New rules go into effect on January 10th related to getting a mortgage. Most of the rules just formalize the practices already in place–higher attention to a borrower’s debt ratios, insuring that a loan doesn’t have negative amortization and the like. Birmingham news station ABC 33/40 interviewed Warner McGowin this week about the new rules. For a full recap, click here for the video–and then select “Home Mortgage Changes” on the top row.
The pattern of increased home sales in the Birmingham area continued in October, with 938 homes being sold in the Birmingham metro area. That’s exactly 100 more homes than were sold in the metro area in October 2012. The average price of those houses increased also. The median home price in Birmingham rose nearly 8% to $161,350.
All this is good news for homeowners. Increased demand, paired with continued low interest rates, means a stabilized and strengthening real estate market. That bodes well for the economy overall.
To read more about October’s home sales, click here.
That’s according to an article in Bloomberg. While rates ticked up this summer, they’ve floated back down a bit in the last few weeks. And the uncertainty of the shutdown in Washington, along with the lack of a federal jobs report because of the shutdown, means rates are likely to hold steady in this lower territory until the political stalemate is over.
As we all know, staying mentally active has been shown to help our cognitive skills. Many seniors keep their minds engaged through working at a job, but good jobs have become increasingly scarce in our current economy. There is good news on the job front for senior females. The Bureau of Labor and Statistics expects there to be about twice an many women 65 years and older in the job market in 2018 than there was in 2008. Slightly over half of these senior women who are working today do so more from the enjoyment they receive from working than for financial reasons.
Reverse Mortgage segment featuring Jimbo King of McGowin-King. Here’s the link:
According to Fannie Mae’s most recent national housing survey of 1,000 respondents, confidence in America’s housing market continues its upward climb. Perhaps most telling: 23% of respondents feel this is a good time to sell a house. That’s the first time that number has risen above 20% since Fannie Mae started measuring that particular item. “This growing confidence in a housing recovery, in addition to other factors, may reinforce growing consumer optimism regarding the improving direction of the general economy,” says Doug Duncan, chief economist at Fannie Mae.
Of course, the old adage that all politics is local applies to real estate. All real estate is local. But Birmingham seems to be following trend: According to recent data, median home prices in the Birmingham area were up 14% in November.
Good news all around as we end up 2012. Let’s hope for more of the same in 2013.
The new FHA streamline program makes saving easier than ever for homeowners who bought their house with an FHA loan prior to May 2009. Back in 2008-2009, a “good” rate was 5.5% or so. Now, it’s 3.5%. On a $200,000 loan that’s a monthly savings of $236! But what makes this program unique is that it’s a “streamline” program. That means there’s no appraisal required, and the upfront mortgage premium has been reduced by 99%. Mortgage insurance is down by 56% from a newly originated loan. How can FHA do that? Well, they verify that you’re current on your payments. If you are, they figure you’ll continue to be with a lower rate. It’s all part of the government’s attempts to improve the foreclosure numbers across the U.S. And, for many homeowners, it’s a rare government program that’s very beneficial and easy. We can help you navigate the process, tell you whether you’re eligible, and give you an idea of your savings. Click here to contact one of our team members and we’ll be in touch.
In the past, seniors viewed reverse mortgages as a last-option choice. Now that seniors are getting to know the program better, the reasons they are choosing to get reverse mortgages are changing. Here are the top five objectives for Alabama reverse mortgage borrowers:
Improvement of Quality of Life. As children it seems that life is a never ending stream of days, but as we get older, we understand that our life has a final horizon. Enjoying our remaining time, while we still have our health and vitality, is increasing becoming the motivating factor in getting a reverse mortgage.
Hospital and Medical costs. Ever rising medical costs are pushing basic medical care beyond what many seniors can afford to pay out of their fixed monthly income. Reverse mortgages help these seniors get the healthcare they need.
Home Improvements. Anyone who owns a home — or a car! — recognizes the unpredictable, periodic costs of ownership. Reverse mortgages enable basic home maintenance, as well as improvements such as making the home more “senior-friendly”.
Pay Off Debt. Want to increase your effective monthly income? Payoff your mortgage and eliminate your largest expense; the remaining money sure goes a long way. Also, pay off high interest credit card debt and pocket the savings.
Travel. Several years ago, we did a reverse mortgage for a retired military professional who had traveled the world “on business”. This man made a promise to himself that he would return to some of the more desirable locations before he died. He took out a reverse mortgage to allow him to do this. He also bought a small sports car that he had wanted for years!
Channel 42 had done a special report on reverse mortgages. It was good to hear Christine Wade, an Alabama reverse mortgage borrower speak so highly of her reverse mortgage and what it has done to improve her life.
In a recent issue of Forbes, writer Mark Greene illustrates in enlightening fashion the realities of getting approved for a mortgage loan in 2012. It’s one of the clearest explanations we’ve seen about why the process of getting a loan approved these days is harder than ever. It’s not because banks are simply trying to be tough for the sake of being tough. And it’s not because no one wants to lend. It’s more a matter of lenders doing everything possible in underwriting a loan to make sure they won’t have to buy it back from Fannie Mae or Freddie Mac. And it’s working. One surprising statistic from the article: Of the secondary-market loans originated in 2007, 22% went into default within 18 months. Of those originated in 2009, only 2% went into default. That drastic change undoubtedly was brought about by several factors, but more stringent underwriting was a main factor. Green also does a brilliant job of explaining the key players in the mortgage process–from the originator to the processor to the underwriter. Click here if you want to read it, and let us know what you think.