I’ve been really impressed with a daily column (blog?) by Holden Lewis put out by Bankrate that discusses issues related to mortgages.
I find the section he gives on the numbers to be particularly useful in putting a little perspective on how (and why) mortgage rates are changing.
If you in the market for a home loan (refinance? new home?), a few minutes reading his site could quickly bring you up to date on current market conditions.
Interest-only mortgages are all the rage right now… Money magazine claims that as many as 70% of new home loans are interest only (in hot markets).
Here’s how money magazine descibed the workings of an interest-only loan:
What people commonly call an interest-only mortgage isn’t one particular type of loan. Rather, interest-only is an option that can be attached to any mortgage.
And in every case, after a certain time (usually five, seven or 10 years) the mortgage becomes fully amortizing, and you must pay both interest and principal. Because you’re repaying the principal in 20 or 25 years, not 30, those principal payments are higher than they would have been.
Other than that, the terms are as varied as those on any other mortgage — anything from a one-month adjustable rate to a 30-year fixed. IOs generally have a slightly higher rate (about a quarter of a percentage point) than the same loan without the interest-only feature (one reason lenders like them). But for most borrowers, that’s a small price to pay for the deep savings that interest-only payments represent.
Jack Guttentag (a professor at Wharton) had a much more skeptical (and I think more interesting) article on interest-only loans that dived a little deeper into the history of these types of loans. He describes how interest-only loans were all the rage in the 1920s…
However, the drop in real estate values during the Depression pushed a large proportion of interest-only loans into foreclosure. Lenders switched entirely to fully amortizing loans, and that has been the standard mortgage loan since.
Mr. Guttentag concludes that interest-only loans are “gimmickry, misdirection, and misperception” and that “if you don’t need an interest-only mortgage to qualify for the house you want to buy, it is not the best choice. ”
Of course, this is only one perspective on interest-only loans, but I find it highly interesting. If you are thinking of using an interest-only loan, I’d be interested to know why…
[photopress:costumes_1.jpg,thumb,alignright]The Norwegian Constitution Day parade is going on tomorrow, May 17, in Ballard!
The official Syttende Mai site gives the meaning behind the day along with a list of events. For more info, check out the wikipedia entry.
The Seattle Times describes the event as “One of the largest May 17 parades in the United States begins at 6 p.m. tomorrow at 24th Avenue Northwest and Northwest 62nd streets in downtown Ballard. It winds through the business district, ending at Ballard Avenue Northwest.”
The highlights from the list of events include:
Lunch
Eat excellent food and listen to important speakers.
Time:
12:00pm (Noon) to 2:00pm
Location:
Leif Erikson Hall, 2245 NW 57th Street
Parade
The parade starts at 6 p.m. near Adams School in Ballard, at the corner of NW 62nd and 24th Avenue NW. The route follows south to Market Street and eastward to Bergen Place, which is named after the Seattle Sister City of Bergen, Norway.
Time:
6:00pm to 8:00pm
Bergen Place
Entertainment featuring music and dance from Norway and other Nordic countries.
Time:
2:30pm to 5pm
Location:
Bergen Place is located at the intersection of Market St., Leary Avenue and 22nd Avenue.
Children’s Games
Children enjoy traditional games from Norway and the United States with awards going to all who participate. A surprise guest is usually on hand to delight one and all. The games are free and open to the public.
Time:
2:00pm to 4:30pm
Location:
At the Ballard Community Center, 6020 28th Avenue NW.
Dance to Pickled Herring Band
Dance the night away…
$10 at the door. Must be 21 years of age or older.
Time:
9:00pm to 12:00am
Location:
At Leif Erikson Hall, 2245 NW 57th, No host bar.
Hope to see you there!
I just ran across this article from a Microsoft employee describing his reaction to his move to Seattle… The highlight for me was his description of Seattle rain:
Rain? Yes, but it fits, it’s nice. I think it’s kind of like the vegetable racks at the supermarket – every few minutes little jets turn on and spray everything to keep it moist.
(I also noticed that he is a huge fan of Richard Feynman, who just happened to write one of my all-time favorite books)
I recently began an ad campaign on google that places an ad when someone searches the term “moving to seattle”…
Did you click on that ad to get to my site?
If so, I’d be especially interested to know what type of information that you are looking for! Is there something specific you would like to know about Seattle?
If you wouldn’t mind taking a minute to write a comment, I would sure appreciate knowing how I could serve you better!
The Seattle Times had an interesting article that describes how home values of older homes have increased at substantially faster rates than new homes:
New homes may have the latest of everything, but as an investment, a new house simply does not bring the returns that an older home does. Countywide over the past five years, new houses have posted 4.8 percent annual appreciation, while older homes saw about 7 percent. In the past year, new houses appreciated 7.5 percent compared with old houses’ 10.4 percent.
I don’t think many Seattle agents would find this information surprising as most homes as so many of the homes around here have increased in value substantially over the past few years. My experience has been that there is a large subset of home buyers that are looking for homes with character in established neighborhoods. In an area like Seattle with very few new homes being built each year, people are finding ways to fix up old homes in ways that make them shine beyond a typical “old” home.
Most importantly, assuming an old home is located in a nice neighborhood, it is relatively easy to add $100K to $200K through straightforward improvements (update kitchens, build out basements/attics, etc), whereas the opportunity to substantially increase the value of new homes is more limited.
This same report included data on the medium home values for Seattle/King County. If you drill down through their menus, you can find out how many homes were sold in your neighborhood, along with the percent that were new and median price.
Unless you’re a recluse, you’ve either seen or heard the words “No Money Down!
I found an excellent post where the author discusses the two methods for showing up high in Google search results. I agree with his conclusion that providing good content is a better (and more long lasting) approach than any attempt to “trick” the search engines. As a matter of fact, I would call that the guiding philosophy of this website. “Provide good content, and they will come!”
If you are thinking of starting a business-related website or blog, and you want to attract lots of hits to your website (why wouldn’t you?) I recommend reading this article:
Put Yourself in Google’s Shoes
The content based approach avoids all this hassle. You provide information rich pages which is what Mr Google and his searchers want. You join the synergy. Google is working for you, not trying to foil your latest trick.
As her husband, I’ve let Anna know that she is not to be influenced by this real estate agent! 🙂
Here’s the story:
The display of one Realtor’s assets draws attention in Belmont Shore.
And here’s the logic:
“It’s kind of flipped people out,” said Heath, who reported receiving almost as many calls from Realtors upset with the ad as those voicing support. “A couple of agents are having a fit about it, but that’s because they just didn’t think of it first.”
My opinion? Go Wendy!
The Seattle PI had an article today describing how things are definitely picking up at the local Boeing facilities around the Puget Sound. This paragraph sums it up pretty well:
The company plans to open a second production line in Renton that will push output there to a record 31 planes a month. It is also requiring some 777 workers in Everett to work overtime and will replace a key executive there amid a series of production problems before it boosts output of that twin-aisle jetliner as well.
None of this comes as a surprise to me as I’ve been noticing a substantial increase in people who looking to move to the area related to Boeing jobs. In addition, some of the housing message boards such as craigslist and trip advisor seem to have a lot more questions about good places to live for people whose jobs are relocating to Everett and/or relocating to Renton.
For home owners, any sustained expansion of jobs to the region is great news and I’m of the opinion that job growth plays a larger role in keeping home prices high than any change in interest rates! The success of the tech industry (Microsoft, Amazon, etc) in the area has done wonders for our home values and with the additional growth from Boeing, the future looks real good for Seattle-area home owners.