Americans Willing to Spend More to Remodel, Survey Says
Credit.com | AOL | October 15, 2013 | link
Americans are increasingly willing to spend on home renovations, according to a survey that says they are taking on more projects and plan to use more expensive materials throughout the process. Remodeling app Planese outlined in a news release the results of an online survey done with remodelormove.com, in which homeowners were asked roughly 70 questions about their plans to remodel their home or move to a new one. All 5,000 respondents were interested in making some sort of change.
The results indicate Americans are willing to spend 30 percent of their home’s value to remodel, up from 25 percent in 2007 and 28 percent in 2010, though home prices were significantly higher in 2007 and lower in 2010 than they are now. People plan to spend an average of about $102,000 to renovate. How homeowners said they’d use that money offers more insight into the consumer mindset.
Based on the survey results, those looking to remodel increasingly plan to hire professionals for the work and use more expensive materials for the renovation. And as far as what they’re remodeling, homeowners surveyed in 2013 are undertaking more expensive projects by favoring kitchen updates over bathrooms.
Why Now Is the Time for a HARP Refinance
Tracy Hagen Mooney | Zillow Blog | October 3, 2013 | link
Underwater on your mortgage and still haven’t refinanced? You may think that you missed the window or are not eligible, but with interest rates still near historic lows and an expanded Home Affordable Refinance Program (HARP) it may be within your reach.
While it’s true that home prices have risen steadily over the past year and a half, approximately 24 percent of American homeowners are still underwater on their mortgages. This is especially true of those living in areas hardest hit by the housing and economic crisis. The Federal Housing Finance Agency (FHFA) estimates that there are between 1 million and 2 million borrowers eligible for HARP who are underwater are paying above-market interest rates. You could be one of them.
Why do it?
Borrowers nationwide are reaping significant savings — either by lowering their payments, reducing their interest rates and/or securing a fixed rate. Homeowners who refinanced through HARP during the first quarter of 2013 will save an average of $4,300 in interest payments during the first 12 months.
Take homeowners Josh and Kelly in Tampa, FL, who were $80,000 underwater on their mortgage. By refinancing under HARP last year, they were able to lower their interest rate by nearly 2 percent, reducing their monthly payments by about $520.
And HARP is now simpler than ever. So if you were already turned down before, try again because recent changes to the program are designed to help more homeowners no matter how far your home has fallen in value.
5 Signs That Credit Card Reform Is Really Working
In 2009, the Credit Card Accountability, Responsibility, and Disclosure Act became law. The law’s intent was to set limits on certain fees that credit-card issuers charged their customers and to make it clearer to cardholders what they needed to do in order to avoid other fees.
Most of the provisions of the CARD Act went into effect in 2010. Now, three years after the law’s implementation, the Consumer Financial Protection Bureau has come out with a report evaluating the successes and failures of the CARD Act in relation to credit-card customers. Here are five signs that the law has helped achieve its goals.
1. Credit-Card Customers Are Paying Less in Over-the-Limit Fees.
Most credit cards impose a fee if you make charges above your credit limit. For customers who routinely stay nearly maxed out on their credit cards, staying below those limits can be a challenge.
The CFPB report found that over-the-limit fees have become much rarer under the new law. During the fourth quarter of 2008 before the law’s implementation, 16.4 percent of accounts were over their credit limit at some point, and card companies imposed over-the-limit fees almost half the time. By the fourth quarter of 2012, over-the-limit situations affected 12.7 percent of accounts, but card companies almost never imposed fees when that happened — only 3.4 percent of the time.
10 Mortgage Misconceptions
Mortgages are tricky and often hard to understand. Because most people only purchase a home every five to seven years, prospective home buyers understandably don’t spend a lot of time in the interim educating themselves about mortgages and the mortgage process.
With the real estate market picking up and mortgage rates prime for refinancing, Zillow has compiled a list of common mortgage misconceptions based off the results of the just released 2013 Mortgage IQ Survey.
Misconception No. 1:
Your interest rate reflects the true cost of your mortgage
Your annual percentage rate (APR) is actually the figure that represents the true cost of your mortgage. It is inclusive of your interest rate, points, mortgage insurance (when applicable) and other fees, including origination and underwriting fees. It does not include the cost of your homeowners insurance policy. The APR is typically higher than your interest rate because it incorporates the rate and the fees. In fact, when shopping for a mortgage, it is best to compare loans based on APR instead of the interest rate because it gives a better sense of the total cost over the life of the loan.
Misconception No. 2:
Mortgage rates are only released once per day
Mortgage rates for all types of mortgages can change frequently, sometimes dramatically, throughout the day. Because of the rapid changes in mortgage rates and a lender’s ability to control what is offered, it is important to shop around for the best rates. Getting multiple loan quotes is highly recommended.
HARP Can Be the Program for You
In spite of recent improvements in the U.S. economy, a number of housing markets have not fully recovered from the national housing crisis. In these areas, the multi-year decline in home values continues to affect many homeowners, whose loan balances exceed the value of their homes, a situation often referred to as being “underwater” or having negative equity.
To assist these homeowners, the Federal Housing Finance Agency (FHFA) and the U.S. Department of the Treasury worked with Fannie Mae and Freddie Mac to establish the Home Affordable Refinance Program (HARP). Originally launched in April 2009, the program was recently overhauled to extend the benefits of a refinance to more American households. HARP isn’t the only government program available to homeowners who are looking to refinance their mortgages, but it is uniquely designed for borrowers who are current on their monthly mortgage payments and who owe more than their homes are worth.
What can HARP do for you?
If you bought your house a few years ago and are making your monthly mortgage payments but the value of your home has dropped, you may qualify for a refinance under HARP.
Given today’s low interest rates, a refinance could enable you to reduce your monthly payments to free up some of your income to meet other expenses; to shorten your loan term to pay down your mortgage faster and save you money over the life of your loan; or simply to switch from an adjustable to a fixed-rate mortgage for peace of mind that your rate won’t change in the future. More importantly, a number of program changes mean that more borrowers are eligible to take advantage of these benefits, so even if you’ve been turned down for a refinance before, now is definitely the time to review your options again.
Reverse Mortgage: Why It Soon Might Be Tougher to Get
The U.S. Department of Housing and Urban Development earlier this month announced changes to the reverse mortgage program, which allows homeowners 62 and older to pull equity from their homes without making payments. Once the changes go into effect Oct. 1, it may be more difficult to get a reverse mortgage, and homeowners will have access to less of a home’s value. HUD issued new principal limit factors, which reduces the maximum amount a homeowner can withdraw.
Industry experts estimate principal limits will be about 12 percent to 15 percent lower starting Oct. 1. In addition, a new financial assessment requirement means an applicant’s credit history may impact his or her ability to get a reverse mortgage. HUD says the agency made these changes in order to strengthen the program. As a result of the Great Recession and declining home values, the Federal Housing Administration Mutual Mortgage Insurance Fund took a hit, and because the viability of the program depends on that fund’s resources, the agency says it established these new guidelines.
“It’s actually to just to kind of shore up the program,” said Carolyn Fields, a certified reverse mortgage professional in Florida. She further explained the changes. “Bottom line is we’re all living longer, the baby boomers are retiring earlier — this is just to kind of help them plan retirement and just to kind of make sure that the program stays healthy.”