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Understanding 203k Loans

September 4, 2012 4:30 pm

Last year, more than $115 billion was spent on home upgrades nationwide, but finding a bank to approve the financing on a home construction loan continues to become increasingly difficult. In addition, if you’re buying a home that needs repair or even modernization, there’s usually a complicated and costly process involved. The interim acquisition and improvement loans prospective buyers seek often offer relatively high interest rates, short repayment terms and a balloon payment.

Luckily, the FHA offers the 203k loan, which makes it possible for homeowners to take care of home repairs after getting a mortgage. The loan is an all-in-one mortgage program for home construction projects that combines the mortgaged amount with your estimated home repair costs, and bundles them into one.

The extent of the rehabilitation may range from relatively minor work (it must be at least $5,000) to major reconstruction on the home’s structure. Categories for work allowed include modernization and improvements to the home’s function, elimination of health and safety hazards, adding or replacing roofing, gutters, and downspouts, enhancing accessibility for a disabled person, making energy conservation improvements and changes that improve appearance and eliminate obsolescence.

The loans can be used to finance the rehabilitation of the residential portion of a property that also has non-residential uses and may also cover the conversion of a property of any size to a one- to four-unit structure. A home that has been demolished or will be razed as part of rehabilitation is also eligible.

FHA 203k loans are especially useful for people buying foreclosed, abandoned, or otherwise run-down homes. The caveat is that 203k loans may not exceed local FHA loan limits.

To be eligible for the FHA 203k mortgage program, homes must be owner-occupied, must be only 1-4 units and must be at least one year old. New homes are not considered.

If you plan to demolish a structure as part of the work, you must ensure that the home’s existing foundation remains and that the home will be rebuilt on the same foundation.

What’s more, for less expensive repairs, FHA’s Streamlined 203k program permits homebuyers to finance up to an additional $35,000 into their mortgage to improve or upgrade their home before move-in. This allows new homebuyers to quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser.

To learn more about 203k loans, contact our office today.

Published with permission from RISMedia.


Ceiling Fans Add Value and Energy Savings

September 4, 2012 4:30 pm

If you’re planning on selling your home in the near future, it’s never too early to start thinking of ways to increase your home’s value, especially when you take into consideration the fact that any improvement will most likely help you get your home sold quickly.

One of the best additions that a homeowner can make is to put in energy-efficient ceiling fans, which will cool a home during the warm months and circulate warm air during the winter. Installing the right ceiling fan will not only help you reduce energy costs, it will also improve the overall comfort of the room and tie the design concept together with a unifying look.

When choosing a ceiling fan, don’t just grab the cheapest model. Find one that fits the style of the room and the home. With so many choices when it comes to colors, finishes, blade designs, sizes and accessories, finding the perfect fan may take some time. Today’s fans have options such as polished brass, antique brass, iron, copper, nickel, pewter, chrome, black, vibrant colors, oak, rosewood, and other real wood veneers.

“Ceiling fans are relatively inexpensive, generally quiet, and come in a variety of materials and styles to suit any room in the home,” said Barbara Pilcher, author of “Do It Yourself Home Staging Tips to Sell Your Home Fast and For Top Dollar.” “The different styles that have come out in recent years are more decorative and can really add something to a room.”

Most agents will tell you that having ceiling fans in the home is a welcome sign to many buyers, especially those concerned about energy savings, however, they probably won’t be a deciding factor in a sale. But if the ceiling fans are replacing outdated ceiling fixtures, it could be the difference between someone remembering a room or not.

According to ENERGY STAR, a qualified ceiling fan/light combination unit is 50 percent more efficient than conventional fan/light units, which can save you more than $15 per year on utility bills. Thanks to improved motors and blade designs, ENERGY STAR qualified ceiling fans with lights can save you $165 in energy costs over the fan’s lifetime.

If you’re going to spend the money and install ceiling fans throughout the home, it’s important to understand how they work in order to utilize them effectively. For instance, in the summer, fans should be set to rotate in a counter-clockwise direction so that you feel a cool breeze when you stand directly under the fan. The airflow produced creates a wind-chill effect, making you feel cooler.

In the winter, reverse the motor and operate ceiling fans at low speed in a clockwise direction. This produces a gentle updraft, which forces warm air near the ceiling down into the occupied space. This works best on tall ceilings.

Not only are ceiling fans a great addition to the main rooms in your home, they can also be effective in kitchens and bathrooms where dampness may be an issue.

You can usually install a ceiling fan on your own as most come with easy step-by-step instructions. Support systems are normally provided to allow hands-free wiring. Just be sure the fan and home wiring is compatible.

Cleaning and maintaining fans isn’t difficult either. Use a damp paper towel to slowly and carefully wipe off any dust or grime and continue as necessary until the fan is clean. If there are pull chains, wipe them with a dry cloth and then use a microfiber cloth or feather duster to dust the housing and other parts.

For more information about increasing your home’s value, contact our office today.

Published with permission from RISMedia.


Is it Time to Cash in Your Chips and Upgrade Your Space?

September 4, 2012 4:30 pm

As any homeowner can tell you, space is always at the top of the list when it comes to what homeowners wish they could change about their current home. Whether it’s gaining more of it or having too much that you can’t keep up with it, space has a lot to do with a homeowner’s decision to relocate. In today’s environment especially, as we continue to be in the midst of a buyer’s market with mortgage rates at record lows and inventory piling up quicker than ever, many homeowners are cashing in their chips and upgrading to homes with ample space.

Whether you’ve outgrown your current home, are planning on having more children, have been promoted to a job that allows some financial flexibility to move to a better location with a better school district or you’re simply looking for a bigger space, making the decision to move to a larger home shouldn’t be taken lightly.

Before you make a decision, create a list that includes all the reasons for the change. Are you moving because you want more room? Do you want a better neighborhood? Are you simply tired of your home and want something different? As you make the list, be honest with yourself about the real reason behind the motivation for moving and know what you really want to get out of the move. The last thing you want is to upgrade to a home that doesn’t meet your criteria.

It’s also important to crunch the numbers before deciding on such a big move. While houses are going for less and mortgage rates may allow you to spend more, you still need to look at the numbers closely to make sure you’ll be able to afford all that goes into buying a new house. Remember, a bigger house will most likely mean an increase in taxes and insurance. Your electric, heating and cooling costs will probably rise as well. Be sure to add in extra lawn maintenance and any other amenities that you desire (like a pool) and money responsibilities will quickly add up.

If you’re ready to move thanks to a pay raise, a new job or promotion, make sure your savings can handle a higher mortgage if your job suddenly went away. It’s never a good idea to take on a new financial burden if you fear that there may be downsizing at your company. In an unstable job market, you should be certain that any new position will be there for the long haul.

As with any big decision, it’s important to be realistic. While it’s true that you’ll get a better price on a larger home than you would have five years ago, the house you’re selling is also going to go for less. Make sure you understand the housing market in your current neighborhood so you know exactly what you’re up against. Be realistic with your wants vs. needs as well. Even though you can get a lot more for a lot less today, you still might have to cross that home theater or spa off your list.

When considering the possibility of moving up, you don’t necessarily need to move far away. If you’ve established friendships and a sense of community in your neighborhood, it might make more sense to look for a larger house nearby. This is especially important if you have kids as you’ll need to consider what it’ll be like for them to change schools and leave their friends.

In the end, there are plenty of positives associated with trading up to a bigger house. Before you make any decision though, be sure the move makes sense for you at this moment in your life.

For more information about moving up, contact our office today.

Published with permission from RISMedia.


Choosing the Right Living Environment for Your Lifestyle

September 4, 2012 4:30 pm

When it comes to buying a home, some people dream of living in a bustling city while others prefer the tranquility of living in a rural environment. While there are pros and cons associated with each, prospective buyers should take into consideration how aspects of each environment will affect their lifestyle.

The benefits of a rural home are plenty. Not only does living in a rural environment afford the homeowner the chance to live on a large property with lots of land for the kids to play on, it also provides for more privacy, peace and quiet as neighboring houses are typically further away.

Another thing to keep in mind is the fact that the further a house is from the city, the lower the price usually is. This will ultimately allow buyers to get more bang for their buck, or at least provide them with the chance to purchase a much larger home than they would have been able to afford in an urban location.

When considering buying a home in a rural setting, it’s important that buyers be aware of things that may differ from one living environment to another.

Let’s start with water. Rural properties often draw their water from private wells, so you need to do tests to ensure the water doesn’t contain dangerous chemicals. You also need to pay attention to the septic system. In rural homes, a leach field is built to collect sewage and water waste, and many of these were built long ago. Be sure to take the time to check that the field is up to today’s codes to avoid costly construction bills in the future.

If the property you’re interested in purchasing includes several acres, it’s not always easy to know where one property ends and the neighboring property begins. Be sure to have the property surveyed before you buy it so that you know exactly where the property lines are in case of a future dispute.

For homes situated on a private road, prospective buyers should take into consideration that the home’s location could lead to large expenses down the line. Often, homeowners who live on private streets are responsible for chipping in when it comes to plowing, maintenance and even paving. It’s also a good idea to be aware of the protocol during the winter when it snows. For instance, if your street doesn’t get plowed, you could be looking at some dangerous driving conditions during the winter months, or even still, you may be stuck at home.

Homes that are really far out may not have the luxury of trash or recycling collection and homeowners may be responsible for taking their garbage to the local dump. Even if the home is located in an area that offers trash collection, you may be surprised at the cost involved.

While it may be a dream to own a house on so many acres of land, the reality is that it can be tough work, especially when you consider all the tasks associated with home upkeep such as mowing the lawn, clearing debris, shoveling snow and other strenuous tasks. Make sure that you’re up to the challenge or that you can afford help for these difficult jobs.

To learn more about purchasing in a rural environment, contact our office today.

Published with permission from RISMedia.


The State of Distressed Sales

September 4, 2012 4:30 pm

Demand for distressed properties is driving up prices for the first time in nearly two years, according to foreclosure data released by RealtyTrac in August.

The Irvine-based listing firm revealed that the 224,429 foreclosure-related sales in the second quarter was down 12 percent from the first three months of the year, and was down 22 percent from the second quarter of 2011. That’s the first annual decrease in 15 months.

“There is a limited supply of available foreclosure inventory to choose from in many markets,” said Daren Blomquist, vice president of RealtyTrac, in a company release. “Given the shortage of supply and the seasonally strong buyer demand in the second quarter, it’s no surprise the average foreclosure-related sales price increased on both a quarterly and an annual basis.”

The average foreclosure sales price for the nation rose seven percent to $170,040 from the second quarter of 2011, the biggest annual increase since 2006. The pool of real estate sales across America that involved distressed property rose four points in the second quarter to 23 percent from one year earlier, even as sales of bank-owned and pre-foreclosure homes sank dramatically.

These numbers, real estate experts believe, provide solid statistical evidence of what real estate agents, buyers and investors have been talking about for months.

“There’s virtually no supply in a lot of markets right now,” Michael Krein, president of the National REO Brokers Association, said in a press release. “What we’re finding nationally is that 50 percent of all purchasers are investors because they can outbid the owner occupant buyers. Investors are bidding up anywhere from 5 to 25 percent over the list prices.”

Government-controlled mortgage guarantors Fannie Mae and Freddie Mac have been slow to unload foreclosed homes, which has limited the number of properties available for private-equity firms, hedge funds and pension systems to purchase.

The shortage is happening, experts say, because fewer bank-owned homes are coming to market as lenders comply with terms of a $25 billion February settlement with state and federal regulators to resolve allegations with the five-largest home lenders over faulty practices.

RealtyTrac’s report showed that the gap between short sale prices and prices obtained by banks selling seized properties decreased to the smallest amount in almost five years.

Banks increasingly approve transactions for less than the amount owed on the mortgage, known as a short sale, or modify loans for borrowers struggling to keep up payments, including by reducing the principle owed.

“The shift we’ve been seeing in the last few quarters that continued in the second quarter is short sales catching up with bank-owned sales,” Blomquist said.

The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, adjusted its guidelines for short sales last week to expedite the process and permit the transactions for borrowers who are up to date on mortgage payments if they demonstrate a “hardship.” The guidelines take effect on Nov. 1.

For more information regarding distressed sales, contact our office today.

Published with permission from RISMedia.


In this Edition: 203k Loans

September 4, 2012 4:30 pm

Our lead story in this month’s Home Matters, brought to you through our company's membership in RISMedia’s Real Estate Information Network® (RREIN), examines the distressed sales market. Other topics covered this month include how to choose the right living environment for your lifestyle and how to be sure it’s the right time to trade in your home for more space. We hope you enjoy this month’s edition of Home Matters and as always, we welcome your feedback. Email us anytime!

Published with permission from RISMedia.


Tips to Keep Your PC Clean and Quick

September 4, 2012 3:16 am

What you don't know can hurt you when it comes to what's hiding in your PC. From "naturally" occurring registry errors to more insidious threats like spyware, hidden problems can slow your computer performance to a crawl or even cause it to crash.

A little proactive maintenance, however, can go a long way toward preventing problems. Keeping your PC "clean" and running at its best is as simple as establishing a routine maintenance schedule and using the right kinds of software to address the most common problems.

Here are three key "cleaning" tasks that you should perform on a regular basis (at least once a week):

Run a registry cleaner

If your computer is slower now than when you first bought it, the problem may be registry errors. Installing and removing software, playing online games, application crashes and upgrades of software problems can all create "natural" errors in your PC's registry. They accumulate over time and the more errors you have, the higher the likelihood that you'll experience trouble.

Out spyware

Did you know that 61 percent of PCs have spyware on them? And of those infected, 92 percent of users didn't know spyware was present on their computers, according to a poll by AOL and the National Cyber-Security Alliance.

Spyware - software that gets installed on your computer without your knowledge or consent - is considered a serious security threat. Not only can spyware collect information about your Internet usage, it can install additional software, hijack your browser, change your computer settings and slow down your computer performance.

Scan for spyware daily if you are on the Internet often and download frequently. Many companies offer completely free anti-spyware software for download.

Be vigilant to viruses

With so many other computer threats cropping up, it may be easy to overlook virus protection. But viruses continue to be a major threat to computer security, costing consumers and companies billions of dollars worldwide each year to prevent virus transmission and clean up after infection.

The best defense is a good offense when it comes to computer viruses. Subscribe to virus protection software that provides constant updates since new viruses emerge and old ones evolve into new forms every day. Scan for new viruses at least once a week - more frequently if you are a heavy Internet user or receive large volumes of unsolicited email.


Published with permission from RISMedia.


A Pet Owner's Guide to Disaster Preparedness

September 4, 2012 3:16 am

With hurricane season upon us, pet owners must be prepared on all levels - including being prepared to protect their pets. If you’re wondering what you can do to keep your pets from becoming victims of a disaster, these tips on disaster preparedness will help you keep your dog, cat or other animal safe should disaster strike.

1. Make sure your pet is microchipped and always wears a collar or harness with his microchip tag and town license tags.

2. Always keep your pet up to date on vaccinations.

3. If you need to evacuate, know where the nearest shelter is or have a designated evacuation site. If the shelter or site does not allow pets, have a pre-arranged place to bring your pet, such as a relative's home or pet-friendly motel.

4. Each pet should be in his own carrier clearly marked with all of his and your information. Even if your pets have shared a crate in the past, an emergency situation could stress them out and cause them to be more agitated than usual.

5. Prepare an Evacuation Kit including: photocopies of all veterinary records; copies of all registrations and proof of ownership; a two week supply of food and directions for feeding; a two-week supply of water; a can opener; emergency contact list including your vet and alternate vet, pet-friendly motel, relatives, local animal shelters, police, fire and Red Cross; medications including directions and name of pharmacy; leash and collar.

Take the time now to prepare an emergency kit for your pet in the event of a disaster.

Source: Royal Flush Havanese

Published with permission from RISMedia.


Tips on Handling Water Damage

September 4, 2012 3:16 am

If a home or office has experienced water damage, it is important to locate a water damage repair company that is well trained and has the equipment to completely dry the structure as quickly as possible.

Water damage is progressive and items that could be restored within the first 48 hours of the damage occurring may not be restored if emergency response is delayed. Although the homeowner might be tempted to use a shop vacuum or call a company that only has equipment to dry carpet, remember that water will wick up walls and travel under base molding and sill plates. It will penetrate through floor coverings into sub-floors, even causing water damage in rooms below.

In addition, if humidity inside the structure is not controlled, items that were not originally damaged could be damaged as a result of absorbing moisture from the air. Structures that are not dried out quickly and properly can become a food source for mold growth, which may require professional mold removal.
In the event of water damage, do the following:

• Stay calm!
• Turn off the breaker in the damaged area before unplugging or removing any electrical devices located on the wet carpet.
• Place aluminum foil under the legs of any furniture that’s in contact with wet carpet. This might help prevent furniture stains on the carpet.
• Lift draperies away from wet carpet.
• Pin up upholstered furniture skirts that may get wet.
• Remove books, shoes, paper goods, fabrics, potted plants, and other items, which may stain wet carpet.

Do not attempt the following:

• Don’t use a home vacuum, since electrical shock may result, as well as certain damage to the equipment itself.
• Don’t place newspaper in traffic areas to walk on, since newspaper ink transfers easily to wet carpet fibers and may result in permanent staining.
• Don’t walk on carpet any more than necessary. This will keep the damage from spreading to unaffected areas.

Source: Rainbow International

Published with permission from RISMedia.


3 Simple Steps to Improve Your Fuel-Efficiency

August 31, 2012 9:14 am

One-third of travel for the year takes place during summer and more than three-quarters of those trips are taken by automobile, truck or RV. As summer draws to a close, drivers are encouraged to continue following these three simple steps to improve their fuel-efficiency and reduce their carbon footprint.

Practicing EcoDriving produces the highest mileage from every single vehicle—regardless of size or age--and can reduce gas use and carbon emissions significantly by as much as 15 percent or more. Here are three easy EcoDriving tips that can help many consumers start driving green:

-Turn the engine off when waiting at a curb to save more than half a gallon of fuel for every hour that would have been spent idling.
-Tire pressure changes an average of one PSI for every 10 degrees Fahrenheit change in temperature, so maintaining proper tire pressure can improve gas mileage by about 3 percent. This can earn drivers a free tank of gas every year.
-Avoid rapid starts and stops. This is not only safe, but it can save more than $1 per gallon, according to the U.S. EPA, while improving fuel economy by up to 33 percent.

During summer driving months and even through the beginning of Fall, gas prices tend to rise, but green driving can always lessen the impact.

Source: EcoDrivingUSA

Published with permission from RISMedia.