Down Market? How about an Ideal Opportunity?

Down Market? How about an Ideal Opportunity?
RISMEDIA, June 4, 2009

With the passing of an $8,000 tax credit for first-time buyers, much has been made about the great opportunity available to those who have never owned a home. Yet, the reality is that today’s market offers just as many advantages for existing homeowners wishing to move-up to a larger home.

The Financial Benefits

Given the recent decline in home prices, some homeowners are understandably hesitant to sell their home. However, when you factor in the cost-savings on the home also being purchased, trading up now can produce a very positive financial outcome.

Take for example a homeowner who paid $200,000 for a home several years ago. If prices in their market declined by 10%, they would experience a $20,000 loss upon the sale of their home. However, if they are also buying a larger home that had cost $400,000; they would now benefit from a $40,000 savings on their purchase. This is a $20,000 gain in overall equity as a result of moving up. In addition, when prices begin to rise, this trade-up buyer will see greater appreciation in their new home than their previous one.

More House for Your Buck

With home affordability at a record-high and interest rates at a record-low, those looking to move-up can get more for their dollar today than at any time in recent memory. For some this historic buying opportunity can translate in to a home with more bedrooms for the kids or a bigger yard where the dog can play. For others it might mean a larger dinning room for entertaining family and friends.

Whatever the reason, today’s market makes it possible for many trade-up buyers to afford a home they couldn’t just a few years ago and might not be able in a few years to come.

In the Middle of the Action

Perhaps the biggest advantage for trade-up buyers is the fact that they are in the middle of the real estate action – literally. In most cases, the home they own is in the best-selling segment of today’s market, while the home they wish to buy is in a price range that is seeing far less activity.

According to the National Association of Realtors, for the first-time ever, more than half of all buyers are now first-time home buyers. More often than not, the properties these first-time buyers want and can afford are the homes currently owned by move-up buyers. As a result, trade-up buyers who own starter homes that would be attractive to a first-time buyer may have a much easier time selling than they expected.

On the flip side, those looking to move up benefit from the reality that there are less people looking to buy larger, higher-priced homes. This lack of activity at the higher end of the housing market offers move-up buyers more negotiating power and affords the opportunity to be more selective. It also provides the very real possibility of even greater savings on the buy side during the trade-up process.

What remains unclear is just how long this opportunity to move-up to a larger home at an affordable price will last. After several years of price declines, many financial experts are predicting the market is close to a bottom. In addition, the government’s continued involvement shows that it is committed to stabilizing the housing market to stimulate the economy. At the same time, there is much speculation that interest rates may begin to rise in the near future after remaining stagnant within the same range for several months.

source:  http://rismedia.com/2009-06-03/down-market-how-about-an-ideal-opportunity/#more-37026#ixzz0JA7ap98k&D

Make an Attempt to Avoid Foreclosure

Make an Attempt to Avoid Foreclosure
A total of 3.2 million foreclosure filings from default notices, auction sale notices and bank repossessions were reported on 2.3 million U.S. properties during 2008, a 225% increase in total properties from 2006, according to HUD statistics.

The challenge to everyday families who typically pay their home payment on time is overwhelming. Double-digit unemployment rates coupled with ever-worsening economic conditions are leaving American families tapped out. Now is the time to implement a strategy because a solution may exist.

So what should homeowners do when they start falling behind on mortgage payments? The most important step to take is to get help early from their mortgage lender. They should be prepared to provide details about their household, such as how much money they earn, all the bills and household costs, such as food, electric, water and even pet expenses.

Some options a lender may offer include:

Deferment-If the problem is short-term they may bring the homeowner’s account up to date and “defer” late payment expenses to the end of your loan. This usually still requires a partial good faith payment.
Repayment Plan-You may be able to catch up on missed payments by creating a schedule for repaying the past-due amounts.
Refinance-Fixed 30-year rates are very low and often can provide the lower payment relief and fresh start that some homeowners need.
Modification-In some cases, mortgage loan terms can be changed on a temporary or permanent basis to make the payment more affordable. This could include extending the term of your loan up to 40 years, reducing your mortgage interest rate and reducing or deferring your principal balance.

If you aren’t able to get help through your lender, then please call Certified Distressed Property Expert, Amy Kite, 847-877-9881.  Let me review your situation and see if there are any other solutions we can come up with together.

My Credit Score Dropped 87 Points Because of Me

My Credit Score Dropped 87 Points Because of Me
Market Issues by Jeff Mandel and Marlin Brandt
RISMEDIA, June 10, 2009

Everyone has become more concerned about their credit scores these days, especially when a better score can result in lower credit interest rates and payments saving thousands of dollars from interest. With this in mind, many consumers are paying more attention to their credit and, unfortunately, in the process of trying to make it better, they are harming their credit score.

Take a recent client we will call “Rachel.” Rachel was reviewing her credit and decided to close her eight-year-old VISA credit card with a credit line of $18,000. She didn’t use the card but once or twice a month and had two other major bank cards that provided “rewards points.” So to keep her credit record “clean” she decided to cancel the card. The next month she found out that this one decision cost her 87 points on her credit score, dropping it from 752 to 665.

This story happens way too often and is typical for how most people manage their credit by trial and error. Over a lifetime, many people eventually build up some decent credit, however, that same level of credit could have been achieved so much earlier in life with guidance and help.

A consumer credit score is made up of five key components:

- Payment History – 35% Types of accounts (credit card, mortgage, etc.), accounts paid as agreed, number of past due accounts, etc.
- Amounts Owed – 30% Balances of current loans, debt-to-credit ratio, proportion of installments still owed, etc.
- Length of Credit History – 15% Time since accounts opened, last activity, etc.
- New Credit – 10% Recent inquiries, new accounts, etc.
- Types of Credit Used – 10% Mortgages, credit, retail, etc.

In Rachel’s case, the major bank credit card she canceled was paid on time every month for eight years. She didn’t use credit a lot, and this particular credit card represented the best contribution to the amounts owed and length of credit history category. Although Rachel had two other major bank credit cards that offered rewards points, they were only months old and had only been used intermittently, giving them much less value on her credit score. Next to her mortgage loan, the eight-year-old VISA credit card was her strongest piece of credit. Consequently, the other newer cards also had higher interest rates and yearly fees than her VISA card.

Contrary to popular belief, credit scores do not penalize you for having too much available credit. With this in mind, it’s better to preserve your credit score with 15 years of established credit history and old accounts in good standing than to have fewer and newer open accounts. Major bank credit cards have more impact on your credit than, say, a department store card.

Closing a credit card can greatly affect your credit scores; however, sometimes you may have no choice. Credit cards that are unused or rarely used can have their credit line reduced or may even be closed without your approval by the credit card company. This can affect your credit score just as much as canceling the card yourself.

Jeff Mandel is president and Marlin Brandt is COO of ApprovalGUARD.
For more information, please visit www.ApprovalGUARD.com.
Source:  http://rismedia.com/2009-06-09/my-credit-score-dropped-87-points-because-of-me/#ixzz0JA29bkHT&D

5 Tips on ‘Techorating,’ the Latest in Home Decorating

5 Tips on ‘Techorating,’ the Latest in Home Decorating
By Joan Morris
RISMEDIA, June 17, 2009-(MCT)

The latest thing in decorating is combing interior design with technology,  thus “techorating.” Doug Wilson, a well-known designer on TLC’s “Moving Up” and “Trading Spaces” offers tips on how to pull it off. Wilson also serves as a techorator for LG. He offers the following:

1. Stay focused. Don’t try to tackle a full house remodel all at once. Pick one or two rooms that you think would best benefit from an update and start there.

2. Pick a focal point and begin your efforts from there. If you are working with a larger living space, remember not to go overboard with one particular theme, pattern or technology. With just a few integral pieces, the room can be made to feel spacious, yet comfortable.

3. Consider the space. Remember, the size of your room matters, but bigger isn’t always better. The technology in your room should be in proportion to the room for the best aesthetic and functional fit. Look for the best integration over size.

4. Keep a clean design. With the TV, speakers, DVD players and more, people today need to practice cord control. New technology and a few easy steps make it easy to maintain a cleaner, more organized look. Go wireless to give your living space a crisp, modern feel.

5. Donate your old TV and bring in a new flat-screen for an instant style upgrade. Tabletop or wall-mounting for a flat screen can add space to your room and streamline the look and feel.

© 2009, Contra Costa Times (Walnut Creek, Calif.).
Distributed by McClatchy-Tribune Information Services.
Source:  http://rismedia.com/2009-06-16/5-tips-on-techorating-the-latest-in-home-decorating/#ixzz0JA0z4Bbt&D