Paula Henry

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Are Sub-Prime Mortgage Problems Finally A Thing Of The Past?

July 2nd, 2008 categories: Indianapolis Real Estate News, Real Estate Financing

Sub-prime mortgage resets are expected to crest this summerIn the summer of 2005, sub-prime mortgage lending was at its peak.  Rates were relatively low and lending guidelines were relatively loose.

At the time, the “standard” sub-prime mortgage product was the 3/27 ARM.

The 3/27 had a few basic traits:

  • A fixed, 3-year “starter rate”
  • Every six months thereafter, the mortgage rate changed
  • The formula by which it changed was (4.999 percent + 6-month LIBOR rate)

If the loan was interest only, it usually converted to principal + interest at the first adjustment, too.

Because the summer of 2005 was the peak of sub-prime lending, it makes sense that the summer of 2008 is the peak of sub-prime adjusting.

For homeowners with adjusting sub-prime loans, there is some (relative) good news out there.

Today, the 6-month LIBOR hovers near 3.15 percent, meaning that an adjusted mortgage rate will be in the neighborhood of 8.15 percent.

This is versus the rate of 10.30 percent that sub-prime borrowers faced last summer when LIBOR was much higher than it is today.

Adjustments of any size can strain a household budget, though, so if you’re a sub-prime borrower and your pending adjustment will cause financial strife, be proactive — talk to your lender before you miss a payment. 

Lenders are often more willing to talk with “current” borrowers than with delinquent ones.

(Image courtesy: Washington Post)

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Indianapolis Ranked 6th Best Bargain Market - It’s Not All About Price

July 2nd, 2008 categories: Indianapolis Real Estate News, Indy Home Buyers, Indy Home Sellers

Indianapolis City ViewYou’ve heard me say it time and again, I love Indianapolis! I didn’t need a “best of” list to make me believe it, but when the news prints something that speaks of the great benefits of living in Indianapolis, I’m right there, saying, YES!

MSN, with the help of Sperlings Best Places, has just published it’s “Real Estate Best Bargain Markets”. Read the full article here.

I was happy to see the criteria wasn’t based on price of homes alone. The factors considered when compiling the list were:

  • Most livable area
  • Strong economy
  • Home prices are appreciating
  • Quality of life
  • Low unemloyment
  • Short commute times
  • Entertainment and recreation
  • Housing affordability

Once the figures were compiled and the list created, Indianapolis ranks as the 6th best real estate bargain market. When it comes to Real Estate, Indianapolis is one of the most affordable cities in America. Again, it’s not all about price, though. It’s the bargain of living in an affordable city with access to a wide range of benefits.

Where else can you have access to a dynamic, renovated, revitalized downtown like Indianapolis? You want sports, we got it! Arts and entertainment, check! Museums and culture – done!

Check out my list of things to do in Indianapolis. If you need more ideas about what to do in and around Indianapolis, search AroundIndy.com.

You want to know more about real estate in Indianapolis and the suburbs around Indianapolis, you know who to contact.

Related Posts:

Downtown Indianapolis - A Great Place to Call Home

Indianapolis Real Estate Market Updates

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Indiana Residential Real Estate Sales Disclosure

July 2nd, 2008 categories: Indianapolis Real Estate News, Indy Home Buyers, Indy Home Sellers

The Residential Real Estate Sales Disclosure Law (I.C.32–21–5) requires sellers of 1–4 unit residential property to give a disclosure form to buyers.  The disclosure form is a two page document which details items of importance to buyers, the condition of items and whether or not they are included with the property.

Items of importance on the sellers disclosure include:

  • Appliances
  • Electrical System
  • Water and Sewer System
  • Heating and Cooling System
  • Roof
  • Known Hazardous Conditions

Hazardous conditions include knowledge of radon, mold, methane gas, radioactive material, lead based paint, toxic materials, asbestos insulation, biological contaminants, etc.

Also included is a long list of other disclosures a buyer should be made aware of. This section deals mostly with the land, improvements and external conditions affecting the property, including, but not limited to:

  • Any foundation problems?
  • Encroachment and easements?
  • Structural Problems?
  • Additions or Alterations made without a permit?
  • Moisture or water problems?
  • Property in flood plain?
  • Any threatened or pending litigation?
  • Underground Storage Tanks?
  • Property located within one mile of airport?
  • Damage from wind, flood, rodents, termites?
  • Is the property subject to covenants, conditions and restrictions?

Indiana law requires the sales disclosure be provided to the buyer before a contract is written.

There is a lot of information to be provided in the Residential Real Estate Sales Disclosure, which should be read, understood and questioned. However, it is never a replacement for an independent professional inspection of the property.

Sample Indiana Real Estate Sales Disclosure

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Indianapolis Historical Homes and Landmarks

July 1st, 2008 categories: Indy Places

I can imagine this late 19th – 20th century Revival home was an icon of wealth and prosperity in the early 1900’s. Originally designed and built for Henry F Campbell in 1916, the home was not completed until 1928, after World War I. Mr Campbell never lived in the home and in 1945, the home was converted to apartments.

In 1993, the Historic Landmarks Foundation rated the property “outstanding”, (the highest rating), which placed the Campbell Mansion on the National Register of Historic Places.

Check out the slideshow to see the amazing architect and beauty of this home.

Indianapolis Historic Homes

 

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Indiana Housing Interest Rate Change

July 1st, 2008 categories: Indianapolis Real Estate News, Indy Home Buyers

Today is July 1, 2008 and the interest rate on Indiana Housing loans goes up. This is twice in the last month. Effective today, the rate for a loan form Indiana Housing is 6.125%.

Buyers can still complete the online course and receive a .125% discount on the interest rate.

The Indiana Housing program is great for first time home buyers. Check here for more information about Indiana Housing guidelines.

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