Real Estate Information

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates go up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.

Having good credit and a steady job just does not seem to be good enough in today’s credit world when it comes to getting your home loan approved.  You need to make an impression.  Below are some great tips I would like to share with you.

Today’s lenders are a picky bunch when it comes to the loan approval.  Even well-qualified borrowers are expected to jump through some pretty high hoops to qualify for financing.

Have no fear. The tips below and suggestions can help you make the best possible impression on the lender of your choice.

Just as job hunters may wonder what top employers want to see on a resume, prospective borrowers may be curious about what lenders look for on a loan application.

The four C's

The answer may be summed up with a mnemonic called "The four C's,"

•    Capacity, which refers to the adequacy of the borrower's income to cover the interest and principal due on the loan, plus property taxes and homeowners insurance.

•    Character, which refers to the borrower's track record of paying debts, as evidenced by his or her credit history and credit score.

•    Capital, which refers to the borrower's down payment (or equity) as a percentage of the current value of the home.

•    Collateral, which refers to the safety and soundness of the home and the value of the home as determined by an appraisal relative to the agreed-upon purchase price.

Today’s mortgage broker might use a quadrant with "income," "credit," "assets" and "property" in the four corners, but his point is the same as that of the four C's:  What lenders like to see is strength and stability in all four areas.

Maybe your credit score has some dings or you need a stated-income loan.  Borrowers who are qualified but whose down payment will be less than 20% of the purchase price of the home must withstand a second level of scrutiny. That's because mortgage insurers also have to approve such loans, and they have "completely different qualification ratios”. Borrowers in this situation should discuss their options with a loan officer who is familiar with lenders' and insurers' guidelines.

Have paperwork in order

Lenders rely not on the borrower's say-so but on a pile of paperwork to verify and document the borrower's financial position. At a minimum, most borrowers are required to submit the following:

•    One month of paycheck stubs.

•    Two years of W-2 forms.

•    Three months of bank account statements.

Additional paperwork also may be required:

•    If you're self-employed or earn more than 25% of your income from commissions or bonuses, you'll need to hand over two years of income tax returns.

•    If you're divorced, the lender will want a copy of your settlement to ascertain how much alimony or child support you're obligated to pay or are entitled to receive and the duration of those payments.

•    If you've filed for bankruptcy protection within the past seven years, you'll need to show your bankruptcy papers.

•    If you've deferred repayment of student loans, you should provide your deferral agreement as well.

"If (borrowers) have student loans that are going to be deferred for at least 12 months, that may help them qualify, so they would want to bring the account numbers for those loans.  Student loans are counted as debt, but deferral of repayment may strengthen the borrower's application.

One thing that most homeowners can agree on is that they dread the house cleaning chores. With our busy lifestyles, it can be difficult to find the time to clean the home. Not to mention there are always other things to be done that are much more fun. Hiring a house cleaning service may be the way to give you more free time while giving you the comfort of knowing your home is clean.

What Services Are Offered?

Services can vary from company to company but below are the standard services that most offer:

• Vacuuming
• Dust removal
• Wash floors and baseboards
• Clean window blinds, door knobs and light switches
• Clean entryway windows and doors.
• Make beds, change linens
• Clean and disinfect bathroom
• Clean kitchen
• Empty/Load dishwasher
• Empty trash containers 

The cost for such services vary from each company and are usually priced by the square footage of your home. In addition to the standard services offered above, some companies will also offer speciality services such as carpet cleaning, window washing and garage cleaning.

As with any service where people come into your home, be sure to do your research and always check to make sure they are insured and bonded and obtain references. Try asking for recommendations from friends and/or neighbors who use house cleaning services. Most house cleaning services offer free consultations to help you find the right services that fit what you need.

Homeowners who have found themselves in default now might find some relief. The Obama administration has been trying to keep defaulting owners in their homes and now has a program to help.  In a recent article in the New York Times, a new government program will help to end the foreclosure crisis. This program will allow owners to sell their home for less than they owe.

It is a well known fact that many homeowners are in trouble. In fact more than five million households are behind on their mortgages and risk foreclosure. The government's $75 billion mortgage modification plan has helped only a small slice of them.

Under this new federal program, a lender will use real estate agents to determine the value of a home and thus the minimum to accept. This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it.

This program will begin to take effect on April 5, and could encourage hundreds of thousands of homeowners in trouble who have not found help thru the loan modification program or thru other programs. In addition, this program will also be a benefit for communities, as it will mean fewer empty foreclosed houses waiting to be sold by banks. 

There has been much recent coverage on solar paneled homes and their benefits. The idea of homes using solar technology has been around since the 1950s, but, it has been increasing in popularity in the last 10 years. Homeowners who install these panels receive numerous benefits such as: lower electric bills, tax credits, less energy used, as well as potentially higher home values. The downside is that these homes typically require installation and maintenance costs, some which can be quite expensive.

As mentioned above, one of the significant benefits to a solar powered home is a lower energy bill. It is however, important to understand that the amount of savings can vary and is dependent on the amount of solar energy that can be produced given the available conditions, and the way in which utilities charge for electricity

A benefit of a solar system that is not always known is that homeowners can sell solar-generated electricity to utility companies. This is when homeowners who have solar paneled homes allow some of the power they produce to be put into the grid to offset the power consumed at other times.

In addition to all of the benefits, having a solar paneled home has the potential to raise the value of the home. Not only for the financial benefit but many homebuyers are interested in "green" houses that are powered by renewable resources.

If you are considering installing a solar powered system in your home,it is important to remember that it is a long-term investment that can be costly. There are however, government incentives that can help to offset the installation costs.

If your kitchen counters need some updating but replacing them is not in your budget you may want to consider countertop resurfacing. This is a much more economical and easier option for homeowners who are wanting a change or are trying to sell their home.

This is a much simpler process than completely replacing the counter tops because you will avoid the mess and time involved with removing and replacing them, not to mention you can save up to 70% off the cost of replacing your kitchen countertops. A refinished countertop is durable and can extend the useful life of your counters for 10-15 years or more with basic care and maintenance. 

The changing of the counter top surface can help to give your kitchen a fresh new, updated appearance that can help your home to sell. Homeowners have many options for materials, from simple laminates to granite and even 'faux' stone.

Kitchen countertops are an important part of a kitchen not only because of their functionality but it also sets the style. Kitchens are an important when selling your home as buyers look for updated and functional kitchens that are move in ready.  

A home warranty might be something to consider if you have just purchased a new home or are going to be buying a new home in the near future. A home warranty guarantees the property against failure of mechanical systems, such as plumbing, electrical, heating and installed appliances. Many first time home buyers go with a home warranty to help protect them against the cost of unexpected covered repairs or replacement on their major systems and appliances.

The cost for  a home warranty can vary but they are typically inexpensive, usually ranging from $250 to $600 annually, depending on coverage. There are many different plans with different requirements, most tend to operate the same way. If an appliance or item covered breaks or stops working, the home owner calls the home warranty company. The home warranty company calls a provider with which it has an arrangement and they contact the homeowner to come out to fix the problem.  Typically if the problem can be fixed per the contract coverage than the warranty company pays the contractor directly.

Each company is different in what items they cover but below are some typical systems and appliacnces that are covered and what are not typically considered to be included.

 Typically Covered

• Air conditioner system/ Furnace / heating
• Dishwashers
• Doorbells
• Water heater
• Garbage disposals
• Inside plumbing stoppages
• Ceiling fans
• Electrical systems
• Range and oven

Typically not covered

• Outdoor items such as sprinklers, or pool filters/spa systems
• Not all plans pay for refrigerators, washers & dryers or garage door openers
• Spa or pools, unless specific coverage requested

It is important to know that pre-existing conditions are not covered. The home warranty company expects to start with a clean sheet and they require home owners to fix any pre-existing issues before the new policy becomes effective. It is a good idea to get the home inspection done before you sign the contract, so that you have a proof if necessary.

When looking for a new home, the neighborhood that the home is in can be just as important as the actual property. Because each town has several hundred if not thousands of neighborhoods, it can be a very time consuming process to research which area offers what will meet your needs. NeighborhoodScout®is a web based neighborhood search engine that can assist you in your search. It is a useful tool for homebuyers that uses neighborhood statistics to build neighborhood profiles to help them to instantly find the best neighborhoods that fit their criteria in any part of the United States.

NeighborhoodScout uses the largest database of neighborhood statistics and characteristics so that the user can choose exactly what they want in a neighborhood by selecting lifestyle searches and key words. Homebuyers can search for neighborhood profiles that are linked to the local information such as school information and crime statistics for each neighborhood.

NeighborhoodScout uses nearly 200 characteristics to build a neighborhood profile for each and every neighborhood (census tract) in America. These include: school quality, housing costs, crime rates, income levels, the age, size and style of homes, the density of buildings, rental areas versus owner occupied, the proportion of families with children, ethnic and racial makeup, and many other demographics.

NeighborhoodScout reduces the amount of time spent searching  by pinpointing the locations that best meet your specific criteria. This unique search engine also assists by eliminating misguided location searches and reducing financial risks and uncertainties associated with buying real estate.

When you purchase a new home one of the documents you will sign when you go to closing is called a Deed of Trust. Many homeowners typically are unaware of exactly what it is. Below is more information on this important document.

What is a Deed of Trust?

A Deed Of Trust is the security for your loan. It is the document that is recorded in the public records.  A deed of trust contains three parties:

•The Trustor, which is the borrower

•The Trustee, which is an entity that holds "bare or legal" title

•The Beneficiary, which is the lender

The deed of trust identifies the following:

•Original loan amount

•Legal description of the property being used as security for the mortgage

•The parties

•Inception and maturity date of the loan

•Provisions of the mortgage and requirements

•Late fees

•Legal procedures

•Acceleration and alienation clauses

•Riders, if any, regarding such clauses as prepayment penalties or terms of an adjustable rate mortgage

Before you sign a Deed of Trust be sure to read all the fine print and pre-printed portions. It is a good idea to request a blank copy of the deed of trust beforehand to review. When you do go to closing be sure to make sure everything is correct before signing. Things such as the principal balance of the loan, the interest rate, and any pre-payment penalties should be reviewed for accuracy.

In today's current sagging economy, many homeowners are struggling to make the monthly mortgage payment and stay on top of their expenses. Foreclosures are in almost every neighborhood and plunging property values have made it harder to determine the amount of equity homeowners have.

However, the good news is that banks are more willing than ever to help homeowners avoid foreclosure. One of the ways you can do this is to renegotiate your mortgage. By doing this you may be able to get a lower finance rate as well as change your rate from a high fixed-rate mortgages or adjustable-rate.

In order to qualify, typically You’ll need at least 10 percent equity in your home. You can easily check the value of your home on sites such as Zillow.com and I can provide you with a free and quick estimate of your home’s worth. Today's lenders typically will require that you have a credit score of at least 720 to qualify for good rates.

Lenders are aware of the many fiscal difficulties borrowers have in making their mortgage payments when hardships arise. However, they typically won't volunteer or advertise their help. So if you are struggling to make your payments on time, it is vital that you take the initiative and contact your lender and give them a heads up on your current financial hardship before you miss payments.  Keep in mind that lenders have more incentive than ever to work with you. Plunging property values mean they’re recovering less now on foreclosures. Plus, many that received cash infusions from the U.S. Treasury are under pressure to show that they’re responding to the housing crisis.