May 14, 2010 Newsletter

Market has had a good run with the $8000.00 tax credit driving the first time home buyers into the marketplace. Contracts had to be signed by April 30, 2010 and settlement by June 30. We’ll see how the market reacts without the tax incentives.

Interest rates as of today May 12, 2010 look to be at 5.0%. Surprisingly we have not seen much of a run up on rates, but most experts feel it is inevitable.

Reverse mortgages have been discussed before in this newsletter, but given the current market, we should revisit them for a different reason. To review, a reverse mortgage is available to anyone 62 or older who has equity in their principal residence. The loan is driven more by appraised value against equity, as opposed to income. A borrower who gets a reverse mortgage never makes another mortgage payment. Each month the amount of the payment gets added to the principal, and it is assumed, based on the borrower’s equity, that house, not the individual will ultimately pay off the loan when the borrower passes on or the home is sold. WELL, reverse mortgages are also available for purchase. So an individual who has lots of equity in their principal residence and wants to sell and downsize can follow this formula. Sell their home and take the equity out. Find a new smaller less expensive home and put part of your equity down on the new place, keeping a chunk of your cash from the old homestead to live on. The new reverse mortgage will not require a mortgage payment AND you have kept yourself liquid. I think anyone over 62 who is looking to downsize and has significant equity in their existing home, should look hard and long at using a reverse mortgage for purchase.

If you need to talk to a lender about doing a reverse, call me and I’ll put you in touch with experts in these types of loans.

Now is the time to assess your situation as to buying and selling. Prices are still very good and the interest rates are still down. If you need a realtor referral, we can help.

There is still time to register for the Colony Title Invitational Tennis Tourney for Shock Trauma. Call me for details.

I want to welcome Sherry Collins to the Colony family, Sherry brings twelve years of experience and we are happy to have her join us. If you know Sherry or have worked with Sherry feel free to call or drop by. Her extension is 3016.

We want to be your title company and law firm. Call me at 410 884 1160 x3007 or email me at tee.tillman@colonytitle.com.