Your Property

Saturday, March 24, 2007

MARKETS AND INSIGHTS

MORTGAGE:

Current Rates

30 Year ARM	6.16
15 Year ARM	5.90
5 Year ARM	5.91
1 Year ARM	5.40

Whats Up With the Sub Prime Market

Well its anybodys guess really, but this part of the totla mortgage market makes up about 20%
of the whole and its in trouble. We read that about twenty large sub prime lenders are going under or are in serious trouble. The big question is how is this going to affect the other 80%.
The good news is that interest rates appear to remain steady, the last thing the Govt wants is to make this worse. A stock market crash doesnt affect the world the way a real estate crash does partly because a real estate crash hurts the banking system....and that can throw us into a recession or worse.

Accordingly "Senator Dodd, chairman of the Senate Banking Committee, plans to introduce legislation to protect homeowners from foreclosure and to crack down on predatory lenders who pushed high-risk loans on unsuspecting borrowers. Clinton is pushing for a federally mandated "foreclosure timeout" that would give homeowners more time to catch up on their payments, and she wants to curtail the prepayment penalties that make it hard for troubled borrowers to refinance". read more here

What can you do to keep your costs down now?

Always look to have brokers compete for prices. If you are in the market for a re-Finance or a new mortgage get some bids from reputable companies and have agents compete for your business. These products have a lot of negotiating room and you can save.

This week we will focus on ARM’s because the interest rate increases are increasing monthly payments for lots of people. Many of the 3 and 5 year ARM’s will reset to market rates and that will certainly cause some pain.

Learn more about adjustable mortgages and how they work. There is a good article that will help explain how they work and why they are good in certain interest rate environmentsand risky in others.

INSURANCE:

These are the fixed costs that you have some control over. Variable costs such as vacancies and new roofs you weren’t counting on can be contained by keeping a close eye on your fixed costs. Insurance products are very competitive and you can save on monthly premiums by having insurance agents compete. Get some competitive bids, they are free to you and should be part of your periodic search to keep more of your money.

Your Property Path has a good article on how to lower insurance premiums. For example, did you know that i f you buy a house close to a fire hydrant or in a community that has a professional rather than a volunteer fire department and your insurance may be cheaper. Much more on this site…

REAL ESTATE:

Real estate housing markets are always difficult to talk about in a general way…Its always local. Sales are off 10-15% and some of the big mover markets such as San Diego Las Vegas and South Florida are feeling the correction. Although there are doom and gloom bloggers and its important to listen to them to so as to get some balance, its not, at this point, more than a correction except in some markets.

The National Association of Realtors research shows that the worst may be over. Please, having seen a few cycles now…nobody really knows the future…but this looks hopeful to us. Look at the pdf on the NAR site...its not that bad.

SO NOW YOU OWN IT..

This week we will look at those of you who own and have a vacancy. This is one of those variables you have little control over. What you can do is keep your fixed costs down is to have competitively priced insurance and mortgage carry costs.

You have no control over when a tenant moves and leaves you with less income with unchanged fixed costs, BUT you can control how long its going to remain vacant.

When the apartment is vacant, it’s the perfect opportunity to bring it up to snuff. Consider this an investment, for example: Curb Appeal for rent is a very important part of how to rent faster and at the higher rental dollar. Paint if it needs it...cheap way to make a unit bright and appealing. Use light colors to make rooms look more spacious. Leave lights on in each room, and leave blinds open to make rooms look brighter and large r.

Of course, a unit that is professionally marketed will reach the right audience and rent faster at less advertising costs. I magine who or what segment of the rental market would be interested in your space. Consider the profile of the people you are trying to reach and then advertise in the places where they would be likely to look for a rental unit. We have a wonderful article full of advertising tips and tricks.