Blog – Page 836 of 838 – Mike Pfefferman

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May

Homeowner Tips

5 Tips To Protect Yourself When Buying Newly Constructed Real Estate

5 Tips To Protect Yourself When Buying Newly Constructed Real Estate Buying newly constructed real estate isn’t much different from buying an “already used” home. What variances there are, however, can make all the difference between buying a diamond or a lemon.

Here are a few tips to keep in mind when buying new construction:

Tip #1: Don’t Use The Builder’s Sales Agent – Hire Your Own

If they’re the builder’s agent, they’re being paid to represent the builder, no matter what they tell you. Your own real estate agent, who is representing you, is required to tell you the negatives as well as the positives. The builder’s agent doesn’t have to tell you the drawbacks of the transaction.

Tip #2: Find Your Own Lending Agency

Again, if you go through the builder, the lending agency may offer you a deal that isn’t in your best interest. In addition, the builder may actually own the lending company, and will have full information on your personal progress.

Your real estate agent can refer you to a reputable lender, if you don’t already have one of your own.

Tip #3: Talk To A Real Estate Agent Or Lawyer

Although standard agreements are made to keep everyone out of court, they aren’t necessarily in your best interests. Ask about cancellation rights and make sure you understand both your liability and your commitments. Also, check your contract to make sure it doesn’t contain warnings about health issues.

Tip #4: Decide What Options Or Upgrades You Want

Remember that the profit margin for many builders is highest in upgrades. Find out if your lender allows the options and upgrades you’ve chosen to be added to the loan. If your lender doesn’t allow this, the cost of the upgrades will come out of your pocket in cash.

Tip #5: Research The Builder

It’s amazing how many people think a builder is good, simply because they can build a house. Unless you’re a licensed home inspector, the chance of you catching a cut corner or shoddy building practices is slim to none.

Check out the neighbors’ homes and talk to them. Are the homes a consistent size or are they shrinking in size? Do the neighbors have consistent complaints about the quality of their homes? Also, check public records for lawsuits.

Owning newly constructed real estate and knowing that you’re the first person to live in the home can be a wonderful, exciting experience. Make sure that you protect yourself so you can enjoy it!

Thinking of buying newly constructed real estate? Talk with me before you start shopping. If you visit a builder prior to working with me, I won’t be able to legally represent you with that builder.

To find out more about how I can help you save money and get the best terms when buying newly constructed real estate, call or email your trusted mortgage professional for more information.

28

May

By support

Mortgage Rates

FOMC Minutes: Committee Discusses “Normalizing” Policy

FOMC Minutes: Committee Discusses “Normalizing” Policy April’s meeting of the Fed’s Federal Open Market Committee was held along with the Board of Governors of the Federal Reserve System.

Meeting minutes released Wednesday indicated the committee’s interest in “normalizing” its monetary policy. This included the FOMC’s ongoing commitment to tapering its asset purchases under its quantitative easing program.

The committee agreed to taper the Fed’s monthly asset purchases by $10 billion to $45 billion per month. Committee members discussed raising the target federal funds rate, which now stands at 0.00 to 0.25 percent, but the minutes clearly stated that this topic was undertaken as part of “prudent planning, and did not indicate that normalization would necessarily begin sometime soon.”

The FOMC minutes reflected the committee’s concern with achieving a balance between normalizing the Fed’s monetary policy and keeping short-term interest rates under control.

Meeting attendees considered methods for managing interest rates and considered potential impact of each method discussed on overall financial stability.

Importance Of Early Communication

Meeting participants discussed the importance of early communication of pending changes to the Fed’s monetary policy, and agreed that advising the public “well before the first steps in normalizing policy become appropriate.”

Early communication to the public of planned changes was viewed as a means of providing clarity and credibility to FOMC policy decisions and help FOMC achieve its statutory goals of maximum employment, stable pricing and moderate long term interest rates.

Potential Impact Of Achieving Normalcy

FOMC members discussed the possible impact of tools considered for use in normalizing the economy on the following:

Fed control over short-term interest rates
The Fed’s balance sheet and Treasury remittances
Functionality of Federal Funds Market
Financial stability in normal times and times of stress

The minutes noted that the Fed has never used any of the methods discussed while the Fed held a large balance sheet, and recommended that flexibility in using tools for achieving normal fiscal policy.

No decision was made about normalizing current monetary policy; FOMC and Fed Board members agreed that further study and analysis were needed before any decisions would be made.

Fed: Mortgage And Refinance Applications “Tepid”

The FOMC minutes characterized the level of mortgage and refinance applications through March as tepid, due to increasing mortgage rates and home prices.

While a survey of senior loan officers revealed that mortgage credit had been loosened for applicants with prime credit, mortgage credit remained tight for those with less than excellent credit.

The unemployment rate held steady at 6.70 percent and remained above the FOMC’s benchmark of 6.50 percent. There was some good news as the workforce expanded and the ranks of the long-term unemployed decreased.

Stable employment is important to potential home buyers; if unemployment levels continue to fall, numbers of home buyers are likely to increase.

27

May

By support

Mortgage Rates

What’s Ahead For Mortgage Rates This Week – May 27, 2014

What’s Ahead For Mortgage Rates This Week – May 19, 2014 Last week’s economic news was dominated by speeches given by Federal Reserve presidents, the minutes from April’s FOMC meeting and commencement address given by Fed Chair Janet Yellen. The latest readings for new and existing home sales were also released.

Federal Reserve Speeches Suggest Concerns Over Monetary Policy Dependence, Low Inflation

Here are highlights of comments made by each of the Fed presidents’ speeches. Richard Fisher, president of the Dallas Fed, and John Williams, President of the San Francisco Fed, spoke at a conference held at the Bush Institute.

Mr. Fisher said that 98 percent of jobs lost during the recession had been recovered, and that other jobs had been added. He also cited “bad fiscal policies,” and said he is worried about dependence on the Fed’s monetary policy when “Congress and the Executive Branch have put on the brakes.”

John Williams, president of the San Francisco Fed, said that he was concerned about slowing momentum in housing markets, although he noted that housing had driven economic recovery in the aftermath of the recession.

The inflation rate has remained well below the Federal Reserve’s target rate of 2.00 percent, and Mr. Williams said that the Fed is paying close attention to this. His remarks were supported in Wednesday’s release of the FOMC minutes of its April meeting.

Charles Plosser, the Philadelphia Fed’s president, took an optimistic tone at a speech given before the Women in Housing Foundation on Tuesday. He said that the national unemployment rate could fall below 6.00 percent by the end of 2014 and that he expects the housing market to bounce back as well.

This makes sense, as strong labor markets are known to influence consumer decisions to buy a home.

New York Fed President William Dudley spoke before the New York Association for Business Economics, and said that there would be “a considerable period of time” between when the current asset purchase program ends and the first Fed rate hike would occur.

He also indicated that he expected longer-term interest rates (which include mortgage rates) to be “well below” a historical average of 4.25 percent.

Minneapolis Fed President Narayana Kocherlakota said that the Fed should consider targeting price levels rather than the current policy of targeting the inflation rate. He said that this was not likely to occur any time soon, but noted that current Fed policy is “undershooting” the central bank’s goals for unemployment and inflation.

Fed Chair Janet Yellen cited her predecessor, Ben Bernanke as a positive example when she spoke at New York University’s commencement. She noted that he took “courageous actions unprecedented in ambition and scope” and that his “grit willingness to take a stand” had directed his decisions during the recession.

Mortgage Rates Down, Existing Home Sales Up

Freddie Mac reported that average mortgage rates dropped last week. The average rate for a 30-year fixed rate mortgage fell to 4.14 percent, a drop of six basis points. The rate for a 15-year fixed rate mortgage fell by four basis points to 3.25 percent.

The average rate for a 5/1 adjustable rate mortgage dropped by five basis points to 2.96 percent. Discounts were unchanged at 0.60 percent for 30-year mortgages and 0.40 for 5/1 adjustable rate mortgages, but dropped to 0.50 percent for 15-year mortgages.

Sales of existing homes rose to their highest level in four months according to the NAR. Month-to-month sales of previously-owned homes rose by 1.63 percent in April to a seasonally adjusted annual rate of 4.65 million sales as compared to March’s reading of 4.59 million sales. This was the first rise in sales of existing homes in 2014, and nearly met expectations of 4.66 million sales.

This Week

After the Memorial Day holiday, this week’s economic news includes the Case-Shiller Home Price Index, FHFA’s house price index and consumer confidence index.

Pending home sales, jobless claims and Freddie Mac’s mortgage rates report along with the University of Michigan consumer sentiment index round out the week’s scheduled events.