Sunday, December 30, 2012
Tuesday, December 18, 2012
Wednesday, December 12, 2012
Thursday, December 6, 2012
Monday, December 3, 2012
Tuesday, November 27, 2012
- Leaky faucets can waste over 1,000 gallons a year
- Leaky toilets can waste 7,000 gallons a month
- A five-minute shower saves more water than a tub bath
- Water running while you brush your teeth or shave
- Sprinkler heads need to be adjusted to spray on the yard only
- Install a rain sensor on sprinkler system
- Pool equipment can be a hidden source of wasted water
- Turn off all the water faucets and appliances; don't forget the ice maker.
- Open the water meter, usually located near the sidewalk in the front of the house. You may need a water key that can be purchased from a home improvement store or possibly borrowed from a neighbor.
- Locate the dial indicating water usage. It should not be moving since all of the water is off. If it is still moving, verify that you have turned off anything that might be using water.
- If it appears to be still, make a mark with a Sharpie and wait 15 minutes. If the flow indicator has moved, you probably have a leak.
- Now that you've confirmed that you have a leak, you may need help in locating it. A plumber or leak specialist may be able to help you track it down and repair it.
Monday, November 19, 2012
Wednesday, November 14, 2012
Saturday, November 10, 2012
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Tuesday, November 6, 2012
Wednesday, October 31, 2012
A 30 year fixed-rate mortgage hasn't always been the standard. As part of FDR's New Deal in 1934, the Federal Housing Administration was created to help Americans purchase homes with affordable terms.
Prior to then, many loans had an amount due at the end of the term called a balloon. Most mortgages had adjustable interest rates even though some might be fixed for a short time. While banks would loan money on a home, they retained the right to call the note due at any time which could exert considerable stress on borrowers.
FHA, during this time, introduced mortgages that offered a fixed rate of interest to the borrower for a 30 year term. This fully amortized loan provided borrowers a financial vehicle that would help them achieve the American Dream while minimizing the risk of having a loan called without the resources to pay it off. It brought long-term stability to the housing market and helped stimulate the economic recovery at a very difficult time in our nation's history.
Roughly, a third of the mortgages created in 2011 were less than 30 year terms. Many homeowners, similar to those after the Great Depression, would like to get their home paid for as soon as possible. Shorter term mortgages typically have a lower interest rate but higher payments due to fewer years to amortize the mortgage.
Monday, October 22, 2012
The question plaguing every tenant who wants a home of their own is whether they should continue to rent or is it the right time to buy?
The combination of good prices and low mortgage rates make it considerably cheaper to own than rent in most markets. Assuming a person is qualified with a down payment and won't be moving for several years, there may not be a better time to buy a home.
In the example below, the total house payment is $1,281.01 compared to $1,500 to rent the same home. Before you consider any of the financial benefits attached to home ownership, it's cheaper to own than to rent.
The net cost of housing falls to $764 or just more than half the house payment when you consider the principal reduction due to normal amortization, a modest appreciation and the tax savings along with a reasonable maintenance expense that a tenant would not have to pay.
One of the biggest benefits is the growing equity. As the value goes up, the unpaid balance goes down. A favorable leverage causes their low down payment to grow to $40,609 in a short seven years based on a modest 1% appreciation.
There's an expression often heard in real estate circles: "Whether you rent or buy, you pay for the house you occupy." You're either buying it for yourself or you're helping the landlord buy it.
Check out a Rent vs. Own to see how your numbers will compare to this example or call me to do it for you.
Monday, October 15, 2012
Sunday, October 14, 2012
Tuesday, October 2, 2012
Refinancing Too Soon?Some people believe they shouldn't refinance more often than once every two years.The determining factors are if you'll lower your payments and plan to stay in the home long enough to recapture the cost of refinancing. If so, you should consider refinancing. Interest rates have actually come down significantly in the past 12 months and even more in the past 24 months. According to the Freddie Mac Primary Mortgage Market Survey®, rates on a 30 year fixed rate mortgage are down to 3.6% in August, 2012 compared to 4.27% one year earlier. Refinancing in the example below would save the homeowner $67.04 per month and they would recapture the cost of refinancing in 3 years and 9 months based on approximately $3,000 of closing costs. Click Here to make your own projection on a Refinance Analysis calculator.
Monday, September 17, 2012
Tuesday, September 11, 2012
Tuesday, September 4, 2012
It can be unsightly and upsetting when a home in a neighborhood isn't being maintained like the others. It might be an overgrown yard, a fence in need of repair, paint peeling on the home or even a car parked in front of the home that hasn't moved in weeks.
I believe most people want to be good neighbors and may be willing to correct the issue once it is brought to their attention. In some cases, they may not agree with the same urgency and it might be necessary to seek other remedies.
The most expedient solution may be to contact the responsible person and describe your perception of the problem. An owner-occupant may be sympathetic to the neighbors and more than willing to correct the issue.
However, if you suspect that it is a rental property, check with the county tax records to identify the owner. They may be unaware of the situation and would actually welcome the "heads-up" to protect their investment.
The next step might be to notify the homeowner's association if there is one. The covenants or bylaws will specify how properties must be maintained and the association can enforce them.
The final step would be to notify the city for a possible code violation. Most cities have a separate code and neighborhood services division and some cities have 311 for non-emergency assistance.
Saturday, September 1, 2012
Knowing the current value of your home is important when you're considering a move, refinancing or getting a home equity loan. Prices are determined by recent sales and the supply and demand of current inventory.
Location plays a significant role because by the unique combination of improvements and land. Beneficial considerations would be convenience to schools, shopping, transportation and proximity to freeways. Undesirable concerns could include being in the vicinity of busy streets, high-tension lines, commercial property and other things.
To receive a computerized estimate on the value of your home that includes prices of comparable homes that have sold recently and homes currently for sale, click here.
Value is not totally objective and does require a certain amount of subjective considerations. If you have questions after you receive your report by email, contact us and we'll be happy to talk to you about your concerns.
Thursday, August 23, 2012
Buyers ranked photos #1 as the most useful tool in their buying decision. *
Tuesday, August 21, 2012
The American Dream of owning a home is still alive. People still want a place of their own; where they can raise their family; share with their friends; feel safe and secure. Homeownership creates emotional and financial benefits.
The government supports that dream by allowing deductions for mortgage and home equity interest as well as property taxes. The capital gains exclusion on profits from a home is incredibly generous and a low long-term capital gains tax rate applies to excess profits.
It's reported that some of the social benefits of owning a home include higher voter participation, better physical health, higher student test scores, lower teen delinquency, neighborhood stability and pride in the community.
If for no other reason, the decision to buy a home should be considered when it costs much less to own a home than it does to rent. With the unusually low available mortgage rates, the payment is generally less than comparable rent. However, the decision becomes more obvious when the other benefits are considered like amortization, appreciation and tax savings.
It's not uncommon for the net cost of housing to be half of the actual mortgage payment. In most cases, it is significantly more to rent than to own which could amount to more than the down payment in the first year alone. Calculate your cost of Renting vs. Owning.
Monday, August 13, 2012
The following chart is meant to be a general guide for how long a person might have to wait. During this waiting period, it’s important that the person be current on all payments and maintains a history of good credit.
|Foreclosure||3 years||2 years||3 years||7 years||7 years|
|Deed-in-Lieu of Foreclosure||3 years||2 years||3 years||2 years |
|4 years |
|7 years |
|Short Sale||3 years||2 years||3 years||2 years |
|7 years |
|7 years |
|Chapter 7 |
|2 years||2 years||3 years||4 years||7 years|
|Chapter 13 Bankruptcy||1 year||1 year||`1 year||2 years||7 years|
A recommended lender can give you specific information regarding your individual situation and can make suggestions that will improve your ability to qualify for a mortgage. We want to be your personal source of real estate information and we're committed to helping from purchase to sale and all the years in between.
Thursday, August 9, 2012
Most people agree that homeownership rules! When asked, people say they want a home they can call their own, to raise their family, share with their friends and to feel safe and secure. It also accounts for the majority of most people's net worth.
These rules can help protect your investment and make homeownership more enjoyable.
- Don't overpay for your home
- Maintain your home's condition
- Minimize your assessed value to lower property taxes
- Make extra principal contributions to save interest and build equity
- Validate the insured value of improvements and contents
- Stay current on surrounding property values
- Make mortgage interest payments deductible
- Invest in capital improvements that increase market value
- Don't over-improve the neighborhood
- Keep records of capital improvements and other maintenance
We want to be your personal source of real estate information and we're committed to helping from purchase to sale and all the years in between.
Monday, July 30, 2012
Maybe you're not ready to move into it but that doesn't mean that you shouldn't take advantage of the present opportunities to acquire the home you want to live in during retirement. The combination of the low interest rates, reduced prices and lower competition may never be this good again in our lifetimes.
The rental market is strong and a tenant could pay for your retirement home. The cash flows are attractive and the yield is bound to be stronger than what you're currently earning. Even if you don't retire to this home, it could be a placeholder to control the costs of the home you do move into.
One thought would be to finance it with a 15 year loan that will have a lower rate than that of a 30 year loan and it will obviously amortize in half the time. Even if you don't have the home paid for by the time you retire, your equity will be larger.
Ideally, if you sell your current home when your move into this retirement home, you may be able to take up to $500,000 of tax-free gain for a married couple. That profit could be used to fund your retirement.
With home prices and mortgage rates certain to rise, this may be one of the best decisions you can make. We want to be your personal source of real estate information and we're committed to helping from purchase to sale and all the years in between.
Monday, July 23, 2012
The purpose of insurance is to shift the risk of loss to a company in exchange for a premium. Most policies have a deductible which is an amount the insured pays out of pocket before the insurance starts covering the cost of the loss.
In the process of managing insurance premiums, policy holders often consider adjusting their deductibles. Lower deductibles mean less money out of pocket if a loss occurs but obviously, results in higher premiums. Higher deductibles result in lower premiums but require that the insured bear a larger amount of the first part of the loss.
A small fire in a $300,000 home that resulted in $2,500 of damage might not be covered because it is less than the 1% deductible. If the homeowner can afford to handle the cost of repairs in exchange for cheaper premiums, it might be worth it. On the other hand, if that loss would be difficult for the homeowner, a change in the deductible could be considered.
It is a good idea to review your deductible with your property insurance agent so that you're familiar with the amount and make any changes that would be appropriate.
Tuesday, July 17, 2012
Tuesday, July 10, 2012
That yard may seem like it's begging for a pool, but that doesn't necessarily make it a good idea.
What your home is worth depends on why you ask the question. It could be one value based on a purchase or sale and an entirely different value for insurance purposes.
Fair market value is the price a buyer and seller can agree upon assuming both are knowledgeable, willing and unpressured by extraordinary events. This value is generally indicated by the comparable market analysis done by real estate professionals.
Insured value is determined for the proper insurance coverage. Replacement cost could actually exceed the cost of new construction when additional expenses are incurred for demolition and the added complexities of matching existing construction.
Homeowners are generally more familiar with their home's market value. Since it can be lower than the replacement cost, owners should review the insured value with their property insurance agents periodically. Under-insuring could invoke a co-insurance clause that may limit the settlement and increase your out of pocket expenses.
Tuesday, July 3, 2012
- The U.S. flag should not be flown at night unless a light is shown on it.
- The flag should never touch the ground.
- The U.S. flag should not be flown upside down except as a distress signal.
- A U.S. flag should be displayed at the peak of the staff unless the flag is at half-staff.
- When displaying multiple flags of a state, community or society on the same flagpole, the U.S. flag must always be on top.
- When flown with flags of states, communities or societies on separate flag poles which are of the same height and in a straight line, the flag of the United States is always placed in the position of honor - to its own right. No flag should be higher or larger that the U.S. flag. The U.S. flag is always the first flag raised and the last to be lowered.
- When the U.S. flag is flown with those of other countries, each flag should be the same size and must be on separate poles of the same height. Ideally, the flags should be raised and lowered simultaneously.
Sunday, July 1, 2012
While a principal residence and a second home have some similar benefits, they have some major differences. A principal residence is the primary home where you live and a second home is used for personal enjoyment while limiting possible rental activity to a maximum of 14 days per year.
The Mortgage Interest Deduction allows a taxpayer to deduct the qualified interest and property taxes on a principal residence and a second home. The interest is limited to a maximum of $1,000,000 combined acquisition debt and a combined $100,000 home equity debt for both the first and second homes.
The gain on a principal residence has a significant exclusion for taxpayers meeting the requirements. The gains on second homes must be recognized when sold. Even if you sell a smaller second home and invest all of the proceeds into a larger second home, you'll need to pay tax on the gain.
Tax-deferred exchanges are not allowed for properties having personal use including second homes.
If the home is owned for more than 12 months, the gain is taxed at the long-term capital gains rate. If the home is owned for less than 12 months, the gain is taxed as ordinary income which would be a considerably higher rate.
The article is intended for informational purposes. Advice from a tax professional for your specific situation should be obtained prior to making a decision that can have tax implications.
Monday, June 18, 2012
We've probably all said or at least thought "if I knew then, what I know now, I would have done things differently." We should have stayed in school longer. We should have listened to our parents. We should have bought Apple stock in 2002 for $8.50 or gold in 2000 for $300.
Years from now, if we look back at 2012, it may be clear that this was the best buyer's market ever. The prices are down nationwide 35-40% from four years ago, mortgage rates have never been this low and rents are rising. Few homes have been built in recent years to keep up with a growing population. There may never be a better time to buy homes than now.
The housing affordability index which is considered to be good at 100 has increased to over 200 for several months. Shrinking inventories and rising prices in some markets are causing the index to fall for the first time in years.
This 'buying" opportunity applies equally to acquiring a home to live in or to rent as income property. It is estimated that about one-third of the homes purchased last year were done by investors. It is reasonable because the positive cash flows far exceed most other investment alternatives.
The question we're all faced with this year is whether we'll be saying we seized or missed an opportunity of a lifetime. While no one can predict the future whilst gazing into the proverbial crystal ball, time will tell the story, If…
Tuesday, June 12, 2012
Transferring the title of a home from one person to another may seem simple but it could have a significant tax implication.
When a person inherits property, the basis is "stepped-up" to fair market value at the time of the decedent's death. On the other hand, a gift has a carry-over basis which means that the recipient receives the unrealized gain also.
As an example, let's say an elderly parent, in an attempt to get their affairs in order, gives their home to their adult child. The rationale might be that they are the sole beneficiary and will get the property eventually. In an effort to settle things early, unnecessary income tax may be incurred.
If the home was purchased for $20,000 and worth $100,000 at the time of transfer, there is a possible gain of $80,000. However, if the adult child inherited the property at the time of the parent's death, their new basis would be $100,000 or the fair market value at the time of death and the possible gain would be zero.
This is meant to be an example and many other variables could be involved. If you're concerned about a situation, you should seek specific advice from a tax professional. As always, I'm here to help you as your real estate professional.
Monday, June 4, 2012
The low interest rates secured by borrowers recently on FHA mortgages may become valuable in a different way in the future. FHA and VA mortgage are assumable at the existing interest rates subject to buyer qualification.
Buyers wanting to assume an existing FHA mortgage must be owner-occupants and meet the current FHA guidelines. Applicants should have a minimum 600 credit score, total debt with house payment to be assumed not to exceed 41% of their monthly gross income and meet other standard income, credit and qualifying requirements.
The benefits are not only assuming a lower interest rate resulting in lower payments but the closing costs on an assumption are much less than originating a new loan. The fact that the mortgage is already into an amortization schedule and that lower interest rate loans amortize faster than higher interest rate loans make it build equity faster than a new mortgage.
When interest rates eventually rise, assumptions will provide an opportunity for buyers to lower their cost of housing significantly while improving their wealth positions.
Wednesday, May 30, 2012
Home is a place you should feel safe and secure. Sometimes, we take it for granted and unfortunately, we do need to remain vigilant about things we do that could compromise our well-being. Here are a few tips you might want to consider.
- Everyone loves an inviting home including burglars. Make sure it looks occupied and is difficult to break in.
- Always lock outside doors and windows even if you're gone only a short time.
- Leave lights on when you leave. Consider timers to automatically control the lights.
- Keep your garage door closed even when you’re home; don’t tempt thieves with what you have in your garage.
- Suspend your mail and newspaper delivery when you're out of town or get a neighbor to pick it up for you.
- Posting that you're out of town or away from home on social networks is like advertising your home is unprotected.
- Equally dangerous could be allowing certain social network sites to track your location.
- Don't leave keys under doormats, in flowerpots or the plastic rocks; thieves know about those hiding places and even more than you can think.
- Trim the shrubs from around your home; don’t give criminals a place to hide.
Monday, May 21, 2012
The benefits of buyer's pre-approval are without question; it is good for the buyers, the sellers and the agents. It saves time, money and removes the uncertainty of knowing whether the buyer is qualified. The direct benefits include:
- Amount the buyer can borrow decreases as interest rates rise
- Looking at "Right" homes - price, size, amenities, location
- Find the best loan - rate, term, type
- Uncover credit issues early - time to cure possible problems
- Bargaining power - price, terms, & timing
- Close quicker - verifications have been made
There a big difference in sitting down with a trusted mortgage professional compared to going through calculators on a website. The cost of being pre-approved is a bargain and generally, limited to the cost of the credit report.
Even if you have been pre-approved, a suggestion that can't hurt but may help is to get a second opinion from a different lender. It will either verify that you have a good deal or you’ll discover that you can improve it. Either way, it works to your advantage. Contact me if you'd like a recommendation.