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Why Now is a Smart Time to Buy
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0 Comments ::  :: Real Estate |
The Wall Street Journal calls it a buyers market and offers these suggestions for first-timers getting their feet wet.
- Cash is king. Having enough money in the bank to pay closing costs that are typically an additional 2 percent to 3 percent of the price of the home is necessary.
- Location. Location, location. As any good real estate professional knows, homes in good school districts where the crime is low are much more likely to hold or increase their value.
- Compare. Besides just looking at the comps, buyers should examine what it would cost to rent a similar house in the same area and they might consider what it would cost to buy land and build a comparable home.
- Think long haul. It will probably take at least six or seven years of living in the house to be able to sell and come out ahead.
Remember this is a place to live; not a stock market investment, they say. Lenders want buyers to spend no more than 28 percent of their gross monthly income on mortgage payments, real estate taxes, and home insurance. Buyers shouldn’t count on stretching further because lenders won’t approve their loans.
Shelly Banjo, Wall Street Journal
Come to the 2nd Annual Open House Day at the Beach on Saturday March 29th from 1-5pm
click here to find out more about this exciting opportunity to see some of Bolivar's best homes
How Your Customers Can Find Home Loans
1) 95 percent LTV is the best most borrowers will get. "Lenders want some skin in the game today," says Greg Kundinger, president of HomeFirst Mortgage in Alexandria, Va.
Although it's still possible to put together a first and a second loan to cover 100 percent of the purchase cost, lenders' guidelines are in a constant state of flux, so a 100-percent deal that would work one week might not be accepted the next week, says Michael D'Alonzo, president of Creative Mortgage Group in Willow Grove, Pa. Thus, if your customers can't risk that kind of uncertainty, they'll have to come up with at least 5 percent down.
2) Tax-law changes make private mortgage insurance more attractive. The federal government has permitted home owners to deduct PMI premiums from their federal income taxes since 2006. That authority was due to expire after just a year but the government last year enacted a three-year extension. That gives a shot in the arm to borrowers who would have trouble putting together the kind of piggyback loan package so popular during the housing boom as a way to avoid the cost of PMI. Now that cost has less of a bite.
3) Piggyback loans are still available, but the choices are limited. Many lenders offering second loans have left that sector and those that remain want to see higher credit scores among applicants.
"If your credit score is below 680 today, you won't be able to get more than 90 percent financing," says Kundinger. And to get even that high LTV, "you pay the price for it" in increased points, he says.
4) FHA is genuinely back. Thanks to internal reforms to speed processing and the collapse of its competition from subprime loan products, FHA saw an almost 60 percent increase in new originations in 2007, NAR data show. You can expect even more business to flow to federally backed loans this year now that the federal government, as part of the economic stimulus package, has increased the program's loan limits to a maximum $729,750 from $362,750. NAR is still crunching the numbers, but you can expect tens of thousands of more home sales per month using FHA financing once HUD formally administers the new limits.
5) Conforming loans are getting bigger, too. The federal government included higher conforming loan limits in the stimulus package, so borrowers will be able to get favorable, non-jumbo rates on financing up to the same $729,750 limit. The actual high-end limit will depend on the market, and HUD will decide that, because the Fannie and Freddie limits will track FHA. Not only will higher conforming loan limits increase homeownership affordability, but they'll open the door for homeowners to refinance their jumbo or piggyback financing into a lower-rate conforming loan.
You can get more information on the impact of the stimulus bill on housing at REALTOR.org
Swede’s Real Estate, specializing in beach property sales and rentals and the leading real estate company in Galveston County, announced home sales set new record.
While the rest of the nation's housing market is in a crisis, the Crystal Beach real estate market is booming. The Crystal Beach area was the only real estate market on the Texas coast which experienced substantial sales growth in 2007 and a median price increase.
There are a solid inventory of new construction properties on the market and more going up every day. Anne Willis, owner/broker of Swede’s says, “Now is the time to get that brand new home. A second home purchased on Bolivar today can actually pay for itself through rental income while it appreciates in value catching up with the other Texas resort coastal markets.” Today, Bolivar Peninsula median home prices are almost half that of the other Texas Coast resort markets with the greatest potential for appreciation due to the large capital investments being made less than an hour away. It's also a favorite destination for travelers because of its agreeable climate, spectacular natural scenery, and friendly people.
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Swede's real estate has been in business at the beach since 1955 and has the largest selection of vacation rentals in Galveston County.
Swede's has so many rentals and with such a variety, they are essentially operating a peninsula-wide hotel; fully equipped to serve any beach goers needs. Learn More
The Bolivar Peninsula is truly a great place to carry out oceanfront dreams, and with Swede's Real Estate the choices are virtually endless. |
Swedes' popularity is more than just with the area's leading rentals and sales; even their internet traffic shows the explosive growth of the area and the company. Swedes real estate services over 600 people a day on their new website. According to Anne, “We are helping to lead the way and are ready for the increasingly popular and modernizing Bolivar Peninsula Resort.”
The Bolivar Peninsula - The perfect destination for everyone’s next beach vacation. Click here for available Vacation Rentals |
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