Many retirees who have been struggling to qualify for a mortgage, find that post-retirement incomes aren’t sufficient enough to get a loan under today’s tough underwriting standards.  The problem is more pronounced for retirees making payments on a car loan, credit cards or home equity lines of credit.  They are under qualified with today’s low “DEBT-TO-INCOME” standards.  Mortgage giant Freddie Mac is now allowing retirees – and others – to use income from their 401(k), IRA and other retirement assets to qualify for a loan.  That, in turn,” might open the door to a money-saving refinancing to a lower rate loan or a downsizing purchase of a new house or condo,” reports the Washington Post of May 23, 2013.  The retirement account balances can be used to supplement their incomes for underwriting purposes, but the borrower does not actually have to draw from those balances in order to get a mortgage.  With home prices beginning to rise, this is good news for RETIREES.

Repealing the mortgage interest deduction would yank the safety net from millions of Americans – not just the rich.  This is one of the high-wire acts to lower the deficit and raise taxes!!  The economic benefits of a strong housing market are clear.  For over 40 years housing has contributed 17-19% to the national gross domestic product.  HOME OWNERSHIP remains the greatest TOOL for WEALTH CREATION FOR FAMILIES.  It is the foundation of strong families and healthy communities.  Strong correlation among positive community involvement, neighborhood stability, children’s educational success and even physical and psychological health.  The greatest share of mortgage interest deduction lies with the MIDDLE CLASS and not the rich.  22% went to households in the $50,000 to $75,000 range.  According to Al DelliBovi, president of the Federal Home Loan Bank of NY,  we do not need to force such a daredevil act on the American public.

“People are carryong on with life”, says Lorri Loggins, broker and President Greater Tyler Association of Realtors.  “With interest rates at historical lows, buyers are able to purchase more, hence the medial price increases.  Tyler is a great place to live”.  The median home price in March was $143,375, a 5.42% increase from the $136,000 median price home a year ago, but a trifle lower than the month before.  Home showings in homes above $500,000 have picked up as well as in the lower price ranges.  The Tyler area’s home inventory stood at 10.4 in March, which is a high inventory and everyone is hoping the pick-up in activity will move some of this inventory.   Properties closer to the city limits of Tyler and nearer the median price are moving quicker.   Still takes an average of 114 days to get a property sold.  There is also an increased interest in building custom homes + some builders are starting spec homes in the area.

Folks are now looking at buying homes with inventory shrinking and interest rates still low.  Follow these 4 steps to keep from being “house poor” with a too large house payment.  (1)  RUN YOU OWN NUMBERS.  Figure monthly payment, including taxes and insurance + maintenance.  Then figure how much of your monthly income can go toward all these expenses.  Ask your mortgage lender for the same information and compare.  (2) START YOUR HOUSE HUNT LOWER THAN YOUR TOP DOLLAR.  In some markets houses are going for over asking price and you need to know where to stop.  (3)  HAVE YOUR MORTGAGE PRO DO A LAST-MINUTE BUDGET CHECK BEFORE YOU WRITE AN OFFER.  Ask your mortgage pro to run a last minute budget check as it may have months ago when he/she did the last one.  Not a good idea to buy a boat while trying to get a mortgage loan or any other large purchase. (4)  THINK OF YOUR HOUSE AS THE LAUNCH PAD FOR THE REST OF YOUR LIFE.  Your home is not the cornerstone of your value as a human being – no possession is.  It should be the backdrop for the rest of your life to enjoy with your family.  Again don’t get “house poor”!

For borrowers of loans to buy a home the ABILITY – to – REPAY rule’s key requirements are:  (1)  FINANCIAL INFORMATION MUST BE SUPPLIED AND VERIFIED.  Lenders must document borrowers’ employment, income, debt obligations, credit history, etc.  Lenders can no longer offer “low-doc” or “no-doc” loans.  (2)  A BORROWERS MUST HAVE SUFFICIENT ASSETS OR INCOME TO PAY BACK THE LOAN.  Lenders must evaluate a consumer’s debt-to-income ratio to determine if he or she can afford the loan.  (3)  TEASER RATES CAN NO LONGER HIDE A MORTGAGE’S TRUE COST.  Lenders must base their evaluation on a consumer’s ability to repay the principal and interest over the long term – not just during an introductory teaser rate.  BEFORE CLOSING lenders need to show no excess upfront points and fees, no toxic loan features and a cap on how much income can go to debt.  All of this from the Consumer Financial Protection Bureau’s (CFPB’s) Ability-to-Repay rule, which will go into effect January 2014

The number of people who changed residences in 2012 increased by 12% since 2011, up from a record low of 11.6% in 2011,  according to recent U. S. Census Bureau estimates.  Mobility is still at low levels, even for  the  most mobile age group, 18-29 year olds.  The most common state-to-state moved were regional in nature.  Some 59,288 residents moved from N. Y. to Florida in 2012, while 58,992 moved from California to Texas and 49,635 moved from California to Arizona.  More people moved out of metropolitan areas and into the suburbs.  Between 2005 and 2010, 15.5 million people moved out of principal cities while 11.0 million moved in – a decrease of 4.4 million movers.

U. S. population of every state, county and city is determined by:  (1) total number of births,  (2)  total number of deaths,  (3)  total number of immigrants from other countries and (4)  NET DOMESTIC MIGRATION.  The Census Bureau defines migration as a move that crosses juridictional boundaries, even one county to another is domestic migration.  This information from Dr. Mark Dotzour at the TX A&M Real Estate Center.  In my opinion, states that have positive net domestic migration are states that are creating jobs and have a brighter outlook for economic growth.  These are areas that more people move into that out of.  2012 numbers show:  (1) Texas with 140,888,  (2) Florida,  (3) Arizona,  (4)  Colorado,  (5)  Georgia and  (6) Nevada.  All have lesser numbers than TX.  States with negative net domestic migration in 2012 are (1) New York with -115,754,  (2)  Illinois, (3)  California,  (4)  Ohio,  (5) Michigan and (6) Connecticut.  The Real Estate Center’s website gives more at      http://blog.recenter.tamu.edu/2013/04/states-love-migration/

(1)  You’re buying your 1st home.  OLD RULE:  mortgage rates are so low you need only a small payment.  NEW RULE:  put down as much as you can like 20%.  The biggest barrier today is 1st time home buyers NOT saving enough for a down payment.  (2)  You’re buying a bigger home.  OLD RULE:  don’t sell a home for less than you bought it for – period.  NEW RULE:  do your math.  Your $100,000 home is now worth $75,000.  You want to buy a $200,000 house that is now $150,000.  That means taking a $25,000 hit on the sale of our present house, but a $50,000 gain on the 2nd home.  With interest rates LOW, you will come out better in years to come.  (3)  You’re selling a home.  OLD RULE:  once the market bottoms, hold out as long as you can to net the most price appreciation.  NEW RULE:  put your home on the market in the spring.  If you really want to sell, spring is the season.  Sale prices begin to drop as the season wears on and in the fall and winter you may get less money, even if prices go up.  Article written by Kate Rockwood and in the Sunday, April 14, 2013 PARADE in the Tyler Paper.  Many more details in the 5 page article.

Although 55% of home buyers in the “What Home Buyers Really Want” report prefer a new home, only 8% of homes purchased between 2009 and 2001 were new, but fewer new homes built during that period.  The new homes were bigger and more expensive than other homes on the market.   The new home buyer, although the same age as all buyers, is earning about 25 more money.  About 2/3 of new home buyers are married & 2.79 people in their household.  About 1/2 of them pay for their down payment with their savings.  New home buyers are more concerned about how the home & neighborhood look.   The share of home buyers purchasing a home for the 1st time is 46% – highest since before 2001.  First -time home buyers earn about 8% less than all home buyers & pay about 25% more for a house.  The first- time homebuyers’ home is about 400 square feet smaller than the median size of the trade-up buyer’s home.  Price is definitely a factor in first-time homebuyers decision + schools.  More in this report from American Home Shield survey.  AHS is a home warranty provider as are other companies.  Just let us know what other information you need at our e-mail address: RealEstate@theBains.com

If purchasing a home or need to make your present home to handle special needs, particularly as you get older, the principle of UNIVERSAL DESIGN  simplifies life  for you and those around you.  Universal Design actually benefits all ages and abilities.  A home with a ground-level entry provides easy access in and out and wide enough to accomodate a wheel chair.  Also check width & slopes of sidewalks around your home to ensure that they, too, have easy wheelchair access.  Single-story homes give better maneuverability if you become physically impaired.  If you must use steps be sure they are covered with a non-slip surface and are well-lighted.  On the ground floor is there a bedroom or bath to use if you cannot climb the stairs, even for a short period of time.  Kitchens have become FAMILY ROOMS.  Again ability to get around in a wheelchair or walker.  Push-pull lever faucet handles are better than standard knobs.  Need easy access to drawers and cabinets.  In bathrooms have handrails and grab bars, but be sure walls will hold these when installed.  A chair or bench could be used in a tub or shower and handheld shower heads are good if you cannot stand to shower.  Keep UNIVERSAL DESIGN when you buy a new home or remodel your present one.