Should You Get A Reverse Mortgage On Your Wesley Chapel Home?

Commercials are all over the TV about getting reverse mortgages on your Wesley Chapel home. Sounds great, but there's a lot of conflicting information going around about reverse mortgages. Can you qualify for a reverse mortgage? Will it affect your Social Security benefits or Medicare coverage? Here are some quick answers to your reverse mortgage questions:

• Who qualifies for a reverse mortgage? The very first requirement is that the borrower be at least 62. There aren't any income or credit limitations for a reverse mortgage. Even if you don't have money to put down, and you're on a fixed income, you can be approved for this type of loan.


• How much can I get with a reverse mortgage? A reverse mortgage is based on the equity in your home and the age of the youngest borrower. An older borrower will be able to get a higher loan amount than a younger borrower.


• What is the approval process like? The loan process is similar to that of a conventional mortgage. Your Tampa Area home will have to be inspected and appraised for a reverse mortgage.


• How will I get my loan? You can receive your loan as a lump sum, a line of credit, or even get monthly payments sent to you. A line of credit will have a variable interest rate, but because you are only paying interest on the money that you have actually borrowed, you could actually save money on interest. You can use the line of credit just like a checking account. Loan proceeds from a reverse mortgage can be used for anything you want.


• Will a reverse mortgage affect my Social Security benefits or Medicare? No, funds from a reverse mortgage do not affect government benefits.


• When do I have to repay the loan? You will not have to make a payment the entire time you live in your Wesley Chapel home.

A reverse mortgage could help make your later years financially easier. But, before making a decision to get a reverse mortgage be sure to read all the fine print and do your homework to be sure this is the best financial decision for you.

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LINKS:

Social Security benefits: http://www.ssa.gov/

Reverse mortgage: http://www.aarp.org/money/personal/reverse_mortgages/

Line of credit: http://www.investorwords.com/2830/line_of_credit.html

How the Stimulus Bill Can Help You Get a Wesley Chapel Area Home

There are several indications that the new stimulus bill passed by Congress will have a positive influence on the struggling housing market. If you are considering buying a Wesley Chapel area home for the first time the stimulus plan may help make that happen.

How the Stimulus Bill Stimulates the Bottom Line

The biggest effect the stimulus plan will have on new home buyers is a tax incentive. We all want to get more money back on our tax returns and the stimulus bill has an $8,000 tax credit for first-time home buyers purchasing a Wesley Chapel area home.

How You Qualify

In order to qualify for the stimulus tax incentive you must:

• Not have owned a home in the past three years.
• Use the new home as your primary residence.
• Have an income of less than $75,000 per person or $150,000 per couple.

No action is necessary other than reporting the purchase on your income tax filings. You must keep your home for at least 36 months in order to not have to pay back the incentive in the following tax year. If, however, you keep your new home for 36 months or longer you never have to repay the incentive.

Stimulating Interest on Wesley Chapel Area Home Purchases

The stimulus bill also gives first-time home buyers a chance to get into those big ticket houses. Houses with market values over $417,000 may be eligible for lower interest rates to make them more affordable. The luxury home industry has stagnated in the falling real estate market and this should give it a vital boost.

President Obama's stimulus plan is serious about improving the housing market. The bill gives people looking to buy a Wesley Chapel area home reason to hope.

Interested in more information on how the stimulus plan can you help buy a home? Call me at 813-469-3163, or, if you prefer to remain anonymous, email me at Info@SweetHomeTampa.com. I'll never share your contact information with anyone for any reason.

Offers and Counteroffers - Close but not Close Enough

On a few real estate deals over the past years, I have had times where the buyer's make an offer with a series of counteroffers following. Suddenly, we are just a few thousand dollars or so apart. Most times we negotiate back and forth and come to an agreeable price.

However, in a few cases neither side will budge. Whether I am the listing or buyers agent, we often hear the same things over and over. The seller of course says their home is worth every penny and then some, and they just are not going to take any further loss, and they say why can't the buyer come up a bit, while the buyer can't figure out why any seller would be willing to lose a deal over a few thousand.

It is important in cases such as this is to look at what the $10,000 difference means to the seller and buyer at the closing table.

First, with the seller it means the seller will receive $10,000 less at the closing table. Especially in times where the home values have declined $10,000 can make a huge difference to the seller. When the listing agent gives the seller their net sheet showing what they will net when the sale goes through, they see in black and white how much $10,000 can impact their bottom line.

Now let's look at the typical buyer. What does the $10,000 mean to them at the closing table. If they are putting 20% down, then this translates into having to bring $2,000 more to the closing table.

At the closing table, it would cost the seller $10,000 while it would cost the buyer $2,000. Of course, after the closing, the mortgage payment would at 6% interest go up by $47.96 per month. At $47.96 per month it would take 14 years for the buyer to actually pay out the $10,000 that the seller would lose in one day. That also includes the original $2,000 the buyer would have to bring to the closing table.

From the sellers viewpoint they have more to lose, at least at the closing table.

For the buyer, it really comes down to how much you love the home, are there others just at nice that you can get for less, is the home worth the price and how long do you plan on living in the home.

Ultimately, in a situation where a relatively small amount separates deal or no deal the buyer can decide to wait out the seller to see if they will eventually come down in price, move onto something else, or agree to pay the higher price. Only you as the buyer can make that decision.

Please note that in the example above I used a figure of $10,000. Obviously, the $10,000 would be a relatively small difference if the home is listed at $500,000 whereas it would be a huge difference in a home that is valued at $100,000. Therefore, often in a home that is $100,000 or $200,000 we are often looking at differences between buyers and sellers of $2,000 or so. For each $1,000 with a 6% mortgage rate you are looking at paying approximately $6.00 more per month. With rates now around 5% it would be $5.37 per month per each $1,000 of mortgage.

Possible 4.5% Mortgage Rates

Today it was reported by anonymous sources that Treasury Secretary Henry Paulson is considering purchasing many more mortgage backed securities issuecd by Fannie Mae and Freddie Mac that would be used to press the mortgage interest rates down to 4.5%.

Apparently, this would only be for new loans and not intended for refinancing. What could this mean for the depressed housing market. We will look at an example.

Presently the rate is approximately 5.75% for a 30 year conventional loan. For a $200,000 mortgage the payment would be $1,167.15. At 4.5% as proposed on the same loan the payment would be $1,013.37 which would save the new homeowner $153.78 per month.

This lowered rate would allow many buyers to qualify for a larger home at a lower payment. Analysts today predicted this could result in anywhere from 500,000 to several million more home sales. Although this new lower rate would not help save people from foreclosure, if it is true that it could not be used to refinance existing loans it would result in more foreclosed homes to sell, and would likely result in stabilization in prices.

At the same time the FDIC is proposing rewriting existing loans for those that pay more than 31% of their income toward a home loan. This could help reduce the number of foreclosures while the lower rate would likely result in a good increase in sales.

Tampa Area Home & Condo Sales Fall

Tampa Area Home & Condo Sales Fall in Third Quarter

The Florida Association of Realtors reports that home sales in the third quarter fell 43% from the same time last year and condo sales fell a whopping 46%, Even with these statistics we are on course for the third best year of sales in history.

How can this be? The biggest problem is that so many investors bought up much of the new home supply in the last few years. Builders last year put a stop to much of the investor sales. Now the investors are all trying to sell at the same time, along with the normal sellers. The inventory of homes is more than four times higher than this time last year. Until the inventory gets absorbed it is likely that we will continue to have a buyers market. Lots of homes are selling. In fact this year there have been 16,934 residential sales year to date whereas last year at this time there were 21,993. Lower yes, but not terrible.

Sellers are often trying to get top dollar, while buyers are looking for bargains. The buyers we work with are now sitting and waiting until prices drop significantly. Unfortunately, know one knows if they will go lower or how low. This is a hard time to sell and a great time to buy.

How to Sell in This Market

When you truly want to sell your home, the market we are in requires a couple of items to get your home sold. These include;

Price - Pricing a home properly is 90% of getting a home sold. An overpriced home will not sell. For example in the 1,800 - 2,100 square foot range there are presently 347 homes for sale in the Wesley Chapel and New Tampa area. If your asking price is even a small amount above your competition, you may end up with no showings and no offers. Correct pricing is the most important thing a seller can do. Your Realtor can assist you in choosing the right price. Your home price must appeal to the buyers who comparison shop and quickly learn the right price.
Marketing - In 2005 there were often offers before a sign even went up in the yard. In 2006 a sign, a listing on the MLS and on Realtor.com are not enough. Top Realtors use much more to get homes sold now. This can include marketing the home on multiple websites, high quality flyers, mailings, networking, address specific websites, virtual tours, multiple photos online, home magazines, newspapers, and showcase enhanced listings and Featured Homes on Realtor.com. They also offer incentives to the 7,500 other Realtors in the Tampa area to show your home first. Realtors must spend money to get your home marketed properly. Top Realtors also realize that they must market to the 70% of Tampa buyers who come from out of the area, rather than just to the local market. The more potential buyers see your home, the more likely it is the home will sell. Find out how much marketing your Realtor provides. Interview at least two or three Realtors and compare their marketing plan.
Make your home easy to show - In the Multiple Listing Service (MLS) we sometimes see a listing our buyer likes, but in the remarks it says something like requires 48 hour notice to show or showings only on Saturday or Sunday. If the buyer is here from another state and leaves tomorrow, you may have just lost a sale. Often when a owner shows their own home, they work during the day and cannot show until the evening, however that may not be convenient to the buyer. Again lost sale. The easier to show the better and if the home can be shown on short notice or with no notice as in a vacant home this creates more buyer traffic.
Make your home a pleasure to show - The home should be appealing inside and out. If there is no curb appeal the buyer may never make it in the door.

Buying in This Market

Last year sellers held the upper hand but now in 2006 buyers feel in control. When buying go see several homes and pick out the ones you like and have your Realtor prepare a Comparative Market Analysis on the ones you are thinking of making an offer on. Realize that many homes are overpriced, yet there are many sellers that have their home priced right. Base your offer price on the approximate market value shown in the Comparative Market Analysis rather than just discounting the offer price by a certain amount. Buyers lose out on homes regularly when they offer way below market value. A properly priced home with great marketing will still sell quickly, but it is a great time to be a buyer!