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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HOW TO CHOOSE THE BEST REALTOR IN YOUR LOCALITY

HOW TO CHOOSE THE BEST REALTOR IN YOUR LOCALITY
By John Smith

Choosing the right real estate agent is one of the most crucial decisions a homeowner can make. Irrespective of the fact that you are buying or selling a house, zeroing in on a professional realtor is important if you want to have a fair deal. You must be very clear about your demands and requirements since there can be various kinds o...f realtors available in the market i.e houston realtors, bethany beach realtors, Fenwick Island realtors. So you should fix your area before contacting realtors. Be prepared to do an extensive research before selecting the realtor for your house buying or selling.

 

Here is a list of tips you can observe to make sure you have roped in the best real estate agent:
Know the type of agent you want to hire and keep a list handy

 Your home is probably the biggest investment ever. So first understand your type of property transaction and then go for an agent who specializes in that category. Since there can be two kinds of realtors, one who bargains for buyers and the other who negotiates for sellers, it is important to know what type you are searching for.
Now that you are decided on this front, make a list of that category of realtors in your target locality. In case you are selling your property, look for a local agent to get the best deal. If you are venturing out to another locality, look for an experienced realtor in that neighborhood. You can in fact ask your friends in that area for suggestions on brokers.

 Interview your chosen candidates and find out how experienced they are.

 Now that you have checked out the qualifications of the brokers featuring on your list, it is time to find out how experienced they are in their trade. Let them inspect your property. Have a word with the top selected candidates and ask for an appraisal of the value of your home. Ask all the pertinent questions that come to your mind in order to understand their knowledge. Get an estimated sale price of your house along with a comparative market analysis.
Ensure your chosen candidates have spent a considerable number of years as a real estate agent to know its ropes quite exhaustively. They must also be knowledgeable enough to settle the kind of deals you are looking for. This will give you an idea of their experience in the job.

 Always settle for a licensed agent

 You want to get the right price for your greatest investment. Therefore, be sure you have settled for a licensed agent. Always check whether the agent you have chosen is properly licensed and registered or not. This will increase your chances for landing a great deal.

 Make a comparison of valuations

 Some agents offer a sky high valuation of the property which may not always be realistic. In that case it would be very difficult to find a buyer for such a property. Be sure that your expectations regarding valuations are practical, in order to attract potential buyers. Always compare the history of their recent property sale in the same area as yours. If you find that there is a glaring disparity between their estimate and the actual sale amount, find out the reason behind it.

 Make a comparative study of the commission rates

 Compare the commission rates offered by each of the agents before you choose your realtor.

 Have a knowledge about the varied agreements

 It is important to understand that there can be a bunch of different agreements involved in your relationship with the realtor. The most significant ones include Exclusive Agency Agreement, Sole Agency Agreement, Open Agency Agreement, Auction Agency Agreement and Multiple Listing Agency Agreement.

IT'S THE PRICE THAT SELLS A HOME

IT'S THE PRICE THAT SELLS A HOME 

 By Blanche Chris EvansYou've heard the old saying - "Location, location, location."
The real truth is "Location, condition, and price." And price trumps every other factor.

 Location affects the value of a home, but it's price that sells a home.
Oceanfront, mountainside, or penthouse, the most desirable location in the world won't sell at the wrong price.

 Every property has a potential buyer, but like rock, paper, scissors, it's sometimes hard to know which factor is going to win the showdown.
A good location will sell at a fair price. A bad location will sell at a fair price, too. It just won't be as a high as it would be for a good location.

 A home in good condition will sell for a fair price. A home in poor condition will also sell at a fair price. Again, it won't be as high as a comparable home in better condition.
But neither location or condition will sell any house. Only one thing does that - price.
So if you're a seller waiting for that "special buyer" who will appreciate your faded pink and black bathroom tile, your vintage orange shag carpet and is willing to help you put your kids through college because of your real estate prowess, you're going to have a long wait.

 So if your home is represented by an agent, and it's been on the market for a long time, chances are it's your own fault.

 Maybe you didn't listen to your agent when he said you're pricing your home above the market. Maybe you got mad at the first few folks who looked at your home and didn't make offers.

 When the showings stopped completely, maybe you accused your agent of not doing a good enough job.

 You put the blame on everyone except where it belongs - on you. It's not about you, what you want, or how much you need for your retirement.

 It's about the price.

KNOW YOUR REQUIREMENTS AND GET THE BEST MORTGAGE DEAL FOR YOU

KNOW YOUR REQUIREMENTS AND GET THE BEST MORTGAGE DEAL FOR YOU

 By Adam

When you would like to have a mortgage, then you can definitely get yourself a mortgage which is not the most beneficial for you personally. House loans will often be missold simply by dealers claiming to get professionals. At some point all of them force Endowment mortgages, Reimbursement mortgages as well as Reduced Start off mortgages or Over payment mortgages - in addition to each type you will get unique rates of interest obtainable.

 Beneficial mortgage payment calculators will help you pick a qualified mortgage loan to suit your needs, although several mortgage payment calculators available are usually small guide. Let's have a look at what type of mortgage may be best for you.
If your savings as well as your income is small then a usual Reimbursement mortgage need to be very best when you can obtain for the residence you wants and you'll afford the repayments. Otherwise, Low start mortgage might let you get hold of a greater residence or include reduce repayments if your income is probably be increasing.

 For the people who has got good income but less savings a usual Repayment mortgage ought to be great if you're able to obtain one for the residence that you might want. In case you'd like to pay off your mortgage quite early, then an over payment will certainly be the good choice for you, nevertheless a good Counteract mortgage linked to your current bill could help with this far more effortlessly.

 A smaller Repayment mortgage loan could possibly be best, if you have got good amount of savings in spite of small income, nevertheless if you're able to commit your dollars at the much better web returning compared to the mortgage loan monthly interest that you can get then you definitely should receive the most significant Repayment mortgage loan that the earnings can certainly afford.

 Earning and saving well. Whenever you can purchase the property or home you choose without a home finance loan, and then simply get a mortgage if you possibly could invest your money at a better online return than the home finance loan monthly interest that you can receive - and if that's the case, obtain the biggest Pay back mortgage which is affordable for you.

 Preliminary mortgage payments must be inexpensive for you personally, making enough of an individual income with regard to normal costs as well as expenses. If your earning is bit less then a home finance loan using 30% of your respective income could possibly be challenging for you personally, but if your income can be bigger subsequently 50% of your respective income will not be challenging for you personally.

 If you want to get a home just as an investment for you to book this available, subsequently you might need a professional Purchase to be able to let mortgage loan desiring a new put in connected with 15% or more until you will get a new seller supplying a new offer which can help with that. Although if you are without a doubt a new landlord owning a number of houses, you might become much better matched with a expert loaning arrangement rather than personal mortgages.

Should You Be Buying Commercial Real Estate?

Should You Be Buying Commercial Real Estate?


Buying commercial real estate now might be your best chance to get in on another ground floor opportunity. The opportunity to buy residential real estate at the bottom of the cycle has come and gone. However, buying commercial real estate at the bottom of the cycle, could be the next opportunity of a lifetime, for investors. Most sectors of c...ommercial real estate have been making a slow but steady come back for the past year.

Although improving, there is still plenty of upside left in the market. According to CBRE Group's third quarter report, the national office vacancy rate improved by 10 basis points (bps) but still stands at 15.1%. This is a year on year improvement of 50 basis points.

5 Reasons Buying Commercial Real Estate Could Make Sense For You, Right Now!
1.Buying commercial real estate now is the chance of a lifetime.
2.Buying Commercial Real Estate in a Rising Market
3.Industrial real estate had a much more impressive improvement in the third quarter.
4.The vacancy rate improved by 30 bps from a year ago and has improved 130 bps from its recessionary peak.
5.Now at 11.7%, it makes for an attractive sector when considering buying commercial real estate.
Apartment buildings remain the star for buying commercial real estate but most are now fully priced in local markets. What continues making apartment buildings attractive to investors looking at buying commercial real estate is the super low vacancy rate of 4.6%.

The retail sector is making steady but slow improvement. Third quarter saw the vacancy rate decline 10 bps. A 70 bps improvement from a year ago.

Why Buying Commercial Real Estate Makes Sense
Economy of scale means you can manage a lot more trailer parks, apartments, and offices with more cash flow than you can manage individual homes. Buying commercial real estate means you have income from 100 or more apartment units compared to maybe 5 single-family homes. Obviously, the difference of having one or two vacancies between the residential and commercial is a huge factor also.

Buying commercial real estate comes with a separate set of rules.
Residential houses are valued based on the market value of recent nearby sales. Buying commercial real estate is based on the net operating value of the property.

Buying Commercial Real Estate With Creative Financing
Creative financing is another reason for buying commercial real estate. It's much easier to find private money partners interested in buying commercial real estate than it is with residential. Commercial loans are also more flexible. You can combine private financing with a bank loan and use other creative financing solutions when buying commercial real estate.

Larger Multifamily Buildings are Lease Option Possibilities Also
As most investors know, the separation between residential and commercial properties is between 4 and 5 units. Anything up to 4 units is considered a residential property. Anything with 5 units or more is considered a commercial property.

You can certainly lease option commercial properties. The biggest difference residential and commercial is financing the property when you decide to buy. Commercial financing is very different from residential financing. You will most likely need a much larger down payment. Also, it's common for banks to require you have a up to 6 months of reserves. This means having enough financial liquidity to cover 6 months of loan payments and operating costs.

WHAT BUYERS CAN EXPECT WHEN NEGOTIATING A HOME PURCHASE

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WHAT BUYERS CAN EXPECT WHEN NEGOTIATING A HOME PURCHASE

We all know that negotiating price is important to the home buying process, however most buyers forget that it’s not the only thing that needs negotiating. Price is just the first thing that is negotiated – once you open escrow, the real deliberations begin.

There are hundreds of things to negotiate in a home sale once... you’ve signed the purchase contract such as inspections, repairs, home warranty, and closing costs so it’s important to be prepared.

YOU WILL WANT A BUYER'S AGENT
With so many things to negotiate in a home sale, it literally pays to have an agent on your side. So what do you need to look for in an agent? John Wenner, professional negotiator and co-founder of the Real Estate Negotiating Institute says, “One of the biggest things an agent needs to show is their ability to negotiate on your behalf.
Buyers need to ask their agent - What negotiating tools do you have available to help me accomplish my goal?”

It takes years of practice, market knowledge and some learning to be an ace negotiator. That’s why the first thing you should look into before you start making offers on homes and trying to negotiate sales is finding an agent to help you out. Negotiating tools your agent should have include prior knowledge of your local area, professional training in negotiation strategies and most importantly determination.

As a buyer, you don’t have to pay for your agent out of pocket. Their commission comes out of the home sale so don’t let fees stop you from finding a professional to do some smart negotiating on your behalf.

SELLERS ARE ASKING FOR MORE THAN THEY EXPECT TO GET
If you look at listing prices and sold prices, you will notice that sold prices are always lower. That’s because sellers are already highballing when they put their home on the market, anticipating a negotiation with buyers looking for a deal. Sellers ask for more than they expect to get so it’s ok to make an offer that is below their listed selling price.

Beware: Know the market you’re up against. In a seller’s market with low inventory and bidding wars, you don’t have the luxury of making a lowball offer. In a buyer’s market however you can offer as much as 10% below a seller’s price without worry.

BE READY TO GET INSIDE THE SELLER’S MIND
You have to look at what’s being said by the other side and decipher their goals or self interest in order to be a good communicator and negotiator says Wenner. Understanding the seller means understanding why they are selling their home in the first place. By understanding their standpoint and motivations, you will learn how to approach your negotiating. Are they looking forward to retirement? Are they in a rush to move out because they’re relocating for work? Knowing the seller’s motivation is the key to engaging them in negotiations and getting what you want.

LIST OF COMMON NEGOTIATIONS
There are hundreds of negotiations that are a part of a home sale. Here is a quick list of just a couple major points you and your agent with be negotiating on for your new home:
Price – Negotiating the initial price of the home is just the tip of the iceberg. Once that’s over, the bulk of your back and forth with sellers begins.

Timeline or length of escrow – Be prepared, the sellers will want a quick and speedy escrow because they are on their way out. However, as a buyer you will benefit from a longer escrow period to ensure any problems with the home are resolved and your loan is handled correctly.

Inspections – It is crucial to have an inspection done on a home before you buy – it is standard in all home sales today. You and your agent should work on a list of contingencies to put into your purchase contract based on the findings of an inspection.
Home Warranty – The home warranty can be paid for by seller or buyer. While the warranty is to your benefit, some sellers are willing to pay for it as a way of preempting any further responsibility on their own part in the event that there are problems with the home post closing.

Closing Costs – These costs can be paid by either party but in a seller’s market, you might offer to pay these in order to sweeten your offer.

Repairs – Based on the home inspection you will come up with a list of repairs. What it comes down to is asking the sellers to fix any problems that arise or negotiating a lower price.

A Big Year for V.A. Loans

A Big Year for V.A. Loans

The number of loans guaranteed by the Department of Veterans Affairs reached a record high in 2013, perhaps marking the peak of an upward trajectory that began after the housing market collapse.
The department guaranteed nearly 630,000 mortgage loans in fiscal year 2013, setting a new high just as the program enters its 70th year, said Mike Frueh, the director of the V.A....’s Loan Guaranty Program. The average loan was about $225,000, an amount that reflects the program’s value to “working-class America,” he said.
Calling the program’s growth “pretty incredible,” Chris Birk, the executive editor at Veterans United Home Loans, an online broker of V.A. loans, estimated that total loan volume has risen 372 percent since fiscal 2007.

One reason is historically low interest rates, which have driven a tremendous increase in loans for the purpose of refinancing. About half of last year’s V.A. loans were “refis.” That business dropped off toward the end of last year as interest rates rose.

Another factor is the tough lending climate of the last six years, which has made a V.A. loan the most viable option for many service members. “It’s become so much more difficult for military personnel and veterans to qualify for conventional financing,” Mr. Birk said. “This is the only path to homeownership for many.”

One big advantage for first-time buyers is that the loans do not require a down payment. About 90 percent of all V.A.-guaranteed purchase loans are made without any money down. “Our average borrower has about $7,000 in liquid assets at the time they close the loan,” Mr. Frueh said. “That’s not enough to make a significant down payment.”

Another benefit is that V.A.-backed loans do not require private mortgage insurance, which add to a borrower’s monthly payment. According to Mr. Frueh, for the loans made last year, borrowers will save $35 billion they might otherwise have paid out in mortgage insurance premiums over the life of their loans.
There are restrictions, of course. The loan must be for a primary residence. And the V.A. maintains limits on the amount it will guarantee, based on area median home prices. The 2014 limits, calculated by county, range from $417,500 to $1,094,625.
The V.A. does not set a minimum credit score requirement, but lenders typically add their own, which is currently around 620. The V.A. is more concerned with a borrower’s income and expenses.

To qualify, borrowers must show enough monthly income after paying personal debts and housing costs to meet “residual income” levels set by the department. The levels vary by region and household size. In the Northeast, for example, on loans exceeding $80,000, a two-person household must show at least $755 in leftover income, while a family of five must show $1,062.

“Their underwriting is a little bit more restrictive, but it’s prudent,” said William J. McCue, the owner of McCue Mortgage in New Britain, Conn., which has handled the agency’s loans since its founding in 1949. “That’s why the loans perform so well.”
Indeed, V.A. loans have shown the lowest foreclosure rate for the last five years, according to data gathered by the Mortgage Bankers Association. “People naturally assume that these loans are risky,”

Mr. Birk said, adding, “You really don’t see people who can’t afford a mortgage getting a loan, because of that residual income requirement.”

According to data gathered by Veterans United, the three states that saw the greatest jumps in loan activity last year compared to 2012 were Arizona, up 40 percent; Ohio, up 33 percent; and Connecticut, up 30 percent.

8 FEATURES OF THE 2014 MORTGAGE RULES YOU NEED TO KNOW

8 FEATURES OF THE 2014 MORTGAGE RULES YOU NEED TO KNOW
By JESSICA ROBERTS

The new mortgage rules issued by the Consumer Financial Protection Bureau (CFPB) are in effect as of January 10th, 2014. Banks can no longer engage in irresponsible lending practices leaving borrowers unable to repay their mortgages. Lenders can only provide “Qualified Mortgages” that comply with the “Ability-to-Repay” rule.
CFPB Director Richard Cordray says “when consumers sit down at the closing tab...le, they shouldn’t be set up to fail with mortgages they can’t afford. Our Ability-to-Repay rule protects borrowers from the kinds of risky lending practices that resulted in so many families losing their homes. This common-sense rule ensures responsible borrowers get responsible loans.”

 Here are 8 features of the 2014 mortgage rules you need to know:

 No-doc or low-doc loans are prohibited: Lenders must supply and verify complete consumer financial information.
Limited points and fees: No more than 3% for a loan of more than $100,000.
No risky loan features: Terms cannot exceed 30 years, no interest-only payments, no negative-amortization payments where principal increases.

 Tightened Debt-to Income Ratio: Borrowers cannot exceed 43% Debt-to-Income Ratio (DTI)

 No “teaser” rates: Lenders must verify a borrower’s ability to repay BOTH principal and interest over the long-term, NOT only during an introductory or “teaser” period with lower interest rates.

 Contact with missed payments: Mortgage lenders must attempt contact with homeowners within 36 days of a missed payment. They must also provide available payment options no later than 45 days after the due date.

 Clear monthly billing statements: Lenders must send clear statements indicating what portion of your payment went to escrow and principal, balance owed, and any service or transactional fees.

 Early warning for ARM: Lenders must notify borrowers of increased rates 210-240 days before the next payment and follow up with an additional notice 60-120 days before the new payment is due.

 Gail Hillebrand, associate director at the CFPB, says "every lender has to do some commonsense things to make sure the borrower can pay the loan back.”

 “No surprises and no runaround.”

Are You Ready to Buy a House?

Are You Ready to Buy a House?

 Answering these eight questions will help you decide

 By Tasha Schroeder

The idea of owning your home is an exciting one, but how do you know if you’re ready? Before you take the plunge, answer the questions below.

What’s your financial situation?
Having a clear understanding of your finances is necessary when you’re considering buying a home. Prior to speaking with ...a real estate agent, you should make a budget to see how much you can reasonably afford to pay. Don’t forget to factor in the cost of taxes, insurance premiums, maintenance and other upkeep.

Can you afford even the initial costs?
Down payment amounts vary based on the type of loan you’re offered or if you’re eligible for a first-time homebuyers’ program, but remember that the more you put down, the lower your mortgage payments will be.
Other initial costs can be substantial: loan set-up fees, home inspections, insurance, property taxes and other fees will cost you about 2 to 4 percent of your home price.

Is your money organized?
Hopefully you’re the kind of person who balances your checkbook and understands where your money goes, but if you take a more lackadaisical approach to your finances, you’ll need to step up your game. Get organized, check your credit report and keep building your savings. Getting your affairs in order helps you improve your credit score, qualifying you for better interest rates, and good financial records will help you take full advantage of tax deductions.

What are your future expenses?
Think ahead to the next few years. Are you making any big life changes that will hit your wallet hard? If you’re planning to have children or start paying tuition soon, you should factor that cost into your decision now. It can become difficult to replace an aging car or take an expensive vacation once you’re paying a mortgage.

Do you have an emergency fund?
Before you devote all your savings into a down payment or upkeep for your house, look at the bigger picture. You need to build a financial cushion in case of financial setbacks like unexpected unemployment or serious illness.
It’s not just money that should affect your decision to buy a home.
Are you flexible when it comes to getting what you want?
Your first home may not have all the bells and whistles you’re looking for. Are you willing to defer on your wish list now in order to have a home of your own? In a few years, you may be able to find a home that better suits your needs, but in the meantime you could also consider fixing up a less expensive home, buying a home with friends or renting out part of your home for additional income.

Do you plan to move in three to five years?
There is a lot of effort, time and cost involved in buying a house – you want to make your investment pay off for you. In addition to the price of the house itself, you should also take into the set-up costs already mentioned.
If you’re planning to move in a year for work or school, you may want to wait until after that time. Otherwise, you might find yourself in a tough spot if you’re forced to sell your home for less than its purchase price in a slow market.

Do you enjoy home improvement?
If you’re already looking at homes, it’s hard not to imagine how adding a fresh coat of paint to the walls or changing the light fixtures will make a house truly yours. But if you’re used to calling the landlord for anything that goes awry in your home, owning a house might be a jarring wake-up call. When you own your house, any issue becomes your responsibility, from replacing blown electrical fuses to installing a new roof.
Now is the time to consider whether you enjoy home improvement projects. Are you confident in your ability to patch drywall or install a ceiling fan, or would you rather pay someone else to do it? If it’s the latter, consider that even if you hire someone else to handle your home improvement issues, you will still have to invest not only money but your time by researching contractors and supervising their work.

Real Estate in 2014: A Need-to-Know Guide

 Real Estate in 2014: A Need-to-Know Guide

 By Christina Couch

After year of struggles, the housing market roared back to life in 2013. The rebound will continue in 2014, but the pace will slow.
Experts say 2014 will be a year of continued growth and stabilization in the housing market with rising home prices, fewer foreclosures and greater activity among underwater homeowners.... But this year’s market faces strong headwinds as inventory remains tight and both homebuyers and builders face tough lending standards.

To buy a home in today’s market, you either need impeccable credit or the ability to make an all-cash purchase. The average FICO credit score on conventional loans used to purchase homes in November 2013 was 756, according to the most recent data from Ellie Mae, a company that produces mortgage underwriting software. The average score for denied applications was 729.
"To put that in perspective, the normal average acceptance score historically is around 720," says Walter Molony, a spokesman for the National Association of Realtors (NAR). "Right now, the average rejection score is now what the acceptance score was historically."
Don’t expect credit standards to ease up any time soon. This month, new Dodd-Frank regulations aimed at preventing risky borrowers and equally risky mortgage products from entering the market take effect. The new changes require lenders to closely evaluate such factors as a borrower's debt-to-income ratio, employment status, income, assets and credit history before underwriting a loan.

Home Prices Continue to Climb
In addition to tight credit, rising interest rates and home prices may discourage buyers from purchasing in 2014, says Jed Kolko, chief economist for Trulia.com, the real estate site. Average 30-year mortgage rates bounced from 3.34 percent last January to their current 4.48 percent rate, with many expecting further increases of up to a full percentage point in the New Year. Home prices nationwide have risen 11.2 percent on average over the past year, according to the S&P/Case-Shiller home price index. Sunbelt cities in places like California and Arizona have seen home values surge in excess of 20 percent.

While it remains a sellers’ market, price gains aren’t all bad news for buyers. First-timers may be discouraged, but increasing prices are music to the ears of current owners, many of whom are watching their formerly underwater homes gain value. More than 85 percent of homeowners with a mortgage in the second quarter have some equity in their home, up from less than 75 percent in the fourth quarter of 2011, according to CoreLogic.

"We saw a period where the first-time buyer was sort of a driving force," says Robert Denk, senior economist for the National Association of Home Builders. "We expect that to reverse.... As house prices rise, as fewer mortgages are under water, that should bring the more established [buyers], the trade-up market, back to some degree."

How much the housing market bounces back in 2014 also depends on construction activity. With builders still fiscally cautious and facing the same tight lending environment as buyers, expect a small increase in the number of new homes on the market. As buyer demand picks up, the pace of new home construction should follow.

"The [housing] bust was basically a five-year period where we produced and sold a fraction of the homes we would see in that normal market," Denk says. "We’re going to see a lot of that pent-up demand turn into realized demand. That will be an important driving force in 2014 and 2015."

Inventory Remains Tight
Still, the gains in demand (and the inventory that follows) will be slow. While total housing inventory declined in both October and November, unsold inventory is currently five percent higher than it was a year ago, according to NAR. The association predicts inventory won't radically accelerate until 2015.

"I think 2014 will be the year when we see that home price appreciation pulls back to more normal, sustainable levels," says Daren Blomquist, vice-president of RealtyTrac.com, a site that aggregates real estate data. Markets that boomed in 2013 will likely scale back to more modest growth in the low double digits, while nationwide growth should average about 4.5 percent, according to Blomquist.

Even with recent gains factored in, most markets are not at risk right now for another housing bubble. Nationally, home prices remained 4 percent undervalued in the third quarter, according to Trulia’s Bubble Watch. Only Orange County, Calif., and Los Angeles are more than 10 percent overvalued, the report finds.

The hottest markets for 2014 won’t be in the big cities. A joint study of more than 1,000 real estate industry experts done by PwC and the Urban Land Institute ranks real estate prospects in smaller secondary markets including Houston, San Jose, Dallas/Fort Worth and Austin above those in larger cities like Chicago, Atlanta and Washington, D.C., where “there's a lot of money chasing a few assets,” says R. Byron Carlock, Jr., PwC national real estate practice leader.

It’s still 35 percent cheaper nationally to buy a home than to rent one, but that doesn’t mean millennials are rushing out to get a mortgage. Just 18 percent of consumers surveyed in September by Credit.com said that buying a house was still their definition of “the American Dream.”

The Most Important Tips for Mortgage Borrowers in 2014

The Most Important Tips for Mortgage Borrowers in 2014

By Polyana da Costa

The clock is ticking for buyers and homeowners who want to grab a low mortgage rate in 2014. But if you stay on top of your game, keep your finances in order and act quickly, you can still grab attractive mortgage deals.

These 10 mortgage tips can help you with your mortgage decisions in 2014.

Document your finances.
Lenders will be extra diligent when underwriting home loans in 2014, as new mortgage regulations go into effect in January. The rules put pressure on lenders to verify that borrowers have the ability to repay their loans.

Keep good records of your finances, including bank statements, tax returns, W-2s, investment accounts and any other assets you own. Be ready to explain any unusual deposits to your accounts. Yes, the $500 that Grandma deposited in your account for Christmas could delay your loan closing if you can't prove where the money came from.

Lock a rate as soon as you can.
Rates will likely climb in 2014 as the Federal Reserve is expected to reduce the pace of the economic stimulus program that has long helped keep rates low. If you are planning to get a mortgage, lock in a rate as soon as you are comfortable with the numbers.

Refinance now -- if you still can.
Many homeowners lost the opportunity to refinance at a lower rate when rates jumped in 2013. But those who are still paying more than 5 percent interest on their home loans might still have an opportunity.

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If you think you may be able to save with a refinance, but you are not sure, it doesn't hurt to try. Speak to a loan officer and take a look at the numbers to see if refinancing still makes financial sense for you after you consider how long it will take to break even with the closing costs.

Buyers, use your bargaining power.
As mortgage rates climbed, lenders lost a big chunk of their refinance business. In 2014, they will turn their attention to homebuyers and will fiercely compete for their business. Buyers should take advantage of bargaining power they gain with that increased competition. Shop around for the best deal and look beyond the interest rate on the loan.

Learn your rights as a borrower.
Mortgage borrowers will get many new rights as consumers this year when new mortgage rules created by the Consumer Financial Protection Bureau go into effect in 2014. If you run into issues with your mortgage servicer in 2014 or fall behind on your payments, make sure you are aware of your rights and put them to use.

Take good care of your credit.
It's nearly impossible to get a mortgage without decent credit these days. That will continue to be the case in 2014. If you are planning to get a mortgage, monitor your credit history and score until your loan closes. The best mortgage rates usually go to borrowers with credit scores of 720 or higher. You may still get a mortgage with a score of 680, but lower scores will mean higher rates or higher closing costs.

Don't overspend.
Lenders don't want to give out loans to borrowers who will have little money left each month after they pay their mortgages and other debt obligations such as credit cards and student loans. If that becomes the case, the lender will tell you that your DTI, or debt-to-income ratio, is too high and you don't qualify for a loan. Try to keep your monthly debt obligations, including your mortgage and property taxes, below 43 percent of your income.

Consider alternative mortgage options such as ARMs.
Mortgage rates are rising, but there are alternatives to grab a lower rate, depending on your plans.

A homeowner planning to keep a house for seven to 10 years could take advantage of lower mortgage rates by choosing a seven- or 10-year ARM instead of the 30-year traditional fixed-rate mortgage. Rates on adjustable-rate mortgages can be as much as one percentage point lower than on fixed-rate loans.

If you are not sure for how long you plan to keep the house, a fixed-rate loan is probably the better choice.

Considering an FHA loan? Reconsider.
FHA loans have long been popular among first-time homebuyers because they require low down payments and have somewhat less strict underwriting standards than conventional loans. But they come at a price. Mortgage insurance premiums on FHA loans are likely to continue to rise in 2014, and after recent changes, the borrower is now required to pay for mortgage insurance for the life of the loan. Try to qualify for a conventional loan before you apply for an FHA mortgage.

Don't panic.
Yes, mortgage rates will likely climb in 2014. But don't panic, thinking you have to buy a home now to grab a low rate. If you are shopping for a home, do your best to move quickly, but remember that this is one of the biggest financial decisions of your life. Get your mortgage and buy your home when you feel ready.

New Mastermind Location!

Happy New Year Masterminds! 

The year is off to a great start. What is your plan for the new year? What is the ONE THING that you want to accomplish? More time with family? More business? More relationships? A special vacation?  

I would like to take a second to share my ONE THING. The one thing that I want to do this year is share my VA program with everyone. I am posting video’s, sending out emails and sharing on all social media. I am telling every man, woman and child about this awesome program. Is it enough? I don’t think so. I only have a small reach in the great state of Oklahoma. I need YOUR help. Please share IN this program. (You heard me right, share IN the program). Please participate and tell YOUR circle of influence about this awesome way to welcome our soldiers home! ZERO lender fees and up to a $1,000.00 lender credit! This is not a VA program, this is a Jerry Ashford Team program! I want to be THE VA lender in the state. I want to give every military family this special opportunity. I can only do it if you help me get the word out. Partner up with me and my team and lets thank those that fight for our country. Call me and we will discuss ways that you can be a part of this awesome program.

 

Is VA the only loan program we have? Of course not! We offer USDA, FHA and Conventional mortgage loans as well. Construction Loans? Yes!

 

Our Mastermind has moved to the Bethany Library this month. The link is below. Please sign up so we can get a head count. Bring your friends with you, I would love to meet them!

 

https://www.eventbrite.com/e/mastermind-okc-a-7l-gengen-event-9-2014-business-plan-january-8th-tickets-9585473409