Posts Tagged ‘first-time homebuyer’

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,

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3rd Annual Home Buyer’s Fair

March 4, 2010

It is that time of year again:

LOS ANGELES  – The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) and the Los Angeles Times are sponsoring the third annual Southern California Home Buyer’s Fair at the Los Angeles Convention Center March 13 and 14.

Time: Sat. 10-5 pm, sun. 11-4 pm. Concourse Hall, 1201 S. Figueroa St, LA, 90015

For more info visit: homebuyersfair.com

It’s free, but pay to park.

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.

Real Estate 101 glossary P-R

November 28, 2009

Here we are after Thanksgiving.  Forget the turkey, I was stuffed.

PARTIAL INTEREST   A shared ownership in a piece of property. May be divided among two or more parties.

PARTIAL PAYMENT   A payment of less than the regular monthly amount. Usually, a lender will not accept partial payments.

PERIODIC PAYMENT CAP   The limit on how much regular monthly payments on an Adjustable Rate Mortgage can change during one adjustment period.

PERIODIC RATE CAP   The limit on how much the interest rate on an Adjustable Rate Mortgage can change during any one adjustment period.

PERSONAL PROPERTY Owned items which are not permanently affixed to the land.

PERSONAL RESIDENCE   The primary domicile of a person or family.

PLANNED UNIT DEVELOPMENT (PUD)   A coordinated, real estate development where common areas are shared and maintained by an owner’s association or other entity.

PLAT   A plan or chart of a piece of land which lays out existing or planned streets, lots or other improvements.

POINT   A percentage of a mortgage amount (one point = 1 percent).

PRE-APPROVAL   The process of applying for a mortgage loan and becoming approved for a certain amount at a certain interest rate before a property has been chosen. Pre-approval allows the borrower greater freedom in negotiations with sellers.

PREFABRICATED  Any building or portion thereof which is manufactured and assembled off site, then erected on a property.

PREPAYMENT  Payment made that reduces the principal balance of a loan before the due date and before the loan has become fully amortized.

PREPAYMENT PENALTY   A fee that may be charged to a borrower who pays off a loan before it is due.

PRE-QUALIFICATION   Less formal that pre-approval, pre-qualification usually means a written statement from a loan officer indicating his or her opinion that the borrower will be able to become approved for a mortgage loan.

PRIME RATE   The interest rate that banks and other lending institutions charge other banks or preferred customers.

PRINCIPAL   The amount owed on a mortgage which does not include interest or other fees.

PRINCIPAL BALANCE   The outstanding balance of principal on a mortgage. Does not included interest due.

PRINCIPAL, INTEREST, TAXES, AND INSURANCE (PITI)   The most common constituents of a monthly mortgage payment.

PRIVATE MORTGAGE INSURANCE (PMI)  A form of mortgage insurance provided by private, non-government entities. Normally required when the LOAN TO VALUE RATIO is less that 20%.

PROPERTY  Any item which is owned or possessed.

PURCHASE AGREEMENT   A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

QUADRAPLEX  Any building designed to accommodate four families.

QUALIFYING RATIOS   Two ratios used in determining credit worthiness for a mortgage loan. One is the ratio of a borrower’s monthly housing costs to monthly income. The other is a ratio of all monthly debt to monthly income.

QUITCLAIM DEED   A legal document which transfers any ownership an individual has in a piece of property. Often used when the amount of ownership is not known or is unclear.

RAFTER  A structural element of the roof, sloping from the peak to the outer walls.

RANCH HOUSE   An architectural style typified by a single-story, low-roof construction. Popular in the western U.S.

RATE LOCK   A guarantee from a lender of a specific interest rate for a period of time.

RAW LAND   Any land which has not been developed.

REAL ESTATE   A piece of land and any improvements or fixtures located on that land.

REAL ESTATE AGENT   A licensed professional who facilitates the buying and selling of real estate.

REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA)  A federal law requiring lenders to give full disclosure of closing costs to borrowers.

REAL PROPERTY   Land, improvements and appurtenances, and the interest and benefits thereof.

REALTOR®  A real estate agent or broker who is a member of the NATIONAL ASSOCIATION of REALTORS®.

RECEPTACLE   An electrical outlet to plug into.

RECORDER   A local government employee whose role it is to keep records of all real estate transactions within the jurisdiction.

RECORDING   The filing of a real estate transaction with the appropriate government agent (normally the RECORDER). A real estate transaction is considered final when it is recorded.

REFINANCE TRANSACTION   A new loan to pay off an existing loan. Typically to gain a lower interest rate or convert equity into cash.

REGISTER   Where air from a furnace or air conditioning system enters the room.

RELOCATION SERVICE   Any company or agency that assists corporate employees in relocating from one place to another. Services may include hiring and coordinating real estate agents, moving companies, utilizes and the like.

REMAINING BALANCE   Back to top
The amount of principal, interest and other costs that has not yet been repaid.

REMAINING TERM   The amount of time remaining on the original amortization schedule.

REMODEL   An activity designed to improve the value or desirability of a property through rebuilding, refurbishing, redecorating or adding on to it.

REPAYMENT PLAN   A plan to repay delinquent payments, agreed upon between a lender and borrower, in an effort to avoid foreclosure.

REPLACEMENT RESERVE FUND  An account, or fund, setup for the replacement of short life items, such as carpeting, in the common areas of a cooperative property.

RESIDENTIAL PROPERTY  A piece of property whose highest and best use is the maintenance of a residence.

REVOLVING DEBT   A type of credit that allows the borrower/customer to make charges against a predetermined line of credit. The customer then pays monthly installments on the amount borrowed, plus interest.

RIDGE BOARD   The structural member of a roof where the rafters join at the top.

RIGHT OF FIRST REFUSAL   An agreement giving a person the first opportunity to buy or lease a property before the owner offers it for sale to others.

ROOF PITCH   The degree of slope in a roof.

RURAL  An area outside of an established urban area or metropolitan district.

How to buy a bank owned property

November 22, 2009

This was so popular, I am posting again

http://www.youtube.com/watch?v=SM7oWKgCVo4&feature=player_embedded

Real Estate 101 Glossary N-O

November 22, 2009

Let’s take a bite out of the N’s and the O’s.

NATIONAL ASSOCIATION OF MASTER APPRAISERS (NAMA)  A non profit professional association organized in 1982, dedicated to the advancement of professionalism in real estate appraisal.

National Association of Realtors (NAR) A non-profit professional association for real estate agents.  Not all agents are Realtors. Realtors follow a code of ethics. and promotes professionalism within the association

NATIONAL SOCIETY OF REAL ESTATE APPRAISERS  An organization founded in 1956 which promotes standards of professionalism in its members.

NATURAL VACANCY RATE  The percentage of vacant properties in a given area that is the result of natural turnover and market forces

. NEGATIVE AMORTIZATION  When the balance of a loan increases instead of decreases. Usually due to a borrower making a minimum payment on an Adjustable Rate Mortgage during a period when the rate fluctuates to a high enough point that the minimum payment does not cover all of the interest.

NEIGHBORHOOD LIFE-CYCLE The evolution of neighborhood use and demographics over time. Economic fluctuations, municipal zoning changes and population shifts can effect the life cycle.

NEIGHBORHOOD  A subsection of a municipality that has been designated by a developer, economic forces or physical formations.

NET LEASABLE AREA  The space in a development, outside of the common areas, that can be rented to tenants.

NEW ENGLAND COLONIAL  An architectural style dating from early American history typified by a two-story building with clapboard siding.

NO-COST LOAN  Many lenders offer loans that you can obtain at “no cost.” You should inquire whether this means there are no “lender” costs associated with the loan, or if it also covers the other costs you would normally have in a purchase or refinance transactions, such as title insurance, escrow fees, settlement fees, appraisal, recording fees, notary fees, and others. These are fees and costs which may be associated with buying a home or obtaining a loan, but not charged directly by the lender. Keep in mind that, like a “no-point” loan, the interest rate will be higher than if you obtain a loan that has costs associated with it.

 NO-POINT LOAN  A loan with no “points”. The interest rate on such a loan will be higher than a loan with points paid. Also sometimes refers to a refinance loan where closing costs are included in the loan.

NON-CONFORMING USE  The use of land for purposes contrary to the applicable municipal zoning specifications. Often occurs when zoning changes after a property is in use.

NONLIQUID ASSET  Any asset which can not be quickly converted into cash at little or no cost.

 NOTE  A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.

NOTE RATE  The interest rate stated on a mortgage note.

 NOTICE OF DEFAULT  Formal written notice from a lender to a borrower that default has occurred.

 OBSOLESCENCE  The process of an assets value diminishing due to the development of more desirable alternatives or because of the degradation of its capabilities.

OCCUPANCY A physical presence within and control of a property.

OCCUPANCY RATE  The percentage of properties in a given area that are occupied.

OCTOPUS RECEPTACLE  An outlet with too many devices plugged into it, using a power strip or other device to multiply the outlets.

 OFF-SITE IMPROVEMENTS  Buildings, structures or other amenities which are not located on a piece of property, but are necessary to maximize the use of the property or in some way contribute to the value of the property.

OFF-STREET PARKING  Designated parking spaces associated with a particular building or other structure which are not located on public streets.

OLD TERMITE ACTIVITY  Where no termites are currently active, but indications of past activity can be seen.

ON-SITE IMPROVEMENTS  Buildings, structures or other amenities that are erected on a piece of property and contribute to its value.

OPEN SPACE  Any land which has not had any significant buildings or structures erected on it. Most often used to describe desirable neighborhood features like parks.

OPEN SPLICE An uncovered electrical connection.

ORIGINAL EQUITY  The amount of cash a home buyer initially invests in the home.

 ORIGINAL PRINCIPAL BALANCE  The total amount of principal owed on a mortgage loan at the time of closing.

ORIGINATION FEE  Refers to the total number of points paid by a borrower at closing.

 OWNER FINANCING  A transaction where the property owner provides all or part of the financing.

 OWNER OCCUPIED  The state of property wherein the owner occupies at least some portion of the property.

Real Estatte 101 Glossary “I, & J'”

November 8, 2009

Lola and me

Been in LaJolla for Tom Ferry seminar.

Enjoy the I’s and J’s.

IMPROVED LAND   Any parcel of land which has been changed from its natural state through the creation of roads, buildings or other structures.

IMPROVEMENTS   
Any item added to vacant land with the intent of increasing its value or usability.

IMPROVEMENT RATIO   The comparative value of an improved piece of land to its natural, unaltered state.

INCOME APPROACH   The process of estimating the value of property by considering the present value of a stream of income generated by the property.

INCOME PROPERTY   A piece of property whose highest and best use is the generation of income through rents or other sources.

INDEPENDENT APPRAISAL   An estimation of value created by a professional, certified appraiser with no vested interest in the value of the property.

INSPECTION   The examination of a piece of property, its buildings or other amenities.

INSURABLE TITLE   The title to property which has been sufficiently reviewed by a title insurance company, such that they are willing to insure it as free and clear.

INTEREST RATE   A percentage of a loan or mortgage value that is paid to the lender as compensation for loaning funds.

INVESTMENT PROPERTY   Any piece of property that is expected to generate a financial return. This may come as the result of periodic rents or through appreciation of the property value over time.

JAMB   The side of a door frame.

JOINT TENANCY   A situation where two or more parties own a piece of property together. Each of the owners has an equal share, and may not dispose of or alter that share without the consent of the other owners.

JOISTS   Horizontal beams laid on edge to support flooring or a ceiling.

JUDGMENT   An official court decision. If the judgment requires payment from one party to another, the court may put a lien against the payee’s property as collateral.

JUDICIAL FORECLOSURE   A type of foreclosure conducted as a civil suit in a court of law.

JUMBO LOAN   A mortgage loan for an amount greater than the limits set by Fannie Mae and Freddie Mac. Often called non-conforming loans.a REMAX logo

Real Estate 101 Glossary

October 18, 2009

Lola and mea REMAX logoAre you ready for “D” Day?

 

DATE OF APPRAISAL The specific point in time as of which an appraiser designates the value of a home. Often stipulated as the date of inspection.

DEBT  An obligation to repay some amount owed. This may or may not be monetary.

 DEBT EQUITY RATIO The ratio of the amount a mortgagor still owes on a property to the amount of equity they have in the home. Equity is calculated at the fair-market value of the home, less any outstanding mortgage debt.

DEED  A document indicating the ownership of a property.

DEED-IN-LIEU (OF FORECLOSURE)  A document given by a borrower to a lender, transferring title of the property. Often used to avoid credit-damaging foreclosure procedures. DEED OF TRUST  A document which transfers title in a property to a trustee, whose obligations and powers are stipulated. Often used in mortgage transactions.

DEED OF RECONVEYANCE  A document which transfers ownership of a property from a Trustee back to a borrower who has fulfilled the obligations of a mortgage.

DEED OF RELEASE  A document which dismisses a lien or other claim on a property.

 DEED OF SURRENDER  A document used to surrender any claim a person has to a property.

 DEFAULT   The condition in which a borrower has failed to meet the obligations of a loan or mortgage.

DELINQUENCY  The state in which a borrow has failed to meet payment obligations on time.

DEPOSIT  Cash given along with an offer to purchase property, Also called EARNEST MONEY.

 DEPRECIATION  The natural decline in property value due to market forces or depletion of resources.

DETACHED SINGLE-FAMILY HOME  A single building improvement intended to serve as a home for one family.

DISCOUNT POINTS  Points paid in addition to the loan origination fee to get a lower interest rate. One point is equal to one percent of the loan amount.

DISTRESSED PROPERTY A mortgaged property which has been foreclosed on.

DOWN PAYMENT  An amount paid in cash for a property, with the intent to mortgage the remaining amount due.

DOWNSPOUT  The pipe that water moves through to reach the ground from the rain gutter.

DUE-ON-SALE PROVISION  A clause in a mortgage giving the lender the right to demand payment of the full balance when the borrower sells the property.

DUPLEX  A single-building improvement which is divided and provides two units which serve as homes to two families.

 DWELLING A house or other building which serves as a home.

Real Estate Buyer’s 10 Commandments

October 7, 2009

1.  Thou shalt not change jobs, become self-employed or quit your job.

2.  Thou shalt not buy a car, truck or van (or you may be living in it).

3.  Thou shalt not use charge cards excessively or let your accounts fall behind.

4.  Thou shalt not spend money you have set aside for a down payment and closing fees.

5.  Thou Lola and meshalt not omit debts or liabilities on your loan application.

6.  Thou shalt not buy furniture.

7.   Thou shalt not originate any inquiries into your credit.

8.  Thou shalt not make large deposits without first checking with your loan officer.

9.  Thou shalt not change/close bank accounts.

10. Thou shalt not co-sign for anyone.  You may become responsible for the debt.