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What To Look For When Buying A Home

by Samia S. Morgan

When looking for a new home, you will find that it can be a fun and excting process. It can however, be easy to overlook certain negative aspects and make decisions that may be costly down the road. While many first time homebuyers may overlook potential problems, it can happen to even the most veterarn homebuyer. To help you look for potential problems, there is a list below that can help guide you through the process when you begin your home search.

Be sure to inspect the neighborhood closely. Finding a great home that is located in a neighborhood that doesn't suit your needs or a community that is decline can be a bad decision.  Before viewing any homes for sale, it is a good idea to do some research and review the neighborhoods in your area. One great  online databases is Move.com’s City Profile Report, which gives you a detailed look at specific neighborhoods using demographics, finances and economics to help determine quality of life.

Is The Price Right? Is This Really A Good Deal? If you have found a home you really love but might need some work, it is vital to consider a few things. It is easy to fall in love with a home that needs some work and talk yourself into the fact that you can fix it up. Many times these projects can be very costly and time consuming, so it is important to ask yourself questions such as: 'Do you have the money to fix this up? and "Do you have the time to invest?' It is also important to ask your self the question as to if it will be worth the cost-also if you don't have the money to invest you will be loosing value.

Don't Overlook The Additional Expenses. The mortgage is not the only expense associated with the purchase of a home. Other costs are typically associated with the purchase of a property that may not be considered.

  • Homeowner Assoication Fees: If you move into a development with an HOA, you will be required to make either a yearly or monthly fee. Keep in mind that HOA fees will typically raise each year and there are fees that are imposed for not following regulations. Be sure to read the fine print.
  • Real Estate Taxes: Home value and location will have an effect on the amount you will be required to pay each year. Be sure to consider that property taxes can increase dramatically because of new levies or even reappraisals of your property.
  • Utilities. Be sure to ask what the typical monthly costs are for gas, electric, water etc. If you are currently renting, the increase in utility costs from an apartment to a home can be shocking. Do your research so you are not surprised.

Finding a home you love and that you can afford is important. If you are a first time homebuyer it is important to do your research so you can make an informed decision and be happy with your home purchase years down the road!

Guidance in Positioning Your Assets to Develop an Overall Strategy

by Andy Block - Mortgage Advisor

As you know, Opes Advisors provides integrated personal finance advice that encompasses stocks, bonds, real estate and real estate financing. Our unique expertise enables us to provide our clients with guidance in positioning all of their assets to develop an overall strategy that is most effective in turning out their financial future.

With our expertise and our proprietary software, Opes Advantage™, we can actively and objectively evaluate the tradeoffs within life and shows the financial impact those "what ifs" and associated decisions can have on specific goals for your future.

This active – and interactive – program allows our advisors to immediately modify criteria and assumptions to reflect the changes and opportunities that regularly occur in people’s lives. And, it can be instantly modified as often as needed to consider additional scenarios.

For example, our clients (a 40 year old couple with three young children) were considering moving up to a bigger home. They have about $500,000 in equity in their current home and were considering buying a home for $1,200,000. Their annual income is $225,000 and they wanted to put 30% down on their purchase.

The detailed analysis of their situation revealed that if this couple followed the above approach, they will deplete their invested assets by age 75.

We proposed a number of various “what ifs” for them to consider.
What if they. . . .

•    Put 20% down on the house instead and fully fund a 529 Plan with the difference?
•    Maximize contributions to their 401k and receive some matching from their employers?
•    Reduce their household expenses by $500 a month?
•    Retire at age 65 instead of age 63?

With the immediate and client specific results our software provides, we can determine which variables can be adjusted to create the most significant impact on my clients' financial futures. In fact, we determined that by making some relatively minor changes in their actions, their assets should never run out. You can click here to view the impact of the various "what ifs" we explored with them.

In experiencing the power of these results, our clients were relieved of the insecurity of wondering how their decision would impact them and were able to move forward with confidence.

As always, please call me to discuss specific situations or to schedule time to review the various “what ifs” in life.

Andy Block - Mortgage Advisor & Financial Advisor
Opes Advisors

Email Me

Direct: 650.931.0605
Fax: 650.931.0601

License #01096311
400 S. El Camino Real
Suite 250
San Mateo, CA 94402
Fax 650.931.0601


Opes Advisors is licensed as a registered investment advisor with the Securities and Exchange Commission (SEC) and is licensed as a Residential Mortgage Lender by the CA Dept of Real Estate.

Author and Business are endorsed by Samia Realty Group
Move2CA - our website
San Francisco Bay Area Home Search  - find San Francisco Bay Area properties for sale
What’s Your San Mateo - San Francisco Bay Area Home Worth? - get current market information for your San Francisco Bay Area home

Sharing Closing Costs

by Samia S. Morgan

Once a seller has closed on their home and the paperwork has been completed, most will figure on deducting the remaining mortgage balance and the agent's commission from the sales price. Many, however don't figure in the closing costs that are involved as well. 

Closing costs refer to all of the taxes, fees and costs required to close a real estate transaction. The amount and who will be responsible can vary from state to state.

When selling your home, it is important to ask your agent for a breakdown of what you are expected to pay in closing costs as well what the buyer will pay. In most states the buyer and seller split closing costs but some states consider the buyer to be responsible or both parties can be required to pay the costs. 

Typically the person responsible for paying closing costs can be dependent on the market. For example in a market that is plentiful, the seller could have more of a chance in having the buyer pay the majority of the closing costs. But in a market that is struggling such as now, buyers tend to have the upper hand and many sellers will pay the majority of the closing costs in order to complete the sale.

Below are some of the common closing costs faced by sellers and buyers:

Escrow/attorney fees: Some states require third-party escrow companies handle real estate closings, while others dictate attorneys perform the function. Title companies, title agents, lenders, brokers and even real estate agents are allowed to handle closings and/or escrows depending on the state. These fees are usually split between the buyer and seller.
Title insurance: There are usually two types of title insurance that must be purchased – the lenders’ policy and the owners’ policy. Usually either a title company or in some states a lawyer will research the title to make sure there are no liens against the property or unidentified owners. These policies protect the lender and new owner for the full value of the property. Usually, the seller pays for the owner’s policy and the buyer pays for the lender’s policy. This is often referred to as clearing title.
Transfer or documentary taxes: These are paid either to the state, county, city or a combination depending on the state. This is where the government agency gets their share of the transaction. This is also known as a reconveyance tax.
Recording fee: Usually paid to the county for recording the deed, which shows ownership of the property.
Mortgage tax: This is an additional tax collected by some states. Alabama, Florida, Georgia, Hawaii, Kansas, Maryland, Minnesota, New York, Oklahoma, Tennessee and Virginia are the states that collect this tax.
Brokerage commission: The fee you contractually agreed to pay for the selling of your home.


Aside from these costs, the seller may be responsible for costs such as any credits that were promised to the buyer for repairs or home warranties. Don't forget that Federal law requires that sellers and buyers receive a copy of a
HUD-1 form outlining all charges in a real estate transaction.

VA Loans

by Samia S. Morgan

If you are a veteran and in need of financing for the purchase of a new home, a VA housing loan might be for you. A VA loan is a mortgage that is guaranteed (insured by) the Veterans Administration. There are millions of veterans in the United States that are eligible for a VA housing loan.

The VA Home Loan program allows veterans with qualifying income and credit to purchase a primary residence without putting any money down towards the sale price of the home, as long as that sale price does not exceed the appraised value of the home. Veterans are eligible for loans without down payments until 2011. Veterans do need money towards closing costs as well as earnest money, which the seller generally requires when a sales contract is signed. Closing costs may be paid by the seller, which can be negotiated. Below are some important facts and information if you are a veteran considering a home purchase.

  • To be eligible for a VA housing loan, you must be a veteran that has served on active duty. A total of ninety days of service are required during wartime. The requirement is 181 consecutive days during times of peace.
  • Any itemized fees and charges related to the purchase of a property, such as inspections and appraisals may or may not be the responsibility of the veteran. It is a goof idea to check with your local VA office for a list of reasonable and customary fees veterans are allowed to pay.
  • While poor credit within the last 12 months may be a deterrent in loan approval, VA housing loans have been given to veterans who lack established credit.
  • Veterans can prepay their VA Home Loans without a penalty.

 

Relocation and Home Buying

by Samia S. Morgan

Every year thousands of homeowners relocate to another city or state for new jobs, educational opportunities or other reasons both personal and professional. If you are planning to relocate, planning ahead is your best stategy for a less stressful and successful move. 

Purchasing a new home in an unfamiliar area can be difficult and you don't want to make a home buying mistake or buy in the wrong neighborhood. Below are a few tips to help you make the right decisions.

Start your research online by searching for information on the city, coupled with information or housing. Check out the websites of the local Chamber of Commerce, the major newspaper for the city, the local police department's Web site to check crime stats.

Locate a real estate agent in the area. Agents can be a wealth of information and can help you with your search. Many agents tend to specialize in neighborhoods and can assist you.

Work on a moving budget. Relocating to a new city can be expensive, the further you have to move the more it will cost. Start your research by investigating different moving companies and how they charge for their services. Check out this website, that will help to give you quotes for moving based on different specifications.

Homeowner Tax Credits

by Samia S. Morgan

Tax season is in full swing and while tax time is dreaded by many, homeowners are typically able to deduct many home-related expenses. Below are a few of the deductions that are typically available for homeowners.Because there are many different tax laws it is a good idea to check with a qualified tax advisor to find out which deductions apply to you.

First-time homebuyer credit.  A $7,500 tax credit is available to eligible taxpayers must have bought, buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return. and before July 1, 2009.  You are considered a first-time home buyer as long as you did not own a home during the three years leading up to the purchase of your new home.

Moving expenses. If a move is connected with taking a new job that is at least 50 miles farther from your old home than your old job was, you can deduct travel and lodging expenses for you and your family and the cost of moving your household goods.

Deducting Loan Points Paid on a Purchase or Refinance. The points you pay on a loan for a home purchase are tax-deductible for the year you made the purchase. You can deduct the points you paid as well as those a seller paid on your behalf if you meet the following criteria:

  •   The loan is secured by your primary residence
  •   The loan was used to buy, improve or build the home
  •   Paying points is a common practice in your geographic area
  •   The points are calculated as a percentage of the loan principal

Deducting Real Estate Taxes. Real estate taxes are deductible in the year paid. They are generally reported on Form 1098, Mortgage Interest Statement, the annual statement from the financial institution holding your mortgage, or on your county real estate tax assessment statement. You should also deduct any prorated taxes collected from you at closing. These amounts are not always included on Form 1098, but may be itemized on your real estate closing statement.

 

What the Federal Reserve's Actions Mean

by Andy Block - Mortgage Advisor

The Federal Reserve is facing a difficult but necessary transition from activist investor to pulling back its involvement and allowing higher short-term rates when the economy can stand on its own.

Last week the Federal Reserve took a small step toward reducing its involvement by raising the discount rate by .25% (The discount rate is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility). The Fed did recently indicate that the move might be coming, yet the timing of their announcement was surprising to many.

At the start of the credit crunch in mid 2007, nearly one-third of the U.S. lending mechanism was frozen. To increase their liquidity, banks had the option to access the Discount Window at the Federal Reserve (Federal Reserve Banks offer three discount window programs to depository institutions: primary credit, secondary credit, and seasonal credit, each with its own interest rate. All discount window loans are fully secured.) However, because costs for these funds were high AND repayment had to be done within 28 days, most lenders were unable to utilize this option. As a result, the Fed held an emergency meeting, lowered the Discount Rate and extended the repayment period to 90 days. These changes made the Discount Window option a viable solution for lenders and helped curtail the severity of the mortgage meltdown. Last week's announcement reverses those emergency measures.

When making this change, the Fed noted that the continual improvement in financial market conditions gave them the foundation for this move. The Fed also said that they do not anticipate this raise to lead to tighter financial conditions for households or businesses nor does this move indicate any change in their outlook for the economy or for monetary policy.

However, as the Fed makes changes, the government backs out of Mortgage Backed Securities (MBS) purchases and slows down stimulus programs, we continue to assess economic growth and inflation concerns.

With that in mind, one of the most popular measures of inflation within the U.S. is the Consumer Price Index (CPI). The CPI measures the estimated average price of consumer goods and services purchased by households. This index rose by 0.2% for January, less than the 0.3% expected. With the publishing of the January results, the year-over-year CPI is at 2.6%, below expectations of 2.8%. The more closely watched Core CPI (which strips out food and energy costs), actually fell by 0.1%, below expectations of a 0.1% rise. The last time Core CPI showed a negative monthly reading was 28 years ago. This helped to drop the year-over-year Core CPI rate to 1.6%, a bit below expectations of a 1.8% rise.

These results show that, for the time being, inflation is a non issue. However, it will likely become a factor in the next year or two. And, the best hedge for inflation is to fix as many costs at today's prices as you can. A home purchase today with a historically low mortgage rate allows buyers to fix the price of their home and the associated financing costs. We will continue to keep an eye on this index and other economic indicators.

Please call me to discuss specific situations or to review what actions to be in to meet both lifestyle and financial goals.

Andy Block - Mortgage Advisor & Financial Advisor
Opes Advisors

Email Me

Direct: 650.931.0605
Fax: 650.931.0601

License #01096311
400 S. El Camino Real
Suite 250
San Mateo, CA 94402
Fax 650.931.0601


Opes Advisors is licensed as a registered investment advisor with the Securities and Exchange Commission (SEC) and is licensed as a Residential Mortgage Lender by the CA Dept of Real Estate.

Author and Business are endorsed by Samia Realty Group
Move2CA - our website
San Francisco Bay Area Home Search  - find San Francisco Bay Area properties for sale
What’s Your San Mateo - San Francisco Bay Area Home Worth? - get current market information for your San Francisco Bay Area home

Displaying blog entries 1-7 of 7

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