Gay Real Estate News

Mortgage rates beat tax-credit benefits

Homebuyers today can potentially save several times more money in interest costs than buyers who took out a mortgage in early April and claimed an $8,000 homebuyer tax credit.

Yet buyers, who rushed to meet the April 30 deadline for the federal tax credits, appear much less eager to borrow at the lowest interest rates in 60 years.

Mortgage applications for home purchases are 42 percent below the pace seen in April, according to the Mortgage Bankers Association. Home resales dropped 27.2 percent in July from June, according to a report Tuesday from the National Association of Realtors.

Someone taking out a $240,000 mortgage today at a 4.42 percent interest rate could save $33,287 in interest costs over the life of a 30-year loan. That's four times the $8,000 credit used by a first-time homebuyer who financed at 5.21 percent in early April.

So why aren't more people buying now?

Timing offers one explanation. Buyers earlier this year, not knowing rates would drop, took the best deal available to them at the time.

That soaked up future demand, which more optimistic forecasts hold should return as lower rates persuade buyers to get off the fence.

Because few people stay in a home or keep a mortgage for 30 years, the time needed for monthly mortgage savings to match the $8,000 credit is another consideration, said Cameron Findlay, chief economist of LendingTree.com.

On a $240,000 mortgage, a buyer would need to stay put for almost six years for monthly mortgage-payment savings to match the upfront credit.

Studies in behavioral finance support the idea that people will go for a payout upfront versus a payout spread over a long period that is worth more.

Uncertainty leads to stagnation

Given the choice between a 10 percent pay raise when inflation is 12 percent or a 4 percent raise when inflation is 2 percent, respondents almost always go for the bigger raise, even though it means they will lose ground, said Greg Salsbury, an executive vice president with Jackson National Life Distributors in Denver.

Rather than seizing opportunities, many people also tend to freeze up when there is too much uncertainty.

"Unemployment, the deficit and the overall economy are impacting people's decisions disproportionately," Salsbury said. "There are a lot of things in play."

Some mortgage brokers and bankers argue against complicated explanations about why buyers are missing in action.

"The majority of my borrowers used the $8,000 tax credit toward the down payment, and the seller paid closing costs," said Marilyn McConnell, a mortgage adviser with Cherry Creek Mortgage.

Lower interest rates don't help those buyers who can't come up with the needed down payment or who are trapped in a home they can't sell without taking a loss.

Deflationary expectations

Selling at a loss is psychologically hard, even if you realize the lower payment on the next property will make up for it over time, said Denver resident Shanti Klemm.

"We'd love to buy a new home, but we have to sell first. It's a Catch-22," said Klemm, who estimates her family will lose $25,000 by selling its condo.

Another more worrisome explanation is that consumers expect further declines in interest rates or home prices.

A survey from real-estate website Zillow.com found that a third of homeowners thought home values in their area had more room to fall. If prices are headed lower, the rational thing to do is to wait for the better bargain. But deflationary expectations, like inflationary ones, become self-reinforcing.

During the housing boom, people bought homes because they worried that prices would rise the longer they waited. Flip that around, and people may now be waiting to buy because they expect prices to go lower.

Read more: Mortgage rates beat tax-credit benefits - The Denver Post http://www.denverpost.com/business/ci_15884623?source=pop#ixzz0yDPuCiu5

Read more: Mortgage rates beat tax-credit benefits - The Denver Post http://www.denverpost.com/business/ci_15884623?source=pop#ixzz0yDPl1300

5 Reasons Homeownership Trumps Renting

The seemingly endless run of bad housing news is discouraging some potential home buyers from considering a purchase. But the truth is that the advantages of homeownership have very little to do with investment gains. The best things about owning a home have a lot more to do with personal comfort and satisfaction.

Here are five of them:

· Be your own landlord. The bank can only kick you out if you don’t pay; a landlord can be much less dependable – deciding to sell the property or choosing to live there themselves.
· Paying the principal is forced savings. Yes, it’s possible that home prices will fall further. It is also possible that your 401(k) will lose value. But over the long haul, both are likely to enjoy modest gains in value.
· Fixed-rate mortgages never rise – and eventually you pay them off. With mortgage rates at record lows, people who buy now are locking in real bargains.
· Good schools. Family-sized rentals are harder to come by in areas with excellent public schools.
· Spacious properties in pleasant neighborhoods. Sizable homes in attractive communities are almost always owned – not rented.

Source: The New York Times

Mortgage rates at record lows: refinances are up. Sales are not.

Steadily dropping mortgage rates, which hit a record low 4.42 percent in numbers released last week, appear to be stimulating housing-market activity. Loan applications rose 13 percent in the week that ended Friday August 13th, compared with the week before, says the Mortgage Bankers Association.

But the low rates so far are generating more interest in refinancing existing loans than in home-purchase transactions. The association's index of refinance activity rose 17 percent last week, while an index of purchasing activity actually fell a bit.

Two factors could be holding back home buyers. First, many already pushed to make their purchases earlier this year, when they could tap a temporary $8,000 federal tax credit designed to spur home sales. Second, the weak job market and some signs of cooling in the economy this summer are affecting consumer purchasing power and confidence.

For people who can qualify for loans, moving forward now has a lot of appeal, some economists say.

"Houses are incredibly attractive buys now," says Paul Kasriel, director of economic research at the Northern Trust Co. in Chicago. But "a low mortgage rate doesn't mean anything if you can't qualify for it."

One reason it's tough to qualify is tighter lending standards by banks. Getting a loan requires navigating some hurdles. Another reason, affecting many who seek to refinance, is the number of US mortgages that are "under water," with the borrowers owing more to the lender than their homes are now worth.

Of course, real estate conditions vary a lot by locality. And many housing analysts say home values could fall a bit more before stabilizing.

Mr. Kasriel bases his general assessment of the market on a calculation of economic value: He uses interest rates as a gauge of the cost to buy a home, and he looks at numbers on implied rental yields as an indicator of the payback. (He divides national figures on "space rent" of housing by the market value of household real estate.)

For the first time since the mid-1960s, the yield on housing is higher than the typical mortgage rate on a single-family home, Kasriel finds. In the first quarter of this year, the implied yield on housing was 6 percent, while mortgage interest was about 5 percent.

Since then, mortgage rates have been falling steadily, to 4.42 percent in the latest weekly survey by Freddie Mac, released Thursday. That rate (for a fixed, 30-year mortgage) would come with fees and points equaling 0.7 percent of the loan amount.

Kasriel's calculation doesn't mean that homes have been a "bad buy" since the 1960s. But it's an indicator of affordability.

Another measure, the National Association of Realtors' affordability index, also shows that the financial appeal of housing may be at a four-decade peak. The affordability index blends data on home prices, household incomes, and interest rates into one number. The index shows that US homes were generally attractive buys in the 1990s and early 1970s, but much less affordable around 2005 (when home prices were soaring) or 1981 (when interest rates were sky-high).

Can you get a loan? Many banks that were handing out loans too easily during the boom five years ago may be overly reluctant to lend now. But the latest Federal Reserve survey of bank loan officers shows some improvement in lending conditions.

By Mark Trumbull

In housing slump, the right price is paramount

The good news for sellers: Your house will sell. The bad? Only if the price is just right.

That could mean biting down hard and slashing tens of thousands from your ideal listing price if you're serious about selling. And you should be prepared to get even less than that.

The recently expired tax credits for homebuyers gave sellers a boost. Home sales surged and values edged up. The worst appeared to be behind us. But since the deadline passed at the end of April, housing has faltered. Job insecurity, tight credit and consumer confidence are undermining a sustained recovery, despite the lowest mortgage rates in decades.

In June, sales of previously occupied homes fell 5.1 percent, while new home sales posted the second-weakest month on record. And many economists expect prices to decline another 2 percent to 10 percent followed by "a long, flat bottom," said Stan Humphries, chief economist at real estate website Zillow.com.

That means sellers must set their price with precision or risk languishing on the market.

Here's the disconnect facing sellers: The vast majority of sellers believe their homes are worth more than what their real estate agent recommends, according to HomeGain.com. At the same time, most buyers think for-sale homes are overpriced.

So, how do you find the sweet spot?

Analyze your market first. Determine how many houses similar to yours are up for sale. Consider neighborhood, school district, size and price point. The more homes there are, the more it becomes necessary to list at the lower end.

"I want buyers to ask why is this house priced so competitively," said Ron Phipps of Phipps Realty in Warwick, R.I. "I want the answer to be an offer."

Foreclosures and short sales, where the owner sells for less than what's owed on the property, complicate matters. Be honest. Are the foreclosures or short sales in your market a reasonable alternative a buyer would consider? Some won't be because they are in disrepair. But others, especially short sales, are often in good condition and can be priced 15 percent to 25 percent below a comparable home.

So, you've got the right price or a price low enough to attract bids. Don't be disappointed when an offer comes in below the listing price. And don't send back a token counteroffer that's only a few thousand dollars below what you want.

"Buyers are not interested in back-and-forth negotiations these days," Phipps said. "They are less emotional and more disciplined. They will walk away."

If no one shows up for an open house, if no one calls and if there are no offers, then the price is too high. That means it's time to make a meaningful price cut. You won't be alone. Almost a quarter of all listings on the market at the beginning of July had at least one price reduction. The average discount from the original listing price? Ten percent, according to Trulia.com.

And cut with a machete and not a butter knife. Too many dinky reductions become a scarlet letter on your front lawn, and would-be buyers will think you're not serious.

Compliments: http://www.rgj.com

 

Condos versus Houses: Critical Legal Insight for Every LGBT Condo Buyer

Many LGBT buyers mistakenly and understandably assume that the purchase of a condo is no different from buying a typical single family home. But the fact is that condominium ownership has its own exclusive set of rules that are quite different from those that apply to traditional houses.

The laws of ownership are not exactly the same and neither is the totality of the physical assets and amenities that are fully transferred to the buyer. That’s why is it crucial that LGBT consumers familiarize themselves with the special characteristics of condominium ownership before they enter into a contract to buy a condo. Even those who have plenty of experience buying and selling “regular” dwellings will need to understand how condominiums are uniquely different – not just in the way they look but also in the way that condo contracts work.

The most important thing to grasp is that the term “condominium” does not refer to a style of architecture. Although most condos do have a similar apartment type of look – with units arranged so that they open into an interior hallway and basic floor plans and designs that resemble one another – the term “condo” really refers to a legal definition. Many LGBT buyers don’t make that distinction, but it is an important one that impacts the overall ownership experience. The truth is that almost any kind of structure, from an office building to a cluster of townhouses, may be sold as condominiums as long as the legal framework for condos exists.

Just as hybrid vehicles run on a combination of gas and electric power, the legal format of the condo is a clever blend or hybrid of individual and communal ownership. The owner of a condo owns the unit where they live, but they also share other amenities and features with everyone else who is also a member of the condo ownership group or homeowner’s association.

An owner may own their balcony, for example, and the rooms inside their condo. But they don’t individually own the roof above their unit, the hallway outside, or the parking lot. Those features are owned in partnership with the rest of the condo residents. Each owner, in other words, claims a share of many common features that might include the outside landscape, the swimming pool, the central air conditioning system, the plumbing infrastructure, the condo management office, the sidewalks outside each condo, and the building’s elevator.

While a person may be able to do whatever they want with their own unit, they have to get permission to make any changes to the shared property. If common property needs to be repaired or replaced they also have to shoulder their fair share of financial responsibility to make that happen. Many condo owner associations also prohibit the renting or leasing of individual condos, for example, so persons who buy a condo and then decide to lease it may be penalized. That kind of rule helps to ensure a more stable community of neighbors. But whether that is interpreted as a drawback or a positive benefit will depend upon the point of view of each individual resident, so before buying it is necessary to carefully study all of those rules and regulations.

Once upon a time that list of rules would normally be only a few pages long, but these days it is more common to get an entire computer CD full of legal jargon explaining the rights and obligations of each owner. This includes the bylaws of the ownership association and it should also show a detailed accounting of money that is set aside or spent from the accumulated monthly condo maintenance fees.

Check the bylaws and notes from meetings to find out, for instance, if any major repairs have been done or if there are any disputes with contractors. If the roof is in bad shape, the paint is peeling, and the landscape is a mess but there is not enough money in the condo association account to remedy those problems, that’s a red flag. But when the maintenance fund is flush with cash and the condo project is in immaculate condition, that’s a great sign of sustainable value.

The best way to wisely invest in a condo is to do so with the expert guidance of your Realtor, a building inspector and possibly a real estate attorney. Hire those who specialize in condos, though, because the scope of the inspections and the legality of ownership restrictions for condos are different when compared to all other types of real estate. They can explain everything and answer any questions that arise so that the buyer knows exactly what they are purchasing and can enjoy a stress-free closing and a happy condo ownership experience. It is also strongly recommended that LGBT buyers work with LGBT real estate agents because they will better understand the unique needs and concerns of the LGBT buyer.

Connect with a gay realtor / real estate professional devoted to serving the LGBT community by visiting www.GayRealEstate.com, the world’s largest online network of Gay, Lesbian and Gay Friendly Realtors. Or just call toll free 1-888-420-MOVE (6683).

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Cell Phone Numbers Go Public this month. All cell phone numbers are being released to telemarketing companies within the next few weeks
and you will start to receive sales calls. In many cases, depending upon your phone plan, you will be charged for these calls.

To prevent this, call the following number from your cell phone: 888-382-1222. It is the government's National DO NOT CALL list. Calling takes about a minute and it will block your number for five (5) years. It is
basically the same system that went into effect for landlines a few years ago when Congress passed the original DO NOT CALL list legislation.

You must call from the cell phone number you want to have blocked.
You cannot call from a different phone number. For more info you
can visit the official government site: https://www.donotcall.gov/default.aspx

5 Most Affordable Housing Markets

The most affordable city in the United States is Syracuse, N.Y., according to the latest Housing Affordability Index from the National Association of Home Builders and Wells Fargo.

The index considers a home affordable if a family would have to pay no more than 28 percent of take-home pay for housing expenses.

Here are the five areas where housing exceeds this benchmark and the median property prices:

• Syracuse, N.Y., $88,000
• Indianapolis, $113,000
• Detroit, $85,000
• Youngstown, Ohio, $74,000
• Buffalo, N.Y., $112,000

Source: CNNMoney.com

Avoiding Foreclosure ~ Steps to Solutions

In today’s real estate market, 1 out of every 6 homeowners owes more on their property than it’s worth or are having difficulty making their mortgage payments. Facing the possibility of foreclosure can create family anxiety, stress, uncertainty and heartache. Homeowners need to understand they are not alone. Statistics show that more than 70% of these homeowners proceed without seeking assistance.

Foreclosure is a process and once an Election and Demand Notice is filed, the homeowner still has approximately 110 days to make decisions that may result in a better outcome. Having the motivation to take action and locating a professional to assist you with a plan of action is the first step.

First, homeowners need to understand their situation. If the bank has filed an Election and Demand Notice there is still time for the homeowner to analyze and implement their next step(s).

Step #1. Take action.
Step #2. Contact an educated agent.
Step #3. Organize Your personal documents and information
Step #4. Contact your lender
Step #5. Understand all your options
Step #6. Action

Every homeowner deserves the best available information and education to avoid losing their home to foreclosure and damaging their credit for years to come. If a homeowner is struggling to pay mortgage payments or has received an Election and Demand Notice of the Public Trustee Sale, do not panic. There are still available options. Always work with a professional that is trained in distressed properties. Trained professionals will give you all the facts and information to select the best available option to fits your unique needs.

Despite the myths that the banks want your property, that couldn’t be further from the truth. According to Bank of America (June 10, 2010 Short Sales and Foreclosures Summit) the 2010 ratio of short sales to foreclosures is 6:1. Last year that trend was reversed, at 1:6 (short sales to foreclosures). They also understand by doing a short sale verses a foreclosure, the home will sell for approximately 12% to 20% more than a foreclosure property. The banks are willing to work with homeowners and it is important for homeowners to understand the process and take the appropriate steps and actions to avoid foreclosure!

FHA Feature: FHA is Changing...What is the Upside?

FHA is changing the way they administer Mortgage Insurance. Right now on all FHA loans, the borrower has to pay an Up Front Mortgage Insurance Premium (UFMIP) as well as the monthly premium that is included in their monthly house payment. Currently the UFMIP is equal to 2.25% of the loan amount and can be financed into the loan. The monthly premium is currently .55% of the loan amount annually (then divided by 12 to get the monthly premium). On a $200,000 purchase, the upfront onetime charge is $4,342 and the monthly premium is $87.

Congress has passed an FHA reform bill that is set for President Obama to sign. FHA will then institute new mortgage insurance rules that will become effective on Sept 7, 2010. The new mortgage insurance rules will lower the upfront premium from the current 2.25% to 1%. This sounds great? Well, let’s look under the covers. The new rules will increase the monthly premium .55% to 9%. If we use an example loan amount of $200,000 the net effect of all of this will be an increase of $44 a month for buyers. FHA is doing this because their insurance fund is below the congressionally mandated level due to the problems in the lending industry over the last few years. This increase in premiums will bolster FHA's ability to insure loans but the burden is now once again on new buyers.

Now for something interesting…the tax credit is over and many people thought the market would drop off. That has happened to a degree, but life goes on and there are still plenty of people buying and selling homes despite the negative hype in the media. Some people missed the excitement of the tax credit feeding frenzy, feel a little deflated and have decided to wait….well, after reading the next paragraph they may change their minds!

Here’s the GOOD news…Current interest rates are in the low to mid 4% range. This will save buyers much more than the $8,000 tax credit. Based on a $230,000 loan, if you compare the saving on a rate of 4.25% vs. the rate of 5.25% which was the average during most of the tax credit, the savings is around $138 a month. Over 5 years that equals a savings of $8,280. Over 10 years the savings equals $16,650. Hmmm…that’s double the tax credit! Whether you plan to stay in your new home 5 years or longer, you could have a greater benefit than the tax credit!

Many smart buyers see the opportunity and are taking advantage of the best rates in decades before the FHA increases mortgage insurance premiums. If you’ve been thinking of buying, now is a great time to get serious!

Condo Owner? - Play Nice.

In sometimes-complicated relationships between residents and their condo or homeowner associations, neighborly love can go only so far. When it comes to association decorum, the more you know about the CC&R’s (covenants, conditions and restrictions), the better. It’s the homeowner’s job to reinforce these governing rules and regulations, which can easily pit residents against association members. Here are a few hot-button issues that, according to Realty Times and Condobenefits.com, are important to keep in mind:

Pets. Many condominiums restrict the permitted size and number of pets, if they allow them at all. Check in with the head of the association before bringing any four-leggeded friends hime, and take note of any restrictions – such as the proper way to clean up after your pets and whether they’re allowed to stay outside for any period of time.

Parking. Take note that beyond your four walls, the land is not all yours – including your driveway. What are the parking restrictions for residents? For guests? Have the conversation before guests arrive to ensure that vehicles are out of fellow residents’ way. Keep in mind that many condos limit the number of cars to reflect the number of residents in the home.
Maintenance. There are two areas to consider: What does the association take care of, and what are your responsibilities? Typically, condo owners can rely on workers hired through the condo association to help maintain the exterior of their home, including painting, roof repairs, lawn maintenance and trash collection. But depending on association rules, sweeping your porch by Tuesday afternoon each week or setting trash on the curb (not the end of your driveway) before Monday morning might be mandatory. Find out the specifics to avoid future headaches.

Fees. All associations have monthly or annual fees that residents must pay, but dig a little deeper and find out what happens if you accidentally break a rule. The last surprise you want is a letter stuck to your door telling you to pay up or risk eviction. Additionally, keep in mind your building is due for a code upgrade – every five, 10 or 20 years, condo associations can change residents large fees written into the minutiae of the CC&R’s.