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Bonnie Fagoh
December 1999
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There Are Big Profits InReal Estate, Says Fed W hen Alan Greenspan speaks, Wall Street and Main Street both listen, so catch this: "Over the past five years, the average capital gain on the sale of an existing home net of transaction costs was more than $25,000, almost a fifth of the average purchase price." Greenspan chairs the Federal Reserve, an independent federal agency that both oversees most banks and strongly influences interest rates. A Greenspan comment can easily cause the Dow Jones average to rise or fall several hundred points, depending on what the good chairman says. "While home prices do on occasion decline," said Greenspan in a speech to
Mortgage RatesNational averages as of November 30, 1999:
30 yr. fixed: 7.63%15 yr. fixed: 7.26%1 yr. adj: 6.30%
Get today's rates
a community banking group, "large declines are rare; the general experience of homeowners is a modest, but persistent, rise in home values that is perceived to be largely permanent. This experience contrasts markedly from volatile and often-ephemeral gains in
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Wondering What Your Home Is Worth?Let me show you.
How to Read HousingMarket Stats H omeowners have a seemingly insatiable appetite for information about the housing markets. "Are prices going up? How's the market? Is now a good time to sell?" they ask. Research reports and newspaper articles provide useful answers, but the information is usually buried in economic jargon. What is a "median price" anyway? What does "seasonally adjusted" mean? Does anyone understand "unsold inventory index?" To help you follow the numbers, here are some helpful definitions:
Median Price. An oft-cited indicator of the strength and direction of a housing market, a median price is the midpoint of all the prices of homes sold in a given area during a specified period. Midpoint means half the homes sold for higher prices and half the homes sold for lower prices. The median isn't the same as the average, which would be calculated by totaling all the prices and dividing by the number of prices. The median price can be affected over time by the characteristics and sizes of homes sold as well as price trends. For example, if the market shifts from starter homes to luxury mansions, the median price will increase even if homes are not appreciating in value.
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Home-Buying for Young People: Why To Plan Ahead G ranted, few young people spend much time day-dreaming about buying their first home. They're naturally preoccupied with academics, athletics, parties, dating and future career possibilities. Nonetheless, there are a number of good reasons to start learning early in life about the costs of buying a home and the responsibilities of homeownership. For example, a college student's misuse or abuse of credit cards can preclude his or her buying a home later on. Here are five recommendations for young people who want to position themselves for homeownership:
1. Establish good credit habits and a favorable credit history. Get a credit card and use it responsible. Apply for an automobile loan and make your payments on time every month. If you're renting an apartment, put your own name on the lease and the utility bills and make sure the rent and the bills are paid every month. If you're already struggling with credit card debt or have large student loans, take a free workshop from the non-profit Consumer Credit Counseling Service.
2. Start saving for a down payment and closing costs. It's possible to purchase a first home in many parts of the country without much in the way of savings. But in high-cost housing areas, starting to save early can be enormously beneficial because you'll get the advantage of
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Will My Loan Have APrepayment Penalty? Prepayment penalties are those charges which a lender imposes if you wish to pay off your loan early. Typically home mortgages are written for 15 or 30 year periods of time. While you may not hold the mortgage for the full term, it is likely that you will probably stay in the property longer than just one or two years. For this reason, you should carefully read your note and mortgage documents, in particular the prepayment penalty clause to understand conditions which would apply to your loan. The loans which will carry a prepayment penalty often penalize you only for paying off the loan early in the first five years, and thereafter a graduating scale may apply, or there may be no prepayment penalty at all after that initial five year period. To find out if your loan will have a prepayment penalty you should first look at the type of loan you will be acquiring. Traditional loans with fixed rates of interest usually do carry a prepayment penalty while loans with an adjustable interest rate generally do not carry the prepayment clause. There are some types of home loans which are prohibited by law from charging prepayment penalties. These loans include FHA and VA loans and federally chartered credit union loans. Prepayment penalties are illegal in some states, so you may want to check with your lender or attorney for the laws which apply for your state.
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Daily News and Advice -->Read about the events shaping the Real Estate market today, find current interest rates, or browse the extensive library of advice and how-to articles written by some of the top experts in Real Estate. Updated each weekday.
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Bonnie Fagoh E-mail: bonniefagoh@century21beggins.comWeb: http://bonniefagoh.mfr.mlxchange.com813-390-7606
Century 21 Beggins Enterprises813-390-76066542 U. S. Hwy. 41 N.Apollo Beach, FL 33572
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