Market Update : new home

It Is Getting Harder to Buy a House

Liane Thomas — Tue, 08 Dec 2009 15:59:00 GMT

FHA to toughen rules for borrowers

The Federal Housing Administration (FHA) is proposing raising minimum credit scores for borrowers who receive FHA-backed mortgages, increasing down payment requirements, and limiting the amount of money sellers can provide toward closing costs. The proposed changes are part of an effort to shore up the agency's finances, which have been hit with rising defaults to its mortgage insurance program.

So what does this mean to you?

Historically, the FHA has played a critical role in propping up the housing market by insuring lenders against default after the mortgage market failed. Currently, the agency guarantees approximately 30 percent of all home loans and 20 percent of refinancings. In the past, the FHA has resisted raising down payments or insurance premiums, fearing it would be shutting out qualified borrowers and stunting the housing market's recovery.

The FHA is hoping that the proposed changes, including requiring that borrowers bring more cash to the closing table, will ensure that borrowers are less likely to default on their loans. Officials at FHA have yet to determine how much cash will be required.

Up-front cash can include down payments as well as other payments. Currently, FHA borrowers can put down as little as 3.5 percent. One lawmaker has introduced legislation that would require FHA borrowers to put down a minimum of 5 percent. The agency also currently allows sellers to provide up to 6 percent of the home's value toward closing costs or down payments. Secretary of Housing and Urban Development (HUD) Shaun Donovan has said he wants the maximum permissible level to be lowered to 3 percent, in line with industry norms.

The FHA has decided "for the time being" to raise its minimum credit score requirements for new borrowers. The new requirements have yet to be determined. Presently, borrowers with credit scores as low as 500 may qualify for an FHA loan.

So if you are thinking about buying a home in 12-18 months, and you plan on using an FHA loan, you might want to consider moving that plan up and buying sooner rather than later. It may cost you a lot more next year.

Brought to you by:

Liane Thomas, REALTOR®
The Thomas Group, Keller Williams Realty
1860 Compton Avenue
Corona, Ca 92881
Serving Corona, Norco, Riverside, and Surrounding Communities
951.454.3805
www.AllCoronaHomes.com

For Sale: 4 Bedroom Home Corona Sycamore Creek

Liane Thomas — Tue, 03 Nov 2009 20:35:00 GMT

Wow! This is the one you have been waiting for! A standard sale in the Sycamore Creek community in Corona, Ca. This home is over 3000 square feet, has 4 bedrooms, 3.5 bathrooms, a 3 car tandem garage, extra large master suite, granite in the kitchen, and so much more. This home has never been lived in, and will sell fast. Not a short sale, not a repo, no waiting, fast response from seller! Call today to see this one today 951 454-3805.

Liane Thomas
The Thomas Group, Keller Williams Realty
1860 Compton Ave
Corona, Ca. 92881
www.AllCoronaHomes.com
(951) 454-3805 cell

Do YOU Want $8000?

Liane Thomas — Tue, 14 Jul 2009 14:05:00 GMT

Would You Like $8,000? Buy a Home. Soon!

To stimulate the economy, Washington juiced up the stimulus plan passed last year in February. Two benefits for FTHBs (First Time Home Buyers) were that the amount of the tax credit was increased from up to $7,500 to $8,000. And, more importantly, the amount of the credit does not have to be repaid!

To qualify for the credit the individuals buying a home cannot have owned a home in the last three years. So, while the credit is discussed as a credit for first-time buyers, anyone who has not owned a home in the last three years is eligible.

There are income limitations to fully qualify but they are quite liberal. Single tax filers earning up to $75,000 and joint filers earning up to $150,000 based on modified adjusted gross income can earn the full credit. A partial credit is available for those earning up to $95,000 and $170,000 respectively.

The amount of the tax credit is based on a percentage of the price of the home, specifically 10% of the purchase price, up to $8,000. This means if someone purchases a home for $70,000 their credit would be $7,000 and if the amount of the home purchased is $100,000, the credit would max out at $8,000.

Note! The deadline to take advantage of this opportunity is November 30, 2009. Close in December, and you just lost $8,000.

Homes Have Never Been More Affordable
FTHBs are leading the way, taking advantage of one of the best home buying opportunities ever, providing support for the real estate market. As indicated earlier, FTHBs have accounted for as much as 53% of purchases for any month this year.

Who can blame them? In short, no one. Home prices have fallen to levels not seen in years and interest rates hit their lowest point ever. This combination led to the highest home affordability ever recorded.

The National Association of Realtors® tracks what is known as the Home Affordability Index. The Home Affordability Index is arrived at as a function of both median home prices, available interest rates, and median family income.

The index represents the amount of monthly income that is required to pay a mortgage payment. In 2005, approximately 23.3% of a family's monthly income was required to carry a mortgage payment. With falling home prices and interest rates, the percentage of monthly income required to pay a mortgage payment is now approximately 15%.

This means that for a family at the median income level purchasing a home priced at the median income level, the monthly mortgage payment has declined nearly 36%! This is great news for anyone shopping for a home today.

You can take advantage of the low down FHA program, and combine it with this tax credit!

Get Busy, Time is Short!
In order to take advantage of both the available tax credit and low interest rates, anyone going into contract should strive to have their purchase agreement not later than mid-October. This will allow some time cushion in the event anything pops up in the purchase process and still allow for closing in time to take advantage of the available tax credit.

Home prices have fallen to levels not seen since the start of the decade in many parts of the country, interest rates are still near all time lows, and the availability of free money from the IRS all mean that the time to act is now. It is always easy to look back and identify times people should have acted, and this could well be one of those times people will look back and say, "Wow, I should have bought a home in 2009!"

Brought to you by:

Liane Thomas, REALTOR(R)
The Thomas Group, Keller Williams Realty
Serving Corona, Norco, Riverside, and surrounding communities
www.AllCoronaHomes.com
951.454.3805

CNN Says Housing Market may be Stabilizing!

Liane Thomas — Sun, 05 Jul 2009 21:20:00 GMT

CNN is searching for a bottom in the housing market

With consumer confidence rising in May to its highest level in eight months, housing starts increasing more than 17 percent in May compared with the previous month, and sales of existing homes climbing 2.9 percent in April nationwide, it appears that the housing market may be stabilizing.

So what does that mean to you?

Although sales of existing, single-family homes rose 35.2 percent in May in California, compared with a year ago, the median price declined 30.4 percent during that same year. Some industry analysts predict that as specialized adjustable-rate mortgages, known as option ARMS and Alt-A mortgages, reset over the next 18 to 24 months, prices could decline further before stabilizing.

"We are seeing strong buying activity, particularly in those boom and bust markets, where prices have declined significantly. Buyers are coming in and fighting over properties -- there is multiple bidding in California and Florida," says Lawrence Yun, chief economist with the NATIONAL ASSOCIATION OF REALTORS(R).

Sales of existing homes are soaring as many investors and first-time buyers purchase distressed properties. Yun estimates that about 50 percent of current sales involve distressed properties, and he expects the trend to continue as foreclosures rise in the months ahead.

Although some economists predict home prices will continue to decline in the coming months, California'ss median home price rose for the third consecutive month in May, posting the largest monthly increase on record for the month of May.

Some buyers are trying to time the bottom of the market and purchase once it appears that prices are consistently and steadily rising. Many housing forecasters advise against this approach as buyers should not view their homes solely as investment opportunities. Historically, the average annual rate of return on a home lived in for five years or more is nearly 12 percent, based on data C.A.R. has collected over the last 40 years.

If you are thinking of selling your home, now is an excellent time with low inventory and the seasonal spike we get this time of year. Even if you are underwater on your home, like so many families, we'd like to help you find a solution. Call for a free consultation. Thanks!

Liane Thomas, REALTOR(R), CDPE
The Thomas Group, Keller Williams Realty
Serving Corona, Norco, Riverside, and Surrounding Communities
www.AllCoronaHomes.com
951 454-3805

California Running Out of $10,000 Tax Credits for New Homes

Liane Thomas — Sat, 20 Jun 2009 09:56:00 GMT

First-time home buyers wanting to take advantage of the state's $10,000 tax credit may have less time than originally expected. California set aside $100 million to help home buyers purchase newly built homes, hoping to jump start the residential-construction market. According to state officials, the tactic has worked well and is helping to entice home buyers into the market. However, there only is approximately 20 percent of the program?s funding remaining.

The program launched in March, and as of June 3 nearly $24 million in tax credit certificates already had been issued, according to the state's Franchise Tax Board, leaving nearly $76 million in credit available. Many applications still are in the pipeline awaiting approval. If all of the submitted applications are approved, only $17.5 million would remain in the fund.

The California state legislature is considering adding another $200 million to the program. However, securing approval may be difficult due to the state's estimated $24 billion budget deficit. A bill to extend the program already has won Assembly approval and now is awaiting activity in the state Senate.

So what does this mean to you? If you are considering buying a new home, you need to move fast! If you are a first time home buyer you, and you have completed the home buying process before 12/1/09, you could cash in on a much as $18,000 in tax credits. Need help finding you home? Call or email us! We offer a free service to get you in touch with a professional in your area who will help you find you home AND secure your tax credit!

Thanks!

Information provided by:
Liane Thomas, REALTOR(R), CDPE
The Thomas Group, Keller Williams Realty
Serving Corona, Riverside, Norco, and surrounding communities
www.AllCoronaHomes.com
www.FreeRiversideHomeSearch.com
951.454.3805