Category: Mortgage information

All you wanted to know about mortgages and then some

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Buying Mortgage information

Credit Do’s and Don’ts if You Are Thinking of Buying a Home?

Fannie Mae is requiring more stringent reviews of loans from lenders so if you are going to be in the market for a home in the near future keep the following in mind:

  • don’t incur any new debt, especially between the time you apply for the loan and the closing on your property;
  • don’t apply for credit cards or anything that would require a credit check, as they are going to be looking at all credit inquiries, especially those prior to closing;
  • do have plenty of documentation on the source of any large deposits as these are going to scrutinized a lot more closely.  If you are getting a gift from a relative for the down payment, make sure you have a gift letter.  If you are selling stocks or bonds have a copy of the transaction from your financial institution.

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Buying Mortgage information

Credit Do's and Don'ts if You Are Thinking of Buying a Home?

Fannie Mae is requiring more stringent reviews of loans from lenders so if you are going to be in the market for a home in the near future keep the following in mind:

  • don’t incur any new debt, especially between the time you apply for the loan and the closing on your property;
  • don’t apply for credit cards or anything that would require a credit check, as they are going to be looking at all credit inquiries, especially those prior to closing;
  • do have plenty of documentation on the source of any large deposits as these are going to scrutinized a lot more closely.  If you are getting a gift from a relative for the down payment, make sure you have a gift letter.  If you are selling stocks or bonds have a copy of the transaction from your financial institution.

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Buying Mortgage information

Mortgage Applications Decline to Lowest Level Since April, 1997

Despite the decrease in interest rates since April 30 of this year, mortgage applications for home purchase are down to the lowest rates since April 11, 1997.  The decrease is largely due to the expiration of the First Time Home Buyers Tax Credit.

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Buying Investment Real Estate Mortgage information

Why Current Mortgage Market is Like the Diamond Trade

The main reason the current mortgage market is like the diamond trade is because the Fed’s current policy has been to create the market for mortgage backed securities.  The Fed agreed to spend $ 1.25 trillion through the first quarter of 2010 to purchase mortgage bonds, thereby keeping interest rates low and stimulating the housing market.

The video below, How Interest Rates Move, does a great job of explaining interest rates in general and how the Fed’s policy has affected the housing market the up until now.

[youtube]http://www.youtube.com/watch?v=F8mXNBDFCck[/youtube]

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Foreclosures Mortgage information

Are You Eligible For a Loan Modification?

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Buying Mortgage information Selling

The Difference between Cost vs. Price

Sellers and buyers of real estate often fixate on what the price of a property is and in doing so, lose sight of the more important factor, cost.  Price is what you get for the property if you are a seller and what you pay for it if you are a buyer.  However, what affects both seller and buyer on a monthly basis is the cost.  In addition to principal, interest, taxes and insurance costs, there are maintenance costs and maybe association fees.

If you are a seller, consider how much it is costing you to carry that property each month you don’t sell it.  Based on the inventory of similar properties in your area vs the number of sales, you can calculate how much it is going to cost you to continue carrying that property for the average number of months it is taking to sell properties in your area.  I suggest you cut your sales price and take the loss upfront vs slowly  cash out each month.

If you are a buyer, realize that there has never been a better time to buy than right now.  You have a large number of options, the interest rates are the lowest they have been in decades and there is the government tax credit that expires at the end of April 2010.  If you are waiting for prices to go down lower, consider the cost of owning if the prices go down but the interest rates go up.  If prices come down 10% more, but interest rates inch up only 1% your monthly payments are going to be roughly the same.

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Buying Mortgage information

Mortgage Rates – How An Increase In Rates Affects Your Purchasing Power

I came across a great article that explains the effect of interest rates on your purchasing power so well, that I have to blog about it.  Now that inventories are decreasing and we are running into an April 30, 2010 deadline for tax credits, you have to read it if you have been on the fence about whether or not now is the right time to buy real estate.

The article, If You Don’t Buy a House Now, You’re Stupid or Broke may have an offensive title, but the graphs that it contains illustrate historic interest rates and increasing trends and the explanation on how an increase in rates affect what you will pay in principal in interest are easy to understand.  In a nutshell:

  • For 30+ years interest rates ranged from a low of 7% to a high of 18% (my husband and I were paying over 16% interest when we purchased our first home in the 1980’s)
  • Current interest rates are the lowest they have been in 40 years
  • For every quarter-point change in interest rates you will pay an additional $6,000 for every $100,000 borrowed over the life of a 30-year fixed rate  mortgage.

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Buying Foreclosures Market Summary Mortgage information

7 Reasons to Buy Real Estate Now

met 1 & 2Okay, you have been hearing that now is the time to buy a home, but maybe you are still unsure of why, when there is so much inventory on the market and so much insecurity in the economy.  Here are 7 specific reasons:

  1. Home Buyer Tax Credits – The Government is paying first-time home buyers and move-up buyers money to purchase a home.  It can be a single family home or a condo, it just has to be your primary residence.
  2. Interest rates are still at historic lows, currently around 5.25% for a 30-year fixed rate mortgage.
  3. Lenders are moving their inventories of foreclosures and are becoming more likely to agree to short sales.
  4. Interest rates will increase due to the huge amount of government debt.
  5. The median price of a single family home is currently $185,000, down from a median price of $400,000 at the peak of the real estate boom.
  6. There is currently a 10 month supply of single family homes in Miami-Dade County, down from a 24 month supply at the end of 2008.  A stable market has an inventory of 6-9 months.
  7. There has been a 29% increase in sales since last year.
  8. Whether single family or condo, under $300,000 or over $1,000,000, the market trend has been a steady decrease in inventory since at least October of 2008.

Now, you may be a naysayer and agree with someone who stated that the price of real estate is going to go down another 33%, but those of us that are active in the market are not seeing it.  We are seeing inventories decreasing, foreigners and investors coming back into the market that they had shied away from during the boom years and buyers getting some very good buys.  Miami is on sale and many properties are selling for less than what it would cost to build the exact same structure on the same lot.  Are you going to be someone who says, “Shoulda, woulda, coulda” or someone who feels lucky that they got into the market when they could?

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Buying Mortgage information

Mortgage Rates Fall Slightly This Week

After rising for the past four weeks, long-term mortgage rates fell last week.  Freddie Mac reported 30- year fixed rate mortgages averaged around 5.09%, down from 5.14% last week.

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Mortgage information

FHA Changing Approval Process of Existing Condo Projects

The following are some of the changes the FHA is making in how they process and accept loans in new and existing condo projects:

  • The burden of approving a condominium project will shift from the FHA to the lenders
  • Approved condo projects will need to be re-certified every 2 years
  • Homeowner’s Associations will need to fill out an FHA Homeowner’s Association Certification verifying that delinquencies are less than 15%
  • 50% owner occupancy ratio will be required on existing approved condos