- Home owners who paid less than $75,000 for their home were the most satisfied at 77 percent.
- Home owners who paid more than $800,000 were least satisfied at 69 percent.
- Buyers who purchased a home via short sale had the highest satisfaction rate at 83 percent, followed by foreclosed home buyers at 79 percent.
- New-home buyers had a satisfaction rate of 73 percent, and existing-home buyers had a satisfaction rate of 71 percent.
- Home owners ages 55-65 were the most satisfied at 76 percent. Home owners between 18 and 25 had the lowest satisfaction rate at 45 percent.
“Renting is the cheaper way to go!” Is this widely believed “fact” still true? According to the latest research, renters spend 5% more on housing than home owners. To find out why it’s more logical to just buy a home, rather than rent, and how the times have changed, visit Renters Outspend Owners on Housing.
Pessimists are implying that the housing market will never get any better and housing will always be a lousy investment.
Are they right? Of course not, say experts at the Motley Fool finance Web site.
In fact, the Fools predict that pretty soon housing will be a great investment because prices will have fallen to the point where homes are cheap.
Then as now, the Fools say the key to buying a home that is a good deal will be:
• Don’t overpay
• Buy what you can afford
If the price goes up, great, the Fools say. If not, buyers will be OK because they have picked a great place to live.
Source: The Motley Fool (08/23/2010)
Potential home buyers in search of a mortgage are wary of all kinds of adjustable rate loans these days, but hybrid ARMs can be really good deals even in these times of historically low interest rates, some lending experts insist.
Hybrids are “a great product at a great rate,” says Christopher Cruise, a mortgage broker in Silver Spring, Md.
Currently, starting rates are under 4 percent, generally a full percentage point lower than traditional, 30-year, fixed-rate mortgages. Hybrids are locked in at that starting rate for five, seven, or sometimes even 10 years, then they adjust—usually a maximum of 2 points a year with an overall cap of 6 or 8 points.
In the meantime, the savings on a hybrid ARM can be thousands of dollars and make sense for a buyer who doesn’t expect to be in a home for more than five or six years.
Even if they stay in the same house, it’s likely they’ll have an opportunity to refinance. “Seven years for a mortgage is an eternity these days,” Cruise says.
He recommends that buyers do the math, considering the worst-case scenario. In many cases, particularly with jumbo loans, the savings will still be substantial even if the loan adjusts to the maximum for a couple of years.
Source: United Features Syndicate, Lew Sichelman (05/03/09)
Mortgage rates are rising, despite the government’s efforts to hold them down.
The government can’t control all the factors that affect mortgage rates. Mortgage interest has climbed because more borrowers refinanced when rates fell and boosted the supply of mortgage bonds.
Experts also attribute rising rates to expanded borrowing by the government to pay for stimulus packages, worries about Fannie Mae and Freddie Mac, and concerns about whether the central bank will continue to purchase mortgage bonds after June.The suggestion that the government solve the problem by creating an entity that offers 30-year mortgages at preset rates of 4 percent or 4.5 percent has drawn criticism.
“Not a lot of buyers are likely to want to buy a 3.5 percent mortgage-backed security, so the government may end up being a significant holder of these loans,” said Nicholas Strand, a mortgage strategist with Barclays Capital. “And that number could run up to trillions of dollars.”
Source: The Wall Street Journal, Prabha Nataraian (02/03/2009)
Buying a house doesn’t necessarily require getting a 30-year, fixed-rate mortgage.
More and more people are exploring alternative financing plans as it gets harder to get a conventional bank loan.
Here are some creative ways to pay for a home, according to some financial experts:
- Securities-backed loans. The lender gives the borrower 80 percent of the value of his stock portfolio. Then the lender holds the stock for between three and 10 years while charging a 3 percent to 5 percent interest on the loan. At the end, the borrower gets his original shares back. Both win if the stock has increased in value.
- Two-step mortgages. This fixed rate mortgage is amortized over 40 years, but the payment schedule is adjustable.
- Constant-amortization mortgage. Buyers start with a higher payment, but the loan is constantly re-amortized, so principal is reduced faster than with a conventional loan.
- Family loans. In the most successful arrangements, the family puts the agreement in writing and the lender charges the borrower a rate of interest high enough to pass IRS scrutiny, thus avoiding any gift tax.
- Assuming a mortgage. Buyers interested in purchasing a house in the pre-foreclosure stage might ask the lender if they can assume the mortgage. In some circumstances this can be a good deal.
Source: Forbes, Matt Woolsey (01/26/09)
Some cities that were hardest hit by the real downturn are experiencing mini sales booms.Las Vegas real estate properties are down 28 percent in price, but sales of homes are up 15 percent.
Motivated buyers accounted for 64 percent of Las Vegas sales in October, says Radar Logic, a derivatives firm. That’s the highest rate in the country.
“There’s a pretty active housing market, it’s simply at a lower-priced inventory,” says Michael Feder, chief executive of Radar Logic. “And there are now bidding wars taking place over homes in foreclosure.”
Phoenix and San Diego are reporting similar experiences.
“We’re clearing out the bad news,” says Kiva Patten, a director at Merrill Lynch specializing in housing derivatives.
“By the end of 2010 – that’s where we’re calling the bottom in the forward market. You’re going to get a small price appreciation in 2011,” says Patten. “It’s not like the turn is 10 percent per year, it’ll be something like 3 percent or 4 percent.”
Here are the cities where experts say it makes the most sense to buy now.
- Las Vegas
- Sacramento, Calif.
- San Diego, Calif.
- Los Angeles
- San Francisco
- Washington, D.C.
- San Jose
Source: Forbes, Matt Woolsey