Wednesday, March 31, 2010

Get Your FHA Mortgage Application Started -- Fees Increase 1/2 Percent Starting Monday, April 5, 2010

FHA closing costs increase by 1/2 percent April 5 2010Starting Monday, April 5, 2010, getting an FHA mortgage in Philadelphia and throughout the nation will be more expensive for borrowers. Combine that with the short period of time left for the tax credit program and its shaping up to be a busy week for buyers.

In new guidelines set forth earlier this year, the FHA announced plans to raise additional revenue and reduce the overall risk of its mortgage portfolio.

The changes include the following:

  1. Increase Upfront Mortgage Insurance Premiums from 1.75% to 2.25% for everyone
  2. A plan to reduce seller concessions from 6 percent to 3 percent
  3. An increase in minimum downpayment for FICOs 580 or lower

For your own loan, to avoid being subject to higher loan costs, make sure to have your FHA Case Number assigned prior to Monday, April 5, 2010. That means you'll want to give a full mortgage application before the weekend so your lender can register your loan in time for the deadline.

But don't leave your application to the last minute.

Friday is Good Friday so most banks will be closed. Your true FHA deadline, therefore, is Thursday April 1.

Also worth noting is that the FHA isn't done with its changes.

In its policy statement, the group also announced its plans to petition Congress to raise monthly mortgage insurance premiums. The FHA's formal request, in summary:

  1. Raise monthly premiums by roughly 0.30%, or $25 per $100,000 borrowed per month
  2. Lower upfront mortgage insurance premiums by 1.25%, or $1,250 per $100,000 borrowed at closing

For now, the request is neither approved nor acknowledged by Congress. It's merely a request. And in the event that Congress does approves it, the FHA reserves the right to change its projections. Either way, it means higher costs for consumers.

The best plan, therefore, is to get your FHA mortgage into underwriting ahead of the switches because borrowing money will be harder, and more costly.

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Monday, March 29, 2010 Predicts The Best And Worst Real Estate Markets For 2010

Real estate is recently published its 2010 forecast and projections for home prices in the country's largest metro markets.

Listed as "Top 25" and also comprehensively by state,'s home price forecasts puts Santa Rosa, California at the top of 2010's home appreciation list and Hanford, California at its bottom.

The 10 cities projected for highest home appreciation in 2010 are:

  1. Santa Rosa, CA : +6.0%
  2. Cheyenne, WY : +4.7%
  3. Kennewick, WA : +4.6%
  4. Merced, CA : +4.4%
  5. Bremerton, WA : +4.2%
  6. Fairbanks, AK : +4.2%
  7. Corvallis, OR : +4.1%
  8. Tacoma, WA : +3.9%
  9. Anchorage, AK : +3.8%
  10. Bend, OR : +3.3%

The Pacific Northwest is the region most heavily-represented among price gainers. The Southeast and Middle Atlantic are most represented on the under-perform list.

However, just because a city's homes are expected to appreciate (or depreciate) in 2010, that doesn't mean that every home within its limits will follow suit. Real estate cannot be grouped on a city level like tries to. There will always be areas in demand within city limits in which prices rise, just as there will be out-of-demand areas in which prices fall.

Real estate data can't be grouped by city or even by ZIP code, really.

Real estate in Mount Holly is more local than that.

When we say "real estate is local", it means that every street in every town has a distinct set of traits that drives its home values. Homes that are one block closer to the train; or, homes that are facing north; or, homes that are made of brick. Each of these characteristics can affect a home's desirability which, in turn, can affects its sales price.

National surveys can't capture "essence" like this. They only report on the aggregate.

For local real estate data, look to established, publicly available websites and to active, local real estate agents. Both will have data and insight that can help you. National surveys often make for good headlines, but do little to help homebuyers find good value.

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Monday, March 15, 2010

Cool Tools : Color This! Shows How Paints And Colors Will Make A Room Look Good

Color swatches for paintVisualizing a home in different colors can take a good eye and strong imagination -- especially when you're house-hunting and the home's effects are of someone else.

Yet, we wonder:

  • What would the bedroom look like in blue?
  • How would the kitchen look in yellow?
  • What if the foyer wall was accented in red?

At the Better Homes and Gardens website, you can answer those questions and see the results for yourself. Using the Color This! tool, website visitors can mix-and-match swatch colors, then apply them to a room's walls, floors, trim, cabinets and accessories.

Don't just get a mental picture of a room -- get an actual picture.

The Better Homes and Gardens site requires a basic, non-intrusive site registration to use the Color This! product suite. It's also available for home exteriors and window treatments, too.

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Sunday, March 14, 2010

How To Properly Screen A Prospective Tenant

According to the the National Association of Realtors®, "distressed homes" represented nearly 2 of every fifth home sold in January 2010. Clearly, real estate investors in Mount Holly and around the country are taking advantage of good deals on cheap property. But there's risk involved.

This NBC Today Show interview first ran in March 2009, featuring real estate expert Barbara Corcoran. Despite its age, the message remains relevant. Today may be a terrific time to buy a bank-owned home -- just make sure you do your research first. There's plenty of ways for investors to get burned.

Some of the tips in the video include:

  • Buy in your own backyard
  • Start small, then build to a bigger portfolio
  • Watch receipts -- rent rolls don't matter if tenants aren't paying rent

Corcoran also gives pointers on how to evaluate a prospective tenant.

Foreclosures should represent a large number of 2010's total home sales and will offer interesting opportunities to bona fide real estate investors. Before you jump in, make sure to watch the video. The rents you save may be your own.

Remember, the stats and the data are from 12 months ago, but the advice stays meaningful. Real Estate investing, when you apply sound principles is still a great way to build income and acquire wealth. You just have to take time and investigate it completely.

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Friday, March 12, 2010

7 Weeks Remain To Find A Home, Claim Up To $8,000 In Tax Credits

7 weeks remain for the Home Buyer Tax Credit ExpirationIn November, Congress extended and expanded the First-Time Home Buyer Tax Credit program to include a subset of "move-up" buyers -- homeowners that have owned and lived in their home for 5 of the last 8 years.

The credit ranges up to $8,000 per buyer. There's now just 7 weeks left to take advantage.

To be eligible, home buyers must be under contract for a new home no later than April 30, 2010, and must be closed no later than June 30, 2010.

In addition to meeting the deadline dates, there's a basic set of requirements to be tax credit-eligible:

  • You can't purchase the home from a parent, spouse, or child
  • You can't purchase the home from an entity in which the seller is a majority owner
  • You can't acquire the home by gift or inheritance
  • Each buyer in the purchase must meet eligibility requirements

There's other criteria, too.

For one, the sales price on the subject property cannot exceed $800,000. Homes sold for more than $800,000 are ineligible for the tax credit. Furthermore, households earning more than $125,000 as single-filers, or $225,500 for joint-filers, are ineligible.

You can read the complete eligibility requirements at the IRS website, or, you may just find it simpler to speak with your accountant about it. There are some nuances in qualifying for and claiming the tax credit on your returns and getting a professional's opinion is always wise.

And lastly, don't forget that government's tax credit program is a true tax credit. It's not a tax deduction. This means that a tax filer whose "normal" tax liability is $3,500 and who is eligible for $8,000 in credit will receive a $4,500 refund from the U.S. Treasury.

If you're currently in the House Hunt, mark your calendar for April 30, 2010. It's 7 weeks away and you can be sure that as the date gets closer, buyer traffic is going to increase. You may find sellers more willing to negotiate today than several weeks from now.

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Foreclosures Per Capita | February 2010

Foreclsoures Per Capita February 2010

According to foreclosure-tracking firm RealtyTrac, foreclosure filings topped 300,000 for the 12th straight month last month as 1 in every 418 U.S. homes received a foreclosure filing.

It's a small improvement from January and a just 6 percent increase over February 2009.

On a per-capita basis, foreclosure density varied by state:

  • Nevada : 1 foreclosure filing per 102 homes
  • Florida : 1 foreclosure filing per 163 homes
  • Arizona : 1 foreclosure filing per 163 homes
  • California : 1 foreclosure filing per 195 homes

Also, as in January 2010, foreclosures across the country were concentrated. 10 states beat the national Foreclosure Per Capita average; 40 states fell below. Like everything else is real estate, it seems, foreclosures are local.

For today's Palmyra home buyers, foreclosures represent an interesting opportunity.

Homes bought in various stages of foreclosure are often less expensive than other, non-foreclosure homes. It's one reason why distressed home sales account for 38 percent of all resales. However, less expensive doesn't always mean less costly. A foreclosed home may be in various stages of disrepair and they're often sold as-is, as policy.

Buying new or used in Philadelphia or surrounding counties can be cheaper than buying broken-down. Buying foreclosures is attractive, and I've been selling bank owned properties since 1988, but you can create a problem for yourself if you chase the "deal" instead of looking for the house that suits your needs.

Therefore, if you're in the market for a bank-owned home, make sure you know what you're buying before you sign a contract. Have qualified professionals review and inspect the property, as needed. Damage to pipes or the property's structure, for example, may not be so obvious on a walk-though and you'll want to know about it before you buy. If you want to look at foreclosure properties, just visit our website.

Also, foreclosed homes are federal tax credit-eligible. Buyers must be under contract by April 30, 2010 and closed by June 30, 2010.

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Thursday, March 4, 2010

How To Remove Stickers And Adhesive-Based Price Tags From Just About Anything

Sometimes, price tags just don't want to unstick. No matter how hard you scrub and scrape, tacky residence stays behind. Turns out, getting "the stick" off your stickers isn't so hard when you have the right tools.

In this 2-minute video from, you'll learn how to remove stickers and adhesive-based price tags from common household items including:

  • Wooden furniture
  • Glass vases and other glassware
  • Plastic pieces
  • Cardboard boxes

The best part? All the supplies you'll need are already in your home.

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Wednesday, March 3, 2010

Separating FHA Fact From Fiction : Mortgage Insurance Premiums

FHA asks Congress to raise Monthly MIPThe mortgage lending landscape changes a lot. Rates and guidelines are in constant flux, and it creates preparedness challenges for buyers in Mount Holly that aren't paying in cash.

The loan you get today won't always be the loan you get tomorrow.

Because of how frequently bank rules are changing, it can be hard for laypersons to distinguish between mortgage fact and fiction of "what's coming next".

Recently, we saw this with respect to FHA home loans.

January 20, 2010, the FHA issued a press release with new lending guidelines. Specifically, it announced 3 changes that will be effective starting April 5, 2010:

  1. Upfront mortgage insurance premiums increase from 1.75% to 2.25%
  2. Allowable seller concession reduced from 6% to 3%
  3. FICO scores of 580 or lower are subject to a minimum 10% downpayment

But, also in its official statement, the FHA announced it would ask Congress for permission to raise monthly mortgage insurance premiums. This is where the rumors started.

Nestled on page 348 of the Budget of the United States Government, Fiscal Year 2011, in a section titled Special Topics, there is a 1-paragraph notation that details the FHA's petition.

  1. Raise monthly premiums by roughly 0.30%, or $25 per $100,000 borrowed per month
  2. Lower upfront mortgage insurance premiums by 1.25%, or $1,250 per $100,000 borrowed at closing

For now, the request is neither approved nor acknowledged by Congress. It's merely a request. And in the event that Congress does approves it, that doesn't mean that FHA has to stand by its initial projections.

Truth is, about the only thing we know about the future of FHA lending is that, come April 5, 2010, borrowing money is going to be tougher, and more expensive. These are the facts as we know them today.

Homebuyers should plan accordingly.

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Tuesday, March 2, 2010

As The Supply Of New Homes Grows, So Does The Opportunity For A "Good Deal"

New Homes Supply Jan 2009-Jan 2010

The housing recovery showed particular weakness in the New Homes Sales category last month -- good news for homebuyers in Philadelphia, New Jersey, and around the country.

A "new home" is a home for which there's no previous owner.

New Home Sales fell 11 percent from the month prior and posted the fewest units sold in a month since 1963 -- the year the government first started tracking New Home Sales data.

Right now, there are roughly 234,000 new homes for sale nationwide and, at the current sales pace, it would take 9.1 months to sell them all. This is nearly 2 months longer than at October 2009's pace.

The reasons for the spike in supply are varied:

  • The original home buyer tax credit expired in November
  • Weather conditions were awful in most of the country in January
  • Weak employment and consumer confidence continue to hinder big ticket sales

Now, these might be less-than-optimal developments for the economy as a whole, but for buyers of new homes, it's a welcome turn of events. Home prices are based on supply and demand, after all.

As a result, this season's home buyers may be treated to "free" upgrades from home builders, plus seller concessions and lower sales prices overall.

It's all a matter of timing, of course. New Home Sales reports on a 1-month lag so it's not necessarily reflective of the current, post-Super Bowl home buying season. And from market to market, sales activity varies.

That said, mortgage rates remain low, home prices are steady, and the federal tax credit gives two more months to go under contract. It's a favorable time to buy a new home.

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