July sales of new homes surge 13.9%, far more than thought

SILVER SPRING, Md. (AP) — Sales of new homes jumped again in July, rising 13.9% as the housing market continues to gain traction following a spring downturn caused by pandemic-related lockdowns.

The Commerce Department reported Tuesday that July’s gain propelled sales of new homes to a seasonally-adjusted annual rate of 901,000, the most since 2006. That’s a far bigger number than analysts had expected and follows big increases in May and June. The government report has a high margin of error, so the July figures could be revised in the coming months.

The recent sales gains followed a steep dropoff in March and April as much of the country stayed home due to government restrictions intended to slow the spread of coronavirus.

In a report last week, the National Association of Realtors reported that sales of existing homes rose by a record 24.7% in July, thanks to historically low interest rates. It was the second big spike in as many months and has helped stabilize the housing market in an otherwise uncertain economic time.

Low inventory of existing homes is pushing buyers into the new homes market, but inventory there is also shrinking. What was a 6-month supply of new homes a year ago is now down to a 4-month supply, thanks to a red-hot market.

The Commerce Department reported last week that construction of new U.S. homes surged 22.6% in July as homebuilders bounced back from a lull induced by the coronavirus pandemic. New homes were started an annual pace of nearly 1.5 million in July, the highest since February. They’ve now risen three consecutive months after plunging in the spring. Last month’s pace of construction was 23.4% above that of July last year.

Sales are being fueled by ultra-low mortgage rates, which earlier this month dropped below 3% for a 30-year-fixed rate mortgage for the first time in nearly 50 years. The average rate on a 30-year fixed rate mortgage is now 2.99%, the mortgage buyer Freddie Mac said Thursday. A year ago, it was 3.55%.

Economists believe low rates and changes in home preferences brought on by the pandemic will continue to support sales, though perhaps not at recent levels.

“Sales may struggle to maintain their July pace going forward,” said Nancy Vanden Houten of Oxford Economics. ”While strong demand and lower mortgage rates are supportive of further growth in sales, the slow recovery and weak labor market pose downside risks.”

Regionally, construction of new homes fell only in the Northeast, which saw a 23.1% decline. The Midwest saw a whopping 58.8% increase, followed by the South’s 13% jump and an increase of 7.8% in the West.

The median price of a new home sold in July increased to $330,600, up 7.2% from one year ago.

Associated Press

UN expert urges states to ban evictions amid pandemic

GENEVA - A UN rights expert called Tuesday for governments to ban evictions until the COVID-19 pandemic ends, warning the number of people being expelled from their homes was rising globally.

Warning of an impending "tsunami" of evictions, Balakrishnan Rajagopal, the United Nations' top expert on the right to housing, stressed that "losing your home during this pandemic could mean losing your life".

The independent expert, who is appointed by the UN but does not speak on its behalf, stressed that "the right to housing is central to any response to the pandemic".

"But now we are seeing an acceleration in evictions and home demolitions."

Rajagopal said that while some governments have implemented temporary bans on forced evictions, many people are continuing to lose their homes.

He pointed for instance to Kenya where more than 8,000 people were forcibly ejected from their homes in a single day in May, and Brazil where more than 2,000 families have been evicted amid the pandemic.

But he emphasized that the danger was global.

"Temporary bans in many countries have ended or are coming to an end, and this raises serious concerns that a tsunami of evictions may follow," he warned. 

"Governments must not allow people to become homeless during this pandemic because they lose their job and cannot pay their rent or mortgage."

His comments came as activists and relief groups in the United States -- the country hardest hit in the pandemic -- scramble to avert seeing millions pushed into homelessness.

The Aspen Institute has estimated that more than 40 million people in the country could be at risk of eviction in coming months. 

"Forced evictions are an outrageous violation of human rights," Rajagopal said.

Agence France-Presse

Apple offers $2.5B to address California housing crisis

Apple said Monday it would commit $2.5 billion over the next two years to help address the shortage of affordable housing in California and reduce homelessness.

The move by Apple follows similar initiatives from Silicon Valley peers Google and Facebook, which each have pledged $1 billion for housing programs.

"Before the world knew the name Silicon Valley, and long before we carried technology in our pockets, Apple called this region home, and we feel a profound civic responsibility to ensure it remains a vibrant place where people can live, have a family and contribute to the community," said Apple chief executive Tim Cook in a statement.

"Affordable housing means stability and dignity, opportunity and pride. When these things fall out of reach for too many, we know the course we are on is unsustainable, and Apple is committed to being part of the solution."

Apple said data showed some 30,000 people left San Francisco between April and June of 2019 and that its efforts are geared to help "community members like teachers, firefighters, first responders and service workers" who cannot find affordable lodging.

Apple said it was working with California Governor Gavin Newsom on several programs to address housing and homelessness.

The iPhone maker said $1 billion will go to the state's affordable housing fund that will extend credit to develop and build additional housing faster and at a lower cost.

Apple also said it would make available land it owns in San Jose worth some $300 million for homes.

The company is committing $200 million to support new lower-income housing in the Bay Area, including $150 for a public-private partnership.

It will also offer $50 million to support the efforts to address homelessness in Silicon Valley with the nonprofit group Destination: Home.

"We have worked closely with leading experts to put together a plan that confronts this challenge on all fronts, from the critical need to increase housing supply, to support for first-time homebuyers and young families, to essential philanthropy to assist those at greatest risk," said Lisa Jackson, Apple's vice president for environment and social initiatives.

source: news.abs-cbn.com

Facebook devotes $1 billion to affordable housing in US

SAN FRANCISCO, United States—Facebook said Tuesday it was devoting $1 billion during the coming decade in affordable housing, most of it in its home state of California.

The leading social network has partnered with Governor Gavin Newsom and others on projects intended to result in as many as 20,000 new housing units for teachers, nurses, first responders and other "essential workers," according to Facebook chief financial officer David Wehner.

"Access to more affordable housing for all families is key to addressing economic inequality and restoring social mobility in California and beyond," Newsom said in a statement.

"State government cannot solve housing affordability alone, we need others to join Facebook in stepping up—progress requires partnership with the private sector and philanthropy to change the status quo and address the cost crisis our state is facing."

Facebook has previously teamed up with community groups and local officials on affordable housing initiatives in the San Francisco Bay area and in the Silicon Valley city of Menlo Park, where it has its headquarters.

In San Francisco, a family of 4 with a household income of $100,000 per year is considered low-income, according to Wehner.

"We've learned that the production of affordable housing across the income spectrum is a problem throughout California and must be addressed through partnerships that bring companies, communities, non-profit organizations and policy makers statewide together to find creative solutions," Wehner said.

Facebook is devoting $250 million to a partnership with California for homes on excess state-owned land where housing is scarce, and will provide $225 million worth of land it has already bought in Menlo Park to be used for more than 1,500 units of mixed-income housing, according to Wehner.

About a third of the money, some $350 million, will be allotted to affordable housing projects across the US, Facebook said.

source: news.abs-cbn.com

Crowded Hong Kong goes underground to overcome land crunch

HONG KONG -- When authorities drew up a plan to make Hong Kong a hub for Asia's wine trade, they faced a big challenge: where to store the bottles in a city that was fast running out of space. So they went underground.

Officials presented World War Two-era bunkers as potential sites, and former diplomat Gregory De'eb and businessman Jim Thompson signed a lease on them, setting up Hong Kong's first commercial wine cellar 20 metres (66 ft) below ground in 2003.

Crown Wine Cellars can store more than 100,000 bottles, and also has a subterranean clubhouse.

"It is the underground aspect of the club that is its most attractive and popular feature," said De'eb. "Members even view the lack of mobile phone reception as overwhelmingly positive."

Hong Kong plans to move more facilities beneath the Earth's surface to free up space above, in one of the world's priciest real-estate markets.

With almost 70 percent of the global population expected to be living in urban areas by 2050, according to the United Nations, cities are coming under the spotlight as never before.

From Singapore to sub-Saharan Africa, they are fast running out of space to house their swelling populations.

Cities have long put metro rail networks, as well as utilities like sewage and water pipes underground, with several also moving commercial, retail and storage facilities down below to free up space or better handle extreme temperatures.

In Hong Kong, known for its towering skyscrapers and wooded hills, sky-high home prices have boosted the urgency of maximizing use of underground space.

The government has vowed to create more land for housing, including by building artificial islands.

It is also looking to use underground space for waste treatment, data centers, water reservoirs, power stations, crematoriums and sports facilities.

The city's rocky terrain lends itself to cavern development as a "cost-effective alternative" for long-term land supply that offers safety, environmental and security benefits, said Edward Lo, Hong Kong's chief town planner.

"Given the lack of land resources in Hong Kong, it has all along been our policy objective to develop underground space," he added.

'BAD' NEIGHBORS

From the catacombs of ancient Rome to step wells in medieval India and army bunkers, underground spaces have been used for a variety of reasons down the ages.

Helsinki and Montreal, which are blanketed in snow for several months of the year, are considered leaders in "underground urbanism", a movement focused on innovative ways to use underground space.

Besides mass transit, growing concerns around the environmental and health impacts of "bad neighbor" facilities such as refuse transfer and waste treatment plants have pushed cities to consider moving those below ground as well.

Underground space is ideal for a densely populated city like Hong Kong, which has more than 7 million people crammed into an area of about 1,100 square kilometers (425 square miles), with less than a quarter of that land available for development.

About a decade ago, authorities unveiled a policy aimed at studying the opportunities in underground space.

In a government-commissioned study, consultancy Arup identified 48 potential underground and hillside sites for new caverns, and some 400 state facilities that could be moved underground.

"The idea was to better integrate facilities, so people can easily move between them, and avoid the conflicts of traffic and weather disruptions above ground," said Mark Wallace, director of infrastructure at consultancy Arup.

"For the city, it results in more efficient use of space, reduces the impacts of urban sprawl, and helps preserve the natural environment," he told the Thomson Reuters Foundation.

While excavation and building underground are more expensive, there are savings on maintenance and land costs, he added.

And less energy is needed because of more stable temperatures underground, an important factor for cities looking to curb their carbon emissions.

Underground structures also perform better in earthquakes and need fewer repairs, while offering better protection from typhoons and thunderstorms, which are forecast to become more severe as global temperatures rise.

Cheaper, fast-digging technologies such as those used by billionaire entrepreneur Elon Musk to build a high-speed transport tunnel in Los Angeles, meanwhile, can cut construction time and minimize disruption above ground.

"As older urban areas in Hong Kong deteriorate and new infrastructure or redevelopment is needed, underground development is a way to build new facilities with minimum disruption to the surface and public," Wallace said.

ENVIRONMENTAL RISKS

Elsewhere in Asia, space constraints and security concerns prompted the development of underground space decades ago in Japan and South Korea.

More than 20 Chinese cities including Beijing, Shanghai and Shenzhen are now making plans for urban underground space, while Singapore unveiled an underground master-plan this year.

Hong Kong, like Singapore, has traditionally relied on reclaimed land, but that is seen as increasingly unsustainable because it fuels environmentally harmful processes like sand mining, said Mee Kam Ng, director of the urban studies program at The Chinese University of Hong Kong.

Digging out space underground can also have effects on groundwater and surface ecology, she said.

Instead, Hong Kong could free up nearly 4,000 hectares through better planning for its existing land resources such as the largely rural New Territories in the north, she said, citing research by the Citizens Task Force, a non-profit network.

Some residents are resistant to the idea of tearing up parks to create shopping malls underground.

An ongoing study of potential underground development in Tsim Sha Tsui has drawn criticism from planners and locals, who say any benefits will be outweighed by the damage to Kowloon Park, a green oasis in the congested city.

The plan proposes that underground spaces be built beneath about a quarter of the 13-hectare park for retail and community facilities, parking and pedestrian passages.

Areas of the park could be affected for up to seven years during construction, while parts of it will be surrendered for access points, opponents say.

Authorities say the development will improve pedestrian movement and reduce congestion, and that "old and valuable trees" will be preserved.

But Paul Zimmerman, chief executive of Designing Hong Kong, an urban think-tank, said the project would wreck the park, while failing to ease traffic significantly.

"Good use of underground space is definitely needed in Hong Kong, and it makes sense in some cases - like roads and sewage treatment, and wine cellars," he said.

"But it does not make sense in others, like building a multi-story complex under a park that will destroy the park's character and only creates more shops and parking."

source: news.abs-cbn.com

Lower rates could boost housing stocks as risks remain: Wall Street outlook

NEW YORK -- Lower US interest rates could help support outperforming US homebuilder stocks, even as they raise worries about the economy, while a bonanza of industry data and Federal Reserve speakers next week are likely to help shape the outlook.

After underperforming in 2018, the PHLX Housing Index is up about 30 percent for the year so far, roughly double the year-to-date gain of the benchmark S&P 500 index.

Mortgage rates have been declining with US Treasury debt yields, and the outlook for interest rates suggests further easing after the Federal Reserve lowered rates last month and indicated it could cut again this year, depending on data.

This week, US 30-year Treasury yields fell to a record low below 2 percent, while benchmark 10-year yields declined to a 3-year trough as trade tensions linger and global economic growth continues to slow.

The 30-year fixed mortgage rate has dropped to 3.60 percent from a peak of 4.94 percent in November, according to mortgage finance agency Freddie Mac. Mortgage rates are often tied to the benchmark 10-year Treasury yield.

Strategists said that could bode well for homebuilders and the housing market, which has been struggling because of land and labor shortages.

A report on Friday showed US homebuilding fell for a third straight month in July amid a steep decline in the construction of multifamily housing units, even as the data provided a positive sign for housing: a jump in permits to a 7-month high.

Next week, the US Commerce Department will release data on July new home sales.

Housing and homebuilding stocks should continue to do well as long as rates remain low, but the potential for slower demand is a risk, said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. "Lower interest rates lead to lower mortgage rates (which) lead to increased demand for homebuilders," he said. "You counter that with potential concerns that, if a recession is coming, even if rates are at historically low levels, demand for everything is going to be somewhat mitigated."

Eric Marshall, portfolio manager at Hodges Capital Management in Dallas, has seen relatively good traction in housing even with the turbulent markets. Lower rates are a plus, he said, along with an unemployment rate at its lowest level in years.

"Consumer savings have come up, household formation continues to grow faster than the supply of housing," Marshall said. "And I think all of those things coming together make for a more stable environment for the publicly traded housing stocks."

Recent results from some top homebuilders were mostly stronger than analysts expected, but some forecasts disappointed investors, underlining persisting problems in the housing market.

Last month, PulteGroup Inc forecast full-year home sales and gross margins below analyst expectations and cited rising land costs, while in June Lennar Corp forecast current-quarter earnings below Wall Street estimates and noted uncertainty triggered by the US-China trade war.

Multiples for some of the homebuilder stocks have jumped this year, but many remain below long-term averages. The S&P 500 homebuilding index, which includes PulteGroup, D.R. Horton and Lennar, is trading at about 9.5 times forward earnings, up from about 7 at the start of the year but well below a long-term average of 14.6, based on Refinitiv's data.

Wedbush analysts in a research note on Thursday said that builders have been reducing square footages as mortgage rates have declined, which has addressed affordability issues. The firm has a bullish bias on homebuilder shares, with an "outperform" rating on William Lyon Homes, Beazer Homes USA, Lennar and others.

Investors will pay close attention to comments from Fed Chairman Jerome Powell, who is set to give a speech on rates and policy at the annual Jackson Hole, Wyoming, policy symposium.

"The fact that the Fed has moved to a more dovish position suggests that those rates should remain relatively low compared to what ... we saw in late 2018," said Robert Dietz, chief economist for the National Association of Home Builders.Jerome Powell, who is set to give a speech on rates and policy at the annual Jackson Hole, Wyoming, policy symposium.

"The fact that the Fed has moved to a more dovish position suggests that those rates should remain relatively low compared to what ... we saw in late 2018," said Robert Dietz, chief economist for the National Association of Home Builders.

source: news.abs-cbn.com

10 dead as building struck by car collapses in India

NEW DELHI - Ten people have died after a car crashed into a dilapidated building in central India and brought down the near century-old structure, burying them beneath rubble, police said Sunday.

The freak accident in Indore on Saturday evening is the latest building disaster in a country infamous for poor construction and safety standards.

The driver lost control of his vehicle and struck a pillar holding up the near 100-year-old structure, said police deputy inspector general Harinarayanchari Mishra.

"The impact was such that the entire building collapsed," he told AFP.

"Rescue workers pulled out 12 people from the rubble, 10 of them were already dead. The other 2 are being treated in hospital."

Images from the scene showed battered and bloodied corpses being pulled from twisted piles of brick and concrete. The rubble was being cleared with cranes and industrial equipment.

Building disasters are common in Indian cities where millions are forced to live in cramped, run-down properties due to spiraling real estate prices and a lack of proper housing.

Activists say owners often cut corners on construction to save costs with little regard to safety.

Some 30 people perished in September last year when a 117-year-old apartment building collapsed in India's financial hub of Mumbai.

And in 2013, 60 people were killed when a residential block came crashing down in one of the country's worst housing disasters.

source: news.abs-cbn.com

NYC mother seeks millions from city after child's lead poisoning

NEW YORK - A Brooklyn mother is seeking millions from the city after her toddler was poisoned while living in a lead-infested apartment, the latest charge that New York has failed to protect children from the toxin.

Natalia Rollins, a 25-year-old mother of two, informed the city this week of her intent to sue and filed a separate lawsuit in Brooklyn’s Kings County Supreme Court against her landlord and property managers, filings show. The claims say her son Noah, 2, was exposed to lead paint in a hazardous Coney Island apartment.

In 2015, city agencies helped place the formerly homeless family into the privately owned apartment, telling her the dwelling was safe for her two infant sons, Rollins contends. A city program covered much of the $1,515 monthly rent.

Rollins complained about the apartment’s conditions, she said – but the full scope of lead hazards, including toxic peeling paint around Noah’s crib, wasn’t detected until after his September lead poisoning diagnosis, when city health officials swooped in to document the unsafe conditions.

Rollins’ claims, filed by her attorney, Reuven Frankel, come as the New York City Housing Authority, NYCHA, is under fire for failing to conduct required annual lead paint inspections in public housing complexes. The New York Post reported last month that lawsuits stemming from NYCHA’s inspection failures could cost the city up to $100 million.

Though Rollins doesn’t live in NYCHA housing, her suit alleges official neglect and improper enforcement of city lead inspection standards in a private apartment.

City hall spokeswoman Olivia Lapeyrolerie said that although city workers assist some homeless families in finding and paying for rental units, the choice of where to live remains up to the tenant.

Last month, a Reuters investigation featured the Rollins family and charted lingering risk areas around a city long known for its fight against lead poisoning.

The report showed that New York hasn’t been policing provisions from a 2004 city code that requires landlords to annually inspect for and abate lead paint hazards in housing built before 1960.

When Reuters visited Rollins’ rental unit last month, the place had peeling paint, cockroaches, buckling floors, a broken window and no heat. City records showed 163 open housing code violations.

City officials told Reuters they are trying to contact Rollins to help her find a new apartment. Meanwhile, the city’s housing department, HPD, has fined the Brooklyn landlord nearly $15,000 and has stepped in to perform repairs and bill the landlord.

The 116-year-old building has been on the citywide list of the 200 “most distressed” multi-unit dwellings for years. Its landlord, Ervin Johnson, is currently ranked number 14 on a city list of the “100 Worst Landlords.”

Johnson didn’t respond to a request for comment, but the building's property manager said he recently offered to move Rollins' family to another apartment and they declined.

source: news.abs-cbn.com

Is the 30-Year Fixed Mortgage Actually a Lot of Work?

I typically refer to the 30-year fixed mortgage as a set-it-and-forget-it type of mortgage because it’s fixed for the entire duration of the loan.

The mortgage rate in month one is the same as the rate in month 360. The mortgage payment never changes, though the total housing payment could vary thanks to things like taxes, insurance, and PMI.

Put simply, it’s a very easy mortgage to wrap your head around, and for that reason the most popular and common choice for homeowners here in the United States.

The same isn’t true elsewhere in the world, which is one of the reasons why the 30-year fixed has been questioned a lot lately by economists and mortgage pundits.


The latest opinion comes from Benjamin Keys of The Wharton School of the University of Pennsylvania, who analyzed how monetary policy makes its way into households via the mortgages borrowers hold.

During the most recent crisis, those with adjustable-rate mortgages actually “won” in a sense because their rates adjusted lower when the government stepped in and bought tons of mortgage-backed securities while lowering other borrowing rates.

Meanwhile, those with fixed rates didn’t benefit at all, and in fact were trapped in their mortgages because of equity issues, namely underwater mortgages.

This meant those who ostensibly took on more risk were rewarded when the wheels fell off. And those who were seemingly prudent in their mortgage choice were punished because they were unable to refinance until HARP came along.

Does that mean we should all go with ARMs instead of fixed-rate loans and hope the government takes care of the rest?

Is an ARM the Hands-Off Mortgage Solution?

Keys noted that there is an “automatic transmission of monetary policy through adjustable-rate mortgage contracts.”

In other words, the ARM adjusts with the greater economy and the borrower doesn’t have to go out and refinance or lift a finger.

Their lender will just adjust their payment as the index changes, whether it’s up or down. Of course, lately it’s been a one-sided argument, with ARMs generally falling at the reset, instead of climbing.

This has actually led to debt reduction and new spending, with borrowers who selected ARMs choosing to pay down higher-APR like credit cards while also purchasing new cars.

Effectively, the economy was stimulated via these ARMs because it freed up cash for households to inject back into the economy through other channels.

Mortgage defaults in this group also dropped by some 36% thanks to the reduced monthly payment.

To summarize, borrowers with ARMs didn’t need to do anything to obtain lower payments, despite the fact that most probably assumed they’d have to refinance out of the ARM once it adjusted (higher).

At the same time, their neighbors with fixed-rate mortgages set at 6% were probably shaking their heads, wondering how they wound up paying more.

Additionally, they had to keep a close eye on interest rates to ensure they weren’t paying too much, and then make the decision to refinance or not. That meant a lot of work (and worrying), ironically.

Interestingly, Wharton researchers found that regions of the country that had more ARMs recovered faster during the Great Recession, saw more auto sales, and increased local employment.

Could the Opposite Happen?

The problem is ARMs can move both up and down, and everyone (including Wharton) expects rates to go up the next time around.

The big question is how things will play out when that happens. Will the borrowers who elected to take out ARMs get burnt and require a bailout?

Will home prices go down more in the areas where ARMs were more popular?

If so, might the 30-year fixed prove to be the winner it was expected to be prior to the most recent housing crisis? And as such, should it be left alone?

All to be determined…but there’s a good takeaway here. Monetary policy can dictate whether ARMs adjust higher or lower, so in that sense the Fed has the ability to provide direct stimulus to homeowners, without tax rebates or mass refinancing programs. That’s a pretty powerful thing.

But if homeowners keep opting for the 30-year fixed, it’ll be difficult for the Fed to do a whole lot, and these homeowners might just find that their mortgages are a lot more work than they expected.

source: thetruthaboutmortgage.com

Robredo backs Duterte's housing policy

MANILA - Vice President Leni Robredo on Tuesday said that she is pleased to know that President Rodrigo Duterte's policy direction on housing ''jibes'' with her own as housing chief.

Robredo said she agrees with Duterte's policy that demolition of informal settlements can only be carried out once a relocation site has been provided.

"Masaya ako kasi klaro rin na na-lay down niya yung kaniyang paniniwala na ano to nagjajibe rin sa ating paniniwala. Unang una, walang demolisyon kung walang relokasyon at walang relokasyon kung hindi maayos yung facilities sa relokasyon," Robredo told reporters on Tuesday morning.

"Ito yung pinaka binigyan rin natin ng diin mula nung nag umpisa tayo sa consultation sa lahat ng stakeholders sa HUDCC [Housing and Urban Development Coordinating Council]. Mahalaga na nanggaling mismo sa bibig ng ating pangulo at sinabi niya sa SONA kasi ito talaga yung policy direction sa housing."

Robredo said that as head of the HUDCC, she wants to give emphasis on relocating informal settlers in the city if possible, or at least near their places of livelihood.

"Marami na akong relocation sites na binisita sa labas ng Metro Manila na galing sa Metro Manila 'yung mga inilikas doon. Parang hindi naman niya nabigyan ng permanenteng solusyon 'yung housing kasi ang nangyayari, kukuha siya ng bahay sa labas, pero babalik pa rin - at least 'yung head of the family - kung saan siya nandoon, magbo-board and lodging siya," Robredo explained.

Robredo added, there is also a social cost to this as families are split apart.

"Kasi mabuti kung 'yung pagre-relocate-an natin merong available na ibang trabaho, may livelihood. Karamihan wala naman. At least 'yung mga nabisita ko, wala. So talagang dumadagdag lang nang dumadagdag 'yung housing na problema."

Robredo said, the big challenge is the lack of available land inside the city for the relocation of informal settlers. She said the government has the option to provide mid- to high-rise housing structures, but noted that the investment cannot be too expensive, as the families would not be able to afford it.

"Kapag masyadong mahal, 'yung lupa hindi nila kaya. 'Pag tumaas na 'yung height sa 5 floors, kailangan na ng elevator, kapag may elevator, dadagdag na naman 'yung cost," she explained.

The Vice President said that they are currently studying which existing models will be best to replicate in order to solve the housing problem, adding that participation of the private sector is key.

source: www.abs-cbnnews.com

Are New “For Sale by Owner” Sites Changing the Rules?

When home prices rise steadily over several straight years, seller’s markets crop up where demand is strongest. One of the side effects is a renewal of interest among home sellers in trying to find a way to forgo the traditional six percent commission that real estate brokerages charge. Typically, that means marketing their homes on their own.

During the current three-year old housing recovery, however, there’s no sign that more sellers are going “FSBO”, or “for sale by owner.” Since 2012, sale prices have risen about 20 percent, according to CoreLogic.[1] In several of the hottest markets like Riverside CA or Los Angeles price increase are near or exceeding 10 percent in 2015 alone.[2]


Despite the strength of the recovery, interest among home sellers in going it alone has yet to materialize. According to the National Association of Realtors’ annual Profile of Home Buyers and Sellers, only 8 percent of sellers went FSBO in 2014, fewer than in 2013 and the smallest share since the association started collecting data in 1981.[3] But a lot has changed in 35 years and NAR’s survey may not be providing a complete picture of how the Internet may be empowering consumers to reduce the fees they pay real estate brokerages.

The traditional definitions of FSBO may mask a growing trend among many sellers to do more of the marketing themselves with the help of the Internet and brokerages using newer models.

Here are a few of the new ways people are saving when selling their home:

Auctions. Foreclosure auctions were a significant part of the real estate business four or five years ago and now online auctions have become an increasingly popular way for owners to sell their homes at a good price without having to wait for months. Sites like Auction.com and Hubzu.com offer incentives to buyers to buy their next home at an auction.

Discount brokers. There is nothing new about brokerages that offer their services at rates significantly less than their competitors. Most, however, provide less service for their lower prices. Redfin is probably the best known of a new breed of brokerages that gives buyers rebates and sellers commissions as low as 1.5 percent without reducing service.[4]

Owners.com gives buyers a rebate equivalent to about 1.5 percent of brokerage fees after the closing. The rebate comes from the 3 percent commission that traditionally goes to the buyer’s agent.

Fee for service/listing on MLS. During the housing boom that ended ten years ago, demand was so strong that many owners saw no need for a real estate agent with one exception—they wanted to list their homes on their local MLS. Dozens of brokerages went into business by simply listing homes for a flat fee of $500 to $1000 and not providing other marketing services, or providing other services for fixed fees.

 New online tools. Ten years ago the first web sites and online brokerages for FSBO owners created the first listing inventories of FSBO homes and distributed turnkey tools like yard signs and brochures. Today a new breed of sites has taken FSBO tools to a new level.

Sites like forsalebyowner.com and owners.com provide sophisticated advice and unique tools to help owners value their properties and price them properly. Owners.com provides a trend tracking tool that helps owners see priding trends down to the neighborhood level.

source: totalmortgage.com

Property Developer articulates low-cost housing

8990 Holdings Inc. Chairman Mariano Martinez claims there are 4.2 million units of unserved demand in the low-cost housing market.

To talk more about low-cost housing venture, Martinez visited Mornings @ ANC's Breakfast with CEO.

source: www.abs-cbnnews.com

What is the Fannie Mae HomePath?

Fannie Mae takes many precautions to decrease the chance of properties with their mortgages foreclosing. However, it isn’t possible to stop all foreclosures.

So when it inevitably does happen, the best thing is to sell that home quickly.

That’s the goal of the Fannie Mae HomePath program—to resell foreclosed homes in a timely manner so as to minimize the negative impact on communities.


How foreclosures negatively affect communities

1. Lower housing values

It’s been demonstrated that foreclosures bring down property levels of nearby homes. It’s different in every area, but the most common reasons for this are “distress sales” of foreclosed properties, the eyesore abandoned homes can create, vandalism, and increases in crime.

2. Harm the broader economy
 
Falling home values kicks off a domino effect that ultimately impacts the whole economy. Consumer spending and new construction both take hits, which spurs jobs loss and unemployment. The snowball gets bigger as more homes are then foreclosed, leading to less spending and investment all around.

3. Decrease revenue for local governments

Property tax is a major source of revenue for local governments. So when foreclosed homes bring down the value of surrounding properties, the local government can see significant losses. In addition, local governments will often have to pay for the upkeep of foreclosed homes until they’re sold.

Clearly, foreclosed homes create many far-reaching problems.


How the Fannie Mae HomePath helps


1. Online directory

With thousands of homes in an online directory, the HomePath program allows buyers to easily browse available foreclosed homes. All of the filters a buyer would want, such as price, number of beds/baths, property type are available under advanced search. There are also pictures with every listing, making it easy for buyers to quickly get a feel for the property.


2. Upkeep

Maintenance standards are another important aspect of the HomePath program. All properties are kept in line with local codes, and requirements and are maintained so as to be ready for sale at a moment’s notice.

Fannie Mae works with maintenance workers on the local, state, and national level to make sure all properties get the care they need, from removing trash, to securing the property, and seasonal care like winterization.

To ensure the upkeep is done in line with quality standards, Fannie Mae has their own agents and quality control specialists inspect the properties, as well as third party inspectors. Not only does this upkeep help homes sell faster, but it also supports neighborhood stabilization.

In the past, real estate owned (REO) properties—such as foreclosures—have had a stigma attached to them that can dissuade buyers from purchasing. The Fannie Mae HomePath program, with its focus on upkeep and selling homes quickly, has done much to reverse that image and make foreclosures a serious consideration among homebuyers.

source: totalmortgage.com

How to Pay the Mortgage with a Credit Card for Free and Make Money Doing It

Back during the housing boom aka meltdown there were services that allowed homeowners to make their mortgage payments with a credit card.

These services charged fees for the convenience, and looking back, they were probably only offered because people couldn’t keep up with their mortgage payments.

Unsurprisingly, these services seemed to disappear as quickly as they surfaced, but there are still options to pay the mortgage with a credit card each month free of charge.

The difference today is that this method/idea is more about earning credit card points (or cash back) for paying your hefty mortgage payment, not so much about simply paying it.


Let me preface this by saying it makes no sense to pay your mortgage with a credit card if you can’t afford to pay it otherwise.

The only purpose of this method is to earn points and/or cash back as you would on other purchases made with a rewards credit card.

You Can Pay Your Mortgage with American Express Serve


Perhaps the easiest method I know of involves American Express Serve, which is referred to as a reloadable prepaid account.

In reality, it basically works like an online bank account in that you can transfer/load money to it and then pay everyday bills or make purchases with the associated prepaid card.

Let’s focus on that paying bills part. Your mortgage is a bill and it must be paid each month until maturity, just like other recurring bills.

But loan servicers don’t give homeowners the option to pay with a credit card (for good reason!) unlike most other bills.

The Serve method entails loading the account with a credit card, and then using the funds to pay your mortgage. I suppose you can use a debit card as well if it earns rewards.

The purpose of this is to get rewards on that large amount of money spent, so if the credit/debit card doesn’t earn rewards, there’s no point in doing this.

And you need to pay off your credit card in full each month to avoid any interest or fees to offset the benefit of doing it to begin with.

A couple warnings/issues with this method:

– You need to make sure your credit card issuer doesn’t charge fees to load Serve (American Express warns of this possibility on the website)
– The max you can load with a credit or debit card each month is $1,000 ($200 per day)
– The limit increases to $1,500 a month ($500 daily) if you get Serve with Softcard, formerly known as Isis Wallet
– You actually need to pay off the credit card charges to avoid interest/fees

As noted above, you can load your Serve account with a credit card, but even American Express warns that you could be charged fees by your card issuer for doing so.

I’ve used a Chase credit card and there was no fee or issue. It just showed up as a standard purchase.

But to avoid any mishaps, testing with a small amount or asking your credit card issuer to lower your cash advance limit to zero (or as low as possible) might be a good idea before giving it a whirl.

Once the necessary funds are in the Serve account, you’ll be able to see your available balance. Assuming it’s sufficient to cover your full mortgage payment, you simply select “Pay Bills” from the dropdown menu then add a payee.

While certain payees are already in Serve’s system, you’ll likely need to add your loan servicer manually, including their address and your loan number.

It should be the address where you would send a paper check because Serve is basically cutting a physical check on your behalf. It’s essentially a bill pay service. This is exactly why it works.

You’re not actually paying your mortgage with a credit card – rather, you’re funding an account with a credit card then sending those funds to your servicer via check, a much more accepted form of payment.

Once you save the payee information, you can make your mortgage payment via Serve each month. There’s even a memo section where you can write your loan number and any other details to ensure the payment is processed properly.

Note that payments can take several business days to process, so it’s not as quick as making a payment online. Fortunately, mortgage due dates are fairly flexible. But you’ll want to give yourself a cushion to avoid paying late if anything goes wrong.

The Downside to This (or Any) Method


While it’s kind of cool to pay your mortgage with a credit card, it does require some work, as noted above. And if you have a jumbo mortgage payment, this method probably won’t work very well given the low funding limits.

You certainly won’t want to send partial payments and find out that your loan servicer paid down your principal or simply returned your check.

Sure, you can load money from a credit card and bring in the shortfall from a checking or debit card, but at that point it might not be worth your time and energy.

After all, how much will you really “earn” from using a credit card. If your monthly mortgage payment is $1,000 a month, this method should work out okay.

But that would only equate to 12,000 points or miles annually, which is worth maybe $120 or slightly more if redeemed for travel or something more lucrative.

The earnings could also be used to pay down your mortgage a little bit faster if you put it toward the principal balance.

In that sense, it could be worth it. Just be careful not to miss a mortgage payment in the process.

source:  thetruthaboutmortgage.com

You Can Get Interest-Only Mortgages from Mortgage Brokers Again

Party like it’s 2006! Mortgage brokers are now able to peddle interest-only mortgages to qualified borrowers nationwide.

Oh wait, that last part about being qualified isn’t really reminiscent of 2006, but I’ll get to that in a moment.

This week, United Wholesale Mortgage announced a new offering, interest-only mortgages, those which happen to fall outside the ever-important Qualified Mortgage (QM) rule.

That means they’re pretty hard to come by these days, especially via a smaller bank that isn’t dealing in jumbo loans to wealthy clientele.


UWM also happens to be a wholesale mortgage lender, meaning they work with mortgage brokers who connect with homeowners.

 Here We Go Again?


Both mortgage brokers and exotic loans types like interest-only mortgages were blamed for the most recent housing crisis, but this time things seem to be a little different, at least for now.

The lender, which claims to be “one of the nation’s largest and fastest-growing wholesale lenders,” has some pretty tough requirements attached to the loans.

For one, you need a minimum FICO score of 720, so there certainly won’t be any subprime interest-only stuff floating around.

And perhaps more significantly, you need to bring at least 20% for a down payment, as the max LTV is 80% on this new program.

That’s certainly important, given the fact that an interest-only loan only pays off interest, no principal. So if home prices are flat, or worse, fall, the borrower could wind up with little to no equity to serve as a buffer for the lender in the case of default.

The program also calls for a max DTI ratio of 42%, strangely one percentage point lower than the max DTI on QM loans.

So one might say it’s quite a bit different this time around, even if it’s still an interest-only mortgage.


Not Your Uncle’s Interest-Only Mortgage


During the lead up to the crisis, it was common to see IO loans with no money down that only required subprime credit scores. Obviously lending like that when home prices were peaking was a recipe for disaster.

Today, UWM sees the offering as a way for “savvy” homeowners “to save additional discretionary income.”

In other words, they can afford a fully amortizing mortgage, but they want to pay interest-only so they can put their money elsewhere.

There’s no problem with that, so long as the borrower is actually savvy and knows what they’re getting into. And also has a way to get out of it if things don’t pan out.

Brokers should get a competitive boost as well by gaining access to a wider product range to offer borrowers.

For the record, their IO product is just like the stuff that came before it – a 10-year IO period followed by a fully amortizing 20-year payback period.

That means monthly mortgage payments will jump once the initial 10 years are up, though if these borrowers are truly qualified, they should be able to handle it. Or simply refinance or sell before that time is up.

In any case, it’s definitely interesting to see lenders dipping their toes back into the interest-only pool, especially seeing that the Consumer Finance Protection Bureau refers to IO loans as “toxic.”

source: thetruthaboutmortgage.com

6 Ways to Lower Your Interest Rate

If you’re in the market to buy a house, you probably see dozens of advertisements from lenders trumpeting interest rates that seem impossibly low.

Actually those are real rates—but they are reserved for a very elite few borrowers with the best credit, the largest down payments, and the ability to qualify for pretty much any loan amount. The rest of us never see those kinds of rates.

Many factors determine the rates lenders charge. These include their cost of money, which is a function of a long list of factors ranging from the prime rate that the Federal Reserve charges banks to the cost of money in the global economy. The amount they want to make on the loan, the risk each borrower presents, and even the lender’s location all impact the actual rate that the lender will quote you when you apply for a loan.

You can’t do much about these factors, which is why it is wise to shop around widely for a lender. After all, you are about to take out the biggest loan of your life. However, there are a number of factors that determine your interest rate that you CAN do something about.

Knowing what they are and know how to influence them can save you hundreds of thousands over the life of your mortgage.

1. Credit score

Your credit score helps lenders predict how reliable you’ll be in paying off your loan. Your credit score is calculated from your credit report, which shows your payment history on loans and debt over the past seven years.

Other factors, such as the amount of credit you can access and recent requests for credit reports from lenders, also impact your credit score. In general, if you have a higher credit score, you’ll be able to get a lower interest rate.

Before you begin shopping for a home, review your credit report carefully. Clean up errors. Make sure you pay every bill promptly and don’t take out credit cards or lines of credit that you don’t need. If you have too much credit, pay off some of your cards and close the accounts. Avoid applying for new credit until after you close on your home.

Only apply for your mortgage with lenders you have researched and are serious about; every time your credit history is pulled, even if you never do business with the lender who makes the inquiry, it hurts your credit rating

2. Loan amount

Typically, you’ll pay a higher interest rate if you’re taking out a particularly small or particularly large loan. If your loan exceeds the loan limits for FHA, Fannie Mae and Freddie Mac, you will have to take out a jumbo loan, which could raise your rate by several points.

In 2015, the loan limits for single family homes range from $417,000 to $625,000, depending on location. Just because you are pre-approved by a lender to borrow a large amount, be prepared to pay a higher rate if you decide to borrow the maximum.

As a general rule, it is not wise to end up with a mortgage at the upper limits of your pre-qualified or pre-approved ceiling. You are taking more risk in a depressed market, like the one that hit in 2007, you could find yourself “house poor” and under-equitied, leaving yourself vulnerable to foreclosure.

3. Down Payment

The amount of your down payment affects your interest rate because larger down payments lower the amount of the loan and, therefore, lower the risk that the lender incurs.

Lenders will reward larger down payments with better rates; they want borrowers who are willing to put a larger personal stake in the property. So if you can put 20 percent or more down, do it—you’ll usually get a lower interest rate. You will also pay less interest over the life of the mortgage.

4. Loan Terms

Shorter term loans have lower interest rates and lower overall costs but higher monthly payments. Interest rates come in two basic types: fixed and adjustable.

Fixed interest rates don’t change over time but adjustable rates have an initial period—usually five to seven years–that is lower than a fixed rate. At the end of the initial period, they “reset” and fluctuate based on market factors.

5. Loan Type
You may have wider variety of loans from which to choose than you realize and these may have different interest rates. If you are a veteran, you may qualify for a VA loan. An FHA loan will get you a lower down payment than a conventional loan because the government is taking on most of the risk.

Many state and municipal housing authorities offer loans similar to FHA loans at lower down payments and rates than commercial lenders. Most have income limits and some down payment assistance programs are limited to first-time home buyers.

6. Timing and Locking

In mortgages, timing is everything. Mortgage rates can change quickly and missing a “bottom” as interest rates change can cost you a lot over the life of a mortgage. Follow the financial news carefully. Try to time your house search to correspond with changes in rates. If you think rates are going to rise, act quickly. If they are falling, take hour time until you think they won’t fall further.

When your loan application is approved, lenders are obligated to offer you an agreed-upon rate regardless of whether mortgage rates have changed between the time of the loan approval and the closing date.

However, many lenders will let your rate continue to float until you close so that you can lock in the best rate during the lock-in period. A rate lock is a guarantee from a mortgage lender that they will give a mortgage loan applicant a certain interest rate, at a certain price, for a specific time period.

The price for a mortgage loan is typically expressed as “points” paid to obtain a specific interest rate. (Points are basically prepaid interest, so the more points you pay, the lower the interest rate; 1 point equals 1 percent of the loan amount.) Locked in rates are good for 30, 45 or 60 days and can be extended if closing takes longer.

source: totalmortgage.com

New Bill Touts Shared Equity Mortgage Modifications

While the housing outlook has certainly improved significantly, some 5.1 million homeowners remain underwater on their mortgages.

This means they are unable to sell their homes because they owe more than their properties are worth, and possibly barred from a refinance unless they can take advantage of a program like HARP.

While 5.1 million is a lot less than it used to be, it still represents more than 10% of all homes with a mortgage, per data from CoreLogic.

Additionally, some two million of these unlucky homeowners owe at least 25% more than their homes are currently worth.

Clearly this doesn’t provide much motivation to stick around and make costly monthly mortgage payments, especially if these homeowners can’t take advantage of today’s low rates.


Principal Reduction Today for Your Appreciation Tomorrow

Enter a new bill aimed at tackling the problems associated with underwater mortgages, like high default rates and zombie foreclosures, the latter of which results in property blight.

The so-called “Preserving American Homeownership Act,” introduced this week by U.S. Senator Robert Menendez (D-NJ) is essentially a shared equity mortgage modification program.

It’s supposed to be a win-win situation for both homeowners and lenders, giving each party motivation to modify and keep up with payments, respectively.

The way it works is fairly simple. A borrower with an underwater mortgage has their principal balance reduced to 100% of the current value, provided the borrower can make payments.

The principal reduction takes place over a period of three years or less, in increments of one-third each year. So if borrowers make timely payments their principal balance will be reduced further over time.

The mortgage rate may also be cut if the principal reduction isn’t enough to make payments affordable.

Once it comes time to sell or refinance, the bank (or investor) will received a fixed share (up to 50%) of the increase in the home’s value. This amount cannot exceed twice the dollar amount of the principal reduction.

The value will be assessed via appraisal when the borrower first enters the pilot program, and again when they sell or refinance.

The program would be available on primary and secondary homes, and borrowers would be eligible regardless of how deeply underwater they are.

The plan is to launch two pilot programs, one under the FHFA and another under the FHA.

Menendez noted that a similar program launched by a private mortgage servicer led to a near-80% participation rate and a re-default rate of just 2.6%.

That sounds pretty good, especially when you’re giving away half of your future appreciation. The question is whether this type of relief comes a little too late in the game.

But for those who really love their homes and want to remain in them, it could be a lifesaver seeing that widespread principal reduction never came to fruition.

 (photo: Jonathan McIntosh)

source: thetruthaboutmortgage.com

Micro-apartments, anyone?

NEW YORK - New York, a city of exorbitant rents with more and more single residents, is about to get a brand new type of apartment: micro-units, for decades prohibited under zoning regulations.

A first building of 55 prefabricated studios spanning nine stories is due to welcome its first tenants in Manhattan in the fall.

Between 260 and 370 square feet (24 and 34 square meters), they come equipped with kitchenettes, shower rooms, storage, large windows, nine foot six (2.9 meter) ceilings and a Juliet balcony.

In New York, 31 percent of the population lives alone, both young and older people, according to the statistics office.

"We don't have the stereotypical nuclear family as we used to with two parents and two children," said Tobias Oriwol, project developer at Monadnock Development which is building the pilot.

"People are marrying later, people are divorcing, people are living longer, deciding to cohabitate," he said.

"But the housing industry keeps delivering two bedroom apartments, one bedroom apartments, three bedroom apartments, and these don't fit the needs of these new households in the city," Oriwol added.

At the Brooklyn Navy Yard, dozens of workers are building the micro-units, which will be transported by truck to the building site, which is owned by the city, at 27th Street in east Manhattan.

They will be assembled in two weeks in June. Then the roof will be put on, the brick facades added and the finishing touches added to the exterior and the layout before the first tenants arrive.

Inside each unit, everything has been meticulously thought out: in the kitchen there is a mini dishwasher, mini fridge, two hobs and a microwave but no traditional oven.

Common areas

"We did a lot of research on what people wanted. We had to make choices," said Oriwol. "Our apartments are 100 percent usable, and meant to be lived in by today's people."

The tenants, who are expected to be of all ages and backgrounds, can rent additional storage space, and have access to a large communal kitchen, a TV room, a laundry, a bike shed and a gym.

"You may not need to host 15 people in your very own apartment, but you have the ability to do so in the rest of building," Oriwol explained.

Twenty-two of the studios will be classified as affordable housing while the other 33 will be offered at market price.

Studios in the neighborhood cost around $3,200 but "because these are smaller, it makes sense they will be cheaper," said Oriwol.

Developers and housing advocates are closely following.

In New York, regulations designed to help families have prohibited the construction of housing units smaller than 37 square meters in much of the city since 1987.

Under this pilot program, then mayor Michael Bloomberg waived the zoning regulations for the site to test the market for this new housing model.

If the project is deemed a success, many hope that the regulation can be lifted altogether.

The regulation does not correspond to the needs of people today, says Sarah Watson, deputy director of the Citizens Housing Planning Council, a non-profit research organization devoted to housing problems in New York.

Supply mismatches demand

"Actually only 18 percent of the households in New York City are nuclear family with all children under 25," she said.

"A third of all of the households are a single person living alone, and on the other side, about a quarter is people sharing in some way, to fit themselves into the city," she said.

Current legislation also prohibits the cohabitation of more than three people who are not related. Watson says there is a "big mismatch" between need and supply that often inflates rent.

"There are so many single people and such a small amount of well-designed studios for them that actually the price of studios are inflated," she said.

"If you artificially add five single people to share a unit then the landlord can get an lot more money for that unit."

If supply better matched demand, prices could also come down, she said.

Watson says that out of necessity, New York should offer more choice particularly with the city projected to absorb hundreds of thousands of new arrivals in the coming years.

The city that never sleeps, which is frequently a trend setter, is lagging behind other American cities on micro-units.

Boston, San Francisco, Seattle and Washington have already jumped on the micro-apartment bandwagon.

If the pilot is deemed a success in New York, then others will follow. And developers, never short of ideas, are already planning other micro-concepts, such as two or three bedroom 46-square-meter apartments, suitable for two or three roommates.

source: www.abs-cbnnews.com

Mortgages are Getting More Affordable for First-Time Buyers

Thanks to a series of recent decisions, authorities are opening up the mortgage marketplace to more first-time and low-income homeowners.

Last month, Fannie Mae and Freddie Mac announced that they will begin backing fixed-rate mortgages with down payments as low as 3%. Then, last Thursday, the President announced a 0.5 percent cut to the mortgage insurance premiums the Federal Housing Administration requires—making the already easier-to-qualify-for FHA loan even more affordable.

This comes at a time when lawmakers are looking for ways to jumpstart a slow-moving housing recovery. The theory is that tight lending is keeping thousands of buyers out of the game, and that relaxing certain requirements could be enough to coax the market back to its pre-2006 vigor.

However, this loosening trend has also sparked worries that lax lending may lead us to another housing bust. Fannie Mae and Freddie Mac have attempted to allay fears by explaining that borrowers will still have to meet strict criteria. They must have a credit score of at least 620, buy private mortgage insurance, and receive home ownership counselling.

Meanwhile, the projections for the president’s insurance premium cuts are impressive. The White House expects these cuts to allow up to 250,000 new people to take advantage of the FHA loan program, and the FHA’s reserve fund are projected to grow by 7 to 10 billion dollars this year with the cut—vital, as the FHA has needed hefty federal bailouts in recent years.

Wondering where we stand in all this? Take a look at our interest rates.

What does all this mean for you?

 

That depends on your needs. Because these cuts are aimed at attracting new buyers, those are the same people they benefit the most.

If you’re already considering going with an FHA loan for its low down payment option, the Fannie Mae/Freddie Mac down payment cuts gives you another choice to consider. FHA loans give you the option to put as little as 3.5% down, but they require borrowers to pay private mortgage insurance for the life of the loan. The Fannie and Freddie programs, meanwhile, will allow you to cancel your insurance once the mortgage balance drops below 80% of your home’s value, saving you money.

The Fannie Mae and Freddie Mac cuts take (or took) effect December 13^th and March 23^rd, respectively, and currently apply to just fixed-rate loans.

As far as the president’s proposed mortgage insurance cuts go, they too will have the most impact for those looking at low down payment (or low credit rate) options, namely FHA loans. The White house expects the typical first-time homebuyer to save $900 a year on mortgage payments. The insurance cuts will affect buyers with FHA case numbers issued January 26^th or after, though at the moment, lenders will be allowed to cancel numbers issued before the 26^th.

If you’ve just closed an FHA, you may not be entirely out of luck. You will have to wait 210 days (or make 6 mortgage payments) before you’re eligible for a Streamline Refinance, but you will be able to get the insurance cut eventually.

Want to take advantage of these new requirements? Apply now for a personalized quote.

source: totalmortgage.com

Four Things You Need to Do Before Listing Your House

If you’re eager to sell your home and buy a new one, you might rush to put your house on the market. However, you should take a step back and really assess the situation. If there’s a lot of competition in your local market, your property can sit for several months with little interest. This can be frustrating and discouraging. For that matter, don’t rush. Here are four things you need to do before listing your house for sale.

1. How much do I owe?

 

Emotions may persuade you to sell your house quickly. Maybe you’re expanding your family and need a bigger home. Regardless of the situation, you need to crunch the numbers and determine whether now’s the right time to sell.

Take into consideration how much you owe the mortgage lender. Visit your lender’s website or call the bank to get a payoff amount. Once you have this information, determine how much you’ll need to sell the property for. A real estate agent typically requires a 6% commission, and if proceeds from the sale will go toward the down payment on the next property, decide how much you’ll need to profit from the sale.

For example, if you owe the bank $140,000, and realtors charge six percent commission, and you need a $7,000 down payment to purchase a new property, given these numbers you’ll need to sell for at least $155,400. The next question is: can you sale for this amount?

You may think you can get a certain price for your home, but the local market ultimately determines the value of the house. A realtor can provide comparable sales and statistics to help you understand what similar homes have sold for in recent months, or you can hire an appraiser to assess your home’s value.

2. Realtor vs. For Sale By Owner

 

Most home sellers prefer using a real estate agent to handle the transaction. The realtor is responsible for listing the house, marketing the property, arranging showings, plus they can help with paperwork and answer questions. However, after completing market research and getting an appraisal, you may decide that you can’t afford a six percent commission, and selling the home yourself might be the only alternative. You don’t need a realtor to sell your house, just make sure you know what you’re getting into before handling the sale yourself. You’re responsible for the marketing and the meetings with potential buyers.

3. Get pre-approved

 

Before listing your house for sale, get pre-approved for a new mortgage. The truth of the matter is, there’s no point in selling your house if you don’t qualify to buy a new one. A pre-approval is a simple process that takes less than a week. Basically, you complete a mortgage application, submit your income information and the lender pulls your credit. Based on this information, the bank determines if you qualify for a mortgage, and how much you’re eligible for receive.

4. Tour other homes for sale

 

Because many homebuyers seek move-in ready properties that require minimum improvements, you’ll need to compare your home with other houses on the market. You don’t have to invest a ton of money in total renovations, just know that the more modern the space, the easier it’ll be to sell. Visit similar homes for sale in your area to assess the competition. If your sale prices are comparable, but these homes are staged, updated and in better condition than your property, your home might not sell as quickly.

To make your property more appealing to buyers, de-personalize the space so that potential buyers can envision their family living in the home. Choose neutral colors for the wall and replace worn items, such as the carpet, appliances, fixtures, tile floors and windows. Most buyers aren’t looking for perfection, but at the same time, many aren’t going to purchase a home that requires thousands of dollars in improvements — unless the price is low enough.

Final Word

 

Home selling is a competitive game, especially when there are many homes on the market. However, if you do preliminary work and research the market, and if you know what buyers want, you can sell faster and move into a new place sooner.

source:  totalmortgage.com