If you have a HELOC (Home Equity Line Of Credit) you may have received a notice that your line has been temporarily frozen or withdrawn. If you haven’t received this letter it is possible that you will. Like many people (myself included) you probably didn’t read the twelve pages of fine print in the loan documents that stated that the bank can freeze your line of credit basically at their discretion. Many banks are exercising this option because the vast majority of defaults just happen to be with people who have a HELOC, so these intuitions are rightly trying to stem the rising tide of defaults and unfortunately some good people get hurt in the process. Also some areas of the country are experiencing value reductions (Southern California, Southern Nevada, Arizona & Florida to name a few) so the high LTV (Loan to Value) HELOCS are also suspect. These lenders know that the lower the amount of equity a person has the greater the likelihood is of a foreclosure. I know of many people who use their HELOC like a bank account. They get paid with bonuses and commissions and pay down their line then draw off it if they have laps in income. This method is obviously no longer advisable. I recommend keeping sufficient reserves in cash and paying down your HELOC as you can. I do expect this situation to resolve itself later in the year and for the lines to be reactivated but if you must have an active line give me a call as there are banks who are actively pursuing this business. Also refinancing your line into a fixed 2nd or combing the 1st and 2nd into one loan may also be a possibility.
If you have a HELOC (Home Equity Line Of Credit) you may have received a notice that your line has been temporarily frozen or withdrawn. If you haven’t received this letter it is possible that you will. Like many people (myself included) you probably didn’t read the twelve pages of fine print in the loan documents that stated that the bank can freeze your line of credit basically at their discretion. Many banks are exercising this option because the vast majority of defaults just happen to be with people who have a HELOC, so these intuitions are rightly trying to stem the rising tide of defaults and unfortunately some good people get hurt in the process. Also some areas of the country are experiencing value reductions (Southern California, Southern Nevada, Arizona & Florida to name a few) so the high LTV (Loan to Value) HELOCS are also suspect. These lenders know that the lower the amount of equity a person has the greater the likelihood is of a foreclosure.
I know of many people who use their HELOC like a bank account. They get paid with bonuses and commissions and pay down their line then draw off it if they have laps in income. This method is obviously no longer advisable. I recommend keeping sufficient reserves in cash and paying down your HELOC as you can. I do expect this situation to resolve itself later in the year and for the lines to be reactivated but if you must have an active line give me a call as there are banks who are actively pursuing this business. Also refinancing your line into a fixed 2nd or combing the 1st and 2nd into one loan may also be a possibility.
People talk about the value of their home they will readily tell you how much they paid for it and how much money they have made on it. They talk about their mortgage and what their interest rate is. What people often overlook is the real reason they purchased a home and it’s what I call the “emotional value”. Meaning this is the place they call home. The American Heritage Dictionary defines home as: An environment offering security and happiness. I like this definition as your home really is an environment. An environment that you are in control of. An environment that offers security and safety. An environment where happiness can be found. When you talk or think about your home – think of the life you will lead there. The lessons you will teach your kids, the laughter you will have with your friends, the memories you will make with your loved ones. These assets are the most valuable, irreplaceable and uninsurable items that you will ever own. These are assets that anyone can have, money doesn’t matter, age doesn’t matter, status, race and religion don’t matter. All that matters is that you create an environment offering security and happiness. We all have the power to create this environment. It starts with our own attitude.
People talk about the value of their home they will readily tell you how much they paid for it and how much money they have made on it. They talk about their mortgage and what their interest rate is. What people often overlook is the real reason they purchased a home and it’s what I call the “emotional value”. Meaning this is the place they call home.
The American Heritage Dictionary defines home as: An environment offering security and happiness.
I like this definition as your home really is an environment.
When you talk or think about your home – think of the life you will lead there. The lessons you will teach your kids, the laughter you will have with your friends, the memories you will make with your loved ones. These assets are the most valuable, irreplaceable and uninsurable items that you will ever own. These are assets that anyone can have, money doesn’t matter, age doesn’t matter, status, race and religion don’t matter. All that matters is that you create an environment offering security and happiness. We all have the power to create this environment. It starts with our own attitude.
A client asked me this question today and here was my answer. Basically it comes down to the type of tenant. A tenant leasing a single family home is typically more stable (key word "family") where an apartment tenant is more transitional. So - on a tenant by tenant basis the single family tenant is more stable BUT if you have one vacancy you are 100% vacant vs. a duplex you are only 50% vacant. Our single family home tenants typically stay for 16 months where our average apartment tenant stays for about 10 months. Turn over is a much bigger factor on apartments vs. single family homes and turn over is a large uncategorized expense.
A client asked me this question today and here was my answer.
Basically it comes down to the type of tenant. A tenant leasing a single family home is typically more stable (key word "family") where an apartment tenant is more transitional. So - on a tenant by tenant basis the single family tenant is more stable BUT if you have one vacancy you are 100% vacant vs. a duplex you are only 50% vacant. Our single family home tenants typically stay for 16 months where our average apartment tenant stays for about 10 months. Turn over is a much bigger factor on apartments vs. single family homes and turn over is a large uncategorized expense.
The average days on market for sold homes is running at 74 days in Jan, just slighter higher than the same month last year. The really good news is that January typically has the highest market time of any month of the year. Given our recent spike in activity we will no doubt see a decrease in market time in Feb and March. Average Days On Market - Ada County Idaho
I hear this all the time “I want to buy a foreclosure”. What I have found after further questioning is that what people are really saying is that they want a good deal and the home that fit their needs. The latter part of that “home that fits their needs” is really the most important when it comes down to it. What clients come to realize really fast is that the foreclosure properties are in generally very poor condition (missing appliances, broken windows and landscaping that hasn’t been maintained for months). The better overall values are those homes that have been well maintained and the seller is genuinely motivated to sell. Maybe they have purchased another home in the area or they are waiting to join the rest of the family who has relocated to another state. In any event they are motivated to sell, the home is in a great location and it is well maintained. View the tour for the .41 acre home or the tour for the reduced $35,000.