank in comparison to each other.

2)   Test your commute & visit the neighborhood at different times of the day.

If living close to work is important, then make sure you drive around potential neighborhoods at different times of day to get a sense of traffic patterns and potential commute delays.  Similarly, visit the area on a weekday, weeknight, and weekends to see how quiet or active the community will be.

3)   Check crime reports.

Local police stations can generally provide statistics on crime within a certain zip code.  Or find this info online at www.crimereports.com.  For further peace of mind, check the Family Watchdog website at www.familywatchdog.us for registered sex offenders in the area.

4)   Talk to neighbors.

No one can give you a more accurate idea of how vibrant and thriving a community can be than someone who already lives there.  Make a list of things that are important to you and when you get a chance to talk to someone, ask them if the community has a swim team, neighborhood events and gatherings, and security measures.  Other important topics to vet with current neighborhood residents could be HOA dues and board involvement, potential community improvements on the horizon, and more.

5)   Discover neighborhood amenities.

Some people desire a neighborhood that is walkable to restaurants and stores.  Others really value the proximity to public parks and recreation spaces.  Walk and drive around different neighborhoods and identify where you’ll be doing your grocery shopping or picking up dinner.  These little amenities really impact how you will function day to day within your household.

Once you’ve honed in on the neighborhood you want to live in, then the fun part begins… looking for the perfect house.  Happy house hunting!

Preparing for a Home Inspection

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During the complex process of selling a house, one of the bigger hurdles to a successful close of escrow comes at the point of inspection.  Varying statistics pinpoint the percentage of contracts that fall out of escrow at somewhere between 20% to 30%.  While a small percentage of buyers cancel contracts simply due to a change of heart or the inability to secure financing, a handful of contracts blow up over the home inspection.

No matter how meticulous you’ve been in maintaining your home over the years, the home inspector will likely find issues with the house that your buyers will want to have addressed.  And while it’s not feasibly possible for anyone to “ace” their home inspection, there are a few steps you can take to make the inspection go as smoothly as possible and thereby presenting the buyers with the peace of mind that they are purchasing a home that’s been well cared for over the years.  Here are a few tips in preparation for the home inspection:

1)    Consider a Pre-Inspection

One of the smartest things a home seller can do before putting their house on the market is to complete a home inspection on the property, especially if the property is older.  If your home is relatively new and you aren’t aware of any issues, you can probably skip this step.  But, for the price of a home inspection, which runs somewhere between $350 to $450 in the Newport Beach market, you will receive a report of potential problems and decide on your own timeline which items to address.  One reason buyers get cold feet at this juncture is the length of the home inspection report that inevitably equates into mounting costs and stress in their minds.  A seller with an inspection report could head off this potential roadblock by cherry picking several cost-effective fixes and thereby mitigating the report for the buyer down the line.  Plus, if you know all the potential issues ahead of time, you can plan for how you might respond when a buyer asks for repairs or a credit.

2)    Scour the Home for “Quick Fixes”

  • Make sure all the lightbulbs and light fixtures are functioning.
  • Make sure all the smoke detectors are working.
  • Change out furnace filters and vacuum the registers.
  • Ensure all windows and doors open and close properly.
  • Provide easy and unobstructed access to the attic, crawlspaces, furnace, water heater, and electrical panel.
  • Clean out gutters and clear the roofline of debris.
  • Check that bath vents and dryer vents are venting effectively.
  • Remove unnecessary and potentially hazardous materials such as rotting firewood, paints and solvents from the premise.
  • Remove excess clutter and clean the house.

3)    Leave the house

Letting the home inspector freely roam your house unencumbered is a good idea.  Most home inspectors prefer to do their work without the scrutiny of the homeowner’s presence.  And remember to take your children and pets with you so they feel at ease during their time in the house.

4)    Prepare Documentation for Work Performed

If you are a meticulous and thoughtful homeowner and have a backlog of receipts for maintenance work done to the house, collect those items and make them available after the inspection.  Paperwork will come in handy to prove that work was already performed to fix certain problems and to what extent.

In general, the easier you make it for the home inspector, the more favorable the experience will be for all parties involved.  Home inspectors and buyers are more partial to homes that have the semblance of constant care and thoughtful maintenance.  If as the seller you elect to perform a pre-inspection, the transparency provided by the report will avoid surprises during escrow and prepare you with the knowledge and a plan to circumvent a potential round of re-negotiations.  At the end of the day, a good home inspector will never overlook a serious problem, but if you prepare in advance to provide an easy inspection experience, your efforts could impact and minimize the report by a small but significant margin.

Orange County’s Demographic Challenge

Three Generation Family Holding Hands While Walking On Beach

Orange County, by most standards, is a great place to live and raise a family.  We have beautiful neighborhoods, great public spaces, award-winning schools and the weather is consistently the envy of the country.  But as we learned last week, household formation is unfortunately on the decline in the United States.  And here in Orange County, we have another problem that isn’t helping the overall economic landscape: young professionals aren’t choosing to settle in Orange County.

Orange County has been gradually losing the number of its young professional workforce for several decades now.  The number of 18-44 year olds residing in Orange County has been dipping steadily which presents a problem for housing growth.  Typically, young professionals are the ones that purchase larger homes while the Baby Boomers are looking to downsize.  With less young professionals in the housing market, Baby Boomers are staying put in their homes, and the market experiences a less productive exchange of homes.  The overall problem is that Orange County isn’t widely perceived to have a bustling job market or an affordable housing market for the younger professional demographic.

In 2007, California state demographers estimated that California would hit 50 million residents by 2032.  Factoring in recent data and trends, it’s unlikely the state will hit that landmark until 2049.  With the state experiencing a slowed influx of new residents, Orange County is further impacted by our aging population.  In fact, Orange County is aging faster than California and the US.

Two additional factors having significant influence on our region: 1) Californians are having fewer children per household and 2) Immigrants are also on the decline in search of higher-paying jobs and more affordable housing.

This isn’t bad news.  It just means that Orange County’s demographic challenges will produce a much slower growth year over year than what we experienced in the past.  So the next time you see a sweeping headline declaring an upturn for the economy and housing, just be mindful that these statements are generally created from aggregated data that doesn’t necessarily represent regional specificity.  On the whole, rapid rate of growth and recovery is unrealistic, and here in our beloved Orange County, one can only expect modest growth on the foreseeable horizon.  But at least, our foreseeable horizon of endless sand and ocean is breathtakingly beautiful and unique to our residents!

Household Formation: What Is It?

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Since the housing bust, everyone is trying to get a handle on what’s happening with the economy.  In conversations regarding the “big picture”, economists tend to talk a lot about consumer confidence and employment.  Specifically when it comes to real estate, forecasters frequently point to interest rates and new home sales to determine if we are well on the road to recovery.  But there’s one economic indicator that plays a huge role, particularly in our industry, but gets less airtime, and that is household formation.

A household, as determined by the Census Bureau, is a group of people living together whether it be roommates in college, or a newlywed couple setting up shop together, or a nuclear family consisting of mom, dad, 3 kids and an grandparent.  These are all separate and unique households.  Formation occurs when person previously in a household leaves the group to set up a brand new residence.  It tends to suggest that the person has gained more financial independence warranting an apartment or new home, and on the path to getting married and having children.  Formation is a positive occurrence.  It additionally implies greater disposable income to express financial independence, potentially increasing spending to furnish new residence.

Unfortunately, household formation is at an all time low.  Historically, the U.S. has witnessed an average of 1 million household formations per year.  In 2013, that figure was less than 400,000.  What is happening is that young adults are experiencing weak job growth and have a harder time obtaining credit, forcing many millennials to move back home with Mom and Dad.  Raw Census data shows that in 2013 over 30% of this demographic continue to live with parents, relatives or roommates.

The irony is that the last few years should have been prime time for home buying with interest rates at its all time low and falling home prices, but the truth is that speculating home builders and all-cash foreign investors have been reaping in all the rewards and snapping up available inventory.

While many economists have been optimistic about the 2014 forecast, until the job market provides the younger generation with greater financial footing to leave their parents’ homes, recovery will continue to be slow.  The good news is that with rising prices, some investors holding properties for rent will be enticed to sell, adding much needed inventory to the market.  Additionally, should the economy recover with steady job growth, many project that these millenials will jump at the opportunity to create new households, unleashing pent-up demand which will drive homebuilders to build more units and home prices upward.

Housing is paramount to the health of the economy.  And household formation is key to housing demand.  Job growth is the catalyst to formation.  In future deliberations regarding the direction of the housing market, add household formation to the list of indicators to monitor.  While often overlooked, it may be the most relevant factor to consider.

 

Real Estate Photography: Quality Photos Required!

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I’m not a photographer. But I know that with nine out of ten buyers starting their home search online, good photography matters when it comes to selling houses.  With the proliferation of real estate search engines and visually dependent social media platforms, both buyers and sellers are demanding appealing photography. A couple of years ago, having beautiful photos of a listing set you apart from the competition, but now beautiful photography is what’s expected.

Now again, I am not a photographer.  I leave the artistry of real estate photography in the capable hands of the professionals that I hire.  But here are few details I keep in mind when dealing with photographing listings:

1) Get a good exterior shot.

Researchers who track the eye movements of consumers looking at online home listings found that more than 95% of users viewed the first photo – typically the exterior photo – for a total of 20 seconds.  The photos of the rest of the house, such as the master bedroom, kitchen, and outdoor space, each net less than 10 seconds of the viewer’s attention span.  Not surprisingly, the exterior shot is the one that leaves the strongest impression and hooks the user into viewing the rest of the photos.  Plus, with eye fatigue and extensive search of inventory, users tend to forget the interior shots fairly quickly.  So if nothing else, make sure the photo shoot yields an attractive exterior shot.

2) Highlight the strong points of the house.

Before a photo shoot, I go through the house and pinpoint its strongest points and make certain I convey these features to the photographer.  I don’t assume that the photographer and I share the same opinion on what sells the house.  Sometimes an assessment of a house’s strengths will determine which photographer I use.  For example, for homes with dramatic windows or stunning views, I typically hire photographers that offer to shoot twice in the same day: daytime and twilight.  The reason being that during twilight hour (the half hour before sunset), there are two shots that showcase the windows beautifully: exterior of the house with the lights on inside and interior shot with sunset colors through the windows.  These shots consistently provide photos with the wow factor that consumers are looking for.  Additionally, luxury waterfront properties here in Coastal Orange County often warrant an aerial shot to demonstrate water frontage, proximity to beach or expansive lot size.

A few other features that are at the top of a photography hit list include outdoors spaces, expansive views, dramatic staircases, spacious floor plan and an inviting bedroom retreat.

3) Curate the pictures.

Upon receipt of photos from the photographer, I like to select a handful of pictures that get uploaded with the listing to the MLS. It’s not necessary to include every photo from the entire shoot.  If the house is immaculate with the exception of the powder room, then the powder room photo gets discarded.  The purpose of the photos is to lure the viewer into requesting an in-person showing.  It serves no one to include photos that might leave a bad impression or imply a remodel project.  In general, a listing going live on the MLS should be accompanied by 8-15 photos depending on the size of the home.  More than 15 pictures may potentially dilute a powerful impression.  Less than 8 might imply that the home is hiding a few flaws.

With real estate photography, it’s best to keep it simple.  It’s imperative to capture a single, stunning exterior shot.  To cover all the bases, a well-rounded set of photos should also include a shot of each major living space: kitchen, family room, dining room, formal living room, master bedroom, extra bedrooms and outdoor space.  Exceptional properties might warrant aerial shots and/or shots from various times of the day. To showcase the home’s strongest features, a set of key images should be selected to accompany the listing on the MLS.  Digital enhancements and dramatic filters generally aren’t necessary, as they tend to give images the “over-processed” look.  At the end of the day, real estate photography should be warm, inviting and genuine, and hopefully be effective in delivering a steady stream of potential buyers to the front door.

Tips on Touring A Home

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I recently read an astonishing statistic that on average potential buyers spend 17 minutes in a home before making an offer on it.  While I can’t verify how researchers arrived at this statistic, that number is shocking for two reasons; 1) It’s an extremely short amount of time to spend deciding on what is the biggest purchase of your life, but also 2) it’s truthfully not all that surprising.  In my experience, typical showings tend to last around 30 minutes.  If a house isn’t the right fit, often times the showing ends after a few quick minutes.

So if indeed, all it takes is anywhere between 17 to 30 minutes to determine if a house is right for you, here are a few tips on how to spend that time as efficiently as possible.

1)  Use all your senses and bring a camera!

Touring a house is first and foremost a visual activity.  Your eyes are busy taking in all the pros and cons, but often distracted by some of home’s charming features.  You might be so busy falling in love with the large Carrera marble countertops that you didn’t really take in the condition of the cabinets.  Open a drawer or two.  Turn on the faucet to gauge water pressure.  Does the floorboard creak or feel soft when you walk?  Does the house smell musty?  Can you hear street noise when all the windows are closed?  Use all your senses to get a full picture of what it might be like to live in the house.  Because that smell might be an indication of a hidden water issue.  And I have often heard about people moving into a house only to find unacceptable street noise after the fact.  You simply cannot rely on just your eyes to take everything in.  Which leads me to my next point: bring a camera.  There’s just no way after a day of looking at houses you will remember the color of the laundry room wallpaper in house number #2.

2)  Spend the most time in the kitchen and bathrooms.

The most expensive room to renovate is the kitchen, followed by bathrooms.  While most homebuyers draw the greatest impression of a house from its kitchen, people tend to overlook the bathrooms.  Additionally, both these rooms have running water and plumbing to contend with so make sure you are diligent in your assessment of their current condition.  Look under the sinks for signs of leakage or old plumbing.  Again, turn on the water and check for good pressure, clear run-off, and appropriate water temperature.  And finally, be honest with yourself about how these rooms look.  Your bedroom can be transformed with a coat of paint.  A kitchen or bathroom remodel is substantially more.  So if you aren’t in love with the cabinet style or the countertops, admit to yourself that you will likely want to change it in the near future, and factor that into your decision-making process.

3)  Go outside.

Guess what else is really expensive to tear out and redo?  Backyard and front yards.  Prospective buyers not surprisingly spend most of their time at a home tour indoors, surveying its finishes, floorplan and features.  But do not conclude your showing without spending a significant amount of time taking in your outdoor space.  Are there cracks on the hardscape that need to be addressed?  What condition is the hot tub or pool?  Does the backyard get enough sun?  If so, what time of day?  Is your fence in good condition?  And, don’t forget to look out at your neighbors and the immediate neighborhood.  What condition are the houses on your street?  Who might your neighbors be?  How busy is the street in front?  Don’t miss out on these critical cues of a property’s shortcomings.

4)  Bring a tape measure.

Do the due diligence and measure the rooms that matter to you and also a few major appliance openings to make sure that your existing furniture and appliances will fit.  Generally, washers and dryers don’t convey with the house.  If your current washer and dryer don’t fit the openings, and do not assume they will, a brand new pair of laundry machines will become additional expenditures that you didn’t anticipate.  Think about how annoyed you might become upon move in to find that your furniture doesn’t fit well or your TV is too small for the built-in opening.  While I’m not suggesting that the size of your furniture and appliances be deal-breakers should you love the house, it’s just important to be aware of these potential costs up front as it will improve your satisfaction with the overall home purchase.  Nothing dampens the excitement of moving into a new house as much as a growing list of unforeseen expenses.

5)  Go back for a few more showings!

If upon first impression, you make an emotional connection to a house, make sure you request additional showings, especially at different times of the day.  Today’s market isn’t moving at a pace where you wouldn’t have time to squeeze in a few more looks.  Chances are, after your first tour, you won’t remember several important details and you’ll have new questions about the home.

Happy house hunting!

Real Estate and the Internet

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Back when I first started in the residential real estate business, listings were made available to agents via a large volume newsprint book much like a phone book.  A good portion of the information in it was obsolete by the time it rolled off the presses.  No one had an efficient method for gathering relevant data like neighboring comp sales or tax records.

But along came the Internet.  And the real estate game changed.  A lot.

Every client I work with today has done a significant amount of research online prior to meeting me.  Buyers have already walked through most listings within their criteria via virtual online tours, and sellers come to the table with a deep comp list of recent sales and existing inventory.  For me, giving the consumer access to the world of home buying/selling information is actually a great thing.  And here’s why.

People once speculated that the Internet would kill the need for real estate agents.  But the truth is that buyers and sellers need us more than ever simply because at the end of the day, experience and expertise is still necessary to complete the complicated transaction. The California Residential Purchase Agreement is 8 pages of check boxes, fill-in-the-blanks, signature lines, and that’s before we start adding in addendums, disclosure documents, and counter agreements.  Most consumers know that a real estate transaction is so infrequent, expensive and highly emotional, that after the initial online research is completed, they turned to a professional.

Plus, of all the major dot-coms in the real estate space, only Redfin is trying to challenge the existing business paradigm by employing their own army of agents and then undercutting commissions.  Zillow and Trulia provide the platform for a consumer-driven search, but both sites refer out to a traditional local agent to execute a deal.  After years of closely following Redfin’s business trajectory, industry experts have yet to see them become a threatening player.  Nationally, Redfin saw only 3% of total transactions last year.

So instead, the Internet has elevated the business in a really positive way.  For one, the transparency provided by these websites holds all agents far more accountable.  Every consumer can fact check the statistics we arrive with at our initial meeting, so we better make sure that our information and numbers are correct.  Additionally, the business is hyper-efficient at this point.  By the time a client gets in my car to go house hunting, because of the extensive research he/she has already done, we are only seeing homes with the greatest potential.  The benefits of efficiency also apply to the ability to keep clients apprised of market activity and changes.  New listings can be automatically emailed to clients as soon as it becomes available.  Another practical benefit is that when I make a suggestion for sales price, rarely are people surprised because they have already studied comp sales in the neighborhood thoroughly.

And finally, with the explosion of real estate Internet activity, agents are able to cast a wide net in terms of listing exposure.  Potential buyers from all over the globe have eyes on our Newport Beach market.

Bottom line is that the Internet evolved and streamlined the real estate business.  It has forced agents and brokers to be at the top of their game.  By acknowledging how well-informed their clients have become, real estate professionals are finding ways to provide real value in the process.  Afterall, the buying and selling journey is an arduous and winding road, and no two transactions are remotely identical.  So a seasoned agent can facilitate the process, creatively solve for your residential housing needs, and potentially save you a few headaches and dollars along the way.  And while forces that challenge that notion exist in the digital space, the general public clearly still value a good real estate agent.

Changes to Lending Laws. Good or Bad for You?

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Last week, changes to current lending laws took effect.  These reforms seek to prevent the housing crisis of the late 2000s from happening again.  As we all vividly recall, millions of homes across the country during that time went into foreclosure because homeowners found themselves with loans they simply could not afford.

So, what are these changes and how do they affect you?

First, there’s the Ability-To-Repay Rule aimed at tightening the bank’s underwriting process.  Borrowers without a lot of debt won’t be affected by this new rule, but those who have a debt-to-income ratio above 43% will find it harder to qualify for a loan.  Self-employed borrowers will have to show more proof of income.  This rule attempts to hold banks more accountable by increasing the due diligence work required to qualify their clients.  While there are opposing opinions on whether this Ability-to-Repay Rule truly benefits the homeowning public, it does mean that borrowers from this point forward will likely have to jump through a few more hoops to secure a loan.  It potentially could mean that there are less qualified buyers in the market place as well.

Under this rule, you may start hearing the term “QM” which stands for Qualified Mortgage.  A QM loan meets the new guidelines.  So as a borrower, go and get yourself “QM-ed!”

The other changes to lending laws are likely to be less impactful.  For instance, there’s now a cap on loan origination fees.  Fees are to be limited to just 3% of the loan amount, which is great because borrowers won’t be paying an arm and leg for their loans.  But, this potentially could mean that lenders may not be interested in offering smaller loans.

Also, mortgage servicers are required to provide borrowers with a far more detailed statement on a monthly basis.  Statements must clearly show interest rate, loan balance and escrow balance.  Again, this is a consumer friendly rule trying to provide more transparency for the borrower.

A few things have not changed.  $625,500 is still the borrowing threshold at which it becomes a jumbo loan.  In a luxury market like Newport Beach, most buyers are seeking jumbo loans with a 20% down payment minimum.  Also, guarantee fees were scheduled to rise, but newly appointed FHFA head Mel Watt delayed the hike until further evaluation.  So for the time being, the guarantee fees remain unchanged.

Mostly, these changes imply more paperwork for the lender. While the intent of these changes is to avoid another foreclosure crisis, how these changes ultimately trickle down to the borrower and their impact on the greater housing market has yet to be fully determined.  What we surmise is this: it will be a little harder to qualify for a loan, more paperwork will be involved in the process, unconventional loans will be less available, and quite possibly, the market will have less ready and able buyers.