Spring Has Sprung for the Real Estate & Mortgage Markets

Springtime is traditionally the busiest time of year for the housing market, and that makes the warm season an unusually reliable barometer of whether business will slow down or heat up for the remainder of the year. Coming out of winter hibernation, buyers take advantage of the nicer weather to browse and shop. Based on what they are willing to offer – and whether their purchase offers are backed by reliable financing – prices begin to find their range.

 

Heading into the 2009 season, Freddie Mac reports that fixed mortgage rates are at their lowest level since the agency began tracking interest rates way back in 1971. Meanwhile the “Affordability Index” compiled by the National Association of Realtors (NAR) – which gauges the overall affordability of typical American homes during any given economic environment – also broke its own record. The NAR index shows that homes are easier to purchase than they have been since the Affordability Index was created about four decades ago.

 

Standard & Poor’s/Case-Shiller index also shows that home prices are about 30 percent lower than they were when the market peaked in 2006. On the surface that may appear to be disappointing news. But what it indicates in a more fundamental sense is that much of the excessive, unsustainable, speculative inflation that created the toxic housing bubble has finally been wrung out of prices.

 

That’s good news for everyone, because with fair prices comes buyer and seller confidence – and the traction that the credit and housing markets have so desperately needed. The Commerce Department is also issuing positive news, saying that home sales for the month of March came in significantly higher than most economists had expected. The estimated number of new homes for sale now represents approximately 10.7 months of inventory, whereas the nation had 12.5 months of excess inventory back in January of this year. If things continue at that pace the inventory will essentially evaporate over the coming months and put a solid floor under the market.

 

Plus, mortgage rates for both purchases and refinances now average about a point below last springtime’s levels, and the Mortgage Bankers Association reports a record number of mortgage applications. To keep up with the surge in loan processing and underwriting, many lenders – including major players like Bank of America – have added staff and upgraded software. To ensure the smooth flow of credit, the Fed is also busy buying up about $1.5 trillion in mortgage-backed securities.

New home buyers can get an $8,000 tax break, don’t forget, and the IRS defines a “new” buyer in liberal terms as someone who has not owned a home within the past three years. All of these signs of spring point to a blossoming real estate and mortgage climate for 2009.

“Who pays for Title Insurance? Why is it different in other counties? “

Wouldn’t it be nice if everything in life came with a guarantee? Whatever you purchased would automatically be protected? Knowing what you bought, is exactly what you paid for? Purchasing a home is one of the biggest investments you will ever make, so you want to make sure that your investment is protected. Title Insurance is there to make sure your home is exactly what it is, YOUR HOME. Who pays for this reassurance?  Commonly you would think that the seller should pay for Title Insurance; the seller should guarantee that the investment the buyer is about to make is a good one and clear of any defects on the title. Hold on a second! “Caveat emptor” Latin for “Let the buyer beware!” Shouldn’t the buyer pay for Title Insurance to make sure what they are buying is free and clear of any defects, it’s their investment!

As you can see, everyone has a valid point when it comes to who should pay for Title Insurance and it is highly debated topic. It is customary in Palm Beach County, Florida that the Seller pays for the Title Insurance and in Broward County, Florida it is customary that the Buyer pays for Title Insurance. Don’t let this be a deal killer! These fees are always negiotiable and can be easily solved with communication between both Seller and Buyer. Just remember, whoever pays the Title Insurance will choose the Title Company.

United Title Agenices, Inc. is ready to serve any and all of your Real Estate transaction needs, we are located in Lake Worth, Fl and Boca Raton, Fl and close transactions all through out the state of Florida. If you should have any questions, please don’t hesitate to contact our office right away; we look forward to hearing from you.

Savanna Yates

“What is Title Insurance & do I need it?”

For most people buying real estate, one of the many questions asked is, “What is Title Insurance and do I really need it?” First, a mortgage company will often require a title policy for its own protection.  That policy protects only the lender and is called a mortgage policy. “Well, I don’t need it…I’m paying cash!” Your right, you don’t need one if you paying cash, but the real question should be is how could you afford not to have title insurance? Title insurance is there to protect the new homeowners from the many possibilities of loss due to title defects such as, claims, judgments, encumbrances, liens, falsification of records, forged deeds, illegal acts of trustees and many more. The cost of an owner’s title insurance policy is small when related to the value of the property. The higher valuation of the home, the more insurance you will need. Having a title insurance policy could end up saving you hundreds or even thousands of dollars, if a claim is made.

That is why here at United Title Agencies, Inc. your biggest investment is our number one priority. You can put your trust in United Title Agencies Inc. We provide personal service and exceptional quality. All of our services are guaranteed. We have been in business for over 30 years and it is our belief that your title company needs to go the extra mile: therefore, our closings are styled to fit our customer’s needs. Our unparalleled service, competitive prices, and overall value are why our loyal customers won’t go anywhere else. If you should have any questions, please don’t hesitate to contact our office right away; we look forward to hearing from you.

Real Estate Inspections for Home Buyers

One of the most critical parts of the buying process is the home inspection, because the inspector’s report will reveal things to the new homeowner than may not be visible to an untrained eye. As a result of the inspection the buyer will determine whether repairs are needed, for example, and how much to negotiate with the seller for the cost of those. An inspection that raises red flags can help the buyer avoid catastrophic problems, while an inspection that goes smoothly gives valuable reassurance, peace of mind, and confidence in the purchase decision.

The main inspection happens soon after an offer to purchase a house is made, and it is done by a licensed and certified professional who checks the house for structural integrity and examines the mechanical aspects of the home such as kitchen appliances and heating and air conditioning systems. This buyer-ordered inspection makes many buyers, especially those who have never purchased a home, a little bit apprehensive. That’s only natural, because it is like going to the dentist for a check-up and hoping that there are no cavities. But learning about the inspection process beforehand helps to give the buyer greater insight into the process and put those fears to rest.

Essentially, this building inspector’s responsibility is to check the house from top to bottom and then issue a comprehensive report. If possible, try to be present and accompany the inspector during the home inspection, because this is a great opportunity to ask questions and have things explained along the way. A good inspector can also give you tips on maintaining the house in optimal condition, which will make it much easier and cost effective once you move in and become the responsible homeowner. He or she might show you, for instance, how to change the filters in the air conditioning unit or point out simple ways to keep the foundation dry and the keep the house free from wood rot or termites.

After getting the final written report, ask any questions you have and then let your real estate broker convey the findings to the seller to work out arrangements to pay for needed repairs. Buyers may prefer to do the repairs themselves after closing on the house, and in that case they should ask the homeowner for a discount or repair allowance to cover the cost. Or they can insist that the repairs be done by the seller before closing.

If the items in the inspection report are minor – like leaking faucets or gutters that need to be cleaned – you may decide to do them yourself without asking for concessions from the seller, so that you do not run the risk of losing the home of your dreams by bickering over incidentals. Of course if they are serious issues like a roof that needs to be replaced or a faulty electrical system, these should be addressed immediately and resolved to your complete satisfaction.

Keep a copy of your inspection report because it can be a handy reference in terms of home maintenance oversight. The information it contains can also help you prioritize any potential home improvement projects or future upgrades, and to communicate with contractors about the characteristics of the home and its various systems and components.

New HECM Mortgages are a Boom for Baby Boomers

A new type of reverse mortgage was introduced at the end of last year as part of the Housing and Economic Recovery Act stimulus package. The product – called a Home Equity Conversion Mortgage (HECM) – expands the role of the traditional reverse mortgage and lets seniors now use one to purchase a home. With the largest percentage of the American population in history now entering retirement years while facing unprecedented economic challenges, the HECM is poised to propel reverse mortgages into the real estate limelight.

 

Many seniors have already begun to use HECM mortgages to buy a house or condo and then downsize out of their larger and less manageable homes. Those who switched out of homes with high levels of equity often realize a handsome cash profit, too, so that they walk away from the HECM purchase with a nest egg of readily available cash.

 

With a typical reverse mortgage, the role of lender and homeowner is reversed. The lender makes payments to the homeowner in exchange for a stake in the equity of the home. If the homeowner moves or sells, the reverse mortgage contract ends. But with the HECM version, the senior can move to a new home and buy it with the reverse mortgage, which makes this new product much more versatile and adaptable to today’s active senior demographic.

The HECM program is administered by the Federal Housing Administration (FHA) and those who qualify for it begin by making a larger than normal down payment. Make a 50 percent down payment on a $200,000 home at age 62, for example, and it becomes yours for life – for only $100,000. But a much older homeowner might only have to make a nominal down payment to enter into the same kind of arrangement. The older the homeowner is, the lower the interest rate on the HECM is, too – so it may be an irresistibly affordable option for older people who want to move into a new home.

A homeowner with a house that holds lots of equity, for example, can sell their home, use the proceeds as the down payment on their new HECM-purchased home, and pocket any extra money they make. They get a new house with no out of pocket expenses, instant access to cash that was tied up in their old home, and they never have to make a single mortgage payment again, for life.

The homeowner will never owe more that the actual value of their home, and if there is a loss of value the mortgage company suffers the loss, not the homeowner or the homeowner’s heirs. But if the value appreciates the homeowner or heir will be entitled to profits left after the loan is settled. Buyers need to be at least 62 years of age, and the property being purchased must be owner-occupied and used as their principal residence. The FHA administered HECM program finances homes worth up to $625,500.

For more information about FHA HECM reverse mortgages, contact the FHA or visit their Web site for details.