Survey finds Americans prefer Homeownership

A new national survey gauging attitudes toward housing finds that two-thirds of Americans (65 percent) still prefer owning a home, despite the challenging economic environment and the housing downturn. The Fannie Mae National Housing Survey, conducted between December 2009 and January 2010, polled homeowners and renters to assess their confidence in homeownership as an investment, the current state of their household finances, views on the U.S. housing finance system, and overall confidence in the economy.

The survey revealed that homeowners and renters alike are taking a more cautious approach to homeownership. Nearly a quarter of renters polled (23 percent) said they will buy a home later than once planned. In addition, Americans with traditional, fixed-rate mortgages with predictable payments are significantly more satisfied than those with other types of mortgages. Respondents cited non-financial reasons such as safety (43 percent) and quality of local schools (33 percent) as driving factors in wanting to own a home, ahead of financial considerations.

A majority of consumers (60 percent) believe that buying a home today is harder than it was for their parents, and nearly seven in 10 (68 percent) think it will be even more difficult for their children. Most respondents (88 percent) also believe that walking away from an underwater mortgage is not acceptable, but those who know someone who has defaulted are more than twice as likely to have seriously considered stopping payments on their mortgage.

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This article was provide by CAR.

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Reverse Mortgage used to Purchase a Home

In an actual transaction a client obtained a Reverse Mortgage to complete a home purchase transaction.  Here is the scenario: Senior parents own their home free and clear. The parents would like to stay in their home and be independent through their retirement. They however need some assistance occasionally now and feel they may need more care assistance in the future as they age.

A home in the parents neighborhood came up for sale. There daughter and son-in-law have interest in moving to this home and providing their parents with support. The problem is that the adult children do not have enough equity in their home to make the purchase without increasing their own house payment beyond what they could personally afford.

A solution is possible  through a Reverse Mortgage. In this case the parents obtained a Reverse Mortgage on their home and was able to pull $225,000 cash equity. They still do not have a house payment because of the Reverse Mortgage.  They then purchased the new home with their adult children,using $200,000 of these funds as a down payment on the new home after setting aside $25,000 to complete some home repairs. With the adult childrens remaining equity, after they sold their home, there was no house payment on either home.

The daughter now works part time and has the free time to help her parents. The parents still have no house payments and have the security of family in their neighborhood.

For more information on Reverse Mortgages and helpful links,  go to www.CWMReverse.com

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What is a Short Sale? Is a Short Sale best for me?

“Short Sales” What is a Short Sale? Who can explain what a Short Sale is? Is a Short Sale best for me?

A short sale in real estate occurs when the outstanding obligations (mortgages, including HELOCS) are greater than the properties value or potential sales price. The owner of the property lists the property for sale with a Realtor of their choice at the market price and the Realtor prepares a request (Short Sale Package) that is sent to the Lender(s) requesting a  reduction in the mortgage(s) balance that will match the sales net. The Realtors commission is paid out of the sales proceeds as well as the unpaid property taxes, Title fees and most of the sales closing costs. In most cases the Seller(s) will not have to contribute any funds towards the closing.

Some things to consider when determining if a short sale is right for you:

1. Contact a Realtor that is experienced in the short sale process.

2. Review this option with your CPA and family Attorney. I always have my clients meet with a CPA and Attorney (with real estate experience) to review whether the short sale process is right for you.

3. The short sale approval process can take 2-5 months depending on the Lender.

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