Happy Halloween – Superstitions relating to buying or selling a home

Are you superstitious?

The following are superstitions relating to buying or selling a home.
1) The “Old Farmer’s Almanac” advises for good luck to bring along a new broom and salt on your first visit to your new home.
2) In the old South, porch ceilings were painted “haint blue” a soft blue green shade said to keep ghosts away.
3) Years ago it was common to place shoes or coins in a building’s foundation for good luck.
4) For a quick sale of your home, lore says to bury a statue of St. Joseph, up-side-down in the yard.

Happy Halloween!

What’s more important…the cost of a home or the price of a home?

It’s an important distinction.  Cost of a home is just as important, or perhaps more, than the price of a home.  Now, obviously, price is part of the cost equation.  However, the other piece, assuming you are not an all cash buyer, is the mortgage rate. The mortgage rate to finance a purchase can have a dramatic impact on the overall cost. Recently, there are more people talking about the possibility that mortgage rates could begin to increase.

HSH.com studies trends in mortgage rates. They explain:

“A better economic climate almost always brings higher rates, and a
lessening of the troubles in Europe from massive central bank assistance adds to
the movement of money from safe havens to more risky assets, driving rates
upward.”

Dan Green of The Daily Market Reports recently stated:

“The Fed sees growth coming faster than originally expected. There’s
suddenly less chance that the Federal Reserve will intervene to help keep
mortgage rates low. Absent Fed intervention, mortgage rates are apt to rise and
Wall Street is now betting that the Fed has bowed out. With no stimulus,
mortgage rates rise.”

Lawrence Yun, chief economist for the National Assoc of Realtors,
recently wrote:

“Mortgage rates will be starting to rise. From the 3.9 to 4.0 percent
average rate in the past five months on a 30-year fixed mortgage, the new rates
will soon be in the range of 4.3 to 4.6 percent.”

Courtesy of KCM Blog

IS IT A GOOD TIME TO BUY A HOME?

 

If you have any questions please call or email me: Jeanne Jordan ~ 630-334-1520 ~ jeanjordan@comcast.net

IS IT A GOOD TIME TO BUY A HOME?

Almost six million adults between the ages of 25 to 34 are currently living with their parents. That number reflects an almost 50% increase since 2003. These young adults are now being advised to jump into homeownership.

Who are the people selling them on the American Dream? Their parents! It seems that parents of some adult children are strongly suggesting that their
children take advantage of the low cost of homeownership available today. Some moms and dads are helping financially and are even co-signing for the mortgage.
Middle age parents who have owned a home understand its true value. A home has always been a good long term financial investment. However, omeownership also has many other benefits.

In Fannie Mae’s most recent National Housing Survey, they asked the question directly: Is this a major reason to buy a home?

The study broke up the answers into financial and non-financial reasons. The top four reasons and six of the top ten reasons were NON-FINANCIAL. The top four are below:

  1. It means having a good place to raise children and provide a good education.
  2. You have a physical structure where you and your family feel safe.
  3. It allows you to have more space for your family.
  4. It gives you control over what you do with your living space (renovations
    & updates).Should this surprise us? Aren’t these the same reasons our parents bought their home? Aren’t these the same reasons we purchased our home? These are the same reasons parents have suggested their children buy a home. They want the same things for their grandchildren that they believed to be important for their children.And today, the cost of homeownership is at all time lows:

    J.P. Morgan

    “The numbers on housing have an important message for American families
    today, and particularly younger families setting out on life’s great adventure:
    Five years ago, at the peak of the home-buying euphoria, it was emphatically a
    time to rent. Today, when home ownership is depreciated more than ever before,
    the numbers tell us it is a time to buy.”

This report courtesy of the KCM Blog.

NEWSLETTER RECIPE – COOKING TIME

To all who received my December newsletter – I inadvertently left out the cooking time for Aunt Pat’s French Toast.  My apologies.  The French Toast should bake uncovered at 350 for one hour.

Jeanne

IT’S TIME TO BUY A HOME!

In the past month four different respected financial resources said the same thing:

IT’S TIME TO BUY A HOME!

The four are The Wall Street Journal, Forbes Magazine, JP Morgan Market Insights and MarketWatch.com

Monday, we gave you the links to four different articles that came to the same conclusion: it’s time to buy a home. Today, we want to take a closer look at one of the sources, the JP Morgan’s Market Insights report. Right from the beginning, the paper identifies the greatest challenge in today’s housing market: consumer emotion. They attempt to overcome that emotion with logical reasons why now is the time to buy a home. They break it down to the following.

Price-to-Income Ratio

One measure of housing values is the ratio of personal income to home prices. The report explains where we are today:

“Since 1966, the median price of an existing single family home in the U.S. has varied between 150% and 251% of personal income per household. However, roughly three-quarters of the time it has been in a relatively narrow band between 185% and 230%. In September 2011, the ratio was just 153%, implying that to get back to an average price to income ratio, home prices would have to rise by about 27%.”

Current Mortgage Interest Rates 

With current 30 year mortgage rates, housing payments are at historic lows as compared to personal income.

“During the week of October 7, Freddie Mac reported that mortgage rates had fallen to an average annual level of 3.94%. Assuming the use of a fixed rate mortgage with 20% down, this would make the median mortgage payment on a single family existing home just 6.9% of per household personal income, compared with an average of 14.4% since 1966.” 

Monthly Rent vs. Monthly Mortgage Payment 

Is it less expensive to own a home or rent a home? The answer to this question helps families make the decision whether or not to buy a home. The report explains:

“By the third quarter of this year, we estimate that the implied median mortgage payment had fallen to just 78% of the median asking rent…”  

Bottom Line

The paper comes to the conclusion that now is the time to buy.

“The numbers on housing have an important message for American families today, and particularly younger families setting out on life’s great adventure: Five years ago, at the peak of the home-buying euphoria, it was emphatically a time to rent. Today, when home ownership is depreciated more than ever before, the numbers tell us it is a time to buy.”

I agree.

courtesy of the KCM blog

 

REAL ESTATE IS STILL THE BEST LONG TERM INVESTMENT

BELOW IS A STARTLING GRAPH!  IT DETAILS AN INVESTMENT FROM JANUARY 2001 TO NOVEMBER 2011. 

THIS IS THE TIME TO BUY!!
 

Return on Investment Since 2000

COURTESY OF THE KCM BLOG.

Jeanne Jordan

4th Straight month-over-month home price increases

As reported by the Chicago Tribune this week, Chicago area home prices rose for the fourth consecutive month in August – according to the S&P/Case-Shiller home price index.  Chicago area home prices rose 1.4% in August. Although it is still down from August of 2010 by 5.8% – the month-over-month increase for a fourth month in a row could be a strong indication of improvement.

Jeanne Jordan, CNC, Realtor

TIPS FOR PRESENTING A STRONGER MORTAGE APPLICATION

As underwriting guidelines become more stringent we need to reexamine what a good mortgage application looks like. As home buyers begin their search for a home, there are a few items they should be aware of that they can do to help get their loans approved (with the best possible terms), and, at the same time, lessen some of the stress that goes along with the mortgage process

1. Income documents

Most lenders want to see a full month of paystubs and two years’ complete Federal Tax Returns. Assembling them ahead of time and holding on to every paystub you get is a good idea even before you find a home and/or submit your mortgage application because it will save you time later. Moreover, looking at those documents and being prepared to explain any deductions that show up is crucial. Child support, alimony, garnishments, and Unreimbursed Employee Expenses are often crippling factors that, if explained and dealt with upfront, can make your loan approval smoother.

2. Asset documents

Most lenders will scour your bank accounts for the two months prior to going to contract. They are looking for large deposits because large deposits can signal a new loan that wouldn’t show up on your credit report yet. What’s a “large deposit”? Typically, any deposit that would represent more than your income can support. If you make $5000 a month, after taxes you likely net $3800 (or $1900 a bi-weekly pay period). Therefore, deposits in excess of that will need to be explained and documented. Sold a motorcycle? Have a paid receipt and motor vehicle documents in place. Received a gift? You will need a Gift Affidavit, proof of the donor’s ability and transfer of the funds. Any and all questions should be discussed with your loan officer

3. Credit Score Optimization

Do your best to curtail your use of credit as it relates to your available credit lines. Target a cap of 30% of usage of available lines to get the best scores. Do NOT cancel credit cards. That will lower your amount of available credit, thereby raising your percentage of usage. That will damage your score. Do NOT shop for a car, explore life insurance, apply for a new credit card or increase the limits on your current cards because the running of your credit by people in other industries will also lower your credit score. Most importantly, don’t do anything that will require having your credit run without first discussing it with a mortgage professional who knows the impact it could have.

4. Appraisal Concerns

It’s unlikely you will make an offer to purchase without checking out comparable home sales. It’s also likely you received that type of data from the real estate agent you are working with. Make sure your agent prepares the same information for the appraiser. Data about similar sales, similar homes currently on the market and maybe even cost estimates for any repairs or improvements anticipated can preempt future problems with appraised values and conditions.

Overall, it is recommended that you hold onto copies of everything financial, think before allowing your credit to be run and work with an agent and loan officer who can use their experience to put your loan application in its best possible light…as soon as you start thinking about buying a home.      From The KCM Blog October 6, 2011

 

 

Home Sale Prices Increase

The report below, an arguably relevant and positive housing report, appeared in a side-bar on page one of the Chicago Tribune Business Section last week. My question is, why wasn’t it on the Front Page? Read on…

Home prices in the Chicago area showed expected summer strength in July, posting a fourth consecutive month-over-month gain, according to a widely watched measurement of home values released Tuesday.

Still, the S&P/Case-Shiller Home Price index showed that despite a 1.9 percent improvement in prices in July, compared with June, home values in the Chicago area were 6.6 percent lower than a year ago, putting them at levels not widely seen since March 2002.”

September 27,2011/ By Mary Ellen Podmolik/ Tribune staff reporter

Yes, prices are lower this year than last year.  However what we should be watching now is the month-to-month numbers.  This is what will tell us when decline has ended.  As of July (the latest  that numbers are available for) we have seen our fourth month in a row of improvement, albeit small improvement, it is movement up in sale prices, rather than down.

If this continues for a fifth month, let’s hope it makes the Front Page!

Jeanne Jordan, CNC, SFR

 

Trouble paying your mortgage? If it sounds too good…it is!

DESPERATE HOMEOWNERS USE CAUTION

 Sadly, mortgage fraud is on the rise…Mortgage Rescue Fraud that is.  Many consumers unable to pay their mortgage are looking for help.  And as will happen, there are some unscrupulous people looking to cash in on the troubles of others.  If you are a homeowner struggling to pay your mortgage, or if you are already in the foreclosure process – you may be feeling desperate.  That’s what these people bank on. Sometimes it’s hard to know whom to trust. Be leery of someone who contacts you offering his or her help…especially of what they offer sounds spectacular. 

Generally, if it sounds too good to be true…it is.

A good place to start is with the holder of your mortgage.  Although the statistics on mortgage loan modification are not very good, making your lender aware of your situation is always the best first step.

Next you might consider contacting a housing counselor, approved by the Department of Housing and Urban Development.  This information can be found at hud.gov.

 If you find that you are “upside down” on your home, owing more on it than it’s currently worth, you may want to consider a short sale.  For that you will want a Realtor experienced in short-sales.  My team has closed 100% of our short sale listings to date.  Call or email me for more information.

 Jeanne Jordan, Realtor CNC, SFR

630-334-1520

jeanjordan@comcast.net