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Is a Reverse Mortgage Right for Your Montgomery AL Home?

Friday, June 3, 2011
by The Hat Team

Because of today’s economic situation, rapidly rising health care costs, and falling retirement and savings account balances, many seniors are feeling financial stress. Looking for relief from their monetary woes, over 600,000 seniors have taken advantage of the FHA’s Home Equity Conversion Mortgage (HECM), better known as a reverse mortgage.

mortgageA reverse mortgage is a special type of home loan based on age, equity, interest rates, and the value of your Montgomery AL home, a reverse mortgage allows you to not only forego paying monthly mortgage rates but also to receive money (as long as at least one borrower lives in the home) on a continuous monthly basis, for a fixed period of time, or in unscheduled installments as needed.

To qualify for a HECM, the FHA requires that you own your home outright or have a low mortgage balance that can be paid from the loan’s proceeds, be at least 62 or older, and that you continue to reside in your Montgomery AL home. Single family homes and 1-4 unit homes with one unit occupied by the borrower are eligible. The same holds true for HUD approved condos and manufactured homes that meet FHA standards.

A reverse mortgage differs from a home equity loan in that you do not make monthly payments, and it is available to you regardless of your income. The amount of the HECM is based on your age, the current interest rate, and the appraised value of your Montgomery AL home.

When you or the last surviving homeowner moves from the house or passes away, you or your estate has approximately 12 months to repay the loan amount, with fees and interest, to the lender. Any remaining equity after a sale will belong to you or your heirs. If the proceeds of the sale are not enough to cover the loan, the lender, not you or your heirs, must take the loss.

There are four ways to receive your money:

  1. Lump sum--all the cash at closing
  2. Tenure--equal monthly payments as long as the house is the principal residence.
  3. Term--equal monthly payments for a fixed number of years.
  4. Line of credit--funds available to draw on at any time.

Note: the borrower can “mix and match” any of the above plans and can use the money for any purpose.

As with all government programs, you need to give careful consideration to all of your options. In fact, potential HECM borrowers are required to receive some type of consumer pre-counseling about the program. You can find an HECM counselor online at or by calling 1-800-569-4287. You can also contact the National Council on Aging at 1-800-510-030 or online at. BEWARE of reverse mortgage companies who charge a fee to refer you to a lender! It is best to work only with lenders who are members of the Better Business Bureau and the National Reverse Mortgage Lenders, organizations which adhere to a strict code of ethics and standards.

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Montgomery AL Foreclosure Trends - April 2011

Friday, May 27, 2011
by The Hat Team

There were 1,311 Montgomery AL foreclosure homes for sale with 171 new foreclosures in April 2011. The average selling price of a Montgomery AL home was $163,408 and the average foreclosure selling price was $93,093 a $70,315 savings, according to RealtyTrac.com.

Montgomery AL Foreclosure Activity and 30 Year Interest Rate

Montgomery interest rates averaged 4.84% in April while the number of foreclosed homes decreased from 228 in March to 171 in April.

montgomery al foreclosure

Foreclosure activity is based on the total number of properties that receive foreclosure filings – default notice, foreclosure auction notice or bank repossession – each month. Interest rate is based on the average 30-year fixed rate from Freddie Mac Primary Mortgage Market Survey.

Montgomery AL Foreclosure Geographical Comparison

Montgomery AL foreclosure activity was 0.01% higher than national statistics. 0.10% higher than Alabama and 0.01% higher then Montgomery County statistics for the month of April.

montgomery al foreclosure

Montgomery AL Foreclosure Activity by Month

The number of Bank-Owned properties decreased from 151 homes in March to 121 in April. The number of Auctions decreased from 84 to 50. There is a 6-month rising trend.

montgomery al foreclosure

Are you or someone you know behind on mortgage payments and facing a Montgomery foreclosure? You do have options. A short sale may be the answer to saving you, your family and your home. I am a Certified Distressed Property Expert (CDPE) with specialized training in helping families avoid foreclosure. Give me a call for a private consultation.

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Midtown Montgomery Real Estate Sales Statistics - April 2010

Friday, May 20, 2011
by The Hat Team

Home sales are expected to stay on an uptrend through 2012, although the performance will be uneven with mortgage constraints weighing on the market, according to real estate experts.

Lawrence Yun, National Association of Realtors chief economist, said existing-home sales have been underperforming by historical standards and will rise gradually but unevenly. “If we just hold at the first-quarter sales pace of 5.1 million, sales this year would rise 4 percent, but the remainder of the year looks better,” Yun said. “We expect 5.3 million existing-home sales this year, up from 4.9 million in 2010, with additional gains in 2012 to about 5.6 million – that’s a sustainable level given the size of our population.”

Now take a look at how the Midtown Montgomery real estate market performed in April.

Midtown Montgomery real estate sales statistics for April show the average sales price decreased by 10% to $129,495 when compared to April 2010.  The number of homes sold decreased by 33% in April.  The median sales prices decreased by 20%, while market times decreased 20% or 27 days.  The highest selling home price decreased by 5%, and the lowest selling home price increased by 29%.

Midtown Montgomery April 2011 April 2010
Homes Sold 29 43
Average Selling Price $ 129,495 $ 144,517
Median Selling Price $ 100,000 $ 125,000
Days On The Market 105 132
Highest Selling Price $ 649,000 $ 683,000
Lowest Selling Price $ 8,500 $ 6,000

For the latest Midtown Montgomery real estate market conditions in your area, please call me at 800-HAT-LADY or visit HomesForSaleInMontgomeryAlabama.com.

Information is provided by the Montgomery Area Association of Realtors and is deemed accurate but not guaranteed.

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Dealing With a Low Appraisal On Your Montgomery AL Real Estate

Sunday, May 15, 2011
by The Hat Team

So it has happened. You’ve spent recent months preparing your house for sale, negotiating a fair price, and anxiously awaiting the closing date. And now the appraisal on your Montgomery AL real estate has come in below the offered price. What to do? First, remain calm. This is not an unusual problem in today’s market. Understanding the reason(s) for the disappointing appraisal and exploring your options in saving the transaction may well be helpful at this point.

REASONS FOR A LOW APPRAISAL:

  • Overpricing by you, the seller
  • Declining market values
  • An abundance of foreclosures or short sales in your neighborhood
  • Inflated price resulting from multiple offers
  • Incorrect evaluation by the underwriter
  • Cash back to the buyer from the seller
  • Error on the part of the appraiser

STEPS YOU CAN TAKE:

  • Lower the price on your Montgomery AL real estate. Research the latest comps for your area, think realistically about your asking price, and decide if you are willing to begin the whole process again.
  • Ask the buyer to make up the difference in cash.
  • Offer to carry a second mortgage for the buyer if the above option is not possible.
  • Check the appraisal for errors in information about your Montgomery AL real estateappraisal.  Is the square footage correct? What about the number of bedrooms or bathrooms? Have any recent improvements you’ve made to the property been included? If not, appeal the appraisal.
  • Supply to the underwriter a list of recent comparable sales that justify the selling price and ask for a review of the appraisal.
  • Order a new appraisal. Although you or your buyer will have to pay for it out of pocket, it could certainly be money well spent if it results in a higher appraisal. If your loan is an FHA loan, ask your lender for a list of approved appraisers. If it is a conventional loan, it is subject to the rules of the Home Valuation Code of Conduct (HVCC).
  • Cancel the transaction. The last resort after trying to resolve the situation. Most purchase contracts contain a loan contingency dealing with low appraisals.
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Montgomery AL Foreclosure Trends - March 2011

Thursday, May 5, 2011
by The Hat Team

There were 1,420 Montgomery AL foreclosure homes for sale with 243 new foreclosures in March 2011. The average selling price of a Montgomery AL home was $136,478 and the average foreclosure selling price was $101,691 a $34,788 savings, according to RealtyTrac.com.

Montgomery AL Foreclosure Activity and 30 Year Interest Rate

Montgomery interest rates averaged 4.84% in March while the number of foreclosed homes increased from 150 in February to 228 in March.

montgomery al foreclosure

Foreclosure activity is based on the total number of properties that receive foreclosure filings – default notice, foreclosure auction notice or bank repossession – each month. Interest rate is based on the average 30-year fixed rate from Freddie Mac Primary Mortgage Market Survey.

Montgomery AL Foreclosure Geographical Comparison

Montgomery foreclosure activity was 0.05% higher than national statistics. 0.12% higher than
Alabama statistics for the month of March.

montgomery al foreclosure

Montgomery AL Foreclosure Activity by Month

The number of Bank-Owned properties increased from 43 homes in February to 151 in March. The number of Auctions decreased from 112 to 92. There is a 6-month rising trend.

montgomery al foreclosure

Are you or someone you know behind on mortgage payments and facing a Montgomery foreclosure? You do have options. A short sale may be the answer to saving you, your family and your home. I am a Certified Distressed Property Expert (CDPE) with specialized training in helping families avoid foreclosure. Give me a call for a private consultation.

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Montgomery AL Real Estate: Understanding Shadow Inventory

Thursday, April 28, 2011
by The Hat Team

Shadow inventory is the number of foreclosed properties currently owned by banks (or will be owned in the future) that are sitting empty and are not currently for sale. 

Many analysts use the “tip of the iceberg” analogy to describe the 'shadow inventory' situation, feeling that a massive number of distressed properties and underwater loans sits just below the surface. Some believe that the number of potential homes for sale greatly exceeds the number currently on the market. No significant appreciation of Alabama real estate and home prices will take place until the shadow inventory that exists works its way through the real estate market.

The map below shows the number of months it would take to clear the shadow inventory by state. The months’ supply is estimated by dividing the shadow inventory and the monthly number of distressed sales. As you can see, Alabama has 8 months of shadow inventory to contend with.

 

Now take a look at how the Midtown Montgomery real estate market performed in March.

Midtown Montgomery real estate sales statistics for March show the average sales price decreased by 2% to $135,457 when compared to March 2010.  The number of homes sold decreased by 47% in March.  The median sales prices decreased by 8%, while market times decreased 34% or 65 days.  The highest selling home price decreased by 26%, and the lowest selling home price decreased by 50%.

Midtown Montgomery March 2011 March 2010
Homes Sold 20 38
Average Selling Price $ 135,457 $ 138,275
Median Selling Price $ 120,500 $ 130,500
Days On The Market 129 194
Highest Selling Price $ 350,000 $ 470,000
Lowest Selling Price $ 4,500 $ 9,000

For the latest Midtown Montgomery real estate market conditions in your area, please call me at 800-HAT-LADY or visit HomesForSaleInMontgomeryAlabama.com.

Information is provided by the Montgomery Area Association of Realtors and is deemed accurate but not guaranteed.

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How Montgomery AL Real Estate Buyers Can Be Credit Savvy

Thursday, April 21, 2011
by The Hat Team

Your credit score is a number that helps lenders predict how likely you are to make your payments on time. This score affects your ability to obtain credit and helps determine what you pay for credit cards, auto loans, and mortgages on Montgomery AL real estate. Even your insurance rate is related to your score. The higher your score, often referred to as a FICO score, the more apt you are to be approved for and pay a lower interest rate on new loans.

credit reportWhat do the numbers mean?

FICO scores range from 300 to 850, with most people scoring in the 600s and 700s, and are generally rated from excellent to very bad.

  • Above 800 is considered excellent. This rating reflects that fact that you pay bills on time, have a strong credit history, and have not filed for bankruptcy. You use your credit responsibly.
  • Between 750 and 800 falls into the very good category. You are considered a very low risk because of your history of paying bills on time and acting responsibly.
  • Between 700 and 750 puts you in the low risk range. You my have missed some payments in the past, but you current record is good. You do not have an excessive amount of credit card debt.
  • Between 650 and 700, or fair, means you are a moderate risk. Your credit history may include older negative items, too many recent applications for new credit, or a higher than normal credit card debt.
  • Between 600 and 650 is a bad score, and you are deemed a high risk for purchasing Montgomery AL real estate. Your score most likely reflects high credit card debt, late payments, collections, or bankruptcy, and you may well be turned down for new credit.
  • Below 600 is considered very bad, and you are viewed as a very high credit risk. If you are approved at all, it will be at a much high interest rate--or you may even need a cosigner or a very large down payment in order to secure a loan.

If you have not yet established a credit history due to lack of credit cards and/or loans, you may have no credit score. Opening a new credit card account and using it responsibly for a few months should alleviate this problem.

What makes up the credit score?

Your payment history comprises 35% of the score, with the amount of debt you have affects about 30%. 15% of the score is derived from the length of your credit history, with 10% resulting from recent new credit applications. Other factors such a s a variety of credit types make up the final 10%.

How can you improve your score?

  • Use you credit cards to establish a positive and consistent pattern of payment.
  • Check your credit report for inaccuracies. This is a common problem, so look for and report misinformation.
  • Have a variety of debt. In addition to a mortgage on your Montgomery AL real estate, add auto loans and credit cards to the mix. It is important to demonstrate good money management in more than one area.

The three major credit reporting agencies are Equifax, Experian, and Transunion. You are entitled to one free credit report a year from each of the three.

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Going Green In The Garden Of Your Montgomery Alabama Real Estate

Saturday, April 16, 2011
by The Hat Team

In the push to be eco-friendly in their daily lives, gardeners are turning their attention to ways to “save the planet” in their own backyards. There are many natural ways to reduce both pollution and harm to the environment, and manufacturers of gardening aids are producing more and more synthetic products that are non-toxic. Although old habits are hard to break, there are some relatively simple and inexpensive steps you can take to become a green gardener at your Montgomery Alabama real estate.

1. RECYCLE PLANT MATTER AND KITCHEN WASTE INTO COMPOST

Using compost not only creates healthy soil, it also conditions the soil to become less water dependent.

2. USE SAFE AND NATURAL NUTRIENTS

Substances such as blood meal, bone meal, cottonseed meal, fish emulsion, greensand, and rock phosphate are excellent nutrient supplements, as are CowPots, “plantable" cow manure in the shape of pots.

3. AVOID USING PESTICIDES.

Try using natural controls such as nemodes at your Montgomery Alabama real estate. Eliminate the use of chemical -laced products like insecticides, fertilizer, and slug pellets. Each of these has negative repercussions such as killing birds, toads, and beneficial insects. Synthetic pesticides contain imidacloprid, which is non-threatening to non-pests. An annual application is all that is needed.

4. EXPERIMENT WITH WEED AND DISEASE CONTROL MEASURES

Solutions made with milk, baking soda, and some cooking oils are effective, as is 20% concentrate vinegar, clove and citric oils, and corn gluten. Active ingredients in natural controls include Neem oil, canola oil, mild soaps, and pyrethrius. One safe and effective product on the market is Greencure.

5. CHECK YOUR MULCH

Although use of mulch is a good way to reduce water consumption and weeds at your Montgomery Alabama real estategreen home, some mulch contains potentially hazardous materials. To ensure that your brand/type is not harmful, look for an MSC (Mulch and Soil Council) product label on the bag.

6. UTILIZE ALTERNATIVE PRODUCTS

Whenever possible, use peat substitute rather than peat, which is a non-renewable resource whose loss damages both the environments and animal habitats. Likewise, consider using artificial stone rather than quarried stone for ornamental purposes. Rain barrels are an excellent way to capture an important natural resource, and the use of electric mowers and garden equipment rather than gas-powered greatly reduces the number of released pollutants.

7. READ AND FOLLOW DIRECTIONS!

If you must use non-organic gardening materials, please apply them responsibly. It is important that you limit their use to late afternoon or early evening when beneficial pollinators are less active and therefore less susceptible. Carefully measure recommended amounts and do not exceed the limit on the label.

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Montgomery Real Estate Tax Deductions You Don't Want to Miss - Part II

Saturday, April 9, 2011
by The Hat Team

PART II--RENTAL PROPERTY

Overall, Montgomery rental property provides more tax benefits than almost any other investment. The deductions listed below are the most common, but you are urged to consult with your accountant and/or the IRS regarding your personal situation.montgomery real estate

  • MORTGAGE INTEREST: This can be a fairly large deduction if you are carrying a mortgage on your rental property. Other interest deductions can be for loans for improving the property and interest on credit cards for goods or services used in a rental-related activity. (Note: It is much easier to maintain records if you keep your personal credit card(s) separate from a business credit card.)
  • DEPRECIATION: The actual cost of rental property is not fully deductible in the year in which it is purchased. Residential rental property must be depreciated over 27.5 years.
  • HOME OFFICE: If certain requirements are met, you may deduct your home office expenses from your taxable income. This deduction applies not only to space devoted to office work, but also to a workshop or any other home workspace you use for your rental business. A portion of a workshop used in connection with your Montgomery rental property may also be deducted.
  • REPAIRS: Usually the costs of repairs to rental property are fully deductible in the year in which they are incurred if they are ordinary, necessary, and reasonable in number. Examples of deductible repairs include repainting, fixing gutters, leaks, or floors, plastering, and replacing broken windows.
  • INSURANCE AND LOSSES: You can deduct the premiums you pay for almost any insurance for your Montgomery real estate. The list generally includes fire, theft, and flood for the property itself, as well as landlord liability insurance. (Note: If you have employees, you may also deduct their health and workers’ compensation insurance.) If you sustain losses due to fire, flood, or theft, you will most likely be able to deduct at least part of the loss, depending on the extent of damage and your insurance coverage.
  • ADVERTISING: Expenses related to advertising your rental are deductible.
  • TRAVEL: If it is necessary for you to travel a long distance for rental activity, you can typically deduct your airfare, hotel bills, meals, etc. Make sure that you claim only those costs directly related to your rental. The IRS scrutinizes these types of deductions carefully, so be sure to carefully document your expenses. If your travel is relatively close, you use your own vehicle, and your travel is related to your rental property, you can either take a standard mileage rate deduction or keep records for related vehicle expenses (gas, upkeep, repairs). To qualify for the standard mileage rate, you must use the standard mileage method the first year you use a car for your business activity. Moreover, you can’t use the standard mileage rate if you have claimed accelerated depreciation deductions in prior years, or have taken a Section 179 deduction for the vehicle.
  • LEGAL AND PROFESSIONAL SERVICES: Expenses paid to an attorney for an eviction, a property management company, tax advisors, employees and independent contractors, etc., are often deductible as they are considered part of operating costs.
  • EMPLOYEES AND INDEPENDENT CONTRACTORS: Whenever you hire anyone to perform services for your Montgomery rental property, you may deduct their wages as a business expense. Examples include a resident manager, cleaning service, landscaper, remover of snow or trash, and the like.
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10 Tips For Creating Curb Appeal In Your Montgomery AL Home

Friday, April 1, 2011
by The Hat Team

If you’re trying to sell your Montgomery AL home this spring, curb appeal is a crucial element in attracting busy home buyers. In this buyers’ market, outside “staging” has become as important as interior preparation for a successful showing, as drive-by lookers often make the decision not to investigate further if they are unimpressed with the exterior of your property. It is important, therefore, that yhouseou consider the following tips:

        1. Clear away leaves, fallen branches, and summer residue to enhance appearance and ensure safety.

        2. Remove and replace brown or dead plantings in beds. Think about adding perennial creeping plants and those with colorful foliage and/or berries to add color, shape, texture, and interest to your yard.

        3. Clean out gutters and downspouts for both looks and safety purposes.

        4. Mulch plant beds. This action helps plants retain moisture, protects them from freezing, and adds appealing colors and textures to the property of your Montgomery AL home.

        5. Prune and thin trees and bushes. Three purposes in doing this: the health of the plants, human safety, and esthetic appearance.

        6. Inspect edging and replace that which is rotting or broken. Decorative brick, concrete, or metal edging can be quite attractive.

        7. Replace worn-out or dated light fixtures, door hardware, house numbers, and mailbox. Think about using those made of copper, bronze, or brushed nickel for an interesting and appealing effect.

        8. Install outdoor lighting. By doing so, you will ensure the safety of nighttime buyers as well as highlight the beauty of your Montgomery AL home. Use lights along pathways, in trees, on garage doors, in flower beds and as a means to illuminate your front door.

        9. Replenish any fading or peeling paint (on doors, trim, and steps), rusty railings, or rotting wood.

        10. Keep seasonal decorations simple. Choose holiday décor that will enhance your home rather than detract from it.

These ten tips for creating curb appeal can easily transform your home into one that attracts would-be buyers and invites them to come inside.

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