ShareThisTake the Stress Out of Homebuying!
Buying a home should be fun but it can be a little stressful. As you look for your dream home, keep in mind these tips for making the process as peaceful as possible.
1. Find a real estate agent who you connect with. Home buying is not only a big financial commitment, but also an emotional one. It’s critical that the agent you chose is both highly skilled and a good fit with your personality.
2. Remember, there’s no “right” time to buy, just as there’s no perfect time to sell. If you find a home now, don’t try to second-guess interest rates or the housing market by waiting longer- you risk losing out on the home of your dreams. The housing market usually doesn’t change fast enough to make much difference in price, and a good home won’t stay on the market long.
3. Accept that no house is ever perfect. If it’s in the right location, the yard may be a bit smaller than you had hoped, but the kitchen is perfect. Make a list of your top priorities and focus in on things that are most important to you. Let the minor ones go.
4. Remember your home doesn’t exist in a vacuum. Don’t get so caught up in the physical aspects of the house itself-room size, kitchen, etc.- that you forget about important issues as noise level, location to amenities, and other aspects that also have a big impact on your quality of life.
5. Plan ahead. Don’t wait until you’ve found a home and made an offer to get approved for a mortgage, investigate home insurance, and consider a schedule for moving.
6. Factor in maintenance and repair costs in your post-home buying budget. Even if you buy a new home, there will be costs. Don’t leave yourself short and let your home deteriorate.
7. Accept that a little buyer’s remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big financial commitment. But it also yields big benefits. Don’t lose sight of why you wanted to buy a home and what made you fall in love with the property you purchased.
I wish everyone a Happy Holiday!
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8 Tips for Your Home Search
1. Research before you look– Decide what features you most want to have in a home, what neighborhoods you prefer, and how much you’d be willing to spend each month for housing.
2. Be realistic– It’s OK to be picky, but don’t be unrealistic with your expectations. There’s no such thing as a perfect home. Use your list of priorities as a guide to evaluate each property.
3. Get your finances in order– Review your credit report and be sure you have enough money to cover your down payment and closing costs. Then, talk to a lender and get pre- qualified for a mortgage. This will save you the heartache later of falling in love with a house you can’t afford.
4. Don’t ask too many people for opinions– It will drive you crazy. Select one or two people to turn to if you feel you need a second opinion, but be ready to make the final decision on your own.
5. Decide your moving timeline– When is your lease up? Are you allowed to sublet? How tight is the rental market in your area? All of these factors will help you determine when you should move.
6. Think long term– Are you looking for a starter house with plans to move up in a few years, or do you hope to stay in this home for a longer period? This decision may dictate what type of home you’ll buy as well as the type of mortgage terms that will best suit you.
7. Insist on a home inspection– If possible, get a home warranty from the seller to cover defects for one year.
8. Get help from a Buyer’s Agent– Hire a real estate professional to represent you. Not the listing agent who represents the seller.
Some First-Time Home Buyers are Scrambling to Meet The Deadline for The $8,000 Tax Credit!
The $8,000 tax credit is a blessing formost first-time home buyers and could become a curse for the one’s that don’t make the deadline. Today is Oct. 26th, if a buyer doesn’t have a ratified contract in process the odds of a buyer making it to settlement by the Nov. 30th deadline is going to be very unlikely.
Many title companies and mortgage companies I have spoken with are swamped trying to meet the deadline. I am hoping that the deadline gets extended but no word yet. Just a lot of speculation. A few words of advice to any buyer trying to meet the deadline.
1. Talk with your agent and lender once or twice a week for progress reports. You don’t want anything to fall through the cracks.
2. Make a check list of things you must do and get them done quickly.
3. If the lender or the processor contacts you about information they need from you get it to them immediately.
4. If your settlement or closing date is scheduled for Nov. 30th try to move it up a day or two (check with your agent or lender). If you can avoid the last day that would be great!
5. If you are just writing you offer on a property you must accept that you might not make the deadline. Your lender will try but most will not guarantee Nov. 30th.
The month of November will be a little crazy for some just hang in there the end results could be worth it!
Always Know Your Numbers!
In today’s world 85% of consumers starttheir home buying search for properties on the Internet. Many potential home buyers whom are referred to me will give me a list of properties they have been looking at on the Internet and some time they have actually driven the area and viewed the properties from the outside. While I applaud the dedication and seriousness of the clients most have not been prequalified and “know their numbers.”
The first step in the home buying process for everyone no matter the price range is to get prequalified so you know your numbers. Especially in this market. Lender guidelines are changing sometime daily.
These are the numbers you should always know before you start your home search;
1. What is my qualification amount?
2. What is my estimated interest rate?
3. How much down payment and closing cost do I need?
A lender can provide this for you in the form of a Good Faith Estimate in writing. I will not show houses to clients who do not know their numbers. If you request a Good Faith Estimate from a lender and he or she refuse to give you one I would proceed with caution. I can also assist you in obtaining one. So get a Good Faith Estimate and take some of the stress out of the home buying process.
And always KNOW YOUR NUMBERS!
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Community Development Block Grant Program (CDBG) $5,000 for Closing Costs and Down Payment Assistance
Baltimore City’s Community Development Block Grant Program started this month. The program provides funding that can be used as closing cost and downpayment assistance. Only first-time home buyers with family incomes of 80 percent or below the area median income qualify for the program.
Community Development Block Grant Program 2009 Income Limits are:
1 person $44,800
2 person $51,200
3 person $ 57,600
4 person $64,000
5 person $69,100
6 person $74,250
7 person $79,350
8 person $84,500
What are the benefits?
$5,000 down payment and closing assistance structured as a 5-year loan forgivable 20 percent per year. Buyer must contribute at least $1,000 towards purchase and must use the property as the principal residence. The home must be inspected by a member of the National Association of Home Inspectors or the American Society of Home Inspectors. The home must be free of any flaking, peeling or chipping paint insider and outside, and the home inspector must document no unstable paint surfaces. Closing on the property must occur within 90 days of the contract date. Loan is forgivable over 5 years.
This program is similar to the Baltimore City ADDI Program that started is October 2008 but ran out of funds by January 2009. The ADDI Program was assisting with $10,000 towards closing costs and down payment. Hopefully this program will last longer. Contact me for updates and availability of the funds.
What is “Rescoring!”
If you have paid your bills on time but your credit report says you haven’t, your mortgage lender might be able to fix your report fast. Typically, the three credit bureaus each require at least 30 days to investigate and make changes to your credit report. But if you are in the process of applying for a mortgage, your lender might be able to get the changes made in just a few days. It’s called “Rescoring.”
Rescoring is a service offered only to mortgage lenders by independent credit reporting agencies, which compile information from the three credit bureaus (Equifax, Experian, and TransUnion). The independents can work with the Big Three, fix errors, and then recalculate your credit score. If your score can go up, even a little, after the errors are fixed, you could save thousands of dollars on your mortgage interest.
The key is that rescoring works only on real errors. If you have a low score because you don’t pay your bills on time, then you can’t rescore. You must demonstrate to your lender that you have a legitimate error on your report and provide proof, such as payment records. If your lender does decide you have a legitimate case, you will have to pay up to $150 to have the rescoring done.
Rescoring is really an emergency maneuver. If you are planning to apply for a mortgage, you should get a copy of your credit report first. Go to www.annualcreditreport.com. You can get one free report each year from each of the credit bureaus. You will have to pay to get your score.
Short Sales: When is Offer ‘Accepted’?
There has been some confusion about when a short sale offer is “accepted.” A short sale is a sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. The owner will request that the lender (third party) agree to take less and forgive the rest of what is owed on the mortgage. When an offer is submitted on the property the seller who is still legal owner of the property in most cases  must be the first to “accept” the offer. When the seller accepts an offer under these conditions and a contract is formed, the offer is “accepted,” although it will have at least one unresolved contingency: the lender’s approval of the short sale.
If a seller receives more than one offer on the property, the seller picks the best one and signs that offer only and sends it to the lender. I hope this clarifies when an offer is “Accepted.”
Who is a First-Time Home Buyer?
“First-time home buyer” is defined by the Cranston-Gonzalez National Affordable Housing Act of 1990. The code specifies:
The term “first-time home buyer” means an individual and his or her spouse who have not owned a home during the 3- year period prior to purchase of a home with assistance under subchapter II of this chapter, except that– (A) any individual who is a displaced homemaker may not be excluded from consideration as a first-time home buyer under this paragraph on the basis that the individual, while a homemaker, owned a home with his or her spouse or resided in a home owned by the spouse; (B) any individual who is a single parent may not be excluded from consideration as a first-time home buyer under this paragraph on the basis that the individual, while married, owned a home with his or her spouse or resided in a home owned by the spouse; and (C) an individual shall not be excluded from consideration as a first-time home buyer under this paragraph on the basis that the individual owns or owned, as a principal residence during such 3- year period, a dwelling unit whose structure is– (i) not permanently affixed to a permanent foundation in accordance with local or other applicable regulations, or (ii) not in compliance with State, local, or model building codes, or other applicable codes, and cannot be brought into compliance with such codes for less than the cost of constructing a permanent structure. (15) The term “singe parent” means an individual who– (A) is unmarried or legally separated from a spouse; and (B) (i) has 1 or more minor children for whom the individual has custody or joint custody; or (ii) is pregnant.”
Federal Home Loan Bank of Atlanta Funds are Available up to $10,000 for First-Time Home Buyers!
The Federal Home Loan Bank of Atlanta funds are available with some participating lenders. Member Banks can access up to $1 million annually and distribute matching FHP awards up to $10,000 per household to eligible home buyers. The program is a 5 to 1 match. If a buyer puts $2,000 of their own funds in the transaction the buyer is eligible for the entire $10,000. Some participating lenders have received their funds and some have not. Contact me to receive a list of participating lenders who have received their funds.
Some of the eligibility requirements for home buyers are as follow;
Funds are only available to first-time home buyers.
A home buyer must owner-occupy the property.
A home buyer must contribute at least $500.
Home buyers must complete home buyer counseling, debt management planning, and default prevention program. The curriculum will include, but is not limited to;
Choosing the right mortgage, avoiding predatory lenders, budgeting and saving, maintaining your new home, and preventing foreclosure.
FHP funds must be used only for down payment and closing costs assistance and must be reflected on the HUD Settlement Statement. FHP funds cannot be used for reimbursement of earnest money deposits, pay discount points, or to pay cash to the borrower at closing.
If you are interested in receiving funds from an participating lender, I would advise you to set up your counseling class immediately. Federal Home loan Bank of Atlanta funds traditionally becomes available in January each year. This year we were informed that the funds would not be available until March 3rd but the participating lenders did not receive funds until April. Many first-time home buyers have been waiting for the program to start since January and they have already completed their counseling requirements. I do not think the funds will last long. With interest rates being low, home prices dropping, plenty of housing inventory, sellers willing to negotiate with buyers, and the $8,000 tax credit the market is starting to heat up. Don’t wait and miss out on a golden opportunity!
Long-Term Mortgage Rates Hit Record Low!
The Washington Business journal reported that the 30-year fixed-rate mortgage rate has dropped to its lowest level on record. The average rate is the lowest in McLean-based Freddie Mac’s weekly survey dating to 1971. Freddie Mac says its Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage averaged 4.85 percent with an average 0.7 point for the week ending March 26, down from last week when it averaged 4.98 percent.
Last year at this time, the 30-year FRM averaged 5.85 percent. The 30-year FRM has not been lower in the life of Freddie Mac’s weekly survey, which dates back to 1971 for the 30-year FRM. Rates for 30-year FRMs peaked last year at 6.63 percent on July 24th. With last week’s 30-Yr FRM, the interest rate difference is almost 2 percentage points, which amount to a savings of about $225 in monthly mortgage payments for a $200,000 loan.
