Record-Setting Low Fixed Mortgage Rates Persist

Freddie Mac released the results of its Primary Mortgage Market Survey®, showing average fixed mortgage rates falling to new all-time record lows for the sixth consecutive week amid weak economic and job data helping to keep homebuyer affordability high.

30-year fixed-rate mortgage (FRM) averaged 3.67 percent with an average 0.7 point for the week ending June 7, 2012, down from last week when it averaged 3.75 percent. Last year at this time, the 30-year FRM averaged 4.49 percent.

15-year FRM this week averaged 2.94 percent with an average 0.7 point, down from last week when it averaged 2.97 percent. A year ago at this time, the 15-year FRM averaged 3.68 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.84 percent this week, with an average 0.7 point, the same as last week. A year ago, the 5-year ARM averaged 3.28 percent.

1-year Treasury-indexed ARM averaged 2.79 percent this week with an average 0.4 point, up from last week when it averaged 2.75 percent. At this time last year, the 1-year ARM averaged 2.95 percent.

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

"Fixed mortgage rates reached new record lows for the sixth consecutive week as long-term Treasury bond yields declined further following downwardly revised economic growth and job creation data. Gross domestic product rose 1.9 percent in the first quarter, after originally being reported as 2.2 percent, led by gains in inventories, more government cutbacks and the slowest increase in corporate profits in over three years. In addition, the economy added 69,000 jobs in May, less than half of the market consensus forecast and revisions subtracted a total of 49,000 workers in March and April. Lastly, the unemployment rate ticked up from 8.1 percent in April to 8.2 percent."


June 8, 2012, Published by Realty Times

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Avoid First-Time Buyer Mistakes

You've finally decided that now is the time for you to jump into the housing market! Perhaps you've done the math and want to take advantage of historically low interest rates and high levels of affordability. Maybe you have a new family that is quickly outgrowing your little rental. No matter the reason, buying real estate is a big responsibility.

There are several rookie mistakes that many first-time home buyers can make. Keep reading for how to avoid them!

First, first-timers underestimate the importance of finding the right real estate agent. Not all agents are equal. Not only do their experience levels and commission rates vary widely, but every agent has their own unique personality. You want to be sure you find an agent that you feel comfortable with and that you respect.

In order to find the best fit agent for your needs, set up several interviews with local agents. Ask them about their business. Do they have a cell number where you can reach them? Do they web conference on days you can't meet? How often do they send prospective homes to buyers? Be sure to ask for testimonials and references. Finally, just get a feel for how your two personalities will mesh. Does the agent seem to have your best interest at heart? Are they giving you the respect you deserve or treating you like a dunce?

Next, a common mistake for first-time agents is to consider what type of home you want. If you know ahead of time what you are looking for, the price range, as well as what you're willing to compromise on, you'll be much more likely to make a decision quickly about buying a specific home.

This is important for two reasons. You don't want to make an impulsive decision, but you also don't want to wait so long that someone else swoops in and buys the house before you can make an offer!

The third mistake is not considering that a home is an investment -- one where you don't want to lose your shirt down the line. Is this home priced right? Compare it to other similar homes. Is this home in a desirable location or is it next to a busy street, etc? Will is require a lot of work? When you go to resell this home, you want to make a profit or break even.

You'll need to consider that you'll probably pay an agent a commission and will be paying closing costs at selling time. This is extra money on top of what you need to make on the sale of the home to break even.

Most experts say you need to stay in a home for at least 3 to 5 years in order to break even. This time frame could be even longer if home values continue to fall. Remember, homeownership is a long-term investment

Next, ask your lender lots of questions and be proactive about finding the best deal. Different lenders will offer you different rates. Research your options. Would you be better served with a 15-year or 30-year note?

Ask lots of questions about the difference between adjustable and fixed rate mortgages. Learn about points. Find out how much interest you'll pay over the life of the loan. The lender is there to serve you, so don't be shy about getting the information you need.

Finally, don't be greedy or low-ball sellers. This may be a buyers market, but if you offer too little or ask too much in concessions you may turn the seller off. They don't have to sell their home to you!

Avoid these common first-time buyer mistakes and you're sure to have a fun and rewarding buying experience!


Written by Carla Hill
May 4, 2012, Published by Realty Times

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Study Reveals Do-It-YourSelf Home Improvements Increase Home's Value

When it comes to home values, a little elbow grease can go a long way, according to a recent nationwide study by HomeGain.

The study surveyed 500 real estate agents throughout the nation to learn the top 10 low-cost, do-it-yourself improvements that help increase the likelihood a home would sell.

Ranking in the top five are: clean & de-clutter, lighten & brighten, repair electrical & plumbing, landscaping, and home staging. But how much benefit can you really expect to get from each of these home improvement categories?

According to the study, the top home improvement (since 2003) continues to be to clean and de-clutter your home. It may cost you about $400 to make the most of this home improvement but sellers who make the financial commitment can benefit by seeing a "returning value of just over $2,000 to the home's sale price". That's a 403 percent return on investment (ROI).

Coming in at the number two spot is lightening and brightening your home. This makes perfect sense. If a home is dark and difficult to view, many buyers won't spend even minutes in it. Buyers want to be able to explore the home, seeing every detail. Also, homes that are dark often convey a dreary tone and may give buyers the suspicion that there may be hidden damages in the home.

Interestingly, home staging fell to the number five spot. In the 2011, study it ranked third. However, for this year, do-it-yourself tasks such as repairing electrical and plumbing issues, and maintaining landscape, ranked higher, respectively.

"In a buyer's market, sellers need to dress their homes for success before putting them on the market," said Louis Cammarosano, General Manager at HomeGain.

It could be a sign of the times, that do-it-yourself home improvement projects are creating greater ROI. With many homes falling into foreclosure or being put on the market as a short sale, there is lots of inventory that is lacking a little tender loving care.

Sellers who are listing their home on the market should take a close look at the competition and then, as I've written in previous columns, see their home through the eyes of a potential buyer. In other words, check out its flaws and fix those issues.

Remember, buyers don't have a history with your home. They're not necessarily attached and willing to overlook the downside of your property.

Create a do-it-yourself task list and target those areas that need some work. Then bring in the experts to do the maintenance and repairs that need professional care. Investing a little more into increasing the potential sale of your home can mean not only more money but also a faster sale.

Rounding out the top 10 on the HomeGain.com National Home Improvements study are shampoo or replace carpets, repair floors, paint interior walls, update kitchen & bathroom, and paint the exterior of the home. For more details on the study and to see a complete analysis of the cost versus the ROI, visit HomeGain.com.


Written by Phoebe Chongchua
April 27, 2012

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15-Year Fixed-Rate Mortgage Hits New All-Time Record Low

In Freddie Mac's results of its Primary Mortgage Market Survey®, average fixed mortgage rates declined for the third consecutive week on the heels of a weaker than expected employment report. The 30-year fixed averaged just above its record low while the 15-year fixed averaged a new all-time record low of 3.11 percent breaking its previous low of 3.13 percent on March 8, 2012.

30-year fixed-rate mortgage (FRM) averaged 3.88 percent with an average 0.7 point for the week ending April 12, 2012, down from last week when it averaged 3.98 percent. Last year at this time, the 30-year FRM averaged 4.91 percent.

15-year FRM this week averaged 3.11 percent with an average 0.7 point, down from last week when it averaged 3.21 percent. A year ago at this time, the 15-year FRM averaged 4.13 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.85 percent this week, with an average 0.7 point, down from last week when it averaged 2.86 percent. A year ago, the 5-year ARM averaged 3.78 percent.

1-year Treasury-indexed ARM averaged 2.80 percent this week with an average 0.6 point, up from last week when it averaged 2.78 percent. At this time last year, the 1-year ARM averaged 3.25 percent.

According to Frank Nothaft, vice president and chief economist, Freddie Mac: "Fixed mortgage rates eased for the third consecutive week following long-term Treasury bond yields lower after a weaker than expected employment report for March. Although the unemployment rate fell to the lowest reading since January 2009, the overall economy added just 120,000 new jobs in March, nearly half that of the market consensus forecast. On a more positive note, the Federal Reserve reported hiring was steady, or showed a modest increase, across many of its Districts in its April 11th Beige Book of regional economic conditions."


April 13, 2012, Published by Realty Times

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Relying On An Agent

The latest NAR Profile of Home Buyers and Sellers showed a growing trend among recent buyers.

The latest figures show that 89 percent of buyers purchased their home with the help of a real estate agent or broker. This is a sharp increase from a decade ago in 2001, when only 69 percent of buyers enlisted the help of an agent or broker.

Why do today's buyers buyers choose to work with an agent? Let's look at just a few of the many reasons an agent can be your biggest ally.

First, agents are licensed professionals, which means they had to complete coursework and pass an exam in order to become and agent. They have the education and experience to help you navigate what will be one of the biggest purchases of your life.

They also have access to a wide range of properties and can guide you to those that are the best fit for you, which can save you time and energy. If you are unsure what type of property you're interest in, an agent can help explain the pros and cons of things such as condo life versus single-family detached living.

Where are the up and coming neighborhoods? Which areas are more walkable or have access to better schools? These are all issues an agent deals with daily.

They can also ease the burden of buying by simplifying the process. They set up showings, drive you to appointments if needed, and help you handle the intricacies of negotiations.

Today's market also presents challenges that simply weren't present or didn't dominate the market a decade ago. Buyers are faced with some great deals, but through some complicated channels, such as short sale or foreclosure. How does one handle these sort of contracts? Your agent or broker will know.

According to the NAR, "More than ever home buyers are relying on real estate agents and brokers to help them with their home purchase regardless of whether the home they are buying is a foreclosure, short sale, or even a FSBO sale because they need a real estate agent to help them through the process."

Finally, buyers are unsure if now is really a good time to buy. They need to rely on someone with local market knowledge. Is this a good neighbor to invest in? Are prices still dropping in this community? How long do homes take to sell? What is the median selling price? Buyers want the best deal out there.

The 2011 Profile found that more buyers are opting against dual agency, where the agent represents both the buyer and seller. This could signal that today's buyers are very cautious about getting into the market. While a dual agent isn't supposed to harbor any bias, buyers now want to be extra sure they are getting the best deal possible. In fact, "60 percent of recent buyers had an oral or written arrangement with the real estate agent or broker so that the buyer's agent only represented the buyer and not the seller."

If you are considering entering buying a home this year, be sure to strongly consider using a real estate agent. They could be your biggest ally.


Written by Carla Hill
Published by Realty Times

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Know Your Expenses Before You Buy

For many, homeownership is still a dream. Moving from renting can seem like it’s an impossible mission. But if you plan ahead and carefully budget, the goal of homeownership can be yours.

When budgeting how much home you can afford, it’s important to understand and anticipate the costs of owning and maintaining a home. Here are a few things that some first-time buyers forget to include.

Private Mortgage Insurance

This is added on to your mortgage when the down payment is less than 20 percent. You can buy a home with less money but you’ll pay the PMI which covers the lender should a homebuyer default on the loan. As you build up equity, your PMI drops off.

Taxes

Property taxes generate revenue for municipalities, counties, and schools. It’s an expense that can vary across the U.S. However, on average, it’s 1.38 percent of the home’s value. Back East tends to have the highest property taxes.

HOA Fees

Homeowners’ Association fees (HOA) can add several hundred dollars to your monthly household expenses. These HOAs help to maintain common areas, typically within condominium complexes. They also govern what can be done to the unit and the surrounding area. While there is an up side to HOAs, some buyers prefer to have more freedom over their property, perhaps, until the neighbor paints his house turquoise with red accents.

Homeowner’s insurance

Lenders require homeowner’s insurance on your property. The amount you’ll pay depends on many variables including: where you live, the age, type, size of your home. For example, older homes can cost more to insure due to the fact that they may require more repairs than newer homes. Also, high-hazard areas can cost more to insure and some insurance companies may not offer an insurance policy for your home, if you’re in a high-risk area.

Utilities and appliances

These areas can be overlooked because, often, when people are renting the appliances are taken care of. When you own your own home, be sure to consider expenses such as the water heater or dishwasher breaking down. While, you can’t exactly figure out when an appliance is going to quit working, you can set a monthly allowance aside to start establishing a household repair fund. Just don’t touch the account or when you really need it, you’ll find it’s not there for you.

Inspections, appraisals, and closing costs

Many buyers understand they will have closing costs but they fail to budget for other items such as a home inspection. Sometimes inspections are paid for by the seller but it’s usually the buyer who pays for the inspection. And, even if the homeowner recently had a home inspection and has the report, a buyer still might want to pay for an inspector to have another look to compare the findings.

Depending on the home, there may also be other inspections such as for lead paint, pests or radon gas.

While the extra expenses do add up quickly, if you carefully budget and plan ahead, the goal of homeownership is achievable and very satisfying.

Written by Phoebe Chongchua
February 10, 201, Published by Realty Times

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Homeownership Possible Within Three Years After Foreclosure

Losing your home can be devastating to your credit, not to mention your psyche, but you can buy again within as few as three years after a foreclosure or short sale.

It's not surprising when you lose your home you also lose some self-esteem, especially if your were raised in a culture that sees homeownership as a status symbol, as a sign that you've finally arrived.

Some lost self-esteem also comes from the belief you've lost your shot at the American Dream. Others will tell you seven to ten years must pass before you can buy again. At that time, uninformed people say, you'll have to buy at high interest rates.

That's not always true.

If you file for bankruptcy, and make the right credit and financial moves, you can buy a home again as soon as two years after your bankruptcy is discharged.

What's more, if you rebuild your credit and maintain a healthy, on-time credit profile, you can take advantage of low down payment and low interest rate loans. The Federal Housing Administration (FHA) allows you to buy a home with as little as 3.5 percent down and take advantage of some of the best interest rates on the market.

FHA loans literally replaced the subprime brand, but came with federal backing.

Also see: "U.S. to lower size of guaranteed mortgages"

You also may be eligible for first-time homebuyer programs that assist you with your down payment and closing costs. First-time homebuyer programs are not just for those who have never owned a home, but allow you to qualify if you have not owned a home in the past three years.

Some private lenders, home owners and investors also may allow you to buy a home even sooner than the two- to three-year period, but it will cost you a higher interest rate and require a large down payment.

With the housing market flat and many local markets still expected to see prices fall more, it is not a bad idea to spend the next several years cleaning up and re-establishing your credit. Good credit will allow you to buy a home with a minimal down payment and the lowest interest rates.

If you lost your home to foreclosure or a short sale, don't lose hope. Don't hesitate. Begin today putting yourself in a good position to buy.

Fix your credit

• Rebuild your credit by making your monthly debt payments on time. Don't ignore your remaining credit obligations during foreclosure or after losing your home. Yourcredit score gets a boost, in part, based on the number of positive accounts in your credit report. The more you have, within reason, the faster your credit score rises, even after losing a home.

• Pay down your credit cards but not to a zero balance. Your credit score gets a boost if you maintain a balance that is about 30 percent or lower than your credit limit. Keeping a balance reveals you can borrow money and pay it back on time. Don't close out your credit cards because the longer your positive credit history, the more your credit score and your ability to buy a home will improve.

Save money

• Most of today's homebuyer programs require a down payment. FHA loans require 3.5 percent down -- $3,500 for every $100,000 you borrow. You likely will have to pay closing costs, another 2 percent to 3 percent of the sales price. This is another $2,000 to $3,000 per $100,000. Do the math to determine how much you need to save each month, over the next two or three years, to have enough to cover your down payment and closing costs.

Don't be pressured

• Buy only when you are ready. You didn't lose your credit overnight. Likewise, it will take time to rebuild your credit and save for a down payment. Home buying deals will be available for years to come.

• Avoid adjustable rate mortgages (ARMs) and consider a 15- or 30-year fixed rate mortgage (FRM) that is a fully amortized loan so your payment and interest rate are fixed for the duration of the loan. Full amortization means each payment helps pay down the principal. When your loan term ends, so does the loan balance.

• Buy based on what you can afford, rather than a higher amount approved by the lender. You already know the risk of biting off more than you can chew. Lenders will pre-approve you based on your gross monthly income, but that does not consider taxes subtracted from your paycheck, food, clothing, utilities and other monthly obligations.

Know your comfort zone. Don't over-extend yourself.


Written by Robert Aldana
February 8, 2012 Published by Realty Times

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Real Estate Drops But Second Home Market May See Increase

Interest rates continue to remain low for mortgages and it looks as though the Federal Reserve will keep the rate at which banks lend to each other overnight low through 2014. The federal funds rate is expected to remain at zero to 1/4 percent for the next few years due to the depressed housing market and slow business investments.

Mortgages also remain very low. For two months now the 30-year fixed rate mortgage has been below 4 percent, averaging 3.98 percent in the week ending January 26. Also down, the 15-year fixed-rate mortgage. Last year it was at 4.09 percent and it was down to 3.24 percent, the week ending January 26.

Many homeowners are searching for the bottom but the bottom doesn't appear to be in sight yet. Property values in 20 cities declined 3.7 percent from November 2010, according to the S&P/Case-Shiller index.

While housing is more affordable, "The household balance sheet is still a mess," said Karl Case on Bloomberg radio, Co-Founder, Case-Shiller. Homeowners are still struggling to make ends meet and many are just barely hanging onto their homes.

However, Case believes, "The seeds of recovery are being planted," albeit slowly.

Those who are staying put are helping to fuel the remodeling industry. "Homeowners are estimated to spend a total of $113.6 billion on home improvements in the U.S. through the third quarter of 2012," according to The National Association of the Remodeling Industry (NARI).

While homeowners fix up their properties, millions of baby boomers (40.7 million people ages 50-59 in the U.S.) prepare to retire and many are predicted to enter the vacation and rental property markets, which would fuel the demand for these types of properties for the next several years.

The second-home market may be a shining star in the real estate market. The National Association of Realtors (NAR) uses the U.S. Census Bureau's data to look at the housing numbers. There are 74.8 million owner-occupied homes, 7.9 million vacation homes, and 41.6 million investment units in the United States.

The primary buying market is dominated by those aged 40-49, of which this group is 43.8 million strong. And, following closely behind at 40.4 million, is the 30-39 age group, which is soon to reach the prime age for buying. This group will also help fuel the second-home market in the coming decades.

Many of those who are purchasing second-homes are doing so with the thought that the home will likely become their place of retirement. So, they're capitalizing on the great deals on the market. Second-home purchasers tend to buy discounted distressed properties, more so than those buying primary residences. However, according to some statistics, the average vacation-home owner leaves the property vacant as much as 90 percent of the year and is therefore missing out on valuable rental income.

Purchasing a second home in today's market could mean getting a very enticing deal. But it's important to think things through and understand what your needs will be in the future.

Buying a property and renting it out can be a steady income stream until you're ready to take over the home and move into it. But many people have concerns about how the home will be kept up and if rental usage will create big maintenance issues. While these are valid concerns, renting your home out can offer some significant benefits. For instance, if you limit your personal usage of the property to only 10 percent (14 days), you may be be able to take a deduction of up to $25,000 in losses for things like maintenance.

Buying a second-home and entering into the rental property market doesn't have to scare you. However, you should seek professional and expert help to identify the best scenario for your housing and financial needs, now and in the years to come.


Written by Phoebe Chongchua
February 3, 2012

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Why You Want a Guaranteed Loan

Today's buyers are facing quite a diverse housing market. There are great deals for buyers and investors alike. Home prices are at all-time lows and interest rates are creating some enticing conditions.

One word buyers and investors should familiarize themselves with is "title". When you buy anything -- a car, a house -- you want to be sure that you are gaining clear title. Simply exchanging money doesn't mean you have legal ownership of said property.

You may have been introduced to the term "quitclaim" deed. A quitclaim deed means there is no title covenant, or no guarantee of the title. Take it from the experts -- don't enter into one of these agreements.

Quitclaim deeds are only intended to be used by parties that know and trust each other, such as within a family. It should not be used during traditional sales and here's why.

A quitclaim deed means the seller doesn't guarantee that he/she actually owns the property! They are simply transferring whatever interest they have at the time of purchase.

In the still strong wake of the home foreclosure crisis, many owners are finding they've become the unfortunate victims of the robo-signing mortgage debacle.

According to RealtyTrac.com, the leading online marketplace of foreclosure properties, "The housing market has not completely escaped the clutches of this foreclosure crisis. Instead foreclosure processing delays in 2011 have artificially exaggerated what would have been a slow, natural decrease in foreclosure activity off the foreclosure peak of 2010. This artificial trough in foreclosure activity in 2011 will result in a corresponding double-peak in 2012."

These aforementioned "foreclosure processing delays" are direct effects of the robo-signing controversy, where documents had improper notarization and suspect signatures and are now being invalidated by courts, blocked by judged, and refused by insurers.

These weren't just small companies falling these procedures. Big names like Bank of America, JPMorgan Chase, and Wells Fargo were found to use these practices.

This scandal is nothing new. MSNBC reports that "Counties across the United States are discovering that illegal or questionable mortgage paperwork is far more widespread than first thought, tainting the deeds of tens of thousands of homes dating to the late 1990s. The suspect documents could create legal trouble for homeowners for years."

"Because of these bad titles, property owners can't prove they own the properties they think they bought, and banks can't prove they had the right to sell them," says Jeff Thigpen, the registrar of deeds in Guilford County, N.C.

Distressed properties were scooped up across the nation by eager, and sometimes less than thorough or honest, investment companies who then unloaded them without clear titles, legal notary, or proper signatures to unsuspecting buyers.

Many of these buyers who were impressed by the ease of purchase are now discovering that documents that must be officially signed and notarized had simply been "robo-signed", sometimes without even the right person's electronic signature.

Now, in order to sell with a clear title they must now do the legwork of tracking down signatures and filing paperwork that should have been handled by the mortgage investment company. This has led to contract cancellations and lost sales.

If you are looking to buy property in today's housing market, be sure to pay careful attention to dotting the i's and crossing the t's in your contract. Be sure that you are receiving a clear title done the old fashioned way with a guaranteed loan.


Written by Carla Hill, Published by Realty Times
February 3, 2012

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Are Homeowners Glad They Own?

It might come as a surprise but a whopping 72 percent of surveyed homeowners nationwide are satisfied with owning a home. The other 28 percent, not so. They say they're dissatisfied and that's likely due to the devaluation of their homes.

But surprisingly, of those who were satisfied with owning a home, only 24 percent said it was because of home appreciation. The majority, 76 percent, had many other reasons they were happy to own their own home including the one that proves the American Dream is alive and well: pride of homeownership. Following closely behind were the freedom to control their home improvements and upgrades. All this according to HomeGain's 2012 National Home Ownership Satisfaction Survey.

Of those who were unsatisfied with owning their home, 63 percent blamed depreciation as the root of their dissatisfaction. However, the cost of owning a home, such as paying for property taxes, homeowner's association fees, upkeep, and routine repairs, also sucked the joy out of homeownership and led this group of 37 percent to be unhappy about homeownership.

On the bright side, most - three out of four - are very happy with homeownership even in spite of such rocky real estate times where declines in home values have crippled some homeowners severely.

The survey polled homeowners all across the country. So you might be wondering is there a connection between where you live and how satisfied you are with owning a home?

The highest percentage of satisfied homeowners comes from the Northeast where there is 77-percent satisfaction, according to HomeGain. Pulling in at a close second is the Southeast at 73 percent satisfaction. The West and Midwest were at 71 percent and 68 percent, respectively.

Those who purchased their homes within a timeframe of the past three to eight years were the least satisfied. If they bought more than eight years ago, they tended to be more satisfied.

The higher-end market was the least satisfied with owning a home, especially if they paid more than $800,000 for it. This group's dissatisfaction rate was 69 percent. But those who purchased homes for under $75,000 are cheering. This group's satisfaction rate was 77 percent.

Of course, a lot of homes are sold through foreclosure and short sale, which, depending on the side of the sale you're on, can leave you satisfied or very dissatisfied. Those purchasing a foreclosed or short sale had the highest satisfaction ratings; 79 percent and 83 percent, respectively.

New and existing homes didn't fare so well with homeowners. They were fairly dissatisfied and showed it in a 73 percent and 71 percent rating, respectively. Most seemed to have expected an increase in the value of their home and when depreciation hit, this highly disappointed them, making this the primary reason for their dissatisfaction.

An interesting statistic may reflect the need for freedom from being tied down to a home and its maintenance as well as other costs. Homeowners ranging from 18 to 25 were the least satisfied (45 percent) with owning.

On the other end of the spectrum, those homeowners between 55 to 65, were the most satisfied with their homeownership. This group's satisfaction rating was 76 percent.

HomeGain collected some comments from some of the surveyed homeowners. Here's how one satisfied homeowner summarizes homeownership, "Just knowing I own it. I rented a house two times after owning a home for 16 years, and I do NOT like relying on, and dealing with, a landlord! I also feel pride in owning my home. I just bought a house 8 months ago and am very happy!"


Written by Phoebe Chongchua
January 27, 2012

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
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Relying On An Agent

The latest NAR Profile of Home Buyers and Sellers showed a growing trend among recent buyers.

The latest figures show that 89 percent of buyers purchased their home with the help of a real estate or broker. This is a sharp increase from a decade ago in 2001, when only 69 percent of buyers enlisted the help of an agent or broker.

Why do today's buyers buyers choose to work with an agent? Let's look at just a few of the many reasons an agent can be your biggest ally.

First, agents are licensed professionals, which means they had to complete coursework and pass an exam in order to become and agent. They have the education and experience to help you navigate what will be one of the biggest purchases of your life.

They also have access to a wide range of properties and can guide you to those that are the best fit for you, which can save you time and energy. If you are unsure what type of property you're interest in, an agent can help explain the pros and cons of things such as condo life versus single-family detached living.

Where are the up and coming neighborhoods? Which areas are more walkable or have access to better schools? These are all issues an agent deals with daily.

They can also ease the burden of buying by simplifying the process. They set up showings, drive you to appointments if needed, and help you handle the intricacies of negotiations.

Today's market also presents challenges that simply weren't present or didn't dominate the market a decade ago. Buyers are faced with some great deals, but through some complicated channels, such as short sale or foreclosure. How does one handle these sort of contracts? Your agent or broker will know.

According to the NAR, "More than ever home buyers are relying on real estate agents and brokers to help them with their home purchase regardless of whether the home they are buying is a foreclosure, short sale, or even a FSBO sale because they need a real estate agent to help them through the process."

Finally, buyers are unsure if now is really a good time to buy. They need to rely on someone with local market knowledge. Is this a good neighbor to invest in? Are prices still dropping in this community? How long do homes take to sell? What is the median selling price? Buyers want the best deal out there.

The 2011 Profile found that more buyers are opting against dual agency, where the agent represents both the buyer and seller. This could signal that today's buyers are very cautious about getting into the market. While a dual agent isn't supposed to harbor any bias, buyers now want to be extra sure they are getting the best deal possible. In fact, "60 percent of recent buyers had an oral or written arrangement with the real estate agent or broker so that the buyer's agent only represented the buyer and not the seller."

If you are considering entering buying a home this year, be sure to strongly consider using a real estate agent. They could be your biggest ally.


Written by Carla Hill
January 17, 2012

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Top 10 Tips for Sellers

Today’s sellers may face challenging conditions in many markets, but that doesn’t mean choosing to sell is a bad idea. There are many reasons to sell and most are good ones.

Here are ten tips to get you on your way to getting your home sold.

1. Hire a Professional. This is no time to be navigating the rough waters of the real estate market on your own. You want someone who can help you accurately price your home, bring in potential buyers, handle contracts, and market your home to the masses.

2. Fully Disclose. Are you selling because your current home needs more work than you can handle? Are there infestation problems you’d rather not talk about? You must disclose all of these facts to potential buyers. If they find out after the fact that you withheld information you could be in a whole heap of trouble.

3. Be Realistic about Pricing. It is much wiser to price a home correctly from the start of the selling process than to have an overpriced home sit on the market for months only to have to do a price reduction. You get much more traffic on a well-priced home and newly listed home.

4 . Detach Emotions. Sellers may have the inclination towards adding sentimental value to a home. They see the memories and work they’ve put into a property and think every buyer should recognize this. This kind of attachment will make it harder to make smart and timely decisions about offers.

5. Be Involved. Yes, you’ve hired a professional to handle the legwork and legality of your sale, but you’ll rest much easier at night if you understand the process and all that is going on. Be sure to have regular conversations with your agent.

6. Stage your Home. Staging is a perfect way to help buyers see the true potential of each room. This may mean, however, that you have to tone down your own style and pack away any clutter or extraneous decor.

7. Don’t Hover. Sellers can put a lot of heart and soul into staging and getting a home ready for the market. They might want to hang out during an open house. Resist the urge. This makes it very uncomfortable for buyers. So, during showings of any kind, be sure to make yourself scarce.

8. The Next Step. Are you going to be buying another home? Have you decided to rent? Under normal sales, you’ll have plenty of time to make arrangements, but you also might get a buyer who needs to move in right away. Be ready to take your next step.

9. Be Flexible. It’s no secret that today’s market can be challenging for many sellers. Some markets have seen sharp price declines and shallow buyer pools. This means you need to be flexible on both price and terms. Don’t compromise on your bottom line, but understand that you must be willing to negotiate.

10. Positivity. Focus on the good in today’s market. Pull your attention to the feedback you get from your agent and prospective buyers! Most of all, don’t get discouraged. You will find a buyer!

Selling in today’s market can be a tough, but rewarding. So, whether you’re selling to move up, downsize, avoid foreclosure, or are following a job, be sure to keep these ten tips in mind for smooth sailing.

Published by Realty Times

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Are You Ready to Buy?

Making the move from renter to homeowner can be a big step. While homeownership comes with a lot of perks, it's also a huge financial responsibility. How do you know if you're ready to buy?

Are you ready for a more stable home? Rental rates vary year to year, and as a renter you are at the mercy of your apartment's management. Are they good at addressing problems, or are you left with a dwelling full of needed repairs.

Owning a home with a fixed-rate mortgage, the form of mortgage our experts recommend, means you know exactly what your monthly payment will be for the life of the loan. When a problem arises, you have the ability to fix it without having to jump through red management tape.

Stability goes further than just a fixed monthly payment. Studies have shown that owning a home brings stability to both your family (higher graduation rates, lower crime rates) and your community (more civic involvement). And you can't put a price on the privacy and space a home affords you. Single-family detached homes generally comes with yards and bigger square footage than apartments.

Now that you've thought about the dynamics of homeownership, it's time to consider the financial logistics. Does buying a home make financial sense right now? This answer depends on a few important factors.

First, do you have steady employment? There is no backup for making your payments. When you sign a mortgage loan, you are agreeing to make a payment every month. Do you expect your job to continue well into the future. If not, do you have marketable skills that are needed in today's economy?

Second, do you have an 8-month emergency fund? Savings and downpayment aren't enough to ensure security for your family. You must have at least 8-months worth of bill money saved away. If your monthly expenses add up to $3,000 a month, then you need $24,000 in an emergency fund that you don't touch.

Third, do you have good credit? Interest rates are at historic lows, but lending is tight. You must have an excellent credit score to get the best rates. And a sub-par credit score may have you sitting on the sidelines altogether.

Fourth, do you have savings for a downpayment? Financial experts recommend having at least 20 percent to put down. That means on a $200,000 house you'll need $40,000 for a downpayment. If you don't have the money, will family be contributing?

Consider these issues when you deciding whether or not now is the time to buy. If you have all your "ducks in a row," then now is a great time to buy.


Written by Carla Hill
May 4, 2011

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Real Estate Investors: Understanding Your Options

For real estate investors, Chapter 11 can be a lifesaver - a proverbial "fresh start" from an otherwise seemingly impossible situation - which gives the debtor a respite from creditors. And, given the nature of the current economy and the challenges that confront major companies and individuals in the real estate industry, federal bankruptcy law is possibly a creative solution that can benefit real estate professionals, including: lenders, borrowers, developers, brokers, appraisers, accountants and other advisers. This point - that filing for bankruptcy is a beginning, not an end - bears repeating, because real estate investors deserve the right to work with experienced attorneys who understand this intricate area of law, a discipline that allows companies to often reemerge towards success.

First, the Bankruptcy Code can be a company's sole means of salvation. Hostess, The Los Angeles Dodgers, MGM, Blockbuster, and Trump Entertainment Resorts - all of these businesses have used bankruptcy as a way to regain balance and develop a blueprint for success. Bankruptcy can offer a precious commodity: time. For time gives the debtor the chance to reorganize its finances with a "breathing spell" from creditors.

Second, a bankruptcy filing gives a real estate investor flexibility. The debtor can design new financing for the bankruptcy court's consideration and approval. The judge has wide discretion to fashion a new and practical relationship between borrower and lender.

Third, with plunging real estate values, the debtor can call on the Bankruptcy Court for a "stripdown" of a lender's secured claim. For example: if an owner buys property for $1,000,000 and puts $300,000 down, the bank has a claim for $700,000 and is oversecured. When the property value falls to $600,000, the bank's claim of $700,000 is split into two parts, the secured part equal to the value of the property or $600,000.00, and the unsecured part, $100,000 that attaches to no collateral value. The debtor can generally pay a very small distribution on the $100,000, ,and go forward with easier debt service on the lower secured claim of $600,000. In turn, the lender has devices and procedures for its protection.

In a nation of property owners calling banks for "modification," a process in which the lender acts as a prosecutor and judge, and is so overwhelmed that it may lack the human resources to handle the flood of calls, the owner sees delay and uncertainty - which makes bankruptcy more compelling.

These points are not purely academic. Bankruptcy law - particularly for real estate investors - is of vital importance. A recent ruling underscores the complexity and ongoing development of bankruptcy issues. This case (Philadelphia Newspapers) upholds a debtor's efforts to prevent its secured lenders from credit bidding in connection with an auction held under a plan of reorganization. The economic effect of this legal development can be a benefit for borrowers and a challenge for secured lenders, especially in an era of commercial mortgage backed securities in which a consortium of lenders may not agree upon or be able to make a cash bid.

Real estate investors must be aware of the opportunities available through the Bankruptcy Code. Navigating this complex discipline depends on wise counsel and effective representation. To keep this ship afloat - to enable investors and companies to reach a more ideal destination - requires a thorough understanding of the obstacles (and opportunities) that define our current economy. With resolve and insight, real estate investors can use the Bankruptcy Code for their own improvement.

Written by Jerome S. Cohen - Opinion & Commentary
December 16, 2011, Published by Realty Times

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30-Year Fixed-Rate Mortgage Settles in at 4.00 Percent

In Freddie Mac's results of its Primary Mortgage Market Survey®, the average fixed mortgage rates changing little and remaining near their historic lows helping to keep home buyer affordability high. The 30-year fixed mortgage has averaged at or below 4.00 percent for the fifth consecutive week while the 15-year fixed has hovered around 3.30 percent. Additionally, adjustable-rate mortgages ticked down slightly averaging new record lows for the second straight week.

30-year fixed-rate mortgage (FRM) averaged 4.00 percent with an average 0.7 point for the week ending December 1, 2011, up from last week when it averaged 3.98 percent. Last year at this time, the 30-year FRM averaged 4.46 percent.

15-year FRM this week averaged 3.30 percent with an average 0.8 point, the same from last week when it averaged 3.30 percent. A year ago at this time, the 15-year FRM averaged 3.81 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.90 percent this week, with an average 0.6 point, down from last week when it averaged 2.91 percent. A year ago, the 5-year ARM averaged 3.49 percent.

1-year Treasury-indexed ARM averaged 2.78 percent this week with an average 0.6 point, down from last week when it averaged 2.79 percent. At this time last year, the 1-year ARM averaged 3.25 percent.

Occording to Frank Nothaft, vice president and chief economist, Freddie Mac:

"Mortgage rates were little changed this past week, with the average 30-year fixed-rate mortgage at or below 4.00 percent for the fifth consecutive week. This week the Federal Reserve released its latest Beige Book review of regional economic conditions, noting that the residential real estate market generally remained sluggish through the first half of the fourth quarter but that the economy expanded at a moderate pace in 11 of its 12 Districts. The extraordinarily low mortgage rates of the past month may provide a needed spur to housing activity.

"Economic data released this past week included the Conference Board's consumer confidence index, which had the largest jump in November since April 2003, and the S&P/Case-Shiller© 20-city composite index (seasonally adjusted), which fell for the fifth consecutive month in September to the lowest reading since April 2003. More optimistic consumers, lower house prices, and bargain mortgage rates may have contributed to the 10.4 percent jump in pending home sales in October to the strongest pace since November 2010 and may bode well for future home sales."


Posted by Realty Times

December 2, 2011

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Mortgage Rates Remain Low As Investors Stress Over Europe

Last week, the stock market continued to tumble, but mortgage rates remained low as investors continued to stress over what is happening in Europe. Reports that Black Friday retail sales were better than expected turned things around this week, at least for a little while. Stocks rallied on Monday and were able to gain back some of their losses. Freerateupdate.com's survey of wholesale and direct lenders show that mortgage rates remained flat at all time lows throughout this time. Borrowers who may be interested in a home purchase or refinance will find 30 year fixed mortgage rates are at 3.750%, 15 year fixed mortgage rates are at 3.125% and 5/1 adjustable mortgage rates are at 2.500%. With good credit, these are the lowest mortgage rates available with 0.7 to 1% origination fee. There is a lot of opportunity available right now for qualified borrowers to obtain the best value for their money. According to the Mortgage Banker's Association, purchase applications were up for the week ending November 18th which means that many borrowers are taking advantage of low home prices and low mortgage rates that are now in place at the same time, something that is not seen too often.

FHA mortgage business should begin to pick up now that FHA loan limits have increased to $729,750 in high cost areas. This amount may seem like a lot of mortgage money for FHA to offer, especially because they promote affordable housing, but in metropolitan and surrounding city areas, this is a reasonable cost for an average home. Current FHA 30 year fixed mortgage rates are at 3.500%, FHA 15 year fixed mortgage rates are at 3.000% and FHA 5/1 adjustable mortgage rates are at 3.000%. FHA mortgages require a low down payment of 3.5% to borrowers who have credit scores no lower than 580. For scores between 500 and 580, a 10% down payment is required. There are different options available with FHA mortgages that help cover the higher FHA closing costs (APR) which is due to various FHA fees and the upfront mortgage insurance premium.

Along with other mortgage rates, jumbo mortgage rates have continued to be consistently low which has helped keep mortgage costs down for high end borrowers. Current jumbo 30 year fixed mortgage rates are at 4.500%, jumbo 15 year fixed mortgage rates are at 4.375% and jumbo 5/1 adjustable mortgage rates are at 3.250%. With excellent credit, these are the lowest jumbo mortgage rates available with 0.7 to 1% origination fee. Jumbo mortgages are usually kept in a lender's portfolio since they are not government insured. Considered private loans, jumbo mortgages have stricter guidelines and require a higher down payment and documented assets for necessary reserves.

Market volatility has caused mortgage backed securities (MBS) prices, which moved mortgage rates in the opposite direction, to fluctuate throughout the week. In the end, mortgage rates were able to remain stable. Last week, the Super Committee's failure to come to an agreement on the deficit caused some stirring in the markets. Data releases were mixed with jobless claims coming in higher than expected, personal incomes rising slightly and Durable Goods for October decreasing. Successful reports of Black Friday sales had investors turning away from safer assets at the start of this week, at least for awhile. The European financial crisis is still a major issue since so many countries are involved and the future of the Euro is at stake. Italian bond yields skyrocketed last week which then caused Germany to have problems selling its bonds. Speculation that the IMF will be getting involved is helping to calm investors fears slightly, but concern will continue to be a big part of volatility this week.

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
December 1, 2011

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Family Mortgages Help Buyers Pursue The American Dream

The real estate market took a beating and many people suffered severely but many buyers today still want to have the American Dream and own their own home.

The problem is mortgages are hard to get and people are underemployed, but there is a solution that's making housing a family affair.

USA Today reported that family mortgages are growing in popularity. The chief executive, Timothy Burke of National Family Mortgage, calls the family mortgage "an opportunity to create a win-win".

Burke's company sets up and services intrafamily loans. The idea is that in a time when parents of grown children are looking to earn greater interest on their investment money and simultaneously their grown children are looking to buy a house at a lower interest rate, an intrafamily loan could help both sides.

According to USA Today, more than 12 million in loans has been financed to help families through National Family Mortgage. Those intrafamily loans range from an $18,500 down payment to a refinancing for $1.17 million.

For many parents the stock market is a big risk. So the opportunity to invest in their child's mortgage is a creative solution for both parent and child. In some cases, loans are so difficult to get that even if buyers have 20% down, they can still be rejected. Additionally, some buyers are losing out to cash buyers.

The intrafamily loans are giving some buyers a competitive advantage by allowing them to make an all-cash offer, especially on homes like foreclosures where the market is competitive.

According to the National Association of Realtors (NAR), last year, 9% of first-time homebuyers who made a down payment had received a loan from either a friend or relative. Also in 2010, nearly 30%, of those surveyed for NAR's annual Profile of Home Buyers and Sellers, reported that they received a gift from a friend or relative.

If you're planning to use the intrafamily mortgage, be sure to meet with experts to help guide you through the process. As more parents help their grown kids get into housing, the American dream stays alive for them. NAR found, in the same study, that without the help, buying a home would be very difficult–nearly 36% of first-time homebuyers needed help with a downpayment.

Fueling the interest of parents' involvement in an intrafamily loan are a few powerful factors including: the desire to help family members, the incentive to receive a higher interest return, the increasingly affordable homes, and the concern for their children's economic future.

The intrafamily mortgage may be the next best solution to what has not usually been seen in America but is certainly more popular in other cultures, multi-generational housing. However, if families can't combine and live together the intrafamily loan still offers the grown child and the parents an opportunity to help each other in tough economic times.

Published by Realty Times

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Will Rates Stay Low?

While the Federal Reserve has promised to keep rates "low" until 2013, it is clear to many experts that the current historical lows we are experiencing will not last.

According to the latest projections from the National Association of Realtors® (NAR), interest rates should gradually rise out of historic lows as we move through 2012.

This isn't the most welcome news for a housing market that has continued to falter and a credit market that already has tightened lending standards

The NAR reports that current surveys reflect the tight credit conditions. They report that recent buyers are staying well within their means, with higher incomes and higher downpayments.

Richard Peach, Senior Vice President at the Federal Reserve Board of New York, who said the economy is under-performing, reports, "Nearly two-and-a-half years since the end of 'the great recession,' the economy continues to operate well below its potential. Among the significant structural impediments are the legacy of the housing boom and bust, and fiscal contrition at the state and local level."

Lawrence Yun, chief economist of the National Association of Realtors®, said home sales should be stronger. "Tight mortgage credit conditions have been holding back home buyers all year, and consumer confidence has been shaky recently," he said. "Nonetheless, there is a sizable pent-up demand based on population growth, employment levels and a doubling-up phenomenon that can't continue indefinitely. This demand could quickly stimulate the market when conditions improve."

It is this improving jobs markets that many analysts are waiting for. Yun projects the GDP will grow 1.8 percent this year and 2.2 percent in 2012. The unemployment rate should decline, albeit modestly, to around 8.7 percent by the end of 2012.

Around this same time, experts expect that "mortgage interest rates should gradually rise from recent record lows and reach 4.5 percent by the middle of 2012."

This is still an incredibly low rate and many experts feel that housing market, while still struggling, will improve throughout next year and after. In fact, the NAR expects new home sales to reach 372,000 next year. Existing home sales could fare just as well, rising 4 to 5 percent in 2012.

"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," Yun said. "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." The bottom line is that the housing market should improve over the next year and along with that improvement will come higher interest rates. Buyers interested in making a move should take head of today's historically low rates and high levels of affordability.

Published by Realty Times
Written by Carla Hill
November 16, 2011

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Choosing a Condo

Not all home buyers have dreams of spacious lawns, rambling rooms, and secluded properties. Many buyers, rather, are on the search for a home that will be easy to care for and will give them plenty of chances to be active and social.

From first-time buyers to down-sizing retirees, condos offer a wealth of opportunity. Many come equipped with clubhouses, gamerooms, gyms, and common outdoor meeting areas. Others go above and beyond with organized mixers, dances, movie nights, and more!

Condos can be a great choice for single homeowners looking to socialize. They can be a wonderful choice for older adults who are fully capable of caring for themselves, but wish to cut back on home maintenance.

Typically, owning a condo means you no longer have to worry about mowing your yard, maintaining landscaping, cleaning or scooping sidewalks, or making large-scale repairs. You pay a small fee each month that pays for your portion of this upkeep. Your condo association should also have a reserve fund that is held for large repairs, such as roof replacement, when the time comes.

The operative word is "should." Not all condo associations are the same. Before you buy, be sure to check into how diligent the association is. Are they up-to-date on reserve studies? How often in the last 10 years have they raised fees? Do they have an lawsuits pending?

Additionally, not all condo communities are equal when it comes to amenities. When you set up a showing, be sure to visit all that will be available.

This next upside has a catch. Condos generally come with an extensive set of rules. This means the condo government says what you can do to your home and what you can't. They can prohibit improvements, pets, home-based businesses, and subletting. The positive side of these rules is that your condo community should stay uniform, updated, and in good order. If you have an issue with a neighbor, you can easily lodge a complaint, for they are liable to the condo rules.

As every up has it downs, there are some drawbacks to owning a condo. One primary negative is the overall lack of storage. Generally, you have no garage, attic, basement, or backyard storage shed to house those Christmas decorations and other treasures.

Another hefty downside is the monthly HOA fees. For the entire time you own the condo, you will be expected to pay fees. While these go towards upkeep and amenities, it is an added financial burden that one must consider on top of purchase prices. Additionally, you are still responsible to pay your monthly fees even if your condo is entirely paid off.

Finally, while owning a condo means you have many comparable homes on hand for pricing comparison, it also means you have lots of competition on hand for units that are just like yours.

Condos can make ideal and happy homes. Be sure to do your due diligence when researching what community is right for you!


Written by Carla Hill
October 12, 2011

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