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FHA 203k Loans: What You Need to Know

FHA 203k Loans: What You Need to Know

By Keith Loria


Whether you’re actively searching for a new place to call home or simply entertaining the idea of moving to a new location, you more than likely have a dream home in mind. However, if your dreams are out of line with your budget, getting into that dream home may seem next to impossible. But for those willing to do a little work, your dream home can be well within reach, thanks in large part to an FHA 203k loan.

Designed for people who want to buy a home that needs renovations or major upgrades, the FHA 203k loan program allows one to borrow the purchase price of the home, plus receive money for renovations, all with the convenience of a single loan and closing.

While most mortgage financing plans provide only permanent financing where the lender will only close on the loan and release the mortgage if the condition and value of the property provide adequate loan security, if you’re talking about purchasing a home as-is, the money probably won’t be coming to you until the improvements are made. But that’s not the case with a 203k loan.

FHA 203k loans are designated for houses that are damaged or sorely in need of rehabilitation. The loan covers not only the cost of the property, but also the cost of necessary home repairs. It’s especially beneficial to those who cannot afford a finished home and are willing to take on a fixer-upper.

According to the U.S. Department of Housing and Urban Development, the 203k loan program is an excellent means for lenders to demonstrate their commitment to lending in lower-income communities and to help meet their responsibilities under the Community Reinvestment Act (CRA).

There are two types of FHA 203k loans: regular and streamlined. Regular 203k loans are for homes that need structural repairs, and streamlined loans are for those that need non-structural repairs.

The extent of the rehabilitation may range from relatively minor work (starting at $5,000) to major reconstruction on the home’s structure. Categories for work allowed include modernization and improvements to the home’s function, elimination of health and safety hazards, adding or replacing roofing, gutters, and downspouts, enhancing accessibility for a disabled person, making energy conservation improvements and changes that improve appearance and eliminate obsolescence.

Repairs can include numerous items, such as plumbing, roofing, room additions, providing disability access, adding new siding, site grading or even kitchen remodeling.

When a 203k loan closes, a repair escrow account is set up and renovation can begin. Repairs must start within 30 days of closing and be completed within six months.

To be eligible for the FHA 203k mortgage program, homes must be owner-occupied, must be only 1-4 units and must be at least one year old. New homes are not considered.

For more information about FHA 203k loans, contact our office today.

Reprinted with permission from RISMedia. ©2014. All rights reserved.

 

Janet & Graham Ford SRES MSA CSP e-Pro Broker & Associate
http://www.janetford.com
email: info@janetford.com
Janet Cell: (918) 798 4428
Graham Cell: (918) 798 6628
Fax: 918 398 5330 & 800 829 9408
Real Estate Consultant & Marketer of Fine Homes "Putting People First" 

In Top Metro Areas, a Relationship Is Found between Income and Home Values

In Top Metro Areas, a Relationship Is Found between Income and Home Values


In a recent study, NAHB examines eight key housing statistics from the 2012 American Community Survey (ACS). This post takes a closer look at two of those statistics; the median household income and median value of owner-occupied housing units.

The key to housing affordability is that the market meets the needs of the people who provide services we depend on such as teachers, police officers, firefighters, and health care workers. There are two critical components of housing affordability; income and housing costs.

According to the 2012 ACS, the median household income of owner-occupied housing in United States is $65,514. The metropolitan area where homeowners have the highest median income is San Jose-Sunnyvale-Santa Clara, Calif. at $115,297. The top employers in this metropolitan area include tech giants such as Cisco Systems, eBay, IBM, and Adobe Systems. Three of the top ten median homeowner income metropolitan areas are in California.

High income metropolitan areas tend to be in higher population areas. Eight of the top ten median homeowner income metropolitan areas have populations greater than 1 million.

There is also a relationship between income and home values. According to the 2012 ACS, the median value of owner-occupied housing in United States is $171,900. The metropolitan area with the highest median home value is San Francisco-San Mateo-Redwood City, Calif. at $719,800. Eight of the top ten metropolitan areas are in California.

Nine of the ten metropolitan areas with the highest home values have homeownership rates well below the national figure. The national homeownership rate is 63.9 percent according to the 2012 ACS.

The metropolitan area with the lowest median home value is Brownsville-Harlingen, Texas at $75,700. The metropolitan areas with the lowest home values have homeownership rates that exceed or approach the national figure.

For more information, visit http://www.nahb.org/.

Reprinted with permission from RISMedia. ©2014. All rights reserved.

 

Janet & Graham Ford SRES MSA CSP e-Pro Broker & Associate
http://www.janetford.com
email: info@janetford.com
Janet Cell: (918) 798 4428
Graham Cell: (918) 798 6628
Fax: 918 398 5330 & 800 829 9408
Real Estate Consultant & Marketer of Fine Homes "Putting People First" 

How to Buy a House with Less than 20 Percent Down

How to Buy a House with Less than 20 Percent Down


When many people start the process of buying a house they assume putting 20 percent down is required. However, this is not the case and many lenders and mortgage brokers offer options for borrowers looking for mortgages that have a small down payment. Don Frommeyer, CRMS, President of NAMB (The Association of Mortgage Professionals), shares his advice for potential homeowners searching for mortgages with less than 20 percent down payment.

“There are a couple of things you’ll want to make sure you have before researching mortgages including solid credit standing and a steady income,” says Frommeyer. “The options are out there and exist to make sure that people have the ability to buy and invest in real estate, even in today’s competitive housing market and tight credit environment.”

Frommeyer suggests the following tips when buying a house with a low down payment:

-          Maintain a Strong Credit Score: Credit score is one of the first things lenders look at when determining who is a qualified borrower. Make payments on time and keep in mind that even small mistakes may take some time to clear from credit scores.

-          Look Beyond Your Local Banks: There are many options available outside of traditional bank mortgages. Mortgage Brokers offer a wide range of Mortgage loans with zero down payments, an example is VA Loans. Veterans of the military and qualified retired veterans are eligible to use this benefit for a 100 percent loan.   They also offer FHA loans to qualified borrowers for as little as 3.5 percent down. And in rural areas the U.S. Department of Agriculture offers low down payment options with financing to 100 percent.  A good Mortgage Broker will have all of these options available and will have a variety of lenders that they can put these through to stay competitive in the market.  And even conventional loans have the ability to do loans with 5 percent down payment.

-          Document Income and Assets: Lenders look for a steady income and sufficient savings to ensure borrowers can meet monthly payments. Make sure to have all account statements ready to establish proof of funds; lenders look for savings accounts that indicate the borrower will be able to cover a few months of payments. In addition, hold jobs for at least two years or within the same industry to demonstrate longevity and stability.

-          Be Prepared to Pay More Monthly: When you do loans with limited funds down, most will require some sort of Mortgage Insurance to complete the loan.  Conventional loans require Private Mortgage Insurance on loan to values above 80 percent.  FHA loans have Mortgage Insurance on all of their loans and the VA only has a funding fee.

-          Explore Options: Frommeyer suggests going to at least two lenders to be able to compare good-faith estimates.  This allows you to look at two completely different options and this will help talking to more than one source when looking for a mortgage. Compare the fees, estimates, closing costs, etc. thoroughly before selecting any loan.

Reprinted with permission from RISMedia. ©2014. All rights reserved.

 

 

Janet & Graham Ford SRES MSA CSP e-Pro Broker & Associate
http://www.janetford.com
email: info@janetford.com
Janet Cell: (918) 798 4428
Graham Cell: (918) 798 6628
Fax: 918 398 5330 & 800 829 9408
Real Estate Consultant & Marketer of Fine Homes "Putting People First" 

Lot / Land For Sale in Timbercrest

DSCN4077
2.2 Acres in East Jenks

•  lot / land - MLS $89,900 - Great Price Jenks Lot

 -  Wonderful scenic lot with hillside views. Could be split for two or more luxury custom homes. Offers country seclusion right in the heart of town. Other homes here in this location have sold for over $1 & $2 million.

Property information

Is Your Financial Advisor Planning with the 4 Percent Rule?

Is Your Financial Advisor Planning with the 4 Percent Rule?

Who has my back in retirement?” – That’s the question pre-retirees and retirees want answered when it’s all said and done, says veteran financial planner David Zolt.

Baby boomers have been retiring in droves in recent years, and will continue to do so throughout the next decade – 10,000 of them a day, the Pew Research Center estimates. Unfortunately, the average boomer is about a $500,000 short on their savings, according to a recent survey by TD Ameritrade.

We have already entered upon an unprecedented moment in retirement history; never has so many people, with such variability in financial wealth, retired at once, Zolt says. “Clients want to know when they can retire, how much they can withdraw from their savings and how confident they can be that they won’t outlive their money,” says Zolt, a senior consultant who created retirement income planning software for financial advisors.

“If the facts of their wealth do not support their goals for retirement, then they’ll need to do one of three things: adjust their expectations, change their financial behavior or know how to improve their wealth, because the last thing any retiree wants is to run out of money while in their 80s or 90s.”

Zolt breaks down some fundamental aspects of retirement that may help boomers and others make better financial decisions after their working years.

The “4 percent” rule – a good target for withdrawals: When can you start pulling from your retirement portfolio, and how much should you withdraw? Twenty years ago, Bill Bengen came up with the answer: A well-allocated portfolio subjected to an initial 4 percent withdrawal, and adjusted for annual inflation thereafter, would survive at least 30 years in almost all scenarios. Given today’s market, however, once-stable rules have been significantly challenged. Just one factor in recent years throwing off Bengen’s rule are low bond yields, which historically averaged 5 to 6 percent, but today are much lower. “Four percent is still a good target, but it’s not absolute!” Zolt says.

The seven variables to consider in retirement planning: Seven variables should be included in an individual retiree’s plan: portfolio size, portfolio return, savings, living expenses (including taxes), years to retirement and withdrawal rate. Each of these variables is multifaceted, and it’s important to understand how each affects the others. To troubleshoot this complexity, Zolt created affordable, easy-to-use retirement-planning software called The Retirement Planner by RetireSoft, (www.RetireSoft.com) for financial advisors. “Retirement planning is an equation; rather than assuming the 4 percent rule, I’ve fixed other variables by making the number of years to retirement the variable and solving for the withdrawal rate, which is a key component to retirement planning,” Zolt says.

A simple formula calculating withdrawal rates: Whether you’re working with a professional or you’re a DIYer, retirees and pre-retirees want to know how much they should have in savings; how much they’ll receive from fixed income sources, and what they’ll be spending for living expenses. Here’s a simple formula…Subtract your annual fixed retirement income (Social Security, pensions) from your expected annual living expenses in retirement, including income taxes. That’s how much you’ll need to withdraw from savings each year. If the figure is 4 percent, and you have a well-balanced portfolio, you can reasonably expect to have a reliable income during retirement for 30 years. If the total is 5 percent, you probably have enough to last 30 years, but you may have to cut back on your spending later in retirement. If the percentage is 8 percent, you don’t have enough money to pay for many years of retirement.

Reprinted with permission from RISMedia. ©2014. All rights reserved.

 

 

Janet & Graham Ford SRES MSA CSP e-Pro Broker & Associate
http://www.janetford.com
email: info@janetford.com
Janet Cell: (918) 798 4428
Graham Cell: (918) 798 6628
Fax: 918 398 5330 & 800 829 9408
Real Estate Consultant & Marketer of Fine Homes "Putting People First"

Sellers Are Listing despite February Freezes

Sellers Are Listing despite February Freezes


The outlook for a more abundant, more affordable selection of homes for sale this spring improved considerably in February. Sellers in most markets are responding to the price increases of the past year, suggesting they are increasingly optimistic about the housing recovery and the underlying strength of market demand through 2014, according to the latest February data from realtor.com.

While February inventories are still low by historic standards, they increased 4.26 percent over January and more than 10 percent over last year. Following seasonal patterns, they will probably continue grow over the next two months with the coming of spring.

With the spring buying season around the corner, inventories of new listings are growing in every region and in markets of all sizes. The number of markets with inventories that are up by at least 1 percent greater than last year rose from 20 markets in June 2013 to 97 markets in February 2014. These trends suggest a more balanced housing market going into the 2014 home buying season.

In the California markets that became overheated last spring, inventories have bounced back. Sacramento and Stockton have twice as many homes listed on realtor.com than they had a year ago. Fresno, Bakersfield, Riverside and Oakland all report year over year increases of 40 percent or more on the numbers of homes for sale.

Among the ten largest markets still registering inventory declines from a year ago, Denver and Chicago are relatively strong markets whose median list prices are up on a year-over-year basis by 20 and 14 percent, respectively. The inventory deficits in these two markets will likely continue to put significant upward pressure on housing prices going into the 2014 home buying season.

The remaining eight large markets with inventory deficits probably will see little if any effect on prices unless inventories continue to fall. They have experienced below-average year over year list price increases and one of these markets (South Bend) has actually experienced a 2 percent list price decline.

List Prices Are Rising in Advance of the Buying Season
Despite the increase in inventory, the median list price jumped by more than 2 percent in February to $199,000, 7.57 percent higher than it was one year ago. These list price increases are another sign of seller confidence going into the selling season as sellers price their homes in anticipation of market conditions in the coming months.

The majority of housing markets are entering the 2014 home buying season in significantly better shape than they were one year ago. California, Detroit, Nevada markets continue to dominate the list of areas experiencing the largest year-over-year increases in their median list prices, although the average size of their list price increases dropped slightly, from about 27 to 25 percent.

Market Is More Balanced
On a year-over-year basis, the median list price and the size of the for-sale inventory were up by 7.57 percent and 10.14 percent, respectively. These are positive signs that the market is more balanced and that we will not see a repeat of last year’s overheated markets, soaring prices and multiple bid situations.

The median age of realtor.com®’s inventory barely changed during the month, but those California market undergoing a huge inventory build-up also are reporting the newest average inventories.

For more information, visit http://www.realestateeconomywatch.com/.

Reprinted with permission from RISMedia. ©2014. All rights reserved.

 

 

Janet & Graham Ford SRES MSA CSP e-Pro Broker & Associate
http://www.janetford.com
email: info@janetford.com
Janet Cell: (918) 798 4428
Graham Cell: (918) 798 6628
Fax: 918 398 5330 & 800 829 9408
Real Estate Consultant & Marketer of Fine Homes "Putting People First" 

Common Myths about Appraisals in the Home-Buying Process

Common Myths about Appraisals in the Home-Buying Process

By David S. Bunton


At The Appraisal Foundation, we often encounter misperceptions about the appraisal process in real estate transactions – from how an appraisal is ordered and carried out, to the type of communication permitted with appraisers. As a result, we have compiled the most common myths that we hear from lenders, borrowers, real estate brokers, and homebuilders.

Whether you’re a first-time homebuyer or a real estate professional with years of experience, you may be surprised.

Lenders:

Myth: A lender and an appraiser cannot communicate before, during, or after an appraisal is complete.

  • Fact: Not only are lenders permitted to talk to appraisers, they must. Communication is essential for the exchange of appropriate information, including the intended use of the appraisal, the scope of the work necessary for credible assignment results, and more.
Myth: Nothing can be done if a lender has concerns or questions regarding a completed appraisal.
  • Fact: If there are questions or concerns with an appraisal, there are concrete steps lenders can take, like submit additional comps for the appraiser to consider, request the appraiser correct errors in the appraisal report, and ask the appraiser to provide further detail to explain his/her conclusion.
Myth: Lenders must use an Appraisal Management Company (AMC) to order an appraisal.
  • Fact: Lenders are entitled to engage an appraiser directly. However, to avoid any potential undue influence on the appraiser, certain safeguards are required (e.g. in most cases the person at the lending institution selecting the appraiser cannot be the same person approving the loan).
Myth: AMCs are necessary to ensure that appraisers aren’t influenced by lenders.
  • Fact: Regardless of whether an AMC is used, lenders are not permitted to influence the value of a home, and licensed and certified appraisers are required by law to follow strict guidelines (i.e. the Uniform Standards of Professional Appraisal Practice) that guarantee an unbiased and meaningful analysis of value.
Borrowers:

Myth: An appraiser is hired by the borrower.
  • Fact: Even though the borrower may be responsible for the cost of an appraisal, appraisers are hired by lenders. Appraisers provide an analysis of the collateral, so that lenders understand the value of a property when making the loan decision.
Myth: The money put into a home translates dollar-for-dollar into a higher appraisal.
o Fact: The cost put into a home improvement project may very well add value to a home; however, the value of any improvements are based on what the market is willing to pay for them, and may not necessarily correlate to the cost. Not all renovations positively impact property values.

Myth: Appraisers set the value of a home.
  • Fact: Appraisers don’t set the value of a home, nor do they confirm a home’s sale price. Their role is to produce a credible opinion of value which reflects the current market.
Myth: Appraisers and home inspectors perform the same function.
  • Fact: Though both provide crucial information, their roles are very different. An appraiser provides an objective, unbiased analysis so the lender can better understand the value of a property. An inspector is typically hired by the borrower and performs an objective visual examination of the physical structure and systems of a house to ensure the structural integrity of the property.
Real Estate Brokers:

Myth: Real estate brokers are prohibited from communicating with appraisers.
  • Fact: Brokers are permitted to communicate with an appraiser and to provide them with additional information as long as the communication is not intended to unduly influence the outcome of the appraisal. The exchange of relevant information- including terms of the sale, relevant comps, and home improvements-can help an appraiser develop a more credible opinion of value.
Myth: Nothing can be done if a broker has concerns or questions regarding a completed appraisal.
  • Fact: If there are questions or concerns with an appraisal, there are concrete steps brokers can take through the lender, like submit additional comps for the appraiser to consider, request the appraiser correct errors in the appraisal report, and ask the appraiser to provide further detail to explain his/her conclusion.
Myth: Appraisers request copies of the purchase agreement from brokers simply so they’ll know how much to appraise the home for.
  • Fact: Appraisers are required to review the purchase agreement (if available during the ordinary course of business) to fully understand the terms of the transaction. Appraisers don’t simply look at a pending sale price and try to “justify” the transaction. The perform research and analysis to provide their own opinion of value.
Homebuilders:

Myth: Homebuilders are prohibited from communicating with appraisers.

  • Fact: Builders are permitted to communicate with an appraiser and to provide them with additional information as long as the communication is not intended to unduly influence the outcome of the appraisal. The exchange of relevant information- including construction features, details, and upgrades, as well as relevant comps-can help an appraiser develop a more credible opinion of value.
Myths: Nothing can be done if a builder has concerns or questions regarding a completed appraisal.
  • Fact: If there are questions or concerns with an appraisal, there are concrete steps builders can take through the lender, like submit additional comps for the appraiser to consider, request the appraiser correct errors in the appraisal report, and ask the appraiser to provide further detail to explain his/her conclusion.
Myth: Appraisers only rely on comparable sales and do not take into account the cost to build a home.
  • Fact: Appraisers do need to consider the cost to build a home and, at times, must perform a cost approach to deliver a credible appraisal. However, because cost does not always equal value, appraisers cannot simply look at what it costs to build a home to provide an opinion of value. They must perform research and analysis to determine what the marketplace is willing to pay.
David S. Bunton is the President of The Appraisal Foundation.

Reprinted with permission from RISMedia. ©2014. All rights reserved.

 

 

 

Janet & Graham Ford SRES MSA CSP e-Pro Broker & Associate
http://www.janetford.com
email: info@janetford.com
Janet Cell: (918) 798 4428
Graham Cell: (918) 798 6628
Fax: 918 398 5330 & 800 829 9408
Real Estate Consultant & Marketer of Fine Homes "Putting People First"

Housing Starts Hold Steady in February

Housing Starts Hold Steady in February


Nationwide housing starts were virtually unchanged in February, inching down 0.2 percent to a seasonally adjusted annual rate of 907,000 units, according to newly released data from the U.S. Department of Housing and Urban Development and U.S. Census Bureau.

“Continuing the January trend and in line with our recent surveys, builders are in a holding pattern,” says Kevin Kelly, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Wilmington, Del. “Poor weather is keeping many from getting into the field and they continue to face challenges related to a shortage of lots and labor.”

“While housing construction is in a recent lull due to unusual weather conditions, we expect to see an improvement as the winter weather pattern subsides and builders prepare for the spring selling season,” says NAHB Chief Economist David Crowe. “Competitive mortgage rates, affordable home prices and an improving economy all point to a continuing, gradual strengthening of housing activity through the rest of the year. Moreover, building permits, which are less dependent on weather and are a harbinger of future building activity, rose above 1 million units in February.” Single-family housing construction rose 0.3 percent in February to a seasonally adjusted annual rate of 583,000 units while multifamily starts edged 2.5 percent lower to a 312,000-unit pace.

Regionally, combined housing starts activity was mixed in the month, posting gains of 34.5 percent in the Midwest and 7.3 percent in the South and declines of 37.5 percent in the Northeast and 5.5 percent in the West.

Issuance of new building permits rose 7.7 percent to a seasonally adjusted annual rate of 1.02 million units in February. Single-family permits edged down 1.8 percent to 588,000 units and multifamily permits rose 27.6 percent to 407,000 units. Regionally, overall permits rose 6.3 percent in the Northeast, 9.9 percent in the South and 17.9 percent in the West but declined 11.8 percent in the Midwest.

For more information, visit http://www.nahb.org/.

Reprinted with permission from RISMedia. ©2014. All rights reserved.

 

 

 

 

Janet & Graham Ford SRES MSA CSP e-Pro Broker & Associate
http://www.janetford.com
email: info@janetford.com
Janet Cell: (918) 798 4428
Graham Cell: (918) 798 6628
Fax: 918 398 5330 & 800 829 9408
Real Estate Consultant & Marketer of Fine Homes "Putting People First"

Question: Can a Home Be Sold for Less Than Its Mortgage?

Q: Can a Home Be Sold for Less Than Its Mortgage?

A: Sometimes. But it is a complicated process and a lot will depend on the lender.

This process is called a “short sale,” which occurs when a lender agrees to write off the portion of a mortgage that is higher than the value of a home. But, usually, a buyer must be willing to purchase the property first.

A short sale may be more complex if the loan has been sold in the secondary market. Then the lender will need permission from Freddie Mac or Fannie Mae, the two major secondary-market players.

If the loan was a low down payment mortgage with private mortgage insurance, the lender also will need to involve the mortgage insurance company that insured the low down payment loan.

The short sale can keep the homeowner from landing in bankruptcy or foreclosure. But it is not an easy procedure to approve, and it involves as much, if not more, paperwork than an original mortgage application.

Instead of proving your credit worthiness and financial stability, you must prove you are broke. And any remaining difference between your home's value and the balance on your mortgage is considered a forgiveness of debt, which usually means it is taxable income.

Reprinted with permission from RISMedia. ©2014. All rights reserved.

 

 

Janet & Graham Ford SRES MSA CSP e-Pro Broker & Associate
http://www.janetford.com
email: info@janetford.com
Janet Cell: (918) 798 4428
Graham Cell: (918) 798 6628
Fax: 918 398 5330 & 800 829 9408
Real Estate Consultant & Marketer of Fine Homes "Putting People First"

Home Values Expected to Rise Through 2018

Home Values Expected to Rise Through 2018


A majority of more than 100 forecasters says they expect large-scale investors to sell off the bulk of homes in their portfolios in the next three to five years, boosting inventory and potentially contributing to a smoother market ahead, according to the latest Zillow® Home Price Expectations Survey. On average, panelists also says they expected nationwide home value appreciation of 4.5 percent this year, with a steady slowdown in appreciation rates each year through 2018.

The survey of 110 economists, real estate experts and investment and market strategists asked panelists to predict the path of the U.S. Zillow Home Value Index through 2018 and solicited opinions on investor activity and federal monetary policy. The survey was sponsored by leading real estate information marketplace Zillow, Inc. and is conducted quarterly by Pulsenomics LLC.

Throughout the recovery, large-scale investors have purchased thousands of homes nationwide, particularly lower-priced vacant and foreclosed homes, fixing them up and keeping them in their portfolios as rental properties. This investor activity helped put a floor under sales volumes during the depth of the housing recession, but also created competition for many would-be buyers and contributed to rapid price spikes in some areas.

Panelists were asked to assess the impact to the market if these institutional investors were to significantly curtail their activity this year. Among those panelists expressing an opinion, 79 percent says the impact would be significant or somewhat significant. Panelists were also asked when they thought these investors will have sold the majority of homes in their portfolios. Among those with an opinion, 57 percent says they expected this to occur in the next three to five years.

"Real estate investors, both large and small, played a crucial role in helping to stabilize markets during the darkest days of the housing recession, but a decline in investor activity now isn't necessarily a bad thing, and could have real benefits for buyers," says Zillow Chief Economist Dr. Stan Humphries. "Buyers entering the market in the next few months will not be competing with cash-rich investors like they were last year which should be some small solace given the higher prices and mortgage rates that they will encounter. The gradual decline of investor activity should be viewed as another sign of the market slowly returning to normal, and I agree with the panel's expectations that there will not be a rush for the exit by institutional investors."

Panelists were also asked when the Federal Reserve should end its ongoing stimulus efforts, known as "quantitative easing." Since September 2012, the Fed has been purchasing tens of billions of dollars worth of Treasury bonds and mortgage securities each month, which has helped keep mortgage interest rates low and stimulate demand. The program is now being wound down.

"Mortgage rates have been riding a rally in U.S. Treasury securities caused by volatility in emerging markets in recent weeks, so the impact of Fed tapering on the housing market has been minimal thus far," says Pulsenomics Founder, Terry Loebs. "More than 70 percent of the experts want to see the monetary stimulus reduced to zero before the end of this year, and the current pace of tapering will get us there. Of course, whether Janet Yellen's Fed will maintain the current pace as new economic challenges arise remains an open question."

Appreciation Expected to Normalize through 2018

On average, panelists says they expect nationwide home value appreciation of 4.5 percent through the end of this year, a pace that exceeds historically normal annual appreciation rates of around 3 percent. This appreciation is expected to slow to roughly 3.8 percent in 2015 and 3.3 percent by 2018, rates much more in line with historic norms.

Based on current expectations for home value appreciation during the next five years, panelists predicted that overall U.S. home values could exceed their April 2007 peak by the first quarter of 2018, and may cross the $200,000 threshold by the third quarter of 2018.

The most optimistic group of panelists predicted a 5.6 percent annual increase in home values this year, on average, while the most pessimistic predicted an average increase of 3.4 percent. The most optimistic panelists predicted home values would rise roughly 10.6 percent above their 2007 peaks by the end of 2018, on average, while the most pessimistic says they expected home values to remain about 4.5 percent below 2007 peaks.

For more information, visit http://www.zillow.com/.

Reprinted with permission from RISMedia. ©2014. All rights reserved.

 

 

Janet & Graham Ford SRES MSA CSP e-Pro Broker & Associate
http://www.janetford.com
email: info@janetford.com
Janet Cell: (918) 798 4428
Graham Cell: (918) 798 6628
Fax: 918 398 5330 & 800 829 9408
Real Estate Consultant & Marketer of Fine Homes "Putting People First"

Appraisals and Today's Real Estate Market

Appraisals and Today's Real Estate Market

By Keith Loria


Unfortunately, in today’s topsy-turvy real estate market, deals falling apart due to the appraisal coming in lower than expected are often a common occurrence. However, it’s important for buyers and sellers to understand that there are things they can do to protect themselves from this type of situation.

One of the most important things to keep in mind is that it never hurts to get an appraisal done before you list your home so there are no surprises along the way. This also gives you the chance to improve certain areas—or aspects—of the home if the appraisal comes in lower than you’d like. Plus, it allows you to set a realistic price for your home and will give you better negotiating power.

When it comes to choosing an appraiser, it’s a good idea to pick one who comes from your county—or at least one who is close by. Local appraisers will typically understand the value of the neighborhood better and have a grasp on what the market is like. Plus, because they live in the area, they may place more value on certain things and will want to keep the value of the neighborhood high.

Some appraisers compile data strictly out of the MLS and don’t take into consideration some other factors that might have skewed the numbers. Therefore, it’s important to have your REALTOR® point out any short sales or foreclosures that may have affected the comps in recent months.

You should also ask your REALTOR® to find an appraiser with a residential appraiser certification and a professional designation. While most appraisers typically fall into this category, if yours doesn’t, it might come back to hurt you because the appraiser may not be up-to-date on the latest developments.

If you take advantage of a pre-listing appraisal, there’s nothing stopping you from giving it to the buyer’s appraiser so that they have more information to go by when it comes to making an offer. This practice may even work in your favor by speeding up the process.

If you’ve explored all the above options and the appraisal still comes in lower than expected—maybe even enough to kill a deal—don’t be afraid to question the appraisal as the appraiser may have overlooked something. If you do challenge your appraisal, in some cases, banks will either use appraisal management companies that hire out-of-area appraisers or low-cost appraisal products like automated appraisals instead of a full professional exterior and interior appraisal.

Don’t let a low appraisal destroy your dream of buying or selling a home. Taking a few simple steps into consideration, you can ensure that your price is right and that your appraisal will come in on target.

Contact our office today to learn more about appraisals.

Reprinted with permission from RISMedia. ©2014. All rights reserved.

Borrowers Who Refinanced in 2013 Saving Over 21 Billion Dollars in Interest Payments over the Coming Year

Borrowers Who Refinanced in 2013 Saving Over 21 Billion Dollars in Interest Payments over the Coming Year


Freddie Mac released the results of its fourth quarter 2013 quarterly refinance analysis, showing that borrowers are continuing to take advantage of near record-low mortgage rates to lower their monthly payments, shorten their loan terms and overwhelmingly choosing the safety of long-term fixed-rate mortgages as they closed out 2013. Borrowers who refinanced in 2013 will save on net approximately $21 billion in interest over the next 12 months. This release of the report also contains annual statistics on refinances for the 10 largest metropolitan areas and four Census regions of the U.S.

• Of borrowers who refinanced during the fourth quarter of 2013, 39 percent shortened their loan term, up 2 percent from the previous quarter and the highest since 1992. Further, 42 percent of those who refinanced outside of HARP took out a shorter-term loan, while 35 percent of HARP borrowers shortened their term. Borrowers who kept the same term as the loan that they had paid off represented 56 percent and only 5 percent chose to lengthen their loan term.

• The net dollars of home equity converted to cash as part of a refinance remained low compared to historical volumes. In the fourth quarter, an estimated $6.5 billion in net home equity was cashed out during a refinance of conventional prime-credit home mortgages. The peak in cash-out refinance volume was $84 billion during the second quarter of 2006. Adjusted for inflation, annual cash-out volumes during 2010 through 2013 have been the smallest since 1997.

• The average interest rate reduction in the fourth quarter was about 1.5 percentage points -- a savings of about 25 percent. On a $200,000 loan, that translates into saving about $3,000 in interest during the next 12 months. Homeowners who refinanced through HARP during the fourth quarter of 2013 benefited from an average rate reduction of 1.7 percentage points and will save an average of $3,300 in interest during the first 12 months, or about $275 every month.

• About 83 percent of those who refinanced their first-lien home mortgage maintained about the same loan amount or lowered their principal balance by paying in additional money at the closing table. That's just shy of the 88 percent peak during the second quarter of 2012.

• More than 95 percent of refinancing borrowers chose a fixed-rate loan. Fixed-rate loans were preferred regardless of what the original loan product had been. For example, 94 percent of borrowers who had a hybrid ARM refinanced into a fixed-rate loan during the fourth quarter. In contrast, only 3 percent of borrowers who had a fixed-rate loan chose an ARM.

• With mortgage rates remaining below 5 percent for most of the past four years, relatively few homeowners with loans taken in this period would have much incentive to refinance. Consequently, the median age the original loan was outstanding before refinance increased to 7.0 years during the fourth quarter, the most since the analysis began in 1985.

• In metro areas where house price declines were more severe, the share of "cash-out" borrowers was smaller. Median house values on refinance loans have declined in nine of the ten areas, with the sharpest declines in Miami and Detroit. Of the ten, San Francisco was the metro area where median house prices increased. The share of borrowers who maintained the same loan amount or lowered their principal balance was above 80 percent in all ten large metropolitan areas.

"Our latest refinance report shows the refinance boom continued to wind down as the pool of potential borrowers declined and as mortgage rates increased during the second half of 2013. We are projecting the refinance share will be just 38 percent of all originations in 2014 as refinance falls off further and the emerging purchase market consumes a bigger piece of the pie," says Frank Nothaft, Freddie Mac vice president and chief economist.

Reprinted with permission from RISMedia. ©2014. All rights reserved.

 

 

 

Janet & Graham Ford SRES MSA CSP e-Pro Broker & Associate
http://www.janetford.com
email: info@janetford.com
Janet Cell: (918) 798 4428
Graham Cell: (918) 798 6628
Fax: 918 398 5330 & 800 829 9408
Real Estate Consultant & Marketer of Fine Homes "Putting People First" 

Builder Confidence in the 55+ Housing Market on a Record High

Builder Confidence in the 55+ Housing Market on a Record High


Builder confidence in the 55+ housing market for the fourth quarter of 2013 is up sharply, according to the National Association of Home Builders’ (NAHB) latest 55+ Housing Market Index (HMI) released recently. All segments of the market—single-family homes, condominiums and multifamily rental—registered strong increases compared to the same quarter a year ago. The single-family index increased 20 points to a level of 48, which is the highest fourth-quarter reading since the inception of the index in 2008 and the ninth consecutive quarter of year-over-year improvements.

“We are seeing continued improvement in the 55+ housing market because consumers have gained confidence in the economy and are able to sell their current homes and move into a new home or an apartment that fits the lifestyle they desire,” says Robert Karen, chairman of NAHB’s 50+ Housing Council and managing member of the Symphony Development Group. “We expect this optimism from builders and developers to carry on into 2014.”

There are separate 55+ HMIs for two segments of the 55+ housing market: single-family homes and multifamily condominiums. Each 55+ HMI measures builder sentiment based on a survey that asks if current sales, prospective buyer traffic and anticipated six-month sales for that market are good, fair or poor (high, average or low for traffic). An index number below 50 indicates that more builders view conditions as poor than good.

All of the components of the 55+ single-family HMI showed significant growth from a year ago: present sales climbed 26 points to 53, expected sales for the next six months rose 24 points to 62 and traffic of prospective buyers increased 9 points to 33.

The 55+ multifamily condo HMI posted a gain of 16 points to 35, which is the highest fourth-quarter reading since the inception of the index. All 55+ multifamily condo HMI components increased compared to a year ago. Present sales increased 20 points to 37, expected sales for the next six months increased 15 points to 40 and traffic of prospective buyers increased 9 points to 30.

The 55+ multifamily rental indices also showed strong gains in the third quarter. Present production increased 12 points to 43, expected future production rose 12 points to 46, current demand for existing units increased 16 points to 54 and future demand increased 16 points to 55.

“The 55+ segment of the housing market contains more discretionary purchases so, as expected, it has taken longer for that segment to join the housing recovery,” says NAHB Chief Economist David Crowe. “The 20 point year-over-year increase in 55+ HMI for single-family homes matches earlier gains in the NAHB/Wells Fargo HMI for the overall single-family market and surpasses the more recent gains in the other housing segments.”

For the full 55+ HMI tables, visit www.nahb.org/55hmi.

Reprinted with permission from RISMedia. ©2014. All rights reserved.

 

 

Janet & Graham Ford SRES MSA CSP e-Pro Broker & Associate
http://www.janetford.com
email: info@janetford.com
Janet Cell: (918) 798 4428
Graham Cell: (918) 798 6628
Fax: 918 398 5330 & 800 829 9408
Real Estate Consultant & Marketer of Fine Homes "Putting People First"

Mortgage Rates Dip to Start 2014

Mortgage Rates Dip to Start 2014


Mortgage rates pulled back, with the benchmark 30-year fixed mortgage rate retreating to 4.64 percent, according to Bankrate.com's weekly national survey. The average 30-year fixed mortgage has an average of 0.34 discount and origination points.

The average 15-year fixed mortgage was down to 3.69 percent, while the larger jumbo 30-year fixed mortgage inched higher to 4.73 percent. Adjustable rate mortgages were mostly lower, with the average 5-year ARM settling at 3.46 percent and the 10-year ARM slumping to 4.19 percent.

Mortgage rates started out 2014 by pulling back, helped by a few down sessions in the stock market. This week's decline largely unwinds the increase in mortgage rates seen in the last week of 2013. Mortgage rates are closely related to yields on long-term government bonds, so as those bond yields move up and down, mortgage rates typically follow.

On May 1, 2013, the average 30-year fixed mortgage rate was 3.52 percent. At that time, a $200,000 loan would have carried a monthly payment of $900.32. With the average rate currently at 4.64 percent, the monthly payment for the same size loan would be $1,030.08, a difference of almost $130 per month for anyone that waited too long.

Findings:
30-year fixed: 4.64 percent - down from 4.69 percent last week (avg. points: 0.34)
15-year fixed: 3.69 percent - down from 3.73 percent last week (avg. points: 0.25)
5/1 ARM: 3.46 percent - down from 3.52 percent last week (avg. points: 0.26)

Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets. For a full analysis of this week's move in mortgage rates, go to http://www.bankrate.com/.

Reprinted with permission from RISMedia. ©2014. All rights reserved.

 

Janet & Graham Ford SRES MSA CSP e-Pro Broker & Associate
http://www.janetford.com
email: info@janetford.com
Janet Cell: (918) 798 4428
Graham Cell: (918) 798 6628
Fax: 918 398 5330 & 800 829 9408
Real Estate Consultant & Marketer of Fine Homes "Putting People First"

 

Price Reduced $19,000 on 8425 E 64th Place in Burning Tree

Burning Tree, Tulsa  -  Announcing a price reduction on 8425 E 64th Place, a 2,105 sq. ft., 2 bath, 3 bdrm single story. Now MLS $159,900 - .

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