Real Estate
News & Views |
Should you
invest in Wall Street or Main Streeet? |
Checkout this CNN article before you invest. |
Title
Problems... |
To read Ginny's article go to:
http://realtytimes.com/rtnews/rtapages/20020916_titleproblems.htm |
Hints at Housing Bubble
|
|
LEAD |
Low Lead Levels Still Risky |
Bad
data bludgeons brokers
|
Home
buyers trust web sites
|
NAHB New Web Site |
|
IRS
says seller down payment 'contributions' not deductible |
Nonprofit gift programs and tax deductions |
Tax
Break For Sellers
|
Check out this Wall Street Journal article and
Realtor.org
article |
Mortgage
Market Commentary |
The
'skedaddle' to safety drives down mortgage rates |
FSBO Companies Not Dead |
Read this article on
the
FSBO Companies |
Condo market
flexes muscles |
NAR says
condo price appreciation is 'double the rate of single family homes' |
REMODELING
|
Remodeling Boom
|
PRICE GAP REACHES RECORD HIGH
|
Check this
Ingram News Article Out |
MORTGAGE
SETTLEMENT COSTS LOWERING |
By Jim Woodard
Mortgage lenders are responding to the growing consumer demand for lower
settlement costs and a simpler way to understand all related costs in
obtaining a mortgage loan. And consumers want a more efficient way to
compare one lender’s offer with others.
Pressure for these changes is fueled by a strong stand being taken by the
office of Housing and Urban Development (HUD), and the intensified
enforcement of the Real Estate Settlement Procedures Act. HUD is now
urging lenders to provide consumers with bundled settlement services,
allowing for simpler and clearer disclosure and providing greater
certainty to consumers applying for a mortgage loan.
In an increasing number of cases, you can now receive a guaranteed, flat
fee mortgage – easy to understand and compare with offers from other
lenders. Instead reviewing a long list of estimated settlement costs (that
often change before closing), you have one bundled fee covering all costs
along with a guaranteed interest rate.
HUD predicts the trend toward bundled services and guaranteed rates will
result in increased competition and will drive down mortgage settlement
costs to consumers.
“We applaud HUD’s position on bundling services and a simpler, clearer
disclosure,” said the executive vice president of one major mortgage
lender – ABN AMRO Mortgage Group (AAMG). “This will greatly benefit
mortgage borrowers and will give companies like ours the ability to offer
one-fee mortgages to a much broader audience.”
AAMG, the fifth largest mortgage lender in the nation, is a pioneer in the
offering of one-fee (bundled) mortgages. They have processed more than
40,000 of these loans for consumers, funding an excess of $6 billion in
loans. Other lenders are taking note of this success and are developing
similar programs.
With the OneFee mortgage program, AAMG guarantees the interest rate and a
guaranteed one-fee amount at the time the consumer locks-in their interest
rate. Typically, a customer obtains only a “good faith estimate” of likely
costs associated with their loan. These costs are often different at the
closing table.
The one-fee plan includes all typical fees in a single guaranteed fee,
with no uncertainties or surprises at closing.
“Our OneFee plan has allowed us to improve customer service by allowing
time to focus on process, product and counseling our customers as opposed
to centering on an estimated fee break-down,” said William Newman with
AAMG. “Simply, this one-fee plan provides consumers with higher quality
service through more accurate disclosure than any other loan product
available today.”
From the consumer’s perspective, a key advantage of such a plan is that it
provides clearly defined information that can be used efficiently in
comparing the offering of one lender’s plan with others.
MONEY-SAVING REFI LOANS
Now that we’re in the midst of another boom period in home mortgage
refinance applications, it’s time to point out a few ways consumers might
save money in this area.
A bit of negotiation with your loan officer could save thousands of
dollars over upcoming months and years. Or if the idea of negotiation
intimidates you, just ask questions and make strategic requests of the
officer.
For example, first contact the chief loan officer at the lending firm that
processed your current mortgage. Let him know that you want a mortgage
carrying currently prevailing low interest rates. If the rate can be
lowered with your existing loan, that would satisfy your needs. If not,
you may have it refinanced by another firm, you can explain to the
officer.
He obviously doesn’t want to lose you as a customer, and may offer to
modify your current mortgage giving you the lowest possible rate. This
would be the best scenario, because you save the new loan processing fees.
It will probably cost you a fee for the modification action, but that
would be very small compared to costs of processing a new loan.
However, many lenders resist lowering interest rates on existing
mortgages. After all, those new loan fees supply much of their total
income. But the customer still has clout muscle they can flex.
“We won’t reduce the interest rate on our existing mortgage loans,” said
Linwood McNeill, first vice president of mortgage lending for Washington
Mutual Bank. “However, we will give our customers what we call `streamline
processing’ of a new refinance loan.”
These loans, he explained, are simplified, expedited and economized. Many
of the costs are cut to a minimal amount. But it’s still a new refinance
loan with all necessary processing steps and related costs.
“Our streamlined processing is almost as good as just cutting the interest
rate on an existing loan,” he said.
Whether you save money by having your current mortgage modified with a
lower rate, or negotiate lower processing fees with a new refinance loan,
you will only receive those financial benefits by asking or making certain
requests. Speak up, and save hard-earned money that can be put to good use
in other ways. You will probably find that mortgage loan officers are more
than willing to work with you regarding your special requests.
TITLE INSURANCE … OR …
The folks at Radian Guaranty, Inc. are saying most borrowers of refinance
or equity mortgage loans are paying too much for title insurance coverage.
They now offer a substitute protection plan – the Radian Lien Protection
Product -- that can replace the need for title insurance, saving the
consumer nearly half the cost of traditional title insurance in mmany
cases, they say.
This has sparked a major battle between leaders in the title insurance
industry and Radian. Title insurance has grown into a huge industry,
involving attorneys and abstractors in addition to many title insurance
companies and their agents. They generated about $7.9 billion in revenues
last year, according to a report from Radian.
On the other hand, there are very valid reasons for consumers to stay with
conventional title insurance coverage, it was noted by Jim Maher,
executive vice president of the American Land Title Association.
“If the mortgage being processed is less than $150,000, the consumer will
pay more for Radian coverage than with a title insurance policy,” Maher
told this writer. “And even in cases where the cost of title insurance is
more, it’s a better deal for the consumer. Title insurance protection is
much broader and deeper than the Radian plan offers. Thus it is less
likely that a problem will come back against the consumer when title
insurance is used.”
The Radian report notes that in recent years the pressure has been
building for a more economical and cost-effective plan that would cover
risks incurred by mortgage lenders. Title insurance policies pay out
relatively little money each year in losses.
For example, in year 2000 only 6.6 cents of every dollar spent for title
insurance protection was paid out in losses. Compare this with 42.3 cents
in the Surety Insurance industry, Radian suggests. Expenses consume the
vast majority of money flowing into the title insurance industry.
It should be noted that the Radian Protection Product is not available for
transactions where the mortgage is used to finance the purchase of a home.
But it is available in most states for secondary transactions – refinance
loans, second mortgages and home equity loans.
For those loans, the risks of defective title are quite small. The major
work of researching a home’s title was completed when the purchase loan
was processed. There’s no logical reason why the homeowner should be
required to pay out another large title insurance fee when acquiring a
secondary loan, according to Radian.
The title insurance industry is somewhat insulated from price competition.
“It’s the middlemen, not consumers, who benefit because title insurance
companies don’t compete on price,” said Birny Birnbaum, an economic
consultant who recently served as an expert witness at title insurance
rate hearings in Washington, D.C. “The consumer isn’t in a position to
exert market pressure to drive down the price of title insurance.”
_____________________
Jim Woodard writes a nationally syndicated newspaper column on real estate
news and trends, carried in about 230 U.S. newspapers. He also writes
freelance features on real estate related subjects. He is also a
professional storyteller, with a Web site at: www.jimwoodard.net/. |
MOLD |
Is
Your House Moldy? |
Tennessee Growth Could Cost Home Buyers |
Realty Times Article.
It maybe old news by now but
NASHVILLE Home buyers moving to Tennessee may find a surprise if
legislators saddle them with higher cost for education. |
Treasury
Yields Near 8-Month Lows
Treasury prices finished the day solidly in the plus column on Friday
after the Dow slipped in afternoon trading. The yield on the benchmark
10-year note closed the day at 4.57% while the 30-year bond ended at
5.33%. Mortgage rates tend to fall as Treasury yields fall and as
Treasury prices rise.
Stocks still struggle
The Treasury market continued to be heavily influenced by a turbulent
stock market this week. Corporate accounting scandals are still weighing
on investor confidence despite a "get tough" speech from President Bush.
In addition, investors are also concerned that upcoming earnings
announcements will reveal disappointing Q2 results. Consequently, many
investors have fled to the relative security of government-backed
Treasuries.
Retail sales rise...for now
There was some encouraging economic news on Friday after the retail sales
report showed a big increase in June sales. Retail sales are extremely
important for the economy's growth, accounting for more than half of the
GDP. Unfortunately, the University of Michigan presented a less rosy view
for the future. According to their index, consumer sentiment has fallen to
its lowest level since November and it is feared that this pessimism will
limit consumer spending in July.
Investors look ahead to Greenspan's report
Next week's most significant event is likely to be Fed Chair Alan
Greenspan's semiannual congressional report on monetary policy. Greenspan
addresses the Senate on Tuesday and the House on Wednesday, and both
senators and representatives are likely to solicit his views on the
economy. His comments could have a huge impact on investor attitudes in
coming weeks.
Check today's rates: Rates
today may be lower than when you applied.
Economic Highlights For Next Week
Signs of economic growth or of rising inflation tend to push mortgage
rates higher. Here is how some of next week's news might affect rates.
Tuesday, 7/16
Greenspan Testimony - Fed Chair Alan Greenspan will deliver his
semiannual report on monetary policy before the Senate. Both Greenspan's
prepared comments and his response to the senators' questions could have a
significant impact on investor confidence. Greenspan will address the
House on Wednesday.
Tuesday, 7/16
Industrial Production - Another key measurement of progress in the
manufacturing sector. Growth in the sector is considered essential for the
economic recovery.
Wednesday, 7/17
Housing Construction - While manufacturing is recovering from a dismal
2001, housing has maintained impressive strength. Wednesday's news is a
measurement of future growth in the sector.
Friday, 7/19
Consumer Price Index - The CPI measures retail inflation - a factor of
increasing importance as the economy improves. Rising inflation would
increase the chance for future Fed rate hikes.
Treasury Values
10-Year Price= 102.10
10-Year Yield = 4.57%
The Market Update is prepared by E-LOAN staff for the benefit of our
subscribers. The contents of this publication are for informational
purposes only, and are not intended to be used as a predictor of interest
rate movements.
Written by Ian Cooper,
E-LOAN Inc.
http://eloan.rsc03.net/servlet/cc5?LtgQUCAVImPOpkLlgxHhtQJhuV6VR
|
Mortgage 101
Newsletter
MORTGAGES AND RELATED PROFITS REACH RECORD LEVELS
by Jim Woodard
Mortgage company profits almost doubled last year,
according to reports from the Mortgage Bankers Association and The
Stratmor Group. Profits are now more than when they reached record levels
during the last refinancing boom in 1998.
Home purchase and refinance loans reached a new record during the past
year, totaling about $1.2 trillion. The lure, of course, is the super-low
mortgage interest rates.
Last year, the average pre-tax net income for companies making home loans
was $1,212 per loan.
In addition to the low interest rates, another factor contributing to the
large number of mortgage loans is the generally relaxing of certain
qualification requirements. Some lenders are now permitting well-qualified
applicants to have loans that will result in mortgage payments being up to
50 percent of the family’s total income.
That was unheard of a few years ago. Ten years ago the normal limit was 28
percent to 32 percent of the family’s income. Also, the average down
payment for a first-time homebuyer has dropped to 3 percent, compared with
10 percent a decade ago.
Home Improvement Mortgages on Rise
Home improvement projects and related mortgages are on the rise. And
rapidly growing home equities and the availability of mortgage loans is
spurring the trend.
With sharply rising home prices in many areas, many families are opting to
satisfy their need for more space by adding rooms to their existing house,
rather than purchasing a new residence. In other cases, the limited
inventory of available homes in some areas force buyers to select and
purchase a less than ideal home. After closing the transaction, they
immediately launch a remodeling project to make the home right for their
family.
When homebuyers want remodeling work following their purchase, they can
often arrange a mortgage loan that covers both the purchase and subsequent
remodeling work.
Sellers are also among the active home remodelers. While preparing their
home to be placed on the market, they remodel and improve certain areas of
the home that will most likely result in a higher sales price. In some
cases (especially in remodeling outdated bathrooms and kitchens), such a
project can result in a price increase far more than the remodeling cost.
Yet another reason for the current remodeling trend is the availability of
funds for the projects by tapping the rapidly growing equity generated by
those rising home values. Money can be easily pulled out of that equity to
pay remodeling contractors.
On the downside of home remodeling is the ever-present risk of dealing
with a shady or non-reliable contractor. The increasing number of
remodeling projects is coupled with a growing number of complaints about
contractors and remodeling firms.
It’s only too easy for a person or firm to put a “home remodeling” sign on
their door, whether they have any experience or capability to handle these
complex jobs or not. It’s best to contact a seasoned local firm, and be
sure to check references and past customers. And use a comprehensive
remodeling contract.
Complaints about remodelers is the second most frequent category of
complaints received by the Better Business Bureau.
Use of Internet
for Information Growing
Since 1996, the use of the Internet for home and
mortgage searches by prospective buyers increased by 39 percent, according
to a recent survey. Newspaper ads are still a major source of information
for home seekers, but an increasing number of buying prospects are
obtaining their information from Web sites, including those owned and
operated by newspapers.
These sites have captured home seekers who are two years younger than the
national median, according to a study and report from Borrell Associates
Inc. Also they have a median household income that is 55 percent higher
than the average.
Another interesting observation: The study found home buying prospects who
go to Web sites for information on available homes and mortgages are
usually renters who are actively interested in purchasing their first
home. This applies to 57 percent of persons accessing these sites.
It’s also interesting to note that the need for real
estate brokerage service is not diminished by the Internet, according to
the survey report. About 86 percent of respondents said even though they
received preliminary information via the Internet they would probably use
a Realtor to complete their purchase transaction.
................................................................
Jim Woodard writes a nationally syndicated newspaper column on real estate
news and trends, carried in about 230 U.S. newspapers. He also writes
freelance features on real estate related subjects. He is also a
professional storyteller, with a Web site at:
www.jimwoodard.net/ |
Whoops Housing
Market Be Slowing! |
*** BEGIN QUOTE ***
A collapsing stock market,
corporate corruption and fear surrounding
threatened terrorists acts may finally be taking its toll on the
confidence
of some home buyers who in the last month have shown less enthusiasm about
buying a home, even as interest rates remain very low.
*** END QUOTE ***
Read the rest of this
Special
Inman News Report |
Sellers and
buyers continue standoff |
Price gap between
what sellers want and what buyers wish to pay remains record high
|
Consumer confidence crumbles
|
|
Home
buyer bill of rights' unveiled
|
Checkout this
article on proposed changes by HUD for home buyers and mortgage loan
borrowers... |
Save Money on Title Insurance... |
Read this article for some money
saving ideas. |
Watching Home Prices... |
*** BEGIN QUOTE ***
Less than two weeks ago, the
KIPLINGER LETTER joined other
publications in noting the continued rise in housing prices
nationwide ...and the possibility that this appreciation may well
slow, or even flatten out, in the near future.
For the past year, ending on April 30, home prices rose
nationally by 7.1 percent. KIPLINGER notes that there is "lots of
overpricing, driven by aggressive lending ...low-down-payment,
interest-only, and discounted adjustable mortgages."
Although KIPLINGER does not forecast a BIG drop -- as happened
with luxury-home prices in parts of California and elsewhere in the
early '90s -- the newsletter DOES note that "price gains of recent
years are not sustainable." Their predictions for the coming year:
flattening of price levels, even some slippage in certain regions,
and more loan defaults.
Striking a more positive note, the Hudson Institute's DAILY
OUTLOOK insists that the current housing "bubble" is not about to
burst, or even deflate severely:
The home ownership rate for people under 35 is only 41
percent, compared with an overall rate of 68 percent. So there are a
lot of younger people out there eager to realize the American dream
of home ownership. The economy is recovering, which should keep
incomes moving up, but share prices are not, which should continue to
make property a relatively attractive investment.
Most important, there is little prospect of a major rise in
interest rates. ...Nor will the Fed be tempted to raise rates merely
to cool the housing market. ...An easing of the rate of increase in
house prices may be ahead, and even a period of stability.
*** END QUOTE *** |
Two-thirds Of Homebuyers Use
The Internet, Says NAR
|
66% of the homebuyers use the internet study shows.... |
Younger Homebuyers Drive The Market,
Says NAR |
Check this article out... |
What Buyers and Sellers
Do & Want |
The National Association
of REALTORS (NAR) just released their
2002 Profile of Home Buyers and Sellers -- a massive study which NAR
conducts every two years to study consumer behavior and trends. This
year's survey produced some intriguing results:
-- 62 percent of buyers with Web access surf the Net to shop
for a home;
-- 41 percent of all home buyers use the Internet as a search
tool, up from 37 percent in 1999;
-- 77 percent of all Internet home shoppers buy a home through
a real estate agent or broker, compared with 64 percent of
traditional buyers;
-- 67 percent of buyers saying they would definitely use the
same agent in a future transaction;
-- the number of homes sold directly by owners continued to
decline, with the percentage of for-sale-by-owners (FSBOs) at 13
percent in 2001, down from 16 percent in 1999;
-- the median selling price of a home sold directly by an
owner was $137,400, while the median selling price of a home sold by
an agent was $175,000;
-- the typical buyer searched for seven weeks to find a home,
down from eight weeks in 1999, and visited ten homes before making a
purchase, the same as in 1999;
-- for all buyers, the average length of time from contract to
closing was five weeks, up from four weeks in 1999; and
-- although buyers use a wide range of resources in looking
for a home, 48 percent first learned about the home they bought from
a real estate agent. [The next biggest sources were yard signs, at 15
percent, and friend/neighbor/relative, 8 percent. Although 41 percent
of buyers used the Internet as a search tool, only 8 percent first
learned about the home they bought on the Web; newspaper ads were
cited by 7 percent of buyers.]
To read NAR's full press release on the 2002 Profile, go to:
http://www.realtor.org/PublicAffairsWeb.nsf/Pages/02BuyerSeller?OpenDocument
[SOURCE: NAR]
|
Web
Beats Newspapers
|
*** BEGIN QUOTE ***
For the first time, the Internet caught newspapers as the primary media
resource for consumer home searches and surpassed newspapers in many key
real estate marketing categories, according to the 2002 Survey of Home
Buyers and Sellers was released by the National Association of Realtors.*** END QUOTE ***
For
complete article click here. The above quote came from an article on
Inman News. |
Truth In Lending
Disclosure Requirements |
*** BEGIN QUOTE ***
TRUTH IN LENDING DISCLOSURE REQUIREMENTS
IMPACT REAL ESTATE ADVERTISEMENTS
In addition to any contract or warranty a real estate
advertisement may create, the federal Truth in Lending Act requires
persons who advertise certain information about financing to make
additional disclosures. Real estate brokers and agents are subject to
the Act and its regulations when they provide credit for sales for
their own accounts or when they arrange for the extension of credit
to purchasers. As implemented by the Federal Reserve Board's
"Regulation Z", the Act generally requires that the terms of the
financing be disclosed to the consumer in a clear, uniform manner. If
the advertisement contains any of the following or similar
statements, it also must provide certain disclosures:
1. Amount or percentage of down payment:
2. Amount of required installment;
3. Number of installments;
4. Period of repayment; or
5. The amount of any finance charge.
When an advertisement contains any of those statements, it
also must include the following disclosures:
1. In a credit sale, "cash price", or the amount of the loan
as applicable;
2. In a credit sale, the amount or percentage of any required
down payment (using the term "cash down payment"), or a statement
that no down payment is required, as applicable;
3. The number, amounts and due dates for periods of payments
scheduled to repay the debt;
4. The amount of the finance charge expressed as an "annual
percentage rate." If the "simple interest rate" is also stated, the
"annual percentage rate" must be shown in print of the same style and
size as the "simple interest rate." The annual percentage may include
insurance, discount and points not included in the contract rate; and
5. If the rate is variable, there must be a statement
indicating that the rate is subject to change.
For example, the above disclosures are required if the
advertisement makes any of the following or similar statements:
1. "Five percent down";
2. "Pay only $355.00 per month";
3. "Only 360 monthly payments";
4. "Pay less than $350.00 per month";
5. "30-year mortgage available."
In contrast, an advertisement making any of the following or
similar statements need not make the Regulation Z disclosures:
1. "Easy monthly payments";
2. "Graduated payment mortgages available";
3. "Terms to fit your budget";
4. "V.A. and F.H.A. financing available."
*** END QUOTE ***
The above "white paper" originated with TAR's friends at
the
Ohio Association of REALTORS.
|
New Bill Would Require 2-Day
Advance Delivery of HUD-1 Form
|
Good bill for home buyers. |
Good News on
100% Financing |
100% Financing for less
than perfect credit. Check this
Realty Times Article.
|
Mortgage Market Commentary
|
We're not as
rich as we thought we were' |
Ugh: Web
buyers deserve an agent |
|
Mold testing
'absolutely unnecessary' |
Check this
article out whether you own, plan to buy or sell a home... |
Interest Rate & Market Outlook |
Freddie Mac reports
that the national average commitment rate
on a 30-year fixed-rate mortgage ended last week at 6.79 percent,
with an average 0.7 point. That is just barely changed from 6.78
percent the previous week, but it represents the first rise of any
size in 5 weeks. Last year at this time, the 30-year fixed-rate
mortgage averaged 7.10 percent.
The average for the 15-year mortgage was 6.27 percent on
Friday, with an average 0.7 point, rising very slightly from the
prior week's average of 6.26 percent. A year ago, the 15-year
fixed-rate mortgage averaged 6.61 percent. {SOURCE: Realtormag.com]
Inman News is reporting that, on a national basis,
single-family residential building permits are UP for the fifth
consecutive quarter. The latest rise -- to record levels -- is
attributed to low interest rates and milder weather this past winter.
On a national basis, permits during the first three months of
the year were up 4 percent, with building activity in the South up by
9 percent ...largely due to expansion in Florida.
[Inman credits the Meyers Group real estate research firm for
the figures above.]
|
Checkout what the
indicators are showing and the experts are saying. |
Housing Market Outlook |
Click here to read this
report. |
Popularity of real estate web sites |
A recent study shows the most popular web
sites for realty consumers.
Click here to
read it. |
Home Buyer Tip Of The Day. |
Do your homework. Location is
almost always one of the most important factors
that affect property values. Other variables include attractive streets,
well-
maintained homes, good schools, access to shopping areas and
transportation, and
amenities such as parks and recreation areas. Homes in neighborhoods
adjacent to
appreciating areas often are good investments. As prices go up and the
supply of
homes for sale dwindles in appreciating neighborhoods, buyers start
looking
nearby.
http://www.inman.com/hstory.asp?ID=29679&CatType=B
|
State Income Tax Headed
for Floor Vote |
From Tennessee Association of
Realtor Legislative Lobbyist
BEGIN QUOTEHouse
Finance, Ways and Means Committee this afternoon
voted to send Speaker Jimmy Naifeh's tax reform plan to the House
floor. If approved, the plan will net the state approximately $1.1
billion in new revenue. Elements of the tax plan include:
-- 4.5% flat income tax with exemptions of $15,000 for single
filers, $30,000 for those married and filing jointly, and $1,500 per
dependent;
-- 50% of net capital gains will be taxable;
-- Repeal of the Hall Income Tax;
-- Removal of all sales tax on grocery food, clothing, and
non-prescription drugs; and
-- A 6% limit on state spending growth from taxes, with an
automatic taxpayer rebate in the event of overcollection.
The bill goes next to the House Calendar & Rules Committee,
which will likely schedule the proposal for a vote of the full House
next Wednesday, May 15.
It is a fair assumption that Naifeh believes he has the
required 50 votes needed for a majority. The Senate approved its
version of this bill in a different form in March, calling instead
for a temporary one-cent hike in the state sales tax rate. If the
income tax is approved by the House next week, the legislation could
be transmitted to the Senate for immediate action.
END QUOTE |
Selling The Deal As Important As Selling The House
Read this helpful article |
A Mortgage Solution to Help Sell Homes. |
http://63.204.221.196/members/viewonline.asp?ID=71745800 |
Freedom From 11th Hour Closing Cost
Surprises. |
Learn what's coming down the pike for borrowers. |
A HEAD START FOR NEWLYWEDS TO
OWN AND FINANCE A HOME |
by Jim Woodard
With many summer weddings now being planned, an increasing number of
engaged couples are using an innovative method to help them purchase and
finance a home of their own early in their married lives.
The plan, structured originally by the Federal Housing Administration
(FHA), is often titled a Bridal Registry Account. It allows couples who
are getting married to open a bridal registry savings account with a bank
or other mortgage lender. Family members and friends can then deposit
their cash wedding gifts directly into the special interest-bearing
account.
It works just like registering at a department store for wedding gifts.
But this plan gives the newlyweds the best gift of all – a head start in
saving for a down payment on a home of their own.
This is a great way for a young couple to start saving for their first
home together. The homeownership rate for households under the age of 35
is only about 58 percent, while the rate for households nationwide is 68
percent. The implementation of Bridal Registry programs could have a
positive impact on closing that gap.
The program was launched by FHA in late 1996, but was later discontinued
as an FHA program, according to an FHA official I recently interviewed.
However, it’s still a viable method to attain the dream of homeownership
early in a couple’s married life.
The first step is to set up an account with a local bank or other lender.
Your Realtor can be helpful in making arrangements.
Either the engaged couple or the lender normally provides for selected
relatives and friends an information sheet about the special account,
along with “gift cards” that reflect the gift-giver’s name for the purpose
of documenting the gift. Not only will the program help buyers obtain a
down payment, the monies are normally tracked and accounted for by the
lender. It will be readily available to serve as part of the down payment
and closing costs when the couple is ready to enter into a home purchase
and financing transaction.
It should be noted that the funds normally remain under the control of the
individuals for whom they’re deposited. The funds can be withdrawn at any
time, and are not required to be used to purchase a home in most cases.
But helping the newlyweds in purchasing a home is the intended purpose of
the given monies. The precise provisions of the arrangement are worked
out by the engaged couple and the lender, and often facilitated by a
Realtor.
Jim Woodard writes a nationally syndicated newspaper
column on real estate news and trends, carried in about 230 U.S.
newspapers. He also writes freelance features on real estate related
subjects. He is also a professional storyteller, with a Web site at
www.storyteller.net/jwoodard. |
Is
A Professional Home Inspection Enough? |
IRead this article and decide for your self...Is A
Professional Home Inspection Enough? |
Consumer Confidence Dips |
Check out
this Inman News Article on April's Consumer Confidence Report. |
Interest Rates Are Attractive
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According to Holden Lewis at
BANKRATE.COM, as of Monday, April 15:
*** BEGIN QUOTE ***
Instability in the Middle East and worries about the domestic
economy combined to push mortgage rates lower in the past week.
The benchmark 30-year fixed-rate mortgage fell 12 basis points
to 7.01 percent, according to the Bankrate.com national survey of
large lenders. A basis point is one-hundredth of 1 percentage point.
The mortgages in this week's survey had an average total of 0.62
discount and origination points.
This could be the dip in mortgage rates that fence-sitters
have been waiting for.
*** END QUOTE ***
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Staging Homes To Sell |
From Tennessee
Association of Realtors' Newsletter: *** BEGIN QUOTE ***
"Just putting a
property into the Multiple Listing Service is
not enough. And too many "days on the market" may result from more
than just a slow economic period, or overpricing. A recent article by
Blanche Evans, for REALTOR Magazine Online, includes a number of
worthwhile tips on correctly "staging" a property for sale ...as well
as useful ideas from several leading salespeople across the country.
Some tips - like removing clutter or making cosmetic repairs
to the property before showings - are obvious. Having a virtual
checklist of items to watch for, however, IS useful. To read
Blanche's article in its entirety, go to:
http://www.realtor.org/rmomag.nsf/pages/bevans200204222"
*** END QUOTE ***
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Seller Liability?
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When a home
buyer refuses to do home inspection. |
The MLS List Price |
From TAR's Legal & Ethics Hot Line:
QUESTION: When a listing is in the MLS at a certain price, can
that price be increased when we have not added anything to what is
offered in the MLS description? Can the builder be obligated to sell
it at the price offered in the MLS?
ANSWER: There is nothing that requires a seller of property to
accept a particular price, even if the property is listed in the MLS
at that price. A MLS listing is an invitation to make offers, not an
offer. During the course of negotiation of various offers, the owner
of that property may increase the price to whatever a potential
purchaser might be willing to pay.
|
Contract
Considerations
|
If you are thinking about
withdrawing from a purchase contract for a reason not in the agreement
you should read this
short article. |
One-Stop Shopping Favored in New Survey |
A recent REAL TRENDS newsletter reports:
*** BEGIN QUOTE ***
A recent Murray Consulting/Harris Interactive study of
consumer preferences in one-stop shopping, completed on March 25,
2002, which surveyed 2052 recent and future homebuyers, found that
the consumer's appetite for one-stop shopping increased dramatically
from a similar study done by the National Association of REALTORS in
1999. Eighty-two percent of homebuyers, both recent and future, said
they would consider strongly or consider somewhat one-stop shopping
and firms that offer one-stop shopping, up from 58 percent just three
years ago.
*** END QUOTE *** |
Mold Assessment
|
At a recent Tennessee Association of Realtors convention Janice Ruhs gave
us a strong warning about the dangers of mold, It has been the basis of
some of the largest lawsuit settlements in recent history. It is
extremely important that buyers get some kind of professional mold
assessment along with their home inspections.
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Single-lender Web sites:
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Why aren’t
they better? Read the Mortgage Professor's five part study.
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Down Payment Assistance Programs: |
Monte Carroll gave a fine comparison of
the three major Down Payment Assistance Programs approved by FHA:
Nehemiah, Ameridream, and OWN. There are important differences that can
save a seller money. He'd be glad to assist anyone who is considering such
a program. You can call him at 221-4181.
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Sellers and Buyers: |
The gap between what online homeowners hoped to receive when they sell
their home and the amount Internet-using buyers wished to pay to purchase
a home remained below $100,000 in February for the second time since
November, according to results of a study released today by HomeGain.
http://www.inman.com/hstory.asp?ID=29109&CatType=R |
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