Homeowners Insurance

Owning a private home in a residential community subjects you to pay the Homeowners Insurance (HOI). For some homeowners, they see it as an added expense on top of the recurring mortgage they have to pay in the next 10 to 20 years. It can be devastating as some communities require all homeowners to pay the HOI. But despite the extra expense, this type of insurance is proven to be beneficial.  Let me explain.

What is Homeowners Insurance?

Homeowners Insurance is a type of insurance that is used to protect the homeowner’s property from various damages. There are also cases that homeowners’ insurance policies offer liability coverage against damages or injuries on the property. Generally, there are different forms of standardized homeowners insurance that can be chosen which will also depend on the needs of the homeowner. The following are types of HOI standardized by the Insurance Service Office

HO1 – Basic Form Homeowner Policy

HO2 – Broad Form Homeowner Policy

HO3 – Special Form Homeowner Policy

HO4 – Renter’s Insurance

HO5 – Premier Homeowner Policy

HO6 – Condominium Policy

HO8 – Older Houses

Read the complete description of each policy here.

Who needs it?

Whether you own or rent a home, condo, or apartment, you will need to have homeowners insurance. Indeed, you are not legally required to have homeowners insurance; however, it is one of the requirements when applying for a mortgage. It satisfies lenders. Almost all lenders are requiring borrowers to secure satisfactory insurance before they consider borrowers from qualifying for a loan.

In an insurance, there are policies that a home owner can choose from aside from the basic ones. The basic policies usually cover damages or accidents caused by fire, hurricane, vandalism, or lighting. Some other policies might cover damages due to theft too. To determine the policies that are applicable to you, an insurance agent or specialist can do the inspection beforehand.

The cost of the insurance will usually depend on:

1. Building costs
2. Crime rate in the neighbourhood
3. Heating, electrical system,  and plumbing condition
4. Materials and style layouts used for the home construction
5. The probability rate of accidents or damages from hurricanes, flood,  and hail storms

One common issue of homeowners is the disaster brought about by flooding. Standard policies for most insurance do not cover damages caused by flood. You have the option to add it from the standard policy. You can get it directly from your insurance agent.

In times of disaster or accidents, an uninsured homeowner may end up losing his or her home. You cannot just risk your largest asset because of the high premium costs of insurances. One common and easiest way to lower your premium costs is by increasing the amount of money you have to spend to cover the damage/loss before the insurance company starts the responsibility to pay the claim which is also known as deductible.

Insurance is not an option for homeowners, rather a necessity. At first, an insurance maybe an intangible product but it is actually one of the best things that you can have

Mortgage Rate Continue Upward Trend

Freddie Mac recently released the results of its Primary Mortgage Market Survey(R) (PMMS®), showing fixed mortgage rates trending higher for the third consecutive week and putting pressure on refinance momentum. Regardless, mortgage rates remain low helping to keep home-buyer affordability high, which should further aid home sales and construction in coming weeks.

The survey showed that the 30-year fixed-rate mortgage (FRM) averaged 3.59 percent with an average 0.7 point for the week ending May 23, 2013, up from last week when it averaged 3.51 percent. Last year at this time, the 30-year FRM averaged 3.78 percent.

Additionally, the 15-year FRM this week averaged 2.77 percent with an average 0.7 point, up from last week when it averaged 2.69 percent. A year ago at this time, the 15-year FRM averaged 3.04 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.63 percent this week with an average 0.5 point, up from last week when it averaged 2.62 percent. A year ago, the 5-year ARM averaged 2.83 percent.

The 1-year Treasury-indexed ARM averaged 2.55 percent this week with an average 0.4 point, the same as last week. At this time last year, the 1-year ARM averaged 2.75 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for the Regional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

“Fixed-rates moved up for the third consecutive week, with the average 30-year fixed-rate mortgage about a quarter-percentage point higher than three weeks ago,” says Frank Nothaft, vice president and chief economist, Freddie Mac. “While this may slow some of the refinance momentum, rates are nonetheless low and home-buyer affordability high, which should further aid home sales and construction in coming weeks. For instance, in April, single family housing permits rose to the strongest pace since May 2008 while existing home sales for the same month grew the most since November 2009. Moreover, the National Association of REALTORS® reported that the median number of days on the market for these sales fell from 62 to 46 days, the fewest since it began collecting the data in May 2011.”

For more information, visit www.FreddieMac.com.

The Cutting Edge Your Listing Needs

Video, is the new & modern way to show off your property. It allows buyers to see your listing without actually going to a showing. YouTube has exploded on a global scale, people around the world can now search for homes through the internet and can view homes and go through a virtual walk-through without ever setting foot on the property. This saves sellers & buyers time and money. Buyers can decide on the spot whether the home is right for them without even contacting the seller or agent. Companies such as Captivate video Tours, and other virtual tour companies create high quality video of homes, which is perfect for the real estate industry. These companies also include community tours, house tours, digital business cards, and much more.

“Video is by far the most captivating form of media that we have available,” says Stintzi, owner of Captivate Video Tours. “It’s penetrated every level of marketing and advertising. The proof is all over the place. Agents who make video a priority in their marketing platform sell homes faster than agents who don’t. It makes a huge difference online for websites and social media outfits.

According to NAR, in 2011, more than 70 percent of people listing their homes preferred to list with a REALTOR® who offered video as part of their marketing plan as opposed to one who didn't. Buyers, on the other hand, are 50 times more likely to view a video online than read text on the same subject.
“Simply put: Consumers want video. Whether they’re buying or selling, they want it,” says Steve Ewing, owner of The Digital Agent and Stintzi’s partner. “These consumer trends directly translate to winning more listings, driving sales, and gaining even more exposure online for your listings and brand.”

“Video tours have been touted as real estate’s next big thing for years now, but have been made largely inaccessible due to budget and time constraints. Projects were simply too expensive or the time allotted to complete them put the option out of reach,” says Stintzi. “Video is unique because it establishes an emotional contact point between your consumers, your brand and your product,” says Stintzi. “We like to be creative and work with a variety of people, but our main focus is on the real estate industry. That’s where we see
the biggest needs.”

Virtual tours work great especially if you have a buyer, but they are unsure about the property. Maybe their spouse couldn't make it to the showing, or they want other family members to check out the property. All you do is send them the link to the virtual tour, and they can view the entire house. Or what about buyers from out of state or even out of the country, they get a full private walk through in the comfort of there own homes.

Here are some tips for an effective Virtual Tour:

• Make sure you chose a company that makes quality videos- view samples, read reviews. Look for things like how fast the slides move between shots, blurry photos, etc.
• Talk to your Realtor and see if they do this type of Marketing, if not maybe you need to think about finding a Realtor that is more creative and up-to date in marketing.
• Decide if you want a Virtual tour made up of still shots, or an actual continuous video.
• Stage the home, or make sure everything is clean & arranged perfectly. No animals or other people in the shots. Take off anything personal from the fridge, make sure the pool sparkling, the beds are made,etc.. Before shooting, go through a walk-thru of the home, so the photographer knows exactly what to capture.
• Timing- Shoot the pool & outdoor areas in the evening where the lighting will be perfect. Save the inside of the home for the day where it is bright and clear.
• Create your own website for the property, featuring the virtual tour

How Landscaping Can Impact Home Values

The Inman Team wishes you a wonderful Memorial Day Weekend!

The Appraisal Institute recently advised homeowners to properly maintain their landscaping, which can significantly affect property values.

“If a landscaping change is positive, it can often enhance price and reduce a home’s time on the market,” says Appraisal Institute President Richard L. Borges II, MAI, SRA. “But if the change is negative, it can lower the price and lengthen the time a home remains for sale.”

Curb appeal is essential when selling a home, Borges says, noting it’s the homeowner’s opportunity to make a great first impression. A home with lackluster landscaping or an exterior in desperate need of a fresh coat of paint will likely be unappealing to prospective buyers and ultimately could affect the home’s potential resale value, he said. Landscaping is typically associated with lawns, trees, bushes and flowers. But other items also can be considered part of landscaping, such as fire pits, decks, patios, waterfalls, swimming pools and outdoor lighting … all of which could add to the value of the home. Borges adds that homeowners should trim growth regularly, replant approximately every 5 to 10 years depending on growth and not “overwhelm” the house. He also advised that homeowners check out what their neighbors have done and keep landscaping maintenance and improvements on par with neighborhood norms. According to the International Association of Certified Home Inspectors, trees that are too close to buildings may be fire hazards. Additionally, larger tree root systems that extend underneath a house can cause foundation uplift and can leech water from the soil beneath foundations, causing the structures to settle and sink unevenly.
According to a recent study conducted by Lawn & Landscape magazine, about two-thirds of homeowners say they’ll get less than 60 percent of their landscaping investment back when they sell the home.

“Landscaping improvements could make an impact on resale value, and homeowners need
to consider how long they’ll be in the home and whether to make short-term updates or plan
for the long haul,” Borges says. Borges says homeowners should ask themselves the following questions when it comes to the quality of their home’s green space:
• Is the landscaping attractive enough to make the prospective buyer walk through the
front door? Keep the design contemporary and in line with comparable properties in the
area.
• Could the landscaping provide cost savings? Landscaping that requires little or no
water to maintain could be desirable depending on the geographic area.
• Is the landscaping energy-efficient for the home overall? For example, it’s a good idea
to plant trees in a place where they block the sun in locations with year-round hot
climates.
• the trees planted at a safe distance from the home and are they healthy and well
maintained? Weak, old or damaged trees planted too close to a home or building could
pose dangers to the home’s structure and will need to be removed. Consumers should
also be sure that mulching or beds don’t get too close to wood around foundations to
avoid wood-destroying organisms.

For more information, visit www.appraisalinstitute.org.

Add Value to your Home with the Latest Home Trends

Remodeling Projects for Big Value:

Following are some easy to do remodeling projects that will add big value to your home.

• Accentuate the Architecture:

The easiest way to draw eyes to existing furnishings is to use simple moldings or trim to draw attention, for example, a stunning view from the window or a high ceiling. Furthermore, you can also use beaded boards to add timeless and breathtaking appeal. On the other hand, you can get an elegant traditional look by dressing a ceiling light fixture with a beautiful medallion.

• Install a Bay window:

If you replace a normal window with a bay or bow window, you will let more natural light in your house rather than regular one, it will make feel room look larger and will create a stunning focal point. Furthermore, to draw attention to the new window and add a bit of functionality to the surroundings, consider using a built in window chair that will be an architectural attraction for buyers and a cosy reading spot for you.

• Refinish Wood Floors:

Refinishing worn out wood floors is a convenient method to rejuvenate your home and increase its value. You just need to be prepared for facing few days of dust. Similarly it is a better option to completely replace the floor if it is extremely worn out or stained. In this regard, a great idea is to splurge on wide plank hardwood floors in foyers and living room and then repeating it in the bedrooms.

• Revitalize Staircases and Foyers:

Foyers are the first part of your house that a potential buyer will come across and it is your only chance to make a strong first impression. You need to make it welcome the guest in terrific style. If complete replacement is impossible, consider using sprucing items such as splurging the entryway or improving staircases. Repaint risers and sand and re-stain treads. Furthermore, hanging elegant decorative items on the stair and foyers walls such as photo on canvas will also spice up the area.

• Make Good Use of Wasted Place:

You can transform a plan wall into a big storage area and can also display the showcase by adding open shelves by cutting a dry wall to create a recessed niche. Furthermore, you can also add a display shelf above the kitchen window and cup hooks below upper cabinets. Remember that storage is one of the most important element potential buyers consider before making final decision.

• Add a Fireplace:

The ambiance created by a fireplace cannot be rivaled by anything else. It creates a sensational focal point for the room in addition with adding warmth and beauty. You need to dress up the firewall with tasteful wood mental and a delightful surround, for instance, by hanging a beautiful artwork such as split canvas prints above the mantel.

Builder Confidence Improves in May

Builder confidence in the market for newly built, single-family homes improved three points to a 44 reading on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for May, released recently. This gain, from a downward revised 41 in April, reflected improvement in all three index components – current sales conditions, sales expectations and traffic of prospective buyers.

“Builders are noting an increased sense of urgency among potential buyers as a result of thinning inventories of homes for sale, continuing affordable mortgage rates and strengthening local economies,” notes National Association of Home Builders (NAHB) Chairman Rick Judson, a home builder from Charlotte, N.C. “This is definitely an encouraging sign even amidst rising challenges with regard to the cost and availability of building materials, lots and labor.”

“While industry supply chains will take time to re-establish themselves following recession-related cutbacks, builders’ views of current sales conditions have improved and expectations for the future remain quite strong as consumers head back to the market in force,” says NAHB Chief Economist David Crowe.

Derived from a monthly survey that NAHB has been conducting for 25 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three HMI components posted gains in May. The index gauging current sales conditions increased four points to 48, while the index gauging expectations for future sales edged up a single point to 53 – its highest level since February of 2007. The index gauging traffic of prospective buyers gained three points to 33.

Looking at the three-month moving averages for regional HMI scores, no movement was recorded in the Northeast, Midwest or South, which held unchanged at 37, 45 and 42, respectively. Only the West recorded a decline, of six points to 49 in May.

For more information, visit www.nahb.org 

FNC Index: U.S. Home Prices Up 0.4 Percent in March

The latest FNC Residential Price Index™ (RPI) shows the U.S. housing market continued to recover, recording in March the 13th consecutive price increase. In recent months, the ongoing housing recovery has maintained its pace with steady and persistent gains in home prices despite signs of continued job market weakness and soft economic growth.

Low interest rates continue to be a key driver of rising housing demand. The market is also gaining momentum on signs of improved credit and more availability of leverage as mortgage lenders continue to experience rising profits. Foreclosure inventory continues to drop, with distressed sales contributing only 18 percent to total home sales, down from 24.5% a year ago.

Based on recorded sales of non-distressed properties (existing and new homes) in the 100 largest metropolitan areas, the FNC 100-MSA composite index shows that March home prices rose 0.4 percent from the previous month, and were up 5.5 percent from a year ago. On a quarterly basis, home prices rose 0.7 percent during the first quarter. When compared to the same quarter in 2012, the quarterly price gain was 5.7 percent. The two narrower composite indices (30-MSA and 10-MSA composites) show similar month-over-month increases but faster year-over-year accelerations at 6.7 percent and 7.4 percent, respectively.

FNC’s RPI is the mortgage industry’s first hedonic price index built on a comprehensive database that blends public records of residential sales prices with real-time appraisals of property and neighborhood attributes. As a gauge of underlying home values, the RPI excludes sales of foreclosed homes, which are frequently sold with large price discounts reflecting poor property conditions.
Twenty-two of the component markets tracked by the FNC 30-MSA composite index show higher prices in March. Most notably, home prices in Phoenix continue to accelerate rapidly even after rising at a rate of 2.1 percent per month for 13 straight months. The city’s foreclosure activities have dropped rapidly, with foreclosure sales accounting for only 11.2 percent of total home sales–the lowest since 2007.
Amid widening signs of a sustained housing recovery, a number of the nation’s major housing markets continue to show lagging performance. Among them, Chicago, Baltimore, St. Louis, Cleveland, and San Antonio experienced only a small price gain in the last 12 months. On a quarterly basis, home prices weakened between Q4 2012 and Q1 2013 in Chicago, Portland, Baltimore, Minneapolis, Houston, and St. Louis, despite that these market all seem to have turned the corner toward recovery.

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Realtor.com's April Report Shows Boost in Market

Realtor.com®, a leader in online real estate operated by Move, Inc., released its April data showing that the U.S. housing market is on its way to a broad-based recovery, an accelerated trend since March. The home-buying season shifted into high gear last month as inventory and home list prices on realtor.com® increased by 4.12 percent and 2.63 percent, month over month, respectively. As of April, homes are on the market 
nationwide approximately 81 days—a decrease of nearly 11 percent since April 2012—highlighting that while new homes are entering the market they are not available for long.

“Due to increased demand for homes and more confidence in the job market—we are beginning to see more and more buyers entering the housing market,” says Steve Berkowitz, chief executive officer of Move. “Home buying season is off to a strong start, as buyers capitalize on moderate housing prices and snatch up homes quickly. In some markets, we are seeing homes staying on the market for only a few weeks.”

Despite the increase in inventory month over month, nationwide inventory declined year over year in all but 11 of the 146 markets realtor.com® monitors. Approximately 36 markets registered a decrease of listings by 20 percent or more, still highlighting near records lows of available homes.

Approximately 37 markets experienced a decline in list price since last year, a figure that has been improving throughout the home buying season. The number of markets throughout the nation experiencing a steady or slight decline in median list prices is decreasing throughout the home buying season, another positive signal for the overall housing market recovery. In April, median list prices increased in 109 markets.

National Data

- In April, the total number of single-family homes, condos, townhomes and co-ops for sale in the U.S. (1,750,839) increased by 4.12 percent month-over-month. On an annual basis, however, inventory decreased by 13.54 percent.

- The national median list price for single-family homes, condos, townhomes and co-ops ($194,900) increased by 2.63 percent vs. March, and 3.12 percent since April last year.

- The median age of inventory of for sale listings (81) fell by nearly 11 percent in comparison to April last year.

Local Data

- Only seven markets throughout the nation experienced a one percent or greater year on year increase in housing inventory since April 2012. The Shreveport-Bossier City, LA market lead the pack with an increase of inventory of 19.16 percent since April last year.

- California continues to dominate the top 10 list of markets with the largest increase in median list price throughout the nation—only two regions in the list fall outside of California. These markets were hit the strongest by the housing crisis and are showing a great rebound as the housing recovery picks up steam. Oakland experienced the largest year over year increase in list price at 46.94 percent. The Santa Barbara-Santa Maria-Lompoc, Calif. market followed at 44.81 percent. Sacramento, Calif.; San Jose, CA; Los Angeles-Long Beach, Calif.; Orange County, Calif.; Detroit, Mich.; Ventura, Calif.; Fresno, Calif.; and Phoenix-Mesa, Ariz. rounded out the top markets with the largest increases in list prices in the nation.

Housing is in Bloom

The nation's housing sector is buzzing like bees in springtime. And indeed, housing has historically boosted the U.S. Gross Domestic Product (GDP) and job creation, which are key stimulators and indicators of economic health. 

When GDP is referenced in news media, it means the total goods and services produced by labor and property in the U.S. This figure is measured quarterly, and recent figures show that GDP increased impressively at 3.1 percent in the 1st quarter of 2013, up from 0.4 percent in the last quarter of 2012. 

Sales of previously-owned houses increased three straight months in March, rising 0.4 percent to a 5 million annualized rate, its highest level since late 2009, then took a small dip in late April by 0.6 percent to 4.92 million units. During this time, new home sales maintained an upward climb by 1.5 percent within expectations to 416,000. Analysts say housing could provide tailwinds strong enough to realize the improvement to the labor market for which the folks at the Fed are hoping. The Fed (which sets the U.S. monetary policy by monitoring national employment, prices and interest rates) recently noted that inflation also remains in check. 

Homebuilders across the nation have contributed to the increase in Housing Starts, up a whopping 47 percent over the same period last year. At their highest since June 2008, Housing Starts spiked by 7 percent this March to 1.036 million units on an annualized basis, well above the 930,000 expected, though they did decline in April. Gains in home prices and construction will put more Americans to work this year, and that's good news overall for the health of the U.S. economy.

5 Housing Trends for Spring 2013

The game is changing in the real estate market, and things are looking good for everyone. Low mortgage rates and home prices gaining momentum, and the amount of buyers is supposed to increase this Spring.

This Spring expect to see these housing trends:

1. Fewer options, Higher prices & Bidding Wars
Expect some competition this coming Spring, demand from home buyers is growing faster than the supply of homes for sale, according to the National Association of Realtors. Expect to see multiple offers on the table which means bidding wars. In February there were 1.94 million homes for sale nationwide. That represents a supply of 4.7 months at that months pace. A balanced market requires about 6 months of supply. During the same period last year there was a supply of 6.4 months.

2. Loan Modifications Made Easier- for most
Homeowners behind on their mortgage payments may get the opportunity to reduce their monthly payments. The Federal Housing Finance Agency will require mortgage servicers to offer a streamlined modification program to borrowers with loans owned or guaranteed by Fannie Mae and Freddie Mac, starting July. The offers will be sent to home owners who are at least 90 days behind on their loans but no more than two years behind. The modification reduces the loans interest rate and extends the loan term to 40 years. Minimal paperwork is expected, borrowers wont be required to submit nay financial documentation to the lender to get approved. The loan modification becomes permanent after 3 three payments are made during the three-month trial period.

3. FHA Loans lose appeal again
Borrowers seeking low-payment mortgages will be charged for mortgage insurance for the life of their loans if they don't get their Federal Housing Administration mortgages by June 2. The FHA currently requires borrowers to pay for mortgage insurance on FHA loans until the balance reaches 78% of the original value of the home.

4. Equity Loans & Cash-out refis 
1.7 million homeowners regained equity in their homes last year, and an additional 1.8 million are close to it. All they need is home values to go up by another 5%. As home prices rise millions of homeowners might consider turning to their homes as a potential source for a loan. Cash-out refinances and home equity loans, which were popular during the housing boom, are slowly returning, along with the temptation to tap into equity.

5. Mortgage Rates Remaining Low 
Mortgage rates are expected to creep up this Spring but should remain low. The mortgage Bankers Association estimates the 30-year fixed rate will reach 3.9% by the end of the first quarter of this year.

Do you need Homeowners Insurance?

Owning a private home in a residential community subjects you to pay the Homeowners Insurance (HOI). For some homeowners, they see it as an added expense on top of the recurring mortgage they have to pay in the next 10 to 20 years. It can be devastating as some communities require all homeowners to pay the HOI. But despite the extra expense, this type of insurance is proven to be beneficial.  Let me explain.

What is Homeowners Insurance?

Homeowners Insurance is a type of insurance that is used to protect the homeowner’s property from various damages. There are also cases that homeowners’ insurance policies offer liability coverage against damages or injuries on the property. Generally, there are different forms of standardized homeowners insurance that can be chosen which will also depend on the needs of the homeowner. The following are types of HOI standardized by the Insurance Service Office

HO1 – Basic Form Homeowner Policy

HO2 – Broad Form Homeowner Policy

HO3 – Special Form Homeowner Policy

HO4 – Renter’s Insurance

HO5 – Premier Homeowner Policy

HO6 – Condominium Policy

HO8 – Older Houses

Read the complete description of each policy here.

Who needs it?

Whether you own or rent a home, condo, or apartment, you will need to have homeowners insurance. Indeed, you are not legally required to have homeowners insurance; however, it is one of the requirements when applying for a mortgage. It satisfies lenders. Almost all lenders are requiring borrowers to secure satisfactory insurance before they consider borrowers from qualifying for a loan.

In an insurance, there are policies that a home owner can choose from aside from the basic ones. The basic policies usually cover damages or accidents caused by fire, hurricane, vandalism, or lighting. Some other policies might cover damages due to theft too. To determine the policies that are applicable to you, an insurance agent or specialist can do the inspection beforehand.

The cost of the insurance will usually depend on:

1. Building costs
2. Crime rate in the neighbourhood
3. Heating, electrical system,  and plumbing condition
4. Materials and style layouts used for the home construction
5. The probability rate of accidents or damages from hurricanes, flood,  and hail storms

One common issue of homeowners is the disaster brought about by flooding. Standard policies for most insurance do not cover damages caused by flood. You have the option to add it from the standard policy. You can get it directly from your insurance agent.

In times of disaster or accidents, an uninsured homeowner may end up losing his or her home. You cannot just risk your largest asset because of the high premium costs of insurances. One common and easiest way to lower your premium costs is by increasing the amount of money you have to spend to cover the damage/loss before the insurance company starts the responsibility to pay the claim which is also known as deductible.

Insurance is not an option for homeowners, rather a necessity. At first, an insurance maybe an intangible product but it is actually one of the best things that you can have.

Josh writes for Scott Maizlish’s Park City Realtor Blog. Visit their website for Summit Park Real Estate news and updates. Or check them out at Scott Maizlish Park City Realtor’sGoogle + Page.

Can You Afford to Buy A House?

To help you understand and realize if you can really afford to buy a house, here are some guidelines to ponder:

1. Annual income: Whether you are alone or you have a partner whose planning to buy a house, it is important to have a breakdown of your income which usually includes the basic salary, bonuses, overtimes, and income that  is coming from investments. Knowing your annual income will determine how much you can afford in the future.

2. Monthly debt: You also need to calculate your monthly debt because you will need it to determine your debt to income ratio which is a very important factor in getting a mortgage.  Monthly debt usually includes car payments, credit card payments, house payments, personal loan payments, or student loan payments.

3. Debt to income ratio: This is used by banks or lenders to determine the financial status of the barrower. Calculating the debt to income ratio is very easy as long as you have your income and debt figures ready. It is advisable to follow the monthly (income and debt) figures. So let us say for example that you have an income or $10,000 a month, and then your total monthly debt is $4000. You just have to divide your total monthly debt ($4000) by your monthly income ($10,000) which will give a ratio of 40%. When it comes to mortgage, lenders usually have two kinds for debt to income ratio which is known as front and back ratio. The front ratio is your debt to income ratio that comprises all housing payments while the back ratio is your debt to income ratio without housing payments.  Higher chance of considerations will be given to those who have a front debt to income ratio of 36% or less and a back debt to income ratio of 28% or less.  Bear in mind that the debt to income ratio is not only the sole factor than lenders consider; however, knowing the ratio can help you see the big picture or how well you do financially.

 4. Down Payment:  A reasonable home down payment has been quite a hot issue in the Congress. Recently, a minimum of 5% is quite reasonable. However, you have to understand that the amount of your down payment can determine the amount of mortgage you can afford. When deciding how much down payment you are willing to pay, consider other expenses including closing costs you will encounter in the future.

5.  Closing Costs:  Never overlooked closing costs because you might end up frustrated to know how much money you have spent over it. Here are some examples of closing costs to take note:

• Home inspection charges – To protect you from underlying issues, home inspection is a must.
• Appraisal Fee – Appraisal determines the property lending value for mortgage reasons.
• Paper works – It includes fees on deeds, titles, and land transfers.

 6. Taxes and Insurances: Both lender and borrower have their designated insurances. We have what we call Hazard insurance to provide damage protection on the property; Private Mortgage insurance which is required for borrowers who paid less 20% down payment. Then, we have income and property taxes to take note too.

Josh writes for Scott Maizlish’s Park City Realtor Blog. Visit their website for Canyons Real Estate news and updates. Or check them out at Scott Maizlish Park City Realtor’s Google + Page.

California Making a Huge Recovery

In certain housing markets, it seems homes are selling like hot cakes. Buyers in California are feeling the heat more than anyone, with four of the top five fastest-moving housing markets in The Golden State. 

Orange County, San Diego, Sacramento and Los Angeles topped the list, with Las Vegas coming in at no. 5, according to data from ZipRealty.

In Orange County, the median days homes spent on the market dropped from 52 to 15, a 71% decrease year-over-year in March. Additionally, 29% of homes in Orange County sold in seven days or less. Conversely, the median home price shot up 27% year-over-year o $495,000. 

San Diego saw a similar change year-over-year, with the median days on market dropping 59% from 49 days to 20 in March. One-quarter of San Diego houses sold in seven days or less, and the median home price jumped 22% to $390,000.

Sacramento’s homes stayed on the market 57% longer, dropping from 28 to 12 on a year-over-year basis. Nearly one-third of Sacramento homes sell in seven days or less, while the median home prices rose 31% to $390,000. 

The final California city to make the top-five list is Los Angeles, whose median days on the market dropped 56% from 52 to 15 in 2013. L.A.’s median home prices increased 26% to $307,564 and 29% of its homes sold in seven days or less. 

The dramatic drop in time these homes are staying on the market coupled with the sharp increase in median home prices point toward the supply-and-demand problem that many home buyers are facing. 

As one of the most "bubbly" states prior to the crisis, California was one of the hardest hit states during the recession. Because it had further to go, The Golden State is seemingly making the quickest and most dramatic progress of any state in the recovery. 

For Lease in Rancho Palos Verdes

28619 Friarstone Court #42, Rancho Palos Verdes CA 90274
$2400

• 3 bedrooms
• 1240 sq. ft.

The kitchen has been completely remodeled with new cabinets. The bedrooms are spacious with large closets and the bathrooms has been upgraded with new fixtures. The private patio/yard is the perfect space to enjoy your morning coffee or a late summer BBQ. Never worry about parking, you have your own 2 car garage! Just a short step to the community pool and spa. Conveniently located to schools, and stores and easy freeway access. This home also offers access to the top rated Palos Verdes School District!

See More
http://losangeles.craigslist.org/wst/apa/3790983542.html

Contact:
Email: TheInmanTeam@gmail.com
phone: 310-519-1080 ext. 233

The Facts About Financing A Second Home

Buying a second home is very exciting.  This may be a home in the place where you vacation every year, somewhere that you like to  go and relax and enjoy your time off.   Perhaps you are looking for an investment opportunity.  Whatever the case may be, here are some things to consider when it comes time to buy and finance your second home.

• It is a great time to buy a second home - the mortgage rates are low
• If you have a strong credit history you are guaranteed the best rates
• You can use the equity in your current home as a down payment or closing costs
• Lenders are offering some really affordable loan options right now
• Remember, the guidelines for how much you can quality for is based on 28% of your gross income
• If you are a long term homeowner, you may be able to borrow more than you think

A second home as an investment property is a fantastic idea.  If you are looking for a way to save money for your retirement,  this is it.  A second home forces you to put away money every month in the form of a mortgage payment.  When it comes time to retire, you can sell it or use the income, which could be significant if you have it paid off.

Another reason a second home as part of your retirement plan is a good idea is due to the fact that your investment money is subject to less income tax and the interest and taxes may be deductible. So planning ahead could pay off in a big way.

If you rent out the property don't forget about the ongoing expenses such as taxes, insurance, property manager, etc. We recommend that you save enough money to cover a years worth of rental income and maintenance. That way if business is ever slow in renting out the property you'll always have your emergency fund to fall back on. The good news is if you buy the right house at the right price, your rental property should always stay rented.

If a second home is something your interested definitely talk to your real estate agent about more information on buying a second home. They can give you insight information about making this investment.

Real Estate Terms You Should Know

Here are some common terms you will hear when buying or selling your home

• Adjustment Date - the pre-determined date the interest rate changes if you have an adjustable rate mortgage
• Amortization - a portion of your monthly loan is applied to your accruing interest every month and the remainder is applied to your principal.  Over time, the interest decreases and the amount applied to your principal increases and your loan is paid off within a specified amount of time.  This is called amortization
• Appraisal - is a justification of the price paid for your home based on the analysis of the comparable sales of similar homes in your area
• Assessment - the value that is placed on your home for taxation purposes
• Assignment - this is when the ownership of your mortgage is transferred from one mortgage company to another
• Chain Of Title - this is the analysis of the different transfers of tile for a property over the years
• Clear Title - this is a title that does not have any liens or legal issues as to who owns the property
• Contingency - this is a condition that must be met before a contract can become legally binding
• Conventional Mortgage - these are home loans that are not government loans such as VA and FHA
• Deed - this is the legal document that gives you the title to your house
• Earnest Money Deposit - the deposit made by a potential buyer to show that they are serious about buying a particular house
• Escrow - money or documents that are deposited with a third party to hold and will be delivered upon the fulfillment of a specific contract condition - such as a closing
• FHA Mortgage - a mortgage that is insured by the Federal Housing Administration, also known as a government loan

Happy Cinco De Mayo !

Happy Cinco De Mayo !
Enjoy the day, Summer is right around the corner.

What NOT to do When Uncluttering Your Home

Are you guys enjoying the warm weather this weekend? Well if you are left with out any plans this weekend its the perfect opportunity to do some Spring cleaning and decluttering. Turn on some music and get the whole family involved, this way they can begin to make their own good organization habits. Start by picking one room in the house or one area to focus on... then before you start take a quick look at what NOT to do while you unclutter... good luck

1. Organize First; Buy Second. Do not go out and buy a ton of storage pieces and supplies before you sort through your home. All of those pretty bins, boxes and baskets at The Container Store are very enticing, but they won't do you any good unless they fit the space (on the shelf, under the bed, in the closet); hold what you need them to hold, and function properly for your particular space. I recommend cleaning out first, assessing what containers you REALLY need, and then buying a few bins to start. You can always add later, but theirs nothing worse than having a bunch of empty containers cluttering up your home while you figure out where you might use them.

2. Don't Bite Off More Than You Can Chew. Do not set aside an ENTIRE day to organize your WHOLE house. Very few people have the energy and/or focus to spend 8 hours organizing. You'll likely become frustrated and less efficient as the day progresses. It's much better to spend a few hours -- 2 or 3 -- on one project or space. This way you'll feel motivated to do more, not burned out by the process.

3. Complete Each Task -- Completely. Of course you will need to sort things into categories (e.g., toss, recycle, donate, give to friend, put in deep storage). But here's the crucial part: Once you have decided where something is going to go -- take it there. Never keep bags for charity or boxes for friends in your home to deliver later. Do it now. Finish the process. Take the bags and boxes out to the trash or recycling immediately. If you're donating something or giving something to a friend or family member, put the items in your car or make arrangements for dropping them off. You've done so much work getting this stuff ready to take out, complete the deal!

4. Rome Wasn't Built In A Day. Do not think that once you've organized your space, that you are done. You'll feel like a failure when you have to clean it up again in a month. Realize that while you have created a new, efficient, and logical system for processing and managing incoming and outgoing items, you are not done. There is no autopilot. You should expect regular upkeep, but just be glad that the new system is far more efficient than the old one.

5. Good Enough is Enough. Very few people have closets and drawers that resemble those in catalogues. Trust me. I've been in a lot of houses and apartments and even after we've totally reorganized a space, it doesn't look like an ad for The Container Store. It looks great and works properly, but it is a space that is used by an actual human being, not one that has been carefully staged by a team of stylists and marketers for a non-existent resident. You will ultimately be disappointed if perfection is your goal. The goal is to set up a space that works well for your needs. That is success.

"For Sale By Owner" Is Not The Best Way To Sell Your Home

For Sale By Owner or FSBO.  It sounds like a good idea.  Besides, you can sell your home - right?  You know your home better than anyone.  While that may be true, there are very few people that can actually sell their own home properly.
Here are a few reasons why a "for sale by owner" is not the best way to sell your home.

1.  As an FSBO you cannot list your home in the MLS. The Multiple Listing Service is a membership only site that only licensed real estate agents have access to.

2.  As an FSBO you will be locked out of most of the major home listing websites such as Realtor.com etc.

3.  You will be limited to placing a sign in your yard and placing your ad in the classifieds.  This will drastically limit your homes exposure to potential buyers.  You will be depending on a small classified ad or for an interested buyer to drive by.  The chances are very slim.

4.  Many real estate agents will not show a "for sale by owner" home because they generally do not get paid a commission for showing a buyer your home.  In other words, most realtors will not work for free.

5.  Most FSBO sellers overprice their home.  You probably have an emotional attachment to your home and feel that it is worth more than it really is.  Additionally, you will not have the experience of a licensed real estate agent who knows how to dig up the true market value numbers of homes that have recently been sold in your area.

6.  A buyer generally feels very uncomfortable talking with the owner of the home about the homes pros and cons of their home.  And if they do, they may not always believe how  accurately the information is being presented.  In addition, a buyer usually does not like negotiating the sale of the home with the owner.  Buyers prefer leaving the negotiations up to their realtor.  The realtor is a good buffer between the buyer and the seller and is the best way to come to an agreeable offer.

7.  FSBO sellers are more likely to get into legal trouble.  Most people are not well versed enough in real estate to know what does and does not have to be disclosed.  If a FSBO misses just one form or a legally mandated disclosure, they could face an expensive buyer lawsuit after the transaction closes.

Just how much risk are you willing to take?  It is just not worth saving a few pennies now only to find that you have to spend thousands more later to get yourself out of an improperly handled real estate transaction.

Ultimately it is up to you, but consider talking to a Realtor to discuss how much it will cost and let them explain their services and how they plan to market your home.

What You Need To Know About Your HOA

Does your prospective neighborhood have an HOA?  HOA stands for Home Owners Association and it is usually a group of homeowners that develop and enforce community rules and regulations.  A home owners association can be a very good thing.  However, it can also become an out of control nightmare if those group of people begin to implement seemingly unreasonable rules and regulations. It is best to do your research before getting stuck with it.

Here are some of the pros and cons of a homeowners association

Pros:

• An HOA will develop rules for the neighborhood that will keep the community in good cosmetic condition and keep the community a peaceful place to live
• An HOA collects a monthly fee from all homeowners.  Those fees are used for the upkeep of the community amenities and common areas, as well as, organizing community events etc. 
• An HOA has the ability to assist you with any neighbor disputes or disagreements
• Can protect your property value
• You get to enjoy all the amenities that come along such as pool, tennis courts, gym, etc.

Cons:

• An HOA could fail to budget properly for community repairs and expenses
• An HOA could levy unexpected assessments
• An HOA could increase the dues beyond what you may think is reasonable
• An HOA could neglect to enforce the regulations
• An HOA could become overly restrictive in enforcing regulations.  Such as allowable paint colors, what flooring materials can be used, what pets or pet breeds you are allowed to have and what types of noises they actually consider "noise"

A homeowners association has greater power than you may think when it comes to enforcing the rules.  For example:  if you don't pay your HOA fees,  the HOA can send your past due bills to a collection agency and report your debt to the credit reporting agencies.

 Then if you still don't pay what you owe, they can  actually foreclose and repossess your home.   The same goes for violating the rules.  If you don't abide by the rules, even if you think they are unfair, you could potentially be assessed daily fines for not complying.   It is possible that if you don't comply,  you could find yourself having to abide by a court order to get rid of your pet or to take up the beautiful new flooring you just put in etc.

Your best bet in protecting yourself,  before buying a home in a neighborhood that has an HOA, is by vetting the Association before you buy your home.  You can do this by requesting copies of the HOA budget documents, account statements, insurance certificates, board meeting minutes and transcripts, community newsletters, a copy of all of the rules and regulations documents.  Every homeowners association is required by law to make this information public and available upon request.
Additionally, it is a good idea to talk with some of the residents of the community.  Find out home many homeowners are delinquent in their dues and / or are going into foreclosure.
If you come across a rule or regulation that you do not believe is fair, you can always apply for an exception or contest to the rule.  You will need to do this publicly through the HOA management or make an appeal directly to the board.

Generally, more often than not, a homeowners association is a very good thing for the community as a whole.  However, it is best to do your due diligence before you move into the neighborhood.

If you have found a home in a neighborhood that has a disagreeable HOA, talk to your realtor and let them know of your findings.  They will then help you with any other options  that may be available to you.  Additionally, before  you begin your home search, ask your realtor to help you avoid a neighborhood that has a reputation of bad HOA management.  This  will help you avoid potential problems altogether.

Things You Must Consider When Buying A Home

Buying a home is an exciting time.  However, there are some big ticket items that you should look for before making your final decision about buying a home.  Big ticket repairs or replacements can make that "steal of a deal" become your new money pit.  So don't let your love for that house cloud your judgment or make you turn a blind eye to the obvious.

Here are a few things you should look for when buying your next home.

1.  Kitchen.  If the kitchen is something that is very important to you, then you should look for a home that has a kitchen you like.  Because kitchen remodeling costs can range anywhere from $20,000 to $50,000+. You should carefully inspect each element of the kitchen to make sure it meets with your approval.

2.  Bathrooms.  The same goes for the bathrooms.  Think about how much time you and your family spend in the bathroom.  An average bathroom remodel starts at $16,000 and goes up from there.  Inspect for leaks around fixtures, bathtubs and flooring.  Are there enough bathrooms to comfortably accommodate  your family's life style?  Are the bathrooms big enough and do they have enough storage to meet your needs?

3.  Roof.   A roof replacement has huge variations  in cost depending on the size, quality and type of roof you decide to use.  Additionally, there are other things to inspect for as well.  Things such as the roofs decking - is it sagging? Will you have to replace the decking as well as the roof?   Check the attic, the ceilings, the skylights etc. for any signs of water damage.  Also check for cracked, ripped, curling or missing shingles or damaged flashing.

4.  Heating & Air Conditioning.  The replacement of your HVACs system can be very expensive.  Sometimes a new unit can be retrofitted and sometimes it can't.  Current regulations of HVAC systems have caused some old types of air conditioning systems to be obsolete and you cannot just buy a new unit, you have to completely replace your entire system to make it work with your new unit.   Consider anything older than 10 years old to be a potential problem.  Additionally, an older machine will eat up energy at a much faster pace and costs more money to run.

5.  Basement.  Many homes in America have basements.  If you have a basement, you will need to carefully inspect it for water damage.   Look for water marks on the walls.  Test the humidity levels as well.   An unresolved water issue in the basement will render your basement virtually unusable to you and your family.  Additionally, the humidity could become a problem for the rest of the house as well.

6.  Driveways & Sidewalks.  Needless to say, with the cost of cement and labor, these items will be very expensive if you have to replace them.  So make sure you inspect them carefully to determine when and if they warrant replacement.

If you find problems with the home, that does not mean you should not buy that particular home.  Just make sure you talk to your realtor about negotiating a price reduction to allow for any potential repairs or replacements.

You can also ask your realtor to negotiate with the sellers agent to have the repairs or replacements completed as a condition of the final sale.  If the seller is not willing or able to accommodate your request, you may need to move on to another home.