Home Equity is Improving NATIONALLY

Where are You Sitting??

         Has your equity position in your home improved???

For the most part, in many parts of the country, the huge losses in home equity have been erased in the past three years as the housing environment improved.   

Buyers have been out, investors and home owners.  In Hampton Roads and other markets, the lower price ranges now are having multiple bids on some homes.   For this market, homes even up to $400,000 are selling quickly.

It appears that this trend of "normal market" will expand to the $500,000 price range in 2015.  

What does this have to do with home equity??

As demand outstrips supply, values of widgets or homes goes UP!!!

Thus, with buyer confidence and improving financial markets have encouraged town home and apartment dwellers to purchase a first or second home, we have the sellers of those homes pushed to purchase a new place.  And so it repeats through the various price strata.

Thus, this new analysis of home equity is not surpising.  Only about 10% of home owners are now under water with their mortgage.

Imagine it!  Perhaps you are not where you once were!

It could be very likely it is time to make that move you been holding off on, fearing your equity situation.

Home Equity

Refinance NOW

Note the picture???

Another heads up on the rising interest rates.  This particular article addressed to home owners looking to refinance their loans.   

Many buyers wishing to buy and home owners wishing to stay and refinance have sat on the sidelines as rates nudged upward.   These buyers and home owners have hoped, maybe even prayed, that the rates would be coming down again.

Yet all signs are the rates will go up.  Some of the signs are:

       Strengthening Economy

       Strengthening Stock Market

       Increasing Demand for Credit

       Increase Pressure for Fed to stop buying mortgage bonds

If you are wise and are a member of these two groups, hears another nail in the coffin of procrastination.

REFINANCE RATES WILL RISE IN 2014

Refi Costs Could Rise Next Year Interest rates and other home loan costs could rise in the year ahead, making it more expensive to refinance your mortgage or purchase a new home in 2014, mortgage market experts say. Mortgage Bankers Association Chief Economist Jay Brinkmann predicts interest rates will rise above 5 percent in 2014 and to 5.5 percent in 2015. The monthly payment on a 30-year, $100,000 mortgage is: $477.42 at 4 percent $536.82 at 5 percent $567.79 at 5.5 percent If rates do rise, homeowners looking to pull cash from their homes may decide it's cheaper to use a home equity loan or line of credit rather thanrefinancing their whole mortgage, Brinkmann said. Loan Fees Could Go Up Meanwhile, you could also be paying more for your mortgage next year because mortgage market giants Fannie Mae and Freddie Mac are looking to raise their fees. Fannie Mae and Freddie Mac loans usually have lower interest rates because the government guarantees the loans. But lenders pay a fee for that guarantee and if Fannie Mae and Freddie Mac raise lender fees, lenders could pass those increases along to homeowners courtesy of Albert Clark

Improving Home Values

More great new!!! After you read this, call me if you need to know the equity you have in your home. Call 757 580-6546!!! BALANCE SHEETS ARE IMPROVING FOR MANY HOMEOWNERS

Topic Summary: A report released this week by the Federal Reserve indicated rising home values are improving the overall net worth of many Americans. (See below on how to get a snapshot of your home's value) The Federal Reserve is out with their 2ndquarter analysis of household net worth. The Reserve states that as home values rise, many groups in the economy are doing better than previous quarters, including Homeowners. U.S. households' net worth - the value of homes, stocks and other investments minus debts and other liabilities - rose 1.8% to $74.82 trillion in 2ndquarter of this year, according to the report. That is the highest level since records began in 1945. Caution is advised here for those that do not feel this "increased wealth". A large percentage of the growth is in the form of investments as the stock market has been doing well in recent quarters. For most, the home represents their largest social and economic investment. A high tide, however, does not help all homeowners. In the 2nd quarter of this year, the value of residential real estate owned by households increased about $525 billion. There are approximately 12.2 million homeowners who still owe more than their homes are currently worth. The tone of the report, FOUND HERE, appears to be that things are getting better for homeowners because higher home values mean more home equity. The national median existing single-family home price was $203,500 in the second quarter, up 12.2 percent from $181,300 in the second quarter of 2012. (Source Nat. Association of Realtors) How to arrive at a rough estimate of your Home Equity.  Even though Home Values have risen in most all parts of the country, they are still not back to the levels found in 2006 and 2007 before the housing crash. There are only two values you need to arrive at your home equity: What your home is worth and what you owe on it. Your recent mortgage statement will tell you what you owe as a first mortgage, then add in any home equity loans or 2ndmortgages. Subtract this figure from what the fair market value for your home is. You can get a quick analysis done by the real estate professional that enrolled you in HomeActions. On the left you can click their email link or call your Realtor. When it comes to households that are underwater, Core Logic's latest Equity Report indicated that 2.5 million homes have "returned to positive equity". This is good news for the real estate market because it means more homeowners may be willing to sell their home for a profit and fewer homes will get foreclosed on. Negative equity is when the value of your home is less than the outstanding balance of the mortgage. The amount of homes that remain in negative equity is only 14.5% for the second quarter of the year. This fairs very well when compared to CoreLogic's  last report showing 19.8% underwater households in the first quarter of 2013. In the last year, the number of negative equity households dropped 33%. Courtesy of Al Clark's HomeAction Newsletter

What You Might Lose with Tax Reform

With the "blank slate" effort to re-write the tax code, certain deductions that the "average" tax payer use regularly are possible casualties.

Without knowing the details of the plan until it becomes public, it is hard to know if the new simple rates structure under discussion would equalize the lost of these deductions for the average person.

Only time will tell.    

WHAT’S IN IT FOR ME?

Topic Summary: What Homeowners May Be Faced With Loosing or Having Reduced  Since 1913, Homeowners have been given preferential treatment. For 100 years, interest on the mortgage has been a favored tax break. It is also one of the costliest tax breaks. It is under fire to be eliminated over time or at least reduced in value. Here is a quick list of some popular tax breaks we homeowners enjoy. 1. Mortgage Interest Interest that you pay on your mortgage is tax deductible, within certain limits. Married taxpayers can deduct all your interest payments on up to  $1 million in mortgage debt secured by a first or second home. The average homeowner using this deduction reduces their taxable income by about $12,000. Americans save around $80 million every year by deducting mortgage interest on their tax returns. 2. Capital Gains Exclusion Married taxpayers who file jointly now get to keep, tax free, up to $500,000 in profit on the sale of a home used as a principal residence for two of the prior five years. 3. Home Equity Loan Interest.  If you borrow money against your home you can deduct the interest paid (within certain limits) 4. Property Taxes. Homeowners at certain levels of income can deduct from their taxable income, local property taxes paid on their home. 5. Energy Efficiency Upgrades/Repairs Deduction Homeowners can deduct the cost of the building materials used for energy efficiency upgrades to their home. This is actually a tax credit, one which is applied as a direct reduction of how much tax you owe, not just a reduction in your taxable income. 6. Loan Forgiveness Deduction: For homeowners who had a mortgage work out or short sale, Congress added in some breaks in 2007. Up to that point the money you saved form the work-out was considered income and taxable. The Debt Forgiveness Act temporarily relieved the taxpayer of that burden. The provision is still active. Source: Al Clark's Home Action