Remodeling Rising: More Home Owners Spruce Up Properties

An index that measures the state of the remodeling market rose three points in the second quarter of this year, regaining the momentum started in 2013 but lost in the first quarter of this year, according to the National Association of Home Builders’ Remodeling Market Index. It marked the fifth consecutive quarter for the index to have a reading over 50. Any reading above 50 indicates more remodelers are reporting that market activity is higher than lower.

“With many home owners on better financial footing, home remodeling has become more popular,” says Paul Sullivan, NAHB’s Remodelers chair. “The completion of postponed work has helped remodelers in all regions regain confidence in the remodeling market.”

Remodeling jobs valued at $25,000 or more rebounded to 54 on the index, which is the same level at the end of 2013. Smaller remodeling jobs and maintenance and repair jobs were at reading s of 56 and 58, respectively, on the index. Remodelers reported more favorable conditions on calls for bids, amount of work committed for the next three months, backlog of jobs, and appointments for proposals.

“The recent improvement in the job market has helped restore remodelers’ confidence after a dip in the first quarter that was probably in part weather-related,” says David Crowe, NAHB’s chief economist. “As home owners feel more secure about their economic situation, they become more willing to undertake remodeling projects – especially larger, discretionary projects. In addition, fewer new home builders are looking to remodeling as a way supplement their revenue, and this has somewhat reduced competition for remodeling projects.”

A recent realtor.com® survey of more than 1,500 home owners showed that 67 percent of consumers say they’re planning a home renovation within the next six months, and they’re planning to spend more money on their renovations than last year. The most common budget range for home improvements was between $2,001 and $5,000 and the most popular areas to renovate were the kitchen, bathrooms, backyards or patios, and the exterior of the home, according to realtor.com®’s Home Improvement Survey.

Source: National Association of Home Builders and “Majority of Home Owners Planning to Renovate,” REALTOR® Magazine Daily News (July 18, 2014) and http://realtormag.realtor.org/daily-news/2014/07/25/remodeling-rising-more-home-owners-spruce-up-properties

Conflict in Ukraine and Middle East

Geopolitical events were the primary influence on mortgage rates again this week, while the economic data had little impact. After a quiet weekend, investors were willing to take on a little more risk early in the week. Shocking news on two fronts caused an abrupt reversal on Thursday, however, and mortgage rates ended the week just slightly higher.

When a conflict breaks out which could affect global markets, investors generally respond with a “flight to safety”. Uncertainty created by the threat of escalation causes investors to reduce the level of risk in their portfolios. This typically involves shifting from stocks to relatively safer assets such as gold and bonds, including mortgage-backed securities (MBS).

Heading into last weekend, investors were concerned about the possibility of an escalation in the conflict between Israel and Gaza, so they shifted to safer assets. When there was little change in the situation early this week, investors unwound these positions, pushing rates higher. Then on Thursday, Israel announced a ground offensive in Gaza and a Malaysian passenger plane was shot down in Ukraine. These events caused investors to quickly return to safer assets, offsetting much of the earlier rise in rates.

In the US, there was mixed news from the housing sector. The National Association of Home Builders (NAHB) Housing Market Index revealed that builder confidence jumped sharply in July to the highest level since January. Less positive, the Housing Starts data released this week, which covers the month of June, showed a decline of 9% from May. This data can be quite volatile from month to month, though.

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Melinda Movick
Mortgage Advisor
Frontier Mortgage
2012 and 2013 Five Star Professional Service Award
Providing Personalized Service to Every Client
314-960-9084
Fax: 1-888-545-4808
NMLS ID: 253071
MO ID : 340-MLO

What is HARP?

Home Affordable Refinance Program 

You may be eligible for HARP if you meet all of the following criteria:

  • The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
  • The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  • The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
  • The current loan-to-value (LTV) ratio must be greater than 80%.
  • The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.

 

 

What is HAMP?

Home Affordable Modification Program

Effective June 1, 2012, the Obama Administration expanded the population of homeowners that may be eligible for the Home Affordable Modification Program to include:

  • Homeowners who are applying for a modification on a home that is not their primary residence, but the property is currently rented or the homeowner intends to rent it.
  • Homeowners who previously did not qualify for HAMP because their debt-to-income ratio was 31% or lower.
  • Homeowners who previously received a HAMP trial period plan, but defaulted in their trial payments.
  • Homeowners who previously received a HAMP permanent modification, but defaulted in their payments, therefore losing good standing.

 

 

 

 

 

 

Melinda Movick
Mortgage Advisor
Frontier Mortgage
2012 and 2013 Five Star Professional Service Award
Providing Personalized Service to Every Client
314-960-9084
Fax: 1-888-545-4808
NMLS ID: 253071
MO ID : 340-MLO

The Back to Work FHA Loan Program

FHA recognizes hardships faced by these borrowers, and realized that their credit histories may not fully reflect their true ability to repay a mortgage.

The Back to Work FHA Loan Program is an option for some borrowers that have experienced an economic hardship.

FHA is allowing for the consideration of borrowers who have experienced an Economic Event and can document:

  • Certain credit impairments were the direct result of a loss of employment or significant loss of household income beyond borrower’s control.
  • The borrower has demonstrated full recovery from the event
  • The borrower has completed Housing Counseling completed within at least 30 days prior to application but no more than 6 months prior to application date.

Economic Event is any occurrence beyond borrower’s control that results in loss of employment/ income which causes a reduction in the borrower’s household income of 20% or more for a period of at least 6 months.

Recovery from Economic Event is the re-establishment of satisfactory credit (defined in detail as listed in FHA MEMO 2-13-26, page 5) for a minimum of 12 months. 

Satisfactory credit requirements include, but not limited to, no mortgage late payments, installment, revolving account or major derogatory credit issues within the last 12 months.  If a mortgage term was modified, as long as borrower has made timely payments according to modification agreement this may be acceptable.

  • Borrower exhibited satisfactory credit prior to the Economic Onset
  • Borrower’s derogatory credit occurred after the Economic Event
  • Borrower re-established credit for last 12 months

 

v  Collection/Judgments need to be verified as result of Economic Event

v  Foreclosure/Short Sale/Bankruptcy:  A minimum of 12 months must have passed since the date of Foreclosure/Short Sale/Bankruptcy  and this must be documented it was the result of Economic Event.

(Chapter 13 Bankruptcy requires a letter from the courts to proceed with a mortgage loan)

Satisfactory Housing Counseling – Borrower must receive homeownership counseling by a HUD approved housing counseling agency.  Housing Counseling may be in person, via phone, via internet or other approved methods by HUD.  List of agencies can be found at http://www.hud.gov.

*Please note: Each lender/bank may have specific overlays. This is intended for educational information only. Additional documentation and guidelines apply.

Melinda Movick
Mortgage Advisor
Frontier Mortgage
2012 and 2013 Five Star Professional Service Award
Providing Personalized Service to Every Client
314-960-9084
Fax: 1-888-545-4808
NMLS ID: 253071
MO ID : 340-MLO

Sorting documents and decluttering your home is a liberating spring experience.

Spring is here, our favorite season. Homebuyers and sellers emerge to begin different lives in their new homes and neighborhoods. Especially for sellers, paper purging is an excellent way to begin de-cluttering your home and getting it ready to show.

What is expendable and what should you keep? According to the AAA Midwest Traveler, you can shred utility bills, phone bills and credit card statements after you pay them. Pay stubs, bank statements and medical records can go away in 12 months. Exceptions could be if you have an ongoing medical problem or a working through a claim or reimbursement.

Further down the road, keep tax records, real estate transaction records, and documents related to home improvements for six years.

For your archives, keep insurance records, IRA contribution documents, until you withdraw the money, and active warranty documents.

Other paper you can throw away include outdated warranties for items you no longer have, outdated instruction manuals, which, considering the speed of technology, could be outdated in three months; old annual reports and investment newsletters, cancelled insurance policies and outdated wills and trusts, but only if you have a new will created.

Before you throw documents away, make sure your identity is unrecognizable. This includes your name, social security number, birthdate, account numbers and passwords. The best way to do this is to use a shredder to thoroughly destroy documents.

After you tackled this project you’ll be ready to begin decluttering your home to show at its best advantage. Believe us, it’s liberating!