Guide to Buying and Selling in the Winter

There are many pros and cons to buying (or selling) a home during the winter season. Although the winter is generally known as a "slow season" for home buying and selling, it can have many benefits on both sides.





Here are CF Funding's list of Pros and Cons for Buying and Selling during the Winter season: 

Buying Pro's

Reduced Competition means less pressure, lower prices, and less likelihood of a bidding war.
Realtors may have more time during "slow season," are more available and responsive to your needs
Sellers may have less showings during winter months, therefore they may be quicker to respond.
Tax Benefits may be available for those who close by December 31, such as mortgage interest and property taxes.
Home shopping in winter allows you to see how well the house is built for winter weather (heating system, hot water, drafts, etc.)

Buying Cons

Limited inventory means you have less houses to choose from.
You may have difficulty seeing all features of the home's exterior due to weather (snow-covered defects may be hidden) leading to an unpleasant surprise.
You may feel a lot of pressure trying to balance holiday shopping / events with home shopping and mortgage tasks. Completing your holiday shopping early can help relieve this pressure !

Selling Pro's

Less competition from other sellers
Winter buyers tend to be more motivated, with a pressing need to move quickly.
Adorning your home with Christmas decorations is an easy way to make it look warm and welcoming!
According to a Redfin survey analyzing homes listed from March 2011 - March 2013, homes listed in winter had a 9% better chance of selling and sold about a week faster. They also sold for 1.2 percent higher price than those listed in other seasons! Read more on Redfin.com

Selling Cons

Showings may interrupt holiday events and activities.
Many home shoppers avoid looking during the winter, as they want more inventory, and may want to avoid moving in the cold and snow.


If you are looking to buy or sell this season, be sure to contact CF Funding for your mortgage needs. We can refer you to a great Realtor to help you get started, and we offer free preapprovals ! Give us a call at 630-328-8900 today, or visit our website at www.cffunding.com .

Tax Breaks for Mortgage Insurance

In an article posted Tuesday, CNN shared a list of "temporary" tax breaks that have been extended into 2014, including breaks for teachers, commuters, and parents of college students. CF Funding is happy to share two great tax breaks for homeowners, including deductions for mortgage insurance premiums:

1. For those who may have purchased a home with a small down payment, and therefore were
required to pay mortgage insurance, this break would allow you to deduct the cost of your premiums (if you itemize your deductions).

2. For those who have foreclosed on a home, or sold their home for less than what is owed, this tax break allows you to exclude that remaining debt from your income. Normally, the IRS would count the remaining debt as taxable income.

Another great tax break worth noting is that "commuters may reduce their pre-tax income to account for their commuting costs... those who drive to work and pay for parking are allowed to exclude more (250 per month) than those who use mass transit (130 per month)."

According to CNN, the bill has been sent to President Obama and is awaiting signature.

CF Funding Launches "Graduate Advantage" Program to Benefit College Students, Recent Grads

CF Funding has launched a new loan program this month, which is aimed to benefit college students and recent graduates. The program allows those with large amounts of student debt (and lower income) to add a non-occupant co-borrower, in other words-- a "cosigner," to help create a better debt-to-income ratio. This blended ratio can help students & recent grads to qualify for lower interest rates, and mortgage loan terms that they might not otherwise qualify for.

Other benefits of this program include future income qualifications, for a student or grad who may be expecting to start a job or get a raise within 60 days. Depending on the buyer's income and credit qualifications, down payments as low as 3.5% may be required. CF Funding offers free credit counseling for those who need a score increase to qualify.

Graduate Advantage is available for any Freddie Mac purchase, rate and term, or cash out refinance.
Contact a CF Funding loan specialist today to learn more at 630-328-8900 or visit www.cffunding.com.

Company NMLS #202670, Illinois License MB .0005978

Take 2 Tylenol, Reduce the Asking Price?

Yesterday, Wall Street Journal published an article titled "Can Tylenol Ease the Pain of a Home Sale?" in response to a study at the Univeristy of Kentucky. The study "Can Acetaminophen Reduce the Pain of Decision Making?",  based on the principle that physical and emotional pain can overlap, has now been connected to the real estate industry. Psychologists, journalists, and real estate professionals are asking the question, could painkillers cause homeowners to reduce their asking price? 

According to www.scientificdirect.com, "experiments showed that acetaminophen reduced the pain of decision-making, as indicated by lower attitude change that accompanies cognitive dissonance and lower selling prices when selling personal possessions." The study of 95 undergraduate students compared asking prices when the students were asked to sell a mug. The students were asked to study the mug for 30 seconds "to create a sense of attachment," before making an offer, according to WSJ. Students who took acetaminophen asked for about $4.15 to $5.92, while students who took a placebo asked for about $5.55 to $6.27. 

Stefanos Chen of WSJ explained that "the results illustrate 'loss aversion'... the thought of losing the mug caused pain, and the acetaminophen helped students who were attached to the mug decide to sell at a lower price." Professor Nathan DeWall of Univeristy of Kentucky stated, "It's the same principle at play when a sentimental homeowner balks at an agent's comparable sales figures and demands a higher price for his home."

It is hard to say without further research whether or not the same results would apply to an item with much higher sense of attachment - such as a home. 

What do you think?  Leave your comments below! 

Advice for Homebuyers

CF Funding was recently featured in an article by Melissa Newton of MoneyBasicsU.com, titled "5 Tips of Achieving Homeownership." Based on a one-hour workshop that our very own CF Funding loan officers presented at the Plainfield Public Library, the article provides great advice for first-time homebuyers. Check it out here: http://moneybasicsu.com/5-tips-of-achieving-homeownership/

In a recent blog post on www.nahb.org, the National Association of Homebuilders gave advice on financing your first home, and suggested that all first-time homebuyers attend an educational seminar to familiarize themselves with the homebuying process and common mortgage terminology. To sign up for CF Funding's next free class, contact mgarland@cffunding.com or visit our Facebook page at www.facebook.com/cffundingcorp for updates.

Self-employed buyers can now Qualify using bank Statements!

Contact a CF Funding Loan Specialist for more information about this great program! Call 888-344-4080 or visit www.cffunding.com today.

Loan approval is subject to credit approval and program guidelines. Not all loan programs available in all states for all loan amounts. Interest rates and program terms subject to change without notice. Residential M ortgage Licensee # Illinois M B 0005978, California 6031932, Colorado, Tennessee 11 4055, Florida M LD1082, Virginia MC-5825, Texas. Company NM LS # 202670.

CF Funding Offers IHDA Grant for First Time Homebuyers, Military Personnel

CF funding shares exciting news for first-time homebuyers and military personnel this week, as the lender is approved to provide down payment assistance through the Illinois Housing Development Authority’s Welcome Home Illinois Program. Qualified homebuyers, which may include first-time homebuyers, active military personnel, veterans, and those who have not owned a home in the past 3 years, could qualify for $7,500 or more in grants to help cover down payment costs as well as additional funds for renovation. The program also offers below-market interest rates and a variety of loan options including FHA, conventional loans, and USDA loans.

In order to qualify for this limited-time program, homebuyers must purchase a one or two-unit property within Illinois, and live in this property as a primary residence. The homebuyer must contribute one percent or $1,000 of the purchase price, whichever is greater.

CF Funding is excited to start providing the grants to homebuyers, as IHDA’s programs not only provide down payment assistance, but can also allow federal tax credits that can reduce income tax liability by up to $18,000 over the life of the loan. Tax credits may apply to the Smart Move Trio program (for first-time homebuyers), or Welcome Home Heroes program (for veterans and active military personnel).

Another program that CF Funding now offers through IHDA is Illinois Building Blocks, which “helps strengthen communities with programs that turn vacant homes into valuable homeownership opportunities.” Eligible communities in this program include Belleville, Berwyn, Blue Island, Champaign, Chicago Heights, Cicero, Crest Hill, Joliet, Lockport, Lynwood, Maywood, Melrose Park, Park Forest, Peoria, and South Holland. According to ihda.org, up to 75 homes will be available through the end of 2014. These rehabilitated homes are “professionally renovated and move-in ready. Improvements vary in each house but may include HVAC, electrical, roof, updates to bathrooms and kitchen… etc).This program is also available to non-first-time homebuyers! Down payment assistance is slightly higher in this program with up to $10,000 cash for qualified buyers.

A refinance program called Smart Move Plus is also now available through CF Funding, which allows a 30-year fixed rate mortgage with competitive interest rates, and a variety of loan options to choose from including FHA, Conventional, VA, and USDA.

To apply for an IHDA loan, homebuyers should visit the lender online at www.cffunding.com or call 888-344-4080 today.  

Remodelers' Outlook Positive, Real Estate Changes on the Horizon

CF Funding is happy to share that remodelers’ ratings of current market conditions have increased to a score of 56 in the second quarter of 2014. In the NAHB’s quarterly survey, the Remodeling Market Index (RMI) rose three points, “reclaiming the territory it had lost during what was likely a weather-related dip in the first three months of the year,” according to a blog post today by Paul Emrath. A score of 50 or higher is positive, as more than half of remodelers in the survey reported high market activity, a great indicator for future activity.

The survey measures current conditions with 3 factors: major additions/alterations, minor additions/alterations, and maintenance /repair. In Q2 2012 scores were as low as 42 in some categories, and in Q2 2014 all scores were above 53. Future market indicators such as calls for bids, amount of work committed for the next 3 months, backlog of remodeling jobs, and appointments for proposals were also all above 53. Improvement in the jobs market has impacted the RMI, as homeowners have regained equity and confidence in the housing market has increased.

In other real estate news today, Realtors may be surprised to hear that Zillow Inc. is seeking to purchase Trulia Inc., and the two rival real estate websites may combine in the near future. The two websites are used by realtors, homebuyers, and home sellers to list homes and apartments for sale or rent. The companies make money by charging realtors and homesellers a fee for advertising. In June, the sites had over 85 million visitors and acquired almost 90 percent of traffic out of the 15 most visited real estate sites. According to Bloomberg Businessweek, Zillow may pay up to 2 billion dollars to acquire its rival site, and two-thirds of the price may be paid with Zillow stock. Both companies saw a rise in stock today, with Zillow rising more than 15 percent and Trulia rising 32 percent. Trulia’s revenue is expected to increase 76 percent this year to reach 253 million dollars, and Zillow’s revenue is expected to increase about 58 percent, reaching 311 million dollars.

Rumors of the two companies merging have not been publicly confirmed by members of either company. Regardless of the outcome, CF Funding hopes to see the sites continue to support realtors, FSBOs, and homebuyers as they buy and sell properties. Realtors and other home sellers who need assistance using these online tools to list properties may contact CF Funding today by calling 630-328-8905.

Foreclosure Activity Decreases to Lowest since 2006

CF Funding is happy to share that foreclosure activity has been reported at its lowest levels since before the housing crash. In the first half of 2014 (January through June) there were 613,874 foreclosure filings, which is a 23 percent decrease from the first half of last year. As CF Funding mentioned earlier this month on their blog, the Obama administration is taking steps to continue to decrease foreclosures, and the lender expects that more improvement is to come in the next few years as the economy improves.

The Midyear 2014 U.S. Foreclosure Market Report, released this week by RealtyTrac, revealed that one in 214 homes in the U.S. reported a foreclosure in the first six months of this year (about 0.47 percent). Foreclosure activity for June totaled 107,194 properties, which is down 2 percent from May 2014 and down 16 percent from a year ago. Ten states reached their lowest levels of foreclosure activity since the housing crash in 2006, including Texas, Georgia, Colorado, Tennessee, Arizona, and Nevada. CF Funding is licensed in Texas, Florida, and Colorado, and the lender was happy to see such high foreclosure improvement in those states.

Only nine states saw an increase in foreclosure activity in the first half of 2014 in comparison to the first half of 2013. Those states include New Jersey (up 54 percent), Maryland (up 18 percent), and Iowa (up 10 percent).

It may be disheartening to see that Illinois is ranked at the country’s third highest foreclosure rate in the first half of 2014, at one in every 123 housing units. However, Illinois has a longer foreclosure filing process than many other states in the country. This means that although foreclosures are recovering in Illinois, the statistics reporting a decrease in filings may lag behind other states by a few months. CF Funding is happy to share that Illinois foreclosure activity did decrease 16 percent in comparison to the second half of 2013, and 32 percent from a year ago. The Chicago metro area also saw a 30 percent decrease in foreclosure activity in the first half of 2014 compared to a year ago.

Those who are in danger of foreclosure should contact CF Funding today to take advantage of free credit repair services with a refinance. The lender has assisted thousands of homeowners to regain positive equity in their homes. Call 888-344-4080 or visit www.cffunding.com today. 

Has the American Dream Evolved?

CF Funding has helped many families achieve the dream of homeownership over the past 14 years. As the Independence Day holiday weekend has come and gone, CF Funding  evaluates what other factors are considered to be a part of “ the American Dream.” Does the dream refer to a shiny car, a large family, or a 3-figure salary? According to James Adams, who coined the term, “The American Dream is that of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement… It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are immediately capable, and be recognized by others for what they are.”

A glance at recent economic news may indicate that the American Dream is out of reach in present day. College graduates are having trouble finding jobs and are often living at home with parents. Recovery from the recession is slower than expected in many markets.  However, a majority of Americans have achieved the American Dream, in regards to the dream of homeownership, education, and job opportunities, says the DDB of North America. The study revealed that 66 percent of US adult respondents have been able to own a home in their lifetime, 78 percent were able to obtain a good education, and 74 percent were able to find a decent job in their lifetime , yet only 40 percent described themselves as living the American Dream. The reason Many Americans remain pessimistic may be that the American Dream has evolved.

Factors such as “buying the car of one’s dreams” at 35 percent and “making a lot of money” at 25 percent were rated less easy to attain by respondents. However, factors that are less related to wealth such as “decent health and medical care,” “feeling relatively safe, “ being treated fairly,” and “having enough food to eat” rated closer to the 80-90 percent ranges. Are Americans less grateful than in previous decades, or has something else changed? According to Mosche Cohen, achieving and maintaining the American dream “have become so difficult that people are not enjoying it.” People are trying to “shoehorn themselves into this concept of the American dream, and they are losing the freedoms it’s supposed to provide… you take a step back and you say things are getting better. Are they enough? Never, because life is about growing higher and higher, but things are getting better.”

CF Funding agrees that the economy is improving, and will continue to improve in the coming years. The dream of homeownership is becoming more easy to attain, especially for first-time homebuyers and veterans who can receive up to $10,000 in down payment assistance from programs like IHDA’s Welcome Home Illinois. For more information on these programs, contact CF Funding at 888-344-4080 or www.cffunding.com.

Affordable Housing Programs Extended through December 2016

CF Funding is pleased to share that the Obama administration has announced the expansion of its affordable housing program. The program helps to support the construction of rental housing, and provides assistance to underwater homeowners in order to avoid foreclosures. The administration will be tapping into Treasury funds in order to support these programs. The Home Affordable Modification Program was set to expire at the end of 2015, but is now extended for another year. According to the Washington Post, the program has “reduced the payments of about 1.3 million homeowners, far short of its initial 4 million projection.”

The announcement was scheduled to coincide with the Making Home Affordable program’s 5^th anniversary, as the program was introduced in 2009 (after the housing crash) as a means of stimulating the economy and improving the housing industry. As CF Funding has shared previously, the housing industry has come a long way since then. In CF Funding’s April press release “Underwater Homes at Lowest Level in Two Years,” the lender shared news that foreclosures and shadow inventory are continuously decreasing, and that an increase in home values has allowed homeowners to regain equity. Increased equity has allowed many homeowners to refinance or invest in remodeling projects. However, more improvement is needed to reach peak levels of housing activity.

The program is now extended through December 2016, according to US Treasury Secretary Jack Lew. “We need to continue to be there for homeowners who are facing foreclosure, those who are struggling with increasing interest rates on their modified mortgages, and those whose homes are caught underwater,” Lew said. The program not only helps to construct affordable rental housing, but allows state housing finance agencies to underwrite multifamily FHA loans. In doing so, the finance agencies take on a risk, as they share any losses from those loans.

The new program will receive anywhere from 500 million dollars to 1 billion dollars in annual funds from the Treasury and the FHA, in comparison to 363 million dollars which the FHA provided to the program last year.

The administration also hopes to bring back the private sector in order to reduce the government’s role in the mortgage market. The market is currently dominated by Freddie Mac and Fannie Mae, which are government-owned mortgage firms. Lew said he has directed his team “to bring investors and securitizers together in the months ahead so we can uncover new paths to increase private investment.”

CF Funding will keep readers updated on mortgage and housing news on the lender’s blog at http://cffundingcorporation.blogspot.com .

Home Auctions Popularizing, But Aren't Right for All Sellers

Auctions are taking a new turn in the real estate market, and are becoming less associated with short sales and million-dollar home sales. Many home sellers at a middle ground are using auctions to minimize home showings and ease the process of negotiation. Chicago Tribune recently shared some of the benefits and disadvantages of selling a home via auction, stating that “the different route to a property purchase doesn’t mean there isn’t still a bit of give-and-take between the seller and the buyer.”

CF Funding is aware that the homebuying process is not always easy. The mortgage lender has financed homes since 2000, and CF Funding loan specialists have seen a variety of homebuying and selling scenarios. However, there are only a select few situations where the lender suggests selling at an auction. As mentioned before, repossessed homes may benefit from auctions, if a quick sale is required. Properties that are of high value may also see benefits from selling by auction, as less unqualified buyers will be viewing the property. Another scenario where auctions may be beneficial is when a property is highly in demand, such as a single-family home in North Park. Buyers may feel that they could miss out on something special, and therefore are willing to place higher bets. Other areas where homes are in high demand in Chicago are Avondale, Edgewater, West Town, and North Center.

Properties that are in bad condition may also benefit from an auction, as auctions are highly populated with investors. Investors may be more interested in remodeling a property in less-than-perfect condition than other buyers. They are also more likely to have the funds available to do so.

So what are the disadvantages of selling via auction? Unfortunately for the seller, there is still a lot of privacy invasion leading up to the auction, where home viewings leading up to the auction can become overwhelming. The sale of the home is not guaranteed, and once the price is set, there is no further negotiation (even if the sale is much lower than expected). Luckily, the buyer has the ability to set a reserve price to avoid a less-than-ideal selling price. There are many fees associated with auctions that are required whether or not the property is sold, such as solicitor fees. If the home is sold, the seller may be in a rush to leave the property, as many auctions require the homeowner to vacate the property within 28 days of the sale.

Every home sale is different, and the best solution varies based on many factors. For flexible solutions to fit your homebuying needs, visit CF Funding Corporation at www.cffunding.com.

IHDA's First-Time Home Buyer Program

CF Funding is now qualified to provide this program to first-time buyers who qualify. Contact us today for more information.

Builder Confidence Rises in June as Housing Market Recovers

CF Funding is glad to see that builder confidence is rising again, as the NAHB/Wells Fargo Housing Market Index rose 4 points this month to a score of 49. A score of 50 or higher means more builders than not feel confident about the state of the housing industry. Limited availability of labor and other factors contributed to scores in the lower 40’s over the past few months, but Kevin Kelly says “a four-point uptick in builder sentiment is a welcome sign and shows some renewed confidence in the industry.”

As CF Funding has mentioned previously on the lender’s blog, the HMI results measure factors such as current sales, sales expected over the next 6 months, and traffic of prospective buyers. Builders’ responses from the survey are used to calculate a score from 1 to 100. The survey has now been conducted for 30 years.

All three indexes showed positive results in June, with current sales conditions increasing by 6 points to a score of 54. Expected sales conditions over the next 6 months rose 3 points to a score of 59. Buyer traffic increased 3 points to a score of 36. Although CF Funding is disappointed to see the buyer traffic score and overall score under 50 points, the lender is looking forward to further gains in builder confidence and expects all three indexes to rise in the coming months.

Regional HMI scores are also calculated, with the Midwest showing similar results as the overall survey, an increase of 4 points to reach 49 this month. The Northeast currently holds the lowest regional score of 33, and the West holds the highest regional score at 53.  On a 3-month average, the South and Northeast rose 1 point to 49 and 34. The west was unchanged at a score of 47. The Midwest fell 1 point to a score of 46.  NAHB Chief Economist David Crowe explained in a press release that “Consumers are still hesitant, and are waiting for clear signals of full-fledged economic recovery before making a home purchase… builders are reacting accordingly, and are moving cautiously in adding inventory.” Unfortunately for buyers, lower inventory usually means higher home prices due to less competition from other sellers.

Luckily, interest rates remain at historic lows, with slight decreases seen today in both 30-year and 15-year fixed-rate mortgages, as well as JUMBO and ARMs. CF Funding will keep readers updated on interest rate changes and the state of the housing industry on the lender’s Twitter page at www.twitter.com/CF_Funding.