Moscow Idaho Real Estate -- Lori Cofer's Blog: Idaho: Moscow

 

FHA first proposed the monthly mortgage insurance changes in the beginning of 2010. Bill H.R. 5981 was first passed by the House in the spring and was just passed by the Senate the other day.  What does this bill do for FHA mortgages? They have projected that it will yield approximately $300 million per month to the FHA insurance fund.

So what are the new FHA changes? - For terms greater than 15 years -

LTV's <= 95% will increase the monthly fee by 85 bps

LTV's >   95% will increase the monthly fee by 90 bps

And lastly, it will reduce the Upfront Mortgage Insurance Premium, UFMIP, from 225 basis points to 100 basis points.

The plan is to go into effect by September 7th, 2010 on all FHA case numbers. FHA gives it's reasons to this new plan. FHA letter from David H. Stevens

 

 

 

So what do the actual changes mean to the average borrower that will rely on FHA loans when purchasing a new home or refinancing?

                - The Old Plan -

LTV's <= 95% will increase the monthly fee by 50 bps

LTV's >   95% will increase the monthly fee by 55 bps

 

 

Example of the changes regarding the FHA monthly mortgage insurance known as MMI or annual mortgage insurance premium and the FHA upfront mortgage insurance premium known as UFMIP.

UPDATE BELOW in chart - The 2nd column, the upfront mortgage insurance premium, is usually added into the base loan amount. In this scenario, that is what I did. It's not actually a cash savings out of pocket, but just a reduction in the new loan amount.  I guess it wasn't clear, because a few people that this whole change was going to help those with less money out of pocket. The buyer still needs 3.5% out of pocket, which is the down payment.

 

 

 

 

 

 

 

 

 

 

 

As you can see, it would be much cheaper monthly with the old plan, even though you pay $3,317 more upfront, on top of your loan. This can also be a tax write off since it's included in your principal. Your break even point on this type of scenario is 47 months, which is roughly 3.9 years. After this break even point, you would have started to spend more money in reality. This is how FHA will increase it's mortgage fund. As you can see, it won't be increased as quickly upfront, but over a longer period of time. So if you held onto this mortgage for 7 years, you would have spent approximately $2,522 more.

Now, there are several other factors to consider when reviewing this kind of information.  Just for the fact that your original balance on the loan will be $3,317 lower and in 7 years, still be that much lower. And as I mentioned, you would have a little more of a tax advantage on the higher balance though.

All I wanted to do was to present the basics of FHA loans and not get into the extreme details on how one could show either side. What could this do to a potential home buyer?  It could reduce your purchasing power. In this scenario, if you had originally qualified for a $275,000 loan with qualifying ratios of 31/43, what would your new purchase price be.

 

 

- New Purchasing Power after September 6th, 2010 -

With the new FHA monthly mortgage insurance and the FHA upfront mortgage insurance premium changes, your purchasing value would drop approximately $10,000, a purchase price of $265,000. Now, these are just averages, because this will all be based on the actual purchase price. Meaning if values are higher or lower, the total amount could change some. But this should give you a good understanding of what changes lie ahead for FHA mortgages in the near future.

 

 

UPDATE : Travis Newton did a similar post, using a $200,000 purchase price and as you can see, the mortgage payment inceased by $45.29/month.   Notice *** FHA Changes

 

 

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For more information on FHA loans, please go to this link. The FHA Expert

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

For information about FHA myths & FHA rumors, please read : FHA Myths & Rumors

 

Copyright © 2010 by Jeff Belonger of Infinity Home Mortgage Company, Inc

 

These large trees framed the forest like two guards on sentinal duty.  I took this picture on the trail at Cape Look Out on my recent trip to Portland Rain Camp.

 

 

About Lori Cofer Find my Pullman dream home What is my home worth? Help me relocate! Contact Lori Cofer

 

 

If you have any questions about Pullman or the Pullman Real Estate Market I am here to help! Feel free to use my my free Pullman WA MLS search...and you are welcome to sign up for automatic market notifications too!

 

 

Click Here For Pullman Properties ~

 

 

 

About the Author: The above piece was provided as a community service by Lori Cofer, a local Pullman WA Real Estate Agent. Lori can be reached via email at loricofer@yahoo.com or by phone at 509-330-0086. Lori is happy to assist you in all your Pullman real estate and Moscow Idaho Real Estate needs. Lori is "Your Pullman WA Real Estate Connection

 

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For more information about Lori see her profiles at: Lori Cofer's Businessweek profile; Lori Cofer's Google profile; Lori Cofer's Lookup Page and Lori Cofer's Naymz profile.  Feel free to read her helpful articles on New Construction in Pullman WA; Info about Pullman WA; More Helpful Info about Pullman WA; Info About the Pullman WA schools Info About the Pullman-Moscow Bill Chipman Trail; Ten Easy Ways to Improve Your Curb Appeal For Sellers; Five Tips on Buying Your New Pullman Home; More Tips for Buyers; and Tips on Building Your New Custom Pullman WA Home.

If you enjoyed my post, why not connect with me elsewhere?

My clients were on vacation when their new construction was ready for a final inspection.  They told me that I was scheduled for anytime I wanted on that day.  So I showed up real early.

The inspection revealed the usual stuff - loose dishwasher leaking onto the kitchen floor, leaky faucet in a bathroom, grounding electrode hanging loose under the electric meter with no sign of a grounding rod beside the house - you know, the usual stuff.  There was more than that!

But this is the view on the end of the front porch.  From this view it doesn't look like a far drop.

It is.  The drop on the left side is 38" and the right corner and in front on the end 34".

 

 

 

 

 

 

 

 

This family has small children and elderly parents.  Thinking about someone falling off that porch would be a considerable and continuing stress.  Not to mention the code... but we needn't go there.  The supervisor told my clients that he didn't want to hear from the home inspector!  He might condescend to hearing from the buyers, but I am told it takes more than one mention for him to consider anything they say.  Hmmmm...

They have a little boy who will be doing swan dives off that porch!  I know I would have done hand springs off the end.  "Look at what I can do Mom!"  But not everyone can do that and this porch is hazardous.

My recommendation:  The clients thought that drop was a bit far.  It is.  They thought it should have a rail and they are right.  Just because it is a new house and something doesn't look right, don't assume that it must be right because there just wouldn't be any builder oversights!  Well, you know what happens when we assume.

 

 

Beasley Realty located in Pullman Washington is proud to be a part of the Best Yard of the Month for Both Whitman County and Latah County.  I am super excited for this great contest where the yards are voted on by popular demand!  How fun! 

So get out there and spruce up that yard and enter!  And if gardening isn't your thing, let that gardening neighbor of yours know!  They will LOVE you if THEY win!  They might even be willing to share some of those great flowers or produce with you!

 

 

 

There will be three rounds:

Round 1 is July 5th through July 31st.
Round 2 is August 1st through August 31st.
Round 3 is September 1st through September 30th!

You can vote once a day...and the Winner of each round will enjoy dinner and a movie on Beasley Realty plus a great yard sign to highlight all your great efforts on your beautiful yard!

The winner of each round will then be competing against each other for the grand champion round that is from October 1st through the 10th!

Submit a picture of your yard or vote for your favorite yard either in Whitman County Washington or Latah County in Idaho here at the Best of the Palouse Yard of the Month Contest. 

Ad used with permission of Beasley Realty and The Daily News

 

Click Here For Pullman Properties ~

About the Author: The above piece was provided as a community service by Lori Cofer, a local Pullman WA Real Estate Agent. Lori can be reached via email at loricofer@yahoo.com or by phone at 509-330-0086. Looking for Pullman WA real estate or Moscow Idaho Real Estate? Lori is happy to assist you in all your Pullman WA Real Estate and Moscow Idaho Real Estate needs. Lori is "Your Pullman WA Real Estate and Moscow Idaho Real Estate Connection"

 

 

 

 

For more information about Lori see her profiles at: Lori Cofer's Businessweek profile; Lori Cofer's Google profile; Lori Cofer's Lookup Page and Lori Cofer's Naymz profile.  Feel free to read her helpful articles on New Construction in Pullman WA; Info about Pullman WA; More Helpful Info about Pullman WA; Info About the Pullman WA schools Info About the Pullman-Moscow Bill Chipman Trail; Ten Easy Ways to Improve Your Curb Appeal For Sellers; Five Tips on Buying Your New Pullman Home; More Tips for Buyers; and Tips on Building Your New Custom Pullman WA Home.

If you enjoyed my post, why not connect with me elsewhere?

Today was beautiful in Pullman Washington.  The skies were blue and the temps hit around the mid 80's.  When I have clients come to Pullman from out of town often I suggest they take the hike on Kamiak Butte.

Today, I followed my own advice.  I asked my son and daughter-in-law if they would like to take a walk with the dog to Kamiak Butte.  

Kamiak Butte is only about 20 minutes outside of Pullman.  It is very near Palouse.  It is an absolute wonder. The trails are wooded and alive with green growing things.   I  love anything green...it gives me a sense of peace in this often hectic world in which we live.

Today was a special one.  My daughter-in-law and my son are expecting their first child soon....my first grandchild.  I  can't begin to tell you how I will cherish this day as we walked up the gentle trail knowing that soon, there would be a new member to our family.  I can't wait to show her the beautiful area that I love so much.

 

From the top it is break taking as it provides view of the quilt work patches of ground that is so near and dear to my heart...my beloved Palouse....and Pullman my home!

 

For more information about Lori see her profiles at: Lori Cofer's Businessweek profile; Lori Cofer's Google profile; Lori Cofer's Lookup Page and Lori Cofer's Naymz profile.  Feel free to read her helpful articles on New Construction in Pullman WA; Info about Pullman WA; More Helpful Info about Pullman WA; Info About the Pullman WA schools Info About the Pullman-Moscow Bill Chipman Trail; Ten Easy Ways to Improve Your Curb Appeal For Sellers; Five Tips on Buying Your New Pullman Home; More Tips for Buyers; and Tips on Building Your New Custom Pullman WA Home.

If you enjoyed my post, why not connect with me elsewhere?

A Picture is Worth a Thousand Words

I also believe that you only have one chance to make a first impression.  So when it comes to putting your house up for sale make sure your pictures are worth a thousand good words! A picture in real estate may even be worth thousands of dollars!

This brings me to one of the first tips I give my buyers, "Never rule in a house because it has good pictures and never rule out a house because it has bad ones." Some agents take really great photos and trick people into thinking the house looks great. And some agents couldn't take a good picture of the White House.

Many times when I need a good laugh I go to the store and go to the card section and spend some time there laughing at some of them. Then other times I just go to my local MLS and look at some of the photos there!  I am appalled that people actually put some of those pictures in there! I would love to show you a few but I'd probably get in some trouble!

The National Association of Realtors conducted a survey and reported that more than 80% of home buyers searched online for their home and almost 25% of those people actually purchased the home they first viewed online!  So here are a few good tips to help make your house look great for pictures and showings...

• Clear kitchen and bathroom counters of excess "stuff."
• Take off items on the refrigerator such as magnets photos and calendars.
• Put garbage cans out of sight, not in the front of the house.
• Keep hoses reeled up.
• Keep kids bikes, toys, skateboards, etc. out of the walkways and driveway.
• Maintain the yard, keep the grass green, the flowers colored and the weeds away.
• Keep swimming pools blue.
• Make your beds.
• Keep laundry rooms clear of clothing and junk.
• Put excess furniture and belongings items in storage.
• Touch up paint or clean carpets if necessary.

The more pictures that your agent can take of your home the better chance you have at making that great first impression.  People want to see the living room, the kitchen, the bathrooms, the bedrooms, the backyard and yes, even the garage! More is better when it comes to pictures.

Ask your agent to see the photos before they go live online. If they aren't taking photos of your property don't hire them!  If your house just has too much "stuff" get rid of it and have your agent come back to get some more shots of the house.  You can even hire a professional photographer.  I sometimes refer a local photographer to agents in my office that don't have a good camera or don't have the "eye" for photography.  Hire a great photographer like Taberah Spiers Photography.

You can see what homes are worth in your neighborhood by searching online now!

 

 

 

 

I tell my neighbors.  I tell my clients.  I tell everybody who will listen.  NEVER pressure wash a deck!  When the pressure-wash companies send their college kids to knock on my door to "wash" my deck, I tell them why they should not be doing that to decks!  When I see their trucks*, they advertise cleaning decks, patios, siding, roofs - you name it!  Don't do it!

The older the deck, the worse the wood reacts to pressure washing.  The big mistake is that companies and homeowners have a tendency to set the pressure way too high.  But even at low pressures the deck can become damaged.

What does pressure washing do?

• It removes loose material and leaves a gafillion dangerous splinters and gaps.  Those gaps open up further letting in more damaging sun and water.
  
• It removes the natural oils in the wood that are not replaced with sealants.
• It causes wood to dry quickly causing cupping and warping.
• It causes damage.
• It loosens nails as the wood expands.
• It can cause water to enter the house.

So what to do instead?

There are various, excellent, gentle cleansers out there.  Be sure to select cleansers that do not have caustic lye or acid, or say not to use around children, pets or water features.  A company called Dekswood makes an excellent cleanser that can be followed with sealants.  And the so-called "oxygen" cleansers, with the active ingredient of sodium percarbonate, are great and don't damage the wood, the kids or pets, the house or the yard.

You MUST seal your deck after cleaning.  The sun does more damage to your deck than rain and snow.  BE SURE TO USE A SEALANT THAT HAS UV INHIBITORS IN ADDITION TO WATER PROTECTION.  Read the label.  It will tell you what the contents are.  Water proofing alone is not enough.

My recommendation:  Keep your deck gently cleaned and protected and it will last many decades.  Not doing so makes it unsafe and age much faster.

* I once gave my spiel to a guy sitting in his company truck in a parking lot (with a smile on my face) and he told me he would NEVER pressure-wash his deck.  He said he sees what damage it can do later!

Original Source: Biggest Risk In Real Estate Is Interest Rates Rising

 

In the early 2000′s, real estate wasn’t risky, it was an investment with guaranteed returns, and large returns at that. People were buying homes and just five years later selling for double what they paid. It was a ludicrous business, and everyone was hopped up on the real estate bubble.

Today real estate is a more risky business, in the short term anyways. Long term, real estate is still a great way to invest money. One thing people are worried about the most is, where is the bottom of the market? Is it here?

Are we going to see a double dip and watch real estate prices continue to plummet? Possibly, but lower prices isn’t your biggest risk if you plan on buying real estate.

Your Biggest Risk In Buying Real Estate Is Higher Interest Rates.

Interest rates, again, hit all time low’s this week. To be honest, these rates are a little ridiculous. You could buy a home today and pay it off in 15 years when it would have taken you 20 years to pay it off with the same payment just 3 years ago. Let me show you what I mean for those of you who are visual people. (30 year mortgage)

Today’s Interest Rates

Monthly Payment = $1,053  Interest Rate = 4.13% Buying Power = $240,000

Interest Rates 3 Years Ago

Monthly Payment = $1,053 Interest Rate = 6.83% Buying Power = $177,900

Do you see what I see? These numbers are incredible. I remember when people were happy to pay interest rates below 7%. I was happy to pay 7% on my loan for the home I own. I thought I was getting a great deal, and I was. But looking at interest rates today, I’m amazed.

As you can see, if you bought a home today, and prices dropped another 20-30 grand, you would still be way ahead. Because, as you know, with interest rates so low and the fed printing money like their getting ready to party like it’s 1999, inflation is looming.

Inflation means higher interest rates. Can you imagine where interest rates are going to be in 3-5 years from now? Are you waiting to buy in 5 years when the market returns? Why? When interest rates go up, you won’t be able to buy what you can now.  Your biggest risk isn’t prices going lower, but interest rates going higher.

 

 

Lisa Udy

Platinum Real Estate Group

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