It happens to thousands of homeowners each year. They find their dream home but are outbid by another buyer. Out of frustration they buy the next house they see. BAD IDEA!!!
Sure, it's disappointing to lose the "perfect" house. But rushing to find a replacement can bring an even greater regret. The fact is that most home buyers face some kind of a setback during their home search...albeit it pricing or financing or timing. The key is to approach each step in the home buying process as part of a valuable learning experience.
Finally, buying a home is not the ultimate goal. Buying the right home is the goal. Compromising with an inadequate choice is a sure path to Buyer's remorse. I found out a long time ago that there will be another house coming on the market soon very often better than the first one you thought was the "perfect" house.
Courtesy of Sherri Buttler, Sun American Morgage Company sherri.buttler@SunAmerican.com
Wednesday, September 30, 2009
MORTGAGE IS DENIED? HERE'S WHAT TO DO
Talk about raining on your parade! You find your home, make an offer & then learn that your loan application as been turned down. What to do now?
You may be able to turn a "NO" into a "YES" by taking the right steps:
Low appraisal-Try negotiating with the Seller or consider making a larger down payment should you have the money.
Not enough up front Cash-Lender determines that you don't have enough money to cover the downpayment + closing costs. Ask the Seller to assume some of the closing costs or consider a non-repayable gift of funds from a relative. Your lender will instruct you how to document this gift.
Insufficient Income-Due to governments "Making Homes Affordable" program, lenders are using a 31/38 rule when calculating allowable loan limits. Monthly PITI (principal, interest, taxes & insurance) should not be more than 31% of your gross monthly income. Your total debt (car loans, credit cards etc.) plus the PITI should not exceed 38% of your gross monthly income. If your credit record is good & you've been carrying an equivalent housing payment, try to convince the lender to ease this guideline. If you or your spouse are expecting a salary increase, tell the lender who can then verify the forthcoming income increase.
Unsatisfactory credit (FICO) score--Lenders are looking for defaults, bankruptcies as well as late or missed monthly payments. The lender needs to know the full picture if these issues are due to an illness, job layoff, marital problems or other short-term situations. If you've regained financial stability for at least a year, the lender may reconsider. If you have an up-and-down credit history, the only solution is to reestablish prompt payment practices. There are also a few good lenders that will assist you in "cleaning up" your credit report and therefore increasing your FICO score. Please contact me and I can refer you to these lenders which do not charge for this service...they just want to handle your loan when it comes time to buy.
You may be able to turn a "NO" into a "YES" by taking the right steps:
Low appraisal-Try negotiating with the Seller or consider making a larger down payment should you have the money.
Not enough up front Cash-Lender determines that you don't have enough money to cover the downpayment + closing costs. Ask the Seller to assume some of the closing costs or consider a non-repayable gift of funds from a relative. Your lender will instruct you how to document this gift.
Insufficient Income-Due to governments "Making Homes Affordable" program, lenders are using a 31/38 rule when calculating allowable loan limits. Monthly PITI (principal, interest, taxes & insurance) should not be more than 31% of your gross monthly income. Your total debt (car loans, credit cards etc.) plus the PITI should not exceed 38% of your gross monthly income. If your credit record is good & you've been carrying an equivalent housing payment, try to convince the lender to ease this guideline. If you or your spouse are expecting a salary increase, tell the lender who can then verify the forthcoming income increase.
Unsatisfactory credit (FICO) score--Lenders are looking for defaults, bankruptcies as well as late or missed monthly payments. The lender needs to know the full picture if these issues are due to an illness, job layoff, marital problems or other short-term situations. If you've regained financial stability for at least a year, the lender may reconsider. If you have an up-and-down credit history, the only solution is to reestablish prompt payment practices. There are also a few good lenders that will assist you in "cleaning up" your credit report and therefore increasing your FICO score. Please contact me and I can refer you to these lenders which do not charge for this service...they just want to handle your loan when it comes time to buy.
Tuesday, September 22, 2009
FIRST TIME HOMEBUYER CREDIT ENDS DECEMBER 1, 2009
To qualify for this credit, the closing date for the home must take place after December 31, 2008 and before December 1, 2009. If a taxpayer is building a home they must occupy the home between those dates. The credit amoung is the lesser of 10% of the purchase price of the home or $8000. The home must be occupied by the taxpayer for 36 months. In addition, the taxpayer must not have owned a home in the United States for three years prior to taking the credit. Selling or converting a home to rental property before the 36-month perior may subject the taxpayer to repayment of the credit. The credit is not available for vacation homes or rental property. In addition, this credit also has a phase-out range based on income. You can find details on the IRS website http://www.irs.gov/
Monday, September 21, 2009
HOME INSPECTIONS ARE A MUST! DEMAND ONE!
As a buyer you have the right to know what you are buying...especially in today's foreclosure market where homes are being purchased in AS IS condition with no guarantees or warranties. A professional home inspection is something you MUST do regardless whether or not it is a new or pre-owned home. This inspection is an opportunity to have an expert look closely at the home you are considering purchasing. It is best to have all the inspectors findings in a written report and not rely on an oral opinion as they are easily misinterpreted.
Make sure your inspector is Stated licensed and a member of ASHI (American Society of Home Inspection). Accompany the inspector to the inspection if possible and ask questions. If you can't be present ask a family member or close friend to represent you.
Most real estate contracts provide for an inspection to be done within a certain time period. This inspection clause is considered a contingency to your purchasing the home. If you don't approve the inspection, you don't have to buy. Many times the seller will make the necessary repairs found in the Inspection
Report but sometimes they won't (as in FHA and Bank Owned Foreclosures). If you do not approve the inspection report and wish to cancel the contract, ALWAYS put your cancellation in writing within the time period specified in the purchase contract.
Make sure your inspector is Stated licensed and a member of ASHI (American Society of Home Inspection). Accompany the inspector to the inspection if possible and ask questions. If you can't be present ask a family member or close friend to represent you.
Most real estate contracts provide for an inspection to be done within a certain time period. This inspection clause is considered a contingency to your purchasing the home. If you don't approve the inspection, you don't have to buy. Many times the seller will make the necessary repairs found in the Inspection
Report but sometimes they won't (as in FHA and Bank Owned Foreclosures). If you do not approve the inspection report and wish to cancel the contract, ALWAYS put your cancellation in writing within the time period specified in the purchase contract.
Friday, September 18, 2009
TO TWITTER OR NOT TO TWITTER....THAT IS THE QUESTION
If you don't know what it means to "Twitter" you may be behind the times. Social media tools like "twitter" are as popular and user friendly as yesterday's PDA's. Other social media trends include Google Reader, Twitter , Activerain and Facebook which are the new wave in connecting with others. These new avenues seem to bring networking circles closer together and allow more frequent communication. While we may not know whether these new methods of mass media are a blessing or a curse, it is probably a good idea to at least get familiar with them. If you don't, you may just be missing the boat that's leaving port.
Facebook seems to be used in more of a business or professional setting. It provides pictures of people and periodic updates as to what these people are doing. Twitter requires communications to be in bytes of approximately 140 characters or less. Ironically one of the most valuable aspects of Twitter is developing the skill of communicating a mouth full in a few choice words.
One of the best things about these new methods of communications is that by and large they are free. As postage becomes more expensive and takes more time, it makes sense to use the Internet as a creative chatter box.
Facebook seems to be used in more of a business or professional setting. It provides pictures of people and periodic updates as to what these people are doing. Twitter requires communications to be in bytes of approximately 140 characters or less. Ironically one of the most valuable aspects of Twitter is developing the skill of communicating a mouth full in a few choice words.
One of the best things about these new methods of communications is that by and large they are free. As postage becomes more expensive and takes more time, it makes sense to use the Internet as a creative chatter box.
Thursday, September 17, 2009
TIPS FOR FORTHCOMING 2010 CENSUS - PROCEED WITH CAUTION
There will be a mass mailing of US Census forms to fill out in 2010. Be CAUTIOUS of what information you give to any Census worker---NO Social Security Number, NO Banking Information or addresses of rentals. (tax returns reflect that information.) and NO SALARY INFO. With the U.S. Census process beginning, the Better Business Bureau (BBB) advises people to be cooperative, but prudent, so not to become a victim of fraud or identity theft.
The first phase of the 2010 U.S. Census is under way as workers have begun verifying the addresses of households across the country. Eventually more than 140,000 Census workers will count every person in the US and will gather information about every person living at each address, including name, age, gender, race and other relevant data.
The big question is - How do you tell the difference between a U.S. Census worker and a con artist? The BBB offers the following advice: If a U.S. Census worker knocks on your door, they will have a badge, a handheld device, a Census Bureau canvas bag, and a confidentiality notice. Ask to see their identification and their badge before answering their questions. And NEVER invite anyone you don't know into your home.
Currently, Census workers are only knocking on doors to verify address information. Do not give your Social Security number, credit card or banking information to anyone, even if they claim they need it for the
U.S. Census. While the Census Bureau might ask for basic financial information, such as a salary range, it will not ask for Social Security, bank account, or credit card numbers nor will employee solicit donations.
Finally, Census workers may contact you by telephone, mail, or in person at home. However, they will NOT contact you by Email, so be on the lookout for Email scams impersonating the Census. Never click on a link or open any attachments in an Email that are supposedly from the U.S. Census Bureau.
FOR MORE INFORMATION OR ADVICE VISIT http://www.bbb.org/
The first phase of the 2010 U.S. Census is under way as workers have begun verifying the addresses of households across the country. Eventually more than 140,000 Census workers will count every person in the US and will gather information about every person living at each address, including name, age, gender, race and other relevant data.
The big question is - How do you tell the difference between a U.S. Census worker and a con artist? The BBB offers the following advice: If a U.S. Census worker knocks on your door, they will have a badge, a handheld device, a Census Bureau canvas bag, and a confidentiality notice. Ask to see their identification and their badge before answering their questions. And NEVER invite anyone you don't know into your home.
Currently, Census workers are only knocking on doors to verify address information. Do not give your Social Security number, credit card or banking information to anyone, even if they claim they need it for the
U.S. Census. While the Census Bureau might ask for basic financial information, such as a salary range, it will not ask for Social Security, bank account, or credit card numbers nor will employee solicit donations.
Finally, Census workers may contact you by telephone, mail, or in person at home. However, they will NOT contact you by Email, so be on the lookout for Email scams impersonating the Census. Never click on a link or open any attachments in an Email that are supposedly from the U.S. Census Bureau.
FOR MORE INFORMATION OR ADVICE VISIT http://www.bbb.org/
Wednesday, September 16, 2009
REAL ESTATE MOVES-TOP MOST FORGOTTEN ITEMS
When you are running around on moving day, here are some items to remember:
A. Copies of family medical records, vet records and prescriptions to transfer to a destination pharmacy. Also your child's permanent school record and shot records.
B. Anything that you have placed in a hidden spot....like jewelery, wills or other valuables.
C. Check with the dry cleaners to make sure you haven't forgotten to pick up your favorite piece of clothing.
D. Keep your new address handy....you may be so stressed that you can actually forget it.
E. Leave out cleaning supplies for a final cleaning. Many of these items mover's won't transport anyway.
F. Don't pack your garage door openers and appliance instruction manuals. Put them in the cabinet over the stove with a sign for the movers "Don't Pack" on the doors. Spare house keys, mailbox keys and pool keys should be placed there too.
G. Don't forget your pets. Make arrangements for their transport....just don't leave them with the house....like so many people are doing these days.
H. Open a destination bank account about a month before your move so that you will have immediate access to your funds and local bank checks. This also gives the Title company an account for the transfer of closing funds from the sale of your home.
I. Collect all the spare keys (from neighbors or other outside hiding places) and leave them in a predetermined spot for the new owners.
A. Copies of family medical records, vet records and prescriptions to transfer to a destination pharmacy. Also your child's permanent school record and shot records.
B. Anything that you have placed in a hidden spot....like jewelery, wills or other valuables.
C. Check with the dry cleaners to make sure you haven't forgotten to pick up your favorite piece of clothing.
D. Keep your new address handy....you may be so stressed that you can actually forget it.
E. Leave out cleaning supplies for a final cleaning. Many of these items mover's won't transport anyway.
F. Don't pack your garage door openers and appliance instruction manuals. Put them in the cabinet over the stove with a sign for the movers "Don't Pack" on the doors. Spare house keys, mailbox keys and pool keys should be placed there too.
G. Don't forget your pets. Make arrangements for their transport....just don't leave them with the house....like so many people are doing these days.
H. Open a destination bank account about a month before your move so that you will have immediate access to your funds and local bank checks. This also gives the Title company an account for the transfer of closing funds from the sale of your home.
I. Collect all the spare keys (from neighbors or other outside hiding places) and leave them in a predetermined spot for the new owners.
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