10 Tips for Surviving the Housing Downturn

CNBC, the business channel, has posted 10 tips for surviving the housing market and profiting from it in the meantime. This post on their website has a lot a useful advice and is well worth a read. I especially like the advice to those people wanting to move up; "Do it now!"  The price reduction on the new house probably exceeds that of your present home. You can actually benefit financially from the downturn. Read the entire post here: 

Federal Home Loan Bank offers Grants up to $7,500

First Time Buyers in Maryland can get a grant up to $7,500 from The Federal Home Loan Bank in Atlanta for the purchase of a primary residence. Certain conditions must be met:

• Applicants must complete home ownership counseling.
• Sellers can help with closing costs.
• The underlying mortgage will be a FHA or USDA loan.
•  Buyer must bring $500 or 20% of the grant amount, whichever is greater.  
• Buyer must agree to remain in residence for 5 years or partial recapture of the grant will apply.
• Family income cannot exceed 80% of the areas median income. ($82,200 in Baltimore County).

Only a limited number of lenders are offering the program and funds are limited. Call Bob McGee at Advance Realty Timonium at 410-560-4574 for info on qualifying income in other counties and the name of a participating lender or email me at bobmcgee2000@gmail.com.

Government Offers Attractive Financing on Foreclosed Homes

Fannie Mae, the giant mortgage lender that was taken over by the government last year, is awash with foreclosed property that it needs to liquidate. It has announced a new loan program for foreclosed homes that it owns that has some unique features:

1. Homes are listed at a price designed to result in a quick sale.
2. Many homes are in excellent condition and require little or no work.
3. Low down payment of 3%
4. Up to 3.5% closing cost help from Fannie Mae
5. No appraisal required.
6. No mortgage Insurance.
7. The contract price is negotiable.
8. The 3% down payment can come from a gift or grant.
9. Only $500 deposit money at contract.
10. Additional funds available for light renovation if needed.
11. Prospective owner occupants are given a 15 day “First Look” after the property is listed. 

 

Monitoring, Improving and Repairing your Credit for the Purpose of Obtaining a Home Mortgage

In the aftermath of the mortgage meltdown, the management of your credit profile is more important than ever.  The standards for the approval of all forms of credit have tightened necessitating that consumers pay close attention to their credit records and credit scores.

What is a Credit Score:  Sometime called a FICO score, this is a mathematical number that is computer generated that attempts to measure the degree of risk associated with your creditworthiness.  There are three competing credit reporting agencies and each has their own unique algorithm but the mechanics of each is very similar.

Big Mortgage Changes Coming in 2011.

For the past year or so, a series of policy and procedural changes have rocked the mortgage world as the banks and regulators attempt to avoid the lending mistakes of the past.

These changes have been incremental involving appraisal procedures, consumer disclosures, new underwriting rules and finally the Dodd-Frank Financial Reform Bill which affects how loans are originated.

Buying Distressed Property- A :How To" Primer

If there is an upside to the current housing mess, it has given some people the opportunity to buy foreclosed real estate at huge discounts. A recent report by Multiple List suggests that lots of people are looking to take taking advantage of this situation. As reported recently in the Baltimore Sun, thirty percent of all sales in Baltimore City were foreclosures.  While the Baltimore Region as a whole is much better off than say, Florida or Las Vegas, still about 18% of all regional sales are distressed property according to research firm CoreLogic.

Is housing a Luxury or a Staple?

This seems like a silly question. Shelter is widely regarded as one of life’s basic necessities along with food and clothing. But is it a luxury item or a staple commodity?  What’s the difference? Well, in terms of future housing prices there is a big difference.  Staples (bread, soap, and corn flakes), tend to rise in price along with inflation. But luxury goods, tend to be consumed in greater qualities, as people get wealthier....think cars, jewelry, travel, boats.   History suggests that people will consume more or better quality housing as their real income, adjusted for inflation, actually increases. A great deal of research has been done on this subject by Professor Robert Shiller (co-author of the widely quoted Case-Shiller Home Price index.) He finds positive evidence that as people earn more, they spend more on housing, without necessarily increasing their consumption of staples.