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March home sales and price report

April 17th, 2013

For release:
April 15, 2013

California’s median home price posts highest level in nearly five years as intense competition increases

LOS ANGELES (April 15) – Strong sales in higher-cost coastal regions and heated market conditions drove California’s median home price to its highest level in March since May 2008, while inventory shortages continued to stifle home sales, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported.

“While home sales were essentially flat from February, sales declined moderately from last year, as an extreme shortage of available homes continued to dictate the market,” said C.A.R. President Don Faught. “Statewide inventory dropped 36 percent from last March and was below 3 months for the second time in the past few months. Supply conditions are particularly tight in the lower-priced segment of the market, as inventory for homes priced below $300k plunged more than 50 percent from the previous year.”

Closed escrow sales of existing, single-family detached homes in California totaled a revised seasonally adjusted annualized rate of 417,520, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. March closings were up a slight 0.1 percent from a revised 417,310 in February but down 4.9 percent from a revised 439,260 in March 2012. The statewide sales figure represents what would be the total number of homes sold during 2013 if sales maintained the March pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The statewide median price of an existing, single-family detached home climbed 13.7 percent from February’s $333,380 median price to $378,960 in March, reversing a two-month decline. The month-to-month increase was the highest since C.A.R. began tracking this statistic in 1979. The March price was up 28.2 percent from a revised $295,630 recorded in March 2012, marking the 13th consecutive month of annual price increases and the ninth consecutive month of double-digit annual gains.

“No doubt the dearth of home listings is driving the upsurge in the median price, as is an increase in sales in the higher-priced segments,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Sales of homes priced $500,000 and higher are up more than 34 percent from last year, and have been on a rising trend since early 2012. Sales growth in the coastal regions – Marin, Orange, San Diego, and San Luis Obispo, in particular – helped push the statewide median price up to the highest level in more than four years.”

Other key facts of C.A.R.’s March 2013 resale housing report include:

• The available supply of homes for sale fell significantly in March, falling to a 2.9-month supply, as measured by C.A.R.’s Unsold Inventory Index. The March Unsold Inventory Index for existing, single-family detached homes was down from 3.6 months in February and down from 4.2 months in March 2012. The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate. A six- to seven-month supply is considered normal.

• Mortgage rates edged up in March, with the 30-year fixed-mortgage interest rate averaging 3.57 percent, up from 3.53 percent in February but down from 3.95 percent in March 2012, according to Freddie Mac. Adjustable-mortgage interest rates also edged up, averaging 2.63 percent in March, up from 2.61 percent in February but down from 2.77 percent March 2012.

• Homes continued to move off the market faster in March, with the median number of days it took to sell a single-family home decreasing to 29.4 days in March, down from 34.2 days in February and down from a revised 52.2 days for the same period a year ago.

Note: The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS® throughout the state, and represent statistics of existing single-family detached homes only. County sales data are not adjusted to account for seasonal factors that can influence home sales. Movements in sales prices should not be interpreted as changes in the cost of a standard home. The median price is where half sold for more and half sold for less; medians are more typical than average prices, which are skewed by a relatively small share of transactions at either the lower-end or the upper-end. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold. Due to the low sales volume in some areas, median price changes in March may exhibit unusual fluctuation. The change in median prices should not be construed as actual price changes in specific homes.

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 155,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

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Freddie Mac: Mortgage rates scrape bottom again; 30-year at 3.34%

November 16th, 2012

Mortgage rates have set yet another record low, according to home finance giant Freddie Mac. (Freddie Mac)

Lenders were offering fixed-rate 30-year home loans to solid borrowers at an average of 3.34% this week, the latest in a series of record low mortgage rates, according to home finance giant Freddie Mac.

The borrowers would have paid 0.7% of the loan amount to the lender in upfront fees and discount points to obtain the rate, Freddie said Thursday in its weekly report. The previous record low, set the first week of October, was 3.36% with 0.6% in fees and points.

The typical rate on a 15-year fixed mortgage of 2.65% with 0.7% in lender fees also was a record, a notch below the previous record low of 2.66% in mid-October.

Concerns over recession in Europe and the looming U.S. “fiscal cliff” of higher taxes and cuts in government spending have sent investors scurrying out of stocks and into the relative safety of Treasury securities. The yield on the 10-year Treasury note, a benchmark for fixed-rate mortgages, fell below 1.6% Thursday for the first time since early September.

The rates are falling at a time of increasing consumer confidence, helping to drive a recovery in the housing markets, with home sales and prices on the rise in many markets, including Southern California.

The improving economy and tighter lending standards have sent the number of past-due loans to the lowest level since 2008, with foreclosures also down sharply, the Mortgage Bankers Assn. said in a separate report Thursday.

However, the delinquency rate is still four times the long-term average, Michael Fratantoni, the trade associations vice president or research and economics, cautioned in an interview.

The widely followed Freddie Mac survey asks lenders across the nation early each week to report popular combinations of rates and points they are offering to borrowers with good credit scores, solid income and 20% down payments or equivalent home equity if they are refinancing.

Third-party costs such as appraisals and title insurance are extra, and solid borrowers often can find slightly better rates by shopping around

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In Era of Cheap Money, Consumers Are Shut Out

June 11th, 2012

Michael Shreve, a 57-year-old science teacher in Marysville, Wash., has watched helplessly as mortgage rates have fallen. He said that despite his stellar credit score, no bank had been willing to let him trade in his 6.35 percent 30-year mortgage because his house was now worth less than when he bought it.

“At some point,” he said, interest rates are going to go up again, “and I should have been able to get those low rates. It’s not fair.”

As interest rates have been dropping to new lows seemingly by the week, American companies have been taking advantage of the cheap borrowing costs, but consumers have been largely left on the sidelines.

New data this week from the Federal Reserve shows that in the first quarter of this year, American businesses were taking on new debt at the fastest rate since the financial crisis in 2008. American households, though, were heading in the opposite direction, increasingly shedding debt.

And as in the case of Mr. Shreve, the lack of borrowing by American families was not always by choice. Another recent Fed report shows that while more consumers are interested in buying homes or refinancing existing mortgages, banks remain hesitant to extend credit to them.

Consumers are also getting squeezed on the investing front. Wary of the volatile financial markets and worried about the continued weakness in the economy, they have been putting more money into ordinary savings accounts, the new data shows. But those accounts are paying an average of 0.1 percent, according to Bankrate.com.

“There’s definitely winners and losers in this kind of extremely low interest rate environment,” said Ed Yardeni, the president of Yardeni Research. “In this case, any borrower that has access to the capital markets and doesn’t have to fill out a loan application at a bank is definitely going to have a tremendous advantage.”

Of course, the declining debt load of households is not necessarily bad. Many economists see it as a welcome shift from the borrowing binge that helped cause the financial crisis, and the Fed data shows that the lack of new debt has freed consumers up to spend more.

“What Americans have learned is that they can live with the old house,” said Allen Sinai, the chief executive of Decision Economics. “Why take on debt and obligate yourself? They are unencumbered more than ever before.”

But the new data underscores the polarizing impact of the central bank’s policy of pushing down interest rates on different segments of the American economy. While low rates are supposed to encourage Americans to take more risks, ordinary Americans have been unwilling or unable to take advantage of them.

Policy makers have worried that, until Americans do show a willingness to borrow, the housing market is unlikely to get back on a solid footing. Through last year, the rate at which Americans were shedding debt was slowing, but in the first quarter it began to speed up again, ticking up 0.4 percent, the new Fed data showed. American businesses, by contrast, increased their debt by 5.2 percent in the first quarter.

Some of the money borrowed by American corporations has trickled down to consumers through new hiring, increased stock prices and higher corporate tax payments. But the latest data indicates that businesses continue to use their borrowed money to pay back older, more expensive loans or to bolster their cashlike holdings, which rose to $1.7 trillion in the most recent quarter.

Not all types of consumer debt are in decline. As education costs rise, the amount of outstanding student loans rose in each of the first five months of the year, Equifax data analyzed by Moody’s Analytics showed. Lending to buy cars has also been heading upward, though with a distinct note of caution.

Alan Starling, who owns three car dealerships in the Orlando, Fla., area, said he had watched consumer behavior evolve over the last several years. “Cautious,” he said. “That is the word.”

Consumers coming to Mr. Starling are asking more questions about the fuel efficiency of the cars and worrying more about the monthly payments, he said.

“People are much more conscious of debt and not getting yourself overextended,” Mr. Starling said. He added that he drove a Chevy Volt and spent only about $25 a month on gas.

The biggest category of household debt by far is residential real estate, and debt in that sector has continued to drop for several reasons. Foreclosures and defaults have erased some of the obligations, and prospective home buyers are being held back, in part, by the restraint of the banks. A Fed survey of senior loan officers at American banks in April indicated that most banks had kept lending standards the same, or tightened them somewhat, even with a steady or rising demand for mortgages. About two-thirds of mortgage activity has been for refinancing existing loans, not for new mortgages, according to Guy Cecala, publisher of Inside Mortgage Finance.

“The real problem is that relatively few borrowers meet the tougher standards of today even if they could benefit from refinancing, and that is the frustration,” said Mr. Cecala.

He added that the last time there was more normal underwriting, in 2003, there was nearly $4 trillion in total mortgage originations, which includes refinancing and new purchases. Last year, with tougher underwriting and lower rates, total originations were $1.4 trillion.

In general, though, consumers’ anxiety about taking on new risks is driving many household decisions.

Joseph Butler, a retired banker in Bernice, La., said that after seeing the trouble that debt caused during the financial crisis, taking on loans or any other kind of risk seemed foolish. Mr. Butler said he was now entirely out of financial investments and kept all his money in a savings account at his local bank, earning less than 1 percent a year.

“I want to hunker down on what I’ve got,” he said.

The Fed survey suggests that even in the first quarter, when stock prices were shooting up, American households sold stocks and put money in assets like insured savings accounts and Treasury bonds. Falling interest rates mean these investments earn increasingly paltry returns, but they provide a degree of security.

“The retail customer right now is saying, ‘I just don’t want to lose any money,’ ” said Keith Leggett, the chief economist at the American Bankers Association.

One of the few financial investments that ordinary Americans have been willing to make is in corporate bonds. Data from the Investment Company Institute showed that Americans had put $136 billion into corporate bond funds in the first five months of the year. This has, of course, made borrowing even easier for American corporations.

“The big beneficiaries have been the corporations,” Mr. Yardeni said. “They have been raising money they don’t even need.”

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Improve your credit score right now

May 27th, 2012

Building an excellent credit history could take years. Fortunately, there are moves you can make within the next 48 hours that will get your credit score going in the right direction – up.

Despite what you heard, you don’t need credit. Last time I checked, credit didn’t make the cut onto Maslow’s Hierarchy of Needs. That said, you probably can’t afford everything you want on your salary alone. For instance, many believe it’s unrealistic to save enough cash to buy a house without a mortgage. (It isn’t.)

When the time comes to borrow money to purchase a home, start or expand a business, 0r buy a car, you want to qualify for the best interest rates.

In addition to reviewing your assets, income, and other factors that signal your ability to repay, lenders want proof you have a habit of honoring your debts.

That’s where your credit score comes in. If you’ve made mistakes with your credit in the past, or your credit history is fairly new, in most cases, you won’t command the lowest interest rates.

Nevertheless, you can start a plan to improve your credit score right now.

Note: Although there are several scoring models that measure your credit risk, FICO is the most popular one among lenders. For that reason, the following tips are centered around increasing your FICO score.

Step #1: Recognize How Much Bad Credit Costs You

You know bad credit is costlier than great credit. But do you know how much?

For the answer, let’s go to the FICO Loan Savings Calculator.

With poor credit, your monthly payment is $186 more than if it were in excellent shape. Over 30 years, you’ll pay an extra $67,000 in interest.

But that’s not the worst of it.

What if you invested the “poor credit premium” of $186 over the life of the loan?

Using the Future Value Calculator at DinkyTown.net, let’s see what we come up with.

Wow! An extra $229,000 in your pocket ain’t bad – ain’t bad at all.

After eighteen years, the length of time you’re saving for your child’s college education, your monthly investments could grow to almost $81,000.

The bottom line: Your credit score is a big, frickin’ deal.

Step #2: Order a Free Copy of Your Credit Report

Go to AnnualCreditReport.com to get a free copy of your credit report. You can obtain a free credit report once every 12-month period from each f the three major credit bureaus (Experian, Equifax and TransUnion).

Step #3: Dispute Errors on Your Credit Report

To understand what types of errors hurt your credit score, you should know how the FICO scoring model works.

It’s wise to follow up with all inaccuracies recorded on your credit report – particularly those that indicate you’re a victim of identity theft – but certain information is more likely to drag down FICO score.

Negative information that should no longer appear on your credit report (late payments and collections more than seven years old, bankruptcies more than ten years old). Signs that you don’t pay your debts as agreed reflect negatively on your payment history.
Limits on lines of credit that are lower than what you’re approved for. Lower credit limits result in a higher credit utilization ratio (discussed below).
Unauthorized requests for credit. Not only can applications for new credit (hard inquiries), shave points off your FICO score, but new accounts shorten the length of your credit history.
Accounts with the wrong dates. The longer your credit history, the higher your score. As a result, you want to ensure the time since the account was opened is properly reflected in your credit report.
Accounts classified in the wrong category. FICO looks at how you manage different types of credit (credit cards, installment loans, mortgages, etc). So if your car loan is recorded as a line of credit, your score could be artificially low.

Don’t forget to check your credit report for missing, positive information as well.

Dispute errors with the credit bureau AND the company that’s misreporting the error.

Request another credit report to verify errors were corrected after the matter is resolved.

Step #4: Set Up Automatic Minimum Payments

Your payment history accounts for 35% of your FICO score. Therefore, it’s really important you pay bills on time. There isn’t much you can do if you don’t have the money. But if you do, it’d be a shame if your credit score took a hit because you forgot to pay a bill.

The solution to this issue is simple. Have your creditors deduct minimum payments from your checking account before the due date. You may not have this option with every creditor. In those cases, use your bank’s online bill pay function to send checks on a reoccurring basis.

Make sure the payment amount you select is large enough to cover minimums that increase as your credit balance increases.

Step #5: Pay Down Balances on Lines of Credit

Another huge factor affecting your credit score is the amount you owe. FICO looks at your credit utilization to determine whether you’re an increased credit risk. Simply put, credit utilization is the amount you owe on lines of credit compared to your total available credit.

According to Liz Pulliam Weston, MSN Money financial columnist, your credit utilization ratio shouldn’t exceed 30%. Ten percent or less is ideal. Try to use credit cards equally to spread out your credit utilization.

Your credit utilization is the exact reason you should NOT close credit card accounts. Contrary to popular belief, this move will harm your credit. Look at what happens when you cancel a credit card.

Lenders often report revolving account balances to the credit bureaus as of the statement date. That means, even if you pay your credit cards in full each month before the due date, your credit report still may not show a zero balance on these accounts.

If you’re in the market for a loan, you may want to consider paying your credit cards off completely. Wait until after you’ve secured the loan to start using them again. Another option is to submit a hefty payment a few days before your statement closing date to get the same results.

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Buying a House After a Bankruptcy

May 15th, 2012

Can someone get a mortgage after a bankruptcy? Yes they can! And they only have to wait 2 years from the date that the bankruptcy was discharged.

The most important thing is that they “re-establish credit” after the bankruptcy. That means no late payments of any kind (including collection accounts) for the 12 months preceding the loan application date.

What are the down payment requirements for people with bankruptcies? They are that same as they are for anyone else: just 3.5% of the purchase price for FHA loans.

What are the interest rates for people with bankruptcies? They are the same as they are for anyone else.

Getting a loan approved is easy – if you know what to do. The Mortgage Experts know what to do!!!

Make sure you check out our web site:

www.ScvAgent.com

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Calif. leads nation in suspicious home loans

March 10th, 2012

VALENCIA REAL ESTATE | HOMES FOR SALE IN VALENCIA CA | VALENCIA FORECLOSURES | RENTALS IN VALENCIA

California continues to lead the nation in questionable home loans, with Los Angeles, Riverside, Santa Clara, Orange and San Bernardino counties among the areas with the highest number of suspected mortgage fraud cases, federal financial officials reported this week.

According to the U.S. Treasury Department, three California cities were among the top five metro areas ranked by reported mortgage fraud. San Jose was the top-ranked metropolitan area per capita, followed by Riverside and Los Angeles. Miami and Las Vegas were fourth and fifth, respectively.

The rankings are based on mortgage fraud suspicious activity reports filed by banks and other financial institutions from July to September 2011 [PDF]. The reports don’t confirm actual fraud, but list financial irregularities.

“As housing markets look to recover, criminals persist in their efforts to prey on struggling homeowners, while financial institutions continue to uncover apparent fraud as they work through their portfolios of earlier mortgages now in default,” James H. Freis Jr. said in a statement. Freis is director of the Treasury Department’s Financial Crimes Enforcement Network, which analyzes the fraud reports.

“FinCEN will continue to monitor these reports and work closely with law enforcement to help them track illicit actors,” Freis said.

California has consistently ranked near the top among states with suspected mortgage fraud since 2002, the year the Treasury Department began reporting suspicious activity statistics, federal reports show.

About 46 percent of suspicious reports involved some type of homeowner debt removal or refinancing attempt. Social Security number discrepancies in the loan application accounted for about 15 percent of the reports.

State and federal officials are sharpening their focus on mortgage fraud in the face of growing criticism by homeowners, activists and banking experts about the lack of fraud prosecutions since the 2008 housing crash.

Last year, California Attorney General Kamala Harris created a statewide Mortgage Fraud Strike Force, made up of 17 lawyers and eight special agents from the state Department of Justice, to focus on all aspects of unscrupulous lending. Harris told the Los Angeles Times that the state’s current budget woes are directly linked to mortgage fraud.

“We are looking at a situation of up to $640 billion in wealth having been lost because of this wave of foreclosures that has hit the state,” Harris said, referring to the decline in homeowner equity. “There is a direct connection” between mortgage fraud “and the issue that we are challenged with in terms of our state budget crisis.”

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Obama offers mortgage relief to millions of homeowners

March 6th, 2012

WASHINGTON (Reuters) – President Barack Obama announced on Tuesday a cut in fees on many government-backed mortgages that he said could help millions of homeowners refinance, part of an election-year push to boost the shaky U.S. housing market.

Under the plan, a typical borrower with a loan backed by the Federal Housing Administration could save a thousand dollars a year by refinancing into a new FHA loan, the White House said. The fee reductions would be on top of any savings from a lower interest rate.

Two million to three million borrowers would be eligible, although the White House said participation would more likely number in the “hundreds of thousands.”

The step is the latest in a series by the Obama administration to aid a depressed U.S. housing market and homeowners threatened by a rising tide of foreclosures.

About 11.1 million Americans now owe more than their homes are worth.

“I’m not one of those people who believe that we just sit by and wait for the housing market to hit bottom,” Obama said at a news conference. “There are real things we can do right now that would make a substantial difference in the lives of innocent, responsible homeowners.”

Obama, who faces re-election in November, introduced the cut in mortgage fees alongside efforts to compensate members of the military who may have been wrongfully foreclosed.

The lower fees being put in place would be available to borrowers seeking a new loan through FHA’s streamlined refinancing program, and even borrowers who owe more on their mortgage than their homes are worth would be eligible.

Under the streamlined program, borrowers must be current on their payments and income verifications, and appraisals are waived. The reduced fees announced today would be available to borrowers who are refinancing loans taken out before June 1, 2009.

BROAD BENEFITS FOR THE ECONOMY

Of the 5.4 million 30-year fixed-rate mortgages that the FHA backs, 3.2 million would not be eligible because they were issued after the June 1, 2009, cut-off date, according to Mahesh Swaminathan, an analyst at Credit Suisse Group AG.

The reduced fees, though, should help enough homeowners that there will be a positive ripple effect throughout the U.S. economy, according to Jaret Seiberg, senior policy analyst with Guggenheim Securities.

“This should be broadly positive for housing and the economy by reducing foreclosures and freeing up income for consumers to spend on other goods and services,” Seiberg wrote in a note to Guggenheim clients.

The biggest banks, such as Wells Fargo & Co. , Bank of America Corp (NYS:BAC) and JPMorgan Chase & Co. (NYS:JPM), are likely to see an increase in refinancing volume, which could mean higher income from fees related to FHA mortgages, he wrote.

While mortgage rates are at historic lows around 4 percent, many Americans lack the equity to refinance. Others are locked out by tight credit conditions.

Obama has announced several changes to the administration’s housing policies this year to help borrowers, including an expansion of an existing mortgage relief program that had failed to reach as many homeowners as hoped.

The latest plan, which does not need congressional approval, reduces the cost of up-front FHA mortgage insurance premiums to 0.01 percent from 1 percent of a borrower’s loan balance. It also cuts the annual fee for these loans in half to 0.55 percent.

Many FHA borrowers have found refinancing prohibitive in recent years because of increased insurance premiums. The administration has been raising fees for FHA loans to shore up the agency’s dwindling capital and shrink its footprint in the market. The agency backs about a third of all new mortgages.

MILITARY PERSONNEL TO GET RELIEF

The White House also announced more details about an agreement with mortgage servicers to compensate people serving in the military and veterans who faced wrongful foreclosure.

It said servicers will reviews thousands of foreclosures on properties owned by members of the military and will pay those whose homes were wrongly seized the amount of lost equity plus interest and $116,785.

The administration is also seeking refunds for military personnel who were wrongfully denied refinancing.

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Average 30-Year Fixed-Rate Mortgage Up From All-Time Record Low

February 26th, 2012

In Freddie Mac’s results of its Primary Mortgage Market Survey® (PMMS®), fixed mortgage rates moved off their at- or-near record lows for the first time in three weeks amid recent data showing the housing market continues to improve.

VALENCIA REAL ESTATE | HOMES FOR SALE IN VALENCIA CA | VALENCIA FORECLOSURES | RENTALS IN VALENCIA

30-year fixed-rate mortgage (FRM) averaged 3.95 percent with an average 0.8 point for the week ending February 23, 2012, up from last week when it also averaged 3.87 percent. Last year at this time, the 30-year FRM averaged 4.95 percent.
15-year FRM this week averaged 3.19 percent with an average 0.8 point, up from last week when it also averaged 3.16 percent. A year ago at this time, the 15-year FRM averaged 4.22 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.80 percent this week, with an average 0.7 point, down from last week when it averaged 2.82 percent. A year ago, the 5-year ARM averaged 3.80 percent.
1-year Treasury-indexed ARM averaged 2.73 percent this week with an average 0.6 point, down from last week when it averaged 2.84 percent. At this time last year, the 1-year ARM averaged 3.40 percent.According to Frank Nothaft, vice president and chief economist, Freddie Mac:
“New data releases this week suggest the housing market is continuing to gradually improve. Loans that were seriously delinquent (90 days or more past due plus the foreclosure inventory) fell to 5.3 percent of prime mortgages at the end of 2011, representing the lowest quarterly share since the start of 2009, according to the Mortgage Bankers Association. The Census Bureau reported new residential construction starts in January outpaced the market consensus forecast, led by condominiums and apartment buildings, and December’s figures had upward revisions. Finally, existing home sales were at the strongest pace in January since May 2010, according to the National Association of Realtors®”

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Kiss These 10 Once-Popular Home Features Goodbye

February 18th, 2012

Times are tough in the home-building industry, meaning the 500,000 or so new single-family homes expected to be built this year are going to include more practical and value-conscious features and fewer wish-list items.

Outdoor Kitchens & Outdoor Fireplaces

Along with outdoor kitchens, outdoor fireplaces aren’t expected to be in such great demand. They are the second least-likely feature to be included in new homes in 2012, according to a survey from the National Association of Home Builders.

Photo: Exteriors UnlimitedSunrooms

Sunrooms are also on the wane. “Builders are focusing on features that add immediate value and make a home more practical,” said Rose Quint, assistant vice president of survey research, economics and housing for the NAHB. What’s more practical? Things like walk-in closets, linen closets and laundry rooms.

Two-Story Family Room

The family room itself may be making a comeback as a gathering center of the home, but the two-story family room is getting cut off at the knees. On a scale of 1 to 5, builders gave it only a 2.2 as a feature for new homes in 2012.

Photo: The Toni Everett Co.Media Room

Even with all the options in home entertainment today, the media room isn’t high on the list for home builders. You’re much more likely to find a charging station for all your devices hidden away in a kitchen-island cabinet in 2012.

[Also see: Cool homes of fashion leaders]

Two-Story Foyer

Like the two-story family room, the two-story foyer is on the way out. Blame utility bills: Home buyers are more focused on energy-saving windows and appliances than on soaring spaces in 2012.

Master-Planned Developments

Master-planned developments like Lago Estancia in Phoenix often tout their walking and jogging trails as a community attraction. But such amenities will not be popular this year, home builders say.

Luxury Master Bathrooms

Luxury master bathrooms with multiple-head showers will be getting toned down in 2012. Something more practical — say, a double sink in the kitchen — is much more likely to be included in new homes this year.

Photo: Buchanan Designs Inc.Formal Living Room

The demise of the formal living room is predicted once again in 2012. Home buyers are much more likely to request a great room that combines the kitchen, family room and living room into one large open space at the center of the home.

Whirlpool Tubs

As with the multiple-head showers, whirlpool tubs in the master suite are also on the wane. You are more likely to see stand-alone tubs, in classic or contemporary styles, that make a design statement in the master bath, said Jill Waage, editorial director/home for Better Homes and Gardens magazine.

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Understanding Points, Rates and Fees

February 17th, 2012

There are several additional costs associated with your mortgage

nderstand what type of mortgage you should choose, you have to understand the costs associated with your mortgage. All of these costs will be paid upon closing your mortgage.

Purchase Points

Purchase points, also known as a “buy-down” or “discount points,” are an up-front fee paid to the lender at closing to buy-down or lower your interest rate over the life of the loan. Each point is equal to one percent of your total loan amount. If you have a $100,000 loan, one point would equal $1,000. The more points you buy, the lower your interest rate, but the more money you’ll need at closing.

How do you decide whether you should buy points and if so, how many? Well, the decision should be based on how long you plan on living in your home and what you can afford to pay each month toward your mortgage. If you plan on living in your home for more than five years, it’s probably a good idea to purchase points. The longer you live in your home, the more you can save on interest over the life of the loan.

Interest Rate

When you get a mortgage, you are charged an interest rate. This is the rate which the lender charges you for using their money to buy a home. It determines how much your monthly payments will be. Generally speaking, the higher the interest rate, the higher your monthly payment.

Mortgage interest rates change constantly. Daily, even hourly. If you speak to a lender and are quoted a specific interest rate, that’s not to say you’ll necessarily get that rate when you close on your loan. Not unless you formally lock-in that rate with the lender. Locking in an interest rate will guarantee you get your loan with a particular interest rate. Lenders will allow you to lock in for 15, 45 or 60 days. But the longer you lock in, the more expensive it will be, since it’s more of a risk to lenders.

Fees

There are always fees associated with getting a mortgage, these fees cover the cost of processing and underwriting the loan. These fees can include charges for ensuring the title to the home is free and clear; paying for a land survey; or paying for a home appraisal which gives you the estimated value of the property (lenders require an appraisal to close on your mortgage).

Deciding which mortgage to get may depend on what each lender does because different lenders may charge different amounts. Some may charge lesser closing fees to lure you in, but may charge you a higher interest rate, which means you may pay more in the long run. But everyone has different needs.you may or may not be able to afford to pay more at closing and are willing to pay more over the long term.

Before it comes time to close, do your homework, make sure there are no hidden fees, and ask your lender lots of questions so that you understand all the costs involved with your mortgage.

*Please consult your tax advisor.

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