09 Jan 08 Real Estate in 2008

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It’s a new year and several experts have already released their predictions of what may come of the real estate market in 2008. After reading several predictions, opinions and statistics there is one thing that almost everyone agrees on… there will be more foreclosures in ’08.

After 2007, with an unbelievable 1.39 million foreclosures, it’s hard to believe that 2008 could be any worse, but according to Moody’s Economy.com we could face as many as 1.67 million foreclosures. It’s easy to see that- that’s a huge increase, approximately 280,000 more foreclosures. An article by Harold Brubaker of Philly.com states that the average amount of foreclosures annually for the period 2000-2006 was 872,764. In 2008, it looks like we will experience a little more than a 52% increase over the 7 year average beginning in 2000 and ending in 2006.

What’s this mean for the national real estate market? In short, more economic instability, a greater supply of homes, and a decrease in the price of homes throughout much of the United States. For those of us that bought homes over the past few years we are looking at a greater loss on our investment. The little good news is that, on a national basis, our real estate was overpriced and a decrease in home prices will make homes more affordable for many renters and first time home buyers.

There are some experts stating that the market will bottom out in the next 6 months and others speculate that this won’t happen until 2009 or later. Regardless of who’s right and wrong it’s important to our overall economy that we continue to buy homes when we need and can afford them. Waiting until the market bottoms out will just make things worse and prolong the current real estate dilemma.

Pay attention to your local market – real estate is, and always has been local. Don’t read too much into what experts say – they couldn’t predict the exact date of the real estate bust and it’s likely that they can’t predict when things will get better.

Tags: economic stability, economy, foreclosures, harold brubaker of philly, market trends, national real estate, Real Estate, real estate market

04 Jan 08 What is a Reverse Mortgage Home Loan

There are hundreds, if not more, different types of home loans available today. Most home loans result in you putting up your home’s equity in exchange for money. You then make monthly payments to the lender to pay back the money and in turn slowly build your home’s equity back up. With a reverse mortgage home loan the terms are the exact opposite. You receive a cash amount using your home’s equity, but you don’t pay the money back like a traditional home loan. Instead, you keep the money until you die, sell the home or no longer live in it.

Qualifying terms for a reverse mortgage home loan is different than the terms for a traditional type mortgage. For a reverse mortgage you won’t be making payments so you don’t need to show proof of income. You don’t even need any type of income to qualify. Traditional mortgages require you to make payments and if you fail to make them you could lose your home. With a reverse mortgage there are no payments so there is no worry about losing your home.

Fees are still involved when getting a reverse mortgage. Expect to see an origination fee, service fees, appraisal fees and others depending on your lender. Most of these fees can be financed and applied to the mortgage so you won’t come up with out-of-pocket expenses.

To get a reverse mortgage you will follow the steps of any other type of home loan. First you find a lender and learn their terms. Fill out any application forms to start the loan process. An appraisal will then be made on your home to determine the value. Next you and the lender will come to an agreement of terms for payment options, loan interest rates, etc. After approval of the loan from the lender you will then sign all paper at the closing. The money is then paid to you in the form of payment you chose. The money can be received as cash in a lump sum, a credit line with terms you set or as a monthly payment to you. Repayment can then be made by your heirs/estate after your death, when you sell the home or when you no longer live in the home.

You can learn more about home loans in our Arizona Real Estate section.

Tags: equity, home equity, Home Loans, lender, mortgage, qualified loan, reverse mortgage, traditional mortgage

04 Jan 08 Home Buying Guide: Part 1

For most of us, buying a new home is the most expensive and important purchases we will ever make. Homes should always be thought of as an investment, but in most cases, you buy a home to accommodate your living needs and wants. Whether you are buying a home solely as an investment, or buying a home to live in, there are numerous things you should know and consider about the house before you buy it. This post is part one of a two part Home Buying Guide designed to inform the average home buyer about some of the things to consider when purchasing a home.

Housing prices are often determined by location, size, features and the condition of the home. In today’s market, the average home can easily cost a home buyer over two hundred thousand dollars. This is why it is important for the home buyer to think about all aspects of the purchase before buying a property. Very few people can properly assess a home’s condition and value, which is why you should always have a professional appraiser and real estate agent look at the property prior to purchasing it.

Be sure to keep your present and future needs in mind when shopping for a new home. If you are buying a home to live in, will you be living alone? How much home can you afford? Do you plan on increasing the size of your household? If so, is there adequate space for additional rooms? How long do you plan on living in the home? Do you want a new home or a resale home? etc…

Location, location, location. We have all heard that saying before, and as you might have guessed; there is a very good reason for the repetitive phrase. Buying in a good location is important for a multitude of reasons. Some questions you should ask yourself, or perhaps your real estate agent, are: “Is this home in a good neighborhood or a bad neighborhood?” “How far away will I be from work, shopping, and schools?” “Is there convenient access to freeways?” and so on. Make sure the location meets your wants and needs, and is in a neighborhood and area that will be attractive to potential home buyers when you decide to resale your home.

In regards to the actual home, there are several important factors to take into consideration. Do you want a single-family home, custom home or a condo? Does the home builder have a reputation that may negatively affect your chances of reselling the home? Does the home have features and appliances that you’ve always wanted? How does the home look aesthetically? Is the home in good condition? If the home is not exactly what you want, how much money is needed to make necessary repairs and improvements? If a home isn’t initially pleasing in its appearance, can it be? If so, what needs to be done and how much will it cost? Keep in mind that changing the homes architectural style is not easy and can be very expensive.

A home buyer should always think about every aspect of a home before choosing to purchase it. It’s important to ask the advice of real estate experts to ensure that when you do buy a new home; your home not only meets your needs but is also a good investment.

Tags: buyers guide, buying a home, home buying, home buying advice, home inspection, homebuyer, Homes for Sale, housing prices, investing, new homes, Real Estate, real estate investment