You may have seen the headlines last week about the Federal Reserve continuing its policy of keeping interest rates low to stimulate the economy. But you might have missed a major byproduct of that move that's certain to have a direct impact on home real estate: Thirty-year fixed mortgage rates slipped below the five percent mark for the first time in nearly half a year, dipping to 4.9 percent.
Fifteen year fixed rates are just 4.4 percent.
Now, there's nothing more stimulating for home buyers than mortgage money at rates that are about as low as they go. And sure enough, applications for new mortgages jumped by nearly 6 percent last week, according to the Mortgage Bankers Association.
Applications to buy homes using FHA financing soared to the highest share in the history of the Mortgage Bankers' index - which goes back to 1990.
Meanwhile, existing home sale closings took a breather from the rapid increases of the past several months, according to the National Association of Realtors. Sales in August declined by 2.7 percent, but remained 3.4 percent higher than they were in August of 2008, said Lawrence Yun, chief economist for the Realtors.
He attributed the slightly lower rate of closed sales in part to clogs in the system -- more contracts being written, but longer wait times to go to closing, leading to a higher rate of fallouts.
In other key developments:
The index of leading economic indicators, which is produced by the Conference Board and forecasts economic activity three to six months down the road, was up again last month -- by six tenths of a percent.
That was the fifth straight month of higher readings for the index, and would have been higher had unemployment not held it back, according to analysts.
Home prices continued their slow gains, according to the Federal Housing Finance Agency. Its home price index, which is based on Fannie Mae and Freddie Mac transactions, found prices up by three tenths of a point nationwide in the latest survey month.
That coincides with most private price indexes, which have found that we're past bottom and headed back up in most parts of the country.
Finally, the private mortgage insurance industry, which virtually eliminated low-downpayment financing opportunities in many markets during the past year by declaring them "declining" or "distressed," has begun reversing course.
Genworth Mortgage Insurance Company last week removed 63 of its 68 previous designations of "declining markets." That should open up non-FHA cash-out refinancings and low-downpayment home purchase mortgages to thousands of people who'd been squeezed out under the old rules.
This article appeared in Realty Times
Written by: Kenneth R. Harney
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Wednesday, September 30, 2009
Monday, September 28, 2009
RENTING VS. BUYING
How Does Buying Compare to Renting?
Renting offers a lifestyle that’s nearly maintenance-free. That may appeal to you, but consider that renting offers you no equity, no tax benefit, and most likely no protection against regular rent increases.
If your rent has averaged $700 a month for the last 10 years, you’ve spent $84,000 with nothing to show for it. Isn’t it time you invested in yourself instead of your landlord?
Several financing options hold special advantages for first-time buyers or families with limited cash reserves. FHA-insured and VA-guaranteed mortgages can minimize or even eliminate your down payment. You may also consider a lease-purchase agreement, or borrow cash for a down payment from life insurance, profit-sharing or a retirement account.
In addition to tax deductions you’ll likely receive that can partially offset the cost of real estate taxes, insurance and home maintenance, your home may appreciate in value. If you purchase a home that costs $100,000 and the property increases in value only two percent each year, your potential appreciation in just two years is nearly $4,200. And due to changes to the tax code, subject to certain restrictions, up to $250K (or $500K if married filing jointly) of the profit you make when you sell the house is tax-free as long as you own the property for a minimum of 24 months.
This article appeared on cbselectre.com
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Renting offers a lifestyle that’s nearly maintenance-free. That may appeal to you, but consider that renting offers you no equity, no tax benefit, and most likely no protection against regular rent increases.
If your rent has averaged $700 a month for the last 10 years, you’ve spent $84,000 with nothing to show for it. Isn’t it time you invested in yourself instead of your landlord?
Several financing options hold special advantages for first-time buyers or families with limited cash reserves. FHA-insured and VA-guaranteed mortgages can minimize or even eliminate your down payment. You may also consider a lease-purchase agreement, or borrow cash for a down payment from life insurance, profit-sharing or a retirement account.
In addition to tax deductions you’ll likely receive that can partially offset the cost of real estate taxes, insurance and home maintenance, your home may appreciate in value. If you purchase a home that costs $100,000 and the property increases in value only two percent each year, your potential appreciation in just two years is nearly $4,200. And due to changes to the tax code, subject to certain restrictions, up to $250K (or $500K if married filing jointly) of the profit you make when you sell the house is tax-free as long as you own the property for a minimum of 24 months.
This article appeared on cbselectre.com
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Friday, September 25, 2009
STARTING THE BUYING PROCESS
Where do I begin the process of looking for a home?
The first thing you should do is to begin focusing on what you’re looking for in a home. You can start by establishing priorities in the following three areas:
Location: Are you relocating to a new town because of a new job or to be closer to your current job? How will the location of schools, shops, and transportation affect your choice of neighborhood?
Personal Tastes: How large of a home do you need? What style of architecture do you prefer? What type of lot do you prefer? Depending on where you move to, you may have a choice of homes in dozens of styles, sizes, and settings.
Budget: How much home can you comfortably afford? As you consider these issues, do a little research of your own. Look through magazines for ideas about home styles and features. Drive through neighborhoods that appeal to you to see what’s available. Read the real estate listings in the newspaper to learn about current prices in the areas you’re considering. Talk to friends about the features that you’d really like to have in your home. The more knowledgeable you become, the better your final decision is likely to be.
Then sit down and consider carefully all the things you’re looking for in a home. The Homebuyer’s Wish List worksheet later in this section is a good starting point. When you’ve filled it out, you’ll begin to get a good idea of what you’d like your dream home to be.
How do I find the right sales professional to work with? The key word here is "right." While there’s certainly no shortage of qualified sales professionals to choose from, it’s important that you find one who can fully understand your wants, needs and individual tastes, and whose personal and professional judgment you respect.
Today’s buyers also have more choices when it comes to choosing the sales professional who can best represent them in a real estate transaction. Until recent years, virtually all real estate professionals involved in a given transaction worked for the seller. However, a growing number of today’s home buyers are choosing to be represented by a " buyer’s agent," who represents the buyer in contrast to the traditional seller/sales professional relationship.
Many real estate companies throughout the United States have both buyer and seller agencies. A sales professional should present you with a disclosure statement before any working relationship is created. That statement should explain what a buyer’s agent is and does, what a seller’s agent is and does, and what dual agency means. It is very important to remember that real estate firms are governed by laws that can vary by state. Disclosure laws also vary by state.
How do I know how much home I can afford?
We’ve found that affordability is probably the single biggest concern of today’s first-time home buyers. Given the wide range of media coverage regularly devoted to the issue, it’s not surprising that many young families wonder how long it will take them to afford their first home.
Our advice: Don’t sell yourself short. Talk to your real estate professional. A good sales professional is committed to honestly and responsibly working with you to determine your affordable price range. There are many financing options available today, and some include low down payments. Your sales professional will help find an option that fits your budget, and you may be surprised at just how much home you can afford.
For tips on various mortgages and more, see the "Financing" section of this book.
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
Where do I begin the process of looking for a home?
The first thing you should do is to begin focusing on what you’re looking for in a home. You can start by establishing priorities in the following three areas:
Location: Are you relocating to a new town because of a new job or to be closer to your current job? How will the location of schools, shops, and transportation affect your choice of neighborhood?
Personal Tastes: How large of a home do you need? What style of architecture do you prefer? What type of lot do you prefer? Depending on where you move to, you may have a choice of homes in dozens of styles, sizes, and settings.
Budget: How much home can you comfortably afford? As you consider these issues, do a little research of your own. Look through magazines for ideas about home styles and features. Drive through neighborhoods that appeal to you to see what’s available. Read the real estate listings in the newspaper to learn about current prices in the areas you’re considering. Talk to friends about the features that you’d really like to have in your home. The more knowledgeable you become, the better your final decision is likely to be.
Then sit down and consider carefully all the things you’re looking for in a home. The Homebuyer’s Wish List worksheet later in this section is a good starting point. When you’ve filled it out, you’ll begin to get a good idea of what you’d like your dream home to be.
How do I find the right sales professional to work with? The key word here is "right." While there’s certainly no shortage of qualified sales professionals to choose from, it’s important that you find one who can fully understand your wants, needs and individual tastes, and whose personal and professional judgment you respect.
Today’s buyers also have more choices when it comes to choosing the sales professional who can best represent them in a real estate transaction. Until recent years, virtually all real estate professionals involved in a given transaction worked for the seller. However, a growing number of today’s home buyers are choosing to be represented by a " buyer’s agent," who represents the buyer in contrast to the traditional seller/sales professional relationship.
Many real estate companies throughout the United States have both buyer and seller agencies. A sales professional should present you with a disclosure statement before any working relationship is created. That statement should explain what a buyer’s agent is and does, what a seller’s agent is and does, and what dual agency means. It is very important to remember that real estate firms are governed by laws that can vary by state. Disclosure laws also vary by state.
How do I know how much home I can afford?
We’ve found that affordability is probably the single biggest concern of today’s first-time home buyers. Given the wide range of media coverage regularly devoted to the issue, it’s not surprising that many young families wonder how long it will take them to afford their first home.
Our advice: Don’t sell yourself short. Talk to your real estate professional. A good sales professional is committed to honestly and responsibly working with you to determine your affordable price range. There are many financing options available today, and some include low down payments. Your sales professional will help find an option that fits your budget, and you may be surprised at just how much home you can afford.
For tips on various mortgages and more, see the "Financing" section of this book.
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
Wednesday, September 23, 2009
Lake View Property in Lake Tahoe!
Great News for Buyers!If you are looking for a lake view property in Lake Tahoe...
We have the perfect solution!
This wonderful condominium is located in the desirable Lakeshore Terrace complex. It offers two bedrooms plus a sleeping loft, two full baths and a half bath. The master bedroom has a private deck where you can relax and enjoy the gorgeous lake view. There is another lake view deck off the living room. Other features include a two car attached garage, a common pier and clubhouse.
Call us for details!
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Monday, September 21, 2009
Incline Village Parks & Recreation Department - September Highlights
September Highlights for Activities at the Incline Village Recreation Center:
AQUATICS
Youth Swim Lessons: Session 2 begins Oct. 19
Swim Lessons are offered for a variety of ages and abilities. Programs follow the American Red Cross Learn-to-Swim guidelines, and all instructors are Water Safety Instructor certified. Session I begins September 14, so don’t miss out!
Silver Stars Swim Team: Fall session still has room!
Come join North Lake Tahoe’s only recreation swim team, for both competitive and novice swimmers. Anyone interested in the swim team may try it for one week free of charge. Fall Session: September 8 – November 19, 4-5:30pm.
Adult Swim Lessons- Parents, this class is for you!
The Aquatics Department offers two levels of swim lessons for adults (14+): a learn to swim class and an advanced stroke refinement class. Minimum of 3 students per class and maximum 6. Classes may be canceled if minimums are not met. Classes meet Saturdays for four weeks; Session 2 begins October 3-24, 2009.
Youth and Adult Sports
Pee Wee Sports & Kinder Sports:
This is a great introductory sports course for those little ones who love to be active. Participants will learn the basic fundamentals of a variety of sports and popular playground games. The program is organized with fun drills, games, and activities geared for preschool/kindergarten aged youth. Positive social interaction and fun are emphasized. This program meets twice a week for 6 weeks (Mondays and Wednesdays) and begins September 28, so don’t delay, sign-up today! Call 775-832-1310 for more details.
Adult Indoor Soccer: Parents this is for you!
Come play in the only coed soccer leagues offered on the North Shore during the Fall/Winter. The “A” league is a very competitive league with players who play at a high skill level. The “B” league is for those who love the sport, but want to enjoy it at a less competitive, but skilled level. Games are Mondays for A division, Thursdays for B division. Soccer season runs September 28th through December 10, 2009. Registration deadline is September 21, so don’t miss out! Call 775-832-1310 for more information.
Adult Volleyball: Parents this is for you!
Looking for some friendly competition? Here’s your chance to test your skills and have some fun. All teams will play up to 10 league games with the top four teams in each league advancing to the season ending playoffs. Season runs Sept. 29-December 8th. Call 775-832-1310 for more information.
Fitness
Totally Active:
How about a deal for our younger guests? All kids between the ages of 11 and 18 get in for just $4, seven days a week! Children can swim, shoot hoops and workout in the fitness room during limited hours (must be 12 + years and trained on all fitness equipment). This program is not supervised and participants are expected to follow all Recreation Center rules. Days/Hours: Saturday & Sunday: 12:00 pm - 7:30 pm, Monday - Thursday: 12:00 pm - 5:30 pm, Friday: 12:00 pm - 8:00 pm, fee: $4/person.
Cardio Cycle:
Great news! Cardio Cycle is now free to Rec Center Members. These high energy classes are led by motivated instructors who will help you power up the hills, speed through the sprints and sustain maximum endurance on the flats! Cardio Cycle class is free to members. Non-members are welcome to attend class by purchasing an unlimited monthly punch card, 10-visit punch card or daily drop-in are available at the Host Desk. All classes are on a first come, first served basis.
Youth & Family Programs
Kids Club After School Program: Grades: K - 5th. Our energetic, safety minded and fun Youth Development Staff is here to make certain your child has a great after school experience. Youth will get an opportunity to participate in games, create art projects, work on homework and receive healthy and delicious snacks. Scholarships are available. The program does not meet on major holidays or on Snow Days. The Program ends Friday, June 11th. Days: Monday - Friday. Hours: Regular days: 3:00 pm - 6:00 pm. Early release days: 12:45 pm - 6:00 pm. Location: Incline Elementary School - Room A154.
Preschool Dance: Participants will explore a whole new world of dance through rhythm and music and will be exposed to tap, jazz, ballet and creative movement. Two 7 week sessions are available: Thursdays (beginning October 1, 12:15pm–1pm), and Saturdays (beginning October 3, 12:30pm-1:15pm).
Dance Combo: This is an introductory dance class for children ages 5-7. The class is structured to provide a positive environment to learn to dance and socialize with new friends. Tuesdays, 3:30-4:15pm beginning September 29 (7 weeks).
Youth Hip Hop Dance: This high energy class is great for those who enjoy the latest urban pop music. Fun and fast paced, this hip hop class emphasizes rhythm and isolated movements. Thursdays, 7 weeks, beginning Oct. 1, 3:30-4:30 pm, ages: 8-12.
Dance Fusion: This is an introductory dance class for middle school/high school youth. Participants will be exposed to a variety of different dance forms, such as Jazz, Lyrical, Modern, and Hip Hop. Mondays, 7 weeks, beginning September 28, 3:30-4:30pm, ages: 13+.
Teen/Adult Dance Classes: Parents and teens these classes are for you!
Teen/Adult Hip Hop Workshop for beginners/intermediate, Monday, Sept. 28, 7:15-8:45pm. Dancing Through The Decades: Wednesdays, 7 weeks, beginning Sept. 30, 12:30 pm-1:30 pm, ages: 18+.
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
AQUATICS
Youth Swim Lessons: Session 2 begins Oct. 19
Swim Lessons are offered for a variety of ages and abilities. Programs follow the American Red Cross Learn-to-Swim guidelines, and all instructors are Water Safety Instructor certified. Session I begins September 14, so don’t miss out!
Silver Stars Swim Team: Fall session still has room!
Come join North Lake Tahoe’s only recreation swim team, for both competitive and novice swimmers. Anyone interested in the swim team may try it for one week free of charge. Fall Session: September 8 – November 19, 4-5:30pm.
Adult Swim Lessons- Parents, this class is for you!
The Aquatics Department offers two levels of swim lessons for adults (14+): a learn to swim class and an advanced stroke refinement class. Minimum of 3 students per class and maximum 6. Classes may be canceled if minimums are not met. Classes meet Saturdays for four weeks; Session 2 begins October 3-24, 2009.
Youth and Adult Sports
Pee Wee Sports & Kinder Sports:
This is a great introductory sports course for those little ones who love to be active. Participants will learn the basic fundamentals of a variety of sports and popular playground games. The program is organized with fun drills, games, and activities geared for preschool/kindergarten aged youth. Positive social interaction and fun are emphasized. This program meets twice a week for 6 weeks (Mondays and Wednesdays) and begins September 28, so don’t delay, sign-up today! Call 775-832-1310 for more details.
Adult Indoor Soccer: Parents this is for you!
Come play in the only coed soccer leagues offered on the North Shore during the Fall/Winter. The “A” league is a very competitive league with players who play at a high skill level. The “B” league is for those who love the sport, but want to enjoy it at a less competitive, but skilled level. Games are Mondays for A division, Thursdays for B division. Soccer season runs September 28th through December 10, 2009. Registration deadline is September 21, so don’t miss out! Call 775-832-1310 for more information.
Adult Volleyball: Parents this is for you!
Looking for some friendly competition? Here’s your chance to test your skills and have some fun. All teams will play up to 10 league games with the top four teams in each league advancing to the season ending playoffs. Season runs Sept. 29-December 8th. Call 775-832-1310 for more information.
Fitness
Totally Active:
How about a deal for our younger guests? All kids between the ages of 11 and 18 get in for just $4, seven days a week! Children can swim, shoot hoops and workout in the fitness room during limited hours (must be 12 + years and trained on all fitness equipment). This program is not supervised and participants are expected to follow all Recreation Center rules. Days/Hours: Saturday & Sunday: 12:00 pm - 7:30 pm, Monday - Thursday: 12:00 pm - 5:30 pm, Friday: 12:00 pm - 8:00 pm, fee: $4/person.
Cardio Cycle:
Great news! Cardio Cycle is now free to Rec Center Members. These high energy classes are led by motivated instructors who will help you power up the hills, speed through the sprints and sustain maximum endurance on the flats! Cardio Cycle class is free to members. Non-members are welcome to attend class by purchasing an unlimited monthly punch card, 10-visit punch card or daily drop-in are available at the Host Desk. All classes are on a first come, first served basis.
Youth & Family Programs
Kids Club After School Program: Grades: K - 5th. Our energetic, safety minded and fun Youth Development Staff is here to make certain your child has a great after school experience. Youth will get an opportunity to participate in games, create art projects, work on homework and receive healthy and delicious snacks. Scholarships are available. The program does not meet on major holidays or on Snow Days. The Program ends Friday, June 11th. Days: Monday - Friday. Hours: Regular days: 3:00 pm - 6:00 pm. Early release days: 12:45 pm - 6:00 pm. Location: Incline Elementary School - Room A154.
Preschool Dance: Participants will explore a whole new world of dance through rhythm and music and will be exposed to tap, jazz, ballet and creative movement. Two 7 week sessions are available: Thursdays (beginning October 1, 12:15pm–1pm), and Saturdays (beginning October 3, 12:30pm-1:15pm).
Dance Combo: This is an introductory dance class for children ages 5-7. The class is structured to provide a positive environment to learn to dance and socialize with new friends. Tuesdays, 3:30-4:15pm beginning September 29 (7 weeks).
Youth Hip Hop Dance: This high energy class is great for those who enjoy the latest urban pop music. Fun and fast paced, this hip hop class emphasizes rhythm and isolated movements. Thursdays, 7 weeks, beginning Oct. 1, 3:30-4:30 pm, ages: 8-12.
Dance Fusion: This is an introductory dance class for middle school/high school youth. Participants will be exposed to a variety of different dance forms, such as Jazz, Lyrical, Modern, and Hip Hop. Mondays, 7 weeks, beginning September 28, 3:30-4:30pm, ages: 13+.
Teen/Adult Dance Classes: Parents and teens these classes are for you!
Teen/Adult Hip Hop Workshop for beginners/intermediate, Monday, Sept. 28, 7:15-8:45pm. Dancing Through The Decades: Wednesdays, 7 weeks, beginning Sept. 30, 12:30 pm-1:30 pm, ages: 18+.
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Friday, September 18, 2009
Federal Reserve's '5 Tips for Shopping for a Mortgage
Financing the purchase of a home could be the most complex financial decision you'll every endure.
You need all the help you can get.
To help get you started with the basics, the Federal Reserve offers "5 Tips for Shopping for a Mortgage," because, well, the fundamentals always apply.
Don't bite off more than you can chew. Check your budget. You must have a budget so you can estimate what you can afford to pay for a home, including the mortgage, property taxes, insurance, and monthly maintenance and utilities.
You also have to have enough to save for emergencies. Plan ahead to have enough to afford your monthly mortgage payments for several years. Check your credit report to make sure that the information in it is accurate. A higher credit score may help you get a lower interest rate on your mortgage.
Shop around. Online and off, shop lenders, brokers, credit unions, government (city, county state) programs, even seller financing. Shopping around is a bear, but it can save you thousands of dollars.
Understand costs. Shopping around means scrutinizing loan costs and fees not just the annual percentage rate (APR) On any given day, lenders and brokers may offer different interest rates and fees to different consumers for the same loan, even when those consumers have the same loan qualifications. Keep in mind that lenders and brokers also consider the profit they receive if you agree to the terms of a loan with higher fees, higher points, or a higher interest rate.
Learn risks, benefits of loan options. Mortgages have many features -- fixed interest rates, adjustable rates, payment adjustments, interest-only payments, prepayment penalties, balloon payments and more. Consider all the features, including the APR and the settlement costs.
Have your lender calculate how much your monthly payments could be a year from now, and 5 or 10 years from now. A mortgage shopping worksheet can help you identify the features of different loans. Mortgage calculators can help you compare payments and the equity you could build with different mortgage loans.
Get advice from those you trust. Ask family, friends, co-workers, professional associates and others you trust for referrals. Talk with a trusted housing counselor or a real estate attorney that you hire to review your documents before you sign them. You can find a list of counseling resources at NeighborWorks and on the U.S. Department of Housing and Urban Development's (HUD) website or by calling (800) 569-4287.
For more mortgage shopping details, see: "Looking For The Best Mortgage."
Published on Realty Times
Written by Broderick Perkins
September 17, 2009
You need all the help you can get.
To help get you started with the basics, the Federal Reserve offers "5 Tips for Shopping for a Mortgage," because, well, the fundamentals always apply.
Don't bite off more than you can chew. Check your budget. You must have a budget so you can estimate what you can afford to pay for a home, including the mortgage, property taxes, insurance, and monthly maintenance and utilities.
You also have to have enough to save for emergencies. Plan ahead to have enough to afford your monthly mortgage payments for several years. Check your credit report to make sure that the information in it is accurate. A higher credit score may help you get a lower interest rate on your mortgage.
Shop around. Online and off, shop lenders, brokers, credit unions, government (city, county state) programs, even seller financing. Shopping around is a bear, but it can save you thousands of dollars.
Understand costs. Shopping around means scrutinizing loan costs and fees not just the annual percentage rate (APR) On any given day, lenders and brokers may offer different interest rates and fees to different consumers for the same loan, even when those consumers have the same loan qualifications. Keep in mind that lenders and brokers also consider the profit they receive if you agree to the terms of a loan with higher fees, higher points, or a higher interest rate.
Learn risks, benefits of loan options. Mortgages have many features -- fixed interest rates, adjustable rates, payment adjustments, interest-only payments, prepayment penalties, balloon payments and more. Consider all the features, including the APR and the settlement costs.
Have your lender calculate how much your monthly payments could be a year from now, and 5 or 10 years from now. A mortgage shopping worksheet can help you identify the features of different loans. Mortgage calculators can help you compare payments and the equity you could build with different mortgage loans.
Get advice from those you trust. Ask family, friends, co-workers, professional associates and others you trust for referrals. Talk with a trusted housing counselor or a real estate attorney that you hire to review your documents before you sign them. You can find a list of counseling resources at NeighborWorks and on the U.S. Department of Housing and Urban Development's (HUD) website or by calling (800) 569-4287.
For more mortgage shopping details, see: "Looking For The Best Mortgage."
Published on Realty Times
Written by Broderick Perkins
September 17, 2009
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Wednesday, September 16, 2009
What Should You Do When Your HELOC Freezes Over?
Lenders are freezing, slashing, and cutting off home equity lines of credit (HELOC), but there's a growing manual of strategies you can use to avoid or mitigate what could be financially debilitating.
Some say it's better to take the equity money and run before lenders make a move. And why shouldn't you prudently cover your assets?
After all, lenders cover their assets when they reduce your home equity line of credit (HELOC).
When your lender issued you the credit card-like line of credit backed by your home, chances are, your home value was much higher.
Now with shrinking values, lenders want to shake you down to reduce the chance they won't get paid should you default on your home -- which now may be worth less than the total of your outstanding mortgages.
Consider it a home equity loan meltdown as home equity stakes have been stumped.
Maybe you didn't use proper home equity protection practices.
In any event, the Federal Reserve offers the latest come-to-your-rescue tips for dealing with home equity that's been hammered.
• Read the notice your lender sends you. Your HELOC lender must provide you a written notice if they have frozen or reduced your HELOC. Your lender must send the notice to you no later than three business days after the freeze or reduction. The notice also must include information about any other changes to your HELOC.
• Call your lender. Even if you have a good payment record, if your home's value has fallen, your lender may freeze or reduce your HELOC. Contact your lender if you have questions or concerns about a freeze or reduction.
• Learn why your lender froze or reduced your HELOC. A freeze or reduction notice should include specific reasons for the action. The most common reasons for a HELOC freeze or reduction are, again, a decline in the value of your home, or a change in your financial circumstances.
Understanding your lender's reasoning may help if you want to take steps to have your credit line reinstated to its original amount. For example, a lender may not be aware that you made significant equity saving home improvements to help shore up the value of your home and its equity.
Or, if your financial circumstances changed for the worse and that change resulted in a lower credit score, investigate ways to rebuild your credit.
• Ask your lender how to have your HELOC reinstated. Your lender must reinstate your credit privileges when the conditions permitting the freeze or reduction no longer exist. You may need to put in writing your request to have your line of credit reinstated. Once your lender receives your written request, they must promptly investigate and determine whether your HELOC can be reinstated.
• Remember that your lender can impose fees for reinstating your HELOC. Fees include costs for an appraisal or credit report. Your lender cannot, however, charge you a fee to reinstate your credit line once the condition that caused them to freeze or reduce your HELOC no longer exists.
For more information: New federal consumer protections for HELOCs are in the pipeline.
This article appeared in Realty Times
Written by: Broderick Perkins
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Some say it's better to take the equity money and run before lenders make a move. And why shouldn't you prudently cover your assets?
After all, lenders cover their assets when they reduce your home equity line of credit (HELOC).
When your lender issued you the credit card-like line of credit backed by your home, chances are, your home value was much higher.
Now with shrinking values, lenders want to shake you down to reduce the chance they won't get paid should you default on your home -- which now may be worth less than the total of your outstanding mortgages.
Consider it a home equity loan meltdown as home equity stakes have been stumped.
Maybe you didn't use proper home equity protection practices.
In any event, the Federal Reserve offers the latest come-to-your-rescue tips for dealing with home equity that's been hammered.
• Read the notice your lender sends you. Your HELOC lender must provide you a written notice if they have frozen or reduced your HELOC. Your lender must send the notice to you no later than three business days after the freeze or reduction. The notice also must include information about any other changes to your HELOC.
• Call your lender. Even if you have a good payment record, if your home's value has fallen, your lender may freeze or reduce your HELOC. Contact your lender if you have questions or concerns about a freeze or reduction.
• Learn why your lender froze or reduced your HELOC. A freeze or reduction notice should include specific reasons for the action. The most common reasons for a HELOC freeze or reduction are, again, a decline in the value of your home, or a change in your financial circumstances.
Understanding your lender's reasoning may help if you want to take steps to have your credit line reinstated to its original amount. For example, a lender may not be aware that you made significant equity saving home improvements to help shore up the value of your home and its equity.
Or, if your financial circumstances changed for the worse and that change resulted in a lower credit score, investigate ways to rebuild your credit.
• Ask your lender how to have your HELOC reinstated. Your lender must reinstate your credit privileges when the conditions permitting the freeze or reduction no longer exist. You may need to put in writing your request to have your line of credit reinstated. Once your lender receives your written request, they must promptly investigate and determine whether your HELOC can be reinstated.
• Remember that your lender can impose fees for reinstating your HELOC. Fees include costs for an appraisal or credit report. Your lender cannot, however, charge you a fee to reinstate your credit line once the condition that caused them to freeze or reduce your HELOC no longer exists.
For more information: New federal consumer protections for HELOCs are in the pipeline.
This article appeared in Realty Times
Written by: Broderick Perkins
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Monday, September 14, 2009
Buyers of Lease-To-Own Need to Research Property and Seller
Whether you're a buyer who suffered a foreclosure not long ago or you're a long-time renter interested in becoming a homeowner, the lease-to-own option may be good for you. I've written about this before (see my Lease to Buy May Be Good Option column) but a reader recently emailed me wondering where to find these rent-to-own properties. That question caused me take a closer look at this niche market. Here's what I found.
Wendy Patton, author of Rent to Buy, due out this month, talked to me about how to find the rent-to-buy properties and why potential buyers should research not only the property but the seller as well.
Patton recommends looking through Craigslist or the newspaper to find the properties. "I just call up owners [of properties for rent] and talk to them about their home," says Patton. She says your real estate agent can help with this process. Patton finds that many landlords whose properties are for rent actually would consider selling.
"Depending on where you are located in the country, 30 percent to 50 percent would say yes they would," says Patton.
Patton says that homes that have been on the market more than 120 days are a good starting place. She says buyers and their agents should investigate to make sure that the property is not upside down or an REO (real estate owned by the bank). "Banks don't do that yet but some of them might be starting to," says Patton.
The other thing Patton says to check is to see if the home is vacant. Of course, if a home is vacant that can put pressure on homeowners to consider a rent-to-own option. "Most of the time if the [homeowner] has already moved and they're not upside down, they obviously didn't have to sell to move so they're a perfect candidate to be a seller on a lease option or rent to own.
"They need to make sure the seller is not upside down. How do they confirm that? By looking at the mortgage statement through getting a mortgage authorization statement. … They need to make sure that the seller is not in foreclosure or going to go into foreclosure during that option period," says Patton. She says this is critical so that the buyers' payments are protected during the time that they are renting with the option to buy. Patton says buyers need to make certain "that the payment that they're making every month is going to be protected to go against that mortgage as a payment. In other words, instead of just paying the seller directly, maybe they should be paying the lender directly or through a third party that's going to pay the lender so that during that option period it's not swept out from underneath them in foreclosure," says Patton.
"Unfortunately, that's happened many times. Patton says, "The buyer gives the seller $10,000 or whatever the option is and then is making monthly payments when all of a sudden the sheriff shows up at their door and says 'You've got 24 hours to get out. The house has been foreclosed on." So even though the buyers were making payments to the seller, the sellers were not passing on the payments to the lender.
Other areas of concern are how repairs are handled. "Technically the seller is usually responsible for repairs if it's a rental but in a lease-to-own, it can be more equitably split. Maybe the buyer pays the first $500 and the seller pays anything over $500. The repairs are negotiable items," says Patton.
Inspections are absolutely necessary, says Patton. As with all home purchases, an inspection by a professional can help to expose any future problems with a property. The home inspection also allows buyers to identify trouble spots that they may want to use to negotiate repair procedures and price.
One other important consideration for renters interested in becoming buyers, whether you're doing a lease-to-own or not, is to use the rental period time to build or clean up your credit. "There's different credit repair companies that are reputable that can help them repair their credit," says Patton. She adds that it's vital to find a company that guarantees certain criteria that will be a benefit for the money they are spending in the credit repair program. Patton says before you begin a program do your research. "They have to have provisions of what the company is going to do for them and how the company is going to help their credit score". For more information on improving your credit score read my column called, What to do When Credit Card Debt is Keeping You Locked Out of Homeownership.
This article appeared in Realty Times
Written by: Phoebe
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Wendy Patton, author of Rent to Buy, due out this month, talked to me about how to find the rent-to-buy properties and why potential buyers should research not only the property but the seller as well.
Patton recommends looking through Craigslist or the newspaper to find the properties. "I just call up owners [of properties for rent] and talk to them about their home," says Patton. She says your real estate agent can help with this process. Patton finds that many landlords whose properties are for rent actually would consider selling.
"Depending on where you are located in the country, 30 percent to 50 percent would say yes they would," says Patton.
Patton says that homes that have been on the market more than 120 days are a good starting place. She says buyers and their agents should investigate to make sure that the property is not upside down or an REO (real estate owned by the bank). "Banks don't do that yet but some of them might be starting to," says Patton.
The other thing Patton says to check is to see if the home is vacant. Of course, if a home is vacant that can put pressure on homeowners to consider a rent-to-own option. "Most of the time if the [homeowner] has already moved and they're not upside down, they obviously didn't have to sell to move so they're a perfect candidate to be a seller on a lease option or rent to own.
"They need to make sure the seller is not upside down. How do they confirm that? By looking at the mortgage statement through getting a mortgage authorization statement. … They need to make sure that the seller is not in foreclosure or going to go into foreclosure during that option period," says Patton. She says this is critical so that the buyers' payments are protected during the time that they are renting with the option to buy. Patton says buyers need to make certain "that the payment that they're making every month is going to be protected to go against that mortgage as a payment. In other words, instead of just paying the seller directly, maybe they should be paying the lender directly or through a third party that's going to pay the lender so that during that option period it's not swept out from underneath them in foreclosure," says Patton.
"Unfortunately, that's happened many times. Patton says, "The buyer gives the seller $10,000 or whatever the option is and then is making monthly payments when all of a sudden the sheriff shows up at their door and says 'You've got 24 hours to get out. The house has been foreclosed on." So even though the buyers were making payments to the seller, the sellers were not passing on the payments to the lender.
Other areas of concern are how repairs are handled. "Technically the seller is usually responsible for repairs if it's a rental but in a lease-to-own, it can be more equitably split. Maybe the buyer pays the first $500 and the seller pays anything over $500. The repairs are negotiable items," says Patton.
Inspections are absolutely necessary, says Patton. As with all home purchases, an inspection by a professional can help to expose any future problems with a property. The home inspection also allows buyers to identify trouble spots that they may want to use to negotiate repair procedures and price.
One other important consideration for renters interested in becoming buyers, whether you're doing a lease-to-own or not, is to use the rental period time to build or clean up your credit. "There's different credit repair companies that are reputable that can help them repair their credit," says Patton. She adds that it's vital to find a company that guarantees certain criteria that will be a benefit for the money they are spending in the credit repair program. Patton says before you begin a program do your research. "They have to have provisions of what the company is going to do for them and how the company is going to help their credit score". For more information on improving your credit score read my column called, What to do When Credit Card Debt is Keeping You Locked Out of Homeownership.
This article appeared in Realty Times
Written by: Phoebe
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Friday, September 11, 2009
Real Estate Investment 101
Real Estate Investment 101
It could be a good time to invest in real estate, given the abundance of foreclosures and other distressed properties with reduced prices.
It could also be a bad time to invest in real estate, if you don't know what you are doing.
There's the rub.
It's a good time to invest, but it is difficult. Now when you go out to invest you are competing with a dozen offers. The investors are back.
Just like buying a home to live in, taking the real estate investment plunge requires taking stock of your financial goals, planning and lifestyle before taking the plunge.
Pretty much like buying any property.
If you've got the time, the money and the lifestyle that lends itself to managing a real estate investment, you are just about half way there.
However, both halves are pretty big halves.
The National Real Estate Investors Association says you've still got a lot of work to do. Here's how much.
Buy your own home first.
The general rule of thumb is that buying your own home will not only put a roof over your head, but also background you in the full experience of buying and owning property -- financials, market conditions, maintenance and real estate professionals you'll need along the way.
What's more, your first home could later become your first investment property, a property in a market with which you are familiar.
"You could maintain your current residence as a rental and move up into a larger home or better location yourself. This keeps the basis on your original property intact, but gives you an opportunity to move should your life dictate," says Kim DiBenedetto, president of the Monterey County Association of Realtors in Monterey, CA.
There is one exception to the buy-your-own-home-first rule says Cryder.
"If you live with Mom or the cost of your rental housing is low, stay there and purchase investment properties first. If you can rent way below market value, I wouldn't disturb that," said Cryder, who has been an investor since 1968, when he purchased his first property.
However, in today's market, an existing stake in a home can have a down side.
"You will be required to put more money down, most likely a minimum of 25 percent and also have several months in reserves. If you are upgrading from your current residence, your lender will require a minimum of 20 percent equity in your current residence before they will loan to you for another property," said DiBenedetto, also an agent with Coldwell Banker Del Monte Realty in Carmel.
Go back to school.
Turn to the Internet, reputable books, successful investment groups, college and university level courses, even your state's real estate license program. You don't have to actually get a license, but you can become just as educated as a licensed agent. Individual real estate investors, salespeople and others who you've met on the way to investing are also valuable educational resources.
Get professional help.
The same way you find any competent, trustworthy and honest professional is the same way to look for a mentor, investment partner with prior knowledge or investment group. Seek referrals from friends, family, professionals with whom you already conduct business, co-workers and others you trust who've had a satisfactory, successful real estate investing experience.
"Now, more than ever, you need the experience of a competent REALTOR® and lender to guide you through the process," said DiBenedetto.
Learn your investment market.
One market's bubble could be one investor's boom and another investor's bust. A home in one market could give you vacation rental income in a half year sufficient to cover the cost of principal, interest, taxes, insurance, home owner association dues, upkeep and other costs, but still not appreciate. Another home in another market may not bring you sufficient rent in a year's time to cover the cost of owning the property, but might appreciate more than enough to make up for your carrying costs over the long term.
The variables are endless and you'll need to measure your capacity for risk against market conditions.
Exit strategy
Finally, while some experts say you'll also need to develop an exit strategy in terms of unloading properties when they are no longer viable investments, Cryder says if you buy right and stick it out over the loan haul you won't need an exist strategy.
"When you've got the goose that lays the golden egg, be satisfied with the golden egg," he says.
Published in Realty Times
Written by Broderick Perkins
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
It could be a good time to invest in real estate, given the abundance of foreclosures and other distressed properties with reduced prices.
It could also be a bad time to invest in real estate, if you don't know what you are doing.
There's the rub.
It's a good time to invest, but it is difficult. Now when you go out to invest you are competing with a dozen offers. The investors are back.
Just like buying a home to live in, taking the real estate investment plunge requires taking stock of your financial goals, planning and lifestyle before taking the plunge.
Pretty much like buying any property.
If you've got the time, the money and the lifestyle that lends itself to managing a real estate investment, you are just about half way there.
However, both halves are pretty big halves.
The National Real Estate Investors Association says you've still got a lot of work to do. Here's how much.
Buy your own home first.
The general rule of thumb is that buying your own home will not only put a roof over your head, but also background you in the full experience of buying and owning property -- financials, market conditions, maintenance and real estate professionals you'll need along the way.
What's more, your first home could later become your first investment property, a property in a market with which you are familiar.
"You could maintain your current residence as a rental and move up into a larger home or better location yourself. This keeps the basis on your original property intact, but gives you an opportunity to move should your life dictate," says Kim DiBenedetto, president of the Monterey County Association of Realtors in Monterey, CA.
There is one exception to the buy-your-own-home-first rule says Cryder.
"If you live with Mom or the cost of your rental housing is low, stay there and purchase investment properties first. If you can rent way below market value, I wouldn't disturb that," said Cryder, who has been an investor since 1968, when he purchased his first property.
However, in today's market, an existing stake in a home can have a down side.
"You will be required to put more money down, most likely a minimum of 25 percent and also have several months in reserves. If you are upgrading from your current residence, your lender will require a minimum of 20 percent equity in your current residence before they will loan to you for another property," said DiBenedetto, also an agent with Coldwell Banker Del Monte Realty in Carmel.
Go back to school.
Turn to the Internet, reputable books, successful investment groups, college and university level courses, even your state's real estate license program. You don't have to actually get a license, but you can become just as educated as a licensed agent. Individual real estate investors, salespeople and others who you've met on the way to investing are also valuable educational resources.
Get professional help.
The same way you find any competent, trustworthy and honest professional is the same way to look for a mentor, investment partner with prior knowledge or investment group. Seek referrals from friends, family, professionals with whom you already conduct business, co-workers and others you trust who've had a satisfactory, successful real estate investing experience.
"Now, more than ever, you need the experience of a competent REALTOR® and lender to guide you through the process," said DiBenedetto.
Learn your investment market.
One market's bubble could be one investor's boom and another investor's bust. A home in one market could give you vacation rental income in a half year sufficient to cover the cost of principal, interest, taxes, insurance, home owner association dues, upkeep and other costs, but still not appreciate. Another home in another market may not bring you sufficient rent in a year's time to cover the cost of owning the property, but might appreciate more than enough to make up for your carrying costs over the long term.
The variables are endless and you'll need to measure your capacity for risk against market conditions.
Exit strategy
Finally, while some experts say you'll also need to develop an exit strategy in terms of unloading properties when they are no longer viable investments, Cryder says if you buy right and stick it out over the loan haul you won't need an exist strategy.
"When you've got the goose that lays the golden egg, be satisfied with the golden egg," he says.
Published in Realty Times
Written by Broderick Perkins
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
Wednesday, September 9, 2009
New Disclosures Help Mortgage Consumers Know Risk
The Federal Reserve is gearing up with more consumer protection on the home loan front, as it continues its overhaul Regulation Z.
Regulation Z is the wide-reaching Consumer Protection provision of Truth In Lending law enforced by the Federal Deposit Insurance Corporation.
The ever-evolving regulation mandates certain detailed disclosures by financial institutions in the realm of home loans and regulates certain credit card practices and credit billing disputes.
Disclosures help consumers determine if a given borrowing transaction is right for them. The greatest collapse in the housing and mortgage market in 70 years was due, in part, to consumer ignorance that caused them to buy homes they couldn't afford.
"Consumers need the proper tools to determine whether a particular mortgage loan is appropriate for their circumstances," said Federal Reserve Chairman Ben S. Bernanke in a prepared statement.
"It is often said that a home is a family's most important asset, and it is the Federal Reserve's responsibility to see that borrowers receive the information they need to protect that asset," he added.
Effective for applications on or after July 30, 2009, first and second home loan customers, as well as those refinancing have a slew of new benefits.
• Lenders must provide you initial truth-in-lending mortgage cost disclosures within three business days of your application. If not, you can back out.
• Until you receive the initial disclosure, lenders can't collect any fees, except for a credit check. Lenders and brokers previously collected appraisal, credit and other charges at the onset of the application.
• A final truth-in-lending disclosure is due three business days before closing.
• Lenders must give you a copy of the real estate appraisal three business days before the scheduled closing. Lenders often failed to informe a consumer of his or her right to a copy of the appraisal. If you never see an appraisal, you have no idea if the home is worth what you are paying.
• The lender can't close the loan until at least seven-days after applicants have or mailed the initial disclosure. That gives consumers more time to mull over the transaction.
• If there's a change that makes the annual percentage rate rise beyond a set level, say because of rising rates or inaccurate initial information, creditors must provide an additional loan cost disclosure and give you an additional three-business-day waiting period before closing the loan.
Round two
Days before the July 30 provisions took effect, the Fed pushed another round of regulatory upgrades into the public comment pipeline, this time for so-called "closed-end mortgages" and home equity lines of credit "HELOC" consumers.
A closed mortgage is a home loan that can't be paid off until its maturity date -- without substantial prepayment penalties.
A HELOC is a line of credit drawn against the equity in your home. You pay back only what you use, unlike an equity loan which grants you a fixed amount upfront and you must begin paying back immediately.
Proposed provisions for these two types of mortgages will be under discussion for at least four months and may not become law until late this year or early next.
Closed-end mortgage disclosures will focus on potentially risky features including adjustable rates, prepayment penalties, and negative amortization (a feature that cause a loan's balance to rise).
Lenders would have to:
• Improve the disclosure of the annual percentage rate (APR) so it captures most fees and settlement costs.
• Show how the consumer's APR compares to the average rate offered to borrowers with excellent credit.
• Provide final truth-in-lending disclosures so that consumers receive them at least three business days before loan closing.
• Show consumers how much their monthly payments might increase, for adjustable-rate mortgages.
Disclosures, however, aren't always sufficient to keep mortgage consumers out of hot water. Closed mortgage rules would also
• Prohibit payments to a mortgage broker or a loan officer that are based on the loan's interest rate or other terms. Yield spread premiums, mortgage brokers obtained for steering consumers to higher cost mortgages, are targeted by this provision.
• Prohibit a mortgage broker or loan officer from otherwise steering consumers to transactions that are not in their interest in order to increase the mortgage broker's or loan officer's compensation.
For HELOCs the Fed wants to do away with generic disclosures an mandate more specific information about a HELOC that summarizes both the basics and risks at application. Shortly after application, consumers would receive new disclosures that reflect the specific terms of their HELOC.
The proposed rules for HELOCs would also
• Prohibit creditors from terminating an account for payment-related reasons, unless the consumer is more than 30 days late in making a payment.
• Provide additional protections related to account suspensions and credit-limit reductions, and reinstatement of accounts.
During the housing crisis, even consumers with excellent credit had HELOC accounts closed or limits reduced or frozen.
This article appeared in Realty Times
Written by: Broderick Perkins
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Regulation Z is the wide-reaching Consumer Protection provision of Truth In Lending law enforced by the Federal Deposit Insurance Corporation.
The ever-evolving regulation mandates certain detailed disclosures by financial institutions in the realm of home loans and regulates certain credit card practices and credit billing disputes.
Disclosures help consumers determine if a given borrowing transaction is right for them. The greatest collapse in the housing and mortgage market in 70 years was due, in part, to consumer ignorance that caused them to buy homes they couldn't afford.
"Consumers need the proper tools to determine whether a particular mortgage loan is appropriate for their circumstances," said Federal Reserve Chairman Ben S. Bernanke in a prepared statement.
"It is often said that a home is a family's most important asset, and it is the Federal Reserve's responsibility to see that borrowers receive the information they need to protect that asset," he added.
Effective for applications on or after July 30, 2009, first and second home loan customers, as well as those refinancing have a slew of new benefits.
• Lenders must provide you initial truth-in-lending mortgage cost disclosures within three business days of your application. If not, you can back out.
• Until you receive the initial disclosure, lenders can't collect any fees, except for a credit check. Lenders and brokers previously collected appraisal, credit and other charges at the onset of the application.
• A final truth-in-lending disclosure is due three business days before closing.
• Lenders must give you a copy of the real estate appraisal three business days before the scheduled closing. Lenders often failed to informe a consumer of his or her right to a copy of the appraisal. If you never see an appraisal, you have no idea if the home is worth what you are paying.
• The lender can't close the loan until at least seven-days after applicants have or mailed the initial disclosure. That gives consumers more time to mull over the transaction.
• If there's a change that makes the annual percentage rate rise beyond a set level, say because of rising rates or inaccurate initial information, creditors must provide an additional loan cost disclosure and give you an additional three-business-day waiting period before closing the loan.
Round two
Days before the July 30 provisions took effect, the Fed pushed another round of regulatory upgrades into the public comment pipeline, this time for so-called "closed-end mortgages" and home equity lines of credit "HELOC" consumers.
A closed mortgage is a home loan that can't be paid off until its maturity date -- without substantial prepayment penalties.
A HELOC is a line of credit drawn against the equity in your home. You pay back only what you use, unlike an equity loan which grants you a fixed amount upfront and you must begin paying back immediately.
Proposed provisions for these two types of mortgages will be under discussion for at least four months and may not become law until late this year or early next.
Closed-end mortgage disclosures will focus on potentially risky features including adjustable rates, prepayment penalties, and negative amortization (a feature that cause a loan's balance to rise).
Lenders would have to:
• Improve the disclosure of the annual percentage rate (APR) so it captures most fees and settlement costs.
• Show how the consumer's APR compares to the average rate offered to borrowers with excellent credit.
• Provide final truth-in-lending disclosures so that consumers receive them at least three business days before loan closing.
• Show consumers how much their monthly payments might increase, for adjustable-rate mortgages.
Disclosures, however, aren't always sufficient to keep mortgage consumers out of hot water. Closed mortgage rules would also
• Prohibit payments to a mortgage broker or a loan officer that are based on the loan's interest rate or other terms. Yield spread premiums, mortgage brokers obtained for steering consumers to higher cost mortgages, are targeted by this provision.
• Prohibit a mortgage broker or loan officer from otherwise steering consumers to transactions that are not in their interest in order to increase the mortgage broker's or loan officer's compensation.
For HELOCs the Fed wants to do away with generic disclosures an mandate more specific information about a HELOC that summarizes both the basics and risks at application. Shortly after application, consumers would receive new disclosures that reflect the specific terms of their HELOC.
The proposed rules for HELOCs would also
• Prohibit creditors from terminating an account for payment-related reasons, unless the consumer is more than 30 days late in making a payment.
• Provide additional protections related to account suspensions and credit-limit reductions, and reinstatement of accounts.
During the housing crisis, even consumers with excellent credit had HELOC accounts closed or limits reduced or frozen.
This article appeared in Realty Times
Written by: Broderick Perkins
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Monday, September 7, 2009
Federal Reserve's Five Tips For Shopping For a Mortgage
Financing the purchase of a home could be the most complex financial decision you'll ever endure.
You need all the help you can get.
To help get you started with the basics, the Federal Reserve offers "5 Tips for Shopping for a Mortgage," because, well, the fundamentals always apply.
Don't bite off more than you can chew. Check your budget. You must have a budget so you can estimate what you can afford to pay for a home, including the mortgage, property taxes, insurance, and monthly maintenance and utilities.
You also have to have enough to save for emergencies. Plan ahead to have enough to afford your monthly mortgage payments for several years. Check your credit report to make sure that the information in it is accurate. A higher credit score may help you get a lower interest rate on your mortgage.
Shop around. Online and off, shop lenders, brokers, credit unions, government (city, county state) programs, even seller financing. Shopping around is a bear, but it can save you thousands of dollars.
Understand costs. Shopping around means scrutinizing loan costs and fees not just the annual percentage rate (APR) On any given day, lenders and brokers may offer different interest rates and fees to different consumers for the same loan, even when those consumers have the same loan qualifications. Keep in mind that lenders and brokers also consider the profit they receive if you agree to the terms of a loan with higher fees, higher points, or a higher interest rate.
Learn risks, benefits of loan options. Mortgages have many features -- fixed interest rates, adjustable rates, payment adjustments, interest-only payments, prepayment penalties, balloon payments and more. Consider all the features, including the APR and the settlement costs.
Have your lender calculate how much your monthly payments could be a year from now, and 5 or 10 years from now. A mortgage shopping worksheet can help you identify the features of different loans. Mortgage calculators can help you compare payments and the equity you could build with different mortgage loans.
Get advice from those you trust. Ask family, friends, co-workers, professional associates and others you trust for referrals. Talk with a trusted housing counselor or a real estate attorney that you hire to review your documents before you sign them. You can find a list of counseling resources at the U.S. Department of Housing and Urban Development's (HUD) website (http://www.hud.gov) or by calling (800) 569-4287.
This article appeared in Realty Times, Written by: Broderick Perkins
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
You need all the help you can get.
To help get you started with the basics, the Federal Reserve offers "5 Tips for Shopping for a Mortgage," because, well, the fundamentals always apply.
Don't bite off more than you can chew. Check your budget. You must have a budget so you can estimate what you can afford to pay for a home, including the mortgage, property taxes, insurance, and monthly maintenance and utilities.
You also have to have enough to save for emergencies. Plan ahead to have enough to afford your monthly mortgage payments for several years. Check your credit report to make sure that the information in it is accurate. A higher credit score may help you get a lower interest rate on your mortgage.
Shop around. Online and off, shop lenders, brokers, credit unions, government (city, county state) programs, even seller financing. Shopping around is a bear, but it can save you thousands of dollars.
Understand costs. Shopping around means scrutinizing loan costs and fees not just the annual percentage rate (APR) On any given day, lenders and brokers may offer different interest rates and fees to different consumers for the same loan, even when those consumers have the same loan qualifications. Keep in mind that lenders and brokers also consider the profit they receive if you agree to the terms of a loan with higher fees, higher points, or a higher interest rate.
Learn risks, benefits of loan options. Mortgages have many features -- fixed interest rates, adjustable rates, payment adjustments, interest-only payments, prepayment penalties, balloon payments and more. Consider all the features, including the APR and the settlement costs.
Have your lender calculate how much your monthly payments could be a year from now, and 5 or 10 years from now. A mortgage shopping worksheet can help you identify the features of different loans. Mortgage calculators can help you compare payments and the equity you could build with different mortgage loans.
Get advice from those you trust. Ask family, friends, co-workers, professional associates and others you trust for referrals. Talk with a trusted housing counselor or a real estate attorney that you hire to review your documents before you sign them. You can find a list of counseling resources at the U.S. Department of Housing and Urban Development's (HUD) website (http://www.hud.gov) or by calling (800) 569-4287.
This article appeared in Realty Times, Written by: Broderick Perkins
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Friday, September 4, 2009
Real Estate Investment 101
It could be a good time to invest in real estate, given the abundance of foreclosures and other distressed properties with reduced prices.
It could also be a bad time to invest in real estate, if you don't know what you are doing.
There's the rub.
It's a good time to invest, but it is difficult. Now when you go out to invest you are competing with a dozen offers. The investors are back.
Just like buying a home to live in, taking the real estate investment plunge requires taking stock of your financial goals, planning and lifestyle before taking the plunge.
Pretty much like buying any property.
If you've got the time, the money and the lifestyle that lends itself to managing a real estate investment, you are just about half way there.
However, both halves are pretty big halves.
The National Real Estate Investors Association says you've still got a lot of work to do. Here's how much.
Buy your own home first.
The general rule of thumb is that buying your own home will not only put a roof over your head, but also background you in the full experience of buying and owning property -- financials, market conditions, maintenance and real estate professionals you'll need along the way.
What's more, your first home could later become your first investment property, a property in a market with which you are familiar.
"You could maintain your current residence as a rental and move up into a larger home or better location yourself. This keeps the basis on your original property intact, but gives you an opportunity to move should your life dictate," says Kim DiBenedetto, president of the Monterey County Association of Realtors in Monterey, CA.
There is one exception to the buy-your-own-home-first rule says Cryder.
"If you live with Mom or the cost of your rental housing is low, stay there and purchase investment properties first. If you can rent way below market value, I wouldn't disturb that," said Cryder, who has been an investor since 1968, when he purchased his first property.
However, in today's market, an existing stake in a home can have a down side.
"You will be required to put more money down, most likely a minimum of 25 percent and also have several months in reserves. If you are upgrading from your current residence, your lender will require a minimum of 20 percent equity in your current residence before they will loan to you for another property," said DiBenedetto, also an agent with Coldwell Banker Del Monte Realty in Carmel.
Go back to school.
Get professional help.
"Now, more than ever, you need the experience of a competent REALTOR® and lender to guide you through the process," said DiBenedetto.
Learn your investment market.
The variables are endless and you'll need to measure your capacity for risk against market conditions.
Exit strategy
Finally, while some experts say you'll also need to develop an exit strategy in terms of unloading properties when they are no longer viable investments, Cryder says if you buy right and stick it out over the loan haul you won't need an exist strategy.
"When you've got the goose that lays the golden egg, be satisfied with the golden egg," he says.
This article appeared in Realty Times / Written by: Broderick Perkins
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Wednesday, September 2, 2009
August Round Up: Rates Still Near Record Lows
In Freddie Mac's results of its Primary Mortgage Market Survey the 30-year fixed-rate mortgage (FRM) averaged 5.14 percent with an average 0.7 point for the week ending August 27, 2009, up from the previous week when it averaged 5.12 percent. Last year at this time, the 30-year FRM averaged 6.40 percent.
The 15-year FRM this week averaged 4.58 percent with an average 0.7 point, up from the previous week when it averaged 4.56 percent. A year ago at this time, the 15-year FRM averaged 5.93 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.67 percent this week, with an average 0.6 point, down from the previous week when it averaged 4.57 percent. A year ago, the 5-year ARM averaged 6.03 percent.
One-year Treasury-indexed ARMs averaged 4.69 percent this week with an average 0.6 point, unchanged from the previous week when it averaged 4.69 percent. At this time last year, the 1-year ARM averaged 5.33 percent.
"Long-term mortgage rates were barely changed this week, remaining historically low, which is helping to sustain a high level of affordability in the home-purchase market," said Frank Nothaft, Freddie Mac vice president and chief economist." Low rates contributed to existing home sales rising for the fourth consecutive month to an annual pace of 5.24 million in July, the most since August 2007, according to the National Association of Realtors®.
"Similarly, new home sales rose for the fourth month in a row to 0.4 million, the strongest pace since September 2008, the Commerce Department reported. The sales gain helped to reduce the number of new unsold houses on the market to the lowest amount since March 1993. In addition, house prices in June rose nationally for the second consecutive month, according to the Federal Housing Finance Agency's purchase-only house price index."
Buyers Rush to Beat Tax Credit Deadline
Real estate professionals report that first-time home buyers are flooding the sale market, pressed to finalize a deal before the federal government's $8,000 tax credit offer expires on Nov. 30.
Because mortgage approvals, residential inspections, and other steps in the buying process typically take about two months, buyers hoping to take advantage of the incentive will need to have a contract by the end of September.
The new flurry of activity now as house-hunters try to meet the deadline is triggering bidding wars and energizing the property market, which historically is slow at the end of summer. As a result, more homes are getting their full asking price.
Bill Encourages Energy Improvements
A bill that helps home buyers afford energy improvements and encourages banks to offer a discount on loans to pay for reducing energy usage passed the U.S. House in June and could pass the Senate in the fall.
The American Clean Energy and Security Act of 2009 requires Fannie Mae and Freddie Mac to offer discounts on mortgages that include extra cash for making a home more energy efficient.
These discounts, which are already in effect at some lenders like J.P. Morgan Chase & Co. and Bank of America, include savings on closing costs for homes that have Energy Star appliances.
The Federal Housing Administration is offering a plan through its approved lenders that allows borrowers to add the cost of making efficiency improvements into the mortgage, but the extra money doesn’t count toward determining how much loan a borrower can qualify for. For instance, a borrower who adds $5,000 to a $100,000 loan to afford new Energy Star appliances would only have to qualify for $100,000 – not $105,000.
Encouraging Numbers
Encouraging numbers on the real estate front, including new housing construction and sales of existing homes, continue to point toward a sustained recovery in the months ahead.
Home builders -- who had been the most depressed segment of the real estate industry for the past two years -- are pulling permits again and starting to put up new houses.
The Commerce Department reports that single family starts last month were up nearly two percent over the prior month, while permits for future construction jumped by six percent.
Starts and permits are now at their highest levels in ten months.
Meanwhile, existing home sales and price reports from around the country show the breadth of the rebound getting underway.
In five large southern California counties that were near the epicenter of the bust, houses sold in July at the fastest pace in three years, according to MDA DataQuick researchers.
The five counties are San Diego, Orange, Los Angeles, Ventura and Riverside-San Bernadino. Sales there have risen for thirteen consecutive months compared with the previous year's levels. Even median prices are showing modest increases, as foreclosures decline as a percentage of total sales.
But John Walsh, president of DataQuick, cautions against overstating the positive news here though. Walsh believes that "we could bounce along" at this summer's slightly improved levels "for quite awhile" if California's economy doesn't improve.
Some lenders are beginning to take note of the improving numbers and are revising their controversial "declining area" designations that restrict mortgage lending or make it more costly for buyers.
This article appeared in Realty Times
Written by: Realty Times Staff
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
The 15-year FRM this week averaged 4.58 percent with an average 0.7 point, up from the previous week when it averaged 4.56 percent. A year ago at this time, the 15-year FRM averaged 5.93 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.67 percent this week, with an average 0.6 point, down from the previous week when it averaged 4.57 percent. A year ago, the 5-year ARM averaged 6.03 percent.
One-year Treasury-indexed ARMs averaged 4.69 percent this week with an average 0.6 point, unchanged from the previous week when it averaged 4.69 percent. At this time last year, the 1-year ARM averaged 5.33 percent.
"Long-term mortgage rates were barely changed this week, remaining historically low, which is helping to sustain a high level of affordability in the home-purchase market," said Frank Nothaft, Freddie Mac vice president and chief economist." Low rates contributed to existing home sales rising for the fourth consecutive month to an annual pace of 5.24 million in July, the most since August 2007, according to the National Association of Realtors®.
"Similarly, new home sales rose for the fourth month in a row to 0.4 million, the strongest pace since September 2008, the Commerce Department reported. The sales gain helped to reduce the number of new unsold houses on the market to the lowest amount since March 1993. In addition, house prices in June rose nationally for the second consecutive month, according to the Federal Housing Finance Agency's purchase-only house price index."
Buyers Rush to Beat Tax Credit Deadline
Real estate professionals report that first-time home buyers are flooding the sale market, pressed to finalize a deal before the federal government's $8,000 tax credit offer expires on Nov. 30.
Because mortgage approvals, residential inspections, and other steps in the buying process typically take about two months, buyers hoping to take advantage of the incentive will need to have a contract by the end of September.
The new flurry of activity now as house-hunters try to meet the deadline is triggering bidding wars and energizing the property market, which historically is slow at the end of summer. As a result, more homes are getting their full asking price.
Bill Encourages Energy Improvements
A bill that helps home buyers afford energy improvements and encourages banks to offer a discount on loans to pay for reducing energy usage passed the U.S. House in June and could pass the Senate in the fall.
The American Clean Energy and Security Act of 2009 requires Fannie Mae and Freddie Mac to offer discounts on mortgages that include extra cash for making a home more energy efficient.
These discounts, which are already in effect at some lenders like J.P. Morgan Chase & Co. and Bank of America, include savings on closing costs for homes that have Energy Star appliances.
The Federal Housing Administration is offering a plan through its approved lenders that allows borrowers to add the cost of making efficiency improvements into the mortgage, but the extra money doesn’t count toward determining how much loan a borrower can qualify for. For instance, a borrower who adds $5,000 to a $100,000 loan to afford new Energy Star appliances would only have to qualify for $100,000 – not $105,000.
Encouraging Numbers
Encouraging numbers on the real estate front, including new housing construction and sales of existing homes, continue to point toward a sustained recovery in the months ahead.
Home builders -- who had been the most depressed segment of the real estate industry for the past two years -- are pulling permits again and starting to put up new houses.
The Commerce Department reports that single family starts last month were up nearly two percent over the prior month, while permits for future construction jumped by six percent.
Starts and permits are now at their highest levels in ten months.
Meanwhile, existing home sales and price reports from around the country show the breadth of the rebound getting underway.
In five large southern California counties that were near the epicenter of the bust, houses sold in July at the fastest pace in three years, according to MDA DataQuick researchers.
The five counties are San Diego, Orange, Los Angeles, Ventura and Riverside-San Bernadino. Sales there have risen for thirteen consecutive months compared with the previous year's levels. Even median prices are showing modest increases, as foreclosures decline as a percentage of total sales.
But John Walsh, president of DataQuick, cautions against overstating the positive news here though. Walsh believes that "we could bounce along" at this summer's slightly improved levels "for quite awhile" if California's economy doesn't improve.
Some lenders are beginning to take note of the improving numbers and are revising their controversial "declining area" designations that restrict mortgage lending or make it more costly for buyers.
This article appeared in Realty Times
Written by: Realty Times Staff
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
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