The people who are using reverse mortgages tend to be older single females who have been in their homes for quite some time.

Seven percent of reverse mortgages are held by people in active-adult communities. That is trending upward.

Of seniors with a mortgage, the average age is 63 years. Of seniors with no mortgage71 years. Of seniors with reverse mortgages, 77.

People are using the sale of a prior home to fund the purchase of a new home. In 2001, 71 percent used the sale of a previous home to finance a 55-plus home. That was 55 percent in 2009. There is an increase in people using savings or cash on hand, clearly one impact of the fall in home values and home equity.

While reverse mortgages are not for everyone, they have changed and the high up front cost of financing has changed. It helps peole stay in their homes that have equity. It can provide income and peace of mind. I’m not an expert and this is not my field, but for some it may be worth looking into. Particuarily in this economy. In Pagosa George Johnson, with Wells Fargo, would be a reverse mortgage expert to contact.

Wrong.

Credit reports typically don’t include information about checking and debit accounts, nor non-sufficient fund issues unless they somehow impact an attached credit account.

Also one in five (21 percent) thought checking their credit scores would hurt credit scores. Nearly as many (18 percent) thought accessing their credit report, would hurt their credit scores.

Wrong and wrong.

Obtaining your credit report and credit score has no bearing on your credit standing.

In fact, if you are thinking about buying real estate in Pagosa Springs, you should check your credit reports regularly. Every year, federal regulations allow you three free credit reports (ONLY through AnnualCreditReport.com), one each from the three credit reporting agencies, Equifax, Experian and TransUnion.
If you visit some other sound-alike, come-on web site, instead of AnnualCreditReport.com, expect to pay for credit services you may not need in exchange for that so-called “free” report. From AnnualCreditReport.com, get the three free reports all at once if you haven’t seen them for years. Otherwise get one from a different company every four months to regularly monitor your credit report for errors, identity theft, black marks you may need to work on and other issues.

For your credit score it will cost you a nominal fee (it’s worth it) paid to each of the three credit reporting agencies.

A credit score — virtually always examined by lenders when you apply for a real estate mortgage, credit card, car loan, other credit, even homeowners insurance and other financial accounts — is a numerical rendition of your creditworthiness.

Scores range from about 300 to about 850. The higher the number the more likely you are to get credit and the more likely you are to get cheap credit. Your score should be at 760 or above to land the best interest rate, according to FICO, a leading credit scoring system provider. So if you’re looking for that dream home in Pagosa Springs, check your credit before your search to help you find out what your credit score will allow you to buy.

Assuming a buyer has the down payment and good credit to buy that Pagosa Springs home they yearn for, let’s look at some comparisons to determine their best avenue to take for an investment.

Under the current federal tax guidelines, if a person put $6125 in a certificate of deposit that earned 2% annually, it would be worth $6,762 in five years and the profit would be taxed as ordinary income. In the stock market, that person could take more risk and possible grow that $6,125 to $7,500. If the stock were held for at least one year, the profit would be taxed at favorable long-term capital gains rates…but still taxed.

On the other hand, if the $6,125 were used as a down payment for a $175,000 home that went up in value only 1% per year, the equity would grow to $30,575 in the same five year period of time based on appreciation and amortization. Currently, the gains on principal residences up to $250,000 for an individual and $500,000 per couple are excluded from taxation.

Simply put, even in this lagging real estate market, there is no better place to make an investment than in real estate. There may never be a better time to take advantage of the historically low interest rates and fabulous inventory to choose from.

JoAnn: For the past three years, home prices have consistently been going down and buyers have just not been willing to step off that ledge. They were thinking, “If no one else is buying, are prices going to fall a little further?” In the last few months sales have picked up and we have a sense that we have finally seen the bottom.

Q: What’s your advice for buyers thinking about entering the market?

JoAnn: You can’t time the market. Buyers need to work with a Realtor who can help them make wise investment choices, not just the cheapest choice. (That would be me!)
These days, everyone is reconsidering what value is. Even when the market was raging, buyers were making decisions that were aimed only at making money rather than what they would really enjoy owning. I think you need to have a balance of both investment and enjoyment. Never, ever buy something you wouldn’t be proud to live in, if it were your only home for the foreseeable future.

Q: What’s in your crystal ball?

JoAnn: I think you’ll see an increase in urgency because of the low interst rates we are enjoying and the fabulous inventory we have to choose from. This won’t last forever and I can see people kicking themselves for not taking advantage of their once in a lifetime opportunity in 2010.

Homebuyer tax credit ~
The Senate passed HR 5623, which extends the mandatory closing date to qualify for the homebuyer tax credit. The contract deadline does not change – homebuyers must have a contract signed by April 30, 2010 (an exception for active duty military) – but the previous closing deadline of June 30, 2010, has been extended to Sept. 30, 2010.

National Flood Insurance Program ~
Congress once again reauthorized a short-term extension for the National Flood Insurance Program to Sept. 30, 2010. The bill, HR 5569, makes the program retroactive to May 31, 2010, the date the program went on hiatus.

Lower interest rates on mortgages may buoy refinancing, putting more cash into consumers’ hands to funnel into the economy. They also make homes more affordable as the housing market copes with the absence of government support.

Mortgage rates for 30-year fixed mortgages, the most widely used loan, were 4.49 percent Tuesday afternoon, down from 4.53 percent the same time last week, Zillow Mortgage Marketplace said on Tuesday.

The rate represents the lowest recorded since the Zillow Mortgage Marketplace launched in April 2008. The 30-year fixed mortgage rate fell sharply last Thursday to 4.45 percent then hovered near 4.50 percent for the remainder of the week, Zillow said.

Fifteen-year fixed mortgage rates were 3.97 percent, down from 4.04 percent the week prior. Rates for 5/1 adjustable-rate mortgages, or ARMs, set at a fixed rate for five years and adjustable each following year, were 3.44 percent, down from 3.50 percent the week prior.

While low rates and high affordability helped the housing market gain ground over the past year, the sector has struggled since the April 30 expiration of popular home buyer tax credits.

To take advantage of the $8,000 first-time buyer credit or a $6,500 credit for existing owners buying a new residence, people had to sign purchase contracts by April 30 and close by June 30. There is currently a push in Congress to extend the contract settlement by three months.

Mortgage rates are linked to yields on Treasuries and yields on mortgage-backed securities. Yields move inversely to price.

–The Associated Press

The last highest unemployment number was 12.1 percent in March, 1989. Historically (since 1976, when the BLS began compiling reliable unemployment statistics for Archuleta County) the area’s worst unemployment occurred during the first half of 1978 (January through June) when Archuleta County suffered an average 26.7 percent average unemployment rate, with May 1978 holding the record for unemployment in the region with a rate of 30.9 percent.

While the BLS lists the March 2010 rate as preliminary (standard for initial reporting), in every instance over the past year the BLS has either revised those figures upwards or held them consistent with the initial report. For instance, the February 2010 figure stands at 10.6 percent, the same as the preliminary report, while the January 2010 report was revised a tenth of a percentage point, from the 10.2 percent preliminary number to 10.3 percent, as was finally reported.

Traditionally, February and March are the months showing the highest numbers of unemployed in Archuleta County, while December, January and April tend to also show high numbers, (the trend showing an exception in 1978).

What is telling about 1978 is the size of the civilian labor force (CLF) in Archuleta County at that time. By May 1978, the CLF in the county had increased 54 percent from January 1976, indicating a population boom in the area.

Simply stated, the CLF is the sum of the numbers of employed and unemployed.

In January 1976, Archuleta County’s CLF was 1,048 and by May 1978 had climbed to 1,619. Not surprisingly, the CLF had dropped to 1,303 by March 1979 as workers apparently fled the county seeking other work.

In fact, historically, Archuleta County has shown numerous boom and bust cycles, with decreases in the CLF size following high unemployment rates and, conversely, an increase in CLF numbers following sustained low unemployment numbers.

However, last year defies previous trends as CLF numbers increased following high unemployment and vice-versa. For instance, during March of last year, the highest unemployment rate of 2009 (9.4 percent) saw a CLF of 6,105 in the county, followed by an almost 10-percent increase in the CLF through July of last year — and a drop in unemployment by 1.6 percent. And while the CLF decreased briefly after the unemployment rate climbed again last November, those CLF numbers showed a steady increase in the months from December through March.

While it stands to reason that an increase in population (as implied in the CLF) would skew unemployment rates higher — more people relative to fewer jobs available — the increase in the CLF over the past few months contradicts the usual trend shown during the past 34 years.

Quite possibly, the trend from the past year could reflect the extension of unemployment benefits. Last year, Congress passed two extensions for unemployment benefits, with another extension passed last month. Traditionally, unemployment benefits stopped after six months (26 weeks); the last extension passed by congress allows the unemployed to collect benefits for up to 99 weeks.

Nationally, the average unemployment check amounts to 36 percent of wages earned. While surviving on about two-thirds of their prior wages, the unemployed in Archuleta County may feel secure enough with current benefits to weather the storm.

However, June could indicate a drop in the local CLF if the unemployed with school-age children leave the county after the end of the school year.

Nationally, the unemployment rate held steady at 9.7 percent, with most analysts predicting that number will drop slightly in the latter half of this year. Unfortunately, most analysts also agree that unemployment will remain above 8 percent through 2012.

Worse news is that just one in five people who were out of work last summer have found a job since then. A Rutgers University report released earlier this week indicated that only 21 percent of job seekers unemployed since last July had landed a job by March of this year.

Last month, the national U-6 number (total unemployed plus those who have either given up looking for work or have dropped off unemployment benefit rolls, plus workers with part-time employment but desire full-time employment) climbed to 16.9 percent, a tenth of a percentage point from the previous month.

U-6 numbers are not reported at the county level, so it is impossible to determine the full unemployment situation in Archuleta County.

With “full employment” defined as an unemployment rate of about 4 percent, the U.S. would need to create over 11 million jobs in the next month to achieve that level of employment. By the same token, Archuleta County would need to see the creation of over 400 jobs to claim full employment.

Source: The Pagosa Sun 5/6/10

If you are in the market for a new home, a car or even a cell phone, it is more important than ever to make sure your credit is in great shape.

Whenever you apply for any loan or even a job, your credit is scrutinized to assess if you are a “good credit risk.” If you have a low credit score or a rocky credit history, you will see it in higher interest rates that can cost thousands of dollars more than someone with good credit.

The first step to keeping your credit in good shape is to check your credit report. Some things to look for include:

* ERRORS ON THE REPORT
Credit report errors are surprisingly common and can take months to correct. Regularly monitoring your credit report can help you catch mistakes early.

* DEBT TO CREDIT RATIO
If you are maxing out your credit cards, lenders take this as a sign that you are borrowing as much as, or more than you can handle. Keep your balances at least 50 percent below your credit limit.

* LATE PAYMENTS
Making all your payments on time means you avoid a black mark on your credit report and can save you hundreds of dollars in late fees.

* OLD ACCOUNTS
Consider leaving old accounts open even if you don’t use them much anymore. The length of your credit history is a factor in your credit score so it pays to keep accounts open.

Checking your credit standing with a service like FreeScoreOnline.com means you will instantly receive your credit scores from the 3 credit bureaus as well as credit monitoring and alerts.

When you sign up for credit monitoring, an authorized agency will notify you whenever an update is made to your credit report. It’s a great way to keep track of your credit standing and you don’t have to remember to check your credit report and score several times each year. Credit monitoring is also a good way to catch identity theft early.

Get your free credit scores with a Credit Diagnosis trial at FreeScoreOnline.com. Now, more than ever, having good credit is important, so keep yours in top shape.

Sponsored content provided by ARALifestyle.

                                            
The average rate on a 30-year loan has jumped from about 5 percent to more than 5.3 percent in just the past week. As mortgages get more expensive, more would-be homeowners are priced out of the market — a threat to the fragile recovery in the housing market.

 And if you wanted to refinance at a super-low rate, you may have missed your chance. Mortgages under 4 percent are still available, but only for loans that reset in five or seven years, probably to higher rates.

Rates are going up because of the improving economy and the end of a government push to make mortgages cheaper.

For people putting their homes on the market this spring, rising rates may actually be a good thing. Buyers are racing to complete their purchases and lock in something decent before rates go even higher.

It is all about affordability. For every 1 percentage point rise in rates, 300,000 to 400,000 would-be buyers are priced out of the market in a given year, according to the National Association of Realtors.

The rule of thumb is that every 1 percentage point increase in mortgage rates reduces a buyer’s purchasing power by about 10 percent.

For example, taking out a 30-year mortgage for $300,000 at a rate of 5 percent will cost you about $1,600 a month, not including taxes and insurance. But the same monthly payment at a rate of 6 percent will only get you a loan of $270,000.

Many analysts forecast rates will rise as high as 6 percent by early next year. If they go much higher, the already shaky housing recovery could stall. And that could slow the broader economic rebound.

In a normal market, with home prices steadily rising, a jump in rates does not cause a big dip in demand.

That is because people know their homes will eventually rise in value, and are willing to accept a higher mortgage payment.

But now home prices are flat nationally and still falling in some places. Potential buyers are nervous about jumping in.

So the question is, should you buy now while rates are low but starting to rise and risk losing equity if home values continue to fall or wait until you think prices have hit bottom but rates are higher. Don’t know? Call me and we’ll figure it out.
Source: In part from Alan Zibel and Adrian Sainz