According to Lawrence Yun, chief economist from the National Association of REALTORS, "Home buyers over the past year got a great deal, and buyers for the balance of this year have an edge over sellers.  Affordability could reach a generational high in the second half of this year because of rock-bottom mortgage rates, helped partly by the Fed's very accomodative monetary policy."  For more reasons why now is prime-time to buy a home, contact us and we'll send you a free ebook!

I just read a really good e-book called "7 Reasons Why Now Is a Great Time to Buy a Home".  It's filled with positive, exciting information to help buyers seize the incredible market opportunities available right now in the Lehigh Valley.  I'll be sharing key excerpts from the ebook here in my blog over the next several weeks.  For a free copy of this e-book, contact me and I'll send it right out to you!

One headline says '10% Jump in Existing Home Sales' while another reads 'Lehigh Valley Housing Market Sags'.  So, which do you believe?  Actually they're both correct.  The numbers can be confusing, but we've always told people that real estate is a local market.  Years ago, when prices were climbing in most of the country, there were areas where prices were actually going down.  That's why you have to look beyond the headlines to see what's really going on.  The just released September numbers from the National Association of Realtors shows what could be the beginnings of a housing recovery, with sales up 10% over the previous month.  On the other hand the picture is not as rosy in our local market.  Sales in the Lehigh Valley decreased 12.7% from August to September.  Although this is in keeping with the seasonality of real estate sales in the Lehigh Valley, August sales were lower than normal due to the tax credit which was offered earlier this year.  The Lehigh Valley saw the effects of the housing downturn later than most other areas, and we may see the recovery a little later as well.

It appears it could happen, but not in the usual way.  Southwest announced today that they are buying AirTran Airways, which flies out of Lehigh Valley International Airport.  Usually mergers like this are approved on the condition that services already provided by each airline are not disrupted, so by 2012 we could see Southwest Airlines flying out of LVIA!

Changes to FHA financing now scheduled to take effect on October 4 will probably raise the monthly payments for those who use the popular FHA Financing option.  My loan officer, Mona Campos from Keystone Financial Mortgage in Bethlehem, recently showed me how the numbers add up.

Currently all FHA borrowers pay a 2.25% up-front funding fee at the time of closing on their home purchase.  Most buyers actually roll this amount into their loan as part of their closing costs, so they never really think about it.  It is, however, raising their monthly payment.  The good news is that FHA is actually going to lower the funding fee to 1%.  On a typical $200,000 loan with 3.5% down (FHA minimum) and 4.5% interest, the lower funding fee reduce the cost of the loan each month by $12.65.  So far, so good.  Now you know there's a 'however' coming, don't you?

The monthly FHA loan payment also includes the monthly PMI. which is the fee FHA collects to insure itself against the borrower defaulting on the loan.  This part of the FHA fees is going up.  Currently .55% for loans with less than 5% down, this fee is increasing to .90%.  How does this effect our monthly payment under this scenario?  The monthly PMI goes from $91.68 to $150, an increase of $58.32. 

So now we have a decrease of $12.65 because of our up-front PMI descrease and an increase of $58.32 in our monthly PMI for a new payment increase of $45.67.  I know the numbers can be confusing but hopefully this will help you to understand how these changes can effect your purchasing power in the coming months.  If you're thinking about using FHA financing for your home purchase just give us a call and we'll be glad to guide you through to your new home purchase.

ESPN did a series this week on the food served at sports arenas and stadiums across the country and the results were pretty shocking! I got to thinking about our local major sports venue, Coca Cola Park, and thought it was worth checking into the report card the home of the IronPigs received from the PA Dept of Agriculture, the government authority charged with inspecting food handling facilities in the state. The most recent inspection was held on June 29th according to the PDA website, and found 4 minor violations in the concession stands, the most serious being for improper storage of funnel cake batter. Unlike most of the IronPigs this season, the batter was too hot! See the full report.

My top-notch loan officer Mona Campos tells me that if the interest rate on your mortgage is above 5.5% you should be talking to somebody about refinancing your loan.  The three biggest reasons to refi are to lower your monthly payment, to lower or lock-in your rate and to shorten your loan term.  This last one is a real biggie for a lot of people I talk to.  You could keep your monthly payment the same but get a lower rate on a shorter term refi and save money and years on your mortgage!  Mona also says that if you're worried about the valuation on your home, don't be!  There are programs that will refi for up to 105% of the value of your home.  It's definitely worth checking out!  Mona Campos can be reached at 610-867-9220.

I've heard from a lot of clients and friends lately asking about different roofing companies and their reputations.  It seems hail storms drive out-of-the-area contractors into an area before the hail has even melted!  Many of these companies claim to get you a new roof for free without even paying your insurance deductible if you just put their sign in your yard.  Now we know why Lower and Upper Macungie Townships have so many of the these contractor signs!  My response to those seeking advice on these companies is simple and basic.  Check out their references from other area homeowners, get their state license number (every contractor in the state is now required to have one!), and check other sources like the Better Business Bureau, Angie's List or do a basic Google search.  Remember, if it seems too good to be true, it probably is!

Here's a link to an article on the topic from Angie's List.

It hasn't gotten very much attention, but recent changes from Fannie Mae will make it more difficult for home buyers to close on loans. The new Loan Quality Initiative will require lenders to pull a second credit report right before closing to ensure that borrowers haven't taken on an unmanageable additional payment before closing. That means if you're thinking about buying new furniture to put in you beautiful new home, you could put yourself in a position to not be able to buy that home! The new rules stipulate that if your credit score changes by more than two points the loan has to go back to the underwriting department at the lender. This doesn't mean you absolutely won't get the loan, but it could delay closing or result in a higher APR or additional closing costs.

The Senate is expected to take up a bill this week that would extend the deadline for tax-credit closings by up to three months.  The bill would not allow new buyers into the program, but would give an extension of the closing deadline to those already under an agreement of sale.  The bill seems to have support from both sides and is sponsored by Majority Leader Harry Reid and co-sponsored by Republican Johnny Isakson and Democrat Chris Dodd.  The National Association of Realtors says that up to 180,000 buyers may be affected by the approaching deadline.