Orlando Area Real Estate News

WASHINGTON (AP) – Aug. 6, 2010 – Higher monthly fees are coming for consumers who take out home loans guaranteed by the Federal Housing Administration, the primary source of mortgages for first-time homebuyers.

The Senate late Wednesday unanimously approved legislation giving the FHA the power to hike monthly premiums it charges to consumers. The measure now goes to President Barack Obama, who is expected to sign it.

The new law would affect new loans and not ones that already have been made.

Officials say the agency needs the authority to stabilize its finances, which have deteriorated because of the foreclosure crisis. The fees are projected to bring in an extra $3.6 billion per year, according to the FHA.

The agency does not make loans, but offers insurance against default.

People who take out FHA-backed loans pay a smaller downpayment, as low as 3.5 percent of the home price. But they are subject to two additional fees – one at the start of the loan and an annual fee. Both fees are typically spread out in monthly installments over the life of the loan.

Borrowers who take out loans through FHA pay an annual fee of 0.55 percent of the total loan. FHA officials expect to raise that to 0.9 percent, though the bill would give them the power to hike it as high as 1.55 percent.

Earlier this year, the FHA raised the upfront fee to 2.25 percent of the total mortgage amount from 1.75 percent. Agency officials want to lower that to 1 percent.

The combined impact of lowering the upfront fee and raising the monthly fee would mean a borrower taking out a mortgage of $170,000 at an interest rate of 5 percent would pay an extra $38 a month.

Copyright © 2010 The Associated Press, Alan Zibel, AP real estate writer.

Contact us if you are interested in zip code or community specific information in the Orlando Market. Just click the “Contact US” link or email us at benchmark@benchmarkrealtygroup.net

Are you behind on your loan and not sure what to do?

There are several options. Foreclosure, Deed in Lieu of Foreclosure, Short Sale, etc. If you choose to short sale we can help. Benchmark Real Estate Group, Inc has had great success in successfully closing short sales.

The process can feel complicated. The process when completed properly proceeds nicely. Since many of the banks have commenced using the equator systems we are getting responses in typically forty five (45) days from the date the contract is submitted to the lender. This is great timing. It does however require detailed and comprehensive packages to be submitted to the lender.

You can short sell primary residences as well as investment property. It is advisable to consult and accountant and an attorney prior to proceeding forward with this business decision. Consulting a competent consumer credit counseling company is also helpful.

Contact us if you would like a FREE CONSULTATION regarding the short sales process.

Email – benchmark@benchmarkrealtygroup.net

An increasing number of home owners in foreclosure continue to live in their homes, mostly ignoring the foreclosure action and refusing to pay anything.

The average borrower in foreclosure is unlikely to be evicted for 438 days, says LPS Applied Analytics. LPS says more than 650,000 households haven’t paid their mortgage in 18 months, and in the case of 19 percent of those households, the lender hasn’t made any effort to repossess the property.

In some states like California and Texas, lenders can foreclose without a say-so from the courts. In those states, the action is likely to be quick. But in 19 states, including Florida and New York, the court must approve the foreclosure and resulting eviction and the process is slow.

Source: The New York Times, David Streitfeld (05/31/2010)

1. Compare property values and rents
Financial statistics only go so far; the best measure of a property’s market value is often the sale prices of nearby properties. The same holds true for area rents. A low price can often be justified by a reasonable rent; renters who can afford a high rent can afford to buy instead, so reasonably priced rent is a must.

2. Pay attention to tax laws
Don’t base your tax investment on current tax laws. The tax code is constantly changing, and a good investment is a good investment regardless of the tax code. The right property with the right financing is what you should look for as an investor.

3. Specialize in something you know
Start in a market segment you know. Whether you focus on fixer-uppers, foreclosures, starter homes, low-down payment properties, condominiums, or small apartment buildings, you’ll benefit from experience by specializing in one aspect of investment real estate properties.

4. Know the costs before getting started
Know the financial statements inside out. What are operating expenses? What are loan payments? Vacancy costs? Taxes? What does the cash flow statement look like? These are key issues that must be addressed before making a solid investment.

5. Know where your tenants are coming from
If the last rent increase was recent, your tenants may be considering a move. If tenants have a short-term lease, they may be living there simply to attract unsuspecting buyers. It is also important to collect the tenants’ security deposits at closing.

6. Assess the tax situation
Taxes are an integral part of successful real estate investing, and they often make the difference between a positive cash flow and a negative one. Know the tax situation, and see how it can be manipulated to your advantage. It may be a good idea to consult a tax advisor.

7. Investigate insurance coverage
If a seller’s coverage is based on lower-than-current replacement value, your insurance cost may increase when you pay a higher purchase price.

8. Confirm utility costs
Ask the local utilities to verify recent utility expenses, especially if any of these costs are included in your tenant’s rent.

9. Consult your accountant
Taxation is a key element of successful real estate investing, so be sure to find an accountant who is well-versed with the constantly evolving tax code.

10. Inspect
Make sure that you always perform a thorough inspection of the property before buying it. Never, ever buy any property without at least examining the site. In some cases, hiring professional inspectors to examine the structural mechanical system may be a sound investment.

Home prices in many parts of the U.S. are still on the road to recovery, but in other parts of the world, prices are rising so fast that some officials are worried about potential housing bubbles.

In China, home prices rose by 11.7 percent from March 2009 to March 2010. In Canada, the Canadian Real Estate Associates says home prices rose 17.6 percent during the same period. And in Australia’s eight state capitals, prices rose 20 percent between the first quarter of 2009 and the first quarter of 2010.

Some economists are looking at this phenomenon and considering ways to take the air out of the balloon.

Many of them are applauding the suggestions offered by Olivier Jeanne, a professor of economics at Johns Hopkins University and Anton Korinek, an assistant professor of economics at of the University of Maryland, who urge a tax that would discourage large amounts of debt.

The thinking is that when people borrow money, they end up paying more for a house and inflating values. This “financial accelerator” also works in reverse when the market is in a downswing, making problems worse.

Source: The Economist (05/08/2010)

The Florida Appliance Rebate program officially lasts from April 16 to April 25, but you may want to act quick, as the rebates are expected to run out fast.

Products good for rebates include refrigerators, freezers, dishwashers, clothes washers, room air conditioners, hot water heaters, and gas tank-less.

Each rebate is good for 20 percent off the retail price of the appliance.

You can cash in on your rebates at www.rebates.com/florida or by calling 877-521-2135.

The official Florida rebate Web site estimates that 66,000 Floridians will be able to take advantage of the offer.

The program is part of a $300 million federal stimulus program for energy rebates. It follows similar efforts in Ohio, Texas, Arizona and other states.

A pair of U.S. Senators from Florida has joined forces with a Senator from Louisiana to get some sort of relief for homeowners whose residences were built using Chinese drywall.

Since problems with the drywall first came to light, more than 3,000 complaints have been filed with the Consumer Product Safety Commission; most from Florida and Louisiana. The defective drywall not only makes the home’s smell bad, like rotten eggs, but has been linked to the corrosion of wiring, air conditioning units, computers, doorknobs and jewelry, along with possible health effects.

Now Senators Bill Nelson and George LeMieux from Florida and Senator Mary Landrieu of Louisiana have written to mortgage lender Fannie Mae asking for help, according to CBS4 news partner The Miami Herald. Nelson and Landrieu also contacted Freddie Mac.

According a recommendation from the Consumer Product Safety Commission, the tainted homes should be gutted. To aid the homeowners with the cost of not only repairing their homes but also finding a temporary place to live, the Senators have asked the lenders for six months or longer of mortgage relief.

The lawmakers point that Fannie Mae has already given as much to some Virginia homeowners with Chinese drywall.

Some homeowners like Joyce Dowdy, 71, and her husband Sonny, 63, are not going to wait. The plan to move out of their $150,000, 1,600-square-foot Cape Coral home while it is gutted to get rid of tainted Chinese drywall.

Joyce Dowdy said she suffers from nose bleeds and her husband has a persistent cough. They blame the drywall.

“We can’t live like this anymore,” Joyce Dowdy.

They’re borrowing money to do the gutting, which means that instead of a mortgage-free retirement they will be paying monthly bills cover the costs of repair.

“It’s costing us as much as we paid for the house,” Joyce Dowdy said. “But we can’t just walk away … Our house is worth nothing at the moment.”

Source: MMX CBS Television Stations

The best deals on homes these days are often on properties that aren’t perfect.

Home shoppers looking for a great deal should keep these factors in mind when they are looking for a place with potential:

· Location, location, location. It’s still true that you get a better deal when you buy the worst house in a great neighborhood than you do when you buy a fancy house in a not-so terrific neighborhood.

· Less than 50 years old. Properties older than a half decade are likely to have more fundamental problems — like aging wiring, inadequate plumbing and sagging foundations.

· Livable floor plan. Buyers should select a home with a basic design they can live with. Once they start moving walls, they’re into big money.

· Light. Houses with the most potential have plenty of natural light.

· Good storage. Adding storage isn’t cheap, so it’s smart to choose a property that already has it.