Entries by Christina Whipple

The 2007 real estate market report from the Texas Real Estate Center is now available on my website. The report covers census data, employment and unemployment, major industries, business climate, education, transportation and infrastructure issues, growth patterns and much more. Click on the link below to download this report.

2007 San Antonio Market Report

Some highlights from this report for the San Antonio area are as follows...

The median price for a San Antonio residential home in 2006 was $140,100. The required income to qualify for this home was $35,324, while the median family income in San Antonio during 2006 was $53,992. This means that a residential home continues to be attainable for the average San Antonio family.

Christina Whipple
www.ChristinaWhipple.com

Subprime loans are high-interest rate loans that are offered to people who do not qualify for market rate mortgages. Often, traditional lenders have turned these borrowers away because of low credit ratings or other factors that suggest to traditional lenders that borrowers could default on their loans.  Since the start of 2007, foreclosures of subprime mortgages has risen rapidly leading to more than 36 subprime mortgage companies failing.

The subprime lending market's woes will impact all home buyers, not just those with "subprime" credit scores.  Underwriting guidelines are tightening and we are seeing decent rates for the 100% stated-income loan disappear. With foreclosures and shortsales increasing it is easy to "Monday morning quarterback" and say this should have been seen coming from a mile away.

However, stated income loans impact how various market segments obtain loans.  For instance, this has a huge impact on tipped income jobs.  The restaurant industry alone is a huge employer and it would be safe to assume that a good portion of these jobs are tipped income jobs.  Also, small business owners and commissioned contractors will be hit hard by these changes as well.

As Realtors, it is more important than ever to ensure that we understand these mortgage loan market changes and that we team up with a lender who has a good knowledge of how these changes will impact loan applicants. We will see more of the "teaser rates" advertised only to have the rug ripped from under the applicant and the rates raised when the loan goes to underwriting.

Also, this will not only impact buyers.  A good Realtor will need to go the extra mile to make sure buyers for our listings are qualified, asking the difficult credit questions, and that the buyer's agent realize the impact of the tightening credit changes.  Every listing offer with loan contingency should be scrutinized before consideration by the sellers!

Christina Whipple
www.ChristinaWhipple.com

Some home buyers will be receiving a bit of a tax break for the 2007 tax year thanks to new legislation that will make mortgage insurance (MI or PMI for private mortgage insurance) tax deductible.

PMI, is a type of insurance that insures the lender in case the buyer defaults on the loan. The lender usually requires PMI when the buyer has a down payment less than 20% of the asking price of the home.

Many homeowners will be eligible to deduct 100% of the PMI they paid in 2007 on thier federal tax returns.  This law applies to all new mortgage transactions between January 1, 2007 and December 31, 2007.  There are some other deductibility stupliations including:

• The tax deduction only applies to mortgages closed in 2007
• There are income limits.  A 100% deduction is applicable for gross incomes of $100,000 or less. 
• No tax deductions are available for gross incomes over $110,000.

Note that this law has only been approved for tax year 2007 and there is no guarantee that it will be renewed, but at least it will be a nice benefit to new homeowners for this year.

Christina Whipple
http://www.christinawhipple.com/

Texas Commissioner of Insurance, Mike Geeslin, ruled that all title insurance premium rates be lowered by 3.2 percent, across the board. Starting Feb. 1, 2007, all Texas title companies must follow the new, lower rates.

The decreasing premium rates are nothing new to Texas title companies. In 2004, the state ruled that premiums should drop by 6.5 percent. And, over the last eight years the rates have been cut by 17 percent, according to numbers from the Texas Department of Insurance.

Jerry Hagins, a spokesman with the Texas Department of Insurance, said the premiums are decreasing simply because of profits. “They’ve been paying out less than what they’re taking in,” Hagins said of the title companies.  The department staff analyzes title companies’ profit targets, expenses and losses when gathering data for each biennial rate hearing, he added.

As an example of cost savings, the title insurance for a $150,000 home under the current rates  would be $1,227 and will be $1,110 starting February 1, 2007 under the new rates.

Christina Whipple
http://www.ChristinaWhipple.com
Christina@ChrisitnaWhipple.com

When people find issues with their credit and try to act to make repairs, they can often make the situation worse by not understanding what variables go into their credit score. 

Although the exact formulas for calculating credit scores are not disclosed to the public, Fair Isaac has disclosed the following components with the approximate weighted contribution of each:

1. 35%,- payment history
2. 30% - the amount of debt, expressed as the ratio of current revolving debt (credit card balances) to total available revolving credit (credit limits)
3. 15% - length of credit history
4. 10% - types of credit used (installment, revolving, consumer finance)
5. 10% - recent credit inquiries and/or amount of credit obtained recently

The following are some of the common mistakes that people make when attempting to repair their credit.