New Trend: 20-Year Mortgages

While 30-year fixed rate mortgages are still the most popular term for home loans a new trend of 20-year mortgages is gaining momentum and has become a realistic option for borrowers and especially those refinancing. Basically a 20-year loan term is an option to lower ones interest rate and shorten the term of the loan. This of course results in higher month payments than a 30-year, but with interest historically low the 20 year mortgage has actually become an affordable option. MSN Real Estate has taken a full look at this new trend in home loans so click here and check out the full article to make sure you are choosing the right loan term for you.  

"...impossible not to think about the possibilities."

“It’s not about timing the market. It’s about time in the market,” says Steve Berkowitz, chief executive officer at Move, Inc., a leader in online real estate. “Once you know how long you expect to own a home, look at the historical value performance of properties in the neighborhood. Be confident about your own job security, down payment resources and tolerance for upkeep, as well as the lifestyle you want today and in the near term. While homeownership may not be for everyone, it is the right choice for hundreds of thousands of people. Today’s housing market, especially for first-time buyers, makes it almost impossible not to think about the possibilities.”

This is very well put. There is so much misinformation and apprehension about the nationwide real estate market that potential buyers and sellers don't stop to consider (a) their local market and (b) their very neighborhood.

Don't be discouraged by real estate trends.  Yes, these are rough times, but yes you CAN avoid discouragement without putting those rose-colored glasses, that got so many into trouble in the hey-day, back on.

• Weigh the pros and cons of investing in a property. Is it right for you?
• Do your due diligence or ask a real estate pro (hey, we know some of those in Spokane!) to help you do it.
• Consider mortgage rates, seller motivation, inventory, and historic appreciation.

*Full article and more good advice here.

National Real Estate Market Update!

We love answering the question, "Hey guys, how's the market?"

The housing market continues its gradual recovery without the aid of the tax credit. Sales are slower but growing. Although it will likely be uneven at times, slow growth is believed to be the trend moving forward. This is as true in Spokane, Washington as anywhere.

Home Sales: The Good News

Home sales continued to rebound in September, increasing 10% compared to the previous month. This builds on August’s gain of 7.6% that followed a large drop caused by the expiration of the federal tax credit in July. Sales are expected to gradually grow as the market moves toward recovery without government stimulus. The recent foreclosure moratorium has opened up opportunities for short sales.

Although it could make the near-term “choppy at times,” industry experts expect the overall trend to continue growing slowly.

Home Price: It's All About Your Perspective

After four months of prices remaining on par with year-ago levels, September showed a slight decline. Last September distressed properties were 29% of all home sales; this September that number rose to 35%. *The larger proportion of distressed sales, which are typically discounted, helps to explain the decline.*

Housing Inventory: Important but Oft-Overlooked Indicator

There are fewer homes on the market again in September, representing 10.7 months of inventory. While still at a relatively high level, months of inventory shrank by nearly a month in September from August’s 11.6 and nearly two months since the 12.5-month supply in July. This continues to represent an excellent opportunity for buyers and investors who have not yet taken advantage of the abundant opportunities of the market including record low rates, an ample but shrinking selection of homes, and highly affordable prices.

Affordability

Housing remains at near-record affordability levels, and prospective home buyers stand to benefit from the lowest mortgage rates in decades, as well as advantageous home prices. Housing is approximately 60% more affordable now than during the height of the market.

Look for more updates about Boise real estate trends. Educate yourself and you'll be ahead of the game!


[Many thanks to Keller Williams and the National Association of Realtors for this information]

A Glimmer of Hope? Mortgage Payments Improving

Fannie Mae says serious delinquencies on home mortgages fell this summer for the fifth month in a row.

Read the Wall Street Journal article here.

Pay off Your Mortgage in Half the Time?

You could!

According to this Wall Street Journal article,"a growing number of homeowners are choosing to pay down their mortgages at a faster rate--even if it means a substantial jump in their monthly payments."

It represents a "shift" in borrower thinking from even just a few years ago.

The articles lists some lifestyle recommendations for those who might consider the increased payments.

"Mr. Walters [chief economist at online lender Quicken Loans] says you shouldn't take on a 15-year fixed-rate mortgage unless you have substantial savings, including at least a year's worth of living expenses in liquid accounts.

Also, he recommends having a debt-to-income ratio below 35%. So if you have a gross salary of $5,700 per month, for instance, your monthly debt--including any mortgage payments, taxes, insurance, homeowners-association dues as well as auto and student loans and credit-card debt--would have to be a max of $1,995 to get a 35% ratio.

Link here.

No Federal Income Tax Due on Principal Mortgage Debt Forgiveness

Here is an innovative way the government is encouraging home owners to "short sale" their home (rather than be foreclosed upon) and helping keep them out of bankruptcy court.

The IRS has created an exemption from its general rule to treat debt forgiveness as ordinary income. In the past, a lender that reduced the payoff amount on a home would 1099 the Seller for the amount of debt forgiveness. Under the new law, there is no federal income tax due on debt forgiven on a loan that is secured by the Seller's principal residence, provided that the loan was made to acquire, construct, or substantially improve the principal residence.

A refinance of that type of loan also qualifies for the exemption.

Sorry, the rule doesn't apply if you pulled money out of your house to pay for something like a vacation and got debt relief on that loan.

The exemption applies to any portion of loan debt forgiven beginning January 1, 2007 through December 31, 2009. Put another way, it doesn't matter when the loan was made; what matters is when a portion of the debt is forgiven.