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GUIDELINES TO GET THAT DOWN PAYMENT READY - Austin Real Estate

Austin Texas Homes: Buyers are frequently instructed to first deposit earnest money using the actual seller if they make a good offer. If for example the offer is acknowledged, the earnest cash is and then credited for the down payment. The amount differs broadly with the seller and local custom, however prepare yourself with the start to obtain finances ear marked for a home purchase.

The down payment is actually usually depicted while the ratio regarding this general purchase rate of the house, as well as can vary depending upon any financial institution, the variety regarding financing and amount for funds loaned. In the past a standard down payment had been 20 percent, but in modern several years loan merchants currently have already been eager to offer up regular financing with as minimal just as 3 percent down. Federal financing programs, such as those offered through the Veterans Affairs or the Federal Housing Administration additionally have extreme low down payments.

Sometimes in the event that your down payment will be significantly less than 20 percent of the purchasing price, loan companies may want you to be able to have private mortgage insurance. This kind of insurance coverage protects the lender in case from mortgage default and usually entails an amount during closing as well as a regular premium. Once you have paid off 20 percent associated with the mortgage loan you can easily consult the lender that the policy be terminated. A few banks stop this premium immediately even though other people require a person to be able to get the request in writing. (Austin Texas)

When a person tends to be having problems saving enough cash numerous lenders will allow an individual to use gift funds for the down payment. Your gift will come from family members, friends or other places, but remember that loan companies commonly require a gift letter stating the actual gift does not have in order to be paid back. A few lenders will additionally need you in order to pay at the least the portion associated with the down payment along with your own money. In the event that a person plans to use gift money in order to purchase a home inquire with your bank about their own policies concerning gifts.

You will need to save to get some other fees affiliated along with the loan. Identified as closing costs these expenses cover things for example title insurance, loan origination fees, documentary stamps, loan origination fees, attorney's fees, and survey. Whenever you submit your own loan application banks tend to be essential in order to provide a person with the actual good faith estimate regarding your own closing costs. (Austin TX Homes for Sale)

Some buyers tend to be astonished through the amount associated with the actual closing costs that can run into the realm of thousands of dollars. Keep in mind, that if closing costs can be discussed with the particular seller. As an illustration, you may agree to pay the full asking price in exchange for the actual seller paying all the actual allowable closing costs in case your liquid cash is low.

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Have The Finances Ready?

Austin Texas Real Estate: Do not buy the cart before the horse which is a common mistake with Buyers. The first step in finding your new home is knowing the big picture of your financial situation. Getting a feel of your income, debts, and expenses you will have a better idea of how much to borrow and what you can afford.

Institutions need this information so they are going to look at your home records. Plus you should include financials for every person involved in the purchase of the house. Below are some documents that need to be prepared for the lender:

Bank Statements: Lenders will need copies of your bank statements. They need proof of money that you putting down unless it is a gift. Bank statements are need for all parties especially if you are married.

Paycheck Stubs: Banks are interested in your average income. They want to see your monthly paycheck but how much you have earned in the last two to three years. Regular employment is also more important to lenders so have good reason if you have moved around on multiple jobs.

Tax Records: Always keep the last five years of income tax records for lenders and in case you are audited. What is important about tax records is that lenders can get an exact idea of your income to your expenses. This falls into your debt ratio which is an important formula for loan approval.

Credit Report: Every financial institution will need to see your credit report for the loan application process. It lists all of your debts your history on how timely you are with payments. The credit report and application are very important part of the process.

Dividends and Investments: Lenders will consider your investment portfolio and long investment dividends are very helpful when other items above are not as good when evaluating your income.

Alimony and Child Support: Payments for child support or divorce settlement are included income. Lenders will want to see a copy of your divorce settlement as proof of payments payments.

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Credit History

Lenders will need to see a copy of your credit report. It will have all your long term debts like mortgage, credit cards, automobile and loans as well as your payment history.

It is a good idea to obtain a copy of your credit report months before you apply for a loan so you can find possible problems with your credit before you get pre-approved. Federal law guarantees that you have access to your credit report that can be obtained from the website or national firms that handle credit reports.

Credit Report Errors
Credit reports often contain errors or wrong information. If this is an issue you will need to contact the reporting creditor to have the problem resolved and can be a slow process so be patient.

Late payments
Majority of problems with the credit report are related to late payments. With a history of late payments you will need to document the reasons. A slow payment history will not always get you turned down for a loan but you could have to pay a higher rate of interest.

Bankruptcies and foreclosures
Bankruptcy on your credit report is not a good thing but that doesn't mean you still can't obtain a loan. It may stay on your credit report for 7 to 11 years lenders will consider the circumstances surrounding a bankruptcy. If you have re-established good credit since the bankruptcy a lender will be more interested to approve your application.

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LOANS

Austin Texas: Buyers have choices for loans. There are many types of loans but here are a few that are popular in the real estate industry.

While the choices may seem overwhelming the goal is really simple. You need to find a loan that works with current financial situation and your future goals. This article discusses common loan types you should talk about with lenders to decide the right loan for you.

Categories
Loans fall into 3 categories: adjustable rate, fixed rate and hybrid loans with a combo of both.

Adjustable mortgages differ from fixed mortgages since rates and monthly payment can change. Since the rate for an adjustable is connected to the Treasury Securities that fall or rise over time. Adjustables usually have caps or limits so the rate does not rise above a certain adjustment With low introductory rates adjustables are the most accepted alternative to fixed rate mortgages. 

Fixed rates carry the same rate for the complete. These mortgages have been popular among buyers, because the fixed payment is to budget. Fixed rates are common in 30yr and 15yr terms but lenders have offered 20yr and 40yr loans.

Hybrids combine features adjustable and fixed. Hybrids start with a fixed rate for a length of time and later change to an adjustable. Some hybrids do not have rate caps for the first period.

Balloon Payment
Balloon payment is a loan with a large final payment at the completion of the loan - ie after 7 years of payments the remaining balance is paid off.

Time
If you stay in a home for 10 years or more a traditional fixed rate will be your best choice. If you own a home for 5 years or less then the adjustable will make the best financial sense.

Conventional Loan
A conventional loan is offered by a private lender. Conventional loans are harder to qualify for than government loans, they have less paperwork and do not have a maximum amount. 

VA and FHA
Government loans like FHA and VA are designed for home ownership for people who may not be able to qualify for a conventional. FHA and VA loans have lower ratios than conventional loans and require smaller down payments.

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Austin Texas Real Estate Closing Costs

Fees for buying or selling a home are called closing costs. These fees are assigned to either the buyer or the seller and some costs are negotiable.

Seller’s Costs
The seller’s most important closing cost is paying off the remaining amount of their loan. Before the closing, the escrow officer will contact the lender for the amount needed to close out the loan. Other costs include transfer taxes, title insurance, prorated property taxes, doc stamps on the deed and broker’s commission.

Buyer Costs
Lenders provide the buyer with a good faith estimate of their closing costs. The fees vary to many factors including the type of loan and the terms of the purchase contract. Some of the closing costs paid in advance. Other buyer closing costs include title insurance, down payment, pre-paid insurance, doc stamps on the note, loan fees, hazard insurance and mortgage insurance.

Prorations
Certain costs are often distributed between buyer and seller. Prorations are for property taxes because property taxes are paid at the end of the year when assessed. If a home is sold in OCT the sellers will have lived in the house for eight months and the taxes will not come due until the following year. The taxes are prorated to for the amount of time the seller has lived on the property in comparison to the buyer for the year.

Negotiating Costs
Escrows can include closing costs in their negotiations. An example would be if the buyers did not like the carpet and request the seller pay for the replacement but would like to choose the brand and color so the seller releases the amount to the buyer. Also if a buyer is short of funds for repairs they may pay full price and but receive the necessary amount at closing.

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Real Estate Refinancing

Austin Texas Real Estate: Refinancing your home can be a good way to bring down your mortgage payment, raise money or merge debts with high interest rates. However, you need to do your homework before deciding to refinance. One important factor is the difference between current interest rates and the rate of your original loan. Also homeowners need to take into account the amount of time it will take to recoup the costs of refinancing.

When to refinance

You should refinance your home if interest rates fall more than 2 points below your existing mortgage rate because refinancing usually involves most of the same closing costs as the original loan. Anything less than 2 percent the savings on your monthly mortgage payment might not be significant enough to be worth your while.

Is it worth it
If it costs $4,000 to refinance a house, and the monthly mortgage payment is lowered by $120 it would take almost 4 years for the savings to cover the costs of refinancing.

In addition, you may be able to roll the closing costs of a refinance loan into the new note. You don't avoid the closing costs, but instead pay them back over time along with the rest of the loan. Refinancing usually lengthens the time it takes to pay off your house. If you are 2 years into a 30-year mortgage and then refinance with a new 30-year loan you'll end up making payments on the house for 32 years. If the monthly savings are substantial enough you still could end up paying much less over the long haul with the new loan.

Adjustable Rate Mortgages

Rising interest rates might influence you to covert your ARM into a fixed-rate loan if you plan to stay in your house for several more years. You may plan to move in a year or two and find a lender who is willing to offer you dramatic interest rate savings with an ARM. In this case it might make sense to switch from a fixed-rate loan to an ARM.

Equity
With enough equity you can refinance in order to take cash out of the property. Lenders will typically allow you to borrow against the equity you've built in your house. These types of loans are also called home equity loans.

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Erasing Government Programs That Slow the Recovery of the Real Estate Market

Austin Texas Real Estate:  Republicans are planning to kill several White House plans aimed at keeping borrowers close to foreclosure in their homes.

The plans on the being threatened include the Home Affordable Modification Program, the Neighborhood Stabilization Program, the Federal Housing Administration Refinance Programs and the Emergency Homeowner Relief Fund and would save about $38 billion.

The mortgage modification program has faced criticism because of the lack of success and is only delaying what needs to happen plus slowing the recovery. The constant delay could force the real estate market to delay for years. The natural cleansing of the capitalist market needs to take place with artificial delays.

Another other issue at hand is fining numerous banks for robo signing. If the government does succeed in fining the banks this will incite litigation among millions and delay more foreclosures that will happen over time anyway. This will freeze up banks equity because they cannot clean their books and will need reserves for litigation.  All this forces the banks to work on their internal safety rather than producing more loans to help the market recover. 

Always let the market naturally correct itself and do not interject money programs to try to heal the downfall because all that is left is less government funds and a slower recovery.

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Don’t Touch That!

The Presidents recently released budget plans to reduce high income earner’s tax deduction for mortgage interest payments. The plan is for taxpayers in the 33% and 35% tax brackets would only be able to deduct their mortgage interest payments at the 28% rate. It would affect those with taxable income of $250,000 and up and bring in $321 billion over 10 years. Commissions have called for eliminating the deductions in the past. But the proposals have gone nowhere and the same outcome is expected this year. The real estate industry for the mortgage interest deduction are making it clear to both Congress and the White House that they strongly oppose any limits to the deductions. The real estate industry is concerned that capping the deduction will hurt the housing market from rebounding. By curtailing the deduction costs the Treasury Department would raise an estimated $131 billion a year and it would also cut the size of eligible mortgages up to $500,000. This is not good for real estate agents but hopefully the NAR will stand up against these new proposals.

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Real Estate News and Tools - New and Revised Computer Tablets Hitting the Market for 2011

Austin Texas > Technology > Real Estate: There is lots of news for the computer tablets which are useful for agent in the field and for listing presentations. No more of decade old listing books with slicks and brochures.

HP released it tablet that is based called TouchPad, looks similar to Motorola's Xoom or Apple's iPad. It has a black case and 9.7-inch touch screen, and it weighs 1.6 pounds, which is about the same as Apple's iPad. But unlike tablets from competing hardware makers, HP uses its own operating system, called WebOS.  The platform Palm OS has been developing and is also the source for the Blackberry Tablet. No price yet.

Motorola’s Xoom will be released on Feburary 24^th. It has an Android 3.0 with a 10.1 inch HD wide screen, a front and rear camera and camcorder. Some got a sneak peak of the tablet from the super bowl commercials. It is expected to be compatible with WIFI and data plans. The tablet is estimated to be $700 which will make it a hard competition to the iPad.

The good news is that the TouchPad and Xoom can handle Adobe Flash unlike the iPad.

Big news is that Apple has already started producing a new iPad with a faster processor, HD camera, USB and SD card slot. Hopefully it will be released in the spring with a similar price range of the current iPads. Also they will be producing a smaller 7 inch iPad to compete with the Android tablets currently on the market.

Expect a lot of growth and changes in this area for 2011 and an impact on how we use these devices in real estate.






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New Home Sales Jump to an 8 Month High!! What?? Double Dip in Home Sales!!

Austin Texas: New home sales rose 17.5% in December to the highest level in eight months but compared with 2009 sales are down 7.6%.

The media enjoys the emotional rollercoaster by declaring new home sale are at an 8 month high but leaves waits a few lines to compare with the poor stats from the year before.

Now comes November 2011 home prices continuing the slump falling 1% compared with October.

Elected government officials continue to repeat that the economy is rebounding and worst is past. The signs show a double dip recession heading our way. Plus the CBO estimates that the government’s debt will be over 1.5 trillion for 2011. See what the numbers were that sent Greece and Europe over the edge and it should raise the hair on the back of your neck.

The bank needs to release their holdings and offer better loans. The government needs to reduce capital gains tax, step away from government health care, unfriendly business regulations and reduce excessive spending.

If this is done then the fear of a double dip recession should fade away – hopefully since the real estate market is a major sector of the US economy and it needs to be nurtured.


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December 2010 Austin Texas Real Estate Statistics

Austin Area Real Estate Maintains Sales Volume Trends, Price Stability

Austin Board of REALTORS® Releases November 2010 Real Estate Statistics

December 20, 2010 - According to the Multiple Listing Service (MLS) report released today by the Austin Board of REALTORS®, the Austin real estate market continues the trends seen in recent months as the year begins to come to a close. 

The volume of Austin area home sales in November 2010 was 1,243, down 20 percent from the same month in 2009. Year-to-date, 16,477 homes have been sold, down only six percent compared to the same time period in 2009. 

Austin real estate also continued to hold value. For November 2010, the median price for single-family properties was $184,000, up three percent from November 2009. Year-to-date, the median price is $194,000, also up three percent from 2009. 

Homes spent an average of 90 days on the market in November 2010, 17 percent longer than in November 2009. Year-to-date figures show that overall homes have spent four percent fewer days on the market than in 2009. 

“As has been the case for much of 2010, year-to-date figures paint a clearer picture of market conditions than month-to-month comparisons,” said John Horton, Chairman of the Austin Board of REALTORS®. “That’s particularly true this month because we’re comparing results to a month in 2009 when the original homebuyer tax credits were set to expire, before a last-minute decision extended them through the first part of 2010.” 

He continued, “Despite the fluctuations created by the tax credits in 2009 and 2010, Austin’s real estate market has remained stable. Austin homes are holding their value—even slightly increasing—and year-to-date, they have sold more quickly than in 2009.” 

November 2010 Statistics

• $311,567,894 – Total dollar volume of single-family properties sold, down 16 percent from November 2009

• $184,000 – Median price for single-family homes, up three percent from November 2009

• 1,243 – Single-family homes sold, down 20 percent from November 2009

• 90 – Days on market, up 17 percent from November 2009

• 8,741 – Active single-family home listings on the market, up two percent from November 2009

• 1,260 – Pending sales for single-family homes, up two percent from November 2009

Year-to-Date 2010 Statistics

• $4,180,249,992 – Total dollar volume of single-family properties sold, down one percent from 2009

• $194,000 – Median price for single-family homes, up three percent from 2009

• 16,477 – Single-family homes sold, down six percent from 2009

• 76 – Days on market, down four percent from 2009

• 10,337 – Active single-family home listings on the market, up nine percent from 2009

• 18,495 – Pending sales for single-family homes, down six percent from 2009

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Massachusetts Court Foreclosures Invalid

AUSTIN TEXAS REAL ESTATE: A Massachusetts court ruled on Friday that some foreclosures are invalid because the banks could not prove they had the proper paperwork.

This will be a precedent of things to come because it is the first ruling by a state court on the issue of whether banks can foreclose on homeowners if can't prove they hold the mortgages.

Mortgage loans are like real property and can only be transferred by physically signing over the paperwork delivering it to the next holder. Under mortgage securitization loans get transferred many times after origination before landing in pools of mortgages that are sold to investors. But often times the banks simply didn't endorse the paperwork between steps.

Overall foreclosing entity must hold the mortgage at the time of the notice and sale in order accurately to identify itself as the present holder in the notice and in order to have the authority to foreclose under the power of sale.

The banks got sloppy with their paper trail and paid the price in the court room. This should be an eye opener for the banks to start digitally storing their contract and documents so the location and accessibility to the data is not lost.

Hello 5% Interest Rates for 2011

Austin Texas:  The days of near 4% mortgage rates has ended after a rate rise since November 2010. Is this going to be good or bad?

30-year fixed mortgage rate has risen to 4.82% from 4.15%, according to Freddie Mac's weekly mortgage market survey. In another survey, the rate has risen to 5.02% -- crossing the 5% benchmark for the second time in three weeks after being as low as 4.41% as recently as early November.

Forecasters now predict them to remain between 5% and 6% for all of 2011.

The increase will push mortgage payments higher for buyers. When rates rise from 4% to 5% it takes away about 10% of buying power.

Higher interest rates may stimulate the quiet housing market which has not bottomed out. The rise introduces an element of urgency for homebuyers to rush before rates spurt even more.

The main problem in the real estate market is that banks to streamline their underwriting process and start releasing their funds to issue more loans and to be less stringent.

If lenders return to more normal underwriting standards for creditworthy buyers and there would be a boost to the housing market.