Vacaville CA real estate blog and homes for sale, home buying, home selling information Solano realtor– Barbara Adams, REALTOR® Kappel and Kappel

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LIBOR and your adjustable rate payment adjustment ARM loan

June 12th, 2008 12:53 AM

It is not simple to figure or find out what your payment might adjust to when the time comes for your adjustable rate mortgage to change. I will try to help you.

When you bought your home on an adjustable rate you signed a document called a mortgage which is attached to your property trust deed which was recorded with the county you live in. This document states when your payment will change and how much it will change by and it is a legally binding document.

Many people know when it will happen but not how much or for how long. If you already know then you don't need to read on.....otherwise..here goes:

Your payments are on a schedule, it depends upon what you agreed on and what your mortgage states, some payments adjust one year after you buy the house, some two years, others are 3 years fixed rate or even 5 years initial fixed rate.....those are the most likely lucky people, they will get time for the market to change..

Anyhow, if your payment had a rate change last winter you experienced a heck of a large increase in your monthly payment. This is due to the adjustment being measured USUALLY by something called LIBOR.

LIBOR stands for London Interbank Offered Rate and it is figured out by what the banks in London charge each other to borrow money, go figure! Most of us have never even been there and our house payments are based upon some foreign place...but really it is a standard index used in the USA all the time, it's published regularly in the Wall Street Journal and usually the LIBOR index experiences smaller changes than in the regular PRIME RATE that you hear about all the time lately in the newspapers and on tv.

So, your adjustable rate is not compared to or tied to the PRIME RATE, but it is likely related to the action in the PRIME RATE today. That prime rate is the one that Bernanke and his FOMC group meet so regularly to decide if they want to raise, lower or keep it the same....

Well, Bernanke says he is not very likely to reduce his prime rate anymore anytime soon because then inflation will tip toward an unwanted direction. In fact, rumor has it that he may even RAISE the prime rate before the end of this year, with the election coming up in the fall I would bet that somehow the prime rate will take a spotlight in some sort of election or convention uproar or to upstage something relating to the election.

Anyhow, back to the LIBOR and house payments...back to it being used to set the cost of adjustable rate loans...your mortgage paper tells you when your rate will change and most likely it will say it is whatever the LIBOR is plus a certain amount of points above that, and never my friend below it, how would THAT put more money in your lender's hands?

Anyhow, say for instance the LIBOR was at 3% the month before your expected rate change and your trust deed (mortgage) said that your pmt will be LIBOR plus 2 points, in that scenario, your payment would be based upon a 5% rate, which is pretty darn good, somebody buying a house today would not be able to get such a rate unless they paid discount points, which are pretty expensive these days.

So, for the period specified, your payment is now 5% interest rate for say usually one year, and then you look at the LIBOR and add 2 points and there is your new interest rate.

So, if last winter your payment went up and the LIBOR stays low like it is right now, you will likely see a DROP in your house payments this winter! Now, wouldn't THAT be nice?

Of course, the lenders have thought of everything and if the LIBOR goes ultra low, they do usually specify it CAN'T go below 2% below the previous payment, but there is usually NO language stating it can't go above 2% HIGHER, isn't THAT special?

If you live in Solano county, the tax assessor had visited Kappel and Kappel to inform us that they would soon be doing a re-appraisal for properties that have sold in the past 4 years or so...this would mean that your bill for NEXT year MIGHT go lower IF they re=appraise your property. This re-appraisal is a California state law that states that if property values decline the tax assessor should re-appraise you, this is called Proposition 8. (See, the propositions you vote on DO affect your life!)

Each year your property taxes can go up by 1-3% due to Prop 13 which was approved by voters a long time ago, stating the counties cannot raise your taxes by very much in a given year, this put a stop to large property tax increases years ago to people who would be on a fixed income and could no longer afford to pay their taxes.

The larger amount of difference you paid this year MIGHT be refunded to you, but you most likely will not see that refund for over one year from now due to the structure of the county tax billing system, which is a whole new blog in itself!

So, good news, bad news...your house payment could go up, or more likely it will go up, but there is a chance it could go down if your LIBOR stars are lined up.

Last thing....there is more than one LIBOR so you need to read your mortgage to find out what LIBOR you are tied to, there is a one month, a 3 month and a 6 month LIBOR.

If you need a copy of your mortgage you can contact a title company or your lender/mortgage bank will provide you a copy if you ask for it.

Here is a link to a historical LIBOR table showing how it changes over the months, over the years. Very interesting. -Barbara Adams

Barbara Adams, Realtor
Kappel and Kappel Inc
401D Davis St.
Vacaville, Ca. 95688
707-673-7500 Direct Line
707-471-4068 EFax
BarbAdamsRealtor@Yahoo.com
VacaHomes.com

VacaDixonHomes.com
"For your growing Solano family, Barbara Adams cares!"

Posted by Barbara Adams on June 12th, 2008 12:53 AMPost a Comment (0)

Interest Rates

June 30th, 2008 11:40 PM

Rates are creeping up. Time to lock, you cannot lock until you lock in a property to buy!

Call me for details on finding just the right place!

Posted by Barbara Adams on June 30th, 2008 11:40 PMPost a Comment (0)

Knee high by the 4th of July!

June 30th, 2008 11:39 PM

CORN-

This is corn I photographed today just at the border of Dixon and Vacaville, those are the blue ridge mountains in the background, as you can see, the smoke in the air is subsiding.

This is today's Dixon corn crop June 30, 2008 you may not be able to tell because nobody is standing there, but the corn is above your head this year and the 4th of July is coming this Friday. You CAN see the tassles, this is great news for our farmers and our citizens.

An old saying is that if your corn is knee high by the 4th of July it's a good year for your crops...well this is a banner year for food being grown in California in the good old USA..I like seeing all the food being grown this year. Instead of more dirt being pushed around for more houses, the farmers are planting planting planting in almost every available field in Solano county as the crop prices are very impressive so farmers are able to plant and grow and sell their crops this year for a profit. Last year saw many fields lay open and bare due to the amount of foreign imported fruits and vegetables competing with our farmers prices were low.

Solano county has always been an agricultural area, great prime soil, great weather and great people tilling the land. Solano farmers are beaming this year!

I love seeing the tractors gliding down the rows and I see that it is not yet July and some farmers are harvesting their second batch of hay, wheat or alfalfa!
Rice fields are brimming too! New orchards are being planted which is an investment in the future for sure! Vineyards, olive trees, corn, wheat, sudan grass, peaches and the apricots are ripe RIGHT now!
We have several new fruit stands around Solano county this year too! MMMM good!

Posted by Barbara Adams on June 30th, 2008 11:39 PMPost a Comment (0)

Buying a short sale or REO home

June 20th, 2008 4:51 PM

If you purchase a home that is a short sale, foreclosure, auction or bank owned status and the bank insists upon using an out of the area title company, that title company may not be aware of this.... Please note that if the house is located in Vacaville, there is a city ordinance that the garbage company fees are a lien against the property. If the previous owner has not paid their garbage bill, and it is not paid for at closing, YOU will inherit that garbage bill. The previous owner might have NEVER paid their bill.

Posted by Barbara Adams on June 20th, 2008 4:51 PMPost a Comment (0)

Bank owned home purchase?

June 20th, 2008 4:47 PM

If you plan on buying an REO or bank owned home, there are many things to consider, one of them is that if you close beyond your escrow closing date, the banks are usually stating in the contract agreement that the BUYER will pay a daily fee for a LATE closing....EVEN if it's the bank's fault for closing late. Make sure you don't agree to that unless you are willing to.

Posted by Barbara Adams on June 20th, 2008 4:47 PMPost a Comment (0)

Rates

June 20th, 2008 4:45 PM

Interest rates have been creeping up each week for a couple months now....FEDS meet next week...right now the 30 year conventional conforming loan rates are hovering over 6 1/4% -June 20, 2008

Today the Cal Vet rate is 6.1%

Posted by Barbara Adams on June 20th, 2008 4:45 PMPost a Comment (0)

Vacaville real estate market update Bareis MLS stats June 17, 2008

June 17th, 2008 11:28 PM

It's been awhile since I posted a Vacaville single family residence real estate market update:

June 17, 2008 Average Vacaville mls real estate statistics:

391 Vacaville ACTIVE Single Family Home Residence listings
97 Days on market average
$433,673 Average list price
$221/sf average asking price on the current active sfr market
1964sf Average size of the average home on the current Active market

Here is how this data compares to the data search from my first inquiry in August of 2006 (Scroll down to bottom of page to see those figures):
1) The number of active listings went from 572 in Aug '06 to 391 today (June 17,2008).
2) The average marketing time increased by 25 days.
3) The average size of the average home on the market is now a bit larger (no determination on how this information is useful, except to say that the homes being marketed are slightly larger than 18 months ago)
4) The average LIST price has dropped $93,109 while keeping in mind that is a slightly larger average home size too, so let's look at the asking price per square foot...
5) Average list price per square foot is $76 per square foot less now than in August 2006.

The criteria for October 22, 2007 at 11:00 PM:
550 Vacaville ACTIVE Single Family Home Residence listings
99 Days on market average
$503,738 Average list price
$266/sf average asking price on the current active sfr market
1920sf Average size of the average home on the current Active market

The same criteria for August 27, 2006:
572 Vacaville ACTIVE SFR listings
72 Days on market average
$526,782 Average list price
$297/sf average asking price
1812sf Average size

Things have really changed since I first began doing semi-regular snapshots by using the same search criteria over and over through the months (years now) of downturn in the market.

I began the updates in August of 2006, I have watched the number of active listings grow in numbers each week/month until they started subsiding in the past 6 months. I watched the days on the market grow in numbers until they started subsiding mid-winter (January-February 08)

I watched the average SIZE of the average home on the Vacaville ACTIVE listings market grow in size over the past months/years.

I have watched the average asking price decline since August 2006, asking prices followed the market steadily downward until in the past 6 months or so when it leveled out, stayed lean and more recently stayed level.

What has happened is that the number of active listings is the greatest current indicator of what is happening in today's market.

Generally in Vacaville, summer is the season to move due to the school year summer break, good weather, vacation time and the movement of transferred active duty personnel in and out of Travis Air Force base.

What has NOT happened THIS summer is interesting and I am really thinking it will have some impact on the current buyer's market.....What I see is a LOW amount of active listings...the lowest since I started keeping count in August 2006.... the low amount of active single family homes for sale in Vacaville, coupled with a weekly increase since May 1, 2008 of contingent, in escrow pending properties have interchanged themselves and instead of more new listings than sales for all these months, I have seen a DAILY increase in this number, more sales than new listings only means one thing, the inventory is being reduced in the historical sales season.....this means the laws of supply and demand will affect the market as supplies of homes dwindle, the competition of the summertime buyers will increase. The market needs the activity, but there really needs to be homes for people to buy or it is all meaningless.

Next spring I expect the new Kaiser hospital, Genentech and the new State Compensation Insurance offices will be in full swing with hiring or transferring in of new employees and their families to this area. This will bring in an increase for demand in housing of all types. The general election will be over too.

We will see.

Posted by Barbara Adams on June 17th, 2008 11:28 PMPost a Comment (0)

Vacaville Planning Commission meeting Tuesday June 3rd @ 7 pm

June 2nd, 2008 10:58 PM

You won't want to miss this important meeting of the planning commission at City Hall Council Chamber on Merchant Street. The Solano county General Plan is being revised and is expected to make it's final debut by year's end. Be a part of history. This will be a generation of county property use.

Posted by Barbara Adams on June 2nd, 2008 10:58 PMPost a Comment (0)

Elephant Bar Restaurant at Nut Tree Village

June 2nd, 2008 10:55 PM

Coming soon, under construction, another long awaited restaurant will open it's doors to the public in the coming months.

Posted by Barbara Adams on June 2nd, 2008 10:55 PMPost a Comment (0)

Rural North Vacaville Water District Board Rate changes

June 2nd, 2008 10:53 PM

Thursday night at 7 PM 420 Vine St at the Fire Station an IMPORTANT meeting will be held to discuss all the proposed draft changes to the rates for current and future water connection property owners will be held.

Proposed rates will be considerably higher than the current rates so if this affects you it is an important meeting where you can express your concerns and register your disagreement with the changes.

Consumption charges, water rates, connections and all be affected. Reserves, maintenance costs, repairs to the system and other things such as electricity rates have affected the budget of this project.

This is a workshop held in advance of a public meeting to be held on July 1 at Fire Station No 67 at 4135 Cantelow Road, Vacaville. Property owners or ratepayers wanting to provide written protests to the proposed increases, must submit them by 5 p.m. July 1 to the district's business office at 675 Texas Street, Suite 5500, Fairfield, or at the public hearing. Best advice is to get your voice heard in advance.

For more information, call Dan Bellem at 784-6064.

This affects the water rates for many of the rural property owners in North Vacaville area for their domestic water.

Posted by Barbara Adams on June 2nd, 2008 10:53 PMPost a Comment (0)

Rural North Vacaville Water District Board RATE CHANGES DRAFTED

June 2nd, 2008 10:48 PM

For more information, call Dan Bellem at 784-6064.

This affects the water rates for many of the rural property owners in North Vacaville area for their domestic water.

Posted by Barbara Adams on June 2nd, 2008 10:48 PMPost a Comment (0)