Patricia Paul Properties

Patricia Paul Properties

Commentary on Tucson Area Real Estate, Home Ownership, Rental Homes, and Life around the Tucson Community
Tag » Financial Information
Jan 24, 2010
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The very popular FHA insured home loans will be increasing some of their costs.  The first change will entail an increase to the up-front mortgage insurance premium paid at closing.  It is scheduled to increase to 2.25% of the loan amount in the spring. (It is currently at 1.75%).  So on a home loan of $100,000, the up-front fee would go from $1,750 to $2,250, or a $500 increase.  The FHA also intends to ask Congress to allow an increase in the annual premium (think higher monthly payments). 

The Agency will also be limiting the amount of sellers concessions allowed to apply to buyers closing costs.  Currently it can be up to 6% of the purchase price, but will be decreasing to a maximum of 3%.

Also, buyers with lower FICO credit scores may have to come up with larger down payments.  

These changes are being implemented to try to offset some of the losses the FHA has recently sustained.   The FHA (Federal Housing Authority) does not make the loans, they only insure them.  Currently more than 30% of home loans are FHA backed.  They are especially popular because they require far less down payment than conventional mortgages do.

What does this all mean?   If you are thinking about purchasing a home, the time to do it is now, before the changes.  And if you are thinking of selling a home, you might want to do that before costs increase for the buyers.  Their increased costs mean that much less is available to them for their purchase.

Please contact me if I can clarify any of this for you, or if you would like me to put you in touch with quality lenders.

Patricia Paul, GRI *** *** (520) 548-2078 







Dec 29, 2009
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You've probably heard of the term net worth, but do you actually know what it is, and how to figure yours?  Simply put, net worth is the difference between a household's assets and liabilities.   To calculate yours, first get a piece of paper, and draw a vertical line down the center of it.

On the left hand side of the paper, begin to list any assets (things that you own); a brief description of them, and their current value.  This might be your home if you own it (or are paying a mortgage), vehicles, money in bank accounts, savings accounts, retirement accounts, stocks or bonds, and personal possessions (Be conservative; only include saleable items, and don't overestimate.)

On the right side of the paper, begin to list your liabilities (things that you owe).  This might include the balance of your home mortgage, balance of any vehicle loans, credit card debt, any outstanding personal loans, etc. 

Now total up both columns.  If the asset side is larger than the liability side (and hopefully it is), then you have a positive net worth.  If the liability side is larger than the assets, you have a negative net worth, and it's time for you to do what you can about that.

This is a good exercise to perform at least once a year.  Then compare your net worth to previous years to get a picture of your personal finances and where you're headed.

The Federal Reserve recently announced that the average net worth of households has increased by 5%.  This is probably mostly due to the fact that many stock prices rallied earlier this year.

If you'd like help estimating the current value of your home, call me.  I'd be glad to help!

Patricia Paul, GRI *** *** (520) 548-2078

Dec 28, 2009
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Wouldn't it feel great to get out of debt and start saving instead?  If you agree, please take a moment to read this article by Eric Tyson on RIS Media.  Eric has some good, practical ideas for doing just that.

Apparently this challenging economy has prompted people to do as the title of this posting suggests.   The Federal Reserve reports that household debt shrank by an annual rate of 2.6% in Quarter 3 of 2009.   This was the 5th consecutive decline in this number.

Patricia Paul, GRI *** *** (520) 548-2078

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