Huntsville Real Estate Blog

Huntsville Veterans Home Buyer Benefits Improve

Huntsville Veterans now have expanded homeownership opportunities, thanks to the Veterans’ Benefits Improvement Act of 2008.

Three provisions in the legislation are critical to help Huntsville veterans during the current housing turmoil. The law will make it easier for veterans who have fallen victim to risky subprime loans to refinance their loans into a safer, more affordable loans backed by the U.S Department of Veterans Affairs. The legislation also extends the VA loan limit increases through 2011, which will help veterans living in high-cost areas. In addition, the VA can now offer adjustable-rate mortgages to veterans. That would make Huntsville homeownership more attainable for military families and personnel who often have to move more frequently than their civilian counterparts.

If you are a Veteran thinking about buying a Huntsville home, please get in touch and we can give you some information on how you can take advantage of the great home purchase opportunities that exist right now.

Learn more about Huntsville homeownership by visiting MoveToHuntsville.com.

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Should I Buy Huntsville Real Estate In These Troubling Economic Times?

The Huntsville real estate housing market has never been better for many potential buyers. In fact, more often than not, it is less expensive to own your own home rather than rent. 

The National Low Income Housing Coalition reports that in 57 out of the 100 most populated metro areas, renting a three-bedroom home is more expensive than monthly costs on a six percent mortgage for a typical low-priced house in the same area. 

With all the news these days concerning the economic crunch and these tumultuous economic times, you might think I’m crazy saying it is a good time to buy a Huntsville home. Of course, home buyers with strong credit are best positioned to take advantage of today’s opportunities. A high credit score will yield a lower interest rate and increase the likelihood that a loan application will be approved. 

For example, a home buyer with a 6 percent mortgage will pay a third less per month than a buyer who has a loan at 8 percent. This difference can be hundreds of dollars per month. 

FHA loans, VA loans and government backed first-time buyer loans are all available to qualified buyers. With the current low interest rates and affordable home prices, it is a great time to buy your Huntsville home. 

It is also a time to keep in mind that buying Huntsville real estate is a long term investment…and an investment you and your family can enjoy for many years!

Learn more about Huntsville real estate at HuntsvilleHomesOnline.com.

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Fannie Mae and Freddie Mac both announced they will not impose the loan fee increase scheduled to go into effect next month. Fees were to have increased from .25% to .5%, making it even more difficult for Huntsville home buyers. The biggest obstacle many ­­­­­­­­­­­­­­­­Huntsville home buyers face is the necessary cash needed for a down payment and closing costs.

Both companies, now controlled by the federal government, had decided to increase fees to boost their finances during difficult times.

Freddie Mac, however, will raise fees next year for riskier loan products, including mortgages that allow interest-only payments for the first few years. Freddie also will require higher credit scores for “piggyback” loans that allow borrowers to make smaller down payments by taking out two mortgages.

Taken together, Freddie Mac said the changes would provide “some relief from the challenges in the current market environment,” but added that it is following lending practices “that are prudent and largely applicable in all market conditions.”

To learn more about buying a Huntsville home, visit MoveToHuntsville.com.

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President Bush signed into law this week The Housing and Economic Recovery Act. This is the most sweeping change to housing reform since the New Deal of 1934. It is designed to assist more Americans invest in home ownership and shore up the faltering housing and mortgage markets. Like any legislation, it comes with the good and the bad. I encourage you to write your Congressmen to see if we can get legislation to revoke some of the bad.  For example, effective October 1, 2008, FHA will increase the minimum required down payment from 3% to 3.5% for Huntsville home buyers. The legislation also calls for the elimination of seller down-payment assistance programs such as AmeriDream and Nehemiah by October 1, 2008.

As of July 14, 2008, upfront MIP premiums became risk-based on credit scores and the annual premium increased across the board. Instead of the original plan of making FHA loans more affordable for potential Huntsville home buyers; the new legislation is doing the exact opposite and makes it more expensive.

Details of the Housing and Economic Recovery Act:

Here are some key provisions of the Housing and Economic Recovery Act that most affect Huntsville home buyers:

• GSE Reform - including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
  View 2009 FHA and GSE loan limit estimates (PDF)

(more…)

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Before lending you a large sum of money to purchase a piece of Huntsville AL real estate, it is understandable that your lender will want to know a little bit about you and your ability to pay back the loan. If you are a first-time homebuyer, or if it has been a while since you last spoke with your lender, it is helpful to be prepared for some of the questions you may be asked and to have some responses in mind. Below are some general examples of questions you may expect to hear when applying for a home loan:

Employment and Income

•  Where do you work?

•  How much do you make?
 
•  How long have you been at your job?
 
•  How is your income derived — steady salary or irregular income? (if it’s the latter, plan on providing more details so that you get a favorable interest rate)

Outstanding Debts

•  What recurring debts do you have?
 
•  How much do you pay a month for auto loans?
 
Credit cards?
 
•  How much of your monthly pretax income do these debts consume? 

Cash Reserves and Assets

•  How much money do you have in the bank?
 
•  How much will be left after you pay your down payment and closing costs? 

Down Payment

•  How much money are you putting down?
 
•  Is this your own money? A gift? A nonprofit agency grant?
 
Loan Purpose

•  Is this mortgage for a home buy or refinance?
 
•  If it’s a refinance, do you want to take cash out at closing to pay off other debts? 
 
•  If so, how much?

Property Use

•  Do you plan to live in the house?
 
•  Is it investment property? 

Property Type

•  A condominium?
 
•  A duplex? 

In order to get the best possible interest rate and gain the trust of your lender, you will want to be able to prove that you’ve had steady employment (preferably with the same employer or in the same line of work) for two or more years. You also want to avoid making any major purchases before applying for a loan – if a lender sees that you’ve just purchased an automobile last week, your debt-to-income ratio goes up and your ability to pay down a home loan goes down.

It is preferable to be making a down payment of at least 5% of the sales price with your own money and to prove that you have at least two months’ worth of mortgage payments in the bank; however, there are many programs such as Fannie Mae that require much lower down payments.  

To learn more about investing in Huntsville AL real estate or for a referral to a reputable lender, please call me at 256-508-0211 or visit MoveToHuntsville.com. You may also sign up for automated emails of new listings at HuntsvilleHomeHunter.com.

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When the Fed lowers interest rates, as it continues to do this month, everyone gets excited and there is a lot of buzz about the real estate market.  But – when it comes to you and me – what do these lower interest rates really mean? Here are some examples:

Homeowners: If you already have an adjustable-rate mortgage (ARM) on a home, you could save hundreds of dollars a month if your loan is pegged to Treasury rates, which have fallen considerably thanks to the Fed’s recent cuts.  The catch is that many buyers in more expensive areas resort to “jumbo loans,” which are typically pegged to slower-moving indexes that remain elevated.  If you have a fixed-rate mortgage (not a jumbo loan), you could consider the cost of re-financing (think origination fees, appraisal fees, closing costs) against the savings of a lower interest rate for your monthly payment.

Borrowers: Several banks lowered their prime rate, which forms the foundation for car loans, home equity lines and other loans.  But you must carry a whopping $5,000 credit card balance to save just $12.50 annually from a quarter-point rate cut.

Consumers: Lower rates threaten to boost inflation and the price of imports.  So far, inflation has been held in check, and foreign companies generally are holding the line on prices.

Savers: Falling interest rates normally would whack rates on CDs and other savings.  But the cash crunch has spurred many banks to prop up such rates.

Travelers: International vacations and business trips cost more because the dollar has sagged in the wake of the Fed’s cuts.  But it could be buoyed if other central banks trim rates.

In short, unless you are about to purchase a new home and can take advantage of the new lower interest rates by locking in a fixed-rate mortgage now, you may not end up seeing a whole lot of benefit to the interest rate cuts.

To learn more about Huntsville AL real estate, please visit MoveToHuntsville.com or call me at 256-508-0211.  You may also sign up to receive automated emails of new listings at HuntsvilleHomeHunter.com. 

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Attention, homebuyers!  According to the Baltimore Sun, long-term mortgage rates remain in a downward pattern, registering the third consecutive week of decline.

Freddie Mac currently lists the average interest on 30-year fixed loans at 5.69 percent—the lowest level since July 2005. Other rate declines include:

• 15-year fixed mortgages dropped to 5.21 percent from 5.43 percent a week ago.
• 5-year adjustable-rate average decreased to 5.4 percent from 5.63 percent.
• 1-year ARMs fell to 5.26 percent from 5.37 percent..

Observers generally agree that borrowing costs will remain at or near 6 percent for 2008 unless a U.S. recession surfaces—in which case they expect rates to decline further. 

This news makes it a great time to consider buying a home in Huntsville AL.  To learn more about Huntsville AL real estate, please call me at 256-508-0211 or visit MoveToHuntsville.com.  You may also begin searching for Huntsville real estate and homes for sale!

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Last week, we learned that the Fed had cut its federal funds rate once again to 4.5%.  What followed in the news was a flood of technical financial jargon, which just confuses many people rather than helping them understand how the change affects them.

Luckily for those who did not major in finance, BankRate.com has put together a handy “What The Fed Said” translator of last week’s news release!  Check it out here and remember that an experienced Realtor can always refer you to a reputable lender, who can help you decide the best way to finance your home purchase.

To learn more about Huntsville AL real estate, please call me at 256-508-0211 or visit MoveToHuntsville.com.  To begin searching for Huntsville AL homes please click here.

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Conditions in the mortgage market are improving for consumers, which should help to release some pent-up demand in early 2008, according to the latest forecast by the National Association of Realtors®. 

Lawrence Yun, NAR senior economist, notes that widening credit availability will help turn around home sales.  “Conforming loans are abundantly available at historically favorable mortgage rates.  Pricing has steadily improved on jumbo mortgages since the August credit crunch, and FHA loans are replacing subprime mortgages,” he said. 

Read the full article here, and remember that the Huntsville AL real estate market is always changing from month to month and neighborhood to neighborhood.  For the most up-to-date information about Huntsville AL real estate, please call me at 256-508-0211 or visit MoveToHuntsville.com. Also visit HuntsvilleHomeHunter.com to receive automated emails of new listings that meet your criteria!

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It’s an increasingly common dilemma.  You want to retire — but you haven’t yet retired your mortgage.

According to the Federal Reserve, among households headed by someone age 65 to 74, over 32% had a mortgage on their primary residence in 2004, up from less than 19% in 1992.

Are you heading into retirement and still carrying a mortgage?  Here are some tips on how to do it:

-  If you have a heap of savings and a modest mortgage, go for the loan payoff.  You might consider trading down to a smaller home or, work part-time until you’re rid of the mortgage.

-  If you have cash sitting in, for example, a money-market fund held in a regular taxable account, also consider using these savings to reduce your loan balance.  Sure, your mortgage may be costing you just 6% and the interest might be tax-deductible. But your money-market fund is likely yielding only 5% — and you have to pay tax on that income.

If your mortgage is so large that paying it off will seriously impact your retirement, you might as well get the mortgage payment down as low as possible.

Better still, trade down.  After paying a 5% or 6% real-estate commission and paying off your current mortgage, in most cases, you could put down cash on your new home, leaving you with a smaller mortgage.  If you financed that over 30 years at 6.5%, your monthly payment would be lower.

You might even consider refinancing later in retirement, further shrinking your monthly payment by again extending the loan over 30 years.  Even in today’s tight credit environment, you shouldn’t have a problem qualifying for a new loan, as long as you have a reasonable amount of retirement income.

Thinking of retiring to Huntsville AL?  Visit HuntsvilleHomeHunter.com to receive automated emails of listings that meet your criteria.  Or, for more personalized service, please call me at 256-508-0211 or visit MoveToHuntsville.com to learn more about Huntsville AL real estate.

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