Military vets who fail to look into government programs could be leaving money on the table when they purchase a home, according to a new article published by the Los Angeles Times.

Loans guaranteed by the Department of Veterans Affairs potentially offer big savings, and can be a way for qualified military personnel to break into home ownership since they often don’t require a down payment. In the majority of places, vets can borrow up to $144,000 without making any down payment on their home purchase. The limit stretches higher in some places. For example, in Sacramento, Calif. the maximum that can be borrowed is $827,500, and it's $546,250 in San Diego.

For buyers who do have to go above the limits, lenders typically require a down payment of $1 for every $4 borrowed over the limit. In other words, the Los Angeles Times article notes: If a vet is borrowing $200,000, he or she will most likely need $14,000 as a down payment in most markets.

The fear of paperwork may scare off some potential buyers who are eligible for VA loans. But, according to data from the Veterans Association of Real Estate Professionals, VA loans close up to two days faster than conventional mortgages.

The VA loan program is among the fastest-growing sectors in the mortgage market, according to Inside Mortgage Finance. The VA department owned nearly 25 percent of the primary insured-loan market, which outpaces the Federal Housing Administration. What’s more, the vet population is huge: Nearly 12 percent of 16.4 million active-duty service members and military vets with a mortgage have a VA loan, according to data from the National Association of REALTORS®.
Several states and local governments also offer vets assistance on home purchases. For example, the California Housing Finance Agency has a tax credit program that reduces buyer's federal taxes, which thereby creates extra income to use toward the monthly house payment. In Arizona, compensation received by service members who are on active duty any month of the year is exempt from income taxes on those months' income. Arizona also offers a property tax exemption for widows and widowers of vets, as well as disabled persons. Also, some counties offer special savings to vets too. For example, in San Diego, qualifying military personnel may be eligible for rehab loans to help pay for fixes to existing properties.  Military.com offers a state breakdown of financing options for veterans.

Tony Landaverde, Realtor - Veteran Land Board Certified Real Estate Agent


Original Article at:  Are Vets Missing Out on Home Ownership?

Daily Real Estate News | Monday, December 29, 2014

Mortgage Rates Are Expected to Climb to 5.4% by Late 2015

NEW YORK ( TheStreet) - Buying a home is about to become more expensive.

Rates on 30-year fixed mortgages are expected to rise to 5.4% by the end of 2015, predicts the National Association of Realtors. That's up from about 3.8% now, according to Freddie Mac.

"The Federal Reserve will certainly be raising their Fed funds rate at some time during the middle of next year," said Lawrence Yun, chief economist at the National Association of Realtors, in an interview with TheStreet. "But the long-term rates like mortgage rates will be rising in anticipation of that so the long-term bond investor will be taking cues about when the Fed will raise short-term rates."

The 10-year Treasury yields nearly 2.2% currently, compared to almost 3% at this time last year. Mortgage rates tend to move in tandem with the 10-year bonds.

It's not surprising that Yun forecasts the 10-year Treasury notes to reach 3.7% by the fourth quarter of next year.


Original Article at:  Mortgage Rates Are Expected to Climb to 5.4% by Late 2015

 By:  Scott Gamm 12/23/14 - 7:15 AM EST

Not long ago, FHA home loans were something of a niche product that appealed mostly to low-income buyers. But when the housing bubble burst in 2008, the federal program suddenly became a common way to finance property.   

Even today, FHA mortgages can be appealing to those who don’t qualify for conventional home loans. Certainly, there are some big pluses, including the ability to buy a house with very little money down. But be careful: Recent changes have made these loans more expensive than ever.

Here’s what you need to know if you don’t fit the ideal credit profile for most banks and are considering one of these loans.

1. The Government Isn’t the Lender

Despite the name, you don’t get an FHA loan from the Federal Housing Administration. Rather, the agency insures loans that are made by a private lender. In other words, if you take out a mortgage and fall behind on your payments, the FHA will reimburse the bank or mortgage company for its losses.
To do that, it charges the homeowner both an upfront and an annual mortgage premium. Because of this added layer of protection, FHA-approved lenders are able to extend financing to customers who don’t qualify for conventional loans.  Keep in mind that not all loan originators provide FHA loans. To find a list of approved lenders, you can search on the U.S. Department of Housing and Urban Development website.

2. They’re Versatile
One of the misconceptions about FHA mortgages is that they’re only suitable for a small percentage of homebuyers. In fact, you can use these loans for a fairly wide range of needs, including home purchases and refinancing. You can also choose between fixed and adjustable-rate mortgages, or ARMs.

Nor can borrowers only tap FHA loans for modest homes. In more expensive parts of the country, you can borrow up to $625,500 for a single-family home – and even more for multi-family units.

3. Down Payments Are Lower

When the housing market took a turn a few years back, the days of zero-down mortgages disappeared virtually overnight. But don’t think this means you need to put down 20% of the purchase price to buy a home. With an FHA mortgage, many individuals and families can purchase a house or condo with as little as 3.5% down. 

4. You Don’t Need Perfect Credit
One of the more common reasons why applicants can’t get a traditional mortgage is because of a damaged credit score. The FHA program is considerably more forgiving.  With a credit score of 580 or above, borrowers can typically qualify for a mortgage and benefit from the 3.5% down payment requirement. You might be able to get a loan if your score is even lower, though you might have to put down 10% or more of the home’s value.  Another big difference with FHA loans is that you can often qualify even if you have filed for bankruptcy or undergone a foreclosure within the past few years. But first, you’ll need to re-establish your credit and meet other program requirements.

5. Loans Can Cover Renovations
Interested in a home that needs a little work? With a special product known as an FHA 203(k) loan, the cost of certain repairs and renovations are built into the loan. That can make a big difference if you don’t have a lot of cash on hand after making your down payment.

The FHA’s Energy Efficient Mortgage program is a similar concept, but aimed at upgrades that lower the utility bill. The cost of newer, more efficient appliances, for example, becomes part of the loan.

6. You May Get Help With Closing Costs
When you buy a home, you may be responsible for certain out-of-pocket expenses such as loan origination fees, attorney fees and appraisal costs. One of the advantages of an FHA mortgage is that the seller, home builder or lender is allowed to pay some of these closing costs on your behalf. If the seller is having a hard time finding a buyer, he or she might just offer to help you out at closing time as a deal sweetener.

7. PMI Might Be Cheaper

While there are many perks in the FHA program, the obvious drawback is the requirement to pay mortgage premiums for mortgage insurance on the loan. In recent years, the government has gradually hiked the amount homeowners have to pay, which can make these loans considerably more expensive than conventional loans.

These days, borrowers face an upfront premium of 1.75% and an annual premium that, in many cases, will represent 1.35% of the loan amount. For a 30-year loan worth $200,000, that means you could pay $3,500 in upfront costs and another $2,700 each year to cover the insurance.

Because of the premium spikes, some experts suggest that a conventional loan with private mortgage insurance, or PMI, is now a less expensive option for most home buyers who need to have it (a down payment of less than 20% usually triggers the mortgage insurance requirement). The annual costs of PMI are typically between 0.3% and 1.15% of the loan – and there’s no upfront fee.

Original Article at:  7 things to know about FHA home loans

By Daniel Kurt December 23, 2014 4:20 PM

8 Costly Home Seller Mistakes

 

If you’ve lived happily in your home for years, it can be difficult to detach yourself from cherished memories and look at your house as a commodity you’re attempting to sell.

But no matter how much you love your home, you’ll need to spruce it up before it hits the market.

For a smooth transaction that garners the most possible profit from your sale, avoid these eight common, and costly, home seller mistakes.

1. Skipping a home inspection. Depending on the age of your home, scheduling a pre-listing home inspection could save you a lot of time and aggravation. You can address issues on your own time and budget before negotiating with a buyer to fix problems.

2. Skimping on your sales prep. While you may be tempted to “test the waters” and put your home on the market without painting it or making minor repairs, your home is likely to languish on the market and get a reputation for having a major problem. A thorough, professional-level cleaning should be your bare minimum seller prep. Your eventual sales price is likely to be lower if you don’t sell within the first few weeks after you list your home.

3. Choosing the wrong REALTOR®. Instead of picking a REALTOR® who’s a friend of a friend, a relative or perhaps someone who’s great at working with buyers, take the time to pick a REALTOR® with an excellent reputation for listing homes. Your payoff will be much larger if you list your home with a REALTOR® with local market knowledge and sales expertise.

4. Neglecting to ramp up your curb appeal. If you polish and primp inside your home but neglect to pull weeds or paint your front door, you run the risk of potential buyers leaving without ever entering your home.

5. Withholding information from buyers. If you hope that the buyers or their inspector won’t find out about the leak under your bathroom sink or the fact that your basement gets flooded every winter, you run the risk of a nasty negotiating period—or worse, a lawsuit after the settlement.

6. Overpricing your home. If you’ve hired the right REALTOR®, someone who can give you a strong market analysis and help you determine a reasonable price for your home, then you can avoid overpricing your home. If you don’t listen to a REALTOR® and base your listing price on an inflated view of your home’s value, you’re likely to end up selling after multiple price drops for less than you would have if you priced it right the first time.

7. Being unprepared for your next step. Whether you should buy your next home or sell your current home first is only one part of the preparation you need to make to move. You need a back-up plan in case your transaction on either end takes longer or shorter than you think, and you need to understand your mortgage payoff and the closing costs you must pay.

8. Letting your pets and kids spoil a sale. Part of your emotional detachment from your home is recognizing that while you love Fluffy and your darling twins, buyers want to visualize themselves and their own family in your home. Bribe your kids if you have to, but make sure the house is neat and as neutral-looking and smelling as possible. Take the kids and your pets out (or lock up your pets) when prospective buyers are visiting: You never know if someone who is terrified of dogs or cats will be turned off from making an offer because of your adorable pet.

Selling a home can be challenging, but with the help of a reliable REALTOR®, you can avoid making mistakes and reap the rewards of your sale.

Original Article at:  8 Costly Home Seller Mistakes

By: Michele Lerner

Hoping to Buy a Home in 2015? Start Planning Now

At the start of a new year, many real estate agents’ phones begin ringing with calls from potential buyers who want to get in the market. If buying a home is on your agenda for 2015, now’s the time to begin working toward your goal. Here’s a guide to the home buying experience to get you started.

The dreaming phase

We are all more connected than ever, which makes researching a new home easy and convenient. The dreaming phase — which has no definitive start time or length — means thinking about what you want in a home, exploring neighborhoods and casting the widest net possible.

This phase includes looking at photos of homes online, comparing and contrasting listings or prices per square foot and understanding the price differential between two school districts.

Dreaming happens on your terms and your timing. It doesn’t require help from a real estate agent or mortgage professional. It’s a good time for you to play around with the market, start to get the real estate bug and develop a feel for what could be a reality in the future. Don’t rush, and don’t feel pressured.

Search and discovery mode

When you feel ready to make a reality of the dreaming phase, it’s time to move the process along. Search and discovery allows you to get the facts, build your team and begin to amass a strong approach to pushing ahead. Connect with a local real estate agent and a mortgage lender to get started.
Typically, buyers meet with a real estate agent first, who then refers them to a good local mortgage professional. Connecting with an agent means asking lots of questions about how the market works, school districts and the home buying process in general.

In the dreaming phase, you don’t know what you don’t know. But during search and discovery, you’ll start gathering solid information. A mortgage professional will run some numbers and do a full review of your finances, including pulling your credit. They will marry that data with available loans in the market and teach you about the different loan options.

Full steam ahead

After weeks or months (or sometimes even years) of dreaming, searching and discovering, you will know the market inside and out. You will have seen enough homes to know what you like and don’t like, and you’ll have prioritized your criteria based on what you’ve learned. You’ll have seen many homes come on the market, go pending and close, which will help you understand list price vs. sale price, and why some homes sell faster than others.

When you are full steam ahead, you’ll be online 24/7 and being a home buyer becomes a part-time job. You’ll be in constant contact with your agent, who may be texting or emailing you listings throughout the day.

When a home that matches your criteria comes on the market, get out and see the home in person. Don’t wait for an open house — go view the home ASAP with your agent.

At this stage, you’ll be ready to make offers, and you may miss out on one or two homes before getting one. Or you may move forward on a home, only to find out there are inspection issues. You might even experience a little buyer’s remorse.

All of this is to be expected. When the right home comes along, it will work out because you’ve done all the prep work and have your team in place.

Original Article at:  Hoping to Buy a Home in 2015? Start Planning Now

By:  Brendon DeSimone December 23, 2014 8:18 PM

U.S. existing home sales hit six-month low, inventories low

WASHINGTON (Reuters) - U.S. home resales tumbled to a six-month low in November after two straight months of strong increases, underscoring the uneven nature of the housing market recovery.

The National Association of Realtors said on Monday existing home sales dropped 6.1 percent to an annual rate of 4.93 million units, the lowest level since May.

November's steep decline probably does not signal the start of a weakening trend and in part reflected stubbornly low inventories, which touched an eight-month low, giving buyers limited options. Sales were up 2.1 percent from a year ago.

"The housing market may still be improving, but it is doing so with two steps forward and one back," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

Housing has struggled to shift into higher gear after stagnating in the second half of 2013 in the wake of a jump in mortgage rates, which have since pulled back from their peaks, hitting an 18-month low in November.

It has lagged an acceleration in economic activity as tepid wage growth, a shortage of properties available for sale and higher home prices sidelined first-time buyers.
November's decline exceeded Wall Street's expectations for only a drop to a 5.20-million unit pace.

That prompted economists to lower their fourth-quarter gross domestic product estimates by at least one-tenth of a percentage point to around a 2.6 percent annual pace, citing reduced brokers' commissions.

The U.S. housing index was down 0.2 percent as shares in largest home builder DR Horton slipped 0.4 percent. Lennar Corp fell 0.43 percent, while Pulte Group dipped 0.19 percent.

TESTING THE WATERS
But with job gains broadening and wage growth starting to accelerate, first-time buyers are wading back into the market. They accounted for 31 percent of transactions last month, the biggest share since October 2012.

That was up from 29 percent in October. Economists and real estate agents say a share of 40 percent to 45 percent is required for a strong housing recovery.

"A fundamental issue continues to be first-time home buyers, whose outlook is improving along with the economy," said Jeff Taylor, managing partner at loan processor Digital Risk in Maitland, Florida. Household formation, a key ingredient for a healthy housing market, is running at about 500,000 a year, well below the more than one million that is considered ideal.

Investors, who had supported the market, continued to withdraw in November, accounting for 15 percent of transactions last month, down from 19 percent in November 2013.

The inventory of unsold homes on the market fell 6.7 percent from a year ago to 2.09 million. Economists say insufficient equity and uncertainty about the economy's strength were forcing potential sellers to stay in their homes.

At November's sales pace, it would take 5.1 months to clear houses from the market, unchanged from October. A six months' supply is viewed as a healthy balance between supply and demand.

The shrinking supply lifted the median home price 5.0 percent from a year ago. The pace, however, has slowed from the double-digit growth seen for much of 2013.

Original Article At:   U.S. existing home sales hit six-month low, inventories low

By:  By Lucia Mutikani December 22, 2014 1:26 PM