Another year has passed, and while the last 5 of them have been rough for the housing market, we’ve now seen two consecutive quarters with most states showing incremental appreciation. Cause for celebration? Perhaps not, yet this is beginning to look like stabilization and that of course is the first step towards recovery.

What’s working in favor of prospective home buyers?

In a word – Affordability – Since 1963, it has cost an average of approximately 43% of “per capita” income to finance the cost of a median priced home (20% down payment and prevailing 30 year fixed rate mortgage). Right now it’s less than half that cost, and in many areas the monthly housing payments are less than an equivalent rental.

You can lock in your mortgage cost for life – Imagine if you could have locked in the price of gas back in 2001 when it was only about $1.50 per gallon or less? Think about that the next time you’re standing at the pump filling your tank with $4 gas. How smart would you feel if you knew your cost was forever lower? When it comes to a place to live, that same kind of opportunity is staring us in the face right now. Record low prices and record low rates are here now and plentiful. The beauty of a 30 year fixed rate loan is that it’s a 30 year fixed rate loan. If you lock it in now, it will never go up.

There is still uncertainty – yet there is also clarity that comes from knowing where things stand at present such as rates & prices. Above all else, the state of the market doesn’t change the fact that we need a place to live. Choosing to purchase is one of two options. The other one is to rent or to continue living with family if that’s where you are now.

The trouble is – renting amounts to little more than paying your landlord’s mortgage and in the end, there is nothing to show for that. Living at home gets old at the same rate as we do. The day comes when it’s time to leave and there’s never been a less expensive opportunity to do that than now. At some point, rates will rise and so too will prices. Being ahead of or behind that curve is all dependent on the action you choose to take today.

It’s Official: FHA Hike of 75bps Will Come April 1.

The Federal Housing Administration is following through with its pledge to increase upfront and annual insurance premiums on its forward single-family business. The plan is to help rebuild it’s insurance emergency fund which has taken a hit over the last few years during the housing collapse (FHA has paid out nearly $37 billion in defaulted mortgages since 2008).

Unveiled late Monday, the increases are designed to strengthen FHA’s capital position and “have minimal impact on the market and borrowers,” according to FHA acting commissioner Carol Galante. She noted that FHA streamline refinances are exempt from these premium hikes.

Starting April 1, FHA will hike its upfront premium by 75 basis points to 175 bp on all single-family loans, including jumbos.

FHA is also hiking the annual premium on loan balances of up to $625,500 on April 1. On higher balance loans or jumbos, FHA is planning to implement a 35-bp hike in the annual premium on June 1.

The federal mortgage insurance agency currently charges a 115 bp annual premium when the loan-to-value ratio is above 95%.

Mid Coast Hunger Prevention Program’s fund raiser and hunger awareness event will find hardy volunteers braving the cold from 10 a.m. Saturday, February 18, until 10 a.m. Sunday, February 19, at Cook’s Corner Mall.

To join the effort or for more info phone Mary Turner at (207) 729-8647 or email mt@mchpp.org or visit www.mchpp.org.

Five Steps To Buying A Home in Maine

1. How much can you afford?

Getting in touch with a lender is the best way find out what you qualify for. Your Maine loan officer will take your debt to income ratio, run your credit and give you what is known as a “prequalification letter”. Once you have been pre-qualified by your loan officer, you can begin to put in offers. The best lenders to use are located here in Maine.  If you are unsure what lender to contact, a real estate agent can help you.

2. The Home Shopping Prerequisite.

What city or area do you want to live in? What kind of home and amenities do you want? 2 story, tile flooring, fireplace, a pool, patio, fenced, rv access, ranch style, traditional, horse property? Before spending precious time looking at plenty of houses that do not match your needs, talk with your agent about all the amenities you may need in a house. They can help you go through your options and get a strategy to find a home you will love.

3. Look for homes for sale.

Look for homes that are available in the area, including Fannie Mae, HUD homes, Foreclosures, short sales, and more. Instead of choosing one as the way to go, try looking into all of your options and that will open your range of houses up. Some of the best home deals are HUD homes. Not all agents can show you these homes, so you are better off working with an agent who can.

4. Make the seller an offer.

This is one of the most exciting steps of the real state process, however, always make sure you are serious about buying the house you make an offer on because you are signing a legal contract. After signing the offer to purchase, you will write a check for the earnest money deposit of the property,  along with your prequalification letter.

5. Your offer gets accepted and escrow starts.

Your agent will set up appointment with the inspectors, other agents, and escrow to get everything done to make that house yours. Your total down payment will be submitted before the end of escrow, minus the deposit you already gave to your real estate agent in the form of a personal check or money order. Your down payment depends on what type of financing you get. There is FHA financing, which is 3.5% down, or conventional which is at least 5% down.  Maine is also a great state for the USDA RD loan. This is only available in rural areas of Maine (Most of Maine qualifies) and it provides 100% financing.

At the end of escrow, the house is yours.

In general people file bankruptcy under two chapters and these are Chapter 7 and Chapter 13. In case of Chapter 7 bankruptcy, you are required to handover all of your assets to the bankruptcy trustee. They analyze your debt amount and then sell off the assets to pay the creditors and lenders. However, in case of Chapter 13 bankruptcy, you are required to make the debt payments through a reorganization plan ascertained by the court. Thus, in this case you can retain your assets. Thus, it becomes important for you to calculate the payments through a useful mortgage calculator. In the same way, you can use Chapter 13 bankruptcy calculator.

Calculating the bankruptcy payments

 The bankruptcy proceedings under Chapter 13 bankruptcy involve helping out the debtor so as to allow him/her to pay off debts using future earnings. Thus, in case of Chapter 13 bankruptcy you do not lose your assets. Rather the bankruptcy trustee is appointed to check your assets. The bankruptcy proceedings can be entered by you as a debtor or can also be initiated by the creditors. After the bankruptcy is filed, the creditors cannot seek to collect the debts directly from you, outside the process of distribution by the bankruptcy trustee. You cannot even sell off or gift your assets and property to anyone which has been declared as part of your bankruptcy estate.

 So, how can you calculate the payments that you will be required to make to the creditors under Chapter 13 bankruptcy? Now, in order to calculate the payments, you need to first understand that there are three main types of creditors to whom you owe the debts. So, the three main types of creditors are the unsecured, secured and the post creditors. Moreover, the post creditors and the secured creditors are not considered in the payment calculations in case of Chapter 13 bankruptcy.

 Now, in order to calculate the monthly bankruptcy payments under Chapter 13 bankruptcy, you will have to make a list of the estimated monthly expenditure. This will include the utilities and tuition payments, the tax and food payments, payments on other necessities, mortgage, car loan and other debt payments. However, expenditures on entertainment, vacations and other such expenses are not considered. In addition, you will have to calculate the regular monthly income coming from all kinds of sources.

 After that, you will have to subtract all of the necessary expenses from regular monthly income (gross) to get some idea on the cash figure. Like, if you have a stable monthly income; let us take around $3,000 and if the secured creditor payments amounts to $2,600 then around $400 will be available for the unsecured debt payments. This is considered to be the key calculation in case of bankruptcy payments.

 Now, if your affordability rises, you can talk to the court and the trustee. They may analyze the situation and help you in increasing the amount that you are required to pay each month to the creditors under the bankruptcy program.

 Other than calculating the payments on your own, you can also use a bankruptcy calculator. Just like a mortgage calculator, you will easily be able to find a bankruptcy calculator with various websites. You can use such calculators to calculate the monthly payment that you will be required to make under the Chapter 13 repayment plan.

 So, you can see that in both ways you can calculate the payments that you will be required to make to the creditors under bankruptcy. This is going to help you in maintaining the payments and get out of the bankruptcy early enough.

Hillary Bickford

207-831-1900

hillarybickford@gmail.com

Beautiful country cape in a quiet yet convenient location.Wonderfully landscaped, including a functioning barn w/ pastures.Very well maintained w/ hardwood and pine floors, open concept, 1st floor bedroom/den option, w/ daylight basement and finished room.

The market is struggling to gain stability as market swings are the norm as of late. Mortgage bonds are now falling back off pushing rates higher.

Mortgage bond prices opened weaker this morning erasing the gains from yesterday afternoon but have recovered a bit near pricing to keep things in check.
Global equities brushed aside the Greek turmoil and posted gains overnight. US stock are higher with the DOW up over 40 points.
To repeat…. the roller coaster ride continues.
The data this morning was mixed. Factory orders up 0.3%, expected down 0.1%. Weekly jobless claims @ 397k, expected @ 400k, not rate friendly, Productivity up 3.1%, expected up 2.8%.
Yesterday the Fed made no rate changes and indicated:

 
-Growth strengthened somewhat in Q3
-Vote was 9-1, Evans wanted additional policy accomodation
-Household spending increased
-Signs point to continued weakness in labor market, elevated unemployment
-REPEATS significant downside risk to economic growth, notes strains from GLOBAL financial markets
-Inflation moderated
-Repeats the conditions likely warrant exceptionally low Fed Funds Rate at least through mid 2013
-Expects inflation to settle in coming quarters
-Will continue to reinvest principal payments of mortgage debt back into mortgage-backed securities

We still have the EMPLOYMENT REPORT FRIDAY.

This morning, FHFA announced their enhancements to the HARP refinancing program. Operational details of the plan are to be released on November 15. Only loans that were purchased or guaranteed by Fannie Mae or Freddie Mac on or before May 31, 2009 and have a current LTV over 80% are eligible. In addition, the loan must be current, no late payments in the last six months and no more than one late in the last 12 months. There are no restrictions on who may refinance these loans.

Program guidelines include:

-              No limit on LTV, if new loan is a fixed rate loan (current LTV must be above 80%)

-              Loans previously refinanced under HARP not allowed

-              Certain agency fees will be waived if new loan is a shorter term loan

-              Appraisals not required where Agency AVM is available

-              Certain originator Reps and Warrants will be  waived

Borrowers can determine if their loan is owned or guaranteed by Fannie or Freddie at http://www.fanniemae.com/loanlookup/ or http://www.freddiemac.com/corporate/