Growing Latino Housing Influence

The growing Latino population will significantly impact real estate in the United States, said Rogelio Sáenz, dean of the College of Public Policy at the University of Texas. While presenting at the 6th Annual Mortgage Lending Industry Strategic Markets and Diversity Conference, Sáenz based his assertion on demographic trends, citing numbers which show one out of every two people added to the U.S. population each year is Latino. Sáenz said the Latino population could easily triple from 49.7 million in 2010 to 132.8 million by 2050, significantly shifting the makeup of the nation's homebuyers. Sáenz cited data from the National Association of Hispanic Real Estate Professionals, which suggests Hispanics are now the largest minority group and a significant mportion of the age group that is most often involved in home sales — mainly those who are 26 to 46 years old. He added the growing Hispanic population is more likely to have families with children, spurring the need for homeownership. Mark Calabria, director of financial regulation studies at the Cato Institute, has studied home lending issues in the United States and agrees that the Latino share of the housing market is growing, Calabria said in an interview with HousingWire...

Source: HousingWire

Real Estate News- October 25, 2011

Of more than 3,000 homeowners and renters polled by Hanley Wood, 30 percent said they were living with relatives; that is the highest rate of doubling up since the Great Depression, attributable to the economic and housing market slumps. Although poll-takers said stricter lender standards, larger down payment requirements and economic and employment concerns have hindered home purchases, 87 percent of homeowners and 73 percent of renters believe homeownership is critical to the economy. As many as 2 million potential owners are waiting for the right time to buy, with 29 percent of renters and 19 percent of homeowners planning to purchase a new home during the next couple of years.

Source: Housing Predictor


Buyers have a long list of what they want when home shopping, but one of their biggest desires: A good deal. "And no matter where a seller prices their property, they’re looking to negotiate," says Patricia Szot, president of the MetroTex Association of Realtors®. But that’s not all they want. Bankrate.com recently asked real estate professionals to chime in on the top desires of their buyers when home shopping. Here are four things that made the list of top home buyer preferences:

1. Homes that are in good condition. "There’s not a lot of flexibility in that," says Ron Phipps, president of the National Association of REALTORS®. Many buyers now take the attitude: "I’d rather spend the money getting into the house" and not have to spend more money later, Phipps says. One of the major reasons is that "buyers have limited amounts of cash," he adds. "Even if they want to do a fixer-upper, they don’t have the money to do it."
2. A bargain with incentives. Buyers are looking for a good deal, even when considering bank-owned properties, says Joan Pratt, real estate broker with RE/MAX Professionals in Castle Pines, Colo. "They want the short sales and the foreclosures and they want them to look like they’re owner-occupied," she says. "They don’t want to paint. They don’t want to put carpet in. They don’t want to clean." And they aren’t only asking for a low price but they also want incentives to buy too. As such, sellers are offering everything from gift cards for new furniture to paint to financial assistance at closing.
3. Outdoor living areas. Homes with screen porches, outdoor kitchens, two-way fireplaces are becoming increasingly competitive in the marketplace as more buyers say they want more outdoor living space.
4. Open kitchens. "The wall between the kitchen and the family room is evaporating," Phipps says. "The kitchen is becoming part of the gathering space.”

Source: Bankrate.com

 With the tightening of credit standards, more home buyers are finding themselves rejected when they go to apply for a loan. But after just one rejection, lending experts say buyers shouldn’t give up — they may still be able to qualify for a home loan if they keep trying. But buyers shouldn’t give it another try until they take a close evaluation of why the original application was turned down in the first place, and find ways to address those issues in their second or even third attempt, Marisol Torruella, a loan originator told The New York Times. Applicants can, by law, find out why they were rejected for a loan application. The Equal Credit Opportunities Act requires lenders within 30 days to give applicants, in writing, the specific reasons why they weren’t given a loan. For some rejected borrowers, they may need to save up for a larger down payment or take steps to improve their credit score. Some applicants may find shopping around for other lenders can help, as well as discussing additional alternatives with their lender. Applicants might also find a better option is a loan from the Federal Housing Administration, which have less stringent requirements, but some surveys show that most borrowers aren’t aware of FHA loans.

Source: The New York Times

Have you been rejected for a loan with another lender or afraid that you would be? Please contact us for a free assessment to find out what can be done to put you in position to make your next attempt successful.

Real Estate News- October 21, 2011

New CoreLogic study has determined that there are substantial reserves of positive home equity nationwide, citing recent Federal Reserve data showing that Americans held about $6.2 trillion in equity in their homes at the end of the 2011 second quarter. Federal and industry estimates also reveal that nearly one of every three homes is debt-free. According to CoreLogic, nearly half of homeowners with home loans have at least 25 percent equity and almost a quarter have more than 50 percent equity.

Source: Worcester Telegram & Gazette
The Appraisal Institute recently released a form to help appraisers factor in energy-efficient home features when valuing homes. The forms can also be used by real estate agents in describing “green” properties on the MLS, the Appraisal Institute notes. Everything from a home owners’ energy efficient appliances to solar panels may now get more attention from appraisals with the added form. The new form allows appraisers to identify and describe a home’s green features. It will serve as an optional addendum to Fannie Mae Form 1004, which is the appraisal industry’s most commonly used form for home loan purposes, used by Fannie Mae, Freddie Mac, and the Federal Housing Administration. “We hope lenders, home builders, real estate agents, and home owners will take advantage of this new tool,” Joseph C. Magdziarz, president of the Appraisal Institute, said in a statement. “Lenders who want to see energy features analyzed should request the green addendum to be included with Form 1004. We also encourage lenders to provide the green addendum to home owners so they can fill it out and provide it to their appraiser. If a new home is being appraised, home builders can use the addendum to provide data to appraisers. Real estate agents also can use the data to help populate the MLS.”

Source: RIS Media

New job opportunities have more people on the move, according to a survey by Apartments.com conducted to gauge its Web site visitors’ 2011 moving plans. While new job opportunities have more residents relocating, more current home owners are also entering the rental market, which is a growing trend, the survey finds. Here are some of the survey’s findings:

• Reasons for moving. The most popular reason for moving was because of employment opportunities: 28.8 percent survey respondents said they were relocating for a job, compared to 10.4 percent who moved for job opportunities the previous year.

• Growing trend. More current home owners and first-time renters are entering the rental market, according to the survey. More than 20 percent of the survey’s respondents who are looking for an apartment this year said they are current home owners—32 percent of whom are also first-time renters.

• Planning ahead. Many of the survey’s respondents said they are apartment shopping now for a move that will not take place until much later in the year. Indeed, nearly 20 percent of respondents are starting their apartment search three to four months in advance and nearly a quarter are looking five months to more than a year out.

"It’s a good idea to lock into a lease right now," says Chris Brown, vice president of product management for Apartments.com. "Many management companies have announced rent increases. As vacancy rates continue to drop and the rental market improves, we expect to see the upward trend grow. Deals can still be had, but they’re getting harder to find.”

Source: PRNewswire.com

Tax Deductions For Homeowners

You have heard it before. Owning a home is a great tax deduction. It is one thing to make a general statement. It is another to understand the specifics of how owning a home may lower your tax liability. Below is a list of important points that every homeowner should know. Note that this is not a complete list of allowable deductions.

Itemizing deductions. In order to deduct your mortgage payment, you must itemize deductions rather than take the standard deduction. As a general example, if your allowable standard deduction is $5,000 and you only have $3,000 in itemized deductions, you will be better off taking the standard deduction.However, if the home gives you an “extra” $10,000 in itemized deductions, you are better off itemizing. Note that the “excess” $2,000 ($5,000 minus $3,000) will not garner any benefit because you are now itemizing.

The housing payment. The housing payment is generally comprised of four segments: Principal, interest, taxes and insurance (PITI) . Generally, you can deduct two of these—mortgage interest and taxes. The good news is in most cases these two items comprise the greatest majority of the total payment. For example here are some fictitious numbers given to illustrate this point:

100 Principal
1,000 Interest
400 Taxes
50 Insurance
$1,550 Total Payment (PITI)

Of this example, $1,400 out of $1,550 is deductible, or approximately 90% of the payment.

Again, using fictitious numbers, if the above homeowner was in a 25% tax bracket, the home payment would actually be reduced by approximately $400 per month after taxes. There are a few exceptions or requirement with regard to this rule—

• The deduction is only allowable for principal residences and second homes. Homes which are rented out (investor properties) have additional tax benefits.
• You cannot deduct interest on any loan amount above $1 million.
• You can only deduct interest on a mortgage which is taken out to purchase, build or improve a property.
• You may be able to deduct a mortgage insurance payment under certain conditions.

Points. A point is a cost charged by a mortgage company for originating a mortgage and/or buying the rate down on that mortgage. Generally points are deductable in the year that they are paid when they are used to purchase a primary residence. If the purpose of the mortgage loan is to refinance an existing loan, then the points may still be deductable, but must be spread out over the life of the loan, unless the refinance was to improve the present home. There are additional restrictions regarding the deducting of points which are not delineated herein.

Investor properties. Those who own properties for the purpose of generating income can deduct the cost of expenses of carrying the property against the income of that property. Allowable expenses would include interest, insurance, taxes, maintenance, depreciation and more. Again using a fictitious example…

$1,000 Rental Income (monthly
   -800 Interest, taxes and insurance
     -50 Maintenance
   -100 Depreciation
     $50 monthly “net” income or $600 for the year.

Sale of the home. Another major tax benefit is achieved when someone sells their home. The profits of the sale of a principal residence are excluded from income up to a maximum of $500,000 for joint filers, including married couples, and $250,000 for individuals. You must have owned the home at least two years and used it as your primary residence at least two out of the past five years.

The tax benefits of owning a home are “great” as advertised. The source of this article is the Book of Home Finance. You are advised to get with your tax advisor for greater clarification with regards to these general rules.

©2011, All rights reserved
The Hershman Group, www.originationpro.com

The Rental Market Heats Up

T he rental market is continuing to heat up and can offer potentially big returns for buyers willing to jump into the landlord role. For investors looking to take advantage of low record-reaching rates and big discounts on home prices, the opportunities are plenty. Rents are rising and demand is up too, partially due to the 4 million former home owners who’ve faced a foreclosure and are now renters. In response, more homes are turning into rentals: Nearly 35.0% of occupied homes were rented in 2010, which is a 33.8% increase from 2000, according to a recent study.

In more than 500 cities, demand for rentals has increased, with vacancies for rental housing reaching its lowest level since 2003, according to Census data.Plus, rents are on the rise too: Nationwide, rents increased 11.6% in 2010 to $1,320 a month, on average, according to Hotpads.com, a real estate research firm. Investors are buying rental properties with the intention to hold onto it for a longer time too: On average, investors say they plan to hold onto the property for 10 years before selling, according to a survey by the Na tional Association of Realtors®. "Whereas leverage is dangerous when buying stocks, rental properties can be a good long-term strategy," said investor Marshall Sonenshine...


Source: Money