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Is refinancing for you? With some planning, there may be big savings ahead

December 20th, 2011

With mortgage interest rates at an all-time low, many homeowners are considering re-financing their loans. Depending on several variables, this could be a very wise move to lower your monthly payments and even shorten the length of your current mortgage. But before jumping into the process, let’s investigate several questions to ask yourself.

  • How is your credit score? Has anything changed that may affect your good rating? These days a credit score of 760 and above get you the best rates.
  • How much equity do you have in your home? Lenders want to see around 20 percent equity for refinancing, but even if your equity is lower, there are refinancing options available through the government’s Making Home Affordable program.
  • How long are you staying put? If you plan to move within the next two years, refinancing is not a good option. The fees associated with refinancing could eat up any interest savings you may have gained.
  • How much does it cost to refinance? Just like buying a home, there are fees associated with refinancing. Do the math. Are lender fees, closing fees, title search costs, inspection fees and credit search fees worth it financially for you to refinance?
  • How much will you save? Talk to your lender first. They will help you compare refinance expenses with different lengths of loans and calculate when you’ll begin saving.

Researching the answers to these questions will give you a good assessment about refinancing your home. When you believe it’s worth pursuing, go prepared. Lenders want to consider your whole financial picture. Gather your recent checking, savings and investment statements, tax returns, W2 forms and pay stubs. The more information you have, the quicker you could be on your way to lower monthly payments and major savings.

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Posted in Home Buying, Mortgage Knowledge

Is there a light at the end of the tunnel?

November 18th, 2011
  • For the first time this year, Year to Date Units Sold exceed total units sold in 2010-3379 in 2011 to 3356 in 2010, but total volume sold still lags because Median Sale Price this year is lower, $163,00 to $173,000 last year. We still expect by 2011 year end, total volume may exceed last year.
  • The second half of 2011 is dramatically better than the same time last year. Last year after the tax credit expired, sales tanked. We are now in a true -no sugar added market…a new normal for certain.
  • Important to note, total active listings are down considerably, bringing inventory levels down currently to about 8 months worth compared to a year ago at 12 months worth…hence, absorption rate getting back to near normal. Once inventory drops below 5 months, it begins to transcend into a seller’s market.
  • The key factor to watch is Mortgage Interest Rates. They are poised to increase, but we don’t know exactly when. A simple 1% increase in mortgage rates, say, from 4% to 5%, will cause a typical family to have to scale down their purchase by nearly 15%…or said another way…If you qualify now at 4% for a $200,000 home, but you choose to wait, and rates increase 1% to 5%, the same borrower now qualifies for only $170,000 home. That is the true cost of waiting.
  • Lawrence Yun, PhD, Chief Economist for NAR has noted several indices that indicate there is light at the end of the tunnel. He will be our SCCAR guest Feb, 2011…stay tuned.
  • Thanks again to Cindy Fox, our volunteer statistician, for her unwavering service for PR for over three years now. :)


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Posted in Home Buying, Home For Sale, Mortgage Knowledge

Top 10 Reasons to Buy Real Estate Today… Window of Opportunity

February 25th, 2009

10. The First Time Home Buyer Tax Credit of $8,000 can generate $100,000 Net Equity or Net Worth in 8 years with an average of 5% annual appreciation!

9. 8 out of 10 economists agree homes will appreciate over the next 5 years.

8. St. Charles has been selected by Forbes & Money Magazines as the “Top 100 places to live” and one of the Top 10 areas poised for early Real Estate recovery.

7. Home prices and Interest rates are low and home inventories are plentiful, this is a true Buyers Market.

6. It has been proven that it is Better to “Buy Real Estate and Wait” than to “Wait and Buy Real Estate”.

5. Historically, real estate downturns have lasted from 18 to 24 months. This current market peaked at its highest values in July 2006, suggesting we are at or near the current down trough.

4. 70% of Loans today are FHA Assumable Loans. If a buyer today locks a 30 year rate of 5%, this will make that home more marketable in the future when it is time to sell.

3. Interest rates are the lowest in our lifetime nearing 5%! In the last two Buyer’s Markets, rates were 18% to 20% in the early 1980’s and 11 to 12% in the early 1990’s. The average Mortgage Rate over 44 years was 9%.

2. A 1% increase in Mortgage Rate on a $150,000 home equates to a $100 per month increase in payment or $1,200 per year and $36,000 more over a 30 year loan. It is twice that on a $300,000 home or $72,000. Waiting has its perils.

1. Buy Low / Sell High…Basic Investing Economics at play.

All Indicators suggest the time to buy…is NOW!!!

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Posted in Uncategorized

Potential Home Buyers, 2009 is The Time!

January 12th, 2009

Get off the sidelines if you are thinking about buying a home. Contrary to implications in the news, now is one of the best times to be a home buyer. No one knows how long this once in a generation, or perhaps once in a lifetime, window of opportunity will be open but there are several things working in the home buyers favor right now.

First, home prices in most markets have declined in the past year; therefore, you can get much more home for your dollar. The drop in values has been more modest in the Midwest compared to the rest of the country, so if we assume only a 10% drop in value; someone looking at a $300,000 home a year ago might be able to purchase the home today for only 270,000.

Secondly, mortgage rates on 30 year fixed loans for both government and conventional loans are at or near all time lows. Rates a year ago were around 6% and today they are around 5%, so assuming a loan amount of $150,000; monthly savings compared to a year ago would be around $100 a month!!

Lastly, if you need help with down payment money; the Missouri Housing Development Commission (MHDC) just made it easier for first time homebuyers who are eligible for the $7,500 Housing Tax Credit from the Federal Government.

The $7,500 Housing Tax Credit is currently given to those first time homebuyers on their tax return the year after they buy; so someone buying in 2009 would not receive that money until 2010. This unfortunately doesn’t help that first time homebuyer who needs down payment assistance.

MHDC has set up a program so that this same homebuyer can borrow those funds today and then pay it back when they get the Housing Tax Credit later on. One key thing, this Housing Tax Credit is only available until the end of June, 2009; so get out there and start looking for that new home!!!

30 Year Fixed 5.00% with 0 points and only $399 in lender fees
MHDC (CAL) FHA 30 Year Fixed 6.50% with 0 points
FHA 30 Year Fixed 5.00% with 0 points and only $399 in lender fees

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Posted in Uncategorized

More great news for first time Home Buyers!!

December 1st, 2008

Interest rates are great, real estate is selling at a discount …. which all adds up to a great time to buy a home!! And for first time homebuyers; the news just keeps getting better and better thanks to MHDC.

The Missouri Housing Development Commission (MHDC) releases money to first time homebuyers throughout the year and in the past this money has been non-taxable. But,in their most recent bond-issue, the monies they provide to first time homebuyers are taxable!

At first thought, most people would think this is a bad thing; as the borrower has to pay taxes on the 3% down payment money they receive, but until July 1, 2009 this is actually a great thing.

Because this down payment money is considered taxable; the borrower will now also qualify for the $7,500 Housing Tax Credit provided by the Federal Government.

So for example; let’s assume we have a first time homebuyer who qualifies for the MHDC down payment assistance program and they purchase a $150,000 house prior to July 1, 2009.

MHDC would provide them with 3% or $4,500 towards their down payment, which until the end of this year is all you need for a down payment on an FHA loan. Then when our borrower does their taxes; they will receive an additional $7,500 from the federal government.

There are many rules associated with MHDC and the Housing Tax Credit and in addition it is not free money, but it is a great opportunity for those first time homebuyers.

Please contact me for more information on these wonderful opportunities!!

30 Year Fixed 5.75% with 0 points
MHDC (CAL) FHA 30 Year Fixed 7.15 with 0 points
FHA 30 Year Fixed 5.5% with 0 points

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