At nearly a 4 year high, mortgage interest rates reflect the state of the economy. "The last time the 30-year fixed was higher was the week of June 26, 2002, when the benchmark rate weighed in at 6.57 percent. About a year after that, it bottomed out at 5.28 percent. It then took almost three years for the 30-year fixed to regain that one-year plunge," according to Bankrate.com.As many have predicted, interest rates on loans are going up, and up. Will we see 7% soon?"The benchmark 30-year fixed-rate mortgage rose 5 basis points to 6.56 percent...One year ago, the mortgage index was 5.95 percent; four weeks ago, it was 6.43 percent," reports Bankrate.com.
To read more: Bankrate.com 4-13-06 interest rate report
Tuesday, April 18, 2006
Living Near the Airport Can Be a Headache
The Denver International Airport is developing a home buyer's guide to educate those who consider moving into the area about the various issues associated with living near an airport.Buyers of homes near the airport also must sign a contract that includes a legal disclosure, and some sales include easements regarding overhead traffic.
The guide, which will be available in the fall, explains various issues to buyers who must sign a contract, including:
Visual intrusion. People who live near airports will see huge planes flying only a few hundred feet overhead.
Noise. Jet engines are becoming quieter, but planes still make noise.
Flight patterns. Once they reach proper altitude, departing airplanes can follow any path the pilots choose. As a result, noise disturbances can vary on any given day.
Safety. Nearly 70 percent of all airplane accidents occur on takeoff and landing.
Source: Denver Post, Aldo Svaldi (04/16/2006)
The guide, which will be available in the fall, explains various issues to buyers who must sign a contract, including:
Visual intrusion. People who live near airports will see huge planes flying only a few hundred feet overhead.
Noise. Jet engines are becoming quieter, but planes still make noise.
Flight patterns. Once they reach proper altitude, departing airplanes can follow any path the pilots choose. As a result, noise disturbances can vary on any given day.
Safety. Nearly 70 percent of all airplane accidents occur on takeoff and landing.
Source: Denver Post, Aldo Svaldi (04/16/2006)
Friday, April 14, 2006
8 must-ask mortgage and refi questions
Whether you're buying a house or refinancing, there is more to a mortgage than the rate. Here are eight questions to ask while mortgage shopping. You'll have to ask yourself some of these questions; others can only be answered by mortgage professionals and insurers.
1. How long do I plan to stay in the house?That's often a hard question to answer. Try anyway because a lot of your decisions depend on the answer.
"I always say, 'What's the game plan? How long do you plan to be in the property?'"
The answer affects whether you would be better off paying points to lower your rate, whether you should get a fixed-rate or adjustable-rate loan, whether you should accept a prepayment penalty. If you're thinking of refinancing, the answer helps you decide whether you should refinance at all.
If you have no idea how long you'll live in the house, keep in mind that homeowners stay in one residence for a median duration of 8.2 years, according to 1998 U.S. Census data. In other words, half of homeowners move within 8.2 years. The other half, naturally, stay in their homes longer. Do you feel "average"? If so, maybe it means you'll stay home for about eight years or so.
(FYI, with renters, the median stay in one residence is 2.1 years.)
2. How much are the costs of getting the loan?When you apply for a loan, you'll get a federally mandated document called the Good Faith Estimate of closing costs. It estimates how much the lender will charge you for origination and discount fees, an appraisal, a credit report, document preparation, title insurance, a pest inspection and myriad other costs. Compare good faith estimates and especially take note of the line that reads "Estimated cash at closing." That's an educated guess of how much you'll have to pay out of your checkbook to get the loan.
3. How long will it take to break even?If you're buying a home, how long will it take to break even if you pay discount points to get a lower rate? If you're refinancing, how long will it take to recoup the closing costs from your monthly savings?
In either case, all you have to do is divide the upfront cost (of discount points if you're buying a house and of all the closing costs if you're refinancing) by the monthly savings you would get. That tells you how many months it will take to break even. If it's going to take five years to break even but you expect to stay in the house four more years, it's probably not worth it.
4. What makes me feel comfortable? insist on paying zero discount points, while others want to pay a lot of points to get absolutely the lowest interest rate, "even if it takes four or five years to break even."
there often is no right or wrong answer when people ask whether they should pay discount points or choose a 15-year or 30-year mortgage. "There's not just an objective, dollars-and-cents number," "There's also the psychological factor: What are you going to feel comfortable with?"
Some homeowners would rather refinance once and never have to bother with refinancing again, so they pay a lot of points for a rock-bottom rate. As a bonus, they have something to boast about at cocktail parties. Other clients simply want the lowest possible payments, so they snag an interest-only, five-year ARM. All understand what they're getting into and have found their comfort zones.
5. How long should I lock?This will depend on how busy the lenders and mortgage servicers are -- the busier the offices, the longer the wait to close. If you want to lock a rate, follow the broker's or lender's advice on how long you should lock. You might be told to lock for 45 days or even longer. For more information on rate locks, read my column "Rate lock anxiety."
6. Will I be able to make the payments when I include all the monthly mortgage expenses?Principal and interest are only part of your monthly payment. Add in private mortgage insurance, association fees, property taxes and homeowner insurance and your range of affordable homes will narrow -- to the ones you will actually be able to afford.
In addition, you'll need a savings cushion. Many people don't find room in their budget to save up for the inevitable roof repairs, furnace replacement and painting. Then they step on the debt treadmill to pay for those things.
Experts often recommend that couples qualify for a mortgage based on one partner's income. That lets them escape a common dilemma today, in which the income from one spouse vanishes, leaving them one paycheck away from financial disaster.
7. Is my credit good enough to get that attractive rate?The advertised rate isn't necessarily the rate you'll get. If your credit history is merely OK instead of excellent, you'll be quoted a higher rate than your chum with flawless credit. To be more specific, if you have been more than 30 days late with your mortgage payment anytime in the last couple of years, you are unlikely to get the best rate. Ditto if you've been more than 30 days late three or four times in the last couple of years on other types of debt, such as credit cards and auto loans.
People with less-than-perfect credit won't be turned away. They'll just have to pay a higher rate.
Before applying for a mortgage, check your credit reports to make sure they're accurate.
8. Can I get homeowner insurance?This question is especially important in states susceptible to hurricanes such as Florida, Texas and other Gulf Coast states. Mold problems, hurricanes, sinkholes and tornadoes are big reasons why these states pay some of the highest premiums in the nation. Texans are charged the most, according to the latest annual homeowners insurance report from the National Association of Insurance Commissioners. Homeowners in Louisiana, Oklahoma and Florida pay the next highest premiums.
Some insurers have pulled out of states and refuse to write new homeowner policies. If you're buying a house with a history of insurance claims for water damage or mold, you might have trouble finding a company that will insure it. Shop for insurance long before the closing date.
Need additional help contact Brian Levitan at 630-649-2150 from Midwest Equity Financial Services.
1. How long do I plan to stay in the house?That's often a hard question to answer. Try anyway because a lot of your decisions depend on the answer.
"I always say, 'What's the game plan? How long do you plan to be in the property?'"
The answer affects whether you would be better off paying points to lower your rate, whether you should get a fixed-rate or adjustable-rate loan, whether you should accept a prepayment penalty. If you're thinking of refinancing, the answer helps you decide whether you should refinance at all.
If you have no idea how long you'll live in the house, keep in mind that homeowners stay in one residence for a median duration of 8.2 years, according to 1998 U.S. Census data. In other words, half of homeowners move within 8.2 years. The other half, naturally, stay in their homes longer. Do you feel "average"? If so, maybe it means you'll stay home for about eight years or so.
(FYI, with renters, the median stay in one residence is 2.1 years.)
2. How much are the costs of getting the loan?When you apply for a loan, you'll get a federally mandated document called the Good Faith Estimate of closing costs. It estimates how much the lender will charge you for origination and discount fees, an appraisal, a credit report, document preparation, title insurance, a pest inspection and myriad other costs. Compare good faith estimates and especially take note of the line that reads "Estimated cash at closing." That's an educated guess of how much you'll have to pay out of your checkbook to get the loan.
3. How long will it take to break even?If you're buying a home, how long will it take to break even if you pay discount points to get a lower rate? If you're refinancing, how long will it take to recoup the closing costs from your monthly savings?
In either case, all you have to do is divide the upfront cost (of discount points if you're buying a house and of all the closing costs if you're refinancing) by the monthly savings you would get. That tells you how many months it will take to break even. If it's going to take five years to break even but you expect to stay in the house four more years, it's probably not worth it.
4. What makes me feel comfortable? insist on paying zero discount points, while others want to pay a lot of points to get absolutely the lowest interest rate, "even if it takes four or five years to break even."
there often is no right or wrong answer when people ask whether they should pay discount points or choose a 15-year or 30-year mortgage. "There's not just an objective, dollars-and-cents number," "There's also the psychological factor: What are you going to feel comfortable with?"
Some homeowners would rather refinance once and never have to bother with refinancing again, so they pay a lot of points for a rock-bottom rate. As a bonus, they have something to boast about at cocktail parties. Other clients simply want the lowest possible payments, so they snag an interest-only, five-year ARM. All understand what they're getting into and have found their comfort zones.
5. How long should I lock?This will depend on how busy the lenders and mortgage servicers are -- the busier the offices, the longer the wait to close. If you want to lock a rate, follow the broker's or lender's advice on how long you should lock. You might be told to lock for 45 days or even longer. For more information on rate locks, read my column "Rate lock anxiety."
6. Will I be able to make the payments when I include all the monthly mortgage expenses?Principal and interest are only part of your monthly payment. Add in private mortgage insurance, association fees, property taxes and homeowner insurance and your range of affordable homes will narrow -- to the ones you will actually be able to afford.
In addition, you'll need a savings cushion. Many people don't find room in their budget to save up for the inevitable roof repairs, furnace replacement and painting. Then they step on the debt treadmill to pay for those things.
Experts often recommend that couples qualify for a mortgage based on one partner's income. That lets them escape a common dilemma today, in which the income from one spouse vanishes, leaving them one paycheck away from financial disaster.
7. Is my credit good enough to get that attractive rate?The advertised rate isn't necessarily the rate you'll get. If your credit history is merely OK instead of excellent, you'll be quoted a higher rate than your chum with flawless credit. To be more specific, if you have been more than 30 days late with your mortgage payment anytime in the last couple of years, you are unlikely to get the best rate. Ditto if you've been more than 30 days late three or four times in the last couple of years on other types of debt, such as credit cards and auto loans.
People with less-than-perfect credit won't be turned away. They'll just have to pay a higher rate.
Before applying for a mortgage, check your credit reports to make sure they're accurate.
8. Can I get homeowner insurance?This question is especially important in states susceptible to hurricanes such as Florida, Texas and other Gulf Coast states. Mold problems, hurricanes, sinkholes and tornadoes are big reasons why these states pay some of the highest premiums in the nation. Texans are charged the most, according to the latest annual homeowners insurance report from the National Association of Insurance Commissioners. Homeowners in Louisiana, Oklahoma and Florida pay the next highest premiums.
Some insurers have pulled out of states and refuse to write new homeowner policies. If you're buying a house with a history of insurance claims for water damage or mold, you might have trouble finding a company that will insure it. Shop for insurance long before the closing date.
Need additional help contact Brian Levitan at 630-649-2150 from Midwest Equity Financial Services.
10 Questions to Ask Your Lender
What are the most popular mortgage loans?
What are the differant types of mortgages availaible?
Are any of your rates, terms, fees, and closing costs negotiable?
Will I have to buy private mortgage insurance?
If so how much will it cost and how long will it be required?
Who will service the loan?
Your bank or another company?
What escrow requirements do you have?
How long is your loan lock-in period?
How long will the loan approval process take?
How long will it take to close?
Are there any penalties for prepaying the loan?
If you need to talk to a Lender, Brian Levitan from Midwest Equity Financial Services can help. His Direct Line: 630-649-2150 or Email: irefiem@ameritech.net
What are the differant types of mortgages availaible?
Are any of your rates, terms, fees, and closing costs negotiable?
Will I have to buy private mortgage insurance?
If so how much will it cost and how long will it be required?
Who will service the loan?
Your bank or another company?
What escrow requirements do you have?
How long is your loan lock-in period?
How long will the loan approval process take?
How long will it take to close?
Are there any penalties for prepaying the loan?
If you need to talk to a Lender, Brian Levitan from Midwest Equity Financial Services can help. His Direct Line: 630-649-2150 or Email: irefiem@ameritech.net
Rules for Buying, Selling in Uncertain Markets
There's no way to predict with accuracy whether home prices will rise or fall in over the next year. But there are some general rules you can follow to make sure that your housing decisions are smart ones. BusinessWeek magazine analyzed the behavior of buyers and sellers in the current housing market and recommends a few ways to traverse the rapids.
Before buying or selling, assess what houses are really worth in the area.
Don’t be foolishly loss averse. Some people who bought high and are seeking to avoid selling low gamble recklessly that the market will rebound and bail them out, but dallying often worsens the problem. The solution: Cut your asking price and make the sale.
It's human nature to think you know what you're doing. Reality, however, is often unkind. Whether you're a buyer or a seller, make a plan that accounts for worst-case scenarios.
Sellers' thinking tends to be six months behind the market. So when prices are rising, they set theirs too low, and when prices are falling, they set theirs too high. So assess where the market is headed, not where it was.
If you need help, please do not hesitate to call me.
David Rigney
847.732.7436
david.rigney@remax.net
Before buying or selling, assess what houses are really worth in the area.
Don’t be foolishly loss averse. Some people who bought high and are seeking to avoid selling low gamble recklessly that the market will rebound and bail them out, but dallying often worsens the problem. The solution: Cut your asking price and make the sale.
It's human nature to think you know what you're doing. Reality, however, is often unkind. Whether you're a buyer or a seller, make a plan that accounts for worst-case scenarios.
Sellers' thinking tends to be six months behind the market. So when prices are rising, they set theirs too low, and when prices are falling, they set theirs too high. So assess where the market is headed, not where it was.
If you need help, please do not hesitate to call me.
David Rigney
847.732.7436
david.rigney@remax.net
Monday, April 03, 2006
Home Sellers: Overpricing Was Biggest Mistake They Made When Listing Homes
Overpricing is the number one mistake home sellers said they made when listing their homes, according to a new national e-mail survey conducted by HouseHunt, Inc. The margin was nearly three-to-one over the second choice.
Survey respondents said their next biggest mistake was “dealing with the same real estate agent who represented the buyer,” thereby setting up a possible conflict of interest and possibly a perception that the buyer was getting a better deal.
Third biggest mistake was “failure to disclose known defects or problems.”
Virtually tied for fourth place were: “under pricing their properties” and “not utilizing Internet technology or a Realtor to market their properties.” “With the rapid price appreciation we’ve seen in many housing markets across the country, it’s not surprising that home seller expectations sometimes outran market reality,” said Michael Bearden, president and CEO of HouseHunt, Inc.
It is surprise over the negative response to agents representing both the buyer and the seller: “Usually it boils down to good communication with the consumer. The agent who communicates effectively and stays in touch throughout the transaction usually has a positive experience with both the buyer and the seller.
Please, let me know if I can help - rigneyrealty@comcast.net
or 1-800-731-1162 ext.0
Thanks, Dave
Survey respondents said their next biggest mistake was “dealing with the same real estate agent who represented the buyer,” thereby setting up a possible conflict of interest and possibly a perception that the buyer was getting a better deal.
Third biggest mistake was “failure to disclose known defects or problems.”
Virtually tied for fourth place were: “under pricing their properties” and “not utilizing Internet technology or a Realtor to market their properties.” “With the rapid price appreciation we’ve seen in many housing markets across the country, it’s not surprising that home seller expectations sometimes outran market reality,” said Michael Bearden, president and CEO of HouseHunt, Inc.
It is surprise over the negative response to agents representing both the buyer and the seller: “Usually it boils down to good communication with the consumer. The agent who communicates effectively and stays in touch throughout the transaction usually has a positive experience with both the buyer and the seller.
Please, let me know if I can help - rigneyrealty@comcast.net
or 1-800-731-1162 ext.0
Thanks, Dave
Movement for Mandated CO Detectors
Massachusetts has become the latest state after Vermont and Connecticut to require carbon monoxide detectors in homes. The trend is expected to spread to all 50 states, says Doug Troutman, government relations counsel for the National Electrical Manufacturers Association.
Although the movement to require detectors began about five years ago, it really didn’t gain momentum until the last three years. Currently, nine states require carbon monoxide detectors in all homes, and a number of others, such as Connecticut, require carbon monoxide detection equipment in newly constructed single-family homes and in multifamily units.“We’re beginning to see an increasing number of states and municipalities introducing similar legislation,” says Debbie Hanson, director of External Affairs for First Alert, a manufacturer of detection equipment.
The Massachusetts law is named in memory of a 7-year-old girl who died in January 2005 as a result of carbon monoxide buildup that occurred when snow drifts blocked the heating vent in her house. In Massachusetts alone, there are 3,000 reported cases of carbon monoxide poisoning each year, and the U.S. Centers for Disease Control and Prevention says carbon monoxide gas kills more than 500 people in the country annually.The Massachusetts Association of REALTORS® was very much in support of the measure, although they wanted to ensure that compliance wouldn’t place an undue burden on home owners.
Although, Smoke Detectors and Carbon Monoxide Detectors Both Save Lives.
Did you check your Batteries for both detectors when you turned your clocks ahead??
Although the movement to require detectors began about five years ago, it really didn’t gain momentum until the last three years. Currently, nine states require carbon monoxide detectors in all homes, and a number of others, such as Connecticut, require carbon monoxide detection equipment in newly constructed single-family homes and in multifamily units.“We’re beginning to see an increasing number of states and municipalities introducing similar legislation,” says Debbie Hanson, director of External Affairs for First Alert, a manufacturer of detection equipment.
The Massachusetts law is named in memory of a 7-year-old girl who died in January 2005 as a result of carbon monoxide buildup that occurred when snow drifts blocked the heating vent in her house. In Massachusetts alone, there are 3,000 reported cases of carbon monoxide poisoning each year, and the U.S. Centers for Disease Control and Prevention says carbon monoxide gas kills more than 500 people in the country annually.The Massachusetts Association of REALTORS® was very much in support of the measure, although they wanted to ensure that compliance wouldn’t place an undue burden on home owners.
Although, Smoke Detectors and Carbon Monoxide Detectors Both Save Lives.
Did you check your Batteries for both detectors when you turned your clocks ahead??
Fair Housing Month: NAR Showcases Action
In recognition of April as Fair Housing Month, the NATIONAL ASSOCIATION OF REALTORS® is promoting activities, courses and initiatives for its 1.2 million members that inform real estate professionals about requirements, rights, and responsibilities under fair housing laws.
These programs help REALTORS® receive the latest training and in-depth knowledge necessary to better serve families at all income levels get into homes. As champions of homeownership, NAR undertakes a major mission of educating its members by offering a comprehensive training program on diversity, an orientation program on fair housing laws and regulations, and a grant program that works to extend the benefits of homeownership to more Americans. As representatives of both buyers and sellers, Realtors® hold the key to promoting inclusive, diverse communities,said 2006 NAR President Thomas M. Stevens, senior vice president of NRT Inc., from Vienna, Va.
Fair housing is fundamental, and this program is effective and beneficial for Realtors. NAR has developed an award-winning program called At Home with Diversity. Since 1999, more than 18,000 REALTORS® and association executives have completed the program which aims to train real estate professionals to work effectively with diversity in today market.
NAR encourages ongoing education by waiving the course fee for sponsors of the At Home with Diversity program during the month of April. More than 30 courses are being offered throughout the month in 11 states.
NAR also provides financial resources to local and state REALTOR® associations for programs and activities that seek to increase an understanding of diversity within the association, among its members and as leaders in building strong communities. Local and state associations can qualify for a grant of up to $3,000.NAR provides its members the tools necessary to be informed of pertinent laws. One resource is a fair housing orientation program interactive DVD or VHS which focuses on timely topics, introduces viewers to fair housing laws and presents situations where fair housingadditionalns cadditionalr.
For additional info. please Email me: rigneyrealty@comcast.net
-- NAR
These programs help REALTORS® receive the latest training and in-depth knowledge necessary to better serve families at all income levels get into homes. As champions of homeownership, NAR undertakes a major mission of educating its members by offering a comprehensive training program on diversity, an orientation program on fair housing laws and regulations, and a grant program that works to extend the benefits of homeownership to more Americans. As representatives of both buyers and sellers, Realtors® hold the key to promoting inclusive, diverse communities,said 2006 NAR President Thomas M. Stevens, senior vice president of NRT Inc., from Vienna, Va.
Fair housing is fundamental, and this program is effective and beneficial for Realtors. NAR has developed an award-winning program called At Home with Diversity. Since 1999, more than 18,000 REALTORS® and association executives have completed the program which aims to train real estate professionals to work effectively with diversity in today market.
NAR encourages ongoing education by waiving the course fee for sponsors of the At Home with Diversity program during the month of April. More than 30 courses are being offered throughout the month in 11 states.
NAR also provides financial resources to local and state REALTOR® associations for programs and activities that seek to increase an understanding of diversity within the association, among its members and as leaders in building strong communities. Local and state associations can qualify for a grant of up to $3,000.NAR provides its members the tools necessary to be informed of pertinent laws. One resource is a fair housing orientation program interactive DVD or VHS which focuses on timely topics, introduces viewers to fair housing laws and presents situations where fair housingadditionalns cadditionalr.
For additional info. please Email me: rigneyrealty@comcast.net
-- NAR
Sunday, April 02, 2006
POST-CONTRACT PITFALLS WHEN SELLING YOUR HOME
Selling a home is like climbing Mount Everest – getting a signed contract is a great accomplishment, but that's only half the journey. The typical home sale today involves more than 20 steps after the initial contract is accepted to complete the transaction. Much of what needs to be done before the closing is the responsibility of appraisers, loan processors, attorneys, and inspectors — the REALTOR®'s role is to coordinate those responsibilities, helping to ensure that others do their jobs promptly and correctly and that the closing isn't jeopardized. Many steps between contract ratification and closing involve the cooperation of both buyer and seller, and attentive REALTORS® on both sides of the transaction will troubleshoot and keep everyone on track.
Time Estimates for Delays:
When things go wrong, closing can easily fall behind. Here's how much time to expect on particular delays:
One-Week Delays
Buyer submits incorrect information to lender.
Source of downpayment changes.
Escrow fails to notify parties about missing documents.
Principals leave town without signing all necessary papers.
Unknown defects are discovered in the property.
Last-minute liens discovered.
Cloud on title.
Move-out date changes.
Two-Week Delays
Lender decides at the last minute it doesn't approve of the borrower or the property.
Lender raises interest rates.
Lender requires last minute reappraisal or repairs.
Appraisal too low.
REALTORS® have extensive experience in handling problems that may arise during the time between contract and closing; they can anticipate difficulties and address them in time to ensure a smooth settlement for all involved.
Time Estimates for Delays:
When things go wrong, closing can easily fall behind. Here's how much time to expect on particular delays:
One-Week Delays
Buyer submits incorrect information to lender.
Source of downpayment changes.
Escrow fails to notify parties about missing documents.
Principals leave town without signing all necessary papers.
Unknown defects are discovered in the property.
Last-minute liens discovered.
Cloud on title.
Move-out date changes.
Two-Week Delays
Lender decides at the last minute it doesn't approve of the borrower or the property.
Lender raises interest rates.
Lender requires last minute reappraisal or repairs.
Appraisal too low.
REALTORS® have extensive experience in handling problems that may arise during the time between contract and closing; they can anticipate difficulties and address them in time to ensure a smooth settlement for all involved.