Havasu Home Talk

I received an email that the following changes have been made to Lake Havasu City codes for residential properties:

Mobile Home Living Area: Eliminates conditional use permit requirement for living area expansion of mobile homes.

Height Exemptions for Solar Panels: Allows solar panels to exceed the underlying building height limit by up to 3 feet.  The panels must also be setback 2 feet from the roof edge.

Parking: Eliminates the requirement for RV parking within multi-family residential developments.

Lighting Wattage: Clarifies maximum unshielded lighting standards and listed types of bulbs in lumens.  The standard is 375 lumens which is equivalent to 25 watts incandescent or 7 watts compact fluorescent.

Courtyard walls: Allows courtyard walls up to 12 feet tall and maximum 20 feet wide to encroach within 10 feet of front property line.

Residential Setbacks: Allows RE, R1 and R2 properties a  20 foot front setback for non-garage structures and a 20 foot rear setback for up to 50% of the house width.

Second Utility Meter: Allows a second utility meter for residential accessory structures.

Pool Enclosure: Amended pool enclosure standards to clarify which types of barriers are required between the home and swimming pool.

For more information, Contact:

Lake Havasu City Planning Division, 2330 McCulloch Blvd N. Lake Havasu City, AZ 86403 Phone: 928-453-4148 http://www.lhcaz.gov

FHA announced today, Wednesday January 20^th some pretty significant changes that will take affect over the coming months. A copy of the press release is attached and you can also access it from the FHA website by clicking here. FHA is making these changes in an effort to strengthen their financial position while also helping to finance and sell more homes. However, FHA, like most every other servicer, is still suffering losses from defaulted mortgages. Highlights of the changes are:

1. Increase the up-front Mortgage Insurance Premium from 1.75% to 2.25% - This will happen sometime this spring.

2. Increase Minimum FICO score to 580 – This will have no affect on you as most all mortgage servicers have already raised their minimum FICO score requirements to 620. This may however, trigger the servicer to increase their minimum FICO score to 640 as we’ve been hearing whispers of already.

3. Reducing the Seller concessions/contributions from 6% to 3% - This will be posted sometime in February and go into affect sometime the early part of summer.

4. Increased enforcement on FHA Lenders - There will be additional information posted along with the neighborhood watch starting in February. There will be additional enforcements. This affects mostly the way that lenders approve mortgages and we will see additional investor/industry guidelines because of this change.

With 3.5% down payment still allowed, up to 6% seller contribution, Upfront MIP only 1.75%, low interest rates (see below for our 2010 prediction on rates*), good inventory, and $8000 and $6500 Tax Credit through contracts written by April 30 2010……..NOW is the Time To Purchase.

Many thanks to Lonnie Stevenson at Evergreen Home Loans for the information above.  If you would like to contact him for loan pre-approval and prequalification, you may reach him at 928-854-9400 or lstevenson@evergreenhomeloans.com

Don’t forget to visit our MLS searching website http://HavasuHomesNow.com or click on our “Search The MLS” button on the top right hand side of our blog at HavasuHomeTalk.com

Some news in on the Arizona Department of Housing’s “Your Way Home AZ” down payment assistance program:  The program has committed all of the allocated funds and no new applications will be taken.

If you have already gone under contract on a home under this program and you’ve taken the homebuyer class, then you’re in the clear.

If you were considering using the program but haven’t acted yet, then it is too late, but you may still qualify for the other program offering a Tax Credit to homebuyers.  Contact us for more information…  The Concierge Service Team 928-854-5511.

This really helpful, informative article from my friend Lonnie Stevenson at Evergreen Home Loans should really help answer some of the questions you might have about the new Home Buyer Tax Credit.

If you would like a PDF version of this document, please let me know.  Just give The Concierge Service Team a call at 928-854-5511 or email Dominic@TCSTnow.com

You can also contact Lonnie Stevenson, Certified Mortgage Panning Specialist at Evergreen Home Loans at 928-854-9400 or LStevenson@evergreenhomeloans.com

General Rules:

• A “first time home buyer” is defined as someone who has not owned a home in the last three years. If you are a “first-time home buyer”, your tax credit will amount to 10% of the purchase price of your new home not to exceed $8,000.

• A “long-time resident” is defined as someone who has lived in the same primary home for 5 out of the past 8 years. If you are a “long-time resident”, your tax credit will amount to 10% of the purchase price of your new home not to exceed $6,500.

• The tax credit does not need to be paid back if you continue living in the home as your primary residence for three years without selling it

• The home must be purchased for less than $800,000 before May 1, 2010. If you sign a binding contract to purchase a home before May 1st, you would need to close on the transaction before July 1, 2010.

• Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit

• You cannot purchase the home from a related party like a spouse, direct ancestor, or direct lineal descendent (child or grandchild); however, you can still qualify for the credit if you purchase a property from siblings, nephews, nieces, and others

• If you are married, both spouses must qualify for the credit

• If more than one unmarried individual is buying the property, the credit can be split up among all the individuals who qualify. However, the total credit taken cannot exceed $8,000 (or $6,500 for “long-time residents”).  Alternatively, if only one of the unmarried buyers qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit.

• The credit applies even if you have co-signers on your mortgage loan

• The credit applies to 1-4 unit homes as long as you live in one of the units as your primary residence – you could live in one unit and rent out the others

How does the tax credit work?
A tax credit is kind of like a gift certificate that you can use to pay your taxes – it reduces your income tax bill on a dollar for dollar basis. Imagine paying your bill at IRS Restaurant, and then later getting an IRS Restaurant gift certificate.
Normally, you would need to go back to IRS Restaurant and buy more food in order to use your new gift certificate. But what if IRS Restaurant allowed you to just turn in your gift certificate for cash? That’s how the home buyer tax credit works! All you need to do is file a form with the IRS after you buy your new home and they will send you a refund check for $8,000 (or $6,500) – just like the example of IRS Restaurant that allows you to exchange your gift certificate for cash! Remember though, you’ll receive the $8,000 (or $6,500) from the IRS AFTER you purchase your new home, so you cannot use the funds to help with your down payment.

For more information about the home buyer tax credit or other recent updates to the mortgage and real estate markets, just give me a call. I would be happy to assist you with your mortgage in the purchase of your new home!
To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, by any person for the purpose of (i) avoiding tax-related penalties or (ii) promoting, marketing or recommending to another person any transaction or matter addressed in this communication. I recommend that you consult with properly licensed legal, tax and investment advisors for specific advice pertaining to your individual situation.

Don’t forget that there’s a time change happening this weekend everywhere…Well, almost everywhere except for here.  Arizona is one of only a couple states who do not participate in Daylight Savings Time – our clocks always stay the same!

So, remember that all your friends in different states are about to “Fall Back” an hour – and they’re going to be on different times come Sunday morning.

Daylight savings time ends at 2:00 am on November 1, 2009 and the clocks in our neighboring states will be set back 1 hour.

Katie Murphy at Hi-Tech mortgage emailed me these statistics today:

MORE ECONOMIC GOOD NEWS

More economic indicators continue to better market expectations.

This past week Consumer Credit fell by $10.3 billion in June, compared with market expectations for a $5.0 billion decline. This is the forth double digit decline in the past 5 months. Households have been aggressively deleveraging. This is not a good signal for consumer spending as credit conditions are tightening.

The Unemployment Rate fell by 0.1 percentage points in July to 9.4%, compared with market expectations for an increase to 9.6%. The rate fell off slightly because a large number of people dropped out of the labor force. This was the first decline in unemployment in more than a year. While good news, the drop was due to a smaller labor force, not an increase in employment.

Hourly, Weekly Earnings and The Average Workweek rose from a record low of 33.0 hours. A longer workweek is a typical signal of an expanding economy, suggesting that the recession, if not already over, will be shortly. Best news is that labor input is starting Q3 on a flat footing, indicating that Q3 will likely show moderate growth.

Factory Orders rose by 0.4% in June, compared with market expectations for a 0.9% decline. This is the third straight month of growth, suggesting that demand for manufactured goods has begun to stabilize. This gives hope to excess inventories lowering and production to again rise.

Pending Home Sales rose by 3.6% in June. It has increased for the fifth consecutive month to reach its highest level since June 2007.

What’s Ahead? – Wells Fargo chief economist John Silva says the recession is winding down as economy is rebounds. His concern has turned to inflation.

The Fed is now turning attention to the growing credit turmoil in commercial real estate and the potential economic impact of inflation.

Lonnie Stevenson at Evergreen Home Loans just emailed me this note:

If you’ve seen the news lately, you know concerns about inflation are increasing. But what does it really mean to you?

The fact is, inflation is a very serious issue, and it will likely be on the rise as 2009 proceeds…and along with it, home loan rates will likely rise too.

To help you learn more about this important topic, I’m sending you a link to a short video, featuring a personal friend and business mentor or mine as well as the nation’s foremost mortgage industry expert, Barry Habib. In this video, you’ll learn how inflation impacts interest rates and what the outlook is for down the road.

Because home loan rates will be on the rise, if you or any of your family, friends, neighbors or co-workers have been considering a purchase or refinance, now’s the time to act.

Please contact me today to discuss your specific situation, and feel free to forward this email and video link along to others that you think might benefit from it as well.

Watch the Video

When an Adjustable Rate Mortgage period ends and the interest rate “resets” or the initial low interest rate changes to what is typically a higher interest rate, there is a chance that the possibility of foreclosure on the home could increase if the owners aren’t able to afford the new higher payment.

Arizona does have a number of loans that are set to peak during the month of September 2010, and then again during the month of December 2011.

It’s probably likely that these are for 5  year Adjustable Rate Mortgages that were made during the 2005 and 2006 during the peak of the market.

There isn’t any way to really track which of these loans are going to  are going to make it to their reset dates.  Many of these homes could already be in Foreclosure, or for some people, there might not be an issue at all.  If the rate resets at a price that the borrower can afford – it’s a moot point.  Life will go on as normal, and the homeowner will continue paying their mortgage.

We’ll continue to monitor the pulse of the market and keep you updated with information.  New home loans are available at very attractive interest rates, home prices are very affordable and there are a number of new homes to choose from – so if you’re thinking about buying a home, now is a great time!

Just got a weekly update in my email on interest rate projections from Katie Murphy at Hi-Tech Mortgage -

Prime rate is at 3.25% and is expected to hold at that rate over the next couple months.

The Discount rate is 0.50%

Fed Funds Rate is 0.25%

11th District Cost of Funds is 1.832% – expected to drop to 1.737% after August 12 – expected to drop to 1.646% after September 23 and down to 1.465% after November 4th.

WHAT DO THESE RATES THIS MEAN?

Well, The Fed Funds Rate is the interest rate that banks charge  to each other for overnight loans made to fulfill reserve funding requirements.  The Prime rate usually runs about 300 basis points – (or 3 percentage points) above the Fed Fund Rate.  The prime rate is used as an index to calculate rate changes to short term loans.  The Discount Rate is the interest rate charged to commercial banks on loans they receive.

None of these rates are tied directly to the rate buyers pay for long term loans such as 30 year fixed rate mortgages.  These rates will affect short term loans like credit card rates, and even some short term housing loans like Adjustable Rate Mortgages.

I’m not an expert on lending – but I know people who are!  If you are thinking about making a home purchase right now – there is a tremendous opportunity right now to experience home ownership with low interest rates, low price and a pretty good selection of inventory available.  Call The Concierge Service Team at 928-854-5511 or email us at Dominic@TCSTnow.com.  You might also want to visit our MLS searching website http://blog.havasuhomesnow.com

This just in from the National Association of Realtor’s Research update:

Pending home sales show a sustained uptrend, rising for four consecutive months with very favorable housing affordability and a first-time buyer tax credit boosting activity, according to the latest survey. The Pending Home Sales Index increased 0.1 percent to 90.7 from an upwardly revised reading of 90.6 in April, and is 6.7 percent higher than May 2008 when it was 85.0. The last time there were four consecutive monthly gains was in October 2004. Lawrence Yun, NAR chief economist, cautions that there could be delays in the number of contracts that go to closing. “Closed existing-home sales have improved but are coming in lower than expected because some contracts are delayed or falling through from the application of new appraisal rules for many transactions,” he said. “Rises in contract activity show buyers are becoming more active even as they face much more stringent loan underwriting standards. Speedy clarification of the appraisal rules could smooth a housing market recovery and support the overall economy.”

In Lake Havasu City – the market pulse since the beginning of the year shows the following for single family home sales:

January 2009 – 85 Sold – $111,038 Average sales price – 140 Days on Market

February 2009 – 102 Sold – $108,031 Average sales price – 113 Days on Market

March 2009 – 148 Sold – $222,883 Average sales price – 128 Days on Market

April 2009 – 162 Sold – $266,544 Average sales price – 155 Days on Market

May 2009 – 137 Sold – $188,469 Average sales price – 115 Days on Market

June 2009 – 159 Sold – $151,478 Average sales price – 103 Days on Market

Things look to be continuing on that upward trend as the statistics for the first quarter of July already show a solid number- coming in at 54 home sales so far.