mortgage financing and programs

Archive for March, 2013

3 Common First Time Home Buyer Mistakes Can Cost Thousands

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First Time Home Buyer TipsBuying real estate for the first time is a very exciting step in life.

It is likely to be one of the biggest financial commitments that you make, so it’s very important to navigate the purchasing process wisely.

Many first-time home buyers make rookie mistakes that bring on negative consequences and a lot of frustration.

Outlined below are common errors home buyers make, so you can learn from their missteps and avoid them yourself.

1. Buying More Than What You Can Truly Afford

Just because the bank says that you qualify a certain amount for a mortgage doesn’t mean that you have to choose a house at the very top of this price range.

Many people get carried away and buy the most expensive house that they qualify for.

If something unexpected happens, they may find it difficult to keep up with their monthly mortgage payments later on.

Remember that you will also have student loan payments, vehicle costs, credit card bills, health insurance, groceries, retirement savings and other expenses, so make sure that your mortgage payments will comfortably fit within your budget.

2. Failing To Get A Home Inspection

Before buying a house, you should always have a professional inspection done. Not doing so is a big mistake.

You don’t want to get stuck with hidden damage that could saddle you with the expense of ongoing repairs.

Hiring a professional to assess the home’s condition is absolutely essential before making your final decision.

3. Disregarding Your Future

When you are buying real estate, don’t just think about how the home will work for you in the immediate future.

Also consider what your needs will be five, ten or even 20 years from now.

Find out the development plans for the neighborhood.

Look for reputable schools if you intend to start a family.

And consider whether the street’s home values are likely to increase or decline in the future.

Your Next Steps

Don’t let the home-buying process overwhelm you!

Learn from these common first-time home buyers’ mistakes, so you can avoid them.

A great next step toward planning for your first home purchase is to consult with a trusted, licensed mortgage professional who is trained in providing the best advice on how a new home will affect your budget.

7 Quick And Inexpensive Ways You Can Improve Your Home’s Curb Appeal

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Improve Your Curb Appeal For Better Sales Results

Have you ever heard the saying, “You never get a second chance for a first impression?”

If you have a home for sale, it is important to appreciate the significance a first impression has on your potential buyer.

When buyers drive up to your property and take their first look at your home, they will instantly be forming ideas about your house and how it might fit for their family.

When you are trying to entice a buyer to make an offer on your house, you must consider the curb appeal – how your house looks from the outside, or while standing on the curb – of your home for sale.

In fact, some surveys show that curb appeal can affect a buyer’s decision even more than price or square footage.

Below are seven simple and inexpensive things you can do to improve your home’s curb appeal.

  1. Plant a few shrubs or decorative flowers in the front yard to bring color to your lawn.
  2. Is your front door looking a little worse for wear? Give it a fresh coat of paint or replace it with a new one.
  3. Keep your grass well watered so it appears green and lush.
  4. Remove anything your pet leaves lying around, such as bones, chew toys or droppings.
  5. Take a look at your gutters. If they look damaged or are hanging loose from the roof, be sure to have them repaired before showing the house.
  6. Clean up your flowerbeds by removing weeds and trimming overgrown plants.
  7. Add a bench, a garden ornament or a couple of beautiful pots to make your front yard more attractive. 

These are just a few ways you can improve the curb appeal of your home for sale and make a great first impression on buyers.

A good next step for preparing your home for sale is inviting a trusted, licensed real estate professional to your home for a preview.

An agent’s experience in the real estate market can help you plan your strategy to get top-dollar for your home and help you improve the curb appeal at the same time.

Rising Sales Prices Are Excellent News For Homeowners Across America

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Existing Home Sales Up March 2013

The National Association of REALTORS® released its monthly Existing Home Sales report on March 21 and gave investors and home sellers something to cheer about. 

While February sales of existing homes didn’t meet investor forecasts of 5.00 million homes sold on a seasonally adjusted annual basis, the actual number of existing (previously owned) homes came close at 4.98 million homes sold.

This number surpassed January’s revised reading of 4.94 million homes sold by 0.8 percent.

Sales of existing homes comprise approximately 85 to 90 percent of homes sold in the U.S.

Investors watch existing home sales for evaluating housing markets and short-term economic trends related to home purchases such as goods and services associated with home ownership.

Existing Home Sales Up For 20 Consecutive Months

Existing home sales have increased by 10.2 percent as compared to 4.52 million existing home sales for February 2012, and have increased for 20 consecutive months.

A short supply of homes available for sale and better job prospects are creating more demand for homes.

In February, available homes increased to a 4.7 month supply of homes, which is up from January’s 4.3 month supply of available homes, the lowest number since May of 2005.

With that said, current listed inventory of homes is 19.2 percent below last year’s 6.4 month supply of available homes.

Increasing demand for existing homes also suggests growing competition between buyers for available homes.

Mortgage Rates Remain Near Historic Lows Increasing Affordability For Home Buyers

Getting pre-approved for a mortgage before making an offer on a home can help buyers, as sellers know that pre-approved buyers won’t have potential delays related to the mortgage approval process.

The National Association of REALTORS® reports that the national median selling price for existing homes of all types was $173,600, which is up 11.6 percent year-over-year.

This suggests that potential homebuyers may want to act now as mortgage rates typically increase along with home prices.

Regional Average Selling Prices Show Positive Results For February

  • Northeast: The median selling price was $238,800, 7.6 percent higher than for February 2012.
  • Midwest: The median selling price was $129,900, which is 7.7 percent above the median selling price in February 2012.
  • South: The median selling price was $150,500. This represents a 9.3 percent increase since February 2012.
  • West: The median selling price was $237,700, a substantial increase of 22.7 percent over February 2012.

Multiple buyer bidding and limited inventory choices are fueling higher prices for existing homes, particularly in the West.

This is the strongest year-to-year rate of growth since November 2005, when existing home prices had increased by 12.9 percent as compared to the previous 12 months.

What’s Ahead For Mortgage Rates This Week – March 25th, 2013

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What's Ahead For Interest Rates March 25 2013Last week’s economic news was dominated by events in Cyprus and the Federal Open Market Committee (FOMC) meeting on Wednesday.

Mortgage rates fell last Monday as investors became concerned over news that a Cyprus bank bailout was in the works.

Federal Reserve Holding Course With Mortgage Backed Security Purchases

The FOMC met on Wednesday and in a press release after the meeting, noted that no immediate changes to the present economic easing program would be made.

The Fed officers will continue to monitor the nation’s economy, and are eventually expected to implement a gradual reduction of their monthly bond and mortgage backed security (MBS) purchases when the nation’s economy has recovered sufficiently.

The Fed currently purchases $85 billion in bonds and MBS in an effort to keep long term interest rates low.

If the Fed should reduce its purchases, mortgage rates would be likely to rise. 

Investors viewed the Fed’s announcement as positive news and bond prices fell, which caused mortgage rates to rise, but mortgage rates finished the week slightly lower than last week.

Continuing Economic Turmoil In Europe May Encourage Lower US Mortgage Rates

In global news, the European Union (EU) threatened to withdraw its promise of aid to Cyprus banks if they cannot raise funds required as a condition of the bailout.

A one-time tax on bank deposits was suggested, but ultimately rejected as Cypriots nixed the idea of taxing their savings, even on a one-time basis.

Cyprus banks provide a tax shelter for foreign citizens, and the banking system in Cyprus is disproportionately large compared to its size.

Failure of this banking system could create serious repercussions for global financial markets.

The EU has set today, March 25 as a deadline for Cyprus to find the funding required for the bailout to be given.

Investors could seek safe haven in bonds if the EU withdraws its offer of a bailout to Cyprus banks, which usually creates downward pressure on mortgage rates.

If the EU offers Cyprus banks a bailout, then investors may respond positively and buy more stocks which would likely cause mortgage rates to rise.

Upcoming Economic Reports Could Affect Mortgage Rates

Other economic news scheduled for next week includes Treasury Auctions on Tuesday, Wednesday and Thursday.

The Department of Commerce issues its monthly New Home Sales report on Tuesday.

This report measures sales of new privately owned single family homes, and indicates buyer interest in new homes and also future demand for goods and services used by homeowners.

 

How To Spot And Treat Mold In Your Home

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How To Spot And Treat Mold In HomesThe first sign of mold you notice may be a musty smell in your home.

After looking around, you spot what looks like mold — don’t panic!

You can remove unhealthy mold from your house without it costing a small fortune.

Check To Be Sure It’s Really Mold

Mold can look many different ways, which depends on the type.

Some are grayish-white or black and can look like a dirty smudge.

If you’re in doubt that a spot is mold, you can do a test with chlorine bleach.

Simply put a drop on the spot. If the color immediately fades away, you have mold.

Mold Infestation Ususally Means Leaks Too

Mold needs moisture to grow.

If you find mold, you know that you probably also have a water problem in your home.

So first, you’ll need to find the source of the leak and repair it.

After that, you can begin getting rid of the mold.

How To Kill Mold

A lot of people think mold clean up has to be expensive.

The truth is that most mold problems can be eliminated with chlorine bleach.

Bleach is a strong chemical, so for safety you’ll need to wear gloves, an air filter and goggles while you clean.

Remember, when cleaning with bleach you need to work in a well-ventilated area, and never mix bleach with anything that contains ammonia.

The CDC (Centers for Disease Control and Prevention) recommends using bleach to kill mold on hard, non-porous surfaces.

Killing mold with bleach is a simple process:

  • Thoroughly soak the area in full strength bleach.
  • Let it soak for fifteen minutes.
  • Scrub the area with a mixture of one-part chlorine bleach, three-parts water and one teaspoon of dishwashing soap.

Finishing The Clean-up

Once everything has been washed, you’ll need to do another inspection of your home.

Look for moldy papers, clothes or anything porous that could be a good home for mold.

These things will need to be bagged and thrown away.

Allow two to three days for the surfaces to dry.

Then, continue to inspect the areas for mold re-growth, and pay attention for any moldy odors.

Congratulations, you have eliminated the mold problem in your home and saved a lot of money by doing it yourself.

If you’d like additional maintenance tips or are looking to buy a new house, contact a licensed real estate professional right away!

Fed Meeting Statement Reveals Good News For Real Estate

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Fed Meeting Minutes ReleasedThe Federal Reserve’s statement after yesterday’s Federal Open Market Committee (FOMC) meeting left no doubt as to the Fed’s dual commitment to keeping long term interest rates down and encouraging economic growth.

No changes to the Fed’s current bond-buying program were made during today’s FOMC meeting.

The Fed’s monthly purchase of $85 billion in bonds and MBS works by boosting bond prices, which typically helps with keeping mortgage rates lower.

The Fed reaffirmed its position that it will not withdraw or reduce monetary easing until the unemployment rate is substantially lower.

Unemployment Rate Improving Nationally

Fed predictions for the national unemployment rate improved; December’s outlook for 2013 estimated the unemployment rate at between 7.4 to 7.7 percent; the Fed now expects unemployment rates of 7.3 to 7.5 percent by the end of this year.

February’s jobs report likely influenced this revision as the unemployment rate fell from 7.8 to 7.7 percent.

The Fed notes that while employment rates are improving, they remain elevated which supports the Fed’s decision not to modify its bond purchase program in the near term.

Lower unemployment rates suggest that more people will be financially prepared for buying homes or refinancing their existing mortgage loans, and the unemployment rate is also expected to fall due to growing numbers of baby boomers leaving the workforce.

Lower Inflation Rates Boost Consumer Purchasing Power

The Fed slightly revised its December forecast for 2013 economic growth of between 2.3 to 3.0 percent.

Now the Fed predicts economic growth to range between 2.3 and 2.8 percent in 2013, but negative influences including a higher payroll tax and government spending cuts are expected to slow the rate of economic growth.

Concerning inflation, the Fed expects an inflation rate of between 1.3 and 1.7 percent this year and for inflation to remain below 2 percent through 2015.

Lower inflation rates allow consumers more discretionary spending power, which can further boost the economy and improve consumer confidence in making big ticket purchases including homes and related items and services in delaware and around the country.

Fed Keeping Tabs On European Economic Issues

Fed officers are continuing to monitor economic developments in Europe, and expressed concerns that the situation remains fragile.

Commenting in a press conference held after the FOMC meeting, Fed Chair Ben Bernanke characterized economic issues in Cyprus as “difficult”, but said that the Fed doesn’t expect these developments to have major impact on U.S. financial markets.

Its plan to keep short term interest rates near zero until unemployment rates reach 6.5 percent or the inflation rate exceeds 2.5 percent further support the Fed’s plan to keep its monetary easing policy intact for the near term.

Unless unexpected or catastrophic events occur which would cause sudden or rapid economic changes, the Fed appears unlikely to announce major changes in its policy.

NAHB Housing Market Index Shows Builder Confidence Slip In March

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Home Builder Confidence Index March 2013The National Association of Home Builders (NAHB) released its NAHB/Wells Fargo Housing Market Index for March on Monday.

The HMI measures builder confidence in the market for newly constructed single family homes.

A reading of 50 for the NAHB Housing Market Index (HMI) indicates that more builders are confident of housing market conditions for new single family homes than those who are not confident.

Home builder confidence fell for the third consecutive month with a two-point drop to a reading of 44 in March.

Several Factors Create New Home Bottleneck

An NAHB leader noted that several situations are causing a “bottleneck” in the supply of new homes as compared to those wanting to buy them:

  • Low supply of developed lots available for new construction
  • Rising costs for labor and materials
  • Stricter mortgage credit requirements for homebuyers and lowball home appraisals. (These circumstances are typically caused by some mortgage lenders taking a conservative attitude toward risk management by tightening credit requirements and appraisers erring on the side of caution when valuing single family homes.)

Would-be buyers may find themselves stuck between a lack of buildable lots and ready building supply chains and lenders reluctant to risk mortgage defaults caused by lenient loan approvals.

Keep in mind that this only one perspective; if you’re looking for a new home, don’t give up.

Future Sales Confidence Creates Bright Spot

The HMI also measures builder confidence in three categories including current sales conditions, sales conditions within the next six months and the amount of foot traffic in new housing developments.

Confidence in current sales conditions dropped from 51 points in February to 47 points in March, but the news is not all bad.

Confidence in sale conditions for the next six months rose by one point from 50 to 51, and builder confidence in buyer foot traffic rose by three points to 35.

Foot traffic will likely increase as warmer weather arrives and the peak home buying season gains momentum.

Housing Market Conditions Vary By Region And Community

The three-month rolling average of builder confidence in four geographic regions of the U.S. showed mixed results for March.

The index reading for the Northeast had no change and remained at 39.

Index readings for the Midwest and Southeast declined by one point each to 47 and 46 respectively.

The March index reading for the West came in gaining four points to 58.

If you’re ready to buy a home, check with a licensed real estate professional specializing in the area where you want to buy.

This is the best way to gain specific information on the area’s market conditions and home prices.

Great Staging Tips To Set A Buyer’s Mood At Your Home For Sale

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Home Staging Tips And TricksStaging is the art of preparing your home for sale before showing it to prospective buyers.

The point of staging is to highlight the house’s strengths, downplay its weaknesses and make it more appealing.

With the right decorating techniques, you can win buyers over the moment they step through the door.

Below are a few staging tips to help make your house irresistible to potential buyers.

Put Everything Away

The first step is to put away anything that is not essential. This will open up the house so that it appears more spacious.

Even if you have to rent a storage unit, finding a new home for all of your family’s projects and collections should clear some space and help buyers imagine their own belongings in your home for sale.

Pay special attention to entryways and narrow hallways to improve your prospective buyer’s sense of spaciousness.

Get Rid Of Clutter

Be sure to clear off the things that gather on kitchen counters and surfaces, such as old magazines and stacks of mail.

Also, emptying out your closets of half of the things inside them will make them look much roomier.

Use this time as an opportunity to thin the number of largely unused items that your family has collected over the years.

And look on the bright side; moving into a new house will be much easier after you have donated your unneeded items to a charity.

Fresh Scents Make Sense

You would be surprised by how much the sense of smell comes into play when buyers are viewing a house.

To avoid turning buyers off with pet or smoke odors, make sure you give each room a deep clean, including the air vents and carpeting.

Just covering up stale odors with air fresheners won’t do the job.

Let In The Light

Buyers are looking for spacious rooms with a lot of natural light, so make sure you open the blinds and turn on all the lights.

If you have rooms that are a bit dark, you can add floor lamps to make them brighter or flowers to suggest sunlight.

Home staging can make a big difference in how potential buyers see your home for sale, so make sure you set the mood to make it as attractive as possible.

What’s Ahead For Mortgage Rates This Week: March 18th, 2013

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Mortgage Rate Update March 18 2013Last week’s positive employment reports were good news for the economy, which typically causes mortgage rates to rise, but mortgage rates ended the week lower.

As of Thursday, Freddie Mac reports that the average mortgage rate for a 30-year fixed rate mortgage was 3.63 percent with borrowers paying their closing costs and 0.8 percent in discount points.

The average mortgage rate for a 15 year loan was 2.79 percent with borrowers paying their own closing costs and 0.8 percent in discount points.

Strong Retail Sales Show Consumer Confidence Improving

In other economic news, retail sales for February surpassed Wall Street expectations and grew by 1.1 percent against predictions of 0.5 percent and January’s reading of 0.1 percent.

Retail sales account for 70 percent of the U.S. economy and growing retail sales are a strong indicator of economic recovery, which generally causes mortgage rates to rise as bond prices including Mortgage Backed Securities fall.

With this strength in the retail sector, it may be a good time to consider locking interest rates for purchase and refinance transactions.

Results of Treasury auctions held Tuesday, Wednesday and Thursday were mixed.

Tuesday’s auction of 3-year notes saw average demand, Wednesday’s auction of 10-year notes was strong, and Thursday’s auction of 30-year bonds drew a weak response.

Financial Reporting Strong Across Multiple Indices

The Producer’s Price Index (PPI) for February met expectations at 0.7 percent and exceeded January’s level of 0.2 percent.

The Consumer Price Index (CPI) for February came in at 0.7 percent and exceeded expectations of 0.5 percent and January’s reading of 0.0 percent.

The Core CPI, which excludes food and energy sectors, demonstrates the impact of high fuel prices on the CPI with its lower numbers.

The Core CPI for February is 2.0 percent higher than for February 2012.

Upcoming Federal Reserve Meeting May Bring Interest Rate Changes

The Federal Reserve is not likely to modify its bond purchase program until the inflation rate reaches 2.5 percent.

Next week, the Federal Reserve will meet on Wednesday; investors will be waiting to see how the Fed responds to recent positive economic news in terms of potential changes to its bond purchase program, which is helping to keep mortgage rates lower.

As the deadline of March 27 for funding the Federal government approaches, investors will be following legislative talks to see how or if funding will be approved by the deadline.

5 Quick Tips To Get A Better Price On Your Home Purchase

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Negotiating Tips For Your Home PurchaseWhen you are looking to buy a home, it is important to keep in mind that no real estate price is set in stone.

There is always room for negotiation, and with the right techniques you may end up saving thousands of dollars on your dream house.

However, it can be tricky to get the right reaction when you are negotiating.

Here are a few tips that will help you to haggle your way to the best deal.

Find Out The Seller’s Motivation

If they really need to move and sell the property, it will be easier to convince them to negotiate on price or other deal points.

For example, they might be relocating for a job or the house might be close to foreclosure, which would give them the motivation to sell quickly at the price you offer.

Investigate How Long The Property Has Been On The Market

If the seller has been trying to sell the home for several months or longer, they will be much more receptive to competitive offers than a seller who just put their house up for sale last week.

Research Comparable Properties

Find out the price of recently sold properties in the same area that are comparable to your prospect.

This will give you an idea of how much you should bid on the house.

Knowledge is power in any type of negotiation, so arm yourself with as much information as possible.

Keep Your Cool

Even if you are absolutely head-over-heels in love with a property, refrain from showing your excitement to the seller.

You could lose any advantage you might have in negotiation if you let the seller and their agent know how much you really want the property.

Don’t Offend

Be careful not to bid too low. Sometimes sellers are offended by low ball offers and will refuse to work with you afterward.

Even when you are just attempting to get the home for a great price, the seller may become offended, which will leave you disappointed and empty-handed.

These are just a few tips to keep in mind for getting a great deal on your dream house.

If you’d like more help negotiating the price of a home, please contact a licensed real estate professional for more information.

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