Last week there was a stronger than expected economic data with some sprinkles of higher inflation dust “ this was a little negative for mortgage markets & for home loan rates in Raleigh / Cary, NC. The fear this past week was relating to the demand for US securities from China. This fear caused Raleigh mortgage rates closing the week higher.
So what is up? There were a few points that are noteworthy:
-) The recent trend of improving economic data continued last week in the housing sector.
-) The Philly Fed report revealed a sharp increase in inflation.
-) A Treasury auction for securities which always means a hedge from inflation showed that everyone was concerned about future inflation are seriously growing.
-) Traders worried about a decline in demand for US bonds from China. (Treasury reported that China was a seller of Treasury securities in November. Folks, China is the largest foreign holder of US fixed-income securities¦a sustained drop in demand from China would have a HUGE impact on US bond markets, which part of the US bond market is the mortgage-backed securities (MBS) markets & that is where interest rates come from).
Turn the frown around ” the data was so positive last week¦from the housing sector: December Existing Home Sales rose 12% from November to an annual rate of 5.28 million units, WOW! Then the inventory of unsold existing homes declined 4% to an 8.1-month supply “ YEAH! Here is the number of amazement¦First-time Home Buyers accounted for 33% of existing home sales “ 33%! December Building Permits, which is a leading indicator, rose 17% to the highest level since March. The performance of the housing market varied in different regions “ again Real Estate is local and in Raleigh / Cary we have always been pretty protected from the National story however it is nice to see improvement on the a National level “ this is VERY positive for us here in the Triangle of NC.
If you or someone you know is considering purchasing a home, the combination of low home loan rates and affordable home prices make this an ideal time. Low rates & affordable home will not be here forever ” call or email today to discuss how you can benefit from the current situation.
So what is on tap for this week and why do we care? First, I cannot believe that snow may be in the forecast for us here in Raleigh/ Cary, NC¦.OK, now the biggest economic event this week will be Wednesday™s FOMC meeting. I will be looking for an update on the economy and the Fed™s plans for monetary policy. Important economic data will be Friday™s report on Gross Domestic Product (GDP) “ folks, the GDP is the broadest measure of economic growth. Then before that, New Home Sales will be released on Wednesday. Pending Home Sales, a leading indicator for the housing sector, and Durable Orders will come out on Thursday. Consumer Confidence and Consumer Sentiment will round out the schedule. Then just when you thought you were done, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.
OK, so why do we care¦you see we care because weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.
It is my job as your trusted home loan expert to help you secure the lowest cost of borrowing “ having the pulse on what has happened and what could happen is key. This is how I will get you and all my Clients the lowest cost of borrowing. There is no substitute for an education!
Speaking of Education, I am pleased to report The Brian Hourigan Home Buyer University is helping people every day & it can help you too! There is no tuition required! This is a FREE service to help educate the consumer about buying or selling a home. They are in webinar format or what I like to call online workshops formats; so all you do is, check the class you are interested in, check the time works with you, register and then we will see you at the online workshop.
Here is the schedule for this week:
Zero Down! Fact or Fiction? The Truth About VA Loans! Monday 08:00 PM click here to join now
8 Big Insider Secrets to Building Your Credit Score Fast! Thursday 09:00 PM click here to join now
5 Ninja Strategies to Help You Negotiate Like a Pro! Wednesday 12:00 PM click here to join now
25 Things You Must Know Before Applying for a Mortgage Wednesday 07:30 PM click here to join now
20 Things You Must Know Before Buying a Home Tuesday 07:00 PM click here to join now
The Best Kept Mortgage Secret: USDA Guaranteed! Tuesday 08:15 PM click here to join now
Perhaps one of your friends can benefit from this information or from The Brian Hourigan Home Buyer University Online Workshops ” please forward this to them below via œthe facebook or œvia the twitter ” as always, we welcome your comments above & invite you to call or email us directly.
Great News! If you are a member of the uniformed services, member of the Foreign Service, or employee of the intelligence community, and have served in active duty outside of the US, then you may be eligible for the EXTENDED Home Buying Tax Credit. You must have served for at least 90 days outside of the US between January 1, 2009 and April 30, 2010.
If you qualify, then the tax credit is extended for 1 year. You will need to be under contract on your new home by April 30, 2011 and close by June 30, 2011. All other guidelines pursuant to the current $8,000 and $6,500 tax credit apply.
For more information visit, http://www.irs.gov/newsroom/article/0,,id=215594,00.html .
As always, Happy House Hunting.
Why do people buy a home?
A promotion at work. Getting married. Tired of paying someone elses mortgage.
Regardless of why you are thinking about buying, there are a couple of steps you need to take to prepare for your purchase.
First, you should meet with a REALTOR to discuss your plans. A REALTOR will help you understand your local market and what you can expect from the process. Establishing this relationship when you first begin to think about buying a home will save you time and frustration down the road. By consulting an agent from the outset, you will have access to all homes for sale and you will have an advocate to help you find the right home at the right price. Remember, the agent who has the sign in the yard is working for the seller, do you really want to have them showing you the home? Plus, in almost all cases, buyers can work with their agent for free because sellers pay the commission. To find a REALTOR to work with as your ‘buyer’s agent’, try asking your friends, family, or co-workers if they have someone to recommend. Whatever you do though, make sure you are working with an expert. Afterall, we are talking about the largest investment you will probably ever make, don’t let a part-time agent guide you through this important decision.
Second, get pre-approved for a mortgage loan before looking at any homes. The mortgage industry’s rules, regulations, and guidelines change often, and interest rates change daily. You will want to have a crystal clear picture of your ability to obtain a loan and how much you can afford. By knowing this in advance you won’t waste time looking at homes out of your price range, or even worse, looking at homes when you are unable to buy at all. Your agent should have a great recommendation for you when it comes to speaking with a lender. And remember, if you are going to shop lenders, make sure you do it before going under contract to buy your home. Once you go under contract you need to be moving forward immediately with your loan application and you don’t want to delay the process by trying to set up appointments with multiple lenders at that stage in the game.
Buying a home can be complicated, but it doesn’t have to be. Having great guides to help you through the process is the first step to successfully buying a home. Good luck and happy house hunting!
The Hourigan Real Estate Team
Did you think that you missed out on a chance at the $8,000 tax credit given to first time home buyers? You are in luck! First time home buyers now have until April 30, 2010 to buy their home. In addition, current home owners who have lived in their home for 5 consecutive years out of the last 8 years is eligible for a $6,500 tax credit.
First, let’s talk about the extended $8,000 tax credit for first time home buyers. As stated above, you must be under contract by April 30, 2010 and close by June 30, 2010. To stay safe we encourage buyers to close by the April 30 deadline to prevent any problems or delays which could cause you to miss out on the tax credit all together. Also, a new provision to prevent fraud has been added. When you file your return (either an amended 2009 return or 2010 return) you must attach proof of your purchase. This will likely be a copy of the HUD-1 settlement statement that you receive when you close. Lastly, the income limits for eligible buyers has increased. For a single person the limit increased from $75,000 to $125,000. Married couples went from $150,000 to $225,000 combined income.
Now for the BRAND NEW tax credit for current home owners. If you have lived in your home for 5 consecutive years out of the past 8 years then you are eligible for a $6,500 tax credit. In addition, the buyer(s) must meet the same income limits as above and the purchase price cannot exceed $800,000. The timing of this tax credit is the same as the first time home buyer tax credit so buyers must be under contract by April 30, 2010.
Both tax credits have a “phase out” of $20,000 for the income limits. In other words if a single buyer makes more than $125,000 but less than $145,000, they are eligible for a portion of the tax credit.
If you have other questions about the tax credit please e-mail Brian at BrianHourigan@kw.com .
We are not tax accountants so you will want to consult your CPA to verify your eligibility so that you can make an informed decision.
For more information visit http://www.federalhousingtaxcredit.com/
Want to hear what the IRS has to say? Read HERE
Happy Home Hunting!
The housing market is looking healthier. Here are six reasons why now is the time to jump into the market.
1. Uncle Sam is willing to help. First-time buyers (defined as anyone who hasn™t owned a home in the last three years) are entitled to a maximum $8,000 tax credit; interest rates are at record lows; and the Federal Reserve is doing its best to make mortgage loans available.
2. People have to live somewhere. About 800,000 new households are formed each year in this country, ensuring that the housing market will tighten, even if the economy doesn™t soar.
3. Borrowers leverage their investment. If you put $10,000 into the stock market and it earns 10 percent, you™ve earned $1,000. If you put $10,000 down on a home and its values increases 10 percent, you™ve made $10,000.
4. When prices come back up, you™ll have instant equity. In parts of the country where foreclosures have driven down prices, better times will mean the price of the home you buy will rise rapidly.
5. Mortgage costs stay the same. If you get a fixed-rate mortgage, the monthly payment stays the same “ while everything else, including rent, goes upward.
6. You own it. There is something comforting in the notion that your home is your own. You can paint it any color you want, let the dog run in the back yard and hang a swing for the kids in the front.
Source: The Wall Street Journal, June Fletcher (03/27/2009)
We are in the midst of what could very easily be the best buyer’s market we will ever see. Never before have low interest rates and low prices intersected the way they are right now.
Hey, first-time homebuyer: How does $8,000 from your Uncle Sam sound?
Want an extra $8,000? If you™re a first-time homebuyer then we have a nice surprise for you.
Last fall, the Federal Government introduced a financial incentive to prospective first-time homebuyers ” an income tax credit of up to $7,500. The rules were simple: you must have been a first-time homebuyer (as defined by not owning a home in the previous three years) and you met certain income restrictions.
The new $8,000 tax credit is available to those who buy between January 1, 2009 and December 1, 2009. It™s not a deduction, it™s an actual credit. Unlike the $7,500 first-time homebuyer tax credit introduced last summer; this does not need to be repaid.
First timers who qualify can make no more than $75,000 in adjusted gross income if they™re single or $150,000 if filing jointly. The maximum tax credit is $8,000 or 10 percent of the sales price of the home, whichever is less. Three years residence in the property are required. As always, check with your accountant for details and be sure to submit IRS form 5405 when you file your taxes.
Contact us for more information or to find out how we can help you put this money in your pocket sooner.
Hey guys. I just wanted to share with you my own personal home owning experience to show a real life example of how it can be financially rewarding.
I bought my home 4 years ago for $142,000 with $6,000 in down payment and closing costs. (Note: down payment and closing costs can vary depending on your loan and how you structure the purchase contract. Some of my buyers have actually walked away from the closing table with money in hand). If I sold the house today I’d probably get $160,000, maybe as much as $165,000. However, let’s assume that I sold it for only $155,000. I have $130,000 left on my current mortgage meaning I would be left with $25,000 after the sale.
Now for the deductions. Let’s assume that I wasn’t a Realtor so I had to pay a full commission of 6%: $155,000 x 6% = $9,300. Let’s also assume that I spent $5,000 to make repairs and get the house ready to sell. So $14,300, let’s round up to $15,000, is deducted from my proceeds of $25,000. An initial investment of $6,000 turned into $10,000 in 4 years. That is roughly a 14% return compounded.
And that, my friends, is my example of how home ownership has provided me with a very lucrative forced savings account. I used a very conservative sales price and over estimated my costs to make repairs. But overall it is a pretty fair assessment. We are blessed to be in an incredible Buyer’s Market so 4 or 5 years from now, those who buy in this market could easily have better numbers than I’ve shown above. Let me know when you or someone you know is ready to buy their first or next home. Let me help you begin the path to financial independence.
Want more information? Contact Brian Hourigan with Keller Williams Realty at (919)280-3646. We are happy to help you with all of your real estate needs. To get pre-qualified for a home loan please contact Kevin Martini with SunTrust Mortgage at (919)274-3700 and mention my name in order to be moved into his VIP client file.
Click on the flyer below for a larger version.
I have previously written about the importance of a home seller to have a pre-inspection completed before putting their home on the market. However, after hearing countless agents talk about their deals falling through thanks to lengthy inspection reports, I felt like it was time to reiterate the point.
In fact, I too have had long inspection reports scare a buyer to the point of wanting to exit the contract. I recently had a 25 page inspection report come back on a property that one of my buyers was attempting to purchase. Keep in mind, this was not the full report which includes all of the items that are not faulty…this was the summary of items in need of repair! None of the items on their own were all that bad, but when that many issues show up it’s no surprise that the buyer is concerned. The buyer did in fact exit the contract despite the seller’s agreement to fix the items.
This is a great example of how a pre-inspection could have prevented this sale from falling through. The seller could have repaired many of these items beforehand and then actually held a better position to negotiate later repairs because of the great condition of the home.
In today’s market, buyers have plenty of choices. They are not afraid of walking away from a deal because they know another great home is just around the corner. Sellers need to do everything possible to make their home stand out, and a pre-inspected, pre-repaired home is one way to do just that.
Brian P. Hourigan, REALTOR
After the highly publicized mortgage meltdown this past year, it should come as no surprise that 100% financing is a thing of the past. However, first time homebuyers and others who are “strapped for cash,” still have other options. The biggest dog in the fight for 100% financing is the FHA loan.
The Federal Housing Authority (FHA), insures private loans that require a low down payment. The FHA does not actually make loans, rather they help lenders by insuring loans and reducing the lenders risk. An FHA insured loan typically requires a 3% down payment. However, the great thing about an FHA loan is that the seller can contribute that down payment in the form of a “gift.” This means that a home buyer can still get into a home with virtually no money out of pocket. Given the right scenario, a buyers closing costs and down payment can be contributed by the seller leaving the buyer with little to no expenses at closing.
Those are the great features about an FHA loan, however there are some points that you should be aware of. First, you will be required to pay Private Mortgage Insurance (PMI), both as an upfront cost (built into closing costs) and as part of your monthly payment. Also, because this is a federally insured loan you will have more stringent documentation needed as part of the loan and contract process. It is important that you are working with a GREAT lender when you are obtaining any type of mortgage, but especially when working with FHA.
Please note that the above information is NOT intended as mortgage or legal advice. Consult a competant mortgage consultant for more information about FHA and other types of mortgages. An excellent mortgage consultant in our area is Kevin Martini. Feel free to contact Kevin or myself for more information regarding your next home purchase.
Brian P. Hourigan