Real Estate Market: Are Renovation Loans for You?

 

Finance home repairs and improvements as part of your mortgage.

Considering a foreclosure, short sale or fixer-upper property, but not sure how you can finance the repairs? The FHA 203(k) Streamline Loan, offered by Allen Tate Mortgage, allows qualified borrowers purchase a home that needs repairs, and finance the cost of those repairs through the mortgage.
  • Finance eligible repairs or renovations as part of the mortgage – up to $35,000.
  • Work must begin within 30 days of closing and be completed within 6 months.
  • Renovation funds are placed in escrow and contractors are paid as work is completed.
  • Eligible improvements include non-structural repairs and renovations including roofs, HVAC, plumbing, painting, appliances, decks, windows, doors, siding, ADA improvements and more.
  • Loan also available for home refinancing in conjunction with repairs/improvements.
  • Loan limits apply; minimum credit score of 640 and minimum down payment required.
Contact us today for more information or to get started on your loan.

Real Estate: 3 Questions You Must Answer Before Buying a Home

  If you are thinking about purchasing a home right now, you are surely getting a lot of advice. And most of that advice is probably negative. Why buy now with prices still falling? Don’t you realize real estate is no longer a good investment? Don’t you know that people who bought five years ago lost their shirt? We understand the concern your friends and family have. However, let’s look at whether or not now is actually the perfect time to buy a home. There are three questions you should ask before purchasing in today’s market: 1. Why should I buy if house prices are still depreciating? We believe that in most parts of the country prices will in fact soften in 2011. Price is the major concern for anyone selling a home. When you are buying, COST should be your primary concern however. Your monthly payment (cost) is definitely impacted by the price of the home you purchase. The other major component is the interest rate. Waiting for prices to bottom out while rates are increasing can wind up costing you more over the life of the mortgage. Over the last seven weeks, rates have increased over 1/2 a point going from 4.17 to 4.86. Looking at the attached chart shows this increase. Waiting for prices to bottom out seems to make perfect sense. Yet, at a time when rates are increasing, it might NOT make sense. Make sure you have a mortgage professional help you with this math before making a decision. In an article last week CNN Money reported: “You can kiss those record lows goodbye,” said Greg McBride, chief economist for Bankrate.com. Keith Gumbinger of HSH Associates, a provider of mortgage information said that the market reached a new plateau. “I don’t think we’re going back to a 50-year low anytime soon without an economic collapse,” he said. “Rates will probably never revisit those levels.” 2. When will I begin to see appreciation if I buy now? This is a great question. Macro Markets, LLC is a company that studies housing prices. They started their Home Price Expectation Survey in 2010.  They ask 100+ housing industry experts to project housing prices through 2015. The most current survey shows that the experts are predicting prices to soften until 2012. The experts then project prices to rise reaching a cumulative appreciation of over 10% by 2015. Purchasing a home today makes great sense from a financial standpoint. Think of the old axiom: You want to buy low and sell high. We may be at the low point regarding the COST of a home. But, this decision should not only be a financial one. That leads us to our third and final question: 3. Why am I buying a home in the first place? This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances. The Fannie Mae National Housing Survey shows that the four major reasons people buy a home have nothing to do with money:
  • A good place to raise children and for them to get a good education
  • A place where you and your family feel safe
  • More space for you and your family
  • Control of the space
What non-financial benefits will you and your family derive from owning a home? The answer to that question should be the reason whether you decide to purchase or not. Bottom Line The COST of a home will probably remain relatively unchanged even if prices continue to depreciate. Don’t allow money to get in the way of you making the right decision for you and your family. In the long run, the finances will work in your favor anyway. by The KCM Crew

Real Estate Market: Banks Will Release REO’s This spring

  What does this mean… Well…let’s think like a bank today.  What happens to the market when rates spike… it creates a sense of urgency to buy before the deals are gone and prices go up! When rates go up; who earns more interest on these new loans?… The answer is the banks do!  So why are they waiting to release the remaining REO properties in their portfolio?   No one wants to sign off on a loss and admit they wrote a bad loan.  The banks are waiting for rates to go higher and to create that sense of urgency to buy. This urgency causes sale prices to gradually spike as more and more people purchase these deals.  Once the prices balance out, and  we start to see a small light of a returning market, the banks will release the rest of their REO’s in order to minimize their potential loss.  Higher sales prices = less of a loss, and higher rates = more interest earned. All of the potential listing clients out there that want to sell this year, but plan to wait a little longer, are going to lose out.  Once the banks see a better light, they will seize the opportunity to release the REO’s.  Now your home must compete with a home the same size, same number of bedrooms and baths as yours, at a discounted price. So doesn’t it make sense to sell right now! LIST that home TODAY, LISTEN TO YOUR AGENTS SUGGESTIONS and SELL FAST or get prepared to get COMFORTABLE where you are!  

Real Estate Tips: Want Money in Your Pocket?

Does the current real estate market have you feeling the blues? Do you owe more than you can sell your home for? Well, take a look at refinancing. You can’t afford not to refinance now and start seeing some green. There are two kinds of homeowners: those who have recently refinanced and those who have convinced themselves it won’t make a difference. If you’re in the second camp, take a look at the numbers below. Then let me connect you with my Mortgage consultant so you can start figuring out how to spend that extra money.
Year Purchased 2006 Refinanced 2010 Refinanced 2010
Sale Price of Home $300,000 $300,000 $300,000
Down Payment $60,000 $60,000 $60,000
Less Principal Paid   $11,600 $11,600
Loan Amount $240,000 $228,400 $228,400
Type of Financing Conventional30-year fixed Conventional30-year fixed Conventional15-year fixed
Interest Rate 6.625% 4.125% 3.375%
Monthly Payment $1,537 $1,103 $1,618
MONTHLY SAVINGS   $434 -$81
ANNUAL SAVINGS   $5,208 -$972
LIFE OF LOAN SAVINGS   $81,046 $188,160
 

Real Estate Tips: Pay Your Home Off Faster?

What a 15 Year Fixed Mortgage Can Do For You

By Chris Cope

Recently rates reached record lows that have not been seen since the 1950’s.  Many people may think that they either have taken advantage of refinancing or that it may not make sense for them at this time.  If you belong to the latter half of this group, consider this: if you have a 30 year fixed rate in the high 6 percent range now is a great time to refinance into a 15 year fixed.   Depending on your equity in the property and your credit score, you may find that you can refinance into a 15 year fixed with a payment that is not much more than what you are paying now. The advantages to this are simple, paying a 15 year fixed rate mortgage builds your equity much more quickly and allows you to pay off your home much sooner… For example, if you have a $200,000 mortgage at 6.75% your principal and interest (P & I) payment is $1,297.  A 15 year fixed rate at 3.875% would give you a P & I payment of $1466, a difference of only $169 a month.   What is important for homeowners to take note of is the difference in the paying down of the principal balance.
  • After the first year, the 30 year fixed rate has paid down its balance by $2,316, while the 15 year fixed rate has paid it down by $7,486.
Thos are powerful numbers, but what is even more compelling is what happens after 5 years:
  • After 5 years the 30 year fixed rate has paid down its balance by $15,491, while the 15 year fixed rate has paid down by $67,458.
Let that sink in for a moment. Today, rates are at an all time low but that does not mean they will stay this low forever. Review your current mortgage rate and, if it makes sense to refinance into a 15 year fixed rate, consider talking to your Mortgage consultant about what options are available to you.

Real Estate Market: Mortgage Rates Hit Lowest Level on Record

WASHINGTON (AP) — Mortgage rates fell this week to the lowest level on record, giving consumers added incentive to lock in low payments for home purchases and refinanced loans. The average rate for 30-year fixed loans sank to 4.69 percent, from 4.75 percent last week, mortgage company Freddie Mac said Thursday. That’s the lowest point since Freddie Mac began tracking rates in 1971. The previous record of 4.71 percent was set in December. Rates for 15-year and five-year mortgages also hit lows. Mortgage rates have fallen over the past two months as nervous investors have shifted money into the safety of Treasury bonds. The demand for Treasurys has caused Treasury yields to fall. And mortgage rates tend to track the yields on long-term Treasurys. Yet the falling rates have yet to spark a home-buying boom — or energize the economy. New-home sales collapsed in May after homebuying tax credits expired. The economy also remains under pressure from high unemployment. And many people don’t qualify under tightened lending rules. “As long as prospective homebuyers are still concerned about their jobs and financial well-being, many will be reluctant to take the plunge, even though affordability has never been better,” said Greg McBride, senior financial analyst with Bankrate.com. Low rates throughout the economy also hurt one group of Americans: savers. Puny rates are especially hard on people living on fixed incomes who are earning next to nothing on their savings. Lending activity remains sluggish. Mortgage application volume dipped 6 percent last week from a week earlier, according to the Mortgage Bankers Association. Refinancing activity fell 7 percent. And mortgage applications to buy homes slipped 1.2 percent. Many Americans owe more on their mortgages than their homes are worth — often called “under water” — and can’t refinance. The Obama administration has launched programs to help borrowers refinance if they owe up to 25 percent more than their home’s value and have loans owned or guaranteed by mortgage giants Freddie Mac or Fannie Mae. About 291,000 homeowners have participated as of March. Yet that’s a small fraction of the nearly 15 million homeowners who are under water, according to Moody’s Economy.com, and cannot refinance. In hard-hit areas in Nevada and Florida, for example, home prices have fallen 50 percent or more from their highs. Record-low rates can’t rescue those homeowners. “It’s not the desire to refinance; it’s the ability to refinance,” Chris Brown, a loan officer with Trinity Mortgage Co. in Orlando, Fla. “A lot of the people who can already have.” Given the costs of refinancing, some mortgage experts say a refinancing can be worthwhile if you can shave at least 0.75 percentage point from an existing rate. Others suggest waiting until you can lower your rate by at least a point. Despite some lenders’ ads, refinancing is never free. A fee normally goes to the mortgage broker or lender. There are also fees for title insurance, a new appraisal, document processing and other charges. Often, mortgage brokers or lenders create the appearance of a “no fee” mortgage by adding the costs to a total loan amount or by charging a higher interest rate. People considering refinancing should factor in such fees. They should also calculate how many months it would take to recover them. For those who expect to stay in their home for two years or less, the fees might outweigh the savings from a lower rate. Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate, even within a given day. Rates on 15-year fixed-rate mortgages fell to an average of 4.13 percent. That was the lowest on records dating to September 1991. It was down from 4.2 percent a week earlier. Rates on five-year adjustable-rate mortgages averaged 3.84 percent, down from 3.89 percent a week earlier. That was also the lowest on Freddie Mac’s records, which date back to January 2005 for such loans. Average rates on one-year adjustable-rate mortgages fell to 3.77 percent from 3.82 percent. That was the lowest average since May 2004. The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 a point for 30-year, 5-year and 1-year loans. The average fee for 15-year loans was 0.6 of a point. Alan Zibel, AP Real Estate Writer, On Thursday June 24, 2010, 12:11 pm                                

Real Estate Market: FHA Changes You Should Know About

The Federal Housing Administration (FHA) has announced major changes to its home lending programs that may affect you as you shop for a home. These changes are effective for all loans received on or after April 5, 2010. The first change is an increase in the upfront Mortgage Insurance Premium (MIP) from the current 1.75 percent to 2.25 percent. That means on $100,000 loan, the MIP will increase from $1,750 to $2,250. The good news is that since the MIP can be financed in the mortgage, the increase will not affect your out-of-pocket cash. On a $100,000 loan financed at a 5 percent interest rate, your monthly mortgage payment would increase from $546.22 to $548.90, a difference of just $2.68 a month. The new FHA rules will also reduce allowable seller concession from 6 percent to 3 percent. Seller concessions may cover items such as closing costs, home repairs, etc. Usually, closing costs will fall within the 3 percent seller concession amount, but not always, so be sure to contact me as you explore your options. The last of the FHA changes to directly affect homebuyers concerns credit scores. If your credit score is below 580 at the time of qualifying, you are now required to put down at least 10 percent of your loan amount. If your credit score is 580 or higher, you will still be allowed to put down as little as 3.5 percent. Give us a call today or visit our website www.LeeAnnMiller.com to check out the current loan rates.

He/she who hesitates pays more!

How Mortgage Interest Rates Affect Your Payment One positive outcome of a slow economy has been historically low interest rates. But as the economy begins to improve, industry experts predict that interest rates will creep up, perhaps even reaching 6 percent by the end of 2010. While prices are likely to remain low, consider what even a small increase in interest rate can do to your monthly payment. On a $200,000 loan, an increase from 5 percent to 6 percent would result in $125 more per month, or $1,500 annually. Contact us to get the current rates for your new loan or refinance.