Janice Petteway

Even in Orlando, where there are plenty of pre-owned homes and condos available, newly constructed homes have their appeal. That's why Orlando builders have continued to produce new homes. According to Metrostudy, which keeps track of new home in various markets, new home construction i s up14% as of June, compared to last year. Housing starts are up 39% from the first quarter, though second quarter closings are off since the home buyer's tax credit expired.

AmericanHomeguides.com shows over 100 new developments in the greater Orlando area. Many offer properties of $150,000 or less. This makes new home prices competitive with those of pre-owned homes in Orlando, which currently have a median sales price of $179,138. (Foreclosures and short sales are even less.) The base price might not include any upgrades, but a buyer could purchase some upgrades with the difference and have a brand new home.

According to the Orlando Board of Realtors, the area has an affordability index of 243.74. Since an index of 100 means that buyers have the income necessary to buy a median price home, buyers whose income exceeds $53,162 are qualified to buy one of the 9,812 homes in Orange or Seminole county priced at $267,866 or less. First buyers with incomes of $36,150 or more can qualify for one of the 6,837 homes prices at $161,910 or less. There are new home opportunities in the Orlando area for first timers as well as for repeat buyers.

Even though buyers technically have the wherewithal to buy homes. Anthon Crocco, director of Central Florida Metrostudy says they are hesitate to buy because they want to see sustained recovery and job growth before taking the plunge to homeownership.

There is another unspoken impediment to homeownership at any price. Banks have higher credit score requirements to make loans so many Floridians are out of luck. Regardless of income, those with credit scores below 700 or with recent foreclosures or delinquencies on their records are unlikely to qualify for home loans. With unemployment over 11.7% in the Orlando-Kissimmee-Sanford area, even working Floridians are cautious.

The lack of demand leaves an inventory 3,757 new homes unsold. This figure represents a nine month supply, two or three months more that is considered healthy. Almost 70% of the inventory is finished-but-vacant units, when 25-30% is healthy.

Florida has always been a land of opportunity. If you interested in taking advantage of the abundance of new construction at a time when interest rates are low, now is the time to find out your credit score and evaluate whether there is short term fix available to improve your credit score. Some problems, such as having a foreclosure on your record, take a several years of ontime payments to overcome. Most so-called credit repair companies won't help you, but you might check with your lender or local credit counseling center for a review.

Think you're ready to buy new construction or a pre-owned home? I'm Janice Petteway and I believe that buying Florida real estate is a great way to live out the American Dream for you and your family. If you are prepared to take on homeownership, affordability , and interest rates on your side. My Exit Results Real Estate team can help you find the affordable home of your dreams in the Orlando and other Central Florida cities. Call me today or visit my website.

When housing values are down and employment is a bit shaky, Orlando homeowners often stay put rather than sell. They tend to remodel rather than relocate, especially if they like their home and if their house only requires some renovations to make it what they want.

In Central Florida, where they are more scams than oranges, even remodeling is risky business. They area is overrun with contractors who do just that - run, after taking the homeowner's deposit. Greg Dawson of the Orlando Sentinel colorfully describes the remodeling landscape: "The Atlantic Ocean may be next door, but in terms of consumer protection, Central Florida is the Wild West, a lawless frontier where black-hatted con men rip off homesteaders and laugh in the face of feckless sheriffs who don't even care enough to form a posse."

This is a special concern at a time when many homeowners need to replace faulty Chinese drywall, or buy foreclosed property. Especially at risk are older homeowners, or those in rush, especially after a disaster. The contractor can make a good case that the deposit shows good faith - and allows him to buy supplies. Unfortunately, what often happens is that the contractor often disappears or does a shoddy or incomplete job. The State of Florida technically has laws on the book to protect homeowners, enacted after Hurricane Andrew provided a field day for contractor scams, but the laws have few teeth and are seldom enforced.

Dawson advocates using contractors who require nothing down, and in fact, provides a list in his article cited above. But, there are other things a savvy homeowner can do to protect himself against fraud.

• Use a contractor you know. If you don't know anybody, ask for references. When you ask for references, don't just ask "did he do a good job" or "did he finish the job.? Also ask, did he come on time? Did he come consistently? Did he communicate with you? Did he leave a mess for you to clean up? People often gloss over the details if the project was done basically ok, so make sure to probe.
• Beware of contractors who claim to be in the neighborhood, have supplies left over from another job, offer discounts if you buy today, etc. These are common scam tactics.
• You might even consider using contractors offered through Sears, Lowe's, Home Depot, or some other large company. You might pay more but the work will be guaranteed by the big boys.
• If you use a contractor from Angie's List or some pre-screened list, still be careful! Just because the person is on the list does not guarantee he is trustworthy.
• Having said that, check if the person has a telephone listing and physical address. Fly-by-night contractors often advertise on flyers and have no permanent listing anyway. Also, check the Better Business Bureau for comments.
• Aside from references, go with your gut. If the person doesn't seem trustworthy or you wouldn't want the person in your home, cut him loose before you get involved. If the person is your girlfriend's drunken uncle, keep looking.
• Make sure that the person is licensed and bonded to spare yourself damages if someone falls off a ladder or tries to perpetrate a false injury scam on you. Also, make sure that the person is licensed, if necessary, so that work performed is up to local codes.
• Make sure you have a contract. With a contract, you can at least go to court and sue for damages if things don't work out.
• If the contractor insists on a down payment, make sure you check him out as noted above before you write the check Note the words "Write the check " (or put it on a credit card.) Don't pay in cash. Give as little money up front as possible and check each stop of the work before advancing more. If you are not in a position to do this yourself, try to find someone who can be available for you.

Remodeling scams may be more plentiful than oranges, but protect yourself. Handymanamerican.com offers more tips to protect you upfront. There are plenty of groups to report a bad job to after the fact, but when you have a remodeling project, you want the job to be trouble free. When it's done, you don't want to have to take the contractor to court or have to repair the repairs. Your best bet is to exercise due diligence when selecting a contractor.

I'm Janice Petteway and I believe that buying Florida real estate is a great way to live out the American Dream for you and your family. My Exit Results Real Estate team can help you find the affordable home of your dreams in the Orlando and other Central Florida cities.

If you are a potential Orlando home buyer, you may live near Disney World, but when you are considering buying a house, do not let your thinking drift to Fantasyland. Taking this step is a big one for anyone, but for given the recent depressing history of the Florida housing market, buyers are smart to consider the statistics. In addition, while interest rates are low, getting credit is harder than in the past.

Buying a home is seldom a mere economic step for many people who see it as nest for a new family, a sign of stability, or a source of pride. When interest rates are historically low and median home prices continue to fall, people who should wait a year or two are househunting and applying for mortgages. As exciting as it is to capture a dream ahead of schedule, acting too soon can have dire consequences. Fantasyland disappears when the mortgage is due!

At the moment, Orlando housing market is in crisis due to past circumstances which you, as a potential buyer, do not see as having anything to do with you. Foreclosurs are till rising. The falling home values that have lead to the attractive median price of $138,700 has decimated loan-to-home value rations so badly that 85% of homeowners are underwater by 140-150%. Delinquency rates among some type of mortgage loans exceed 50%. Double digit unemployment could lead to further delinquency. The recent devastating oil spill threatens the Florida economy, especially tourism and fishing, and could spill into more mortgage woes.

Given this history, lenders are much more careful than in the past. All across the country, buyers need more cash, more income, and higher credit scores to qualify. According to Paul McFadden, a loan officer with The Legacy Group in Bellevue, WA, only about 30% of loans are approved these days, as compared to 90% around 2006 or 40-50% in "normal" times.

Though technically, a credit score of 620 is good enough to qualify for a loan, borrowers with score less than 740 get higher mortgage rates. Buyers who are paid by 1099 (salespeople, small business owners, non-US citizens, contractors of all kinds) may not qualify for most loans. Lenders have to verify information on the credit application more closely than in the past, and may have to repeat the process several times before closing to make sure the buyer is creditworthy. This sets up a scenario where loans for would-be buyers can be pulled up until the last minute.

In the past, some lenders have helped buyers secure loans they really could not afford. Sometimes this worked out okay if the borrower "nearly qualified" or if a second job or careful budgeting could fill a small gap. Statistically, this did not pan out so well, as both the foreclosure numbers and the mortgage fraud numbers attest. (Florida has a sad history of mortgage fraud.) Today, it is quit unlikely that a mortgage lender will overlook blemishes on your credit record or allow you to borrow just a little more than you technically qualify for.

So, does all this mean you should put off home ownership? The answer? Yes, no, or maybe. If you have a stable job, sufficient income, a healthy downpayment, and a great credit score , why not buy now to take advantage of pircing and interest rates? However, if any of these elements do not stack up right for you, waiting may be in your best interest. You may desperately want to buy a house, or you might be smitten by one you have seen, but Orlando real estate will still be available when you are ready next year or the year after.

Some soul searching, a look at your credit report, a loan-shopping trip, and a chat with your agent should help you figure out if this is your time to buy or just a trip to Fantasyland. I'm Janice Petteway and I believe that buying Florida real estate is a great way to live out the American Dream for you and your family. My Exit Results Real Estate team can help you find the affordable home of your dreams in the Orlando and other Central Florida cities.

The majority of mortgage holders in American can and do pay their note each month. As foreclosures have increased among those who unable to pay, a new class of people who can pay but choose not to, is also increasing in Orlando and everywhere. These strategic defaulters justify abandoning their mortgage because their housing values have shrunk. With no housing inflation in sight, they see default as the best business choice. Knowing that they will take a credit score hit, they may plan for their new life and just stop paying. Some people think this amoral, while banks discourage it. Up to now, the benefits outweighed the consequences.

Fannie Mae has had enough. Fed up with strategic defaulters who bail and buy a new home within 1-3 years, the government-sponsored agency that that backs mortgages recently announced a new policy that will prohibit those suspected of intentional default from obtaining Fannie Mae loans for seven years. Effective July 1, Fannie Mae may also start coming after the balance.

According to the new policy "Defaulting borrowers who walk away and had the capacity to pay or did not complete workout alterative in good faith will be ineligible for a new Fannie Mae-backed mortgage loan for a period of seven years from the date of foreclosure. Fannie Mae will also take legal action to recoup the outstanding mortgage debt from borrowers who strategically default on their loans in jurisdictions that allow for deficiency judgments." FHA policies are likely to follow.

On the surface, the new policy seems fair. After all, housing is a long term investment, not an ATM. For a few years prior to 2006, escalating prices turned the focus away from what was always true: buying a home was mainly to provide shelter and security for your family. Those who gambled and lost shouldn't be rewarded for abandoning their investment.

On the other hand, some who can technically afford their house payments might be penalized. A recent story in the Washington Independent cited the case of a family who could easily pay their $1,100 house payment until the wife lost her $60,000 a year job over two years ago. The family got loan modification under Making Homes Affordable but the payment is still 56% of the family income and allows for few other necessities. The family cannot continue to pay this kind of mortgage and anticipates losing the house. Technically, a family like this could be considered "strategic defaulters" even though they do not fit all aspects of the profile.

A study by Experian and consultant Oliver Wyman found that 588,000 families defaulted in 2008, especially in hard hit states like Florida and Nevada. They went from perfect credit records where payments were up to date to suddenly not paying their mortgage; this pattern prevailed in many of 850,000 homes foreclosed on that year. A more recent Federal Reserve study showed that only the deeply underwater walked away, and this was usually after an "income shock." Yet the stereotype prevails that families just stop paying the mortgage and head for Disney World.

Fannie Mae is sending a message with its new policy that being underwater is not enough to let people off the hook with their mortgage. How they differentiate between those who just can't pay and those who can but won't will generate plenty of discussion in the days ahead.

Can't pay? A short sale might be your answer. I'm Janice Petteway and I can help you. Or, if you are prepared to take on homeownership, affordabilityand interest rates on your side. My Exit Results Real Estate team can help you find the affordable home of your dreams in the Orlando and other Central Florida cities.

If you didn't buy an Orlando home before the tax credit expired, you may be thinking, "What's the rush now? If I just wait another year, I will have so much more saved." In theory, this might be true, although most people find it's hard to meet savings goals; the car transmission might die or unforeseen expenses might arise. If your income isn't stable, you should wait but aside from this possibility, is waiting a sound strategy?

Otherwise, there are many reasons that the answer is a resounding "NO!" Why is this? Florida and national statistics tell the story.

Housing prices: Florida Realtors (formerly the Florida Association of Realtors) reports that median home prices fell only 4% from last April to April 2010. Condo's only fell 2.7% from last April. The Homebuyer's Tax Credit might have kept housing prices up because in certain price brackets, there was competition for homes. If this stability holds, buyers may not be able to count on much lower prices next year.

Interest rates: Mortgage rates were expected to rise once the Federal Government stopped buying mortgage based securities in March, 2010. This is likely to happen over the next year, but now rates for the 30 yet fixed conforming mortgage in the Orlando area average 4.635% A interest rate increase of 2% could up your mortgage payment by hundreds of dollars a month.

Mortgage vs. rent trade off: Homeownership has many non-economic benefits, such as feeling the pride of ownership, a stable home for the family, maybe more space or more yard. The traditional financial argument for buying a home vs. renting for another year has always been that when you weighed the mortgage deduction and increasing equity against the cost of paying rent, buying makes sense. These days many condos are available for less even than homes; the median condo price in Orlando is $52,300, as compared to a median price for a single family home of $135,900.

Apartmentrattings.com shows that the average rate on a one bedroom apartment is $730, while a two bedroom is around $842. Given current mortgage rates, a $150K home would have a payment of about $840, a $200 K, $1,090, and $300 K, $1,690 assuming a conventional loan with 5% down. The payment would be less if you went FHA. On the face of it, you might still come out ahead by buying. If you buy now rather than waiting, your money will go toward something you own.

Other factors: Of course, a few other things factor into whether you should buy now. Are finding a home you really like? If you see nothing near your price range, you need to wait. Especially given recent history, you do to want to stretch too much outside your comfort zone. Is the home one that you could resell if you needed to?

Even if you planned on to waiting till you have a bigger downpayment, you can buy now and pay down your mortgage. If everything checks out, you have an opportunity to buy at a great price with reasonable interest. I'm Janice Petteway and I believe that buying Florida real estate is a great way to live out the American Dream for you and your family. If you are prepared to take on homeownership, affordability , and interest rates on your side. My Exit Results Real Estate team can help you find the affordable home of your dreams in the Orlando and other Central Florida cities.