Thursday, December 30, 2010

Where are interest rates heading?

Michele Lerner, author of Homebuying: Tough Times, First Time, Any Time, says:

▪ 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.

Take a Peek at What Nearby Towns Are Doing - Maplewood, NJ Patch

Take a Peek at What Nearby Towns Are Doing - Maplewood, NJ Patch

If you are going to buy a home with a mortgage, you shoud read this!

Questions You SHOULD Be Asking Your Lender

by Dean Hartman on December 30, 2010 · 0 comments
We have run this post before but want to make sure you still are asking the right questions of your loan officer. Here is a great list from Dean.  – The KCM Crew
More and more, consumers are learning that there is much more to getting a mortgage than just the interest rate and points.  A good mortgage planner is more in the advice business than the lowest price business.  With tightening guidelines, often the question first is “Will the loan be approved?”  But moreover, the borrowers’ concerns need to involve some of the answers to these non-price questions:

1. What type of lender should I use? 

There are three basic types of lenders.  Mortgage BROKERS promote a broad product menu, competitive pricing, and entrepreneurial approach; however, BROKERS cannot lock, commit, or approve your loan because they are not actual lenders.  Banks and Credit Unions rely on financial strength, direct lending capabilities, and stability; however, the have limited product menus and often a “cover my ass” mentality.  Mortgage BANKERS blend the best of both- direct lending ability, financial strength and stability, wide product offerings, competitive pricing and the entrepreneurial spirit.

2. What loan products should I be considering? 

Make sure your lender has multiple types of products (Conventional, FHA, VA, State Mortgage Agency Products, etc.).  While most people today do choose a 30 year fixed, it is not always the wisest choice.  Borrowers need to consider how long they will be staying in the home and any changes in their income during that time period before just accepting the same loan as everyone else.  Additionally, with many properties in need of some renovations or repairs, you need to explore the FHA 203K Program discussed in last week’s blog.

3. Should I lock or float my interest rate? 

Most mortgage planners are trained to dodge this question.  I believe you should be hiring an expert who should have an informed opinion about the direction of rates….in the short term and the long term.  Weighing numerous factors ranging from your projected closing date to upcoming economic reports, a good mortgage planner can counsel a client into saving money.  While no one can predict with absolute certainty, you need to reach a comfort level that the lender you choose has the best information and your best interest at heart.

4. What are mortgage rates based on? 

There is only one correct answer.  It is the pricing of Mortgage Backed Securities.  (Unfortunately, too many people answer the 10-year Treasury Bill.)  If you get the wrong answer on this basic question, what else don’t they know?

5. How do economic releases impact rates? 

How will a Jobs Report, a Fed Board Meeting or Inflation Number affect your home loan?  Your mortgage planner should know, should explain it to you, and keep you informed.

6. Can I improve my chances of approval while keeping costs low? 

Sometimes even minor improvements in a credit score, the amount of your down payment, or how you position your assets can make a big difference.  During your counseling sessions, your mortgage planner should be advising you on how the “little things can make a big difference’”
Good advice, whether it’s from your doctor, lawyer, real estate agent or lender, can be invaluable.  Finding a lender who is an expert….who has your goals in mind…and who offers creative solutions is one of the most important factors in a successful real estate transaction.

Wednesday, December 29, 2010

First Night 2011 Aims to Be the Best Night in Maplewood/South Orange

First Night Aims to Be the Best Night

The family-friendly New Year's Eve celebration is moving to South Orange Middle School this year — with fireworks at Floods Hill.
First Night Maplewood/South Orange may be hitting its 18th year, but it's still a child at heart.
The family-friendly Near Year's celebration which runs from 4:30 p.m. to 11:00 p.m. on December 31, is bursting with the stuff of children's dreams. Organizer Connie Cosgrove promised us "storytelling, crafts, magician, puppet theater, a crazy chemistry show, a ventriloquist, hip hop, a subway musician, and the best balloon sculptor ever! Oh, and fireworks at 6:30 p.m."
Now, this year the venue has moved to the South Orange Middle School, 700 Ridgewood Road, South Orange. But you've got to move outside to Floods Hill for the fireworks (something about fire codes....).
The "ticket" for this event is a wristband that works for one-time use. Wristbands will be available at the door for $15, or at select locations in Maplewood and South Orange (Kings Super Market; Kari's Cafe; Maplewood Library, Main and Hilton Branches; South Orange Library; Rocketship and Print; Cold Stone Creamery; and The Baird) for $10. You can purchase online using credit cards or PayPal before 3 p.m. Friday for $11 each. Children under three get in free.
But remember not to let the kids play with the wristbands ahead of time. Says Cosgrove, "These wristbands are for one-time use. You have to cut them off, so please don't let your little ones put theirs on before the night of the event!"
Volunteers are stilll needed (hey, volunteers get in free!) to help host entertainers, help out with craftmaking, origami, food service and decorations. Call Mary Hayes at 973-76-FIRST (973-763-4778) to volunteer. Afternoon and evening times available.
Visit the website to view or download the event schedule or print the pdf schedule attached here. Performers and activities include:
Two short plays from Parallel Lives — Emily Tully, Gillian Holmes, directed by Brandon Monokian. From the Montclair University Drama Department. 7:00-7:30 & 8:30-9:00 in the Library.
Lisa Lou's Circus Workshop — 50 children per session, please – with parents. 4:30-5:00 & 6:00-6:30 in Gym A.
The Great Scott Magic Show — 4:45-5:30 & 8:00-8:45 in the Auditorium.
Catskill Puppet Theater — the story of Hiawatha. Includes a behind-the-scenes peek at how the puppets work. 5:00-5:45 & 7:00-7:45 in the Band Room.
Rochel Garner Coleman, storyteller: I, Nat Love, aka Deadwood Dick. Interactive! Ask him questions! 5:45-6:15, 7:45-8:15 & 9:15-9:45 in the Library.
Crazy Chemistry with Lisa Lou 5:15-5:45 & 7:15-7:45 in Gym A.
Doug the Amazing balloon sculptor — 5:30-9:30 in the first floor main hallway.
Illstyle & Peace Dance Company — Dance from the 60's to Hip-Hop. 7:00-7:30 & 9:00-9:30 in the Auditorium.
New Day Dawn & The Stuff Brothers Band — 7:00-10:00 in the Cafeteria.
James Graseck & Luellen Abdoo, the subway violinist & friend — 7:15-7:45 & 8:45-9:15 in the Music Room.
Blue Life Karate — 5:45-6:15 & 7:45-8:15 in Gym B.
Beads 'n' Lisa — 5:30-8:30 in room 238.
Comedy Ventriloquist Pete Michaels — 8:15-8:45 & 9:45-10:15 in the Little Theater.
Face-painting — 5:00-9:00 in the hallway outside the Library (second floor).
Glitter Tattoos by Parteaz LLC — 5:00-9:00 in Room 236, 2nd floor.
Origami with Mary Kao — Watch her on YouTube! 7:00-9:30 in classroom 118.
Sue Kie's trick-roping Wild West Show (yee-haw!) — 7:00-7:30, 8:30-9:00 & 9:30-10:00 in Gym B.
David Glukh Enterprises: Brass Ensemble — 7:00-7:30, 8:30-9:00 & 10:00-10:30 in the Little Theater.
Classical harpist Merynda Adams — 8:00-8:30 & 9:30-10:00 in the Music Room.
Simple Gifts folk & international music sung and played on unique instruments — 8:30-9:00, 9:15-9:45, 10:00-10:30 in the Band Room.
Scooby-Doo & Elmo — All evening long, wherever you can find them.

A time to buy; 2011 marks the year for positive change!

Posted: 29 Dec 2010 04:00 AM PST
For almost a decade now, every time we talked about real estate we immediately discussed money. We didn’t talk about the value of a home but instead about the price of the house. We didn’t worry about a roof over our heads but instead the ceiling on our interest rate. We didn’t care as much about where we raised our family as we cared about how much we increased our family’s net worth.
That will change in 2011. The KCM Crew believes very strongly that real estate will return to what it has been for the 200+ year history of this country: a place for us and our families to live comfortably. It will also prove to be a great long term investment as it always has been.
Our parents and our grandparents didn’t buy their homes as a short term financial investment. They bought it so they had a place of their own to come home to at the end of the day; a place to raise their family; a place they could feel safe.
Sure they dreamed of a ‘mortgage-burning’ party. They realized it was a form of forced savings. They were taught that, if they paid their mortgage every month, they would wind up with a little retirement account decades later.
And, they realized that wouldn’t happen if they rented.
However, in the last decade, we somehow forgot that the financial aspect was the serendipity not the major reason to buy. We believe that 2011 will be the year that people return to the historic reasons families purchased a home. This is the year when we again remember that homeownership is a major part of the American Dream.
What about the challenges to a housing recovery? Let’s look at them.

The Economy

Most reports are showing that the economy is doing better than expected. This shopping season provided additional proof of this point. As the economy recovers, so will consumer confidence. This will be great news for housing.


There is much talk about a ‘jobless recovery’. We agree that unemployment will continue to be a challenge. However, when you talk about housing, it is not the unemployment rate that is all telling. Instead, it is the change in the rate. As unemployment skyrocketed, people started to worry about their own job. Any change creates concern. Unabated concern turns to fear. Fear causes paralysis. The spike in unemployment has plateaued. People no longer have the felling that ‘they are next’. The fear will diminish and people will start moving on with their lives. This too will be great news for housing.

Interest Rates

It seems the bottomless pit in which rates have been falling does have a floor after all. And it seems we have found it. Those purchasers who had been waiting for the best interest rate may have already missed it.


Economists are projecting that prices will not see any appreciation in 2011. Sellers who had been waiting for 2006 to return will come to the realization that waiting any longer makes little sense. They will instead decide to get on with their lives and sell this year.
Prices probably will soften further. However, the possible savings to potential buyers will be minimized by a rise in interest rates.

Bottom Line

This is the year that normalcy returns to real estate. People will buy and sell based on the desire for a better life for themselves and their families. They will realize that is the true value of homeownership and they will be willing to pay for that value.

Tuesday, December 28, 2010

Home Sales Hold Their Ground-Are we about to turn the corner?

Home Sales Hold Their Ground
According to Jeffrey Otteau, home sales have continued to run below last year's pace since the expiration of the homebuyer tax credits last April.  However, a pattern of stability is beginning to emerge.  Following an average 27% decline in home purchase activity--rate of sales--from May through October, sales were off by only 10% in November from year ago levels.  Also noteworthy is that the November sales pace was actually 20% higher than 2 years ago. Admittedly, November 2008 was among the 'deepest & darkest' days for the housing market and overall economy following the Lehman Brothers bankruptcy on September 15, 2008.  But these recent trends suggest that the housing market is beginning to regain some traction heading into 2011.

Big Dog Little Dog vs the Snow Dawg


Twitter / Home

Twitter / Home

mortgage rates dropping back a bit as of 12/27

30 Yr FRM
15 Yr FRM
FHA 30 Year
Jumbo 30 Year
5/1 Yr ARM

Mr. (Yogi) Bear and Dr Doom: do as i say not what i do!

Posted: 27 Dec 2010 04:00 AM PST
Trying to negotiate the current housing market is difficult. There are so many external variables impacting real estate it seems almost impossible to project where sales and prices are headed. But, there were two people who saw the challenges we are currently experiencing back in 2005-2006. They looked at the market and predicted we were in for the collapse that occurred. Who are these men? How do they see real estate today? What are they doing to take advantage of the current market?

Dr. Doom

Nouriel Roubini is a teacher at New York University. He warned that borrowers defaulting on their mortgage loans would unleash a housing bust and deep recession.
According to the Wall Street Journal Roubini is:
…the New York economist whose warnings of a housing collapse earned him the nickname “Dr. Doom” … Ever since much of his dire forecasting came true, Mr. Roubini has become one of the world’s most recognizable economists. He has been in demand as a speaker and consultant, often shuttling around the globe to advise central bankers and finance ministers.

Mr. Bear

John Paulson is the person who made a fortune betting that the subprime mortgage mess would cause the real estate market to collapse. He understands how the housing market works and knows when to buy and when to sell. What do others think of Paulson?
According to Forbes John Paulson is:
…a multibillionaire hedge fund operator and the investment genius who made a killing going short subprime mortgages a few years ago. 

Why discuss these gentlemen today?

The interesting thing is that both these gurus just purchased real estate in New York. The Wall Street Journal reports Roubini:
just plunked down $5.5 million for an East Village penthouse loft, public records show … Real-estate people in New York were quick to seize on his purchase as a healthy sign for the local property market.
“Even the most bearish think our market has nowhere to go but up,” said Frederick Peters, president of Warburg Realty Partners.
“Dr. Doom is a little late to catch the bottom, but there’s still plenty of upside at this point.”
Paulson also just closed on a multi-million dollar home:
Mr. Paulson purchased a two-bedroom apartment at Olympic Tower, a luxury condominium on Fifth Avenue across the street from St. Patrick’s Cathedral and Rockefeller Center, for $2.85 million, according to public records. The 51-story building was developed by Aristotle Onassis and is popular with part-time residents from abroad.

Bottom Line

It seems that Mr. Bear and Dr. Doom are looking at the real estate market quite differently right now. Does that mean the market is at its bottom and about to turn for the better? Mr. Paulson recently put it this way:
“If you don’t own a home, buy one. If you own one home, buy another one. And if you own two homes, buy a third and lend your relatives the money to buy one.”

Friday, December 24, 2010

Wishing you all a very Happy Year of the Rabbit, 2011


02/03/2011 - 01/22/2012 (Metal)
According to the Chinese Zodiac, the Year of 2011 is the Year of the Rabbit, which begins on February 3, 2011 and ends on January 22, 2012.  The Rabbit is the fourth sign of the Chinese Zodiac, which consists of 12 animals signs.  The Rabbit is a lucky sign.  Rabbits are private individuals and a bit introverted.  People born in the Year of the Rabbit are reasonably friendly individuals who enjoy the company of a group of good friends.  They are good teachers, counselors and communicators, but also need their own space.
According to Chinese tradition, the Rabbit brings a year in which you can catch your breath and calm your nerves.  It is a time for negotiation.  Don't try to force issues, because if you do you will ultimately fail.  To gain the greatest benefits from this time, focus on home, family, security, diplomacy, and your relationships with women and children.   Make it a goal to create a safe, peaceful lifestyle, so you will be able to calmly deal with any problem that may arise.