Housing Starts Slip in January

Construction of new, privately-owned residences fell 14.3 percent last month, according to a report issued recently by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD).  The report also showed that housing starts were 37.8 percent below the January 2006 level.

Bob Walters, chief economist for Quicken Loans says, "While the number of housing starts fell last month, recent data still provides great insight into the continued stabilization of the housing market.  While it is premature to say the weak real estate market that dominated 2006 is behind us, it is fair to say that 2007 will be a year of stabilization. Because of this, we expect unsold home inventories to fall throughout the year, eventually allowing builders to quicken their pace of new home construction."

If there is any area of the home buying process that you have a question about and would like for us to post a tip about it here, leave us a comment or question below and we'll cover that for you in a future post.

Homebuying Tip: Keep a House Hunting Scorecard

In our continuing effort to help you be as informed and knowledgable as possible about the home buying process, we offer this important advice.

Keep a House Hunting Scorecard

When you are looking at real estate, nothing can be more frustrating than trying to think back to which house had which feature that you liked or didn't like.

Keep score of the houses you tour after inspecting each home.  Record its positive and negative aspects and write down your overall impressions.  Eliminate those homes which don't measure up to your satisfaction.  Review your "nice-to-have" list to see how many additional positive points each property may possess, and keep tabs on those "Must Have" items each home has.  These scorecards will be very helpful in narrowing down the field for your final selection.

If there is any area of the home buying process that you have a question about and would like for us to post a tip about it here, leave us a comment or question below and we'll cover that for you in a future post.

Homebuying Tip: Buy or Sell - Which Comes First?

In our continuing effort to help you be as informed and knowledgable as possible about the home buying process, we offer this important advice.

Buy or Sell… Which Comes First?

If you're looking to move up or down in the real estate market, this is a major concern.  Do you try to sell your current home before you purchase, or should you buy a new home and then sell your current one?  After all, you don't want to be without a place to live, should your present home sell before you find a replacement house.

Research short-term rental and storage options (family, friends, storage facilities, containers).  Talk to school officials in your new neighborhood.  They may allow your children to start the next semester in what will be their new school, if you have an offer pending in the neighborhood.

Finding a new home while you still own your present home could also present some financing issues.  One of those issues could be helped with the use of what is know as "Bridge Financing."

Bridge financing is a loan for the down payment on a new home backed by the equity in your old house, typically at prime plus two percentage points.  While helpful in certain circumstances, bridge financing can be expensive.  If you have good credit but your income isn't high enough for you to qualify to carry a bridge loan plus both mortgage payments, consider a no-ratio mortgage, which doesn't take into account your debt-to-income ratio.  Rates are higher but you can refinance later.

Another alternative would be to draw on a home equity line of credit on your old home.  Rates are often more than a point lower than on bridge loans.  But be careful, you might have to pay a penalty fee if you sell the house less than a year after taking out the line of credit.

If there is any area of the home buying process that you have a question about and would like for us to post a tip about it here, leave us a comment or question below and we'll cover that for you in a future post.

Mortgage Defaults: Latest Woe for Housing

Just as the struggling real estate market seems to be stabilizing, a fresh problem is brewing far from real estate offices or home construction sites: a jump in defaults by higher-risk borrowers.

News of rising default rates by buyers with less than stellar credit could put a crimp in financing for home purchases - and prices. That's because the rapid growth of new types of mortgages was one of the key factors behind the boom that sent home buying, and prices, to record highs for five straight years through 2005.

Recently, some serious problems cropped up due to rising defaults. HSBC announced its bad debt charge last year would be about $1.8 billion higher than expected as problems grew in U.S. mortgage securities it had purchased, particularly loans to borrowers of less than top credit, a sector of the industry known as subprime mortgages.

Read the complete story here…  

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Homebuying Tip: Get Pre-Approved

In our continuing effort to help you be as informed and knowledgable as possible about the home buying process, we offer this important advice.

Get Pre-Approved.

Do you already know how much home you can afford?  There is nothing more frustrating than spending a lot of time looking for a home, finding the perfect house, only to discover it is out of your price range. 

Be sure to do your financial homework first.  Assess your financial situation and then speak with a lender to learn about the different financing options available to you.  When you find the right lender, get the paperwork processed so you'll be ready to make an offer when you find the right home.

Not only does being pre-approved give you more peace of mind when looking, it gives you a lot more negotiating power once you've found the home you want and are ready to make an offer.

If there is any area of the home buying process that you have a question about and would like for us to post a tip about it here, leave us a comment or question below and we'll cover that for you in a future post.