Real Estate Articles

Housing

various writers — Tue, 23 Feb 2010 14:57:00 GMT

	February 23rd, 2010

Recent News: Home Prices Rebounding

Dear Lending Lowdown Subscriber,

Recent news is providing strong indicators that the housing market has indeed stabilized and is on its way to recovery.

Home prices rose for the seventh straight month in December of 2009 according to the latest Case-Shiller Index released earlier today. Housing prices are one of the strongest factors in determining the strength of a recovery and right now we are seeing increasing price stability in what has been a very volatile market.
Tomorrow the government will report the new-home sales figures for January – economists are expecting a 4% increase over December.
Home-improvement retailer Lowe’s reported a better-than-expected profit for the fourth quarter and they expect 4% to 6% growth this year.
Other companies with ties to the housing market such as top homebuilders including Lennar, D.R. Horton, & KB Home, affirmed the signs of a turnaround by reporting surprise fourth-quarter profits.
According to the National Association for Business Economics, “the housing market rebound is considered ongoing and sustainable,” and they estimate that home prices will rise 1.5% this year and another 2.6% in 2011.

All these signs indicate that 2010 will be a better year for the housing market, which looks to be slowly but surely recovering. Lowe’s CEO Robert Aniblock said that “the worst of the economic cycle is likely behind us.”

While this is great news for the economy overall, this recent trend may ultimately result in an increase in home prices along with a decline in available inventory over time. And if you haven’t read the 2010 Mortgage Rate Outlook by HSH Associates then you should. The HSH forecast lays out a case for higher mortgage rates by year end, ending a trend of historically low rates.

So if you’re in the market for a new home loan or are looking to refinance your house, we urge you to act now because this window of opportunity of low home prices and record low interest rates won’t last forever!

Take Advantage of the Benefits of Refinancing While Rates are Still Low

Refinancing your home with a lower interest rate could save you thousands over the course of your loan. It can also make your monthly payments more manageable by extending your remaining loan term. With interest rates likely to rise in the future, another benefit of refinancing would be to reduce the risk of an adjustable rate mortgage by stabilizing the monthly payments using a fixed-rate mortgage.

First-Time Home Buyer $8,000 Tax Credit Expiring in April 2010

And if you are a first-time home buyer (have not owned a home for 3 years) you still have time to take advantage of an $8,000 tax credit to buy your home. The tax credit, initially set to expire at the end of November 2009, has been extended to April 30, 2010.

Highlights of First Time Home Buyer Tax Credit:

The tax credit doesn't have to be repaid
The credit is available for homes purchased between November 7, 2009 and April 30, 2010
Income limits have been increased: single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit (up from $75,000 / $150,000); smaller credits may be available at reduced rates for homebuyers earning above this amount.

Additionally, a $6,500 credit has been added for existing homeowners who buy a new residence if they have lived in their current one for at least five consecutive years in the last eight years.

So if you are in the market to refinance or get a new home or equity loan, now may be the time since these record low rates won’t last forever. Act now to find a lender and get free expert advice in your area!

Source: CNN.com, NPR.org, standardndpoors.com, HSH.com

Permalink | Comments

Housing

various writers — Tue, 23 Feb 2010 14:05:00 GMT

Forbes.com

Improving Prices May Herald Housing Recovery

Kelsey Swanekamp, 02.23.10, 12:50 PM EST

S&P/Case-Shiller reports higher prices for seventh-straight month, but annual prices are still falling.

The housing market seems to be on the mend, at least according to a closely watched gauge of prices that recorded its seventh-straight monthly increase in December.

The S&P/Case-Shiller 20-city Home Price Index showed a 0.3% improvement for December over November when seasonally adjusted. The non-seasonally-adjusted numbers showed a 0.2% decline.

Home prices are still below year-ago levels. The December figure was down 3.1% from the same month in 2008, but that was better than November's 5.3% year-over-year decline. For the fourth quarter the index fell 2.5% from a year earlier.

Even with the annual declines, the string of monthly increases is generating some flickers of confidence that the hard-hit housing market has stabilized.

Elie Hirschfeld, president of Hirschfeld Properties, said the housing market has already begun to stabilize in New York City. "In previous recessions values went so low that you could virtually give away units," he said. But in this recession he doesn't see this as the case. "Pricing has gone below bubble-burst level, but it’s settling in to fair value."

Earlier in February the Department of Commerce reported that housing starts were up 2.8% in January to a seasonally adjusted 591,000 units, an encouraging sign that home builders have enough visibility on future demand to increase construction. (See "Housing Data Improves, Long Road Ahead.")

Permalink | Comments

Home Inspections

various writers — Tue, 16 Feb 2010 16:49:00 GMT

10 Questions to Ask Home Inspectors

Before you make your final buying or selling decision, you should have the home inspected by a professional. An inspection can alert you to potential problems with a property and allow you to make an informed decision. Ask these questions to prospective home inspectors:

1. Will your inspection meet recognized standards? Ask whether the inspection and the inspection report will meet all state requirements and comply with a well-recognized standard of practice and code of ethics, such as the one adopted by the American Society of Home Inspectors or the National Association of Home Inspectors. Customers can view each group's standards of practice and code of ethics online at www.ashi.org or www.nahi.org. ASHI's Web site also provides a database of state regulations.

2. Do you belong to a professional home inspector association? There are many state and national associations for home inspectors, including the two groups mentioned in No. 1. Unfortunately, some groups confer questionable credentials or certifications in return for nothing more than a fee. Insist on members of reputable, nonprofit trade organizations; request to see a membership ID.

3. How experienced are you? Ask how long inspectors have been in the profession and how many inspections they've completed. They should provide customer referrals on request. New inspectors also may be highly qualified, but they should describe their training and let you know whether they plan to work with a more experienced partner.

4. How do you keep your expertise up to date? Inspectors' commitment to continuing education is a good measure of their professionalism and service. Advanced knowledge is especially important in cases in which a home is older or includes unique elements requiring additional or updated training.

5. Do you focus on residential inspection? Make sure the inspector has training and experience in the unique discipline of home inspection, which is very different from inspecting commercial buildings or a construction site. If your customers are buying a unique property, such as a historic home, they may want to ask whether the inspector has experience with that type of property in particular.

6. Will you offer to do repairs or improvements? Some state laws and trade associations allow the inspector to provide repair work on problems uncovered during the inspection. However, other states and associations forbid it as a conflict of interest. Contact your local ASHI chapter to learn about the rules in your state.

7. How long will the inspection take? On average, an inspector working alone inspects a typical single-family house in two to three hours; anything significantly less may not be thorough. If your customers are purchasing an especially large property, they may want to ask whether additional inspectors will be brought in.

8. What's the cost? Costs can vary dramatically, depending on your region, the size and age of the house, and the scope of services. The national average for single-family homes is about $320, but customers with large homes can expect to pay more. Customers should be wary of deals that seem too good to be true.

9. What type of inspection report do you provide? Ask to see samples to determine whether you will understand the inspector's reporting style. Also, most inspectors provide their full report within 24 hours of the inspection.

10. Will I be able to attend the inspection? The answer should be yes. A home inspection is a valuable educational opportunity for the buyer. An inspector's refusal to let the buyer attend should raise a red flag.

Source: Rob Paterkiewicz, executive director, American Society of Home Inspectors, Des Plaines, Ill., www.ashi.org.

Permalink | Comments

Mortgages

various writers — Tue, 16 Feb 2010 16:46:00 GMT

What You Can Do to Improve Your Credit
Credit scores, along with your overall income and debt, are big factors in determining whether you’ll qualify for a loan and what your loan terms will be. So, keep your credit score high by doing the following:

1. Check for and correct any errors in your credit report. Mistakes happen, and you could be paying for someone else’s poor financial management.

2. Pay down credit card bills. If possible, pay off the entire balance every month. Transferring credit card debt from one card to another could lower your score.

3. Don’t charge your credit cards to the maximum limit.

4. Wait 12 months after credit difficulties to apply for a mortgage. You’re penalized less for problems after a year.

5. Don’t order items for your new home on credit — such as appliances and furniture — until after the loan is approved. The amounts will add to your debt.

6. Don’t open new credit card accounts before applying for a mortgage. Too much available credit can lower your score.

7. Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.

8. Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management.

This information is copyrighted by the Fannie Mae Foundation and is used with permission of the Fannie Mae Foundation. To obtain a complete copy of the publication, Knowing and Understanding Your Credit, visit www.homebuyingguide.org.

Permalink | Comments

Mortgages

various writers — Tue, 16 Feb 2010 16:39:00 GMT

How Big of a Mortgage Can I Afford?

Not only does owning a home give you a haven for yourself and your family, it also makes great financial sense because of the tax benefits — which you can’t take advantage of when paying rent.

The following calculation assumes a 28 percent income tax bracket. If your bracket is higher, your savings will be, too. Based on your current rent, use this calculation to figure out how much mortgage you can afford.

Rent: _________________________

Multiplier: x 1.32

Mortgage payment: _________________________

Because of tax deductions, you can make a mortgage payment — including taxes and insurance — that is approximately one-third larger than your current rent payment and end up with the same amount of income.

For more help, use Fannie Mae’s online mortgage calculators.

Permalink | Comments

Buyers

various writers — Tue, 16 Feb 2010 16:39:00 GMT

8 Tips to Guide for Your Home Search

1. Research before you look. Decide what features you most want to have in a home, what neighborhoods you prefer, and how much you’d be willing to spend each month for housing.

2. Be realistic. It’s OK to be picky, but don’t be unrealistic with your expectations. There’s no such thing as a perfect home. Use your list of priorities as a guide to evaluate each property.

3. Get your finances in order. Review your credit report and be sure you have enough money to cover your down payment and closing costs. Then, talk to a lender and get prequalified for a mortgage. This will save you the heartache later of falling in love with a house you can’t afford.

4. Don’t ask too many people for opinions. It will drive you crazy. Select one or two people to turn to if you feel you need a second opinion, but be ready to make the final decision on your own.

5. Decide your moving timeline. When is your lease up? Are you allowed to sublet? How tight is the rental market in your area? All of these factors will help you determine when you should move.

6. Think long term. Are you looking for a starter house with plans to move up in a few years, or do you hope to stay in this home for a longer period? This decision may dictate what type of home you’ll buy as well as the type of mortgage terms that will best suit you.

7. Insist on a home inspection. If possible, get a warranty from the seller to cover defects for one year.

8. Get help from a REALTOR®. Hire a real estate professional who specializes in buyer representation. Unlike a listing agent, whose first duty is to the seller, a buyer’s representative is working only for you. Buyer’s reps are usually paid out of the seller’s commission payment.

Permalink | Comments

Mortgages

various writers — Tue, 16 Feb 2010 12:44:00 GMT

5 Factors That Decide Your Credit Score

Credit scores range between 200 and 800, with scores above 620 considered desirable for obtaining a mortgage. The following factors affect your score:

1. Your payment history. Did you pay your credit card obligations on time? If they were late, then how late? Bankruptcy filing, liens, and collection activity also impact your history.

2. How much you owe. If you owe a great deal of money on numerous accounts, it can indicate that you are overextended. However, it ïs a good thing if you have a good proportion of balances to total credit limits.

3. The length of your credit history. In general, the longer you have had accounts opened, the better. The average consumer's oldest obligation is 14 years old, indicating that he or she has been managing credit for some time, according to Fair Isaac Corp., and only one in 20 consumers have credit histories shorter than 2 years.

4. How much new credit you have. New credit, either installment payments or new credit cards, are considered more risky, even if you pay them promptly.

5. The types of credit you use. Generally, it is desirable to have more than one type of credit -installment loans, credit cards, and a mortgage, for example.

For more on evaluating and understanding your credit score, visit www.myfico.com.

Permalink | Comments