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Sunday, May 31, 2009
Friday, May 29, 2009
NOTES ABOUT MORTGAGES IN TODAY'S ENVIROMENT by Edwin Gerace and Kip Murphy
NOTES AND CONVERSATION ABOUT MORTGAGES IN TODAY'S ENVIROMENT.
(June 1,2009)
What are the largest changes that face the Home Buying process?
One of the biggest changes for buyers looking for a conventional mortgage in today’s market is the importance of their credit score. Just two years ago it was an all or nothing system. If you were approved for a conventional loan you got the same rate whether your credit score was 620 or 740. Now the difference in rate for these two buyers would be more than a point or cost the 620 buyer 3 discount points to get the same rate as the 740 buyer. Also, buyers with less than a 660 credit score no longer qualify for mortgage insurance, requiring them to be able to put down 20%. This is the primary reason FHA loans are becoming more popular. If a borrower qualifies, there is no minimum credit score and everyone gets the same interest rate. The FHA loan limit for most of SC, including the Columbia Metro Area, is $271,050; so buyers needing a larger loan need to do their homework upfront and make sure there are no errors on their credit report which could be impacting their score.
What are interest rates going to do in the future?
It is always dangerous to try and predict which way interest rates will go, but generally they will increase as the economy improves. Most people think the FED sets mortgage rates and expect rates to go up and down based on FED policy. This is not true. Rates are impacted by the FED’s action, but are actually determined by the bond market. Generally speaking, if the stock market is improving, investors shift money from the bond market to stocks. This requires bond sellers (Fannie Mae & Freddie Mac) to offer higher yields to sell their bonds which they must then pass on to the end consumer in the form of higher rates. So to answer your question, if the economy has really started to turn the corner, we can expect rates to rise as well.
When is a good time to refinance your home?
Assuming that the only reason a borrower is considering refinancing is to lower their rate, there is a pretty simple calculation to determine whether it is a good time or not. The first question is always “how long do you intend to keep the property?” Once you determine this, you simply divide the cost of the new loan by the monthly payment savings to establish the break even period. If this is a shorter time frame than how much longer they intend to own the property it is probably a good financial decision. An example would be someone with a $200,000 mortgage thinking about refinancing from a 6% rate to a 5% rate. The monthly savings would be approximately $125 month and the closing costs without points would be around $2500. This borrower would break even in only 20 months, so most borrowers would benefit from this refinance. It can be a little harder to determine if the borrower wants to pay off other debts, include renovations, or drastically reduce or increase the pay off time of their current loan. Most mortgage professionals will be happy to assist someone with the decision without any charges.
Has the loan approval process over last 90 to 120 days on loans changed?
The process is definitely taking longer and more documentation is being required than at any time in the last ten years. Borrowers need to be prepared for this upfront and realize the importance of getting the process started as early as possible if they are trying to achieve a specific closing date. The reason it is taking longer is two fold. As the mortgage industry was shaken to its core over 2007 and 2008, many lenders began to lay off thousands of support personnel or failed all together. By the end of 2008 there were approximately 60% fewer lenders and workers in the mortgage industry. At this time mortgage rates fell to their all time lows, creating a rush of business. This coupled with legislation giving first time buyers tax credits and an improving economy left lenders overwhelmed with business. Still reeling from losses the last two years and leery of the duration this business surge would last, most lenders decided not to bring on more employees due to training times and costs. The new requirements in credit policy also added to delays. The more documentation that is required, the longer it takes to be reviewed in underwriting. Fewer people, more business, and more documentation requirements caused some loans to take 60 days or more to get approved. The good news is that most lenders have now increased staffing and improved efficiencies so that most purchase loans can be closed in 30 days. You should still expect 45 to 60 days on refinances, but this should improve too if rates continue to rise.
Are there any True 100% financing programs out there?
In general there are no longer any 100% loans available. A few exceptions are Rural Housing and VA loans, but these loans are only available on certain properties or for military personnel. FHA has the lowest down payment requirement of the non-income restricted loans at 3.5% and can be used by qualified borrowers up to $271,050 in most of South Carolina. Borrowers should also do their homework on any available down payment assistance programs. Most of these are available to first time borrowers at or below the median income and work well in conjunction with FHA loans. Another good option for buyers needing 100% financing is to consider buying a HUD foreclosure. These can be purchased with $100 down using a FHA loan.
What are the top 2-4 factors that effect buyers buying/ credit score numbers?
Credit scoring is very tricky to predict for even the most seasoned loan officer, much less the general consumer, but there are a few things buyers should know. Revolving credit balances should be below 50% of the limit and preferably below 30% of the limit. Judgments and collections do hurt a credit score, ironically though, if they are over two years old it may be better to leave them alone unless it is required for loan approval. Inquiries do not have near the impact most people think as long as they are not excessive. One thing most people don’t realize is that borrowing from finance companies actually hurts your credit score even if you make your payments on time. Finally, anytime you open a new loan your score will go down until you establish a payment history. So if you are thinking about getting a mortgage it is advisable to hold off on getting any other new credit.
This is some great information put together in Partnership with Kip Murphy with Bank of Amercia and Edwin Gerace of Russell and Jeffcoat.
Kip Murphy is a loan officer with Bank of America Home Loans with over 10 years of experience in the Columbia market. He has helped 100’s of buyers over this time. At Bank of America he has the tools, products and support to help anyone from first time buyers to someone needing a jumbo construction loan. Give him a call or email him today if you need any information about getting a mortgage loan. He can help with purchases or refinances in 48 of the 50 states.
Kip Murphy , Loan Officer, Bank Of America Home Loans, O: 803-216-7488, C: 803-920-3470,
F: 866-429-1636, E: Robert.K.Murphy@Bankofamerica.com
Edwin Gerace is a realtor with Russell and Jeffcoat Realtors with over 10 years of expierence in the Columbia market. He has help buyers,sellers and builders over the years reach thier real estate desires. Feel free to call or email him about real estate. Visit him on othe web at http://www.edwingerace.com/ or visit his blog at http://www.edwingeracesrealestateblog.com/ . Contact him at 803-609-7653 cause with Ed You Win.
(June 1,2009)
What are the largest changes that face the Home Buying process?
One of the biggest changes for buyers looking for a conventional mortgage in today’s market is the importance of their credit score. Just two years ago it was an all or nothing system. If you were approved for a conventional loan you got the same rate whether your credit score was 620 or 740. Now the difference in rate for these two buyers would be more than a point or cost the 620 buyer 3 discount points to get the same rate as the 740 buyer. Also, buyers with less than a 660 credit score no longer qualify for mortgage insurance, requiring them to be able to put down 20%. This is the primary reason FHA loans are becoming more popular. If a borrower qualifies, there is no minimum credit score and everyone gets the same interest rate. The FHA loan limit for most of SC, including the Columbia Metro Area, is $271,050; so buyers needing a larger loan need to do their homework upfront and make sure there are no errors on their credit report which could be impacting their score.
What are interest rates going to do in the future?
It is always dangerous to try and predict which way interest rates will go, but generally they will increase as the economy improves. Most people think the FED sets mortgage rates and expect rates to go up and down based on FED policy. This is not true. Rates are impacted by the FED’s action, but are actually determined by the bond market. Generally speaking, if the stock market is improving, investors shift money from the bond market to stocks. This requires bond sellers (Fannie Mae & Freddie Mac) to offer higher yields to sell their bonds which they must then pass on to the end consumer in the form of higher rates. So to answer your question, if the economy has really started to turn the corner, we can expect rates to rise as well.
When is a good time to refinance your home?
Assuming that the only reason a borrower is considering refinancing is to lower their rate, there is a pretty simple calculation to determine whether it is a good time or not. The first question is always “how long do you intend to keep the property?” Once you determine this, you simply divide the cost of the new loan by the monthly payment savings to establish the break even period. If this is a shorter time frame than how much longer they intend to own the property it is probably a good financial decision. An example would be someone with a $200,000 mortgage thinking about refinancing from a 6% rate to a 5% rate. The monthly savings would be approximately $125 month and the closing costs without points would be around $2500. This borrower would break even in only 20 months, so most borrowers would benefit from this refinance. It can be a little harder to determine if the borrower wants to pay off other debts, include renovations, or drastically reduce or increase the pay off time of their current loan. Most mortgage professionals will be happy to assist someone with the decision without any charges.
Has the loan approval process over last 90 to 120 days on loans changed?
The process is definitely taking longer and more documentation is being required than at any time in the last ten years. Borrowers need to be prepared for this upfront and realize the importance of getting the process started as early as possible if they are trying to achieve a specific closing date. The reason it is taking longer is two fold. As the mortgage industry was shaken to its core over 2007 and 2008, many lenders began to lay off thousands of support personnel or failed all together. By the end of 2008 there were approximately 60% fewer lenders and workers in the mortgage industry. At this time mortgage rates fell to their all time lows, creating a rush of business. This coupled with legislation giving first time buyers tax credits and an improving economy left lenders overwhelmed with business. Still reeling from losses the last two years and leery of the duration this business surge would last, most lenders decided not to bring on more employees due to training times and costs. The new requirements in credit policy also added to delays. The more documentation that is required, the longer it takes to be reviewed in underwriting. Fewer people, more business, and more documentation requirements caused some loans to take 60 days or more to get approved. The good news is that most lenders have now increased staffing and improved efficiencies so that most purchase loans can be closed in 30 days. You should still expect 45 to 60 days on refinances, but this should improve too if rates continue to rise.
Are there any True 100% financing programs out there?
In general there are no longer any 100% loans available. A few exceptions are Rural Housing and VA loans, but these loans are only available on certain properties or for military personnel. FHA has the lowest down payment requirement of the non-income restricted loans at 3.5% and can be used by qualified borrowers up to $271,050 in most of South Carolina. Borrowers should also do their homework on any available down payment assistance programs. Most of these are available to first time borrowers at or below the median income and work well in conjunction with FHA loans. Another good option for buyers needing 100% financing is to consider buying a HUD foreclosure. These can be purchased with $100 down using a FHA loan.
What are the top 2-4 factors that effect buyers buying/ credit score numbers?
Credit scoring is very tricky to predict for even the most seasoned loan officer, much less the general consumer, but there are a few things buyers should know. Revolving credit balances should be below 50% of the limit and preferably below 30% of the limit. Judgments and collections do hurt a credit score, ironically though, if they are over two years old it may be better to leave them alone unless it is required for loan approval. Inquiries do not have near the impact most people think as long as they are not excessive. One thing most people don’t realize is that borrowing from finance companies actually hurts your credit score even if you make your payments on time. Finally, anytime you open a new loan your score will go down until you establish a payment history. So if you are thinking about getting a mortgage it is advisable to hold off on getting any other new credit.
This is some great information put together in Partnership with Kip Murphy with Bank of Amercia and Edwin Gerace of Russell and Jeffcoat.
Kip Murphy is a loan officer with Bank of America Home Loans with over 10 years of experience in the Columbia market. He has helped 100’s of buyers over this time. At Bank of America he has the tools, products and support to help anyone from first time buyers to someone needing a jumbo construction loan. Give him a call or email him today if you need any information about getting a mortgage loan. He can help with purchases or refinances in 48 of the 50 states.
Kip Murphy , Loan Officer, Bank Of America Home Loans, O: 803-216-7488, C: 803-920-3470,
F: 866-429-1636, E: Robert.K.Murphy@Bankofamerica.com
Edwin Gerace is a realtor with Russell and Jeffcoat Realtors with over 10 years of expierence in the Columbia market. He has help buyers,sellers and builders over the years reach thier real estate desires. Feel free to call or email him about real estate. Visit him on othe web at http://www.edwingerace.com/ or visit his blog at http://www.edwingeracesrealestateblog.com/ . Contact him at 803-609-7653 cause with Ed You Win.
Tuesday, May 26, 2009
Lexington South Carolina Market Conditions
Read Recently on Zillow.
Zillow Real Estate Market Reports First Quarter: January-March 2009
U.S. home values continued to slide for the ninth consecutive quarter, declining 14.2 percent from a year ago.
Zillow Q1 Real Estate Market Reports track 161 metropolitan statistical areas (MSAs) throughout the U.S., identifying market trends including, but not limited to: five and 10-year annualized change, negative equity, short sales and foreclosure transactions.
Pricing in Metro Columbia area as follows
Nationwide 14% Decrease over last year
Lexington Showed a 5% Decrease over last year
West Columbia Showed a 3% Decrease over last year
Irmo Showed a 6.5% Decrease over last year
Chapin Showed a 14% Decrease over last year
Gilbert Showed a 5% Decrease over last year
This shows what I am seeing that on the average Lexington area is doing better than the nation in general and is very competitive in the metro area.
Edwin Gerace
www.EdwinGerace.com
www.EdwinGeracesRealestateBlog.com
803-609-SOLD(7653)
Zillow Real Estate Market Reports First Quarter: January-March 2009
U.S. home values continued to slide for the ninth consecutive quarter, declining 14.2 percent from a year ago.
Zillow Q1 Real Estate Market Reports track 161 metropolitan statistical areas (MSAs) throughout the U.S., identifying market trends including, but not limited to: five and 10-year annualized change, negative equity, short sales and foreclosure transactions.
Pricing in Metro Columbia area as follows
Nationwide 14% Decrease over last year
Lexington Showed a 5% Decrease over last year
West Columbia Showed a 3% Decrease over last year
Irmo Showed a 6.5% Decrease over last year
Chapin Showed a 14% Decrease over last year
Gilbert Showed a 5% Decrease over last year
This shows what I am seeing that on the average Lexington area is doing better than the nation in general and is very competitive in the metro area.
Edwin Gerace
www.EdwinGerace.com
www.EdwinGeracesRealestateBlog.com
803-609-SOLD(7653)
Monday, May 25, 2009
Lake Murray Living at Hammock Bay
Hammock Bay on Lake Murray is one of the newest communities on the lake in Lexington County. Lake Murray has so much to offer the community Hammock Bay Amenities include Pool, Tennis Courts, Community Boat Dock, Volley Ball Court, Community Boat Parking, Gated Entry, Club House, Work Out Room, and Walking Trails. Units range from 2 Bed Rooms 2 Bath studio feel with over 900 Sq Ft to a 3 Bedroom 3.5 Baths with over 1,900 Sq Ft. There are many units available currently to rent or buy. This community was built and developed by local Developer Connelly Builders. This community has hosted events by Lexington Chamber and Home Builders Home Show I have seen prices starting at $159,000 to over $300,000. This community is located outside the Town of Lexington but in Lexington County.
There have been several Videos on Hammock Bay Created on You Tube. Video one Video two Video Three (My Favorite) and Video Four.
For more information Call Edwin Gerace Directly at 803-609-7653 or email him at mail@609sold.com
Saturday, May 16, 2009
Lexington's new Builder
Holiday Builders
Holiday Builders features new homes in Sylvan Ridge at
Wellesley
The agents in our office were invited by Holiday Builders to visit Sylvan Ridge at Wellesley on Wednesday. We toured the model homes and existing inventory in this great addition to Wellesley subdivision. These Holiday homes represent an excellent buy and include many upgrades and options. Holiday Builders is now paying up to $6000 in closing costs and prepaid items. If a first time home buyer buys a Holiday home, they will get $6000 toward closing and the $8000 tax credit. If you needed the push off the fence, here it is! Call or email and let’s set a time to look at these homes. If you are in the market for a new home, now is the best time to buy! Call Edwin for a current list of inventory homes at 803-609-7653
The agents in our office were invited by Holiday Builders to visit Sylvan Ridge at Wellesley on Wednesday. We toured the model homes and existing inventory in this great addition to Wellesley subdivision. These Holiday homes represent an excellent buy and include many upgrades and options. Holiday Builders is now paying up to $6000 in closing costs and prepaid items. If a first time home buyer buys a Holiday home, they will get $6000 toward closing and the $8000 tax credit. If you needed the push off the fence, here it is! Call or email and let’s set a time to look at these homes. If you are in the market for a new home, now is the best time to buy! Call Edwin for a current list of inventory homes at 803-609-7653
Feel free to call Edwin about his expierence with Holiday Builders and talk with his clients that consider it thier home.
Directions Lexington SC-take Hwy 378 to Right on Ginny Ln (across from Corley Mill Road off I-20 lex sd) Go 1.5 miles turn Right into Wellesley then go left at circle MENTION THIS AD and you could recieve..............
Read about them in Lexington Life Magazine http://www.lexingtonlifemagazine.com/lexrealestate.htm
Visit thier Website
Thursday, May 14, 2009
HUD Action Allows Home Buyers To Use $8,000 Tax Credit For Downpayments
PRESS RELEASE
May 14, 2009
For Immediate Release
Contact: Russell & Jeffcoat Realtors, Edwin Gerace 803-609-7653
HUD Action Allows Home Buyers To Use $8,000 Tax Credit For Downpayments
On FHA-Insured Loans
HUD Secretary Shaun Donovan's decision to allow consumers to use the $8,000 first-time home buyer tax credit to help cover their downpayment and closing costs on FHA-insured mortgages will be a big boost to the housing market, according to the National Association of Home Builders (NAHB).
"The biggest obstacle for first-time buyers is coming up with a downpayment," said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. "We commend Secretary Donovan for acting decisively to enable buyers to access the tax credit at the time of closing. This will help to stimulate home sales, stabilize housing and get the economy back on track."
The measures announced by HUD would allow FHA-approved lenders; federal, state and local government agencies; and FHA-approved non-profit organizations to supply home buyers short-term or "bridge loans" up to the amount of the $8,000 first-time home buyer tax credit.Longer term loans secured by second liens can also be used by government agencies and FHA-approved non-profit organizations to facilitate home sales. Several state housing finance agencies have introduced such programs and a number of agencies are considering that possibility.
More information about these programs can be found on the National Council of State Housing Agencies Web site at www.ncsha.org/section.cfm/3/34/2920.
Previously, the home buyer would have been unable to access the tax credit until they filed their next annual tax return or an amended 2008 tax return and received the refund from the IRS.
Robson and others NAHB leaders discussed this matter and other housing-related issues with Secretary Donovan last week.
May 14, 2009
For Immediate Release
Contact: Russell & Jeffcoat Realtors, Edwin Gerace 803-609-7653
HUD Action Allows Home Buyers To Use $8,000 Tax Credit For Downpayments
On FHA-Insured Loans
HUD Secretary Shaun Donovan's decision to allow consumers to use the $8,000 first-time home buyer tax credit to help cover their downpayment and closing costs on FHA-insured mortgages will be a big boost to the housing market, according to the National Association of Home Builders (NAHB).
"The biggest obstacle for first-time buyers is coming up with a downpayment," said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. "We commend Secretary Donovan for acting decisively to enable buyers to access the tax credit at the time of closing. This will help to stimulate home sales, stabilize housing and get the economy back on track."
The measures announced by HUD would allow FHA-approved lenders; federal, state and local government agencies; and FHA-approved non-profit organizations to supply home buyers short-term or "bridge loans" up to the amount of the $8,000 first-time home buyer tax credit.Longer term loans secured by second liens can also be used by government agencies and FHA-approved non-profit organizations to facilitate home sales. Several state housing finance agencies have introduced such programs and a number of agencies are considering that possibility.
More information about these programs can be found on the National Council of State Housing Agencies Web site at www.ncsha.org/section.cfm/3/34/2920.
Previously, the home buyer would have been unable to access the tax credit until they filed their next annual tax return or an amended 2008 tax return and received the refund from the IRS.
Robson and others NAHB leaders discussed this matter and other housing-related issues with Secretary Donovan last week.
Lexington South Carolian Fun and Humming Birds
Purchase some hummingbird feeders (range from a few dollars to expensive handmade) and hang them in an area protected from the wind. I have feeders in the shade and in sun and both places attract visitors each year. You can plant a “hummingbird” garden to help attract the birds to your feeders. Once you start seeing visitors to your feeders, then the fun begins. The hummers will zoom in and out jockeying for position at the feeders. If you see one of the hummingbirds keeping the others from feeding then add another feeder to insure everyone gets food.
You don’t need to buy readymade nectar, just make your own. The recipe is simple:
1 part sugar (never use honey)
4 parts water
Boil for 1 to 2 minutes. Cool
Store extra in refrigerator
You don’t need to buy readymade nectar, just make your own. The recipe is simple:
1 part sugar (never use honey)
4 parts water
Boil for 1 to 2 minutes. Cool
Store extra in refrigerator
If you build a following of hummingbirds at your feeders this season, put your feeders out again next season in mid March or early April and your hummer friends will return. It is a good idea to keep your feeders up until late fall. Some migrating birds may be late getting started. I guarantee you will enjoy this summer entertainment
I have been doing this for years and have seen what I think is a family of birds, mom and child come through.
Edwin Gerace
Monday, May 11, 2009
Wednesday, May 6, 2009
Some great news articles about real estate in South Carolina
CMLS Succeeds in Protecting Interest of Consumers with U.S. Department of Justice SettlementPR Newswire
S.C. foreclosure laws, tenants rights and eviction lawsThe Island Packet
Boaters return to Upstate lakes Greenville Online.com
Construction spending, pending home sales riseRock Hill Herald Online
Myrtle Beach-North Myrtle Beach-Conway Home Prices DecreaseSun News
Changes in reverse mortgages worry industryFort Mill Times
State Attorney General amounts fight for distressed borrowersThe Horry Independent
Are commercial mortgages the next real estate crisis?The State
____________________________________________
CMLS Succeeds in Protecting Interest of Consumers with U.S. Department of Justice SettlementPR Newswire
S.C. foreclosure laws, tenants rights and eviction lawsThe Island Packet
Boaters return to Upstate lakes Greenville Online.com
Construction spending, pending home sales riseRock Hill Herald Online
Myrtle Beach-North Myrtle Beach-Conway Home Prices DecreaseSun News
Changes in reverse mortgages worry industryFort Mill Times
State Attorney General amounts fight for distressed borrowersThe Horry Independent
Are commercial mortgages the next real estate crisis?The State
____________________________________________
Requested Information
Over the last month I have been asked to talk and give some creditable information and statistics about the Lexington, SC Market.
If there is an area of interest or a statistic that would interest you, please feel free to post your question here or you can email to me directly at mail@609sold.com.
Look forward to talking with you about real estate.
Edwin Gerace
www.EdwinGerace.com
If there is an area of interest or a statistic that would interest you, please feel free to post your question here or you can email to me directly at mail@609sold.com.
Look forward to talking with you about real estate.
Edwin Gerace
www.EdwinGerace.com
Friday, May 1, 2009
Lexington Home with Brick Front and Fenced Yard
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About Me
- Lexington Real Estate with Edwin Gerace
- Lexington, SC, United States
- Edwin Gerace is Realtor with Holiday Builders in Lexington South Carolina. Edwin specializes in New Construction and 1st Time Home Buyers. Edwin is very active in Lexington South Carolina and is knowledgeable about the surroundings. Edwin is very active in his profession and community such as: On active committees with the Columbia Home Builders, active and on committees with Lexington Chamber of Commerce, Town of Lexington Performing Arts Center, Green Building Council of HBA, LORADAC, State Association of Realtors on State and Local Level, and many other community oriented service groups.
