Renting out a second home can be a source of income in a tight economy, but the competition is increasing, says Christine Karpinski, author of How to Rent Vacation Properties by Owner.
Management companies charge between 30 percent and 40 percent, but many renters have success advertising on VRBO.com or Homeaway.com and handing the details themselves, according to Karpinski.
Owners say they don’t make a ton of money renting out their second home, but breaking even is a realistic goal.
In this economy, you may have the greatest chance of success if the home is located less than two hours from a city, Karpinski says.
Source: Star-Tribune, John Ewoldt (09/09/08)
Friday, September 12, 2008
Mortgage Rates Drop Below 6%
For the first time since early spring, mortgage rates have fallen below the 6-percent threshold.
Freddie Mac reports that 30-year fixed loans came in at an average of 5.93 percent this week, down from 6.35 percent a week ago and 6.31 percent at the same time last year.
A borrower taking out a $200,000 mortgage at 5.93 percent would pay $1,190 for monthly principal and interest payments, which is $54 less than the payments on last week's rate.
"Consumers see a five in front of mortgages, and they get excited," says Keith Gumbinger, a vice president at research firm HSH Associates.
Source: The Washington Post, Dina ElBoghdady (09/12/08)
Freddie Mac reports that 30-year fixed loans came in at an average of 5.93 percent this week, down from 6.35 percent a week ago and 6.31 percent at the same time last year.
A borrower taking out a $200,000 mortgage at 5.93 percent would pay $1,190 for monthly principal and interest payments, which is $54 less than the payments on last week's rate.
"Consumers see a five in front of mortgages, and they get excited," says Keith Gumbinger, a vice president at research firm HSH Associates.
Source: The Washington Post, Dina ElBoghdady (09/12/08)
Wednesday, September 10, 2008
Buyers Crave Green More Than Extra Space
Buyers of custom homes are increasingly interested in money-saving features like extra insulation and energy-efficient furnaces, rather than game rooms and space for in-laws, according to a Home Design Trend Survey by the American Institute of Architects.
Sixty-eight percent of the survey's respondents said customers were requesting extra insulation in the attic compared with 56 percent a year ago.
Two-thirds of respondents said green products such as tankless water heaters, double or triple-glazed windows, and sustainable flooring products such as bamboo or cork were gaining in popularity.
Only 8 percent of the survey’s respondents said game rooms were increasingly popular among their customers, down from 23 percent last year. Home offices also declined in popularity even though they remain the most requested specialty room. Last year, 61 percent of custom home buyers wanted them; this year only 41 percent made the request.
Source: Reuters News (08/09/2008)
Sixty-eight percent of the survey's respondents said customers were requesting extra insulation in the attic compared with 56 percent a year ago.
Two-thirds of respondents said green products such as tankless water heaters, double or triple-glazed windows, and sustainable flooring products such as bamboo or cork were gaining in popularity.
Only 8 percent of the survey’s respondents said game rooms were increasingly popular among their customers, down from 23 percent last year. Home offices also declined in popularity even though they remain the most requested specialty room. Last year, 61 percent of custom home buyers wanted them; this year only 41 percent made the request.
Source: Reuters News (08/09/2008)
End in Sight for Seller-Funded Down Payments
Prospective homeowners have until Oct. 1, 2008, to use down payment assistance from a seller to purchase a house.
The Housing and Economic Recovery Act of 2008 signed into law in July bars such seller-funded aid on Federal Housing Administration-backed mortgages.
Lawmakers added the provision to the housing relief package because about 40 percent of FHA borrowers who went into foreclosure in the past year received down payment assistance from a seller.
However, some industry professionals are worried that the rule change will keep some buyers out of th market.
Scott Syphax, president of The Nehemiah Corp., which runs a privately funded down payment assistance program, cites a report by housing research firm Zelman & Associates.
The report found that 10 to 25 percent of potential home buyers will have no way of securing home ownership without seller-funded down payment assistance, and stated that the rule change will have far-reaching implications for the real estate industry at large.
Source: Augusta Chronicle (GA), Tim Rausch (09/02/08), REALTOR.org
The Housing and Economic Recovery Act of 2008 signed into law in July bars such seller-funded aid on Federal Housing Administration-backed mortgages.
Lawmakers added the provision to the housing relief package because about 40 percent of FHA borrowers who went into foreclosure in the past year received down payment assistance from a seller.
However, some industry professionals are worried that the rule change will keep some buyers out of th market.
Scott Syphax, president of The Nehemiah Corp., which runs a privately funded down payment assistance program, cites a report by housing research firm Zelman & Associates.
The report found that 10 to 25 percent of potential home buyers will have no way of securing home ownership without seller-funded down payment assistance, and stated that the rule change will have far-reaching implications for the real estate industry at large.
Source: Augusta Chronicle (GA), Tim Rausch (09/02/08), REALTOR.org
Friday, September 5, 2008
Falling Home Prices Curb Divorce Rate
The sluggish housing market in the U.K. has an upside: The divorce rate is falling. In fact, national figures for the U.K. published in late August show the divorce rate last year was the lowest since 1981.
Analysts from real estate services firm Savills say there's a strong correlation between housing prices and the divorce rate.
"As house prices rise, home owners undoubtedly feel wealthier and our supposition is that they also feel able to afford to get divorced," says Lucian Cook, director of Savills Research. "We forecast that the current falls in property prices will result in fewer divorces, even allowing for the overriding downward trend in the UK's divorce rate."
However, family law expert Jill Goldman tells London's Daily Mail that financial woes often will cause arguments and put a strain on relationships; so there may be some divorces that are actually caused by dropping home values.
Sources: REALTOR® Magazine Online, Savills Research, Daily Mail
Analysts from real estate services firm Savills say there's a strong correlation between housing prices and the divorce rate.
"As house prices rise, home owners undoubtedly feel wealthier and our supposition is that they also feel able to afford to get divorced," says Lucian Cook, director of Savills Research. "We forecast that the current falls in property prices will result in fewer divorces, even allowing for the overriding downward trend in the UK's divorce rate."
However, family law expert Jill Goldman tells London's Daily Mail that financial woes often will cause arguments and put a strain on relationships; so there may be some divorces that are actually caused by dropping home values.
Sources: REALTOR® Magazine Online, Savills Research, Daily Mail
Thursday, September 4, 2008
Where Are Lenders Getting Credit Scores?
Consumers often mistakenly believe that mortgage lenders use only credit scores from Equifax, Experian, TransUnion, and Fair Isaac's myfico.com to gauge creditworthiness.
However, Consumer Reports recently found that lenders also use NextGen FICO scores, FICO Expansion Scores, and Industry Option FICO scores — which take car loans into consideration — as well as custom formulas.
Given that these credit scores or scoring models are not available to consumers, experts say that consumers should not rely solely on available credit scores to determine their likelihood of getting a loan. They would be wise to make timely bill payments, make more than the minimum payment, hold down credit card balances, and retain old accounts.
Additionally, experts say it might be worth keeping tabls on other credit scores, such as Experian's PLUS scores, which are not yet sold to lenders but could be in the future.
Source: Allentown Morning Call (PA) (09/02/08)
However, Consumer Reports recently found that lenders also use NextGen FICO scores, FICO Expansion Scores, and Industry Option FICO scores — which take car loans into consideration — as well as custom formulas.
Given that these credit scores or scoring models are not available to consumers, experts say that consumers should not rely solely on available credit scores to determine their likelihood of getting a loan. They would be wise to make timely bill payments, make more than the minimum payment, hold down credit card balances, and retain old accounts.
Additionally, experts say it might be worth keeping tabls on other credit scores, such as Experian's PLUS scores, which are not yet sold to lenders but could be in the future.
Source: Allentown Morning Call (PA) (09/02/08)
First-Time Home Buyer Tax Credit
First-Time Home Buyer Tax Credit at a Glance
- The tax credit is available for first-time home buyers only.
- The maximum credit amount is $7,500.
- The credit is available for homes purchased on or after April 9, 2008 and before
July 1, 2009. - Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
- The tax credit works like an interest-free loan and must be repaid over a 15-year period.
Wednesday, September 3, 2008
Lenders Help Borrowers Avoid Foreclosure
While foreclosures have soared, some home owners have found ways to stave off auction and keep their homes.
In the second quarter of 2008, mortgage servicers that are part of the industry-sponsored Hope Now alliance finished more than 522,000 workouts. That doesn't include home owners who have worked out loan modifications on their own with lenders or those who received counseling or financial aid from charitable groups that aren't part of the alliance.
Here are some of the possible options:
Source: USA Today Stephanie Armour (09/03/2008)
In the second quarter of 2008, mortgage servicers that are part of the industry-sponsored Hope Now alliance finished more than 522,000 workouts. That doesn't include home owners who have worked out loan modifications on their own with lenders or those who received counseling or financial aid from charitable groups that aren't part of the alliance.
Here are some of the possible options:
- Lenders agree to a repayment plan, tacking delinquent payments onto the end of a home loan.
- Lenders allow borrowers to switch from adjustable rate to a lower fixed rate. About 14 percent of subprime loans are in default, according to the Center for Responsible Lending.
- Lenders allow some borrowers temporarily to pay less than the full amount of their monthly payment, a rarer measure usually approved in cases of a financial emergency, such as a health crisis.
Source: USA Today Stephanie Armour (09/03/2008)
Monday, September 1, 2008
What to Know About Inheriting Property
Inheriting property can be exceedingly confusing for the heirs, particularly if they plan to sell the property. While getting expert legal advice is the best approach for the person who has inherited property, here is some basic information that can help a real estate professional better understand the situation.
Source: Real Estate Matters Syndicate, Ilyce Glink (08/24/2008)
- Every state has a legal process that allows the person who was willed property to transfer ownership of it from the previous owner’s name to the new owner’s name. The attorney assisting with the probate of the will can help fill out the forms. If there is no lawyer involved, sometimes someone in the clerk of courts office can guide the person inheriting property through the transfer process.
- Generally, there is little or no transfer tax or other cost involved because the person who is inheriting the property didn’t pay anything for it.
- When a person dies and title is transferred to a spouse or a child, the due-on-sale clause in a mortgage contract doesn’t apply. Otherwise, while a lender could call the loan, in the current economic climate it is unlikely if the person inheriting the property makes regular payments.
Source: Real Estate Matters Syndicate, Ilyce Glink (08/24/2008)
Throwing Stones at Glass Houses
People who live in glass houses often get more than they bargained for: the relentless glare of the sun can damaged furniture, make it impossible to see a TV or computer screen and cause room temperatures to spike in summer.
Wall-to-wall or wall-to-ceiling windows are increasingly trendy and featured constantly in real estate ads and home design magazines. But owners say the reality isn’t so glamorous.
Big windows are often streaked and spotty even when washed regularly. The sun fades furniture, wood floors, artwork and even kitchen cabinets.
Temperatures near the glass can be chilly in the winter and roasting in the summer.
And unless the shades are pulled, neighbors get a good view.
"I'm not sure people really anticipate what they're getting themselves into when they're buying these," says Terry Talentino, chief operating officer of Automated Shading Inc.
Source: The New York Times, Sara Lin (08/29/2008)
Wall-to-wall or wall-to-ceiling windows are increasingly trendy and featured constantly in real estate ads and home design magazines. But owners say the reality isn’t so glamorous.
Big windows are often streaked and spotty even when washed regularly. The sun fades furniture, wood floors, artwork and even kitchen cabinets.
Temperatures near the glass can be chilly in the winter and roasting in the summer.
And unless the shades are pulled, neighbors get a good view.
"I'm not sure people really anticipate what they're getting themselves into when they're buying these," says Terry Talentino, chief operating officer of Automated Shading Inc.
Source: The New York Times, Sara Lin (08/29/2008)
Consider Stocking Up on Land
More small buyers are investing in undeveloped land.
"There is a really attractive market emerging for the small investor," says Eric O'Keefe, editor-in-chief of Land Report magazine. "With credit tightening, what you're seeing in essence is some of the air being let out of the bubble that was driving prices up."
Buying land is no slam-dunk. An investor must be able to judge which land is most apt to deliver a profit down the road and be able to hold onto the property long enough to benefit.
Also, variations in prices make these kinds of investments painful for the faint of heart. For instance, the Texas real estate commission reported that land prices went up by 20 percent in 2007. But land values in Southern California have tumbled at least 50 percent along the coast and as high as 90 percent. inland, investors say.
Plus, ownership can be expensive. Besides high borrowing costs, there are property taxes and liability insurance costs to pay.
Nevertheless, some investors are convinced now is the time. "It's a delicate business, but it's just about bad enough to be good again," says William Shopoff, chief executive of Shopoff Group, a real estate investment firm in Irvine, Calif.
Source: Investor’s Business Daily, Brad Kelly (08/29/2008)
"There is a really attractive market emerging for the small investor," says Eric O'Keefe, editor-in-chief of Land Report magazine. "With credit tightening, what you're seeing in essence is some of the air being let out of the bubble that was driving prices up."
Buying land is no slam-dunk. An investor must be able to judge which land is most apt to deliver a profit down the road and be able to hold onto the property long enough to benefit.
Also, variations in prices make these kinds of investments painful for the faint of heart. For instance, the Texas real estate commission reported that land prices went up by 20 percent in 2007. But land values in Southern California have tumbled at least 50 percent along the coast and as high as 90 percent. inland, investors say.
Plus, ownership can be expensive. Besides high borrowing costs, there are property taxes and liability insurance costs to pay.
Nevertheless, some investors are convinced now is the time. "It's a delicate business, but it's just about bad enough to be good again," says William Shopoff, chief executive of Shopoff Group, a real estate investment firm in Irvine, Calif.
Source: Investor’s Business Daily, Brad Kelly (08/29/2008)
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