Home prices in metro Atlanta have decreased during the past couple of years but the decrease is not nearly as severe as in some other parts of the country. Atlanta prices have never fluctuated wildly and consequently are not likely to do so in the future.
 
Assume a property is selling for $220,000 today. If you purchase it today with a 30-year, fixed rate 80/20 mortgage, your down payment is $44,000 and your monthly payments on the $176,000 mortgage are $1009.15 at the current (approximate) interest rate of 5.5%.  For the sake of illustration, let’s assume a worst case scenario:  Assume that same house depreciates 10% in value over the next year. That means it would sell for $198,000 ($220,000 minus $22,000).
 
While no one knows for sure what is going to happen to mortgage rates in the future, the general consensus is they will increase. Again for the sake of illustration, let’s assume they will increase from the current 5.5% to 6.5% one year from now. If you still want to buy that house with a 30-year, fixed rate 80/20 mortgage, your down payment would be $39,600, your loan amount would be $158,400 and your monthly payment with a 6.5% mortgage rate would be $1010.82…almost exactly the same as your monthly payment for that house today. (Of course, your required down payment will be $4400 less, but your monthly payment will be essentially the same – and the annual tax savings you will get during the year will offset most of that amount.)
 
Nobody can guarantee anything about future home prices or mortgages rates. However, most professionals in the business today would agree that the chances of mortgage rates going up at least a point in the next twelve months are greater than the chances home prices in Atlanta declining by as much as 10%. That means buying a home today – instead of waiting for prices to start going up – is the smarter option.
 
Three final reasons:  FHA loans may be available up with as little as 3.5% down. If you are a first-time homeowner (have not owned a home in the last three years) you are entitled to a federal tax credit up to $8,000 if you purchase and close by December 1, 2009.  There may also be additional tax credits if you buy a qualifying bank-owned home. I can provide additional details of these programs if you like.
 
Please let me know if you know of anyone in Atlanta who may be waiting for a better time to buy. The time is now.  
 
Burt Cloud
Associate Broker
Coldwell Banker Residential Brokerage
404-626-3114

A Reverse Mortgage is a way take out some of the equity that is in your home, which is usually one of the biggest investments families have. Typically, a reverse mortgage is used to supplement the income of older Americans when Social Security income is not sufficient or expensive items arise.

Requirements to participate in a reverse mortgage are be a homeowner 62 years of age or older, own your home outright (or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan) and you must live in the home.

Those who have a reverse mortgage on their home receive monthly payments based on current interest rates, the homeowner’s age, and the value of their home. You can never be forced out of your home even when the payout amount goes to zero as long as your insurance and taxes are current.

In your estate distribution process the money paid out to you is returned to the lender and your heirs receive the balance.

For more information on reverse mortgages: http://www.aarp.org/money/personal/articles/revmortfactsheet.html

 With the recent housing decline, coupled with the general economic decline, many Americans have become upside on their mortgage. That is, owing more than your home is currently worth. Those in this situation are in a tight spot, but do have some options.
 
Not the greatest options:
 
Selling the house: This is not the most attractive option because homeowners are likely to have a loan balance left over after the house is sold equal to the spread between what the house is worth and what is owed.
 
Renting the house: Along with housing prices, rental prices have also experienced a decline. In this economy you are doing very well to rent out a home that you are upside down on equal to your mortgage payment. Renting the home may not be the best option either.
 
The positive options:
 
Trying to refinance your home: talk to your lender about any options you may have to reduce your payment or restructure your loan.
 
Talk with a HUD Certified Counselor: There are government programs that can help those who are in homes they can no longer afford and you may qualify for them. (http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm)
 
Visit Hope Now: This is a site that provides guidance to avoid foreclosure.
 
Many homeowners will qualify for some sort of aide through government programs that are aimed at making housing affordable and the best way to find out what help is available for you is to contact a certified counselor.

The Home Affordability Refinance Program (HARP) has a program designed to allow those with mortgages they can no longer afford to refinance their mortgage with Freddie Mac or Fannie Mae with rates in the 5% range. This program is specifically aimed at those who have no equity in their home and even applies to those who are upside down on their loan.

 
There are a few stipulations to the program as outlined by Laura Sosa-Rocha, a licensed mortgage broker, “there are a few tricks to this program. If you have past mortgage insurance you must, most of the time, go back to your current lender, most new lenders/banks are not allowed to redo the loan if you have mortgage insurance or LPMI, which is lender paid mortgage insurance.”

 
The refinancing of these mortgages is not moving as swiftly as some would hope. Laura adds “most lenders are so backed up you are looking at two to three months in underwriting! Also, a lot of lenders cannot do a Freddie Mac refinance so people are sitting in underwriting for no reason because when they find out its Freddie Mac a lot of times they can’t even do the loan!”

Laura Sosa-Rocha is a Licensed Mortgage Broker and President of Truth and Lending, A Mortgage Corporation. More information can be found at http://www.truthandlending.com/

Congress is passing so much legislation to try and get the economy back on track it can be dizzying keeping track of it all. Specifically to the housing and mortgage industry, several programs have been passed to restructure mortgages and make housing affordable for those with mortgage payments are unaffordable.   

 
One Home Affordable Modification Program (HAMP) program targets those who have lost their jobs, experienced an increase in expenses, or some other hardship. According to Mark Hammond “There’s also a HAMP program for folks who have lost income where the rate can be as low as 2%. The mortgage servicer is required to modify the rate on the loan to where the payment is 31% of their current income.”
 
The cost to the borrower to participate in a HAMP program is zero. Hammond also warns “Don’t pay a fee to anyone for these services. The folks offering to “help” for a fee are the same ones who were pushing the bad loans a couple of years ago.”
 
Mark Hammond is a Certified Mortgage Planner with DTB Financial Services. More Information can be found at http://www.dtbloans.com/