Before You Sell

Deciding to put your home on the market can bring on a wide range of emotions. You may feel excitement at the prospect of moving on or moving up. Some sellers feel anticipation about what the future holds and about what kind of deals buyers may bring to the table.

On the opposite end of the spectrum you may be feeling sadness or even regret. That's because selling your house can feel a lot life selling your home. Any and all of these emotional responses are normal! In order to stick to your guns and to keep on the sunnier side of the selling process it's important to do five key things before you sell. Feeling prepared and in control of a situation is paramount in feeling good about your decision.

Here are the five pre-selling tips:

Organize Paperwork: You most likely have papers regarding any home warranties. Prospective buyers are going to want to have these. Having them ready for viewing is a great selling point. You might also consider putting together a list of current contacts for pool maintenance, lawn care, and even repair work companies.

Get an Inspection: Even almost new homes can have hidden damage. Most every buyer in today's market will be getting an inspection. Beat them to the punch and have your own inspection performed so that you are not surprised come negotiation time.

Perform Repairs/Get Estimates: Having your own inspection gives you the time to identify problem areas and either repair them or get estimates to have ready for prospective buyers. They'll love how organized and up-front you are!

Get Organized: Start packing as soon as you decide to list your home. Removing or packing away some of your personal belonging has two great benefits. First, it allows your home some breathing room to be staged and cleaned for showings (see #5). Buyers want to be able to see the house, not your stuff. Second, it starts the process of moving on. As you pack up your stuff you'll find that the house will feel less and less familiar, which can be great for letting go of attachment.

Stage: This means it's time to amp up your curb appeal for starters. Trim trees and shrubs and pick up any debris from your yard. Keep you lawn in showing ready state all year around. You should also consider staging outdoor areas with freshly potted flowers, comfy chairs, and even outdoor accessories, such as lanterns, throws, and dinnerware.

You may wonder what these very practical tasks have to do with emotions, but the truth is they are so inextricably linked! Our experiences dictate our emotions. So, take the time to prepare for the selling process. Dot all your i's and cross all your t's and then sit back and enjoy your journey into a new stage of life!


Written by Carla Hill
June 14, 2012

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Nevada gaming win sees big gain in February — expect at North Tahoe

CARSON CITY, Nev. — Welcome back, Joe Six Pack.

Resorts across the state are hailing February's gaming numbers as growing evidence that the average tour ist is returning to Ne vada casinos.

In both December and February, the total gaming “win” — the casinos' take from gaming, excluding food, drinks, lodgings or other revenue — increased despite decreases in baccarat.

Gaming Control Board analyst Mike Lawton said that hasn't happened since May 2007.

The total win of $932.2 million was up 5.7 percent despite the fact that the game and table win (which excludes slots) was down nearly 1 percent compared with a year ago.

Table games brought in $360.6 million for resorts statewide.

Slot win totaled $571.5 million, 10.3 percent higher than the previous year and the largest percentage increase since September 2007.

Carson Valley casinos reported a 3.5 percent increase to $7.86 million. But it was an easy comparison, since win was down 2.9 percent in February 2011.

For the seven months of the fiscal year to date, that still leaves Carson, which includes portions of Doug las County, down 1.2 percent.

“The core customer really came through heavy this month,” Lawton said.

For much of the past two years, monthly casino win has depended largely on the high rollers.

February also was the fifth straight month of year-over-year increases — the first time that's happened since 2006. That increase came despite the fact that Chinese New Year was in January this year. That event — a major draw, particularly for high rollers — was in February a year ago.

Every reporting area in the state except North Lake Tahoe and parts of Elko and Laughlin counties was up in February.

Baccarat was down 14.3 percent to $408 million as both the play and the win percentage fell.

Minus baccarat, total statewide win would have been up 10.4 percent over last year.

North Shore casinos at Tahoe suffered a 7.5 percent decrease after a 15.5 percent decrease a year ago. The major culprit was the blackjack tables, which saw a $242,000 decrease in win — nearly all of the area's $249,000 decrease. That dragged game and table win down almost 40 percent.

South Shore casinos at Tahoe had a banner month. Total win of $15.1 million is 10.25 percent above last February. That is the third consecutive month of increases at Stateline and puts those casinos 6.44 percent ahead of where they were at this point last fiscal year. Both slot win and game and table win were up more than 10 percent. Slot play was up nearly 14 percent.

The amount wagered on games was actually down 15.5 percent, but the hold percentage — what the casinos kept — was up from 13 percent a year ago to 17.2 percent this February.

Washoe County casinos as a whole did very well, posting an 8.1 percent increase to $60.3 million.

Churchill County casinos, like South Shore, had an excellent month. Total win increased 15 percent to $1.97 million. Blackjack win jumped 110 percent, but that only accounts for $34,000 or so of the total. Total slot win was $1.89 million, a 14.5 percent increase.

The Las Vegas Strip was up just 3.3 percent to $530.7 million. But with the local markets in Clark County posting 12.4 percent gain overall, the county finished February 5.55 percent up.

Area February Win Percentage Change

Statewide $932.27 million 5.7%

Carson Valley $7.86 million 3.51%

South Shore $15.1 million 10.25%

North Shore $1.62 million -7.49%

Washoe County $60.26 million 8.16%

Reno $43.97 million 8.18%

Clark County $812.1 million 5.55%

Las Vegas Strip $530.69 million 3.31%

Published by North Lake Tahoe Bonanza

Written By Geoff Dornan
Nevada Appeal

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Power Saving For A Down Payment

Now more than ever, saving for a down payment is a crucial step to owning a home.

Right now on Capital Hill legislators, lobbyists, real estate industry experts and others are wrangling over Mortgage Reform and Anti-Predatory Lending Actprovisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Among the most discussed provisions is one that would create a Qualified Residential Mortgage (QRM), one that will be viewed as a loan offering a lower risk of default.

Because of the low risk, borrowers who qualify for a QRM will pay less than for a mortgage that is not designated as a QRM, but it won't be easy to land the loan.

According to the proposed definition borrowers would have to:

• Put at least 20 percent down to buy a home.

• Have at least 25 percent in equity to refinance.

• Have at least 30 percent equity to do a cash-out refinance.

• Have house payments that don't exceed 28 percent of before-tax income, and total monthly debt payments (house, credit cards, auto, student loans) couldn't exceed 36 percent of before-tax income.

• Not have been 60 days delinquent on any debt payments in the last two years.

For many borrowers, the 20 percent down payment alone could be insurmountable -- without solid saving habits.

First you'll have to change your thinking. A down payment is much more than a quickly gathered percentage of the purchase price. It should be money you extract from existing savings, investments, assets or other savings gathered over time.

Even after you put money down, the lender will want to see that you have enough cash on hand to pay for homeowners insurance, property taxes, homeowner association dues and other costs of owning a home.

Here are some solid strategies to get you started.

• Create a budget. A budget doesn't just reveal where your money goes. It lets you see where you can cut back and divert money into savings.

• Organize. That's right. Sell all that stuff you never use. Sell all that stuff that won't be a good fit for your new home. Clear the clutter. An organized home, with everything in its place, is a time-saving home and time is money.

• Follow a routine. If your money is spent before you get it, you will be less likely to save. Have money deducted from your income and deposited in a savings account with the highest possible interest rate. Don't show favorites because your checking is with one bank. Shop around for Federal Deposit Insurance Corporation (FDIC) insured savings, certificates of deposit (CDs), money market funds, and other savings or investment vehicles.

• Hoard windfalls. Stop spending tax refunds, holiday cash gifts, small lottery winnings and other forms of unexpected money. Save them.

• Withhold less. If you do get a tax refund, it may be time to adjust the money withheld from your paycheck. A tax refund is a free loan to the government. It costs you lost interest it could have earned in a savings account. Adjust your W-4 accurately to reflect your true tax liability. Use the Internal Revenue Service'swithholding calculator to get it right.

• Cut back. Some debts are fixed. Others, including groceries, clothing, gifts, gasoline and utilities, are not. Brew your own coffee. Stop eating out. Drive to save gas. Buy generic brands. Get a better cell phone and cable TV plan. The list is endless.

• Dump credit. Likewise, don't live beyond your means. Save credit for emergencies only. Pay off debt. Reducing credit debt gives you money to save and it can boost your credit score.

• Liquidate assets. Saving for a home may be just the reason you've been looking for to unload model train, Beanie Baby, comic book, stamp or coin collections. What's collecting dust in your safety deposit box?

• Get a second job. A few extra hours a day, can earn you a few hundred dollars a month. Consider overtime at your present gig, flipping burgers, working retail during the holidays, working at home or otherwise finding an additional source of income solely for the purpose of saving for that down payment.


Written by Broderick Perkins
Published by Realty Times

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Homeownership Still The American Dream, Fuels Economy

It's billed as the American Dream and yet for some it's been an all-time American nightmare.

Still "the home is central to American life" writes the National Association of Homebuilders in its report titled: Homeownership Works, released earlier this year.

Of course the report aims to show how housing is vital not just to homeowners but to the nation's growth. The publication looks at the contributions that homeownership make to the economy specifically through residential construction, remodeling, rental housing, and various other related aspects of the industry.

The publication shows how homeownership is a vital thread that weaves together a nation. It points to research released earlier this year by Pew Research Center Study, showing that 81% of of adults agree "that buying a home is the best long-term investment a person can make". The sentiment was mirrored by renters (also 81%) who reported they would like to buy a house.

According to the publication, homeownership contributes to household wealth even though many homes have lost significant value in recent years. NAHB reports that "the nation's homeowners have more than $6 trillion in home equity and they still believe in homeownership."

The equity that accumulated in their homes flows into the economy through education, health expenses, home improvements that increase value of the home, and funding retirement.

Some other findings reported in the publication include polling data based on a survey of 2,000 people likely to vote in 2010. The poll was conducted by for NAHB in May by Public Opinion Strategies of Alexandria, Va., and Lake Research Partners of Washington, D.C.

It showed that the majority of voters (71%) oppose proposals to eliminate the mortgage interest deduction. Findings also revealed that 95% of homeowners were glad they purchased a home; and 73% who didn't own a home were hopeful to one day.

Despite the housing crisis, those in this survey viewed retirement savings programs and homeownership as the best investments. And, 80% of those surveyed said they would advise a family member or close friend to buy real estate.

But for a healthy economy to exist, NAHB points out that "rental housing is essential to a well-housed population." The NAHB writes that there are many benefits from the rental housing market, according to the Joint Center for Housing Studies of Harvard University in "America's Rental Housing: Meeting Challenges, Building On Opportunities".

First, moving to rental housing often is less expensive than homeownership. Second, the primary upkeep of the property is the responsibility of the landlord. Third, while landlords often collect first and last months rent, it is still less than a downpayment. However, the majority of people will rent and own at some point in their lives.

Whether you're looking to rent or buy now, most find that their attraction to homeownership creates a sense of belonging and is a an integral part of their lifestyle.

"Americans still see homeownership as a core value and a key building block of being in the middle class and creating strong jobs in their communities. Owning a home isn't just a policy to people. It isn't just a commodity. It is a core value," Celinda Lake, President Lake Research Partners, writes NAHB in its report.


Written by Phoebe Chongchua
December 9, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Real Estate Outlook: Will 2012 See Improvement?

We’ve seen the effects of tight mortgage conditions over the last year. Existing and new homes sales have struggled and we are now left with sizable pent-up demand. Will this trend continue into 2012?

For starters, consumer prices fell in October, meaning low wage workers and others struggling to make ends meet will find more affordability. Additionally, according to experts, this decline gives the Federal Reserve more wiggle room when it comes to policy making should the economy worsen.

Why the decline, which was not wholly expected? The recent developments in the European debt crisis have had their affects on American markets.

Yet, affordabilty is the name of the game for 2012. The National Association of Realtors reports that next year will be one of the best years on record for housing affordability.

"Housing affordability conditions, based on the relationship between median home prices, mortgage interest rates, and median family income, have been at a record high this year," said Lawrence Yun. "Very favorable affordability conditions will dominate next year as well, which will probably be the second best year on record dating back to 1970. Our hope is that credit restrictions will ease and allow more home buyers to take advantage of current opportunities."

NAR President Phipps says that "mortgage availability remains a real concern since the private market has yet to return. While the housing market is still in recovery, we firmly believe that lower loan limits will only further restrict liquidity in mortgage markets."

Home sales could start to see some improvement in the new year, though. Existing-home sales are expected to rise 4 to 5 percent.

"Once home prices turn positive on a sustained basis, consumer confidence will rise and help the broader economy to improve," Yun added. "If we could maintain sound and reasonable mortgage underwriting standards, the market would be able to avoid a future big boom and bust cycle, but mortgage standards remain overly stringent."

While mortgage rates may rise slightly, they will still be near historic lows. In fact, the Federal Reserve is committed to keeping rates low through mid-2013.

The latest reports on the remodeling market show that today’s low rates may be allowing stay put homeowners the opportunity to refinance and funnel extra funds into home improvements. According to BuildFax the remodeling market is up 34 percent over September 2010. They report the top projects are roof remodels/replacements followed by deck and bathroom remodels.

Nearly two and a half years after the recession the economy and housing market continue to struggle, but recent stats and surveys are revealing that a change could be on the horizon for 2012. For now, affordability and interest rates are making for tempting deals for today’s buyers.


Written by Carla Hill
November 21, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

The Basics of Homeowners Insurance

Buying a home is likely the biggest purchase you'll ever make. It's important to protect this investment. This is where homeowners insurance comes in.

As a renter you may have been required to carry "renter's insurance," which was likely a basic plan that covered property losses and damages in case of an accident at which you were at fault, such as fire.

A homeowners policy has to cover so much more. Your possessions now extend on past jewelry and electronics and must protect everything from shingles and flooring to your life savings.

According to Wells Fargo, "Homeowners insurance provides you with broad coverage for losses that can arise while owning or renting out your home – like damage to your personal property, theft and vandalism, and liability coverage for accidental injury to another person or property."

In the aftermath of disaster, whether from fire, tornado, theft, or liability lawsuits, repairs and replacement costs add up fast. The majority of Americans would be unable to come up with the cash needed to return life back to normal.

So, in response, you purchase insurance. Each year you pay a premium. The amount is based on numerous factors, including the value of your home and the location where you live in. Some areas have higher crime rates, greater risks of wildfire, or have multi-million dollar homes. These policy owners will likely pay more than others.

Be sure to ask your insurance provider for the specifics of what your policy covers. You want a policy that gives you the right amount of coverage. Ask about add-ons, such a flood and earthquake policies. According to Allstate Insurance, "Typically, floods and earthquakes are excluded from basic policies, but in some areas, you may be able to get supplemental insurance policies for those situations. A few other conditions most companies specifically exclude are mold, fungus, wet rot, dry rot and bacteria."

Accidents do happen, and with a battery of lawyers around every corner, you want to be sure you're protected if someone injures himself on your property. Guest medical policies also pay for medical expenses should a person injure himself on your land.

In the instance that you must file a claim, you will need to pay a "deductible." This amount ranges from a few hundred to several thousand dollars. Let's say, for example, that you have a fire. The total dollar amount of damage is $10,000. Your policy covers the fire, so you only pay the "deductible," say $500. This is much more manageable for most households.

To cover not only your property losses in this fire, but also your possession, you will need to have proof of what you had. A home has been recorded on the tax roll, but possessions are your own private property. Homeowners should create an itemized list, updated yearly, that gives evidence of what possessions they have and how much they're worth.

You want a policy that has replacement cost coverage, not just the present value. If you lose a mattress in the fire, it will cost you $1,000 to replace, not $50 (the price it might be worth now). In order to have proof of your possession, consider making a video or photo diary.

Most importantly, keep a copy of this diary and itemized list at a second location away from your home, such as at a trusted relative's house or in a safety deposit box.

If you have a mortgage on your home, you may be required to carry Homeowners Insurance. The reasoning behind this logic is simple. You are not the "owner" of your home until you have completed your loan obligations. Until that point, the bank or lender is the legal "owner." They want to be sure their investment is protected.

For those who own their home outright, homeowners insurance is not required by law, but it would be a crime not to carry it.

by Carla Hill, Published: August 12, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Should I Buy?

The amount of material promoting home buying is extensive. Financial and real estate experts from across the country know that today's market conditions are heavily weighted in favor of buyers. Interest rates have never been lower. Home values are more affordable than they've been in decades.

Yet, does this mean now is a good time for you to buy? That depends on a number of personal and financial factors. To really understand if you should enter the market, you must look at what homeownership means.

Irresponsible buying or borrowing could be detrimental to our already fragile economy. Homeownership is a long-term financial responsibility. It brings with it many social, and sometimes financial, rewards, but like any commitment should not be entered into lightly.

First and foremost, how stable is your employment? Has your company been experiencing lay-offs or are they hiring?

Next, do you have at least an 8-month emergency fund in case you get laid off or become too sick to work? If not, things could quickly spiral out of control. Losing your home could spell disaster for your credit, leaving a black mark for 7 years.

Many potential buyers today are unable to attain a mortgage due to bad credit. This has created a multi-month supply of homes for sale. Will you need to sell your current home in order to buy a new one? Today's market, which is full of foreclosures and short sales, is difficult for many sellers.

Yearly homeownership expenses also extend on past the monthly mortgage check. Can you afford property taxes, homeowners insurance, and maintenance and upkeep? Currently, homeowners paying on a mortgage can take the Mortgage Interest Deduction (MID) off their yearly taxes. This deduction is on the chopping block, however. Although, your property taxes would likely be more than you'd save with the deduction.

Real estate can be a way to build long-term wealth. Your home can be one of your largest assets. These do not happen overnight, however. Are you planning on remaining in your new home for at least 3 to 5 years? It will take at least that long for you to break even financially when you sell. You will put cash down to buy it and will pay closing costs to sell it, many times to the tune of several thousand dollars.

What if home values continue to fall? Are you buying for reasons other than building equity? Why do you want to buy? In today's market, housing is affordable. It could be years, however, until your home begins to build equity. By the time you put 20 percent down, pay closing costs, and perform repairs and maintenance, returns can be quite slim.

Owning certain homes in specific neighborhoods can be a sign of status. You should be strongly cautioned that "keeping up with the Joneses" is not a valid reason to buy a home, especially in today's economy. Just ask a good portion of homeowners currently in foreclosure. Over 30 percent of all real estate transactions today are all-cash. While a certain percentage of these are investors, it means that many buyers are purchasing home "within their means."

The majority of homeowners, though, would recommend buying to family and friends. This is becasue homeownership instills a sense of community and stability. Studies have shown that homeowners rank themselves healthier than non-homeowners. Children of homeowners are less likely to become teen parents and are more likely to graduate.

Having a place of your own can be priceless. Just be sure you are truly ready to buy before entering the market.

Published: August 9, 2011

by Carla Hill

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

10 Tips for Those Who Have Decided to Buy

Wanting to buy a home and deciding to buy a home are two different things. The first is a desire or a dream. The second is commitment to achieve the goal. Do you want to buy, or have you decided to buy?

What are you planning when you think of purchasing real estate, whether it's a house, condominium, cottage, or investment property? Is this something you'd like to do, but could be dissuaded from if it seems too hard, or your life becomes busy? Or, is this a goal you take on with determination to overcome barriers and maximize strengths?

If you are ready to commit to success, you are determined to replace wanting to buy withdeciding to buy. Here are 10 tips to help you on the path to real estate ownership.

1. Decide who will facilitate your buy The professional team you put together can make all the difference. You're not looking for new friends, so concentrate on credentials and experience. Salespeople are trained to be personable, so if someone is likeable that's nothing special. Their knowledge and ability to strategize on your behalf does matter. The real estate professional you select must be as convinced as you are that you can be successful and understand how to make success happen.

2. Decide when will you buy Buying a home, cottage, or investment property is not something to rush into, but taking a long time does not necessarily make your choice a better one. A recent online survey by Canada Mortgage and Housing Corporation, the national housing agency, revealed that Canadians take, on average, 11 months to plan their purchase. That means sometimes the process takes longer than a year, and sometimes things happen more quickly. To facilitate a sound buying decision, project ahead three months at a time to see what external factors in your life and career might disrupt buying momentum, or add additional advantages to the timing. Possibilities of interest rate increases and price fluctuations are difficult to pinpoint for even the most informed experts, so prepare to respond to any shifts commonly predicted for your chosen location. Keep in mind, that if your Offer to Purchase were accepted today, you would probably not move in for 30 to 90 days depending on the sellers' plans and yours. Tip: The more pressure you put on yourself to adhere to a specific move-in date, the less flexibility you'll have in purchase negotiations regarding price and terms.

3. Decide where you will buy Location is still the key factor in sustainable value and rate of appreciation over time. The best returns come from buying the best location you can afford—neighbourhood and street, or condominium complex and floor. You can renovate or rebuilt the structure or unit, but you cannot move the land or condominium complex. Location matters. Spend time discussing your choice of housing, neighbourhoods, and special features like in-law suites or separate apartments with your professional advisors before you start looking at properties.

4. Decide which you will buy It's not how many properties you view that will ensure success, but whether you see the property that best suits your needs, wants, and decision making. One strategy involves acting quickly with newly-listed properties, another stresses the hidden value in slow-to-sell real estate. You may decide to stay on alert for new listings in the best neighbourhood and on the best street you can afford. Time invested in preparation will enable you to act quickly when the ideal property hits the market. If you decide on the alternate strategy that seeks purchase-price advantages with properties that do not show well, still search out the best location you can afford. Here, you'll view tired or poorly-decorated condominium units or houses, and revisit with contractors and decorator to evaluate true potential.

5. Decide what you will buy Stay on point and avoid getting carried away. Your buyer agent will help keep you focussed, but you need to be sure you know what features you want and need, and why. Does proximity to schools or public transportation matter? What will your home-based business require? Will an income-suite enable you to buy an even better location? Is this a fixer-up property that will build your financial strength, so you can eventually buy your goal property, or are you here for the long haul? Write your must-have list down and check it when you view properties and before you make an offer.

6. Decide what value you can add Do you have skill with interior design or home renovation? Or, will you hire the expertise you need? Concentrate on improvements that increase functionality, affordability, comfort, and resale, not just changes in decor. What professional skills can you add to the search, analysis, or decision making?

7. Decide what buying will cost Set a budget for the entire project, not just the mortgage. Your real estate professional can help prepare a full financial projection of costs. For more on mortgages, see “Mortgages: 7 Things You Don't Want to Learn the Hard Way.”

8. Decide how you measure success Short of having your Offer to Purchase accepted, how will you know how well you're progressing? What ongoing evaluation criteria does your real estate professional suggest? If you don't track time and the properties you've seen, you may become overwhelmed with detail and confused by the continually changing real estate market. While you're set on your decision to buy, interest rates, the economy, and many other variables may change. Focus is the key. Organization will ensure your success.

9. Decide what's unique to your situation What considerations or challenges must you take into account that may not be true for all buyers? Do you have a property to sell before you can buy? Do you have special mobility needs, or design features like higher ceilings or a detached garage that are important to your hobbies or business? Share this information with your real estate professional at the start, so they have the full picture of your needs.

10. Decide: What's the point of buying? This decision must come first and stay first as you go. There are many great reasons for buying real estate, but what are yours? Not reasons you've been told to buy or think you should, but why you know you're prepared to invest time and effort on the quest. When your point or purpose in buying is crystal clear, you can weigh the relative merits of the properties you view, and the many small decisions that must be made on the way to the first big step: Have you decided to make an offer?

Published: August 9, 2011

On RealtyTimes.com by PJ Wade

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Mortgage Rates Hit Record Lows Amid Signs of Weakening Economy

MCLEAN, Va., -- Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing mortgage rates dropping sharply amid falling bond yields and signs of a weaker than expected economy. The 30-year fixed averaged 4.39 percent, its lowest level for 2011. The 15-year fixed and 5-year ARM set new historical record lows averaging 3.54 percent and 3.18 percent, respectively. 30-year fixed-rate mortgage (FRM) averaged 4.39 percent with an average 0.8 point for the week ending August 4, 2011, down from last week when it averaged 4.55 percent. Last year at this time, the 30-year FRM averaged 4.49 percent. 15-year FRM this week averaged 3.54 percent with an average 0.7 point, down from last week when it also averaged 3.66 percent. A year ago at this time, the 15-year FRM averaged 3.95 percent. 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.18 percent this week, with an average 0.6 point, down from last week when it averaged 3.25 percent. A year ago, the 5-year ARM averaged 3.63 percent. 1-year Treasury-indexed ARM averaged 3.02 percent this week with an average 0.5 point, up from last week when it averaged 2.95 percent. At this time last year, the 1-year ARM averaged 3.55 percent. Frank Nothaft, vice president and chief economist at Freddie Mac, reports, "Treasury bond yields fell markedly after signs the economy was weaker than what markets had previously thought allowing fixed mortgage rates to follow this week with the 15-year fixed and 5-year ARM setting new historical lows. The economy grew 1.3 percent in the second quarter, which was below the market consensus forecast, and first quarter growth was cut to less than a quarter of what was originally reported. In fact, the first half of this year was the worst six-month period since the economic recovery began in June 2009. Moreover, consumer spending fell 0.2 percent in June, representing the first decline since September 2009." "On a positive note, there were indications that the housing market is firming. Real residential fixed investments added growth to the economy in the second quarter after subtracting from growth over the first three months of the year. The CoreLogic® National House Price Index rose for the third straight month in June (not seasonally adjusted) and was the first three-month gain since June 2010. Finally, pending existing home sales rose for a second consecutive month in June and was up nearly 20 percent from June 2010 when the housing tax credits expired." Published August 5, 2011 On RealtyTimes.com Thinking about Buying or Selling? Call Alvin's Team Today! 877-651-7810 Or visit our website: www.LivingLakeTahoe.com

Mortgage Rates Consistently Stable Despite Debt Ceiling Issues

Last week, markets appeared somewhat optimistic with mortgage rates remaining consistently stable despite debit ceiling issues and talks that fell apart prior to the weekend. It seems as though things may change this week as the deadline looms and an agreement has not been reached. Regardless, it is still a good time to lock in mortgage rates that are still at the lowest levels of 2011.

Freerateupdate.com's daily survey of wholesale and direct lenders show that conforming 30 year fixed mortgage rates are at 4.250%, 15 year fixed mortgage rates are at 3.375% and 5/1 adjustable mortgage rates are at 2.625%. These low mortgage rates with 0.7 to 1% origination fee are available for borrowers who have maintained good credit and can provide the necessary documentation to receive lender approval. The Mortgage Banker's Association reported the largest increase in refinances for the week ending July 15th which is evidence that borrowers are jumping on this opportunity while it is here.

For those with less than perfect credit, low FHA mortgages rates are still very competitive with conforming mortgage rates, either at the same level or slightly higher. FHA 30 year fixed mortgage rates are at 4.250%, FHA 15 year fixed mortgage rates are at 3.750% and FHA 5/1 adjustable mortgage rates are at 3.000%. With a minimum credit score of 580, FHA will accept a down payment as low as 3.5% which can be combined with housing grants and approved gifts. FHA mortgage loans are consumer friendly and continue to be the choice of first time home buyers, even though FHA closing costs (APR) tend to be higher because of the upfront mortgage insurance premium and other FHA fees.

Jumbo 30 year fixed mortgage rates moved up and down by .125% and are now at 5.000%. Jumbo 15 year fixed mortgage rates are at 4.500% and jumbo 5/1 adjustable mortgage rates are at 3.625%. These low jumbo mortgage rates are available with 0.7 to 1% origination point to borrowers who have excellent credit. The jumbo mortgage market is not over saturated right now because of the higher conforming loan limit. If that limit decreases on schedule in October, this might change since many properties will again fall into the jumbo mortgage market. There is currently a bill in Congress to further extend the conforming loan limit which, if approved, will help to keep jumbo mortgage rates low.

Although investors appeared optimistic last week, MBS prices (mortgage backed securities) fluctuated slightly which had little to no affect on mortgage rates. As MBS prices move, so do mortgage rates move in the opposite direction. Better than expected housing starts for the month of June and a new Greece debt deal led investors to turn to stocks. Markets saw little reaction to the report that weekly jobless claims increased higher than expected. This week can turn out to be completely the opposite as tension sets in over the debt ceiling deadline which is August 2nd. With both parties so far apart on ideas and no sign of an agreement, concern is already influencing markets as MBS prices are starting to drop.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders' rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard .07 to 1% point origination fee.


Written by Ed Ferrara
July 27, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Mortgage Rates Decline as Economic Data Continues to Influence Investors

As economic data continues to influence investors with their decisions, mortgage rates declined again last week bringing them to their lowest levels of 2011. Freerateupdate.com's daily survey of wholesale and direct lenders show that conforming 15 year fixed mortgage rates decreased by .125% and are at 3.375%.

This is good news for borrowers who are interested in refinancing for a reduced term from 30 to 15 years. 5/1 adjustable mortgage rates also dropped by .125% and are at 2.625% which should begin to bring some interest back to ARMs. Conforming 30 year fixed mortgage rates are at 4.250%, remaining the same this week. Borrowers need to have good credit to receive these low mortgage rates with 0.7 to 1% origination fee, as well be ready to provide the required documentation that is necessary for lender approval.

Although FHA mortgage rates have been steady for awhile, this is not affecting the popularity that FHA mortgages have gained over the past several years. FHA offers borrowers, especially first time home buyers, benefits that cannot be found with other mortgage loans. Even with a credit score as low as 580, a low down payment of only 3.5% is required. Approved gifts and housing grants are also acceptable making the mortgage transaction even more affordable.

Current FHA 30 year fixed mortgage rates are at 4.250%, FHA 15 year fixed mortgage rates are at 3.750% and FHA 5/1 adjustable mortgage rates are at 3.000%. While FHA closing costs (APR) tend to be higher because of the upfront mortgage insurance premium and other applicable FHA fees, the benefits are still drawing borrowers to turn to FHA for their mortgage loans.

Good news rolled in for jumbo mortgage loans this past week when jumbo 30 year fixed mortgage rates dropped by .125% and are currently at 4.875%. Jumbo 15 year fixed mortgage rates are at 4.500% and jumbo 5/1 adjustable mortgage rates are at 3.625%. Jumbo mortgage loans are on the rise as high end borrowers are jumping on these low jumbo mortgage rates while they are here. These are the lowest jumbo mortgage rates available with 0.7 to 1% origination fee to borrowers who have maintained excellent credit and can provide documentation necessary for lender approval.

The jumbo mortgage market is not over saturated at this time because of the higher conforming loan limit which is set to decrease to the original amounts this October. This may change as more homes become part of the jumbo mortgage market again.

Markets continue to be volatile as the European debt crisis continues to be a cause of concern to investors. The U.S. debt ceiling agreement is also creating jitters throughout worldwide markets. MBS prices (mortgage backed securities) have become unpredictable each day as economic data is released. Just as unpredictable are mortgage rates which move in the opposite direction of MBS prices. Last week, China reported positive economic growth while here in the U.S., Ben Bernanke reported that additional stimulus action will be taken if necessary. Weekly jobless claims dropped and homebuilder confidence is up, but neither is doing anything for consumer sentiment which is at the lowest level since March, 2009.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard .07 to 1% point origination fee.


Written by Ed Ferrara
July 20, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Mortgage Rates Consistently Stable Despite Debt Ceiling Issues

Last week, markets appeared somewhat optimistic with mortgage rates remaining consistently stable despite debit ceiling issues and talks that fell apart prior to the weekend. It seems as though things may change this week as the deadline looms and an agreement has not been reached. Regardless, it is still a good time to lock in mortgage rates that are still at the lowest levels of 2011.

Freerateupdate.com's daily survey of wholesale and direct lenders show that conforming 30 year fixed mortgage rates are at 4.250%, 15 year fixed mortgage rates are at 3.375% and 5/1 adjustable mortgage rates are at 2.625%. These low mortgage rates with 0.7 to 1% origination fee are available for borrowers who have maintained good credit and can provide the necessary documentation to receive lender approval. The Mortgage Banker's Association reported the largest increase in refinances for the week ending July 15th which is evidence that borrowers are jumping on this opportunity while it is here.

For those with less than perfect credit, low FHA mortgages rates are still very competitive with conforming mortgage rates, either at the same level or slightly higher. FHA 30 year fixed mortgage rates are at 4.250%, FHA 15 year fixed mortgage rates are at 3.750% and FHA 5/1 adjustable mortgage rates are at 3.000%. With a minimum credit score of 580, FHA will accept a down payment as low as 3.5% which can be combined with housing grants and approved gifts. FHA mortgage loans are consumer friendly and continue to be the choice of first time home buyers, even though FHA closing costs (APR) tend to be higher because of the upfront mortgage insurance premium and other FHA fees.

Jumbo 30 year fixed mortgage rates moved up and down by .125% and are now at 5.000%. Jumbo 15 year fixed mortgage rates are at 4.500% and jumbo 5/1 adjustable mortgage rates are at 3.625%. These low jumbo mortgage rates are available with 0.7 to 1% origination point to borrowers who have excellent credit. The jumbo mortgage market is not over saturated right now because of the higher conforming loan limit. If that limit decreases on schedule in October, this might change since many properties will again fall into the jumbo mortgage market. There is currently a bill in Congress to further extend the conforming loan limit which, if approved, will help to keep jumbo mortgage rates low.

Although investors appeared optimistic last week, MBS prices (mortgage backed securities) fluctuated slightly which had little to no affect on mortgage rates. As MBS prices move, so do mortgage rates move in the opposite direction. Better than expected housing starts for the month of June and a new Greece debt deal led investors to turn to stocks. Markets saw little reaction to the report that weekly jobless claims increased higher than expected. This week can turn out to be completely the opposite as tension sets in over the debt ceiling deadline which is August 2nd. With both parties so far apart on ideas and no sign of an agreement, concern is already influencing markets as MBS prices are starting to drop.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders' rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard .07 to 1% point origination fee.


Written by Ed Ferrara
July 27, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

30-Year Fixed-Rate Mortgage Ticks Up To 4.52 Percent

MCLEAN, Va., -- Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), which shows mortgage rates changing little over the previous week following mixed economic and housing data. The 30-year fixed average 4.52 percent and the 15-year fixed averaged 3.66 percent.

30-year fixed-rate mortgage (FRM) averaged 4.52 percent with an average 0.7 point for the week ending July 21, 2011, up from last week when it averaged 4.51 percent. Last year at this time, the 30-year FRM averaged 4.56 percent.

15-year FRM this week averaged 3.66 percent with an average 0.7 point, up from last week when it averaged 3.65 percent. A year ago at this time, the 15-year FRM averaged 4.03 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.27 percent this week, with an average 0.5 point, down from last week when it averaged 3.29 percent. A year ago, the 5-year ARM averaged 3.79 percent.

1-year Treasury-indexed ARM averaged 2.97 percent this week with an average 0.5 point, up from last week when it averaged 2.95 percent. At this time last year, the 1-year ARM averaged 3.70 percent.

Frank Nothaft, vice president and chief economist at Freddie Mac, reports, "Mortgage rates were virtually unchanged this week amid mixed economic data reports. Although both the overall producer price index and consumer price index fell moderately in June on lower energy costs, the core price indexes inched up. In addition, consumer sentiment sank to the lowest reading since March 2009, based on figures from the University of Michigan."

"The recent housing data also varied. For example, single-family housing starts jumped 9.4 percent in June to the strongest pace since November 2010 and homebuilder confidence rebounded in July. Yet, existing home sales fell 0.8 percent in June and represented the fewest since November 2010."


July 22, 2011 Published on Realty Times

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Homebuyers Make Lifestyle Options Priority

The adage when it comes to real estate has been "location, location, location." A recent survey, though, shows that lifestyle options are a priority. These include health and safety, access to cultural activities, and family-friendly neighborhoods.

Of course, location is still important, but today's buyers are looking for a sense of belonging in a community as well as creating a desirable lifestyle with the home they buy.

More than 1,000 homeowners and future home buyers were surveyed for the Better Homes and Gardens Real Estate LLC and the Meredith Corp report. The respondents indicated that how satisfied they'll be with the purchase of a new home may depend significantly on the home's surrounding community. About 84 percent of those surveyed were homeowners and an additional 10 percent had plans to buy within three years.

Here are some of the results. The survey found the following lifestyle options are top priorities for buyers.

• Ease of commuting by car: 38%
  
• Access to health and safety services: 34%
  
• Family-friendly neighborhood: 33%
  
• Availability of retail stores: 32%
  
• Access to cultural activities: 21%
  
• Public transportation access: 19%
  
• Nightlife and restaurant access: 18%
  
• Golf-friendly area–access to golf courses: 6%

If you're a seller what should all this mean to you? It's an opportunity to target buyers based on their interest. Just like businesses need to know who their target market is so that they can build a brand and solicit to those consumers, so too, for sellers.

If you're selling your home and you know that the above priorities can influence buyers, it only makes sense to play up the lifestyle options that apply to your home.

Often sellers focus predominantly on their home and the upgrades and amenities. While those features are very important, remember that practically any home can be remodeled. If you're in an excellent location with easy freeway access, on a low traffic street in a friendly neighborhood, surrounded by retail stores and hot dining spots, it's time to play it up. Those features aren't always easy to find.

Promote your lifestyle features with not only creative writing in the Multiple Listing Service detailed section, but also in ads with photos. You should also try using video of your home and the surrounding area. These days marketing goes beyond the MLS and glossy flyers. An archived video on the Internet doesn't get tossed in the trash like a piece of paper often does.

Showcasing your home on social media sites and giving a taste of the neighborhood in a well-produced video can be a fantastic marketing tool. However, don't use a poorly shot video; that may hurt you more than help you. Hiring a videographer or even a video journalist to tell a story about the area is well worth the money you'll spend. This style of storytelling can greatly increase interest in your home and, ultimately, the sales price.

Another option is to use footage (link or embed the video) from local retail outlets and post it on your social sites so that you can showcase some of the fun, nearby entertainment establishments. Create an album on your social sites so that all these photos, videos, links to articles are housed in it and then share it with friends. Don't make this album about you and your family in the home. Instead, make it like a review of the area. You are showcasing, through pictures, videos and words, the great places that you enjoyed while living in your home. Putting all these items online gives you greater exposure as people forward them to others.

Reality TV is popular for a reason; it takes people along for the journey, exposing life as it really is. Showcasing your home, neighborhood, and nearby restaurants allows potential buyers an opportunity to imagine the things that they would do if they lived in your home. We are becoming a very visual society and because so many properties are viewed first, and sometimes only, via the Internet, it's worth making what buyers see online valuable and persuasive. Seeing all that your home and its surrounding area has to offer in a video is as close as they get to actually experiencing it. The next step is literally stepping into your home for a closer look.

A little extra effort and promotion to highlight what's important to buyers may get you the sale faster and the price you're hoping for.


Written by Phoebe Chongchua
July 22, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Divorce Rate Declines Alongside Home PricesDivorce Rate Declines Alongside Home Prices

A recent study published by the American Economic Review (AER) has shown a surprising correlation between the current housing dip and divorce rates across the nation.

The findings indicate that the state of our economy may have further reaching social affects than many would assume. Home price declines could be positively affecting marital stability.

The AER study reports, "Our findings suggest that house prices have a significant effect on divorce shares." Divorce rates have declined over the past few years. The U.S. Census Bureau reported in 1996 that 50 percent of all marriages ended in divorce. Figures from 2009 showed a 46 percent divorce rate.

TIME Magazine weighed in on the study findings, saying, "Study after study has looked at the impact of the recession on everything from obesity to fashion ... a number of reports all year which, collectively, seem to indicate that the recession has made for estranged bedfellows of couples who would get divorced if it wasn't for the decline in their home's value. Almost 40 percent of couples who were considering a divorce or separation before the recession began said they put aside their plans to split, according to The Great Recession and Marriage, a survey conducted by the University of Virginia's National Marriage Project."

The AER used advanced mathematical formulas to account for variations in educational backgrounds and wealth levels and found that as home prices fall, divorce rates fall with them. What is causing this trend? The AER says, "When house prices rise, equity gains experienced by owners facilitate making down payments on separate homes and so could increase divorce probabilities." Basically, when jobs are easy to attain, credit readily accessible, and homes priced for selling, couples can afford to move on.

Conversely, when jobs are scarce, credit difficult to procure, and home prices on the decline, people become loss resistant. They don't want to face the loss of a home in addition to the loss of a spouse. "The decision to divorce -- which is often made simultaneously with the decision to sell one's home -- could be strongly declining in losses even if it varies little due to gains," reports the AER. This is especially true for the thousands of homeowners who are currently underwater on their mortgages.

Housing prices have declined steadily in all regions of the U.S. Former boom markets, such as Arizona and Florida, have seen double digit declines in home prices.

Add to this the high cost of most divorce proceedings and one reason becomes clear as to why couples have sidelined their splitting-up plans.

The AER suggests that these factors be taken into consideration when advancing new housing policy changes. "Given the high level of current interest in policy to shore up housing markets, it is worth better understanding the broader consequences of such policy."

The unemployment rate has edged back up in recent weeks. Home prices continue to decline and a continuous stream of foreclosures is expected for the foreseeable future. Will these trends continue to keep couples together? Recent evidence from the AER study points to this possibility.


Written by Carla Hill
July 15, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Mortgage Rates Fall After Weak Jobs Report

MCLEAN, Va., -- Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing mortgage rates following long-term bond yields lower amid weaker than expected jobs gains and an increase in the unemployment rate.

30-year fixed-rate mortgage (FRM) averaged 4.51 percent with an average 0.7 point for the week ending July 14, 2011, down from last week when it averaged 4.60 percent. Last year at this time, the 30-year FRM averaged 4.57 percent.

15-year FRM this week averaged 3.65 percent with an average 0.6 point, down from last week when it averaged 3.75 percent. A year ago at this time, the 15-year FRM averaged 4.06 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.29 percent this week, with an average 0.6 point, down from last week when it averaged 3.30 percent. A year ago, the 5-year ARM averaged 3.85 percent.

1-year Treasury-indexed ARM averaged 2.95 percent this week with an average 0.5 point, down from last week when it averaged 3.01 percent. At this time last year, the 1-year ARM averaged 3.74 percent.

Frank Nothaft, vice president and chief economist at Freddie Mac, reports, "Long-term bond yields and mortgage rates fell this week following a weak employment report. The economy added 18,000 jobs in June, well below the market consensus forecast, and the unemployment rate rose to 9.2 percent, the highest since December 2010. In addition, employee wages stagnated. These factors may lead to less consumer spending, which in turn, reduces the threat of inflation in the near term."

Published on Realty Times, July 15, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Stopping the Debt Cycle

For most Americans, the cycle of debt can seem never-ending. They're never quite out of the hole and are living month to month, just one emergency away from financial disaster.

A recent study by the National Bureau of Economic Research found that 51 percent of Americans would be unable to come up with $2,000 cash in case of an emergency. Yet, the average American household carries thousands of dollars of debt.

New graduates and young families face an uphill battle. The national unemployment rate remains near 9 percent and these young citizens' limited credit histories and work experience mean difficulties landing jobs.

Seniors are facing a different, yet equally as difficult, challenge. Despite good, long credit histories, they've found their retirement plans have dwindled, interest rates have spiked, and their future plans have been soured.

In these situations, it's easy for debt to pile up.

The first rule of debt management today comes from the old adage, "Don't count your chickens before they're hatched." This means don't spend money that you don't already have. Don't plan on a raise in the future or a stock to soar. What you have now is what you have. Rampant foreclosures in today's market are partially due to some buyers counting their chickens before they hatched. As the economy tanked, interest rates rose and jobs disappeared, these homeowners found they couldn't really afford the properties they'd purchased.

Living within your current chicken count means living within your means. This goes against the current American mindset of "what payment can I afford?" rather than "what can I afford to buy with cash right now?" Take a survey of highway billboards over the last decade and you're likely to see a steady switch from total costs advertised to monthly payment amounts. This mentality has led our society into a cycle of debt.

This mounting debt makes it even more difficult to live within your means. When you already have debt, you can't start at square one. You'll have to budget even tighter to pay off your debt without taking on any more.

1. Calculate Debt: How much do you really owe? What are your monthly payments, minimums, and interest rates? You'll want to pay off the higher interest rate loans first. Get rid of any unused cards that charge yearly fees. Refinance and negotiate lower interest rates on cards and loans.

2. Accountability: Record every purchase. Using cash makes it too easy to overspend. Instead, use a debit card which you can track with online banking. Monitor where and when you spend your money. At the end of this first month, add up expenses by category (e.g. grocery/household, clothes, entertainment, gasoline, energy costs, rent/mortgage, etc.).

Recording purchases will show you if there's a particular area where you overspend. It will also show you the true picture of what it costs to run your household. What is the basic amount of money you need to survive and pay all your bills?

3. Prepare a monthly budget: Now that you've seen what your spending habits have been in the last month, make a list of your "necessary" expenses. It's time to funnel funds away from recreation and entertainment and towards the principal on your debts. Pay for necessities first, then debts, then have fun with what is leftover.

4. Have a plan: Discipline is key to sticking with a plan. Decide ahead of time what you are allowed to spend on each category. If you have a particularly hard time sticking to a budget, then use the jar method. Put the budgeted amount of money in jars, one for each category. When the money is gone, it's time to quit spending.

Getting out of debt means having a plan and sticking to it. Being debt-free must be your priority. Yes, we all want to take vacations, buy new clothes, and visit the trendiest restaurants. Going into or staying in debt to do so isn't what the American Dream was meant to be. Be victorious in the small daily battles of spending. Keep you eye on the prize of being debt-free. Your future self will thank you.


Written by Carla Hill
July 13, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

How Much Down Payment Is Enough to Buy A Home?

Most people agree that buying a home without a down payment is a risky decision and soon it might not be an option. As the crippled housing market is beginning to see signs of improvement, lawmakers and key housing industry agencies are debating exactly how much down payment should be required.

Congress and a group of federal regulatory agencies are attempting to create new rules for mortgage lenders in order to avoid a future housing crisis. The loan would be known as "qualified residential mortgages."

The Dodd-Frank law calls for financial reform and the setting of criteria for what would constitute a reasonably safe, basic mortgage. The agencies tasked with this, include the Federal Reserve, the Federal Deposit Insurance Commission, the Department of Housing and Urban Development and the Federal Housing Finance Agency.

The qualified residential mortgages would allow lenders issuing them to sell them to investors. In doing so, the lenders would avoid full risk associated with the possibility of a default on the loan. Other non-qualified residential loans, would be deemed riskier and, therefore, the lender would have to retain 5 percent ownership.

The law is aimed at prompting banks to take ownership and make sure that a borrower truly has the ability to repay a loan. In cases, where a riskier loan is made, and the standard of the qualified residential mortgage is not met, the bank would have to be prepared for a possible default and have set aside extra capital.

A 20 percent down payment is being considered but many are opposed, including banks, real estate agents, and consumer housing advocates. The opposition fears that a 20 percent or 10 percent down payment would price many homeowners out of the mortgage market.

Even if a borrower is creditworthy, coming up with the down payment could be a real stretch. It could take some borrowers more than a decade to save for just a 10 percent down payment.

The Center for Responsible Lending has created charts on its website ResponsibleLending.org to show how borrowers with different occupations would be impacted. According to the chart, it could take a U.S. Army Staff Sergeant, earning a median salary of just over $30,000, nearly 20 years to save for a down payment.

The opposition argues that for the creditworthy borrowers, the loan could cost them more because the lender would raise interest rates on their loans in an effort to cover their extra costs.

Kathleen Day, representing the Center for Responsible Lending, told the New York Times, "We’re not advocating for zero percent down. We think down payments are good. But we think the market should set them, based on the underwriting."

Day says that underwriting (the process of looking at a borrower’s credit history and income and debt levels) should assess risk and determine a borrower’s ability to repay a loan.

Some loans, like those that can be obtained with a small down payment and are insured by the Federal Housing Agency, would be exempt from the qualified mortgage mandates.

For now, the debate continues over if a minimum down payment should be set and, if so, how much. The intense controversy surrounding this matter has prompted the regulatory agencies to extend the public comment period to August 1, 2011.


Written by Phoebe Chongchua
July 8, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

There's Still Value in Homeownership

It may be a down market, but the majority of Americans still see value in homeownership.

According to a recent survey, conducted on behalf of the National Association of Home Builders (NAHB), "An overwhelming 75 percent of the people who were polled said that owning a home is worth the risk of the fluctuations in the market, and 95 percent of the home owners said they are happy with their decision to own a home."

There is good reason for homeowners to feel this way. Homeownership offers people a wide range of benefits, including many that reside outside your pocketbook. The first benefit is stability. According to the National Association of Realtors (NAR) and their 2010 study named "Social Benefits of Stable Housing," "Homeownership and stable housing go hand-in-hand. Homeowners move far less frequently than renters, and hence are embedded into the same neighborhood and community for a longer period. "

This stability has far-reaching affects. Studies have revealed that children of homeowners are more likely to graduate and less likely to live in areas with high crime rates. Responsibility is also passed down to the next generation. Daughters of homeowners have a lower incidence of teen pregnancy.

According to the survey, "First, a home purchase naturally involves one of the largest financial commitments most households will undertake. Homeowners, therefore, tend to minimize bad behavior by their children and those of their neighbors that can negatively impact the value of homes in their neighborhood. Second, homeowners are required to take on a greater responsibility such as home maintenance and acquiring the financial skills to handle mortgage payments. These life management skills may get transferred to their children."

Homeownership even affects our health. This same NAR study found that homeowners report higher levels of physical health, even after the study adjusted for age and socioeconomic factors. "In addition to being more satisfied with their own personal situation than renters," says the study, "homeowners also enjoy better physical and psychological health."

Owning your home gives you stability. Eventually, if a homeowner buys within their means, even the longest of mortgages gets paid off. This makes your home one of your greatest retirement assets.

According to Celinda Lake, president of Lake Research Partners. "People believe overwhelmingly that owning a home is an anchor to the American Dream," she said. "It's an anchor to your retirement, and it's an anchor to your personal economic well-being."

"Homeownership is worth the risk, pure and simple," said Neil Newhouse, a partner and co-founder of Public Opinion Strategies. "Even though the market is weak, people who don't own say they want to buy a house. Almost three-quarters of those who do not currently own a home, 73 percent, said owning a home is one of their goals. And among younger voters who are most likely to be in the market for a home in the next few years, the percentages are even higher."

This is why 80 percent of owners would recommend homeownership to those they know. If you're in the market, maybe it's time you took listened to their advice! Historically low interest rates and high rates of affordability make now a great time to buy.


Written by Carla Hill
July 6, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com