Real Estate Information Archive

Good Monday Morning!

I am asked frequently these days about mortgage rates jumping due to the Feds recent increase in their rates.  The fact is that the Fed's increase had little effect on mortgage rates and in fact mortgage rates have continued to decline since the Fed increase.  If you want to purchase a home, now is the time.  Our current low mortgage rate situation is not here to stay, but you need to take advantage of it.  Here is an article from "Realtor.com" that explains our current situation with mortgage rates.  It is an interesting read.

The Federal Reserve recently raised interest rates, U.S. stocks are tumbling and new worries about the Chinese economy seem to emerge daily. So go ahead and buy that house you’ve been looking at.

Well, not necessarily. But consider: all the worries about China that have battered the U.S. stock market in early 2016 have done the opposite for bonds. More money pouring into Treasurys has driven mortgage rates to a two-month low. A 30-year mortgage slipped to 3.92% in mid-January.

The housing market had already been steadily gaining ground even before the latest drop in rates. Indeed, it’s been one of the strongest parts of the economy over the past year. Sales of new and previously owned homes are likely to finish 2015 at the highest level since before the Great Recession.

What’s more, the number of permits to build additional homes is on track to reach an eight-year high.

The final housing numbers for 2015 will start to trickle in this week.

Work on new construction, known as housing starts, is forecast to rise to a 1.19 million annual rate in December from 1.17 million in the prior month. Starts will top the 1 million mark for the second straight year.

Six years ago, builders were producing fewer than 600,000 new homes a year.

Sales of existing homes, meanwhile, are expected to hit a 5.15 million annual rate in December and finish the year about 25% higher compared to the post-recession low.

Most economists predict new construction and sales will increase again in 2016, aided by a much improved labor market. Barring, of course, China bringing the rest of the world to a crashing halt.

“The U.S. economy added more than 200,000 jobs per month on average in 2015, and wage growth is picking up,” noted Stuart Hoffman, chief economist of PNC Financial Services.

In the past three years, the U.S. has produced 8.2 million new jobs to give more people entering their prime earning years the ability to buy a home.

The big wild cards are mortgage rates and home prices, both of which could deter buyers.

The Fed raised a key short-term rate in December for the first time in nearly a decade, and the central bank is widely expected to push rates even higher in 2016. Yet so far that hasn’t translated into upward pressure on long-term Treasurys or home mortgages. Right now investors are more worried about whether a slowing Chinese economy will hurt the rest of the world.

The higher cost of buying a home could act as another repellent. Prices rose in 2015 to levels last seen shortly before the onset of the Great Recession in late 2007.

An expected increase in home construction could make it easier for buyers, though. Permits for new construction in November, for instance, were almost 20% higher compared to the same month in 2014. A greater supply of homes for sale would help hold the line on prices.

While home builders remain optimistic, the same can’t be said for American manufacturers. Sales and profits have softened over the past year because of a strong dollar, weak global economy and a slump among energy firms that are among the biggest buyers of manufactured goods.

A monthly Philadelphia Federal Reserve report on the state of manufacturing is likely to show an industry still under siege in January.

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

3759 Westleigh St

Price: $185,000    Beds: 4    Baths: 2    Sq Ft: 1645

Great townhouse! Townhouse with garage and yard. Four bedrooms and 2 bathrooms. Large kitchen, window shelves and seating. Fenced patio. Located one block from shops, school, park....
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AND HERE'S YOUR MONDAY MORNING COFFEE!!

Good Morning!

For many new home buyers, the task of trying to find and purchase a new home can seem very complex.  The truth is that if you have good leadership and advice along the way from a Real Estate professional and mortgage lender, the process can be very easy and you can achieve home ownership very quickly and efficiently.  Here is an article from Realty Times that gives some insight into the process of home buying.

Home-buying is multi-tasking on steroids. Are you up for the challenge?

On the surface, buying a home seems simple: find your dream home and buy it.

In reality, this seemingly-simple task requires buyers to make a continuous stream of under-pressure decisions, often concerning issues and consequences they do not fully understand. Instead of one task, buyers are faced with hundreds of tasks many of which must be decided on simultaneously, on very short deadlines. This makes decision-making a challenge, but it's the knowledge gaps and "I've never thought about this before" perspectives revealed in smart home buying that add the real pressure. At its best, purchasing real estate is an exhilarating race through a labyrinth of snap decisions ending with the purchase of real estate. At its worst, home buying can become a multi-tasking nightmare culminating in the purchase of the wrong property, in spending too much, or in no purchase at all.

To swing the outcome in your favor, one key task is choosing the "best fit" real estate professional to guide you through the home-buying process. This real estate expert will keep you fully informed, so that even snap decisions are solid choices you will thrive on.

Face the complexity of successful home buying head on and it will not overwhelm you.

Purchasing real estate involves making a series of decisions which combine to address the essentials of successful real estate ownership. The "I've never thought about that before" perspectives that challenge decision making, especially for first-time buyers, can be categorized by the specialized knowledge required.

Here are Seven Insights into Successful Multi-Tasking:

#1. Investment: What is the value-appreciation potential of the property?

Does it seem strange to think about resale value when you haven't even purchased yet? This perspective is important since it reveals current value deficits. In addition, after paying off the mortgage (and many thousands in interest), and maintaining and improving the property over the years ahead, you'll want to recover these costs and make a profit to finance the next phase of your life. Even a "forever home" should be purchased with investment in mind since the future is full of surprises. Location is key to resale value. The best strategy is to buy the least property in the best neighborhood you can afford.

#2. Lifestyle: Which lifestyle values should the chosen property reinforce?

Are you determined to spend your time, money, and effort on accumulating "stuff" and teaching your children to do the same? If so, square-footage, lots of storage, and a bedroom each may be essential. If your values go beyond materialism, the size of the building may not be as important as highly-functional interior design, the surrounding community, and local amenities and green spaces. Shop neighborhood before you start looking at individual homes.

#3. Benefits: How do you expect ownership to benefit you and your family?

We addressed investment and its links to your financial future in #1. How else do you expect the home and neighborhood to benefit your family? For instance, locating near select schools has taken priority over locating adjacent to work for many buyers, but make sure the school in question is not so over-populated that its standards are slipping. Compare the cost of alternatives schools to the premium that real estate in "star school" neighborhoods demands. If a private school or home schooling is intended, "star" amenities may take priority over neighborhood schools.

#4. Time Management: How should your real estate support income earning?

Jobs tend to be more plentiful in urban areas. Real estate prices are usually lower and appreciation slower further away from urban centers. The expense of commuting to work goes up the further away you live. Do the math to determine what you'll net in salary after deducting the cost of commuting. Add a calculation of how many extra hours the distance will take from your family, interests, health, and fun. Only you can determine what this time is worth when you evaluate the value of buying a larger home further from city center.

#5. Property Management: How much time and money will maintaining and regularly modernizing your property require?

Gardening can be a great joy, but mowing a large lawn can be a great responsibility—and an expense if you pay someone else to mow. The larger the house, the higher the taxes, the bigger the roof, the more plumbing and wiring involved, more windows to decorate, more furniture to buy, and more space to heat and cool…. The costs attached to maintenance are annual, increasing expenses and should be considered when setting the budget for a purchase.

#6. Borrowing: How much will the cost of borrowing add to the overall cost of home ownership?

Mortgage interest and related costs are not the cost of real estate since not everyone needs a mortgage. These expenses relate to borrowing, but they can be large enough to make you house rich and cash poor. Financially stretching for a dream home, may be your choice knowing your earning power is on the rise.

#7. Backup: How will I find reliable, accurate, unbiased answers to my questions during the buying process?

GoogleTM should not be your "go-to" resource during home buying because it holds no liability if you get the wrong information or if you don't know what you don't know and should know about a topic. Settle on a real estate professional with the knowledge and experience relevant to the locations and type of real estate you are interested in. When you ask this local expert a question, they will know the complete answer or know how to get it. Real estate professionals understand that they carry fiduciary responsibilities to provide the right information at the right time, so their client (that's you) can consistently make confident decisions to achieve their stated goals.

The more you understand the home-buying process before you start, the better prepared you'll be for a multi-tasking decision-making marathon. The many small decisions about style of home, mortgage term, closing date, garbage and mail services, side of the street, distance to medical services and the firehall etc... will be manageable. You'll be ready to confidently make significant decisions about which property, how much to spend, and which responsibilities to commit to in the offer to purchase.

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

5151 & 5153 Trevon St

Price: $239,000     Beds: 4     Baths: 2     Sq Ft: 1879

Wonderful updated duplex! Each unit has 2 bedrooms and 1 bath, vinyl windows, garage with roll-up door and large fenced backyard with patio. This 0.23 acre lot located on the corner of a culdesac is within 2 miles of schools, shopping and bus route....
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AND HERE'S YOUR MONDAY MORNING COFFEE!!

Good Morning!

With mortgage interest rates remaining extremely low, first time homebuyers are still making up a huge part of the home purchase market.  If you are currently renting and wanting to own a home or if you are otherwise thinking of that first home purchase, this is the market to do it in.  The affordability of homeownership may never be much better than it is right now. Here is an article from Realty Times that gives great advice if you are thinking about that first home purchase.

Few things in life are more exciting than buying your first home. The feeling of turning the key for the first time (or clicking the garage door opener) is thrilling. You'll likely feel a sense of pride like never before. But getting to that point may be a challenge. And the challenges won't end once you move in.

The more you know about the process, the more prepared you can be for the wrinkles that pop up, and the more you can relax and enjoy homeownership.

1.It may cost more than you expect.

When you're calculating your monthly payment, don't leave anything out. Add in principal, interest, taxes, and insurance, plus any HOA fee. Then estimate landscaping, pool maintenance if needed, and any other fees there may be. Don't forget to include your monthly home warranty cost if you have one.

Experts recommend putting aside a minimum of one percent of your home price for repairs and maintenance per year, so add that in. Think also about utilities. If you're coming from a small apartment, you might have a bump in that monthly cost. Only by taking a real look at the numbers can you get a true feeling for what you'll pay every month as a homeowner.

2. You may only have to put three percent down.

FHA loans aren't your only low down payment option anymore. Ask your lender about 97% LTV loans that require only three percent down for first-time buyers.

3. You can probably afford it more easily than you think.

Rents have been going up way more than home prices in many real estate markets. A recent analysis by RealtyTrac found that, "Payments on a mortgage used to purchase a three-bedroom home were more affordable than paying rent on a similar home in 66 percent of the counties."

4. But…know how much you can really afford.

Your loan approval will tell you how much the bank thinks you can afford. But they only know so much. If you're planning to have a baby or change careers sometime soon and your income could be affected, you may want to stay lower on the payment scale, which means a higher down payment or a less expensive house (or both).

5. You need a preapproval.

Your REALTOR® will tell you this. Believe him. Even if he takes you out to look at houses without a preapproval (many won't, since it could be seen as an indication that you're not serious about buying), you won't be in a good position to make an offer if you find a place you like. And in a competitive market, that could be disastrous.

6. It may be easier to buy a single-family home than a condo.

Strict FHA restrictions on condos can make for a limited pool of options, and, if you can find one that is approved, it might have a higher interest rate. Be sure to ask your lender to provide a side-by-side analysis of a condo and single-family home in similar price ranges; a home that is priced slightly higher may end up being the answer when you examine the numbers carefully.

7. You might be able to get money to fix up your home.

Fashion yourself a DIYer? Ask your lender about 203(k) and HomeStyle loans. "Fannie Mae and the Federal Housing Administration have home renovation mortgage programs that allow buyers to borrow based on what the house is expected to be worth after the home rehab is completed," said Bankrate.

8. You might be able to get a gift for your down payment.

"Cash gifts are also allowed for low-down payment mortgages including the FHA purchase mortgage, which requires a 3.5% down payment and the Conventional 97 mortgage from Fannie Mae and Freddie Mac which requires just 3% down," said The Mortgage Reports.

They're also allowed on many other conventional loans, and can help a first-time buyer get to a 20 percent down payment that would help them qualify for the lowest rates. Check out The Mortgage Reports for important details about down payment gifts. Do it wrong, and your application can be rejected. There also may be tax implications for improper gifting.

9. Gift funds may also be allowed for your closing costs.

Be sure to ask your lender. Not having to come up with thousands of dollars at closing means money for new furniture!

10. You'll have a love-hate relationship with your HOA.

You'll appreciate them when the car up on blocks for a week in front of the neighbor's house is towed. Not so much if it's your car up on blocks.

11. You'll want to thoroughly check out the neighborhood.

Make sure there are no development plans that may affect your home value in the neighborhood you're looking at. Talk to the neighbors. Check for sexual predators nearby. And spend some time in the area at different times and on different days so you can observe the neighborhood flavor. You also might want to arrange to commute from/to the house one day to see what you have in store.

12. You'll want good schools. Even if you have no kids.

Families inherently seek a neighborhood with quality schools. But studies show that good schools can dramatically affect home value, making these neighborhoods desirable to buyers without kids as well. "Living near a high-scoring school can increase your home's value by over $200,000, according to the  Brookings Institution," said AOL.

13. You can derail your loan approval.

Don't check your credit, get a new store credit card, close an account, or buy a new car while you're in escrow - you might not stay in escrow. Listen to your lender and hold off on anything that could affect your credit or financial situation until you close.

14. The home inspection will reveal some issues. It always does.

Keep a cool head and let your Realtor handle any negotiations. You just might come out better than before.

15. You're gonna get a tax break.

You're probably already looking forward to this, but do you know the details? Your mortgage interest is a write off. So are your Private Mortgage Interest (PMI) fees and any points you pay to buy down the rate on your mortgage. All told, you could be getting a nice little return come tax day. Check out this calculator to estimate your tax break.

16. It will be more work than you imagined.

Stuff leaks, breaks, makes weird noises, shuts down, peels, crumbles, flames out, and falls off. You will learn how to fix it all, or at least how to make a phone call to someone who can.

17. It will all be worth it.

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING

 
 
 

2685 Valley Forge Dr

Price: $524,900    Beds: 3    Baths: 2    ½ Baths: 1    Sq Ft: 2302

Anslow & DeGeneault 2015 Tour of Homes model home. Gas forced air 92% efficiency, exquisite single level, located in beautiful Hawthorne Estates. Easily entertain in Great Rm overlooking backyard. Escape to luxurious owner’s ste w/ tray ceilin...
View this property >>

AND HERE'S YOUR MONDAY MORNING COFFEE!!

Good Morning!

Things have now changed with your new mortgage loan.  New documents are now going to be required on all transactions and these new documents and new rules will most likely increase the amount of time it takes to close on your loan.  Here is a recent article from Realty Times that talks about the new items that went into effect on October 3rd of this year.

The Know Before You Owe disclosure form issued by The Consumer Financial Protection Bureau will go into effect on October 3, 2015. The rule provides for easier-to-use mortgage disclosure forms that clearly lay out the terms of a mortgage for a homebuyer.

But some lenders and real estate agents say the new mortgage rules may delay closings. What will change is that three documents, the HUD-1 Settlement Statement, the Good Faith Estimate, and the Truth-in-Lending disclosure will be pared down to two new closing forms called a Loan Estimate and a Closing Disclosure.

The Loan Estimate form must be given to consumers no later than three days after they formally apply for a loan. That means providing financial information to the lender and signing a mortgage application.

When the consumer receives the Loan Estimate form, he or she will know what the loan amount and the interest rate will be, how much the monthly payment is, an estimate of taxes and insurance based on local rates, and how much down payment is required.

To prepare for settlement, homebuyers will have a three-day period to review the Closing Disclosure form. Because of the added review period, lenders are recommending that borrowers lock in their mortgage rates for longer periods than they normally would.

CNBC real estate reporter Diane Olick explains that the "new rules will require lenders, title companies, real estate professionals and insurance representatives to all come together sooner in the process to ensure the disclosures do get out in time."

For example, a 30-day rate lock is typical, but borrowers can extend the lock period up to 45 days or 60 days. However, there may be a question as to whether or not more time is really needed to close the loan.

According to Bankrate.com, Borrowers are often told there's no charge for a rate lock. That's true in the sense that the rate lock isn't associated with a fee. But a rate lock isn't free.

Josh: A longer rate lock typically involves a higher interest rate, which is more expensive for the borrower. The interest rate or "pricing" difference between a 15-day rate lock and 60-day rate lock might be as little as one-eighth or as much as half of a percentage point, or roughly $25 to $50 per month for the life of the loan.

Laura: Meanwhile, real estate agents are preparing for the worst. According to a new survey by the National Association of REALTORS® says that about 56 percent of REALTORS® say they plan to add more time to their contracts.

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

755 Horn Lane

Price: $274,000     Beds: 4     Baths: 2     Sq Ft: 1868

Tranquil & spacious property! Beautifully landscaped 0.41 acre lot provides seclusion & great entertaining spaces. Remodeled home offers updated kitchen & baths, large living rm w/ gas fp, formal dining, large windows+skylight. Private master ste w/...
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AND HERE'S YOUR MONDAY MORNING COFFEE!!

Good Monday Morning!

One thing that you can depend on is that the Real Estate Market that you see today is most likely not going to be the same one that you see a month from now and so on.  The environment for first time home buyers has been the exception as of late, but it is most likely due for a change.  The following is an article from Realty Times that explains why first time home buyers need to act now!

With some of life's milestones, there may not be a picture-perfect time to take the plunge. But when it comes to buying your first home, the combination of good market conditions and your own financial situation can dictate timing. If you've got the credit and down payment, you'd be crazy not to buy now. Want to know why?

Rates are still low

The Federal Reserve was expected to raise rates this summer, but so far they have stayed put. There is still talk that rates could go up before the end of 2015. So what does that mean for buyers? Well, if you're a millennial, a rise in interest rates could spell bad news.

"If mortgage rates hit 6%, a third of millennials (people younger than 35 years old) wouldn't be able to afford homes as they're currently listed, according to an analysis by HouseCanary, a housing-data analytics company," said Money magazine. "Mortgages are huge loans, so a seemingly small shift in interest rates can change a borrower's monthly payment by hundreds of dollars (though going from the current 4.08% rate to 6% is in no way a small shift)."

Investopedia's example using a $215,000 home with 20 percent down (leaving a $172,000, 30-year mortgage) figures a monthly payment of $821.15 at an interest rate of four percent and $923.33 at five percent. Is that $100 a month enough to get you moving?

New low down payment loans

First-time buyers have typically gravitated toward FHA loans for their low credit score requirements and down payments of just three and one-half percent. But new loans from Fannie Mae require as little as three percent. Known as the 97% LTV (Loan To Value) loan or Conventional 97, it can be more affordable for first-time buyers because "the Conventional 97 program does not require an upfront mortgage insurance premium, and because its annual mortgage insurance rates are cheaper, too," said The Mortgage Reports.

Rising rents

In many market, home prices are up significantly from their lowest levels several years ago, but are still within range of many buyers. Rents, on the other hand, continue to go up, pushing household spending to new, uncomfortable, heights.

"Payments on a mortgage used to purchase a three-bedroom home were more affordable than paying rent on a similar home in 66 percent of the counties recently analyzed by RealtyTrac," said Mortgage News Daily. "Across all 285 counties analyzed, the average percentage of median household income needed to rent was 29.96 percent while the average percentage of median household income needed to buy was 29.00 percent."

Tax deductions

When you pay rent, the entirety of your payment goes to the landlord or property owner, and all you get in return is a temporary place to stay. When you own your home, the government essentially pays you money back for your investment.

"Your biggest tax break is reflected in the house payment you make each month since, for most homeowners, the bulk of that check goes toward interest," said Bankrate. "And all that interest is deductible, unless your loan is more than $1 million."

Any points you paid on your loan are also deductible the year you paid them, as are your property taxes. "These taxes will be an annual deduction as long as you own your home," said Bankrate. "But if this is your first tax year in your house, dig out the settlement sheet you got at closing to find additional tax payment data. When the property was transferred from the seller to you, the year's tax payments were divided so that each of you paid the taxes for that portion of the tax year during which you owned  the home. Your share of these taxes is fully deductible."

Lower PMI

First-time homebuyers who put less than 20 percent down on an FHA loan will have to pay Private Mortgage Insurance (PMI). It's one of the drags of having limited cash. For the past several years, those payments have cost buyers an annual premium of 1.35% of the loan balance, but a recent change dropped the premium to 0.85%.

"This change is expected to save more than 2 million FHA homeowners about $900 a year and allow about 250,000 consumers to buy their first homes in the next three years," said Credit.com.

Remember also that your PMI may also be tax deductible, subject to a few restrictions (and remind yourself again what portion of your rent is deductible: none).

Have An Awesome Week!

THIS MONTHS HOT HOME LISTING!

2685 Valley Forge Dr

Price: $524,900    Beds: 3    Baths: 2    ½ Baths: 1    Sq Ft: 2302

Anslow & DeGeneault 2015 Tour of Homes model home. Gas forced air 92% efficiency, exquisite single level, located in beautiful Hawthorne Estates. Easily entertain in Great Rm overlooking backyard. Escape to luxurious owner’s ste w/ tray ceilin...
View this property >>

AND HERE'S YOUR MONDAY MORNING COFFEE!!