On December 5th of 2008 I wrote a blog on this very subject. I said if you are looking to buy it was a great time. Fixed rates then had just cracked 6 percent. Home values were getting cheap and there were some great buys popping up. Let’s fast forward about 45 days to today. Rates are unbelievable! In fact they are the lowest the have been in over 50 years. Interest rates poked through 5 percent. Rates in my opinion look to hang around here for a while or continue to go lower. There are several reasons we are seeing mortgage rates plummeting. For one the Fed has been a huge buyer of 10 year treasury notes pushing the yield close to 2%. It is also in their best interest to keep rates at these levels for as long as possible to help stimulate an absolutely dead housing market. Secondly there is still weakness in the MBS (mortgage backed security) market. The combination of the two and the Fed wanting low rates to help in jump starting the economy has brought us to where we are today.

If you are a buyer now there are some absolutely silly home prices out there right now. You just need to look. I have seen and heard of some staggering discounts on property. Homes that had sold for $3 million and now are being sold via a short sale for $1 million, Property that had sold in the $300k range are now selling in the $175-190k range.

If you have the patience you will be rewarded in this market. There are just getting to be too many good opportunities out there. And to boot with rates being this low it makes it all the better.

Applying for and shopping mortgage rates is a click away www.EversleyCapital.com

Anytime that you are purchasing a home or refinancing your mortgage you will need an appraisal. The appraisal is also referred to as a URAR (Uniform Residential Appraisal Report) the cost ranges anywhere from 350.00 for a single family home or condominium to 500.00 for a multifamily property.

 The purpose of the appraisal and the reason it is required is to ensure that the value of the home is there for both the borrower and the lender.  The appraisal is a comparative look at the home that you are buying or refinancing compared to other similar homes in the neighborhood. The range that is typically used is a mile radius surrounding your home. Homes with similar square footage, bedroom and bathroom counts, amenities etc. are used as comparables against your home’s value.

 Actually the appraisal is the most important part of getting your financing. Other than needing to qualify income wise to be able to secure financing ultimately the bank or lender is basing your financing around your home. Your home is used as collateral for the bank or lender so the appraisal is very important in that aspect.  This is why some lenders will not lend on what we will refer to as “unique” properties. For example log cabin homes or contemporary homes. Ultimately the home itself is all the bank has to fall back on if the loan defaults and if it is a log cabin style home for example and that is not common to your area some lenders will have a hard time lending on these properties. Mainly because if the loan defaults the lender then needs to proceed to sell or liquidate that home and if it is “unique” it would be much harder for the lender to do that.

There are many viable reasons to inquire about refinancing your current mortgage

Lowering your monthly payment:  The most common reason we choose to refinance. You have taken a mortgage when interest rates were higher and lowering the rate will lower your monthly payment.

Changing amortization: By far the most common and preferred amortization is a 30 year mortgage. At some point you may want to lower the term to pay the mortgage off faster. Let’s say a 20 or 15 year mortgage. The payments will be more per month than a 30 year mortgage but you will be saving yourself a ton of money in interest by shortening the term

Consolidating debt: It does not always make sense to do this. In some cases wiping out all your credit card debt etc and lumping everything into one new mortgage will lower your monthly payments drastically. But keep in mind you are taking that debt and stretching it over a 30 year time frame. You just need to weigh options if it really makes sense to stretch that debt over 30 years.

Consolidating a First and Second Mortgage: In today’s market this will become less common, mainly because second mortgages are for one much harder to come by. However if you do have a first and second mortgage combining the two of them will sometimes make financial sense. Especially since second mortgage rates are usually higher than first mortgage rates.

Changing the term: If you are in a adjustable rate mortgage and you can secure financing at the same rate or less changing from a adjustable rate mortgage to a fixed rate mortgage may be prudent. And is certainly a viable reason to look to refinance.

One thing is certain; in 2009 it will still be a buyer’s market. The most recent stat that I have seen is Fairfield County and that is an 18 month inventory of existing homes. That is a good amount of inventory and could very well be a good indicator that 2009 may not shape up to be any better than 2008. As optimistic as I am or want to be stats are stats and that is a huge inventory.

If you have been waiting on the sidelines as a Real Estate investor 2009 may very well be your year for the taking. I personally believe that we still have some downside to the housing market here in Connecticut. However with the vast inventory of homes and some research there are some incredible buys out there. I have personally seen homes that had sold close to 300k at their peak and being short sold for fewer than 100k.

The equity markets started out the New Year on positive footing although there was little news out there to trade on. The Dow Jones opened trading on January 2, 2008 and closed that day at 13, 043. On January 2, 2009 the Dow Jones started the first trading day of the year at 8,772. Looking back at 08’ the equity markets certainly had a rough time of it. I think 2009 will be bumpy however I do not think that it will be as volatile as last year. I also do not put much faith in a huge rebound of the Dow. I am optimistic that by year’s end we will hopefully be past the half way point of this financial meltdown and am looking at 2010 to be a better year for the equity markets.

Mortgage rates are AWESOME. They are the lowest that they have been in over 50 years. 30 year fixed rate mortgages have been under 5% now for close to a month. Refinance business has been strong but as good as rates are there are still several problems standing in the way. For one the housing market is still declining making it very difficult to get the appraised values that would be needed to make refinancing an option for some. Two is unemployment. It is hard to be able to qualify for a lower mortgage payment when you are not employed. I think for at least the first half of 09’ that rates will remain low. It would be in the Fed’s best interest to see that happen. I truly believe that employment is going to be the key to making the turning point of this mess but I also believe that low rates will also be helpful.

I have posted earlier on Loan Classroom how mortgage rates are derived. A combination between the MBS (Mortgage Backed Securities) and the Ten Year Treasury Bond. Here is a chart of the Ten Year Bond.

I think that we can see the 10 Year Treasury stay in the low 2.00% range for some time. So I am optimistic that we will see rates stay in the low 5 to under 5% range for a while.

Selling Real Estate in this environment is tough. If you are a seller you have to be patient, you also need to be realistic. Although I see values going lower still you need to find a good Realtor. If you are using a Realtor to sell your home he or she should be able to give you a plethora of info on your local market including expected turn times of homes sitting on the market. If they cannot or are not ready to sit down and go over this with you, look for a new Realtor. You also may want to be creative when listing your home in 2009. That could mean painting rooms, keeping the house extra clean when being shown and also staging your home. I have posted several blogs on helping you sell your home in 2008. One specifically on staging your home. You should also ask your Realtor for their advice on what might help sell your home.

In 2009 all things considered I think we are still going to have a tough go at it. Patience is going to be the key as is creativity. There are still a lot of hurdles to overcome but I am optimistic that coming into 2010 we will be sitting in a much better position than we are starting 2009 in.  

Purchasing a home in Connecticut? Call us today to get pre-approved 203-838-6760

In today’s current market the choice is actually really simple. In times to come when the real estate market gets its footing back and the economy and equity market finds some stability I may change my opinion on this topic but as it stands today the answer is without a doubt or second guess a 30 year fixed!

In a different time and different market the answer would be different and seeing as the reason I am here every day pounding the keys is to help educate borrowers, we will look at what the pros and cons would be.

30 YEAR FIXED MORTGAGE: Is your plain vanilla choice. The rate is fixed for 30 years, it never changes and you will know what your payment will be for the life of the loan not including taxes and insurance if you have an escrow account.

-Typically fixed rate mortgages are a little higher than say an adjustable mortgage. Usually anywhere from a 1/4 to a 1/2 percent higher.

ADJUSTABLE RATE MORTGAGE (ARM): There are only several scenarios in my opinion that make sense for any borrower to choose and ARM for a mortgage.

-One: if you have no intention and are fairly sure that you will be in the home that you are financing for a short period of time. And a short period of time is anywhere from 5 years or less, and then an ARM may be a viable choice

-Two: if you are purchasing a home for an investment and planning on flipping the home or rehabbing the property and selling it. You will have your mortgage and property for a short period of time and an ARM may be a viable option

-Three: if you are doing construction financing and your lender offers an ARM as an option for your construction loan you may want to take advantage of it. The reason being most construction loans require that you find or secure an end loan once the construction is complete. So in this case the term of the loan again is a short period of time.

 Applying for and shopping mortgage rates in CT is a click away www.EversleyCapital.com

Pre foreclosures are known as properties that have reached the final stages before they get repossessed or taken back by the lender or bank.  The owner is still in complete control of the property or home, although the bank or lender will repossess the home if the owner doesn’t attempt to rectify the situation.  Normally, if the owner makes things right with payment, the pre foreclosure will settle and things will go back to normal.

When buying real estate, there are several benefits to pre foreclosures.  Although there are several ways that you can buy a home, pre foreclosure is one of the best.  Even though it is one of the best ways to buy property, many people miss out simply because they aren’t familiar with pre foreclosures and all of the benefits that come with them.

The best thing about pre foreclosures is the prices that are associated with them.  In most cases, the owner has no choice but the sell the house, and therefore will listen to just about any offer that he receives.  Due to this very reason, you can find pre foreclosures for sale at nearly 50% off market value.  This is an ideal time to purchase, especially if you are looking to save a lot of money.

Along with the great prices you can get with pre foreclosures, you’ll also have the luxury of dealing directly with the owner - no third parties involved.  This is a great advantage, with buyers being in total control of pre foreclosure sales.  In the event that the home owner decides to turn down your offer and cannot find another buyer, he will lose everything.  Even if you offer the owner a small price, he will be able to make a little bit of money selling the home.

You can find pre foreclosures that up for sale pretty much the same way that you can find homes in which the bank already has control of.  You can look in the local newspaper, on the Internet, or by calling the lender directly.  There are several options that you have in terms of finding pre foreclosures, giving you plenty of options. Once you have found a pre foreclosure for sale, it’s up to you to seal the deal and get the home of your dreams at a very affordable price.

When you compare foreclosed properties with pre foreclosed properties, you’ll find that there is less competition involved with pre foreclosures.  Pre foreclosed homes are a great purchase, as they will normally come at a very affordable price.  Those of you who have been looking for a new home shouldn’t hesitate to check out pre foreclosed properties.  They are a great investment - and can indeed be very profitable in the long run.

Shopping for the best mortgage rates is a call or click away. Eversley Capital Mortgage LLC Norwalk CT (203 838-6760 or www.EversleyCapital.com

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The obvious benefit and sought after benefit of flipping real estate is the profit. This is one incredibly tangible benefit, particularly when the profits are large and quick to come your way. Of course there are risks. Most ventures that offer high profit also come with a high degree of risk. Money, however, is not the only benefit that can be associated with flipping real estate though it is certainly the one on most investors’ minds when they get into this line of work.

Let’s talk profit first. Profit is the one reason that most people get into this business. The days are long and the work is hard. This is definitely not the type of work one would ordinarily undertake for the simple love of getting one’s hands dirty. This is real work that leaves you bone weary at the end of the day. However, when all the work is done and you get around to making the sell, you will find that the profit involved in a successful flip is well worth the effort you’ve put into the process.

The good news is that the savvy investor can still manage to make money even when the situation may not work out quite as planned. This is yet another benefit to flipping real estate. If the flip doesn’t work out, there is always the option of leasing to own the property or renting the property out. The profits in these situations are considerable less than a straight out flip but it can prevent financial ruin that is often the risk of a flip gone wrong. The fact that there are options and that you aren’t necessarily left ruined at the end of a bad flip is definitely a benefit. There aren’t many types of investments that allow you the option to save yourself the way real estate does.

One of the intangible benefits of flipping houses is that you are in essence working for yourself. In other words you do not have to punch a time clock or worry about overtime (at least not on your part). This can be a bad thing too if you lack the discipline required to get the job done. However, most of us will view this is a huge check in the pros column when deciding whether or not to take the plunge into the wonderful and frightening world of real estate investing.

Even though this is a business that requires a lot of work in order to turn an attractive profit there is some satisfaction at the end of the day involved in knowing that you are working for yourself and not to make someone else wealthy or in order to punch a time clock. That feeling of satisfaction is one that you should hang onto when the brand new toilet you’ve just installed becomes a geyser. Of course there are mistakes along the way, what other job keeps you on your toes quite like this one?

Real estate investing, house flipping in particular, can be one of the most frustrating types of investments a soul can pursue. At the same time it can also be one of the most rewarding mentally, spiritually, and financially. This is something you should keep in mind when deciding whether or not this is the right path for you.