Archive for the ‘First Time Homebuyers Webinars’ Category

Buying a house is one of the largest financial steps a person can make in their life time.  Learning how to buy a house if the first and most critical step.  Most people go through the home buying process relying on advice from so called experts.  It is extremly important that when you are shopping to buy a home you assemble a solid team to help you through the process.  I think this is one of the most important concepts that all soon to be home buyers need to grasp…buying home takes a team.  The best part about assembling a home buying team is that they don’t require any upfront retainers.  That’s right, your realtor that takes you out to look for a home doesn’t get paid by you.  He or she get’s paid by the seller once the home is sold.  Your mortgage broker or bank doesn’t get paid until the home closes and it is your choice whether you want to pay them or whether you would take a slightly higher rate and receive a credit to cover their fees.  In any event the early planning stages of assembling your team doesn’t cost you anything.  Make sure you are thorough when you select your Realtor and mortgage broker.  Most realtors specialize in an area…don’t get roped into using someone that may be a friend but doesn’t know anything about the area you want to buy in.  You need a local expert that can help you buy your home and make sure you are getting what you expect.  It is important for your Realtor to know certain qualities about the neighborhood such as schools, taxes, events, crime, property trends, etc.   Your mortgage expert also needs to be hand picked.  Your choice should be able to tell you 3 critical items within the first 30 minute conversation.  1. How much you roughly qualify for.  2.  What type of loan product would be best for you.  3.  How much it is going to cost.   If your mortgage expert can not commit to these 3 points during your first interview.  Move on.  Your realtor and your mortgage broker represent the nuts and bolts of your home buying team.  Depending on you tax and financial situation it may also be wise to get your CPA and money manager involved so you are confident you are making the soundest choice with your money.

It is only a matter of time before the major ARM indicies begin to rise.  Once they do, many homeowners who have been trying to time the market are going to get caught in a much higher rate than they should have.  All the signs point to this being the trough for interest rates.  Barring some worldly disaster…party is over.  It is time to lock in your 30 year fixed or forever be an ARM holder.   Most ARMs are tied to the 12 month LIBOR which is down around .8% .  This has been fantastic for most ARM holders who have seen their fully indexed rates be locked in near the low 3’s for another 12 months.  The pain is going to be felt however when the LIBOR trends back to its 5 year average of 3.8%.  Most margins are 2.25% so home owners who were enjoying their 3% rate will be up to 5% and then to 6.25% by the time the rise is over.  I wouldn’t be suprised to see LIBOR hit 5 to 6 and those ARMs restet to the 8% range if any inflation fears come true.  Moral of the story…refinance your ARM asap.

I am not sure why this is not getting more press…

The Fed is winding down their mortgage back securities purchase program which is set to expire on 3/31/2010  The best guestimate as to the rate impact this artificial demand is having on interest rates is somewhere between .5% to .75% in rate.  In addition, the $8,000 tax credit is set to expire on 4/31/2010.  I find it amusing that the two are set to expire so close together.  All we hear from Washington is that they want to “unwind” the stimulus gradually.  Well in the span of 30 days the two main logs in the housing market fireplace are about to be water logged.  I think it will be very interesting to see what happens to housing prices once these two programs come to end.  There are two scenarios:  First, enough people believe the housing market has bottomed and the seasonal spring and summer homebuying demand will carry-on regardless of  no tax credit and rising rates.  This then begs the question…how much of this stimulus was really necessary or did just plain old economics fix the market.    Scenario two, is that we hear a gigantic thud in the housing market come summer.  If the stimulus is pulled out and as a result less buyers come to the table we may see inventories rise and pricese begin to fall again.  There are still millions of homes yet to come on the market via short sale and foreclosure.  In my opinion, the banks have been keeping this phantom inventory tight to their vest and are in no hurry to sell it.  They have already written most of these assets down so when they sell it on the upswing they stand to post some healthy profits. Unfortunately, I beleive this to be the most likely outcome.  Not because there aren’t going to be buers…I think there is just going to ben an ongoing glut of short sales and REO properties coming on to the market as more and more families are wiped out by unemployment and what will soon be rising interest rates on their ARMs and HELOCs.

June and July should tell the tale!

Fannie Mae really is looking to help new home buyers buy one of their properties.  In an effort to help clear their foreclosed property inventory Fannie Mae is offering 3.5% of the final sales price to be used for:

• Closing Costs
• The purchase of a new Whirlpool appliances by Fannie Mae
• A mix of costs and appliances at the buyers discretion, up to a max of 3.5%.

This special runs from 1/28/2010 to 5/1/2010.   Just another incentive for homebuyers to make the move towards homeownership in 2010. 

 For more information regarding this program visit efanniemae.com or give us a call.

Free First Time Home Buyer Live Webinars

Buying your first home can be frightening process. Our mission at The Turnkey Foundation is to take the fear out of home buying by empowering you with facts and knowledge. The more you know about the home buying process, your rights as a buyer, and your loan options the less you will have to rely on other people potentially steering you down the wrong path. All of our webinars are FREE and provide real time answers to biggest questions.