Chicago Hispanics Losing Their Homes

We often hear the phrase “the American dream.” To many, this is the idea that, with a little hard work, anyone in this country can get a good job, obtain an education, raise a family and top it all off by becoming a homeowner. In the city of Chicago, the American dream is a reality for many people, especially Hispanics. Throughout the north, south and west sides, as well as the suburbs, Hispanics all throughout the city are homeowners and, in some cases, own multiple buildings. However, there are dangers that are creeping into many Hispanic neighborhoods. These dangers are costing families hundreds, even thousands of dollars, plus, more tragically, their American dream: their home.

In recent years, many homeowners have turned to refinancing their homes to ease financial woes. In addition, new homeowners have turned to mortgage plans with low initial interest rates so that their payments can start off low. There are big financial risks to refinancing a home or starting off as a homeowner with an interest rate that can later equal more money. Know the risks, be prepared financially, and choose the right mortgage and interest-rate option for you.

Chicago has seen a surge in the number of homes that have been foreclosed. This means that you no longer are able to keep up with your monthly payment, so the bank steps in and takes your home. In Chicago, foreclosures of homes is expected to reach 36,000, according to Crain’s Chicago Business. In many north side Hispanic neighborhoods, such as Avondale, foreclosures have jumped by 103 percent. These predominately Hispanic north side neighborhoods have been hit the hardest by foreclosures. Some experts agree that the cause of these foreclosures is the refinancing of homes under adjustable-rate mortgages. If you are going to move forward with the decision to refinance, or if you’re getting a variable interest rate that is not fixed, know all of your options. Read your paperwork and consult with your family and experts before making a decision.
When a person refinances, they typically do so for one of two reasons: to lower their current mortgage payment, or to obtain money as a way to ease financial strains. Those who refinance in order to lower monthly mortgage payments typically have stellar credit and refinance to take advantage of lower interest rates which equal a lower monthly payment. Those who refinance for cash are essentially borrowing a loan against the equity of their home. This means that you are taking a loan out on what you have already put toward your home. People refinance for money to help pay off other loans, credit card debt, medical bills and so on. Both of these options sound like a reasonable idea, but be sure that you are able to pay off higher payments in the long run.

Other factors that have contributed to people in the city losing their homes are adjustable-rate mortgages and interest-only loans. With ARM loans, you start off with low monthly payments and your payments increase every time there is an interest rate increase. Well, what was happening was that people could start off with a mortgage as low as $1,200 a month and in just a few years their mortgage would jump to $2,000 a month. Interest-only loans are those that you begin only paying off the interest initially, which is a low payment. However, when it’s time to start actually paying off your house – the principal – payments can jump by incredible amounts.

Overall, if you are ready for a home, weigh your financial options – will a fixed payment be more predictable and safer? Probably. Do you really need to refinance for $50,000? Remember, the best way to resolve financial worries is budgeting and knowing what you can afford.

Condos: Should you buy???

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  In 2006, the number of married households fell below the 50 percent level to 48 percent, according to the U.S. Census, meaning more singles and non-traditional households are the majority of housing consumers.


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  " Households are increasingly headed by singles. Young people are delaying marriage. The Census Bureau says that women today marry after age 26, while women in 1960 married at age 20. Half of marriages end in divorce.


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  Single women homebuyers make up nearly a quarter of the market, according to the National Association of Realtors, accounting for nearly 30 percent of total homeowner growth between 1994 and 2002, according to the Harvard Center for Joint Housing Studies in 2003.
  Single females make up 42 percent of condo buyers. Single males make up 20 percent, while married couples constitute 30 percent of condo buyers.
  The Tax Relief Act of 1997 has introduced unprecedented liquidity and mobility to the housing market, making it possible to own a home, occupy it for a minimum of two years, and move out in two years without taking a tax hit.


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  NAR's Profile of Home Buyers and Sellers 2006 says that condo buyers (median age: 43) are older than single-family home buyers (median age 41.) "The median age of condo buyers skews older because condos attract the bookends of the housing market -- first-time buyers, and empty-nesters (boomers) and retirees, who no longer need a large single family home but like lots of amenities in a simpler lifestyle," explains Molony.


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  Lenders have relaxed lending standards to allow younger and single homebuyers to buy homes by removing obstacles (such as differing credit standards for divorced women,) and creating a wide variety of adjustable or interest-only hybrids that don't penalize borrowers for short-term ownership. This has boosted the first-time homebuyer market as well as single female homebuyers.


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  Condominium buildings offer products not easily found in single-family homes, such as one-bedroom, one-bath configurations which appeal to singles and first-time homebuyers. "Among all condo buyers, the percentage of first-time buyers are highest among single-female households (59 compared to 48 percent among all condo buyers," says Molony.
  One out of ten homeowners owns a second home, often a condominium in the city or a favorite vacation spot.
  
• The tenure in condos is shorter (4 years in buildings with 5 or more units), while the median for detached single family homes is 6 years. "

Needless to say if you are debating on whether to buy a condo because of re-sale value everyone needs a home, everyone's situation is different and not everyone is ready to deal with the responsibilities of owing a home but I'll leave this decision up to you :)

Men versus Women ! Who buys homes faster?

"Single men and women make up about one-third of the nation's 111 million households. Toss in unmarried moms and dads living with children younger than 18, and singles account for almost half.But when it comes to housing, about the only thing the 55 million single households have in common is that they are not married.Face it: Men and women are different. And when housing is concerned, the incongruities rise to the same level as how the two genders use TV remote controls, ask for directions, judge distances and hunt or gather.For example, they operate differently in the buying process. Guess which sex wants to make a decision as quickly as possible and which one wants to take more time?

According to a small survey taken early this year by Countrywide Home Loans, men run while women saunter. In fact, nearly half the women polled said they did not take enough time when they bought their current residence while almost a quarter of the men surveyed said the process took way too long.Countrywide's findings are based on a telephone poll of just 219 owners, so they are not statistically significant. But plenty of other evidence shows how differently the genders approach housing and homeownership. And none of it surprises Wanda McPhaden, a partner in BCA Real Estate Investments, a female-centric company in New York City.BCA, which stands for believe, create and achieve, was created to show women how they, too, can create wealth by investing in real estate."Women usually don't think about the benefits of homeownership until they are older," says McPhaden, a 20-year real estate veteran whose new company is working with a female builder in Westport, Conn., and is backed by several women investors. "Men get it because they are taught very early on. Women aren't."Perhaps that's why male buyers tend to be younger than their female counterparts. The median age of single men who purchased houses between 2000 and midyear 2003 was 37, according to the U.S. Census Bureau.

In the same period, the median age of single female buyers was 42.An even deeper look at the numbers shows that men account for the largest share of single buyers younger than 25, while women make up the largest share of single purchasers in the 45-to-64 age group and the older-than-65 set."My theory is that women don't think they can be homeowners until they are older," says McPhaden, who is also starting a small investors club for women with less than $50,000 to put into real estate."

What do you think???

What is a transfer tax when purchasing a home?

A transfer tax is essentially a transaction fee (often relatively small in relation to the value of property) imposed on the transfer of title to property. This kind of tax may be imposed where there is a legal requirement for registration of the transfer, such as transfers of real estate, shares, or bonds.

Examples of such taxes include some forms of stamp duty, property transfer tax, and levies for the formal registration of a transfer. In some jurisdictions, transfers of certain forms of property require confirmation by a notary. The notary's fees can be considered a form of transfer tax, although they are not payable to a governmental tax authority.

Wanna know more on what goes on in the sale of a home??

How Much Should You Sell Your Home For?

How Much Should You Sell Your Home For?


Are you having trouble selling your home? Have you dropped your asking price repeatedly? If you've followed the advice of your realtor and still aren't having any luck, it's possible you haven't found the asking price that's right for your home, or for the current housing market, for that matter.

Most people have an idea of what they think their home is worth. But you can't always depend on how much you bought it for, how many improvements you made to the home or even how much other homes in your area are selling for. All these things should give you a good ballpark asking price, but ultimately, the market dictates what your home is really worth. In other words, your home is only worth as much as someone is willing to pay for it.

Dropping an asking price on your home can be a difficult thing to do. You may have spent many years in the home and personally invested your time and money into making your home better. Whatever the case, if you're serious about selling your home, you may have to lower your asking price if you really want it to sell.



Or contact me and I can provide you with the latest market analysis.

Mortage Industry is Crumbling - Who do you run to?

Subprime lenders were particularly susceptible to the change in the housing market, because they dealt with borrowers who often stretched financially to buy homes; more than half, for instance, took out adjustable mortgages. Many subprime lenders were not obligated to follow the tougher regulations that apply to commercial banks.

The meltdown among lenders that specialize in home loans to people with weak credit, known in the industry as subprime lenders, again ravaged stock prices. Financial institutions from Britain's HSBC Holdings PLC to subprime leader Countrywide Financial Corp. sank amid reports of strained portfolios as loans went bad.

The latest to rattle the markets was New Century Financial Corp., the nation's second-largest subprime lender. The Irvine, Calif.-based company disclosed a criminal probe into the trading of its securities, and into the lender's accounting procedures.
Already beleaguered investors were swift to react. New Century's shares lost 60 percent on Monday - wiping $532 million from its market value. Wall Street, still wobbly after last week's huge plunge, also punished the rest of an industry blamed for loosening their lending standards amid an eroding housing market.

"We see increasing evidence that this industry is now in a downward spiral whereby each negative development fuels additional deterioration in key fundamentals including origination volume, pricing, credit and most importantly funding," Stifel Nicolaus analyst Christopher Brendler said.

Like WHOA!!! What do you do??? Not to worry but continue working on your credit and have a good down payment. The days will end where a person can have 100% financing. This is an advantage in the long run and will prevent foreclosures.