Now They Tell Us: Experts Say Housing Is A Lousy Investment And Always Will Be

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Daniel Fornes
Realtor & Mortgage Broker
www.danielfornes.remax.com

5 Tips to Prepare Your Home for Sale Read more

By: G. M. Filisko  Published 2010-02-10 11:12:47

Working to get your home ship-shape for showings will increase its value and shorten your sales time.
Here are five ways to get your house ready to sell.
Many buyers today want move-in-ready homes and will quickly eliminate an otherwise great home by focusing on a few visible flaws. Unless your home shines, you may endure showing after showing and open house after open house—and end up with a lower sales price. Before the first prospect walks through your door, consider some smart options for casting your home in its best light.

1. Have a home inspection

Be proactive by arranging for a pre-sale home inspection. For $250 to $400, an inspector will warn you about troubles that could make potential buyers balk. Make repairs before putting your home on the market. In some states, you may have to disclose what the inspection turns up.

2. Get replacement estimates

If your home inspection uncovers necessary repairs you can’t fund, get estimates for the work. The figures will help buyers determine if they can afford the home and the repairs. Also hunt down warranties, guarantees, and user manuals for your furnace, washer and dryer, dishwasher, and any other items you expect to remain with the house.

3. Make minor repairs

Not every repair costs a bundle. Fix as many small problems—sticky doors, torn screens, cracked caulking, dripping faucets—as you can. These may seem trivial, but they’ll give buyers the impression your house isn’t well maintained.

4. Clear the clutter

Clear your kitchen counters of just about everything. Clean your closets by packing up little-used items like out-of-season clothes and old toys. Install closet organizers to maximize space. Put at least one-third of your furniture in storage, especially large pieces, such as entertainment centers and big televisions. Pack up family photos, knickknacks, and wall hangings to depersonalize your home. Store the items you’ve packed offsite or in boxes neatly arranged in your garage or basement.

5. Do a thorough cleaning

A clean house makes a strong first impression that your home has been well cared for. If you can afford it, consider hiring a cleaning service.
If not, wash windows and leave them open to air out your rooms. Clean carpeting and drapes to eliminate cooking odors, smoke, and pet smells. Wash light fixtures and baseboards, mop and wax floors, and give your stove and refrigerator a thorough once-over.
Pay attention to details, too. Wash fingerprints from light switch plates, clean inside the cabinets, and polish doorknobs. Don’t forget to clean your garage, too.

Daniel Fornes

Realtor & Mortgage Broker
www.danielfornes.remax.com

4 Tips to Determine How Much Mortgage You Can Afford Read more

By: G. M. Filisko Published 2010-03-11 16:55:18
By knowing how much mortgage you can handle, you can ensure that home ownership will fit in your budget.
Here are six surefire ways you can get your finances in order before you buy a home.
Homeownership should make you feel safe and secure, and that includes financially. Be sure you can afford your home by calculating how much of a mortgage you can safely fit into your budget.
Instead of just taking out the biggest mortgage a lender qualifies you to borrow, consider how much you want to pay each month for housing based on your financial and personal goals.
Think ahead to major life events and consider how those might influence your budget. Do you want to return to school for an advanced degree? Will a new child add day care to your monthly expenses? Does a relative plan to eventually live with you and contribute to the mortgage?
Still not sure how much you can afford? You can use the same formulas that most lenders use, or try another of these traditional methods for estimating the amount of mortgage you can afford.

1. The general rule of mortgage affordability

As a rule of thumb, you can typically afford a home priced two to three times your gross income. If you earn $100,000, you can typically afford a home between $200,000 and $300,000.
To understand how that rule applies to your particular financial situation, prepare a family budget and list all the costs of homeownership, like property taxes, insurance, maintenance, utilities, and community association fees, if applicable, as well as costs specific to your family, such as day care costs.

2. Factor in your downpayment

How much money do you have for a downpayment? The higher your downpayment, the lower your monthly payments will be. If you put down at least 20% of the home’s cost, you may not have to get private mortgage insurance, which costs hundreds each month. That leaves more money for your mortgage payment.
The lower your downpayment, the higher the loan amount you’ll need to qualify for and the higher your monthly mortgage payment.

3. Consider your overall debt

Lenders generally follow the 28/41 rule. Your monthly mortgage payments covering your home loan principal, interest, taxes, and insurance shouldn’t total more than 28% of your gross annual income. Your overall monthly payments for your mortgage plus all your other bills, like car loans, utilities, and credit cards, shouldn’t exceed 41% of your gross annual income.
Here’s how that works. If your gross annual income is $100,000, multiply by 28% and then divide by 12 months to arrive at a monthly mortgage payment of $2,333 or less. Next, check the total of all your monthly bills including your potential mortgage and make sure they don’t top 41%, or $3,416 in our example.

4. Use your rent as a mortgage guide

The tax benefits of homeownership generally allow you to afford a mortgage payment—including taxes and insurance—of about one-third more than your current rent payment without changing your lifestyle. So you can multiply your current rent by 1.33 to arrive at a rough estimate of a mortgage payment.
Here’s an example. If you currently pay $1,500 per month in rent, you should be able to comfortably afford a $2,000 monthly mortgage payment after factoring in the tax benefits of homeownership.
However, if you’re struggling to keep up with your rent, consider what amount would be comfortable and use that for the calcuation instead.
Also consider whether or not you’ll itemize your deductions. If you take the standard deduction, you can’t also deduct mortgage interest payments. Talking to a tax adviser, or using a tax software program to do a “what if” tax return, can help you see your tax situation more clearly.
Daniel Fornes
Realtor & Mortgage Broker
www.danielfornes.remax.com

Use a Realtor

Buying real estate is a complex matter and can be especially confusing for the first-time homebuyer. Do yourself a favor and learn as much about the process as you can before you begin. There are plenty of resources on the Internet, and most real estate offices will have pamphlets to explain things in plain language. You may also be able to research the real estate process by attending community-sponsored classes, or you can take a look at books like Home Buying For Dummies by Eric Tyson and Ray Brown, (IDG Books Worldwide, Inc.)

Use a REALTOR.

As a buyer, it usually costs nothing to hire a real estate professional to help you find and purchase a home--your Realtor will likely get a portion of the commission the seller pays to his Realtor. When choosing an agent, get referrals from friends, relatives, and co-workers, and then interview as many agents as possible. Pick an agent that works in the neighborhoods you're interested in. Listen to your agent, but make your own decision.


Daniel Fornes
Realtor & Mortgage Broker
www.danielfornes.remax.com

15 Loan Shopping Tips

• Seek out a licensed/bonded mortgage broker, lending company, or authorized bank or credit union.
• Be wary of loans offered through door-to-door sales or telemarketing solicitations.
• Be wary of offers made by construction companies for loans in conjunction with construction services, make sure that they are also licensed or authorized to transact loan business.
• Be wary of lenders or brokers who guarantee loan approval regardless of your credit history or rating.
• Shop around. Interest rates and fees vary widely among lenders. Don’t assume that you would not qualify for a loan from a traditional lender. Those loans are less expensive than subprime loans.
• Be suspicious of anyone who pressures you to act before you are ready.
• Verify any claims about rates, fees or your credit qualifications with another company before proceeding. Ask the loan officer to prove any claims.
• Read the entire loan application carefully before signing. Don’t sign a loan form with blank spaces.
• Make sure that every oral promise is in writing. Oral promises give you no protection.
• Ask that everything be explained to you. Give the loan officer no option but to show you the documents themselves: the rate, the costs, the loan type, the length of the loan, information about prepayment penalties, the monthly payment amount, etc.
• Watch out for hidden terms, such as prepayment penalties and balloon payments.
• Ask about fees and points before applying for a loan. The interest rate is not the only important term of a loan. A loan with a low interest rate but high fees and points may cost you more than a loan with higher interest rate and lower fees.
• If you are considering a loan with a variable interest rate, make sure you understand what conditions will affect a change in your rate, and the amount by which your rate may fluctuate.
• Consult an attorney before you sign. When you feel uncomfortable have an attorney review the transaction. It won’t cost much, but may save you a bundle.
• Make sure that you have received, read and understood all required disclosure documents before you close. At closing, make sure the loan terms have not changed from what you were told and that there are no additional fees that you did not know about. 

Daniel Fornes
Realtor & Mortgage Broker
www.danielfornes.remax.com