Team Morelli

Mortgage Rates

2010-05-25T19:11:00.000-07:00

Mortgage Rates at New Lows, Thanks to Europe's Debt Crisis

Here's some good news for the struggling US housing market: Thanks to the European debt crisis, mortgage rates are at historic lows.

The current average rate for a 30 year fixed loan is 4.87 percent, according to Bankrate.com. That's the lowest rate for the 30 years since Bankrate started keeping track 25 years ago. Even jumbo loan rates-loans for more than $417,000-have fallen. The 30-year fixed jumbo loan is at an average rate of 4.5 percent, down from nearly 6 percent at this time last year.

"It's the best time in our generation to buy," says Mark Zandi, chief economist at Moody's. "It may be the best time in any generation. Mortgage rates are so low and with homes prices down and lots of inventory, you couldn't pick a better time to buy or re-finance."

Europe's debt crisis is behind the drop. Nervous investors are flocking to the security of US Treasurys, which pushes down their yield and influences a host of consumer interest rates-including those on mortgages. The decline is also good news for homeowners looking to refinance, particularly those who owe more on their mortgage than their house is worth. "There's a tremendous window on re-financing," says Greg McBride, chief economist at Bankrate.com. "That's particularly true for people who can take advantage of the government's Home Affordability Refinance Program (HARP)-which allows home owners to refinance into low mortgage interest rates even if they're property value has gone down." HARP, which was due to end at the end of this June, now runs through June of 2011.

"Think of the benefits if you buy or refinance now," says McBride. "Locking in now at the lower rates means more more bang for the buck and more breathing room for homeowners when it comes to payments." But the decline in rates probably won't last long, analysts say. So homeowners need to move fast. "I think they won't last much longer than a month or two at the best," says Lawrence Yun, chief economist at the National Association of Realtors. "I can see them going up to 5.5 percent by the end of June if not sooner." The reasons? Yun says the worries over Europe will be fading soon and investors will be looking at other assets besides US Treasurys. And there's the US deficit, which will push up Treasury yields.

"The US is fortunate now that there's no pressure on interest rates," Yun goes on to say. "But going forward, higher rates will be needed for financing the debt." Zandi agrees. "Yes, I can't see these rates being this low in three to four weeks," Zandi says. "Investor's will settle down and this current crisis (Europe) will pass and the focus will be back on US debt. It's really a now or never type of proposition, when it comes to getting these types of historic rates."

10 Cheap Ways to Boost Your Sales Price by Spring

2010-01-19T03:51:00.000-08:00

10 Cheap Ways to Boost Your Sales Price by Spring

As the temperature drops and the snow piles up, it's easy to forget that spring is quickly approaching. And after more than three years of a painful housing swoon, real estate experts predict that lower prices, attractive mortgage rates, and a tax perk from Uncle Sam will create the most vibrant spring home selling season in some time. "This is going to be probably the most pleasant experience for a home seller in the last four or five years," says Mike Larson of Weiss Research. "If you have been beating your head against a wall, this is going to feel a lot better." But even if the market does perk up, buyers are likely to retain the upper hand throughout 2010. So to help property owners get the best selling price they can--without burying themselves in expenses--U.S. News has created a list of 10 cheap ways to boost a home's sales price by spring:

1. Retouch the front shell
If your property's exterior isn't appealing, no one will want to see your newly remodeled kitchen. So property sellers must first ensure that their home projects a cozy, inviting feeling. "The shell--the outside front--is probably the most important area for improvement, the area where you can make the biggest improvement with the smallest amount of cash," says Pat Lashinsky, the president and CEO of ZipRealty. Touching up the paint on the front-entry portion of the house can be an inexpensive but effective way to make the entire property more inviting, Lashinsky says. "Really focus on that outside, external shell," he says. "You would be amazed by the amount of people that drive by a house and say, 'Ah, that's not for me.' And they can tell just by the way the upkeep and the outside looks.

2. Trim the greenery
Ensuring that the lawn, hedges, and flowers are well maintained helps make your home more alluring to prospective buyers as well. Property owners can hire professional landscapers or break out the lawn mower and get busy themselves. "Many people have landscaping that is overgrown and too heavy, and it is concealing a lot of the house," says Paul Zuch, the president of Capital Improvements. "Trim the trees, trim the hedges ... [and] add a little color to the flower beds."

3. Paint the interior
Putting a fresh coat of paint on the home's interior is a cost-effective way for sellers to make their home more appealing to buyers, says Ron Phipps, a broker with Phipps Realty in Warwick, R.I. But when choosing the color, homeowners should be conservative. "The caution is that your favorite color may not be the favorite color of the buyer." Instead, homeowners are best off using neutral colors, Phipps says. "Go with something that is a very light yellow or a light cream with a contrasting white, so it just looks very fresh and crisp . ... Having the paint in good condition is almost more important than the color."

4. Don't forget the floors
Improving the condition of a home's flooring is also a smart move for sellers--and you don't need to refinish wood floors or install new carpets to make them more attractive. "If it's a hardwood [floor], has the floor been buffed?" says David Lupberger, a home improvement expert with ServiceMagic.com. "If you have carpets, have the carpets been cleaned?"

5. Make all major repairs
Because tighter lending standards demand higher down payments, today's home buyers won't have much cash left over for improvements once they've made their purchase. So it's imperative for sellers to make all major home repairs--fixing the leaky roof, rebuilding the front stoop--before they put the property on the market. "Repairs can't be ignored, because nobody has any extra money," Phipps says. To determine what needs to be done, property owners can scrutinize their homes themselves or bring in a home inspector to examine the property professionally. "The home inspection piece I think is something that is a huge value, particularly if there is something that is a question," Phipps says.

6. Put appliances under warranty
To give buyers more confidence in a home's appliances, Phipps recommends that sellers put them under warranty. Sellers can buy home warranties--which cover repair and replacement costs for many home appliances--from several different firms. "If I have got a 40- or 50-year-old house, it is going to be harder for me to persuade a first-time home buyer with a limited amount of cash to buy it because they will say, 'Well, what happens if something breaks down?' " Phipps says. "If I have a home warranty ... that solves that problem."

7. Make energy-efficient home improvements
Increasing your home's energy efficiency is another good way to make your property more attractive to buyers. Many such improvements--such as new windows or better insulation--come with federal tax benefits. In addition, a growing awareness of human impact on the environment means homes that have these upgrades will stand out from other listings. "If you have some cruddy old windows that are leaky and just not energy efficient, you can put in new replacement windows and take advantage of the tax credit," Zuch says. "It's not green washing. Those are really practical things that make your house more sellable." Many contractors will conduct a so-called energy audit free of charge to determine where efficiencies can be created, Zuch says. "If your house is more energy efficient-you use less energy, it's better insulated-it is going to be more desirable for a potential buyer," he says.

8. New light fixtures
Replacing old or broken light fixtures with new ones can also be a low-cost way to add value, Lupberger says. Installing a nice new light fixture in the foyer near the home's entrance can be a particular benefit, he said, because it can make a strong first impression on would-be buyers. Creating an inviting feeling in the interior entryway, in turn, helps get home shoppers more interested in checking out the rest of the property. "I am not going to redo the house," Lupberger says. "But I can update those features so that somebody can walk in and say, 'You know what? [the homeowners] took care of this.'"

9. New stove in the kitchen
While some homeowners might think the only way to jazz up a dated kitchen is a full-on remodeling job, Lashinsky recommends a much less costly alternative: buying a new stove. "If there is an updated stove in the kitchen, it is amazing how that draws people in, and people say, 'Wow, this kitchen is going to be great,' " Lashinsky says. While upscale homeowners may have to shell out for top-of-the-line appliances to maintain their kitchen's décor, others can budget well under $1,000 for the upgrade. "You can get a really nice stove for $700 or $800," Lashinsky says. "You can basically have the look of a new kitchen that is going to be really enticing to someone-and what you are really trying to do is differentiate your house from somebody else's." Property owners in neighborhoods where most homes have granite countertops can consider making this upgrade as well. But Lupberger says the project makes sense only for homeowners with extremely dated kitchens that are going to serve as a serious impediment to finding a buyer. A real estate agent with experience in the local market can help you determine whether or not the upgrade is essential, he says.

10. Freshen up the bathrooms
Getting rid of mildew stains on the bathroom caulking can boost a home's appeal as well. Such stains "scream, 'These people haven't taken care of this house. It's going to be a money pit,' " Zuch says. Use a razor blade to remove the old caulk, and replace it with new, mildew-resistant caulk, Zuch says. And rather than remodeling the entire space, homeowners can reinvigorate a worn-down bathroom by replacing cracked sinks, Lupberger says.

10 Things To Know About Real Estate In 2010

2010-01-04T09:01:00.001-08:00

Is 2010 the year to buy a house? It certainly looks that way: After a steep run-up in prices during the first half of the decade, home values have plummeted back to 2003 levels. Fixed mortgage rates are sitting near record lows. And the foreclosure epidemic--while painful for many home owners--has created some wonderful opportunities for bargain hunters. If that's not enough, Uncle Sam is handing out thousands of dollars in tax credits to nearly all first-time buyers and the bulk of existing home owners who close a purchase by June.

But while the 2010 outlook appears inviting, there's one key catch. "You need to have a stable job," says Mark Zandi, the chief economist of Moody's Economy.com. The economy is showing signs of life, but the unemployment rate is already at 10 percent and expected to go higher. And while those mortgage rates are attractive, buying a house makes sense only if you can bank on your income stream. So before you consider purchasing a home, take a hard look at your job, your company, and your industry.

1. Prices to bottom: After more than three years of falling, real estate values have shown signs of stabilization in recent months. At the national level, home prices slid nearly 9 percent between the third quarter of 2008 and the same period this year, according to the S&P/Case-Shiller home price report. That's a notable improvement from the second quarter's nearly 15 percent annual drop and the first quarter's 19 percent decline. This improvement will give way to a bottom in home prices--finally!--in 2010, but not before additional declines, Zandi says. Zandi projects home prices will hit bottom in the third quarter of 2010 after logging a peak-to-trough decline of roughly 37 percent, based on the S&P/Case-Shiller national home price index. "That means we've got another roughly 10 percent [decline] to go," Zandi says.

2. Mortgage delinquencies up: Amid falling home prices and a nasty labor market, roughly 1 in every 7 mortgages was either past due or in foreclosure by the end of the third quarter--the highest delinquency rate in the 37-year history of the Mortgage Bankers Association's National Delinquency Survey. Two factors are expected to drive delinquencies even higher next year. First, nearly 1 in 4 homeowners currently owes more on their mortgage than the property is worth, which increases their odds of default. And secondly, the national unemployment rate--which already stands at 10 percent--will peak at about 10.5 percent in the first quarter of 2010, says Patrick Newport, an economist at IHS Global Insight. Additional job losses mean more borrowers won't be able to pay their mortgage bills. "The [delinquency] rate is going to stay up there for quite a while because the job market is going to be really weak for a while," Newport says.

3. Foreclosures move upstream: The number of foreclosure sales will increase to about 1.9 million in 2010, according to Moody's Economy.com. And while we've already seen a growing number of more expensive homes heading into foreclosure, Heather Fernandez, vice president of marketing at the real estate search engine Trulia, expects the trend to pick up steam next year. (Trulia is a U.S. News partner.) "We are poised in 2010 to see a surge of foreclosures from prime borrowers. Hundreds of billions of dollars in option [adjustable rate] mortgages are set to be recast" next year, Fernandez says. Option adjustable rate mortgages allow borrowers to make lower monthly payments for an initial period, after which the payments adjust--or "recast"--higher. For some borrowers, the new payments can be more than twice their initial payments. Combined with other factors, like the loss of a job, a recasting option adjustable rate mortgage can make borrowers more likely to default. "These are [properties] at higher price points [and] potentially in more desirable neighborhoods," Fernandez says.

4. Mortgage rates to rise: Anyone who purchased a home in 2009 was presented with some extremely attractive mortgage rates. Rates on 30-year, fixed mortgages fell to an average of 4.88 percent in November, down sharply from 6.09 a year earlier. A key factor behind the plunge was a Federal Reserve program, first announced in November of 2008, that purchased debt and mortgage-backed securities from Fannie Mae and Freddie Mac. But the program is slated to expire at the end of the first quarter, and if private investors don't step up, fixed mortgage rates could jump. (The Fed, of course, could always decide to extend the program.) The unwinding of this Fed program, the improving economy, and mounting concern over government deficits could push rates on 30-year, fixed mortgages to roughly 5.5 percent by mid-2010 and close to 6 percent by the end of the year, says Mike Larson of Weiss Research. "Almost all signs to me point higher," Larson says.

5. Buyer's market remains: With prices still falling, mortgage rates remaining historically attractive, and additional homes hitting the market in the form of foreclosures, the dynamics of the real estate market will continue to favor buyers over sellers in 2010. That means those looking to buy a home next year should not feel pressured to act impulsively. "You don't need to have a sense of urgency, but understand that as time progresses the balance of power as we get into 2010 is going to slowly but surely shift away from [buyers]," Larson says. "It is not going to be a strong seller's market, but it will be more evenly distributed as the year goes on." Data from the real estate firm Zillow show that home buyers are already losing the leverage they once enjoyed. While home buyers landed a median discount of 4.6 percent off listing prices in January, the size of the gap fell to 2.7 percent by October. Expect this gap to close further as 2010 marches on.

6. Modification plan could be modified: While the Obama administration has put nearly 700,000 borrowers into temporarily restructured mortgages, it had found permanent fixes for just 31,382 struggling homeowners through November. What's more, critics have identified two key shortcomings of the government's $75 billion antiforeclosure plan. First, the program isn't much help for borrowers struggling to stay in their homes as the result of a job loss. And the rickety labor market is a key factor behind rising delinquencies. At the same time, the plan does not sufficiently address the issue of negative equity--owing more on your home loan than the property is worth--which also works to increase foreclosures. "The current modification program does not address negative equity and is therefore destined to fail," Laurie Goodman, a senior managing director at Amherst Securities Group, told a congressional committee in written testimony on December 8. "It must be amended to explicitly address this problem." Zandi says the government may move next year to overhaul the modification program in two ways: improving troubled borrowers' negative equity positions by writing down some of the mortgage principal, and helping to turn troubled homeowners into renters.

7. FHA lending standards may increase: While banks have jacked up lending standards in the face of mounting delinquencies, mortgages backed by the Federal Housing Administration--which come with a minimum down payment of just 3.5 percent--have remained accessible to a wide swath of borrowers. The FHA guarantees nearly 30 percent of new-home purchase mortgages today, up sharply from just 3 percent in 2006. But the rapid growth has occurred alongside an increase in mortgage delinquencies. As a result, the FHA's reserves have dipped below congressionally mandated levels. The development has put pressure on the Obama administration to beef up its requirements for agency-backed home loans. In early December, the Department of Housing and Urban Development announced that it would make several changes to FHA mortgage requirements: raising up-front cash requirements, boosting minimum credit scores, and perhaps charging more for insurance premiums. Additional new restrictions may be in store. Taken together, the developments could work to choke off the supply of mortgage credit to borrowers who can't get financing elsewhere.

8. Tax credit available through June: On top of lower prices and cheap mortgage rates, Uncle Sam is offering an additional incentive to get buyers into the market next year. In early November, President Obama signed a bill extending and expanding a popular tax perk for home buyers. The legislation gives qualified first-time home buyers a tax credit of up to $8,000 if they close the purchase of a primary residence by the end of June. Meanwhile, qualified current home owners are eligible for a credit of up to $6,500 when they buy their next principal residence. But while the tax perk may make a home purchase more tempting, would-be buyers should make sure they have the job security and financial wherewithal to handle the transaction before going ahead. "Don't let [the home buyer tax credit] be the thing that drives you to act," Larson says.

9. Markets will vary a great deal by region: The performance of the national housing market is much less important that the dynamics of your local market, and sales and pricing trends will vary a great deal from one area to the next in 2010. "There will be geographic pockets where the values will still continue to decline, and there will be geographic pockets where they increase," said Dale Siegel, a mortgage broker and the author of The New Rules for Mortgages. That means anyone interested in buying real estate next year can't just read the national headlines. Instead, find a good blog that covers the local housing market and consider speaking with a real estate agent with experience in the area. Check out online listings--pay close attention to pricing and inventory trends. And make sure to head out to open houses to get a firsthand feel for the market.

10. Mobile maps can help: Advances in technology have enabled would-be home buyers to increase the efficiency of their searches. For example, Zillow's iPhone app allows home buyers to see the estimated values and listed prices of the properties they pass on the street. The app, which is free, has been downloaded more than 830,000 times. Trulia has unveiled a similar product that allows users to find nearby open houses as well. "If you are sitting in a neighborhood having brunch on a Sunday, you can very easily pull up your phone [and] walk into open houses," says Trulia's Fernandez.

Foreclosures VS Shortsales....

2009-11-09T09:49:00.000-08:00

Buying a foreclosure or short sale can be complex. Because each situation is unique, understanding the buying process is critical. Short sales, foreclosures and lender owned properties can be classified as non-traditional home sales. While they may provide the opportunity to buy real estate at reduced prices, these types of sales are complicated and take longer than traditional real estate.

Short Sales: The seller is asking their lender(s) to agree to take less than the amount owed on the home as payment in full. It’s considered a short sale when the sale price is insufficient to pay off the total mortgage(s) and costs of the sale. Contrary to its name, a short sale can be one of the most time consuming types of real estate transactions because the seller and lender(s) must agree to the terms of modifications of the seller’s mortgage obligations.

In Foreclosure: Properties in foreclosure represent an owner who has missed one or more mortgage payments and has received an official notice of foreclosure from their lender. Lender Owned, Once the foreclosure process is complete, the property becomes lender owned. The seller is now the bank and the home is vacant. Things to Consider: Non-traditional home sales are more complex and potentially more time consuming because the lender is heavily involved in the transaction – either acting with approval powers or as the owner/seller. Foreclosed properties may be previously owned by people experiencing financial difficulties and may require costly updates and repairs. Liens or back taxes often create challenges with the property's title. When entering into this type of real estate transaction, it’s critical to work with an expert who understands the market and can help you navigate the process. To learn more about buying a short sale or foreclosure contact Traci or Eryn!

Tax Credit Extended and Expanded!

2009-11-06T12:35:00.000-08:00

BREAKING NEWS!
Tax Credit Extension & Expansion is Approved!
President Obama has approved a bill for the Housing Tax Credit Expansion and Extension. Here’s what it means:
The $8,000 First-Time Homebuyer Tax Credit is Extended!
Now, qualified first-time home buyers would receive their $8000 tax credit if they sign a purchase contract by April 30, 2010 and close by June 30, 2010.
The home purchased must be their primary residence
Buyer cannot have owned a home during the past three years
Tax credit is up to 10% of the home value (not to exceed $8,000)
Annual income caps to qualify for the tax credit have increased ($125K for single filers / $225K for joint filers). Partial tax credit can be granted for incomes up to $145K for single filers / $245K for joint filers.
　
PLUS New $6,500 Tax Credit for Current Home Owners Purchasing a Primary Residence
Eligible home buyers must have lived in their current home for 5 consecutive years of the past 8 years.
The new home does not have to cost more than the old home.
Eligible for homes with purchase agreements signed between November 6, 2009 and April 30, 2010, and close by June 30, 2010
Annual income caps to qualify for the full tax credit are $125K for single filers / $225K for joint filers. Partial tax credit can be granted for incomes up to $145K for single filers / $245 for joint filers.
Changes Chart and FAQs from www.realtor.org (National Association of Realtors® website) are attached.

Spring housing market off to a strong start!

2009-04-20T06:46:00.000-07:00

There's an upside to the nation's housing glut, fed by the crush of foreclosures: Housing gets more affordable.

In Minnesota, closed home sales were up 14.25 percent from one year ago, as indicated from the 13 county metro housing statistics released by the Saint Paul Area Association of REALTORS® today.

Nationwide, sales of existing homes rose 5.1% to 4.72 million from January to February - the largest sales jump since July 2003, the National Association of Realtors reports.
The surprising increase was driven by buyers taking advantage of big discounts on foreclosed homes. The median sale price was $165,400, down 15.5% from a year earlier and down 28% from their peak in July 2006.

First-time home buyers who could not break into the housing market in the boom years are prime buyers now that prices are at or near bottom and mortgage interest rates are below 5%.
According to Cindy Moynihan with Prime Mortgage, "the stimulus tax credit is working. We have seen a remarkable increase in the number of mortgage applications compared to last year and we have a number of clients that are in the pre-approval process ready to purchase a home". She goes on to say that "first time homebuyers have been given $8,000 that does not have to be repaid and they are ready to spend it."

Another good sign in this spring market is the decline in the number of new listings added to the overall inventory in the Twin Cities metro area. There were 7,870 new listings added in March compared to 8,523 in March 08, a 7.66 percent decline. Meantime, median sales price in the Twin Cites metro continues to search for its low point. The median sales price for a single-family, residential property in March 09 was reported at $154,125, a 22.94 percent decline from one year ago. The median sales price one year ago was $200,000. However, as inventory decreases and as buyers get motivated by low interest rates and tax credit programs, the median sales price could be close to reaching its floor. For the first time since July of last year the median sales price increased on a month-over-month basis by 2.75 percent. The median sales price one month ago was $150,000. Housing statistics include existing single family homes, condominiums and townhomes.

Statistics are provided by the Saint Paul Area Association of REALTORS® and are based on data supplied by the Regional Multiple Listing Service.

Pending Home Sales Offer Hope

2009-02-11T07:51:00.001-08:00

For-sale signs have stayed in place a little longer with the persistent decline in home sales. But Tuesday brought good news: The pending home sales index nationwide rose 6.3 percent from November to December.

The national and local increases reported Tuesday are seen as good news for a depressed housing market.

By JIM BUCHTA, Star Tribune

Good news arrived for Main Street --and Wall Street -- on Tuesday when the National Association of Realtors reported that its pending home sales index nationwide rose 6.3 percent from November to December. That report helped reverse three days of declines for the Dow Jones industrials, lifting the index 141 points.

The Twin Cities got even better news. Actual pending sales in the 13-county metro area during January rose a robust 17.7 percent, marking the seventh consecutive year-over-year monthly increase, according to an analysis of data from the Minneapolis Area Association of Realtors.
While the latest sales figures are a bright spot in an otherwise gloomy economy, persistent declines in home prices, clogged credit markets and rising unemployment suggest that a full recovery might still be several months down the road.

"I would love to think that this is the bottom," said Mary Bujold, director of research for Minneapolis-based Maxfield Research. "But I don't know that right at this moment that I can be that optimistic."

The pending sale report is closely watched by many because it's an important indication of future activity. It generally takes two to three months for those pending sales to become closed sales, but in today's market, not every pending is going to become a closed sale the next month.
Yet other market indicators will continue to present challenges well into next year: Median sale prices are expected to fall at double-digit rates for several months to come, and getting a mortgage is still a challenge for many buyers. That's why the national group is lobbying the government for additional tax credits to help stimulate the market.

"Significant uncertainty still clouds the housing market despite improved affordability conditions," said Lawrence Yun, chief economist for the National Association of Realtors. "For a sustainable housing market recovery and, hence, sustainable economic recovery, we need a significant housing stimulus."

New listings coming on the market have steadily declined, reducing overall inventory levels. That includes the inventory of new homes as well.

The number of unsold new houses on the market in the seven-county metro area has fallen from 6,000 units during the first quarter 2007 to a little more than 3,200 by the end of 2008, according to data from MetroStudy. That translates into a 7.7-month supply of new housing.
In Washington earlier this week there has been debate about a plan to lower the interest rate on home mortgages to 4 to 4.5 percent and to stimulate borrowing by requiring Fannie Mae and Freddie Mac to purchase those mortgages from lenders.

There's also expected to be pressure from Republican officials to implement a $15,000 tax credit for home buyers. Already, a $7,500 federal tax credit that became available last year is getting some recognition for helping to lift the market.

However, more credit for the rise in pending sales is being given to distress sales, which accounted for 32 percent of all active listings in the Twin Cities metro area last month. Sales of those lender-mediated transactions, including foreclosures and short sales in which the lender forgives part of the mortgage to facilitate a sale, have been a drag on home prices. The median sale price of a traditional home sale last year was down 2.6 percent, while lender-mediated sales plummeted 19 percent, according to the Twin Cities association.

Pending sales don't translate directly into closed sales the next month. In November, for example, in the Twin Cities metro area, pending home sales rose 3.7 percent ahead of the same month in 2007. But in December closed sales rose almost 15 percent compared with December 2007.

Though such data aren't tracked regionally, some say that contract cancellations are on the rise. That's because in today's market, borrowers are more likely to discover after they've signed a contract that they can't get a mortgage, while others are making low-ball offers on bank-owned listings that can take many months to close.

The National Association of Realtors said Tuesday that the increase in pending sales in December was well above what economists expected.

Though declines in inventory and rising sales are good news for the market, broader economic challenges persist.

"People just don't know what's going to happen," Bujold said. "Uncertainty means that you don't go out and make any purchases unless you feel like you have to take advantage of it because it's not going to come around again."

Early Signs Of Foreclosure And Short Sale Slowdown

2009-01-28T09:52:00.000-08:00

NEWS RELEASE

FOR IMMEDIATE RELEASE
Early signs of foreclosure and short sale slowdown-

Q4 2008 Update to “Foreclosures and Short Sales” report is released with exciting new interactive data tool Minneapolis, Minnesota (January 27, 2009) – Foreclosures and short sales in the Twin Cities housing market are showing early signs of slowing, according to a new research report released by the Minneapolis Area Association of REALTORS® (MAAR) based on data from the Regional Multiple Listing Service of Minnesota, Inc (RMLS).

During the fourth quarter of 2008, there were actually 4.3 percent fewer new lender-mediated listings than there was in the third quarter. That’s the first quarter-to-quarter decrease since 2003. As a result of this reduction in new supply and continued buyer interest in these properties, the total number of lender-mediated homes for sale dropped 600 units over the course of the quarter. This is only one quarter of downward movement, so time will tell whether the trend continues. Regardless, this has to be taken as a hopeful sign.

“By no means is the hard part totally over,” said Steve Havig, 2009 President of the Minneapolis Area Association of REALTORS®. “What the economy does in 2009 is the real wildcard, but the sooner this cycle runs its course, the sooner the housing market can return to some normalcy.”

New Listings
Lender-mediated home values are dropping quickly, while traditional homes are fairing better. The median sales price of lender-mediated homes in Q4 2008 was $131,000, a drop of 19.1 percent from the same time last year. The median sales price for traditional homes was $221,000, a drop of a much quieter 2.6 percent.

Despite the fall in new supply from last quarter, 42.2 percent of new listings and 46.0 percent of closed sales during Q4 2008 were lender-mediated. This is an increase from the same quarter last year, due in part to declining activity in the traditional market.

Edina Realty Mortgage

2009-01-28T05:52:00.000-08:00

An Important Message from Todd Johnson,President and CEO of Edina Realty Mortgage

To Our Customers,

The dramatic events taking place in the financial services industry and economy are historic in scope and proportion. You may be asking yourself, “What does this mean for me as a home buyer or home seller? When I want to obtain a mortgage, will there be funds available?” The answer is simple: at Edina Realty Mortgage, it’s business as usual. Yes, we continue to originate mortgages for home purchases and refinances. Our wide product range features FHA, VA, MHFA, Conventional, Jumbo, Relocation, Renovation, and Reverse Mortgages. We are committed to helping as many customers as possible enjoy the personal and financial benefits of homeownership. We provide competitive, fully disclosed, and responsible and fair pricing for all borrowers.

A Solid, Stable and Secure Lender

We want to assure you that we remain a solid, stable, and secure mortgage lender. We are a well-capitalized company, and we hold fast to our long-standing responsible lending principles. Edina Realty was one of the first real estate companies to offer integrated mortgage services more than twenty-five years ago. For over ten years, Edina Realty Mortgage has been a joint venture between Wells Fargo Home Mortgage (a division of Wells Fargo Bank, N.A.) and HomeServices of America, a Berkshire Hathaway Affiliate. Wells Fargo Bank, N.A., is the only bank in the United States, and one of only two banks worldwide, to have the highest credit rating from both Moody’s Investors Services “AAA,” and Standard & Poor’s Rating Services, “AAA.”

We Are Committed to Your Successful Closing

We stand by our word. Our exclusive On-time Closing Guarantee (1) ensures that you will close on time AND for the amount quoted on the Good Faith Estimate, or you will get money back. Are you already working with another lender? We will be happy to review your Good Faith Estimate and Truth-in-Lending Disclosure Statement. This no-obligation second opinion from us takes just few minutes, and we may be able to provide reductions in interest and/or closing costs.

As a responsible lending leader, we work closely with our customers to help you reach your personal and financial goals through homeownership. Our team works hard to know you, understand your needs, and listen to you. We put you at the center of everything we do.

Thank you for trusting us with your business.

Todd JohnsonPresident and CEO

1. Available on all qualified purchase transactions. Other terms and conditions apply. See a Home Mortgage Consultant for details.
2. If you have a current lock-in agreement with another lender, this is not an inducement to transfer your loan.
All first mortgage products are provided by Homeservices Lending, LLC Series A dba Edina Realty Mortgage. Edina Realty Mortgage may not be available in your area. Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. ©2008 Edina Realty Mortgage. All Rights Reserved.

Homeowners Battle Rising Utility Costs

2008-11-18T13:20:00.000-08:00

Savvy homeowners are battling all-time-high energy costs by incorporating building techniques to make their homes more energy efficient. As more people begin to struggle to meet rising utility costs, these practices are expected to grow in popularity.

Just as current owners are renovating with energy savings in mind, new home builders are seeing increased demand for green buildings and energy-efficient homes.

Here are some ideas for how you can reduce your energy consumption – and costs – by selecting building materials and appliances that promise to improve your home’s energy efficiency.

Use Highly Rated Energy-Star Appliances: This is not a new idea, but as costs rise, buyers are looking at the yellow energy-consumption tags on new appliances more seriously. Retailers know that buyers are paying more attention to the higher-rated appliances, and this could lead to more advertising and discounts for such products.

Consider How You Heat Your Water: Most homes have a traditional tank-style water heater. However, with rising heating costs, this practice may change. Other options for heating water in your home include solar heating and tankless water heaters.
Solar water heating requires a significant upfront investment, but once it is installed you no longer need to pay for heating the water. Installation includes a pump, plumbing through which the water circulates for exposure to the sun, and possibly large glass tanks for storing the hot water.
A tankless water heater has no storage tank and the water is heated as you need it. Heating water on demand is much less expensive than heating water and storing it until it is needed.

Supplement Your Electricity: Installing photovoltaic roof shingles instead of standard asphalt shingles lets you use the sun’s energy to generate supplemental electricity for your home. A wire is pulled from each shingle and connected to the home’s power grid. You might not be able to generate enough electricity to meet all your needs, but with rising costs, every bit of savings can be a huge help to homeowners.
If you are considering a new roof or you are building a home, consider using this roofing material to decrease your utility bills.

Consider Your Home’s Placement: If your home was built 50 or more years ago, it probably is already more energy efficient than most new homes. This is because central air-conditioning was not prevalent in the past. To keep homes cool in the summer, windows were located strategically for cross-drafts. Also, the largest windows were designed to receive the morning sun, thereby helping to heat the home.
As energy prices declined, many homes were built without these considerations. However, today’s builders are beginning to return to traditional building practices in order to have more energy-efficient homes.

Consider Your Window Treatments: Whether you live in a new or old home, or are building your home, you can control your window treatments. What you put on your windows can make a serious different in your home’s heating and cooling costs. Light- and heat-filtering blinds and heavy draperies may significantly reduce the need for continuous air-conditioning.

Hopefully, this information has given you some ideas for countering rising energy costs. By using one or more of these suggestions, you can make your home more energy efficient. If you decide to sell your home in the future, these updates may make your home more attractive to buyers.

This is an excellent window cleaner that costs about a quarter per bottle. Use it with newspaper for a clean you won’t believe!

Window Cleaner Recipe (Compliments of Heloise)
12 to 16 ounces water
1/2 cup white or apple cider vinegar
1/4 cup rubbing alcohol (70%)
1-2 drops blue or green food coloring, if desired1-2 drops lavender, cinnamon, clove or orange essential oil.
Combine the ingredients and pour into a labeled spray bottle.
1. Spray the newspaper.
2. Wipe down the window to avoid drips.
3. Wipe one side of the window vertically, and the other horizontally, so you will know which side a streak is on!
This bottle of nice-smelling window cleaner can cost as little as 25 cents. The solution also works well on mirrors and glass shower doors.

Fire Safety!

2008-09-21T14:41:00.000-07:00

TAKE THE FIRE SAFETY QUIZ (answers at the bottom)!!
Fire Prevention Week Quiz
"It's Fire Prevention Week October 5 – October 11. Prevent Home Fires is the theme for 2008!"
Your home should be a safe haven. But do you regularly check for home fire hazards? If not, there is the potential for danger. Take this new Fire Prevention Week quiz and see how many questions you can answer correctly. Good luck!

1. The leading causes of home fire deaths are:
A. Cooking and heating.
B. Cooking and electrical.
C. Smoking and electrical.
D. Smoking and heating.

2. You should stay in the kitchen when you are:
A. Baking.
B. Frying.
C. Simmering.
D. Steaming.

3. Most heating fire deaths are caused by:
A. Chimneys.
B. Furnaces.
C. Space heaters.
D. Wood stoves.

4. You should never smoke in a home with:
A. Gas heat.
B. Older adults.
C. Oxygen in use.
D. Paper clutter.

5. When you leave a room in which there is a candle burning you should?
A. Blow out the candle.
B. Move the candle away from anything that can burn.
C. Take children and pets with you.
D. Check the candle frequently.

6. Smoke alarms should be replaced every?
A. 5 years.
B. 10 years.
C. 15 years.
D. 20 years.

7. Smoke alarms should be placed in?
A. Bedrooms, outside sleeping areas and kitchens.
B. Bedrooms, outside sleeping areas and on every level of the home.
C. Kitchens, outside sleeping areas and on every level of the home.
D. Outside sleeping areas and on every level of the home including the attic.

8. Space heaters should be how many feet from things that can burn?
A. 1
B. 2
C. 3
D. 4

9. To prevent electrical shocks in the bathroom you should have?
A. Arc Fault Circuit Interrupters.
B. Circuit Breakers.
C. Ground Fault Circuit Interrupters.
D. Tamper Resistant Receptacles.

10. You should call a professional electrician when?
A. Your circuit breaker trips.
B. You lose your electricity.
C. You purchase a home.
D. Your outlets are warm.

11. A home fire escape plan must show?
A. Two fire escapes from each level and an outside meeting place.
B. Two outside meeting places and the fire department phone number.
C. Two ways out of the home and an outside meeting place.
D. Two ways out of each room and an outside meeting place.

12. If there are smokers in your home, they should smoke
A. In the kitchen.
B. In the basement.
C. In the garage.
D. Outside the home.

13. Extension cords should be
A. Used only if it has the label of a recognized testing laboratory and following instructions provided.
B. Secured under furniture so it is out of the way.
C. Placed under a carpet so it doesn't get damaged.
D. All of the above.

14. Heating equipment should be inspected
A. Every year.
B. When you move into a house.
C. When it's not working properly.
D. All of the above.

15. If the oil catches fire in a pan while cooking, you should?
A. Carry the pan to the sink.
B. Put the fire out with baking soda and turn the burner off.
C. Throw water on the pan and turn the burner off.
D. Slide a lid over the pan and turn off the burner off.

ANSWERS:
1. Smoking and heating
2. Frying
3. Space heaters
4. Oxygen in use
5. Blow out the candle
6. 10 years
7. Bedrooms, outside sleeping areas and on every level of the home
8. 3
9. Ground Fault Circuit Interrupters
10. Your outlets are warm
11. Two ways out of each room and an outside meeting place
12. Outside the home
13. Used only if it has the label of a recognized testing laboratory and following instructions provided
14. All of the above
15. Slide a lid over the pan and turn off the burner off

Looking To Sell?

2008-09-03T19:37:00.000-07:00

Here are some tips to get your home ready!

Fence:
Replace missing slats, stakes and posts.
Repair broken hinges and paint or stain the fence if necessary.

Yard:
Mow, trim and fertilize lawn.
Weed flower beds and replace dead plants and trees.
Driveway and garage:
Clean up grease or oil spots on concrete surfaces.
Make sure the garage door opens freely and the automatic door opener is working.
Provide an unobstructed view of your home from the street by not parking cars, boats or other vehicles in the driveway.

Front Entry:
Polish door handles and door knockers.
Replace worn or broken items, such as an unsightly mailbox or rusty doorbell.
Be sure porch lights are working and add welcoming features such as a new door mat and flowering plants.

Siding and Trim:
Consider painting the highlight features of your homes, such as trim work, shutters, gutters, down spouts and railings.
If necessary, add a fresh coat of exterior paint to the siding.

Roof:
Remove debris such as tree branches and leaves.
Make any necessary repairs to worn shingles or cracked surfaces.

Patio and Deck:
Flowering plants and outdoor furniture add appeal.
Remove any unnecessary items such as gardening equipment.
Tidy any visible items, such as an outdoor grill or barbeque.

Doors and Windows:
Consider adding a fresh coat of paint to your front door.
Polish brass fixtures and be sure door locks work properly.
Oil hinges to both doors and windows.
Keep stairways tidy and secure handrails.
Repair or replace bent or damaged screens and window glass.
Cut back outdoor plants that restrict natural light.
Keep windows clean and tidy with draperies firmly affixed and in proper working order.
Repair or replace missing or damaged tile, hardwood, vinyl and baseboards.
Steam-clean or shampoo carpets.
Secure loose carpeting and replace damaged areas.
Be conscious of odors caused by dampness, high-traffic areas or pets.

Closets and Storage Areas:
Ample storage space increases the desirability of the home.
Keep closets tidy.
Discard any unnecessary items and consider storing those things you do not use frequently.
Remember that less is more!
Bedrooms and Living Areas:
Keep living areas clean and inviting.
Arrange furniture to allow a spacious at atmosphere.
Make beds, arrange couch cushions, dust shelves, vacuum carpets and touch up walls with paint or spackling as necessary.
Wallpaper should be clean and adhere smoothly to walls.
Finishing touches such as flowers or candles add to the home’s appeal.
Remember that less is more!

Kitchens and Bathrooms:
Clear counters, drawers and cabinets of unnecessary items.
Clean soap dishes, mirrors, faucets, and appliances (inside and out).
Store cleaning supplies and hang freshly washed towels.
Be aware of and eliminate odors caused by dampness and hampers.
Remember that less is more!

Counters and Cabinets:
Store infrequently used counter-top items to allow a spacious look in the kitchen and bathroom.
Keep drawers and cabinets tidy and organized.

Garage and Workshop:
Items should be neatly stored in the shelving or wall units.
Allow appropriate space for the home buyer to visualize their vehicle or workbench.
Consider moving excess or over-sized items to mini storage.

First Time Home Buyer Tax Credit

2008-08-14T18:28:00.000-07:00

The $7,500 First-Time Home Buyer Tax Credit for homes purchased April 9, 2008 - June 30, 2009.

What is the First-Time Home Buyer Tax Credit?
The Tax Credit is part of the Housing and Economic Recovery Act of 2008, signed into law on July 30, 2008. The intent of the tax credit is two fold:
• To provide a financial resource for home buyers in the year that they purchase a home
• To provide a stimulus to the housing market and the economy, helping to stabilize home prices and increase home sales.

The law provides a tax credit equal to ten percent of the qualified home purchase price. The credit is capped at $7,500.

The credit is essentially an interest-free loan. Home buyers are required to repay the credit to the government, without interest, over 15 years in equal installments or when they sell the house.

Who is Eligible?
• First-time home buyers, defined as a buyer who has not owned a principal residence in the previous three years
• U.S. citizens who file tax returns
• Eligible properties include any single family home that will be used as a principal residence (including condos and co-ops)
• To qualify, buyers must close on the sale of the home between April 9, 2008 and June 30, 2009

Income Limits
• The full $7,500 credit is available for individuals with modified adjusted gross income (per IRS definition) of no more than $75,000 ($150,000 for couples filing jointly)
• A partial credit is available for individuals with modified adjusted gross income between $75,000 and $95,000 (between $150,000 and $170,000 for couples filing jointly)

Is the Tax Credit “Refundable?
• Yes. The credit reduces the income tax liability for the year of purchase
• The credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even
all of the amount of the refundable tax credit

Payback Provisions
• Home buyers claiming a $7,500 credit would repay the credit at $500 per year via their tax returns. They do not have to begin repayments until two years after the credit was claimed
• If the home owner sells the home, the remaining credit would be due from the profit of the home sale
• If there is insufficient profit from the sale, the remaining credit payback would be forgiven

The Twin Cities is Clean....

2008-08-04T20:22:00.000-07:00

Thanks to Renee Erickson of Bloomington, MN for the following tidbit!

Forbes ranked Mpls/St. Paul as the 9th cleanest city in America!

9: Minneapolis-St. Paul, Minn.
The Twin Cities rank first among major metros for healthy ozone levels, which counters so-so rankings for waste removal spending and water quality.

What The New Housing Law Means For You..

2008-08-01T12:22:00.000-07:00

Thank you Leslie Swimms from Dallas GA, for the following article!

The housing rescue bill, signed into law July 30, 2008, is full of goodies and not-so-goodies for homeowners and those who aspire to be homeowners. Here are some highlights.

First-time homeowner tax credit-The law will extend a tax credit of up to $7,500 to first-time homebuyers. A first-time homebuyer is defined as someone who hasn't owned a home in three years. The tax credit is for 10 percent of the purchase price, up to $7,500, but phases out for higher-income homeowners. Homeowners are eligible for the tax credit if they bought after April 8 of this year and before July 1, 2009. This is a tax credit, not a deduction. It reduces the homeowners' tax bill by up to $7,500 for the tax year in which the purchase was made. If you buy a house this year, you get the tax credit for the 2008 tax year -- the one with a filing deadline of April 15, 2009. If you buy a house next year by the end of June, you get the tax credit for the 2009 tax year. It's a one-time credit; you don't get to keep taking it year after year. There is a catch, and that is that the money has to be repaid over 15 years, starting two years after you buy the house. That makes the tax credit an interest-free loan. If you take the full $7,500 tax credit, your income tax bill will increase by $500 a year for 15 years. If you sell the house before then, you'll have to pay Uncle Sam the remaining balance. Complex issues, such as divorce, death, sale of the house at a loss and conversion of the house into a vacation home are accounted for in the law.

Forgiveness to allow refinancing into FHA- A lot of people have fallen behind on their mortgage payments after the rates went up on their adjustable-rate mortgages, or ARMs. And they can't refinance into fixed-rate loans because their homes have lost value, and they owe more than their houses are worth. The housing rescue law seeks to help these people get out of trouble. It encourages lenders to forgive some of their debt so they can refinance at lower amounts into mortgages insured by the Federal Housing Administration, or FHA. It works like this: The lender has to forgive all the debt above 90 percent of the home's current appraised value. If that leaves you scratching your head, here is a hypothetical example, using round numbers: Sometime before Jan. 1 this year, you bought a house for $125,000 and got an ARM for $110,000 after making a $15,000 down payment. But the house lost value. Now it's worth $100,000, based on an appraisal. Meanwhile, the ARM's rate went up and you can't afford the full payment every month. Under this law, the lender would forgive everything you owe above $90,000. Let's say that you owe $105,000 of that original $110,000 loan. The lender would forgive $15,000, and let you pay off the loan for $90,000. The lender would not be allowed to seek any of that $15,000 later. That allows you to find another lender who would underwrite a $90,000 mortgage to be insured by the FHA. That loan amount would include the upfront FHA insurance premium of roughly $2,700. Again, there is a catch. If you take refuge in this program, you'll have to share your home-price appreciation with the FHA. If you sell the house (or refinance the loan) less than a year after refinancing into the FHA loan, the FHA gets all of the house price appreciation. The FHA's cut decreases over the next five years -- but never goes below 50 percent. What does this mean to the borrower? Take the example above. You refinanced when the house was appraised at $100,000. A little over two years later, you sell the house for $120,000. You split that $20,000 difference with the FHA. In this case, because it's between two and three years later, the FHA gets 80 percent. The FHA would get $16,000 and you would get $4,000. The equity-sharing arrangement goes like this: If you refinance or sell less than a year after getting the FHA loan, the government gets 100 percent of the home price appreciation. If it's more than a year but less than two years, the FHA gets 90 percent. The FHA's cut then decreases by 10 percent until the five-year mark. Anytime after that, the FHA gets half of the appreciation, no matter how long you have the loan or own the house. This arrangement will encourage homeowners to keep their FHA-insured mortgages for at least five years, but to refinance before home prices zoom upward again.

Working with home equity debt- The government has been trying all year to encourage lenders to forgive debt so homeowners can refinance their loans for lesser amounts and remain in their houses. Lenders have been reluctant to forgive the debt. The FHA-refinance plan is another way of encouraging debt forgiveness. Among the sticking points: Many homeowners have home equity lines of credit or home equity loans. In most cases, these lenders will lose that entire loan balance under the FHA-refinance plan. The new law is low on specifics, but it gives the FHA permission to give second lienholders a cut of the home price appreciation proceeds that the FHA collects.

Down payment assistance soon to be a thing of the past- The new housing rescue law bans down payment assistance programs such as the ones offered by Nehemiah and AmeriDream. The ban goes into effect Oct. 1. Down payment assistance programs took advantage of a loophole in the way the FHA treats down payments. To get an FHA-insured mortgage, the homeowner has to make a down payment of at least 3 percent. Homeowners don't have to save even that much; the 3 percent can come as a gift from family members or nonprofit organizations. Regulations don't allow the home seller to provide the down payment money. That's where down payment assistance programs come in. They are nonprofits. That allows the seller to give the 3 percent down payment money to Nehemiah or AmeriDream, and then Nehemiah or AmeriDream can turn around and "give" the down payment to the homebuyer as a "donation." Fannie Mae and Freddie Mac don't allow sellers to indirectly give down payments to buyers. But the FHA has allowed this type of transaction for years. The FHA has long complained that down payment assistance programs artificially inflate house prices, and that loans using down payment assistance are more likely to default. But prominent congressional democrats have protected the down payment assistance programs on the grounds that they allow many minority families to become first-time homebuyers. House Democrats wanted to keep the loophole open, and Senate leaders wanted to close it. With this law, the Senate won.

Property tax deductions for all homeowners- Under current law, you can deduct your property taxes from federal income tax -- but only if you itemize deductions on Schedule A. That leaves out people who don't have enough deductions to warrant filling out Schedule A. They have to take the standard deduction -- and that means they can't deduct their property taxes.
The housing law changes that. For homeowners who pay property taxes, it increases the standard deduction by $500 for single filers and $1,000 for couples filing jointly. This will be a boon to people, such as retirees, who own their houses outright, and therefore don't pay any mortgage interest, so they can't itemize. You can't increase the standard deduction by more than the property-tax bill. So if you're married filing jointly and you pay $800 in property taxes, you get an $800 deduction, not a $1,000 deduction.

More regulations on reverse mortgages- A reverse mortgage is an advance against home equity. It's for homeowners age 62 or older, and the reverse mortgage doesn't have to be repaid until the borrowers die or move out. Because reverse mortgages are for elderly borrowers, there is concern that dishonest lenders and brokers take advantage of borrowers. Borrowers are required to get counseling first, to learn the pros and cons of reverse mortgages. The law will result in strengthened qualifications for counselors. The law bars insurance salesmen from originating reverse mortgages and prohibits originators from requiring homeowners to buy annuities or insurance products. (There's one big exception: The FHA insures reverse mortgages, and borrowers will buy that coverage.) Finally, the law limits origination fees on reverse mortgages. They can't exceed 2 percent of a reverse mortgage of up to $200,000. For a reverse mortgage amount above that, the limit is $4,000, plus 1 percent of the loan amount above $200,000. Origination fees can't exceed $6,000 in any case. In future years, this upper limit is indexed to inflation.

Veterans- Service members returning from active duty abroad will be given breaks, effective immediately now that the bill has been signed into law. Some protections apply to service members whose military obligations affect their ability to repay debts -- primarily, reservists and members of the National Guard who are called to active duty. They have to leave their jobs and, in many cases, take pay cuts. For these service members, there are protections having to do with foreclosures and interest rates. If a service member had a mortgage before entering active duty, a lender can't start foreclosure proceedings until nine months after the service member returns from active duty. Formerly, the protection period was 90 days. Also, when someone with a mortgage is called up to active duty, the interest rates on all previously existing debt are capped at 6 percent. That goes for mortgages -- and for home loans, that 6 percent cap extends until one year after the service member returns from active duty. The Defense Department will be required to provide foreclosure-prevention counseling upon request to service members who are returning from active duty abroad.

What Is A Reverse Mortgage?

2008-07-27T14:13:00.000-07:00

President Ronald W. Reagan signed the FHA Reverse Mortgage Legislation (S. 825) on February 5, 1988 and congress has been improving this program ever since. If you are a senior over 62 and own 35% or more of your home, you may be eligible to tap into your equity and pull funds for whatever your need is.

According to AARP 48% of all senior citizens (half!) are pulling funds from their retirement, savings, equity and other solutions to help their children during these struggling times.
The economy is in a recession, we're in a war, natural disasters, high gasoline prices etc... Most senior homeowners are looking for a solution to remedy the above problems. Fortunately, there are options. A reverse mortgage may be the right option for you. We have found that senior homeowners are using this equity strategy to utilize services such as:
Pay off existing mortgage(s)
Stop mortgage payments
Enhance lifestyle
Take a vacation(s)
Pay off credit card(s) or any debts
Repair/remodel home
Add extra monthly income
Pay for medication(s)
Stop a foreclosure
Help out a family member
Buy a recreation vehicle

Congress approved this program and it is FHA insured.

Fannie Mae and Freddie Mac

2008-07-23T10:53:00.000-07:00

Mortgage rates are rising because of the troubles at loan finance giants Fannie Mae and Freddie Mac, threatening to deal another blow to the faltering housing market.
Even as policymakers rushed to support the two companies, home-loan rates approached their highest levels in five years.

The average interest rate for 30-year fixed-rate mortgages rose to 6.71 percent on Tuesday, from 6.44 percent on Friday, according to HSH Associates, a publisher of consumer rates. The average rate for so-called jumbo loans, which cannot be sold to Fannie Mae and Freddie Mac, was 7.8 percent, the highest since December 2000.

Loan rates are rising because of concern in the financial markets about the future of Fannie and Freddie, which own or guarantee nearly half of the nation's $12 trillion mortgage market.
Worried about the companies' financial health, bond investors are driving up interest rates on their debt, and the added cost is being passed on to consumers through the mortgage markets. For a $400,000 loan, the increase in 30-year rates in the last few days would add $71 to a monthly bill, or $852 a year.

The rise in rates is of greatest concern for homeowners whose mortgages require them only to pay the interest due on their loans for the first few years. If such borrowers are unable to refinance into lower-cost loans, many of them will face the prospect of having to pay both interest and principal at higher, adjustable rates. For borrowers with a $400,000 loan, such a jump could send their monthly payments to $2,338 from $1,417, estimated Louis S. Barnes, a mortgage broker at Boulder West Financial in Boulder, Colo.

While mortgage rates approached those levels earlier this year and in 2007 during times of stress in the financial markets, the latest move adds urgency to the government's efforts to restore confidence in Fannie Mae and Freddie Mac. Lawmakers this week are expected to vote on a measure that would give the Treasury Department authority to lend more money to and buy shares in the companies if they falter.

The uncertainty surrounding the two companies is the latest in a series of pressures bearing down on the housing market and the broader economy. Higher interest rates make it harder and more expensive to refinance existing debts and buy homes.

"When we get to rate levels like this, the market just shuts down," Barnes said.
While mortgage rates remain relatively low by historical standards, they are higher than what homeowners and the economy became accustomed to during the recent housing boom. Lending standards have tightened significantly in the last 12 months, and many popular loans no longer are available.

A government report based on Fannie Mae and Freddie Mac loan data said on Tuesday that home prices fell 4.8 percent in May from a year earlier. That compared to a 4.6 percent decline in April. Other home price indexes that track a broader set of loans show much bigger declines.
Analysts say the rise in rates is a result of weaker demand for securities backed by home mortgages and of rising concern about inflation, which tends to send bond prices down and bond rates up.

In a securities filing released on Friday, Freddie Mac suggested that it might have to reduce or slow the growth of its mortgage portfolio to bolster its capital.

Freddie and Fannie together own about $1.5 trillion in mortgage securities and home loans, and they guarantee another $3.7 trillion in securities held by other investors. The companies have a combined net worth of $55 billion as of March. Analysts and critics say the companies need significantly more capital to cushion the blow of growing losses on the more-risky mortgages made during the recent boom.

Five Reasons To Hire An Agent...

2008-07-19T10:12:00.000-07:00

Selling your home is a daunting task full of potential blunders for a novice. Here’s why an agent is worth the commission.

Judy Moore of Re/Max Landmark Realtors in Lexington, Mass., says that today's topsy-turvy housing market is just too treacherous to go it alone. She offered five reasons why homeowners are better off selling their property with an agent:

1. Employ an expert: A typical property owner does not have anywhere near the home-selling experience of a real-estate agent. Agents can recommend relatively simple improvements — painting, repairing, decluttering — that can help a home sell faster and for a better price. "The Realtor is the neighborhood expert," Moore says. "We can walk through a property and see right away what needs to be done to [get the home sold]." Independent sellers might not be aware of these tricks of the trade.

2. Use better tools: Homeowners using agents can get their property listed on Realtor.com, "which has more far-reaching access to market that property — with over 3 million properties on it — than the for-sale-by-owner sites, which have tens of thousands," Moore says. Independent sellers do not have access to this service. (Realtor.com is an MSN Real Estate partner.)

3. Sidestep lawsuits: Agents can also protect sellers from potential litigation. "There are all kinds of liability issues that a seller could potentially face when ... dealing one-on-one with a buyer," Moore says. A homeowner could, for example, tell a potential buyer that hardwood floors extend to all corners of the house underneath the wall-to-wall carpeting. But if even one room has concrete flooring, the homeowner could be sued, Moore says. Agents, who have experience dealing with these liability issues, can help homeowners dodge such scenarios.

4. Duck the riffraff: Independent sellers might not have any idea whom they are letting into their homes during open houses. These potential buyers might not have the credit to make the purchase — and would therefore be wasting the home owner's time — or could even "try to rob them later on," Moore says. "It's a very scary kind of thing." She says that homeowners working with agents will have qualified buyers visiting their properties.

5. Avoid hardball tactics: It's a buyer's market out there. And with all the information available online, today's well-informed buyers are tough negotiators. Real-estate agents have been through the home-selling process before and are trained in negotiating tactics, giving them a potential edge in hammering out a deal in the seller's best interest. "It's hard to do that with your own property, particularly if you are not a professional," Moore says.

article courtesy of msn.com