Sticks in the Ground

New Rules Improve Mortgage Info for Home Buyers

Two federal agencies have adopted rules that change what information lenders, mortgage brokers, and closing agents provide to borrowers regarding mortgage loans. The intent is to improve the information provided in order to help a home buyer make a more informed decision. With the new rules comes potential closing delays. Here's a brief overview of the changes.

The Fed’s 3 day Rule – “Early Disclosure”
The Federal Reserve Board now requires Lenders to provide a good faith estimates (GFE) of loan costs within three business days of a borrower's loan application. The new rules also prohibit the closing from taking place until seven days after the borrower receives this so-called “early disclosure”. The rules prohibit a lender from collecting fees from the borrower before the borrower receives the early disclosure, other than a reasonable fee for obtaining a credit report. If the interest rate of the proposed loan increases by .0125%, a new disclosure must be provided and 3 days are added to the closing cycle. This rule applies to the purchase of primary and secondary residences. Along with refinance transactions and home equity loans. Investment properties are exempt.

Standardized GFE & Coordinated HUD-1
As of Jan. 1, 2010, The US Department of Housing and Urban Development will requires a new good faith estimates (GFE) form and a new HUD-1 settlement statement. The new good faith estimates form is intended to better disclose key loan terms and costs. Its terminology will match the items presented on the new HUD-1 statement, facilitating easy comparison. Besides clearly comparing consumers' estimated and actual costs, the new HUD-1 statement will highlight the mortgage as FIXED or VARIABLE and will specifically state any PREPAYMENT PENALTIES or BALOON PAYMENTS included in the mortgage agreement.

.....blogging from Kingwood, TX

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Unintended Consequences – Protect Your Credit Score

The goal is to keep your credit history as clean as possible. With increasingly stringent requirements for mortgage loans, car loans, home improvement loans, you name it, a good CREDIT SCORE is more important than ever before.

You would think that if you have credit cards which you use infrequently that you would be better off if you close them out, simplifying your credit card holdings. Turns out that doing so may actually cause your CREDIT SCORE to drop.

One of the key factors in determining your CREDIT SCORE is the ratio between the amount you owe and the total amount of credit you command. This simple math ratio deteriorates if you eliminate a good size credit line (your credit card limit) and do nothing to proportionally reduce your debt balance at the same time.

Think twice before you cancel that card, it may not be in your best interest to do so. You should also note that certain banks will unilaterally cancel your card if there is little or no activity for an extended period of time.

Now, more than ever, its important to be pro-active in managing your good credit standing. 

.....blogging from Kingwood, TX

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Technorati Tags: Housing,Credit Score

Questions About the Energy Efficiency Tax Credit?

Are you thinking about adding insulation, a radiant barrier or new “energy efficient” windows to your home? Is your A/C or heating unit about at the end of it’s useful life. Do you need a new water heater?  Well, completing any of those projects before the end of 2010 may be more economical than you thought. There is a new Federal Tax Credit for Energy Efficiency. The credit can be as much as 30% of the cost of the improvement. But, like everything else related to the tax code, the bottom line impact is different for different types of “energy efficiency projects”. For some installations the cost of both materials and labor are considered, for others only the cost of materials. And the materials used must comply with the guidelines established by Congress. For specific answers to the most common questions on this subject please go to Energy Credit Frequently Asked Questions.

.....blogging from Kingwood, TX

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Technorati Tags: Housing,Tax Credits

TERMITES - trickier than you think

 Termites pose a constant threat to your home if you live in Texas. Many believe that they are easy to spot, should they begin to attack your structure. People generally look for the telltale sign of mud tunnels crawling up the side of the foundation. If found, chances are the little devils are on the attack. By nature termites are subterranean and must return to the earth each evening to gather moisture. That’s why they build the mud tunnels. HOWEVER, if you allow foliage such as VINES to grow on your house, you have just managed to make home invasion by termites that much easier. You have eliminated the need for these destructive creatures to “return to the earth”. You have provided them with a very acceptable alternative source of moisture. Give yourself a fighting chance, don’t make it easy for these pests to attack your home undetected.

.....blogging from Kingwood, TX

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Technorati Tags: Housing,Termites

$8,000 FIRST TIME HOMEBUYER INCENTIVE AVAILABLE IN ADVANCE

NEW YORK (CNNMoney.com) – The U.S. Department of Housing and Urban Development (HUD) recently announced that its $8,000 incentive for first-time homebuyers has been revised from a refund at tax time to cash made available for assistance on down payments or closing costs.

The mechanics of the new program, according to National Association of Home Builders economist Robert Dietz, allow lenders to purchase tax credits from the buyers and then collect the rebate from the IRS.

Homebuyers must still come up with the Federal Housing Administration's mandatory down payment of 3.5 percent on their own, but they can use the tax credit to lower their principal balance and save on monthly payments.

"Families will now be able to apply their anticipated tax credit toward their home purchase right away,” said HUD secretary Shaun Donovan. “What we're doing will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing."

.....blogging from Kingwood, TX

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Technorati Tags: Housing,Tax Credit

MORTGAGE APPLICATIONS RISE

                                                 NEW YORK (CNNMoney) –  U. S. mortgage applications rose last week along with the demand for home purchase loans, according to data from the Mortgage Bankers Association (MBA).

The group’s seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ending April 3 increased 4.7 percent to 1,250.6.

Demand for home purchase loans, an indicator of home sales, far outweighed demand for refinancing. The MBA's seasonally adjusted purchase index of loans to buy homes rose 11.1 percent to 297.7.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 4.73 percent, up 0.12 percentage points from the record low reached the previous week.

The four-week moving average of mortgage applications, which smoothes the volatile weekly figures, was up 13.3 percent.

.....blogging from Kingwood, TX

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Technorati Tags: Housing,Mortgage

HOUSING RESCUE PROGRAM DETAILS RELEASED

WASHINGTON (RISMedia, Associated Press) – President Obama unveiled details of his home loan aid plan designed to help millions of Americans who are at risk of losing their homes.

Administration officials say the Homeowner Affordability and Stability Plan could help nearly nine million households restructure or refinance their mortgages to avoid foreclosure.

The plan includes a $75 billion homeowner stability initiative that targets at-risk homeowners, many of whom have adjustable-rate mortgages that have increased house payments to as much as 50 percent of their monthly incomes.

This initiative offers cash incentives to lenders and borrowers for working out loan modification agreements that result in lower monthly mortgage payments and allow homeowners to keep their homes. Any bank that receives federal money under the Treasury Department’s $700 billion financial rescue program will be required to take part.

Another component of the plan is intended to help as many as five million responsible homeowners who took out conforming loans owned or guaranteed by Fannie Mae or Freddie Mac to refinance through those institutions.

To finance that effort, the Treasury is providing the two companies with up to $200 billion in capital on top of $200 billion that it had already pledged to them.

“This is not going to save every person’s home,” said White House spokesman Robert Gibbs. “The plan is not intended to . . . augment somebody’s loan for a house that they couldn’t afford under any economic situation, good or bad.”

According to the latest data from the Mortgage Bankers Association, nearly 12 percent of homeowners — a record 5.4 million — were at least one month late or in foreclosure at the end of last year.

.....blogging from Kingwood, TX

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Technorati Tags: Housing,Mortgage

Kingwood Real Estate Sales Statistics – 2004 thru 2008

As we ponder the state of the economy and what impact this turmoil is having on our financial net worth, the question “What’s happening to my house value?" has to be on our minds. I usually steer clear of generalizations, but, as a starting point I’ve put together two charts which illustrate how Kingwood home sales volume and price have been trending over the last five years. Here are the charts:

 

The number of homes sold in Kingwood started to turn down in 2007. However, the price of Kingwood homes flattened in 2008, reversing a multi-year upward trend.

The risk in sharing this “overview” is that it most likely does not accurately reflect your individual situation. Think of it as a starting point. Since there are numerous pundits discussing the future of the housing market and it’s related issues, it’s important to know where the Kingwood Real Estate Market is coming from. 

If you will be active in the Kingwood Real Estate Market during 2009, call Team Kelly and we’ll work with you to develop comprehensive information you will need to make sound individual decisions.

Visit us on the web at KingwoodTxHomesForSale.com

.....blogging from Kingwood, TX

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First Time Homebuyer’s Tax Credit ….. Do You Qualify ?

First time home buyers may qualify for a substantial tax credit when they pay their 2008 or 2009 federal income tax. Here is how it works.

First of all your home must be purchase between April 9, 2008 and July 1, 2009 and you must never have owned a home before that served AS YOUR PRINCPAL RESIDANCE. It's ok if, DURING THE LAST THREE YEARS, you owned a home which was not your principal residence ( maybe you're an investor / landlord). IF you are married, the three year rule applies to your spouse as well.

If your adjusted gross income is $75,000 or less, the tax credit is equal to 10% of the purchase price of your home to a maximum of $7,500. If your AGI exceeds $75k, the credit is reduced proportionately until it dwindles to $0.00 at the $95k AGI level. Married couples have an AGI range of $150k to $170k to work within.

Here's the kicker. You have to REPAY this tax credit. You start paying the credit back after two years. As long as you still live in the house, you have 15 years from when you start to repay the credit; that works out to be a max of $500 per year. Not all that bad. BUT, if you sell the house you must pay it back in the year of the sale.

One nice benefit if you purchase your home in 2009, you can file an amended tax return for 2008 and get your credit sooner than you would  by waiting until your 2009 filing.

Visit us on the web at KingwoodTxHomesForSale.com

... blogging from Kingwood, TX

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America's Housing Crisis Can Be Fixed ...

Finally I've heard a voice of reason in a sea of cluttered thought.

Dr. Mark G. Dotzour, the Chief Economist at the Real Estate Center at Texas A&M University, has published a thought provoking White Paper in which he characterizes the current housing crisis as a basic imbalance of supply and demand. He suggests decisive action by our federal government is required to deal effectively with the problem. His four pronged attack focuses on

• slowing down the rate of new construction - stop issuing building permits in depressed markets.
  
• reducing the number of foreclosures - listen to FDIC Chair Sheila Bair - simply "helping people stay in their homes" is a dangerous basis for new policy.
  
• increasing housing demand - provide incentives to investors  - adjust the capital gains rate to 0% for properties held 5+ years, reduce the depreciation schedule for purchased foreclosed homes, utilize solid mortgage underwriting standards.
  
• reducing the 30 year mortgage fixed rate  - reflect a 1.5% premium over the 10 year Treasury note rate (somewhere well below 5%) - make explicit the government guarantee of Fannie and Freddie instruments. Refinancing at these rates would provide economic stimulus for millions of American households.

Balance supply and demand, this must happen before we can expect to see normalcy in the housing market. We need to put public policy in place that gives the private sector incentives to be the solution. Allowing the government print more money WON'T WORK. 

Please read or download Dr. Dotzour's complete paper. Bold Government Can Solve America's Housing Crisis .

Visit us on the web at KingwoodTxHomesForSale.com

.....blogging from Kingwood, TX

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