LITTLE KNOWN SECRET ABOUT YOUR MONEY

Several years ago, a client was selling their home, and the bottom line wasn't pretty, they were going to have to bring 5000.00 to closing, however, there was over 5,000.00 in their escrow account which they could not get back for 30 days.

 

This didn't seem right to me, so I contacted the lender on the seller's behalf and asked if the loan payoff could include the deduction of the escrow account, allowing the seller the expense of borrowing the money to come to closing to just sell their house.

The process was simple (well, 15 years ago it was simple).  All the seller had to do was write a letter to the lender requesting the escrow be included in the payoff for the day of closing.

It saved the seller a lot of frustration, the sale closed, and we saved the day.

I have run into this situation again, and today it is not so easy, the lender swears on their Mothers grave, it can't be done,  "not our Policy"  "Can only do it for refinance".  After 45 minutes of informing the lender that yet another foreclosure may hit the market if this cannot be accomplished, they said if the seller wrote a hardship letter, within three days they "may" be able to get it approved.  Thing is, the seller had sent that letter three weeks early and had been declined in writing.

The Title company spent hours trying to reason with someone, anyone, to get this done, and after three weeks, several days, too many hours, and a boat load of frustration, it may get done.

I sent a letter to my Congressman, and I will contact whomever I think may have an impact on this ridiculous rule. 

Sellers are giving up on the ludicrous behavior of banks and lenders that do not have real world issues in their vocabulary, result, millions of foreclosures that could have been saved.  This story is just one of the reasons the public has lost trust in anyone who was once a savior to the American Dream.

If you are faced with this situation, fight for your Money. It may not be much, but in this market we only have a few angles to cover.

Posted via email from realestaterealities posterous

One More Chance?

Fixed Rate mortgages are at their lowest level for 2011 as reported in the current Freddie Mac weekly Primary Mortgage Market Survey. Many qualified buyers missed the opportunity last fall in October and November to refinance at record low rates. This may give homeowners one more chance to refinance and save money on their payments.

An important thing to keep in mind is that points paid in connection for refinancing a home are generally not considered prepaid interest and must be spread over the life of the mortgage. Some advisors suggest that you have the lender quote a "par value" loan to eliminate the points which will lower refinancing costs even though the mortgage rate will be slightly higher.

Additional income tax information is available in IRS Publication 936.

Posted via email from realestaterealities posterous

Buy Now or Wait

Uncertainty as to whether prices will continue to fall has to be one of the most common causes of buyer procrastination.  Paying too much wouldn't be a smart thing but price isn't the only factor to consider.  Interest rates have as much effect on housing costs as price.

A small increase in mortgage interest rates can offset a significant drop in home prices.  If the price of the home were to come down by 5% but the interest rates were to go up by .5%, the payments might be close to the same.

In the example below, if the price of $175,000 home went down 5% but the interest rate went from 4.75% to 5.25%, the payments would actually be $4.98 more at the cheaper price.  If while the buyer was waiting for the home to decrease 5% and the interest rate increased by 1%, the payments would actually go up by $55.30.

Then, of course, there is always the possiblility that the price of the home doesn't go down but the rate does go up by 1%.  The payments would be $104.58 more per month, each and every month for as long as you have the mortgage on the home.

As a Residential Finance Consultant, I can provide solid information that will help you make better buying decisions.  A home is a place to feel safe and secure, to raise your family, share with your friends and an investment.  It's an investment in your marriage, your family and your future.  You owe it to yourself to check out the real numbers in your market because every market is different.

Posted via email from realestaterealities posterous

Start your Projects

Summertime is almost here and millions of Americans will be starting home improvement projects.  Whether they're classified as maintenance, updating or energy saving, they should make homeownership more enjoyable.

Remodeling magazine's 2010-11 Cost vs. Value Report suggests that some improvements are a better investment than others.  Front door and garage door replacements are two of the easiest and return the greatest percentage of cost on resale.

Kitchen and bathroom updates transform an older home and instantly give visitors and buyers a fresh impression. Countertops and appliances can be expensive but yield great results.  Painting the cabinets and replacing the hardware is much less expensive to change the look and feel of the rooms.

Energy efficiency enhancements can improve your enjoyment of the home and help save money on utility costs.

• Replace older appliances - refrigerators, ceiling fans, water heaters, air-conditioners
• Add insulation to keep your home cool in the summer and warm in the winter
• Seal air leaks around doors and windows; holes in attics and crawl spaces with caulk, spray foam or weather stripping - more information
• Seal all heating and cooling system ducts - more information

Looking through the eyes of a buyer could show you what features most date your home and could order the priority that you tackle the projects.

Posted via email from realestaterealities posterous

Cash Now - Mortgage Later?

You might think that a person who pays cash doesn't have many concerns or at least not the same ones as most people.  Roughly, about 9% of people paid cash for their home last year with a considerably higher percentage paying cash this year. 

The first question that comes to mind when I hear someone say they want to pay cash for a home is "Do you think that you might put a loan on the home in the future?"  Paying cash may affect your ability to deduct the interest on a mortgage placed on the home at a later date.

Currently, a homeowner may deduct the interest on up to $1 million of acquisition debt.  Paying cash for a home establishes acquisition debt at $0.  At that point, the only deductible interest would be home equity debt which is limited to $100,000 over acquisition debt.  You can get more information about this from IRS Publication 936.

On the surface, paying cash certainly seems simple but it may have consequences later.  As a Residential Finance Consultant, I can point out the areas when advice from a tax professional is in order.

Posted via email from realestaterealities posterous

It's Hot!!

The weather is hot, the market is hot.  Big interest these days, investment properties to purchase for lease.  The lease market has increased dramatically because of foreclosures and lost jobs, credit issues and downsizing.  If you have 10-20% money to invest you can purchase a home and in all likelihood, over the years someone else will pay off that house for you.

 

Now is an incredible time to buy, you hear is everyday, whether ownership or investment properties,  don't let this time pass you by.

Posted via email from realestaterealities posterous