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The McDonald Group Real Estate
2010 West Springfield Avenue, Champaign, IL 61821, United States
(217) 359-7971


The Right Time to Purchase a Home in Champaign County

If you live in Champaign County and looking to buy real-estate and sitting on the fence about when to buy a home, here's a shove to help you make a decision. The Federal Housing Administration (FHA) just announced that it is raising its mortgage insurance premiums yet again on April 1st. This means a higher mortgage payment if you plan to use an FHA loan to purchase your home.

The FHA loan program is particularly attractive to first-time homebuyers because it requires only a 3.5% down payment. It also appeals to folks with a few dings on their credit history as it is more forgiving of bankruptcy and foreclosure than conventional mortgage programs.

Homebuyers with FHA loans pay two types of mortgage insurance. FHA charges an annual premium that you pay in monthly installments as part of your mortgage payment. FHA is raising this premium to 1.25% of the loan amount for those who make less than a 5% down payment. If your down payment is at least 5%, the rate will be 1.2%.

FHA also charges upfront mortgage insurance that you pay at closing. This premium will rise from 1% to 1.75%. (Most homebuyers finance the upfront mortgage insurance into their loans.)

So, how does this affect you? If you're buying a $150,000 home and making the minimum down payment, the upfront mortgage insurance will increase from $1,447.50 to $2,533.13. If you finance that into the loan, your monthly payment will increase by 18 dollars and change from $838.08 to $856.57. (This payment assumes a 4% interest rate on a 30-year mortgage and does not include property taxes and insurance, which you pay as part of your monthly payment.)

Over the life of the loan, that's $6,656 more for the same home.

A little adjustment can go a long way over the life of loan.
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No End in Sight for Entrepreneurship

A Champaign real estate company was born during the great depression of real estate. I found this brief article interesting since we started the The McDonald Group Real Estate Company during these troubled times.

Corporate Layoffs & Cutbacks Push Many to Entrepreneurship

It's no surprise new businesses are still cropping up in the midst of one of the toughest economies and real estate markets in the nation's history. With corporate downsizing and continuing layoffs, entrepreneurs are still opening their doors at a maddening pace.

Over Half of Companies Launched During a Recession

According to a report entitled, "The Economic Future Just Happened," profiled by the Kauffman Foundation (the world's largest foundation devoted to entrepreneurship), more than half of the companies on the 2009 Fortune 500 list were launched during a recession or bear market.

Further, according to the Office of Advocacy of the U.S. Small Business Administration (SBA), an independent voice for small business within the federal government, an estimated 27.5 million small businesses operated in the United States in 2009; and they created 65 percent of "net" new jobs.

Entrepreneurship is a vital part of the United State's make-up, both historically and today. Almost half of the companies on the 2008 Inc. list of America�s fastest-growing companies were entrepreneurs.

Business-owning Households Have More Wealth

Research by an arm of the SBA indicates that households propelled by entrepreneur endeavors (business-owning households) are more likely than others to have higher income and wealth than non business-owning households.

Worldwide Fostering of Small Business Start-up

Entrepreneurship is promoted and fostered the world over. The upcoming Global Entrepreneurship Week, a worldwide phenomenon, is proof in itself. Global Entrepreneurship Week, taking place November 15th through November 21st of this year, is an event that will celebrate and promote entrepreneurship in over 100 countries. Over 20,000 organizations, almost 58,000 events (slated to be held in individual countries), and millions of people, are expected to celebrate, inspire and promote new ideas, enterprise and entrepreneurship.

Finding a Ripe Business Opportunity in a Down Market

For those considering entrepreneurship, the task lies in finding a solid business opportunity that fills a void, or fits a need, in a struggling economy. The foreclosure crisis has created one such opportunity in the United States and can be credited with the now burgeoning "foreclosure cleanup industry" (also referred to as the "mortgage field services industry" or "property preservation industry").

According to recent Amherst Securities research, highlighted via an MSNBC editorial, approximately 11 million borrowers are at risk of losing their homes. With figures like these, starting a foreclosure cleanup business is an example of a ripe business in a market suited for services under the foreclosure cleanup and foreclosure cleaning umbrellas.

With the increasing number of foreclosures on the market today, and with those expected to materialize in the future, the foreclosure cleaning industry is continuing to climb as a viable business opportunity for eager entrepreneurs seeking business opportunities in the midst of corporate cutbacks and layoffs.

No End in Sight for Entrepreneurship

Entrepreneurship is growing by leaps and bounds in the U.S. and abroad, no matter the state of the economy, with no end in sight, for eager professionals ready to strike out and open new businesses.

Long live the USA where we can start our own companies!
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Buy Now or Wait?-The Housing Market in Champaign County

Champaign, Urbana, Mahomet, St Joseph and area homes and real estate are approaching a shifting of the tides in our markets

"Housing is one of the great investments right now. I tell people all the time when they come up to me, they say, "What should I do, Mr. Trump?" I say go buy a house," said Donald Trump recently in an appearance on CNBC.

"It wouldn't be an obvious mistake to buy a house now," hedged famed economist Robert Shiller, barely a few hours later.

Perhaps they were just jumping off legendary investor Warren Buffett's recent declaration that if he had a way to manage them, he would buy a couple of hundred thousand single family homes and rent them out.

Housing appears to be rated a "buy" these days, especially among investors, who see a ripe and rising rental market and big potential for income.

But is it the right time yet for what I call "organic" buyers to get in? By this, I mean people buying a home to actually live in it, raise a family in it, let the dog run around in the back yard. If prices are still falling, couldn't an even better deal be waiting down the road a bit?

No. House prices will continue to fall on a national basis at least through 2012, but you have to look past national headlines to your local market, which is likely already recovering nicely. The trouble with the national numbers is that they are heavily weighted toward the lower end of the market and to the distressed end of the market.

Around 73% of homes that sold in January were priced below $250,000, according to the National Association of Realtors. Forty-seven percent of homes sold that same month were considered "distressed," which is either a foreclosure or a short sale (where the lender allows the borrower to sell for less than the value of the mortgage). With all the activity in these areas, no surprise that prices skew lower.

The $250,000 to $500,000 price range may now be the sweet spot for the market. Sales in January were up in this price range, and if you have good credit, you are within GSE and FHA loan limits in most markets. While FHA just raised its insurance premiums, which may hurt much-needed first-time homebuyer demand, it is still one of the best loan products out there today, especially for those with lower down payments.

You cannot time housing any more than you can time the stock market. True, housing moves far more slowly, but that works to its benefit, as prices don't rise and fall on daily news or even on major events. Sales have clearly bottomed in housing, and prices always lag sales. They will lag longer this time around, no question, but they will come back.

Supply and demand will eventually win out, even after an historic crash. If you can't get a good mortgage now, then perhaps it's not your time, but if you can, waiting may not buy you much.

Start Packing
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The McDonald Group is an all-inclusive real estate firm with over 25 years of experience in residential, commercial, leasing, development, and management.
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(217) 359-7971
2010 West Springfield Avenue, Champaign, IL 61821, United States
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