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The mortgage lending landscape changes a lot.  Rates and guidelines are in constant flux, and it creates preparedness challenges for buyers in Mount Holly that aren’t paying in cash.

The loan you get today won’t always be the loan you get tomorrow.

Because of how frequently bank rules are changing, it can be hard for laypersons to distinguish between mortgage fact and fiction of “what’s coming next”.

Recently, we saw this with respect to FHA home loans.

January 20, 2010, the FHA issued a press release with new lending guidelines.  Specifically, it announced 3 changes that will be effective starting April 5, 2010:

1. Upfront mortgage insurance premiums increase from 1.75% to 2.25%
2. Allowable seller concession reduced from 6% to 3%
3. FICO scores of 580 or lower are subject to a minimum 10% downpayment

But, also in its official statement, the FHA announced it would ask Congress for permission to raise monthly mortgage insurance premiums.  This is where the rumors started.

Nestled on page 348 of the Budget of the United States Government, Fiscal Year 2011, in a section titled Special Topics, there is a 1-paragraph notation that details the FHA’s petition.

1. Raise monthly premiums by roughly 0.30%, or $25 per $100,000 borrowed per month
2. Lower upfront mortgage insurance premiums by 1.25%, or $1,250 per $100,000 borrowed at closing

For now, the request is neither approved nor acknowledged by Congress. It’s merely a request. And in the event that Congress does approves it, that doesn’t mean that FHA has to stand by its initial projections.

Truth is, about the only thing we know about the future of FHA lending is that, come April 5, 2010, borrowing money is going to be tougher, and more expensive. These are the facts as we know them today.

Homebuyers should plan accordingly.

Sometimes, headlines for housing can be misleading and last  week gave us a terrific example.

Last  Wednesday, the Commerce Department released its Housing Starts data for January 2010. The data showed starts at a 6-month high.

A “Housing Start” is a privately-owned home on which construction has started.

Headlines on the Housing Starts story included:

• U.S. Housing Starts Hit 6-Month High (Reuters)
• U.S. Economy Receives Home Building Boost (Shepparton)
• Housing Starts Post Sharp Rebound (ABC)

Based to the headlines, the housing market looks poised for rapid growth through the Spring Market.

The real story, though, is that although Housing Starts increased by close to 3 percent last month, the growth is mostly attributed to buildings with 5 or more units.  This includes apartments and condominiums — a sector of the housing market that’s notoriously volatile.

If we isolate Housing Starts for single-family homes only, we see that starts grew by just 7,000 units last month and have failed to break a range since June 2009.  January’s tally is slightly below the 8-month average.

Perhaps more interesting than the Housing Starts, though, is the Commerce Department’s accompanying data for Housing Permits. After a 5-month plateau that ended in November, Housing Permits posted multi-year highs for the second straight month.

According to the Census Bureau, 82% of homes start construction within 60 days of permit-issuance.

One reason permits are up is that home builders want to capitalize on the federal homebuyer tax credit’s dwindling time frame.  Sales are expected to spike in March and April and more homes will come online to deal with that demand. Home buyers in Mount Holly should shop carefully, but with an eye on the clock.

As the tax credit’s April 30, 2010 deadline approaches, competition for homes may be fierce.

Mortgage markets reeled Wednesday after the Federal Reserve released the minutes from its January 26-27, 2010 meeting. Mortgage rates in New Jersey are now at their highest levels since the start of the year.

The Fed Minutes is a follow-up document, delivered 3 weeks after an official FOMC meeting. It’s a companion piece to the post-meeting press release, detailing the debates and discussions that shaped our central bankers’ policy decisions.

The Minutes is a terrific look into the Fed’s collective mind and, yesterday, Wall Street didn’t like what it saw.  Specifically, the report disclosed that:

1. The Fed plans to break support for mortgage markets after March 31, 2010
2. Raising the Fed Funds Rate will be a key part of the Fed’s strategy to tighten monetary policy
3. The fundamentals behind consumer spending strengthened modestly

Furthermore, the Fed Minutes said that there is a growing risk of “higher medium-term inflation”. Inflation, of course, is awful for mortgage rates.

Overall, the Fed’s economic optimism appeared stronger after its January meeting as compared to its December one.  A stronger economy should lead to better job growth and higher home prices throughout 2010.

Mortgage rates were up yesterday but they remain historically low. And many analysts think that after March 31, 2010, rates will rise even more.  Therefore, if you’re buying a home in the near-term, or know you’ll need a new mortgage, consider moving up your time frame.

Every 1/8 percent makes a difference in your household budget.

Consumer Sentiment has been on the rise since last February and it’s something to which Mount Holly home buyers should pay attention.

The affordability of your next home may hinge on consumer confidence.

As the economy recovers from a near-the-brink recession, many of the elements of a full recovery are in place.  Business investment is returning, household spending is expanding, and financial systems are gaining strength.

Consumer confidence is at a 2-year high.

What’s missing from the recovery, though, is jobs growth.  Another net 20,000 jobs were lost in January. Data like that hinders economic growth.

That said, twenty-thousand jobs lost is a much better figure than the several hundred thousand that were shed per month throughout early-2009, but it’s still a net negative number.  Not only does household income drop when Americans lose jobs but so does the average American’s confidence in his or her own economic future.

This is one reason why jobs growth is so closely watched by Wall Street — jobs are linked to higher confidence levels which, in turn, is believed to spur consumer spending.

Consumer spending represents 70% of the U.S. economy.

As confidence rises, it could be good news for the economy, but bad news for home buyers. More spending expands the economy and, all things equal, that leads mortgage rates higher.

Same for home prices. More confidence means more buyers which, in turn, squeezes the supply-and-demand curve in favor of sellers.

Later this morning, the University of Michigan will release its February Consumer Sentiment survey. If the reading is higher-than-expected, prepare for mortgage rates to rise and home affordability to worsen.

Sometimes, price tags just don’t want to unstick. No matter how hard you scrub and scrape, tacky residence stays behind. Turns out, getting “the stick” off your stickers isn’t so hard when you have the right tools.

In this 2-minute video from eHow.com, you’ll learn how to remove stickers and adhesive-based price tags from common household items including:

• Wooden furniture
• Glass vases and other glassware
• Plastic pieces
• Cardboard boxes

The best part? All the supplies you’ll need are already in your home.

According to the Census Bureau, 2.8 million people commute to work 90 minutes or more each day, in each direction. In Philadelphia, the commutes may not be as long generally, though with the last couple of blizzards making the streets so snow bound, some of us could be pushing it right now.

Now, your daily commute may not be as long, but time spent in cars, trains and buses is time away from work and from family. Drive-time can affect a person’s Quality of Life and it’s one reason why Forbes Magazine’s Best and Worst Commutes is worth reviewing.

Measuring travel time, road congestion and travel delays in the 60 largest metropolitan areas, Forbes ranks city commutes from best-to-worst with Salt Lake City topping the list and Tampa-St. Petersburg finishing it.

The Top 5 Commutes, as compiled by Forbes:

1. Salt Lake City, Utah
2. Buffalo-Niagara Falls, New York
3. Rochester, New York
4. Milwaukee-Waukesha-West Allis, Wisconsin
5. Albany-Schenectady-Troy, New York

The bottom 5 are Tampa-St. Petersburg, Detroit, Atlanta, Orlando, and Dallas-Forth Worth.

Long commutes shouldn’t deter you from moving to a particular city, but the potential commute should be consideration. Before making an offer on your next home, make a rush-hour commute to work from your potential new neighborhood.  Then imagine doing it every day.

You can read the complete Forbes list of Best and Worst Cities for Commuters on its website.

Foreclosures stories dominate the national housing news. It seems at least one foreclosure-related story makes its way to the front page or the nightly news every week.

But for as much as the foreclosure filing statistics can be astounding — over 300,000 homes were served last month alone — the prevalence of foreclosures depends on where you live.

As reported by RealtyTrac, just 4 states accounted for more than half of the country’s foreclosure-related activity last month.

• California : 22.7 percent of all activity
• Florida : 14.9 percent of all activity
• Arizona : 6.7 percent of all activity
• Illinois : 5.7 percent of all activity

The other 46 states (and Washington D.C.) claimed the remaining 49.9%.

However, just because foreclosures are concentrated geographically, that doesn’t make them less important to homebuyers in Philadelphia, Palmyra and around the country.  There’s been more than 1.4 million foreclosure filings in the last 12 months and that’s a figure that can’t be ignored.

Distressed properties now play a role in one-third of all home resales.

Therefore, if you’re in the market for a foreclosed home, here’s a few things to keep in mind.

1. Properties are usually sold “as-is” and may not be up to living standards. Be sure to physically inspect the home before buying it.
2. Buying a home from a bank is rarely as streamlined as buying from an individual homeowner. Be prepared for delays and long closings.
3. Foreclosures aren’t always listed for sale publicly. Ask your real estate agent how to access the complete foreclosure inventory.

 In order to use the federal homebuyer tax credit, you must be under contract for a home by April 30, 2010 and closed by June 30, 2010.  That doesn’t leave much time to find a bank-owned home and make it to closing.  In Philadelphia we also face specific issues regarding the time needed for settlement because the deed obtained from the foreclosure sale often takes a longer time to record than in other counties. So if you’re serious about buying foreclosures, it’s probably best to start your search soon.

For spot and room heating, homeowners often turn to portable space heaters.  Often, it’s cheaper and faster to heat a small space with a heater than it is to raise the entire home’s temperature by a few degrees.

But space heaters can be dangerous.

According to the National Fire Protection Association, space heaters were responsible for a large percentage of overall fire-related damages in 2006, including:

• 43% of home heating-related injuries
• 51% of home heating-related property damage
• 73% of home heating-related civilian deaths

Clearly, as compared to central heating systems and fireplaces, electric space heaters cause a disproportionate amount of in-home damage.  This is why it’s important to be safe when using them.

So, here’s some basic space heater tips to follow at home:

• Never place anything flammable within three feet away of a space heater
• Never use an extension cord on a space heater
• Turn space heaters off when leaving a room or going to bed

Furthermore, make sure your space heater bears the label of a recognized testing laboratory such as Underwriters Laboratory.

Remember to test your smoke detectors monthly.

Source
Heating Safety Tips
National Fire Protection Agency

Every year TIME magazine reports on the top 50 inventions. 2009 is no exception and you’ll find some that are incredible and practical too.

*Tweeting by thinking. Last April, University of Wisconsin doctoral student Adam Wilson tweeted 23 characters just by thinking! Wearing a cap fitted with electrodes, he focused his attention on one flashing letter on a computer screen. The cap monitored changes in his brain to figure out what character he wanted. His efforts spelled out “USING EEG TO SEND TWEET.” This discovering paves the way for people with “locked in” brain syndrome to communicate.

*The Solar Shingle. The Dow Chemical Co. developed a new roof shingle that doubles as a solar panel. The shingles, which can be incorporated into rooftops alongside traditional asphalt shingles, uses low-cost thin-film cells of copper indium gallium diselenide. The shingle is expected to cost 10 to 15 percent less than traditional solar panels and will be cheaper and easier to install.

*The $20 knee. Poor patients in Third World countries who lose a knee joint have few options as a titanium replacement can cost $10,000. A team of engineering students at Stanford has designed a knee joint that’s not only inexpensive ($20!) but mimics the knees natural movements. The JaipurKnee is both  flexible and stable even on irregular terrain.

*The Smart Thermostat. Set Frader-Thompson has invented the EnergyHub Dashboard, a little device with a screen, that can talk wirelessly to your furnace and your various appliances. It lest you know exactly hom much electricity or gas each one is using and how much it’s costing you. It can also turn appliances on and off and raise and lower the temperature in your house. EnergyHub will be available directly to consumers this year.

*The Handheld Ultrasond. Vscan is as small as a cell phone as as powerful as a l large ultrasound console.

The economy’s improving but lending standards are not. Nationally, banks are making mortgage approvals harder to come by.

Underwriting guidelines are tightening.

The data comes from the Federal Reserve’s quarterly survey to its member banks.  The Fed asks senior bank loan officers around the country to report on “prime” residential mortgage guidelines over the most recent 3 months and whether they’ve tightened.

For the period October-December 2009:

• Roughly 1 in 4 banks said guidelines tightened
• Roughly 3 in 4 banks said guidelines were “basically unchanged”

Just 2 of 53 banks said its guidelines had loosened.

Combine the Fed’s survey with recent underwriting updates from the FHA and generally tougher standards for conventional loans and it’s clear that lenders are much more cautious about their loans than they were, say, in 2007.

Today’s Philadelphia home buyers and would-be refinancers face a bevy of new borrowing hurdles including:

• Higher minimum FICO scores
• Larger downpayment requirements for purchases
• Larger equity positions for refinances
• Lower debt-to-income ratios

So, if you’re on the fence about whether now is a good time to buy a home, or make that refi, consider acting sooner rather than later.  It doesn’t necessarily matter that mortgage rates are low, or that there’s an up-to-$8,000 home purchase tax credit for households that qualify.  With each passing quarter, fewer and fewer applicants are eligible to take advantage.