Federal Housing Administration loan changes now in effect

FHA-Approved-Lender-SealIf you’re a buyer utilizing an FHA loan and you’re not already under contract, your FHA loan is now more expensive. How? Because the mortgage insurance is now scheduled to last for the life of your loan.

It used to be that your mortgage insurance would drop off (you’d probably have to request that it be removed) once you achieved 22% equity in your house. That’s no longer casinos francais en ligne the case, as that mortgage insurance is now in place until you pay off the entire mortgage.

If you were looking at an FHA loan, you might consider a NIFA loan – as of this writing (June 6), the rate is considerably lower than the current FHA rate. There are some income guidelines and a handful of other rules you need to know, but the NIFA loan will make a significant difference in your monthly payment. It’s worth exploring – talk to your lender about it and see if it makes sense for you.

The PRICE Is the Same, But the COST Is Less

From KCM Blog:

There is more and more research coming out showing that it makes great financial sense to purchase a home today . Whether it be rent vs. buy ratios, income-to-price ratios or income-to-mortgage payment ratios, purchasing a home right now is a bargain compared to historic norms. Now we want to look at the COST of a home today compared to pre-peak prices.

According to the most recent S&P Case Shiller price index, residential real estate values have returned to 2003 1Q PRICEs. That, in itself, says something. However, when you factor in mortgage rates, the case for buying a home today becomes even more compelling.

In 2003, 30 year mortgage rates stood at 5.88%. Today, they are 4%. How does that impact the actual COST of a home? On a home purchased for $250,000, here is the difference in monthly cost:


That means you save $285.30 a month, $3,423.60 a year and $102,708 over the life of a 30 year mortgage! You buy the home for the same PRICE but the COST is over $100,000 less.

Bottom Line

This is why so many financial advisors are saying that this may be one of the greatest times in history to purchase a home.

Local home sales down, but parts of market doing well

Local home sales have fallen behind last year’s pace, after being up for most of this year because of the homebuyer tax credit.

As of Aug. 31, there had been 2,490 home sales through the local Multiple Listing Service, which covers Lancaster and parts of surrounding counties. That’s down more than 5 percent from the same period last year.

Through the first two quarters of the year, home sales were up 13 percent over 2009, but sales have dropped off sharply in July and August, down more than 50 percent compared with the same months last year.

That’s largely because of the expiration of the federal tax credit of $8,000 for new homebuyers and $6,500 for repeat homebuyers. The credit expired at the end of April, and buyers had until the end of June to close those sales.

Despite the sharp drop-off, there are still many positive signs in the local real estate market.

Sales of new homes, which last year eked out their first year-over-year gain since 2003, are up about 6 percent so far this year.

And average sale prices for new and existing homes are up, leading to an overall price increase of more than 2 percent through August.

Realtors Association of Lincoln Executive Vice President Nicole Jensen said in an e-mail last week that those two developments are signs that the market is stable, despite the drop in sales of existing homes.

Another positive sign is the increase in luxury home sales.

HomeServices of Nebraska, which owns Home Real Estate and Woods Bros Realty in Lincoln, said in a news release Wednesday that sales of homes more than $500,000 are up 11 percent this year compared with last.

“Buyers in the upper price brackets are taking advantage of today’s low interest rates,” said Gene Brake, CEO of HomeServices of Nebraska. “They can get more house for less money than they could a couple years ago.”

Mortgage rates have been hovering at historical lows around 4 percent for several months.

Another reason for the jump in high-end home sales is the “move-up” effect.

As new homebuyers used the tax credit to buy lower-priced homes, it allowed the sellers of those homes to “move up” to bigger, more expensive ones.

In an effort to capitalize on the strong demand for higher-end homes, Woods Bros and Home are planning an open house tour of 22 of the more than 60 houses over $500,000 currently on the market.

The tour is scheduled from 5:30 to 8 p.m. Thursday.

Home Real Estate agent Nelda Hunt said the tour gives people a “nonthreatening, fun opportunity” to see some of the luxury homes available.

“Our inventory of luxury homes really cleared out the end of last year and the beginning of 2010,” Hunt said. “Now we have a new influx of homes on the market that are great values, and we want people to come out and take a look.”

Reach Matt Olberding at 473-2647 or molberding@journalstar.com.
Copyright Lincoln Journal Star. Read original article here.

Who’s up for another homebuyer tax credit?

I could scarcely believe my eyes when I read that headline this past Monday morning. Yet that’s exactly what HUD secretary Shaun Donovan suggested in an interview with CNN on Sunday.

The idea is so bad it’s hard to know where to begin. Another tax credit is not going to revive a slow housing market. Yes, we saw increased activity in March and April this year, mostly due to the tax credit, but those were buyers who had planned to buy this year anyway. As we saw when the June and July sales numbers came out, we simply cannibalized our summer buyers and moved them forward to spring. We didn’t stimulate anything, and we certainly didn’t create more demand for housing.

Gimmicks like the tax credit will simply delay the inevitable – the housing market isn’t going to recover until buyers are a lot more certain about the economy. I’d suggest with the current crop of suits in Washington, that won’t be anytime soon. We’re blessed with low unemployment here in Lincoln, but people are still scared about losing their jobs. Those people aren’t rushing into the market to buy a house anytime in the near future. Fear causes people to pull back, and buyers are clearly taking a ‘wait-and-see’ attitude. Even interest rates around 4% aren’t enough to get many to jump off the fence and take the plunge.

Our real estate market has been fortunate to avoid the real estate bubble … but if the feds continue trying to ‘help,’ we’re going to feel the impact a lot more than we already have. Another tax credit is a bad idea … which means we should probably expect the sequel sooner rather than later.

Interest rates are low, and buyers definitely have an advantage now. If you’re considering a move, I’d welcome the chance to visit with you!

It’s a great time to buy a home!

Check out the following story from KLKN Channel 8 on today’s real estate market in Lincoln, Nebraska, featuring our own Miranda Watson.

Welcome to Lincolnshire

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Real estate officials reflect on great first half, uncertain second

By MATT OLBERDING / Lincoln Journal Star

The federal homebuyer tax credits helped propel local home sales in the first half of the year to their highest level in three years.

According to figures released last week from the Realtors Association of Lincoln, there had been 2,001 home sales through the local Multiple Listing System as of June 30.

That’s a more than 13 percent increase over the same period in 2009 and the most since there were more than 2,100 sales in the first half of 2007.

Sales of new homes, which have been a drag on the market for several years, were up even more.

For the year, sales of new homes are up more than 40 percent after increasing nearly 150 percent in June.

Despite the good news, most signs point to a slowdown in the second half of the year.

For the second straight month in June, pending sales – sales that are under contract but have not yet closed – were way down compared with last year.

“As expected, there was a reduction in the number of pending home sales in June, compared to those in June of 2009, due to the April 30 Homebuyer’s Tax Credit deadline,” said Nicole Jensen, executive vice president of the Realtors Association.

The tax credit, which offered $8,000 to new buyers and $6,500 to repeat buyers, expired at the end of April.

Despite continuing closings of sales related to the tax credits, sales of existing homes in June were actually down compared with June of last year – 370 to 396.

“We definitely foresee that the volume of home sales are going to curtail and are going to curtail pretty quickly,” said Kent Thompson, the elected president of the Realtors Association.

Still, Thompson stands by an earlier prediction he made that home sales will be up overall for the year.

“I think that Realtors, as a whole, will have a good year this year,” he said.

Mike Rezac, owner of Rezac Construction and president of the Homebuilders Association of Lincoln, is not as optimistic.

Despite the spike in sales of new homes, permits so far this year are down slightly compared with where they were at this time last year.

While that may not sound so bad, Rezac points out that last year was a 29-year low.

“I don’t see this being a terribly strong year,” he said. “We’re really holding out for next year.”

Not everybody is looking at the market with skpticism, though.

Rita Dinger, a real estate agent for Woods Bros. Realty, says she’s been plenty busy since the tax credits expired.

“I’m having one of the busiest Julys I’ve ever had,” she said.

Dinger said she thinks that all the incentives did was push people to buy a home earlier than they would have otherwise.

And she’s not convinced yet that the slowdown is anything more than typical late summer seasonal drop-off.

There are plenty of people still considering buying a home, Dinger said.

“They’re looking for all the reasons that people have always looked.”

Limited time pricing specials from HomeServices Lending

HSLWaiting to buy a home?

Our new purchase loan pricing special may get you off the fence


When you work with us, you may benefit from our limited time pricing specials with:

  • Lower interest rates on fixed rate purchase mortgages
  • Loan amounts up to $729,750(1) in qualified areas
  • Varied amortization term options
  • Relocation loans eligible


Why wait when you could be taking action?
From historically low interest rates to numerous homes for sale to tax credits for both move-up and first-time buyers(2), we have financing programs to help accommodate a number of budgets and goals.


Contact us for a PriorityBuyer® preapproval

1. Loan limits are based on the median house price for homes in a specific area. Not all areas allow loan amounts up to the indicated maximum loan amount. Conforming loans up to these temporary loan amounts must close and fund by December 31, 2010.
2. Eligible on any home purchase where a sales contract is signed by April 30, 2010 and closes by June 30, 2010. Tax credit does not need to be repaid unless the home is sold or not used as the owner’s primary residence during the first three years after purchase. Please consult a tax advisor.
3. A PriorityBuyer® preapproval is based on our preliminary review of credit information only and is not a commitment to lend. We will be able to offer a loan commitment upon verification of application information, satisfying all underwriting requirements and conditions, and providing an acceptable property, appraisal and title report. Not available on nonconforming products.
Information is for real estate professionals only and is not intended for consumer distribution. This information is accurate as of the date of printing.
All first mortgage products are provided by HomeServices Lending, LLC Series A. HomeServices Lending, LLC Series A may not be available in your area. Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. ©2010 HomeServices Lending, LLC Series A. All Rights Reserved. An Equal Housing Lender. Woods Bros Realty is an affiliate of HomeServices Lending. Please speak to your real estate agent for more information on this affiliation.
#162907 02/10 – 05/10

Cold weather, hot rates

It’s a new year and things are definitely picking up in Lincoln real estate. The cold, cold temps and record snowfalls in December caused a real downturn in home sales. I don’t know about you, but there are not many people who want to interupt their holiday plans and plod through 5-foot snow drifts to look at houses. In November, the Midlands MLS posted 323 homes sold. That number dropped to 162 in December. But things are looking up. Through January 18th, 2010, there were 43 homes sold and 113 “under contract”.

 It’s also important to note that the current low interest rates might not last much longer. Right now it’s possible to get a 30-year-fixed rate at about 5%. However, barring any last minute change, the Federal Reserve Bank plans to stop buying mortgage backed securities on March 31, 2010. That could result in an increase of .5% to 1% to mortgage interest rates (or rates around 6%). Your loan officer can detail this further, but an increase from 5% to 6% on a $100,000 loan (for example) could mean you would be paying at least $50 more a month.

Why buy now?

Aggressive pricing
Record low interest rates
Your buying power will never be greater

As a long-term investment, homeownership is one of the best investments for individual households. All markets including the housing market have their ups and downs. The homeownership market has a track record that is unmatched by any other purchase in terms of its benefits.

If you have good credit, a job and steady income, there are plenty of mortgage lenders willing to underwrite a mortgage loan at good rates. Here is an example of why, dollar for dollar, homeownership is a stepping stone for a future of financial security and the single largest creator of wealth of many Americans.

Over the long-term, real estate has been consistently appreciating, even through periodic adjustments in local markets in response to economic conditions.

Let’s look at purchasing a $200,000 home with 10% down for an investment of $20,000. Consider that you might appreciate 5% per year, and that $200,000 home would be worth $10,000 more the first year of ownership. Earning $10,000 on an investment of $20,000 is an extraordinary 50 percent annual return.

In contrast, putting that $20,000 down payment into the stock market and getting a 5% gain would only yield a $1,000 profit.


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