Archive for the 'Homeowners' Category
Keeping the “Real” in Real Estate
Posted by Beverly Stuart | Leave A Comment »
The first question most sellers ask a Realtor is “How Much Can You Sell My Home For?”
While it is easy to build up the hopes of a seller by agreeing to their perception of a market price, reality is somewhat different. I was recently asked by a client to give a listing presentation on one of his homes in the Downtown San Diego Area. I diligently did all my homework, found comps, and went to the appointment armed with printouts, slide shows, all the bells and whistles.
The price question was almost the first question from the seller and I presented my findings on the area and showed all my supporting information.
“Well, I had another Real Estate Agent tell me that I could get at least $75,000 more than you!” At this point it would have been easy to agree and get the client to sign the Listing Agreement right then and there.
What happened next is sometimes the hardest part of being a Realtor……. I explained that with the current market conditions (etc…etc…) that property needed to be realistically priced to even get buyers to look at it.
After several minutes of discussion the seller turned to me and asked why I was so adamant about the price. I explained that I had to put my name and reputation to the listing and that “Keeping the “Real” in Real Estate” was my way of doing business. I would rather sell your home in a shorter time at market value than list it high, wait for a month and reduce the price, wait ANOTHER couple of months and reduce the price again and finally get an offer in month 5 or 6. Moving is stressful enough without any added hassle.
I did get the Listing and I also got a referral from my client due to “My Honesty and Commitment to Customer Service”.
Keep it Real People.
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Related Posts: Homeowners, Real Estate News, Sellers
FHA Loans - Down Payment, Reserves and Mortgage Insurance
Posted by Paul Gonzales | Currently 1 Comment »
This is the fourth and final post in a series that deals with important aspects of FHA financing.
- The first post provided an overview of the program.
- The second post detailed FHA credit requirements
- The third post discussed the income and employment requirements.
- This post will discuss the down payment and asset requirements necessary to obtain an FHA home loan.
Minimum Down Payment
In today’s challenging market, this is probably the most attractive feature of the FHA home loan - the minimal down payment requirement. For years the minimum requirement has been 3% of the purchase price. Effective January 1, 2009 this will increase to 3.5%, still a great deal especially for first-time homebuyers. This benefit is enhanced further by the flexibility allowed for the source of those down payment funds, as discussed below:
Reserve Requirements
Reserves are funds that a buyer has “left over” after purchasing the home. Most conventional home loans require enough reserve funds to cover at least two months of mortgage payments including property taxes, insurance, mortgage insurance and home owner’s association (HOA) dues if required.
FHA financing does not have a reserve requirement if purchasing a 1 or 2 family property (a 3 or 4 family property requires at least three months of reserve funds).
Acceptable Sources of Funds
- Borrower’s depository funds - Funds owned by the Borrower in bank accounts, stocks and bonds, Certificates of deposit, retirement accounts such as 401k plans
- Gift funds - Can come from a wide variety of sources, including family members, a close friend with established close ties to the borrower, an employer or labor union, charitable or non-profit organization, government agency or a public entity such as a city through a homebuyer’s assistance program. A couple important caveats: the gift funds must be thoroughly documented and provide a clear paper trail. Depending upon the source of the gift funds, such documentation will include a detailed “gift letter”, copies of cancelled checks and bank withdrawal slips or evidence of bank wire transfer. There must be reasonable evidence that the qualified donor has the financial ability to give the gift. As of October 1st, 2008, funds from certain non-profit organizations which are matched by donations from the home seller can no longer be gifted to the buyer
- Sale of existing home - proceeds from the sale of an existing home may be used to purchase a new home with FHA financing
- Sale of personal property - the sale of a car or other personal property is acceptable as long as the funds can be paper trailed to the sale
- Cash or “mattress money” - this requires a written explanation describing the source of the cash, how it was accumulated and how long it took to accumulate. Such cash accumulation must make sense for the borrower, such as not having a checking or savings account or credit accounts.
- Commission from sale of property - acceptable if the borrower/buyer is a licensed real estate agent and entitled to a commission from the sale
Mortgage Insurance
A lesser appreciated, but very vital benefit of FHA financing, has to do with mortgage insurance, or MI. Until recently, it was generally easy to avoid having to pay for mortgage insurance when purchasing a home with less than 20% down payment. This was accomplished by getting a second mortgage to “piggy back” with an 80% first mortgage. Thus a qualified buyer could buy a home with little or no money down by obtaining two mortgages. In the reality of today’s markets such second mortgages are all but non-existant or exorbitantly priced.
The only remaining option for a homebuyer with less than 20% for a down payment is to pay for mortgage insurance. In certain areas such as California, most companies that provide such insurance have limited the maximum coverage to 90% (or less) of the purchase price. In addition, they have tightened their underwriting guidelines and it is indeed more difficult to actually qualify for the insurance.
Enter the FHA home loan. It is generally considered easier to qualify for MI under the FHA and it will go to 96.5% of the purchase price. In short there is a significant portion of the home-buying population who have no other option than FHA financing just for these two reasons alone.
In a Nutshell…
FHA financing may not necessarily be the best fit for everyone in the home-buying market. However, these hallmark features of the FHA home loan - minimal down payment and reserve requirements, flexible sources of funds and availability of mortgage insurance - are far and away the primary reasons that many home buyers, particularly younger first-time home buyers, seek FHA financing. It’s clear to see why.
Special Note: Pursuant to recent legislation addressing current housing issues, various departments of the Federal government are working on implementing new programs and expanding the role of the Federal Housing Administration (FHA) in dealing with these issues. As these programs are actually implemented and become available to consumers, look to PicturePefectSanDiego.com for new posts describing them in detail.
Read more articles and valuable tips about financing by Paul Gonzales
You can contact Paul at (800) 775-7334 or paulforloans@aol.com
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Related Posts: CW Mortgage, Financial news, Home Loans, Homeowners, Interest Rates, Mortgage News
Homeowners Do Their Homework . . . and it’s paying off!
Posted by Erica Vautier | Leave A Comment »
Dramatic advancements in online tools means more real estate resources are available to more people than ever before. Armed with a plethora of new tools, buyers are doing their homework. They can search for homes, tour neighborhoods, and get expert advice from the convenience of their personal laptop.
A recent survey by the National Association of Realtors (NAR) shows that more than 77% of consumers now start the real estate process online. On sites like Realtor.com, buyers can specify what type of home they are interested in and have a list of properties that meet their criteria appear in seconds.
Good real estate sites let visitors save searches, send automatic notices when new listings enter the market, and provide extensive information on the property. Advanced sites will even provide foreclosure lists and help locate great real estate buys.
It’s no wonder that more than 3 out of 4 respondents to the NAR survey said they use search engines to browse through properties. While internet buyers spend a longer period of time looking for a home online than traditional buyers, they spend less time searching with their agent and have to view fewer properties in person.
A 2007 California Association of Realtors (CAR) survey showed that next to searching for homes, buyers spend most of their time online surveying neighborhoods. They look at comparable sales, watch local videos and map out the area.
User-generated videos on YouTube provide unique insight into many San Diego cities; a search for “La Jolla, San Diego” yields more than 1,100 results! Some reports suggest that buyers are beginning to prefer these amateur tours to the store-bought variety, which can come off as manufactured.
To further examine neighborhoods, buyers use interactive mapping tools like Google Maps. Simply type in an address and Google Maps displays: satellite images of the location; charts of the terrain; real-time traffic reports and drive times; and frighteningly accurate, panoramic street views. Online maps allow visitors to take a virtual stroll down their future block without ever leaving home.
As buyers migrate toward the internet, so are many real estate agents. Through industry blogs like Active Rain and personal blog sites, real estate agents are sharing their knowledge and experience with the world.
Most buyers are tired of the pre-canned information that populates most real estate sites and are instead choosing to read more organic blog entries.
On our company blog, Picture Perfect San Diego, Windermere agents write about the community, home sales, area activities, market trends, financing options and so much more. It’s a great forum for buyers to meet our agents, read first hand accounts of what is going on in the real estate market, ask questions and leave feedback.
The abundance of research tools available online has made today’s buyer more educated than ever before. They can search for homes, tour neighborhoods, and get expert advice online.
There is a lot of information out there, have you done your homework?
If you need help getting started on your homework, these links may help:
- Read More Articles by Erica Vautier about the Technology and Marketing Available to Homeowners and Agents
- Contact me about working for Windermere and gaining access to these tools
- Contact me about becoming a VIP Member of our site and gaining access to great technology search tools for homeowners
- Leave Feedback and let us know what you’d like to learn more about
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Related Posts: Buyers, Education, Foreclosures, Free Foreclosure Lists, Homeowners, Marketing, Picture Perfect San Diego, Technology, Windermere, Windermere Agents
New Conforming Loan Limits Announced For 2009
Posted by Kevin Kueneke | Currently 1 Comment »
After months of speculation, we finally know what the new 2009 high balance conforming loan limits are for San Diego and other “high cost” areas. The Federal Housing Finance Agency (FHFA) said that the $697,500 number we enjoyed for part of 2008 is dropping to $546,250 in San Diego.
Some areas such as Los Angeles-Orange Counties, San Francisco, San Jose, and Santa Cruz are having their 2009 numbers set at the new maximum of $625,500.
According to FHFA’s press release, the 2009 loan limits were calculated using 115% of median house prices as determined by the Federal Housing Administration (FHA) whereas the 2008 loan limits were calculated using 125% of median house prices.
So what does this mean? It means that anyone currently in escrow in San Diego with plans to borrow more than $546,250 needs to do everything they can to get their loan closed before 12/31/2008 or face significantly higher interest rates. There is almost a 2% interest rate difference between loans less than $697,500 and loans greater than $697,500 (also known as true jumbo loans) because conforming loans are guaranteed by the government (FNMA and FHLMC). Guidelines are also more strict for true jumbo loans than for conforming and high balance conforming loans.
As expected, the Federal Housing Administration (FHA) announced that FHA Jumbo limits will match the high balance conforming limits. The Department of Veteran’s Affairs (VA) said that VA Jumbo loans with zero-down payments will be allowed up to the high balance conforming loan limits through the end of 2011. This is good news for FHA and VA buyers as they will still be allowed to take advantage of these programs for higher priced properties.
Any questions or comments? Please email me at Kevin@MyCWMtg.com
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Related Posts: Buyers, CW Mortgage, Education, Financial news, Home Loans, Homeowners, Interest Rates, Mortgage News
