Posted by
admin on Jul 30, 2010 in
Buying,
Real Estate The economy is stabilizing and home prices seem to be holding. It’s not just as good a time as ever to buy a house, it’s a great time to buy a home! Here are some key reasons why now is a great time to buy a house:
1. Low mortgage rates serve as an equity shock absorber. When buyers borrow at today’s record-low rates, they start building equity as soon as they close. That means they have a little give to absorb a few ups and downs as the still-recovering housing market gains traction.
2. Houses are in move-in condition. Homeowners have continued to spend on maintenance and repair, according to the Harvard Joint Center on Housing. Homeowners who have been holding back kept their houses in good shape while they waited. As those houses enter the market, they are in marked contrast to tattered foreclosures.
3. Terrific houses are coming on the market. Foreclosures are finally starting to clear the system – and this is just the opportunity that owners of many desirable properties have been waiting for.
4. Appraisal regulations are finally aligned with market realities. Fannie Mae has adjusted its appraisal guidelines…again. Now that appraisers have more flexibility to set values that reflect the current market, today’s deals will make it over the finish line.
5. Plenty of programs. Homes are more affordable than they have been for years, but communities have stuck by “workforce housing” programs that encourage middle-class families to buy houses. Buyers who qualify can get a big boost by combining one of these programs with today’s low mortgage rates.
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Posted by
admin on May 7, 2010 in
Buying,
Editorial,
Misce4llaneous Property is, typically, a big investment and new property owners want to protect the money that they invest in their property. One of the fundamental things that property owners want to protect is their ownership rights. Accordingly, it is important to have a title search conducted on the property and to purchase title insurance in case anything was missed during the title search.
Title Search
A title search, if done properly, will give you a chain of title for the property, show any restrictions on the property, such as easements, and identify any outstanding liens on the property. A title search is done by searching the local land records in the town, city or county where such records are kept for the property.
Anyone can go to the office where land records are kept and perform a title search. However, many people choose to employ a title search company or an attorney to do the title search for them. It is important that a title search be thorough and reveal all encumbrances, liens, and owners of the property so that a person buying the property knows:
- that he is buying a piece of property that can be legally sold to him; and
- if there are any restrictions or encumbrances that he will become subject to or liable for when he becomes the property owner.
For these reasons, prospective property buyers should have a full title search done. Limited title searches may be done if property owners are not changing such as during a refinance of the property.
Title Insurance
While a thorough title search will reveal potential problems and give a buyer the opportunity to rectify them, it is always possible that the person conducting the title search missed something. Since the government only provides a method for checking property ownership and encumbrances and does not verify such ownership or encumbrances, it is important to protect your investment with title insurance.
Title insurance protects property owners from incurring financial losses because of a problem with the property’s title. Title insurance companies require policy owners to have a title search done before obtaining insurance. Most banks require mortgage applicants to obtain title insurance prior to issuing a mortgage so that they can be assured that their interest in the property will be honored if a previous lien, owner or other encumbrance should come to light in the future. Title insurance policies may be issued as an owner’s policy if it is purchased by the homeowner or a lender’s policy if it held by the mortgage lender. Typically, the cost of title insurance is a one-time fee and the insurance remains in effect as long as the same owner maintains ownership of the property. A subsequent owner would need to purchase his or her own title insurance policy as they are nontransferable.
Most United States jurisdictions maintain public, yet complicated, systems of land records. Home buyers should conduct title searches, or hire someone to conduct a search, and purchase title insurance in order to make sure that their property purchase is protected.
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Property is often bought and sold for business purposes. It makes sense, from a public policy perspective, to encourage the buying and selling of property so that business owners purchase the property that is best suited for their use. Property may include real estate, personal property such as equipment, tools and motor vehicles, or livestock, for example. The government, recognizing that the possible capital gain taxes on the sale of property might prevent some businesses from buying and selling property, has enacted what is known as the 1031 Exchange Rule.
What is the 1031 Exchange Rule?
The 1031 exchange rule is part of the IRS Code. It allows people to replace business or investment property without having to pay capital gains taxes at the time of the sale. It is meant to encourage the productive use of property in trade and business. Property that is bought with the intent of creating a quick resale and private residences will not qualify for a 1031 exchange. The potential tax benefits of a 1031 exchange are significant. Therefore, the IRS has established some strict guidelines about the types of properties and the types of transactions that are eligible for this tax break.
Does My Transaction Qualify as a 1031 Exchange?
If you are trying to determine whether your real estate transaction would qualify as a 1031 exchange then consider:
- Whether the properties involved in the exchange are held for valid trade, business or investment purposes;
- Whether the properties qualify as eligible for a 1031 exchange. Section 1031 b of the IRS Code explains what is and is not eligible for a 1031 exchange. For example, real estate is eligible but stocks and bonds are not eligible;
- Whether the properties are of like kind. For example, both properties are real estate in the United States and not other types of personal property or international real estate.
- Whether you identified the replacement property within 45 days of closing on your current property and closed on the replacement property within 180 days of closing on your other property.
- Whether the proceeds from the sale of your current property must go to a qualified intermediary until you purchase your replacement property. The qualified intermediary enters a written contract with the person who is buying and selling property. The qualified intermediary holds the funds from the sale of a property and acquires the next property and then transfers the property to the taxpayer.
All of the funds must be reinvested in the replacement property. Any cash that is left over after the purchase of the replacement property is called “boot” and will be taxed.
As is the case with many tax breaks, the requirements for a 1031 exchange are strict and the penalties for not complying with all of the requirements can be significant. It is, therefore, important to work with an attorney versed in 1031 exchnages before entering a 1031 exchange transaction. If you don’t have one or are not currently working with one, you can give me a call and I will recommend one that we have that we can recommend. The attorney can make sure that all of the requirements have been satisfied and that the exchange is made pursuant to section 1031 for the benefit of your business.
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Posted by
terryriw on Apr 19, 2010 in
Buying,
Finances,
Mortgages,
Selling 
This is a tactic used by sellers or buyers to help the buyer qualify for a mortgage. It is a lump sum paid at the closing. It pays the mortgage company for reducing the mortgage interest payments for two or three years.
If the seller wants to pay to allow the buyer to be qualified, the seller pays for it. If the buyer has the cash but doesn’t qualify for the payment at current interest rates, the buyer could pay up front for the reduced interest rate that would be charged for two or three years.
Example of a two-year buydown:
The home price is $134,000, if the seller pays to have interest and monthly payments reduced by 2 percent in the first year and one percent in the second year, the seller would pay the mortgage company about $4,000 at the closing.
A detailed example of a three-year buydown
- For a $350,000, 30-year mortgage at 6.75 percent interest, Â the seller (or the buyer) could pay $15,853 at closing.
- The first year interest rate is 3.75 percent and the monthly payment is $1,621 per month. This creates a first-year savings of $7,790, considering that the payment would normally be $2,270 per month.
- The second year rate is 4.75 percent, creating a monthly payment of $1,826 per month, or an annual savings of $6,332 if the payment had been $2,270.
- The third year interest rate is 5.75 percent, resulting in a monthly payment of $2,043 per month or an annual savings of $2,731. (In the 4th through 30th years, the normal payment is $2,270.)
Add up the savings, and you will find they come to $15,853 in this case, which is what it costs to buy down the interest rate and payments for three years.
There is one other advantage to the mortgage buydown: It increases the payment more gradually than introductory-rate mortgages on which the monthly payment increases dramatically after two or five years.
Note: The 30-year interest rate in this example is different than rates presently charged on most 30-year mortgages.
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Posted by
admin on Mar 5, 2010 in
Buying,
Real Estate by Brandon Cornett
Beginning a home search can be a somewhat disconcerting task. Perhaps the biggest question many first time homebuyers have is where to begin the process. Some people begin by looking at real estate magazines or websites, while others call real estate agents right off the bat. The process varies.
So, what is the best way to begin your quest for a new home? In truth, any way you begin the process is a good way, because the most important thing is to get started. After all, you will learn a lot as you go. But there are some things to keep in mind:
Do the Proper Research
Buying real estate can be an overwhelming experience for the first-time buyer. But you can make the process much easier simply by understanding it. Start with the lingo. By learning the terminology associated with home buying and mortgage, you will make smarter decisions along the way.
Set Your Budget
The best way to begin looking for a home is to first sit down with a mortgage lender to determine how a high a mortgage you can afford and be approved for. Remember, there is a difference between the loan amount you can be approved for and the amount you can actually afford. So in the end, only you can determine your home buying budget — not a mortgage lender.
When dealing with a mortgage lender you will want to provide him or her with an understanding of what mortgage payment you are comfortable making so they can give you a sense of the size of the mortgage that equates to, based on your credit, income and other factors.
Taking this step first will help “frame” your home search so you are only looking at homes within your budget range. Many first time homebuyers fail to take this step and therefore waste time and energy looking at homes that are well above their budget.
You can find plenty of websites that offer mortgage calculators, and these tools are a good place to start when determining your budget. Just keep in mind that the one variable you can never predict in advance is the interest rate. Only by speaking to a lender can you get a full mortgage quote that includes the interest rate (based on your credit history).
Get Pre-Approved for a Mortgage
Another reason you may wish to start with speaking to a mortgage lender is so you can be prepared to show a pre-approval letter to the seller. This gives them the confidence that you can buy their home, which is especially important for homes where more than one buyer makes an offer (i.e. a seller’s market). Do not confuse pre-qualification with pre-approval. Pre-qual is an informal process in which the lender tells you how much of a mortgage you might qualify for. Pre-approval, on the other hand, is a more formal review of your finances and is likely to reflect the actual loan amount the lenders extends to you. In other words, the person selling the home will pay more attention to the pre-approval letter.
Though there is no wrong way to begin a search for a new home, meeting with a mortgage lender first may be the best way to begin your search and find your dream home. Just remember to always keep an open mind when visiting each property and envision the possibilities. You must also stay realistic about your finances and do your best not to over-extend yourself by purchasing a home beyond your means.
© 2009, Cornett Communications.
About the Author: Brandon Cornett is a consumer advocate and publisher of the Home Buying Institute. You may visit the author’s website at www.HomeBuyingInstitute.com to learn more about this topic.
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Posted by
terryriw on Dec 27, 2009 in
Buying,
Real Estate If you are thinking about the home you want in the coming year, this is a good time to compile your wish list, whether you’re looking to Santa or not.
After writing your dreams and wishes, your list of must-haves comes next.
Give yourself the gift of time to create the lists. You can enjoy that time whenever a new idea comes to you, whether it’s in the middle of the day or in the middle of watching NCIS on television.
Builders of up-scale homes say a state-of-the-art kitchen, walk-in closets and whirlpool tubs rank as the three most-coveted elements Americans over age 25 want in their dream homes. The survey of builders was made by market-research firm GFK Roper.
Your own list will be a lot longer as your customize it according to how your family lives. Fortunately, most of your needs today can be met by an existing home, and many of your wishes can be fulfilled at the same time.
A dream home doesn’t have to be a palace, but with home prices at their current levels, dreamers have the opportunity to buy more than they could in earlier times.
A few things parents may want to include in their list:
* A separate laundry room.
* A mud room with a half bath attached for washing up.
* Extra storage space for toys and sports equipment.
* Large kitchen with space for family dining.
* Fenced yard to keep small kids and big dogs contained.
No home will have them all, but many will have other amenities you will like even better.
If you’re a baby boomer or beyond, that home could be your reward for a lifetime of work service to others.
Terry Iwaniw
REALTOR Associate
ReSales & Investment Realty, LLC
Off: 856-795-3111 x263
Cell: 609-417-1086
http://www.sellmysnjhome.com
http://snjrealestate.ning.com
http://www.snewjerseyhomes.com
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I have prospective buyers asking me if FHA mortgages are a good deal these days, or are they strictly for lower-income home buyers?
In the past, most Federal Housing Administration (FHA) loans were made to lower-income borrowers. In fact, that is why FHA was established. In the 1930s, a working person would have to save 50 percent of the value of a house before being able to get a mortgage. The FHA changed that with programs that guaranteed loans made to people with lower down payments.
FHA itself does not actually lend money or set interest rates. Instead, it guarantees loans, insuring that private lenders are protected against defaults on loans. Today the FHA has a variety of loan guarantee programs for first-time borrowers, reverse mortgages, and refinances. The percentage of FHA loans in the mortgage market is about 25 percent.
In fact, while FHA loans still require smaller down payments and often have low interest rates, not all FHA borrowers are low income. In areas where real estate is expensive, borrowers can take FHA mortgages for as much as $729,750 but the limits vary from place-to-place. I can discuss FHA limits and requirements with you if you think such a loan would be good for you.
There are a lot of reasons people look to FHA loans. Today, if you want to make a down payment of less than 10 percent, you almost certainly will have to do an FHA loan. Borrowers can get a home mortgage for as little as 3.5 percent down.
As a government-insured loan, an FHA mortgage has easier credit qualifying guidelines than most lenders. Today, nearly all lenders require a credit score of 700 or more to qualify for a conventional mortgage. FHA credit score requirements are slightly lower.
Nonetheless, there is no guarantee that an FHA mortgage is a better deal than a conventional one. As always, shop around and deal with a reputable lender.
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Posted by
admin on Apr 17, 2009 in
Buying,
Finances,
Housing,
Real Estate In the past few months we have written a lot about the different home loans available to the home buyers, specifically, FHA loans and the different benefits of this mortgage product. But we have also written about the tightening of requirements in the mortgage industry, especially with the Freddie/ Fannie Conventional loans.
We have previously highlighted another type of conventional loan that requires NO down payment, NO monthly PMI, where the seller is allowed to pay all reasonable closing cost and prepaids, and NO hit to the rate for the zero down, it is NOT a first time home buyer program and no reserves needed.
But did you know that this particular mortgage also has a unique feature that all reasonable closing cost and prepaids can be rolled into the mortgage without the seller actually having to “pay” the cost (as long as the house appraises for the increased loan amount)? Why is this a good thing? We have had buyers who have submitted offers for homes that included seller concessions for the home sellers to help with the closing costs, only to have those offers rejected. Now buyers have another option and are not at the mercy of the homes eller. It is a conventional loan that has these great options and it is government backed loan (like FHA loans) but is backed by the USDA.
The downside of this loan is that tt is area-specific and income-limited, so it is important that you work with a lender who is very knowledgeable with these loan guidelines. If you are interested to find out which areas are eligoible for USDA loans, click here.
If you need help in finding a knowledgable lender or to better understand how this loan can be of benefit to you, or just give you some assistance with your home search and loan pre-qualification steps, simply call us at 609-417-1084 or email us at info@i-teamhomes.com
.
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Posted by
admin on Mar 3, 2009 in
Buying If you are thinking of buying a home, you might be confused about the many issues in the news from mortgage rates to mortgage bills in Congress. But the fundamentals of buying a home really haven’t changed and, in fact, there are new incentives on the horizon that should make home buying more attractive than ever.
There are plenty of homes on the market in every price range and if you want one of them, you need only do what generations of people have done. You just have to pay attention to these basics:
- First, cultivate good credit by prudent living. Pay your bills and pay them on time. Use credit sparingly.
If you do this, you’ll earn a good credit score, which is crucial to getting a good interest rate. Research shows that many consumers believe that they have to have a high income to have a high credit score, but that’s not true. In fact, income is irrelevant to your credit score. Your credit score is a rating based on how well you live up to your obligations, pay your bills and use your credit.
- Second, save money for a down payment. In the current climate, most lenders will ask you to bring some cash to the table in a mortgage deal.
- Third, find a house you love but can also afford. One path to financial freedom is to buy a modest house and build equity. When you decide to move up, you can sell your house and take a large chunk of the money from the sale and apply it to your new home. Your payment is lower while you live better. It’s the good, always-in-fashion way to live.
Congress is also planning some incentives for new home buyers. It appears first-time home buyers will get a tax credit of 10 percent of the purchase price of a home up to $8,000. That means in the year you purchase a new home, your tax bill could be reduced up to $8,000. Homeowners will not qualify for the credit if they sell the home in the first year and must live in the house for at least three years, or they will be obligated to pay back the credit.
To be classified as a first-time homeowner, you must not have owned a home in three years
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Posted by
admin on Feb 15, 2009 in
Buying 
You’ve found a house you like, but want to offer a little less than the asking price. What is the best way to do it?
How an offer is made has a lot to do with the outcome:
* Sellers are more comfortable with an offer if they know the buyer is qualified and eager to close.
* A buyer’s agent can help. When the agent presents the offer in person, the seller can ask questions that could lead to a favorable decision.
* A real estate agent essentially does the same. Though a real estate agent is working for the seller, the sale is still a primary goal.
* Always present your offer to the seller in person. Don’t fax.
* Some sellers don’t want personal contact with buyers. If you use a buyer’s agent, be sure the offer is presented in person to the listing real estate agent.
* When a real estate agent requests that offers be presented in a sealed envelope, ask the real estate agent to prepare a summary to accompany the offer. The summary should tell something about you and highlight positive aspects of your offer, such as an early closing date.
* However your offer is presented, your chances of acceptance are improved by including a copy of a preapproval letter from a mortgage company.
* When multiple offers are involved, some buyers write a letter to the seller to personalize their offer. It won’t help if you aren’t qualified or if the offer is too low.
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