As mortgage lenders tighten approval standards   in Indiana and nationwide, the importance of a good credit score is rising.  Credit scores not only make the difference between a mortgage approval and mortgage turn-down, but they also play a large role in determining your actual mortgage note rate.

In the 3-minute piece, the NBC Today Show talks about 7 ways that homebuyers ruin their credit — often by accident.  Some of the highlighted mistakes include:

• Closing open credit cards
• Making appliance buys on credit prior to closing
• Asking creditors to lower credit balances prior to closing

In general, a 740 FICO will insulate a borrower from the higher costs and/or rates associated with low credit scores.  Below 740, though, every 20 points adds to the damage.  Watch the video and apply what you can to your own situation.  The more you know, the more you can save.

The Pending Home Sales Index rose slightly in December, climbing 1 percent from November.

A Pending Home Sale is a home that is under contract to sell, but not yet sold. It’s a figure compiled by the National Association of Realtors® using sales data from over 100 regional listing services and more than 60 large brokerages around the country.

Because each pending sale is a true measure of sales activity, the Pending Home Sales Index is purported to be the most reliable forward-looking indicator for housing. 

Recent data supports this hypothesis.

After Pending Home Sales plunged 16 percent in November, Existing Home Sales fell by 17 percent in December.  Based on the most recent Pending Sales Index, therefore, we can expect January’s closed sales to be similarly level.

For home buyers in Indianapolis , this is all a bit of good news. Home prices are based on the supply-and-demand balance that exists between buyers and sellers.  When buyers outnumber sellers, like they did through most of 2009, home supplies dip and, in fact, the national home inventory nearly halved during the 12 months ending November 2009.

With fewer homes for sale, multiple-offer situations were almost commonplace and home values rose as result.

Activity has since slowed, however, and fewer buyers are in today’s market. The supply-and-demand equation has shifted back some. In December, home supplies rose for the first time in 7 months and January will likely show the same.

The net result: Home buyers have more homes from which to choose and that can create negotiation leverage for better prices and better concessions.

With mortgage rates still low and a looming deadline on the homebuyer’s tax credit, market activity should be strong between now and April.   Take your time and bid right. And when you’re ready, be ready. The best deals likely won’t last.

INDIANA HOUSING DOWN PAYMENT ASSISTANCE PROGRAM

If you are a first time homebuyer in Indianapolis, you should know your financing options. The Indiana Housing Program for first time homebuyers who are creditworthy, but may not have the initial upfront costs for downpayment and closing costs is a great option.

I received this information  from one of my lenders with the guidleines for the Indiana Housing Down Payment Assistance Program.

 
  The general guidelines are as follows:

1.First time buyers or someone who has not been entitled to real estate in the past 3 yrs.
2.Indiana Housing will provide down payment assistance in the amount of  6% of the sales priced capped at $7500.00
3.This down payment can be used for required down payment, closing costs and prepaids.
4.The buyers are required to take a homebuyer counseling course – This is an online course thru Indiana Housing University.
5. A  3rd party housing inspection is required by Indiana Housing-  Indiana Housing has a list of approved inspectors they allow-  if the customer is having a regular home inspection. By using an approved inspector for your home inspection, you may save some money. 

6. Income requirements do apply:  Indiana Housing uses total household income- regardless if all members in the household are on the loan.
For Marion County and surrounding counties the income requirements are as follows:

For 1 person in the household- max income is $38,150
For 2 people in the household-max income is $ 43,600
For 3 people in the household-max income is $ 49,050
For 4 people in the household-max income is $ 54,500

7. The down payment assistance you can receive is carried as a 2nd mortgage against the loan-  the borrower makes no payments on these monies.  Regardless of when they sell the home, the funds will have to be paid back to Indiana Housing out of the proceeds of the sale.
8. There is a possible recapture tax owed by the borrower if they sale the property within the first 9 years.
9. Interest rate as of today is 4.95%-  this is a fixed 30 yr. term
10. If the property is in a flood area may not go Indiana Housing
11. The home must be the borrowers principal residence
12. A rental tenant must not have occupied the subject property within the past 3 months unless the current tenant is the purchaser
13. Borrower’s must provide copies of the past 3 years tax returns
14. A reservation fee of .125% to Indiana Housing is required when the file is submitted to them
15. It will take approximately 45 days for the loan from start to finish, shich is a bit longer than other loan programs..
16. Non-occupant co-borrowers are not  allowed

If you have additional questions or want to see if you qualify for the first time homebuyer program, give me a call and we’ll get started.

Copyright © 2010 by Paula Henry, All Rights Reserved. *First Time Home Buyers Down Payment Assistance*

A “Short Sale” is when a home seller sells his home for a lesser amount than what is owed on his mortgage, and the mortgage lender agrees to accept the lesser amount in lieu of a full payoff.

By way of example, a Short Sale may be appropriate for a Indianapolis home seller whose mortgage balance is $250,000 but whose home wouldn’t sell for more than $220,000.  Rather than pay the $30,000 difference to the lender at the time of sale, the seller enters into an agreement with the lender by which all sale proceeds are paid to the bank and the deficient balance is forgiven.

Short Sales are a preferable alternative to foreclosure but the process still harms both parties. For one, the seller is penalized with a derogatory tradeline on credit for not fulfilling a mortgage obligation. And, two, the lender is forced to take a loss on a mortgage loan.  Versus an executed foreclosure, however, Short Sale damages are relatively limited on both sides.

For this reason, Short Sales are sometimes considered “the economical alternative” to default.

The process of getting a Short Sale approved varies from lender-to-lender and can be time-intensive. Home sellers should not go at it alone — speaking with a real estate agent about the proper protocol is usually the best place to start.  And sellers should be aware of how a Short Sale on their credit can impact future borrowing.

Current Fannie Mae guidelines prevent short-selling homeowners from obtaining new mortgage financing for a period of 2 years.

Relaxed Country Living in Danville Indiana

When you have to have everything you want in a home, this is the home to see.

Completely updated home in Danville on 3 acres within 10 minutes of shopping, dining and Interstate 74.

Located in the wooded subdivision of Timberbrook, you’ll enjoy the casual lifestyle of a country farm where you can live, play and relax. The amenities are too numerous to mention, so come out and view this home for yourself. Sunday, January 31st, 2010 from 1:00 to 3:00.

Some Features:

• 5 bedrooms
• 3 baths
• Brownsburg schools
• Danville Taxes
• Swimming Pool
• Pool House
• Horse Barn
• Workshop

It’s hard to find a home like this!

Easy to find – SR 267 to 350N. West on 350N to Timberbrook Ct.

View more details about this home at DanvilleHorseProperty.com

A day away from market statistics for some fun with color.

I read two articles yesterday about the trend in decoarting colors. One article states turquoise would be the new color for 2010; the other article says yellow. While I like yellow; a soft or medium yellow for paint, I’m not certain I could take a lot of yellow. Most decorators and home staging professionals would agree yellow paint is neutral enough, depending on the shade. The turquoise and yellow didn’t do much for me.

Turquoise was a shock to me. I don’t see a lot of turquoise in decorating and my initial thought was, it may not look too bad with brown. Kind of replaces the blue/brown color combination of recent years. I prefer the Mediterranean colors for myself; reds, yellows, greens, but I did decorate a blue/brown bedroom for my daughter at our last home and actually loved it. Turquoise and brown I could live with.

Considering there are so many shades of yellow and turquoise, I can see these being the new designer colors for 2010, just maybe not together.

 Check out the color schemes the next time you are shopping or touring homes. See if this actually makes it to the designer stores. I think it will!

Reporting on a two-month lag, the government said home values rose 0.7 percent in November. 

National home prices are at their highest point since February 2009.

But before we look too much into the FHFA’s Home Price Index, it’s important that we’re cognizant of its shortcomings; the most important of which is its lack of real-time reporting.

According to the National Association of Realtors™, 80% of purchases close within 60 days. As a result, because of its two-month delay, the Home Price Index report actually trails today’s market data by an entire sales cycle.

This is one reason why home values appear to be rising even while new data shows that both Existing Home Sales and New Home Sales fell flat last month.  The home valuation report is using data from November; the sales reports are using data from December.

The Home Price Index is a trailing indicator and next month, as the Spring Market gets underway, the government will be reporting data from the holidays.

The same is true for the Case-Shiller Index. It, too, operates on a 2-month lag.

All of that said, however, long-term trends do matter in housing and the Home Price Index has shown consistent improvement over the last 10 months.  In many markets, home sales are up, home supplies are down, and values have increased.  This trend should continue into the early part of 2010, at least.

If you’re wondering whether now is a good time to buy a home in Indianapolis , consider low prices, cheap mortgages and an available tax credit as three good incentives.  By May, none of them will likely be available.

The Federal Open Market Committee voted to leave the Fed Funds Rate within its target range of 0.000-0.250 percent.

In its press release, the FOMC noted that the U.S. economy “has continued to strengthen”, that the jobs markets is getting better, and that financial markets are supportive of growth.

There was no mention of the housing market’s strength.  The last 3 statements from the Fed included that specific verbiage.

It’s the fifth straight statement in which the Fed spoke about the economy with optimism.  This should signal to markets that 2008-2009 recession is over and that economic growth is returning to U.S. economy.

The economy isn’t without threats, however, and the Fed identified several in its press release, including:

1. Credit remains tight for consumers
2. Businesses are reluctant to hire new workers
3. Housing wealth is down

The message’s overall tone, however, remained positive and inflation appears is still within tolerance.

Also in its statement, the Fed confirmed its plan to hold the Fed Funds Rate near zero percent “for an extended period” and to wind down its $1.25 trillion commitment to the mortgage market by March 31, 2010.  This is noteworthy because Fed insiders estimate that the bond-buying program suppressed mortgage rates by 1 percent through 2009.

Mortgage market reaction to the Fed press release is, in general, negative. Mortgage rates in Carmel are rising this afternoon.

The FOMC’s next scheduled meeting is March 16, 2010.

Brownsburg Indiana Home Sales

Home Sales in Brownsburg for December 2009 were fairly equal to the number of homes sold in Brownsburg in November, however, the price point was a bit higher.

Last month there were 41 sales for an average of $163,012, compared to November’s 45 sales and an average prive point of $151,783. Averages don’t really mean a whole lot except when studied over a long period of time. When we factor in short sales or bank owned properties in a specific area, averages tend to skew the whole.

There were 10 distressed properties sold in Brownsburg in December; almost 25% of the sales. Distressed properties are homes which sold either through short sale or as a bank owned home.

Brownsburg Indiana Subdivision Sales:

The most popular neighborhoods and subdivisions in Brownsburg for sales last month were:

• Summeridge – 7 homes sold – average price of $239,275
• Williamsburg Villages – 4 homes sold – average price of $189,375
• Lakeridge – 3 homes sold – average price of $155,833
• Highland Springs – 2 homes sold – average price of $262,500
• Sugar Bush Condos – 2 condos sold – average price of $97,500

Comparing 2008 home sales in Brownsburg to 2009, we see the trend for average home price has dropped while the number of homes sold is trending up. As short sales and bank owned home sales continue to affect the real estate market, we will see some up and down trends thorughout the year.

Copyright © 2010 by Paula Henry, All Rights Reserved. *Brownsburg Real Estate Report – December 2009 *

___________________________________________________________________________

Statistics were obtained from the Metropolitan Indianapolis Board of Realtors (MIBOR) data and are representative of Indianapolis homes which were  listed on the Indianapolis BLC; private sales are not included. All information is believed to be accurate, but is not guaranteed.

Indianapolis Real Estate Blog, written by Paula Henry, an Indianapolis Realtor and team leader of The Henry Group, at Red Door Real Estate, serving the Indianapolis and Brownsburg Indiana real estate markets.

Home Sales in Danville for the month of December were above last years sales. There were 11 sales last month, compared to 7 sales in December 2008.

The averages for December 2009:

• The highest home sale was $217,900 for a four bedroom, 3 bath home with 2433 square feet.
• The lowest priced home sold was a two bedroom, 1 bath home with 1228 square feet.
• The average days on market was 59 days.

Danville Real Estate Sold

Danville homes sold,  subdivision, home levels, garage, basement, square feet and price.

The most popular subdivision sales in Danville were in Stratford Ridge and Clear Creek, which represents two distinct home buyers, the first time home buyer and the move up home buyer.

Danville Real Estate Market Snapshot – Comparing 2008-2009

Average home price for Danville Indiana Home Sales in 2009 compared to 2008 shows a trend of lower home prices, but at the end of the year average home prices were not far off where they were a year ago. The number of homes sold has trended up. This could represent an influence from first time homebuyers, since the average home price in Danville is lower than the neighboring cities of Avon, Brownsburg and Plainfield.

# of homes sold in Danville 2008-2009

Copyright © 2010 by Paula Henry, All Rights Reserved. *Danville Indiana Real Estate Market Report – December 2009 *

____________________________________________________________________________

Statistics were obtained from the Metropolitan Indianapolis Board of Realtors (MIBOR) data and are representative of Indianapolis homes which were  listed on the Indianapolis BLC; private sales are not included. All information is believed to be accurate, but is not guaranteed.

Indianapolis Real Estate Blog, written by Paula Henry, an Indianapolis Realtor and team leader of The Henry Group, at Red Door Real Estate, serving the Indianapolis and Danville Indiana real estate markets.