Exit Platinum Realty Northwest Suburban Chicago

Inventory of Available Homes for Sale is Down

2012-02-23T22:02:00.000-06:00

Homes are starting to sell again and inventory of existing homes are down from a year ago.

This makes it a little harder for a buyer to find a home of his dreams. Potential sellers are still a little leery about putting their home up for sale and thinking they will wait a long time to sell still.

Times are changing!

With the advent of the Spring selling season coming up sooner than expected due to the unusually great winter weather we are having, it is time for sellers to get back on the market!

Give Dino a call @ 847-922-4241 or visit the web site @ http://www.dinomicheli.com/

Exit Platinum Realty Comes to Sun City Huntley

2012-02-23T00:14:00.000-06:00

Exit Platinum Realty comes to Sun City Huntley in a big way. Dino Micheli, Broker and Rob Auld, Broker has joined the real estate firm and specializing in Sun City Properties.

They offer a wealth of knowledge of the area and can help you find that dream home in an "Active Lifestyle Setting" that you always wanted.

Sun City Huntley offers a attractive setting, with plenty of activities to fit anyone's needs and desires. With its 75,000 Square foot Prairie Lodge which is the hub of the Sun City Huntley activities and the largest activity center in the midwest.

The popular "Jamesons" restaurant is on site and is one of the most attractive restaurants in the area overlooking the championship golf course managed by "Billy Casper" Enterprises. Jamesons is open to the public and easily accessable by all near Huntley, Illinois.

Want to know more? Call Dino Micheli at 847-922-4241 or visit his website at http://www.DinoMicheli.com

Is the Homeownership Rate Stabilizing?

2011-11-10T09:43:00.002-06:00

On November 2, 2011, in Economist Commentaries, by Lawrence Yun, Chief Economist ....Share
The U.S. homeownership rate rose a notch in the third quarter, with 66.1 percent of households owning a home – up from 66.0 percent in the prior quarter. However, the trend has clearly been downward since the bubble situation of several years ago. Just maybe, however, we’re starting to venture into sustainable homeownership, since the current ownership rate matches up with 1998 levels. Back in 1998, there was no mention of a housing bubble or unsustainability in the media or in the academic literature, so the current homeownership figures may indeed indicate the right stabilizing level for the country. Other housing data have also pointed to stabilization (though not a genuine recovery) in recent months – such as home prices, home sales, and housing starts.

If the homeownership rate stabilizes at the current 66 percent or so level then the natural increases in population (3 million a year) and households (about 1.1 million a year during normal times) in the U.S. will bring about 700,000 additional homeowners each year. Total home sales and business opportunities for REALTORS® would arise from these new set of homeowners. Not to mention the added turnover rate among the existing 75 million home owning families, which was exceptionally low in recent years, due in part both to the weak economy and to the many underwater homeowners who have been unable to move without a short-sale approval from the banks.

Short Sales are Great for Buying homes

2011-11-06T06:04:00.000-06:00

Thinking of Buying a home but are afraid you cannot afford one?

Contact me today and I will show you how afforable homes are these days.

These are the facts:
1.) Interest rates the lowest in 30 years
2.) Home prices have reverted back to 2001-2002 prices.
3.) Lendors are giving loans if you have a good credit score.
4.) You only need 3.5% down payment, more though is better.
5.) Short sale homes are not trashed as many people think and often are very nice.

Call Dino at 847-922-4241 for a free consultation.

Foreclosures fall for 8th straight month

2011-06-22T21:34:00.000-05:00

Foreclosure filings experienced their eighth straight month of declines, according to RealtyTrac.

In May, filings fell 33% from a year earlier and 2% month-over-month, according to the online marketplace of foreclosed properties. The number of homes that were repossessed (referred to as REOs or real estate-owned properties) in May also declined to 66,879, down 3.8% from April and 29% year-over-year, the firm said.

33239PrintCommentThe huge year-over-year drop in foreclosures doesn't necessarily mean the housing market is staging a recovery, however.

James Saccacio, the CEO of RealtyTrac, says the declines are likely due to lingering effects of the "robo-signing" scandal, which broke last September, when it was discovered that banks were playing fast and loose with foreclosure documents.

In some cases, it was found that banks brought foreclosure proceedings upon homeowners when they had no standing to do so. Sloppy paperwork sometimes made it impossible to tell which entity was the rightful owner of the mortgage notes.

To help fix the mess, foreclosure proceedings were temporarily suspended. Even though the suspension has since been lifted, the pace of foreclosures remains significantly slower as banks more thoroughly review each case to ensure they are being handled legally and properly.

Walk away from your mortgage? Get 'ruthless'

"Foreclosure processing delays continue to mask the true face of the foreclosure situation," said Saccacio. "Lenders are somewhat unevenly pushing batches of bad loans through foreclosure as they overhaul their paperwork and documentation procedures."

There's another factor at play, as well. The banks can't sell the homes they've already seized so they aren't as incentivized to repossess more homes.

"[There's] weak demand from buyers, making it tough for lenders to unload their REO inventory," said Saccacio. "Even at a significantly lower level than a year ago, the new supply of REOs exceeds the amount being sold each month."

The banks don't want to take on the expense of maintaining the homes -- property taxes, heating costs, repairs and insurance -- if they can't sell them quickly.

Selling off the inventory of repossessed homes is crucial to the housing market, said Jim Gillespie, CEO of Coldwell Banker. Sold at steep discounts, REOs compete with new homes for buyers and have severely depressed new home sales.

How to Use Comparable Sales to Price Your Home

2011-03-05T14:36:00.000-06:00

Before you put your home up for sale, use the right comparable sales to find the perfect price.

A house is comparable to yours in price if it's in the same neighborhood, on a similar street, and in the same school district. How much can you sell your home for? Probably about as much as the neighbors got, as long as the neighbors sold their house in recent memory and their home was just like your home. Knowing how much homes similar to yours, called comparable sales (or in real estate lingo, comps), sold for gives you the best idea of the current estimated value of your home. The trick is finding sales that closely match yours.

What makes a good comparable sale?

Your best comparable sale is the same model as your house in the same subdivision—and it closed escrow last week. If you can’t find that, here are other factors that count:

Location: The closer to your house the better, but don’t just use any comparable sale within a mile radius. A good comparable sale is a house in your neighborhood, your subdivision, on the same type of street as your house, and in your school district.

Home type: Try to find comparable sales that are like your home in style, construction material, square footage, number of bedrooms and baths, basement (having one and whether it’s finished), finishes, and yard size.

Amenities and upgrades: Is the kitchen new? Does the comparable sale house have full A/C? Is there crown molding, a deck, or a pool? Does your community have the same amenities (pool, workout room, walking trails, etc.) and homeowners association fees?

Date of sale: You may want to use a comparable sale from two years ago when the market was high, but that won’t fly. Most buyers use government-guaranteed mortgages, and those lending programs say comparable sales can be no older than 90 days.

Sales sweeteners: Did the comparable-sale sellers give the buyers downpayment assistance, closing costs, or a free television? You have to reduce the value of any comparable sale to account for any deal sweeteners.

Agents can help adjust price based on insider insights

Even if you live in a subdivision, your home will always be different from your neighbors’. Evaluating those differences—like the fact that your home has one more bedroom than the comparables or a basement office—is one of the ways real estate agents add value.

An active agent has been inside a lot of homes in your neighborhood and knows all sorts of details about comparable sales. She has read the comments the selling agent put into the MLS, seen the ugly wallpaper, and heard what other REALTORS®, lenders, closing agents, and appraisers said about the comparable sale.

More ways to pick a home listing price

If you’re still having trouble picking out a listing price for your home, look at the current competition. Ask your real estate agent to be honest about your home and the other homes on the market (and then listen to her without taking the criticism personally). Next, put your comparable sales into two piles: more expensive and less expensive. What makes your home more valuable than the cheaper comparable sales and less valuable than the pricier comparable sales?

Are foreclosures and short sales comparables?

If one or more of your comparable sales was a foreclosed home or a short sale (a home that sold for less money than the owners owed on the mortgage), ask your real estate agent how to treat those comps. A foreclosed home is usually in poor condition because owners who can’t pay their mortgage can’t afford to pay for upkeep. Your home is in great shape, so the foreclosure should be priced lower than your home.

Short sales are typically in good condition, although they are still distressed sales. The owners usually have to sell because they’re divorcing, or their employer is moving them to Kansas.

How much short sales are discounted from their market value varies among local markets. The average short-sale home in Omaha in recent years was discounted by 8.5%, according to a University of Nebraska at Omaha study. In suburban Washington, D.C., sellers typically discount short-sale homes by 3% to 5% to get them quickly sold, real estate agents report. In other markets, sellers price short sales the same as other homes in the neighborhood.

So you have to rely on your REALTOR’s® knowledge of the local market to use a short sale as a comparable sale.

Five Ways to Get Your House Ready to Sell

2011-03-03T06:31:00.000-06:00

Working to get your home ship-shape for showings will increase its value and shorten your sales time.

Here are five ways to get your house ready to sell.

Many buyers today want move-in-ready homes and will quickly eliminate an otherwise great home by focusing on a few visible flaws. Unless your home shines, you may endure showing after showing and open house after open house—and end up with a lower sales price. Before the first prospect walks through your door, consider some smart options for casting your home in its best light.

1. Have a home inspection

Be proactive by arranging for a pre-sale home inspection. For $250 to $400, an inspector will warn you about troubles that could make potential buyers balk. Make repairs before putting your home on the market. In some states, you may have to disclose what the inspection turns up.

2. Get replacement estimates

If your home inspection uncovers necessary repairs you can’t fund, get estimates for the work. The figures will help buyers determine if they can afford the home and the repairs. Also hunt down warranties, guarantees, and user manuals for your furnace, washer and dryer, dishwasher, and any other items you expect to remain with the house.

3. Make minor repairs

Not every repair costs a bundle. Fix as many small problems—sticky doors, torn screens, cracked caulking, dripping faucets—as you can. These may seem trivial, but they’ll give buyers the impression your house isn’t well maintained.

4. Clear the clutter

Clear your kitchen counters of just about everything. Clean your closets by packing up little-used items like out-of-season clothes and old toys. Install closet organizers to maximize space. Put at least one-third of your furniture in storage, especially large pieces, such as entertainment centers and big televisions. Pack up family photos, knickknacks, and wall hangings to depersonalize your home. Store the items you’ve packed offsite or in boxes neatly arranged in your garage or basement.

5. Do a thorough cleaning

A clean house makes a strong first impression that your home has been well cared for. If you can afford it, consider hiring a cleaning service.

If not, wash windows and leave them open to air out your rooms. Clean carpeting and drapes to eliminate cooking odors, smoke, and pet smells. Wash light fixtures and baseboards, mop and wax floors, and give your stove and refrigerator a thorough once-over.

Pay attention to details, too. Wash fingerprints from light switch plates, clean inside the cabinets, and polish doorknobs. Don’t forget to clean your garage, too.

5 Tips to Prepare Your Home for Sale

2011-01-20T17:01:00.000-06:00

5 Tips to Prepare Your Home for Sale

Working to get your home ship-shape for showings will increase its value and shorten your sales time.

1. Have a home inspection

Be proactive by arranging for a pre-sale home inspection. For $250 to $400, an inspector will warn you about troubles that could make potential buyers balk. Make repairs before putting your home on the market. In some states, you may have to disclose what the inspection turns up.

2. Get replacement estimates

If your home inspection uncovers necessary repairs you can’t fund, get estimates for the work. The figures will help buyers determine if they can afford the home and the repairs. Also hunt down warranties, guarantees, and user manuals for your furnace, washer and dryer, dishwasher, and any other items you expect to remain with the house.

3. Make minor repairs

Not every repair costs a bundle. Fix as many small problems—sticky doors, torn screens, cracked caulking, dripping faucets—as you can. These may seem trivial, but they’ll give buyers the impression your house isn’t well maintained.

4. Clear the clutter

Clear your kitchen counters of just about everything. Clean your closets by packing up little-used items like out-of-season clothes and old toys. Install closet organizers to maximize space. Put at least one-third of your furniture in storage, especially large pieces, such as entertainment centers and big televisions. Pack up family photos, knickknacks, and wall hangings to depersonalize your home. Store the items you’ve packed offsite or in boxes neatly arranged in your garage or basement.

5. Do a thorough cleaning

A clean house makes a strong first impression that your home has been well cared for. If you can afford it, consider hiring a cleaning service.

If not, wash windows and leave them open to air out your rooms. Clean carpeting and drapes to eliminate cooking odors, smoke, and pet smells. Wash light fixtures and baseboards, mop and wax floors, and give your stove and refrigerator a thorough once-over.

Pay attention to details, too. Wash fingerprints from light switch plates, clean inside the cabinets, and polish doorknobs. Don’t forget to clean your garage, too.

5 Reasons to Buy a Home in 2011

2010-12-30T20:59:00.002-06:00

Michele Lerner, author of Homebuying: Tough Times, First Time, Any Time, offers reasons why real estate is likely to improve in 2011. Here are five reasons she thinks consumers should consider a home purchase next year:

▪ Mortgage rates will stay low. Even with rates climbing — maybe to as high as 6 percent by 2012 — they are still well below where they have been historically.

▪ Tax cuts could help. Extending the tax cuts could encourage a more rapid recovery for the economy.

▪ Americans want to be home owners. A recent Fannie Mae survey showed that Americans still believe a home is a safe and desirable investment.

▪ Builders are about to begin building. Home builders have been sitting on the sidelines. This year, they think pent-up demand will create an appetite for new homes.

▪ Homes are shrinking. Homes are getting smaller, which has made them more affordable.

Home Ownership Does Matter

2010-12-18T08:24:00.001-06:00

Home Ownership Matters

Reprinted from the National Association of REALTORS®.

TO AMERICA...

67% of American households are owner-occupied. America is a nation of home owners.

Home owners pay 80 to 90% of federal individual income taxes, federal programs that benefit all Americans.

Every home purchased pumps $60,000 into the economy for furniture, improvements and related items.

Housing accounts for more than 15% of the national Gross Domestic Product, a key driver of our national economy.

For these reasons and more, home ownership is the American Dream!

4 Tips for Setting the Right Sales Price

2010-09-24T16:05:00.000-05:00

Sellers think their homes are worth more than their real estate professional recommends, and buyers think these same homes are worth less.

It’s a difficult disconnect that makes selling properties a challenge. Successfully marketing a home requires that the price be set carefully -- or it will languish on the market. Among the considerations:

How many homes are for sale in the neighborhood? The more homes on the market, the more important it is to list at the lower end of the scale. "I want buyers to ask why is this house priced so competitively," said NAR President-elect Ron Phipps of Phipps Realty in Warwick, R.I. "I want the answer to be an offer."Take short sales and foreclosures into consideration when pricing. If the competing properties are in lousy condition, they are less of an issue, but if they are well taken care of, yet priced 25 percent below market, they can be a serious factor.

Negotiate decisively. "Buyers are not interested in back-and-forth negotiations these days," Phipps said. "They are less emotional and more disciplined. They will walk away."

Cut the price when you have to. If no one shows up for an open house, if no one calls and if there are no offers, then the price is too high. That means it's time to make a meaningful price cut.

Mortgage Rates Continue to Drop

2010-05-22T07:34:00.002-05:00

Falling rates on U.S. government securities helped push mortgage rates down to the lowest level so far this year.

The average rate on a 30-year fixed loans declined this week to 4.84 percent from 4.93 percent a week ago, reported Freddie Mac.

Also, 15-year fixed loans fell to 4.24 percent from 4.30 percent; five-year, adjustable-rate mortgages declined to 3.91 percent from 3.95 percent; and one-year ARMs fell to 4 percent from 4.02 percent.

Source: Pittsburgh Post-Gazette (05/21/10)

First-Time Home Buyers, Sellers Optimistic

2010-04-24T09:14:00.000-05:00

More than 48 percent of first-time buyers expect home prices to increase by this time next year, according to a survey by Century 21 Real Estate.

The survey posed questions to people who had bought or sold a home in the last year.

Sixty percent of first-time home buyers say they didn’t understand the process of buying a home, and more than 85 percent of both first-time buyers and sellers said that using a real estate professional was important.

The top three skills valued in a real estate professional by both buyers and sellers were knowledge of the area, trustworthiness, and responsiveness.

More than 80 percent of buyers believe now is a good time to buy a home. First-time home buyers rated these three factors as the most influential in their decision:

• Current housing prices: 66 percent
• Home Buyer tax credit: 63 percent
• Low loan rates: 60 percent

In choosing a home, 95 percent of first-time home buyers thought price was the most important consideration, but 90 percent were also very concerned about neighborhood safety.

About 54 percent of first-time sellers think home prices are more affordable now than they were this time last year, and 50 percent were selling because they were purchasing a property they saw as more attractive and better suited to their needs.

Buyers Who Wait May Lose a Lot

2010-03-05T20:02:00.000-06:00

Potential home buyers who delay have a lot to lose.

First-time home buyer and move-up tax credits worth $8,000 and $6,500, respectively, expire April 30. Buyers who qualify get a dollar-for-dollar reduction in taxes or a cash payment if they don’t pay enough taxes to cover the credit.

Other factors that should spur buyers:

Low mortgage rates. If the Federal Reserve stops buying mortgage-backed securities at the end of March, 30-year rates will almost certainly rise to more than 6 percent.

Rising prices. About 30 percent of markets are already experiencing price increases. Prices are falling in 12 percent of markets, says Fiserv (but that only helps if you want to live there).

Source: Money Magazine, Beth Braverman (03/02/2010)

Fire Safety - A Must for Your Home

2010-03-03T21:40:00.000-06:00

Each year, fires kill more Americans than any other natural disaster. According to the U.S. Fire Administration, 80% of fire deaths occur in residences. While no home can ever be completely fireproof, there are many steps you can take to greatly reduce the risk of fire for your family and your home:

Smoke detectors are the most important part of your home fire safety! Make sure your home has smoke detectors at least in every bedroom, and test them frequently.

Use appliances wisely. Overheating, unusual smells, shorts and sparks are all warning signs that an appliance needs to be shut off and either repaired or replaced. Unplug appliances when not in use.

Never overload circuits or extension cords. Don't place cords or wires under rugs, over nails, or in high traffic areas.

Portable heaters need at least three feet of space from any combustible materials.

Fireplaces should be used with fire screens, and chimneys should have annual cleanings.

Have at least two fire extinguishers in your home, with one in a designated place in the kitchen. Cooking fires are the leading cause of both home fires and home fire injuries in the U.S.

Extinguish candles before going to bed or when leaving a room.

If smoking indoors, always use an ashtray and exercise caution. Careless smoking is the leading cause of fire deaths in the U.S.

Properly inspect and maintain your home's heating system. Poorly maintained heating systems cause many fires.

Consider the installation of a home sprinkler system. Such systems are now much more affordable and greatly diminish the risk of fire injuries.

These are just a few ways that you can make your home a safer place from fire. More information can be found on the U.S. Fire Administration's website, www.usfa.fema.gov, or by contacting your local fire department. If you want more tips for homeowners, visit my website. I'd also be happy to answer any home owning or real estate questions your may have.

I look forward to hearing from you.

REALTORS® push to protect Mortgage Interest Deduction

2010-02-23T22:18:00.000-06:00

. President Obama’s budget proposal again recommends limiting the value of the mortgage interest deduction (MID) for upper income taxpayers by, in effect, converting the deduction to a 28% tax credit for those individuals currently in the 33% or 35% tax brackets. NAR is 100% opposed to a provision that would modify the deduction and will launch a multi-phase plan of action to eliminate it from the budget plan.

Mortgage Cancellation Relief Still in Effect

2010-01-29T15:11:00.000-06:00

In recent weeks, calls to National Association of Realtors have shown some confusion as to whether the tax relief for cancellation of mortgage debt rules remain in effect. The short answer: Yes. The rules were enacted in 2007 and were originally scheduled to expire as of December 31, 2009.

The financial system relief package enacted shortly before the 2008 election extended the relief through December 31, 2012. Thus, sellers who satisfy the requirements will continue to receive tax relief when a lender cancels all or some portion of debt associated with the sale of a principal residence.

Get help - before you fall behind on your FHA mortgage

2010-01-26T14:29:00.001-06:00

By Les Christie, staff writerJanuary 22, 2010: 3:04 PM ET

NEW YORK (CNNMoney.com) -- Struggling to pay your FHA mortgage? Now you no longer have to be late with your payments to get help.

On Friday, the Federal Housing Administration announced that it will assist borrowers before they become delinquent. All you need do is prove your problems were caused by a reduction of income from a job loss, fewer paid hours, slashed wages or a decline in self-employed business earnings. You may also qualify because of a change in household circumstances, such as a death or disability.

"The FHA has always required lenders to establish early contact with delinquent borrowers to discuss the reason for missing a payment and to evaluate reinstatement options," FHA Commissioner David Stevens said in a prepared statement. "Now servicers will have additional options for those borrowers who seek help before they go delinquent, which increases the likelihood that the borrower will be able to retain their home."

Harder to get Uncle Sam mortgage

The workouts available include forbearance, in which lenders agree to postpone or reduce payments for a specified period. This does not actually forgive the payments, they are just added to balance later in the mortgage term. In more severe cases, borrowers may qualify for permanent payment reductions. This may be done by increasing the length of the loan, reducing the interest rate or even forgiving principal.

Buyers Ready to Resume Buying Homes

2010-01-24T22:11:00.000-06:00

After a dismal two years in the real estate market, buyers are starting to come around. Realizing that interest rates are determined to go up in 2010 and prices will not stay low much longer are prompting buyers to reconsider buying a home in 2010.

Why Not? Reason is, home prices can only go up from here, if you do not have to sell, you will not drop your price from now on. Only desperate people are dropping prices or sellers who need to sell that 2nd home that has been sitting on the market for too long.

So if you can afford to buy that upgrade home, do it in 2010, for if you don't you will miss an opportunity of a lifetime. People who are waiting for the bottom, have already missed it!

Mortgage Workouts, Now Tax-Free for Many Homeowners; Claim Relief on Newly-Revised IRS Form

2010-01-12T20:08:00.000-06:00

IR-2008-17, Feb. 12, 2008

WASHINGTON — Homeowners whose mortgage debt was partly or entirely forgiven during 2007 may be able to claim special tax relief by filling out newly-revised Form 982 and attaching it to their 2007 federal income tax return, according to the Internal Revenue Service.

Normally, debt forgiveness results in taxable income. But under the Mortgage Forgiveness Debt Relief Act of 2007, enacted Dec. 20, taxpayers may exclude debt forgiven on their principal residence if the balance of their loan was $2 million or less. The limit is $1 million for a married person filing a separate return. Details are on Form 982 and its instructions, available now on this Web site.

“The new law contains important provisions for struggling homeowners,” said Acting IRS Commissioner Linda Stiff. “We urge people with mortgage problems to take full advantage of the valuable tax relief available.” The late-December enactment means that reporting procedures for this law change were not incorporated into tax-preparation software or IRS forms. For that reason, people using tax software should check with their provider for updates that include the revised Form 982. Similarly, the IRS is now updating its systems and expects to begin accepting electronically-filed returns that include Form 982 by March 3. The paper Form 982 is now being accepted, but the IRS reminds affected taxpayers to consider filing electronically, which greatly reduces errors and speeds refunds.

The new law applies to debt forgiven in 2007, 2008 or 2009. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, may qualify for this relief. In most cases, eligible homeowners only need to fill out a few lines on Form 982 (specifically, lines 1e, 2 and 10b).

The debt must have been used to buy, build or substantially improve the taxpayer's principal residence and must have been secured by that residence. Debt used to refinance qualifying debt is also eligible for the exclusion, but only up to the amount of the old mortgage principal, just before the refinancing.

Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the new tax-relief provision. In some cases, however, other kinds of tax relief, based on insolvency, for example, may be available. See Form 982 for details.

Borrowers whose debt is reduced or eliminated receive a year-end statement (Form 1099-C) from their lender. For debt cancelled in 2007, the lender was required to provide this form to the borrower by Jan. 31, 2008. By law, this form must show the amount of debt forgiven and the fair market value of any property given up through foreclosure.

The IRS urges borrowers to check the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. Borrowers should pay particular attention to the amount of debt forgiven (Box 2) and the value listed for their home ( Box 7).

Note: Legislation enacted in October 2008 extended this relief through 2012. Thus this relief now applies to debt forgiven in calendar years 2007 through 2012.

Rates on 30-year Home Loans Fall to 5.09%

2010-01-10T19:30:00.000-06:00

WASHINGTON—Rates for 30-year home loans inched downward this week, the first decline in a month, but remained above last month’s record lows. The average rate on a 30-year fixed mortgage was 5.09 percent this week, down from 5.14 percent a week earlier, mortgage company Freddie Mac said Thursday.

Rates dropped to a record low of 4.71 percent in early December, pushed down by an aggressive government campaign to reduce consumers’ borrowing costs, but then rose steadily for the rest of the month. Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, often in line with long-term Treasury bonds.

The Federal Reserve is pumping $1.25 trillion into mortgage-backed securities to try to bring down mortgage rates, but that money is set to run out next spring. The goal of the program is to make home buying more affordable and prop up the housing market. The central bank’s policymakers have been conflicted about whether to expand or cut back a program intended to drive down mortgage rates and bolster the housing market, according to meeting minutes released Wednesday. Some Fed policymakers argued that the program might need to be expanded and extended beyond its current end date of March 31, arguing that the additional dose of stimulus would be especially needed if the economic recovery were to weaken.

Getting the housing market back on firm footing is a key ingredient to a lasting recovery. The collapse of the housing market, which dragged down home prices with it, was the catalyst for the longest and worst recession to hit the country since the 1930s.

The average rate on a 15-year fixed-rate mortgage fell to 4.5 percent, down from 4.54 percent last week, according to Freddie Mac. Rates on five-year, adjustable-rate mortgages averaged 4.44 percent, unchanged from a week earlier. Rates on one-year, adjustable-rate mortgages fell to 4.31 percent from 4.33 percent.

$6,500 tax credit concerns, Must current home be sold to qualify?

2010-01-08T19:17:00.000-06:00

Question: My wife and I are considering a move to Arizona. As we have lived in our current townhome for six years, I am sure we would be eligible for the homebuyer credit of $6,500. What I cannot find is any reference about if and when we must sell our current home. Can we buy a replacement home by the cutoff date of April 30, 2010, then sell our current residence later in the year? Or if we make the new house our principal residence, are we required to sell our current residence at all?

Answer: According to the Internal Revenue Service, you do not have to sell your current house -- which must have been owned and used as a principal or primary residence for at least five consecutive years of the eight-year period ending on the date of purchase of a new home as a primary residence -- in order to take advantage of the new $6,500 tax credit for repeat homebuyers so long as the new house becomes your primary house.

There are, however, some additional limitations. While you do not have to purchase a home that is more expensive than your current home to qualify for the credit, if your new home costs more than $800,000, you are not eligible for that credit.

There are also income limitations. For single taxpayers, you cannot make more than $125,000 annually; for married folks, you cannot earn more than $225,000 if you file a joint tax return. There is a phase-out until your income reaches $145,000 for a single taxpayer or $245,000 for joint tax filers. This means that the credit is reduced proportionately until you reach the ceiling cap.

You cannot purchase the new home from family members, which includes parents, grandparents or children.

And finally, the purchase must take place by April 30, 2010. However, if you have entered into a binding contract before that date, you must settle (go to escrow) by June 30, 2010, or you will lose this credit.

I suggest you consult your own tax advisors for specific advice.

Buyer Motivation Highest in Years

2010-01-08T09:23:00.001-06:00

According to a survey by Move.com, 12.1 percent of homebuyers intend to purchase an investment property this year, compared to only 5.6 percent of buyers polled in April.

The percentage of investors shopping for property also jumps higher when it comes to foreclosed property. 42 percent of foreclosure buyers are purchasing for an investment. 57.6 percent of foreclosure shoppers plan to live in the home they buy.

The survey also shows that 23.6 percent of investors and buyers believe that home prices are already as low as they will go. Nearly 20 percent feel a sense of urgency when searching for a bargain.

Another factor motivating home buyer’s off the sidelines is the real threat of rising interest rates. Wall Street guru’s, who agree on very little, warn that lending rates will rise in the near future. With real estate prices at their lowest levels, buyers risk much more in waiting to purchase, than they do by locking in record low rates on their loan.

Prediction: We believe the leading indicator of an interest rate hike will be falling unemployment claims. When unemployment claim filings fall below 500,000 per month, a rate hike is likely!