In 2008 the Congress, Fannie Mae and Freddie Mac put in place new sets of rules that affect home buyers and timelines for closing a home purchase. Buyers and sellers need to be aware of the provisions in these rules, so they can expect what will now be a reasonable time line and charging of fees. The goal of the efforts is to "provide a more transparent, level and fair regulation of the real estate industry; to add additional steps to help prevent deceptive lending practices; and to protect consumers by making them more informed--and therefore more confident--in their home financing choices."
HERA amends the Truth In Lending Act setting early and final receipt of the Truth In Lending disclosure part of the timeline for closing. It requires a 7 day review of initial mortgage disclosures before closing. Lenders must also provide a final Truth In Lending Disclosure to the homebuyer if the Annual Percentage Rate (APR) increases by more <0.125% at least 3 days prior to closing. Floating the interest rate on a loan can change the APR, so loan rate locks will be needed 10 days prior to closing. If this document is mailed by USPS, it is deemed received in three mail days (Mon-Sat). HERA also modifies when certain fees can be charged to homebuyers. The credit report fee may be collected by the lender up at first meeting. The appraisal fee may only be collected after the initial loan disclosures are received by the homebuyer. HERA is effective tomorrow, June 30, 2009.
HOEPA is the Home Ownership and Equity Protection Act.
HVCC is the Home Valuation Code of Conduct designed by Fannie Mae and Freddie Mac to shield appraisers from undue influence and require buyers get a copy of their appraisal no less than 3 days prior to closing the loan for the new home. A lender must now request the appraiser from an appraiser clearing house, cutting out direct communication between the lender and the appraiser. This middle man raises the cost of the appraisal, often increases the amount of time it takes for the appraisal to be completed, and makes it very difficult to question the appraiser's valuation. Further, either for quality control checks or if an appraisal is questioned, a second appraisal must be ordered. (This costs the homebuyer an additional appraisal fee.) The homebuyer must be provided with a copy of the appraisal at least 3 business days (Mon-Fri) prior to closing. HVCC went into effect May 1, 2009.
All together, the quickest a home purchase using a loan can close is 7 business days after having an accepted, executed offer. For most home purchases the appraisal fees will be more expensive and a standard closing will take a little longer--from a whole month to two months. (Remember FHA and VA loans close at the end of the month.)
Monday, June 29, 2009
Wednesday, June 17, 2009
Habitat for Humanity-Affordable Housing Option
Denver's need for affordable housing is as real as the need is elsewhere around the world. Studies show that affordable housing helps break some of the cycles of poverty. Children who grow up in homes owned by their parents do better in school, their families are more involved in the community and in the democratic process. These children are more likely to get better jobs, become homeowners, and stay off welfare when they grow up. Yet, it takes 2.5 minimum wage jobs ($38,000/year) for a family to afford the average rent in Denver! Section 8 rentals are one lower cost option for some families. So are some of the buyer assistance programs I've written about in earlier blogs. Still, for families earning less than $31,000 annually, more than 21,000 affordable units are needed for people who currently live in substandard housing. Imagine working 2.5 jobs and still having to live in substandard housing. When 33% or more of you income goes to lodging, there's not much left over for food and other living expenses. Since 1976 when Millard Fuller started Habitat for Humanity, there has been a growing force for giving hard working families a safe place to sleep and live. Habitat is addressing this need directly in 30 Colorado cities today. Around the world a new Habitat for Humanity home is completed every 21 minutes! Each home is soundly built with local supplies and in local styles.
Habitat for Humanity is very active in the Denver Metro area. Last Wednesday I was able to help with a day of labor on one of the local projects. This one is a modest duplex. The materials and labor for this home are all donated. It's not a "give away" however. After a rigorous selection process, the homeowners invest between $1200 and $1500 downpayment on the home. They then put in between 250 and 500 hours of labor in building their new home. They also take classes in home maintenance and agree to volunteer on other projects later. Once the home is complete, the family will be able to move in with a low interest mortgage that is set at 25% of their gross monthly income. Crews of volunteers from churches, businesses, and civic organizations are coordinated by local Habitat for Humanity coordinators. VistaCorps members direct and teach the volunteers who descend on the work site each day, putting them to task on whatever needs to be completed next. Licensed trades people do the technical work (plumbing, electrical, etc.). Quality building materials and standards are used throughout the building, so the end product is a safe, sound, energy efficient home. Green building products and methods are used in the home and during the building process. But, more on that later.
If you're interested in doing something about affordable housing and working with people who are dedicated to helping others help themselves, consider volunteering for Habitat for Humanity. I'm glad I did.
If you don't care to hammer, saw, and paint, perhaps you could donate furniture, old or unused building materials after a home project, or time to the local Habitat Outlet Store. Of course money donations are also accepted. If you care to make more quality housing affordable, Habitat will put to good use whatever you can give: time, talent, materials, or money.
Habitat for Humanity is very active in the Denver Metro area. Last Wednesday I was able to help with a day of labor on one of the local projects. This one is a modest duplex. The materials and labor for this home are all donated. It's not a "give away" however. After a rigorous selection process, the homeowners invest between $1200 and $1500 downpayment on the home. They then put in between 250 and 500 hours of labor in building their new home. They also take classes in home maintenance and agree to volunteer on other projects later. Once the home is complete, the family will be able to move in with a low interest mortgage that is set at 25% of their gross monthly income. Crews of volunteers from churches, businesses, and civic organizations are coordinated by local Habitat for Humanity coordinators. VistaCorps members direct and teach the volunteers who descend on the work site each day, putting them to task on whatever needs to be completed next. Licensed trades people do the technical work (plumbing, electrical, etc.). Quality building materials and standards are used throughout the building, so the end product is a safe, sound, energy efficient home. Green building products and methods are used in the home and during the building process. But, more on that later.
If you're interested in doing something about affordable housing and working with people who are dedicated to helping others help themselves, consider volunteering for Habitat for Humanity. I'm glad I did.
If you don't care to hammer, saw, and paint, perhaps you could donate furniture, old or unused building materials after a home project, or time to the local Habitat Outlet Store. Of course money donations are also accepted. If you care to make more quality housing affordable, Habitat will put to good use whatever you can give: time, talent, materials, or money.
Monday, June 8, 2009
MONTHLY MLS UPDATE
Good news in May 2009 for home and condo sellers around the Denver Metro area: 1 in 6 homes sold. Of the 20,734 active properties (single family homes and condos), last month 3,623 sold. Equally positive, we're seeing the expected seasonal increase in number of homes for sale and activity. This means overall we have an active and balanced market. The number of sellers and buyers is smaller by about 20% from this time last year. The average days on the market is 104 days, up a bit from this time last year. Even though May 2009's average sales price is up 4% from April 2009's average sales price, prices this year are down about 5% compared to prices last year in May 2008. Home sellers are still needing to compete in the beauty contest and price war to be chosen by today's buyers. Homebuyers are finding loans requirements more strick, fewer homes to choose from and stiff competition with investors for value-priced homes. Most of the changes are due to the number of foreclosed and short sale homes throughout the past couple of years. Hopefully, the number of foreslosed and short sale homes will continue to decrease as 2009 progresses, so our real estate sector of the economy can continue to recover. Since real estate is very local, much like our Colorado weather microclimates, contact me for the specifics in your neighborhood!
Saturday, June 6, 2009
Should You Buy Now or Wait? 7 Home Buying Points to Consider
Should you buy your first home now or wait? The decision's best made by exploring your personal answers to the following 7 financial and emotional questions:
*Are you pre-approved for a mortgage you can live with? Even though loan requirements are tougher than they were a couple of years ago, there is money available for people with good credit and not too much debt. If you don't know, ask your Realtor for a qualified mortgage lender, so you can determine whether or not you can afford a mortgage. Real estate loan rates vary, so you want a fixed mortgage you can live with for the long term. A good mortgage lender will go over all the costs of owning a home with you (mortgage, taxes, insurance, mortgage insurance, and possible HOA costs). Did you realize that 30% of the homes in the US are paid off and have no mortgage? Further, did you know that 96.7% of the home mortgages in the US are NOT in foreclosure? The current instability discussed in our news is about less than 5% of US homeowners.
*Do you have your down payment money saved? You will need about 3.5% of the purchase price for the lowest down payment loan out there, an FHA loan. That's $5250 for a $150,000 home. If you can put 20% down, you'll avoid mortgage insurance and save yourself that monthly expense. That's $30,000 on a $150,000 home.
*Are you ready to start building your own wealth rather than your landlord's? Over time real estate is less volatile than stocks. Using US Census data from 2005, a home worth $18,000 in 1963 was worth $226,933 in 2005 and if the homeowner didn't keep refinancing it past the normal 30 year mortgage term, it had been paid off for 8 years! Real estate has a better return than savings accounts, as you know. The Federal Reserve Board estimates that homeowners' net worth has ranged between 31 and 46 times more than that of renters in the years 1998 to 2007! The combination of increased home value over time and paying off your loan builds your wealth in the long run.
*Do you want a place to call your own? Do you want to choose your own colors and finishes? Have pets? Take pride in your home? Have a yard? Work on your projects? Have your own space?
*Do you want the $8000 tax credit? The US government is giving up to $8000 to first time homebuyers who close their transaction before December 1, 2009. Since the money can be claimed against your 2008 taxes this year as soon as you've closed, you can have that money this year! There are income limits, so check out the details.
*Do you want to pay more for a mortgage when the rates go up further? For the past few years mortagage interest rates have been kept artifically low. Just last week rates burbled up about 0.25% of a point. If bond prices continue to fall, the interest rates will rise. Right now interest rates are hovering near the 40-year lows.
*Do you want a bargain? Prices have softened all over. Homes are more affordable than at any time since NAR started tracking this number! While the supply has decreased a bit this quarter, there are still more homes to choose from than there are buyers in many segments of the market. Ask your Realtor for specific details in the neighborhoods where you want to live. Find out what is available in your price range.
So what are your answers to the 7 questions above? Is now your time to buy? Let me know what questions you have and how I can help you with this important decision.
*Are you pre-approved for a mortgage you can live with? Even though loan requirements are tougher than they were a couple of years ago, there is money available for people with good credit and not too much debt. If you don't know, ask your Realtor for a qualified mortgage lender, so you can determine whether or not you can afford a mortgage. Real estate loan rates vary, so you want a fixed mortgage you can live with for the long term. A good mortgage lender will go over all the costs of owning a home with you (mortgage, taxes, insurance, mortgage insurance, and possible HOA costs). Did you realize that 30% of the homes in the US are paid off and have no mortgage? Further, did you know that 96.7% of the home mortgages in the US are NOT in foreclosure? The current instability discussed in our news is about less than 5% of US homeowners.
*Do you have your down payment money saved? You will need about 3.5% of the purchase price for the lowest down payment loan out there, an FHA loan. That's $5250 for a $150,000 home. If you can put 20% down, you'll avoid mortgage insurance and save yourself that monthly expense. That's $30,000 on a $150,000 home.
*Are you ready to start building your own wealth rather than your landlord's? Over time real estate is less volatile than stocks. Using US Census data from 2005, a home worth $18,000 in 1963 was worth $226,933 in 2005 and if the homeowner didn't keep refinancing it past the normal 30 year mortgage term, it had been paid off for 8 years! Real estate has a better return than savings accounts, as you know. The Federal Reserve Board estimates that homeowners' net worth has ranged between 31 and 46 times more than that of renters in the years 1998 to 2007! The combination of increased home value over time and paying off your loan builds your wealth in the long run.
*Do you want a place to call your own? Do you want to choose your own colors and finishes? Have pets? Take pride in your home? Have a yard? Work on your projects? Have your own space?
*Do you want the $8000 tax credit? The US government is giving up to $8000 to first time homebuyers who close their transaction before December 1, 2009. Since the money can be claimed against your 2008 taxes this year as soon as you've closed, you can have that money this year! There are income limits, so check out the details.
*Do you want to pay more for a mortgage when the rates go up further? For the past few years mortagage interest rates have been kept artifically low. Just last week rates burbled up about 0.25% of a point. If bond prices continue to fall, the interest rates will rise. Right now interest rates are hovering near the 40-year lows.
*Do you want a bargain? Prices have softened all over. Homes are more affordable than at any time since NAR started tracking this number! While the supply has decreased a bit this quarter, there are still more homes to choose from than there are buyers in many segments of the market. Ask your Realtor for specific details in the neighborhoods where you want to live. Find out what is available in your price range.
So what are your answers to the 7 questions above? Is now your time to buy? Let me know what questions you have and how I can help you with this important decision.
Friday, June 5, 2009
WOHA! Tax credit available AFTER closing.
You're planning to use the $8000 tax credit for your home purchase. Just when can you get that money? I published earlier that Donovon wanted to make the first time home buyer tax credit available as funds for closing. No one has figured out how to do that. Here's the lastest from a lender I've worked with whose +20 years of experience in working with first time homebuyers makes her a very reliable source!
http://www.lendingahand.com/2009/05/tax-credit-for-down-payment/
In a nutshell, count on the money after closing and filing the amendment to your taxes.
http://www.lendingahand.com/2009/05/tax-credit-for-down-payment/
In a nutshell, count on the money after closing and filing the amendment to your taxes.
Wednesday, June 3, 2009
Job Hunting? Stand out from the crowd.
Can you relate? Every week, when I'm calling past clients and friends, I hear about another person who is un- or under-employed and looking for a new job. What makes it possible to stand out from the crowd that's job hunting?
Pat and Sandy Padbury, past clients of mine, have put their years of experience getting jobs for professionals into a format that today's job seekers can use to successfully get employment! Here's their information:
Reachmycoach.com Inc. was created for one reason:
Help people find employment!!
This “How to” Marketing Program was developed after Training and Coaching Headhunters, Executive Recruiters, Staffing and Consulting organizations throughout the United States for over 30 years. It is now available just for you; starting with a Confidential One Hour Telephone Session rewriting your Resume, developing a personal 10/13-second (Telephone & Email) presentation to employers and later sending you our Non-Aggressive Coaching Manual and Interviewing Program.
Before you begin, understand these techniques have been “field tested” with many Companies and individuals (Testimonials below). You must follow each and every STEP in order to increase your odds of success. This program or methodology cannot be “skipped, changed or modified.”
Stand out, don’t be like everyone else!!
TULSA, OKLAHOMA- Senior Operations, Production, Reservoir Engineer
“I really liked what you did and the format is excellent! Thank you very much! I did receive the “coaching” manual and the intro templates-very nice! Here we go!
I am very impressed with your system and approach! Good Job! Steve
KNOXVILLE, TENNESSEE-John F. Yu, President, Technical Staffing
“Your ideas are on the leading edge of technology for the industry and yet simple to implement. You allowed for individuality to prevail while creating an environment where your techniques can be successful for anyone who commits to embracing them.”
DENVER, COLORADO-David Perry, President, Momentum Resources, Inc.
"If you are seeking expert advice about what really works in our industry, from a nationally recognized specialist, don't delay in calling. I have found Reachmycoach to be through, knowledgeable and painfully honest."
DENVER, COLORADO-P. Heatherington, Manager, Oppenheimer Funds
“I consider you a wonderful leader! Hope you don’t mind, I told my students at the University of Denver about your interviewing strategy. If there is anything I can help you with, please don’t hesitate to let me know.”
Contact: (303) 922-9379 or ppadbury_1@msn.com - ask for Sandy
2008-2009
Pat and Sandy Padbury, past clients of mine, have put their years of experience getting jobs for professionals into a format that today's job seekers can use to successfully get employment! Here's their information:
Reachmycoach.com Inc. was created for one reason:
Help people find employment!!
This “How to” Marketing Program was developed after Training and Coaching Headhunters, Executive Recruiters, Staffing and Consulting organizations throughout the United States for over 30 years. It is now available just for you; starting with a Confidential One Hour Telephone Session rewriting your Resume, developing a personal 10/13-second (Telephone & Email) presentation to employers and later sending you our Non-Aggressive Coaching Manual and Interviewing Program.
Before you begin, understand these techniques have been “field tested” with many Companies and individuals (Testimonials below). You must follow each and every STEP in order to increase your odds of success. This program or methodology cannot be “skipped, changed or modified.”
Stand out, don’t be like everyone else!!
TULSA, OKLAHOMA- Senior Operations, Production, Reservoir Engineer
“I really liked what you did and the format is excellent! Thank you very much! I did receive the “coaching” manual and the intro templates-very nice! Here we go!
I am very impressed with your system and approach! Good Job! Steve
KNOXVILLE, TENNESSEE-John F. Yu, President, Technical Staffing
“Your ideas are on the leading edge of technology for the industry and yet simple to implement. You allowed for individuality to prevail while creating an environment where your techniques can be successful for anyone who commits to embracing them.”
DENVER, COLORADO-David Perry, President, Momentum Resources, Inc.
"If you are seeking expert advice about what really works in our industry, from a nationally recognized specialist, don't delay in calling. I have found Reachmycoach to be through, knowledgeable and painfully honest."
DENVER, COLORADO-P. Heatherington, Manager, Oppenheimer Funds
“I consider you a wonderful leader! Hope you don’t mind, I told my students at the University of Denver about your interviewing strategy. If there is anything I can help you with, please don’t hesitate to let me know.”
Contact: (303) 922-9379 or ppadbury_1@msn.com - ask for Sandy
2008-2009
Monday, June 1, 2009
Smart Homeowner Videos by David Bach
Want some advice from a real financial advisor with a proven track record. See and hear David Bach share tips on buying and selling homes. Let me know what YOU think!
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