Chicago Real Estate Blog

Fixing the Housing Market

noreply@blogger.com (Scott Epstein) — Wed, 27 Jan 2010 16:36:00 +0000

If you've read some of my previous posts you'll know that I'm not a big fan of some of the government's programs because they do not help enough buyers or homeowners. Some problems they do not control, like why does it take up to 4 months or even longer sometimes to get a negotiator assigned to a short sale? Why are these same banks being unreasonable? Why does is it sometimes makes more sense for these lenders to just let properties go into foreclosure?

But there is a lot they can control. Currently they are offering home buyers money if they purchase a home. So if you happen to be in the market for a home, this is certainly a nice incentive, but by no means should this be the deciding factor when purchasing a home. In addition, how many of these people would have bought a home anyway? Maybe not as soon, but most likely within 6-12 months. And what happens when these incentives go away?

Now, I'm not one of those people who just complain and don't have a solution (I don't like those people) and my solutions were not all my ideas, but ideas I've seen or heard from other people as well.

First, eliminate the current incentives being offered. Our country has a big enough deficit, there is no need to print more money because of the housing market.

Second, make down payments tax deductible and make it available to all purchasers. This would encourage home buyers to save a little more money prior to purchasing which would benefit them as well as lenders who lend them the money. Better loans should also allow for lenders more willing to lend more money as well. It would also be an incentive for investors.

Third, raise the limits on FHA loans. If the government insists on throwing money into the housing market then this would be the place to do it. Being that the government owns Fannie Mae and Freddie Mac and are basically just using them as an additional finance arm of the US government, they could increase the loan amount limits. It was recently announced there would be stricter loan qualifications for FHA loans (which I agree with), but take it a step further and raise the limits as well for qualified buyers.,br>
Fourth, offer investors a tax incentive. I already said I think they should make down payments tax deductible so that would qualify as a tax incentive for investors. But another option is to offer a lower capital gains tax for as long as they own the property or at least 5-10 years. I wouldn't offer both incentives, the investor would get to choose the option.

I'm hopeful over the next couple of months some of these ideas will make their way to Congress and we can start to stabilize this housing market. I've listed my ideas, what do you think?

Chicago Area Housing Numbers

noreply@blogger.com (Scott Epstein) — Wed, 27 Jan 2010 14:51:00 +0000

So is the housing market really turning around? I think that depends on which numbers you deem more important. Are year-over-year numbers the ones you look at or month-to-month? If it's the year-over-year numbers you believe provides a better picture then things are certainly looking up.

December was the fourth consecutive month of sales increases year-over-year, 8,197 total homes sold (sinlge family and condos) vs. 6,823 from the same time period a year earlier. That's almost a 20% increase!!!! In addition the median home price was only down 1.9% ($155,000 December 2008 vs. $152,000 December 2009

However, if you believe month-to-month is a better indicator of the market, then the news wasn't as good. The total number of homes sold in December 2009 was 8,197 compared to 10,361 in November 2009. That's more than a 20% decrease!!!! And the median home price fell the same 1.9% ($155,000 November 2009 vs. December 2009).

Both of these numbers are a bit scewed because of the first-time home buyer tax credit. The reason for the large increase in November was due to the first-time home buyer credit expiring and buyers tried to beat the deadline. Thus, the numbers in December are probably a better reflection of the actual market.

I'll be be curious to see the upcoming housing numbers and whether or not the current incentives are extended or replaced with new ones. With the large number of mortgages set to adjust this year, the high unemployment and continued high number of foreclosures, we are not nearly out of the woods yet with this housing market.

Recent Home Sales, What's Next????

noreply@blogger.com (Scott Epstein) — Tue, 24 Nov 2009 19:57:00 +0000

The most recent home sales data showed that sales increased over the past couple of months, but that prices are either stagnant or still falling. I believe the first-time home buyer tax credit certainly helped the sales numbers, but I think these buyers would have purchased a home anyway in the next 3-6 months.

So what happens now? I think the next couple of months will slow down as usual, but potential buyers will be out in full force for the first quarter of 2010 since the extended tax credit requires purchasers to have a signed contract by April 30, 2010 and must close by June 30, 2010. The new tax credit was also extended for existing homeowners, granted they've lived in their home five of the past eight years. They do not need to purchase a more expensive home and they do not need to sell their existing one in order to be eligible for the credit. However, they can only receive up to a credit of $6500 vs. $8,000 for the first-time home buyers.

Once the credit expires, it's anyone's guess as to what might happen, but I think further incentives will still be needed to stimulate the housing market. One idea from a fellow Realtor that caught my attention was making down payments tax deductible. I like this idea because the government doesn't need to print any more money, it encourages home buyers to save a little more, it's an incentive for purchasers of higher priced homes and it should make for more qualified loans.

If you would like more information regarding these tax credits and whether or not you might qualify I can be contacted at scott@illinoisrealestate.com or by calling 847-829-0130.

1853 W 34th Pl Chicago Mckinley Park

noreply@blogger.com (Brian Nygard) — Tue, 26 May 2009 17:01:00 +0000

BEST BUY IN MCKINELY PARK! 2 BEDROOM SINGLE FAMILY HOME WITH SEPARATE LIVING ROOM AND DINING ROOM, OFFICE/DEN, 2 CAR GARAGE, BEAUTIFULLY LANDSCAPED BACK YARD, WALK-OUT BASEMENT AND ATTIC W/ POTENTIAL TO EXPAND. NEAR PUBLIC TRANSPORTATION, I-55, LOOP, SOX PARK.

Price: $180,000
1853 W 34th Pl. Chicago 60608
MLS ID# 07211503
Beds: 2 Baths: 1

Sean Agnew
Realtor
IllinoisRealEstate.com
Cell/Text: (708) 772-2542
eFax: (312) 253-2049
sean.agnew@illinoisrealestate.com

March 2009 Housing Numbers cont.

noreply@blogger.com (Scott Epstein) — Fri, 24 Apr 2009 17:42:00 +0000

For the second month in a row existing homes sold increased in Chicago and the surrounding suburbs.

In the Chicago Metropolitan (nine-county) Area, home sales were up 38.3 percent (4,260 homes sold in March 2009 vs. 3,081 home sales in February 2009).

The median home sale price for the Chicago area was up 5.7 percent ($194,000 in March 2009 vs. $183,500 in February 2009)

For the city of Chicago, March 2009 home sales (single-family and condos) were up 40.6 percent (1,181 sales vs. 840).

The median price for homes in the City of Chicago also rose 0.8 percent ($220,000 in March 2009 vs. $218,125 in February 2009)

State of the Real Estate Market

noreply@blogger.com (Scott Epstein) — Thu, 23 Apr 2009 15:01:00 +0000

Nothing really surprising with the new housing numbers. Being that short sales and foreclosures continue to make up more than half of the housing sales I fully expect the median sales prices to continue to fall. Short sales and foreclosures present the best opportnity to purchase properties at a discount and most of these sales are $300,000 or less. This is great if you are a first-time home buyer or do not need to sell your home in order to purchase one. Unfortunately that is not the majority of would-be home buyers.

You can also expect the number of foreclosures to rise once the 90 day reprive expires (the amount of time given to homeowners to negotiate with their lenders before their lender begins the foreclosure process). I know the government meant well granting this 90 day window, but if someone lost their job, how are they going to pay for their mortgage anyway?

March 2009 Housing Numbers

noreply@blogger.com (Scott Epstein) — Thu, 23 Apr 2009 14:49:00 +0000

According to the Illinois Association of Realtors the nine-county Chicago region saw home sales fall by 26% and a decrease of 42% in housing sales in the city of Chicago vs. the same period last year.

Housing prices continue to fall as well. For the nine-county Chicago region, the median home price (where half the homes sold for more and half sold for less) was $194,000 vs. $248,000, a decrease of 21.8% for the same period a year ago. The news was even worse for the city of Chicago where the median price fell to $220,000 from $300,980 last March.

The nine-county Chicago region consists of the following counties: Cook County, DeKalb County, DuPage County, Grundy County, Kane County, Kendall County, Lake County, McHenry County and Will County.

Will These Government Programs Help The Housing Market?

noreply@blogger.com (Scott Epstein) — Tue, 24 Mar 2009 13:07:00 +0000

Housing is about supply and demand and the government is trying their best to help in both areas. With the Fed buying (A LOT) of US Treasuries bonds they are artifically lowering interest rates on mortgages, which should make housing even more affordable, which should create more demand, but who is buying? The problem is that so many people have been foreclosed or have negotiated short sales and now their credit is so bad they can't get a mortgage, so the pool of potential buyers is greatly reduced. I also know there are plenty of people that are current on their existing mortgages that would love to take advantage of these lower prices, but can not because either they can not sell their current home or the price they would receive would not be sufficient to payoff their current mortgage.

As for the supply aspect, the government is trying to keep as many people as possible in their homes. Obama's refinance and loan modification program is definitely a step in the right direction, but is it too late? Probably not, but what happens to the people who just got laid off and can't find a new job? I believe the government could have a greater impact on the supply side than demand.

The government announced today that they will be purchasing/leveraging up to $1 TRILLION in bad (toxic)assets. There are some interesting aspects of this plan, but I'll concentrate on the real estate part. Assuming most of these bad assets are foreclosures, the government could play a major role with the supply of homes on the market. I would first take at least 50% of foreclosures currently listed off the market. Then for every 3 foreclosure that sell, put another 2 on the market (I wanted to keep the numbers simple). I believe this would help stabilize prices and balance supply and demand.

February 2009 Housing Numbers

noreply@blogger.com (Scott Epstein) — Mon, 23 Mar 2009 14:53:00 +0000

According to the Illinois Association of Realtors Chicago-area home sales in the month of February fell about 29%. There were 3,082 single family homes and condos sold in the nine-county (Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will) Chicago region vs. 4,326 single family homes and condos sold for the same period last year.

The median price of homes in the Chicago-area (same nine county region) fell 23.5%, $183,625 vs. $240,000 for the same period last year.

The news was even worse in the city of Chicago where sales were down 40% (841 units vs. 1412) for the same period a year ago and the median price was down about 24.7% ($218,250 vs. $290,000).

Chicago home prices drop 14.3 percent in 2008

noreply@blogger.com (Brian Nygard) — Thu, 26 Feb 2009 11:54:00 +0000

IllinoisRealEstate.com In The News From Medill Money Mavens (medillmoneymavens.com)

BY INYOUNG HWANG - MEDILL NEWS SERVICE (medillnewsservice.com)

“There’s no doubt we’ve seen a softening of prices throughout Chicagoland,” said Brian Nygard, a Chicago-based realtor who runs the website IllinoisRealEstate.com and writes regularly on the site’s blog. “There’s just not as much demand.”

Read Full Article: http://medillmoneymavens.com/2009/02/24/chicago-home-prices-drop-143-percent-in-2008/ (copy & paste)

Selling in Chicago - Closing Costs to Consider

noreply@blogger.com (Brian Nygard) — Sun, 22 Feb 2009 17:18:00 +0000

I see this question come up time and time again and wanted to provide a good recap of what to expect.

-$3.50 per $1,000 of sale price for Cook Country Transfer Stamps.
-Approximately $750 for title insurance.
-Approximately $500 for Chicago Real Estate Attorney fee.
-The agreed upon proration of real estate taxes and assessments.
-Any pending special assessments.
-Ancillary can costs $100-$500+/-.
-Real Estate Commission - Listing your property with a Broker (like IllinoisRealEstate.com) that is paid at closing.

A good way to get a very close estimate is to have your real estate attorney could draft a preliminary HUD-1 settlement statement for you based on your anticipated selling price.

Please email me if I can answer any questions or help with listing your Chicago home for sale.

Thanks,

Brian Nygard
Realtor/Owner
IllinoisRealEstate.com
Chicagoland Residential + Commercial Real Estate Services
Cell/Text: (312) 217-8002

Excel for Real Estate Financial Analysis Training

noreply@blogger.com (Brian Nygard) — Fri, 20 Feb 2009 18:02:00 +0000

We were asked if we minded posting this to the blog. If you want more information copy and paste the link at the end of the article into your browser. Thanks, Brian Nygard Owner/Realtor IllinoisRealEstate.com

"Kahr Real Estate Group, one of the leading real estate financial training consulting firms in the U.S. will be conducting an open enrollment financial training session in Chicago on 2/28-3/1 (Saturday & Sunday) for real estate modeling in Excel (Excel for Real Estate Analysis).

The course was designed by Josh Kahr, an industry expert and published author, who is also a professor of real estate finance at Columbia University's MS in Real Estate Development program. Professor Kahr trains over 2,500 real estate professionals per year at many of the top investment banks, private equity groups, and prestigious universities in both the United States and major international finance centers such as Hong Kong, Singapore, Tokyo, Dubai and London. Kahr Real Estate Group's extensive client list includes Blackstone, Credit Suisse, Carlyle Group, ING Clarion, University of Chicago and Harvard University, amongst many others.

Excel for Real Estate Analysis is designed for real estate professionals who want to build complex financial models using Excel and is a valuable resource for companies that would like to enhance the quality and efficiency of their analytical team. It is a 2-day intensive workshop divided into lecture, practical exercise, case study and live deal analysis, and devoted entirely how to analyze and break down the financial metrics of a real estate transaction. Attendees will leave the workshop with a strong understanding of advanced Excel features, and how to apply them to build flexible and efficient real estate valuation models.

Kahr Real Estate Group currently offers this course in open enrollment format in Chicago, Boston, New York, Washington D.C., San Francisco, Dallas, and Miami. For a complete schedule of all our upcoming open enrollment sessions please visit http://www.kahrrealestate.com/training.shtml."

For more information contact:

Peter Lieberman | Consultant
Kahr Real Estate www.kahrrealestate.com
55 Broad Street, 7th Floor
New York, NY 10004
T 212 566 4085 ext. 123
peter.lieberman@kahrrealestate.com

New construction hit hardest as '08 sales fall 21 percent

noreply@blogger.com (Brian Nygard) — Thu, 19 Feb 2009 16:04:00 +0000

Total home sales in Chicago dropped 21 percent in 2008 and new condominium sales reverted to pre-2002 levels, according to an analysis by Lakeshore Analytics of all Chicago residential home sales in the last seven years.

Even traditional preserves of Lakeview, Lincoln Park, and Near North were not spared by the drop in sales in 2008. The only neighborhood to post a significant gain in sales was the Near South Side.

Even as the number of home sales fell in almost every neighborhood, the median price of a condo or townhome also declined in 64 of 77 neighborhoods and the median price of a detached home declined in 69 neighborhoods. Many of the neighborhoods that saw the steepest falls in median prices are also those that sell for the lowest amount.

But the real damage was felt in new construction, as buyers pulled back from the new products offered throughout the city. In 2007, developers sold over 7,500 new condominium or townhome units: in 2008, that plummeted 75 percent to just 2,500. New single family homes were over 1,700 in 2007 and just over 750 in 2008.

The report, called “The Neighborhoods 2009” (http://www.lakeshoreanalytics.com/services) was released early this month and is the most complete analysis of residential real estate transactions in Chicago. It details median sale prices, number of sales, new construction trends, and loan-to-value ratios for all 77 Chicago neighborhoods.

A summary, called “Market Trends 2008” is available as a free download from the Lakeshore Analytics web site.

Chicago Sales Trends 02-15-2009 Charts (pdf)

Jeff Baird
Founder, Lakeshore Analytics
jeff@lakeshoreanalytics.com
www.lakeshoreanalytics.com

First-Time Home Buyer Tax Credit

noreply@blogger.com (Scott Epstein) — Wed, 18 Feb 2009 19:36:00 +0000

Part of the recent Stimulus bill President Obama just signed included an increase in the tax credit for first-time home buyers. The amount of the tax credit is the lesser of 10% of the cost of the home or $8000 (the old limit was $7500). However, the big difference is that unlike the previous credit that needed to be paid back, this one does not. The home must be purchased between January 1, 2009 and December 1, 2009.

There are some conditions though.
- You must be a first-time home buyer
- The property must be your primary residence
- You are eligible for the entire credit if your adjusted gross income is at or below $75,000 (individually) or $150,000 (filing jointly). If your gross income is between $75,000-95,000 (individually) or $150,000-170,000 (filing jointly), you may not receive the entire credit. Should your adjusted gross income exceed $95,000 (individually) or $170,000 (filing jointly)you are not eligible for this credit.
- You must remain in the home for at least 3 years. If the home is sold within 3 years of the purchase, the entire amount of the credit is recaptured on the sale.

Stop wasting money

noreply@blogger.com (Brian Nygard) — Wed, 18 Feb 2009 11:12:00 +0000

A furnace filter purpose is to help keep your furnace clean, not your home. Filter manufacturers do an excellent job marketing filters that clean your air, the only thing they do is restrict the air flow throughout your home and stress out your furnace and a/c. There are some excellent air filters on the market that are separate from your furnace, you can also install a UV lite in your furnace that kills mold spores. After all this spending on air quality remember that the clean air is outside, the answer is to exchange the air in your home. Check out the EPA's website. Just buy the cheap $1.00 filters and at a minimum change every three months but I recommend every month.

Thanks, Tim
www.kerfininspections.com
www.epa.gov

Low mortgage rates hard to get

noreply@blogger.com (Brian Nygard) — Tue, 17 Feb 2009 15:16:00 +0000

IllinoisRealEstate.com In The News From The Chicago Journal:

Lenders being more cautious during credit crisis
By Inyoung Hwangand and Claudia-Teresa Pou, Medill News Service

"Applications are one thing," Scott Epstein, the broker and owner of Illinoisrealestate.com, said. "I'd want to see the percent of applicants versus the people that actually get approved."

"Rates will have to stay low for a long time for the housing market to turn around," Epstein agreed."

Read Full Article: http://chicagojournal.com/main.asp?SectionID=42&SubSectionID=120&ArticleID=7009&TM=36873.43

PDF Archive

Housing shows signs of life, but real estate agents still cautious

noreply@blogger.com (Brian Nygard) — Wed, 04 Feb 2009 14:59:00 +0000

IN THE NEWS (Medill Reports - Chicago, Northwestern University): A few real estate agents who have seen a surge in demand over the past couple of months, especially in the suburban regions around Chicago, aren’t surprised with the NAR report.

“There was a property in McHenry that was going for $396,000 in 2006. Now it’s going for $240,000,” said Scott Epstein, the owner of Chicago-based IllinoisRealEstate.com, a subsidiary of Realty Resources LLC. “It’s a similar story in Plainfield – a property went from $365,000 in 2005 to $235,000 now.

“But the city of Chicago market has been more stagnant compared to some of the suburban areas,” he said.

Epstein’s comments are in line with the quarterly Zillow.com Home Value Index report, also released Tuesday, which showed a clear difference between home value changes in the city of Chicago compared with area suburbs.

Read Full Article: http://news.medill.northwestern.edu/chicago/news.aspx?id=114017

Real Estate Agents Wanted!!!!

noreply@blogger.com (Scott Epstein) — Fri, 30 Jan 2009 19:00:00 +0000

IllinoisRealEstate.com is currently seeking self motivated real estate agents. Whether you are a new agent or seasoned veteran just looking for a change, IllinoisRealEstate.com would like to talk with you. We offer some of the best commission splits in the industry and will supply you with a steady stream of qualified leads.

So if you are looking to save money, increase your business or just looking for a change, please contact us. All inquiries are confidential.

We have needs in the following areas: South/Southwest suburbs, Western suburbs and the Northern suburbs.

More info on joining us: http://www.illinoisrealestate.com/agents/team-illinois-real-estate.htm

Scott Epstein
Broker/Owner
IllinoisRealEstate.com
847-829-0130
Scott@illinoisrealestate.com

Chicago homeowners see, but can't get, near-record-low mortgage rates

noreply@blogger.com (Brian Nygard) — Fri, 30 Jan 2009 17:04:00 +0000

IN THE NEWS: “Applications are one thing,” Scott Epstein, the broker and owner of Illinoisrealestate.com, said. “I’d want to see the percent of applicants versus the people that actually get approved.”

Inyoung Hwang/Medill

Read Full Article: http://news.medill.northwestern.edu/chicago/news.aspx?id=113215

Facts About Water Pipes Freezing

noreply@blogger.com (Scott Epstein) — Sat, 17 Jan 2009 14:27:00 +0000

This winter, I have been performing a lot of thermal imaging inspections to locate exactly where home owners water supply lines are freezing. Home owners are often surprised when their pipes freeze because the house doesn't seem cold. They are often puzzled about why the hot water pipes always freeze first. That tendency seems to defy logic, but there is a good reason for this phenomenon. Hot water pipes freeze faster than cold water pipes because hot water contains less gases and tends to supercool and freeze from the center outwards. Cold water, however, tends to crystallize and form an ice cover, allowing the water to continue flowing under the ice layer.

From:
Tim Kerfin @ Kerfin Inspections Inc.

Short Sale and Foreclosure Assistance

noreply@blogger.com (Scott Epstein) — Tue, 30 Dec 2008 14:59:00 +0000

Contrary to what most people are saying I believe that the market will start to improve in the Chicagoland area in the spring and summer of 2009. This is not to say that we will go back to those great prices everyone was use to but interest rates will be down and houses will, I believe, start to sell. The average person owns a home for 3 years, so people that wanted to move any time in the last 2 ½ years will see this as an opportunity to do so.

If you own a home and are not looking to move there are a number of things that you can do besides let your home go into foreclosures. First, either you, or an attorney, can contact your lender and explain your situation. Most lenders are willing to work with you, either by lowering your interest rate or coming to an accommodation to accept a lower payment for a period of time.

Another alternative is to do a short sale. This is where the lender accepts less than what is owed on your mortgage. Say you bought a home for $300,000 and the house will not sell for more that $250,000, you then present a real estate contract to the lender and ask them to accept less. There are several catches with this. First you have to quit paying your mortgage. Yes an attorney is telling you to quit paying your mortgage. Hard as that is to believe you can not be current with your loan. Then you need to list your home with a real estate agent. Short sales are not quick and/or easy to do. You need to hire an attorney to help as besides the documentation that is required it is a very long process. I closed in November on property that went under contract is July. There are a large number of people that are trying to sell their homes prior to the foreclosure so the mortgage companies are overworked. Although since the federal government took over Fannie Mae and Freddie Mac the process seems to be moving a little faster. You MUST prove that you can not continue to pay the mortgage and that you have no other alternative. They also request documentation as to your finances, so they may ask you to contribute with money you have in a bank account.

Another alternative is to list the home and if it does not sell within 90-120 days you can ask the bank to do what is called a deed in lieu of foreclosure. That is where you prove that you can not pay the mortgage and attempts to sell the home have failed and, basically, since they will eventually foreclose on you any way you will just deed it back to the bank. This also requires documentation as to bank accounts and W-2s, income tax returns.

With any of the above I recommend that you use a professional to assist you in working through this maze. Each bank is different as to what documentation they want. In fact banks are even different from one location to another.

If I can be of any assistance to you please feel free to contact me.

Marianne Savaiano Fleisher
Real Estate Attorney
847-913-1193
msfleisher@aol.com.

Recent Home Sales (November)

noreply@blogger.com (Scott Epstein) — Tue, 23 Dec 2008 16:47:00 +0000

November was not a very good month for housing sales in the Chicago metro area.

According to the Illinois Association of Realtors housing sales for the nine-county Chicago area fell 32.3% for the month of November. A total of 3,910 single-family and condos were sold compared with 5,774 for the same period a year prior.

The numbers for the City of Chicago were even worse. Housing sales fell 41.3% (1,057 vs. 1,801 a year earlier).

Housing prices dipped as well. For the nine-county Chicago area housing prices declined 15.9% for the same period a year ago, while Chicago saw prices fall 23.3%.

The nine-county Chicago area consists of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will counties.

Thinking of Refinancing? Better Think Again

noreply@blogger.com (Scott Epstein) — Thu, 18 Dec 2008 15:50:00 +0000

I know I may be stating the obvious here and I'm sure someone else has posted something similar, but I'm going to rant about our banking system as it pertaining to refinancing.

So lets say you purchased a home for $350,000, 2-3 years ago and put down 15% and your mortgage rate is 6.25%. Well, now rates are at or below 5% and you would like to refinance and save a few hundred dollars a month, so you contact the bank your existing mortgage is with and fill out the appropriate paperwork. The bank then sends an appraiser out to look at your home (it's probably just a drive-by) and then informs you that your home is worth about what you owe on it currently and that you will not be able to refinance.

Now if you are like most people your reaction is, what? Why not? So my loan that is already with your bank, that I've never been late on, can not be refinanced at a lower rate? The loan officer then tells you that they are sorry, there is nothing they can do.

Now here is where it gets interesting. Lets say upon learning this that you decide to skip a few mortgage payments and you can prove that you're having a difficult time making your mortgage payments, the bank will then try and work with you and may possibly lower your mortgage rate temporarily or in some cases permanently. Sure your credit score will take a hit, but if you don't plan on making any large purchases within the next year and you plan on being in your home for the long term, it may be worth the gamble.

However, help may be on the way. The government recently has had discussions to help people in this situation. Apparently if you are in good standing with your loan, you may be able to refinance at today's lower rates regardless of the appraisal, but there is not timetable for this and it may never happen.

Fixed Mortgage Rates???

noreply@blogger.com (Scott Epstein) — Thu, 04 Dec 2008 18:38:00 +0000

So I guess my idea to freeze interest rates wasn't so crazy after all.

According to the Wall Street Journal, "The Treasury Department is considering a plan to boost the depressed housing market by easing mortgage rates on new home loans. The plan, which is in the development stages, would bring loan rates down as low as 4.5%, a full percentage point lower than the prevailing rates for 30-year fixed mortgages."

By lowering rates to 4.50% this will make housing more affordable for potential home buyers, but will it increase demand? Mortgage rates are already close to historic lows and that hasn't seemed to help. I think in order for this plan to work they need to allow existing home buyers to refinance at that rate as well. The government has taken a trickle down effect (gave money to financial institutions) when all along they should have taken a trickle up effect (give money to the taxpayers, like the last 3 or 5 years in federal income taxes), meaning in order for you to access the funds the government injected into the economy, you must borrow it. So by offering the reduced rate of 4.50% to everyone you are in essence allowing every homeowner the opportunity to access those funds thus creating a stimulus for every homeowner.

Here are some examples of how much you would save by refinancing at 4.50%:

Current mortgage amount of $250,000 at 6.00% would save about $250/mo.
Current mortgage amount of $350,000 at 6.00% would save about $250/mo.
Current mortgage amount of $250,000 at 6.50% would save about $300/mo.
Current mortgage amount of $350,000 at 6.50% would save about $425/mo.

If you have any questions about how this potentially could impact you, please send your questions to info@illinoisrealestate.com

Home Loans Still Available

noreply@blogger.com (Brian Nygard) — Thu, 04 Dec 2008 17:40:00 +0000

Many homebuyers are concerned that there is no mortgage money available to them to purchase a home in today’s rocky environment. Not true!!! Banks and lenders are just being more cautious before opening the purse strings until they have fully verified the ability of the buyer to pay back the mortgage.

Today’s homebuyer must be ready to provide more financial data than they’ve had to in the past. Lenders are looking for job stability, good – excellent credit, a history of savings and most importantly the strict numbers formula that says you can in fact afford the payment. No longer will lenders provide the “Exotic” loans that allowed for the purchase of more home for less money in the here and now, with the hopes that income and appreciation would take care of rate increases down the road. Today most loans fall into the 30 or 15 year fixed variety, and with rates and housing prices being at an all time low it’s to every buyers advantage to strike while the irons are hot.

Before you start the home shopping process get together with your mortgage loan representative and get “Pre-Approved” for your financing so that you can shop with confidence when you’re out searching with your realtor. Make sure that you’re dealing with a state registered loan originator (look for their 031 number), and also ask them if they have obtained the National Lending Integrity Seal that requires them to abide by stricter ethical standards. See if your loan originator has obtained a National Designation for CRMS or CMC as this indicates that they have taken additional courses and passed stringent exams to obtain these certifications.

I can help you with your home financing needs as I have obtained the designations outlined above. In addition, I am the President of the Illinois Association of Mortgage Professionals, please feel free to call me with any questions and/or concerns that you may have.

Jorge G. Gomez – CRMS
(773) 278-9595 – Direct
(773) 307-5509 – Cell

Jorge.Gomez@1amllc.com