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Showing posts from April, 2022

Buying a Home...Ask for a CLUE Report

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People purchasing a used car have most likely heard of CARFAX vehicle history reports to help them avoid buying a car with costly hidden problems.   Less likely are buyers to know that there is a way to discover some of the repair history of homes they are interested in. Lexis Nexis C.L.U.E. (Claims Loss Underwriting Exchange) is a claims history database that enables insurance companies to access consumer claims for the previous seven years when they are underwriting a risk or rating an insurance policy. An insurance underwriter could identify a previous claim for substantial damage to a property and try to find out whether the repairs were completed properly before assuming the risk as a new insurer.   Similarly, a buyer could benefit from knowledge of former claims that may affect the value of the property or possible, future repairs. A CLUE report can discover insurance claims on a home to investigate whether the repairs were done properly.   These report...

Coordinating the Sale and Purchase of Your Home

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Usually, it is easier to buy a home than to sell a home but that isn't necessarily the case currently. In today's market, it can be scary to sell your home before buying another because you could find yourself without a home. Most sellers will not accept a contingency on the sale of a buyer's home in today's market.  So, let's look at some of the alternatives that homeowners are using to facilitate the transactions.  If you have the income, credit, and cash available, the replacement home can be purchased with a new 80-90% loan-to-value mortgage and sell the existing home after you have moved into the new home.  This would require making two payments for a while but probably gives the seller the least amount of pressure to find the replacement property before the existing one is put on the market. If the mortgage on the new home has the option to recast the payment, additional down from the equity in the previous home after it sells would lower the paym...

A New Opportunity for Homebuyers

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You may not have heard of anyone assuming an existing mortgage for over thirty years and didn't know they were even possible any longer.   The reason is simple, it didn't make financial sense but now that interest rates are increasing, it may be an opportunity for some homebuyers. Conventional loans added clauses to mortgages back in the early 80's that gave the noteholder the right to raise the interest rate if a loan was assumed, as well as require the new buyer to qualify for the loan.   This essentially ended the practice of assuming conventional mortgages. Then, in the late 80's, FHA and VA mortgages did impose the right to qualify the new buyers, but the big difference was that the mortgage rate would remain the same as the original borrower.   Even so, it still effectively ended the assumptions of FHA and VA mortgages because rates on mortgages trended down for the next thirty years. There was really no benefit to assume a mortgage that still require...

Cost of Waiting to Buy in Both Price and Interest Rates

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Have you ever been shopping on a website where you were looking at something that was on sale?   You were interested in it but there wasn't a sense of urgency and maybe, you had a lot going on and didn't get back to it for a few days.   When you did go back to the website, the price on the item had returned to its regular price. How did you feel?   Did you go ahead and purchase it for the current price?   How did that make you feel knowing that if you had acted more decisively, you would have saved money and had the product by now? In 2021, homes across the United State went up 19.1% on average.   There were some markets where the prices soared 30 to 40%.   Fortunately, last year the mortgage rates did remain relatively stable but that isn't the situation this year, in 2022. At the end of 2021, economists from Fannie Mae and Freddie Mac, felt like prices would go up around 7% for 2022.   The Mortgage Bankers Association and the Home Pri...