Adjustable Rate Mortgage - Not Necessarily A Bad Choice

  I know, I know, you say "no way am I going with an adjustable rate mortgage(ARM), I heard about all the people getting in trouble with the sub-prime mortgages that adjusted. I think I'll just go with a fixed rate for my new house." Rest assured, I am not talking about a sub-prime mortgage, and remember, my goal with this blog is to give you information so that you can make more informative choices. But with rates now hoovering around 5% (still very low, all things considered), the belief is that rates will rise some throughout the year, so it is only wise to look at all the alternatives.
  Back in the 80's and 90's, adjustable rate mortgages were a very common option, in fact the mortgage on my first home in 1990 was a 3 year ARM. But in recent years the fixed rate has been so low and the rate spread between a fixed rate and an ARM was not substantial enough to make an ARM a consideration.
  But today, right now, it is a different story. A 30 year FHA fixed rate today sits at 5.25% and an FHA 5yr ARM is at 3.75, quite a big spread, which by the way, is at a historic level. Plus, with the FHA 5yr ARM, the rate cannot go up more than 1% each year after the 5th year and it has a lifetime cap of 5% over the original rate. Let me explain how this alternative could work for you.
  Let's say you are mortgaging $300,000, with the fixed rate of 5.25%, your principal and interest payment would be $1,657/month and with the 5yr ARM at 3.75%, your payment for the first 5 years would be $1,389/month. If you compare the total amount in payments that you pay over 5 years, there would be a savings with the ARM, of over $16,000. Let's take it a little further, say it jumps up 1% in year six to 4.75% with a payment of $1,565 and jumps another 1% in year seven to 5.75% with a payment of $1,750, you would still have paid $16,089 less in payments.
  In the first five years you will be paying $268 less each month. There are several things you could do to make that money work for you. Pay extra each month to your mortgage decreasing your interest paid, start a rainy day money market account, increase the amount you put towards retirement, or a combination of all three. There are obviously many things that you could do, but the main thing is that you discuss this with a financial advisor or maybe your accountant to get the most bang for your buck.
  The average time period for someone to be in the same mortgage is 7 years, but you have to look at your own situation and consider if it is right for you. If you are buying a condo or townhouse and know that you want to move to a bigger home in 5-7 years, it could be perfect for you. For some people, paying for the security of a fixed rate mortgage is worth it.
  Although I used the example of a 5yr ARM, there are other length ARMs out there. So if you are getting ready to purchase a new home or refinance, get together with a reputable lender and discuss all our options.

If you are preparing to buy or sell your home in the Bucks-Mont area, contact me and I would be glad to help you with every step of the process.

 Please visit: http://www.patgarisrealtor.com/, there you can search the entire MLS for homes, you can find helpful information about buying or selling, and you can check out all my listings.

Wonderful 4 Bedroom In Souderton

This lovingly cared for and well maintained two-story home is super clean and ready for you to just move right in. Located in the much desired Heatherfield community, this home features 4 generously sized bedrooms, a formal living room and dining room, an open and bright kitchen with a family-sized breakfast area, a spacious family room with a stone faced wood burning fireplace, a huge deck off of the family room, a fully finished walk out basement with rec room and separate home office space, a two car garage, and a first floor laundry.

Located in Franconia Township just on the outskirts of the town of Souderton and has easy access to Rt. 113 and Rt. 309, and is only about 10 minutes from the Lansdale interchange of the PA Turnpike. This home is located in the Souderton School District.

Competively priced at $319,900.

To view this full listing with all the photos or to see any of my other listins, visit my website at: http://www.patgarisrealtor.com/

Ecomonic Recovery - 10 Unlikely Signs

  As a Realtor, I am beginning to see a growing confidence in the buyers and sellers that I am working with. I am also seeing fuller parking lots at the local home improvement centers and local eateries. To me, these all all good signs that we are in recovery. But I recently came across an interesting report on Kiplinger.com.
  In the report it took into consideration 10 often not thought about, but yet telling trends that shows that consumer confidence is growing and our economy is on the upswing. I hope you find them as interesting as I did.

1. Underwear Sales - Apparently, when the job market is tough, men wait longer to replace the tighty whities and boxers, too (I know I could probably use some new ones). Although sales fell 2.5% in 2009, the underwear market has strengthened and is making a comeback.
2. Sweets Are Back In Style - During a slowdown, restaurant traffic slows and the people that do eat out, cut out the appetizers and the desserts to keep the total bill down. But, according to the National Restaurant Association, business is picking up and customers are splurging on desserts again.
3. Less Sorrowful Searching - Internet searches for "unemployment benefits", "social security", "unemployment office", and the like peaked in July of 2010 and has been falling ever since. Also, first time claims for unemployment insurance have been falling for months, a sign that there is a drop off in mass layoffs.
4. Fancy Coffee Is Making A Comeback - When consumers are feeling pinched during tough economic times, on of the things they cut out of the budget is the high priced coffee. Apparently though, it is one of the first little luxuries they will spend money on when consumer confidence comes back. So, it was a good sign that Starbuck's net revenues increased 9.5% in 2010 after falling 6% in 2009.
5. Boxes Rebound - Because most of what we buy at some point is shipped in a box, higher prices for boxes and other shipping needs points to more consumption. Although it is at a pre-recession low, it is on the rise again. In fact, orders for appliances, furniture, and other products with a more than 3 year life span are improving.
6. Fewer City Dwellers Are Walking - During a recession, more city folk tend to walk or take public transportation to their destination, but in recent months the cabbie business is looking up. In fact, car sales are also up.
7. Golfers Are Teeing It Up Again - When tough times hit, it seems that the golf clubs get put away in storage. But, the number of golf course visits actually stopped declining in 2010, especially in the Mid Atlantic and New England regions.
8. Cosmetic Surgery Gets A Lift - When money is tight, elective surgeries like nose jobs, tummy tucks, and boob jobs take a hit. The demand is increasing though, in fact, the American Society of Plastic Surgeons states that the number of patients who chose to get work done in 2010 rose by more than 13 million.
9. Gambling Is On A Comeback - I am not a gambler myself, mainly because I am not very good at it. But at the casinos, there was a drop off of about 10% from 2007 to 2009. It is reported that the casino's takes were up 3% last year and are expected to head higher this year.
10. Sad But True, More Couples Are Divorcing - Apparently, during a recession, couples who are considering divorce choose to stick it out a little longer because of the inability to arrange financing to buy out the partner's stake in businesses or homes, required by property divisions. The American Academy of Matrimonial Lawyers said they suffered a 37% drop in 2008 and a 57% decline in 2009. But the trend is changing, in fact a lot of divorce lawyers are saying now that they have more business than they can handle.

  I found these trends very interesting and not ones that I would normally consider. Typically we follow the housing market, unemployment rate, or stock market for signs of the economy. But this does confirm my suspicion that consumer confidence is in fact returning, slowly but surely. I for one, am very happy about that.
  By the way, housing affordability is at a higher level now than it has been in almost 40 years and with the low housing prices and historically low interest rates, now is the time to buy.

To see all my listings in Bucks and Montgomery Counties, please visit my website:  http://www.patgarisrealtor.com/

Goals! You Can Achieve More Than You've Ever Dreamed.

  Alright, so we are almost two months into 2011 and you haven't set your goals or you made a new year's resolution and it has already been declared a failure. It is never too late to get started.

  When I look back at the years that I have set goals and written them down compared to the years when I didn't have any goals, there is no question that when I set goals and wrote them down, I achieved far more that year.

  It is always a struggle because, after all, achieving our goals requires discipline and change. Any change is hard and perminant change is REALLY hard. But if you want to see success, true success in every area of your life, you will have to fight for it. I think, now more than ever, we all need goals.

  Here are a few reasons why I believe people don't set goals:

• They don't know how to set goals
• They are searching for the perfect way to set goals
• They are afraid of change
• They are afraid of failure
• They are afraid of success

  Whatever your reason for not setting goals in the past, let me urge you to just go for it and see what you can accomplish. Start by just setting a few small goals and work to achieve them and reward yourself once you have accomplished a goal.

"I find it fascinating that most people plan their vacations with better care than they plan their lives. Perhaps it's because escape is easier than change"   

    -Jim Rohn

  It is believed that only 3% - 5% of all people set goals and write them down. So, if you decide you are going to set goals and work them, you will be among a select group. Goals are used by top-level athletes, successful business people, and high achievers in all fields.

   

"Discipline is the bridge between goals and accomplishments"     -Jim Rohn

  I have done alot of research on the subject of goal setting, but I am far from an expert. The following are some points that I have found to be the most helpful for me.

• Write them down with a deadline along with smaller manageable action steps to help you achieve the goal. Each action step should have a deadline as well. There are few specific ways to write the goal, but I prefer to write them in future tense, so for example, "I am losing 10 pounds by June 30th."
• Keep your goal list handy and read over them often, preferably every day.
• Create a goal board with pictures of your goals, maybe it's a picture of the new car you want. Visualize what it will look like or what you will feel like when you achieve that goal.
• Set short term and long term goals. For example, set 1 year goals, 5 year goals, and maybe even 10 year goals. For immediate action, try setting some 10 day goals.
• Set goals in different areas of your life. An example would be Business, Personal, Family, Financial, and Spiritual. You can obviously break this down to even more categories, but these have worked well for me.
• Make them Vibrant and Exciting.
• Make sure you have a powerful "Why" for each goal. Write it down in paragraph form and make sure it is your "why", not someone elses.
• Stay with it, if you slack off for a month or two, don't beat yourself up. Just get back to it and keep persisting
• Make your goals S.M.A.R.T. - this stands for Specific, Measurable, Attainable, Relevant, and Time-Bound (trackable)

  There are many good books out there on the subject of goal setting and there are many different ways to write goals and you have to find that way that works best for you. Even setting the smallest goal can have a huge affect on your life.
  I hope this helps and if any of your goals involve the buying or selling of real estate, I would be glad to help you.

To view all my listings in Bucks and Montgomery Counties, visit my website: http://www.patgarisrealtor.com/

Beautiful Twin in Souderton!

 

  This beautiful home is located in the much desired neighborhood of Banbury Crossing in Franconia Township. Situated at the end of a cul-de-sac, this home features 3 bedrooms and 2.5 baths.

In the back of the home you'll find a huge maintainance free deck overlooking a huge back yard that is fenced in.This home features a large living room, nice kitchen with an abundance of cabinets, a large breakfast area with separate sitting area, a huge professionally finished basement, a large master bedroom with cathedral ceiling, walk-closet, and full bath with shower, 2 other generously sized bedrooms, and a one car garage. Other ammenities include hardwood floor in foyer, a central vac system, brand new carpet on entire first floor, and a maintainance free PVC fence around back yard.



Huge deck overlooking the back yard



Very competitively price at $269,900.

This home also qualifies for the NO money down USDA mortgage program. (see my previous post for more details)

(Check out the video below)

To view this entire listing with all the photos or to see any of my other listings, visit my website.

Large living room with bay window

Spacious breakfast area, great for entertaining



Professionally finished basement

  

2010 In Review

  Well, 2010 is in the rear view mirror. This past year was again a tough one filled with many ups and downs. But, there were some bright spots which I will cover later. I saw my share of low appraisals, financing adversity, and deals that fell through. I also saw 30 yr. interest rates drop to almost 4% this past fall. For the majority of the year rates held in and around 4.5% until they spiked up to almost 5% just before the holidays. Fortunately, they have settled in right now at about 4.75% and it sounds like that's where they will remain at least for the time being.
  I also saw buyers get good deals and I saw sellers who were realistic with their price get their house sold in a reasonable period of time. The interesting thing is that although in 2010 there were fewer single family residential properties(excludes condos) sold in both Bucks and Montgomery Counties than in 2009, the average settled price in both counties increased. The average median settled price also increased.
  I know the job market is tough out there right now, but I think throughout this year we will see more hiring in our local area. In spite of that, there are many people who can afford to buy or are on the verge of being able to afford to buy, and yet they are paralyzed by the negative news reports and the neigh sayers. We have not seen affordability at this level in many, many years. Opportunity is definately knocking, and yet my fear is that alot of buyers will wait until the rest of the crowd is moving and then they will follow. By the time the news media starts releasing positive stories about the housing market, the opportunity that exists right now will most likely be gone.
  For those of you out there struggling to find work, I pray that you will find something soon. For those of you out there who have jobs and were thinking of buying a house sometime in the next couple of years, now is the right time.
  I have included below just a snapshot of market information to help you better understand our local market. The information below is for 2010 compared to 2009. Source: TREND multiple listing service.

Bucks County, PA (2010)
Settled Single Family (excludes condos)                       4,548  (-5.82%)

Avg. Settled Price                                                    $343,000   (+4.26%)

Median Settled Price                                               $295,000    (+3.87%)

Avg. Sold Price/Original List Price                           92.35%    (+0.08%)

Montgomery County, PA (2010)
Settled Single Family (excludes condos)                      6,401  (-6.77%)

Avg. Settled Price                                                   $327,000  (+5.83%)

Median Settled Price                                               $270,000  (+3.85%)

Avg. Sold Price/Original List Price                           92.34%   (-0.32%)

To see all my listings in the Bucks-Mont area, visit: http://www.patgarisrealtor.com/

Great Home Financing Opportunity!

  It's called a USDA Rural Development Guaranteed Mortgage. This a government guaranteed and funded loan similar to an FHA loan, except the USDA loan is limited to certain rural areas, has income limits, and the qualifying ratios are a bit more stringent. This is a 100% loan to value(100% LTV) program that is geared to help moderate income families purchase a home. This offers an excellent opportunity to those who qualify.
  The USDA Office of Rural development is an agency with the United States Department of Agriculture which runs programs intended to improve the economy and quality of life in rural America.  Their financial programs support such essential public facilities and services as water and sewer systems, housing, health clinics, emergency service facilities and electric and telephone service. Click the link above for more information.
  With prices and interest rates at such reasonable levels, home ownership is more obtainable than it has been in a long time. This is just one more way to make that dream a reality. Some of the towns that are eligible in the Bucks-Mont area are Souderton, Perkasie, Harleysville, Sellersville, and Quakertown. To check the eligibility of an exact address, visit the USDA link at the very top of this page.
  The major benefits of this loan program are:

• 100% financing (3.5% funding fee required, can come from gift, seller, or be added to mortgage)
• Zero down payment and there is no minimum buyer contribution required.
• Income limit for family of 1-4 persons is $90,050 and family of 5-8 persons is $118,850
• No limit on Seller concessions
• No Private Mortgage Insurance(PMI) required
• No reserves required
• Low 30 Yr. Fixed rates (similar to FHA rates) - This is NOT a sub prime mortgage
• Flexible Credit guidelines

Here is an example of a loan comparison between a typical FHA mortgage and a USDA mortgage;
House Price of $230,000 with annual taxes of $3400 and Seller concession of $10,000.
(USDA requires a 3.5% funding fee which in this case we will add it to the amount being mortgaged)

                               USDA                                                              FHA
                          $238,050 mortgage                                    $221,950 mortgage
                             No Down Pmt.                                            $8,050 down pmt

                        $1206.16 Principal & Interest                     $1124.59 Principal & Interest
                        $  283.33 Taxes                                         $  283.33 Taxes
                        $    50.00 Insurance                                    $   50.00  Insurance
                        $      0.00 PMI                                            $ 100.00 PMI
                        $1539.49 total monthly pmt                        $1557.92 Total monthly pmt

As you can see with NO MONEY OUT OF POCKET and NO PMI, the USDA monthly pmt is actually less than the FHA loan.

  The information above is for your information and I am not promoting that someone should necessarily finance 100%. Personally, I believe it is best to try to have at least 3.5% down of your own money rather than finance 100%, however with house prices at near rock bottom it is at less risky than it was 5 years ago when prices were peaking.
  I hope you find this information helpful and feel free to contact me if you need any help.

  To view all my listings in the Bucks-Mont area, please visit: http://www.patgarisrealtor.com/