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Wants to buy a home to your child? We can help! Please give us a call at (866) 785-3310, and we will answer all your questions professionally. Your goal is our goal.

More parents are buying properties to their children. Please refer to the CNN article below:

http://money.cnn.com/2011/12/07/real_estate/home_buying/index.htm

Happy Holidays!

The real estate market took a beating and many people suffered severely but many buyers today still want to have the American Dream and own their own home.

The problem is mortgages are hard to get and people are underemployed, but there is a solution that's making housing a family affair.

USA Today reported that family mortgages are growing in popularity. The chief executive, Timothy Burke of National Family Mortgage, calls the family mortgage "an opportunity to create a win-win".

Burke's company sets up and services intrafamily loans. The idea is that in a time when parents of grown children are looking to earn greater interest on their investment money and simultaneously their grown children are looking to buy a house at a lower interest rate, an intrafamily loan could help both sides.

According to USA Today, more than 12 million in loans has been financed to help families through National Family Mortgage. Those intrafamily loans range from an $18,500 down payment to a refinancing for $1.17 million.

For many parents the stock market is a big risk. So the opportunity to invest in their child's mortgage is a creative solution for both parent and child. In some cases, loans are so difficult to get that even if buyers have 20% down, they can still be rejected. Additionally, some buyers are losing out to cash buyers.

The intrafamily loans are giving some buyers a competitive advantage by allowing them to make an all-cash offer, especially on homes like foreclosures where the market is competitive.

According to the National Association of Realtors (NAR), last year, 9% of first-time homebuyers who made a down payment had received a loan from either a friend or relative. Also in 2010, nearly 30%, of those surveyed for NAR's annual Profile of Home Buyers and Sellers, reported that they received a gift from a friend or relative.

If you're planning to use the intrafamily mortgage, be sure to meet with experts to help guide you through the process. As more parents help their grown kids get into housing, the American dream stays alive for them. NAR found, in the same study, that without the help, buying a home would be very difficult–nearly 36% of first-time homebuyers needed help with a downpayment.

Fueling the interest of parents' involvement in an intrafamily loan are a few powerful factors including: the desire to help family members, the incentive to receive a higher interest return, the increasingly affordable homes, and the concern for their children's economic future.

The intrafamily mortgage may be the next best solution to what has not usually been seen in America but is certainly more popular in other cultures, multi-generational housing. However, if families can't combine and live together the intrafamily loan still offers the grown child and the parents an opportunity to help each other in tough economic times.

Commercial and multifamily mortgage originations turned sharply upward during the third quarter of 2011, rising 10 percent above levels in the second quarter and nearly doubling originations in the third quarter of 2010.  Results of Quarter Three lending was released by The Mortgage Bankers Association (MBA) on Thursday in their Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

MBA said that the 98 percent overall annual improvement in commercial/multifamily lending was driven by increases across the board.  When compared to the same quarter in 2010, loans for hotel properties increased by 406 percent; retail properties by 164 percent and office properties 103 percent.  Loans for multifamily properties were up 39 percent.  Offsetting these strong gains were losses of 3 percent and 8 percent for industrial property and health care property loans. 

The increased originations are reflected in MBA's Originations Index which rose from 70 in the third quarter of 2010 to 126 in the second quarter of 2011 to 138 in the quarter just ended.  The index peaked at 352 in Q2 2007 and bottomed out at 40 in Q1 of 2009.*

Originations increased across all lender types but lending by commercial banks soared, increasing 433 percent over lending one year earlier from an index of 32 to 169.  Lending by conduits for commercial mortgage backed securities (CMBS) was up 169 percent (although levels are still low; the index is 42).  Life insurance companies increased lending by 61 percent from an index of 176 to 282, and the GSEs Freddie Mac and Fannie Mae increased their lending by 47 percent from 120 to 176.

The average loan sizes also increased.  For all loans the average was $14.9 million compared to $10.5 million in Quarter 3 of 2010.  Loans from conduits averaged $40.5 million, unchanged year-over-year.  Commercial bank loans more than doubled in size from $4.9 million to $11.8 million; life insurance companies lent an average of $20.5 compared to $15.5 million and Freddie and Fannies' average loan size rose from $12.6 million to $13.8 million.  

"Lending on commercial and multifamily properties continues," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research. "Mortgage originations by life company portfolios hit another new record in the third quarter, and lending by bank portfolios and Fannie Mae and Freddie Mac also picked-up. Mortgage originations for the CMBS market, which was caught up in the global economic uncertainty of recent months, declined from last quarter, but were higher than last year's Q3 level."

Quarterly changes in originations were also impressive; retail property loans increased by 37 percent, office properties 8 percent, hotel properties 4 percent, multi-family properties 2 percent.  The remaining two properties types fell in quarterly statistics as well as annual; industrial property originations were down 14 percent and health care properties 30 percent.

Among investor types, between the second and third quarters of 2011, loans for commercial bank portfolios saw an increase in loan volume of 55 percent, loans for GSEs 32 percent, and originations for life insurance companies 3 percent.  Loans for conduits for CMBS decreased by 48 percent.

*The Index has a base of 100 = the average originations per quarter in 2001.

Mortgage rates have never been cheaper, with the 30-year rate falling below 4% for the first time in history.

The interest rate on a 30-year fixed-rate loan fell to 3.94% this week, the lowest rate since mortgage giant Freddie Mac (FMCC, Fortune 500) began tracking it. Meanwhile, the average for a 15-year fixed-rate mortgage also hit a record, falling to 3.26%.

"Average 30-year conventional fixed mortgage rates fell below 4% for the first time in history this week following a sharp drop in 10-year Treasuries early in the week as concerns over a global recession grew," said Freddie's chief economist, Frank Nothaft.

Yields on the benchmark 10-year U.S. Treasury bond, which mortgage rates closely track, have been under 2% this week, closing as low as 1.78%.The dirt-cheap mortgage rates can result in considerable savings for homeowners. Compared with just three months ago, when the 30-year was at 4.60%, borrowers today can save about $40 a month per $100,000 borrowed. That comes to a savings of nearly $14,000 for every $100,000 borrowed over the life of the 30-year loan.

The low rates have done little to boost home buying, however, according to the Mortgage Bankers Association. Their weekly survey of mortgage applications reported a drop in all loans of more than 4%. Purchase loan applications were almost flat and refinance applications fell more than 5%.

Big mortgages: Harder to get and more expensive

"Potential borrowers largely remained on the sidelines, seemingly unimpressed by the lowest (by any measure) mortgage rates since the 1940s," said Mike Fratantoni, MBA's Vice President of Research and Economics.

Some industry insiders remain unimpressed by the relentlessly falling cost of mortgage borrowing.

"Record low rates, blah, blah, blah: We've already heard this," said Keith Gumbinger of HSH Associates, a mortgage information provider. "Other than the price of money, nothing else has happened."

Given the nation's faltering recovery, the turmoil in Europe and the struggling housing market, the downward trend in mortgage rates is natural, according to Gumbinger.

"The lowest mortgage rates come at the bleakest periods," he said.

season.   At least those that are qualified.  Mortgage rates are falling, home prices are stagnant, and the nation’s biggest banks have stopped tightening mortgage guidelines for now.

Mortgage guidelines maybe loosening

Each quarter the Federal Reserve issues a comprehensive survey to its member banks regarding market conditions and current bank lending practices. The survey specifically addresses residential mortgage lending.

Last quarter, for the second straight quarter, just two “big banks” reported a tightening of their respective prime mortgage lending standards. Every other bank either left guidelines unchanged, or loosened them a bit.

This is a major reversal from just three years ago when nearly all banks were tightening lending standards.

What does this mean for you? For homebuyers and would-be refinancers, it may lead to simpler and quicker mortgage approvals for the rest of this year, and beyond.  Banks need to lend money but they don’t like to lend if they think they are going to lose money.  It they are loosening their guidelines they may feel their risks have decreased and are looking to attract more borrowers.

Keys to mortgage approval: The big three

It is important that you do not confuse “loosening” lending standards for “easy mortgage money.” Banks are still careful about what they lend and who they lend to.

Today’s mortgage approvals carry three basic requirements.  Actually  these are the same requirement that were in place years ago and referred to as the three “C’s”.

1. You must have equity ( Collateral)
2. You must have income (Capacity)
3. You must have credit (Credit)

You have to play “Show me the money”

There are specific loan programs through the VA and the USDA for which no-equity mortgages (no money down) are still available, but 100% mortgage loans are in the extreme minority these days.  Most loans today require some equity or down payment, and the minimum equity standards are higher today than at any time in recent history.

Some simple math for you:

NI and SI = NL       No Income or Stated Income = No Loan

As compared to five years ago, income hurdles are higher, too.

Mortgage applicants must now meet strict debt-to-income limits, often set to 45%. This means that your monthly debts–housing costs, bills, etc.–may not exceed 45% of your documented monthly income. Lenders will verify this income via your federal tax returns.  Everything must be documented.  No more what used to be called “Stated Income” loans where figures were pretty much made up.

A crafty accountant may help you at tax time, but he will not be doing you any favors with respect to your next loan application. No documented income, no approval.

Stellar credit could save you thousands

Mortgages are readily available today with credit scores as low as 600, but the available interest rates are awful as compared to an applicant with credit scores in the low 700s. Banks give the best rates to applicants with credit scores over 740.  Want that low advertised rate?  Then you better have a supper credit score.  Otherwise you will end up being turned down or shocked that your rate isn’t what was advertised.

Want the best mortgage rates? You need all three

You will not get great mortgage rates simply by putting a lot of money down, or earning more than Warren Buffet.  The best mortgage rates are reserved for applicants that show strength across all three categories–not just one.

You will need sizable equity, strong income, and high credit scores to be considered a “prime” applicant. This will get you access to a bank’s lowest mortgage rates, and make your underwriting as quick and simple as possible.

Mortgage rates are great, homes are affordable, and approvals are getting more plentiful.

We've used the word "nuts" in the past to describe extra volatile movements in the mortgage market, but today takes the cake.  Many market records were broken following today's Federal Reserve FOMC meeting. The net effect was positive for consumer borrowing costs...

CURRENT MARKET*: The BestExecution 30-year fixed mortgage rate is still 4.250%. More lenders are however willing to offer 4.00% and 4.125% is approaching BestExecution status.  On FHA/VA 30 year fixed BestExecution is 4.00%. Few lenders are willing to quote 3.875% without extra closing costs.  15 year fixed conventional loans are still best priced at 3.75% and we're still seeing aggressive quotes at 3.625%. Five year ARMs are still best priced at 3.25. ARMs and 15 year quotes seem to have bottomed out. 

It's important that we point out an increased amount of variation in what individual lenders are quoting as their BestExecution rates.  This is a factor of price volatility in the secondary mortgage market. Unfortunately when volatility picks up in the secondary mortgage market, the cost of doing business gets more expensive for lenders (hedging costs go up). Those added costs are usually passed down to consumers via extra margin in rate sheets.

GUIDANCE: We've realized a good portion of the rates rally we'd been holding out for plus more.  But believe it or not, we're still not at "all time highs."  There's room for improvement in the primary mortgage market as lenders have no passed along gains to their fullest extent. This is a factor of extra volatility in bond markets. Mortgage rates DO NOT like volatility.  Relative to various market levels, rate sheets are conservative yes, but there's no telling when things will get better, and sadly, always a chance that they won't get better at all.  Incidentally, we lean toward the possibility of them getting better, but the timing and flexibility required to capitalize on that possibility makes floating a less attractive choice for most scenarios right now, especially when what's on the table is already so much better than everything else 2011 has to offer and fairly darn close to all time low rates. 

CAUTION: MND guidance is speculative in nature. We don't have a crystal ball, we can't predict the future, we can only share our outlook. Making the following considerations extra important........................

What MUST be considered BEFORE one thinks about capitalizing on a rates rally?

   1. WHAT DO YOU NEED? Rates might not rally as much as you want/need.
   2. WHEN DO YOU NEED IT BY? Rates might not rally as fast as you want/need.
   3. HOW DO YOU HANDLE STRESS? Are you ready to make tough decisions?

---------------------------- 

*BestExecution is the most cost efficient combination of note rate offered and points paid at closing. This note rate is determined based on the time it takes to recover the points you paid at closing (discount) vs. the monthly savings of permanently buying down your mortgage rate by 0.125%. When deciding on whether or not to pay points, the borrower must have an idea of how long they intend to keep their mortgage. For more info, ask you originator to explain the findings of their "breakeven analysis" on your permanent rate buy down costs.

*Important Mortgage Rate Disclaimer: The BestExecution loan pricing quotes shared above are generally seen as the more aggressive side of the primary mortgage market. Loan originators will only be able to offer these rates on conforming loan amounts to very well-qualified borrowers who have a middle FICO score over 740 and enough equity in their home to qualify for a refinance or a large enough savings to cover their down payment and closing costs.If the terms of your loan trigger any risk-based loan level pricing adjustments(LLPAs), your rate quote will be higher. If you do not fall into the"perfect borrower" category, make sure you ask your loan originator for an explanation of the characteristics that make your loan more expensive."No point" loan doesn't mean "no cost" loan. The best 30year fixed conventional/FHA/VA mortgage rates still include closing costs such as: third party fees + title charges + transfer and recording. Don't forget the fiscal frisking that comes along with the underwriting process.

To answer any questions or doubts, please contact us.  We are here to serve you.

Mortgage rates rallied again today, extending their winning streak to four straight sessions. Positive progress has not been modest either. Improvements have been significant. A picture is worth a thousand words...

In the chart of Consumer Rate Quotes below, if the line is moving up, closing costs are on the rise.  If the line is moving down, costs are on the decline.  Consumer borrowing costs crept higher last week before plummeting on Friday, then again yesterday, and once again today. Mortgage rates haven't been this low since early November 2010!

The size and speed of the mortgage rate rally has been, for a lack of better words, nuts.

IMPROVED CURRENT MARKET*: The BestExecution conventional 30-year fixed mortgage rate has improved to 4.375%. Some lenders are even offering 4.25% but that quote carries with it additional closing costs.  On FHA/VA 30 year fixed BestExecution is 4.25% with some lenders willing to go as low as 4.00% (includes additional closing costs).  15 year fixed conventional loans are still best priced at 3.75% but we've seen aggressive quotes at 3.625% too. Five year ARMs are still best priced at 3.25%.

It's important that we point out an increased amount of variation in what individual lenders are quoting as their BestExecution rates.  This is a factor of price volatility in the secondary mortgage market.  Unfortunately when volatility picks up in the secondary mortgage market, the cost of doing business gets more expensive for lenders (hedging costs go up). Those added costs are usually passed down to consumers via extra margin in rate sheets.

GUIDANCE: Markets have shifted their attention back to economic fundamentals, which have been supportive of lower mortgage rates lately.  And while plenty of indicators do have the potential to improve the overall economic outlook in the days ahead,  they're more than likely going to confirm a dour situation and keep a lid on rising mortgage rates. The most influential data-point of the week comes on Friday morning, with the release of the July Employment Situation Report. We'll need this report to confirm the rally we've enjoyed over the past three days.  From that perspective, given the size and speed of the recent rally, we may see rates go sideways for a few days and maybe even inch higher. This behavior would not be a sign of shifting sentiment as much as it would illustrate rally exhaustion. Put more simply, no rally lasts forever, especially when a "high-risk event" is just ahead.  A path has however been paved for our longer-term mortgage rate outlook to come true. That means we see lower mortgage rates in the not so distant future. Just remember, it may not be a direct path lower, there will be ups and downs along the way.

CAUTION: MND guidance is speculative in nature. We don't have a crystal ball, we can't predict the future, we can only share our outlook. Making the following considerations extra important........................

What MUST be considered BEFORE one thinks about capitalizing on a rates rally?

   1. WHAT DO YOU NEED? Rates might not rally as much as you want/need.
   2. WHEN DO YOU NEED IT BY? Rates might not rally as fast as you want/need.
   3. HOW DO YOU HANDLE STRESS? Are you ready to make tough decisions?

---------------------------- 

*BestExecution is the most cost efficient combination of note rate offered and points paid at closing. This note rate is determined based on the time it takes to recover the points you paid at closing (discount) vs. the monthly savings of permanently buying down your mortgage rate by 0.125%.  When deciding on whether or not to pay points, the borrower must have an idea of how long they intend to keep their mortgage. For more info, ask you originator to explain the findings of their "breakeven analysis" on your permanent rate buy down costs.

*Important Mortgage Rate Disclaimer: The BestExecution loan pricing quotes shared above are generally seen as the more aggressive side of the primary mortgage market. Loan originators will only be able to offer these rates on conforming loan amounts to very well-qualified borrowers who have a middle FICO score over 740 and enough equity in their home to qualify for a refinance or a large enough savings to cover their down payment and closing costs. If the terms of your loan trigger any risk-based loan level pricing adjustments (LLPAs), your rate quote will be higher. If you do not fall into the "perfect borrower" category, make sure you ask your loan originator for an explanation of the characteristics that make your loan more expensive. "No point" loan doesn't mean "no cost" loan. The best 30 year fixed conventional/FHA/VA mortgage rates still include closing costs such as: third party fees + title charges + transfer and recording. Don't forget the fiscal frisking that comes along with the underwriting process

Last week, markets appeared somewhat optimistic with mortgage rates remaining consistently stable despite debit ceiling issues and talks that fell apart prior to the weekend. It seems as though things may change this week as the deadline looms and an agreement has not been reached. Regardless, it is still a good time to lock in mortgage rates that are still at the lowest levels of 2011.

Freerateupdate.com's daily survey of wholesale and direct lenders show that conforming 30 year fixed mortgage rates are at 4.250%, 15 year fixed mortgage rates are at 3.375% and 5/1 adjustable mortgage rates are at 2.625%. These low mortgage rates with 0.7 to 1% origination fee are available for borrowers who have maintained good credit and can provide the necessary documentation to receive lender approval. The Mortgage Banker's Association reported the largest increase in refinances for the week ending July 15th which is evidence that borrowers are jumping on this opportunity while it is here.

For those with less than perfect credit, low FHA mortgages rates are still very competitive with conforming mortgage rates, either at the same level or slightly higher. FHA 30 year fixed mortgage rates are at 4.250%, FHA 15 year fixed mortgage rates are at 3.750% and FHA 5/1 adjustable mortgage rates are at 3.000%. With a minimum credit score of 580, FHA will accept a down payment as low as 3.5% which can be combined with housing grants and approved gifts. FHA mortgage loans are consumer friendly and continue to be the choice of first time home buyers, even though FHA closing costs (APR) tend to be higher because of the upfront mortgage insurance premium and other FHA fees.

Jumbo 30 year fixed mortgage rates moved up and down by .125% and are now at 5.000%. Jumbo 15 year fixed mortgage rates are at 4.500% and jumbo 5/1 adjustable mortgage rates are at 3.625%. These low jumbo mortgage rates are available with 0.7 to 1% origination point to borrowers who have excellent credit. The jumbo mortgage market is not over saturated right now because of the higher conforming loan limit. If that limit decreases on schedule in October, this might change since many properties will again fall into the jumbo mortgage market. There is currently a bill in Congress to further extend the conforming loan limit which, if approved, will help to keep jumbo mortgage rates low.

Although investors appeared optimistic last week, MBS prices (mortgage backed securities) fluctuated slightly which had little to no affect on mortgage rates. As MBS prices move, so do mortgage rates move in the opposite direction. Better than expected housing starts for the month of June and a new Greece debt deal led investors to turn to stocks. Markets saw little reaction to the report that weekly jobless claims increased higher than expected. This week can turn out to be completely the opposite as tension sets in over the debt ceiling deadline which is August 2nd. With both parties so far apart on ideas and no sign of an agreement, concern is already influencing markets as MBS prices are starting to drop.

Fixed mortgage rates fell this week, and the rate on the 15-year loan dropped to its lowest point of the year.

The average rate on the 30-year loan decreased to 4.51 percent from 4.60 percent a week ago, Freddie Mac said Thursday. It reached its yearly low a month ago, at 4.49 percent.

The average rate on the 15-year fixed mortgage, popular for refinancing, fell to 3.65 percent from 3.75 percent. Its previous low this year was 3.67 percent, reached three weeks ago.

Rates typically track the yield on the 10-year Treasury note. Yields fell sharply last week after dismal jobs data pushed investors into the safety of government bonds. Yields fall as prices rise.

Low mortgage rates and depressed home values have done little to revive the struggling housing market. Many people can't take advantage of the low rates because of tighter lending standards and higher downpayment requirements. Lenders are cautious because the weak economy and high unemployment make it more likely that some borrowers will default.

Other potential homebuyers are holding off, concerned that housing prices will continue to fall.

Few economists expect the housing market to rebound before 2013.

To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.

The average rate on a five-year adjustable-rate mortgage edged down to 3.29 percent from 3.30 percent last week. Two weeks ago, it hit 3.25 percent, its lowest level on records dating back to 2005. The average rate on the one-year adjustable loan fell to 2.95 percent, a record low, from 3.01 percent.

The rates do not include extra fees known as points. One point is equal to 1 percent of the total loan amount.

The average fees for the 30-year loans were unchanged at 0.7, according to Freddie Mac's survey. Average fees for the 15-year fixed loan and the five-year ARM were 0.6. The average fees for the one-year ARM fell to 0.5.

With interest rates near rock bottom and home prices down, this ought to be a great time to buy a home. But for most people, it's a lousy time to get a mortgage.

Years after the collapse of the real-estate market and resulting financial crisis, it takes nearly pristine credit scores and hefty down payments to get the best rates.

"Since 2009, credit has become a lot tighter," says Greg Reiter, who follows mortgage-backed bonds at RBS Global Banking & Markets.

For borrowers, this highlights the need to pay close attention to credit scores. New rules unveiled last week should make it easier for consumers to see how their credit scores affect the interest rates they pay. These rules, the result of last year's Dodd-Frank financial-services legislation, require banks and other lenders to disclose to consumers the scores used to determine interest rates charged borrowers, or to deny credit.

The new reality for borrowers can be seen in the FICO credit scores on the loans that banks are giving out and that are backed by government agencies Fannie Mae and Freddie Mac. These days the two agencies essentially finance 75% of all mortgages by purchasing the loans from the banks. In the process, they shape how much it costs to borrow.

FICO scores range from 300 to 850. Pre-crisis, a score of 700 to 725 was deemed solid and a borrower could expect to get a "conventional" mortgage at the lowest rates.

From 2003 through 2006, 82% of Fannie Mae mortgages were for borrowers with a score between 700 and 750, according to data compiled by RBS.

But so far in 2011, only 13% of Fannie Mae mortgages carry that score, and just 1.7% have a score of 700 to 725, according to RBS. This year, 75% of Fannie Mae mortgages are for FICO scores of 750 to 775, up from less than 5% before 2005.

Meanwhile, the median score is 711, according to FICO.

"Half the population is locked out" from the best mortgages, says Mr. Reiter.

The upshot is that borrowing costs more even with a 730 score and a 20% down payment, says Norman Calvo, president of Universal Mortgage in Brooklyn, N.Y.

"Three years ago, if you had 730 it was excellent," Mr. Calvo says. Today, he says, it could cost an extra 0.125 percentage point per year on a mortgage, "just because you have one little nick on your credit report."

For more typical scores, the premiums are even bigger. At 700 to 725, it's usually an extra quarter percentage point, and at 630 -- if a borrower can find a loan -- the additional cost is 1.5 percentage points, Mr. Calvo says. "If you have a credit score of less than 680, you've got to be worried about approvability."

The news is also grim for those looking to refinance. Based on the level of interest rates, RBS estimates 60% of agency-backed mortgages should be eligible to refinance. But once home values and credit scores are factored in, just 12% are eligible.

These trends show the importance of understanding credit scores. Mr. Calvo says borrowers sometimes unintentionally make matters worse. For example, closing an unused credit card can actually lower a score in the short term, he says.

For the first time in years, buying a home may beat renting.

Two factors are at play, according to researchers who recently crunched the numbers, Ken Johnson of Florida International University and Eli Beracha of East Carolina University for a paper to be published in Real Estate Economics.

First, rents, though mostly stagnant the past few years, are expected to head higher as more people bitten by the housing bust turn to renting. Rents could rise 7% in each of the next two years, according to Peggy Alford, president of Rent.com.

Second, home prices have finally dropped enough to create a buying opportunity. Nationally, prices are down 32% from their peak, set in 2006.

The net result is that home price gains would need to average only 3.25% annually to beat renting, according to Beracha and Johnson. To make the math work, you have to stay in the home for at least eight years. Beracha and Johnson compared the cost of owning with the cost of renting.

Renting has usually come out ahead, they say. Buying typically leads to higher monthly and annual bills once all costs are factored in -- mortgage payments, property taxes, maintenance and transactional costs.

Those higher costs can be offset if the home gains in value. But renters -- the researchers assume -- can invest the savings. And that is a big part of why the professors say renting has typically been the better deal. "I was shocked at how often renters won," said Johnson.

Another reason had been the push to homeownership, which resulted in a premium on home values. "My dad always told me not to 'throw my money away on rent,'" said Johnson. "This mania toward homeownership tends to drive prices up."

But that's changing: Homeownership has dropped to 66.4% from a peak of 69.1% in 2005, according to the Census Bureau.

How much better buying will be depends on location. Of the 23 cities Beracha and Johnson looked at, Seattle is the best place to buy right now. When renters invest in portfolios that include stocks, the appreciation rate required over the next eight years there is 4.84% and the area's historical average is 6.06%.

For several cities, including New York, Boston and Dallas, renting is still preferable. In New York, for example, homeowners would need a 7% annual rise in home values to beat renters.

Buyers should beware the assumption that home prices will rebound, even from these depressed levels, said Dean Baker, co-director of the Center for Economic and Policy Research.

Hiring has been slow and there are tons of potential foreclosures that could flood the market with distressed homes, depressing prices.

Even in cities where people are, theoretically, better off renting, they may not be in reality. Paying off a mortgage is a forced savings plan, said Baker. The mortgage bill comes in every month, the homeowner pays it and the mortgage balance goes down.

Renters, meanwhile, are just as likely to spend their savings. They'll wind up with less money than homeowners, which is kind of what your dad was saying all along. 

Mortgage calculator apps for Bridgeview Mortgage Corp. are finally here. Have a mortagage calculator whenever you are! It's FREE.  

Mortgage calculators are used to help a current or potential real estate owner determine how much they can afford to borrow on a piece of real estate. Mortgage calculators can also be used to compare the costs, interest rates, payment schedules, or help determine the change in the length of the mortgage loan by making added principal payments.

A mortgage calculator is an automated tool that enables the user to quickly determine the financial implications of changes in one or more variables in a mortgage financing arrangement. The major variables include loan principal balance, periodic interest rate compound interest, number of payments per year, total number of payments and the regular payment amount.

Bridgeview Mortgage Corp.'s Mortgage Calculator gives you instant access to discover your monthly payment on any house. This easy-to-use calculator will tell you the exact monthly payment of a home based on:

If the last few years have taught us anything, it's this: Never buy more house than you can afford.

The amount you can really afford might be less than you have been led to believe, particularly by people who stand to make more money the more they can talk you into spending.

That's nothing against salespeople -- they're only doing their job. But you wouldn't ask a car salesman how much you should spend on a car (We hope!).

Before the first round of house hunting, make sure you decide -- with no outside pressure from real estate salespeople or anyone else -- the maximum amount you will spend on a house.

Too many people spend every dime and take out the biggest loan they can get to buy a house, and in no time start losing sleep wondering if they can make their mortgage payments.

Follow these 4 simple rules, however, and you'll have little or no trouble paying for your home.

Rule 1. Spend 30% or less of your gross (pretax) income on housing costs.

Add together monthly income before taxes and other deductions from your job, your spouse's job, and part-time or side businesses if applicable.

Multiply that number by 30%. The result is the maximum total amount you should spend on monthly housing costs -- including principal and interest on the mortgage, property taxes, condo or association fees and insurance.

For years, the U.S. government has defined an affordable home as one that costs less than 30% of your pretax monthly income. Spending less is even better.

Liz Weston, author of The 10 Commandments of Money, recommends keeping your housing costs down to 25% or less of your income.

For example, if you make $60,000 a year and have no debts, you can afford to spend about $1,500 a month on principal, interest, taxes and insurance without breaking the 30% rule. To keep housing costs down to 25% of your income, as Weston recommends, you'll have to spend $1,250 or less.

Nearly 37% of homeowners with a mortgage -- 19 million people -- now spend more than 30% of their income on housing.

That's one crowd you don't want to follow.

Rule 2. Spend no more than 36% of your income on total monthly debt payments.

The more nonmortgage debt you have, the less you can afford to spend on a home.

Multiply your income from Rule 1 by 36%.

Plan to spend no more than that result on your total debt payments -- mortgage payments, auto loans, student loans, credit card bills, child support and loans against your 401(k) plan.

For example, if you make $60,000 per year but you spend $300 a month on car payments, $125 on credit card bills and $200 on student loans, the 36% rule would limit your monthly housing costs to $1,175.

It's easy to put those rules to work. Just enter your income and nonmortgage debt payments into our mortgage calculator, and we'll tell you how big of a loan and monthly payment you can afford.

Rule 3. Don't loot your retirement accounts for a down payment.

The substantial down payments lenders are demanding could limit how much you can afford to borrow.

With so much savings tied up in retirement accounts, an IRA or 401(k) plan may seem like the only place to turn for that kind of cash.

Think twice before taking money out of retirement account for a down payment, however. Retirement accounts are secure, safe from creditors. Equity in your house is not. If you take cash out now, you'll lose the protected status of retirement accounts and jeopardize your retirement income.

In addition, you can't take money out of most retirement accounts without paying a penalty and taxes. By the time you do that, you won't have as much money left as you thought. For example, if you take $20,000 out of your IRA and paid a 10% penalty, plus 30% in federal and state income tax, you'll only have $12,000 left.

You can borrow from a 401(k) or similar plan (but not an IRA) if your plan allows it, but that's risky. If you lose or quit your job, you have to pay it back. Besides, retirement savings are for retirement.

If you must tap a retirement account, and one of your accounts is a Roth IRA or Roth 401(k) plan, tapping it may make sense. Unlike other kinds of retirement plans, Roth plans contain contributions that have been fully taxed. That means you can make withdrawals up to the amount you have contributed without paying additional taxes or penalties. (See your accountant for specific rules before you move any funds.)

Rule 4. Move in with a reasonable rainy day fund.

When anything goes wrong for people who live paycheck to paycheck, they have nowhere to turn.

A job loss, emergency home repair, disaster, or health problem could easily keep you from being able to pay your mortgage. Record numbers of homeowners have lost their homes under such circumstances.

You can increase your financial security by keeping three- to six-months' income in an easily accessible savings account or other emergency fund.

You should also have enough cash on hand to cover home repairs, expected and unexpected. If you have to call a plumber on the weekend, for example, count on spending at least $200. Weston recommends allocating 1 - 3% of the cost of your home to annual repairs and maintenance.

You need a larger emergency fund if you have a high deductible on your homeowners insurance, and – if you have it, high-risk insurance for such disasters as floods and hurricanes.

According to Consumer Reports, there's a growing trend for your deductible to be a percentage of the insured value of your home.

"In many states, homeowners now have two deductibles: one for their main policy and another for a high-risk peril such as a windstorm or a hurricane. Florida requires a hurricane deductible of 2% for homes valued at $100,000 or more."

Insurance plans with higher deductibles are good because you save on premiums. You must be prepared, however, to pay the deductible out of pocket when disaster strikes.

NEW YORK (CNNMoney) -- Even in these down times, there's money to be made buying and flipping houses.

One might think this would be a most dangerous game -- after all, home prices are down more than a third from their peak in most areas. But plenty of investors are taking the risk in exchange for big profits.

In fact, nearly 1 million homes were bought as investment properties in 2010, according to the National Association of Realtors.

"It's absolutely viable," said Perry Henderson, a real estate agent and investor in Austin, Texas. "But you have to buy intelligently and go after the right opportunities."

One investor close a deal on a three-bedroom, two-bath house for $138,000 in Austin. His client is now selling the property for $188,000 after putting in $10,000 worth of repairs. Add in transaction costs and this investor is still making at least $20,000 in just a few weeks of work.

Of course, this is Texas where home prices have remained more stable. The buy-and-flip is more difficult to execute in Florida, where the bubble hit hard.

"It's been almost a dead issue," said Jack McCabe, a real estate consultant in the Sunshine State. "A lot of the deals done over the past two years were at 50% discounts to 2006 prices and they'll still turn out to be unprofitable."

Still, there are some Florida flippers making money, particularly those buying inner-city properties selling at deep discounts. Some of the homes sell for $30,000 or $40,000 when they once fetched $200,000.

"There are opportunities if you're sharp and knowledgeable about the local areas," McCabe said. "Buying at those prices, there are profits to be made."

The buy-and-flip is also easier in rising markets, but there are precious few around. But Washington, D.C., is on the list, being one of only two metro areas to record year-over-year price increases, according to the most recent Case-Shiller 20-city home price index.

"Most of my clients go through four of five properties a month," said Justin Konz of Restoration Capital, which finances many D.C.-area purchases. He claimed his clients are making gross margins of 35% or higher.

Most shoppers buy very selectively from three main sources: foreclosures auction sales; homes repossessed by banks (REOs); and short sales. Prices must be rock-bottom low and fix-up costs modest, only about 5% or 10% of purchase prices.

Henderson prefers ugly, beat-up homes that have sat on the market or "old houses that somebody's grandma lived in for 40 years and didn't do anything to. Now, she's passed away and her family wants to sell quickly."

Those, he said, are where the deal can be found because he's improving the bad properties in good neighborhoods.

One real estate investor, Brian Fuller, hates the term "flip," even though he and his partners buy and sell more than 200 properties a year in and around San Diego.

"It doesn't describe what we do," he said. "We buy the biggest eyesore on the block and turn it into the best looking house there. We're helping pull up values in the neighborhood."

1. They pass the money from their line of credit with big banks to the consumers in the form of home loans.
2. They collect money from private inventors to lend to consumers. 

Consumers should be careful about the second way because interest rates may be significantly higher.

However, with all the seemingly beneficial aspects of nonbank lenders,
Diane Thompson, a lawyer at the National Consumer Law Center, advises home buyers to stick with a bank. “There’s a long track record which indicates that this is where consumers will get the best deal,” she said.

Arturo Torres, Esq.

When purchasing a home in New York, it's imperative to engage the services of a real estate attorney. An attorney will not only see to it that your rights are protected and will process all necessary legal documents for your purchase, but will also make sure that the building you are buying into is fiscally sound. These tips will help you choose the right attorney to steer you through your transaction.

1.     Start early

Start your search for a good real estate attorney about the same time you seriously begin your search for a new home. You want plenty of time to find a good attorney -- you don't want to end up picking one at the last moment without doing any research.

2.     Seek others’ advice

Talk to friends, colleagues and family who've recently purchased a home and ask them if they would recommend the real estate attorney they used. You could also seek the names of reputable attorneys from your real estate agent -- just be sure to get an attorney who's independent of that agent.

3.     Look for experience

You want to find a "real estate attorney" if you are looking to purchase a real estate property.

4.     Interview

Select a few attorneys to interview on the phone. Ask them about their background and years of experience, how many closings they typically perform during a month or a year, what services they will provide, and whether they can give you the names of some of their clients as references. Ask up front what their fees will be and how you will be charged. (E.g., some lawyers bill hourly, while others set a flat fee.)

5.     Get it in writing

Once you select an attorney, be sure to read the "retainer agreement" -- in which the attorney spells out what services he or she will provide and at what fee, and make sure that you fully understand it and its terms before signing.

Good luck with your purchase!

As of January 1st of 2010, purchasing a home has now been made easier than ever thanks to the standardized "Good Faith Estimate" that all lenders must provide to the borrowers.

To learn more click on the following link... http://realestate.aol.com/article/refinance/_a/shopping-for-a-mortgage-is-easier-than-ever-thanks-to-new-gfe/201001272?icid=main|aim|dl4|link3|http%3A%2F%2Frealestate.aol.com%2Farticle%2Frefinance%2F_a%2Fshopping-for-a-mortgage-is-easier-than-ever-thanks-to-new-gfe%2F201001272