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Thursday, January 22, 2015
Thursday, January 15, 2015
FHA Mortgage Insurance Premiums Reduced!
FHA rate reduction will lower mortgage insurance premiums
Lower rate will reduce FHA mortgage premiums
Obama to announce measure to boost homebuying.
The Federal Housing Administration will reduce the mortgage insurance premium rate charged on loans backed by the agency in an effort to turn more renters into homebuyers, the White House confirmed Wednesday.
The 0.5 percentage point decrease in the annual insurance premium rate, to 0.85 percent from 1.35 percent, is expected to reduce a borrower's annual mortgage payment by about $900. President Barack Obama is expected to talk about the change during a speech Thursday in Phoenix.
FHA-backed mortgages have been a path to homeownership because they require only a 3.5 percent down payment and have been popular with lower income, minority and first-time buyers. Minority buyers account for almost one-third of FHA-insured mortgages for first-time homebuyers, according to the agency.
But in an effort to deal with the agency's sagging finances, the FHA increased costs tied to those loans several times during the past few years, making the mortgage product less desirable.
An announcement late last year that Fannie Mae and Freddie Mac also would accept mortgages with 3 percent down payments had the potential of making the FHA even less relevant.
The FHA's premium hikes were necessary because the home loan insurance fund was designed to operate independent of taxpayer subsidies. As a result of the housing crisis and borrower defaults, the fund was operating at a loss as it paid out claims to lenders. In 2012, its net worth was negative $16.3 billion.
But the FHA's annual report to Congress showed that its mutual mortgage insurance fund on Sept. 30 had an economic net worth of $4.8 billion, a $6 billion improvement from a year earlier.
The National Association of Realtors, along with 18 senators, last year campaigned for the FHA to decrease premiums. The Realtors' group noted that increases in the premium from its 2010 level of 0.55 percent may have priced out 125,000 to 375,000 first-time and repeat buyers from the market.
The association also called for the FHA to no longer require insurance for the life of the loan. It is uncertain whether Obama will address that.
Analysts at the Urban Institute, in a blog post this week, called on the FHA to "stop overcharging today's borrowers for yesterday's mistakes."
As of September, the nation's homeownership rate had sunk to 64.4 percent, a 19-year low. That compares with a rate of about 69 percent a decade ago.
"Many creditworthy families who can afford, and want to purchase, a home are shut out of homeownership opportunities due to today's tight lending environment," the White House said in a statement confirming the premium rate decrease.
The statement also noted that other changes will be announced to "cut red tape and clarify lending standards."
Tuesday, January 13, 2015
How Much Could Lower FHA Mortgage Insurance Costs Save You?
By Alison Paoli
In an effort to make homeownership more accessible and sustainable, President Obama announcedlast week the Federal Housing Administration (FHA) will reduce annual mortgage insurance premiums by 0.5 percentage points. On a $175,000 home loan with less than 5 percent down, that reduction would mean a savings of $818 per year, or $3,932 over five years.
FHA annual mortgage premiums are paid in 12 monthly installments every year, and are paid on top of principal, interest and insurance. For new FHA loans, they last for the entire life of the loan, regardless of whether you have more than 20 percent equity in your home.
The announced changes will take the annual mortgage insurance premiums from 1.35 percent to 0.85 percent for loans with less than 5 percent down, and from 1.30 percent to 0.8 percent for loans with more than 5 percent down. According to the White House, the lowered premiums will help more than 800,000 homeowners save on their monthly mortgage costs and enable up to 250,000 new home buyers to purchase a home.
Monday, January 12, 2015
Huffington Post: The 10 Best Cities To Live In For Empty Nesters
When the kids are gone and you no longer care about the quality of neighborhood schools, a new realm of possible places to live opens up. Rent.com compiled a list of the 10 top cities for empty nesters -- their first -- based on low crime, lower-than-average living costs, climate and convenient access to travel.
Rent.com’s Senior Brand Manager Niccole Schreck noted that there has been a cultural shift toward urban living among empty nesters. "For that reason," she told The Huffington Post, "it is not surprising to see the cities that made our list are typically outside major urban markets with a plethora of activities, excitement and culture available to renters over 50.”
Rent.com is just one company that provides recommendations of best places to live. We recently published International Living's list of top 25 places to retire. And here's a list of top 20 small cities to grow older in America.
But, first, here are the new rankings from Rent.com. Would you consider:
1. Fremont, California
Fremont, close to Silicon Valley, is a 15-minute drive to downtown San Jose. The town center is around Lake Elizabeth with a new water park for when the grandkids visit. Great views when you hike up Mission Peak.
Fremont, close to Silicon Valley, is a 15-minute drive to downtown San Jose. The town center is around Lake Elizabeth with a new water park for when the grandkids visit. Great views when you hike up Mission Peak.
2. Colorado Springs, Colorado
Must. Love. The Outdoors. Colorado Springs placed number one in Outside's 2009 list of America's Best Cities. TripAdvisor describes it thusly: "A crossroads for historians, sportsmen, architects, artists and gourmands, Colorado Springs offers a delightful mix of Western charms. Sunny skies and crisp mountain air make it a perfect place for a golf outing, extreme sports or a picnic in one of the many, many well-maintained parks."
Must. Love. The Outdoors. Colorado Springs placed number one in Outside's 2009 list of America's Best Cities. TripAdvisor describes it thusly: "A crossroads for historians, sportsmen, architects, artists and gourmands, Colorado Springs offers a delightful mix of Western charms. Sunny skies and crisp mountain air make it a perfect place for a golf outing, extreme sports or a picnic in one of the many, many well-maintained parks."
3. Huntington Beach, California
When the waves call, there is only one thing to do: Head for Huntington Beach,known as Surf City USA.
When the waves call, there is only one thing to do: Head for Huntington Beach,known as Surf City USA.
4. Scottsdale, Arizona
Scottsdale is part of the Greater Phoenix-area sprawl and home to many retirement communities. People are drawn there for the mild winters. Come summer, temperatures can soar above 100. Yeah, but it's a dry heat. Scottsdale has tons of destination spas and the famed Mayo Clinic has one of its three major branches here.
Scottsdale is part of the Greater Phoenix-area sprawl and home to many retirement communities. People are drawn there for the mild winters. Come summer, temperatures can soar above 100. Yeah, but it's a dry heat. Scottsdale has tons of destination spas and the famed Mayo Clinic has one of its three major branches here.
5. Riverside, California
College towns make great retirement places because they come with a host of built-in cultural activities, not to mention pet sitters when you want to travel. UC Riverside is a great campus, and is also home to the Riverside Sports Complex. Riverside is also home to the parent Washington navel orange tree -– mother to millions of navel orange trees the world over and one of the two original navel orange trees in California.
College towns make great retirement places because they come with a host of built-in cultural activities, not to mention pet sitters when you want to travel. UC Riverside is a great campus, and is also home to the Riverside Sports Complex. Riverside is also home to the parent Washington navel orange tree -– mother to millions of navel orange trees the world over and one of the two original navel orange trees in California.
6. Irvine, California
Another college community -- UC Irvine -- but this one is closer to the beach. Irvine is a planned suburban city that may be best defined by what it's near: Everything. Disneyland, South Coast Plaza mall, Newport Beach, the Pacific Ocean. It consistently scores high on best-places-to-live lists.
Another college community -- UC Irvine -- but this one is closer to the beach. Irvine is a planned suburban city that may be best defined by what it's near: Everything. Disneyland, South Coast Plaza mall, Newport Beach, the Pacific Ocean. It consistently scores high on best-places-to-live lists.
7. Torrance, California
Torrance boasts over 30 parks with 300 acres of parkland and is home to the Madrona Marsh, one of the country’s few urban wetland and nature preserves. It also has about 1.5 miles of beach, most of which are way quieter than others on the Santa Monica Bay. Torrance is also the birthplace of the American Youth Soccer Organization.
Torrance boasts over 30 parks with 300 acres of parkland and is home to the Madrona Marsh, one of the country’s few urban wetland and nature preserves. It also has about 1.5 miles of beach, most of which are way quieter than others on the Santa Monica Bay. Torrance is also the birthplace of the American Youth Soccer Organization.
8. Manchester, New Hampshire
For the money-minded: Kiplinger voted Manchester the second most tax-friendly city in the U.S., second only to Anchorage, Alaska (and probably not as cold.) And in 2009, Forbes magazine ranked the Manchester region number one on its list of "America's 100 Cheapest Places to Live." If nothing else you can visit the nearby Anheuser-Busch Brewery in Merrimack and see the famous Budweiser Clydesdale horses.
For the money-minded: Kiplinger voted Manchester the second most tax-friendly city in the U.S., second only to Anchorage, Alaska (and probably not as cold.) And in 2009, Forbes magazine ranked the Manchester region number one on its list of "America's 100 Cheapest Places to Live." If nothing else you can visit the nearby Anheuser-Busch Brewery in Merrimack and see the famous Budweiser Clydesdale horses.
9. Henderson, Nevada
Just a spit from the Las Vegas strip, this desert community has long been a draw for retirees. It's gearing up to be Nevada's first bike-friendly community. In 2011, Forbes magazine ranked Henderson as America's second safest city.
Just a spit from the Las Vegas strip, this desert community has long been a draw for retirees. It's gearing up to be Nevada's first bike-friendly community. In 2011, Forbes magazine ranked Henderson as America's second safest city.
10. Chandler, Arizona
Chandler is another Phoenix-area city. It was named after Dr. Alexander John Chandler, the first veterinary surgeon in what was known then as the Arizona Territory. Chandler hosts an annual Ostrich Festival, commemorating the fact that during the 1910s, ostrich farms in the area catered to the demand for plumes used in women's hats.
Chandler is another Phoenix-area city. It was named after Dr. Alexander John Chandler, the first veterinary surgeon in what was known then as the Arizona Territory. Chandler hosts an annual Ostrich Festival, commemorating the fact that during the 1910s, ostrich farms in the area catered to the demand for plumes used in women's hats.
Friday, January 9, 2015
Tuesday, January 6, 2015
Home buyers give weight to needs of kids, grandparents
For today's parents, purchasing a home has become a family affair.
Baby Boomers may have been concerned about careers and the convenience of commutes when house-hunting, but for Generation X and Millennial parents, the needs of their children and even grandparents are a part of the homebuying process.
According to a study from Coldwell Banker Real Estate, the shift is measurable.
The survey, conducted among 2,800 parents from three generations, suggests that today's children may be elevated to the position of "chief purchasing officers" of the family. It found that 79 percent of Millennial parents (ages 18-34) and 70 percent of Gen X parents (ages 35-49) said most of their major purchasing decisions, including home purchases, revolve around their children. Only about 50 percent of the Boomer parents said this was true when they were raising their families.
Buyers are also making the needs of their own parents a priority when making a move, and grandparents are considering their children when planning for retirement. Many buyers also understand that grandparents can add to the quality of life of their own children in practical and intangible ways. Longer life spans lead to more long-term decisions.
Sunday, January 4, 2015
The REAL Reasons Americans Buy a Home
There’s No Place Like Home
The top 4 reasons to own a home cited by respondents were not financial.
1. It means having a good place to raise children & provide them with a good education
From the best neighborhoods to the best school districts, even those without children at the time of purchasing their home, may have this in the back of their mind as a major reason for choosing the location of the home that they purchase.
2. You have a physical structure where you & your family feel safe
It is no surprise that having a place to call home with all that means in comfort and security is the #2 reason.
3. It allows you to have more space for your family
Whether your family is expanding, or an older family member is moving in, having a home that fits your needs is a close third on the list.
4. It gives you control over what you do with your living space, like renovations and updates
Looking to actually try one of those complicated wall treatments that you saw on Pinterest? Want to finally adopt that puppy or kitten you’ve seen online 100 times? Who’s to say that you can’t in your own home?
The 5th reason on the list, is the #1 financial reason to buy a home as seen by respondents:
5. Owning a home is a good way to build up wealth that can be passed along to my family
Either way you are paying a mortgage. Why not lock in your housing expense now with an investment that will build equity that you can borrow against in the future?
Bottom Line
Whether you are a first time homebuyer or a move-up buyer who wants to start a new chapter in their life, the holiday season is a great time to reflect on the intangible factors that make a house a home.
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