Posts Tagged ‘buying a home’

Preparing for Home Ownership

March 15, 2010

1. Decide what you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.

2. Develop your home wish list. Then, prioritize the features on your list.

 3. Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.

 4. Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price.

5. Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.

6. Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.

7. Get preapproved. Organize all the documentation a lender will need to pre-approved you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.

 8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal. Can you receive a gift from family?

 9. Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.

10. Contact a REALTOR®. Find an experienced REALTOR® who can help guide you through the process.  Not everyone real estate agent is a Realtor®.  Contact me today for more info: 310-398-2332,

Advertisements

California Real Estate buyer tax credit

March 3, 2010

H.R. 3548 provides both for the extension of the first-time homebuyer tax credit and expansion of it to qualified non-first-time buyers as well.  A few of the provisions of this new law include the following: 

(1)  Both the $8,000 first-time homebuyer tax credit and the $6,500 tax credit for “move-up” buyers (see 4 below) would sunset on April 30, 2010. However, purchasers who have binding contracts as of April 30, 2010 (before May 1, 2010), would still qualify for the credit as long as they complete the transaction within 60 days (or June 30, 2010).

(2)  The amendment establishes income limits of $125,000 for an individual or $225,000 for a couple for both credits.

(3)  The cost of the home being purchased cannot exceed $800,000 for both categories in order to be eligible for the credit. 

(4)  “Move up” buyers (an individual or his/her spouse, if married) are qualified if he/she “has owned and used the same residence as such individual’s principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence.”

For purchases made in 2010, taxpayers would be able to claim the credit on their 2009 income tax return. Homebuyers would not have to repay the credit, provided the home remains their principal residence for 36 months after the purchase date. However, this recapture provision would not apply in the case of a member of the Armed Forces, military intelligence or Foreign Service who is on qualified official extended duty. In addition, members of the military who have been deployed overseas for 90 days or more in 2008 or 2009 would have until April 30, 2011, to claim the homebuyer tax credit.

The amendment also includes anti-fraud language that gives the IRS the authority to do greater oversight during the processing of the return rather than waiting for an audit situation. The amendment requires the taxpayer claiming the credit to be 18 or older and requires a HUD-1 settlement statement to be attached when claiming the credit.

Do I have to give the buyer my furniture?

February 11, 2010

It is a good idea to begin this conversation with your agent before your property hits the market.  There are laws on the books about what is a fixture: “The California legislature has declared that a thing is affixed to the land when it is attached and imbedded into a wall permanently by means of cement, plaster, nails, bolts and screws is a fixture.  Also, it is affixed to the land so as to be regarded as a permanent part of it, such as a building, a tree or bridge, as well as anything that is similarly affixed to an already affixed object such as the doors of a building, or permanently installed cabinets, or built-in appliances”.   California Department of Real Estate Reference Guide.

So how does this affect you?  You may have a lovely chandelier in your dining room that was given to you by a family member and it holds strong sentimental value, the best advice is to remove it and put another one in its place.  Invariably the new buyer will want what you want.  You should have your agent insert the exclusion in your contract with your agent and in the MLS.  I have had buyers ask for flat screen TV’s, patio furniture (a lot of furniture), bar stools, furniture, fish in the coy pond.  Jokingly, some buyer’s upon first seeing the house may ask for the family pet or that fantastic car in driveway.   The most common requests are for the refrigerator, washer, dryer and stove, and sometimes fireplace equipment, which may match the fireplace screen. Some refrigerators and stoves are built-in, or built as part of the structure, and it would damage framing around these items to remove them.   I had one transaction in 22 years where the lender disallowed the transfer of the washer, dryer and ‘frig, and considered them personal property.  All we had to do was remove the items from the contract.  If there are a number of items, for instance, a house full of furniture, the lender may ask for it to be taken out of the contract as they lend on real estate and not personal property.  Some buyers offer to buy some of the seller’s personal items.

If you think about when you bought your home the thought of forking out more money after the closing may not figure into your budget.  You might be able to ask for them on a subsequent purchase.

For info on what your house in Los Angeles is worth or to search your new home go to my site DonnaBenton.com.

Buyer Signs Loan Documents

June 17, 2009

a REMAX logoFinally, after so many starts the buyer signed her loan documents.  We should be able to close escrow this week.  Initially, the buyer was going with an FHA loan with 3.5% down payment.  The week before we were supposed to close her agent called to say that the condominium complex did not qualify for FHA financing.  Supposedly, the building did not have enough reserves.  The building has $300,000 in reserves.  I never received a straight answer as to how much was enough.  Next she was attempting a loan with 20% down, but they were able to qualify her with 10% down.  Another 2 weeks and the agent calls to tell me that the lender did not ask for the buyer’s tax returns up front; they waited until the 4506 came in to review them.  The 4506 is a document authorizing a lender to order a copy of a borrower’s tax returns that have been submitted to the IRS.  Once they took a look they found out that as a teacher she had  used her own money to buy supplies for the class without being reimbursed by her employer.  This decreases her income and changes her income ratios, and so they had to go back to 20% down, another two weeks.  I know that public school teachers do this, but I did not know this about private school teachers.  I was surprised that the lender did not ask for tax returns with the borrower’s loan package.  Luckily, she was able to borrow some money from family members.    Another example of loan snafus.  Even if you are well qualified, you may have a difficult time getting a loan.  Usually, the lenders go over your paperwork with a fine tooth comb and request information on everything. 

 When applying for a loan be prepared.  Lenders will want copies of the following: 2 months of bank and investment statements, two years of tax returns,  1 month pay stubs, 4506T (tax form to verify tax returns), copy of drivers license, and social security number.  You are required to complete an application detailing any and all credit card, student, car loans or other loans.  Once the loan broker has all of your information he will package your loan and submit to the underwriter.  Once the underwriter reviews your package, they may ask for more documentation.  It is suggested that you have all of this done prior to house-hunting.  Once you find a home and sign a contract to buy your broker will order an appraisal, a title report and escrow instructions.  The underwriter may want more information after receiving any of these items. 

For more information, contact me.

Donna Benton

#1 Agent At RE/MAX Westside Properties

June 2, 2009

a REMAX logoKelli Todd, CEO of RE/MAX Marquee Partners,  sent me a letter announcing that I was the top producer for the month of April out of 300 agents.  Wow, I have received many awards over the years, but this is a first for me.

I want to thank all of my loyal clients for trusting  my abilities to represent you.

qsc-blackCDPE logo color