Leavenworth Mortgage Crises?

Guest post from Darel Ansley of Peoples Bank in Wenatchee

People have been asking me how the recent mortgage meltdown will affect lending in Leavenworth. The truth is, the 'crises' is actually helping people in Leavenworth. As you might imagine, few people purchase a vacation home with a subprime mortgage, and the typical Leavenworth buyer is at the far end of the spectrum from the person who needs one. So the collapse of this financing doesn't hurt the Leavenworth market at all.

Where the benefit comes from is this: Within the secondary mortgage financing world there is a 'flight to quality'; investors are hungry for Mortgage Backed Securities (MBS) composed of low risk -high quality mortgages. As a result, they are paying more for these good MBSs, which like a bond, drives down the interest rate. The bottom line is, conventional rates for good mortgages are dropping!

Jumbo loans are a little different. A jumbo is a loan amount above $417,000. Secondary financing for Jumbos has also dropped off, as a result, jumbo rates with the large lenders have gone above 8%. Fortunately for smaller banks like ours, the rates have not gone up as much. In fact our rates for jumbo construction loans are not even that high.

The best thing is to talk with a lending professional to guide you through the daily-changing maze of lending programs.

I met with some clients today building a home on East Leavenworth Road, they needed to borrow an amount well above $417,000 for their project. There project had been delayed since Spring, and they were wondering what impact the delay would cost them in financing costs.

In our discussion I learned that they intended to sell a rental house in Seattle during the construction period. I showed them that instead of doing a one step (construction plus final mortgage) jumbo construction loan which would give them a rate of 7.625% as their final mortgage, I could do a simple construction-only loan now and refinance into a conventional loan at lower rates when their project is complete (using the sale proceeds to bring the loan amount down to $417,000). The closing costs for the two-step process are roughly the same as they would be for the all in one loan. The clients feel confident that with current conventional rates around 6.375%, there is not much risk of the conventional rate getting near the 7.625% range. So they came away happy that their home financing would not be as expensive as they feared.

Construction lending can be confusing, if you want to learn more about it you can read my recent article.

One other thought, with conventional rates dropping, and all the appreciation in recent years in Leavenworth propeties, we may be headed into one of the only refinance booms in the industry. You never know.

Leavenworth construction continues to boom, I am currently working on six construction loans within the Leavenworth market. So where the mortgage meltdown may lead to some bargain properties in Detroit, the bargains in Leavenworth are today's prices compared to where they will be in the future. Geordie can explain the supply/demand dynamics which make that a reality.

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Allyson and Geordie Romer

Leavenworth real estate agents - Allyson and Geordie Romer

For over a decade, Allyson and Geordie have been serving clients in the Leavenworth-area real estate market. Together, they work tirelessly to stay on top of the regional market and present the most relevant opportunities to their clientele.

When not in the office, they can be found exploring the endless recreation opportunities of the area in all of its seasons.

 

Testimonials

 

Geordie provided excellent real estate representation! We appreciated his detailed knowledge of the market, his up front and honest approach, and his negotiation skills.
As reviewed on Zillow  – 

- Laura Anderson

 

 

As “west siders” looking for a getaway near Leavenworth, Geordie provided insight … his knowledge of design features important in a “snowy winter wonderland” was appreciated. Thanks Geordie!
As reviewed on Zillow  –
 

- Jean Stern

 

 

Geordie made this somewhat complicated transition easier for us…going above and beyond to help us work through issues that came up during the sale of our parents home. We appreciated his knowledge, attentiveness to details and his willing spirit.
Our family is grateful for Geordie!
As reviewed on Zillow  – 

- Terry Foster

 

 

Geordie was great in every way. We have been looking in the Leavenworth area for some time, and Geordie was absolutely the best for local knowledge, history and depth on neighborhoods, developments and the local market trends. He was very quick to respond (even when he was on his vacation) and worked very diligently to get all of our questions answered in a very timely fashion. We would recommend him highly to anyone looking to buy or sell a home. Very friendly, and helped us navigate all of the local options before we made an offer on the property that we purchased. Thank you, Geordie!

As reviewed on Zillow  – 

- Ryan Olsen

 

 

It was such a pleasure to work with Geordie and his wife, Allyson on our cabin purchase. They showed us a variety of locations, listened to what we wanted and helped us find the perfect match. Everything was smooth and not stressful, just relaxed and easy. We would definitely recommend Geordie and use him again if the need arises!

As reviewed on Zillow  – 

- Cammie Schlosser

 

Moving to Leavenworth?

Are you looking for a cabin or a condo in Leavenworth that your family can use as a home base when climbing, skiing or hiking around Leavenworth or Lake Wenatchee?

Maybe you rent a house here and have decided to stay, surprised how a summer of rafting somehow turned into seven years.

Maybe it’s time to escape the hustle of the big city (and its rain) and move to Leavenworth with its four seasons.

Maybe you bought a condo years ago, don’t seem to use as much, and it’s time to sell.

Whatever your motivation, we are here to help. If you are buying a home, the best place to start is with our Homebuyer’s Guide to Leavenworth.