FAMOUS REAL ESTATE ALL AROUND US

FAMOUS REAL ESTATE ALL AROUND US
By Jaymi Naciri

he arrival of Punxsutawney Phil on Groundhog's Day in Punxsutawney, PA - a town made famous for its annual visitor and his shadow (or lack thereof) - got us thinking about other famous places. And famous houses. And before we knew it we were looking at pics of homes that were made famous in the movies and iconic TV homes or homes that were notable ...- because of who lived there or because a murder occurred there, or a murder was filmed there and... well, you can read about it all below.
We're exploring it all - the good, the bad, the famous, the ghoulish, and the groundhogish.

1. Punxsutawney, PA's "most famous resident" is Punxsutawney Phil, a groundhog said to predict the weather annually on Groundhog Day (February 2)," said Wikipedia. But there are approximately 6,000 other full-time residents who make their home in this 3.4-square-mile city.
Punxsutawney is filled with "pre-World War II architecture," said Neighborhood Scout, "making it one of the older and more historic boroughs in the country." Properties for sale range from a one-bedroom, 733-square foot home for $24,000 to a five-bedroom home on a 53-acre ranch priced at $425,000.

2. Almost all of the movie Groundhog Day was actually filmed in Woodstock, Illinois).

3. The city of Gotham, as portrayed in the Batman movies, is fictional. And despite the fact that Gotham was described by Batman: The Dark Knight Returns writer Frank Miller as "New York City at night," according to Wikipedia, it wasn't based on New York at all. "It was originally strongly inspired by Trenton, Ontario's history, location, atmosphere, and various architectural styles, and has since incorporated elements from New York City, Detroit, Pittsburgh, London and Chicago," said Wikipedia.

4. Wayne Manor would cost more than $32 million. That is the assessment of The Independent. "Using floor plans from a 1990s role-playing game (and using other famous people's home, such as Michael Jordan's as a guide), they put the value of 1007 Mountain Drive, Gotham, at around $32,100,000, excluding the Batcave and it's cave-front water access which they suggest would probably not be included in the sale."

5. A little too steep? The Independent priced another, more affordable, gem: "Barbie's dream house in Malibu would cost a little under $18,000."

6. Perhaps homes featured in animated films are more your speed. You can own a house that looks just like the real-life Up! House... if you can kick out the current owners.

Or, get in contact with developer Bangerter Homes, who (with permission), built it in Herriman, Utah. "The house, which is a full-scale replica of the home in the Disney/Pixar movie "Up", was originally built... to be part of the 2011 Salt Lake City Parade of Homes but became a tourist attraction that has brought more than 1000 people a week through suburban Herriman," said Jaunted.
You can see more pics of the house here.

7. Sometimes you can get a house for a song, if you're willing to live at the scene of a murder. The "stunning, 2,000-square foot split-level home atop a rocky hill on a two-acre lot deep in the woods near the town of Bath (Ohio)" seemed like a steal at $269,000," said MSN. And it was, for a house that "had been the childhood home of serial murderer Jeffrey Dahmer" and also the place that the serial killer committed his first murder.
Ultimately, a great price for a great home trumped the oogie factor. The buyer made a lowball offer at $245,000, which was accepted.

8. The Beverly Hills house that William Randolph Hearst lived in was also the honeymoon spot of Jackie and John F. Kennedy, was the set of the Godfather, and was also featured in The Bodyguard, said MSN.
Bring your giant family to fill the home's 29 bedrooms (and two guest houses, an apartment, an Art Deco nightclub, a cinema, plus an outdoor terrace with room for 400 guests, in 50,000 square feet, per MSN), and your giant bank account. The L.A. home that was once listed for $165 million today rents for $600,000 a month.

9. You can make an argument about the Brady Bunch house being the most recognizable house in the world. The 2,500-square-foot home in North Hollywood, CA still stands today, looking every bit as brown and suburban and middle classy as it ever did, only now with the addition of a (very necessary) fence around the perimeter. The home, which sold in 1973 for $61,000, was listed for sale in 2008 at $2 million. It was taken off the market shortly after.
10. Still obsessed with the Brady House? You can build your own! Check out the floorplans here. And don't forget the orange countertops.

One thing you should do before refinancing

One thing you should do before refinancing

 It may seem counterintuitive, but sprucing up your home is important. Here's why.

 By Jeff Brown

Thinking about refinancing? Before you do, put some time and effort — and some money too — into sprucing up.
For anyone selling a home, sprucing up is a no-brainer. Repairs, upgrades, painting and landscaping can raise the sales price. But homeowners who are staying put and refinancing often don't bother with these improvements. If you're not looking for a buyer and have years to get around to these things, why bother?
Because the home's condition will be reflected in the lender's appraisal, which will determine whether you get the new mortgage and how large it can be.

Appraisals start with an analysis of comparable sales data — the prices of nearby homes that have sold recently. Homes that have merely been refinanced are not included. Because most home sellers do spruce up, the comparable prices likely reflect homes in good to excellent condition.

In the second step, the appraiser makes adjustments for differences between the home and what he or she believes to be the standard among the comparables. So if you have a kitchen from the 1970s, and the recently sold homes were more up to date, your appraised value will suffer.

After all, the point of the appraisal is to make sure the home is valuable enough to serve as collateral on the loan. The homeowner may perceive the "value" as including all those nagging improvement plans as if they'd be done, as they surely would be before a sale. But the lender wants to know what the home would fetch as is, in case it had to be unloaded after a foreclosure.
A homeowner with enough financial troubles to land in foreclosure is unlikely to spend big money on repairs and improvements.

The risk of a low appraisal is especially serious for the homeowner who wants to replace an older mortgage, because the new loan typically must be large enough to pay off the old one. Despite rising home prices in the past couple of years, many homes are still worth less than their owners paid for them seven or eight years ago. In those cases, homeowners need to squeeze every dollar they can out of the appraisal. At a minimum, a rejected application will cost hundreds of dollars on appraisal fees and other upfront charges.

Homeowners looking for a "cash-out refinancing" have more flexibility, because they can choose to borrow less. Typically, they own the home free of a mortgage or have an older mortgage with a balance well below the home's current value. For them, a low appraisal will not prevent the new financing but will limit the cash they can take out of the home.

Whatever your reason for refinancing, the first step is a little research into recent sales prices in the neighborhood using sites such as realtor.com, Trulia.com and Zillow.com. Because prices have been changing rapidly, try to find sales from the past six months or less.

Then take a realistic look at your home's shortcomings and decide which ones to tackle.

Unfortunately, many improvements fail to add as much value as they cost, so it probably would not pay to install a whole new kitchen just to get a higher appraisal.

Tidying up, painting, trimming the shrubs and other low-cost jobs are definitely worth doing. And looking at your home from a buyer's perspective can help you see it from an appraiser's.

All-cash offers crushing first-time homebuyers

All-cash offers crushing first-time homebuyers
By Diana Olick

Morgan and Tyler Brasfield are "dying" to buy a home, especially since the birth of their second child six months ago. Unfortunately they just don't have the cash to compete in today's San Francisco housing market, so they continue to rent.

"People are coming in with full-cash offers that are significantly higher than asking," said Morgan, as she corralled her two-year-old on the playground. "So if you find a home for a little over a million, which would be a fixer-upper here, you can expect to pay two to three hundred thousand more than asking."

But even if they were looking in a less pricey, less competitive area, Morgan admits they would still have trouble coming up with the down payment; Tyler, who is now working in finance, just graduated from business school a year ago.

"We need to focus on the student loans right now," said Morgan.
While the Bay Area saw the weakest December sales in six years, according to DataQuick, prices there continue to rise. That is largely due to tight supply and investor cash. The median home price in the Bay Area was up 24 percent from December of 2012. Buyers like the Brasfields can't compete with that.

While the numbers are not quite as dramatic nationwide, the story is the same. First-time homebuyers are left out of the housing recovery. They accounted for just 27 percent of sales nationally in December, the lowest since the National Association of Realtors began tracking this cohort in 2008.

First-timers historically account for about 40 percent of the market. Their reasons for dropping out are manifold: High student loan debt, poor employment and poor wage growth, and less-than-pristine credit.

First-time buyers also tend to purchase lower-priced homes, but all-cash investors have cornered the market on those, leaving little behind. All-cash purchases accounted for 42.1 percent of all U.S. residential sales in December, up from 38.1 percent in November, and up from 18.0 percent in December 2012, according to a new report from RealtyTrac.

While the Realtors show a smaller share of all-cash buyers, 32 percent, they don't capture sales of homes outside their "multiple listing services," which would include sales of homes at auctions or by banks. In any case, the share is a, "phenomenal, very, very high percentage," according to the Realtors' chief economist, Lawrence Yun.

Distressed properties made up just over 16 percent of all U.S. home sales in 2013, up from 14.5 percent in 2012, according to RealtyTrac. These homes tend to be priced under $100,000, a sweet spot for first-time buyers. Sales of homes in that price category fell 11.5 percent in December from a year ago, according to the Realtors, while sales of homes priced above $250,000 jumped over 14 percent.

Tough credit is also hitting younger buyers hardest. Today's mortgage lenders require higher down payments, and while first-time buyers used to get help from their parents, that well has dried up for some, as older Americans lost much of their savings in the recent financial crisis.

First-time buyers often turn to FHA loans, the government mortgage insurer, but premiums and fees there have gone up dramatically in the past year, and FHA's share of the market has dropped accordingly.

Credit aside, there is still the simple fact that house prices shot up like a rocket in 2013, well into the double digits nationally.
"Below the surface of last year's market, a number of unsettling trends started to emerge as a result of rapid and ultimately unsustainable appreciation, setting up a bit of a mixed bag for 2014," said Zillow's chief economist, Stan Humphries.

"Affordability issues will help put the brakes on many markets that saw huge appreciation rates, like California and the Southwest, creating volatility that could potentially cause whiplash for homebuyers and sellers."

New mortgage rules aim to prevent risky loans

New mortgage rules aim to prevent risky loans

 Here's a look at what they do and why they matter to potential home buyers.

 By Julie Schmit

 New mortgage-lending rules take hold Friday that federal regulators say will guard against the risky lending practices that fed the housing bubble, which led to the greatest collapse in U.S. home prices since the Great Depression. For most home loan borrowers, the change will have little or no impact on whether they can actually get a mortgage, experts say, but they may have to show even more proof that they can afford one. Here's a look at the rules, what they do and why they matter.

 Q: What are the new rules, and where did they come from?

 A: There are several terms to know. The first is the "ability-to-repay" rule. It was required by the 2010 Dodd-Frank financial overhaul legislation as a response to the financial crisis. The rule was crafted by the Consumer Financial Protection Bureau, which will oversee its enforcement.

 Q: What does it do?

 A: It requires mortgage lenders to make sure borrowers can actually afford their loans, over the long term, by weighing their income, assets, savings and debt against their monthly house payments. "It really is pretty basic," says Richard Cordray, head of the CFPB. He calls the changes a "back to basics" approach for mortgage lending.

 Q: What else is new?

 A: Another term you need to learn is "Qualified Mortgage" or QM. A QM meets new guidelines, and borrowers who get them are presumed to meet the ability-to-repay requirements. If lenders make QM loans, they have more protections against future lawsuits should the loans later go sour.

 Q: What are the QM guidelines?

 A: QM loans cannot:
• Contain risky features, such as terms that exceed 30 years, interest-only payments or payments that are less than the full amount of interest so that the home loan debt grows each month.
• Carry more than 3% in upfront points and fees for loans above $100,000.
• Push a borrower's total debt load above 43% of his or her monthly income, unless the loan is eligible to be backed by Fannie Mae or Freddie Mac, or a federal housing agency such as the FHA, or is made by a small lender that keeps the loan on its books.

 Q: Can lenders still make loans outside those guidelines?

 A: Yes, but they'll still have to make sure borrowers can afford the loans, and they'll have less protection against future legal challenges if the borrower fails — even if they resell the loan after they first make it.

 Bank of the West, for instance, says it'll continue to do interest-only loans. Many borrowers in high housing-cost areas also frequently have debt-to-income ratios that exceed 43% and lenders will likely keep making home loans in those areas, too.
"We're seeing a lot of lenders say they'll keep making" non-QM loans that are "perfectly sound," Cordray says.

 Q: How many mortgages are likely to fall under the QM definition?

 A:The CFPB estimates that 92% of mortgages in the current marketplace meet the QM requirements.

 Q: Why is this needed at all?

 A: Lenders weren't always so careful. Goldman Sachs estimates that 50% of recent home loan defaults could have been prevented had the QM rule been in place when the loans were made, largely before the housing bust.
Over time, should the housing market get superheated again, the new rules will "serve as a barrier," against risky loan practices, says Ira Rheingold, executive director of the National Association of Consumer Advocates.

 Q: Will the rules make it harder for some people to get home loans?

 A: That's not clear. Goldman Sachs says it may be tougher for borrowers to qualify if they have difficult-to-validate incomes, including those for whom tips, bonuses, commissions, rents or investments constitute a big part of their total income. One in nine Americans are also self-employed, and that income is harder to substantiate than is wage income, Goldman says.
Borrowers above the 43% debt-to-income level will also face more hurdles, but mostly in terms of documentation, says Wendy Cutrufelli, Bank of the West vice president.
That's because lenders have to be able to prove that they exercised extreme due diligence in making such loans, she says. Borrowers should expect to have to produce even more tax records, pay stubs and bank and investment account information.
The 43% standard may also prevent some borrowers from qualifying for the loan needed to buy the house they want, says Roelof Slump, managing director of Fitch Ratings. Others may need bigger down payments to stay within the 43% standard, he says.

 Q: What's going to be the required minimum down payment?

 A: The rules don't set any down-payment requirements.

 Q: Will the rules mean it'll take longer to get home loans approved?

 A: They may, especially early on, says Keith Gumbinger, mortgage expert with HSH Associates. It'll still take lenders more time to get systems up and running that track and handle new documentation requirements. While lenders have had months to prepare, he still expects that loan officers, underwriters and compliance offers will need more training.
"It'll be a muddy mess until the rules settle in," he says.

 Q: What are the downsides to these changes?

 A: Critics say minimum-down-payment requirements would be a good thing. Goldman Sachs' analysis also shows that eliminating loans with risky features would have prevented 59% of defaults that occurred in loans issued in 2007; it also would have prevented 30% of the loans that didn't default, too.

The Six Thousand Dollar Egg- Amazing story!

By Todd Duncan This past Saturday, my wife and I headed out like we do most weekends and that is to one of many of our favorite Orange County bars and restaurants. We chose R&D Kitchen in Fashion Island Mall. We love R&D; their food and their ambience are spectacularly perfect and for over two years, and one hundred visits, the experience has always been exceptional….until this one.

They have an incredible cheeseburger. One of the best we have ever had. The bartender listed the daily specials, which included a waffle with a fried-egg on top. We contemplated our choices, ordered a drink and settled if for the afternoon watching college basketball on the bar TV. A competing local hangout, we recalled, allowed you to have a fried egg on your burger so we thought we’d try it here.

We were there for about thirty minutes and I asked the bartender to place an order for a burger and asked how much more an egg would be for on top of the burger. She said, “Two bucks, but I’m not sure the kitchen can do it.” Now I’m not a high-maintenance customer, but I’m thinking really, a fried egg? How difficult could that be? She went and checked and said, “The kitchen can’t add the egg. They are too busy.” I found this interesting as it takes about 2 minutes to fry an egg, and honestly, the restaurant was half-empty, it was still only around 11:45 in the morning. Strike 1!

I decided to get another drink, wait a few minutes and order the same thing with another bartender whom I knew better and thought we’d get some pull. He said, “Let me see if the kitchen could do it.” Same answer, “They are too busy and aren’t prepared to do anything that isn’t on the menu.” Strike 2!

I then asked the second bartender if I could speak to the manager. Her name is Natalie. The minute she arrived at the bar you could tell she was ready for a battle. No smile. No positive gestures. Just a simple, “How can I help you?”
I explained my situation very clearly to her that I simply wanted a side-order egg to put on top of my burger. She said, “We can’t do that.” And I asked, “Why?” Her response was, “We only order a certain number of eggs per day and we have to save them for our special waffle. If we don’t have the egg we can’t sell one of our most popular dishes.” So I said, “So you can’t do it?” “Nope” she said. It was time to test this restaurant and their culture around customer service.

 Off I went…

“So let me make sure we are tracking here. I spend at least $6,000 a year at your restaurant and I have one simple request for two-dollar egg for my burger and you are telling me you can’t make that happen because you only order enough eggs for your waffle dish?” She said, “Yes”. I pressed on, “So a one time visitor who orders a waffle for 15-dollars is more important to you than a $6,000 customer who comes in at least 4-6 times a month for whom you can’t figure out how to get him his egg?” Her response was, “We have to be able to serve the dishes we advertise, and the special ones we usually run out of. If we run out of eggs, we can’t serve the waffle.”

 Same question. My thought was wouldn’t you rather be one egg short and throw a waffle away versus holding to your stupid policy and “throwing a loyal customer” away?

It was very clear to me at this point that this manager, and perhaps this whole restaurant, and maybe even their parent company, Hillstone Restaurant Group, have no clue of the value of a customer and what they should empower their employees to do in a simple situation like this. But wait, it gets even better.

I say to the manager, “You know what I would do if I were you? I’d send a bus boy 200 feet to Whole Foods to buy a half a dozen eggs. That might cost you a couple of bucks. He could be there and back in less than five minutes and for a minimal cost to R&D, you’d have my egg and I’d be a happy customer.” “In the time we’ve spent arguing about the egg, they could have been there and back.”

She said, “I can’t do that.” Strike 3 – Game Over-I thought. You are not going to believe what happens next.

She said, “I’m happy to take care of your bill for your inconvenience.” I said with everything that I could muster, “That’s stupid.” She looked at me dazed and confused. I said, “You would rather spend your companies money and pay for my $75.00 tab for food and drinks than figure out how to get me a two-dollar egg?”

I looked her squarely in the eyes and said, “this egg just cost you and R&D $6,000. I’m never coming back.”

By the way, we left immediately and went next door to Whole Foods, a gourmet grocery store. Our motive was to check on the price of their eggs. We found them for as little as thirty-three cents a piece. Then, to our surprise, we found a bar in the store. It’s called Back Bay Tavern. We shared our horrible negative experience at R&D with Sandy, their bartender. She was shocked. At the Tavern, we had a great experience. Sandy told us their company creed is, “We don’t say no here.” In fact in less than one hour, they:

• Customized two drink orders
• Made a pizza that wasn’t even on their menu for us
• Sent their wine guy into the store to get us the perfect wine for that pizza that was not on their menu

Every employee at this place needed not to place a phone call or get an OK from any other person to do for the customer what he or she requested. This is where I can spend my money and get treated the right way.

I think it’s absurd that any business owner can think for a moment that the very people that frequent their place of business don’t have other options. There are over 100 restaurants in Newport Beach, California we can choose from. Why in heaven’s name would a business like Hillstone Restaurant Group, who owns 4 restaurants in my zip code; R&D, Gulfstream, Banderas and Houston’s, ever allow for such a stupid service breakdown?

This is what is wrong with business today. They don’t understand the changing dynamics of how consumers are spending their money. There is a new day, and it’s here. It’s not coming. Today, the only way a business can survive is by following the new rules of customer loyalty.

Get clear on this – we’ve been going to R&D for two years and those two-years were canceled out after one exceptionally bad experience. Ready for a blinding flash of the obvious – an unsolved service breakdown will lose the customer and they will share their story with everyone.

Leadership Questions To Contemplate:
1. Are your employees and teammates trained and empowered to make intelligent choices about taking care of customers during a breakdown?

2. Isn’t it wiser to throw away a fifteen-dollar waffle, give the customer a two-dollar egg and not buy his seventy-five dollar tab? All of this should make sense fiscally for a business.

By the way, R&D stands for Research and Development. This was powerful research!

Will millennials ever be homeowners?

Will millennials ever be homeowners?

Student-loan debt and unemployment shackle many adults in their 20s and 30s, the traditional first-time homebuyers. These tips may help some qualify for loans.
By Marilyn

The recent recession kicked the millennial generation — those in their 20s and early 30s — in the teeth. Some wonder if they'll ever be able to own a home. Experts worry, too, especially be...cause the housing market depends on young, first-time buyers.

The downturn began just as many young adults were entering the workforce. Americans ages 20 to 24 suffered a 12.9% unemployment rate in May. That was actually an improvement from 14.6% last year.

A college education is supposed to give job seekers an advantage. But to get it, many took on loans that now prevent them from qualifying for a mortgage.

"Sobering" is how the Consumer Financial Protection Bureau describes the roughly $1 trillion that Americans owe on school loans, 67% of it owed by people under 40. Just over half of college graduates from 2006 through 2011 have full-time jobs, yet six in 10 have student loans with an average balance of $20,000.
First-time-homebuying years

In another time, Amanda Bate would have been a typical first-time homebuyer. She has always wanted to own a home. Now that she's 26, with interest rates and home prices at or near record lows, the time seems right. She went shopping this spring near her workplace in Birmingham, Mich.

"The housing market was so low. I thought, 'I could possibly get a house,'" she says.

The house she loved was listed at $80,000. The mortgage payments would have been about $500 a month, cheaper than the $610 a month she'd paid when she rented an apartment.
But the mortgage broker dumped cold water on her dreams. Even working a full-time job, plus a part-time job on weekends, and even though her parents have been helping pay her student loans, buying a home was out of the question.
For one thing, she'd need an $11,000 down payment. "I don't even have a savings account," she says.

But it's her student loans — $1,470 a month in payments on $123,000 in combined balances — that have made buying impossible. Bate earns just $30,000 as marketing director for a small media company.

She says she wishes someone had warned her. She now can't imagine when she can ever buy a home of her own. Meanwhile, she's living with her family, like one in five 25- to 34-year-olds, and "everything I have goes into those loans."

A generation struggling
Some experts see the double curse of unemployment and student debt as an ominous sign, not only for millennials but also for the whole economy.

"Debt, coupled with double-digit unemployment, has hobbled millions of young adults who would have bought homes, married, had children and feathered their nests with all the middle-class goodies that keep our economy humming," demographer Cheryl Russell writes.

Tighter mortgage-lending requirements add to the trouble for young would-be homebuyers. The numbers paint a picture of a generation falling behind:

36.8% of people under 35 own homes, down from 43% in 2006.
61.4% of people ages 35 to 44 are homeowners, down from nearly 69% in 2006.

Just 9% of people ages 29 to 34 got mortgages in 2009 to 2011, compared with 17% a decade earlier, even before home prices inflated and mortgages became easy to get.

40% of those with student loans have put off making big purchases such as homes and cars.

But Paul Ashworth, an economist with economic-research firm Capital Economics, says he isn't convinced that student debt will prevent millennials from eventually owning homes. Despite recent widespread concern over student borrowing, sketchy data make it hard to know if the proportion of borrowing is worse than in the past, he says.

At roughly $1 trillion, student debt is greater than outstanding auto loans ($730 billion) or credit-card balances ($693 billion). But it's unclear if that's a change, Ashworth says. "My big thing is, is it any different than it used to be?" he says.

Also, on the upside, six-digit student-loan balances like Bate's are unusual. Just 3.1% of borrowers owe more than $100,000. Most borrowers, 72%, owe less than $25,000. That's still sizable, especially if your salary is $25,000 or $30,000, and 14.4% of borrowers have missed at least one payment, so many clearly find their loans hard to repay. But it's equivalent to buying a new car — a big purchase, but one many young people manage.

There's no question, though, that many young adults are struggling.
"These were people who were most likely to be buying a home with very little equity at the very top of the boom," Ashworth says. "They would also have been the people who got whacked the hardest when the market turned down because they wouldn't have had the time to build up equity." That makes them more prone to foreclosure and negative equity.

The desire to buy
With the starting gate crashing down on millennials' heads, you might expect them to be disenchanted with homeownership. But that's apparently not the case. Western Union, which polls consumers about payments and purchases, found in late March that 47% of people ages 21 to 33 plan to buy a home within five years; 11% even hoped to buy a second home.

Their plans may be unrealistic.
"Even though they're very optimistic about it, I think they're going to have a more difficult time achieving homeownership than perhaps they realize," says Missy Zakett, Western Union's vice president of enterprise banking sales.

One-third of those young adults have never even seen their credit scores, Zakett says. This is the age group most likely to spend on "almost everything," including groceries, gas and clothing, according to the survey.

Again, however, the news is not all bad. Of young adults Western Union polled, 39% had no debt at all. An additional 13% had only $1,000 to $5,000 in total debt.

What millennials should know
If you're a millennial looking to understand what your student debt will mean when you go for a home loan, consider that the mortgage you can get depends on what money you have left after paying your monthly bills.
Mortgage payments may not top 31% to 35% of your monthly adjusted gross income, says Dennis Johnson, a certified credit counselor with the nonprofit ClearPoint Credit Counseling Solutions in St. Louis. If your annual adjusted gross income is $60,000, you could qualify for a monthly mortgage payment of $1,550 to $1,750.
In addition, all your debts — car loans, student loans, credit cards and mortgage payment— may not exceed 40% to 45% of your adjusted gross income. For example, if your mortgage payment is $1,500 a month, you've got $750 a month for all other debt.
If buying a home is your goal, Johnson advises starting with these three steps:
1. Cut debt. Reduce or eliminate all debt, including student loans. The debt allowed when you apply for a mortgage depends on what you earn and what you owe.
2. Pump up your credit score. Make every loan and credit card payment on time. Late payments hurt your credit score, making it harder and costlier to get a mortgage. You'll need a FICO score of at least 580 — but realistically, as high as 700 or 720 — to qualify for most mortgages.
3. Save a down payment. Once your debts are out of the way, start saving for a down payment. How much depends on the loan type you'll use and how much you're borrowing. Johnson says Federal Housing Administration loans require a down payment of about 3.5% of the purchase price. Some conventional loans may require 10% to 20% down.
Lessons
Looking back, Bate says she wonders what she might have done differently. Her bachelor's degree in public relations, for instance, seemed a savvy choice back in college.
"We would ask the teacher what kind of salaries we should be expecting, preparing to enter the workforce," she says. "They said you can start anywhere from $40,000 to $70,000 a year. I was like, 'OK.'"
But she graduated in 2008, just as the economy tanked. She couldn't find work, not even an unpaid internship. Returning to school for a master's degree in political communications seemed a smart way to increase her marketability and defer repaying her loans.
She says she sees now that she could have used more help with planning. Her parents warned that debt would make it hard to buy a home. But she did not understand what that meant, she says.
Students typically have little experience with bills, mortgages and paychecks, and yet they're making financial decisions that will shape their lives. Johnson says he sees many young adults who can't buy homes because of student loans.
He urges parents and students — even high-schoolers — to meet with a certified credit counselor who's unaffiliated with schools or lenders.
If owning a home is your goal, even in the distant future, include it when planning how you'll balance your career hopes, salary expectations and school choices.
Out-of-control student debt, Johnson says, mostly is because of:
Out-of-state schools: In Bate's case, both her schools were outside her home state of Michigan. Many schools charge much higher tuition to out-of-state students. Solution: Students successful at containing college costs often live with family to avoid paying room and board.
Failing to consider future salary: Like many millennials, Bate was caught by surprise when the recession lowered entry-level salaries. Get a reality check by reaching out to professionals in your chosen field to learn what jobs really do pay. Researchers at Rutgers University say the median salary for a first job after college is $28,000. Solution: When adding debt, estimate your payments after graduation and how they'll affect your overall budget and other goals. In general, payments on a $20,000 student loan run $200 to $300 per month. If you'll be earning $100,000 or more after graduation, you could handle more debt than on $30,000 or $40,000 a year.
How to prepare while in school
Johnson has five more tips to help students eventually buy homes:
1. Choose a smaller student loan: Lenders may offer money for tuition, books, housing and food, but you don't have to take it all. Accept just enough for tuition and books, Johnson says. Live frugally and work to cover room and board.
2. Get a work-study job: Around 3,400 schools participate in the Federal Work-Study Program, which pays students to work part-time while enrolled in school.
3. Study part time: Afford college by attending part time while working. It takes longer, but you're less likely to be shackled to loans.
4. Live off-campus or at home: Consider boarding houses or sharing a cheap apartment, or choose a school where you can live with family. Campus life, while undeniably fun, is less attractive when you factor in the price of indentured servitude after graduation.
5. Lower your student-loan payments: You may be able to restructure or consolidate student loans and lower your monthly payments.
 

 

Home Buyers Define New Technology for Brokers

Home Buyers Define New Technology for Brokers
By Jennifer Kinzle

New technology has caused a huge shift in the dynamic of real estate as a service industry. Exceptional service is hard to come by under normal circumstances but the nature of 365 days a year and 24/7 availability simply undermines even the most diligent agent. Brokers are only human and may miss a potential client, thus reasserting that the internet, while faceless, is at least open for house hunting at all hours. Zillow doesn’t sleep. Trulia sloshes through the oceans of expensive internet advertising just to find buyers and they never, ever take breaks. Agents often find themselves behind the flow of data and catch up only when they are notified of the street address of the house the buyer wants to see in person.

Clients want instant answers
Gen X might have led the charge into the foray of greater independence on house hunting and gotten the self service streak rolling with online sites such as For Sale By Owner, but it is the Millenials that will now be first time home buyers. They seek out mobile websites for brokerages, mortgages, house listings and similar that must not only be up to speed on content, but as well as the latest features, including a one click button to connect to an agent (preferably with a text). If there is not an app for that, they will move on to the next one. An app installed is only a swipe away from being uninstalled, so the easier it is to use and provide valuable content, the more likely it is to remain on the user’s mobile device.

Clients want verification
It’s gotten super easy now to never know anything, but verify. Checking out a property on Realtor.com is one way to find an interesting property. However, more people can dig a little deeper on details by Googling the street address and see if it’s been in the news before contacting an agent to see it in person. Rest assured, professional listing agents normally do the exact same thing to get essential information on a property and they don’t want any unexpected surprises on a property listing. Who better to trust, but verify, than Google?

Clients share their findings
Houses on the market today love their selfies. But buyers today not only want to see the gorgeous exterior of a house, they also want to explore the features of the inside of the house, often to pinterest it on their pages, take digital video of it, post it on YouTube, put it to music and digitally photoshop the walls and hopefully whatever else to make it look the way they envision it. Home buyers may not want that home, but they know what they can make it look like. An app such as iCreate’s LTD app for Waterstone Homes, for example, http://waterstonehomes.com/content/new-3D-interactive-app-new-development-marketing.php, allows clients access to a 3D virtual program which runs simultaneously over the live property. The 3D overlay simulation allows potential buyers to virtually walk through it, as well as incorporating changes on the spot and visualize the finished product.

In the end, more real estate agents have realized that they can provide valuable inter-personal service for their clients, of all ages. The good news is that now there are far fewer surprises for clients during the home buying process, a lot less digging for real estate agents to comply with full disclosure and as Google knows, more information is better than less. With a new generation of mobile devices, apps and home buying virtual reality, home buyers have more control than ever when buying their next home.

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