Wednesday, April 27, 2011

Existing Home Sales Rise More Than Expected!

Sales of previously owned U.S. homes rose more than expected in March, suggesting the housing market's downward trend may be close to hitting a bottom.

The National Association of Realtors said sales rose 3.7 percent month over month to an annual rate of 5.10 million units after an upwardly revised 4.92 million unit pace in February.

Economists polled by Reuters had expected sales to rise 2.5 percent to a 5.0 million-unit pace from the previously reported 4.88 million unit rate. Sales have now risen in six of the past eight months.

The median home price fell 5.9 percent in March from a year earlier to $159,600 which shows that the spike in demand for homes is mostly driven by the lower end of the price spectrum as new home buyers are finally entering the market.

Monday, April 25, 2011

Rent or Buy...You Pay for the House You Occupy

Whether you rent or buy, you pay for the house you occupy. You must live somewhere and there's a price to pay for it. A simple analysis will show you whether it's cheaper to rent or buy.

Some people don't have any choice but to rent because they don't have the means to qualify for a loan. But for those who do have a down payment and good credit, they actually have a choice of whether to rent or buy. In some cases, owning will cost significantly less than renting.

Rentals are in high demand in many markets and rents are going up. People who have experienced foreclosures and short sales have increased demand. The first comparison a discerning buyer needs to make is whether the house payment is lower than what they'd have to pay in rent.

The next comparison needs to consider the other benefits that accrue to an owner such as principal reduction, appreciation and tax savings. These can dramatically weigh in favor of owning rather than renting.

Tenants have made the decision to buy a home. The decision currently facing them is whether to buy it for themselves or their landlord.

Friday, April 22, 2011

Legislative Update

On April 12, I had the privilege to attend the "REALTORS® Storm the Capitol" event in Austin. We met with representatives from both the House and Senate and discussed where we stand on several legislative issues.

The one you may find most interesting is Eminent Domain!

Eminent Domain
Support House Bill 279, Senate Bill 18

What these bills do...
Protect the rights of private-property owners through strengthening private-property rights against abusive land seizures by eminent domain. Restrict the conditions under which property can be condemned and provide more rights to property owners whose land is seized.

REALTORS® position:
While necessary, eminent-domain powers are sometimes abused. Private-property rights are threatened whenever an eminent-domain taking is contemplated by the government.

Texas REALTORS® support legislation that reforms the limitations, process, and other aspects of eminent domain and condemnation in Texas. Some of these supported reforms include:
  • Ensuring seized land is taken only for public use
  • Requiring transparency in the process of valuing condemned property
  • Paying attorney's fees if a property owner prevails in a hearing for higher property value
  • Compensating owners for lack of access
  • Enabling property owners to repurchase their land after 10 years if the project has not moved forward

Wednesday, April 20, 2011

Gift Card Expired

I was going through a drawer looking for a card when I found an airline ticket credit voucher for $100 that had expired. What a waste! That got me to thinking of all of the gift cards that were given this year and will get tucked away and forgotten that may end up expiring too.

That led me to another thought which was the extended tax credit for members of the military, Intelligence and Foreign Service who have served outside of the U.S. for at least 90 days between January 1, 2009 and May 1, 2010. This gift card comes from Uncle Sam and could be worth $6,500 to $8,000.

Qualifying buyers have until April 30, 2011 to get a completed sales contract and then, must close it by June 30, 2011. The bonus that comes with this gift card is that the recapture of the tax credit doesn't apply if the qualified service member receives government orders to move prior to the three year residency period completion. For additional information, go to

There's more to finding the "Right" home than driving around looking at houses. A Residential Finance Consultant can help you make better decisions to help you understand the tax advantages, financing alternatives and investment aspects of homeownership.

Monday, April 18, 2011

Supersize a VA Loan

Since 2004, the maximum VA loan is the same as the maximum FNMA mortgage which is currently $417,000. Occasionally, a Veteran wants a loan in excess of that amount. If the Veteran will put a 25% down payment on the excess amount, a lender will loan the other 75%.

Sales Price$475,000
Maximum VA Loan $417,000
Excess Amount$58,000
25% Required Down Payment on Excess$ 14,500
Adjusted Loan$460,500

VA loans are eligible for veterans of the military with a certificate of eligibility. A Veteran can get a 100% loan up to the maximum VA loan amount and the seller can pay their closing costs which would allow a Vet to get into a home with no down payment and no closing costs. The VA Funding Fee can be rolled into the mortgage or paid by the Seller.

When the Vet sells the home, their VA loan is assumable at the existing interest rates but does require qualification of the new buyer. The benefits would be a possible lower interest rate and lower closing costs.

There's more to finding the "Right" home than driving around looking at houses. A Residential Finance Consultant can help you make better decisions to help you understand the tax advantages, financing alternatives and investment aspects of homeownership.

Thursday, April 14, 2011

Lower Your FHA Mortgage Payment

Most FHA loans have monthly mortgage insurance required that must stay in force until the unpaid balance is reduced to 78% of the original sales price. It would take about 10.5 to 12.7 years of normal amortization for loans with rates of 5% to 7% to reach that level.

As an example, a $175,000 home with a 5% mortgage for 30 years would have monthly mortgage premium of $163.46. This is eliminated when the unpaid balance reaches $136,500 which is 78% of $175,000. It can do that with normal amortization which would take about 10.7 years.

A faster way to reach that target balance would be to pre-pay the mortgage by making regular additional principal contributions or single lump sums. In the example used above, if a person made an additional $100 principal contribution with each payment, the 78% level would be reached in 7 years 8 months compared to the 10.55 with normal amortization.

If a person would increase their principal contribution by a little less that $300 a month, the need for the MIP would be eliminated at the end of five years which is the minimum amount of time it must stay in place for most FHA loans.

The benefits of making additional principal contributions will be to build equity faster, lower overall interest that you'll pay and shorten the time that you'll be required to pay the costly mortgage insurance. It will be necessary for the borrower to notify FHA when the target date has been reached if accelerating the amortization.

If you’re interested in developing a strategy to shorten the time your MIP is required on your loan, I can provide this type of analysis for you at no charge or obligation.

Friday, April 8, 2011

Lower Assessment = Lower Taxes

Many homeowners are overlooking an opportunity to lower their property taxes by not challenging their tax assessment. Property values have decreased in the past two to three years and the assessment may not reflect the current market value.

Deadlines are critical and if the challenge isn't made in a timely fashion, the opportunity to lower the assessment can be lost for the year. You'll need tdo verify the deadlines for your area.

The process for the challenge is relatively simple and can be done by a homeowner or by professional representation. In some cases, if there is an obvious mistake, the state employee may be able to correct it without a hearing.

Check the property assessment record for common mistakes that can include the number of bedrooms, baths, lot size and square footage of the improvements. Documentation is required to verify the errors. If you have an appraisal, such as when you purchased the home, it can serve as proof of the discrepancy.

In other cases, a hearing is required before a panel of citizens who will listen to testimony from the taxpayer and a representative of the assessor's office. Based on the documentation presented, the panel will make a ruling to lower the value, make no change or in some cases, raise the valuation.

Recently closed comparables are the most common proof presented in a hearing. Comparables should be similar in size, condition and location. A knowledgeable real estate professional can filter the results generated in a MLS search to identify the most appropriate.

Your real estate professional can supply the comparables, filing deadlines and other pertinent information needed to make a challenge. Lowering your assessment will result in lower property taxes and more money in your pocket.

Wednesday, April 6, 2011


Home prices have come down 20, 30, 40% or more in the last three years and mortgage rates are lower than they've been in 50 years and you still haven't bought a home. Really?

Housing affordability is over 180, an all-time high when 100 is considered good and you're still renting. Really? Are you waiting for it to get to 200? Do you think prices and rates are going to get lower? Really?

You know it's costing you more every month to rent than to own. Tax savings, appreciation and principal reduction lower the monthly cost of housing and yet you'd rather let your landlord benefit...Really? Have you heard that the average homeowner has 41 times greater net worth than a renter? Do you think it's a coincidence? Really?

And have you heard that most people want a place of their own; a place to raise their family; to share with their friends; to feel safe and secure. So, you'd rather go home after working hard all day to your landlord's home. You'd prefer to invite some friends over to your landlord's home for dinner next weekend. Really?

You haven't checked out whether you can actually take advantage of the best buyer's market ever. You haven't invested thirty minutes to find out the facts as they apply to you and your situation. Really? You're basing a decision on national news, chat rooms and Facebook. Really?

Every market is different. Every buyer is unique. If you want a home; if you have a down payment; if you have good credit, you owe it to yourself and your family to explore the possibilities...but with a real estate professional; someone who can really show you the reasons and really give you options.

Monday, April 4, 2011

Mortgage Myths

  • "It's impossible to get low down payment loans." - UNTRUE!
    FHA down payments are only 3.5% and VA is 0%. In some areas, there may be some 100% USDA loans available.
  • "It takes perfect credit to get a loan." - UNTRUE!
    There is a relationship of better rates to better credit but many issues on a credit report may be explained. The way to know for sure is to speak to a reliable lender.
  • "If I've had a bankruptcy or foreclosure, I can't qualify." - UNTRUE!
    Credit history following a short sale or foreclosure is very important and there can be extenuating circumstances. It only takes a few moments with a reliable lending professional to find out if your individual situation will allow you to qualify.
  • "Getting pre-approved is expensive." - UNTRUE!
    Usually, the only expense to getting pre-approved is the cost of the credit report which could be around $35. The advantage is that you will know that you qualify for a particular mortgage amount.
  • "I should wait to qualify until I find a home." - UNTRUE!
    The best interest rates are only available for the highest credit scores. It can take time to qualify for a mortgage especially if there are issues that need to be corrected. It is to your advantage to start the qualifying process early in your home search.
  • "All lenders are the same." - UNTRUE!
    Reliable lending professionals will explain the entire process before collecting fees, quote fees up-front, have competitive products, do what is necessary to get the loan approved and close at the locked rate and terms. Ask for recommendations from recent borrowers.
Buyers and Sellers need solid information to make good decisions. The agent who represents you in the sales may be the BEST recommendation for a reliable lender. The mortgage plays an enormous role in determining the overall cost of housing and you need solid information to make good decisions.

Friday, April 1, 2011

Importance of a Home Inventory

Recently, a homeowner had a burglary and part of the insurance claim was denied because they didn't have proof of purchase or a current inventory of their personal belongings. This is something that could happen to anyone. Even if you had an inventory but it was several years old, it could cost you money.

Some homeowners who have placed an insurance claim for losses say that they realized something was missing months after they had filed. The inventory can actually serve as a guide to make sure you get compensated for all of your loss.

The best proof of purchase is to have a receipt for the item. The reality of the situation is that most people don't keep receipts. The next best item is to have an inventory and the more details like pictures, the better.

Contact me for a Home Inventory. Once you get it completed, put it somewhere safe so you'll have it when you need it. Saving it in the "Cloud" like Microsoft Office Live is convenient because you can acess it from any computer with Internet access.