The Bains

(1)  stick with a fixed-rate mortgage.  Yes rates are higher, BUT principal & interest payments will remain the SAME.  ARMs or adjustable mortgage rates are becoming more popular.  (2) put- and keep – a home wrranty in place.  Can be a God-send if you are short of cash.  Also can upgrade your plan.  Most sellers will pay for the 1st year.  The 2nd year it may rise, but you pay for it then.  (3)  get repair bids and estimates, not just inspections.  Legally an inspector cannot bid a repair, as it is a conflict of interest.  Get these bids before your option period or continguency runs out.  Although pest and roof contractors can give you a bid legally.  (4)  Buy for the 10-year plan, so you are not forced to sell in a down market.  Try to plan ahead for 10 years and get a mortgage you can comfortably handle.

FDR said “a nation of homeowners is unconquerable” and Ronald Reagan said “we will preserve the part of the American DREAM, which the mortage interest deductible symbolizes”. We are LANDOWNERS and includes the working class to the middle class.  HOME OWNERSHIP IS A MUST and so is the mortgage deduction!                          Texas affordability is the best in the nation and freedom for builders so they can respond to demand and no government regulation, so they can obtain construction loans.  Underwriting on loans is too tight, so even with the population increase, NO new households are buying, so rents will rise.  1/3 of home sales are cash – never that high but  underwiting is too strigent.  A 102 year old prison southwest of Houston is being shut down.  First time a prison closed.  This prison made famous by the song “Midnight Special”.

from same period last year.   July 2011 saw 278 homes sold as compared to 255 July 2010.  Last month’s sales were down 11% from 313 sold in June.  A bit of good news is great after the interesting week in the stock market.  These figures are from the Greater Tyler Association of Realtors.  Real estate is LOCAL.  The median price also increased 3.6% to $139,800.  Means all sectors are selling.  The Tyler area’s home inventory stook at 14.6 months or down from l4.9 in May.  The best news might just be the average days on the market fell to 98 days.  First time in 18 months this has happened.  Smith County had 38 new foreclosures in July, according to RealtyTrac.  Texas’ overall inventory is 7.6 months in June compared to 8.2 months earlier.

NASA will have thousands of layoffs with Clear Lake homes staying on the market longer and more coming up for sale.  Some do not know about other jobs, so may be more psychological  than economic.  People are moving to Houston, but it’s not an active market.  2010 was a more active market because of the tax credit and the market is down this quarter from last year, but actually “if anything, I’m suprised to see the sales volumn didn’t lag further behind 2010″ according to Dr. Jim Gaines, chief economist at the Real Estate Center at TX A&M University.  This is interruped as the market is beginning to turn around.  Layoffs are making us all nervous and Trane in Tyler is laying off several hundred, which does also happen some years, but whether this is permanent or temporary is to be seen.

(1)  pay your mortgage bill before ALL others.  Missing one payment can hurt our credit rating & make you ineligible to refinance.  (2)  Do NOT tell your bank you are struggling, but  find a government-approved, non profit housing counselor at MakingHomeAffordable.gov or call 888-995-HOPE.  FREE service.  The counselor might suggest cutting your expenses or looking for extra income.  One family rented their home & then rented a cheaper place for 2 years.  If your FICO score is above 740, then refinance.  The Home Affordable Refinance Program (HARP) will let you refinance with negative equity.  If your credit is BELOW 700, then less options, but BE PERSISTENT.  Go to Home Affordable Modification Program (HAMP) to maybe get your payments reduced.  Incidentially the often expensive closing costs can be rolled into your refinancing of the loan.  Could do a short sale or deed in lieu of foreclosure or strategic default.  The banks do not like this.  Well worth pursuing if your goal is to KEEP YOUR HOME.

according to Bankrate.com            The highest amount on average is $4,944 for the closing of a $250,000 house with a $200,000 mortgage.  The increase  is because of stricter mortgage regulations that the government has implemented in the past 2years.  Mortgage closing costs include fees charged by those involved in the home-buying process, such as lenders, appraisers and title companies.  Bankrate found the highest closing costs are in New York state with $6,138 and the lowest are Arkansas at $3,378.

(1)  What’s the history of the house?  Maybe need to jiggle a switch or plug in something.  (2)  Where to go and who to know?  Who organizes the Neighborhood Watch or dry cleaners that does alterations.  (3)  What surprised them when they moved in?   Surprised as to how friendly the neighbors or noise from school down the block.  (4)  Where is it and does it work?   Where do you take trash to be emptied or emergency water & electrical shutoffs.  (5)  Is there anything you would like to leave?  Just ask and the seller might sell a piece of furniture or have you do a repair, when furnture is moved for a price or gratis.  (6)  What did I forget to ask?  If you will get the sellers phone information to call him for something you cannot figure out or if  you let your weeds get too high in the spring, the fire department will ticket you.

(1)  start with GREEN CAREERS.  Look at   www.bis.gov/green   to get an idea of green jobs for your kids.  By 2030 there should be 37 million jobs from renewable energy industries in the U. S.  (2) GREEN COLLEGES.    www.greenreportcard.org         keeps tables on universities & colleges who give these courses and compare them.  (3)  there are scholarships for kids who are interested in a green career.  Again look on the internet for schools that offer these  type scholarships.  (4)  LOW IMPACT COLLEGE TOURS.  Go to     www.greencollegetour.com       to narrow your choices and save gas running to colleges.   (5) GREEN is such a new topic that we all have to stretch our mind and take in what is available.

the borrowers owe more on their mortgages than their homes are worth.  Texas has 10.1% and 5.4 in near-negative equity loans at the end of 1st quarter 2011, according to CoreLogic data compiled by Real Estate Center Research Economist Dr. Jim Gaines.  Nationally there were 22.7% of residential properties with a mortgage with negative equity.  Down a bit from 4th quarter 2010.  Additionally 2.4 million borrowers have less than 5% equity, referred to as near-negative equity.  Negative equity and near-negative equity mortgages accounted for 27.7% of all residential properties with a mortgage nationwide.  Texas ranked 33rd out of 44 states for which the data was reported.

A recent analysis by USA TODAY concluded that following a recent cut in Social Security tax stemming from a December 2010 budget deal between Republicans & Democrats, Americans are currently paying the smallest share of their income for taxes since the 1950′s.  The total tax burden which includes all federal, state & local taxes, DROPPED from 27% to 23.6%.  The USA TODAY’S analysis was not limited to personal income tax, but included Medicare, Social Security, property tax for schools, etc.   This means a great amount will stay in OUR pockets, but less for the U. S. Government & they are struggling to pay bills & not go further in debt.  As a country, we are perpetuating a vicious cycle of borrowing more to pay the interest on the debt, etc.  It is like your personal finances – at some point it has to maintain a balanced income to debt ratio.  The government CANNOT MANAGE ITS DEBT.  Somehow this will have to dealt with & it may be out of our pockets.