Beat The Stress Of Buying A Home

This is an article we are sending to our clients next month that are in the process of looking for a home. This article is courtesy of ByReferralOnly. Great tips on how to beat the stress of buying a home.

1.  Begin with the end in mind.

Have an ultimate scenario of where you’re trying to be.  What will life be like when you get there?  How will it be better than where you are now?  Dwell on that picture and write it out, fill up at least a page about how it feels in the new place.  This is imperative.

Having the goal in front of you at all times energizes you to achieve it, in spite of setbacks and frustrations.  Emotions will run high and you need an anchor.  You must focus on that future goal when anxiety threatens to get the better of you.

2.   Be flexible.

In your monetary calculations, overestimate by a thousand dollars.  In this market, anything can happen between contract acceptance and closing.  It could be the inspections reveal areas of concern that the seller is unwilling to fix or the repair costs are higher than the amount limited in the contract.

Or the interest rate changes which affects the necessary down payment and closing costs you’ll need to come up with.  As your real estate team, we’ll strive to tie up loose ends as quickly as possible, but remember there is no perfect world.  Most buyers feel a bit overwhelmed when taking on a new mortgage and the responsibilities of a new home.

We’ve seen many buyers get angry when it seems like the cost just keeps going up.  Anger is caused when reality doesn’t match up with the expectations you had in your mind.  If you anticipate this happening in advance, you won’t get angry.  In fact, it’ll probably go better than you expected.

3.  Trust in the process.

There’s just so much to do, it’s easy to panic.  You wonder if it will ever work out.  In fact, when we bought our house, we couldn’t eat for a day, we felt so sick to our stomachs!  You think you’re taking a big chance, but the truth is you’re giving yourself a big chance.

Even though you can’t see every step of the way, as you move towards your goals, the way opens up.  We know that you haven’t moved in a long time and it’s a major upheaval in your life.  But we’ve been there many times before, and we’ll be looking out for you.  Trust that we know the way to get you there.

4.  Get knowledge.

One thing you’ll probably feel during this transition time is being out of control.  It feels like everyone else has taken over your life.  The seller, your Lender, the appraiser, the inspectors, all have the power to say yes or no to your moving plans.

We’ll try our best to let you know ahead of time what your expenses will be, and what the unknowns are.  We’ll tie down the loose ends as soon as possible.  We’ll try to get your loan approved within a reasonable time frame.  We’ll educate you as best we can and let you in “behind the scenes” so you won’t ever feel stupid or out of control.

Loan Option for Veterans & Active Duty Personnel

Did you know there is a special loan program for veterans and those actively serving in the military?

The program is called a VA Home Loan.

What is special about a VA Home Loan?

The VA home loan allows veterans to purchase a home without putting money down for the down payment. This is based on qualifying income, credit history, and most importantly VA eligibility.  With this program, a veteran does not need to provide a down payment, as long as the sales price is not higher than the appraised value. However, one will still need to have money to put towards closing costs.

This loan program is particular appealing to first time home buyers. There is no stress at providing a down payment, which most loan programs require a minimum of 3.5% down or more.

Who is eligible for a VA Home Loan?

There are four groups that are able to receive a VA Home Loan based upon eligibility.

• Veterans
• Active duty personnel
• Reservists/National Guard members
• Some surviving spouses

How do you prove to a lender you are eligible for a VA Home Loan?

It most cases your lender will request a COE (Certificate of Eligibility) on your behalf to ensure you are eligible to receive a VA Home Loan. Borrowers can also receive this certificate on their own by contacting the Department of Veteran Affairs.

Where can you apply for a VA Home Loan?

You can apply with any lender that participates in the VA Home Loan programs. Stateline Funding Corp. is a company among others that offers VA Home Loans.

Best Places to Live in California

Where are the best places to live in California?

Money Magazine recently published the top 100 cities to live based on area, population, number of jobs, schools, average income and other criteria.  Since we are a California Mortgage Lender, we wanted to focus on the 5 California cities that Money Magazine chose as the best.

California cities that made the list:

#6 Irvine

Irvine made the top 10 list of the best cities to live in the United States. One of the reasons Money Magazine chose this city was based on the great location in California. Irvine is only 10 miles from the beach and has tons of bike trails and parks for an active lifestyle.

#27 Cupertino

This city has a population of 58,700 and is located in the heart of Silicon Valley. This is city is extremely diverse and highly educated. According to Money Magazine, 60% or more of the population has a bachelor’s degree or higher. If you are looking for high performing schools, then this is the place for you!

#34 Chino Hills

Chino Hills is known for its safe neighborhoods and great schools. According to Money Magazine, this city actually has a higher median income than Beverly Hills! It’s a beautiful area in Southern California with great shops nearby.

#41 Diamond Bar

According to Money Magazine, Diamond Bar is actually most known for their holiday decorating. Neighbors compete in lawn displays and light displays to be known as the best holiday decorator. This city also had the first dog park known as  Bark Park. The only negative thing about this city is the high taxes they have to pay.

#42 Yorba Linda

The last California city to make the list (above the top 50) was Yorba Linda. This city is located in Orange County and has great trails to run and hike on. Money Magazine recognized this city for its beautiful horse trails within the community. If you are going to live here, you need to keep in mind the price tag that comes along with it. Most homes are around $500,000 or higher.

Buying a Home as a College Graduate

If you have recently graduated and are eager to buy a home, but not sure if you are able to, then this article is for you.

Generally, in order to purchase a home, lenders require a minimum of two years. As a college graduate that is not that case with an FHA home loan.

If you graduated from college, and get a job in a field of work related to your degree, you do not have a waiting period to purchase a home. In this scenario, your college degree would count as previous work so you do not need two years of employment.

Now keep in mind, you must be employed in order to qualify for an FHA loan. Lenders will need your current pay stubs to show your income qualifies for the house payment, as well as making sure your job relates to your degree.

There are many graduates that don’t know about this loan program.

Another great benefit with FHA is the low down payment to buy a home. FHA only requires a 3.5% down payment. For example, if you are purchasing a home of $200,000 you only need to bring in $7,000. Another benefit is your down payment can be a gift from a family member or friend.

An FHA loan is the best way to go for first time home buyers and recent college graduates.

Don’t let a mortgage payment deter you away from purchasing a home. Many college graduates may think they won’t be able to afford a mortgage payment after finishing school. What you don’t realize is that in many cases, rent can actually be more expensive than a mortgage payment.

So if you are a recent college graduate that was just employed, go ahead and look into buying a home with an FHA loan.

Questions To Ask Your Mortgage Lender

In a newsletter we mailed to our clients, we provided 4 questions to ask your mortgage lender before signing their documents. These are the basic questions that help you determine if you are working with the right lender.

1.  Do you have a variety of loan programs to fit my cash flow and expected length of ownership needs?

If you’re going to live in your new home for less than five years, you may want to consider an adjustable rate mortgage or “ARM.” With an ARM your payments will be lower, but they will go up according to the terms of the loan. If you’re going to live in your new home for over five years, a traditional fixed-rate mortgage may be a better plan.

With whatever lender you choose, you should have the ability to have multiple options to fit your lending needs. If you are a first time home buyer and need down payment assistance, be sure to ask your lender what down payment programs are available. The most popular is the 3.5% down payment with the FHA loan. An experienced lender will give you options to discuss what will be in your best interest.

2.  Do you offer written mortgage pre-approvals, not just pre-qualifications?

A pre-qualification is usually a Lender’s opinion of your eligibility for a loan.  If you ask to be pre-approved, the lender will actually submit your job and credit history to an underwriter and get a conditional approval for a loan and a loan commitment.  The advantage of having a pre-approval is that it will make your offer to buy a home stronger and it will usually allow you to close on the home faster.

At Stateline Funding Corp., we issue pre-approvals. We never let our buyers make offers without have the guarantee that they qualify for the loan.

3.  Do you have the ability to handle difficult credit history?

Many Lenders will only work with you if you have perfect credit, and if a problem comes up, they won’t help you.  Make sure your lender has reviewed and received approval for you and your specific credit history.

If you have credit issues, ask your lender what steps you need to take in order to be qualified to purchase a home. If they give you steps, make sure you follow them so you can be able to purchase sooner than later.

4.  Is the rate you quoted me the rate I’ll get at closing?

Many Lenders advertise their rates in the paper and in homes magazines.  These are called “teaser rates” in the industry.  The name says it all. After they’ve got you committed to using them, many lenders then tell you what the “real” rate will be.  By this time, it’s too late for you to do anything about it.

This happens all the time in our industry. At Stateline Funding Corp. we monitor real time rates. We are able to understand what affects the interest rates and changes them on a daily, even hourly basis. We have even had prospective clients experience this teaser with other company’s, but they are too involved in the process to back out.

We always deliver on whatever we promise. We are not in the industry to manipulate home buyers, we are here to help. You should be working with a mortgage lender that cares about you as an individual, not a number.

So remember as you are looking for a mortgage lender to ask these 4 important questions before you begin the process.

Fannie Mae Profits 2nd Quarter

One of the main factors to determine how the real estate market is doing is to actually look at the books of a company such as Fannie Mae. Just posted on Wednesday, August 8^th, Fannie Mae recorded a $5.1 billion profit during the months of April through June. This is a big sign as the company will not need any more bailout money this past quarter.

Fannie Mae received a huge bailout back in 2008 due to being near bankruptcy. This is a good sign that the company is bouncing back as well as the real estate market.

As of the end of the second quarter, Fannie Mae has profited $7.8 billion the first half of 2012. The reason behind the company’s successful quarter is due to “improved home prices, improved sales prices on the company’s real-estate owned properties, and a decline in the single-family serious delinquency rate”, according to executive vice president and chief financial officer, Susan McFarland.

According to Fannie Mae’s press release, single-family serious delinquencies have declined for the ninth consecutive quarter.

Fannie Mae is using these profits to pay back its debts to the Department of Treasury. Fannie Mae has stated to be paying out $2.9 billion to the Department of Treasury for their second quarter dividends.

No one is going to declare a housing recovery as of yet, but it is encouraging when the signs show improvement.

Here is a chart provided my Fannie Mae regarding the withdraws from the Department of Treasury as well as the pay backs between 2008 to 2012.

 

 

 

4 Tips That Can Save You Thousands

We provide monthly newsletters to our clients who are either shopping for a home or wanting to buy relatively soon. This article, written by Randy Glasbergen (2006) talks about 4 tips that can save you thousand when wanting to buy a home.

1. Don’t Get Pre-Qualified.

Get pre-approved.

Do you want to get the best house you can for the least amount of money?  Then make sure you’re in the strongest negotiating position possible.  Price is only one bargaining chip in the negotiations, and not necessarily the most important one.

Often other terms, such as the strength of the buyer or the length of escrow, are critical to a seller.  This process takes anywhere from a few days to a few weeks depending on your situation.  It’s VERY POWERFUL and a weapon we recommend all of our clients have in their negotiating arsenal.

2.  Sell First, Then Buy.

If you have a house to sell, sell it before selecting a house to buy!

Let’s pretend that we go out looking for the perfect house for you.  We find it and

you love it!  Now you have to make an offer to the seller.  You want the seller to reduce the price and wait until you sell your house.

The seller figures that’s a risky deal, since he might pass up a buyer who DOESN’T have to sell a house while he’s waiting for you.

So he says OK, he’ll do the contingency but it has to be a full-price offer.  So you see, you paid more for the house than you could have because of the contingency.  Now you have to sell your existing house, and in a hurry, otherwise you lose the dream house.  So, to sell quickly you might take an offer that’s lower than if you had more time.

3. Play the Game of Nines.

Before house hunting, make a list of nine things you want in the new place.  Then make a list of the nine things you don’t want.  We call this Nine of This and None of That.

You can use this list as a scorecard to rate each property you see.  The one with the biggest score wins!  This helps avoid confusion and keeps things in perspective when you’re comparing dozens of homes.

When house hunting, keep in mind the difference between skin and bones.  The bones are things that cannot be changed such as the location, view, size of lot, noise in the area, school district, and floor plan.  The skin represents easily changed surface finishes like carpet, wallpaper, color, and window coverings.  Buy the house with good bones, because the skin can always be changed to match your tastes.  I always recommend that you imagine each house as if it were vacant.  Consider each house on its underlying merits, not the seller’s decorating skills.

4.  Don’t Be Pushed Into Any House.

Your agent should show you everything available that meets your requirements.  Don’t make a decision on a house until you feel that you’ve seen enough to pick the best one.  Review the Multiple Listing printout with your agent to make sure that you are getting a COMPLETE list.

In the late 1980s, homes were selling quickly, usually a few days after listing.  In that kind of market, agents advised their clients to make an offer ON THE SPOT if they liked the house.  That was good advice at the time.  Today there isn’t always this urgency, unless a home is drastically under-priced, and you’ll know if it is.

 

Inland Empire Mortgage Help Center

As of August 1, 2012, Fannie Mae has opened Mortgage Help Centers in the Inland Empire. These help centers provide free education and counseling to help California homeowners that are struggling in keeping their home. The goal is to provide valuable and helpful information that will provide the tools necessary to avoid foreclosure.

As we discussed in a previous blog, Fannie Mae is hoping these Mortgage Help Centers will reduce the amount of foreclosures in the country. In order for these help centers to be effective, homeowners need to seek help early on while there is still time to make changes and prevent foreclosure.

Fannie Mae wants to stress that these Mortgage Help Centers are absolutely free. This is information available to the public to help communities and struggling homeowners.

According to Clemente A. Mojica, President and CEO of Neighborhood Partnership Housing Services, Inc. “The Fannie Mae Mortgage Help Center is an example of bringing tangible resources to address a regional issue.”

The Los Angeles Mortgage Help Center, which opened in November of 2010, has already helped 2,320 homeowners. According to Keosha Burns from Fannie Mae, “more than sixty percent of those who have been helped have received a workout that allowed them to stay in their homes.”

As long as struggling homeowners are aware of these help centers and seek help before it is too late, these centers can be very helpful in keeping their home. It will provide knowledge and steps to make improvements in one’s financial situation in order to maintain ownership. Currently, there are twelve Fannie Mae Mortgage Help Centers in the country.

These mortgage centers do not guarantee the ability to avoid foreclosure, but they can evaluate each situation and provide counsel to make the right steps.

If you want to know if your home is owned by Fannie Mae, you can do so by visiting www.fanniemae.com/loanlookup. The Mortgage Help Center website is www.KnowYourOptions.com