America Tested...

Volume 12 Issue 10 October 2017

I n our economic commentaries we

always are fearful

of making predic-

tions. No matter

how much information

we have, there are always

unknown factors which

can change the future to a

significant degree. There

is no better example of

this than what so many

states just faced with Hurricanes

Harvey and Irma. An entire region of

our country devastated with an amazing

amount of support pouring in throughout

the country.

There is no doubt about the fact that

these natural disasters will have a major

effect upon our economy -- as well as

whichever storms fol-

low. From the devasta-

tion of local economies

to gas prices, there will

be a multitude of fac-

tors we are facing. In

the long-term there

will be an economic

revival as we rebuild

lives, houses and infra-

structure. We have rebuilt suc-

cessfully before and we will rebuild

again. America has always demonstrated

our resiliency.

However, there are major questions

which will remain far beyond these

events.

In This Issue P2 Lenders Ease Standards || P2 New Home vs. Resale

P3 America -Tested Again & Again || P4 The Need For Flood Insurance

Did you know…

Home listings across the U.S. that

receive 30 or more "favorites" on

Zillow within their first week on the

market sell in under two weeks and

for more money, which Zillow Chief

Economist Svenja Gudell said is a

sign of how competitive the housing

market has become.

Conversely, Zillow said homes that

get 10 or fewer favorites in their first

week go for less money and take more

than a month to sell.

Source: Zillow

Selected Interest Rates September 21, 2017

30 Year Mortgages——–3.83%

2017 High (March 16 %

2017 Low (Sept 14)——3.78%

15 Year Mortgages—— 3.13%

5/1 Hybrid ARMs——–—–3.17%

10 Year Treasuries—–—2.28%

Sources—Fed Reserve, Freddie Mac

Note: Average rates do not include fees

and points. Information is provided for

indicating trends only and should not be

used for comparison purposes.

Continued on Page 3

THIS NEWSLETTER IS BROUGHT TO YOU BY:

New Home vs…

T

here are pros and cons for both newly built and existing homes. Here are some

points to help you decide which is right for you:

Customization: New homes are designed to your taste. From the floor plan to colors, a new home is tailored to your personal needs and preferences. With a re-sale, you are purchasing a home that was crafted for someone else’s taste and lifestyle. Sure, you could change the floors and countertops, but why not avoid the hassle and move into a home which was designed just for you?

Location: You get to pick the lot upon which your new home will be located. Location can mean everything when choosing real estate. With a new home, you get to choose the model you want AND the location of your home. With a resale, you are limited to what is on the market and the model and location may not fit your needs. There is not the same need to compromise when you purchase a new home.

Community: Join a community of people who are just like you. When you purchase a new home, you are also becoming part of a new communi-ty. These relationships you establish with your new neighbors may last a lifetime.

Cost: New homes are more energy efficient. With the cost of

energy rising every year, new homes can save you money every day of the year in the long run. New homes are equipped with the latest green applianc-es and energy units. In addition, they are built to higher energy efficiency standards as opposed to resales built some time ago.

Cost: New homes require less maintenance. When you purchase a new home, every part of that home is new. A resale is used and the parts of the home will vary as far as their usage. You don’t know how long it will be before the roof or appliances will need to be repaired or replaced. In addition, in the long run new homes require less maintenance as today’s new homes are engineered specifically to minimize maintenance requirements. Moving takes energy and effort. Why add the worry about what will break the day after you move in? Cost: New homes come with special financing packages. Builders under-stand that the cost of ownership can be significantly affected by the cost of a mortgage. That is why builders offer special financing packages offered by expert mortgage advisors. These advi-sors can help you make the right choice to finance your home.

Page Two

“…Location can mean

everything when choosing

real estate…”

N

ational residential lend-

ers are easing credit

standards to keep the

housing market mov-

ing, though the changes bring lend-

ing nowhere near the ultra-loose

credit environment that sparked the

financial crisis. Fannie Mae and

Freddie Mac are rolling out new

programs to encourage homeowner-

ship. Fannie Mae is now allowing

borrowers to have higher debt levels

and still qualify for a home loan.

This includes raising the debt-to-

income ratio limit to 50% of pre-tax

income from 45% previously for

manually underwritten loans --

loans not approved through their

automated underwriting system.

The nation’s three major credit

agencies – Equifax, TransUnion and

Experian – are also dropping tax

liens and civil judgments from some

consumers’ credit profiles. This will

enable more Americans to qualify

for a home loan.

More recently, Fannie Mae and

Freddie Mac also announced pro-

grams to allow for purchase loans

without appraisals, although the

loans that qualify are limited to start

out with....����

Sources: GoRion, Fannie Mae and

Freddie Mac

Lenders Ease Standards

Page Three

Cost: New homes are priced right. While many home shoppers are bargain hunting for used homes, there is no way of knowing whether they actual-ly received a bargain when they made their purchase. Often times, there are multiple contracts submitted for lower priced resales which raises the price of these homes. You may have to make a decision quickly and not be able to take into account the cost factors mentioned in this article. With a new home, the price is set at an established market price which has been verified again and again by a qualified appraiser. Don’t take a chance on a value which is unde-terminable.

Peace of Mind: New homes have home warranties. New homes are offered with home warranties that are not standard with resales. These war-ranties cover the home from top to bottom. With a resale, you are going to pay for repairs from day one, unless you invest in a home warranty on your own.

Looking Ahead: Today’s new homes are built with the future in mind. Technology is quickly advanc-ing each year, and most new homes offer features that can be updated so that you can keep up with future inno-vations. To achieve these advances with existing homes, you may have to replace entire systems or make major changes to the structure and/or interior of your home.

Planning for the future with a new home is not limited to technology. With the freedom of choice that comes with building a new home, you can decide what features you would like to put in place for future improvements, such as a basement which is ready to finish in the future.

Looking Ahead: New homes are more attractive to resell. If you are thinking ahead to your next move, realize that should you purchase an existing home, your resale will be even older five to ten years from now. More of the features are likely to be outdated. Your new home is going to be more attractive to sell when you are ready to move up or retire –whenever your next move is coming.

Bonus Reason: Safety. New homes have fire safety features which were not required previously. This includes fire-

retardant carpets and insulation and the latest smoke detector technology.

There is no way to measure the value of safety, convenience and comfort. But when you put it all together, a new home measures up as the real value in home ownership...����

...Resale

Continue from Page 2

©2017, All rights reserved

The Hershman Group www.originationpro.com

1-800/581-5678

Again & Again

Continued from Page 1

For example, we all know that

houses are expensive to build and

"excessive" regulations are part of

that equation. On the other hand, as

the insurance companies continue to

point out, the lack of adequate

building and zoning standards in

some areas of the country have in-

creased the cost of rebuilding sig-

nificantly. Regulations can add ex-

pensive costs, but lack of regula-

tions can hit us with devastating

costs when disasters strike.

In other words, we have some very

hard questions to address, questions

which are very difficult to answer.

And coming out with the right an-

swers will help us pass this test in

the future — long after we rebuild

this time around...����

“…help us past

this test in the

future...”

The Need For Flood Insurance

Address Correction Requested

In This Issue: America —

Tested Again & Again

I n the wake of Hurricanes Harvey and Irma, the Insurance Information

Institute (I.I.I.) released a primer on the difference between water

damage covered under a homeowners policy and damage covered by

flood insurance. The Institute reported 40% of homeowners think that

standard homeowners insurance covers flood damage caused by heavy rain,

which it does not. "Hurricane Harvey has, once again, shown that tropical

systems are often major rain events, rather than wind-related. This brings

strong motivation for everyone to consider flood insurance, even if their lender

does not require it," said Loretta Worters, VP of Media Relations with the I.I.I.

According to the I.I.I.'s Consumer Insurance Survey, only 12% of homeowners

have flood insurance nationally, the lowest number since 2010 and down from

14% in 2015. Standard homeowners policies will cover wind damage from

hurricanes. Flood coverage, however, is excluded and is available in the form

of a separate policy from the federal government's National Flood Insurance

Program (NFIP) and a few private insurers. Replacement cost coverage is

available for the structure of a home but only actual cash value coverage is

available for possessions. Excess flood insurance is available from private

insurers in certain instances....���� Source: Builder