One of the main factors to determine how the real estate market is doing is to actually look at the books of a company such as Fannie Mae. Just posted on Wednesday, August 8th, Fannie Mae recorded a $5.1 billion profit during the months of April through June. This is a big sign as the company will not need any more bailout money this past quarter.
Fannie Mae received a huge bailout back in 2008 due to being near bankruptcy. This is a good sign that the company is bouncing back as well as the real estate market.
As of the end of the second quarter, Fannie Mae has profited $7.8 billion the first half of 2012. The reason behind the company’s successful quarter is due to “improved home prices, improved sales prices on the company’s real-estate owned properties, and a decline in the single-family serious delinquency rate”, according to executive vice president and chief financial officer, Susan McFarland.
According to Fannie Mae’s press release, single-family serious delinquencies have declined for the ninth consecutive quarter.
Fannie Mae is using these profits to pay back its debts to the Department of Treasury. Fannie Mae has stated to be paying out $2.9 billion to the Department of Treasury for their second quarter dividends.
No one is going to declare a housing recovery as of yet, but it is encouraging when the signs show improvement.
Here is a chart provided my Fannie Mae regarding the withdraws from the Department of Treasury as well as the pay backs between 2008 to 2012.
Not knowing how much you can afford to pay for a home before you make an offer.
You can avoid this mistake by going through the process of getting pre-qualified and then pre-approved with a mortgage lender. You will then receive a certificate of eligibility to go house shopping and make offers with your realtor.
Not finding out in advance who the real estate agent represents.
This mistake can be avoided by….Asking your realtor! People think their agent is working for them, but unless the agent is working as your buyer representative, then he or she are representing the seller.
Not realizing that the wrong mortgage can cost thousands of dollars in unnecessary interest and taxes.
This mistake can be avoiding through consulting with a mortgage consultant before making a final decision on which mortgage to choose. You can never ask too many questions in the home buying process.
Not looking for hidden defects before buying a home.
A home inspection should always be conducted by a professional before purchasing.
Not knowing how your debt can affect your ability to buy or refinance a home. Be 100 percent honest about your debts when buying a home. You need a good credit profile in order to purchase a home, so start working on it a year in advance of when you want to buy. Speak with a mortgage professional to help give you guidance and improve your credit.
Also, on a side note, if you are in the process of buying a home, DO NOT add any new debts to your credit! Don’t open credit cards, don’t buy a car, don’t do anything until your transaction has closed and you have the keys in your hand.
Last Friday, November 18, 2011, President Obama signed a bill that restored the loan limits for FHA (Federal Housing Administration) mortgages. For homeowners in the Inland Empire area (Riverside and San Bernardino counties) the loan limits went from $355,350 back up to $500,000.
However, this bill only increased FHA loans, and did not include Fannie Mae or Freddie Mac. Currently, Fannie Mae and Freddie Mac loan limits are at $417,000. Keep in mind, President Obama did pass a new refinance program for Fannie Mae and Freddie Mac that will benefit underwater mortgages.
With the loan limits being restored to $500,000 until December 31, 2013, we can expect more home sales within the next two years. Overall the FHA loan limit increase will benefit future homeowners.