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Educate yourself about closing costs

June 23rd, 2009 11:41 AM

Educate yourself about closing costs

Reported by Kathy Canavan, USA Today

June 12, 2009 - In a national ranking of average lender closing costs charged to borrowers in the U.S. and major markets, Missouri has emerged as one of the lowest.

The figures compiled by Bankrate.com and published by USA Today shows Missouri near the bottom in the 53rd slot with an average closing cost of $2,758. The top leader, New York City soars to $4,015, followed by number two Texas at $3,975. The list of 55 has a median closing cost of $3,086 with the lowest cost in North Carolina at $2,650.

While the figures are interesting, reporter Canavan reveals an important fact about borrowers, "half the mortgage applicants in a 2007 Federal Trade Commission study could not identify their loan amount on settlement forms." Closing costs - fees paid at settlement - can add up to thousands of dollars, yet the costs and settlement process is a mystery for many borrowers.

Norm Miller, academic director at the University of San Diego's Burnham-Moores Center for Real Estate, says the savvy borrower will walk into the mortgage office with pay check stubs, recent bank statements, two years of tax information and a printout of stock account numbers and cash-value insurance accounts.

"I'm going to come in with everything I can to make it easy for the lender," stated Miller. "That's not only going to speed everything up dramatically, but you'll probably be considered a more sophisticated buyer, and they'll be fairly upfront with you." A 2008 Urban Institute study showed lenders appeared to make lower-priced offers to borrowers who seem more familiar with market terms.

Bart Shapiro, deputy director of the U.S. Department of Housing and Urban Development's (HUD) RESPA office, which regulates settlement procedures, offered a few tips for consumers:

Seek advice. Talk to relatives and friends who have gone through the process for their insights. Read all you can about the closing process. Make a list of questions about items you don't understand and ask your lender.

Go online. The HUD (www.hud.gov), Federal Reserve (www.federalreserve.gov) and Federal Trade Commission (www.ftc.gov) websites provide free guides to mortgage costs.

Shop for the best. Look for a loan provider whose rates and approach you like. Some lenders prefer to meet face-to-face, others use the Internet or phone for speed. Keep asking questions until you feel comfortable and don't sign anything until you feel confident.

Go with your gut. Mortgage lenders are required by law to give you a Good Faith Estimate (GFE) within three days after you apply for a loan. Many will give it to you earlier. The GFE lists all estimated fees you'll pay at closing. Select a lender you trust even if their fees are a few dollars higher, because the good faith estimate is just an estimate. Before closing day, request a HUD-1 form (lenders provide this by Federal Law) which contains all of the final settlement numbers.

Posted by Customer Service on June 23rd, 2009 11:41 AMPost a Comment (0)

Builders Serving Mature Home Buyer Market See More Consumer Interest

June 12th, 2009 9:11 AM

Builders Serving Mature Home Buyer Market See More Consumer Interest

Sales Still Low; Future Expectations Higher, But Modest reports the NAHB.

June 2009 - The National Association of Home Builders (NAHB) has released new information about the growing mature home buyer market. Builders of single-family housing for this demographic sector reported an increase in traffic as prospective buyers searched for smaller, more easily managed homes that are energy efficient and have all of the latest easy living amenities.

"A strong and growing number of retirees and empty-nest households are interested in either downsizing or moving to a more user-friendly home," stated David Crowe, NAHB's chief economist. These buyers are not interested in moving out of their locale but rather they want to stay near their existing community.

The data was gathered during the first quarter of this year and was used to compile NAHB's current 55+ Housing Market Index (55+ HMI).

The component of the Index measuring traffic rose to 14, up from nine in the last quarter representing a 55% increase in consumers actively looking at properties. The reported sales component, however, dropped five index points to 12 from the previous quarter's 17. The drop in the reported sales component pushed the overall 55+ HMI down from 16 to 14.

The 55+ HMI is a diffusion index, derived from quarterly surveys of builders and developers designed to study builder sentiment on single-family housing and both multifamily condo and rental conditions. The survey asks builders to rank their perceptions of the current sales conditions, prospective buyer traffic, and market expectations for the next six months as "good," "fair," or "poor."

Despite difficult market conditions, builders who specialize in this sector are seeing more prospective buyers coming through their doors according to the survey. Builders exhibited guarded optimism as they look forward six months.

Economist Crowe explained that "the current market still presents significant obstacles to homeowners who need to sell an existing home before buying a more appropriate one. That situation is holding many mature consumers back from moving."

"With the return of a more stable, healthier housing market, the pent-up demand for housing with the features and amenities that appeal to Baby Boomers will keep builders in this sector busy for years to come," noted Crowe.

Link: Mature Home Market

Posted by Customer Service on June 12th, 2009 9:11 AMPost a Comment (0)

As the Foreclosed Move Out, First-Time Buyers Move In

June 5th, 2009 11:46 AM

As the Foreclosed Move Out, First-Time Buyers Move In

Reported by Damien Cave, New York Times

While her Florida friends ran up credit card debt and bought show homes beyond their means, Taina Goldman, saved for a down payment. She moved back in with her parents, sharing a room with her young daughter ate in and worked two jobs.

Now, she is reaping the rewards. She and her daughter recently moved into a three-bedroom, two-bathroom ranch-style house, with a pool, after putting 20 percent down and persuading the seller to cover most of her closing costs. She paid $187,000 for a house that sold in July 2006 for $370,000.

And there are many more like her. Declines in real estate values are reinvigorating a group of buyers previously priced out: middle-class families with steady jobs, who are often buying a home for the first time.

Figures released by the National Association of Realtors show that sales of existing homes across the country are rising; 5.1 percent in February alone. Much of the increase was concentrated in foreclosed homes bought for less than $300,000. Even with tighter borrowing restrictions, many families used to renting are discovering that they can afford to own.

"They are the most active participants right now because they don't have the burden of having to sell their old homes," said James Diffley, a managing director at IHS Global Insight, a research firm. "You have a bunch of young people who were forced to sit on the sidelines because houses were so darn expensive, and now they're starting to come in."

The addition of a tax credit of up to $8,000, part of the federal housing rescue plan passed in February, appears to be sweetening the pot for some of those buyers. In many cases, agents say that these first-time buyers are receiving loans insured by the Federal Housing Administration (FHA), which allow for lower credit scores and a down payment of only 3.5 percent.

Unlike the subprime mortgages, FHA backed loans require documented income with pay stubs and W-2 forms that are verified by the underwriter. Their debt-to-income ratios must fall within mandated guidelines.

Ms. Goldman said she feared that the drop in prices would draw back the same investors who created the housing bubble in the first place. Real estate agents said this was already happening. They say that the wave of foreclosures and evicted families would most likely continue providing opportunities for families like Ms. Goldman.

Link: First-Time Buyers Move In

Posted by Customer Service on June 5th, 2009 11:46 AMPost a Comment (0)

US new home sales edged higher in April

June 4th, 2009 8:17 AM

US new home sales edged higher in April

WASHINGTON (AFP) - Yahoo! News reported good news this week for the area's real estate market.

Falling home inventories and an uptick in sales last month could foreshadow a brighter summer for the housing market.

US new home sales edged slightly higher in April and house prices have increased, the government said this week in a report showing modest improvement.

The Commerce Department reported sales of new one-family houses in April rose to a seasonally adjusted annual rate of 352,000 units, a gain of 0.3 percent above the revised March rate of 351,000 units.

Last month's sales rate was 34.0 percent lower than one year ago in April. Compared with January's record low for the data series, begun in 1963 with 329,000 units, sales were up 7.0 percent over the three months.

The new home sales data followed a National Association of Realtors' report Wednesday of an unexpectedly strong 2.9 percent increase in sales of existing homes, the dominant sector in the residential market, as falling prices attracted buyers.

The Commerce Department said the median sales price of new houses in April rose 3.7 percent, to 209,700 dollars, in April from March, but was 14.9 percent lower than a year ago.

The glut of new houses on the market continued to fall as early spring buyers scooped up housing bargains.

Residential construction plunged 4.2 percent, compared with the end of March, and was down 35.4 percent from a year ago to a pace last seen in 1963.

The number of new houses for sale fell to a seasonally adjusted 297,000 units at the end of April, the lowest level since May 2001.

At the current sales rate it would take 10.1 months to buy the entire inventory on the market. That was down from a 10.6-month supply in March and a peak glut at 12.4 months in January.

Link: Home Sales

Posted by Customer Service on June 4th, 2009 8:17 AMPost a Comment (0)