7 Common Selling Doubts to Ignore and One to Consider

Monday, October 10th, 2016

Selling a house can be downright stressful. Here are seven such doubts that most sellers experience and should be ignored, and one to consider when placing your house on the market.

selling a home

  1. My home won’t sell. It’s not the right season.

The housing market doesn’t slow down in the fall or winter. In fact, some research suggests that this time of year is optimal to purchase a property. There are fewer buyers to compete with, sellers are motivated, and prices are generally lower.

  1. I need to do renovations in order to get it into selling condition

Many homeowners are embarrassed about their home’s condition when they first put it on the market. What is more embarrassing, however, is missing out on an opportunity to capitalize on your investment. Selling a home requires work and that work directly correlates to the sale price of your home.

  1. I don’t like strangers walking through my house when I still live here

Using a Reverse Mortgage to Purchase a Home

Tuesday, July 5th, 2016

The other day, a client came into my office and asked me about a using a reverse mortgage to purchase a property. They said they had heard some negative things from relatives but had recently seen articles that painted a very different picture.  They asked for my opinion. I told them that it is critically important to hire a trusted mortgage advisor. We set about to get the facts and become educated on using a reverse mortgage for purchase.

reverse mortgage

We made contact with Reverse Mortgage Planner Kent Montavon from Fairway Independent Mortgage Corporation. He and his business partner Bill Niehus help buyers and homeowners exclusively with reverse mortgages. They arrange reverse mortgages that are called Home Equity Conversion Mortgages (HECM). It turns out that, for folks over 62 years of age, reverse mortgages could become a “go to” product for purchasing or refinancing a home. Here is what I learned:

Consider Buying a House Sooner Rather Than Later

Tuesday, October 8th, 2013

The reasons to buy a home before 2014 include everything from rising mortgage interest rates and home prices, to falling affordability indexes, rising interest rates, and the fear of inflation.

Find your dream home with Alaris Properties

Reason #1: Interest Rates Will Rise
One problem with historically low mortgage interest rates is that they have nowhere to go but up. We have seen some stability; however the prediction is that rates will begin to rise.

Reason #2: Homes Are Still Affordable but are Rising
Housing price trends vary significantly by location and even by neighborhood, but the average housing prices trends across the country look promising for prospective homebuyers. However, they will continue to rise. The Home Price Expectation Survey projects an increase in home values over the next five years to be between 12.3% and 32.8%. If you wait longer, chances are that your home will cost more.

Mortgage Forgiveness Debt Relief Act

Thursday, January 10th, 2013

Under normal circumstances, debt forgiven as a result of a short sale or mortgage modification would count as income for tax purposes. Lenders send out 1099s to account for the amount of the debt they have forgiven.

However, the Mortgage Forgiveness Debt Relief Act (Act) that was passed in 2007 states that mortgage debt that is forgiven (for instance in a short sale) can be excluded from income, with certain limits, so long as the taxpayer qualifies under the Act. In 2008, Congress extended the Act through 2012. Because of the “fiscal cliff”, many were worried whether the Act would be extended again; however, as part of the American Taxpayer Relief Act of 2012, the Mortgage Forgiveness Debt Act was extended to December 31, 2013.

It’s important to note that the American Taxpayer Relief Act extends dozens of other tax cuts that were scheduled to expire. Check with your tax professional to see if you may qualify under the Mortgage Forgiveness Debt Relief Act and how you may be able to take advantage of other tax cuts included in the American Taxpayer Relief Act.

A Simple Explanation Of The Federal Reserve Statement (June 20, 2012)

Wednesday, June 27th, 2012

Putting the FOMC statement in plain EnglishThe Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent Wednesday. For the fifth consecutive meeting, the Fed Funds Rate vote was nearly unanimous.  Just one FOMC member, Richmond Federal Reserve President Jeffrey Lacker, dissented in the 9-1 vote.  The Fed Funds Rate has been near zero percent since December 2008.

In its press release, the Federal Reserve noted that the U.S. economy has been “expanding moderately” this year.  Beyond the next few quarters, the Fed expects growth to “pick up very gradually”.  In addition, the Fed re-acknowledged that “strains in global financial markets” continue to pose “significant downside risks” to the U.S. economic outlook.  This statement is a repeat from the FOMC’s April press release and is in reference to the sovereign debt concerns of Greece, Spain and Italy, plus the potential for a broader European economic slowdown.

The Fed’s statement also included the following economic observations :

Mortgage Payments Fall To All-Time Lows

Monday, June 25th, 2012

Mortgage payments

It’s a money-saving time to be a Denver area home buyer.  Historically, mortgage rates of all types — conventional, FHA, VA and USDA — have never been lower and low mortgage rates make for low monthly payments.

According to Freddie Mac’s weekly mortgage rate survey, the average 30-year fixed rate mortgage fell to 3.67% nationwide earlier this month for borrowers willing to pay 0.7 discount points at closing, plus a full set of closing costs.  0.7 discount points is a one-time closing cost equal to 0.7 percent of your loan size, or $700 per $100,000 borrowed.  Today’s mortgage rates are a bargain as compared to just 1 year ago.

In early-June 2011, the average 30-year fixed rate mortgage nationwide was higher by 88 basis points, or 0.88%.  If you are among the many U.S. homeowners who bought or refinanced a home around that time, refinancing to today’s mortgage rates could save you 10% or more on your payment.  Home buyers have measurably more buying power, too.

Mortgage Guidelines Resume Tightening Nationwide

Thursday, May 3rd, 2012

Senior Loan Officer SurveyDespite an improving U.S. economy, the nation’s banks remain cautious about what they will lend, and to whom.  Last quarter, by a margin of 3-to-2, more banks tightened residential mortgage lending standards for “prime borrowers” than did loosen them.

A “prime borrower” is defined as one with a well-documented credit history, high credit scores, and a low debt-to-income ratio.  The insight comes from the Federal Reserve’s quarterly survey of its member banks.

Last quarter, of the 54 responding banks :

  • 0 banks tightened mortgage guidelines considerably
  • 3 banks tightened mortgage guidelines somewhat
  • 49 banks left guidelines basically unchanged
  • 2 banks eased mortgage guidelines somewhat
  • 0 banks eased mortgage guidelines considerably

By contrast, in the quarter prior, not a single surveyed bank reported tighter residential mortgage guidelines.  The period from January-March was a step backwards, therefore, for the fledgling U.S. housing market.  Overall, getting approved for a mortgage is tougher than it used to be. Banks enforce higher minimum credit score standards; ask for larger downpayment/equity positions; and require higher monthly income relative to monthly debt obligations.  It’s one reason why the homeownership rate is at its lowest point since 1997.

Fed Minutes Causes Mortgage Rates To Rise Suddenly

Wednesday, April 4th, 2012

FOMC Minutes March 2012The Federal Reserve has released the minutes from its last FOMC meeting, a 1-day affair held March 13, 2012. Mortgage rates in Colorado are rising on the news.   For the un-indoctrinated, 3 weeks after it meets, the Federal Open Market Committee, the sub-group within the Federal Reserve that votes on U.S. monetary policy, publishes its meeting minutes.

Similar to the minutes from a corporate event, or condominium association meeting, the Fed Minutes recounts the conversations and debates that transpired throughout the meeting.  The Fed Minutes is a lengthy publication, often filling 10 pages or more.  By contrast, the more well-known publication from the FOMC — its post-meeting press release — tends to span 6 paragraphs or less.

The extra detail contained within the Fed Minutes is Wall Street fodder, especially given the current economic uncertainty.  Investors look to the Federal Reserve for clues about what’s next for the U.S. economy.  Lately, the minutes has made an out-sized impact on mortgage rates.  The Fed’s words continue to swing the mortgage-backed bond market.  Today is no different.

Mortgage Rates Fall Back Below 4%

Friday, March 30th, 2012

Freddie Mac Weekly Mortgage Rates

After a brief run-up two weeks ago, mortgage rates are back below 4 percent. It’s good news for home buyers and mortgage rate shoppers because, with lower mortgage rates, we can lower the amount of mortgage payments.   According to Freddie Mac’s weekly Primary Mortgage Market Survey, the national average 30-year fixed rate mortgage rate fell to 3.99 percent this week from last week’s 4.08 percent.

Last week had marked the first time since December 2011 that the benchmark rate crossed north of 4 percent — a span of 16 weeks.  And, it wasn’t just rates that got cheaper this week — closing costs dropped too.  Freddie Mac’s survey showed that the average number of discount points to accompany a 30-year fixed rate mortgage fell one-tenth of a percent this week to 0.7, where one discount point is equal to one percent of your loan size.

Pay Your Mortgage Early, Boost Your 2011 Federal Income Tax Deductions

Friday, December 23rd, 2011

Increase your 2011 tax deductionsTime is running out to boost to your 2011 federal tax refund.  All you have to do is make your January 2012 mortgage payment while it’s still December.

It’s a simple tax strategy that works because of how mortgage interest is paid, and of how the U.S. tax code is written.  Different from rent which is paid for the month ahead (i.e. “you’re paying January’s rent”), mortgage payments are made only after mortgage interest has accrued (i.e. “you’re paying for money you’ve already borrowed from the bank”).  This is called “paying interest in arrears” and U.S. tax code states that the mortgage interest is tax-deductible in its year paid, subject to limitations.

By making the January 2012 mortgage payment in December 2011, homeowners who itemize their tax returns can apply their January mortgage payment’s interest portion to their 2011’s tax returns.  The alternative is to pay the mortgage on schedule and wait for April 15, 2013 to claim the credit.