Rent or Buy?

I was reading the June/July Home Edition of Real Estate magazine, a California Association of Realtors (CAR) publication and found this article too good not to share. Entitled " Ask Yourself: Rent or Buy," the writer, Paula Hess, did a good job explaining that declining home prices has made the difference between renting vs owning, very significant. As compared to years past when home prices almost reached the sky and mortgage interest rates were high, now more than ever, the combination of low housing rates and prices has made it more appealing to buy, than rent.

Ms. Hess went further as to give a visual sample of savings on housing costs, as well as the tax benefits of home ownership, where property tax and mortgage interest rates are deductible. Surely, this presentation of savings should be able to tap on any renter's interest on owning right now while the market is favoring buyers.

If the mortgage on a property is lower than the monthly rent you are currently paying, a valid question to ask is, " Why not own right now?" Doesn’t it make sense to save and take pride in home ownership at the same time? So, if you are a renter, do ask yourself, buy or rent? I hope this article will start to let you seek the topic of home ownership further.

For a digital copy of this article, click on:

http://www.onlinedigitalpubs.com/publication/?i=40408&p=35

Happy reading!

Do It Yourself Home Loan Modification Tips

July 23-25 Asian Journal Weekend Edition

I get inquiries from homeowners who are thinking of doing home loan modifications themselves; some of them have already contacted their lenders, some are still thinking about it but are scared, while some are so dismayed with the long process and just abandoned the application altogether. For those homeowners who have braved it and took the chance, am sure it took a lot of sweat and second thoughts before you sat down and said, “ I will call my lender today.” If you did and you are currently waiting for a representative to return your call, great job! Whatever the outcome is, you would not know if you did not persist.

By now, you must have read up on Making Home Affordable Program, the government’s initiative to help challenged homeowners modify their existing loans. Your decision to undertake your own loan modification or seek the services of a qualified professional, will depend on your personal circumstance and beliefs. If you choose to do it yourself, there are general approaches to the loan modification process that you ought to be familiar with, even before you make that first contact. Here are some tips:

Tip # 1: Treat the phone call to your lender as if you are doing business and you are poised to be awarded a contract. Do not call while you are on errands! Find a quiet time to call. The phone number on your mortgage statement is a good place to start. However, when you call for the first time, you do not need to tell the first person you talk to, your life’s story. Ask to be connected directly to ‘ loss mitigation’, or, ‘ pre-foreclosure’, or whatever department is handling requests for loan modification for that lender. Tell the Level 1 customer service rep that you are looking to modify your loan. Be sure to ask for the direct number to that department, and yes, WRITE IT DOWN! Have a pencil and paper ready, because you will need to make note of the contact information of the person you will talk to in that particular department (loan modification). While you are at it and you are now talking to the correct person, ask for his/her supervisor’s name and contact information. This will come in handy in case the representative who is assisting you has fallen deaf to your calls and emails. You may not be lucky to obtain this, but, try.

Tip # 2: Document preparation is key. Before you make that call, collect all pertinent documentation and be ready to answer questions on the following:

1. Mortgage loan statement- including mortgage balance, monthly payment, current interest rate, second lienholders, any delinquent payments, & amount of delinquency; know the terms of your loan- is it fixed or adjusting, is there a balloon payment & a pre-payment penalty, are you paying interest only, etc etc.
2. Income & Asset information - paystubs, W2s, 1099s, tax returns, pension & benefits statement, retirement statements, benefit & award letters
3. Information on Subject Property – primary vs investment property, current value, purchase price, equity amount if any, sold comparables, listing history ( if currently listed in the market)
4. Financial Profile- recurring expenses, any hardship ( unemployment, pay cut, furlough), available assets

If your mortgage payment is more than 31% of your current income, the counselor will ask you the following: a) is the property ‘ owner occupied’ 1 to 4 units? b) is the loan amount less than $ 729,750? c) is there a change in income and expense that has made the mortgage payment unaffordable?

If the above questions are all positive, then the loan counselor may qualify you for a trial modification and send you paperwork to fill up.

Tip # 3: Be persistent but patient! You may be placed on long periods on hold, remember that these loan counselors deal with hundreds of challenged homeowners like you everyday. They could get grumpy and tired and could be rude at times. Do not lose your cool, but be diplomatic.

Any homeowner facing difficulty with mortgage payment is encouraged to apply for a loan modification. Though there are standard guidelines outlined thru Making Home Affordable, practices and implementation will differ from lender to lender. Not all lenders are participating in this streamlined effort, so, be ready if help is not extended. There are foreclosure alternatives available if home retention through loan modification cannot be realized.

If you need worksheets to help you simplify the documentation, contact me via email so I could send you copies of a Financial Information Worksheet. It is wise to have all these worksheets in front of you while speaking to a loan counselor.

Useful Websites for Homebuyers

July 16-18 2010 Asian Journal Weekend Edition
Realty Connect
By Jo Ann Israel

The internet has obviously become the number one resource for any homebuyer who is looking to purchase a property either for the first time, or moving up for better housing opportunities. As a professional realtor, I also do research in order to provide my clients quality information and be able to direct them to useful sites that will eventually help them decide where to purchase (location), how much home they can afford( mortgage prequalification), etc.

Doing your own research and identifying priorities are important in the homebuying process. Trimming down the list of ‘must haves from those nice to have but can be sacrificed’ will eventually help you narrow down your choices of homes to choose from. At the end of it all, where you buy and what you buy will depend on what you value most. Let me share with you some useful websites that can help you trim down that list.

www.Realtor.com - ranks # 1 when you type in ‘ real estate’ in Google. As the official website of NAR ( National Association of Realtors), this is the place to browse thru active and current listings of properties in your search area. Sign up for BUYER ASSIST- as you do so, the freshest and newest listings will be delivered to your inbox, according to your search requirements, for free. Save precious time!

www.Walkscore.com - this site has become the ‘walker’s homebuying guide.’ The site enables users to enter an address, calculate from that address the distance to amenities like restaurants, grocery stores, movie theatres & public transportation. Today, walkable neighborhoods are not only situated in city centers, new developments are organized around main streets with stores and restaurants, & the town center being just a couple of blocks away. If you cannot compromise walkability, this site will help you trim down your search area.

www.Meganslaw.ca.gov - this site lists all registered sex offenders by name, ZIP code, with detailed personal profile on each registrant. Megan’s Law Database Disclosure is now part of a real estate transaction and buyers are advised by sellers & brokers to check this website during the buyer’s inspection contingency period. It is wise to check this site early on as a guide for your selection of a city/area.

www.Zillow.com - boasts of its Zestimate, which pulls public data to determine the square footage of a property, number of beds & baths, lot size, year built. The website then integrates these information to determine the Zestimate of a property in a particular area. The site, however, is limited to what it can pull out of public records, it will not be able to compute additional value for extra features like an added patio with permit, or upgraded doors and windows. In the same way for buyers, zillow.com can show you the estimate price range of properties in your target zip code. This working knowledge of price range can help you narrow down your zip codes based on affordability, especially when you have already obtained a prequalification and you have determined your maximum loan amount.

www.Bankrate.com – If you don’t own a mortgage calculator, this website will calculate for principal and interest payable monthly. Just enter a purchase price, interest rate and mortgage term in years. Bankrate.com is also a good place to look at daily prevailing interest rates not only for home loans but for auto loans, credit cards etc.

Homebuying can be a satisfying and an enjoyable experience, if you know exactly what you want, need and can live with. Make use of the information online. Given the maximum loan amount you will qualify for & your monthly desired mortgage payment, be open to possibilities but be decisive on your priorities.

Engage the services of a professional Realtor, who will represent you solely. The services of a buyer’s agent is free and would not cost you a penny. Complement what you have come to know about homebuying with the actual and hands-on expertise of a Realtor who will guide you every step of the way.