Archive for February 2009
Commentary: House Prices Will Rise Greatly over the Next Few Years, Buy Now
Interesting commentary from RISmedia contributor, Mike Parker…
”Those who do not study history are condemned to repeat it.” So spoke Sir John Buchan, the First Baron of Tweedsmuir, back in the mists of time often referred to as “the good old days.”
Well, I may not be as old as the Baron, but I did live through President James Earl Carter, 21% prime interest rates, 20% inflation, Paul Volker and his attempt to strangle inflation by strangling the money supply, and that famous “WIN (Whip Inflation NOW!)” button the White House handed out. The period I am referring to was in the 1970s and early 1980s, Read the rest of this entry »
Fannie and Freddie Plan Big Fee Increases
Fannie Mae and Freddie Mac are both toughening their credit score and down-payment rules as of April 1.
In response, major lenders are already factoring in the higher fees, which reduces the effectiveness of the stimulus efforts.
Under the new guidelines, buyers with down payments of less than 25 percent will be charged a three-quarter point add-on penalty, no matter how high their credit score.
Buyers of duplexes, where one unit is owner-occupied and the other is rented, will be charged a 1 percent add-on.
Refinancers who take cash out will be charged as much as three points if they have a low to moderate equity stake.
Freddie spokesman Brad German says the loan categories and credit risk combinations targeted by these fees “default at four to eight times” the rate of other mortgages backed by Freddie. “We have to manage these risks appropriately,” he says.
5 Tips for Homebuyers Seeking a Mortgage
Here’s a warning for potential borrowers: Nervous lenders have tough new rules and are paperwork crazy.
Before you apply, here are a few things for you to consider: Read the rest of this entry »
Tax Information for Homeowners
If you are like me, you are probably doing your taxes now. Here is the IRS publication regarding what you can and cannot deduct for 2008. Enjoy!
First-time Homebuyer Tax Credit Extended and Repayment Waived
As part of the new stimulus package, i.e. American Recovery and Reinvestment Act of 2009, First-time homebuyers could get a tax credit of up to $8,000 if they buy homes in 2009. The credit refunds 10 percent of the purchase price, up to $8,000, to couples with incomes of less than $150,000. Those making up to $170,000 can get reduced credits, while those making more are ineligible. One nice feature: the credit is refundable.
Eight Tips to Getting a Loan
These days one of the biggest obstacles to closing a real estate transaction can be the buyer’s ability to get a mortgage. BusinessWeek asked mortgage bankers and other real estate professionals for tips on how to get a loan approved. They are helpful tips to give to your clients. For example, borrowers can turn to the government or take steps to boost their credit scores.
Homestead Tax Reduction Deadline Approaching
Pennsylvania residents have until March 2, 2009 to file an application to share in this year’s tax reduction, made possible by revenue from Pennsylvania casinos. The amount of rebate varies according to the school district, but Pennsylvania’s healthy slots proceeds could mean bigger checks than last year for homeowners. Last year, the state estimated the average tax bill would be cut by 10 percent, or about $169. The one-page applications are available on the respective county board of assessment websites listed below:
Government Struggles to Keep Interest Rates Low
Mortgage rates are rising, despite the government’s efforts to hold them down.
The government can’t control all the factors that affect mortgage rates. Mortgage interest has climbed because more borrowers refinanced when rates fell and boosted the supply of mortgage bonds.
Experts also attribute rising rates to expanded borrowing by the government to pay for stimulus packages, worries about Fannie Mae and Freddie Mac, and concerns about whether the central bank will continue to purchase mortgage bonds after June.
The suggestion that the government solve the problem by creating an entity that offers 30-year mortgages at preset rates of 4 percent or 4.5 percent has drawn criticism.
“Not a lot of buyers are likely to want to buy a 3.5 percent mortgage-backed security, so the government may end up being a significant holder of these loans,” said Nicholas Strand, a mortgage strategist with Barclays Capital. “And that number could run up to trillions of dollars.”
