Understanding Closing Costs

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Many people do not realize how much closing costs can be when buying a home.  If you plan to buy a home soon, here is a list of closing costs that you will need to consider:

Other fees may be including depending on type of property, where the property is located, etc.  Typically closing costs are 3 to 4% if purchase price.

Feel free to contact me if you have more questions about closing costs or real estate in general!

Sheri Negri, Realtor
Lyon Real Estate
Sheri@LoveForHomesSac.com

 

The Home Affordable Refinance Program (HARP)

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The Home Affordable Refinance Program (HARP) has been extended through December 31, 2013 and allows homeowners to refinance into low mortgage interest rates even if the property has decreased in value.

Established in 2009, for Fannie Mae and Freddie Mac, the Home Affordable Refinance Program provides an option for homeowners to refinance “Under Water Mortgages”. A HARP Refinance addresses situations where the homeowner’s property value has fallen causing them to no longer to qualify under traditional underwriting criteria. Homeowners with a loan owned by Freddie Mac or Fannie Mae have the opportunity to refinance with any participating lender as long as the resulting loan is less than 125% of the current property’s value.

The following criteria must be met to qualify for the Home Affordable Refinance Program:

 

  • You must live in the home being refinanced.
  • A HARP refinance only applies to Fannie Mae or Freddie Mac mortgages.
  • The homeowner must be able to afford the new lower payment.
  • The current mortgage must be up to date with no late payments in the past twelve months.
  • Payments on the new loan must be more affordable or more stable than on the existing loan.
  • The maximum Loan to Value (LTV) cap has been removed on home owners looking to refinance in to a fixed rate mortgage.
  • However for homeowners looking to refinance in to an adjustable rate mortgage the maximum LTV is set at 105%.

The popularity of the HARP mortgage program has steadily grown since 2009. The three months ending in February 2011 saw record volume of 145,000 new HARP loans.

A participating lender can determine if your loan is owned by Fannie Mae or Freddie Mac and can further evaluate your eligibility. To contact one, fill out the convenient 4 step form to the right.

Go to the following link to determine whether or not your loan is owned by Fannie Mae or Freddie Mac:

http://harp-mortgage.com/who-owns-my-loan/

 

16 Ways to Lose Your Lover & Only 8 Ways to Lose Your Loan Approval

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The mortgage process takes time.  Especially if you are a buyer who put in an offer on a short sale.   Unfortunately most of the waiting times are things our of our control.

While you are in this waiting period, it is important to keep in “good behavior”.  Here are eight things you should absolutely NOT do between your date of application and your date of funding:

  1. Don’t buy a new care or trade-up to a bigger lease
  2. Don’t quit your job to change industries or start a new company
  3. Don’t switch from a salaried job to a heavily commissioned job
  4. Don’t transfer large sums of money between bank accounts
  5. Don’t forget to pay your bills — even the ones in dispute
  6. Don’t open new credit cards — even if you are getting 20% off
  7. Don’t accept a cash gift without filing the proper “gift” paperwork
  8. Don’t make random, undocumented deposits into your bank account

Some of these may be a bit unpractical.  However, some of these things can help you continue to qualify for your loan based on credit score and loan to value numbers which are checked again right before final funding.

If there is any question, it is always good to consult your lender to ensure it will not impact funding your loan!  Sometimes it is not getting approved that is hard–it’s staying approved.

 

Add Season Warmth to Your Home

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Here are some tips on how to add season warth to your home:

Pick the Right Pillows

A room isn’t done without pillows.  Choose pillows in warm colors made of a soft down mix so they’re comfortable to
lean into.

pillows on living room sofa

Add a Layer of Texture

Anything with texture adds dimension. Nubby fabrics and textured wool area rugs make a room cozy.

couch with pillows in front of a hutch

Sprinkle on Spicy Colors

Reds, burgundies, or golds instantly transform a plain room. You don’t haveto paint the walls; you can add these tones in the drapes, furniture, pillows, rugs, or art.

red and yellow throw pillows on a beige sofa

Create a Hide-a-Way

I always tell clients that you can’t control the outside world but you can create a world on the inside of your home that is good to you. In the fall,  when you’ll be spending more time indoors, it’s important to carve out a corner for yourself. Maybe it’s a tabletop in the corner of your living room  or in your bedroom.  Fill a bulletin board with images of things you love: photos and mementos from trips, ticket stubs from a great show, cherished letters. Small collections of shells, rocks, and candles are simple things that are good for your soul.

Living Room, chair, window seat

Go the Extra Mile

Place a luxurious throw over a chair or a couch.  I always include a high-quality throw in all my clients’ family rooms.

woman in brown shirt and skirt holding three blankets

Light Up

Candles bring mood and character to a space. To avoid the risk of fire, try battery-operated flameless candles (look for versions made with real wax); they emit a nice warm glow.

candle centerpiece

Think Accessories

It’s all in the accessories. If a room is empty, it’s going to feel cold and unwelcoming. Style every table with personalized vignettes: Choose a few special items, keeping in mind that contrasts in shape and texture work best. I always look for funky, slightly off-the-wall pieces at antiques stores and flea markets. These have the most personality and are conversation-starters when put on display.

bird nest and butterfly paper

Cover Those Windows

Drapes warm up a space. If you currently have wood blinds or mini-blinds, consider changing those for a fabric Roman shade, or even better, add floor-to-ceiling drapes. The fabric softens the room and adds glamour.

detail of curtains

Pile on the Rugs

An area rug is an instant color and pattern makeover and grounds a room. I throw them right on top of carpets or summer’s sea-grass rugs.

detail of floor

Make it Your Own

Warmth can also come from personalization. Displaying a collection or hanging family photos in unusual frames — anything that gives a room your personal touch — is meaningful.

detail fireplace

Source of Information:  Better Homes & Gardens

Finance FAQs for Home Buyers

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Below are frequently asked questions I get from homebuyers who are in the process of buying a home.

What is a mortgage?

A mortgage is a loan used to buy a home or other real estate property, with the home serving as the collateral for the loan, acting as the guarantee that the loan will be repaid.

What’s in a payment?

Payments are comprised of principal, interest, property taxes, and possibly mortgage insurance. In the cases of condominiums, maintenance fees may apply as well. However, the real question is: how much can you repay over how many years? Consider how quickly you could repay your loan. Is it 15 years, 20 years, 25 years, or 30 years? Typically, the sooner you repay the loan, the more you’ll save on interest payments. However, the longer you extend the term of your financing, the lower your monthly payments may be. When choosing a loan term, consider your budget, your long-term spending patterns, your income over the life of the loan, and how long you plan to stay in your home.

What is a fixed rate (mortgage)?

The interest rate is set for the full length of the loan and doesn’t change.  Therefore, since the monthly mortgage payment for principal and interest stays the same for the life of the loan, it’s easier to plan a budget using this sort of loan.

What is an adjustable rate mortgage (or ARM)?

An adjustable rate mortgage (ARM) usually starts with a lower initial interest rate than traditional fixed rate loans. After a set initial payment period—anywhere from one to 10 years—the interest rate may change periodically based on market conditions. As the rate changes, so does your monthly payment.In addition, ARM loans feature an adjustment “cap” that limits how much the interest rate can go up, protecting you from large increases in your monthly payment. If you plan on being in your home for a shorter period of time, or expect your income to increase over the years, an ARM loan may be right for you.

What is the property appraisal?

A professional appraisal is done to determine the value of the home or other type of real estate. An appraisal is based on the home’s condition and selling prices of comparable properties in the area.

What is the best mortgage for me?

The best mortgage is one that you can afford without cutting in on other necessities, and has interest rates and terms and conditions that give you peace of mind. Use the handy mortgage calculator found at the bottom of each property listing on our site to get a good idea of which mortgage is the most affordable for you.

How much will my mortgage be?

The size of your mortgage and the monthly payments that you will incur are determined by the price of your home minus the down payment, spread over the term of the mortgage at the interest rate chosen.

Article by:  Sheri Negri, Realtor

www.loveforhomessac.com

 

Conforming Loan Limits Change on Oct. 1

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The maximum FHA, Fannie Mae, and Freddie Mac conforming loan limit will decline to $625,500 beginning Oct. 1, 2011, from the current $729,750 limit, though the majority of counties will fall far below the $625,500 maximum.  The conforming loan limit determines the maximum size of a mortgage that FHA, Fannie Mae, and Freddie Mac government-sponsored enterprises (GSEs) can buy or guarantee.   Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.

Under the new GSE loan limits, Monterey County would see the greatest drop in the loan limit at $246,750, followed by San Diego ($151,250), Sonoma ($141,550), Solano ($140,500), and Napa ($137,500) counties.  Under the new FHA loan limits, Monterey County would see the greatest drop in the loan limit at $246,750, followed by Merced ($201,450), Riverside ($164,650), San Bernardino ($164,650), Solano ($157,300), and San Diego ($151,250) counties.

Regionally, Marin County would be impacted the most, with more than 12 percent of home sales rendered ineligible under the lower GSE loan limit, followed by Contra Costa (11.5%), San Mateo (10.7%), San Francisco (9.9%), Monterey (8.8%), San Diego (8.2%), Sonoma (7.9%), and Santa Clara (7.8%) counties.  Under the lower FHA loan limit, San Francisco County would be impacted the most, with more than 14 percent of home sales rendered ineligible, followed by Santa Cruz (13.9%), Orange County (13.3%), Marin (13.2%), San Mateo and Ventura (both at 12.7%), Santa Clara (12.2%), San Diego (11.9%), Alameda (11.8%), Riverside (11.5%), and Contra Costa (11%) counties.

What does this mean to you and why is it important?

As a result, your once “conforming mortgage” could soon become a jumbo loan, with mortgage rates on the latter pricing about half a percentage point or higher than the former.  So instead of enjoying an interest rate of 4.00% on your home loan, you may be stuck paying 4.50% or higher for the same mortgage next week.  Conforming mortgages are eligible for purchase by Fannie Mae and Freddie Mac, making them more marketable to investors and thus cheaper for consumers.

If possible, consider bringing more money to the table to keep your loan amount at or below the new loan limit.  You may also be able to break up your loan into a first and second mortgage, keeping the first below the new conforming limit.  This should make qualifying easier and will certainly result in a lower interest rate, which could save you a lot of money over the years.

Data Source for Statistics and Limits:  CAR