News, News and More News!
Stay up on the latest Real Estate News provided by the National Association of Realtors. This page is updated regularly to provide current information regarding Real Estate. J.R. Collins is a real estate professional commited to providing his clients with the most up to date information.
New Taxes on Real Estate Sales and Elimination of Down Payment Assistance
Several States have already enacted a "Transfer Tax" on the Sale of Real estate. This tax is just like a sales tax on your new car, each time the property is sold the buyer will have to pay a sales tax on the selling price of the property! Currently, our congress and House of Representatives are debating this issue, and our State Legislature is also reviewing the passing of a bill to tax the "sale" of the home which you are selling or purchasing. Some States have also passed an attachment to Real Estate, where as a builder/developer or homeowner can add a convenant to a piece of real estate where as each time that real estate sells over a specified period of time, such as 20 years, the new buyer must pay the original owner of that convenant a percentage of the selling price. Developers in large cities are reducing their current selling price but adding such a convenant. This way they can receive a sum of money each time that property sells over the next 20 years. We all agree this is bad for business, bad for families and bad for everyone's investment in the "American Dream" to own a home at an affordable price.
Our Congress is real close to passing a bill that will virtually eliminate any down payment assistance to buyers with government guarranteed loans such as FHA, HUD, VA, GI and more. By passing this bill, every buyer will need at least 20% down in order to get a loan to buy a home. Some have stated that some sellers may offer to pay that 20% down, but will have to raise their selling price by 20% in order to pay for it. If this happens, then the buyers will already have a mortgage 20% over the appraised value of the home even before they move in, this is a recipe for disaster in our housing market. Stay tuned for more information regarding new laws that will effct the buying and selling of real estate.
High Credit Score = Low Mortgage Rate
Credit scoring was developed in the 1960s as a means to determine whether or not consumers were likely to repay their loans. The score ranges from 350 to 850 with a higher score being extremely favorable. Essentially, a high credit score translates into lower interest rates for the borrower.
There are five factors that comprise the credit score. Payment history accounts for 35% of the score; outstanding credit balances have a 30% impact; credit history makes up 15%, type of credit factors at 10%; and inquiries influence the score by 10%. This gives the lender a snapshot of an individual's sense of financial responsibility and ability to pay back loans.
There are many quick tricks to improve the credit score, and I can provide borrowers with more information on this subject. If necessary, I guide them to a reliable resource for credit remediation. If a borrower has to pay a higher interest rate to close a loan, the tarnished credit rating will begin to improve once mortgage payments are made on time and in full. If that is the case, my team and I will be on the watch to alert the borrower when an opportunity arises to refinance and get a lower interest rate.
Information provided by Don Scott, Mortgage Centers of the Ozarks
Mortgage Interest Rates as of July 1st, 2008
| Type of Loan | Rate | Payment per $1000 |
| Rural Development | 6.25% | $6.16 |
| 30 Year Fixed (95% of value) | 6.125% | $6.08 |
| VA (100% of value) | 6.25% | $6.16 |
| 30 Year Fixed (80% of value) | 5.75% | $5.84 |
| 15 Year Fixed (95% of value) | 6.0% | $6.10 |
| FHA 30 Year Fixed | 6.25% | $6.16 |
Data provided by Mortgage Centers of the Ozarks L.L.C.
Don Scott Owner
Phone: (417) 626-0271
What Are Points and When Should You Pay Them?
Points are up-front fees paid to obtain a better interest rate on a loan. One point equals one percent of the loan amount. A lower interest rate may result in a lower monthly payment, but it is important to consider how long you intend to be in the loan, and to compare current rates to historical market trends.
If you take out a $300,000 mortgage and decide to pay one point, this translates into an up-front closing cost of $3,000. Paying a point up front saves $100 a month but it will take 30 months to recuperate the cost of that point. If you decide to refinance or sell the home before the 30-month mark, your money is lost. In this case, you would benefit financially by remaining in the home longer than the 30 months. Rates run in cycles. When rates are at historical lows, it is sensible to pay points if you plan to live in the home for an extended period of time.
Looking to Purchase an Investment Property?
We are in a buyers market right now, making it a great time to invest in real estate. But, before you purchase, contact your Realtor. Your Realtor studies the market daily, he knows where the best deals are, and where to make a smart purchase. Have a plan! Knowing the market, knowing the area and the amount of investment you are willing to make can affect your decision making process. Shop for loans, ask your lendor about fees and closing costs up front. Your realtor can help you understand the buying process. Know your time line, are you planning to flip the property for a profit right away, or invest for 2, 5, or 10 years. The longer you plan to own the property, the more you'll probably need to invest in maintenance and repairs, but, long term home ownership will most likely appreciate over time. Investing in land, especially in this area, is a great investment right now. The maintenance is extremely low, the taxes are minimal, however you may need to own it longer than a residential home to make a nice profit. Buying right, at the right time, can make you a lot of money. Do it right, consult a Realtor.
Protect Your Credit During Divorce The first step of anyone going through a divorce is to obtain copies of your Credit Report from the 3 major agencies: Equifax, Experien and TransUnion. Once a year, you can obtain a free credit report by going to www.AnnualCreditReport.com. There are two types of accounts, and each is handled differently during a divorce. The first is a secured account, meaning its attached to an asset such as your home loan or car loan. The second type is an unsecured account typically credit card accounts and charge cards. When it comes to a secured account, the best option is to sell the asset or refinance, removing yours or your spouses name from the acount. When it comes to unsecured accounts (charge cards) you will need to act quickly. If you are the vested party, and your spouse is the signer, have their name removed. If you are the signer, have your name removed. If you are jointly responsible, freeze the account immediately. It is also importnat to know that a divorce decree does not override any agreement you have with a creditor. So, regardless of which spouse is ordered to pay by the judge, not doing so will affect the credit score of both parties. Ensuring payment on a debt which carries your name is paramount when it comes to preserving credit. Keep in mind that one 30-day late payment can drop your credit score as much as 75 points. Thank you to Don Scott, Mortgage Centers of the Ozarks L.L.C. (ph: 417 626-0271) for the above information.
Realtors Can Assist you in Finding the Best Mortgage Option
More than 2 million subprime mortgage loans that lenders made during the boom years are in foreclosure. A recent study found that one of the biggest problem loans has been what the mortgage industry calls the "exploding ARM", a loan that after a short low-rate period adjusts upward without regard to the direction in which interest rates indicators are moving. Real Estate Professionals are in a position to help borrowers from getting locked into bad loans. The National Association of Realtors is taking steps to help these borrowers with a new series of brochures. NAR published these brochures in partnership with the Center for Responsible Lending. Conact your real estate professional for more information.
Information in this website is deemed accurate and current but not guaranteed.