Author: Richard Elkman, Group Two
1. You can get a good deal. This is a buyers’ market. Prices on average have come down about 30% from their peak according to the Case-Shiller Index.
2. Mortgages are cheap. You can get a 30-year loan for around 4.3%. As recently as two years ago, they were about 6.3%. That drops your monthly payment by 25% or more. When inflation picks up, and it will, you won’t see these mortgage rates again in your lifetime.
3. You’ll save on taxes. You can deduct the mortgage interest rate from your income taxes and you’ll get a tax break on capital gains when you sell.
4. The home will be yours. You can have the kitchen and bathrooms as you want. You can move the walls, build an extension or paint everything bright orange. These types of changes are impossible for renters.
5. You’ll get a better home. In many parts of the country it is really hard to find a good rental. Many of the best places have been sold as condos. Generally speaking, if you want the best home, in the best neighborhood, you’re better off buying.
6. It offers some inflation protection. Studies by the Case-Shiller Index suggest that, over the long term, housing has beaten inflation by a couple of percentage points a year.
7. It is risk capital. No, your home isn’t the stock market and you shouldn’t view it as the way to get rich. Sooner or later the economy is going to grow and real estate prices will head up again, too.
8. It is a forced savings. Part of a mortgage payment goes towards the principle repayment. You are just paying yourself by building equity. As a forced monthly savings, it is a good discipline.
9. There is a lot to choose from. Builders are sitting with inventory. They have also introduced new model homes that are more energy efficient, and in many cases more affordable to own. That means great choices, as well as great prices.
10. Sooner or later, the market will clear. Demand and supply will meet. As hard as it may be to believe, demand will exceed supply, the price of labor and materials will increase leading to higher prices.
Now is the perfect time to buy if you qualify for a mortgage, especially if you don’t have a home to sell.
Tuesday, November 2, 2010
Wednesday, August 18, 2010
9 Smart Ways to Come Up with Down-Payment Cash
Source: U.S. News and World Report
By: Luke Mullins
Date: August 12, 2010
Although cheaper prices and record-low mortgage rates have made home buying increasingly attractive, tight lending standards continue to keep consumers on the sidelines. And while a beefed-up FICO score and documentation requirements may have slowed the process, it's the pile of cash needed to secure financing that prevents many would-be buyers from becoming homeowners, says Susan Dewey, executive director of the Virginia Housing Development Authority. "For first-time home buyers, generally the biggest obstacle to buying a home is the ability to have a down payment," she says. Consumers struggling to come up with a sufficient down payment, however, may have more options than they realize, as government programs, existing assets, and personal finance techniques can be used to obtain the capital. Here are nine ways that consumers can get their hands on the down payment cash they need to purchase a home.
1. VA, USDA: Veterans, active duty personnel, as well as some members of the National Guard and military reserves can qualify for zero-down-payment mortgages through the U.S. Department of Veterans Affairs. Such home loans are made by private lenders but backed by the agency. Although participants in this program must pay a so-called funding fee, its costs can be rolled into the loan. Closing costs, meanwhile, can be paid by the seller. "Essentially, the veteran can get into a home with no money out-of-pocket and the interest rates are typically very good," says Paula Miller, the Region 3 vice president for the National Association of Realtors. To qualify for the program, borrowers must meet the agency's income and credit standards. For more information, contact a VA-approved lender, one of the agency's regional loan centers, or a Realtor. Similar zero-down-payment mortgages are also available through the United States Department of Agriculture Rural Development program. To determine eligibility, contact your local rural development office.
[Slideshow: 10 Places to Reinvent Your Life in Retirement]
2. State programs: Consumers can also get down-payment assistance through their local state housing finance agency. Although offerings vary by state, such agencies can help first-time buyers by providing grants, subsidized home loans, and other programs, says Dewey, who also serves as the president of the National Council of State Housing Agencies. The Virginia Housing Development Authority, for example, can provide eligible first-time buyers with federally-insured home loans that include second mortgages to cover the down payment and closing costs. "We can finance slightly above 100 percent [of the purchase]," Dewey says. Such buyers must meet requirements on credit, income, and home sales price. To find out if you qualify for similar assistance, contact your local state housing finance agency. (A directory can be found here.)
[Slideshow: 12 States Without Pension or Social Security Taxes]
3. FHA: Borrowers who aren't eligible for such zero-down-payment mortgage programs can still obtain low-down-payment home loans through the Federal Housing Administration. The FHA is a federal agency that insures private lenders against default. Qualified borrowers can access FHA-backed mortgages for as little as 3.5 percent down. These liberal requirements have helped turn the once-sleepy agency into an essential component in the effort to revive the housing market. Although FHA-insured loans represented just 3 percent of the home-purchase mortgage market in 2006, the agency backs about 30 percent of home-purchase loans today. FHA-backed loans are subject to credit and mortgage-size requirements. To see if you qualify, contact an FHA-approved lender near you. (A directory can be found here.)
4. Gifting cash: If you don't have enough down payment cash on hand, a good first step is to see if anyone close to you does, says Keith Gumbinger of HSH.com. "Do you have anybody who can give you money—your parents, a rich uncle, or your grandparents?" Gumbinger says. Gifts from parents or other family members have long been a source of down payment cash for young couples or first-time buyers. "Those gifts have to actually be documented as gifts," Gumbinger says. "You must get something [in writing] from each of those donors that says there is no obligation to pay back the money." Be aware, however, that cash gifts from a single source that exceed $13,000 per individual—or $26,000 per couple—are subject to federal taxes. (Go here for additional details on gift taxes.)
5. Tap your IRA: Certain home buyers can use funds from their IRA to cover down-payment costs without incurring the 10 percent early withdrawal penalty. Individuals who are under age 59½ and have not owned a home within the preceding two years can withdraw up to $10,000—penalty-free—from their IRA to put toward a real estate purchase. The cash can be used for acquisition, financing, or closing costs associated with the purchase. Retirement savings, however, should not be the first place you look for cash. Only take money from your IRA after exploring all alternatives. (Go here for additional details.)
6. Use your 401(k): Although would-be home buyers may be able to access cash from their 401(k) for a down payment on a principal residence, they must first demonstrate a severe financial hardship. Many financial advisers advise against withdrawing funds from your 401(k) unless you have exhausted all other options. (That's your retirement nest egg, after all.) In addition, some 401(k) plans allow participants to borrow a portion of the funds they've saved up to cover a down payment or other expenses. Plans that permit such loans typically provide access to as much as half of the vested account balance, not to exceed $50,000. But once again, home buyers should consider tapping their 401(k) for down payment cash only as a last resort. (Go here for additional details.)
[Slideshow: The Best—and Worst—Places to Build a Nest Egg]
7. Savings plan: Although it might take a little time and discipline, an old-fashioned savings plan can be a great way for consumers to put together enough cash for a down payment. For assistance in creating a savings plan, consider reaching out to a certified credit counselor, says Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling. "To have an objective third party look at your finances and find hidden money within your budget is a super idea," Cunningham says. "They can find things which you may not have thought of." (Go here to find a certified credit counselor near you.)
8. Selling assets: Some of your down payment cash could be sitting right in front of you, Gumbinger says. "You may consider looking through all of the stuff that you have accumulated and see if there are things that you might be able to sell that you don't need," Gumbinger says. "If you have got three flat screen TVs in your apartment because they were cheap and you just started accumulating them, see if you can't get rid of some of those assets and see if they can be turned into something that's going to be more productive for you." Once you've assembled an inventory of items you would be willing to sell, consider holding a garage sale or putting them on eBay.
9. Second job: Additional income, of course, can also help would-be home buyers save enough cash for a down payment. But with the national unemployment rate at 9.5 percent, such work may be difficult to find. Still, it's worth seeing if there is any freelance work you might be able to take on, or checking with your friends who work in retail to see about any part-time openings.
By: Luke Mullins
Date: August 12, 2010
Although cheaper prices and record-low mortgage rates have made home buying increasingly attractive, tight lending standards continue to keep consumers on the sidelines. And while a beefed-up FICO score and documentation requirements may have slowed the process, it's the pile of cash needed to secure financing that prevents many would-be buyers from becoming homeowners, says Susan Dewey, executive director of the Virginia Housing Development Authority. "For first-time home buyers, generally the biggest obstacle to buying a home is the ability to have a down payment," she says. Consumers struggling to come up with a sufficient down payment, however, may have more options than they realize, as government programs, existing assets, and personal finance techniques can be used to obtain the capital. Here are nine ways that consumers can get their hands on the down payment cash they need to purchase a home.
1. VA, USDA: Veterans, active duty personnel, as well as some members of the National Guard and military reserves can qualify for zero-down-payment mortgages through the U.S. Department of Veterans Affairs. Such home loans are made by private lenders but backed by the agency. Although participants in this program must pay a so-called funding fee, its costs can be rolled into the loan. Closing costs, meanwhile, can be paid by the seller. "Essentially, the veteran can get into a home with no money out-of-pocket and the interest rates are typically very good," says Paula Miller, the Region 3 vice president for the National Association of Realtors. To qualify for the program, borrowers must meet the agency's income and credit standards. For more information, contact a VA-approved lender, one of the agency's regional loan centers, or a Realtor. Similar zero-down-payment mortgages are also available through the United States Department of Agriculture Rural Development program. To determine eligibility, contact your local rural development office.
[Slideshow: 10 Places to Reinvent Your Life in Retirement]
2. State programs: Consumers can also get down-payment assistance through their local state housing finance agency. Although offerings vary by state, such agencies can help first-time buyers by providing grants, subsidized home loans, and other programs, says Dewey, who also serves as the president of the National Council of State Housing Agencies. The Virginia Housing Development Authority, for example, can provide eligible first-time buyers with federally-insured home loans that include second mortgages to cover the down payment and closing costs. "We can finance slightly above 100 percent [of the purchase]," Dewey says. Such buyers must meet requirements on credit, income, and home sales price. To find out if you qualify for similar assistance, contact your local state housing finance agency. (A directory can be found here.)
[Slideshow: 12 States Without Pension or Social Security Taxes]
3. FHA: Borrowers who aren't eligible for such zero-down-payment mortgage programs can still obtain low-down-payment home loans through the Federal Housing Administration. The FHA is a federal agency that insures private lenders against default. Qualified borrowers can access FHA-backed mortgages for as little as 3.5 percent down. These liberal requirements have helped turn the once-sleepy agency into an essential component in the effort to revive the housing market. Although FHA-insured loans represented just 3 percent of the home-purchase mortgage market in 2006, the agency backs about 30 percent of home-purchase loans today. FHA-backed loans are subject to credit and mortgage-size requirements. To see if you qualify, contact an FHA-approved lender near you. (A directory can be found here.)
4. Gifting cash: If you don't have enough down payment cash on hand, a good first step is to see if anyone close to you does, says Keith Gumbinger of HSH.com. "Do you have anybody who can give you money—your parents, a rich uncle, or your grandparents?" Gumbinger says. Gifts from parents or other family members have long been a source of down payment cash for young couples or first-time buyers. "Those gifts have to actually be documented as gifts," Gumbinger says. "You must get something [in writing] from each of those donors that says there is no obligation to pay back the money." Be aware, however, that cash gifts from a single source that exceed $13,000 per individual—or $26,000 per couple—are subject to federal taxes. (Go here for additional details on gift taxes.)
5. Tap your IRA: Certain home buyers can use funds from their IRA to cover down-payment costs without incurring the 10 percent early withdrawal penalty. Individuals who are under age 59½ and have not owned a home within the preceding two years can withdraw up to $10,000—penalty-free—from their IRA to put toward a real estate purchase. The cash can be used for acquisition, financing, or closing costs associated with the purchase. Retirement savings, however, should not be the first place you look for cash. Only take money from your IRA after exploring all alternatives. (Go here for additional details.)
6. Use your 401(k): Although would-be home buyers may be able to access cash from their 401(k) for a down payment on a principal residence, they must first demonstrate a severe financial hardship. Many financial advisers advise against withdrawing funds from your 401(k) unless you have exhausted all other options. (That's your retirement nest egg, after all.) In addition, some 401(k) plans allow participants to borrow a portion of the funds they've saved up to cover a down payment or other expenses. Plans that permit such loans typically provide access to as much as half of the vested account balance, not to exceed $50,000. But once again, home buyers should consider tapping their 401(k) for down payment cash only as a last resort. (Go here for additional details.)
[Slideshow: The Best—and Worst—Places to Build a Nest Egg]
7. Savings plan: Although it might take a little time and discipline, an old-fashioned savings plan can be a great way for consumers to put together enough cash for a down payment. For assistance in creating a savings plan, consider reaching out to a certified credit counselor, says Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling. "To have an objective third party look at your finances and find hidden money within your budget is a super idea," Cunningham says. "They can find things which you may not have thought of." (Go here to find a certified credit counselor near you.)
8. Selling assets: Some of your down payment cash could be sitting right in front of you, Gumbinger says. "You may consider looking through all of the stuff that you have accumulated and see if there are things that you might be able to sell that you don't need," Gumbinger says. "If you have got three flat screen TVs in your apartment because they were cheap and you just started accumulating them, see if you can't get rid of some of those assets and see if they can be turned into something that's going to be more productive for you." Once you've assembled an inventory of items you would be willing to sell, consider holding a garage sale or putting them on eBay.
9. Second job: Additional income, of course, can also help would-be home buyers save enough cash for a down payment. But with the national unemployment rate at 9.5 percent, such work may be difficult to find. Still, it's worth seeing if there is any freelance work you might be able to take on, or checking with your friends who work in retail to see about any part-time openings.
Tuesday, August 10, 2010
Exclusive Benefit to CraftMaster Homes' Homeowners
Sears Commercial offers all CraftMaster Homes homebuyers the opportunity to purchase from the largest selection of appliances, home electronics, mattresses, fitness equipment, lawn & garden equipment and more – all at BELOW RETAIL pricing!This is only available to CraftMaster’s homebuyers – not the general public! Just contact our Appliance Select Consultant, Kathy McKenney, and she will help you make just the right decisions for your new home. She will also coordinate delivery and installation to fit into your schedule. Contact her by phone, e-mail or call for an appointment, whichever is best for you.
KATHY McKENNEY
804-740-6229 – office
Kathy.mckenney@searshc.com
KATHY McKENNEY
804-740-6229 – office
Kathy.mckenney@searshc.com
Thursday, July 22, 2010
CraftMaster Offers Amazing Incentives for Military and Local Heroes!
CraftMaster Homes believes in building more than just homes… we believe in building communities, too. We believe in supporting those members of the community who have some of the hardest jobs imaginable. So we are pleased to offer a variety of incentives to help local heroes and military personnel fulfill their dreams of homeownership.
In honor of those who serve our country, CraftMaster is proud to offer a FREE washer, dryer and refrigerator for Military Personnel who write a contract on a CraftMaster Home on or before August 31st. Register here http://craftmaster-homes.com/special-offer-military.html, and CraftMaster Homes will e-mail you a coupon, available only through this special offer. Take the coupon with you to any of our locations throughout the Richmond metro area. Present the coupon to a CraftMaster Homes representative when you write a contract. Valid military ID needed. Ask a sales consultant for details.
In appreciation for those who support and contribute to our communities as Teachers, Fire Fighters, Police Officer or Rescue Squad Members, CraftMaster is proud to offer a FREE washer, dryer and refrigerator to any local hero who writes a contract on a CraftMaster Home on or before August 31st. Register here http://craftmaster-homes.com/special-offer-local-heroes.html, and CraftMaster Homes will e-mail you a coupon, available only through this special offer. Take the coupon with you to any of our locations throughout the Richmond metro area. Present the coupon to a CraftMaster Homes representative when you write a contract. Valid ID required. Ask a sales consultant for details.
In honor of those who serve our country, CraftMaster is proud to offer a FREE washer, dryer and refrigerator for Military Personnel who write a contract on a CraftMaster Home on or before August 31st. Register here http://craftmaster-homes.com/special-offer-military.html, and CraftMaster Homes will e-mail you a coupon, available only through this special offer. Take the coupon with you to any of our locations throughout the Richmond metro area. Present the coupon to a CraftMaster Homes representative when you write a contract. Valid military ID needed. Ask a sales consultant for details.
In appreciation for those who support and contribute to our communities as Teachers, Fire Fighters, Police Officer or Rescue Squad Members, CraftMaster is proud to offer a FREE washer, dryer and refrigerator to any local hero who writes a contract on a CraftMaster Home on or before August 31st. Register here http://craftmaster-homes.com/special-offer-local-heroes.html, and CraftMaster Homes will e-mail you a coupon, available only through this special offer. Take the coupon with you to any of our locations throughout the Richmond metro area. Present the coupon to a CraftMaster Homes representative when you write a contract. Valid ID required. Ask a sales consultant for details.
Tuesday, June 22, 2010
What Will You Do With Your $ 34,646 in 5 Years?
The best way to “play it safe” is to actually buy a home. Here’s why: studies show that owning a home is the best way to build household wealth. The sooner a person owns a home, the faster they begin to build up equity and wealth.
When you buy a CraftMaster home, you are also purchasing price stability, knowing that you will pay the same monthly payment for the life of your 30-year, fixed-rate mortgage.
For a limited time, CraftMaster Homes is paying $5,000 in closing costs for you! And, if you are an active duty personnel or a Vet, you still may be eligible for an $ 8,000 Tax Credit.
Did you know that by buying today using the VA 30 yr fixed rate mortgage that in 5 years you will have accumulated over $ 34,000 in equity and tax benefits? (Please ask to see rent vs. own comparison chart)
Now consider the current rental market. While home prices at lows not seen in years, rents continue to rise. Where is the economic security in not knowing how much your rent will increase in the next 5 years? You don’t receive any tax benefits from paying rent, nor do you accumulate any price appreciation, as you would if you owned a home of your own.
All of the economic fundamentals show that this is a good time to buy a home. And continuing strength in rental demand signals that there is upward pressure on rental apartments. The real risk isn’t in buying a home, it’s continuing to rent.
Written by Jamie Lee Chafin - Neighborhood Lender of the Year for Village Bank Mortgage Corp.
When you buy a CraftMaster home, you are also purchasing price stability, knowing that you will pay the same monthly payment for the life of your 30-year, fixed-rate mortgage.
For a limited time, CraftMaster Homes is paying $5,000 in closing costs for you! And, if you are an active duty personnel or a Vet, you still may be eligible for an $ 8,000 Tax Credit.
Did you know that by buying today using the VA 30 yr fixed rate mortgage that in 5 years you will have accumulated over $ 34,000 in equity and tax benefits? (Please ask to see rent vs. own comparison chart)
Now consider the current rental market. While home prices at lows not seen in years, rents continue to rise. Where is the economic security in not knowing how much your rent will increase in the next 5 years? You don’t receive any tax benefits from paying rent, nor do you accumulate any price appreciation, as you would if you owned a home of your own.
All of the economic fundamentals show that this is a good time to buy a home. And continuing strength in rental demand signals that there is upward pressure on rental apartments. The real risk isn’t in buying a home, it’s continuing to rent.
Written by Jamie Lee Chafin - Neighborhood Lender of the Year for Village Bank Mortgage Corp.
Thursday, June 3, 2010
Featured Community: Kennington
Kennington is King William's first planned community about 1 mile past route 30 on the left hand side of route 360 East. This neighborhood features large wooded lots with public water and sewer, neighborhood clubhouse and fitness center, pools, kids playground. All of the amenities you want and just 15 minutes to Mechanicsville!
Four a tour of our homes, visit the clubhouse daily from 1 – 5 pm or by appointment anytime!
Site Agents: Edith Samuel - 804.370.5800 and Blakely Smith 804.387.4300
Prices from the $240’s
Monday, May 10, 2010
CraftMaster Now Building at CedarLea in Hanover County!
CraftMaster is thrilled to announce t
hat we have recently purchased lots in the community of CedarLea Park in Hanover County. We are going to be offering single family homes including Ranchers, Two Stories and 1st Floor Masters! Homes will be priced from the $280's.
CedarLea is a planned community with sidewalks and streetlights, a playground, covered pavilion, pond, common areas and parks. This neighborhood offers a peaceful and relaxing lifestyle with easy access to shopping a
nd dining. (Shops are minutes away yet you still feel like you are in the country!)
This neighborhood is in the Hanover County School District, featuring the exemplary Elmont Elementary, Liberty Middle, and Patrick Henry High .
To visit, take Rt. 1 North just past Virginia Center Commons. Turn left onto C edar Lane. Go 2 miles, and CedarLea is on the right.
Contact Agent Michelle Burke at (804) 338-1198 for more information.
hat we have recently purchased lots in the community of CedarLea Park in Hanover County. We are going to be offering single family homes including Ranchers, Two Stories and 1st Floor Masters! Homes will be priced from the $280's.CedarLea is a planned community with sidewalks and streetlights, a playground, covered pavilion, pond, common areas and parks. This neighborhood offers a peaceful and relaxing lifestyle with easy access to shopping a
nd dining. (Shops are minutes away yet you still feel like you are in the country!) This neighborhood is in the Hanover County School District, featuring the exemplary Elmont Elementary
To visit, take Rt. 1 North just past Virginia Center Commons. Turn left onto C
Contact Agent Michelle Burke at (804) 338-1198 for more information.
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