Buying Secret #10: Keep Your Money Where It Is
It’s not wise to make any huge purchases or move your money around three to six months before buying a new home. You don’t want to take any big chances with your credit profile. Lenders need to see that you’re reliable and they want a complete paper trail so that they can get you the best loan possible. If you open new credit cards, amass too much debt or buy a lot of big-ticket items, you’re going to have a hard time getting a loan.
Buying Secret #9: Get Pre-Approved for Your Home Loan
There’s a big difference between a buyer being pre-qualified and a buyer who has a pre-approved mortgage. Anybody can get pre-qualified for a loan. Getting pre-approved means a lender has looked at all of your financial information and they’ve let you know how much you can afford and how much they will lend you. Being pre-approved will save you a lot of time and energy so you are not running around looking at houses you can’t afford. It also gives you the opportunity to shop around for the best deal and the best interest rates. Do your research: Learn about junk fees, processing fees or points and make sure there aren’t any hidden costs in the loan. Continue reading
Following today’s housing recovery is like watching a bunch of sixth grade girls decide which boys are cool and which aren’t. Boy to boy, housing market to housing market, the winners and losers are constantly changing. Had one predicted just a year ago that five of the 10 healthiest housing markets would be in California, one might have been summarily dismissed.
But Zillow has found that the nation’s healthiest housing market is San Jose, followed by San Francisco, Los Angeles and San Diego, and just making it at No. 10, Sacramento.
“Rapid home value appreciation in the West, particularly California, is currently having a very positive effect on a number of other factors, including negative equity, foreclosure activity and the overall financial health of local homeowners. But that same rapid appreciation may cause affordability issues in the future in these markets, leading to potentially unhealthy conditions,” Zillow Chief Economist Stan Humphries said.
Rounding out Zillow’s top 10 were Denver, Boston, Pittsburgh, Portland, Ore., and New York City, ranking five through nine.
Phoenix and Las Vegas could make the top of another list—the unhealthiest. Both saw rapid price appreciation due to high investor demand. For the past three years, single and institutional investors swooped into these highly distressed markets and began inhaling properties. The intention was to put most of them up for rent. Prices had fallen by well over half in both areas peak to trough, so the bargains were plentiful. Until they weren’t.
In Phoenix, the median single-family home price shot up 71 percent between October 2011 and October 2013, up 27 percent in just the last year, according to Mike Orr, director of the Center for Real Estate Theory at Arizona State University. Investors pushed prices up so far, so fast, that they priced themselves out of the market. Continue reading
Our son and daughter-in-law just purchased their first home. It’s in a location that allows an easy commute into Boston, where our son works, and is just a few towns away from where his wife works. The house is in a older suburb adjacent to Boston, and is itself older and in need of some TLC. So rather than move in right away, the new homeowners will stay in their apartment until the lease is up. They’ll spend just about every free moment of the few months getting their house ready to live in.
Of course, we didn’t let them do all of this alone. Uncle Ralph and I traveled to Boston to spend a week helping them clean, paint and otherwise get the house ready. One of the things that we really helped with is how to prioritize tasks. Since it’s getting close to winter, we stressed the importance of getting only the most basic outside things done. Fixing up the yard, cleaning the siding, touching up the paint etc. can all wait for the spring. What really needed to be done is the inside, not only so they can move in but so they can live there comfortably through the approaching winter.
With that in mind, here’s a list of tasks that needed doing. It’d be great to hear from you what your list of tasks would be.
1. Change the locks on the exterior doors. As soon as the closing is over and you’ve gotten the keys to your house, either buy and install new lock sets or have a locksmith come to the house to switch them out. Let’s face it, the previous owners, Realtors, maintenance folks and who knows who else are all likely to have keys to your place. For some peace of mind and as a necessary step in making this house yours, get new locks installed immediately.
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The housing market may not quite return to normal next year, but it’s getting there.
Dusting off their crystal balls, real estate experts can at least spy the path toward for the sector in 2014. According to real estate listing and research site Trulia, sales and prices of of non-distressed homes are almost back to normal, while foreclosures are ebbing and fewer homeowners are behind on their mortgage payments.
Yet while this march toward a more stable housing market is a welcome one, it’s creating new problems along the way. Expect less highs and lows next year, but not smooth sailing. Here are five trends to look for in the new year:
Mortgage rates will top 5 percent. This is a matter of when, not if, as well as how high interest rates on mortgage loans. As 2013 draws to a close, mortgage rates have increased 1 percent over last year, rising on the back of a strengthening economy. Stronger economic growth will eventually lift the Federal Reserve’s hand out of the mortgage market in 2014, causing it to taper its bond-buying stimulus program. When the Fed merely mentioned tapering the program last June, rates jumped nearly half a percentage point overnight. Continue reading
Following today’s housing recovery is like watching a bunch of sixth grade girls decide which boys are cool and which aren’t. Boy to boy, housing market to housing market, the winners and losers are constantly changing. Had one predicted just a year ago that five of the 10 healthiest housing markets would be inCalifornia, one might have been summarily dismissed.
But Zillow has found that the nation’s healthiest housing market is San Jose, followed by San Francisco, Los Angeles and San Diego, and just making it at No. 10, Sacramento.
“Rapid home value appreciation in the West, particularly California, is currently having a very positive effect on a number of other factors, including negative equity, foreclosure activity and the overall financial health of local homeowners. But that same rapid appreciation may cause affordability issues in the future in these markets, leading to potentially unhealthy conditions,” Zillow Chief Economist Stan Humphries said. Continue reading
Buying a house? Thinking of selling your property? A lot of data came out in the last week that might help shape how you think about the important deal ahead. Here are some of the most important takeaways:
Sales have dipped a bit
Existing home sales in October were down slightly from September. But that doesn’t mean housing is crashing. Single-family sales were off 3.2 percent from September, according to the National Association of Realtors. But October sales were up 5.1 percent from a year ago, to a seasonally-adjusted rate of 5.12 million units. The market for existing homes peaked at a 5.39 million-unit-rate.
The Realtors’ conclusions are supported by data from Zillow (NASDAQ: Z FREE Stock Trend Analysis), the online listing service. It also saw some slippage in sales across the country.
In addition, the Realtors’ index of pending home sales was off 0.6 percent in October from September. Are the month-to-month declines a big deal? Probably not. Not unless interest rates shoot markedly higher. Continue reading
So you’ve pulled your sweaters out of mothballs and found your mittens at the bottom of the coat closet. But what about your house — is it prepared for the cold months ahead?
You’ll be a lot less comfortable in the coming months if you haven’t girded Home Sweet Home for Old Man Winter.
With the help of several experts, we’ve boiled down your autumn to-do list to 10 easy tips:
1. Clean those gutters
Once the leaves fall, remove them and other debris from your home’s gutters — by hand, by scraper or spatula, and finally by a good hose rinse — so that winter’s rain and melting snow can drain. Clogged drains can form ice dams, in which water backs up, freezes and causes water to seep into the house, the Insurance Information Institute says.
As you’re hosing out your gutters, look for leaks and misaligned pipes. Also, make sure the downspouts are carrying water away from the house’s foundation, where it could cause flooding or other water damage.
“The rule of thumb is that water should be at least 10 feet away from the house,” says Michael Broili, the director of the Well Home Program for the Phinney Neighborhood Association, a nationally recognized neighborhood group in Seattle. Continue reading
Interest rates on home loans may still be hovering near record lows, but experts say rates aren’t expected to stay this low for much longer. As the economy and housing market continue to improve, home buyers should expect to see interest rates tick up, which can have a big impact on their buying power.
“Interest rates will start to rise into January and throughout the year,” says Michael Corbett, Trulia’s real estate expert. “Most people don’t realize how much this affects them.” Even a tiny change in rates can affect their buying power, he says.
Rewind three decades, and homeowners’ were facing interest rates hovering around 11%, but the 2008 housing bubble burst changed the structure of the housing market and sent interest rates and home prices plunging. Continue reading
Dogs might be man’s best friend, but that doesn’t mean it will be easy to stage and show a home with a four-legged gatekeeper on the job. From an overly exuberant personality to downright gruff demeanor, dogs can make it tough to show a home. Following are some ways to minimize distress to Fido and ensure that visitors are safe and that the house remains as appealing as possible.
Clean It Up: Because we love our dogs, we don’t always see what is in front of our very eyes. Take a good look around. Pick up the dog toys, fill any holes in the backyard, and be sure to dust and vacuum any pet hair before allowing anyone in the home.
Notify: Make sure the listing agent includes a note that informs everyone about a dog on the premises and whether there are any special instructions for dealing with visitors. Not only will this prevent a sudden surprise visit that could startle the dog, but it also provides important information to buyers who may suffer from asthma or allergies.
Schedule: Whenever possible, ask agents to schedule visits around a time when you can take the dog out for a walk or drive. This allows prospective buyers and the agent to direct attention toward the home and amenities rather than deal with the pet.
Contingency Plans: Take special precautions to make sure pets have proper identification. Mistakes happen, and a beloved pet can escape or get loose without anyone realizing it. Leave special instructions on where the pet belongs at all times and what to do in the event of an emergency.
It is no secret that one of the key things people look at when they are buying a house is the bathroom. That is why it is so important to make your bathroom look as big, beautiful and up-to-date as possible. Unfortunately, many bathrooms these days are quite small, but there are ways of making them appear sleeker and larger.
Fixtures and cabinetry
One thing that can help is to install fixtures that are as high-tech and as contemporary as possible. Their streamlined appearance can give a bathroom a more spacious appearance.
Another way to make a bathroom appear larger is to remove all bulky cabinetry. For instance, if you have a sink that is encased in a big clunky cabinet, you can remove it and get a freestanding sink.
Buying fixtures that are smaller than usual can also make the bathroom look bigger.
Toilets, bathtubs and showers
You can buy toilets nowadays that are very narrow and sit close against the wall.
You can also buy “tankless” toilets that situate the tank on a pipe high above the actual seat.
Old-fashioned bathtubs can also take up a lot of room in a small bathroom.
One solution might be to rip out a large bathtub and replace it with “a newer, smaller one — or, have a bathroom with just a shower stall.
Redoing the floor in stone and having an open shower with a glass stall can also make a smaller bathroom look more luxurious and spacious.
Yet another way to keep the bathroom looking spacious is to avoid painting it in dark colors — keep the walls and shelving as pale in color as possible.
Container plants are an easy way to give immediate visual impact to your home, creating that important curb appeal – the “wow” factor as potential buyers pull up outside. Here are some important tips to make sure you use containers effectively.
Use big containers
Don’t be afraid of using big, bold containers. They will have much more impact and will be easier to care for because they won’t dry out so easily. Smaller containers tend to get lost in the landscaping, so you’ll lose the visual impact you’re trying to achieve.
Use quality containers
Avoid plastic containers, as these can look cheap. Terracotta, wrought iron, or zinc containers look great. Choose a container that complements your house and the rest of your landscaping. For example, if you have iron detailing, find a matching container; if you have brick paving, a terracotta pot might look good next to it.
Fill them with plants
For immediate results, fill your containers with more plants than you normally would. Otherwise, you will be forced to wait for the plants to grow before your container will look lush and healthy.
Feed your plants
Make sure you keep your containers well maintained by watering and feeding the plants regularly. You want buyers to think the containers are always there, not just a quick fix.
Ben Bernanke is about to treat the U.S bond market like a child on a sugar high.
Since 2008, through “quantitative Easing,” the Fed has been adding liquidity into our economy by purchasing government paper and mortgage-backed securities, sending interest rates to near historical lows. However, Bernanke and the Fed have recently yanked the pixie stick from the child’s grasp, stating that “tapering” of this “quantitative easing” program will likely occur toward the end of this year. The agitated child, knowing the flow of sugar (liquidity) might end, is throwing an immense temper tantrum, as mortgage rates have increased over 1.25% in the last six weeks alone. 30 year fixed rates are now solidly in the mid 4’s, not mid 3’s, but still attractive, historically speaking.
We all know that as a child comes down off their sugar high, we’ll have heck to pay, but eventually, the behavior has a better chance of being healthy, grounded, and normalized. Makes one wonder what things might have been like if the market had been given a granola bar to begin with……
Mortgage rates climbed for the sixth consecutive week but remain relatively low by historical standards. The uptick in rates can be attributed to improving economic reports and speculation that the Federal Reserve will scale back bond purchases.
The average rate on a 30-year fixed loan achieved a 14-month high and is closing in on the 4 percent mark. According to the latest survey by mortgage buyer Freddie Mac, the average on a 30-year fixed-rate mortgage is up 0.07 percentage point from last week, climbing from 3.91 percent to 3.98 percent. Continue reading
Mortgage rates climbed for the third consecutive week, according to the latest survey by mortgage buyer Freddie Mac. The average for a 30-year fixed-rate mortgage now hovers a quarter percentage point higher than it did at the beginning of the month.
The average rate on a 30-year fixed-rate loan climbed to 3.59% this week, up 0.08% from a week ago. Prior to last week’s climb to 3.51%, the 30-year fixed had remained below the 3.5% threshold for more than a month. However, the average is still well below the average rate from a year ago, 3.78%. Continue reading
Home prices across the Sacramento region posted another hefty gain in April, and are now a third higher than they were a year ago, according to a new report by industry watcher Dataquick.
In Sacramento County, the median sales price of a detached resale home rose from $208,000 in March to $215,000 in April. The April price was up nearly 33 percent from April 2012, when it stood at $162,000, Dataquick said. Continue reading
It’s a sorry state of affairs when personal finances punctuated by large-scale debt are the norm instead of the exception in our society. It may not be your fault, however.
The average college students graduates with nearly $30,000 in debt. Buy your first car and that tacks on another $20,000. Add in the average household credit card debt and you’re looking at around $60,000 total in debt. That’s a lot.
This debt-load may end up costing you your dream house. Lenders want buyers who have excellent credit scores. A large amount of debt can reduce your credit score. A large debt-to-income ratio can also be quite damaging.
Living a debt-free lifestyle is possible and there’s no better time to start than now.
The median existing single-family home price posted its biggest annual gain in more than seven years in the first quarter of 2013,
as market conditions for home sellers continued to improve and home sales increased, the National Association of Realtors (NAR) reported today.
The median home price leaped 11.3 percent on an annual basis in the first quarter of 2013, rising from $158,600 to $176,600, according to NAR’s latest quarterly report. That represents the largest year-over-year price gain since the fourth quarter of 2005, when the median price jumped 13.6 percent, NAR said. Continue reading
Q: We have loan approval, have a 20% downpayment and have signed off on the one contingency we had (an electrical issue found on inspection). The appraisal came in at almost $20,000 below the contract price. It seems that the sellers are almost underwater on their mortgage, and had to bring money to the table to reach the contract price. We are being urged to try another lender, as the listing agent and our own agent seem to think our lender (a major bank) purposely gives low appraisals. This sounds suspicious to us. Is this the norm? We’re about to walk away from the deal, as it seems there is no way to make it work. Continue reading
FICO is a credit-scoring system established by the Fair Isaac Corp. FICO scores are calculated to determine the probability of credit users paying their bills. FICO scores have become the lending industry’s benchmark for credit-granting decisions. However, not all lenders use FICO scores to determine creditworthiness. Some lenders use scores from other agencies such as Scorex. Many lenders look to the three major credit-reporting bureaus — Equifax, Experian and Transunion in making their lending decisions.
Credit scores range from about 300 to 850. According to Freddie Mac and Fannie Mae, which purchase mortgages from banks and resell them to investors, a FICO score above 620 is considered good. However, says Fair Isaac, “A 620 score doesn’t mean you’re going to qualify for the best rate. It means you’re going to qualify for a standardized rate, or a prime rate. ‘Prime’ is a broad category, so lenders will have different loan products that classify as ‘prime’ rates.’ ” The interest rate lenders charge their most creditworthy customers is described as the prime rate. The prime rate is based on the fed funds target rate set by the Federal Reserve.
Most mortgage applicants have things to clear up financially before being able to achieve a good credit score. Consumers should regularly review their credit reports to make sure there are no errors on them. Any adverse-credit indications, accounts showing payments over 30 days late, collections, judgments, bankruptcies or foreclosures will lower a credit score. It is best to pay off old accounts, judgments and collections before applying for a mortgage. And once these accounts are paid off, wait until they are being reported on your credit reports as “satisfied” or “paid.” Continue reading
As the time to file income taxes approaches, we need to take a new look at the changing tax landscape for homeowners. The dynamic atmosphere in Washington, D.C. has a different effect each year on which tax breaks are proposed, rescinded, changed, and extended for taxpayers who own a home.
Thanks to the efforts of many real estate industry groups including the National Association of Realtors, many of the tax benefits that homeowners enjoy–which were on the chopping block over the past few months–have been protected and extended through the 2013 tax season. Continue reading
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The median sales price of existing, single-family homes in Sacramento County climbed sharply in February compared with the same month in 2012, the California Association of Realtors said.
In Sacramento County, February’s median of $203,540 was about 24.5 percent higher than $163,530 in February last year. February’s median also was up about 1.3 percent from $201,010 in January.
After years in the doldrums, the housing market appears back on track. Home sales and prices are up, and mortgage rates remain near historic lows, reinvigorating the appeal of homeownership. But qualifying for a home loan remains a hurdle for anyone without a solid personal balance sheet. “Now the requirements are much stricter,” said Erin Baehr, a certified financial planner in Stroudsburg, Penn. “You have to have the right income, you have to have the right credit score and you have to have the right down payment to get the best rates out there.” In addition, a tight supply of homes for sale in many markets means sellers often have the leverage that comes with receiving competing offers. That means buyers with the financial flexibility to raise their offer stand a better chance of winning out — another reason to bolster one’s finances before entering the homebuying fray. Here are six tips to get financially prepared to purchase a home: Continue reading
When you’re in the process of buying a property and financing your purchase, you probably would like to make sure your lender is giving you a fair deal. In order to make that determination, you need to get at least two bids from different lenders. They should give you these bids, which show the total costs and the interest rate you are eligible for, on the federally required Good Faith Estimate (GFE) form.
Theoretically, you can use the different lenders’ good faith estimates to compare the cost of financing between those lenders. This, however, is easier said than done because the costs that are most relevant to determining whether you’re getting the best deal — loan origination charges, credits and points — are mixed among other costs that are not determined by the lender. The combined costs are noted on page 2 of the GFE under “Estimated Settlement Charges.” Continue reading
Mortgage rates for 30-year fixed mortgages rose this week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 3.46 percent, up from 3.43 percent at this same time last week.
The 30-year fixed mortgage rate hovered between 3.44 and 3.5 percent for the majority of the week, dropping to the current rate this morning.
“Rates remained fairly flat this week with little news to suggest a change in slow-but-steady growth trends both in the United States and abroad,” said Erin Lantz, director of Zillow Mortgage Marketplace. “Due to the short week, we expect to see very little movement in mortgage rates this week.” Continue reading
Q: Will I be able to get a mortgage being self employed?
My husband and I have been self employed for three years and we both have credit scores in the 640-660 range. We have been paying down our debt and currently have a credit utilization of about 45%. Still have two credit cards to pay down. Our income is just under $30,000, is it likely that we will be able to get a mortgage?
A: There are many factors involved in getting a loan.
However, to answer directly your question, if you are self employed and your tax returns reflect your income needed to qualify, you should be able to get a mortgage. If you are interested, I can set you up with a mortgage professional who can answer all questions you have regarding mortgages. It certainly sounds as if you are doing all things correct.
A: For the self-employed that are considering purchasing a home it’s important to be aware of the changes that have occurred in the world of lending. Continue reading
Taxes are due April 15, which means it’s time to start gathering your W2s, 1099s, child care receipts and bank statements.
But before you sit down with your accountant, it’s important for you to know that merely owning a home could mean you qualify for tax breaks. In most cases, you need to itemize your taxes in order to take advantage of these deductions. Yes, it makes the tax-filing process seem impenetrable, but the benefits may outweigh the complications.
Here are a few of the tax breaks you’ll want to investigate:
Mortgage interest paid at settlement
Take a look at your closing statement; one item that’s generally listed there is home mortgage interest. On a mortgage of up to $1 million, you can deduct the interest that you pay at settlement if you itemize your deductions on Schedule A (Form 1040). This amount should be included in the mortgage interest statement provided by your lender.
Did you pay points in order to obtain your home mortgage? These fees are included on the income tax deductions list and can be deducted as long as they are associated with the purchase of a home. If you refinanced your home, these points are still deductible, but it must be done over the life of the mortgage.
As long as they are based on the assessed value of the real property, you can deduct your state and local property taxes. However, if your money is being held in escrow for the purpose of paying property taxes, you cannot claim this deduction until the money is actually taken out of escrow and paid. If you do this, check your Form 1098 for the amount you may deduct. Be aware that if you receive a partial refund of your property tax, the amount of the deduction you can claim will be reduced. Continue reading
With spring around the corner, open house season will soon be upon us. If you’ve listed your home for sale, you’ve probably already worked on making small repairs, de-cluttering, and generally sprucing up your home. Now is the time to start thinking about whether you want to hold an open house. And if the answer is yes, here are a few secrets to having the best open house in town:
- Stage your home for viewing. Since you have plenty of time to get ready for the day, take the time to artfully arrange your furnishings and belongings in an appealing manner. Remember that prospective homebuyers will have license to peek into your closets and cupboards, so make sure that they’re well organized and give a sense of spaciousness. For an added touch, buy some fresh flowers and put them out. Leave fluffy towels and pretty soaps out in the bathrooms. And the smell of freshly baked cookies is always appealing. Continue reading
The median home price nationwide saw its biggest jump in seven years last quarter as for-sale inventory hit its lowest level in 12 years, according to a quarterly report from the National Association of Realtors.
Of 152 metro areas, 133 (87.5 percent) saw their median sales prices rise year over year in fourth-quarter 2012 compared with 120 in the third quarter and only 29 in fourth-quarter 2011.
Nationally, the median sales price jumped 10 percent on an annual basis, to $178,900 — the strongest annual price increase since fourth-quarter 2005 when the median rose 13.6 percent, NAR said.
“Home sales are on a sustained uptrend; mortgage interest rates are hovering near record lows; and unsold inventory is at the lowest level in 12 years,” said Lawrence Yun, NAR’s chief economist, in a statement. Continue reading
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The 10 largest real estate listing portals are capturing nearly half of all nonmobile traffic to U.S. real estate-related websites, according to aggregate Web visit metrics compiled by Experian Marketing Services (formerly Experian Hitwise).
The top 10 real estate websites captured 42 percent of total visits in the space during January, with Zillow (9.17 percent market share), Trulia (7 percent) and Realtor.com (6.09 percent) leading the pack. Continue reading
Low mortgage rates have made buying a home more affordable and turned rentals into an attractive option for investors.
Throughout the downturn in the housing market, average investors, sometimes pooling their money, have bought foreclosures at a sharp discount and turned them into rentals. Many homeowners also have purchased a second home and rented out their first property.
Although the housing market is showing signs of recovery, demand for rental housing is expected to remain strong. The national unemployment rate remains high at 7.9 percent, banks are still working through a backlog of foreclosures and tight lending requirements prevent many renters from becoming homeowners. Continue reading
There’s an interesting phenomenon happening in the real estate buying cycle.
Now that most of the country is five to seven years out from its real estate peak, and most major cities are actually into the upswing of home prices, distressed homeowners of yesteryear are becoming the home buyers of today.
Rules for qualifying for a mortgage vary widely between lenders and loan programs, but one of the most-often used loans today is the FHA mortgage. Continue reading