Daily Real Estate News from the NAR (National Association of Realtors)
5 Reasons Homeownership Trumps Renting!
The seemingly endless run of bad housing news is discouraging some potential home buyers from considering a purchase. But the truth is that the advantages of homeownership have very little to do with investment gains. The best things about owning a home have a lot more to do with personal comfort and satisfaction. Here are five of them:
1. Be your own landlord. The bank can only kick you out if you don’t pay; a landlord can be much less dependable – deciding to sell the property or choosing to live there themselves.
2. Paying the principal is forced savings. Yes, it’s possible that home prices will fall further. It is also possible that your 401(k) will lose value. But over the long haul, both are likely to enjoy modest gains in value.
3. Fixed-rate mortgages never rise – and eventually you pay them off. With mortgage rates at record lows, people who buy now are locking in real bargains.
4. Good schools. Family-sized rentals are harder to come by in areas with excellent public schools.
5. Spacious properties in pleasant neighborhoods. Sizable homes in attractive communities are almost always owned – not rented.
Monday, August 30, 2010
Wednesday, August 25, 2010
Buy Now BEFORE The Down Payment Increase
WHY NOW IS TRULY THE RIGHT TIME TO BUY!!
In October 2010 FHA minimum down payment will increase meaning fewer FHA Buyers! It's no secret that Loan Underwriting Standards for all Mortgage Loans - Conventional, and Government-Backed - have become much more stringent in recent months. Across the board, minimum down payments, fees, and minimum acceptable FICO Credit Scores have increased. Three years ago, borrowers with challenged credit and low down payment usually had multiple choices to finance their new home or condo. Today, for many, there is only one such choice - an FHA-backed loan.
As reported by Chicago Tribune Real Estate Writer Mary Ellen Podmolik in last Friday's Trib, FHA Loans now represent roughly 25% of all new home loans - a near five-time gain from the 5.5% share they had as recently as early 2007. Within the last two years, minimum down payment on an FHA Home Loan increased to 3.5%, from the earlier 3.0%. Minimum FICO Credit Score to now qualify - 620, up from as low as 580 earlier in 2009. Now, a proposal by U.S. Congressmen Scott Garnett, a New Jersey Republican, would increase the minimum down payment on an FHA Loan to 5.0%. Further, under his proposal, closing costs - sometimes as high a 6% of the loan amount - could not be rolled in to the mortgage amount. Garnett says he does not want to hamper home ownership by those with little down - only protect the FHA. Due to high demand for these loans, coupled with still-increasing rates of mortgage default, FHA Cash Reserves have fallen below the minimum levels required by Congress. Further stress on FHA, he contends, could ultimately result in a taxpayer bailout, if required to stabilize their programs.
He further states that insisting on higher initial equity would reduce the number of loan defaults, as those with greater equity in their homes usually are less likely to fall behind on their house payments or to walk away. The down payment increase seems as only a slight change, but, as home buyers and Real Estate Practitioners have seen in 2009, often the slightest tightening in lending requirements sends many buyers scurrying to the sidelines. Also, removing the ability to finance closing costs could further hamper those with little initial cash for a down payment, and, in some cases, prevent them from moving forward on a home purchase. So far, it is still allowable to ask the Seller to pay for the Buyer's closing costs!
In October 2010 FHA minimum down payment will increase meaning fewer FHA Buyers! It's no secret that Loan Underwriting Standards for all Mortgage Loans - Conventional, and Government-Backed - have become much more stringent in recent months. Across the board, minimum down payments, fees, and minimum acceptable FICO Credit Scores have increased. Three years ago, borrowers with challenged credit and low down payment usually had multiple choices to finance their new home or condo. Today, for many, there is only one such choice - an FHA-backed loan.
As reported by Chicago Tribune Real Estate Writer Mary Ellen Podmolik in last Friday's Trib, FHA Loans now represent roughly 25% of all new home loans - a near five-time gain from the 5.5% share they had as recently as early 2007. Within the last two years, minimum down payment on an FHA Home Loan increased to 3.5%, from the earlier 3.0%. Minimum FICO Credit Score to now qualify - 620, up from as low as 580 earlier in 2009. Now, a proposal by U.S. Congressmen Scott Garnett, a New Jersey Republican, would increase the minimum down payment on an FHA Loan to 5.0%. Further, under his proposal, closing costs - sometimes as high a 6% of the loan amount - could not be rolled in to the mortgage amount. Garnett says he does not want to hamper home ownership by those with little down - only protect the FHA. Due to high demand for these loans, coupled with still-increasing rates of mortgage default, FHA Cash Reserves have fallen below the minimum levels required by Congress. Further stress on FHA, he contends, could ultimately result in a taxpayer bailout, if required to stabilize their programs.
He further states that insisting on higher initial equity would reduce the number of loan defaults, as those with greater equity in their homes usually are less likely to fall behind on their house payments or to walk away. The down payment increase seems as only a slight change, but, as home buyers and Real Estate Practitioners have seen in 2009, often the slightest tightening in lending requirements sends many buyers scurrying to the sidelines. Also, removing the ability to finance closing costs could further hamper those with little initial cash for a down payment, and, in some cases, prevent them from moving forward on a home purchase. So far, it is still allowable to ask the Seller to pay for the Buyer's closing costs!
Monday, August 2, 2010
Hello friends from your favorite Realtor, Darla Luebbe, CRS/GRI/ABR w/KW Capital Partners at www.DarlaDoedRealEstate.com I have so many folks ask me for referrals for home services and vendors which is another valued service I gladly share w/my clients! One of the many joys of living my entire life in the Buckeye State is I know LOTS of people!! Since most folks are living in their existing homes a little bit longer these days, (10 years verses 7), I thought this article might be helpful when hiring contractors and repair folks. Please feel free to allow me to answer your every real estate need! Dial Darla! 614-395-1516 or www.DarlaDoesRealEstate.com
The Ten Do's and Don'ts of Home Renovation
If you're planning a home renovation, here are a few tips on hiring a reputable contractor and setting realistic project expectations from Jim Caruk (www.thecarukgroupcom), host of Life Television's Real Renos in Canada.
1) Make sure you're hiring a professional. Check that contractors carry liability insurance and workers' compensation. It's even better if they are members of one or more professional associations (e.g., the National Association of Home Builders; www.nahb.org) that help regulate industry standards.
2) Ask for references, and check them out.
3) Go see contractors' work - in fact, see work in progress, or else a contractor will show you only finished gems, not how you can expect a project to go.
4) Don't pick the cheapest or costliest guy on the block. Some companies quote low but nail you for extras, while those with higher quotes may actually be more honest in spelling out everything right from the start.
5) Allow for the final bill to come within 10 to 15 percent of the original quote. There are always additional expenses along the way, but the final price shouldn't be more than 15 percent from the budget set out.
6) Plan months ahead. It's true of construction people too: All the good ones are taken, so don't expect to pick up the phone and have someone start next week. If they're any good, they're likely booked solid.
7) Propose a retainer instead of a deposit. There's no need to pay one-third up front, which some contractors typically ask, unless it's for things, such as kitchen cabinets or windows, that need to be paid for right away. For big jobs just a monthly retainer should be acceptable until the job officially starts and you agree on a pay schedule; a retainer isn't necessary for smaller jobs (e.g., $10,000).
8) Know the scope of the work to be done. The more you know about what you want and the better you can communicate that to the contractor at the inception of a renovation project, the smoother things can go. Making up your mind, or changing your mind, along the way only eats up time and drives up the final price.
9) Don't get mad at Mother Nature. Expect weather to affect the project's timelines and maybe even create challenges and setbacks.
10) Check your ego at the door. Emotions can flare up wherever there's drywall and nails, and some clients start to think they should be directing the project. People ire a contractor because they don't have the time or skills to do the project themselves, so let the professionals do what they know how to do.
Be realistic, and keep an open mind. That means setting a realistic plan, then realizing that projects are fluid things that change and that there are always labor pains. Be ready to roll with the punches. ~Angela Pirisi, The Costco Connection, 5/10
The Ten Do's and Don'ts of Home Renovation
If you're planning a home renovation, here are a few tips on hiring a reputable contractor and setting realistic project expectations from Jim Caruk (www.thecarukgroupcom), host of Life Television's Real Renos in Canada.
1) Make sure you're hiring a professional. Check that contractors carry liability insurance and workers' compensation. It's even better if they are members of one or more professional associations (e.g., the National Association of Home Builders; www.nahb.org) that help regulate industry standards.
2) Ask for references, and check them out.
3) Go see contractors' work - in fact, see work in progress, or else a contractor will show you only finished gems, not how you can expect a project to go.
4) Don't pick the cheapest or costliest guy on the block. Some companies quote low but nail you for extras, while those with higher quotes may actually be more honest in spelling out everything right from the start.
5) Allow for the final bill to come within 10 to 15 percent of the original quote. There are always additional expenses along the way, but the final price shouldn't be more than 15 percent from the budget set out.
6) Plan months ahead. It's true of construction people too: All the good ones are taken, so don't expect to pick up the phone and have someone start next week. If they're any good, they're likely booked solid.
7) Propose a retainer instead of a deposit. There's no need to pay one-third up front, which some contractors typically ask, unless it's for things, such as kitchen cabinets or windows, that need to be paid for right away. For big jobs just a monthly retainer should be acceptable until the job officially starts and you agree on a pay schedule; a retainer isn't necessary for smaller jobs (e.g., $10,000).
8) Know the scope of the work to be done. The more you know about what you want and the better you can communicate that to the contractor at the inception of a renovation project, the smoother things can go. Making up your mind, or changing your mind, along the way only eats up time and drives up the final price.
9) Don't get mad at Mother Nature. Expect weather to affect the project's timelines and maybe even create challenges and setbacks.
10) Check your ego at the door. Emotions can flare up wherever there's drywall and nails, and some clients start to think they should be directing the project. People ire a contractor because they don't have the time or skills to do the project themselves, so let the professionals do what they know how to do.
Be realistic, and keep an open mind. That means setting a realistic plan, then realizing that projects are fluid things that change and that there are always labor pains. Be ready to roll with the punches. ~Angela Pirisi, The Costco Connection, 5/10
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