Housing Trends Newsletter

Here is the link to my current Housing Trends Newsletter. You can always go to my website for the link to the most recent HTN.

10 Reasons to Buy a Home

Reprinted from REALTOR® Magazine, September 2010 with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2010. All rights reserved. 

Time magazine is being overly pessimistic in its recent cover piece that called into question the benefits of homeownership. In fact, now is a great time to buy. And, what's more, tomorrow will be a great time to own, because the fundamental strength of homeownership hasn't changed. 

Why is now a great time to buy? Here are 10 reasons:

1. You can get a good deal. Prices are down 30 percent on average. They're at a level that makes sense for people's income.  

2. Mortgages are cheap. At 4.3 percent on average for a 30-year fixed-rate mortgage, your costs to own are down by a fifth from two years ago. 

3. You can save on taxes. When you add up the deductions for mortgage interest and others, the cost of owning can drop below renting for a comparable place. 

4. It'll be yours. The one benefit to owning that never changes is that you can paint your walls orange if you want (generally speaking; there might be some community restrictions). How many landlords will let you do that?   

5. You can get a better home. In some markets, it's simply the case that the nicest places are for-sale homes and condos.  

6. It offers some inflation protection. Historically, appreciation over time outpaces inflation.  

7. It's risk capital. If the economy picks up, you stand to benefit from that, even if you're goal is just to have a nice place to live.  

8. It's forced savings. A part of your payment each month goes to equity.  

9. There is a lot to choose from. There are some 4 million homes available today, about a year's supply. Now's the time to find something you like and get it.  

10. Sooner or later the market will clear. The U.S. is expected to grow by another 100 million people in 40 years. They have to live somewhere. Demand will eventually outpace supply.   

Source: Wall Street Journal, Brett Arends (9/16/10)
Reprinted from REALTOR® Magazine, September 2010 with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2010. All rights reserved.

4 Loan Programs You Need to Know About

Article by:  by Dean Hartman on September 16, 2010 
Courtesy of Keeping Current Matters 

While a vast majority of all mortgage products are fairly “vanilla”, there are a couple of other flavors of loans that, if you meet the criteria, may help you get approved, or may help make your purchase more affordable monthly, or lessen your need for as much cash to close. Recognize that each of these loan programs are all fully documented loans for income, assets and credit worthiness, but at the same time they have nuances that can be powerful for many borrowers.

 

1. VA Loans

As a country, we need to honor those who have served. For eligible Veterans, 100% financing is available up to a $417,000 Purchase Price which may include a seller’s concession to cover closing costs. As an insurer of the loans, the VA charges a Funding Fee which can range from 0-3.3% of the loan amount based on the loan-to-value and/or whether this is the first time the veteran is using the benefit or not. (Consult your mortgage professional for your personal situation.) What is terrific is that the VA Funding Fee can be added into the loan amount and is not a required cash outlay for the customer at closing. Talk to your loan officer about the VA’s unique approach to income qualifying, credit analysis and who is eligible to co-sign. And REMEMBER, FIRST TIME HOMEBUYING VETERANS ARE STILL ELIGIBLE FOR THE $8000 TAX CREDIT, IF THEY GET IN CONTRACT BEFORE APRIL 30, 2011 AND CLOSE BY JUNE 30, 2011!!!

2. USDA Loans

If your home is in an eligible location (typically rural in nature….heck, this is a program available from the US Department of Agriculture) and you fall below the ascribed income limits, the USDA loan is a wonderful option to explore. Up to 100% financing with a financed 2% Guarantee Fee at typically lower rates than conventional loans and NO MONTHLY MORTGAGE INSURANCE PREMIUM! There are no asset or reserve requirements and closing costs can be totally gifted to the buyer. There are even special provisions for repairs to be financed into the loan, if the appraisal has room. Most loan professionals are unaware of the magic of this loan….talk to one who knows it, if you think you could qualify. Check out http://www.rurdev.usda.gov/rhs/sfh/brief_rhguar.htm to see location and income qualifications.

3. 203K Loans

Often discussed in this space, the FHA’s 203K Program is one loan that is used for both the purchase and renovation of a home. With so much of the housing inventory needing some sort of rehabilitation, this loan program’s popularity is at an all time high. Read past blogs on the qualifications and process, and make sure your loan professional explains the plusses and minuses for you.

4. Purchase Reverse Mortgages

For Seniors over 62, regardless of their income or credit history, the ability to borrow approximately 50% of the purchase price of a home and have NO MORTGAGE PAYMENT is certainly something to explore. With retirement plans slashed and anticipated equity shrunk, many seniors who had hoped to buy their home “all cash” are now unable to do that. A Purchase Reverse can be a perfect solution to help seniors make the transition to the next phase of their lives. Counseling requirements and a good loan officer can explain the logistics and opportunity.

Today, I wanted to say that there are still some wrinkles out there in the mortgage world. To know you are making choices after you have looked at all your options, make sure you are working with an expert loan officer who understands how the programs work and if you should entertain them.

FHA NEWS and RELATED ARTICLES

Courtesy of FHA.com

An FHA refinance mortgage or FHA loan allows for the refinance or purchase of a home with a low down payment. These loans are great for the first-time homebuyer.  Below are several articles that may be valuable to those looking to purchase a home with an FHA loan and those who are currently "underwater with a non-FHA loan.

The FHA Short Refinance Option—Help For Non-FHA Borrowers

FHA Short Refinancing is only for borrowers who are underwater on properties that are considered the borrower’s primary residence, and is intended only for those with non-FHA guaranteed home loans.

What You Should Know About FHA Loan Origination Fees

If you want to apply for a loan to buy a house with an FHA mortgage, one important fact you should know is that the FHA does not set interest rates, regulate closing costs or negotiate discount points on the mortgage.

2010 BAH Rate Protection

The Basic Allowance for Housing, or BAH for short, is a military benefit that comes in handy when applying for an FHA loan or VA home loan because it provides the lender with an easy-to-measure proof of a veteran’s ability to pay a mortgage.

Some Experts Weary of Government Intervention

Courtesy of REALTOR®mag 

An increasing number of economists and housing analysts are urging the government to step back and let the housing market fall where it may.

''Housing needs to go back to reasonable levels,'' says Anthony B. Sanders, a professor of real estate finance at George Mason University. ''If we keep trying to stimulate the market, that's the definition of insanity.''

''We have had enough artificial support and need to let the free market do its thing,'' housing analyst Ivy Zelman says.
Even the National Association of Home Builders hasn’t been supportive of another tax credit, because its members believe that in order for one to have impact it would have to be worth at least $25,000 — an unlikely proposition.
''Our members are saying that if we can't get a very large tax credit — one that really brings people off the bench — why use our political capital at all?'' says David Crowe, NAHB's chief economist.

Source: The New York Times, Davie Streitfeld (09/06/2010)

Copyright National Association of REALTORS®. Reprinted with permission