Posts Tagged ‘Financing’
Posted by tblefko on November 6, 2009
The Lancaster County Association of REALTORS® Government Affairs Department, headed up by Frank Christoffel, IV, passed this Q&A along regarding the latest information on the potential extension of the homebuyer tax credit which includes an existing homebuyer credit that was not part of the first bill.
The House of Representatives passed the extension yesterday by a vote of 403-12 after passing the Senate the previous night 98-0. The new provisions will take effect as soon as President Obama signs the bill.
Here are some of the specifics regarding eligibility requirements:
1. Existing homeowner credit: Must the new house cost more than the old house?
No. Thus, for example, individuals who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6500 credit.
2. I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit?
Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.
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Posted in Agents, Buyers, Consumers, Financing, Legislation, Sellers | Tagged: Agents, Barack Obama, Buyers, FAQ, Financing, Lancaster County Association of REALTORS, National Association of REALTORS, Obama, Sellers, Tax credit, U.S. Housing Market, United States Senate | 2 Comments »
Posted by tblefko on July 12, 2009
Image courtesy of Flickr
The real estate industry has been operating under the new HVCC guidelines for a couple of weeks now and we are beginning to see the ugly results of this misguided set of government regulations. In a preliminary report issued this past week by the National Association of REALTORS® (NAR), it finds that the HVCC is having an adverse impact on housing markets.
Before I get into the actual results, let me spend a minute and tell you about what this new set of guidelines was supposed to do.
The HVCC was intended to promote independence in the appraisal process and, thus, help ensure that appraisers and the appraisal process may be relied upon as part of sound underwriting for financial institutions. What that actually means is that the loan officer who is working on your loan no longer orders the appraisal on your home. It is done through the lender who either has an in-house process for appraisal management issues or, more often, it is done through something called an Appraisal Management Company (AMC).
While this may not seem like a big change to you if you are buying a home, it can possibly be a much bigger change than you might think. Prior to May 1, loan officers, REALTORS® and appraisers all communicated as needed regarding your home and home financing and it wasn’t uncommon for everyone to be on the same conference call if needed. But now that the HVCC rules are in place, the only way the loan officer or REALTOR® will know who the appraiser is is if by chance the appraiser calls them. In other words, no one talks to anyone to clarify anything!
Now, on to the findings of NAR’s analysis:
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Posted in Agents, Buyers, Financing, Legislation, Sellers | Tagged: Agents, Appraisal, Appraiser, Buyers, Financing, HVCC, National Association of REALTORS, Property Values, Reports, Sellers, Statistics | Leave a Comment »
Posted by tblefko on July 10, 2009
The gap between the 2008 and 2009 real estate markets in Lancaster County is down to a razor’s edge. On Wednesday of this week, the front page of the Intelligencer Journal ran the following story:
Market Here For Housing Gets Better ¹
Numbers for pending home sales improve
The housing market in Lancaster County continued to rebound in May, creeping ever closer to 2008′s level, local Realtors reported Tuesday.
The number of pending home sales here was down only 2.5 percent from the May 2008 figure, the smallest gap so far this year, according to the Lancaster County Association of Realtors.
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Posted in Lancaster, Market Conditions | Tagged: Agents, Buyers, Financing, Intelligencer Journal, Lancaster County, Lancaster County Association of REALTORS, Mortgage, National Association of REALTORS, Newspapers, Property Values, Statistics, U.S. Housing Market | Leave a Comment »
Posted by tblefko on July 1, 2009
Photo courtesy of Flickr
In a report released today by the National Association of REALTORS® (NAR), the Pending Home Sales Index advanced for a fourth month in a row. Granted, the increase was only 0.1% from April to May, but it was still good news. In addition, the index continued a four month positive trend which is the first time that has happened in nearly five years. On an even brighter note, the index rose a whopping 6.7% when you compare it to May of last year.
We do need to temper our enthusiasm; however, because a rise in sales contracts may not yield a like increase in completed sales. Lawrence Yun, NAR’s chief economist said, “Closed existing-home sales have improved but are coming in lower than expected because some contracts are delayed or falling through from the application of new appraisal rules for many transactions.”
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Posted in Buyers, Financing, Market Conditions, Sellers | Tagged: Appraisals, Financing, Foreclosures, Housing Affordability Index, Lawrence Yun, National Association of REALTORS, Pending Home Sales Index, Property Values | Leave a Comment »
Posted by tblefko on May 11, 2009
Image courtesy of Flickr
The typical homeowner wants to get the most money for their home when it comes time to sell. That’s just human nature. So the natural inclination is for them to price their home for sale above their home’s true market value so as not to leave any money on the table. Seems like a wise move on the seller’s part; however, this strategy is loaded with pitfalls that will actually lead to less greenbacks in their back pocket.
Keep in mind that the seller of real estate does not determine what it actually sells for – - – buyers do (see my previous post). So with that in mind, let me review the dangers associated with overpricing a home when it is put on the market for sale.
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Posted in Agents, Financing, Sellers | Tagged: Agents, Financing, Property Values, Sellers | Leave a Comment »
Posted by tblefko on May 3, 2009
Image courtesy of Flickr
If you take a moment and peer up into the sky you will actually see that we are at the crossroads of a real estate buying opportunity like we haven’t seen in my lifetime. All the factors that go into making a real estate buying decision are perfectly configured. But like most perfect planetary alignments, clouds and precipitation sometime make it difficult to see this truly amazing sight and before you know it, the moment has passed. The four planets that I see aligning are as follows:
1. Mortgage Financing - If you’re like most people, you will need a mortgage to assist you in purchasing a home. Interest rates right now are the lowest that they have been in decades (see ‘Mortgage Info’ tab). When I first got into the real estate business over twenty-five years ago, the 30 year fixed rate was about 17% (this is not a misprint). To put that in easier terms to understand, a principal and interest payment on a $150,000 mortgage then was $2,138 – - – now $805. Hopefully, President Obama’s programs and endeavors will start to have some positive effects on the economic growth in this country. When that happens and consumer spending starts to pick up, what do you think will happen to interest rates? I was not an Economics major in college, but even I can figure out that rates will tick up because of inflationary fears. So if you have good credit, money to work with and an income that can be verified, there has never been a better time to get a mortgage.
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Posted in Buyers, Financing, Lancaster, Market Conditions, Sellers | Tagged: Buyers, FICO Score, Financing, Lancaster County, National Association of REALTORS, Obama, Property Values, Sellers, Statistics | Leave a Comment »
Posted by tblefko on April 18, 2009
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Most of our elected government officials right now are scrambling around trying to fix Humpty-Dumpty because he fell off the “Housing” wall and is supposedly shattered in a thousand pieces. All the kings horses and all the kings men are trying to put the pieces back together again. But what if Humpty-Dumpty doesn’t need fixing? What if all he has is a bad cold that will run its course regardless of the medicine that is administered? Essentially, that is what
Todd Zywicki, a law professor at George Mason University, is saying. Zywicki has done extensive research on the subject of bankruptcy and foreclosure and has appeared before Congress as an expert witness to testify on the subject.
In a recent
article* that appeared on Forbes.com, Zywicki takes serious umbrage with the way President Obama and his administration is handling the housing situation in this country. Obama has recently referred to the housing situation as a “crisis” that is “unraveling home ownership, the middle class and the American Dream itself.” Zywicki’s assertion is that this just isn’t the case. Before you unload on me and say that I’m just another conservative (I am) Republican (I am) wack-job (questionable) trying to drag down our country and the Democrats, consider this – - – I voted for him.
Zywicki’s research indicates that different parts of the country experience different sets of problems when it comes to real estate. In other words, one size doesn’t fit all which is essentially what he argues the Obama Administration is trying to do with its housing policy. Zywicki points to three distinct types of housing markets that exist today:
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Posted in Financing, Lancaster, Market Conditions | Tagged: Financing, Foreclosures, Lancaster County, Obama, Property Values, Statistics, Web Sites | Leave a Comment »
Posted by tblefko on March 19, 2009
The following article has been reproduced in it’s entirety from Lancaster City Living, a popular website promoting the benefits of living in Lancaster City. After you’re done reading the article, explore the website where you’ll find a brief history of the Red Rose City and the many attributes that set it apart from other cities in the Keystone State and the US.
- – - – - – - – - – -
CITY HOME PURCHASES GET BOOST OF $5K *
Buyers now eligible for federal help on closing costs, down payments.
Buying a first city home just got a little easier for low- to moderate-income residents.
First-time homebuyers in the city will now have access to a pool of $350,000 in assistance for down payment and closing costs through the Lancaster Housing Opportunity Partnership.
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Posted in Buyers, Financing, Lancaster | Tagged: Agents, Buyers, Financing, Lancaster City, Web Sites | Leave a Comment »
Posted by tblefko on March 14, 2009
Image courtesy of Flickr
Before I even begin to talk about short sales, a word of warning; these transactions are extremely complicated and time-consuming. No homeowner should try to do one without the help of a good real estate attorney and an experienced REALTOR®. To do otherwise, would be like walking a tightrope without a net – - – you may get to your destination but one small misstep and you’ll end up flattened like a pancake.
Let’s start with a definition: A short sale occurs when the price that can be obtained for a home when it is sold is less than what is remaining on the mortgage which will cause the lender to be “shorted” what they are due. Usually the events that lead up to the need to consider a short sale are:
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Posted in Agents, Buyers, Financing, Market Conditions, Sellers | Tagged: Buyers, Financing, Foreclosures, Property Values, Sellers, Short Sale | 2 Comments »
Posted by tblefko on February 19, 2009
Image Courtesy of Flickr
If you’re like me, you’ve had it up to here (place hand over head exactly 1’7″) with all the talk about the “stimulus package.” There was a House version, a Senate version, a Republican version, a Democratic version, the Auto manufacturers’ version, the State Governor’s version, the Sesame Street version, etc. etc. If you want to read the entire piece of legislation that finally got signed by President Obama known as “The American Recovery and Reinvestment Act of 2009″more power to you. Most people though just want to know how it impacts them in their personal and professional lives. Because you are reading a real estate related blog, I will assume that you have interest in just the portions of this legislation dealing with real estate so I will limit my review to those provisions. Grab a cup of coffee – - – here we go!
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Posted in Legislation, Market Conditions | Tagged: Fannie Mae, Financing, Foreclosures, Freddie Mac, Investment Properties, Mortgage Interest Deductability, Obama, Real Estate Taxes, Stimulus Package, Taxes, Web Sites | Leave a Comment »
Posted by tblefko on February 11, 2009
Second in a series of three posts on the financial impact of buying and selling real estate in a softening market. You may want to read my first post before you read this one.
Image courtesy of Flickr
(NOTE: Just like with the first post in this series, you will have to do some math, so if working with numbers makes your head explode, you may want to read one of my other blog posts.)
These scenarios are based upon a real estate market which begins to overheat (i.e. appreciation rate goes from 4% to 12% in four years), rapidly declines (i.e. appreciation rate goes from 12% to -6% in three years), then steadily climbs back to normal (i.e. appreciation rate goes from -6% to 4% in three years).
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Posted in Buyers, Financing, Market Conditions, Sellers | Tagged: Buyers, Charts, Financing, Property Values, Sellers | Leave a Comment »
Posted by tblefko on January 25, 2009
Image courtesy of Flickr
Lenders everywhere are paying more attention to your FICO® credit score than ever before. But I hear from clients all the time, “What is a FICO® score?” Let me take a minute to try and demystify this funny-sounding term and why it is so important.
The acronym, FICO, stands for “Fair Isaac Corporation.” This company was founded in the 1950′s by two guys with the last name of “Fair” and “Isaac” who developed a formula that measured an individual’s credit risk. The formula generates a credit score based upon information that is used from a consumer’s credit file. The score can vary between 300 (you’ve got no shot at buying that car) to 850 (you’re good as gold). This score is used by banks and credit providers in their decision to extend or deny credit, charge a higher interest rate, demand more collateral, or require extensive income and asset verification. In other words, it will determine how much they put you through the wringer.
Like the recipe for the Colonel’s Kentucky Fried Chicken, the formula to determine a consumer’s FICO® score is a closely guarded secret. However, the Fair Isaac Corporation has disclosed the following components of the formula and the approximate weighted contribution of each:
• 35% – punctuality of payments in the past (only includes payments later than 30 days past due)
• 30% – the amount of debt, expressed as the ratio of current revolving debt (credit card balances, etc.) to total available revolving credit (credit limits)
• 15% – length of credit history
• 10% – types of credit used (installment, revolving, consumer finance)
• 10% – recent search for credit and/or amount of credit obtained recently
As a result of the Fair and Accurate Credit Transactions Act of 2003, each legal U.S. resident is entitled to one free copy of his or her credit report every twelve months. This information is available at the only government-mandated credit reporting agency-operated website, annualcreditreport.com.
How do you make your FICO® credit score better? The website, myfico.com, offers ways to improve your overall score. It’s important to note though that raising your FICO® credit score is a bit like losing weight, it takes time and there is no quick fix. In fact, quick-fix efforts can backfire. The best advice is to manage credit responsibly over time.
Do yourself a favor, before you step one foot inside of an open house, know your FICO® credit score. You’ll sleep better at night.
Posted in Buyers, Financing | Tagged: Buyers, Credit Reports, FICO Score, Financing, Web Sites | Leave a Comment »
Posted by tblefko on January 19, 2009
Image courtesy of Flickr
Let’s face it - negative news sells! Very seldom are headlines written by the media that have to do with positive things that happen in our society. The real estate foreclosure situation is another event in a long line of stories that the media is sensationalizing to sell their product. The problem is that consumers are actually buying into what the media is spewing forth as the next coming of the Black Plague.
Before I get too far into this post, I want to make two things very clear. The first is that I want to disclose up front that I’m a real estate broker who makes his living listing and selling real estate. I have a biased interest in promoting my product. Secondly, I don’t want to make light of the fact that foreclosures are a terrible thing. When a person loses their job or some catastrophic event occurs in their lives that prevents them from paying their mortgage, my heart goes out to them. Now that my cards are on the table for all to see, let me hop up on my soapbox for a minute.
Real estate foreclosures across this nation are up. There – I said it. I agree with the media. According to the latest statistics compiled by Realty Trac, a well-respected web site that tracks real estate foreclosures, they are up nationwide in November of 2008, 28.9% from the previous year. As a consumer, if I heard that figure, it would cause me to sit up and take notice. But what the media fails to point out are ALL the figures behind the increase. When Realty Trac crunched their numbers for Pennsylvania, they calculated that .073% of households were involved in the foreclosure process at the end of November 2008 (No - I didn’t put my decimal in the wrong place). Put another way, that’s about 1 out of every 1,300 households in the Commonwealth. Do these numbers indicate that foreclosures are up in our state? Absolutely. But does this in any way sound like a financial epidemic of epic proportions? There is no question that some areas of the country have been hit harder than others, but Pennsylvania is just not one of them. In fact, Realty Trac has determined that only 5 states (California, Florida, Michigan, Nevada and Arizona) account for close to 60% of all foreclosure activity. As mentioned previously, real estate foreclosures are not pretty. But what is disconcerting to those of us in the real estate business is that the mass media is proclaiming that foreclosures are running rampant when in fact, especially in Pennsylvania, that just isn’t the case.
Posted in Financing, Market Conditions | Tagged: Buyers, Financing, Foreclosures, Media, Sellers, Web Sites | 1 Comment »
