How Much House Can I Afford?
Well that depends…. how are you planning on purchasing your home? Do you have cash? Are you planning on getting a loan; if so, have you received a pre-qualification letter from your lender yet? Once you establish the way you will be funding the purchase of your home then we can figure out which steps you will need to complete to accomplish this.
Cash is pretty self explanatory. Lets talk about financing a bit. A serious buyer, in need of a loan to purchase a home will need to contact their lender for a pre-qualification letter. This is most often wanted, to be included in your offer package, when submitting to the banks in a short sale, reo and even Sellers in a regular sale. If you are in need of a lender remember, to make things easier on you, Prudential San Bruno, has a really good Mortage Company relationship that works in house , Guarantee Mortgage 650.589.1000. What else can I say but they are nothing less than awesome!
Actually getting a pre-approval often times can speed the home buying process up. Your lender will need to evaluate your debt to income ratio in order to establish how much house you can actually afford. Read more
What Do I Get When I Buy A House?
Well that’s a pretty loaded question. I think it depends on why you are buying. Lets break it up into pieces.
Are you investing or is this home going to be your primary residence?
If you are looking at purchasing a home for investment purposes, it’s probably a good idea to make sure it has a good return on it. Also… you want to make sure with the rent you are not only able to pay the mortgage (be sure to check if your property taxes are included in your mortgage payments). You will also want to make sure that the amount of rent you charge is comparable to the area and to your mortgage payments. Ideally you would like enough rent to cover the mortgage, property taxes, and maintenance. In the perfect world you would like your tenant to pay enough rent yet the rent be atractive enough to keep them as long term tenants to relieve as many out of pocket expenses for you. Inevitably there will be some sort of repairs or maintenance that will be your responsibility as the owner to remedy some of which you can write off 
Read more
Loan Modifications – They Can Be Done! Lots of Patience Required!
I haven’t blogged in a long time, partially because I’ve been super busy with work, but also because I’ve been so wrapped up and worried about a loan modification that I had been trying to get on my house since 2008. Yes… I said 2008!
This has been one of the most frustrating and stressful experiences of my life. As mentioned, I started talking with the bank in late 2008. Around July of 2009, they told me that I had qualified for a certain type of loan modification. They gave me my new payment amount and I started paying that amount. I paid them faithfully every month thereafter. I was concerned, however, because I never received any formal paperwork and, because real estate is my job, I knew something had to be wrong. I called them constantly and they kept telling me there was no problem, everything was “in process.”
I believe it was in January this year that I returned home to find a letter from the bank in my mailbox. The letter indicated that I was in default and that if I didn’t pay them $35,000 by a certain (very near) date, they would start foreclosure proceedings. Needless to say, I freaked out. Read more
The Costs are Outweighing the Benefits
We’ve stated that the benefits of low interest rates have run their course. We hold to our contrary opinion that low rates are actually hindering more than helping markets these days. Consider the mortgage market: Even though mortgage rates are dwelling in the basement, fewer people are applying for mortgages. The MBA reported that purchase activity declined 1.2 percent to the second-lowest level since 1997 last week, while refinancing activity slid 7.3 percent from its May 2009 highs.
The Federal Reserve’s low-rate policy is hardly inspiring confidence. “Rates must be low because the economy is circling the drain,” so the man-on-the-street rationale goes. It’s the wrong message to send, because promoting risk aversion also means promoting inertia. Risk-averse markets are simply less willing to engage in riskier, but worthwhile, economic activity.
This risk-averse sentiment is readily reflected in the capital markets, where the relatively non-productive assets of gold and Treasury securities continue to be the investments of choice. That’s unfortunate, because we’d all be better off if there were more investment in the very productive (though riskier) assets of home purchases and renovation and mortgage lending.
The Post-Credit Era
We’ve been saying for the past month or so that we’re not particularly worried about the end of the federal homebuyers tax credits. We also weren’t particularly concerned when the Federal Reserve said it would cease purchasing mortgage-backed securities. After all, the only way to discover if a market is truly healthy and viable is to stop subsidizing it.
It’s still early to render a verdict, but so far so good. People recognize that the combination of low rates and lower home prices represent a great opportunity, while many shoppers who failed to find a home to qualify for the tax credit remain undeterred and, just as important, rational – understanding the go-go days of the early 2000s are over. And that’s a good thing. The market of that era was driven more by speculation and less by fundamentals. And though it was highly remunerative for many of us, we see how it turned out.
In housing, slow and steady wins the race, which is why we continue to advise our clients that today’s market offers good fundamentally sound deals that can be financed at good economically advantageous interest rates. Sounds like a win-win deal to us.
A Look at the Past and a Look at the Future
This time last year we predicted that 2009 would end a lot better than it began. We were right, though it wasn’t a great accomplishment to be right considering how low the housing market, stock market, and overall economy had sunk during the latter half of 2008. As we’ve stated repeatedly over the past year, a low base and a dour outlook provide an excellent buying opportunity, so we weren’t surprised when buyers stepped forward to exploit the opportunities.
Looking ahead to 2010, we see continued improvement in home sales and home prices. In fact, we wouldn’t be surprised if the market turns to a sellers’ market from a buyers’ market by year’s end. We are almost certain that will be the case if we see a two to three percentage point drop in the unemployment rate. Low mortgage rates and income tax credits are contributing factors in stabilizing the market, to be sure, but no factor is more important than employment in not only maintaining stability but stimulating activity. Read more
It’s Still My House!! Well….
This is the place you’ve rested your head, had numerous family gatherings and lovingly taken care of for years. You’ve decided to put your home on the market and while you understand this will involve some inconvenience, the buyers will understand this is still my home, right? Well, while this is technically true, the sooner you make the transition to thinking of your home as a product to sell, the better off you will be. Read more
Doing the Right Thing…
As most of our readers know, our Prudential office has kiosks at Serramonte and Tanforan Malls. Many of us agents do regular shifts at the kiosk each month in the hope that we will meet buyers and sellers.
Recently I was covering the night shift, which goes from 6:00 p.m. – 9:00 p.m. It was very quiet that night, but at one point, a very young man stopped by the booth and said he was thinking about selling a house he owns in South San Francisco. I would, normally, be very excited by this (leaping up and down with glee, actually!) Unfortunately, the more we talked, the more I realized that he shouldn’t sell this house.
It seems that he inherited it from his Grandmother and owns it free and clear. He’s still going to college and living in the house. And, while he isn’t thinking about it now, someday he’ll probably have a family and want a house. If he sells it now, the money will be gone and he will be back to struggling like everyone else to afford a home. Read more
-
Join us on Facebook
-
Join us on Twitter
-
Recent Posts
- What is a reverse mortgage?
- ‘Tis the Season for Tax Breaks
- Top 5 Reasons to Buy a House in the Bay Area in 2012
- After Christmas Sale, – Bay Area Homes up to 60% off
- San Bruno Eye Sore is about to Go
- What If My Offer Is Rejected?
- It’s a Buyers’ Market for Real Estate Investors, too
- How to choose the “Best” real estate home loan.
-
Categories
-
Archives
