*1. Don’t buy if you don’t plan to stay*
If you can’t commit to remaining in one place for at least a few years,
then owning is probably not for you, at least not yet. With the
transaction costs of buying and selling a home, you may end up losing
money if you sell any sooner — even in a rising market. When prices are
falling, it’s an even worse proposition.

*2. Start by shoring up your credit*
Since you probably will need to get a mortgage to buy a house, you must
make sure your credit history is as clean as possible. A few months
before you start house hunting, get copies of your credit report. Make
sure the facts are correct, and fix any problems you discover.

*3. Choose carefully between points and rate*
When picking a mortgage, you usually have the option of paying
additional points- a portion of the interest that you pay at closing- in
exchange for a lower interest rate. If you stay in the house for a long
time- say three to five years or more- it’s usually a better deal to
take the points. The lower interest rate will save you more in the long run.

*4. Hire a home inspector*
A home inspector can let you know if you’re about to buy a lemon of a
house or warn you about potential problems. At best, you can move into
the house confident that it’s in good shape; at worst, the inspector’s
report can let you back out of the deal if the house has major,
unexpected problems. Most typically, the home inspection can allow you
to negotiate the home price to account for necessary repairs.

*5. Get professional help*
Even though the Internet gives buyers unprecedented access to home
listings, most new buyers (and many more experienced ones) are better
off using a professional agent. Look for an exclusive buyer agent, if
possible, who will have your interests at heart and can help you with
strategies during the bidding process.

*6. Bonus Tip: Be patient*
Buying a home is one of the largest purchases most people will make in
their lifetime. The key to avoiding buyer’s remorse is to be completely
comfortable before signing on the dotted line.

Lawrence Yun, NAR chief economist, said favorable affordability
conditions have been working with the tax credit. “Clearly the home
buyer tax credit has helped stabilize the market. In the months
immediately following the expiration of the tax credit, we expect
measurably lower sales,” he said. “Later in the second half of the year,
and into 2011, home sales will likely become self-sustaining if the
economy can add jobs at a respectable pace, and from a return of buyer
demand as they see home values stabilizing.”

The PHSI in the Northeast declined 3.3% to 75.1 in March but remains
27.2% higher than March 2009. In the Midwest the index increased 1.2% to
98.9 and is 18.5% above a year ago. Pending home sales in the South
jumped 12.7% to an index of 121.2, which is 28.3% higher than March
2009. In the West the index rose 1.9% to 99.9 and is 8.8% above a year ago.

“Another encouraging sign is the improvement in the availability for
jumbo and second-home mortgages,” Yun said. “As bank balance sheets
strengthen, it is just a matter of time before lending of
non-government-backed mortgages steadily opens up.”

The National Association of Realtors, “The Voice for Real Estate,” is
one of America’s largest trade associations, representing 1.1 million
members involved in all aspects of the residential and commercial real
estate industries.

The Pending Home Sales Index is a leading indicator for the housing
sector, based on pending sales of existing homes. A sale is listed as
pending when the contract has been signed but the transaction has not
closed, though the sale usually is finalized within one or two months of
signing.

The index is based on a large national sample, typically representing
about 20% of transactions for existing-home sales. In developing the
model for the index, it was demonstrated that the level of monthly
sales-contract activity parallels the level of closed existing-home
sales in the following two months. There is a closer relationship
between annual index changes (from the same month a year earlier) and
year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity
during 2001, which was the first year to be examined as well as the
first of five consecutive record years for existing-home sales.

For more information, visit www.realtor.org ^[2] .

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More young people are living with their parents instead of moving out,
postponing the creation of their own households. Meanwhile, more
families are combining households for economic reasons, including the
loss of a home due to foreclosure, said Gary Painter, associate
professor in the School of Policy, Planning and Development at USC.
“With such a significant drop in households nationwide, it is clear the
most recent recession impacted individuals’ decisions to move out on
their own and caused many Americans to join already formed households,”
Painter said in a news release.

The decline in the number of households contributed to the excess supply
of apartments and single-family homes on the market. “The housing and
mortgage industries will feel the impact of this reduction in the number
of households for years to come,” Painter said in the report, which was
sponsored by the Mortgage Bankers Association’s Research Institute for
Housing America, a trust fund that aids research on mortgage markets and
real estate finance. Also, the recession caused a fivefold increase in
the rates of overcrowding, he said. A household that has more than one
person per room indicates overcrowding.

While the analysis incorporates data only through 2008, Painter said the
decline in household formation likely continued through 2009. “Clearly,
given the depth of the downturn in 2009, and the ongoing weakness in the
job market through the beginning of this year, this study gives no
reason to expect that household formation has picked up at all,” he said.

There’s a strong tie between unemployment and household formation rates,
Painter said. The national unemployment rate was 9.7% in March 2010, but
the recession hit younger workers much harder. Workers between the ages
of 16 to 24 peaked at a record high of 19.2% in September 2009, up from
11.8% in December 2007, according to a recent report from the Economic
Policy Institute.

Household formation should begin a return to a more normal level by
2012, as unemployment rates decline, Painter said. But he said there
isn’t a “demographic silver bullet” to solve the overhang of housing
supply in many markets.

However, when conditions do improve, there could be more young adults
becoming homeowners instead of moving into a rental unit, he said.
“Young adults need not only a paycheck, but also a sense that they have
sustainable employment before striking out on their own,” Painter said.
“Typically, many new households are renters, but if young adults
postpone moving out, some may have the ability to save for a down
payment, causing them to skip the rental stage and move right to
homeownership.”

The study, which analyzes data from the past 40 years, examines the
historical impact of recessions and elevated unemployment rates on the
formation of households. Findings include:

-The likelihood of a young adult forming an independent household falls
up to 4% in a recession, depending on the person’s age and the severity
of the changes in unemployment rates.

-The national homeownership rate has fallen to just above 67%, from
above 69%. Renter household formation dropped even more than the
formation of homeownership households.

-Native-born Americans showed a larger decline in household formation
and a larger increase in overcrowding rates than immigrants.

-Parents with higher incomes are more likely to have young adults living
with them instead of moving into the rental market. But children with
parents who have higher financial wealth are more likely to form their
own new rental households.

(c) 2010, MarketWatch.com Inc.

Distributed by McClatchy-Tribune Information Services.

-A smaller percentage of mortgages
were delinquent and the rate of those entering the foreclosure process
slowed in the fourth quarter of 2009, possible signs that the
foreclosure crisis that has gripped many of the nation’s housing markets
is finally starting to ease, a trade group has reported.

“We are likely seeing the beginning of the end of the unprecedented wave
of mortgage delinquencies and foreclosures that started with the
subprime defaults in early 2007,” said Jay Brinkmann, chief economist of
the Mortgage Bankers Association, in a written statement.

The delinquency rate for mortgages on one- to four-unit residential
properties was a seasonally adjusted 9.47% of all mortgages outstanding
in the fourth quarter, down from 9.64% in the third quarter and up from
7.88% in the fourth quarter of 2008, according to the MBA’s quarterly
delinquency survey.

Delinquencies include mortgages that are at least one payment or more
past due but not yet in foreclosure.

Meanwhile, 1.2% of outstanding mortgages entered the foreclosure process
in the fourth quarter, down from 1.42% in the third quarter and up from
1.08% in the fourth quarter of 2008. The percentage of mortgages at some
point in the foreclosure process at the end of the fourth quarter was
4.58%, up from 4.47% in the third quarter and 3.3% in the fourth quarter
of 2008.

The MBA survey covers about 44.4 million loans on one- to four-unit
residential properties, or about 85% of all first-lien residential
mortgage loans that are outstanding in the country. No doubt, the
foreclosure nightmare isn’t over yet.

The percentages of loans 90 days or more past due and loans in
foreclosure process set record highs in the fourth quarter, according to
the report. Many of those loans more than 90 days past due are in loan
modification programs, and some of them have been seriously delinquent
for months waiting for modifications to get finalized.

But the good news is there are fewer problem loans actually entering
delinquency—likely a result of fewer layoffs, Brinkmann said. “We
normally see a large spike in short-term mortgage delinquencies at the
end of the year due to heating bills, Christmas expenditures and other
seasonal factors. Not only did we not see that spike but the 30-day
delinquencies actually fell by 16 basis points from 3.79% to 3.63%,” he
said. He added that the non-seasonally adjusted 30-day delinquency rate
has only dropped three times in the past between the third and fourth
quarter—”and never by this magnitude.”

Depending on the fate of seriously delinquent mortgages—whether they
are cured with modifications or ultimately enter foreclosure—the
percentage of mortgages somewhere in the foreclosure process could start
to see a gradual decline in the second half of the year, he said during
a conference call with reporters.

If normal seasonal patterns hold, there could be a bigger drop in the
30-day delinquency rate in the first quarter of 2010, Brinkmann said.
That would be a positive sign for the months and years ahead. “The
continued and sizable drop in the 30-day delinquency rate is a concrete
sign that the end may be in sight,” he said. “With fewer new loans going
bad, the pool of seriously delinquent loans and foreclosures will
eventually begin to shrink once the rate at which these problems are
resolved exceeds the rate at which new problems come in. “It also gives
us growing confidence that the size of the problem now is about as bad
as it will get,” he said.

According to the MBA data, Florida was the most problematic state, in
terms of delinquencies. Twenty-six percent of Florida mortgages were one
payment or more past due at the end of the year, and 20.4% of mortgages
in the state were 90 days or more past due or already in the foreclosure
process.

Lawrence Yun, NAR chief economist, said there is still some delay between shopping and closing that affected current sales. “Most of the completed deals in January were based on contracts in November and December. People who got into the market after the home buyer tax credit was extended in November have only recently started to offer contracts, so it will take a couple months to close those sales,” he said. “Still, the latest monthly sales decline is not encouraging, and raises concern about the strength of a recovery.”

Total housing inventory at the end of January fell 0.5% to 3.27 million existing homes available for sale, which represents a 7.8-month supply at the current sales pace, up from a 7.2-month supply in December. Raw unsold inventory is 9.6% below a year ago, and is at the lowest level since March 2006.

“Activity should be picking up strongly in late spring as buyers take advantage of the tax credit, which is critical to absorb distressed properties reaching the market and to continually chip away at inventory,” Yun said. “With a downtrend in the number of homes on the market, especially in the lower price ranges, values are beginning to firm but with great variance around the country.”

The national median existing-home price for all housing types was $164,700 in January, unchanged from a year earlier. Distressed homes, which accounted for 38% of sales last month, continue to downwardly distort the median price because they typically are discounted in comparison with traditional homes in the same area.

A parallel NAR practitioner survey shows first-time buyers purchased 40% of homes in January, down from 43% in December. Investors accounted for 17% of transactions in January, up from 15% in December; the remaining sales were to repeat buyers. The survey also shows that buyer traffic increased 9.4% in January.

NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said buying a home in the current environment has become more challenging. “First-time buyers and others who need a mortgage are increasingly losing out to all-cash investors for the best bargains in many areas, particularly for foreclosed homes where cash is king,” she said. “Inventory conditions vary by price range, and of course there are major differences depending on location. Realtors are the best buyer resource for strategies on winning bids in increasingly competitive markets,” Golder said. “The bidding for more desirable homes will only accelerate between now and the April 30 contract deadline to qualify for a tax credit of up to $8,000.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage edged up to 5.03% in January from 4.93% in December; the rate was 5.05% in January 2009.

Single-family home sales fell 6.9% to a seasonally adjusted annual rate of 4.43 million in January from a level of 4.76 million in December, but are 8.6% above the 4.08 million pace in January 2009. The median existing single-family home price was $163,600 in January, down 0.4% from a year ago.

Existing condominium and co-op sales dropped 8.1% to a seasonally adjusted annual rate of 620,000 in January from 675,000 in December, but are 38.1% above the 449,000-unit level a year ago. The median existing condo price was $172,400 in January, which is 1.4 % higher than January 2009.

Northeast
Regionally, existing-home sales in the Northeast fell 10.9% to an annual pace of 820,000 in January but are 22.4% above a year ago. The median price in the Northeast was $245,300, a gain of 8.8% from January 2009.

Midwest
Existing-home sales in the Midwest declined 6.9% in January to a level of 1.08 million but are 8.0% higher than January 2009. The median price in the Midwest was $130,300, which is 1.0% below a year ago.

South
In the South, existing-home sales dropped 7.4% to an annual pace of 1.87 million in January but are 12.0% above a year ago. The median price in the South was $140,200, down 2.0% from January 2009.

West
Existing-home sales in the West declined 5.2% to an annual rate of 1.28 million in January but are 7.6% higher than January 2009. The median price in the West was $203,400, down 5.8% from a year ago.

For more information, visit www.realtor.org ^[2].

If you have gone through-or are considering-a divorce, take a close look at the issues involving your credit. Pay attention to the status of your credit accounts. If you maintained joint accounts during your marriage, it is important to continue to pay the regular required payments. As long as there is an outstanding balance on your joint account, both you and your spouse are responsible for payment. Generally, any debt incurred by your spouse is also your responsibility, regardless of whose name is on the account.

If you are contemplating separation or divorce, you may wish to contact your creditors in writing to ask that they close your joint accounts (or accounts where your spouse is an authorized user). The creditor cannot close a joint account because of a change in marital status, but they may close a joint account at either spouse’s written request. The creditor does not have to change a joint account to an individual account, and may ask you to reapply for a credit account as an individual and then, on the basis of your application, extend or deny you credit.

Consulting an attorney regarding these sensitive matters is always prudent.

Look out for more of my Information for Life

Sincerely,

Tim Barlow

Cornerstone Home Mortgage
www.timloans.com
Tel: (360) 570-0106
Fax: (360) 570-1001
Direct:(360) 250-3400
3604 Henderson Blvd. SE
Olympia WA 98501

Stay tuned for more helpful videos, or go to WAHomeowners.com to view all six videos.

First Time Homebuyers The current law is extended until April 30, 2010. Buyers have until that date to have a signed purchase agreement. There is an additional 60 day grace period to complete the financing. More first time homebuyers are eligible because the new law raises the annual income limits from $75,000 to $125,000 for singles and from $150,000 to $225,000 for married couples.

Current Home Owners Over 60 percent of current home owners will be eligible for a tax credit of up to $6,500 if they purchase a home by April 30, 2010. These homebuyers must have lived in their home for five consecutive years over the previous eight years to qualify. Qualified homebuyers can get the credit if they purchase a home for $800,000 or less as their primary residence between November 7, 2009 and April 30, 2010. The income limits are the same as the First Time Homebuyer listed above.

Please see the links below for details regarding the new legislation:
Frequently asked questions regarding the new Homebuyer Tax Credit.
A chart comparing the original Tax Credit with the new, expanded Tax Credit.
Press Release (11/06/09) Washington REALTORS & the new Tax Credit.
REALTORS helped State Leaders Express Support

Thousands of WA REALTORS® urged Congress to extend the tax credit Nearly 5000 REALTORS® in Washington (more than 27% of our members) helped convince Congress that the home buyer tax credit is critical to the nation’s economic recovery. Washington REALTORS® was recognized by the National Association of REALTORS® because it had the fifth largest state association response rate to the Call for Action in the country.

This victory helps the economy, helps put more Washington residents into homes and helps generate transactions for our members. This is a major benefit of being a member of the REALTOR organization.

Please pass this information along to members in your office, to your clients and even to Non-REALTOR licensees to let them know they should be REALTORS too!