House Prices Continue Their Ascent


Eye on Housing

Data released by the Federal Housing Finance Agency (FHFA) indicates that house prices rose by 0.6% on a seasonally adjusted basis over the month of February 2014. In addition, previous estimates of house price gains in January, 0.5%, and in December, 0.7%, were marked down slightly; to 0.4% and 0.6% respectively. February marks the 3rd consecutive monthly increase and the 24th increase in the past 25 months for FHFA’s House Price Index – Purchase Only. Over this 25-month period, the House Price Index – Purchase Only has risen by 15.0% and is now at roughly the same level as in June 2005.

Presentation1

National house price appreciation is taking place because most areas of the country are experiencing house price increases. However, many regions of the country recorded monthly house price changes, up or down, that deviated significantly from the 0.6% national average. As the figure below illustrates, house…

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Interest Rates Headed Higher


Troubled Assets

Interest Rates Headed Higher Interest rates have gone up in the recent past. With that, there are those out there waiting for rates to go back down. Unfortunately, they may have to wait decades for that to happen. Future interest rates, as projected by Freddie Mac, are shown in this graph. As time progresses, buyers will have to pay progressively higher interest rates.

When talking about this, some people ask me if these higher interest rates will cause home prices in the Portland metro area to go back down. Higher interest rates will definately create a headwind for housing prices (most buyers buy the payment, not the house price, and a higher interest rate will increase the monthly payment). At the same time, however, economic growth in Portland has been increasing, its unemployment rate decreasing, and the general mood of the market is more optimistic. Further, with our current level of low inventory (3.1…

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Why Being Pre-Approved for a Loan Matters


BEN LeBRUN

So much has changed in the past few decades that the old ways of buying or selling a home simply won’t work today. For decades, buying a home was pretty much the same thing: You shopped around, made an offer and then went to the bank to get a loan. If you were denied or there were problems, you walked away.

Today, a buyer needs to speak to the bank and get approved prior to shopping and definitely before making an offer on a home. Not being pre-approved today won’t get you past the front door. Here’s why:

Markets move faster today

With online listings and so many real estate resources available to buyers and sellers, it’s easy to quickly get a property in front of the masses. Buyers aren’t waiting on a call or fax from their real estate agent like they did in the 1980s. Instead, motivated buyers get…

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Utility Issues with Rental Properties, by Troy Rappold, Rappold Property Management


When a rental property that is occupied by a tenant is sold to a new owner there are many details that require diligent attention. One of these areas is the utility billing and interim billing. Interim billing is one of the first things that you would want to cancel because an Owner doesn’t want to accidently pay for bill that isn’t their responsibility. This ensures proper and accurate billing. As a general rule, the tenant is responsible for all utilities for a single family home. In this case nothing changes if ownership changes and the tenant stays in place.  If the house is located in a city where the population is over 100K, the owner is responsible for the garbage service. In this case, the garbage bill is changed to the name of the new Owner.

 

As a local property management company, we have the garbage bills mailed to our office and we pay it out of the rental income on behalf of the owner. That way the charge will be reflected on the monthly statement. This is important because this expense is a tax write-off for the home owner. If the new Owner is going to move into the property, and the tenant is going to move out, then all utilities will be a prorated amount based upon the move out date of the tenant. If the tenant moves out on the 18th of the month, then they are responsible for 18 days’ worth of electricity, water, sewer, garbage and natural gas. As the property management company for the house, we track this and make sure all these charges are distributed correctly.

 

We also manage condominiums and often times the owner/investor will pay the Condo Association fees that include water, sewer and garbage. These charges are also a tax write off and can be tracked for the year. Although none of this is difficult to manage, it does need to be watched carefully so all parties involved pay only their share. This careful attention to detail is what we do here at Rappold Property Management.

 

Rappold Property Management, LLC

1125 SE Madison Street, suite #201

Portland, OR 97214

Phone: 503-232-5990

Fax: 503-232-1462

Beware of the Hidden Prepayment Penalty!


Ask Carolyn Warren

?????????????????? FHA loans — the first-time home buyer loans with only 3.5% down payment — have a hidden prepayment penalty that could cost you hundreds of dollars when you sell or refinance.

If you used an FHA loan (3.5% down payment) when you bought your house, get out the Truth-in-Lending form. Near the bottom, you’ll find in bold Prepayment Penalty. Is the box checked for may have or for will not have a prepayment penalty? Regardless of which box is checked, if you close your loan on any day of the month except for the last day, you will pay a penalty.

Question: “Can they do that? My documents says I will not have a prepayment penalty!”

Answer: Yes they can, and I guarantee you that they will. If you pay off your mortgage in the middle of the month, FHA will charge you interest for the entire month, no…

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