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February, 2010 Newsletter

+++++++++++ February 1, 2010 +++++++++++++++++++

Introduction: Sales Results Show Good Gains
Mortgage Rate Update: Rates Ease
This Month's Tip: Mortgage Preparation and Prequalification

Introduction: New and Resale Levels Fall

After a rising surge from September through November,
existing-home sales fell as expected in December after
first-time buyers rushed to complete sales before the
original November deadline for the tax credit. However,
prices rose from December 2008 and annual sales improved
in 2009, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes,
condominiums and co-ops – fell 16.7 percent to a seasonally
adjusted annual rate1 of 5.45 million units in December
from 6.54 million in November, but remain 15.0 percent above
the 4.74 million-unit level in December 2008.

For all of 2009 there were 5,156,000 existing-home sales,
which was 4.9 percent higher than the 4,913,000 transactions
recorded in 2008; it was the first annual sales gain since 2005.

Lawrence Yun, NAR chief economist, said there were no surprises
in the data. “It’s significant that home sales remain above
year-ago levels, but the market is going through a period of
swings driven by the tax credit,” he said. “We’ll likely have
another surge in the spring as home buyers take advantage of
the extended and expanded tax credit. By early summer the
overall market should benefit from more balanced inventory,
and sales are on track to rise again in 2010. However, the
job market remains a concern and could dampen the housing
recovery – job creation is key to a continued recovery in
the second half of the year.”

Sales of new one-family houses in December 2009 were at a
seasonally adjusted annual rate of 342,000, according to
estimates released jointly January 27th by the U.S. Census
Bureau and the Department of Housing and Urban Development.
This is 7.6 percent (±14.6%) below the revised November
rate of 370,000 and is 8.6 percent (±15.2%)* below the
December 2008 estimate of 374,000.

The median sales price of new houses sold in December 2009
was $221,300; the average sales price was $290,600. The
seasonally adjusted estimate of new houses for sale at
the end of December was 231,000. This represents a supply
of 8.1 months at the current sales rate.

An estimated 374,000 new homes were sold in 2009. This is
22.9 percent (±2.9%) below the 2008 figure of 485,000.


Mortgage Rate Update: Rates Ease

After showing some fairly strong increases at the end of
2009, long-term mortgage rates generally fell during the
first month of the new year. According to mortgage company
Freddie Mac, 30-year fixed-rate mortgages showed an average
of 4.98% in the period that ended January 28th, after starting
the month at an average of 5.09%. Likewise, 15-year fixed-rate
mortgage averages similarly declined, fron an average of 4.50% at
the onset of the month to 4.39% at the end of the period.

It is important to remember that although we continue to see
fluctuation both up and down in the averages, the overall rate
structure continues to be some of the best in decades. It is
just this type of environment where buyers who spend too much
time agonizing over these fluctuations instead of preparing
can get caught in a rapidly increasing rate situation. This
month's tip focuses on this subject, mortgage preparation
and prequalification.

For current average mortgage rates, see the
rates page.

For more information on mortgages, visit the
Mortgage Section

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This Month's Tip: Mortgage Preparation and Prequalification

Before you sign on the dotted line taking possession of your new home,
before you even put your signature on the application for the mortgage to
pay for your home, you will want to thoroughly prepare yourself--and your
finances--for that application. Once things are rolling (a house selected,
the mortgage track in process) it sometimes is too late to back up and
get important pieces of the process in order.

By getting things in line prior to applying for a mortgage, you will greatly
increase the likelihood that the mortgage process will be smoother and,
in many cases, improve your chances of an approval at the same time.
The mortgage game can be a stressfull one, so whatever you can do to
make it easier will work to your benefit!

Your Budget

The very first step should be a review of your current household budget.
If you are barely making ends meet now--without a house--it will be
extremely difficult for you WITH a house. Unless you make adjustments
now, it will be almost impossible to make changes when you are staring
at a monthly mortgage payment as well as taxes, insurance, repairs,
maintenance and more. For help in this area, see the section on
budgeting to give yours a tuneup.
Your Budget

Credit Standing

Next, you will need to take a clear headed look at your current credit
situation. Good credit, average credit or bad credit? High credit score
or low? Little credit exposure or excessive credit exposure? Having
problems here will not necessarily preclude a mortgage, but understanding
the state of your credit "health" will go a long way in pointing you--and
your lender--in the right direction. See the discussion on credit on the site:
Your credit

Gather Documents

When it is time to apply for your mortgage, you can make the process
simpler by gathering some important documents in advance. These

+ W-2s for the last 2 years
+ Recent paystubs
+ Bank account information--where, account numbers, balances and
last 3 months of statements
+ List of all open loans and credit cards with payments and estimated
+ List of other monthly, quarterly or yearly expenses
+ Any employment information related to your job such as contracts,
overtime agreements, etc.

Your lender may request any or all of this information and documentation.
By having it available at application time, you'll not only smooth the process
but put a smile on your lender's face, too!

Next Month's Tip: You Need To Have Vision


The Home Buying Checklist

Many of our visitors have said that one of the most valuable
aspects of the Home Buyer's Information Center is the
Buying Checklist, where they can make sure that all
the bases have been touched.
You can find the checklist

As always, if you have suggestions for improving the
site, or topics you would like to see addressed in
this newsletter (or, if you have used the Home Buyer's
Information Center to successfully purchase a home),
drop us a quick line

A special thanks to all those who have written to let us know
that they have found the Home Buyer's Information Center a
helpful resource in their buying process.

Have a great month and good luck in all your endeavors!

The Team at the Home Buyer's Information Center

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