Home Buyer Resource

sudoadmin
April 18, 2012

How to adjust your underwater mortgage

Bakersfield’s real estate bust was certainly one of the worst in the country, and because of that, many homeowners have faced real challenges when evaluating the mortgage on their home. To a lesser extent, there was also plenty of pain felt by homeowners along the Central Coast too. Underwater homeowners wistfully listen to radio ads boasting refinances with ‘record low interest rates’, knowing that taking advantage of those rates in a refinance is simply out of the question.

Compounding an already impossible problem, some homeowners also have an Option ARM that has reset, or is about to.

The Federal HARP (Home Affordable Refinance Program) was announced in early 2009, but few were able to take advantage of the program and one of the primary challenges were the limitations around loan-to-value requirements.

Simply stated, if your mortgage was more than 125% of your home’s current value, you were simply out of luck. And, in many places in Bakersfield’s housing market, we’ve seen as much as 50% of property values simply disappear.

Who Is Eligible for HARP 2.0 Refinance

Reach out to your lender for specific questions or contact our mortgage partner, Prime Lending. Here are some of the things you’ll want consider to determine whether or not you might be eligible for a HARP Refinance are the following:

You cannot have made more than one late payment in the last 12 months, and none in the last 6 months
The loan amount cannot exceed current conforming loan limits. California’s upper conforming loan limit is $625,000.
Your existing loan closed prior to May 31, 2009.
You’ve not done a HARP refinance. If you took advantage of HARP 1.0, you are not eligible for HARP again.
Second mortgages are allowed, but the second must approve.
Second homes and investment properties ARE eligible.
You may not use HARP if you have an FHA loan. For those homeowners, try the FHA Streamline Refinance Program.
There is 105% loan-to-value limit if HARP is used to refinance an adjustable rate mortgage or an Option ARM. If you need help with understanding what your valuation is, do not rely on Zillow – it is very inaccurate. Contact a Century 21 Hometown Realty Agent.
Loan is guaranteed by Fannie Mae or Freddie Mac. This is has nothing to do with who you make your mortgage payments to. To find out if your is guaranteed, check Fannie Mae and check Freddie Mac.

I know this is some downright gripping reading, but I suspect if you are one of the homeowners that can benefit from a HARP refinance, you may very well be on the edge of your seat. If you have questions, if you are curious about your eligibility, don’t hesitate to reach out to us. If we don’t know, we’ll point you in the direction of the lenders we trust to help you get to the bottom of it.

Bysudoadmin
OnApril 18, 2012

sudoadmin
February 28, 2012

Hard Water is Harsh on Appliances

Most Americans have hard water flowing through their plumbing, and it’s taking a silent, but pricey toll on their water-using appliances and pipes.

“If you think you’re not affected, think again: 85 percent of Americans have hard water,” says Angie Hicks, founder of the website dedicated to consumer reviews of contractors and service companies. “Water with a high mineral count is really hard on your appliances and can take years off their useful lives.” Hicks advises that homeowners watch for the following red flags to see if their water is an issue:

Reduction in supply of hot water from a traditional tank water heater
Clothes are dingy or unclean after going through the washer
Calcium rings or deposits in tubs, sinks and dishwasher
Shower head and faucet clogs
Spotty or unclean dishes, glasses and flatware after the dishwasher has run
Water pipe leakage

Determining if you have hard water is simple and relatively inexpensive to address. Step one is to have your water analyzed, says Hicks. Some utilities and health departments offer this service, but companies that specialize in water conditioning also offer it, often free-of-charge. Because those companies have a vested interest in the outcome of such tests, consumers should consider getting at least one outside opinion.

Consumers have a few options when it comes to removing calcium and magnesium, the troublesome minerals that make water hard. Traditional water softeners use salt to remove those minerals. Devices that do not use salt to accomplish the same thing are often called “water conditioners” or “descalers.”
Here are Angie’s List tips for buying a water softener:

Water softeners can range from a few hundred dollars to more than $1,000 depending on size and type. Some companies offer rental equipment for a nominal monthly charge. Installation typically runs $150 to $300.
Before you buy a water softener or conditioner, research available products and service companies. Insist on a money-back guarantee.
In most states, installation does not require a licensed plumber. At a minimum, use a company with technicians certified by the Water Quality Association.
Understand and follow the maintenance required to keep the unit operating properly.

Bysudoadmin
OnFebruary 28, 2012

sudoadmin
February 24, 2012

Earthquake proof your San Luis Obispo home

Since we live in earthquake country, a few relatively simple earthquake strengthening upgrades may be all you need to keep your house from sliding off its foundation in

Bysudoadmin
OnFebruary 24, 2012

sudoadmin
February 6, 2012

Home Buyer Tax Credit Information

IRS Tool Calculates What You Owe on First-Time Home Buyer Tax Credit

A new online tool helps home owners who used the 2008 first-time home buyer tax credit calculate how much they now have to pay back.

If you bought a home in 2008 and took advantage of the original first-time home buyer tax credit in 2008, you have to pay it back. The credit was a no-interest loan, and you repay it in equal installments over 15 years through your tax return.

If you claimed the tax credit in 2009, 2010, or 2011 and then sold your house within 36 months, you’ll also have to pay back the credit when you next pay your federal taxes. Also, anyone who sold their home, or stopped using it as their main home, may have to repay the entire credit whether their home was purchased in 2008, 2009, or 2010. If you took advantage of a later version of the tax credit and stayed put, you don’t have to repay it.

To make it easier to calculate how much you have to pay back, the Internal Revenue Service developed an online tool, which tells you:
- The original amount of the tax credit you got
- How much of the tax credit you’ve already paid back
- How much you still owe
- How much you’re going to owe in future years (your annual installment repayment amount)
All you need to use the tool is your Social Security number, date of birth, your street address, and Zip code.

Enter the information you get from the online tool into line 59b of Form 1040 or line 58b of Form 1040NR. You don’t need to attach Form 5405, the First-Time Homebuyer Credit and Repayment of the Credit, to your return unless you’re repaying the credit because the home stopped being your main home.

First-time home buyer tax credit complications

In some cases, calculating your tax credit repayment is complicated — say your property has a separate building that you use for a business, your spouse dies, you converted your home to a rental property, or your home is destroyed or condemned — so check the rules on your repayment situation. You may also need to consult an earlier version of the form

Visit houselogic.com for more articles like this.

Bysudoadmin
OnFebruary 6, 2012

sudoadmin
December 23, 2011

Paying Cash for a Home

Original article available at Forbes.com

Buy outright or invest? This recent Forbes article showcases one man’s decision.

When a 62-year-old financial advisor bought a two-bedroom Manhattan co-op recently, he showed up at the closing with a check for the full $970,000 purchase price. No mortgage? “The money I had in cash was sitting getting 0% interest,’’ explains the man, who asked not to be named. “It made absolutely no sense to borrow.”

There were other benefits as well to buying for cash, he says. He figures he got a “liquidity discount” for being able to close quickly—the asking price had

Similar closing scenes are playing out across the country these days—minus the theater chitchat. Rates for 30-year fixed mortgages are hovering at 4%, and 15-year fixed loans can be had for 3.5% or less, the lowest in more than 50 years. Yet the National Association of Realtors estimates that roughly 30% of U.S. home buyers are now making their purchases 100% in cash, compared with 15% in 2008.

Some cash buyers are foreigners, who have never easily qualified for U.S. mortgages. Some are very-high-net-worth folks who have long favored cash for their multimillion-dollar trophy mansion purchases. The increase in cash buying comes mainly from two other groups: real estate investors, who nowadays rarely qualify for mortgages at all, and older buyers (like the New York financial advisor) who could qualify for mortgages but don’t want to.

In foreclosure-plagued Florida, where prices in some areas are down 55% from the peak, investors and snowbirds bearing cash dominate the market. Charlie Brasington is chief executive of Hoffman Development Group, which since 2008 has been using cash from private investors to buy distressed Tampa- and Palm Beach-area condo buildings from banks. Hoffman fixes the properties up and then sells the units to end users. Brasington reports two-thirds of the roughly 300 units Hoffman has sold so far, through Engel & Völkers, have gone for cash, as have all eight of the $1 million-plus penthouses it has moved.

“These people probably have $5 million or more, so to take 10% of it out and buy a quality home in Florida and know that you’ve got your stake in the sand, that may be a good investment,” Brasington says. “Your cash is not making money in a CD, that’s for sure, and in the stock market there’s volatility. In real estate, sure, you may have some downward trend still, but there’s not that volatility anymore.”

A sales pitch? Sure. But recent cash buyers make similar points, and signs abound that Florida prices may have bottomed. If you’re considering a cash purchase, here are some pointers.

Continue reading at Forbes.com.

Bysudoadmin
OnDecember 23, 2011

sudoadmin
October 28, 2011

5 Home Buyer Tips

When lenders take over a home through foreclosure, they want to sell it as quickly as possible. Since lenders aren’t in the real estate business, they turn to real estate brokers for help marketing their properties. Century 21 Hometown supports lenders and home buyers in transactions every week. Buying a foreclosed home service can be a bargain, but it can also be a problem-filled process. Here are five tips to help you buy smart.

1. Choose a foreclosure sale expert. Lenders rarely sell their own foreclosures directly to consumers. They list them with real estate brokers like Century 21 Hometown. You can work with one of our real estate agents who sells foreclosed homes for lenders, or have a Century 21 Hometwon buyer’s agent find foreclosure properties for you. To locate a foreclosure sales specialist, call local any of our 14 offices and ask about foreclosed properties for sale – or do a search here on our website.

Either way, ask the Century 21 Hometown real estate professional which lenders’ homes they’ve sold, how many buyers they’ve represented in a foreclosed property purchase, how many of those sales they closed last year, and who they legally represent.

If the agent represents the lender, don’t reveal anything to her that you don’t want the lender to know, like whether you’re willing to spend more than you offer for a house.

2. Be ready for complications. In some states like California, the former owner of a foreclosed home can challenge the foreclosure in court, even after you’ve closed the sale. Ask your agent to recommend a real estate attorney who has negotiated with lenders selling foreclosed homes and has defended legal challenges to foreclosures.

Have your attorney explain your state’s foreclosure process and your risks in purchasing a foreclosed home. Set aside as much as $5,000 to cover potential legal fees.

3. Work with your agent to set a price. Ask your real estate agent to show you closed sales of comparable homes, which you can use to set your price. Start with an amount well under market value because the lender may be in a hurry to get rid of the home.

4. Get your financing in order. Many mortgage market players, such as Fannie Mae, require buyers to submit financing preapproval letters with a purchase offer. They’ll also reject all contingencies. Since most foreclosed homes are vacant, closings can be quick. Make sure you have the cash you’ll need to close your purchase.

5. Expect an as-is sale. Most homeowners stopped maintaining their home long before they could no longer make mortgage payments. Be sure to have enough money left after the sale to make at least minor, and sometimes substantive, repairs.

Although lenders may do minor cosmetic repairs to make foreclosed homes more marketable, they won’t give you credits for repair costs (or make additional repairs) because they’ve already factored the property’s condition into their asking price.

Lenders will also require that you purchase the home “as is,” which means in its current condition. Protect yourself by ordering a home inspection to uncover the true condition of the property, getting a pest inspection, and purchasing a home warranty.

Be sure you also do all the environmental testing that’s common to your region to find hazards such as radon, mold, lead-based paint, or underground storage tanks.

Bysudoadmin
OnOctober 28, 2011