Archive for Housing Market

May
05

How Purchase Loans Are Made

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A Step-By-Step Walkthrough

1. Pre-approval – Get pre-approved for a mortgage and know in advance exactly how much house you can afford. Completing this step will also increase your negotiating power since you’ll be viewed as a “cash buyer”.
2. Loan Search – Put yourself in the hands of an experienced mortgage professional, someone who will help you to determine which financing options best suit your needs today and in the future.
3. Loan Application – It’s crucial to supply the lender with as much information as possible, as accurately as possible. All outstanding debts as well as assets and income should be included.
4. Documentation – Paperwork supporting the application must also be submitted. Information commonly sought includes pay stubs, two years’ tax returns, and account statements verifying the source of the down payment, funds to close and reserves.
5. The Hunt – Begin shopping for a house. Once you find the right one, the terms of the sale will be negotiated, including the price and potentially the terms of the loan being sought.
6. Appraisal – Lenders require an appraisal on all home sales. By knowing the true value of the home, the borrower is protected from overpaying.
7. Title Search – This is the time when any liens against the property are discovered. A lien may have been placed on a property to ensure payment of outstanding debts by the owner. All liens must be cleared before a transaction can be completed.
8. Termite Inspection – While most purchase loans do not require a formal inspection for termite and water damage, some loans (especially government loans) allow for the possibility. If problems are found, repairs may be necessary.
9. Processor’s Review – All pertinent information will be packaged by your mortgage professional and sent to the lending underwriter, including any explanations that may be needed, such as reasons for derogatory credit.
10. Underwriter’s Review – Based on the information put together by the loan professional, the underwriter makes the final decision regarding whether a loan is approved.
11. Mortgage Insurance – Many lenders require private mortgage insurance when borrowers put down less than 20 percent on a loan.
12. Approval, Denial or Counter Offer – In order to approve a loan, the lender may ask the borrowers to put more money down to improve the debt-to-income ratio. The borrower may also need a bigger down payment if the property appraises for less than the purchase price.
13. Insurance – Lenders require fire and hazard insurance on the replacement value of the structure. Flood insurance will also be required if the property is located in a flood zone. In California, some lenders require earthquake insurance on condominiums.
14. Signing – During this step, final loan and escrow documents are signed.
15. Funding – At this point, the lender will send a wire or check for the amount of the loan to the title company.
16. Confirmation of Funding – The lender authorizes the disbursement of loan proceeds.
17. Closing – Documents transferring title will now be officially recorded by the County Recorder.
18. Congratulations, you are now a homeowner!

If you’d like to learn more, please give me a call. I’d be happy to speak with you!

by

Homeowners’ Tough Decision: OTM, FSBO or List | Keeping Current Matters

At the end of the year, in every region of the country, hundreds of homeowners have a tough decision to make. The ‘listing for sale agreement’ on their house is about to expire and they now must decide to either take their house off the market (OTM), For Sale by Owner (FSBO) or list it again with the same agent or a different agent. Let’s assume you or someone you know is in this situation and take a closer look at each possibility:

Taking Your Home off the Market

In all probability, after putting your house on the market and seeing it not sell, you’re going to be upset. You may be thinking that no one in the marketplace thought the house was worthy of the sales price.

Because you are upset, you may start to rationalize that selling wasn’t that important after all and say,

“Well, we didn’t really want to sell the house anyway. This idea of making a move right now probably doesn’t make sense.”

Don’t rationalize your dreams away. Instead, consider the reasons you decided to sell in the first place. Ask your family this simple question:

“What made us originally put our home up for sale?”

If that reason made sense a few months ago when you originally listed the house, chances are it still makes sense now. Don’t give up on what your family hoped to accomplish or on goals your family hoped to attain.

Just because the house didn’t sell during the last listing contract doesn’t mean the house will never sell or that it shouldn’t be sold.

Re-Listing with your Existing Agent

For whatever reason, your house did not sell. Perhaps you now realize how difficult selling a house is or that the listing price was too high, or perhaps you’re now acknowledging that you didn’t exactly listen to your agent’s advice.

If that is the case, you may want to give your existing agent a second chance. That’s a perfectly okay thing to do.

However, if your agent didn’t perform to the standard they promised when they listed your home you may want to either FSBO or try a different agent.

For Sale by Owner

You may now believe that listing your house with an agent is useless because your original agent didn’t accomplish the goal of selling the house. Trying to sell on your own this time may be alluring. You may think you will be in control and save on the commission.

But, is that true? Will you be able to negotiate each of the elements that make up a real estate transaction? Are you capable of putting together a comprehensive marketing plan? Do people who FSBO actually ‘net’ more money?

If you are thinking about FSBOing, take the time to first read: 5 Reasons You Shouldn’t For Sale by Owner.

List with a New Agent

After failing to sell your home, you may no longer trust your agent or what they say. However, don’t paint all real estate professionals with that same brush. Have you ever gotten a bad haircut before? Of course! Did you stop getting your hair cut or did you simply change hair stylists?

There is good and bad in every profession—good and bad hair stylists, agents, teachers, lawyers, doctors, police officers, etc. And just because there are good and bad in every line of work doesn’t mean you don’t call on others for the products and services you need. You still get your hair cut, see a doctor, talk to a lawyer, send your kids to school, etc.

You initially believed that using an agent made sense. It probably still does. Contact a local real estate professional and discuss the possibilities.

 

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Nov
11

You Served Your Country With Honor

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Nov
10

4 Reasons to Buy a Home

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It’s that time of year, the seasons are changing and with them bring thoughts of the upcoming holidays, family get togethers, and planning for a new year. Those who are on the fence about whether now is the right time to buy don’t have to look much farther to find four great reasons to consider buying a home now, instead of waiting.

1. Prices Will Continue to Rise

The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report released recently projects appreciation in home values over the next five years to be between 11.2% (most pessimistic) and 27.8% (most optimistic).

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Although Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have softened recently, most experts predict that they will begin to rise later this year. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison projecting that rates will be up almost a full percentage point by the end of next year.

An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home. 

3. Either Way You are Paying a Mortgage

As a recent paper from the Joint Center for Housing Studies at Harvard University explains: “Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

4. It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait? Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy.

Bottom Line

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

by KCM

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Oct
15

Making the Leap to home Ownership

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