Understanding Points In A Home Mortgage Loan - When Is It Best To Use Them?

When determining the best interest rate option to choose, when doing a refinance or buying a new home, there are essentially 3 options that one should consider in order to come up with the best strategy for your loan situation.

• PAY POINTS AND LOWER THE INTEREST RATE
• GET THE BEST INTEREST RATE WITH NO POINTS ADDED
• PAY A HIGHER INTEREST RATE AND PAY NO CLOSING COSTS  

Dan White has given us a breakdown of the advantages and disadvantages of each scenario.

Making Homes Affordable With Shared Equity

State and local governments are putting home ownership within reach of moderate and low-income families through a program called Shared Equity.

Under the program, homebuyers that earn $80,200 or less annually, do not own another home, or have significant assets beyond savings and retirement accounts, may qualify to receive funds for a down payment on a home.

According to the National Housing Conference, “In return for this investment, the government entity shares in the benefits of any home price appreciation that may occur.

The public’s share in the benefits of any home price appreciation may be used in two ways; it can either be returned to the government in the form of cash payment that can be used to help another family, or it can stay with the home, reducing the cost of that home for the next family.”
More details at cnn.com

the 2020 Outlook for Home Prices

With inventory presently below historically normal levels, current & future home prices have been the topic of many real estate conversations. The most recent Home Price Expectation Survey was just released; giving insight into where experts believe prices will be leading up to 2019.

Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

Here are some highlights from their latest survey:

• Home values will appreciate by 4.4% in 2015.
• The cumulative appreciation will be 19.3% by 2019.
• That means the average annual appreciation will be 3.6% over the next 5 years.
• Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of 11.7% by 2019.

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.

Protecting Your Pipes From Sub-freezing Temps

Depending on where you live, frozen pipes resulting in damage to your home and your belongings can be a very real threat. Here are a few tips to help prevent frozen pipes:

1) Disconnect all outside hoses. This is the most common cause of frozen pipes. One way to reduce this risk is by putting your hoses away in the shed or garage for the winter. That way, if someone connects a hose they will hopefully disconnect it to put it back in its place. Also, if you see a hose out of storage it will be a red flag that someone connected it. 

2) Blow out sprinklers. This will prevent the system from freezing. If you realize you’ve forgotten to do this or if cold weather comes in early, at least be sure to turn the sprinkler water valve off. That way if it freezes your home won’t flood.

3} If you’re leaving town during the winter, one way to protect your home is to turn the main water valve inside the home off while you’re gone.

4) Even though this is not a frozen pipe, clogged gutters can fill with ice and cause roof leaks from water damming. Another problem is the gutter can become heavy and rip off, causing other damage.

5) Occasionally in older homes or in areas with extreme low temperatures it’s possible for the pipes inside an exterior wall to freeze. If you know the temps will be extreme you can keep a faucet at the end of this pipe running very slowing to prevent freezing. -
 See more at:             http://www.trinitytitletx.com/trinity-daily/avoid-frozen-pipes-this-winter/#sthash.iXvcKBR8.dpuf

This Tiny House is Bigger Than It Looks

We continue to be fascinated by small space living, and this Austrian house is our latest obsession. Not only is this 484-square-foot compact castle set in the middle of one of the most beautiful parts of the Austrian Alps, but it has one of the most stylish interiors of any size we've seen anywhere. The panoramic windows let in an amazing amount of natural light.

Although the inside is very modern, there is still a sense of warmth from all of the exposed wood. What this place lacks in size, it makes up for in spectacular design and breathtaking natural beauty surrounding it. It was originally built as a family vacation home, but now anyone can rent it out any time throughout the year.  This compact house might look incredibly awkward and small on the outside, but once you step inside… prepare to be totally amazed. It was originally built as a family vacation home, but now anyone can rent it out any time throughout the year. Many more interior and exterior photos can be found here.

Return of the 3% Down Payment

From The Wall Street Journal's Market Watch:
It is getting easier for some buyers to land a house with less money up front. More lenders are lowering down-payment requirements, allowing borrowers to commit 3%—or even less—of a home’s purchase price to get a mortgage. Many had been requiring down payments of at least 20% since the recession began.

Some lenders also are waiving mortgage-related fees, and more are allowing down payments to be made by other parties, such as the borrower’s family.

The deals are aimed at buyers with good credit scores and a steady income who have been unable to save enough for a sizable down payment. They are often targeted at buyers who live in expensive housing markets, where even a small down payment can equal tens of thousands of dollars.

 Fannie Mae’s plan was effective December 13, 2014 while the Freddie Mac plan will be available March 23, 2015.

Despite criticisms from some Republicans that the loosening federal home loan policies signal a return to the sub prime era, mortgage experts point out that credit requirements will remain very strict: "....low down payments have NOTHING to do with failed mortgages, In fact low down payments have helped homeowners hang on to their homes by allowing them to keep more of their money for emergencies."

A Good Time to Buy

Experienced home buyers know that one of the first steps in beginning a successful search for a new house is taking a hard, objective look at finances.

Determining how much money you can dedicate to the purchase of your new house affects almost every aspect of buying a new home - including how professionals write the offer, which mortgage programs you will qualify for, shopping for the best mortgage loan and which homes are truly in your price range.
 If you would like to start the qualifying process today, give me a call and I’ll put my professional network of lenders to work for you so that you can start looking for your home.

Attaining the American Dream: 5 Financial Reasons to Buy

Heading into 2015 many people have their sights set on buying a home. The personal reasons differ for each buyer, with many basic similarities. Eric Belsky, the Managing Director of the Joint Center of Housing Studies at Harvard University expanded on the top 5 financial benefits of homeownership his paper - The Dream Lives On: the Future of Homeownership in America.

Here are the five reasons, each followed by an excerpt from the study:

1.) Housing is typically the one leveraged investment available.

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You're paying for housing whether you own or rent. 

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3.) Owning is usually a form of “forced savings”.

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4.) There are substantial tax benefits to owning.

“Homeowners are able to deduct mortgage interest and property taxes from income...On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Bottom Line

We realize that homeownership makes sense for many Americans for an assortment of social and family reasons. It also makes sense financially. from KCM

Newest 3D Printer Makes Low Cost Housing Out of Mud

Based out of Italy and recently debuting their latest development -- a 3D printer that squirts out mud -- at Rome's Maker Faire, WASP (World’s Advanced Saving Project) may be the future of housing in many parts of the world where earth is the most abundant, and affordable, local building material around. The aim is to ease the labour-intensive process that building with earth requires, with an automated, digital fabrication process, using one of humanity's oldest building materials.
More from Treehugger...

A Stunning $441 Billion Paid in Rent ion 2014

A recently released study revealed that a whopping $441 Billion was spent on rents in the U.S. in 2014. This represents an increase of over $20 Billion from the year before. As shown on the chart below, rents have increased consistently over the last 20+ years.

Why such a jump? 

Many Millennials have postponed the purchase of their first home while waiting for the economy to recover. This has increased demand and dramatically lowered vacancy rates. In a recent article on the MarketWatch, economics reporter Ruth Mantell explains:

“Landlords have ramped up rents by the fastest pace in six years, with national vacancy rates the lowest in two decades.”

Zillow Chief Economist Stan Humphries let us know that increases will continue:

“Another increase in total rent paid similar to that seen this year isn't out of the question. In fact, it's probable."

Perfect economic mix set to boost housing in 2015

2015 is shaping up to be one of those rare times when strong economic growth is accompanied by low interest rates, the perfect mix for these names, according to a historical study of stock prices using Kensho, a quantitative tool used by hedge funds.

CNBC looked at the periods since 1980 when GDP was above 2 percent, yet the 10-year Treasury yield remained under 2.5 percent. In total, there has been about one year or four quarters of time when both these conditions were met and homebuilder stocks were far and away the standouts among stocks in the S&P 500.

Where Are Rents Headed in 2015?

CNBC’s Diana Olick recently reported that rents in the residential housing sector continued to rise in 2014. She interviewed Jed Kolko, Chief Economist at Trulia, who revealed:

"Rents are rising because of strong demand that supply hasn't kept up with. Nearly all the new households are renters, and young people moving out of their parents' homes will keep fueling rental demand."

Where are rents headed in 2015?

The question now is where rents will be heading over the next twelve months. In a press release last week, Zillow chief economist Dr. Stan Humphries predicted residential rental prices will continue to climb in 2015:

"Home value appreciation will continue to cool down, from roughly 6 percent now to around 2.5 percent by the end of 2015. But rents will see no such slowdown, and will continue to grow around 3.5 percent annually throughout 2015. As renters' costs keep going up, I expect the allure of fixed mortgage payments and a more stable housing market will entice many more otherwise content renters into the housing market."

However, those potential buyers must make a decision quickly because, as Kolko explains:

“Paying more on rent makes it harder for would-be homebuyers to save for a down payment."

Bottom Line

Ryan Severino, a senior economist at Reis, in Olick’s article stated the obvious:

"Landlords should still be able to push asking rent increases on to their tenants."

If you are thinking about buying a home in 2015 instead of continuing to rent, it probably makes sense.

Living Outside of the Box

Shipping container architecture is a great way to build a sustainable home, but many architects and homeowners are also going a step further, and using these building blocks to build truly off-the-grid homes.
The main advantages of such homes are the ability to place them virtually anywhere, minimizing the footprint and lowering the monthly costs to virtually zero.

These sustainable shipping container cabins, built by the Canadian company Ecopods, all feature a 80-watt solar panel and a 12-volt battery, which takes care of its energy needs. The cabins also feature Sun-Mar composting toilets that can evaporate the water from the toilet waste and carry it back to the atmosphere via a specially designed vent system.
The occupants’ water needs are taken care of by a WaterMill- an atmospheric water collection device that is capable of condensing water vapor, while purifying it as well. This system first draws in moist, outside air through an air filter, which then passes over a cooling element, and is condensed into water droplets. These are then collected and pushed through a specialized carbon filter that is exposed to an ultraviolet sterilizer that eliminates all bacteria to provide drinking water.
More container living examples from Jetson Green

3% Down is New Again

Yesterday, HousingWire reported that both Fannie Mae and Freddie Mac formally announced their 3% down options on home purchases.

Fannie Mae’s plan will be effective December 13, 2014 while the Freddie Mac plan will be available March 23, 2015.

Be Careful with Those Space Heaters -- or Check Out Some Alternatives,,,

The most popular post on TreeHugger right now is 6 Energy-Saving Portable Electric Space Heaters, as people look for ways to keep warm in a shoulder season where the apartment building furnaces are not yet delivering heat, or people don't want to heat the whole house when they think they just need one room.

  There are many ways to keep warm, including cuddling puppies in front of fireplaces..... Go to the comfort calculator on Robert Bean's site and play with it.

Complaints Against Ocwen Continue to Snowball

Ocwen Financial is one of the largest mortgage servicers that operate nationally along with Bank of america and Wells Fargo. They all handle the day-to-day financial tasks involved with managing housing loans, including processing payments.

 Last week, New York State's Department of Financial Services Superintendent Benjamin Lawsky sent an open letter to Ocwen, alleging that the company had backdated potentially hundreds of thousands of letters to borrowers “likely causing them significant harm.”
In most cases, borrowers received a letter in the mail that denied mortgage loan modifications that was dated more than 30 days before it arrived,. Rather than deny the alleagations, Ocwen sent out a letter of apology.

In the aftermath of Lawksy’s letter, ratings agencies, banks and other advisory services seemed to come out of the woodwork to join in the attack on Ocwen for its business practices.

 The largest number of complains were by hundreds of homeowners who had major grievances with Ocwen's handling of their mortgage payments as well as their foreclosure processes. http://www.usatoday.com/story/money/business/2014/10/30/ocwen-cfpb-complaints-earnings/18120629/

Mortgage Rates at a Glance

Green Building Awards for 2015

BuildingGreen, publisher of EBN, has announced the winners of its annual Top-10 Green Building Products awards. The 13th annual awards recognize green building products that make fundamental transformations to “business as usual” in the design and construction industry.

 This year’s picks include products that have eliminated halogenated flame retardants, a longstanding health and environmental issue, along with a highly effective air- and weather-barrier system, chairs made from a new biobased plastic, and high-efficiency chillers using near-frictionless compressor rotors.

                                                                                                  Pictured here is
FocalPoint -- a high-flow-rate biofiltration system designed to provide the performance of natural stormwater filtration on a very small footprint.

NJ Leads List of National Foreclosure inventory

A Homeowner’s Net Worth is 36x Greater Than A Renter!

Over the last six years, homeownership has lost some of its allure as a financial investment. As homeowners suffered through the housing bust, more and more began to question whether owning a home was truly a good way to build wealth.

The Federal Reserve conducts a Survey of Consumer Finances, every three years, and just released their latest edition this past week.
Some of the findings revealed in their report:

The average American family has a net worth of $81,200 Of that net worth, 61.4% ($49,856) of it is in home equity A homeowner’s net worth is over 36 times greater than that of a renter The average homeowner has a net worth of $194,500 while the average net worth of a renter is $5,400.


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Bottom Line 
The Fed study found that homeownership is still a great way for a family to build wealth in America.