FirstTimeHomeBuyersNetwork.com

Buying your first home?
It’s not your parent’s real estate market anymore
You’ll find dozens of articles on everything you’ll need to make that move from first time home buyer to first time homeowner

 

Recent Posts

First time home buyers how much does your credit score affect your monthly payment?

It’s very easy for first time home buyers to get caught up in the stream of misinformation floating around on the internet. Unfortunately those that do may be missing the opportunity of a lifetime to own their first home.

Misinformation may be keeping you from owning your first home

Diana Olick from CNBC’s Realty Check shares some interesting facts about how your credit score affects your interest rate and monthly payments. (You might be surprised!)

Zero down payment loans for first time home buyers

We’ve helped thousands of families find the right first time home buyer and down payment assistance programs. They all have one thing in common, they contacted us.

California first time home buyers buying your first home may never get cheaper than this

For first time home buyers buying their first home in California may never get any cheaper than this. Several housing experts are predicting that this year will be the last chance for bargain hunters to cash in on the best deals of the weak housing market.

New tax credit for California first time home buyers

If this were information from the National Association of Realtors you would have reason to be skeptical but these predictions are coming from economic “experts” , presumably on salary and don’t have commissions tied to it.

Zero down payment loans for California first time home buyers

Watch this video as one of the experts from Fortune Magazine shares her thoughts on why 2012 will be a good year for first time home buyers

Incentives for California first time home buyers

Many of the bank-owned properties currently coming out of the foreclosure pipeline are being snapped up by investors who are fixing them up and renting them out — often to those who were displaced by the foreclosure of their own home

Home buying much cheaper than renting

According to Trulia.com many cities in Southern California  are seeing rents increase and home prices flattening.

We have helped hundreds of first time home buyers and their families take advantage of the available first time home buyer programs. They all have one thing in common, they called us.

Read the complete article from CNNMoney

First time home buyer tips - How to get the best deal on a new home!

If you’re a first time home buyer who has decided your first home will be a new home, here are some first time home buyer tips on how to get the best deal.

Over your lifetime chances are one of the homes that you own will be a new one, so why not the first one?

Buying a new home can be an exciting experience for California first time home buyers. It has that same appeal that buying a new car has, new home smell and everything just like you ordered.
But if you’re going to do it, do it right! so you not only get the best deal you’re also  protecting your interests:

Here are some tips for California first time home buyers who want the best deal possible when buying a new home. Homebuilders have to sell homes to stay in business, but they’re also businessmen and will make their decisions on those grounds, so the better prepared you are the better deal you’ll be able to negotiate.
Tip #1Don’t bring a knife to a gunfight – The builder salespeople can be very nice BUT they work for the builder not you. Your first visit to a new home community should always be with your Realtor. This is your first time at the dance and you need a partner who will represent your interest first.

Tip #2Buy when the builder most needs to sell – Homebuilders are usually publicly traded companies, so they have stockholders they have to keep happy. You can get the best deal on a new car if you buy close to the end of the month. With new homes the incentives will flow if you can close at their quarter or year end. (It’s their fiscal year not calendar year)

Tip #3Don’t grind on price – Builders have more homes to sell and if they dramatically lower their price to you they will have appraisal problems on future sales. Besides if you follow Tip #2 there may have been price reductions already.

Tip #4The more flexible you can be the better the deal – Many builders have “standing inventory” (homes that were originally built for someone else) and these homes cost them money every day they go unsold. Some are move in ready, others only need flooring which you’ll be able to choose. Plus they offer you the chance to move into your new home sooner.

Tip #5Beware the upgrades trap – For most homebuilders selling you upgraded flooring and countertops etc are their biggest profit makers, but the dollars in upgrades they offer may not match the actual value. We bought our current home and were quoted more than $30,000 for the flooring we wanted. I went to a local flooring contractor and did it all for $7500. The builder will usually throw out the upgrades as a means of enticing you to use their preferred lender and just like with Realtors in Tip #1, using their lender might have you bringing a knife to a gunfight.

Tip #6Don’t leave down payment assistance on the table – Many of the homebuilder’s preferred lenders don’t offer the full menu of first time home buyer incentives, 100% financing, first time home buyer tax credits  and down payment assistance programs. If having these programs is important to you remember Tip #5, in other cultures it’s called bribery.

For more information on how to use first time home buyer programs and down payment assistance to buy a new home, contact us.

California first time home buyers have a new first time home buyer tax credit!

It’s time to get excited about buying your first home in California!
It wasn’t that long ago that first time home buyers in California were without choices when it came to buying their first home. California’s inflated housing values kept most first time home buyers on the sidelines, as did their lack of funds for down payment.

How times have changed!

In most areas of California first time home buyers can actually own a home for less than they’re paying for rent and they can take advantage of incentives for first time home buyers that didn’t exist just a few years ago:

Now there’s a new tax credit for California first time home buyers!

In an effort to further help first time home buyers, the State of California has just introduced a new first time home buyer tax credit. In 2010 thousands of first time home buyers took advantage of the federal first time home buyer tax credit. Now first time home buyers in California have a similar tax credit.
Here’s how it works:

The best thing about this tax credit? You can claim it for as long as you own or live in your first home. Contact us for details
The budget crisis in California forced many counties to suspend their tax credit program, so the state has stepped in and like those programs there are income limits (based on family size) and sales price limits (for new and resale homes).
I’d like to list all the details but then this would be a book and not a blog. For more information on the first time home buyer tax credit in your area, Contact us.

Zero down payment loans for first time home buyers?

It’s something we’ve heard before, No Money Down for first time home buyers and most first time home buyers think that no money down went the way of NINJA (No Income, No Job, Assets) loans.

But, First time home buyers in many parts of Riverside County may now be eligible for no money down financing  courtesy of the USDA No Money Down Rural Loan program.

This CNBC video talks about how the USDA program is making a difference in Phoenix and it’s making a difference for hundreds of families in Riverside County as well.

For more information on the USDA No Money Down home loan program, Contact us

Like Diana Olick from CNBC said: “It’s the way to go!”

First time home buyers what are your choices?

If you’re wondering what other first time home buyers are thinking, here’s a simple infographic to break it down for you.

See it’s not that tough!

First time home buyers don't really need a real estate agent do they?

How hard can buying your first home be? First time home buyers have access to the homes for sale on sites like Zillow, Trulia, Realtor.com and almost every Realtor in the country has given you what seems like the “keys to the kingdom” so you can “search for homes like an agent”.

If it were that easy, you would find your first home in the supermarket check out aisle, next to the National Enquirer and candy bars.

Buying your first home is not an impulse buy and shouldn’t be. It requires a commitment to being a homeowner and stepping carefully to avoid the landmines and potholes that await.

I’m not a Realtor, so this not a self-serving post, but one of my favorite resources is AgentGenius and here are their thoughts on “The Modern Value of a Realtor”

First: Making all of the data make sense

We can make sense of all of that data and put it in a meaningful context in a way that makes it easy for a particular client to understand. For an agent that actively tours in their market and engages daily with buyers, sellers, lenders, appraisers, and other real estate professionals it’s so easy that we sometimes don’t realize how valuable it is to take a huge amount of data and distill it to the relevant, essential and important information. This isn’t meant to sound patronizing to home buyers and sellers. They aren’t babies who need to be gently spoon-fed an easy to digest puree of real estate information. But home buyers and sellers have jobs, lives, families, children, pets, travel plans and hobbies – and they can’t put all of those things on pause to buy or sell a home.

Second: Real Estate will always be about People
It’s about people buying and selling homes. Yes, square footage matters. Yes, location matters. Yes, bedrooms, bathrooms, school-districts and plenty of other data points factor into the decision. Research1 has shown that the greater number of data points involved, the worse our conscious minds are at making the decision. It’s the ability to trust your gut, and have someone that you trust – an expert – to cross-check that feeling by being able to turn and say “I can’t put my finger on it, but I really think I like this home. What do you think?” Moments like that are when real estate is more about the people involved than the home itself. While I might ask Siri where to help me hide a dead body (just for fun and games, I assure you), I can’t envision the day when people are comfortable asking her if they should buy this home or that home. There are too many intangibles for a computer program to ever capture the quirky, bizarre, hard-to-describe but important details in buying a home.

Third: Websites only capture the easy data
Beds, bath, Square Feet, Date of Construction, Schools, etc. Those are the easy fields to capture, display, sort, and generally manipulate. But what about those items that are highly subjective, periodic or otherwise hard to easily classify and assign a value to? What’s light and airy to you may be a cave to me. What about the house next to the high school field used for band practice late into the evenings – but only during certain months of the year? Can you imagine the number of data fields it would take to capture every possible aspect of a home throughout a year? And if you can, see point two above.

Fourth: Negotiating and Navigating Escrow
Ever gone white water rafting without a guide? If you have, and you’re still alive to tell the tale, then you are both insane and lucky. It’s common sense to hire a guide when you are negotiating and navigating wilderness that is unknown to you – particularly when your day job involves sitting in a cubicle and wearing stylish shoes. Plunging into the river called escrow without a Real Estate agent to smartly negotiate and navigate on your behalf is inviting disaster. Real estate is filled with wildly unpredictable animals, well-camouflaged dead-ends, and false mirages – the cost of a simple mistake can be far greater than it originally appears. Just like the wilderness!

We’ve helped hundreds of families make the move from renter to homeowner and they all have one thing in common, they contacted us.

 

First time home buyers beware of this telephone scam

Not a day goes by there isn’t some sort of scam that rears its ugly head. This one has nothing to do with getting your first time home buyer loan, but it can affect how much money you will have available.

OK,  SNOPES SAYS OK AND AT&T SAYS SAME FOR THIS ONE

WARNING

Costly NEW AREA CODE: READ AND PASS ALONG 
8
09 Area Code
We actually received a call last week from the 809 area code.

The woman said ‘Hey, this is Karen.

Sorry I missed you- get back to us quickly.

I have something important to tell you.’

Do Not DIAL AREA CODE 809,284,

AND 876 from the U.S. or Canada .

THIS IS VERY IMPORTANT INFORMATION PROVIDED TO US BY AT&T. DON’T EVER DIAL AREA CODE809

This one is being distributed all over the US … This is pretty scary, especially given the way they try to get you to call.

Be sure you read this and pass it on.

They get you to call by telling you that it is information about a family member who has been ill or to tell you someone has been arrested, died, or to let you know you have won a wonderful prize, etc..
In each case, you are told to call the 809 number right away.

Since there are so many new area codes these days,

people unknowingly return these calls.

If you call from the U.S. or Canada,

you will apparently be charged a minimum of

$2425 per-minute.

And you’ll also get a long recorded message.

The point is, they will try to keep

you on the phone as long as possible to increase the charges.

WHY IT WORKS:

The 809 area code is located in the Dominican Republic .
The charges afterward can become a real nightmare.

 That’s because you did actually make the call.

If you complain, both your local phone company and your long distance carrier will not want to get involved and will most likely tell you that they are simply providing the billing for the foreign company.

You’ll end up dealing with a foreign

company that argues they have done nothing wrong.

Please forward this entire message to your friends, family and colleagues to help them become aware of this scam.

AT&T VERIFIES IT’S TRUE : http://www.att.com/gen/press-room?pid=6045

SNOPES VERIFIES IT’S TRUE: http://search.atomz.com/search/?sp-q=area+code+809&x=26&y=15&sp-a=00062d45-sp00000000&sp-advanced=1&sp-p=all&sp-w-control=1&sp-w=alike&sp-date-range=-1&sp-x=any&sp-c=100&sp-m=1&sp-s=0

 

 

First time home buyer incentives in 2012 - California first time home buyer incentives

First time home buyer incentives in 2012, are there any left? If not the number one question we get asked, it’s certainly number two.
First time home buyers who are searching for the first time home buyer incentives available in 2012 are being told NO., but it’s just not true!

The tough economy has certainly changed the landscape for first time home buyer incentives in 2012 , but there are a number of incentives still available to qualified first time home buyers in California
California first time home buyers interested in the first time home buyer incentives in 2012 will find that many of the programs they thought had disappeared are still available.
One of the casualties of California’s budget crisis was the appropriation of the city redevelopment funds by the State. As a result, most city’s first time home buyer programs were left without funding, but the State of California has stepped in with a home loan program that is going to help at least 6000 families this year.

What other first time home buyer incentives are available in 2012 for California first time home buyers?

  • Certain areas of California are eligible for 100% financing through the government’s USDA home loan program (and NO it doesn’t have to be a farm)

County and Municipalities who were forced to cut home loan programs, now have options for their employees as well.

If you thought that first time home buyer incentives were for loan income families only:

  • First Time Home Buyers in San Diego County, CA a family of 2 can make up to $77,550 a year and a family of 3 can make up to  $86,200.
  • First Time Home Buyers in Orange County, CA a family of 2 can make up to $87,200 and a family of 3 can make up to $96,850.

CALHFA has recently announced a first time home buyer tax credit that will be offered in the near future.

Make sure to register or subscribe via the RSS feed, so you’ll be among the first to know about new incentives available for first time home buyers in 2012.

We’ve helped hundreds of first time home buyers take advantage of the first time home buyer incentives available in 2012 and they all have one thing in common they contacted us.

In subsequent posts, we’ll share the first time home buyer incentives available in 2012 at the County and City levels.

First time home buyers buying your first home after bankruptcy

Many first time home buyers feel that a bankruptcy is a “life sentence without the possibility of parole” and that owning their first home will be forever beyond their reach.

Did you know you could be in your first home in as little as two years after your bankruptcy?

First time home buyer loans have some of the most lenient guidelines for buying your first home after bankruptcy. Bankruptcy is a major event in a first time home buyers life, but careful planning, credit rehabilitation can make homeownership a reality.

 

For more information on buying your first home after bankruptcy

For more videos about managing your first time home buyer credit

Down Payment Assistance for CalStrs Members and California teachers

First time home buyers who are also members of the CalStrs retirement program, found themselves without a first time home buyer/down payment assistance program when CalStrs announced they were suspending all new loan applications.
Read the complete press release
The CalSTRS Home Loan Program began in 1984 as a means to help members find affordable financing for homes in California. Thousands of teachers used the program to buy their first home and many are searching for an alternate source of down payment assistance.

Rents are rising and in many markets homeownership is cheaper than renting, yet many teachers are still renters because they no longer have the down payment assistance that was available under the CalStrs home loan program.

Though the CalStrs home loan program is gone, there is a down payment assistance program that 6000 families will use to buy their first home in 2012 and many of them will be CalStrs members and teachers just like you.

In the interest of full disclosure, this program is not affiliated with CalStrs in any way and is not limited to teachers or administrative employees, but it is sponsored by the State of California Housing Finance Agency (CALHFA) through it’s participating lenders for first time home buyers.

Highlights of the program for California teachers who are first time home buyers:
1) Loan amounts as high as $729,750 (FHA limit by County)
2) Low down payment requirements – as little as ZERO down payment
3) Can be used with FHA, VA and USDA loan programs
4) Down payment assistance in the form of a “silent second” (no payment) mortgage.

Even though the return of the CalStrs program is still up in the air, teachers and CalStrs members can take advantage of today’s favorable market conditions even if they don’t have enough money for down payment.

We’ve helped hundreds of families make the move from first time home buyer to first time home owner (many of them CalStrs members) and they all have one thing in common, they contacted us.

Down payment assistance for CalPers members

The suspension of the CalPers Home loan program has many first time home buyers who are also State, County or Municipal employees in California feeling left out.

Rents are rising, homes are very affordable and interest rates are at their lowest levels in 50+ years, yet many CalPers members are still renters  because they no longer have the down payment assistance that was available under the CalPers program.

Even though the CalPers home loan program is gone, there is a down payment assistance program that 6000 families will use to buy their first home in 2012 and many of them will be CalPers members just like you.

In the interest of full disclosure, this program is not affiliated with CalPers in any way and is not limited to state or municipal employees, but it is sponsored by the State of California Housing Finance Agency (CALHFA) through it’s participating lenders for first time home buyers.

The program is available in all Counties in California and qualifying income limits are based on the County where you’ll live. Click Here to see the income limits for your County. You can see by these income limits that many CalPers members who weren’t eligible for other down payment assistance programs now have a program they can use.

Highlights of the program for California first time home buyers:
1) Loan amounts as high as $729,750 (FHA limit by County)
2) Low down payment requirements – as little as ZERO down payment
3) Can be used with FHA, VA and USDA loan programs
4) Down payment assistance in the form of a “silent second” (no payment) mortgage.

For more information on this down payment assistance program

If you’re a CalPers member, who’s tired of renting and is ready to make the commitment to become a first time home owner, then this may be the program you’ve been waiting for.

Even if you don’t need the assistance for down payment it can be used for closing costs and you can save your funds to help make your house a home.

We’ve helped hundreds of families make the move from first time home buyer to first time home owner (many of them CalPers members) and they all have one thing in common, they contacted us.

A down payment assistance program that's working for California first time home buyers

If you’re a California first time home buyer, there’s a problem and we need your help to to fix it.
The California Housing Finance Agency has millions of dollars for first time home buyer down payment/closing cost assistance and they need your help to spend it.

If you had been a first time home buyer in 2009 and 2010 you had the first time home buyer tax credit. While it may have been panned by the critics, it did exactly what it was supposed to do:
Give first time home buyers a dollars and cents reason to buy their first home and it increased home sales by 20-30%.

But it’s 2012 and we know first time home buyers need help too. If you’re like most first time home buyers in California the NUMBER ONE obstacle for you is the money needed for down payment.

Well, the State of California has a down payment assistance program that is helping hundreds of first time home buyers and their families achieve their dream of homeownership. How many first time home buyers is it helping? Here’s a snapshot from April 11,  455 families who otherwise would have continued to overpay for rent will become first time home owners. CALHFA estimates they will help more than 6000 first time home buyers become first time home owners this year.
It’s Crazy! Homeownership is cheaper than renting

Unlike many of the down payment assistance programs which are intended to help low income first time home buyers, the California down payment assistance program targets moderate income first time home buyers in all California Counties. For more information on the income limits in your County, Click Here

For more information on the California first time home buyer down payment assistance program Contact Us. We have helped hundreds of first time home buyers with down payment assistance and they all took the first step, they called us.

This is Crazy! Homeowner ship IS cheaper than renting for first time home buyers in Temecula

First time home buyers in Temecula, Murrieta and all of Southwest Riverside County and North County San Diego got this bit of good news in their morning paper.

“Monthly payments on a house are now cheaper than monthly rents on a similar house in most of North San Diego and Southwest Riverside counties, according to an analysis of county-supplied and Realtor data by the North County Times.”

According to the NCTimes article: “Some homebuyers get loans backed by the Federal Housing Administration, allowing them to make a 3.5 percent down payment, which means they pay more in monthly payments. Despite that, those homeowners are still paying less than rent in half of all North County ZIP codes.” At least 70% of our market is FHA/VA or USDA loans which reflects the preponderance of first time home buyers who are doing WHAT? THEY’RE RENTING!

“In the French Valley ZIP code (92596), a house rents for a median of $2,055 a month, but a mortgage payment plus taxes on a median-priced house in his ZIP code on his FHA loan would cost $1,232, a 40 percent discount.” That payment might not include insurance and mortgage insurance but even with those included it’s still less than rent.

“No one really knows how long this unusual market will persist. Already a shortage of listings is creating bidding wars that could propel prices up. But the key to the trend is sub-4 percent interest rates, according to Nathan Moeder, a principal at The London Group in San Diego.” Bidding wars have been going on since 2007 but the key is interest rates. Interest rates impact long term affordability more than every other factor, including price. If you’ve been in this business for a while you know that interest rates can turn on a dime (1994 and 2004), so this long term affordability window won’t be open forever.

(Source: Eric Wolff North County Times, Escondido, Calif. (MCT) — The housing market has gone cockeyed.

For more information about down payment assistance programs available for first time home buyers in Southwest Riverside and San Diego Counties, Click Here

The Top 10 first time home buyer credit myths

On April 1, 2012 the bar was raised for first time home buyers and a credit score of 640 is now the baseline for first time home buyer credit.

You can still be approved for a first time home buyer loan with a lower score, but a little credit restoration can go a long way to making your dream of homeownership a reality at an affordable interest rate.
If you’re not careful restoring your credit can have a lot of land mines which in the end will do more harm than good to your first time home buyer credit. Understanding the difference between “common sense” and “FICO score sense” will save you a lot of time and money.

Watch this video from Linda Ferrari, a credit restoration expert, on the top 10 first time home buyer credit myths

We as lenders want to make loans to first time home buyers, but we want to make those loans to families who will pay us back. Your first time home buyer credit is your history of paying your creditors and is an important part of our decision making.

For more information on first time home buyer credit, watch our video series

Need help with your credit? Contact Us

First time home buyers has your credit been hacked?

First time home buyers in today’s real estate market have to be very conscious of their credit. Simply put the better your credit score, the better chance you will have of getting your first time home buyer loan at a good interest rate.

Unfortunately many first time home buyers are using some of the online sites, like AnnualCreditReport.com and CreditReport.com. According to a report by MSNBC, if you’re a first time home buyer using one of these sites, your credit may have been hacked and is being sold.

“Well trafficked websites like AnnualCreditReport.com, Equifax.com, or CreditReport.com are being hacked and consumer data stolen from them.”

“The credit profiles of individuals with strong credit scores (750+) are being pilfered and sold for as much as $80 in underground, online black markets.”

“It shows how people with good credit and a net worth now have a bull’s-eye on their backs,” Clements, from Internet security firm Cloudeyez.com told MSNBC on a virtual tour of a site dedicated to the sale of credit profiles.”

Click here to read the complete MSNBC report

If you’re in the market for your first home the ONLY one who should be running your credit report is the first time home buyer lender you choose. Mortgage lenders use different scoring models than the online sites and it’s our scores that count.

Click here for more information about first time home buyers credit

If you’re a first time home buyer who needs help with credit restoration, contact us and we’ll connect you with a professional who will get your credit on the right track.

First time home buyers credit should you close that account?

First time home buyers in today’s market, among other things, have to pay close attention to how they manage their credit.

Unfortunately combining internet misinformation and advice from well meaning friends and family can have disastrous results on your first time home buyer credit.
It would seem like common sense that if you have an account on your credit report that you’re no longer using, the prudent thing to do would be to close that account.
But common sense and FICO “score sense” can be very different and not knowing the difference can have “unanticipated consequences” on otherwise good first time home buyers credit score.
Buying your first home is the most important financial decision you will make. The long term investment you’re making will shape your financial future for years to come, so “common sense” says to consult with experts when making decisions about your first time home buyer credit.
I asked my business partners at Dedicated Credit Repair to share their advice on whether first time home buyers should consider closing accounts.
“Closing a positive credit line (referred to as a tradeline by lenders) is one of the quickest ways to almost immediately lose FICO score points.”
“First, the FICO score has multiple calculations that are affected negatively by the action of closing an account. 30% of your FICO score relates the idea that a consumer should ideally have 3-5 open tradelines at 35% or lower balances to limit ratios. If you close an account, you can essentially lose all the positive payment history that was being reflected on that account because the account no longer looks good on a credit report.”
“Another reason why your score will be negatively impacted by closing an account is that the FICO score calculates 15% of it’s weight on the idea of account SEASONING or “length of credit history”. So closing older accounts, in effect, shortens your credit history and reduces your score. Read More…

Click here for more first time home buyers credit information

Need help with your first time home buyers credit? Click here and we’ll help you schedule a free consultation with a credit restoration specialist.
We’ve helped hundreds of first time home buyers become homeowners and they all have one thing in common, they contacted us.

First time home buyers has the housing bottom come and gone?

There are no lack of predictions for first time home buyers on the bottom of the housing market.

If you’re one of the many first time home buyers who are still sitting on the fence and focusing on short term prices as opposed to the long term investment value of your first home, this video from the Today Show should give you some food for thought.

We have helped thousands of families take the big step of owning their first home and they all have one thing in common: When they were ready they, contacted us.

Visit msnbc.com for breaking news, world news, and news about the economy

First time home buyers have two words for all the fence sitters

First time home buyers have two words for all the “fence sitters” who are still trying to decide if buying their first home in this market is the right decision.

Buying a first home is NOT the right decision for everyone  You shouldn’t buy if renting better fits your lifestyle, if you haven’t made the commitment to owning or are focusing more on short term prices than long term investment.

There are thousands of families who decided that owning their first home was the right decision and they have two words for those of you still sitting on the fence.
The two words?

THANK YOU for sitting on the fence while we looked at all the homes that just a few years ago were beyond our reach.
THANK YOU for sitting on the fence when we wrote an offer on the home that was “perfect for us”.
THANK YOU for sitting on the fence while our offer was being accepted at a price we could afford
THANK YOU for sitting on the fence because your competing offer wasn’t there and the seller agreed to pay a large portion of our closing costs.
THANK YOU for sitting on the fence and not using the down payment assistance funds we were able to get.
THANK YOU for sitting on the fence so we could take advantage of these great interest rates and our new monthly payment will be less than we were paying for rent.
THANK YOU for sitting on the fence so we could finally move out of our cramped apartment and into a home with room for all of us.
THANK YOU for sitting on the fence because we finally have something that is “ours” and will be for a long time.

We have helped thousands of families take the big step of owning their first home and they all have one thing in common: When they were ready they, contacted us.

First Time Home Buyers Credit - How will inquiries affect your first time home buyers credit?

The number one question asked by first time home buyers about their credit is: How will inquiries affect my credit scores?

First time home buyers, as they search for their first home, are going to get a lot of information and a lot of misinformation. Misinformation about your first time home buyer credit score can have disastrous implications. The best information about first time home buyer credit comes from a credit repair professional.

One of our partners is Dedicated Credit Repair. Watch this video as they explain how inquiries will affect your first time home buyer credit.

For more information on first time home buyer credit – Click Here

If you’re ready for help with your credit scores – Click here for a free consultation

We’ve helped thousands of first time home buyers with their education and cleared up a lot of “mis-education” too. These first time homebuyers all did the same thing: they took the first step and contacted us.

First time home buyers paying too much attention to home prices?

Why does the third richest man in the world (Warren Buffett)  think that first time home buyers like you should get off the proverbial fence? Because owning your first home is the best way to increase your net wealth!
Unfortunately too many first time home buyers pay way too much attention to short-term price changes. They’re so worried that prices might drop a little and feel that maybe they should wait to buy something.
Of course if you think you can predict the future  then by all means roll the dice!
However, the reality is that price, within reason, really should be a secondary matter in your search for a good property to purchase. In 2020 or 2022, you won’t even remember the 2012-2013 price fluctuations. You’ll just be gloating to yourself how brilliant you were buying into the market ten years ago. Not only will you have purchased a great property at the most affordable pricing seen in decades, but you will probably have locked in an outrageously low interest rate.
If it’s good enough for Warren Buffett it might a good enough reason for you.

The main reason that price is less important is that individuals who want to increase their net wealth from real estate ownership, which is the goal of many buyers, should only be purchasing property that they will hold for a long time.

The longer the better and a minimum of five years is probably the breakeven point to start building wealth. It is more likely than not that down the road, years after our economy has sprung back to life, real estate prices should be much higher than what people paid for properties in the next twelve months.
Affordability is now!
But, what if you buy and prices drop a little? Who cares! It won’t matter because you purchased a great property that you love for all the right reasons. You want to own real estate and any slight dip in the next year or two should be a wholly irrelevant short-term blip on the radar of a long term real estate holder.
In addition, in many areas right now, your monthly payment for ownership may be close to or less expensive than renting. That alone is an amazing turn of events in the history of personal residence ownership.

Thanks to Leonard Baron for his insight. Leonard Baron, MBA, CPA, is a San Diego State University Lecturer, a Zillow Blogger, the author of several books including “Real Estate Ownership, Investment and Due Diligence 101 – A Smarter Way to Buy Real Estate”, and loves kicking the tires of a good piece of dirt! See more at ProfessorBaron.com.

We have helped hundreds of first time home buyers in Riverside and San Diego Counties make the right Buy v Rent decision. They all have one thing in common, they took the first step and contacted us.

First time home buyers what does Warren Buffett think about buying a home.

There’s so much information for first time home buyers to digest when it comes to deciding whether now is the time to buy their first home, it can be very hard to know what would be the best decision for you and your family.

There are plenty of experts and “fakexperts” out there with opinions on buying your first home, but one of the richest men in the world would buy hundreds of them.

We have helped hundreds of first time home buyers in Riverside and San Diego Counties make the right Buy v Rent decision. They all have one thing in common, they took the first step and contacted us.

First time home buyers to buy or not to buy?

That is the question!

First time home buyers are bombarded with “buy, buy, buy” or “don’t, don’t, don’t”  when it comes to buying their first home. There are good reasons on both sides and it can be difficult for first time home buyers to know which is best for their family and there’s as much misinformation as accurate information.
Buying your first home is the most important financial decision you will make and unless you’re committed to the lifestyle, ready to make a long term investment and are prepared to take the necessary steps, DON’T DO IT!
On the other hand, if you like the challenge of the daily “recon” mission for a parking place or if Saturday mornings in the laundry room are the highlight of your social week, then apartment living is right for you and you should stay put.
But let’s take a look at this from a more pragmatic point of view: Unless you’re living in your parent’s guest room, basement or casita, you have to live somewhere and pay someone else for the privilege.
So what will you do when your lease expires?
If you decide to continue to rent, you’re looking at a rental market where demand for rental units has rents on the rise and landlords across Southern California are taking advantage of this overheating of demand. So even if you stay where you are, chances are you’ll be looking at an increase in your rent.
If you have to move, hopefully you’ve saved enough to cover first and last month’s rent at your new place. If the rent will be $1500/mo, you’ll need to have at least $3000.
But if you’ve made the commitment to buy your first home in 2012, then that $3000  may be enough for the down payment on your first home.

 

We have helped hundreds of first time home buyers in Riverside and San Diego Counties make the right Buy v Rent decision. They all have one thing in common, they took the first step and contacted us.

The mis-education of Temecula first time home buyers

The internet has created an interesting dilemma for first time home buyers. There are seemingly innumerable experts who are touting information about the nationwide housing crisis being over. But how do you know if it’s information or mis-information?

Many of this new breed of experts might better be referred to as “fakexperts”. A “fakexpert”  might be defined as a faux expert.
An expert will SHOW you what the information means to you, to help you make a more informed decision on buying your first home. A “fakexpert” will spin the information in the best possible light, usually for their benefit.

Here are some examples, you decide. Expert or “Fakexpert”?

The National Association of Realtors recently announced that  “Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 4.3 percent. (Given the NAR’s recent decision  to revise home sales downward for the last five years, might make them the poster children for “fakexperts”)

Within hours of this information being released, a number of other “experts” came forward to either dispute the numbers or put their own spin on them:

“[It] is not quite as encouraging as it first appears given that it comes at the expense of a 5 percent downward revision to the previous month’s figures. (Capital Economics)

“Sales of U.S. existing homes marched upward in January, maintaining a trend that started in the second half of last year. (Moody’s Analytics)

“Indeed, the market for existing homes is about as strong as it has been in five years, nationally and in all four regions. (IHS Global Insight)

Experts or “Fakexperts”? You decide, but these companies are being paid by someone to reach these conclusions.

What does it mean to you the first time home buyer?
Not much!
Local market conditions are far more important and it takes a local expert to SHOW you those trends and help you make the decision whether now is the right time to buy your first home.

We have helped thousands of first time home buyers get their piece of the American Dream. The one thing they have in common? They contacted us.

Temecula First time home buyers it's official the housing crisis is over!

It’s official the housing crisis is OVER for Temecula first time home buyers!

How do I know? I saw it on the internet and all it took was $431 to do it!

The end of the housing crisis has been a topic of discussion since before it really began.
As far back as 2008, the Wall Street journal was predicting an end to the housing crisis. “It is very likely that April 2008 will mark the bottom of the U.S. housing market.”

In September of 2008 (9/11 to be exact) CnnMoney said:
“A handful of economists and analysts predict the slump will bottom out, and home prices will level off by next summer – advice worth listening to.”

In fact according to the former Chief Economist of NAR David Lereah, there wasn’t going to be a bursting of the housing bubble. In 2005 authored a book (while still holding that post) titled: “Why the Real Estate Boom Will Not Bust – and How You Can Profit From It.”.  (Is anyone other than me concerned about the ethics of that?)

In February 2011, the Wall Street Journal, once again, proclaimed: 2011 may be the end of the housing crash

Need more evidence the media has no clue? Watch this video:

The latest group to take a stab at it? Capital Economics. How did Capital Economics arrive at their conclusion? “Banks loosen credit standards. Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.”

The national media (the kings/queens of disconnect) picked this up and ran with it at full speed. In fact there are no fewer than 10 newspapers who ran “breaking news” on the subject.

REALLY? On a $200,000 FHA loan that’s a difference in qualifying income of only $431 a month, I’m sure if we as lenders knew it would be that easy, we would have done it years ago.

Interested in the real state of the Temecula real estate market? Click here

First time home buyers already thinking about your future home?

For first time home buyers, buying a home in today’s market is the first step on a journey that will likely take you to a number of different houses over your lifetime. It’s inevitable that sometime after moving into your first home and getting that feel for homeownership, you’ll begin thinking about your future home.

What will it look like? How “green” will it be?

Recently the Department of Energy hosted the bi-annual Solar Decathalon in DC and the winning entry is the Water Shed home built by the University of Maryland.

Watch the video to see what lies in store for you sometime in the future.

Click here to see all the features of the award winning Watershed home

You might be wondering what your parents or grandparents thought would be their home of the future? Check out Walt Disney’s vision

If you’re ready to look for your home of today, contact us

First time home buyers do you know what your wireless carrier is doing with your information?

Mobile devices have become indispensable for first time home buyers. They can search for homes, find open houses, and check out virtual tours. Mobile devices allow first time home buyers to do virtually everything their home computer does.

But at what price?

This video shares How carriers gather, track and sell your private data

Network from Michael Rigley on Vimeo.

So, we get to pay them each month to have our personal data harvested?

Hmmm!

First time home buyers the best educated or most mis-educated?

First time home buyers entering today’s housing market are considered by many to be the best educated first time home buyers in history. The internet has given them access to more information than any generation of first time home buyers.

Unfortunately today’s first time home buyers may also be the most “mis-educated” first time home buyers in history. According to Thefreedictionary.com: mis-educate means to educate improperly.

Maybe a better definition would be to educate with misinformation?

“It must be true, I read it on the internet”, is intended to be a tongue in cheek statement but when that information agrees with something you’ve already been told, especially from friends and family members, it tends to become true in your mind and may be creating unrealistic expectations for you or mis-education.

Mis-education can  also be contagious. The information your parents, friends, family members and neighbors are sharing with you may also be leading to your mis-education.
Here’s an example:
Third party listing sites (Zillow, Trulia and Realtor.com) attract millions of views each month because they give you easy access to homes for sale in your desired neighborhood. These sites are not real estate sites, they’re information platforms and they rely on information from local real estate brokers and use computer models. for their value estimates (weather forecasters use computer models too, and they’re 50/50 at best).

It’s easy to say their data is inaccurate, but here is an example of recent data from Trulia.com. Would you be “educated” after seeing this or “mis-educated”?:
“The median sales price for homes in Temecula CA for Jul 11 to Sep 11 was $1,000,000 based on 1 home sales.”
“The median sales price for homes in Temecula CA for Nov 11 to Jan 12 was $250,000 based on 1 home sales.”
Granted our sales aren’t as “robust” as they were a few years ago, but two sales in six months show that Trulia.com’s numbers don’t actually reflect what’s going on locally and if you’re relying on these numbers you’ve been mis-educated.

These third party sites are not without value, however.

They can save you a lot of time when you are only window shopping and haven’t decided on a location, price or agent. You can view homes, neighborhoods, and just about anything else you want to know while you put together your wish list.

When you’ve made the commitment to buy your first home, you’ll want more than a Realtor, you’ll want a Realtor who understands their local market, the first time home buyer programs available and gives you confidence that they are representing only your interests.
We’ve helped thousands of first time home buyers with their education and cleared up a lot of “mis-education” too. These first time homebuyers all did the same thing: they took the first step and contacted us.

First time home buyers don't let your tax refund be just the deposit on your next apartment

If you’re a first time home buyer who has been waiting for February 1 to arrive, it might feel a little like the night before Christmas with visions of tax refunds dancing in your head.
You’ve received your W-2 for 2011 and you’re ready to jump on line or call your tax guy, so you can get that income tax refund you’re planning to use for the down payment on your first home.
Sir Isaac Newton’s Third Law of Motion says: That for every action there is an equal and opposite reaction.

If your action is to claim employee business expenses on your tax return, the equal and opposite reaction might be you’ll be using that refund for the deposit on your next apartment.
The IRS allows the legitimate deduction of un-reimbursed employee business expenses. This can include mileage, education, uniforms etc. The problem is any amounts deducted on Form 2106 (with very limited exceptions) will be calculated as a dollar for dollar reduction in income for purposes of qualifying for your first time home buyer loan.
Let me share a real life example: I recently met with a first time home buyer who was anxious to buy her first home. As requested she provided her most recent three years of tax returns as required by all first time home buyer programs.

The monthly payment($1150) on the home she way buying was within her budget and she was anxious to get the process started. She had recently gotten a promotion and her new job required extensive travel which she could now deduct on her 2011 Federal Tax Return. Unfortunately the expenses she deducted were more than one third of her income and as a result the payment for which she could now qualify is less than $600 a month.
She will be getting a pretty good sized refund this year but will likely be using it for the deposit on a new apartment instead of the down payment on her first home.

I’m not saying you shouldn’t deduct legitimate expenses, but it’s important you understand how that deduction will affect the qualifying for your first time home buyer loan.

It’s become trendy, almost fashionable to find creative ways to avoid income tax liability, unfortunately you may also be creatively finding ways NOT to become a homeowner.

If you’re counting on your tax refund for the down payment on your first home, you should consider finding a down payment assistance program that will provide the money, instead of counting on a large tax refund.
We’ve helped thousands of first time home buyers take advantage of available down payment assistance programs and they have one thing in common, they contacted us.

First time home buyers buying your first home is a road trip

If your first time home buyer resolution for 2012 is to become a first time home owner, then it’s important to realize an important fact: Buying your first home is a “road trip” not an event.

On this road trip you’re going places you’ve never been before and Google Maps can’t help you get there.

There are hundreds, maybe thousands of real estate websites that will tell you the first step on the path to homeownership is to contact a real estate agent or get pre-qualified for your first time home buyer loan.

Good advice, but it’s like starting on your road trip about one-third of the way through and you may not even be sure why you’re there, whether or not your car will make it, or what your final destination really looks like.

Like any other road trip, buying your first home requires careful planning and the first step in that plan is deciding if you’re really committed to taking the trip ALL the way to your destination.
The second step in this road trip, is getting a clear picture of your destination and there are two very important rules to remember when first time home buyers are selecting their destination:

  • Rule #1There is no perfect house for you anywhere
  • Rule #2If you don’t find a perfect home with every item you want, remember Rule #1.

If your budget won’t get you to Hawaii, you can still enjoy a week on the beach in Santa Barbara.
Step Three on your path to homeownership is making sure once you’ve selected  your destination is to make sure your “vehicle” doesn’t need any repairs.

So, go to http://annualcreditreport.com  and get your free credit report and check for errors. Tip: Order a report for your minor children, we’re already seeing cases of identity theft of minors.
If you’ve followed our video series on first time home buyer credit, you know that at least 50% of credit reports contain errors.

Focus on the accuracy of the report and don’t worry about the scores because 1) they don’t provide a score 2) First time home buyer loans use a different scoring model than do your typical on-line report.
Taking the “road trip” to homeownership is not for everyone but remember this:
You have to live somewhere (unless it’s your parent’s guest room) and pay someone for the privilege. So if you’re renting now, you may be paying more than most homeowners and you’re investing in real estate, it’s just not yours.

If you’re looking for help to map out your road trip, contact us. We’ve helped thousands of first time home buyers and their families reach the destination that was right for them.

Temecula first time home buyers shopping for your first time home buyer loan

Buying your first home in today’s Temecula real estate market, can be confusing and frustrating.
There’s so much information and misinformation for Temecula first time home buyers to sort through that it can be difficult to separate fact from fiction.
When you’ve made the commitment that 2012 will be the year you decide that your investment in Temecula real estate will be for you and not your landlord the next step is to determine how you’re going to pay for your first home.
The media and other so-called “experts” would have you believe that all you have to do to get your first time home buyer loan is pick up the phone and call around for the lowest rate. Getting the lowest rate is more fiction than fact for most first time home buyers.
When choosing between lenders for your first time home loan, you should consider Price, Product and Service.
PriceFact: Federal law says that in order for a lender to give you a rate quote he/she needs at least 6 bits of information to be compliant. Unfortunately for first time home buyers most lenders and on-line resources, like Zillow are ignoring the law and as a result you’re not getting the accurate information the law intends that you be provided.
Why? There are more than 250 overlays that could affect the interest rate on your first time home buyer loan. These overlays affect pricing for credit score, property type and location and loan to value among other things. ALL lenders have overlays, but not ALL lenders have the same overlays, so unless your rate quote takes the applicable ones into consideration, it’s not going to be accurate.
Product – Fact: All lenders have the same basic products, 30 year fixed rate FHA, VA, USDA and conventional loans. Most lenders have niche products too, but the basic products are what most first time home buyers will be using.
When it comes to Product, lender’s differ in their ability to match first time home buyer and down payment assistance programs with the basic programs. You don’t want them “practicing on your dime”, so make sure your loan is not their first experience with down payment assistance.
Service – Auto dealers tout “service after the sale”, while that’s important for mortgage lenders, it’s the “service BEFORE the sale” that makes the difference between a successful closing and a never ending bad dream escrow.

All first time home buyer programs have guidelines that require that you and your lender do the necessary “prep work” BEFORE you start looking at homes.
So, if youre a first time home buyer shopping for loans based on rate, chances are you’ll be making a decision based on incomplete information, which can be a “train wreck waiting to happen”. In short be a Smart Shopper

For more information about first time home buyer programs, click here

Is real estate a good investment for first time home buyers?

Is real estate a good investment for first time home buyers?
If you’re a first time home buyer and asking yourself that question, it’s almost impossible to get an answer that means anything to you and your family.

The disconnected national media (on-line and offline) is no help. Their view from 30,000 feet confuses the issues for first time home buyers who are looking at it from ground level.

How does a first time home buyer evaluate the investment side of buying their first home?

First, let’s define “real estate investment”

A real estate ownership interest, whether a personal residence or rental property, that increases one’s net wealth by a fair rate of return on their invested cash equity; for the corresponding amount of risk they are taking by owning a relatively high risk asset.
What that means is that if you are going to put your invested cash equity into real estate, your net worth should improve by a greater amount than if you invested in a similarly risky asset.

And “invested cash equity” isn’t the property price; it is how much cash you took from your bank account to acquire the property minus down payment, plus closing costs, plus rehabilitation costs.

You have to live somewhere (unless it’s your parent’s guest room) and pay someone for the privilege. So if you’re renting now, you’re investing in real estate, it’s just not yours.

So a good real estate investment is really one that will increase your net worth over time. The longer you own it, the better the chances for that appreciation in value and wealth building.

For more information about real estate investment for first time home buyers, click here

Thanks to Leonard Baron, for the for some of the content. You can see more at Professor Baron.com

Is misinformation keeping you from being a first time home buyer?

First time home buyers in California have a huge opportunity waiting for them and unfortunately many are still paying more in rent than they would for a comparable home because of the misinformation being disseminated.
I’m not sure how these things get started, but I would like to take a few minutes of your time and clarify the down payment assistance programs available for California first time home buyers.

Not all first time home buyers qualify for every program, but most qualify for more than one. Not every home is eligible either, but many  are eligible for more than one program. Only a lender experienced with these programs can find the right match for you and your family.

What down payment assistance programs are available for California first time home buyers?

  • No down payment from the federal government using the USDA loan program. Click here for more information

 

  • 1% down payment program from the State of California. Click here for more information.
  • First time home buyers in Riverside County have two additional programs that provide up to 20% in down payment assistance with terms as good as “15 years same as cash”. Click here for more information
  • First time home buyers in San Diego have their own program that provides up to 17% in down payment assistance. Click here for more information.
  • First time home buyers in Riverside and San Diego Counties also have a first time home buyer tax credit. Click here for Riverside. Click here for San Diego

If you’re a first time home buyer who is still overpaying their landlord and missing out on the tax benefits of homeownership and would like more information about the first time home buyer programs available for you and your family Click here.

Rent to own, the right move for first time home buyers?

If you’re a first time home buyer who isn’t quite ready to make that commitment. Then maybe one of the many homes available as “rent to own” might be an option for you.

It will give you an opportunity to “test drive” the lifestyle and find out if homeownership is the right thing for you and your family.

Before you do, however, it’s critical that you know what you’re signing up for. Rent to own, also called a “lease purchase”, is just a euphemism for “lease with an option to buy”. The owner of the home agrees to sell you the home at some time in the future at an agreed upon price. As consideration, you will pay him an agreed upon amount (option money and it’s generally non-refundable) to “hold” the property for you.

Sounds simple enough, but as potential first time home buyers you need to focus on the “own” and “purchase” terms. At some time in the future you’re going to have to purchase this home or risk losing your option money and it’s important to do it right!

You should look at this opportunity from two perspectives: Personal and Property

Personal – If you’re not ready to buy now because of credit, income or down payment problems. Will you be able to improve your situation by the time the option needs to be exercised?
If you’ve put off getting your credit in order, if you’re not going to start now, then rent to own is not a solution.
Sitting down with a mortgage professional or credit repair specialist now might seem premature but there’s no one better equipped to give you a detailed plan on how to prepare yourself to buy your first home when the time comes.

You’ll be purchasing this home and that means qualifying for a loan, so your income, credit and assets will have to meet the qualifying criteria in effect at that time.

Property – The location and everything else about the home are perfect for you and your family. You can picture yourself living there a long time BUT unless you’re a “smart first time buyer” now, this might end up being just another rental home when the option comes due.
NO ONE knows where housing prices will be in two or three years, so it’s critically important that you “buy right” now.
Who’s determining the option price? If it’s the owner and the price is too high now, chances are in a year or two it will still be too high and you’ll only be able to get financing if you can re-negotiate the price or bring in a bigger down payment.

Rent to Own can be an opportunity to “dip your toes in the water” for first time home buyers but you still have to be smart and have a good “exit strategy” when it comes time to exercise your option.

For more information on rent to own, contact us.

First time home buyers credit - Divorce and your credit - some important tips

In our previous posts about first time home buyers credit and how it could be impacted by divorce, we talked about: Getting a clear picture, How to handle unsecured credit accounts and How to handle secured credit accounts.
Here are some tips from Linda Ferrari, President of Credit Resource Corporation on how to make sure your first time home buyer credit survives a divorce.
1. MAKE SURE THE BILLS GET PAID-NO MATTER WHAT THE JUDGE SAYS:Regardless of what the divorce decree stipulates, it does not override your account agreements with your creditors. Both spouses are liable and responsible for joint debt regardless of who the judge orders to pay the bill. If the bills are not paid and an account defaults, both spouses can be sued, and both spouses can have their wages garnished. Most late pays occur during the divorce negotiations phase. Don’t allow this happen. One 30 day late can drop your score anywhere from 25-75 points, and it takes months to gain those points back.
2. PROTECT YOURSELF IN JOINT ACCOUNT SITUATIONS: The best way to handle joint accounts is to eliminate such accounts whenever possible. Because joint accounts are approved using the information from both spouses’ credit reports, a creditor will not remove one spouse’s name from an account regardless of the presence of court documents declaring a specific spouse responsible for payment and upkeep.
3. IF YOU DECIDE TO LEAVE YOUR NAME ON A SECURED LOAN ACCOUNT, BE SURE THAT YOUR NAME REMAINS ON THE TITLE: Once your name is removed from the title, you no longer own the asset. This means that if the responsible spouse defaults on the loan, and you have to pay it, you’ll be paying for something that you no longer own.
4. FINALLY, putting the action plan to work as early in the divorce process as possible will ensure your credit will be protected to the greatest extent possible. Decisive, quick action will empower you to move forward.

If you’re a first time home buyer who is worried about their post-divorce credit scores and would like a FREE consultation with a credit repair specialist, click here.

Check out our video series on managing your credit

First time home buyers credit - Divorce and your credit Part 3

First time home buyers are not immune from divorce, and while an unfortunate circumstance, it’s important to recognize there is a “business” side to it and knowing how divorce affects your credit is as important as the actual legal proceedings.
First time home buyers who let “the chips fall where they may” often times find themselves on the outside looking in when in it comes to owning their first home.
Previously we talked about getting a clear picture of your credit and offered some advice on how to handle unsecured accounts.
Even though your divorce decree gives the other party the responsibility of making the payments, if/when they don’t your credit will suffer because it was an obligation that didn’t get paid and when that happens your credit score is going to suffer.
Thanks to Linda Ferrari from Credit Resource Corporation for this advice for first time home buyers on how to handle secured accounts (loans and mortgages).
B. SECURED ACCOUNTS-YOUR OPTIONS:
• SELL IT: This is the safest and best option. You sell the asset, pay off the loan in full, wipe the slate clean and move on. (The creditors are not always diligent in reporting, so keep copies of the paperwork.)
• REFI IT: If the spouse who has responsibility can qualify for a refinance in their own name, or they have a family member who can assist them with the loan, you can have them buy you out completely and you can walk away without obligation and get your name removed from the account.
• BE CAREFUL: The least desirable option is to keep your name on the loan with certain terms and conditions. This option leaves your credit vulnerable to the responsible spouse’s actions going forward. A late payment or a default on the loan will damage your credit.

If you would like a FREE consultation from a credit repair specialist, click here

Check out our video series on managing your credit

One percent down payments for California first time home buyers

According to a recent report from the National Association of Realtors (NAR) the average down payment made by first time home buyers is 12%. Unfortunately this type of reporting has led many first time home buyers to believe that homes can only be purchased if they have a substantial down payment.

For first time home buyers, especially first time home buyers in California that can be quite an obstacle to achieving their dream of homeownership.But fortunately first time home buyers in California have help from a down payment assistance program that will help them buy their first home with a minimum of 1% down.

This help comes from the California Housing Finance Agency (CalHFA) in the form of down payment assistance of 3%. It’s not free money, but it is cheap. Interest accrues at 3% per year (with no payments required) until you sell or move from your first home.

To qualify for the 1% down payment program, you must:
1. Be a first time home buyer or not owned a home in the last three years
2. Be credit qualified for the underlying FHA first mortgage (minimum credit score of 640)
If you need help getting your credit score to that level, contact us and we’ll get you a FREE credit consultation with a credit professional.
3. Meet the income limits, based on family size, for the County in which you will be living. You might be surprised how liberal these limits are, for more information on your County, contact us.
4. Attend a HUD approved first time home buyer education class.

Unlike many of the other down payment assistance programs for first time home buyers, you can use the 1% down payment program on bank owned homes, short sales, and even new homes are eligible.

For more inofrmation on the 1% down payment program for California first time home buyers, click here

First time home buyers credit-Divorce and your credit-Part 2

If you’re a first time home buyer facing the prospect of divorce, taking the right steps now will ensure that when the time comes to buy your first home your credit won’t be a stumbling block.
In our first post we recommended  getting a clear picture of your credit by creating a spread sheet of all your accounts (joint and separate).  Your credit consists of two types of accounts unsecured (credit cards) and secured (installment loans) and each needs to be evaluated differently.
Thanks to Linda Ferrari, President of Credit Resource Corporation for this game plan.
STEP 2: ACTING ON THE INFORMATION
Once you have assembled your information in one place, you can now begin to determine the best course of action for handling the accounts. There are two types of accounts you will be dealing with: secured and unsecured. Both are handled very differently during a divorce. Secured accounts are all accounts that have an asset attached to them, i.e. a mortgage or a car loan. Unsecured accounts are debts with no assets backing them, i.e. credit card accounts. Here are my suggestions:
A. UNSECURED ACCOUNTS-YOUR OPTIONS:
ELIMINATE OBLIGATIONS WHERE YOU CAN: A credit card or a statement with your name on it does not make you a joint owner of the account. Unless the account was originally opened with an application SIGNED BY YOU, you may only be an authorized signer and you can request to have your name removed from the account immediately. Or vice versa, if your spouse is on the account as an authorized signer you will want to have his name removed to avoid any future charges. Be aware however, if negative credit was incurred while you were on the account, the past information will still remain.
• CLOSE JOINT ACCOUNTS: If there is no balance on the account, call the creditor and close the account immediately.
• FREEZE ANY FUTURE CHARGES: If there is a balance that cannot be paid off right away, the creditor typically will not allow you to close the account. In this case, call the creditor and request to freeze the account from any future charges. This will allow you to pay off the balance over time without making you vulnerable to more debt. Such an action will stop BOTH spouses from using the account, so it is important that you make certain you have another credit card in your own name before you take that course of action.
• TRANSFER BALANCES TO RESPONSIBLE PARTY’S INDIVIDUAL CARD: Request that the responsible spouse transfer remaining balances on a joint card to another credit card with available credit that is in their name only. Once this is done, CLOSE THE JOINT ACCOUNT IMMEDIATELY.
Next time, we’ll share Linda’s strategies for handling secured accounts.
If you would like a no cost consultation with a credit repair professional, click here

First time home buyers credit - Divorce and your credit

1 out of every 2 marriages ends in divorce today and unfortunately many first time home buyers see their chances of homeownership go up in smoke because they weren’t aware of the ramifications that divorce might have on their credit scores.
Today most divorces are handled in an almost boiler plate style and based on the settlement agreements we’ve seen, very little consideration was given to how the division of credit obligations would affect our client’s future credit and their ability to buy their first home.
This is the first in a series of posts to help those of you facing divorce handle your credit in such a way that once the dust settles you’ll still be in the market as a first time home buyer..
While a divorce is easy enough to obtain and can be done in a fairly short period of time, the financial and credit issues emanating from the dissolution can linger for years to follow. Confusion or disagreement about who is to pay what bills and who is using specific credit cards can wreak havoc on your credit score. Late pays, no pays and insufficient funds can quickly cause the very best credit scores to plummet–it doesn’t have to be that way. By proactively taking just a few simple steps, individuals who are starting over can ensure that they are doing everything possible to start over with their good credit intact.
Following is an example of a proactive action plan that will help you protect your credit during and after a divorce.
STEP 1: GETTING A CLEAR PICTURE
Get copies of your credit reports:
Request copies of your credit report from each of the 3 major credit bureaus, Equifax, Experian and Trans Union so you will have full disclosure of your situation.
• Get all of your information into one place:
Make a list of all OPEN accounts and accounts with balances. Then create a spreadsheet with columns for the following information:
? Creditor Name
? Creditor Contact Number (if it’s not listed on the credit report, you can find the customer service number on the back of your statement, or you can always search for it on the internet. Where there’s a will, there’s a way.)
? Account Number (sometimes credit reports do not list the full account number, so you may have to dig up some paperwork, but it will be well worth it.)
? Type of Account (i.e. auto loan, mortgage, credit card)
? Current status of the account (i.e. current, past due, collection, etc.)
? Total amount due
? Monthly Payment Amount
? Vesting of Account (i.e. Joint/Individual/Authorized Signer)

Thanks to Linda Ferarri, President of CRC, for this great information.

If you would like a free credit repair consultation Click Here

For more information on how to strategically manage your credit so you can get the best interest rate on your first time home buyer loan, Click Here

5 Tips to improving your credit score fast

The Wish Book for Temecula first time home buyers

If you’re a first time home buyer or are thinking that 2012 is the year you would like to become a first time home buyer then it’s important to get on the path to homeownership in such a way that you will achieve your goal with a minimal amount of angst (an intense feeling of apprehension, anxiety).

In a previous post, we talked about making the commitment to becoming a first time home buyer.
This is the most important financial decision you will likely make, so it should be treated as such.

Once you’ve made the commitment, step two on the path to homeownership is to keep your expectations realistic.

You may not be old enough to remember the “Wish Book” (ask your parents or older brothers and sisters) that was published each year by Sears. In many ways it was the unofficial start of the Christmas season. When it arrived in the mail we knew it was time to start making our Christmas lists.

Fast forward to today and property searches on the internet are the new “Wish Book” for first time home buyers. You have virtual access to almost every home in the United States that’s listed for sale and therein lies the problem.

When we looked at the “Wish Book” our parent’s budget was never a consideration. We wanted what we wanted and it was up to Santa to figure it out.
When it comes to your first time home “Wish Book”, it’s your budget that will determine what your first home will look like. With the thousands of foreclosed homes on the market selling for less than half of what they did just a few years ago, it’s easy to get caught up in the “bargain hunting” and to forget you still have to have a way to pay for it.

So, even though that 3000 square foot home on half an acre with a pool and spa may be your “dream home”, if it’s not in your budget today it’s not a realistic expectation and should remain just that, “your dream home”.
There are hundreds of homes available today that can be your first step to your dream home, but to get there you have to set realistic expectations and dog ear or circle (that’s Wish Book speak for bookmark) those homes you can pay for.

For help in determining your “Wish Book” budget, Click Here

First time home buyers can have the best REO deals come to them!

First time home buyers who have decided that 2012 is the year they will quit paying their landlord’s mortgage and start reaping the benefits of homeownership have a new tool that will bring the best REO deals right to them.
First time home buyers know that searching for homes “just like real estate agents” can be a tedious task and when your time is at a premium, having a tool that will bring the best deals right your desktop can make your home search process a lot simpler.

Fannie Mae is the owner of about 70% of all the REOs nationwide and if you saw our previous post about the steps Fannie Mae is taking to make them the “best deals” on the market, then using the new search tool will deliver those deals right to you.

Before you sign up for the alerts, watch this video that explains why Fannie Mae REOs may be  the answer to your home search questions.

To sign up go to the Fannie Mae HomePath page and enter the zip code where you want your first home to be.

Then just enter your name and email address and you’re set. (It’s a double opt in, so you will be getting a confirmation email)
Fannie Mae homes also have some very attractive financing options for first time home buyers including 100% financing (selected areas), 1% down payments and 3% down payments with HomePath loans. From time to time Fannie Mae offers special incentives to first time home buyers in the form of closing cost assistance. For more information click here

For help to find the right financing for you, click here.
If you aren’t currently working with a real estate agent, click here and we’ll hook you up with one who knows how to help first time home buyers get a Fannie Mae REO.

Renters spend more for housing than first time home buyers!

But WHY?

Renters now spend five percent more of their household budgets on housing costs than do homeowners, and the difference is growing as rents rise.

Since 2005, homeowners’ expenditures for housing have risen from 31.9 percent of their household budget to 33.2 percent, but renters’ costs have risen even more from 35.6 percent to 38.4 percent, according to the October CoreLogic U.S. Housing and Mortgage Trends.

Since 1985, homeowners have increased their housing expenditure allocation by 12 percent, while renters increased by 22 percent.

For a first time home buyer to buy in this market it will take a very compelling reason(s) to take that big step.

Here are Three:

You already know about the bargain basement prices on homes and the lowest interest rates in half a century, so I won’t repeat those reasons but you can add them in if you like.

Compelling reason #1 – In most markets in Riverside and San Diego Counties renting is more expensive than owning a comparable home. Unless it’s your parent’s basement, you have to live somewhere and pay someone for the privilege, why wouldn’t you be paying yourself?

Compelling reason #2 – Tax benefits when you own your home – SEVEN, Tax benefits when you rent – ZERO. Paying less to Uncle Sam and keeping more of it in your pocket is always a good thing.

Compelling reason #3 – Programs to help first time home buyers with down payment assistance with “15 years same as cash” terms, a Tax Credit, 100% financing, 1% down payments . Programs to help renters? ZERO

For more information on the first time home buyer programs available in Riverside and San Diego Counties, Click Here

How first time home buyers can avoid real estate scams

The state of the current real estate market has brought out a number of real estate scams that have targeted first time home buyers and renters.

First time home buyers are especially susceptible to scams, because they’ve never been through the process and it makes it easy for scam artists to separate them from their hard earned money.

Here are some tips from the Better Business Bureau on how to avoid scams.

The email addresses they use usually are from yahoo, ymail, rocketmail, fastermail, live, hotmail and gmail, and they also post ads under anonymous craigslist addresses. They frequently change their aliases.

• The deal sounds too good to be true. Scammers will often list a rental for a very low price to lure in victims. Find out how comparable listings are priced, and if the sales price or rental comes in suspiciously low, walk away.
• They use photos stolen from other property advertisements or from home furnishing catalogues or hotel websites.
• They use fake names, often stolen from Facebook profiles or networking sites. Often they assume the identities of previous victims.
• What they all have in common is that sooner or later you get a request to transfer funds via Western Union, Moneygram or some other wire service.
• Never under any circumstances, wire money at the request of any prospective “landlord” via Western Union, Money Gram or any other wire service.  Even if they tell you to wire the funds to a friend or relative’s name “to be safe,” it’s a trap!
• Never send a scan of your passport or other ID.  These thieves will use your identity to scam others. Ask to see the landlord’s ID – record all the information you can from it.
• Use a browser to search for the person’s name who you’re dealing with. Be sure to add quotes around their name. You could add the words “fraud” or “scam” at the end of your search terms.
• Use reverse directory look up if the person has given you their telephone number. It’s important to double check that they are who they say they are.
• Visit the local county courthouse to look up property ownership for the apartment in question. Who really owns it? Is it the person you’re dealing with? Or someone else?
• Scan any provided photographs carefully. Do they match up with what you’ve seen in person? Do they look like they all came from the same place?
• They don’t ask for an application or permission to check your credit? That’s a red flag!
• Considering the current state of our economy and the rise in foreclosures, ask the landlord if they’re current on their mortgage payments, and then get their answer in writing.
• Consider using another method for obtaining a rental, i.e. real estate agent, going through a rental agency, etc.
• Always check bbb.org to see if the “company” has any complaints.

First Time Home Buyers save money each month on new homes in Murrieta

If you’re a first time home buyer in Murrieta and are tired of the whole REO/short sale nightmare, then a new “built to order” home at Fox Hollow may be the answer.
If you’ve made hundreds of offers (only seems like that many) and you’re still making your landlord’s mortgage payment, then you might want to take a look at a new home, and in particular the new homes in Murrieta at the KB Home community of Fox Hollow @ Crowne Valley.
I know the sales prices are higher than a foreclosed home but when you factor in the overall value, these new homes in Murrieta might be the right first time home for you and your family.
KB Home recently announced that solar is now standard at Fox Hollow.
What this means to you is savings of up to 80% on your utility bills.
According to a recent Press Enterprise article:
KB is installing as standard four solar systems, ranging from a 1.8 kilowatt system with 8 panels that is expected to cut household electric utility bills by up to 40 percent to a 3.15 kilowatt system with 14 panels that is expected to cut electricity costs by up to 80 percent
Or to put it in dollars and cents:
Ashly Gage, a 22-year-old waitress and student, said she and her husband, a 26-year-old Los Angeles County firefighter and paramedic, bought a KB Home in July in Eastvale that came with a six-panel solar energy system. She said because they were first-time buyers on a limited budget they decided not to upgrade for more sun power.
But Gage said the solar panels that came standard were an important buying incentive for the couple and “we wouldn’t trade them for anything.”
The final electric utility bill they got at the 1,400-square-foot town home they rented in Eastvale was $376 for the month of July. The next month, the first electric bill at the new 2,200-square-foot house they bought with a 1.4 kilowatt solar system was $132. “I was pleased to get that in the mail,” Gage said.
Fox Hollow is also one of the few new home communities that can offer 100% USDA financing to qualified first time home buyers, which can mean no down payment and monthly payment savings of up to $180/mo over a comparable FHA loan with 3.5% down payment.

I’m not a rocket surgeon but if you can save $240/mo on utilities and another $180/mo on your mortgage financing, that certainly sounds like value to me.

For more information on the new homes in Murrieta at Fox Hollow, Contact Us or the KB Home Sales Consultant Robyn Nelson at 951-677-4110

First time home buyers 5 strategies to raise your credit score fast

First time home buyers can expect to have their credit and credit score scrutinized even more as lenders try to make sure you’re a good credit risk. Time spent wisely now will make your path to homeownership a lot less bumpy.

Would you try to fix your car for a long vacation while you were on the freeway going 80 miles per hour? Then don’t wait until you’re housing hunting to start.

Here are some great strategies you can utilize right away to give your score a little boost.

Create Some Balance: While paying down installment debt (car, school etc) will definitely boost your credit score. The trick is to get and keep your credit card balances below 30% of your credit limit on each card.
For faster results, attack those cards with balances closer to their respective credit limits first, as opposed to those cards with simply the highest debt.
Remember if you pay off any credit cards completely: Do not close your accounts!

Canceling those cards may inadvertently undo all of your hard work and could lower your score!

Know Your Limits: Make sure that your credit card issuers are reporting the correct limits on your accounts to the major credit bureaus. Without an available limit, your account will appear to be maxed out at its highest reported balance each month. This could cost you up to 80 points in certain instances. Some creditors, such as American Express and certain cards issued by Capital One actually have a policy of not reporting available credit. However, most companies will report your credit limits if you ask them in writing.

Take Some Credit: If you have a credit card account in very good standing, make sure all three credit bureaus know about it. Just like your credit limits, some creditors don’t report your information to all three credit companies-this is why credit scores can vary between bureaus. If this is the case, give them a call to find out why. Correcting this oversight could provide a significant boost to your score.

Protect Your Interests: Your credit score is calculated solely on the information provided by your creditors. If they are misreporting, your credit score will suffer because of it. If you have past credit problems, like a bankruptcy, make sure all items associated with the bankruptcy are being reported correctly, that is with zero balance. This action could increase your score by 50-100 points.

Even the Score: If you find information on your credit report that you believe is inaccurate or incomplete, then you have the right to dispute free of charge. For the fastest results, visit the appropriate credit bureau’s website and file a complaint online. If supporting documents are necessary, you have to file your dispute by mail.

Be careful with this, disputes can take time and if they are still under investigation when you find your first home it can and has created delays.

Buying your first home can be a wonderful experience or a horrific memory. Take some time, make sure your credit is in order BEFORE you start down the path to homeownership.

Click here for more information about first time home buyer credit

First time home buyers are you "bringing a knife to a gunfight"?

First time home buyers in today’s real estate market are facing challenges unlike any other past housing market and if you’re going to buy your first home you need to be equipped with the right “weapons”.
Apologies to Sean Connery in The Untouchables but if you’re not represented by the best possible Realtor and Lender, you could very well be bringing a “knife to a gunfight”.
If you’re a first time home buyer in Temecula, Murrieta, North County San Diego or any market where foreclosures dominate you will be in a “business negotiation” with a bank and their representative (the listing agent) and to the bank this is not a real estate transaction but a debt settlement and they’re only interested in one thing: protecting their interest.

If you had to go to court tomorrow, would you ask the other party’s attorney to represent you?

Of course not, so why would you think that asking the listing agent to present your offer would be in your best interest?At some point in the transaction, the bank’s interests may conflict with yours. It may have to do with submitting “your highest and best offer” or you may be asked to submit your offer without an appraisal or financing contingency or waive them (VERY BAD IDEA!), but the bank is asking you to put their interest ahead of your own, and you need someone to advise you that is representing you NOT them.
ADVANTAGE BANK!This also applies when you’re asked to “cross qualify” with the bank’s (or listing agents) preferred lender. Other than possibly being a violation of the Right to Financial Privacy Act you’re sharing your financial information with the other side.
ADVANTAGE BANK!It has become trendy for some (not all) listing agents to imply that if you submit your offer with them it has a better chance of getting approved. This may sound good now, especially if you’ve written 10-20 offers, but the reality is they’re putting their lack of ethics on display and if they let their ethics slip so easily, remember the next time you could be the one getting the short straw.Your first home is the most important investment you will make in your financial future and your representatives need to be just that YOUR REPRESENTATIVES!

When you’re ready for representation that works for you, Click Here

First time home buyers credit you gotta have a plan?

You gotta have a plan

Having perfect credit is not a requirement for first time home buyers to take advantage of the many down payment assistance and first time hone buyer programs available, BUT having “good enough” credit is.

“Good enough” credit is not just about the score (but if you absolutely have to have a number you should target at least 640). Your credit and credit score are how a first time home loan lender evaluates your willingness to pay them back and the better your score the better your perceived credit risk.

If your credit score is not at that level, the hard part is figuring out how to get there.

Sometimes it’s as simple as paying down the balances on your credit cards, other times it’s enlisting the help of a reputable credit repair professional.

If you’re willing to do what it takes, you have to have a plan to get you there.FirstTimeHomeBuyersNetwork.com has partnered with one of the country’s leading credit reporting agencies to help with YOUR plan.

Here’s how “Score Adviser” works:

  • You tell us the destination (the desired score) and we will tell you how you can get there.
  • Quick summary of the results on your file to know immediately if you have a path to your desired FICO score
  • Paths to increase scores are ranked from easiest to hardest
  • Clear and concise direction you need to take to achieve your desired score
  • We search for significant variances on trades reported amongst the three credit bureaus that may be affecting your score
  • We also search for any changes that will occur to your credit report that will naturally occur over time

Credit score is only one part of getting approved for your first time home buyer loan and has to be viewed in context with your income and assets, but when you’re done you’ll know exactly what it will take for you and your family to begin enjoying the benefits of homeownership.

Click here for more information about Score Adviser

San Diego first time home buyers get bailout from Congress

November 16, 2011 – Breaking News

Finally some good news for first time home buyers in higher cost areas like San Diego

Congress reached a bipartisan agreement that would increase the maximum dollar amount of mortgage loans that can be insured by the Federal Housing Administration (FHA) back to $729,750 after dropping the cap to $625,500 automatically after a temporary increase was issued for all loans insured by the FHA (and all government-sponsored enterprises). The restored higher limit will remain in place through 2013.

“Higher FHA loan limits are critical to supporting current housing prices and our overall economic recovery, and it doesn’t cost the federal government a dime,” said Representative Brad Sherman (D-CA). “This is the single most important provision in the minibus [appropriations] bill to prevent a collapse of housing prices in high-cost areas like Los Angeles and San Diego.

This still has to pass both houses of Congress and get the President’s signature but help for the struggling housing market has a lot of support (especially with elections around the corner), so it would be a huge surprise if it isn’t passed quickly.

The higher limits coupled with the down payment assistance programs available to first time home buyers in San Diego make is a great time to follow the “smart money”

Click here for more information about first time home buyer financing in San Diego.

 

Should Temecula first time home buyers consider a Fannie Mae home?

First time homebuyers in Temecula, Murrieta and North County San Diego have hundreds of foreclosed homes from which to choose and chances are many of them are Fannie Mae foreclosures (they have 135,000 nationally).

For the longest time Fannie Mae homes also known as HomePath homes were among the worst when it came to property condition.

“The times they are a changin”

This video will give you an idea of how Fannie Mae has changed their approach to REOs  (more than 2/3 are sold to homeowners like you) and instead of looking at a trashed out, run-down typical foreclosure, they’re getting a house they’ll be proud to call home and reap the rewards that homeownership brings.

Click here to find out more about Fannie Mae HomePath homes.

Down payment assistance for Riverside First Time Home Buyers

First time home buyers face a number of challenges in their quest to make that big move from renter to first time home owner. But more than 70% of Americans say that owning a home is still a good investment and the tax benefits make it a better choice than renting.

One of those challenges doesn’t have to be lack of down payment and to help first time home buyers the City of Riverside recently announced their first time home buyer/down payment assistance program for homes within the City limits of Riverside.

The City of Riverside down payment assistance program specifically targets “low income families”, those with income at 80% AMI (adjust median income) based on family size.

To qualify:

  • You must be a first time home buyer (or not owned a home in the last 3 years)
  • You must be a US Citizen or Qualified Alien (contact us for details)
  • Attend a HUD approved 8 hour homebuyer education class
  • Meet the credit and income criteria for FHA
  • Be pre-approved for down payment assistance before you make an offer on a property
  • Be purchasing a bank owned (REO), short sale or City of Riverside RDA and Housing Authority owned home

If you qualify you may be eligible for up to 25% for down payment and closing cost assistance up to a maximum of $50,000.

For more details on the City of Riverside first time home buyer down payment assistance program, contact us, funds ARE limited and allocated on a first come first reserved basis

The smart way to shop for first time home buyers loans

First time home buyers in today’s market have a great opportunity, home prices are affordable and interest rates are the lowest in 50 years.

But how can you know you’ll get the best rate for you?

Here are some tips for smart shopping for first time home buyer loans. But first a reality check:

1. There are some very low interest rates being advertised but the TRUTH is that unless the lender knows 6 key items, those adds are only loss leaders.

2. Those “loss leader” interest rates are for borrowers with credit scores of 740 and higher, who are making at least a 20% down payment. Hardly the profile of most first time home buyers.

3. A lender won’t guarantee a rate for your first time home buyer loan, until you have an accepted offer on your first home with a defined close of escrow date.

The offer to purchase your first home has been accepted and you know that 30-45 days from now you’ll be moving in, NOW is the time to shop and here are some tips on smart shopping:

How to shop for and RECEIVE the Best Loan for you…
We encourage you to shop for the best rate and terms.

Please use this as a guide to ensure that you get what you are promised.
Every reputable company should be able to answer all of the questions below, and should not hesitate to immediately to provide you with these disclosures.
When shopping for the best loan, it imperative that you shop asking the following questions in the exact order as the are outlined below.
You should be shopping all on the same day, and during the same time of the day. Interest rates and fees fluctuate with the publicly traded bond market, so for accurate comparison, do your shopping at the same time of the same day.

1. What is your current rate and total lender’s fees?

2. If I commit my loan to you right now, will you immediately lock that rate and those fees for 45 days and immediately provide me your lock confirmation signed by your supervisor?

3. Will you immediately provide me your Automated Loan Approval signed by your supervisor?

4. Will you immediately provide me your Truth in Lending Disclosure signed by your supervisor?

5. Will you immediately provide me your Good Faith Estimate of Settlement Charges signed by your supervisor?

6. Do these rates and fees apply to first time home buyer programs with down payment assistance?

By following the following these scripts exactly as written each time you talk to another company, you will be able to truly comparison shop.
There should be no hesitancy, no delay in providing you the answers and documentation outlined above.
We can deliver on all of these items right now, so should the other companies.

To contact a first time home buyer specialist, Click Here

The first step for Temecula first time home buyers

The first step for first time home buyers

“I want to buy my first home, how do I get started?”

Without a doubt that is the number one question we’re asked at first time home buyers network.com

If you can make a rent payment each month, then you can make a mortgage payment each month.

It’s just writing a check or making an electronic transfer but it takes a conscious decision on your part to do what’s necessary to make it happen.

The FIRST STEP in buying your first home is to make the commitment to home ownership.
You’re not buying a car or a flat screen tv. You’re buying the place where your family will live for years. It’s an investment in your future and can’t (and shouldn’t) be done without careful thought and consideration.

Your first time home buyer specialist and your Realtor will be asking you for your  “resume” to get approved for your first time home buyer loan and providing the paperwork and following the lead of these professionals will be a test of your commitment to owning your first home.

Buying your first home requires a commitment to do what’s necessary to get you to homeownership and make this “your American dream”.

So what now?
Quit procrastinating! – If you’ve made the decision to move from renter to first time home owner, then get up off the couch, use the DVR to record your favorite programs and get started.

Sure home prices may continue to drop, but we’ve already seen interest rates climb and over the long term interest rates will have a greater impact on your cost of homeownership than will a 5% drop in home prices.
What is the real cost of waiting for first time home buyers?

Click here to contact a first time home buyer specialist

Government "bails out" first time home buyers

First the automakers got the money. Next it was the banks who got “bailed out”, then AIG.
First time home buyers just got that same preferential treatment.
On October 1, one of the most popular first time home buyer programs, USDA,  ran out of funds. This happens every year and the program gets refunded when the new budget is passed.
This year circumstances are dramatically different, and there was no guarantee the program would get funding.
If you’re not familiar with the program, USDA has become one of the most popular programs for first time home buyers.
It’s 100% financing (that’s right) with only one loan and a relatively small MI premium.
They will consider credit scores as low as 580 and have many of the same guidelines as FHA when it comes to approving you for your first time home buyer loan.
Not all properties qualify for this program, but those that are in the eligible areas can be a foreclosed home, a short sale, standard sale and even new homes.

Bank of America was the servicing lender for the loans in the past and their exit from that market left everyone in a state of “limbo” in regard to the future of the program.

Make a long story short, the government backed secondary market investor, GNMA, has reached agreement with many lenders to continue funding the program while budget issues are still being resolved.

For more information on the USDA first time home buyer program, Click Here

Buying your first home is like applying for your dream job?

In many ways buying your first home is like applying for your dream job.
The decisions you make will affect your family for years to come, so being prepared and putting “your best foot forward” is as important in the home buying process as it is in preparing a resume’ for your dream job.
As your future employer reviews your resume he/she will determine, based on current and past performance your ability and willingness to be the perfect employee and your first time home buyer lender will be evaluating your home loan application to determine your ability and willingness to repay them and repay them on time.
The most important question you have to answer is: Do I really want this job?
Like your dream job your first home is one of the most important decisions you will make.
A good decision provides a solid foundation for a promising financial future.
A decision made without careful consideration can lead to major financial problems including bankruptcy and/or foreclosure.

Here are 5 things we advised last year to get your family ready to buy your first home. Think of this as your undergraduate work. Now we’re going to show you some practical steps that will get you started down the path to homeownership.

Check your savings account balance – Even though there are a number of first time home buyer and down payment assistance programs available, you can’t and shouldn’t try to buy a home with a savings account balance in double digits.

When you find your first home and get ready to present an offer, you’ll need to write a check for the earnest money deposit, between $500 and $2000.
Lenders refer to this as “skin in the game” and the more of your own “skin in the game” the better a lender will feel about “hiring” you.

If your lease were going to expire at the end of the month and you had to move, how would you handle the deposits required for your next  apartment?
You’d need a minimum of first months rent and security deposit (usually a month). How would you handle that?  A similar amount may be enough for you to buy your first home.

Review your credit – Your credit references, like the references on your employment resume are indicators of your willingness to handle your credit (job) responsibly.

Be honest with yourself in evaluating your credit history.
“Would you give a loan to you, based on your credit report?”.

Your first time home loan lender is going to be lending you hundreds of thousands of dollars, does your “resume” say you’ll pay them back?

You’re entitled to a copy of your credit report each year and the best place to get it is annualcreditreport.com, it’s the only site recommended by the government.

The others are generally private companies with something to sell you. One of the largest of these private companies is actually a front for a lender, guess what they want?

Notice I said you’re entitled to your report, not your score.
It’s estimated that 80% of all credit reports have errors and the purpose of this exercise is to review your report for errors and  fix them before you start looking for your first home. Credit reports for mortgage lenders are based on different formulas than the online reports, so scores can vary greatly.

When you’re ready to get on the path to homeownership, your first step will be to get approved and part of that process will be a credit report with the scores that will actually be used for evaluating your application. So don’t worry about the scores yet, just make sure your credit report is as accurate as you would make your resume.

Know your options –  First time home buyers have a HUGE advantage over other categories of home buyers. There are millions of dollars in first time home buyer and down payment assistance programs available and many families qualify for more than one type of incentive.

Interestingly enough, hundreds of thousands of dollars each year go unused.

These programs are the “job search” firms that you might pay to help find your dream job. While other home buyers are struggling to save enough for down payment, you have government programs with millions of dollars to spend specifically to help you get your first home.

The first time home buyer incentive landscape has changed dramatically over the last twelve months and many of the programs that were available then might be different than when you last checked.

Like a “job search” firm, the first time home buyer programs have very specific steps you need to follow in order to successfully get the right incentive(s) for you and your family. You can do it on your own if you like but the quickest path to your new home is using a first time home buyer specialist that has experience with all the first time home buyer programs in your area.

Quit procrastinating – Another year has passed and what do you have to show for all the rent money you’ve paid over the last twelve months?
You have a big smile on the face of your landlord!
He knows that you’re paying him more in rent than you would likely pay for a comparable home down the street that YOU owned.

You’ve missed out on the potential tax benefits of owning your first home
You missed out on one more year of being the landlord
You’ve spent another year renting  because you believed the misinformation being spread by the mainstream media.

More than 59% of renters aspire to own a home and 80% of homeowners plan to buy another one.
You won’t get your dream job by sitting on the couch and waiting for the perfect employer to cal or send you an email. You won’t get your first home by sitting there either.

If you’re ready for your piece of the American dream, you have to go out and grab it.
You can start by contacting us.

Down Payment Assistance for San Diego first time home buyers

First time home buyers in San Diego may now be eligible for down payment assistance through the San Diego Housing Commission.SDHC also has funds available for first time home buyers who may be in need of closing costs assistance to help them make that jump from renter to homeowner.

How do I qualify for down payment and or closing costs assistance?
1. You must a first time home buyer – defined as not having owned a home in the last 3 years
2. Your income cannot exceed the program guidelines based on family size.
3. You have to qualify based on your income and credit for the underlying first mortgage
4. You will be required to attend a certified first time home buyer education class

How much down payment assistance can I get?
You may be eligible for up to 17% of the purchase price. The maximum purchase price is $408,500

What homes are eligible for down payment assistance?
Single family, townhomes and condominiums located in all zip codes that begin with 921 may be eligible.

Do I have to repay the down payment assistance?
Yes, the money has to be repaid but there are no payments as long as you own the home as your primary residence. Interest accrues at 3%.

Am I eligible for closing cost assistance too?
Yes, first time home buyers may be eligible for closing cost assistance of 4% or %15,000, whichever is less, with or without the down payment assistance.

Will I be eligible for a first time home buyer tax credit?
The federal first time home buyer tax credit expired in 2010, but first time home buyers (and some non-first time home buyers) may qualify for MCC (mortgage credit certificate) which converts part of your interest deduction to a dollar for dollar credit against your income tax liability. Click here for more information

To contact a first time home buyer specialist – Click Here

The perfect home is for sale in Murrieta, CA

We all have a different definition of perfect, but this one has everything needed for first time home buyers in today’s market:
1) It’s been completely rehabbed and is NOT a flip!
2) It’s priced $75,000 BELOW the average sale price for Murrieta at $174,200
3) It has to be sold to a first time home buyer (no investors to swipe it from you).
4) The seller is willing (no make that required!) to accept the RivCo Down Payment Assistance program
5) Qualified first time home buyers are eligible for up to 30% in down payment/closing cost assistance.

Now that’s my definition of perfect!

http://www.mrmlsmatrix.com/DE.asp?k=922462XQSSE&p=DE-88306087-208

For more information, Contact Us

What do Americans think about homeownership?

The majority of first time home buyers have said that saving for a down payment is the biggest hurdle for them on their path to homeownership, and contrary to what you might hear from the mainstream media, first time home buyer programs and down payment assistance are alive and well.

But how do American’s feel about homeownership? To find out check out the result of this survey done by Trulia.com

Trulia American Dream Survey – Fall 2011

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How do you feel about the American Dream?
If you want to get on the path to homeownership, Contact Us

What's keeping you from your piece of the American Dream?

Buying a home is the most important decision a first time home buyer will make in their life (so far!). There are so many factors to consider and the current economy is no help.

According to a recent survey by Trulia.com, “70 percent still say that homeownership is still central to their American dream which is unchanged from January despite declining economic conditions.”

What is your biggest obstacle to homeownership?

If you’re like 51% of first time home buyers, then saving for down payment is your #1 obstacle. Good News?  There a number of down payment assistance programs available to help you leap that hurdle. Even if you think you make too much or don’t really need down payment assistance, it should be part of your financial plan.

Is owning your first home part of YOUR AMERICAN DREAM?

To ask your burning question

 

 

4 Pitfalls for first time home buyers to avoid when buying a foreclosure

Due to the mortgage crisis that our country faced over the last several years, there are continually more and more foreclosure properties that are being put up for sale everywhere you turn. Of course, this can be very tempting for first time home buyers as people can sometimes get properties for 30% or even less on the dollar than they sold for less than five years ago.
However, if you are considering a foreclosure property for your next purchase, then there are some common pitfalls that you will need to avoid along the way to protect yourself and your future asset. Let’s review some areas to be aware of before making any serious offers.
1. Avoid Making Emotional Offers: Just because you think it’s a deal, doesn’t mean it really is. When you are planning on putting a bid down on a property, you need to be extremely confident with the home’s current condition, its true market value, and what will be needed to fully restore the property.
Too many buyers will think that they found a smokin’ deal and fear that they will lose the home to another bidder. So instead of taking the time to truly do their homework and complete the proper inspections and analysis, they can end up locking up a property that’s only a deal for the seller.
2. Estimate Neighborhood Values: Consider what other comparable properties are selling for and talk to a real estate agent who has a working knowledge of the area. In fact, it’s a wise decision to thoroughly review these questions and any other recommendations your Realtor may make:

  • Is this neighborhood a desirable location and how are crime rates?
  • What schools would be available for my kids or future buyers?
  • Were there any other foreclosures or investor sales that could negatively affect the future value of my home?
  • How long do I plan on living there and how could that affect things?
  • What type of appreciation should I expect?

3. Get Preapproved: Before you even start looking at homes, you must get preapproved on a mortgage in order to know exactly what you can afford. There are a number of first time home buyer and down payment assistance programs available and many families qualify for more than one.

Sadly, many buyers can miss out on some phenomenal deals or spend hours of wasted time because they avoid this step. Show banks that you are a serious buyer and have your financing in place!

4. Get Professional Help: Not only should you seek the expertise of an experienced Realtor, but you may also need guidance from a real estate attorney or financial consultant as well. Each professional can ensure that you are making the right choices throughout the process and can protect you from any issues you may come across along the way.

Remember that there is a lot more than meets the eye when you are trying to buy a foreclosure property. Negotiating with the banks, filling out paperwork properly, and undergoing all the necessary inspections can be a very detailed and tedious procedure.
Therefore, we encourage you to give us a call today to get started. Our agents have years of experience assisting other clients with buying foreclosures for their next home or investment property. Discover how we can help you to make a smart and profitable investment as well!

How to get the best price when buying your first home

One of the most important aspects to buying your first home is to ensure that you purchase for a fair price. There are certain key steps that you must follow in order to make a sound decision, so it pays to have a knowledgeable Realtor on your side who will be able to help you obtain the best and most realistic price for your first home.

Determining Market Comparables

For example, one of the first ways that your agent will discover the best price for your first home is by researching local market comparables. In most cases, they will be able to bring up a list of properties sold over the last 6 months within a 1 mile radius. Properties should also not be bigger than 20% of the subject size.
Additional features to consider would be the neighborhood, structural differences, bedrooms and bathrooms, overall condition and other amenities such as a pool. Other factors, such as if a particular home sold for much lower due to foreclosure or substandard condition is something your agent will uncover as well.

Houses That Have Not Sold

Next, many homes could be on the MLS for 6 months or longer without ever selling. Others that are comparable could have been taken off the market after not getting enough offers or being listed for too high. This is valuable information, because you may be able to get a particular property for a substantial discount or it may not even be worth pursuing.

Neighborhood Reputation & Appreciation

When it comes to buying a house, this is one of the most important reasons to work with a Realtor. A good agent will have a familiarity with local market trends and statistics, you will be able to learn what makes a particular neighborhood desirable and also which areas to avoid.
A lot of things can affect a home’s value such as the school district, crime levels, or even other properties located nearby (a neighborhood with a lot of foreclosures). In fact, sometimes these factors can even differ from block to block!
Your agent will also help you to assess the appreciation rates (if any) for various neighborhoods and future development plans that could affect home prices, so that you can get a decent indication of what to expect down the road. This can be extremely valuable information dependent on how long you plan to live in your first home.

Appraisals & Inspections

After you place an offer on a property, you will have the opportunity to get an appraisal and home inspection as further due diligence. Even with an agent, there are sometimes issues that may arise with a property that could affect the home’s value that were not evident at first glance.
Some of these problems could include structural issues, plumbing or electrical, termites or insects, mold or even water damage to name a few. Obviously many of these things could impact the price significantly and would either have to be fixed by the seller or renegotiated to get a fair price.
In conclusion, there are a lot of areas to consider when choosing your first home and getting a fair price on a property. Since this is one of the biggest purchases you will ever make, it is crucial that you protect your interests and ensure that you are getting the best deal possible.
In order to get started researching homes in our local area, contact us right away using the information located above. We look forward to serving you as you search for your first home!

Click here to contact a first time home buyer specialist

7 tax benefits for first time home buyers

In today’s market first time home buyers know most of the reasons why the “perfect storm” of today’s real estate market presents them, even though the media is killing the dream of homeownership.

In most markets across the country everyday, first time home buyers are discovering that buying is cheaper than renting. and there are thousands of foreclosed homes from which to choose. First time home buyers  can also start their real estate investing career with multi-family housing.

But one of the cornerstones of home ownership has always been the tax benefits. In the most simple terms you will pay Uncle Sam less money if you own a home than if you don’t.

Here are 7 possible tax benefits from homeownership:

  • Mortgage Interest & Points: If mortgage debt is $1,000,000 or less, married couples filing jointly can deduct the full amount of their interest. Otherwise, those filing separately can write off up to $500,000 worth. This also includes second homes or adjacent land to your main residence. Points on either a home purchase or refinance can also be deducted, but these must be amortized for the latter.
  • Property Tax Deductions: All state and local taxes regardless of how many properties you own can be deducted, up to the alternative minimum tax required by law. Funds that are held in escrow accounts can only be written off once the taxes are paid.
  • Private Mortgage Insurance (PMI): A portion of PMI can also be deducted if household income is less than $109,000 per year or $54,500 for those filing separately.
  • Interest On Home Equity Loans: As long as you have the necessary equity in your home to secure the required debt, you can write off the interest on a loan of up to $100,000 for those who are married filing jointly, or $50,000 when submitted separately.
  • Working From Home: That’s right! Even those who use a portion of their home for work purposes are able to deduct a percentage of the home’s depreciation, utility/maintenance costs and insurance. This is one you definitely want to review with your tax professional to make sure you are getting the maximum available to you.
  • Home Maintenance Interest: This is a tricky one, as you can write off the interest on any capital improvements made to your home, which will increase value and/or prolong the life of your home. This includes certain types of restorations or additions made to the home with no cap on the investment. However, you will not be able to deduct minor patching or cosmetics made to the home.
  • Capital Gains/Selling Costs: As long as you have lived in your primary residence for at least 2 of the last 5 years, you are permitted to sell your property for up to $500,000 of profit for married couples filing jointly, or $250,000 for singles with absolutely no tax penalties. However, if you end up selling for an amount above either threshold, you can subtract the amount of closing/selling costs that you incurred from your total gain. Those who fall outside of the 2 out of 5 year limitation may be granted an exception given certain unique circumstances such as health problems, relocating for work or other such occurrences.

Therefore, it pays to consider the benefits of homeownership and to discuss with your tax professional what you may qualify for. Especially for those who are entertaining the thought of buying instead of renting, it is very important to consider the long-term impact that owning real estate can have on your overall financial future.

There are advantages whether you are buying for yourself or investing in properties for additional income. Contact us today using our information above to start exploring what options may be available for you!

5 Reasons for first time home buyers to use a Realtor

For First Time Home Buyers working with a true real estate professional comes with a lot of advantages over trying to go after it alone.
By working with a pro you’ll get:

  • Someone on your side protecting your interests and not the banks
  • Someone with Market Knowledge who can help you navigate existing inventory and get you a good deal
  • Someone with the industry contacts to help you find the right first time home buyer program for you and your family
  • To save time! Avoid common newbie mistakes. Plus you’ll be able to quickly focus in on properties fitting your unique criteria
  • A 3rd Party Buffer when it comes time to negotiate. You won’t want too many emotions involved here – having a buffer could make you lots of $$$

First time home buyers don’t need just a Realtor, they need a VERY GOOD Realtor.

It’s a challenging market out there and you’ll need all the help you can get, because after all it’s your money on the table

The three most important words in real estate for first time home buyers

First time home buyers have to be wondering, “Is it a good time to buy real estate?”
The answer is always, “Yes, but it depends.”
it is always a great time to buy real estate but:
Not for everyone,
Not at any price, and
Not just any property.
In order to make that determination for YOU, we first must understand the three most important words in real estate.
If you asked almost any Realtor today, they would say the same thing they’ve been saying for years: Location, Location, Location!
First of all it’s only one word and “location” does come with a premium, but is the premium worth the price? Maybe, Maybe not?
So what are the three most important words? LONG TERM OWNERSHIP
We buy property, whether a personal residence or for investment, in hopes that we are financially better off down the road than we are today. The chance of that occurring is very low if one does not own real estate for at least five or more years.

The reason is that transaction costs, repairs, monthly ownership costs higher than comparable rent, and ownership hassles dictate that it is better to invest your money elsewhere and stay as a renter if you are not sure you will own long term.

But today’s real estate market has created a “perfect storm” for first time home buyers that presents a once in a lifetime opportunity to own a piece of the American Dream.

Therefore, since you are going to be a long-term holder (the longer the better) you really should not be that concerned with short-term current market price fluctuations because ten years from now the home’s value will likely be more than it is today.

What you should be concerned about is finding a house that you “love”— one that fits all the right reasons you want to own that particular property for a long time!

Find a house you love, that you will own for a long time, is in decent shape, lock in a long-term mortgage and sleep well.

Thanks to Leonard Baron for the for some of the content.
Leonard Baron, MBA, CPA, is a San Diego State University Lecturer, a Zillow Blogger, the author of several books including “Real Estate Investment – Rental Properties, Foreclosures, Short Sales” and “Buying a House, Condo or Townhome – Guide to Smart Purchasing” and loves kicking the tires of a good piece of dirt!




5 Reasons for First Time Home Buyers to be a homeowner and a landlord!

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If you’re getting ready to purchase your first home, you may want to consider the advantages of leveraging your money through the use of a multifamily property (2-4 units).
This can be especially appealing to young families just getting started out who may need the extra income to help them qualify.  Your lender will be able to use projected rents of the other units to improve your debt to income ratio.
Now that renting has become more expensive than buying, why not get the best of  both worlds, low mortgage payments and higher rents? So let’s review some of the top benefits of multifamily investing:1.
1. By purchasing a 2, 3 or 4 unit  property within a desirable area, you will immediately start reaping the benefits of home ownership and collecting strong investment income.  By finding reliable tenants, you will be able to cover up to a half or more of your mortgage payments.

2. You will be consistently paying down principle and building equity.  When the time comes to upgrade to a different property, the consistent income from your multi-unit home will help to cover a portion of your new mortgage, plus you will already be on the path to building your investment portfolio.

3. Additionally, instead of driving across town to keep up with maintenance and tenant issues, you will essentially be your own on property manager.  This makes it infinitely easier when trying to collect rent or conduct showings, and you don’t need to pay another party for the upkeep of your home.

4. Next, in today’s market, cash flow is of the utmost importance.  Nothing is worse for a new investor than when the property goes vacant for months.  With a multifamily unit, you can alleviate the fear of being stuck with the full amount of mortgage payments, because typically your home should be at least 50% occupied.

5. Finally, you will be learning the ins and outs to one of the most effective investment strategies available.  Purchasing your first multi unit will teach you all about how to buy, repair homes, market your property to tenants, collect rent, and how to invest your income into future properties.

Therefore, it’s worth considering a multifamily home for your first purchase.

Before choosing an area to live in and searching for a property that fits your needs, it will be to your advantage to consult  an experienced Realtor within you local area that can give you professional guidance.

Contact us today to start learning more about the opportunities available to you and to discover where you can make a wise investment for your financial future!

What's killing the American dream of homeownership for first time home buyers?

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Let’s see you can own cheaper than you can rent, interest rates are the lowest in 50 YEARS, and home prices are ridiculously affordable.

So why aren’t more first time home buyers buying?

Obviously the state of the economy is causing many families to think twice about the purchase of their first home, but how can anyone make an informed decision with all the misinformation being spread by the disconnected mainstream media and the so-called experts?
As first time home buyers it can be hard to separate fact and fiction.

Let’s take a look at some recent “expert analysis” and compare it to what’s really going on in most markets.

First there’s this gem from the brain trust at Trulia.com:
“Today, many banks are actually less enthusiastic about approving residential mortgage applications, which has dragged out the home buying process,” he added. “Until a middle ground on lending practices can be met, many highly-qualified buyers may be forced to be renters by choice for now.”
The truth: There are dozens of loan programs for first time home buyers and they don’t have to be “highly qualified”. They do have to prove they can and will repay the lender (Hardly a “less enthusiastic” guideline)

And then this from the National Association of Realtors:
Walter Molony, a spokesperson for NAR, fingers tight underwriting practices as another suspect culpable for the upswing in rentals.
Lenders have only been willing to lend to creditworthy buyers.”

What’s with those lenders? They only want to lend to people who will pay them back! Imagine that?

(Thanks to MReport for the “insights” from these “experts”)

I don’t know about other real estate markets but here’s what’s really going on in the Southern California Real Estate market, particularly Riverside and San Diego Counties.

  •     First time home buyers can get ZERO down financing with credit scores as low as 580   
  •     First time home buyers in all of California can move in for as little as 1% with a credit score of 640
  •     Even non first time home buyers can move in with as little as 1/2% with a credit score of 640
  •     First time home buyers in Riverside County can get up to 20% in down payment assistance with a credit score as low as 600
  •     Veterans can still buy a home with ZERO down with credit scores as low as 600
  •     There is still a TAX CREDIT for first time home buyers in Riverside and San Diego Counties

The talking heads in Washington and the media haven’t got a clue about the solution to the housing problem.
The solution will come from the bottom up not the top down.

If we can find ways to put more first time home buyer families in homes who want to and CAN make their mortgage payments (Yeah, that’s important!), we’ll work through the “shadow inventory”, and won’t be turning our neighborhoods into “detached apartments” by selling foreclosed homes to investors.

P.S. Did you know there are at least 10 programs available in our market to help first time home buyers purchase with little or no money down?

I would love to hear your comments, and feel free to share.

 

Buying IS cheaper than renting for first time home buyers

In 74% of the real estate markets across the country it is cheaper to own your first home than it is to rent it.

Trulia.com uses the rent ratio formula to determine whether buying is cheaper than renting for first time home buyers, and as you will see in the video below buying is outpacing renting most communities across the country.

For more information on the rent ratio calculation, Click Here

 

Trulia Summer 2011 Rent vs. Buy

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Don’t forget the first time home buyer down payment assistance programs, that may or may not be around in the future
To contact a first time home buyer specialist, Click Here

New Homes in Murrieta Zero Down financing for first time home buyers at Fox Hollow by KB Home

First time home buyers who have decided that a new home in Murrieta is the best match for their family can now get Zero down financing at Fox Hollow, KB Home’s new home community in Murrieta.
Qualified first time home buyers may eligible for this zero down financing using the USDA home loan program. Unlike most first time home buyer programs which offer down payment assistance, the USDA program is truly Zero down and does not have mortgage insurance, which means significantly lower payments than other first time home buyer loans.Fox Hollow is one of the few new home communities in Murrieta to be able to offer this program because of its location in an unincorporated area of Murrieta and contrary to popular belief first time home buyers don’t have to “walk on water” to qualify.
Like all first time home buyer programs there are certain qualifications:
1. You can’t have owned a home in the last three years
2. You meet the income limits based on family size (a family of 5 can make up to $101,100)
3. You are able to qualify on based on your income and credit for the underlying mortgage (credit scores as low as 580 may be eligible).For more information contact us or visit Fox Hollow and speak with Robyn Nelson or Manny Crawford, KB Home sales representatives. You can also call them at 951-677-4110..

The USDA home loan program is a great opportunity for first time home buyers who have made the decision that all of the benefits of owning a new home are just what they would like for their family.

Don’t forget to ask Robyn or Manny about the first time home buyer tax credit available at Fox Hollow.

For first time home buyers protecting your home is as important as buying it.

Buying your first home is the most important financial decision you will make in your life (so far).

Sometimes the costs of buying your first home will cause you to consider cutting corners on the costs. That’s one reason why we recommend that you consider using down payment assistance even if you don’t need it or don’t think you will qualify for it.

One of the costs that should NOT be on your “chopping block” is home warranty protection.

A home warranty is a service contract that covers the repair or replacement of home systems and appliances that fail due to normal wear and use during the term of the Plan.  The typical contract provides coverage for 12 months, is renewable, and coverage can be customized to meet the needs of each individual home.

Your home is most likely one of your biggest investments.  Adding a home warranty protects this investment by keeping the covered home systems and appliances in good working order.  It also provides peace of mind and budget protection for the homeowner, since repair or replacement of major systems or appliances in today’s dollars can easily cause financial strain.

In addition to budget protection, home warranties offer a convenient service solution should a system or appliance break down. This is particularly valuable for homeowners who are relocating to a new area.  Most warranty companies take service calls 24 hours a day, 365 days per year, and can immediately dispatch a qualified contractor to perform the required service.  With most claims, the homeowner pays only a nominal service fee to the contractor.

Although home warranty coverage can be obtained for most home systems and appliances, there are specific industry limitations of which the consumer should be aware.  Most home warranty companies don’t cover general maintenance or cleaning, cosmetic defects, inadequate capacity, secondary damage, or service involving hazardous or toxic materials such as asbestos.

Always read the home warranty contract to determine the coverage, and make special note of terms and conditions.

When you purchase a home, you can feel confident choosing Old Republic Home Protection as your home warranty provider.  We have been delivering outstanding coverage and service to the real estate community and consumers since 1974.  Our goal is to provide the best home warranty coverage on the market at reasonable rates, protecting our clients from the high cost of repair or replacement of their home’s major systems and appliances

Thanks to Kathy Lansford of Old Republic Home Protection for the information! For more information contact Kathy:  kathy@orhp.com

3 important things to consider about the security of your first home

For any first time homeowner, it is very important to look into professional companies that can provide you with the very best and most up-to-date home security system. Of course, there are a number of other things to think about… but the most important part of any home is how safe it is for its residents.

With that in mind, here are a few things to think about with regard to home security.

First, before you protect your home from criminals, it is important to consider security from the point of view of those criminals.

Ask yourself what a thief or vandal might think about before attempting to break into a home.

From there, you can go about securing your environment against the specific aims and ideas of criminals, at least as far as you understand them.

Here are a few examples of how this way of thinking about home security can help you:

1.) The first thing that any criminal must do when looking to break into a home is target that home. He or she will likely stake out the property for a few days – generally, larger homes or homes in high income areas are automatic targets – before deciding to attempt a crime. With this in mind, focus on making your property an unappealing target. Make it clear that people are always home by leaving lights on when you leave, for example, And, if you sign with a home security company, be sure to put a sign in your yard indicating that you are protected. This will alert the criminal to the high risk of going after your home.

2.) Limit easy access. Remember, a criminal’s primary goal is to avoid capture. A home invader will go to great lengths to avoid breaking a window or making a loud noise… so, they often look for easy access like unlocked doors or open windows. Simply making sure that doors and windows are closed and locked at all times may deter most criminals from trying to invade your home.

3.) Criminals startle easily. Again, the primary objective of any thief or vandal is not to get caught. So, by equipping your home with alarm systems, motion detectors, and other security features, you can greatly decrease the likelihood of a successful break-in. In many cases, if a person breaks into a home only to hear an alarm triggered, he or she will immediately turn and run. The wealth gained from a break-in is not worth jail time to very many criminals. Ask your home security company about installing these devices, and your home should be about as secure as possible.

5 things for first time home buyers to consider when buying a foreclosure

First time home buyers who are in a real estate market with an abundance of foreclosures, not only need to exercise “due diligence”, they also need to make sure they don’t get caught with GDS (Great Deal Syndrome) and make sure this particular home is still the right one for you and your family.

What Makes a Foreclosure a Good Deal?
When you are about to purchase a foreclosure, consider these 5 things:
1.    “I love the property” is what you say after you’ve viewed it, driven the neighborhood, and investigated the property fundamentals. You love it because it is very close to exactly what you were hoping for in becoming a homeowner, or rental property owner.
2.    “I plan to own it a long time” is what you say when asked. Regardless of how great a deal you think you are getting, the break-even point in ownership is really about five years. If you aren’t going to own it that long, you are most likely better off staying a renter. Remember the three most important words in real estate: long-term ownership
3.    “It’s in pretty good shape” is what you say when your friends ask about the physical condition of the property. The vast majority of buyers have wildly low expectations of how much it costs to renovate a property. Renovations usually cost a lot more and take a lot longer than one believes, so let the contractors buy the fixer-uppers.
4.    “The price is in line with comparable recent sales in the neighborhood” is what you find out when you do a comparable market analysis of nearby properties. Remember, if it sounds too good to be true, it probably is.
5.    “Most of the nearby houses are occupied” by owners, or at least renters in the area. Neighborhoods with many empty houses can go into downward spirals that can become very bad areas with very low home values. Avoid that type of risk.
Thanks to Leonard Baron, MBA, CPA, is a San Diego State University Lecturer, the author of “Real Estate Ownership, Investment and Due Diligence 101 – A Smarter Way to Buy Real Estate”, and loves kicking the tires of a good piece of dirt!
Other related posts:

Why due diligence is important for first time home buyers!

In most real estate markets across the country, first time home buyers have their choice among hundreds of foreclosed homes.

But what makes a foreclosure a good deal?  It’s not just the lowest price because that could be a reflection of property condition. Nor is it the best terms, if the terms are “too good to be true” they probably are.

It’s a good deal if, after doing your due diligence, you’ve determined it’s the best home available for you and your family.

“Due diligence” is a term normally reserved for real estate investors, but first time home buyers should perform their own due diligence as well.

The first step in performing your due diligence is hire a good real estate agent. It’s a good idea if the agent represents only you and not you and the seller. There’s negotiating to be done and you want someone who has your best interest first.

After closing you’re the one who will be living there and making the payments, so you’ll want to make sure you know as much about the home and the process of buying it as you possibly can.

To get your Due Diligence Property Checklist – Click Here

 

Other Related Posts:

Help on the way for first time home buyers credit?

It’s no secret that getting a first time home buyer loan in today’s market requires better credit histories than in the past.
But bad credit doesn’t have to be a life sentence, but it’s up to you to get your financial house in order to make that dream of owning your first home a reality.

Did you know that more than 30 million Americans are contacted each year by collection agencies regarding unpaid medical bills?

In June 2011, a bill titled the Medical Debt Responsibility Act was introduced to Congress by a bipartisan group. This bill would require the three national credit reporting agencies, Equifax, Experian and TransUnion, to remove medical collection records of $2,500 or less from credit reports within 45 days of being paid or settled.

Reasons to Support the Bill

1. Medical bills are sent to collections too quickly by medical professionals
2. Collections can have a major impact on interest rates
3. To improve credit scores so that Americans can buy homes and stimulate the economy
4. Medical bills are not considered a planned event and are usually a necessity or an emergency
5. Some medical bills are disagreements over co-payment
6. Some consumers may not be aware that the hospital or doctor turned the bills over to collections
7. Some consumers don’t know collections are on their credit report until they apply for a loan

To contact a first time home buyer specialist about your credit scores

 

Should a first time home buyer buy a fixer upper?

To ask your burning question for a first time home buyer specialist

Other related posts:

First Time Home Buyer Myths – Busted!

Another First Time Home Buyer Myth – Busted!

And Another First Time Home Buyer Myth – Busted!

What does the debt ceiling crisis mean to first time home buyers?

Well we made it through the debt ceiling crisis with our collective “rear ends” in tact., but what does this mean for first time home buyers?

Did you know the debt ceiling has been raised 75 times since 1962? and the country has survived.

So what does it mean to you, the first time home buyer?

Well short term, interest rates dropped to an 8 month low on Monday on news of the debt settlement, but  interest rates change daily and as the stock market recovers, interest rates will probably inch back up a little bit.

What’s the longer term impact?

Did you know that in the last 5 years interest rates have risen 1% within 60 days FOUR times, so this “window of opportunity” may not be open for too long.

The three main rating agencies  have indicated they will continue to rate the U.S. debt as AAA for now but with a negative outlook – a rating that indicates a possible downgrade.

A downgrade means higher interest rates.
The formula is simple: Higher rates = less demand = lower home prices.  
Even though home prices may continue to drop, an increase in interest rates will more than offset any reductions. It’s your money on the table

Did you know that a 1% increase in interest rates, will increase your payments more than $100? (based on a $200,000 loan)I’m more concerned about the future of first time home buyer down payment assistance programs.
As the government looks for more ways to cut spending, the funding of these programs certainly has to be in their sights.

The #1 barrier to homeownership for first time home buyers is saving the funds for down payment and the continuation of these programs is vital if the economy and housing is ever going to make a full recovery.
Even if you weren’t planing on down payment assistance, it’s a good idea to take a look at it as an option.Other Related Posts:

First time home buyers can get out of credit score jail!

The current real estate market is giving first time home buyers a chance to follow the smart money and make that move from renter to homeowner.

Rising rents are providing additional motivation and “Why rent when you can own for less?”  is becoming the catchphrase of the day.

If saving for down payment is the #1 barrier facing most first time home buyers then having a low credit score is certainly a close second.

But having a low credit score doesn’t have to be a “life sentence”.

FirstTimeHomeBuyersNetwork.com has partnered with one of the nation’s leading credit companies, Informative Research, to help first time home buyers in California get out of “credit score jail”.

Here’s how it works:
A first time home buyer, working with their first time home buyer specialist determine the destination (the desired score) and IR will tell them the steps they need to take to get there.

  • The first thing you’ll see is a quick summary of the results on your file to to know immediately if you have an escape route to your desired score.
  • A  map is laid out with the paths to increase your scores, ranked from easiest to hardest.
  • Clear and concise directions to you on what you will need to do to achieve your desired score
  • We will search for significant variances on trades reported amongst the three credit bureaus that may be affecting your score.
  • We also search for any changes that will occur to your credit report that will naturally occur over time.

It’s not a “get out of jail free” card  and this program will require commitment on your part to reach your destination but like everything else in life, if you’re willing to work at it the rewards are worth the effort.

To contact a first time home buyer specialist

Other related posts:
Don’t believe traditional media when it comes to your local market

The internet is a first time home buyers best friend?

The best place for first time home buyers to get a “smokin deal”?

6 Key things to know about first time home buyer loans

A first time home buyer can find the right mortgage from one of  the mortgage sites on the internet?
Just like the other first time home buyer myths, this is too important to be an “off the rack”, one size fits all shopping trip.
Many of these sites are not lenders and shouldn’t be issuing rate quotes anyway.
Apparently, the government has too many other things on their plate to investigate.
Hopefully the new sheriff in town will start earning his keep and start enforcing the existing laws.
These “rate quote engines” have one purpose: Get as much information from you as possible so they can “sell” your information to some lender.
Lenders are now being held to a higher standard when it comes to quoting interest rates and disclosing loan terms, and doing so without the following information is irresponsible and probably a violation of federal truth-in-lending guidelines.

To issue you a rate quote, you can rely on, your first time home loan lender needs a

P-E-N-C-I-L 

Property – Whether your first home is a single family home, a condo or a manufactured home it can affect your interest rate and loan terms. The property also influences the amount you will pay in property taxes and homeowners insurance., which are included in your qualification.

Estimated Value – The amount you wish to spend for your first home may also impact your loan rate and terms. Too low and there may be additional pricing add-ons. Too high could impact  the first time home buyer program you would be eligible for.

Name – A lender has to have your name to prepare a rate quote for YOU. It’s not  one size fits all and all of the pieces of your financial picture are important.

Credit – To accurately quote you an interest rate a real lender has to run your credit to determine if you’re “credit worthy” according to each programs guidelines. Most loan programs have pricing adjustments based on credit score, so without looking at your credit, a lender would be shooting in the dark..

Income – The amount of money you earn also may have an impact on your loan program and interest rate. If you’re looking for down payment assistance and a first time home buyer program you have to meet the income guidelines for those programs. Your debt to income ratio may also impact your eligibility and interest rate.

Loan Amount – The amount of your first time home loan may also impact your interest rate and costs. If your loan amount is too low, there may be additional costs. If your loan amount exceeds certain program guidelines it may move you to a different product , which almost certainly means different rate and terms.

Buying your first home is too important, to leave the most important piece of the puzzle to someone who is only interested in your value as a lead they can sell.

For more information about first time home buyer programs

Other related posts:

Are you shopping for your first home in Fantasyland?

Don’t waste time with on-line mortgage calculators

San Diego First Time Home Buyers are following the smart money!

Is now a good time to buy your first home in San Diego?Maybe, Maybe not, but here are some compelling financial reasons to consider buying your first home in San Diego.1) Rents are on the rise in San Diego – Renters in San Diego, according to CNNMoney, may soon be facing rent increases of 31% over the next few years and 10% in 2011 alone.
2) Rents are going to continue to go up! – What will you do when your lease expires?
If you’ve already received notice of a rent increase and you’re  considering a move, your new landlord can require  up to two months rent (first month and security) to move in.  So an apartment with $2000/mo in rent will require $4000.

If you’re a first time home buyer or haven’t owned a home in the last three years, the California First Time Home Buyer down payment assistance program, only requires you have 1% of your own money in the deal. Of course you’ll need a good Realtor and Lender who are experienced with these programs to guide you.

According to Trulia.com the median sales price in San Diego is $315,000, so your minimum contribution would be $3150 or $850 less than you would pay to rent.3) There are down payment assistance programs  and first time home buyer tax creditsto help you make that move from renter to homeowner.Down payment assistance for first time home buyers in San Diego starts at 3% and can be as much as 20%. All first time home buyer programs are based on income limits and family size but a first time home buyer family of 4 in San Diego can make as much as $90,600 and be eligible.
In addition, San Diego County is one of the few areas in California that still has a tax credit for first time home buyers.For more information on these programs, Contact Us
4. Because that’s what the “Smart Money” is doing.
Within the last couple of weeks both San Diego and Riverside Counties have banned the foreclosure auctions from the courthouse steps.

Why? There are some many people bidding at these auctions who are trying to buy San Diego and Riverside County real estate at a discount that they’re disrupting the every day business of the courts.

These  “big money” investors (I met with one who had $2 million dollars in properties he was bidding on) are all paying cash, which makes it an even riskier proposition for them than you who might be buying San Diego County  real estate for a 1% investment.

They do this for a living and recognize that this may be a once in a lifetime opportunity to own real estate in San Diego at these discounted prices.
If it’s the smart thing for them,it might be the smart thing for you too?

Other Related Posts:
Great news for landlords and first time home buyers  

First Time Home Buyers can get “15 years same as cash”

First Time Home Buyer Myths – Busted

Great news for Landlords and first time home buyers!

Landlords got some great news – renters? not so much!
First Time home buyers?

When it’s cheaper to own than rent, that has to be great news!

It seems that almost daily first time home buyers are getting information that makes that buy vs. rent decision a little  easier. According to a new report released by real estate search site HotPads.com residential rental rates have risen 6.7% since June of 2010, far exceeding industry experts predictions.
We are seeing renters flocking to their chosen social networks, flustered that their landlord is screwing them over and are being met with the harsh reality that it isn’t their landlord, it is the entire market. (AgentGenius)
It’s estimated that rents in San Diego will rise 10% in 2011 alone.

So how do you know if buying is the right decision for you and your family?
Forget the financial part for just a minute and ask yourself if you’re ready to assume the lifestyle.
If you think you’re ready to settle in fand can handle the additional responsibility that comes with homeownership, then  you might want to use this handy tool to help analyze the financial part of your decision.

If you find two similar houses, one for sale and the other for rent and divide the sale price by the annual rent, you can call the result the Rent Ratio.
It’s a formula similar to the price-to-earnings ratio that savvy stock investors use.

In concrete terms, a rent ratio above 20 means that the monthly costs of ownership will exceed the cost of renting. Anything less the pendulum starts to swing toward home ownership. Anything less than 10-14 is clearly a buying sign.

But there’s more to the decision than just the monthly payment.

If your lease expires at the end of the month, how much would you need to move into your next apartment or housse?

In California a landlord, for an unfurnished rental unit can legally charge an amount equivalent to two months rent (first month plus security).
So if the rent will be $1500 you would need a minimum of $3000.

Will you be able to do that?  if so, check this out!
If you were buying your first home, using the California first time home buyer program you might be able to move for as little as 1% of the purchase price.

For more information on how this program might work for you and your family

Other related Posts:
Save thousands on move in costs with down payment assistance 

Down payment assistance even if I don’t need it? 

First Time Home Buyer Blunders to Avoid

First Time Home Buyer Myths - Busted Again

“A first time home buyer can get a “smokin” deal in this market because of all the foreclosures!”

MYTH! (sort of)

If, by “smokin’ deal” you mean as compared to the prices of 2,3,4 or 5 years ago, then ABSOLUTELY!

But if you mean, you’re going to offer 20, 30, 40, or 50% below current asking price, well then you have three chances! 1) None 2) Fat 3) Slim left town.

There’s no lack of sound byte reporting that is telling you how much less foreclosures sell for than regular or standard sales.

The truth is: traditional media is disconnected from the realities of local housing markets.

All first time home buyers would love to get a “smokin deal” on their first home but the realities of today’s market are driven by “supply and demand” not by your desire to get a “deal”.

If your first home will be in a market that is dominated by distressed sales, then the supply is controlled by the banks and major lenders. Their sole purpose is to sell the house for as much as the market will bear. That’s why the department you’ll be dealing with is called “Loss Mitigation” or in layman’s terms: “Cut our losses department”.

The banks spend a lot of money determining the market value for each one of the homes they own (REOs) or might own (short sales).

They might hire an appraiser to determine market value and/or a local real estate broker to do a BPO (Broker Price Opinion). Using this information is how they arrive at what will be an acceptable selling price.

The banks also have to answer to the investor(s) who own/owned the loan that is/was on your “dream home”. If the banks have already repaid the investors, once again they have to mitigate their losses, because their investors demand it and very often will not approve anything less than their perception of value.

You might have heard that up to 70% of all home sales are to first time home buyers. That creates demand, so you will be in competition with other first time home buyers and thus “the bidding begins”

Almost every market has a “tipping point”. Homes above that price point generally have less competition and below it there’s more competition.

So, your approved target price will determine your competition and whether or not a below market offer will be accepted.

If you’ve hired a Realtor who specializes in helping first time home buyers, they will know that “price point” for your market and can advise you on the amount of competition you might be facing and help you write a competitive offer.

Even if every offer you write is competitive, in most markets you’ll probably be writing more than one before you’re the winning bidder. Writing a “lowball” offer does absolutely nothing to move you along the path to home ownership.

Other related posts:

California first time home buyers get protection from the Quiet Killer

California first time home buyers will be getting another layer of protection starting July 1.
On that date the provisions of the Carbon Monoxide Poisoning Prevention Act of 2010 become law.
All residential dwellings in California will be required to have them installed whether they are being sold or not.
Unlike the snakes in the snake house, carbon monoxide is an colorless and odorless gas that has rightfully earned the name “Quiet Killer”.

Carbon Monoxide Poison Prevention Act of 2010
Details: As of July 1, 2011, Carbon Monoxide detectors will be REQUIRED in all houses (1 – 4 units) if they have any of the following:

  • Any gas appliances such as a gas stove, gas furnace, gas fireplace, gas water heater, etc.

  • A fireplace (even if it only burns wood, pellets, or any other material).

  • An attached garage (even if there are no gas appliances in the house!). Cars continue to emit CO even after they are shut off.

  • ANY rental dwelling that meets the criteria listed above. Yes this means that if you own a house, condo, or townhouse that you rent to another human being, you are REQUIRED to install Carbon Monoxide detectors.

  • As of January 1, 2013, ALL multi-family dwellings including multi-family dwellings that meet the criteria listed above will be required to have Carbon Monoxide detectors. Even those that are not being sold will be required to have them just like smoke detectors.

If you think this is just another layer of government, think again!
Watch this video and you’ll learn more about the “Quiet Killer”

Be sure the home you are buying is safe. A qualified home inspector will provide the information you need to feel confident about your home buying decision. Don’t compromise when choosing a home inspector. Be sure to ask if they will check for this.

Other Related Posts:

Home Inspection? We don't need no home inspection!

Buying your first home can be a daunting experience and many first time home buyers, in an effort to save money on their closing costs are opting to waive their right to the inspections that are in place specifically to protect them.

If you’re a first time home buyer in one of the many real estate markets dominated by foreclosed homes, it’s important to know that those homes are sold “as-is” without any represntations as to potential defects.

In fact Fannie Mae out of the goodness of their heart will let you waive a home inspection, termite report and appraisal on their HomePath properties.
Isn’t it ironic that Fannie Mae, the promoter of first time home buyer housing, will let a prospective home buyer waive the three inspections that BEST protect  them?

Watch this video about a family who bought a home in Idaho, that had a little gartner snake problem. By the way, this is the street view of that home.

A recent episode of the Animal Planet program Infested touted:
Three families fight for their homes as they are overrun by vermin. In New Jersey, a dream home becomes a battleground as a family goes to war against an ever-growing number of bedbugs. A single mother defends her home and children against an invading army of rats. And in Arizona, a family discovers their new home is a haven for deadly scorpions

When a first time home buyer is purchasing a home where a property condition  disclosure is not legally required by the seller, it’s important that you do an extra level of homework and a thorough home inspection is the first step to make sure there aren’t anymore surprises.

Before you write an offer, “Google” the property address to see if anything in the public domain shows up. If your future home has a history you’ll probably be able to find it there.

Buyer beware is a term that’s been in play for years but the one great thing about the internet is that it can be a fantastic and necessary tool to do additional research on a potential property beyond mechanical inspections. (AgentGenius)

Other Related Posts:

Why first time home buyers need a Realtor

Should first time home buyers consider a new home?

First Time Home Buyer Myths – Busted

First Time Home Buyer Myths – Busted #2

First Time Home Buyers Myths - Busted #2

First Time Home Buyers can find the best interest rates on the internet

MYTH!

Just like the myth about buying a home on the internet, you can look at interest rates but you CANNOT find the best interest rates or the right first time home buyer program for you and your family.

Many home loan lenders have gone to great lengths to convince first time home buyers that getting a loan for your first time home loan can be had with a few mouse clicks.

Sure, you can get an interest rate “quote” but it’s worth as much as the epaper it’s printed on. They even give you the ability to “qualify yourself” with a few more mouse clicks and that has a value equal to the quote you just got.

Advertising mortgages on the internet has only one purpose: Make the phone ring or the inbox fill up.
Like many auto dealers and big screen TV sellers, on-line lenders may be advertising a “loss leader” to attract your attention. I’m not saying the rate and terms aren’t available but they need a lot more information from you before they can really offer it to you.

In case you hadn’t heard, home loans are more difficult to get today. It’s not the wasteland that traditional media makes it out to be, but they’re difficult nonetheless.

ALL lenders have “overlays” or loan-level-pricing adjustments that can impact your interest rate and cost based on the type of home you may be purchasing, your credit score, how much of a down payment you will be making and even the state in which you’re buying your first home.

Just as a local Realtor is crucial to helping you find the right home for you and your family, a local lender who specializes in first time home buyer programs is a “must have” to make sure that your first home is a place you will be able to enjoy for many years.

Other Related Posts:
The future of first time home buyer loans (Video)
First Time Home Buyer blunders to avoid (Video)
6 Tips to understand first time home buyer programs

First Time Home Buyers Credit Score - Credit Course 7

How long will negative history appear on your credit report?

Sometimes life circumstances can cause negative items to show on your credit report.

It’s important that you know that these are not a “life sentence” and that “time does heal all wounds”

Watch this short video (less than a minute) to get some general guidelines to the life span of negative credit.

The farther behind you these negative items become the less impact they will have on your score.

If you have negative items on your credit score your first time home loan lender may require one or more of the following:

1) A letter of explanation for the negative item or inquiry

2) If you have collections or charge offs, they MAY require you pay them off before you can get your first home loan.

3) If you have a bankruptcy, foreclosure or short sale they may ask for documentation and a letter of explanation regarding the circumstances.

Other related posts:

First Time Home Buyer Myths - BUSTED!

First time home buyers can get the best information about their market on-line

MYTH!

First time home buyers can get information about the real estate market on-line but it’s not the BEST information.

Buying your first home is the most important decision you will make and relying on the major news outlets is trusting that decision to sound byte reporting.

They only have a few seconds to grab your attention to entice you to read/watch further. To cram as much information in as short a time as possible they will generalize and make conclusions based on one set of data, without talking about the other pieces of the puzzle.

The fact is that traditional media is disconnected from the realities of housing.

Regardless, talking heads are saying in one day that permits are up so housing must be stabilizing yet on another day saying that builder confidence is down and we’re in for a bumpy ride. The truth is that the pendulum is still swinging and there are signs of national housing stabilizing but we’re still experiencing the bounce so we can’t say for sure one way or another (although we can say housing is currently a mess). (AgentGenius)

or how about Foreclosures? from the same AgentGenius article
Various news anchors continue to point to foreclosure data as a sign of a recovering housing market and continue to fail to see all of the moving pieces…The number of homes actually repossessed in May fell 4% from April and 29% year-over-year…
These numbers look good, but don’t take into account why this process has slowed down.
We’ll give you a hint- it isn’t because employment is any better or because consumer confidence is up. No, it’s because the big banks have kinked the hose of the flow of foreclosures in light of the robosigning debacle (where banks didn’t manually review documents before foreclosure leading to illegal foreclosures on wrong addresses, homes paid in full and various other mistakes) as many states attorneys general and federal agencies are investigating the banks’ processes, putting a hamper on how quickly papers are/were being processed.

Where can you get the best information?
Local industry professionals (Realtors & Lenders) will have the best information.

Here’s a first time home buyer tip that will help you find the right professional.
Just ask “How’s the market?”
If they start talking about “their market” i.e. “I’m sooo busy” or “it’s a great time
to buy” keep looking, they aren’t going to give you the important information you need.

Other Related Posts:

More protection for first time home buyers

First time home buyers will have a new cop on the beat effective July 1.
The Consumer Finance Protection Bureau (CFPB) has been charged with
protecting first time home buyers from the fraudulent activities that  fueled the financial meltdown.

Ron Howard (that’s right Opie!) will explain how the CFPB will be policing the activities of a number of industries that affect you every day.

The goal of CFPB is to insure that all consumers are treated fairly and all costs associated with a number of financial transactions are disclosed clearly and in an easy to understand manner.Other related posts:

 

5 Credit Score Myths for first time home buyers-Credit Course 6

For first time home buyers your credit score can be the “deal breaker” if you’re not careful in how you manage your credit throughout the entire process.

Too many first time home buyers have seen their credit scores tumble because they took the advice of family or friends, rather than that of their first time home buyer lender.

A good lender who specializes in first time home buyer programs will give you the best advice on how to manage your credit scores.

Here are: 5 Credit Score Myths for first time home buyers


For more information on first time home buyers credit

Other Related Posts:


First Time Home Buyers Credit - Credit Course 5

First time home buyers on the path to homeownership are going to have their credit history examined thoroughly by the lender of their first time home loan and credit history is a very important part of that examination.

Having a solid credit scores will tell your lender that you seriously the repayment of your credit obligations and are therefore a better risk than someone who has an “erratic” repayment history.

 

 

Watch this short video, it shares a couple of ideas on building a stronger credit score.

 

To discuss your credit score with a first time home buyer specialist

Other Related Posts:
Credit Course 4
Credit Course 3
Credit Course 2
Credit Course 1

First time home buyer blunders to avoid

First time home buyers have so much at stake when buying their first home that in the attempt to “do it right” they might forget some of the basics.

Here are some tips for first time home buyers that while basic do form the foundation of a successful home buying experience.

If I were going to add one more first time home buyer tip, it would be: Rely on the experts you have chosen for the right information, not friends nor family members.

The changes in today’s market seem to happen daily, and you need the advice of someone who is in this market everyday to guide you through to a successful closing.

To contact a first time home buyer specialist

Other Related Posts:

6 Tips to understanding first time home buyer programs

I thought I made too much to get first time home buyer assistance!

Down payment assistance if I don’t need it?

First Time Home Buyers Credit - Credit Course 4

For first time home buyers the first step in getting and maintaining a good credit score is reviewing your credit score for errors.

First Time Home Buyers Credit

It’s estimated that up to 70% of credit scores contain some errors and fixing those errors can have a positive impact on your credit scores which will make qualifying for your first time home loan that much easier.

Watch this short video (90 seconds) on the simple (and FREE) first step to insure the accuracy of your credit.

 

Other related posts:

First Time Home Buyers Credit – Credit Course 1

First Time Home Buyers Credit – Credit Course 2

First Time Home Buyers Credit – Credit Course 3

First Time Home Buyers is this too much house?

First time home buyers in today’s market are faced with an interesting dilemma.
Cheap homes and record low interest rates have made owning a home more affordable than renting.

The dilemma becomes do I buy as much home as I qualify for or one that I can afford?
Warren Buffett has some advice for you.

Check out this short video (90 seconds) it offers some pretty good advice.

Even if you don’t have 20% for down payment, you can take advantage of the first time home buyer incentives to help you make that move from renter to homeowner.

Other Related Posts:

Down payment assistance even if I don't need it?

First time home buyers in today’s real estate market have the opportunity of a lifetime.
Overstatement? Maybe or Maybe not?

Looking back, you will see that the real estate market has resembled a roller coaster ride more than a train ride.

Like a roller coaster ride, buying your first home is not for the faint of heart, but the “rush” you feel when you finally move from renter to homeowner is unlike any other.
To help you achieve your goal, there are a number of first time home buyer programs and incentives.

But the question remains, why would you use down payment assistance if you don’t really need it?

Reason #1 – It’s NEVER a good idea to be left with little or nothing after you move in. If there ever was anything that exemplified “Murphy’s Law” it’s the home buying process. The Boy Scout motto: “Be Prepared” is great advice.

Reason #2 – There’s more to buying your first home than just the down payment.  You’ll have closing costs, moving expenses, utility deposits, or homeowner’s association fees.

Reason #3 - If you’re buying your first home in a market that’s loaded with REO or bank owned homes, unless you get very lucky it will need some cleaning, minor repairs, upgrades, maybe even new appliances. Your down payment money will come in very handy as you turn that house into your home.

Reason #4 - It’s the best terms you’re ever going to get. LIfe’s every day emergencies have even the most cost conscious first time home buyer in need of a loan sometimes. Appliances break down, the car needs tires, the kids need braces or you want to take the family to Disneyland (now that’s a big ticket item).

Some of the down payment programs are “same as cash” while the down payment assistance for California first time home buyers has a low interest rate (3.25%) with no payments required and the balance due when you sell.

Reason #5 - It can make the difference between being a homeowner now or continuing on as a renter, with rents rising at a record pace.
A recent article in CNNMoney warned:
“Renters beware! Double digit rent hikes may be coming soon”
Renters in San Diego, according to CNNMoney, may soon be facing rent increases of 31% over the next few years.

For more information on down payment assistance for first time home buyers – Click Here

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First time home buyers still waiting for the best deal?

Whether you’re buying a car, computer, flat screen TV or your first home, it’s the “American way” to want the “best deal”
Well, homes are on sale in Temecula and Murrieta. In fact they’re on sale throughout Riverside County and Southern California, and the best deals are waiting for you and your family.

Riverside County is offering “15 years same as cash” for first time home buyers

 

The State of California also has a first time home buyer program with down payment assistance.

There’s a first time home buyer program for California State Employees

If your a first time home buyer in Southern California, your other option for housing (other than your parent’s home) rental homes are seeing rents rise to the tune of up to 10% a year in San Diego.
Click here to ask a first time home buyer specialist your burning question

While this video is about a home in Salt Lake City, it only proves that homes are on sale across the country and no one is better positioned than first time home home buyers.

Other related posts:

First Time Home Buyers Credit - Credit Course 3

Credit and credit scores are a big part of the qualifying process for first time home buyer loans and understanding how your score is calculated is critical to obtaining and maintaining an acceptable credit score.

First Time Home Buyers Credit

First time home buyers don’t need perfect credit, but they do need to demonstrate and ability to manage the credit they have.
For those first time home buyers that absolutely have to have a number to hang their hat on, then 620 is good enough, 640 is better.

Watch this 90 second video on the basics of how your credit score is calculated.

 

In case you missed them:
Credit Course 1
Credit Course 2

Other Related Posts:
5 Steps to Credit Score Suicide
Understanding first time home buyer credit – Part 1
Understanding first time home buyer credit – Part 2

Know what you owe! Help for first time home buyers

Video – Understanding the mortgage process and its costs will be getting easier for first time home buyers.

Last year the government in an attempt to help consumers understand the costs

of obtaining a mortgage, rolled out a multi-page Good Faith Estimate that only served to further confuse first time home buyers.




The new form will be shorter (2 pages) and will break out the estimates for total payment and cash required to close (which the old form didn’t )

Other Related Posts:

 

 

First Time Home Buyers Credit - Credit Course 2

First Time Home Buyers Credit

One of the fallouts of the housing bubble is that lenders are examining the credit of first time home buyers more closely than in the previous five years.

Click here to watch Credit Course 1

Interesting enough, these guidelines aren’t that far removed from the first time home buyer market that existed before the “housing insanity” that overcame most of us.

Your credit score is a reflection of your ability to manage your debts and lenders want to make sure you have a reasonable chance of paying them and paying on time.

Watch this really short video, it explains a lot.

Other related posts:

First Time Home Buyer Programs - "15 Years same as cash"

This is the first in a series of posts about the first time home buyer programs and down payment assistance programs available to first time home buyers in California and specifically Riverside County.
Millions of Americans have bought big screen TVs, appliances, lawnmowers, even cars with “same as cash” terms.

15 Years same as cash

Now qualified first time home buyers in Riverside County can get down payment assistance with “same as cash” terms. In fact the terms can be even better than “same as cash”.

The County of Riverside through its EDA is rolling out an enhanced version of its Neighborhood Stabilization Homeownership Program (NSHP)  “purchase price assistance” program.

Like all down payment assistance programs there are qualifying criteria for not only the future homeowner but the property as well.

Following the 6 Tips to first time home buyer programs, let’s look at NSHP.
Eligible properties are bank owned foreclosed homes or completed new homes that have never been occupied located in portions of 15 cities and 9 unincorporated areas of Riverside County with a sales price maximum of $292,686.

1. First Time Home Buyer – NSHP like all first time home buyer programs requires that you be a first time home buyer or not have owned a home in the last three years. We’ll verify this by requesting your federal tax returns to verify there is no mortgage interest paid.

2. Owner Occupied – All first time home buyer programs require you be purchasing your first home to live in.
There is an affordability period of 15 years for NSHP. What this means is that for the first 15 years you own the home (and occupy) if you sell it, you will be required to repay the down payment assistance.
Because there are no payments or interest charged you only pay back what you initially borrowed (same as cash).
After 15 years the down payment assistance becomes a grant and no longer requires re-payment.

3. Credit Qualify – All first time home buyer programs have an underlying first mortgage (usually FHA) for which you have to qualify based on your income and credit.
To help you with qualifying, NSHP may be combined with the Mortgage Credit Certificate (MCC) program to give you a boost in qualifying.

4. Income Limits – NSHP has income limits of 120% of HUD median income. So a family of three can earn as much as $70,200 and a family of four $78,000.

5. Down Payment Assistance – NSHP provides down payment assistance up to 20% of the purchase price in the form of a “silent second” with no payments or interest (same as cash), to a maximum of $75,000.
Because many of the foreclosed homes need some cosmetic repairs and energy efficient upgrades there is also a “repair component” as part of NSHP, which becomes part of your first time home buyer incentive.

6. Homebuyer Education – All Riverside County homeownership programs require you attend an 8 hour in person home buyer education class. This should be one of your first steps on the path to homeownership. Because of the high demand for first time home buyer programs these classes fill up quickly.
NSHP offers first time home buyers one of their best opportunities of owning their first home. It will require effort and patience on your part, but when you can borrow money “same as cash”, it’s worth the effort, don’t you think?

Other Related Posts:

When is a reverse mortgage a suitable option for you?

This article was contributed by Kristeen Smith 

When is a reverse mortgage option suitable for you?

Reverse mortgage is an option that the senior citizens take help of when they are short of cash and want to retain their house. But there are times when you are not supposed to take out a reverse mortgage. It can ruin a lot of things and can cripple your finances a lot. But if you know for sure that you need to take out a reverse mortgage, you must first have a talk with your lender regarding the same and then go ahead with it.
When you should take out a reverse mortgage?
This is really a nice option that seniors have. You can manage to have monthly income as well as have a house to stay till you decide to move out. Read on to know the options that can help you seek a reverse mortgage:
1. Need for money
Usually reverse mortgage is for seniors who are in dire need of money. Just because the financial scenario is not that good, you may not have a good savings account. You may have few investments nut that may not suffice you in the long run. If this is the situation, you can go for the reverse mortgage option. This will help you borrow against the equity of your house. You can take a certain amount of money as your monthly income and carry on your daily expenses with it.
2. High property value
This is another tip that can help you when you decide to take out a reverse mortgage loan. If you have a very high value of your property, you can take this loan as your salary. But to take out the loan, you must have built good equity on your house. This can help you get larger amount of money and can help you have a good life ahead. Usually on low priced homes, the closing costs are very high as compared to the high-priced homes. You must closely look into the closing costs that you’re paying for the loan.
3. Long term needs and requirements
You must consider reverse mortgage if you need it for a long term. Try to check out your needs and requirements and if you have enough resources to help you sustain for the lifetime. The minimum number of years can be 5 years. So, if you want the reverse mortgage loan for more than that, try to go for it. Financially you’ll be fine and you can also don’t have to move somewhere else. You can even retain your house if you take out this loan.
4. Spouse is on the title
If you have a spouse on the title, you can have the privilege to take out a reverse mortgage loan. Usually your spouse is supposed to be on the title as this loan needs to be paid back if the last resident of the house passes away or leaves the property. So, if your spouse is on the title, she/he can still stay in the house in your absence.
The 4 options discussed above can help you decide whether or not you need to take out a reverse mortgage. If you’re not yet sure, you can consult your lender so that you’re not duped into taking out the loan.

First Time Home Buyers Credit - Credit Course 1

First time home buyers don’t need “perfect” credit to buy their first home but they do need to show that they can manage their credit.

First Time Home Buyers Credit

Your mortgage company will be lending you hundreds of thousands of dollars and they want to be sure you will pay them back and pay them on time.

This is the first in a series of videos on first time home buyer credit scores and things you can do to make sure your loan application gets

For more information on first time home buyer creditOther related posts:

6 Tips to understand first time home buyer programs5 Tips for writing a smart offer on your first home3 Myths about first time home buyer programs

Hot tips for first time home buyers!

First time home buyers have a number of choices when it comes to the programs available to help them down the path of homeownership.

Unfortunately that’s the good news and bad.
Good because the programs are out there
Bad because the differences can be very confusing.

This is the first post in a series, where I’ll break down the programs into bite size pieces.
Warning, you can try and do this with a Realtor and Lender who are unfamiliar with the programs, but the turbulence may be more than you can bear.

For all their differences, the available first time home buyer programs are built on the same foundation. These programs seek to provide assistance, usually in the form of down payment assistance to eligible first time home buyers.

1) First Time Home Buyer – First time home buyer, by definition, would be someone who has never owned a home.
However, most jurisdictions define first time home buyer as someone who has not owned a home in the last three years.
This is almost always verified by reviewing the last three years of your federal tax returns to see if there is a mortgage interest deduction.
So if you or someone you know lost their home through foreclosure at the beginning of this meltdown in 2007 or early 2008, they may be eligible for one of the first time home buyer programs.

2) Owner occupied –  These programs will only provide incentives to first time home buyers who intend to occupy the property as their primary residence.
They want to help you get a home not build your “real estate empire”.
Many of these programs also have a recapture provision which means you have to own and live in the home for a specific period or you will be obligated to repay the money you were lent.

3)  Credit qualify – In order to be eligible for down payment assistance you will still be required to qualify for the underlying first mortgage (usually FHA) for which you will have to qualify based on your income and credit.

4) Income Limits – In order for the various government agencies to receive these funds they have to provide the assistance to “low and moderate” income families.
“Low and moderate” is a relative term and is based on the HUD income limits for your particular area. The income limits for your area can be found on the HUD website.
Low income is generally defined as 80% of the HUD median income and moderate income is usually 120% of HUD median based on family size.
Click here for more information on the HUD income limits

5) Down Payment Assistance –  The most common first time home buyer incentive comes in the form of down payment assistance. That assistance can range from 3% to 20% depending on the program and the other qualifying criteria the issuing agency has set forth. How much you might qualify for will be determined by a lender approved to originate these loans.

6) Home Buyer Education – Almost without exception, to be eligible for first time home buyer down payment assistance you will be required to attend a first time home buyer education class.
This class may be taken online or require class room time, but may be different with each program.

First time home buyer programs and down payment assistance programs are the poster children for “the business golden rule”: “Them with the gold make the rules”.
So if you would like to use one of these programs to help you make that move from renter to first time home owner, you need to know the rules and then follow them.

Other related posts:
3 Myths about first time home buyer programs
Do you need a Realtor to help you buy your first home?
What is the real cost of waiting to buy your first home?

New Homes in Murrieta - Kenton Place

First time home buyers in Murrieta, who might be tired of fighting the multiple offer battles with REOs and short sales are turning more to new homes in Murrieta.

One of your new home options in Murrieta is Kenton Place by KB Home.

Murrieta is one of America’s safest cities and the award winning schools and family friendly atmosphere make it one of the most desirable places to live in Riverside County.

 

The first time home buyer programs available in Murrieta, make owning a home in today’s market even more affordable, with down payment assistance ranging from 3% to up to 20% for qualified first time home buyers.

Kenton Place incorporates a Craftsmen design which is unique in Murrieta, where most of the homes have a very similar “spanish style” appearance.

The home buying public must agree that the homes at Kenton Place are a good value.

Kenton Place is a small community by California builder standards and there are only 15 home sites available out of the original 41.

According to TQ Coleman, one of the on-site sales representatives for KB Home, there are three homes available for quick occupancy:

  • Lot 17 – 2876 square feet, 4 bedroom, 2.5 bath – $313,740
  • Lot 18 – 2654 square feet, 5 bedroom, 3.0 bath – $279,900
  • Lot 19 – 2263 square feet, 4 bedroom, 3.0 bath – $267,990

The homes at Kenton Place are in a price range that makes them and qualified first time home buyers eligible for one of the many first time home buyer programs available in Murrieta and Riverside County.  

Click here for more information on these first time home buyer programs.

For more information on Kenton Place, contact TQ Coleman at (951) 696-5040 or email her tcoleman@kbhome.com.

To contact a local real estate agent who understands first time home buyer programs and how to use them when purchasing a new home, Click here

Other related posts:

New Homes in Murrieta - Fox Hollow at Crown Valley Village

If you’re a first time home buyer who has decided you want to add new homes in Murrieta to your choices, then you probably want to check out FoxHollow at Crown Valley Village.

FoxHollow at Crown Valley Village by KB Home has some unique features you won’t find in many of the other new homes in Murrieta.

All new homebuilders who offer FHA/VA financing also have to include a 10 year limited warranty and FoxHollow at Crown Valley Village is no exception.

Using FHA or VA financing, also gives first time home buyers the ability to take advantage of the first time home buyer programs available. (of course that is subject to KB home acceptance)

The first time home buyer programs available in Murrieta, make owning a home in today’s market even more affordable, with down payment assistance ranging from 3% to up to 20% for qualified first time home buyers.

In what may be a first among the new homes in Murrieta is that FoxHollow at Crown Valley Village offers five floor plans, all single story, which will provide a great deal of privacy for the homeowners there.

First time home buyers in Murrieta and in most of Riverside County for that matter, have become painfully aware of the difference in property tax assessments they’re finding and should always investigate thoroughly because of the impact it will have on their monthly payment.

According to the FoxHollow at Crown Valley Village brochure the homes have an “approximate tax rate of 1.02687% plus $260 a month in special assessments”. This would give you an approximate tax rate of between between 2 – 2.25%, which is not too bad for new construction.

Perhaps the most unique feature of the homes at FoxHollow at Crown Valley Village is the option of “smog eating roof tiles”. In early February, KB Home announced they would be offering  these “pacman” like tiles that are designed to “neutralize the smog-forming nitrogen oxides spewed into the air by automobiles.”

The grand opening for FoxHollow at Crown Valley Village is set for May 14-15. For more information call Robyn Nelson, the KB Home Sales Representative at 951-677-4110.

Other related posts:
Do I need a Realtor to purchase a new home?
Murrieta – One of America’s safest cities
5 Tips for writing a smart offer on your first home
What really helps or hurts your credit score

What First Time Home Buyers need to know when buying HUD homes

First time home buyers in Riverside and San Bernardino Counties will soon have more houses to choose from for their first home.
 

HUD (Department of Housing and Urban Development) has begun releasing their inventory of HUD owned homes and have developed a system for selling them that is unlike any other in today’s market.

 

Under the HUD system, bids from first time home buyers using FHA loans will receive priority consideration

Things you need to know about HUD properties:

A property becomes a HUD Home when the previous owner had an FHA insured loan and the home was either foreclosed upon or given back to HUD through a deed-in-lieu prior to foreclosure.
You and your real estate agent will be dealing directly with HUD. No more of that annoying back and forth negotiating you may have found with the banks on REOs or short sale properties.

  • If you plan to live in the home, you must occupy for at least one year
  • You must use a HUD registered broker and use HUD purchase agreement forms.
  • A pre-qualification letter from a HUD approved lender must accompany your bid (if you’re using FHA financing)
  • HUD will pay up to 3% of your closing costs if you will occupy the property and are using FHA financing
  • You can offer more than the asking price but are required to pay the amount of the overbid in cash.
  • Know the codes
  1. “IN” – Insurable – Property meets minimum property standards with minimal repairs
  2. “IE” – Insurable with escrow – Same as IN but there are some repairs required (less than $5000). Amount of repairs is pre-determined by HUD and the dollar amount is added to your loan. Lender holds the money in “escrow” while repairs are done. For more information on IE guidelines
  3. “UI” – Uninsurable – Need repairs in excess of $5000. May be eligible for FHA 203k rehab financing or are “cash only”. For more information on UI guidelines

How to get started – Contact a real estate agent who is experienced selling HUD homes.  Your agent should have attended one of the number of “Successfully Selling HUD Homes” trainings and ideally taken the HUD homes certification course.

Work with your agent to get you a written pre-approval from a mortgage lender experienced with HUD homes. Not all lenders are created the same, and many lenders don’t have the experience in successfully financing HUD homes.

HUD homes are a great opportunity for first time home buyers, but unless you, your real estate agent and lender are all working together, it could turn into an adventure that costs you time and money in the form of extension fees and worst case,  forfeiture of your earnest money deposit.

Other related posts:

5 Tips for writing a smart offer for your first home

Buying your first home is the most important financial decision you will make for you and your family. The rules in today’s real estate market have changed and your approach to buying your first home in this market has to change with it.

Here are 5 tips to help you write a smart and competitive offer.

Writing an offer for a home you can’t afford is not the best first step on your path to homeownership.

1. Know your payment threshold –  It’s ironic that the entire real estate business revolves around “prices”, whether it’s list price, offered price or sales price.
But not one first time home buyer EVER has been qualified based on price,
Qualification for first time home buyer loans is based on “total monthly payment”.
That includes: interest rate, mortgage insurance, property taxes, homeowners insurance and homeowners association fees.
And here’s an obvious tip that many first time home buyers forget: You’re monthly payment increases along with your sales price, so do the property taxes, mortgage insurance and homeowner’s insurance.

Set a budget and stay with it. You don’t want your first home to make you “house poor”.

2. Know your wallet – You’ve heard the expression “champagne taste with a beer budget”?

I’m no math whiz but one of the things I’ve learned in my 30 years helping first time home buyers is that as they get caught up in the emotion of buying their first home they lose sight of this basic fact: “As the price of your first home goes up, so does the cost to buy it!

It’s not just monthly payment either. The amount of down payment and closing costs also increase and even though you may qualify for the monthly payment, it won’t matter if you don’t have the funds to close.

Of course there are first time home buyer incentives to help you and in many markets you may be able to get closing cost assistance from the seller.

3. Know the market – Many markets across the country are dominated by distressed sales. Most homes sold are either foreclosed homes (REO) or short sales.
This fact has driven home prices down and allowed thousands of first time home buyers the opportunity to become homeowners that they didn’t have four or five years ago.

And we’re not out of the woods yet!

According to Bart Jordan, Chief Appraisal Officer at Eagle One Property Valuations, “first time home buyers should also be aware of the future market trends”
“The number of homes in pre-foreclosure should be considered when making an offer. As part of my job I have to consider “market trends” and their influence on home values” Jordan added. “and so should first time home buyers”.

4. Know the tipping point – First time home buyers should also be aware of their market’s “tipping point”.
Almost every market has a price point where the number of sales reaches its peak and then starts to decline.

What this means to first time home buyers is that below the “tipping point” you’re likely to have more competition for each homes and above it, less competition.

This increased competition means means other first time home buyers are trying to do exactly what you are, so “stealing” a home in this range becomes a long shot at best.

5. Know the seller - Have you ever wondered why first time home buyers aren’t buying homes significantly below market?
When I say “market” I mean today’s market not the market of 5 years ago.
It’s critical to understand that to a bank/seller this is not a real estate transaction, it’s loss mitigation.
They’re trying to cut their losses and as a result have a “net” figure they will accept and if your “lowball” offer doesn’t meet their net, they’ll say NO and move on to the next one.

Remember, just because YOU wrote the offer doesn’t mean it will get accepted.

There are three things that can happen and you have to have a “what if” scenario for each
1. The bank/seller will accept your offer as is.
2. The bank/seller will counter offer and now the ball is back in your court
3. The bank seller will reject your offer and move on to one with a better “net”

Treat buying your first home as the important financial decision it is. Make sure your financial house is in order and to paraphrase Warren Buffett: “buy a home you can afford”.

Other related posts:

Will your family be safe in your first home?

Buying a  first home is a very exciting time for first time home buyer families, and sometimes  they might forget it’s a “wild world” out there.

First time homebuyers in Temecula, Murrieta and other portions of Riverside and San Diego County now have the ability to see if their new neighborhood is safe.

Providing for our family’s safety is paramount to our decision when selecting a city like Temecula or Murrieta or even a neighborhood like Temecula Crowne Hill or Redhawk.

Murrieta and Temecula two of America’s safest cities

You can’t escape crime completely, but you can make an informed decision by checking out CrimeReports.com

Maybe you’ll decide that an electronic security system is a must have.

Or maybe an organic security system.

Organic Security System

 

 

 

 

 

But sometimes the threat comes from seemingly harmless activities, such as smartphone pictures.

Unfortunately the threat is real, Fortunately the fix is easy and FREE!

 

Will there be foreclosed homes in the future for first time home buyers?

Part of being an educated first time home buyer is understanding the local real estate market. That understanding includes not only current market trends but also how future trends will influence your decision to buy.

On this page you can get a glimpse of foreclosure filings and outcomes. This will help you gauge where the market is heading.

Click here for more information on the homes in foreclosure

Foreclosure Filings -Graph of Foreclosure Filings in Riverside County

What does it mean?
Like all data it can be interpreted in a number of ways, but when taken in context with the next chart of Foreclosure Outcomes it appears that homeowners and banks are searching for alternatives to foreclosure.
Foreclosure Outcomes
What does it mean?
The number of cancellations indicates that more homeowners and banks are working on “foreclosure alternatives” (either a loan modification or short sale).
The back to bank number indicates the “foreclosure freeze” is over and the banks are catching up. The only number to increase (month over month) is “Sold to 3rd party” and that would point to investors continuing to snap up properties at foreclosure auctions to “flip” or keep as a rental.

A crystal ball for first time home buyers in Riverside County

First time home buyers in Riverside County have a tremendous amount of information and data available to help them make the right buying decision for them and their family.

Our market trends report lets you know what’s going on today.

The foreclosure filings and outcomes report gives you insight into what the future holds for homes about to hit the market.

But what if you’re still investigating the housing market and your decision is 2 months or even 6 months down the road?

First time home buyers can think of this page as their “crystal ball”.  Now you can see (based on foreclosure filings) how many bedrooms the homes in your future may have. You will also be able to see how many square feet, the approximate market value and the year built.

First thing we have to do is admit that most of the homes that will be available are the result of a current homeowner in distress, so this glimpse into the future is based on foreclosure filings.

These homes will hit the market as either bank owned (REO), short sale, or an investor “flip”.

What will your first home look like?

Prices are low, Mortgages are cheap, But you can't get one!

That was the headline on CNNMoney on Monday and I couldn’t help but wonder what the heck they were talking about, so of course I was compelled to read further:

“Yep, mortgage interest rates are low, but there’s a catch: It doesn’t matter how cheap rates are if you can’t get a loan.”
“And these days, only highly qualified borrowers can get financing — let alone the best rates.”

“Good borrowers with one or two blemishes on their credit are being denied credit,” said Lawrence Yun, chief economist for the National Association of Realtors.”

No wonder first time home buyers are confused.


Now all of this may be true if you’re trying to buy a penthouse in New York or Chicago or a vacation home in the Keys, but if you’re a first time home buyer in California, it’s just not true.
The part about “prices are low” and “mortgages cheap” is true but the rest?
Not close!
Sure lenders have raised qualifying criteria for first time home buyer loans. We thought it might be a good idea to make sure people had the ability and willingness to repay the money we were lending them.
But thousands of qualified California first time home buyers are getting loans each month. They all don’t have perfect credit and they all don’t have enough money to make a large down payment.

Click here to learn more about the California First Time Home Buyer Loan Program

Contrary to the observations of the NAR’s chief economist, families with credit scores as low as 620 are becoming homeowners. (Stick to real estate, Lawrence!).
Are they getting the “best rates”?
Probably not, but they are getting rates lower than people with excellent credit paid just a year ago, so obviously “best rate” is a very subjective term.

If you are a first time home buyer, wondering if now is the best time to buy your first home there are a number of things you should be doing, but listening to the national media is not one of them!

Local real estate agents and lenders who specialize in first time home buyer programs are your best source of information on local market conditions.

Other related posts:


Is it really a good time to buy your first home?

If you’re a first time home buyer there is so much conflicting news it’s impossible to know if now really is the time to buy your first home.

Unfortunately, most of the information your seeing and hearing has a “can’t see the forest for the trees” approach. Most of the data good and bad focuses on month over month or year over year declines or increases in sales numbers and property values.

Real estate has always been (or should have been) viewed as a long term investment. These last few years of insanity aside, the ups and downs of the real estate market have been relatively predictable.

They say a picture is worth a thousand words, if that’s the case this video is worth tens of thousands. It’s a one hundred year look at real estate values from a perspective that most of us can relate to.

To ask your burning question of a first time home buyer specialist

To find a real estate agent that specializes in first time home buyers

Other related posts:

3 Myths about First Time Home Buyer Programs and Incentives
3 Signs that say BUY to first time home buyers
First Time Home Buyers market for 5 years?

First Time Home Buyer program for California state employees


California First Time Home Buyer Program

First time home buyers who happen to be California State or municipal employees have a first time home buyer program they may not know about.
For years first time home buyers who were California state employees used the CalPers Home Loan program to buy their first home.
Recently, CalPers got out of the home loan business (which may not be a bad thing as far as your pensions are concerned), and left many of these employees wondering if they would be able to get on the path to homeownership.
The CalPers Home Loan program, though not limited to first time home buyers, was a benefit that allowed many state and municipal employees to make that jump from renter to homeowner.
Among other things the CalPers program featured:
1) A below market interest rate
2) Low down payment requirements
3) Limits on lender origination and admin. fees
4) Down payment assistance in the form of a second mortgage secured by your retirement account.

If you’re one of those state or municipal employees looking for help in buying your first home, there’s another State of California program to help you.

In the interest of full disclosure, this program is not affiliated with CalPers in any way and is not limited to state or municipal employees, but it is sponsored by the State of California Housing Finance Agency (CALHFA) through it’s participating lenders for first time home buyers.

What are the features of this first time home buyer program?
1) A below market interest rate
2) Low down payment requirements
3) Limits on lender origination and admin. fees
4) Down payment assistance in the form of a “silent second” mortgage.

This program is not limited to state, municipal or other government employees. In fact all first time home buyers may be eligible, but not all lenders and Realtors are specialists in this program.

Other Related Posts:
3 Myths about First Time Home Buyer Programs and Incentives
3 Signs that say BUY to first time home buyers
First Time Home Buyers market for 5 years?

Overnight Housing explosion for first time home buyers

In one of the most dramatic turnarounds in American history, the housing market, overnight, is exploding. First time home buyers are lining up everywhere to capture their piece of the American Dream.

I thought I made too much money to qualify for down payment assistance!

Jamie (name withheld) was convinced that owning a home was a better decision for her family than renting., but the costs of buying her first home made it feel beyond her reach. Even though she had a great job, it was hard to save enough money to make her dream a reality.

FirstTimeHomeBuyersNetwork.com, an association of Mortgage and Real Estate professionals who specialize in helping first time home buyers find the right first time home buyer programs and incentives, were there to help Jamie and her family.

“When she was first referred to me by Jim and Teresa DeBruyn of Distinctive Realtors, I realized that Jamie and her family were facing the same challenges as most first time home buyers.” said Greg Cook, of FirstTimeHomeBuyersNetwork.com.

“First time home buyer programs are only for low income families, and I have a good job but I can’t save enough money to cover all  of the costs”  said Jamie.
“I knew that Jamie might qualify for one or more of the first time home buyer programs, because even though the income limits are targeted for “low and moderate income” families, those numbers are more generous than most people realize.”,  added Cook.

All first time home buyer programs have income limits and these income limits are based on the “HUD median income limit” for your area (generally by County).
For example in Riverside County, CA  if the program guidelines are 80% of HUD median a family of 4 can make up to $52,000 a year and be eligible. If the program is at 120% of HUD median then the same family of 4 can make up to $78,000 a year.

  • First Time Home Buyers in San Diego County, CA a family of 2 can make up to $99,120 a year and a family of 3 can make up to  $115,640.
  • First Time Home Buyers in Orange County, CA a family of 2 can make up to $111,600 and fa family of 3 can make up to $130,200

“There’s a big misconception that these first time home buyer programs are too restrictive for most families.”, noted Cook. “If they meet the income limits, haven’t owned a home in the last three years, are qualified for FHA financing, and attend a first time home buyer education class, they may be eligible for one or more of the programs.”

To contact a first time home buyer specialist

Other related posts:

San Diego first time home buyers are following the smart money

Good news for landlords and first time home buyers

First time home buyer blunders to avoid (Video)

Temecula Things to do- Temecula Rod Run

One of the best things about living in Southwest Riverside County in general and Temecula is the semi-annual Rod Run in Old Town Temecula.
Twice a year, the streets of old town Temecula are lined with pre-1974 classics and hot rods.
This year’s spring edition was held March 11-12 and more than 700 cars were on display.
This video is from the Friday Night Cruise, as many of the cars and trucks on display cruised Old Town Front Street with their headers open.

First time home buyers use down payment assistance to save thousands on move in costs

Members of FirstTimeHomeBuyersNetwork.com, an association of Mortgage and Real Estate professionals who specialize in helping first time home buyers find the right first time home buyer programs and incentives, recently made the difference for a Hemet first time home buyer.

Linda (name withheld by request), had decided now was the right time for her to make that move from renter to homeowner. Her husband had recently lost a  lengthy battle with cancer, and she was anxious to move out of the rental they had shared and buy a home that was “hers”.
“When Linda first contacted me about buying her first home, she was concerned that the cost of acquiring her first home would deplete most of her savings” said Greg Cook, a first time home buyer specialist at FirstTimeHomeBuyersNetwork.com.

Because most of the houses she had viewed online were bank owned or foreclosed properties, “she worried that she wouldn’t have enough to purchase a home and to make all the repairs necessary”, said Cook.
“After determining that Linda qualified as a first time home buyer (she hadn’t owned a home in the last three years), I tried to match her wants and needs with one of the many programs available to first time home buyers in California and Riverside County”, Cook added.
The match was a program recently released by the State of California and administered through their approved lenders.
The CALHFA/FHA program provides FHA loans for qualified first time home buyers at below market interest rates and has an optional down payment assistance component, that allows for up to 3% to be used toward downpayment.
“Even though Linda had the money for down payment, Greg’s recommendation that she use the down payment assistance was perfect. Her new home was a Fannie Mae property that had some deferred maintenance, and she’ll be able to use her savings to make those repairs.”, remarked Jim and Teresa Debruyn of Distinctive Realtors, Hemet real estate agents who specialize in first time home buyer programs.
The end result is that Linda now owns a home instead of renting one. She still has money in savings to do  those repairs, and remarkably her total mortgage payment is $350 LESS than she was paying for rent.
For additional information on the first time home buyer programs and incentives available in California and Riverside County, Contact Us

3 Signs that say BUY to first time home buyers!

First time home buyers looking for that flashing neon sign that tells them now is definitely the time to buy their first home, might as well be cruising the Strip in Las Vegas.
There are signs flashing everywhere that say “BUY!” or “are you nuts? DON’T BUY!”.

So how can first time home buyers know for sure which direction guarantees the right decision?

As with any investment, there are no guarantees when it comes to investing in your first home, but you can make a smart decision if you can read the signs.

Recently the Wall Street Journal published an article about the “5 signs that say buy”. While the WSJ gives their perspective from 30,000 feet, I thought a “closer to the earth” view would be of more help to first time home buyers.

Here are 3 signs for first time home buyers that say “BUY”

1. Jobs – Jobs are important, and nationwide statistics say that more people are finding employment, but what’s more important to first time home buyers is THEIR J-O-B.
If you feel your job is secure and you’ll be able to make the mortgage payment on your first home, then the combination of affordable homes and low interest rates are clearly a sign to “BUY”.

2. What’s going on in the rental market? – First time home buyers have choices: they can continue to rent (paying their landlord’s mortgage) or start paying their own.
As the demand for more rental units increases (largely from displaced homeowners) we’re experiencing an upward pressure on rents.
A recent article in CNNMoney warned:
“Renters beware! Double digit rent hikes may be coming soon”
Renters in San Diego, according to CNNMoney, may soon be facing rent increases of 31% over the next few years.

“Hmmm? Rents are going up and mortgage payments going down, what kind of sign can that be?”
When the cost of renting exceeds the cost of owning, that’s clearly a sign to BUY!.

Other related posts:

3. Mortgage availability – The WSJ talks about the availability of mortgages like it’s a commodity that’s flying off the shelves and may not be available soon.
Fact is, there are TRILLIONS of dollars available to qualified first time home buyers.
More important to first time home buyers is the availability of first time home buyer programs and first time home buyer incentives.

Some of these programs do have limited funding and are often available on a “first come, first served” basis.
But, when available, they provide the assistance to help thousands of first time home buyers become first time home owners.
As long as these funds are available for qualified first time home buyers, that’s clearly a sign to BUY!

3 Myths about first time home buyer programs and incentives

First Time Home Buyer Tips

3 Myths about first time home buyer programs and first time home buyer incentives

#1“I previously owned a home so I’m not eligible for first time home buyer incentives”
Even though “first time home buyer” implies no previous home ownership, the criteria for most first time home buyer programs and incentives is that you haven’t owned a home in the last three years.

A lender is going to review your last three years of tax returns to verify you didn’t claim  mortgage interest or property tax deductions.

So, If you were one of the early casualties of the “housing meltdown” in 2007 and 2008 you may be eligible for one or more of the first time home buyer programs.

Note: Even if it’s been less than three years, there are incentives and down payment assistance programs available for those who don’t currently own a home or primary residence.

#2“I have to be “low income” to qualify for first time home buyer programs”
The stated purpose of first time home buyer programs and incentives is to provide “homeownership assistance to low and moderate income families”.
But “low to moderate” is a relative term.
Most first time home buyer programs have income limits and these income limits are based on the “HUD median income limit” for your area (generally by County).
The program may be limited to 50%, 80% or 120% of HUD median, but the size of your family also factors in.
For example: in Riverside County, CA  if the program guidelines are 80% of HUD median a family of 4 can make up to $52,000 a year and be eligible. If the program is at 120% of HUD median then the same family of 4 can make up to $78,000 a year.

A family of 4 looking to use the State of California first time home buyer and down payment assistance programs to buy their first home can earn up to $93,240 in Riverside County.
In San Diego County this number increases to $115,640 (for a family of 4 or more) and $130,200 in Orange County.

#3“I’ve saved for my down payment, I don’t need down payment assistance”
It’s true you don’t NEED it, but it may be a smart financial move to use it if you qualify.

Owning your first home, is more than just making a monthly payment. There are moving expenses and if you’re going to be one of the thousands of first time home buyers who will be purchasing a bank owned or foreclosed property, there undoubtedly will be some deferred maintenance, which will need your attention.

If you exhaust your savings just to buy your first home then those upgrades and repairs will have to wait.

On the other hand, if you qualify and take advantage of the first time home buyer incentives and down payment assistance, you’ll still have that money in the bank.

The down payment assistance can also give you an advantage if you happen to get into a competitive bidding situation for your first home.
Many first time home buyers have saved enough for their down payment, but as part of their offer are asking the seller to pay all or a portion of their closing costs.
If you have down payment assistance, you can use your savings to pay closing costs and then be submitting a much more competitive offer.

For more information on how to use first time home buyer incentives

First time home buyer programs and incentives will vary depending on where your searching for your first home, so it’s important that both your Realtor and Lender are specialists.

Other related posts:

Will your first home need a good "cleansing"?

First time home buyers searching for the best deals in their local real estate market are often choosing from one of the many foreclosed homes on the market.

While these foreclosed homes may be the best deals for first time home buyers, they may come with something unanticipated; “negative energy”.

By it’s very nature a foreclosed home has had a family displaced from it and there was a lot of anguish in making that choice, and some first time home buyers are looking to cleanse their new home for a fresh start.

Here’s a first time home buyer tip, you might not be expecting:

To rid your first home of the “negative energy” you might want to consider hiring the services of a witch, and you might as well go to the top of the “witch” food chain in Salem, Massachusetts.

 

Other related posts:


Housing double dip? O-V-E-R- R-A-T-E-D

First Time Home Buyers

First time home buyers are undoubtedly a little concerned that we may be experiencing a double dip in housing prices.
According to one “expert”: “you may get a big discount by waiting a year [to buy],” said Dean Baker, co-director of the Center for Economic and Policy Research.
You know what, he’s right IF YOU’RE PAYING CASH!
But for those of you who need to get a first time home buyer loan, Baker obviously didn’t do enough “research”
The automobile dealers figured this out a long time ago. They know their product is going to go down in value the minute you drive it off the lot, yet they still manage to sell cars every year.
One reason they’re able to do that is because they have made renting a car cheaper than buying one. The monthly payments on a leased car are significantly less than they would be if you bought that same car, so more and more people lease cars than buy.

And what do they have to show for it at the end of the lease? Zero, Zip, Nada, just a bunch of payments made and “their” car is back on the dealer’s lot.
Would you buy a car rather than lease if the payments were lower?


Why wouldn’t you?
In many real estate markets across the country, it’s actually cheaper to buy a home than rent one. So with all the first time home buyer programs and first time home buyer incentives now may be a great time to quit paying your landlord’s mortgage.

We know cars are going to decrease in value but whether or not houses will is only SPECULATION!
That being said, let’s look at some real numbers and you can decide how much “discount” you get from waiting.
In a couple of earlier posts, I examined this issue:

So, lets assume the “expert” is right and home prices do decline by an additional 10% this year. You would be able to buy that $200,000 home for $180,000 and you would save approximately $40,947 over the course of the 30 year loan.

  • But that also means you’ve rented for another year, which (at $1500/mo) means you’ve spent $18,000 with nothing to show for it other than a big smile on the face of your landlord. So, now your net gain is $22,947.
  • FHA has already announced that they will be increasing their MIP premium by .25% on April 18th. So, waiting will cost you an additional $10,068 in increased borrowing costs. Net gain: $12,879 (starting to see a trend?)
  • In the last five months interest rates have risen .75%, if that trend continues over the next year, you would pay an additional $30,395 in interest, so now your Net Gain has become a Net Loss to the tune of $17,516.

I haven’t factored in the tax benefits first time home buyers receive from the mortgage interest and property taxes they will be paying. They’re too subjective, so let’s just consider it that “year end” bonus we all like to get.
Like the so called experts, these numbers are hypothetical and not likely to get as much press as those from the “think tanks”, but they’re as realistic a possibility as the “double dip”, and worth your consideration.
After all it’s only money: YOURS!

Other related posts:


First Time Home Buyers market for 5 years?

First Time Home Buyer Tips

If you’ve been thinking that owning your first home is better than renting but aren’t quite ready to make that leap because you have credit to repair or you are still saving for a down payment, then this news is good for you.

First time home buyer loans are tougher to get and despite the picture painted by the national media, millions of first time home buyers are qualifying for those first time home buyer loans at near historic lows in interest rates.

If you’re still trying to “fix up” your financial house before you make that leap to first time home buyer, then that is the most important first step, but according to this expert you will have time to do that rehab.

Other related posts:




Stop wasting time with on-line mortgage calculators!

If you’re a first time home buyer, we know that typically you get 90% of your information from the internet before you begin the search for your first home. We also know that first time home buyers do much of their information gathering about home loans on the internet as well.
This “insider” information has led to most real estae and mortgage websites offering a “how much home do you qualify for” widget. You get to enter some basic like your desired sales price, down payment, interest rate etc. The widget then calculates a monthly payment and estimates(based on the amount of income you entered) a sales price for which you qualify.
it all sounds pretty simple, but the real value for your first home search?
None!… Zero!… Zip!… Nada!
There is some entertainment value however.
It’s very similar to those photography kiosks you find in some malls, or in the casinos on the Strip in Las Vegas.
You know the ones where you get to put your face on the world’s most perfect body? It’s fun to imagine, but not likely to happen in the real world.
Those “what do I qualify for” widgets are the same thing : FANTASY! and they only create unrealistic expectations for first time home buyers.

Today’s lending world is full of strange new terms, like “overlays” and “LLPAs”. What these terms mean to you is that:
What you buy!
Where you buy!
How you buy! – all have an impact on your first time home buyer loan and most importantly the monthly payment.
Did you know? That if your first home has a Homeowner’s Association Fee of $200, it impacts your monthly “nut” the same as an increase of $40,000 in your mortgage amount.
So, if you enjoy the “fantasy” of these widgets, have fun with them!
But, If you’re interested in finding out what you truly qualify for, contact a lender who specializes in first time home buyer programs and the incentives available for first time home buyers.

Other Related Posts:

If Warren Buffett gave you financial advice would you listen?

Warren Buffett's House

First time home buyers who are struggling with the decision to buy their first home, might want to listen to Warren Buffett. Warren Buffett is the third richest man in the WORLD! and he believes: The housing market will rebound this year as housing continues to show signs of improvement.

More from Warren:

Billionaire Warren Buffett said buying a home was the third-best investment he ever made, after the rings he bought for his first wife, Susan Thompson, and, after her death, his second wife, Astrid Menks.

“For the $31,500 I paid for our house, my family and I gained 52 years of terrific memories with more to come,”
Buffett, the world’s third-richest man, still lives in the house he bought in Omaha, Nebraska, more than five decades ago. He said home ownership makes sense for most people, especially after a slide in prices and record-low interest rates.
The U.S. home ownership rate has fallen to the lowest level in a decade amid record foreclosures and a plunge in property values after a five-year boom. The S&P/Case-Shiller Index of prices in 20 cities is down 31 percent from its July 2006 peak.
“A housing recovery will probably begin within a year or so,” Buffett, 80, wrote in the letter. “In any event, it is certain to occur at some point.”
“A house can be a nightmare if the buyer’s eyes are bigger than his wallet and if a lender — often protected by a government guarantee — facilitates his fantasy,” Buffett wrote. “Our country’s social goal should not be to put families into the house of their dreams, but rather to put them into a house they can afford.”

Other related posts:

 



Is now the time to buy your first home in San Jacinto?

First Time Home Buyer Tip

If you’re a renter in San Jacinto, CA  who is thinking now is a great time to be a first time home buyer but market conditions have you wondering whether buying your first home is a smart financial decision.
Here are some tangible numbers to consider.
If you’re renting, whether it be an apartment or a home, you’re making a mortgage payment  it’s just not yours, it’s your landlord’s, so this may be an opportune time to make that move from renter to homeowner.
Making that move is a lifestyle change and an important commitment, so if you’ve decided that life circumstances make buying your first home a good move for you and your family, then your next step is to analyze the investment side of your decision.

In a previous post I talked about the Rent Ratio tool I picked up from the New York Times.

This tool is to help you compare the investment side of your decision by comparing the cost of renting with the cost of owning, like the price-to-earnings ratio that stock investors use.
To help first time home buyers in San Jacinto, I’ve taken the average rental rate for a 3 bedroom home in San Jacinto (from RentRange.com) and compared it with the average sale price of the same size home (figures from Trulia.com) and come up with the Rent Ratio for San Jacinto.

Average Rent: $1200 (1480 sq. ft – 3 bedroom)
Average Sale Price: $112,400
San Jacinto Rent Ratio: 7.81

In concrete terms, a rent ratio above 20 means that the monthly costs of ownership will exceed the cost of renting. Anything less the pendulum starts to swing toward home ownership. Anything less than 10-14 is clearly a buying sign.

  • So what does it all mean to you?

Based on Rent Ratio comparison, San Jacinto’s Rent Ratio (7.81) is:  (1) clearly on the buying side and (2) one of the lowest in Riverside County.
But what about that ultimate barometer? That very technical term that we mortgage professionals refer to as the “monthly nut” or mortgage payment
Your “nut” in San Jacinto would be $857.59
(Payment is an estimate based on an FHA loan at 5%/5.12 APR for 30 years with minimum 3.5% down payment, including mortgage insurance, homeowners insurance and estimated property taxes at 1.65%)
So not only is the Rent Ratio on the buying side, you can own that same home with a payment almost $350 less than the average rent!

Other related posts:

Are loan mods really working?

Congress announced yesterday that the HAMP (Home Affordable Modification Program) is among those on the “chopping block”, so they obviously think it’s not working.

But is it the program or the banks failure to make a good faith effort that has caused the failure? Way above my pay grade!

In this CNBC video a Wells/ Fargo describes how their loan modifications work…or don’t work.

What is not discussed in this video are the terms of a typical loan modification. For example:

  • most loan mods are only temporary.
  • Most loan mods do nothing with the negative equity.
  • Most loan mods will temporarily reduce the borrowers payment by 50%.

What happens the the 50% they are not paying?

Its added to their unpaid loan balance, so in five years the distressed homeowner is in exactly the same position as today only it’s five years later.

 

First time home buyers move to the front of the line

First time home buyers go to the front of the line

If you’re a first time home buyer in one of the many real estate markets that are dominated by foreclosures and bank-owned properties, you’re undoubtedly frustrated with the “second class citizen” treatment you’ve been receiving when it comes to the offers you’ve been submitting.

You did all the right things: you did your homework and found the right neighborhood for you and your family, you hired a good real estate agent who specialized in that neighborhood and helped you write a competitive offer, you had a solid pre-approval letter from a lender who specialized in first time home buyer loan programs.
The result?
Your offers were passed over or ignored by the banks and their agents as they accepted other offers (often times for a lower price) from investors paying cash or conventional financing with larger down payments. You might also have lost out to offers that were made for significantly more than the listed price.
This frustration has led many of your peers, to “drop out” and put their dream of homeownership on hold. Dropping out when there is this convergence of of affordable prices and the lowest interest rates in a generation.
Well, there is light at the end of the tunnel!
The Department of Housing and Urban Development (HUD) is releasing their foreclosures, known as “HUD homes” and first time home buyers are given preferential treatment in the HUD bidding process.

“Now is a great time to buy a HUD home, interest rates are low and there are many affordable properties available.” according to Shari Potts, Broker/Owner of Inland Realty Services and a HUD local listing broker. “There are many great properties under $100,000”, she added.

First time home buyer benefits on HUD homes:

  • For the first 30 days of a HUD home listing only owner occupied offers will be considered
  • HUD provides the appraisal on all HUD homes
  • Buyers bidding more than the list price, will have to pay the difference in CASH
  • HUD will pay up to 3% of buyer’s closing costs if they’re using FHA financing

So not only will first time home buyers get “to the front of the line”, indications are they will have plenty of homes to choose from. In it’s recently released December report the government announced it has 360,000 homes in it’s inventory.You can only view HUD homes accompanied by a licensed real estate agent, and offers will not be considered without a lender pre-approval letter.

other related posts:


First time home buyers it's your money on the table!

Many first time home buyers are in a holding pattern, waiting for that “perfect” time to buy their first home. They’re hoping for that combination of the lowest price and the lowest interest rate before jumping in.
If that’s you, I have some advice.
1) Hope is not a strategy!
2) Take a close look at your current strategy, it’s probably costing you money.
I did a post a couple of months ago about the real cost of waiting.

The recent run-up in interest rates has increased the monthly cost of that hypothetical $200,000 home $90/ month or $5400 over a five year period.
FHA loans are the “loan of choice” for most first time home buyers. The low down payment requirements and easier qualifying guidelines make the most attractive option among loan programs.
FHA has announced that on April 18th they will be increasing their monthly mortgage insurance premium by .25%. If you wait until after that date to start the hunt for your first home, the tab will increase by another $41.67/mo or $2500 over five years, on that $200,000 home.
In that same period of time, home values in many markets have decreased by about 3%, so you would have gained about $32/mo or $1920 over 5 years.
So net-net sticking with this “wait n see” strategy will cost you almost $100/mo
If you’re still paying rent in most markets it’s cheaper to own than rent, so you’re overpaying for one form of housing when there is a cheaper alternative.

Unlike some of my peers, I don’t claim to have a crystal ball to predict which way interest rates and home values will go over the next few months, but I can tell you this with absolute certainty:
Home values and interest rates will do one of three things (and not necessarily in the same direction).
They may go up, they may go down, or they may stay the same. and in only one chance in three will you get better than what you can get today (one in six if you are playing both sides of the fence)
Bottom line, “IT’S YOUR MONEY ON THE TABLE, HOW MUCH OF A GAMBLER ARE YOU?”

Other related posts:

Is renting the "New American Dream"?

First time home buyers is renting the new “American Dream?”

First time home buyers

If you’re a first time home buyer you have to be wondering if buying your first home in this market is the right decision for you and your family. There is so much speculation it can be very difficult to know what is a smart decision.

If you’re thinking about buying your first home, strictly for the investment value and that it will double in value in just a couple of years, then you ABSOLUTELY should think twice.

If you’re hesitating about buying your first home because it might drop in value over the next year or so, chances are you’re right.

BUT! 

If you’re tired of paying your landlord’s mortgage for him and would like something to call your own, then let’s take a look at the data from both sides and then you can choose which is right for you and your family.

According to this CNBC video, more American’s are opting for renting than home ownership.

Sometimes you have to look past the “hype” and examine the information from a different perspective.

Unless you’re still living at home, you’re making someone’s mortgage payment (your landlords) and according to CNBC the increased demand for rental units is putting upward pressure on rents, so you can expect those costs to rise.

Let’s take a look at the cost Buying v Renting in some selected Inland Empire cities.

In the next post we’ll compare the incentives available for renters and the first time home buyer incentives.

Is buying your first home a smart move?

First time home buyers-the right move?

First time home buyers who are weighing the pros and cons of buying their first home in an uncertain real estate market are undoubtedly considering “self-medicating” as they try to digest all the information, often conflicting, about whether or not this is the right time to buy.

The #1 thing to do is decide you really want to be a homeowner. One of my sons is always getting a dog and after awhile  all the love required and upkeep become too much for a very hectic lifestyle and he has to find his new “best friend” a good home (which fortunately he has been able to do).
The reality is he “loves the IDEA of owning a dog” but isn’t equipped for the lifestyle changes.

The same is true for homeownership.
The IDEA of owning your first home can be quite compelling. It’s yours and if you want a “man cave” or a room dedicated to the “glam rock” bands of the 80s you can do that.
It’s easy to picture birthday parties and family gatherings in YOUR backyard, but are you ready for the responsibilities that come with being a first time home owner?
So before you buy your first home make sure you and your lifestyle are prepared for the demands that come with homeownership, and then you can start the prep work that will get you on the road to homeownership.
5 things you can do today to become a homeowner in 2011.
According to the US Census: America’s home ownership rate, after holding steady for a while, took a pretty big plunge in Q4, from 66.9 percent to 66.5 percent. That’s down from the 2004 peak of 69.2 percent and the lowest level since 1998.
Does that mean that owning your first home in this market is not a good idea?
I think it means 1) more people are losing their homes than buying them 2) First time home buyers are being more cautious in their decision making.
Is buying your first home now a no brainer?
The “glass half full” take on this is that 2 of every three American’s own a home.
In a couple of my previous posts, we discussed the investment side of the rent vs buy equation and depending on your community, the scales are titling toward homeownership in a big way.

What really helps or hurts your credit score?

First time home buyer credit scores

First time home buyers in today’s uncertain real estate market, to get the most favorable interest rates and terms have to prove to lenders that they are competent credit managers.

One benchmark that lenders use to measure first time home buyers ability to manage credit is their first time home buyer credit score.

Your credit score is your lender’s way of measuring your willingness and ability to repay and manage your other credit debt.

If you’re using one of those free on-line credit reports, you’re not looking at the same information as your lender and the surprise you get may not be a good one.

A string of late payments on a credit card or car loan, is not going to make your lender feel all “warm and fuzzy” about lending your hundreds of thousands of dollars.

Check out this video from CBSMoneyWatch.com, which provides some expert advice on what helps or hurts your credit score:

other related posts:

Should you Buy your first home or continue to rent?

First time home buyers Rent or Buy?

First time home buyers trying to decide if now is the right time to buy, got some input from Trulia.com to help them with their decision.

Trulia.com released it’s latest Rent vs. Buy index and in 36 of the 50 markets it surveyed it’s cheaper own than rent.In a previous post I mentioned HotPads.com annual report that came to the same conclusion.
First time home buyers still think renting is cheaper?
Let’s take a look at some selected cities in our “neck of the woods” and see how they stack up using Trulia’s Rent v Buy Index
To determine whether it makes more sound financial sense to rent or buy, economists generally use a rule of thumb: They divide the purchase price of a home by the annual rent of a similar property.
Anything over a 15, and you should rent because it will cost you less over a period of time.
Below 15? Start looking for homes.

Temecula’s Rent Ratio is 11.41 (Start looking for homes!)
San Diego’s average Rent Ratio is 15.17 (still a rent sign)
AND

These first time home buyer incentives will save you even more
Find a San Diego first time home buyer specialist

The Canyon Lake Rent Ratio is 11.56 (Start looking for homes!)

AND

This buy-rent ratio is a rough gauge with many other factors entering into the buying decisions of individual home seekers, including their income, property taxes and whether home values are likely to rise. Still, it is a good starting point for those in the market for a new home. (Trulia.com)

other related posts:

 



First Time Home Buyers still think Renting is cheaper than buying?

First time home buyers is renting cheaper?

First time home buyers across the country are finding that owning their first home may, indeed, be a cheaper alternative to renting.
Owning your first home has to be the right fit for your lifestyle now but also your lifestyle in five or ten years. You will change, your families needs will change and it’s very possible the opportunities you have today to become a first time home owner will change.
Even if home values are still depressed in five years, it’s a certainty that interest rates won’t be at these levels. We’ve already seen them increase more than one-half percent.
What that means to you is you will pay more over time for a home that cost less than today.

Here’s an excerpt from the HotPads.com annual rental housing report:
Washington, DC. – January 6, 2011 – Rental prices across the US increased 11.6% in 2010, growing from a national average of $1181 in January 2010 to $1319 by December. The steady increase in rental prices was inversely matched by falling prices of homes for sale, which saw a 9.8% drop over the same period. (Hotpads.com)
The continued weakness in the housing market indicates more of the same for the forseeable future. A tough economy is causing more families unable to keep their homes, which will continue to depress housing prices while increasing rental prices (they have to live somewhere).

If you’re a first time home buyer in San Diego or the Inland Empire the Rent Ratios are clearly on the buying side and as rents increase will be even more so.

First Time Home Buyer incentives at risk

2011 is definitely the year of first time home buyer incentives, but even those may be lost. One of the largest source of funds for first time home buyer incentives come from state and local redevelopment agency funds.
California has a knack for leading the nation in many things, both good and bad, and it appears we’re out front on this too.
Jerry Brown, our newly elected governor, is keeping a campaign promise to cut spending and one of the programs on the chopping block is RDA funds.
Without these funds, the state, counties and cities will be unable to offer the first time home buyer incentives and first time home buyer programs available today.

other related posts:

Are you buying your first home in Fantasyland?

Help for First Time Homebuyers

First time home buyers have always had two choices when it comes to their housing wants and needs.

If it matches their lifestyle, they can continue to rent, pay their landlord’s mortgage and not be encumbered with the responsibilities of homeownership.
On the other hand, if having something that belongs to them and their family and allows them to pay less to Uncle Sam each year is more appealing, then making the move to first time home owner is the right choice for their family.

Regardless of your choice, most often it boils down to the check that gets written each    month (or in today’s tech savvy environment the electronic transfer).
To help you make the right choice, many real estate websites have a Rent v Buy “widget” , which IMHO are the biggest waste of computer programming on the internet.
By definition, you’re a first time home buyer and even in a “normal” market don’t have the information to accurately complete the “Buy” side of the calculation.

By asking you to enter your own data, they’re allowing you to create your own “fantasyland” .

Earlier this week I received a call from a first time home buyer who wanted more information on the incentives for first time home buyers in Riverside County.
I started asking the usual questions and he mentioned that he had been “pre-qualified” at $200,000.
When I asked which lender had done that?
His reply was “I did it myself”.
He had used one of those “find out how much home you qualify for” widgets on another real estate website.
“What interest rate did you use?”, I asked
“4% because I have excellent credit”, was his reply
This was getting interesting so I asked some more questions:
“How much did you enter for property taxes and homeowner’s insurance?
“It didn’t ask for those.”
“What about mortgage insurance”
“Do I need that?”
Buying your first home is one of the most important financial decisions you will make and you CAN’T do it yourself.

To quote Sean Connery in The Untouchables, that’s like “bringing a knife to a gun fight”

Getting the loan to pay for your first home is more complicated now than ever and you CAN’T do that on the internet either.
Regardless of how good those Rent v Buy or “how much home you can afford” widgets make you feel, first time home buyers need “professional help” to make the best decision for their family.

Is now the time to buy your first home in Hemet?

Hemet first time home buyers

If you’re a renter in Hemet CA  who is thinking now is a great time to be a first time home buyer but market conditions have you wondering whether buying your first home is a smart financial decision.
If you’ve decided that your life circumstances make buying your first time home a good move for you and your family, then your next step is to analyze the investment side of your decision.

In a previous post I talked about the Rent Ratio tool I picked up from the New York Times.
Read the complete article
This tool is to help you compare the investment side of your decision by comparing the cost of renting with the cost of owning, like the price-to-earnings ratio that stock investors use.
To help first time home buyers in Hemet, I’ve taken the average rental rate for a 3 bedroom home in Hemet (from RentRange.com) and compared it with the average sale price of the same size home (figures from Trulia.com) and come up with the Rent Ratio for Hemet

Average Rent: $1200 (1640 sq. ft – 3 bedroom)
Average Sale Price: $131,200
Hemet Rent Ratio: 9.11

Compare to Canyon Lake Rent Ratio

In concrete terms, a rent ratio above 20 means that the monthly costs of ownership will exceed the cost of renting. Anything less the pendulum starts to swing toward home ownership. Anything less than 10-14 is clearly a buying sign.
So what does it all mean?

Based on Rent Ratio comparison, Hemet’s Rent Ratio (9.11) is clearly on the buying side.

But what about that ultimate barometer? That very technical term that we mortgage professionals refer to as the “monthly nut” or mortgage payment
Your “nut” in Hemet would be $1001.35
(Payment is an estimate based on an FHA loan at 5%/5.12 APR for 30 years with minimum 3.5% down payment, including mortgage insurance, homeowners insurance and estimated property taxes at 1.65%)

other related posts:

Is now the time to buy your first home in Corona CA?

Corona first time home buyers

If you’re a renter in Corona CA  who is thinking now is a great time to be a first time home buyer or if you’re a renter in Orange County who may wondering the same thing and market conditions have you wondering whether buying your first home is a smart financial decision.
And you’ve decided that your life circumstances make buying your first home a good move, then your next step is to analyze the investment side of your decision.
For first time home buyers, Corona has long been an affordable alternative to the home prices in Orange County.
But the question still remains will your investment in a longer commute be worth the rewards of homeownership in Corona?

In a previous post I talked about the Rent Ratio tool I picked up from the New York Times.
This tool is to help you compare the investment side of your decision by comparing the cost of renting with the cost of owning, like the price-to-earnings ratio that stock investors use.
To help first time home buyers in Corona, I’ve taken the average rental rate for a 3 bedroom home in Corona (from RentRange.com) and compared it with the average sale price of the same size home (figures from Trulia.com) and come up with the Rent Ratio for Corona.

Average Rent: $1625 (1470 sq. ft – 3 bedroom)
Average Sale Price: $213,150
Corona Rent Ratio: 10.93
Now let’s compare the Corona Rent Ratio with that of Yorba Linda, Corona’s closest neighbor to the west.
Average Rent: $2400 (1720 sq. ft – 3 bedroom)
Average Sale Price: $522,800
Yorba Linda Rent Ratio: 18.15

In concrete terms, a rent ratio above 20 means that the monthly costs of ownership will exceed the cost of renting. Anything less the pendulum starts to swing toward home ownership. Anything less than 10-14 is clearly a buying sign.

So what does it all mean?
Based on Rent Ratio comparison, while Yorba Linda’s Rent Ratio (18.15) is still on the buying side, Corona’s Rent Ratio (10.93) is clearly on the buying side.
But what about that ultimate barometer?

That very technical term that we mortgage professionals refer to as the “monthly nut” or mortgage payment
Your “nut” in Corona would be $1626
Your “nut” in Yorba Linda would be $3961
(Payment is an estimate based on an FHA loan at 5% for 30 years with minimum 3.5% down payment, including mortgage insurance, homeowners insurance and estimated property taxes at 1.65%)

Rent Ratio is only one tool available to first time home buyers, but it does provide an “apples to apples” comparison of not only the rent v buy question, but it also can be used in comparing local Real Estate Markets.

other related posts:

2011 First Time Home Buyer incentives in San Diego

2011 First Time Home Buyer incentives in San Diego

San Diego First Time Home Buyer Incentives

Even first time home buyers in San Diego County have choices when it comes to the incentives available to purchase their first home.
The housing market collapse has created some unique opportunities for first time home buyers in San Diego. With a median home price of around $320,000 (according Trulia.com), in many cities it’s possible to have a house payment that is competitive with rents.

We have the most affordable home prices in more than a decade and interest rates are at their lowest levels in a generation.
To stimulate the San Diego County housing market there are a number of first time home buyer incentives available in the form of down payment assistance and special tax credits for first time home buyers.
This post is a summary of those programs along with links to other articles that spell things out in more detail.
Each first time home buyer program is a little different but they have a few things in common.
1) You must be a first time home buyer or not owned a home in the last three years
2) You must be credit qualified by an approved first time home loan lender
3) You must attend an approved first time home buyer education class
4) You must meet the income limits (maximum based on family size) and sales price limits (maximum)
5) You must be ready to be a homeowner!

The County of San Diego offers low-interest deferred payment loans of up to $35,000 or 33% of the purchase price whichever is less for low-income first-time homebuyers.
The loan funds may be used to pay downpayment and closing costs on the purchase of a new or re-sale home.
Properties eligible for assistance include single-family homes, condominiums, townhomes and manufactured homes on a permanent foundation.

  • The maximum sale price is $451,250
  • Total gross maximum income cannot exceed 80% of the HUD AMI for San Diego
  • The home you purchase must be in an unincorporated area of San Diego County or in the city of Coronado, Del Mar, Imperial Beach, Lemon Grove, Poway or Solana Beach.

If you need more choices, when it comes to location or you make more than 80% of the HUD median income, then the most flexible program for first time home buyers in San Diego is the first time home buyer program offered by the State of California Housing Finance Agency (CALHFA).
To qualified first time home buyers this program provides down payment assistance of 3% AND a below market interest rate (currently 4.25%).
This program is available for most homes including bank owned, REOs, short sales and new homes in San Diego up to a sales price of $627,750.

In addition to down payment assistance, first time home buyers in San Diego may be eligible for a special first time home buyer tax credit.

other related posts:

Is now the time to buy your first home in San Diego?

San Diego first time home buyers

First time home buyers in San Diego Ca have to two choices when it comes to their housing needs, they can continue to rent and pay their landlord’s mortgage or they can take that giant step onto the path to home ownership.
That  “giant step” should not be taken without careful research. You should investigate the neighborhoods, the schools, the city amenities, traffic bottlenecks etc.
But once you’ve decided that owning your first home in San Diego , fits your lifestyle, it’s time to analyze the investment side of your decision.Check out San Diego Real Estate Trends
In a previous post I talked about the Rent Ratio tool I picked up from the New York Times.
Read the complete article
This tool is to help you compare the investment side of your decision by comparing the cost of renting with the cost of owning, like the price-to-earnings ratio that stock investors use.

To help first time home buyers in San Diego, I’ve taken the average rental rate for a 3 bedroom home in three zip codes, 92028, 92064 and 92127 (from RentRange.com) and compared it with the average sale price of the same size home in those zip codes (figures from Trulia.com) and come up with the Rent Ratio for them.

Zip Code 92028
Average Rent: $1870 (2060 square feet)
Average Sale Price: $350,200
Rent Ratio: 15.61

Zip Code 92064
Average Rent: $1990 (1590 square feet)
Average Sale Price: $410,220
Rent Ratio: 17.18

Zip Code 92127
Average Rent: $2450 (2210 square feet)
Average Sale Price: $375,700
Rent Ratio: 12.78

In concrete terms, a rent ratio above 20 means that the monthly costs of ownership will exceed the cost of renting. Anything less the pendulum starts to swing toward home ownership. Anything less than 10-14 is clearly a buying sign.

If you use Rent Ratio as a barometer for your decision, you can see that in these San Diego zip codes, the rent v buy decision is almost a coin flip.

Now compare these numbers with the Rent Ratios in:

The Rent Ratio in these cities indicates they make a better buying decision for first time home buyers when compared to San Diego.

other related posts:

2011 First Time Home Buyer Incentives in Canyon Lake CA

2011 First Time Home Buyer Incentives in Canyon Lake CA

First time home buyer incentives for Canyon Lake

2011 promises to be an exciting year for first time home buyers in Canyon Lake.
We have the most affordable home prices in more than a decade and interest rates are at their lowest levels in a generation.
To stimulate the Canyon Lake housing market there are a number of first time home buyer incentives available in the form of down payment assistance and special tax credits for first time home buyers.
This post is a summary of those programs along with links to other articles that spell things out in more detail.
Most families qualify for more than one program and you need the help of a first time home buyer specialist to find which program(s) are right for you and your family.

Each first time home buyer program is a little different but they have a few things in common.
1) You must be a first time home buyer or not owned a home in the last three years
2) You must be credit qualified by an approved first time home loan lender
3) You must attend an approved first time home buyer education class
4) You must meet the income limits (maximum based on family size) and sales price limits (maximum)
5) You must be ready to be a homeowner!

1. The most flexible program for first time home buyers in Canyon Lake is the first time home buyer program offered by the State of California Housing Finance Agency (CALHFA).
To qualified first time home buyers this program provides down payment assistance of 3% AND a below market interest rate (currently 4.25%).
If you use this loan program with a qualified Riverside County down payment assistance program your interest rate could be as low as 4%.
This program is available for most homes including bank owned, REOs, short sales and new homes in Canyon Lake up to a sales price of $450,000.

2. Riverside County First Time Home Buyer (FTHB) down payment assistance program – This program offered by the County of Riverside, will lend qualified first time home buyers in Canyon Lake up to 20% of the purchase price for down payment assistance.
This assistance is in the form of a “silent second” which requires no payments as long as it is your primary residence.
Property must be located within the City limits of Canyon Lake and have a maximum sales price of $292,686.

3. Riverside County Neighborhood Stabilization Housing Program (NSHP) down payment assistance program – This program offered by the County of Riverside, will lend qualified first time home buyers in Canyon Lake up to 20% of the purchase price for down payment assistance on foreclosed homes only.
The assistance is in the form of a “silent second” and requires no payments as long as it is your primary residence.
Property must be a foreclosed home within the City limits of Canyon Lake and have a maximum sales price of $292,686

4. Riverside County Redevelopment Housing Program (RHP) down payment assistance – This Riverside County program will lend qualified first time home buyers in Canyon Lake up to 20% of the purchase price for down payment assistance on homes located in unincorporated areas around Canyon Lake.
The assistance is in the form of a “silent second” and requires no payments as long as it is your primary residence.
Maximum sales price is $292,686.

IMPORTANT NOTE: Riverside County down payment assistance funds are limited and available on a first reserved basis.

All of the above down payment assistance programs may be used in conjunction with the special Riverside County Tax Credit for first time home buyers.

other related posts:

Is now the time to buy your first home in Canyon Lake CA

Canyon Lake first time home buyers

First time home buyers in Canyon Lake Ca have two choices when it comes to their housing needs, they can continue to rent and pay their landlord’s mortgage or they can take that giant step onto the path to homeownership.
That  “giant step” should not be taken without careful research. You should investigate the neighborhoods, the schools, the city amenities, traffic bottlenecks etc.
But once you’ve decided that owning your first home in Canyon Lake , fits your lifestyle, it’s time to analyze the investment side of your decision.Check out Canyon Lake Real Estate Trends
In a previous post I talked about the Rent Ratio tool I picked up from the New York Times.
Read the complete article
This tool is to help you compare the investment side of your decision by comparing the cost of renting with the cost of owning, like the price-to-earnings ratio that stock investors use.

To help first time home buyers in Canyon Lake, I’ve taken the average rental rate for a 3 bedroom home in Canyon Lake (from RentRange.com) and compared it with the average sale price of the same size home in Canyon Lake (figures from Trulia.com) and come up with the Rent Ratio for Canyon Lake.

Average rent: $1840 (1800 square feet)
Average Sale Price: $229,320
Canyon Lake Rent Ratio: 11.56
In concrete terms, a rent ratio above 20 means that the monthly costs of ownership will exceed the cost of renting. Anything less the pendulum starts to swing toward home ownership. Anything less than 10-14 is clearly a buying sign.
For most first time home buyers, it’s still about that payment or as we mortgage professionals like to call it: “your monthly nut”. Your “nut” in this case would be about $1695 a month including taxes and insurance.
(Payment is an estimate based on an FHA loan at 5%/5.2% APR for 30 years with minimum 3.5% down payment, including mortgage insurance, homeowners insurance and estimated property taxes at 1.65%, does not include Canyon Lake monthly property owners association fee)

To find a Canyon Lake First Time Home Buyer Specialist

other related posts:

2011 First time home buyer incentives in Murrieta CA

2011 First Time Home Buyer Incentives in Murrieta CA


First time home buyer incentives in Murrieta

2011 promises to be an exciting year for first time home buyers in Murrieta CA.

We have the most affordable home prices in more than a decade, interest rates are at their lowest levels in a generation.

To stimulate the Murrieta housing market there are a number of first time home buyer incentives available in the form of down payment assistance and special tax credits for first time home buyers.

This post is a summary of those programs along with links to other articles that spell things out in more detail.
The first time home buyer programs available in Murrieta are (for now) identical to those in Temecula CA
Most families qualify for more than one program and you need the help of a first time home buyer specialist to find which program(s) are right for you and your family.
Each first time home buyer program is a little different but they have a few things in common.
1) You must be a first time home buyer or not owned a home in the last three years
2) You must be credit qualified by an approved first time home loan lender
3) You must attend an approved first time home buyer education class
4) You must meet the income limits (maximum based on family size) and sales price limits (maximum)
5) You must be ready to be a homeowner!
1. The most flexible program is the first time home buyer program offered by the State of California Housing Finance Agency (CALHFA).
To qualified first time home buyers this program provides down payment assistance of 3% AND a below market interest rate (currently 4.25%).
If you use this loan program with a qualified Riverside County down payment assistance program your interest rate could be as low as 4%.
This program is available for most homes including bank owned, REOs, short sales and new homes.
2. Riverside County First Time Home Buyer down payment assistance program - This program offered by the County of Riverside, will lend qualified first time home buyers up to 20% of the purchase price for down payment assistance.
This assistance is in the form of a “silent second” which requires no payments as long as it is your primary residence.
Property must be located within the City limits of Temecula and have a maximum sales price of $292,686. This is a qualified program and can be used with the CALHFA program.
3. Riverside County Neighborhood Stabilization Housing Program (NSHP) down payment assistance program – This program offered by the County of Riverside, will lend qualified first time home buyers up to 20% of the purchase price for down payment assistance on foreclosed homes only.
The assistance is in the form of a “silent second” and requires no payments as long as it is your primary residence. Property must be a foreclosed home within the City limits of Temecula and have a maximum sales price of $292,685.
4. Riverside County Redevelopment Housing Program (RHP) down payment assistance – This Riverside County program will lend qualified first time home buyers up to 20% of the purchase price for down payment assistance on homes located in unincorporated areas around Murrieta.
The assistance is in the form of a “silent second” and requires no payments as long as it is your primary residence. Maximum sales price is $292,686.
IMPORTANT NOTE: Riverside County down payment assistance funds are limited and available on a first reserved basis.
All of the above down payment assistance programs may be used in conjunction with the special Riverside County Tax Credit for first time home buyers.

2011 first time home buyer incentives in Temecula CA

2011 First Time Home Buyer Incentives in Temecula CA

Incentives for first time home buyers in Temecula

2011 promises to be an exciting year for first time home buyers in Temecula CA.

We have the most affordable home prices in more than a decade and interest rates are at their lowest levels in a generation.

To stimulate the Temecula housing market there are a number of first time home buyer incentives available in the form of down payment assistance and special tax credits for first time home buyers.
This post is a summary of those programs along with links to other articles that spell things out in more detail.
Most families qualify for more than one program and you need the help of a first time home buyer specialist to find which program(s) are right for you and your family.
To contact a first time home buyer specialist
Each first time home buyer program is a little different but they have a few things in common.
1) You must be a first time home buyer or not owned a home in the last three years
2) You must be credit qualified by an approved first time home loan lender
3) You must attend an approved first time home buyer education class
4) You must meet the income limits (maximum based on family size) and sales price limits (maximum)

5) You must be ready to be a homeowner!

1. The most flexible program is the first time home buyer program offered by the State of California Housing Finance Agency (CALHFA).

To qualified first time home buyers this program provides down payment assistance of 3% AND a below market interest rate (currently 4.25%).

If you use this loan program with a qualified Riverside County down payment assistance program your interest rate could be as low as 4%.
This program is available for most homes including bank owned, REOs, short sales and new homes.

2. Riverside County First Time Home Buyer down payment assistance program - This program offered by the County of Riverside, will lend qualified first time home buyers up to 20% of the purchase price for down payment assistance.

This assistance is in the form of a “silent second” which requires no payments as long as it is your primary residence.

Property must be located within the City limits of Temecula and have a maximum sales price of $292,686.

3. Riverside County Neighborhood Stabilization Housing Program (NSHP) down payment assistance program – This program offered by the County of Riverside, will lend qualified first time home buyers up to 20% of the purchase price for down payment assistance on foreclosed homes only.

The assistance is in the form of a “silent second” and requires no payments as long as it is your primary residence.

Property must be a foreclosed home within the City limits of Temecula and have a maximum sales price of $292,686.

4. Riverside County Redevelopment Housing Program (RHP) down payment assistance - This Riverside County program will lend qualified first time home buyers up to 20% of the purchase price for down payment assistance on homes located in unincorporated areas around Temecula.

The assistance is in the form of a “silent second” and requires no payments as long as it is your primary residence.

Maximum sales price is $292,686.

IMPORTANT NOTE: Riverside County down payment assistance funds are limited and available on a first reserved basis.

Don’t forget to check back in, I have it on good authority that the City of Temecula will be rolling out there own down payment assistance program shortly. I don’t have any details yet, but what I’ve heard sounds very promising for first time home buyers in Temecula.
All of the above down payment assistance programs may be used in conjunction with the special Riverside County Tax Credit for first time home buyers.

other related posts:

30% down payment for first time home buyer loans?

This kind of headline probably sends chills down the spine of first time home buyers looking to take advantage of today’s affordable housing prices, very low interest rates and the incentives for first time home buyers.

If you are a first time home buyer and this kind of headline, makes you even more nervous about your decision, you can relax (at least for now).

In what might be a homage to the National Enquirer, CNBC lead with a similar headline to this video.

The short version of this, lenders are looking for a loss mitigation strategy on certain loans and (at least for now) has little to no impact on first time home buyer loans.

To ask your burning question of a first time home buyer specialist

other related posts:

What is the real cost of waiting for first time home buyers?
Why good credit is important for first time home buyers
First time home buyer loans with no credit scores
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home

Is now the time to buy your first home in Menifee CA?

Menifee First Time Home Buyers

First time home buyers in Menifee Ca have two choices when it comes to their housing needs, they can continue to rent and pay their landlord’s mortgage or they can take that giant step onto the path to homeownership.
That  “giant step” should not be taken without careful research. You should investigate the neighborhoods, the schools, the city amenities, traffic bottlenecks etc.
Once you’ve decided that owning your first home in Menifee, fits your lifestyle, it’s time to analyze the investment side of your decision.Check out the latest Menifee Real Estate Trends
In a previous post I talked about the Rent Ratio tool I picked up from the New York Times.
Read the complete article
This tool is to help you compare the investment side of your decision by comparing the cost of renting with the cost of owning, like the price-to-earnings ratio that stock investors use.

To help first time home buyers in Menifee CA, I’ve taken the average rental rate for a 3 bedroom home in Menifee (from RentRange.com) and compared it with the average sale price of the same size home in Menifee (figures from Trulia.com) and come up with the Rent Ratio for Menifee.
To read more about Menifee Market Trends

Average rent: $1575 (1840 square feet)
Average Sale Price: $218,900
Menifee Rent Ratio: 11.56
In concrete terms, a rent ratio above 20 means that the monthly costs of ownership will exceed the cost of renting. Anything less the pendulum starts to swing toward home ownership. Anything less than 10-14 is clearly a buying sign.
For most first time home buyers, it’s still about that payment or as we mortgage professionals like to call it: “your monthly nut”. Your “nut” in this case would be about $1670 a month including taxes and insurance.
(Payment is an estimate based on an FHA loan at 5%/5.2% APR for 30 years with minimum 3.5% down payment, including mortgage insurance, homeowners insurance and estimated property taxes at 1.65%)
Compare to Temecula Rent Ratio
Compare to Murrieta Rent Ratio

To find a Menifee First Time Home Buyer Specialist
other related posts:
What is the real cost of waiting for first time home buyers?
Why good credit is important for first time home buyers
First time home buyer loans with no credit scores
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home

Is now the time to buy your first home in Murrieta, CA?

Murrieta First Time Home Buyers

If you’re a renter in Murrieta who is thinking now is a great time to be a first time home buyer and market conditions have you wondering whether buying your first home is a smart financial decision and you’ve decided that your life circumstances make buying your first home a good move, then your next step is to analyze the investment side of your decision.Check out the latest Murrieta Real Estate Trends
In a previous post I talked about the Rent Ratio tool I picked up from the New York Times.
Read the complete article
This tool is to help you compare the investment side of your decision by comparing the cost of renting with the cost of owning, like the price-to-earnings ratio that stock investors use.
To help first time home buyers in Murrieta, I’ve taken the average rental rate for a 3 bedroom home in Murrieta (from RentRange.com) and compared it with the average sale price of the same size home (figures from Trulia.com) and come up with the Rent Ratio for Murrieta.
To read more about the Murrieta Real Estate Market
Average rent: $1585 ( 3 bdrm – 1650 sq ft home)
Average sale price: $188,100
Murrieta Rent Ratio: 9.88
In concrete terms, a rent ratio above 20 means that the monthly costs of ownership will exceed the cost of renting. Anything less the pendulum starts to swing toward home ownership. Anything less than 10-14 is clearly a buying sign.


Other related posts:

Is it the right time to buy your first home in Temecula CA?

Temecula First Time Home Buyers

If you’re a renter in Temecula and considering making that jump to home buyer and then to home owner, there are a myriad of theories on whether or not now is a good time to buy.
If you’ve mentally bought into the homeowner concept, then a good next step is analyzing the Rent v. Buy equation.
In a previous post I talked about the Rent Ratio tool I picked up from the New York Times.
Read the complete article

This tool helps you evaluate the investment side of your decision by comparing the cost of renting with the cost of owning, like the price-to-earnings ratio that stock investors use.
To help first time home buyers in Temecula, I’ve taken the average rental rate for a 3 bedroom home in Temecula (from RentRange.com) and compared it with the average sale price of the same size home (figures from Trulia.com) and come up with the Rent Ratio for Temecula.

Average rent: $1675 ( 3 bdrm – 1750 sq ft home)
Average sale price: $229,250
Temecula Rent Ratio: 11.41


In concrete terms, a rent ratio above 20 means that the monthly costs of ownership will exceed the cost of renting. Anything less the pendulum starts to swing toward home ownership. Anything less than 10-14 is clearly a buying sign.

For most first time home buyers, it’s still about that payment or as we mortgage professionals like to call it: “your monthly nut”. Your “nut” in this case would be about $1750 a month including taxes and insurance.
(Payment is an estimate based on an FHA loan at 5% for 30 years with minimum 3.5% down payment, including mortgage insurance, homeowners insurance  and estimated property taxes at 1.65%)

Other related posts:

5 steps to credit score suicide for first time home buyers

First time home buyers 5 easy steps to kill your credit score

First time home buyer credit scores

First time home buyers in today’s market have an incredible opportunity. Affordable prices, sub-5% interest rates, and very attractive down payment assistance programs are all waiting for qualified first time home buyers.
The key word here is “qualified”.
Lenders in this last housing boom literally went STUPID when it came to approving home loans. In complete disregard for prudent lending standards, we offered stated income and asset loans, we had NINJA loans (no income-no-job-or assets). There were even rumors of a Stated FICO loan.
To get a first time home buyer loan in today’s market doesn’t require perfect credit, but credit score requirements are tighter, and it can be “credit score suicide” if you aren’t careful in managing your credit.


Why it’s important for first time home buyers to have a good credit score
FICO focuses on five categories when calculating your score: How much debt you have, your payment history, your debt utilization ratio (how much you owe in relation to your credit limits), how far back your credit history goes and your mix of various types of credit.
Here are five sure steps to “credit score suicide”

1. Making late payments
Payment history accounts for up to 35% of your credit score and a single late payment, if you have a good credit rating, can lower your score up to 110 points immediately following the late payment.
The longer it’s been since you were late on a payment, the less of an impact it will have on your score, but “your history does follow you.
2. Carrying a big balance
Your credit utilization accounts for 30% of your credit score. Credit utilization is the percentage of credit used to available credit.
While consolidating all your credit cards into one low interest rate card makes sense from a monthly payment perspective it can have a devastating effect on your credit score.
Your magic number  here is 50% or less. If you can maintain your credit usage (across all your cards) to 50% of the available credit you won’t see your FICO score in need of life support.
3. Closing a credit line
At first that may seem counter-intuitive, but if you close a credit card it could negatively impact your credit utilization ratio AND if it is an older account, it could also affect the age of your credit history.
If the account has a zero balance and no annual fee, leave it alone until after you’ve moved into your new home.
4. Opening a credit line
In order to open a new account, a credit card company will need to check your credit, and a typical “hard” inquiry like this will lower your score by about five points, plus the cost of opening a new line of credit typically ranges from five to 15 points.
Twenty points may not seem like a lot, but in today’s first time home buyer loan market, it can make the difference between home owner and renter.
5. Defaulting
Defaulting on a credit obligation, whether it be a credit card charge off, a collection account or bankruptcy is the single worst thing for your credit score.
Declaring bankruptcy could lower a good score of 750 by up to about 250 points.
Even bankruptcy doesn’t have to be  “life without parole”. If there were extenuating circumstances you may be just a couple of years from buying your first home.
Buying a home after bankruptcy-Part I
Buying a home after bankruptcy-Part II
But, you have start rebuilding and any slip ups afterward will only further delay making that move from home buyer to home owner.
Ask your burning question of a first time home buyer specialist

Other related posts:
What is the real cost of waiting for first time home buyers?
Why good credit is important for first time home buyers
First time home buyer loans with no credit scores
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

First time home buyer loans require more than just a down payment

First time home buyers need more than a down payment

Saving up for a down payment takes discipline and sacrifice for First Time Homebuyers.

Fortunately qualified first time home buyers may be eligible for down payment assistance and other home ownership incentives.
Read more about first time home buyer down payment assistance.
Some special government programs provide both down payment assistance and a below market interest rate.
Read more about the California program for first time home buyersBut buying a home takes more than just the down payment.
FHA is the “loan of choice for most first time home buyers because of it’s low down payment requirements (3.5%)  and relaxed qualifying quidelines.
It’s the other costs than can trip you up and make closing a stressful situation, rather than a celebration.
In addition to closing costs (title, escrow and lender fees) you will have what are called non-recurring costs to set up your impound (escrow) account to pay for your property taxes, insurance and mortgage insurance as they come due.
Many smart First Time Home buyers are able to negotiate with the seller to pay all or part of these costs.
Appraisal fee. You often have to pay this fee out of pocket as part of the loan approval process. Depending on your location, the fee can run anywhere from $200 to $1,000.
Professional home inspection. Costs range from $300 to $800 for typical homes, but they can go higher depending on the age and type of structure. More specific inspections, such as those for structural engineering, mold and termites (FHA loans may require a termite inspection but the repairs are a cost generally paid by the seller) are additional costs.
Extra closing costs. Although the good faith estimate from your lender should be reasonably accurate, you won’t know the actual amount you have to bring to closing until a day or two beforehand. Don’t play it too close. You don’t want to hold up closing because you’re $100 short. The money you bring to closing almost always has to be in the form of a cashier’s check or wire transfer, so make arrangements a day ahead of time to take care of this.
Homeowner’s association fees. If you’re buying in a subdivision, you may pay an annual or even monthly fee for upkeep of common areas. In these tough economic times many homeowners association have become very creative in the fees they charge.
Repairs, upgrades, renovations. Depending on the condition of the home you buy, remember to budget for the work it will take to make it move-in ready.
Moving van rental fees and boxes.
Termination fees for current services. Carefully check your Internet and cell phone contracts.
Appliances. Whether you’ll have appliances included depends on the deal you strike with the seller. Be aware that brand-new houses usually do not include refrigerators, washers or dryers. If the other kitchen appliances are stainless steel, you’ll need to spend some serious dough to buy a matching fridge or else live with the “eclectic” look.
Utility Deposits- In many parts of the country the local utility departments require a deposit to transfer the services from the seller to you. You should make arrangements for this at least a week prior to your scheduled closing date. Candle light dinners are romantic but not if your dirty and sweaty from moving boxes.
Household items. As a renter, it’s easy to forget that the move to a bigger space means you’ll need more mundane stuff like trash cans, lamps and shower curtains. Are window coverings included? You will need light bulbs and unless it’s a brand new home, batteries for the smoke detectors. Lawn-care equipment. Buying a yard? Your new neighbors will prefer that you mow, rake and edge it.
Warm milk. Just for the first week of whigging out in the middle of the night, wondering if they still have debtors’ prison. (They don’t.)
Buying your first home will be the most important financial decision you will make, so do  thoughtful research and careful preparation.
By the way, always pack the toilet paper on top!

Other related posts:
What is the real cost of waiting for first time home buyers?
Why good credit is important for first time home buyers
First time home buyer loans with no credit scores
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home
First Time Home Buyers – is it the right time to buy

Should you continue to rent or buy your first home?

New tool for first time home buyers

First time home buyers who want to take advantage of this perfect storm of affordable prices, low interest rates and unprecedented home ownership incentives have almost unlimited resources to help them make that RENT or BUY decision.
THE GOOD NEWS: There is a ton of information available to help you make the right decision!
THE BAD NEWS: There is a ton of information available to help you make the wrong decision!
The real problem is sorting the good information from the irrelevant.
Yes, there are a lot of good reasons to buy, but not all will apply to your life circumstances.
First time home buyers what is the real cost of waiting?

Regardless of where you rent, you’re helping pay someone’s mortgage and it isn’t yours.
Buying on the other hand, involves multiple expenses some of which aren’t so obvious. On top of closing costs, there are repairs, property taxes, mortgage principal and mortgage interest.
Of course owning also brings benefits that have nothing to do with money. You can settle into YOUR home, repaint the walls and redo the kitchen just the way you like it.
In short it’s YOURS!
Here’s a little tool I picked up from the New York Times that will help you compare the cost of buying a home to the cost of renting. It was written by David Leonhardt, a card carrying renter.
If you find two similar houses, one for sale and the other for rent and divide the sale price by the annual rent, you can call the result the Rent Ratio.
That concept probably sounds familiar to stock market investors. It’s the real estate market’s version of a price-earnings ratio – a measure of how expensive an asset is, relative to the underlying economic fundamentals. Like the P/E ratio, the rent ratio provides something of a reality check.
For example: A $180,000 home may rent for $1750/mo that would give it a Rent Ratio of 8.57% ($180,000 divided by $1750 x 12= $21,000 = 8.57)

In concrete terms, a rent ratio above 20 means that the monthly costs of ownership will exceed the cost of renting. Anything less the pendulum starts to swing toward home ownership. Anything less than 10-14 is clearly a buying sign.

Many real estate markets across the country are experiencing a declining rent ratio. Which makes for prime opportunities for first time home buyers.

Prices of homes continue to decline while rents for single family homes are remaining constant (increasing in some areas).

Many homes now rent for more than the monthly payment would be if you were to buy it.  If you’re a first time home buyer using one of the many homeownership incentives available, like down payment assistance, the numbers (at least) make it a no brainer
So, in many markets the Rent Ratio is dropping, which makes buying a better investment decision for first time home buyers.
Pretty simple, you can now compare the cost of renting with the cost of owning without all the clutter.
By the way, David is now a card carrying homeowner.

Other related posts:
What is the real cost of waiting for first time home buyers?
Why good credit is important for first time home buyers
First time home buyer loans with no credit scores
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

Santa's secret stash of homes

Santa's secret for first time home buyers

First time home buyers who have decided that living in Riverside County is a great idea for their family, have a “secret stash” of homes from which to choose that are waiting for families to move in.
As of today there are 154 homes (most are still available), that have been or are in the process of being renovated from top to bottom. If you’ve been looking at bank owned properties you can appreciate how wonderful it will be to have a freshly painted home with new flooring and appliances.
But, what really makes these homes special is they WANT you to use one of the Riverside County Down Payment Assistance Programs.

First time home buyers who have tried to use this program know how rare it is to find a home that wants to use the program let alone will accept an offer using it.
Not all Realtors are familiar with this program and all lenders must be certified by the County to participate.
To contact a First Time Home Buyer Specialist
All of these homes, fall under the County’s NSP1 Program.
What is NSP!?
The Neighborhood Stabilization Program 1 Homebuyer (NSP1H) program assists low and moderate income first-time homebuyers to purchase an eligible home in certain target areas of Riverside County.Assistance may be used for purchase price assistance and is provided as a silent second mortgage secured by the buyer’s home which bears 0% interest.A portion of the assistance may also be used to pay for closing costs for the homebuyer.
How Much Assistance is Available?
NSP1H purchase price assistance is available to a maximum of 30% of the purchase price of the home not to exceed $75,000.NSP1H funds can be used as a silent second loan that will be used as gap financing to 1) reduce the amount of first mortgage required in qualifying for the home and 2) can also be used to pay for up to 3% of the sales price to pay for closing costs on behalf of the homebuyer.
For more information on Santa’s “secret stash”

Other related posts:

What is the real cost of waiting for first time home buyers?
Why good credit is important for first time home buyers
First time home buyer loans with no credit scores
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

A new tool for achieving your goal of home ownership

First time home buyers may find their dream of home ownership overwhelming at times.

If you’ve partnered up with a first time home buyer specialist in  San Diego or Southwest Riverside County (CA) you’re already getting help with the home ownership incentives for first time home buyers, like: down payment assistance special first time home buyer tax credits below market interest rates for first time home buyersTo find a first time home buyer specialistBut if you’re a first time home buyer, who isn’t ready to make that commitment but are ready to get your financial house in order so you can buy your first time home then there is a new tool for you to lay the foundation.

What is the real cost of waiting for first time home buyers?
Other related posts:
Why good credit is important for first time home buyers
First time home buyer loans with no credit scores
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home
First Time Home Buyers – is it the right time to buy
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Buying your first home now a no brainer?

Buying your first time home a no brainer?

First time home buyers who are considering that jump to first time home owner, got a little nudge today from CNNMoney. The lead article in the Real Estate section was titled  “Buying a home “now is a no brainer”.
I get that snappy headlines create interest but should buying your first time home be a “no brainer”?
Didn’t we try that in the last “boom cycle” and just how did that turn out?
According to CNNMoney: “With a few exceptions, if you have 20% to put down and good credit, now is a great time to buy.”
Is now a great time to buy?
Perhaps, but it’s certainly not a “no-brainer”. Buying your first home is the most important financial decision you will make and requires research and some self-reflection on whether you are ready for the homeowner lifestyle.
Test drive before you buy?
If your first home is an apartment in New York and you have the 20% down (as the author did), then it was a good decision.
But what about the millions of first time home buyer families who don’t have 20% down or good credit?

The answer is: I’ve got good news and bad news.
Starting with the bad news: First time home buyers have to have better credit than before, but not perfect.
First Time Home Buyer Credit Scores
First Time Home Buyers with no credit scores
Even first time home buyers with a bankruptcy in their credit history may still be qualified to buy their first home.
First time home buyers, buying after a bankruptcy
First time home buyers, buying after a bankruptcy -Part II
Now the good news: First time home buyers don’t need 20% down for it to be a great time to buy.
Say what you will about the success or failure of the various government programs trying to bring us out of this housing downturn, it will be first time home buyers that lead the way out of this “black hole”.
The various governments recognize this, and all the homeownership incentives are directed at first time home buyers.
Down payment assistance for San Diego first time home buyers
Tax credits for San Diego first time home buyers
Even though these links, point to information for San Diego first time home buyers, the redevelopment agencies in almost every state and county have similar programs.
If you’re a first time home buyer in California, the state housing financing agency (CALHFA) has a special program for you. It includes down payment assistance AND a below market interest rate.
Read more about the California first time home buyer program

Even if you’re not buying an apartment in New York, there are plenty of good reasons to take that jump from first time home buyer to first time home owner and as CNNMoney said:
“Buying a fairly priced home at today’s rates may be the best deal you will ever get. And who knows? It may even turn out to be a good investment.”
What is the real cost of waiting for first time home buyers?
Other related posts:
Why good credit is important for first time home buyers
First time home buyer loans with no credit scores
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home
First Time Home Buyers – is it the right time to buy
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What you can do now to become a first time home owner in 2011

First time home buyer in 2011

If you’re a first time home buyer who has decided that 2011 is the year you will make the jump from first time home buyer to first time home owner, then now is the time to get prepared.
Buying your first home is a process, not an event, so you have to have an action plan that will get you through this process with your sanity intact.
Here are 5 things you can do now to help you get ready for owning your first home in 2011:

1) Test drive the lifestyle – Owning costs more than renting and most first time home buyers find they will have to make some lifestyle sacrifices. It might be as simple as cutting out that daily mocha grande frappiccino or  packing a lunch three or four days a week,
Whatever those sacrifices may be, you might want to find out if you can adjust BEFORE you buy instead of after.
Test drive before you buys

2) Keep your financial house in order – Lenders are examining every loan application more closely than ever before. Interest rates have increased over the last couple months and many lenders now have a minimum credit score of 640. Very shortly many of those lenders will also have a maximum debt-to-income ratio of 45%. So whether or not you’ve been pre-approved in the past, you might want to get with your lender to make sure your still in the market.
As lender’s we’re going to look at all aspects of your financial picture to determine your ability to repay us and repay us on time, so make sure your financial house can stand up to lender scrutiny.
Why first time home buyers need to pay attention to their credit
First time home buyers better have clean underwear

3) Check out all the first time home buyer incentives - There are a lot of good reasons to own your first home. First of all it belongs to you and your family, your not making someone else’s mortgage payment, your getting tax write-offs for mortgage interest and property taxes AND state and local governments are throwing money your way in the form of down payment assistance and tax credits.
Below market interest rates for California First Time HomeBuyers
Down payment assistance programs for first time home buyers
Tax credits for first time home buyers

4) Find a Realtor and Lender team who are specialists in first time home buyer programs
The loan programs and special incentives that are available for first time home buyers require an expertise that not all Realtors and Lenders have. You need a team that represents YOU!, not the seller, bank or builder.  First time home buyer loan programs are more paperwork intensive, require more time, and have more exacting guidelines, so your representative has to be looking out for best interest to get you to a successful closing.
Why first time home buyers need their own Realtor

5) Quit procrastinating! – If you’ve made the decision to move from first time home buyer to first time home owner, then get up off the couch, use the DVR to record your favorite programs and get started. Sure home prices will continue to drop, but we’ve already seen interest rates climb and over the long term interest rates will have a greater impact on your cost of homeownership.
What is the real cost of waiting for first time home buyers?

Other related posts:
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First time home buyer loans with no credit scores
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home
First Time Home Buyers – is it the right time to buy

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Down payment assistance for San Diego first time home buyers

Down payment assistance for San Diego first time buyers

For first time home buyers, very often the biggest obstacle between them and becoming a first time homeowner is having the funds for down payment.
The demise of the “zero down payment” loans, has left many first time home buyers who have steady income and maintained a good credit rating, still on the outside looking in.
For first time home buyers in San Diego and other parts of San Diego County where the median sales is price is $320,000 (according to Trulia.com) would need a minimum of $11,200 (3.5%) for just the down payment.
First time home buyers in San Diego who are looking for more home, can actually purchase their first home up to $720,000 with 3.5% down. Unfortunately, on $720,000, 3.5% is $25,200, which for many families is beyond their reach.
If you’re a first time home buyer in San Diego you have three choices:
1) You can continue to pay your landlord’s mortgage by renting
2) You can look to the Temecula Valley for great values and homeownership incentives
For more information on the value of first time homes in Temecula
For more information on the Riverside County tax credit for first time home buyers
OR
If you’re a first time home buyer in San Diego who needs help with down payment assistance for your first home, help is available in the form of a special down payment assistance program from the State of California.
Like all down payment assistance programs there are sales price and income limits, but depending on your wants, needs and financial profile you may be able to combine, not only the down payment assistance but also a below market interest rate on your first time home loan.

But unlike most other down payment assistance program, this program is available for new homes, resale homes, bank owned properties and short sales. So first time home buyers who qualify for this program will have a much bigger selection available to them than might be the case with other down payment assistance programs.
For more information on the California down payment assistance program
To contact a first time home buyer down payment assistance specialist
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First time home buyer loans with no credit scores
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home
First Time Home Buyers – is it the right time to buy
First Time Home Buyers – What is the real cost of waiting
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Temecula and Murrieta two of America's safest cities

Safety for first time home buyers

First time home buyers who are considering buying their first home in San Diego, Oceanside, Escondido, San Marcos or Vista have a lot of very good reasons for choosing these cities.
There’s the proximity to the Pacific Ocean,its world class beaches and the moderate weather it brings.
There are San Diego Padre baseball games and Chargers football games. Great shopping and nightlife are an easy drive for most San Diego County residents.
But what about the really important things like safety of your family?
CQ Press recently released its annual rankings of the safest cities in America and two of the safest cities in America are just an easy drive north of San Diego.
According to CQ Press, Murrieta finished as the 21st safety city in America with populations of more than 75,000 and 6th statewide. Temecula finished 74th nationally and 20th in California.. Corona which is about 30-40 minutes north of Temecula ranked 76th and 21st.
Murrieta and Temecula also finished 1-2 in Riverside County.
The only city in San Diego County to rank this high was San Marcos which finished 69th nationally and 18th in the state.
Other rankings for cities in San Diego County are: Oceanside 147th and 44th, Escondido 162nd and 50th and Vista was 182nd in America and 56th in California..
The crimes tracked by the UCR Program include the violent crimes of murder,
rape, robbery, and aggravated assault and the property crimes of burglary, larceny-theft, motor
vehicle theft, and arson. To be fair larceny-theft account for more than 59% of all the crimes reported, so it’s not like a “killing field” in any of these cities.
Tax credits for San Diego first time home buyers buying in Temecula
Down payment assistance for first time home buyers in Temecula
Not only are there great financial incentives to buy your first home in Temecula or Murrieta, but you can buy your first home in Temecula or Murrieta two of the safest cities in America.
Ask your burning question to a first time home buyer specialist
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First Time Home Buyers – should you buy a new home
First Time Home Buyers – is it the right time to buy
First Time Home Buyers – What is the real cost of waiting
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Condos for first time home buyers

We are fast approaching a very important date for first time home buyers. First time home buyers who have decided that buying a condominium fits their lifestyle and budget, could have a hole shot in those plans very soon.

FHA Condos for first time home buyers

We’re not talking about a condo that overlooks Central Park in New York, or a condo that is on Lakeshore Drive in Chicago but we are talking about that condo that many first time home buyers have decided is the best first step for them and their family.
On December 7, 2010 the FHA project approval will expire on more than 3000 condo projects.
So what does this mean to first time home buyers?

Without an FHA project approval on your condominium of choice, you will have to look to other options for financing.
FHA loans have always been the home loan of choice for most first time home buyers and condominiums have been the choice for their first time home and that will be getting harder on December 7.
As we get closer to that date, you’re undoubtedly going to hear some whining from some members of the real estate community about their job getting harder.
It probably will, BUT the important thing to remember is that FHA project approvals are designed for your protection (and FHA’s).

To qualify as an FHA approved condo project, the homeowner’s association has to provide a number of documents that prove the financial stability of the condo project (reserves and budget) along with verification that the majority of occupants in their project are owners not renters.
Without the FHA project approval, you might be moving into a financially unstable condo project that doesn’t have enough in reserves to pay for everyday maintenance of the common areas and major expenses (like roofs, painting etc). These are items that will need to be taken care of eventually and guess who would be paying more to meet these expenses?

A friend told me about a local project where the HOA dues have gone from $250/mo to more than $500.
Another important part of the project approval is verifying that the number of owners is greater than the number of renters. If it’s more renters you’re just trading one apartment for another. There’s no pride of ownership and you little to no chance of your first home experiencing any significant appreciation.
December 7 is not very far off, so if you’ve been “fence sitting” it’s time to pick the splinters out of your butt and do something.

Even if you’re not ready to buy your first home now, this is important information to file away for when you are.
Ask your burning question of a first time home buyer
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Tax credits for san diego first time home buyers buying in Temecula

Tax credit for San Diego first time home buyers

First Time home buyers in San Diego and other cities within San Diego County have a tremendous opportunity to buy their first home at significantly discounted prices.
You’ve no doubt heard all the good reasons for you to make the move from first time home buyer to first time home owner. Prices on homes, in some areas are 50% lower, than they were just 3-4 years ago. Interest rates are still at historic lows and all the tax benefits of home ownership are still there.
But for many first time home buyers, the dream of homeownership is still beyond their reach because with a median home price of $320,000 and an average cost per square foot of $262, you still don’t get a lot of home for your money.
If you’re still not happy with what your first time home might look like in San Diego, I have a prescription for you. It’s simple and won’t cost you any money.
Wherever you are right now, step outside and face the Pacific Ocean. Now slowly make a 90 degree right turn and your solution will be just an hour north of where you are standing.
Temecula, Murrieta and surrounding communities offer not only tremendous value but a number of first time home buyer home ownership incentives.
For more information on the value of first time homes in Temecula
If you’re still in the market for your first home, you missed the federal $8000 first time home buyer tax credit. Even though the feds aren’t handing out the tax credit any longer there is a similar tax credit available from Riverside County and is available to all qualified first time home buyers on almost any house you may choose to be your first time home.
For more information on the Riverside County tax credit for first time home buyers
So what’s it worth to you?
If your first time home will be at our median sale price of $280,000, and if like most first time home buyers you are considering a low down payment FHA loan, over 5 years your first time home buyer tax credit (based on a 4.75% interest rate loan) would be about $9335.
This credit is in addition to the mortgage interest deduction you would have.
Subscribe to the blog and look for more first time home buyer incentives for San Diego first time home buyers who think an extra hour in their commute is worth the great value you would get by purchasing your first home in the Temecula Valley.
Ask your burning question of a first time home buyer
Other related posts:
Why good credit is important for first time home buyers
First time home buyer loans with no credit scores
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home
First Time Home Buyers – is it the right time to buy
First Time Home Buyers – What is the real cost of waiting
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San Diego first time home buyer loans

San Diego first time home buyers

If you’re a first time home buyer in one of the many communities in San Diego, you’re no doubt surprised by the affordability of homes, but also taken back by how “little bang for your buck” you get when looking to purchase your first home in “America’s finest city”.
According to the most recent figures from Trulia.com, the median sales price in San Diego County was $320,000 which is a long drop from January of 2006 when it was more than $510,000.
But just what does your hard earned $320,000 buy you in San Diego. I know it gets you mild weather, fantastic beaches, shopping and  dining that attract millions of visitors and homeowners.
Well, when it comes to that place called your first home, that place where you spend most of your time, it gets you 1221 square feet (that’s the median sales price divided by the average price per square foot of $262).
Now just north of San Diego is the Temecula Valley.

You may have passed thru on your way to Las Vegas.

You may have even taken a wine tasting tour at one of our almost 40 wineries.
But what you might not know, is that your hard earned $320,000 will go a lot further in Temecula and the cost is one hour travel time (each way).
In Temecula, according to Trulia.com our median sales price is $280,000 with an average cost per square foot of $130, at those prices you would get almost double the size of your first home in San Diego (2153 square feet instead of 1221) for $40,000 less.

If you still wanted a $320,000 home in Temecula you would be getting 2461 square feet at those prices.
But affordability of first time homes in Temecula is only part of the story.
Temecula, Murrieta and many other cities are part of the Riverside County Homeownership programs. These programs offer down payment assistance and special tax credits to first time home buyers who purchase bank owned or short sale properties in Riverside County.
This is the first in a series of posts about the homeownership incentive programs in Riverside County that make buying your first home here not only a great lifestyle decision but also the start of a great long term financial plan for your family.
Ask your burning question to a first time home buyer specialist
Other related posts:
Why good credit is important for first time home buyers
First time home buyer loans with no credit scores
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home
First Time Home Buyers – is it the right time to buy
First Time Home Buyers – What is the real cost of waiting
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First time home buyer tax credit

First time home buyer tax credit

The $8000 first time home buyer tax credit has come and gone and many first time buyers who are just entering the market feel like they missed out.

If you’re a first time home buyer in Riverside or San Diego County, you may not be aware there are still special first time home buyer tax credits for you and like most first time home buyer programs, you may still qualify if you haven’t owned a home in the last three years.Any income tax credit is a good thing because it is a “dollar for dollar” reduction of your income tax liability.

On the other hand a tax deduction, just reduces the amount of your taxable income but only reduces your tax liability by the tax bracket you happen to fall in.
I’m not a CPA or a “tax guy” but give me a tax credit anytime I can get it.
In both Riverside and San Diego County these tax credits come in the form of a “mortgage credit certificate” or MCC.

In Riverside County the MCC for qualified first time home buyers is 15% and in San Diego County it is up to 20%. There are income and sales price limits for new and resale homes, so check the links below for details.
What that means to you is that either 15 or up to 20% of your mortgage interest deduction (you remember that, it’s one of the many reasons to own your own home) is converted into a tax credit AND you are still able to use the remaining 85 or 80% of your interest paid as a tax deduction.
A first time home buyer can use the MCC in one of two ways.
First, you can revise your W-4 withholding to reduce the amount of federal income tax withheld from each check. Many first time home buyers select this option to better acclimate their budget to the costs of homeownership.
This option can be a huge benefit for a first time home buyer who might be stretching a little bit to buy their first home. If you are using the MCC your first time home loan lender will take into account your reduced tax liability. When underwriting the loan, a lender considers this and the borrower is able to qualify for a larger loan than would otherwise be possible.
Another option is to leave your withholding as is and then reap the benefit in the form of a larger refund or reduce the amount you might have to pay when you file your federal income taxes.

For example, if you had a $200,000 loan at 5%, over 5 years you would pay $48,076 in interest. 15% of that interest would  be converted to a tax credit, so over that period you would have a tax credit of $7211.
I can’t tell you which one is best for you, that’s a conversation between you and your CPA or tax guy.
How do you apply for this special first time home buyer tax credit?
Borrowers must apply for a MCC through a participating lender who will perform an initial qualification and assist the borrower in completing the MCC submission forms.
The lender then submits the MCC application to the County., and when approved will issue a MCC commitment to the lender.
For more information on the Riverside County MCC program
For more information on the San Diego County MCC program
To ask a burning question about these first time home buyer tax credits
Other related posts:
Why good credit is important for first time home buyers
First time home buyer loans with no credit scores
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home
First Time Home Buyers – is it the right time to buy
First Time Home Buyers – What is the real cost of waiting
Check us out on Facebook Temecula 365 Things to Do
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Buying a home after short sale or foreclosure

First time home buyer after a short sale

You’re probably wondering how someone with a short sale or foreclosure in their credit history could qualify as a first time home buyer.
We’ll discuss it in detail later in this post, but if you “haven’t owned a home in three years” most first time home buyer programs consider you as a “first time home buyer”.
Is a short sale better than a foreclosure?
When it comes to the damage to your other credit and credit score, absolutely.
The amount of harm a foreclosure will do to your credit is very subjective. Many families are in such a bind, that not only have they been unable to make the payment on their home, but are struggling to make car and credit card payments. The combination of foreclosure and late payments on your other credit lines, will cause your credit score to “sink like the Titanic”. The foreclosure is also reported in the public records section, which causes a further drop and can remain for as long as 7-10 years.
Important note: Just because it’s reported on your credit report, DOES NOT mean you have to wait 7-10 years to become a homeowner again.
Most families considering a short sale have the same struggles with their other credit lines. The difference a short sale makes is that there is no “public record” filing and that will save you some major points on your credit score, which you may need if you will need to apply for other credit.
Is a short sale better than a foreclosure when it comes to getting your next home loan?
Current lender guidelines view a short sale and foreclosure the same. In simple terms: You contractually agreed to repay your mortgage loan and didn’t and lenders are very reluctant to lend money to you again until they are convinced you have made the changes necessary to insure you will repay your mortgage the second time around.
In a previous post I talked about “credit repair” when applying to buy a home after bankruptcy
and “credit rehab” after bankruptcy
The same principles apply to buying a home after short sale or foreclosure. Whichever option you choose you will have some “credit repair and rehab” you will have to endure if you want to get back on the path to homeownership.
You can do it alone, but you don’t have to.
Buying a home after a short sale or foreclosure means a three year “credit rehab” period to qualify for a new FHA loan.
Why an FHA loan? It has the lowest down payment and credit score requirements available PLUS you can combine your new FHA loan with many of the first time home buyer incentives available.
If you were fortunate enough to qualify and successfully complete a short sale and remain current on your payments up to the date of closing, you may be eligible to become a homeowner again as soon as 1 day after the short sale.
For more information: Contact Us

If you live in Riverside County (CA) here are some of the programs available today:
Riverside County Home Ownership Incentives
Ask your burning questions about buying a home after a short sale or foreclosure

Other related posts:
Why good credit is important for first time home buyers
First time home buyer loans with no credit scores
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home
First Time Home Buyers – is it the right time to buy
First Time Home Buyers – What is the real cost of waiting
Check us out on Facebook Temecula 365 Things to Do
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Buying a home after bankruptcy -Part 2

Personal bankruptcies have increased dramatically over the last few years and many families felt they lost any chance of becoming first time homeowners.

If you are one of the millions of families whose only solution to their credit problems was personal bankruptcy, you’ve been given a “do over”.

First time home buyers get a doover

A bankruptcy in your history doesn’t mean your dream of becoming a first time home buyer has ended but it does mean you will have to “repair and rehab” your credit if you want to achieve that dream.

Buying a home after bankruptcy – repair

Fresh start for first time home buyers

Once the disputed items are being reported correctly, you can now begin the “rehab” portion of your path to homeownership.
The discharge of your bankruptcy does indeed give you a fresh start, but it’s a fresh start at a higher level when it comes to your credit. So you need to understand how your first time home loan lender will evaluate your credit after a bankruptcy.

A lender’s mindset is actually quite simple.

When you apply for your first time home loan, we’re going to ask for a lot of documentation, including your bankruptcy papers, so keep them close. We want to be able to make a smart business decision that you have the ability and willingness to not only repay your first time home loan but repay it ON TIME.
If you have a bankruptcy in your past, lenders want to know that you are “credit clean and sober”
So it’s imperative that you maintain a perfect payment history on all your credit after the discharge of your bankruptcy.
“The dog ate my homework” explanation or “my payment got lost in the mail” is probably not going to fly on your first time home loan application. If you have to, sign up to pay on line or through an “auto pay” program
Late payments after a bankruptcy are like “falling off the wagon” in celebrity rehabs. You’re going to have to start over  after each credit ding and “re-enter” rehab.
If you’re currently renting a home or apartment, make sure your rent payments are made on time. Unless you’re making your payments to a property management or apartment management firm, you should also keep copies of your canceled checks to verify an “on time” payment history.
If all your credit cards were canceled in the bankruptcy, apply for a “no fee” secured credit card from a local bank or credit union. Carefully scrutinize the millions of on line offers, they usually have very high fees or interest rates, which you don’t have to pay with a local savings institution.

Your student loans can also be a great way to rehab your credit IF you make the payments on time.

Your goal is to get three credit lines, open for at least one year and all paid on time.
Once you have demonstrated a willingness to repay and an ability to manage your new credit card, it will be easier to get an un-secured credit card or even a department store credit card.
Use them sparingly each month and you will see your credit score and credit history grow rapidly and the path to homeownership becomes a downhill stroll as opposed to an uphill climb.
FHA is the loan choice for most first time home buyers because it has the most forgiving guidelines when it comes to buy a home after bankruptcy, so when you apply for your first time home loan you will be looking at an FHA loan for your first home.
If you have a bankruptcy in your history FHA guidelines require that  credit has been repaired and you have completed two years of “credit rehab”.
The first step is to RELAX and realize this is a long term strategy and it’s success or failure will be based largely on your performance. Hundreds of thousands of families have successfully completed their “rehab” and are now first time homeowners.
Ask your burning question about buying a home after bankruptcy
Other related posts
First time home buyer loans with no credit scores
Why good credit is important for first time home buyers

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Other Related Posts:
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home
First Time Home Buyers – is it the right time to buy
First Time Home Buyers – What is the real cost of waiting
Check us out on Facebook Temecula 365 Things to Do

Buying a home after bankruptcy-Part 1

Buying your first home after bankruptcy

First time home buyers are certainly not immune from the financial meltdown we have experienced over the last few years.
This meltdown has caused millions of families to file for bankruptcy protection to seek the “fresh start” provided by the bankruptcy laws.
If you’re thinking of buying your first home, it’s important to know this doesn’t have to be a “life sentence without the possibility of parole” when it comes to achieving your dream of homeownership.
It’s also important to know that achieving your dream is entirely within your hands, so you have to accept responsibility for making it happen.

Buying your first home after a bankruptcy is not just “repairing” your credit so you can qualify for a first time home buyer loan, it’s also demonstrating to your first time home loan lender that you understand what happened and have “rehabilitated” your management of your credit.
As lenders we understand that “bad things” happen to “good people” but we also want to know that you have accepted responsibility for those “bad things” and are working to prevent them from happening again.
Here’s a “roadmap” to help guide you through the process of buying your first time home after bankruptcy.
1) The first step in the “repair” process is to get copies of your credit report from all three credit bureaus, Experian, Equifax, and Trans Union.  Examine each credit line closely and make sure that all debts that were included in the bankruptcy are being properly reported as having a zero balance and that they were “included in the bankruptcy”.
Wait about 30 days after the discharge before you request your credit reports. This will give your creditors time to report.
You’re entitled to a FREE copy of your credit report each year. Annual Credit Report.com is the only authorized FREE credit report site, the others usually have some sort of sales pitch attached.
2) Any items that are not being reported accurately should be disputed with the bureaus directly.
You will need to write a dispute letter to the bureau and include a copy of your bankruptcy papers including the schedule of debts and discharge. Don’t try to dispute with the creditors, they’ve just had their debts written off, so they’re not going to be in a hurry to help you.
This only costs you the time to analyze your credit report, write the letters and the cost of postage.

In our next post we’ll help you through the “rehab” part of buying your first home after bankruptcy.

First time home buyer loans with no credit scores
Why good credit is important for first time home buyers
For more information on first time home buyer loans after bankruptcy
Ask your burning question
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Other Related Posts:
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home
First Time Home Buyers – is it the right time to buy
First Time Home Buyers – What is the real cost of waiting
Check us out on Facebook Temecula 365 Things to Do

Understanding first time home buyer credit-part 2

First Time Home Buyer Credit Score

Getting a first time home loan can be a daunting task for a first time home buyer. One of the most important factors that your first home loan lender will consider is your credit history.
If you’re a first time home buyer without a credit history, lenders are reviewing your loan application differently than in past years.
Historically first time home buyers have used FHA (Federal Housing Administration) loans to purchase their first home and FHA has used the benchmark that “no credit is good credit”.

FHA recently changed those guidelines and they now require credit scores because when a lender analyzes your credit history they are trying to determine, based on past performance, if you will repay your first time home loan and if you will repay it on time.
First Time Home Buyers Need Good Credit Scores
If you’re a first time home buyer who has no or limited credit, it doesn’t mean the path to homeownership is blocked, it means you’re going to have to do more preparation before you take that journey.
The new FHA guidelines say that you need at least three lines of credit that show a good payment history for at least one year. Those lines of credit can be either traditional or alternative credit sources. Lenders prefer that you have at least two “trade lines” in the traditional category.
That can include, credit cards, auto loans, student loans etc.
Here are some things you can do to build your credit in the traditional category.
1) Get added to a credit card account of a responsible family member. “Authorized user” is not sufficient for a mortgage application, so you need to be a co-borrower on the account. Make sure you’re added to an older account, that has a small balance and that has been paid on time. If not, you may do more harm than good.
2) Apply at your local bank or credit union for a no fee secured credit card. With a secured credit card, you deposit $200-$500 in the institution and they will issue you a credit card with the savings account as collateral. Use the card regularly, but pay the balance each month. Before you buy your first home is not the time to incur additional debt.
3) Once you have established a good payment history on your secured card, then apply for a regular credit card with that same bank or credit union. You can also apply for a department store card (Macy’s, Best Buy, Amazon etc.)
4) If you’re in school and haven’t done so already, apply for a small student loan. The repayment terms are very reasonable.
5) If you’re renting a home or apartment, get the next lease in your name and make the payments on time from your account.
Alternative credit can be your cell phone, car insurance, utilities that are in your name, or any other payment you make monthly that can be verified by the credit bureaus.

Every first time home buyer’s situation is different and if you think you need a professional evaluation of your credit as it relates to first time home buyer loans. Contact Us
Ask your burning question
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Other Related Posts:
First Time Home Buyers-First Time Home Buyer Loans-First Time Home Buyer Credit Scores
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home
First Time Home Buyers – is it the right time to buy
First Time Home Buyers – What is the real cost of waiting

Understanding first time home buyer credit - Part 1

First time home buyer credit scores

First time home buyers are staring at a huge opportunity in today’s real estate market. Home affordability is at an all time high,mortgage interest rates at an all time low and they have a number of choices when it comes to first time home buyer incentives.

First Time Home buyer down payment assistance
First Time Home buyer tax credit in Riverside County
First time home buyers are also facing more challenges than ever before in getting the their first time home buyer loan. But, if you know what those challenges are it’s easier to overcome them and put yourself on the path to homeownership.
To paraphrase one of the California gubernatorial candidates:
“I’m going to treat you like adults”
“Tell it to you straight” and then
“help you with a plan to fix it”.

Buying your first home is rewarding but with it comes responsibility, so It has to be as important to you as it is to us!
If it isn’t right now, wait until it is.
You don’t have to have perfect credit to buy your first home or to qualify for special low interest rates for first time home buyers, or down payment assistance for first time buyers, or even the special first time home buyer tax credit. BUT, you do have to meet certain minimum credit standards.
Your first time home loan lender is going to lend you hundreds of thousands of dollars and I think it’s reasonable that they evaluate your ability and willingness to repay that money as agreed and on time.
Your credit score is a reflection of your history of willingness to repay. If you struggle paying a credit card with a monthly payment of $100, how likely are you to repay your home loan on time if your payment is $300 more per month than you’re paying for rent?
So there are way too many variables in credit scores to explain, but it’s important to know that first time home loan lenders look at different criteria than do department stores or car dealers, so their credit reports and the ensuing scores reflect what they feel are the most import indicators. That is why your mortgage credit report may reflect a different score than the one you saw when you bought a car.
Getting your credit scores above the minimum standards doesn’t have to be a long time consuming process. I have a young couple as clients who were able to raise their credit score almost 30 points by paying down one credit card.
On the other hand, I have another couple as clients, who have a number of collection accounts that are the result of an injury and weren’t covered on time by their insurance carrier. To clear up these items and get them deleted, will require the help of a professional and probably take 3-4 months to clear up.
Every first time home buyer’s situation is different and if you think you need a professional evaluation of your credit as it relates to first time home buyer loans. Contact Us
Ask your burning question
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Other Related Posts:
First Time Home Buyers-First Time Home Buyer Loans-First Time Home Buyer Credit Scores
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home
First Time Home Buyers – is it the right time to buy
First Time Home Buyers – What is the real cost of waiting
Check us out on Facebook Temecula 365 Things to Do

First time home buyers should understand HAMP and HAFA

First time home buyers need to know!

First time home buyers have to be wondering what effect the “foreclosure freeze” and the ensuing “foreclosure mess” will have on their efforts to morph from first time home buyer to first time home owner.
What the foreclosure freeze means to first time home buyers
IMHO, it means that the banks to avoid the intense scrutiny that is on their foreclosure processes, will have start putting good faith efforts into their HAMP loan modification and HAFA short sale programs.
The government has been taking a lot flak for the “failure” of the program when it’s more the result of the lenders failing to put forth a “good faith” effort to adhere to the guidelines they agreed to in order to receive TARP funds.
In order for you to benefit from this yet another shift in the real estate market, you need to know how HAMP and HAFA work and the right questions to ask of not only your Realtor but also the Realtor that is representing the seller.
First time home buyers don’t need a Realtor-They need a good Realtor
Here are a few questions to ask before you decide this is the home for you.
1. Has the homeowner applied for a HAMP loan modification? This is the critical first step. If they haven’t applied, chances are when the short sale is submitted to their bank, the bank will counter with a loan modification offer (usually 2-3 months after your short sale offer has been submitted) and you’re back to looking at houses again.
2. If they have applied for their HAMP loan modification, who is their lender? Once you know who their lender is you can check out the lender’s success rate for loan modifications.
Check out the latest loan modification statistics for Making Home Affordable
Most lenders success rate for permanent modifications is less than 20%, so now you can decide if you want to hang around and wait for this home or move on to another.
3. If the homeowner has been denied for a loan modification, is it a HAMP modification?
According to the Making Home Affordable guidelines a denial for a HAMP loan modification carries with it an APPROVED HAFA short sale. Which means to you, the homeowner’s hardship has been established, the value the lender will accept has been established and barring any surprises, you should have a fairly smooth path to closing (assuming you’ve taken care of business on your side). Remember, the banks don’t always play by the rules.
4. Are there any other liens on the property and have negotiations begun with them?
In our local real estate market, a large number of homes have not only a first mortgage a second mortgage and sometimes a third. In order for your short sale to be approved, these lien holders also have to agree to accept less than what they were owed. The most common mistake by Realtors, who are unfamiliar with the short sale process, is they don’t begin negotiating with the junior liens until they have approval from the first.
5. If there is a second lien on the property, does it have lien or stop-gap insurance? If the loan has this insurance, it’s time to move on to another home. If the Realtors don’t know, have them find out before you make that mental decision that this will be your first home. Lien or stop-gap insurance guarantees the lender full payment in the event of default, so there is absolutely no reason for them to negotiate with you.
First time home buyers it’s time to step up
This is not your parent’s real estate market, so it’s your responsibility to be as informed as possible and hire the best representation possible, because even though it will be home to you, it’s a business decision for the bank, and either they will or they won’t based on their interests not yours.
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Other Related Posts:
First Time Home Buyers-First Time Home Buyer Loans-First Time Home Buyer Credit Scores
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home
First Time Home Buyers – is it the right time to buy
First Time Home Buyers – What is the real cost of waiting
Check us out on Facebook Temecula 365 Things to Do

Temecula New Homes for Sale-Arroyo at Paseo del Sol

Arroyo at Paseo del Sol

First time home buyers in Temecula, Murrieta and other parts of southwest Riverside  and North County San Diego were able to get their first view of the new homes of Arroyo at Paseo del Sol.

Last Saturday, October 23 Lennar Homes had the grand opening for Arroyo at Paseo del Sol. Over my career as a first time home buyer specialist I’ve had the opportunity to attend a lot of grand openings for new home communities and the grand opening for Arroyo at Paseo del Sol was comparable to those when the Temecula real estate market was a lot healthier. They had entertainment and refreshments, stagecoach rides and even an Old West shootout.

The “stars” of the show at Arroyo at Paseo del Sol, as should be, were the two model homes. They do offer a third single story plan but do not have a model home to showcase it. Even though the Lennar Homes are priced higher than their neighbors at Manzanita at Paseo del Sol, the homes are larger and many of the the things that are upgrades at Manzanita at Paseo del Sol are included in the purchase price at Arroyo at Paseo del Sol.

In previous posts I’ve mentioned the importance that this is not your parent’s real estate market and that having your own representation is critical whether you are buying a new home at Arroyo at Paseo del Sol or Manzanita at Paseo del Sol, a bank owned or short sale home. Most of the time you won’t be negotiating with a “mom and pop” seller but with a national corporation or lender.

To you it’s the place you want to call home for many years, to them it is a business transaction. In every business transaction there are going to be certain areas where your interests will not be the same as the party across the table from you.

First Time Home Buyers don’t need a Realtor-they need a GOOD Realtor

I didn’t get a chance to ask them about financing options but I didn’t see any literature about special first time home buyer financing available.

Qualified first time home buyers may be eligible for interest rates as low as 3.875% with down payment assistance.

As I’ve said before I’m a lender not a Realtor, so if they don’t have special first time home buyer programs available through their mortgage company, you have to look at the value of the incentive.

If the in house lender (UAMC) offers you an interest rate of 4.5% ( a good rate by the way) over 10 years you would pay $18,221 more for your home (based on the single story model at $303,000) than if you were able to get the first time home buyer financing at 3.875%.

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Other Related Posts:
First Time Home Buyers-First Time Home Buyer Loans-First Time Home Buyer Credit Scores
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home
First Time Home Buyers – is it the right time to buy
First Time Home Buyers – What is the real cost of waiting
Check us out on Facebook Temecula 365 Things to Do

First Time Home Buyers-Understanding the foreclosure freeze

First time home buyers and the foreclosure freeze

First time home buyers in the process of buying their first home or those just “shopping” for their first home, have to be wondering what this foreclosure freeze means to them. In just the two weeks since my previous post, the landscape for first time home buyers has changed yet again.
To be an informed consumer it’s important that you know what is going on now and what is likely to happen in the future, and how it will affect the search for your first home.
Read the previous post- First time home buyers and the foreclosure freeze
Since that post on October 14, the Attorneys General of all fifty states have called for a foreclosure freeze, until they can verify that lenders are conforming with the laws of their state as it relates to the foreclosure process. Most of the major banks have performed their review or are in the process of completing it and reported they are in compliance.
The bigger “elephant in the room” is MERS, the Mortgage Electronic Registration System. For years lenders have transferred mortgages among themselves using an electronic transfer. As a result, many lenders have not been able to produce the original documents required to prove they are in a legal position to foreclose. This shouldn’t permanently  prevent foreclosures because most lenders will eventually be able to produce the documents.
So what does it all mean to you the first time home buyer?
IMHO, lenders are going to figure out ways to improve their short sale processes, so they can sell more homes via short sale rather than going all the way to foreclosure, which is undoubtedly going to result in more legal challenges.
Short sales may be getting easier for first time home buyers
One of the major title companies has reported that, up to 45% of short sale escrows that are opened in Southern California don’t close. More than half of those were due to the short sale not being approved, the other half because the buyer didn’t qualify for the loan.
Educated first time home buyers can cut this number in half by educating themselves and by hiring a professional Realtor and lender to guide them through the process.
First time home buyers don’t need a Realtor – they need a GOOD Realtor
The internet gives today’s first time home buyers the opportunity to be the most educated home buyers ever. With this opportunity, comes the responsibility to:
1) Educate yourself on how the short sale process works.
2) Identify if the short sale you’re considering has a chance of closing.
3) Make sure your financial house is in order before you start.
First time home buyers it’s time to step up
This is the first in a series to help first time home buyers navigate the short sale process, subscribe the feed to get the latest and greatest.
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Other Related Posts:
First Time Home Buyers-First Time Home Buyer Loans-First Time Home Buyer Credit Scores
First Time Home Buyers 10 good reasons to buy now
First Time Home Buyers – How to buy your first home
First Time Home Buyers – should you buy a new home
First Time Home Buyers – is it the right time to buy
First Time Home Buyers – What is the real cost of waiting
Check us out on Facebook Temecula 365 Things to Do

First time home buyers-it's time to step up

First Time Home Buyers

As I’ve said on a number of occasions first time home buyers are facing a real estate market unlike any other we’ve ever experienced. Sure we had foreclosures in the 90s, but nothing on this scale and as a result it has made the search and purchase of your first home “not just a job, but an adventure”.
That doesn’t mean you shouldn’t be out there looking for your first home, because you won’t get this perfect storm of low housing prices AND record low interest rates again.
If you’ve decided it’s the right time to buy your first home it’s also time to “step up to the plate” and realize you are staring the opportunity of a lifetime in the face but as with every opportunity there is responsibility as well.
You need to educate yourself on the dynamics and the mechanics of your local real estate market so you can make an informed decision on whether buying a first home is right for you.
Quit forming your opinions based on what you hear from the national media. Most of these “experts” have only a superficial knowledge of the day to day workings of the market and are only giving a compilation of information they have gathered from others.

Real estate, more than ever is local and you need a local expert to give you the best information as it applies to the area where you have decided to live.
No one is an expert everywhere – You’ve all seen the ads where someone claims to be an expert in every real estate market within a 25 or 50 or 100 mile radius. Can’t happen! (I guess the PC term would be puffery), nobody (at least in Southern California anyway) can professionally cover that much territory and that many houses. Unless they are actually driving all over Southern California, their ad only means they have access to all the local MLS information. Heck, you can get that too on Yahoo, Zillow or Google.
You don’t need a Realtor-You need a good Realtor
“It must be true because I saw it on the internet” There are hundreds of real estate websites on the internet and most of you have been on them in your search for your first home. Some of them, like Zillow and Yahoo, rely on a feed (IDX mostly) from the local Multiple Listing Services (MLS). Others are listing advertising sites where agents can post the information about their homes for sale. In either case the information is only as good and as timely as the agents who input the information. I’ve called on properties on some of the listing sites and found that some of the properties sold more than 12 months ago.
If you are a first time home buyer in California (Southern and Northern), Phoenix Metro, Las Vegas, Denver, Portland, Seattle or Miami, you should check out DQNews.com.

DQNews is reported by DataQuick and is based on actual recording information and not reliant on someone who has a financial interest in the transaction or has been too busy to update.
You are better educated than any other generation of first time home buyers – but NO ONE, not me, not your Realtor, not your brother-in-law nor your hair stylist know what the future of home prices or interest rates holds. It’s your money that makes any real estate transaction successful, so it’s up to you to better educate yourself on the entire process, hire a team of professionals you trust and work together to get you and your family on the path to homeownership.
WARNING: You have one HUGE risk if you buy your first home this way. You’ll have to accept responsibility for the decision you made.

Ask your burning question

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First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

First Time Home Buyers – What is the real cost of waiting

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Does a first time home buyer need a Realtor?

First Time Home Buyers need a Realtor

First time home buyers in search of their first home are experiencing a real estate market unlike any we’ve had in the past. Unfortunately, many of them don’t realize they challenges they faces and are doing it without adequate representation.
I’m a lender not a Realtor, so I don’t have a horse running in this race and this post is not a “pick ME, pick ME” advertisement.
In the good ol’ days of Real Estate, it was like a “cottage industry”. You might have selected your Realtor because they were your neighbor or brother-in-law. They showed you a few houses, you found one you liked and wrote an offer. Your agent would present the offer to the seller, usually at the kitchen table.

There would be some negotiation: “I’ll throw in the refrigerator, washer and dryer if you increase your offer by $1000”.

For the most part everyone played nice and it was pretty civilized.

Well those days have gone the way of “Pong and lincoln logs”.

First time home buyer in most parts of California have their choice of homes either:

1) bank owned property

2) short sale or

3) new homes.
Regardless of the type of home you’re buying, across the table from you will be the representative of a major corporation and this is not their first time at the bargaining table.
Now I like my brother-in-law, he makes good BBQ and sometimes remembers to pitch in when we make a beer run, but he can’t negotiate on equal footing with the Realtors, lenders and sales representatives of the major corporations.
Buying your first home in today’s market is a business transaction and you should treat it as such.

If you go in “relying on the kindness of strangers”, what will you do if you have to go back to the negotiating table because:
1) The sales price is not supported by the appraisal or requires some repairs?
2) The seller asks you to remove the appraisal contingency?
3) The home inspection recommends repairs?
4) The closing date is extended and the seller wants you to pay the $125 per diem even though it was their fault?
Then there’s this whole “use our lender and you get something” scam.

New home builders can be the pros on this. “use our lender and will give you an incentive, if you don’t we won’t”.

On the REO and short sale front this is disguised as “cross qualification”. “If you don’t cross qualify with our lender we won’t accept your offer.”

This is just the bank’s feeble attempt to minimize their loan losses at your expense, or the builder making more money because they own the mortgage company or are business partners with it.
Cutting through the “incentive” and “cross-qualification” noise, you are being required to surrender your financial information to an employee or agent representing the other party to the transaction.

Aside from the potential FTC violation, what do you think happens to your negotiating power?

If the seller knows your financial situation, do you think they might use it to their advantage when asking for your “highest and best” offer?

If the seller knows you qualify for more home, do you think they might use that to their advantage?
If they know you have more funds available, do you think they might use that to their advantage?

If the seller knows your entire financial picture, do you think they might use that to direct you to a loan program that is better/easier for them?

If the builder knows your complete financial picture do you think they might use it to their advantage when trying to sell you more upgrades at their design center?

In short, you don’t need a Realtor.

You need a GOOD REALTOR and Lender, who understand this is a business transaction and are not working for or hired by the other party to the transaction.

How smart would it be to hire the other side’s attorney in court proceedings?

Not very, so select your Realtor and Lender with the same care.

Ask your burning question

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First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

First Time Home Buyers – What is the real cost of waiting

Manzanita @ Paseo del Sol

Grand Opening Manzanita @ Paseo del Sol

First time home buyers had the opportunity to attend the grand opening on Saturday, October 16, of the KB Home community, Manzanita @ Paseo del Sol in Temecula, California.

The excitement that a new home community generates is still amazing to me. The grand opening of Manzanita @ Paseo del Sol was no exception. This is the first new home community, in Temecula, to open in a long time that was priced for first time home buyers.

Watching first time home buyers cruise through the model homes, imagining how their furniture would look in each room or how they would change the layout is always an experience.

Grand Opening Manzanita @ Paseo del Sol

But first time home buyers also need to know that buying a new home is not like buying a resale home. Through the entire process, you’re going to be dealing with employees of the builder or an affiliated company.

Not necessarily a bad thing, but if and when there is some turbulence that necessitates some negotiation on your part, they will be protecting the interest of their employer first.

First of all what you see, is not what you get! Builders spend hundreds of thousands of dollars to decorate their model homes, so before you sign on the dotted line be sure to ask your Realtor or the community sales representative what is included and what is optional?

In real estate transactions there are certain fees to be paid and “customarily” the seller pays his portion of escrow and title fees and you pay yours. Ask, or have your Realtor ask which fees other than the “customary” fees will you be expected to pay? Even though you may have your own lender who has given you an estimate of closing costs, it may be significantly different working with a new home builder.

Most builders have their own mortgage company representatives on site and “encourage” you to use them in order to receive any incentives they may be offering. I worked for a long time on that side of the business, so I understand the structure, BUT isn’t revealing all your financial information to the other party to the contract (builder) putting you at a distinct disadvantage when it comes to negotiating things like interest rate, new sales price if values continue to decline etc?

One last thing to remember before you sign on the dotted line. Some builders are now adding in a “transfer fee” to their deeds. It doesn’t cost you anything now, but if and when you go to sell your home, you may find an additional charge, usually up to 1% that is paid back to the builder. Not all builders have this fee, but don’t forget to ask. Closing is not the time for surprises.

To contact a first time home buyer specialist

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Other Related Posts:

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First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

What is the real cost of waiting to buy your first home?

Should first time home buyers wait?

First time home buyers have to filter through so much “noise” when trying to decide if they should buy their first home now or wait because home values might go down even more.
For the record, I’m a lender not a Realtor, so I’m not going to tell you  waiting to buy your first home will cost you more because home values “are sure to go up”.

They may or they may not, but that will be due to economic conditions in your local market.

If you want a simple indicator of which way your market will go, look at your local unemployment numbers.
In Southern California our unemployment rate is pushing 15% and not showing any indication of declining.

This will affect our market in two ways:

1) More people will be struggling to make their mortgage payments, which means the potential for more foreclosures and short sales.

2) Fewer people will be working so the demand for housing will either remain where it is or decline.
Increased inventory and stagnant or declining demand = lower home prices.
So that means, first time home buyers in Temecula, Murrieta and other portions of Riverside and San Diego County shouldn’t buy now, they should wait?
Not so fast!
There’s a lot more to this than just the price of your first home.

If you’re buying (or not buying) because the value of your first home “is sure to go up” (or down) you’re missing the whole point of homeownership.
If you continue to rent, you’re still making a mortgage payment it’s just not yours, it’s your landlords.
Owning a home is about having something that’s yours. It’s a place to raise your family, it’s a place where you can decorate a bedroom as a tribute to Elvis if you like.
If you decide it’s not the time to buy, you’re also missing out on the tax deduction you get for mortgage interest and property taxes, and because you’ll be itemizing, now instead of taking the standard deduction, you might be able to deduct among other things employee business expenses and charitable deductions.
All nice things, but what’s the real cost of waiting?
When it first became apparent that the housing market was in trouble, the Treasury Department agreed to start buying mortgages as a stopgap measure to carry us until the housing market stabilized. The result of this “artificial stimulation” was that interest rates dropped from 6% to the current 4.25-4.5%.
This intervention achieved its stated goal and the government is now looking for ways to ease out of the mortgage market. As this happens, interest rates are going to have to increase to their pre-intervention levels.
Let’s assume that housing prices do decline another 10% over the next year, you continue to rent your current home for $1200/mo, and that interest rates go back to their pre-intervention levels.
So, what does this mean to you if you are buying your first home at $200,000?
1) You will have paid your landlord’s mortgage for another 12 months to the tune of $14,400
2) You can now buy that $200,000 home for $180,000.
3) With interest rates at a still respectable 6%, your monthly principal interest payment would be $1079.
Compared to buying your first home now:
1) You’ll have a whole year of ownership and all the benefits it brings that renting doesn’t
2) You paid $200,000
3) You got your first home loan at 4.5% with a monthly payment of $1013

Over a 10 year period, if you wait you’ll pay $100,137 in interest. Buying at today’s interest rates you will pay $81,783
The real cost of waiting? $18,354

To contact a first time home buyer specialist

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Other Related Posts:

First Time Home Buyers-First Time Home Buyer Loans-First Time Home Buyer Credit Scores

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

Manzanita @ Paseo del Sol

Grand Opening Manzanita @ Paseo del Sol

First time home buyers in Temecula will be able to see the finished product at Manzanita @ Paseo del Sol in just a couple of days

KB Home announced the grand opening for Saturday, October 16.

It was amazing how quickly they went from dirt to finished homes.

First Time Home Buyers – should you buy a new home

Before you get caught up in all the excitement that goes on at the grand opening of a new home subdivision, especially one of the first in Temecula in a long time. It’s important to step back and remember a few things before you sign on the dotted line.

I’m not a Realtor, I’m a lender so I have no skin in this game but it’s important that if this is your first visit to Manzanita @ Paseo del Sol, you take a Realtor with you. If you’re already working with one you trust, I’m sure they worked hard for you and deserve to be paid for the effort.

But more importantly, you need someone to represent your interests. The community sales representatives are employees of the builder and if you encounter some turbulence during the process, which you will, whose interest will they put first?

Undoubtedly, the builder will also have representatives from their mortgage company and they are either employees of the builder or employees of a company owned by the builder. Once again you need representation to make sure you are getting the best loan for you and not for the builder. There are a number of first time home buyer programs available for new homes, if these options aren’t discussed with you, you have the right to choose your own lender.

That being said, new home builders are very concerned about your customer experience and will every thing they can to make your experience pleasurable up to the point where your interests might conflict with theirs.

Buying your first home can be an exciting experience, but the nature of today’s real estate and mortgage market, it’s critical that you have someone who is putting your interests first.

To contact a first time home buyer specialist

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Other Related Posts:

First Time Home Buyers-First Time Home Buyer Loans-First Time Home Buyer Credit Scores

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – is it the right time to buy

Understanding the foreclosure freeze

Foreclosure freeze

First time home buyers whether they are just “shopping” or actively looking for their first time home have to be a little “freaked out” by this whole foreclosure freeze.

If you’re a first time home buyer and feeling confused about this “foreclosure freeze” mess, that’s a good thing. It means you’re taking the home buying process seriously and recognize it for what it is, the biggest investment in your life so far and the first brick in your lifelong financial plan.

Unfortunately if you’re relying on the national media to clear things up for you, their sensationalizing of the issue isn’t giving you information that’s relevant to YOU!.

First of all if you’re not reading this post within a couple days of the posting date (October 14th), chances are the information has changed again, but I’ll keep you updated as more information becomes available.

To understand this mess you have to know how the process works in the state in which you live. Your state is either a “judicial foreclosure” state or a “non-judicial foreclosure” state.

The foreclosure fraud and “robo-signings” allegations got started in the “judicial foreclosure states”. In these states in order for a lender to foreclosure they have to institute legal proceedings, attest to the validity of the documentation, go before a judge and get it approved before they can foreclose.

In a non-judicial foreclosure state, if the homeowner stops making their payments, the holder of the security instrument (deed of trust) can file a notice of default, which triggers a 90 day period in which the borrower can catch up the payments. If they don’t a trustee’s sale is scheduled and about 30 days later the home can be sold literally “on the court house steps”. (I live in California and it is a non-judicial foreclosure state)

Whether or not the lenders followed these steps according to the laws of their state, is really the crux of the issue. Where this gets sticky for you as a first time home buyer, is in regards to obtaining a policy of title insurance.

When you are buying your first home, you will be getting a title insurance policy from the current owner (owner’s policy) that insures that no one has a claim to the title of the property the supersedes yours. If the banks are found to not have followed the laws of the states, previous owners could (and given the litigious nature of our society, you can bet on it!) sue claiming they were wrongly evicted from their home.The title insurance is designed to protect you in the event this happens.

As a result of this mess, a couple of the major title insurers have decided not to insure some of the foreclosed properties of some of these lenders (at least for the time being).

In short, if you can’t get title insurance, you can’t get a loan, which means you can’t buy the house.

The good news is you can expect this to get resolved quickly, the housing market cannot withstand an extended “freeze” on the backlog of foreclosed homes.

We’ll keep you posted!

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First Time Home Buyers – is it the right time to buy

Down payment assistance for first time home buyers

First Time Home Buyer Programs

The opportunity to lift us out of the housing crisis lies with first time home buyers.
Governments at all levels know that for true economic recovery to occur, housing has to make a comeback and first time home buyers will lead the way.
As a result when you survey the lending landscape you see a wide array of first time home buyer loan programs designed to put first time home buyers on the path to homeownership.
The following list is by no means inclusive, but covers many of the available programs for first time home buyers.
Some of these programs are only for first time home buyers in Riverside County, CA, some for first time home buyers in California, others are applicable across the United States.
Not all the programs require that you be a first time home buyer but many do, especially to receive down payment assistance or tax credits. Most programs define first time home buyer as “not having owned a home in the last three years.”  Even if you were one of the first casualties of the housing meltdown you may qualify for one or more of these programs, as long as your last three years of tax returns do not show the interest or property tax deductions.
Not everyone qualifies for these programs as some have maximum income limits and property eligibility requirements, but if you are working with a first time home buyer specialist, we can determine the programs best suited for you in your search as a first time home buyer.
The common thread of these programs is they have loan down payment requirements (3.5% or less) or can be combined with down payment assistance and have more flexible qualifying guidelines than conventional loans with 5% down payment.
1. FHA – First time home buyer program since 1934, 3.5% down payment – may be combined with down payment assistance programs. No income limits
2. VA –  ZERO down payment for qualified veterans and active duty military. No income limits
3. USDA – Zero down payment, income limits and property eligibility requirements.
4. CALHFA /FHA – First time home buyer program for California first time home buyers. Maybe used with CHDAP down payment assistance which qualifies for lower interest rate. May be used with qualified down payment assistance programs. Has income limits and property eligibility requirements.
5. Riverside County (CA) Down Payment assistance programs, up to 20% down payment assistance for qualified first time home buyers. Each program has different income limits and property eligibility requirements.
a) RHP – Redevelopment Housing Program – for bank owned and short sales in unincorporated areas of Riverside County.
b) FTB-First Time Buyer Program – for short sales in targeted cities within Riverside County.
c) NSHP- Neighborhood Stabilization Housing Program –  for bank owned properties in targeted cities with Riverside County.
6. MCC – Federal Income Tax Credit for qualified first time home buyers in Riverside County.
7. HUD Homes- $100 down payment for certain homes offered by Department of Housing and Urban Development. No Income limits or FTHB restriction
8. HomePath – 3% down financing for special Fannie Mae REOs – No income limits or FTHB restriction
9. HomeStep – 3% down financing for special Freddie Mac REOs – No income limits or FTHB restriction
10. CalStrs –  3% down for California Teachers – No income limits or FTHB restriction
11. FHA 203k – FHA Financing for homes that need repairs,  includes costs of repairs in loan amount – No income limits or FTHB restrictions.

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First Time Home Buyers – is it the right time to buy

BofA halts all foreclosure sales

First Time Home Buyer Loans

First time home buyers in Temecula, Murrieta and other parts of Southwest Riverside and North County San Diego are wondering what does the latest announcement from Bank of America mean to them and their first time home buying efforts?

While BofA is the first to announce this action in all 50 states, Chase and GMAC/Ally had already made a similar announcement in 23 states, you can expect all the major lenders to follow suit very shortly.

Why? The Attorneys General of most states were lining up to file lawsuits against the banks due to discrepancies in their handling of foreclosure paperwork and to insure they were following each state’s laws as they apply to the foreclosure process.

First time home buyers who are actively searching for their first home and writing offers on short sale homes are going to see further delays in getting answers from the bank (as if you needed more delays for that!). If you are a first time home buyer who is interest in bank owned or REO properties shouldn’t be affected because these homes are already owned by the banks. In some states there may be a problem  with some bank owned homes because at least one title company has said they won’t issue title insurance on the homes of one major lender (Chase). Without title insurance, you can’t get your first time home buyer loan.

I’m a lender not a Realtor and these events are further proof that you need to be represented by a Realtor who is up to date on all the current events as they impact your ability to buy your first home.

We’ll keep you posted as we get more information.

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Other Related Posts:

First Time Home Buyers-First Time Home Buyer Loans-First Time Home Buyer Credit Scores

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

Reserve@Paseo del Sol

Reserve @ Paseo del Sol

Reserve @ Paseo del Sol hasn’t shown much progress in the last couple of weeks. I expected to see some dirt being moved or other activities that indicated that Reserve @ Paseo del Sol was starting construction.

Other than electrical wires being strung to the construction trailer, the only sign of life were these signs lined up like little soldiers with warnings about dumping your basura (trash) and dust abatement etc.

These homes will be the largest of the three new communities opening in this section of Paseo del Sol, ranging from almost 2900 square feet to 3300 + square feet.

I looked on the company website and Reserve @ Paseo del Sol isn’t listed yet, so at least for now it’s hard to pass on any information to you. As more information becomes available, I will post it here.

If you’re a first time home buyer who has been searching in San Diego or Orange County and aren’t satisfied with what’s available to you, then you should consider Reserve @ Paseo del Sol along with the two other communities, Manazanita and Arroyo.

For more information on Manzanita @ Paseo del Sol

For more information on Arroyo @ Paseo del Sol

Other Related Posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

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Arroyo@Paseo del Sol

Temecula Homes for Sale Arroyo @ Paseo del Sol

The new home community of Arroyo @ Paseo del Sol is getting closer to it’s grand opening. Like their neighbor, KB Home who is building Manzanita @ Paseo del Sol, Lennar homes is pushing for an October opening.

The two model homes are close to completion and as soon as they get in the curbs, streets and landscaping they will start decorating. If Manzanita is a barometer of their progress, you can look for an opening the end of October.

Pricing is still not available but they should be within the range that would allow you to use the new 4% financing program for first time home buyers and the special Riverside County tax credit for first time home buyers.

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

Other related posts:

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

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Down Payment Assistance in Riverside County

First time home buyers in Temecula, Murrieta and first time home buyers in many other locations within Riverside County have received another boost in the search for their first home.

Down Payment Assistance for first time home buyers

The County of Riverside has announced the availability of funds for the Neighborhood Stabilization Housing Program (NSHP). In addition to NSHP, Riverside County also has down payment assistance for first time home buyers in the First Time Buyer (FTB) and Redevelopment Housing Program (RHP). Each program has its own qualifying criteria with different income limits and qualifying locations.

For more information on the FTB down payment assistance program

For more information on the RHP down payment assistance program

As is the case with all down payment assistance programs, first time home buyers must meet the income limits based on family size for each program. Here are the income limits for NSHP:

Down Payment Assistance Income Limits

In addition to meeting the income limits, you have to meet the following criteria:

1) Be a first time home buyer OR not have owned a home in the last three years

2) Qualify for the underlying FHA first mortgage based on your income and credit

3) Attend an approved first time home buyer education class

4) The home you are purchasing must be a vacant foreclosed home located in one of the qualifying locations.

What are the qualifying locations? The Program will be offered in Targeted areas of   Riverside County that have been identified to have the greatest need.  The Targeted areas include portion of fifteen (15) cities and nine (9) unincorporated areas, which are listed below:

Cities

Banning, Beaumont, Blythe, Canyon Lake, Cathedral City, Desert Hot Springs, Indio, Lake

Elsinore, Menifee, Murrieta, Norco, Perris, San Jacinto, Temecula, and Wildomar

Unincorporated Areas

East Hemet, Eastvale, French Valley, Highgrove, Home Gardens, Lakeland Village, Rubidoux,

Temescal Canyon, and Thousand Palms.

For more information about down payment assistance programs

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First Time Home Buyers-First Time Home Buyer Loans-First Time Home Buyer Credit Scores

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

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First Time Home Buyers – is it the right time to buy

Important information about first time home buyer loans

Home loans for first time home buyers got a little more expensive yesterday as the anticipated changes to the FHA MIP premiums  became effective.

First time home buyers with less than 5% of their own funds for down payment, are reliant on FHA financing for their first time home loan.  As a result these changes will have some impact on the monthly payments for an FHA loan.  On a $200,000 loan these changes have a net effect of $44/month. Not a huge change, your landlord will probably increase your rent more than that this year anyway.

If you’re not familiar with FHA MIP, it stands for Mortgage Insurance Premium and is insurance coverage to protect your lender in the event you default on your mortgage payments. MIP is not a negotiable item and is included on every FHA loan (unless you’re making a big down payment and getting a 15 year loan).

First time home buyer loans

If you are already in the process of buying your first home and your lender ordered the FHA case number before yesterday, then you will be subject to the previous MIP premiums.

This small increase in MIP premiums is more than offset by the record low interest rates. First time home buyers in California may be eligible for 4% FHA financing through CALHFA. Taking advantage of this lower interest rate will lower your monthly payment about $58.

For more information on 4% financing for California First Time Home Buyers

In most real estate markets across the country, first time home buyers are asking for and getting help from the banks and sellers to get their first time home loan. This “credit” is referred to as “seller concessions” and can be used for closing costs and pre-paid items, but not down payment. Before October 4 the maximum a seller could pay on your behalf was 6%, that number has been reduced to 3%.

If you’re a first time home buyer in a real estate market dominated by bank owned properties and short sales, the 3% has been the reality anyway. It was the exception rather than the rule for the seller concession to exceed 3%.

First time home buyer credit scores also will be receiving additional scrutiny effective October 4.

Some of the major lenders raised the minimum credit score requirement from 620 to 640. To be clear this was not a change implemented by FHA, but is an “investor overlay” and the implementation may vary from lender to lender. Some lenders will not consider an application where the credit score is less than 640, while others will have additional loan level pricing adjustments for credit scores between 620-639. For still other lenders, it’s business as usual (for now) and they are approving loans with credit scores as low as 600.

Other First Time Home Buyer Information:

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To contact a first time home buyer specialist

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Temecula things to do-things to do in Temecula CA

If you’re looking for things to do in Temecula, CA then you should know about the Old Town Temecula Community Theater located in Old Town Temcula.

The Ultimate USO Tour featuring the Swing Dolls is making its way to Temecula. On Saturday, October 2 at the Old Town Temecula Community Theater.

Those who served in the military during World War II, Korea and even Vietnam remember the Bob Hope USO tours. What many don’t realize is those tours got their start at March Field in Riverside back in May 1941.

The Swing Dolls Ultimate USO tour is a tribute to Bob Hope and the performers who gave their time, usually at Christmas to entertain our troops around the world.

If “Boogie Woogie Bugle Boy” doesn’t have you tapping your feet, it’s time to lighten up and enjoy this “blast from the past”.

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Temecula things to do - Things to do in and around Temecula CA

Living in Temecula CA, gives us  the opportunity to enjoy all the entertainment that Southern California has to offer. About an hour north and west of Temecula is the Magic Kingdom of Disneyland (OK it’s a little longer if there’s traffic). Hey, this is Southern California, you can’t go anywhere without some traffic.

Halloween truly brings out the imagination in Disneyland and Temecula residents can see  Jack Skellington (Nightmare before Christmas) take over the Haunted Mansion and the summer fireworks display become a ghostly celebration.

Enjoy!


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First time home buyer tax credit

First time home buyers who are looking to buy their first time home, can  maximize their housing dollar in Temecula, CA may be eligible for a special first time home buyer tax credit from the County of Riverside.

The Temecula real estate market features homes for sale in Temecula and Murrieta that give you a big “bang for your buck”

If you’ve read our previous posts on the topic you know your housing dollar goes much further in Temecula CA and Murrieta CA and our special first time home buyer tax credit from Riverside County also helps you qualify for your first time home buyer loan.

First Time Home Buyers looking for more bang for their buck

Temecula homes for sale give more bang for your buck

First time home buyers in Temecula and Murrieta have a number of first time home buyer loan programs to help them buy their first time home and many of these programs support the first time home buyer tax credit offered by the County of Riverside.

Temecula Homes for Sale

If you are a first time home buyer OR haven’t owned a home in the last three years you may be eligible for the special Riverside County First Time Home Buyer Tax Credit. The short version of this first time home buyer tax credit is that each year you own your home as your primary residence, you can convert 15% of your mortgage interest deduction into an income tax credit.

If you’re unfamiliar with how a first time home buyer tax credit works, it is a dollar for dollar credit against your federal income tax liability.

For a more detailed explanation on the special Riverside County FTHB tax credit

To contact a first time home buyer specialist

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Are the best deals for first time home buyers in San Diego or Temecula?

First time home buyers who are looking for the best first time home buyer loans should consider looking in Temecula, CA.  San Diego first time home buyers who have become disillusioned with how much their housing dollar will buy, should look north to Temecula, Murrieta and other parts of Southwest Riverside County.

Temecula Homes for Sale give  first time home buyers more bang for their buck

Temecula Homes for Sale

You might get the most bang for your buck in Temecula, or Murrieta. It might be found in Menifee, Wildomar or even inFrench Valley.  It might be a Temecula bank owned property, or a short sale in Murrieta, maybe even a new home in Menifee will give you that sought after “bang”

Before you set out on your journey, you have to ask yourself if you’re truly ready to take on the responsibility of homeownership.Just like any journey, the potential reward has to be great enough for the effort you will have to put forth.

Here are some examples of how first time home buyers can get more bang for their buck in Temecula, CA

In San Diego the median price home is $328,000 and the average price per square foot is $264. Using those numbers your median price home would be about 1242 square feet.

In Temecula CA  the median price home is $287,000 and the average price per square foot is $132. That means the median price home in Temecula would be 2174 square feet AND the monthly payment on your first time home loan would be about  $207 less per month

If your journey took you a little more north to the Murrieta real estate market, a Murrieta home for sale would give you more bang for your buck.  In the Murrieta CA the median  price of a Murrieta home for sale is $245,000 and the average price per square foot is $113. So your Murrieta home median price would be about 2168 square feet AND your monthly payment would be about $420 a month less than in San Diego.

(Housing figures are estimates only from Trulia.com)

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First time home buyers get more bang for their buck in Temecula

First time home buyers in Temecula

Being a first time home buyer in San Diego can be a very frustrating process, because it seems you just can’t get much bang for your first time home buyer buck and what you can afford isn’t much bigger or better than the apartment you’re renting.

If that’s the case I want to introduce you to Temecula real estate and Temecula homes for sale. Temecula is located about an hour north of San Diego via Interstate 15. You might have passed right by us on your way to Las Vegas or Palm Desert. You probably missed us on your last wine tasting trip to Temecula Wine Country.

Temecula homes for sale isn’t just a city, or neighborhood. In fact it’s more a state of mind. Just like California is more than just geography, it’s also a state of mind. But once you come to know Temecula CA, Murrieta and the surrounding communities you’ll see what we mean.

There is a lot of value to be found among the Temecula homes for sale.

According to Trulia.com, the average price per square foot in San Diego is $264, in the Temecula real estate market it’s $132.

So according to Trulia you can get TWICE as much house in Temecula than in San Diego.

Temecula, Murrieta and the other cities of Southwest Riverside County are more than just homes for sale. They are cities with family neighborhoods, great schools and plenty of entertainment options, including Old Town Temecula.

For more information on how to get the most from your first time home buyer dollar from Temecula, Murrieta and other cities in Southwest Riverside County, subscribe to our blog.

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Temecula Things to do - Things to do in Temecula CA

If you’re looking for things to do in Temecula CA there are many things to do here in Temecula that are either free or very low cost.

Uncovering a hidden musical talent can be a very rewarding thing for both student and teacher
so  Musicians Workshop of Temecula CA is offering free beginning piano lessons for local residents.

The Temecula Noon Rotary, the San Manuel Band of Mission Indians and the Community Foundation are providing funding to make this possible.

Musicians Workshop

However, there is a price of admission: Both student and parent have to agree to attend AND practice. Even though the focus is primarily toward children all ages are welcome to “tickle the ivories”.
Who knows there may be a Van Cliburn, Jerry Lee Lewis or Elton John in your family, just waiting to be discovered.
For more information check out the Musicians Workshop Website and see some of our local talent.

http://www.musiciansworkshop.org/

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Manzanita @ Paseo del Sol

If you’re a first time home buyer in Temecula, Murrieta or other parts of Southwest Riverside County or North County San Diego, I wonder if you’re as amazed as I am when you see how quickly homes can be built, when there’s money to be made.

If you’ve been following this blog, you know that less than three weeks ago, Manzanita @ Paseo del Sol was still pretty much dirt. Sure there were plenty of tractors and graders moving the dirt around but it was still basically dirt.

Fast forward three weeks and the sales trailer opened on September 18 so first time home buyers can be put on the interest list.

Manzanita @ Paseo del Sol

I paid a visit to the KB sales representatives on site, and they’re very excited about the future of Manzanita @ Paseo del Sol.

There will be 118 homes built with four floor plans ranging in size from 1628 to 2294 square feet.

With KB Home’s Built to order program, first time home buyers will be able to “create a home that reflects your style while staying within your budget”

Should a first time home buyer buy a brand new home?

Is now the time to buy your first time home?

KB only began the framing a few days ago but they have set an opening date of October 16.

Manzanita @ Paseo del Sol

Pricing is still not available, but if you haven’t owned a home in the last 3 years you may qualify for special 4% fixed rate financing from CALHFA

For more information on the various first time home buyer programs that may be available for Manzanita @ Paseo del Sol,

Contact Us

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Did you feel the shift in the real estate market?

First time home buyers in Temecula CA, Murrieta CA and other cities in Southwest Riverside County and North County San Diego are seeing a shift in the dynamics of the local real estate market.

It might be described as a “perfect storm” for first time home buyers

Perfect Storm for First Time Home Buyers

To other first time buyers it might feel like the “stars are finally in alignment”.

It might even feel like a 7.0 magnitude tremblor to others.

10 good reasons for first time home buyers to buy nowBut no matter how you describe it, the opportunity for you to make the switch from first time home buyer to first time home owner just keeps getting better.

Home affordability in Riverside County is reaching levels not seen since the mid 1990s. It’s estimated that close to 70% of Riverside County residents can now afford the median price home.

To add to this enhanced affordability for low and moderate income families, Riverside County Redevelopment Agency announced new funding for its First Time Home Buyer Down Payment Assistance Program.

Under the terms of this program, qualified first time home buyers can receive up to 20% of the purchase price for down payment assistance.

To qualify you must:

1) Be a first time home buyer OR have not owned a home in the last three years.

2) Be credit worthy for the first mortgage from a County approved lender

3) Attend a qualified homebuyer education class.

4) Not exceed the income limits, based on family size.

FTHB Income Limits

5. Purchase a home within either an unincorporated area of Riverside County or within one of the qualified city locations. Home may be either a bank owned or a short sale.

Qualified Locations for FTHB program

Important Note: This down payment assistance program may be used in conjunction with the recently announced CALHFA 4% fixed rate financing program.

For more information on the CALHFA 4% fixed rate financing program for first time home buyers

To contact a first time home buyer specialist to see if you qualify

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Feel like you're in short sale jail?

First time home buyers in short sale jai

If you’re a first time home buyer in Temecula, Murrieta or other parts of southwest Riverside County or North County San Diego, you no doubt have become frustrated with many parts of today’s real estate market.Should a first time home buyer buy a home now?If you’re looking for homes in certain price ranges, you’re spending months looking and writing offers, often in competition with 10 or more other first time home buyers.

You find a home you like that happens to be a short sale, your offer gets accepted by the seller and now comes the waiting.

First time homebuyers are waiting 60, 90 up to 120 days or more to hear from the bank if they will accept the offer.

Well someone in Congress has heard the outcry and over the weekend, House Resolution 6133 (H.R. 6133) was introduced to help first time home buyers with the short sale process.

This legislation, if passed, will require lenders to respond to the short sale offers within 45 days. First time home buyers, like yourself, often become so frustrated at the delays, they walk away from their offer and the distressed sellers have, by this time, thrown up their hands in disgust and pretty soon we have another foreclosure to drive down property values.

You can call me a skeptic, but unless this legislation has some “teeth” to it, it will be business as usual. Without penalties for non-performance, I’m not sure what the lender’s motivation to perform will be.

We encourage you to contact your representatives and urge a speedy approval to H.R. 6133, there are a lot of short sales waiting to happen and everyone involved needs all the help they can get.

To contact a first time home buyer specialist

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New homes in Temecula-Reserve @ Paseo del Sol

For months there has been this trailer sitting on the northwest corner of Butterfield Stage Road and Pauba. I had heard another new home builder was going to start a new community on that corner, but I didn’t have any specific information until recently.

Is now the time for  first time home buyers to buy?

The Reserve @ Paseo del Sol

Well, this week a sign was put up announcing Reserve @ Paseo del Sol by Standard Pacific Homes.
I checked the builder’s website and couldn’t locate the community by name, so it looks like we’ll have to live with the information on the sign.
The homes to be built almost fit into the “McMansion” range. They will feature 4 to 5 bedrooms and 2875 to 3363 square feet.
These homes will probably be priced more than the typical Temecula first time home buyer product, but first time home buyers from San Diego may find they will be getting a lot of bang for their buck at The Reserve @ Paseo del Sol.

Should a first time home buyer purchase a new home?

The Reserve @ Paseo del Sol

Some of these homes will sit at the highest point in Paseo del Sol, so it’s likely they will have some stunning views to the south and west and be the best seat in the house for the annual fireworks show held at the Ronald Reagan Sports Park.
Subscribe to the blog and look for more information on The Reserve @ Paseo del Sol.

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First Home Buyers 10 Good Reasons to buy now

If you’re a first time home buyer in Temecula, Murrieta or other parts of Southwest Riverside or North County San Diego, you’ve probably heard all the reasons NOT to buy your first home.

IF you’re committed to making the change from renter to homeowner, have done your homework, and know that it’s right for YOU!

I thought about this and the only reason (other than personal) that I can think of is: What if home prices will continue to drop?

Here’s a news flash they will probably continue to drop, but interest rates are certainly going to increase, so your net monthly payment gain is going to be ZERO!

If the only reason you’re buying your first home is short term investment value, then maybe you shouldn’t buy, there are plenty of get rich schemes in the stock market available.

But if you think that owning is definitely better than renting, and  you think you’d like a place you and your family can call your own, then check out the video and read the article.

Then here are ten reasons for first time home buyers to buy now!


To read the complete article on 10 reasons for first time home buyers to buy a home now

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New homes in Temecula–Manzanita @ Paseo del Sol

It looks like first time home buyers in Temecula, Murrieta and other parts of Southwest Riverside County and North San Diego County will soon have more choices for their first home.

I wouldn’t have believed they could move this quick but KB Home has already begun construction of the model homes at Manzanita @ Paseo del Sol. This first picture is from less than two weeks ago. Ground had barely been broken, tractors were moving dirt and it was very difficult to get a sense of how the community would take shape.

Manzanita @ Paseo del Sol

The second picture was taken today, September 14 and it looks like the crew from Extreme Makeover Home Addition had arrived.  There were cars and construction workers everywhere.

I spoke with one of the executives from KB Home and they expect to have a sales trailer open this weekend (Sept 18-19) to begin building a list of “interested” buyers. It will still be a while before they have prices but you can be notified by KB Home as Manzanita @ Paseo del Sol progresses.

KB Home has a 30 day build out on their models, so it looks like they might make their targeted opening date of October 14.

Manzanita @ Paseo del Sol

The other new community Arroyo @ Paseo del Sol is trying to get open around the same time, but as of today they’re a little behind the homes at Manzanita @ Paseo del Sol.

For more information on both of these Temecula New Home communities, subscribe to the blog.

For more information on special first time home buyer programs

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New homes in Murrieta-Kenton Place

If you’re a first time home buyer in Temecula, Murrieta or other parts of Southwest Riverside or north San Diego County and quiet is what you’re looking for, then check out Kenton Place by KB Home.

Located just west of I-15 and north of historic Old Town Murrieta, Kenton Place by KB Home is 41 build to order new homes.

The Santa Rosa Plateau and Ecological Preserve are just minutes away, providing a country atmosphere with the amenities of Murrieta just a few minutes away.

Murrieta New Homes for Sale - Kenton Place

There are five different floor plans, two single story that range in size from 2024 to 2876 square feet.

Like all KB homes they come with a limited 10 year warranty included in the purchase price.

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

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How to buy your first home!

Help for first time home buyers

First Time home buyers in Temecula, Murrieta and other parts of Riverside and San Diego County get enough advice on how to buy their first home from friends, family and co-workers.

As well meaning as they may be, today’s real estate market is unique to YOU! Your wants and needs in a home are unique to you. Your financial picture that determines what loan you are best qualified for is unique to you.

So, being the best informed first time home buyer you can be, is the most important first step.

Watch this video for some general advice on the home buying process. Unless they were making a full length feature film, telling you everything would be impossible but you can use this an outline of the steps to take.

One important thing they forgot was to ask your Realtor and lender what special programs are available for first time home buyers?  Are there any:

Down Payment Assistance Programs?

Low Interest Rate Financing for first time homebuyers?

Special tax credits for first time home buyers


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New program for California first time home buyers!

First time home buyers in Temecula, Murrieta, and other parts of Riverside and San Diego County just received another boost in their efforts to make the big move from first time home buyer to first time homeowner.

first time home buyer financing

The California Housing Finance Agency (CALHFA) just announced their new CALHFA FHA loan program for first time home buyers.
The program offers a number of features designed to help low to moderate income families achieve their dream of homeownership.

  • 4.875% interest rate – Which is competitive with FHA loans without down payment assistance.
  • Down payment assistance in the form of a CHDAP second mortgage at 3.25% (may be used for down payment assistance or closing costs). When CHDAP is used the  interest rate will be 4.75%
  • When combined with a qualified first time home buyer down payment assistance program an interest rate of 4.625% may be available.
  • To qualify you cannot have owned a home in the last 3 years, meet the income requirements based on family size and qualify for the first mortgage based on your income and credit, and be purchasing a home within the maximum sales price limits for your county.
  • May be used with special Riverside County Tax Credit for first time home buyers.
  • Program is available for new and resale homes for first time home buyers.

CalHFA does not lend money directly to consumers.

CalHFA works through and uses approved private lenders to qualify consumers and to make all mortgage loans
For more information on the CALHFA first time home buyer program

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New homes in Menifee-Sycamore @ Hidden Hills

First time home buyers in Temecula, Murrieta and other parts of Riverside and San Diego County, who are attracted to the amenities and lifestyle that are part of Southwest Riverside County might want to take a look at new homes for sale in Menifee.
About 10 miles north of Temecula and Murrieta on I-215, is the newly incorporated city of Menifee and a number of new home communities that are affordable for first time home buyers.
Regardless of real estate market, one economic factor has always been true in Southern California: A little extra commute time brings a lot more “bang for your housing buck”.

Sycamore @ Hidden Hills


Sycamore @ Hidden Hills is a perfect example of this principle. Surrounded by rolling hills, Sycamore @ Hidden Hills offers a country living lifestyle, but is still close to schools, shopping and I-215.
Buying a new home can be a great alternative for first time home buyers who are frustrated with the drawn out process of buying a bank owned or short sale home.
According to Ed Gates, the KB Home sales representative, your new home can be finished in as little as 4 months, start to finish. In the bank owned short sale world, 4 months is quicker than it takes most first time home buyers to get an offer accepted.
“Our home warranty, is among the best in the business”, says Gates. It covers everything “in, on and around your home, and is included in the sales price.”
The warranty on a bank owned home? ZERO!
First time home buyers on their next home search excursion, should ask their Realtor to show them Sycamore @ Hidden Hills.

Other Related Posts:

Sycamore @ Hidden Hills

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

Check us out on Facebook Temecula 365 Things to Do

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Should first time home buyers consider a new home?

Many first time home buyers in Temecula, Murrieta and other parts of Riverside and San Diego County are getting frustrated with the process of buying a bank owned or short sale home.
They have been looking for their first time home for months, made multiple offers, competing with up to twenty other first time home buyers, then waited weeks or months for an answer and still haven’t made the transition from first time home buyer to first time home owner.
If this sounds like you, you might consider buying a brand new home. Many homebuilders are building more homes designed for first time home buyers and they are at the lowest prices in a long time  with some great incentives.
When we bought our first home in Temecula (1992), the market was similar to what we are experiencing now. Short sales were non-existent, so all we had were bank owned properties and new homes. After spending months looking at bank owned homes that were barely livable we decided on new. The main reason? IT WAS NEW!
Just like any important financial decision, you have to understand the pros and the things to watch out for.
Here are 5 of each:
Pros
1. It’s new and in 10 years it will only be ten years old, whereas a resale will be pushing twenty.
2.Technology has improved over the years, so the heating/cooling systems and appliances are more energy efficient than most older homes. In fact many homebuilders are offering Energy Star qualified homes.
3. The carpet, flooring, paint etc will be new and what you selected. If you chose well you will have many years without that worry or expense.
4. If the builder is offering FHA financing, they have to provide a 10 year warranty that meets HUD guidelines. The warranty on a bank owned home? ZERO! (check with the community sales representatives to get the details of their warranty)
5. Builders have to sell homes to stay in business, so they have lowered prices and many are offering incentives to get you to buy.
Things to watch out for
1. A new home will be higher priced than a comparable size bank owned home. Why? (see 1,2 and 3 above), so make sure it’s still in your budget.
2. Don’t buy the model! Builder spend hundreds of thousands of dollars to upgrade their models for one reason: To get you excited about their homes. Ask the community sales representatives lots of questions about what’s included and what’s not.
3. Don’t get caught up in the design center and all the choices they offer. Getting upgraded carpet, hardwood floors,and granite counter tops all cost money, and the builder makes it convenient because you can usually add it to your loan amount. Not a bad thing per se, but you’re payment is going to increase with everything you buy. Your lender and Realtor will help keep you on track.
4. Property taxes – Make sure to ask the sales people about the property taxes and in particular the special assessments or mello roos. The newer the home the higher these tend to be which will impact your mortgage payments.
5. Unless the builder is offering a back yard landscaping package and, you’ll need to budget for sprinklers, sod, plants and shrubs.
This was not intended to be a complete list. There are other important considerations that are the same for a new home as well as a resale, make sure you investigate all of them thoroughly.

If you’re working with a Realtor, make sure you take them with you on your first visit to the new home community. They will register you and help you sort out all the information you need to make an informed decision. Plus they will be with you all the way to closing, to help you navigate the turbulence that is part of every real estate transaction.

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

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New homes in Temecula-Manzanita @ Paseo del Sol

KB Home Logo

Manzanita @ Paseo del Sol

The heavy equipment gets started everyday at 7:00 am and I can really see progress being made. The first paved street is in, which means the traditional KB Home Sales office is not far behind.

It appears that the sales office will be located on the west side of the complex off Sunny Meadows Drive, which means most of the homes will be within a very short walking distance of Temecula Middle School

Unlike most home builders who use the garage of one of the models. KB invariably brings in a yellow modular sales office which has a very professional sales floor along with three or more offices.

Prices and floor plans have not yet been released for Manzanita @ Paseo del Sol, but both should be following the installation of the sales office.

KB Home like most of the home builders in this market has adopted a build to order strategy. Good news is they are building a home just for you, bad news is a quick move in probably isn’t in your future unless some one ahead of you “falls out”.

The housing bubble burst caught most home builders with a great deal of standing inventory, which they were forced to sell at deeply discounted prices. They won’t make that mistake again.

Bookmark this page and stay tuned for more information on Manzanita@ Paseo del Sol.

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

Check us out on Facebook Temecula 365 Things to Do

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Can you really afford to buy your first home?

Can you afford your first home?

First time home buyers now have another tool to determine if they really can afford their dream home.

Loans for first time home buyers are tougher to get today because lenders are concerned that you’ll be able to repay the loan. But lenders are concerned with qualifying based on their guidelines and not true affordability.

Quick, what is the second largest household expense for a first time homeowner?

For most families, transportation is the second largest household expense.

How much does it cost to commute?

Well now first time home buyers have a new tool to help them determine  the transit score of their new home.

Transit Score provides a 0-100 rating indicating how well an address is served by public transportation. Ratings range from “Rider’s Paradises” that have world-class bus and rail service to areas with limited or no nearby public transportation.

Transit score and Commute Reports are the latest from WalkScore.com.

According to WalkScore:

“Our new Transit Score and custom Commute Reports empower anyone to quickly understand the proximity of public transportation and their commuting options.”

In addition to the Transit Score and Commute Reports, WalkScore also has a “housing and transportation costs calculator” designed to make it easier for people to understand the true costs of housing and transportation.

The new reports are only available in 40 cities currently, but look for this number to grow quickly.

For more information on the new Walkscore.com tools

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

Check us out on Facebook Temecula 365 Things to Do

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Is it the right time to buy your first home?

Is it the right time to buy your first home

First time home buyers are probably wondering if now is the right time to buy their first home. The most recent housing figures have probably planted a few seeds of doubt in the minds of many first time home buyers.

Buying your first home is the most important financial decision you will make and should be treated as such. It’s not an impulse purchase, so careful planning is the first step along with some soul searching to see if homeownership is right for YOU.
Here are some questions you should ask yourself before you start.
Is buying or renting better for me? There’s a lot of responsibility that goes with homeownership, are you ready for it?
It’s a good time to buy if your financial house is in order – Unless you’re paying cash, you’ll need a loan and they’re harder to get these days. Do you know what your lender looks for in a loan application?
Step 1 – Credit History
Step 2 – Asset (Property)
Step 3 – Income
Step 4 – Reserves
It’s a good time to buy if you have a 5 to 10 year plan – The days of the “quick flip” for massive profits are over (at least for now), so make sure you’re prepared to live in your first home for a while. Don’t just evaluate the neighborhood and schools based on your children’s ages now, but think about the schools they will be attending in 5 to 10 years. Will this neighborhood and schools still meet your needs?
It’s a good time to buy if you want to take advantage of the best home prices in years – Affordability is at it’s highest in 15 years. It’s estimated that more than 60% of Riverside County residents can afford the median price home.
It’s a good time to buy if you want to take advantage of the lowest interest rates in a generation - Interest rates are at historical lows because of the weakness in the housing market, as the market recovers interest rates WILL rise.
It’s a good time to buy if you want to take advantage of special down payment assistance programs from the County of Riverside - If you are a first time home buyer or haven’t owned a home in the last three years you may be eligible for the Riverside Homeowership Assistance Programs.

It’s a good time to buy if you want to buy a home with $100 down payment - HUD (Department of Housing and Urban Development) has a number of homes in Riverside County available for $100 down.

It’s a good time to buy if you want to buy home that has been rehabbed by Riverside County and get up to 30% in down payment and closing cost assistance – As part of the Neighborhood Stabilization Housing Program (NSHP) Riverside County has spent close to $48 million dollars to purchase and rehabilitate bank owned properties and many of these properties will be finished and on the market soon.
It’s a good time to buy if you want to take advantage of a special Riverside County Tax Credit for first time home buyers - If you are a first time home buyer or haven’t owned a home in three years Riverside County has a special tax credit program for you.

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

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A new first time home buyer tax credit on the way?

New first time home buyer tax credit on the way?

First time home buyers or those home buyers who haven’t owned a home in three years  may be getting an unexpected bonus from your Uncle Sam.

Last week the NAR (National Association of Realtors) announced that homes sales were down more than 27.2% from June and 25% from July of 2009.

Sales are at the lowest level since the total existing-home sales series launched in 1999, and single family sales – accounting for the bulk of transactions – are at the lowest level since May of 1995.

This announcement sent the financial markets into shock and has the government considering a number of stimulus for the housing market.

HUD Secretary Shaun Donovan said the government is concerned about the continued weakness in the housing market.

When asked about bringing back the very popular first time home buyer tax credit, Donovan replied:

“It’s too early to say after one month of numbers, whether the house credit will be revived or not,” he said.

July was just the first month of the “tax credit hangover” and all indications are that August numbers will continue the trend.

At this point the new tax credit doesn’t have a lot of support in Congress, but that could change as we get closer to the November elections and if the housing market continues to exhibit the weakness of the July numbers.

So what does that mean to you?

If you missed out on the first tax credit, you may be in luck in more ways than one. If the tax credit is revived, and I’m betting it will be, then you’ll not only have a government incentive to buy your first home, but the continued decline in values will allow you to get more home for your money.

Buying your first home is not an event, it’s a process. First Time home buyer loans are tougher to get, so your first step is getting your financial house in order. Unless the first time home buyer tax credit is made permanent (not likely) there is a pent up demand right now and if it plays out like the last first time home buyer tax credit did, the ensuing rush may keep those that are “last to the party” from closing in time to receive the tax credit.

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

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Temecula Things to do-The tall ships are coming to Temecula?

In SoCal the Labor Day weekend has traditionally marked the end of summer, even though the official end is 2-3 weeks away. Even though many kids are already back in school, there are still a number of “end of summer” things to do for residents of Temecula, Murrieta and other parts of Riverside and San Diego County.

I don’t know about the rest of the country, but in Southern California it seems the holiday weekend now starts on Thursday. The “get out of town” traffic with the boats and toy haulers seems to start earlier every year.

Many residents however, choose a “3 day staycation” and this is the first in a series of posts of cool things to do in and around the Temecula Valley.

Star of India

The tall ships aren’t really coming to Temecula, but they will be in San Diego for a five day nautical festival featuring more than 20 tall ships from around the world The festival begins on Thursday with the Parade of Sail when the 20 tall ships will pass Harbor Island, Shelter Island, Seaport Village, and the Coronado Bridge and then moor at the Maritime Museums dock.

Visitors will be able to ride the tall ships when they set sail each day and participate in the mock cannon battles.

Tall Ships mock cannon battles

The Maritime Museum announced that the Festival of Sail will now return yearly on Labor Day weekend.

For more information check out the maritime museums website

http://www.sdmaritime.org/

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The "Lights" are going out on the Dos Lagos summer concert series.

August has been a great month to take in an outdoor concert at Dos Lagos. The Promenade at Dos Lagos is an outdoor mall about 30 minutes north of Temecula and every Saturday in August we’ve been able to enjoy an outdoor concert featuring tribute bands. We’ve seen Queen tribute band “Queen Nation”. Week 2 was the Eagles tribute band “Desperado”. We missed the Police tribute band but tonight we’re heading up to Dos Lagos to hear the Journey tribute band “Lights” for the final Saturday night concert of the summer.

The concert starts at 7:00, but to get a good view you should plan on bringing your chairs or blankets and setting up by at least 6:15.

Hope to see you there!

Temecula Things to do-Old Town Temecula-Hot Summer Nights

It’s Friday, it’s still summer and there’s still a lot of free entertainment in Old Town Temecula. As is the tradition, every Friday night in August you can find music, wine tasting, great places to eat, as well as some entertainment for the kids.

It’s Hot Summer Nights in Old Town Temecula.

Hot Summer Nights at the Bank

Here’s the lineup for tonight:

Valley Winds @ Tesoro (Front St/Sixth St)
Dejay/Kids games (Front St/Fourth St)
Up Stream @ Baily’s Courtyard (Front St/Second St)
Safety Orange @ Rosa’s Cantina (corner of Front/Maint St)
Guilty Conscience @ Sweet Lumpy’s (Mercedes St/Third St)
Dynamite Dave (Front St/Main St)
Nitro Express @ Temecula Cheese Co (west side of Front/Fifth St)

This is the next to last weekend for Hot Summer Nights, the weather is cooling down nicely. So grab the family and head on out.

Hot Summer Nights in Temecula

Without fail, you will find some restored hot rods from the 30s, 40s and 50s. Look for them parked around the Swing Inn Cafe

In Bail’s Courtyard you can enjoy the music and dinner and drinks for a fun date night.

Hope to see you there!

Buying investment property-a foolproof plan?

Buying investment property in Temecula

You’ve done it!
Home prices in Temecula, Murrieta and other parts of Riverside and San Diego County are their most affordable in a decade. Interest rates are the lowest ever,.It looks like the stars are finally in alignment and it’s the right time to buy that investment property you’ve been considering for months.
Buy an investment property in this market, are you nuts?
As you formulate your “master plan” your research tells you that the combination of low prices and interest rates will give you a positive cash flow and a return on investment far greater than anything a bank might be offering.
But you’re wondering how you might make it even more lucrative. You’ve checked every lender website and found that the interest rate for a mortgage on an investment property is higher than it would be if it was owner occupied.
“If tell my lender that I’m going to live in the property that would give me a lower interest rate and I wouldn’t have to make that 20% down payment, which means I might be able to buy a second investment property with the money I saved”.
You discussed this “plan” with your neighbor and brother-in-law, who said “no problem” they knew lots of people who did that.
Great Plan?  A plan like this is not a great plan, in fact it’s more like a scheme or scam. The execution of this plan is a violation of federal law and that means a fine AND jail time, This is occupancy fraud, pure and simple.
Any idea, who investigates mortgage fraud? It’s the FBI and I’ve heard they’re really good at what they do.
Despite everything that has happened and is happening in the real estate market, this is a scenario that continues to play out daily, and lenders know that some people are still trying to buy a home this way.
In today’s market these “master plans” will never withstand the scrutiny that lenders are now giving every loan file. They will examine everything from the size of the new house as it compares to the current one, the increase in commuting time, the motivation of the buyer etc.
If the buyer already owns rental property, chances have now dropped to ZERO this attempt will be successful.
Does that mean there aren’t legitimate reasons to buy another home as owner occupied and keep your current home as a rental? By no means, but that’s a discussion for another time and it won’t involve committing a felony.

For more information on buying investment property, contact us

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New Homes in Temecula-Arroyo @ Paseo del Sol

Things are beginning to take shape at the new Lennar Homes Community of Arroyo @ Paseo del Sol. The entrance monuments are located immediately across from Temecula Middle School and adjacent to Meadows Park.

Arroyo @ Paseo del Sol

The park has the usual playground equipment and most weekends there are at least 2 or 3 kids parties. There is also a wide open grassy area for the kids to burn off some of that sugar from the birthday cakes and ice cream.

Arroyo @ Paseo del Sol overlooks Meadows Park

It’s too early to make out the lot configurations but right now it looks like some of the lots will overlook Meadows Park.

There are only 73 projected lots at Arroyo @ Paseo del Sol and it looks like most of them will be in very easy walking distance to Temecula Middle School. Like most schools in Temecula the lines of cars at drop off and pick up can be long, so being just a short walk away is not only time saving but also the chance to fit in a short walk twice a day.

Still don’t have prices or more information on Arroyo @ Paseo del Sol, but bookmark the page and check back in we’ll keep you posted.

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

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New Homes in Temecula-Manzanita @ Paseo del Sol

The new KB Home Community, Manzanita @ Paseo del Sol is progressing (according to schedule I hope). On August 19th the public hearing was held and because work is continuing we have to assume the City of Temecula approved their changes.

Manzanita @ Paseo del Sol

This picture was taken from Butterfield Stage Road looking south toward Pechanga Resort and Casino.

It’s a little too early to tell how the lots will be configured, but right now it looks like some of the lots will have some very good views of the southern part of the valley.

Manzanita @ Paseo del Sol promises to be a very attractive community for homebuyers in Temecula. The new homes will be just a short walk to Temecula Middle School and Meadows Park.

If you think that Manzanita @ Paseo del Sol might fit your image of a dream home, bookmark this page and look for more updates as construction continues.

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

Check us out on Facebook Temecula 365 Things to Do

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Buy an investment property in this market, are you nuts?

Real estate investors have to feel like the “red headed step-child” in the Temecula Real Estate Market when it comes to getting  quality information in this constantly changing environment.

Buy investment property?

Almost every news article and blog is about helping distressed homeonwers and first time home buyers, but real estate investors are left mostly to fend for themselves.
Whether you just starting out or are an experienced investor there is tremendous opportunty waiting for you but knowing the new rules is critical to your success.
Unless you’re paying cash, you’re going to need financing and the easiest path to loan approval is to understand the new rules and work within their framework. Lender guidelines are pretty straightforward but there are exceptions (they might be called overlays or loan level pricing adjustments) but the result is the same, it will affect the cost of your loan.

  • Minimum down payment for an investment property is 20% (almost impossible to get MI with less down payment). If you’re able to put 25-30% down you will can save thousands of dollars in loan costs.
  • The minimum credit score is 620, however it get pricey at that level. A credit score of 740 or higher has no pricing adjustments.
  • Cash reserves – All the required cash for closing plus reserves of at least 6 months have to be in your account for two months before you apply. Some lenders may go farther back and if you have multiple properties, require six months for each property you already own.
  • We all know stated income loans are dead and that is especially true of loans for investment properties so be prepared to provide two full years of tax returns including all schedules. The good news is a lender will let you use 75% of the projected rents to offset your new mortgage payment for qualifying purposes.
  • If you own multiple properties, many lenders will limit the number of financed properties to 4, although some will allow as many as 10.

If you’re a real estate investor looking to take advantage of this “perfect storm” of low prices and low interest rates, you will need an experienced Realtor and Lender who understand today’s market to guide you through.

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Is your loan "qualified"?

First Time Home Buyer Loans

First time home buyers are a huge part of the real estate market in Temecula, Murrieta and other portions of Riverside and San Diego Counties. Interest rates have never, ever been lower than they are today.

Well, in medieval times maybe, but not in recent history. The drop in prices for homes in Temecula and Murrieta coupled with these low interest rates has put home affordability at an all time.
For more information on first time home buyer loans in Temecula
Buying your first home is not a matter to be taken lightly and as a result Congress has recently passed the Wall Street Reform and Consumer Protection Act. One very important part of this legislation is the establishment of two mortgage loan categories.
There are now “qualified” mortgages and “unqualified” mortgages. Understanding the difference is essential to being a smart consumer. It’s also a great way to judge the professionalism of your lender and Realtor. If they can’t explain the difference it could be an indicator they aren’t as up to date as they need to be in this market.
To be a “qualified” mortgage the residential loan must meet certain standards.

  • Negative amortization is not allowed
  • Balloon payments are not allowed
  • Prepayment penalties are allowed, but limited with the amount of the penalty reducing each year for three years
  • The lender must verify income and employment information (bye bye stated income)

For more information on what a lender looks for in a first time home buyer loan application and first time home buyer loan applications
Most first time home buyer loan programs were “qualified” even before the legislation but this will effectively end subprime lending and some of the “bait and switch” tactics that popped up during the last real estate cycle.
For “unqualified” mortgages, lenders have to set aside 5% of the loan amount in reserve (which will eliminate the small mortgage broker and lender from offering these loans). Prepayment penalties are also banned from “unqualified” mortgages.
Here’s the “big bullet” in the first time home buyer arsenal. Lenders and mortgage brokers who don’t comply with new standards will be held accountable by consumers for as much as three years of interest payments PLUS damages PLUS attorney fees.
There are also new rules which will protect borrowers against foreclosure when there are certain violations of these standards.
Downside to all this is, lenders are going to examine each loan application more closely and ask for more documentation but in the end “qualified” first time home buyers will have a home they can afford and barring major financial setbacks enjoy for many years to come.

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

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New Homes in Temecula-Arroyo @ Paseo del Sol

Temecula homes for sale will soon have a new subdivision from which Temecula first time home buyers can choose. Lennar Homes has broken ground on a new subdivision, Arroyo @ Paseo del Sol.

A public hearing is scheduled for, Thursday August 12. The public hearing will be to determine how the proposed subdivision and the houses they plan to build fit in with the master plan at Paseo del Sol.

Temecula Homes for Sale Arroyo @ Paseo del Sol

According to Lennar’s website there will be 73 homes ranging from 2129 to 2860 square feet with 3 to 5 bedrooms.

They haven’t published prices yet so bookmark this page we’ll keep you posted on the progress.

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

Check us out on Facebook Temecula 365 Things to Do

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New Homes in Temecula-Manzanita @ Paseo del Sol

First time home buyers in Temecula will soon have new homes to choose from as construction has begun on the new KB Home Community Manzanita @ Paseo del Sol.

Temecula Homes for Sale Manzanita @ Paseo del Sol

They’ve just started moving dirt around so it will be a while before they begin construction of the models at Manzanita.

There will be 4 models ranging from 1538 to 2233 square feet, with 3 to 5 bedrooms and 2 to 2.5 bathrooms.

It’s still a little early for prices, but if you bookmark this page, we’ll keep you posted on the progress.

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

Check us out on Facebook Temecula 365 Things to Do

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First Time Home Buyers-What your bank won't tell you about your credit

What your bank won't tell you about your credit

First time home buyers  are finding out that having good credit is an important first step in the home buying process.
If you’re a  home buyer knowing your credit score is just the beginning.

Knowing how to raise your score and maintaining it are essential in making that big step from home buyer to homeowner.
Lenders are going to lend you hundreds of thousands of dollars and are going to examine all areas of your financial picture, so they can determine your ability and willingness to pay them back.

Knowing some of their insider secrets, can help you become an educated home buyer and avoid a lot of the turbulence that many experience.


First Time Home Buyer Loans – Part 1 Credit History
First Time Home Buyer Loans – Part 2  Property
First Time Home Buyer Loans – Part 3  Income
First Time Home Buyer Loans – Part 4  Assets
When your lender reviews your financial picture, it’s referred to as underwriting and underwriting is getting tougher. For some updates:
Temecula First Time Home Buyers should wear clean underwear.

Knowing and understanding how your credit score is calculated and what you can do to raise your score and maintain a score that will qualify you for your first time home loan is an important first step on the path to homeownership.

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

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Temecula Real Estate - Fannie Mae offers more help for struggling Temecula homeowners

Help for Temecula Homeowners

Homeowners in Temecula, Murrieta and other parts of Riverside and San Diego Counties now have an online resource to help them with the difficult questions when they are struggling with their house payments.
Whether you want to keep your home or just get out from under your toxic debt, Fannie Mae’s new interactive website KnowYourOptions can help you with the latest and best information and guidance all in one place.
For homeowners who are having trouble paying their mortgage, but want to keep their homes and can likely maintain payments, KnowYourOptions.com provides information on refinancing, repayment plans, forbearance, modifications, and Fannie Mae’s Deed-for-Lease program.
Those homeowners who recognize that they can no longer afford their mortgages, but want to avoid having a foreclosure on their credit history, can find information on alternative options, such as short sales and deeds-in-lieu, including how to successfully execute these complicated transactions – what to do, what not to do, and how not to get scammed.
To read the complete article

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Do you know what your landlord is doing with your rent money?

Even renters are being affected by the downturn of the housing market in Temecula, Murrieta and other parts of Riverside and San Diego Counties. In increasing numbers renters are being evicted from their homes through no fault of their own.
These renters paid the required deposits, made their rent and utility payments on time, maintained the property (sometimes even improved it) and yet are being served eviction notices.
Homeowners who can’t continue to make their payments, are becoming “reluctant landlords” and renting their homes in an effort to avoid foreclosure. While good in theory it seldom works because they can’t rent their home to cover the mortgage payment and this “negative cash flow” along with their new housing expense usually puts them in a worse financial position. They stop making their mortgage payments and keep collecting the rent. So they’ve created a “cash cow” that will last until the bank forecloses and evicts the tenant, in today’s market the average time is 22 months.
If you are a tenant who has put their homebuying efforts on hold, there are things you can do to protect yourself.
Here are a few:
1. If you’re renting a home from a private party and start to receive certified letters addressed to the owner at your address, don’t ignore them your landlord has probably quit making his house payments.
2.You’ll probably receive more than one if your landlord has quit making their payments. Usually it will be one a month, for each month missed until the bank files its NOD (Notice of Default). If you get one letter and they stop, chances are the landlord caught up on his payments, if they continue it’s time to CYA (Cover Your Asset).
3.Your next step should be to contact a local Realtor and ask them if they will check public records for your property address and see if a Notice of Default or Notice of Trustee’s Sale has been filed. Relax, you’re not invading your landlord’s privacy, ths information is public record and available to anyone who requests it, and the service is usually free.
4. If your first check of public records doesn’t uncover anything, you have to remain vigilant.  If the certified letters continue to be delivered. It’s only a matter of time before the notices are filed, which means foreclosure proceedings are in full swing.
5. I’m going to preface this next strategy with the  disclaimer that I’m not giving legal advice and you should consult with an attorney who specializes in this.

Most county BAR Associations have a low cost legal referral organization you can speak with.

Depending on the type of loan your landlord has the chances are pretty good that their is an “assignment of rents” clause in his deed of trust. Assignment of rents means that in the event the borrower (your landlord) defaults on his payments the lender is entitled to the rents and your landlord may not be.
This also doesn’t mean that you are getting a free pass on the rent. Put the money in savings, because the lender may ask for it (they almost never do). If they don’t you may have saved a portion of your down payment so you can make the move from tenant to homeowner.
6. If your local area has a lot foreclosures and you’ve decided to move up from renting an apartment to renting a home, you should repeat #3 for every house your considering.
This problem is reaching epidemic proportion and even the Center for Disease Control hasn’t found a way to control the outbreak, so it’s up to you to do your due diligence. As they say, an ounce of prevention is worth a pound of cure.

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

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A video all first time home buyers should watch!

Sure it’s a commercial for Lowes, but it’s funny.

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

Check us out on Facebook Temecula 365 Things to Do

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Temecula Real Estate - Will bankruptcy save your house from foreclosure?

Millions of homeowners across the nation are staring foreclosure in the face and wondering if anything can be done. According to the most recent government figures, there will be more than 1.7 million foreclosures in the next twelve months.
Will bankruptcy save your home from foreclosure?
“Do you want it to?” Bankruptcy filings this year are expected to exceed 1.5 million, so it’s easy to see that many homeowners are considering bankruptcy as an option to stop foreclosure.

But is it the right decision for you?

If you’ve already “thrown in the towel” and decided you don’t want to keep your home, then bankruptcy may not be the answer. If you’ve lost your job and can’t continue to make any payment, then bankruptcy is not going to save your house from foreclosure.
On the other hand, if you are willing to put up a fight and do the things necessary to keep the family home, then bankruptcy may work for you. If you still have ongoing sources of income, but the weight of all your debts has created this burden, then bankruptcy may be just what you need to keep your home.
Here’s the requisite disclosure, I’m not an attorney and am not giving legal advice. You should consult with a qualified bankruptcy attorney and get all your options spelled out.

CNNMoney addressed this today. To read the complete article
When you file bankruptcy all of your creditors are notified and are required to cease all debt collection efforts. This in and of itself can be a tremendous relief and give you a chance to get your thoughts and strategies in order.
For the average individual, there are two options in bankruptcy: Chapter 7 or Chapter 13.
Chapter 7 is a liquidation of all assets (certain personal assets are exempt) and won’t prevent foreclosure. Because your home loan is secured by the mortgage or deed of trust, your lender is considered a “secured creditor” and is exempt because they are entitled to the asset in the event you default. If eliminating all your non-secured debt puts you in a position to continue to make your house payments, you and your bankruptcy attorney may be able to work out a “deal” with your lender to make up the back payments and keep your home.
Chapter 13 or “wage earner plan” is generally a better option if you have an ongoing source of income but are overwhelmed by the total of the payments as they are today. The bankruptcy trustee will create an income based repayment plan and you will make one payment to the trustee who will distribute the money according to the plan.
The trustee may even require a “strip down” of your home equity line of credit to the extent it exceeds the value of your home.
Bankruptcy is a very personal decision and what might have been right for your friend or neighbor may not be right for you.

Your credit score is going to take a major hit when you file bankruptcy, but it’s already taking major “body blows” from the late payments. After your bankruptcy has been discharged you can start to work on re-establishing and repairing your credit.

Even though your bankruptcy will appear on your credit for 10 years, you may be able to get back to homeownership in as little as two years.
If you’re unsure if bankruptcy, either Chapter 7 or Chapter 13 is right for you, most local BAR associations have a legal referral service, where you can get a low cost initial interview with a bankruptcy specialist who can help you decide. You can also Google “bankruptcy specialist” for your area and view thousands of entries before you decide.

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10 Rules for dealing with collection agencies

Whether you are a first time home buyer in the Temecula real estate market, or Murrieta or other parts of Riverside or San Diego Counties, or a homeowner trying to stay afloat, chances are one or more of your bills have been turned over to a collection agency.

It’s difficult for most folks to find money these days, and collection agencies are getting desperate, sometimes downright nasty in their attempts to collect outstanding debt.

Here are 10 tips to help you deal with collection agents.
1. Realize that Credit collection agents are usually working on commissions. This is a JOB to them and the more they get you to pay, the larger their paycheck. They will be persistent, so be prepared.
2. Don’t argue with the agent, because you will lose. This is what they do all day, every day and they have heard every excuse in the book. They are prepared with an answer to everything. State your case but don’t argue.
3. It usually doesn’t help to ask to speak to someone’s boss. In this case, talking to the supervisor normally won’t help (in fact it could be worse). Remember, he ended up with his job because he was good at what he did and was able to squeeze every dime out of past consumers who had disputes.
4. Never give information out over the telephone to a collection agency. This includes your driver’s license number, social security number, debit card numbers, check numbers, credit card numbers, or bank account numbers. They should already have this information.
5. Use a money order or certified funds to make all payments. Make a copy of it and staple it to the bill.
6. Keep records of everything (including dates of phone calls and what was said), and make sure that anything sent through the mail has a return receipt.
7. Make sure you get written confirmation of any deals or negotiated payoffs. Make sure you have something that says the collection has been satisfied.
8. Never take their first offer when negotiating a lower payment as they will always call back with a better offer.
9. Use powerful sentences like, “This is all I can afford to pay,” rather than “this is all I am going to pay.” This is a much better negotiation tactic when you are trying to lower the payoff with the collection agent.
10. When repairing your credit, it is a good rule to keep copies of all your credit reports. That way you can track the process of what has been repaired and make sure that what you negotiated is coming to pass.
Contacting you through your online social network is a completely legitimate collection tactic so long as collectors go about it the right way.
According to FTC Commissioner Julie Brill, “What they can’t do is they can’t start contacting you and friending you unless they tell you they are a debt collector.”
To read the complete CNNMoney article
While it would be impossible to include everything there is to know about dealing with collection agents, these 10 tips will almost always result in more money in your pocket and less in theirs.

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

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Important information for homeowners trying to stop foreclosure

Stop Foreclosure Temecula

If you’re a homeowner in the Temecula real estate market or Murrieta real estate market or other real estate markets in Riverside and San Diego Counties, don’t ignore your homeowner’s association.

There is a growing trend of homeowner’s associations swooping in and foreclosing ahead of the banks. The result is homes are being sold for pennies on the dollar.

There are reports of homeowners receiving foreclosure notices while they are in the process of a HAMP loan modification or a HAFA approved short sale. According to the paperwork you signed when you bought your home, the homeowner’s association has the right to foreclose if you quit paying your HOA dues, however many homeowners are ignoring the notices from the HOAs , when just a few hundred dollars will usually keep that wolf from your door.

If you are a homeowner, facing foreclosure and your goal is to keep your home, the simple solution is continue to pay your HOA dues even though you can no longer make your mortgage payment. If you think a short sale is the best solution for you, continuing to pay your HOA will facilitate the short sale. Many short sale transactions have fallen apart at the last minute because of the unpaid HOA dues and the other parties to the transaction were unable or unwilling to make up the difference.

If you’re a homeowner facing foreclosure and would like a free consultation on your options, contact us

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First Time Home Buyer loans-you should wear clean underwear!

When I was much younger, my mother would always warn me to wear clean underwear in case I was in an accident. She didn’t want any son of hers to be taken to the hospital wearing dirty underwear.
First time homebuyers in Temecula, Murrieta and other areas of Riverside and San Diego County who are beginning their home search, would be advised to check their Jockeys, Fruit of the Looms and Hanes before they begin the search for their first home.
Why?

Well, the fallout from the housing bubble is that the lender for your first time home loan is going to examine your financial qualifications all the way down to your “tighty whiteys”, boxer briefs, thongs and bikinis.

Remember those tags that said, “inspected by number 86 don’t remove under penalty of law”?. Well inspector 86 is probably employed by your lender.

Your loan application is going to undergo a similar inspection and lenders are reaching into areas never examined so thoroughly.
I’m not saying you can’t get a loan for your first time home, I’m advising that you need to know the rules upfront and be prepared to comply.
I did a series of posts on “What a lender looks for in a loan application”, in those posts I broke down the four areas a lender examines when determining your qualifications.
Since I posted that information, there have been changes you should know, so you can prepare.
Credit History – If your credit score is not at least 620, your time will be better spent fixing your credit than house hunting. If your score is less than 620, the interest rates and costs will be higher. Most loan programs have credit score minimums and even if you have the minimum score, you have to be diligent to make sure it remains there. Your lender will now run a new credit report, prior to funding your loan and if you’ve been busy furnishing your new home on credit, it would be wise to check the return policy, because if your score has dropped below the minimum, your first time home loan could disappear.
Asset – This is the lender’s analysis of the property you are buying, and appraisals are being reviewed more closely. Appraiser’s are required to insure that all systems are operating correctly before your loan can close, so if the utilities are not turned on when they do their inspection, a re-inspection will be required ($$$) and then if something needs to be fixed prior to closing it will have to be reinspected again ($$$). In a foreclosure dominated market very few banks will make the required repairs so make sure you consult with your real estate professional on how these will get taken care of and paid for.
Income – When a lender evaluates your income they are going to ask you to sign a IRS Form 4506T, which will allow them to verify that the tax returns you provided are the same as the ones you filed. For most first timehome buyers, this doesn’t present a problem, but if you have filed for an extension, your most recent years returns won’t be on file, so be prepared to give the third year (2007 if you haven’t filed 2009s). Lenders will also take the most conservative calculation of your income, if you have overtime, bonus or commission income, it’s going to be averaged over at least two years and if it lacks consistency and your employer won’t verify that it’s likely to continue, it probably won’t be used which could affect the monthly payment you qualify for.
Reserves – This is your “skin in the game” or how much of your own money you will be contributing to the transaction. Normally, a lender will want to see your most recent two months bank statements to verify that you have the requisite “skin”, they’re also going to look at your deposits and most lenders are now requiring you verify all deposits that aren’t the direct deposit  of your paycheck. If you’re getting a gift from the “bank of mom and dad” they will be required to provide copies of their bank statements along with the gift letter, so the lender knows they have the “ability to give”. Some lenders are even questioning large deposits in their account. My advice here is to consult with a first time home buyer specialist, find out how much it will take to close (ALWAYS, overestimate), make sure you have that much available and leave the account untouched.
Buying your first home is an obtainable part of the “American Dream” but you have to:

1) Know the rules in advance

2) Get your financial house in order BEFORE you start looking

3) Make sure your represented by real estate and mortgage professionals who understand the rules and can guide you through to a successful closing.

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

Check us out on Facebook Temecula 365 Things to Do

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First Time Home Buyer Loans-Part 4

Your skin in the game

If you’re a first time home buyer, financing is one of the most important pieces of the first time home puzzle. For a lender to get a complete picture of your financial situation they will evaluate four areas in your financial picture.
Like the four legs of a chair, the four pillars of a loan application are mutually supportive, and require each to carry its own weight.
Previously we’ve discussed:
Credit History
Asset
Income
The fourth and final leg of the loan application chair is Reserves. The new catch phrase for Reserves, is your “skin in the game” and it refers to how much of your money you are bringing to the closing table.

It’s been a long held tenant of loan underwriting, that the more “skin in the game” you have the less likely you will be to default on your mortgage payments.

A lender also wants to know that you have some “skin” left over after closing.

Here are a few things you should know about Reserves:

  • Funds required to close a real estate transaction fall into three categories: Down Payment, Closing Costs and Impounds (reserves for taxes and insurance). The more of these that can be paid from your “skin”, demonstrates to the lender that you have an “ability to save” and that makes them feel much better.
  • How much  “skin” you have in the game has a direct bearing on how much flexibility a lender has on your debt-to-income ratios (See Income). If your rent payment is lower than your new house payment, an ability to save indicates to a lender you will be able to continue to make your house payment, if some unexpected “life event” happens.
  • No matter how much it might get “glossed over”, homeownership costs more than renting.(Read “Test Drive before you buy) and having little to nothing in the bank after closing leaves you vulnerable financially if something unexpected occurs.
  • Most loan programs, allow gift funds from a relative and these funds can be all or part of your cost to close, and thousands of first time home buyers have used the “Bank of Mom and Dad” to purchase their first home. If a gift is in your homebuying future, make sure you consult with your lender on how and when to transfer the money. Your lender will require a “paper trail” for all funds that show up on your bank statements., so trust what your lender has to say.

Your first time home loan, is the most important financial decision you will make in your life. It sets the table for your financial future.
Getting the right first time home buyer loan at a competitive interest rate is less expensive than the wrong loan at the lowest interest rate.
It’s too important…Do it right!

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

Check us out on Facebook Temecula 365 Things to Do

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Bargains for first time home buyers

Temecula foreclosures are bargains

The real estate markets in Temecula, Murrieta, Riverside, San Diego, and other parts of Riverside and San Diego county are offering outstanding bargains for first time home buyers. That’s not really a “news flash” but Southern California historically has ranked among the least affordable markets in the country, but according to the NAR that’s changing but maybe not for long.

According to the NAR (National Association of Realtors) affordability in Temecula, Murrieta and other portions of Riverside County actually exceeds the national average, which is a complete 180 degree turn from just three years ago.Here’s some very interesting data  to consider when buying your first home

Home Prices

Riverside Real Estate Market

Are they affordable?

Temecula Real Estate is affordable

Are Foreclosures the best deal?

According to a new report from RealtyTrac, the marketer of foreclosed properties, 31% of all sales were foreclosures. And homebuyers purchasing those properties paid a whopping 27% less, on average, compared to sales of non-distressed homes.

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

Check us out on Facebook Temecula 365 Things to Do

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First Time Home Buyer Loans-Part 2

Asset = Home you are buying

Buying your first home can be a very exciting experience. It can also be a frustrating one if you don’t have all the information necessary to make the journey a smooth one.
Unless you’re paying cash, you will be asking a mortgage company or bank to lend you a lot of money. It should be pretty obvious that the lender wants to make sure you will repay them so they are going to carefully examine your current financial situation to determine if you can and will pay them back.
The four area lender reviews are:
Credit History
Asset
Income
Reserves
In part two, we are going discuss the Asset or the property you will be buying.
Mortgage lending is all about “risk analysis”:
What’s the likelihood you will pay back the loan and if you don’t what will the lender have when they get the property back?

In the last real estate cycle, lenders made a lot of decisions based on the false notion that property values wouldn’t go down and that if the borrower didn’t make their payments, they would get the property back and be able to resell it for at least what they were owed.
Well we know how that worked out and so do the lenders, as a result they are looking much closer at the property (the security).
Lenders have learned that certain types of properties are riskier investments and as a result make it more difficult for first time homebuyers to purchase these types of homes.
In a lender’s eye the riskiest property types are Condos/Co-ops and manufactured homes.
If you’ve decided that a condo is the right first time home for you, the lender is going to require that the condo project be approved (most often by FHA and Fannie Mae). They will also, ask for detailed financial information from the Homeowner’s Association.
If a project is in trouble, the warning signs are the number of homeowners who are delinquent on their homeowner’s dues, the number of tenants in the project (if the tenants outnumber the owner occupants it’s really just an apartment complex). Homeowner’s associations are required to set aside reserves for future projects and maintenance, if they are tapping into the reserves it’s a rob “Peter to pay Paul” situation and the financial health is definitely in question.
If the condo project is in trouble, chances are your lender won’t lend in the project, so unless you can come up with a huge downpayment, it’s time to move on.
The second type of property that really makes lenders nervous is manufactured homes. Manufactured homes, not to be confused with modular homes, must be a double wide on a permanent foundation, be taxed as real estate, and built in 1986 or newer. If it doesn’t meet all those conditions, the lender is not going to take the risk.
There used to be a lot of lenders who specialized in manufactured homes but most are gone because the default rate is significantly higher than the market average and lenders today don’t want to repeat the same mistakes.
Lenders will determine the value of your first home through the use of an appraisal which will determine the “market value” of the property.
I know some real estate purists will tell you the “market value” is what a ready willing and able buyer will pay and what a ready willing and able seller will accept. In Camelot perhaps, but if you need financing it’s what the appraiser says it is.
Of course you can pay more if you want, but it will require a bigger down payment and you will be “upside down” the day you move in.
Lenders are also concerned with the condition of the home you are buying, not only for their protection but for yours as well. As part of the appraisal process, the lender will require that all “health and safety” items noted in the appraisal be fixed before they will allow a closing.
If your dream home is in shambles, but in in the perfect location, you might consider the FHA 203k rehab loan. This program allows you to purchase the home, include the cost of rehab in your new loan and then start the fix-up after closing. Simple in theory, a little more difficult in execution. Make sure you select a lender with extensive experience with this program before you travel down this path to homeownership.
Next article – Income or “how are you going to pay for this house?”

To review Credit History

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

Check us out on Facebook Temecula 365 Things to Do

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First Time Home Buyer Loans-Part 3

Income = can you repay your home loan?

Part 3 is going to focus on the third leg of the first time home buyer loan application 

Income is how the lender determines your ability to repay.
If you’ve been using one of the myriad of “how much do I qualify for?” applications on many lender’s websites, you’re probably getting misled by the results.
Why? Because unless you have lending experience, you probably aren’t calculating your income the same as a lender would. The exception being, if you are salaried and each paycheck is exactly the same.
If your salary is based on an annual figure, divide by 12 and go, otherwise it’s going take someone with lending experience to accurately calculate the number a lender will consider.
This article isn’t intended to teach you how to calculate income, but rather to better understand some general rules that lenders follow when determining which income can be included in the calculation and then how much they will use.
Lending rule #1 - If it’s not on your tax returns you can’t use it. Any income you have that is not reported to the IRS won’t be considered for loan qualification purposes. Stated income loans, like 8 track tapes and Oldsmobiles are things of the past, so undeclared tips, income from side jobs, your brother-in-law paying you back the bail money you lent him won’t be considered.
If you are self-employed or have un-reimbursed employee business expenses (Form 2106) your lender will use the income AFTER these deductions are taken.
The housing meltdown has created an alliance of sorts between lenders and the IRS. When you apply for your home loan, the lender is going to require you to sign IRS Form 4506T. This form allows the lender to verify that the tax returns you provided are the same ones you filed. Any discrepancies will result in a denial of your loan application and a good chance the IRS will come knocking for the difference. We had a client who provided us tax returns showing income of $400,000 a year but filed returns showing $40,000. Needless to say his loan was declined and last we heard the IRS was looking for its share of $360,000.
Lending rule #2 – You must have a two year employment history (usually in the same line of work). Lenders are looking for consistency of income and job hopping in and out of various unrelated fields doesn’t make them “warm and fuzzy” about your ability to repay. Changing jobs in the same career path, especially when accompanied by increases in pay, isn’t necessarily a deal breaker, but be prepared to explain the dates and reasons for leaving.
Lending rule #3 – If you have “discretionary income”, that is income over and above your regular base pay, i.e. overtime, bonus, or commission, you will have to verify a history (usually two years) and a likelihood it will continue. If you have child and/or spousal support and want to include it in your income, make sure to let the lender know. These too will be subject to verification that they have been received consistently in accordance with the divorce decree.
Lending rule #4 – To maximize its chance of being repaid a lender is going to not only analyze your income but also make sure that you are not spending a disproportionate share of your income on your housing and credit debt. This relates to your payment-to-income ratio (top) and total debt-to-income ratio (bottom). Good “rules of thumb” are that your  payment-to-income ratio should not exceed 33% of your gross monthly income and the total debt-to-income ratio should not exceed 45%.
Buying your first home is really just answering to basic questions: 1) What do you want to buy?
2) How are you going to pay for it?  The answer to question 2 will also give you the answer to question 1.
Next article – Reserves or “your skin in the game”

To review Credit History

To review Asset

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

Check us out on Facebook Temecula 365 Things to Do

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Temecula Real Estate - $700 million to help California Homeowners

In what has to be good news for distressed homeowners in California the Department of the Treasury has approved a $700 million funding to help California homeowners avoid foreclosure.
The program will be administered by the California Housing Finance Agency (CalHFA) as part of its Keep Your Home Program.

Help for California Homeowners

There are four assistance initiatives all of which should be open by November 1.

  • Help for homeowners who are unemployed and in danger of defaulting on their loans
  • Help for homeowners who are behind on their payments but could catch up with a little help.
  • Help for homeowners in the form of principal reductions who need it to avoid foreclosure.
  • Help for homeowners in the form of transition assistance (“cash for keys”) for those who cannot afford to keep their homes.

The Keep Your Home Program is funded through the use of TARP (Troubled Asset Relief Program) funds.
For more information: Keep Your Home California
For more information on the counseling requirements: Keep Your Home California Counseling

To read the complete article from the June 24th Californian

If you’re a homeowner who is in danger of losing their home or you know someone who is, the most important step is to call your mortgage company now!
“”We also recommend that if homeowners are currently having financial difficulties, they do not wait for these programs to be offered,” said Evan Gerberding, a spokeswoman for the agency. “They should contact lenders and see a HUD (Department of Housing and Urban Development) approved counselor.”
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First Time Home Buyer Loans-Part 1

First Time Home Buyer loans-credit history

Buying your first home can be a very exciting experience. It can also be a frustrating one if you don’t have all the information necessary to make the journey a smooth one.
Unless you’re paying cash, you will be asking a mortgage company or bank to lend you money to finance the purchase. The lender wants to lend you the money, that’s how they stay in business but they also want to make sure you will repay them so they are going to carefully examine your current financial situation to determine if you can and will pay them back.

In an effort to clear up some of the misconceptions about the lending process, this is the first of four articles on what lenders look for in a loan application. I’ll try not to be over technical and load the articles with “mortgagese”.
Broken down to its most basic elements, mortgage companies try to determine if you have the ability and willingness to repay the thousands of dollars they will be lending you. They will make this determination by reviewing your current financial situation as well as analyzing how you handle your other credit obligations.
The four areas your lender will be reviewing are:
Credit History
Asset
Income
Reserves
If you can picture a chair around your dining table. It likely has four legs and it takes all four legs to be a chair that you would feel safe sitting on.
You loan application is very much the same, each leg of the chair must be able to carry it’s share of the weight, so the chair won’t collapse.
The current mortgage meltdown has caused lenders to use a little “extra glue” to make the chair sturdier these days. So it’s important that you know how to build your chair the right way, so it will hold up for 30 years.

The first leg of the CH-A-I-R is Credit History. To put it simply a lender is going to evaluate your “willingness to repay” by how you have managed the other areas of your credit.
I’ve heard so many times “But I have good credit!” You can’t sit in a chair that only has one leg, so even if a lender is confident you’re willing to pay them back, if you lack the ability (employment history or lack of a down payment) you’re not likely to be approved for your first time home loan.
Credit History is more than the number of your FICO score. Lenders try to determine your willingness to repay based on how you have handled your credit over time. A lender is going to be most concerned with you most recent two year history. Even if you had a few rough spots in the past you may still qualify if you have righted the ship and the most two years demonstrate a good history.
Creditors, some more than others, are more concerned with getting their money than they are correctly reporting, so if you have items on your credit that are legitimately being reported incorrectly, work on getting them fixed BEFORE you decide to buy your first home. If you’re willing to put in the time and effort, you can get the corrections made yourself. If not there are companies that will do it for a fee. But be careful, many of the fixes they promise may never happen or are only temporary and will reappear 30 days later.
Next article: Asset-the property

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

Check us out on Facebook Temecula 365 Things to Do

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First time home buyer tax credit disappearing

CA first time home buyer tax credit

If you’re a first time home buyer in Temecula, Murrieta or other portions of Riverside  and San Diego County and unless you’ve taken up residence in a cave, you know the federal first time home buyer tax credit expired on April 30 and that the State of California’s first time home buyer tax credit started on May 1.

There are two tax credits available from the State of California, one for new home purchasers and the other for first time home buyers. Unlike the federal first time home buyer tax credit, funds for the state credit are limited to the first $100 million.For information on how the California First Time Homebuyer Tax Credit is calculated

According to figures recently released by the Franchise Tax Board 57% of the total allocation has been used in the first month. Predictions are that funds will be exhausted by the end of June.

Here are the latest information from the Franchise Tax Board:

Estimated applications received for First-Time Buyer Credit as of 05/25/10 (Updated 05/27/10)

The figures shown below are only estimates, based on small samples. The numbers are overstated as there will be duplicate, revised, and invalid applications included as we have not verified any of the applications. These estimates are only provided to give a general idea of the number of applications received and the amount requested for the First-Time Buyer Credit. We are showing 57% of the estimated requested credit since the $100 million cap will only be reduced by 57% of the credit allocated to the buyer. The amounts do not reflect actual amounts which will be allocated. These estimates will be updated each Thursday until we are sure that we have received more than enough applications to allocate the full $100 million. Once we determine that we have received sufficient applications to allocate the full $100 million, we will stop accepting applications for the First-Time Buyer Credit. Estimates for the New Home Credit will be provided once our computer system is completed.

CA first time homebuyer tax credit

Estimates are funds will be exhausted by June 30, so if the California First Time Home Buyer tax credit is important to you, time is running out!

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

Check us out on Facebook Temecula 365 Things to Do

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Temecula Real Estate -Veterans in Temecula to get loan modification help

Loan modification help for Temecula veterans

The family atmosphere of Temecula Valley has made it a magnet for many active duty military and veterans. Affordable housing and VA financing enabled many of them to achieve the dream of homeownership that wouldn’t have been possible in the pricier areas of San Diego and Orange County.
And just like many of the other homeowners in Temecula, veterans are struggling to make their payments and facing foreclosure. Well it appears that help is on the way.
VA loans historically have had among the lowest default rates because:
1) Veterans tended to take a lot of pride in homeownership
2) If they did lose the house in foreclosure they would owe the Veterans Administration for a portion of the loss.

But until last week they weren’t eligible for mortgage relief under the Obama adminstration’s HAFA/HAMP programs.


On Friday June 4 the Veterans Affairs Department announced revisions to its loan modification guidelines. The new procedures are effective immediately, and give servicers the authority to restructure distressed loans in accordance with the administration’s Home Affordable Modification Program (HAMP) if other loss mitigation options have been exhausted.
VA says it expects servicers to exert all reasonable efforts to assist veteran borrowers in retaining ownership of their homes or mitigating losses by pursuing alternatives to foreclosure.
The VA HAMP-style modification authority can be utilized only if the following three requirements are met:
1) borrower does not qualify for traditional home retention loss mitigation,
2) the property is the borrower’s primary residence, and
3) the VA HAMP modification is agreed upon prior to the HAMP expiration date of December 31, 2012.

To read the complete article

If you are a veteran and need help to try and stop foreclosure, contact usTo share with a veteran who may be facing foreclosure, click on the button below

Temecula Real Estate -What in the world is HAFA?

Stop Foreclosure Temecula

If you’re a homeowner  who knows someone that might be in danger of losing their Temecula or Murrieta home to foreclosure, please share this information with them. Estimates are that almost 40% of homeowners in Temecula, Murrieta and other portions of Riverside and San Diego County are at least 30 days delinquent on their mortgage.

Many of these homeowners have “circled the wagons” and don’t realize they may have options. So if you know someone or know someone who may know someone, please share this information.

If we work together to try and save our neighborhoods, the healing can begin.

Not everyone qualifies for the government sponsored HAFA/HAMP programs but most of the major lenders are participating and becoming more open to non foreclosure alternatives.

For a list of participating lenders

The government is pushing for better results from the HAFA?HAMP participating lenders. What that means to homeowners seeking help from foreclosure is a process designed to streamline the loan modification/short sale time lines. The lenders still have guidelines for loan modification but for whatever reason a loan modification is not approved, lenders are required to give you a minimum price they will accept, which means you in effect have an approved short sale and now seek a Realtor who can try to get your home sold before your friend or family member will  have to face foreclosure and all the damage it can do to them personally as well as the damage to their credit.

To discuss  options with a foreclosure prevention specialist

Our client list is full of families who thought foreclosure was their only solution but were able to find an alternative and have been able to move on with their lives.

Watch this video which explains the HAFA process.

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First Time Home Buyers test drive your first home?

First time home buyers in Temecula, Murrieta and first time homebuyers in other portions of Riverside and San Diego County can’t help but notice all the “noise” about buying their first time home.

They’re being told it’s a great time to buy because:

1. Interest rates are low - They are! (sub-five percent)

2. Homes are very affordable - They are!

Test Drive your first home

First Time Home Buyers test drive before you buy

3. Owning is better than renting -  It is!

But if you’re a first time home buyer, how do you know if owning a home is the right decision for YOU?

How do you know if you can handle the commitment and responsibility that comes with homeownership?

Why don’t you test drive your first home?

OK, you can’t pick out a house and move in for a couple weeks and see how it fits, but what you can do is try out the lifestyle changes that owning your first home will bring.

In the last real estate boom, too many first time homebuyers attached the same importance to buying a home as they did to picking up the National Enquirer at the grocery check out.

No matter how much some people may try to “sugar coat” it, owning your first home will cost you more each month than renting. Owning your first home will require adjusting your lifestyle and finances accordingly.

If owning your first time home is important here’s a four step process that will help you decide if  homeownership is the right decision for you.

1. Select a target payment -  Forget about sales prices, bedrooms and bathrooms and focus on the monthly payment you would feel comfortable paying each month. Your monthly “nut” is your real commitment and that payment has to be in your comfort zone or you’ll end up being “house poor” and not enjoying all the benefits homeownership can bring.

2. Add the additional cost of homeownership -  The additional cost of homeownership is for those things you’ve come to depend on your landlord to pay, that will now be your responsibility, like routine maintenance, upgrading the interior and exterior for your new home. I would recommend at least $400-$500 additional. Homeownership won’t cost you that much each month generally but there will be times when it will.

If you selected a target payment of $1300 a month, the additional cost of homeownership runs the total to $1700-$1800.

3. Subtract from that amount your current rent payment. If your current rent payment is $1000, you should be willing to commit an extra $700-$800 month for the costs of homeownership. If you’re living with mom and dad to save money for a down payment this becomes even more important because going from ZERO housing expense to $1700 will create a shock to your financial and mental well being.

4. Bank the difference - Take the additional $700 – $800 month and put in your savings. What lifestyle changes will you have to make to accomplish your goal? No one can really answer that but you. It’s going to require discipline, but so does the responsibility of owning your first home.

This is not a one or two month plan. Test drive it for as long as you need, but I would recommend at least 4-6 months.

Two very good things will come of “test driving” homeownership. 1) You’ll have a better idea of what owning a home truly costs 2) Your lender will know that you have demonstrated an ability to save, which will make them feel better about your loan approval.

I hope some of you will take the lifestyle “out for a spin” and report back on how it went.

Other related posts:

First time home buyers may qualify for 4% first time home buyer loans

Special Riverside County Tax Credit for first time home buyers

First Time Home Buyers 10 good reasons to buy now

First Time Home Buyers – How to buy your first home

First Time Home Buyers – should you buy a new home

First Time Home Buyers – is it the right time to buy

To find out more about  first time home buyer programs

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Temecula Real Estate Market - A new tax credit on the way?

A new First Time Home Buyer Tax Credit?

In what has to be considered one of the strangest moves in the efforts to provide incentives to first time home buyers in Temecula, Murrieta and other portions of Riverside and San Diego County, on Wednesday May 26, the noted Libertarian, Ron Paul of Texas introduced legislation to permanently extend the first time home buyer tax credit.

There’s an old saying about “what strange bedfellows politics makes” and this has to be a classic example. Mr Paul, a former Libertarian presidential candidate (maybe he still is, I’m not sure) has run on a platform opposing government intervention in just about everything and now he is advocating increased government involvement with the tax credit.

My guess is, if the housing market continues to show signs of weakness from the “post tax credit hangover” this measure will gain increasing support in Congress. You can also bet the National Association of Realtors will break out the big guns to push for passage quickly. Many markets across the country are beginning to show signs of weakness due to the hangover and there’s not enough menudo to go around. For those of you not in Southern California, menudo is a Latino home remedy for hangovers.

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Down Payment Assistance funds available for first time home buyers

Riverside County Down Payment Assistance

If you’re a first time home buyer in Riverside County and thought owning your first home was beyond your reach, well Riverside County through one of their down payment assistance programs is looking for first time homebuyer families to receive funds from their down payment assistance program.

Riverside County has multiple programs but we are going to focus on just one today. That program is the Redevelopment Homeownership Program (RHP). They currently have about $800,000 available for down payment assistance, which is approximately enough to help 17 families. It doesn’t sound like much, but it’s about 40% of an allocation they received a couple of years ago.

In a meeting with approved lenders,Riverside County told us they would like to apply for more funds to help first time home buyers, but until the seventeen lucky families use this allocation they can’t.

Details of the RHP Down Payment assistance program are available on the website.

The RHP down payment assistance program is to help Riverside County first time home buyers purchase a home in unincorporated areas of the County. To find your first home using the Riverside County Down Payment Assistance program it’s important to remember that buying it is a process, not an event. Many first time homebuyers have been successful using the down payment assistance programs but they followed the recommended processes and are now enjoying all the benefits that come with owning your first home.

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10 things that can kill your first time home buyer loan

If you’re a first time home buyer in Temecula, Murrieta, or other portions of Riverside and San Diego County you may not know of the potential “land mines” that lie in waiting.

Just like navigating any minefield, if you have enough information and a really good map you can make it through.

MSN Money did a very good article on the “10 things that can kill your home loan”. It wasn’t the typical “get pre-approved” article but focused on some hidden items you may not be aware of. But as with most articles written by national publications, it doesn’t always address those “land mines” in the context of the Southern California market. 10 things that can kill your home loan

Here’s the ten items, with a SoCal twist.

1. The house needs too much work – There really isn’t an “as-is” purchase when you need financing. All loan programs require that all health and safety issues that are addressed in the appraisal have to be repaired before closing. With so many bank owned properties that have been vacant, chances are very good, some items will be called out for repair.

2. The appraisal came up short – The purpose of an appraisal is to establish the market value for the lender’s security. If you find yourself with a short appraisal, you will have three options: 1) Renegotiate a new lower sales price 2) Bring in extra money for your down payment 3) Cancel the transaction.

3. You have too much debtYou’ve heard the term DTI (debt-to-income) ratio. This is one of the tools lenders use to determine your ability to repay the loan. In the last year the maximum debt to income ratio has dropped from 55% to 45% for most loan programs. Having your financial house in order before you buy your first time home is always a good strategy.

4. You’re self-employed and your income has declined – When analyzing the income of self-employed applicants, lenders will look to your net income. If you’re aggressive in your accounting for tax purposes, your net may not be enough to support the new payment. Stated income loans are dying, in fact Congress may be the executioner as the Senate has just approved legislation making stated income (liar loans) illegal.

5. You recently started getting paid on commission – or getting overtime, or bonus income or started a new business. Lenders require a two year history for any income that can vary.

6. There’s a problem with your tax returns – Lenders are going to ask you to sign a form 4506T in the beginning of the application process. This allows them to see a copy of the tax returns you filed with the IRS. If your lender hasn’t already seen them, you could get surprised with un-reimbursed employee business expenses (Form 2106).

7. You can’t get private mortgage insurance – If you have applied for conventional financing with less than 20% down, your loan will require PMI and their guidelines may be more stringent than your lenders. If you do get turned down at this point you still have options, consult with your lender immediately.

8. The lender doesn’t like your condo association’s finances – It’s not just the finances. If you’re using FHA financing, the condo project has to be currently FHA approved because it’s next to impossible to get a new approval in time to close under the terms of your contract. If a large percentage of the current occupants are tenants or if the majority of current owners are delinquent on the HOA dues, your lender could decline the application.

9. Your lender is dragging its heels – Even if they aren’t it’s important that everyone be aware of the required time lines. In your purchase contract, time lines are set for the performance of certain items, i.e. appraisal, loan approval etc. Failure to meet these time lines could result in the cancellation of the contract and potentially loss of your earnest money deposit.

10. You fail to stay on top of your paperwork – You will have a lot of people working on your behalf to help you own your first home, but you have to do your part as well. It may be inconvenient to resend documents you already sent or to update the critical documents of your loan file, but it’s not going to happen if you aren’t pulling your weight during the journey.

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How to reclaim your privacy on Facebook

Facebook privacy for first time home buyers

The tsunami like growth of Facebook, 400 million strong, has many first time home buyers in Temecula, Murrieta and other parts of Riverside and San Diego County wondering how much of their personal information is being seeing in the Facebook world.

If you’re overwhelmed by the Facebook privacy options, there is a simple to use bookmarklet that allows you to scan your privacy options on Facebook .

Reclaim Privacy is an open-source browser-based privacy scanner that automatically inspects your Facebook privacy settings and denotes settings that are risky privacy-wise.

Read more about privacy settings for Facebook

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A secret strategy for first time home buyers

If you’re a first time home buyer looking for your first home in Temecula, Murrieta or other portions of Riverside and San Diego County, you are no doubt frustrated with the process.

You submit multiple offers, often competing with ten to fifteen other first time homebuyers, only to find out the house sold for $10,000 more than your offer.

Well, we feel your pain!

We’ve  hired (at no expense I might add) a celebrity spokesperson to share a secret strategy with you. If you follow her words of advice, the competition for your first home will vanish, and you’ll be on the “inside looking out” at all those other first time home buyers.

You won’t have to wait for the “shadow inventory” everyone says is coming. (Of course, they’ve been saying that for a year now.)

So, listen up!

If you’re not familiar with “permanent fund” or “musher”, you can Google alaskan slang

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Temecula Real Estate - Is it time to fold up your tent?

Many homeowners in Temecula, Murrieta and other portions of Riverside and San Diego County are faced with the dilemma of “strategic foreclosure”. They can continue to make the payments but in growing numbers are choosing not to.

Whether or not “strategic foreclosure” is the right choice for you is entirely personal. Forget about what others are doing. Estimates are that at least 40% of homeowners in Riverside County are at least 30 days delinquent on the their mortgage. Some by circumstance, others by choice.

Forget that banks and big business walk away from “toxic debt” all the time and justify it with “It’s a smart business decision”.

Most of the major lenders have enrolled in President Obama’s HAMP/HAFA programs, yet the number of families who get a loan modification or a short sale is a small percentage of those who apply.

There’s enough blame to go around for this crisis, so we have to quit pointing fingers and find solutions.

If you’ve tried without success to get a loan modification or a short sale approved, then your lender has made their decision and is obviously prepared to deal with the consequences.

It’s time for you to make yours, but whether you decide to stay or “strategically default” there will be consequences. It’s important to know what they may be before you make what may be one of the biggest decisions you will ever make.

Check out these videos for more information

Watch CBS News Videos Online


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6 biggest mistakes first time homebuyers make

First time home buyers in Temecula, Murrieta and other portions of Riverside and San Diego County on the path to homeownership, are too often traveling that path with their “eyes wide shut”.

Much of the decline in the current housing market can be traced directly to home buyers not being fully aware of what they “were signing up for”.Here are the 6 most common mistakes and some tips to avoid them.

1. Not knowing your credit score- It seems hard to believe, when free credit reports are available to consumers each year, but it’s true. Perhaps more important than the credit score itself is how lenders evaluate your credit score. Read More2. Buying a car before a house- The only “deals” better than homes in today’s market may be those on new cars. Unless you’re paying cash, you’ve just added another debt which is going to affect your ability to qualify. Lenders refer to this as your debt-to-income ratio and that new car payment may very well stand between you and your first home.

3. Skimping on home inspection – If you’re buying a bank owned property, you’re buying “as-is”. This is no time to “cut corners” on your costs by skipping the home inspection. You don’t want your first home to be your first “money pit”.

4. No lawyer – Lawyers are not usually part of the real estate purchase process in California. Just because they’re not normally used, doesn’t mean it’s a bad idea. Unless you’ve signed a “buyer-broker agreement”, both of the Realtors in the transaction represent the seller.

5. No contingencies – Contingencies give you an out if you’re not happy with certain parts of the transaction. There are typically contingencies for the home inspection, the appraisal, and financing. The contract also sets specific time lines in which these must be completed so you have to be pro-active to make sure they get done on time. If you begin to get pressure to remove a contingency before you’re ready don’t give in!

6. Not budgeting for insurance – All lenders require that you carry homeowners insurance, which will cover them in the event the property is damaged or destroyed. The minimum required insurance doesn’t cover your contents and personal items inside. Many lenders are beginning to require “proof of insurance” at the beginning of the transaction so they can factor the payment into your debt-to-income ratio. Flood insurance (if you can get it) can be very expensive, make sure you ask your Realtor if the property is in a flood zone.

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How to buy a foreclosure

First time home buyers in Temecula, Murrieta and other portions of Riverside and San Diego County have a unique opportunity when it comes to buying their first home. There are hundreds of homes in Temecula and Murrieta and thousands in Riverside and San Diego County that are in various stages of foreclosure and they are more affordable now than any time in the last 20 years.

Too many first time home buyers have entered the market with their “eyes wide shut” and not fully aware of the opportunities and pitfalls that await them.

90% of all first time home buyers use the internet for their home search. Real estate websites like: Zillow Trulia Movoto to name a few can provide you with the window dressing, but buying your first home is too important to rely on window dressing. You will need the help of an experienced local professional to guide you through the process.

Foreclosures can be purchased in one of three stages:

1. Pre-foreclosure – The owners are behind on their payments, probably owe more than it’s worth, and are looking to escape before the bank takes possession of the property. The Obama Administration’s HAFA Program (Home Affordable Foreclosure Alternatives) is an attempt to help homeowners stop foreclosure by streamlining the short sale process. Even though the program has had limited success to this point, you can expect short sales to be come the norm and the process to be much shorter with participating lenders.

2. Sheriff’s auction -  Once the bank has foreclosed and taken possession the home is literally offered for sale on the “court house steps”. The bank decides the minimum bid they will accept and the highest bidder wins. Unless you have just won the lottery and have the ability to pay cash, this is probably not viable for most first time home buyers. If you don’t know the local market and don’t have a chance to do a thorough inspection, “run don’t walk away” from a sheriff’s sale.

3. Foreclosures -  Also referred to as REO or bank owned properties. Depending on local market conditions and the number of competing buyers these may or may not be the “deals” they are made out to be. The good news is you will have the opportunity inspect and get clear titile.

5 Mistakes to avoid when buying a foreclosure

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Is the tax credit really gone for first time home buyers?

It’s April 30 and many first time home buyers in Temecula, Murrieta and other parts of Riverside and San Diego County think they’ve missed out on the first time home buyer tax credits.

Well, the federal tax credit is gone after today, but local first time home buyers have other credits that may be available.

California Tax Credit

Riverside County Tax Credit

San Diego County Tax Credit

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Temecula Real Estate - Are you overtaxed and undervalued

It’s no surprise that when the housing bubble burst that homeowners in Temecula, Murrieta and other portions of Riverside and San Diego County had their home values shrink by as much as 50% or more.

But what is a surprise, is that many homeowners are still overtaxed. Overtaxed because they may be paying too much in property taxes based on the county’s over assessment of their home’s value.

But what can a Temecula homeowner do to reduce their property tax bill.

This video from CnnMoney offers some tips on how to fight back!

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Temecula First Time Home Buyers live in one of the top 100 cities

Temecula Real Estate Market

For the second straight year first time home buyers in Temecula will be living in one of the top 100 cities in the United States.  Temecula was one of four California Cities to make the list according to RelocateAmerica.com

Those of us that live here already know it’s a great place, but  here’s what RelocateAmerica.com had to say:

“If you’re in search of a suburban city located within an hour drive of San Diego, Orange and Los Angeles counties, has a historic Old Town, well-planned shopping and dining venues, affordable Southern California housing, spacious parks and an excellent school system, Temecula just might be the place for you.”

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What's the truth about the California First Time Home Buyer Tax Credit?

Amid a great deal of hoopla, the State of California recently announced, not one but two tax credits as incentives for new home buyers and first time home buyers.

One of the state credits is for the purchase of new (never occupied) homes and is designed to help the struggling homebuilders in California.

California Homebuyer Tax Credit

The second credit is for first time home buyers and can be used on resale or new homes.

If you’ve been out house hunting trying to take advantage of both the federal and state tax credit you’ve undoubtedly seen the offers of $18,000 waiting for first time home buyers.

The $8000 first time home buyer tax credit is almost yesterday’s news. It expires in 22 days (April 30) and unless a sudden flood of homes hits the market, most first time home buyers will lose out.

The California credits begin for purchases as of May 1, 2010 and run to December 31, 2010. There has been $100 million allocated to each program. The original allocation of $100 million lasted 3.5 months, so based on past performance you will have until mid-September.

But what are you really getting with the state tax credit?

It’s promoted  as $10,000 or 5% of the sales prices (whichever is less), so to be eligible for $10k you would have to be purchasing at least a $200k home. For many first time home buyers in Temecula, Murrieta and other portions of Riverside County, $200k just isn’t in the budget. First Time homebuyers in San Diego may have trouble finding anything for that amount.

The real kicker however is the calculation of the tax credit. Rather than pay $10,000 in a lump sum, the California tax credit is paid out over three years ($3333/per year) but is paid based on state taxes owed or paid during the year and the difference is NOT paid in cash to the taxpayer/new homeowner. Here’s something from the press release that will give you a hint.

“However, since many taxpayers will not be able to utilize the entire tax credit,”…

In real dollars, if  your total state tax liability for a given year is say $2,000 your first time home buyer tax credit would be maxed at $2000 for the year. Nice change but hardly the $10,000 you thought you might be getting.

Don’t get surprised, check your last tax return and look at the amount of state income tax you paid in. Assuming your income is close to the same that is the maximum you would receive each year for your tax credit.

“If the available tax credit exceeds the current year net tax, the unused tax credit may not be carried over to the following tax year.”

The most important thing you can do, is check with your tax professional and see how the new first time home buyer tax credit applies to your situation.

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5 things First Time Home Buyers probably didn't know could affect their credit score.

First time home buyers in Temecula, Murrieta, and other portions of Riverside and San Diego County are discovering how important a good credit score is to their ability to get a first time home loan.

In case you haven’t heard, we’ve had a little bit of a “housing crisis” over the last three years and as a result first time homebuyer lenders have increased their scrutiny of loan applications.

Did you know that your first time homebuyer lender will probably run your credit at least twice during the loan process? And when the new guidelines from Fannie Mae take effect, they will be required to run your credit prior to funding your first time home loan. So the keyword when it comes to your credit score is: DILIGENCE!Having a fair to good credit score is a given when it comes to applying for your first time home loan, keeping that score at acceptable levels during the home hunting and escrow process is just as important.

5 Things you probably didn’t know could affect your credit score

They actually could add a 6th thing and that is that letter you received from your credit card company informing you they had reduced your available credit limit even though you had made every payment on time. This increases the percentage of credit outstanding to available limits, and we have seen credit scores plummet as a result.

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Football season finally over for Temecula homeowners?

It’s been 59 days since the New Orleans Saints won Super Bowl XLIV on February 7. I’ve heard they are still celebrating in the Vieux Carre (French Quarter) and should be finished in time for training camp in August.

Well homeowners in Temecula, Murrieta and other portions of Riverside and San Diego County who sold their home in 2009 via the short sale process probably won’t be celebrating but will be able to breathe a little easier by Thursday, April 8th. It seems the political “football” that has been the California state tax on mortgage debt forgiveness will be put through the uprights as early as tomorrow.

Borrowers who received “debt forgiveness” as the result of a loan modification or short sale could receive a 1099 from their lender for the debt that was forgiven. This could result in tax bills of $10,000 or more, which almost no one had the ability to pay.

When the scope of the current housing crisis became clear, the federal government moved quickly(that’s an oxymoron if I ever heard one) with the Mortgage Debt Forgiveness Act of 2007, which forgave the tax consequences on this debt until 2012.

California on the other hand has dealt with this problem annually and is finally getting around to help the homeowners for their 2009 tax liability. The new legislation will mirror the federal program and extend this debt forgiveness until 2012.

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5 New Rules for First Time Home Buyers

If you’re a first time home buyer in Temecula, Murrieta and other portions of Riverside and San Diego County you’ve probably noticed that the real estate market has changed.

Because you’re on the buying side, the news is generally all good. Home prices in the Temecula Real Estate market have dropped 50% or more from the highs in 2006.This means that your first home is more affordable than any time in recent history.

For more information on local housing trends:TemeculaSan Diego

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Winchester

Regardless of where your first time home will be, it’s important to go in with your eyes wide open and with realistic expectations.

According to CBS Money Watch there are new rules that first time home buyers need to follow to save yourself time and money.CBSMoneyWatch.com

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$18,000 waiting for First Time Home Buyers

First Time Home Buyer Tax Credit

First time homebuyers in Temecula, Murrieta and other portions of Riverside and San Diego County have up to $18,000 waiting for them.

What will it take to be eligible for this windfall? Act and act now. I know it sounds like a sales pitch from one of those late night infomercials, but as my mom used to say “He who hesitates is lost”

In addition to the Federal first time home buyer tax credit which expires on April 30,hence the ACT NOW!, the State of California has re-introduced it’s new home tax credit along with a new first time homebuyer tax credit. The catch is that funds are limited in the California program.

There is approximately $100 million dollars allocated for each state program and funds are reserved on a first come first served basis.

For more information on the California Tax CreditFor more information on the Federal First Time Home Buyer Tax Credit

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President Obama announces newest effort to help Temecula homeowners

Obama housing plan

Today, President Obama announced the details of his newest effort to stem the tide of foreclosures and bring some stability to the housing market. Of course, the success of the program depends on the “buy-in” from the lenders. Past efforts have not achieved the desired goals, largely because the banks chose to ignore the HAMP and HAFA programs.

Some of the highlights of the plan:

1) Temporarily reduce the payments of unemployed homeowners to 31% of their income, including unemployment compensation.

2) Additional efforts to help “underwater” homeowners IF they continue to make their payments.

3) Additional help for homeowners with second mortgages

Many homeowners in Temecula, Murrieta and other portions of Riverside and San Diego County may be the “poster children” for this program.

Even though unemployment in the Inland Empire is 15%, “under employment” may be north of 25% when you count self-employed and commission only workers who are technically employed but making little to nothing as a result of the economy.

Underwater homeowners is actually redundant when it comes to SoCal. Estimates have property values at 50% of  2006 highs and still declining.

Many of these distressed homeowners have second mortgages or home equity lines of credit (HELOCs) and these loans have been major stumbling blocks to successful loan modifications or short sales.

The administration has two options when trying to deal with the housing crisis and neither are particularly appealing. It’s like removing a bandage from your arm. You can rip it off and get the pain over with or work it slowly, adding a little lubrication to minimize the pain.

They can’t let the foreclosure market run its course, potentially turning millions of homeowners into tenants and bankrupting many banks and their shareholders. This may be the quickest cure but it will be the most painful.

Or they can try to minimize the pain with efforts to keep qualified homeowners in their homes and offer incentives to the banks to negotiate with these distressed homeowners for either a loan modification or pre-approve a short sale.

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5 credit score killers for First Time Home Buyers

First Time Homebuyer Credit

First time home buyers in Temecula, Murrieta and other portions of Riverside and San Diego County know the importance of maintaining a good credit score while searching for their first time home.

What you may not know is that your credit score is under scrutiny all the way through the process right up to the day you get the keys to your first home.

You’ve done all the right things. You’ve managed you’re credit well, you got pre-approved for your first home loan. You diligently shopped for homes and compared mortgage interest rates. Your offer has been accepted by the bank, and you’ve signed the escrow paperwork.

Time to buy the new flat screen and furniture for your “man cave” or whatever is the female equivalent(lioness den?), Right?

Wrong!Most Temecula first time home buyers are not aware their lender may run their credit at least one more time, and when the new guidelines from Fannie Mae take effect your credit will be run a third time at closing.

So what’s a first time home buyer to do?

The easy answer is: Continue to do the same things you did to get your credit scores to an acceptable level: don’t significantly increase the balance on your credit cards, don’t buy a new car or make other large purchases etc, and PAY EVERYONE ON TIME!

Now that we know what to do, here’s what not to do!

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Bank of America announces a new plan to help Temecula homeowners

Struggling homeowners in Temecula, Murrieta and other portions of Riverside and San Diego County may soon be seeing some relief on their Bank of America home loans.

Bank of America loan modification plan

Principal reduction is like the “holy grail” of loan modifications. Most homeowners in Temecula and Southwest Riverside County are seriously “underwater” or “upside down”, meaning they owe significantly more than their home is worth. Temecula homeowners in this position are in effect “renting” the home they own and if they have one of the exotic “pay option” or “pick a payment” loans it get worse each month as their loan balance continues to grow.

This dilemma has given rise to the growing trend of “strategic foreclosure”, where a homeowner who is able to make the payments makes the “strategic” decision not to.

True, the foreclosure will impact their credit in the short term and turn these former Temecula homeowners into renters for at least 3 years, but it’s almost guaranteed  their credit scores will come back long before their equity does.

Is “running out” on a debt you agreed to pay the moral thing to do?

Maybe, maybe not, but the fact is it’s happening and apparently Bank of America has come to recognize what a threat it is to their bottom line.

Whether this is a genuine effort on the part of Bank of America or just another PR move, remains to be seen, but it should give hope to the millions of Bank of America loan holders, who are struggling to make their payments.

To read the complete article

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First Time Home Buyers can search neighborhood safety

First time homebuyers in Temecula, Murrieta and other portions of Riverside and San Diego County now have the ability to see if their new neighborhood is safe.

Providing for our family’s safety is paramount to our decision when selecting a city like Temecula or Murrieta or even a neighborhood like Temecula Crowne Hill or Redhawk. You can’t escape crime completely, but you can make an informed decision by checking out CrimeReports.com

Have there been violent crimes in my new neighborhood?

Are there sex offenders living nearby?

Crime Reports has partnered with over 700 law enforcement agencies to provide crime mapping and sex offender data.

To stay updated you can sign up for email alerts and they have an application for the IPhone.

Check out http://crimereports.com

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Stop Foreclosure California- 6weeks for plan to help Temecula homeowners

Stop Foreclosure Temecula

Under guidelines issued under the U.S. Treasury Department’s Fund for Hardest Hit Housing Markets,  California’s housing finance agency (CalHFA) was given six weeks to come up with a plan on how spend their share of the $1.5 billion in federal funding.

Sometimes it’s great to be number one! California’s housing finance agency is getting the most cash $700 million and come up with innovative plans to help unemployed homeowners. CalHFA is looking at areas of the state that have been most affected, such as the Central Valley and Inland Empire.The five hardest hit states, including California, Arizona, Florida, Nevada and Michigan have until April 16 to submit their plan and funds are expected to be available for homeowners by summer.

Read the complete article

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First Time Homebuyers, what are you going to do after April 30th?

As of today there are only 45 days left for first time home buyers in Temecula, Murrieta and other portions of Southwest Riverside and San Diego County to get the $8000 first time home buyer tax credit. You can drown in the news articles and blog posts, telling you now is the time to buy! and IT IS if you’re ready.

First Time Home Buyer Tax Credit

But what happens after April 30th if you’re not quite ready?

What if you’re still working on your credit?

What if you’re still saving for a down payment (or negotiating with the bank of Mom and Dad)?

Stay on course, keep working on it, if you qualify there may be an additional tax credit waiting for you.

First time home buyers in Riverside and San Diego Counties have another tax credit waiting for them. In fact, if you are one of the lucky few who will qualify for the $8000 First Time Homebuyer Tax credit, you may be able to use the Riverside and San Diego County programs IN ADDITION to the federal program.

If you don’t make it into escrow by April 30th the County programs could provide you with a tax credit that ends up being larger than the $8000 first time home buyer tax credit. Disclaimer: Qualifications and restrictions are unique to the county programs, so do your homework to see if you may qualify.

For more information on the Riverside County Tax Credit

For more information on the San Diego County Tax Credit

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More help for struggling Temecula homeowners

Homeowners in Temecula, Murrieta, and other portions of Southwest Riverside and San Diego County who are struggling to make their payments and are trying to stop foreclosure may be getting more help from Uncle Sam.

Barney Frank, (D-MA) sent a letter to the four biggest banks asking them to write down second-lien mortgages to assist the modification effort and prevent foreclosures.

If you are a homeowner who has tried to negotiate a loan modification or short sale, you know the biggest stumbling block is usually your second mortgage. Well help may be on the way

For more information


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Tax help on the way for struggling Temecula homeowners

Tax Help for struggling Temecula homeowners

The California Assembly has recently passed legislation that will protect struggling homeowners in Temecula, Murrieta and other portions of Southwest Riverside and San Diego County.

Probably the worst thing that can happen to you, is to lose your home through a short sale or foreclosure, and then be presented with a tax bill that you can’t pay.

As state law now stands not all homeowners who have a foreclosure, short sale or loan modification will take a state tax hit. According to the Senate Revenue and Taxation Committee, for example, debt forgiven on a first mortgage used to buy a house even now is not taxable. That is not true, however, if the original mortgage is refinanced and money taken out to buy a car or for another investment.

Read the complete article

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First Time Home Buyers-Avoid the 4 biggest lies in Real Estate

First time home buyers in Temecula, Murrieta and other portions of Riverside and San Diego County have access to thousands of homes for sale through various real estate websites. First time homebuyers can also compare mortgage rates on the websites of almost every lender and mortgage aggregating sites such as Bankrate.com.

But just like the touched up photos of your high school classmates on Facebook, what you see is not always what you get!

Here’s some advice from  CBS on how to avoid the 4 biggest lies in Real EstateCBSMoneyWatch.com

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First Time Homebuyers -3 reasons to start hitting those open houses.

MoneyWatch’s Jill Schlesinger explains why now’s the time for first time homebuyers to start hitting the open houses.

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Struggling Temecula homeowners warned against phony foreclosure audits

State officials warned struggling homeowners  about a new variation on loan-modification scams: “forensic loan audits.”

Loan Modification Scams

Under the dubious service, homeowners are enticed to pay upfront fees for an audit of their mortgage loan, purportedly to determine their lender’s compliance with state and federal laws. It’s pitched as a way homeowners gain leverage in the loan-modification process.

HUD (Department of Housing and Urban Development) has launched a new online resource to fight loan modification scams.  Preventloanscams.orgThe Network developed PreventLoanScams.org to provide homeowners with a single destination to report alleged scammers. Complaints filed online are added to a national complaint database and forwarded to the appropriate law enforcement agencies for review. The Network estimates that the website will assist approximately 50,000 homeowners affected by scams. Additionally, HUD has directed its local fair housing and housing counseling grantees to begin reporting alleged loan modification scams via the website.

Read the complete story

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First Time Home Buyers-Buffett says end to housing crisis near!

We’re talking Warren here, not Jimmy.

In his annual address, Warren Buffett predicted 2011 is when we will see an end to the housing crisis for first time home buyers.

There are hundreds of pundits and prognosticators out there, most of them with absolutely no track record of being right. Warren Buffett may not be right, but you can’t argue with his track record.

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Extension of the First Time Home Buyer Tax Credit for certain members of the military.

First time home buyers hoping for an extension of the $8000 first time home buyer tax credit are probably out of luck.  It doesn’t look like that has any legs in Congress, so on April 30th if you’re not in escrow to buy your first home, this tax credit will have passed you by.

But, if you’re a first time home buyer in Temecula, Murrieta and other parts of southwest Riverside and San Diego County there are other tax credit programs you can use.

Riverside County

San Diego County

But, the government in a rare and lucid moment did grant an extension of the $8000 first time home buyer tax credit to certain members of the military.

Members of the U.S. armed forces, military intelligence, or foreign service on qualified extended duty get an extra year to take either credit. And if you or your spouse has been deployed overseas for 90 days or more in 2008 or 2009, you have until April 30, 2011 to claim the tax credit.

Not in the market now? Well the tax credit could help you anyway.

Even if you’re not planning to buy another house soon, the credit could help your net worth. The first iteration of the credit certainly seemed to have an impact — the National Association of Realtors says first-time buyers accounted for more than 45 percent of home sales in the past year.

If the new tax credit works as well, it could aid the sales of hundreds of thousands of additional homes, sopping up more of the excess inventory. And that’s exactly what you want to happen: Your home value can’t begin to rise until the other homes in your neighborhood are sold.

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Temecula homeowners the absolute wrong way to negotiate with your bank to stop foreclosure!

If you are a distressed homeowner in danger of losing your home to foreclosure, you have options.

You can apply for the President’s Home Affordable Mortgage Program (HAMP) or if the loan modification was unsuccessful HAFA (Home Affordable Foreclosure Alternative) short sale program may be available to you.

HAFA takes effect on April 5 and is designed to help Temecula homeowners who were unable to successfully modify their existing mortgage. Even if you don’t qualify for the government programs many major banks have implemented new procedures to “streamline” the short sale process.

One homeowner, apparently tired of the runaround, decided on a new negotiating tactic. I wouldn’t recommend this approach but it is definitely the poster child for the frustration many distressed homeowners are feeling.

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First Time Home Buyers, need a loaf of bread and gallon of milk?

Most first time home buyers in Temecula, Murrieta and other parts of Southwest Riverside  and San Diego County are commuting to either San Diego, Orange County or other parts of the Inland Empire and as a result many meals are planned “on the fly”.

“I really was hungry for seafood alfredo tonight, but I won’t be home til’ late, can you pick up the ingredients?”

“Of course, if I knew what they were”

Well thanks to some new technology, you can create grocery lists from thousands of recipes and share them on your smartphone.
ZipList gives you the tools to create, store and share a family grocery shopping list on the web. The list can be accessed by almost any device with a web browser, or you can share it in an e-mail or SMS text message. Of course, you can also print out an old-fashioned paper list if you prefer that.

The web-based shopping list interface lets you specify which store an item is available at — you can even specify the aisle. There’s also an option to add notes about coupons or anything else that’s pertinent to whichever household member goes to the store to pick the groceries up.

Read the complete article

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Shopping made simple for First Time Home Buyers

OK, I admit the headline smacks of a tease for Eyewitness News, but if you’re a first time home buyer planning to live in Temecula, Murrieta, or other parts of Southwest Riverside or San Diego County, finding the best bargains can be a chore even for someone familiar with all the great shopping in the area.

Is that computer priced better at Best Buy or OfficeMax?

Does Barnes and Noble have the best price on my favorite book?

Is the Iphone cheaper at the Apple Store or ATT&T?

Well if you’re an owner of the new Android phone, just point and watch the prices appear.

Using some amazing technology, Google has announced Google Shopper for users of the Android.

Watch Video

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Are you renting a home in foreclosure?

First Time Home Buyers renting

You’ve been faithfully paying your rent each month and kept up the property while you searched for your first home and suddenly the legal notices are plastered on your windows and a bank representative is telling you to “get out”.

Many first time home buyers in the middle of the search for their first home are finding out the home they’re renting is in foreclosure. Their landlord has been pocketing the rent and not making his mortgage payment and now the lender is knocking on the door telling them to move.

Do you know your rights?

If you have a lease and are paying your rent, the FDIC has legislation to protect you.  KNOW YOUR RIGHTS!

FDIC Alerts Banks to Tenant Protection Act
This story appeared in Bank Digest.
The FDIC has published highlights of the “Protecting Tenants at Foreclosure Act of 2009,” which became effective on May 20, 2009. The law is intended to protect tenants from immediate eviction by persons or entities that become owners of residential property through foreclosure and extends additional protections for tenants with U.S. Department of Housing and Urban Development Section 8 vouchers. It establishes a minimum time period that a tenant can remain in a foreclosed property before being evicted. Tenants must be given at least 90 days notice; tenants with leases must be permitted to remain until the end of the lease, except that a lease can be terminated with 90 days notice by a purchaser who intends to occupy the property.

By Les Christie, staff writerFebruary 18, 2010: 1:57 PM ET

NEW YORK (CNNMoney.com) — Renting a home that is going through foreclosure? If so, don’t be fooled: Lenders can’t kick you out; they have to honor the terms of your lease.

Of course, that doesn’t mean that some lenders’ representatives aren’t trying to scare people away.

Read the complete story

If you are trying to buy your first home and you find your landlord is in foreclosure, contact a local tenant advocacy group immediately.

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Obama administration promises more help for Temecula homeowners

Temecula homeowners who are struggling to make their payments, have received some help from the Obama administration.

President Obama announced today another $1.5 billion program to help borrowers in the five states hit hardest by the housing crisis.  California, Arizona, Nevada, Florida and Michigan will all share more money to fund programs to prevent foreclosure for people who are unemployed or who owe more than their homes are worth.

The funds will be allocated based on a formula that takes into account home price declines and unemployment. The agencies’ programs must be approved by the Treasury Department.  The move is the administration’s latest attempt to fix its signature foreclosure-prevention effort, the Home Affordable Modification Program, which has been widely panned for not doing enough. A senior Obama official cautioned that the new program is just another tool in the White House arsenal, not a full solution to the housing woes facing the unemployed and underwater. “As important as $1.5 billion will be to these five states, it’s not going to solve what is a catastrophically large problem,” said the official, speaking to reporters on a conference call. “It’s going to help as many of the other programs do.”  The senior administration official was vague about how the money would help the target audiences, saying mainly that these groups are intimately involved in their local housing markets.

Read the complete article

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For Temecula homeowners short sales grow as alternative to foreclosure

Homeowners in the Temecula Real Estate market who can no longer afford the payments are finding short sales as an alternative to foreclosure.

Historically the short sales have  taken months, and those delays have resulted in the very thing everyone was trying to prevent: Foreclosure.Most of the major lenders, faced with an increasing number of delinquent loans (estimated in the millions) are implementing new short sale procedures to speed up the process.

One of the most touching examples of the impact of foreclosure was a blog written by Bob and Stephanie Walker, titled: Love in the Time of Foreclosure.

Nineteen months ago, the recession took Bob Walker’s job. Then, creditors lined up to take the three-bedroom hilltop home that the computer consultant shared with his wife, Stephanie, a playwright still looking for her first break.

Read the complete story

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Beware of the sneaky credit card tricks!

The CARD Act, scheduled to go into effect on February 22 could have a significant impact on first time home buyers in Temecula, Murrieta and other parts of Southwest Riverside and San Diego County.

Maintaining your credit score is critical if you are a first time homebuyer and slight changes by your credit card company could affect your credit score even if you always pay on time OR in some cases if you don’t even use the card.

10 Credit Myths that can affect your credit score

The banks in an attempt to get around the requirements of the CARD Act have come up with some sneaky ways to evade the restrictions of the new law.

One of the most blatant tactics is switching everybody to variable rates linked to an index like the prime rate.

Doing so allows to banks to change your rate without advance notice.

What’s more, the variable rate applies to your old balance, which the CARD Act forbids for fixed rates.

Read the Complete Article

These tactics put first time homebuyers between the proverbial “rock and the hard place”. You can elect to keep the card and be at the mercy of an arbitrary rate change or you can opt-out of the card, close the account and risk a possible drop in your credit score.

It’s time to go back and re-examine those notices sent by your credit card company and make sure whatever changes they are proposing to your card don’t impact your credit score and damage your chances of owning your first home.

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Stop Foreclosure Temecula - Should I walk away from my house?

Homeowners facing foreclosure in Temecula, Murrieta and other parts of Southwest Riverside and San Diego County are facing the tough choice of keeping their house or just walking away and getting out from under the debt that may be strangling them personally and financially.

I wish there was an easy answer, but truth be told each distressed homeowner has to look deep and make the decision based on what is best for their family. The real world says that sometimes the financial considerations far outweigh the moral obligation to pay something you’ve agreed to pay.

Here’s how one homeowner made her decision:

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When is the right time to buy your first home?

First time home buyers in Temecula, Murrieta and other cities in Southwest Riverside County, as well as those in North County San Diego are inundated with offers of “NOW IS THE TIME TO BUY!” .

But is it really?

There’s are lots of good reasons to buy, for instance in 75 days (from February 15) the $8000 First Time Home Buyer Tax Credit will have gone the way of “pong and lincoln logs”.

Read More

First Time Home Buyers in Riverside County and First Time Home Buyers in San Diego County will still have their own special tax credit.

Riverside County

San Diego CountyTax credits are all well and good but, it’s writing that check every month that determines if buying is better than renting, for YOU!

In normal times, people won’t pay much less to lease a house than to own it.

After all, if you’re paying rent instead of a mortgage and taxes, you still get to enjoy the same rec room, chef’s kitchen, and casita for visiting grandparents.

So the surest sign of a frenzy appears when owning becomes far more expensive than renting.

That’s precisely what happened during the last bubble.  And the surest sign that prices have fully adjusted arrives when the ratio of what people pay in rent versus what owners spend on the same property returns to its historic average.
“If you look at the trend in rents to see where housing prices are headed, you’re looking at the right measure,” says Yale economist Robert Shiller.  In recent reports, Deutsche Bank (DB) demonstrates how steady or even falling rents have pulled down housing prices, to the point where in many markets it costs about the same amount to own as to lease.

That’s a golden mean that America hasn’t seen in almost a decade. The DB research also offers convincing evidence that the wrenching adjustment in housing prices is finished for much of the nation, with a bit more pain to come in selected areas.
On average, DB found that families across America were spending about 87% as much to rent as to own in 1999. Hence, they were traditionally willing to pay a premium as homeowners, though not a big one.
But by mid-2006, with the craze in full swing, the figure fell below 60%. At that point, Americans were spending an incredible 66% more to own than to rent. It was far worse in the bubble markets: In Las Vegas, Phoenix and Miami, homeowners were paying twice as much as renters, and in San Francisco and Orange Country, owners’ monthly payments were triple those of their neighbors with leases instead of mortgages from 1999 to 2007, apartment rents increased only 32%, but home prices jumped more than three times as fast, around 105%.

DB reckoned that housing prices are more or less reasonable when the ratio returns to its 1999 level.

Why 1999? Because the ratio was relatively stable throughout the 1990s, and it was the year the steep rise in prices began in earnest.. At the end of the third quarter of 2009, the overall number stood at 83%, meaning renting was just a tad more attractive than owning.

Given that analysis, it’s likely that prices will fall another 5% or so nationwide. The drop could even be slightly greater. One reason: Rents, the force that govern housing prices, are still falling.  In 2009, apartment rents dropped 2.3%, and the fall continues. And enormous adjustments are needed in still-exorbitant markets such as New York and Baltimore.

Thankfully, the improving economy and decline in the rate of job losses means that rents should soon stabilize and could even start increasing by the end of 2010.

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10 Credit Myths that can hurt First Time Home Buyers

Maintaining your credit FICO  score is a very important step for first time home buyers in Temecula, Murrieta and other parts of Southwest Riverside and San Diego County.

If you’re a first time home buyer chances are you’ve had advice from everyone including your brother-in-law, your gardener, even your hair stylist (barber) has an opinion on first time home buyers and their credit scores. Most of what is out there is just plain misinformation and contradicts the steps you are taking to improve and maintain your credit scores. The best defense against making a credit blunder is to better educate yourself about credit and ways to manage it.

Read the complete article

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Changes to FHA loans as bad as advertised for First Time Home Buyers?

The Department of Housing and Urban Development recently announced changes to borrower guidelines for FHA loans. The industry had been bracing itself for “adjustments” that threatened the ability of many first time home buyers to achieve their goal of homeownership.

The changes that were announced, appear to balance the need for credit availability and the risk to the MI fund.

Here’s a nice summary from Mortgage News Daily:

Some FHA lenders out there had feared  the potential changes that HUD and FHA could make to their program would end up being their funeral. That turned out not to be the case, and there has been a good amount of analysis of the changes. The underwriting changes by the FHA include increases in the MI premium, an increased down-payment requirement for low FICO borrowers, a reduction in the ability to roll closing costs into the loan, and increased lender recourse to FHA lenders. What they don’t include, of course, is a program-wide minimum FICO, or program-wide increase in the down payment. Generally speaking, most agree that the changes announced to FHA underwriting seem to be less restrictive than anticipated and more supportive of mortgage credit availability and the housing market at the expense of minimizing losses to the MI fund.

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First Time Home Buyers - Are you pretending to be rich?

If you’re a first time home buyer looking to purchase their first home in Temecula, Murrieta or other portions of Riverside and San Diego Counties, you have to be wondering how did so many first time home buyers end up in such financial trouble and in many cases losing their first time home to foreclosure?
There’s been a lot of finger pointing (some justified, some not) at mortgage lenders, Realtors, the federal government for our current housing crisis and even the families who are now facing foreclosure.
Sometimes bad things happen to good people and their problems may not be their fault. But many of these economic problems are because these first time home buyers were “pretending” to be rich.
Thomas J. Stanley, author of “The Millionaire Next Door” says the current housing and credit crisis has presented us with an opportunity to cure the “pretenders”.
If you’re in the market for your first home, make sure you’re not a “pretender” by taking a cold hard look at your balance sheet and at your life to determine if you are truly ready for the responsibility of owning your first home.
Stanley recently released a new book “Stop Acting Rich…And Start Living like a Real Millionaire”. (buy the book here) In his new book a millionaire is defined as someone with net value investments of $1 milllion or more. The investments include such items as cash, stocks, bonds, mutual funds and equity shares in a private business.
You’ll notice he doesn’t include the traditional measure of equity in real estate, which is not tangible and really only relevant if you happen to be selling at any given point. Some may disagree, but the housing crisis has shown us that equity is a very fleeting concept.
Here’s some interesting facts that Stanley discovered in his study of the wealthy.

  • 86% of all prestige or luxury makes of motor vehicles are driven by people who are not millionaires.
  • Typically millionaires pay $16 (including tip) for a haircut
  • Nearly four in 10 millionaires buy wine that costs about $10
  • In the U.S. there are nearly three times more millionaires living in homes with a market value under $300,000 than there are living in homes valued at $1 million or more.
  • The number one preferred shoe brand worn by millionaire women is Nine West. Their favorite clothing store is Ann Taylor

If you’re a first time home buyer, now is the time to quit “pretending to be rich” and manage your financial life with a goal to “start living like a real millionaire”.

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Stop Foreclosure - You lost your home, you may still have to pay!

Most homeowners in Temecula, Murrieta and other portions of Riverside and San Diego Counties who are facing foreclosure are confronted with, perhaps, the most difficult decision in their life so far.

Stop Foreclosure Temecula - Save your home

Their home may be worth 50% of what they owe, they’ve suffered a financial hardship that makes them unable to keep up the payments, so getting rid of the debt seems like the best solution.

A fresh start?

Maybe not

Former homeowners may still be on the hook if there’s a difference between what they owed on their mortgage and what the bank could sell it for at auction. And these “deficiency judgments” are ticking time bombs that can explode years after borrowers lose their homes.

By Les Christie, staff writerFebruary 3, 2010: 3:21 PM ET

NEW YORK (CNNMoney.com) — As terrible as it is to lose your house to foreclosure, at least it’s a relief to put your biggest financial headache behind you, right?

Wrong.

Read the complete article

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Is a short sale the right choice for first time home buyers?

First time home buyers in Temecula, Murrieta and other portions of Riverside and San Diego Counties have two choices when it comes to buying their first home.

1) Their first home can be a foreclosure, bank owned or REO (same thing!)

2) Their first home can be a “short sale”

Who should buy a short sale?Here’s some valuable insight from a great Real Estate blog: AgentGenius.com

People who don’t have a hard and fast time-line can be great candidates for short sale purchases. They can exchange their ability to give time and patience for instant equity on a below market priced property.

Read the complete article

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First Time Home Buyers- Should you buy a condo?

First time homebuyers in Temecula, murrieta and other portions of Riverside and San Diego Counties are seeing the prices on condos reach a level, where the monthly payment on their first time home would be more than they are paying for rent.

So is now the time for a First Time Home Buyer to buy a condo for their first home?A condominium is very often the first home of choice many first time homebuyers in Temecula, Murrieta, and other portions of Riverside and San Diego Counties. The price, the locations, the amenities, the low upkeep all make condos a very attractive alternative to single family homes, but there are some landmines out there, so watch your step.

In a previous post I mentioned some of things to keep consider when buying a condo as your first home.

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Here’s some updated information you’ll need if a condo is your choice for your first home. Unless you are a first time homebuyer with sufficient savings to pay cash for your first time home, the financing of your first condo has gotten more difficult.

Available inventory is the least of your worries. There are plenty of units available whether it be a foreclosure (REO) or a short sale, but getting financing is a “whole other story”.

At first you may think the “guidelines” for first time condos are keeping you from owning your first home, and they are but those guidelines are designed to protect your interest and the interests of the lender who will be financing your first home purchase.

Here are some highlights:

1. The majority of the units in a condo project (usually 60%) have to be occupied by owners. If it’s less, you would be buying in essence an apartment, and you likely live in one already.

2. No more than 15% of a condo project units can be more than 30 days delinquent on HOA dues. If the other owners aren’t paying their HOA dues, they will be looking at you to make up the shortage.

3. A requirement that borrowers must now obtain a condo-owners insurance policy unless the master policy provides interior unit coverage; coverage may not be less than 20% of the assessed value. Most condo association master policies don’t cover contents, so this would be an added expense to your monthly payment.

4. The homeowners association must have at least 10% of its budgeted income designated for replacement reserves and adequate funds budgeted for the insurance deductible. If the homeowner’s association cannot cover operating costs, new condo owners could expect to see a string of assessments just to pay the daily operating costs.

It’s not hopeless for Temecula  first time homebuyers who are thinking about a condo as their first home, but it’s caveat emptor (buyer beware). Make sure the Realtor you are using is aware of these changes, otherwise you’ll be facing an uphill climb on a very “slippery slope”.

To speak with a first time home buyer specialist, who can help you with this information, please call or email us. For more valuable first time home buyer information, subscribe to the blog. To save or share, click on the button below.

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First Time Home Buyers-your children's cell phone bill may get more expensive!

First time home buyers in Temecula, Murrieta, and other portions of Riverside and San Diego Counties as well as homeowners, apartment dwellers, Temecula Realtors, in fact anyone with a cell phone or wireless device could see their monthly bills rise, without making an extra call. Cell phones for children are as much a part of “school supplies” as pencils, paper and backpacks. They help you arrange for pick-ups, set up “play dates”, get the “I forgot my homework” call or “I forgot to tell you there is soccer practice after school and I need my stuff”

Well that convenience may get more expensive, unless you act now!

Imagine this call, three or four times a day to each one of your kid’s cell phones:

Johnny: Hello!

Caller: “The warranty on your car is about to expire”

Johnny: “But I don’t have a car”

Caller: “Auto repairs can cost you thousands of dollars over the car’s lifetime”

Johnny: But I’m not old enough to drive

Caller: “For only $29.95 a month, you can protect yourself against those costly repairs”

Johnny: “OK, but I’m going to have to ask my mom to raise in my allowance”

Cell Phone Numbers Go Public this month.
All cell phone numbers are being released to telemarketing companies and you will start to receive sales calls.
YOU WILL BE CHARGED FOR THESE CALLS
To prevent this, call the following number from your cell phone: 888-382-1222.
It is the National DO NOT CALL Registry.

It will only take a minute of your time… It blocks your number for five (5) years.

You must call from the cell phone number you want to have blocked.

You cannot call from a different phone number.

HELP OTHERS BY PASSING THIS ON... It takes about 20 seconds.

www.donotcall.gov

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First Time Home Buyers - 10 Questions in a volatile housing market

First Time Home Buyers in Temecula, Murrieta and other portions of Riverside and San Diego Counties face a tough decision when deciding if now is the time to buy their first time home.

The U.S. housing market has been in a slump for the past four years. When will it ever end?
In recent years, real estate has proven as jittery and unreliable as any other market. The average U.S. home price nearly doubled between January 2000 and April 2006, according to the First American LoanPerformance index. Since then, the average has fallen about 30%

Here is a guide to navigating a fractured and volatile market:

1. Is the housing market getting better?

It has shown some signs of healing this year, but the much-touted recovery is tentative and fragile.

Read the complete article

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First Time Home Buyers - Funds still available for Down Payment Assistance

Riverside County Down Payment Assistance

Qualified First Time Home Buyers in Temecula, Murrieta and other portions of Riverside County have down payment assistance waiting for them from the County of Riverside, including a first time home buyer tax credit that can be used IN ADDITION to the $8000 First Time Home Buyer Tax Credit offered by the Federal Government.

The Riverside County down payment assistance programs are designed to help qualified low and moderate income first time homebuyers with down payment assistance up to 20% of the purchase price. Riverside County has four programs, and the qualifications vary with each program.

For more information:

The Neighborhood Stabilization Housing Program

Redevelopment Homeownership Program

First Time Home Buyer Program

Mortgage Credit Certificate

For more information on the County of Riverside Down Payment Assistance Programs:

Riverside County Down Payment Assistance

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More Help for Temecula Homeowners!

It is estimated that one in seven homeowners in Temecula, Murrieta, and other portions of Riverside and San Diego Counties can no longer afford their mortgage payments and have stopped making them.

According to recent Temecula real estate market projections, each foreclosure costs the surrounding Temecula homeowners $5000 in property value.

In one of the first government initiatives that has a chance to help Temecula homeowners is the new programs to offer lenders who have “piggyback mortgages” an incentive to lower payments or eliminate the loans all together.

As part of its $75 billion foreclosure-prevention program the Obama administration has been offering lenders who made so-called “piggyback” mortgages incentives to lower payments or eliminate the loans entirely.

Second loans allowed consumers to make a little or no down payment and they were all the rage while property values were on the rise.  Now, however, they are an obstacle to alleviating the housing crisis. That’s because piggyback lenders — fearing they won’t be repaid — can veto a borrower’s efforts to modify their primary mortgage.

The trouble with Obama’s offer is that no one was interested until Tuesday, when Bank of America (BOA) signed up.   If more lenders follow Bank of America it could clear the way for more mortgage companies to cut borrowers’ principal balances on their primary loans, but administration officials appear wary of subsidizing such reductions with taxpayer money, because it could spark yet another backlash from critics who claim it’s unfair to people who are still paying their mortgages on time and a bailout for banks that made reckless loans.

But many experts say dramatic changes are needed.  “Unless you modify principal, there is absolutely no hope of restructuring mortgages on a mass scale to keep people in their homes,” Daniel Alpert, managing director of the New York investment bank Westwood Capital LLC said earlier this month. “Eventually their hand will be forced.”

If you’re a homeowner with a “piggyback” mortgage, call or email us and we’ll try to help you figure out the best option for you to stop foreclosure. For more valuable homeowner information subscribe to the blog. To save or share with a friend, click on the button below.

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$8000 First Time Home Buyer Tax Credit-why it may take months to get your money!

First time home buyers in Temecula, Murrieta and other parts of Riverside and San Diego Counties who qualified for the $8000 First Time Home Buyer Tax Credit and are eagerly awaiting their refund, will need PATIENCE!

Last week, the IRS opened up for business (i.e. it’s time to send in your tax returns, folks) and released the new form that home buyers eligible for a tax credit need in order to get their tax credit dollars.

But as is the case with most IRS rules and regulations, getting your tax credit cash isn’t going to be as easy as you might have wished.

Read the complete story

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First Time Home Buyers - Don't flush your credit down the drain!

If you’re a first time home buyer in Temecula, Murrieta or other parts of Riverside and San Diego Counties, you might have been  tempted to just stop paying your credit card bills? I mean, How bad can it get?

Maintaining a good credit score can make the difference between a first time homebuyer and a long time renter.

A credit score of 620 for first time home buyers is the new “Mendoza line”. Fall below that and your chances of getting a loan for your first time home are almost ZERO!

Don’t Flush Your Credit Down the Drain

Posted January 12th, 2010 by Carrie Davis

Ever tempted to just stop paying your credit card bills? I mean, what’s the worst that could really happen? We created our latest infographic to explain how your creditors might retaliate if you stop sending them money each month. (Hint: the pipes get rustier and the rats get uglier the further down you go.) Don’t let this happen to you!

Read the complete article

For a Free Credit Credit Evaluation

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$8000 Tax Credit for Temecula First Time Home Buyers only 94 days!

First time homebuyers in Temecula, Murrieta and other portions of Riverside and San Diego Counties only have 94 days to qualify to receive the $8000 First Time Home Buyer Tax Credit.

For more information on the Tax Credit

Don't roll the dice with $8000

For Temecula first time home buyers to be eligible to receive the $8000 tax credit they have to be “in escrow” by April 30 (94 days from January 25) and close on or before June 30.

In today’s challenging market first time home buyers who have decided that the $8000 First Time Home Buyer Tax credit is too much to leave on the table, need to act now!

Is it worth it? Read what these happy homeowners have to say.3 People the homebuyer tax credit helped

By Les Christie, staff writerJanuary 24, 2010: 4:57 PM ET

NEW YORK (CNNMoney.com) — The road to homeownership was hard for Valatisha Jacinto.

The Waco, Texas, schoolteacher had wrecked her credit struggling to pay for college, and later trying to support herself and her daughter on a teacher’s salary. She knew she wanted to buy a home, and that meant she needed to clean up her credit.

Read the complete story

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FHA announces changes to help homeowners

Homeowners can now apply for a federally backed mortgage modification program before they get behind on mortgage payments, the Federal Housing Administration announced Friday.

A change in the rules will allow homeowners who experience a sudden loss of income or other financial distress to apply for a loan modification though the Housing Affordable Modification Program before they miss a payment. Previous rules only admitted homeowners who were at least 60 days behind.

Homeowners in Temecula, Murrieta and other parts of Riverside and San Diego Counties who have suffered a financial hardship can take advantage of these changes.

Distressed homeowners only need to do two things:

1. Determine if you have an FHA loan

2. Call your lender!

Too many distressed homeowners are forced into foreclosure because they had already “circled the wagons” and didn’t make the call.

Read the complete story

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New Mapping tools for First Time Home Buyers

First time home buyers moving to Temecula, Murrieta and even other portions of Riverside and San Diego Counties are faced with challenges not even the best GPS can solve.

We have more Avenidas, Vias, Cortes and Calles with Spanish and Spanish sounding names (I had four years of Spanish classes and some of these names sound suspiciously made up). The result? A reto de navegación (Navigation challenge according to Google translate).

Of course you’re going to want to tell your friends and family members about your first home and a house warming party is on the calendar, but how the heck can you give directions when you’re lucky to find your way home without getting lost.

Help is on the way. The search engine Bing, has released two new mapping tools to help first time home owners.

Destination Maps lets you select a map area so that you can provide friends detailed directions from any direction.

Destination Maps

For more information on Destination Maps

All the guests found their way to your house warming party (and hopefully back home). The boxes are unpacked, the cable is hooked up and you’re wondering what is there to do in my new town?

Bing has also introduced Bing Local Events

No plans this Friday? Make some. Bing Maps newest application Local Events allows you to search for what’s happening around where you plan to be. Local Events will pop up the time and locations of nearby shows and community events.

Bing Local Events

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First Time Home Buyers-Stop me if you've heard this

First time home buyers in Temecula, Murrieta, and other portions of Riverside and San Diego Counties are bombarded with information proclaiming: “NOW IS THE TIME TO BUY!”

But is it really? The CEO of Century 21 International, thinks so.

Watch Video:

Should I wait?

Am I ready to buy?

The First Time Home Buyer Tax Credit

What does the Wall Street Journal say?

There you have it, now you just have to answer one more question?

Is it the right time for me?

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First Time Home Buyers-Will it be tougher to get your first time home loan?

First Time Home Buyer Loan

First time home buyers in Temecula, Murrieta and other portions of Riverside and San Diego Counties MAY be affected by the new changes announced by the Department of Housing and Urban Development (HUD) today.

What lenders look for in a loan application

Harder to get a loan from Uncle Same?

By Tami Luhby, senior writerJanuary 20, 2010: 3:53 PM ET

NEW YORK (CNNMoney.com) — It’s going to be harder to get a government-backed mortgage from now on.

Looking to shore up its weakening finances, the Federal Housing Administration is set to announce stricter standards on Wednesday.

Read More

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First Time Home Buyers waiting for their $8000 Tax Credit Money

First time homebuyers in Temecula, Murrieta and other parts of Riverside and San Diego Counties who qualified for the $8000 First Time Home Buyer Tax Credit, will be waiting longer for their refund than originally anticipated. 

By Les Christie staff writerJanuary 16, 2010: 6:54 AM ET

NEW YORK (CNNMoney.com) — Good news homebuyers: You can file for your $8,000 first-time buyer tax credit again.

Bad news: You still can’t e-file your taxes if you want the cash. And there are long delays.

To read the complete story

For more information on the First Time Home Buyer Tax Credit

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First Time Home Buyers - Big changes on the way for your credit cards

First Time Home Buyer Credit

First time home buyers in Temecula, Murrieta and other portions of Riverside and San Diego Counties need to be aware of the recent changes to credit cards announced by the Fed.

The Federal Reserve Board on Tuesday approved a final rule amending Regulation Z (Truth in Lending) to protect consumers who use credit cards from a number of costly practices. Credit card issuers must comply with most aspects of the rule beginning on February 22.

Most credit card companies have already sent information to their card holders informing them of the changes. But these companies have also, begun reducing available credit limits and raising interest rates ahead of these changes.

As a result your credit score may have dropped and you haven’t used the card or missed a payment. If you are a first time home buyer in Temecula, Murrieta or other parts of Riverside and San Diego Counties, make sure your credit is in order BEFORE you begin searching for your first home.

For a Free Credit Evaluation

(mention First Time Home Buyer Network for the Free Evaluation)

For more information on what lenders look for on your credit

Credit History

For more information on how your credit score is calculated

Click Here

To read the full press release, including a link to the online publication

Click Here

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First Time Home Buyers - a must have for your next Temecula Home Search

Homes in Temecula Wine Country

Temecula First Time Home Buyers and first time home buyers moving to Murrieta, Winchester, Menifee and North County San Diego are just minutes from some of the best wine tasting in California. With 25 award winning wineries, Temecula wine country promises a pleasant day trip for first time home buyers as they relax after the thrill and stress of searching for their first time home in Temecula and the surrounding communities in Southwest Riverside County.

If a home search in Temecula, Murrieta and surrounding communities is in your future. Here are5 must have iphone apps for wine lovers

For more information on Temecula Wine country:

Temecula Wineries and Vineyards

Temecula Wine Country Information

Temecula Wine Country Blogs

Need maps of Temecula Wine Country?

More cool iphone apps:

10 iphone apps for beer drinkers

20 fantastic FREE iphone apps for parents

9 essential iphone apps for cat lovers

10 best iphone apps for dog lovers

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First Time Home Buyers - The "Payment Buster is here!

Among the challenges facing Temecula First Time Home Buyers and first time home buyers in Murrieta, Riverside and San Diego is the almost inevitable increase in monthly housing expense.

For Ray and Maureen, it was no different. They had been renting a nice one bedroom apartment for $1000 a month. They liked the apartment, it’s location, and the amenities but it was starting to feel “small” and it wasn’t theirs. They both had good jobs and had been able to put away a nice “nest egg”, but they both wanted to own a place they could call their home and most importantly could afford.
Ray and Maureen talked about owning their first home almost every day. They scoured the internet, checked out the newspaper ads and visited open houses of homes for sale in the Temecula and Murrieta area. One thing became painfully obvious: Owning a home was going to cost them more each month, and that was a scary thought.
But the promise of the $8000 First Time Home Buyer Tax Credit, kept them “in the market”  and hoping against hope they could find a way to become first time homeowners.
You can call it fate, kismet or karma but as Maureen was getting her morning coffee, she met  Diane, a local Realtor and of course the conversation turned to real estate. Maureen told Diane of her and Ray’s frustrations. Diane said she would see what she could find out and promised to get back to her.
Diane called me and my initial reaction was “Ain’t no way”.
“But she’s really nice, and I want to help them”, Diane pleaded.
Well, Diane and I put our heads together and came up with the “Payment Buster” plan. Based on our calculations for Ray and Maureen to get a home in the areas they wanted, the monthly payment would be between $1500-$1600 month*, so we had to figure out a way to get that into Ray and Maureen’s comfort level.
The first step, was to determine if Ray and Maureen would qualify for the Riverside County MCC tax credit program for first time home buyers. They did and they would be able to increase their withholding allowances which would increase their take home pay. For more information

Click Here
A start, but still not enough.
The increase in take home pay cut $200 off, but there was still a $300/mo difference.
The solution? Because Ray and Maureen were qualified first time home buyers, they were eligible to receive the $8000 First Time Home Buyer Tax Credit. We advised them to open a savings account and when their check came from Uncle Sam, subsidize their monthly payment with $300 from the savings account. At that rate the $8000 First Time Home Buyer Tax Credit would last them 26 months, which they felt would be more than enough time to get acclimated to the increased costs of homeownership. For more information on the Tax Credit

Click Here
Ray and Maureen are not home yet. But they have a plan that will help them feel very comfortable when they do finally pick up the keys.
If you’re a first time home buyer and concerned about the monthly payment on your first home, give us a call or email us, there’s likely a solution for you too.
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*Monthly payments are an estimate only and based on a purchase price of $200,000, FHA loan with 3.5% down, fixed rate for 30 years, 5.5% interest rate/5.78 APR

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First Time Home Buyers - Once AGAIN!

In 2002 the Temecula real estate market was showing signs of another boom and Alan and Mia decided the time had come to buy their first home.

With the help of their Realtor, we were able to find the right four bedroom three bath home, across from the park and walking distance to the elementary school where their children were already enrolled. I’ll never forget the smiles when they received their keys for their first home.

Fast forward to 2006 and along with economy, Alan and Mia were seeing signs of tough times ahead. Alan had taken a position as a sales agent with one of Riverside County’s top homebuilders and had a great three and a half years. Sales began to slow at the condo project and before year end the builder closed down the project.

The resulting drop in income was devastating and before the end of 2006 they were forced to file bankruptcy and lost their dream home to foreclosure. One of the first casualties of the Temecula housing bubble.

I caught up with Alan and Mia in the middle of 2009, and learned that Alan had returned to school and had just graduated as a respiratory therapist. He was employed by one of the top hospitals in San Diego and this stability had rekindled their desire to become homeowners again.

We put together a plan that would enable them to own a Temecula home again.

Step One was to get their credit “cleaned up”. Working with an experienced credit repair specialist, they were able to improve their FICO scores and clear up the misreported items. FREE credit evaluation (mention the First Time Home Buyer Network)

Step Two was to establish a budget so Alan and Mia would have the savings to handle the 3.5% FHA down payment requirement plus have some reserves to handle moving expenses and to cover those things that will turn their new house into a home.

Step Three was to set some parameters for their Temecula home search. Like most home buyers their wish list was long but experience had taught Alan and Mia that having a monthly payment they could afford was more important than the spa tub in the master bedroom.

Fast Forward again to 2010 and Alan and Mia are earnestly searching for their new “first time home”. Consulting with their first time home buyer specialists they have been able to pinpoint the neighborhoods they can afford and have become “pros” using the online search tools to preview homes.

Their 2009 tax returns will be completed by the end of January, so we can begin putting together the paperwork for the Riverside County Down Payment Assistance Program. For more information on the Riverside County Down Payment Assistance Program

Alan and Mia will be rewarded because they put in the hard work and made the sacrifices necessary to become “first time homeowners” again.

Whether you’re buying your first home or tenth home, it’s important to remember that it’s a process not an event. It takes study, it takes preparation and most importantly it takes patience and the help of first time home buyer specialists.

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First Time Home Buyers - How to make a fortune from the biggest bailout in U.S. History

First Time Home Buyers in Temecula, Murrieta, Riverside and San Diego Counties are wondering if now is the time to buy their first home.

Ron Insana, author of the book “How to Make a Fortune” believes that there has never been a better time for Temecula first time home buyers and first time homebuyers in other parts of Riverside and San Diego Counties to make a fortune from the biggest bailout in US history.

To find out if it’s your time to “Make a Fortune” call or email us to speak with a first time home buyer specialist. For more valuable first time home buyer information, subscribe to the blog. To save or share with a friend click on the button below.

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Visit msnbc.com for breaking news, world news, and news about the economy

1999 to 2009 How different is the "new" first time homebuyer?

Google Maps Real Estate

They say” the more things change the more the stay the same”.

Home buyers in Temecula, Murrieta and San Diego may agree.

These figures indicate there may be a lot of truth in that old adage:

1999: 37% of buyers searched for a home online.

2009: 90% of buyers searched for a home online.

1999: median home value is $137,600.

2009: median home value is $172,600 (but note that some reports reflect that when accounting for inflation, the value hasn’t changed at all this decade).

Temecula Homes for Sale

1999: 82% of buyers purchased detached, single family homes.

2009: 78% of buyers purchased detached, single family homes.

1999: 46% of buyers choose suburban neighborhoods.

2009: 54% of buyers choose suburban neighborhoods.

Temecula Homeowners

1999: 68% of buyers were married couples.

2009: 60% of buyers are married couples.

1999 and 2009: the median age for buyers was 39.

1999 and 2009: “neighborhood quality, affordability, and convenience to work and school have consistently been top priorities.”

Temecula Crowne Hill

You can draw your own conclusions from these numbers, but other than the explosion of on-line home search (37% to 90%) things are just about where they were ten years ago.

Figures from National Association of Realtors)

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CalTrans helps First Time Home Buyers with their commutes

First Time Home Buyers in Temecula and those in Murrieta, Wildomar and Menifee have gotten help from Caltrans with up to date traffic information for their commutes.

First Time Home Buyer Commuters

First Time Home Buyers who are now commuting after moving to Temecula, Murrieta, Wildomar or Menifee can now get up-to the minute snapshots of freeway traffic conditions. It’s a simple as dialing three digits on their cell phone or accessing the website on their SmartPhones  

The California Depart of Transportation (CalTrans) has completed the installation of 74 solar-powered detectors along Interstates 15 and 215 that monitor traffic flow. The information is disseminated on demand through a telephone and computer system rolled out by Riverside County Transportation.

These detectors close the gap between San Diego (I-15) and the 91 in Corona. This will allow first time home buyer commuters from Lake Elsinore, Corona, and Perris to check on the status of their commutes also.

To access the system, first time home buyers and other commuters can dial 511 on their wireless phones or access the website  at

www.ie511.com

To read the complete

Californian article

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New Tax Credit for California First Time Home Buyers?

Schwarzenegger's New Tax Credit

The Obama Administration’s $8000 First Time Home Buyer Tax Credit is set to expire on April 30, 2010 (you have to be in escrow by that day) and many first time home buyers are wondering if they will miss out on this incentive to own their first home.

For more information on the $8000 First Time Home Buyer Tax Credit

Well our “Governator” trying to help first time home buyers in Temecula, Murrieta, San Diego and all of California.

During his State of the State address, Governor Schwarzenegger today announced his 2010 proposals for California. Included in the proposals is a recommendation to set aside $200 million for a new round of $10,000 state tax credits for first-time home buyers. The proposal expands upon the initial $10,000 state tax credit by including both new and existing homes. Last year’s tax credit applied only to new homes.

The tax credit could be combined with the recently extended and expanded federal tax credit for home buyers.

To read the complete press release

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Uncle Sam wants to help First Time Home Buyers

Uncle Sam Wants to Help First Time Home Buyers
When you buy your first home, chances are the payment on your first home is going to be more than you are used to paying for rent. ManyTemecula

Help from Uncle Sam

First Time Home Buyers have faced the same dilemna but found a helping hand.

Well, you have a rich uncle, who will help you with your new house payment.

NO, he’s not going to give you money each month to help with the payment. But, he will help you increase your take home pay.

We hope you have done your research into the benefits of homeownership, if you have you know there are a number of tax deductible items that are part of your mortgage payment.

You can take advantage of the tax benefits right away rather than waiting until next year for your tax refund. For more information on a special Riverside County Tax Credit:

Click Here

Of course, getting a fat refund check sounds good, but did you know what you have really done is lend money to Uncle Sam Interest Free, for a year!

Wouldn’t you rather have that money to use to help pay for your little piece of the American Dream?

Of course you would, and here’s how to do it

Just go to www.irs.gov/individuals and look for the IRS Witholding Calculator. Have your paystubs and W-2s ready (you’ll need them for your new home loan anyway) and follow the instructions. The calculator will give you an idea how you may increase your withholding numbers, which will increase your take home pay.

It’s always a good idea to have your tax preparer review your numbers before you actually make the change.

This is the one gift you don’t have to feel bad about not sending a Thank You card!

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First Time Home Buyers 3 Wishes for the New Year

We’ve passed through the magical milestone of the New Year and entered a new decade. Do you feel better? Experts say you should. We’re done with the “Aughts” (as 2000-2009 has come to be called) and our moving into the teens.

Teenage Years

And as any parent can tell you, the teenage years are nothing but fun.

Since there seems to be so much emphasis (by the federal government) on the power of positive thinking (green shoots will save us all!),

Here are 3 wishes for first time home buyers:

Real Estate Wish #1: The residential real estate market is stronger than it appears.

Buying your first home is a lot more than the investment value but too many first time home buyers are sitting on the fence waiting for prices to go lower. Good strategy? To learn more:

Why waiting may cost you more

According to the Wall Street Journal

Real Estate Wish #2: The Big Box Lenders will stop stalling and start foreclosing.

Shadow Inventory of Homes

Until we work our way through the “shadow inventory” of  homes that have been foreclosed upon or are just waiting, we will never get back to a “normal” real estate market.

Short term it probably means prices will still drop, but first time home buyers who think they can “second guess” the direction of the market may be facing higher interest rates and tougher loan qualifications which would negate any savings a small drop in price would bring.

Real Estate Wish #3: Someone in the Obama Administration will sum up the courage to be honest with the American taxpayer.

American Taxpayers

Mainstream media outlets have been reporting for months that we have hit the bottom. It may make them feel good but it ignores the “shadow inventory”, increasing unemployment which will lead to more foreclosures, and loan modification programs that have become band aids not cures for the homeowners facing foreclosure.

To read the complete article from MoneyWatch.com

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First Time Home Buyers your credit information is being sold!

Your Credit Information … A Hot Commodity Your Name is Being Sold – Take Action Now!

Your Credit Information is being sold

Having your credit checked is an important and necessary step in the first time home buying process. But very few people realize that each time their credit is checked, the “inquiry data” that the credit bureaus (Equifax, TransUnion, Experian) have on file has become a commodity that can be bought and sold. This information is being sold by the bureaus to other lenders…and also to companies that sell and resell the same names and personal information

That’s right – the Credit Bureaus have found a way to increase their revenues at your expense and without your permission!

Selling your Information

These “inquiry leads” include name, address, phone numbers (including unlisted), credit score, current debt history, property information, age, gender and estimated income. Your privacy is being sold, not just once but over and over again.

Lenders that purchase these leads at a premium will then do everything they can to recoup their investment and turn a hefty profit. Super sneaky bait and switch tactics are being used to lure clients from their reputable lender. Families have even been called by disreputable lenders and told that the lender they had been speaking to previously “passed on” the information to them, because they knew that they would be able to offer much better interest rates. One of our Families was contacted and told their loan had been declined by us, when in fact they were approved and scheduled to move into their new home the following week.The consumer credit reporting industry has provided a way to “opt out” and remove your name from their lists. You can contact them by phone at 1-888-567-8688 or online at www.optoutprescreen.com You must opt out at least 48 hours prior to having your credit checked to make sure it is processed in time. You have a five year or lifetime option, but the lifetime option does require a signed form. If a credit report needs to be run prior to the 48 hour waiting period – at least you are aware and informed, and can be on the look-out for suspicious phone calls or mailers from someone who has purchased your information.

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First Time Home Buyers become First Time Homeowners

First Time Home Buyer Dream

Mark, a firefighter, and Shanna, a stay at home mom had been planning to buy their first home from the day they were married seven years ago. Like most couples at the time home prices made it seem like just a dream. When the twins arrived two years later, things naturally got a little tight and they put that dream on hold.

When the housing market in Southern California began to implode and home prices dropped, they felt a glimmer of hope that maybe their dream wasn’t dead after all. They checked the internet, newspapers, and home magazines. When Mark had a weekend off, they would visit open houses religiously in search of their first home.

Although they were concerned that home values might still decline, they were more interested in providing a home for their twins than the investment value.

The internet is a wonderful source of information but it’s very easy to go into information overload. They calculated hypothetical mortgage payments and even attempted to pre-qualify themselves on a website. Many of the websites, promised unbelievably low interest rates, but Mark and Shanna soon discovered they would need a big down payment and perfect credit to qualify for those rates. Unfortunately, they had neither.

Most of their money each month went for living expenses so they had very little savings. Mark did have a 401k but they viewed that as their retirement nest egg.

Even though they were always careful with their credit, a couple of late payments last year on a credit card put their FICO score in a tailspin.

They felt their dreams slipping through their fingers until Mark’s sister refered them to a Realtor who specialized in First Time Home Buyers.

Their Realtor arranged a meeting with a lender who was also a First Time Buyer specialist and knew all the programs available that might help Mark and Shanna.

The First Time Buyer Specialists, sat down with Mark and Shanna, talked about their wants and needs. Together they came up with a plan that would have Mark, Shanna and the twins in their first home.

Mark and Shanna were interested in a certain part of town because the twins were approaching school age and the schools there were very highly rated.

Another meeting with their lender, determined that this part of town was eligible for down payment assistance funds from the County. Because they were First Time Homebuyers they could receive up to 20% of the purchase price that would be their down payment. For More information on Riverside County Down Payment Assistance,

Click Here

First Time Home Buyer Counseling

Their Realtor/Lender team counseled them on the lack of inventory in the Temecula and Murrieta markets and difficulties having too few houses presented. A little discouraged, they promised to continue until they found just the right house.

After a few weeks of house hunting, their Realtor showed them their dream home. They knew it as soon as they walked through the front door.

It had four bedrooms and three bathrooms, more square footage than Mark and Shanna imagined they would ever need. It had a large lot for the kids and was within walking distance to the elementary school and the park.

They called their Lender with the good news. A quck crunching of the numbers and it became clear their dream home was just beyond their reach. Their lender promised to call them back after he did a little research. Within a few minutes their lender was on the phone with good news.

Riverside County had additional funds available in their Mortgage Credit Certificate (MCC) program. Through the use of a “tax credit” Mark could adjust the withholding on his paycheck which would give him more take home pay each month, which the lender could use in qualifying. For more MCC information. Click Here

The stars were in alignment and Mark and Shanna began making plans. Their Realtor helped them write a competitive offer and got the bank to agree to pay all of their closing costs.

They sat down with the lender to start the paperwork and to their surprise, their new monthly payment would be about $250 less than they were paying for rent on a much smaller house. .

Even though there was a lot of paperwork, Mark and Shanna knew it was worth the effort and soon the family would have a place they could call home. Mark even took a Saturday off to attend the mandatory Home Buyer Education that was one of the requirements to receive the Riverside County Down Payment Assistance.

When Mark and Shanna moved into their new home, it was the happiest day of their lives. The house needed new appliances, some paint and new flooring in the kitchen, but it was theirs.

Shanna’s parents agreed to help them and gave them the money that would help make this house a home. Mark hated the idea but went along, vowing “to pay them back as soon as he could.”

Mark had heard about the tax credit for First Time Homebuyers but was unsure how it worked. He called his lender who confirmed the credit and told him he could amend his 2008 federal return, which had been filed in January, to get the benefit of the tax credit now. For more information on the $8000 First Time Home Buyer Tax Credit

Click Here

Mark checked with his tax “guy” who confirmed the information, amended the return and in a few weeks Mark will have enough money to pay back Shanna’s parents.

As Mark and Shanna found out, there is a whole lot more to owning a home than just its price.

First Time Home Buyers become First Time Homeowners

Mark and Shanna had been sitting on the fence for months, and frankly the splinters were starting to get to them. They hopped off the fence, made the commitment and are now living the life they pictured when they first got married.

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First Time Home Buyers - 3 reasons home prices may be going down

and why it may cost you more to own your first home!

Temecula First Time Home Buyers and First Time Home Buyers in Murrieta and first time home buyers in Riverside and San Diego Counties may find the cost of homeownership will actually increase.

First Time Home Buyer Dream

How is that possible?

3 Reasons home prices are headed lower!

By Les Christie, staff writerDecember 31, 2009: 6:36 AM ET

Prices have risen more than 3% since May, according to S&P/Case-Shiller.

But most forecasts predict price declines in 2010, with possible losses ranging from anywhere from 3% on up. Fiserv Lending Solutions, a financial analytics firm, forecasts that prices will fall in all but 39 of the 381 markets it covers, with an average drop of 11.3%.

To read the complete article, click here

So waiting until prices get lower is the smart thing? Maybe not!

If  you’re looking at houses today at  $190,000  with a minimum down payment of 3.5%, you would have a principal and interest payment of $1019.

$8000 First Time Home Buyer Tax Credit

Now fast forward six  months and the FED is no longer supporting the mortgage market and interest rates have increased 1%, but your dream home is now worth $171,000. Your monthly payment is now $1025.

Did we mention the $8000 First Time Home Buyer Tax Credit is no longer available?

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Still think waiting is a good idea?

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Follow the links below, for more information on why waiting may not be the best strategy.

The last unemployment data, shows an improving  market, what does that mean for home prices?

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Homes are cheap!

Homes are now cheap!

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First Time Home Buyers - WSJ says now is the time to buy!

Brett Arends of the Wall Street Journal has an interesting argument he pulled together using the latest Case-Shiller data, and double checked against Census data. 

In short, now is a good time to buy a home.

WSJ says the time is right for Temecula First Time Buyers

Real estate has now fallen 30% from its 2005 peak, at the same time as mortgage rates have also plummeted. In 2006 you had to pay an average of about 6.4% on a 30-year fixed loan, according to the Federal Reserve. Right now you can get deals for about 5%.

On average, buying a home now is as cheap as it was in the mid-1990s, when houses were an absolute steal.

  • But what about waves of mortgage resets coming in the next two years?
  • What about all the unemployment?
  • And the foreclosures?

Arends says these are all valid arguments for refusing to buy homes when they are expensive, or even averagely priced.

But the whole point about markets is that they adjust. Prices are now cheap. They reflect this bad news, and more. If you have a stable income, and you can get a 30-year mortgage at 5% or so, and you are willing to drive a hard bargain on a home in this market, this is your time

To read the complete article: Click here

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Temecula First Time Home Buyers, Beware the extra costs!

First Time Home Buyers in Temecula and Murrieta and first time home buyers in Riverside and San Diego Counties, watch out for the extra costs.

First Time Home Buyer Hidden Costs

I’m not talking about the “hidden costs” that magically appear at closing (New government regulations taking effect on January 1, will stop that), but rather the costs that you as a first time home buyer didn’t take into account when you started your home search in Temecula, Murrieta and other parts of Southern California. Homeowners should have 1% of the purchase price of their home in savings for improvements and surprise expenses, he says. “That is the absolute minimum. It’s better to have 2% to 3% socked away somewhere.”

To read the complete article: Click Here

Having enough “cash to close” is very often the most difficult part of the real estate transaction for most first time home buyers. Meeting with a First Time Home Buyer Specialist before you begin your home search will help you determine  how much you money you will need for closing and if necessary, he/she will help you work out a plan to get there.

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Bucket List for Temecula First Time Home Buyers in 2010

Bucket List for First Time Home Buyers

We’re at that time of year again, when there are lists for everything:

  • 10 top movies list,
  • Forbes list,
  • 5 top video rentals list,
  •  injured reserve lists,
  • 10 top celebrities in rehab, out and back in again. etc, etc,

Here’s a bucket  list for Temecula First Time Home Buyers. Think of it as the list of questions you need to ask and answer before buying your first home. A little preparation is time well spent. IT’S TOO IMPORTANT…DO IT RIGHT!

Buying your first home is really answering two questions:

1. What do you want to buy?

2. How are you going to pay for it?

Many first-time homebuyers pick out their houses before mulling their finances, but experts say it should be the opposite.

Yahoo! Finance put together this list of important questions for all first time home buyers.

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A rare loan modification

Stop Foreclosure

Many homeowners in Temecula and Murrieta  are trying to stop foreclosure and are very frustrated at their lender’s inefficiencies. It take months for a homeowner facing foreclosure to get an answer and in some cases for Temecula and Murrieta homeowners months just to be told their paperwork was never received.

Well distressed homeowners in Temecula, Murrieta and other parts of Riverside and San Diego Counties, can take heart. Sometimes a loan modification actually happens, but sometimes bad things happen too. Read more about credit scores “biting the dirt”

Credit Score Killer

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Your Loan Modification could be a credit score killer!

Temecula homeowners and homeowners in Murrieta and other parts of Riverside and San Diego Counties who are struggling to make their mortgage payments, have been turning to loan modifications as they try to stop foreclosure.

But many distressed homeowners are now finding their credit scores are falling dramatically even in the trial modification process.

Mortgage rescue: Credit

score killer

By Tami Luhby, senior writerDecember 28, 2009: 8:37 AM ET

NEW YORK (CNNMoney.com) — Most troubled homeowners view President Obama’s foreclosure rescue plan as a way out of their financial troubles.

But many don’t realize that entering a trial mortgage modification can actually hurt their credit.

CNNMoney recently received a flood of e-mails from readers complaining about the impact of trial modifications on their credit reports.

To be sure, many people who apply for the president’s plan are already delinquent in their mortgage payments, which wrecks their credit backgrounds. And obtaining a trial modification should affect borrowers’ scores because it shows they cannot meet their original obligation, experts said.

But being in a months-long trial period may only add to the pain.

Jason Axelrod learned that the hard way.

Axelrod, a municipal employee who lives outside Chicago, entered a trial mortgage modification program this spring.

He had not fallen behind in his mortgage, but he was finding it harder to make ends meet after his overtime was cut and his property taxes skyrocketed. Told it would not hurt his coveted 750 score, Axelrod secured a $565 reduction in his monthly payments.

Eight months later, Axelrod is still stuck in the trial modification, trying to satisfy his loan servicer’s endless requests for documents.

And to his horror, his credit score has plummeted to 644.

“It’s completely destroyed my credit,” said Axelrod. “If I had known it would affect my score, I would have never entered the program.”

Representatives at JPMorgan Chase (JPM, Fortune 500), which services Axelrod’s loan, are instructed to tell applicants that entering a modification could impact their credit histories, a bank spokeswoman said.

Despite his weakened credit score, there is at least some good news for Axelrod: After being contacted by CNNMoney.com, JPMorgan Chase said his permanent modification had been approved.

Credit reporting guidelines

Under the president’s plan, troubled borrowers can have their monthly mortgage payments reduced to 31% of their pre-tax income.

Homeowners are first put in a trial modification for several months to prove they can handle the new commitment and to give the bank time to collect the necessary income and hardship verification documents.

During this period, industry guidelines call for loan servicing companies to report borrowers to the credit bureaus according to their status before they entered the modification – either current or the number of days delinquent.

However, borrowers’ accounts are also designated with a code indicating they are in a partial payment plan.

The coding alone can impact credit scores, which measure a consumer’s financial health and range from 300 to 850 under the FICO system. The severity depends on how many payments the borrower missed before entering the program. Those who were current in their mortgages could see their scores fall up to 100 points, according to the Treasury Department.

Just what banks are reporting to the credit bureaus remains a matter of some debate. Some servicers have been inconsistent in following the guidelines, according to a Treasury official. Also, they don’t always report that their current borrowers have entered modification plans.

Some 24,000 trial modifications were given to those still current with their payments, as of early September. A total of 366,000 trial modifications were in effect at that time. The total number has since risen to just under 700,000, as of the end of November.

JPMorgan Chase, Wells Fargo (WFC, Fortune 500) and Citigroup (C, Fortune 500), which are among the nation’s largest servicers, declined to be interviewed for this article. A Bank of America (BAC, Fortune 500) spokeswoman said the bank follows industry guidelines.

According to the Mortgage Bankers Association, an industry group, servicers are required to report all information about their clients, including whether they are in modification plans. For seriously delinquent borrowers, this may improve their status somewhat since they will start making payments again.

“If you are in the trial period, over that three month period, you are going to improve your situation in most cases,” said Vicki Vidal, the group’s associate vice president for government affairs.

Once borrowers receive a permanent modification, their payment status is listed as current. However, the delinquency remains on their credit reports for up to seven years.

On top of that, the longer homeowners are listed as delinquent, the greater the impact on their credit score. That’s one reason why servicers should be quicker to convert borrowers from trial modifications to permanent adjustments, said Jan Jones, a housing counselor in Alaska.

Financial institutions have come under fire in recent weeks for dragging their feet in evaluating borrowers for permanent adjustments.

“What’s making people upset is the length of time lenders are taking to consider these workout plans,” said Jones, who works for Consumer Credit Counseling Service of Alaska.

Axelrod is already feeling the impact of his lower credit score. He ordered a new car this summer, believing it would come with a lower monthly payment. It arrived in mid-December.

But because of his newly blemished credit background, his two credit unions turned him down for a car loan. His dealership told him the best he could get is a 12% rate, a hefty hike from the 4.7% he was paying before.

“This is the biggest nightmare,” he said. “My credit is completely useless.” To top of page

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First Time Home Buyers "wave" good-bye to 2009

2009 marks the end of the decade of the “Aughts” or “Zeroes” for first time home buyers in Temecula and Murrieta.

We had the 60s, 70s, 80s and 90s, but we never came up with a name that the American Public embraced for the soon to end decade.

Temecula Real Estate ride

If you were a homeowner in Temecula, Murrieta or most of California for that fact it was definitely the decade of the “real estate roller coaster”.

Hopefully the next decade will be a “thrill ride” with enough hills and curves to be interesting, but not like the pothole strewn heartstopper we are finishing.

Here’s a “Wave” good-bye to 2009

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First Time Home Buyers - Where the deals are

Buy a HUD Home

First Time Home Buyers in Temecula, Murrieta and other areas of Riverside and San Diego Counties have become frustrated because there just aren’t any deals to be had.

As the government looks to further stimulate the housing market in the face of a steadily rising national inventory of HUD foreclosures, huge savings are being realized on these properties, according to Annapolis, Maryland-based Heavy Hammer, Inc.

The online networking and consulting company cited a recent study showing government foreclosures are routinely underpriced by 8 to 10 percent and said incentivizing aggressive valuations on these properties by third parties is creating opportunities of a lifetime for savvy first-time homebuyers.

In addition, Michael Urbanski, Heavy Hammer CEO, said there are little-known gaps in the rules governing the appraisal process for foreclosure properties. He said only a single appraisal for government foreclosures is required, and acceptance of bids up to 11 percent below asking price is mandatory.

“This chronic undervaluing of real estate held by the federal government is good news,” Urbanski said. “This sort of government practice assistance opens up incredible opportunities to buyers who have a basic understanding of the process.

Most importantly, it could go a long way in getting the market back on the right track.”

For more information on HUD Homes:

Click Here

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7 Tips for First Time Home Buyers - How to buy in a down market

7 Tips For Buying Your First Home In A Down Market

Buying your first home, a big decision

Prospective first time home buyers in Temecula, Murrieta and other parts of Southern California have an edge in a down market, but this doesn’t mean they are guaranteed to make money on the properties they buy. When real estate sales are slow and there is a glut of homes for sale, buyers have an opportunity to pick up a house on the cheap. The operative word here is “opportunity”. There are times when you should pounce and times when you should show restraint and avoid an impulse buy. Knowing the difference could save you thousands of dollars.

Here are 7 steps for first time home buyers to keep in mind as they look for their first home.

Tip No.1: Do Your Homework

Learn the market! Home prices vary by neighborhood, so focus on “comps” (comparable sales) in that neighborhood. You can use internet sites like: Zillow Truliafor a starting point, but eventually you will need a Realtor who is a First Time Home Buyer Specialist to get you the latest information from the local MLS.

Tip No.2: Get Your Ducks in a Row

To make sure you’re ready to pounce on a deal when it becomes available, get pre-approved with a first time home buyer specialist you trust. To find out what lenders look for in a loan application Click here

Tip No.3: Watch For Motivated Sellers

In a down real estate market, like Temecula, Murrieta and other parts of Riverside County, finding a motivated seller is not the problem. If they’re selling they’re motivated. Motivated sellers provide additional bargaining power for potential first time home buyers and you may be able to get them to pay all or a portion of your closing costs as well as negotiate on the listing price.

Tip No.4: Negotiate With the Realtor

Many experts believe first time home buyers can get a Realtor to work for less, and some will, but you get what you pay for. Work with a Realtor you trust who is a First Time Home Buyer Specialist and he/she will save you a lot more money and tension than someone who will work for a little less.

Tip No.5: Make Sure You Have Clear Title

Unless you’re a first time home buyer who is paying cash, you will need a loan. As a requirement of that loan you will get a title policy from the lender and there will be an owner’s title policy which will insure there are no known pre-existing liens against the property.

Tip No.6: Avoid a Bidding War

In a real estate market like Temecula, Murrieta and most of Southern California this is easier said than done. There seems to be too many first time home buyers for too few houses. But if you enter in a bidding war remember two things: 1) Don’t exceed the amount for which you are pre-approved 2) Remember Step 1, if you offer too much for the house and it doesn’t appraise it could jeopardize the entire transaction.

Tip No.7: Don’t Be Afraid To Walk Away

If you are not getting the deal you and your Realtor feel you deserve, do not be afraid to walk away, and look at the next home on your list. As inventory increases you will have more opportunities. This is not the easiest of steps but the biggest mistake you can make is to pay too much for your first home.

To read the complete article on investopedia:

click here

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First Time Home Buyer Tax Credit questions?

TurboTax on Facebook

If you’re a First Time Home Buyer in Temecula, Murrieta or Riverside County and have questions about the $8000 First Time Home Buyer Tax Credit the best source for the answers is a CPA.

TurboTax, one of the leading tax preparation software programs has made available a CPA on Facebook to answer your questions.

Click Here

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Tax Credit for San Diego First Time Home Buyers

First Time Homebuyers in San Diego County may be able to lower their federal income tax liability because of an infusion of cash from the state.  Officials announced Friday that the county had received $15 million in state funds toward the Mortgage Credit Certificate Program. These funds are in addition to an earlier award of $11 million.

The Mortgage Credit Certificate (MCC) Program allows San Diego First Time Home buyers to lower their federal income tax bill up to 20% of their mortgage’s annual interest.

First-time homebuyers purchasing houses or condominiums within the city limits of San Diego can receive a tax credit equal to either 15 or 20 percent of the mortgage interest they pay each year on their federal income taxes. This increases their take home pay, which helps them make their monthly mortgage payment and qualify for a larger first mortgage.

The first time home buyer tax credit may be used in conjunction with the San Diego Down Payment assistance and closing cost assistance for first time home buyers.

For more information on the tax credit for San Diego First Time Home Buyers,        Click Here



 

 

 

 

 

 

Should Temecula homeowners pay or go?

Should I pay or go?

The process of a bank seizing your home through foreclosure has to be one of the worst feelings imaginable. It’s more than just the structure, it’s more than the four bedrooms, three bathrooms and spacious kitchen. It’s where you and your family shared memories of good times and bad times.

It’s the emotional attachment you feel that makes the pay or go question that much harder to answer. But you can’t ignore the financial ramifications of foreclosure and how it may impact the rest of your life.

Once you’ve sorted through all the emotional aspects, it’s time to take a look at the financial aspects. Here is a quick  “pay or go” calculator.

Click here

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Extreme Loan Modifications for Temecula Homeowners

Stop Foreclosure

Help for Homeowners to stop foreclosure, many homeowners  across the country are getting great deals on loan modifications. Some with interest rates as low as 2%. As the Obama Administration continues to pressure banks to mitigate their foreclosure losses, homeowners in Temecula, Riverside County and across the country are keeping their homes and avoiding foreclosure.

By Les Christie, staff writerDecember 17, 2009: 10:43 AM ET

NEW YORK (CNNMoney.com) — At 8 a.m., homeowner Rodney Wynn was drowning under his $1,800-per-month, 13.4% interest rate mortgage. But by 5 p.m., he had found some relief: a 4.7% loan with a $970 monthly payment.

Wynn, a program director for a youth home in North Carolina, is just one of a growing number of homeowners getting dream workouts on their mortgages. Some are even getting sweet 2% deals.

Nearly 80% of all loan modifications resulted in lower payments in the second quarter (the latest figures available), according to the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision. That’s up from just over 50% three months earlier. Still, just a paltry 4% of all homeowners in need of workouts are receiving them.

To read the complete article, click here

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First Time Home Buyers - Should you wait?

Many first time home buyers in Temecula and other parts of Southern California feel that now may not be the best time to buy their first time home. These first time buyers feel that waiting is a better strategy.

Temecula Real Estate

So what’s really going to happen to the Temecula real estate market and how will that impact Temecula First Time Home Buyers?

In a previous post we talked about the stars aligning AGAINST first time home buyers. To read more click here

Well here is more evidence that waiting may not be your best bet.

According to a report from Radar Logic, delinquencies have reached their highest peak in decades and the most bearish observers believe the inventory will flood the market once the government programs end, boosting supply and decreasing home prices.  But Radar Logic analysts side with those like Rick Sharga of RealtyTrac in saying that banks will slowly burn through the shadow inventory, releasing them gradually onto the market.  “Thanks to federal bailout money and a general improvement in their financial health, banks have been relieved of the urgent need to liquidate their assets.

As a result, lenders and government entities like Fannie Mae and the FDIC have been able to curtail sales to raise prices and avoid recording losses on properties,” according to the report.  If the government and the banks can effectively solve the puzzle of mitigating foreclosures, Radar Logic says that home values could even go up in 2010. Of course, before calling an end to the recession, everyone will keep an eye on unemployment. Many believe the rates will peak in the next two or three quarters and decline. Once that happens, according to the report, housing demand with strengthen even more.  “While we are not out of the woods yet, our view is that housing is showing signs of stability, markets are showing signs of rational behavior and everyone is starting to understand the fundamental problems that brought us here,” according to the report. “As such, we think the bears are overdoing it.”

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First Time Home Buyers can use "Zestimate" to buy their first home

Many First Time Home Buyers in Temecula and other parts of Riverside County are using the Zillow.com tool “Zestimate” to help them determine the right price for their first time home. If  a first time home buyer in Temecula or other areas of Riverside County has been working with a real estate agent who didn’t understand the true value of Zestimate, check out this video from Zillow:

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Help for Temecula Homeowners

If you’re a Temecula Homeowner facing foreclosure and didn’t qualify for a loan modification under the HAMP (Home Affordable Mortgage Program) and cannot afford your current house payments, then the government HAFA (Home Affordable Foreclosure Alternatives) program may help you avoid foreclosure by making a short sale a viable alternative.

To read more about the HAFA program, Click here

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Should First Time Home Buyers wait?

According to an article on Yahoo! Real Estate, First Time Home Buyers in Temecula and Riverside County should join other first time home buyers across the country and wait to buy their first home.

First Time Home Buyers shouldn't wait

Mortgage interest rates are at a 50-year low. Last month, Congress extended a tax credit for home buyers through April. The economy is beginning to crawl out of what by some measures is the deepest recession since the 1930s. One survey already shows house prices beginning to rise.”

All the leading indicators, say now is a great time for first time home buyers to get serious about buying their first home, but, Steven Goldberg at Kiplingers think it’s better to wait.

Sorry, Steven you’re wrong and here are a few reasons why:

  • The first time home buyer tax credit expires on June 30, 2010. That’s $8000 a first time home buyer will be leaving on the table. A first time home buyer has to have an executed contract by April 30, 2010 to qualify. To read more on the $8000 first time home buyer tax credit, Click here
  • The Federal Reserve mortgage purchase program is scheduled to end in March 2010. If that happens interest rates are predicted to rise as much as 1%. Which means a payment increase of $126/mo on a $200,000 loan for a first time home buyer.
  • Legislation has been introduced that would increase the minimum required down payment for FHA loans from 3.5% to 5%. That means an increase of $3000 on a $200,000 home. How many first time home buyers will be able to save that much more money? Read More

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To read the complete Yahoo! article, click here

FHA asks to raise down payments for Temecula First Time Home Buyers

If it becomes law, a new bill introduced to Congress would increase the FHA loan down payment requirement for Temecula First Time Home Buyers and other first time home buyers across the country.

FHA down payment to increase for first time home buyers

A bill introduced in Congress Monday would increase the minimum down payment for Federal Housing Administration (FHA)-insured mortgages from 3.5% to 5%.

The FHA Taxpayer Protection Act of 2009 — HR 3706 — would also prohibit financing initial service charges, appraisals, inspections, or other fees or closing costs with any part of an FHA mortgage.

According to the bill’s author, Scott Garrett(R-NJ), “As we have learned repeatedly throughout the mortgage crisis, the amount of equity a homeowner has in their home directly correlates to the credit risk associated to their mortgage.”

Ah yes, the old “skin in the game”argument. On a $200,000 purchase a first time home buyer would need an additional $3000.

  • If a first time home buyer and his family suffer a 50% drop in their income and cannot make their house payment, will the additional $3000 “skin” make a difference on whether they foreclose?
  • What if their home should decrease in value 10%, will the extra “skin” keep a first time homeowner from foreclosing if they have to sell?

 Scott and HUD Secretary Donovan want to decrease the credit risk to HUD, but if a first time homeowner suffers a “life event” that drastically reduces their ability to make their house payment, the amount of down payment is not going to keep them from foreclosing.

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To read the complete article, Click here

7 tips for buying Foreclosures Part III

There are a lot of great deals on the market, but first time home buyers beware: Purchasing a foreclosure is rife with pitfalls.

By Les Christie, CNNMoney.com staff writer
Last Updated: November 19, 2009: 5:21 AM ET
This is the third and final post on buying foreclosures in Temecula or other areas of Riverside County. Much of the information from this post came from CNNMoney and because it is a national publication we have tried to “localize” the information for you.

5. Hire a real estate attorney

Once banks agree to sales, they often want to move fast and load contracts up with legal mumbo jumbo. As a result, buyers often do not have the time or expertise to figure all the angles.

The solution is to hire a real estate attorney — even in states where home sales are usually completed without one. Considering you’re making a six-figure investment, the legal fees are cheap insurance against the risks.

Real estate attorneys are not normally used in Temecula or California. If you are working with a professional Realtor, even though they can’t give legal advice, will help you navigate the paperwork.

Keep in mind that buyers outnumber properties in the Temecula Real Estate Market, so the banks can always move on to the next home buyer if you make review of the documents by an attorney a condition of your offer.

Golden Rule of Real Estate: Them that has the gold, makes the rules!

6. Wait to make an offer

Homebuyers may be well served to wait before making an offer. Let the house sit on the market for a few days, giving others a chance to set the bidding tone. Then jump in.

“Talk to the agent selling the property,” said Kelman. “The agent may tip his hand. Call up and ask, ‘Should I make an offer? What should I come in at?’”

The agent may tell you he has offers at, say $300,000 and you should bid a bit higher, giving you an advantage over earlier bidders. You may end up paying more than the home is actually worth with this strategy.

In a market where buyers out number homes for sale, “if you snooze you lose”. If you find a home you really like, make a competitive offer. Waiting may find you shut out.

7. Tour properties with contractors

With so many REOs in seriously deficient shape, it’s essential to go over every inch with someone who can spot problems and tell you how much it will cost to remedy them.

A foundation crack can be a minor problem or a deal breaker, and most ordinary homebuyers have no way of telling the difference. Like an attorney, a contractor can be very worthwhile insurance. To top of page

If you can’t have a contractor tour the property with you, get a home inspection and termite report. The bank probably won’t pay for it, but finding out about hidden defects is better in the beginning than after you have moved in.

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7 Tips for buying foreclosures-Part II

There are a lot of great deals on the market, but buyers beware: Purchasing a foreclosure is rife with pitfalls.

By Les Christie, CNNMoney.com staff writer
Last Updated: November 19, 2009: 5:21 AM ET

3. Get pre-approved from the lender you want to buy from

If you’re trying to buy a property from, say Bank of America, it can help to get a pre-approved mortgage from Bank of America. Doing so may cause lenders to look more favorably on your bid if it’s similar to others.

Plus, you’re not locked in if other lenders offer you better terms. You can always change your mind and get your mortgage from another source.

Good idea, in fact in the Temecula Real Estate market and Riverside County, most offers to purchase a foreclosure property have to be accompanied by a pre-approval letter from their designated lender.

HOWEVER, if the REO agent or his lender attempts to coerce you into using their lender as terms of perhaps getting your offer accepted, it is a clear violation of the Real Estate Settlement and Procedures Act (RESPA) as well as Federal Trade Comission guidelines.

You should ALWAYS get the best loan for you from a lender you TRUST!

FHA 203k to buy and fix it up

4. Consider fix-ups

Most REOs, the industry term for bank owned properties, are sold as is. “The conventional wisdom is that banks will do nothing to the houses before the sale,” said Kelman.

That can be problematic today because so many foreclosed homes are in less-than-mint conditions. Often, the former owners were struggling to pay their bills and may have neglected routine maintenance. Or, they may have trashed the properties before leaving

In 25% of cases, homebuyers persuade lenders to fix some of the problems before the sale closes. Most of the time, banks would rather sell the house to the next available bidder — one who doesn’t ask the bank to pay for repairs.

So be willing to consider a home that needs some work — but budget accordingly.

The FHA 203k Rehabilitation loan is an excellent tool for First Time Home Buyers for properties that require repairs. The program allows you include the cost of repair into your FHA purchase loan at the same low interest rate.

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7 Tips for buying Foreclosures in Temecula- Part I

How to buy foreclosures

There are a lot of great deals on the market, but first time buyers beware: Purchasing a foreclosure is rife with pitfalls and what may be the norm in other parts of the country may not be true for the Temecula Real Estate Market or the real estate market in the rest of Riverside County.

We’ll try to help you sort out the differences.

By Les Christie, CNNMoney.com staff writer
Last Updated: November 19, 2009: 5:21 AM ET

NEW YORK (CNNMoney.com) — Foreclosures are dominating the housing market. Right now, there are 1.5 million such homes for sale, and more are expected to be available soon. That provides both opportunities and pitfalls for bargain hunters.

Just because prices are low doesn’t mean you should make snap decisions or buy something that isn’t right. Here are 7 tips for making sure you don’t get taken for a ride.

1. Don’t get caught up in the feeding frenzy

“Everybody and their grandmas are trying to buy foreclosures,” said Glenn Kelman, CEO of Redfin, an online, discount broker. But that doesn’t mean you should lose your head.

Banks put repossessed homes back on the market at cut-rate prices because quick sales help avoid the expense of upkeep, such as property taxes, insurance, heat and electricity.

Those lowball prices represent golden opportunities, but they also attract dozens of buyers who may bid until homes are no longer bargains.

Don’t get caught up in a bidding war. Instead, carefully calculate what you want to spend and do not exceed that price. You may run the risk of not getting the home you want, but the biggest mistake you can make is to pay too much for a home and then can’t afford it.

2. Contact lenders directly

Smart buyers establish relations with asset managers at banks. This may reward them with inside information or first crack at new foreclosures hitting the market.

In the case of a short sale, for example, it can give the inside edge. If a buyer is pursuing a short sale — buying a home for less than what the current owner owes on the mortgage — she should talk directly to the property’s asset manager. That way, if the short sale falls through and the bank repossesses the house, the asset manager knows she is still interested. It could lead to a quick sale without other bidders.

Great idea in theory, almost never happens.

In the Temecula real estate market and Riverside County real estate market, there is tremendous competition for each foreclosure home, so an asset manager has a number of offers from which to choose. Asset managers have thousands of properties they manage and don’t have time or resources to contact an individual buyer.

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What exactly is "being underwater"?

Stop Foreclosure - Falling house values

First time home buyers and homeowners in Temecula and Riverside County who are facing foreclosure are wondering what’s going on in the market?

Here’s the latest from CNNMoney:

By Les Christie, CNNMoney.com staff writer

Last Updated: December 9, 2009: 6:24 AM ET

Stable or growing home values are a welcome salve for the foreclosure pox that has devastated many housing markets. Having equity enables homeowners to avoid foreclosure because they can tap the money should they hit rough financial stretches. Or, in a worse case scenario, they can still sell their homes at a profit if they can’t pay their mortgages.

“Negative equity is the most important predictor of default,” said Laurie Goodman, Managing Director of Amherst Securities, trader of mortgage backed securities, in testimony Tuesday before the House Financial Services Committee that examined private and public responses to the mortgage crisis.

“Borrowers do not default because of negative equity alone,” she said. “Generally, a borrower experiences a change in financial circumstances. If the homes has substantial negative equity, they choose to walk.”

In October, 21% of homeowners were underwater, meaning they owe more than their homes are worth. That’s down from 23% a year earlier.

The second-half recovery may be just a temporary reprieve for housing values, however.

“Unfortunately, we believe that demand will come under downward pressure as mortgage rates creep back up after the first quarter and that housing supply will experience upward pressure as the volume of foreclosures continues to remain high,” he said.

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How to pick the perfect First Time Home Buyer Loan

First Time Home Buyer Loan

How to Pick the Perfect First Time Home Buyer Loan

A lot has been written about interest rates and credit scores but few people focus on how to pick the perfect loan.
While it might not sound like the most exciting part of purchasing your first home, it is one of the most important decisions you are likely to make.
As millions of Americans have already learned, obtaining the wrong loan can be a very costly decision.

Fortunately, it’s relatively simple to secure a great first time home buyer loan that works well for your individual situation.

Follow these quick steps to help find your perfect loan:

1. Determine your down payment. The larger your down payment the more options you will have available but always leave a little additional cash for emergencies and other needs.

  • 0-5 Percent Down Payment: VA loans for veterans or Vendee loans for foreclosures.
  • 3.5 – 5 Percent Down: FHA or HUD loan for purchase of primary residence only.
  • 5 to 10 Percent Down: Conventional Loan with strong credit score (720 or greater)
  • 20 Percent Down: Conventional Loan without PMI or lower than 720 credit scores.

2. Determine the term.  Almost all first time home buyer loans are fixed for 15,30,40 years, but don’t forget the “first rule” of mortgages: The longer the term, the higher the rate.

30-40 Year Term: Right now interest rates are at or near historic lows so select a 30-40 year term if you intend to remain in the property for many years, are on a limited fixed income or are expecting to be on a fixed income in the future and want minimum payments with maximum flexibility. Remember, you can always pay more on the loan should you desire.

15 Year Term: Select a 15 year term if you want to obtain the lowest possible interest rate with steady fixed payments, become debt-free as soon as possible, save tens of thousands of dollars over the life of the loan and you have ample yet steady income.

Interest Only: Select an interest only first time home buyer loan if you expect to have dramatically higher income within a few years (for example, you are in college, paying off significant debt or will have a spouse/other return to work) or are buying in an area experiencing rapid appreciation.

Selecting the perfect first time home buyer loan is more than just choosing a rate and term, it’s also being comfortable with the corresponding payment that will include property taxes, insurance and (perhaps) mortgage insurance that will give you peace of mind in your first home.

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FDIC to ask for principal reductions in loan modifications

FDIC to help homeowners with loan modifications

Homeowners in Temecula and Riverside County facing foreclosure stand to benefit with new guidelines announced by the Federal Deposit Insurance Corporation (FDIC) regarding loan modifications.

Dec. 3 (Bloomberg) — Federal Deposit Insurance Corp. Chairman Sheila Bair may ask lenders to cut the principal on as much as $45 billion in mortgages acquired from seized banks, expanding her bid to aid homeowners as unemployment rises.

Principal reductions will go a long way to slowing down the phenomena known as “strategic default”. A homeowner who owes twice as much as his home may be worth is significantly more likely to walk away than one who is only 10-15% upside down.

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More Help for Temecula Homeowners

Home affordable mortgage program

Homeowners in Temecula and other areas of Riverside County who are facing foreclosure have received some good news from the Treasury Department.

From Inman News Features:?

The Obama administration has released long-awaited guidelines for a program that will provide incentives for loan servicers and homeowners to engage in short sales when borrowers who are eligible for the Home Affordable Modification Program (HAMP) don’t qualify for a loan mod.

  • The guidelines prohibit loan servicers from demanding that real estate brokerages reduce the commission stated in the listing agreement as a condition of approving a short sale — a practice that’s been a sore point with many real estate agents.
  • Troubled borrowers interested in exploring a short sale will also be allowed to receive preapproved short-sale terms prior to the property listing.
  • Servicers must agree to fully release them from future liability if the sale goes through.
  • Troubled borrowers who agree to a short sale or deed-in-lieu of foreclosure will receive up to $1,500 to assist with their relocation expenses.

Jeff Lischer, the National Association of Realtors’ managing director of regulatory policy, told the groups’ members last month at their annual conference in San Diego that the incentives should make a difference but won’t be a cure-all for foreclosures.

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Temecula First Time Home Buyers what's in store in 2010?

Temecula Real Estate in 2010

First Time Home Buyers in Temecula and Riverside County are wondering what’s in store for the Temecula Real Estate Market in 2010?

  • Will there be more foreclosures in 2010?
  • What will happen to the price of foreclosed homes in 2010?
  • Will a first time home buyer be able to get a loan to buy their first home 2010?

Diana Olick the Real Estate Reporter for CNBC is one of the first to boldly go where no one has gone before and make predictions for the real estate market in 2010.

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To read Diana’s predictions Click here

The $8000 First Time Home Buyer Tax Credit - What the IRS isn't telling you

A CPA Shares Little-Known Facts About the 2009 First Time Homebuyer Tax Credit Extension  

IRS and your First Time Home Buyer Tax Credit

Like most government legislation, the Nov 6, 2009 homebuyer tax credit extension created more questions than answers. However, according to Doug Geissler, CPA, the IRS is literally writing the “refund rules” as they go along.

Unbeknown to homebuyers, real estate agents and the mortgage industry, the IRS is giving behind-the-scenes instructions—that are not available to the general public—to CPAs and tax advisors on how to file for the homebuyer tax credit after Nov 6, 2009. It will be completely different than what you might have been advised previously—and you are NOT going to like these changes!

Read exactly how the forms need to be filed; what docs need to accompany the tax return and the estimated time the IRS is projecting for the tax credit refund!

The first shocker? You cannot file a 1040 EZ to claim the tax credit!

Nor can you file tax returns electronically if claiming the tax credit!

It’s the first step in stopping fraudulent tax credit refunds. Believe it or not, the IRS never had a way to determine if a person owned a home—no auditing software in place–to determine if they previously claimed a “mortgage interest” deduction within a 3-year time period. The IRS is building “auditing software” now to “catch” previous homeowners who are trying to claim a FTHB tax credit.

Secondly, the IRS now requires that the HUD 1 or closing statement be attached to the 5405 form (and that cannot be attached electronically).

Third, speaking about the 5405 form…unless the home was purchased on or before November 6,2009, currently there is NO FORM on the IRS website to file the amended return.

Here’s the wording that you will find when you get to the IRS website and try to download the form:

Changes have been made to the first-time homebuyer credit by Public Law 111-92, the Worker, Homeownership, and Business Assistance Act of 2009, which was enacted on November 6, 2009. As a result, the 2008 Form 5405 can be used can be used only for homes purchased before November 7, 2009, for which an election is made to claim the credit for 2008. We will soon issue a December 2009 revision of Form 5405. The December 2009 revision will be for use for all homes purchased after November 6, 2009 (whether the credit is claimed for 2008 or for 2009) and for all claims on 2009 returns for homes purchased any time in 2009.
And to give them time to audit the document, the IRS is telling tax advisors to expect an average of a 16-week turnaround time…which means that it could either be the refund OR a request for additional documentation. Geissler says that one of his clients recently received an IRS notice, requesting a letter from a landlord, a copy of a driver’s license and the closing statement on an amended tax return where the client was claiming the FTHB tax credit. Yes, the new law allows them to ask for additional info on amended returns.
 

 

Help for First Time Home Buyers - 3 metaphors to better understand your mortgage payment

Mortgage payments will be the biggest chunk of your monthly expenses once you own a home. While it can be stressful to write that huge check each month, you should think of a mortgage in terms of what it means for your long term financial stability in order to help you understand why it is necessary. In the end, your mortgage payment is truly a check you write to your future self.

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First Time Home Buyer Mortgage Payments

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FHA loans to get tougher for Temecula First Time Home Buyers

If recently introduced legislation is enacted First Time Home Buyers in Temecula and across Southwest Riverside County will face a tougher task in qualifying for their first home loan.

FHA to increase costs to First Time Home Buyers

The Federal Housing Administration (FHA) intends to raise FICO requirements, reduce seller concessions, increase mortgage insurance premiums and down payment requirements.

The Federal Housing Administration (FHA) is not, as some have claimed “the next subprime,” according to remarks prepared for presentation to congress this morning by Housing and Urban Development Secretary Shaun Donovan.

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New Tool for First Time Home Buyers

CompareIt for First Time Home Buyers

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First Time Home Buyers in Temecula have a new tool to improve the search for their first home. CompareIt! is a brand new way for first time home buyers to compare properties side-by-side – Resale, New Construction, Foreclosures and Recently Solds Homes.

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"Swat Teams" to help Temecula homeowners

Help for Homeowners SWAT teams

The Obama administration is clearly unhappy with the progress being made in its $75 billion stop foreclosure effort and will be sending out “swat teams” to help Temecula homeowners stop foreclosure.

Treasury Department officials said Monday they will step up the pressure and begin this week by sending three person “swat teams” to monitor the eight largest companies’ work and will be requesting twice daily updates on their progress on their efforts to stop foreclosure.

If you’re a homeowner trying to stop foreclosure with a loan modification, you have to help them help you. It’s estimated nearly 60% of the 375,000 borrowers who qualify to have their loan modifications completed by year-end have either submitted incomplete paperwork or none at all.

“Borrowers must understand the urgency of getting their completed paperwork in so they do not miss out on the opportunity for more affordable mortgage payments.” said Phyllis Caldwell, who recently was named to lead the Treasury Department’s homeownership preservation office.

In an effort to shame the companies into doing a better job of loan modifications, the Treasury will publish a list next week of the mortgage companies that are lagging in their loan modification efforts.

Stay tuned, we’ll keep you posted on the success of this latest stop foreclosure initiative.

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Walk away's financially smart or financial suicide?

Many Temecula homeowners are facing tough decisions. If a Temecula homeowner is unable to make their mortgage payments, they may elect for a loan modification or short sale, rather than face the hardships presented by foreclosure.

Stop Foreclosure

Many other Temecula homeowners are still able to make their payments but are deciding to walk away. This phenomenon is known as strategic default and has become the solution of choice for many Temecula homeowners whose home is worth 30-50% less than what they owe.

If you are a Temecula homeowner  faced with such a decision, check out this video. It presents interesting perspectives.

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Obama ups pressure on banks to help homeowners

Loan servicers must detail plans to assist borrowers long term. Laggards could face penalties and sanctions.

Help for Homeowners

By Tami Luhby, CNNMoney.com senior writer
November 30, 2009: 11:23 AM ET

NEW YORK (CNNMoney.com) — Struggling to stem the swelling foreclosure tide, the Obama administration announced new steps Monday to pressure banks to help homeowners long term.

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When will the Temecula housing market recover?

If you ask ten experts: When will the housing market recover?, you’re likely to get ten different answers. Here’s some staggering information from CNBC:

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Homes more affordable for Temecula First Time Home Buyers

More First Time Home Buyers in Temecula are finding affordable homes. The California Association of Realtors released it’s monthly affordability index and First Time Home Buyers in Temecula and other parts of the state have seen an increase in first time home affordability of almost 10%

Homes more affordable for First Time Home Buyers

Quick Facts:
· C.A.R. First-time Buyer Housing Affordability Index stood at 64 percent in the third quarter of 2009 compared with 55 percent (revised) in the third quarter of 2008
· The median price of an entry-level home for first time home buyers in California was $247,150 in the third quarter of 2009
· The estimated monthly payment including taxes and insurance was $1,450 in the third quarter of 2009
· The minimum household income for first time home buyers needed to purchase an entry-level home in California in the third quarter of 2009 was $43,500.

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First Time Home Buyers set new record!

First Time Home Buyers

The number of first-time home buyers rose to 47 percent of all home sales during the past year, up from 41 percent last year, according to NAR’s 2009Profile of Home Buyers and Sellers.  The increase marked the highest on records dating back to 1981. The previous high was 44 percent in 1991.

“These buyers are critical to housing and a general economic recovery because the market always heals from the bottom up – they absorb inventory, free existing owners to make a trade and stimulate related goods and services,” said Paul Bishop, NAR vice president of research. 

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First Time Home Buyers use Google Maps for easier home searches

Changes to Google Maps make property searches easier and search results more useful for first time home buyers, the most significant being the option to search for their first home by simply adding “real estate” to a map search.  Read more…

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First Time Home Buyers cause home sales to surge

First Time Home Buyers

First time home buyers caused home sales to surge for the second month in a row in October, climbing to the highest level in 2½ years as first-time buyers rushed to take advantage of an expiring tax credit.  Read the full article…

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Help for Jobless Homeowners

Rep. Barney Frank said Monday that he is pushing a proposal to use some of the interest the government collects from the financial industry bailout to give loans to unemployed homeowners struggling to pay their mortgages.   Read more…

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Deed for Lease Program - FAQ

Stop Foreclosure-Deed for Lease

Fannie Mae, recently announced the Deed for Lease program designed to keep mortgage-challenged borrowers in their homes.
As you can imagine, thousands of homeowners around the country are potentially eligible for the Deed for Lease program.

Here are some of the most commonly asked questions:

Who is eligible?

In order to be considered for the Deed for Lease program, a borrower must meet these requirements:

  • Have a Fannie Mae mortgage that is in a deed-in-lieu of foreclosure agreement;
  • Requested a loan modification and been turned down;
  • Show proof of income that the rental rate will not exceed 31 percent of the homeowner’s monthly income (e.g., If the rental rate is determined to be $1,500 a month, the borrower must show proof of a monthly gross income of at least $4,838)
  • The homeowner can’t be involved in bankruptcy proceedings
  • At least three payments have been made on the property from the time the loan started or since the last modification.
  • The homeowner also cannot be more than 12 months past due on their payments.

What about the property?

In addition to the requirements for the borrower, the property itself must also meet certain requirements:

  • Be in good condition;
  • The property in question must be a primary residence (not a second home or a investment property);
  • In compliance with local rules and laws and
  • Not targeted for any corporate, government or community plan that will need the property for non-residential use.

The property manager hired by Fannie Mae will determine if the property meets these requirements.

  • What about properties that are already being rented out by their owners?

Fannie Mae will work with the borrower to determine if the tenants are interested in renting through the Deed for Lease program. If they are, the property manager assigned to the property will work with the tenants to execute a lease. The property owner will give up his or her property and the property manager assigned by Fannie Mae will become the tenants’ landlord.

If either the tenants don’t want to work within the Deed for Lease program or a tenant does not qualify for the program, the property will not be eligible for the D4L program. Basically, the tenants, not the owner, must agree to the program for it to move forward.

  • How much immediate relief can someone who enters the D4L program expect to get by renting?

Since housing prices vary greatly from one region to the next, it would be difficult to pin down a single set of numbers that describes the potential savings of moving from renting to owning across the country. However, hypothetically current owners could save money each month by trading in the deed to their property and becoming tenants.

Yes, you still have to give up your property to Fannie Mae and lose the equity (if any) in your home. But you wouldn’t have to move during an undoubtedly rough transitional period and would avoid hefty security deposits if you were to move to a new rental unit. It’s a desirable solution relative to immediately foreclosing on a home and having to search for a new place to live.

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“This post used information from this article by Chris Thorman, who blogs at Software Advice.” http://www.softwareadvice.com/articles/property-management/breaking-down-fannie-maes-deed-for-lease-program-1111609

Give the $8000 First Time Home Buyer Tax Credit for Christmas

 
Buy a house for Christmas and get the $8000 First Time Home Buyer Tax Credit!
If you’re a First Time Home Buyer and have been waiting for the right time to buy a home, there may never be a better time. You know that interest rates are the lowest in 40 years, homes everywhere are affordable. Plus Uncle Sam is giving you $8000 to do something you wanted to do anyway.
So what are you waiting for?
Most First Time Home Buyers will tell you there is “no inventory” and they have to make multiple offers and are competing with 10-20 other First Time Home Buyers on every home.
According to the Wall Strreet Journal, Santa may be right around the corner.
WSJ sees foreclosure tidal wave
In a lead story, the Wall Street Journal (WSJ) paints a dismal picture of the housing market in 2010.
Uncertainty over the extension of a home-buyer tax credit sent new-home starts in October crashing down a full 10.6% from September, and starts of single-family houses fell 6.8%.   That’s the lowest level since April, the Commerce Department said.
This news suggests that foreclosures are not only going to keep rolling in, but that they may actually increase.
Richard Dugas,  chief executive of Pulte Homes Inc., the nation’s largest home builder, warned investors: “As we look out to 2010, we are expecting difficult conditions to continue.”
Wednesday’s data prompted some economists to revise their fourth-quarter forecasts down slightly. Macroeconomic Advisers moved its GDP estimate down to 3% from 3.2% and Nomura Securities predicts 3.4% growth, down from 3.6%. The data adds to the suggestion “that the recovery is a little bit rickety,” said Zach Pandl, an economist from Nomura.  Given that 3.4% of U.S. households — or about 1.9 million homeowners — are 120 days or more overdue on their payments, and that millions of homes are expected to go through foreclosure over the next few years, adding to supply, it’s a fair bet that foreclosure problem won’t be gone anytime soon.
Rememeber to take advantage of the First Time Home Buyer Tax Credit of $8000 you have to have an executed purchase contract by April 30, 2010 and closed by June 30.
For more valuable first time home buyer information, please subscribe to the blog, email or call us. To save this article or share with a friend, click on the buttons below.

1 in 20 to buy a home next year- Will you be one?

Poll – 1 in 20 will buy a home next year

  • According to a survey conducted for Move Inc., one in twenty Americans say they plan to buy a home within the next year, and they’re most likely to be 34 years old or younger and living in the South or West.
  • A quarter of potential buyers said the No. 1 reason they would buy now is because prices have bottomed out.
  • That reason topped bargain-priced foreclosures, worries about rising interest rates and a wide selection of homes
  • The percentage of buyers thinking of jumping into the market was down slightly from a March survey, but up about 1 point from a poll in June.
  • Home prices rebounded this summer at an annualized pace of almost 7 percent, according to the Standard & Poor’s/Case-Shiller home price index, but with high unemployment and foreclosures, economists debate whether prices will dip again.
  • Those surveyed widely favored federal policies that kept interest rates low and helped troubled homeowners avoid foreclosure over those that helped first-time homebuyers purchase a home.
  • And, overall, 48 percent of those polled didn’t think the government was doing enough to stabilize the housing market, whereas 42 percent thought it was.
  • Forty-five percent of Americans worry that they or someone they know will face foreclosure in the next year.
  • And almost 30 percent of those with a mortgage have contacted their lender in the past year to reduce their payments.

For more valuable first time home buyer information, please subscribe to the blog, email or call us. To save this article or share it with a friend, click on the button below.

Bank of America can't hide from YouTube

If you’re a homeowner who has struggled with BankofAmerica/Countrywide to get an answer on your short sale  and found them to be “dazed and confused”. Well here’s the story (with video) of one borrower who got sick of the run around and did something about it. If you like it, please share it.
Darren Bryant of Pensacola, Fla. spent hours in what he calls Bank of America’s “phone maze,” getting bounced from person to person, never reaching somebody who could address his situation.
Finally, in one last desperate attempt to get someone’s attention, he uploaded a five-minute video to YouTube in which he explains his predicament and gives his phone number and email address. Darren’s video
“The reason I’m making this video is to get in contact with somebody from Bank of America that can make a decision,” Bryant says in the video, which he uploaded on Monday. He then emailed a link to over a dozen Bank of America email addresses he said he found online.
Within four hours of posting the rant, Bryant got a phone call. It was somebody from the office of David Darnell, president of Global Commercial Banking at Bank of America Merrill Lynch.
“She says, ‘We received your video and I’m calling you to see what the deal is and to go over the situation with you,’” Bryant said. The woman asked for his account number and said the bank would investigate.
“She said, ‘We take this very seriously when somebody posts a video.’”
Bank of America has proven responsive to other videos from its customers. Ann Minch of Red Bluff, Calif., made a huge splash in September when she declared via YouTube that she wouldn’t pay off her credit card debt unless the “evil, thieving bastards” at Bank of America lowered her interest rate. The video went viral, and within a week of its posting an executive got in touch with Minch and agreed to her demand.
Read more at: http://www.huffingtonpost.com/2009/09/30/bank-of-america-another-c_n_304630.html

$8000 First Time Home Buyer Tax Credit Extended and Expanded

It’s official the First Time Home Buyer Tax Credit has been extended and expanded.
 Here’s a link to a website that provides very comprehensive information.

$8000 First Time Home Buyer Tax Credit

Obama Set to Sign Extension, Expansion of Home Buyer Tax Credit

With the nation’s unemployment rate busting through the 10% mark in October, President Obama Friday was set to sign legislation that would extend the $8,000 first time home buyer tax credit and give additional tax breaks to certain home owners trading up.  Passed overwhelmingly by Congress Thursday, the bill would provide a $6,500 tax credit to homeowners who are buying a new primary residence beginning December 1. The language mandates that to get the credit the homeowner must have owned their home for five consecutive years of the previous eight. But there are caps on the tax credits. They only apply to individual buyers who make no more than $125,000 and $250,000 for couples. There is also an anti-flipping provision: Any homeowner who collects the credit and sells within three years must return the money. The FTHB was extended to cover consumers signing a contract by April 30 and closing by June 30. Meanwhile, the Department of Labor reported Friday that the nation’s unemployment rate rose above 10% for the first time since 1983 in October — a much worse jump than expected. The increase in joblessness will lead to an upswing in residential mortgage delinquencies. In October the unemployment rate spiked to 10.2%, compared to 9.8% in September. Economists had forecast an increase to 9.9%.

First Time Home Buyer Tip for buying bank owned homes!

First Time Home Buyers across the country are frustrated with the “buyers market” they are experiencing when it comes to bank owned homes (are there any other kind?)

First Time Home Buyer $8000 Tax Credit extended by Senate

The First Time Home Buyer $8000 Tax Credit extension was passed by the senate in a unanimous vote of 98-0. The extension of the tax credit would continue to April 30,2010 and has been expanded to include people with higher incomes and some who already own homes.

Posted via email from Greg’s posterous

Important update to Bank of America Short Sale Process

There is a tradition among seafaring folks that on their first pass over the equator, the “virgin” is thrown overboard. I assume they pull you back or there wouldn’t be anyone to man the ship for the rest of the voyage.

In case you hadn’t heard, Equator (formerly REOTrans) announced they have launched the first ever short sale module for a large national lender. In the industry’s worse kept secret, the lender was identified as Bank of America.

To read the complete article, follow these links:

http://www.mortgageorb.com/e107_plugins/content/content.php?content.4561

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/10/20/BUOG1A5M2P.DTL

http://www.bayareainvestmentrealestate.com/2009/10/reotrans-now-handling-short-sales.html

“This is the first time that short sales have been handled through an electronic platform,” said Equator CEO Chris Saitta. “With our new system, everyone works together in real time, dramatically improving communication and approval timelines for our client, its borrowers, vendors, and real estate agents.”

Details are forthcoming, but all parties to the transaction will be required to register with Equator, including buying and selling agent, seller, third party service providers. In return  they will have 24/7 access to a portal through which they can provide the necessary information to process a short sale and receive real-time status updates electronically.

There have been countless discussions on Active Rain about the arbitrary decision making that seems to run rampant in the short sale process.

Equator’s short sale module also automates decisioning for the lender, handles approvals for faster turnaround, provides quick fulfillment, and assures full compliance with government programs, Saitta said.

If this proves successful, you can expect other major lenders to follow suit with similar programs to relieve the huge backlog of distressed properties.

I guess it’s true: “Good things come to those who wait”, we just didn’t imagine it would take this long.

Posted via email from Greg’s posterous

First Time Home Buyer Tax Credit Extended and Expanded

You know the folks in Washington, can’t get too much of a good thing!
House and Senate have agreed on an extension of the First Time Home Buyer Tax Credit and an extension to certain non-first time home buyers.
Credit will only be extended until April 30, 2010
Stay tuned for more details.

Posted via email from Greg’s posterous

Google Maps helps first time home buyers search for homes

Temecula Real Estate, use Google maps to to check out the properties for sale, the neighborhood, even local restaurants and other attractions.

Short Sales and Second Mortgages

It’s been said: “What you don’t know won’t hurt you as much as what you’re sure you know but are wrong.”
I learned a couple things today, that shook the foundation of what I thought I knew about short sales.
Does this sound familiar?
“I’ve got a short sale approval from the first and they even agreed to pay the second $3000. I called the second and now they want 25% of their balance owed.
What’s the matter with those people? Don’t they know if the house goes into foreclosure they get nothing?”
Well, it seems certain second lien holders are in a stronger position than we might believe.
If you’re a distressed homeowner with a second lien that is a fixed rate (closed end) loan, chances are (depending on lender) that the lender may have taken out “lien insurance” (Think MI for second mortgages) and is insured up to 25% of the balance.
Even if the home goes into foreclosure the lender will receive up to 25% of the balance from the insurer (a big percentage of AIG’s losses were from lien insurance).
A business partner of mine was asked to help negotiate a second lien and was told by the loss mitigator, in a rare moment of candor, that they would “get their money” one way or another. “Even if the buyer agrees to the 25% payoff, we are going to require the seller to sign a note for the balance.”
That note is in the form of a non-bankruptable lien (haven’t had a chance to verify if they can do that) but just like a child support lien or federal tax lien, it stays with you forever (or until paid).
So what does this mean to you?
If you have a fixed rate second mortgage for $50,000 and your lender is protected with “lien insurance”, they are going to demand payment of 25% ($12,500) to agree to the short sale.
They may also require you to sign a note for the balance owed ($37,500) and that loan may not be able to be discharged in bankruptcy, so it will stay with you forever (or until paid off).
In short, it means, don’t agree to the bank’s terms until you have fully investigated your options. Then you can decide whether just letting your house go to foreclosure is better than the terms of a short sale.

Posted via email from Greg’s posterous

But would we have Disneyland?

Over the last few months the subject of government involvement in the real estate business has been debated at great length (talk about an understatement), and I don’t expect to change the views or opinions who think that all government involvement in the Real Estate business has been a disaster.
But, the fact is “it’s just not true!”, but what is true is that the government has been successfully involved in the real estate business for more than 70 years and were it not for at least two of the programs, most of us wouldn’t have the title Realtor or Mortgage Banker/Broker.
Now before you go labeling me a “socialist”, I’m not advocating that the “Barney Frankian” form of government involvement is the solution either, in fact the “Frankian” theory of “housing for everyone” is probably number one on the list of causes for our current dilemna.
What does this have to do with Disneyland?
This past weekend my wife and I visited Disneyland for my birthday (got in free!). Now I have been to Disneyland hundreds of times. I was raised seven miles from the Magic Kingdom (seven miles by the way is close enough to bike there but way too far to bike back). When my kids were younger, my mom worked there, so we got free admission. Needless to say, I have seen everything the Magic Kingdom has to offer but this past weekend I was able to view it from a completely different perspective.
We stayed at a local hotel and the morning after our excursion I was standing on my 14th floor balcony and saw the areas surrounding Disneyland in a new light. It was a magnificent day and I could see all the way to the ocean. But as I pulled my field of vision closer I noticed tens of thousands of homes and I paused to reflect on how it all happened.
Disneyland opened in 1955 as Walt Disney’s dream, but at the time it was little more than an amusement park in the middle of orange groves. Interstate 5 the main north-south thoroughfare in California wouldn’t be completed for a few more years and Los Angeles was still the primary employment center of Southern California. There were more orange groves than houses at the time.
As I overlooked all these houses, I realized that without government assistance in the housing market, none of this would have existed and I think they did a darn good job of it.
In 1934 the federal government created the Federal Housing Administration (FHA) which provided for low down payment loans and perhaps more importantly long term 20 or 30 year loans. Up until that point, financing for homes was either non-existent, required large down payments and was short term.
If not for FHA (and later VA) how many of those families would have been able to make the westward migration after the end of WWII, and buy the affordable housing that would eventually surround the “happiest place on earth”?
The charters of Fannie Mae and later Freddie Mac were the second steps in creating the housing market as we know it. By putting the “full faith and credit” of the United States government behind mortgage backed securities, Fannie and Freddie created investment grade instruments with interest rates that were competitive in the market. The replenishable source of funds, allowed the mortgage market to grow to meet the ever increasing demand.
Their higher loan limits, also allowed those wishing to buy a home above entry level, a source for financing.
The two most significant events in the United States real estate market had nothing to do with the houses, nothing to do with indoor plumbing or electricity, nothing to do with mass production but everything to do with financing and how people were able to buy mass produced tract homes with indoor plumbing and electricity.
I’m can’t justify the excesses of the past few years, but I think seventy plus years of getting it right, can’t be ignored.
Millions of families had and have the “American Dream” of homeownership, but unless they have a viable way to pay for it, it remains just that a “DREAM!”

Posted via email from Greg’s posterous

First Time Home Buyers? Has the housing bust ended?

Has the housing bust ended?

A popular topic around the virtual ‘water cooler’ has been…..is the historic housing bust coming to and end or just getting started?
First Time Home Buyers are asking that very question every day.
Here’s a post from CNN that might shed some light on this.
4 million home loans are delinquentMortgage lenders say the flood of foreclosures has not yet crested. Highwater mark should come this fall. read more…

- The number of Americans who have fallen at least 30 days behind on their home loan payments jumped 44% in the second quarter from a year ago, according to an industry report.

That puts delinquencies at a record 9.24% of mortgages, according to the National Delinquency Report from the Mortgage Bankers Association (MBA). That represents more than 4 million of the 45 million borrowers covered by the report.

What the rate does not include, however, are loans already in foreclosure. Some 4.3% of all the mortgages are in that stage, up from 3.85% three months earlier and 1.55 percentage points from one year ago.

The combined percentage of loans past due and those already in foreclosure hit 13.16% during the quarter, the highest ever recorded by the MBA survey

“There was a major drop in foreclosures on subprime ARM loans,” said Jay Brinkmann, chief economist for the MBA, in a prepared statement. “The drop, however, was offset by increases in the foreclosure rates on the other types of loans, with prime fixed-rate loans having the biggest increase.”

Indeed, the MBA survey reported that prime, fixed-rate mortgages accounted for nearly one in every three foreclosure starts. That’s way up from a year ago, when only one of every five foreclosure start involved a prime loan.

That bodes ill for the future health of the mortgage market. Prime loans make up two-thirds of the mortgage market, and if delinquencies among these mortgages continue to proliferate, the number of foreclosures will soar.

Brinkmann forecasts continued delinquency and foreclosure increases until the economy starts to recover. He predicts that job losses will peak by mid-2010, as will delinquencies, and foreclosures will start to fall about six months later.

Problem areas

The so-called “sand states” continue to contribute disproportionately to the mortgage meltdown. Four states — California, Florida, Arizona and Nevada — accounted for 44% of all foreclosure starts during the quarter.

“Issues related to the deteriorating economy and deteriorating home prices in those states have driven their delinquency problems],” said Brinkmann

In Florida, 12% of mortgages were somewhere in the process of foreclosure, the highest in the nation; another 5% were at least 90 days past due as of the end of June.

Adding in 30 days and 60 days past due and Florida’s total delinquency rate comes to 22.8% — almost twice the national percentage. The next highest states are Nevada at 21.3%, Arizona at 16.3% and Michigan at 15.3%. California stood at 15.2%, but because it is such a large state, that represents nearly 900,000 mortgage borrowers.

“It’s hard to look at a national recovery,” Brinkmann said. “We could have multiple bottoms with some markets recovering much faster than others.”

Buying a Home after Bankruptcy

Thanks to my son the chef, our home has been invaded by The Food Network.
Rachael Ray, Paula Deen and Bobby Flay visit multiple times each day and when baking they never fail to mention the importance of “pre-heating” the oven.
Bankruptcy promises a “new beginning”, your old debts are discharged and you now have a clean slate. If you’re thinking of buying a home, you have to “preheat” now and not wait for two or three years to get started, because when you do take it out of the oven the finished product will taste much sweeter.
Here are some simple steps you can take starting today that will help you become a home buyer sooner and with less turbulence.
1) Request a free copy of your credit report – About 30 days after discharge of your bankruptcy, get a copy of your credit report from all three bureaus (Equifax, TransUnion, Experian). You can do this at www.annualcreditreport.com which is the only authorized source to get your free annual credit report under federal law.
2) Compare the credit report with your bankruptcy discharge papers - Unfortunately all creditors discharged in a bankruptcy aren’t diligent in  reporting the correct status of your account. If the account was included in the bankruptcy, the credit report should reflect that and the balance owed should reflect ZERO.
Make multiple copies of your credit report (one for each of the bureaus and one for your records), highlight all the errors and file a dispute with each of the bureaus. You will need to include a copy of your bankruptcy papers for each bureau, so make multiple copies. This will take anywhere from 45-60 days to complete and each bureau will send you a copy of your corrected report. You’re entitled to a Free Report each year, so mark your calendar and make sure to check your report annually to be sure there won’t be any surprises.

3) Put all of your bankruptcy related forms in a safe place - You will need them when you apply for your home loan. To qualify for a home loan after bankruptcy, you have to establish that it was due to circumstances beyond your control. So in this paperwork, include anything you may have that would support your circumstances; i.e. layoff notice, medical bills, W-2s or paystubs showing a large reduction in income etc. If you had to write a hardship letter for a loan modification or short sale, include it. When in doubt, keep it! It’s much easier than trying to dig it up later.

4) Establish new credit and pay it on time! There is NO bigger dealbreaker than late payments after a bankruptcy or foreclosure. We’re in a “credit crunch” so obtaining credit after a bankruptcy is not as easy as it once was. Try a secured credit card! There are more than 49 million web pages devoted to the topic. It works like a savings account, you deposit $500 with the bank and they give you a Visa/MasterCard with a $500 limit. If you have to use it, keep the balance owed at 30% or less than the available credit (it will help your scores).

5) Open a savings account - Ability to save is an important criteria for lenders when they analyze your loan application. Having two or three thousand dollars in savings can make the difference in your home loan approval.

Current lending guidelines (FHA) require at least two years from the bankruptcy discharge date (if you can establish it was due to circumstances beyond your control). Follow these simple steps, “preheat the oven” and when you are ready to dig in, the results will be that much sweeter.

IT’S TOO IMPORTANT…DO IT RIGHT!

5 Ways a First Time Home Buyer Can Raise Their Credit Scores FAST!

A good Credit Score and owning your first home go hand-in-hand. You don’t need perfect credit, but should you use every opportunity to “optimize” your credit score. 1st time home buyer qualification includes the lender making a determination of your willingness to repay they mortgage they are giving you and in case you haven’t heard we are in a “credit crunch”.

If you are ready to take the plunge and buy your first home and you are looking to improve your credit score quickly, now is the time to get started.

You wouldn’t try to fix your car while driving 80 miles an hour, don’t try to fix your credit while you are in the process of buying your home. Take the time before you start on the trip, it will make the journey much more enjoyable and you’re liable to reach your destination in one piece.

Here are some great strategies you can utilize right away to give your score a little boost.

Protect Your Interests: Your credit score is calculated solely on the information provided by your creditors. If they are misreporting your credit score will suffer because of it. If you have past credit problems, like a bankruptcy, make sure all items associated with the bankruptcy are being reported correctly, that is with zero balance. This action could increase your score by 50-100 points. Simple mistakes or errors in reporting can wreak havoc on the credit score of someone looking to own their first home, it’s important to make sure all accounts are reported correctly.

Create Some Balance: While paying down installment debt (car, school etc) will definitely boost your credit score, paying down or paying off revolving debt, such as credit cards will give you much more “bang for your buck”. The trick is to get and keep your balances below 30% of your credit limit on each card. For faster results, attack those cards with balances closer to their respective credit limits first, as opposed to those cards with simply the highest debt. Remember, if you pay off any credit cards completely; do not close your accounts without discussing with your First Time Home Buyer Specialist. Canceling those cards may inadvertently undo all of your hard work.

Know Your Limits: Make sure that your credit card issuers are reporting the correct limits on your accounts to the major credit bureaus. Without an available limit, your account will appear to be maxed out at its highest reported balance each month. This could cost you up to 80 points in certain instances. Some creditors, such as American Express® and certain cards issued by Capital One®, actually have a policy of not reporting available credit. However, most companies will report your credit limits if you ask them in writing.

Take Some Credit: If you have a credit card account in very good standing, make sure that all three credit bureaus know about it. Just like your credit limits, some creditors don’t report your information to all three credit companies – this is why credit scores often vary between bureaus. If this is the case, give them a call to find out why. Correcting this oversight could provide a significant boost to your score. Also, if you’re in very good standing, ask your creditor for a lower rate or higher credit limit. This will increase the gap in the debt you owe versus the credit you have available. Sometimes hinting about closing an account can suddenly bring out the generous spirit of certain card issuers. Give it a try. The worst they can say is no.

Even the Score: If you find information on your credit report that you believe is inaccurate or incomplete, then you have the right to dispute free of charge. For the fastest results, visit the appropriate credit bureau’s website and file a complaint online. If supporting documents are necessary, you have to file your dispute by mail.

To be a successful First Time Homebuyer often requires a little work, but the rewards of homeownership are worth it. A First Time Home Buyer Specialist can help you do it the right way.

To consult with a Certified First Time Home Buyer Specialist, we can be reached via email: greg@homebuyerhelpnetwork.com

First Time Home Buyer - Why is it so hard to get a house?

First Time Home Buyers across the country are asking themselves this very question. The short answer is: Everyone else is thinking just like you!

As a result, even though there is a glut of inventory (and more to come if estimates are correct), many First Time Home Buyers spends months making offer after offer, only to get outbid. 

Bidding wars seen in markets for foreclosed homes

Prices of foreclosed homes have taken such a beating that investors are jumping in and bidding up prices. Investors who win bids are often cash buyers who do not need to go through the appraisal process to get a loan. Traditional buyers who are looking for a home to reside in are at a disadvantage. Jerry Lou Davis, a real-estate agent in California, says the activity in the foreclosed housing market is similar to the housing bubble of yesteryears. Jay Butler, director of the Realty Studies program at Arizona State University, concurs with this view. “This market is about as abnormal as the hypermarket that we came out of a few years ago,” said Butler. Experts say that the bidding wars will impede stabilization of the housing market.

In Phoenix, the median home price, which was $265,000 3 years ago, was $125,000 last month, from a low of $115,000 in April. Real estate agents across the country have been observing price wars in the last couple of months, according to Walter Molony, a spokesman for the National Association of Realtors. In states such as Nevada, Arizona, California, and Florida, where home prices are moving to levels well below their peak values, it is not uncommon for sellers to get multiple offers. Jonathan Abbinante, a real estate agent in Las Vegas, says some of his clients are making 3 offers a day on homes they have not seen. “I sell homes right over the Internet,” said Abbinante. “That’s what I did in 2004.”

If you’re a First Time Home Buyer and want to take advantage of the $8000 First Time Home Buyer Tax Credit, the time to act is NOW! I know November seems a long way off but as you can see, the home buying process is much longer now and you have to be closed by November 30, 2009 (This has been extended to June 30, 2010 but you have to be in escrow by April 30).

IT’S TOO IMPORTANT…DO IT RIGHT!

First Time Home Buyer - Should I buy a Condo?

I thought I would share this inquiry I received from Zillow.com.

I was asked if it was a good time to buy a new construction condominium. If you’re thinking the same, here’s what I shared with this First Time Home Buyer.

Buying a condo requires a lot more “homework” than does buying a single family home, here are some of the Pros and Cons.

Pros 

  • If you are a qualified First Time Home Buyer, you may be eligible for the $8000 Federal Income Tax Credit, provided you close before November 30,2009 (extended to June 30, 2010 but you have to be in escrow by April 30.)
  • If you are purchasing in Riverside County (CA) you may also be eligible for the special Riverside County Tax credit (check out our posts on the Riverside County programs)
  • The usual benefits of condominium living still apply (little to no maintenance required) and the prices are usuallly lower than single family homes.

Cons

  • If it is new construction, the State of California is no longer taking reservations for the $10,000 stat home buyer tax credit.
  • Unless the project is FHA/VA approved you will be required to make a down payment of 20%. (The salespeople should know this).
  • In order for you to close by November 30, the project will have to have met it’s presale requirements. Right now it’s 51% of sales have to be to owner occupants. That may go to 70% if Fannie Mae gets her way.
  • If it is an existing project be sure to check the percentage of owner occupants vs. tenant occupied. If there are too many tenants, you will in effect be buying an apartment which will be very difficult sell in the future.
  • Be sure to check on the financial health of the Homeowner’s Association. If it is a new project and the builder/developer still controls the HOA, if he goes under so does the HOA and there goes all the amenitites you would have been paying for. If there are a large number of foreclosures in the complex, it means not many HOA dues are being paid which is a recipe for disaster.

If the condo lifestyle is something you’ve dreamed about, now can be a very good time to buy IF do your homework!

 

IT’S TOO IMPORTANT…DO IT RIGHT!

First Time Home Buyer Program-MCC The Tax Credit that keeps on giving!

Riverside County (CA) in its effort to promote homeownership for First Time Home Buyers has rolled out a series of programs designed to assist Low and Moderate Income families achieve their dream of homeownership. This is the fifth in a series of posts about these programs. For more information on the County programs, visit the County website: www.rchomelink.com

First Time Home buyers already have the $8000 Federal Income Tax Credit (Note: You have to be closed on your home by November 30, 2009 to receive the credit) and the $10,000 Tax Credit for New Home buyers in California (If this is you, you better get moving they are almost out of money). WANT MORE?
The Riverside County Mortgage Credit Certificate (MCC) program is another tax credit that enhances the ability of First Time Home Buyers to qualify by effectively increasing your “home buying power”. Plus, it’s a credit you have year after year. Check out the table below for an example.

What is a MCC? A Mortgage Credit Certificate (MCC) entitles qualified homebuyers to reduce the amount of their federal income tax liability by an amount equal to a portion of the interest paid during the year on a home mortgage. The Riverside County MCC Program provides for a 15% rate that can be applied to the interest paid on the mortgage loan. A new homeowner can claim a tax credit equal to 15% of the interest paid during the year. Since the borrowers taxes are being reduced by the amount of the credit, this increases the take-home pay by the amount of the credit. The buyer is still able to take the remaining 85% interest as a deduction. When underwriting the loan, a lender considers this and the borrower is able to qualify for a larger loan than would otherwise be possible.
To receive immediate benefit of the MCC tax credit, the homebuyer would file a revised W-4 withholding from their employer to reduce the amount of federal income tax withheld from his/her wages, thereby increasing their take home pay.

If you elect not to revise your W-4 you would see a dollar for dollar reduction in your tax liability for the year.
Consult your tax professional for the best option for you.

The MCC program is not limited to First Time Home buyers. A non-First Time Home buyer may be eligible if they are purchasing within a Riverside County designated Target Area. Information on Target Areas is available on the EDA Website: www.rivcoeda.org

How do I apply for a MCC? – Borrowers must apply for a MCC through a participating lender who will perform an initial qualification and assist the borrower in completing the MCC submission forms. The lender then submits the MCC application to the County., and when approved will issue a MCC commitment to the lender.
To further enhance all of the Riverside County Programs the MCC may be used in conjunction with the other Riverside County Homeownership Assistance Programs.

Effective Home Buying Power With and Without a

First Time Home Buyer Programs -Down Payment Assistance - NSHP

Riverside County (CA) in its effort to provide housing for low and moderate income families has rolled out a series of four programs to help qualified First Time Home buyers.

The Neighborhood Stabilization Homeownership Program (NSHP) is a three year program or until funds are exhausted. For more information on this and the other First Time Home Buyer Programs visit the County website: www.rchomelink.com

Program Highlights:

  • Must be a first-time home buyer- have not owned a home within the last three years
  • Qualified buyers will receive 20% of the purchase price of the home towards down payment assistance
  • Purchase price must be 1% below EDA provided appraisal (this appraisal is separate from first loan appraisal)
  • Program only available in the designated foreclosure target areas of Riverside County. Please check Target Areas Map listed on the EDA website. http://www.rivcoeda.org
  • Must be foreclosed home (REO, Bank Owned)
  • Home must be vacant for 90 days
  • Repair component can be added to the loan with a maximum of $75,000 for down payment assistance, appraisal cost and repairs
  • Home must be built after 1978
  • Maximum purchase price is $292,686
  • Homebuyer education required (Schedule your class early, they fill up quickly)
  • Income Limits:Maximum Annual Household Income Adjusted for Family Size-NSHP

If you or someone you know is looking for more information about First time Home Buyer programs, please leave a comment and/or share.

For more valuable first time home buyer information visit our website: www.homebuyerhelpnetwork.com

IT’S TOO IMPORTANT…DO IT RIGHT!

Greg Cook
First Time Home Buyers Network
phone: 951-265-4532
fax: 951-699-7813
email: greg@homebuyerhelpnetwork.com
website: www.homebuyerhelpnetwork.com
blog: http://helpforfirsttimehomebuyers.wordpress.com/

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First time home buyer programs in Riverside County Part 2

Riverside County(CA) as part of it’s continuing effort to promote homeownership for low to moderate income First Time Home Buyers has rolled out four programs for 2009-10.

The second of these programs is the Redevelopment Homeownership Program (RHP). Details are available at the county website: http://www.rchomelink.com

Types and Amount of Assistance:

Down Payment Assistance – 20% of the purchase price for down payment in the form of a silent deferred loan (2nd mortgage).

Must be a First Time Home buyer – has not owned a home or claimed mortgage interest deduction in the last three years.

Purchase Price Limit – $292,686

Type of home – New, Resale, minimum of 2 bedrooms, vacant for 90 days, in ground pools ineligible

Home Location – unincorporated areas or redevelopment areas within Riverside County

Redevelopment Areas -  There are 11 Redevelopment Areas within the following cities: Blythe, Coachella, Corona, La Quinta, Menifee, Murrieta, Palm Desert, Palm Springs, Perris, Riverside and Wildomar.

Low to Moderate Income -  has an annual income that is not greater than 120% of the area median income. (See chart below)

Utility Allowance – For the purpose of determining Affordable Housing Cost the monthly housing payment will include an estimate of the monthly utilities cost according to the number of bedrooms in the home.

IMPORTANT: Qualified First Time Home buyers may be able to use the Homeownership Assistance Programs with the $8000 Federal Income Tax Credit for First Time Homebuyers

If you or someone you know is a First Time Home Buyer and finds this information valuable, please comment and share.

Maximum Annual Household Income Adjusted for Family Size

First time home buyer programs in Riverside County Part I

How to do it:

Riverside County (CA) has released their Down Payment Assistance programs for low and moderate income families.

Funds are limited for this program and are reserved on a first come, first served basis, so it’s critical you DO IT RIGHT! to increase your chances of getting your share of the available funds.

Here’s the process:

  1. If you are a first time home buyer whose income is within the Program limits, the first step is to contact a participating lender for eligibility screening. Income limits are available at the County website: http://www.rchomelink.com or at our website: http://www.homebuyerhelpnetwork.com (Note: The County uses different criteria for income than the lender)
  2. After the lender has determined if you are eligible for the program, you will need to attend a Home buyer Education class for the FTHB program. The lender will provide the names and phone numbers of approved homebuyer education providers and you will need to call one of the providers to schedule a class. The list of providers is also available on the County website: http://www.rchomelink.com or www.rivcoeda.org
  3. Once you are pre-approved and the lender has collected all of your required documentation and you have a maximum home price, you can begin the process of finding a home. We recommend using a Realtor who is a Certified First Time Homebuyer Specialist and experienced with Down Payment assistance programs.
  4. Once you have located a home in a participating location, you will need to make a purchase offer and start escrow. Many First Time Home buyers are not aware of the keen competition for houses, so it make take more than one offer before you and the down payment assistance programs are accepted. There are County required forms that need to be part of your offer (Your lender will have those forms).
  5. During escrow your lender will process your loan application for the first mortgage and FTHB second mortgage. You will be required to sign forms authorizing the lender to submit a FTHB Reservation on your behalf and disclosing your current income from all sources. You have a limited time in escrow to turn in and complete all the required paperwork, so it’s critical you are responsive in a timely manner to the requests for documentation. Failure to provide the documentation could result in funds not being available.
  6. Prior to the close of escrow you will sign loan documents and both the first and second mortgages will be funded. When escrow closes, you will become a homeowner and will be responsible for maintaining the property in sound condition. The FTHB second mortgage will not require payments until you sell your property or do a cash out refinance on the first mortgage. After the 15 year affordability period, the FTHB assistance is converted to a grant with no repayment of funds.

If you or someone you know is a First Time Home buyer and may be qualified for the Homeownership Assistance programs, please leave a comment and share.

First Time Home Buyer Program Down Payment Assistance

Riverside County (CA) recently announced the terms of their First Time Home Buyer Program for 2009-2010. Last year the funds for the program went quickly, so it’s time to get moving if you want a shot at some of the funds.

More information can be obtained at the new Riverside County website for homebuyers. http://www.rchomelink.com

The primary objective of the First-Time Home Buyer (FTHB) Program is to provide assistance to low income persons in the purchase of their first home.

Down Payment Assistance –

  • Provide up to 20% of the purchase price for down payment assistance
  • MCC Program can be combined with FTHB Program (for more information on the MCC program, check out our website: www.homebuyerhelpnetwork.com
  • First-time Home buyers – Aplicants cannot have owned a home in the last three years
  • Low Income – Annual income not greater than 80% of the area median income. (Visit our website: www.homebuyerhelpnetwork.com for income limits). Income limits based on family size. See Chart Below
  • Home Location- Anywhere in Riverside County, except Coachella, Corona, Hemet, Indian Wells, Indio, La Quinta, Moreno Valley, Perris, Rancho Mirage and Riverside
  • Price Limit-Both appraised value of the home and the actual purchase price cannot exceed $292,686
  • New or resale single family home, condominium/townhouse or NEW manufactured home.
  • REO or foreclosed properties are not acceptable
  • Short Sales acceptable
  • Homes with in-ground pools are ineligible

Funds are limited for this program and will be allocated on a First Reserved basis.

Qualified First Time Homebuyers may be eligible for Down Payment Assistance and $8000 First Time Homebuyer tax credit. Consult your certified First Time Homebuyer Specialist for details.

If you or someone you know is interested in the homeownership assistance programs offered by Riverside County, please comment and/or share this post.

Maximum Annual Household Income Adjusted for Family Size-1

NOTE: Riverside County has three other homeownership assistance programs, look for details

Why good people can't get good first time home loans

You might have heard we are in a housing crisis with a credit crunch.
What this really means to First Time Homebuyers is that the rules have changed and continue to change.
Unless you have just won the lottery, you’re going to need a loan and unlike a couple of years ago you have to do more than pass the “fog the mirror test”.
Lenders are scrutinizing ever loan application closer than ever and as a result many First Time Buyers are left wondering why?

Reasons Why Good People Can’t Get Good Loans
By Peter G. Miller, RealtyTrac

There’s been a price to pay for toxic mortgages. You’re paying in the form of lower home values, fewer jobs, falling stock prices, massive deficits and a government that is printing money at an unprecedented rate — a rate that could result in substantial levels of inflation if we’re not careful.

The situation is even more severe if you want to finance or refinance real estate. Here again you’ll pay, even if you have terrific credit and a mound of bullion in the basement. Why is it that good people with good credit and cash in their pocket are having so much trouble getting home loans? There are five key reasons which explain why the credit crunch is crunching even the best of us.

1. It’s Not You
I have been working with a client, who was very frustrated that she was being asked to fully document her income and assets even though she was making a twenty percent down payment and had a credit score close to 800 and had enough money in the bank to pay cash for the house. She felt she was being treated unfairly and that she did not represent a risk to any lender.

Truth is, on a one-to-one basis, she’s right. The problem is that the world is not operating on a one-to-one basis. Instead, there’s a vast system in place to originate loans and to then sell them. The money made from selling mortgages is used by lenders to create new loans with lenders getting fees, charges and interest along the way.

The people who buy loans, investors, are none too pleased with the U.S. mortgage system right now and who can blame them? The result is that the only way investors are going to buy U.S. mortgages and mortgage-backed securities is if loan applications are fully documented and verified. All loan applications, even from terrific borrowers with lots of equity and great credit.
I also had to remind her about NINJA loans (No Income, No Job or Assets). Much of today’s credit crunch was the result of investor’s appetitie for these types of loans and just like any food that has made you deathly sick once, your not liable to be hungry for them again, especially if you are still suffering the after affects of your first meal.

2. Where’s My Security?
As much as lenders want borrowers with solid credit and documented income and employment, they also want something else: Strong security for their loans. The logic is that if the borrower can’t pay, the lender gets the property to settle the debt so the property has to be worth a certain amount.

This system worked well when home values were rising, but now many homes are worth less than the debt they secure. If you bought with little or nothing down or if you have an “affordability” loan that allows for negative amortization (meaning the principal amount can grow because those low monthly payments are not even covering interest costs), when it comes time to refinance you’re asking lenders to give you a loan that is worth more than the house. No prudent lender would do that and with good reason: If the property is foreclosed, it will not generate enough revenue to pay off the loan.

3. The Flight to Credit Quality

The Federal Reserve reports that banks have been tightening their credit standards during the past quarter. This, of course, is in addition to previous efforts to raise credit standards. The result is that a large number of people who would like to finance and refinance can’t take advantage of today’s low mortgage rates. Like Moses at Mount Nebo, borrowers can see the Promised Land of less interest and better loans but they’ll never get there because of today’s credit extremism.
FHA loans are a perfect example of this at work. For years FHA has touted “no minimum FICO score” but today if you have a credit score less than 620, you have three chances of getting an FHA loan (none, fat and slim left town).

4. Where the Money Went
Despite hundreds of billions of dollars given to banks in late 2008 and early 2009, they’re plainly not lending as much as they could. Instead, much of the money has gone to build up capital, acquire other companies and make sure that no executive misses a fat paycheck for the leadership efforts that created the mortgage meltdown in the first place.

Money from the U.S. government that was plainly intended to restore the lending process has instead been diverted into lender vaults and executive accounts. Having been spent for other purposes, that money is simply unavailable to mortgage borrowers, regardless of their credit standing or the value of their homes.

5. A Contract Is a Contract
During the past five years millions of so-called “affordability” mortgage products have been originated. Such loans are routinely distinguished by low monthly payments up front as well as growing loan balances. The result is that once “start” periods end after two, three or five years, the borrower owes more than the original loan balance and faces vastly larger monthly payments.

A savvy borrower, of course, would refinance the loan before higher monthly costs kick in, but now such changes are impossible for most borrowers. Why? Three reasons: First, while the mortgage balance has been growing in many cases the underlying value of the home has been declining. Second, higher monthly costs have resulted in late payments and no payments, meaning substantial credit issues have arisen. Third, toxic loans routinely include substantial prepayment penalties.

If you or someone you know is a First Time Homebuyer, please comment and/or share this information.

For more valuable information for First Time Homebuyers visit our website: www.homebuyerhelpnetwork.com

IT’S TOO IMPORTANT…DO IT RIGHT!

Greg Cook
First Time Homebuyers Network
phone: 951-265-4532
fax: 951-699-7813
email: greg@homebuyerhelpnetwork.com
website: www.homebuyerhelpnetwork.com
blog: http://helpforfirsttimehomebuyers.wordpress.com/

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Where are home prices headed for first time home buyers?

Home Prices and Interest Rates, where are they headed?

If you’ve read my previous posts on interest rates, you know that no one knows for sure, but everyone has an opinion.

Same is true for home prices, the government and media would have us believe we are at the bottom of the market. There is still evidence that we have some more pain and suffering in the housing market.

Here is some info from some “experts”:

Where are home prices headed?

According to analysts, home prices may fall in the near-term and rise only in 2012. “We expect prices to drop for another year and then stabilize before starting to rise with incomes,” says Standard & Poor’s Chief Economist David Wyss. The S&P/Case-Shiller U.S. National Home Price Index, which tracks the movement of home prices, will fall about 16% this year before stabilizing. Fiserv, a research firm, has forecasted the 2012 home prices in 50 largest metro areas across different states.
In some states such as Wisconsin, Ohio, Indiana, and Michigan, home prices will see a rise by 2012. However, in states such as Florida, California, New Jersey, and New York, prices will fall until end 2012.

Elliot Eisenberg, a senior economist with the National Association of Home Builders says there’s still pain to come in states where there’s oversupply. “Prices will have to come down further and it will take a while to burn off the excess inventory that’s floating around there,” said Eisenberg. So what should home buyers do now? Is it a good time to buy? “To generalize, yeah, it is a good time to buy a house. I don’t think there’s any urgency because I think it’ll still be a great time to buy a house a year from now,” says economist Richard DeKaser of Woodley Park Research.

If you like, the content please leave a comment and share!

First Time Home Buyers - My FICO

Just when you thought the credit score reporting process couldn’t get more confusing for consumers, some major changes have taken place in the last year with the rollout of the new FICO score model known as FICO 08.

I’ve always encouraged people to be proactive in addressing and fixing any credit challenges they may have—and that still applies. However, it’s more important than ever before to take a hands-on approach to your credit, and understanding how recent changes may affect your credit scores and is a key part of being proactive.

Here’s a summary of a blog from Linda Ferrari of Credit Resource Corp. The complete article and other great information regarding your credit is available on Linda’s blog at: http://lindaferrari.com

FICO 08 – The Algorithm Has Changed (Algorithms are the mathematical formulas used to calculate your credit score)
Beginning last year, Fair Isaac & Co. implemented changes in how FICO scores are computed, calling the new system FICO 08. The model replaces the existing FICO model, which has remained relatively unchanged since the 1980s.
Per Fair Isaac, here are the key changes in the new model:
Yes, Authorized User Accounts Still Work—But Only For Family!
One of the credit-repair tricks that became popular in recent years was paying thousands of dollars to be listed as an “authorized user” on the account of someone with good credit (usually a stranger), thereby improving your FICO scores enough to get into that home or auto loan immediately. That stops with FICO 08, and rightfully so – because this practice was an obvious form of fraud. Note: because alternative credit has almost become a thing of the past having enough credit lines established for at least two years can be the “make or break” in your loan approval.
Here’s the good news—the new model will still allow legitimate authorized users such as a spouse and/or family member. And I can tell you confidently that this credit building technique still works for spouses and children who have the same last name as the credit card owner. There have been two cases in the last 60 days where I have seen my clients’ credit scores jump 50-60 points after being added to their spouse’s credit card account.
As a true consumer advocate, my advice is to build your own credit first. To maximize the benefit of this option, you should make sure that the account you are being added to belongs to someone you trust, has NO
negative history reporting at all, has and keeps a balance under 30% of the limit and is at least 2-3 years old.
Here are some other changes that were incorporated into FICO 08:
Having just one big black mark on the credit report, like a repossession, will
matter less than it used to if the report demonstrates responsibility overall.
Collection accounts with balances less than $100 will not impact the credit score any longer.
Maxing out those credit cards will drag scores down even more than it used to FICO 08 increases the emphasis on having available credit.

Having a mix of credit is also more important in FICO 08. This means
consumers MUST have at least 1-2 active major credit card accounts.
As a credit score expert, the changes that I have seen in hundreds of credit reports are NOT representative of what consumers were led to believe a year ago when the new model was introduced. FICO said that the new model would have less impact on credit scores under certain circumstances, however, in my experience, the new model appears to be producing lower scores under almost every circumstance. Especially when it comes to credit card balances and late pays. So if you are one of those people who are out there wondering why credit scores have dropped in the past few months—even though nothing has changed, this could be why.
So what can you do?
1. Maximize. The most effective way to improve credit scores is by ensuring the information used to generate the score is accurate. You may also want to consider purchasing a copy of Linda’s book, The Big Score – Getting It & Keeping It – Buying Power
for Life, which is a comprehensive How-To Guide on how to maintain strong
credit reports and credit scores.
2. Keep Credit Card Balances As Low As Possible. Carrying balances over 50% of the credit card limits (PER CARD) was always something to avoid, but it can hurt you even more under the new FICO 08 model. Anything over 50% will decrease points on a credit score, and anything between 30% and 49% means your clients are just treading water. To improve your credit carry a balance under 30% of your credit limit.
Stay clear of the two extremes of closing accounts on the one hand
and opening accounts they don’t need on the other. And make sure that
all positive accounts and credit card limits are being reported to the three major credit bureaus, Equifax, Experian and TransUnion.
3. Paying Bills On Time. There are TWO important DON’Ts when it comes to late pays:
DON’T underestimate the effect that late pays have on credit scores.
DON’T overestimate the kindness of creditors to remove late pays just
because of a good payment history with them.
One 30-day late can cost 50-80 points immediately. Trust me on this—late pays are the most difficult derogatories to have removed from credit reports and they take at least 2 years to start significantly aging out.
The easiest way to make sure payments are made on time is to sign up for automatic withdrawal, if it’s available. If you don’t have the cash flow to do this, at the very least be sure to mail your payments 7-10 days before the due date (or pay online 3-5 days before the due date) to ensure payments are received and processed by the time they’re due.
Consider working with creditors to change monthly due dates to better fit within your budget.
In conclusion, I want to once again stress the importance of always being proactive.

Read about Linda’s new book, The Big Score – Getting It & Keeping It – Buying Power for Life.
Copyright – 2009 – LoanOfficerMagazine.com
Written By: Linda Ferrari

CNBC Announced The Housing Market Has Officially Bottomed!

If you believe that, I’m in foreclosure on a bridge I can let you have cheap!

Anyway Cramer deserves equal time, if for nothing else he get’s to say “I told you so!”

Cramer: Housing Has Officially Bottomed

cnbc.com| 16 Jun 2009 | 06:34 PM ET
Residential real estate has finally found a floor, Cramer told viewers on Tuesday. The sector’s long, steep descent is all but over. He had predicted this day would come by the end of June, and he was right – with just two weeks to spare.
How can Cramer be so sure? New housing data reported today showed a dramatic change for the better, especially in some of the hardest-hit areas in the US. That news, along with much lower prices and the working off of inventory, validate his prediction, made last August, that housing would stabilize this month, ending its multiyear declines.
According to the Commerce Department, there were 47,000 more housing starts in May than the 485,000 expected, a number 17% higher than the month before. The two regions seemingly in the biggest hole, the South and West, jumped about 17% and 29%, respectively. Building permits, which can predict the market’s future to a certain extent, showed significant growth as well.
Now Cramer – and probably the homebuilders, too – sense an end the morass that
weighed so heavily on the markets.
What does a bottom look like? It’s the combination of ramping sales, and sales in certain areas are up ten times those of last year, and an end to falling prices.
That’s exactly what we’ve seen for the past three months, Cramer said.
Of course, this doesn’t mean home prices skyrocket right back to their bubbly heights. Cramer’s call was about only price stabilization, not appreciation. So he isn’t about to recommend homebuilders like Pulte or Toll Brothers just yet. The increased building at this point is more a chance to unload land these companies have been financing, leaving the eventual sale almost profitless.
Another point worth noting: Today’s numbers also disproved the talk about higher mortgage rates hurting a housing recovery. Prices are down, rates are still low compared to a year ago and the tax credit for first-time buyers is drawing people into the market. All the forces needed to boost the sector are there.
Also, don’t think the new starts, combined with foreclosures, will lead to a new glut of inventory. Builders aren’t going to make that mistake, Cramer said, putting up homes they can’t sell. Nor do the banks need to rush foreclosed homes back onto the market. They now have the capital, thanks to Washington and a spate of secondary offerings, to hold on until they get their price.
Cramer thinks the best way to play the housing bottom is with the banks holding the most mortgage exposure: JPMorgan Chase , Wells Fargo and definitely Bank of America .
Finally, if you’re wondering why the market didn’t rally because of housing starts, that’s because people are as blind to the bottom as they were to the top,
Cramer said. But you can’t wait for some analyst to make the call. You have to buy now if you want to make some money.
Cramer’s charitable trust owns Bank of America, JPMorgan Chase and Wells Fargo.

Whether you choose to believe CNBC or the contrarians out there. Do you research and be prepared to buy your first home the right way!

Temecula Real Estate - Shadow inventory?

There is evidence that the banks may be “cookin the books” again when it comes to their inventory of foreclosed homes. As a First Time Homebuyer you should be concerned because there is a HUGE disparity between the number of homes that have been foreclosed and the number actually on the market.

If the banks are holding back on the available homes they are artificially inflating values and the home you are thinking about buying may be worth less in a few months if they do release this “shadow inventory”.

Here are some excerpts from an article that originally appeared on http://exiledonline.com/

Contrary to just about every single economic metric — rising unemployment, rising credit card debt, falling production, spiraling real estate values — people are optimistic. The recession is yesterday’s news, everyone’s moved on. People are actually believing the hype and getting into real estate again. And anyway, how the hell can we talk about real estate when America is torturing people and still not closing Guantanemo!

Well, the real estate industry is fine with us not paying attention. Because it has a dirty little secret that shows just how (messed up) our economy really is, and how insolvent they really are.

Fact is, banks all across the nation are keeping foreclosed properties off the market. They’re doing it on purpose, to fudge the statistics and make it seem like everything’s alright.

The San Francisco Chronicle:

Lenders nationwide are sitting on hundreds of thousands of foreclosed homes that they have not resold or listed for sale, according to numerous data sources. And foreclosures, which banks unload at fire-sale prices, are a major factor driving home values down.

“We believe there are in the neighborhood of 600,000 properties nationwide that banks have repossessed but not put on the market,” said Rick Sharga, vice president of RealtyTrac, which compiles nationwide statistics on foreclosures. “California probably represents 80,000 of those homes. It could be disastrous if the banks suddenly flooded the market with those distressed properties. You’d have further depreciation and carnage.”

In a recent study, RealtyTrac compared its database of bank-repossessed homes to MLS listings of for-sale homes in four states, including California. It found a significant disparity – only 30 percent of the foreclosures were listed for sale in the Multiple Listing Service. The remainder is known in the industry as “shadow inventory.”

The number of foreclosures is not going to decrease any time soon. Sean O’Toole, Founder and CEO of ForeclosureRadar.com, told me that out of the 9 million mortgages in California, 2 to 3 million are upside down, which means their houses are worth less than what they owe on the bank. On top of that, anywhere from 700,000 to 900,000 households have stopped making payments and somewhere around 250,000 are scheduled to be foreclosed.

This adds up to a staggering number: a total of 3 to 5 million homes, one quarter of the 12 million households in California, are going to flood the market very soon. Nationwide, there is a two-year supply of unsold homes, twice what official statistics estimate.

To put it simply: banks are limiting supply in order to keep inflating the bubble. Keeping properties off the market makes sense for two reasons: it allows banks to engage in another round of brazen ripoffs by selling at least some of their properties at artificially high prices to a new wave of sucker investors (many of which are first-time home buyers). But more importantly, it allows the banks to avoid recording a loss on their balance sheets, making them look more profitable then they really are

It looks like the banks are all in on this racket together. Earlier this year, the industry had accounting rules changed to make this kind of market manipulation possible (meaning, profitable.) That’s what those new “mark-to-model” accounting rules back in April were all about. Instead of having the market determine prices, the changes allowed banks to value their assets based on a future projected worth to be determined by the banks themselves.

The change was pushed through with an aggressive lobbying campaign by the financial industry. For a measly $30 million in lobby fees, banks inflated their worth by tens of billions of dollars, instantly. Wells Fargo said the change boosted its capital by $4.4 billion in the fist quarter. In the second quarter, it is expected to increase banks’ earnings by an average of 7%.

It might be legal now, but it’s still fraud and flagrant market manipulation.

Here’s an account by the WSJ of how it went down:

The rules had required banks, securities firms and insurers to use market prices to help assign values to mortgage securities and other assets that don’t trade on exchanges — to “mark to market.” But when markets went haywire last fall, financial firms complained that the rules forced them to slash the value of many assets based on fire-sale prices. That contributed to big losses that depleted their capital and left several of the nation’s largest firms on the brink of failure.

Earlier this year, financial-services organizations put their lobbyists on the case. Thirty-one financial firms and trade groups formed a coalition and spent $27.6 million in the first quarter lobbying Washington about the rule and other issues, according to a Wall Street Journal analysis of public filings. They also directed campaign contributions totaling $286,000 to legislators on a key committee, many of whom pushed for the rule change, the filings indicate.

Rep. Paul Kanjorski, a Pennsylvania Democrat who heads the House Financial Services subcommittee that pressed for the accounting change, received $18,500 from coalition members in the first quarter, the second-highest total among committee members, according to Federal Election Commission records. Over the past two years, Mr. Kanjorski received $704,000 in contributions from banking and insurance firms, the third-highest total among members of Congress, according to the FEC and the Center for Responsive Politics.

The one obvious connection that is not being made is that this change in accounting, linked up with the shadow real estate inventory, is the shady base supporting our entire economy. Without the new rules, banks wouldn’t be able to pad their books in order to appear profitable. And without fudging the numbers, banks would never pass Geithner’s “stress test” or ever hope to to appear even slightly solvent.

It’s a twisted sort of logic, but it’s legal. It’s also very frightening. To think that all these empty homes I see around me are what’s keeping the US economy from total meltdown… If they had For Sale signs on them, the economy would tank even further. For now, these zombie homes don’t officially exist.

Ain’t the free market great?

SOURCE: http://exiledonline.com/

Please comment and share with your friends and other First Time Homebuyers.

Mortgage Rates Head for 6 percent: 5 Reasons They Might Retreat

I received an email today asking when rates were going back down. My initial response was “If I knew, I could retire to my own private island in the Pacific” but it was a legitimate question that deserved an answer.

The answer is: NOBODY KNOWS! There are a lot of people with an opinion but nobody knows for sure.

Waiting for interest rates to go down is a risky proposition for two reasons:

1) It might not happen

2) If you wait too long the $8000 tax credit may be gone and waiting to save  a quarter of a percent in interest rate isn’t worth the potential money in your pocket.

There is however, one constant in interest rates: They will do one of three things: 1. They can go up  2. They can go down 3. They can stay the same.

In only one of the three scenarios, can you get better than what is being offered today. How much of a gambler are you? It’s your money.

All that being said here is one “expert’s” opinion: (If you really want to know what I think, go to the end of the post)

Only a couple of months ago, exceptionally low mortgage rates were one of the few optimistic landmarks in an otherwise bleak economic outlook. After the Federal Reserve unveiled a series of initiatives beginning last fall–such as purchasing Fannie Mae and Freddie Mac mortgage-backed securities and long-term treasury bonds–mortgage rates plunged to all-time lows. In early April, with 30-year fixed mortgage rates dropping to less than 5 percent, President Barack Obama beseeched homeowners everywhere to capitalize on the development by refinancing their mortgages. “The main message we want to send today is there are 7 to 9 million people across the country who right now could be taking advantage of lower mortgage rates,” the president said, according to the Associated Press. “That is money in their pocket.”

But in recent weeks, mortgage rates have spiked. And today, they represent perhaps the most menacing obstacle to the federal government’s efforts to revive the housing market and pull the economy out of its devastating rut. Rates have surged from 5.03 percent on May 26 to 5.79 percent on June 10, according to HSH.com, as mounting concerns over government spending and potential inflation have sent yields on 10-year treasury notes–which fixed mortgage rates typically track–barreling towards 4 percent. In just 2½ weeks, much of the Federal Reserve’s work to drive rates lower has unraveled.
Higher mortgage rates undercut the recovery in a number of ways. First, they drive housing costs up, which limits buyer demand and threatens to drag already falling home prices even lower (although even at 5.79 percent, mortgage rates are still phenomenally low from a historical perspective). But it’s the refinancing market that really gets hammered since higher rates destroy many homeowners’ incentives to restructure their mortgages. Last week, spiking rates sent refinancing applications plummeting to their lowest level since November 2008, according to Bloomberg News. That means fewer Americans will be able to reduce their mortgage bills, preventing monthly savings that could have enabled them to pump more cash back into the economy. “Whatever you hear in the media about the potential negative implications of 6 percent conforming rates on the mortgage refi arena … multiply it many times over,” wrote Mark Hanson, a managing director who handles real estate and finance research at the Field Check Group, in a report yesterday. At the same time, banks–which still face a long road back to health–may see less revenue from this business line that helped them fatten profits in the first quarter.

Despite the current surge, some experts say there is reason to believe that mortgage rates could reverse course in the near future, returning to the more attractive levels of a few weeks back. “It’s not real logical that mortgage rates are climbing–it’s not like we are out of the recession or the economy has changed dramatically,” says Guy Cecala, publisher of the trade publication Inside Mortgage Finance. “I don’t think it’s unheard of to say that sometime this summer we are going to see rates back below 5 percent.”
Here are five factors that could drive mortgage rates lower in the near future:
1. Government intervention: In an effort to reduce rates, the Federal Reserve could always intervene again. “There is still a reasonable probability that the Fed will raise or significantly increase its commitment to buy treasury bonds and Fannie and Freddie bonds,” says Mark Zandi, the chief economist at Moody’s Economy.com. Such an intervention could certainly push rates down in the short term, but it could also backfire by fueling additional concerns about inflation. And if an expanded effort fails to keep mortgage rates lower, the Fed could find itself in a serious lurch. Still, Zandi says it’s a risk that the Fed may have to take. “The risk of them not doing it is greater than the risk of them doing it,” he says.
2. Data dive: The relative improvement of recent economic data–which has fueled optimism for a recovery–is also partly responsible for the rise in mortgage rates. “The data is not good yet, but it is at least less bad,” says Richard Moody, the chief economist at Forward Capital. Over the fall and winter, 10-year treasury yields were depressed by the economic panic that boosted demand for ultrasafe government debt. But a growing sense of confidence has directed many investors to more risky assets like stocks instead of treasury bonds. As a result, treasury yields have increased, pushing mortgage rates higher. However, if future economic reports come in weaker than expected, investors could return to the safety of treasury bonds. “For example, next month’s job numbers are probably going to be measurably worse than the last one,” Zandi says, adding “and that will be a reminder” that the economy’s troubles are not over yet.
3. Stock market tumble: Since early March, the stock market has been in the swings of a surprisingly resilient rally, with the Dow Jones industrial average up roughly 33 percent over this period. But should stocks start tanking again, mortgage rates could retreat, Cecala says. “One thing that people don’t factor in is when the stock market tends to do better, mortgage rates tend to go up,” he says. “[If] the rally stalls–or if we have one or two days where we have a 100-point drop or more–you are going to see treasury rates and mortgage rates decline quickly. Investors will flock to the bond market.”
4. Exit strategy: Much of the upward pressure on 10-year treasury yields–and therefore mortgage rates–has been fueled by concerns about the mountain of government debt required to finance Uncle Sam’s massive bailout and stimulus programs. But Keith Gumbinger of HSH.com argues that if the Obama administration would outline a potential exit strategy for these commitments–perhaps indicating that not all of the funds would be deployed should the economy revive sooner than expected–the upward pressure on treasury yields could moderate. “If there was any expression of when these supports would be pulled, under what terms and conditions they would be pulled, and how we would rein in these really jaw-dropping deficits going forward, I think you would find that the markets would react positively to that,” he says.
5. Competition: Cecala also notes that an absence of competition in the mortgage market has enabled lenders to expand the difference or “spread” between the yield on 10-year treasury notes and mortgage rates. “Historically, the spreads between the 10-year treasury [yields] and 30-year mortgage [rates] are unusually large now,” he says. “That partly reflects the fact that we don’t have a competitive mortgage market.” But with refinancing applications dropping, Cecala says competition in the mortgage market could heat up, with lenders reducing these spreads to attract more customers. “The mortgage industry has spent a good part of this year trying to ramp up their mortgage operations to take advantage of the [refinancing] boom,” he says. “I don’t think they want that to go away, and they can be more competitive on rates than they have been.”

I promised my opinion on interest rates: “Maybe they will, maybe they won’t go down” but I prefer not to gamble with my money because if I guess wrong I’ll be paying for it for 30 years.”

10 Things you need to know about the $8000 tax credit

Here are the 10 things you need to know about these changes:

1. The IRS tax credit refund can be made only to the taxpayer and not a third party.

2. Government agencies may offer tax credit advances with second liens.

3. The buyer cannot get cash back through the tax credit advance.

4. The 2nd lien may not exceed the down payment, closing costs, and prepaid expenses.

5. The 2nd lien may be “soft” or require payments.

6. Payments on 2nd liens must be included in ratios unless deferred for at least 36 months.

7. Balloon payments on 2nd liens may not be before 10 years.

8. FHA approved lenders and FHA approved non-profits may purchase the tax credit.

9. Tax credit purchaser may not charge more than 2.5% of the tax credit as a fee.

10. IRS may deduct from the tax credit: unpaid student loans, tax liens and garnishments.

Unless you are using State Housing Finance funds or certain non-profit organizations, you will still need to come up with the 3.5% down payment. FHA unlike most other loans will allow you to receive a gift of down payment funds from a family member (Bank of Mom and Dad).

Teri and Mark, clients of mine, received a gift from the Bank of Mom and Dad to purchase their first home. Even though there was “no expectation of repayment”, Teri and Mark amended their 2008 Federal Tax Return, received the $8000 within about 60 days and repaid Mom and Dad.

The Tax Credit is still a great vehicle for First Time Homebuyers and if you have down payment it can cover your closing costs or discount points to enable you to get a lower monthly payment.

 

Mortgage rates jump: lock in now, or wait?

If you’re a First Time Homebuyer, the recent spike in interest rates has put the “money chip” squarely in front of you.

Should you lock now or wait and hope that rates come back down?

Here’s some help for your decision making.

1. HOPE is not a strategy!

2. Predicting interest rates is a fairly simple thing to do, if you know your options. Interest rates are only going to do three things going forward: They can go up, They can go down, or they can stay the same. In only one of the three can you get better than what is offered today. In the immortal words of Harry Callahan (sorry another pop culture reference): “Do you feel lucky? Well do ya’ ****?

3. Las Vegas is a perfect example of how this interest rate game works. If you’re floating your loan, it’s your money on the table. The question is when do you take your winnings off the table (lock)? Take a look at this picture of Las Vegas. Do you think they built everything here because the gamblers (you) took their money off the table at the right time?

Do you feel lucky?

4. Nobody knows what rates are going to do. Your neighbor doesn’t know, neither does your brother-in-law, co-worker, Uncle Fred who has never owned a home, your parents, your spouse, your barber, manicurist or masseuse don’t know. It’s easy for them to have an opinion because they aren’t playing with their money, it’s yours.

Posted by Two Cents Editors
May 29, 2009 9:50 am

Grab one now, or hope for lower rates?
Floaters got sunk this week. Anyone who is in the market for a new mortgage, be it a straight-up purchase or refinance, and was letting their rate float in hopes of locking in at a lower rate instead got smacked with a near quarter point rise in the 30-year fixed rate. According to Bankrate’s latest weekly survey (conducted Wednesday morning) the 30-year fixed average was at 5.45%, up from 5.23% That’s the highest level since February, and more than a half point above the 4.9% borrowers in early April could snag.

So what’s a floater to do now? Well, if you’ve lost your betting mojo, lock in and be happy. Yes, happy. Let’s remember that 5.45% is still seriously good. It was only one year ago that the average 30-year fixed rate was 6.1%. And long term, it is all but assured that a 5.45% fixed rate is going to look darn nice. It may take some time before the Fed gives up the fight and has to let rates rise to attract buyers for all the debt we now have to pay off, but it will happen. So while today’s 5.45% is high relative to a month or two ago, it is likely to be one you will boast about in the coming years.

Okay, enough of the long-term perspective. What if you’re still in betting mode and wondering about the next few weeks and months? Well, that’s one big crap shoot. The recent spike has been caused by action in the 10-year Treasury market (the 30-year fixed rate tends to follow movements in the 10-year note.) Late last week the bond market started worrying about inflation and servicing the federal deficit, and one thing led to another and the 10-year Treasury yield shot from 3.4% last Thursday to above 3.7% during trading yesterday (Thursday) before closing lower at 3.67%. Plenty of market watchers are expecting the trend line on the 10-year Treasury to keep moving up. But here’s where it gets interesting: there’s not as clear a picture if a continued rise in the Treasury will automatically cause the 30-year fixed to also rise.

The big wildcard is Ben Bernanke and his merry band at the Federal Reserve. The Fed has been actively buying up long-term Treasuries and mortgage backed securities in an effort to help keep yields low. When rates started rising the past few weeks the Fed signaled it wasn’t too concerned; in fact it seemed to be cheered by the notion that those slightly rising rates were a sign the economy was gaining a bit of strength. But now there’s a sense that the continued rise-capped by the big spike this past Wednesday-could refocus the Fed’s effort to push yields down; it has yet to use up even half the money it has allotted for the buyback programs, so it’s got plenty of gunpowder ready.

That could be good news for rate floaters; assuming the Fed is still worried that rates rising too quickly and too far will put the kibosh on the already anemic credit market recovery, it’s a decent argument to assume the Fed will soon ramp up its repurchases in an effort to push yields back down after their recent spike.

As David Rosenberg, the former Merrill Lynch economist now at Gluskin Sheff noted on Thursday morning:

“It’s one thing to have a Treasury yield backup when mortgage rates are still declining, but that is no longer the case. The yield on the 30-year fixed-rate is already up 20 basis points from the lows; 1-year ARMs have jumped 17bps. This is not what the Fed wants to see.”

Indeed, the recent rate uptick has sent a chill through the still frigid housing markets. According to the Mortgage Bankers Association, mortgage applications dropped 14.2% this week compared to a week prior.

The bet’s yours, floaters: lock in now at what still qualifies as a terrific interest rate, or put your money on the Federal Reserve pushing yields down in the coming weeks. Which way are you leaning?

– Carla Fried

First Time Home Buyers - Foreclosures coming with a vengance

The long expected tsunami of foreclsoures is right around the corner. In yesterday’s post “Reasons why good people can’t get good loans”, we talked about the “credit crisis” and “What lenders look for in a loan application”.

So, if you’re a First Time Homebuyer and think now is the time to take the plunge, you’re probably right. But if you haven’t taken care of “how you’re going to pay for it” you probably won’t won’t be spending a lot of time in the water.

Here’s the news on the next wave of foreclosures:

Diana Olick, CNBC just posted this on her blog….

I got a call yesterday from Scott Scredon at the Consumer Credit Counseling Services in Atlanta. He says they’ve seen a distinct change in callers. “We’re getting calls from engineers and attorneys and post graduate students,” he says. “Many of these people run through their 401Ks and their savings and start living off credit cards and then they call a counseling agency for help. So it’s a new kind of person we’re seeing today, but it’s a sign of the times.”
It’s not like we didn’t know it was coming, but apparently it’s coming with a vengeance.

Prime fixed-rate loans have finally leapfrogged those nasty subprimes to take the lead in the race to foreclosure. The foreclosure rate on primes has in fact doubled in the last year, and almost half of the overall increase in foreclosure starts in the first quarter of this year was due to the increase in primes.

So I asked Jay Brinkmann, chief economist over at the Mortgage Bankers Association, why all these aggressive industry and government modification programs aren’t helping, especially if the troubled borrowers are not in those nasty, exotic subprime loans.

“We have seen already in April a step up in some of the actions filed on people who don’t qualify. But when we look at vacant homes, when we look at cases where people are simply out of work, there’s simply nothing there that can be modified or worked out if they don’t have a job,” notes Brinkmann. On top of that, more and more borrowers are redefaulting and ending up in the mod system again. “Unfortunately, people that can’t live up to the promises they made originally when they were in a loan workout situation or simply that they were hoping things were going to get better and they did not. They then get back into the process and end up going to foreclosure. I think those factors will continue to drive the numbers up,” adds Brinkmann.

And one more thing: Freddie Mac estimates that 40% of the loans they have in foreclosure are on vacant homes. The borrowers don’t want a modification. Home prices have fallen so far that they will not see any equity for decades. So why pay?

On the bright side, if you can find it, the bulk of the trouble is still centered in four states: California, Nevada, Arizona and Florida, with Michigan, Ohio and Illinois close runners up. Brinkmann was surprised to see less of a national rise in foreclosures, but he is expecting it in the coming months.

Questions?  Comments?  RealtyCheck@cnbc.com


HUD announces guidelines for using $8000 tax credit!

To read the entire news release: http://www.hud.gov/release.cfm?content=pr09-072.cfm

Here are some excerpts from today’s release:

Today’s announcement details FHA’s rules allowing state Housing Finance Agencies and certain non-profits to “monetize” up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA approved lenders can apply the tax credit to their down payment in excess of 3.5% of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA’s new mortgagee letter, visit HUD’s website: http://www.hud.gov/

Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5% minimum down payment, but under the terms of today’s announcement, lenders can now monetize the tax credit for use as ADDITIONAL down payment, or for other closing costs, which can help achieve a lower interest rate.

You can “bet the farm”  companies will be springing up that will offer you help in “monetizing” your tax credit (for a fee of course). Expect it to look the tax refund loans some tax preparation agencies market. For every FHA borrower who is assisted through the tax credit program, FHA will collect the name and employer identification number of the organization providing the service as well as associated fees and charges. FHA will use this information to track the business closely and will refer any questionable practices to the appropriate regulatory agencies, as necessary.

Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayment via secondary financing provide by the HFA or non-profit.

NOTE: Remember lenders run via computers and it will take a while to get the programming up to speed before they will be able to close transactions using the tax credit. If your state housing finance agency doesn’t already have a program keep an eye on their website for updates.

Use your First Time Homebuyer Tax Credit for Down Payment

More details on this as they become available.

WASHINGTON, May 12, 2009

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, said that the Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a downpayment.

Donovan’s remarks came in an address to several thousand Realtors® gathered this morning at The Real Estate Summit: Advancing the U.S. Economy, a special daylong session at the Realtors® Midyear Legislative Meetings & Trade Expo here.

Secretary Donovan said that important changes, which the National Association of Realtors® has been calling for, will help consumers purchase a home. “We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a downpayment,” Donovan said. According to Donovan, the FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

Donovan said the Obama administration plans to further stabilize the housing market. “I do think we have some early signs hat the market overall is stabilizing,” said Donovan. “Since January we’ve seen both home sales moving up and down around a relatively stable number and we are seeing the first signs that the rapid decline in home prices is starting to abate.”

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said, “As the leading advocate for housing issues and homeownership, NAR continues to take a leadership role in promoting ideas for improving our economy by stabilizing the housing and real estate markets. Today we have the best of the best to begin a dialogue, develop solutions and initiate action toward real estate and economic recovery.”

The morning session included a panel discussion that was moderated by CNBC’s Ron Insana. The 13 panelists and Realtors® in attendance examined cutting-edge solutions necessary to promote and preserve homeownership and real estate development, stimulate the economy, and protect the nation’s taxpayers. They also shared their ideas on what the role and responsibility of the federal government is in the revitalization effort.

The list of distinguished panelists include Dr. Martin Feldstein, professor of Economics from Harvard University; Dr. Barry Bluestone, professor of Political Economy from Northeastern University; John Taylor, CEO of the National Community Reinvestment Coalition; Maria Kong, president of the National Association of Real Estate Brokers; and Sarah Rosen Wartell, executive vice president for the Center for American Progress.

“Right now the Federal Reserve is the market,” said Jay Brinkman, chief economist for the Mortgage Bankers Association. “What will be the effect when the Fed stops buying?” Brinkman explained that an exit strategy must be planned for the long-term; the federal government cannot continue to support the mortgage markets indefinitely.

“We must make sure FHA and the GSEs are supported,” added the Wharton School’s Susan Wachter.

“We are thrilled that so many high-caliber individuals were able to join us today at this important meeting to promote stability in the housing market and the U.S. economy,” McMillan said. “We look forward to an ongoing dialogue and action toward this goal, during our midyear meetings this week and beyond.”

For more information on the $8000 First Time Homebuyer Tax Credit and other imporant information for First Time Homebuyers, visit our website at www.homebuyerhelpnetwork.com

IT’S TOO IMPORTANT…DO IT RIGHT! 

Greg Cook
First Time Homebuyers Network
phone: 951-265-4532
fax: 951-699-7813
email: greg@homebuyerhelpnetwork.com
website: www.homebuyerhelpnetwork.com

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How does bankruptcy affect your credit and what you can do about it!

Filing for debt protection under federal bankruptcy laws can be a traumatic experience. Many people feel that “life as they know it” is over.

Many First Time Homebuyers feel that a prior bankruptcy will prevent them from ever becoming a homeowner. It doesn’t have to be that way! If you have made the decision to declare bankruptcy and are willing to follow a strategy to minimize the damage to your credit, you could be back in your own home in as little as two years.

BUT! you have to be committed to do the things necessary over that two year period. If not, your wait will be even longer.

I came across this post from Linda Ferrari, of Credit Resource Corp, and rather than duplicate it, here’s a link. There is a lot of valuable information on her blog. I hope you will use it to your advantage.

http://lindaferrari.com/establishing-credit/how-does-bankruptcy-affect-credit/#more-509

First Time Home Buyers -These Homes for Sale - SUCK!

I came across this article and if you have been looking at bank owned properties that “SUCK” then I’m sure you can relate.

These homes for sale suck

Never before have there been so many squalid, dilapidated homes on the market – and they’re helping to exaggerate already-plummeting home prices.

NEW YORK (CNNMoney.com) — Mold, maggots and piles of festering trash – no wonder home prices are in freefall.

It’s not just the subprime mortgage crisis that’s to blame for plummeting home prices. A flood of squalid properties on the market is helping to exaggerate the post-bubble price declines.

“Part of the reason home prices are declining is a fundamental deterioration in the housing stock,” said Glenn Kelman, CEO of the online, discount broker Redfin. “During the boom, nine out of 10 houses for sale in many markets were in prime condition. Now, for every 10 houses, at least three are dogs.”

Most of these mutts are foreclosed properties that have been permitted to fall into disrepair by lenders overwhelmed with thousands of vacant homes. If these houses sell at all, they’re going for bargain basement prices that are hurting home values throughout the neighborhood.

“I’ve never seen so many houses in this condition before,” said Ray Anderson of Buyer’s Advantage Real Estate in Auburn Calif., near Sacramento. “And I’ve been in the business 20 years. I’ve seen bank-owned properties in the past. They were never like this.”

Distressed properties usually sell for discounts of 10% to 40% below comparable, well-maintained homes, according to Tom Inserra, executive vice president for Zaio, an appraisal company that is creating a national database of home values.

Richard Smith, CEO of Realogy, the parent company for Coldwell Banker, Century 21 and Sotheby’s International Realty, estimates that homes that are not bank-owned have actually only seen price declines in the low single digits over the past 12 months. That’s compared with the 15% price drop recorded by the S&P/Case-Shiller Index for all homes over the same period.

‘Crime scene’

Lori Mize has firsthand experience with horrible homes for sale. She waited for years for prices to come down in her Elk Grove, Calif. home area, just east of Sacramento. With the median home there now selling 30% below the market’s peak, Mize thought it was time to buy. But nearly all the homes in her price range – $250,000 to $300,000 – are bank-owned properties, which tend to be in the most beat-up condition.

After looking at a few of them, she was almost ready to give up.

“The first one I saw was the worst home I had ever seen in my life,” said the married mother of two young girls. “There were magic-marker messages on the front door saying, ‘STAY OUT.’ They had poured paint and other stuff on the carpets. There was a lot of trash. I felt like I was at the scene of a crime. I wouldn’t let my daughters touch anything.”

In Florida, another foreclosure hot spot, vacant homes deteriorate rapidly in the high heat and humidity.

Garbage and food that’s left behind fester. “The properties smell,” said Eve Alexander, an agent in Orlando. “You find maggots. The swimming pools are green. The lawns dry up. They’re eyesores. Neighbors yell at us to water the lawn.”

Often the homes have been stripped bare. “All the kitchen appliances, cabinets and countertops, bathroom fixtures, lights are [stolen],” she said.

Others trash the place before they leave, according to Adele Hrovat, a real estate agent with the Buyer’s Realty of Las Vegas. “They punch holes in the walls, dump oil on the carpets. The banks are so overwhelmed, they haven’t gotten to the point when they send in crews to fix them up,” she said.

Indeed, soaring foreclosures have returned many houses to their lenders, who put them right back on the market – usually as is.

Nationally 18.6% of all homes sold during the three months ended June 30 were foreclosures, compared with just 7% during the same period a year earlier, and 3.1% in 2006, according to the real estate Web site Zillow.com. And that doesn’t include short sales, which is when a home is sold for less than the mortgage balance and the bank forgives the unpaid balance and also account for a lot of sales in many areas.

Just a few years ago in Detroit, only one in a hundred listings were foreclosures or short sales, according to agent David Mills of Homebuyer’s Realty. Now half of the listings are. Some have been badly damaged and suffered huge drops in value.

“A three-year old home that recently sold for $660,000 is listed for $350,000. There’s no kitchen, no master bath. The toilet was taken, the tub, cabinets gone.”

A growing problem

With the number of foreclosed properties projected to keep rising, there seems to be no end in sight to falling prices, according to Texas A&M real estate economist Mark Dotzour. Even though many of these dilapidated homes are actually pretty good bargains, Dotzour isn’t surprised that more people aren’t jumping in. Everyone is reluctant to buy in a declining market.

“Once buyers start to feel confident that prices in a given community have stabilized, they’ll start buying again,” he said.

For that to happen, the natural population increase will have to absorb all the excess housing inventory, until supply and demand are in balance again.

In the meantime, Congress has allocated $4 billion for municipalities to rehab derelict foreclosures in an effort to prevent them from dragging down nearby neighborhoods.

But mostly hitting bottom is just waiting for market events to play out and the construction of new homes drops and remains below below the replacement rate for a while.

“Once that inventory is gone, we’ll be at the market bottom, and the price trajectory will flatten out,” said Dotzour.

Until then, dilapidated homes will continue to aggravate the steep price drops being recorded throughout the nation. 

It’s up to you, but if you have the vision and can see beyond the mess, there are jewels waiting to be polished.

Buying your First Home-It takes more than down payment!

Saving up for a down payment takes discipline and a little sacrifice for First Time Homebuyers. But buying a home takes more than just the down payment. Most First Time Buyers will use FHA financing, so the down payment will be around 3.5% of the purchase price. However, it’s the other costs than can trip you up and make closing a stressful situation, rather than a celebration.

In addition to closing costs (title, escrow and lender fees) you will have what are called non-recurring costs to set up your impound (escrow) account to pay for your property taxes, insurance and mortgage insurance as they come due. Many smart First Time Homebuyers are able to negotiate with the seller to pay all or part of these but here are some other costs you need to be aware of.

Appraisal fee. You often have to pay this fee out of pocket as part of the loan approval process. Depending on your location, the fee can run anywhere from $200 to $1,000.
Professional home inspection. Costs range from $300 to $800 for typical homes, but they can go higher depending on the age and type of structure. More specific inspections, such as those for structural engineering, mold and termites (all FHA loans require a termite inspection but the repairs are a cost generally paid by the seller) are additional costs.
Extra closing costs. Although the good faith estimate from your lender should be reasonably accurate, you won’t know the actual amount you have to bring to closing until a day or two beforehand. Don’t play it too close. You don’t want to hold up closing because you’re $100 short. The money you bring to closing almost always has to be in the form of a cashier’s check or wire transfer, so make arrangements a day ahead of time to take care of this.
Homeowner’s association fees. If you’re buying in a subdivision, you may pay an annual or even monthly fee for upkeep of common areas.
Repairs, upgrades, renovations. Depending on the condition of the home you buy, remember to budget for the work it will take to make it move-in ready.
Moving van rental fees and boxes.
Termination fees for current services.
Carefully check your Internet and cell phone contracts.
Appliances. Whether you’ll have appliances included depends on the deal you strike with the seller. Be aware that brand-new houses usually do not include refrigerators, washers or dryers. If the other kitchen appliances are stainless steel, you’ll need to spend some serious dough to buy a matching fridge or else live with the “eclectic” look.

Utility Deposits- In many parts of the country the local utility departments require a deposit to transfer the services from the seller to you. You should make arrangements for this at least a week prior to your scheduled closing date. Candle light dinners are romantic but not if your dirty and sweaty from moving boxes.
Household items. As a renter, it’s easy to forget that the move to a bigger space means you’ll need more mundane stuff like trash cans, lamps and shower curtains. Are window coverings included? You will need light bulbs and unless it’s a brand new home, batteries for the smoke detectors. Lawn-care equipment. Buying a yard? Your new neighbors will prefer that you mow, rake and edge it.
Warm milk. Just for the first week of whigging out in the middle of the night, wondering if they still have debtors’ prison. (They don’t.)

By the way, always pack the toilet paper on top!

What First Time Home buyers need to know- Divorce and your Credit

As you might have heard we are in a “credit crunch” and the old days of just “fogging the mirror” to get a home loan are gone. Managing your credit is an important aspect of everyone’s life these days.

Even if you are not in the market for a home right now, but think you might some day and are facing the prospect of divorce, then this information is crucial.

1 out of every 2 marriages ends in divorce today! That’s a daunting statistic and one that brings with it an abundance of emotional and financial upheaval for more than half of all married people. It is also a statistic that creates an urgent need for all individuals to become aware of how they can protect their credit standing in the face of a major life change; a change that will surely impact their financial situation.

While a divorce is easy enough to obtain and can be done in a fairly short period of time, the financial and credit issues emanating from the dissolution can linger for years to follow. Confusion or disagreement about who is to pay what bills and who is using specific credit cards can wreak havoc on your credit score. Late pays, no pays and insufficient funds can quickly cause the very best credit scores to plummet–it doesn’t have to be that way. By proactively taking just a few simple steps, individuals who are starting over can ensure that they are doing everything possible to start over with their good credit intact.

Following is an example of a proactive action plan that will help you protect your credit during and after a divorce.
STEP 1: GETTING A CLEAR PICTURE
• Get copies of your credit reports:

Request copies of your credit report from each of the 3 major credit bureaus, Equifax, Experian and Trans Union so you will have full disclosure of your situation.
• Get all of your information into one place:
Make a list of all OPEN accounts and accounts with balances. Then create a spreadsheet with columns for the following information:
? Creditor Name
? Creditor Contact Number (if it’s not listed on the credit report, you can find the customer service number on the back of your statement, or you can always search for it on the internet. Where there’s a will, there’s a way.)
? Account Number (sometimes credit reports do not list the full account number, so you may have to dig up some paperwork, but it will be well worth it.)
? Type of Account (i.e. auto loan, mortgage, credit card)
? Current status of the account (i.e. current, past due, collection, etc.)
? Total amount due
? Monthly Payment Amount
? Vesting of Account (i.e. Joint/Individual/Authorized Signer)
STEP 2: ACTING ON THE INFORMATION

Once you have assembled your information in one place, you can now begin to determine the best course of action for handling the accounts. There are two types of accounts you will be dealing with: secured and unsecured. Both are handled very differently during a divorce. Secured accounts are all accounts that have an asset attached to them, i.e. a mortgage or a car loan. Unsecured accounts are debts with no assets backing them, i.e. credit card accounts. Here are my suggestions:
A. UNSECURED ACCOUNTS-YOUR OPTIONS:
• ELIMINATE OBLIGATIONS WHERE YOU CAN:
A credit card or a statement with your name on it does not make you a joint owner of the account. Unless the account was originally opened with an application SIGNED BY YOU, you may only be an authorized signer and you can request to have your name removed from the account immediately. Or vice versa, if your spouse is on the account as an authorized signer you will want to have his name removed to avoid any future charges. Be aware however, if negative credit was incurred while you were on the account, the past information will still remain.
• CLOSE JOINT ACCOUNTS: If there is no balance on the account, call the creditor and close the account immediately.
• FREEZE ANY FUTURE CHARGES: If there is a balance that cannot be paid off right away, the creditor typically will not allow you to close the account. In this case, call the creditor and request to freeze the account from any future charges. This will allow you to pay off the balance over time without making you vulnerable to more debt. Such an action will stop BOTH spouses from using the account, so it is important that you make certain you have another credit card in your own name before you take that course of action.
• TRANSFER BALANCES TO RESPONSIBLE PARTY’S INDIVIDUAL CARD: Request that the responsible spouse transfer remaining balances on a joint card to another credit card with available credit that is in their name only. Once this is done, CLOSE THE JOINT ACCOUNT IMMEDIATELY.

B. SECURED ACCOUNTS-YOUR OPTIONS:
• SELL IT: This is the safest and best option. You sell the asset, pay off the loan in full, wipe the slate clean and move on.
• REFI IT: If the spouse who has responsibility can qualify for a refinance in their own name, or they have a family member who can assist them with the loan, you can have them buy you out completely and you can walk away without obligation and get your name removed from the account.
• BE CAREFUL: The least desirable option is to keep your name on the loan with certain terms and conditions. This option leaves your credit vulnerable to the responsible spouse’s actions going forward. A late payment or a default on the loan will damage your credit.

SOME IMPORTANT TIPS THAT WILL HELP:
1. MAKE SURE THE BILLS GET PAID-NO MATTER WHAT THE JUDGE SAYS: Regardless of what the divorce decree stipulates, it does not override your account agreements with your creditors. Both spouses are liable and responsible for joint debt regardless of who the judge orders to pay the bill. If the bills are not paid and an account defaults, both spouses can be sued, and both spouses can have their wages garnished. Most late pays occur during the divorce negotiations phase. Don’t allow this happen. One 30 day late can drop your score anywhere from 25-75 points, and it takes months to gain those points back.
2. PROTECT YOURSELF IN JOINT ACCOUNT SITUATIONS: The best way to handle joint accounts is to eliminate such accounts whenever possible. Because joint accounts are approved using the information from both spouses’ credit reports, a creditor will not remove one spouse’s name from an account regardless of the presence of court documents declaring a specific spouse responsible for payment and upkeep.
3. IF YOU DECIDE TO LEAVE YOUR NAME ON A SECURED LOAN ACCOUNT, BE SURE THAT YOUR NAME REMAINS ON THE TITLE: Once your name is removed from the title, you no longer own the asset. This means that if the responsible spouse defaults on the loan, and you have to pay it, you’ll be paying for something that you no longer own.
4. FINALLY, putting the action plan to work as early in the divorce process as possible will ensure your credit will be protected to the greatest extent possible. Decisive, quick action will empower you to move forward.
In Conclusion
Though it may seem challenging at first, you will soon find that putting the above recommendations into action is easily done once you get started. You will also put behind you a crucial first step toward moving on with your life.

Thanks to Linda Ferarri, President of CRC, for this great information.

House Payments cheaper than Rent?

It can happen. With home affordability levels at record highs and interest rates at record lows, many First Time Homebuyers can now have monthly payments less than they are paying for rent.

Impossible? Check this video-

http://www.youtube.com/watch?v=r6J_1kgdsBA

Beat the Bank Owned Property Blues

If you’re a First Time Homebuyer in Southern California and have looked at hundreds of properties (at least it seems that many) that look like the previous owners threw a Rave Party on the way out the door. If you’re tired of competing with 10 to 20 other buyers for those properties so you can pay too much and still have to clean up the mess, then you need to check out this home. It’s in Riverside, California and has just been rehabbed.

http://www.youtube.com/watch?v=WSc_ts2TLIM

The definition of “green home” when it comes to bank owned properties is how much crud has accumulated in the shower, sinks and toilets.

Not in this home. View Today!

The Path to Homeownership - The AHA! Moment

So you’re finally going to do it. You’re going to save for the down payment or have talked with the Bank of Mom and Dad, your credit’s in shape. You’re committed to finding a home you love and are absolutely, positively committed to becoming a homeowner. Well pretty much, maybe?
If you are having doubts about your readiness for homeownership, take heart. It’s natural to go through a period of wondering if you really have what it takes to make the leap from renter to owner. You’ve been talking about it with your relatives and friends. And the latest rent increase notice from your Landlord has you convinced you’re fed up with renting.
If this sounds familiar, rest assured that before they bought their first property, millions of other First Time Homebuyers experienced the same worries and uncertainties that you now face. In fact it’s those doubts and uncertainties that will make you a better homeowner. Why? You appreciate how important  owning your first home is.
When was your AHA moment?
Maybe it was when you got your latest notice of a rent increase. Others might have opted to buy a home when you heard about a great bargain someone else got on a new house. Perhaps it was the $8,000 Federal Income Tax Credit or the availability of special financing and down payment assistance for First Time Homebuyers.
Or maybe it was when you finally realized that if you bought a home years ago you ‘d be a lot better off financially because you might have some equity as opposed to nothing to show for all those rent payments you’ve made.
Hang on to the Moment
Whatever the case, it’s important to hang on to that moment when you made the decision to go for it-or at least explore the possibility of becoming a First Time Homebuyer. Whatever it was that spurred you to act, and to seek out information, let that be your initial motivation to carry you forward.
There’s a reason people talk about getting on “the path” to homeownership. That’s because it’s a process not an event. It’s a journey and the only way you’re going to make it your final destination – when you have a set of keys in your hand and you walk into a home you truly own, with a huge smile on your face – is to go beyond that first thought you had telling you “I should buy a home.”
Once you get beyond thinking about a home, you get into the active phase of preparing yourself for homeownership.

NO MORE TALKING ABOUT IT!

Now you need to take action and sustained action at that. To succeed at buying your first home requires two ingredients: time and committment.
Notice I didn’t say it takes a big down payment, or a college degree, or the world’s best credit.
What it does take, is a committment to “DO IT RIGHT!” If you’re willing to put in the time to make the necessary commitment, anything that you’re lacking-whether it’s money, good credit, or something else-will eventually fall into place. Nothing will prevent you from becoming a homeowner.

(Thanks to Lynnette Khalfani-Cox The Money Coach for the inspiration and some of the material in her book “Your First Home”)

First Time Homebuyers - Your Credit Information is being sold!

Your Credit Information … A Hot Commodity

Your Name is Being Sold – Take Action Now!

Having your credit checked is an important and necessary step in the home buying process. But very few people realize that each time their credit is checked, the “inquiry data” that the credit bureaus (Equifax, TransUnion, Experian) have on file has become a commodity that can be bought and sold. This information is being sold by the bureaus to other lenders…and also to companies that sell and resell the same names and personal information.

That’s right – the Credit Bureaus have found a way to increase their revenues at your expense and without your permission!

These “inquiry leads” include name, address, phone numbers (including unlisted), credit score, current debt history, property information, age, gender and estimated income.  Your privacy is being sold, not just once but over and over again.

Lenders that purchase these leads at a premium will then do everything they can to recoup their investment and turn a hefty profit. Super sneaky bait and switch tactics are being used to lure clients from their reputable lender. Families have even been called by disreputable lenders and told that the lender they had been speaking to previously “passed on” the information to them, because they knew that they would be able to offer much better interest rates.

One of our Families was contacted and told their loan had been declined by us, when in fact they were approved and scheduled to move into their new home the following week.

Just Say “NO”
The consumer credit reporting industry has provided a way to “opt out” and remove your name from their lists. You can contact them by phone at 1-888-567-8688 or online at www.optoutprescreen.com You must opt out at least 48 hours prior to having your credit checked to make sure it is processed in time. You have a five year or lifetime option, but the lifetime option does require a signed form. If a credit report needs to be run prior to the 48 hour waiting period – at least you are aware and informed, and can be on the look-out for suspicious phone calls or mailers from someone who has purchased your information.

Understanding your credit score and preventing identity theft

Ways First Time Homebuyers can prevent identity theft.
In this “credit crunch” world having a good credit score is even more important when you are buying your first home. Maintaing a good credit score is just as important. Here’s some information on your credit score and some steps you can take to maintain it by preventing identity theft.
Why is my credit score different from time to time?

Breakout the sphygmomanometer
I met with a First Time Homebuyer last week and when we took a look at his credit score, we found it was about 50 points lower than six months ago, even though the items on his credit report were all reported the same. Needless to say he was concerned, so I had to break out the ol’ medical book to explain.

Your credit score is like your blood pressure. It will vary up or down depending on a number of factors. If you are applying for a number of credit cards, you’re eating a bunch of Krispy Kremes as far as your credit score is concerned. The Krispy Kremes are guaranteed to raise your blood pressure and the credit inquiries are guaranteed to lower your credit scores.

Conversley, if you are taking care of yourself, eating healthy and getting enough exercise your blood pressure will stay in the healthy range. If you are prudent about your credit use and pay your obligations on time your credit score will remain in the healthy range.

There are three credit bureaus (Experian, Equifax, TransUnion) and they all have slightly different scoring factors, which is why your score may vary a few points among the three. Also, many creditors may not report your account or activity to all the bureaus. In some parts of the country Experian is the primary bureau and local department stores or creditors may only report to them. Same is true of Equifax and TransUnion in other parts of the country.

Mortgage lenders also assign different weight to certain risk factors than would a credit card company for example. For instance, the First Time Homebuyer who is my client is only 22 and has a fairly short credit history, which may not be as important to a credit card company, but to a mortgage lender it might raise concerns about the ability/willingness to pay back a 30 year loan.

Just like your blood pressure, there are a number of factors that can influence your credit score at any given time. I know it’s cool at cocktail parties and/or family gatherings to boast about your “score” but focus on the things that will keep it in the healthy range.

Until they invent a sphygmomanometer (blood pressure monitoring machine) for your credit score, the annual check-up of your free credit report is a good start.
What can I do to maintain a good score?
Maintain healthy credit activities and monitor your score at least once a year. If you are planning on becoming a First Time Homebuyer, start your “exercise regimen” at least six months ahead of time, so you can get down to your “fighting weight” and be ready to go when the time is right to step into the “homebuying ring”.

Your credit score can also be maintained by being diligent about your personal information to avoid identity theft.

Let’s take a look at some relatively simple things you can do, to avoid identity theft. I picked up this information from an attorney who was a victim herself.
Protect your information:
We’ve been hearing that for years, unfortunately the identity thieves are getting better at catching us off guard. I had someone “phishing” for my information through an email letting me know my “pay pal” account was unpaid.

Here are some things to prevent identity theft you may not have thought of:

1.Do not sign the back of your credit cards. Instead, put ‘PHOTO ID REQUIRED.’

2. When paying your credit card bills by check, DO NOT put the complete account number on the ‘For’ line. Instead, just put the last four numbers. The credit card company knows the rest of the number, and anyone who might be handling your check as it passes through all the check processing channels won’t have access to it.
3. Put your work phone # on your checks instead of your home phone. If
you have a PO Box use that instead of your home address. If you do not have a PO Box, use your work address. Never have your SS# printed on your checks. (DUH!) You can add it if it is necessary. But if you have it
printed, anyone can get it.

4. Place the contents of your wallet on a photocopy machine
and copy both sides of each license, credit card, etc. You will know what you had in your wallet and all of the account numbers and phone numbers to call and cancel. Keep the photocopy in a safe place.
I also carry a photocopy of my passport when I travel either here or
abroad. We’ve all heard horror stories about fraud that’s committed on us
in stealing a Name, address, Social Security number, credit card.
Even an attorney can be a victim!
Unfortunately, I, an attorney, have first hand knowledge because my wallet
was stolen last month. Within a week, the thieves ordered an expensive
monthly cell phone package, applied for a VISA credit card, had a credit
line approved to buy a Gateway computer, received a PIN number from DMV to change my driving record information online, and more.
Things you can do to limit the damage
Here’s some critical information to limit the damage in case this
happens to you or someone you know:

5. We have been told we should cancel our credit cards immediately. But
the key is having the toll free numbers and your card numbers handy so
you know whom to call. Keep those where you can find them.

6. File a police report immediately in the jurisdiction where your
credit cards, etc., were stolen. This proves to credit providers you were
diligent, and this is a first step toward an investigation (if there ever is one).

The most important call
But here’s what is perhaps most important of all: (I never even thought
to do this.)

7. Call the 3 national credit reporting organizations immediately to place a fraud alert on your name and also call the Social Security fraud line number. I had never heard of doing that until advised by a bank that called to tell me an application for credit was made over the internet in my name.
The alert means any company that checks your credit knows your information was stolen, and they have to contact you by phone to authorize new credit.

The Important Numbers
Now, here are the numbers you always need to contact about your wallet,
if  it has been stolen:
1.) Equifax: 1-800-525-6285

2.) Experian (formerly TRW): 1-888-397-3742

3.) Trans Union : 1-800-680 7289

4.) Social Security Administration (fraud line): 1-800-269-0271

Pass this information along!
The internet is full of chain letters, cartoons, jokes (some good), recipes etc. We have all passed those along to friends and family, why not something really important?

If you, your friends or family members are concerned about identity theft, pass this along to them. Even if they are not buying a house right now, it’s great information.

Fed drives down mortgage rates - more good news for First Time Homebuyers

The headlines in the business sections of most major newspapers screamed: FED DRIVES DOWN MORTGAGE RATES!
According to the Associated press, mortgage rates tumbled to historic lows Thursday after the Federal Reserve’s decision to print $1.2 trillion and pump into the economy. Even though this normally increases the chances of inflation, the Fed made clear that – for now – it isn’t worried about inflation. It’s more concerned with falling prices, or deflation. This move already has the talking heads predicting lower mortgages rates.
In related news, the Fed announced Wednesday it would by $750 billion in mortgage backed securities and $300 billion in Treasury debt. It will also double its purchases of debt issued by Fannie Mae and Freddie Mac to $200 billion. Now that is good news for mortgage rates but not necessarily what you might think.
The recent deluge of speculation on lower interest rates, has many First Time Homebuyers rethinking their decision in hopes of lower mortgage rates.
My ol’ pappy used to say: “You don’t get nothin’ from sittin’ on the fence ‘cept splinters.”(sounding more like Bret Maverick’s father than mine).
The most important thing you can take from the Fed’s decision, is that the Fed will provide a source of mortgages for the forseeable future or until investors are willing to stick their toes back in the market. Whether rates will go any lower, remains to be seen.
What are other experts saying:
According to the WSJ: Mortgage firms Thursday were quoting rates averaging 4.75% on 30-year fixed-rate mortgages, but in an article today one reporter at the Wall Street Journal thinks this is pretty much the bottom. The Fed has just about exhausted the things it can do to drive them lower – It has lowered lending rates to near zero, bought up Treasuries, and purchased debt by the fistful in a move many economists warn will trigger inflation at the first sign of an economic recovery.
Economists predict Fed Chairman Ben Bernanke and his colleagues will hold the lending rate between zero and 0.25 percent for the rest of this year and for most, if not all, of next year to combat the recession we’ve been in since December 2007.  Of course with a lending rate this low, the Fed is just about powerless in the face of recession, but that’s not stopping them from meeting to talk about it.  The options still remaining are:  1) buying long-term Treasury securities, and 2) boost its purchases of debt issued or guaranteed by mortgage giants Fannie Mae and Freddie Mac.  Both options would help depress mortgage rates.  Hopefully they won’t adopt the latest fad on Wall Street as option number 3 — voting themselves bonuses.
Barry Habib reported on Fox News that the future of interest rates hinges on which mortgages the Fed agrees to purchase. If they focus their efforts on, say 5 or 5.5% rates, then the market will probably settle in that area. “Bottom line – although the media is spinning it differently, this is still not the time for you to stay on the fence, hoping and waiting for lower rates (My pappy also used to say: Hope is not a strategy!) Home loan rates remain within inches of historic lows, but may not move significantly lower based on this purchasing plan-waiting is risky.
The experts have spoken, now it’s my turn.
One thing has held true regarding interest rates since the first money was lent in Ancient Egypt, Interest rates can only do three things:

They can go up!

They can go down!

They can stay the same!
In only one of three scenarios can you get a better interest rate than you can today.
How much of a gambler are you and how long do you want to keep pulling out splinters?

IT’S TOO IMPORTANT…DO IT RIGHT!

Greg Cook
First Time Homebuyers Network
phone: 951-265-4532
fax: 951-699-7813
email: greg@homebuyerhelpnetwork.com
website: www.homebuyerhelpnetwork.com



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Home Prices Down - First Time Homebuyers Benefit

Just how affordable is housing in Riverside County?
Let’s take a look and we’ll use the First Time Homebuyer programs available from the County, to demonstrate what all these numbers really mean.
According to data just released regarding February home sales, not only were home sales up February of 2009, 3420 families became homeowners, that’s a 59.3% increase from 2008. Home prices also dropped 41.5% from $325,000 to $190,000. Let’s not forget that interest rates are at least 1% lower than they were just one year ago.
What does this mean in the real world?
Chad and Melinda were reading this morning’s paper and wondering what all this meant to them. As First Time Homebuyers, they were wondering if now was the right time and whether they could qualify to buy. They had only been married a short time and didn’t have much in the way of savings, but had heard of some County programs that might help them with their down payment. Chad had been working for the gas company for a little more than two years and Melinda was a dental hygenist, who just graduated from tech school. They were renting in Murrieta, paying $1500 a month for a two bedroom 900 square foot apartment.
They scoured the internet everyday after work, searching the hundreds of websites that had thousands of homes for sale, but still they were unsure whether or not they qualified. On the weekends, they looked through the newspaper and visited open houses. They saw lots of homes they liked but didn’t know if they could qualify to buy now.
Sound familiar?
For Chad and Melinda to qualify for the median priced home on an FHA loan with 3.5% down payment (appx.$6650) at 5%, 5.29 APR) fixed rate for 30 years. They would have a monthly payment of about $1385 PITI (less than their current rent). It would take approximately $4500 gross monthly income to qualify (using the new government guidelines of 31%). Not bad, but coming up with the down payment might be a problem.
But, what if they used the funds available under the County NSH Program? If the property is in a qualified area, they could receive up to 20% for down payment. With 20% down the payment would be approximately $1215/mo. That’s $285/mo less than they are paying for rent. To qualify they would only need $3920 gross monthly income.
But they’re young, fairly new on their jobs so it is still a stretch. If Chad and Melinda included the County Mortgage Credit Certificate it would in effect increase their buying power by 15%, so combined gross monthly income of $3340 would be enough for them to become homeowners for the first time.  For more information on the NSHP and MCC visit my website: http://www,homebuyerhelpnetwork.com
It’s hard to imagine, but just last year the median price home would have required gross monthly income of almost $8000/mo to qualify.
Now that’s affordability!

Figures are for demonstration purposes only. FHA loans and Riverside County programs subject to qualification.

IT’S TOO IMPORTANT…DO IT RIGHT!

Greg Cook
First Time Homebuyers Network
phone: 951-265-4532
fax: 951-699-7813
email: greg@homebuyerhelpnetwork.com
website: www.homebuyerhelpnetwork.com

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Buying a Home After Bankruptcy-Chap 7 vs Chap 13

Buying a Home after Bankruptcy
Chapter 7 or Chapter 13
When an individual is forced with the difficult decision to declare bankruptcy, they have two choices: Chapter 7 which eliminates debt and Chapter 13 which is often referred to as a “wage earner plan”.
Guidelines for Chapter 7 Bankruptcy are pretty clear cut when it comes to applying for a home loan some point in the future after the bankruptcy. FHA loans require:
a) at least two years from the date of discharge,
b) the bankruptcy was due to circumstances beyond the borrower’s control
c) Credit would have to be re-established
d) All credit obligations since the discharge date have to have been paid on time (no 30 day lates reported).
Chapter 13 Bankruptcy guidelines are different than Chapter 7 because of the repayment plan. When a Chapter 13 is filed the Bankruptcy Trustee gathers all the information regarding the debts owed by the debtor and works out a payment plan that is within the person’s ability to repay. The required monthly payment is made to the trustee who forwards the money to the creditors. Depending on the debts and the debtor’s ability to repay this plan may last for several years.

Because Chapter 13 Bankruptcy indicates a willingness to accept responsibility for repayment of the debt, FHA will allow qualified borrower’s to get a new FHA loan providing:
a) They are at least half way through the plan
b) All payments have been made on time
c) They have approval from the Trustee
A previous bankruptcy is not a “deal breaker” when it comes to applying for a home loan but there is less wiggle room in certain areas of the qualifying process. Many times the decision of approval or denial on an FHA loan is based on compensating factors. FHA has published guidelines for the various aspects of borrower qualification. Compensating factors involve looking at less tangible considerations to determine loan approval.
Some of these compensating factors are:
a) Having demonstrated an ability to save for the down payment instead of a gift from a family member.
b)Purchasing a home with a payment not too much higher than current rent (avoiding payment shock) would also be a favorable consideration.
c) Job Stability- more than two years with the same employer.

There are other compensating factors that can be used depending on the borrower’s individual circumstances.
FHA loans many times are more art than science and a First Time Homebuyer Specialist can help you paint the best possible picture for the decision maker when the time is right for you to jump back into homeownership.
Whether Chapter 7 or Chapter 13 is the best option for you will be determined by your Attorney and the Bankruptcy Court. Bankruptcy is intended to be a new beginning and a home loan can be in your future if you understand how to “take care of business” during and after the Bankruptcy proceedings.

IT’S TOO IMPORTANT…DO IT RIGHT!

Greg Cook
First Time Homebuyers Network
phone: 951-265-4532
fax: 951-699-7813
email: greg@homebuyerhelpnetwork.com
website: www.homebuyerhelpnetwork.com

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Buying a home after Bankruptcy

Buying a Home after Bankruptcy
In 2008, more than 1.1 million Americans filed for bankruptcy, a 32 percent increase from the year before, according to the Automated Access to Court Electronic Records. As the U.S. attempts to recover from an economic recession, a credit crunch has created a few hiccups as lenders tighten up credit standards for loan applicants across the board.
Bankruptcy doesn’t mean the end of the dream
Filing for bankruptcy is not the financial disaster that sweeps away your credit freedom for the rest of your life. But getting your credit back on solid ground takes diligence and discipline.
Bankruptcy can offer a fresh start to individuals with overwhelming debt who are seeking ways to brighten their financial horizon. But, improving your credit standing, like diminishing your credit standing, happens over a period of time.
While bankruptcy remains on credit reports for years, if you maintain a good credit history after filing for bankruptcy some lenders often times extend credit for auto and home loans 18 to 24 months after a bankruptcy discharge.

For home loans, FHA guidelines require two years with a clean payment history subsequent to the bankruptcy and the establishment of new credit. All credit after a bankruptcy is considered new, so any accounts you don’t include may help you meet this criteria.

The two types of Bankruptcy
For individuals, there are generally two kinds of Bankruptcy.

Under Chapter 7, also referred to as “liquidation bankruptcy,” you pay nothing to unsecured creditors, but may be required to liquidate non-exempt assets (like a house or car worth more than a certain amount).

Note: If you currently own a home and have to declare bankruptcy, the lender will ask the court to “remove” the home from the bankruptcy so they can proceed with foreclosure. In the future a lender will view this as both a bankruptcy and foreclosure. Check out our Free Report on Foreclosure vs Short Sale (www.homebuyerhelpnetwork.com) for more information.

Chapter 13, often called a “wage-earner’s plan,” means you pay back a portion of your debts over a period of time and are not required to liquidate assets. The recent revisions in the bankruptcy laws “essentially” require that if you have a job you will probably be forced to file Chapter 13. Consult with an attorney to determine the option that most applies to your individual situation.
Recovery – The first six months
The most damage to your credit will be immediately after you file, says Candy Wright, group manager of counseling at GreenPath Debt Solutions (www.greenpath.com), a non-profit consumer-counseling service. “If you have accounts that you’re not including, like a mortgage, that will actually help your credit over time if you keep your account current.”

Next, be prepared to spend up to six months awaiting bankruptcy discharge, which releases the debtor from personal liability for some or all of his or her debts. During this time, creditors are notified and given time to respond to your bankruptcy claim. You should not pursue any new credit during this period.

Recovery – 6 months to 1 year
Your credit history won’t clear up immediately — even if you’re current on your bills, it will take several months for your credit to improve on paper.

“After six months to a year, if you’re in good standing, then you will establish a track record of turning yourself around that will be reflected in your score,” says Director of Consumer Education Steve Katz of TrueCredit (www.truecredit.com), a credit monitoring agency. “Keep in mind the impact of bankruptcy is a lot of late payments, and if you have a foreclosure you might still be accountable for that mortgage and those things can linger on for quite awhile.”

If you re-affirm debt, or agree to repay a portion of a debt, the positive effects of repayment will begin to show up on your credit report. If not, rental payments or other types of credit that are reported to credit bureaus may have a positive impact as you re-establish your credit.

Note: Within a few weeks of discharge, request a free copy of your credit report. https://www.annualcreditreport.com/cra/order AnnualCreditReport.com is the ONLY authorized source to get your free annual credit report under federal law.(FTC)

Many creditors are reluctant or just slow in reporting debts that were discharged in bankruptcy.They continue to report any debts as outstanding or still delinquent. This can be a huge drain on your credit score. Any debts that were discharged and still show as unpaid or delinquent are being reported in error. Using the dispute process provided by each of the three credit bureaus (Experian, Equifax,TransUnion) will allow you to get these reported correctly which will “clean up” your report and improve your credit score. You will probably be required to submit a copy of your bankruptcy papers to the bureaus, so make plenty of copies.

Note: When you are ready to apply for a home loan, your lender will ask for a copy of the bankruptcy papers, including schedule of debts and discharge, so keep a copy for them.
As you begin to rebuild your credit, it’s important to track your credit history and remain in good standing.

“It’s kind of like your report card from school, so you want to try to always improve your score,” says Ralph R. Roberts, a bankruptcy and foreclosure expert and creator of www.KeepMyHouse.com. The way to improve: Pay on time, every time.

The First  Year and Beyond

Each year after the first has less of an impact on your credit history. However, bankruptcy will stay on your credit report for 10 years.

For that period of time, any lender viewing your credit report will see an indication that you filed for bankruptcy and may take that into consideration before extending a line of credit.

If you become more financially healthy in the seventh year, for example, it will have less of an impact than the 1st or 3rd year of bankruptcy.
The unedited version of this article can be seen at: http://www.frontdoor.com/Home-Finance/Recovering-From-Bankruptcy/54707
YOU CAN RECOVER!
All health care professionals will tell you that a patient’s attitude and willngness is the key to every successful recovery. The same is true for bankruptcy, your credit and becoming a homeowner.

Your credit requires a lifetime of maintenance, and while bankruptcy is a major roadblock, worry less about a timetable and more about weathering the financial storm by relying less on credit cards and survive by living a debt-free lifestyle.
IT’S TOO IMPORTANT…DO IT RIGHT!

Greg Cook
First Time Homebuyers Network
phone: 951-265-4532
fax: 951-699-7813
email: greg@homebuyerhelpnetwork.com
website: www.homebuyerhelpnetwork.com

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First Time Homebuyer Grants and Down Payment Assistance

FIRST TIME HOME BUYER GRANTS

There is Money Available to Help You!

For many First Time Home Buyers the biggest obstacle between them and their first home is the money required for a down payment. Downpayment requirements can be as little as 3.5% (FHA) to 5% (Conventional)

Thousands of Homeowners each year get assistance from various government agencies and non-profit organizations to help them achieve their piece of the American Dream.

How did they do it?

HOMEWORK!

HUD (The Department of Housing and Urban Development) has a breakdown of some of the “approved” Down Payment Assistance programs available across the country. (http://www.hud.gov/buying/localbuying.cfm)

Before you jump in the car and start looking for your Dream Home, you need to be thorough in your research.

A Certified First Time Home Buyer Specialist can help you wade through the requirements for the programs available in your area.

Below are some common elements of most programs:

  • You usually have to be a First Time Homebuyer (most often defined as not having owned a home in the last three years; some programs only require that you not currently own a home)
  • Very often there will be income limits. This means you cannot earn more than a certain percentage of the HUD median income for your area. Check the website of your local redevelopment agency for the income requirements for your area. The limits are usually linked to family size as well (the larger the family the higher the limit).

  • You will probably be required to complete an approved home buying counseling class. Some require in person attendance, others can be done on-line or over the phone.
  • Some of the programs have a “recapture” clause. These clauses usually require that you maintain the home as your primary residence for a required period or you will have to pay back the down payment assistance amount or a pro-rated portion.

In addition to Federal and/or State assistance, many Counties and Communities have their own programs as part of their redevelopment programs. This information can usually be found on their web sites. If you happen to be in Riverside County, CA it’s www.rivcoeda.org

Complicated? It probably seems that way.

Hard Work? Work?,Yes;

Hard?, not if you are getting help from the right professionals.

It’s important enough to thousands of families each year who have received millions of dollars in assistance.

Is it important enough to you?

It’s Too Important…DO IT RIGHT!

Greg Cook
First Time Homebuyers Network
phone: 951-265-4532
fax: 951-699-7813
email: greg@homebuyerhelpnetwork.com
website: www.homebuyerhelpnetwork.com

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Buying Your Dream Home!

Buying Your First Home

Buy vs Rent – It’s more than a financial investment

Home ownership is the cornerstone of the American Dream and there is no denying it may be the best financial investment you will make.

But, will owning a home meet your lifestyle needs, Now?

What’s your dream lifestyle?

Do you see yourself playing with the kids in the yard on Saturday?

Or are you the type who likes to pack up and head to the beach each weekend?

Would you like to live in a place that’s truly yours or are you happy with the quality of rental units available?

If you decide to become a homeowner for the first time, your house payment may be more than you’re paying for rent. Will you be willing to make the lifestyle sacrifices, so you can afford the additional $100 or $200 per month?

You have probably seen the many Buy vs Rent calculators available on the Internet, and you know what? Financially Buy wins everytime.

Here are some thoughts on when Renting is Better and when Buying is Better.

When Renting is Better

Any real estate professional can give you a number of reasons why it makes sense to buy a house. Just like everything else, IT DEPENDS on who and where YOU are in your life as well as career.

Even though your friends and family may be telling you to settle down and buy a home, there are actually times and circumstances when renting might be a better idea.

Of course as your life, changes so will the answer to the rent vs buy question.

Will you put in the time?

In any investment, there’s no such thing as a sure thing. What usually makes real estate a better risk than most is time. The longer you are prepared to commit to your first home, the more likely your chances of seeing it increase in value.

During the last boom, too many people bought with the expectation they could turn a tidy profit in just a few months or a year. The market changed and their home declined in value (because they bought at the top) and now they are faced with the reality of trying to sell a property before it has appreciated enough to cover the costs and commissions.

Many First Time Home Buyers bought with little or no down payment and now are facing the prospect of paying Real Estate commissions and closings costs out of their own funds. Doesn’t sound pleasant, does it?

Will you like the neighborhood?

The first rule of Real Estate is Location, Location, Location! The good news is in today’s market a First Time Home Buyer has more choices of neighborhoods than even one year ago.

If you are going to be living in a neighborhood for a few years, make sure it fits your wants, needs and goals.

Research suggests you take ample time to get to know the neighborhood before investing your money in a house and a neighborhood.

Many First Time Home Buyers find themselves relocating and because of the potential difference in housing prices, choose the wrong neighborhood because all they see is “I get so much more for my money here than in (pick one – L.A., Chicago, New York, etc).”

A Certified First Time Homebuyer Realtor® specialist will help you find the right neighborhood and provide all the information necessary; i.e. schools, transportation, shopping, etc.

Will you keep all your commitments?

We’re not just talking about financial commitments. When you buy a home, you are entering into a contract to repay the lender for a period of time. If you’re not ready to take on that obligation, think twice.

Make sure you are buying for the right reasons!

Many First Time Home Buyers, spurred on perhaps by the notion of starting a new relationship which will be cemented in their new home are often forced to sell sooner than expected when those relationship plans don’t work out as expected.

Unfortunately, when plans don’t work out, both partners suffer the indignity of try to sell the property before it has had a chance to appreciate or worse staring foreclosure in the face.

Losing money this way does nothing to help an already difficult situation. If you and your partner have any doubts, experts say it’s not the time to make a major investment.

Will you be happy giving up the freedom?

Initially at least, renting is less financial pressure than buying. Paying a first and last deposit doesn’t compare to the chunk of change required for a down payment on a house. Though, in today’s market, with the low down payment loans  and down payment assistance available the difference isn’t as big as it used to be.

Renting gives you the freedom to move around without having to wait for a house to sell. Renting is lower risk, because if you need a new range or microwave, you call the landlord.

Even though rents tend to increase by 3 percent a year, unexpected maintenance costs or property tax hikes aren’t part of your monthly bill.

When Buying is Better

Does shelling out that rent payment each month bug you? Over the course of five or seven years you will pay enough in rent to buy some homes.

Hate the thought of a 30 YEAR mortgage?

Consider this!

The fact is, over the long term, building equity in your own property is far smarter than financing someone else’s. A fixed rate mortgage also locks in your monthly rate so you know that whatever your payment is, at least it will stay the same for thirty years.

Rent, on the other hand, has the nasty habit of increasing every year. If you’re already struggling to meet today’s exorbitant rents in major metropolitan areas, imagine what they’ll be like 10 or 15 years from now. Check out our Free Report about how the Housing Crisis is affecting Renters at http://www,homebuyerhelpnetwork.com

Tax Breaks

Probably the best reason of all to consider buying a house is the tax break. As the tax code is structured now, interest on your home mortgage is tax deductible as are property taxes. With rent, that’s money down the drain.

It’s as though Uncle Sam is actually helping pay for the house you buy. In fact the IRS even has a tool to help you adjust your federal withholding to soften the impact of a higher house payment. You can calculate your federal withholding benefit at www.irs.gov . The recently passed $8000 tax credit, which expires on December 1, 2009 is like receiving a “mail-in” rebate from Uncle Sam.

When it comes time to sell, homeowners can benefit from tax-free profits on the sale of their primary residence, up to $500,000, (if they are married and filing jointly and have occupied the home for two of the last five years, Homeowners who are single or married filing separately, can enjoy tax-free profits up to $250,000.

Three-Bedroom Savings Account

Have you ever wondered why credit card applications and auto loans ask if you rent or own?

In the eyes of the banking community owning a house is considered a major savings asset.

Almost all First Time Home Buyer loan programs require principal and interest payments. A portion of every mortgage payment goes toward the principal, (not a lot in the early years but it gets better over time), so the homeowner is building equity. In addition, historically home values have appreciated at an average of 5% per year. This varies from time to time and especially from market to market.

So, even as your debt to the mortgage company remains constant, what you get when you sell the house doesn’t.

There are many ways to maximize the appreciation in your home, but let’s get you in the right home first.

Generally, buying a home is considered a secure investment because prices usually don’t go down, unless you bought at the top of the market, or next to a nuclear power plant. The longer you put off buying a house, the longer you’ll miss out on appreciation, and the opportunity to build equity instead of wasting money on rent.

How much longer do you want to pay Uncle Sam more than you need to?

Personal Freedom

Aside from the money, owning a home brings freedom to create your own personal space without limits set by a landlord. When you think about it, a rental isn’t really your home, it’s someone else’s on loan and they probably won’t agree that the bathroom looks cool painted deep purple. Nor is a landlord likely to pay for such personal touches and why should you if you’re only renting? Take in an episode of House Hunters on HGTV and witness the transformation you see when a First Time Home Buyer get’s to express their individuality in their new home.

Thanks to Audrey Arkins, Salary.com contributor

To contact a first time home buyer specialist

GOOGLE ME

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First Time Homebuyers the real winners in the housing plan!

The dust has settled on the Obama housing stabilization plan.

We have a better idea of who will and won’t be helped by the new programs.
Clear cut winners have emerged. These winners will reap a number benefits, some tangible some intangible.
These winners come from many socio-economic backgrounds, they are from all ethnic groups, they include men, women and their families. In short it doesn’t get more politically correct than this.
AND THE WINNERS ARE: First Time Homebuyers!
Let’s take a look at all the ways First Time Homebuyers win.
The most tangible is the $8000 federal income tax credit. It’s “free money” and does not have to be repaid as long as the homebuyer remains in the home for three years. This tax credit is only good until December 1, 2009. On our website: www.homebuyerhelpnetwork.com you will find the story of a young couple who became First Time Home Buyers and will be getting their $8000 in a few weeks.
Let’s not forget the ongoing income tax deduction for mortgage interest and property taxes. This reduces the amount you have to pay the IRS each year, which is like getting a raise in pay. (Always consult your tax professional to determine your potential tax benefit)
Economic recovery depends significantly on the housing market and many parts of the country have thousands of homes sitting vacant and thousands more on the verge of becoming vacant. In order to incent First Time Homebuyers, many cities, counties and states have rolled out down payment assistance programs, state tax credits, etc. A First Time Homebuyer Specialist in your area will know all these programs.
In our story at www.homebuyerhelpnetwork.com you’ll learn how a young California couple wrapped a number of incentives together and were able to buy a lot more home than they ever imagined.
Even though the housing plan is designed to stop the “tsunami” of foreclosures many housing markets across the country have thousands of properties that must be sold before there will be any stabilization. This glut of housing has prices to drop month after month, creating an affordability bonaza for First Time Homebuyers. Factor in the historical low interest rates and many First Time Homebuyers will have mortgage payments lower than rent. (Check out our Free Report on how the Housing Crisis is affecting Renters at (www.homebuyerhelpnetwork.com).
Many First Time Homebuyers aren’t aware how much the loan modification portion of the housing plan will work to their benefit.
If your market is dominated by bank owned properties, I’m sure you cringe at the condition of these houses and wonder how things could have gotten this bad. Well, more choices are on the way!
Many current homeowners will be offered loan modifications to help them keep their homes, the estimate is 9 million. If it helps that many people, wonderful. I don’t think it will be that many. First qualification for the “loan mod” is they be no more than 5% “upside down”. In many markets, particularly foreclosure alley (California, Florida, Arizona, Nevada) most homeowners are 50% upside down. So instead of a loan modification these troubled homeowners are probably looking at a short sale as their last method to save their credit. In the last three months more than 1.5 million people have lost their jobs and many of these people own homes and won’t qualify for the loan modification because their debt ratios will be signifcantly more than the government programs allow.
In short, there will be more houses to choose from, many in better condition than the bank owned properties because the homeowners are still living in them and to save their credit it benefits them to maintain the condition of the house so it will sell quickly.
Additionally, banks who receive TARP funds are required to work out loan modifications and short sales with distressed homeowners as a condition of receipt of additional funds.
In the past short sales have been difficult transactions, but we should start seeing a change in lender’s handling of these and taking offers that are more in line with actual values than their perception of the home’s worth.
The housing stabilization program was designed to be a “win-win” for everyone but the big WIN is for First Time Homebuyers.

Greg Cook
First Time Homebuyers Network
phone: 951-265-4532
fax: 951-699-7813
email: greg@homebuyerhelpnetwork.com
website: www.homebuyerhelpnetwork.com

IT’S TOO IMPORTANT…DO IT RIGHT!

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Renters can't escape the housing crisis

Renters can’t Escape the Housing Crisis
The most brutal real estate slump in decades is reverberating through the rental market. Renters in properties that are being foreclosed on are being evicted. Homeowners forced into foreclosure are becoming tenants again and driving up rents.
It’s the law of Supply and Demand
Even as real estate is sputtering, the rental market is surging.
Rents, in fact, are accelerating in many markets across the USA. Vacancy rates are down from last year, and average rent is projected to rise 5.3% in 2008, up from a 3.1% increase in 2007, according to the National Association of Realtors. In some cities, rents are climbing at a double-digit clip.

In San Francisco, the median rent rose 14.6%, to $1,810 a month in the first quarter this year compared with a year earlier, according to an analysis by Newton, Mass.-based Investment Instruments. The median rent in Seattle rose 10.3%, to $1,211, in the same period. In Washington, D.C., the median rent rose nearly 5%, to $1,687.

In Riverside County, California there were more than 57,000 trustees sales in 2008. That means that 57,000 families had to find a new place to live, most preferring to do so in the same neighborhoods so they didn’t have to uproot their kids from school and friends. Interestingly enough with the increased demand for rental units, the occupancy rate on apartments fell to 92% in 2008, indicating these displaced families are overwhelmingly seeking out single family residences instead of apartments.
High demand, rising rents!
The health of the rental market is critical for several reasons. Rising demand for rentals can spur construction of apartment buildings, a trend that’s already occurring in some metro markets. And the need for more rental properties can energize urban development, because higher commuting costs have translated into growing demand for rentals that are near urban employment centers rather than in outlying suburbs.
“In some areas, because the demand for rentals is happening closer to cities and job markets, there will ultimately be demand for new construction,” says Peter Chinloy, a real estate professor at American University’s Kogod School of Business. “As rents keep rising, there is more demand, although it also means it’s harder to find rental units.”
Escalating demand also means steeper rents. The median asking rate for rentals has jumped 14%, from $591 a month during the fourth quarter of 2003 to $673 a month in 2007, according to the Census Bureau. The national vacancy rate for rental housing was 9.6% in the fourth quarter of 2007, down from 10.2% in the fourth quarter of 2003.
Several factors are driving up demand for rentals:
•Renters are waiting for home prices to drop. As they watch real estate prices slide, many renters have decided to wait longer to buy because they think prices have yet to hit bottom. Kevin Merrett, 23, of Fullerton, Calif., has adopted a stance of waiting and continuing to rent while keeping his eyes on the housing market.
“As a renter, it doesn’t make sense to buy right now,” says Merrett, who handles land acquisitions for an apartment developer. “I can easily survive on my low rent. And I’ve been closely watching the shifts of the real estate market. I’ll continue to wait for the prices to come down enough so that even if the market continues to soften, it will not put me in financial trouble” after a home sale.

Does it make sense to wait? MAYBE!

If you have concerns about your job, it definitely does. We don’t want you to become another statistic. But, if you’ve decided, for all the right reasons, that you’re ready to jump in, then getting the lowest price is only a small consideration. Even Warren Buffett admits he doesn’t know when a stock reaches its lowest point but he buys when he considers it a bargain price.

Homes are definitely at bargain prices (see our Free Report on Rent Ratio). In many areas of the country, falling home prices and record low interest rates allow many First Time Homebuyers to have a monthly payments competitive and sometimes lower than the rent they would pay for the same house.

MORE IMPORTANTLY, it’s time start thinking about our home as more than  just an investment.

It’s ours, we can paint the family room purple so we can feel like rock stars when we play “Guitar Hero” and it’s still ours. We can transform the 80s style kitchen to what we want with granite counters, stainless steel appliances and even a wine cooler IF WE WANT TO!

A home is where memories, both good and bad, are made, it’s not just an investment whose sole value is the low price we paid!
Renter Beware!
The withering housing market is also extracting an emotional toll, forcing renters out of their homes as landlords go into foreclosure. No hard data exist on how many homeowners who lose homes to foreclosure are becoming renters.

But 18% of foreclosures started in the third quarter of 2007 involved non-owner-occupied homes, according to a study by the Mortgage Bankers Association — a sign that tenants are hardly immune to the housing meltdown.
10 days to move out
Tammy Dayton, 46, of Lewisville, Texas, who works in outside sales, had rented a 2,700-square-foot home for about two years.
One day, a sheriff’s deputy came to the door, telling her she’d need to leave because the mortgage wasn’t being paid. Once the deputy realized she was a renter and not the owner, she was given 10 days to move out. “I was totally in a bind,” Dayton says. “I didn’t know what was going on, and I needed to find another arrangement.”
In December, she packed her belongings. Along with her Dalmatian, Target, and black Lab, Samson, she moved into a new home to rent. But Dayton says she hasn’t received her rental deposit back.
“I”I was confused and dumbfounded,” she says. “I’d paid my rent month to month. I learned to always be prepared for the unexpected. And this time, I checked out the new place first to be sure it wasn’t in default.” (USA Today, April 22, 2008)

In the last housing boom, many homeowners also became landlords. They were banking on the appreciation of two houses to create their wealth. Most had never been landlords before and as soon as there was a vacancy or some repairs required they didn’t have the resources to carry them through and as a result many just quit making their payments, putting their tenants in jeopardy.

If you’re renting and you think there might be a chance your landlord is in default on his mortgage payments, contact the Customer Service department at a local Title Company and ask them if a Notice of Default has been filed on your property address (it’s public record and there shouldn’t be a charge for the service). A prospective renter would be wise to do the same, once you hand over the deposit if your landlord quits making the payments that money is as good as gone.
What now Kevin?
Remember Kevin, who was mentioned in the USA Today article? Kevin, like many of you is waiting for “the market to bottom out”, whenever that is.

What is Kevin losing by not becoming a First Time Homebuyer? Even if we disregard the substantial income tax deduction he would get each year for the interest and property taxes he paid, he’s risking not getting the $8000 income tax credit recently passed as part of the housing stimulation package (Check out our Free Report for details), which ends on December 1,2009.

Many state, county or city agencies have down payment assistance programs for First Time Homebuyers. These funds are limited and available on a First Come, First Served Basis. The longer Kevin waits, the less chance he has for this help for first time homebuyers.

If you feel the time is right for you, get past the “lowest price” mentality and think about everything that can be yours, both emotional and monetarily.

Greg Cook
First Time Homebuyers Network
phone: 951-265-4532
fax: 951-699-7813
email: greg@homebuyerhelpnetwork.com
website: www.homebuyerhelpnetwork.com

IT’S TOO IMPORTANT…DO IT RIGHT!

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Some of the information from USA TODAY article April 22, 2008

First Time Home buyers are really the winners!

The Obama foreclosure mitigation store is open for business and when the dust settles the big winners will be First Time Home buyers.

Sure the plan was designed to help homeowners avoid foreclosure, in fact the number has been estimated at 9 million. I feel that might be a tad optimistic because almost all the homeowners in the states most affected by the “mortgage meltdown” (California, Florida, Arizona, Nevada) are upside down more than 5% so they would not be eligible or refinancing under the new program. The borrowers who received NINJA loans (no income, no job or assets) the s0-called “liar loans” will now have to prove their income (which they couldn’t do before), so they’re also won’t qualify.

So, why are First Time Homebuyers the winners? First, because you and investors are the only buyers out there, so you get the pick of the inventory (and we know most investors are “bottom feeders” who will only offer on the very lowest price homes). Now the inventory from which you will choose is only going to grow as more families are facing foreclosure.

An industry survey shows a record 5.4 million American homeowners with a mortgage, or nearly 12 percent, were either behind on their payments or in foreclosure at the end of last year.

The Mortgage Bankers Association said Thursday the percentage of loans at least a month overdue or in foreclosure was up from 10 percent in the July-September quarter and up from about 8 percent a year earlier.

The sharpest increases in loans 90-days past due were in Louisiana, New York, Georgia, Texas and Mississippi, reflecting a spreading recession and massive job losses nationwide.

Lenders will receive incentives for negotiating loan modifications and short sales. So if you’ve grown tired of shopping in the foreclosed aisle, take a look a couple aisles over at the pre-foreclosure or “short sale” homes there will be plenty to choose from and will generally be in better condition than an REO.

Many homeowners were counting on the bankruptcy courts to “cram down” their mortgages to help them keep their homes. In order to qualify for the “cram down” the homeowner has to first prove they made a good faith effort to do a loan modification and/or a “short sale”

If you’re working with a First Time Buyer Specialist who knows “short sales”, they will be able to find those deals that are priced as well if not better than REOs.

But wait, don’t forget your coupons! If you are a First Time Homebuyer the government has an $8000 “mail-in rebate” waiting for you in the form of the recently awarded Federal Income Tax Credit. Many other states are offering similar “coupons” in the form of incentives to First Time Homebuyers and your FTHB specialist will know all the incentives available to you.

If you’re not working with a First Time Homebuyer Specialist, let us know and we will find one in your area to help you.

Riverside County announces another program to help First Time Homebuyers

The Riverside County Economic Development Agency(EDA) announced the roll-out of the Mortgage Credit Certificate (MCC) to help First Time Homebuyers
What is MCC and how does it work?
A Mortgage Credit Certificate (MCC) entitles qualified home buyers to reduce the amount of their federal income tax liability by an amount equal to a portion of the interest paid during the year on a home mortgage. This tax credit allows the buyer to qualify more easily for a loan by increasing the effective income of the buyer.

The Riverside County MCC Program provides for a fifteen percent (15%) rate which can be applied to the interest paid on the mortgage loan. The borrower can claim a tax credit equal to 15% of the interest paid during the year. Since the borrowers taxes are being reduced by the amount of the credit, this increases the take-home pay by the amount of the credit. The buyer takes the remaining 85% interest as a deduction. When underwriting the loan, a lender takes this into consideration and the borrower is able to qualify for a larger loan than would otherwise be possible.
In English please!


The following table illustrates how a MCC increases a borrower’s “effective home buying power”:

Effective Home Buying Power With and Without an MCC

Without MCC                                             With MCC

Mortgage Amount        $200,000                                               $200,000

Interest Rate                          5.5%                                                            5.5%

Monthly Payment (P&I) $1137.58                                              $1137.58

MCC Rate                                   N/A                                                           15%

Monthly Credit Amount     N/A                                                     $137.50

Effective Monthly Payment $1137.58                                      $1000.08

Monthly Income needed       $4062.79 $3571.71

Income Needed is based on monthly Principal and Interest (P&I) not exceeding 28% of monthly income.

Tax Credit vs. Tax Deduction
A “tax credit” entitles a tax payer to subtract the amount of credit from their total federal tax bill whereas a “tax deduction” is subtracted from adjusted gross income before federal income taxes are computed.
Consult with your tax professional to determine your benefit from the MCC program
Time Period of the Mortgage Credit Certificate
The MCC is in effect for the life of the loan as long as the home remains the borrower’s principal residence. The MCC is not transferable to a new loan when refinancing, nor can it be assigned or transferred to a new buyer or another home. In addition, the MCC Program includes a nine year recapture provision which provides for a return of tax credits taken if the property ceases to be the borrower’s primary residence within nine years from the close of escrow.

For more details on the recapture provision visit the EDA website: www.rivcoeda.org
Loan Terms
The loan terms depend on the Lender and type of loan you use.  Depending on the mortgage marketplace and the borrower requirements, each Lender can set its own interest rate, length of mortgage term, down payment requirement, fees, points, closing costs and other loan terms.  MCC’s may be used with conventional, fixed, 15-year, 30-year, or 40-year term loans, including FHA, VA, FNMA, FHLMC and privately insured loans.

Lender must be approved by the County of Riverside to participate in the MCC program
Application Fee to receive a MCC
The maximum total fee for a MCC is $400.  Of this, the County collects a $300 Non-Refundable application fee which may be paid by any person (buyer, seller, lender, etc.).  In addition, Participating Lenders may charge up to $100 for their processing of the MCC.  Therefore, the total maximum charge in association with the MCC is $400.  This is separate from the other fees associated with purchasing a home, such as escrow fees, loan origination and processing fees and closing costs.  Your lender can provide you with a breakdown of the total fees associated with obtaining a mortgage loan.

Not just for First Time Homebuyers
You don’t have to be a First Time Homebuyer to use the MCC program if you are purchasing a home in one of the designated “target areas”

For the target areas visit the EDA website: www.rivcoeda.org

If you have been scouring the market only to discover that the homes you really like are just out of your reach, then the MCC program is made for you.

Funds under the MCC program are limited, so if you’re ready to take the plunge…

The MCC can be used in conjunction with the Riverside County Down Payment Assistance Programs and the Federal Income Tax Credit of $8000.

THE GOVERNMENT IS THROWING MONEY AT YOU! WHAT ARE YOU WAITING FOR?

If you’re not already working with a Realtor, contact us and we will refer you to a First Time Homebuyer specialist who is familiar with all the programs available to you.

Riverside County has $48 million and they want First Time Homebuyers to help them spend it!

Riverside County (CA) Economic Development Agency (EDA) in partnership with the Department of Housing and Urban Development (HUD) has announced a new down payment assistance program for First time Homebuyers. The EDA will receive $48 million to help stabilizes county neighborhoods that have been decimated by the number of foreclosures.

Using the funds available from this program, the county has available the funds to provide down payment assistance of up to 20% for qualified First Time Home Buyers seeking financing through select approved lenders.

So how does it work?

  • Home must be a foreclosed home in a foreclsoure target area of Riverside County. For target areas go to EDA website: www.rivcoeda.org
  • Home must be vacant for 90 days
  • Qualified First time Homebuyers can receive up to 20% of the purchase price of the home toward downpayment assistance.
  • Purchase Price must be 15% below the appraised value. (EDA will provide appraisal).
  • Repair component can be added to financing with a maximum of $75,000 for down payment assistance, appraisal cost and repairs.
  • Down Payment Assistance would be a “silent” second mortgage with no payments or interest due unless the property is sold within affordability period. (See EDA website for details on recapture).
  • Repair component would be in the form of a “silent” third mortgage that would be added recorded after closing and repairs completed.
  • Maximum Purchase Price cannot exceed $292,686

Who is eligible?

  • Must be a First Time Homebuyer (have not owned a home within the last 3 years.
  • Must meet Moderate Income guidelines based on Family size:
    1 Person        2 Person     3 Person     4 Person

$55,950         $63,950        $71,950       $79,900

5 Person        6 Person     7 Person     8 Person

$86,300           $92,700       $99,100      $105,500

  • Total income is calculated based on all persons who will reside in the home.
  • Homebuyer must qualify for 1st Mortgage financing with lender approved by EDA.

The Repair Component

To stabilize the affected neighborhoods EDA and HUD have allocated a repair component to be used, if necessary, to repair or improve the exterior of the home along with any energy efficiency improvements that the homebuyer may desire.

  • Interior improvements are allowed but the home must be habitable at closing.
  • Representatives from EDA’s rehabilitation department will work with the homebuyer and contractor to determine the eligibility and costs of the requested repairs.
  • Any repairs that have to be completed before closing to meet the lender or EDA guidelines must be paid for by the seller (bank) as a condition of down payment assistance.
  • Repair component is not necessary to qualify for Down Payment Assistance.

What Next?

If you are a First Time Homebuyer in Riverside County, your next step should be to contact an approved lender to begin the pre-approval process. Contact: gregc@themortgageguild.com to be begin the pre-approval process.

Once you have started the pre-approval, you and your Realtor should meet with your approved lender and discuss the strategies necessary to be successful. If you need a referral to a First Time Homebuyer specialist, contact us, and we will refer you.

As with all government down payment assistance programs, “the devil is in the details” and not following a defined game plan will probably result in a unsuccessful attempt to buy your first home.


5 Ways a First Time Homebuyer can Raise Their Credit Score-FAST!

A good Credit Score and owning your first home go hand-in-hand. You might have heard there is a “credit crunch” going on. You don’t need perfect credit, but you should use every opportunity to “optimize” your credit score. The bar has been raised on almost loan programs, especially those with little or no down payment.

Don’t wait until you are house hunting to start trying to fix your credit. You wouldn’t try to fix your car for a long vacation while you were on the freeway going 80 miles per hour, would you?

If you are ready to take the plunge and buy your first home and you are looking to improve your credit score quickly, now is the time to get started.

Here are some great strategies you can utilize right away to give your score a little boost.

Create Some Balance: While paying down installment debt (car, school etc) will definitely boost your credit score, paying off revolving debt, such as credit cards will give you more “bang for your buck”. The trick is to get and keep your balances below 30% of your credit limit on each card. For faster results, attack those cards with balances closer to their respective credit limits first, as opposed to those cards with simply the highest debt. Remember if you pay off any credit cards completely: Do not close your accounts without discussing with your First Time Home Buyer Specialist. Canceling those cards may inadvertently undo all of your hard work and could lower your score!

Know Your Limits: Make sure that your credit card issuers are reporting the correct limits on your accounts to the major credit bureaus. Without an available limit, your account will appear to be maxed out at its highest reported balance each month. This could cost you up to 80 points in certain instances. Some creditors, such as American Express and certain cards issued by Capital One actually have a policy of not reporting available credit. However, most companies will report your credit limits if you ask them in writing.

Take Some Credit: If you have a credit card account in very good standing, make sure all three credit bureaus know about it. Just like your credit limits, some creditors don’t report your information to all three credit companies-this is why credit scores can vary between bureaus. If this is the case, give them a call to find out why. Correcting this oversight could provide a significant boost to your score. Also, if you’re in very good standing, ask your creditor for a lower rate or higher credit limit. This will increase the gab in thedebt you owe versus the credit you have available. Sometimes hinting about closing an account can suddenly bring out the generous spirit of certain card issuers. Give it a try! The worst they can say is no.

Protect Your Interests: Your credit score is calculated solely on the information provided by your creditors. If they are misreporting, your credit score will suffer because of it. If you have past credit problems, like a bankruptcy, make sure all items associated with the bankruptcy are being reported correctly, that is with zero balance. This action could increase your score by 50-100 points. I had a customer who immediately after discharge of his bankrptcy, sent a copy of the bankruptcy papers to the bureaus and within six months had a credit score just less than 700. Simple mistakes or errors in reporting canwreak havoc on the credit score of someone looking to own their first home, it’s important to make sure all accounts are reported correctly.

Even the Score: If you find information on your credit report that you believe is inaccurate or incomplete, then you havethe right to dispute free of charge. For the fastest results, visit the appropriate credit bureau’s website and file a complaint online. If supporting documents are necessary, you have to file your dispute by mail.

Working directly with the creditor can be very frustrating because they don’t have any motivation to correct the mistake. They have to respond to the bureaus, so let the bureaus do the work for you.

Buying your first home can be a wonderful experience or a horrific memory. Take some time, make sure your credit is in order before you begin the journey to homeownership, it will make for an enjoyable journey.

Greg Cook

First Time Homebuyers Network

http://firsttimehomebuyersnetwork.com

 

Phone: 951-265-4532

Fax: 951-699-7813

IT’S TOO IMPORTANT…DO IT RIGHT!

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First Time Home Buyers - We thought it was a buyer's market?

Turn this...

Turn this...

INTO THIS!

INTO THIS!

Shawn and Jill were finally going to realize their dream of being homeowners for the first time.
Even with their concerns about the economy, both felt their jobs were safe and they knew homes would probably not be this affordable for a long time.
Most importantly, they wanted the best for their three children. Their current three bedroom rental home was nice, but the kids were getting too old to continue sharing a bedroom, plus Jill needed an office for her work as a medical transcriber.
The kids were very happy with their school and Shawn and Jill figured it wouldn’t be too hard to find a 4 or 5 bedroom home in the same neighborhood. Every week they would see more For Sale signs appear with advertisements of “bank owned”, “repo” or “foreclsoure”.
They had saved a little money for down payment and Shawn’s parents had agreed to help them out if they needed it. Every day they searched the internet for a home in their target neighborhood and finally their diligence was rewarded. They found a nice five bedroom home with a big yard at an affordable price. They immediately called Jane’s friend Kellie, their Real Estate Agent to see the house.
Within an hour they all met at the property. Shawn and Jill did not want this opportunity to slip through their fingers.
When they pulled up to the property they passed another couple on their way out.  As they walked through the house, they noticed little things that needed to be repaired or replaced, but at this price they could easily afford to make those repairs. The new carpet and hardwood floors would have to wait. The floor plan and five bedrooms were what they needed and the home was walking to distance to the kid’s school. This house had everything and they immediately returned to Kellie’s office to make their offer.
Later that day, their Real Estate Agent called and informed Shawn and Jill there were eight other offers on their home and five were for a higher price than theirs. Needless to say, they were heartbroken, but as their agent explained, “it’s very competitive out there and you may have to make seven or eight offers before you are the winning bidder.”

or this...

or this...

INTO THIS!

INTO THIS!

 

One Sunday morning as they were taking the kids and the dog for a walk, they came across a house that had seen better days. The weeds in the back yard were waist high and through the windows they could see holes in the wall, the appliances had been taken, and the flooring was destroyed. But it was the same floor plan as the previous home.
They called their agent who told them the house didn’t qualify for FHA financing in it’s current condition and that’s why the list price was so low. Shawn and Jill knew there was no way they could come up with the money to do all the needed repairs.
Not one to take NO for an answer, Shawn went to the HUD website (www.hud.gov) and learned about an FHA loan program that would not only lend them the money to buy the home but include the funds necessary to make the house “as good as new”.

Woud you rather cook here?...

Woud you rather cook here?...

OR HERE?

OR HERE?

Shawn immediately called Kellie, who referred him to a Mortgage Broker who knew the FHA 203k Rehabilitation Loan Program. Shawn, Jill and Kellie met with the lender, he explained how the program worked and gave them a “mind map” on how to use this loan program to buy the house no one else seemed to want.
Well, it’s been three months and Shawn, Jill and the family are in their new home. It has stainless steel appliances, new carpet and laminate flooring, the holes in the wall have been repaired and the house has been painted throughout and the family couldn’t be happier.They were able to buy the home for substantially less than the other homes in the neighborhood and even with the repairs have a lower payment than they would have had competing with all the other homebuyers.

Enjoy family time here?

Enjoy family time here?

OR HERE?

OR HERE?

For more information on the FHA 203k Rehabilitation Loan Program go to www.hud.gov or contact us: greg@homebuyerhelpnetwork.com

 

First Time Buyers: Uncle Sam wants You!

Most of this information came from HGTV’s www.Frontdoor.com. A great resource, by the way for information on all aspects of today’s housing market.

Uncle Sam is not looking to build up a fine real estate portfolio. Nor is he interested in flipping properties like hotcakes.

Nevertheless, the U.S. government is taking ownership of a growing number of foreclosed properties that secured government-guaranteed loans gone bad.
What does it mean to you?
All this translates into potential opportunities for real estate investors and bargain homebuyers, who can mine government-owned foreclosures to find discounted property. But there are also some obstacles to purchasing property from the government, and prospective buyers should be aware of these potential pitfalls before they make any offers to Uncle Sam.

Many government foreclosures can be bought at bargain prices because the government is motivated to sell and get someone back in the home. In addition, the government entity selling the property may be willing to pick up some of the closing costs, a practice that is not common for bank-owned foreclosure purchases. (Most bank owned properties will pay closing costs but because you are in competition with so many other First Time Homebuyers you may have to increase your offering price to be competitive.)

According to Andrew J. Waite, publisher of Personal Real Estate Investor magazine, the biggest obstacle for investors looking to purchase government-owned real estate is that all the best properties get scooped up by professionals specializing in that marketplace long before the rest of the investor community gets to pick through the leftovers. Another obstacle for real estate investors is that the federal government’s goal is to promote the American Dream of  homeownership by owner-occupants. While some government agencies are more than willing to work with anyone who wants to help them get the real estate off their books, others put up hurdles to investors in particular and will only sell to them as a last resort if no one else qualifies to buy a particular home.(Mr Waite leaves unsaid is that owner occupants tend to pay a higher price than investors who, most of the time are working off a pre-determined ROI-return on investment)

HUD HOMES

In the 1990′s we were in a similar market and HUD Homes accounted for most of the inventory of foreclosed properties. As a result, HUD has a lot more experience than most banks in moving these properties. You may see more homes fall under this umbrella as the Federal Government seizes more of these properties and will need a conduit to move them off the books.

The U.S. Department of Housing and Urban Development (HUD) is a prime example of the federal government owning homes it doesn’t want. Under the auspices of HUD, the FHA insures loans used to originally finance the purchase of property. If a borrower defaults on one of these loans, the government has to make good on its promise and may end up taking ownership of the property.

When a borrower does default on an FHA-insured loan, HUD steps in, pays off the originating mortgage holder and then takes back the property. Thus, the federal government is now a reluctant property owner who wants to dispose of that property as quickly as possible. Interested buyers must submit a bid through a HUD-approved real estate agent or broker during the listing period. (If you need help finding a HUD approved broker in your area, contact us)

Listing prices are set through an independent appraisal. During the listing period (which lasts 10 days) HUD reviews the submitted bids and accepts the highest realistic bid.

HUD, as a Cabinet-level agency of the federal government, has a mandate to promote home ownership in this country.Thus, the agency is obliged to look at bids from prospective owner-occupiers first. If none of them work out, then HUD will entertain bids from the public at large, including investors. (Many of HUD’s homes are offered with special financing, including $100 down payments, a HUD approved Real Estate agent or broker can help you find those homes).

Go to the agency’s website at www.hud.gov to get more details on purchasing HUD homes.

Veterans Administration Homes

VA homes account for a much smaller percentage of the market than do HUD homes and as a result don’t always get the attention of their larger “cousin”.HUD Homes.

Like HUD, the U.S. Department of Veterans Affairs (VA) is not a lender but an insurer of loans made by other lenders against defaulting borrowers. The difference here is while borrowers under the FHA program must meet certain income and other criteria to qualify, under the VA loan program the original borrower must be a veteran.

If the original veteran borrower defaults on the loan anyone can purchase a VA home and possibly even assume the existing loan, even if he or she is not a veteran.

Look for special financing for both veterans and nonveterans looking to purchase a VA foreclosure. Known as the VA Vendee Financing Program, the benefits include:

No down payment for owner occupants;
5 percent down payments for nonowner occupants (investors);
No appraisal fees;
Competitive fixed rate mortgages.

Fannie Mae and Freddie Mac Homes
Fannie and Freddie want you to buy their homes

Until the last 18 months most folks thought Fannie and Freddie were a comic strip or sitcom characters (weren’t they regulars on I Love Lucy?)
The Federal National Mortgage Association (better known as Fannie Mae) and the Federal Home Mortgage Corp. (Freddie Mac) are the two shareholder-owned Government Sponsored Enterprises (GSEs) that are now under government conservatorship, but are not government agencies like HUD and the VA.

Both Fannie Mae and Freddie Mac buy mortgages from lenders, securitize them, and then sell them on the secondary mortgage market. This is turn provides a constant source of mortgage capital to member lenders who then fund more home loans to sell to the GSEs.

Fannie Mae and Freddie Mac are primarily in the mortgage business, not the home owning business. That said, when the mortgages they buy from lenders go bad, the enterprises have no choice but to foreclose on the defaulting homeowner. Thus, both Fannie Mae and Freddie Mac have homes to sell.

Since they are not government agencies, however, Freddie Mac and Fannie Mae have shareholders to answer to the same as any other corporation when it comes to dealing with the sale of assets (in this case real property). The primary goal is to get the foreclosed properties off of their books. (Look for special financing offers on some properties)

Go boldly where few have gone before you!
Most home buyers (First Time, seasoned and even investors) are mostly chasing bank owned properties, while thousands of government homes are waiting for new owners.

Make sure your real estate agent or broker is familiar with all types of foreclosures and that you are seeing the best properties that meet your wants and needs.

IT’S TOO IMPORTANT…DO IT RIGHT!

Greg Cook

First Time Home Buyers Network

www.homebuyerhelpnetwork.com

951-265-4532 (mobile office)

951-699-7813 (Fax)

greg@homebuyerhelpnetwork.com

It’s Too Important…DO IT RIGHT!

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Down Payment Assistance for First Time Homebuyers

First Time Homebuyers in Riverside County, Ca still have funds available for Down Payment Assistance, the County announced today

The program is the Redevelopment Homeownership Program (RHP) -  Moderate Income Program
a. Available only in the unincorporated areas of Riverside County (per Thomas Guide)
b. Must be a First Time Homebuyer (not owned a home within last 3 years) – no exceptions
c. 20% of the purchase price of the home towards down payment assistance (max dollar amount is $75,000) – silent second -  no payment, no interest
d. Max purchase price is $380,000
e. Income Limitations (120% of Median)
Family Size                   Income Limit
1                            $52,100
2                            $59,500
3                            $67,000
4                            $74,400
5                            $80,400
6                            $86,300
7                            $92,300
8                            $96,200
Family size is determined by total number of persons to be living in the residence, regardless if they are qualifying for the loan.
f. RIVCO EDA approved homebuyer education required (HUD Approved – 8 hours
g. Closing Cost Assistance not available
h. Money is allocated on a first come, first reserved basis
i. Home Inspection required on all resale homes
j. No non-occupant co-borrowers
k. First mortgage financing must be done by RivCoEda approved lender

First Time Home Buyers-Have we reached the bottom?

Well at least some First Time Home Buyers think so.

The National Association of Realtors reported today that The Pending Home Sales Index rose 6.3% to 87.7 in December from a revised reading of 82.5 in November.  What happened?  Homes are simply becoming more affordable.  NAR’s House Affordability index rose 10.9% in December to 158.8, the highest since NAR began tracking affordability in 1970.

Lawrence Yun, NAR chief economist, said the pending home index shows a modest rebound. “The monthly gain in pending home sales, spurred by buyers responding to lower home prices and mortgage interest rates, more than offset an index decline in the previous month,” he said. “The biggest gains were in areas with the biggest improvements in affordability.

In many areas of Southern California you can actually own a home and the monthly payment will be lower than what it would be if you rented.

WOW! What are you waiting for?

It’s Too Important…DO IT RIGHT!

First Time Home Buyers Rent vs Buy - a new yardstick

Making the Move Into Home Ownership

If you are a First Time Homebuyer I have some Good News and some Bad News for you:
THE GOOD NEWS: There is a ton of information available to help you make the right decision!
THE BAD NEWS: There is a ton of information available to help you make the right decision!

The real problem is sorting the good information from the irrelevant.

Many websites feature a Rent vs Buy calculator, if you have tried them you know by now that Buy wins every time.

Yes, there are a lot of good reasons to buy, but not all will apply to your life circumstances.
But how do you know if the home your considering is a good deal? Well you can always compare by cost per square foot (The new hot button on House Hunters). But what if all the listings are overpriced? The cost per square foot will be inflated as well.
Here’s a little tool I picked up from the New York Times that will help you compare the cost of buying a home to the cost of renting. It was written by David Leonhardt, a card carrying renter.
Renting involves one obvious, recurring cost that can never be recouped: the monthly rent check. Buying on the other hand, involves multiple expenses some of which aren’t so obvious. On top of closing costs, there are repairs, property taxes, mortgage principal and mortgage interest (The mortgage-interest tax deduction reduces this last cost but doesn’t eliminate it. Same is true for property taxes).
Of course owning also brings benefits that have nothing to do with money. You can settle into YOUR home, repaint the walls and redo the kitchen just the way you like it.
If you find two similar houses, one for sale and the other for rent and divide the sale price by the annual rent, you can call the result the Rent Ratio. That concept probably sounds familiar to stock market investors. It’s the real estate market’s version of a price-earnings ratio – a measure of how expensive an asset is, relative to the underlying economic fundamentals. Like the P/E ratio, the rent ratio provides something of a reality check.
Historically the average rent ratio hovered between 10 and 14. In the last few years, though it broke through that historical range and hit almost 19 by the time the housing market peaked in 2006.
In concrete terms, a rent ratio above 20 means that the monthly costs of ownership will exceed the cost of renting. Anything less the pendulum starts to swing toward home ownership.
Most of the time the decision whether to rent or buy should be based above all on life circumstances. Do you expect to move again in a couple of years? or is there a good chance that you’re ready to settle in – and stop worrying about real estate for a while?

A new phenomenon is now occuring in many markets due to the high number of foreclosures. Prices of homes continue to decline while rents for single family homes are remaining constant (increasing in some areas). Many homes now rent for more than the monthly payment would be if you were to buy it (all those families need a place to rent).
Pretty simple, you can now compare the cost of renting with the cost of owning without all the clutter.

By the way, David is now a card carrying homeowner.

Greg Cook

First Time Home Buyers Network

www.homebuyerhelpnetwork.com

951-265-4532 (mobile office)

951-699-7813 (Fax)

greg@homebuyerhelpnetwork.com

It’s Too Important…DO IT RIGHT!

First Time Home Buyers-Is 2009 going to pass you by?

Well,  The Housing Market sure took a beating in ’08 but many people, just like you, realized their portion of the American Dream and bought their first home in 2008.
So what is 2009 going to bring?
Let’s start with some really good news about how much more affordable owning a home is from just one year ago.
These figures presented here represent Riverside County in California. (Perhaps you have heard of us, “Foreclosure Alley?). Some markets across the country did better others, like Florida, Las Vegas and Phoenix did much worse.
If you’re in one of those markets, it’s all good news because it just means homes are even more affordable for you.

This just in:
Good news for those looking to lock in rates!  Mortgage rates continued to drop this week, as Freddie Mac reported that rates continued to drop consecutively for nine weeks in a row.   Rates for a 30 year fixed mortgage dropped to 5.10% , down from 5.14% for the previous week.  “Interest rates for 30-year fixed-rate mortgages fell for the ninth straight week and represented a third consecutive all-time record low since Freddie Mac’s survey began in April 1971,” Frank Nothaft, Freddie Mac’s chief economist stated.
Looking ahead to ’09 there will be tremendous opportunity for you, if you are prepared and willing to put in the effort necessary.
In January of 2008 the median price for a home in Riverside County (CA) was around $260,000 and interest rates were 6.5%. Now the median price is $220,000 and interest rates are at 5%. So what does that mean in dollars and cents?
Well someone looking at a median priced home in January of 2008 would have had a monthly payment (Principal and Interest) of appx. $1643/mo. In January of 2009 that payment would be $1181. That’s a decrease of 28%.
It would have taken more than $5000/mo income to qualify in January ’08 and now it would only take less than $3600/mo.
Of course taxes, insurance, HOA are in addition but bottom line is the ability to buy a home in Riverside County increased by 28%!
NOW WHO CAN’T GET EXCITED ABOUT THAT??

What Lenders Look for in a Loan Application Part III

First Time Home Buyer Loans

We’ve talked about Credit History and Asset, the next leg of the CH-A-I-R is Income.
INCOME is how a lender determines your ability to pay. You may have heard about DTI (Debt to Income Ratio). Based on past performance lenders know that you can only effectively allocate a certain percentage of your income toward your monthly payment and your other credit debt. Your lender has guidelines that will allow a certain percentage but you have to take a long look inward, examine your spending habits and determine exactly what your budget is for your monthly payment. You and your lender should spend a lot of time figuring out exactly the right payment for you and then “STICK WITH IT!”.
General lender guidelines are between 29-33% of your monthly income going toward your house payment. The yard stick a lender uses is your “gross” monthly income (before taxes, SSI and other deductions). Most lender websites have calculators you can use to help you “pre-qualify” yourself. Frankly these calculators are a waste of good programming. INCOME is one of the most subjective areas of underwriting and it takes an experienced loan originator determine how much income is useable for the purpose of your home loan. If you are a salaried employee and your paycheck is the same week after week after week, then you can get a “handle” on your pre-qualification amount. But most of us have variances in our checks, i.e. overtime, bonus, shift differential etc. these require the help of a professional or you will find yourself looking at homes for which you don’t qualify. If your Lender says you qualify for $200,000 AND you are comfortable with that payment, don’t look at $230,000 homes. It’s basic economics the more you pay for a house the higher the monthly payment.
Much of the current “mortgage mess” is due to folks, just like you, buying homes they couldn’t afford. They either overstated their income or were “qualified” at a much higher DTI than was reasonable. At the First Time Home Buyers Network we don’t want you to buy your first home and then lose it because the payment was more than you could handle. If you have confidence in your lender (if you don’t you shouldn’t be working with him/her anyway) don’t stretch beyond your budget. You have to decide which is more important: Getting the house you want or Getting the house you can afford?

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What Lenders look for in a Loan Application Part II

First Time Home Buyer Loans

Yesterday we talked about your Credit History as leg one of and how it fits into the CHAIR. Today we’ll discuss the “A”.

ASSET – The second leg refers to the property you intend to buy. This “leg” is critical to a lender’s decision because the house is the lender’s security for the loan and if you cannot make your payments it’s what the lender now becomes the homeowner.

Your lender wants to make sure your home is comparable in value to the other sales in the neighborhood and to make sure the sales price accurately reflects the value. HINT: Your Realtor represents the seller (unless you sign a buyer’s agreement) so you want to do your own homework on what the “comps” are in the area. Ask your Realtor to provide you a list of the comps from MLS to help you determine a good offer price.

When the time is right, your lender will order an APPRAISAL. The appraisal will cost between $350-$425 and is done by a licensed and certified appraiser of the lender’s choosing. His/Her job is to determine the correct market value and to make sure your new home meets the minimum health and safety standards.

Sometimes your offering price will be more than the appraised value. If that should happen, then one of two things will need to happen 1) Renegotiate with the seller a lower price or 2) You can bring in a bigger down payment. Loans are always based on the LESSER of sales price or appraised value.

The appraisal is protection for you and the lender to make sure your purchase price accurately reflects market conditions. Paying too much for a house doesn’t help anyone except the seller.

What Lenders Look for in a Loan Application

First Time Home Buyer Loans

WHAT EVERY FIRST TIME HOME BUYER SHOULD KNOW – What Lenders Look for in Home Loan Applications

You’re considering buying your first home but do you know what is going to be important to your lender in approving you for loan?

All lenders are trying to determine your willingness and ability to repay the loan you have applied for. This is what you will hear referred to as UNDERWRITING, your loan officer will complete an application and ask you for all sorts of paperwork, some of which you may wonder if he’s really sane.

This series of posts is to help you understand the foundation of a good loan application. Many people think we are in a buyer’s market but the fact is we are in a LENDER’S market. Lenders own most of the properties for sell and they set the rules (guidelines) for those that want to buy them, unless of course you’re paying all cash.

Picture a CHAIR, sitting on four legs. Loans used to be much simpler. Picture a big ol’ cushy bean bag chair and you plop yourself into it and it molded itself around you. Loans were the same way, you would provide your financial information and a loan could be found for you. NOT ANYMORE!

Now everyone’s CHAIR is pretty much the same and you have to fit the chair rather than the chair fitting you.

In order for this chair to support you (and your loan), all four legs have to be sturdy and solidly on the ground.

The four legs of the chair are Credit History, Assets, Income, Reserves

CREDIT HISTORY- It’s more than your credit score!

This is a review of your willingness to repay the mortgage. If you haven’t paid your Visa bill or student loans you might be hard pressed to convince the lender you will make their payment. If you had past credit problems but have since “righted the ship” you aren’t doomed to float in the netherland known as renter!

A lender will review your entire credit history, giving the most recent weight to the last two years.

Your FICO score is just one factor in Credit History. Many loans are approved with credit scores less than 600 and credit scores over 700 don’t guarantee an approval for a First Time Homebuyer.

If you have current derogatory credit items take the time and bring them current or get them deleted. If you feel intimidated dealing with your creditors use a Credit professional. It may cost you a little but what it will save you on the interest rate for your home loan is well worth the investment. Many credit repair companies specialize in First Time Homebuyer Assistance. I’m constantly amazed by how unaware consumers are about their credit profile and how much money it costs them. Your mortgage professional can give you an assessment of what needs to be done (if anything).

 

Feds move to steamline help process for homeowners

WASHINGTON

11/11/2008 8:39:37 AM

By ALAN ZIBEL

In the most sweeping effort so far to help troubled homeowners, the federal government and the mortgage industry on Tuesday will announce a plan to streamline the assistance process for hundreds of thousands of delinquent loans held by Fannie Mae and Freddie Mac.
The Federal Housing Finance Agency, which seized control of the two mortgage finance companies in September, scheduled a press conference for 2 p.m. EST. Scheduled to attend were officials from the Treasury Department, Wells Fargo & Co., the Department of Housing and Urban Development and Hope Now, an alliance of mortgage companies organized by the Bush administration last year.

An industry official who worked on the plan said the new approach will allow lenders to modify more delinquent loans by establishing broad criteria to speed up the process. The official spoke on condition of anonymity because details had not been announced.

The new initiative will likely have tremendous importance because Fannie Mae and Freddie Mac own or guarantee about half of U.S. home loans.

To qualify:

1) Borrowers would have to be at least three months behind on their home loans, and

2) Would need to have home loans worth at least 90 percent their house’s value.

The interest rate or principal amount of the loan would be reduced so that borrowers would not pay more than 38 percent of their income on housing expenses, the industry official said.


The announcement comes as major banks are stepping up their efforts to curtail losses from souring mortgages. More than 4 million American homeowners with a mortgage were at least one payment behind on their loans at the end of June, and 500,000 had started the foreclosure process, according to the most recent data from the Mortgage Bankers Association.

Citigroup announced late Monday it is halting foreclosures for borrowers who live in their own homes, have decent incomes and stand a good chance of making lowered mortgage payments. The New York-based banking giant also said it is also working to expand the program to include mortgages for which the bank collects payments but does not own.
Additionally, over the next six months, Citi plans to reach out to 500,000 homeowners who are not currently behind on their mortgage payments, but who are on the verge of falling behind. This represents about one-third of all the mortgages that Citigroup owns, the bank said.

Citi plans to devote a team of 600 salespeople to assist the targeted borrowers by adjusting their rates, reducing principal or increasing the term of the loan.

Late last month, JPMorgan Chase & Co expanded its mortgage modification program to an estimated $70 billion in loans, which could aid as many as 400,000 customers. The New York-based bank has already modified about $40 billion in mortgages, helping 250,000 customers since early 2007.

Bank of America, meanwhile, has said that starting Dec. 1, it will modify an estimated 400,000 loans held by newly acquired Countrywide Financial Corp. as part of an $8.4 billion legal settlement reached with 11 states in early October.

There are probably more web pages devoted to first time home buyers credit than any other topic. Most of the time it’s mis-information at best. Check out the First Time Home Buyers Credit page for real information from industry experts.

 

 

First Time Home Buyers

 

 

This is Crazy! Homeowner ship IS cheaper than renting for first time home buyers in Temecula

First time home buyers in Temecula, Murrieta and all of Southwest Riverside County and North County San Diego got this bit of good news in their morning paper.

“Monthly payments on a house are now cheaper than monthly rents on a similar house in most of North San Diego and Southwest Riverside counties, according to an analysis of county-supplied and Realtor data by the North County Times.”

According to the NCTimes article: “Some homebuyers get loans backed by the Federal Housing Administration, allowing them to make a 3.5 percent down payment, which means they pay more in monthly payments. Despite that, those homeowners are still paying less than rent in half of all North County ZIP codes.” At least 70% of our market is FHA/VA or USDA loans which reflects the preponderance of first time home buyers who are doing WHAT? THEY’RE RENTING!

“In the French Valley ZIP code (92596), a house rents for a median of $2,055 a month, but a mortgage payment plus taxes on a median-priced house in his ZIP code on his FHA loan would cost $1,232, a 40 percent discount.” That payment might not include insurance and mortgage insurance but even with those included it’s still less than rent.

“No one really knows how long this unusual market will persist. Already a shortage of listings is creating bidding wars that could propel prices up. But the key to the trend is sub-4 percent interest rates, according to Nathan Moeder, a principal at The London Group in San Diego.” Bidding wars have been going on since 2007 but the key is interest rates. Interest rates impact long term affordability more than every other factor, including price. If you’ve been in this business for a while you know that interest rates can turn on a dime (1994 and 2004), so this long term affordability window won’t be open forever.

(Source: Eric Wolff North County Times, Escondido, Calif. (MCT) — The housing market has gone cockeyed.

For more information about down payment assistance programs available for first time home buyers in Southwest Riverside and San Diego Counties, Click Here

First time home buyers has the housing bottom come and gone?

There are no lack of predictions for first time home buyers on the bottom of the housing market.

If you’re one of the many first time home buyers who are still sitting on the fence and focusing on short term prices as opposed to the long term investment value of your first home, this video from the Today Show should give you some food for thought.

We have helped thousands of families take the big step of owning their first home and they all have one thing in common: When they were ready they, contacted us.

Visit msnbc.com for breaking news, world news, and news about the economy

First time home buyers have two words for all the fence sitters

First time home buyers have two words for all the “fence sitters” who are still trying to decide if buying their first home in this market is the right decision.

Buying a first home is NOT the right decision for everyone  You shouldn’t buy if renting better fits your lifestyle, if you haven’t made the commitment to owning or are focusing more on short term prices than long term investment.

There are thousands of families who decided that owning their first home was the right decision and they have two words for those of you still sitting on the fence.
The two words?

THANK YOU for sitting on the fence while we looked at all the homes that just a few years ago were beyond our reach.
THANK YOU for sitting on the fence when we wrote an offer on the home that was “perfect for us”.
THANK YOU for sitting on the fence while our offer was being accepted at a price we could afford
THANK YOU for sitting on the fence because your competing offer wasn’t there and the seller agreed to pay a large portion of our closing costs.
THANK YOU for sitting on the fence and not using the down payment assistance funds we were able to get.
THANK YOU for sitting on the fence so we could take advantage of these great interest rates and our new monthly payment will be less than we were paying for rent.
THANK YOU for sitting on the fence so we could finally move out of our cramped apartment and into a home with room for all of us.
THANK YOU for sitting on the fence because we finally have something that is “ours” and will be for a long time.

We have helped thousands of families take the big step of owning their first home and they all have one thing in common: When they were ready they, contacted us.

First time home buyers paying too much attention to home prices?

Why does the third richest man in the world (Warren Buffett)  think that first time home buyers like you should get off the proverbial fence? Because owning your first home is the best way to increase your net wealth!
Unfortunately too many first time home buyers pay way too much attention to short-term price changes. They’re so worried that prices might drop a little and feel that maybe they should wait to buy something.
Of course if you think you can predict the future  then by all means roll the dice!
However, the reality is that price, within reason, really should be a secondary matter in your search for a good property to purchase. In 2020 or 2022, you won’t even remember the 2012-2013 price fluctuations. You’ll just be gloating to yourself how brilliant you were buying into the market ten years ago. Not only will you have purchased a great property at the most affordable pricing seen in decades, but you will probably have locked in an outrageously low interest rate.
If it’s good enough for Warren Buffett it might a good enough reason for you.

The main reason that price is less important is that individuals who want to increase their net wealth from real estate ownership, which is the goal of many buyers, should only be purchasing property that they will hold for a long time.

The longer the better and a minimum of five years is probably the breakeven point to start building wealth. It is more likely than not that down the road, years after our economy has sprung back to life, real estate prices should be much higher than what people paid for properties in the next twelve months.
Affordability is now!
But, what if you buy and prices drop a little? Who cares! It won’t matter because you purchased a great property that you love for all the right reasons. You want to own real estate and any slight dip in the next year or two should be a wholly irrelevant short-term blip on the radar of a long term real estate holder.
In addition, in many areas right now, your monthly payment for ownership may be close to or less expensive than renting. That alone is an amazing turn of events in the history of personal residence ownership.

Thanks to Leonard Baron for his insight. Leonard Baron, MBA, CPA, is a San Diego State University Lecturer, a Zillow Blogger, the author of several books including “Real Estate Ownership, Investment and Due Diligence 101 – A Smarter Way to Buy Real Estate”, and loves kicking the tires of a good piece of dirt! See more at ProfessorBaron.com.

We have helped hundreds of first time home buyers in Riverside and San Diego Counties make the right Buy v Rent decision. They all have one thing in common, they took the first step and contacted us.

The mis-education of Temecula first time home buyers

The internet has created an interesting dilemma for first time home buyers. There are seemingly innumerable experts who are touting information about the nationwide housing crisis being over. But how do you know if it’s information or mis-information?

Many of this new breed of experts might better be referred to as “fakexperts”. A “fakexpert”  might be defined as a faux expert.
An expert will SHOW you what the information means to you, to help you make a more informed decision on buying your first home. A “fakexpert” will spin the information in the best possible light, usually for their benefit.

Here are some examples, you decide. Expert or “Fakexpert”?

The National Association of Realtors recently announced that  “Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 4.3 percent. (Given the NAR’s recent decision  to revise home sales downward for the last five years, might make them the poster children for “fakexperts”)

Within hours of this information being released, a number of other “experts” came forward to either dispute the numbers or put their own spin on them:

“[It] is not quite as encouraging as it first appears given that it comes at the expense of a 5 percent downward revision to the previous month’s figures. (Capital Economics)

“Sales of U.S. existing homes marched upward in January, maintaining a trend that started in the second half of last year. (Moody’s Analytics)

“Indeed, the market for existing homes is about as strong as it has been in five years, nationally and in all four regions. (IHS Global Insight)

Experts or “Fakexperts”? You decide, but these companies are being paid by someone to reach these conclusions.

What does it mean to you the first time home buyer?
Not much!
Local market conditions are far more important and it takes a local expert to SHOW you those trends and help you make the decision whether now is the right time to buy your first home.

We have helped thousands of first time home buyers get their piece of the American Dream. The one thing they have in common? They contacted us.

Temecula First time home buyers it's official the housing crisis is over!

It’s official the housing crisis is OVER for Temecula first time home buyers!

How do I know? I saw it on the internet and all it took was $431 to do it!

The end of the housing crisis has been a topic of discussion since before it really began.
As far back as 2008, the Wall Street journal was predicting an end to the housing crisis. “It is very likely that April 2008 will mark the bottom of the U.S. housing market.”

In September of 2008 (9/11 to be exact) CnnMoney said:
“A handful of economists and analysts predict the slump will bottom out, and home prices will level off by next summer – advice worth listening to.”

In fact according to the former Chief Economist of NAR David Lereah, there wasn’t going to be a bursting of the housing bubble. In 2005 authored a book (while still holding that post) titled: “Why the Real Estate Boom Will Not Bust – and How You Can Profit From It.”.  (Is anyone other than me concerned about the ethics of that?)

In February 2011, the Wall Street Journal, once again, proclaimed: 2011 may be the end of the housing crash

Need more evidence the media has no clue? Watch this video:

The latest group to take a stab at it? Capital Economics. How did Capital Economics arrive at their conclusion? “Banks loosen credit standards. Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.”

The national media (the kings/queens of disconnect) picked this up and ran with it at full speed. In fact there are no fewer than 10 newspapers who ran “breaking news” on the subject.

REALLY? On a $200,000 FHA loan that’s a difference in qualifying income of only $431 a month, I’m sure if we as lenders knew it would be that easy, we would have done it years ago.

Interested in the real state of the Temecula real estate market? Click here

First time home buyers already thinking about your future home?

For first time home buyers, buying a home in today’s market is the first step on a journey that will likely take you to a number of different houses over your lifetime. It’s inevitable that sometime after moving into your first home and getting that feel for homeownership, you’ll begin thinking about your future home.

What will it look like? How “green” will it be?

Recently the Department of Energy hosted the bi-annual Solar Decathalon in DC and the winning entry is the Water Shed home built by the University of Maryland.

Watch the video to see what lies in store for you sometime in the future.

Click here to see all the features of the award winning Watershed home

You might be wondering what your parents or grandparents thought would be their home of the future? Check out Walt Disney’s vision

If you’re ready to look for your home of today, contact us

First time home buyers the best educated or most mis-educated?

First time home buyers entering today’s housing market are considered by many to be the best educated first time home buyers in history. The internet has given them access to more information than any generation of first time home buyers.

Unfortunately today’s first time home buyers may also be the most “mis-educated” first time home buyers in history. According to Thefreedictionary.com: mis-educate means to educate improperly.

Maybe a better definition would be to educate with misinformation?

“It must be true, I read it on the internet”, is intended to be a tongue in cheek statement but when that information agrees with something you’ve already been told, especially from friends and family members, it tends to become true in your mind and may be creating unrealistic expectations for you or mis-education.

Mis-education can  also be contagious. The information your parents, friends, family members and neighbors are sharing with you may also be leading to your mis-education.
Here’s an example:
Third party listing sites (Zillow, Trulia and Realtor.com) attract millions of views each month because they give you easy access to homes for sale in your desired neighborhood. These sites are not real estate sites, they’re information platforms and they rely on information from local real estate brokers and use computer models. for their value estimates (weather forecasters use computer models too, and they’re 50/50 at best).

It’s easy to say their data is inaccurate, but here is an example of recent data from Trulia.com. Would you be “educated” after seeing this or “mis-educated”?:
“The median sales price for homes in Temecula CA for Jul 11 to Sep 11 was $1,000,000 based on 1 home sales.”
“The median sales price for homes in Temecula CA for Nov 11 to Jan 12 was $250,000 based on 1 home sales.”
Granted our sales aren’t as “robust” as they were a few years ago, but two sales in six months show that Trulia.com’s numbers don’t actually reflect what’s going on locally and if you’re relying on these numbers you’ve been mis-educated.

These third party sites are not without value, however.

They can save you a lot of time when you are only window shopping and haven’t decided on a location, price or agent. You can view homes, neighborhoods, and just about anything else you want to know while you put together your wish list.

When you’ve made the commitment to buy your first home, you’ll want more than a Realtor, you’ll want a Realtor who understands their local market, the first time home buyer programs available and gives you confidence that they are representing only your interests.
We’ve helped thousands of first time home buyers with their education and cleared up a lot of “mis-education” too. These first time homebuyers all did the same thing: they took the first step and contacted us.

Is real estate a good investment for first time home buyers?

Is real estate a good investment for first time home buyers?
If you’re a first time home buyer and asking yourself that question, it’s almost impossible to get an answer that means anything to you and your family.

The disconnected national media (on-line and offline) is no help. Their view from 30,000 feet confuses the issues for first time home buyers who are looking at it from ground level.

How does a first time home buyer evaluate the investment side of buying their first home?

First, let’s define “real estate investment”

A real estate ownership interest, whether a personal residence or rental property, that increases one’s net wealth by a fair rate of return on their invested cash equity; for the corresponding amount of risk they are taking by owning a relatively high risk asset.
What that means is that if you are going to put your invested cash equity into real estate, your net worth should improve by a greater amount than if you invested in a similarly risky asset.

And “invested cash equity” isn’t the property price; it is how much cash you took from your bank account to acquire the property minus down payment, plus closing costs, plus rehabilitation costs.

You have to live somewhere (unless it’s your parent’s guest room) and pay someone for the privilege. So if you’re renting now, you’re investing in real estate, it’s just not yours.

So a good real estate investment is really one that will increase your net worth over time. The longer you own it, the better the chances for that appreciation in value and wealth building.

For more information about real estate investment for first time home buyers, click here

Thanks to Leonard Baron, for the for some of the content. You can see more at Professor Baron.com

San Diego first time home buyers get bailout from Congress

November 16, 2011 – Breaking News

Finally some good news for first time home buyers in higher cost areas like San Diego

Congress reached a bipartisan agreement that would increase the maximum dollar amount of mortgage loans that can be insured by the Federal Housing Administration (FHA) back to $729,750 after dropping the cap to $625,500 automatically after a temporary increase was issued for all loans insured by the FHA (and all government-sponsored enterprises). The restored higher limit will remain in place through 2013.

“Higher FHA loan limits are critical to supporting current housing prices and our overall economic recovery, and it doesn’t cost the federal government a dime,” said Representative Brad Sherman (D-CA). “This is the single most important provision in the minibus [appropriations] bill to prevent a collapse of housing prices in high-cost areas like Los Angeles and San Diego.

This still has to pass both houses of Congress and get the President’s signature but help for the struggling housing market has a lot of support (especially with elections around the corner), so it would be a huge surprise if it isn’t passed quickly.

The higher limits coupled with the down payment assistance programs available to first time home buyers in San Diego make is a great time to follow the “smart money”

Click here for more information about first time home buyer financing in San Diego.

 

Buying your first home is like applying for your dream job?

In many ways buying your first home is like applying for your dream job.
The decisions you make will affect your family for years to come, so being prepared and putting “your best foot forward” is as important in the home buying process as it is in preparing a resume’ for your dream job.
As your future employer reviews your resume he/she will determine, based on current and past performance your ability and willingness to be the perfect employee and your first time home buyer lender will be evaluating your home loan application to determine your ability and willingness to repay them and repay them on time.
The most important question you have to answer is: Do I really want this job?
Like your dream job your first home is one of the most important decisions you will make.
A good decision provides a solid foundation for a promising financial future.
A decision made without careful consideration can lead to major financial problems including bankruptcy and/or foreclosure.

Here are 5 things we advised last year to get your family ready to buy your first home. Think of this as your undergraduate work. Now we’re going to show you some practical steps that will get you started down the path to homeownership.

Check your savings account balance – Even though there are a number of first time home buyer and down payment assistance programs available, you can’t and shouldn’t try to buy a home with a savings account balance in double digits.

When you find your first home and get ready to present an offer, you’ll need to write a check for the earnest money deposit, between $500 and $2000.
Lenders refer to this as “skin in the game” and the more of your own “skin in the game” the better a lender will feel about “hiring” you.

If your lease were going to expire at the end of the month and you had to move, how would you handle the deposits required for your next  apartment?
You’d need a minimum of first months rent and security deposit (usually a month). How would you handle that?  A similar amount may be enough for you to buy your first home.

Review your credit – Your credit references, like the references on your employment resume are indicators of your willingness to handle your credit (job) responsibly.

Be honest with yourself in evaluating your credit history.
“Would you give a loan to you, based on your credit report?”.

Your first time home loan lender is going to be lending you hundreds of thousands of dollars, does your “resume” say you’ll pay them back?

You’re entitled to a copy of your credit report each year and the best place to get it is annualcreditreport.com, it’s the only site recommended by the government.

The others are generally private companies with something to sell you. One of the largest of these private companies is actually a front for a lender, guess what they want?

Notice I said you’re entitled to your report, not your score.
It’s estimated that 80% of all credit reports have errors and the purpose of this exercise is to review your report for errors and  fix them before you start looking for your first home. Credit reports for mortgage lenders are based on different formulas than the online reports, so scores can vary greatly.

When you’re ready to get on the path to homeownership, your first step will be to get approved and part of that process will be a credit report with the scores that will actually be used for evaluating your application. So don’t worry about the scores yet, just make sure your credit report is as accurate as you would make your resume.

Know your options –  First time home buyers have a HUGE advantage over other categories of home buyers. There are millions of dollars in first time home buyer and down payment assistance programs available and many families qualify for more than one type of incentive.

Interestingly enough, hundreds of thousands of dollars each year go unused.

These programs are the “job search” firms that you might pay to help find your dream job. While other home buyers are struggling to save enough for down payment, you have government programs with millions of dollars to spend specifically to help you get your first home.

The first time home buyer incentive landscape has changed dramatically over the last twelve months and many of the programs that were available then might be different than when you last checked.

Like a “job search” firm, the first time home buyer programs have very specific steps you need to follow in order to successfully get the right incentive(s) for you and your family. You can do it on your own if you like but the quickest path to your new home is using a first time home buyer specialist that has experience with all the first time home buyer programs in your area.

Quit procrastinating – Another year has passed and what do you have to show for all the rent money you’ve paid over the last twelve months?
You have a big smile on the face of your landlord!
He knows that you’re paying him more in rent than you would likely pay for a comparable home down the street that YOU owned.

You’ve missed out on the potential tax benefits of owning your first home
You missed out on one more year of being the landlord
You’ve spent another year renting  because you believed the misinformation being spread by the mainstream media.

More than 59% of renters aspire to own a home and 80% of homeowners plan to buy another one.
You won’t get your dream job by sitting on the couch and waiting for the perfect employer to cal or send you an email. You won’t get your first home by sitting there either.

If you’re ready for your piece of the American dream, you have to go out and grab it.
You can start by contacting us.

What's keeping you from your piece of the American Dream?

Buying a home is the most important decision a first time home buyer will make in their life (so far!). There are so many factors to consider and the current economy is no help.

According to a recent survey by Trulia.com, “70 percent still say that homeownership is still central to their American dream which is unchanged from January despite declining economic conditions.”

What is your biggest obstacle to homeownership?

If you’re like 51% of first time home buyers, then saving for down payment is your #1 obstacle. Good News?  There a number of down payment assistance programs available to help you leap that hurdle. Even if you think you make too much or don’t really need down payment assistance, it should be part of your financial plan.

Is owning your first home part of YOUR AMERICAN DREAM?

To ask your burning question

 

 

What's killing the American dream of homeownership for first time home buyers?

Info  PR: n/a  I: 890  L: 0  LD: 79  I: 68  Rank: 2056657  Age: March 23, 2004  I: 0  whois source Robo: yes Sitemap: yes  Rank: 2004603  Price: 331 Density

Let’s see you can own cheaper than you can rent, interest rates are the lowest in 50 YEARS, and home prices are ridiculously affordable.

So why aren’t more first time home buyers buying?

Obviously the state of the economy is causing many families to think twice about the purchase of their first home, but how can anyone make an informed decision with all the misinformation being spread by the disconnected mainstream media and the so-called experts?
As first time home buyers it can be hard to separate fact and fiction.

Let’s take a look at some recent “expert analysis” and compare it to what’s really going on in most markets.

First there’s this gem from the brain trust at Trulia.com:
“Today, many banks are actually less enthusiastic about approving residential mortgage applications, which has dragged out the home buying process,” he added. “Until a middle ground on lending practices can be met, many highly-qualified buyers may be forced to be renters by choice for now.”
The truth: There are dozens of loan programs for first time home buyers and they don’t have to be “highly qualified”. They do have to prove they can and will repay the lender (Hardly a “less enthusiastic” guideline)

And then this from the National Association of Realtors:
Walter Molony, a spokesperson for NAR, fingers tight underwriting practices as another suspect culpable for the upswing in rentals.
Lenders have only been willing to lend to creditworthy buyers.”

What’s with those lenders? They only want to lend to people who will pay them back! Imagine that?

(Thanks to MReport for the “insights” from these “experts”)

I don’t know about other real estate markets but here’s what’s really going on in the Southern California Real Estate market, particularly Riverside and San Diego Counties.

  •     First time home buyers can get ZERO down financing with credit scores as low as 580   
  •     First time home buyers in all of California can move in for as little as 1% with a credit score of 640
  •     Even non first time home buyers can move in with as little as 1/2% with a credit score of 640
  •     First time home buyers in Riverside County can get up to 20% in down payment assistance with a credit score as low as 600
  •     Veterans can still buy a home with ZERO down with credit scores as low as 600
  •     There is still a TAX CREDIT for first time home buyers in Riverside and San Diego Counties

The talking heads in Washington and the media haven’t got a clue about the solution to the housing problem.
The solution will come from the bottom up not the top down.

If we can find ways to put more first time home buyer families in homes who want to and CAN make their mortgage payments (Yeah, that’s important!), we’ll work through the “shadow inventory”, and won’t be turning our neighborhoods into “detached apartments” by selling foreclosed homes to investors.

P.S. Did you know there are at least 10 programs available in our market to help first time home buyers purchase with little or no money down?

I would love to hear your comments, and feel free to share.

 

What does the debt ceiling crisis mean to first time home buyers?

Well we made it through the debt ceiling crisis with our collective “rear ends” in tact., but what does this mean for first time home buyers?

Did you know the debt ceiling has been raised 75 times since 1962? and the country has survived.

So what does it mean to you, the first time home buyer?

Well short term, interest rates dropped to an 8 month low on Monday on news of the debt settlement, but  interest rates change daily and as the stock market recovers, interest rates will probably inch back up a little bit.

What’s the longer term impact?

Did you know that in the last 5 years interest rates have risen 1% within 60 days FOUR times, so this “window of opportunity” may not be open for too long.

The three main rating agencies  have indicated they will continue to rate the U.S. debt as AAA for now but with a negative outlook – a rating that indicates a possible downgrade.

A downgrade means higher interest rates.
The formula is simple: Higher rates = less demand = lower home prices.  
Even though home prices may continue to drop, an increase in interest rates will more than offset any reductions. It’s your money on the table

Did you know that a 1% increase in interest rates, will increase your payments more than $100? (based on a $200,000 loan)I’m more concerned about the future of first time home buyer down payment assistance programs.
As the government looks for more ways to cut spending, the funding of these programs certainly has to be in their sights.

The #1 barrier to homeownership for first time home buyers is saving the funds for down payment and the continuation of these programs is vital if the economy and housing is ever going to make a full recovery.
Even if you weren’t planing on down payment assistance, it’s a good idea to take a look at it as an option.Other Related Posts:

What First Time Home Buyers need to know when buying HUD homes

First time home buyers in Riverside and San Bernardino Counties will soon have more houses to choose from for their first home.
 

HUD (Department of Housing and Urban Development) has begun releasing their inventory of HUD owned homes and have developed a system for selling them that is unlike any other in today’s market.

 

Under the HUD system, bids from first time home buyers using FHA loans will receive priority consideration

Things you need to know about HUD properties:

A property becomes a HUD Home when the previous owner had an FHA insured loan and the home was either foreclosed upon or given back to HUD through a deed-in-lieu prior to foreclosure.
You and your real estate agent will be dealing directly with HUD. No more of that annoying back and forth negotiating you may have found with the banks on REOs or short sale properties.

  • If you plan to live in the home, you must occupy for at least one year
  • You must use a HUD registered broker and use HUD purchase agreement forms.
  • A pre-qualification letter from a HUD approved lender must accompany your bid (if you’re using FHA financing)
  • HUD will pay up to 3% of your closing costs if you will occupy the property and are using FHA financing
  • You can offer more than the asking price but are required to pay the amount of the overbid in cash.
  • Know the codes
  1. “IN” – Insurable – Property meets minimum property standards with minimal repairs
  2. “IE” – Insurable with escrow – Same as IN but there are some repairs required (less than $5000). Amount of repairs is pre-determined by HUD and the dollar amount is added to your loan. Lender holds the money in “escrow” while repairs are done. For more information on IE guidelines
  3. “UI” – Uninsurable – Need repairs in excess of $5000. May be eligible for FHA 203k rehab financing or are “cash only”. For more information on UI guidelines

How to get started – Contact a real estate agent who is experienced selling HUD homes.  Your agent should have attended one of the number of “Successfully Selling HUD Homes” trainings and ideally taken the HUD homes certification course.

Work with your agent to get you a written pre-approval from a mortgage lender experienced with HUD homes. Not all lenders are created the same, and many lenders don’t have the experience in successfully financing HUD homes.

HUD homes are a great opportunity for first time home buyers, but unless you, your real estate agent and lender are all working together, it could turn into an adventure that costs you time and money in the form of extension fees and worst case,  forfeiture of your earnest money deposit.

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First time home buyers move to the front of the line

First time home buyers go to the front of the line

If you’re a first time home buyer in one of the many real estate markets that are dominated by foreclosures and bank-owned properties, you’re undoubtedly frustrated with the “second class citizen” treatment you’ve been receiving when it comes to the offers you’ve been submitting.

You did all the right things: you did your homework and found the right neighborhood for you and your family, you hired a good real estate agent who specialized in that neighborhood and helped you write a competitive offer, you had a solid pre-approval letter from a lender who specialized in first time home buyer loan programs.
The result?
Your offers were passed over or ignored by the banks and their agents as they accepted other offers (often times for a lower price) from investors paying cash or conventional financing with larger down payments. You might also have lost out to offers that were made for significantly more than the listed price.
This frustration has led many of your peers, to “drop out” and put their dream of homeownership on hold. Dropping out when there is this convergence of of affordable prices and the lowest interest rates in a generation.
Well, there is light at the end of the tunnel!
The Department of Housing and Urban Development (HUD) is releasing their foreclosures, known as “HUD homes” and first time home buyers are given preferential treatment in the HUD bidding process.

“Now is a great time to buy a HUD home, interest rates are low and there are many affordable properties available.” according to Shari Potts, Broker/Owner of Inland Realty Services and a HUD local listing broker. “There are many great properties under $100,000”, she added.

First time home buyer benefits on HUD homes:

  • For the first 30 days of a HUD home listing only owner occupied offers will be considered
  • HUD provides the appraisal on all HUD homes
  • Buyers bidding more than the list price, will have to pay the difference in CASH
  • HUD will pay up to 3% of buyer’s closing costs if they’re using FHA financing

So not only will first time home buyers get “to the front of the line”, indications are they will have plenty of homes to choose from. In it’s recently released December report the government announced it has 360,000 homes in it’s inventory.You can only view HUD homes accompanied by a licensed real estate agent, and offers will not be considered without a lender pre-approval letter.

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Is now the time to buy your first home in San Diego?

San Diego first time home buyers

First time home buyers in San Diego Ca have to two choices when it comes to their housing needs, they can continue to rent and pay their landlord’s mortgage or they can take that giant step onto the path to home ownership.
That  “giant step” should not be taken without careful research. You should investigate the neighborhoods, the schools, the city amenities, traffic bottlenecks etc.
But once you’ve decided that owning your first home in San Diego , fits your lifestyle, it’s time to analyze the investment side of your decision.Check out San Diego Real Estate Trends
In a previous post I talked about the Rent Ratio tool I picked up from the New York Times.
Read the complete article
This tool is to help you compare the investment side of your decision by comparing the cost of renting with the cost of owning, like the price-to-earnings ratio that stock investors use.

To help first time home buyers in San Diego, I’ve taken the average rental rate for a 3 bedroom home in three zip codes, 92028, 92064 and 92127 (from RentRange.com) and compared it with the average sale price of the same size home in those zip codes (figures from Trulia.com) and come up with the Rent Ratio for them.

Zip Code 92028
Average Rent: $1870 (2060 square feet)
Average Sale Price: $350,200
Rent Ratio: 15.61

Zip Code 92064
Average Rent: $1990 (1590 square feet)
Average Sale Price: $410,220
Rent Ratio: 17.18

Zip Code 92127
Average Rent: $2450 (2210 square feet)
Average Sale Price: $375,700
Rent Ratio: 12.78

In concrete terms, a rent ratio above 20 means that the monthly costs of ownership will exceed the cost of renting. Anything less the pendulum starts to swing toward home ownership. Anything less than 10-14 is clearly a buying sign.

If you use Rent Ratio as a barometer for your decision, you can see that in these San Diego zip codes, the rent v buy decision is almost a coin flip.

Now compare these numbers with the Rent Ratios in:

The Rent Ratio in these cities indicates they make a better buying decision for first time home buyers when compared to San Diego.

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Is it the right time to buy your first home in Temecula CA?

Temecula First Time Home Buyers

If you’re a renter in Temecula and considering making that jump to home buyer and then to home owner, there are a myriad of theories on whether or not now is a good time to buy.
If you’ve mentally bought into the homeowner concept, then a good next step is analyzing the Rent v. Buy equation.
In a previous post I talked about the Rent Ratio tool I picked up from the New York Times.
Read the complete article

This tool helps you evaluate the investment side of your decision by comparing the cost of renting with the cost of owning, like the price-to-earnings ratio that stock investors use.
To help first time home buyers in Temecula, I’ve taken the average rental rate for a 3 bedroom home in Temecula (from RentRange.com) and compared it with the average sale price of the same size home (figures from Trulia.com) and come up with the Rent Ratio for Temecula.

Average rent: $1675 ( 3 bdrm – 1750 sq ft home)
Average sale price: $229,250
Temecula Rent Ratio: 11.41


In concrete terms, a rent ratio above 20 means that the monthly costs of ownership will exceed the cost of renting. Anything less the pendulum starts to swing toward home ownership. Anything less than 10-14 is clearly a buying sign.

For most first time home buyers, it’s still about that payment or as we mortgage professionals like to call it: “your monthly nut”. Your “nut” in this case would be about $1750 a month including taxes and insurance.
(Payment is an estimate based on an FHA loan at 5% for 30 years with minimum 3.5% down payment, including mortgage insurance, homeowners insurance  and estimated property taxes at 1.65%)

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5 New Rules for First Time Home Buyers

If you’re a first time home buyer in Temecula, Murrieta and other portions of Riverside and San Diego County you’ve probably noticed that the real estate market has changed.

Because you’re on the buying side, the news is generally all good. Home prices in the Temecula Real Estate market have dropped 50% or more from the highs in 2006.This means that your first home is more affordable than any time in recent history.

For more information on local housing trends:TemeculaSan Diego

Menifee

Winchester

Regardless of where your first time home will be, it’s important to go in with your eyes wide open and with realistic expectations.

According to CBS Money Watch there are new rules that first time home buyers need to follow to save yourself time and money.CBSMoneyWatch.com

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First Time Home Buyers-Buffett says end to housing crisis near!

We’re talking Warren here, not Jimmy.

In his annual address, Warren Buffett predicted 2011 is when we will see an end to the housing crisis for first time home buyers.

There are hundreds of pundits and prognosticators out there, most of them with absolutely no track record of being right. Warren Buffett may not be right, but you can’t argue with his track record.

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Are you renting a home in foreclosure?

First Time Home Buyers renting

You’ve been faithfully paying your rent each month and kept up the property while you searched for your first home and suddenly the legal notices are plastered on your windows and a bank representative is telling you to “get out”.

Many first time home buyers in the middle of the search for their first home are finding out the home they’re renting is in foreclosure. Their landlord has been pocketing the rent and not making his mortgage payment and now the lender is knocking on the door telling them to move.

Do you know your rights?

If you have a lease and are paying your rent, the FDIC has legislation to protect you.  KNOW YOUR RIGHTS!

FDIC Alerts Banks to Tenant Protection Act
This story appeared in Bank Digest.
The FDIC has published highlights of the “Protecting Tenants at Foreclosure Act of 2009,” which became effective on May 20, 2009. The law is intended to protect tenants from immediate eviction by persons or entities that become owners of residential property through foreclosure and extends additional protections for tenants with U.S. Department of Housing and Urban Development Section 8 vouchers. It establishes a minimum time period that a tenant can remain in a foreclosed property before being evicted. Tenants must be given at least 90 days notice; tenants with leases must be permitted to remain until the end of the lease, except that a lease can be terminated with 90 days notice by a purchaser who intends to occupy the property.

By Les Christie, staff writerFebruary 18, 2010: 1:57 PM ET

NEW YORK (CNNMoney.com) — Renting a home that is going through foreclosure? If so, don’t be fooled: Lenders can’t kick you out; they have to honor the terms of your lease.

Of course, that doesn’t mean that some lenders’ representatives aren’t trying to scare people away.

Read the complete story

If you are trying to buy your first home and you find your landlord is in foreclosure, contact a local tenant advocacy group immediately.

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Changes to FHA loans as bad as advertised for First Time Home Buyers?

The Department of Housing and Urban Development recently announced changes to borrower guidelines for FHA loans. The industry had been bracing itself for “adjustments” that threatened the ability of many first time home buyers to achieve their goal of homeownership.

The changes that were announced, appear to balance the need for credit availability and the risk to the MI fund.

Here’s a nice summary from Mortgage News Daily:

Some FHA lenders out there had feared  the potential changes that HUD and FHA could make to their program would end up being their funeral. That turned out not to be the case, and there has been a good amount of analysis of the changes. The underwriting changes by the FHA include increases in the MI premium, an increased down-payment requirement for low FICO borrowers, a reduction in the ability to roll closing costs into the loan, and increased lender recourse to FHA lenders. What they don’t include, of course, is a program-wide minimum FICO, or program-wide increase in the down payment. Generally speaking, most agree that the changes announced to FHA underwriting seem to be less restrictive than anticipated and more supportive of mortgage credit availability and the housing market at the expense of minimizing losses to the MI fund.

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First Time Home Buyers - Are you pretending to be rich?

If you’re a first time home buyer looking to purchase their first home in Temecula, Murrieta or other portions of Riverside and San Diego Counties, you have to be wondering how did so many first time home buyers end up in such financial trouble and in many cases losing their first time home to foreclosure?
There’s been a lot of finger pointing (some justified, some not) at mortgage lenders, Realtors, the federal government for our current housing crisis and even the families who are now facing foreclosure.
Sometimes bad things happen to good people and their problems may not be their fault. But many of these economic problems are because these first time home buyers were “pretending” to be rich.
Thomas J. Stanley, author of “The Millionaire Next Door” says the current housing and credit crisis has presented us with an opportunity to cure the “pretenders”.
If you’re in the market for your first home, make sure you’re not a “pretender” by taking a cold hard look at your balance sheet and at your life to determine if you are truly ready for the responsibility of owning your first home.
Stanley recently released a new book “Stop Acting Rich…And Start Living like a Real Millionaire”. (buy the book here) In his new book a millionaire is defined as someone with net value investments of $1 milllion or more. The investments include such items as cash, stocks, bonds, mutual funds and equity shares in a private business.
You’ll notice he doesn’t include the traditional measure of equity in real estate, which is not tangible and really only relevant if you happen to be selling at any given point. Some may disagree, but the housing crisis has shown us that equity is a very fleeting concept.
Here’s some interesting facts that Stanley discovered in his study of the wealthy.

  • 86% of all prestige or luxury makes of motor vehicles are driven by people who are not millionaires.
  • Typically millionaires pay $16 (including tip) for a haircut
  • Nearly four in 10 millionaires buy wine that costs about $10
  • In the U.S. there are nearly three times more millionaires living in homes with a market value under $300,000 than there are living in homes valued at $1 million or more.
  • The number one preferred shoe brand worn by millionaire women is Nine West. Their favorite clothing store is Ann Taylor

If you’re a first time home buyer, now is the time to quit “pretending to be rich” and manage your financial life with a goal to “start living like a real millionaire”.

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Is a short sale the right choice for first time home buyers?

First time home buyers in Temecula, Murrieta and other portions of Riverside and San Diego Counties have two choices when it comes to buying their first home.

1) Their first home can be a foreclosure, bank owned or REO (same thing!)

2) Their first home can be a “short sale”

Who should buy a short sale?Here’s some valuable insight from a great Real Estate blog: AgentGenius.com

People who don’t have a hard and fast time-line can be great candidates for short sale purchases. They can exchange their ability to give time and patience for instant equity on a below market priced property.

Read the complete article

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First Time Home Buyers- Should you buy a condo?

First time homebuyers in Temecula, murrieta and other portions of Riverside and San Diego Counties are seeing the prices on condos reach a level, where the monthly payment on their first time home would be more than they are paying for rent.

So is now the time for a First Time Home Buyer to buy a condo for their first home?A condominium is very often the first home of choice many first time homebuyers in Temecula, Murrieta, and other portions of Riverside and San Diego Counties. The price, the locations, the amenities, the low upkeep all make condos a very attractive alternative to single family homes, but there are some landmines out there, so watch your step.

In a previous post I mentioned some of things to keep consider when buying a condo as your first home.

Read More

Here’s some updated information you’ll need if a condo is your choice for your first home. Unless you are a first time homebuyer with sufficient savings to pay cash for your first time home, the financing of your first condo has gotten more difficult.

Available inventory is the least of your worries. There are plenty of units available whether it be a foreclosure (REO) or a short sale, but getting financing is a “whole other story”.

At first you may think the “guidelines” for first time condos are keeping you from owning your first home, and they are but those guidelines are designed to protect your interest and the interests of the lender who will be financing your first home purchase.

Here are some highlights:

1. The majority of the units in a condo project (usually 60%) have to be occupied by owners. If it’s less, you would be buying in essence an apartment, and you likely live in one already.

2. No more than 15% of a condo project units can be more than 30 days delinquent on HOA dues. If the other owners aren’t paying their HOA dues, they will be looking at you to make up the shortage.

3. A requirement that borrowers must now obtain a condo-owners insurance policy unless the master policy provides interior unit coverage; coverage may not be less than 20% of the assessed value. Most condo association master policies don’t cover contents, so this would be an added expense to your monthly payment.

4. The homeowners association must have at least 10% of its budgeted income designated for replacement reserves and adequate funds budgeted for the insurance deductible. If the homeowner’s association cannot cover operating costs, new condo owners could expect to see a string of assessments just to pay the daily operating costs.

It’s not hopeless for Temecula  first time homebuyers who are thinking about a condo as their first home, but it’s caveat emptor (buyer beware). Make sure the Realtor you are using is aware of these changes, otherwise you’ll be facing an uphill climb on a very “slippery slope”.

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First Time Home Buyers-your children's cell phone bill may get more expensive!

First time home buyers in Temecula, Murrieta, and other portions of Riverside and San Diego Counties as well as homeowners, apartment dwellers, Temecula Realtors, in fact anyone with a cell phone or wireless device could see their monthly bills rise, without making an extra call. Cell phones for children are as much a part of “school supplies” as pencils, paper and backpacks. They help you arrange for pick-ups, set up “play dates”, get the “I forgot my homework” call or “I forgot to tell you there is soccer practice after school and I need my stuff”

Well that convenience may get more expensive, unless you act now!

Imagine this call, three or four times a day to each one of your kid’s cell phones:

Johnny: Hello!

Caller: “The warranty on your car is about to expire”

Johnny: “But I don’t have a car”

Caller: “Auto repairs can cost you thousands of dollars over the car’s lifetime”

Johnny: But I’m not old enough to drive

Caller: “For only $29.95 a month, you can protect yourself against those costly repairs”

Johnny: “OK, but I’m going to have to ask my mom to raise in my allowance”

Cell Phone Numbers Go Public this month.
All cell phone numbers are being released to telemarketing companies and you will start to receive sales calls.
YOU WILL BE CHARGED FOR THESE CALLS
To prevent this, call the following number from your cell phone: 888-382-1222.
It is the National DO NOT CALL Registry.

It will only take a minute of your time… It blocks your number for five (5) years.

You must call from the cell phone number you want to have blocked.

You cannot call from a different phone number.

HELP OTHERS BY PASSING THIS ON... It takes about 20 seconds.

www.donotcall.gov

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First Time Home Buyers - 10 Questions in a volatile housing market

First Time Home Buyers in Temecula, Murrieta and other portions of Riverside and San Diego Counties face a tough decision when deciding if now is the time to buy their first time home.

The U.S. housing market has been in a slump for the past four years. When will it ever end?
In recent years, real estate has proven as jittery and unreliable as any other market. The average U.S. home price nearly doubled between January 2000 and April 2006, according to the First American LoanPerformance index. Since then, the average has fallen about 30%

Here is a guide to navigating a fractured and volatile market:

1. Is the housing market getting better?

It has shown some signs of healing this year, but the much-touted recovery is tentative and fragile.

Read the complete article

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New Mapping tools for First Time Home Buyers

First time home buyers moving to Temecula, Murrieta and even other portions of Riverside and San Diego Counties are faced with challenges not even the best GPS can solve.

We have more Avenidas, Vias, Cortes and Calles with Spanish and Spanish sounding names (I had four years of Spanish classes and some of these names sound suspiciously made up). The result? A reto de navegación (Navigation challenge according to Google translate).

Of course you’re going to want to tell your friends and family members about your first home and a house warming party is on the calendar, but how the heck can you give directions when you’re lucky to find your way home without getting lost.

Help is on the way. The search engine Bing, has released two new mapping tools to help first time home owners.

Destination Maps lets you select a map area so that you can provide friends detailed directions from any direction.

Destination Maps

For more information on Destination Maps

All the guests found their way to your house warming party (and hopefully back home). The boxes are unpacked, the cable is hooked up and you’re wondering what is there to do in my new town?

Bing has also introduced Bing Local Events

No plans this Friday? Make some. Bing Maps newest application Local Events allows you to search for what’s happening around where you plan to be. Local Events will pop up the time and locations of nearby shows and community events.

Bing Local Events

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First Time Home Buyers - Once AGAIN!

In 2002 the Temecula real estate market was showing signs of another boom and Alan and Mia decided the time had come to buy their first home.

With the help of their Realtor, we were able to find the right four bedroom three bath home, across from the park and walking distance to the elementary school where their children were already enrolled. I’ll never forget the smiles when they received their keys for their first home.

Fast forward to 2006 and along with economy, Alan and Mia were seeing signs of tough times ahead. Alan had taken a position as a sales agent with one of Riverside County’s top homebuilders and had a great three and a half years. Sales began to slow at the condo project and before year end the builder closed down the project.

The resulting drop in income was devastating and before the end of 2006 they were forced to file bankruptcy and lost their dream home to foreclosure. One of the first casualties of the Temecula housing bubble.

I caught up with Alan and Mia in the middle of 2009, and learned that Alan had returned to school and had just graduated as a respiratory therapist. He was employed by one of the top hospitals in San Diego and this stability had rekindled their desire to become homeowners again.

We put together a plan that would enable them to own a Temecula home again.

Step One was to get their credit “cleaned up”. Working with an experienced credit repair specialist, they were able to improve their FICO scores and clear up the misreported items. FREE credit evaluation (mention the First Time Home Buyer Network)

Step Two was to establish a budget so Alan and Mia would have the savings to handle the 3.5% FHA down payment requirement plus have some reserves to handle moving expenses and to cover those things that will turn their new house into a home.

Step Three was to set some parameters for their Temecula home search. Like most home buyers their wish list was long but experience had taught Alan and Mia that having a monthly payment they could afford was more important than the spa tub in the master bedroom.

Fast Forward again to 2010 and Alan and Mia are earnestly searching for their new “first time home”. Consulting with their first time home buyer specialists they have been able to pinpoint the neighborhoods they can afford and have become “pros” using the online search tools to preview homes.

Their 2009 tax returns will be completed by the end of January, so we can begin putting together the paperwork for the Riverside County Down Payment Assistance Program. For more information on the Riverside County Down Payment Assistance Program

Alan and Mia will be rewarded because they put in the hard work and made the sacrifices necessary to become “first time homeowners” again.

Whether you’re buying your first home or tenth home, it’s important to remember that it’s a process not an event. It takes study, it takes preparation and most importantly it takes patience and the help of first time home buyer specialists.

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First Time Home Buyers - How to make a fortune from the biggest bailout in U.S. History

First Time Home Buyers in Temecula, Murrieta, Riverside and San Diego Counties are wondering if now is the time to buy their first home.

Ron Insana, author of the book “How to Make a Fortune” believes that there has never been a better time for Temecula first time home buyers and first time homebuyers in other parts of Riverside and San Diego Counties to make a fortune from the biggest bailout in US history.

To find out if it’s your time to “Make a Fortune” call or email us to speak with a first time home buyer specialist. For more valuable first time home buyer information, subscribe to the blog. To save or share with a friend click on the button below.

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Visit msnbc.com for breaking news, world news, and news about the economy

1999 to 2009 How different is the "new" first time homebuyer?

Google Maps Real Estate

They say” the more things change the more the stay the same”.

Home buyers in Temecula, Murrieta and San Diego may agree.

These figures indicate there may be a lot of truth in that old adage:

1999: 37% of buyers searched for a home online.

2009: 90% of buyers searched for a home online.

1999: median home value is $137,600.

2009: median home value is $172,600 (but note that some reports reflect that when accounting for inflation, the value hasn’t changed at all this decade).

Temecula Homes for Sale

1999: 82% of buyers purchased detached, single family homes.

2009: 78% of buyers purchased detached, single family homes.

1999: 46% of buyers choose suburban neighborhoods.

2009: 54% of buyers choose suburban neighborhoods.

Temecula Homeowners

1999: 68% of buyers were married couples.

2009: 60% of buyers are married couples.

1999 and 2009: the median age for buyers was 39.

1999 and 2009: “neighborhood quality, affordability, and convenience to work and school have consistently been top priorities.”

Temecula Crowne Hill

You can draw your own conclusions from these numbers, but other than the explosion of on-line home search (37% to 90%) things are just about where they were ten years ago.

Figures from National Association of Realtors)

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Uncle Sam wants to help First Time Home Buyers

Uncle Sam Wants to Help First Time Home Buyers
When you buy your first home, chances are the payment on your first home is going to be more than you are used to paying for rent. ManyTemecula

Help from Uncle Sam

First Time Home Buyers have faced the same dilemna but found a helping hand.

Well, you have a rich uncle, who will help you with your new house payment.

NO, he’s not going to give you money each month to help with the payment. But, he will help you increase your take home pay.

We hope you have done your research into the benefits of homeownership, if you have you know there are a number of tax deductible items that are part of your mortgage payment.

You can take advantage of the tax benefits right away rather than waiting until next year for your tax refund. For more information on a special Riverside County Tax Credit:

Click Here

Of course, getting a fat refund check sounds good, but did you know what you have really done is lend money to Uncle Sam Interest Free, for a year!

Wouldn’t you rather have that money to use to help pay for your little piece of the American Dream?

Of course you would, and here’s how to do it

Just go to www.irs.gov/individuals and look for the IRS Witholding Calculator. Have your paystubs and W-2s ready (you’ll need them for your new home loan anyway) and follow the instructions. The calculator will give you an idea how you may increase your withholding numbers, which will increase your take home pay.

It’s always a good idea to have your tax preparer review your numbers before you actually make the change.

This is the one gift you don’t have to feel bad about not sending a Thank You card!

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First Time Home Buyers 3 Wishes for the New Year

We’ve passed through the magical milestone of the New Year and entered a new decade. Do you feel better? Experts say you should. We’re done with the “Aughts” (as 2000-2009 has come to be called) and our moving into the teens.

Teenage Years

And as any parent can tell you, the teenage years are nothing but fun.

Since there seems to be so much emphasis (by the federal government) on the power of positive thinking (green shoots will save us all!),

Here are 3 wishes for first time home buyers:

Real Estate Wish #1: The residential real estate market is stronger than it appears.

Buying your first home is a lot more than the investment value but too many first time home buyers are sitting on the fence waiting for prices to go lower. Good strategy? To learn more:

Why waiting may cost you more

According to the Wall Street Journal

Real Estate Wish #2: The Big Box Lenders will stop stalling and start foreclosing.

Shadow Inventory of Homes

Until we work our way through the “shadow inventory” of  homes that have been foreclosed upon or are just waiting, we will never get back to a “normal” real estate market.

Short term it probably means prices will still drop, but first time home buyers who think they can “second guess” the direction of the market may be facing higher interest rates and tougher loan qualifications which would negate any savings a small drop in price would bring.

Real Estate Wish #3: Someone in the Obama Administration will sum up the courage to be honest with the American taxpayer.

American Taxpayers

Mainstream media outlets have been reporting for months that we have hit the bottom. It may make them feel good but it ignores the “shadow inventory”, increasing unemployment which will lead to more foreclosures, and loan modification programs that have become band aids not cures for the homeowners facing foreclosure.

To read the complete article from MoneyWatch.com

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First Time Home Buyers become First Time Homeowners

First Time Home Buyer Dream

Mark, a firefighter, and Shanna, a stay at home mom had been planning to buy their first home from the day they were married seven years ago. Like most couples at the time home prices made it seem like just a dream. When the twins arrived two years later, things naturally got a little tight and they put that dream on hold.

When the housing market in Southern California began to implode and home prices dropped, they felt a glimmer of hope that maybe their dream wasn’t dead after all. They checked the internet, newspapers, and home magazines. When Mark had a weekend off, they would visit open houses religiously in search of their first home.

Although they were concerned that home values might still decline, they were more interested in providing a home for their twins than the investment value.

The internet is a wonderful source of information but it’s very easy to go into information overload. They calculated hypothetical mortgage payments and even attempted to pre-qualify themselves on a website. Many of the websites, promised unbelievably low interest rates, but Mark and Shanna soon discovered they would need a big down payment and perfect credit to qualify for those rates. Unfortunately, they had neither.

Most of their money each month went for living expenses so they had very little savings. Mark did have a 401k but they viewed that as their retirement nest egg.

Even though they were always careful with their credit, a couple of late payments last year on a credit card put their FICO score in a tailspin.

They felt their dreams slipping through their fingers until Mark’s sister refered them to a Realtor who specialized in First Time Home Buyers.

Their Realtor arranged a meeting with a lender who was also a First Time Buyer specialist and knew all the programs available that might help Mark and Shanna.

The First Time Buyer Specialists, sat down with Mark and Shanna, talked about their wants and needs. Together they came up with a plan that would have Mark, Shanna and the twins in their first home.

Mark and Shanna were interested in a certain part of town because the twins were approaching school age and the schools there were very highly rated.

Another meeting with their lender, determined that this part of town was eligible for down payment assistance funds from the County. Because they were First Time Homebuyers they could receive up to 20% of the purchase price that would be their down payment. For More information on Riverside County Down Payment Assistance,

Click Here

First Time Home Buyer Counseling

Their Realtor/Lender team counseled them on the lack of inventory in the Temecula and Murrieta markets and difficulties having too few houses presented. A little discouraged, they promised to continue until they found just the right house.

After a few weeks of house hunting, their Realtor showed them their dream home. They knew it as soon as they walked through the front door.

It had four bedrooms and three bathrooms, more square footage than Mark and Shanna imagined they would ever need. It had a large lot for the kids and was within walking distance to the elementary school and the park.

They called their Lender with the good news. A quck crunching of the numbers and it became clear their dream home was just beyond their reach. Their lender promised to call them back after he did a little research. Within a few minutes their lender was on the phone with good news.

Riverside County had additional funds available in their Mortgage Credit Certificate (MCC) program. Through the use of a “tax credit” Mark could adjust the withholding on his paycheck which would give him more take home pay each month, which the lender could use in qualifying. For more MCC information. Click Here

The stars were in alignment and Mark and Shanna began making plans. Their Realtor helped them write a competitive offer and got the bank to agree to pay all of their closing costs.

They sat down with the lender to start the paperwork and to their surprise, their new monthly payment would be about $250 less than they were paying for rent on a much smaller house. .

Even though there was a lot of paperwork, Mark and Shanna knew it was worth the effort and soon the family would have a place they could call home. Mark even took a Saturday off to attend the mandatory Home Buyer Education that was one of the requirements to receive the Riverside County Down Payment Assistance.

When Mark and Shanna moved into their new home, it was the happiest day of their lives. The house needed new appliances, some paint and new flooring in the kitchen, but it was theirs.

Shanna’s parents agreed to help them and gave them the money that would help make this house a home. Mark hated the idea but went along, vowing “to pay them back as soon as he could.”

Mark had heard about the tax credit for First Time Homebuyers but was unsure how it worked. He called his lender who confirmed the credit and told him he could amend his 2008 federal return, which had been filed in January, to get the benefit of the tax credit now. For more information on the $8000 First Time Home Buyer Tax Credit

Click Here

Mark checked with his tax “guy” who confirmed the information, amended the return and in a few weeks Mark will have enough money to pay back Shanna’s parents.

As Mark and Shanna found out, there is a whole lot more to owning a home than just its price.

First Time Home Buyers become First Time Homeowners

Mark and Shanna had been sitting on the fence for months, and frankly the splinters were starting to get to them. They hopped off the fence, made the commitment and are now living the life they pictured when they first got married.

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First Time Home Buyers - WSJ says now is the time to buy!

Brett Arends of the Wall Street Journal has an interesting argument he pulled together using the latest Case-Shiller data, and double checked against Census data. 

In short, now is a good time to buy a home.

WSJ says the time is right for Temecula First Time Buyers

Real estate has now fallen 30% from its 2005 peak, at the same time as mortgage rates have also plummeted. In 2006 you had to pay an average of about 6.4% on a 30-year fixed loan, according to the Federal Reserve. Right now you can get deals for about 5%.

On average, buying a home now is as cheap as it was in the mid-1990s, when houses were an absolute steal.

  • But what about waves of mortgage resets coming in the next two years?
  • What about all the unemployment?
  • And the foreclosures?

Arends says these are all valid arguments for refusing to buy homes when they are expensive, or even averagely priced.

But the whole point about markets is that they adjust. Prices are now cheap. They reflect this bad news, and more. If you have a stable income, and you can get a 30-year mortgage at 5% or so, and you are willing to drive a hard bargain on a home in this market, this is your time

To read the complete article: Click here

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Temecula First Time Home Buyers, Beware the extra costs!

First Time Home Buyers in Temecula and Murrieta and first time home buyers in Riverside and San Diego Counties, watch out for the extra costs.

First Time Home Buyer Hidden Costs

I’m not talking about the “hidden costs” that magically appear at closing (New government regulations taking effect on January 1, will stop that), but rather the costs that you as a first time home buyer didn’t take into account when you started your home search in Temecula, Murrieta and other parts of Southern California. Homeowners should have 1% of the purchase price of their home in savings for improvements and surprise expenses, he says. “That is the absolute minimum. It’s better to have 2% to 3% socked away somewhere.”

To read the complete article: Click Here

Having enough “cash to close” is very often the most difficult part of the real estate transaction for most first time home buyers. Meeting with a First Time Home Buyer Specialist before you begin your home search will help you determine  how much you money you will need for closing and if necessary, he/she will help you work out a plan to get there.

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Bucket List for Temecula First Time Home Buyers in 2010

Bucket List for First Time Home Buyers

We’re at that time of year again, when there are lists for everything:

  • 10 top movies list,
  • Forbes list,
  • 5 top video rentals list,
  •  injured reserve lists,
  • 10 top celebrities in rehab, out and back in again. etc, etc,

Here’s a bucket  list for Temecula First Time Home Buyers. Think of it as the list of questions you need to ask and answer before buying your first home. A little preparation is time well spent. IT’S TOO IMPORTANT…DO IT RIGHT!

Buying your first home is really answering two questions:

1. What do you want to buy?

2. How are you going to pay for it?

Many first-time homebuyers pick out their houses before mulling their finances, but experts say it should be the opposite.

Yahoo! Finance put together this list of important questions for all first time home buyers.

Read More

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First Time Home Buyers "wave" good-bye to 2009

2009 marks the end of the decade of the “Aughts” or “Zeroes” for first time home buyers in Temecula and Murrieta.

We had the 60s, 70s, 80s and 90s, but we never came up with a name that the American Public embraced for the soon to end decade.

Temecula Real Estate ride

If you were a homeowner in Temecula, Murrieta or most of California for that fact it was definitely the decade of the “real estate roller coaster”.

Hopefully the next decade will be a “thrill ride” with enough hills and curves to be interesting, but not like the pothole strewn heartstopper we are finishing.

Here’s a “Wave” good-bye to 2009

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7 Tips for First Time Home Buyers - How to buy in a down market

7 Tips For Buying Your First Home In A Down Market

Buying your first home, a big decision

Prospective first time home buyers in Temecula, Murrieta and other parts of Southern California have an edge in a down market, but this doesn’t mean they are guaranteed to make money on the properties they buy. When real estate sales are slow and there is a glut of homes for sale, buyers have an opportunity to pick up a house on the cheap. The operative word here is “opportunity”. There are times when you should pounce and times when you should show restraint and avoid an impulse buy. Knowing the difference could save you thousands of dollars.

Here are 7 steps for first time home buyers to keep in mind as they look for their first home.

Tip No.1: Do Your Homework

Learn the market! Home prices vary by neighborhood, so focus on “comps” (comparable sales) in that neighborhood. You can use internet sites like: Zillow Truliafor a starting point, but eventually you will need a Realtor who is a First Time Home Buyer Specialist to get you the latest information from the local MLS.

Tip No.2: Get Your Ducks in a Row

To make sure you’re ready to pounce on a deal when it becomes available, get pre-approved with a first time home buyer specialist you trust. To find out what lenders look for in a loan application Click here

Tip No.3: Watch For Motivated Sellers

In a down real estate market, like Temecula, Murrieta and other parts of Riverside County, finding a motivated seller is not the problem. If they’re selling they’re motivated. Motivated sellers provide additional bargaining power for potential first time home buyers and you may be able to get them to pay all or a portion of your closing costs as well as negotiate on the listing price.

Tip No.4: Negotiate With the Realtor

Many experts believe first time home buyers can get a Realtor to work for less, and some will, but you get what you pay for. Work with a Realtor you trust who is a First Time Home Buyer Specialist and he/she will save you a lot more money and tension than someone who will work for a little less.

Tip No.5: Make Sure You Have Clear Title

Unless you’re a first time home buyer who is paying cash, you will need a loan. As a requirement of that loan you will get a title policy from the lender and there will be an owner’s title policy which will insure there are no known pre-existing liens against the property.

Tip No.6: Avoid a Bidding War

In a real estate market like Temecula, Murrieta and most of Southern California this is easier said than done. There seems to be too many first time home buyers for too few houses. But if you enter in a bidding war remember two things: 1) Don’t exceed the amount for which you are pre-approved 2) Remember Step 1, if you offer too much for the house and it doesn’t appraise it could jeopardize the entire transaction.

Tip No.7: Don’t Be Afraid To Walk Away

If you are not getting the deal you and your Realtor feel you deserve, do not be afraid to walk away, and look at the next home on your list. As inventory increases you will have more opportunities. This is not the easiest of steps but the biggest mistake you can make is to pay too much for your first home.

To read the complete article on investopedia:

click here

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Tax Credit for San Diego First Time Home Buyers

First Time Homebuyers in San Diego County may be able to lower their federal income tax liability because of an infusion of cash from the state.  Officials announced Friday that the county had received $15 million in state funds toward the Mortgage Credit Certificate Program. These funds are in addition to an earlier award of $11 million.

The Mortgage Credit Certificate (MCC) Program allows San Diego First Time Home buyers to lower their federal income tax bill up to 20% of their mortgage’s annual interest.

First-time homebuyers purchasing houses or condominiums within the city limits of San Diego can receive a tax credit equal to either 15 or 20 percent of the mortgage interest they pay each year on their federal income taxes. This increases their take home pay, which helps them make their monthly mortgage payment and qualify for a larger first mortgage.

The first time home buyer tax credit may be used in conjunction with the San Diego Down Payment assistance and closing cost assistance for first time home buyers.

For more information on the tax credit for San Diego First Time Home Buyers,        Click Here



 

 

 

 

 

 

FHA asks to raise down payments for Temecula First Time Home Buyers

If it becomes law, a new bill introduced to Congress would increase the FHA loan down payment requirement for Temecula First Time Home Buyers and other first time home buyers across the country.

FHA down payment to increase for first time home buyers

A bill introduced in Congress Monday would increase the minimum down payment for Federal Housing Administration (FHA)-insured mortgages from 3.5% to 5%.

The FHA Taxpayer Protection Act of 2009 — HR 3706 — would also prohibit financing initial service charges, appraisals, inspections, or other fees or closing costs with any part of an FHA mortgage.

According to the bill’s author, Scott Garrett(R-NJ), “As we have learned repeatedly throughout the mortgage crisis, the amount of equity a homeowner has in their home directly correlates to the credit risk associated to their mortgage.”

Ah yes, the old “skin in the game”argument. On a $200,000 purchase a first time home buyer would need an additional $3000.

  • If a first time home buyer and his family suffer a 50% drop in their income and cannot make their house payment, will the additional $3000 “skin” make a difference on whether they foreclose?
  • What if their home should decrease in value 10%, will the extra “skin” keep a first time homeowner from foreclosing if they have to sell?

 Scott and HUD Secretary Donovan want to decrease the credit risk to HUD, but if a first time homeowner suffers a “life event” that drastically reduces their ability to make their house payment, the amount of down payment is not going to keep them from foreclosing.

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To read the complete article, Click here

Temecula First Time Home Buyers what's in store in 2010?

Temecula Real Estate in 2010

First Time Home Buyers in Temecula and Riverside County are wondering what’s in store for the Temecula Real Estate Market in 2010?

  • Will there be more foreclosures in 2010?
  • What will happen to the price of foreclosed homes in 2010?
  • Will a first time home buyer be able to get a loan to buy their first home 2010?

Diana Olick the Real Estate Reporter for CNBC is one of the first to boldly go where no one has gone before and make predictions for the real estate market in 2010.

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To read Diana’s predictions Click here

Homes more affordable for Temecula First Time Home Buyers

More First Time Home Buyers in Temecula are finding affordable homes. The California Association of Realtors released it’s monthly affordability index and First Time Home Buyers in Temecula and other parts of the state have seen an increase in first time home affordability of almost 10%

Homes more affordable for First Time Home Buyers

Quick Facts:
· C.A.R. First-time Buyer Housing Affordability Index stood at 64 percent in the third quarter of 2009 compared with 55 percent (revised) in the third quarter of 2008
· The median price of an entry-level home for first time home buyers in California was $247,150 in the third quarter of 2009
· The estimated monthly payment including taxes and insurance was $1,450 in the third quarter of 2009
· The minimum household income for first time home buyers needed to purchase an entry-level home in California in the third quarter of 2009 was $43,500.

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First Time Home Buyers set new record!

First Time Home Buyers

The number of first-time home buyers rose to 47 percent of all home sales during the past year, up from 41 percent last year, according to NAR’s 2009Profile of Home Buyers and Sellers.  The increase marked the highest on records dating back to 1981. The previous high was 44 percent in 1991.

“These buyers are critical to housing and a general economic recovery because the market always heals from the bottom up – they absorb inventory, free existing owners to make a trade and stimulate related goods and services,” said Paul Bishop, NAR vice president of research. 

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First Time Home Buyers cause home sales to surge

First Time Home Buyers

First time home buyers caused home sales to surge for the second month in a row in October, climbing to the highest level in 2½ years as first-time buyers rushed to take advantage of an expiring tax credit.  Read the full article…

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1 in 20 to buy a home next year- Will you be one?

Poll – 1 in 20 will buy a home next year

  • According to a survey conducted for Move Inc., one in twenty Americans say they plan to buy a home within the next year, and they’re most likely to be 34 years old or younger and living in the South or West.
  • A quarter of potential buyers said the No. 1 reason they would buy now is because prices have bottomed out.
  • That reason topped bargain-priced foreclosures, worries about rising interest rates and a wide selection of homes
  • The percentage of buyers thinking of jumping into the market was down slightly from a March survey, but up about 1 point from a poll in June.
  • Home prices rebounded this summer at an annualized pace of almost 7 percent, according to the Standard & Poor’s/Case-Shiller home price index, but with high unemployment and foreclosures, economists debate whether prices will dip again.
  • Those surveyed widely favored federal policies that kept interest rates low and helped troubled homeowners avoid foreclosure over those that helped first-time homebuyers purchase a home.
  • And, overall, 48 percent of those polled didn’t think the government was doing enough to stabilize the housing market, whereas 42 percent thought it was.
  • Forty-five percent of Americans worry that they or someone they know will face foreclosure in the next year.
  • And almost 30 percent of those with a mortgage have contacted their lender in the past year to reduce their payments.

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Google Maps helps first time home buyers search for homes

Temecula Real Estate, use Google maps to to check out the properties for sale, the neighborhood, even local restaurants and other attractions.

But would we have Disneyland?

Over the last few months the subject of government involvement in the real estate business has been debated at great length (talk about an understatement), and I don’t expect to change the views or opinions who think that all government involvement in the Real Estate business has been a disaster.
But, the fact is “it’s just not true!”, but what is true is that the government has been successfully involved in the real estate business for more than 70 years and were it not for at least two of the programs, most of us wouldn’t have the title Realtor or Mortgage Banker/Broker.
Now before you go labeling me a “socialist”, I’m not advocating that the “Barney Frankian” form of government involvement is the solution either, in fact the “Frankian” theory of “housing for everyone” is probably number one on the list of causes for our current dilemna.
What does this have to do with Disneyland?
This past weekend my wife and I visited Disneyland for my birthday (got in free!). Now I have been to Disneyland hundreds of times. I was raised seven miles from the Magic Kingdom (seven miles by the way is close enough to bike there but way too far to bike back). When my kids were younger, my mom worked there, so we got free admission. Needless to say, I have seen everything the Magic Kingdom has to offer but this past weekend I was able to view it from a completely different perspective.
We stayed at a local hotel and the morning after our excursion I was standing on my 14th floor balcony and saw the areas surrounding Disneyland in a new light. It was a magnificent day and I could see all the way to the ocean. But as I pulled my field of vision closer I noticed tens of thousands of homes and I paused to reflect on how it all happened.
Disneyland opened in 1955 as Walt Disney’s dream, but at the time it was little more than an amusement park in the middle of orange groves. Interstate 5 the main north-south thoroughfare in California wouldn’t be completed for a few more years and Los Angeles was still the primary employment center of Southern California. There were more orange groves than houses at the time.
As I overlooked all these houses, I realized that without government assistance in the housing market, none of this would have existed and I think they did a darn good job of it.
In 1934 the federal government created the Federal Housing Administration (FHA) which provided for low down payment loans and perhaps more importantly long term 20 or 30 year loans. Up until that point, financing for homes was either non-existent, required large down payments and was short term.
If not for FHA (and later VA) how many of those families would have been able to make the westward migration after the end of WWII, and buy the affordable housing that would eventually surround the “happiest place on earth”?
The charters of Fannie Mae and later Freddie Mac were the second steps in creating the housing market as we know it. By putting the “full faith and credit” of the United States government behind mortgage backed securities, Fannie and Freddie created investment grade instruments with interest rates that were competitive in the market. The replenishable source of funds, allowed the mortgage market to grow to meet the ever increasing demand.
Their higher loan limits, also allowed those wishing to buy a home above entry level, a source for financing.
The two most significant events in the United States real estate market had nothing to do with the houses, nothing to do with indoor plumbing or electricity, nothing to do with mass production but everything to do with financing and how people were able to buy mass produced tract homes with indoor plumbing and electricity.
I’m can’t justify the excesses of the past few years, but I think seventy plus years of getting it right, can’t be ignored.
Millions of families had and have the “American Dream” of homeownership, but unless they have a viable way to pay for it, it remains just that a “DREAM!”

Posted via email from Greg’s posterous

First Time Home Buyers? Has the housing bust ended?

Has the housing bust ended?

A popular topic around the virtual ‘water cooler’ has been…..is the historic housing bust coming to and end or just getting started?
First Time Home Buyers are asking that very question every day.
Here’s a post from CNN that might shed some light on this.
4 million home loans are delinquentMortgage lenders say the flood of foreclosures has not yet crested. Highwater mark should come this fall. read more…

- The number of Americans who have fallen at least 30 days behind on their home loan payments jumped 44% in the second quarter from a year ago, according to an industry report.

That puts delinquencies at a record 9.24% of mortgages, according to the National Delinquency Report from the Mortgage Bankers Association (MBA). That represents more than 4 million of the 45 million borrowers covered by the report.

What the rate does not include, however, are loans already in foreclosure. Some 4.3% of all the mortgages are in that stage, up from 3.85% three months earlier and 1.55 percentage points from one year ago.

The combined percentage of loans past due and those already in foreclosure hit 13.16% during the quarter, the highest ever recorded by the MBA survey

“There was a major drop in foreclosures on subprime ARM loans,” said Jay Brinkmann, chief economist for the MBA, in a prepared statement. “The drop, however, was offset by increases in the foreclosure rates on the other types of loans, with prime fixed-rate loans having the biggest increase.”

Indeed, the MBA survey reported that prime, fixed-rate mortgages accounted for nearly one in every three foreclosure starts. That’s way up from a year ago, when only one of every five foreclosure start involved a prime loan.

That bodes ill for the future health of the mortgage market. Prime loans make up two-thirds of the mortgage market, and if delinquencies among these mortgages continue to proliferate, the number of foreclosures will soar.

Brinkmann forecasts continued delinquency and foreclosure increases until the economy starts to recover. He predicts that job losses will peak by mid-2010, as will delinquencies, and foreclosures will start to fall about six months later.

Problem areas

The so-called “sand states” continue to contribute disproportionately to the mortgage meltdown. Four states — California, Florida, Arizona and Nevada — accounted for 44% of all foreclosure starts during the quarter.

“Issues related to the deteriorating economy and deteriorating home prices in those states have driven their delinquency problems],” said Brinkmann

In Florida, 12% of mortgages were somewhere in the process of foreclosure, the highest in the nation; another 5% were at least 90 days past due as of the end of June.

Adding in 30 days and 60 days past due and Florida’s total delinquency rate comes to 22.8% — almost twice the national percentage. The next highest states are Nevada at 21.3%, Arizona at 16.3% and Michigan at 15.3%. California stood at 15.2%, but because it is such a large state, that represents nearly 900,000 mortgage borrowers.

“It’s hard to look at a national recovery,” Brinkmann said. “We could have multiple bottoms with some markets recovering much faster than others.”

First Time Home Buyer - Why is it so hard to get a house?

First Time Home Buyers across the country are asking themselves this very question. The short answer is: Everyone else is thinking just like you!

As a result, even though there is a glut of inventory (and more to come if estimates are correct), many First Time Home Buyers spends months making offer after offer, only to get outbid. 

Bidding wars seen in markets for foreclosed homes

Prices of foreclosed homes have taken such a beating that investors are jumping in and bidding up prices. Investors who win bids are often cash buyers who do not need to go through the appraisal process to get a loan. Traditional buyers who are looking for a home to reside in are at a disadvantage. Jerry Lou Davis, a real-estate agent in California, says the activity in the foreclosed housing market is similar to the housing bubble of yesteryears. Jay Butler, director of the Realty Studies program at Arizona State University, concurs with this view. “This market is about as abnormal as the hypermarket that we came out of a few years ago,” said Butler. Experts say that the bidding wars will impede stabilization of the housing market.

In Phoenix, the median home price, which was $265,000 3 years ago, was $125,000 last month, from a low of $115,000 in April. Real estate agents across the country have been observing price wars in the last couple of months, according to Walter Molony, a spokesman for the National Association of Realtors. In states such as Nevada, Arizona, California, and Florida, where home prices are moving to levels well below their peak values, it is not uncommon for sellers to get multiple offers. Jonathan Abbinante, a real estate agent in Las Vegas, says some of his clients are making 3 offers a day on homes they have not seen. “I sell homes right over the Internet,” said Abbinante. “That’s what I did in 2004.”

If you’re a First Time Home Buyer and want to take advantage of the $8000 First Time Home Buyer Tax Credit, the time to act is NOW! I know November seems a long way off but as you can see, the home buying process is much longer now and you have to be closed by November 30, 2009 (This has been extended to June 30, 2010 but you have to be in escrow by April 30).

IT’S TOO IMPORTANT…DO IT RIGHT!

First Time Home Buyer - Should I buy a Condo?

I thought I would share this inquiry I received from Zillow.com.

I was asked if it was a good time to buy a new construction condominium. If you’re thinking the same, here’s what I shared with this First Time Home Buyer.

Buying a condo requires a lot more “homework” than does buying a single family home, here are some of the Pros and Cons.

Pros 

  • If you are a qualified First Time Home Buyer, you may be eligible for the $8000 Federal Income Tax Credit, provided you close before November 30,2009 (extended to June 30, 2010 but you have to be in escrow by April 30.)
  • If you are purchasing in Riverside County (CA) you may also be eligible for the special Riverside County Tax credit (check out our posts on the Riverside County programs)
  • The usual benefits of condominium living still apply (little to no maintenance required) and the prices are usuallly lower than single family homes.

Cons

  • If it is new construction, the State of California is no longer taking reservations for the $10,000 stat home buyer tax credit.
  • Unless the project is FHA/VA approved you will be required to make a down payment of 20%. (The salespeople should know this).
  • In order for you to close by November 30, the project will have to have met it’s presale requirements. Right now it’s 51% of sales have to be to owner occupants. That may go to 70% if Fannie Mae gets her way.
  • If it is an existing project be sure to check the percentage of owner occupants vs. tenant occupied. If there are too many tenants, you will in effect be buying an apartment which will be very difficult sell in the future.
  • Be sure to check on the financial health of the Homeowner’s Association. If it is a new project and the builder/developer still controls the HOA, if he goes under so does the HOA and there goes all the amenitites you would have been paying for. If there are a large number of foreclosures in the complex, it means not many HOA dues are being paid which is a recipe for disaster.

If the condo lifestyle is something you’ve dreamed about, now can be a very good time to buy IF do your homework!

 

IT’S TOO IMPORTANT…DO IT RIGHT!

Where are home prices headed for first time home buyers?

Home Prices and Interest Rates, where are they headed?

If you’ve read my previous posts on interest rates, you know that no one knows for sure, but everyone has an opinion.

Same is true for home prices, the government and media would have us believe we are at the bottom of the market. There is still evidence that we have some more pain and suffering in the housing market.

Here is some info from some “experts”:

Where are home prices headed?

According to analysts, home prices may fall in the near-term and rise only in 2012. “We expect prices to drop for another year and then stabilize before starting to rise with incomes,” says Standard & Poor’s Chief Economist David Wyss. The S&P/Case-Shiller U.S. National Home Price Index, which tracks the movement of home prices, will fall about 16% this year before stabilizing. Fiserv, a research firm, has forecasted the 2012 home prices in 50 largest metro areas across different states.
In some states such as Wisconsin, Ohio, Indiana, and Michigan, home prices will see a rise by 2012. However, in states such as Florida, California, New Jersey, and New York, prices will fall until end 2012.

Elliot Eisenberg, a senior economist with the National Association of Home Builders says there’s still pain to come in states where there’s oversupply. “Prices will have to come down further and it will take a while to burn off the excess inventory that’s floating around there,” said Eisenberg. So what should home buyers do now? Is it a good time to buy? “To generalize, yeah, it is a good time to buy a house. I don’t think there’s any urgency because I think it’ll still be a great time to buy a house a year from now,” says economist Richard DeKaser of Woodley Park Research.

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First Time Home Buyers - Foreclosures coming with a vengance

The long expected tsunami of foreclsoures is right around the corner. In yesterday’s post “Reasons why good people can’t get good loans”, we talked about the “credit crisis” and “What lenders look for in a loan application”.

So, if you’re a First Time Homebuyer and think now is the time to take the plunge, you’re probably right. But if you haven’t taken care of “how you’re going to pay for it” you probably won’t won’t be spending a lot of time in the water.

Here’s the news on the next wave of foreclosures:

Diana Olick, CNBC just posted this on her blog….

I got a call yesterday from Scott Scredon at the Consumer Credit Counseling Services in Atlanta. He says they’ve seen a distinct change in callers. “We’re getting calls from engineers and attorneys and post graduate students,” he says. “Many of these people run through their 401Ks and their savings and start living off credit cards and then they call a counseling agency for help. So it’s a new kind of person we’re seeing today, but it’s a sign of the times.”
It’s not like we didn’t know it was coming, but apparently it’s coming with a vengeance.

Prime fixed-rate loans have finally leapfrogged those nasty subprimes to take the lead in the race to foreclosure. The foreclosure rate on primes has in fact doubled in the last year, and almost half of the overall increase in foreclosure starts in the first quarter of this year was due to the increase in primes.

So I asked Jay Brinkmann, chief economist over at the Mortgage Bankers Association, why all these aggressive industry and government modification programs aren’t helping, especially if the troubled borrowers are not in those nasty, exotic subprime loans.

“We have seen already in April a step up in some of the actions filed on people who don’t qualify. But when we look at vacant homes, when we look at cases where people are simply out of work, there’s simply nothing there that can be modified or worked out if they don’t have a job,” notes Brinkmann. On top of that, more and more borrowers are redefaulting and ending up in the mod system again. “Unfortunately, people that can’t live up to the promises they made originally when they were in a loan workout situation or simply that they were hoping things were going to get better and they did not. They then get back into the process and end up going to foreclosure. I think those factors will continue to drive the numbers up,” adds Brinkmann.

And one more thing: Freddie Mac estimates that 40% of the loans they have in foreclosure are on vacant homes. The borrowers don’t want a modification. Home prices have fallen so far that they will not see any equity for decades. So why pay?

On the bright side, if you can find it, the bulk of the trouble is still centered in four states: California, Nevada, Arizona and Florida, with Michigan, Ohio and Illinois close runners up. Brinkmann was surprised to see less of a national rise in foreclosures, but he is expecting it in the coming months.

Questions?  Comments?  RealtyCheck@cnbc.com


First Time Home Buyers -These Homes for Sale - SUCK!

I came across this article and if you have been looking at bank owned properties that “SUCK” then I’m sure you can relate.

These homes for sale suck

Never before have there been so many squalid, dilapidated homes on the market – and they’re helping to exaggerate already-plummeting home prices.

NEW YORK (CNNMoney.com) — Mold, maggots and piles of festering trash – no wonder home prices are in freefall.

It’s not just the subprime mortgage crisis that’s to blame for plummeting home prices. A flood of squalid properties on the market is helping to exaggerate the post-bubble price declines.

“Part of the reason home prices are declining is a fundamental deterioration in the housing stock,” said Glenn Kelman, CEO of the online, discount broker Redfin. “During the boom, nine out of 10 houses for sale in many markets were in prime condition. Now, for every 10 houses, at least three are dogs.”

Most of these mutts are foreclosed properties that have been permitted to fall into disrepair by lenders overwhelmed with thousands of vacant homes. If these houses sell at all, they’re going for bargain basement prices that are hurting home values throughout the neighborhood.

“I’ve never seen so many houses in this condition before,” said Ray Anderson of Buyer’s Advantage Real Estate in Auburn Calif., near Sacramento. “And I’ve been in the business 20 years. I’ve seen bank-owned properties in the past. They were never like this.”

Distressed properties usually sell for discounts of 10% to 40% below comparable, well-maintained homes, according to Tom Inserra, executive vice president for Zaio, an appraisal company that is creating a national database of home values.

Richard Smith, CEO of Realogy, the parent company for Coldwell Banker, Century 21 and Sotheby’s International Realty, estimates that homes that are not bank-owned have actually only seen price declines in the low single digits over the past 12 months. That’s compared with the 15% price drop recorded by the S&P/Case-Shiller Index for all homes over the same period.

‘Crime scene’

Lori Mize has firsthand experience with horrible homes for sale. She waited for years for prices to come down in her Elk Grove, Calif. home area, just east of Sacramento. With the median home there now selling 30% below the market’s peak, Mize thought it was time to buy. But nearly all the homes in her price range – $250,000 to $300,000 – are bank-owned properties, which tend to be in the most beat-up condition.

After looking at a few of them, she was almost ready to give up.

“The first one I saw was the worst home I had ever seen in my life,” said the married mother of two young girls. “There were magic-marker messages on the front door saying, ‘STAY OUT.’ They had poured paint and other stuff on the carpets. There was a lot of trash. I felt like I was at the scene of a crime. I wouldn’t let my daughters touch anything.”

In Florida, another foreclosure hot spot, vacant homes deteriorate rapidly in the high heat and humidity.

Garbage and food that’s left behind fester. “The properties smell,” said Eve Alexander, an agent in Orlando. “You find maggots. The swimming pools are green. The lawns dry up. They’re eyesores. Neighbors yell at us to water the lawn.”

Often the homes have been stripped bare. “All the kitchen appliances, cabinets and countertops, bathroom fixtures, lights are [stolen],” she said.

Others trash the place before they leave, according to Adele Hrovat, a real estate agent with the Buyer’s Realty of Las Vegas. “They punch holes in the walls, dump oil on the carpets. The banks are so overwhelmed, they haven’t gotten to the point when they send in crews to fix them up,” she said.

Indeed, soaring foreclosures have returned many houses to their lenders, who put them right back on the market – usually as is.

Nationally 18.6% of all homes sold during the three months ended June 30 were foreclosures, compared with just 7% during the same period a year earlier, and 3.1% in 2006, according to the real estate Web site Zillow.com. And that doesn’t include short sales, which is when a home is sold for less than the mortgage balance and the bank forgives the unpaid balance and also account for a lot of sales in many areas.

Just a few years ago in Detroit, only one in a hundred listings were foreclosures or short sales, according to agent David Mills of Homebuyer’s Realty. Now half of the listings are. Some have been badly damaged and suffered huge drops in value.

“A three-year old home that recently sold for $660,000 is listed for $350,000. There’s no kitchen, no master bath. The toilet was taken, the tub, cabinets gone.”

A growing problem

With the number of foreclosed properties projected to keep rising, there seems to be no end in sight to falling prices, according to Texas A&M real estate economist Mark Dotzour. Even though many of these dilapidated homes are actually pretty good bargains, Dotzour isn’t surprised that more people aren’t jumping in. Everyone is reluctant to buy in a declining market.

“Once buyers start to feel confident that prices in a given community have stabilized, they’ll start buying again,” he said.

For that to happen, the natural population increase will have to absorb all the excess housing inventory, until supply and demand are in balance again.

In the meantime, Congress has allocated $4 billion for municipalities to rehab derelict foreclosures in an effort to prevent them from dragging down nearby neighborhoods.

But mostly hitting bottom is just waiting for market events to play out and the construction of new homes drops and remains below below the replacement rate for a while.

“Once that inventory is gone, we’ll be at the market bottom, and the price trajectory will flatten out,” said Dotzour.

Until then, dilapidated homes will continue to aggravate the steep price drops being recorded throughout the nation. 

It’s up to you, but if you have the vision and can see beyond the mess, there are jewels waiting to be polished.

House Payments cheaper than Rent?

It can happen. With home affordability levels at record highs and interest rates at record lows, many First Time Homebuyers can now have monthly payments less than they are paying for rent.

Impossible? Check this video-

http://www.youtube.com/watch?v=r6J_1kgdsBA

Beat the Bank Owned Property Blues

If you’re a First Time Homebuyer in Southern California and have looked at hundreds of properties (at least it seems that many) that look like the previous owners threw a Rave Party on the way out the door. If you’re tired of competing with 10 to 20 other buyers for those properties so you can pay too much and still have to clean up the mess, then you need to check out this home. It’s in Riverside, California and has just been rehabbed.

http://www.youtube.com/watch?v=WSc_ts2TLIM

The definition of “green home” when it comes to bank owned properties is how much crud has accumulated in the shower, sinks and toilets.

Not in this home. View Today!

The Path to Homeownership - The AHA! Moment

So you’re finally going to do it. You’re going to save for the down payment or have talked with the Bank of Mom and Dad, your credit’s in shape. You’re committed to finding a home you love and are absolutely, positively committed to becoming a homeowner. Well pretty much, maybe?
If you are having doubts about your readiness for homeownership, take heart. It’s natural to go through a period of wondering if you really have what it takes to make the leap from renter to owner. You’ve been talking about it with your relatives and friends. And the latest rent increase notice from your Landlord has you convinced you’re fed up with renting.
If this sounds familiar, rest assured that before they bought their first property, millions of other First Time Homebuyers experienced the same worries and uncertainties that you now face. In fact it’s those doubts and uncertainties that will make you a better homeowner. Why? You appreciate how important  owning your first home is.
When was your AHA moment?
Maybe it was when you got your latest notice of a rent increase. Others might have opted to buy a home when you heard about a great bargain someone else got on a new house. Perhaps it was the $8,000 Federal Income Tax Credit or the availability of special financing and down payment assistance for First Time Homebuyers.
Or maybe it was when you finally realized that if you bought a home years ago you ‘d be a lot better off financially because you might have some equity as opposed to nothing to show for all those rent payments you’ve made.
Hang on to the Moment
Whatever the case, it’s important to hang on to that moment when you made the decision to go for it-or at least explore the possibility of becoming a First Time Homebuyer. Whatever it was that spurred you to act, and to seek out information, let that be your initial motivation to carry you forward.
There’s a reason people talk about getting on “the path” to homeownership. That’s because it’s a process not an event. It’s a journey and the only way you’re going to make it your final destination – when you have a set of keys in your hand and you walk into a home you truly own, with a huge smile on your face – is to go beyond that first thought you had telling you “I should buy a home.”
Once you get beyond thinking about a home, you get into the active phase of preparing yourself for homeownership.

NO MORE TALKING ABOUT IT!

Now you need to take action and sustained action at that. To succeed at buying your first home requires two ingredients: time and committment.
Notice I didn’t say it takes a big down payment, or a college degree, or the world’s best credit.
What it does take, is a committment to “DO IT RIGHT!” If you’re willing to put in the time to make the necessary commitment, anything that you’re lacking-whether it’s money, good credit, or something else-will eventually fall into place. Nothing will prevent you from becoming a homeowner.

(Thanks to Lynnette Khalfani-Cox The Money Coach for the inspiration and some of the material in her book “Your First Home”)

Home Prices Down - First Time Homebuyers Benefit

Just how affordable is housing in Riverside County?
Let’s take a look and we’ll use the First Time Homebuyer programs available from the County, to demonstrate what all these numbers really mean.
According to data just released regarding February home sales, not only were home sales up February of 2009, 3420 families became homeowners, that’s a 59.3% increase from 2008. Home prices also dropped 41.5% from $325,000 to $190,000. Let’s not forget that interest rates are at least 1% lower than they were just one year ago.
What does this mean in the real world?
Chad and Melinda were reading this morning’s paper and wondering what all this meant to them. As First Time Homebuyers, they were wondering if now was the right time and whether they could qualify to buy. They had only been married a short time and didn’t have much in the way of savings, but had heard of some County programs that might help them with their down payment. Chad had been working for the gas company for a little more than two years and Melinda was a dental hygenist, who just graduated from tech school. They were renting in Murrieta, paying $1500 a month for a two bedroom 900 square foot apartment.
They scoured the internet everyday after work, searching the hundreds of websites that had thousands of homes for sale, but still they were unsure whether or not they qualified. On the weekends, they looked through the newspaper and visited open houses. They saw lots of homes they liked but didn’t know if they could qualify to buy now.
Sound familiar?
For Chad and Melinda to qualify for the median priced home on an FHA loan with 3.5% down payment (appx.$6650) at 5%, 5.29 APR) fixed rate for 30 years. They would have a monthly payment of about $1385 PITI (less than their current rent). It would take approximately $4500 gross monthly income to qualify (using the new government guidelines of 31%). Not bad, but coming up with the down payment might be a problem.
But, what if they used the funds available under the County NSH Program? If the property is in a qualified area, they could receive up to 20% for down payment. With 20% down the payment would be approximately $1215/mo. That’s $285/mo less than they are paying for rent. To qualify they would only need $3920 gross monthly income.
But they’re young, fairly new on their jobs so it is still a stretch. If Chad and Melinda included the County Mortgage Credit Certificate it would in effect increase their buying power by 15%, so combined gross monthly income of $3340 would be enough for them to become homeowners for the first time.  For more information on the NSHP and MCC visit my website: http://www,homebuyerhelpnetwork.com
It’s hard to imagine, but just last year the median price home would have required gross monthly income of almost $8000/mo to qualify.
Now that’s affordability!

Figures are for demonstration purposes only. FHA loans and Riverside County programs subject to qualification.

IT’S TOO IMPORTANT…DO IT RIGHT!

Greg Cook
First Time Homebuyers Network
phone: 951-265-4532
fax: 951-699-7813
email: greg@homebuyerhelpnetwork.com
website: www.homebuyerhelpnetwork.com

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Buying Your Dream Home!

Buying Your First Home

Buy vs Rent – It’s more than a financial investment

Home ownership is the cornerstone of the American Dream and there is no denying it may be the best financial investment you will make.

But, will owning a home meet your lifestyle needs, Now?

What’s your dream lifestyle?

Do you see yourself playing with the kids in the yard on Saturday?

Or are you the type who likes to pack up and head to the beach each weekend?

Would you like to live in a place that’s truly yours or are you happy with the quality of rental units available?

If you decide to become a homeowner for the first time, your house payment may be more than you’re paying for rent. Will you be willing to make the lifestyle sacrifices, so you can afford the additional $100 or $200 per month?

You have probably seen the many Buy vs Rent calculators available on the Internet, and you know what? Financially Buy wins everytime.

Here are some thoughts on when Renting is Better and when Buying is Better.

When Renting is Better

Any real estate professional can give you a number of reasons why it makes sense to buy a house. Just like everything else, IT DEPENDS on who and where YOU are in your life as well as career.

Even though your friends and family may be telling you to settle down and buy a home, there are actually times and circumstances when renting might be a better idea.

Of course as your life, changes so will the answer to the rent vs buy question.

Will you put in the time?

In any investment, there’s no such thing as a sure thing. What usually makes real estate a better risk than most is time. The longer you are prepared to commit to your first home, the more likely your chances of seeing it increase in value.

During the last boom, too many people bought with the expectation they could turn a tidy profit in just a few months or a year. The market changed and their home declined in value (because they bought at the top) and now they are faced with the reality of trying to sell a property before it has appreciated enough to cover the costs and commissions.

Many First Time Home Buyers bought with little or no down payment and now are facing the prospect of paying Real Estate commissions and closings costs out of their own funds. Doesn’t sound pleasant, does it?

Will you like the neighborhood?

The first rule of Real Estate is Location, Location, Location! The good news is in today’s market a First Time Home Buyer has more choices of neighborhoods than even one year ago.

If you are going to be living in a neighborhood for a few years, make sure it fits your wants, needs and goals.

Research suggests you take ample time to get to know the neighborhood before investing your money in a house and a neighborhood.

Many First Time Home Buyers find themselves relocating and because of the potential difference in housing prices, choose the wrong neighborhood because all they see is “I get so much more for my money here than in (pick one – L.A., Chicago, New York, etc).”

A Certified First Time Homebuyer Realtor® specialist will help you find the right neighborhood and provide all the information necessary; i.e. schools, transportation, shopping, etc.

Will you keep all your commitments?

We’re not just talking about financial commitments. When you buy a home, you are entering into a contract to repay the lender for a period of time. If you’re not ready to take on that obligation, think twice.

Make sure you are buying for the right reasons!

Many First Time Home Buyers, spurred on perhaps by the notion of starting a new relationship which will be cemented in their new home are often forced to sell sooner than expected when those relationship plans don’t work out as expected.

Unfortunately, when plans don’t work out, both partners suffer the indignity of try to sell the property before it has had a chance to appreciate or worse staring foreclosure in the face.

Losing money this way does nothing to help an already difficult situation. If you and your partner have any doubts, experts say it’s not the time to make a major investment.

Will you be happy giving up the freedom?

Initially at least, renting is less financial pressure than buying. Paying a first and last deposit doesn’t compare to the chunk of change required for a down payment on a house. Though, in today’s market, with the low down payment loans  and down payment assistance available the difference isn’t as big as it used to be.

Renting gives you the freedom to move around without having to wait for a house to sell. Renting is lower risk, because if you need a new range or microwave, you call the landlord.

Even though rents tend to increase by 3 percent a year, unexpected maintenance costs or property tax hikes aren’t part of your monthly bill.

When Buying is Better

Does shelling out that rent payment each month bug you? Over the course of five or seven years you will pay enough in rent to buy some homes.

Hate the thought of a 30 YEAR mortgage?

Consider this!

The fact is, over the long term, building equity in your own property is far smarter than financing someone else’s. A fixed rate mortgage also locks in your monthly rate so you know that whatever your payment is, at least it will stay the same for thirty years.

Rent, on the other hand, has the nasty habit of increasing every year. If you’re already struggling to meet today’s exorbitant rents in major metropolitan areas, imagine what they’ll be like 10 or 15 years from now. Check out our Free Report about how the Housing Crisis is affecting Renters at http://www,homebuyerhelpnetwork.com

Tax Breaks

Probably the best reason of all to consider buying a house is the tax break. As the tax code is structured now, interest on your home mortgage is tax deductible as are property taxes. With rent, that’s money down the drain.

It’s as though Uncle Sam is actually helping pay for the house you buy. In fact the IRS even has a tool to help you adjust your federal withholding to soften the impact of a higher house payment. You can calculate your federal withholding benefit at www.irs.gov . The recently passed $8000 tax credit, which expires on December 1, 2009 is like receiving a “mail-in” rebate from Uncle Sam.

When it comes time to sell, homeowners can benefit from tax-free profits on the sale of their primary residence, up to $500,000, (if they are married and filing jointly and have occupied the home for two of the last five years, Homeowners who are single or married filing separately, can enjoy tax-free profits up to $250,000.

Three-Bedroom Savings Account

Have you ever wondered why credit card applications and auto loans ask if you rent or own?

In the eyes of the banking community owning a house is considered a major savings asset.

Almost all First Time Home Buyer loan programs require principal and interest payments. A portion of every mortgage payment goes toward the principal, (not a lot in the early years but it gets better over time), so the homeowner is building equity. In addition, historically home values have appreciated at an average of 5% per year. This varies from time to time and especially from market to market.

So, even as your debt to the mortgage company remains constant, what you get when you sell the house doesn’t.

There are many ways to maximize the appreciation in your home, but let’s get you in the right home first.

Generally, buying a home is considered a secure investment because prices usually don’t go down, unless you bought at the top of the market, or next to a nuclear power plant. The longer you put off buying a house, the longer you’ll miss out on appreciation, and the opportunity to build equity instead of wasting money on rent.

How much longer do you want to pay Uncle Sam more than you need to?

Personal Freedom

Aside from the money, owning a home brings freedom to create your own personal space without limits set by a landlord. When you think about it, a rental isn’t really your home, it’s someone else’s on loan and they probably won’t agree that the bathroom looks cool painted deep purple. Nor is a landlord likely to pay for such personal touches and why should you if you’re only renting? Take in an episode of House Hunters on HGTV and witness the transformation you see when a First Time Home Buyer get’s to express their individuality in their new home.

Thanks to Audrey Arkins, Salary.com contributor

To contact a first time home buyer specialist

GOOGLE ME

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First Time Homebuyers the real winners in the housing plan!

The dust has settled on the Obama housing stabilization plan.

We have a better idea of who will and won’t be helped by the new programs.
Clear cut winners have emerged. These winners will reap a number benefits, some tangible some intangible.
These winners come from many socio-economic backgrounds, they are from all ethnic groups, they include men, women and their families. In short it doesn’t get more politically correct than this.
AND THE WINNERS ARE: First Time Homebuyers!
Let’s take a look at all the ways First Time Homebuyers win.
The most tangible is the $8000 federal income tax credit. It’s “free money” and does not have to be repaid as long as the homebuyer remains in the home for three years. This tax credit is only good until December 1, 2009. On our website: www.homebuyerhelpnetwork.com you will find the story of a young couple who became First Time Home Buyers and will be getting their $8000 in a few weeks.
Let’s not forget the ongoing income tax deduction for mortgage interest and property taxes. This reduces the amount you have to pay the IRS each year, which is like getting a raise in pay. (Always consult your tax professional to determine your potential tax benefit)
Economic recovery depends significantly on the housing market and many parts of the country have thousands of homes sitting vacant and thousands more on the verge of becoming vacant. In order to incent First Time Homebuyers, many cities, counties and states have rolled out down payment assistance programs, state tax credits, etc. A First Time Homebuyer Specialist in your area will know all these programs.
In our story at www.homebuyerhelpnetwork.com you’ll learn how a young California couple wrapped a number of incentives together and were able to buy a lot more home than they ever imagined.
Even though the housing plan is designed to stop the “tsunami” of foreclosures many housing markets across the country have thousands of properties that must be sold before there will be any stabilization. This glut of housing has prices to drop month after month, creating an affordability bonaza for First Time Homebuyers. Factor in the historical low interest rates and many First Time Homebuyers will have mortgage payments lower than rent. (Check out our Free Report on how the Housing Crisis is affecting Renters at (www.homebuyerhelpnetwork.com).
Many First Time Homebuyers aren’t aware how much the loan modification portion of the housing plan will work to their benefit.
If your market is dominated by bank owned properties, I’m sure you cringe at the condition of these houses and wonder how things could have gotten this bad. Well, more choices are on the way!
Many current homeowners will be offered loan modifications to help them keep their homes, the estimate is 9 million. If it helps that many people, wonderful. I don’t think it will be that many. First qualification for the “loan mod” is they be no more than 5% “upside down”. In many markets, particularly foreclosure alley (California, Florida, Arizona, Nevada) most homeowners are 50% upside down. So instead of a loan modification these troubled homeowners are probably looking at a short sale as their last method to save their credit. In the last three months more than 1.5 million people have lost their jobs and many of these people own homes and won’t qualify for the loan modification because their debt ratios will be signifcantly more than the government programs allow.
In short, there will be more houses to choose from, many in better condition than the bank owned properties because the homeowners are still living in them and to save their credit it benefits them to maintain the condition of the house so it will sell quickly.
Additionally, banks who receive TARP funds are required to work out loan modifications and short sales with distressed homeowners as a condition of receipt of additional funds.
In the past short sales have been difficult transactions, but we should start seeing a change in lender’s handling of these and taking offers that are more in line with actual values than their perception of the home’s worth.
The housing stabilization program was designed to be a “win-win” for everyone but the big WIN is for First Time Homebuyers.

Greg Cook
First Time Homebuyers Network
phone: 951-265-4532
fax: 951-699-7813
email: greg@homebuyerhelpnetwork.com
website: www.homebuyerhelpnetwork.com

IT’S TOO IMPORTANT…DO IT RIGHT!

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First Time Home buyers are really the winners!

The Obama foreclosure mitigation store is open for business and when the dust settles the big winners will be First Time Home buyers.

Sure the plan was designed to help homeowners avoid foreclosure, in fact the number has been estimated at 9 million. I feel that might be a tad optimistic because almost all the homeowners in the states most affected by the “mortgage meltdown” (California, Florida, Arizona, Nevada) are upside down more than 5% so they would not be eligible or refinancing under the new program. The borrowers who received NINJA loans (no income, no job or assets) the s0-called “liar loans” will now have to prove their income (which they couldn’t do before), so they’re also won’t qualify.

So, why are First Time Homebuyers the winners? First, because you and investors are the only buyers out there, so you get the pick of the inventory (and we know most investors are “bottom feeders” who will only offer on the very lowest price homes). Now the inventory from which you will choose is only going to grow as more families are facing foreclosure.

An industry survey shows a record 5.4 million American homeowners with a mortgage, or nearly 12 percent, were either behind on their payments or in foreclosure at the end of last year.

The Mortgage Bankers Association said Thursday the percentage of loans at least a month overdue or in foreclosure was up from 10 percent in the July-September quarter and up from about 8 percent a year earlier.

The sharpest increases in loans 90-days past due were in Louisiana, New York, Georgia, Texas and Mississippi, reflecting a spreading recession and massive job losses nationwide.

Lenders will receive incentives for negotiating loan modifications and short sales. So if you’ve grown tired of shopping in the foreclosed aisle, take a look a couple aisles over at the pre-foreclosure or “short sale” homes there will be plenty to choose from and will generally be in better condition than an REO.

Many homeowners were counting on the bankruptcy courts to “cram down” their mortgages to help them keep their homes. In order to qualify for the “cram down” the homeowner has to first prove they made a good faith effort to do a loan modification and/or a “short sale”

If you’re working with a First Time Buyer Specialist who knows “short sales”, they will be able to find those deals that are priced as well if not better than REOs.

But wait, don’t forget your coupons! If you are a First Time Homebuyer the government has an $8000 “mail-in rebate” waiting for you in the form of the recently awarded Federal Income Tax Credit. Many other states are offering similar “coupons” in the form of incentives to First Time Homebuyers and your FTHB specialist will know all the incentives available to you.

If you’re not working with a First Time Homebuyer Specialist, let us know and we will find one in your area to help you.

First Time Home Buyers - We thought it was a buyer's market?

Turn this...

Turn this...

INTO THIS!

INTO THIS!

Shawn and Jill were finally going to realize their dream of being homeowners for the first time.
Even with their concerns about the economy, both felt their jobs were safe and they knew homes would probably not be this affordable for a long time.
Most importantly, they wanted the best for their three children. Their current three bedroom rental home was nice, but the kids were getting too old to continue sharing a bedroom, plus Jill needed an office for her work as a medical transcriber.
The kids were very happy with their school and Shawn and Jill figured it wouldn’t be too hard to find a 4 or 5 bedroom home in the same neighborhood. Every week they would see more For Sale signs appear with advertisements of “bank owned”, “repo” or “foreclsoure”.
They had saved a little money for down payment and Shawn’s parents had agreed to help them out if they needed it. Every day they searched the internet for a home in their target neighborhood and finally their diligence was rewarded. They found a nice five bedroom home with a big yard at an affordable price. They immediately called Jane’s friend Kellie, their Real Estate Agent to see the house.
Within an hour they all met at the property. Shawn and Jill did not want this opportunity to slip through their fingers.
When they pulled up to the property they passed another couple on their way out.  As they walked through the house, they noticed little things that needed to be repaired or replaced, but at this price they could easily afford to make those repairs. The new carpet and hardwood floors would have to wait. The floor plan and five bedrooms were what they needed and the home was walking to distance to the kid’s school. This house had everything and they immediately returned to Kellie’s office to make their offer.
Later that day, their Real Estate Agent called and informed Shawn and Jill there were eight other offers on their home and five were for a higher price than theirs. Needless to say, they were heartbroken, but as their agent explained, “it’s very competitive out there and you may have to make seven or eight offers before you are the winning bidder.”

or this...

or this...

INTO THIS!

INTO THIS!

 

One Sunday morning as they were taking the kids and the dog for a walk, they came across a house that had seen better days. The weeds in the back yard were waist high and through the windows they could see holes in the wall, the appliances had been taken, and the flooring was destroyed. But it was the same floor plan as the previous home.
They called their agent who told them the house didn’t qualify for FHA financing in it’s current condition and that’s why the list price was so low. Shawn and Jill knew there was no way they could come up with the money to do all the needed repairs.
Not one to take NO for an answer, Shawn went to the HUD website (www.hud.gov) and learned about an FHA loan program that would not only lend them the money to buy the home but include the funds necessary to make the house “as good as new”.

Woud you rather cook here?...

Woud you rather cook here?...

OR HERE?

OR HERE?

Shawn immediately called Kellie, who referred him to a Mortgage Broker who knew the FHA 203k Rehabilitation Loan Program. Shawn, Jill and Kellie met with the lender, he explained how the program worked and gave them a “mind map” on how to use this loan program to buy the house no one else seemed to want.
Well, it’s been three months and Shawn, Jill and the family are in their new home. It has stainless steel appliances, new carpet and laminate flooring, the holes in the wall have been repaired and the house has been painted throughout and the family couldn’t be happier.They were able to buy the home for substantially less than the other homes in the neighborhood and even with the repairs have a lower payment than they would have had competing with all the other homebuyers.

Enjoy family time here?

Enjoy family time here?

OR HERE?

OR HERE?

For more information on the FHA 203k Rehabilitation Loan Program go to www.hud.gov or contact us: greg@homebuyerhelpnetwork.com

 

First Time Buyers: Uncle Sam wants You!

Most of this information came from HGTV’s www.Frontdoor.com. A great resource, by the way for information on all aspects of today’s housing market.

Uncle Sam is not looking to build up a fine real estate portfolio. Nor is he interested in flipping properties like hotcakes.

Nevertheless, the U.S. government is taking ownership of a growing number of foreclosed properties that secured government-guaranteed loans gone bad.
What does it mean to you?
All this translates into potential opportunities for real estate investors and bargain homebuyers, who can mine government-owned foreclosures to find discounted property. But there are also some obstacles to purchasing property from the government, and prospective buyers should be aware of these potential pitfalls before they make any offers to Uncle Sam.

Many government foreclosures can be bought at bargain prices because the government is motivated to sell and get someone back in the home. In addition, the government entity selling the property may be willing to pick up some of the closing costs, a practice that is not common for bank-owned foreclosure purchases. (Most bank owned properties will pay closing costs but because you are in competition with so many other First Time Homebuyers you may have to increase your offering price to be competitive.)

According to Andrew J. Waite, publisher of Personal Real Estate Investor magazine, the biggest obstacle for investors looking to purchase government-owned real estate is that all the best properties get scooped up by professionals specializing in that marketplace long before the rest of the investor community gets to pick through the leftovers. Another obstacle for real estate investors is that the federal government’s goal is to promote the American Dream of  homeownership by owner-occupants. While some government agencies are more than willing to work with anyone who wants to help them get the real estate off their books, others put up hurdles to investors in particular and will only sell to them as a last resort if no one else qualifies to buy a particular home.(Mr Waite leaves unsaid is that owner occupants tend to pay a higher price than investors who, most of the time are working off a pre-determined ROI-return on investment)

HUD HOMES

In the 1990′s we were in a similar market and HUD Homes accounted for most of the inventory of foreclosed properties. As a result, HUD has a lot more experience than most banks in moving these properties. You may see more homes fall under this umbrella as the Federal Government seizes more of these properties and will need a conduit to move them off the books.

The U.S. Department of Housing and Urban Development (HUD) is a prime example of the federal government owning homes it doesn’t want. Under the auspices of HUD, the FHA insures loans used to originally finance the purchase of property. If a borrower defaults on one of these loans, the government has to make good on its promise and may end up taking ownership of the property.

When a borrower does default on an FHA-insured loan, HUD steps in, pays off the originating mortgage holder and then takes back the property. Thus, the federal government is now a reluctant property owner who wants to dispose of that property as quickly as possible. Interested buyers must submit a bid through a HUD-approved real estate agent or broker during the listing period. (If you need help finding a HUD approved broker in your area, contact us)

Listing prices are set through an independent appraisal. During the listing period (which lasts 10 days) HUD reviews the submitted bids and accepts the highest realistic bid.

HUD, as a Cabinet-level agency of the federal government, has a mandate to promote home ownership in this country.Thus, the agency is obliged to look at bids from prospective owner-occupiers first. If none of them work out, then HUD will entertain bids from the public at large, including investors. (Many of HUD’s homes are offered with special financing, including $100 down payments, a HUD approved Real Estate agent or broker can help you find those homes).

Go to the agency’s website at www.hud.gov to get more details on purchasing HUD homes.

Veterans Administration Homes

VA homes account for a much smaller percentage of the market than do HUD homes and as a result don’t always get the attention of their larger “cousin”.HUD Homes.

Like HUD, the U.S. Department of Veterans Affairs (VA) is not a lender but an insurer of loans made by other lenders against defaulting borrowers. The difference here is while borrowers under the FHA program must meet certain income and other criteria to qualify, under the VA loan program the original borrower must be a veteran.

If the original veteran borrower defaults on the loan anyone can purchase a VA home and possibly even assume the existing loan, even if he or she is not a veteran.

Look for special financing for both veterans and nonveterans looking to purchase a VA foreclosure. Known as the VA Vendee Financing Program, the benefits include:

No down payment for owner occupants;
5 percent down payments for nonowner occupants (investors);
No appraisal fees;
Competitive fixed rate mortgages.

Fannie Mae and Freddie Mac Homes
Fannie and Freddie want you to buy their homes

Until the last 18 months most folks thought Fannie and Freddie were a comic strip or sitcom characters (weren’t they regulars on I Love Lucy?)
The Federal National Mortgage Association (better known as Fannie Mae) and the Federal Home Mortgage Corp. (Freddie Mac) are the two shareholder-owned Government Sponsored Enterprises (GSEs) that are now under government conservatorship, but are not government agencies like HUD and the VA.

Both Fannie Mae and Freddie Mac buy mortgages from lenders, securitize them, and then sell them on the secondary mortgage market. This is turn provides a constant source of mortgage capital to member lenders who then fund more home loans to sell to the GSEs.

Fannie Mae and Freddie Mac are primarily in the mortgage business, not the home owning business. That said, when the mortgages they buy from lenders go bad, the enterprises have no choice but to foreclose on the defaulting homeowner. Thus, both Fannie Mae and Freddie Mac have homes to sell.

Since they are not government agencies, however, Freddie Mac and Fannie Mae have shareholders to answer to the same as any other corporation when it comes to dealing with the sale of assets (in this case real property). The primary goal is to get the foreclosed properties off of their books. (Look for special financing offers on some properties)

Go boldly where few have gone before you!
Most home buyers (First Time, seasoned and even investors) are mostly chasing bank owned properties, while thousands of government homes are waiting for new owners.

Make sure your real estate agent or broker is familiar with all types of foreclosures and that you are seeing the best properties that meet your wants and needs.

IT’S TOO IMPORTANT…DO IT RIGHT!

Greg Cook

First Time Home Buyers Network

www.homebuyerhelpnetwork.com

951-265-4532 (mobile office)

951-699-7813 (Fax)

greg@homebuyerhelpnetwork.com

It’s Too Important…DO IT RIGHT!

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First Time Home Buyers-Have we reached the bottom?

Well at least some First Time Home Buyers think so.

The National Association of Realtors reported today that The Pending Home Sales Index rose 6.3% to 87.7 in December from a revised reading of 82.5 in November.  What happened?  Homes are simply becoming more affordable.  NAR’s House Affordability index rose 10.9% in December to 158.8, the highest since NAR began tracking affordability in 1970.

Lawrence Yun, NAR chief economist, said the pending home index shows a modest rebound. “The monthly gain in pending home sales, spurred by buyers responding to lower home prices and mortgage interest rates, more than offset an index decline in the previous month,” he said. “The biggest gains were in areas with the biggest improvements in affordability.

In many areas of Southern California you can actually own a home and the monthly payment will be lower than what it would be if you rented.

WOW! What are you waiting for?

It’s Too Important…DO IT RIGHT!

First Time Home Buyers-Is 2009 going to pass you by?

Well,  The Housing Market sure took a beating in ’08 but many people, just like you, realized their portion of the American Dream and bought their first home in 2008.
So what is 2009 going to bring?
Let’s start with some really good news about how much more affordable owning a home is from just one year ago.
These figures presented here represent Riverside County in California. (Perhaps you have heard of us, “Foreclosure Alley?). Some markets across the country did better others, like Florida, Las Vegas and Phoenix did much worse.
If you’re in one of those markets, it’s all good news because it just means homes are even more affordable for you.

This just in:
Good news for those looking to lock in rates!  Mortgage rates continued to drop this week, as Freddie Mac reported that rates continued to drop consecutively for nine weeks in a row.   Rates for a 30 year fixed mortgage dropped to 5.10% , down from 5.14% for the previous week.  “Interest rates for 30-year fixed-rate mortgages fell for the ninth straight week and represented a third consecutive all-time record low since Freddie Mac’s survey began in April 1971,” Frank Nothaft, Freddie Mac’s chief economist stated.
Looking ahead to ’09 there will be tremendous opportunity for you, if you are prepared and willing to put in the effort necessary.
In January of 2008 the median price for a home in Riverside County (CA) was around $260,000 and interest rates were 6.5%. Now the median price is $220,000 and interest rates are at 5%. So what does that mean in dollars and cents?
Well someone looking at a median priced home in January of 2008 would have had a monthly payment (Principal and Interest) of appx. $1643/mo. In January of 2009 that payment would be $1181. That’s a decrease of 28%.
It would have taken more than $5000/mo income to qualify in January ’08 and now it would only take less than $3600/mo.
Of course taxes, insurance, HOA are in addition but bottom line is the ability to buy a home in Riverside County increased by 28%!
NOW WHO CAN’T GET EXCITED ABOUT THAT??

 

 

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