HELLLLOOOOO MY WONDERFUL BEAUTIFUL BAY AREA!….Our Bay Area’s housing recovery has spread from Silicon Valley up the Peninsula to San Francisco, and it is now helping lift home values in the East Bay… click the link below and find out zip by zip code how the increases have affected in any given zip code…
the link below was written by Pete Carey of the Mercury News… its a very informative read on our current market activity in our most Wonderful, Beautiful Bay Area… Always keep in mind I’m always available to chat with you… feel free to contact me at 925.997.2426 or email me at email@example.com.
Its a really nice day today… Happy Friday… please go and enjoy!!… Cheers Everyone…
HELLLOOOO My Beautiful Wonderful Bay Area…. As you all may have heard or perhaps been a part of... our current bay area real estate market for sellers is in the throes of Multiple Offers...Hooray for the Sellers!… however this sort of situation can put buyers into the fray of uncertainty and aggressive competition for a chance to buy a home… the current low inventory of homes surely adds pressure for the buyer… many have to compromise on what their true desires for a home may be… Today my focus is to provide some information and help for those buyers… whose goal is to become homeowners!! There’s plenty of other types of buyers who have at least 30-40-50% down and in many cases All Cash… Buyers who are barely able to put down 1-3% don’t have the luxury of extra money set aside to repair or remodel the only property they can afford. Lets say for example…
You are attracted to a house that is perfectly located but it just came out of foreclosure and needs a lot of work to make it habitable. To swing the deal, you need to finance both the purchase and the required repairs. How do you do that?
Getting the mortgage required to purchase a house is only one of the challenges facing the buyer when the house needs work. The second challenge is finding a way to finance the needed repairs. The standard purchase mortgage doesn’t do that because it is based on the lower of sale price or the appraised value of the home in its current condition.
An obvious solution is a second mortgage, but they are not available in the current market except where the first mortgage is too small to do the buyer any good. Second mortgage lenders are still smarting from the steep losses they suffered on second mortgages written during the go-go years leading up to the financial crisis. An unsecured personal loan would be extremely costly if it were available at all.
The solution to this problem is a mortgage on which the loan amount is based on the value of the property after needed repairs have been made. Then one mortgage would cover both a purchase and the repairs needed to make the house habitable. This is future value financing, and it is available through a special FHA program termed “203(k).” This program is available to both home purchasers and existing homeowners who want to rehabilitate their properties in conjunction with a refinance.
The Section 203(k) program is complicated because FHA as the risk bearer has to make sure that the future value of the property upon which the mortgage amount is based actually materializes. To protect itself, FHA requires an appraisal of the property’s value after completion of the planned rehabilitation, in addition to an appraisal of the property “as is.”
Further, before the mortgage is insured, the lender must create a rehabilitation escrow account that contains the money allocated for expenses. FHA has procedures in place to assure that draws against this account are properly disbursed and accounted for, and that the rehabilitation work is completed.
Lenders are encouraged to participate in 203(k)s by the insurance against loss provided by FHA. However, 203(k)s are more complicated and involve more paperwork than the mainstream FHA program, and participating lenders use specially trained staff. As a result, many lenders don’t offer 203(k)s. Lenders that do offer them charge a rate above that on standard FHAs — figure on paying about 0.25 percent more.
The borrower looking for future value financing must deal with multiple players. In a typical case, the real estate agent who shows a potential buyer a house in need of work will recommend a lender who will preapprove the borrower for a 203(k). The preapproval is based on estimates of sale price and repair costs. The sale price estimate is provided by an appraiser selected by the lender who values the property on both an as-is and after-repairs basis. The repair cost is provided by a licensed general contractor who is usually recommended by the lender.
In addition, if the repair costs are more than $35,000, FHA requires the borrower to retain a HUD-approved consultant to help manage the process… Among other things, the consultant prepares the required architectural exhibits, and monitors the improvements at each stage. HUD provides a list of consultants and sets their fee schedule, but does not warrant their performance. Lenders will usually recommend consultants that they have worked with, and this is one case where a lender referral is likely to serve the borrower well. The consultant’s fee can be included in the mortgage.
Increased use of 203(k) in the next few years is expected. Millions of homes emerging from the foreclosure process will enter the market, and many of them have been neglected and need work.
(written by…Jack Guttentag is professor of finance emeritus at the Wharton School of the University of Pennsylvania)
Perhaps its time to get you lined up for this sort of financing… contact me for further information… Call or Email Me Anytime… Isi
Hellooooo My Beautiful Wonderful Bay Area!!… Have been thinking about you lots… however my schedule became just a bit much with ‘To Do’s” lately… Sunny bright days have been shining down upon us and I for one… feel re-energized!!… rays of sunshine beaming down upon us does have that certain power it brings… Happy Just Happy Happy Days!!… Spring is just around the corner!
The days are passing by quickly … those of you still pondering whether to get into the home buying market your wonder days are slowly diminishing… you still have TIME TO GET INTO CONTRACT BY APRIL 30… (in order for you to qualify to get up to $8,000 in tax credits)… but you must be in contract by April 30!!… You still have time but times a wasting… Get Going Now!!… FHA interest rates are rumored to be heading upwards and the requirement minimun of 3 1/2% Down to get into a house is fast going to be a thing of the past… rumor is… its going to be a minimun of 5% down… Better let your fingers do the walking and get qualified NOW….
Please enjoy some of the scenes down at Jack London Square Farmer’s Market on any given Sunday… (one of my most very favorite things to do)…
Just read this article by Gil Linton and thought it was pretty insightful… It struck me that this same train of thought could be applied to how we view the business of real estate here in our beautiful cities by the San Francisco Bay … check it out..
Serving Clients All Over the Eastbay…
Great News Everyone… the First Time Homebuyer Tax Credit due to expire the end of November has been extended and expanded!!… This is awesome… Here’s another chance to get that extra boost and get that home you’ve been wanting in one of the Beautiful Cities in the San Francisco Bay Area… Please spread the word to everyone you know who can use this extra incentive… H-E-L-P is still here!!…
- It appears that the ‘tax credit’ for $8,000, which is due to expire Nov 30th will be extended. The Wall Street Journal reports today that:
- $8,000 first time home buyer will stay til July 1, 2010.
- Existing homeowners will get a credit for up to $6500 on buying another home if you have been in your home at least five consecutive years. This does not apply to investment property.
- This is great news for the move up housing market.
As always… would love to hear back from you… I welcome your feedback… Lets Start a Dialogue!…Save Me in your Favorites and come back and visit all the time!!…
Thanks a Bunch for your time today…
Isi Wu… the realtor for you…
Serving Clients All Over the Eastbay…
Calif. Median Home Price – August 09: $292,960 (Source: C.A.R.)
Calif. Highest Median Home Price by C.A.R. region August 09: Santa Barbara So. Coast $828,750 (Source: C.A.R.)
Calif. Lowest Median Home Price by C.A.R. region August 09: High Desert $111,770 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index – Second Quarter 2009: 67 percent (Source: C.A.R.)
Mortgage Rates – week ending 10/01/09 30-yr. fixed: 4.94% Fees/points: 0.7% 15-yr. fixed: 4.36% Fees/points: 0.6% 1-yr. adjustable: 4.49% Fees/points: 0.5% (Source: Freddie Mac)
1. The American Recovery and Reinvestment Act of 2009 authorizes a tax credit-set to expire in the fall-of up to $8,000 for qualified first-time homebuyers purchasing a principal residence.
2. Builder incentives are aplenty; from including upgraded features to generous financing assistance (keep an updated list handy!)
3. Your chance to move into the school district or neighborhood of your choice has never been better than now.
4. You can take advantage of historically low interest rates on mortgages. Today’s rates are some of the lowest seen in the past (30) years.
5. You have lots of inventory to choose from – take your pick from single family homes, condominiums, garden homes, gated communities, upscale homes, homes on the golf course, and many others.
6. If you are currently renting, a mortgage payment could be lower than your monthly rent, plus you could be building up equity and getting a tax deduction in the process.
1. Please do not believe what you hear or read from the Media.
2. Please listen to the advice of your Realtor.
3. Please believe us when we say the lenders are not willing to give away the properties.
4. Please understand that that the lenders are taking anywhere from 30 to 50 per cent loss on the home.
5. Please understand for the most part the lenders will not take less than listed price.
6. Please understand that when the property is in great condition and in a good location that the there will be multiple offers.
7. Please understand that when there are multiple offers, you need to offer more than listed price.
8. Please understand that real estate in the long run has always gone up in value.
9. Please understand that interest rates will not remain low forever and now is the right time to buy.
10. AND finally, Please understand that there are not any deals!… The deals are here right now!… Homes are ON SALE right now!!!