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Twitter streamBi-weekly mortgage payments reduce the term of the loan, reduce interest payments, and apply more to the principal loan balance. Bi-weekly payments are equivalent to making one extra mortgage payment per year because there are 26 bi-weekly periods in a year (13 monthly pmts). Taking advantage of an “extra” payment each year of a 30-year mortgage would reduce the term to 24.5 years. IF you do 1/12 of your TOTAL payment (PITI), then it really adds up!
Category Archives: New Home Buyer Programs
Austin Homes Sales Volume Down Due To Tax Credit; Price Continues to Slowly Rise
Austin Board of REALTORS® releases April 2011 real estate statistics
May 19, 2011 - According to the Multiple Listing Service (MLS) report released today by the Austin Board of REALTORS®, 1,690 single-family homes were sold in the Austin area in April 2011, 16 percent fewer than the same month of the prior year when the federal homebuyer tax credit expired. At the same time, the median price for Austin area homes was $196,400, three percent more than April 2010.
Judith Bundschuh, Chairman of the Austin Board of REALTORS®, commented on the report, “As has been the case for all of this year, comparisons of year-over-year sales volume are skewed due to last year’s homebuyer tax credits. That’s particularly true for this month, since the most expansive tax credit expired on April 30, 2010, creating a surge in demand that month.”
In April 2011, homes spent an average of 88 days on the market, 28 percent longer than April 2010, but the shortest “days on market” figure in the Austin area since September 2010.
Additionally in April 2011, new listings were down 25 percent, active listings were down 10 percent and pending sales were down 27 percent compared to April 2010.
Chairman Bundschuh continued, “Given that only 16 percent fewer homes were sold in April 2011 than April 2010 without the benefit of a tax credit and that prices for Austin area homes continue to rise, we’re encouraged at the health and strength of our market.”
The volume of leasing activity in the Austin area tapered off in April 2011 with 1,117 properties leased, three percent fewer than April 2010, while the median price for lease property was $1,250, six percent more than April 2010.
April 2011 Statistics
- 458,676,140 – Total dollar volume of single-family properties sold, 4% less than April 2010.
- 196,400– Median price for single-family homes,3% more than April 2010.
- 1,690– Single-family homes sold, 16% less than April 2010.
- 88– Days on market, 28% longer than April 2010.
- 3,330– New single-family home listings on the market, 25% less than April 2010.
- 9,679– Active single-family home listings on the market, 10% less than April 2010.
- 2,054– Pending sales for single-family homes, 27% less than April 2010.
While the home buyer tax credit opportunity ended last year for most Americans, it is still available for some members of the military and certain other federal employees serving abroad!
Low interest rates on VA and other loans, combined with these federal tax credits* for certain first-time home buyers and move-up buyers, make home buying an exceptional value right now. But, time is running out, because the credits, which can be worth up to $8,000, are only available on sales contracts signed by April 30, 2011 for purchases that will close by June 30, 2011.
Who is Eligible for these Tax Credits?
Members of the uniformed services, Foreign Service members, and intelligence community employees are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who served on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.
Two Types of Credit are Available
First-Time Home Buyer Tax Credit
· First-time home buyers are eligible for a credit of as much as 10% of the purchase price, up to a maximum of $8,000.
· First-time buyers are people, including both partners of a married couple, who have not owned a principal residence during the three years prior to purchase.
Long-Time Home Buyer Tax Credit
· Taxpayers who have owned a principal home for a period of five consecutive years during the past eight can qualify for a tax credit of as much as 10% of the purchase price, up to a maximum of $6,500, on a new principal residence.
· The new home does not have to cost more than the current dwelling.
Eligible military and federal personnel should act now to receive their tax credits.
Contracts must be finalized by April 30, 2011. | Purchases must close on or before June 30, 2011.
3rd Fastest-Growing City: Austin, Texas
Change in Population, 2000-2008: 32.2%
The capital of Texas, also known as the “live music capital of the world” for events such as the Austin City Limits annual music festival, Austin ranks as the third fastest growing city in the nation by population. Increasing in population by almost a third from 2000-2008, the city is home to a number of major corporations such as Dell (NasdaqGS: DELL – News) and Whole Foods (NasdaqGS: WFMI – News), and a recent deal inked with Facebook promises to bring even more attention to this up-and-coming city.
Austin Board of REALTORS® releases August 2010 real estate statistics
September 20, 2010 - According to the Multiple Listing Service (MLS) report released today by the
Austin Board of REALTORS®, the impact of the expired homebuyer tax credits is still being felt in the
Austin real estate market, yet the gap in year-over-year sales volume narrowed slightly compared to
last month.
The volume of Austin area home sales in August 2010 was 1,490, down 15 percent from the same
month in 2009. The median price for August 2010 was $200,000, up 5 percent from August 2009.
In addition, the number of days on market increased one percent to 77 days for August 2010 when
compared to August 2009.
“This continues to be a unique year in evaluating trends in the real estate market due to the impact of
the recently expired homebuyer tax credits,” said John Horton, Chairman of the Austin Board of
REALTORS®. “Though we’re down in sales volume by 15 percent compared to this month last year,
that gap is smaller than we experienced in July and year-to-date figures reveal that we’re generally
on pace with 2009 volumes.”
So far this year, 12,729 single-family homes have been sold in Austin, a two percent increase compared
to the same time period in 2009. In addition, the median price year-to-date was $195,000, up three
percent from 2009, and days on market decreased 11 percent from 2009 to 72 days.
Chairman Horton continued, “The most important thing I see in these results is that our year-to-date
sales volume shows steady demand and our real estate values are holding strong. That’s good news
as we head into the fall season.”
August 2010 Statistics
- $399,156,100 – Total dollar volume of single-family properties sold, a 7 percent decrease from August 2009.
- $200,000 – Median price for single-family homes, a 5 percent increase from August 2009.
- 1,490 – Single-family homes sold, a 15 percent decrease from August 2009.
- 77 – Days on market, a one percent increase from August 2009.
- 11,106 – Active single-family home listings on the market, a 16 percent increase from August 2009.
- 1,502 – Pending sales for single-family homes, a 24 percent decrease from August 2009.
Year-to-Date 2010 Statistics
- $3,235,222,181 – Total dollar volume of single-family properties sold, a seven percent increase from 2009.
- $195,000 – Median price for single-family homes, a three percent increase from 2009.
- 12,729 – Single-family homes sold, a two percent increase from 2009.
- 72 – Days on market, an 11 percent decrease from 2009.
- 10,602 – Active single-family home listings on the market, a 10 percent increase from 2009.
- 14,462 – Pending sales for single-family homes, a two percent decrease from 2009.
The Austin Board of REALTORS® is a non-profit, voluntary organization representing more than 8,000
licensed REALTORS® in Central Texas.
For more information, please contact Angela Brutsché at 512-454-7636.
REBOUND OR DOUBLE DIP? DOTZOUR’S 2011 FORECAST
COLLEGE STATION (Mays Business School) – As much of the nation ponders whether the country is in rebound mode or headed for a “double-dip” recession, Real Estate Center Chief Economist Dr. Mark Dotzour sees definite signs of hope for the economy.
“There are signals that the economy is trying to turn the corner,” Dotzour said. “Consumer confidence has increased from a year ago, and consumer spending has resumed its relentless upward trajectory.”
He says the most important positive indicator is that corporate profits have rebounded.
“In a free-market, capitalistic system like America, profit growth is the key indicator,” he said. “When profits are growing, companies hire employees. When profits flatten, they stop hiring. When profits fall, they start to fire people, and they keep on firing people until profits start to increase again. Clearly, most businesses have right-sized their firms sufficiently to regain profitability.”
So why aren’t they hiring people?
“The answer is uncertainty: uncertainty of capital gains and income tax rates; uncertainty about the cost of health care and the possible increase in energy costs due to ‘cap and trade.’ The prospect of new and increased government regulation makes it hard for business to see clearly into the future,” he contends.
Dotzour points out that businesses can buy insurance against risk, but there is only one way to “insure” against uncertainty–and that is to hoard cash.
“There is now nearly $3 trillion sitting in cash on business balance sheets,” he said. “They have much more capital then the Federal Reserve, the FDIC, Fannie Mae and Freddie Mac combined.”
To read more, visit the Mays Business School website.
REBOUND OR DOUBLE DIP? DOTZOUR’S 2011 FORECAST
COLLEGE STATION (Mays Business School) – As much of the nation ponders whether the country is in rebound mode or headed for a “double-dip” recession, Real Estate Center Chief Economist Dr. Mark Dotzour sees definite signs of hope for the economy.
“There are signals that the economy is trying to turn the corner,” Dotzour said. “Consumer confidence has increased from a year ago, and consumer spending has resumed its relentless upward trajectory.”
He says the most important positive indicator is that corporate profits have rebounded.
“In a free-market, capitalistic system like America, profit growth is the key indicator,” he said. “When profits are growing, companies hire employees. When profits flatten, they stop hiring. When profits fall, they start to fire people, and they keep on firing people until profits start to increase again. Clearly, most businesses have right-sized their firms sufficiently to regain profitability.”
So why aren’t they hiring people?
“The answer is uncertainty: uncertainty of capital gains and income tax rates; uncertainty about the cost of health care and the possible increase in energy costs due to ‘cap and trade.’ The prospect of new and increased government regulation makes it hard for business to see clearly into the future,” he contends.
Dotzour points out that businesses can buy insurance against risk, but there is only one way to “insure” against uncertainty–and that is to hoard cash.
“There is now nearly $3 trillion sitting in cash on business balance sheets,” he said. “They have much more capital then the Federal Reserve, the FDIC, Fannie Mae and Freddie Mac combined.”
To read more, visit the Mays Business School website.
From Application to Closing
Once you’ve submitted your mortgage application and received a decision, the steps leading up to your closing will be unfamiliar. We want you to know what to expect. Prior to closing on your new home, you’ll need an appraisal, a home inspection, home insurance and title insurance.
PreApproval
Upon application credit check, and submission of your supporting documentation, your lender will have discussed what you can qualify for and have a preliminary plan for financing. It is preliminary because you may find a home at a different price or the rates may change. Your lender will be ready to issue a Conditional Approval letter upon the location of a home on which you’d like to make an offer.
Finding A Home
At this point, you’ll go home searching based on our preliminary financing plan. Your Realtor may want basic information on the financing plan as the Purchase contract does require some of this info. Once you have a home you’ll provide the lender with a contract.
Your Option Period
Your contract will give you an Option Period to get additional information on the home and decide to continue with the purchase. This usually includes your inspections and time for the Realtors and Sellers to get you information such as the survey, restrictions, and other info.
Appraisal
Upon the completions of your Option Period and your decision to proceed with the purchase, the lender will order an appraisal from a professional appraiser to determine the value of your home. Most loan programs require an appraisal to make sure the sale of the property would provide enough funds to repay the mortgage balance. This protects the lender in case of default, and can also help you make sure you don’t overpay for the home. An appraiser will give a professional assessment of the property’s value based on a number of factors, including:
- Square footage, overall condition, special features and amenities
- Home improvements
- Property location
- A review of the sales prices of comparable properties that have sold recently in your area.
Home Inspection
A professional home inspection can help put your mind at ease by identifying any potential issues with the home. In some cases, a home inspection may be required as part of your loan approval process. A home inspector will give a professional assessment of the property’s physical condition and notify you of any existing or potential problems. At minimum, the inspection should cover all the home’s major systems and structural elements, including the foundation, electrical system, heating and cooling systems, insulation, roofing, plumbing and all exterior features.
You should make every effort to be present during the inspection, so you can see any problems first hand. Accompanying the inspector can make the inspection report easier to understand, and you may even get some valuable maintenance tips. Your Realtor can make suggestions on Inspectors.
Home Insurance
Home insurance will protect the investment you’ve made in your home. Your policy will compensate you for damage done to your home or its contents by natural hazards such as fire and wind and will protect you from liability if someone is injured on your property.
Before you close on your mortgage, you’ll be required to show proof that you have purchased home insurance. Your lender will probably require you to purchase a minimum amount of coverage, usually equal to your loan amount. You may, however, want to purchase a larger policy to make sure you’re protected from additional losses.
Title Insurance
There are two types of title insurance: one protects the lender and one protects the borrower.
Title insurance is purchase as protection from claims against your ownership of the property. Such claims may be made by undisclosed spouses, heirs of previous owners, creditors holding liens against previous owners or other parties.
Your lender will most likely require you to purchase a title policy, which will cover their interests in the property. It’s up to you to purchase a policy to protect your interest in the home. Your home mortgage consultant will be able to recommend a title insurance company who can provide additional information about the policies available in your area.
I found this and thought it might be good info.
What is title Insurance?
Title insurance is the application of insurance to hazards in real estate titles.
What is “Title”?
“Title” is the foundation of ownership of property. It means that you have a legal right to possess that property and to use it within the restrictions imposed by authorities or limitations on its use – superimposed on the basic right to possession by previous owners.
What is the difference between relying on an abstract and attorney’s opinion versus title insurance policy?
(a) An abstract is a compilation of written instruments affecting title to a property. An attorney’s opinion of ownership and state of title disclosed by the abstract. An abstract and attorney’s opinion do not disclose various defects in the title, such as fraud, forgery, defective deeds, incompetence of parties signing documents or clerical errors in the records. In fact, an abstract and attorney’s opinion may not uncover many of the title defects that can exist. Then, chance of recovery in the event of a title loss in this case depends entirely on the solvency of the attorney examining the title. The attorney’s liability is limited to errors and oversights that would not be made by a diligent attorney. The attorney is not liable for loss caused by hidden defects.
(b) A title insurance policy indemnifies the insured against monetary loss caused by defects in title not expected to in the policy.
Why should I protect the home I buy with title insurance?
Because without title insurance, you become a self-insurer. This is an inadvisable unless you are in a financial position to lose the money you have invested in your home without upsetting your financial condition in any way.
Are there different types of title insurance of title insurance policies?
There certainly are. First, there is the Owner’s Policy that the home purchaser needs for his or her protection. Then, there is the Mortgagee’s Policy, which protects only the mortgage/money lender. Most financial institutions lending mortgage money on a wide scale insist upon Mortgagee Title Policies for their protection.
If the lend is getting a title policy, why do I as an owner need one?
The lender’s policy protects the lender’s interest only and does not provide protection to the owner.
Is title insurance as important as fire insurance?
Yes because your losses without title insurance can be greater than fire losses. If a house burns, the land is still there to rebuild. If title to the property fails, you have nothing. That is why owner’s title insurance is always written to cover value of the house and lot.
How does title insurance help protect my home?
It places the assets of a corporation behind the title to your home. If attacked, the title will be defended without cost to you and if the title, or any part of it, should be defective, you will be reimbursed up to the face amount of your policy, for any financial loss incurred.
How much does the title insurance cost and how long am I protected?
For the protection provided, the cost is modes. Whie the rates are graduated in Texas, a $100,000 owner policy costs $1,023.00 or about 1% of the cost of the property. Unlike other insurance with annual premiums, title insurance premiums are paid one time and protect youas long as you and your heirs own the property.
Why won’t the seller’s title policy protect me?
Their policy only relates the title as of the date of the policy, in other words, their date of purchase of the home. Since that date, the insured could have conveyed the property or given rights to others in the property. Once the homeowner signs a Warranty Deed, the policy converts to a Warrantor’s Policy and follows the owner, not the property.
| What does a percent in rate cost you? | ||||||||||
| 30 Year Fixed Rate Mortgage | ||||||||||
| Mortgage Amt. | Interest Rates / Monthly Payment | |||||||||
| 5% | 6% | 7% | 8% | 9% | ||||||
| $100,000 | $536.82 | $599.55 | $665.30 | $733.76 | $804.62 | |||||
| $110,000 | $590.50 | $659.51 | $731.83 | $807.14 | $885.08 | |||||
| $120,000 | $644.19 | $719.46 | $798.36 | $880.52 | $965.55 | |||||
| $130,000 | $697.87 | $779.42 | $864.89 | $953.89 | $1,046.01 | |||||
| $140,000 | $751.55 | $839.37 | $931.42 | $1,027.27 | $1,126.47 | |||||
| $150,000 | $805.23 | $899.33 | $997.95 | $1,100.65 | $1,206.93 | |||||
| $160,000 | $858.91 | $959.28 | $1,064.48 | $1,174.02 | $1,287.40 | |||||
| $170,000 | $912.60 | $1,019.24 | $1,131.01 | $1,247.40 | $1,367.86 | |||||
| $180,000 | $966.28 | $1,079.19 | $1,197.54 | $1,320.78 | $1,448.32 | |||||
| $190,000 | $1,019.96 | $1,139.15 | $1,264.07 | $1,394.15 | $1,528.78 | |||||
| $200,000 | $1,073.64 | $1,199.10 | $1,330.60 | $1,467.53 | $1,609.25 | |||||
| $210,000 | $1,127.33 | $1,259.06 | $1,397.14 | $1,540.91 | $1,689.71 | |||||
| $220,000 | $1,181.01 | $1,319.01 | $1,463.67 | $1,614.28 | $1,770.17 | |||||
| $230,000 | $1,234.69 | $1,378.97 | $1,530.20 | $1,687.66 | $1,850.63 | |||||
| $240,000 | $1,288.37 | $1,438.92 | $1,596.73 | $1,761.03 | $1,931.09 | |||||
| $250,000 | $1,342.05 | $1,498.88 | $1,663.26 | $1,834.41 | $2,011.56 | |||||
| $300,000 | $1,610.46 | $1,798.65 | $1,995.91 | $2,201.29 | $2,413.87 | |||||
| $350,000 | $1,878.88 | $2,098.43 | $2,328.56 | $2,568.18 | $2,816.18 | |||||
| $400,000 | $2,147.29 | $2,398.20 | $2,661.21 | $2,935.06 | $3,218.49 | |||||
| $450,000 | $2,415.70 | $2,697.98 | $2,993.86 | $3,301.94 | $3,620.80 | |||||
If you are shopping around for a mortgage and can’t find your lender, or more specifically Loan Originator, on the internet then “red flags” should be popping up all over the place. If a Loan Originator is still in business today then they have probably been successful enough to hang on through the last 18 months of the most turbulent mortgage market we have ever seen. My challenge to you, is that as an informed consumer you demand to work with a professional Loan Originator, not someone who just gets by with being a good salesperson. A professional is concerned in doing what is in your interests, not theirs, and providing you with education, strategies and options that will give you the most benefits. That .125% in rate difference or $500 lower in closing that you are being “promised” versus getting good guidance and advice could very well cost you tens of thousands of dollars when you least expect it - I see it a lot, even today unfortunately. That is why “Googling” the Loan Originators you are considering working with and understanding what value they will offer you may just be the most important aspect of getting a mortgage today.
