Currently browsing home equity tag archives.

The Arizona Economy, according to Marshall Vest

On December 18, 2009, in Market News, Real Estate Information, Tyler Ford & Todd Abelson, by Todd Abelson | Comments

Every year, around this time, the University of Arizona presents their Economic Forecast Luncheon. Every year for the past 20 (or more) Marshall Vest, Director of the Economic and Business Research Center, Eller College of Management, spins the yarn of information. I have had the priviledge of attending for the past 12 years and cherish the contact and information.

Some years, Mr. Vest has actually been seen cracking a smile; some years maybe a sigh. This year he was making a few jokes attempting and ease the sting from what he was presenting. Taking copious notes, and presenting them here in my own words, is a summary of what I heard him say:

  • Tucson is locked in the teeth of a great recession and will lag behind the rest of the country, but we are coming around
  • Arizona has been the hardest hit state ranking 50th in job growth, 4th worst in residential foreclosures, and 2nd worst with respect to home-owner equity
  • The State budget has a $2 BILLION shortfall  and there is no way the state can cut enough to balance; therefore the only option is to raise taxes ALOT (i.e., the State is technically “insolvent”). The “system” is clearly broken and our way of life is at stake.

The key to Arizona’s recovery is JOBS. The questions are – what will it take? how long will it take? He projects negative job growth through 2010 with unemployment peaking (locally) at 10.5%. Jobs growth is expected in 2011 and 2012 at a rate of 3%-5% with unemployment dropping to a respectible 6% in 2014 (5 years from now!).

Click here to view his presentation in it’s entirety.

Call Todd Abelson and Tyler Ford at Sunstreet Mortgage in Tucson Arizona for all your Mortgage Needs!

The Rising Cost Of A Small Downpayment

On October 17, 2008, in Interest Rates, Mortgage Educational Information, by Tyler Ford | Comments

As mortgage insurance defaults rise, rates increase and guidelines tightenPrivate Mortgage Insurance (PMI) is a mortgage lender’s insurance policy against highly-leveraged homeowners.  It’s typically required when homeowner equity is less than 20 percent at the time of closing.

With PMI defaults up 40 percent over last year, though, private mortgage insurers are taking big losses.

They’re also taking outsized steps to prevent additional claims going forward and that is bad news for low-equity homeowners and home buyers.

The first PMI change new, higher insurance rates.

Like home insurers that adjust premiums after a worse-than-expected storm season, PMI insurers are raising mortgage insurance rates for all homeowners, regardless of credit history.  The higher premiums are meant to offset the higher losses.

And, the second change is that some PMI firms are discontinuing coverage for “high-risk” transaction types.  This includes purchases of non-owner occupied properties, and cash out refinances above 85 percent loan-to-value.

Both changes, however, point to similar conclusion about home loans: Home equity is increasingly important for today’s homeowner. 

PMI rates are higher than they were six months ago and the rising number of defaults makes it likely that rates will rise again soon.  As PMI rates increase, so does the cost of homeownership for people whose lenders require it.

HELOCs – why EVERYONE should have one!

On February 5, 2008, in Mortgage Programs & News, by Todd Abelson | Comments

helic imageIf you could have access to the equity in your home, regardless of whether or not you EVER tapped it, why would you not want it?

I’ve had this discussion with literally thousands of homeowners over the past 10 years and will continue to shout it from the mountain top!

The objections I hear are always the same: “I want to pay OFF my mortgage so why would I want another mortgage?” and “what on earth would I do with it?”. There are obvious disadvantages to the abuse of debt but the concept that most people continue to miss is that debt is a part of our financial life and managed wisely is GOOD.

Let’s look at the ADVANTAGES of just being able to access your equity, but first some basic assumptions:

1. Home Equity, in and of itself, earns 0% rate of return. The proof:  property appreciation is based on the physical value alone (regardless of any underlying liens).

2. Home Equity, in and of itself, is NOT safe. The proof: look at the declining property values in California, Florida and Nevada.

3. Home Equity, in and of itself, is NOT accessible: The proof: try to take out a new loan after you lose your job or have a financial crisis. read more

Recent Comments

  • Tyler Ford: Great job Todd!
  • Tyler Ford: Seems as through the real estate market is picking up and home prices are stabilizing.
  • Gail Richards: Thanks Todd! More Great Information! Thanks for being on top of everything…your the best! Gail
  • admin: Hey Todd, Can’t wait to pick a winner!
  • steve kargel: Thank you Todd for sending us your updates and especially for insights like the Eller annual economic...

Recent Readers