MOVE Utah Real Estate News

Press Release - April 26, 2012, Salt Lake Board of Realtors

A short sale, in most instances, is a complex transaction. However, there are two very simplistic characteristics that every qualified short sale possesses:

The house must be valued at less than the homeowner owes on their mortgage debt obligation. In other words, the home must be “underwater”.

The homeowner must have a qualified hardship.

It is the second characteristic that we would like to touch upon in this blog post.

One question that we answer frequently is “My house is underwater. Is this an acceptable hardship?”  Unfortunately, the answer is always “No.”

The simple fact that a homeowners mortgage obligation is in excess of their house value is not an acceptable hardship. A Short Selling bank will entertain a short sale when and only when there is a hardship that will, now or in the future, affect the borrower’s ability to pay their mortgage.

The following is a list of acceptable hardships that may be used when submitting a short sale package:

• Mortgage Rate Adjustments
• Loss of Employment or Reduction in Wages
• Business Failure
• Medical Hardship
• Death in the Family
• Divorce/Separation
• Military Service
• Overwhelming Debt Obligations
• Job Relocation

If you have any other questions about short sales, please give Tricia Ashby' Real T Team a call: 801.205.7355.  We can help you or someone you care about.

Willow Tufano is a 14 year old who lives in Florida. One thing that differentiates her from her friends is that she just bought her first house, a rental property. She bought it with her mother, but anted up her fair share with money she saved for over a year by selling free items she had previously found and fixed up.

The area was hard hit by the housing crisis and Willow and her mother were able to buy the home which was once valued at $100,000 for just $12,000. Why would a 14 year old even consider buying a property?

She is using her half of the rent they charge ($700) to pay back her mom for the second half of the house and the renovations they put into the house. Willow says she’ll have it all paid off in six years. Then she’ll keep the house as a source of income.

“It was definitely a lot of inspiration from my mom and my grandma,” Tufano said. Her mom is a successful real estate agent who owns several investment properties.

WE ARE SO EXCITED! 

Utah Housing has two NEW “No Down Payment” loan programs for our homebuyers!

FIRST HOME PLUS - This is their current program for first-time homebuyers or anyone who has not purchased a home in the past three (3) years. Approximate interest rate this week: 3.85%.

HOME AGAIN – for homebuyers who have had a home before and have a household income no higher than $81,000. The down payment is “borrowed.” Approximate interest rate this week: 4.10%.

SCORE LOAN – for homebuyers with a credit score between 620 – 659 and a household income no higher than $81,000. The down payment is also “borrowed.” Closing costs are higher than the Home Again loan and homebuyers cannot borrow more than 4 percent. Approximate interest rate this week: 4.35%.

We are super excited to help MORE homebuyers get into homes with NOTHING DOWN.

Who do you know who is ready to buy? Please call us today with their name and number and we promise to give them the same high-quality service ALL of our clients receive ALWAYS!

We have often advised buyers to look at the COST of purchasing a house more than the PRICE of the home. Obviously, price is part of the cost equation. The other piece, assuming you are not an all cash buyer, is the mortgage rate. The mortgage rate to finance a purchase can have a dramatic impact on the overall cost. Recently, there are more people talking about the possibility that mortgage rates could begin to increase.

HSH.com studies trends in mortgage rates. They explain:

“A better economic climate almost always brings higher rates, and a lessening of the troubles in Europe from massive central bank assistance adds to the movement of money from safe havens to more risky assets, driving rates upward.”

Dan Green of The Daily Market Reports recently stated:

“The Fed sees growth coming faster than originally expected. There’s suddenly less chance that the Federal Reserve will intervene to help keep mortgage rates low. Absent Fed intervention, mortgage rates are apt to rise and Wall Street is now betting that the Fed has bowed out. With no stimulus, mortgage rates rise.”

Lawrence Yun, chief economist for the National Assoc of Realtors, recently wrote:

“Mortgage rates will be starting to rise. From the 3.9 to 4.0 percent average rate in the past five months on a 30-year fixed mortgage, the new rates will soon be in the range of 4.3 to 4.6 percent.”

We do not attempt to predict future interest rates. We leave that up to the experts in the field. However, we want our readers to understand the potential impact on the cost of purchasing a home if they do rise. Here is a simple table that shows, even if the PRICE of a home softens, the COST of a home could increase.

Bottom Line
Many purchasers think they should wait until they are sure that prices have hit bottom. Deciding whether or not to wait should be determined by where the COST of a home is headed.

"When getting help with money, whether it is insurance, real estate, or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman." 
~ Dave Ramsey

For the first time in 18 months, home prices in February rose higher. With a median price of $171,881, prices in the 53 cities surveyed by the RE/MAX National Housing Report rose by 1.1% over February 2011.

Home sales were even higher, up 8.7% from one year ago. With a positive sales trend of 8 straight months above the previous year, it’s looking like 2012 will witness a very strong home-selling season, RE/MAX reports. As a result of reduced foreclosure activity, inventory continued a downward trend for the 20thstraight month, 22.4% lower than the housing inventory in February 2011.

Consumer sentiment appears to be rising, and record low mortgage rates coupled with favorable home prices are attracting homebuyers and investors who don’t want to miss a historic opportunity.

For the complete article, CLICK HERE.