Thinking of buying a Columbia SC property? Mortgage rates are still near all-time lows, but are being pulled in different directions right now. Borrowers who want to grab these unbelievable rates should act now before the tug-o-war ends.
The Federal Reserve has been doing whatever it can to hold rates down, including printing billions of dollars per month to buy mortgage bonds. But higher mortgage fees, imposed by the Federal Housing Finance Agency, will push rates up later this fall.
Starting Nov. 1, Fannie Mae and Freddie Mac will raise the guarantee fees they charge loan originators. On average, this increase translates into about a quarter of 1 percentage point in interest. It’s almost like the higher fees will be canceled out by the Fed’s open-ended buying program, or QE3.
Rates will likely stay near the lows until the election, he says. What happens next is anyone’s guess.
What if after the election, they say, “We’re stopping (the bond-buying program) tomorrow…” Borrowers who are on the fence should act soon. There is no reason to hold off on buying a Columbia SC property or refinancing at these levels.
Changes Coming for Columbia SC Property Short Sales
A series of new short-sale guidelines that go into effect Nov. 1 are supposed to make the process of short selling easier and speedier. Fannie Mae and Freddie Mac will allow servicers to streamline the short-sale process for borrowers who are in financial hardship and homeowners who have to sell their homes because of a divorce, disability or job transfer. The expedited process will open the door to more short sales as an alternative to foreclosures.
Columbia SC short sales could grind to a screeching halt at the end of the year, and here’s why.
Columbia SC Short Sales – What Exactly Are They?
A short sale is when the bank allows a home to be sold for less than the value of the mortgage. The bank takes the loss, but that loss is generally less than a more costly foreclosure. A short sale is debt forgiveness. Debt forgiveness is taxable. This is where it gets complicated.
The government has been pushing more short sales at Fannie Mae and Freddie Mac through financial incentives, and banks are streamlining the process. Columbia SC short sales have been gaining so much steam, they actually surpassed sales of foreclosed properties this past spring, according to LPS Applied Analytics’ Home Price Index. But all the progress that has been made could end abruptly.
In order to help the huge volume of troubled borrowers and promote more short sales, Congress passed the “Mortgage Forgiveness Debt Relief Act and Debt Cancellation” in 2007. The debt forgiveness from a short sale or a mortgage principal reduction would no longer be taxable. That act is part of many Bush era tax cuts that expire at the end of this year. Without an extension, Columbia SC short sales would grind to a halt, as might mortgage modifications that involve principal reduction.
So what is the possibility of congress extending the tax relief? One Hill-watcher puts it at 60-40. The Senate Finance Committee passed a package of tax extenders right before the recess, including a one year mortgage relief extension, but leadership in the House of Representatives has not figured out how it wants to handle these extenders. With the looming “fiscal cliff,” tax cuts are an increasingly tough sell. This particular extension does have bipartisan support, but that doesn’t always mean passage in Congress, especially around a presidential election.
With great uncertainty as to the fate of the tax relief, some say Columbia SC short sales could get a boost this fall. Borrowers and banks alike may rush to get in before the expiration, which could help boost overall home sales numbers. Stay tuned here, we’ll keep you updated on what happens with Congress and the House on this matter that could greatly affect Columbia SC short sales.
Sometimes, getting a Columbia SC home makeover can make the difference in how an appraiser looks at your home. And we all know, the higher the appraisal, the more likely a bank is willing to finance, or refinance the home, and the amount they’re willing to lend…
Here are the detailed tips given to the homeowners in the video for increasing the value of their appraisal by just getting a home makeover.
- The First Sight. Appraisers can hack off hundreds, even thousands, of dollars from your home’s value just for having an unkempt yard.
- Small Subliminals. You don’t have to redo the entire kitchen. Adding a new faucet can be considered an update and it adds value.
- Address the mess. Clutter isn’t just an eyesore; it costs money too. Experts say a clean, clutter-free house can appraise 10 percent higher than the exact same messy home.
- Out With the Old, In With the New. An old TV can make an entire room look dated.
- The Naked Truth. Carpet on top of carpet will read like there’s a stain. You don’t want to give the appraiser the impression that you’re hiding something.
- Remove Excess Furniture. Maximize your space and how it’s perceived. The less furniture you have in a room, the larger the space looks.
- Everything in Your Home Should Work. If something doesn’t work properly, replace it, fix it or remove it. When people come to see your home — buyers and appraisers — it can be hands on. If there is a knob that is broken or loose, fix it.
- Show Property in Best Light. If there is a feature in your home that is special, point it out. Keep the door open to a phenomenal closet before the appraiser comes.
If you’re thinking of refinancing an existing loan, or getting a loan on a new Columbia SC home, getting a home makeover may make the difference in how much the appraiser values the home. Cosmetics are “not supposed to matter”, but several appraisers interviewed for the ABC news segment said they absolutely do.
Columbia SC foreclosures are slowing as banks are increasingly turning to so-called short sales to avoid the lengthy process of selling properties they once only sold by foreclosures.
The foreclosure process slowed sharply in many states that require courts to review home seizures after a barrage of legal challenges to the process lenders use to seize homes. As those backlogged cases work their way through the system, the pace has picked up again. In many so-called non-judicial states, like California and Arizona, where there have been fewer cases backlogged, the number of foreclosure starts has declined.
The loss of homes remains highly concentrated in a handful of hard-hit states and cities, including Columbia SC.
Columbia SC Foreclosures Shifting More to Short Sales
In a short sale, a lender agrees to accept less than the full mortgage balance when a home is sold. The process saves the lender the cost of maintaining and reselling a foreclosed property.
The decline in the pace of Columbia SC foreclosures also comes as five of the biggest U.S. lenders — Bank of America Corp, Wells Fargo & Co, JP Morgan Chase & Co, Citigroup Inc and Ally Financial Inc — ramp up alternatives called for in a landmark $25 billion settlement with states reached in April. Last month, the monitor overseeing the settlement reported that those lenders provided $10.6 billion mortgage relief in the first four months of the program, most of which represented approval of short sales.
Attorneys general in the 49 states that negotiated the deal had hoped the settlement would prod more lenders to modify loans and write down principal balances for underwater homeowners. The pace of principal write-downs has also been slowed because the federal regulator overseeing Fannie Mae and Freddie Mac has refused to allow the write-downs. Fannie and Freddie hold more than half of all residential mortgages.
Mortgage lenders all require Columbia SC home appraisals to determine the property’s value to make sure they are not lending you more money than the property is worth. Your lender orders the appraisal, and you are responsible for paying the fee. Costs can vary from $250.00 to $500.00. 
The property is the collateral for your mortgage so you can understand their concern that they will be able to get their money back if you default, and they have to foreclose and sell your home.
Lending guidelines have become stricter now because of the record number of foreclosures that have occurred the past few years making it harder to get loans even if you have good credit. An appraisal is just one assurance the lender has that they are making a low risk loan. They are also concerned about your credit and payment history.
What Exactly Is In Columbia SC Home Appraisals?
Columbia SC home appraisals contain the property dimensions, including the lot size and square footage of the home, the number of rooms, upgrades and amenities, the year built and the property location. The appraisal can be done one of two ways. First by using the sales comparison approach, or by using the cost approach.
The sales comparison approach is used for resale property by comparing at least three to five other similar properties that have recently sold and making adjustments up or down based upon the subject property’s size and features. The cost approach is used for new construction by calculating the replacement cost to rebuild the home if it were damaged or destroyed.
The appraised value is what your home is worth in today’s market. If the home does not appraise, you have a couple options. Put more money down, ask the seller for a price reduction, pay for a second appraisal or walk away from the transaction and find another home.
While you don’t get to choose the appraiser, you can make a request that the lender use a local appraiser. The reason a local appraiser is better is they are familiar with the area as opposed to an outside appraiser who doesn’t understand the quirks of your local market. There is no guarantee that the lender will grant your request, but it doesn’t hurt to ask.
It is important to understand the process for Columbia SC home appraisals and their importance when purchasing a home. While you don’t need to be an expert, you should have a general understanding. Your mortgage broker or lender will also be able to answer any questions you may have as well.
If you have any questions about anything having to do with Columbia SC home appraisals, we’d love to hear from you.