Monthly Archives: August 2014

Auf Wiedersehen German real estate? Not so fast | North Salem Real Estate

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As soon as someone mutters the words London property, the word “bubble” is never far away.

London house prices displayed a jaw-dropping 20 percent growth year-on-year in July– even though last week’s RICS indicator showed that the housing market is pausing for breath. Bank of England (BoE) Governor Mark Carney has sounded a warning on tougher mortgage rates and the expectation of higher rates.

But London isn’t the only place which is seeing a dizzying increase in property prices. Look no further than across the channel – to the euro zone’s economic powerhouse – Germany.

Major cities like Frankfurt, the financial capital, Munich with its famous beer gardens and proximity to the Alps and Stuttgart, the home of Mercedes and Porsche, are becoming increasingly attractive as a place to live and work. Germans from rural settings and immigrants are flocking to the cities.

But like in London, an equally potent driver of the property market in Germany is the good old “search for yield”.

 

 

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http://www.cnbc.com/id/101926645?__source=yahoo%7Cfinance%7Cheadline%7Cheadline%7Cstory&par=yahoo&doc=101926645#.

 

How Does a Reverse Mortgage Work | Mt Kisco Real Estate

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A reverse mortgage is a loan that is available for senior homeowners age 62 and older that allows them to access a portion of their home’s equity. The loan generally does not become due until the last surviving homeowner permanently moves out of the property or passes away. The funds from a reverse mortgage loan can be used however the borrower chooses.

The U.S Department of Housing and Urban Development states that reverse mortgage loans “are a special type of home loan that lets a homeowner convert the equity in his/her home into cash. They can give older Americans greater financial security to supplement social security, meet unexpected medical expenses, make home improvements, and more.” Because the Federal Housing Administration (FHA) insures the loan, the property must meet specific FHA standards. The borrower must also continue paying required property taxes, homeowner’s and flood insurance and maintain the home according to FHA requirements. It is also a requirement of the loan to meet with a HUD approved reverse mortgage loan counselor. During this meeting, the counselor will explain the benefits and risks of the loan, the borrower’s expectations and answer any questions the borrower may have.

Eligibility
• The youngest borrower on title must be at least 62 years old
• The home must be owned free and clear or must be paid off with funds from the reverse mortgage loan
• Generally there are no credit score requirements
• Borrower(s) must meet financial eligibility criteria as established by HUD

Obligations of a Reverse Mortgage Loan
• At least one homeowner must live in the home as their primary residence
• Maintain the home in accordance with FHA requirements
• Continue to pay property taxes and homeowner’s insurance

Repaying the Loan
• In the event of death or in the event that the home ceases to be the primary residence for more than 12 months, the homeowner’s estate or heirs can choose to repay the reverse mortgage loan or sell the home
• If the equity in the home is higher than the balance of the loan, the remaining equity belongs to the estate
• If the sale of the home is not enough to pay off the reverse mortgage loan, the heirs will not be responsible for the difference
• No other assets are affected by a reverse mortgage loan. For example, investments, second homes, cars, and other valuable possessions cannot be taken from the estate to pay off the reverse mortgage loan

Loan Limits
The amount available for a Reverse Mortgage loan depends on:
• Age
• Current interest rates
• The lesser of the home’s appraised value, or sale price up to the maximum lending limit

Distribution of Proceeds from a Reverse Mortgage Loan
• Lump Sum- Receive a lump sum amount at closing (only available for fixed-rate loans)
• Tenure – equal monthly payments as long as the homeowner lives in the home
• Term – equal monthly payments for a fixed number of months
• Line of Credit – draw any amount at any time until the line of credit is exhausted
• Any combination of those listed above

AARP summarizes reverse mortgage loans on their website, “Before entering into a reverse mortgage agreement educate yourself, consult with trusted advisors and understand the pros and cons”. As with any major financial decision, it is highly encouraged that you discuss your current financial situation and goals with a financial advisor. For more information about how much you may receive, use our reverse mortgage calculator at the top of this page.

Numerous factors make homebuying advantageous for the rest of this year | South Salem Homes

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1. Home prices are still off their highs

Yes, home prices are rising from the lows seen during the housing crash of 2008, but they’re still nearly 20 percent off their mid-2006 peak. According to the S&P/Case-Shiller Home Price Index, average U.S. home prices are currently at summer 2004 levels. In markets that are still recovering, first-time homebuyers could see significant appreciation over the next few years, if they buy now.

2. Interest rates are expected to keep rising

Interest rates are slowly climbing, and as the Federal Reserve concludes its economic stimulus plan, rates are expected to continue to rise. Some experts believe mortgage interest rates could hit 5 percent by the end of 2014 or the first quarter of 2015, according to Glink. And even a small bump in interest rates can mean a significant jump in your monthly note.

“If you’re offered a 4.2 percent interest rate on a $400,000 mortgage, for example, your monthly payment will be $1,961, and you’ll pay more than $300,000 in interest over the loan’s 30-year term,” Glink says. “If your interest rate were 4.9 percent, your monthly payment would jump to $2,115, and the total interest paid over the life of the loan would exceed $360,000.”

3. Rental rates are rising

There is always an argument to be made regarding whether to buy or rent. It’s all a matter of your particular situation – as well as the status of your local housing market. If you need to be mobile — prepared for job transfers or out-of-state promotions — or are continuing to search for “the perfect place,” renting is probably right for you.

However, if you would like to put down some roots, and rents are high in your hometown – it might be cheaper to buy.

 

 

 

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http://realestate.msn.com/blogs/post–5-reasons-to-buy-a-house-in-the-next-5-months

Vital insurance questions answered | Armonk Real Estate

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Winston Churchill once described the Soviet Union as “a riddle wrapped in a mystery inside an enigma.” The same might be said of insurance in its varied forms.

You know you should have a comprehensive, cost-effective network of coverage, but what you need and how much can be confusing. Here are answers to 15 of the most commonly asked questions about insurance:

1. What sorts of insurance do I need?

Most people need to be concerned with insuring four areas: their possessions, their life, their health and their finances.

2. When you’re talking about possessions, does that mean homeowners insurance is the most important?

Probably, because a house is likely to be the single biggest investment most of us make. The rule of thumb with homeowners insurance is not to skimp. If you can, pay extra for guaranteed-replacement coverage, which mandates that the insurer will replace your home if it is destroyed, regardless of the cost. If you instead specify a dollar amount of coverage, and it’s not enough, you could end up paying the difference.

3. Once I have guaranteed-replacement coverage for my home, I’m all set, right?

Well, it’s important to know what your homeowners insurance covers and what it doesn’t. For example, particularly pricey items such as big-screen televisions and fancy stereo equipment are often excluded from policies or, at the least, inadequately covered. The same goes for antiques, collectibles, expensive jewelry and furs. Ask for riders that specifically cover those items.

 

 

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http://money.msn.com/insurance/vital-insurance-questions-answered-wuorio.aspx

This man pretends to be a Realtor and no one can stop him | Waccabuc Real Estate

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The Real Estate Council in Alberta, Canada, seems to have a real problem on its hands with real estate agent Derek Johnson.

The regulatory authority is not bothered by his claims on YouTube.

Nor is it his system that will reportedly threaten the Multiple Listings Service in Calgary.

It’s that Derek Johnson doesn’t seem licensed to conduct business as a real estate agent and broker.

But that’s not stopping Johnson.

According to CBCnews, the Real Estate Council keeps fining Johnson for not having a license.

The penalties are growing from $15,000 to $50,000.

Furthermore, there are reports claiming Johnson is committing fraud and harming homeowners.

And, according to an email Johnson sent to CBCnews, it doesn’t look like he plans to stop:

“Johnson said in an email that the fines are ridiculous and he hasn’t been given due process by the Real Estate Council of Alberta.

 

 

 

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http://www.housingwire.com/blogs/1-rewired/post/31081-this-man-pretends-to-be-a-realtor-and-no-one-can-stop-him

 

3 reasons mortgage apps don’t reflect housing strength | South Salem Real Estate

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Mortgage applications continue to hover around the same level, while home sales keep rising, according to an article in Business Insider.

The article uses a report from Hui Shan at Goldman Sachs, which cited three factors for why there is a disconnect between mortgage applications and home sales.

1. Things are different  

Not every mortgage application is approved and ends in an origination. “The pull-through rate, which is the origination to application ratio, can vary considerably over time,” according to Shan.

2. Reliability in question

The market share of the four large banks, Wells Fargo, Chase, Bank of America and Citi has fallen from 50% of all residential mortgages in 2011, to 31% in the first half of the year. This could skew the survey that the MBA index is based on.

3. Cash still remains

Tight lending standards continue to cause the share of cash transactions to stay close to peak levels, even as their share in distressed sales continues to fall.

Business Insider also repurposes a graph from the note to highlight the points, but this one is better at outlining the growing gap between starts and mortgage applications, click to enlarge:

 

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3 reasons mortgage apps don’t reflect housing strength

Mortgage default rate drives down household debt | Cross River Real Estate

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Household debt continued to fall in July as the first mortgage default rate dropped to .88% from .89% last month, according to the S&P/Experian Consumer Credit Default Indices.

This is significantly down from 1.35% in July 2014.

“At just above one percent, default rates remain at historical lows. Mortgage default rates have been trending down while Auto and Bank Card are a bit higher than their historical lows set in April and March,” said David Blitzer, managing director and chairman of the Index Committee for S&P Dow Jones Indices.

The second mortgage default rate slipped to .52%, down from .57% last month and .54% a year ago.

As a whole, the national composite hit 1.01% in July, down one basis point from last month and lowest level in over 10 years.

On the other side, non-housing debt increased slightly in the second quarter.

Auto saw its rate remain unchanged at 0.96%, falling only four basis points above its historical low, while the bank card rate declined 16 basis points to 2.86%.

 

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Mortgage default rate drives down household debt

 

How hard is it to get a mortgage? | Katonah Real Estate

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Yes. And no. And mostly yes again. And maybe it should be.

And since January 10 when the CFPB’s Qualified Mortgage rule took effect, it is definitely harder. So yes.

But there’s more to the story than that, and it doesn’t mean only Patsy Pays Perfect can qualify anymore.

The Qualified Mortgage rule has definitely put the squeeze on would-be homebuyers seeking a mortgage. People with lower income, the self-employed, those with credit scores on the margin, and people whose income comes from tips, bonuses or other harder to document sources are definitely being are all facing an uphill battle.

Industry analysts say that anywhere from 10% on the low side to 20% on the high side of people who have a mortgage now would not qualify for a mortgage under today’s rules.

But the rules and standards for getting a mortgage were already tightening long before the CFPB put their screws to it. In fact, the industry had largely self-corrected – as if it had a choice – long before Washington put it in ink with heightened documentation and tighter standards.

Mortgage applications, the first step in the mortgage process, have been down this year almost consistently.

 

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http://www.housingwire.com/blogs/1-rewired/post/31082-how-hard-is-it-to-get-a-mortgage

 

New rentals surge in Brooklyn and Queens | Bedford Hills Real Estate

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With Manhattan rents continuing to rise, Brooklyn and Queens experienced a surge of new rentals during the month of July, according to Douglas Elliman’s monthly rental report. In Manhattan, the median rental price last month rose 5.4 percent to $3,205, its highest July level in six years, according to the report, which was released today.“Anyone who is looking for an apartment is really not getting a deal,” said Luciane Serifovic, executive vice president of rentals for Douglas Elliman. In Queens and Brooklyn, she said, “Tenants are pushing back and seeking apartments elsewhere because probably they have more opportunities with some of the new development buildings.”In Manhattan, the average rental price in July was $4,022, a 5.2 percent increase from the prior year period.

Meanwhile, the number of new rentals increased 7.2 percent to 4,938, a reflection of the busy summer season. And the vacancy rate dropped to 1.82 percent – the lowest July vacancy rate in five years – while the listing inventory dropped 4.4 percent to 5,690 available units. Not surprisingly, the percentage of rentals with landlord concessions was “nominal,” falling 1.6 percent, the lowest in two years, said Jonathan Miller, president of Miller Samuel and the author of the Douglas Elliman report. In Brooklyn and Queens, median rents also continued to climb. Brooklyn’s rental prices in July were just $353 lower than Manhattan, down from $500 in June, and the median rental price rose 6.6 percent to $2,852. But the number of new Brooklyn rentals skyrocketed 127 percent to 892 – a reflection of tenant’s resisting the price increases sought by landlords at the time of renewal. Miller said the uptick in new rentals was bolstered by new developments.

Developments in Brooklyn and Queens tend to be rental buildings, while they tend to be condos in Manhattan, he said. In Queens, new rentals surged 136 percent to 203, and in particular, they did so in new development buildings. One out of four new rentals was located in a new building, according to the report. Overall, Queens’ median rental prices rose 10.5 percent to $2,646. –

 

 

 

See more at: http://therealdeal.com/blog/2014/08/14/as-manhattan-rents-rise-new-rentals-surge-in-brooklyn-and-queens/#sthash.QaBYpbfp.dpuf

 

 

 

Fixed Mortgage Rates Edge Lower | Bedford NY Real Estate

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Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates following bond yields lower. Averaging 4.12 percent for the week, the 30-year fixed-rate mortgage once again is at its 2014 low.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 4.12 percent with an average 0.6 point for the week ending August 14, 2014, down from last week when it averaged 4.14 percent. A year ago at this time, the 30-year FRM averaged 4.40 percent.
  • 15-year FRM this week averaged 3.24 percent with an average 0.6 point, down from last week when it averaged 3.27 percent. A year ago at this time, the 15-year FRM averaged 3.44 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.97 percent this week with an average 0.5 point, down from last week when it averaged 2.98 percent. A year ago, the 5-year ARM averaged 3.23 percent.
  • 1-year Treasury-indexed ARM averaged 2.36 percent this week with an average 0.5 point, up from last week when it averaged 2.35 percent. At this time last year, the 1-year ARM averaged 2.67 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for the Regional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

Quotes
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

“Mortgage rates were down slightly amid a week of light economic reports. Of the few releases, retail sales were virtually unchanged in July after a 0.2 percent increase in June, ending five months of increases. Excluding motor vehicles and parts, retail sales were up 0.1 percent last month.”