Mortgages and Personal Finance
November 5th, 2009 — Insurance, Real Estate
A few days ago we discussed whether you need to obtain earthquake insurance. Today we cover a topic that more often impacts the midwest, which is flooding.
Like earthquakes, your typical homeowner’s and renter’s insurance does not cover damage from flooding. If you live in an area that is prone to flooding, chances are your mortgage lender already requires you to maintain flood insurance. However, where your house is located has a huge impact on how much flood damage you are likely to sustain.
November 3rd, 2009 — Insurance, Real Estate
If you have purchased homeowner’s insurance and think you are covered against natural disasters like hurricanes, earthquakes, and wildfires, think again. Standard homeowner’s and renter’s insurance policies do not cover these types of events, which means you could be out of pocket if a disaster like this strikes.
Today we will cover earthquake insurance and in future posts we will talk about insurance to protect you against hurricanes and flooding.
October 29th, 2009 — Real Estate
In more evidence that the housing market is recovering, the latest Case-Shiller/S&P Home Price Index shows that prices in most metro areas covered by the survey increased again in August, as compared to a year ago. The Index recorded a 1.2% average price gain in the 20 cities it covers, the fourth straight month that prices have climbed.
As with last month, the Minneapolis and San Francisco metro areas paced the increase, rising 3.2% and 2.8% respectively. Chicago, Los Angeles, Phoenix, and Washington D.C. all posted price gains of over 1% for August.
October 27th, 2009 — Home Loans, Mortgages, Real Estate
If you think we’re through with the sub-prime and foreclosure crises in the housing market – prepare yourself. There could be another shoe dropping and that shoe is the looming Option ARM crisis.
Option ARMs are typically 30-year adjustable rate mortgages that initially offer the borrower four monthly payment options: a specified minimum payment, an interest-only payment, a 15-year fully amortizing payment, and a 30-year fully amortizing payment. Option ARMs are also known as “pick-a-payment” or “pay-option” ARMs. Option ARMs are often offered with a very low teaser rate (often as low as 1%) which translates into very low minimum payments for the first year of the ARM.
October 15th, 2009 — Home Loans, Investing, Real Estate
There’s an interesting article in today’s Business Insider that argues the housing bubble, or some form of it, has returned. Is it possible that after so many months of falling prices and glum out look that the market has fully turned around so quickly? There is – surprisingly – some evidence to suggest this might be the case, at least in certain housing markets.
While home prices have not yet reached overinflated levels, the enthusiasm (some would call it mania) and the speculation of the earlier housing boom have returned. Markets like Las Vegas which were once the epicenter of the foreclosure crisis are now bustling once again.
While home prices in Vegas are down a whopping 50% off their peak reached in 2006, the inventory of houses on the market is now down to a 3-month supply. Compare this to the national average of 8.5 months of supply on the market and it becomes clear that something is going on in Las Vegas and other foreclosure centers. In addition, 40% of all transactions in Vegas are all cash, indicating that deep pocketed speculators are entering the market.
All cash deals? Speculators? Dwindling supply and transactions completed in the blink of an eye? Sounds like mania has returned to Vegas. The only question is when and if this craziness moves on to other hard-hit housing markets.