Adjustable-rate mortgages conjure images of folks with horrible credit buying homes they can’t really afford, then defaulting on those loans when interest rates climb.

Thanks to the mortgage crisis, we’re all more aware of the risk of ARMs. Those fears, coupled with low interest rates, have kept a lid on ARM demand.

About 6% of borrowers in the current market are opting for ARMs, compared with 20% back in 2007, according to data from Freddie Mac.

But as fixed interest rates rise, the lower rates offered by adjustable-rate home loans grow more tempting.

There are a lot of ARMs out there to choose from, and they’re all named for how long you get to keep the starting interest rate and how often the rate rises after that. For example, a 10/1 ARM adjusts after 10 years and then again every year after that.

What are ARM borrowers getting?

If you have excellent credit (a score of 740+), a 20% downpayment (or 20% home equity), and want a $200,000 loan, what kind of ARM deals are out there? Bankrate.com said your choices last week were a:

• 30-year fixed rate mortgage at 4.4% for a monthly payment of $1,001.52

• 10/1 ARM at 3.52% for a monthly payment of $900.32

• 5/1 ARM at 2.90% for a monthly payment of $832.46

• 3/1 ARM at 2.77% for a monthly payment of $818.60

By opting for the cheapest ARM, the 3/1, you’d save $6,298.80 in the first four years of the loan (compared with the fixed rate loan) and you’d come out ahead if you sold the house or refinanced within seven years and four months, even if the ARM rose to its maximum possible rate, according to Bankrate.com’s ARM vs. fixed-rate loan calculator.

Is an ARM right for you?

Despite their bad reputation, ARMs can be the right loan if you know your income is going to change in the future for reasons like these:

• A spouse will finish school and enter the workforce.

• Kids are starting school and a spouse is going back to work.

• You have a job with regularly scheduled raises based on how long you’ve been on the job.

In those situations, you can get the 3/1 ARM and feel pretty sure you can handle the higher loan payments in three years because you know your family income will rise.

Just be absolutely certain you know how much that ARM payment can go up annually and over the life of the loan. Also, be cautious about interest-only ARMs, because their payments can increase wildly when you start paying back principal, too, compared with a fixed-rate or an ARM that repays the principal from the start of the loan.

There are other times when an ARM makes sense:

• You’re planning to move before the ARM adjusts. Maybe you’re retiring or moving somewhere with lower property taxes once your last kid graduates.

• You want to use principal prepayments to lower your monthly payment. When you send extra payments in for a fixed-rate mortgage, they reduce what you owe and shorten the length of your mortgage, but your monthly payment doesn’t shrink. However, prepaying on an ARM will lower your monthly payment because ARM payments are re-calculated every year. If interest rates stay the same (or fall) and you’ve paid off some principal, your monthly payment will fall.

ARM risk and stress

There’s one category of home owner that really should avoid ARMs no matter how low the rates go: People who can’t sleep at night when they take on financial risk. When you choose an ARM over a fixed-rate mortgage, you’re agreeing to accept lower monthly payments now in exchange for the risk that your monthly payment could rise in the future.

If making that bet is going to leave you miserable and stressed out, go for the more expensive fixed-rate loan. If you’re not wired for risk, the money you save won’t be worth the additional heartburn you’ll give yourself worrying about future payments.

Would you take out an ARM to get the lower interest rate for your St. Johns County Home?

If you would like more tips on Adjustable Rate Mortgages in St. Johns County, give me a call today at 904.347.5447 or email me at Sevans@davidsonrealtyinc.com.

In its U.S. Economic and Housing Market Outlook for July, the Federal Home Loan Mortgage Corp. said housing likely will follow the performance of the overall economy for the rest of 2011. Additionally, home sales are projected to be above last year’s numbers by 3- to 5 percent.

The report also indicated that despite record levels of homebuyer affordability and historically low mortgage rates, households were concerned about their financial futures and were holding off making major purchases, notably homes.

The rental housing market showed the clearest signs of a turnaround with the apartment property price index showing a 15.2 percent gain over the year through the first quarter of 2011.

“Following June’s labor market report, households are naturally concerned about their financial futures, which is being reflected in the housing market,” said Frank Nothaft, Freddie Mac’s vice president and chief economist. “Yet, the single-family market will likely improve over the balance of 2011, in keeping with positive [gross domestic product] forecasts for the United States.”

Copyright © 2011 United Press International Inc.

3 bedrooms / 2 baths/ 2,225 square feet / MOVE IN READY

Grovewood Home Tour

Are you ready for your personal tour of this home? Call Suzy Evans at 904.347.5447 or email me at sevans@davidsonrealtyinc.com for more information on this home or other World Golf Village Real Estate.

During a slow market, buyers have the biggest advantages of all. That’s why now is a great time to buy a World Golf Village homes. You can haggle without feeling guilty because you have the upper hand. Then, as the market bounces back, you get the extra bonus of rising prices making your home worth more than it was when you bought it.
Even in this buyers’ market, you need to be a strong buyer. Otherwise, you could crumble when faced with negotiating prices or needed repairs.

Three ways to be a strong buyer of World Golf Village homes:

• Walk in to any home for sale with a set idea of the value of property in the area. This means taking a little time to do your homework.  When you know the prices of the area, you can’t be run over by a forceful seller who is determined to convince you his price is firm.  This knowledge also helps you deal with sellers who are emotionally attached to their homes and can’t price them according to true market value.

• Walk into a home for sale with an experienced REALTOR®. When you have a professional REALTOR® by your side, you are not alone. You do not have to be self-conscious or even be the ‘strong one.’ Your agent will do all your negotiating for you. You will also benefit from their intimate knowledge of the area and what to look for in a World Golf Village home.

• Walk into any home for sale knowing your needs and price range. Going home shopping without a clear concept of what you want and can afford can lead to emotional decisions. That can be hazardous for your pocketbook too.

If you would like more tips on how to be a strong buyer of World Golf Village homes, give me a call today at 904.347.5447 or email me at Sevans@davidsonrealtyinc.com.

Gated Community in Heritage Landing

Located in Northwest St. Johns County you will find this immaculate waterfront home with designer touches.  Boasting 5 bedrooms and 4 bathrooms and 3400 square feet, you and your family will have plenty of room and privacy.  Large kitchen with tons of cabinets and work space will make cooking and entertaining a delight.  You will enjoy the expansive water views from the picture windows throughout home – bringing fresh light throughout this move in ready home.

Enjoy Heritage Landing Amenities including a state of the art fitness center , open air picnic pavilion with fireplace and grill, catering kitchen, bar, and a viewing terrace.  The Water Park including a 6 lane heated lap pool, a fun pool with geyser, bubble and spray works; a “fire service” like lookout tower attached to a spectacular water slide: and a wading stream,.  In addition, the water park is highlighted by a three story tall water slide.  Your family will enjoy tennis, fields for all kinds of sports including soccer, baseball, basketball and a playground.

Virtual Tour of Trout Creek at Heritage Landing World Golf Village

Are you ready for your personal tour of this home? Call Suzy Evans at 904.347.5447 or email me at sevans@davidsonrealtyinc.com for more information on this home or other World Golf Village Real Estate.

World Golf Village - Active Adult Community

MOTIVATED SELLERS – BRING OFFERS…Grand Cypress design in Active Adult Community – THE CASCADES.  This spectacular home offers long views of lake (lot premium $25,000), spacious vaulted ceilings. Upgraded tile, carpet, lighting, cabinets, crown molding throughout. Granite counters in kitchen, decorative glass front door, over sized garage, pavered driveway/outside entry/lanai. Saint Augustine’s Premier Clubhouse with top quality amenities.  Convenient  to several World Golf Village restaurants, golf courses, shopping and I95.  Will sell furnished/furniture negotiable. INCLUDES HOME WARRANTY!!  NO WAITING- MOVE IN READY (Not a Short Sale or Foreclosure – PRICED LIKE ONE!)

Gated Entrance:

Gated entry with 24-hour controlled access for privacy in World Golf Village homes.

Clubhouse:

Amenity-rich, 22,000-square-foot clubhouse

Recreation:

Full Time Activity Coordinator!  Dance floor, arts and crafts room, and card and billiards rooms available for residents to enjoy year round •

Fitness:

Outdoor activities for fitness or leisure, featuring 6 Har-Tru tennis courts. Indoor and outdoor pools,  bocce ball court and state of the art fitness center

Cascades Monthly Homeowners Association Fee is ONLY $265 per month and includes:

• Direct TV

• Security Alarm

• Lawn Maintenance

• Lawn Irrigation

• Private Clubhouse

CLICK PICTURE FOR VIRTUAL TOUR

Call Suzy Evans, Davidson Realty, For Additional Information on This AMAZING Deal At The Cascades At World Golf Village In St. Augustine, Florida  904-347-5447

Foreclosure vs. short sale: pros and cons PALM BEACH, Fla. – July 28, 2010 – With today’s reduced property values and increased unemployment, it’s tempting for some homeowners to just throw their hands up in defeat, allow the bank to take their home in foreclosure and rid themselves of the monthly mortgage burden.

Even suffering through the paperwork and stress of a short sale may seem too much for an overwhelmed borrower to handle.

But Florida homeowners should be aware of unique rules in the state that make the benefits of a short sale typically outweigh the ease of walking away in a foreclosure.

“I want to be very clear on this, short sales are a better solution than a foreclosure, even when all the options in a situation where you lose your house are not great,” said Mark Greene, owner and president of Short Sale Operations LLC in North Palm Beach.

The biggest difference between Florida and many other states when it comes to losing a home is the deficiency judgment.

While some states ban lenders from collecting the remainder owed on a loan after a foreclosure or short sale is completed, Florida law allows banks to go after borrowers for up to 20 years. That can lead to a garnishment of wages long after the home is gone.

In a short sale, where the bank agrees to take a lesser amount for the home than what is owed on a loan, lenders sometimes are willing to write off the deficiency on the front end.

Greene said in 90 percent of the cases he handles, the bank has waived its right to seek a deficiency.

That was the case with Jupiter resident Kathryn Lorello, who in 2008 found herself in a home she couldn’t afford.

Following a divorce, and with three children, Lorello bought a $408,000 home that she lived in comfortably for a year. But then she lost her job as a manager of a real estate company.

She remembers the day the bank served the notice of foreclosure.

“I cried my eyes out,” Lorello said. “That’s when I panicked because I really didn’t want it to happen.”

Lorello got advice from Greene on doing a short sale.

Her bank, Wells Fargo, waived its right to seek a deficiency even though it ended up taking $200,000 less than what was owed on the loan.

Also, if a bank refuses to waive the deficiency in a short sale, it still would have to go back to court to seek a judgment.

In a foreclosure, at the end of the proceeding, a deficiency judgment is automatically awarded by the courts and the bank is free to seek a claim.

“In the past, people just wanted to move from the property and get on with their lives and didn’t understand what the lenders’ rights were in terms of pursuing a deficiency claim,” said Paul Baltrun, director of loss mitigation at the LaBovick & La-Bovick law firm.

“I think people are more aware now about what can happen after the fact and that their nightmare can continue.”

Another consideration is the effect of a foreclosure or short sale on credit.

According to the Fair Isaac Corp., which developed the widely used measurement of credit risk called a FICO score, the negative effect of a foreclosure is only marginally worse than a short sale.

But in Florida, a deficiency judgment from a foreclosure is likely to have a much larger impact that will prohibit your ability to buy another home for many years.

Daniel Poulos, a mortgage broker with Elite Lending in North Palm Beach who has studied the effect of foreclosures and short sales on credit, said unless a borrower pays off the deficiency, it may be 20 years before someone is eligible for another mortgage.

“That’s the kind of information that’s not getting out in Florida,” Poulos said.

There are a few situations where some experts believe it is better for someone to go to foreclosure rather than do a short sale.

To do a short sale, a borrower must give all of his or her financial information to the bank before it will decide whether to allow the short sale. The idea is that if a person can afford to pay the mortgage, the short sale may be denied.

“Now the lender knows everything about your finances and they can better decide whether they will go after you or not,” said Jon Maddux, CEO of  YouWalkAway.com, a company that advises people on strategic defaults.

If a lender doesn’t know your finances, Maddux argues, it reduces the chances it will go after you following a foreclosure.

“You might fly under the radar,” he said. “With the millions of people going through this, they are probably going to go after the low-hanging fruit.”

Copyright © 2010, The Palm Beach Post, Fla., Kimberly Miller. Distributed by McClatchy-Tribune Information Services.

If you are a St. Johns or Duval County Homeowner

Call Suzy Evans at 904-347.5447 to discuss your options to Foreclosure!

“The Induction Ceremony continues to be an incredibly important event for golf each year as we take the opportunity to recognize the sport’s greatest achievers,” said Tim Finchem, PGA TOUR commissioner and World Golf Foundation board member. “Moving the Ceremony to the spring will heighten the event’s exposure in a variety of ways and will add a new level of excitement to THE PLAYERS for fans, media, sponsors and past and current players.”

“Staging the annual Induction Ceremony in the heart of the golf season, just before one of golf’s most thrilling events, is a great opportunity for the Hall of Fame,” said its COO Jack Peter. “The spring date is sure to give fans around the world an even better opportunity to witness the celebration.”

Class of 2011 PGA TOUR and International ballots have been mailed to the respective voting bodies and the voting results will be announced later in 2010.

Further details on the Induction Ceremony will be released this fall. To learn more about the World Golf Hall of Fame, visit www.WorldGolfHallofFame.org.

About World Golf Hall of Fame

The World Golf Hall of Fame honors the history of golf by recognizing and preserving the legacies of the game’s greatest players and contributors. The Hall of Fame and Museum, located at World Golf Village in St. Augustine, Fla., serves as a steward of the game through engaging, interactive storytelling and exhibitions featuring artifacts, works of art, audio, video and photography significant to the history of golf and its members.

The Hall of Fame is a 501(c)3 nonprofit institution and is allied with 26 national and international golf organizations, including The European Tour, LPGA, the Masters Tournament, PGA of America, PGA TOUR, The R&A and USGA. To learn more about the Hall of Fame or to lend support, visit www.WorldGolfHallofFame.org.

I say that this is great news and will spark greater interest and excitement this coming TPC!  I can’t wait!

As a buyer, you naturally want to take advantage of every tool and service available to make it easier to find the home of your dreams. However, the Internet, which is one of the most common places for people to shop for World Golf Village real estate nowadays, has also become a place where the unscrupulous hang out.  You can’t believe everything you read online, even when it comes to shopping for homes online.

If you’re trying to find a home, here are two things you need to be aware of:

Home Valuation Sites
Many potential buyers find an interesting home and then research the home value. This is commendable and just plain good sense. You want to make sure you’re not overpaying. Thanks to the Internet, we have sites like Zillow and Realtor.com that provide home valuations.

The problem is that these sites hardly ever agree on the home value. They can differ as much as 20% or more. While home valuation sites are an excellent place to get a ballpark estimate, you shouldn’t base your buying price on their information alone. Hire a reputable World Golf Village real estate agent who knows the surrounding area and recent sale prices.

Dream Home or Nightmare
One of the best things to happen for real estate agents and sellers alike is the ability to post digital photos and walk-through videos of the homes they’re selling. This is also great for you, as the buyer, because you can view the homes without going anywhere.

Unfortunately, many buyers take those images and videos at face value. Thanks to some high-tech graphics programs, however, you can’t guarantee that what you see is what you get. Videos and images can both be manipulated to show you the best face of any piece of property.

Any time you see a home online that you’re interested in, it’s a good idea to check Google Maps and use the Street View option. At the very least, you can usually see the front and sides of the home. If you’re still interested, visit the home in person, or, if that’s not possible for some reason, ask your World Golf Village real estate agent to visit the home and take pictures for you.

If you’re trying to find your dream home, I can help. Click here for a FREE MARKET SNAPSHOT Call me at 904.347.5447 or email me at Sevans@davidsonrealtyinc.com for more information.