» Homebuyer Headlines

New Guidelines for C4HAP

admin — Thu, 11 Feb 2010 17:01:56 +0000

This just in from COR housing

1) C4HAP applicant receives an eligibility letter

2) They find a house

3) The realtor makes an offer with language that the purchase price shall be contingent on the appraised value of the property. Per the regulations, the purchase price must be 1% below the appraised value. The County has an appraiser that will be doing the appraisals on a 48-hour turn around. The County is paying for this appraisal and is used for the purpose of determine the purchase price. It does not replace the appraisal you will do for their primary mortgage. The lender will obtain their own appraisal just like normal.

DAP UPDATE and C4 HAP Program

admin — Fri, 29 Jan 2010 16:25:42 +0000

If your following local housing news you might be hearing allot about the C4-HAP program. The C4-HAP program is designed to assist qualified buyers purchase bank owned properties in specific census tracts. Tracts include Anderson Heights and Ravenwood in Anderson, all of Shasta Lake City and the following census tracts in the City of Redding 101-1,101-2,103-1,103-2,107.01-1,107.01-2,107.01-3,113-1,113-2,113-3,113-4,114-1.

If your wondering if your target neighborhood is inside one of these tracts you can check out the online mapping from the U.S. Census Bureau or just give me a call and I will give you a hand.

This is a pretty limited program and hard to tell if there is still time to take advantage of this opportunity but it can’t hurt to get on the list for an application. According to the City of Redding housing division the first 20 applications have already been sent out. As not everyone will qualify or complete the process they will keep moving down the list until funds are depleted.

There are some quirks that will have to be dealt with for buyers using C4-HAP funds. As with DAP (or Homebuyer Program as they now call it) the house must pass the Home Quality Standards ( HQS ) inspection to qualify for funding. In order to pass the home has to be pretty move in ready or the bank must be willing to repair. I have closed a few DAP / REO properties so I know it can be done but not every bank owned home will work out.

The really unusual twist to C4-HAP is the pre-offer appraisel process they are requiring. Unless this is modified to be a post offer value assesment it has the potential to make it very difficult to use C4-HAP. What I am being told right now is that a County Appraiser must assign a value to the property before offer is submitted to seller and the offer must be for at least 1% less than this value. This process could take a minimum of 24 to 48 hours once property is identified. This could pose a problem as move in ready REO homes are in such high demand these days we are seeing multiple offers the day they hit the market. I have posed this question to the various housing authorities involved with the C4-HAP and sounds like this could be modified but no answer on that yet. As for lender requirements I recieved this from one local lender.

3% down payment can be from gift
Debt ratio’s requirement 26 – 49% (this will determine amount of C4-HAP contribution)
Applicant must not own any other real estate
Normal credit standards apply (use of Alternate Credit for thin profile is acceptable)
Subject Property must be valued by County Appraiser prior to offer being submitted (offer submitted must be for 1% less than appraised value)
Subject Property must meet HQS (Home Quality Standards)

As C4-HAP is only targeted for REO properties it can’t be used on a conventional seller owned home for sale. For the purchase of a non-REO home buyers should check with the City of Redding DAP or Shasta Lake City DAP to see if they qualify for their DAP programs (no longer called DAP but basically the same thing). Both now have funds for qualified applicants. Shasta County DAP should have funds as early as June 2010.

00′s getting a bad rap? Decade in Review

admin — Sun, 03 Jan 2010 18:52:24 +0000

If you caught any of the year in review shows on TV or radio or read the paper you couldn’t help but notice the overwhelming focus on a decade lost to a financial meltdown. Could it be the 00′s are getting a bad rap? I came across an article in the Union Tribune that took a decade view of the San Diego real estate market and decided to apply it to Redding.

If you purchased a home in Redding in 2000 you would have paid on average about $150,000. By the end of 2009 the average sales price of a home in Shasta County was $215,000, a 43.3% increase over the decade. Because so much of our market is price range specific I took a look at a few area neighborhoods to see how they fared over the last 10 years.

Ravenwood had a whopping 73.8% increase from $123,076 in 2000 to $213,993 at the end of 2009.

Starview Estates homes were selling for $82,760 in 2000 and $135,720 by the end of the decade. A 63.9% increase.

Western Ranches had a 40.9% increase from $178,867 to $252,182 over this time.

Sunset Terrace was the worst performer I found at 12.4% ($250,227 to $281,413)

How long will it take for home prices to regain 2006 levels is impossible to predict but 2018 is the estimate quoted in the union-tribune article. If that were to occur here the average home purchased in 2010 for $215,000 would be worth $323,835 in 2018 (50.6% gain).

My take away from this? Real Estate remains a very solid long term investment. I believe that Real Estate is unique in that those with patience and discipline are able to leverage a relatively small initial investment combined with a monthly housing expense (mortgage instead of rent) and realize significant gains over time. It is my opinion that we are in a market most likely to produce very good returns for buyers.

Interested in taking advantage of this opportunity? Contact me at 530.515.9097 or reddinghomes@gmail.com to get started.

Fighting Climate Change with Free Stuff

admin — Tue, 15 Dec 2009 23:00:46 +0000

Perhaps we can’t all go to Copenhagen to work on climate change issues but there is something we can do here at home and it’s free. If you know anyone with a low/mid income or who receives assistance such as SSI or Medi-Cal and lives in a home with PG&E gas or electric service let them know about the Energy Partner Program. Available to both renters or owners the Energy Partner Program helps those who meet income guidelines obtain energy saving assistance free of charge.

Tell your friends who rent, first time home buyers, seniors on fixed incomes, landlords who have qualifying tenants or anyone else who can take advantage of this great program.

Details at http://www.pge.com/energypartners/

Real Living in Redding

admin — Wed, 11 Nov 2009 07:09:12 +0000

Buying or selling your home? It’s got to be real. Real Estate Done Your Way.

Real Living Merges with GMAC Real Estate

The President Signs Tax Credit Bill

admin — Fri, 06 Nov 2009 16:01:58 +0000

President Obama is set to sign the home buyer tax credit bill today at a White House signing ceremony. The extension is part of a larger stimulus bill that received overwhelming bipartisan support in Congress.

No Time to Lose

admin — Thu, 05 Nov 2009 20:28:54 +0000

The House voted 403-12 today to extend and expand the tax credit to include many buyers who already own homes. The Senate passed this by a 98-0 vote yesterday and President Obama is expected to sign asap.

$8,000 for first-time homebuyers
$6,500 for move-up homebuyers
Must be in contract by April 30, 2010 and close escrow by June, 30.

If you want to take advantage of this tax credit it would pay to get started right away. No guarantees that there will be future credits. “This is probably the last extension,” said Sen. Johnny Isakson, R-Ga.

This is especially important for move-up buyers who need to sell in order to buy their next home during tax credit period. The good news for move-up seller/buyers is that this time pressure combined with the extra $8,000 available to first-time buyers will most likely boost entry level housing prices.

Either way, no time to lose.

Senate OK’s Homebuyer Tax Credit 98-0

admin — Thu, 05 Nov 2009 03:39:05 +0000

The senate votes to extend and expand 1st time home buyer tax credit to include $8,000 for first-time buyers and $6,500 for move-up buyers. The House is expected to follow and President Obama to sign in a matter of days.

Source: LA Times

Home Buyer Tax Credit Extension Likely

admin — Tue, 03 Nov 2009 23:11:44 +0000

News coming from Washington is that the first-time homebuyer tax credit will be extended and expanded to include move-up buyers who have been in their homes at least 5 years. More at Forbes.com

Shop for best loan

admin — Tue, 03 Nov 2009 00:38:27 +0000

One of the very most important decisions first time buyers need to make prior to buying a home is financing. Because the cost of borrowing can vary quite a bit from one lender to another buyers should start shopping for a lender early in the buying process.

You should interview several lenders before deciding. Insist that the lenders you interview provide you with a detailed Good Faith Estimate (GFE) that itemizes all lender fees and charges and shows the Annual Percentage Rate (APR). The APR is the interest calculated after all loan related costs are taken into account.

In some cases the interest rate one lender quotes might appear to be low but after their fees are added on the APR may be considerably higher than another lender who has more reasonable charges.

Not only does the dollar amount of fees charged vary from lender to lender so do the types of charges they may ask you to pay. For example, one lender may charge you a 1% loan origination fee on an FHA loan and another lender may not charge a loan origination fee at all. In fact, I recently reviewed the charges one local mortgage broker was charging his clients and was shocked to see that in addition to a loan origination fee he was charging his clients a substantial “loan application fee”, an “admin fee”, an underwriting fee and a number of other extras that increased the buyers total cost to borrow by a tremendous amount. In this case the buyer/borrower had no idea that loan fees varied from lender to lender and assumed that whichever lender quoted lowest rate was the best choice.

The amounts we are talking about are not small figures either. These type of charges can be many thousands of dollars. Over $5,000 difference in lender charges between two lenders GFE’s on one recent quote I reviewed and that was on a loan of less than $150,000!

With that in mind here are a few tips.

Getting prepared early to shop for a loan;

Check your credit report for accuracy https://www.annualcreditreport.com/cra/index.jsp

Gather your financial records ( 2 years tax returns, W2’s, Pay Stubs, Bank Statements, IRA’s, 401k’s, Investment accounts and other monthly bills or income)

Avoid opening or applying for new lines of credit.

Start saving cash.

Consider postponing career or job changes.

Shopping for a loan;

Consult your Realtor or other trusted advisor for a list of reputable lenders that include Banks and Mortgage Brokers.

Schedule interviews with at least 3 lenders. (include both Banks and Mortgage Brokers)

Print out this HUD lender GFE comparison work sheet and take with you to lender interviews.

Insist on a printed detailed GFE (Should be based on the same purchase and loan amounts on all lenders estimates)

Ask the lender to explain the charges and who they benefit.

Keep GFE’s for later reference.

Don’t even consider using a lender if;

If lender refuses or attempts to avoid providing a detailed GFE

If lender encourages you to provide false or misleading information

If lender guarantees that the home you purchase will be worth more than purchase price in the future.

If lender attempts to persuade you to borrow more money than you can reasonably afford.

If lender insists that you use a particular Realtor or Broker.

Be honest and forthcoming with your financial and employment information when you are interviewing the lenders. Let them know you are shopping for a loan and don’t want credit history checked over and over. If you know your credit score let them know. If not, only have it ran once during the loan shopping process. A good lender should be able to provide you with an estimate based on your verbal information.

Keep in mind that the GFE’s you get during lender interview stage are for the purpose of selecting a lender to work with when you find your home. A new GFE that is specific to your purchase offer financing should be provided to you when you actually apply for the loan. The important thing is that both GFE’s have similar charges and fees. Keep your GFE and bring it with you to your signing at close of escrow to compare to your closing statement.

The advantages of interviewing, selecting and getting pre-approved by a lender early in the home buying process are many. Not only will you have an idea of what price home you can afford including total monthly payment amounts, loan costs, necessary down payment and required source of down payment funds but you will also be in a strong position to act quickly when you find the home you want to buy. In this market that can be very important.

In some cases the interest rate one lender quotes might appear to be low but after their fees are added on the APR may be considerably higher than another lender who has more reasonable charges.

Not only does the dollar amount of fees charged vary from lender to lender so do the types of charges they may ask you to pay.

For example, one lender may charge you a 1% loan origination fee on an FHA loan and another lender may not charge a loan origination fee at all. In fact, I recently reviewed the charges one local mortgage broker was charging his clients and was shocked to see that in addition to a loan origination fee he was charging his clients a substantial “loan application fee”, an “admin fee”, an underwriting fee and a number of other extras that increased the buyers total cost to borrow by a tremendous amount.

In this case the buyer/borrower had no idea that loan fees varied from lender to lender and assumed that whichever lender quoted lowest rate was the best choice.

With that in mind here are a few tips.

Getting prepared early to shop for a loan;

Check your credit report for accuracy https://www.annualcreditreport.com/cra/index.jsp

Gather your financial records ( 2 years tax returns, W2’s, Pay Stubs, Bank Statements, IRA’s, 401k’s, Investment accounts and other monthly bills or income)

Avoid opening or applying for new lines of credit.
Start saving cash.
Consider postponing career or job changes.

Shopping for a loan;

Consult your Realtor or other trusted advisor for a list of reputable lenders that include Banks and Mortgage Brokers.
Schedule interviews with at least 3 lenders. (include both Banks and Mortgage Brokers)
Print out this HUD lender GFE comparison work sheet and take with you to lender interviews.
Insist on a printed detailed GFE
Ask the lender to explain the charges and who they benefit.
Keep GFE’s for later reference.

Don’t even consider using a lender if;

If lender refuses or attempts to avoid providing a detailed GFE
If lender encourages you to provide false or misleading information
If lender guarantees that the home you purchase will be worth more than purchase price in the future.
If lender attempts to persuade you to borrow more money than you can reasonably afford.
If lender insists that you use a particular Realtor or Broker.

Keep your GFE and bring it with you to your signing at close of escrow to compare to your closing statement.