Saturday, July 31, 2010

Rural Development Funding Passed by Senate

The restoration of the ingle-family rural housing program that would guarantee home loans for rural buyers was passed by the Senate this week and is on its way to President Obama.

Rural Development's Single Family Housing Programs provide homeownership opportunities to low- and moderate-income rural Americans through several loan, grant, and loan guarantee programs. The programs also make funding available to individuals to finance vital improvements necessary to make their homes decent, safe, and sanitary.

This is great news for home buyers who want to buy a home while the rates and prices are still low. And it is a huge relief for thousands of rural home buyers who need to close on their home purchases before Sept. 30 to take advantage of the home buyer tax.

To learn more about a USDA home loan program, click here.

Visit my website's Mortgage Center for more helpful mortgage loan information.

Monday, July 26, 2010

Tips to Reduce Your Closing Costs & Fees

With home mortgage rates at historic lows, many people are eager to refinance their current mortgage loan to lock in a low rate. Existing home owners with adjustable rate mortgage may never get a better time to refinance out of their current mortgage and into a more conservative and consistent 15 or even 30 year mortgage loan.

When deciding to refinance a home mortgage, be sure to understand the refinancing costs associated with doing so and then try to limit them as much as possible.

Refinancing an existing mortgage is very similar to securing an initial mortgage. In fact, your new mortgage will be used to pay off your existing one, so it is just like buying your home all over again. There are certain costs associated with a refinancing, just as there was when the original mortgage was secured.

Closing costs such as broker fees, appraisal fees, title search, inspections and various administrative fees are all part of the fee structure associated with a mortgage refinance. To reduce your closing costs and any other mortgage-related fees, offers the following tips:

Try to refinance with your existing lender. They will want to keep your business and if they know you are looking to refinance, they will be motivated to offer the lowest rate possible and reduce your fees to keep you onboard with them.

Take a look at your credit report to ensure there are no issues you are unaware of that might detract from you score. A high score will help you secure the lowest possible interest rate and this could save you thousands over the term of your loan.

Do not hesitate to negotiate your fees. Many mortgage-related fees are controlled by the mortgage company so they have the ability to lower them. Administration fees are especially easy to get waved or reduced.

Avoid having your closing costs included in your loan balance. Sure, this is a great way to avoid them altogether but the reality is that you will by paying for them each month during the length of your loan and with interest included, you will end up paying a lot more in the long-run than if you had just paid them out of pocket upfront.

Visit my website's Mortgage Center for more helpful mortgage loan information.

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Friday, July 23, 2010

Mortgage Rates Hit Record Low

Mortgage rates fell for the 10th time in the last 13 weeks, tying a record low. Now, if only the economy would cooperate, even more people could take advantage of the low rates by refinancing.

Mortgage brokers are reporting rising interest in home refinancings as rates on a 30-year fixed loans have hit record lows in four of the past five weeks. This week the average rate fell to 4.56 percent, the lowest since mortgage company Freddie Mac began tracking rates in 1971.

Lower mortgage rates improve affordability: The difference between a 6% and a 5% mortgage rate on a $300,000 mortgage, for example, is about $188 a month.

And it's not just 30-year fixed loans. The rate on the 15-year fixed loan, a popular choice for refinancing, dropped to 4.03 percent from 4.06 percent last week. That was the lowest on records dating back to 1991.

What a great time to buy! With housing prices still low and rates like this, buying a home makes much more sense than renting.

Visit my website's Mortgage Center for more helpful mortgage loan information.

Visit my website for your online real estate needs!

Friday, July 16, 2010

What Borrowers Should Know About FHA Loans

FHA Pros, LLC, a national FHA condo approval service, has developed a list of facts speaking to the top misconceptions associated with FHA loans in order to help home buyers better navigate an already confusing market. FHA loans are mortgages issued by qualified lenders and insured by the Federal Housing Administration (FHA).

In the last three years, home buyer interest in FHA loans has gone from practically zero to upwards of 87 percent. However, many buyers still do not fully understand the benefits of these loans. So, in an effort to change that, here are seven things you should know:

1. FHA Loans Are Not Only For Lower-Income Borrowers. FHA loans are available to everyone. There is no maximum income restriction associated with FHA loans. Borrowers do need to substantiate income and assets by submitting proper documentation. This requirement ensures that borrowers are truly able to afford their future homes.

2. FHA Loans Are Not Only For First-Time Buyers. Many people believe FHA loans are available only to first-time homebuyers. This is not the case. Whether borrowers are making their first home purchase or their fifth, they can look to FHA loans as a home financing option.

3. FHA Loans Are Not Just Small Loans. In Fact, Loan Amounts Can Be As High As Almost $800,000. The government recently raised the maximum loan amount from its original cap of $362,790 to $793,750 as a way to help stabilize the housing market. The amount a buyer can borrow varies from county to county. Later this summer, condo buyers interested in FHA loans can visit to instantly identify FHA-approved condo associations and review maximum loan amounts for a given location.

4. FHA Loans Are Not Affiliated With The Section 8 Housing Program. While both programs are administered by the U.S. Department of Housing and Urban Development (HUD), FHA loans have nothing to do with low-income subsidized housing. FHA loans are simply mortgages insured by FHA. This insurance provided by the federal government allows lenders to lend more freely by assuring them that they will be repaid in the event of default. Most traditional lenders are able to provide FHA loans to their customers.

5. FHA Loans Are Often More Affordable Than Conventional Loans. While FHA loans typically offer the same interest rates as other loans, borrowers benefit from a much lower down payment of as low as 3.5 percent.

6. FHA-Approved Condo Developments Are More Desirable To Buyers. With 87 percent of home buyers indicating that they plan to use FHA loans, condo associations that are not FHA approved are missing out on a significant pool of prospective buyers. Under rules in place since February 2010, an entire condominium development must now apply to HUD and be granted FHA approval before a buyer can purchase a unit in an association with an FHA loan or before an existing unit owner can refinance into an FHA loan.

Due to the general unwillingness of today's lenders to extend credit with respect to conventional loans, many borrowers find that FHA is their best bet. Lenders don't mind lending when the federal government (FHA) assures them of repayment.

Homeowners associations (HOAs) should note that although FHA-insured mortgages might be easier to obtain, they are not "risky" loans, due in large part to the strict "full documentation" requirements placed on borrowers.

Individual buyers or sellers can initiate the approval process or current owners can encourage their HOA to apply. More information about the FHA- approval process is available at

7. FHA Loans Are Assumable. In addition to lower down-payment and credit-qualifying requirements as compared to conventional loans, FHA loans are assumable. This means that when a seller with an FHA loan sells his or her property, the loan and its financing terms (interest rate) can be transferred to the new buyer. This unique feature will certainly make a property more valuable in times of rising interest rates.

Visit my website's Mortgage Center for more helpful mortgage loan information.

Visit my website for your online real estate needs!

Tuesday, July 13, 2010

Make Room for Golf Balls

Some great words of advice that we all should try to remember...

When things in your life seem almost too much

When 24 hours in a day is not enough

Just remember the mayonnaise jar.

A professor stood before his philosophy class with some items in front of him. When the class began, wordlessly, he picked up a very large, empty mayonnaise jar and proceeded to fill it with golf balls. He asked the students if the jar was full. They agreed it was.

The professor then picked up a box of pebbles and poured them into the jar. He shook the jar lightly. The pebbles rolled into the open areas between the golf balls. He then asked the students again if the jar was full. They agreed it was.

Then the professor next picked up a box of sand and poured it into the jar. Of course the sand filled up everything else. He asked once more if the jar was full. The students responded with a unanimous yes.

The professor then produced two cups of coffee from under the table and poured the entire contents into the jar, effectively filling the empty space between the sand. The students laughed.

"Now," said the professor, as the laughter subsided. "I want you to recognize that this jar represents your life. The golf balls are the important things-family, children, health, friends, and favorite passions. Things that if everything else was lost and only they remained, your life would still be full."

"The pebbles are the other things that matter like your job, house, and car. The sand is everything else -- the small stuff."

If you put the sand into the jar first, he continued, there is no room for the pebbles or the golf balls. The same goes for life.

"If you spend all your time and energy on the small stuff, you will never have room for the things that are important to you."

"So. . . pay attention to the things that are critical to your happiness. Play with your children. Take time to get medical checkups. Take your partner out to dinner."

"There will always be time to clean the house and fix the disposal. Take care of the golf balls first -- the things that really matter. Set your priorities. The rest is just sand."

One of the students raised her hand and inquired what the coffee represented. The professor smiled. "I'm glad you asked. It just goes to show you that no matter how full your life may seem, there's always room for a couple of cups of coffee with a friend."

Friday, July 9, 2010

Lawn Care Tips for the Summer Season

With all of this HOT weather, I think it is safe to say that summer is officially here! Along with summer comes weeds, bugs and more time needed to tend to your lawn.

Here are some ways you can make the most of the season with these summer lawn care tips:

1. Water conservation and proper watering is important at any time of year, but particularly when heat and a lack of rain lead to water deficits and drought.

2. Evaluate your lawn regularly for signs of irregular color and texture. These can be signs of damage that may result from pests or disease.

3. Proper year-round lawn care keeps a lawn healthy and prevents weeds, disease and pests. But sometimes, insects you may not notice can travel from the yard to your home. To stop them, hire pest control to keep the bugs on the outside. You can also reduce their outside presence by treating the lawn for insects such as fleas and ticks and fire ants.

4. While lawns are generally the focal point of most yards, don't forget about trees and shrubs. Well-maintained landscaping adds dimensionality to a home and increases its value.

5. Stay safe! In the heat of the summer you may be tempted to mow your lawn in shorts and flip flops, but remember, you should wear long pants and closed-toed shoes.

6. Stay Hydrated! No matter what outdoor activity you're enjoying, be sure drink plenty of water.

7. The essentials of good summer lawn care are watering, fertilizing and proper mowing. However, sometimes an underlying problem (such as bare spots or severely damaged turf) requires additional measures.

Thursday, July 8, 2010

Should You Rent or Buy?

Interest rates are at all-time lows, there are lots of houses to choose from and prices are incredibley low. It is so tempting to buy right now. But is the timing right for you?

As a first-time home buyer, there is a lot to consider when making the decision to rent or buy a home. Potential buyers should ask themselves several key questions before making this important decision:

1. What will monthly costs be and can I afford the payments?
Keeping mortgage payments under 30 percent of your monthly income is a good rule of thumb. If you can't keep mortgage payments below that, you may be better off renting for awhile.

2. What other debt do I have?
Total rent or mortgage payments plus credit obligations should not exceed 35 to 40 percent of monthly income.

3. What is my credit score? Can I qualify for a good interest rate?
A high credit score indicates strong creditworthiness, and that qualifies you for better interest rates on a mortgage. Maxing out on your credit lines and paying bills late will lower your credit score. The impact of a credit score on interest rates can be significant. For instance, a borrower with a score of 760 could pay nearly two percentage points less in interest on a mortgage than someone with a score of 620. Lower interest rates also mean lower monthly payments. If your credit score is low, you may want to delay buying a home until you can improve your score.

4. How much will taxes, monthly maintenance, or other fees cost?
Owning a home means you'll have to pay real estate taxes and other costs like insurance and maintenance. On the other hand, owning a home brings big tax savings at the end of the year. As a renter, the owner pays those costs for you.

5. How many years will I stay here?
Generally, the longer you plan to live someplace, the more it makes sense to buy. You'll build equity in your house and its value is likely to increase over the years.

For more helpful Buyer Tips, visit my website at

Tuesday, July 6, 2010

What's More Important ~ Low Rates or Tax Credit?

Although 90 percent of consumers believe that the tax credits have helped both first-time home buyers and the U.S. housing market overall, many home buyers feel that mortgage rates have a greater impact on their purchasing decisions.

In a recent survey by Prudential Real Estate and Relocation Services, an overwhelming majority of those polled found that when factoring in either low interest rates or the tax credit, low rates were far more important in a decision to purchase a home now.

There's a good reason for this statistic. For example, if you purchase a home for $300,000 and finance $270,000, and your interest rate for a 30-year fixed rate loan was 5.25% versus 4.75%, you would pay nearly $30,000 more over the term of the loan. This is a significant amount of money!

Since the Fed's Mortgage Backed Securities purchase program ended on March 31, there has been much volatility and price swings in the markets. Rates overall are off their lows and are often quoted above 5.00% today with no points.

Looked at from another perspective, if prospective home buyers are waiting for home prices to decline a bit more before purchasing a home, but interest rates push higher towards 6.00% in the meantime, waiting could well cost those home buyers more money in the long run.

In fact, let's say a home buyer delays a transaction but receives a $10,000 reduction off that $300,000 home. If, in the meantime, rates were to rise .75% to 6.00% and the buyer financed 90% of the purchase price, the amount of total payments over a 30-year term would be over $35,000 more than paying the $300,000 purchase price and the 5.25% interest rate.

So, remember, just because the tax credit programs have ended doesn't mean that isn't a good to buy!

For useful mortgage tools and information visit my mortgage center.

Friday, July 2, 2010

How to Get Your Extended Home Buyer Tax Credit

You've decided to purchase a home and take advantage of the Extended Home Buyer Tax Credit. Here's what you have to do to get your benefit:

  1. Close on your home purchase between November 7, 2009 and April 30, 2010, or have a binding written contract in place by April 30, 2010 with a closing date no later than September 30, 2010 (original date was June 30, 2010).
  2. Decide whether to:
    • apply the credit to your 2009 tax return, filed on or before April 15, 2010;
    • file an amended 2009 return; or,
    • apply the credit on your 2010 return, filed on or before April 15, 2011
  3. Attach documentation of purchase to your return.

Documentation of Purchase

For more information on claiming the credit and on the documentation required for your 2009 or 2010 returns, see the IRS's First-Time Home Buyer Tax Credit Questions and Answers.

When to Apply the Credit

Buyers purchasing homes on or before December 31, 2009 may claim the credit on their 2009 tax returns.

Buyers purchasing in 2010 will have the option to:

  • Claim the credit on their 2009 return, even if the purchase is completed after December 31, 2009;
  • File an amended return for 2009 if their purchase is completed after April 15, 2010; or,
  • Claim the credit on their 2010 tax returns.

Applying the Credit to Your 2009 Taxes

You will need to do three things to claim the credit on your 2009 tax return:

  1. Fill out Form 5405 to determine the amount of your available credit;
  2. Apply the credit when you file your 2009 tax return or file an amended return;
  3. Attach documentation of purchase to your return or amended return.

If you have specific questions or need additional information, please contact a tax professional or the Internal Revenue Service at 800-829-1040.

Click here for Frequently Asked Questions regarding the Home Buyer Tax Credit.

Thursday, July 1, 2010

Questions to Ask Before Buying a Condo

You've found the perfect condo and you're ready to make an offer. Before you move too quickly you should do some homework. Here are the seven most important questions you need to ask before buying a condo:

1. "What Are People Complaining About?"
Take a look at the minutes of the condo association board meetings to see what the owners have been griping about. If everyone was complaining about the faulty plumbing or the gardener's absence, you know that the complex is having management difficulties. Even if there aren't any complaints, reading the minutes will reveal the sorts of projects that are under way at the complex -- projects the seller may have neglected to mention.

2. "Who's Been Naughty and Who's Been Nice?"
Find out the delinquency rates of present owners. If people aren't paying their association dues on time, that is either a sign of discontent or an indication that the association might be underfunded.

3. "How Much Is In the Repair Fund?"
Ask if the community has done a reserve-fund review in the past five years. Lester Giese, the author of The 99 Best Residential & Recreational Communities in America, recommends the following formula: If the complex is one to 10 years old, the reserve fund should have 10% of the cost of replaceable items (roofs, roads, tennis courts, etc.). Between 10 and 20 years old, the repair fund should be at 25% to 30%. At 20 years, that amount should be 50% or above. Residents who brag that they don't pay much in maintenance may be in a complex that either is not being kept up well or is living beyond its means.

4. "Can You Cover Me?"
If you look at nothing else, get a copy of the certificate of insurance, which is a summary of the association's policy. First see if the replacement costs covered by the policy are an accurate estimate of the cost of rebuilding. Then make sure that the policy has a building-ordinance clause, which means that the insurance will cover the cost of bringing the building up to code if there is any rebuilding to be done. On older buildings, there may have been many code upgrades since the time of construction. Finally, make sure that you understand exactly what the association policy covers and what you are responsible for. The smart condo owner will insure his or her personal belongings, along with any other items within the unit that are not covered by the association's policy. If you have trouble understanding the insurance lingo, take the insurance certificate to an agent whom you trust and who understands the state laws.

5. "Does the Association Present Any Legal Problems?"
Buying a single-family home without a lawyer is no big deal for many people. But with a condo, there's so much more involved. Contact a local real estate lawyer and have him or her go over the bylaws of the association. Do they make sense? Are they consistent with the state laws? Giese, the author, once found that the association bylaws of a large garden-style condo complex had been lifted from the books of a high-rise condo, leaving confused tenants with rules about shared hallway space and the correct use of garbage chutes. Benny Kass, a Washington real estate attorney, recommends that you also have your lawyer screen the association at the local courthouse, to see if any owners have filed suit against it.

6. "Is the Complex Renter-Friendly?"
If the renter population is over 10%, there should be clear rental policies, either listed in the bylaws or tacked on as an amendment. Does the management company find renters for you? If so, do they get enough good renters? Ask other tenants about their experience. In addition, ask to see the association's rental lease, and have a real estate lawyer look it over. Keep one thing in mind, though: An association can change its bylaws to prohibit or restrict renting at any time. The more owners who rent, the less chance that will happen.

7. "Am I My Community's Keeper?"
Watch out for a condo whose owners manage the place themselves. Although many are operated efficiently, self-management can lead to more hassles for owners -- especially those who live thousands of miles away. If the complex is professionally managed, check out the management company as thoroughly as you check out the association. Ask other owners. Ask people in nearby buildings. And be sure to interview the day-to-day manager directly. If you hook up with a bad manager, you can be sure of this: Your dream condo will keep you up at night.