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loansComparing mortgage loans is one of the most important things you can do when you’re buying a home. The decisions you make will determine the size of your monthly payments, how much you pay upfront, and how much interest you’ll pay over the life of the loan.

You might find it simpler to compare loans if you ask each lender a series of questions, including:

  • What is the loan’s interest rate?
  • Will I be charged points?
  • What are the closing costs and all other fees?
  • What is the annual percentage rate, or APR – the rate you’ll pay per year for all the costs associated with the loan?
  • Is there a pre-payment penalty?
  • How is the loan amortized, meaning how quickly is the principal paid off?

Find out the answers to these questions no matter what type of loan you’re considering. Each can affect the overall cost of your loan.

If you are considering an adjustable-rate mortgage, or ARM, you can compare loans by asking:

  • When does the rate adjust?
  • How often does the rate adjust?
  • Is there a cap limiting the amount by which the rate can adjust? What would my monthly payments be if my interest rate hit that cap?
  • What is the index and margin that will determine my rate? How has the index changed over time?

ARMs are inherently more risky than fixed-rate mortgages because you’re gambling on whether interest rates will go up or go down before your rate adjusts. Understanding the best- and worst-case scenarios can help you weigh the pros and cons as you compare loans.

But there’s one other big question to consider before you get an ARM:

  • How does the discount introductory rate compare with rates for 30-year fixed-rate loans?

If there’s not much difference when you compare the two, the fixed-rate loan might be a safer bet. You won’t save much in the short-term, and could save a lot over the long term. Plus, you reduce your risk if interest rates shoot up and you can’t refinance before the rate adjustment.

Finally, to truly compare loans, you have to ask yourself some questions:

  • How long do I expect to stay in my home?
  • Are my job and income secure over the long term?
  • Will I be able to afford higher payments in the future?
  • How comfortable am I with risk?

In the end, the best loan is the one that works for your needs.

Written by Lending Tree on Monday, 07 October 2013 13:30
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short-sale-see-sawWhat does “SHORT SALE”  mean?

Short Sale  means the lender has to accept LESS than what is owed on the mortgage – or the house can’t be sold.

Homes purchased at the TOP of the MARKET (often with a minimal downpayment and/or with a hefty mortgage) can be tough to sell in this market … simply because the expected SALES PRICE is below what the owner needs to repay on the loan.

Given the current real estate environment  (and significant drop in real estate values)   mortgages can be higher than a home’s market value, what it’s worth or what it will likely sell for.  That can make a house virtually unsellable unless the current owner can cough up the difference and  pay-off his or her mortgage  …OR  convince the bank to accept a reduced pay-off.

What constitutes a SHORT SALE:

1) IT’S  NOT A SHORT SALE if the owner can come to  the closing table with sufficient funds to pay off the loan.

2) IT IS A SHORT SALE IF THE BANK  AGREES TO (even if just in theory!) A SHORT PAY-OFF (ie. less than the amount due on the loan).

The difference between Approved & Unapproved Short Sales:

1) With an APPROVED SHORT SALE  the lender has already agreed to the SALES PRICE.

2) With an UN-APPROVED SHORT SALE  the  lender is aware of the predicament the seller is in (having to sell in a market where the value of the property is less than what’s owed on the loan).  An unapproved short sale  means that the lender  has theoretically agreed to the idea of entertaining an offer on the property (for less than the amount owed on the mortgage).  But the lender’s commitment is rather nebulous.  An official commitment  from the bank won’t come until well after the contract offer-to-purchase has been accepted by the seller,  then presented to and reviewed by the lender (AND IT’S THE LENDER WHO HAS THE FINAL WORD!).  The lender is free to entertain the offer in any fashion they please: counter, accept, or reject it outright … Typically an un-approved short sale is a long and drawn-out process (3-8 months).

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Houston Real Estate Milestones in July
  • Single-family home sales increased 23.3 percent year-over-year, accounting for the market’s 26th consecutive monthly increase and the largest one-month sales volume of all time;
  • Total property sales rose 26.3 percent compared to one year earlier, accounting for the second greatest one-month sales volume ever (the largest was in June 2006);
  • Total dollar volume skyrocketed 43.0 percent, increasing from $1.6 billion to $2.3 billion on a year-over-year basis;
  • At $187,760, the single-family home median price reached the highest level for a July in Houston;
  • At $260,968, the single-family home average price also reached a July high;
  • 3.4 months inventory of single-family homes is up from 3.3 months in June 2013, but down from 5.3 months in July 2012 and compares to the national average of 5.2 months;
  • Sales of townhouses/condominiums shot up 29.3 percent year-over-year.
  • Rentals of single-family homes and townhouse/condominium units rose 5.0 and 7.7 percent, respectively.

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For_sale_by_owner_signs_1_4533110Selling your home independently and taking the “For Sale By Owner” route is a well-intentioned concept. The most common reason people do it is to save money on commission — the sales fee that is split between real estate agents and brokers.

That’s certainly something we can all understand. After all, who doesn’t want to save money? But the reality of realty is that a For Sale By Owner (FSBO) seller often ends up losing money — and going through a great deal of hassle and stress along the way.

A home is the biggest financial investment that most people experience in their lifetime. Selling a home is a multifaceted process — a lot more than putting a “For Sale” sign in your yard and listing it online. Even if you or your trusted advisers have personal experience in real estate, you’ll probably be selling yourself short in the sale of your home without the use of a licensed, experienced agent. Let’s examine some of the ways how.

Exposure. It’s a seller’s market. Houston is a thriving city, and it’s not uncommon for realtors to get multiple offers on a properly priced home shortly after it goes on the market. But that demand is created through exposure — exposure that leads to more potential buyers becoming aware of the availability of your home for sale. FSBO severely limits that exposure. A realtor has the ability to market your home on avenues such as MLS (multiple listing services) and third party affiliations like Christie’s that only licensed real estate agents are permitted to use.

Pricing. A real estate agent knows how to price the market using reliable, real-time data. Some FSBO homes are underpriced because the seller doesn’t realize the true market value. Most FSBO homes are overpriced — sellers might get greedy or unrealistic because they love their home for sentimental reasons or they have read too much in the press. A real estate agent takes emotion out of the equation and strives to get you the best price for your home based on current data and market conditions.

Negotiations. First, there’s the complicated issue of agreeing on a sale price or of handling multiple offers. And would you believe that’s actually the easy part? Navigating and troubleshooting the many steps that result in a successful closing is where a realtor’s expertise is vital. The most difficult part of a real estate transaction is from the contract to the close — a place where deals can become very contentious, sometimes litigious, and easily fall apart. Once you agree on price, the next negotiation is repairs. A qualified real estate agent has a wealth of experience of inspections and negotiations under his or her belt. The average seller may have only been through this process once or twice.

Time. Think about the hours a real estate agent spends showing a property, doing research for pricing, marketing, negotiating and communicating with buyers and buyers’ agents. Time is money, isn’t it?

Expertise. There’s a saying in the court of law: “The person who represents himself has a fool for a client.” To put it another way, if you had a cavity, would you try to fill your own tooth? Of course not.

An experienced professional realtor will guide the seller through the home selling process and avoid the countless pitfalls and liabilities that can catch a homeowner by surprise. These problems could include legal, logistical and even ethical issues that homeowners can fall victim to. Real estate agents have been educated, trained and certified to handle all of these issues.

If these factors don’t daunt you, then perhaps For Sale By Owner is the route for you. If they do, then I’d say you just might want to consider hiring a licensed real estate agent.

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spaceportIn an effort to keep the Houston spaceport ball rolling, the Houston Airport System publicly revealed the first renderings of its proposed spaceport at Ellington Airport.

HAS displayed the renderings, as well as a promotional video, to a full auditorium at the Johnson Space Center the evening of Sept. 4.

“This is not a science fiction-type conversation where we have to imagine how this industry might operate if it did in fact exist,” Mario Diaz, HAS’ aviation director, told the crowd. “This industry exists today, these launches have already taken place.”

HAS started aggressively moving forward with its spaceport plans in July, when it secured approval from Houston City Council for a $718,000 contract for a consulting firm to study how Ellington Airport can obtain a spaceport launch site operator’s license. However, HAS has been looking into developing a spaceport in Houston since early 2011. The ideal Ellington spaceport would allow for space tourism, astronaut training and commercial space experiments, HAS said.

In addition to unveiling the spaceport renderings on Sept. 4, HAS hosted a panel of members of the Commercial Spaceflight Federation. The panel, which was composed of former astronauts who are now working at companies that are in the process of creating commercial spaceflight vehicles, such as SpaceX and Boeing Co. (NYSE: BA), spoke about their progress. Most of the panelists noted how their work is directly tied with Houston — all of them were trained as astronauts in Houston and many work with the Johnson Space Center on developing their technologies used in spaceflight.

It is this connection with Houston that has HAS optimistic about the potential for the Ellington spaceport.

Diaz emphasized that if Houston wants to remain as “Space City” in the 21st century, it needs to get on the commercial spaceflight bandwagon, and he believes the city can eventually lead the way in commercial spaceflight.

“In short, if you were to sit down and attempt to create the perfect location for a commercial spaceport, you would wind up drawing something very close to Ellington and its surrounding area,” Diaz said. “That’s why we are so excited about the future of the Houston Airport System because the possibilities and the available resources are coming together in such a way that not even the sky is the limit anymore.”

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HoustonIn the latest grand accolade for the Petro Metro, Forbes predicts that within a decade Houston will be known as America’s next great global city.

Forbes made the prediction in its article “A Map of America’s Future: Where Growth Will Be Over the Next Decade,” part of its “Reinventing America” series.

The article breaks the country into seven major regions, including the Third Coast — of which Houston is named the capital.

“Once a sleepy, semitropical backwater, the Third Coast, which stretches along the Gulf of Mexico from south Texas to western Florida, has come out of the recession stronger than virtually any other region,” Forbes writes. “Since 2001, its job base has expanded 7 percent, and it is projected to grow another 18 percent in the coming decade.”

Forbes notes two of Houston’s major economic powerhouses — energy and trade — as two of the driving forces behind the area’s success.

In addition to Houston’s energy prominence, Forbes also notes the racially and ethnically diverse metro has the world’s largest medical center and recently surpassed New York City as the No. 1 exporter nationwide. The diversification of the region’s economy will continue to increase as the area’s wealth grows, according to Forbes.

Last year, Forbes named Houston the coolest city in which to live, and the Bayou City has racked up numerous superlatives since then.

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Mansion

The Return of the McMansion

There are a number of data sources pointing towards the return of the McMansion:

  • Average home size now, remarkably, exceeds the lofty sizes of the housing boom years.
  • According to the most recent data from the Census Bureau, the average size of a newly built home in the U.S. was 2,642 square feet in the second quarter, far above the previous record of 2,561 square feet in 2009′s first quarter.
  • From 2013′s first quarter to second quarter, the average home size leapt 5.2 percent, the largest quarter-by-quarter gain since the Commerce Department began tracking the quarterly numbers in 1987.
  • Similarly, the most recent Survey of Construction found that the average number of bathrooms in new single-family homes was 2.56 in 2012, another new high (it had fallen to as low as 2.20 in 2009).

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