Jessica Lynch

Welcome to Your Monthly Newsletter provided by Jessica Lynch, Your Lifelong REALTOR!

Dear FRIEND,

     Analyzing specific neighborhoods to know which are the best for your real estate needs and longterm goals is crucial to your success in buying a great investment.  With the changes that we face now -- many not so good, hesitance to spend money on investments is understandable.  If you do have the money to spend, however, now is the time to buy!  
 

     Remember that changes in property value are first and foremost a neighborhood to neighborhood event.  The Denver Metro area as you may know experiences "pockets" of depreciation, stagnancy and believe it or not appreciation.  Several neighborhoods in the Denver Metro area experienced 1% or better!  Sadly, others experienced a 3% or more decline.  I have the proof if your curious.  Our real estate boom in the mid 2000s was largely due to the home loan craze (where fraudulent loan practices were abundant) coupled with a surge in luxury home sales.  These high end sales significantly drove up average home sales in the Denver Metro area.  Unfortunately, luxury was the first to get hit hard during the home financing crisis driving our average price index down with them.  "Average" is the key word here.  Not all homes in our market experienced the same decline, some remained the same value and some experienced appreciation.  As I mentioned above, analyzing the specific neighborhoods to know which are the best for your real estate needs and longterm goals is crucial to your success in buying a great investment.  

     Denver as a whole out of many other cities in the country only experienced a 4.3 overall decline since last year as you may have read in a recent Denver Post article.  Twenty cities including Denver were analyzed and altogether averaged an 18.2 percent decline.  According to the article, Denver home prices dropped 1.1% from October to November as posted in the S&P/Case-Schiller index.  By the end of November, they were down just 4.3%.  When we'll hit the bottom of this decline and recession is uncertain, but we know that historically values go right back up afterward. 

    Beware of holding out too long or trying to time the market.  Interest rates are going up despite what you hear on the news about the Fed's bond spending. The more consumers hold off on spending, the more we all experience deflation.  Experts say that now boasts many perks for home buyers, especially first-time home buyers.  Interest rates are still rather low, home prices are of course at a historical low, and first-time homebuyers can claim a significant tax credit if they purchase a home by July 1, 2009.  There is even progress being made to approving a better tax credit for possibly all buyers not only first-time buyers.  Please read this issue's article titled, "Potential Boost For Home Buyer" for more details.

     Don't spend money you don't have, of course, but keep your eyes open for good deals... they are out there right now!  If you have the money to invest, right now is a great time to buy real estate.

     Let me know if you or those you know might need help meeting real estate goals.  If you have questions, don't hesitate to contact me.  I am always here for you and more than happy to help you!

The Very Best of Success and Happiness to You & Yours! 

Jessica Lynch, ABR

Your Lifelong REALTOR

Senate OKs $15,000 Bonus for Home Buyers

Housing could get a big boost from the latest addition to the mammoth stimulus bill working its way through Congress.

Senate legislators unanimously approved a proposal Wednesday that would allow a tax credit for home buyers of 10 percent of the value of new or existing residences, up to a $15,000 limit. Current law provides for a $7,500 tax break but only for first-time homebuyers.
"It is time to fix housing first," said Sen. Johnny Isakson, R-G.

Isakson's office said the proposal would cost the government an estimated $19 billion. In all, the stimulus is now topping an estimated $920 billion.

In an op-ed that appears in Thursday's Washington Post, President Barack Obama painted a dire picture if Congress fails to move quickly to pass the stimulus bill.

"This recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse," Obama wrote in the op-ed titled, "The Action Americans Need."

Specifically, the Isakson-Lieberman amendment to the pending economic stimulus bill would provide a direct tax credit to any homebuyer who purchases any home. The amount of the tax credit would be $15,000 or 10 percent of the purchase price, whichever is less. Purchases must be made within one year of the legislation's enactment, and the tax credit would not have to be repaid.
 
The amendment would allow taxpayers to claim the credit on their 2008 income tax return. It also seeks to prevent misuse by only allowing purchases of a principle residence and by recapturing the credit if the home is sold within two years of purchase. The amendment would sunset the current $7,500 housing tax credit on the date of enactment.
 
While the final details of the Stimulus Bill are still being debated, this amendment represents a tremendous step forward in NAR's efforts to stabilize housing markets around the nation.  Because of the efforts of REALTORS®, we expect the final Economic Stimulus Bill will contain several major housing provisions. 

Sources: The Associated Press, David Espo (02/05/09) from Realtor Magazine Online; and the National Association of REALTORs (NAR). 

Strategies for Refinancing a Troubled Loan

By Marcie Geffner, bankrate.com | Published: 1/26/2009

Homeowners with financial trouble wanting to refinance their mortgages to better rates may be pleased to know there are still options out there for them. There are strategies available to help overcome challenges such as inadequate income, excessive debt, negative equity or poor credit.

The challenges aren't imaginary. Lenders have indeed tightened their standards, and there are few good solutions to common problems, according to Robert Satrick, president of Prime Financial Services in Van Nuys, Calif., and chairman of the California Mortgage Bankers Association in Sacramento.

"That sounds harsh. I know that," he says. "But that's the reality of the way it is."

The most common problem is a lack of equity, which lenders measure as a component of your loan-to-value, or LTV, ratio. If you refinanced your original mortgage to take out cash, bought your home without a down payment, obtained an interest-only or payment-option mortgage, or if your property has declined significantly in value, you may be among the homeowners who are most likely to encounter this problem.

The typical LTV ratio most lenders require today is 80 percent, though there may be some flexibility in that figure.

One strategy to overcome this problem is to lower your loan amount, so your LTV will fall within the guidelines, says Jim Linnane, senior vice president of Wells Fargo Home Mortgage in Chicago.

That can be accomplished through a lump-sum payment, a gradual reduction of principal or both. A lump sum can be applied from a savings or retirement account, sale of another asset, income tax refund or bonus while a gradual reduction in principal can be achieved through biweekly payments or extra payments applied to principal, Linnane suggests.

"If you can apply $300, $400 or $500 a month toward your principal over a period of time, that's not only lowering your principal, but it's also lowering the interest that's being charged on your outstanding principal, so you are accelerating your principal reduction even faster," he says.

You'll have to forgo any income that might have been earned from that extra money, so your goal should be not just to refinance your mortgage, but also to achieve a "better overall financial situation," says Peter Thompson, a senior loan officer with Professional Mortgage Partners in Downers Grove, Ill.

If your mortgage is insured by the Federal Housing Administration, or FHA, you might be able to qualify for a so-called "streamlined" refinance that doesn't require an appraisal. More information about this program can be found on the U.S. Department of Urban Development's Web site, www.hud.gov.

Mortgage insurance, which protects the lender from loss if you default on your loan, also may be a way to overcome insufficient equity. The catch is that you'll have to pay mortgage insurance premiums and that could negate the benefits of the refinance. You'll need to do the math to figure out whether this trade-off makes sense for you.

If you have a second loan and the lender refuses to subordinate, you might want to combine both of your loans into one new loan. If you obtained your second loan through the same lender as your first and as part of your purchase-money financing, you may be in a better position to combine the two loans than if you obtained your second loan later on. In that case, you'll be subject to more strict guidelines because your refinance will be considered a cash-out, rather than a conventional rate-and-term refinance.

Income and debt are two sides of the same coin because lenders use both factors to calculate a debt-to-income or DTI ratio. This ratio is important because lenders want to feel confident that you earn enough income to keep up your mortgage payments. If you've suffered a loss of income, overstated your income on your original loan application, are self-employed or have taken on additional debts, you're most likely to be among the many homeowners who face this type of problem.

The debt-to-income ratio is essentially "about affordability," Satrick says. "Either they can afford it or they can't." If you're in the latter group, you might be able to obtain relief through a loan modification instead of a refinance.

Lenders typically look for a DTI ratio that's no more than 38 percent (your debt is no more than 38 percent of your income); however, DTI is a complicated issue and lenders' guidelines vary, so it's a good idea to discuss your situation with a loan officer.

Distributed by Scripps Howard News Service.

Article found at www.Frontdoor.com. Check out Frontdoor.com for more useful articles about home buying, home selling, home remodeling and today's real estate market.

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5 Refinancing Must-Reads: What Should You Do?

Thinking of refinancing but queasy at the thought? We know it can be a complex process (especially with the recent slew of regulations), but for many homeowners it's the best way to save some cash.

From finding the right appraiser to understanding loan modification programs, these five examples from Trulia Voices will give you a crash course on refinancing basics. Still not sure about your situation? Ask the Voices community of homeowners and experts to find out if refinancing is the thing for you. 

1. What are appraisers looking for?

2. Can you explain the confusing refinancing rules?

3. Do loan modification programs actually work?

4. What is the FHA "Hope For Homeowners" plan?(Refinancing hope for homeowners in distress) 

5. What's the story on California loans?

For more about Trulia Voices, click HERE. 

 
Article found at www.Trulia.com.  Find helpful articles and more at Trulia.com.

Tips for Home Buyers and Sellers in 2009

By Steve McLinden, bankrate.com | Published: 1/07/2009 

In residential real estate, 2009 arrives much the same way that 2008 did: via a rocky road with deepening potholes. While more homebuyers are swooping in and picking up great deal, and sales are slowly increasing in many markets, the ongoing excess of inventory of foreclosed homes continues to depress the market.

While potential buyers are now getting very low mortgage rates, they are also facing much tighter credit standards and demands for significantly larger down payments. And we haven't even started absorbing the financial fallout from adjustable-rate mortgages slated to ratchet up in 2009.

No one can really say quite when this downward spiral will cease. If former Fed Chairman Alan Greenspan and current Chairman Ben Bernanke were surprised by the depth of this housing crisis, who among us can accurately make the call?

There are growing sentiments out there that this darkness directly precedes a new dawn. A late-2008 consensus survey by PricewaterhouseCoopers and the Urban Land Institute, based on input from more than 600 industry experts, projects the U.S. residential market should start rebounding appreciably in 2010.

But what about now? This new economy has added some new wrinkles to home-buying and home-selling strategies, while reintroducing some of those old-school favorites like sound fundamental fiscal practices. So here are some tips for homebuyers and sellers to help them survive, and even thrive, in the transition year of 2009.

Tips for Homebuyers

Cash is the new king. If you can spare the cash, brother, it has a heck of a lot more buying clout now. In the past, we've tried to persuade people to seek out more liquid investments for their cash on hand and grab an easy-to-get, low-interest mortgage. Now, with the equity markets depressed at the same time that mortgage loans are hard to find, the tables have turned. Those wielding ready cash in a recession are always ahead of the game.

Negotiate extras ... and more extras. This is a no-brainer in the current market. But while sellers continue to offer throw-ins such as built-in appliances, flat-screen TVs and even cars, the best throw-ins are always the ones that take monetary form. Think paid closing costs, a year's worth of property taxes, repair credits and paid homeowners association dues, to name only a few.

Determine your own home-buying budget. Do this before you start talking with lenders. They will tell you what you qualify for, but only you can determine what you can really afford.

Research = savings. Agents will almost always tell you that the time to buy is now. But do your own research. Go online to scour newspapers and other local sources, and look for housing inventory backlogs, the average "for sale" time that the home is on the market and average selling prices.

Watch for foreclosed-property inventory to loosen. Banks will soon be under greater pressure to cut their losses on property they own through foreclosure and to increase revenues. With a smaller percentage of distressed homes selling at auction, banks are loaded up with more of these "nonperforming assets."

Tips for Home Sellers

Price correctly from the get-go. Unless you're living in a handful of relatively stable U.S. markets, don't start out too high-priced just to "test the waters." Your backup plan of adjusting on the fly may prove futile. Keep that window of opportunity open from the first time the "for sale" sign appears on your lawn. The first 30 days a home is on the market are when it gets the most attention from potential buyers and their agents.

Looks do matter. Don't underestimate the importance of curb appeal. Not only is there an acute price war going on out there, there's also a beauty contest being staged. You may be strategically located in a quiet cul-de-sac, near great schools, great health-care facilities and fabulous shopping, and you may have easy highway access for that morning commute, but unless your exterior is well coifed and in sparkling condition, other offerings will outshine it.

Don't overdo it. By contrast, if you go too far in improving your place, you likely will not be able to recoup your remodeling investment.

Don't be an ambiguous seller. Either you are going to sell or you aren't. Why waste everyone's time, including yours? If you manage to fetch a decent offer with a test listing in this market, commit to sell. You may be able to buy a better replacement house at a disproportionately lower price with so many steals still out there.

Distributed by Scripps Howard News Service.

Article found at www.Frontdoor.com.  Check out Frontdoor.com for more useful articles about home buying, home selling, home remodeling and today's real estate market.