Happy New Year from everyone here at Bass Lake Realty!
A Reminder For You:
The Mortgage Protection Program is scheduled to expire December 31, 2009
C.A.R. H.A.F. Mortgage Protection Program
CHANGES TO THE MORTGAGE PROTECTION PROGRAM EFFECTIVE AUGUST 1, 2009
The Mortgage Protection Program no longer provides coverage in the event of accidental disability or a $10,000 death benefit. (Existing policies will not be affected). Program enhancements include a reduced work requirement (120 Days) that begins effective the close of escrow, so that home buyers can access the policy sooner in the event of job loss.
On April 2, 2009 the Housing Affordability Fund launched a new program designed to provide peace of mind to first-time buyers who are hesitant to enter the housing market due to concerns about potential job loss, and subsequently being unable to meet their monthly mortgage obligations.
Qualifying buyers can receive up to $1,500 a month for up to six months in the event of job loss, a qualified co-buyer can also receive a $750 benefit for up to six months to help pay the mortgage.
TO QUALIFY FOR THE MORTGAGE PROTECTION PROGRAM APPLICANTS MUST
- Be a first-time home buyer – someone who has not owned property in the last three years
- Open escrow April 2, 2009, or later, and close on or before December 31, 2009
(purchase agreement cannot be dated before April 2, 2009)
- Use a California REALTOR® in the transaction
- Purchase the property in California
- Be a W-2 employee (cannot be self-employed) Courtesy of California Association of Realtors
Contact us for a copy of the application or let us know if we can be of any further assistance,
Your Bass Lake Realty Team
The road to home ownership can be exhilarating, but also complicated. For any successful real estate transaction to occur, several vital steps must be executed, which may include choosing a REALTOR® who can help guide you through the process, to contacting a reputable lender to establish your borrowing power, to selecting a home, then closing escrow and preparing for the move into your new home!
Here’s a 10-step home buyer’s checklist to help you keep on track toward acquiring your new home:
- Select a REALTOR®: Choose a REALTOR® to assist you through the complex process of looking for the right home, conducting neighborhood research, analyzing home prices, negotiating with sellers, signing documents, and reviewing disclosure forms,among other things.
- Get an Education: You may want to find out what first-time buyer incentive programs are available through your city and county municipalities. Often these include financial assistance for those who complete home-buying educational courses, deferred loans, and other forms of support. Your REALTOR®can help you with this information.
- Paint Your Financial Picture: You may want to obtain a copy of your credit report and credit score and attempt to resolve any errors or other credit issues that might impact your ability to obtain the best loan and interest rate possible.
- Get Pre-approved: Make an appointment to meet with a qualified local mortgage lender to determine what price range you can afford and obtain a pre-approval letter, which demonstrates your buying power.
- Find a Home: Using the services, knowledge, and expertise of a REALTOR®, establish your priorities for size, location, and style, and start shopping for a home that fits your lifestyle, budget, and long-term goals.
- Make the Offer: When you find the home that’s right for you, work with your REALTOR® to write an offer and complete a purchase agreement, detailing all of the terms and conditions of the sale between you and the seller.
- Make a Deposit: When you write an offer, you will need to provide a “good-faith” deposit showing the seller your intent to buy the home.
- Get Financing: Once you’ve selected a home and you and the seller have agreed upon a price, choose a local lender who can help you obtain a loan that best suits your immediate and long-term needs. A local lender will be knowledgeable about the area where you intend to buy.
- Hire an Inspector: A home inspection is recommended in order to reveal potential safety or other issues with the home that you may want to address before completing your purchase transaction.
- Close the Deal: Wrapping up your purchase transaction may include meeting with your REALTOR® to conduct a final walk-through of the property, signing final documents, and getting the loan funded, among other things. Courtesy of California Association of Realtors
We hope you find this information useful!
Your Bass Lake Realty Team
Here’s some useful information regarding the role of your Realtor® courtesy of the California Association of Realtors.
WORKING WITH YOUR REALTOR Overview
Whether you are buying a home for the first time, or selling to move into a larger one, or downsizing, the complicated and, in some cases daunting issues surrounding today’s market underscore the importance of relying on the skills, knowledge and expertise of a REALTOR®.
Here are the top reasons for working with a REALTOR®:
Did you know that there are more than three dozen different disclosure forms that may be required for the completion of a residential real estate transaction in California? REALTORS® can help you wade through the cumbersome and often complicated paperwork that goes hand-in-hand with any real estate transaction, making sure the proper forms are filled out correctly and on time. This includes the crucial purchase agreement, which serves as the contract between a buyer and seller, and is used to formally identify a purchase price; list terms and conditions pertaining to the sale time frame, and other details, such as a written commitment by the seller to cover the costs of any necessary repairs.
As members of their local, state and national trade associations, REALTORS® can tap into the latest technologies serving the housing industry today. This includes Web sites and multiple listing services, as well as market reports detailing crucial data, such as pricing trends; time on the market; and historical sales activity in your neighborhood. In addition, a REALTOR®‘s broad market knowledge often makes them experts when it comes to providing a detailed snapshot of where to obtain information about your neighborhood’s amenities and services, such as schools, zoning laws, and tax codes.
Buying or selling a home calls for solid negotiating power. A REALTOR® can assist with the critical negotiations included in every real estate transaction, and help both buyers and sellers finalize the many details that comprise a final purchase agreement. If you are a buyer, your REALTOR® can work on your behalf with a seller to negotiate a sale price; set a date for escrow closing; and determine what, if any repairs you’d like the owner to complete as a part of the terms of the agreement, among other things. If you are a seller, your REALTOR®‘s role may include negotiating a sale price, such as so-called “buyer incentives” that help with a buyer’s closing costs or other expenses. Your REALTOR® also can help you determine what, if any repairs you may be responsible for, if requested by the buyer, and negotiate deadlines for their completion.
Your REALTOR® can assist with the coordination of the home-inspection process, and help to ensure that the seller’s responsibilities for addressing a buyer’s requirements are met. They also may help with the identification of qualified contractors to help perform needed repairs.
If you’re selling a home, a REALTOR® can save you time and money by tapping into market data and reports to help you determine a realistic selling price; screening potential buyers; and managing appointments for showings.
Closing the deal takes much more than a handshake. A REALTOR® can provide objective support during the closing process, ensuring both buyer and seller have received the proper documentation for successfully completing a sale transaction and coordinating a final property walk-through.
Whether you are a buyer or a seller, your REALTOR®‘s role as a valuable resource may not end when you sign the closing documents. In fact, many questions arise for buyers and sellers long after a real estate transaction has been completed, and your REALTOR® may be qualified and eager to assist you wherever possible – this includes help with future real estate transactions.
–With a designation
You’re ready: You’ve decided to seize the unique opportunities presented by the current housing market. The single most important transaction in your lifetime should not be conducted without the expertise and assistance of trained and licensed professionals, and this is where REALTORS® come in. Chances are you may buy or sell a home again. Developing a long-term relationship with a REALTOR® is the best way to ensure you will be well-armed and informed when making your housing decisions.
What’s Different About a REALTOR®
Working with a real estate professional who is a REALTOR® is in your best interest. Not everyone who sells real estate is a REALTOR®. Possessing a real estate license does not afford instant REALTOR® status–a distinction of which you need to be aware. A REALTOR® is a member of local, state and national professional trade associations and, as such, has access to a vast array of educational programs, research and resources. By being a member, a REALTOR® subscribes to a strict Code of Ethics, developed by the National Association of REALTORS®. REALTORS® pledge to provide fair treatment for all parties involved, protect the right of individuals to own property and keep abreast of changes in real estate practice through continuing education and interaction with other professionals.
REALTORS® also are committed to higher levels of education and professional development; many REALTORS® have earned professional designations or specialty certifications requiring intensive study. For example, REALTORS® who have obtained the Certified Buyer Representative and Certified Residential Specialist designations have been trained in all aspects of serving as buyers’ and sellers’ representatives in real estate transactions.
As a member of the CALIFORNIA ASSOCIATION OF REALTORS®, your REALTOR® can tap into numerous resources, like immediate access to full-time, staff real estate attorneys who can provide objective up-to-the-minute counsel. Your REALTOR® also receives up-to-date information on a wide variety of legal, financial and economic issues and has access to an association with more than 80 years of experience in real estate. And, if things don’t work out, your REALTOR® can offer arbitration as a choice instead of lengthy and expensive legal proceedings.
The CALIFORNIA ASSOCIATION OF REALTORS® has served as the unsurpassed proponent of integrity, professional standards and private property rights fortification within the real estate industry in California since 1905.
In addition to subscribing to the REALTOR® Code of Ethics and belonging to their local, state and national REALTOR® associations, some REALTORS® have undergone additional training to serve specific markets and client groups. If, for example, you’d like to work with a REALTOR® who is familiar with international transactions or a REALTOR® who works primarily with elderly clients, you might want to find REALTORS® who are designated as Certified International Property Specialists (CIPS) or Senior Real Estate Specialists (SRES), respectively.
The Right REALTOR® for You
Like finding the right house, selecting a REALTOR® you can trust and comfortably work with is paramount. Just as you wouldn’t be casual in the selection of your doctor or your attorney, you shouldn’t take the selection of your REALTOR® lightly. Indeed, the best way to find such a professional is through recommendations from family and friends. Of course, you should interview several REALTORS® before you choose one. If you’re selling your home, you should ask the candidates how they plan to market your home, what pricing advice they can offer, and what other suggestions they can provide to further enhance the desirability of your home. Whether you’re buying or selling, ask candidates about the transaction to evaluate their knowledge. Ask for–and check–references. And, finally, ask yourself whether you will feel comfortable working closely with this individual in the months ahead.
Courtesy of California Association of Realtors
Qualifying for a mortgage loan in today’s market may be tougher than it was just last year. Lenders have tightened underwriting requirements for the loan approval process and, in many instances, eliminated “stated income” and “no down payment” loans. Many borrowers took advantage of these so-called “subprime” loans over the last few years, but today are among those reported to be having trouble making their monthly mortgage payments.
Here’s what you need to know about obtaining a mortgage in today’s market:
Understand Interest Rates
Fortunately, interest rates are at their lowest levels in many years, hovering around 6 percent for a traditional 30-year, fixed rate mortgage; and about 5.55 percent for a one-year adjustable rate mortgage, or ARM. To put the numbers into perspective, interest rates are relatively close to where they were when the latest housing boom began in 2000. By contrast, they climbed as high as 9 percent during the last housing slow-down in the 1990s, and hit 12 percent in the 1980s.
Points are a form of pre-paid interest that you may be required to pay your lender upon the closing of your loan transaction, above your other fees and interest. There are either origination points, which cover your lender’s fees, or discount points, known as “buyback” points, which are paid in exchange for lowering your monthly interest rate. With either option, one point is equal to 1 percent of your loan amount. For example, one point on a loan for a median-priced home in California at $500,000 would equal $5,000. Points may sometimes be charged based on your credit worthiness and your debt-to-income ratio.
Getting pre-approved for a home loan will allow you to take a written letter of pre-approval from a lender as you shop around for your new home. The pre-approval letter may indicate to a seller that you are a serious buyer. When you go to a lender for pre-approval, you may be asked to produce income statements, and have your credit and debt information carefully scrutinized — be prepared, and collect all documents ahead of time to facilitate the process. When you are attempting to get pre-approved or apply for a mortgage, lenders will review your credit report, which provides a snapshot of your borrowing and repayment history, as well as any outstanding debt. A common credit score is also called a FICO score. (FICO stands for Fair Isaac Corp., the company that developed the scoring method.) FICO scores range from 300 to 850 points, (and are rated poor, to fair, to good, to excellent),depending on your debt load and repayment history A score closer to 850 or excellent will not only help you qualify for a loan more easily, but may lower your points and fees.
Understand Different Loans
FIXED-RATE LOAN: These loans are designed for those with solid credit histories, relatively low debt, and who plan to remain in their homes for several years. Fixed-rate loan payments are predictable and stable since the interest rate is set for the full length, or term, of the loan. Using an average fixed interest rate of 6 percent in November, a 30-year loan of $400,000, on a median-priced home at $500,000, with a down payment of 20 percent, will produce a monthly payment of $2,400.
ADJUSTABLE-RATE LOAN: Also known as an ARM loan, these are typically offered at a lower initial interest rate than traditional fixed-rate loans, and can lower your monthly payments for a specified time, which can range from a few months to a few years. Your interest rate, however, will adjust at the end of the specified time period and will readjust periodically thereafter. Depending on market conditions, the rate could be higher or lower than your initial rate. A 30-year loan of $400,000 on a median-priced home at $500,000, with a down payment of 20 percent, at an adjustable rate of 5.5 percent for the first 12 months, will produce an initial monthly payment of $2,270.
JUMBO LOAN: These loans are for buyers who need to borrow amounts greater than $417,000 for a single family home. Jumbo loans carry more risk and, in turn, often come with higher interest rates. A 30-year loan of $420,000 for a home priced at $525,000, with a down payment of 20 percent at a fixed interest rate of 6.7 percent, would produce a monthly payment of $2,710.00.
LOANS FOR FIRST-TIME BUYERS: There are several programs available that offer loan assistance options for first-time-home buyers. FHA-Insured Loans, for example, are insured by the federal government against default, and are designed to help qualified borrowers who can’t afford the down payment required by certain lenders. FHA loans provide up to approximately 97 percent financing,( meaning the buyer puts down 3 percent,) but you may be required to cover other costs, such as mortgage insurance premiums, and you’ll need to meet certain credit qualifications. VA Loans are guaranteed by the U.S. Dept. of Veterans Affairs, and offer low- to no-down payment options for qualified first-time buyers who can provide proof of military service. The minimum amount granted for a VA loan is $36,000, but this amount may be increased, depending on the borrower’s credit history. You may also want to check with your city government for referrals to local, state and federal programs that offer home buyers’ assistance for qualified buyers.
Courtesy of California Association of Realtors
Buying a home in today’s market may be challenging, particularly for those with credit problems or little saved to put toward a down payment. But there are many factors impacting the current housing market that make buying a home today a viable option. Here are five reasons for buying a home today:
- Interest rates on long-term, fixed, and adjustable mortgages are at historically low levels. The rate on a 30-year, fixed mortgage is hovering just below 6 percent, while, by comparison, interest rates were hitting 8 percent and higher during the last market downturn in the late 1990s, and were between 10 and 12 percent at the height of the last housing boom in the 1980s. Lower interest rates make it easier to qualify for a loan, and your monthly payments are more affordable.
- No one can put a price on the intrinsic value of home ownership. Home prices also reflect financial worth and, the good news is, across California the median sales price for a single-family home has been consistently rising for several decades. In short, housing remains a solid, long-term financial investment. While the pace of home appreciation has slowed over the last year, historical data suggest home prices will continue to appreciate over time. The projected median home price for a single-family home in California in 2008, for example, is $553,000. By comparison, the median price in 2000 was $241,350; $193,770 in 1990, and $99,550 in 1980. (source: C.A.R.)
- The length of time a home remains on the market before it is sold has increased from roughly two weeks in 2004 to between eight and nine weeks in 2007. According to the unsold inventory index provided by the CALIFORNIA ASSOCIATION OF REALTORS®, it would take 16.3 months to sell all the homes on the market at the current sales pace, compared with 6.4 months in 2006. With more homes on the market for longer periods of time, you have more choices when it comes to selecting a home today.
- The multiple-offer frenzy that dominated the latest housing boom has subsided, and there is less pressure on today’s home buyers to outbid one another. REALTORS® in California reported that in 2007 only 28 percent of homes sold had multiple offers, compared with 57 percent in 2004. (source: C.A.R.)
- The credit industry crisis that has made securing a home loan difficult for many has led to heightened scrutiny of mortgage lenders. As a result, state and federal agencies have created protections for home buyers that were not in place a year ago. The U.S. Federal Reserve, for example, has proposed a plan to require lenders to confirm a borrower’s ability to afford a mortgage before making a loan and establishing guidelines for explaining sub prime loan terms in order to better educate buyers. Many new public education and awareness campaigns, such as Freddie Mac’s “Don’t Borrow Trouble®” campaign, have been developed to help you achieve the dream of home ownership without the financial risks that led so many borrowers into trouble in recent years.
Courtesy of California Association of Realtors