Weekly Mortgage Application Survey

The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 28, 2011.  The Market Composite Index, a measure of mortgage loan application volume, increased 11.3 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 13.2 percent compared with the previous week.  The previous week did not include a holiday adjustment for Martin Luther King, Jr. Day.

 
Please visit here to read more about the Mortgage Application Survey.

Mortgage Applications Indexes; Mortgage Bankers Association (MBA).(Vital Statistics)(Statistical table): An article from: Mortgage Banking

What You Need To Know About Escrow

If you've ever made an informal bet with a friend, you may have asked a third person to hold the money until the wager was resolved. When you take out a mortgage to buy a home, you're doing something similar by opening an escrow account.

To find out more on how escrow works, its purpose, how it benefit's you and more visit here and read the full article.

If you are looking for even more information about escrow, you can visit here and learn the principles and practices of escrow. 

 

Banks Regulators Blasted By The Financial Crisis Probe

WASHINGTON • "Wall Street's plunge into the U.S. housing market reached such a level of madness that three giant banks kept buying billions of dollars in risky mortgage securities when most investors were shunning them, a congressional commission said Thursday in its long-awaited report on the causes of the U.S. financial crisis".


To read more on this report by Greg Gordon and Kevin G. Hall of the McClatchy Newspaper click here. 

Want to learn more about the financial crisis? Then click here and you can have all the information you need in under a minute.

Not All Home Improvement Upgrades Will Guarantee A Successful Sale

Many of us know that the average home buyer out there today would prefer to purchase a turn-key home (move-in ready). Buyers do not want to have to deal with new paint, new flooring or having to update certain rooms. But, as a seller, how do you know when you have over improved your home to the point that buyers may not be willing to pay extra for your upgrades?

Below are a few good suggestions to help you stay on track with your renovation projects, especially if you are planning to sell your home in the near future. However, if you plan on living in your space for a while there should be nothing stopping you from making it unique and exactly how YOU want it to be.

Outrageous Kitchen Renovations:

Although you may enjoy cooking on a huge stainless steel stove and having that extra space with that enormous island, it may be a turn off for a potential buyer. Buyers know that the value of a home will increase with those types of upgrades and most will not be willing to pay extra for an over the top $30,000 renovation.

Kitchens can be remodeled on a budget of around $1,000 and designed in such a way to appeal to most potential buyers while still keeping you satisfied with a beautiful space and quicker sale.

Extreme Bathroom Renovations:

Having a shower with numerous sprayers that hit you from all directions and a jacuzzi tub that could possibly fit 4 or more people, may start your day off great, but to a buyer who is wanting to conserve water, this renovation may not be the best.

Keep your bathroom upgrade modest with simple designs and basic new fixtures to appeal to a larger group of potential buyers.

A Pool/Hot Tub:

Having a pool or a hot tub can be a blast when you have friends and family over. But remember that a potential buyer will be crunching numbers to figure out how much it will cost to keep it maintained. You also need to keep in mind about homeowners insurance coverage. Either one could be a liability, especially for families with young children and that could affect their coverage.

A pool/hot tub will limit the number of people looking at your home. Only those wanting a pool or hot tub will become potential buyers when all other potentials could have been included if there was no pool or hot tub.

A Room Too Specialized:

Never, and I repeat never close in a perfectly functioning garage and make it a bedroom, family room, game room or whatever you so choose, if you plan on selling. Potential buyers WANT a garage. Let them decide if they want to convert the garage to a random room.

The problem is that once the garage has been converted, a potential buyer will see that as a pricey renovation project before they even decide to purchase the home. They will wonder, "where am I gonna park my car or store my tools and lawnmower"? Do not even allow them to have that thought cross their mind. However, if you plan on staying in our home and do not wish to sell, than you can make that garage anything you would like.

A home renovation or room upgrade can be tricky, especially when you know you will be selling and want to make sure you do not turn away potential buyers. To be sure you do it correctly, always stick to the basics. Neutral color on walls. Simple, small updates throughout your kitchen and bath, such as new knobs, fresh coat of paint on cabinetry and inexpensive new appliances and hardware.

You can really transform a room on a small budget and make it appeal just as much to potential buyers as you would if you would have payed more. However, the smaller budget choice will get you more foot traffic and a quicker sale.

Designed to Sell: Make any home the hottest property on the block with expert advice from the popular HGTV series

Be Professional With Your Lease Option Tenants

If you are deciding to enter into the real-estate business and become a landlord, always remember to be professional in all that you do that pertains to your property. Potential lessee's want someone who is going to show up on time to appointments and truly cares about the tenant and their well being.

Always show up dressed in business attire. Do not make an appearance in dirty jeans and an old t-shirt. Remember the way you portray yourself is how others will also portray you. Also, make sure you have professional looking business cards, website, contracts and even the way you answer your phone. The little things will take you a long way.

Finally, give the potential tenant a well put together packet that they can review once they are at home. Include in this packet a cover letter that breaks everything down for them. They should know exactly what to expect, not only with the property, but also with you as their future landlord.

 

Be A Successful Property Manager

Looking For A Good Investment? Zillow Names The Best Places To Invest In The Country For 2011

Zillow.com's research team put together a list of the best places in the country to invest in 2011. Although it may be difficult to find good news coming out of the latest housing market data, there is a bright side to the housing plunge. There are a lot of opportunities out there for average homebuyers and investors alike and affordability is at an all time high.

The extensive real estate data, concluded by Zillow, allows us to take a deep look into the housing markets across the country. This research is meant for sophisticated investors who are interested in making a long-term investment in properties that will produce rental income, not those investors looking for a quick flip. Focused more on regular positive cash flow, these types of investors usually expect the value appreciation to be quite descent.

Zillow looked at 4 factors in individual markets across the nation.

1. Price-to-income ratio: 
The relationship between local incomes and home values over time, pinpointed the historic norm, and compared the price-to-income ratio today. Places where home values are currently above that historic norm got high marks, because that suggests property values may have over-corrected in the housing downturn, so this year would be a good time to buy.

2. Foreclosures:
Places where foreclosure rates were falling, which means the local market is likely to improve, were also included. Although attractive to many investors, we wanted to make sure there is still an ample supply available.

3. Price-to-rent ratio: 
Places where the difference between the annual cost of renting or buying was small, was also examined. This means that current purchase prices are appealing now, but that rents could fall in the future. However, rents may be high now relative to the purchase price, so the property might generate income quickly.

4. Home value appreciation: 
Since it’s more attractive for investors to buy in a relatively strong real estate market, the Zillow Home Value Index (measures the median value of all homes in an area) needed to increase.

According to Zillow, the best place to invest would be Merced, CA. In Merced, the home values are ascending again after a substantial adjustment during the downturn. Foreclosures are falling, but sales of previously foreclosed homes made up 53 percent of all sales in October, so there are plenty of choices for investors. 


NOTE: All information was received from Zillow.com

Real Estate Investing For Dummies, 2nd Edition

Is Short Selling A Good Idea?

By now, most of you have probably heard of the term short sale. But for those who have not, it is when a seller, usually one in a current financial hardship, tries to sell their home that is worth less than the amount owed on their mortgage. With a new buyer in place, the bank needs to approve the loss the seller will be taking as a result of the sale, and once approved, the short sale can close.

Today, there are more than 7 million households in trouble. Which could mean that the home is either already in the foreclosure process or the household is late on their payments. Unfortunately, about half of the homes that get foreclosed on in this country, the owners knew nothing about it. Short sales have become the preferred process of absorbing the immense amount of distress sales that are mounting throughout the country. Many banks today are seeking alternatives to foreclosures.

While going through a short sale, the seller will remain the owner while negotiations are being made with the bank concerning the terms of the sale and how it will affect the financial future of the seller. You want someone who is experienced and relentless, when dealing with a large financial institution and your financial future, on your side.

Many people choose to ignore all the awful things that are going on around them and allow their home to get foreclosed right from underneath their feet. A foreclosure will destroy your credit and is most likely the worst thing you could do to yourself. However, assuming that you have researched alternatives to stay in your home, a short sale would be the best thing to do for yourself. There are some government programs created to help keep homeowners in their home, and people need to know that these programs do exist and that they are a feasible option. Although, for many homeowners, the affliction is far too severe to justify staying in the property no matter how the terms of the loan are readjusted and that's when a short sale becomes the most logical and reasonable solution.

SHOULD I SHORT SALE MY HOME? HOMEOWNERS GUIDE : HOW TO SURVIVE THE WORST REAL ESTATE MARKET IN HISTORY

Simple Steps To Buying A Home For The First Time Homebuyer

When you first sit down and decide that you want to invest in property, do you know the process that you will be going through? Buying a home can be a headache for most, but for those that have never experienced it before, they may develop a migraine.

Buying a home can be summed up in 5 easy steps that can be done in any order you so choose.

1. Hire An Agent. 

• Agents will know of new properties that are going to be available that may not be on the market yet.
• There are some agents that will take a sneak peak of the house for you.
• An agent will let you know if a home is overpriced.
• An agent will drive you around, so there will be no need to waste your own gas.
• An agent can send you listings directly from MLS that meet your criteria.

2. Find Property To Buy.

• Try to look at a maximum of 7 homes. Anymore than that will begin to make you confused.
• Do some research on the areas you are considering and narrow your search.
• Select a neighborhood.

3. Get Pre-Approved For A Loan.

*For information about what type of loan is right for you, check out my last blog!*

4. Negotiate The Asking Price.

• Be aware that a seller can ask for whatever price they want. However, it does not mean they will get that price.
• Ask your agent for comparable sales and choose your price from there.
• In a buyers market, you may have an opportunity to pay less than the asking price. In a sellers market, expect to pay a little more than the asking price. Your agent should give you a good price range to start your negotiating.

5. Hire A Home Inspector.

• You need to know how your particular state handles a home inspection. Some states, the home inspection is done before an offer is even made. In other states, it is a contract contingency that will allow you out of the contract. 
• If you love the house, and the home inspector finds a problem, ask the seller to fix it. They are not required to do so, but they may decide to, so that they do not lose your sale.

    

The Key Steps To Buying A First Home: Essential Tips For Buying A House For First Time Home Buyers That Will Help You Look For Houses For Sale, Homebuyer ... Your Family Will Live In For Years To Come

Choosing The Right Mortgage For You

 With home prices as low as they are, it's no wonder potential buyers opt for the first mortgage that may appeal to them. Well, this article will hopefully help you to see which home loan is right for you and why.

It is important to understand about your mortgage because you will be carrying it around with you for quite sometime. So, before you decide to take that advice from a friend, who recommends you get the same loan that is causing them to pay way more than necessary, do a little research. 

First off, you need to make sure you qualify for a loan. So there will be no falling in love with a home just yet. It is important for not only you, but also to your agent, to be pre-approved. Pre-approval shows your agent that you indeed have the money to purchase the property and that you are serious as well about the decision to purchase the home. 

To find out more information about qualifying for a mortgage, please visit: http://www.homeloanlearningcenter.com. 

It can be a little overwhelming at times when searching for that perfect mortgage. Just rest assure that a little research never hurt anyone, nor does it take up much time. Here is a list of some of the possible loan options you may come across:

30-year fixed-rate mortgage: This is the most common home loan. It allows the borrower 30 years to pay back the loan at a fixed interest rate (interest rate will not change) and neither will the payments. Choosing this type of loan will guarantee stable and anticipated mortgage payments. People who tend to choose this type of mortgage typically plan to keep their home for quite sometime. 

15-year fixed-rate mortgage: This type of loan is a little more difficult to qualify for because the income requirement may be higher. It also allows you to own your own home in half the time. Because it is a 15-year mortgage, you will end up paying less in total interest over the life of the loan. However, because it is a shorter term than the 30-year mortgage, monthly payments will end up being higher. This type of mortgage is a good choice for those who can afford higher monthly payments because of it's lower total costs and shorter term. 

Adjustable-rate mortgage (ARM): Because the borrower assumes the risk of changes in interest rates, this type of mortgage can offer lower interest rates and mortgage payments at first . Borrowers usually choose ARMs because the lower initial payment makes the home more affordable up front. However, the risk of an increased mortgage payment, which can sometimes be significantly higher, must be accepted by the buyer.

The interest rate and payments on an ARM are adjusted based on changes to a specific interest rate index, after a certain period of time. These adjustments, according to the ARM disclosure you will receive from the lender, can result in payment increases. A payment cap, life cap and floor cap are always associated with an ARM.

Those that are intending to sell or refinance before the rate adjusts upward are typically who choose an ARM. These borrowers must be certain that they could afford the post-adjustment higher payments if they are unable to refinance or sell.

NOTE: During times of slow housing markets and high foreclosure rates, some types of ARM loans may not be available. Fluctuations in the economy often determine whether certain types of the loans are available. ARMs are more of a risk to the borrower and lender, and when the economy is slow, they become riskier. Lenders do not want to risk handling foreclosures, just as much as borrowers don't want that risk. 

To find out more information on ARMs, please visit: http://www.homeloanlearningcenter.com.

Interest only: Typically available for only a limited time, this option can be a feature of any type of loan. The loan balance will not increase and paying only interest gives you the luxury of having lower payments. However, equity is not built, because the balance does not decrease, unless the home ends up appreciating. If the value of the home does not increase, you may end up owing money if you decide to sell. Principal payments can be made at any time during the interest-only period, in most situations.

Those that choose this type of mortgage are usually those who plan to move or refinance before the interest-only period is expired. They may also assume their income will increase drastically and that they will receive large bonuses at certain times of the year. Higher monthly payments must be expected if they decide to stay in the home or cannot refinance. Refinancing, payment of a lump sum or paying on the principal is also expected at the end of the fixed period.

Low/no documentation loan: Those that have trouble with income verification, choose to use this type of mortgage. Included in this group are those that are self-employed, service-industry professionals and people who work for a commission. No proof of income or assets is required by the lender. Your debt-to-income is also not a consideration. The lender assumes a higher risk of default, so the interest rate can be higher. A good credit score and a larger down payment may also be required.

Reverse Mortgage: Homeowners over the age of 62 are allowed to convert a portion of the equity in their primary residence into income. These seniors are offered an option to pay for a variety of expenses, which has made this mortgage increasingly popular, especially among the baby boomers who are nearing retirement. These loans are secured by the home and the homeowner does not have to repay the loan until they sell, permanently move out of the home or die.

Buydown Mortgage: Enabling you to get a lower interest rate by paying a lump-sum fee or by paying a fee, this type of mortgage is financed over the life of the loan. Similar to paying "points", buydowns, as an incentive to make a sale by creating lower monthly payments, are usually paid by the seller or the builder. The cost of those points may be included in the selling price, and you may end up paying more for a house than its actual appraised value.

There are two types of buydowns: 1.)Temporary and 2.)Permanent.

1.) Temporary buydown: For the first few years of the loan, the interest rate and monthly payments are lowered. The “3-2-1” buydown, is the most common type of temporary buydown.

2.) Permanent buydown: During the life of the loan, the interest rate is lowered. In order to reduce the interest rate by only 1 percent for the life of the loan, this type of loan will usually cost six to eight points.

NOTE: Not every type of loan is listed and additional research should be considered before making a final decision.

Mortgages 101: Quick Answers to Over 250 Critical Questions About Your Home Loan

  

Celebrity Real-Estate News

  

Bristol Palin is enjoying some sense of compensation in real estate after she purchased a home for nearly half the cost of its original value. 

Palin, who is the daughter of former vice presidential candidate Sarah Palin, purchased a home in the hard-hit real estate region of Maricopa, AZ for a reported $172,000 in cash. The home sold for $329,560 back in May 2006. Even though she may have finished third in Dancing With The Stars, she is quite a smart home investor. 

Bristol is being brought here because she is rumored to be enrolling at nearby Arizona State University, which is located in Tempe, AZ, about 30 miles north of her new home in Maricopa.

                            

The Complete Idiot's Guide to Buying Foreclosures, 2nd Edition

REO Sales Increase Due To Fannie Mae Incentives

InmanNews (Inman.com) reported today that there are some incentives to purchasing a foreclosure, for not only the buyer, but also the real-estate agent.

In September 2008 it seemed as if our financial world was heading towards a collapse. That is when the government came along and took over Fannie Mae as well as Freddie Mac.

Both Fannie Mae and Freddie Mac are 80 percent owned by U.S. taxpayers, with estimates as large as $1 trillion to fix their problems; the future for both of them is still in question.

Fannie Mae has pushed thousands of its properties back into the real-estate market that are foreclosures. Homepath.com, launching in 2009, has become a great site for their homes to be noticed. This website helps potential buyers looking for a foreclosure take a ride in the driver’s seat by having a right at your fingertips search tool that lets you search specific areas and so on.

Fannie Mae has also decided to provide some incentives to purchase a foreclosure. Qualified buyers, who will occupy the residents, can receive up to 3.5% towards closing costs. While selling agents, who represent the seller, will receive a $1,500 bonus.

For more information on foreclosures in your area checkout homepath.com to see if you qualify for these incentives. 

The Complete Guide to Locating, Negotiating, and Buying Real Estate Foreclosures: What Smart Investors Need to Know - Explained Simply

Be Bold and Buy When It's Cold

The spring and summer months are thought of to be the best time to buy for a typical first-time home buyer. Many people tend to list their homes during the summer months so if you were unsure of when to buy, you would probably agree with that notion. However, when buying a home during the winter months, when there are fewer buyers out there, you may have more room to negotiate the purchase price.

People, who sell during the winter time, usually have a valid reason to do so. A good example would be a job transfer in another state or area. Therefore, they will need to be selling their home at a quicker pace than a summer seller who may be taking their time and waiting for the best offer. 

Because there are more homes on the market during the summer months, you will most likely have a limited selection during the winter. But, for the first-time home buyer, you have the opportunity to negotiate on the purchase price and to secure a bigger bang for   your buck. In the long run, we would all like to save a little money.

Real Property vs Personal Property

A common question potential buyers tend to ask their real-estate agents is, "Is this item included in the purchase"? Well, although it may seem like a simple question, in the real-estate world it extends far beyond that.

When a buyer walks into a home, it is very possible that they will assume certain appliances will stay, all light fixtures will also remain and lets not forget window treatments. Unless otherwise noted in the contract, for the most part they are correct. When a home is shown to a potential buyer all items of sentimental value to the seller should be out of sight. Because once a potential buyer sees a beautiful chandelier in the dining room, even though that chandelier may have come from the seller's late grandmother, it is highly likely they will want it included in the purchase or they will not be making an offer. Generally, anything that is affixed to the property stays without a provision in the contract stating otherwise.

Sellers tend to think that when they are setting the stage for a potential buyer and choosing what furniture stays and what goes, they get to choose what stays and what goes. If it is movable and you want it there for the open house that is fine. But, again, if it is a fixed item (real property), it needs to be replaced if you plan on taking it with you to your next home.

As a general rule, real property stays with the home and personal property goes with the seller.

Real Property - Is immovable (stays with the property). It is the earth's surface that goes from the center of the earth and up into space. It also includes permanently attached items by people or nature, and inherent to its ownership, the benefits, rights and interests. Examples of real property are: Trees and shrubs (perennial plants), ceiling fixtures, chandeliers, attached appliances and anything else fixed to the property.

Personal Property - Is movable (goes with the seller). Another term you may hear used for it is chattels. It includes movable items such as stocks and bonds, furniture, annual flowers and plants and growing crops (emblements), clothing, money, leases and mortgages. Personal property, however, can become affixed to real property and be immovable. An example would be carpeting. Before the carpet is put down in the house it is personal property, but when it becomes affixed it is now real property.

So remember, if you are selling your property and there are items that are fixed and you would like to keep them, they must be removed and replaced with one of less value to you. However, you can keep them on the property and state in the contract your request. And for the buyer, don't be afraid to ask your agent what is staying and what is going. Sometimes, items the seller wants to keep could become a good bargaining tool for the potential buyer.

Make This the Year You Sell Your Home

In our struggling housing market out there today, many home sellers are becoming frustrated that their home is just not selling. It is a buyers market and making your house stand out above and beyond all the others that are for sale is very tricky. By listing your home in January, you may be able to catch those trying to dive into the buying world right after Christmas. And if you have done your homework and created a beautiful backdrop, than you should have no problem standing out.

Pricing

For every seller out there who thinks their home is worth more than it really is, listen to your real-estate agent, or at least check out your competition and see where your home falls if you plan on a "for sale by owner". It will become a very tiresome process for you if you don't price it right from the start and you then have to turn around and play with the numbers.

You might want to consider talking to a few real-estate agents to see what they think your home should be sold for. Talking to more than one will help you to figure out which number works best for you. A good way to do this would be to call around your local real-estate agencies and have them come to your home. Open houses are also a good way to see what comparable houses are going for and to help you see things a little more clear.

Set the Stage

This could be one of the most vital pieces of information on how to sell your home you can receive. You can talk to your real-estate agent or even a professional stager to help you out with staging your home for potential buyers.

Remember less is ALWAYS more. You want your home to be decluttered and clean. That means even the refridgerator, stove and all of your cabinetry should be cleaned out. Rent a pod, or storage facility if necessary while your house is on the market. Decluttering will not only help the buyers to see the space better but it makes each room and closet appear larger. Email me pics of rooms you are struggling with and I'll let you know what you can do to fix it.

Think light and bright. Make sure you have a neutral pallette throughout your home. Both on your walls and furniture. The home must appeal to as large of a market as possible. So eliminate any obstructions like a tacky or taste specific paint color.

Make sure that every room has a label or a defining purpose. Buyers can become confused at times when they walk into an empty room and they try to rack their brains on what could be instead of you showing them what actually is. 

Fix any issues with the home that you are aware of before puting your home on the market. This can be done by hiring a home inspector.

And finally, I have always loved the idea of placing plug in air fresheners around the home. Vanilla in the kitchen area, clean cotton in the laundry room and so on. Also, fresh baked cookies for an open house adds a special touch and just another sweet smell in the air to lure the buyers in.

Have an Open Mind During Showings

Provide all potential buyers with as much information as possible. Utility bills, what needs to be replaced, changes that have been made to the home, floorplan, etc.

Be flexible when it comes to showing your home. Not every potential buyer can see your home when you get off work. So let your real-estate agent take the reins and show the home when you are not available. Make sure the agent can maneuver in and out of the property easily.

Always keep the place clean because you never know when someone wants to see it and you don't want to have to turn them away because you became lazy. Buyers want to like your home, that is why they are there. Don't give them any reason to not return or to not make an offer.