Many borrowers, plain and simple, don't understand how mortgages work. here's what they should know before they go shop for a loan
ERIK J. MARTIN You wouldn't buy a new car without knowing how to drive it first, but would you borrow money to buy a house without understanding how a mortgage loan works? Many people do, say the experts.
According to the results of a recent Zillow Mortgage Marketplace survey, 44 percent of prospective homebuyer respondents admitted they are not confident in their knowledge of mortgages or the mortgage process, overall. The 1,005 adult surveyed incorrectly answered basic questions about mortgage information nearly half of the time. The poll also revealed that 37 percent of respondents believe pre-qualifying for a loan means they have secured financing, and 57 percent don't know how adjustable rate mortgages work.
Why are borrowers so ill-prepared to enter into the mortgage process, and who is to blame? A number of factors have contributed to the problem in recent years, including new, more complex lending laws that have increased the paperwork involved; laziness on the part of an uneducated consumer; and unethical lenders who have put profit ahead of the responsibility to properly edify customers.
"One of the most common mistakes made is calling a bank and saying, 'This is my first home, and I don't know much about mortgages,'" says Carolyn Warren, author of "Mortgage Rip-Offs and Money Savers" (Wiley, 2007). "It's as if they're holding a sign on their foreheads that says, 'Please charge me more - I won't know the difference.'"
Tighter restrictions on lending haven't made things any easier. Recent changes to the Real Estate Settlement Procedures Act require that loan originators provide borrowers with a standardized Good Faith Estimate in an effort to improve disclosure of terms settlement costs and interest rate related terms. However, loan officers cannot give the GFE up front without first reviewing the borrower's income, assets and credit. Hence, once a borrower has submitted all the necessary financials and had a credit report pulled, they often feel obligated to go with that lender.
Consequently, Warren believes there is actually less loan shopping going on now than before the new RESPA law was passed, which she says implicates politicians as major culprits in today's mortgage miseducation problem.
In analyzing the Zillow survey data she and her team gathered, Erin Lantz, director of Zillow Mortgage Marketplace in Seattle, says it's apparent that the collective real estate industry has a lot of work to do.
"Our industry is not known for transparency. We're making great strides to improve, but ultimately it is the consumer's responsibility to get themselves better informed," Lantz says. "Borrowers need to take the time to do research, prepare early in the game, and think more broadly in the context of getting ready to purchase a home."
Steven T. Alexander, president of Private Mortgage Services with Private Bank of Buckhead in Atlanta, says it's vital to do your homework before you jump into the market. Seek the help of a seasoned mortgage loan officer who can help properly structure your transaction to reach your ultimate objectives, read informative books and articles and talk to others who have recently completed the process.
"It is up to the borrower to due their due diligence so they can obtain fair and decent financing," says Warren. "Recently, a buyer asked me to look at the GFE provided by his builder's preferred lender. This lender was charging a $9,558 origination fee for a 30-year fixed rate on a loan of $268,000, while other lenders are charging less than $1,500 for the same rate. Even now, in a post-subprime world, there are gross over-charges going on."
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Showing posts with label m naseem baig. Show all posts
Showing posts with label m naseem baig. Show all posts
Sunday, July 24, 2011
Home-price drops said to reflect overcorrection
We're in another housing bubble in Las Vegas, but this time it's the flip side of the overvalued market that emerged from 2000 to 2006, a real estate economist said Wednesday.
Just as Las Vegas home prices were unsustainable when they hit a median of $285,000 in 2006, they're tremendously undervalued now at $106,000 and that, too, is unsustainable, said Mark Boud, principal of Irvine, Calif.-based Real Estate Economics.
"It collapsed so hard that it overcorrected," Boud told about 60 real estate professionals at the Las Vegas Midyear Builder Symposium at Alexis Park. "You pay 11 cents on the dollar in mortgage costs, which is incredible and, in fact, unsustainable. We'll never be able to see this affordability again."
By 2015, inventory will tighten, vacancy will drop below 2 percent and there will be a strong push in pricing into 2016, Boud predicted.
Median existing-home prices fell to less then $70 a square-foot in June, down 12 percent from a year ago and nearly $30 a foot less than the cost of a new home, Las Vegas-based SalesTraq reports.
Cheap housing prices combined with the lowest interest rates in 40 years give consumers the leverage they need to buy their dream home, said Anthony Grasst, regional sales manager for MetLife Home Loans in Kirkland, Wash.
Homebuilders need to do a better job telling buyers that it's a fantastic time to buy instead of rent, he said.
"People buy emotionally and justify logically," Grasst said. "How much of the buying decision is financing? About one-third. You have more to fear in rising interest rates than depreciation."
A one-point increase in mortgage interest rate erases 11 percent of household purchasing power, Grasst said.
For example, someone who buys a $250,000 home at 5.25 percent interest rate has a monthly principal and interest payment of $1,242. If the price is discounted 3 percent to $242,500, the payment drops to $1,205, a savings of $37 a month.
If that $7,500 discount is used to "buy down" the interest rate to 4.25 percent, the monthly payment is $1,107, a difference of $135 a month, Grasst calculated.
"Your monthly payment is 11 percent below market and you save $49,000 over the life of the loan," he said. "Explain that rents are susceptible to increasing. Buy now and you're guaranteed low payments for 30 years."
Geoff Gorman, vice president of sales for Harmony Homes in Las Vegas, said the 3-year-old company has grabbed the fifth-highest market share of new-home sales in Las Vegas, but the numbers aren't where he wanted to see them this year.
While new-home sales rose to their highest level of the year at 357 in June, they're only on pace for about 3,500 for the full year, compared with 5,438 in 2010, SalesTraq's monthly report showed.
It was inevitable that sales would be lower in 2011 with "no outside impetus and no manufactured urgency," Gorman said. Demand dried up after the federal tax credit expired in June 2010, though it was later extended to September.
"It's harder than ever to sell a home today," Gorman said. "It's not 2004, with lines out the door like the Matterhorn at Disneyland."
The No. 1 challenge for the homebuilding industry in Las Vegas today is appraisals, he said.
Just this week, Gorman said he had a willing buyer and the necessary comparable sales, but the appraisal came in $10,000 short, killing the deal. The home was appraised at $194,000, about $1,000 more than an appraisal for the same floor plan a month ago. However, this home had $10,000 worth of upgrade options, including stainless-steel General Electric appliances, a larger lot by 700 square feet and several thousand dollars in flooring upgrades.
"I don't think enough of us have said the appraisal situation in town is ridiculous," Gorman said. "I know appraisers have rules to follow, but what's missing is common sense. We all hear that a new car is worth more than a repossessed car. I understand diminishing returns, but seriously, $1,000 appraisal for $10,000 in upgrades? It's not right. I don't know what can be done."
Other challenges for homebuilders include buyers' poor credit ratings and debt-to-income ratios, along with competition from foreclosures and short sales, Gorman said. Those who could qualify to buy a home last year under the federal tax credit did, and those who didn't probably have issues relative to income and creditworthiness, he said.
Las Vegas has an excess supply of distressed properties with a "shadow inventory" pushing 30,000 homes still being held by lenders that has to be absorbed moving forward, economist Boud said.
"Supply will flatten, but probably won't go negative. Demand will go negative," he said. "Unfortunately, the housing market is going to lag economic growth by eight to 12 months."
Consultant Bob Mirman of Eliant Inc. said the nation's best production builders are selling 45 percent of their homes from referrals.
He warned about "consumer terrorism," or people who use the Internet as a weapon to spread the word about how unhappy they were with customer service from a particular homebuilder.
"It's not about the home you build, but the experience you deliver," Mirman said. "Your strongest sales force is an army of delighted homeowners who then tell their friends. Nobody can sell your home better. They're the most trustworthy sources."
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
for more information on las vegas bank own homes visit www.buybankownhomes.com
Just as Las Vegas home prices were unsustainable when they hit a median of $285,000 in 2006, they're tremendously undervalued now at $106,000 and that, too, is unsustainable, said Mark Boud, principal of Irvine, Calif.-based Real Estate Economics.
"It collapsed so hard that it overcorrected," Boud told about 60 real estate professionals at the Las Vegas Midyear Builder Symposium at Alexis Park. "You pay 11 cents on the dollar in mortgage costs, which is incredible and, in fact, unsustainable. We'll never be able to see this affordability again."
By 2015, inventory will tighten, vacancy will drop below 2 percent and there will be a strong push in pricing into 2016, Boud predicted.
Median existing-home prices fell to less then $70 a square-foot in June, down 12 percent from a year ago and nearly $30 a foot less than the cost of a new home, Las Vegas-based SalesTraq reports.
Cheap housing prices combined with the lowest interest rates in 40 years give consumers the leverage they need to buy their dream home, said Anthony Grasst, regional sales manager for MetLife Home Loans in Kirkland, Wash.
Homebuilders need to do a better job telling buyers that it's a fantastic time to buy instead of rent, he said.
"People buy emotionally and justify logically," Grasst said. "How much of the buying decision is financing? About one-third. You have more to fear in rising interest rates than depreciation."
A one-point increase in mortgage interest rate erases 11 percent of household purchasing power, Grasst said.
For example, someone who buys a $250,000 home at 5.25 percent interest rate has a monthly principal and interest payment of $1,242. If the price is discounted 3 percent to $242,500, the payment drops to $1,205, a savings of $37 a month.
If that $7,500 discount is used to "buy down" the interest rate to 4.25 percent, the monthly payment is $1,107, a difference of $135 a month, Grasst calculated.
"Your monthly payment is 11 percent below market and you save $49,000 over the life of the loan," he said. "Explain that rents are susceptible to increasing. Buy now and you're guaranteed low payments for 30 years."
Geoff Gorman, vice president of sales for Harmony Homes in Las Vegas, said the 3-year-old company has grabbed the fifth-highest market share of new-home sales in Las Vegas, but the numbers aren't where he wanted to see them this year.
While new-home sales rose to their highest level of the year at 357 in June, they're only on pace for about 3,500 for the full year, compared with 5,438 in 2010, SalesTraq's monthly report showed.
It was inevitable that sales would be lower in 2011 with "no outside impetus and no manufactured urgency," Gorman said. Demand dried up after the federal tax credit expired in June 2010, though it was later extended to September.
"It's harder than ever to sell a home today," Gorman said. "It's not 2004, with lines out the door like the Matterhorn at Disneyland."
The No. 1 challenge for the homebuilding industry in Las Vegas today is appraisals, he said.
Just this week, Gorman said he had a willing buyer and the necessary comparable sales, but the appraisal came in $10,000 short, killing the deal. The home was appraised at $194,000, about $1,000 more than an appraisal for the same floor plan a month ago. However, this home had $10,000 worth of upgrade options, including stainless-steel General Electric appliances, a larger lot by 700 square feet and several thousand dollars in flooring upgrades.
"I don't think enough of us have said the appraisal situation in town is ridiculous," Gorman said. "I know appraisers have rules to follow, but what's missing is common sense. We all hear that a new car is worth more than a repossessed car. I understand diminishing returns, but seriously, $1,000 appraisal for $10,000 in upgrades? It's not right. I don't know what can be done."
Other challenges for homebuilders include buyers' poor credit ratings and debt-to-income ratios, along with competition from foreclosures and short sales, Gorman said. Those who could qualify to buy a home last year under the federal tax credit did, and those who didn't probably have issues relative to income and creditworthiness, he said.
Las Vegas has an excess supply of distressed properties with a "shadow inventory" pushing 30,000 homes still being held by lenders that has to be absorbed moving forward, economist Boud said.
"Supply will flatten, but probably won't go negative. Demand will go negative," he said. "Unfortunately, the housing market is going to lag economic growth by eight to 12 months."
Consultant Bob Mirman of Eliant Inc. said the nation's best production builders are selling 45 percent of their homes from referrals.
He warned about "consumer terrorism," or people who use the Internet as a weapon to spread the word about how unhappy they were with customer service from a particular homebuilder.
"It's not about the home you build, but the experience you deliver," Mirman said. "Your strongest sales force is an army of delighted homeowners who then tell their friends. Nobody can sell your home better. They're the most trustworthy sources."
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
for more information on las vegas bank own homes visit www.buybankownhomes.com
Sunday, February 6, 2011
Pardee Homes highlights Solamar in northwest
Pardee Homes' Solamar neighborhood in northwestern Las Vegas features several homes that are ready for move in, according to Pardee Homes' Regional Sales Director Rob Tuvell.
He said the market continues to favor new-home buyers in Southern Nevada, including at the builder's eight valley neighborhoods.
"In our buyer's market, there are many terrific opportunities to own a brand-new, energy-efficient home with many upgraded amenities and that includes a select number of move-in ready homes at our Solamar neighborhood," Tuvell said.
Situated on a pool-size corner home site that measures 6,430 square feet, a Solamar Plan 4A at home site No. 143 measures 3,084 square feet with four bedrooms, three baths, three-car garage, playroom and loft.
Priced at $293,500, the home includes granite countertops, stainless-steel appliances including a side-by-side refrigerator and upgraded flooring.
A Solamar Plan 2C at home site 264 measures about 3,000 square feet with three bedrooms, 2½ baths, three-car garage, den and playroom.
Priced at $290,750, the home includes a stainless-steel appliances including side-by-side refrigerator, granite countertops, upgraded flooring and rear yard landscaping.
A Solamar Plan 5B at home site No. 117 measures 3,959 square feet with six bedrooms, four baths, three-car garage, library and loft.
Priced at $336,100 the home includes stainless steel appliances, granite countertops and buyer's selection of flooring.
For additional information on these homes or others, visit the sales office; call 702-645-3666 or visit www.pardeehomes.com/solamar.
All of Pardee's newly designed homes, including those at Solamar, are part of the builder's LivingSmart brand, a program with standard and optional measures that boost energy efficiency, save water, improve indoor air quality and encourage material conservation and the use of recycled or sustainable resources in new homes.
Home prices start from $270,450 at Solamar and the one- and two-story floor plans range from 2,491 to 3,959 square feet with up to six bedrooms.
Solamar's northwestern Las Vegas location is near new retail, services, schools and major transportation links including the recently opened Centennial Hills Transit Center. Also nearby are Silver Stone Golf Club, Mountain Ridge Park, Las Vegas' Extreme Sports Park and Centennial Hills Hospital.
To visit Solamar from U.S. Highway 95 North, exit to the 215 Beltway west. Exit on Durango Drive and turn right. Turn left on Deer Springs Road, right on Grand Canyon Way, then right on Bay Ledge Street to the models.
Visitors are welcome from 10 a.m. to 5 p.m. Tuesday through Sunday, and from 11 a.m. to 5 p.m. Monday.
For the second consecutive year the Southern Nevada Division of Pardee Homes has received the highest rankings from J.D. Power and Associates for overall customer satisfaction and new home quality in the Las Vegas Market.
One of the West's largest and longest-established home builders, Pardee has built homes for more than 40,000 families in Southern Nevada since 1952.
He said the market continues to favor new-home buyers in Southern Nevada, including at the builder's eight valley neighborhoods.
"In our buyer's market, there are many terrific opportunities to own a brand-new, energy-efficient home with many upgraded amenities and that includes a select number of move-in ready homes at our Solamar neighborhood," Tuvell said.
Situated on a pool-size corner home site that measures 6,430 square feet, a Solamar Plan 4A at home site No. 143 measures 3,084 square feet with four bedrooms, three baths, three-car garage, playroom and loft.
Priced at $293,500, the home includes granite countertops, stainless-steel appliances including a side-by-side refrigerator and upgraded flooring.
A Solamar Plan 2C at home site 264 measures about 3,000 square feet with three bedrooms, 2½ baths, three-car garage, den and playroom.
Priced at $290,750, the home includes a stainless-steel appliances including side-by-side refrigerator, granite countertops, upgraded flooring and rear yard landscaping.
A Solamar Plan 5B at home site No. 117 measures 3,959 square feet with six bedrooms, four baths, three-car garage, library and loft.
Priced at $336,100 the home includes stainless steel appliances, granite countertops and buyer's selection of flooring.
For additional information on these homes or others, visit the sales office; call 702-645-3666 or visit www.pardeehomes.com/solamar.
All of Pardee's newly designed homes, including those at Solamar, are part of the builder's LivingSmart brand, a program with standard and optional measures that boost energy efficiency, save water, improve indoor air quality and encourage material conservation and the use of recycled or sustainable resources in new homes.
Home prices start from $270,450 at Solamar and the one- and two-story floor plans range from 2,491 to 3,959 square feet with up to six bedrooms.
Solamar's northwestern Las Vegas location is near new retail, services, schools and major transportation links including the recently opened Centennial Hills Transit Center. Also nearby are Silver Stone Golf Club, Mountain Ridge Park, Las Vegas' Extreme Sports Park and Centennial Hills Hospital.
To visit Solamar from U.S. Highway 95 North, exit to the 215 Beltway west. Exit on Durango Drive and turn right. Turn left on Deer Springs Road, right on Grand Canyon Way, then right on Bay Ledge Street to the models.
Visitors are welcome from 10 a.m. to 5 p.m. Tuesday through Sunday, and from 11 a.m. to 5 p.m. Monday.
For the second consecutive year the Southern Nevada Division of Pardee Homes has received the highest rankings from J.D. Power and Associates for overall customer satisfaction and new home quality in the Las Vegas Market.
One of the West's largest and longest-established home builders, Pardee has built homes for more than 40,000 families in Southern Nevada since 1952.
Government seriously implementing reforms agenda: PM
LAHORE: Prime Minister Yousuf Raza Gilani has said his government is seriously implementing a 10-point reforms agenda given by the PML-N last month.
Talking to reporters at his residence here on Sunday, he said performance would be among the major considerations in appointing new ministers after the dissolution of the federal cabinet.
In an effort to allay fears of employees of loss-making national corporations, he said the institutions would be restructured and not privatised.
The prime minister admitted that there was pressure from the US on the issue of Raymond Davis, an American citizen accused of killing two men in Lahore.
“We agreed to the 10-point agenda only after weighing all its aspects,” he said. He mentioned some measures taken to implement the agenda for which the PML-N has set a deadline of Feb 20.
“As some of the points require just administrative decisions, we can do it. Where there is need for legislation, we can at least move a bill in parliament, while reconstitution of the Election Commission is in the offing and talks on tabling a unanimous accountability bill are also making progress.”
Referring to the call for sacking corrupt ministers and reducing the cabinet’s size to 11 per cent of the parliamentary strength as enshrined in the law, he said removing anyone from the cabinet would not mean that the person in question had not been up to the mark.
The prime minister hinted at curtailing the perks and privileges of the ministers “to give a symbolic message to the masses that their government means business, although these perks do not cost the national exchequer much”.
Trying to dispel a perception that the MQM and JUI-F would not rejoin the cabinet, he said: “Altaf Hussain has convened a meeting of the coordination committee after talking to me, while Maulana Fazlur Rehman too has been consulted by me and President Asif Zardari at the Kashmir solidarity conference.”
Answering a question, he said a formal invitation would be extended to the PML-N to rejoin the cabinet only when it would appear that the response would be positive.
Prime Minister Gilani disowned a deadline set by his party for the Punjab government to implement a 19-point agenda for improving governance in the province. PPP’s representatives in the Punjab cabinet have said they will stage a sit-in outside the Punjab Assembly after the expiry of the ultimatum on Tuesday.
“Setting deadlines is not my policy. After all, we’re friends and not masters and petty differences between the coalition partners should be taken casually.”
The prime minister said the PPP and PML-N had agreed on restructuring the loss-making corporations instead of privatising them. “Their boards will be replaced and non-controversial persons with untainted careers and of world repute will be appointed to lead the corporations.”
He said progress had been made on improving the performance of the Pakistan Electric Power Company and a summary had been moved for the purpose.
Declining to comment on the sub judice matter of Davis, he admitted there was diplomatic pressure from the United States to release the accused. He said courts would decide the issue of immunity of the accused.
“In matters of national interest one must not play to the gallery, like some people have done by giving irresponsible statements,” he said and added that extreme caution should be exercised on sensitive issues.
Twin blasts in Karachi wound two
KARACHI: Two bomb explosions outside two police stations in different parts of Karachi caused panic among residents on Monday, at least two people were injured in the blasts.
The first blast occurred outside Eidgah police station of Lee Market, while the second blast took place near Shah Latif police station of Malir area.
Officer Irshad Sehar says Monday’s bombings in Karachi were several miles apart. He says they caused minor damage.
Police and law enforcement agencies and rescue teams have cordoned off the areas.
Sehar says the apparently coordinated explosions were meant to create fear and panic in the city of 14 million people.
Karachi is a chaotic city where criminal, political and militant violence is common.
Tuesday, November 2, 2010
Sealed border in Kurram causes inconveniences locals
PESHAWAR: After the attack by Nato forces in Kurram Agency, the Pak-Afghan border has been completely sealed, DawnNews reported on Sunday.
When militants had difficulty in taking control of Upper Kurram, they sealed all routes leading in and out of the area, due to which residents of the area had to travel through to Afghanistan in order to reach any other part of the country. Basic commodities and utilities were also being transported through this way.
Recently, the Pak-Afghan border was sealed when Nato helicopters attacked a checkpost in Pakistan.
Col. Tauseef Akhtar, an FC Commander stated on Sunday that it was essential to seal this border in order to maintain security and peace. – DawnNews
When militants had difficulty in taking control of Upper Kurram, they sealed all routes leading in and out of the area, due to which residents of the area had to travel through to Afghanistan in order to reach any other part of the country. Basic commodities and utilities were also being transported through this way.
Recently, the Pak-Afghan border was sealed when Nato helicopters attacked a checkpost in Pakistan.
Col. Tauseef Akhtar, an FC Commander stated on Sunday that it was essential to seal this border in order to maintain security and peace. – DawnNews
Nato helicopters violate Pakistan’s border limits
PESHAWAR: Nato helicopters violated Pakistani territory limits near the Pak-Afghan border area on Tuesday.
According to official sources, Nato gunship helicopters violated Pakistan’s border limits in the areas of Burkha and Kharlacha.
The gunship helicopters came 600 meters inside Pakistani borders and after flying in the area for 10 minutes, they retreated to Afghanistan. – DawnNews
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