Posts Tagged ‘mortgages’

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.

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Real Estate 101 Glossary S-V

December 17, 2009

We are coming down to the end of the alphabet.

SALE PRICE   
The actual price a property sells for, exclusive of any special financing concessions.

SALES COMPARISON APPROACH   
An appraisal practice which estimates the value of a property by comparing it to comparable properties which have sold recently.

SCARCITY   
An economic principal that dictates the price of a good or service through the interaction of supply and demand. When an item is scarce, its price tends to rise, given a constant demand. Real Estate is a classic example of scarcity.

SECOND MORTGAGE  
A loan secured by the equity in a home, when a primary mortgage already exists.

SECONDARY MORTGAGE MARKET   
An economic marketplace where mortgage bankers buy and sell existing mortgages.

SECURED LOAN   
A loan that is backed by collateral. In the case of a mortgage loan, the collateral is the house.

SECURITY   
The property used as collateral for a loan.

SEMIDETACHED HOUSING   
Two residences which share a common wall.

SERVICER   
A financial institution which collects mortgage payments from borrowers and applies the appropriate portions to principal, interest and any escrow accounts.

SERVICING   
The processing of payments, mailing of monthly statements, management and disbursement of escrow funds etc Typically carried out by the company you make payments to.

SHEATHING   
The covering on outside walls beneath the siding or exterior finish such as stucco.

SHEETROCK   
Also called drywall, the gypsum board commonly used on interior walls.

SHORT SALE   When a borrower owes more on a mortgage than their home is worth and are financially unable to continue making the mortgage payments.  In order for this to sell, the borrower’s lender would have to agree to take less than it owed on the property and pay seller’s closing fees.

SILL PLATE   
The lumber used around the foundation to support exterior wall framing.

SILL COCK   
Garden hose pipe connection.

SINGLE-FAMILY PROPERTY   
A property designed and built to support the habitation of one family.

SOFFIT  
The underside of a cornice at the eaves.

STUCCO   
A textured plaster exterior (and occasionally interior) wall finish.

STUD   
A vertical framing piece in a wall, generally 2×4 lumber in interior walls.

SUBDIVISION   
A residential development that is created from a piece of land which has been subdivided into individual lots.

SUBJECT PROPERTY   
A term which indicates a property which is being appraised.

SUMP   
A basin into which water drains and from which the water is pumped out.

SURVEY   
A specific map of a piece of property which includes the legal boundaries and any improvements or features of the land. Surveys also depict any rights-of-way, encroachments or easements.

SWEAT EQUITY   
The method whereby a home owner develops equity in a property, either during the purchase or throughout its life, by personally constructing improvements rather than paying to have them built.

TAX-EXEMPT PROPERTY   
Any property which is not taxed.

TENANCY   Back to top
The right to occupy a building or unit.

TENANCY IN COMMON   
A form of holding title, whereby there are two or more people on title to a property, ownership does not pass on to the others upon the death of one individual.

THIRD PARTY ORIGINATION   
When a lender uses a third party to originate and package loans for sale to the secondary market (Fannie Mae, Freddie Mac).

TITLE   
A specific document which serves as proof of ownership.

TITLE COMPANY   
An organization which researches and certifies ownership of real estate before it is bought or sold. Title companies also act at the facilitator ensures all parties are paid during the real estate transaction.

TITLE INSURANCE   
A policy which insures a property owner should a prior claim arise against the property after the purchase has been completed. This also covers a lender should a question of ownership arise.

TITLE SEARCH   
The process whereby the TITLE COMPANY researches a properties title history and ensures that no outstanding claims exist.

TRANSFER OF OWNERSHIP   
Any means by which the ownership of a property changes hands.

TRANSFER OF TAX   
Taxes payable when title passes from one owner to another.

TRAP   
A bend in water pipe.

TRUSTEE   
A fiduciary that holds or controls property for the benefit of another.

TRUTH IN LENDING   
A federal law requiring full disclosure by lenders to borrowers of all terms, conditions and costs of a mortgage.

TUDOR   
A style of architecture typified by exposed stone, wood and brick construction. Similar in style to English manor homes.

UNDER IMPROVED LAND   
A piece of land which has been improved, but not to the full extent of its potential.

UNENCUMBERED PROPERTY   
Any property which has no outstanding claims or liens against it.

UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE (USPAP)   
Developed in 1986 by the Ad Hoc Committee on Uniform Standards and copyrighted in 1987 by The Appraisal Foundation, USPAP forms the guidelines followed by every licensed and certified real estate appraiser in the United States. The purpose of these Standards is to establish requirements for professional appraisal practice, which includes appraisal, appraisal review, and appraisal consulting. The intent of these Standards is to promote and maintain a high level of public trust in professional appraisal practice.

USEFUL LIFE   
The span of time over which a property can be used or can provide benefits to its owner.

VACANCY RATE   
The current percentage of vacant properties in a given area, regardless of why they are vacant.

VA MORTGAGE   
A mortgage that is guaranteed by the Department of Veterans Affairs (VA).

VARIANCE   
An exception to municipal zoning regulations granted for a specific time period to allow for non-conforming use of the land.

VENT PIPE   
A pipe allowing gas to escape.

VESTED   
Having the right to use a portion of a fund such as an IRA. Typically vesting occurs over time. If you are 100% vested, you have a right to 100% of the fund.

VETERANS AFFAIRS, DEPARTMENT OF (VA)   
The successor to the Veteran’s Administration, this government agency is responsible for ensuring the rights and welfare of our nation’s veterans and their dependents. Among other duties, the VA insures home loans made to veterans.

VOLTAGE  
An expression of electric force, or pressure. One volt being the force needed to move one amp against one ohm resistance.

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 Estate 101 Glossary “G & H”

November 2, 2009

Lola and me!cid_image6I am combining these two today.  Enjoy

GABLE ROOF   A steeply angled, triangular roof.

GALVANIZED PIPE  Iron pipe with a galvanized (zinc) coating.

GAMBREL ROOF  A ”barn-like” roof, where the upper portion of the roof is less-steeply angled than the lower part.

GENERAL LIEN  A broad-based claim against several properties owned by a defaulting party.

GEORGIAN   A classic, English-style hose characterized by simple rectangular shape and multiple stories.

GFI   Ground Fault Interrupter. A type of circuit breaker required in areas where water is present.

GINNIE MAE   A wholly owned corporation created in 1968 within the U.S. Department of Housing and Urban Development to serve low-to moderate-income homebuyers.

GIRDER   A main supporting beam.

GOVERNMENT MORTGAGE  
Any mortgage insured by a government agency, such as the FHA or VA.

GRADE   The slope of land around a building. Also ground level.

GRANTEE   Any person who is given ownership of a piece of property.

GRANTOR   Any person who gives away ownership of a piece of property.

GROSS AREA   
The sum total of all floor space, including areas such as stairways and closet space. Often measured based on external wall lengths.

GROUTING   Material used around ceramic tile.

GUTTER The trough around the edge of the roof that catches and diverts rain.

HALF-SECTION   320 acres.

HAZARD INSURANCE   
Insurance covering damage to a property caused by hazards such as fire, wind and accident.

HEADER   
The framing elements above an opening such as a window or door.

HEARTH   
The floor of a fireplace or the area immediately in front of it.

HEIGHT ZONING   A municipal restriction on the maximum height of any building or other structure.

HIDDEN AMENITIES   
Assets of a property which contribute to its value, but are not readily apparent. Examples might include upgraded or premium building materials.

HIGHEST AND BEST USE   The most profitable and likely use of a property. Selected from reasonably probable and legal alternative uses, which are found to be physically possible, appropriately supported and financially feasible to result in the highest possible land value.

HOME EQUITY CONVERSION MORTGAGE (HECM)   
Also known as a reverse annuity mortgage. It allows home owners (usually older) to convert equity in the home into cash. Normally paid by the lender in monthly payments. HECM’s typically do not have to be repaid until the borrower is no longer occupying the home.

HOME EQUITY LINE OF CREDIT   
A type of mortgage loan that allows the borrower to draw cash against the equity in his home.

HOME INSPECTION   
A complete examination of a building to determine its structural integrity and uncover any defects in materials or workmanship which may adversely affect the property or decrease its value.

HOME INSPECTOR   A person who performs professional home inspections. Usually, with an extensive knowledge of house construction methods, common house problems, how to identify those problems and how to correct them.

HOMEOWNER’S ASSOCIATION   
An organization of home owners in a particular neighborhood or development formed to facilitate the maintenance of common areas and to enforce any building restrictions or covenants.

HOMEOWNER’S INSURANCE   
A policy which covers a home owner for any loss of property due to accident, intrusion or hazard.

HOMEOWNER’S WARRANTY   
An insurance policy covering the repair of systems and appliances within the home for the coverage period.

HUD MEDIAN INCOME   
Median family income for a particular county or metropolitan statistical area (MSA), as estimated by the Department of Housing and Urban Development (HUD).

HUD-1 STATEMENT   A standardized, itemized list, published by the U.S. Department of Housing and Urban Development (HUD), of all anticipated CLOSING COSTS connected with a particular property purchase.

Tax Credit Extended

October 29, 2009

Lola and meYeah

a REMAX logo Senators agreed Wednesday to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers. The tax credit provides up to $8,000 to first-time homebuyers but is set to expire at the end of November. The Commerce Department said Wednesday that new home sales fell 3.6 percent in September, and some industry representatives blamed uncertainty about the tax credit. Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev. The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, according to a summary of the legislation being circulated among lawmakers. House leaders have said they support extending the tax credit for homebuyers. Sen. Chris Dodd, D-Conn., has been negotiating for several weeks with Sen. Johnny Isakson, R-Ga., to craft an extended tax credit for homebuyers that would pass the Senate. Lawmakers didn’t release a cost estimate for extending the tax credit, though similar proposals were projected to cost about $10 billion. Industry representatives said uncertainty about the tax credit is hurting new home sales. September’s decline was the first since March. It takes 45 days to 60 days to close on a house, making it unlikely a sale made today would be consummated by the end of November, said Lucien Salvant, spokesman for the National Association of Realtors. “Buyers right now have an incentive to hold off, not knowing whether the credit will be extended,” Salvant said. About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

Real Estate 101 Glossary

October 21, 2009

Lola and mea REMAX logo

Give me an “E”

EARNEST MONEY DEPOSIT  A cash deposit made to a home seller to secure an offer to buy the property. This amount is often forfeited if the buyer decides to withdraw his offer, after contingencies are removed.

EASEMENT  The right of a non-owner of property to exert control over a portion or all of the property. For example, power companies often own an easement over residential properties for access to their power lines.

EAVE  The part of the roof that extends beyond the exterior wall.

ECONOMIC DEPRECIATION  The decline in property value caused by external forces, such as neighborhood blight or adverse development.

ECONOMIC LIFE The amount of time which any income-producing property is able to provide benefits to its owner.

EFFECTIVE AGE  The subjective, estimated age of a property based on its condition, rather than the actual time since it was built. Excessive wear and tear can cause a property’s effective age to be greater than its actual age.

 EMINENT DOMAIN The legal process whereby a government can take ownership of a piece of property in order to convert it to public use. Often, the property owner is paid fair-market value for the property.

ENCROACHMENT  A building or other improvement on one property which invades another property or restricts its usage.

ENCUMBRANCE  A claim against a property. Examples are mortgages, liens and easements.

 ENERGY EFFICIENCY RATIO  An efficiency rating system for air conditioning units that corresponds to the number of BTU’s output per watt of electricity used.

EQUAL CREDIT OPPORTUNITY ACT (ECOA)  U.S. federal law requiring that lenders afford people equal chance of getting credit without discrimination based on race, religion, age, sex etc.

EQUITY  The difference between the fair market value of a property and that amount an owner owes on any mortgages or loans secured by the property.

EQUITY BUILDUP  The natural increase in the amount of equity an owner has in a property, accumulated through market appreciation and debt repayment.

ERRORS AND OMISSIONS INSURANCE  (E & O) An insurance policy taken out by appraisers to cover their liability for any mistakes made during the appraisal process.  Other’s,  such as real estate agents, mortgage brokers, ect. pay for  E and O insurance

ESCROW  An amount retained by a third party in a trust to meet a future obligation. Often used in the payment of annual taxes or insurance for real property.  Also, the independent third party that exchanges the buyer’s money for the seller’s deed in the sale of real property.

ESCROW ACCOUNT  An account setup by a mortgage servicing company to hold funds with which to pay expenses such as homeowners insurance and property taxes. An extra amount is paid with regular principal and interest payments that go into the escrow account each month.

ESCROW ANALYSIS  An analysis performed by the lender usually once each year to see that the amount of money going into the escrow account each month is correct for the forecasted expenses.

ESCROW DISBURSEMENTS  The payout of funds from an escrow account to pay property expenses such as taxes and insurance.

ESTATE  The total of all property and assets owned by an individual.

EXAMINATION OF TITLE  The report on the title of a property from the public records or an abstract of the title.

EXCLUSIVE LISTING  An agreement between the owner of a property and a real estate broker giving the broker exclusive right to sell the property. 

EXECUTOR  The person named in a will to administer the estate.

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.

$8,000 Tax Credit Toward Purchase of New Home

May 29, 2009

a REMAX logoDONOVAN ANNOUNCES RECOVERY ACT’S HOMEBUYER TAX CREDIT CAN IMMEDIATELY HELP THOUSANDS OF FIRST-TIME HOMEBUYERS TO BUY A HOME FHA plan will stimulate new home sales and help stabilize housing market WASHINGTON – Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration’s new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today’s action will help stabilize the nation’s housing market by stimulating home sales across the country. The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today’s announcement details FHA’s rules allowing state Housing Finance Agencies and certain non-profits to “monetize” up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA’s new mortgagee letter, visit HUD’s website. “We believe this is a real win for everyone,” said Donovan. “Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation’s housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we’re doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing.” Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today’s announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower’s own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. Today’s action permits the first-time homebuyer’s anticipated tax credit under the Recovery Act to be applied toward the family’s home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit. According to estimates by the National Association of Home Builders, the Administration’s homebuyer tax credit will stimulate 160,000 home sales across the nation – 101,000 of which will be first-time buyers who will receive the credit. Another 59,000 existing homeowners will be able to buy another home because a first-time buyer purchased their home. Given FHA’s current market share, it’s estimated that thousands of families will be able to purchase a home by allowing the anticipated tax credit to be applied toward their purchase together with an FHA-insured mortgage. Homebuyers should beware of mortgage scams and carefully compare benefits and costs when seeking out tax credit monetization services. Programs will vary from organization to organization and borrowers should consider whether the services make sense for them, as well as what company offers the most suitable and affordable option. For every FHA borrower who is assisted through the tax credit program, FHA will collect the name and employer identification number of the organization providing the service as well as associated fees and charges. FHA will use this information to track the business closely and will refer any questionable practices to the appropriate regulatory agencies, as necessary.

Tips on Hiring a Contractor

May 27, 2009

a REMAX logoContractors Ten Tips from the California State Licensing Board

1. Hire only state-licensed contractors.

2. Check a contractor’s license number online at www.cslb.gov or call 800-321-2752

3. Get at least three bids.

4. Get three references from each bidder and review past work in person.

5. Make sure all project expectations are in writing and only sign the contract if you completely understand the terms.

6. Confirm that the contractor has workers’ compensation insurance for employees.

7. Never pay more than 10% down or $1,000, whichever is less.  Do not pay in cash.

8. Do not let payments get ahead of the work.

9. Keep a job file of all papers relating to your project, including all payments.

10. Do not make the final payment until your are satisfied with the job.