Europe Rises From Recession
Many have wondered why interest rates have risen so sharply this year without the economy showing significant enough strength to heat up inflationary pressures. Yes, the threat of the Federal Reserve decreasing stimulus by lowering their purchases of Treasuries and Mortgage Backed Securities hovers over the markets. Yet, the Fed would not be considering lessening stimulus if they were not more confident about the economy. One must remember that these extraordinary measures were put in place to keep us out of a second recession as the world-wide economy was slowing while we were struggling to come back from our deep recession. How many times did we hear that Europe's recession and fiscal crisis could drag us back into recession?
In the past we asked the question -- will Europe pull us back into recession or will we lead Europe out of recession? We surmised that if the real estate markets in the U.S. continued their recovery, then it was more likely that we would help lift Europe up. While we can't say there was a direct relationship, the news released recently that the Eurozone had a positive quarter of growth bodes well for this scenario as well. A 0.3% growth rate for the 17-nation area is nothing to write home about, but it is progress. One should remember that the central banks in Europe have been applying their own brand of low interest rate stimulus. The fact is that Europe is not out of the woods and we are a long way from a normal recovery. However, the easing of Europe's recession weakens another threat to our economy. The Fed's reaction to lessen stimulus is a normal reaction to the lessening of threats. We are still a long way from ending all stimulus activity from the Fed but we seem to be on the doorstep of the first move.
The Federal
Housing Administration is making it easier for once-struggling homeowners to
qualify for a home loan backed by the agency. For borrowers who meet certain
requirements, the FHA is trimming to one year the amount of time that
homebuyers must wait after a bankruptcy, foreclosure or short sale before they
may qualify for a FHA-backed mortgage. The waiting period had been two years
after the completion of a bankruptcy and three years after a foreclosure or a
short sale. But only certain consumers who've been in those circumstances will
be able to meet the criteria attached to the eased restrictions. Borrowers must
be able to show their household income fell by 20 percent or more for at least
six months and was tied to unemployment or another event beyond their control.
They also must prove they have had at least one hour of approved housing
counseling and, among other things, have had 12 months of on-time housing
payments. "FHA recognizes the hardships faced by these borrowers, and
realizes that their credit histories may not fully reflect their true ability
or propensity to repay a mortgage," said FHA Commissioner Carol
Galante, in a letter announcing the changes. FHA-backed loans are a
popular option for first-time buyers and for consumers with lower credit scores
who might not otherwise qualify for a loan backed by Fannie Mae or Freddie
Mac. Keep in mind that not all lenders will implement these guidelines
as liberally as lenders can be more stringent than FHA guidance. Source:
Mortgage Daily and FHA
On closing day,
expect to sign a lot of documents and walk away with a big stack of papers.
Here’s a list of the most important documents you should file away for future
reference:
·
HUD-1 settlement statement. Itemizes all the costs — commissions,
loan fees, points, and hazard insurance —associated with the closing. You’ll
need it for income tax purposes if you paid points.
·
Truth in Lending statement. Summarizes the terms of your mortgage
loan, including the annual percentage rate and rescission period.
·
Mortgage and note. Spell out the legal terms of your mortgage
obligation and the agreed-upon repayment terms (if they go to refinance, they
will need to provide this).
·
Deed. Transfers ownership to you.
·
Affidavits. Binding statements by either party. For example, the
sellers will often sign an affidavit stating that they haven’t incurred any
liens.
·
Riders. Amendments to the sales contract that affect your rights.
Example: The sellers won’t move out until two weeks after closing but will pay
rent to the buyers during that period.
·
Insurance policies. Provide a record and proof of your coverage. Source:
Realtor Magazine
The Millennial generation is
showing a preference for fixer-upper houses over the “cookie cutter” luxury
homes their parents’ generation tended to desire, according to a national
survey by Better Homes and Gardens Real Estate. About one in three 18-to-35
year olds recently surveyed say they prefer a “fixer-upper” home with minimal
repairs needed. Forty-seven percent say they would be more likely to handle
home maintenance jobs themselves over calling in a professional for help.
What’s more, 72 percent of Millennials consider themselves handy, earning the
nickname the “Fix-It Generation,” according to the survey. They also
aren’t looking for big, luxury homes like their parents but they don’t mind if
a home is smaller, as long as it's unique, the survey showed. Forty-three
percent say they want a home that is more customized and less “cookie cutter.”
They expect each room in the house to fit their lifestyle. Also, 56
percent say that home technology capabilities are more important than a house
with great curb appeal. Sixty-four percent of Millennials said they wouldn’t
even consider living in a home that doesn't have the latest tech capabilities.
Eighty-four percent say that technology is essential for their new home, with the
most sought-after tech in the home being an energy-efficient washer and dryer,
a security system, and a smart thermostat. Source: Realogy
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