Feds Changing Guidelines for Risky Loans
The Feds in Washington have taken a long, hard look at higher risk loans and will be announcing changes in the guidelines this Fall. The main objective is to clarify the loan terms in marketing materials so borrowers will understand that their interest rates will vary, thus causing their mortgage payments to increase.
The new guidelines would "force lenders to tighten underwriting standards by avoiding low-documentation loans in most instances and ensuring that borrowers will be able to afford the payments when they rise in the future," according to the National Association of Realtors daily news feature.
Read about it here.All this after reports of
mortgage fraud being on the rise. Mortgage fraud happens when loans are obtained by providing false information.
Gas Prices Up & Housing Summit Coming Up
Someone explain to me why we pay more for gas money when property values are higher.
Today's Tennessean tried to explain:
Higher rents are another factor that leads to higher prices in Nashville and varying prices among neighborhoods, said Randy Bly, of AAA Autoclub South, based in Tampa, Fla.
"Gas stations near a high-rent district pay more for their lease, and it gets passed on into the cost of the gas," [Mike Williams, state director for the American Petroleum Institute] said.
So real estate is to blame for higher gas prices. And competition and other factors. Go read the article if you want to learn more.
Also, the Governor is hosting a Housing Summit to announce new initiatives for affordable housing. According to the Tennessean, the Tennessee Housing Development Agency will announce how it plans to spend $1 million allocated by state legislation to promote affordable housing at this year's conference.
No ThankSSssss
A couple in Idaho made a ssssssstartling discovery when they bought a house to "flip" ... it was full of ssssssnakes! The house was full, the outbuildings were full, and the yard looked alive. Ssssit down,
open this link, and read the MSNBC story. Then try to shake off your heeby-jeebies! Eeek!
Buying a Home: Up-Front Fees
In this land of milk and honey where buyers are now able to buy homes at time with little to no money down, don't think you can walk into a new home with nothing out of pocket. The list below shows what kind of expenses you'll be expected to pay out of pocket right away:
Earnest Money shows you are sincere about buying a home. Earnest money will go into an escrow account and it will be applied to your loan, closing costs, etc. at the time of closing. Sometimes buyers get this money refunded, depending on your contract. How much? Anywhere from $250 to $500 to $1000 is good. The more you can put down, the more serious your seller will consider you. This money is due when you write the contract.
Credit Report is what your lender will pull to see if you're credit is strong enough to qualify for a home loan. The amount varies by lender, but expect to pay between $35-$75 once you are in a "binding" contract and make formal loan application.
Appraisal must be done when you buy a home, unless you're paying cash. This will cost between $300 - $400 and is also paid at loan application to the lender.
Home Inspection is not mandatory but strongly recommended. A home inspector must be licensed by the state and the inspection will cost between $250 and $350 depending on the inspector, size of home, and scope of inspection. You will pay the inspector directly at the time of inspection.
Well Water Test is usually required by lender if the home uses well water rather than city water. The water is tested for safety, ensuring no bacteria causing illness. You can also get an idea if there is sulfur in the water at this time. Cost is approximately $35 and is due at the time of testing.
Septic System will be tested if home is not on city sewer. This ensures that the tank is not full and field is in good working order. Cost if between $150 and $200 and is usually paid at closing.
Termite Inspection is conducted to ensure there are no wood damaging organisms (termites, mold, etc.). The termite company is usally paid at closing and costs $35 to $75. When I represent a buyer, I like to pick the termite inspector so we know the inspection is being done professionally and honestly. Shout out to my guy at Bert's Pest Control - he can be reached at 848-0906.
Mortgage Rates LOW
According to the Associated Press through
MSNBC,
mortgage rates are now at their lowest level in six months. Rates have dropped to 6.4%, down from 6.8% in July.
Home sales have been slow, but according to the article, this is good:
Sharp declines this year in home sales and construction of new homes have provided support for the view that the economy is slowing to a more sustainable pace and eased worries about inflation.If you're thinking about buying a home, experts think the rates may hover in this range the remainder of the year. So it may be time to stop thinking and start doing - you've got 3 months left before 2007!
Home Starts Down in August
Home starts were way down in August, according to MSNBC. The fall was greater than expected - the slowest rate since August of 2003.
According to MSNBC,
"The report came a day after an industry survey showed that home builder optimism sank for the eighth straight month in September to the lowest level in more than 15 years."Read the story here.
How People See Your Home
You must go to this link to see how people see homes for sale. It was posted by
Kerry Woo (aka Wonderdawg), one of the most eloquent, interesting, and entertaining bloggers in the middle Tennessee area. Don't miss it! You'll laugh! You'll cry! You'll book mark it!
HERE IT IS!
Foreclosures Up
Foreclosures were up in the second quarter, according to today's MSNBC web site. The article states that "new foreclosure figure is still low by historical standards and thus not overly worrisome to lenders. But it suggests that some borrowers are feeling pinched."
In addition, the article says, "Sales of both new and existing homes are expected to fall this year — after logging record highs in the previous five years. The housing cooldown is playing a role in the overall economy’s slower growth."
Home Sales Slower in August
For the first time in 15 months, home
sales in middle Tennessee have slowed down, according to the Tennessean. Although sales are slowing and there is more inventory, prices of homes continue the upward trend. In Nashville, home prices have risen 12 percent in the last year. Despite the slowdown, home sales in middle Tennessee are strong.
From Bad to Worse
It's bad when you list your home and it doesn't sell. It's worse when you list your home and buyers aren't interested enough to even come and look. An article was published this week on the CNN news site called
Home Won't Sell! Help!!Sometimes your listing can get lost because of the sheer volume of other homes that are similarly priced. When you are ready to sell your home, ask your agent about the current "inventory" of homes in your price range because you need to know what homes your own house is competing with. Does the guy next door have his home on the market priced below yours? If it's a similar home, his will sell... especially if it's clean and has updates! Know your competition. And be ready to beat it!
Refinancing? It Costs More Here
According to an article in today's
Tennessean, it costs more to refinance a home in Tennessee - we come in 8th place for higher fees. Mississippi and Oklahoma have the highest number of sub-prime loans, which means higher interest rates.
Borrowers face higher interest rates with sub-prime loans because lenders feel they are more likely to foreclose.
Read the article here.
