Gaining Perspective on the Real Estate Market: a letter from Geoff Wood, Windermere CEO

According to the most recent MLS figures in King, Snohomish and Pierce counties
combined, 982 homes were sold in the week ending March 29. Since January 1,
9,524 homes were bought and sold in the same tri-county region.
What’s the point?

Simply, that since the “meltdown” of the mortgage industry, people were still able to get
financing (mortgage loans) for homes totaling $4.028 billion in value.

And what’s the point of that? People can still get a mortgage loan. Yes, despite news reports to the contrary, the mortgage industry is alive and well. The only thing that has changed is the removal of sub-prime loans. And that is a good thing. In other words, mortgages are still available when potential homebuyers follow the same basic rules that have existed for nearly a hundred years.

For those of you thinking about buying a home here are the basic guidelines you should keep in mind:

° A good rule of thumb is that your monthly mortgage payment should not exceed 30% of your gross monthly income.

° Another ratio that lenders look at is your total housing payment (principal, interest, taxes, insurance) plus any revolving or installment debts should not exceed 40% of your gross monthly income. Revolving debts are credit cards. Installment debts have the same monthly payment each month such as car loans.

Ok, so this means you can borrow 3-4x your gross annual income on a home depending on your debts. So, if your household income is $100K per year you can borrow as much as $400K with as little as 5% as a down payment.

That’s it. Mortgages are available. You can buy a house. Interest rates are averaging 6%, which is well below historic averages. The basic rules have never changed. The President of Windermere Mortgage Services said to me recently:
“Bottom line is that if you pay people back what you borrow, have a little bit of down payment and a verifiable job and income, you can get a great loan at a great price.”

Yes, there is economic uncertainty. But what is certain is that there is a lot of inventory and mortgage money available.

Welcome to Vashon Island, Washington

As you step off the ferry onto our unique island you will find yourself in a slower paced and close knit community - like a step back in time.

A rural paradise just 15 minutes from Seattle or Tacoma