Thursday, January 29, 2015

Trying to get a Mortgage??

When you go online to look at mortgage rates, it can be confusing. The only way to get the best rate is to talk to real lenders.

First, decide on which loan program you're going to compare. You need to decide between a fixed, an adjustable rate mortgage (ARM) and a hybrid. A fixed rate is fixed throughout the life of the loan, an ARM has an interest rate that can vary throughout the life of the loan and a hybrid is an ARM that is fixed for a predetermined period then adjusts into an ARM.

In the current rate environment, with interest rates near historical lows, most people select a fixed rate, but that depends on how long you want to stay in the home. If you think you'll sell within five years, go for an adjustable rate. If you believe you'll occupy your home for longer, you'll be better off with a fixed rate loan.

You also need to select a loan term, or its amortization period. The most common fixed rate term is the 30-year fixed-rate mortgage. You can also select a 15, 20, and 25-year term. The shorter the term, the lower the interest rate, but the higher your monthly payments will be.

Some buyers opt for the 30-year term, and pay down their principal when they can. Conventional income-to-debt ratios prevent you from having more than 41% of your gross income used toward debt plus mortgage payments. If you have low debt, or are buying a modest home compared to your means (below an income of 28%), get a shorter term so you can build equity faster.

Now you're ready to compare loan rates. Get referrals for three lenders from family and friends. Give each lender you call the same facts -- what kind of loan you want, the term, how much you want to put down toward the purchase price, and your credit score. This is to get preapproved.

Keep in mind that quotes you receive aren't binding on the lender's part until you actually sign an application and share your personal financial information. Once you put a contract on a home, then you can apply with the lender of your choice. That's when you'll receive your good faith estimate, or binding costs.

Mortgage rates can change throughout the day, so compare lenders' rates a close to the same time as possible. You might get a rate quote from a lender on a Friday morning of 4.5 percent then call another lender the following Monday afternoon and get a quote of 3.75 for the very same loan. That doesn't mean the second lender is lower than the first lender, it means the markets may have changed and rates in general have gone down. You need to call back the first lender and get their updated rate quote.

Give your lenders the opportunity to earn your business, just make sure they're all competing under the same conditions. That's the only way to know you're getting the best rate

Friday, January 23, 2015

10 Things That Will Absolutely Kill Your Home Sale

When you're selling your home, you need every advantage you can get. And there are few homes that are magically market ready without a little help. If your home needs a touch more than a little help, it's time to get focused. After all, listing your home when it's not in the right condition to sell will probably only end in frustration. And, in this case, frustration means: your home sitting on the market for months with no offers or the errant, offensive, lowball.
If you want to make sure you get home sold quickly and for the right price, you'll want to avoid listing it with the following:

1. Excessive damage

Maybe the home you're selling was used as a rental and trashed by frat boy tenants, or maybe you just haven't kept it up as you should. Either way, those holes in the wall that look like the living room was used as a boxing gym, the scratched-up wood floors on which dinosaurs have clearly been racing, and the yard that's barren except for those two-foot-tall patches of weeds are not what buyers are looking for. Unless you're planning to offer your house for a price that will make buyers emphasize the good and ignore the bad and the ugly, it's going to need some attention.

2. Carpet in the bathroom

It's just gross. And everyone who walks into that bathroom is thinking one of two things: 1) There's gotta be mold under there; 2) There's gotta be pee on the floor around that toilet. This is one update you'll want to do before you list. Or, if you're already listed and your home's not selling.

3. Big, nasty stains
A buyer shouldn't know where your dog likes to mark or where your kids spilled the entire bowl of holiday punch. If the stains on your carpet are that bad, potential buyers will stroll in and run right back out. No one wants to buy a pigsty. Invest a few bucks in new carpet. You'll make the money back since you won't have to drop your sales price.

4. Pet smells

Speaking of pets…they smell. You probably don't notice since you live with them everyday, but buyers will, and it might be enough to turn them off. Deep clean the carpets and the upholstery, invest in some air fresheners, and remove cat boxes from the house for showings. The last thing you want is a potential buyer referring to your house as "the stinky one."

5. Loud dogs who bark every time someone approaches the home
One last word on pets. Barking happens, whether it's your dog or one that belongs to a neighbor. But you don't need that on the day of your open house. Offering to pay for doggie day care for a neighbor's pooch can eliminate the issue and help create the serene setting buyers want.

6. Your dead lawn
Lack of curb appeal won't necessarily kill a deal. In many cases, you won't even get potential buyers to get out of the car. If the front yard is a mess, buyers will naturally think the mess continues inside.

7. A bad agent
Face it. Not all of them are winners. If your agent is: rude, uninformed, lazy, uncommunicative, belligerent, or unwilling to take your opinions into consideration, get a new one. An agent who isn't giving their client the right type of attention probably isn't going to get the job done.

8. Your sloppiness
Those drawers and cabinets you shoved everything into when you cleaned off your kitchen and bathroom cabinets could be a deal breaker for picky buyers. We all know buyers open stuff. They look in drawers, they open cabinets, they examine closets. If these spaces are messy and overstuffed, they may assume there's not enough storage space.

9. Unreasonable sellers
Big problems in your house can be deal killers, but they can also be deal sealers, if you are reasonable. If your inspection uncovers plumbing, electrical, or roofing problems (or all three!) and you're unwilling to negotiate, you can kiss that sale goodbye.

10. Bad Taste
Your poor decorating choices and failure to keep up with trends from this year—or century—may haunt you when it's time to sell. If it's true that many buyers have no vision—and all you have to do is watch House Hunters and observe a buyer getting hung up on a paint color to know that's true—then you are really in for it with your crowded house full of ugly, outdated crap. A few simple updates can help it to look fresh and give buyers something to fall in love with.

Monday, January 19, 2015

Thinking about Renting Your Home??

As a homeowner, you may be considering moving up to a larger home or a home in a different area. If you've built enough equity, it's a good time to sell because you can cover closing costs when you sell and have enough to put down on another home. But you might want to consider renting your home instead.

There are several reasons why renting a home you already own is a good idea. You used leverage to buy it, and you can also use that same leverage to get into another home while retaining an asset that's already building equity.

You may have more of a market for your home than you may think. Buyer demographics have changed a lot since the beginning of the housing recovery. Investors have decreased and first-time buyers have increased. Both targeted affordable homes at the entry level or distressed homes that could be purchased at bargain prices.

The result is that inventories of homes have shrunk and prices have grown. According to RealtyTrac, the November median sales price, which includes both equity and distressed homes, was $190,000, a 15 percent gain from the previous year.

But here is where the opportunity could be. Prices are up 35 percent from a low of $141,000 in March 2012, but they are still 20 percent below the previous peak of $237,537 in August 2006. If you've already purchased your home, you have already ridden that wave, plus have more distance to go.

As a buyer for your next home, you're still under all-time price highs, and with the reduction in down payment requirements from the Federal Housing Agency, you can get an FHA-guaranteed loan up to $417,000 or more in some high-cost areas.

If you have your home rented, particularly under an 18-month or two-year lease, you can qualify for another home as if you're not already carrying one. That depends on if you have good credit scores, low debt levels, and steady income, of course.

While your house payment isn't tax-deductible, the depreciation and some improvements you've made on your home to prepare it for the market are tax-deductible. Talk to your tax accountant about legal deductions so you can minimize profits and paying taxes on the profits.
The housing industry is carefully watching what the Millennials are doing. You'll be ahead of the tide when this largest demographic in American history starts to buy homes in greater numbers, which they are expected to do in 2015.

The National Association of REALTORS®research division says that renter households have increased by 4 million since 2010 while homeowner households have decreased by 1 million. At the present rate of sales, it will take at least two years for homeowner households to increase, and many years beyond that for the number of homeowner households to reach historical means.

Explains Lawrence Yun, chief economist for the NAR, "The typical homeowner today has a household net worth of around $200,000. Meanwhile, renters aren't benefitting from the rise in prices and are facing annual increases of their own in the form of higher rents."

Rents are at a seven-year high, and low interest rates and moderating price growth are likely to entice more buyers to enter the market in 2015, but with homes already at a 5.1-month supply, there won't be enough inventory to go around and the market for renters will increase. There are also lingering headwinds -- tight credit and lack of wage improvement that may keep some households renting instead of buying.

"We have also seen an increase in the median age and income of the average buyer, as well as in multigenerational household formations as adult children and elderly family members move back in with their families," explains Jessica Lautz, director of member and consumer survey research for the NAR.

As the owner of two homes, you'll be well poised to satisfy the rental or the sales market. That's a nice position to be in

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Thursday, January 15, 2015

Four Ways to determine the value of your Home

Would you like to know the current value of the most expensive asset you own—your home?

With a click of your mouse you can find out how much money you have in the bank or the current value of your investments to the penny. You can look up the value of your car in the Blue Book and surf EBay to see what antiques and prized art pieces similar to yours are selling for.

Unfortunately, determining how much your home is worth is a lot more complicated. Every piece of property is unique and therefore has a value all its own. The rules of supply and demand government real estate markets and changing market forces impact the value of every property, but market trends impact different properties in different ways. By making improvements or by poorly maintaining their homes, owners affect values. When sellers and buyers use the less than perfect ways described below to price homes or make offers on homes, they can impact the values of nearby properties.
Technology is improving the valuation of homes and the appraisal profession works hard to refine techniques and improve accuracy, but at the end of the day, a house is basically worth what someone will pay for it.

You might begin by deciding why you want to know your house's value. Taxes too high? Pricing to sell? Refinancing or financing a purchase? Taking out a home equity line of credit? Valuing an estate? Personal net worth? You can answer some of these questions with a lot less effort than others.
Ranked from easiest to most difficult, here are four ways to find out how much your house is worth.

AVM Estimates. Those calculators on real estate web sites that value homes are called automatic valuation models or AVMs. They were developed by lenders like Fannie Mae and popularized by Zillow. AVMs are algorithms that estimate values based on the wide range of data, including local sales, prices and inventories. Like all calculators, they are no better than the quality of their data. They have difficulty accounting for factors like improvements to homes. Some tend to value on the high side, others on the low side. If you a good picture of the value of your home, look it up on four different AVMs. You'll be surprised at the variations, which suggests you might get a rough estimate if you average all four. You might also think twice about using an AVM estimate to make major decision like selling your home or making an offer.

CMA. If you are already working with a real estate agent, ask them for a CMA, or competitive market analysis, or your home. Unlike the AVM, a real estate professional will do the analysis and will include the value of improvements and hyper-local changes that might affect the value of your property like transportation improvements, new retail services and schools. Your real estate agent also has access to the latest sales and inventory data from your local multiple listing service. Ask for a download of the latest data for your locale.

Do it Yourself. Even if you know a lot about real estate and economics it's hard to come in with a good valuation on your own because good local data is so hard to find. The best sources are multiple listing services and firms like DataQuest, CoreLogic and RealtyTrac that cost money. Few MLSs make their data available to the public but you can get good, current MLS data from your Realtor if you ask for them. By monitoring listings and sales activity in your neighborhood through online real estate sites you can get a good feel for the market. Long times on market and price cuts are not good signs; fast sales are good signs.

Appraisals. When it comes to financing a home, an appraisal by a licensed professional is almost always required. Sometimes lenders will do an AVM estimate on a refi when they know the owner. Appraisals include on-site inspections and the selection of "comps" or comparable sales - homes of the same size close to you that have sold in the past six months. Appraisers also review local market trends. An appraisal may not be the final word on the value of your home in an absolute sense; appraisers are human and two appraisers may come up with two different values. However, it's unlikely someone would buy your house for more than the appraised value plus the down payment.

By following market trends on local real estate web sites including your local newspaper, real estate brokerages and the larger real estate listing sites that provide research and data you can get a good feel for what to expect in your local market. Real estate is all about supply and demand. When a new employer comes to town or a new plant opens, the demand for housing increases and prices rise. When the opposite occurs, prices fall. Keep track of inventory trends - they are the keys to tomorrow's prices.

Thursday, January 8, 2015

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Seller's Advice: Your Checklist for An Impressive Showing

Once your home goes on the market, real estate agents may call to show your home anytime, day or evening. Keeping your home "showtime" ready can be challenging, especially if you have children and pets.

What you need to stay organized is a handy checklist so you can be ready to show at any time. When you get the call that buyers are on their way, give everyone in the household a basket and assign them each to a room to pick up clutter quickly. Set a timer and tell everyone to grab up any toys on the floor, clear tabletops and countertops of junk, and quickly Swiffer-sweep the floors. Check for hazards like dog chews on the floor.

Turn on all the lights, and get ready to skedaddle. You have to let buyers have privacy so they can assess your home honestly. Take the kids for an outing. Put pets in daycare, sleep cages or take them with you:

Keep your home show-ready with these nine tips:

Eliminate clutter: Not only is clutter unattractive, it's time-consuming to sort through and expensive for you to move. If you have a lot of stuff, collections, and family mementoes, you would be better off renting a small storage unit for a few months.

Keep, donate, throw away: Go through your belongings and put them into one of these three baskets. You'll receive more in tax benefits for your donations that pennies on the dollar at a garage sale. It's faster, more efficient and you'll help more people.

Remove temptations: Take valuable jewelry and collectibles to a safety deposit box, a safe, or store them in a secure location.

Remove breakables: Figurines, china, crystal and other breakables should be packed and put away in the garage or storage.

Be hospitable: You want your home to look like a home. Stage it to show the possibilities, perhaps set the table, or put a throw on the chair by the fireplace with a bookmarked book on the table.

Have a family plan of action: Sometimes showings aren't convenient. You can always refuse a showing, but do you really want to? If you have a showing with little notice, get the family engaged. Everyone has a basket and picks up glasses, plates, newspapers, or anything left lying about.

Remove prescription medicines: Despite qualifying by the buyer's agent, some buyers have other intentions than buying your home. It's also a good idea to lock your personal papers such as checkbooks away. Do not leave mail out on your desk.

Get in the habit: Wash dishes immediately after meals. Clean off countertops. Make beds in the morning. Keep pet toys and beds washed and smelling fresh.

Clean out the garage and attic: Buyers want to see what kind of storage there is.