Home Prices Closing In On All-Time Highs

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Home prices are nipping at the heels of all-time highs set in 2006, according to the latest data from S&P Dow Jones Indices.

The S&P CoreLogic Case-Shiller US National Home Price NSA Index saw a 5.3% gain in August, according to S&P. The index is currently sitting at 184.42 – just 0.1% below its record 2006 high of 184.62.

Case-Shiller’s 10-city index saw a 4.3% increase year over year, while its 20-city index saw a 5.1% increase.

“Supported by continued moderate economic growth, home prices extended recent gains,” said David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “All 20 cities saw prices higher than a year earlier with 10 enjoying larger annual gains than last month. The seasonally adjusted month-over-month data showed that home prices in 14 cities were higher in August than in July.

“With the national home price index almost surpassing the peak set 10 years ago, one question is how the housing recovery compares with the stock market recovery,” Blitzer added. “Since the last recession ended in PRESS RELEASE c G R June 2009, the stock market as measured by the S&P 500 rose 136% to the end of August while home prices are up 23%. However, home prices did not reach bottom until February 2012, almost three years later. Using the 2012 date as the starting point, home prices are up 38% compared to 59% for stocks. While the stock market recovery has been greater than the rebound in home prices, the value of Americans’ homes at about $22.3 trillion is slightly larger than the value of stocks and mutual funds at $21.2 trillion.”

Source: Ryan Smith –  Mortgage Professional America, 10/26/2016

Student Loans: Debt, Repayment & Default

Mortar Boards show amount of student debt for each graduate

The cost of higher education continues to rise. In the United States and Canada borrowers owe more than 1.2 trillion dollars in student loan debt. More than 7 million borrowers are in default. It is important for students and potential co-borrowers to understand the various types of loans, as well as the resources available during repayment

Loans

Subsidized loans are awarded to students based on their financial need. While the student is in school the federal government pays any interest on the loan. Therefore, subsidized loans do not gain any interest before the student enters repayment. This will save the borrower a great deal of money over the course of repayment.

Unsubsidized loans begin accruing interest when the loan money is first disbursed. If this interest goes unpaid, it will be added to the loan’s principal. This means the borrower will pay interest on the principal of the loan, as well as any interest that has already been added to the balance of the loan. This will cost the borrower a lot of money in additional interest over time.

Credit Cards have become readily available and widely used by college students in recent years. The interest rates on credit cards are generally higher than those on both subsidized and unsubsidized student loans. In addition, borrowers must make monthly payments. Failure to make payments on credit cards can lead to a poor credit score and can affect an individual’s ability to obtain further credit or even find a job.

Repayment Grace Periods are offered by many student loans before repayment begins. Make sure you know the grace period duration for your loans so you are prepared when payments become due.

Discounts may be available for borrowers who set up auto-payment for their account.  Many lenders also offer reduced interest rates for borrowers who make timely payments.

Consolidation may benefit some borrowers. Consolidating loans with one lender allows the borrower to make one monthly payment. It may also be possible to lock in a lower interest rate with a consolidated loan. Borrowers should beware, since consolidating student loans may exempt them from some beneficial repayment programs.

Default, the failure to make payment on student loans, may have serious consequences. If you default on your loan, your remaining balance and interest may become due in full and you may lose access to modified repayment plans. Also, additional fees and penalties may be added to your loan, your credit score and history may be damaged, your wages may be garnished and your tax refunds may be withheld. Your lender will also seek to collect, using all of the above methods, from your co-borrower.

Avoid default by contacting your lender if you are unable to make your scheduled loan payments. It may be possible to alter your payment due date or the structure of your repayment plan to better accommodate your budget. If you are experiencing financial hardship, you may be eligible for deferment or forbearance.

As a Mortgage and Reverse Mortgage expert with almost 11 years in the industry I pride myself on being a true consultant to guide and educate homeowners accordingly. I provide straight forward and easy to understand information to help my clients make informed decision on the best option for them.

Please contact me if you have any questions about a reverse mortgage or mortgages in general. I am licensed in NJ, NY, CT, PA and FL and would be happy to assist you or anyone you know.

Marc C. Demetriou, CLU, ChFC Branch Manager/Mortgage Consultant
Residential Home Funding Corp. 39 Main Street | Bloomingdale, NJ 07403
NLMS#111118 | Company NLMS #34973

Marc Demetriou’s Seven Real Estate Predictions for 2017

 

In the new year, home price growth will hold steady and homes will sell even faster than they have this year, making 2017 the fastest real estate market on record, according to Redfin.

“Next year, the new administration will lead a shifting U.S. economy,” said Redfin chief economist Nela Richardson. “Baby boomers will become less economically relevant as millennials continue to come of home-buying age. Superstar cities will create much of the job growth, pushing wages in those cities up. Yet the percentage of homes in America’s largest cities that are affordable on the median income has declined the past two years and will continue to fall in 2017. Sales would be even stronger if there were more starter homes on the market to meet demand from millennial homebuyers. We expect to see more homes built in second-tier cities and more millennial homebuyers moving from the coasts to smaller and inland markets where they can find affordable starter homes.”

Redfin’s Seven Housing Predictions for 2017:

1. The housing market will continue to grow, but at a slower pace due to affordability pressures. The percentage of homes in America’s largest cities that are affordable on a median income has declined the past four years and will continue to fall in 2017. Even with rising affordability pressures, Redfin predicts:
• Median home sale prices will increase 5.3 percent year over year, similar to the estimated 5.5 percent this year.
• Existing homes sales are forecasted to increase 2.8 percent in 2017, compared to the estimated 3.4 percent increase in 2016.
• Inventory will recover slightly, up 1.7 percent year over year, after falling an estimated 3.4 percent in 2016.

2. 2017 will be the fastest real estate market on record. In 2016, the typical home stayed on the market just 52 days, the shortest time recorded since 2009. Redfin anticipates 2017 will be even faster because of increasing demand for short-notice home tours and the development of new technologies to make the entire real estate transaction more efficient.

3. New construction growth will slow. Given that nearly one in four construction workers is foreign-born, stricter immigration policies are likely to make the labor-shortage problem even worse, slowing new-construction growth to 6 percent in 2017 if these policy changes go into effect next year. This will most affect the availability of affordable starter homes, which means higher prices for first-time buyers.

4. Mortgage rates will increase, but not by much. Redfin expects the 30-year fixed mortgage rate to climb, but no higher than 4.3 percent in 2017. Wall Street’s optimism for economic growth and inflation in 2017 is expected to keep mortgage rates low.

5. More people will have access to home loans. Fannie and Freddie are increasing the size of loans they’ll back, while large financial institutions have introduced mortgages requiring as little as 1 percent to 3 percent down. The Trump Administration’s plans to privatize Fannie and Freddie likely won’t take effect until at least 2018.

6. Millennials will move to second-tier cities. Markets able to offer buyers new construction at affordable prices will take center stage in 2017, since many first-time homebuyers have been priced out of the starter-home market in more expensive metropolises. Redfin analysts expect cities like Raleigh, North Carolina, Austin, Texas, and North Port, Florida, which lead the country in the number of new residential building permits per 1,000 people, to lead this trend.

7. Real estate commissions will continue to fall. A 2016 Redfin study found that most people who had sold a home in the past year got a discount on the commission they paid to their broker, and so did almost half of buyers. Redfin projects that as a growing number of disruptive companies offer new, money-saving ways to buy and sell homes, even more consumers will save on real estate fees in 2017.

– Originally published by the Collingwood Group – 12/14/16

Important Information Regarding Six Types of Identity Theft

Think Identity Theft is limited
to someone using your Credit Card?

Take a closer look. . .

Six Types of Identity Theft

 

 

1. DEPARTMENT OF MOTOR VEHICLES
An identity thief could obtain your driver’s license and accumulate traffic tickets in your name.  They could get a DUI with your identity and not show up in court leaving you guilty and liable.

2. SOCIAL SECURITY
An identity thief could use your Social Security Number for employment purposes and you wouldn’t know it until the IRS contacts you for their unpaid taxes.  There are 11 million illegal aliens in the US today.  They can buy names and SSN’s.  A thief can open a credit account or utilities, purchase a home, or start a business with your SSN without your knowledge or approval.

3. MEDICAL INFORMATION BUREAU
This area of ID Theft is growing rapidly as more people are losing or are unable to afford health insurance.  An identity thief could use your personal information to obtain prescriptions or medical help which may reduce your available benefits.  A thief could get an AIDS test and the results would go on your record.  Your blood type could be changed without your knowledge, which could be life threatening in an emergency.

4. CRIMINAL IDENTITY THEFT
An identity thief could use your information to escape fines or jail time.  You could find that you have a criminal record for bad checks, shoplifting, pornography or prostitution which could lead to time in jail or wrongful conviction.

5. FINANCIAL IDENTITY THEFT
An identity thief could use your information to obtain money, goods or services leaving you with the bill.  They could use your Debit Card and access your bank account, purchase a cell phone or lease a car in your name and not make payments, therefore, ruining your good name and credit.

6. SYNTHETIC IDENTITY THEFT
An identity thief uses a social security number, medical records, motor vehicle records, address, and other non-public information of different people to create a synthetic identity, which in turn can adversely affect all parties being victimized.
“Identity theft is an undesirable situation in which you can become both a victim and a criminal at the same time without even being aware of it.”

Marc Demetriou – Accomplishments

*Ranked as one of “The 25 Most Connected Mortgage Professionals in theUSA” by National Mortgage Professional Magazine-July 2013

*Ranked 298th in USA and 16th in NJ for Personal Production-Closed Mortgage Loan Volume of $76million in 2012 by Scotsman Guide. Ranking is among all banks, mortgage bankers and mortgage brokers. Also, ranked in the Top 1% of Loan Originators in USA based on Personal Production-Closed Loan Volume by Mortgage Executive Magazine and Origination News.
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