Ira's Blog

Refinancing a Mortgage - The Costs and Benefits

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Tue, 03 Nov 2009 14:38:02 -0600

If the near record low mortgage rates being advertised everywhere has you wondering whether now might be the time to consider refinancing your mortgage, here are some things to keep in mind:

First, use a good mortgage calculator to see how much you might save by refinancing to a lower rate. If you can save a significant amount each month, then consider how much you'll have to pay in closing costs to refinance. If you find that you'll save a considerable amount on the monthly payment in addition to factoring in your closing costs, then proceed with the type of mortgage you might want to consider.

Keep in mind if you currently have an FHA loan, FHA Streamline guidelines have changed, so you may have to do an FHA inspection whereas previously it was not required.

The next thing you have to consider is how long you’ve been in your current home. Lenders review your record of payment and the length of stay before approving your mortgage refinance. Also, keep in mind that the more you owe, the higher your refinance cost may be, due to fees, interest, and possible penalties.

Finally, don't forget about the appraisal process. Many property values have dropped recently, so make sure this won’t affect your refinance amount.

If you still have quite some time left before your home is paid off, refinancing now and locking in a lower rate can easily save you thousands in the long run.

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

We don’t take any seller listings (yet we have more homes for you to see than most agents) and never have any potential conflict of interest like other agents who also represent sellers. We represent buyers only, 100% of the time. We can show you more homes for sale because we have access to MLS, FSBOs, Exclusives (homes that agents try to keep secret), foreclosures and homes not on the market that may be of interest to you.

We are not your traditional real estate agent. Our goal is to advise and protect home buyers and help them obtain the lowest price and best terms on their dream home. Call us at 516-887-6901 to see how we can help you save time and money. Or visit our sites at http://bestbuyersbroker.com or http://bestbuyerbroker.com.

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Real Estate Outlook Mixed

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Wed, 28 Oct 2009 22:32:14 -0500

Depending on which news channel you turn to these days, you'll hear good news, and bad news, about the real estate outlook.

Probably the most upbeat forecast of all the real estate news circulating these days comes from the country's top group of forecasters, the National Association of Business Economists, which has a great track record in predicting trends and market turns. After its latest survey of members released recently, the association said the following: "The good news is that the deep and long recession appears to be over, and with improving credit markets, the U.S. economy can return to solid growth next year without worrying about inflation."

The consensus forecast from the business economists is for the Gross Domestic Product, GDP, that's the main measure of the economy's output and activity — to grow by 2.9 percent, and for new housing starts to jump by an impressive 38 percent.

That is good news because home resales tend to be closely tied in with GDP: If the overall economy is flush and growing, that supports higher home purchases and sales.

The big negative everywhere is jobs. The recession may be ending in some areas, but not in job losses, with unemployment currently hovering right at the 10 percent level, which is a big factor holding back the real estate housing recovery.

The biggest plus for housing right now is the continued low interest rates, and the first time buyer tax credit still in existence for a few more weeks, unless it is extended by Congress, which is what many in the real estate sector are crying for to keep the uptrend from stalling out.

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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Another Housing Bailout on the Way

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Wed, 28 Oct 2009 22:27:51 -0500

Just as federal officials seek to wind down many bailout programs, the Obama administration has announced yet another initiative to prop up the housing market.

Administration officials unveiled a plan to aid state and local housing finance agencies, which provide mortgages to first-time and lower-income homebuyers and enable the development or rehabilitation of rental properties. Officials declined to put a pricetag on the program, but said there would be no cost to taxpayers.

The measure will enable housing agencies to lend to hundreds of thousands of families and enable the development or rehabilitation of tens of thousands of rental units. The agencies operate in all 50 states and in many cities.

Congress is considering extending the $8,000 tax credit for first-time homebuyers, which ends November 30th.

The credit will have been used by 1.8 million homebuyers, at least 355,000 of whom would not have bought a house without the tax break, by the end of November, according to estimates by the National Association of Realtors.

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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Five Powerful Buying Strategies

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Fri, 16 Oct 2009 13:37:37 -0500

In today's crazy Long Island area real estate housing market, making rational decisions based on sound information is a must! In reality, emotions often take over, and sometimes, it's all you can do not to lose all conscientiousness when you think you have found that dream home. But if you'll follow these buying strategies, you should find yourself in complete control of the home purchase.

1 - Work out your finances first. Paying cash? Getting a mortgage? Find out what you can afford and check out all your various options.

Meet with whatever experts you need to in order to have all your facts - a lender, your tax advisor, etc. Knowing exactly what you want to and can spend will eliminate time spent looking at properties you can't have (or have no business trying to obtain).

When you find the right property you can make a "clean" offer without a financing contingency. Sellers are more likely to respond favorably to clean offers without a bunch of financing contingencies.

2 - Unless you really want to own two properties, sell first, then buy. The property you want may or may not take a contingency offer. So unless you are prepared to own both (and you have to plan for a worst case scenario) you are wasting your time with the offer if you still have a home to sell.

Second, if you are emotionally attached to what you want to buy you won't be as objective on selling your home. You may take less than it's worth just so you don't lose the other home. There's nothing wrong with that as long as you understand the financial implications.

3 - Use a real estate professional who knows the market. That may sound simple in this age of the internet, when buyers have access to the same data the agent has. The difference is the ability to interpret that data.

Full-time real estate professionals do more than just show homes and write contracts. They study market trends and observe area fluctuations. You are thinking about your needs now. But your agent is thinking about both now and in the future when you are ready to sell again and looking for your future resale opportunities.

In addition, the internet is an increasingly non-objective source of information. Many websites do not display all the properties for sale in a given area because of contractual conflicts. And most new communities are not listed at all in any search vehicle. A real estate professional should be able to show you all the homes that fit your needs.

4 - Don't get pressured into making a decision. When you find the right home you will know it.

That doesn't mean look at 100 homes before you make a decision. Sometimes it's the first home you see. But don't let an agent, a seller, or a spouse, push you into something you don't feel good about.

5 - You can't have it all. Decide what is most important in your next home and put it into perspective. If it's location, or price, or view, or square footage, or school districts, or amenities, or whatever.

Remember — some things can be changed. Floors, kitchens, landscaping, etc. are all changeable. So if they are not perfect, they can be worked out. But location, view, amenities, etc. are there forever. Not muching changing that part of the purchase.

No matter what your budget, everyone has to make compromises. So decide what truly matters to you and put that at the top of your list. Give in on what doesn't matter as much.

If you have other questions or comments about this list of Home Buying Strategies, just use the 'comment' link below and we'll get back to you with answers.

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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Are You Paying Your Neighbor's Bills?

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Fri, 16 Oct 2009 13:27:09 -0500

Many people are finding themselves in a situation of, pay the neighbor's bills or else lose their home.

Know anyone in this situation of having to pitch in more than their fair share on the utility bills? We'd love to hear about it. Just click the comment link below and sound off.

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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Home Buying: When Hesitating Costs You $8000

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Fri, 25 Sep 2009 11:07:59 -0500

The first-time home buyer tax credit ends November 30th, 2009. Sounds like you still have some time right? Not really. In fact, you need to start looking for a house NOW just to ensure you won’t miss the deadline and pay $8,000 more, and even starting to look right now doesn't mean you will absolutely beat the deadline, and here's why:

In the days you have left between today and November 30th, take out Veteran’s Day and Columbus Day, because many businesses are closed (or at the very least, the government is).

In the days you have left, take out 3 more days for Thanksgiving. People take half a day off before and usually that Friday after is taken off too for shopping, either way, many people take off these days and doing business during this time is nearly impossible.

So in the days you have left, you need to find a realtor, find homes, go to showings, begin bidding on the home you've chosen, get inspections, get pre-approved, get financing, begin the paperwork, and close the loan all before November 30th. This is assuming all parties are working all of the days between now and November 30th, and that your realtor never has a time conflict.

So don’t make the mistake by not starting now. Also, if you’re looking at foreclosures or short sales, the process may take even longer so you really have to find a house by next week at the latest. Keep in mind, setting up showings usually takes 24 hours, so if you find a house you’d like to see, it’s a 24-48 hour delay. Also, bidding on HUD homes take 3-5 days to find out if you got it or not.

Moral of the story, when you need to work with multiple parties on a deal, it takes time. Relying on your realtor, the selling party, and the bank becomes a lot more stressful if you don’t have enough time, because there are many aspects you don’t have time control over in buying a home.

So stop procrastinating and hesitating, and start the process today!

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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Understanding Interest-Only and Reverse Mortgages

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Fri, 25 Sep 2009 10:59:42 -0500

Presently, there are around 6,000,000 home owners who have an interest only mortgage. This kind of mortgage implies that the standard payments you make are just taking off the amount of interest the mortgage amasses.

The capitol you borrowed must be paid back when the mortgage has run its term. The interest only mortgage looks to be really hip with those buying a house for the first time. Latest research proved the quantity of first time buyers taking out an interest-only mortgage rose to 18%.

The mortgage could be preferred as the rates are sometimes much lower than a normal repayment mortgage. However while low interest rates are a great thing, the down side is - when the term of the mortgage comes to a close you can still owe the same sum of money you started out owing. If you do not have a method of paying this then naturally you would need to take out another loan. Banks have become tighter with this type of loan because years back you’d need to be in a position to prove to them you had way of re-paying the capitol at the end of the mortgage. Today you can take out an interest-only mortgage and having to find the capitol is only discussed on the base of the mortgage agreement.

With people living longer, funding retirement can become a difficult situation. That's where a reverse mortgage can help homeowners avoid fears about cash flow.

The mortgage will have a term of a certain period of years. Rather than making payments on the loan, the bank will become the owner of the proportion of your equity requested by the loan at the end of the term. Reverse mortgages are only available to older homeowners. You can also use the home as your first residence. The choice to follow a reverse mortgage could be a troubling one. We are all mentally trained to get a home and try and build equity over the years. With a reverse mortgage, we are making the psychological jump to actually scale back the equity in our homes. While this could sound like a reasonable strategy for using the savings pool equity, it makes many homeowners scared. To control the potential for problems and cons, banks are needed to have senior candidates meet with equitable third parties to pinpoint the benefits and disadvantage of using reverse mortgages.

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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Should You Over Pay For A Home

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Wed, 02 Sep 2009 15:16:57 -0500

Bill,

Great post - as an exclusive buyer's agent, my #1 goal is to get the home my client wants, #2 is to reduce the price. Many times the home is located in a particular place where the home becomes more valuable to the buyer, and buyer was willing to invest the extra bucks for it.

ira

Via William J Archambault Jr (The Real Estate Investment Institute ):

Should you over pay for a home? Should you ever pay more than the house appraises for? Should you ever pay more than the house is listed for?

Should you over pay for a home, possibly! Should you ever pay more than the house is listed for, a house No! A home possibly. There is a difference between a house and a home. A home, a place for your family, a place of your own is often worth more than the sum of it's parts! A house, one that's not intended to be your home is rarely worth more than it's list price and almost never more than it's appraisal.

It's an interesting contradiction, isn't it?

You can never get into trouble with classic conservative advice is never pay more than appraisal, but some times it's hard to successfully excel with such constraints.

With out questioning the validity of the appraisal there are few reasons to you over pay for a home. We are in the people business and homes should be bought from the heart when the buyers can afford the luxury of choice.

Should you over pay for a home? One very experience agent Renee Burrows says: "As a buyer's agent I would work on a price reduction first... If that doesn't go through, the buyer would then have to consider whether to pay the difference between the sales price and contract price in addition to their down payment and closing costs."

Should you over pay for a home? Don't over pay, remains good advice in all markets. If this is an investment it should be absolutely don't! If this is a HOME and the buy can afford it we have to consider the people factor and consider the emotional factor and Renee did say "Consider!" every thing is relative. There is always more than one way!

Should you over pay for a home? The question is two fold should you over pay based on the appraisal or should you over pay the list price? The list price is the amount the seller is willing to settler for, not necessarily even relevant to the value!

Should you over pay for a home? People say don't for many reasons, the most common are:

It's the right advice!

They don't want you taking any risk.

They don't want you succeeding where they don't.

There is no down side, to saying don't! (If they say "Do" and you fail they feel libel, but if you succeed they can simply add "you got lucky!")

Don't is always safe advice, what we forget is man has never had great success with out risking great failure!

Should you over pay for a home? Maybe!

Bill

William J Archambault Jr

The Real Estate Investment Institute

wja@reii.org 832-259-7078 or 702-516-1569

Mortgages Cost More Than Home Value For 1 in 4

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Tue, 01 Sep 2009 14:07:08 -0500

Nearly a quarter of all homeowners are sinking under a mortgage that is bigger than the value of their home.

Even Worse, that figure could rise to as much as 30% by the middle of next year as job losses and foreclosures climb.

In the city, those who owe more on mortgages than their homes are worth climbed to 12.5% in the second quarter from 10.3% in the first three months of the year.

Homeowners are being hurt by price declines. The estimated median value for single-family homes slid 12% from a year earlier in the 10th consecutive quarterly decrease.

About 25 million homes, or 48% of mortgaged properties, will be underwater as prices drop through the first quarter of 2011, analysts at Deutsche Bank wrote in a report released recently.

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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What Happens To Your FICO Score When Your Credit Card Limit is Reduced?

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Tue, 01 Sep 2009 14:03:51 -0500

Approximately 1/3 of your FICO score is based on how much of your available credit you are using. This is called your "credit utilization".

The higher the utilization rate you have… the lower your credit score. The credit scoring models view this as you getting closer to maxing out your credit lines and becoming a higher risk.

Example.. If you have a $10,000 credit line and carry a balance of only $2,500 you have a credit utilization measure of 25%. If your credit limit is then cut by your credit card issuer to $5,000 then you jump to a credit utilization measure of 50%… lowering your credit score without you doing anything on your part.

If, however, your credit card company reduces your credit line on a credit card that you do not carry a balance on… then no impact to your score.

Welcome to the aftershock of the credit card reform act!

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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Has the Housing Market Really Hit Bottom?

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Mon, 10 Aug 2009 13:14:52 -0500

A rash of positive housing data has given some analysts hope that the housing market has bottomed and an economic recovery is underway. But the soaring unemployment and rising mortgage rates could lead to a double-dip plunge for the housing market.

Home prices rose on a monthly basis in May for the first time in nearly three years, according to the Standard & Poor’s Case-Shiller Home Price Index. The improvement in the Case-Shiller index followed the release of several equally optimistic government reports that showed increases in home sales and housing starts, and a decline in inventories.

Home construction unexpectedly rose in June as well. Housing starts increased 3.6% from May to a seasonally adjusted 582,000 annual rate. And even while more houses were built in June, the number of available homes on the market went down.

The federal government’s effort to lower the cost of borrowing has been a big reason why the housing market has been able to stabilize over the past few months.

Mortgage rates fell to a record low 4.78% twice in April after the Federal Reserve announced its plan to scoff up mortgage backed securities. That led to a surge in mortgage and refinancing applications. But now it appears the Fed’s effort to reduce borrowing costs is losing momentum.

Higher mortgage rates aren’t the only thing daunting potential homebuyers either. Soaring unemployment also poses a threat to the housing market by eroding disposable income and consumer confidence.

The gains made in the housing market have been encouraging to many analysts and investors. But with Americans facing heavy job losses and higher mortgage rates, it’s hard to imagine how they will be sustained.

Only time will tell, of course, and as with every recession before this one, no one will know exactly where the bottom is until it's too late, and we're all looking back and recognizing that the bottom passed months ago.

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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Buying a Home: Cost-Effective for Some Renters

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Mon, 03 Aug 2009 13:28:39 -0500

For Americans debating whether to buy or rent a home, the scales are tipping toward ownership. Because of the slide in home prices, low interest rates and tax incentives, renters are realizing they could handle a mortgage for a just little more money.

An Associated Press analysis of 45 metro areas finds the gap between the monthly mortgage payment on a median-priced home and the median rent has shrunk from $777 a month to just $221 in the past three years.

In some metro areas, the gap was less than $100 a month. And home prices are expected to fall faster than rents this year, which means the gap should get even smaller.

It could mean a quicker end to the housing-market doldrums, as renters buy up unsold homes languishing on the market.

Cheap foreclosures in some of those markets are now drawing multiple bids. As supply and demand even out, home prices will eventually begin to rise. But for now buyers are having little trouble finding bargains.

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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Reverse Mortgage Scams on the Rise

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Mon, 03 Aug 2009 13:06:36 -0500

The FBI and the U.S. Department of Housing and Urban Development Office of Inspector General have urged senior consumers to be wary of scams involving reverse mortgage products.

Between 1999 and 2008, use of reverse or Home Equity Conversion Mortgages, increased by more than 1,300 percent — a trend that has also increased opportunities for fraud, an issue to which seniors are especially vulnerable.

In many of the reported scams, seniors — often targeted through local churches, investment seminars, and television, radio, billboard, and mailer advertisements — have been offered free homes, investment opportunities, and foreclosure or refinance assistance.

Finally, with this issue increasing, the FBI & HUD have teamed up to inform producers and their senior clientele of a legitimate Home Equity Conversion Mortgage — insured by the Federal Housing Authority — that enables eligible homeowners to access the equity in their homes by providing funds without incurring a monthly payment.

For more information, read the FBI Intelligence Bulletin, entitled: "Home Equity Conversion (Reverse) Mortgages Exploited to Defraud Senior Citizens."

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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Should You Buy Your Kid a House?

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Tue, 14 Jul 2009 11:47:05 -0500

Low interest rates and a depressed real estate market have some affluent parents asking financial advisers if buying their children a house could accomplish a one-two punch of moving assets out of their estate while grabbing a good deal on property.

The answer is, not exactly.

While parents may get a bargain on real estate, purchasing a home for children may not get them the best bang for their estate-planning buck, particularly if that estate is sizable and includes income-producing assets like securities or a private business interest.

As the federal tax law currently stands, a married couple can give, during their lifetimes or leave to their heirs at death, $2 million before any tax is owed. "A home isn't an income-producing asset, so it makes more sense to save the $2 million lifetime gift exclusion for other estate-planning techniques which can generate a lot more upside in the future," said Mark Luscombe, principal tax analyst with Wolters Kluwer, a business that provides tax and legal information.

Instead, advisers say parents intent on helping their children become homeowners consider a cash gift instead.

Individuals are allowed to gift up to $13,000 per person in a given year without dipping into their lifetime gift tax exclusion. That means a couple could give their daughter and her husband $52,000 a year to go toward mortgage payments or the down payment, while removing some assets out of their estate each year. In this situation, the kids would have to buy the home, but would get another break this year: Qualified first-time home buyers who purchase a home before Dec. 1st are eligible for an $8,000 tax credit. This may apply for parents and children who buy the house jointly, although the credit begins phasing out at a modified adjusted gross income of $150,000 when married and filing jointly.

There are other options, like making the kids a loan.

The government sets minimum rates for loans, among family members and others, to not be considered gifts. Those rates now are historically low, ranging from less than 1% to about 4 1/2% depending on the loan term. This method doesn't actually move money out of the estate, thus freeing up the $2 million exclusion to pass on other assets that are more likely to appreciate over time. Children can use income generated from the appreciated assets to pay off the loan. Parents could use the $52,000 annual gift exclusion for their daughter and husband to forgive both the interest and principal of the debt if they choose.

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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Mortgage Rates: You May Have Missed the Bottom

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Tue, 14 Jul 2009 11:41:42 -0500

For those waiting until interest rates bottomed out before they either purchased a home, or refinanced the one they're in, it may be too late.

We warned our readers a couple of months ago about the risk involved in trying to time the markets, both from a home buying and mortgage point of view.

Now, the Federal Reserve has signaled that it won't try to do more than it previously planned to pull down mortgage rates and other long-term interest rates.

For homeowners hoping to refinance at a lower interest rate, the Fed doesn't seem to be offering any fresh encouragement.

Fed Chairman Ben Bernanke may have decided there was too much risk in trying to boost efforts to push long-term rates down, with the market leaning in the other direction. Besides, the Fed has said it views rising long-term rates as a sign that the economy is getting better.

Could mortgage rates dive again? Sure — if the economy crumbles.

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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Foreclosure Affecting People Who Never Thought It Would

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Tue, 16 Jun 2009 15:33:39 -0500

With the U.S. economy and financial markets showing some signs of life, optimistic analysts are looking for a recovery in the all-important housing sector. They got some ammunition recently from the National Association of Realtors (NAR), which said that its Pending Home Sales Index jumped in April by the most in more than seven years.

But housing can't revive as long as the market is being flooded with homes that are falling into foreclosure. And far from going away, the problem is broadening.

It's not just about subprime anymore. Now, people with excellent credit who never dreamed of getting in financial trouble are being dragged down by a dangerous cycle of rising unemployment and falling home prices. That is likely going to prolong the foreclosure crisis and, inevitably, inhibit the recovery of the rest of the economy.

The biggest factor in this second wave of foreclosures is the inability of distressed homeowners to sell in order to pay off their debts. According to research by the NAR, there are enough $750,000-plus homes on the market to cover more than 40 months' worth of demand at the current rate of sales. That's four times the rate of oversupply in the housing market as a whole.

Many economists and researchers believe that even if foreclosures don't rise, the rate is already so high that it will put considerable pressure on the national housing market for at least two more years.

While forecasts differ in detail, the clear message is that foreclosure is going upscale. This means the housing bust won't end anytime soon, and is affecting people who never thought it would.

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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FHA Backs Away From No Down Payment Loans

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Tue, 16 Jun 2009 15:28:38 -0500

After announcing a plan that would have allowed first time homebuyers to use a special tax credit to cover the 3.5% required down payment on an FHA-insured loan, the Dept. of Housing and Urban Development apparently had second thoughts.

HUD recently released a newly remodeled plan that does not allow the first-time homebuyer tax credit to be used for the down payment. Seems there was plenty of push back that allowing borrowers to land a mortgage without any “skin in the game” was not exactly a great idea.

What HUD finally settled on was that lenders can essentially advance qualified home buyers the value of their tax credit today to reduce their mortgage costs, but only if the borrower can bring a minimum 3.5% down payment to the table. Approved uses of the tax credit include paying for closing costs, making a larger down payment (to thereby reduce the monthly mortgage cost) or buying down the interest rate by paying points. The real value of the new rule is that eligible homebuyers can now “use” their tax credit today, rather than having to wait to recoup the value of the credit when they file their 2009 federal tax return in early 2010.

Basically, if you meet the eligibility rules you can now get a maximum of $8,000 advanced to you to buy a home. Single homebuyers with income below $75,000 and married couples who file a joint return with income below $150,000 are eligible for the max tax credit. (A limited credit is available for individuals with income between $75,000-$95,000 and joint filers with income between $150,000 and $170,000; the credit completely phases out above those income levels.)

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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President Obama Signs New Mortgage Law

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Wed, 03 Jun 2009 15:48:23 -0500

President Barack Obama signed a new mortgage bill into law on May 20th encouraging lenders to spare homeowners from foreclosure and take action on predatory lending practices. The new law is expanding on previous foreclosure prevention programs which were not living up to the numbers it had projected to help.

The law — officially called the Helping Families Save Their Homes Act — expands an existing $300 billion program that encourages lenders to adjust a mortgage if the homeowner agrees to pay an insurance premium. The program, set to expire in 2011, would swap out a homeowner's high-interest rate for a 30-year fixed loan backed by the Federal Housing Administration.

Because of strict eligibility requirements, only about 50 homeowners are refinancing through the program compared to the 400,000 people it was estimated to help.

"Too many administrative and technical hurdles made it very difficult to navigate, and most borrowers didn't even bother to try," Obama said. "And this bill removes those hurdles, getting folks into sustainable and affordable mortgages and, more importantly, keeping them in their homes."

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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Mortgages: What's Wrong with Prepaying?

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Wed, 03 Jun 2009 15:45:34 -0500

When it comes to mortgages, this may be the most asked question there is when it comes to savings, taxes and retirement - "Should I pay off my mortgage early?"

Your home is not an asset like a car where you pay a certain amount, it depreciates, you pay it off and you’re done. It acts more like an investment that you’ve borrowed money to invest in. It not only has intrinsic value, it (hopefully, eventually) will go up in value, and sometimes, as we’re experiencing, it goes down in value.

It also has value beyond money—you live in it. It allows you to be comfortable while you work and live your life. It’s also vulnerable to wild market swings, as we’ve been experiencing over the past year or so, and the national average return on home value is incredibly low for an investment—somewhere between 3 and 5 percent.

Rather than prepaying your mortgage, your money will serve you better by paying off credit card debt, saving up an emergency fund that will help you avoid losing your home should you lose your job, or growing in a well-diversified retirement portfolio which should earn you a conservative average of 8 percent over at least 20 years.

Prepaying your mortgage may make you feel better, but not prepaying your mortgage is more likely to enable you to live better.

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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High End Mortgages Easier to Get

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Mon, 11 May 2009 15:40:42 -0500

Things are looking up for buyers and owners of higher-priced homes: The jumbo-loan freeze is thawing.

After the bank scare began last fall, jumbos — mortgages bigger than what the government will buy or guarantee (between $417,000 and $729,750, depending on the location) — dried up.

Jumbo rates have not dropped, and the guidelines are so restrictive that's it's been in kind of a holding pattern. Rates on 30-year fixed jumbo mortgages averaged 6.52% recently, compared with 7.51% six months ago.

Limits on reverse mortgages rising, too:

The other bright spot for owners of higher-priced homes is this: Reverse mortgages just became much more lucrative. Until recently, the Federal Housing Administration had a hodgepodge of county-by-county caps on the equity you could withdraw.

Now, the limits are higher. In November, the FHA went to one national ceiling: $417,000. This year, to stimulate housing sales, it raised the ceiling to $625,500.

Today, if you want a reverse mortgage on your high-end house, you can get — at age 70, for example (withdrawal amounts vary by age) — 65% of $625,500. Even if your million-dollar house is worth only $800,000 today, you'll get more from a reverse mortgage than you would've in its million-dollar heyday.

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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Social Network for Homebuyers

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Mon, 11 May 2009 14:06:18 -0500

A short time ago, we told you about how Twitter was being used to market homes for sale, and communicate with buyers and sellers. Now, a new social network has been created for the purpose of providing an on-line forum for networking, exchanging ideas and dialog concerning the many issues faced by homeowners.

The site is using the Internet to create a sense of community amongst homeowners that may be geographically and socially disconnected. Askmeme.com founder Contesia Sanders states: "Homeownersconnect is a community where homeowners can share their stories, exchange information, create groups, and express themselves in their own personal blog."

The site provides homeowners the ability to positively impact their communities as well as others by sharing information related to job opportunities, small business promotion, money saving tips, strategies on how to avoid foreclosure, and scam alerts.

Homeowners can join HomeownersConnect by logging on to http://www.askmeme.com

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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Home Inspections: The Different Types

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Tue, 28 Apr 2009 12:59:33 -0500

Home inspections tend to confuse homebuyers, especially if buying a house is a first-time experience. Below are different types of home inspections you may encounter:

Primary Home Inspection

This is the most important thing to do when buying a house. It is unbelievable how many homebuyers overlook this when purchasing a property. If you want to avoid homebuyer’s remorse you need to have your future house thoroughly inspected.

Engineer's Reports

Many homebuyers hire an engineer to do a detailed inspection of a property (involves the inspection of the electrical system, plumbing, heating etc.) Sometimes this inspection is part of the primary inspection (above).

Termite Inspection

As the name implies, the purpose of the inspection is to check for the presence of termites or other wood-destroying insects in a house.

Well Water Inspections

Depending on the location, some properties may involve a well water inspection to check whether the water in the area is suitable for drinking.

Appraisal / Appraiser's Inspection

This inspection is conducted by the homebuyer’s lender in order to obtain an appraisal on the value of the home. The lender wants to be certain there are no problems with the house with respect to provisions in the type of mortgage sought by the homebuyer.

Final Walk-Through Inspection

This is a final inspection of the property conducted by the buyer and the real estate agent. The final walk-through normally takes place a day or two before closing / settlement. The purpose of this inspection is to ensure that any repairs agreed upon in advance have been made, and that no other issues have arisen.

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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Car Carrot Carrying Over to Homebuyers

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Mon, 20 Apr 2009 13:52:37 -0500

Free granite countertops, swimming pools and landscaping aren't going to convince anyone who's afraid of losing a job to buy a home. But what about a promise to pay your mortgage if you get laid off?

It started in the auto industry when ads started popping up from dealers promising to make your car payment for a year if you lost your job.

With the unemployment rate at a 26-year high and home sales still in the dumps, a growing number of homebuilders and even some real estate agents are trying to coax buyers with a kind of mortgage unemployment insurance similar to what the auto industry has been offering for a few weeks now.

It's not a nationwide thing (YET), but where it is being offered, builders can pay anywhere from $450 to $900 per customer for the coverage. Some absorb the cost as they would any other sales promotion, while others pass it on to buyers.

Some real estate firms also are getting into the act, with plans that pay up to $2,500 to cover the full mortgage payment, including taxes and insurance, for six months, should you lose your job.

Do incentives like this make you think twice about buying a home during these troubled times? We'd be curious to hear your thoughts on this idea that is just now starting to take hold in some parts of the country. Leave us your comment by clicking the comment link below.

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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Selling a Home? What To Do Now

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Mon, 20 Apr 2009 13:47:33 -0500

Call it the Great Housing Paralysis of 2009. If you're hoping to buy your first home or invest in a second one, you're probably sidelined, unsure when to jump in. If you want to sell, you're thinking it may be better to wait.

As you've heard countless times, you should think of your home primarily as a place to live, not as an investment. And it's nearly impossible to time the bottom perfectly.

If you're trying to sell your home right now, stop kidding yourself with the thinking that your house is still worth what it was a year ago.

Ignore list prices and base your asking price on what similar homes in your area have actually sold for in the past three months. Even six months ago the market was totally different.

No nibbles after 30 days? Drop the price. An even better strategy, right out of the gate, price your home at 10% below what comparable ones have gone for. That may attract more than one bidder, pushing up the final price.

If you absolutely must move out soon and your home isn't selling, consider offering a rent-to-own option.

Throw in a bigger commission to real estate agents so they'll show it more often. Also advertise that you have a flexible closing date - even if it means you must rent until your next home is ready. That way buyers who must move in 30 days will know yours is an option.

The alternative to these tips? Stay put!

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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Smart House Hunting

Ira Freireich, Exclusive Buyer's Agent (Best Buyer's Broker Realty) — Mon, 06 Apr 2009 13:31:42 -0500

The housing bust is not all bad news; some homebuyers have purchased their dream homes at prices they couldn't even hope for a year or two ago.

Thanks to falling prices, this couple bought more home than they could initially afford. And on an ARM, no less.

Read the full story here…

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Best Buyer’s Broker Realty is an Exclusive Buyer Agent specializing in Long Island real estate (Nassau and Suffolk properties) and neighboring Queens County properties.

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