Refinance Home Mortgages

Getting a Real Estate Appraisers License in California – Refinance Home Mortgage Techniques

admin — Wed, 15 Sep 2010 04:09:10 +0000

Licensed appraisers are required for all federally-related loan transactions

Sales and refinances are only part of the employment picture

There are ways to secure an advantage over other novel trainees

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So You want to become a real estate appraiser? Here’s some background you should know.

It used to be a common thing that people would choose a career path, get hired by a company and cease in the same industry, maybe even with the same company, for a long time, possibly even to retirement. With increased global competition, many industries that used to enjoy security and rising wages/benefits have been transformed rapidly. The result is that many companies and employers have had to adapt, by downsizing, or be swallowed up in seemingly endless mergers and consolidations. I sometimes think that, in the end, there will only be a handful of companies worldwide that control everything (probably 3 or 4 “hyphenated mega-corporations” like a Time-Warner-AOL-ABC-Capital Cities and a few others). It appears likely that the current work force will face the likelihood of having to change careers several times during their working years. My employment background has included 3 career-path changes and I don’t really feel like I am done yet. One of my careers has been in the residential real estate appraisal industry, in the residence of California.

Becoming a licensed appraiser involves several steps. I will be describing how to do it in California, because it is what I have experience with, but it is roughly the same in most other states. The first thing to understand is that an appraiser is NOT a real estate agent or broker, although all 3 professions have licensing, educational requirements and utilize many similar skills. Appraisers cannot sell or derive commissions from the sale of real estate, unless, of course, they also possess a sales license. Similarly, agents and brokers cannot perform chunky certified appraisals, for lending purposes, unless they also have an appraisal license. Some people do cross-over and do both, but it is the exception rather than the norm. It should go without saying (but I’ll say it anyway) that someone eager in a property sale would be prohibited from also doing the appraisal for the financing of that sale. Certain conflict-of-interest.

Appraisers are responsible for determining the “fair market value” of real estate which is generally defined as “that which would likely occur in an open-market transaction, in which the property is given a standard market exposure (listing period, MLS or other advertising publicity etc.), and the seller and buyer, both acting in their own best interests and without undue influences arrive at a mutually agreed price”. The corollary to this is that it is standard for it to be expressed in “cash or cash-equivalent terms”. The majority of appraisal work centers around procurement of financing (mortgage), either for the purchase of property or for obtaining a replacement loan (re-financing) for property already owned. There are many other purposes and functions which utilize appraisers; these include, but are not limited to:

1. Estate taxation, in which the appraisal is needed to determine the value of property as of the date of death of an individual-this usually requires an analysis entertaining data that can be anywhere from a month to a year (or more) in the past.

2. Divorce proceedings, bankruptcy, and other court-related purposes-this type of appraisal may require court testimony and typically carries a much higher fee. This type of appraisal assignment should NEVER be favorite without a written agreement covering the additional compensation due should the appraiser be required to testify in court.

3. Property tax reduction; though this is not prevalent at the present time (2005), changing market conditions may mean that very recent buyers (who bewitch at the height of values) may petition the county assessor for a property tax reduction if the market values inaugurate to decline.

4. Change in value due to natural anxiety such as the 1994 Northridge earthquake

5. Independent evaluation of property that is being sought in eminent domain-the government isn’t always correct or fair in their offers to owners of property they are looking to obtain for some type of public works project.

6. A prospective seller who may wish to have an independent appraisal done, in addition to the potential realtor’s “competitive market analysis”.

In these types of appraisals, it is normal for the property owner to choose the appraiser and to actually order it. In the case of purchases or refinances, the appraisal is ordered by the lending institution or the originator of the loan application (loan broker or loan agent).

Prior to the Savings and Loan crisis of the early 1990’s, there was no licensing of appraisers. Many appraisers studied and obtained credentials from a handful of professional societies; the highest of these was generally considered the M.A.I. designation. While that designation carried some weight, it alone would not provide any guarantee of employment. To perform appraisals for lending purposes you had to be on that particular lending institution’s Approved Appraiser List. This was a roster of people who the bank had determined had the competency to produce this valuation procedure. To get on a lender’s list, (assuming the lender in demand was actively adding new appraisers, which was not always the case), you would submit some samples of your work. Naturally, this also assumed that you had already completed some assignments, so once you were added to your first list, the others became easier. Getting on the first list was a bit tricky though. Many got their start as staff appraisers at a bank or S& L, and, hence, their name was on a list (by default) and they would have sample reports to submit.

The other main alternative was training at an independent “fee-appraisal” shop. These were smaller companies, usually owned or operated by one, or a few appraisers who were on the lists at several institutions. They would designate all the reports, while a larger, supporting staff of “field appraisers” would actually do all the inspections, field work and preparation, for a split of the fee. These companies grew in relation to the increasing numbers of independent loan agents who, not employed by a bank with its own appraisal staff, had to order appraisals from other sources, so they could submit the reports with their completed loan applications. In the unhurried 1980’s/early 1990’s, with brisk sales activity, rising prices and heavenly mortgage rates fueling a booming refinance market, employment opportunities were abundant in independent fee-shops. I began in one of these companies in 1987. I offered my services for free (in the beginning), training with an experienced appraiser and studied to obtain my C.R.E.A designation. I left that company after about 9 months, for a better opportunity with another company. I pushed myself to do harder and more complex properties and higher-end estates and I became the top appraiser at the new company within about 18 months. Before I got to the point where I wanted to get my name on the Current lists of lenders, the Savings and Loan crisis hit and the rules of the game changed.

Though the S & L debacle could hardly be blamed on appraisers, there was evidence that faulty or fraudulent appraisals were a contributing factor. This led to the requirement for all states to institute licensing for appraisers. (It is actually not as simple as dark and white. Generally speaking, the law required the exercise of licensed appraisers for any federally related loan transaction. This requirement thus applies to all “Fannie-Mae” type loans (those sold to the Federal National Mortgage Association on the “secondary” market), but also to loans obtained through federally chartered institutions. Without getting too deep into all the complexities of what is and what is not a transaction requiring a licensed appraiser, it has become accepted for lenders to require it even if it is not technically a requirement. With regards to the other types of appraisals (listed above), holding of a license is not a requirement at all. However, in practice, chances are that a lawyer hiring an appraiser who is not a licensee and potentially may have to testify in court would certainly be leaving his opposition an easy chance to attack the appraiser’s testimony based upon the lack of a license. So, as a general rule, for anything except perhaps the types listed as #1 or #6, you should assume that being licensed is advisable, if not absolutely necessary.

Before I get into the actual steps towards licensure, I will first describe the different levels involved. There are 3 main types of licenses:

-Residential License – this level designation is permitted to perform “non-complex” appraisals on single family homes, condos and small income properties (defined as 1 to 4 units) up to a total transaction value of $1,000,000, “complex” residential appraisals up to a transaction amount of $250,000 and all non-residential properties up to $250,000.

-Certified Residential License – this level can obtain appraisals of any residential property (up to 4 units) without regards to transaction value or complexity of assignment, and all non-residential properties up to $250,000.

-Certified General License – this is the highest designation and has no limitations. Can appraise all types of property.

There is a 4th level, called a Trainee License, which includes anyone who has passed the examination but lacks the experience requirements. This type of “licensee” must work under the supervision of a fully licensed appraiser. Since this level cannot independently sign their own reports, it is not a true license yet and I don’t include it in the 3 main levels. If you are wondering about the term “complex” or “non-complex” in those descriptions you are not alone. It is not something that can be fully explained in a short article. Like the definition of obscenity (hard to clarify but you know it when you see it), there is no easy to grasp definition of the concept. An example of a “complex” assignment might be a property with unusual zoning, or a non-conforming use that has been “grandfathered” in its current state but would not be allowed to be re-built if it was damaged extensively. It could also involve a property that has a potential “higher and better use”, which would require an alive to analysis of those uses. If you would like to learn more about this, you can research the subject yourself, ask a working appraiser to give some insight or wait until you actually get started with your education and training where you will certainly be exposed to this concept.

Okay, so now that we know the types of licenses available, how do you go about getting one? In short, complete some educational courses, pass an exam and accrue a specified number of hours of actual appraising experience. The examination is given at one of six testing locations scattered across the state. The locations are: San Diego, Riverside, Glendale, Oakland, Sacramento and Bakersfield. Before you can lift the exam, though, you must submit your application, and before that, you must meet certain educational requirements. The requirements currently in place have not changed substantially since the beginning of licensing in 1990. However, they are in the process of being revised and will undergo changes effective in January 2008. The basic requirement for submission of your application is 90 hours of course work from an accredited course provider, of which a minimum of 15 hours must be devoted to the USPAP (Uniform Standards of Professional Appraisal Practice). The main focus of USPAP is ethics and standards of conduct. The remaining 75 hours can be in courses with varying names but must cover the topics specified in table 2. With this 90 hours of course work, your submission for the exam will be processed. If you pass the exam, you will be issued a “trainee license” (if you have no experience hours), or a residential license (if you have acquired a minimum of 2,000 hours of experience which can be documented-more on that later). If you wish to obtain a higher designation, there are increased requirements. For the next level up, the Certified Residential License, the educational requirements are 120 hours (15 hrs on USPAP), and the experience requirements are 2,500 hours over a minimum period of 2 ½ years (no such time requirement, yet, for the first level). The highest level, the Certified General, requires 180 hours of course work (15 hrs on USPAP), 3,000 hours of experience over 2 ½ years, with at least 1,500 hours of it in non-residential work.

While it is possible to gain a Certified General License without going through the lower levels first, it is extremely unlikely that it will happen without at least one intermediate level and a subsequent upgrade. The course work you will take will consist of a variety of subjects, including the various methods of legally identifying a property, types of ownership and the rights inherent in each type, housing styles, design and construction, neighborhood analysis, the factors that affect value and how to settle the market value of various factors and amenities, zoning/taxation etc. You may or may not like it but you also should prepare yourself for some math, with concepts such as capitalization, rate of return, gross rent multipliers and operating expense ratios covered. It’s not as bad as it sounds, though. With the benefit of an HP-12C financial calculator and the learning of the correct sequence of keys, all these functions can be handled even by the math-phobics. The truth is, unless you are doing an inordinate amount of work involving income properties, most of these functions you will not really use except in rare instances. Of course, as you move up the licensing ladder, the math does become more of a factor and if you are doing commercial or industrial properties, the math is really the heart of the process. Appraisals for investing purposes rely heavily on reliable data which produce projected rates of return which can make or break a deal.

If you are reading this you are probably an outsider looking to break into the field and NOT a seasoned veteran looking to upgrade to a certified general license. So the remainder of this article is geared toward bringing all this material together, outlining the suggested steps you should lift, and alerting you to some things you should beware of.

First, there is a backlog of applicants to seize the exam. There has been an estimated 90-day waiting period to get an exam date for the past year and a half (the OREA has given over 25,000 exams and issued over 18,000 licenses, since 1990), so you should calculate that time into your projection to complete the whole process. Second, there are a variety of options for completing the courses and you should consult the official website for more details-they have a downloadable booklet with all the accredited course providers in .pdf format. The costs are not cheap; however, the expenses may soon drop, somewhat, due to the changing of sure requirements (namely, dropping the requirement for accreditation by ACE/CREDIT, which charged a school $10,000 per course, and allowing accreditation by another company which charges $700.00 for the same service-this should translate to some reduction to the end users). If you are serious, get started as soon as you can and make a commitment to it; the requirements become more stringent as of 1/1/2008. Ninety or 120 hours may not seem like a long time, and it isn’t if you are taking courses simultaneously, but if scheduling doesn’t work out for you, then you may bag it takes longer than you thought. With the waiting list and other factors, it is estimated that you’ll need to have the application process started by August 2007 to still be tested under the existing regulations. Plus, the licensing fees are also due to be gash in half, temporarily, while there is a surplus in the agency fund (from all those fervent applicants clogging up the waiting list!) and raised again when the surplus is gone. Of course, if you like greater challenges, or are a born procrastinator, then go ahead and take your time.

So step one should be to procure the course provider booklet, check out your options and costs, and start the classes. After you get through part of it, then you may want to start looking at ways to accumulate some experience. Some course providers have the ability to also help with this-if they can provide some case work studies or mock assignments. They won’t be able to do it all for you, but it may give you a start. If you are a homeowner, and have access to an appraisal done on your home, maybe you can contact the company who did it and see if they have any opportunities for trainees. This is how I started and it worked for me quite well. Much of it has to do with timing. An appraisal company that has an abundance of work is very receptive to this approach. If the market does cool off, though, this may not yield much, as they want to maintain the employees they already have supplied with work as best they can. Which brings up the downside of what may lie in the immediate future; downsizing and fierce competition which leads to lower wages. I have been through this cycle before. In the early 1990’s, prices were smooth rising, refinance activity was high and the field attracted a swarm of unique people, attracted by the independence from rigid schedules, business suits and atmosphere etc. and what looked like good pay for fun work. When the market cooled off, there was less work with more licensed appraisers competing for it and the competition pushed fees and wages downwards. I fully expect this pattern to order itself, at some point, but that should not necessarily keep you from pursuing this. Why? Well, unlike realtors who only earn commissions with sales, an appraiser can get work from more than just sales. For instance, keep in mind that if foreclosures rise drastically, that banks will usually order at least one independent appraisal of the property before putting it on the market. Also, another “act of God” disaster may mean a new source of work. A slowing market may mean dropping values which may mean more property tax reduction orders. It is also possible that you may salvage a niche with a CPA or lawyer who handles a lot of estate work and can withhold you busy. Lastly, these things run in cycles. Despite the fact that the masses tend to forget this truism, the unbelievably hot market of 2000-2005 is something that WILL fair itself. There are an amazing number of otherwise intelligent people that delude themselves into thinking this can go on and on. It can’t and it won’t. If you knew how much money you needed to earn to qualify for a loan to buy a median priced home of, say $600,000 (assuming you had the requisite 10-20% down payment of $60,000-120,000), and then saw how many homes were listed for well above that amount, and then realized how many homeowners have been able to maintain their position ONLY because of shameful interest rates and rising equity they could tap into at will but are truly only a small step away from real trouble if either situation changes, then you would be truly worried. BUT, even that dark scenario doesn’t last forever and it swings the other way again and you could be positioned to reap the rewards of another hot market, only this time as an experienced appraiser. Just keep in mind the economics of it all, temper your expectations and pay attention to the signals.

If you are still in this, then send in your application, along with a set of fingerprints (required for the exam). In the meantime, if you want to increase your chances of success, there are a number of things you can do. Learn more about construction techniques and the different types of materials passe in various grades of houses. If you want to appraise luxury homes, you need to familiarize yourself with what is used in luxury homes- things like surfaces (varying grades of hardwood, granite, limestone, marble etc.), brands of windows or fixtures, door hardware (Andersen vs. Pella windows, Kohler vs. Moen fixtures etc.). Maybe go and tour some launch houses and track their listings to see what they sell for. You’ll eventually need to measure and diagram buildings so practice on any that are available. You can start by drawing them by hand, maybe on a sheet of graph paper. If you have access to any sort of a CAD style drawing or sketch program, learning it can give you a significant advantage over other new trainees. My particular favorite is DC Sketch for windows but I have also used Apex sketch and Win sketch. I find DC the most intuitive, and Apex the least intuitive and most cumbersome to learn. If you go and visit an start house, try to inspect it, critically, and then maybe try to do a written description of it after you get home. You can also start to familiarize yourself with the standard appraisal forms like the Form-1004 for single family homes. You can find this form available for download on the internet (try “FNMA Form 1004″ in a Google search). I am also going to try putting this form in this article. If that doesn’t work properly, I will also try to put it on one of my personal webpages and there is a link below.

The last item to discuss is the experience hours. The State Office of Real Estate Appraisers has a standard log form worn to sustain track of your hours and it can be downloaded from their site at this link:

http://www.orea.ca.gov/

The link to my webpage, where you can download a copy of the FNMA Effect 1004 for Single Family Homes:
http://mysite.verizon.net/reso9ds7

How to Save Money on Your Mortgage and Other Home Expenses – How Much Will I Save By Refinancing

admin — Sat, 21 Aug 2010 14:08:30 +0000

It’s the American dream. Owning your own home is a lifetime goal of many Americans. Afterall, renting a house or apartment is costly. Obvious, you pay your monthly rent and the majority of your housing expenses are covered. Maybe even all of your expenses if your utilities, trash collection, et cetera, are covered in your rent. But, at the end of a calendar year, besides having had a roof over your head, what do you have to show for the money you paid out? You may have paid anywhere from $3,600 this year to $12,000 on up for rent! Twelve thousand could have made several mortgage payments instead! And, instead of having twelve rent receipts to show for your money, you could have invested that money into a home of your own.

With that said, being a homeowner in today’s world means you need to economize anywhere you can. When I sat down to analyze my finances, I did my homework, and plenty of it! You might be surprised to accumulate out what I discovered: that the “Top Ten Monthly Expenses” for the average American family are – in no particular order:

1. Mortgage

2. Credit Cards

3. Transportation

4. Utilities

5. Groceries

6. Clothing

7. Health Care

8. Recreation & Entertainment

9. Child Care

10. Personal Items

I must make a notation here: The ranking of these expenses depends solely on your family’s particular lifestyle. Even so, you and your family cannot live without the majority of these expenses. So, your only alternative is to find ways to effectively diminish your outlay!
Let’s take a look at the costs of owning your home, and I’ll gain you in on some proven techniques you can use to effectively diminish these expenses, and save yourself tons of money in the process!

A Homeowner’s Four “Checkbook Challenges”

Generally, the highest expenses you will incur by being a homeowner are:

1. Your Mortgage Loan

2. Your Property Insurance

3. Your Property Taxes

4. Your Home Maintenance

Your Mortgage Loan – You’ll Find This Engrossing

If you are one of an estimated sixty – six million people who own their homes, you probably have a long-term loan of 20 or 30 years, and you make a mortgage payment once a month. Hopefully, your loan is a fixed-rate mortgage, because that’s usually the most economical choice. Why? Because your monthly payment stays the same for the life of the loan.

This way you are shielded from interest rate hikes. Adjustable – interest loans commonly cost less at the starting line, but they can cost you astronomical bucks on down the road when the interest rates go up! When you utilize a flexible-rate loan, it’s similar to riding a roller coaster with its repetitive peaks and valleys.

Short – term loans let you develop up equity in your home faster, but the customary 30 – year mortgage loan usually gives you the lowest payment per month. This is especially important for families who are just starting out. The extra cash saved from the lower payments can be used to pay other debts. When you have the extra money available, you can apply that money towards the principal of the loan to succor pay it off faster and keep expansive interest costs!

Three Ways to Slash the Cost of Your Mortgage Loan

There are three basic ways you can save money on your mortgage:

1. Get a lower interest rate

2. Increase your monthly payment

3. Perform regular lump sum payments

Unless you already have a “bottom of the barrel” interest rate on your loan, you should take some time to shop around and find the best interest rate possible. If you have a $100,000 loan for 30 years at 8.5%, for example, your payments would be somewhere around $768 a month, not including taxes, insurance, etc.

But if you could refinance your loan – - the same amount for the same length of time – - but at a 7% interest rate instead, your payment would be approximately $665 a month. That’s a savings of $100 a month right there! Times that by 12 and you could save at least $1200 a year!

Now that’s a chunk of change!

So, reflect refinancing your mortgage. A Home Equity Loan might even be the right move for you. With a H.E.L., you can deduct the interest off your income taxes. That’s an added bonus!

There’s a certain satisfaction in knowing you haven’t paid more interest than need be.

Watch Your Savings Grow!

You can then either pocket that extra $100, or, you can reinvest it and manufacture it grow so you can save even more money in the long bustle!

How can you do that? Simply take that $100 and apply it towards your mortgage loan every month. That means, instead of making a $665 dollar payment, you are actually paying $765 towards the loan. The result? You’ll be well on your way to paying off that 30 – year mortgage 10 years – one decade – early! Now, that’s a major league hit!

Even if your loan has a prepayment penalty clause, it still might be to your benefit to pay the loan off early.

Lump Payments Add Up

If you need to use the extra $100 on other things, that’s fine. You can peaceful make lump sum payments one or more times a year when you have additional money to spare. Sources of added income might include a hefty income tax refund, an inheritance from a rich uncle, or a year – end bonus from your job.

It would be a wise idea to talk to your unique lender, and then shop around and get the
interest rates, points, and fees from at least five other lending institutions. You want to find a mortgage loan rate that is at least 1% lower than the interest rate you are currently paying.

Then, look at the numbers to gape how they compare. Talk to your accountant or financial
planner for information on how much each loan would cost you, and how each loan would affect your taxes.

The whole idea in a nutshell is to pay off your mortgage loan as fast as possible. The
faster you pay it off, the more money you will save in interest charges.

Unruffled another way to achieve these results is to pay one – half of your monthly mortgage every two weeks. This method of payment is an incredibly – easy way to construct a 13th payment on your mortgage loan every year without bankrupting your budget!

Before You Sign…

Before you sign on the dotted line for a unusual loan, you should call several lenders for rates and terms based on the type of mortgage you want. You will need to ask the following questions so you can be sure this loan is right for you:

” How long is the term of the loan?
” What is the minimum monthly payment? Is there a maximum?
” What is the annual percentage rate?
” Is the interest rate fixed, or is the proposed loan an adjustable – rate mortgage (ARM)? If so, what would the maximum interest rate be? How often might the rate change and what determines the rate change?
” Are there any annual fees or transaction fees?
” What are the “closing” costs?

Personally…

Refinancing was a step in the right direction for me. I saved big by locking into a lower interest rate than I previously had. In turn, my monthly payment was reduced, and that was an important factor in helping me to improve my financial report!

However, I didn’t stop there. There was much more to do! Read on to find out what else you can do to slash your home expenses!

Insurance

Even though you must carry a certain amount of insurance coverage on your home and its contents, you can still save your insurance budget from exuberant costs! There is one insurance expense you can do without, too.

Cancel This Insurance Snappily!

One insurance you can cheerfully do without is called Private Mortgage Insurance. This is an insurance you must sometimes have in order to protect your mortgage lender in case you default on the loan. Obviously, you don’t want to have to pay for this type of insurance. But, if your credit rating is unpleasant, and you are considered a risky borrower, your lender might roar you carry the PMI coverage.

If you have to carry PMI to get your loan approved, then you’re stuck with paying the added expense, at least initially. There is a bright light at the end of the tunnel! Objective remember the “Eighty Percent Rule!” Your loan agreement should release you from carrying the Private Mortgage Insurance once you have paid your loan down to an amount that is less than 80% of the value of your home.

Did you know that? If you’re saddled with the costs of PMI right now, be sure to check your loan papers to see how hasty you can get out from under it.

One Insurance You Can’t Do Without

Homeowner Insurance protects your home against the losses caused by fire, theft, vandalism, and the like, and, of course, this type of expense is a necessity. Depending on where you live, there are even policies you can take out that insure your home against earthquake and flood damage too.

You can still save hundred of dollars a year on homeowner insurance, though, simply by being a careful consumer, and here is how to do it:

Begin Cutting Your Insurance Expense NOW!

The first step is to make obvious your insurance policy covers your unusual needs exactly. Read over your policy and make positive that your home and its contents are adequately covered with enough insurance to replace them in case disaster would strike.

This is especially critical if you have built – on, or otherwise improved your home, or increased its value in any design. You don’t want to be caught short by finding out you that don’t have enough insurance coverage to replace your home and its contents!

How is this going to save money, you ask? This might not save you much money right now, but it could keep you thousands of dollars in the long run!

Take the Next Step…

The second step is to check to witness if there are any items you pay premiums for – especially “extra” premiums that can now be canceled. Examples of these might include expensive jewelry, rare coin collections, valuable designate collections, a TV satellite system, an outside building that you razed, and so on. You need to have these items removed from your coverage.

Now that you have updated your insurance policy, and you know exactly what type of coverage you need, and how much, the third step is to shop around. You will need to find the lowest insurance rates available for the type of coverage need on your home and its contents. In other words, you will want to get the most “bang out of your buck.”

Where You Can Find the Best Rates

Your state insurance department is the most comprehensive resource you can use to find an insurance provider. (Numbers by state are available in the Valuable Resources Section.) Or, you can log-on to the Internet and search for: (Your State) Department of Insurance to find their website.

Each department provides samples of insurance premiums that you can use to help compare rates. All types of insurance are covered, including medical, health, automobile, etc., not just homeowner insurance. Each department also furnishes a special section on their website where you can file a complaint in the event you have been ripped – off by an disreputable insurance company.

The Final Step

After you have found the five lowest-priced home insurance companies, the final step is to call them and request specific quotes which meet your needs.

Do make certain your fresh policy is in effect before you cancel your current one!

Personally…

Am I saving money on my house insurance! You bet! Here again, I found a bundle of savings by actually shopping around, then changing insurance companies! I found out that my former company was charging me premiums on coverage we didn’t even need!

I offer you this proven tip: Don’t listen to what an insurance representative tells you. I can’t emphasize that enough. Read, read, read the proposed policy and make sure you understand exactly what it covers.

Taxes – -One of Life’s Certainties

It was over two hundred years ago that Benjamin Franklin, one of the great statesmen of our time, made this immortal statement: “Nothing is certain in life but death and taxes.”

Did you know that Franklin was also an economist? He is also quoted as saying, ” A penny saved is a penny earned,” and he meant it. His entire life was based on frugality, and his penny – pinching made him a wealthy man.

So, just like Mr. Franklin, you must pay the required taxes on your property. That’s a given.

However, take another tip from him, and make sure you pay the lowest amount possible.

Special Cost – Cutting Programs

Depending on where you live, some counties or municipalities offer their citizenry special programs for seniors or for low-income individuals. These programs permit qualified persons to pay a reduced amount of their property taxes. Call your local tax office to recognize if you meet their criterion for any money-saving programs they might offer.

Chances Are, Your Property Taxes Are Too High!

You might even considering filing for a tax reduction with your local tax office.

Did you know that economists estimate that over half of all us American homeowners pay too much sincere estate tax every year? Why? Because many properties are said to be assessed above and beyond their actual value! One of the main reasons for this is that local tax assessors use a “one – size – fits – all” process to appraise properties.

If you win your appeal, and it’s not hard to do, you could set yourself several hundred dollars, or more on your property taxes every year! Wouldn’t you like to put that money in the bank?

Reasons For Getting Your Taxes Lowered

Some common reasons for getting your property taxes lowered include out buildings, sheds, or garages that no longer exist on the property, deteriorating structures, out buildings, roofing, decks, driveways, and so forth.

How To File For A Tax Reduction

Filing for a tax reduction is easy to do. Simply contact your local tax office and ask for the necessary forms. Take them home and read them over carefully. Then, do a careful audit of your home and property and list the reasons why your taxes should be reduced. Complete the forms – -fill them out completely and carefully – -and return them to the tax office.

If you need help, you can contact a property tax professional for assistance. The tax office will probably set-up an appointment for you to arrive in and present your case. In a week or so, they will let you know, by mail, the results of your case.

Tax laws vary, so be sure to check with your local tax office to find out the specifics on how your property is taxed.

The Rest of My Story

Okay, now for the “rest of my story.” I had purchased a small house that sat on a state of land, for “next to nothing.” The house needed completely remodeled. I knew if I did the majority of the work myself, I could turn that house into a beauty for just pennies on the dollar!

The property taxes were cheap. Because they were so low, I just assumed that the place had been properly assessed, and I wasn’t paying too powerful in taxes to start with.

Still, I went to the local tax office and got a map of the property. I figured this map would be handy to have in any event. And boy, did it ever come in handy! I found out that the property map hadn’t been updated for many years.

In fact, the property taxes included two outbuildings that weren’t even on the property!

The result? I filed for a tax reduction and got it! And I immediately stopped paying for buildings I didn’t even own!

The apt of the story? Don’t honest assume your property taxes are factual. Make obvious they are. You may be as surprised as I was!

Home Improvement

To preserve your property values up for resale or loan purposes, your property needs to look nice and be well – maintained, that’s a given. To do this, you’ll need to make renovations and provide repairs on your home and property. The upkeep can realistically cost you anywhere from hundreds to thousands of dollars, depending on the job.

On top of that, the scams that are pulled on homeowners every day, in regard to hiring contractors, are numerous. These scams bilk homeowners out of additional money that often cannot be recouped!

Americans spend over a hundred BILLION dollars a year in home repair and improvements, according to the National Association of Home Builders. What does that mean to you? Two things: one, it means that the chances are high that you’ll hire a contractor to perform some work on your home. And two, if you do, then you’ll need to take some precautions.

How To Pick Up the Best Contractor

1. Obtain at least two written estimates from two qualified contractors. The estimates should list what specific materials will be used, what services will be rendered, the specific start and finish dates of the work, the payment schedule, the contractor’s guarantee in regards to the services rendered, the name, address, and telephone number of the contractor, and the total costs of the work.

2. Never pay the full cost of a job before it is completely finished. It’s often customary to pay, for example, 50% of the total bill before the work begins. When the work is done – completely to your satisfaction, I might add – then the remaining 50% is paid.

3. Be wary of contractors who were “in the neighborhood” and decided to stop by to see if you needed work done. Also, don’t fall for “high – pressure” sales tactics! Dishonest contractors might try to con you into having work done that you don’t want, or even need!

4. Before you hire a contractor, call your local Better Business Bureau to find out if there are any existing complaints against them.

5. If you speed into problems that can’t be remedied otherwise, contact your State Attorney General’s Office to file a consumer complaint. Don’t forget to file a complaint with your local BBB too!

“Do – It – Yourself” and Pocket Your Savings!

Don’t forget about the option of doing-it-yourself. You can fix up your home and turn it into a beautiful showcase and save $$$ at the same time! And, it’s not as difficult as you may think!

I am not a professional carpenter. Yet I have successfully replaced windows, hung drywall, laid floor tile, plastered, replaced water faucets, installed kitchen and bathroom cabinets, hung wallpaper, painted and so on, for only the cost of the materials! There are easy-to-follow instructions that come along with many types of building materials – - such as floor tile, for example – - and anything else you need to know can be found in manuals and books from your local library!

My biggest project to date was building and staining a deck! There are deck kits you can buy, and they vary in size and design. But I designed my deck myself.

Tips on Refinancing a Home Mortgage – Refinance Home Mortgage Loans

admin — Fri, 20 Aug 2010 10:55:20 +0000

If you are refinancing home mortgage there are a few points to consider before making the decision. There are several benefits and drawbacks of refinancing, which must be weighed carefully, as refinancing can turn out to be a major financial decision. The first thing to understand is what is refinancing. It means taking out a loan at an interest rate lower than the current loan, to pay off an existing loan.

There are different ways of refinancing home mortgage, even if your existing loan is a fixed-rate mortgage. These include Option ARM mortgage, FHA loans, interest only mortgage, adjustable-rate mortgage and reverse mortgages. Most of the lenders do not provide no-cost refinance loan, where the upfront cost is covered in the fee charged or through a higher interest rate. In any case, it is best to rep Good Faith Estimate (GFE), which implies that in case the rates change during finalization of the loan, the lender is obliged to cover the extra cost. The costs that you need to cover when applying for refinance include Loan discount points, loan origination, administration and processing, application and inspection, documentation, appraisal, credit salvage report, title policies and escrow and other well-known aspects. The charges on documentation, administration and processing can be negotiated, so you must speak to the lender about it before finalizing the loan.

The drawbacks of refinancing includes cost, that is, the amount of money you pay, as fees generally turns out to be more than what you were paying for the original loan. Moreover a refinanced loan has a longer amortization period in case the rate of interest is higher than that of the original loan. Apart from this, refinancing also makes the mortgage much larger, even if it looks satisfactory in the short term. This is because refinance lowers the equity value of your property. Also, in case you determine to take cash-out refinance, your loan balance increases. This is generally ideal to pay off unsecured purchases; however you may end up securing a remove by 20 years, where the property itself may hold substantial value for objective about 10 years.

However, even if the drawbacks look daunting, benefits generally surpass the drawbacks. When you decide on refinancing home mortgage, especially for long term duration, the interest rate is generally lower than the unusual loan, thus allowing more cash in hand. Apart from this, refinancing can shorten the amortization period. This happens when your current interest rate is lower than the interest rate of the original loan. In this case you can invest the extra principal in something that gives higher returns.

Mortgage Rates Are at Historic Lows – Refinance Home Mortgage Rates

admin — Thu, 19 Aug 2010 11:55:30 +0000

To define the normal rate of mortgages is to consider historical statistics and analyze them. According to E-RATE, the index rates fluctuated throughout the last three decades: the rates during the 1980s varied from 8.86 to 15.59, the rates during the 1990s varied from 6.59 to 9.85, and the rates during this decade of 2000 have varied from 4.88 to 8.17. The average of the lowest index rate, 4.88 in May of 2009, and the highest index rate, 15.57 in June of 1982, is 10.275. Comparatively speaking, with the current annual mortgage rate in 2010 approximating at 5.0175, the rate is considerably low.

Investors and interested participants in real estate may try to predict where the interest rates would go: Will the interest rates stabilize for now? Will the interest rates continue to go down? When will the interest rates go up again? Researching historical numbers and evaluating housing market trends are suitable indicators in establishing conclusive answers. Over the last three decades, mortgage interest rates have steadily decreased: the median rate in the1980’s was 12.225, the median rate in the 1990’s was 8.22, and the median rate in the 2000s so far is 6.525.

According to the U.S. Census Bureau, the average prices of the American home during the commencement of the last three decades were as follows: $47, 200 in 1980, $79,100 in 1990, and $119,600 in 2000. Calculating inflation to the present year of 2010, the average home prices are as follows: $93,400 in 1980, $101,100 in 1990, and $119,600 in 2000. Taking into consideration the current inflation values, buyers who bought homes in 1980 would actually owe the banks more money than would buyers who bought homes in 2000.

This conclusion is derived from taking into account inflation and recalculating the value of the home into present standards. Looking at the statistics from the U.S. Census Bureau and the E-RATE’s history chart, the average price in 1980 is estimated at $93,400, and the median interest rate at the time was about 12.76. Theoretically, if there was no down payment, and the bank loaned the total amount, the buyer would end up owing $1,191,784 in interest. The average price in 2000 is estimated at $119,600, and the median interest rate was around 7.88. Given the same theory, as before, the buyer would waste up owing $942,44 in interest. Because of the interest rates, the buyers in 1980 are obligated to pay more interest than the buyers in 2000–a span of twenty years.

According to FSH Associates Financial Publishers, rates have varied by as much as 4.14% within a course of a single year (1980). As stated, history has shown that rates can jump significantly. With interest surcharges at an all time low, they can unassumingly rise. The best time to obtain a mortgage or refinance one is when interest rates are low, which is now. Interest rates are at the lowest in history–below 6%–and if history does not demonstrate the rates dipping much lower, then the odds are against such chances. With a clear credit background and gigantic income, the homeowner or prospective buyer should take advantage of the opportunity to get a mortgage or refinance one.

References:

E-RATE: Mortgage Rates History 1980 through 2010

http://www.erate.com/mortgage_rates_history.htm

U.S. Consensus Bureau: Historical Census of Housing Tables Home Values

http://www.census.gov/hhes/www/housing/census/historic/values.html

HSH Associates Financial Publishers: “Normal” and Historical Perspectives

http://library.hsh.com/read_article-hsh.asp? row_id=1271

How to Get a Mortgage in a Recession – Fha Mortgage Rates

admin — Wed, 18 Aug 2010 07:20:39 +0000

In the current economic conditions, a lot of potential buyers are finding themselves uncomfortable to get a mortgage, even though the mortgage rates are fairly vulgar. Today, getting finance for a home grasp has become more difficult than before, however there is a stout amount of money available for people who want to purchase a home. Here are some ways for buyers looking to get a mortgage.

1. As a buyer, you should be aware that you should check on the financing part before spending too much time searching for a home. This is something that you should make note of as the current mortgage rates may rise again in the future and you may end up paying a higher amount of interest rate on your mortgage. So if you are thinking of getting a mortgage, check out the current mortgage rates and plan out your home hold accordingly.

2.”Exotic Mortgages” may no longer be available, however there are a good number of government-backed lenders that are calm giving conventional loans. The motto of these programs are to provide funds to home buyers whose credit isn’t grand enough, or buyers who can’t even manage to effect a ten percent down payment.

3.Housing organizations across many countries help people with home purchaser assistance programs in their cities or states. Produce obvious you have a word with them before you make a deal. Also have a look at federal programs like FHA loans.

4. When getting a mortgage, ensure that all legal documents and proofs are available. These documents include, tax returns, pay stubs, and other debt statements that picture to your finances. You as a buyer don’t have to show where your money comes from, but make sure you explain that you are capable of paying the money, when inquired by a mortgage inspector or any other financial institution.

5. These days the internet can be a great source of information, but its better you have a talk with local businesses, before applying for a loan online. Update you knowledge about home loans, current economic conditions, government policies and property tax rates.

6. Under any circumstance, manufacture definite the mortgage rates aren’t a burden to your monthly income. If you are not employed in a fixed salaried job, then at least peep that you have a ample amount of money kept spare to pay off the monthly mortgage payment on your home, just in case something goes wrong with your current job.

7.Last but not the least be aware of scams online and offline. Read the offer documents carefully before taking a loan from any institution. A lot of the scam companies out there write terms and conditions in small fonts, which are usually ignored by people, who end up paying a lot more money than required.

Refinancing Your Mortgage with Bad Credit – Refinance Mortgage Rates Bad Credit

admin — Sun, 15 Aug 2010 01:14:44 +0000

Refinancing has become extremely celebrated over the last few years mainly due to the historical low interest rates available. While today’s interests rate are a drop higher than its historical lows, it makes a lot of sense to refinance your existing home mortgage in order to save money on interest, or to take out a home equity loan on the rising value of your home. Here are some tips.

If you have bad credit, believe it or not refinancing your current mortgage can help. Most people fall into the rut of bad credit because their interest payments are too high and because they have too many credit cards with revolving debt. By refinancing your unique mortgage, you can not only get a lower monthly payment, but if you have built up any value in your property you can in many situations also take out a home equity loan which is a loan based upon your home’s worth. With a home equity loan, your home is used as collateral so lenders are powerful more secure and open to giving a person a loan because it is far less uncertain than an unsecured loan.

If you have bad credit you can refinance your home mortgage and pay off your credit card debts, improving your credit substantially. You will also only have one loan to pay each month at a lower interest rate than most credit cards so it should be easier to pay off.

If you have very dreadful credit, you probably still will be able to be well-liked for refinancing your mortgage, however the interest rate may be higher than quoted for great credit holders and less amount of your home’s value may be able to be refinanced. For instance, if your home is worth 250K, you might be only able to refinance up to 200K.

If you are looking to refinance your existing home mortgage, don’t let bad credit stand in your way. In fact, refinancing your mortgage can improve your credit residence.

Benefits of Remodeling Your Home – Refinance Home Mortgage Help

admin — Fri, 13 Aug 2010 20:51:24 +0000

Remodeling your home can provide many benefits. Whether the project involves making simple home improvements, updating or upgrading several rooms, or adding a new room to the home, a remodeling project can be a rewarding and profitable experience.

Many homeowners are overwhelmed by the choices and decisions involved in a home improvement project. Even in the early planning stages there are many decisions that must be made. Working with professionals will make the home improvement project more toothsome and reduce your stress. Carefully choosing your professional remodeling contractor will help to make your home improvement project as enjoyable and stress-free as possible.

Make Your Home More Comfortable
A remodeling project can make your home more comfortable and enjoyable. Improving the layout of your home can make your home more usable and enjoyable. Replacing windows and doors can often increase security and energy efficiency. Your home is an critical part of your life. There is no reason to be uncomfortable in your home when remodeling can increase your enjoyment of the home.

Increase Home Value
Purchasing a home is the largest investment most people obtain. Renovating or remodeling your home is a sure contrivance to increase the value of your home and property. Whether you plan to sell the home, refinance your mortgage, or are impartial investing in your home for the future, a remodeling project is a obedient method to increase the value. Small improvement projects can easily increase the value of the home by thousands of dollars.

Reduce Maintenance Costs
Every building needs to be maintained and repaired in order to gain its value. Your home is no exception. Home repair costs often increase significantly when maintenance is ignored or postponed too long. Starting a repair or improvement project when a problem is first noticed will often save money. Repairing or remodeling parts of your home can reduce maintenance costs later.

Reduce Utility Costs
Many older homes are not energy efficient. Improvements in building materials often result in new products that are more efficient than products that were used several years ago. Newer materials are usually much more efficient than materials used in the past. Rising utility costs originate remodeling and renovation projects more affordable than ever. Replacing windows and doors, repairing or replacing siding, and improving insulation can all yield substantial energy savings. Your home improvement project may cost less than you think when you consider the energy savings you will realize.

There are many benefits to remodeling or renovating your home. Why not make your home exactly what you want it to be? A home remodeling project can make your home more comfortable and enjoyable, increase the value of your home, reduce long-term maintenance costs, and reduce utility costs.

Taking Stock of Wall Street 2008-10-15 – Chase Home Mortgage Refinance

admin — Thu, 12 Aug 2010 10:34:05 +0000

Another day of bearish fall, in fact the steepest since Black Monday in 1981. All this, despite no less than 10 companies bringing out good earnings reports, yesterday evening and today morning!

Marketmen, in panic, were taking any negative data as another reason to cringe.

But the ridiculous part is that the same data was negative last few month too. They denied the existence of recessive pressures and pushed the market up at the slightest pretext, then.

They ridiculed anybody, even learned economists, who said recession had already started because it didn’t suit them.

But the result of such self-denials is that when paranoia sets in, they overreact as chances for ad hoc correction of economic ills have already been wasted.

Even positive fundamentals are cast away on the way side as they run for conceal, spreading awe throughout the nation.

In the land of Washington, Lincoln and Freedom, people at the top were expected to be unselfish and non-greedy though ambition and motivation were encouraged. Now since they have proved unworthy of that trust, the government is forced to take active part in business ownership!

No point now, in raising the alarm,”Socialism! Socialism!”.

GLOBAL PICTURE

European stock markets dropped by -2% to -3%. Earlier, in Asia it was by around -5%.

Iceland’s Central Bank dropped its key interest rate from 15.5% to 12%. It also availed of $545 mln funding from Denmark and Norway.

The Brazilian stock exchange halted trading after its index fell through 10%.

Hong Kong started full guarantee on bank deposits. Earlier they also instituted a liquidity plan for the domestic banking system.

China may bag its growth slowing as foreign investors withdraw their investments. Yet it is not expected to be as drastic as the outflow that happened in the case of Russia recently.

Japan’s trade deficit touched $2.3 bln in August.

US ECONOMIC DATA

US Bureau of Census Retail Sales data for September – fell by -1.2%, more than the forecast of -0.7%. Compared to last year sales are down 1.0%.

Producer Price Index for September – fell by 0.4%. However, if food and energy prices were excluded, it would have been an increase in PPI by +0.4%, double the expected 0.2% increase!

The Empire State Manufacturing Survey – New York set business conditions index dropped 17 points to -24.6.

The new orders index fell 25 points to -20.5 and the shipments index by 9 points to -8.9.

The inventories index recorded a enchanting decline, falling 15 points to -17.1. The average workweek index fell to -9.8.

The Mortgage Bankers Association (MBA) Weekly Mortgage Applications Survey for the week ended October 10 – Mortgage applications rose 5.1% compared to last week but was lower by 17.0% compared to same week of previous year. The four-week curious average went down by 7.9 percent%.

The Refinance Index increased by 12.5%. Purchase Index decreased 0.3%.

The fixed-rate mortgage interests increased:

15-year fixed-rate mortgages increased to 6.17% from 5.71%

30-year fixed-rate mortgage rate increased to 6.47% from 5.99%.

Beige Book, Fed’s Record on Economic Activity – Economic activity slowed in September in all the nations twelve regions. Exact estate, both residential and commercial, was weakening. Credit availability was tightening. The positive aspect was that inflationary pressures were lessening.

Crude oil dropped by -$1.12 (-1.50%) to $73.42

Gold fell by fair -$0.50 (-0.06%) to $839.00

CBOE Volatility again soared through 14.12 points to 69.25.

MARKET INDICES

Dow went DOWN by -733.08 (-7.87%) to 8,577.91

S&P 500 DOWN by -90.17 (-9.03%) to 907.84

Nasdaq DOWN by -150.68 (-8.47%) to 1628.33

NYSE

Daily Volume: 1.63 bln

A/D Ratio: 343 stocks advanced against 2912 declined

52-week Hi/Lo: 2 stocks climbed to new Highs while 201 went down to new Lows

Nasdaq

Daily Volume: 2.55 bln

A/D Ratio: 433 stocks advanced against 2476 declined

52-week Hi/Lo: 5 stocks climbed to unique Highs while 217 went down to new Lows

MARKET NEWS

Now that Wall Street’s financial worries have been covered, they got something to distress about: economy! As if, it was yesterday night it went red.

And they worried about it in style that the indices fell to the lowest levels in a quarter century.

With crude oil falling to lower seventies, energy sector stocks were the first victims, followed by the commodity-based stocks.

Then that spread over to other eight sectors of the market.

COMPANY NEWS

While car sales everywhere is falling, Ford (F) is positioning in India’s cramped car sector with a $500 mln investment, in time for a revival in 2010.

Samsung intends to sells computers in USA from mid-2009 in a market segment that is already saturated. So let us hope they will offer some price advantages.

Merrill Lynch’s (MER) Asian Real Estate Fund investing in Japan, China, South Korea and India, notched up $2.65 bln even when market is in a free fall!

M&A NEWS

GlaxoSmithKline (GSK) is acquiring the Egyptian operations of Bristol Myers Squibb’s (BMY).

COMPANY RESULTS

Following companies declared in excess of the analyst’s forecasts:

Abbott Labs (ABT), Coca-Cola (KO), Intel (INTC), JPMorgan Chase (JPM), State Street (STT), Wells Fargo (WFC), eBay (EBAY). Crown Holdings (CCK), Polycom (PLCM), Charles Schwab (SCHW), CSX (CSX), Marshall & IIsley (MI) and Xilinx (XLNX).

These companies produced earnings that missed the market’s consensus:

Piper Jaffray (PJC), Spansion (SPSN), Kinder Morgan Partners (KMP), WD-40 Company (WDFC), Kinder Morgan Energy Partners (KMP),Delta Airlines (DAL) and Novellus Systems (NVLS).

ANALYSTS RATINGS

The company stocks upgraded include:

Abercrombie & Fitch Co (ANF), Accenture Ltd (ACN), Amcore Financial Inc (AMFI), AutoZone Inc (AZO),

AvalonBay Communities REIT (AVB),bebe stores Inc (BEBE), Callon Petroleum Co (CPE), Centerstate Banks of Florida Inc (CSFL),

Comerica Inc (CMA), Dick’s Sporting Goods Inc (DKS), Dollar Tree Inc (DLTR), Equity Residential REIT (EQR), Fifth Third Bancorp (FITB),

First Mercury Financial Corp (FMR), First Security Group Inc (FSGI) First Spot Bancorp Inc (FSNM), Frontier Financial Corp (FTBK),

Genentech Inc (DNA), Home Depot Inc (HD), La Jolla Pharmaceutical Co (LJPC), Lowe’s Companies Inc (LOW), Macatawa Bank Corp (MCBC),

Mid-America Apartment Communities REIT (MAA), Pacific Continental Corp (PCBK), Petsmart Inc (PETM), Salesforce.com Inc (CRM),

Seacoast Banking Corp of Florida (SBCF), SRA International Inc (SRX), SunTrust Banks Inc (STI), Superior Bancorp (SUPR), TJX Companies Inc (TJX),

UDR Inc (UDR), Ultimate Software Group Inc (ULTI), Virgin Mobile USA Inc (VM), Wells Fargo & Co (WFC) and Wyeth (WYE).

Company stocks downgraded are:

Biomarin Pharmaceutical Inc (BMRN), Callaway Golf Co (ELY), Helicos BioSciences Corp (HLCS), Johnson Controls Inc (JCI),

KBW Inc (KBW), Royal Bank of Scotland Group ADR (RBS), Silicon Motion Technology Corp (SIMO), Volterra Semiconductor Corp(VLTR),

W&T Offshore Inc(WTI) and Whitney Holding Corp (WTNY).

FED TALK

Fed Chairman Bernanke addressed the Economic Club of Unusual York. He was confident that the decisive and proactive actions taken by the government will lead to a quicker resolution of the financial crisis. Yet there are no easy quickly fixes. It is going to take some time for the results to be felt.

President of St. Louis Regional Fed, Bullard predicted flat or slightly negative GDP for the third quarter, considering the negative September retail sales report.

President of the Boston Regional Fed, Rosengren forecast easing of interbank Libor rates and spreads soon.

POINTERS TO THE FUTURE

- While the interbank credit system is easing, the rise in mortgage rates will be a damper.

Overview of First Time Home Buyer Programs – Fha Home Loan

admin — Thu, 12 Aug 2010 02:05:51 +0000

First time home buyer programs offer tax incentives, down payment assistance, and financing options for buyers with less than perfect credit. Not all programs are available to first time buyers and each requires applicants to meet eligibility requirements. Buyers can conduct online research or consult with a mortgage adviser to determine which program is best suited for their needs.

The most popular first time home buyer programs include FHA loans, HUD houses, VA loans, Fannie Mae financing, and Making Home Affordable; a government sponsored program offering mortgage refinance and home loan modifications.

In addition to perks and incentives of home buying programs, first time home owners can also take advantage of the Worker, Homeownership and Business Assistance Act that extends an $8,000 tax credit for primary residence real estate purchases made by April 30, 2010. The Recovery Act also provides up to $6500 tax credit to homeowners who have lived in their home for five or more years and ready to step up to a higher priced home.

The Department of Housing and Urban Development provides an assortment of first time home buyers programs. Although HUD programs differ by state most offer the opportunity to buy HUD homes at substantially discounted prices.

HUD offers the ‘Good Neighbor Next Door’ program to individuals employed in teaching, law enforcement, and public service professions such as paramedics and firefighters. HUD good neighbor incentives include buying houses up to half off real estate listing prices.

The Federal Housing Administration offers home loan financing opportunities for first time home buyers with indecent FICO scores and credit blemishes. Borrowers who have inconsistent employment histories or those who have previously filed bankruptcy sometimes find it easier to qualify for FHA loans.

Currently, the down payment requirement for FHA loans is 3-1/2 percent. FHA allows borrowers to obtain down payment monies from an outside source such as a gift or loan from friends, family or a charitable organization. The Federal Housing Administration is the only home loan program that allows down payment assistance from a third party.

The Department of Veterans Affairs provides first time home buyer programs to veterans and active duty personnel. The VA guarantees up to 25-percent of home mortgage loans which helps veterans obtain financing through a primitive mortgage lender. First time home buyer programs, tax incentives and mortgage assistance information can be found at VA.gov.

Fannie Mae provides first time home buying programs and refinance mortgages options. One popular program is Home Path®. This home buying program provides a mixture of homes for sale. Home Path properties include foreclosure homes which are sold at discounted prices through Fannie Mae approved realtors.

Additional home buying incentives offered through Fannie Mae programs include no appraisal fees, low down payment requirement, flexible mortgage terms, and home loan financing for people with bad credit. First time home buyer and mortgage refinance programs can be found at FannieMae.com.

Buying a Home from Relatives – Refinance Home Mortgage Bankruptcy

admin — Wed, 11 Aug 2010 05:09:30 +0000

Buying a home is one of the largest financial decisions you will make in your life. What can make it more difficult is if you do not have the credit to get the home you need.

My husband and I were newlyweds and had impartial found out our first child was on the map. We happen to reside in an apartment that did not allow children-this is a problem.

We looked at a lot of homes and figured out with our income we could not afford to buy the house we wanted. I was 22 and my husband was 18. I was already in debt with a current car purchase and credit cards. He did not have any credit. Therefore, we tried the next option and looked into buying a mobile home (not really what either wanted). WE found a nice single-wide with four bedrooms, all the furnishings, and appliances. We did get approved but the interest rate was 17 percent; we also had nowhere to place this home. So here we were back at square one. My husband has an uncle, who is also a preacher, which he confides in and seeks advice from. He said he might be able to help us. Well without me knowing they look at this house together. My husband came home and tells me he has agreed to buy this house (did not really care what I belief) from his uncle. He took me to peep at it and it was small, green, and very used. Not my idea of a home but it will have to do. His uncle sold us the home for 30,000 at a 7 percent interest rate for 10 years-not a unpleasant deal.

When deciding to buy a home from a relative, there are a few things to think about first. Your relative may act as a landlord and try to tell you what you need to do with the house, instead of letting you do your fill thing. In our case, the uncle took it upon himself to paint our house without asking. It was greatly appreciated, but it made us feel uncomfortable. They could possibly put restrictions on your property, in our case we cannot have any other family living with us, and no junk cars on the property (my husband is a mechanic). If for some reason you get gradual on payments, you will have a family issue instead of a bank issue. If you decided you want to refinance through the bank and pay off the current mortgage it may cause hard feelings. Buying through a relative also can affect your credit. You will have a mortgage but it will not show on your credit report. This has caused problems with my husband and I when applying for credit we need.

One of the most important things to take care of is the deed of trust. This is the binding agreement between the parties. The deed of trust explains the details of the select between the buyer and the seller. I filed bankruptcy without my husband, since this mortgage was not on my credit they took it as I owned my home outright. I was in danger of losing my home. They told me in so many cases people had bought homes from a family member; they did not do the paperwork correctly resulting in losing their homes. We had the deed of trust so it worked out. Make sure there is a deed of trust filed at the courthouse to protect your home.

Buying from a family member can be a good thing. We recently wanted to pay off some credit card debt and decided to the bank select out a loan. The uncle loaned us the money and just added the amount on to the wait on of the house. We owed five years on the current mortgage, with the loan from the bank we would pay five years at 250.00 a month. The uncle’s loan made it to where we now owe eight years, but do not have that extra payment or the interest – we now have the ability to double up on payments. Any time we have wanted to make improvements (in our situation) the uncle has went out of his way to serve with the labor, parts and financially. He has put a roof on the house, helped with patching the holes in the siding, planted grass, and leveled the yard. He has been a blessing.

There are many options available when buying a home. If making the purchase through a family member is the choice, take the time to make sure everything is done correctly. It could save you a lot of problems in the long run. You would not take out a loan or buy a car with out doing your home work so do not buy a house (even from family) without research.