Could you pay too much for your mortgage? If you’re like millions of Americans, the answer is probably, "YES" — and that means you may be throwing tens of thousands of dollars of your hard-earned money at the bank, when you don't need to.
Why is it that buyers put so much thought and effort into looking for the right home, and so little into how to finance it?
Hire a buyer's agent (like me!!!) that knows how to help you in the process. Ask your agent if they know how to help you get the seller to buy your mortgage interest rate down. How much money could you save over 30 years if the interest rate was even a quarter percent lower?
A half a percent could be more than $25,000 mistake for the average home buyer (if you consider the average home sold in the U.S was around $322,000). What if you shopped around? Found a lower rate, and then had that rate lowered even more? What type of costs are associtated with your loan? Are they negotiable? Will another lender be able offer lower costs, like the orignation fee, doc fee, processing fee?
That's a lot of money!
Luckily, shopping around for a loan is pretty easy, first, consider what type of loan makes the most sense for you and figure out how large of a loan you can afford. Keep in mind the amount that a lender qualifies you for, may be way higher than what you feel comfortable with (there are dozens of online calculators that can calculate your monthly payments and more), set the number yourself, and know what that number is ahead of time.
If you are ready to buy in the Portland/Vancouver metro market, contact us today, we will show you how to save even more on your mortgage!
Denice Neddo, Broker and Real Estate Coach
360-607-4226 Mobile TEXT
?INFO FROM MARKETWATCH.COM
The following are 10 ways that can actually lower the value of your home:
- Overbuilding the area. Yes, you can improve your home too much. No matter what you do, your home is only going to be worth so much in the location that it is in. Make sure that you pay very close attention to the values in your neighborhood. Look at the common features of homes in your area. Talk to a trusted real-estate agent or an appraiser, and ask for an appraisal without improvements and another with them. If it doesn't pay off, then it's not worth it.
- Overbuilding one specific room in your house. If you put $40K into your kitchen without remodeling the rest of your home, the house will not sell because it is inconsistent with the other rooms of the home. Find out what's the baseline in your particular neighborhood — and anything you can do to bring your home up to that baseline … is probably an investment worth doing,"
- Making the “White Elephant”. If you remodel your home, and eliminate common features simply because you do not use them, you could be killing your resell value. It's fine to add a personal touch to your remodel, but remember that you likely won't live in your home forever. Remember that your changes need to speak to a future homeowner. Or be prepared to eat your additional investment — and possibly more.
- Messing up the floor plan. Too many people aren't careful when they add square footage to a home. Adding a bedroom where there is a walk through to the laundry room creates 'functional obsolescence,'" Another example: adding a bedroom on the one side of the house when the bathrooms are on the other side of the house. Keep in mind the functional integrity of the floor plan and stick with it.
- Above ground pools. No need to say any more. If you want to sell your home, take it out before you put it on the market, and repair the grass under or area underneath.
- Remodeling yourself without any previous skills. You can see a self-improved remodel from a mile away. Prospective buyers will run. It pays to use a licensed and bonded contractor. You get what you pay for. It’s an investment.
- Remodeling areas that do not have space for the items that you are planning on putting into the room. Oftentimes when homeowners remodel a kitchen or a bathroom, then place larger items in there than neccessary. For example, remodeling a bathroom and adding a sink that is built in to a piece of furniture, this giant piece of furniture overwhelms the bathroom. The space ends up feeling cramped, and future homebuyers will pick up on that, and take a pass on your house.
- Getting too trendy. Styles change quickly, avoid putting in items that are too trendy and non-standard. You may regret it in a few years.
- Coverting the Garage. You can easlily create 'functional obsolescence' here. Because you've removed covered parking, the space is no longer comparable to the houses in the area that have parking. When you sell your home, buyers will see that the rest of the neighborhood has parking, while you don't. You might have spent $10,000 to convert a garage into a living room or a man cave and the appraiser might turn around and say "the additional $10,000 is lost because of the impact of not having covered parking." Don't turn the garage into a living space. If you really need additional space, consider an addition to the home.
- Not getting a permit. This can not only blow up your potential buyers financing, but it also creates problems with identifying the number of bedrooms and bathrooms that are on record with the county. The permitting agencies may require you to undo all of your work after the fact.
How to Know When to Sell Your Home
Lenders that Sell Short Sales Faster and for Less, According to RealtyTrac
Pursuing a short sale is often thought of as a painstaking process, and it’s not uncommon to hear of complaints about slow responses from servicers and last minute rejections on offers. Fortunately, not all lenders/servicers are the same when it comes to dealing with short sales, and RealtyTrac compiled a list of data revealing which institutions tend to move through the process quicker and for less.
Fannie Mae, Freddie Mac, and FHA had the shortest timelines at 193 days in January 2012, a decrease compared to a year ago in January 2011, when short sales averaged 248 days. Ally Financial came in second at 321 days, reducing its timeline as well from 393 days a year ago.
PNC Financial Group was third, taking 353 days, though the bank takes longer than it did a year ago when the it took 206 days. Wells Fargo came in fourth (385 days). Bank of New York Mellon took the fifth longest (402 days), followed by Bank of America (403 days) and Sun Trust (404 days). The short sale timeline includes the time a property starts the foreclosure process to the time it’s sold as a pre-foreclosure property.
Recently, Fannie Mae and Freddie Mac announced new guidelines to take effect in June requiring servicers to respond within 30 days after receiving a short sale offer or a borrower application. Bank of America recently announced that its providing a decision on a short sale offer in 20 days.
In terms of pricing, Fannie Mae, Freddie Mac, and FHA sold homes for the least amount in January 2012, averaging $128,642, a drop from year ago prices in January 2011 when they averaged $160,982. Deutsche Bank’s average price was $132,996, followed by Sun Trust Banks ($144,024), and CitiGroup ($148,411), and PNC Financial Group Inc ($149,332). Bank of America Wells Fargo were the bottom two on the top 10 list, averaging $158,632 and $167,371, respectively, for January 2012.
As for the number of short sales, Bank of America completed the most in January 2012, with 5,276, followed by Chase (2,967), Wells Fargo (2,788), MERS (1,429), and Bank of New York Mellon (1,401).
Vancouver Area Farmers Markets
Nothing says spring time like a trip to the Farmers Market, when you see the fresh produce, the plant starts, and honey, you know that summer is right around the corner!
Here is a list of some markets in the area you can check out!
Portland Vancouver Garden Ideas
What’s not to love about a garden filled with edible fruits and vegetables?
You can grow your very own “edible garden” in a number of ways – from dedicated vegetable gardens to mixing herbs and veggies with your flowerbeds, to containers, trellises or raised beds of culinary delights.
If you live in the Pacific Northwest, you know that a garden can have challenges. From the weather in the Portland Vancouver area, to space, and soil type, there can be some issues.
Here a few ideas to help you start small, inexpensively, and enjoy a great harvest!
Go Vertical! Coffee cans attached to a vertical wall make a great herb garden. Punch a few wholes in the bottom of the cans for drainage, then place an inch or so of small pebbles in the bottom of each can and fill halfway with organic potting soil. Add your herb, and fill to an inch below the rim of the can with more potting soil.
Gutters hung with small chain and filled with flowers, herbs, and lettuce.
These stacked cinder blocks can make a great garden in a narrow area. Heat loving plants thrive if you locate the garden on a south facing wall, and on a slab of cement. The heat from the day will soak into the blocks and keep your heat loving plants like tomatoes, peppers, basil, oregano, marjoram, flat leaf chive, sage, thyme, rosemary, and strawberries happy and warm.
Short Sale: Will you pay taxes on your short sale?
The Mortgage Forgiveness Debt Relief Act is expiring in December 2012.
The act offers relief to homeowners who would formerly owe taxes on forgiven mortgage debt after facing a short sale or foreclosure on a primary residence. With some short sales taking up to a year to close, time is of the essence in your decision.
For more information, please contact us immediately or consult with your real estate attorney.
If you owe a debt to someone else and they cancel or forgive that debt, the canceled amount may be taxable.
Generally, the Mortgage Forgiveness Debt Relief Act allows exclusion of income realized as a result of modification of the terms of the mortgage, or foreclosure on your principal residence.
What does exclusion of income mean?
Normally, debt that is forgiven or cancelled by a lender must be included as income on your tax return and is taxable. But the Mortgage Forgiveness Debt Relief Act allows you to exclude certain cancelled debt on your principal residence from income. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief. Learn more here.
Contact Denice at 360-607-4226
Short Sales: Lenders Are Paying Borrowers to do Them!
Lenders are allowing more short sales by financially strapped homeowners and a few people are even getting cash to complete the sale.
A short sale is when a lender allows a home owner to sell their home for than they owe on the unpaid mortgage. A short sale is a newly popular alternative to foreclosure.
We have seen an increase in short sales for the past several months, but the financial incentives — which we have seen randomly and infrequently, are starting to appear more and more often.
Here are a few of recent examples:
CHASE went national with their short-sale incentive offers last year, paying up to $35,000 in some cases. We have seen $20,000 here locally, and not just on high dollar mortgages either.
Bank of America seems to be testing their program with incentives from $5,000 to $25,000 in Florida to see if they should be expanded to more states. The Florida program began last fall, spokesman Richard Simon says.
Wells Fargo is offering incentives from less than $3,000 to $20,000, spokesman James Hines says.
Short sales, even with incentive payments to borrowers, can save lenders money compared with the expenses involved in completing foreclosures. Especially in states that foreclose through the court system. (In Washington and Oregon, most foreclosure are done through a Trustee Sale, not via judicial foreclosure).
In states such as Florida where foreclosures go through the courts, 50% of loans in foreclosure are more than two years past due, says a January report by mortgage tracker LPS Applied Analytics. TWO YEARS!!
Banks are becoming more and more willing to do short sales now than in the past, but they still take time to complete the process. Cash incentives appear to be limited, and borrowers are not sure if the offers they are receiving are real or fraud. When the media is reporting about scams, it is difficult to believe a letter from the lender offering cash to complete a short sale could actually be legitimate
When a loan modification isn’t possible and more times than not, it is not an option for most borrowers, a short sale may be a better and faster solution than foreclosure. The lenders won’t say how often they extend such incentives. The offers are random. It is difficult to understand how the borrowers are selected to receive these incentives.
It appears that these short sale incentives are more common for loans in states where foreclosures take more time, and in states that are experiencing a very high number of defaults.
In November, short sales accounted for more than 9% of single family home sales and were up 32% from the year before, according to CoreLogic.
Market researcher Dataquick also shows short sales increasing from January 2011 through last month throughout California and in Phoenix, Miami and Seattle.
The federal government’s HAFA foreclosure prevention program also offers short sale incentives, at least $3,000 for sellers, but far more short sales are being done outside the government program.
Through December, just 26,901 short sales had been completed through the Home Affordable Foreclosure Alternative (HAFA) program.
In contrast, Bank of America, the largest servicer of home loans, did 107,000 short sales last year. That was up from 92,000 in 2010, which was double the 2009 volume, it says.
For more information on short sales, call Denice at 360-607-4226