TO MOVE OR NOT TO MOVE...THAT IS THE QUESTION!

This week I had a number of clients call me and ask whether they should move or not. The challenge is almost always the same. They concentrate on the fact that (most likely) their current house is worth less. That fact seems to freeze people in their tracks. What they forget is that the home they are going to buy has probably also dropped in value, especially if they are moving to a bigger home. In this market it's all about #1 location and #2 is tied for amenities and size. When people are confused they freeze. It is one of the best times to buy right now because interests and prices are both the lowest they have been in many, many years. Rejoice in that and do your homework! This market is a blessing if you have the right perspective, knowledge and strategy.

Can't Afford to Buy a House? Now What?!

A client-friend of mine, Stephanie, was distraught because she got tried to get a pre-approval and because of a nasty divorce situation her credit was shot. She was incredibly depressed about her situation. I sent her the following email. Hope it inspires you with your Plan B!

It's all about building a life to get to where you want to be.
You seem to be the type of person who knows with her whole heart
that we are spirits living in these borrowed bodies.

What you need is a plan. You are at Point A and want to get to Point B.
Does not mean you can get there overnight but if you don't plan you
will never get to Point B (and will miss tons of fun!)

To develop your plan B you need to write down all your HAVES, things you
already have. Start here:

-My credit score is__________, to buy a house it needs to be at least__________________.
-For me to raise my credit score I need to:
1.
2.
3.
4.
5.
-I have $______________ to put for a down payment, to buy a house it needs to be at least _______________.
-For me to save that money I need to:
1.
2.
3.
4.
5.
-What areas/towns am I willing to live in?
-Am I willing to be a landlord?
-Am I willing to live in a condo?
-Am I willing to have roommates?
-What kind of place am I looking for if money were no obstacle? (lots of detail here)

Have fun with this initial list and see how your soul flies with it!

Big hugs,
Mariaaaaaaaaaaaa
:)

Upside Down On My House...

Are you upside down on your house? (Upside down means you owe more to the bank thatn the house is now worth.) Well, I have heard from two people now who have had their banks contact them and ask them if they want to refinance to a lower rate. Not only that, but for those who qualify they will be able to get a reduction in the amount of their loan too! YES! It's true. Part of the stimulus package that Obama has created allows banks for those of us who have not defaulted on our loans but are upside down. They are allowing a forgiveness of 20-25% for those who fit their criteria too! People to have to get PMI insurance but who cares! My friend paid a tad over $620,000 for her home and owed about $550,000 at 8.5% on it when the market tanked. Now she had it reduced to 5% and $430,000!!! Not bad eh?!

If you don't understand something in this post let me know and I will do my best to send you an explanation. Just remember there is hope!

Mariaaaaaaaaaaaa
:)

Signs of Spring...

Finally, some hopeful signs for the spring market

Last week the stock market began to rally. It’s anyone’s guess how long this spring thaw on Wall Street will last, but we have to take the good news as it comes. It's like the little green shoots that s-l-o-w-l-y start ripping through the winter's debris. Any good news at this point on the economy is bound to provide a boost of some sort to the battered housing market.

And the stock market is not the only thing to watch! There are other signs as well. Residential construction, after falling for countless months, rebounded by a surprising 22 percent in February. Apartment construction led the way – not surprising since the falloff in demand for new condos and homes has created renewed interest in lending.

Other signs are that residential sales have also slowed in their decline.

The latest nudge to the economy is the Fed’s equally surprising move to infuse an addition $1 trillion into its campaign to warm up still stagnant lending markets. The Fed will buy an additional $750 million in government-guaranteed mortgage back securities and another $300 billion in longer-term Treasury securities.

All this should further lower interest rates on all loans, including mortgages, the NY Times reports in its story on the Fed’s move.

For those of you who are looking to buy, the water is getting warmer...seems that a lot of your fellow buyers have stuck in their toes and are now jumping in!

Mariaaaaaaaaa
:)

Mortgage Lifeline For Those Who Are Current WithTheir Mortgage! YEAH!

Here is some exciting news from one of our mortgage broker friends, Mona Wong, mom of adorable twins...

Mariaaaaaaaaaaaa
:)


Hi-

March 4th is when the guidelines will be rolled out for the housing plan. This will allow some of those who are in a situation where they are current with their mortgage but can not refinance because of the value. If you or someone you know who can benefit from this please have them contact me so that I can help them get their documents together and ready for march 4th. It may not be able to help everyone, but it looks promising….

Any questions please contact me.

Thank you!
Mona

Thank you for your business!

Mona SooHoo Wong
Mortgage Consultant
mwong@village-capital.com
c) 617-818-7430
f) 877-504-8357

Divorce and the Housing Crisis

I often search other websites for helpful information. I oftentimes find myself visiting www.http://massachusettsmom.blogspot.com/ Last week's post was quite interesting... I would suggest going there too because she has additional comments in the next post that is worth reading too!

Mariaaaaaaaaaaa
:)

Tuesday, December 30, 2008

Divorce and the Housing Crisis

There's one more story I can't resist commenting on and that's this one about couples who are having a hard time splitting up in this economy. In some cases, the couples were counting on the equity in their homes to start anew but now there's no equity. In other cases, each partner is trying to stick the other one with a house that can't be sold.
But it's Josh Kaufman of Cleveland who really caught my attention. It won't be real hard to figure out why Mr. Kaufman is getting a divorce after you read this. It seems Mr. Kaufman viewed the whole split as a "business" arrangement and, as his wife couldn't afford to buy the house from him, he just waited her out until the house lost so much value that eventually he didn't have to pay her a thing. Not one dime for the house that was appraised at one time at $1.5 million. There was "no emotion involved" says Kaufman. And, after all, he was just looking for a way to turn a "negative situation around." Now that's a real prince of a guy.
Here's the full story on Kaufman:
"Josh Kaufman and his wife bought a new 6,500-square-foot house outside Cleveland on five and a half acres, with four bedrooms and two three-car garages, that was worth $1.5 million at the height of the market. When they divorced in June, Mr. Kaufman knew his wife could not afford to carry the home. The longer the divorce process continued, the more the house depreciated; by the time he assumed the house, its appraised value was half what the couple had put into it; he did not pay her anything for her share.
“From a negotiating standpoint we knew that she couldn’t afford to stay in it,” Mr. Kaufman said. “It appeared as an opportunity to turn the negative situation around. There was no emotion involved. It was a business decision on what made most financial sense. It wasn’t an attempt to take advantage of someone.”
Still, his lawyer, Andrew A. Zashin, said, “He bought this house at a bargain basement price.”

Here's hoping the next Mrs. Josh Kaufman reads the New York Times, either that or has the sense to keep the house in her name and hire a really, really good lawyer.

Suze Orman Visits MOMSWHOBUYHOMES

It is with great pleasure that we feature Suze Orman who had these important reminders about real estate. As always remember to take a deep breath and read on...


Real Estate Reality

By Suze Orman

The incredible rise in home prices over the past few years has made real estate the "it" investment. We're looking at homes as if they're ever-rising stocks that will never decline in value. But thinking like that can land you in big trouble.

Don't get me wrong: Real estate is a terrific long-term investment, but the key is long-term. Your house is a place in which you and your family will live. Over time you should also expect its value to rise at about the rate of inflation, not at 15 percentage points above it. Even Federal Reserve chairman Alan Greenspan, who fueled the current real estate mania by keeping interest rates low, has said that he expects the hyper-growth to end and that we could even see a decline in prices.

Condos are especially vulnerable. People have been buying up units they'll never live in, hoping to sell them quickly for a profit. But recent sales data shows that condo prices are already beginning to slip. Condos are also spending more time on the market than in previous months.

The only reason to buy now is if you intend to live in the condo or house for at least five years—otherwise, you're taking on a huge risk if we slide into a down market.

If you do have long-term plans and decide to buy, be very careful with the type of mortgage you choose. Steer clear of short-term adjustable rate mortgages or interest-only options. The only types of mortgages that make sense are traditional fixed-rate mortgages or longer-term adjustables (often called hybrids) with an interest rate set for five, seven, or 10 years.

If you're itching to take a risk, buy a pair of avant-garde designer shoes. But when it comes to real estate, you'd be wise to play it conservative.

Another deep breath and you are on your way!

Warm regards,
Mariaaaaaaaaaaaaaa
:)