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From Heather Myott, mortgage officer at our Coldwell Banker Mortgage office, new information about FHA mortgage programs.

“In 2010, FHA loans accounted for over 36% of the loans I originated.  It is a very popular program whose most notable feature is the ability to put a low 3.5% down payment.  FHA gained popularity over the last few years as we saw the days of 80/20 mortgages and the like come to an end, and offered a great alternative with low rates and low payments. 

Due to this increased demand FHA is constantly looking for ways to rebuild their capital and be able to continue to offer these fantastic programs.  The newest announcement from them states that they will be increasing their annual mortgage insurance premium from the current levels up by .25%, effective April 18, 2011.

What does this mean to you?  Well, if you are currently pre-approved to buy with an FHA program, you might want to get a bit more serious about your house-hunting.  If you are looking at homes around $250,000, you could potentially increase your monthly payment by about $50 if you haven’t secured your FHA Case Number (comes during financing – your lender will do this for you) by the change date.  That is significant! 

Rates are low, homes are out there, now is the time – call your Karen today to get out looking, and call me to get your pre-approval set so you can make offers with confidence when the time comes.”

Heather Myott’s Blog

Financing

Vermont is one of the best places to watch the autumn leaves change color. The season starts with colors changing in the higher elevations where temperatures are known to be cooler.

This weekend is the beginning of the “Leaf Peeping” season. Vermonters and tourists hit the country roads to take in the beautiful variations of colors. According to the Fall Foliage map found at the Yankee Foliage website, the Northeast Kingdom is already at it’s peak. This means that the colors are at their brightest.

When the leaves begin to change color, most first turn yellow. The yellow pigment becomes visible as temperatures drop because the tree’s leaves are no longer producing chlorophyl which is the chemical that gives them their bright green color. As the days grow colder and the nights grow longer another chemical sets in which starts the leaves to change from yellow to red. During the transition, beautiful hues of orange are visible as the red mixes with the yellow.

But enough with the science! Below is a link from the “Vermont Living” magazine website. Here you can find suggestions of driving tours that will take you to some of the best leaf peeping areas in Vermont.

Have fun, drive safe and don’t forget to bring your camera!

Harvest time is upon us! What better time of the year than to visit one of the many Farmer’s Market’s in Vermont. Did you know that many of the markets in this area are held year round? Sure, we can’t keep them outside like to we do in the spring and summer, but a lot of the towns have found venues to hold the markets indoors during the cold months. Burlington’s Farmer’s Market is held outdoors every Saturday at City Hall Park through October 30th. After that it moves into the Memorial Auditorium and is held every 3rd Sunday of the month. Check out: Burlington Farmer’s Market for more details. If a trip to the Queen City is not in your plans, there are still many wonderful markets around Vermont for you to visit. Go to the VT Agriculture website to find a Farmers Market in your region.

Next weeks blog entry – Apple Orchards and the BEST apple Crisp recipe you will ever find.

It is hard to believe that the end of August is here. Yesterday the news announced that a record for the hottest summer was set in the Northeast! I know I have enjoyed this warm weather and I hope that you have been enjoying it too.
As everyone knows who lives in this area, the seasons do change and the long warm summer days become shorter and the days become cooler. The air turns crisp and the green leaves begin to change into beautiful hues of orange, yellow and red. Vermont is truly the place to be when fall sets in! But what happens to your home and your lawn when these cooler temperatures start to settle and take hold for the winter? Every home owner should prepare their lawn and their home to withstand the winter cold and to spring back when the snow melts away. Fall is the best time to take action. Below is an article I found that can help you take the steps needed this fall to protect your home and lawn from the winter cold.

http://home-curb-appeal.suite101.com/article.cfm/getting_homes_and_gardens_ready_for_winter

Low Mortgage Rates = Greater Buying Power

Traditionally, spring and summer are very hot times to purchase or sell a home; however this year, buyers entered the market a bit earlier to take advantage of the April 30th deadline for the Home Buyer Tax credit. Despite the Tax Credit coming to an end, there seems to be no better time to purchase a home in the greater Burlington Vermont area than right now. Interest rates are incredibly low (in the range of 4.75%) and inventory is plentiful.

With interest rates as low as they have been in many years, homeowners see the opportunity to purchase “up” with little change to their mortgage payments. Buyers see that homeownership is more affordable than renting – especially in the greater Burlington area where apartment vacancy rates hover near 2%.

Heather Myott, our Coldwell Banker Mortgage Advisor, provides some examples of your improved purchasing power based upon interest rates today.

For Example:
• Purchase of $300,000 with 3.5% down payment at mortgage interest rate of 4.750% for a 30 year fixed rate loan = $1,544.15 monthly payment (principal and interest)
• Purchase of $300,000, 3.5% down, 30 year fixed, with a total mortgage interest rate of 5.750% = $1,727.46 monthly payment (principal and interest)
• Total increase in monthly payment of $183.31 or more than $65,000 over a 30 year loan.
• To maintain a monthly payment of $1,544.15 in an economy with an interest rate only 1 percentage point higher, you could only afford a home worth $268,000.
• That is a decrease in purchasing power of $32,000 or 11% less in your home!

Waiting to buy or sell simply does not make sense. Home values may remain stable, with a possible single digit price appreciation over the next 12-18 months, however, when property tax rates and interest rates increase (both projected through 2012), the pool of buyers who can afford that price will diminish.

2009 proved to be a year of ups and downs. The Vermont state market struggled during the 1st half of the year, posting declines in sales of nearly 30%. With the passage in Congress of the Economic Stimulus Package in February 2009, qualifying first time buyers were provided an incentive to purchase and receive up to an $8000 tax credit, activity picked up and our local market began to turn around. Sales increased during the 2nd half of the year – with first time buyers comprising nearly 50% of all real estate sales up from 35% in previous years. Because of the surge in sales between August and November from buyers benefiting from the tax credit, the year ended with an increase of 7% in residential unit sales in Chittenden County. The average price declined by a modest 4%. This reflected first time buyer purchases and for the most part, very modest depreciation of property values.

In November, Congress voted to extend and expand the tax credit in an effort to sustain the recovery of the housing market and therefore the economy. As a result of this extension, we expect an early and strong Spring Real Estate Market. Properties must be under contract by April 30th and meet a June 30th closing deadline. Now is the time for buyers to look for homes and for sellers to put their homes on the market. After April 30th – there may be fewer buyers motivated to purchase. In addition, economists are predicting a slight increase in mortgage rates for the second half of 2010. Those two conditions may exclude some buyers from the market as it will, at a minimum, reduce their buying power.

The expansion of the tax credit to existing homeowners is an opportunity that many should take advantage of. If you have owned your primary residence for 5 consecutive years of the last 8 years – and you purchase a new primary residence by April 30th (with a closing date on or before June 30th) – you may qualify for up to a $6500 credit on your 2009 or 2010 tax return; individuals with incomes as high as $145,000 or couples with income as high as $245,000 may qualify.

Whether downsizing, purchasing a larger home, or a new home in a different location – don’t miss out! For those existing homeowners considering selling their home this spring, while the average price of homes sold has declined slightly in the past two years, if you’ve owned your home since at least 2003 – you may realize an increase in value because of early, substantial appreciation.

Understanding the market and choosing a Real Estate Company and Agent with proven results in a difficult market is crucial. Coldwell Banker Hickok & Boardman Realty worked with more sellers and buyers in 2009 than any other real estate office in Chittenden County and the entire state of Vermont. If you have any questions about this data or the tax credits – or would like to talk about your specific neighborhood – please don’t hesitate to contact me.