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Successful sales provided a glimmer of hope for the Pierce and Thurston county housing markets in February. The good news is, more homes sold in Pierce and Thurston counties last month than the same time a year ago, though sale prices continued their drop. Closed sales rose 30 percent in Pierce and 2 percent in Thurston and continue to rise, according to data released Monday by the Northwest Multiple Listings Service, which represents 21 counties in Western and Central Washington. But the bad news is, median sale price of single-family homes and condos fell 16 percent in Pierce to $169,450. That’s about 40 percent off the peak of $285,000 in August 2007. Thurston’s median sale-price drop wasn’t quite as bad, down almost 3 percent to $211,500. At the median sale price, half the homes sold for more than that amount, and half sold for less. The NWMLS reports that brokers across the region are seeing an increase in activity, with a 27 percent increase in pending sales from the same time a year ago. Pending sales aren’t the best indicator of market health because they often fall through, but brokers are keeping a close eye on them to gauge consumer confidence. In Pierce, pending sales increased 30 percent year over year. In Thurston, they were up almost 18 percent. “The only thing tempering this from being a hot, thriving market are the short sales and foreclosed properties which represent about one-third of the transactions,” said Frank Wilson, branch managing broker at John L. Scott Real Estate in Poulsbo and a member of the Northwest MLS board of directors, in a news release. The trends of higher closed sales and lower median price were true for King County, too. Closed sales in February were up 26 percent at a median price of $275,000. Read more at The News Tribune By: Kathleen Cooper: 253-597-8546
kathleen.cooper@thenewstribune.com
blog.thenewstribune.com/business
Read more here: http://www.thenewstribune.com/2012/03/05/2054053/more-homes-sold-last-month-in.html#storylink=cpy
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Paying off the mortgage early is “in”.
Refinancing to take money out of our
homes is “out”. Living through the
foreclosure crisis, more people want the security and the psychological benefit
of owning their home free and clear, and the sooner the better.
If you want to pay off your mortgage early,
you'll find plenty of experts recommending ways to do it. All strategies work,
but you'll find some methods of paying off your mortgage are safer, faster, and
more painless than others.
Compare these ways you can pay off your
mortgage early, starting with the simplest and moving toward the most complex.
Just Pay More
If you want to see magic, start playing with mortgage calculators and see how
adding a little payment to your principal here and there can shorten the length
of your loan. You can use mortgage calculators to see how $100 or any other amount added
to your payment reduces your interest and shortens the length of your loan.
If you pay a little more principal, you get a bonus. The
lower your principal gets, the more every payment from then on is applied to
principal, as less goes to cover interest expense.
If nothing else, round your payments up, recommends Tracy
Piercy, CFP and CEO of MoneyMinding.com. She says that when people have a
payment for $644, they think of it as $650. Why not just pay $650? An extra $6
a month on a $200,000, 30-year loan can save you four payments at the
end of the mortgage loan.
*Note - When you pay extra, make sure the extra is
applied to the principal balance, not just set aside for the next payment. And
before you make extra payments, read your contract and make sure you won't have
to pay prepayment penalties.
Refinance
with a shorter-term mortgage
You can refinance into a mortgage for 10, 15 or 20 years,
but 15-year mortgages are the most common. Your payments will be higher on a
15-year loan, but perhaps not as high as you think, especially if you can refinance with a lower interest rate.
One advantage of a 15-year loan is that you're committed
to the higher payment. There's no dithering about whether you can afford to pay
extra this month.
With a 30-year, $100,000 loan at 5 percent, your
principal and interest payments are $537. At the same rate, but on a 15-year
payoff schedule, your principal and interest payments are $791. That's $254
more a month.
To get the effect
of a shorter-term mortgage without the risk, take out a 30-year loan, but make
payments as if you had a 10- or 15-year loan. "You just make increased
payments. You're in control, not the bank," Piercy says.
Biweekly payments – (My Favorite)
Biweekly payments take advantage of the fact that there
are 52 weeks in the year and 12 months. If you pay half your regular mortgage payment
every other week, you'll have made 26 half-payments, or the equivalent of 13
full monthly payments, at year's end. The
extra annual payment can chop about six years off a 30-year mortgage.
You shouldn't have to pay an outside company to set it up
for you. "I hate the idea of having to pay a third party for something the
consumer(s) can do on their own," says Cathy Pareto, MBA, a certified
financial planner in Coral Gables, Fla. "Why pay the extra fees if you can
avoid them and still accomplish the same goal?"
Check if your bank will set up a biweekly payment plan.
Some banks do it free; others charge. Ask the bank to credit extra payments
toward principal so you save more on interest expense. Some banks set aside
extra payments until the end of the year.
Use
money merge accounts (the Australian method)
In Australia, mortgages are generally set up like home equity lines of credit,
or HELOCs. They double as checking accounts, thus the term "money merge." When you get
paid, you deposit your check into the account, and as you spend money you take
it back out again. You hope to put more money in every month than you take out.
With a mortgage using the
Australian method, interest is calculated daily instead of monthly, and because
the money spends as much time as possible in the account before you take it
back out to pay bills, you save on interest expense.
But Dr. Don, a Bankrate.com
columnist, writes: "I just don't think the typical homeowner benefits from this
type of mortgage loan." Typical homeowners don't see enough reduction of
their interest expense to make this method worth it for them, according to Dr.
Don.
Some money merge programs require
you to buy software for thousands of dollars. However, there's no magic formula
for shifting your money around. "You don't need software to do that,"
Piercy says.
*Note - The biggest downside to
the money merge plan is that it requires great discipline. Don’t do it unless you understand cash
management.
By Sally Herigstad, for
Bankrate.com
Read more at Bankrate.com http://www.bankrate.com/finance/mortgages/4-ways-to-pay-off-your-mortgage-earlier-1.aspx
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Note that this information is outdated.
It looks like struggling homeowners will be getting a little more help in the months ahead. Attorney General Eric Holder and Secretary of Housing and Urban Development Shaun Donovan, along with most state attorneys general, announced a $25 billion legal settlement of investigations into improper foreclosures, mortgage modification misconduct and other abuses against U.S. homeowners by mortgage servicers.
Read More
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1. Price it right from the get-go
The old-school strategy of real estate sellers crossing
their arms and holding out for a better offer will be brushed off by most
homebuyers. Consider that of the homes that took four months or more to sell in
the past year, almost half of their owners accepted less than 90 percent of the
asking price, according to the National Association of Realtors. For a gauge,
have your agent produce the latest comparable sales including short sales and
foreclosures as well as a recent summary of sales prices versus original list
prices. But be wary that such information doesn't reflect the homes that failed
to sell.
2. Put your best footage forward
Prep, paint, stage, scrub, improve, repeat. Efforts can
include caulking, plastering, planting flowers, adding potted plants, making
the windows spotless, pressure washing that oily driveway, edging the walks,
trimming the bushes and trees, and mending the fences. None of these is
excessively capital-intensive, but when applied en masse, they say "buy
me."
3. Be flexible
I'm not saying bend over backward to accommodate real estate
buyers. Bend forward and sideways, too. Be ready to negotiate and offer extras
such as closing costs, paid property taxes, remodeling work (or a cash credit),
appliances, paid condo association/homeowner association dues, a few months of
mortgage payments or even seller financing. Home sellers who've been on the
sidelines and who advised their agents to ignore offers by lowballers don't
have that luxury now. Instruct your agent to listen intently to prospective
homebuyers' misgivings about the home and adjust accordingly and immediately.
4. Trump your techo-fears
Hire a listing agent steeped in mobile platforms. Sellers
and buyers are routinely using Facebook and other social media to sell and
seek, not to mention dozens of online selling sites. Some owners are even
making YouTube videos to showcase their homes, making it easier to quickly link
to potential buyers via email. There's also an abundance of smartphone apps
cropping up to review real estate listings and refine searches.
5. Don't fall prey
Fraudsters are targeting distressed homeowners with
"deals" that can sound perfectly legit. Some offer loan modifications
for upfront fees while others offer fee-based "help" in navigating
government housing assistance programs, sometimes claiming they're attorneys.
There are also con-artist "investors" compelling
desperate owners to sign over their homes with quitclaim deeds in return for a
typically empty promise to remain there indefinitely. Others are telling former
owners they can get their homes back for a lump sum. Be forewarned: Never sign
blank documents or documents with blank lines.
If you're unsure of an offer, have an attorney or other
trusted adviser look it over.
6. Finance 101 Realize it's harder to qualify for loans these days. Credit
records are under greater scrutiny, and lenders are often demanding a 20
percent down payment and some pricing flexibility from the sellers, especially
if the lender's appraisal doesn't reach the asking price.
Consider cash offers, even if they're not the highest.
Reject too-low offers from homebuyers gently and with encouragement, telling
them they're oh-so-close. You don't want to give away the farm, but you don't
want to give it back to the bank either. These days, meeting halfway usually
means meeting buyers on their half.
7. Be your own spokesperson
Agents once advised home sellers to retreat from view during
showings, lest they disclose something unsavory or otherwise botch the deal.
That's changed. If you can control your ego and emotions and come off as an
earnest, flexible seller, you can serve as your best spokesperson. Be ready to
answer would-be buyers' questions about the neighborhood and area schools. Be
careful about making verbal promises!
8. Flight to quality
Worried about durability? Buyers who place a heavier focus
on brick or concrete-and-steel housing may find they're more enduring, safer
and quieter.
Are you worried about sustaining value? Buy near a
prestigious hospital, university, large government employer or newly vibrant
central business district. These entities typically aren't going away, and the
demand for good housing around them won't either.
9. Expanding your buying universe
There's still an overabundance of well-priced inventory out
there, which means you needn't immediately narrow your search to the first
house you fancy. That's especially the case with short sale homes, which can be
a nightmare to close in a timely manner. There are some for-sale gems that need
only a little polishing.
Shop around. Don't dismiss foreclosures and other bank
properties, pre-foreclosures, auction homes, for-sale-by-owner or lease-to-own
homes. Pick at least three favorites and work from there.
10. 'Site unseen' equals shortsightedness
Are you perplexed by the home valuation you did on your
place on the website of a large, seemingly reputable real estate organization?
Puzzled how that valuation can be 25 percent or more above or below a firsthand
appraisal you've had done? Well, value estimates on these sites can vary
widely, sometimes by hundreds of thousands of dollars, even by the admission of
the companies themselves. There are way too many variables in the valuation
game to give too much credence to blind, algorithm-based estimates that are
impersonally calculated. Nothing beats a nuanced firsthand professional
appraisal.
11. Expand your buyer's due diligence
Aside from the financial details, contracts, disclosures and
protections you typically tend to as you prep to buy a home, add these to the
list:
•Hire a title company
to check the house for liens and tax arrearages. •Hire you own
inspector. Don't use the seller's! •Have the inspector
check for unpermitted work such as illegal room additions and garage
conversions. •Consider the overall
energy efficiency of the home with an energy audit. •Be sure property
lines are accurate. If there's any question, hire a land surveyor to research
the original deed and to stake out the property's lines and your neighbors'
property lines to avoid future disputes.
12. Make a quality-of-life due diligence checklist •Go to the National
Sex Offender Public Website at Nsopw.gov to search for neighborhood predators. •Spend some time
around the neighborhood and briefly interview neighbors. Determine if there are
noisy neighbors, signs of gang activity, nocturnal barking dogs, indigent
lingerers, frequent loud parties and/or suspicious nighttime visits. Are there
lots of rental homes? Is the block a cut-through point during rush hour? Does
the school bus go past the block? Is there a restrictive homeowners
association? •Determine what types
of buildings can be constructed on vacant lots adjacent to the neighborhood.
This helps avoid unpleasant future surprises. Is there constant noise from a
nearby highway or busy street? Are there odors from nearby industrial plants? Taken from Bankrate.com Read more: 12 Reliable Real Estate Tips for 2012 Bankrate.com
http://www.bankrate.com/finance/real-estate/12-real-estate-tips-2012-1.aspx#ixzz1jAU0kp
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If you want to buy a home and you qualify for a mortgage, this is your time. With mortgage rates at historically low levels, falling home prices and plenty of distressed properties for sale, buyers will be able to find once-in-a-lifetime opportunities this fall and winter.
Borrowers seeking to refinance will likely continue to take advantage of the superlow rates -- if they qualify and have enough equity in their homes.
Stringent underwriting standards coupled with lower loan limits, which went into effect at the beginning of October, will keep many potential buyers and refinancers out of the market and will put more downward pressure on home values.
Also pressing on values is the vast inventory of foreclosed homes for sale. Some fear another wave of distressed properties will hit the market in coming months as banks resume foreclosures at full speed. But others say lenders, who are under extreme pressure from the government, will look for alternative solutions such as short sales and working with investors on rental and lease-to-own programs.
Here are some of the housing and mortgage trends you can expect to see for falland winter 2011. The historically low mortgage rates borrowers have been enjoying won't last forever. But they will likely remain at or near rock-bottom at least until the end of the year, mortgage experts say. While the trend can shift direction at any moment, many industry observers say they don't expect a significant jump in rates this year.
"Going into the next quarter, I don't think we will see much movement with rates," says Rob Nunziata, president of FBC Mortgage in Orlando, Fla. "However, if the economy starts picking up, I think we could see a slight bump up."
But it's unlikely the economy will improve before the year's end, he says. There are more than 14 million people unemployed, and housing markets remain sluggish in most areas.
"With the economy the way it is and problems surrounding the housing, I think it is very likely that rates will remain low through the end of the year," says Ron Peltier, chairman and CEO of HomeServices of America, a real estate brokerage in Minneapolis.
The latest forecast by the Mortgage Bankers Association estimates the average rate on the 30-year fixed-rate mortgage will be about 4.5 percent in the fourth quarter.
"It would be hard to think rates could go any lower, but they are clearly not going to be significantly elevated" in coming months, Peltier says.
Low mortgage rates won't guarantee you a mortgage loan. Borrowers with less-than-perfect credit will continue to struggle with stringent underwriting requirements through the rest of the year and well into next year.
"The level of detail required to produce a compliant, conforming loan is immense," says Matt Hackett, underwriting manager at Equity Now, a mortgage lender in New York. "We are literally verifying that people have not opened accounts or even extended credit card balances during the process on the day a loan is closed. That is pretty intense."
The standards are not expected to change anytime soon, he says.
"Lenders are under tremendous pressure and criticism by Congress and the country for past actions in lowering the standards to allow more people to become homeowners," Peltier says. "But now they have overcorrected it. The standards are very aggressive."
The strict underwriting requirements keep potential buyers out of the market because they can't get a loan. "But no matter what the standards are, the problem is all the way around," Peltier says. Many potential homebuyers, even if they qualify for loans, worry about their job security because of the shaky economy and therefore don't want to commit to a mortgage.
Many homeowners who lose their home to foreclosure eventually become renters, as they do not qualify for a mortgage for at least two years after the foreclosure. So why not keep them in the foreclosed homes as renters?
That's what many investors have been doing, says Shaun White, a vice president for the RE/MAX real estate network.
About half of the investors who buy foreclosed homes are renting them out, rather than fixing up the properties and selling them, White says. Those include individual investors and investment groups. Often, their tenants are families who have lost their homes to foreclosure.
"Investors can buy with low interest rates (and) low prices, and rent that property out," he says. "The dollars work out. In a few years when prices appreciate, they can consider selling the properties. In the meantime they are providing affordable living to people."
The strategy is expected to continue to gain popularity in coming months and could become some form of nationwide program. The Obama administration is considering proposals to make rentals out of Fannie Mae- and Freddie Mac-owned properties. The Federal Housing Finance Agency recently put out a request for ideas on rental programs for foreclosed properties. One potential strategy would be to rent foreclosed properties to previous homeowners or to current tenants through a lease-to-own program.
"Because of the environment in the marketplace, with the tight lending standards and all volume of foreclosures, a rental program makes a lot of sense," White says. Many homebuyers will have to settle for smaller mortgages this fall. Loan limits fell across the country at the beginning of October. The maximum amount for jumbo-conforming loans -- mortgages for more than $417,000 but which can be sold to Fannie Mae and Freddie Mac -- was reduced to $625,500. The upper limit had been $729,750. Limits on FHA loans, which are mortgages backed by the Federal Housing Administration, also have been reduced.
Home values in high-priced markets will be hit hardest by the recent changes, Peltier says. But the effect will be seen in markets in various price ranges all over the country, says Mathew Carson, a mortgage broker at First Capital Group in San Francisco.
The loan limit reduction "takes a lot of people out of a certain market, but it more than likely forces people in that price range to reduce the listing prices of their houses," he says. "This reduces the prices of the houses below it as well … (It's) a basic ripple effect."
White says the notion that these reductions would only affect the "wealthy" is a myth.
"This does not just impact high-priced homes in wealthy communities, but 669 counties in 46 states," he says.
If you are a seller, you may be forced to reduce the asking price on your home, so the price is within the new limits to attract a broader group of buyers, White says.
It's early to estimate the exact impact on home prices, but White says he expects the reduced limits to trigger a decline of 3 percent to 5 percent in home values on average.
"Not what the industry needs right now," he says.
The foreclosure crisis is far from over. Recent reports showed foreclosure numbers dropping. That might have made it seem as though the situation was improving, but the foreclosure machine simply slowed while it was being repaired.
"Many think the banks are fine-tuning their systems after the robosigning controversy and will foreclose at a higher rate in the second half of this year," White says.
If foreclosure inventories do rise, this could put pressure on home prices this winter as they normally drop a bit then, he says.
"It remains to be seen if the market can absorb the additional inventory," he says."If it can, that's great. Otherwise, we might see another price drop."
Peltier agrees there will be more distressed properties on the market for sale, as millions of underwater borrowers struggle to keep up with their payments and simply give up.
But he thinks rather than more foreclosures, there will be more short sales.
"Banks have realized that a short sale is more cost-effective than foreclosure," he says. "Short sales are the preferred path today. But they are still distressed real estate. The problem has not gone away, but the banks are finding alternative solutions." Read more: 5 housing trends in fall 2011 | Bankrate.com http://www.bankrate.com/finance/mortgages/5-housing-trends-in-fall-2011-1.aspx#ixzz1ZMZrgFcG
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There is pervasive talk these days that the American dream of homeownership is now the “myth” of homeownership. Lightning never strikes twice in the same place – that’s a myth. Dig a hole deep enough and you reach China – another myth. But the long-term value of homeownership … not a myth. Instead of listening to trendy naysayers, we perhaps should pay attention to what Americans think. They are the actual consumers, with more than two-thirds of them owning a home in our country. A robust majority continue to believe in the value of homeownership and place it high on their list of priorities. Several recent surveys measuring attitudes about homeownership produced consistent results that shouldn’t surprise anyone. In a recent Pew Research Center survey of more than 2,000 adults, 80 percent said that buying a home is the best long-term investment. The Allstate-National Journal poll conducted in March indicated that a solid majority (70 percent) would advise a family member to buy a home as a long-term investment. Even in today’s challenging economy, 92 percent of owners and 72 percent of renters believe that over a period of several years it makes more sense to own a home according to a January survey by the National Association of Realtors. Americans’ lasting belief in homeownership is evident when Pew Research survey respondents are asked about long-term financial goals. Nothing beats homeownership, which ranks slightly ahead of both saving for retirement and saving for the kids’ college. The average Washington taxpayer saved $3,565 in taxes as a result of the deduction on their mortgage interest in 2008, a significant savings to a middle-income family. That’s why more than half of homeowners want to keep the federal mortgage interest deduction for homeowners in place, according to a May survey by HousingPredictor.com. Homes, in the long run, appreciate in value. Despite the dramatic fall in home prices over the past several years, a home purchased in Pierce County before 2005 has retained at least some nominal value increase, and a home purchased in 2000 has kept a value above inflation. And, as The News Tribune reported in its article, “Tacoma housing market cheered on CNN Money” (Feb. 8) Fiserv data show that home prices in our county will appreciate by 11.8 percent for the “biggest housing price gains in 2012.” Harder to measure are the social and emotional benefits for a family, but they are there. Homes allow families to put down roots, build family memories and create lifelong friends. The best reason for buying a home given in one survey is “having a place to raise a family.” In its 28-year history, the Washington State Housing Finance Commission has enabled Washington residents in every county — more than 43,000 Washingtonians statewide — to achieve homeownership for the first time by offering below-market-rate mortgages and assistance with down payments. Recently, despite the barrage of bad news and supposed myth-busting about homeownership, the WSHFC has facilitated, on average, nearly 30 loans a week and demand has not gone down during the recession. Owning a home provides the opportunity for personal choice and freedoms, certainly an appeal for Americans’ independent spirit. As housing advocates, we have seen it for years; when buyers get their keys and begin sprucing up a place the way they like it—painting, redecorating or renovating—it is a personal investment in their family, their future and our economy. There are approximately 1.65 million owner-occupied homes in Washington state. Harsh foreclosure realities have faced too many Washington homeowners, but more than 97 percent of them have not faced that tragedy and the ideal of owning a home remains indelibly etched in our beliefs and a huge part of our aspirations. The bloggers, columnists and self-appointed analysts are mistaken when they link the mortgage crisis of the past several years to the country’s support of homeownership. Americans, who understand the benefits of owning a home, both tangible and intangible, continue to hold tight to their dream. They have told us so. Editorial from the News Tribune, 5/24/2011 by Phil Harlan, the 2011 president of the Washington Association of Realtors and Kim Herman, the executive director of the Washington State Housing Finance Commission.
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