Denise Wambsganss
Realtor Your Castle Real Estate

Tuesday, September 28, 2010

Great Time to Purchase a Rental Property !!

Analysis: One-Third of Americans Highly Unlikely to Qualify for a Mortgage Today
RISMEDIA, September 28, 2010--Nearly one-third of Americans are unlikely to qualify for a mortgage because their credit scores are too low, making homeownership out of reach for many. This is according to an analysis of more than 25,000 loan quotes and purchase requests on Zillow Mortgage Marketplace during the first half of September.

Borrowers with credit scores under 620 who requested purchase loan quotes for 30-year fixed, conventional loans were unlikely to receive even one loan quote on Zillow Mortgage Marketplace, even if they offered a relatively high down payment of 15 to 25 percent. Nearly one-third of Americans, or 29.3 percent, has a credit score this low, according to data provided by

Meanwhile, the lowest interest rates went to mortgage borrowers who were among the 47 percent of Americans with excellent credit scores of 720 or above.

In the first half of September, borrowers with credit scores of 720 or above got an average low annual percentage rate (APR) of 4.3 percent for conventional 30-year fixed mortgages. Borrowers with mid-range credit scores between 620 and 719 received APRs between 4.73 and 4.44 percent, with the APR rising as credit score drops. Those with credit scores below 620 received too few loan quotes to calculate average low APR.

For those with mid-range credit scores of 620 to 719, improving one's credit score can mean a significant savings in interest over time. For each 20-point credit score increase, the average low APR declines 0.12 percent, which for a $300,000 home, with a 20 percent down payment, equates to a savings of $6,400 over the life of a 30-year loan.

"We are in an era of historically low mortgage rates, reaching levels not seen in decades. Coupled with four years of home value declines, homes are more affordable than we've seen for years. But the irony here is that so many Americans can't qualify for these low rates, or can't qualify for a mortgage at all," said Zillow Chief Economist Dr. Stan Humphries. "Four years ago, in the era of easy-to-get subprime loans, many borrowers with low scores did buy homes, which in turn helped contribute to a housing bubble. Today's tighter credit is a predictable response by banks after the foreclosure crisis, but also keeps a cap on housing demand, which is important for the greater housing market recovery."

Thursday, September 16, 2010

Rental Vacancy Rate in Metro Denver

Vacancy Rates are at all-time lows !

Vacancy Rates in Metro Denver for 1-4 unit properties
2004 = 13.1%
2005 = 9.5%
2006 = 7.1%
2007 = 4.0%
2008 = 4.2%
2009 = 5.2%
2010 = 3.8%
• At the same time we are experiencing a very strong landlord’s market
• Vacancies are near all-time low’s, currently at 3.8% vacancy for 1-4 unit housing. Single family homes are the easiest to rent and, while not measured specifically, are certainly below the 3.8% vacancy mark
• Bottom line: it’s a great time to be a landlord. Units are full and landlords have the upper hand with tenants.
• Rents are also increasing
Why are vacancies so low?
High occupancy in the rental-housing market is being driven by economic concerns such as job security:
- Many consumers feel it’s less risky to rent a home than buy one
- There are large impediments to buying new homes, even if a consumer wants to
Notion of home buying has changed
Less ability/desire to buy homes = more tenants
What about Loans?
Single family:

- Need 20% down
- 5% on 30 year fixed
2-4 units:

- Need 25% down
- 5% on 30 year fixed
3-4 units:

Need 25% down
- 5.25% on 30 year fixed
Great time to own a Rental property because:
- It is relatively easy to qualify for a loan for a rental property
- Basic requirements: 20% down, a job, 680 FICO, no major hits on the credit score
- Rates are at all-time lows. It can’t really get better than this !
$122,000 property
20% down = $100,000 loan
5% interest on 30 year loan
Principle & Interest = $537
Taxes & Insurance = ~$160
PITI = $700
There are NO NEW APARTMENTS COMING ONLINE AND We are still seeing record low permits pulled for multi-family projects. Great time to own a rental Property.
To brainstorm about the Metro Denver Real Estate Market contact Denise Wambsganss - Realtor with Your Castle Real Estate 303-880-8771 or email

Friday, September 10, 2010

Why Buy a Home Now ?

Now may be the best time to buy property in a generation. Here are just a few reasons why:

Your purchasing power is at an all-time high.
With rates at historical lows, home financing has never been so attractive. Buyers can lock in 30 year fixed rates in the mid-4s, ARMS in the mid-3s. See this chart to grasp the impact of low rates on your payment (even offsetting price reductions greater than we are expecting locally):

A large inventory of competitively priced homes exists.
The media has focused much attention on the nation's foreclosure situation. A primary effect is an influx of distressed properties on the market, expected to continue for at least the next year. This addition of homes to the supply can both stabilize prices and provide buyers unique below-market opportunities. In plain language: there are some great deals out there.

Despite the recent downturn, real estate is a great long-term investment, and Colorado has a solid track record of appreciation.
Compared to investing in the stock market, real estate has performed better over the last 10 years. In addition, Colorado didn't experience the bubble in home prices like the troubled parts of the country. The graph below shows the investment performance of real estate versus the S&P 500, a good measure for the stock market.

Source: FHFA home price data
This was in an article from Elsa Wohlford with Premier Mortgage Group. If you need a good mortgage person let me know and I will connect you with her.

If you want to brainstorm about the Denver Metro Real Estate Market please contact me. I love sharing my knowledge.