Category — Buying a Home

MRIS, the database used by professional real estate agents in the Mid-Atlantic states to list homes for sale and rent, now has a new feature – searching for neighborhoods suited to your lifestyle.  Public access is through HomesDatabase, the public portal.

You can adjust parameters for:

• Fun & Entertainment
• Shops & Stores
• Family & Child Friendly
• Highly Rated Schools
• Pet Friendly
• Median Home Price
• Rural, Small Town, Suburban, Urban, Downtown
• Public Transportation

The usual search parameters for homes are also available (e.g. single family detached, townhome, etc.).  An interactive map has icons for the homes for sale.

This is great for anyone who is unfamiliar with the area or who may be deciding where they want to live.

Check it out for yourself – let me know what you think!

LIFESTYLE SEARCH

There is more and more research coming out showing that it makes great financial sense to purchase a home today . Whether it be rent vs. buy ratios, income-to-price ratios or income-to-mortgage payment ratios, purchasing a home right now is a bargain compared to historic norms. Now we want to look at the COST of a home today compared to pre-peak prices.

According to the most recent S&P Case Shiller price index, residential real estate values have returned to 2003 prices. That, in itself, says something. However, when you factor in mortgage rates, the case for buying a home today becomes even more compelling.

In 2003, 30 year mortgage rates stood at 5.88%. Today, they are 4%. How does that impact the actual COST of a home? On a home purchased for $250,000, here is the difference in monthly cost:

That means you save $285.30 a month, $3,423.60 a year and $102,708 over the life of a 30 year mortgage! You buy the home for the same PRICE but the COST is over $100,000 less.

Bottom Line:
This is why so many financial advisors are saying that this may be one of the greatest times in history to purchase a home!

Reprinted from the KCM Blog - www.kcmblog.com

You want to buy and you have heard that home prices are really low and there are some good deals out there with all the foreclosures and short sales.  Perhaps you have also listened to some scary advice from TV financial pundits who are saying not to buy right now because prices are going to drop even more . . .and the economy is in bad shape, and Wall Street isn’t doing so well, yada, yada, yada.  Here are some things I want you to keep in mind:

1. The real estate market is LOCAL!  National TV personalities are speaking to the whole country and can’t possibly say anything worthwhile for any particular local market.  Also, they are there to get ratings and if they can say things that are inflammatory and perhaps controversial (like one who I won’t name who told people to stop making payments on their mortgages – yikes!) more people tune in and the networks are happy.

2. Home prices may or may not come down – no one really knows that for sure.  What I do know – home prices are the lowest they have been in years.  It’s like a clearance sale at the mall!  In time prices will go up – how do I know this?  Because history is a good yardstick and historically the price of homes is up/down/up/down/up like a wave.  It makes much more sense to buy when the prices are low – not when they are high!  Problem is, if you think you can time the market, you won’t know when it has hit bottom until it starts going up again – by then it will be too late to get the lowest price.

3. Mortgage rates are at jaw-dropping historic lows.  This is the one single most important factor in home affordability.  With rates this low, buyers have incredible purchasing power.  You should know that for every 0.125% rise in the interest rate, the purchase price will drop by 1.45% to keep the same monthly payment.  Wow.

So tell me now. . .why are you waiting?

Fannie Mae has a great program that is worth considering if you are thinking of purchasing a home before the end of the year.  

Check out these incentives:

• 3.5% toward buyer’s closing costs
• loans up to the jumbo conforming limit (which varies by region)
• 3% downpayment for owner-occupied homes
• downpayment can be from your savings; a gift; a grant; or a loan from a nonprofit organization, state or local government or employer
• no appraisal fees (lowers your closing costs)
• no mortgage insurance (lowers your monthly payment)
• available for investors (10% down payment)
• eligible for HomePath Renovation mortgage
• credit scores as low as 620 FICO
• fixed or adjustable rate options

This program is only for HomePath approved properties.  To search for a HomePath home, visit http://www.homepath.com.  If you see something that you like, just give me a call - I’ll be happy to show you any HomePath or other property you are interested in.

So here you are a few days before settlement -the movers are scheduled, the utilities switched over in your name and the post office has the order to forward your mail – a call comes in from your lender: OOPS!  Your loan is not approved and that gorgeous home that you and your agent negotiated so hard to get at an awesome price slips away. . .

Unfortunately, this scenario will become more common with Fannie Mae’s new Loan Quality Initiative that requires lenders to run a borrower’s credit score a second time a few days before closing along with other last minute verifications before final loan approval is granted.  If there’s been a dip in the credit score (perhaps the borrower took out a new credit card) the lender will be required to delay closing, ask for more down payment, increase the interest rate, or at the worst – cancel the closing.

Many lenders have already been running these last minute verifications – the difference now is that Fannie Mae requires that all lenders do so.

Here are 7 tips for consumers who are in the process of buying a home and want to settle on time:

1. Don’t change your employement status

2. Don’t make major purchases (car, furniture, home theater, vacations, etc.)

3. Don’t increase your credit card debt or miss any payments

4. Don’t change bank accounts or make undisclosed large deposits

5. Don’t apply for a credit card, co-sign a loan, or make a credit inquiry

6. Don’t spend money you have set aside for closing – not any, not ever

7. Don’t delay in providing all paperwork asked for by the mortgage company

SDLP (Settlement Downpayment Loan Program) has received new funding, and will go live in July!

Not too many programs out there that give home buyers money for down payments:  The

This program provides for $15,000 to $40,000 (income dependent) in down payment and closing cost help to qualified buyers who are purchasing in Howard County.  Also, you don’t have to pay it back unless you sell or refinance.

Hurry and call now for a referral to a lender who can take your application for these funds – just like the last batch of money, this too will run out!   

Image by bredgur via Flickr

Recently, I reported that the IRS did not have a form for applying for your tax credit.  Well, the wait is over.  Welcome Form 5405!

Click Here for Form 5405 and Instructions