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Thursday, March 24, 2011

5 Mortgage and Foreclosure Myths
In a mortgage market that changes as quickly as this one, today’s fact is tomorrow’s fiction.  For buyers, misinformation can be the difference between qualifying for a home loan or not. Sellers and owners, knowledge is foreclosure-preventing, smart decision-making power! Without further ado, let’s correct some common mortgage misconceptions.

1.       Myth: Buyers with bad credit can’t qualify for home loans. Obviously, mortgage guidelines have tightened up, big time, since the housing bubble burst, and they seem likely to tighten even further over the long-term. But just this moment, they have relaxed a bit.  In the last couple of weeks, two of the nation’s largest lenders of FHA loans announced that they’ve dropped the minimum FICO score guideline from 620 (which allows for some credit imperfections) to 580, which is actually a fairly low score.

At a FICO score of 620, buyers can qualify for FHA loans at many lenders with only 3.5 percent down. With a score of 580, the lenders are looking for more like 5 to 10 percent down – they want to see you put more of your own skin in the game, and the higher down payment lowers the risk that you’ll default.  However, if your credit has taken a recessionary hit, like that of so many Americans, this might create a glimmer of hope that you’ll be able to take advantage of low prices and interest rates without needing years of credit repair.

2.     Myth: The Mortgage Interest Deduction isn’t long for this world.  Homeowners saved over $85 billion in 2008 by deducting their mortgage interest on their income tax returns. A few months ago, the National Commission on Fiscal Responsibility and Reform caused a massive wave of fear to ripple throughout the world of real estate consumers and professionals when they recommended Mortgage Interest Deduction (MID) reform, which would dramatically reduce the size of the deduction.

Fact is, the Commission made a sweeping set of deficit-busting recommendations to Congress, a few of which are likely to be adopted.  Fortunately for buyers and sellers, MID reform is not one of them.  Very powerful industry groups and economists have been working with Congress to plead the case that MID reform any time in the near future would only handicap the housing recovery.  Congress-folk aren’t interested in stopping the stabilization of the real estate market.  As such, the MID is nearly universally thought of as safe – even by those who disagree that it should be.

3.       Myth:  It’s just a matter of time before loan guidelines loosen up. 
The US Treasury Department recently recommended the elimination of mortgage industry giants Fannie Mae and Freddie Mac. I won’t get into the eye-glazing details of it here, but the long and the short is that (a) this is highly likely to happen, and (b) it will make mortgage loans much harder and costlier to get, for both buyers and homeowners.   It’s possible that loans are as easy to get as they’re going to get.  So don’t expect that if you hold out, zero-down mortgages will come back into vogue anytime soon. Fortunately, Fannie and Freddie aren't likely to disappear for another 5-7 years, so you have a little time to pull your down payment and credit together. If you want to get into the market, the time to get yourself ready is now!

4.       Myth: If you don’t have equity, you can’t refi. Much ado is being made about how stuck so many people are in their bad loans, because they don’t have the equity to refinance their way out of them.  If you’re severely upside down (meaning you own much, much more than your home is worth), stuck may be the situation. But there are actually a couple of ways homeowners can refi their underwater home loans.  If your loan is held by Fannie or Freddie (which you can find out, here), they will actually refinance it up to 125% of its current value, assuming you otherwise qualify for the loan.  That means, if your home is worth $100,000, you could refinance a loan up to $125,000, despite the fact that your home can’t secure the full amount of the loan.

If your loan is not owned by Fannie or Freddie, you might be a candidate for the FHA “Short Refi” program. While most mortgage workout plans are only available to people who are behind on their loans, the Short Refi program is only available to homeowners who are current on their mortgages and need to refinance up to 115 percent of their homes’ value.  So, if you owe $250,000 on your home, you can refinance via an FHA Short Refi even if your home’s value is as low as $217,000. If you think you’re a good candidate for a short refi, contact your mortgage broker, stat – there are some in Congress who think that this program is so underutilized (only 245 applications have been submitted since it rolled out in September – no typo!) that its funding should be diverted to other needy programs.

5.       Myth: 
If you’ve lost your job and can’t make your mortgage payment, you might as well mail your keys in.  Until recently, this was essentially true – virtually every loan modification and refinancing opportunity required that your economic hardship be over before you could qualify. And documenting income has always been high on the requirements checklist. But there are some new funds available in the states with the hardest hit housing and job markets, which have been designated specifically for out-of-work homeowners.

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Tuesday, March 15, 2011

Hays among youngest, fastest growing

Hays among youngest, fastest growing

Posted Under: General Area in Hays County, In My Neighborhood in Hays County  |  March 15, 2011 10:36 AM  |  13 views  |  Nocomments

Most locals intuitively know that Hays County is a young, fast-growing and increasingly diverse community. Now, a new set of data released last month by the U.S. Census Bureau gives hard numbers to back up those hunches.

Following the Census Bureau’s December issuance of the five-year American Community Survey, the Capital Area Council of Governments (CAPCOG) has released its own analysis of data showing trends across the 10 counties of Central Texas, including Hays County.

All of Central Texas has experienced explosive 33 percent growth in the last decade, and Hays County’s population is building at an even more rapid pace of 57 percent. The county now numbers more than 155,000 residents, up from about 56,000 in 2000. Texas is growing at a rate of 18 percent, while the nation as a whole recorded nine percent growth in the last decade.

In the CAPCOG region, only Williamson County, which borders Austin to the north, has seen faster growth, at a rate of 61 percent.  Like Hays, Williamson is a formerly rural outpost whose location along the interstate corridor made it a ripe target for suburban expansion.

That commuter status of both counties is illustrated in the high percent of residents who drive alone to work, representing 78 percent of Hays County residents and 79 percent of Williamson County residents, the highest in the region.

That growth is taking the form of suburban subdivisions. More than 66 percent of housing structures in Hays County are single-family, a rise of more than nine percent in the last decade, representing the largest increase in the region. At the same time, the proportion of mobile homes declined from 16 percent to less than 10 percent in the last decade. Most of the county’s multi-family units house college students in San Marcos. While Buda and Kyle have seen a smattering of apartment developments, new construction has overwhelmingly been in the form of single family homes.

With a median age of 28.4, Hays County is the youngest in the CAPCOG region, and the only county to experience a decline in the median age. That’s largely because one out of five Hays County residents are students at Texas State University in San Marcos, with an average age of 21 years old.

With a median age of 30.1, Kyle residents are younger than the CAPGOC region’s median age of 32, while Buda residents, at 33, are slightly older.

However, the county, like the nation as a whole, can expect to get a little more gray in coming years. Though the median age declined, the proportion of Hays County residents 45 years and older actually increased in the last decade.

In addition to getting younger, Hays County is also growing more racially diverse. Though Asian and African American populations remain small – just 1.2 percent and 4.1 percent, respectively – Hispanics now represent more than one-third of all Hays County residents. Less than 60 percent of Hays residents report their ethnicity as white, a decrease of five percent in the last decade.

Hays County remains slightly less diverse than the region as a whole, which has 57.4 percent Anglo residents. In the ten-county region, only Caldwell County is “majority-minority,” with white non-Hispanics making up 46 percent of the population.

Hays County is more educated than the region as a whole, but slightly less wealthy. Education levels remained roughly constant over the last decade, with 87 percent of residents graduating from high school, 32 percent earning a college diploma and 10 percent achieving a graduate or professional degree.

Like many regions in a recession era, Hays County’s median household income suffered a 10-percent decline in the last decade, dropping nearly $5,500 to $52,409. Nationwide, the median income declined five percent. In the CAPCOG region, income dropped nine percent from $63,000 to $57,000. Unemployment in Hays County remains relatively low, at 6.6 percent.

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Linda F. Reeves-REALTOR®
Texas Realtor
ERA Colonial Real Estate