June 2011: According to Steve Brown from the Dallas Morning News, don't expect a rebound in the housing market this year. He cites both foreclosures and the employment market as reasons for the slow market. One other factor is that lenders are much tougher when it comes to qualifying for a loan. They still want to lend, but they are stricter than they were a year or so ago.

Foreclosure options for property owners: For those who are facing foreclosure, visit Fannie Mae's helpful web site at www.KnowYourOptions.com.

The median sales price for March 2011 was $185,260. That is up from $181,000 from the same period a year prior.

The average days on market for March 2011 was 96, compared with 73 days on market for listings that sold in March of 2010.

For new FHA loans starting April 18, 2011 the mortgage insurance premium has increased. It will cost the average buyer about $30 per month.

CANCELING PRIVATE MORTGAGE INSURANCE:
If your loan originated on or after July 29, 1999, your lender must cancel private mortgage insurance at your written request once your mortgage balance is 80 percent of the original value of the house. However, the lender must be satisfied that the property value has not declined. Private mortgage insurance should be automatically canceled when the mortgage balance is 78 percent of the original value of the house. For more information, visit www.PrivateMI.com.

INTEREST RATES are lower than they have been in many years. If you have considered purchasing a property or refinancing a loan, now is a good time. If you don't yet have a loan officer, you can call me at (512) 336-1155, send e-mail to me at RobertUnderwood@austin.rr.com, or you can see several loan officers listed on this Web site at the Vendors link.

Loan limits raised for Freddie Mac & Fannie Mae:
Effective January 1, 2005, Freddie Mac and Fannie Mae raised their single-family mortgage loan limit to $359,650. Loan limits have also been raised to $460,400 for duplexes, $556,500 for triplexes, and $691,600 for quadruplexes.

FHA MIP changed
On line 12-B of one-to-four family contracts (for FHA deals), a value for Mortgage Insurance Premium (MIP) is required. On January 1, 2010, the up-front MIP amount changed to 2.25% of the loan amount, and this new amount should be written into FHA contracts.

CAPITAL GAINS and TAXES
Remember that a long-term capital gain is one year or longer. The tax rate is 20 %. If you are in the 15% tax bracket, the tax rate is 15%. Short-term capital gains are taxed at your regular tax rate (which is up to 39.6%). For tax purposes, it is important to know exactly when you bought and sold an asset, as well as your cost basis.

COLLEGE FUNDING MADE EASIER
If your adjusted gross income is less than $95,000 for singles or $150,000 for married couples filing jointly, you qualify for the education IRA. The contribution is limited to $500 per year for each child under 18 but the money can be withdrawn tax-free if it is used for "qualified" education expenses such as tuition, textbooks, etc.

Another way to go is for your child to open up a Roth IRA. Whether the child or the parents funds it, you can shelter up to $2000 per year in a tax-free account. It can be tapped later without penalty if the money is used for college. This won't affect a financial aid program since retirement accounts aren't counted in evaluating aid eligibility

INTEREST RATES
The accurate forecasting of interest rates is not always possible. It's smart to keep an eye on two items that affect rates: (a) Federal Reserve policies, and (b) demand for loans .

CREDIT ANALYSIS
Mortgage credit analysis is no longer done solely by experienced human underwriters. Today, the process is mechanized and less forgiving. A clerk uses a formula to analyze a consumer's mortgage credit and gets a computerized loan approval. The mortgage lender hires a local credit agency to collect data from the three giant credit repositories and consolidates the data into one report. Each of the three giant credit repositories assign a three-digit credit score for each consumer. This score is calculated to reflect consumers' overall reliability as borrowers.

Each consumer gets three scores, one from each repository. Scores vary because the credit records and risk-evaluating models vary from repository to repository. Mortgage lenders do not average out the scores; they use the median score. Although this computerized system gives better loans to people with better histories, it is extremely unforgiving to those who don't have great credit history.

  Austin American-Statesman. Demand is especially high in the central, older neighborhoods. In the same edition of the paper, Kate Miller Morton wrote another article, Travis home appraisals balloon 16%, describing how the average market value of a home in Travis County has jumped 16 percent since last year's value to $236,559. Austin American-Statesman. Morton also wrote another article in the same issue of the paper, Travis home appraisals balloon 16%, in which she describes the rise in average value of a Travis County home to $236,559.