Monthly Archives: June 2010

Buying A House

Is it a Good Time to Buy a House?

Is it a Good Time to Buy a House?

It’s a constant question now in the real estate market: Is it a good time to buy a house? Of course it is difficult to answer in an article since you may be reading this years after it is written, when conditions have changed. But whenever you find this article, the following three crucial factors are what you’ll want to look at to answer the question for yourself.

Home Values

At the moment, the first thing most people are wondering when they ask if it’s a good time to buy a house, is whether prices have finally stopped falling. Since a home is seen as an investment of sorts, we all like the idea of buying when values are rising. I am writing this in early 2009, and no, home values not only are not rising in most areas, but they don’t seem to have stopped falling.

We just bought a home anyhow, and there are several reasons why we felt comfortable doing so. The first is that prices don’t seem to be falling much in our area (Canon City, Colorado). Apart from the various foreclosures that are dragging prices down a bit, the market here is much more stable than in other parts of the country. A stable job base and the fact that prices never rose too far too fast during the “boom times” helps.

The real estate market does not act the same everywhere in the country. So to see if a bottom is near or if prices are rising, pay close attention to what is happening where you are. On the other hand, we did not buy counting on rising prices, because that is not the only determining factor. In fact, it is possible that the problems in the country will get worse and drive prices down 10% or 15% even here. So what else made us decide that for us it was a good time to buy a house?

Interest Rates

At the moment you can get fixed rate 30-year mortgage loans at about the lowest interest rate in your lifetime (no matter how old you are). Our own rate is 4.5%. That’s not a variable or “teaser rate.” It is fixed for the thirty years of the loan.

Let’s look at why this matters so much – as long as you plan to stay in the house for a while, as we do. Suppose you pass on a house that is selling for 0,000 and waited a couple years while prices fall another 10%. But suppose that at that time interest rates were up around 7.5%. You buy the house for 0,000. The payment (assuming you have a 10% down payment and borrow 2,000) is ,132 each month for principal and interest.

But what if you had bought at 0,000 and put 10% down? Then your payment on the 0,000 loan would have been 2. That’s right, you would be paying 0 more each month if you waited and bought at the lower price. That amounts to ,200 more that you would pay over the thirty years if you stayed in the house that long (,200 more in payments, but you saved ,000 on the down payment). This demonstrates the importance of the interest rate in determining your true cost.

Personal Situation

Is it a good time to buy a house, then? That depends not only on prices and their direction, and not just on interest rates, but on where you are financially. How secure is your income? If you lost your job, could you make the house payments for six months while you looked for another? Can you count on finding another job that will provide enough income to pay for the house? Are you going to be staying in the area long enough to justify buying (renting can often make more sense if you will be moving within a few years)? These are the more difficult questions to answer, but perhaps the most important in determining if it is a good time for YOU to buy a house.

First Time Home Buyer Programs

Copyright Steve Gillman. For more on whether this is a good time to Buy a House, and for a free real estate investing course and ebook on how to buy cheap homes, visit: http://www.HousesUnderFiftyThousand.com

If you are thinking of selling your home, The Guardian Realty Center produces high definition video to sell your home fast on the internet. If you are thinking of buying a home you must remember the home is only a small portion of your decision . It is important to remember you are also buying a neighborhood and a school district. …We have other town videos running for your convenience…Call us if you would like to go out and see homes in Putnam Valley. The Guardian Realty Center is located at 160 Bryant Pond Rd, Mahopac NY…Call us at 845-661-1339 or visit the website: www.guardianrc.com
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Mortgage Finance

Mortgages and Interest Rates Revised | WAHomeowners.com

Follow the adventures of Bob and Sally as they learn about mortgages and interest rates in their home buying journey.
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Buying A House

How to Buy a House

How to Buy a House

There has been a lot written about the mechanics of how to buy a house. You get prequalified for a loan, then perhaps preapproved, and then you look for a home, make an offer, have inspections done and so on. Many people can help you through the process. But what if you can’t get preapproved? What if you have little income, bad credit or other serious problems that prevent you from buying a home?

Mortgage loan requirements are being toughened up again now. Once again you might even need a down payment to get a loan. A bad credit rating no longer just means paying a higher interest rate – it can actually exclude you from obtaining a mortgage loan. But there still is hope. Let’s look at how to buy a house when it doesn’t seem quite possible.

How To Buy A House With Bad Credit

To begin with, if it is a slight credit problem, you may still be able to get a traditional loan. There are several ways to do this. The first is to correct any errors on your credit report, and challenge any entries you disagree with. You have a legal right to do this. Once changes are reflected in your credit score, you may be able to apply again and get a mortgage loan.

The other way is to go to local lenders which hold their own loans. Ask around to see which ones do this. Most lenders sell the loans they make, and so these loans have to meet the requirements of the secondary market. If they keep some loans “in house” they are not necessarily bound by rules or requirements other than those they have for themselves.

You can also buy a house with another person. Many people think that this is only for married couples, but any two people can buy a home together, and the lender will look at both credit histories to determine eligibility. It can be risky to buy a house with a friend, but sometimes it works out better for both compared to renting. If you had a down payment, for example, and he had good credit, you might help each other out, and sell the home five years later to recover your down payment and the respective shares of the equity you build.

You also can look to seller financing as a way to buy when you can’t get a loan. I have seen homes sold without credit checks and with nothing down by sellers who financed the deals. The usual motivation for them to do this is to get a higher price and /or to sell a problem property, but it still can sometimes be a good opportunity for a buyer. Even if sellers don’t offer terms, if you know they own their houses free and clear you can make offers that involve making payments to them rather than getting a loan to cash them out. Make it decent offer if you want it accepted, of course.

How To Buy A House When You Have No Money

If cash is your problem, you can start by making high offers on those houses that might be sold with zero-down seller financing, as suggested above. Teaming up and buying a home with a friend who has a down payment is another possibility. There are even a few mortgage lenders out there who are still offering zero-down loans. Check around.

One way that no one seems to like much is to save the money for a down payment. This means putting off owning a home for a while, but that may be a good thing at times. For example, in some areas in 2005 it cost 0 more per month to buy a house than to rent an apartment of similar area. Suppose you could have afforded the house, but had no down payment. You could have banked the 0 you were saving by renting each month, and three years later you would have about ,000 for a down payment. Meanwhile home prices fell.

What if your problem isn’t just a lack of cash, but also low income? Then maybe this isn’t the right time for you to buy a house. This is especially true where the cost of buying is significantly higher than the cost of renting. On the other hand, if it will cost you about the same each month to buy as to rent, try everything above to get into a home. You’ll be better off in the long run.

You might want to consider cheaper options than the usual starter homes. My first home was a mobile home on a small lot, for example. It cost less than ,000 and I sold it for ,000 years later. The monthly payment? 7. That certainly beat renting, and you can see that the idea some have about mobile homes not appreciating is just plain wrong (the land is where the value is, of course).

There are other ways to buy a house when your income is low and you have no money saved. If you expect your income to rise, you might look for a lease-option deal. You rent a house with an option to buy it at a set price within a set time (often a year or two). This buys you time to save money, improve your credit, and increase your income, so you can get a loan.

Buying a small lot for now is another way. Sellers of small lots may not worry about credit ratings, and they often don’t need large down payments. They know you can’t damage a piece of land as easily as a house, so they feel secure selling it with little or nothing down and they enjoy the interest they make. Your goal here is to get your finances and credit in order as you make those payments, so you can get a mortgage loan in a couple years, and put a house on the lot.

Look at all the possibilities. There is usually a way to buy a house if you keep trying.

First Time Home Buyer Programs

Copyright Steve Gillman. To see a photo of the house we bought for ,500, get a free ebook on how to buy Cheap Homes, and a free real estate investing course, visit: http://www.HousesUnderFiftyThousand.com

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Buying A House

How to Buy a House – Use This System to Compare One Home With Another

How to Buy a House – Use This System to Compare One Home With Another

Everyone experiences this common dilemma when buying a house.

We view houses without a system in place to compare one house with another. And it can cost us.

You probably know what follows. You walk through six or seven open houses. You return home to review your notes but suddenly you are confused. You can’t remember which house you liked and which ones you didn’t.

How can you keep track of the homes?

You will find buying a house is all about comparison. Most likely, you will have already narrowed down your search to homes that are similar in price. In fact if you have been preapproved by your mortgage lender, most of the homes you preview will likely fall into a similar price range.

It is becoming clear to you that further evaluation is necessary.

In order to compare homes it is wise to have a system. The Department of Housing and Urban Development, or HUD as it is commonly called, has created its own score card. However before I go any further, I strongly suggest adding a digital camera onto your home shopping procedure.

With this in mind, your real estate agent is going to take you to see several houses based on information you have provided. To remember each house, use a camera to photograph important attributes. This way you can analyze comparable pictures.

First, take a picture of the outside of each house. Then photograph the major rooms such as living room, family room, and kitchen.

Second take photos of the yards and any extra features about each house that you like as well as dislike.

Don’t forget problem spots too.

Keep in mind that if you are systematic in your approach, you will be able to easily compare pictures of the major rooms of each house, the yards, extra features you thought were beneficial, and potential problems.

Now you need the HUD Home Buying Scorecard. Print out the pictures for each house and attach them to your score card.

Have you heard of the HUD Home Buying Scorecard? It is a home buying checklist designed to remind you of important features in each home and to score each feature with a good, average, or poor score.

Before you go on tour with your Realtor, print out or copy several HUD Scorecards so that you have one for each individual house. At the top write the address and list price for each home you are previewing.

Basically the scorecard highlights features from 4 important categories that everyone buying a house needs to consider.

Briefly the first category includes attributes from the home itself such as square feet and number of bedrooms to roof age and condition of gutters and downspouts. Score each one.

The second category compares items related to neighborhoods and includes the appearances of nearby homes and businesses, traffic conditions, pet restrictions, and garbage service.

Perhaps of most importance, local schools comprise the third section reviewing teacher to student ratios, safety standards and test scores.

Lastly, buying a house should take convenience into consideration. Rank features such as parks, shopping malls, places of worship, and hospitals.

Now use this system to analyze. Clip the pictures to corresponding scorecards. Begin evaluating the houses using the photos and scorecard criteria. You will be able to easily analyze and decide which house is best for you.

Who says buying a house has to be confusing? Good luck and happy shopping!

Always consult your real estate professional before taking pictures within a private residence.

First Time Home Buyer Programs

Kate Ford, author of Get Your Best Mortgage Rate takes the confusion out of previewing homes for sale. Get more of Kate’s tips for buying a house and quickly print your home buying scorecard here.

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Buying A House

Can You Really Buy My House in One Hour or Less?

Can You Really Buy My House in One Hour or Less?

Many people frequently ask us, “Can you really buy my home in an hour or less?” The short answer is “Yes”, we absolutely can buy your house in one hour literally or figuratively. We are a network of professional home buying companies located throughout the US who have literally bought and sold houses in an hour or less. But more often than not, we make you one or more offers to purchase your house within one hour of visiting and inspecting your home for the first time so that your house is "good as sold" within an hour or less. It’s still up to you to accept one of our offers in your own time frame and close on the date of your choice. Because we can make you an offer to buy your house in an hour or less, you can sell your house fast… faster than you ever thought possible.

Here’s How Our Rapid One Hour Home Purchase Program Works

If you have a house you need to sell fast for any reason whatsoever…

(1) Visit our website at www.OneHourHomebuyers.com or call 888-Soldin1Hour (or 888-765-3461), complete our Confidential Home Seller Questionnaire and tell us all about your home for sell.

(2) We’ll review your information and contact you ASAP to see if your home qualifies for our Rapid One Hour Home Purchase Program.

(3) If you house qualifies and you’re flexible on price or terms, we’ll schedule a time to come out and meet with you, inspect your home and make you and make you one or more offers to buy your house in an hour or less, guaranteed!

We can offer you all cash now; some cash now and some cash later; take over your mortgage payments immediately; or come up with some other creative solution to get your house bought and sold fast!  We’ll handle all the paperwork, have our real estate attorney make all the closing arrangements and close within a week or less or at the time of your choosing. The whole process really is that simple!

Unlike selling your house “For Sale by Owner” (FSBO) or listing your home with a real estate agent, when you choose to sell your house to One Hour Homebuyers or one of our affiliates, you’ll know “when” your house will sell and for “how much”. There will be no guessing, no more waiting month after month, year after year, to sell your house during this depressed housing market, economic recession and severe credit crisis. You can sell your house fast right now and avoid all the stress and uncertainties and put your home selling worries behind you once and for all!

Again, to see if your house qualifies for our Rapid One Hour Home Purchase Program, please visit our website at www.OneHourHomebuyers.com or call 888-Soldin1Hour (or 888-765-3461) and complete our Confidential Home Seller Questionnaire. We’ll review your information and get back to you ASAP about the possibility of buying your houses in one hour or less!

First Time Home Buyer Programs

We are a nationwide group of professional home buying companies that buy houses in any area, in any conditiona and in any price range, often in onehour or less. If you have a house you need to sell fast, please visit our website at www.OneHourHomebuyers.com or call 888-765-3461 to complete our seller questionnaire and see if your home qualifies for our Rapid Home Purchase Program.

The math of renting vs. buying a home. Challenging the notion that it is always better to buy.
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Mortgage Finance

Mortgage Security not That Costly

Mortgage Security not That Costly

Forget everything you thought you knew about the benefits of taking a variable-rate mortgage instead of locking in for the long term.

A new study suggests the security of a five-year mortgage costs little or nothing beyond a riskier variable-rate mortgage, providing you get a jumbo-sized rate discount.

“Interest costs on discounted closed five-year mortgages have been close to, and often lower than, those of variable-rate mortgages since late 1996,” senior Canada Mortgage and Housing Corp. economist Ali Manouchehri writes in the study.

Homeowners have made variable-rate mortgages hugely popular in the past few years in the belief that you can save on interest costs by pegging your mortgage rate to your lender’s prime lending rate. As the prime rises, or as has generally happened in the past few years, fallen, so goes your mortgage rate.

The prime rate at the major banks is now 4.5 per cent, while the posted five-year rate at the big banks is 6.15 per cent. In just one year, the variable-rate choice would save you about ,700 on monthly payments toward a 0,000 mortgage amortized over 25 years (assuming a level prime rate).

Historically, you would also have saved a lot. The CMHC study shows that five-year mortgages taken out from 1993 through 1998 would have cost anywhere from ,000 to ,000 in additional interest paid over the term of the loan (the example is based on a 0,000 mortgage amortized over 25 years).

The flaw with this analysis is that it doesn’t reflect real-world mortgage pricing. These days, very few people take out a mortgage without a sizable discount off the posted rates at major banks.

For that reason, the CMHC’s Mr. Manouchehri decided to compare discounted five-year mortgages with discounted variable-rate mortgages. Incidentally, five years is the most popular term by far for fixed-rate mortgages at about 59 per cent of the total.

The size of the discounts Mr. Manouchehri applied was based on the difference between posted major bank rates and the best deals available from other lenders. For five-year mortgages, he used a discount of 1.25 of a percentage point; for variable-rate mortgages, it was 0.4 of a point off prime.

For five-year mortgages taken out between 1993 and mid-1996, the five-year mortgage was costlier in terms of interest costs. Since then, however, variable-rate mortgages have generally been a little bit more expensive.

Obviously, there’s nothing in this study that decides the fixed-rate versus variable-rate debate once and for all.

In fact, the CMHC study may just confuse anyone who recalls some research done for Manulife Financial back in 2000 by York University finance professor Moshe Milevsky. His research found that the extra interest charged on a five-year mortgage would have cost ,000 on average between 1950 and 2000 for a 0,000 mortgage amortized over 15 years.

To make some sense of the variable-rate versus five-year question, let’s go back to the CMHC study.

It shows that five-year mortgages, discounted or otherwise, were especially bad choices for a three-year period starting in mid-1993. Rates were high for a while back then, but they subsequently fell.

You were a spectator to these rate declines if you were stuck in a five-year mortgage, while people in variable-rate mortgages would have benefited almost immediately.

It’s a different world now, though. Five-year mortgage rates are close to a 50-year low, which suggests they’re far more likely to rise over their term than fall.

So what’s the best choice here, variable-rate or five-year fixed rate? People who want to pay rock-bottom mortgage rates for as long as possible will probably still want a variable-rate mortgage. Remember, you can lock this sort of mortgage into a fixed term without penalty in most cases.

The case for the five-year term looks almost as strong, though. First, the CMHC study tells us there may not be a significant cost to locking your mortgage in for five years, and you might even save a little over a variable-rate mortgage.

Second, the likelihood of higher rates in the years to come would suggest that this is a good time to lock in.

If you had a variable-rate mortgage discounted to 4 per cent, the prime would have to go up by 0.85 of a percentage point to equal the current five-year rate. That’s not a lot of ground to cover in the span of 12 to 18 months when the economy is doing well.

Arguably, the variable-rate versus fixed-rate debate is all about risks and rewards. Right now, the five-year option offers much less risk, and almost as much reward.

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Popular Home Buyer Programs

Popular Home Buyer Programs

Which Popular First Time Home Buyer Programs Exist?

Apart from being an emotional commitment, buying the first home is a financial commitment as well. One needs to be informed about the first time home buyer programs offered by the United States Department of Housing and Urban Development. These programs are meant to support a first time home buyer financially. The mortgage insurance programs and state-sponsored programs assist in buying the home for the first time.

HUD Programs

One of these Home Buyer Programs is available as very low to moderate income housing loans. Those having their income below 50 percent of the area’s median income are eligible for these programs.

American Dream Down Payment Initiative is another program that has been launched by the HUD. Those who have not owned a house for the last 3 years are eligible for this home buying grant. The amount received through this grant can be used for paying the down payment, the closing costs or for home improving activities.

Non-profit Organization Programs

Apart from the government bodies, there are many non-profit organizations that operate first time home buying programs for families with low income. Habitat for Humanity and American Family Funds are some examples of such organizations that offer home buying grants to the individuals.

HUD Approved Programs

Also, there are many HUD approved organizations that have been assisting the First Time Home Buyers for past many years. Homes for All is one such organization that offers grants that can be sued for paying down payment and closing costs.

First Home Programs in Different States

Talking about the state-wise programs for the first time home buyers, there are many different programs existing for different states. For example, the Ohio Housing Finance Agency in Ohio provides the First-Time Homebuyer program. Similarly, there is a Start Program operated by the North Dakota Housing Finance Agency to offer loans to the first time home buyers.

Down Payment Assistance Loan program is operated by the South Carolina Housing Finance and Development Authority. Individual Development Accounts is a unique first time home funding program in the state of New Jersey. You can learn about such programs in your own state using online resources.

You must also be concerned to learn about the eligibility conditions to take advantage of these programs. Some of the programs require an individual to have a steady flow of income. Also, most of these programs are available only for the first time home buyers.

First Time Home Buyer Programs

Hi! I am Kelsey Willson. I am working as a Loan Officer & Financial Analyst at FirstTimeHomeBuyersloan.org. I love business blogging.

http://firsttimehomebuyersloan.org/