Palos Verdes Real Estate Info

California Foreclosure Relief Opened To More Homeowners

2011-04-06T16:51:00.000-07:00

California homeowners who refinanced their properties for cash or took out home equity lines of credit will now be allowed to participate in parts of the state's $2 billion foreclosure relief initiative.

Many peopole tapped their rising equity during the boom years, using their homes as ATM's to fuel spending. The California Housing Finance Agency had initially excluded people who used their home equity in such a manner from participating in its "Keep Your Home" initiative, which launched this year with federal funds reserved for the 2008 rescue of the financial system.

But California's high unemployment rate caused the agency to reconsider its policy, agency Executive Director Steven Spears said in a statement.

"In the two short months since the launch of these programs, we have collected information that has helped us identify areas of improvement to make the programs more effective, particularly given the continued high level of unemployment in California," he said.

The California Housing Finance Agency will now allow people who refinanced or took out home equity lines of credit to participate in three of its four Keep Your Home programs.

This includes the agency's biggest inititative, which allocates $875 million as temporary financial help to people who have seen their paychecks cut or have lost their jobs, providing as much as $3,000 a month for six months to cover home payments and associated costs.

It also includes a plan that would give homeowners as much as $15,000 to help them get current on their mortgages. The third program provides moving assistance for people wh0 can't afford to remain in their homes.

These same programs also are being expanded to include mortgages that were originated after Jan. 1, 2009, the agency said. Homeowners who previously applied to the program and were disqualified for that reason can reapply.

Those who refinanced or took out a home equity loan will not be allowed to participate in the initiative's principal-reduction effort, its second-biggest and most controversial program. About $790 million is slated for that program, which would write down the value of an estimated 25,135 "underwater" mortgages, those in which the amount owed is more than what the property would bring in a sale.

How Eco-Fabulous Can Be Eco-Nomical

2011-04-05T17:14:00.001-07:00

Becoming eco friendly is the newest favorite pastime but while everyone has their own reasons for “going green” the underlying theme is green could be your wallet’s ally.

Everything from conserving water and energy to other essential environmentally conscious choices can put more money back in your pocket and homebuyers are considering these options when purchasing a home.

How much money could you be saving?

• Alternative powered homes like solar, wind or geo-thermal are easier to locate and much more affordable today. The initial costs of these systems can be high but when seeking a new home to buy consider streamlining your choices to include homes with alternative generated energy. A top energy saving item is the Owl Energy Monitor; this device shows you how much energy you use in your home and how much its costing you. Take for instance the solar energy systems. Many are portable systems that are utilized in high traffic areas of the home such as the family room. You could cut your energy usage in that room up to 40%. There are many other items that are surprisingly simple to install and again while the initial costs are quite high, looking for a home that is already comprised of these items can save you a bundle. Less money towards the utilities and more disposable income for you wallet.

• Indoor air quality can make a big impact on your medical expenses. Studies show that asthmatics and allergy sufferers have fewer to no breathing problems when using eco friendly materials like green flooring and low VOC paint materials. You can rid your home of most dust mites, allergens and sometimes mold just by disposing of the carpet and installing hard wood flooring. While searching for your new home you can look for greener components that will cost you less for maintenance and help keep your family healthy. A healthier home life means less money spent on medicines, doctor visits and absences from work.

• Traditional appliances have been outsourced with newer energy efficient models. Water heaters can account for 15% of your water bill and if more than 10 years old it will only work at 50% of its capacity. Toilets and shower heads, faucets and other energy efficient appliances that conserve water can be advantageous to a new home owner. While utility bills continue to increase everyone should look for ways to safeguard their money.

New home buyers can realize the positive effects of buying green with a little pre-planning. Looking for ways to save money before selecting your new home is a valid safeguard for future expenses. By seeking out those homes that already have green components installed, you’ll save a tremendous amount of time and money for years to come. And while many people believe going green is just too expensive and time-intensive the way to get around those concerns are by starting out small. Look for those items that will make the deal and save you lots of money in the long run.

Buying a Home with Great Resale Value

2011-03-31T16:50:00.000-07:00

Whether you want to purchase a home to live in for several years or to resell quickly, location will certainly play a role in its resale value. Chances are that you may not live in the same home your entire life, so location and resale value may be important considerations when purchasing a home.

The most important step in finding a home with resale value is choosing the right neighborhood. One of the first things you may want to consider when researching a neighborhood is the economic stability of the neighborhood.

A desirable area will:

Possess a good mixture of residential and commercial districts
Have jobs for future residents
Demonstrate consistent economic growth
Be supported by a strong local government

Another important factor to consider as you try to find the best neighborhoods is the quality of the local school system. Even if you don't have children, you should try to research the closest schools before purchasing a home. This provides a good criterion to factor in of the attitude of the neighborhood and the type of people you’ll be surrounded by. High scores can mean parents are fully invested in their local school system and their children and this translates into how they feel about their homes.

By placing a call to the local school district, you may be able to find out what type of funding area students receive, how well students have performed on standardized tests and whether or not the district will be opening or closing any schools in the foreseeable future. Regardless of where the home is located, the quality of the nearest schools will almost certainly be an important factor for potential buyers when you try to sell the home.

Beyond the schools and local government, there are a number of factors you may want to consider regarding the home's immediate surroundings. For instance, you may want to look for property in neighborhoods where most of the homes are similar in size and style. Additionally, the ideal location for a home is nearest the center, away from busy streets and bordering only other homes, as opposed to businesses, apartment complexes or schools.

Finally, you may want to think about the traffic patterns that surround the neighborhood and whether the street is used as a shortcut between two busy roads.

Though you may be looking for properties that lie in the middle of desirable neighborhoods, you should also consider how convenient the location is for a potential homeowner. The best homes will be located near all the essential businesses and have “walkability” - such as grocery stores, dry cleaners and banks.

In short, the ideal neighborhood will represent the best of worlds, offering residents both privacy and convenience.

Screening for Quality Tenants to Rent your Property

2011-03-30T17:26:00.001-07:00

One of the most stressful elements of managing your investment property is dealing with difficult tenants. Between killing your cash flow with late rental payments, and causing financial nightmares via the damages you continuously have to repair (and let’s not forget the small fortune you spend on evicting bad tenants); why do we go through all the trouble?

What most people don't realize is that the vast majority of tenant-related problems can be eliminated by simply avoiding bad tenants altogether with thorough screening. Here are a few tips to improve your screening process.

The most essential piece of the screening process is the application. Provide a thorough application to prospective tenants that include all the pertinent information you would like to know, within the legal limits of course. Make sure that the application is completely filled out, and that you have a copy of the applicant's valid driver's license and a second picture ID and check that the name and information on the ID matches that on the application.

Next, you'll have to investigate the applicant's financials. Request the past three months' pay stubs to be sure they can afford your rent. Call the applicant's employer to verify that they work there, that there are no problems related to the applicant, and that there's no reason to believe the applicant will be unemployed in the near future. Also, request their three most recent bank statements.

While this is not always required, the applicant should be willing to provide them; if not, then you have a pretty good reason to be wary. It is also important to check the applicant's credit and criminal history. A credit score above 600 is usually considered reasonable for a tenant, and you want to steer clear of anyone with a history of evictions or criminal behavior.

On the application, make sure you include a space for the applicant to provide information about previous rental engagements including landlord contact information and rental amount.

This is important so that you can call the previous landlords to inquire about the tenant. Use caution when dealing with contacts, as many applicants use their friends to pose as landlords and vouch for them. One good method of weeding these applicants out is to ask the "landlord" about the rent, quoting a price other than that provided by the applicant. If the person you are speaking to doesn't correct you, then they were probably not the landlord. Additionally, inquire as to whether or not the tenants were able to get their security deposit back or was it held because of damage. This will give you a good idea about how the prospective will treat your rental.

You should also have any and all parties residing in the rental complete an application.

If you adhere to these methods responsibly, selecting quality tenants for your properties should not be a problem.

You Still Need a Realtor to Buy Direct from the Builder

2011-03-28T16:19:00.000-07:00

It always seems simple to walk into a model home and deal directly with the builder but that’s not the best idea. More people are taken advantage of when alone than with a real estate agent. All the paperwork you’re required to sign, disclosures, clauses and most important releases.

When you sign a release you practically give up your rights; it could mean forfeiting your right to keep your deposit or setting the settlement date in stone for you but a contingency for the builder.

Every page you initial could be detrimental in the end if you are not represented professionally. Sure, there are laws and guidelines that say you are protected from predatory requirements – RESPA Laws – however if you don’t know how to apply those guidelines to your transaction how do you know if you’re being taken for thousands of dollars?

Many homebuilders offer incentives as a way to entice you to purchase their home however those incentives often mean you must use their in-house lenders and their title escrow companies; this is far from the truth because you can use whatever lender or title escrow company you choose and in the end, the builder cannot tie the incentives to a specific lender.

Are your discounts really discounts or are they embedded somewhere in your sales package? Often a builder will show you all the discounts and incentives they’re providing to you but the loan package is packed with excessive and useless fees that make up for all those discounts they’re giving you. This is why you need a realtor to accompany you for any real estate transaction. It may seem like a simple decision to walk into a model home and deal with the salesperson but it could cost you thousands of dollars.

That salesperson works solely for the builder and I bet you’ll sign an acknowledgement of this statement. They must disclose certain items to you but again they work solely for the builder and without professional representation you are on your own to learn the ropes.

For any real estate transaction take advantage of all the knowledge a real estate agent or broker has to offer. You’ll avoid many of the traps home builders have waiting for you.

Do I Really Need a Realtor

2011-03-16T17:05:00.001-07:00

Everyone is looking for ways to save money during this recession including DIY everything. And although times look bleak there are many buyers out there ready to purchase your home. Question is can you go it alone or handle everything yourself?

Many homeowners believe they can go it alone and find themselves looking for a professional to save them.

With the advice of a real estate agent you’ll have a much better chance of selling quickly; recession or not.

But there are several crucial reasons for using a real estate agent.

First off, a real estate agent is trained in keeping an eye on how the market is moving and responding to different circumstances. This will allow them to tell you the important information as it develops. If you were selling your property by yourself you would be on your own as far as figuring out what a recession is doing to the real estate market including competition in your own backyard and sales and trends.

Second and most important, a real estate agent knows all the legalities, requirements and guidelines the buyer and seller must adhere to. You have no idea how many legal forms you are responsible for. You wouldn’t want to get caught with a voided contract after laying out tons of cash because you forgot a key item, would you? How about getting stuck with a one-sided contract in favor of the buyer?

Additionally, in order to improve your odds you will want a real estate agent helping out with all marketing related tasks. For instance, your agent will be able to schedule open houses, send out flyers, add your home to multiple websites, call clients and other agents in the market, and much more. These are all marketing tasks that need to be done successfully, and during a recession it is much better to use a real estate agent.

Sure, there are many ways to save during this recession but holding back on professional services during the sale of your home is definitely not one you want to undertake.

California Foreclosure Update

2011-03-15T15:23:00.000-07:00

1. Foreclosure filings in California dropped to levels not seen since since late 2008 when governmental intervention temporary slowed the foreclosure filing process.

2. Notice of Default filings dropped 12.8 percent month-over-month and Notice of Trustee Sale filings fell 12.5 percent from the prior month.

3. The foreclosure filing percentage decreases are more moderate when adjusted on an average daily basis due to the fewer filing and trustee sale days in February with a 3.1 percent drop for Notice of Default filings and a 2.8 percent decline for Notice of Trustee Sale filings.

On a year-over-year basis foreclosure filings were down as well, with Notice of Default filings down 29.6 percent and Notice of Trustee Sale filings falling 17.0 percent from February 2010. Acivity on the courthouse steps slowed with fewer sales leading to a 24.5 percent decrease in sales Back to Bank and a 20.3 percent drop in properties purchased by Third Parties, typically investors. For the first time, Third Party investors saw a drop in the average Time to Resell a property, down 3.1 percent to 156 days.

Should You Consider Condo Living

2011-03-14T17:11:00.000-07:00

Purchasing a condo can be a great option for many buyers. Condos frequently feature desirable locations, minimal maintenance, and smaller price tags than single-family homes and home buyers today are considering a simpler lifestyle. But condo living, good or bad, can present unique challenges;

Pros

1. Amenities. In many condominium communities you'll find you have access to a clubhouse, pool, exercise facilities, concierge, or even door security. These great perks cost you nothing extra and are quite the draw for many buyers.

2. Cost. In many cases, you can find a condo in your preferred neighborhood for a cheaper price than a single family detached home. This can come in handy when parents want children to go to the best public schools in the area. They may not be able to afford the house around the corner, but they can afford the condo in a community.

3. Maintenance. Most condominiums require very little maintenance from their tenants. Yard work and the like are done and paid for through your monthly dues. Reserve funds are saved up by the condo association for larger periodic repairs, such as roof replacement and painting.

Cons

1. Monthly dues. While the condominium unit itself may come with a cheaper price tag, once you add in monthly dues or fees you could see yourself being priced out of the property. While monthly condo fees cover on-going maintenance and contributions to a reserve fund for small emergency repairs, condo associations may assess separate fees for unexpected expenses or to fund major property improvements like repaving.

2. Resale. There are fewer buyers looking for condos. Large families are generally on the hunt for a single family dwelling.

3. Limited Space in General. You may luck out and find a condo with a garage or storage units. If so, you are in the minority. If you have lots of things to store, and no extra space to put them, remember to add in a storage rental space into your monthly expenses before buying.

4. Less Privacy. You share a wall with your neighbors. You may even have neighbors above or below you. In this case, remember the noise factor.

5. Subletting. Did you know that a condo board can make it "illegal" for you to rent your unit out? Be sure to check out the rules before you buy, especially if you are considering using the property as a rental unit at some time.

Condos make ideal homes for singles and couples who lead busy lives and dont spend much time at home, but consider your lifestyleboth now and in a few yearsand make sure a condo really Is the right fit for you.

Buying Preforeclosures

2011-03-11T17:01:00.000-08:00

An often overlooked home buying strategy these days includes looking for pre-foreclosed properties. Pre-foreclosures are known as properties that have reached the final stages before they get repossessed or taken back by the lender or bank. The owner is still in complete control of the property or home, although the bank or lender will repossess soon if the owner doesn’t attempt to rectify the situation.

When buying real estate, there are several benefits to pre-foreclosures. Although there are several obvious ways to purchase a home, pre-foreclosure is a great option. Even with its benefits, many people miss out simply because they aren’t familiar with pre-foreclosures.

In most cases, the owner has no choice but to sell the house, and therefore will listen to just about any offer they receive. Due to this very reason, you can find pre foreclosures for sale at nearly 40% off market value. This is an ideal time to purchase, especially if you are looking to save a lot of money.

Along with the great pricing you receive, you’ll also have the luxury of dealing directly with the owner and the real estate agent - no third party banks involved, like with short sales and foreclosed properties.

This is a great advantage, with buyers being in total control of pre-foreclosure sales. In the event that the home owner decides to turn down your offer and cannot find another buyer, he will lose everything. Even if you offer the owner a small price, he will be able to make a little bit of money selling the home.

You can find pre-foreclosures that are up for sale pretty much the same way that you can find homes in which the bank already has control of. Ask your real estate agent or you can look in the local newspaper, or on the Internet. Once you have found a pre-foreclosure for sale, it’s up to you and the real estate agent to seal the deal and get the home of your dreams at a very affordable price.

When you compare foreclosed properties with pre-foreclosed properties, you’ll find that there is less competition involved with pre-foreclosures. Not only are pre-foreclosed homes a better option than a foreclosure but many times you can pay less than market value for the home and instantly reap the benefits of increased value.

Meet with a real estate agent and ask about pre-foreclosed properties and negotiations to get you in a home quickly.

Is It A Deal Or A Scam

2011-03-10T17:13:00.001-08:00

Many homeowners have been acting in a fit of desperation and not thoroughly checking out real estate facts, leading them into unaccommodating scams. Con artist have successfully duped homeowners time and time again from everything including Title fraud, Local and Overseas investments to Foreclosure frauds, just to name a few.

I Can Save Your Home!

There are plenty of sales pitches a scam artist rescuer will explore to get your home and money. I can save your home and your creditis a typical phrase to lure homeowners to sign over their title or get the mortgage payments sent directly to them.

In some cases, the "rescuer" will also try to collect a stiff fee before they assist the homeowner. In the worst cases, the "rescuer" may also obtain a second loan on the property, take the proceeds and leave town, or rent out the home -- forcing the current distressed resident to be evicted. And while the ownership may have been transferred to the "rescuer," the homeowner still owes the monthly mortgage payments to the bank.

And on the flip side, it's even more offensive when lenders who offer to "save" the troubled homeowner suggest refinancing their home with high fees, high interest rates and a new costly loan.
There is a simple resolution to stopping this abuse from a scam artist and that is talking to a real estate agent AND an attorney before you sign any documents.

Is that Overseas Investment too Good to be True?

Con artists utilize this real estate scam to play on your desire of getting something for very little - an easy investment. Investors are told to send investment checks, and initially they receive a small check in return, supposedly "proving" the system works. Then, their returns dwindle and no other checks are received in the mail. People tend to fall for the overseas angle because it is exotic-sounding and they think they are, in some way, taking advantage of a new discovery or resource others are not aware of. But, if you are not familiar with overseas investments or the real estate market, why take a chance on someone's word?

So what is the simple resolution to stop a con artist in their tracks before getting a hold of your money? Consult a reputable real estate agency or just call up a legal consultant. Do not use the con artists contacts use your yellow pages and call on your own!

Life after Bankruptcy and Qualifying for a Home

2011-02-24T17:05:00.000-08:00

Bankruptcy can help relieve you of your debts and stop harassing creditors from contacting you but have you thought about life after bankruptcy? Will you be able to qualify for a new home?

You can be approved for a new mortgage at a normal interest rate within 24 to 30 months after your discharge. If you can prove the bankruptcy was caused by medical reasons or a divorce you probably can be approved much sooner. But there are qualifications that you must meet to get a new mortgage and this all depends upon how you re-established yourself after the bankruptcy discharge.

Even if you dont meet all the qualifications you can still get a mortgage but it will come with a higher interest rate and a larger down payment. Lenders will be inquiring about your finances and looking to see if youve paid your bills on-time since the bankruptcy.

So How Much Credit is Enough?

If mortgaging a new home, it will take more than a bank card with a $500 limit to re-establish your credit. Begin by concentrating on the necessities and time will work miracles. Start establishing the following:

1. Bank checking and savings account
2. A secured credit card from a reputable institution
3. An auto loan

You will need at least 3 credit references since your bankruptcy.

Put Your Financial House in Order

It all starts with your money. Have you noticed that most people in dire financial straits seem to have everything? Large screen televisions, expensive appliances, fancy cars, etc? When you are discharged from bankruptcy you must cut expenses and stop throwing money away on useless things however the problem here lies with our mindset we believe everything we have is a necessity; the new wardrobe, the mini-mansion, the over-priced automobile; you may very well deserve these things but if you cant afford it you simply have to understand the obvious You Cant Afford It!

Did You Know

After your bankruptcy discharge you can re-build your credit score within 24 months up to a high 800? But this requires paying all bills on time and securing new credit responsibilities to show that youre ready.

I wish I could say that youll be automatically qualified but this all depends on what youve done since your bankruptcy and the lenders guidelines.

Things that will Kill a Mortgage Loan Application

Start anticipating a bumpy ride; I know this sounds negative but its best to be prepared and after a bankruptcy its not a walk in the park. There are twists and turns but it will prove to be well worth the hassle so never give up.

There are things that will likely kill or just delay your chances for a new mortgage;

1. Poor credit since bankruptcy
2. High debt to income ratio
3. Job instability
4. Tax liens or levies against your paycheck
5. Insufficient down payment

Reality hurts sometimes but when youve been given a second chance you should know you have to prove yourself all over again. The most important thing here is to know that you must take a hard look at how youre living and the work you must put into re-establishing your credit. This will improve your chances not only for a mortgage but living encumbered without the benefits of good credit.

New Homebuyers Save Bigger with a 15Yr Mortgage

2011-02-17T17:11:00.001-08:00

Did you know more homebuyers are choosing a 15-year mortgage over a 30-year mortgage than ever before? It’s not that difficult to understand why; Not only is now the best time to buy a new home but you get to become mortgage-free sooner.

15 year mortgage loans are offered at a lower interest rate; while the 30 year mortgage interest rates are steadily climbing, the 15 year mortgage interest rates have declined.

If you would take out a $200,000 15yr mortgage loan today with an interest rate of 4.75%, your monthly mortgage loan payments would be $1043.00; compare that to today’s 15 yr interest rate and you could take out that same $200,000 mortgage loan at 4.05% with monthly payments totaling approximately $1480;

Yes, it’s a few hundred dollars more to pay off your mortgage loan sooner and that’s a hefty monthly payment, but you get to shave off 15 years to being completely mortgage free; who says you have to spend that much? You could consider a smaller home or a different part of town to lower the price of the home. The important element here is in just 15 years, you will own your home free and clear.

OK, that idea looks fabulous, right? Keep in mind, qualifying for a 15yr mortgage loan means less debt-to-income ratios with more income. Why? Well, you’re telling the lender that you can afford more for your investment.

The 15yr home mortgage loan is especially good if you’re looking at your retirement options. Many retirees are unprepared today because of many payments their still responsible for. What’s more advantageous than being mortgage free? Just think, 50 years old and your mortgage is paid off. Today’s scenario is more like 65 years old and your mortgage is paid off, so that’s 15 years advantage you have to saving over a thousand dollars per month.

Now many potential new homebuyers still sit on the fence, not sure if renting or buying a home is the best decision for them; well, hurry up with that decision because the consensus is, mortgage interest rates will gradually climb throughout the year. Today’s 4.5 to 4.75% interest rate could hit 5±% by years-end.

The 15 year mortgage won’t fit everyone’s lifestyle, but it sure is worth considering. Don’t look at it as paying a mortgage, because it’s really making an investment in your future.

What The New FICO 8 Score Means To You

2011-02-15T16:30:00.000-08:00

Increasing numbers of lenders are turning to the FICO 8 score released in 2009. The new system offers 15% greater accuracy in predicting repayment. It is gaining the most use in the mortgage and large limit credit sectors. It was quickly adopted as an industry standard among home loan lenders. Even though it is not the official name and is used for other credit, it is often called the FICO 8 Mortgage Score.

What Is the New Fico 8 Score?

The FICO 8 Mortgage Score is a refined version of the old FICO, or regular credit score. By improving the model, it permits a better prediction rate for repaying loans. This increases the security and amount of credit that a lender can offer.

It uses the old FICO score range of 300 to 850. The main adjustment focus on how a few factors affect the score.

Piggybacking:

Many people were using a scheme to artificially boost their credit rating. A friend or relative with a high credit score would add the person with a low score as an authorized user to their credit card. This boosted the lower score by piggybacking it to a well-established, creditworthy account. The new FICO 8 includes ways to distinguish between piggybacking, married couples with different names, and domestic partners to avoid this artificial manipulation of the system.

End Of High Risk Credit Inflation:

Another system manipulation targeted by the FICO 8 Mortgage Score is credit inflation. Under the old scoring system, your score would increase with your credit limits. Consumers could acquire multiple cards with expanding limits over time to artificially boost their score. Many of these people maximized their credit lines, creating huge risks.

To balance out the risk, FICO 8 takes into account how much of the credit available to a customer is being used. Large amounts of credit with a low percentage used will provide a big boost to credit scores. Some critics argue that this worsens credit inflation. Industry experts counter that a person with a lot of credit and very little of it used are most likely to repay debts. On the other hand, someone with maxed out credit cards and a second mortgage is very likely to default, even though they have a large amount of credit.

Improved Payment Histories And Targeting:

One of the most important changes is how the FICO 8 analyzes credit history. Late payments matter a bit less, compared to an overall history of repayment. Under the old system, late payments could seriously lower credit scores. Under FICO 8, the main focus is the rate of repayment. After all, someone who often pays late but always pays completely is much less of a risk than a person that is often timely but defaults on debts.

A related aspect is better targeting of consumers. A person with a poor history but a couple of recent years with better income and payments can actually carry relatively low risk. On the other hand, someone with a good history but overextended credit may be a big risk.

How Does This Affect Foreclosures And Mortgages?

Foreclosure typically causes a credit score drop of around 150 points. This is not caused by the mortgage default alone. Statistically, those experiencing foreclosure will also default on most or all of their other debts as well. This is where the FICO 8 changes can benefit those losing their home to foreclosure.

Due to the way the new system calculates scores, it is more important than ever to stay current on other debts when facing foreclosure. Under the old system, a foreclosure can cause serious negative effects for several years. FICO 8 will allow a recovery of credit score within a few years.

Pay your other debts in a timely fashion and make payment arrangements if you cannot meet your current obligations to avoid further negative reporting. Remember, the FICO 8 Mortgage Score takes into account total payment history. If you show that you are not like the average borrower and the foreclosure was an isolated default, the system will raise your credit score.

How FHA New Guidelines Affect You

2011-02-14T16:45:00.000-08:00

Over the course of the past few years, the Federal House Administration has implemented a number of changes to home loan rules. At first, many observers expected severe rules and difficulties for many home buyers. Thankfully, the new rules and conditions are not as bad as originally considered. They also seem very well-made to improve the housing market for lenders and buyers alike.

These changes help improve the FHA's ability to provide low interest home loans and continue to allow the agency to provide more loans to more people.

End of 2008:

580 was set as the minimum credit score. The down payment help program (Nehemiah) was ended. Down payment minimums were set to 3.5%.

Beginning of 2009:

The minimum credit score was raised again. This new standard was set at 620.

Late Fall 2010:

Further insulating the agency from high risk, the minimum score was raised to 640.

There were three main changes to the standards:

High Mortgage Insurance Standards; Private mortgage insurance, or the mortgage insurance premium, was raised from 1.75% to 2.25%. This causes a slight increase in monthly payments, but it is not considered a burden by industry experts. It is paid along with the loan, spreading out the costs over the loan lifetime.

This was implemented in April of 2010.

Down Payment and FICO Scores; The minimum score standard qualifies a purchaser for the small 3.5% down payment option. Buyers with a lower credit score may still qualify, but will be required to pay 5-10% down on the home. This reduces the risk for the FHA, while leaving low down payment loans available to buyers with a good credit history.

Reduced Seller Closing Offers; Sellers now can only provide half as much towards closing costs. Under the old policy, the person selling the home could provide up to 6% in closing cost assistance. The recent changes only allow a 3% contribution.

Rounding out these new rules, fresh standards were drafted for lender enforcement. Some homeowners will be affected more than others by these changes. Low income purchasers and those with an uneven credit history will be most burdened. However, the average home purchaser benefits greatly from these new policies.

Overall, these changes fulfill FHA's mission to provide low-cost loans and increase homeownership. They reduce the risks of lending and increase available capital. With higher repayment rates, the FHA will be able to offer more loans over the long term.

I Want To Invest In Real estate

2011-02-09T16:46:00.000-08:00

There are key differences between investment property and a second home. Many assume that buying another house for investment purposes is just like purchasing a vacation property for the family. This can lead to a lot of frustration as the process will not meet their expectations. Understanding the differences helps to make the process of moving from personal to investment purchases a bit easier.

A major area of difference is home financing. Each type of property has distinct qualification standards. You may qualify for a second home but not for an investment property. This is caused by the higher risks involved in rentals and investment value. Market conditions, unknown tenants, and other factors cause lenders to see a greater chance of financial problems. Understanding the distinction between lending criteria and why differences exist will help you get through the investment process with less stress.

Investment Properties and Personal Use Homes

Down Payments:

A larger down payment and/or more collateral are required to finance a second home, compared to your primary house. While a loan for your first home may only require a 5 to 10 percent down payment, additional properties may need as much as 25% down. Lenders will usually require more collateral, larger down payment or shorter loan period for investment properties. Remember, the lender is attempting to balance the risks with the potential income from interest.

Interest Rates:

Interest rates usually rise for second and third properties. This is also true for leased and rental properties. Statistically, homeowners with additional property are more likely to default on at least one loan. In addition, properties which are leased or rented out can be subject to a lot of wear, tear, and damage from the temporary residents. The higher interest rate ensures a faster return on the loan for the lender, insulating them from these risks.

Homeowner’s Insurance:

Homeowner’s insurance almost always rises for secondary properties, whether for personal use or investment purposes. With personal use, such as vacation homes, the properties are left unattended and vacant for periods of time. This raises the risk of theft, unnoticed problems, and insufficient property maintenance. For investment properties, there are liability risks and a higher chance of property damage.

Other Factors

There are a few other things unique to rental and investment property that you should keep in mind:

1.A common requirement is the escrow of three months of financial obligations. This includes insurance premiums, loan payments, and taxes.

2.Only 50% to 75% of the expected lease or rental income will be taken into account when applying for a loan. You need to be able to show that you can cover a quarter to one-half of the expected payment without rental income. Documentation supporting the projected income is expected. The best way to get it is to ask the seller about their rental income from the property.

3.If there are no current occupants, the lender may require that you have a qualified lessee or renter lined up for the property. This helps reduce the risk of a loss on vacant property.

There may be other factors considered by the bank or lender for investment properties. However, a good credit rating, reliable income, and substantial down payment are universally required

Have You Considered a 203K Rehab Home

2011-02-08T17:15:00.001-08:00

Many homebuyers bypass a home that requires repairs; those obvious wires sticking out, missing appliances, outdated kitchens and even a hole in the roof probably would turn most homebuyers off. But many of these homes are uncovered gems waiting to be found and rehabbed. It just takes a special type of homebuyer with patience and vision that can see all the possibilities.

There are mortgages available specifically to buy and fix a home. These definitely should be considered if a home is in good condition, but does not meet your goals, i.e. out dated kitchen, flooring, issues with roof, etc. This program allows you to both purchase and repair a home with a single transaction.

In addition to a typical home improvement project for this type of loan package, the 203-k mortgage loan program can be used to convert a one-family dwelling to a multi-family dwelling; perfect if you need to move the in-laws in with you.

You're probably more acquainted with mortgage financing plans that provide permanent financing. That is you pay your closing fees, sign for a home, and deal with the lender on a monthly basis, when you pay your mortgage. The significance of a 203K loan allows the buyer to roll in the costs of repairs to rehabilitate the property into the mortgage loan.

When rehabilitation is involved, the lender requires the home improvements to be finished before the long-term mortgage is made. You really sit down at closing to sign off on 2 loans; a temporary one for construction/rehabbing of the property, then your 15 or 30 year mortgage after all improvements have been completed.

There are 2 FHA 203k loans; the FHA 203k Rehab and the FHA 203k

Streamline. The FHA 203k Rehab enables borrowers to obtain a single mortgage to finance the purchase and the rehabilitation costs of the property. Minimum improvements are $5,000.

The 203k Streamline key points; this loan has many of the same attributes of the 203k Rehab loan, except the Streamline loan has no minimum amount tagged onto repairs. The maximum amount of repairs is limited to $35,000 for major remodeling.

The 203k loan takes an average of 45 days to close; 30 days for minor remodeling projects and 60 days for projects involving major structure remodeling.

The qualification requirements are the same as a typical FHA mortgage loan however, you you'll need to submit a home project plan and budget for the improvements. The only additional item that the borrower needs is enough cash reserved to pay for materials and labor until they are reimbursed through the loan.

With an over-abundance of foreclosed properties that need rehabilitation, the 203K loan package is a perfect opportunity to get more house for less price (as-is market value) and be able to make improvements without borrowing from your personal savings.

Contact an experienced realtor to start looking for those missed gems.

Don't Forget These Tax Deductions

2011-02-07T14:52:00.001-08:00

45 million people use itemized deductions when they file their taxes, totaling almost $1 trillion in combined deductions. About twice as many people only claim standard deductions for a grand total of $500 billion. That means half as many people get twice the deductions and four times as much benefit.

That is quite a difference, but not all of it comes from regular deductions; some is derived from tax credits. Tax credits are often confused with tax breaks and deductions, but they are quite distinct.

1)Deductions subtract from your taxable income.

2)Breaks are reductions in the tax rates paid.

3)Credits are amounts added to your taxes paid balance. Credits provide the biggest benefit.

THE RECENT VEHICLE SALES TAX DEDUCTION

New vehicle purchases can incur a hefty sales tax. On a $20,000 car with a 5% sales tax, that would be $1000 just in taxes! Starting in 2009, sales taxes paid on new vehicle purchases can be deducted on federal taxes. This includes most types of common vehicles including cars, trucks, and motorcycles.

You qualify for the deduction whether or not it is itemized on Schedule A with your tax filing. While the full purchase price and/or cost of financing cannot be deducted, the full amount paid in sales tax is a deduction. There are some limitations involving time frames and income levels, so be sure to check with the latest IRS publications for accurate information.

JOB HUNTING DEDUCTIONS

This is one of the most overlooked deductions and only a small percentage of qualifying people claim it. With the ongoing trend of high unemployment, more individuals qualify for this deduction than ever before. The deduction is available whether or not you get the specific job you were seeking. Any costs directly related to the job search are deductible. This includes, but is not limited to, resume writing services, employment agency fees, transportation costs, job bank access fees, postage, and printing costs.

MILEAGE DEDUCTIONS

There are a large number of mileage deductions available. The two that have the most qualifying taxpayers are medical and charitable travel deductions. Miles traveled between home or work and the doctor's office or hospitals are all deductible at a rate of 24 cents per mile. Travel for the purposes of charity is deductible at a rate of 14 cents per mile. The availability and rate of mileage deductions can vary from year to year, so check the latest IRS publications to find which additional reductions are available to you.

RETIREMENT TAX CREDIT

Various tax incentives exist to promote retirement savings. This includes permitting pretax contributions and breaks for certain types of investment. One of the most valuable options is a tax credit for the initial investment in a retirement plan. As much as half of the first $2000 placed in retirement savings will be returned as a tax credit. Some restrictions and rate formulas apply, so review the most current information from the Internal Revenue Service.

These are just some of the many tax credits and deductions that may be available to you. As you prepare your taxes this year, be sure to check into what you may qualify for.

The Fine Line Between Price And Value

2011-01-27T17:01:00.000-08:00

Understand first of all that there "IS" a difference between price and value. Price is the amount you are asking for the property. Value is buyer perceived, and this perception of value is influenced by many factors such as location, features, condition, comparison to other purchase option, etc. By attending to details that can have a positive impact on the value, sellers can significantly increase their chance of attracting qualified buyers willing to pay the asking price.

Some tips to achieve a positive impact on value are:

The perceived size impacts value, even more so than actual square footage. Open floor plans make a room feel bigger than larger spaces with smaller rooms. Showing property that is furniture free, or at reduced clutter, helps to make the space feel bigger.

Vacancy increases sale-ability. Property is easier to show and easier to sell, and quicker to take possession of when it is vacant at the time it is offered for sale. Evidence of problems to take possession of the property -- such as encroachments, or tenants who won't allow buyer tours -- negatively impact value. Vacancy also helps the buyer walk through the property imagining ownership. Sellers should remove personal trinkets and family pictures as well as being conveniently absent during a buyer tour.

Cosmetics are important:

Fresh paint will always add more value than it costs.

Clean or new carpet/flooring adds more value than it costs.

Landscaping adds more value than it costs. At the very minimum, make the entrance area neat.

If you can, add some colorful flowers and new sod.

Take care of the obvious! The spot on the ceiling from the roof leak takes thousands of dollars from the perceived value and the offer price.

Condition affects value. Do a seller's home inspection to identify and fix the problem BEFORE closing. No point holding up your check a few extra days; plus a failed buyer's inspection could cost you the sale. Buyers will often bargain down your asking price to accommodate for property condition and repairs.

If you can, remodel/update the kitchen and master bathroom. These two areas have a big impact on home buying decisions.

Strategic renovations impact value and your bottom line. Don't spend more money to renovate the place than you can recapture in value on the sales price.

Homeownership Is Still A Great Investment

2011-01-26T16:52:00.000-08:00

Even in today's economy, it's a fact that homeownership remains one of the best investments you can make.

If you're a homeowner, perhaps you identify with budgeting, living paycheck to paycheck. In fact, it's cheaper nowadays to buy a home instead of renting.

Uncle Sam has thrown you an amazing tax shelter that's beyond compare. You may deduct the mortgage interest paid on your loan and deduct the property taxes paid to your state. These deductions are based on you itemizing your deductions on your tax return. And if you are not a homeowner yet, this tax benefit is significant enough to make you look seriously at home ownership. There are of course, exceptions to every deduction. One of the complexities of home ownership tax deductions surrounds points.

Points are one type of fee paid at closing to your lender. If you pay points when you buy your new home, these may be deducted in full in the year of purchase. However, if you refinance your loan, the points must then be deducted over the life of the new loan.

Appreciation:
As a general rule, homes will appreciate about three or five percent a year. Now with our current economic downfall, this obviously isn't the case, but if you wait it out, the real estate market is gonna come back. Homes will begin to appreciate again and this is why it's so important to take advantage of low prices now.

Some years appreciation will be more, some less. The figure will vary from neighborhood to neighborhood, and region to region. You might say five percent may not seem like that much at first but look around at financial institutions and tell me where you can do better?

Say you bought a $250,000 house with a comfortable mortgage. Suppose you put as little as five percent down...that would be an investment of $12,500.

At an appreciation rate of 4% annually, a $250,000 home would increase in value $10,000 during the first year. That means you earned $10,000 with an investment of $12,500. Your annual "return on investment" would be a whopping (80%) eighty percent.

Additionally, you are making mortgage payments and paying property taxes, along with a couple of other costs. And remember those tax deductions? Well, with all the deductibles you're eligible for, the government is essentially subsidizing your home purchase.

Homeownership's Greatest Tax Advantage:
Probably the greatest advantage of home ownership occurs when you decide to sell your home. If you have owned and lived in your personal residence for two out of five years, you can sell the home and not be taxed on a profit up to $250,000 for singles and $500,000 for couples.

As you can see, homeownership has its perks and just about every homeowner receives a tax refund every year. Yes! You actually save money while Uncle Sam hands over a check, just because you bought a home.

Downsize Your Lifestyle To Upgrade Your Life

2011-01-25T17:15:00.001-08:00

Many people are responding to our economic downfall by spending less money. Downsizing in every which way they can. Less has really become "More"; in fact, Less is the new trend.

Cutting back on your spending can easily leave you feeling deprived if you view it in a negative light. But focusing on the fact that you can't afford the lifestyle you'd like right now will only lead to a worse quality of life. The question is what are you willing to change in your life to achieve your goals?

Shifting your focus away from what you wish you had, though, frees you to take a closer look at what you actually do have right now. It's then that you can discover hidden treasures in your situation. Could it be that living with less money could lead to more satisfaction? That's what our family has found. Downsizing our lifestyle has led to a richer life than we ever could have experienced if we'd spent lots of money.

Here are some ways you can downsize your lifestyle to upgrade your life:

Move to a less expensive home. Freedom from the pressures of a large mortgage payment is priceless. The monthly mortgage payment is generally the largest single expense consumers face. It routinely accounts for 30% or more of your gross income. A small home also means less space to have to clean, lower utility bills and property taxes, and fewer repairs to handle. How many of your resources are tied up in your house? If you make the right move, you might be able to trade in your house and use the profit from the sale to purchase your next home in cash.

Eat out less. But the benefits of eating at home aren't just financial. When you make your own meals, you can control what ingredients go into them and prepare food in healthier ways than you'd typically find at restaurants. If restaurant meals are breaking your budget, try eating all your meals at home for a certain period of time and see how much money you have saved.

Eliminate extras. Unnecessary indulgences like fancy coffee shop drinks and high tech gadgets that do what you can do yourself can waste a lot of your hard-earned money. When you let go of them, you learn how to separate what you truly need from what you merely want.

And finally, change the way you think about life and money.

Think about these mind set changes; if it cost money, then do not buy it. Find it for free or do without.

Ask yourself, do I really need it and can I really live without it?

Remember, life is not over when you eliminate a few material possessions.

Buying Unfinished Homes

2011-01-24T16:54:00.000-08:00

Unfinished homes present a great way to save a ton of money and get yourself a new home in the process. If you buy an unfinished home, you can keep your monthly mortgage payment low and also lower your initial investment. You may also be able to buy a larger foundation size as well, which you can easily add on to and save money in the process.

Normally, unfinished starter homes leave the upstairs area unfinished. The question here is just how much equity you want to put into an unfinished area. Before you make a purchase, you should always decide how much money you have to finish what needs to be finished.

If the home you are looking at has plans for a garage, you can save thousands if you decide not to go with the garage; and the best part is – you can get it finished at half of what the builder is charging. On the other hand, if there is another attached room that is planned to go onto the house, you can save just as much if you decide to forgo it. There are always ways that you can save money just by looking at the plans. Unfinished homes may have other planned on additions as well, in which you can save a lot of money just by leaving them out.

This is something that you should always keep in mind. When builders acquire a piece of property that they plan to build a home on, they will do everything they can do to make as much money as possible on their homes. You might be able to get them to agree to some of these ideas, although they probably won’t agree to all of them. Building homes can be a very profitable business - which is why most companies like to build their homes exactly as the plans call for.

As most of us already know, buying an unfinished home provides an excellent way to get into the housing market and get your very own home. Unfinished homes also allow potential buyers the chance to grow into their home along with their family. If you are interested in saving money, you should be sure to talk to the builder. This way, you can go over the plans and decide what doesn’t need to be there.

In most cases you can save a lot of money and still get a home that will provide years and years of memories for yourself and your entire family.

Buying A Home At A Discount

2011-01-20T17:22:00.000-08:00

Real estate is no exception when we talk about how inflation has affected each and every aspect of our life. At first, buying a home was only a matter of selecting your area, surveying places around it and making a decision. Times have changed now and the first thing that you bring under consideration is affordability. Not that you didn't worry about finances back then, but you at least knew you weren't over paying for your property. So the name of the game, when it comes to buying real estate today, is not only to get the best house of your liking but also to get the best financial deal for yourself.

Short Sales:

So what do you do to get a discount while buying your dream home? The first step that you can take in order to find good financial deal on your next house is reviewing Short Sales.
A short sale means a sale that falls short of the amount owed on the mortgage. They happen only when the seller can't come up with the cash to pay off the difference. Most important, though, is that they can happen only when the lender agrees to accept the reduced payoff. However, it doesn't mean the lender will agree to sell to you in all cases.

Lenders aren't in the business of accepting less than they are owed, so few short sales make it to the finish line. The best way to go about it is to hire an agent who has experience with short sales. He knows how to find people who are looking to sell. First, find out if the bank even has a clue that the seller is trying for such a deal; it would be a complete waste of time to try and bargain with the seller just to have the bank refuse the deal.

Foreclosures:

Another way to look for a discounted deal is to look for foreclosures. Everyone has heard about foreclosures and the overwhelming inventory available. Situations like this usually give rise to discounted prices, especially in todays times, because of the large inventory of homes sitting on bank books.

Buyer Beware; this process is lengthy and buying a foreclosed home can be full of pitfalls. If you have this picture in your mind of a well-maintained family home, surrounded by a white picket fence that is owned by an elderly woman who couldn't keep up with mortgage payments, think again. Those types of foreclosures are few and far between. Unless you are a licensed general contractor, bring someone who is highly knowledgeable about construction with you.

Many foreclosed homes need repairs and most have been gutted by squatters looking to sell the best features of the home. Assuming that you've done all your homework and you still want to purchase that foreclosed property, your real estate agent will make an offer to the bank.

Best advice before getting to this point is while seeking that foreclosed home, get your financing complete with pre-approvals. The deal will go a lot smoother if the bank sees that all the foot work has been completed.

Short sales and foreclosures are just two options available to you. And, while they may be challenging deals to put together, they can be a great avenue towards home ownership.

Update on the Region's Home Sales

2011-01-19T16:32:00.000-08:00

Bargain prices and low interest rates helped Southern California home sales surge 20.5% last month over November, but activity lagged far behind that of December 2009.

San Diego based MDA DataQuick said 19,528 homes sold last month in the 6-county area, up from 16,208 sold in October but down 12.5% from the 22,328 sold a year ago.

Sales have increase an average of 12.9% since DataQuick began compiling statistics in 1988, the firm said.

"Ultra-low mortgage rates, coupled with lower prices, gave the market a boost this fall, helping to explain the above-average gain in closings between November and December," DataQuick President John Walsh said. "We will see the potential for sales to perk up this spring if rates stay low and brighter economic news lifts consumer confidence."

The region's median home price increased 0.3% to $290,000 last month from $289,000 in December 2009 and grew 1% from $287,000 in November, stated DataQuick.

In Los Angeles County, homes sales tumbled 14.9%, from 7,679 sold in December 2009 to 6,536 last month. The median price fell 2.7%, from $339,000 to $330,000.

Neighboring Ventura County saw a 15.1% dip in sales, from 896 to 761. Prices remained stagnant, edging up from $289,000 to $290,000.

The firm said the sluggish job market and tight credit conditions were keeping the median from appreciating much over the previous year's prices.

The median was also being tugged down by weak sales of new homes, which reached their lowest level for a December since DataQuick began keeping records.

Note: This article originally provided by The Associated Press

6 Common Mistakes Homebuyers Still Make

2011-01-18T17:10:00.000-08:00

Getting a new home is easy but tricky at times. Many buyers are encountering stumbling blocks en route to their chosen house. This is because they commit minor mistakes along the way that hinders smooth processing. This can be prevented only if you are familiar with these common mistakes.

1. Having no pre-arrangements with the bank for mortgages before making an offer is the most popular mistake. Communicate with a bank to know the price range you are capable of paying and other mortgage details that you need to know.

2. Knowing your exact budget is critical. Most people look around for houses even without the budget in mind. First thing you need to know before finding a home to purchase is how much you can pay for a new home. You can save much time if you trim down your list of houses based on its price; imagine finding that dream home only to find out you wont be approved for the mortgage?

3. Getting unreliable and inexperienced real estate agents is a big no-no. Choose an agent that has the background to back him or her up. Also, consider the real estate companies you are dealing with. Make sure that they have a good standing in terms of the services they are providing.

4. Most people are shopping around within a limited market. You can find homes for sale anywhere such as internet, print ads, and even on TV. You may also want to ask for help from your agent to provide you a list of preferred houses. You can save time if you know what kind of house you are looking for.

5. Purchasing a home long distance without thorough inspection is a mortal mistake. After choosing a home, it is a must to visit it personally so that you can see it in a closer view. Some pictures only show the good angles of the house. It can be very deceiving at times. Check the structure and foundation to ensure safety. Also, look around the neighborhood and get comfortable with it.

6. Buyers tend not to compute the total cost of the house. Other expenses such as home insurance, association dues and even lawyer's fee for proper documentation of the purchase should be considered. We are not talking about coins here. These range from hundreds of dollars to even thousands. You need to prepare your pocket for it.

Buyers are usually not aware of all the details. It is your home and you are responsible for it. You need to know and understand everything about it, from home warranty to insurances and even the history of the house.

Equity Sharing For First Time Home Buyers

2011-01-04T16:17:00.000-08:00

Looking to take advantage of the low interest rates coupled with a healthy inventory of low-priced homes? Are you worried about the down payment requirements? Consider Equity Sharing.

Equity Sharing is a creative approach for those who can afford a monthly mortgage but have not saved up enough for the initial down payment. It is also a way for people to make relatively a low risk investment in real estate which provides wonderful tax benefits.

For example, an equity-sharing arrangement enables parents or another party to contribute all or part of the down payment for the intended occupants; the rules will probably differ depending if you are equity sharing with your parents or an investor.

The investor will be listed on the title and are paid rent for their ownership stake, which can be put toward such expenses as insurance, maintenance, and property taxes that can be deducted from their income taxes.

For an agreed number of years, the first-time homebuyer will live in the home, and keep it up; at the end of the agreed term, the occupier buys out the investor by repaying his contributions plus an agreed percentage of the appreciation. If the occupier doesn't want or can't afford the buyout, the property is sold, each owner gets their contributions, and any profits are shared.

Equity sharing's greatest advantage to a first time homebuyer is to become a homeowner long before he/she could save up money for a down payment. The Investor's greatest advantage is to earn a portion of the home's equity appreciation without paying its expenses...a win-win if the contract terms are agreed upon.

Most Importantly: Consult a Real Estate Attorney

When buying real estate with another person, first time homebuyers need to decide how title will be held, and your decision will determine what is written on the deed to the property.

Usage Rights are very important because they are the most common subjects of shared ownership disputes particularly among groups of friends or relatives.

The donation of funds to purchase the home will determine how much each co-owner will contribute to the purchase of the property and how the future rights and benefits of this ownership will be allocated among the co-owners.

Sure, this arrangement sounds good, especially when a first time homebuyer finds their dream home but remember, no matter how friendly co-owners might be, it is essential to have a formal backup plan in case things don't turn out as planned.

Tips For Renting Out Your Vacation Property

2010-12-21T16:36:00.000-08:00

Many vacation properties can get overshadowed by the big chain hotels but that doesnt mean there isnt a crowd looking for your home. The secret is, let them know whats in store for them and inspire them with all the reasons they shouldnt stay at a hotel.

One of biggest fears these days are picking up the dreaded vampire bug (bed bugs) from public places. Capitalize on this fact while private vacation homes have a chance of becoming infected with these bugs, theres less of a chance since your home is not as exposed as public hotels.

Another feature of Vacation homes is that it becomes more of a secluded getaway with lots more privacy. Guest will enjoy less noise, less stress but still lots of fun.

There are a variety of problems that can be easily overcome when renting out your vacation home;

Lower the price. One big mistake people make is they don't price according to the season. Your vacation home may command top-dollar in the summertime, but fewer winter travelers will mean more hotels and vacation homeowners are competing for the same few customers. Likewise, winter travelers are often more budget-conscious than those who travel in peak season, so price may be an important factor in their decisions.

Team up with local businesses. When you rent out your vacation home, local businesses can benefit from increased business. Call your local restaurants, ski resorts, marina, water parks, amusement parks, movie theaters and arcades for discount or free coupons to add to your vacation package. Tell those businesses how often you have renters and how many people tend to visit per vacation.

Increase and update advertising. Though you may be tempted to cut back on advertising when there's less money coming in from your vacation property, the slow season is the time to ramp marketing efforts up. Find ways to make the property seem more enticing. Emphasize amenities such as a fireplace, Jacuzzi or hot tub. If you have these features, make sure that's front and center in your advertisements because it's something people are looking for. Also, if your property is near attractions, promote that fact.

Know your audience. It's always easier to craft an effective sales pitch when you understand your customer. If you allow dogs, many times you can attract travelers who are having a difficult time finding a vacation home that accepts pets. Large families looking for more of a budget vacation can take advantage of private vacation homes.

When it comes to renting out your vacation home, go the extra mile to create an outstanding experience for the guest, whether its through price cuts or a stocked pantry. It's may mean more work, but it's definitely worth it.

Getting the Most Bang out of that Tax Refund Buck

2010-12-20T17:04:00.000-08:00

Have you been anticipating receiving your tax refund this year? Perhaps you want to save it for another rainy day or year; maybe youve decided to spend it on home improvements. If you are planning to embark on a few home improvements, it's best to know which of them are likely to pay off if you decide to sell your home and which is a waste of money.

A return on your investment should play a part in your home improvement plan. Your ROI tells you how much money you could recoup when you sell your home. Will that minor bathroom remodeling job be a good investment or not? Should you spend the extra money to fix up the kitchen?

There are many factors to consider when making the decision to give your house a face-lift. Location is always a key issue; not only the neighborhood, but which part of the country. Some improvements are popular with buyers regardless of their region, while others seem to be in higher demand in certain areas of the U.S. But more often than not, sellers can get back a substantial percentage of their expenditure for a variety of well-executed improvements.

Keep in mind that spending more doesn't necessarily mean you'll get back a higher percentage later.

Take a look to see how much a home improvement will cost you versus how much you can recoup when selling your home and this is only a rough estimate;

1. A Bathroom remodel job may cost $12,000 to $15,789 for an upscale master bathroom and you may only receive $12,000 on your investment.

2. A major Kitchen remodel may cost you upwards of $20,000 but you may only recoup $12,500 on this investment if you sell your home.

If you're looking to get your money back when you sell, it's a good idea to avoid designs that are very abstract or unusual. Buyers look for a place they can move right into and call their own. When you deviate too far from the values of the everyday modern home buyer, you minimize the pool of potential buyers.

Features that are really customized to your personal taste such as a home theater or wine cellars may not appeal to as wide an audience. Depending on the neighborhood, most buyers may see these fancy add-ons as unnecessary and be unwilling to pay a premium for them, especially in less upscale areas. That's not to say you should not customize your home as you like but when it comes time to sell you shouldn't expect to recoup the money you shelled out.

Homeowners should definitely look around at other houses in the neighborhood to see what is popular. If the average home in your neighborhood has 2.5 baths and your house has 1.5, adding another bathroom could net you a better return than the average when selling.

While updating and renovating your house has personal value to you and something many do to attract more buyers, you should definitely remember that you're not always going to get back what you spend.

Think and choose wisely before spending that tax refund.

When Good Credit Marries Bad Credit

2010-12-15T16:25:00.001-08:00

Each person has their own separate credit report, so you don't have to worry about your spouse' bad credit affecting your record the minute you get married. As long as you apply for a loan on your own, the lender can't check your spouse's credit report, too.

But the crux of the problem in today's financial environment is when purchasing a home. Most people are looking to purchase big homes where two incomes are needed to qualify for the mortgage. There isn't anymore creative financing terms like no-income verifications and sub-prime mortgages that allowed flexible credit terms. When purchasing a home today the borrower needs excellent credit so the spouse with bad credit will need some repair.

If you are able to purchase a home with one income listed then you should think about adding the second spouse name to the deed after the purchase. Title to the house will not be impacted by the mortgage.

However, most people are not aware that in certain states, any mortgage loan that is taken on within a marriage is considered a joint obligation. These nine community property states include: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Community property states include any type of real estate, physical assets and all earnings generated by both spouses while married. Any type of asset that is acquired as a result of a gift or inheritance, or any asset that was owned prior to the marriage is not considered community property.

Cleaning up bad credit is not as difficult as you think; it can be time-consuming and definitely a challenge if you have many negatives on your report but it's possible to clean up your credit within a year or less.

The first misconception that everyone has is the less debt the better; its sort of a catch 22 when it comes to debt and credit. It seems the less debt that you are responsible for the lower your credit score will be. For example, if you have no credit cards, no car notes, no loans for years it can decrease your credit score. However, if you have one credit card and a car note that reports payments made on-time each month; this will increase your score to a favorable number.

It seems so ironic -- a person who has favorable savings and checking accounts with no negative credit trade lines but chooses not to have a credit card and multiple responsibilities that decrease their disposable income are frowned upon.

Another individual who has the car loan, two or three credit cards, a past judgment that is more than 5 years old but paid off and they still have a credit score of 700 with a modest savings account is well-regarded.

Are they more responsible because they handle more debt or is it more responsible to stay clear of debt and save more income?

Well, according to the credit bureau you need good debt to show you can balance responsibilities and companies will have more faith in lending you more money. Go figure that terminology?

No matter what your circumstances are, work together with your spouse to build a credit history that shows that you are responsible and creditworthy.

Are Short Sales a False Sense of Security?

2010-12-14T16:55:00.001-08:00

With the rise of falling home prices, home owners who have run into unforeseen circumstances, like unemployment, medical issues or divorce and can no longer sell their homes for what they owe.

As a result, short sales have become obligatory as opposed to foreclosure. But what becomes of the deficiencies?

After the banks foreclose or you decide to short sell, it's very common now to have large deficiencies with houses not worth the balances owed so banks have began to go after the borrowers and pursue a deficiency judgment.

Are You on the Hook for a Deficiency Judgment?

Whether banks pursue a deficiency judgment against the homeowner depends on many factors, including what state the borrower lives in and whether there's a second mortgage or other liens on the home. But keep in mind, once the bank gets a judgment against you they can pursue you anywhere.

Generally, a mortgage has two parts: a pledge of collateral, represented by the home, and a promise to pay off the loan.
Lenders may release property liens in order to facilitate short sales without releasing borrowers from their obligations to pay under the promissory notes.

Lenders can pursue mortgage deficiencies in most states, however some states are non-recourse and don't allow deficiency judgments. But, even then, if the original loan was refinanced, some or all of it may still be subject to claims. In many cases, extinguishing the debt is often a matter of negotiating with the bank.

There are many lenders willing to release borrowers from further obligations but many borrowers are unaware that they have to ask for this type of release. So, if you are pursuing a short sale, be sure your attorney or realtor asks the bank to release you from any further obligation and get it in writing.

Will they or Wont they file for a Judgment?

Many home owners feel they can finally breathe after a short sale or foreclosure; believing the worst is over. But judgments don't have to be obtained immediately; with so many unfortunate cases lenders are really overwhelmed so its taking them longer to reconcile accounts. They also may wait until they believe the debtors have recovered financially before they swoop in to recover whatever funds they can.

Once the court grants a judgment, the lender may have anywhere up to 10 or 20 years to collect, with interest.

Before agreeing and signing on the dotted line make sure all past and future liabilities are covered in your agreement.

Overcoming Buyers Remorse

2010-12-13T16:29:00.001-08:00

The only way to overcome remorse is through Change;

Many home buyers suffer from buyer's remorse after they complete the closing on their brand new house. This is common not only because it represents a significant change in your life but many people buy with thoughts of grandeur only to succumb to reality after buying the home.

If you're suffering from home buyer's remorse, try to follow these tips to deal with the regret you feel.
Remember why you fell in love in the first place

Oftentimes, home buyer's remorse is a result of new problems you find in a home, so try to remember why you thought it was such a good idea during your first tour. In most cases, your fears are just products of stress and worry, which are making small problems seem like big ones. Take a deep breath and search to overcome before it becomes a bigger headache.

Get to Re-Decorating:

Perhaps you're experiencing home buyer's remorse because your house just doesn't feel like home yet. If you start decorating your house - new paint, new floors, new window treatments, new counter tops - it will start to look like a place in which you want to live. If you don't have the cash to replace things just yet, start putting your own pictures on the walls and knick-knacks on the shelves.

Stop the...Would have, Should have...Thinking

A major pitfall that can cause home buyer's remorse is the continual scouring of the Internet for other, better houses. You can't return the one you just bought, so stop looking at listings on the Internet.

Sure, that other house might have a bigger master bedroom or prettier landscaping, but that isn't the one you chose to buy. You'll sink yourself farther into regret by looking at houses you just can't have.

Home buying is a major decision and every aspect of living in the home should be contemplated. Not just the financial aspects of your new home but think about the impact on your family - will you be happy living in that neighborhood, next to those neighbors, in that environment?

Keep in mind, change happens and you can overcome the feelings you have now. Whatever is bothering you now, you are able to change it for the better.

10 Things You Should Not Do When Buying A Home

2010-12-07T16:05:00.001-08:00

Even when you have great credit, there are things you can do to make lenders think twice about approving your mortgage loan.

Most people focus on the initial credit check when applying for a mortgage loan, but that's only the pre-approval stage; as underwriters scrutinize your history they'll ask for updated financial, employment and credit information. There are plenty of things you should not do until you go to closing;

1.Don't change your job before applying for a home loan. Along with that, now is not the right time to become self-employed or quit your job. You want to show lenders stability, which means youll be less likely to default on the loan.

2.Don't change banks; you want your history to show stability.

3.Don't buy a car or truck or any other form of transportation that you have to finance. Buying one increases your debt-to-income ratio and that's something loan officers don't want to see

4.Don't buy furniture on credit before buying your house. Like financing a car, charging big-ticket items increases your debt-to-income ratio and now is not the time.

5.Don't be late on your credit card payments or charge excessively. You need a track record of responsibility and show that you can manage your money.

6.Don't make large deposits into your bank accounts. Lenders like the money that will be your down payment to be sitting in your account for at least two months, what they call, seasoning;so that the funds don't just appear out of the air.

7.Don't co-sign a loan for anyone. Even if you're not the one making the payments on that loan, it increases your debt-to-income ratio.

8.Don't have inquiries made into your credit. Looking for new credit translates into higher risk for lenders. If your inquiries are related to your mortgage search, it usually doesn't affect your credit score because the assumption is youre rate shopping. But opening credit accounts within a short period of time represents some risk and your credit could take a hit. It's probably not a huge factor in your calculating your ability to repay a loan but why take a chance at this juncture?

9.Don't lie on your loan application. Sounds simple, right? But dont leave out any debts or liabilities you have or fudge your income.

10.Don't spend your money savings meant for closing costs. Part of the price of financing a loan is the closing costs and youll likely have some responsibility for paying them. Make sure you have enough for your share of the closing obligations.

It may be tempting to go shopping for wants and a few needs, but wait it out until the underwriting department has approved your loan application and you get the keys to your new home.

Does Your 2011 New Years Resolutions Include Your Finances?

2010-12-06T16:37:00.000-08:00

Many of us have the urge each year to seize control of our financial house but we really don't know where to start.

You know, those well intended New Year Resolutions that start off with a bang and fizzle out a few weeks later?

Well if you're finally fed up and ready to say,"the buck stops here"; then here are some critical steps to help you:

1. ATTACK AND PRIORTIZE YOUR SPENDING

Budgets are not your enemy! To rein in spending, follow these tips; for a month, write down every last penny you fork over, so you can figure out where the leak is. Then cut out those items you want, as opposed to truly need. Also, pay cash for almost everything, because using credit cards becomes so painless in the beginning but it can really hurt when you get the bill; yes, it's easy to rack up huge bills.

2. START SAVING EARLY

Consider this scenario; if you begin saving at age 25 and contribute $2,000 a year you'll end up with more than $315,000 in savings by age 65.

3. DIVERSIFY, DIVERSIFY, DIVERSIFY

Unless you can somehow read the future, you should probably hedge your bets and spread your wealth among numerous asset classes. That way, if one area tanks--the stock market, bonds, or real estate--you won't be wiped out, and the other sectors will mitigate your losses. Younger investors are content with a healthy percentage of higher-risk equities, because they can weather any temporary storms. Those closer to retirement tend to lean more toward safer bonds or cash.

4. STOP BUILDING DEBT

Admit it; you haven't done this very well; new cars, consistent weekend entertainment, clothing and more; sounds like splurging on all wants and very little needs. Cut out the things you really don't need.

5. PREPARE FOR EMERGENCIES AND BUILD UP SAVINGS

Building your emergency fund as well as long-term savings is a good plan to help you prepare for the future. You never know what might happen. And what would happen if you suffered a job loss? Millions of jobs have already been lost, and more are likely to be lost so, what is your back-up plan?

So, if you're still thinking about your upcoming New Year Resolutions, consider taking control and changing your financial future for the better.

The Value of Your Front Door

2010-12-03T16:44:00.000-08:00

Many homeowners invest a great deal of their time and money remodeling the interior of their home, keeping it repaired and up to date. A little time and attention spent on the outside of your home is also a good investment and a source of pride for many owners. You don't necessarily have to spend a lot of money to make the outside of your home look appealing; sometimes all it takes is a little time and effort.

The next time you're near the street, look at your house as if you were a stranger. Start with the yard; is it tidy and mowed regularly? Is the landscaping pleasing to the eye, and are the trees and bushes trimmed neatly? If so, you're doing a good job making your home a pleasing addition to the neighborhood.

Consider personalizing your home by planting your favorite flowers in strategic locations. Consider flowers of different colors and heights, mixing greenery and blooming plants to make the biggest impact.

Quite possibly the one most important feature viewed from the outside of any house is the front door and porch. The front porch provides the first impression to those who visit. Keep the porch clean and personalize the area with a potted plant or a seasonal wreath. Doors can be easily updated and repaired without being replaced, and it's well worth your time. Storm and entry doors should be clean, and torn screens should be replaced. Hinges should be clean and free of squeaks, and the door should swing smoothly. The elements of the weather will make any door dull and lifeless; regular cleaning and painting will restore its beauty. Consider using an accent color to provide even more appeal. You can update a door by replacing older door knobs with newer, stylish hardware. In less than one day, you can change the appearance of your home by spending a little time right outside your front door.

Sensible Living While Trimming the Fat

2010-12-02T16:27:00.000-08:00

Not long ago, the idea of living well generally meant living large or, at least, as large as you could afford. The nations economic upheaval has changed priorities for many home owners and buyers, who are still focused on living comfortably but perhaps more prudently and efficiently than before.

So how do you continue to live well but live on less?

Slash and Stretch where necessary:

1.Give Up the Bottle and Introduce a Faucet Filter. Kill the bottled water and instead purchase a filter that can be installed on your kitchen sink. Reports tell us that most bottled water is not as sanitized as you would think you'll enjoy the same benefits from filtered tap water.

2.Cut your trips to cleaners in half. Most sweaters can go in the delicate cycle with some Woolite and most silks can be hand-washed and hung to dry.

3.Stop ordering movies off your cable channel, i.e. pay-per-view. Did you know that it costs more to order a movie from your cable provider than it cost to rent at your local video chain these days? There's an automated video vendor called Red Box and they only charge $1 per movie, per night. You can order 4 or 5 movies from Red Box for the same price as one movie on pay-per-view.

4.Re-think this summer's vacation. Put that Caribbean vacation on hold and take a road trip. You'll probably save 40%-60% and still enjoy your family time together.

5.Stay Away from the ATM. We tend to run to the ATM several times per week that adds up to over $20. Fees go to your institution for using someone elses ATM machine as well as the third-party machine you're using. At a combined rate of approximately $5 to $6 per transaction you can see just how much you may save by making one trip and obtaining enough to last all week.

6.Perhaps it's time to look at your auto and property insurance. Many times parents forget to call up their auto insurance agent to see if any deductions are available for teen drivers. Many insurance vendors have programs for first time drivers who complete defensive driving programs or after 6 months to 1 year of hazard-free driving. It never hurts to ask for discounts.

When you think about how much you spend each week and each month you can see everyone has some sort of money leak that needs to be plugged. The more we educate and learn how to rely on ourselves to overcome the more money we hold on to and the less debt we incur.

Trust Your Agent

2010-12-01T16:15:00.000-08:00

The single most important factor to consider when selling your home is the price tag. I'm sure you have a selling price in mind but is the price tied to an emotional value or have you made an educated decision? Perhaps you should leave the pricing to the professionals.

Why should you trust your real estate agent when selling a home?

Well, a real estate agent has access to information not available publicly that can help in pricing the home or determining if the asking price is fair. Agents have access to proprietary information, only shared by real estate agents.

This proprietary information includes the actual sales price of each home sold, not just the listing price. Additionally, the MLS information will include the number of days a home was on the market prior to closing. Both pieces of information are valuable in knowing how to market your home or evaluate the price.

Comparable pricing is still only one piece of the puzzle; there are other criterions a real estate agent will consider before settling on a fair market price.

Real estate agents also pay attention to neighborhood dividing lines and physical barriers such as major streets and freeways. You could live across the street from identical homes and the price could still vary by $50,000.

Realtors will compare similar square footage, within 10% up or down from your property and similar ages. One neighborhood might consist of homes built in the 1970s next door to another area of construction from the 1990s; values between the two will absolutely differ.

Pricing is also adjusted for lot size variances, configuration and amenities and upgrades.

These are all things a novice home seller would never consider. A real estate agent is trained to use part art and part science before settling on a fair market value of your homes worth.
Most of you will want a pie-in-the-sky windfall that includes every bit of money you put into your home. However, keep in mind, your feelings are more emotional than objective.

Pinpointing the fair market value will make a significant impact on the sale of your home. It could mean the difference upon a quick sale or hanging on for months waiting for a buyer.

In the end, trusting your real estate agent is crucial to getting your home sold faster and efficiently.

Can't Sell Yet?...Rent It Out

2010-11-30T16:38:00.000-08:00

For many people who cannot or don't want to sell their home in this depressed market, renting it out can be a practical option.

Many homeowners fail to get a bid that they're willing to accept so what do you do when you just can't afford the mortgage? If you're one of the many folks who are in this situation, you look into renting your home -- it can lessen the financial burden, and you might be able to turn a small profit.

Pros and cons of renting out your home include:

Pros
You can keep your property to sell later at a better price
The rental income covers mortgage, taxes, insurance, etc
The tax breaks offset rent or other income

Cons
You are the landlord
Tenants may damage your property
Could be taxed on gains if you later sell

But consider the tax breaks you can get from renting out your home. You can deduct pretty much any out-of-pocket expenses related to owning and managing your property when you rent it.

This includes deducting your mortgage interest payments, insurance, property taxes, maintenance, repairs, cleaning services and even the cost of travel and local transportation expenses incurred in the maintenance and management of the property and the collection of rent.

Then, there is the other deduction, called depreciation. This is the portion of the property value you can take as a deduction each year.

And the really good news is the amount by which rental expenses exceed rental income is a tax deduction that can be used to offset up to $25,000 of other income, including salary. This juicy tax break is available as long as your adjusted gross income is $100,000 per year or less (this applies to single filers as well as married individuals). For those with income above $100,000 this tax break begins to be phased out and is phased out completely above $150,000.

Keep in mind, renting a home will come with headaches and problems. You'll still need to maintain the property or pay someone else to do it for you. You'll also need to check with your home owners insurance company to make sure you are still covered for damages while renting your home. If not, then you'll need to revise or change your coverage.

Lastly, look to the tax benefits to sweeten your financial results and when the rental payments start to fall short of your out-of-pocket costs, It's time to sell.

Voting for HOA Board Members

2010-11-29T17:19:00.000-08:00

Why do so many homeowners have issues with their home owner association and board members? Probably because you're voting in the wrong people who don't have a clue what your community needs.

Homeowner associations are designed to be representative democracies governed by a board of directors elected by the members. Electing directors to the board that can thoughtfully govern is extremely important. To accomplish this, elections must be carefully planned with the candidates thoroughly researched, not hatched at the last minute.

Here are important components of a successful election process:

Find Worthy Candidates. When seeking nominations, a job description should be prepared so potential candidates know what is expected of them. Some refuse to run because they fear the unknown or an open-ended commitment. The director job and term of office can easily be summarized in a paragraph as can the descriptions of officer jobs (president, treasurer and secretary). Take the time to make sure all potential candidates understand and commit to fulfilling the job description by informing them of expectations in advance.

Candidates are identified a number of ways:

1. By a Nominating Committee. The board can appoint a Nominating Committee which can identify, interview and recommend certain individuals for election. While the Nominating Committee's recommendations are worth considering, any member in good standing is still entitled to run for office even if not recommended by the Committee.

2. Nominated by Self or Others. Any member may nominate themselves or be nominated by another member. It's best to do this as soon as the nomination process begins, far in advance of the annual meeting, so the name and credentials can be known to all members. Since it is common for some members not to attend the meeting and to provide a proxy to someone that does, if a candidate is not known in advance, those not attending the meeting will not have the ability to support that candidate.

3. Nominated at the Annual Meeting. Nominations are usually accepted from the floor at the annual meeting. Unfortunately, this option fails to inform members who have not attended the meeting; it is often difficult to get elected when nominated from the floor unless there are not enough candidates to fill vacancies.

4. Write-in Candidate. Writing someone's name on a ballot does not ensure that person is actually qualified for the job or interested in running unless the person was nominated from the floor.

Candidate Qualifications. Candidates should present their qualifications and platforms to the members in writing. This can be done door to door, by email, by letter, in the HOA newsletter, by the HOA website and at the annual meeting where the candidates can also answer questions posed by owners. Since some members may not be able to attend the meeting, circulating candidate qualifications before the meeting is very important.

It is definitely in the community's best interest to identify candidates who have experience that will benefit the HOA such as:

-Having an organized president is essential. Seek those that are comfortable in that role. The president should also have experience in dealing with different personalities.

-Having a treasurer who regularly works with financial matters like a bookkeeper or CPA.

-Having a secretary who understands or can learn the art of minute taking.

-Having directors that are available and committed to attend all board meetings. This requirement cannot be understated. If board meetings fail to achieve a quorum or directors, official business cannot be done.

Good board members act to protect the interests of all members. Handle the candidate selection process carefully by seeking out the best candidates available. When it comes to board elections, rather than expect a train wreck, elect the right person for the job!

Fixed vs. Variable Interest Rates

2010-11-23T16:26:00.000-08:00

The most confusing of all the steps in buying a home is probably deciding whether to choose a fixed or variable interest rate mortgage. Some lenders attract borrowers into variable interest rate plans with special offers that last for just 2-5 years. So, how do you decide between these two?

Variable Rate

Lenders and banks base their variable rates on indexes; for example, prime rate, treasury bills and Federal Reserve discount rate. To this figure a percentage or two is either added (which is most common) or deducted as a margin or points are charged. The net of these is charged as interest to you. This prime rate varies on a daily basis up or down - taking your interest rate with it.

Fixed Rate

Some buyers prefer the stability and predictability of a fixed rate to a variable interest rate, even if it's just a percentage or two more. The Truth in Lending Act requires that the rise in fixed rates be communicated to borrowers at least 15 days in advance.

However, once the special offer ends on the variable interest rate mortgage, borrowers usually forget to (or can't) refinance or move their mortgages and end up paying high interest rates. Variable rate mortgages are advantageous only when interest rates are low; however,these rates could overtake the fixed rate and you could end up paying even more that you originally planned.

Townhouse or Single Family Home?

2010-11-22T15:49:00.000-08:00

Buying a home for the first time is riddled with so many issues: planning, searching and talking to real estate agents, banks and lenders. There is another aspect of the utmost importance that you may want to consider - deciding between purchasing a townhouse or a single family home.

Townhouse:

Townhouses today share common dividing walls and are built very stylishly. Condominiums are sometimes called townhouses. In an urban setting, townhouses are very much in demand and now identify with wealth. In rural areas, they are very affordable and so they are the first choice of low-income families. Townhouses provide an opportunity to live in a community with peace and security. Common yard and other amenities are shared, as are maintenance expenses.

Single Family Home:

A single family home is a separate dwelling that is neither attached to nor share any common walls with another home. Built over a large area for a garden and backyard, they are a bit more expensive. A rarity nowadays in city centers, single family homes are commonplace in suburbs. They offer freedom, are stylish and you can decorate them to your liking.

Decision making:

You should base your decision primarily on financial factors. If your credit (FICO) score is not excellent, and you dont have much money for a down payment, you can opt for a townhouse in a suburban setting. This will help you save on monthly payments. Take care to check for any restrictions and regulations of townhouse associations. Some of them have lots of restrictions such as not allowing pets and small children to live in the townhouse community.

There are maintenance issues you also need to look into. Though the expenses are shared in a townhouse community, common walls and water supplies create maintenance problems at times. Often, what maintenance issue affects one townhouse will also create the same problem in the adjacent one.

Townhouses and condos are selling very well despite their shortcomings. Buyers preferred townhouses over single family home in the last couple of years across the country. Compromising on shortcomings is a small price to pay considering the savings you could make on your mortgage payments.

The Secret Weapon to Competing in a Renter’s Market

2010-11-10T17:00:00.001-08:00

There’s an abundance of rentals and competition on every block so how do you make your home irresistible and market-ready? Comps and Extras speak volumes to those trying to get more for their money.

Apartment buildings do it; Commercial landlords are doing it; so why not follow suit and compete on the same level?

The secret weapon to renting out your home among the masses is to show it like it’s the last of its kind. Show prospective tenants all they can get if they were to rent out your home.

People are looking for value; they want to live like royalty while remaining within their budget but how many of us actually can find a place that luxurious with all the bells and whistles? As a landlord you must think outside the box to entice renters.

1.Less “stuff” makes a home seem roomier. Most homeowners believe a home that looks lived in will rent out quicker but that’s just the opposite. Homes that are empty allow prospective clients to visualize where their furniture and mementos can be placed. Empty fosters imagination. All you need is a good paint job and a clean bright home that welcomes you in.

2.Offer more than the landlord down the street; many landlords compare and then decide to lower their price to meet demand and while that may be smart it should be the last option. How about offering free cable with the monthly rent? You can negotiate a package deal with your cable company and offer the most basic package perhaps with 1 premium channel; that may run you $30 per month that can be integrated into the rent. How about free internet? Again, you can get a package deal from most vendors.

3.If you live near a community center with a fitness club think about throwing in a membership and it’s not as expensive as you think. Most community centers offer a monthly or 3 month package deal that may run you $50 for 3 months. You could offer prospective tenants a 6 month deal.

4.If your rental home is near a golf course a great enticement is a membership towards weekend golfing.

5.Think about offering maid service; call around to compare services and prices and perhaps offer a once-a-month service that’s included in the rent.

6.Offer military veterans a special – a lower monthly rent or smaller security deposit.

7.Offer uniformed police a deduction in rent for a longer lease.

You can always think of other services to offer that compliment your rental property. Finding renters is not difficult in this market but you must sell your property and let clients see all the reasons they should choose you over the rental next door.

The Allure of Walkable Neighborhoods

2010-11-09T17:05:00.001-08:00

In suburbia there are rows and rows of little white identical houses and neat cul-de-sacs surrounded by grass and space in complete isolation. For many this sounds like a dream come true and the complete opposite from the concrete cityscapes but for other residents this type of planned development becomes a liability for social, economic and sustainable living.

More and more urban planners are dedicating new approaches to functionality, sustainability and family friendly Walkable Neighborhoods. The inviting character of any accommodating neighborhood impacts every resident in numerous ways.

Considering today’s common residential concerns choosing a walkable neighborhood can be advantageous to your waistline and your wallet.

Just think – a neighborhood with multiple destinations including clusters of grocery stores, banks, family parks, schools, daycare centers, pedestrian and pet trails, bus stops and all pertinent avenues to foster mixed-used development and less costs. How about less reasons to start up the car, go get gas and begin your lengthy ride to your next destination. These communities give consumers a wide range of choices including a more robust and diverse daily life.

Many reports that have been developed on the science and art of walkable neighborhoods echo the same sentiment; healthier lifestyles coincide with mixed-use communities. More parents will walk their children to school, spend less, economize and use public transportation more.

The benefit of nearby destinations encourages residents out of the home to interact with neighbors thus there’s a decrease of crime, a heightened awareness of whom is living in your neighborhood and a direct correlation to the quality of longer life for seniors.

Walkable neighborhoods are nothing new. Our parents sent us to the neighborhood store to pick up some sugar, eggs and milk as we passed by our neighbors chatting away on their front porch. Then along came the challenges of traffic, crime, more personal property full of grass and less sidewalks and there went the decline of our walkable communities. But these characteristics are becoming the newest trend once again.

The attractiveness of convenience is appealing to all age and socio-economic groups.

• Streetscaping for schools provide safer walkways with maximum sight distances.
• Roadways engineered with newer designs provide better designations for speed limits, intersections and raised crossings.
• Calmer vehicular traffic with safe routes for children, seniors, bicycling and walking.

• Eliminate car crashes and the potential of vehicle conflicts by introducing longer driveways, wider sidewalks and drop-off points.

• The introduction of more ramps, alternative curbs and heights and lower signals at intersections to accommodate disabled adults.

Every city in every state has a walkable neighborhood and as more developers embrace the thought of providing much more than just “another white picket fence” home buyers are embracing the thought of active living in functional communities.

Getting Past The Headlines

2010-11-08T17:00:00.000-08:00

Surprisingly enough, in a time when the market seems unfavorable to many, it’s never been a better time for people to buy a home.

1. Interest rates are at all time lows. Currently for a 30 year fixed rate mortgage the average rate is approximately 4.375%. Rates do go up and down on a daily basis so don't be discouraged because one day they may be up and the next day they could be down. If you were to purchase a $150,000 home at a rate of 4.375%, 30 year mortgage and 5% down your monthly principal & interest payment would only be $711.48 (remember you need to factor in property taxes & insurance & PMI to get a true monthly payment). That is a great payment amount and many rental properties cost more than that each month.

2. You are able to save on taxes. The way the current tax structure is designed you are able to deduct your mortgage interest and property taxes. You can't do that while renting.

3. You gain an investment and equity. Each month when a mortgage payment is made part of that payment is for the principal balance. This means you own the property and can do almost anything to it instead of having to deal with a landlord. Also, that principal balance you are paying each month is equity. Over the long term home prices do appreciate (more than the stock market) which creates additional equity in your home.

4. New homes are energy efficient due to all of the code changes across the country homes built today are much more energy efficient and more up to date technologically (energy star appliances, higher efficiency furnaces and water heaters, high insulation values and more) than even 5 years ago. This means lower utility bills and costs for you.

5. New homes have more modern features today and offer a wide variety of floor plans and choices. Some of which include open floor plans, universal designs, home offices, egress windows making it easier to finish basements, flex space, low maintenance, innovative materials and construction techniques.

6. Builders of homes and housing complexes are offering bigger discounts on newer properties simply because people are buying less these days than before. These are the opportunities that you need to look out for because it may very well allow you to be a homeowner sooner

Don't be afraid to take advantage of the buyer's market that currently exists. After all, the current state of our economy and housing market benefits buyers and negotiating properly can mean a bigger difference of thousands of dollars in savings on a home.

Selling During The Holidays

2010-11-05T16:06:00.001-07:00

Appeal! Giving your property that extra appeal will undoubtedly entice the masses. Holidays make buyers more emotional than usual, so use it to your advantage.

Buyers are attracted by the appearance of your property and when they inspect it, they are influenced by its atmosphere. The right appearance outside, followed by the right mood inside, gives you the best chance to get the highest price, fast.
You rarely need to spend thousands of dollars in renovations or repairs to make your property attractive. All you have to do is pay attention to obvious points, all of which can make a big difference to your price.

Remember the emotional aspect of buying a home? You had to picture yourself in the kitchen, the family room and cuddling up in the bedroom. Well, you have to create that atmosphere for potential buyers.

Buying a home is emotional. The feeling of a home drives the price tag. Their feelings will be the main reason they accept or reject your property.

The word ‘love’ is common with home-buying – and even with land, when buyers report loving the location. Buyers often say, “I fell in love with it as soon as I saw it and I pictured myself in the home, that’s why we bought it”. So make sure you present your property at its best. Remove or fix anything that might ‘turn-off’ the buyers.

First Impressions:

We are attracted to homes the same way we are attracted to people.

The first thing we notice is the outside. If the property is clean and neat and welcoming, we are interested. If it is scruffy or dirty, we are turned off.

To make your home look its best, attention to details is crucial. When you live in a property, you can overlook its little faults. It is now time to have a fresh look.

Try to judge your property by the standards of the buyers, not by your standards – try to see it through strangers’ eyes. The challenge is to make your property as attractive as possible without spending too much.

The Half-Way Point:

When buyers enter your property they should immediately feel at home. The inside atmosphere should be warm and appealing. A home should look and feel happily lived-in. Make the atmosphere natural and relaxed, but not gimmicky.

Remember, home truly is ‘where the heart is’ and anything that increases the emotional feeling of comfort is something we all love. Genuine appeal is what wins the buyers.

Important Factors Sellers Have to Consider

2010-11-02T16:28:00.000-07:00

There are some important factors to keep in mind when putting your house on the market. A thorough understanding of these issues is necessary so that you can act as an informed seller.

1. Understand the Market

It is fundamental that you are aware of the price ranges in the immediate vicinity and surrounding areas and neighborhoods. Conduct your research on the town and state that you are selling in, especially in your neighborhood. Determine what sets it apart from other communities. As with any commodity, the quality of the market research is the primary consideration of success.

Ask your banker, neighbor or friends regarding the current housing market for valuable tips and information regarding your particular neighborhood. Check up on internet property listings located near your neighborhood in order to get a general pulse of the market specific to your area.

2. Timing Counts!

Proper timing, coupled with knowledge of current conditions, is the most critical factor to consider when dealing in real estate market. The quicker you need to sell your house, the less flexible you can afford to be, because you do not have the luxury of time to wait for a prospective buyer who would agree to your asking price. On the other hand, if you have all the time in the world, you can simply sit back, relax and wait for perfect buyer to come along.

3. Cleanliness is Important

All things being equal, almost all houses have the same basic amenities. In the real estate market however, the appearance of a well kept home invariably adds value and enables a house to be sold quickly and at a considerably higher profit margin.

Working With A Buyer's Agent

2010-11-01T16:08:00.000-07:00

It is not entirely untrue that real estate agents invariably represent sellers. Agents owe their loyalty to the sellers they represent when they work with you as a buyer. It wasn't too long ago that buyers worked with these agents only. Then why was there a need for a buyer's agent?

If you are buying a home, you need to be represented by an exclusive buyer's agent to safeguard against certain things, such as a seller's agent who is loyal only to the seller. In contrast, a buyer's agent will be loyal to you, protecting only your interests during the real estate transaction.

Duties of A Buyer's Agent:

Your buyer's agent will make every effort to locate a home that suits your requirements at the lowest possible price. Since he is loyal to you, your agent will disclose all that he/she knows about the property that could benefit you, or prevent you from taking a loss during the transaction. Information such as the reason for selling the property, concessions the seller would make, and all conversations your agent has had with the seller will be disclosed to you. Information like this, however small it may seem, could potentially promote your interests as a buyer.

Some other duties of a Buyer's Agent:

1. Make a sincere and reasonable effort to find a home suitable for you
2. Follow all lawful instructions you may give
3. Should develop a CMA (Comparative Market Analysis) for you
4. Advise you on the property value
5. Handle all monies and keep records of all transactions

Hiring a Buyer's Agent To Work For You:

An agreement hiring a buyer's agent to represent you becomes necessary from the time you decide to buy a home. When you sign a contract with a buyer's agent, make sure that it clearly states both the agent's and your duties and obligations along with any fees charged to you, and how they will be paid. Typically, the buyer's agent is paid by the seller in the form of a commission.

Your Selling Price Must Be Realistic

2010-10-29T16:25:00.000-07:00

When you are thinking about selling your house, don't set an unrealistic price. In my experience as a real estate agent, clients who were asking a very high price ended up with their house staying in the market for a very long time. This is true also for people who are selling their houses without a real estate agent, such as For Sale By Owner.

There are times when a real estate agent advises you to lower the price. The reason behind it is that they have knowledge of the market trends, access to accurate sales data, and know the realistic price ranges of the area at that point in time. Therefore, you would be well advised to rely on your agent's word and trust her recommendation, even if it is not exactly what you would have liked to hear.

If you are still unsure, you can also confirm the suggested selling price by checking the recently sold houses in your community (called "comparable sales," or "comps" for short). The bottom line is that the selling price of your house must be a realistic one if it is to have any chance of selling in this market.

Tax Planning

2010-10-28T16:20:00.001-07:00

As soon as you have sold your property, you will have to determine if you have to pay taxes on your sales income!

The government has set certain criteria and requirements that you have to meet so that you can leave out a sizeable amount of your profit from taxes if the home you sold is your primary residence. If you meet the eligibility requirements, chances are may not have to pay taxes on your sales proceeds.

The Taxpayers Relief Act of 1997 specifically states that you do not have to pay taxes up to $250,000 per person (or $500,000 for a married couple filing jointly) on the sale of a primary residence. For example, let us say that the capital gain from the sale of your house is $300,000. If you are single (or divorced), the first $250,000 of the amount is exempt from tax; however, you have to pay applicable taxes on the remaining $50,000.

On the other hand, a married couple who file their income tax jointly would be exempt from paying taxes since their total net is lower than the $500,000 limit for married couples. For this rule to be applicable to you, you must have lived in your primary residence (the house that you sold) for a period of at least two years. There is no limit to the number of times you may claim this exclusion when selling your home and the law does not require you to invest this money into buying another home. You can spend the money as you see fit!

This tax exclusion is conditional on whether or not the house you are selling qualifies as your principal residence. To qualify as your principal residence it must be the house where you spend the majority of your time.

Get a Home Inspection Before You Buy

2010-10-27T15:35:00.000-07:00

Your home investment is a big deal in your life - probably the biggest ever - and it is a decision that you must undertake wisely. Just remember that your real estate agent is on your side and can be a great resource during your transaction.

You will receive lots of advice (which you can use or not, of course), and you can ask questions about anything that you come up with. Most real estate agents advise their clients to pay for a home inspection before they get close to finalizing a deal or as a condition of an offer on the property they are interested in.

After a thorough and professional examination, the home inspector is going to give you a report on the condition of the house. This report is extremely important, since there might be conditions which were not obvious, or which you might have simply overlooked. Believe it or not, even buyers of brand new homes should invest in a home inspection. This can help you get issues resolved even before you have moved into the property.

After home inspection, you should know the issues related to that property. Knowing those issues beforehand can become a tool to help form your offer and negotiate to your advantage with the sellers.

DO YOU OWN THE FORECLOSURE YOU BOUGHT!

2010-10-25T14:59:00.001-07:00

Thirty one percent of all homes purchased in the first quarter of 2010 were foreclosures, over the twenty nine percent for all of 2009. Buyers that have purchased a property in the past few years may wonder if they really own the foreclosure they purchased. After all, if the home was inadequately handled, the previous owners may just have a lawsuit ready to file against the lender and the attorneys that dealt with the foreclosed property. The advice from the legal side admits to such purchasers loosing there homes or could be liable for financial compensation to the buyer foreclosed property . Attorney Jonas Jacobson comments, "The biggest protection is the 'Bona fide purchaser' law that protects buyers from getting in trouble if they could not have known there was a problem with their purchase" Due to foreclosure paperwork mistakes, there is little danger of homeowners losing homes" says Steven Horne, an attorney and president. He also states there is a small chance that a homeowner can and may be involved in a lawsuit concerning there foreclosure.

The fear for buyers is minimal, yet there is an importance when it comes to protecting yourself with the purchase of a foreclosure. According to attorney Joseph Gentile, a wrongful foreclosure is the perfect example of why home buyers should buy owner's title insurance, which directly protects the owners in a title dispute. Owner's title insurance protects from any defect in the title. Gentile explains, " If a judge determines the foreclosure was not valid, the title company would have to work out the problem, not the homeowner" Homeowners should always know there title insurance status. Gentile recommends purchasers to check for the title insurance policy, especially if you have bought your foreclosure in the last few years. You still have the option of purchasing owners title insurance now, even on the property you previously purchased. Jacobson recommends homeowners review their settlement documents and contact their settlement attorney for reassurance.

Gentile also comments on the future sale of the home, " It is possible when the home is sold, a new title insurance policy would be more difficult to obtain." With the growing amount of foreclosures, the title companies will likely find a way to accommodate insurance in the future

Competing With Short Sales and Bank Owned Properties

2010-10-19T17:18:00.000-07:00

It is no secret that the home selling market is flooded with short sales and bank owned homes, so the question is how to compete with these homes when it comes time to sell your home.

Yes, it is a buyer’s market as some might say but the need or desire to sell your home may still be inevitable.

If you are in this situation then you need to understand your area and the competition. Do you need to price your home the same as a short sale home or a bank owned home? The answer is not likely.

First of all most bank owned homes are in need of much TLC and not necessarily a good comparison to yours. Short sales take so long and are not only in disrepair but the wait as well as possible rejection by the bank often times makes many buyers not willing to deal with these homes. While waiting on the bank’s response just imagine how many homes the buyer will miss out on.

This brings us to homes like yours that is a mainstream sale! Mainstream being an operative word here, basically, not a short sale or bank owned home.

Most home buyers today are looking for mainstream homes for many reasons. The obvious wait time and frustration in short sales has driven home buyers away from dealing with this type of sale.

The competition with cash buyers and investors on well maintained bank owned homes finds most mainstream buyers in an unlikely position to obtain the home.

Buyers have realized that a normal sale in which they can make a reasonable offer, get a response in a timely manner, have an inspection and actually ask for repairs to be done and expect to get the home in good condition is well worth it.

Competing with short sale homes and bank owned homes aren’t that difficult. Real estate agents are on top of the market and will know your competition and how well things are selling for in your area. Be reasonable when it comes to pricing because you still need to appraise when it comes down to it. Obviously, making your home look nicer than most of the competition should be the easy part; let your pride in your home show. Take the advice from your seasoned agent on how to stage your home.
Do not get wrapped up in the fact that you think your home is worth more than what it is likely to sell in this market or you will waste a lot of time with little to no showings. You need traffic, traffic brings potential buyers.

Make sure your home has several shots or pictures of areas in and around your property that makes a buyer want to see more! Neutral tones and less furniture and belongings make your home feel more open and spacious.

You can price your home higher than your competition of short sales and bank owned - just not so far out of reach that you are not going to get potential buyers interested in your home. Homes of all price ranges are selling in this market and yours can too.

Believe it or not, if you and your agent have done a good job, you are likely to sell your home very quickly in a market like this!

The Importance Of Property Management

2010-10-14T17:22:00.000-07:00

Many landlords choose to manage investment properties on their own but sometimes landlords need more help, and that's when a property management company might make sense.

Management companies’ deal directly with prospective and current tenants, saving you time and worry over marketing your rentals, collecting rent, handling maintenance and repair issues, responding to the various tenant complaints, and even pursuing evictions. A property management company helps you avoid the hassles of being the landlord and focus on enjoying the benefits.

Why you should hire a management company:

A management company will mainly be handling the maintenance of your investment property. All properties require maintenance however when you have a paying tenant you’re required to resolve maintenance issues promptly. And, regular property maintenance can keep the value of your investment up and in many aspects, keep the property safer; this will actually save you cash in the long run as it will extend the life of your investment.

Depending on the age of a property you’ll probably find more issues; this is why it is crucial your property is thoroughly checked before tenants move in, thus any problems that are found will be sorted out in hopes to cut back the amount of issues and complaints that will occur once the property has been rented out.

There are various kinds of property maintenance that will need to be reviewed and this maintenance will vary from being major issues like roof repairs to minor jobs such as interior painting, carpentry work and landscaping projects.

When should you hire a management company:

You don't live near your rental property. If your rental property is located far from where you live, hiring a property management company can be invaluable in dealing with the many issues that you will not be able to handle from afar.

You're not interested in hands-on management. Many landlords look forward to the challenge of finding good tenants and the rewards of maintaining a safe and attractive property on their own. But if you view rental property ownership strictly as an investment and want little or nothing to do with the day-to-day management of your properties, consider hiring help to manage your property.

Your time is limited. Even if you enjoy hands-on management, you may not have much time to devote to your business, especially if land-lording isn't your day job.

Hiring a property management company is an attractive option if you can afford the fees, and they range from high to low. Some companies will charge a percentage of what you charge the tenant [perhaps 3% to 5%] while other property management companies will charge you a flat rate fee [$100 to $200 per month].

If you do decide to hire a property management firm, use caution in selecting one and ask questions to compare the services offered.

Why Your Lender May Choose Foreclosure Over Mortgage Assistance

2010-10-13T16:45:00.001-07:00

The Treasury Department began a loan modification program in March 2009 to encourage lenders to modify troubled loans to prevent foreclosures. But from the beginning, the process proved slow, frustrating and for many non-existent. All the while, foreclosures continue unabated. But why the hesitation by lenders to help homeowners remain in the home?

Many mortgages are handled by loan service agents. They collect the payments and handle all the on-going business with your mortgage. But they also are the one constant villain in the foreclosure debacle.

The loan servicers lose paperwork, foreclose on homes they have no right to foreclose on, accept borrowers into modification programs while trying to foreclose on them at the same time, they deny borrowers a modification even when they shouldn’t, they’re impossible to get a hold of, and their communication with homeowners is appalling. And you know what, it’s depressing but loan servicers win in the end.

A loan servicers’ primary compensation is a percentage of the outstanding principal balance on a mortgage so the higher the outstanding principal the more their compensation package will be. This definitely presents a conflict of interest.

And while investors say they are all for helping out the homeowner, investors really look at the bottom line – are timely payments being made? So when the money is halted investors want to know that something is being done to recoup losses.

Under the government’s foreclosure program a service loan agent that modifies a loan for a homeowner can collect $1,000 from the government, followed by $1,000 a year for each of the next three years. While those sound like a meaningful incentive to help homeowners the government’s incentive cannot compare to what servicers collect by allowing properties to go into foreclosure.

So where should a homeowner start if looking for a modification?

The first thing that a homeowner should do is have an experienced mortgage attorney examine your loan documents for any potential violations of the lender. Lenders are not legally obligated to modify loans so it really is up to the lender to accept your request.

The more ammo you have to help them shift towards helping you the better.

Thinking Of Multi-Family Dwellings As Investments

2010-10-12T14:06:00.000-07:00

Looking to branch out a little and invest in steady streams of income?

Think about multi-family dwellings.

What are tenants willing to pay to occupy a unit?

This is the cornerstone of your investment:

The most obvious advantage of buying any income property is real estate investors can grow wealthy in the long run. Holding on to investment property and simply allowing other people's money to payoff the debt, even if there is no immediate cash flow, is what drives people into real estate investing. Moreover, because multifamily properties serve a basic need in that they provide shelter to those who are not ready to purchase a home just yet, the downside risk to multi-family investing is very limited.

OK, there may be a scant downside to owning rental property; it mostly concerns the management problems associated in dealing with tenants. Multi-family properties can be management intensive, and often the reason why investors who purchase rental property hire the services of a professional property management company to deal with the day-to-day issues of running the property. So investors can choose to minimize this obvious disadvantage.

How can an everyday homeowner start investing in apartments?The first crucial piece to this puzzle is using other people's money. The success or failure of the investment depends on the income the property generates to meet your debt and other obligations required to keep the property. The second piece of the puzzle is to understand that when buying any investment property you must establish a sound financing package.

Given that lenders evaluate multifamily real estate based on income stream and generally will structure a loan based on the property's financial strength, keep in mind the significant role the principal of using other people's money plays in financing the investment.

When applying for a loan on a multifamily property, present lenders with a clear and concise cash flow report; you'll obtain a favorable financing package.

What are tenants willing to pay to occupy a unit? This is the cornerstone of your investment. It's crucial to understand local rental market trends for vacancies and rental rates when buying a multifamily property. Rental market trends are easy to recognize, just watch the newspaper or drive around communities noting all rental properties that have vacancies.

The bottom line here is straightforward -- Multifamily property provides investors the opportunity to build wealth and what a perfect time to start investing. Interest rates are low, there's a steady stream of available tenants which can only contribute to a profit.

Are Your Important Documents Organized in a Practical Location?

2010-10-08T16:29:00.000-07:00

If you were faced with a sudden emergency could you gather all your important paperwork in less than 5 minutes?

Think about this, can you place your hands on your property titles, life and homeowner’s insurance policy or birth certificate? How about tax forms? There’s certainly nothing fun about organizing all your important papers but it’s definitely well worth all the effort.

Most of us have no idea of the legal shelf life of documents. And even when we do our very best of keeping abreast of important documents, they somehow become scattered around the house. The deed to the house and tax paperwork in the home office while the life insurance, social security cards and birth certificates in the upstairs bedroom.

Important documents should be kept in one significant place that can be obtained swiftly. Say you smelled smoke and had to run out of your home; you wouldn’t run around the house looking for paperwork to take with you. Purchasing a lock box can be one of the most important purchases you make – fire resistant and large enough to keep important documents.

Take a look at the length of time your important documents should be saved:

Tax Documents
Keep tax returns, as well as supporting documents like W-2 forms, receipts, and real estate closing statements for seven years. The IRS may audit you within three years if it suspects good-faith errors; six years if it believes you underreported your income by at least 25%; and unlimited time if you did not file a return or filed a fraudulent one.

Investment Records
Keep as long as you own the securities, plus another seven years. You'll need them to prove capital gains and losses.

Bank Statements
One month. You just need these long enough to check the accuracy of the transactions [Williams]. Unless the statement is your only record for a tax-related transaction, there's no need to keep them longer. Plus, your bank will have them available online.

Retirement Plan Statements
Most, one year, for tax purposes. Keep Roth IRA statements until you retire, to prove you already paid tax on your contributions.

Credit Card Statements
Shred immediately after checking the accuracy of the transactions. These documents are a prime source for identity theft. Unless the statement is your only record for a tax-related transaction, there's no need to keep them longer. Plus, your issuer will have them available online.

Paychecks
One year, until you receive your W-2.

Bills
One year, for tax purposes.

W-2 Forms
Until you begin claiming Social Security. They're the best estimate of your earnings and entitlements.

Most of your documents you’ll never lay hands on again however, should you need to lay hands on them, make sure they are safely stored in a practical location.

Combining Tax Credits with Style and Comfort

2010-10-07T14:34:00.000-07:00

This is the perfect time to utilize the year-end energy tax credits and update your home. If you install replacement window or storm door windows and doors in your principal home by December 31, you can claim a federal tax credit of 30% of the cost – excluding installation. You can claim up to $1,000 for the years 2009 through 2010 combined.

Should you replace?

It all comes down to the age of your home and how well your windows have resisted moisture.

If the original framing is sound and reasonably square, you can install a replacement window into the original opening, replacing the side jams and trim.

If the original frame is rotted or significantly out of square a new window must be installed, which can cost 50% to 100% more than a replacement window.

Prospective buyers should calculate the payback of installing new windows. It’s not just about adding new style but insulating a leaky home. When replacing windows your energy bill should show an immediate savings.

Choosing the right windows

Are you familiar with the lingo? Double-hung windows may be opened from top and bottom. Casements open with a crank and make the window easy to operate. This is especially handy in those hard to reach places.

Double-pane windows are two pieces of glass that may have inert gas in between to better insulate the home. Tilt-out windows allow you to clean the exterior glass from the inside.

Comparing Window Energy Efficiency

You need to know two critical factors when choosing your windows based on energy efficiency;

You choose based on the Ufactor and the Solar Heat Gain Coefficient; the lower the Ufactor number the better the window insulates and the greater the energy savings. The range is 0.25 to 1.25, however, to qualify for the federal energy tax credit the Ufactor rating must be less than or equal to 0.30

The Solar Heat Gain Coefficient (SHGC) is rated based on how well the window blocks heat.

Windows are no longer that element to enhance the facade of your home; it’s the critical element that shields the sun and cold and insulates your comfort.

How the Front Yard Can Make or Break a Sale

2010-10-05T16:47:00.001-07:00

The realtor called and they have someone who is really interested in your home. They want to see it this afternoon. So you get the house ready, and you clean up the bathroom and kitchen, and you see a few people pull up into your driveway.

These must be the people who are interested in the home. But wait, where are they going? Are these just strangers making a U-turn in my driveway, or did my front yard just scare them off? No, they were your potential buyers.

When you're selling a home, it's true that staging the inside of your home for interested buyers is important. However, first impressions are even more important. That's why you should pay close attention to sprucing up your front yard. You won't have a chance to make another first impression.

Any real estate agent will tell you when you sell a home, curb appeal and landscaping is key; it can attract the eye of a buyer, or send them back to the internet to continue their search. With so many homes available, there are plenty of homes with impressive yards.

Keep your front yard, and your porch neat, clean and tidy. Here are some easy ways to get your front yard up to speed:

1) Edge your flower beds, and your grass. By fixing many little things, you can improve the overall look of your home.
2) Mow your lawn and remove all the leaves.
3) Prune your overgrown shrubs and trees.
4) Use a weed killer like Roundup to kill the weeds growing through the cracks in your driveway.
6) Mulch is inexpensive. If you need to add mulch to your gardens or around trees, do it. It always looks messy when there are an enormous amount of weeds popping up around mulch that looks 10 years old. The color of the new mulch will also revitalize your yard.
8) Put a $50 bag of fertilizer on your yard. Scott's with weed and crabgrass control comes highly recommended. It won't take long to turn a healthy green color.

Don't leave your yard looking disorderly. Never assume that even if you're selling your house at a bargain price, that the new owners will want to tackle the task.

When the time comes to sell your home, you should always start with your front yard, and work your way in. As one realtor told me, "When your front yard catches their eye, they're always intrigued by what’s inside."

FORECLOSURES: 25% of Sales Are Repo Homes

2010-10-01T17:09:00.000-07:00

Forclosure homes made up nearly 1/4 of all residential sales in the second quarter, according to a report Thursday from Irvine-based RealtyTrac Inc.

The foreclosures tracking outfit said 248,534 U.S. homes sold in some stage of foreclosure during the quarter, an increase of 5% from the previous quarter, but down 20% from a year ago.

Foreclosures on average sold at a 26% discount compared with properties not in foreclosures. That's down from 27% in the first quarter.

Nevada, Arizona and California recorded the highest percentages of foreclosure sales in the quarter.

Foreclosure sales in Nevada were 56% of all sales in the state during the quarter. That percentage was 47% in Arizona and 43% in California.

Ohio, Kentucky and California had the nation's best foreclosure bargains. Ohio foreclosures sold at a 43% discount in the second quarter, while Kentucky foreclosures sold 41% below the average sales price of homes not in foreclosure. California's discount was 39% in the quarter.

Where To Start When Looking For A Home

2010-09-23T16:36:00.000-07:00

Congratulations on making that decision to become a homeowner; the first step is considering what is most important to you in a home. The process in front of you may seem like a daunting task but once you narrow down exactly what you want in a home this process will be easier.

How Much Home Can I Buy?

Meet with a mortgage lender to find out how much you can afford to buy. By getting pre-qualified through a mortgage lender you will be able to search for homes you can afford. The lender will provide you with a checklist of items to bring for pre-qualification, but typically you have to gather information about your finances W2 forms, tax forms, recent pay stubs and bank statements. The lender will also secure a copy of your credit report after you sign a standard permission form.

Where Do I Want to Live?

Finding the right neighborhood is just as important as finding the right style home for you. Your options will be vast but a realtor can help you preview different communities that best suit you.
 What area do you want to live in?
 What kinds of home interest you? A townhome, a single family, or perhaps a condo.
 Do you desire a family oriented community or one with a more lively night life?

How Can I Find My Dream Home?

The wisest choice is to select a realtor to help you gain access to all the homes for sale that fits your needs and assist in negotiating a fair price. Additionally, a realtor is aware of incentives and programs that are offered, not to mention market activity and comparable area home values. Once you find your dream home your agent will work with you in putting together an offer to present to the seller.

Do I Qualify for any Home Buying Incentives?

You may be able to put more money toward your down payment or reduce your closing costs fees by getting money through a number of home buying incentive programs. Although some programs are only for first time home buyers there are others that have more flexible qualifications.

Closing the Deal

Once you have a signed sales contract its time to sit back and let the loan officer and underwriters take over. They will order an appraisal on the property, approve your loan and send you a commitment letter with terms and conditions of your loan.
You should expect between 45 and 60 days between the time you sign your sales contract to the time you close on your home. After attending the closing/settlement meeting to sign all of the paperwork you'll get the keys to your dream home, Congratulations!

What's Ahead For The Home Market?

2010-09-17T14:52:00.000-07:00

For a while it seemed as if the long awaited housing recovery was here. Home prices stopped falling and stayed pretty close to stable. But the pickup was short lived. Economists are predicting home prices to fall again and bottom out by early 2011.

We can place much of the blame on distressed properties; more than 3 million homes are expected to get foreclosure notices this year, as job losses are still straining the market. In addition, one in every four homeowners with a mortgage now owes more on the loan than the house is worth. And a growing number of these owners have made a strategic decision to default. Meanwhile, short sales have spiked to an all time high. There is now a streamlined approval process and a new government program that gives servicers financial incentives to arrange a short sale instead of foreclosing on a troubled property.

Tips on focusing towards bank-owned properties

Sure, there are some real gems in the mix but you've got to be prepared to listen to your realtor's recommendations and be ready to throw muscle int the clean up. These properties sometimes need serious repairs and you don't always have a fair chance to check the property out before bidding starts. You don't have to take on the risk of a distressed property to reap the benefits of bargains. If you're shopping in an area with a growing number of foreclosures, use that fact to get price concessions from anxious owners. Your realtor can insist the homeowner fix anything wrong with the house or provide a discount to you so you can fix it later.

Hoping to sell your home? Don't try to compete with foreclosed properties in your area. Instead, play up your advantages; a home that's in move-in condition and the possibility of a quick deal. And to speed up the deal even more you can reassure buyers with a warranty package that will cost you somewhere around $300-$400.

Which homebuyers are getting the best deals?

Trade-up buyers who want a bigger home are finding the best deals. That same house on the hill that sold for $500,000 can now be purchased for a mere $350,000; even the Mc Mansions that were selling for $750,000 can now be attained for $550,000.

Looking Ahead at Mortgage Rates

The best mortgage rates are now because the consensus is that by year end/early 2011 rates will climb up to 6%...maybe. While many people are in a hold pattern and not sure whether to lock into low rates or wait, consider this - mortgage rates are going to eventually climb and if today's rates are just one point below, you are looking at a decrease of about $300 in mortgage payments. Do you really want to pay more than you have to?

Budget Shopping for a Home

2010-09-16T16:49:00.000-07:00

Wondering if you’ll ever reach your long-term goal of home ownership? That seems to be a primary concern today for prospective homebuyers. But even in a recession, the dream of homeownership doesn’t have to be unfeasible. While the reality of owning your own home may seem elusive there are steps you can take to realize this goal.

#1 – Review Your Credit Report
This is the entry point for all prospective homeowners but many people still step over this important item. If you are not credit worthy then you must start proving yourself unless you can bankroll a hefty deposit to place on a home. Nowadays, credit restrictions are becoming more stringent because of the losses lenders suffered in recent years. Many people fear what their creditors have reported but you may be surprised at how easy it is to clean up your credit report. Either way, homeownership and FICO scores go hand-in-hand, so start reviewing that report sooner than later.

#2 – Not enough money for a down payment?
Most people are aware of the acronym FHA but do you know they enable you to get a lower mortgage rate with flexible credit terms? The program is easier than banking guidelines and has less paperwork.

#3 – Consider Purchasing in Rural Locales
Did you know there’s a government program through the U.S. Department of Agriculture that helps you buy land in rural areas? This move may seem disheartening when you’ve had your eye on a urban home but a change in scenery can be beneficial for you in the long run.

#4 – Look into Short Sales and save a bundle
With an abundance of homeowners unable to keep up with their monthly payments it’s almost inevitable not to get an amazing deal.

#5 – Save by Buying a Fixer-Upper
(HUD) has a 203(k) program that enables buyers to purchase a fixer-upper or handyman-home and roll the expense of repairs into the loan.As you can see, there are a number of ways to afford homeownership and several are provided by the government making it easier to get approved

Need-to-Know Items For Your Home Repairs And Rehabs

2010-09-14T17:13:00.000-07:00

Whether it’s fixing up a kitchen, adding a half bathroom or performing a full-gut rehab there are many things to consider before taking on a renovation project; and no matter how many times you “think you’ve got it covered” nine times out of ten, you’ve got a hole in your plan.

Any contractor you hire must have insurance; must have references; and you need to see proof! You see, trust can be a dangerous thing in home rehab and repair jobs while knowledge is strength. Don't get me wrong...there are some wonderful handymen and contractors out there who basically get a bad name just because the last guy did a terrible job. But should you pay for this problem? No – always get the proof.

· Request references and check them out. Just receiving a list of names and numbers isn’t good enough
· Ask your contractor’s to review a copy of his current liability insurance certificate

· Get a contract in writing, with specifics that you’re agreeing to

· You should never be required to pay more than one-third of the contract price as a down payment

· If a building permit is needed, ask to see the permit before the work begins

· Do not make payments unless work is proceeding by contract guidelines

· You should never rush into any renovation or remodeling job. By doing so you are relinquishing control to the contractor. You probably will not have problems with an honest contractor, as he should help you work within your budget.

· Rushing into your project only benefits the corrupt contractor who would probably try to sell you the rehab job with products that make him the most money... and not necessarily in your best interests

Rehab and repair doesn’t have to become an agonizing experience; the key to making sure your project runs smoothly is to do your homework ahead of time.

JUMBO Loans Making A Comeback

2010-09-10T16:40:00.001-07:00

A year ago, even the most creditworthy borrowers struggled to secure home loans of more than $729,750 - the cutoff for conventional conforming loans backed by Fannie Mae and Freddie Mac. But since this spring, the interest-rate spread between conforming and jumbo loans has narrowed and the number of lenders offering the loans has jumped. As of late July, lenders were offering jumbo loans at a typical rate of about 5.5 %, down from almost 7 % a year earlier and not too different from what's available for conforming loans, according to data available on Bankrate.com. NAR Chief Economist Lawrence Yun said in a late-July press conference that sales of existing homes priced at $750,000 and above jumped 30% from mid-2009. Among the big players in the market: Citigroup, which says in a July 10, Wall Street Journal article, that it has seen a 30% rise in jumbo business, and Bank of America also claims a big push in the jumbo arena.

The Popularity of LEED Homes

2010-09-08T16:19:00.000-07:00

With more people wanting to take an active role in "going green", there is growing interest in the concept of LEED homes.

This nationwide green building program can apply to any structure, from corporate buildings to private residences. There is a very precise certification system that allows a home to qualify as a green structure, and it can be an expensive endeavor. For many, the upfront cost can be a deterrent, but for anyone that cares about the environment and their health; it's a small price to pay.

Understanding the long-term benefits of a LEED home encourages many homeowners to take the plunge and go green. In fact, did you know that going green can solve many allergy problems? With childhood asthma and allergy problems on the rise, parents are readily considering the concept of living green.

It is expected that in the next few years green homes, like hybrid cars, will become more common. As popularity rises, upfront costs to go green will go down, allowing more people to enjoy the benefits of living this way. To achieve certification, a home must meet many criteria and be rated by a professional in the LEED industry. They will ensure that the home will operate under certain guidelines before they can deem it a green home.

Some of the qualities necessary to becoming a LEED home are water efficiency, energy efficiency, indoor environment quality, and innovation in design. It's also important that the home meet certain sustainability standards’, meaning it is built on land that was already developed and doesn't impact the environment in a negative way. Going green is something homeowners all over the country are considering. With so much opportunity for solar energy, it's no wonder homeowners continue to see more people opting to build LEED homes.

The benefits of a green home are numerous. For many people, the fact that they are making a positive impact on the environment is incentive enough, but it's nice to consider the other things that one can enjoy with a LEED home.

Lower energy bills, less risk of certain toxins, and improved resale value are some of the benefits. It's no wonder so many people are trying a cleaner green concept in all areas of their lives. From recycling to living green, you can save money and have a clear conscience at the same time.

Is it Easier to Get a Home Mortgage Loan with a Broker or Banker?

2010-08-20T17:08:00.001-07:00

Times are tough especially those trying to purchase a new home with blemished credit; so would life and loan prospects become easier if you were to trust a mortgage broker or a banker?

The interest rate will be the same whether you use a broker or deal directly with the bank but the broker knows all the latest greatest programs, specialty lenders, qualifying clauses and in’s and out’s to get you connected with a lender that can approve you.

You see, if you have “A” credit then you really can go just about anywhere you want to get a home mortgage loan. If you have blemished credit you have to hunt and track down that 1 lender who is willing to give you a home mortgage loan with a decent interest rate. A mortgage broker has the inside track on who will be willing to underwrite your loan and which lenders are a waste of time to even ask for a loan.

But there are downsides to mortgage brokers; many of them have a bad name because of predatory lending however, many of the programs and bad financing loans are no longer in play and were eliminated due to the financial downfall of many institutions. Additionally, once you supply all your information to the mortgage broker you will not deal directly with them anymore – the lender then takes the lead and the mortgage broker collects his/her commission.

Finally, the mortgage broker may not have your best interest at heart – it’s simply the commission that they are fighting for. Their job is to find you a home mortgage loan that you can qualify for; it may not be the best program for you and many times the mortgage broker will not explain all the if, and or what-if’s.

So again, how do you know if you should go to a mortgage broker or banker? Well first, to protect against the less reputable brokers select a member of the NAMB (National Association of Mortgage Brokers).

Next, take a look at your credit report and determine how “blemished” your scores really are; if below 620 you should probably think about a broker who can put you in contact with specialty programs and lenders willing to take more of a risk. If your score is closer to 700 then why not try a banker? Go ahead and contact a banker to start your application for a home mortgage loan and see what happens.

TEN TIPS FOR FIRST TIME BUYERS

2010-08-19T16:57:00.000-07:00

Every year thousands of all homes purchased are by first-time homebuyers. While it can be a daunting task, owning your own home is very rewarding. Listed below are ten tips to help make the process less intimidating.

Consider the following:

1. Your credit: Poor credit will make you a much larger risk in lender eyes and a larger risk means higher interest rates and higher monthly mortgage costs. Make a point of paying your credit card payments, auto loans, rent, and other payments on time, all the time, and in full. In addition keep your credit card balances low. Higher balances mean higher risk in the eyes of the lender.

2. Taxes and Insurance: Keep in mind that in addition to your mortgage payment you will have to pay taxes and insurance. Sometimes this is not included in your mortgage payment and can be quite a shocker when you see how much it increases your total monthly payment.

3. What about the real estate agent: Real estate agents are at the center of most property transactions. It's important for you to know what an agent does, who is represented, and how the system works. Be sure to ask the agent who they work for, who pays them and what your obligations are.

4. Consider what location will work best for you: Look at your needs, the needs of household members, and your preferences in terms of commuting, shopping, recreation, and other factors that are important to you.

5. Plan on getting a home inspection as part of any offer you make: A professional inspection can help you understand the condition of the property and any potential hidden defects.

6. Talk to a lender: Get pre-approved by a lender so that you know how much you can borrow and what you can afford. There is a big difference between pre-qualification and pre-approval. Ask your Lender about the difference.

7. Save money: You'll need money for a down payment, closing costs, moving and other expenses. Do anything and everything you can to reduce expenses and save money.

8. What type of loan is best: Consider FHA, VA, as well as conventional loans. Work with your lender to determine which loan is best for you.

9. Grants, gifts and potentially free money: Many first time buyers receive gifts from relatives and friends. Some companies also offer grants and other incentives to employees who are buying a first home. Community groups may also have programs and financing in place for first-time buyers, while the federal government has established special programs for teachers and police officers. Search for these and ask your Realtor for programs that they may be familiar with.

10. The time is now! Start the search process now. Talk with an agent and start looking at homes. Make a point to search the Internet on a daily basis. There has never been a better time to be a buyer than right now. There is plenty of inventory to choose from and plenty of deals to be had?

Choosing a Bad Credit Mortgage or Increasing Your Scores?

2010-08-17T16:19:00.001-07:00

Many of you seek a bad credit mortgage instead of doing the obvious – fixing your credit and increasing your credit score. There is a simple strategy to qualifying for a mortgage after bankruptcy

· Establish new credit by opening up a secured credit card
· Paying bills on time
· Eliminating expenses that cut into your disposable income
· Put away and save a sensible amount of disposable income for your down payment

After a bankruptcy discharge you only need 24 months of good stable credit to qualify for a home mortgage loan.

You may very well run into problems again with money – all of us do at some point but the lesson here is to learn from your mistakes. If you couldn’t afford it before, eliminate it; get rid of it because that will be another black mark on your credit report.

The biggest downfall with obtaining a healthy credit score is not being honest and upfront about your financial status. Here is how you can avoid credit problems when you don’t have money to pay bills on time;

· Call your creditor(s) and make a payment plan; if you cannot afford the payments they put forth, explain your circumstances and ask them the best plan they can come up with. This way it will not be reported as a late payment to the credit bureaus.
· Cut down on your monthly expenses during hard times – if you refuse to turn the cable off, just eliminate your premium channels for a month until you get back on your feet. That will probably save you $25-30 dollars off your bill.
· Same with your telephone bill; if you don’t utilize long distance you can eliminate it for a month or two and re-instate it later on.

A bad credit mortgage will not help you in the long run – in fact, most lenders have done away with these types of creative financing programs and after the downfall stemming from these type of mortgage programs they probably won’t return any time soon.
Your quickest solution to obtaining a home if you’ve suffered from bad credit is to clean up your credit reports and take a higher road to financial freedom. A bad credit mortgage will not do this for you.

Shopping For a Home Online

2010-08-16T16:38:00.000-07:00

Shopping for a home can be exciting as well as a little stressful. A new method that's become very popular of the past few years is shopping online. Shopping for a home online is the perfect solution for shoppers that are pressed for time. Shopping for home online can save you money and time when combined with a good buyer's agent.

The process for shopping for a home online is not all that different than if you were shopping the traditional way. The first thing you're going to do is determine what price range you'll be looking for. This is not the price range you'd like but rather the price range you can afford. There's no point in wasting your time on a home that you can't afford. Not to mention, whey get your hopes up for nothing? There are certain criteria you'll be looking for when searching for a home online, including finding a good buyer's agent to help you. These will include:

Location- You'll need to pinpoint the region where you're interested in purchasing your home, whether it's a specific city or state.
Type of home- Everyone's interests is different but you can narrow down your search to single-family home, co-op, multi-family home or condominium as well as the age of your desired home.
Size and Price- Although everyone wants the largest home possible, you'll want to breakdown your search to what you need for you family as well as what you can afford. The size can be determined by number of bedrooms, baths or square footage. Any features you're interested in such as appliances, fireplace, swimming pool, etc. can also be entered into your search. Once you find a good buyer's agent, don't wast their time or yours by looking at homes you have no intention or capabilities of buying.

Once you've determined all the things you're looking for in a home, you can begin shopping for a home online. There are many Realtors with an online presence that can offer you many selections of home that meet your criteria. When you get to the site, you can enter all the data you've jotted down for your dream home. Many of the sites offer numerous pictures of the homes, inside and out. Sometimes the picture and descriptions are available for everyone to see while certain sites require you to register to their site and an agent may contact you by email if you're interested in any homes.

You can also choose to contact a real estate agent from the site to set up an appointment to see a home or learn more information about any homes that interest you. It cannot be stressed highly enough the importance of having a good buyer's agent. They have knowledge and experience to make home shopping fun and exciting. A dedicated agent will look for the best possible deal on the home of your dreams. You'll find that shopping for a home online can be very exciting and rewarding.

Options for Those Not Meeting HAFA Eligibility

2010-08-13T17:14:00.001-07:00

The Home Affordability Foreclosure Alternative was introduce last November 2009 and went into effect April 1, 2010; it's an alternative to those who qualified for HAMP but for whatever reason did not complete the program and need to sell their home.

HAFA is designed specifically for conventional type loans to help homeowners streamline the short sale process and avoid a foreclosure. But again, here's a broken program that the government developed and left it up to the lenders to voluntarily participate in.

However, if a lender is participating in the HARP program then they must adopt the new HAFA program. What I think is positive with HAFA is that a homeowner who started out with the HAMP program but became delinquent on their new modification loan can now switch to the HAFA program and sell their home.

There are many borrowers who have defaulted on their new modified mortgage loan and ultimately face foreclosure again but HAFA gives you, sort of a second chance to avoid foreclosure.

What I do not like is, no matter what type of application you submit whether it's for HAMP, HARP or HAFA you're at the mercy of someone else accepting or rejecting that application. Applications for HAFA will probably be rejected much more that accepted; not because lenders don't want to readily accept a good deal but imagine the numbers that will overwhelm the banks? Every time you have such a high number of applicants for a program the lenders undoubtedly send out more resounding "NO's"!

To qualify for HAFA, Borrowers must meet these basic eligibility criteria

Property must be borrower's primary residence
The mortgage loan is the first lien originated before 01/01/09
The mortgage is delinquent or default is reasonably foreseeable
The current mortgage balance is $729,750 or less
Homeowner's monthly mortgage payment exceeds 31% of their gross income

And the best news of all...lenders are expected to provide an approval letter 10 days from the date the offer is received - no more waiting on eggshells for months to get notification if the short sale has been approved.

Some Pointers You Need To Know About FHA Loans

2010-08-12T16:42:00.000-07:00

FHA loans are federally assisted mortgage loans in the United States that are insured by the Federal Housing Administration. They are usually given to customers by federally qualified lenders or lenders that participate in the program. FHA loans have been known to help lower income Americans borrow money to purchase a home when they would not otherwise be able to.

The FHA programs were started in the era of the Great Depression to help with the financing of military housing as well as housing for veterans returning home along with their families. From the 1950's through the 1970's, the FHA helped stimulate the growth of many privately owned apartments for the handicapped, lower income Americans and the elderly. When the cost of energy and inflation threatened to kill the dreams of those looking for homes, FHA programs also came to the rescue of the many homeowners wishing to purchase homes at a time when there were threats of a deep recession.

FHA loans can help you in some of the following ways:

Buying your first home

Buying a fixer-upper

Giving seniors financial help

Providing FHA Energy-Efficient Mortgages

Financing for mobile homes and factory-built housing

Low down payments & low closing costs

Speak to your Realtor and Lender to see if an FHA loan is right for you.

Green Trends in the Housing Market

2010-08-11T17:22:00.001-07:00

In 2007, construction of "green" housing was up 30% over 2006, and it appears that the affordable-housing sector is leading the way. The National Association of Home Builders (NAHB) is now saying that 2007 may have been a turning point in the green-home market. They are predicting that by the end of 2010 5%-10% of new home construction will be green. It will be a $38 billion market, they project.

The experts are predicting that the effect will be responded to by architects, contractors and suppliers, who will soon begin to shift their focus toward green design, which will only boost the momentum further. This upsurge in the affordable housing market is partially fueled by some environmentalists as well as some forward-thinking investors who stepped up to help finance this green movement. Prices for going green have come down as demand has increased. One other factor has helped fuel the green trend---the problem of mold in houses that have too much insulation. The improvements in ventilation technology as a result of the highly-publicized mold problems have also begun to appear in more modest homes.

Enterprise and the U.S. Green Building Council have joined hands to promote such things as education and training for building green. They are also working on ways to cut the costs of green affordable housing. Bank of America and the Home Depot Foundation have also been providing business leadership, financing, technical assistance and other resources to help advance the green trend.

There is now an interest in developing empirical evidence to show that green building is financially feasible and beneficial with the purpose of convincing mainstream financial institutions that they should be willing to get behind green affordable developments. It appears that the tide is turning toward green housing not just because it's the right thing but because it's also the smart thing. By building green, many of the environmental problems that plague society can be solved in the short term, and those involved in the movement claim that it just makes sense to take this direction toward meeting housing needs in the 21st century.

Some architects are getting on board. In custom-designed homes, the home buyer needs to ask for these features, but the architects can provide an analysis to determine which features are good investments, whether in new or renovated homes. In most cities, fuel-conserving homes qualify for energy-efficient mortgages.

Buying A Fixer-Upper Using HUD's 203(k) Program

2010-08-10T15:55:00.001-07:00

This may be a way to get a bargain on a house but you need some facts before you take it on. You can find a property and the seller accepted my very low bid. The house will need a lot of work, but you feel that you're more than capable of fixing it up, so you buy it. Before long, you're in over your head and you're living in a home and repairing it sometimes years down the road, on top of which you probably won't even get your money back if you sell it.

Often a bank will not grant a mortgage on a house that is in bad shape until the repairs are complete and the repairs can't be done until you buy the house. Talk about Catch 22!

One way to go is to look into HUD's 203(k) program, which makes it possible to purchase a property and include in the loan the cost of the repairs and improvements. It is an insured-loan program that is available through approved lenders all across the country but is only available to people who will occupy the house. The down-payment requirement is 3.5% of the total cost, acquisition and repairs.

Here's some information about getting 203(k) loan:

Locate a fixer-upper and do a feasibility analysis with your real estate agent. Then enter into a sales contract that will stipulate that you are seeking a 203(k) loan and that the contract is only in effect contingent upon approval of the 203(k).

Find a lender who is approved by the FHA to grant these loans. You will need a proposal spelling out in detail the estimated cost of each repair or improvement.

Get an appraisal to determine the value of the property after renovation.

If you pass the lender's credit-worthiness test, you will have your loan. The amount of the final loan will include a contingency reserve of 10%-20% of the remodeling costs to cover any extra work that needs to be done.

You close on the property, the seller is paid, and the money for repairs goes into an escrow account.

Mortgage payments begin once the loan is closed.

Money for the contractor will be obtained through a series of draw requests; 10% percent will be held back by the lender to assure that the work will be finished and there will be no liens on the property.

For more information, go to:

http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm

The Basics About 1031 Exchange

2010-08-06T15:23:00.001-07:00

1031 Exchange refers to the section of the Internal Revenue Code Section that provides for the tax deferred exchange of real and personal property.

Simply stated, a 1031 exchange allows a person to "exchange" an investment property (be it business or a home) worth a certain number of dollars for another investment of "like kind". Since any profits have been reinvested into the new property, the taxes on those profits can be deferred until ultimately , the investor divests himself of the property. At that time, the grim reaper of reality shows up, and the deferred taxes along with any new taxes on the transaction become due at once.

Some general guidelines for a 1031 Exchange:

The value of the replacement property must be equal to or greater than the value of the relinquished property less any selling expense.
The equity in the replacement property must be equal to or greater than the equity in the relinquished property.
The debt on the replacement property must be equal to or greater than the debt on the relinquished property.
All of the net proceeds from the sale of the relinquished property must be used to acquire the replacement property.
Constructive receipt of sales proceeds is prohibited during the exchange process.
Deadlines for identifying and closing on the replacement property must be followed.

If a few or our grandparents/great-grandparents had known about the 1031 exchange, maybe the great depression could have been the so-so depression. It's a little known fact that this suddenly popular side route that allows an investor (and that can be a private individual as well as a broker) to indefinitely delay the payment of taxes when properties are exchanged without a profit, has been legal since 1921. Unfortunately, it took the housing boom to bring it to that attention of the Real Estate savvy, and the housing slump to open the rest of our eyes to what it can do.

However, it is important to realize that a 1031 exchange is not a ride on the tax-free gravy train. Eventually the investment is sold, hopefully at a profit. Then, the taxes on the first and last sale will have to be paid.

Record Low for Mortgage Rates

2010-07-13T17:21:00.001-07:00

Lenders are offering 30-year loans at an average rate of 4.57%, with upfront fees averaging 0.7% or the loan amount.

The rates are down from 4.58% last week and 5.2% last year this time.

The average rate for a 15-year loan rose from 4.04% to 4.07%.

Mortgages that are fixed for 5 yrs, but become variable, the average initial rate fell to 3.75% from 3.79%, taking it to the lowest in 5 years.

Well qualified borrowers, who understand the advantage of what is known as "buying points", often can get better rates.

Foreclosure Filings Drop; Bank Seizures Rise

2010-07-02T12:01:00.001-07:00

Foreclosure activity in the U.S. continued to level off this quarter with some stage of the process falling 3%.

Last month close to 323,000 properties received some kind of foreclosure filings - either default notices, scheduled auctions or bank repossessions.

While the overall number of filings was down, and the number of homes entering the first stage of the process fell 7% from April, the pace of homes exiting foreclosure and being seized by banks hit a record high in May.

The increase in repossessions suggests that lenders are beginning to work through a backlog of properties developed after many foreclosures were frozen last year. In addition, there's been government pressure on lenders to work with defaulting homeowners.

California continued to be a hotbed of foreclosures, accounting for 22% of the national total with around 72,000 filings in May. California was fourth behind Nevada, Arizona and Florida.

A Look At Palos Verder Peninsula 1st Quarter Home Sales & Inventory

2010-06-08T13:42:00.000-07:00

The average single-family home price was $1.36 million for the first quarter of 2010 as compared to $1.25 million in the first quarter of 2009, and increase of 9.1 percent. The median price of a single-family home in Palos Verdes

was $1.15 million in the first quarter of 2010 as to $1.05 million in the first quarter of 2009 - a 9.2 percent increase.

The average condominium prices increased to $525,000 as compared to $469,000 in 2009 - a 12.8 percent increase. The number of condominium and townhome sales in the first quarter were down 37.5 percent, with 10 sales in 2010 compared to 16 in 2009. The dollar -per-square-foot figure in the first quarter was $378 in 2010 ans $367 in 2009 - a 3 percent increase.

The number of single family homes sold in Palos Verdes was up 87 percent in the first quarter of 2010 compared to that same period in 2009. The average dollar-per-square-foot figure for single family homes sold in the first quarter was almost even: $492 in 2010 versus $494 in 2009.

According to the Palos Verdes Association of Realtors, in the month of April of 2010 pending sales are double what there were in April 2009, while the inventory is down 32 percent. In April of this year there was a 4.38 month supply of inventory compared to a 10.78 month supply in April of 2009.

These housing statistics were compiled by the Palos Verdes Association of Realtors using data maintained by the Multi-Regional Multiple Listing Service, Inc.

South Bay Waterfront Project

2010-06-07T16:23:00.000-07:00

Despite funding challenges, phase 1 of the San Pedro downtown-waterfront project is set to go into the initial designing this summer. The design work is expected to take at least a yer to complete and have an estimated cost of $35 million, after which an additional 2 years for construction.

The first phase will include a harbor to accommodate tall ships and other vessels, plazas and a housing facility for the historic fireboat, the Ralph J. Scott. The housing of the fireboat, has drawn some criticism, primarily for the Los Angeles Fire Department, who says the ongoing maintenance would be rather expensive.

Phase 2, which will be designed to provide more pedestrian connections to downtown and the waterfront and to include a realignment of Samson Way, expansion of the Red Car line. The much anticipated part of phase 2 will be the Seventh Street pier water cut adjacent to the Los Angeles Maritime Museum.

The entire development is expected to 10 years and an estimated total cost of $1.2 billion.

Freddie Mac/Fannie Mae Details HAFA Initiative for Distressed Homeowners

2010-06-03T16:37:00.000-07:00

In a mortgage seller/servicer bulletin released Tuesday, Freddie outlined the guidelines for HAFA, a subset of the Making Home Affordable Modification Program (HAMP). It provides financial incentives to servicers and borrowers who pursue a short sale or a deed-in-lieu of foreclosure. The program, along with Fannie Mae's version, mirrors the main HAFA program, which the Treasury Department rolled out in April.

The GSE HAFA programs take effect Aug. 1, 2010, but servicers are allowed to use HAFA immediately, Freddie said. Under the guidelines, servicers must first consider a borrower for a HAMP workout plan and conduct other home retention workout options before considering the borrower for HAFA.

According to the bulletin, once all other home retention workout options have been exhausted, eligible borrowers must be considered for a HAFA short sale. If the borrower is eligible for and agrees to a HAFA short sale, but the mortgaged property does not sell within the HAFA marketing period, the servicer may offer the borrower a HAFA deed-in-lieu of foreclosure, with Freddie Mac authorization.

The GSE HAFA differs from Freddie Mac's short payoff and deed-in-lieu programs in a number of ways, including how subordinate lien holders are treated. Under Freddie HAFA, each subordinate lien holder, in order of priority, may be paid no more than 6% of the unpaid principal balance of their loan, until the $6,000 aggregate cap is reached, in exchange for release of the subordinate liens and satisfaction of the underlying debts.

Servicers are eligible for a $2,200 cash incentive for each completed short sale and $1,500 for each completed deed-in-lieu. Borrowers are also eligible for $3,000 to assist with relocation costs.

In addition, Freddie said it does not require or accept cash contributions or promissory notes from the borrower. Subordinate lien holders must also agree to release all liens without promissory notes or contributions from the borrower.

Now as for Fannie Mae:

The Fannie Mae program takes effect August 1, 2010 and is designed to mitigate the impact of foreclosures on borrowers who are eligible for a loan modification under the Home Affordable Modification Program (HAMP) but were unsuccessful in obtaining one, Fannie said. Like the Treasury Department's HAFA program, servicers cannot consider a borrower for HAFA until the borrower is evaluated and eliminated from eligibility for a Making Home Affordable Modification Program (HAMP) workout plan.

Also like the Treasury program, Fannie Mae will offer servicers cash incentives for completed HAFA transactions, $2,200 for short sales and $1,200 for deed-in-lieu of foreclosure agreements. Borrowers are also eligible for $3,000 in incentives.

That's more than in the Treasury's HAFA program, where servicers are eligible for $1,500. Under the Treasury program, borrowers receive $3,000. In addition, the investor is also eligible for a maximum of $2,000 incentive.

Participating servicers will be required to report on their Fannie Mae HAFA activities to both Fannie and the Treasury and the program sunsets on December 31, 2012.

After announcing the program in October 2009, Treasury's HAFA program began in April. The Fannie Mae HAFA program is the latest in a string of programs designed to help borrowers avoid foreclosure. In addition to HAFA and HAMP workouts, Fannie Mae is letting some distressed borrowers stay in their homes as renters, under the deed for lease (D4L) program.

Under D4L, the homeowner-turned-renter is required to pay fair market rent to stay in their home for up to 12 months. The renter must have enough income to sustain a 31% income-to-rent ratio and rental payments are not subsidized by Fannie Mae, but could include renters eligible for Section 8 payments.

Also, in March 2010, Fannie Mae instructed its servicers to consider an "alternative modifications" for all mortgages that did not qualify for a permanent conversion under HAMP. That "Alt Mod" program, which sunsets on August 31, 2010, is similar to HAFA.

Note: This article was written by Austin Kilgore for HousingWire.com

EPA Makes Contractors Take Precautions With New Lead-Safety Rules

2010-05-24T16:51:00.000-07:00

The Environmental Protection Agency's Renovation, Repair and Painting rule, which kicked in last month, requires additional safeguards by contractors working on homes, schools and childcare facilities built before US regulators banned lead paint in 1978. The intention is tho reduce the harm from lead for contractors and their workers as well as for the people who live, work or attend school in older structures.

About 38 million US homes contain lead paint, which can be disturbed by even small renovations, according to the Department of Housing and Urban Development.

The EPA rule is an extension of Cal/OSHA rules that expand the 1979 federal employer lead standards to California's construction industry in 1993. Also, the rule calls for lead-dust containment, thorough cleanup, documentation, consumer education and completion of an EPA-accredited course on lead-safe work practices.

Important Precautions:

Cover floors with durable plastic sheeting
For larger jobs, make dust-containing doors by covering each entry to the work area with two layers of sheeting: One should be taped along all edges and cut down the middle. The other should be taped only on top, as a flap covering the slit in the first layer.
Remove furniture, rugs, curtains and other such items from the work area.
Turn off heating and air conditioning. Cover vents with plastic sheeting.
Keep windows closed
When disturbing lead paint, spray water on painted surfaces to keep dust from spreading

Note:
You can read the original, full article written by Michelle Hofmann for the LA Times.

RHE City Council Set To Vote on Overdue Vista-Blocking Issue

2010-05-11T17:29:00.001-07:00

For two years now, Rolling Hills Estates residents have been asking for the legal action to get overgrown, vista-blodking trees chopped down, the City Council is set to vote on a view-restoration ordinance tonight.

The measure would bring the city into line with the 3 other municipalities on the Palos Verdes Peninsula that have existing rules.

The 18 page ordinance will allow residence to pursue "view equity" or "sunlight access" in relation to trees causing an "unreasonable obstruction" on properties within 5oo feet of the home owned by the person seeking the view.

The measure directs neighbors to try to resolve view disputes first through an initial discussion, then by filing a written claim with the city. The claim would be followed by voluntary mediation then, if necessary, binding arbitration and finally litigation. Costs for mediation and arbitration would be borne by the party seeking an improved view, but agreements could be made to divide the cost. In most cases, the cost of litigation would be paid by the side that loses.

An important objective in the ordinance would be to ensure that the city would not end up investing a lot of staff time or paying for lawsuits related to view disputes, an has been the unfortunate case in the past.

Key Factors Regarding Private Mortgage Insurers

2010-04-27T17:14:00.000-07:00

The Federal Housing Administration, which insures lenders for losses incurred should a borrower not make his payments as promised, is pulling in its horns in an effort to remain solvent in the face of a rising number of delinquencies and foreclosures. At the same time, though, some of the half a dozen private companies that provide lenders with similar protection against defaults are quietly reentering the market, a market they all but vacated when the housing sector tanked.

2 Companies who have adjusted their guidelines in an attempt to re-enter the market are Genworth Mortgage Insurance in Raleigh, NC and MGIC of Madison,WI.

Beginning this month, down payment requirements on FHA-insured loans have been increased. Although borrowers with credit scores of 580 or above will still be able to make the traditional 3.5% down payment, those with lower scores will need 10% down. In addition, the upfront mortgage insurance premium has been raised from 1.75% to 2.25%. The premium can be financed as part of the mortgage. But the change nevertheless adds $1,000 to what otherwise would be a $200,000 loan. The resurge of interest by private mortgage insurers signify their belief that the housing market has reached some semblance of stability.

Genworth has rewritten its underwriting guidelines so that it will now back 5% down payment loans to borrowers anywhere in the country. Previously, such mortgages were not available to borrowers in so-called "declining markets," which in Genworth's case were California, Arizona, Nevada, Michigan and Florida. MGIC, the nation's largest private mortgage insurer, also has tweaked its guidelines. The changes aren't broad, company representative Katie Monfre says, but they are meaningful. Among other things, it has removed some markets from its restricted list and reduced the minimum FICO score required for a loan with a 5% down payment to 660.

Another company, Radian Guaranty in Philadelphia went away from the declining-markets concept altogether "at least a year ago," says President Teresa Bryce. Instead, it now backs 95% loans anywhere as long as trusted lenders with low delinquency rates underwrite them.

Yes, the FHA requires as little as 3.5% down, but you now need a FICO score of 580 or better to qualify. But private insurers will go as low as 3% on so-called affordable housing loans offered through state housing finance agencies.

Here's how the two line up on a $200,000 mortgage at 5.5% with three down-payment scenarios based on Genworth's pricing model:At 5% down, the principal and interest on an FHA-insured loan of $190,000 would be $1,103 a month. Add in the $79 monthly charge for insurance, and the payout would be $1,182. Rolled into the loan amount as paid as part of your monthly payment, private insurance is $46 more.But with 10% down, the numbers favor PMI: $1,120 a month for an FHA loan, $1,115 for private insurance paid monthly and $1,043 a month when the coverage is paid at closing.At 15% down, the FHA payment is $1,474 versus $1,436 for private coverage paid monthly and $1,394 if paid all at once.Private mortgage insurers bring other benefits to the table, too. Through Genworth, for example, Flagstar Bank in Troy, Mich., is offering job loss protection at no extra cost to borrowers who were laid off involuntarily. The insurance will cover the borrower's house payment, including taxes and insurance, for up to $2,000 a month for six months.And Radian will advance up to $15,000 to lenders to be applied to troubled borrowers' accounts to facilitate a mortgage-retention workout plan and ultimately reinstate the loan. Better yet, the money does not have to be paid back.

Note:
These are excerpts from the original article written by Lew Sichelman, published in the Los Angeles Times on April 25, 2010.

http://articles.latimes.com/2010/apr/25/business/la-fi-0425-lew-20100425

Is Your Home Still A Good Long Term Investment? Yes!

2010-04-20T17:26:00.001-07:00

One of your primary reasons for owning a home is the investment – Money. You accumulate equity in your home; you save in taxes by owning a home and why pay more money to rent when you can pay less to own your property?

Equity is the value of your home. The amount of your loan minus the amount you have already paid toward the home is your equity. Now of course there are other determinations that go into this number like any upgrades to the home, the neighborhood, and any liens on your home.

“You accumulate equity in your home; you save in taxes by owning a home and why pay more money to rent when you can pay less to own your property”Your home is still the best long-term investment you will ever make. Over the years home prices have skyrocketed and plummeted and will continue to do so. But property is always valuable no matter what. The key to a home’s value is location, upkeep, upgrades, amenities and appeal; each of those items will play a part in your profits. Look at today’s economic mess; we’re sitting in a buyer’s market and even with plummeting prices and a sad stock market homes are still a value to someone.

People are enticed to buy new homes and not just new but bigger and better homes. Fifty years ago homes were less than 1000 square feet and the family all shared one bathroom. Today most homes have 2.5 bathrooms, more square footage, more closet space, more windows, upgraded landscaping, double garages, cathedral ceilings and gourmet kitchens with islands. No matter what, homes remain steadfast and there will always be buyers. But like everything with value, it all depends on what you’re offering. This is why upkeep and upgrades remain an important trend.

Your home will always be a good investment and think of the return on your investment in the long run; one of the best benefits to a homeowner is the tax deductions. Homeowners are allowed to deduct up to one million dollars on their primary and second home. And if you have a home equity loan you can deduct part of the interest payments on that mortgage.

Property taxes and interest payments on your mortgage are all deductible on your federal and state tax returns. For many people who do not have any itemized deductions, this provides some relief from paying all of their income to the government. Who doesn’t want to pay less in taxes? And to sweeten the deal the government now offers you other avenues to deduct some upgrades to your home. Become eco-friendly and purchase items that save on energy and wasted water use and you’ll become eligible for other tax incentives.

Home ownership was always looked at as accomplishment and achieving the American Dream; today it has become that and much more; an ideal way to make a sound investment with plenty of loopholes to decrease your tax obligations. Throughout the declines and painful uncertainty will come stability and home sweet home investment will gain ground once again.

Transitioning from Renter to Homeowner

2010-04-19T17:16:00.000-07:00

We make a lot of assumptions about why people don’t rush to buy a home; credit issues, financial issues or perhaps uninformed of the process into homeownership; but it becomes more than just the benefits of becoming a homeowner.

Many people have been raised in a renter’s culture and have never thought of owning a home. Homeownership is a big step for a lot of people; families must learn how to live in a diverse neighborhood, and deal with taxes, insurance and other aspects of home ownership that was never contemplated before. The mere responsibilities of homeownership make many renters shutter at the thought.

“You mean I’m responsible for my own maintenance?”
“I have several monthly bills other than just rent?”

Sure, there are many advantages to owning a home but there are also sacrifices. In the end it really will balance out because you’ll get a nice tax break. Owning a home means you get new tax breaks that weren’t available to you before. For many new homeowners’ it’s the first time they’ve ever received a tax refund worth a few thousand dollars, all because they own a new home.

So here are some things to consider; there are many advantages to buying a home versus renting year after year.

Have you ever considered that you’re just paying someone else’s mortgage payment and providing your landlord with tax benefits that you could be receiving? Your landlord owns the building you live in and is most likely paying a mortgage payment to the bank.

So the landlord collects rent from each tenant and then makes a payment to his/her bank. Let’s say the landlord’s mortgage payment to the bank is $4,000 a month. That is a large payment and it could be more or less than that; however let’s say you live in a building with 10+ tenants times everyone paying $1,000 in rent. The landlord is still making a profit each month…AND, the landlord is able to deduct expenses and interest off of his/her taxes.

So you see the big picture here; you’re helping your landlord make a BIG profit each month.

Did you know that for the same amount you’re paying in rent you could afford to buy a home? It’s probably cheaper to buy a new home versus what you’re currently paying in rent.

While maintaining a home does indeed have a cost factor associated with it, it should not be an obstacle to becoming a home owner. You can always purchase a “maintenance insurance policy”. This type of insurance policy covers small repair problems for plumbing, heating, electrical and more.

Understanding the benefits, obstacles and issues each of us faces as first time home buyers will help us eliminate those obstacles and overcome the fear in transitioning from renter to homeowner.

A Look At What Today's Homebuyers Prefer

2010-04-05T17:04:00.001-07:00

Often builders rely on data from surveys provided by companies such as Avid Ratings Company (www.avidratings.com) to keep up to date on would-be buyers preferences. The overall consensus is that lot of current homeowners plan to be more practical next time around. "People are willing to live in less square footage, but it has to be livable" according to Carol Lavender, President of Lavender Design Group (www.lavenderdesign.com), based out of San Antonio, TX. Avid's survey also concluded that there has been a "huge transition" toward "green" features like high-efficiency appliances, windows and insulation. Here are some of the findings provided by Avid Chief Executive Paul Cardis, from a recent study of more than 22,000 owners who purchased in the last 9 years:

Community clubhouses are not a big deal anymore
Health clubs that people end up using very little can be eliminated
Swimming pools, golf courses and dog parks are no longer a great desire
Children's playgrounds and walking paths are essential
Large kitchens with islands are still strong must-have
Formal dining rooms, upstairs laundry rooms and home theaters aren't necessities
First time buyers, vacation-home buyers and custom-home buyers rank 2 car garages, home offices and main floor master bedrooms high on their list of wants
Oversized showers with overhead shower heads and seating was preferred over a master bath with a whirlpool tub

Note:

The information provided in this blog came from an article written by Lew Sichelman published in LA Times Business Section

Foreclosure & Loan Mods Aren't Your Only Option

2010-04-02T16:12:00.001-07:00

So, what re-course do homeowners have? SHORT SALE! SHORT SALE! SHORT SALE! Find an experienced, diligent realtor in your area and call them for a consultation. In a short sale the bank accepts less than what's owed on the property rather than going through the foreclosure process. The best part is that a short sale doesn't effect your credit report for 7 years like a foreclosure. So, you can move on and get a fresh start.

There are some restrictions. You must have a valid hardship such as; job loss, financial difficulty, earning less money, illness, divorce, death, job transfer for consideration.

Banks don't want to be in the business of selling real estate, so they don't want your property back!

As of the month of April, the Treasury Department started a new program to make the short sale process even more painless. Some of the key aspects of the program are:

1. Lenders are required to answer a request for a short sale within 10 business days of receiving the purchase offer.

2. Homeowners also get $1500 in cash as a "relocation incentive" to cover moving costs, deducted from the sale price.

3. Mortgage lenders, in turn, receive $1000 to help cover and speed up the process of the sale.

Now let's compare the other options out there:

Loan modifications are a horrific, lengthy process and you may not even qualify.

Foreclosures stay on your credit report for 7 years and actually it's permanently recorded with the county records where it's filed.

CALIFORNIA TAX CREDIT UPDATE

2010-03-31T10:16:00.000-07:00

March 25 2010, California Governor Arnold Schwarzenegger signed Assembly Bill 183, the Homebuyer Tax Credit legislation, into law.

“The positive impact of the home buyer tax credit at the federal level is clear,” Goddard said. “Nearly 40 percent of first-time home buyers said they would not have purchased a home if the federal tax credit for first-time home buyers was not offered, according to C.A.R. research conducted last year. We expect the state tax credit for home buyers to have the same impact.”

AB 183 will provide $200 million for home buyer tax credits, allocating $100 million for qualified first-time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes.

The eligible taxpayer who purchases a qualified personal residence on and after May 1, 2010, and on or before Dec. 31, 2010, or who purchases a qualified principal residence on and after Dec. 31, 2010, and before Aug. 1, 2011, pursuant to an enforceable contract executed on or before Dec. 31, 2010, will be able to take the allowed tax credit. (Any home under contract by the December 31, 2010 deadline has until August 1, 2011 to close escrow.)

The credit is equal to the lesser of 5 percent of the purchase price or $10,000, in equal installments over three consecutive years. Under AB 183, purchasers will be required to live in the home for at least two years or forfeit the credit (i.e., repay it to the state).

In a written statement, California Association of Realtors President Steve Goddard said, "His actions today are the result of our efforts in Sacramento over the last several weeks as members and our team in the capital worked for the bill's passage before it landed on the governor's desk."

The state's previous home buyer tax credit program was so successful that it ran out of tax credits by the end of June 2009. Unlike last year’s legislation, AB 183 adds a tax credit for the purchase of an existing home by a first-time home buyer.

Experts feel that AB 183 will significantly contribute to the effort to stimulate jobs-creation within California's housing market by helping to incentivize the purchase of distressed properties such as foreclosed homes or short-sales. Often these homes are abandoned or have been sitting on the market for a while.

According to Goddard, "It is these homes that will require substantial rehabilitation by the new owners, which will in turn generate a tremendous increase in jobs and accessory purchases connected to home improvement activities."

The signing into law comes on the heel of news that home sales slowed in the first quarter of 2010

South Coast Botanic Garden 50th Anniversary

2010-03-29T16:45:00.000-07:00

The South Coast Botanic Garden will commemorate its first 50 Years with an Anniversary Celebration and Open House on Saturday, April 17, 2010 from 9 A.M. to 5 P.M. Entry is free for the whole family. Residents are invited to visit the garden an they open the garden doors for an all day family event. The day will include the spring plant sale, garden community booths, children's activities, lectures, food court, music and art in the garden, guided tram and walking tours and a golfing green.

Bank of America To Cut Mortgage Debt

2010-03-26T14:02:00.001-07:00

Bank of America Corp. released it's plans to erase as much as $3 Billion in "principal" owed by thousands of severely delinquent borrowers who owe more than their homes are worth. BofA which states will take priority, however California will be the largest block. These delinquent loans came from Bank of America's acquisition of Countrywide Financial Corp. Bank of America said it will be contact those borrowers they deem eligible for the program. The program is aimed to reduce first mortgage payments to 31% of gross household income and targeted to holders of troublesome loans, such as Option ARMs, which are adjustable rate mortgages for which borrowers had the option of making payments that did not cover the interest costs for 5 to 10 years. Here are some of the key factors of the program:

Borrowers must demonstrate a hardship in making current payments, be at least 60 days delinquent on the loans and owe at least 120% of the current home value
Borrowers with second mortgages or home equity lines of credit will not qualify in certain instances
Bank looks first to reduce principal by cutting unpaid interest tacked on as principal in calculating affordable payments
Bank will convert certain option adjustable-rate mortgages to fixed-rate loans
Bank aims to reduce the first mortgage to 31% of gross household income

Treasury Department Steps In To Help Homeowners

2010-03-24T16:44:00.001-07:00

In an article published in the current March/April 2010 issue of California Real Estate Magazine, the Treasury Department announced that through their Home Affordable Foreclosure Alternatives Program (HAFA), it has issued modified rules of the short sale process to help homeowners. The process will be standardized nationwide with uniform documentation and costs and due to go into effect in April. Below are some important aspects of the process:

1. Lenders are required to answer a request for a short sale within 10 business days of receiving the purchase offer.

2. Homeowners also get $1500 in cash as a "relocation incentive" to cover moving costs, deducted from the sale price.

3. Mortgage lenders, in turn, receive $1000 to help cover and speed up the process of the sale.

Reference:
This blog was paraphrase from an original article written by David Tremont, a freelance real estate writer.

Source:
You can read more of the original article at the link below:

http://www.car.org/newsstand/crem/current-issue/

Existing home sales plunge!

2010-01-26T13:52:00.000-08:00

Sales of existing homes plunged 16.7 percent in December from a seasonally adjusted annual rate of 6.54 million units in November to 5.45 million last month, the lowest rate of sales since August.
It is no coincidence that the sharp decline came just after what was believed to be, at the time, the expiration of the government's $8,000 homebuyer tax credit late-November, a stimulus program that has since been extended until this spring.

As incentive programs such as this one are more likely to "pull demand forward" rather than create new demand for housing, the property market will be watched closely in the coming months to see how big an impact this will have.

Since there is a huge difference in typical sales volume throughout the year - summer sales often two or three times the volume seen in January and February- seasonal adjustments will also play a crucial role in analyzing the data in the months ahead.

It is found that unsold homes rose from a four-year low of 6.5 months of supply in November to 7.2 months in December, but this statistic too is greatly affected seasonal factors. Given that optimism for the property markets in parts of the country has been rising and more potential sellers will think now is a good time to list their homes for sale, this combination of factors - fewer buyers and more sellers - could see the inventory numbers move much higher over the winter.

It's going to be another interesting year for real estate.

Christmas Tree Fire Hazards for those who still have a tree in their home.

2009-12-28T11:18:00.000-08:00

A festivity tree is a beautiful thing but, when not cared for properly you might be at risk for a house fire. Here is a website I found that gives you tips and even shows you a video on how fast a tree can go up in flames. Please be safe during the rest of the Holiday season and pass this information to your friends as well.

http://www.usfa.dhs.gov/citizens/all_citizens/home_fire_prev/holiday-seasonal/treefire.shtm

Have a great New Year!!!

FHA Mortgage Loans sink fast; what does this mean for the tax credit extension?

2009-12-10T11:45:00.000-08:00

The New Homebuyer $8,000 Tax Credit certainly stimulated the economy and raised new home buyer hopes of finally being able to afford a home but will the tax credit extension still enable the great American Dream? It’s not likely.

Just a few weeks ago we were elated that Congress was in talks to vote for a tax credit extension; it meant more new homebuyers could get their hands on the extra funds for down payments, closing costs and other expensive fees. Combined with low mortgage rates this sounded like another windfall for those looking to move from renter to homebuyer; and now the other shoe falls – problems with FHA loans.

An FHA mortgage loan allows the homebuyer to make a modest down payment (3.5% of the purchase price) and qualify with less stringent credit requirements – that is until now. It’s been reported that 1 in 5 FHA mortgages default and tightening of the strings will surely follow - again.

When we first delved deep into the recession, FHA loan requirements were still pretty relaxed and credit score requirements still hovered around 630ish and now we’ve moved up much closer to 680-690ish. With the recent FHA report and outlook for next year, it’s more than probable FHA loan requirements including credit, job and stability will be scrutinized more efficiently.

The government cannot stand to sit by and lose more money, month after month; therefore once again they must tighten up on the loan requirements. So while that new homebuyer tax credit extension looks promising it’s going to bypass many people who thought they would be in a new home soon.

Many people look at low credit scores as a bad bruise, no longer just a blemish. But take into account of all the jobs lost and how many credit scores suffered those after effects.

The mortgage industry will never be the same.

The perfect gravy for Thanksgiving mashed potatoes

2009-11-19T12:03:00.000-08:00

This is an awsome Cajun gravy!

You might think you have tried something very similar & maybe you have.

I won't tell you where, so it's your turn to try it and figure it out.

Ingredients:

1 tablespoon vegetable oil

1 chicken gizzard

2 tablespoons minced green bell pepper

2 1/2 ounces of ground beef 1/4 cup

2 1/2 ounces of ground pork 1/4 cup

2 cups water

1 can beef broth 14 oz.

2 tablespoons of cornstarch

1 tablespoon of flour

2 teaspoons milk

2 teaspoons distilled white vinegar

1 teaspoon sugar

1 teaspoon salt

1/2 teaspoon coarsley-ground black pepper

1/4 teaspoon cayenne pepper

1/8 teaspoon garlic powder

1/8 teaspoon onion powder

1 dash dried parsley flakes

Heat veggie oil in large saucepan over mdium heat. saute chicken gizzard in the oil for 4-5 minutes until cooked. remove gizzard from pan and let it cool so that you can handle it. finely mince the chicken gizzard.

combine ground beef and ground pork in a small bowl. smash the meat together with your hands until it is well mixed. add bell pepper to the pan and saute it for 1 minute. add ground beef and the pork to the pan and cook until it is brown. Use a potato smasher to smash meat into tiny rice size pieces as it browns.

Add water and beef broth to the pan. immediately wisk in cornstarch and flour.

Add remaining ingredients and bring the mixture to a boil. Reduce heat and simmer gravy for 30-35 minutes or until thick.

MAKES 3 CUPS

Palos Verdes Perfect Turkey Gravy

2009-11-12T10:22:00.001-08:00

For the next couple of weeks I will be posting several recipes to prepare you for your Thanksgiving Holiday. I have tried to find some of the easiest and tasty looking recipes so they can apply to those who aren't always in the kitchen. Collect them all in all of my different city blogs! Enjoy!
Make the holidays extra special with Perfect Turkey Gravy. Great flavor and no lumps. For a change of pace, try one of the Flavor Variations listed below.

Makes 15 (1/4-cup) servings.

Prep Time: 5 minutes

Cook Time: 10 minutes

2 packages of McCormick Turkey Gravy Mix
1/4 cup flour
3 cups water
1 cup turkey pan drippings or turkey broth
1 cup chopped cooked turkey giblets (optional)

1. Mix Gravy Mix and flour in large saucepan. Gradually stir in water and turkey drippings with wire whisk until smooth. Stir in chopped turkey giblets, if desired.

2. Stirring frequently, cook on medium-high heat until gravy comes to boil. Reduce heat to low; simmer 5 minutes or until thickened, stirring occasionally. (Gravy will continue to thicken upon standing.)

tips-

Flavor Variations for your families:

Herbed Perfect Turkey Gravy: Prepare as directed. Stir 1/2 teaspoon McCormick® Rubbed Sage or 1/4 teaspoon McCormick® Poultry Seasoning into Gravy Mix.

Hearty Sage Turkey Gravy: Prepare as directed, decreasing water to 2 cups. Stir 1/2 teaspoon McCormick® Rubbed Sage into Gravy Mix. Makes 12 (1/4-cup) servings.

Hearty Herbed Turkey Gravy: Prepare as directed, decreasing water to 2 cups. Stir 1/4 teaspoon McCormick® Poultry Seasoning into Gravy Mix. Makes 12 (1/4-cup) servings.

Apple-Sage Turkey Gravy: Prepare as directed, decreasing water to 1 cup and adding 1 cup apple juice. Stir 1 teaspoon McCormick® Rubbed Sage into Gravy Mix. Makes 12 (1/4-cup) servings.

Garlic and White Wine Turkey Gravy: Prepare as directed, decreasing water to 2 cups and adding 1/4 cup white wine. Stir 1/4 teaspoon each McCormick® California Style Garlic Powder with Parsley and McCormick® Thyme Leaves into Gravy Mix. Makes 12 (1/4-cup) servings.

Mushroom-Onion Turkey Gravy: Melt 1 tablespoon butter in large saucepan on medium heat. Add 1/2 cup chopped mushrooms and 1/4 cup chopped onion; cook and stir 5 minutes or until tender. Mix 2 packages McCormick® Turkey Gravy Mix, 1 1/2 cups cold water and 1 cup turkey drippings. Add to saucepan; mix well. Continue with Step 2 as directed above. Makes 8 (1/4-cup) servings.

Cinnamon-Chipotle Turkey Gravy: Melt 2 tablespoons butter in large saucepan on medium heat. Add 1/4 cup chopped red onion; cook and stir 5 minutes or until tender. Mix 2 packages McCormick® Turkey Gravy Mix, 1/4 cup flour, 1/4 teaspoon each McCormick® Ground Cinnamon and McCormick® Gourmet Collection™ Chipotle Chile Pepper, 2 cups cold water and 1 cup turkey drippings. Add to saucepan; mix well. Continue with Step 2 as directed above. Makes 12 (1/4-cup) servings.

Palos Verdes Farmers Market! Dont miss the Freshness

2009-10-22T10:17:00.000-07:00

Don’t miss the Palos Verdes & Rolling Hills Estates Farmers’ Market on Sundays at the Peninsula Shopping Center parking lot from 9:00 am to 1:00 noon.

Location:
Peninsula Shopping Center In Rolling Hills Estates

Top FAQ's for Buying, Selling, and Renting

2009-09-17T09:36:00.000-07:00

1. Q: Help! What can I do to rent out my home quickly?

A: When trying to rent out your home the best thing to do is first, allow a real estate agency to handle your showings. Why? Because you’ll know those prospective clients that come to see your home are really interested versus individuals flipping through the average newspaper ads that are “just looking around” to get a feel of what’s available. Next, remember less is more; try and move out as much furniture as possible; steam clean or replace the carpet, if any; and a fresh coat of white or cool platinum paint will brighten all the rooms. Nothing rents quicker than an empty place that looks roomy and spotless.

2. Q: How Can I Negotiate My Closing Costs?

A: Review your pre-settlement sheet that will contain all of your good faith estimates; there is always room for negotiation. Discount points can be negotiated, Pre-paid items may be reviewed for discrepancies like how many months in advance are you paying for real estate taxes, HOA fees, etc. Try to get your settlement date as close to the end of the month as possible. Each day you actually are living in the home you’re paying an agreed upon prorated price until your mortgage payment begins. Move in your new home Aug. 15th and you’ll pay 16 days, prorated for living in the home from the 15th until the 31st.

3. Q: Is there any strategy to delay the closing on my home? I’m suppose to close on the 5th of the month but I would like to save money and close towards the end of the month.

A: First, take a look at your contract and see if there is any statement about the settlement date. If the seller has stated any dates or clauses about when you go to settlement and you’ve signed that contract then you have no recourse, unless you can find something wrong. Is everything in the home complete? Exterior and Interior? You can also have an inspector with you during the walk-thru to see if there are any issues with the home that might delay your settlement date. Take your contract with you and note any issues you find that the seller is responsible for; Are styles, types and dimensions correct? Landscaping in order? If the seller has forgotten anything you must let them know and hope it is enough to delay closing, otherwise you’re obligated by that contract to proceed. Everyone wants to save money when purchasing a home but the time to think about this is during the initial contract phrase, not during those crucial days before your settlement. Have more questions about real estate? Feel free to call us for all of your real estate questions and needs.

PV Estates Elegant French Dining

2009-09-08T11:06:00.000-07:00

LA RIVE GAUCHE
This Restaurant is an elegant French dining in a warm romantic atmosphere on the Palos Verdes Peninsula that has been running since many years ago. Also, With an extensive wine list and full bar your bound to have a wonderful time. They have been Spectator Grand Award winners since 1984. Get the taste and feeling of an international dining experience here in South Bay.

Lunch- 11a.m.-4 p.m.
Thurs- Sat- Dinner 4-10p.m.

LOCATION:
320 Tejon Place
Palos Verdes Estates, CA
(310) 378-0267
www.chowbaby/com/LaRiveGauche/

Golf Courses in Palos Verdes

2009-08-11T10:56:00.000-07:00

I wish I had more time to try and golf and explore the new courses but, you know I am a very busy man at work. I love doing what I do and it makes it all worth the time. Here are some Courses in the Area You might enjoy visiting.

Ocean Trails Golf Course
our newest public course - located on Palos Verdes Drive South in Rancho Palos Verdes – 310-265-5525. There are 2 excellent restaurants to enjoy. Designed by Pete Dye, the golf course has panoramic ocean views from every hole. Truly an amazing experience.
Location:
Palos Verdes Golf Club – semi-private course – 3301 Via Campesina, Palos Verdes Estates – 310-375-2533.

Rolling Hills Country Club
private course in the beautiful private city of Rolling Hills
27000 Palos Verdes Drive East, Rolling Hills Estates – 310-326-4343.

Los Verdes Golf Course and Country Club
This is a public course for anyone
Location:
7000 W. Los Verdes Drive, Rancho Palos Verdes – 310-377-7888. It has a beautiful view of the ocean.

Things to do in Palos Verdes no.2

2009-08-04T10:34:00.000-07:00

Take a look at the talking flower clock, what is that!!!!
Located:
Silver Spur Road between Crossfield Drive and the Avenue of the Peninsula. Flowers change with the season and it is one of the few in the Country. So if your in the area dont forget to come look at this very cute one of a kind clock.

South Coast Botanic Gardens on 26300 S. Crenshaw blvd is a 87 acre space on a landfill filled with flowers. Lectures, Flower Shows, Concerts, car shows and Shakespeare festivals are held all year round. You may also enjoy a bird walk that takes place the 1st Sunday and 3rd Wednesday of the month. make an appointment for admission and tram ride availability.

Enjoy the Sun and don't forget to let me know if you visit any of the places I blog about. I love to hear about fun experiences.

Things to do In Palos Verdes no.1

2009-07-30T10:08:00.000-07:00

As a Real Estate Specialist in the area I would like to show you what kind of things there are to do in the beautiful city of Palos Verdes. It is a great place to relax and have fun. I will be posting some destinations you might consider visiting. Also Check out my other blogs about near by cities.

1. Malaga Cove Plaza
This plaza began as early as 1925 where you will still find the Spanish Renaissance plaza having shops, offices, a food market, a flower stand and a small restaurant. In 1930 the Neptune Fountain was a gift to the Palos Verdes Community. It is a two-thirds size copy of the fountain in Bologna, Italy. If you are thinking of taking a drive around the peninsula this is a great place to start. You can also stock up on snacks incase your on your way to a picnic.

Located Behind the Plaza:

2. Farnham Martin Park & Malaga Cove Library
Directly behind there is a lovely stone wall and fountain with steps on both sides leading up to a lawn and the library. They both opened in 1930 and the lawn is sometimes used as a setting for free concerts in the summer and a home to the peacocks that reside in many areas of the peninsula and parts of San Pedro. The library is filled with peninsula history. If you live in the city go check it out and see what was here many years ago.