To gauge whether or not you are ready to own your first [...]]]> You may be considering buying a home but it is hard to know if you are ready to be a homeowner. It can be a big step. Buyers that educate themselves on the process and set realistic expectations have the best experiences.

To gauge whether or not you are ready to own your first home you should ask yourself some serious questions.

• Are you in a lease or is your living situation easily changed?
• Do you need to remain in your current community or would you be willing to move?
• Do you have the time and resources necessary to make your first home purchase a success?

If you have answered these questions favorably you may well be on your way to homeownership.

The next step is to evaluate your financial situation. Here are some questions to check your financial readiness.

• Do you have a steady source of income?
• Do you know your credit history?
• Do you have a down payment ?
• Are you ready for the financial responsibilities that coincide with home ownership?

If your answers to these questions are positive then it is time to get the loan process started to see how much you can afford. A reputable lender will give you realistic expectations and many offer a free consultation for buyers seeking pre-approval.

Now it is time to start your search. Working with an agent that you trust and are comfortable with is very important. My skills include educating you about the buying process, negotiating, having your best interest in mind and helping you find a perfect first home while hopefully saving you time and money.

Here are some options for homeowners with “underwater” mortgages:

Stay and Pay

Compare the monthly mortgage payment, plus [...]]]> Do you owe more than your house is worth? You are not alone. Many homeowners are finding themselves in with a house that they owe more than its current market value. So what should you do?

Here are some options for homeowners with “underwater” mortgages:

Stay and Pay

Compare the monthly mortgage payment, plus carrying costs like repairs, homeowner dues and taxes, to the cost of renting. If you decide to stay and pay, you may be able to get financial help to catch up with payments if you run into a financial hardship. For example, the Emergency Homeowners Loan Program (EHLP) provides interest-free loans to homeowners who have fallen behind on their mortgages. Make sure to check with a HUD-approved housing counseling agency in your area to find out which programs may be available to you.

Refinance

The Home Affordable Refinance Program (HARP) helps homeowners who qualify refinance into a low, fixed-rate loan. The program has been extended through June 2012. For those who qualify, the terms are similar to those of any other conventional loan, but without the steep mortgage insurance that is typically required when there is less than 20% equity in the home.

Loan Modification

A loan modification means lenders lower the interest rate and payment, either temporarily or permanently. Lenders will also typically extend the term of the loan or to allow borrowers to make up missed payments by tacking them onto the end of the loan or spreading them out over the remainder.

The most well-known modification program is the government-initiated Home Affordable Modification Program. The Treasury Department reports that homeowners who were successful in getting permanent modifications on their loans through this program saw a median reduction in their monthly payment of 40 percent—more than $520 each month—amounting to a program‐wide savings for homeowners of an estimated $4.5 billion.

Short Sale

A short sale is when you sell your home for less than you owe. For the homeowner/seller, the goal is to get the lender to approve a short sale and forgive any remaining debt. Lenders do not always accept a short sale. It seems to make sense rather than allowing a home to go into foreclosure, but the red tape involved in a short sale can sometimes be overwhelming. The Home Affordable Foreclosure Alternative program (HAFA) is a government-initiated short sale program.

Foreclosure

According to RealtyTrac, one in every 605 homes received a foreclosure filing notice in May 2011. Foreclosure can have financial, legal and tax implications. For many homeowners, this is their last alternative.

Bankruptcy

If you need to stop a pending foreclosure, bankruptcy may halt a foreclosure long enough to get a loan modification considered. Filing Chapter 13 can help you catch up on payments over five years without interest. You may be able to reduce or eliminate other debts, freeing up more money to pay toward the home mortgage so you can get back to positive equity more quickly. This can be a very serious decision so it is imperative that you talk with a bankruptcy attorney before the foreclosure or short sale is completed.

There are many benefits of owning a home.  Due to negative press about the real estate market, buyers are skeptical of purchasing with the uncertainty surrounding the housing market. [...]]]> If you think the dream of homeownership is lost; think again! The American dream of homeownership is quickly becoming more and more feasible in  2012.

There are many benefits of owning a home.  Due to negative press about the real estate market, buyers are skeptical of purchasing with the uncertainty surrounding the housing market. Here are 12 reasons to buy a home in 2012.

1. Rents are at an All Time High- Due to the influx of foreclosures and fewer people making a decision to buy a home, the demand for rentals the past few years has increased. All prices are based on supply and demand and that is pushing up rental prices.

2. The Worst is Over-From the market peak in 2006, the S&P/Case-Shiller index of 20 housing markets is down 32 percent. What does that mean? The housing market could be at a turning point. Signs are showing we are moving from steeply falling home prices to an extended period of stabilizing prices.  You can’t predict the market and you won’t know when low prices are over until they start to go up. Stability is your first clue.

3. Historically Low Mortgage Rates-Long-term mortgage rates fell to new lows in January. According to FreddieMac, a 30-year fixed-rate mortgage averaged 3.89 percent in the week ending Jan. 12, falling from 3.91 percent last week and marking the lowest since Freddie Mac began keeping track. A 15-year fix fell to a record low 3.16 percent.

4. Mortgage Rates Won’t Stay Low-Just like you can’t predict when housing prices will rise; you also cannot predict the mortgage market. It is however unlikely that mortgage rates will remain low for long. This is especially true if demand starts rising and prices stabilize.

5.  Less competition-The slow sales pace is proof that there are fewer buyers out there. That is good news for a serious buyer; they will be less likely to end up in a bidding war. It doesn’t mean that homes that are priced aggressively to sell will not end up with lots of offers. Wait too long to jump in the buyer pool and there may be more competition. The market is showing signals of recovery, meaning demand will pick up. Being a little ahead of the curve gives buyers more elbow room.

6.  Appreciation-Odds are that buying a home at the current rates can almost ensure your home’s appreciation in the future.  With the double advantage of low prices and low mortgage rates the perfect storm for home appreciation is brewing.

7. Build Equity-Your home can actually work as a wealth building or even savings plan for you. Some homeowners are now adding money to their monthly payment to decrease the principal balance of their loans at a much faster pace.  This is called equity building. Because home equity is the largest single source of household wealth for most Americans it is a smart move to ensure financial stability.

8. Tax Deductions-If you are looking to save more money on your taxes than buying might just be the answer. Real estate property taxes for a vacation home and first home are fully deductible.  The IRS Publication 530 provides detailed tax information for first-time buyers that may answer many questions about what deductions homeowners are eligible for.

9. Homes are More Affordable- According to Kiplinger, the percent of family income consumed by a mortgage payment is at record lows. The average family pays only 12% of their monthly income to pay for today’s mortgage. Affordability has not been that low since 1971. Additionally, the Fed’s financial obligation ratio for mortgage holders have fallen to levels not seen since 2003.

10. Moving Up is More Affordable-If you are thinking about buying a bigger or more expensive home this is a great opportunity to save money. Homes in a lower prices range have not lost as much as higher-end homes. For example, if your home in 2006 was worth $125,000 it may now be worth $100,000. The home you may be looking to buy in 2006 was priced at $350,000 but now is under $300,000. You have made a gain of $25,000 in your upward move.

11. Buy Low, Sell High-The uncertainty surrounding the housing market will wane. When the housing market rebounds prices will go up.  Owning a home may eventually be more than just a pride issue, it could also become a profit through a home sale.

12. Pride of Ownership-There are more benefits than just financial gain in homeownership. Some of those benefits may be painting the walls the color of your choice, or landscaping the yard, or having a pet. No matter the reason; homeownership will give you pride.

The number [...]]]> The bidding wars are back! Buyers have finally realized there is a perfect storm for buying, low rates, supply and an improving economy. Supply is down and buyers and according to this article from The Wall Street Journal are finding that they are now competing for homes.

The number of contracts signed to buy homes in February eased slightly from January but posted another strong gain from a year ago—the latest sign that demand for homes is up from the depressed levels of the previous 18 months.

A report March 27th by the National Association of Realtors showed the index of pending home sales, reflecting deals that have gone into contract but haven’t yet closed, rose 9.2% last month from a year earlier, continuing a rise largely fueled by investors’ purchases of foreclosed properties. The index fell by 0.5% from January.

While buyers are starting to step forward, however, home builders and real-estate agents report an elevated level of contracts falling apart, as buyers run into trouble qualifying for mortgages amid tough lending standards.

Another common complaint: low appraisals that come in below a negotiated value, requiring sellers to cut their price or buyers to put more money down in order to keep a deal from collapsing. As a result, the pending sales figures could be overstating actual sales as buyers sign multiple contracts over the course of several months.

Still, analysts say that housing demand appears to be stronger than at any point in the past year. Low prices are luring investors who can convert properties into rental units and make double-digit returns. More first-time buyers could face added urgency to move as landlords begin to raise rents and mortgage rates rise from record lows.

“We are seeing very strong activity out there,” said Ivy Zelman, chief executive of research firm Zelman & Associates. Buyers are tired of deferring moves, and rising rents “have really pushed people off the fence,” she said. “We’re not ready yet to wave the victory flag and say home prices are going up, but we’re confident they’re stabilizing.”

The report showed that purchase activity was up 18.4% and 19% from a year ago in the Northeast and Midwest, respectively, after an unseasonably warm winter. Contract activity fell by 1.8% in the West.

Real-estate agents in many parts of the country say inventories of homes for sale are declining, leaving more buyers competing for less supply. Shrinking inventories could be a consequence of the decline in home prices, which has left more sellers unable or unwilling to sell their homes at a loss.

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