Where to Begin When Buying a Home

by Brandon Cornett

© 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.

Tags: begining the home buying process, beginning a home search, buying a home, first time home buyers, home buying process

For Home Buyers: 5 Best Websites for Credit Score Information

by Brandon Cornett

If you’re planning to buy a home in the near future, you should know your FICO credit score. In fact, your credit score is one of the three most important factors considered by mortgage lenders (along with your debt and income levels). If your score is high, you’ll have a much better chance of getting approved for a loan. You’ll also qualify for a better interest rate, which could save you thousands of dollars over the life of the loan.

It’s important to check your FICO score early on in the home-buying process, because it takes time to improve a low score. While you’re entitled to a free credit report per year, you’ll have to pay a small fee for the credit score. They are two different things. You can purchase your score from MyFICO.com — this is the company that actually designed the FICO scoring model.

But what if you check your score and find out that it’s low? You could qualify for certain types of loans with a score in 600 range, but you’ll be much better off in the mid- to upper-700 range. The question now becomes: How do I Improve my score? And that brings us to the purpose of this article.

5 Good Sources of Credit Information

Here are five websites worth visiting, if you want to learn more about your credit reports and scores:

1. www.myfico.com — We touched on this website earlier. This site is owned by the Fair Isaac Corporation, the company that created the credit-scoring model used by most lenders. They have plenty of educational articles, as well as a forum where you can post questions. It’s well worth a visit.
2. www.homebuyinginstitute.com/credit.php — On this page, you’ll find a collection of more than 100 articles relating to consumer credit. This collection was compiled over a two-year period, as readers sent in their questions. If you have a question about credit reports and scores, you’ll find the answer on this site.
3. www.annualcreditreport.com — This website is jointly owned by the three credit-reporting companies (TransUnion, Equifax and Experian). This is where you should go to request your free reports. This is the only site that is regulated by the Federal Trade Commission.
4. www.ftc.gov/freereports — Why do so many people offer “free” credit reports, and then try to charge you for stuff? It’s a marketing strategy referred to as bundling, and you can learn the truth about it on this website.
5. www.bankrate.com — This site is a treasure trove of helpful advice. In addition to credit tips, it explains the mortgage process in great detail. Start with a keyword search, or click on the “news and advice” link.
   Research is the first step to home-buying success. The five resources listed above will help you get started on the right foot.

© 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.

Tags: buying a home, credit score, free credit report, free credit score, home buyers, mortgage qualifications

Dream the dream: You can own a home

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.

Tags: american dream, buying a home, real estate in camden county, real estate in gloucester county, real estate in new jersey, the real story

Is There Another Mortgage Fraud is on the Horizon?

In the last two days we have received numerous flyers in our e-mail from local mortgage representatives telling us that First Time Home Buyers can receive their $8,000 credit UP FRONT and use this money as a DOWN PAYMENT. This sounded too good to be true so we checked it out and we were right, this was too good to be true. 

We personally phoned the IRS this morning, February 27, 2009 and spoke with an IRS expert on the First Time Home Buyers Credit.  This is what we learned:

The 2009 tax credit is for $8,000 and for properties purchased in 2009 by first time home buyers and does not have to be paid back provided the buyer lives there for 3 years. 

The buyer can apply for the 2009 tax credit on their 2008 income tax return if they have not filed yet.  If the buyer has already filed their 2008 return and received their refund or paid their taxes, they can file an amended return and receive the $8,000 tax credit without having to wait to file the 2009 taxes. Of course, the buyer can wait and apply for the $8,000 tax credit when they file their 2009 income taxes next year.

This provision, while a little confusing, was designed to jump start housing market. However, under NO CIRCUMSTANCES can a buyer apply for this $8,000 credit BEFORE THEY CLOSE ON THE PROPERTY AND USE THIS MONEY FOR A DOWNPAYMENT.  They are not a FIRST TIME HOME BUYER until they have (bought) closed on the house and have the keys in their hands.

If you think about this logically, you would realize that if in fact this was an $8,000 gift for a down payment, it would be all over the news.  We wouldn’t need some mortgage representative to tell us about it. This very loose interpretation of the First Time Home Buyers credit is just another attempt to get around the rules.

We can think of some serious ramifications of applying for a tax credit you have yet to earn.  We can sum it up in two words TAX FRAUD.  We do not want any mortgage representative telling our  buyers to commit fraud.  We can imagine some nightmare scenarios that we do not wish to be involved, the least of which the buyer does not settle, for whatever reason and has applied for and received the $8,000 credit.  The worst of this is that when the ‘buyer’ is audited the following year, for applying for a tax credit that they did not earn and they tells the auditor that their real estate agent told them to file for the money.

We suggest that anyone who is interested in finding out the FACTS regarding this $8,000 tax credit for first time home buyers, that they call the IRS directly at 1-800-829-1040 and ask to speak to an agent who is familiar with the FIRST TIME HOME BUYERS CREDIT and ask the direct question, “Can a first time home buyer apply for the $8,000 credit before they close on a property and use this money for a down payment?”  The answer will be NO.  But check it out for yourself.  If you have a buyer who has been told this by a mortgage rep and does not believe you when you tell them they cannot apply for this credit before they close on the property, give them the IRS number.  Keep in mind that you are calling the Federal Government and will be on hold for 15-20 minutes.  But it is worth the wait to learn the facts.  Use your speaker phone, the time will fly by.

If something sounds too good to be true, it is our responsibility to wade through the muck and verify, verify, verify.  The last thing we need is another mortgage catastrophe a few years out

Linda Kerr Iwaniw & Terry Iwaniw

RESALES & INVESTMENT REALTY, LLC

Haddonfield, NJ.

Tags: buying a home, first time buyers, first time home buyers, firstv time home buyer credit, homeowners, mortgages, tax credit

How to make an offer to purchase real estate

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.

Tags: buyers, buying a home, first time home buyers, home buying

Stimulus Advances With Tax Credit Changes

The $790 billion stimulus package hammered out by House and Senate conferees late yesterday increases the home buyer tax credit to $8,000, from $7,500, and drops the repayment feature for buyers who hold on to their property for at least three years.

The NATIONAL ASSOCIATION OF REALTORS ® has sought removal of the repayment requirement because it discourages buyers from taking advantage of the tax credit. The three-year minimum holding period is a safeguard against speculators’ use of the credit.

The legislation also extends the effective date of the credit to December 1 from June 30, and extends eligibility to borrowers who buy their home with the help of state or local financial assistance that comes from the proceeds of tax-exempt mortgage revenue bonds.

The credit remains open only to first-time buyers (those who haven’t owned in at least three years) and some income eligibility restrictions apply, but those are unchanged from the existing program.

Other provisions reportedly in the bill that could help housing markets and communities include:

• FHA and conforming loan limits.
  Specifics have not been released but reports indicate that the 2008 limits have been reinstated for 2009 except in those communities where the 2009 limits are higher.  Additional increases in individual communities may also be available at the discretion of the secretary of the U.S. Department of Housing and Urban Development.
• Foreclosure mitigation and neighborhood stabilization.
  Funding for states and localities to be used for neighborhood stabilization activities for the redevelopment of abandoned and foreclosed homes are authorized. Some news reports put the funding level at $2 billion.
• Rental assistance.
  Up to $1.5 billion to provide short-term rental assistance and other aid for families during the economic crisis.
• Transportation infrastructure.
  Up to $29 billion for highway construction projects, $8 billion for rail projects, and $5 billion to weatherize low-income homes.
• Rural housing development.
  Increased funding for the Rural Housing Service direct and guaranteed loan programs.
• Low-income housing grants.
  Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations
• Tax-exempt housing bonds.
  Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT). In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds
• Energy efficient housing.
  Grants for energy retrofits for federally assisted housing (Section 8), funding for energy efficiency and conservation block grants to states, and Increases in the residential tax credit through 2010 for certain energy efficient upgrades.

Tags: Alternative Minimum Tax, AMT, buyers, buying a home, economic stimulus, Energy efficient housing, grants, tax credit, tax credit for buyers

Do you Buy First or Do You Sell First?

It can be difficult to figure out whether to sell your home first, before you buy, or vice versa in the busy real estate market.  If you sell first and haven’t found your new home yet, where are you going to live? But if you buy first without selling how can you afford to cover the cost of owning two homes if yours doesn’t sell?

If you sell your home before you buy, you eliminate the financial guessing game. Maybe you like to play but I would like to know how much money I’m working with when I go looking for a new home! The only downfall to that approach is whether you have a place to stay or not. You may not find your new home in time, or if you do, maybe the possession dates don’t line up. Then you are stuck renting for however long, and if you are a growing family with lots of stuff, maybe storage comes into play.

So should you buy before you sell? In some cases you may have to. Say you found your perfect home, and you’ve been looking for a long time. It’s priced right and it will sell fast! In this case you may have to! But if you’re dealing with a slow market, it could be very dangerous. Now you’re looking into bridge financing, which allows you to own both homes, while trying to sell yours. But think of all that interest you are paying on a hefty lump some of money.

The ideal way this transition will happen all depends on timing. If you’ve done your research, know pretty well what you are looking for and what area you want to find it in, then you want to list your home first. If you do get an offer right away you can always add a contingency clause in the contract that is conditional on you finding your new house in a certain period of time. On the other hand, if your home hasn’t sold by the time you find your new home, you make an offer subject to the sale of your existing home in a certain time period. Depending on the market and the other home owners’ situation, sellers might not accept this, but if this works you are more likely to make the dates match and you’ve already got the ball rolling on your own house.

In conclusion, selling your home first is less risky and you’ll usually end up with a better price on both ends. Think of it this way, you’re not in a rush selling, so you won’t be forced to accept a low offer, and if you’re putting an offer on a house and haven’t sold yours yet, what sort of bargaining position are you in? You’re asking the seller to have faith in you selling your house and give you a deal on the new one! This is where your professional real estate agent comes in and works with you to make sure that the whole process is as stress-free and smooth as possible.

Tags: buying a home, home buying, seller information, Selling, selling your home, the real estate process

Renters Are Losing Money Each Year

Renters, have you any idea of how much money you are throwing away each year?
If you only knew how much money you will MAKE just by buying a home, you’d be foolish not to buy a home through us! Did you know that in addition to the tax deductions you receive as a home owner that you can get tax money BACK from the Federal Government.

Not only is interest that you pay on your mortgage loan tax-deductible, but the US government is providing a tax CREDIT (not simply a deduction) of up to $7500 for most first time homebuyers. In short, the US Government is bending over backwards to help people become homeowners at a time when there already are real estate bargains everywhere! For a limited time, qualified first-time homebuyers may receive a tax credit up to $7,500 as part of the Housing and Economic Recovery Act of 2008.

If you plan to live in the home as your primary residence and have not owned a home during the past three years, you may qualify for the tax credit. This tax credit must be repaid over a 15-year period. Take your first step by calling us for more information and recommend the best mortgage loan advisors on our team that work with first time home buyers. You may be able to buy your first home sooner than you thought possible.

Just how much money can you gain when you own your own home? As an example, the tax deductions you’re eligible to take for mortgage interest and property taxes greatly increase the financial benefits of homeownership. Here’s how it works.

Assume
:
$9,877 = Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five interest)
$2,700 = Property taxes (at 1.5 percent on $180,000 assessed value)
______
$12,577 = Total deduction

Then, multiply your total deduction by your tax rate.
For example, at a 28 percent tax rate: 12,577 x 0.28 = $3,521.56
$3,521.56 = Amount you have lowered your federal income tax (at 28 percent tax rate)
Plus $7,500.00 from the federal government
Equals $11,021.56 in a potential tax refund!

Linda & Terry Iwaniw
============================
REALTOR Associates
ReSales & Investment Realty, LLC
http://www.sjerseyhomes.com/
Cell: 609-417-1084
Office: 856-795-3111 x262
============================

Tags: 1st time buyers, buying a home, first time buyers, first time home buyers, home buyers, home buying, renters

THE REALITIES OF SELLING A HOME IN TODAY’S MARKET

(Edison, NJ) Preparing a home for sale in today’s market often requires more than just few cosmetic improvements – it requires keeping an open mind about what buyers are looking for, and staying up to date on the local housing market. Homeowners can change the way buyers view a property inside and out with some updated staging and marketing techniques, and should be open to their REALTORS^®‘ more realistic suggestions for pricing.

“Buyers are benefiting from being able to pick and choose from a wide variety of homes on the market. They are going to be more thorough with their searches and sellers should be prepared for that,” said 2009 New Jersey Association of REALTORS^® (NJAR^®) President, Diane Dilzell. “In today’s market, buyers can get a great house at a great price so it’s important that sellers differentiate themselves from competing properties.”

Setting a realistic price. When it comes to selling a home, it’s important to keep in mind that value depends on what the buyer is willing to pay for your property and many factors contribute to their perceptions. Prices depend on local characteristics such as job opportunities, housing supply, school systems and more. Sellers should stay realistic and set the price with a REALTOR^® who can help determine which factors are at work in a given marketplace. Also, the time the owner “must” sell or the amount of repairs the home needs can play a large role in setting a fair price.

“Sellers should be pricing to stay ahead of the market and can’t afford to rely on what the home was valued at several months ago,” added Dilzell.

“Our REALTOR^® had a full understanding of today’s market and how people are shopping, and had sound reasoning for why the price we sold our home for would be beneficial, when I originally thought it was worth more. We had unbelievable traffic flow, several return viewings, and accepted a price we were comfortable with in 26 days,” said Mary Lee Hesselgrave, who sold her home in Hardyston this summer.

Get creative when marketing your home. The marketing of homes has shifted more towards new technology, rather than only putting an ad in the local newspaper. Sellers should be open to innovative and creative marketing techniques recommended by their REALTOR^®. By considering virtual home tours and concentrating on well-lit, high quality digital photos for website listings can give your home a chance to be noticed in front of the increasing majority of buyers who turn to Internet listings first. Ask your REALTOR^® about other ways to increase awareness about your home in places where buyers will notice.

Staging helps edge out competition. Buyers seek the least expensive home in the best neighborhood they can afford. The goal in staging a home is to maximize space and provide a clean slate for prospective buyers to make the home their own. Cosmetic improvements such as paint, wallpaper, and landscaping, are good investments to make a home generally more appealing. Mechanical repairs done to ensure that all systems and appliances are in good working condition are required to get a top price. REALTORS^®, who see numerous homes, can provide suggestions that are consistent with local market trends. Simple tips such as storing away family photos or personalized decor, maximizing counter space and clearing items away from windows can be done in just a few days. Home staging professionals can even be enlisted to help get creative with renovations and changes.

“We took our personal items, put them in storage and completely staged the house,” said Cindy Sauber, who sold her home in West Windsor. “If we were going to sell, we knew we had to follow certain rules,” she said.

Stimulate buyer curiosity with curb appeal. Putting work into the inside of a home is of no use if prospective buyers don’t want to enter it. Curb appeal is the first chance to make a good impression. Curb appeal sells 49 percent of all houses, whether you have a townhouse, condo or detached home, according to the National Association of REALTORS^®. Replacing light fixtures, removing dead leaves and ensuring snow is shoveled neatly from walkways and driveways are easy tasks that help entice a buyer into the home during the winter months. If a seller is unsure of what buyers are looking for, asking friends and neighbors for a fresh perspective can help them evaluate what looks old or run-down. Owners can get a “big picture” view by taking a photo from across the street.

NJAR^® is encouraging New Jersey residents to Get the REAL StorySM on real estate in New Jersey with a public education campaign that features an informational website and an advertising campaign that also features real stories from recent buyers and sellers. For more information on the campaign, or simply to Get the REAL StorySM on real estate in New Jersey, visit www.REALstoryNJ.com.

The New Jersey Association of REALTORS^®, with approximately 53,000 REALTOR^® and REALTOR-ASSOCIATE^® members, is one of the largest trade organizations in the state. NJAR^®’s membership is comprised of real estate professionals who subscribe to a strict code of ethics and are members of the national and local REALTOR^® organizations. As the leading advocate for the real estate industry and private property rights in New Jersey, NJAR^® is committed to protecting the dream of homeownership. For more information, please visit www.njar.com.

Tags: buying a home, home marketing, home owners, home sellers, housing market, selling a home, staging

You CAN buy a home!

The American dream can be yours and you CAN buy a home.

Owning your own home is more than just a matter of pride (but there is a lot of that), it’s also a great first step toward financial and personal security.
If you’ve never owned a home before (or if you haven’t owned one in three years), you can easily start the process of buying a home.  There are many programs geared toward First Time Home Buyers.

We can help you with every step toward homeownership.
However, you might want to do some of your own research to begin the process.

1. Decide how much you can afford
The first step is to find out how much you can spend on a home.  There are lots of calculators online that can help you.  One great resource is ginniemae.gov.  Here you can find calculators that will help you to decide whether you should buy or rent and, if you should buy, how much you can spend and how much you need to save.
For first time homeowners or people who have not owned a home in three years, there might be some public programs that will help you become of homeowner for the first time.  Many states have home buying programs that help new homeowners with downpayments.  We will help you determine if you qualify for a program.

2. Shop for a loan
Just as you shop for a bargain in a store, you should also shop for a good interest rate on a home loan.
Remember the higher your credit score, the lower your interest rate.  Getting a high credit score is as simple as paying your bills on time, every time, for a number of months or years. You can see your credit report is once a year at annualcreditreport.com.  You might have to pay extra to get your credit score, but the information can tell you a lot about what kind of home loan you qualify for.  Scores of 700 or higher are considered the best.
You will have to have some sort of downpayment. The downpayment is usually 3 percent to 10 percent of the purchase price.  But it is possible to make a deal without money down.  We’ll discuss this with you.

3. Choose a real estate agent
We can help you find all the houses available in your price range and give you tips on how to buy and negotiate for a home. We’ll help you through all the paperwork and tell how to take each step in the process.

Remember YOU can buy a home and we can help you.

Tags: buyers, buying a home, first time buyers, first time home buyers, home buying, mortgage loans