You've all probably read numerous posts about HVCC and its affect on the mortgage process for both purchases and refinances. We've even seen the Wall Street Journal today write about deals going down the tubes because of it AND there is a petition to get HVCC stopped.
This new regulation is called HVCC and it affects the way appraisals are being done for mortgages. I wanted to get you some important information on the kinds of changes you will see as a consumer and a real estate professional.
1. An increase in costs 2. Longer turn times (resulting in longer lock times) 3. Need to pre-pay for services
We've put together an online presentation to help you understand the impact this has. Feel free to send it to friends and clients.
The Affordability Index that is published by the National Association of Realtors is being discussed more today than ever before. There are three factors that make up the Index and whether the Index is high or low can make a difference to you if you are considering purchasing a new home.
This presentation was created to explain how the Index was created, what it means, and how it has performed historically. With the index at an all-time high in February, it's important that you and your clients understand what it means - you'll be hearing it in the media.
With the new stimulus package being passed by the government it has never been more important to get a mortgage check-up than today. It is critical that you assess how your mortgage compares with what is available and especially how the new 105% refinancing relief package my affect you and your current situation.
The annual check-up includes:
HBDR (Household Blended Debt Rate) assessment
Identity theft assessment
Equity assessment
Review of all current programs available in today's market
If you would like to know more about "When was the last time you had a mortgage check-up?" click below to find out more!
There is a little-known provision in the American Recovery & Reinvestment Act of 2009 that authorizes a PARTIAL TAX CREDIT if a first-time home buyers income EXCEEDS the adjusted gross income (AGI) limit of $75,000 for a single person and $150,000 for a married couple.
Two important things you need to know:
1. "Income" is defined as the Adjusted Gross Income "line" on 1040, 1040A and 1040EZ. Yes, it actually says those words within the line item.
2. The "Partial Tax Credit Income Cap" is $20,000 - and by the way, that's the dollar basis for the formula we're about to share with you.
Example: Married Couple's AGI is $159,000
Subtract Maximum AGI $150,000 For Married Couple = $9,000
Divide $9,000 by $20,000 = .45
Subtract .45 from 1.00 = .55
Multiply .55 x $8000 (max credit) = $4,400
Yes, $4,400 is the tax credit this couple can get-even when their income exceed the so-called maximum income amount. Even at $19,000 over the AGI, this couple could still get a $400 tax credit! Use the exact formula for a single home buyer!
Be sure to check with a tax advisor but as a first-time home buyer, this is awesome incentive to buy a home by December 1, 2009.
The passage of the Stimulus Bill and the $8,000 tax credit for first time buyers got me thinking about aligning stars and eclipses. How long will this first time home buyer eclipse last? We have the perfect alignment of "sun and earth and moon"; i.e. lowest mortgage rates in decades, home prices that are not running away from the first time buyer's ability to pay, and now this $8,000 tax credit. How long will the opportunity last?
Click on the link below to find out more and please feel free to share with friends, family, clients, etc.
Confused about mortgage rates today? Do you understand what really goes into a mortgage rate quote? What is the effect of property type, credit score, income documentation, loan size, down payment percentage, etc.
Quoting a RATE before getting answers to these questions would be like a doctor prescribing medication without diagnosing the problem from the symptoms. You should demand better answers than just sales pitches. Expect a consultation and a total program analysis, not just an internet rate or a newspaper ad.
I thought you might like to know more about "4.5% 30 Year Fixed Rate......True or False?" click below to find out more!
If you own rental property in Bethany Beach, get ready for a new town mandated safety checklist to protect your tenant's (even weekly summer visitor's) safety.
Bethany Beach Town Council members voted 5-1 at their Jan. 16 meeting to adopt the new safety checklist, which will be sent out to property owners each year as part of their rental license package from the town. Owners will be required to certify that every itme on the checklist is complete and in working order beginning with the 2010 summer rental season.
The required items include:
battery-operated smoke detectors for each bedroom in the rental home;
deadbolt locks that do not require interior keys;
ground-fault circuit interrupter (GFCI) protection on all outdoor electrical receptacles, bathroom receptacles, garage wall outlets, kitchen receptacles and all receptacles in crawl spaces;
a minimum of 4-inch-high exterior house numbers; and
secure window locks for all windows within 12 feet of grade and second-story windows accessible by fire escapes or stairs.
Rental property owners will be required in 2010 to submit a completed checklist with their license application. The checklist must be signed by the owner, to attest to the accuracy of the form, and notarized.
The town is offering the service of town staff to perform that notarization, free of charge at town hall. The notarization requirement was offered so the town could allow a "self-inspection" with the checklist instead of requiring a town employee to inspect for compliance in person.
If we could sum up the markets in one word right now, the word would be "volatility." The past several days we were volatile on the downside for stocks and bonds. And up for oil. It is interesting because at least one pattern was broken. In the past few months rates and oil prices would go lower as the stock market went down. But in the past two weeks the stock market has fallen while rates and oil prices have increased. Is this a new pattern? Such a pattern would be disturbing because lower rates and oil prices are good news for the economy and thus stocks. The question is-why do we have rates going up if the economy is so bad?
One explanation is a "bounce." Rates and oil prices have moved so far so fast that a few bounces upward are likely. Or, it could be that the markets are worried about the government borrowing several trillion dollars for economic stimulus which is rekindling long-term inflation fears. How we go from deflation fears one week to inflation fears the next week is hard to imagine-but that is what breeds volatility. If inflation is the real concern, we may have seen the lows for rates and oil. If it is a technical bounce, we could always bounce back. We won't try to predict the future here. Excepting that we will mention one wild card. The government is apparently going to spend hundreds of billions purchasing mortgages and preventing foreclosures. That could cause rates on mortgages to stay the same or go down even as market rates go up because of increased confidence in the performance of mortgages. Notice we used the word "could" because the effect of spending the money still carries long-term risks of inflation. So our prediction is for more volatility because of such conflicting forces.
You may have heard something about Reverse Mortgages lately - something changed - something big maybe? You heard right because something is changing with Reverse Mortgages. Beginning February 2nd, Seniors can now use a Reverse Mortgage to help purchase a home and never have to make a mortgage payment again.
This new program - an FHA insursed Reverse Mortgage for Purchase - can help Realtors list and sell more homes in Sussex County. We are a retirement destination for many seniors and before Reverse for Purchase was available, a senior had to have enough equity in their present home to sell and purchase a retirement home for cash if they didn't want a mortgage payment going into retirement.
Let's look at an example of how this might work. A senior (age 62+) with $125,000 in equity in their primary home and wishes to sell and move to a new home for retirement that costs $350,00. The Realtor lists and sells the departure home and writes a contract on the new purchase combining a $125,000 downpayment and $225,000 in Reverse Mortgage Purchase Money. The result: The Senior homeowner has no monthly mortgage payment.
The numbers vary with the age of the homeowner and current rates and you can use this calculator to get a good estimate of the numbers invovled in a specific scenario.
This FHA program has strong consumer safeguards as well:
Lower Fees
Never Give Up Title to Home
Never Owe More than Home's Value
Never Have to Move
Never Make a Payment on Principal or Interest (until last borrower dies, moves, or sells)
Plus, there are no income and credit qualification requirements for a Reverse Mortgage.
Always deal with a trusted advisor, escpecially so with a Reverse Mortgage. Always keep the Senior's family involved in all the decisions. I'll be happy to meet with you and discuss the basics of the program and then bring in a specialist to move things forward if the circumstances are right. Contact me directly for more information.
If you've been watching mortgage rates, your probably wondering why they've bounced back up over the past week. Yes, I know, the media keep harping on 11 straight weeks of declining rates and if you look to the right of this post on my website you'll see last week's Freddie Mac average is 4.96% (with .7 points by-the-way). Well, let me tell you right now - that's not where mortgage rates are today. Today, January 20, 2009, you'll get 5.375% with 0 points on a 30 year fixed rate conforming mortgage. That's about 1/2% higher than where we were about 10 days ago.
What has happened you ask? Could be a bunch of reasons. Lenders selling bonds to hedge the massive volume of locked loans they have to fund over the next few weeks; investors not buying mortgage backed bonds worrying about credit risk and inflation if the Treasury has to issue too much debt to fund a massive government spending program; or could it be simple supply and demand? Lenders can't handle the volume of refinance mortgage applications they've accepted over the past month (remember prior mortgage volumes were low, staff was laid-off, etc.). Why lower rates even more and drive more mortgage applications through the door if you can't handle what you have in process already?
If you are refinancing or thinking of refinancing and have not locked in your rate - don't. I believe you can safely wait a couple of weeks for this volume to be absorbed by the lenders. Mortgage rates will come down from current levels - have patience.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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