Joe Knows Mortgages

Let’s say someone is currently looking at a $200,000 property. If they put 20% down and if interest rates are currently at 4.5%*, their principle and interest payment would be $810.70

If that same borrower told you that they were going to wait for prices to fall further, we know that interest rates have to go up, and even if the market slips another 10%, and rates go to 5.5% (still very low), your new payment would still be $817.62.

If rates go to 6.5% (which they did back in late 2008) then the payment would increase to $910.18 per month. The borrower would be paying $36,000 more for that house over the life of the loan verses what they would pay at 4.5%.

Since rates are at the lowest point ever, and we know that they have to go up, assuming that rates will rise, it may not make mathematical since to wait.

*please note that this is not an advertisement of interest rate. This is for comparison purposes only.

The deadline for “tax credit” homebuyers waiting to close on June 30 has been extended to September 30. Not only is the extension great news, but interest rates have fallen over .375-.50% since the end of April according to Freddie Mac.

This could effectively reduce a buyer’s monthly payment over $600-800 a year on a $200,000 30-year fixed rate loan!

Unfortunately, for the estimated 180,000 homebuyers this extension impacts, their closing was held up by the lender. Some of the reasons may well be legitimate and some unfortunately may not be.

If you know someone who has had difficulty getting a loan closed, call me. Don’t miss this chance to help someone qualify for a tax credit! Just because someone has been unable to get a loan closed so far does not mean that it may not be able to close. What’s more, we closed a lot of loans in May and June for people who submitted their application after the Tax Credit’s April 30th contract deadline.

I’ll review anyone’s situation free of charge and offer my opinion on what I would do were I in that position. Act quickly though so we can address their situation before it’s too late. Contact me today!

It’s important to note that the Homebuyer’s Tax Credit extension only applies to people who were under contract by the initial April 30th deadline. Homebuyers who entered into contracts after April 30th remain ineligible for the tax credit.

The Fourth of July holiday weekend is upon us. Please have a great holiday and be safe while Boating, BBQ’ing, and driving.

The Homebuyer Tax Credit Closing Deadline Finally Extended. While Obama still has to sign this into law, which he is expected to do, those who wrote contracts prior to April 30th, 2010 will have until September 30, 2010 to close on their home purchases and still be eligible for the Tax Credit.

Rates are still at historic lows. If you know of anyone who is thinking about refinancing their current homes, or taking advantage of the combination of low rates and low prices by buying a home, please tell them to give me a call. THank you and have a great holiday weekend!

Brevard County Mortgage and Brevard County Real Estate Market Data For February 2010

It is a great time to be involved in the Real Estate industry; home prices are great, interest rates are at historic lows, and there are still government incentives to purchase a home.  The government incentives are set to expire, and you will need an executed contract by the end of April to take advantage of the tax credit.  There is still time to get in on this once in a lifetime deal, so do not delay, act now!          

 The trend of lower price listings selling continues into February.  With almost 80% of the transactions in Brevard County under $200,000, there seem to be great deals out there, with buyers purchasing value.  These low prices are allowing those who were not able to purchase what they where looking for a few years ago, to get into the right home at the right price now. 

While 50% of homes are still being financed, this February 2010 we had 254 cash Transaction which accounted for 49% of the market.  With almost 50% of all homes in Brevard county being purchased with cash, following January’s trend, it appears as though Cash is still ruling the market.  This is a sign that people see no better place for their money than in real estate.  This is a true signal that we are at or near the bottom. 

While we have almost returned to a “normal” market, it has been shown that homes are selling.  If the home is priced right, it will sell in a reasonable amount of time.  New listings that are aggressively priced are quickly sniffed out by those looking to buy, and usually have offers in on them in a short amount of time.  If you find a home that you love, and it is priced right, then you have to act fast.  With interest rates as low as they are, government incentives still on the table, and homes aggressively priced – It is a great time to be a buyer.  If I can help you discover your purchasing power, or take a look at your financing options, please contact me today!

 Brevard County Mortgage and Real Estate Market Data For January 2010 

       Welcome to the first market data report for Brevard County Real Estate of 2010.  While 2009 turned out to be a good year for both the reduction in inventory, and sales of existing inventory, it also proved to be the year of lending changes, and bottoming out prices.  With 2009 in the distant past, we now get our first glimpse into the new decade for 2010. 

        Not too surprising, the vast majority of sales were under $200,000 with 76% of all residential transaction selling between $0 and $199,999.  This trend has been consistent over the past year as the first time homebuyers are greatly incentivized to come in and purchase.  However, we did see an increase in the average price sold of homes to $160,079 in January 2010 versus $148,474 in January 2009.  This data could be telling us that we have hit bottom, and are going up. 

        The biggest surprise for January is the sheer number of cash transactions that are taking place.  This January 2010 we had 252 cash Transaction which accounted for 52% of the market.  Again, Real Estate has historically been a decent investment, and with so few places to put your money right now, buyers are choosing to use their cash instead of financing.  When the cash on the sidelines starts coming into the game at this pace, that is a sign that we have hit bottom. 

        Whether or not the Brevard County market has hit its bottom or not, one thing is certain: it is an outstanding time to buy real estate.  If you are a first time homebuyer, the government is still offering the $8000 tax credit, however, there is an end date, so you better act soon to find your home and claim your government incentive.  Also, we know that the federal government will stop their Mortgage Backed Security purchase program which will almost instantly add to the increase of interest rates.  So, if you are on the fence, or if you know someone who is thinking about buying, now is the time to act.  If you have any questions, please contact me.

Let me make a statement, and I hope you truly digest what I am about to say: the interest rates on mortgages here in Brevard County, Florida are about 1/8% off of their lowest levels in history.  That means that if you qualify for a mortgage, you could potentially get a better rate on your loan than just about anyone in history.  With interest rates and home prices as low as they are, and with the first time home buyer tax credit extended into 2010, people should be lining up to buy homes.  However, these rates have only one way to go, and we are headed there soon.

One of the biggest factors in our low rates right now is not the Fed’s decision to keep the overnight rate as low as it is, rather it is from their decision to continue to purchase mortgage backed securities in the many Billions of dollars per week.  When this purchase program ends, the demand for Mortgage Backed Securities will be less, therefore the price will decrease, and the yield (or interest rate) will increase. 

Another factor that is keeping rates low, has been the low threat of inflation.  While inflation is not happening right now, there are many concerns of inflation coming once the economy starts to improve.  We are already seeing signs of inflation as the Core CPI (Consumer Price Index) came in higher than expected, and a little higher than this time last year. It is inevitable that when you dump as much into the economy as we have, and when the cost of money is as low as it is that we will see inflation.  In inflationary times, bonds are not as attractive because they become devalued. 

So, with Inflation around the corner, and the Fed finishing their Mortgage Backed security purchasing program coming to an end in 2010, interest rates are going to increase.  The increase in interest rates will affect buyer’s purchasing power, as well as their cost of money.  I have said it before, and I will say it again: Now is the time to buy!  Rates are low, but rising; home prices are down, but will go up; sellers are generous, but they will be greedy.  Please take advantage of this opportunity, before it goes away. If you are currently renting, talk to a professional to see if you can buy; if you know someone who is renting, encourage them to see if they can buy.

Is the Market Changing?

Brevard County real estate sales continue to thrive.  New listings are down, sales are up, and interest rates are still at historically low levels.  With sales up almost 20% year over year, and inventory down about the same, it seems as though the market is moving at a fairly decent pace.  So ask the question: is the market changing?

Sales continue to show strong numbers, and inventory is decreasing.  With 79% of the sales being under $200,000, buyers are still looking for the bargains.  These “bargains” are going fast, as 37% of September sales sold in less than 30 days.  That means that if the price is right, the house will sell, fast!  I do not think we are in a sellers market, however, in the lower price points, it is starting to feel that way.

With 60% of homes being financed in the Brevard County area, buyers are still taking advantage of the historically low interest rates.  With the majority of the financing being done through FHA and VA loans, many are enjoying the benefits of these government insured and guaranteed loans.  With the $8000 First time Home Buyers credit still being offered, first time homebuyers are rushing to the market to find their dream home, however, the deadline is fast approaching.

All in all September’s Brevard County mortgage and market data proved to be in line with the theme that the market is improving and changing.  Sales are up, inventory is down, rates are still low, and with incentives to purchase for first time homebuyers, it is an amazing time to purchase real estate!  So, make sure that you speak with a mortgage professional to get an idea of you purchasing power and financing options, and then go out there and get yourself a deal before the market has “changed”!

First Time Homebuyers…The Clock is ticking…

Uncle Sam wants you to buy a house!  If you are a first time homebuyer, he is even willing to give you an $8000 tax credit to do so.  Time is ticking away…this deal only lasts through November of 2009.  With rates still low, many properties to choose from that are aggressively priced, it really is the time to take advantage of the deals and get $8000 from Uncle Sam.

As I have outlined before, the program is simple, however, if you have any questions, you may want to check with your accountant or CPA.  You can also check on the IRS’s website.  However, here is an outline of the program:

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  • Must be first time homebuyer – That means you haven’t owned a home in the past three years, and your spouse hasn’t either if you’re married.

  • Purchase home before December 1^st 2009

     

  •  File an amended return on your 2008 tax return, or wait to file on your 2009 tax return

     

  •  The credit is for 10% of the purchase price, up to $8000

     

  •  The credit amount starts phasing out if you make more than $75,000 or $150,000 if you’re filing a joint return.

     

  •  Enjoy the benefit of an $8000 tax credit

     

Again, with interest rates at historic lows, homes being aggressively priced, and an $8000 tax credit, now is an outstanding time to be a first time homebuyer!  But don’t forget, this offer does have an expiration date.  To be eligible for this money, you must purchase before December of this year.  So call a Mortgage Professional, get pre-approved, and go out there and find your dream home!

Another Great month For Brevard County Real Estate!

Here is a powerful and positive little fact: sales for single family residences for Brevard County are up over 22% for July of 2009 verses July of 2008.  That is an astounding year over year number.  Additionally, new listings are down slightly over 20% this July verses last July.  So, it looks like sales are up and inventory is down; this is a strong sign that the market is improving, and we are bottomed out.  If we continue on this track, this current real estate “sale” could end.

There are no real surprises in the market data from July against that of June.  Sales continue to show strong numbers, and inventory is decreasing.  With 78% of the sales being under $200,000, buyers are really looking for the bargains.  One thing that we have found is that these “bargins” are going fast, as 36% of July sales sold in less than 30 days.  That means that if the price was right, the house sold fast!

With 66% of homes being financed in the Brevard County area, buyers are still taking advantage of the historically low interest rates.  With the majority of the financing being done through FHA and VA loans, many are enjoying the benefits of these government insured and guaranteed loans.  With the $8000 First time Home Buyers credit still being offered, first time homebuyers are rushing to the market to find their dream home.

All in all July’s Brevard County mortgage and market data proved to be in line with the theme that the market is improving.  Sales are up, inventory is down, rates are still low, and with incentives to purchase for first time homebuyers, it is an amazing time to be purchasing real estate!  So, make sure that you speak with a mortgage professional to get an idea of you purchasing power and financing options, and then go out there and get yourself a deal before the “sale” is over!

The FHA insured loan is a great loan option for many borrowers as it gives home owners a very low down payment option, allows features that conventional loans do not (a conventional loan is any loan that is not a government loan), and has historically very low interest rates.  Currently the FHA will allow a loan amount up to $291,250 for a single family residence in Brevard County, Fl.  Right now this limit is good through the calendar year 2009, however, there is talks of extending the limits into 2010.

Just to recap, here is a list of some features of the FHA loan:

Source of Down Payment Flexibility  - Your required down payment can come as a gift from many different sources, as well as approved community assistance programs.

Great Rates and Low Monthly Mortgage Insurance  - While the rates change on a regular basis, they are currently very low, and do not much differ from conventional financing.  Depending on credit score, FHA rates could actually be lower than conventional financing.

Low Down payment option – Minimum of 3.5% down payment

Seller Paid Closing costs - seller can pay up to 6% of the purchase price towards closing costs and prepaids to help you purchase the home with very little out of pocket expenses.

No penalty for lower credit scores - you are not penalized in the rate for having a lower qualifying score, however, your credit score must be over 620 as most lenders have set that as the minimum allowable score.

Rehabilitation loan option - there is even an FHA loan that will allow you to finance repair or updating into the loan.

The FHA insured loan remains a great option for so many different situations, however,it may not be right for every borrower.  This is why it is imperative to contact a mortgage professional to help you find the product that best fits your situation.  Please feel free to contact me anytime with questions.