Ohio

Image Courtesy: pixabay.com

House Buying Season is Quickly Approaching

The season for buying a homes is quickly approaching. Do you know what makes a home sell?

With the spring season fast approaching, many realtors are getting ready for an increase in potential home buyers. However, there aren’t any major incentives that are currently getting potential buyers excited this year like last year’s tax credit for first-time home buyers. And with the shaky economy still wearing on peoples’ minds, buying a home may not be one of the things that many people are thinking about doing this year.

According to a survey conducted for the National Association of Realtors, about 60 percent of the people who would like to purchase a home are worried about their credit and their job security. The survey, which asked 3,500 renters and homeowners about their thoughts on buying a new home, shows the thoughts and feelings that potential buyers have had for quite some time now. However, despite the findings, many realtors are expecting a rebound in the coming months because prospective buyers are worried that mortgage rates may start going up a few percentage points before leveling off. This could cost them thousands of dollars over the life of their home loan so many buyers want to get into the market before this happens.

Because potential buyers have so many homes on the market to choose from, realtors are doing everything they can to impress buyers when they do a showing. Staging is one of the most important aspects of selling a home because it shows the buyer the potential that the home has. One problem that has come up recently, however, is that buyers expect “perfection with comfort,” according to one real estate broker with Prudential Fox and Roach Realtors. He says that staging has become such a craze that buyers have become “spoiled” and some homes are more like “museum pieces” rather than homes.

Buyers are no longer settling for homes that need just a few touchup repairs. There was a time when a few nail holes and other small repairs would be tolerated by buyers. But these days, realtors are finding that deferred maintenance could be a deal breaker as many buyers want a home that they can move into without worrying about doing repairs as soon as they move in. The feeling that many buyers have is that if there are these small repairs that need to be done, there are probably larger repairs they will run into soon after moving in.

If you are shopping for a home this year, you will likely notice that realtors have stepped up their game when it comes to providing a perfectly staged home when you arrive for your showing appointment. Be sure to do your homework and research the home beforehand so you are not taken in by how nice it looks on the surface so you can find a house you will truly be happy with.

Military Mortgages to Get Fixed

The people who serve our country should get treated fairly. However, many of them have had to go through some unnecessary trouble with their mortgages, including lawsuits.

JPMorgan Chase is fixing a problem it noticed with military mortgages this week. The bank, after noticing that members of the military had mistakes and overcharges on their mortgage, is trying to make things right by sending out 4,000 checks totaling $2 million to those who were affected by the mistakes.

According to reports, 14 military members were forced into foreclosure as a result of mistakes that the bank made. Thirteen of those cases have been resolved and Chase is working on resolving the final one so these homeowners can move back into their home.

The mistakes occurred on the files of military members who requested to have an explanation of their rights as service members sent to them. This is part of the Service Member’s Civil Relief Act. However, the mistakes were not recognized until a Marine fighter pilot filed a lawsuit against the bank in federal court. Under the aforementioned act, members of the military have special protections when it comes to mortgages. One of those protections includes the requirement of the bank to give the military member mortgage rates of six percent if the loan was entered into before the person went into active duty.

According to Marine Captain Jonathon Rowles, Chase violated several aspects of the relief act for service members. For one thing, the bank did not give the proper date for reducing the interest rate on the mortgage. As a result, he had to reapply several times for the protection before actually receiving it. Chase also tried to collect on “inaccurate account balances.” Rowles took out a $255,000 interest-only mortgage loan in February 2004 with an adjustable rate. He entered into active duty almost two years later. His mortgage was sold to Chase just a few months after he signed the loan papers.

A spokesperson for Chase said the bank was aware of the problems before Rowles filed his lawsuit. The bank was investigating the mistakes and was looking for a way to make them right. However, once the lawsuit against Chase was filed, those investigations intensified. As a result of the reviews of military members’ mortgage accounts, the bank has a newly trained team specifically for working with military customers to help prevent this type of problem in the future.

Currently, Senator Jack Reed (D-RI) and another senator are trying to get the federal government in the mix by pushing for more investigations into improper banking practices with it comes to mortgage protections. He said that Chase violated the law and there may be other banks doing the same thing.

We’ll keep an eye on this story and report any new information that occurs in the weeks and months to come.

Three Common Mistakes Buyers Make When Getting a Mortgage

Are you getting ready to apply for a mortgage? Here are three common mistakes that you should avoid.

There are many things to consider when getting a mortgage. Unfortunately, many people who try to get a mortgage jump in to the process too soon and they make mistakes that could cost them hundreds or thousands of dollars. Here are three common mistakes that people make so you can prepare yourself to avoid them.

1. Not Knowing Your Credit Score
Before you even think about getting a mortgage, the first thing you should do is learn about your finances. This means knowing your credit score and your history as well as your ability to pay the mortgage each month and the other bills that go along with home ownership. Many people try to get a mortgage without knowing the credit score and they expect to get the lowest mortgage rates available. You should know your credit score before getting a mortgage because if it is too low, you can save money over the course of the mortgage by paying down some bills and bringing that score up so you can qualify for a better interest rate.

2. Looking for a Home before Approval

The excitement of buying a new home sometimes causes home buyers to search for a home before they even know how big of a loan they will get approved for. They find the home they want and then find a lender to find out how much they can get. But you should always get pre-approved by a lender before you purchase a home. When you do, you are in a better position to compete against other buyers when you find the home you want. You can close sooner and you won’t get your heart set on a home that you cannot afford.

3. Forgetting about Other Expenses

When you buy a home, you don’t just start paying your payments the month after moving in. You have to consider the down payment, closing costs, moving costs and other things that are going to cost money. Many home buyers forget about these extra fees and charges and sometimes they have to let the home go to another buyer because they don’t have enough left over for these extra costs. Talk to your lender about closing costs and other fees before getting to the final stage of buying your home so you can be prepared and be sure you have the money to close on the deal.

These are just three common mistakes that people make when they buy a home, especially their first home. We’ll explore this topic more in future postings to help you avoid these common problems.

Four Ways to Reduce Your Closing Costs

When many people buy a home, they forget about some of the other fees like closing costs. Here are some ways you can minimize your closing costs and have more money once the deal is done.

One of the things that keeps some homeowners from purchasing a home is the high amount of the closing costs. Many homebuyers, especially those who are buying a home for the first time, forget about the closing costs which can be in the thousands of dollars. Unfortunately, many buyers get to this stage of the process and then have to bow out of the deal because they have no money for the closing costs. Here are a few ways you can minimize your closing costs and put more money back into your pocket when buying a home.

1. Shop around
– One of the common misconceptions is that closing costs are the same regardless of the lender or bank that you use. However, this is untrue. When you are shopping for a lender for your pre-approval loan, ask how much they charge for closing costs. The closing costs are typically between 3 and 5 percent of the loan amount so if a lender charges more than that, look for another lender.

2. Ask the seller to pay some – It is not uncommon for the buyer and seller to share the closing costs. With today’s housing market, many sellers are motivated to sell their home so they will be more likely to split or at least pay some of the closing costs just to get rid of the house and mortgage payment. Even if they refuse to pay some of the costs, it never hurts to ask them.

3. Ask for explanations of fees
– Closing costs can be confusing and, as a result, some lenders will take advantage of buyers by inflating costs or adding unnecessary charges. When shopping for a lender, ask each one to explain each of the fees to you if you do not understand them. If they won’t give you an explanation, this is a bad sign. Look for another lender if this happens to you.

4. Double check the list – Before paying you closing costs, look over the list of fees carefully. There is a chance you have already paid some of the fees. For instance, appraisal fees are typically paid before the closing stage. If you see appraisal fee as one of the charges on the list of closing cost, let your lender know it’s already been paid. If you see one of these charges that you have already paid, there are likely others.

These are just a few ways you can reduce your closing costs. Don’t let the amount of the closing costs keep you from your dream of owning a home. Minimize them as much as possible and use the money you save for decorating your new home.

Homebuyers Found Prices to be Affordable in 2010

Did you buy a house in 2010? If so, what was your main reason for doing so?

Despite all of the financial problems that were going on in 2010, thousands of homebuyers jumped into the real estate market and purchased a home. The year was great for many buyers with historically low mortgage rates, but home affordability was also one of the main factors for the number of home sales in 2010.

Another interesting finding in the survey, which was conducted by Weichert Realtors, Inc., was that the desire to own a home rather than continue renting was hardly even a factor in the minds of most of the people who bought a home in 2010.

The survey asked more than 1,200 home buyers who purchased a home between July 1 and December 31 about their reasons for purchasing a home. About 28 percent of those surveyed listed “favorable financing” as their main motivator for their purchase. That’s a three percent drop from last year’s 31 percent who listed the same reason. However, in 2008, only 14 percent of the home buyers during that year surveyed listed “favorable financing” as their main motivator in buying a home.

In 2005, when the housing boom began to dwindle down, 26 percent of the home buyers in the Weichert Realtors survey said that they wanted to purchase a home so they could stop renting. In 2010, however, that number was nearly non-existent as very few respondents listed this as a reason for purchasing a home.

Dominick Prevete, the regional vice president of Weichert Realtors Inc., said the results of the survey show that homebuyers are looking for a great value before they jump into their home purchase. With discounted prices and historically low mortgage rates, it was a great time for buyers who wanted to get a great price for a home.

The survey also showed that about 12 percent of respondents decided to buy a house because they were relocating for job purposes or some other reason. In 2009, 12 percent of respondents to the survey said the same thing, but that number is down eight percent from 2008 when 20 percent listed “relocation” as the reason for buying a home. Another 28 percent said they wanted to buy a home last year to increase their living space or so they could get more property. That number is fairly consistent for all years that the survey has been taken.

The Three Stages of the Foreclosure Process

Do you know what happens when a home goes through the foreclosure process? If you'd like to buy a foreclosure this year, here are the three stages you can expect.

Buying a foreclosed home is a great way to get more home for a lower price. Foreclosed homes are often much cheaper than their actual market value because banks want to get rid of them so they can take them off their books. If you are planning on buying a foreclosed home this year, here are the three basic steps a home goes through during the foreclosure process.

1. Pre-foreclosure. This stage in the process occurs when the homeowner gets behind on their mortgage payments. After a few months of not receiving the payments on the home, the bank sends the homeowner a notice of legal action. This is what is known as the pre-foreclosure stage because the bank has not foreclosed on the home but the homeowner is still in default on their payments. Usually, the bank will file this default so it can become public information. The homeowner has the option of catching up on payments or, if the bank allows, the homeowner can do a short sale. Otherwise, the bank will foreclose on the property before long.


2. Auction – Once the bank forecloses on a property, it often goes to the auction stage. By the time the home reaches this stage, the homeowner has been evicted from the property and the bank wants to get the home sold as soon as possible because it simply isn’t earning any money for them. To purchase a home at an auction, you typically have to have the cash with you to buy it. If a buyer buys the house, they become the new owner and that is the end of it for the bank. However, if the home does not sell, it gets relisted by the bank. The auction phase is sometimes skipped depending on the demand for local housing.

3. Bank-owned properties –
Bank-owned homes are homes that have been foreclosed on and the bank now holds the title to the property. A bank-owned home may have gone through auction already without being sold or it could have skipped the auction stage and went directly to the market depending on the bank’s decision. If the bank owns the home, the previous homeowner has nothing to do with the home any longer. As a result, you can deal directly with the bank and often get a better bargain on the property. Also, there should be no liens or other legal problems with the home when the bank has taken possession of it. You may have to do some repairs, however, to bring it up to code after you purchase it.

With thousands of foreclosures slated to take place in 2011, this could be the best year yet if you have been thinking about buying a home. Learn more about foreclosures so you know what you are getting into and get a lot more home for your money!

Are You Entering Into a Risky Mortgage?

Do you know if you are getting into a bad mortgage deal? Here are some things to look for before you make that final decision.

The mortgage industry has come up with a number of products to make it easier and more affordable for potential home buyers to get a home. But that doesn’t mean that all of these products are good for the buyer. In fact, some of these products are the reason that the real estate market is in the turmoil that it is in today. Here are some of the riskier mortgage products and how to avoid making a mistake that could cost you your home and your credit.

1. The 40-Year Mortgage – Everybody always talks about how a fixed-rate mortgage is generally better than an adjustable rate mortgage. While that may be true in many instances, the 40-year fixed rate mortgage is a product you should stay away from. Paying the interest on a 30-year fixed rate mortgage is bad enough, but extending the loan for another 10 years only means that you will be paying thousands more in interest. This type of mortgage will follow you into retirement and it could jeopardize your chances of enjoying retirement, paying for a child’s college or leaving an inheritance.

2. Adjustable Rate Mortgages – Many homeowners found themselves in dire financial need in the last couple years because of adjustable rate mortgages. These are the types of mortgages that offer a fixed (often low) interest rate for a period of time. Once that time passes, the rate adjusts periodically. If the mortgage rates increase, your monthly payment could go from a few hundred dollars to a thousand dollars or more. This is why many homeowners simply left their homes behind – because they could no longer afford the mortgage payments because they adjusted so dramatically.

3. Interest-Only Mortgage Loans – With this type of mortgage loan, the homeowner only pays the interest for the first several years of the loan. This may sound like a good idea at first, but the interest rate for these types of loans is usually higher than a traditional fixed rate loan and you could be paying more than necessary over the term of the loan. Also, these types of loans are usually defaulted on more often than traditional loans so stay away from interest-only loans if at all possible.

4. Mortgage loans with low down payments – Buying a home with only a small investment seems ideal. However, if you only put a small down payment on a home and then the home prices drop in your area, you could be stuck. It will be much more difficult (if not impossible) to sell your home or refinance it in this type of situation. A ten percent down payment or more is ideal when buying a home.

Before signing your name on the dotted line, it is critical that you choose a mortgage product that is right for you and will not cost you thousands of extra dollars in the long run. Be sure to choose a lender that you can trust and always understand your mortgage loan before making your final decision. Your financial future depends on it.