Deal. If you are contemplating buying a home, now may be the perfect time to make a purchase -- if you have the money and a secure job.
Real estate sales have sagged in many parts of the country as buyers have been frozen in the headlights of the economic downturn. As a result, prices are falling in many markets.
"If I could buy real estate right now, I would," says Amy Bonis, a certified mortgage planner with Alera Financial in Raleigh, N.C. "It's clearly a buyer's market. If you can buy a house that is undervalued, it's like, what shade of green do you want?"
In addition, mortgage rates have fallen near historic lows, substantially reducing the cost of financing for buyers with good credit.
Bonis says buyers who act now rather than wait are likely to see the best return.
"Somebody has to start buying, and when they do, there are going to be more buyers on the market, which is going to cause home prices to go up," she says. "When you stimulate home prices to go up, that affects the economy in a positive way, which raises interest rates. What people don't realize is, by the time they hear that things are better, (their opportunity) is already gone."
MYTH: Flood insurance is not available in high risk areas
FACT:Almost anyone in NFIP participating communities can purchase flood insurance. In fact, this program was specifically created to help those in Special Flood Hazard Areas (SFHA) obtain coverage. Federally regulated lenders must require borrowers in SFHAs to buy flood insurance as a condition of their mortgage. One exception: residents of Coastal Barrier Resource System (CBRS) areas are not eligible for flood insurance. These residents make up much less than 1% of the US population.
MYTH: You can wait until the last minute to buy flood coverage.
FACT:Although you can buy coverage just prior to a flood, there is a 30 day waiting period after you have paid the premium before the policy becomes effective. Two exceptions to the waiting period are:
if the flood map for your community was revised in the last year, and
if your initial flood insurance purchase is required to close a loan. Otherwise you must wait for 30 days before coverage begins.
MYTH: My homeowners policy covers flood damage to my home and property.
FACT:Homeowners policies rarely, if ever, cover flooding as a cause of loss. The only way to protect your home from loss due to flood damage is federal flood insurance.
MYTH: Flood insurance is available only to homeowners.
FACT:Coverage is available to protect homes, condominiums, apartments, and commercial - nonresidential buildings.
MYTH: If your property has been flooded even once, you can't get flood insurance.
FACT:As long as your community participates in the NFIP, you are eligible to buy flood insurance, regardless of how many times your property has been flooded.
MYTH: I don't need flood insurance, I'm not in a high risk area.
FACT:Around 25% of NFIP's claims come from outside high risk flood areas. Substantial premium discounts exist for residents who live in low to moderate risk areas.
MYTH: No basement coverage is available on a flood policy.
FACT:Flood Insurance provides coverage for basement clean up and items used to service the building such as boilers, furnaces, hot water heaters, air conditioners, etc. Most contents and improvements to basements are not covered.
MYTH: Federal disaster assistance will pay for flood damage.
FACT:Less than 50% of all flooding incidents are declared federal disaster areas. The $400 average annual flood insurance premium is much less costly than is interest on a federal disaster loan. Furthermore, recipients of federal disaster loans or grants must purchase flood insurance to receive disaster relief in the future.
MYTH: The NFIP encourages coastal development.
FACT:One of NFIP's primary objectives is to guide development away from coastal or flood-prone areas. In addition, the Coastal Barrier Resources Act of 1982 (CBRA) relies on the NFIP to discourage building on fragile coastal areas covered by the CBRA.
MYTH: Federal flood insurance can only be purchased directly through the NFIP.
FACT:Federal flood insurance policies are sold through private insurance agents and companies and are backed by the full faith and credit of the United States of America. Travelers is proud to work with the NFIP in providing this essential form of coverage.
MYTH: NFIP insurance does not cover flooding from hurricanes or the overflow of rivers or tidal waters.
FACT:The NFIP definition of coverage does cover floods caused by hurricanes or overflow of rivers or tidal waters. However, two or more acres or two or more adjacent properties must be affected. The policy defines flooding as a general and temporary condition during which the surface of normally dry land is partially or completely inundated. The cause of flooding can be:
overflow of tidal waters or inland waters
runoff, such as from rainfall
mudflows caused by flooding
collapse of land along a body of water from erosion exceeding normal levels.
MYTH: Wind driven rain is considered flooding.
FACT:Damage by wind driven rain is not covered under the NFIP policies, but is usually covered under homeowners policies such as those offered by Travelers as a windstorm peril.
FORECLOSURE. Every which way we turn we seem to be hearing that horrible word lately. Indeed, foreclosures have spiked dramatically due to a variety of reasons. But, there may be hope for many people in this dire situation.
"Separate from the stimulus package, President Obama has made up to $200 billion available to shore up investor confidence in the mortgage secondary market and up to $75 billion in incentives to encourage lenders and borrowers to refinance troubled loans. The effort is critical because of the destabilizing impact of high foreclosures and distressed sales.
"When people lose homes to foreclosure, our communities, the housing market, and our economy all suffer," Charles McMillan (President of NAR) says. The plan details include:
Help for home owners making their payments but at risk of default. Home owners with a conforming loan could be eligible to refinance as long as their mortgage doesn't exceed 105% of the home's current market value.
Help for home owners already in default and in need of loan modification. For lenders that voluntarily agree to lower a borrower's payment so that it makes up no more than 38% of the borrower's income, the government would share the cost of lowering the mortgage burden further.
Doubled resources to Fannie Mae and Freddie Mac. To encourage investors to buy the secondary market companies' mortgage-backed securities, the government promises to back them up to $400 billion, twice the current amount.
If you know of any borrowers who are having trouble keeping up on their mortgage, tell them to call their mortgage servicer or a HUD approved nonprofit housing counseling agency. 8 8 8 8 8 8 Source: Robert Freedman, REALTOR Magazine
Home ownership: it's the American dream, settling in, putting down roots, and becoming part of a community.
But home ownership also represents one of the safest, most solid investments you can make- yielding immediate benefits and long-term value. Home owners accumulate wealth for the future while enjoying the benefits of a shelter they can use, improve and sell. A home is the basis for positive community involvement and fosters participation in democratic institutions.
According to data from the Federal Reserve Board, a home owner's net worth is 46 times that of a renter. And home ownership remains affordable for many. More than two in every three households in America own their own homes (U.S. Census Bureau, 2008 data). ... ... ... ... ... ... 8 8 8 8 8 8 Source: Real Estate Trends Fall 2008
Welcome to my real estate blog! I am going to update this site frequently with information, tips, trends, etc. pertaining to real estate. I will be focusing on environmentally conscious and sustainable real estate, market trends, mortgage information, pertinent tax information, insurance tips, home staging ideas and much, much more! If you have any questions or comments I have set up an email account specifically for this blog: BKMRealEstateBlog@gmail.com Please let me know if you have any specific items you would like me to cover. I am very excited to begin this venture with you!
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