Equity is the difference between how much your Bennington, Vermont real estate is worth and how much you owe on that property. So if your property is currently appraised at $200,000, and you still owe $60,000, the property’s equity is $140,000.

A home equity loan is a line of credit based on that amount, using the equity as collateral (or tangible property to guarantee a loan).

Are you considering using a home equity loan to buy a second home? Contact Troy Richardson to help you find the right home and offer lists of local lenders or mortgage companies.

A new breed of insurance is emerging from the current unemployment crisis. Some mortgage lenders, home-builders and even realty companies are offering various forms of “job loss mortgage insurance.”

 Although not offered across the board, some real estate companies incorporate a “Worry Free Mortgage Protection,” that can be offered by home sellers. Genworth offers a similar protection package at no charge to buyers who purchase their mortgage insurance. Other organizations provide grants; for example, The Rainy Day Foundation assists home owners during their first 24 months after purchase if their lender or real estate agent has partnered with them. They can also offer tips for financial survival should a crisis occur. 

Not everyone qualifies for these protection packages – and make sure you understand all terms and conditions of these policies. To learn more about these options, and to find the Bennington, Vermont home of your dreams, contact Troy Richardson at RE/MAX Maple Leaf Realty!

While the Bennington VT real estate market does not have as many foreclosures as some other parts of the country, I thought it was interesting to read that they are on the decline nationally, which hopefully is a good sign for the real estate market in general.  You may not think that Vermont is impacted by these figures from other states, but consider this:  if these states were not having as many problems, would more people be able to relocate to Vermont?  The lifestyle that we enjoy here in Vermont is attractive to a lot of people who want a change of pace.  If they can’t get out of their current real estate market, they can’t buy in ours!

Troy

 Foreclosures declined 8 percent in November compared with October, but were still up 18 percent from November 2008.

This was the fourth-straight month that U.S. foreclosures have declined since hitting an all-time high in July, according to online foreclosure marketer RealtyTrac.

Default notices, an indicator of coming foreclosures, also were down 8 percent from October, but up 22 percent from November 2008. Bank repossessions were flat from the previous month and down 2 percent from November 2008.

“We don’t really believe the underlying problems have been resolved,” said Rick Sharga, senior vice president for RealtyTrac. Many borrowers, he told the Associated Press, “simply aren’t going to qualify” for government and mortgage servicer help.

States with the highest foreclosure rates are:

• Nevada
• Florida
• California
• Arizona
• Idaho
• Michigan
• Illinois
• Utah
• Maryland
• New Jersey

Four states account for more than 50 percent of actual foreclosures: California, Florida, Illinois, and Michigan.

Source: RealtyTrac, (12/10/2009)

Bank of America and JPMorgan Chase & Co. both said their failure to help more borrowers stemmed from the fact that many home owners fail to complete mortgage-relief paperwork.

Jack Schakett, Bank of America’s credit loss mitigation strategies executive, cited “ineffective communications with customers, shortcomings in document maintenance, misunderstandings about program requirements, and the inability to comply by some borrowers.”

Likewise, JPMorgan Chase said only 4,300 home owners have completed the paperwork, although 16,000 have been approved.

“We are facing challenges with borrowers completing documentation or making trial plan payments as agreed,” Molly Sheehan, JPMorgan Chase’s executive in charge of housing policy, said in written testimony.

Source: Associated Press, Alan Zibel (12/07/2009)

The U.S. Treasury Department announced new guidelines this week designed to make short sales go more smoothly.

 To qualify under these new guidelines:

• The property must be the home owner’s principal residence.
• The home owner must be delinquent on the mortgage or close to defaulting.
• The loan must have been made before Jan. 1, 2009, and be for less than $729,750.
• The borrowers’ total monthly mortgage payment must exceed 31 percent of their before-tax income.

Under the plan, borrowers will receive $1,500 from the government for selling homes for less than the amount of their mortgages.   Mortgage-servicing companies will get $1,000 for each completed short sale.

Second-mortgage holders can receive up to $3,000 of the sales proceeds in exchange for releasing their liens.

Investors who hold the first mortgage can collect up to $1,000 from the government for allowing the payments.

Borrowers who complete a short sale under the program must be “fully released” from future liability for the debt, according to the guidelines.

Source: Associated Press, J.W. Elphinstone (11/01/2009) and The Wall Street Journal, Ruth Simon (11/01/2009)

The Federal Housing Administration (FHA), which is part of the Department of Housing and Urban Development (HUD), administers various single family mortgage insurance programs. These programs operate through FHA-approved lending institutions which submit applications to have the property appraised and have the buyer’s credit approved. These lenders fund the mortgage loans which the Department insures. HUD does not make direct loans to help people buy homes.

(more…)

You may be able to stay in your Bennington, Vermont home by taking action now.

1. Contact your lender. Explain the issues behind your late payments and let them know you are trying to rectify the problem. Your lender may be able to modify loan terms or help you come up with a plan for repayment.

2. Ask for help before depleting your savings. You may qualify for more options by having some resources still available.

3. Look for free counseling services. Many HUD-approved agencies can help those who are facing foreclosure and could suggest alternatives, or offer suggestions on qualifying for loan modifications.

Banks are backing away from short sales, forcing sellers to pay extra at closing or demanding a promissory note for the amount due. One-third of borrowers owe more on their mortgages than their properties are worth, according First American CoreLogic.

When their situations were really tough, most banks preferred short sales because they were their best opportunity to get the most money back. But with an improving economy, and because the losses on many of these properties have already been written off the books, banks are increasingly reluctant to negotiate a short sale.

Today, banks demand 9.5 weeks to respond to a short-sale request, compared to 4.5 weeks a year ago, according to research firm Campbell Communications. Their reluctance is frequently stymieing sales and frustrating real estate practitioners.

“It drives me up a wall,” says Robert G. Hertzog of Summit Home Consultants in Phoenix. “[The bank is] holding my client hostage.”

The above is from: Source: BusinessWeek, Christopher Palmeri (10/09/2009)

If you think that you might have to enter into a short sale situation in the Bennington VT real estate market, call Bonnie Cutler at RE/MAX Maple Leaf Realty in order to discuss your options. Bonnie is the most experienced in short sales in our office.

Mortgage applications increased last week as mortgage rates declined for the third straight week.

The Mortgage Bankers Association weekly index rose 16.4 percent on a seasonally adjusted basis compared to the previous week. And was up 38.4 percent compared to the same week last year.

The unadjusted purchase index increased 12.9 percent compared to the previous week and was 2.2 percent lower than it was a year ago.

The refinance index increased 18.2 percent and was at its highest level since mid-May.

Thirty- and 15-year mortgage rates were well below 5 percent:

30-year fixed-rate mortgages decreased to 4.89 percent from 4.94 percent.
15-year fixed-rate mortgages decreased to 4.32 percent from 4.34 percent.
1-year ARMs increased to 6.56 percent from 6.40 percent.

Source: Mortgage Bankers Association (10/07/2009)

Bennington VT

Your real estate agent may not write your home loan, but that’s who will probably be there when you begin discussing mortgage options.  Knowing some of the nuts and bolts before you start your home search can help you find the right loan.

Factors affecting your terms are the amount, the length of the loan, and the loan-to-value ratio (how much of the home’s value you are financing).  Larger loans carry more risk to the lender, so the interest rate may be higher.

Similarly, a smaller down payment represents more risk, possibly warranting a higher interest rate.  Get the best rate by putting down as close to 20% as possible.

The difference between a 15- and 30-year loan is also critical.  Payments for a shorter term will be larger, but you’ll build equity much faster, and enjoy a slightly lower interest rate.

Also understand the workings of an adjustable rate mortgage (ARM).  You need to be fully prepared for what may happen to your payments after the first adjustment.  However, something like a 5/1 ARM (a fixed rate for five years and an adjustment each year thereafter), could be a good idea if you’re buying your first home and don’t plan to stay longer than five years.

Discuss your hopes and objectives with an agent, who can help guide you down the road to homeownership.  Troy Richardson always recommends that you work with a local mortgage professional who can guide you to the correct mortgage for your personal situation.
Bennington Vt, Buying, Mortgages, First Time Buyers