Have you heard about the tax credit recently created to help first time home buyers or buyers that have not owned a home in over 3 years. This is only on FHA (Federal Housing Administration) loans and according to the secretary of H.U.D., home buyers will be allowed to use the $8,000 first-time homebuyer tax credit towards their DOWN PAYMENT on purchases financed by FHA loans. FHA will allow approved lenders, nonprofits, and government agencies to advance the funds in the form of interest free bridge loans that buyers would use for down payments. Buyers would repay the loans after they receive their tax refunds. More information is to come from FHA soon.
If you are interested in this new tax credit or have questions regarding real estate send me a email/comment and I will work to answer your question.
Houston, Texas and its surrounding area has seen a slight decline in sales and home prices but compared to other cities across the country our great town of Houston is doing well. There are lots of places to visit such as the Space Center, The Aquarium both in downtown Houston, and Kemah. The Houston Zoo. There is also Moody Gardens in Galveston and many other spectacular eating places.
Houston is the workplace for many hospitals and medical research facilities along with the oil and gas industry and Space center facilities.
If you would like more information regarding Houston, Spring, The Woodlands, Lake Conroe please feel free to email me at patti@PattiMace.com.
I was just reading an excerpt that gave reasons why a person should rent instead of buying a home. I agree with this statement to rent only for people first starting out in a new job or a new relationship. But realistically renting is like throwing your money away because you see no return on the money you pay out every month.
The United States tax policy rewards house buyers who borrow, not renters. The “dream of homeownership” gives hope and the goal of a future endeavor. When couples first wed they dream of starting a family and that dream of owning their first home.
I find it amazing that anyone would suggest that people should rent instead of ever buying, he must be an investor making money off people who are renting. It takes a special set of people to go out on the limb and purchase the property for others to rent.
I would like to hear what your thoughts are on whether it is time to Rent or Purchase a home. Whether you choose to rent or purchase a home I will be glad to assist you in your housing needs www.PattiMace.com.
I would love it if you all would please post on my website your thoughts on the economic conditions so that I and others can have your input in regards to purchasing homes while the economy is in a recession. In this real estate market there are positives and negatives regarding buying or selling a home.
On the good side first-time home buyers have the same advantage they have always had, which is that they do not have to sell their old place before buying a new one. This purchase is a positive for the economy, plus once the first-time home buyer purchases the home it leaves the door open for the seller to move on or up to a larger home which continues to help stimulate the economy.
Unfortunately for sellers home prices have dropped significantly especially with all the foreclosures and short sales on the market. Depending on where the home is located it may be a few years before home prices begin to move in an upward direction.
Post to me your thoughts! Also, keep working on your credit score and saving towards your new home.
www.pattimace.com, or patti@pattimace.com
hope to hear from you all….
With the woes of the economy it is more important now than ever before that you are controlling your debt and saving for your goals whether it be a home, a car, or your childrens college fund. With the end of the year approaching now is the time to sit down and do a review of your finances and spending habits and work on how to achieve your goals for 2009 and forward. Setting a family budget will help to make it easier to reach your savings goal.
While working on your budget look to make sure your debt to value ratio is following along the 28/36 percent rule. This is a rule that is followed by the mortgage lenders when a person is looking to purchase a home. Your MORTGAGE payment should not exceed 28 percent of your monthly income, and your total outstanding debt should not exceed 36 percent of your monthly income.
With your budget in place try not to add any new debt and stay diligent to pay off your current debt by starting with the credit card debt with the highest interest rate.
When you set up your budget and your savings goal be sure to have a seperate fund for Emergencies. Unfortunately it is those unexpected expenses that can throw the budget completely so always try to put aside funds from each check for these type of expenses..such as car breaking down, or an illness.
As you learn to manage and stay within your budget you will see how life seems to be easier to deal with when you are not stressing over your finances. Good Luck!
Talk to you Soon,
Patti
The government has submitted a new program which offers $7,500 tax credit for first-time home buyers. While this is one of the most talked about measures in the upcoming new bill, it is also the most confusing. Simply, the government has created a monetary incentive, a tax credit for first-time home buyers, as a tool to stimulate the housing market. The tax credit will be 10% of the purchase price of a home, up to a maximum of $7,500. That means if the home costs more than $75,000 first-time home buyers (anyone who hasn’t owned a home in the last three (3) years) will receive the full $7,500 tax credit, this is not a new idea. Back in the 1970’s the government offered a similar program with one major difference: this new tax credit will have to be paid back over a period of 15 years, beginning two years after the credit is taken. Basically, the government is providing first time home buyers an interest-free loan up to $7,500 to help them buy a home! If the home owner happens to sell the home before the 15 years is up, the remaining credit is due upon sale from the profit of the home sale. However, and here’s the best part, if there is insufficient profit, after the sale of the home, then the remaining credit due is forgiven. You really have nothing to lose. There are, of course, income limits to qualify for this incentive. With this new tax credit and down payment assistance, you are finally in the driver’s seat in a buyer’s market with some of the best interest rates to date. Let me help you find your dream home.
Are you in need of Foreclosure Assistance
NeighborWorks/HOPE NOW/Homeownership Preservation Foundation Hotline
Homeowners facing foreclosure can call a tollfree hotline at (888) 995-HOPE, 24 hours a day, 7 days a week.
Federal Housing Administration
Government-insured refinancing for credit-worthy borrowers who went into default after their ARMs reset may be available by calling (800) 225-5342 or by visiting http://www.fha.gov.
Other Resources
Avoid Foreclosure Rescue Scams
Federal Trade Commission
Equity Stripping & Loan Flipping – If you agree to a loan that’s based on the equity you have in your home, you may be putting your most valuable asset at risk. Certain abusive or exploitative lenders target borrowers, who unwittingly may be putting their home on the line. These abusive lending practices range from equity stripping and loan flipping to hiding loan terms and packing a loan with extra charges.
Foreclosure Rescue
MassHousing
Foreclosure Resources for Consumers
Federal Reserve Board of Governors
HomeOwnership Preservation Foundation
Once your offer has been accepted on the home you would like to purchase one of the things that is suggested is for you to get a home inspection. What is a home inspection? Well, one of the best ways to understand the property’s condition is to hire a qualified home inspector. It is recommended you contact and interview at least two to three different home inspectors in order to find one that will meet your individual needs. Inspectors are familiar with the building codes and will help look for flaws in the home your are purchasing.
The following are some important questions to ask before making your final selection;
- How long have you been in the home inspection business?
- What are your qualifications?
- Are you a member of any inspection organization or association?
- How many resale home inspections have you completed?
- If I hired you today, when would you be available to complete my inspection?
- What will the inspection cover?
- How long is your average inspection and how long after it’s completed will I receive my report?
- How much will the inspection cost?
- May I attend my inspection? May my real estate agent also attend?
- Do you provide estimates for repairs and improvements?
- Can I contact you post-inspection for any questions?
These are just a few questions and you may have more but hopefully this will help you when it is your time to need a home inspection.
Talk to you soon, Patti
I read this article today and wanted to share it regarding The Private Mortgage Industry’s Role in the Current Mortgage Crisis
The blame game for the development of the current mortgage crisis is now in full swing, and, with one exception, no major participant escapes unscathed:
1. Lenders and investment bankers drastically relaxed their underwriting standards in response to the euphoria associated with rapidly rising home prices during 2000-2006. They approved loans that could not possibly be repaid without an indefinite continuation of house price inflation.
2. Bank regulators ignored the breakdown of underwriting standards until it was much too late to take effective action.
3. Mortgage brokers and loan officers encouraged borrowers to buy more house than they could afford, and to accept toxic mortgages that they did not fully understand.
4. Consumers allowed themselves to be seduced into buying houses they couldn’t afford, into purchasing second and third homes on speculation, and into depleting their existing equity through cash-out refinances, in order to maintain lifestyles they could not sustain.
5. Rating agencies provided AAA and AA ratings to securities issued against pools of new types of extremely risky loans, when they had no adequate statistical basis for estimating potential losses on the loans.
6. Fannie Mae and Freddie Mac invested in such securities, taking large losses and weakening their capacity to be a source of strength during the crisis period.
7. The Federal Reserve kept interest rates low well past the point where they should have raised them, and, as a regulator, was as asleep at the same switch as all the other regulatory agencies.
The exception is the private mortgage insurance (PMI) industry. It is the one sector that has not been cited as contributing to the crisis.
Since the industry was reconstituted in the late 1950s, it has enabled borrowers to obtain conventional loans — those not insured or guaranteed by the federal government — with down payments of less than 20 percent. Insurance premiums were scaled to down payment — the smaller the down payment, the higher the premium.
PMIs must place half of their premium inflow in contingency reserves which can’t be touched for 10 years except to meet unusually large losses. This encourages the companies to set premiums based on estimates of losses over long periods, so premium rates change infrequently. And it severely dampens the temptation to make a lot of money in a short period by taking advantage of ebullient markets. PMIs can’t pay themselves premiums net of losses in the current year, as most lenders and investment banks can.
The PMIs did not fully participate in the euphoria and excess that preceded the crash. They did insure some risky loans that would not have been acceptable to them earlier, but for the most part they stuck to their guns. As a result, their market share declined with the emergence of “piggybacks” (when a home is purchased using more than one mortgage from two or more lenders).
Lenders discovered that they could make 95 percent and even 100 percent loans by getting other lenders to offer second mortgages for the amounts over 80 percent of property value. Piggybacks carried higher rates than the first mortgages, but in many cases the cost to the borrower was smaller than the cost of mortgage insurance. The interest on piggybacks was deductible, while mortgage insurance premiums were not. In addition, borrowers could pay off the second mortgage in full at any time, whereas getting rid of PMI was a hassle.
Of course, the PMIs did not give up market share willingly. They induced Congress to make mortgage insurance premiums deductible, at least for a period, but this had only a small impact.
Had PMIs followed the prevailing pattern during the go-go years, they would have cut their insurance premiums sharply and gone after the riskier loans. But they didn’t, and the piggyback market thrived until the crisis hit. At that point, the market got an object lesson in the value of PMI. First mortgage lenders discovered that piggybacks provided substantially less protection against loss than PMI. As home prices declined and the crisis grew, a large proportion of piggybacks (the market has now virtually vanished) lost all or virtually all of their value.
Borrowers experiencing payment problems discovered that having to deal with two lenders was a substantial barrier to getting loan contracts modified. In contrast, mortgage insurers will often help borrowers negotiate modified contracts with first mortgage lenders.
Nonetheless, the PMIs have been badly hurt. Losses have been eroding their capital and reserves, and their stock prices have tumbled badly. Yet the industry is doing exactly what it was set up to do, which is to cover losses to lenders during a period of stress, out of reserves that they accumulated during periods of prosperity. The industry should play a more prominent role in the very different housing finance system that emerges in the future.
1. Homes are bought by comparison. I have a large inventory at my disposal through MLS while you have an inventory of one.
2. I am very familiar with competitive houses so I can help you position your home well.
3. It is hard negotiating for yourself. I have lots of experience in writing contracts and can negotiate aggressively on your behalf.
4. Buyers are not always forthright about their financial situation. I insist on pre-qualifying before I even bring you an offer.
5. My lender contacts and mortgage experience help buyers get the financing they need.
6. Most buyers don’t want to tell the seller why they don’t make an offer. I can probe the buyer or his agent for that information.
7. Any follow up you do with a buyer can be seen as desperation. I follow up as part of my job so that you are not perceived in a compromising light.
8. I can showcase your improvements better so that you don’t appear like you are “selling.”
9. Most sellers who spend their time as a For Sale By Owner end up by listing in the end. A recent NAR survey found that only 11% of sellers nationally ended up selling by owner. Why spend your time and money if in the end you will hire a REALTOR?
10. Unqualified buyers can tie up your home. I make sure that doesn’t happen.
11. Personality conflicts with a buyer can get in the way. I come between the buyer and the seller so that personalities don’t enter in.
