A large part of buying a new home is obtaining financing for the property. Working with a good lender to ensure getting the best interest rate is very important. I have a few great lenders in the Yuba City area that I can recommend. I thought that the article below has some great information about understanding the different aspects and terms of a loan. I hope you find it useful.
Article pulled from Yahoo Real Estate:
Not only do you have to understand what type of mortgage you should choose, you have to understand the costs associated with your mortgage. All of these costs will be paid upon closing your mortgage.
Purchase Points
Purchase points, also known as a "buy-down" or "discount points," are an up-front fee paid to the lender at closing to buy-down or lower your interest rate over the life of the loan. Each point is equal to one percent of your total loan amount. If you have a $100,000 loan, one point would equal $1,000. The more points you buy, the lower your interest rate, but the more money you'll need at closing.
How do you decide whether you should buy points and if so, how many? Well, the decision should be based on how long you plan on living in your home and what you can afford to pay each month toward your mortgage. If you plan on living in your home for more than five years, it's probably a good idea to purchase points. The longer you live in your home, the more you can save on interest over the life of the loan.
Interest Rate
When you get a mortgage, you are charged an interest rate.this is the rate which the lender charges you for using their money to buy a home. It determines how much your monthly payments will be. Generally speaking, the higher the interest rate, the higher your monthly payment.
Mortgage interest rates change constantly.daily, even hourly. If you speak to a lender and are quoted a specific interest rate, that's not to say you'll necessarily get that rate when you close on your loan. Not unless you formally lock-in that rate with the lender.locking in an interest rate will guarantee you get your loan with a particular interest rate. Lenders will allow you to lock in for 15, 45 or 60 days. But the longer you lock in, the more expensive it will be, since it's more of a risk to lenders.
Fees
There are always fees associated with getting a mortgage, these fees cover the cost of processing and underwriting the loan. These fees can include charges for ensuring the title to the home is free and clear; paying for a land survey; or paying for a home appraisal which gives you the estimated value of the property (lenders require an appraisal to close on your mortgage).
Deciding which mortgage to get may depend on what each lender does because different lenders may charge different amounts. Some may charge lesser closing fees to lure you in, but may charge you a higher interest rate, which means you may pay more in the long run. But everyone has different needs.you may or may not be able to afford to pay more at closing and are willing to pay more over the long term.
Before it comes time to close, do your homework, make sure there are no hidden fees, and ask your lender lots of questions so that you understand all the costs involved with your mortgage.
*Please consult your tax advisor
Friday, February 13, 2009
Thursday, February 12, 2009
First Time Buyers- Great Time to Buy
I was reading the Wall Street journal today, and thought that this was a great article about first time homebuyers. Let me know what you think.
Printed in The Wall Street Journal, page D1
By MARY PILON
For years, even as her friends bought huge houses in the expensive Phoenix market, Elizabeth Child remained a renter.
But in January, the airline customer-service agent and her boyfriend closed on their first home. The three-bedroom, two-bath house, complete with granite countertops and a pool, had been listed for $340,000 in late 2007, but the couple bought it for $220,500. "Six months ago I didn't think I would own a home," says Ms. Child, 27 years old. "And now I do. It's so perfect."
Mark Peterman for The Wall Street Journal
Elizabeth Child and William McGeary were able to buy their first home after prices in Phoenix dropped sharply. The housing bust is creating a new group of winners: first-time home buyers. People who sat on the sidelines -- often watching wistfully as their friends became homeowners -- are suddenly in a position to grab some great deals. Indeed, first-time home buyers made up 41% of all buyers at the end of 2008, up from 36% in 2006, according to a recent survey from the National Association of Realtors.
The new buyers are being lured in by home prices that are down about 25% from their peak levels in mid-2006, according to the S&P/Case-Schiller Index. In some markets, prices have dropped even further -- slumping around 40% in Phoenix, Miami and Las Vegas. Lower mortgage rates have also helped make real estate more affordable, and as houses languish on the market longer, more homeowners are willing to negotiate. With Congress considering plans to sweeten a tax credit for first-time home buyers, the picture could get even brighter.
"Buyers are now coming back into those hard-hit markets to take advantage," says Lawrence Yun, chief economist for the Realtors' association. "It's a buyer's market."
Write to Mary Pilon at mary.pilon@wsj.com
Printed in The Wall Street Journal, page D1
Printed in The Wall Street Journal, page D1
By MARY PILON
For years, even as her friends bought huge houses in the expensive Phoenix market, Elizabeth Child remained a renter.
But in January, the airline customer-service agent and her boyfriend closed on their first home. The three-bedroom, two-bath house, complete with granite countertops and a pool, had been listed for $340,000 in late 2007, but the couple bought it for $220,500. "Six months ago I didn't think I would own a home," says Ms. Child, 27 years old. "And now I do. It's so perfect."
Mark Peterman for The Wall Street Journal
Elizabeth Child and William McGeary were able to buy their first home after prices in Phoenix dropped sharply. The housing bust is creating a new group of winners: first-time home buyers. People who sat on the sidelines -- often watching wistfully as their friends became homeowners -- are suddenly in a position to grab some great deals. Indeed, first-time home buyers made up 41% of all buyers at the end of 2008, up from 36% in 2006, according to a recent survey from the National Association of Realtors.
The new buyers are being lured in by home prices that are down about 25% from their peak levels in mid-2006, according to the S&P/Case-Schiller Index. In some markets, prices have dropped even further -- slumping around 40% in Phoenix, Miami and Las Vegas. Lower mortgage rates have also helped make real estate more affordable, and as houses languish on the market longer, more homeowners are willing to negotiate. With Congress considering plans to sweeten a tax credit for first-time home buyers, the picture could get even brighter.
"Buyers are now coming back into those hard-hit markets to take advantage," says Lawrence Yun, chief economist for the Realtors' association. "It's a buyer's market."
Write to Mary Pilon at mary.pilon@wsj.com
Printed in The Wall Street Journal, page D1
Fannie Eases Its Investor Loan Rules
To speed recovery of the housing market, Fannie Mae in March will begin purchasing and guaranteeing mortgages for borrowers carrying loans on as many as nine other properties, up from the current limit of three.
However, the number of months of reserve payments that must be held by investors will rise to six in June from two currently.
However, the number of months of reserve payments that must be held by investors will rise to six in June from two currently.
Wednesday, February 11, 2009
Renting vs Home Ownership
Are you a Renter wondering about the benefit that can come from Home Ownership? Here’s some things to consider:
(1) Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, property taxes you pay, and some of the costs involved in buying your home.
(2) Gains. Between 1998 and 2002, national home prices increased at an average of 5.4 percent annually. And while there’s no guarantee of appreciation, a 2001 study by the NATIONAL ASSOCIATION OF REALTORS found that a typical homeowner has approximately $50,000 of unrealized gain in a home.
(3) Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.
(4) Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.
(5) Predictability. Unlike rent, your mortgage payments don’t go up over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will rise.
(6) Freedom. The home is yours. You can decorate any way you want and be able to benefit from your investment for as long as you own the home.
(7) Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.
To calculate whether renting or buying is the best financial option for you, use the link below to access calculator courtesy of Ginnie Mae.
Rent Vs. Buy Calculator
(1) Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, property taxes you pay, and some of the costs involved in buying your home.
(2) Gains. Between 1998 and 2002, national home prices increased at an average of 5.4 percent annually. And while there’s no guarantee of appreciation, a 2001 study by the NATIONAL ASSOCIATION OF REALTORS found that a typical homeowner has approximately $50,000 of unrealized gain in a home.
(3) Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.
(4) Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.
(5) Predictability. Unlike rent, your mortgage payments don’t go up over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will rise.
(6) Freedom. The home is yours. You can decorate any way you want and be able to benefit from your investment for as long as you own the home.
(7) Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.
To calculate whether renting or buying is the best financial option for you, use the link below to access calculator courtesy of Ginnie Mae.
Rent Vs. Buy Calculator
Sunday, February 8, 2009
Virtual Tours
Home sales rising in weak market
Foreclosures and a three-year price plunge continue to drive a rise in home sales in the Mid-Valley and elsewhere in recession-wracked California.
Yuba and Sutter counties more than doubled the number of freestanding houses sold in December compared to a year earlier, according to a report Wednesday from MDA DataQuick of San Diego.
Eighty-five houses changed hands last month in Yuba County — down from 106 in November but well above the 40 sold in December 2007. In Sutter County, 103 houses were sold in December, up from 89 in November and 43 the previous December.
A glut of foreclosed homes has slashed median home prices in Yuba-Sutter and throughout the Central Valley, as defaults have mounted on high-risk mortgage loans that linked artificially low early payments to much larger ones later. DataQuick reported an 48 percent jump in home sales across California from a year earlier, to 38,000 houses and condominiums.
Median home prices dropped to $170,000 in Sutter County and $152,000 in Yuba County, extending a three-year tumble of sale prices from their 2005 peaks north of $300,000. Those values remain well below the statewide $249,000 median, itself down more than $150,000 over the past year.
Homes seized by banks from insolvent owners dominate the Mid-Valley market, accounting for 79.1 percent of Yuba County sales and 64.8 of those in Sutter County. Private sellers' need to compete with the "foreclosure price" have put banks in charge of price levels and kept them low, according to Lloyd Leighton, owner of Lloyd Leighton Realtors in Yuba City.
"The foreclosures are the market," he said Thursday. "Anyone who wants to be a seller in today's market has to be willing to compete with the foreclosures."
Subprime mortgages' role in the collapsing real estate market has radically shifted housing demand, steering it toward modestly sized and priced homes and away from the newer and larger houses that commanded a half-million dollars or more at the local market's peak.
Mid-Valley brokers reported stronger demand for houses smaller than 2,000 square feet and below $200,000, while late-model luxury homes continue to languish — partly because of lenders' unwillingness to extend "jumbo loans" above $417,000.
With the drying-up of easy loans — some of which effectively accepted borrowers' stated incomes on the honor system — that drove up home buying in the 2000s, buyers must rely more on federally backed loans that demand stricter proof of ability to make the monthly payments, said Sarah Becker of RE/MAX Gold in Yuba City.
"We're seeing a lot more homes bought with government loans, which are harder to obtain," said Becker. "Probably 80 percent of the offers are made (with financing from) the (Federal Home Administration) now. Three years ago, we wouldn't see even one FHA deal out of 100 offers."
California's 523,624 foreclosed homes were the most in the U.S. in 2008 and placed the Golden State third in the percentage of houses in default, behind Florida and Arizona, according to RealtyTrac Inc., another real estate research service.
SINGLE-FAMILY HOMES
Sutter County
• December: 103
• November: 89
• December 2007: 43
Yuba County
• December: 85
• November: 106
• December 2007: 40
MEDIAN HOME PRICES
Sutter County
• December: $170,000
• November: $170,000
• December 2007: $235,000
Yuba County
• December: $152,000
• November: $155,000
• December 2007: $217,000
PERCENTAGE OF SALES FROM FORECLOSURES
Sutter County
• December: 64.8
• November: 69.9
• December 2007: 44.4
Yuba County
• December: 79.1
• November: 72.6
• December 2007: 37.8
By Howard Yune/Appeal-Democrat
Yuba and Sutter counties more than doubled the number of freestanding houses sold in December compared to a year earlier, according to a report Wednesday from MDA DataQuick of San Diego.
Eighty-five houses changed hands last month in Yuba County — down from 106 in November but well above the 40 sold in December 2007. In Sutter County, 103 houses were sold in December, up from 89 in November and 43 the previous December.
A glut of foreclosed homes has slashed median home prices in Yuba-Sutter and throughout the Central Valley, as defaults have mounted on high-risk mortgage loans that linked artificially low early payments to much larger ones later. DataQuick reported an 48 percent jump in home sales across California from a year earlier, to 38,000 houses and condominiums.
Median home prices dropped to $170,000 in Sutter County and $152,000 in Yuba County, extending a three-year tumble of sale prices from their 2005 peaks north of $300,000. Those values remain well below the statewide $249,000 median, itself down more than $150,000 over the past year.
Homes seized by banks from insolvent owners dominate the Mid-Valley market, accounting for 79.1 percent of Yuba County sales and 64.8 of those in Sutter County. Private sellers' need to compete with the "foreclosure price" have put banks in charge of price levels and kept them low, according to Lloyd Leighton, owner of Lloyd Leighton Realtors in Yuba City.
"The foreclosures are the market," he said Thursday. "Anyone who wants to be a seller in today's market has to be willing to compete with the foreclosures."
Subprime mortgages' role in the collapsing real estate market has radically shifted housing demand, steering it toward modestly sized and priced homes and away from the newer and larger houses that commanded a half-million dollars or more at the local market's peak.
Mid-Valley brokers reported stronger demand for houses smaller than 2,000 square feet and below $200,000, while late-model luxury homes continue to languish — partly because of lenders' unwillingness to extend "jumbo loans" above $417,000.
With the drying-up of easy loans — some of which effectively accepted borrowers' stated incomes on the honor system — that drove up home buying in the 2000s, buyers must rely more on federally backed loans that demand stricter proof of ability to make the monthly payments, said Sarah Becker of RE/MAX Gold in Yuba City.
"We're seeing a lot more homes bought with government loans, which are harder to obtain," said Becker. "Probably 80 percent of the offers are made (with financing from) the (Federal Home Administration) now. Three years ago, we wouldn't see even one FHA deal out of 100 offers."
California's 523,624 foreclosed homes were the most in the U.S. in 2008 and placed the Golden State third in the percentage of houses in default, behind Florida and Arizona, according to RealtyTrac Inc., another real estate research service.
SINGLE-FAMILY HOMES
Sutter County
• December: 103
• November: 89
• December 2007: 43
Yuba County
• December: 85
• November: 106
• December 2007: 40
MEDIAN HOME PRICES
Sutter County
• December: $170,000
• November: $170,000
• December 2007: $235,000
Yuba County
• December: $152,000
• November: $155,000
• December 2007: $217,000
PERCENTAGE OF SALES FROM FORECLOSURES
Sutter County
• December: 64.8
• November: 69.9
• December 2007: 44.4
Yuba County
• December: 79.1
• November: 72.6
• December 2007: 37.8
By Howard Yune/Appeal-Democrat
Selling your home
Selling your home in today’s declining market is tough, that’s why you need to have an experienced team to facilitate the sale of your home. In 2008, The Sandgren Real Estate sold 67 homes in the Yuba and Sutter area. When selling your home in a declining market price is very important. Interest rates are still historically low and buyers are looking for “a good deal”. The majority of the properties on the market are bank owned properties or REO’s that are priced at or below market value in order to generate a quick sale. Pricing your home competitive with these REO’s is imperative. Condition also plays a large role in the sale of your home. Because many of the properties on the market are REO’s, buyers are used to viewing homes that need some work. A well taken care of home will often generate more interest and command a slightly higher price.
When looking for a Realtor to help sell your home, be sure to ask about their marketing strategies. While placing the home on the MLS is important, its only one facet of an experienced realtors marketing plan. Did you know that over 80% of home buyers look at the internet first for homes before doing anything else? This is why The Sandgren Real Estate group focuses our marketing effort online. All of our home listings get a professionally done Virtual Tour (Sample Virtual Tours). These virtual tours help you appreciate the beauty and important features about your home as well as move your home higher when buyers do search’s on sites such Google and Realtor.com. We also create a video of your home that’s placed on YouTube. Video provides another great medium for potential buyers to find and view your home. Here is a sample video that we have created:
1015 Martin Ct, Yuba City CA
How many other Realtors do you know that include this service as part of their standard marketing plan? When selling your home it is not only important to market your home to potential buyers, but to other Real Estate Agents in the community as well. The majority of the time, the buyer for your home will already be working with a Realtor. This is why it is imperative that the agent selling your home has a good reputation and working relationship with the other top producing Realtors. The Sandgren Real Estate Team always attends the weekly association of realtors meeting. If your home is a new to the market, it will also be placed on the Brokers Tour. This tour occurs on Tuesdays and allows other agents to walk thru your home. It is typical to get between 15 and 30 agents viewing your property in a single day and a great way to generate extra exposure to the market. You would be surprised at how many of these broker tours result in Purchase Offers for your home.
If you’re thinking of selling your home and would like to get a good idea about the value of your home or to just looking to discuss your options, please fill out the form below and we will contact you as soon as possible. You can also call us anytime, Derek (530) 844-0505 or Brian (530) 300-2420. We look forward to hearing from you.
When looking for a Realtor to help sell your home, be sure to ask about their marketing strategies. While placing the home on the MLS is important, its only one facet of an experienced realtors marketing plan. Did you know that over 80% of home buyers look at the internet first for homes before doing anything else? This is why The Sandgren Real Estate group focuses our marketing effort online. All of our home listings get a professionally done Virtual Tour (Sample Virtual Tours). These virtual tours help you appreciate the beauty and important features about your home as well as move your home higher when buyers do search’s on sites such Google and Realtor.com. We also create a video of your home that’s placed on YouTube. Video provides another great medium for potential buyers to find and view your home. Here is a sample video that we have created:
1015 Martin Ct, Yuba City CA
How many other Realtors do you know that include this service as part of their standard marketing plan? When selling your home it is not only important to market your home to potential buyers, but to other Real Estate Agents in the community as well. The majority of the time, the buyer for your home will already be working with a Realtor. This is why it is imperative that the agent selling your home has a good reputation and working relationship with the other top producing Realtors. The Sandgren Real Estate Team always attends the weekly association of realtors meeting. If your home is a new to the market, it will also be placed on the Brokers Tour. This tour occurs on Tuesdays and allows other agents to walk thru your home. It is typical to get between 15 and 30 agents viewing your property in a single day and a great way to generate extra exposure to the market. You would be surprised at how many of these broker tours result in Purchase Offers for your home.
If you’re thinking of selling your home and would like to get a good idea about the value of your home or to just looking to discuss your options, please fill out the form below and we will contact you as soon as possible. You can also call us anytime, Derek (530) 844-0505 or Brian (530) 300-2420. We look forward to hearing from you.
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