Important News Flash for First Time homebuyers

I am attending the Real Estate Summit in Washington D.C. Shaun Donovan, U.S. Secretary of Housing and Urban development has just spoken to our group. Secretary Donovan just stated that HUD will make a announce in the next several weeks that the $8,000 first time homebuyer credit will be allowed to be used as the down payment on a home purchase using a new program that HUD will launch. The program will essentially be a short term bridge loan program for use with Fannie Mae/Freddie Mac (FHS) loans.

This would be a great assistance tool for First Time Homebuyers.

Dean Rouso, Broker-Owner of Prime Property Partners, LaGrange, IL
National Association of REALTORS Director

For many people it seems too overwhelming a task to go through their belongings and furniture with the goal of getting rid of some of it. Unfortunately when moving to a smaller house, it often becomes absolutely necessary to do this. Here are some ways to make the process more manageable.

• Plan Ahead – Don’t wait to start culling until someone has agreed to purchase the home you have had on the market. This could leave you with as little as a couple of weeks to sort through decades of belongings. Start going through your things and getting rid of stuff a month or two before you even put your house on the market. Not only will this give you ample time to decide what you really love and want to keep, but it will also make your house more appealing to potential buyers.
• Include the entire family – Certain objects and possessions mean different things to different family members. Holding onto an old piano that no one ever plays, only means more moving cost and excess unwanted furniture in your new home.
• Photos – Give yourself several days for the task of digitizing all of your family’s photos. Since they are one of our most valued possessions, why not take them out of those giant boxes, scan them and make a CD? This will cut down on a tremendous amount of clutter and it will keep your memories safe forever.
• Shedding basement objects first- Many people put things away in their basements, attics and sheds assuming that someday they may find a need for it again. Seriously consider which items you can live without and start getting rid of them by donating them or selling them.
• “Furnished Home For Sale” – If you are not emotionally attached to your furniture, consider selling them along with the house. This way you save on moving costs and you get to buy all new things for your new home. Not bad!

If you are interested in carpeting your home or just specific areas in your home, it pays to know what is available and what will work best for your home before you go to the store. This way you can narrow down your search and save time, as there are nearly limitless choices when it comes to carpeting. Before we list carpet types and their attributes, be aware that carpeting your stairway will generally cost between six and nine dollars per step. If you prefer a carpet runner, this cost will be significantly higher. In regards to padding, it does extend the life of your carpeting and increases the overall comfort factor. It is completely worth the investment! Always replace your old padding with a new one, because carpeting manufacturers will not honor their warranty with an old pad underneath their new carpeting.

• Plush/Cut-Pile Carpet – Saxony plush is very popular because it is soft with short tufts. It does not wear as well as berber or other high level loop carpets.
• Berber – Has a high-level loop with a nubby texture. It wears very well, although is harder to clean.
• Wool – The most expensive type, but it is comfortable, durable and resistant to dirt. Direct sunlight can fade it.
• Synthetic fiber – It is made of artificial materials. Mostly made of nylon, it is cheaper than wool and is durable. Sunlight can damage it.
• Olefin – Cheap, but less durable than nylon. It is pre-treated to resist fading, but can be damaged by heat and sun. It is a very good choice for basements.
• Acrylics – More expensive than nylon, but more closely resembles wool and it resists fading.
• Sisal – A natural fiber derived from the cactus plant. It is very strong and durable, but is extremely rough in texture.

For anyone facing a foreclosure life can become extremely stressful, as there are so many new issues that you will be faced with. In this time of change and uncertainty, there are actually people out there that are preying on others going into foreclosure. Scam artists are coming out of the woodwork and are offering homeowners facing foreclosure a “deal” to renegotiate their loans for a fee. What people need to know is that in many states it is illegal for a person to ask homeowners for an upfront payment to renegotiate a mortgage – unless the Department of Real Estate holds record of them meeting license and registration requirements. You can verify this information and also check to make sure that your real estate broker and attorneys have valid licenses at www.dre.ca.gov.

Always be skeptical and remember to never give anyone money in advance of any services they are offering. There are many non-profit groups that offer legal aid for free of charge to homeowners that are having trouble making their monthly payments. See more information at this avoiding mortgage foreclosure website.

Insuring your home with the proper coverage is so incredibly important since your home is almost always your biggest investment – and it is where you stay dry and warm. Following are some things every person who is looking to purchase a policy should know:

• Always insure your home for 100% of the cost to rebuild. To figure out that number you can go to buildingcost.net to use their free calculator.
• Flood, earthquake, war and nuclear accident coverage is extra beyond what your basic policy will cover.
• The contents of your house is usually covered at 50% of what the value of the structure is. You must make sure this is adequate coverage for all of your belongings by making an inventory. Use knowyourstuff.org’s free home inventory software to determine this number.
• Take pictures of all of your valuables in case you do need to file a claim. Pictures make the process so much easier.
• Make sure you buy enough liability coverage – you need enough to match your assets.
• Always buy “riders” for any expensive artwork or jewelry that you own. If it is worth more than $2,000, you may consider buying a separate policy for it.
• Shop around as prices vary dramatically. Start with your car insurance company, because they often give discounts to multiple policy owners. You may also go to insure.com to compare prices. 
• Keep your deductible high. Starting with a $1,000 deductible is wise, as most people do not make claims for less than this amount as there are insurance companies that will drop you if you make more than two claims per year.
• Always ask about discounts. Many insurers have them, but you must ask for them. Discounts for installing smoke detectors, an alarm system or a fire-retardant roof are common. Also, if you are 55 years of age or older, mention that as you are considered low-risk – and can get a price reduction.
• Keep your policy up-to-date! Changes to your home, such as a re-model, need to be covered.

Baby boomers are making the reverse mortgage more popular than ever, but just know the potential pitfalls before you consider one.

1. 1. Repayment Rule: If you sell your home or for some reason must live at a hospice, a nursing home or you simply plan to use the home as your second home, you will have to repay the cash you received from the reverse mortgage as well as interest and other fees back to the lender.
2. High Closing Cost and Interest: Don’t forget to shop around and compare prices. Many seniors fail to do this, as they are not as familiar with the reverse mortgage as they are with a traditional mortgage. If offered, reject the adjustable interest rate option. There are many fixed rate reverse mortgage programs available to choose from.
3. Maintenance and Taxes: Always ask the bank to be clear what your monthly payment will be per month, less your escrow payment. Make sure you know the lender’s policy on the home’s maintenance. You might consider taking enough money up front to have for future repairs, so that your monthly payment will always be the same.

Every home needs maintenance repairs over time, but if you are putting your house on the market you may want to know the top four places to put your money so that you will get the biggest return out of it. According to a survey done by HomeGain, in order to get the highest return on your investment, spend your repair dollars on the following in this order:

1. Cleaning and de-cluttering
2. Lightening and brightening
3. Home staging
4. Landscaping

Obviously the monetary returns may vary slightly based on where you live in the country, due to the cost of a repair and the importance of each particular improvement to buyers in that area. HomeGain estimates that making the above repairs and spending between $5,000 and $8,000 on them, you may see a price increase in the West as high as $22,762, in the East as high as $23,532, in the South as high as $21,740 and in the Mid-West as high as $20,279.

Other things never to overlook when putting your house on the market are dirty windows, electrical repairs, plumbing problems, old carpeting, old paint and damaged floors.

To learn more about home improvements go to HomeGain.

When refinancing your mortgage, you must look at the big picture to see if it really makes financial sense for you. Since rates are at an all time low, many people are considering it. Here are some ways to help you decide if it will benefit you or not.

If you have plans to pay off your mortgage in the next few years it makes no sense for you, as you will not be able to recover the re-financing fees in time. Same thing goes if you are planning to move in the next few years.

If you are planning to stay in your home for many years and currently have an Adjustable Rate Mortgage, then refinancing to a 30-Year Fixed is a very good option for you. Refinancing may not lower your monthly payments by all that much, but you may sleep better knowing that those payments will never go up.

Another good reason to refinance is if you are currently paying a very high rate. A very good rule of thumb is to calculate your costs and make sure that you can earn back the roughly $2,000 in fees that you will pay, within two to three years.

Two other things to consider are that if you are paying less interest over time, you will pay more taxes. Also, money that you pay in refinancing fees could be invested instead. Think of the return on that sum you could earn over thirty years!

Other descriptions for short sale listings might be described with the phrases ”subject to bank approval” or “subject to lien-holder approval” or “as-is”. Rarely will you see “short sale”, so it’s best to be armed with some crucial information about short sales before considering buying one.

• In this type of transaction there is an additional party involved besides the buyer and the seller; the bank. The bank must approve the sale, and this can make the time to close much longer than usual. Expect it to take anywhere from four to six weeks. And once the bank’s approval is granted, they will expect you to be ready to close as soon as possible.
• You will need to pay for your own inspection, and since the sale is “as-is”, this means that no repairs will be done and there will be no closing cost credits for repairs.
• You will also need to pay for your own appraisal. The bank will do their own as well, and have been known to reject the sale based on their appraisal. Also, they may ask the buyer to raise their offer before approving the sale.
• These things are obvious risks to the potential buyer, as you could end up out of your inspection costs.
• Deferred maintenance on the home is a potential risk for the buyer. Consider that since the mortgage payments were not being made, it’s highly likely that the homeowner was not able to afford regular home maintenance.

Fore more information about short sales go to About.com.

Most people keep safety knowledge filed away in their heads, but what every household really needs is an actual checklist that can be posted and referred to yearly to keep everyone safe. Here are some tips and reminders about some of the things that may not be so obvious:

• Fire Safety includes keeping pot and pan handles turned away from the outside of the stove when cooking, so they can not be bumped into.
• Keep all space heaters at least one foot away from anything that is flammable, such as furniture, draperies, even people.
• Never store propane tanks indoors.
• Electrical safety includes never putting electrical cords across doorways or under carpets.
• Never plug major appliances into extension cords; separate outlets only.
• Consider an electrical inspection for your home. 400,000 fires per year are due to faulty electric wiring.
• Test smoke and carbon monoxide alarms periodically and change batteries yearly.
• Devise a home fire escape plan that includes more than one exit and that every family member knows about.
• Teach children to call 911 from a neighbor’s phone in the event of a fire.
• Affix rugs to the floor to avoid slipping.
• With children in the home, always attach brackets to bookshelves.