The Home Equity Conversion Mortgage (HECM) is a new FHA insured reverse mortgage that can benefit Toledo, Ohio area seniors wanting to downsize into a more suitable retirement home by allowing them to purchase a new home with a reverse mortgage in one closing transaction and have no monthly mortgage payments. The program is a little hard to understand though.  Let me list the features...

• A homeowner would sell an existing home and put part of those proceeds into a new home combined with 1/3 to 1/2 the cost of the new home from the HECM Reverse Mortgage.  Or pay for the new home outright and receive monthly payments like how the older reverse mortgage program worked.
• The homeowner can live in the home until they pass away, move or sell the home.  Then, the reverse mortgage is repaid and it would not be more than the sale value of the home. 
• If a home would eventually sell for more than the amount of the reverse mortgage, fees and accrued interest, the balance stays with the seller or estate.
• People need to be 62 years of age to qualify, but no income or credit score restrictions apply.
• HUD financial counseling is required to make sure people understand this type of loan and understand if this is their best financial option.

Please give me a call at 419-654-0059 if you'd like more information on the HECM and a referral to a local lender working with this program.

 

 

 

The new repeat buyer tax form is ready to be used Toledo area homeowners to claim up to a $6,500 Federal Tax Credit.  Find the Form 5405 at www.irs.com.  It is important to understand just who can take advantage of this repeat buyer credit...

• Homeowners buying a new home who have lived in their current home for 5 consecutive years out of the past 8 years.  This helps people who sold and have had to rent temporarily while they search for a new home.
• The homes must be closed on by June 30th, but be in contract by April 30th.  If you are in the military,intelligence or diplomatic service, you get an extension of a year on these dates.
• Income and home price limits do apply.  Check the IRS site for more specifics on these.
• Save your HUD or Settlement form from the closing which you'll need to submit along with good proof of how long you lived in your previous home.  Probably the easiest records to submit are insurance and property tax records.
• Sell that new house or turn it into a rental before you've owned it for 3 years and you'll have the government come asking for the credit money back.

 

 

 

 

Here are some of the trends and developments that may impact on your home ownership in 2010.

• Mortgage interest rates may start to creep up now that the Federal Reserve Program that was helping to keep rates low by buying up the packages of mortgages sold as securities just like stocks and bonds is ending.  But to off set that, we're hearing lots of buzz about the Home Buyer Tax Credits being extended again after April in a  plan that would phase out over a year.  Now is still a good time to buy a first or second home in the greater Toledo area with rates hovering around 5% and homes at rock bottom prices.
• People in trouble paying their mortgage payments just can't win.  Even applying for a loan modification will cause their credit scores to drop dramatically.  And being in the government's trial loan modification program will cause at least a 100 point or more drop that can stay on their credit for 7 years.
• Interested in buying a home that needs a lot of work?  FHA has a great streamlined single mortgage loan that lets buyers purchase a distressed home and borrow the money to make repairs and improvements.  The FHA 203K loan allows a mortgage up to market value if the home was in top condition.  Both Lowes and Home Depot will send their building and remodeling specialists out to give firm bids on the costs of a new kitchen, plumbing or whatever is needed.  Their service makes the remodeling process so much easier than hunting down contractors yourself.  Not all lenders work with this program, but I can be a source of Toledo area lenders who do.  Click here for more information on this plan.
•  It's tax time again!  Try this IRS link for information on saving money on your property tax...Real Estate Tax Center.

 

 

I keep my eyes open for any news of possible job creation in the Toledo area and was happy to read an article in the 11/10/09 Toledo Blade about a major research company considering locating here.  The article Research giant eyes area site buried in the Business section reported on the efforts by UT and the Regional Growth Partnership to bring this California company SRI International which is a non-profit scientific research institute to the area.  SRI developed the computer mouse and robotic surgery and have 20 research locations throughout the world.  The initial talks are about about locating a teaching-research-business facility on the Scott Park campus that would focus on solar power and other alternative energy development and likely bring venture capital into the area.  Two big pluses in our attracting this company are the experience that Steve Weathers, president and CEO of the Regional Growth Partnership, has in prior work with SRI and the reputation the Toledo area has been building in photovoltaic and solar panel production.  These would be well paying jobs in an area that needs to and is trying to re-invent itself.

Poor homeowners have seen their home values drop from 24% to 35% since the high market values in 2005.  But, we've had a few indicators In the Toledo area that the real estate market may have hit bottom and be starting to improve.   More homes sold in August and September this year than did in those months in 2008.  And substantially fewer were on the market in August and September this year than last year.  The average sold price of homes in the Toledo area also increased by $2,000 to $108,000 in September from $106,000 in August.  A number of local and national factors have impacted this trend...

• Most of the sub prime foreclosed homes have been worked through the market and those were often lower priced homes to begin with.  The homes largely being foreclosed on now have had conforming loans (the kind that Fannie Mae and Freddie Mac will back and buy up) which should increase the average sale price.
• The President's Making Homes Affordable Loan Modification Program has kept many families in their homes by encouraging mortgage holders to rework loan terms for people in default and at risk of foreclosure.
• The First Time Buyer's Tax Credit has helped locally to reduce the number of homes for sale.

The Federal Reserve plans to keep interest rates low and to buy up mortgage backed securities to support the housing market until the real estate market starts to improve on a national scale.  When the Federal Reserve starts to loosen on these efforts, it is likely that interest rates will begin to climb.  If this happens, more people will decide now in time to buy and maybe more sellers will feel it is time to put their homes on the market.  I think we're still in for a slow return to healthy market values.

Every year the Ohio Magazine names four Ohio towns as Ohio's Best Hometowns to live and work in.  And Sylvania, Ohio was one to earn that honor for 2010 after a competitive application process spearheaded by Pat Nowak, the Sylvania Chamber of Commerce's Executive Director.  She wrote a number of essays highlighting quality of work and life issues in the community dealing with the economy, recreation, entertainment, schools and safety as well as submitted story board to graphically represent Sylvania.  Then, Ohio Magazine made a secret visit to see for themselves how Sylvania stacked up with the pictures and essays.  You might recall that Perrysburg, Ohio was chosen as one of the Best Hometowns by Ohio Magazine last year.  Pick up the November issue of Ohio Magazine to read the Best Hometowns article.  You might want to subscribe to this magazine to get great ideas for long weekend vacations.

2670 Merrimac Blvd. Toledo, Ohio 43606

Nice light & bright 3 bedroom Garrison Colonial in the Old Orchard Elementary school area.  The house feature 1544 sf of living space with a full bath upstairs and a half bath on the main floor, 1st floor family room, dining room , large eat-in kitchen, Rec room in the basement, and a deck outside the family room.  The new windows have a fully transferable lifetime warranty.  All kitchen and laundry appliances  & 2 window A/C units are included.  This home is conveniently located in an established neighborhood close to Ottawa Park, UT, the Toledo Hospital, Westgate shopping,  and just 10 minutes to downtown Toledo. 

Click here for more information and interior pictures.

 

Time is running out for Lucas and Wood County, Ohio residents to take advantage of the American Recovery and Reinvestment Act's $8,000 First -Time Home Buyer Credit.  To recap how this  works, the credit is equal to 10 percent of the purchase price of the home up to $8,000. The homebuyer must not have owned a home during the prior three years. The credit is refundable, which means the government gives the balance to buyers who meet the qualifications, even if their federal income tax liability is less.  But to receive this credit, homes must be closed on by November 31, 2009.  It generally takes 45-60 days to close on a home so now is the time to get busy and house hunt if you or someone you know might be eligible for this tax credit.

Will it be continued?  Probably not. There has been criticism in the media that this has been an unfair benefit to new buyers while sellers continue to see their home values eroded.  The intention has been to kick-start home sales again and it has helped to push us toward stabilizing the market.  The National Association of Realtors recently reported that home sales have increased in most of the nation in the 2nd quarter of 2009.  We're definitely seeing an uptick in sales in the area.

Pass this information on to anyone it may help.  I continue to be surprised at how many new buyers are not aware of this credit.