The current environment in the housing market could not be better for real estate investors. Over the next two years rock bottom interest rates and rock bottom asking prices will create the greatest real estate investor buying frenzy in decades. A full 18.5% of investors polled plan to pay for their purchases in cash!
These investors could create unwanted competition for families planning to buy their dream home. Buyers who are sitting on the fence should take action while inventory levels are high.
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The National Association of Home Builders and Wells Fargo report that a record number of families can afford to buy a home. According to their figures, 74.6% of the homes on the market are priced low enough that a family earning the national median income of $ 64,400 per year can qualify to buy a home. The previous high was the forth quarter of 2010.
This is a far cry from the 20% or so that could afford to buy a home in the 2004 – 2005 period. Rock bottom interest rates contribute to this market condition.
Select this link to read the Inman News story:
When considering a home purchase, are you concerned with how much your daily commute will cost you? With the skyrocketing cost of fuel, many homebuyers are limiting their property search with the goal of minimizing their commute costs. Wouldn’t it be nice to know exactly what those commute costs will be?
Well, there is a web site available to provide the exact answer. Enter your starting point, destination and your exact vehicle data and in just a few seconds, you will have an exact dollar and cents answer!
Select this link to try the site out: http://www.costtodrive.com/
Republicans on the House Financial Services committee have drafted new legislation that will change the face of FHA home loans. Presently, home buyers/borrowers can get a FHA backed home loan with just 3.5% of the purchase price as a down payment. New legislation is expected to rise that to 5%, greatly reducing the number of buyer/borrowers who will qualify for a FHA backed loan.
We do not envision this as a step to helping correct the problems in the housing market. The focus seems to to be limited to reducing the size of government.
The maximum loan amount for FHA backed loans is scheduled to change on October 1, 2011. That maximum loan amount will be reduced nation wide.
Select this link for the complete Inman News story:
Have you been turned down for a HAMP (Housing Affordable Modification Program) loan modification because of the Net Present Value result calculated by your loan servicer?
The U.S. Department of the Treasury and the Department of Housing and Urban Development do not seem to have a lot of faith in loan servicer calculations. Therefore, they have released a program on the Making Home Affordable web site for distressed homeowners to use to check their own net present value. If you come up with a different result than your loan servicer, you have some ammunition to take back to them to make them check their figures.
Now, most people without an MBA would be asking at this point, what in the world is a Net Present Value?
NPV compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account. If the NPV of a prospective project is positive, it should be accepted. However, if NPV is negative, the project should probably be rejected because cash flows will also be negative.This is what investors use to evaluate an investment. In this instance, they are talking about YOUR HOME. If their numbers to not indicate that your home is a prudent investment, they will reject your request for a loan modification.
Now, if their calculations are incorrect you may be able to show them their error and you may yet qualify for a HAMP modification!
If you were rejected for a HAMP modification, you should have received written notification. With the data on that notification you can use to Making Home Affordable web site to do your own calculation.
Select this link to get to that site: