Costs, Deadlines -- Where Now?

Where do we go from here? As usual, that is a good question. The money saving First Time Home Buyer and Existing Home Buyer Tax Credits are due to expire soon. Contracts MUST be signed by April 30th, and closings must take place by the end of June. If these programs "go away" then buyers will find it more expensive to move ahead with their real estate plans. And, the FHA initial mortgage insurance premium (MIP) may be rising soon to 2.25%, from 1.75%. It is even possible that the 3.5% down payment required for FHA may increase soon. Additionally, the Government will soon terminate some of its mortgage market support programs. What does all of this mean? Anyone "sitting on the fence" about making a move in the real estate market needs to seriously consider their options. Administrative costs in general and interest rates may be in an upward trend, soon.

Looking For What?

The February issue of Realtor Magazine says smaller is desirable. In terms of square footage, prospective home owners are reducing their size goals, and the current average size home has decreased from 2,277 Square feet to 2,215 square feet, nationally. The National Association of Real Estate's magazine claims this is the first reduction since the 1980's. According to the article this doesn't mean families are giving up "the luxury and toys, but they are putting them into a smaller space." If you are a seller, I can assure you that buyers continue to look for homes that have been well maintained. Additionally, sellers who present a home that seems fresh and clean, and also uncluttered, have an advantage in the memory bank of home seekers when they move into the decision phase of their home search.

Interest Rates Going Up?

Maybe, but not right away. By the end of March the Federal Reserve will no longer be purchasing mortgages directly from Fannie Mae and Freddie Mac. These are the quasi-governmental financial institutions that provide liquidity to the residential real estate market by purchasing conforming home loans from financial institutions such as mortgage brokers and mortgage bankers.

BUT, it is very likely that when the Federal Reserve purchase program is ended (and it will be) that mortgage interest rates will begin to rise. How much? Now, that is the question. So, if you are considering a home purchase, it may be in your interest to push your time frame forward. Do this only, however, if it makes sense. I don't think you should ever "step out" early unless it makes financial sense to do so and is achievable.

Plan for Extra Costs, Yeah

I was reading the Sunday newspaper and there was an article in the Homes Section, which was titled "Plan for extra home costs." Yes, by all means! If you purchase a new home it should be awhile before the maintenance items start queuing up, but it does happen. Whether your home is "new" or several years old, over time the systems in a home do wear out. Yes, someday the house will need a new roof. Perhaps the heat pump will need repair. Hint -- get your unit serviced every year and that first major repair won't come as soon and the unit will function better in the mean time.

This particular article I read said that homeowners should keep one percent of the homes purchase price in reserve for improvements and surprise expenses. The article went on to say "That is the absolute minimum. It's better to have 2 or 3 percent socked away somewhere." I could not agree more. Houses tire too, and when they do you need to have some extensive skills yourself or you will have to call in the repairman. There isn't an alternative.

Mortgage Application and Settlement Changes

The new realestate mortgage application and settlement procedures adopted by the Housing and Urban Development(HUD)Department, effective January 1st, will probably take a little getting used to. These changes, there are about 33o pages in the new regulation, are the first major changes since 1974. Everyone, including buyers, mortgage loan origination officers, and settlement attorneys will be busy adjusting to the new ways of doing things, and, at least initially, it will probably take a little longer to get from the point of contract to the closing. The intent of the new regulations is to improve accuracy and disclosure with regard to all residential loans. As I understand the new rules, the settlement "numbers" are supposed to be known three days before closing and are not to change in that timeframe. If they do, then the necessary changes are made and the clock is restarted. So, everyone has got to pay close attention to the process and whenever there is a requirement to provide information into it that person needs to be sure of the informations accuracy.

Happy New Year!

As we begin a new year may we all experience the joy of renewal and the expectation of happiness and the realization of the American dream! Let's be thankful for what we have, and let's ask God's blessing upon our country in 2010.

Best wishes and a Happy New Year to my readers!

Christmas Cheer!

Good news, today! The National Association of Realtors (NAR) reported that the November sales of existing homes across America was an increase of 7.4% over October. Why? It's believed to be a result of falling prices, comparatively low historical mortgage rates, and first time home buyers trying to qualify for the tax credit,which was originally scheduled to expire on November 30th. The tax credit has been extended and in all probability will be a boon to sales through part of 2010.

Also, good news -- Christmas is upon us! This is a special time of the year, and like Thanksgiving we should reflect on how fortunate we are to be Americans. Unlike many people in the world we have the freedom to worship God as we choose and to belong to the church we prefer.

At my house we decorate our grandfather clock each year and call it "the Christmas Clock." Some years my wife and I have even put our presents beneath it. the picture with this post is our Christmas Clock. From my house to yours -- Merry Christmas, and a Happy New Year!