Real Estate Really

Short On Equity

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Short sales continue to rise in Northern Virginia, especially Prince William County and Loudon County.  There are several options to foreclosure, but for most homeowners a short sale is still the most viable option to the long term effects of a foreclosure on their credit record.  Click here for information and free reports on the Short Sale process.

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MRIS Housing Trends Report

The Washington area's housing market showed signs of recovery in the second quarter with home sales up. Learn more about the Mid-Atlantic real estate market with this video commentary created especially for consumers by MRIS and Delta Associates.

Spruce It Up!

A house that "sparkles" on the surface will sell faster than its shabby neighbor, even though both are structurally well maintained.

From experience, REALTORS^® also know that a "well-polished" house appeals to more buyers and will sell faster and for a higher price. Additionally, buyers feel more comfortable purchasing a well-cared for home because if what they can see is well maintained, they assume that what they can't see has probably also been well maintained. In readying your house for sale, consider:

• How much should you spend to prepare your house for sale?
• Exterior and curb appeal.
• Interior appeal

Before putting your house on the market, take as much time as necessary (and as little money as possible) to maximize its exterior and interior appeal. Email if you would like my "Spruce Up" tips

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Getting a Mortgage

 

Buying a home can be exciting and fun.  Unless you are paying cash for a home, the most important part of your home purchase process in obtaining a loan.  I have found that many buyers, especially first time buyers, look for a home and then think about financing.  In fact, you should do the opposite.

You have to examine your finances, including your debts.  Some buyers are simply not ready for the financial responsibility of home ownership.  There are some programs that can help buyers with down payment assistance, but you should be prepared to have some money of your own for the purchase.  Let's face it, you have appraisal fees, home inspection fees, moving costs and other costs that you should be prepared to pay for outside of closing.  So look at that checking account and if you don't have enough money, start saving.

Now once you have decided its time to buy, don't just go out and start looking at houses.  Instead, shop around for a lender.  Its important to work with somebody who is reliable and honest.  You also have to feel comfortable with your lender.  You are giving them a ton of personal information, so you need to  feel a good level of trust with them.  Comparing interest rates is not the only thing to look for when choosing a loan or lender, only a small part of it. 

Look, you have to educate yourself. There are dozens of loan types and hundreds of loan programs available through thousands of mortgage brokers, bankers, lenders, finance companies, credit unions and even stock brokerage firms. But you can do the research up front to determine what might best suit you.  Do the homework.  Mortgage information sources are as vast as the number of mortgages available: Web sites, topical newspaper articles, mortgage books, consumer seminars and workshops, financial planners, real estate agents, mortgage brokers and lenders are all available to assist you along the way.

Remember, figure out if you are ready for a mortgage, determine how your mortgage will fit into your budget, and to some extent, your future obligations 15-30 years down the road.  This is a huge purchase and you need to be not only ready, but able as well. 

Financing Mistakes

Home financing mistakes happen frequently (can you say Option Arm?) so it’s important to focus on what you should not do as well as what you should do. 

Don’t choose the wrong mortgage: There is probably a slim chance that any lender is going to offer you an ARM or Option ARM type of loan these days.  But you may qualify for both a Conventional and FHA type of loan.  There are differences between these and other possible loan types, so do your homework and do your math. A little bit of research upfront may save you some dough in the long run.

 Don’t confuse "preapproved" and prequalified" with a loan commitment: Basically if you have a social security number, a name and a pulse, any lender can pre qualify/ pre approve you for a loan.  However, no loan is ever really approved unless the lender has your application and other required documents, and, you have been through their desktop underwriting process.  Even then, if you have some items that need explaining and you haven’t handled the issues with the lender, you could have a problem before or at closing.  You are only going to get a full loan commitment when the lender has checked and double checked and these days, triple checked your paperwork. So when you call an 800 number and the person on the other end of the phone says you are pre approved for a gazillion dollars, don’t believe it.

Don’t have too much credit: Lenders use a formula to calculate debt to income in a ratio.  Excessive credit is almost as bad as no credit or even bad credit. Even if you pay your bills on time, lenders tend to focus just as much on how much credit and debt you have, as they do on payment timeliness. So being up to your ears in car loans and credit cards is a sure way to be turned down for a mortgage. If you want to get a loan for a home, pay down those credit cards and reduce the limits on the cards. 

Don’t lie on your loan application: What can I say, don’t lie on the application.  The lender is going to find out the truth, so you might as well be up front in the beginning.  You’ll save yourself a lot of anguish.  Let’s face it, your lender is like your doctor.  If you have some issues, most lenders will help you get on the right path so you can get a loan.   

Tax Credit Expiring!

 In an effort to stimulate the economy and revive the housing market, Congress enacted legislation providing a tax credit of up to $8000 for first time home buyers.  This enhanced tax credit provides an outstanding opportunity for buyers.  It is an improvement of their 2008 tax credit in that, the amount has been raised from $7000 and does not have to be paid back.  That's right....no payback on this baby.

This year, qualifying taxpayers who purchase a home on or after 1/1/2009 and before 12/1/2009, can claim the credit on either their 2008 or 2009 tax returns.  Buyers do not have to repay the credit, provided the home remains their main home for 36 months after the purchase date.  They can claim 10% of the purchase price up to $8000 or $4000 for married individuals filing separately.

Between the declining property prices, the low interest rates, a variety of loan programs and this tax incentive, now is the best time to buy your new home in Fairfax County, Prince William County or anywhere in Northern Virginia.  Let me know if you want more information on the program.  Your lender or accountan will also have details on this.  But don' wait, because the program is going to end soon.

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