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Jason Will's Blog

By Jason Will | Agent in Fairhope, AL
  • Baldwin County Alabama Home Listings

    Posted Under: Home Buying in Baldwin County  |  May 21, 2010 12:35 PM  |  1,431 views  |  No comments
  • Mortgage Rates to Climb as Aid Ends

    Posted Under: Home Buying  |  February 16, 2010 7:16 AM  |  1,465 views  |  No comments

    Mortgage Rates to Climb as Aid Ends

    Housing Market Braces for Fed Cuts in Funding

    San Francisco Chronicle, By Carolyn Said

    February 15, 2010

    The Federal Reserve is poised to turn off a major money spigot that has helped sustain the ailing real estate sector, as an extraordinary program under which the Fed has pumped $1.25 trillion into the mortgage market is slated to end March 31.

    "Housing has been on government life support, and without it the crash would have been much more severe," said Mark Zandi, chief economist with Moody's Economy.com in Pennsylvania. "This spring and summer as those policy efforts unwind, we most likely will see mortgage rates move higher and more house-price declines."

    Rather than being held by banks, today's mortgages are sliced, diced and resold on Wall Street to create liquidity - money that then can be lent in more mortgages. After the credit crunch beginning in the fall of 2008, investors lost their appetite for these mortgage-backed securities, so the Federal Reserve stepped in to purchase them to ensure that money would keep flowing to home purchasers.

    The Fed started buying securities backed by Fannie Mae, Freddie Mac and Ginnie Mae in January 2009 and originally planned to conclude the program by year's end. It extended it for three months to ease the impact on mortgage markets, although it didn't allocate more money. The program's ultimate cost won't be known until the Fed sells off the securities, something that officials said it will do gradually starting this year. It's conceivable that the program could end up generating a modest profit, breaking even or losing money, depending on what prices the securities go for.

    While experts agree that the Fed's exit will cause mortgage rates to rise, the big unknown is how severe the effect will be.

    "There is no question rates have been kept artificially low by the Fed's heavy buying," said Guy Cecala, publisher of Inside Mortgage Finance. "My opinion is that rates will go up a full percentage point initially," meaning that 30-year fixed conforming loans, now hovering around 5 percent, would hit 6 percent.

    Keith Gumbinger, vice president of HSH Associates, which compiles mortgage loan data, thinks that rates will slowly rise to about 5.75 percent after the Fed withdraws.

    "Right now the Fed is acting as a sponge, absorbing about $12 billion a week of what you might consider excess supply," he said. "When they stop, the market will have to pick up some chunk of change."

    Julian Hebron, branch manager at RPM Mortgage's San Francisco office, anticipates a bump up to around 5.5 percent by summer with rate volatility all year.

    "The Fed isn't going to start dumping mortgage bonds on April 1, they're just going to stop buying," he said. "By that time, improving economic data is likely to push the Fed toward a rate hike bias. This will contribute to higher mortgage rates, slowing refi activity, and less mortgage bond supply. So while the Fed won't be buying anymore, rates shouldn't spike immediately because there will be less supply for markets to absorb."

    Christopher Thornberg, principal at Beacon Economics in Los Angeles, thinks the Fed's withdrawal will have a radical impact.

    "Clearly, when they stop printing all that money, it's going to be a shock to the system. I have to assume that when they pull back on it, it will cause a 100- to 200-basis-points rise" to rates of 6 percent or 7 percent, he said. "When they start selling off the stuff they purchased, which by my guess would come early next year, that would cause another 100- to 150-basis-points rise."

    The Fed has indicated that it might resume buying mortgage- backed securities if mortgage rates spike.

    In written Congressional testimony released last week, Fed Chairman Ben Bernanke said the Fed eventually will take steps to forestall inflation that also are likely to result in higher interest rates for all loans.

    Several other government programs designed to prop up the housing market also are in play:

    -- The home buyers tax credit of $8,000 for first-time buyers and $6,500 for repeat buyers expires April 30. Although many experts think the program simply caused people to buy houses earlier than they had planned, its end is likely to cause a dip in home sales.

    "Higher interest rates without a tax credit means the cost of buying a home will rise significantly," Zandi said. "We should expect much weaker home sales in May, June and July."

    Cecala thinks that if home sales are anemic, Congress may extend the tax credit an additional six months, as it's already done once before.

    -- Federal Housing Administration loans, an increasingly important source of financing for many borrowers, especially those with low and moderate incomes, imposed more stringent lending criteria in January. As FHA delinquencies rise, the rules could tighten still more, eliminating some potential buyers.

    "The FHA portfolio has all sorts of bad debt in it," Thornberg said. "Eventually they'll have to pull back" on lending.

    -- Home Affordable Modification Program, the government-backed plan to get banks to help troubled homeowners, has kept the market from being flooded with foreclosures, as hundreds of thousands of borrowers are negotiating with their lenders for lower payments. Eventually, observers say, much of that backlog will wind up in foreclosure because homeowners simply don't have the income or ability to make modified payments. A new surge of bargain-basement foreclosures would undermine home prices.

    "We have a boatload of homes that ultimately will find their way to a foreclosure sale, and that will put pressure on house prices," Zandi said. "The more that distressed home sales rise, the more home prices get pushed down."

     
    Take Care,
     
    Jerel Washington, Realtor & Principal of...
    The Washington Group at Keller Williams Realty
  • Tax Benifits for Home Buyers in 2010

    Posted Under: Home Buying  |  January 12, 2010 11:15 AM  |  1,472 views  |  No comments

    Mortgage Interest. For most homeowners, the bulk of your mortgage payment is going towards interest - and that's a big tax break for you! The mortgage interest on your primary residence is fully tax deductible, unless, of course your loan is more than $1 million.

    You can also deduct late payment charges as home mortgage interest as long as the payment was not late due to a specific service received in connection with your home loan. Also, if you pay off your mortgage early and incur a prepayment penalty, you can deduct that penalty as home mortgage interest (subject to the same requirements for late payments).

    Property Taxes. Your property taxes - the annual taxes based on the assessed value of your property - can also be deducted. Your mortgage interest statement may list the amount of real estate taxes you paid if your taxes and homeowners' insurance went into an escrow account when you closed on your mortgage. You can also review your cancelled checks to determine your total real estate tax deduction.

    Loan Points. Any points you paid to get a better rate on a home loan, are tax deductible in the year you made the purchase as long as:

    • The loan is secured by your primary residence and it was used to buy, improve or build the home.
    • Paying points is an established business practice in your area;
    • The points are computed as a percentage of the loan principal;
    • The points are clearly defined on the buyer's settlement statement; and
    • You put cash into your home purchase in an amount at least equal to the points you were charged.

    Loan Points on a Refi. The points you paid on a refinanced loan may also be tax deducible, however in most cases, the points must be deducted over the life of the new loan. So if you paid $2,000 in points to refinance a 30-year mortgage, you can deduct $5.56 per monthly payment, or a total of $66.72 if you made 12 payments in one year on the new loan.

    Interest on a Home Equity Loan. The interest on a home equity loan may be tax deductible up to $100,000. However, if your home equity loan, when combined with your first mortgage amount, increases the debt on your home to an amount more than the property's actual value, you'll face deductibility limits. In these cases, the IRS allows you to deduct the smaller of interest on a $100,000 loan or your home's value less the amount of your existing mortgage.

    $8,000 Tax Credit Basics:

    • * The $8,000 tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
    • * The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer's principal residence within three years afte r the initial purchase.
    • * The tax credit is equal to 10 percent of the home's purhcase price, up to a maximum of $8,000.
    • * The tax credit applies only to homes priced at $800,000 or less.
    • * The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding contract is signed by April 30, 2010, a home purhcase completed by June 30, 2010 will qualify.
    • * For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.



    $6,500 Tax Credit Basics:

    • *To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.
    • *The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer's principal residence within three years after the initial purhcase.
    • * The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $6,500.
    • * The tax credit applies only to homes priced at $800,000 or less.
    • * The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purhcase qualifies provided it is completed by June 30, 2010.
    • * Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.


    Search for Alabama Gulf Coast Homes, Condos & Land Here!

  • 17 Acres of Private Country Living - Magnolia Springs

    Posted Under: Home Buying in Magnolia Springs  |  December 18, 2009 6:39 PM  |  1,581 views  |  No comments

    13241 Lipscomb Road

     Magnolia Springs, Alabama

    17 Acre Registered Farm with Custom Brick Home, Efficiency Cabin w/ Full Kitchen & Bath, 2 Story Barn, Well-Pump-House, Fenced Garden, & Stocked Bass Pond!

    lipscomp_1_400Features:

    • 3 Bedrooms
    • 2.5 Bathrooms
    • Office/Study
    • 2329 Sq. Ft. 
    • Granite
    • Plantation Shutters
    • Natural Spring Water
    • Heated Saltwater Pool w/ Lanai
    • Security Gated Access

     



     
  • Orange Beach Condo Deals - Bella Luna

    Posted Under: Home Buying in Orange Beach  |  December 17, 2009 10:01 AM  |  1,594 views  |  No comments
    5 Beautiful Bella Luna Units!
    Orange Beach, AL


    Front View
    Back View
    Main Outdoor Pool

    These Gorgeous Units Range from $529,000 - $1,326,000!
    Something for Everyone ~ MAKE OFFERS!
    209, 210, 906, & PH 1 are all Developer Units!
    • Brand new condos
  • East views of Ole River and pool/marina
  • Best Complex on the Gulf Coast!
  • **Boat slips available for purchase with these units. Dues dropped. Owner financing an option.
  • Unit 604 Also Available!

    Gorgeous western views of Ole River and back bays in popular 04 stack.
    Perfect height in the complex
    Great views and sunsets
    Convenient to amenities
    Never been rented & easy to show - A MUST SEE

    NOW ONLY $529,000!

    All Units Feature Bella Luna's Amazing Amenities, Including:
    4 pools, 2 spas, Marina, Movie Theater, Fabulous Workout Facility, Owner's Lounge,and MORE!!


    Client MLS Link


    Additional Shots from Unit 604:

         



    Click Here to Search for More Orange Beach Condo Deals!
  • Best Value on Miflin Creek!

    Posted Under: Home Buying in Baldwin County  |  December 16, 2009 6:49 PM  |  371 views  |  No comments

    9383 Brighton Avenue

     Elbrta, Alabama

    brighton_400_01Best Value on Miflin Creek!

    Beautiful home in prestine condition, with amazing views of the picturesque coastal landscape.  

    Features:

    • 3 Bedrooms
    • 2 Bathrooms
    • 1900 Sq. Ft. 
    • Wood Floors
    • Open Floor Plan
    • Stainless Steel Exterior Elevator 
    • Deep Water Boat Slip on Protected Water

     

    Click Here for Client MLS Link



    Jason Will
    jasonwill@gulfshoreslife.com
    www.gulfshoreslife.com/jasonwill

    251-583-9728 Cell

    251-928-9890 Office

    251-990-4898 Fax

  • Oceania - Luxury Condos in Gulf Shores, AL

    Posted Under: Home Buying in Gulf Shores  |  November 20, 2009 6:33 PM  |  309 views  |  No comments
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