Pre-Qualifying for a Mortgage

One of the first steps to take as a potential home buyer is to get pre-qualified for a loan. This step helps both you and your lender learn just how much home you can afford. And you should begin this process before you even start looking for a home.

According to the Federal Housing Administration (FHA), their pre-qualification essentials include:

• Having a steady employment history, at least two years with the same employer.

• Consistent or increasing income over the past two years.

• Credit report should be in good standing with less than two thirty day late payments in the past two years.

• Any bankruptcy on record must be at least two years old with good credit for the two consecutive years.

• Any foreclosure must be at least three years old with good credit for the past three years.

• Mortgage payment qualified for must be approximately 30 percent of your total monthly gross income.

Other lenders' ideas regarding pre-qualification are all similar to those outlined above. A mortgage lender will look at your credit report, earnings, debts, and savings in order to see how much home you really can afford.

Why is this important? In recent years there has been a “mortgage crisis,” where the industry was rampant with fraud and with loans that put homeowners into situations they could not afford. As payments rose, homeowners found themselves unable to meet their monthly obligations. According to Realtytrac.com and their U.S. Foreclosure Market Report, in January 2010, one in every 409 households in the country had received a foreclosure filing.

Since pre-qualification for a home loan typically costs you nothing, but gives you both a goal of what homes are in your affordability range, as well as how much money you should look to have saved for a downpayment, you can hardly wait to take this step.

What if the home you want is out of your reach? Experts recommend reducing your debt and saving up a larger amount for your down payment. Let's say your dream home is $225,000, but you only qualify for a $180,000 loan. If you have a downpayment of $45,000, then you are ready to make a move!

During the pre-qualification process, you will be expected to provide the following information:

• your gross monthly income

• your total monthly payments (car payments, credit cards minimums, child support payments, student loan payments, any other monthly debts)

The lender will be looking to see that your debt to income is below about 40 percent, and the lower the better. So, if you are looking to buy in the near future, be sure to talk to your lender soon! 

Written by Carla Hill
March 8, 2010 Published on Realty Times

Thinking about Buying or Selling? 
Call Alvin's Team Today! 877-651-7810 
Or visit our website: www.LivingLakeTahoe.com

How Mortgage Rates Compare

You've heard it all across the media. Interest rates are at historic lows. If you are new to the mortgage process, these figures and statements give you little frame of reference.

Let's take a moment to look at where interest rates have been over the last few decades, and what today's rates really mean for homebuyers.

Interest rates are affected by a gamut of factors.

According to the Federal Reserve Bank of New York, "Lower interest rates make it easier for people to borrow in order to buy cars and homes. Purchases of homes, in turn, increase the demand for other items, such as furniture and appliances, thus providing an additional boost to the economy. Lower interest rates mean that consumers spend less on interest costs, leaving them with more of their income to spend on goods and services."

And this is, after all, what you want people to do in a down economy. You want them to reinvigorate the economy with spending.

The Fed continues, "If the rates that consumers and businesses have to pay to borrow rise too rapidly, however, spending may decline, leading to an economic slowdown."

So, it is a intricate dance the powers that be must perform in order to steer the economy the best they can. They, namely the Federal Reserve and Banks, are seeking stable prices, high employment rates, and sustainable growth in the economy.

30 years ago, in 1980, when many first-time home buyers parents were making home purchases, Freddie Mac reports that the 30-year fixed rate mortgage hit a staggering 16.32 percent.

Let's compare that in relation to today's interest rate, averaging around 4.5 percent.

• In the most basic terms, a 30-year fixed-rate mortgage for $100,000 at 16.32 percent, will cost you around $1,450 a month.

• For the same mortgage at a 4.5 percent rate, you'll be paying $580 a month.

The difference is astounding, and this is the main reason the media is shouting news about interest rates. If you are in the position to buy, now could very well be the time. 


Written by Carla Hill
August 26, 2010 

Thinking about Buying or Selling? 
Call Alvin's Team Today! 877-651-7810 
Or visit our website: www.LivingLakeTahoe.com

Social Benefits of Housing

Recent research from the National Association of Realtors (NAR) outlines the importance of homeownership's relationship with the economy, but of the social benefits it provides.

NAR reports, "The economic benefits of the housing market and homeownership are immense and well documented. The housing sector directly accounted for approximately 14 percent of total economic activity in 2009."

What sorts of social benefits are provided through homeownership?

According to the study entitled, "Effects of Homeownership on Children: The Role of Neighborhood Characteristics and Family Income", teens from households of homeownership have a higher rate of staying in school than teens from rental households. In addition, daughters of homeowners also experience a lower rate of teen pregnancy.

In terms of education, in the study, “Measuring the Benefits of Homeowning: Effects on Children,” there have been significant findings that homeownership has a strong positive effect on educational achievement.

The NAR report goes even further to show that "the average child of homeowners is significantly more likely to achieve a higher level of education and, thereby, a higher level of earnings."

Homeowners deal daily with issues pertaining to home maintenance and financial responsibility, something NAR research shows teaches children "life management skills."

Studies have also found that homeownership increases the amount of civic participation in a community. This is due in part to homeowners feeling that they have a higher, more permanent stake in their community and its issues.

For example, a study by Glaeser and DiPasquale found that 77 percent of homeowners said they had at some point voted in local elections, compared with 52 percent of renters.

In addition to these great social benefits, higher levels of homeownership have shown to reduce crime rates in communities. "Homeowners have a lot more to lose financially than do renters. Property crimes directly result in financial losses to the victim. Furthermore, violent non-property crimes can impact the property values of the whole neighborhood. Therefore, homeowners have more incentive to deter crime by forming and implementing voluntary crime prevention programs." (NAR)

For more information about these studies, please visit Realtor.org. 


Written by Carla Hill
August 19, 2010 

Thinking about Buying or Selling? 

Call Alvin's Team Today! 877-651-7810 
Or visit our website: www.LivingLakeTahoe.com

Buyers: Why Green is Worth It

For new and existing home buyers alike, the options to "green up" homes abound.

Green upgrades on homes offer two-fold benefits. They contribute to a healthier environment, both now and in the future, and they can save homeowners big when it comes to energy costs.

How much impact does a green home have on the environment, you ask? The government reports that “Energy Star qualified homes built in 2009 are the equivalent of:

• Eliminating emissions from 51,645 vehicles

• Saving 312,399,672 lbs of coals

• Planting 85,372 acres of trees, and

• Saving in the environment 612,678,574 pounds of CO2.”

Many homebuyers shy away from green construction and green upgrades because of the upfront cost. But while some estimates have put the construction cost difference at 17 percent, recent estimates from The World Business Council for Sustainable Development put the cost of green construction only 5 percent higher than traditional.

Green building means using recycled, renewable, and native building materials. It also means tapping into the energy sources that nature has to offer, including solar and wind.

Here are a few ideas of simple “going green” ideas to get you thinking.

Energy Star Appliances: Appliances are an easy way to make a home more friendly to the environment. One of the fastest ways to explore your options is to visitenergystar.gov. At this government site you can find our more information on tax credits and rebates. As an example of Energy Star appliances and their efficiency, qualified washers use 30 percent less energy and over 50 percent less water.

Toxin-free Paint: Also known as “zero-voc, low-voc, and natural” paint, this is a good option for families that have asthma sufferers. According to the EPA, “Paints, stains, and varnishes release low level toxic emissions into the air for years after application.”

Renewable Flooring: Looking for a beautiful way to incorporate wood flooring into your home? Consider bamboo flooring. How is bamboo a green option? It grows and renews itself quickly, unlikes most woods, making it an ideal and cost effective option for green flooring.

Passive Solar: In effect this option can cost you nothing, if you choose the right designed home. The goal is to design to take advantage of the sun's positioning throughout the year. o that its windows, roof, doors, flooring, etc to take advantage of the sun's position through the year.

Low Flow Toilets: Looking to keep utility costs down in your new home? Low flush toilets use 1.6 gallons per flush versus 3.5 in traditional toilets. That's a lot of water saved. Worried about the efficiency of low flow? There have been major strides made in recent years in improving these toilets. Be sure to talk to your plumber about your options.

Hopefully, these items spur you to seek out your own ways to make your home as green as it can be. 

Published on Realty Times Written by Carla Hill

February 22, 2010 

Thinking about Buying or Selling? 

Call Alvin's Team Today! 877-651-7810 
Or visit our website: www.LivingLakeTahoe.com

Buyers Advice: Housing Affordability

You may be asking yourself, "Is now a good time to buy?" It's a very important question. As a buyer, you're concerned with getting the best deal possible. Will you be buying at the top of the market? Or will you purchase when the market is in favor of you, the buyer?

According to the National Association of Home Builders (NAHB) and their Home Builders/Wells Fargo Housing Opportunity Index (HOI), affordability is high for the 5th consecutive quarter.

How is affordability calculated? In general terms, if housing costs don't exceed 30 percent of the monthly household income, then it meets the standards. Anything more than 35 percent is too high.

"Today’s report is very encouraging because it indicates that homeownership continues its more than year-long trend of remaining within reach of more households than it has for almost two decades," said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. "With interest rates still hovering at low levels, companies starting to hire new employees and the economy beginning to rebound, this should encourage more home buyers to enter the market and help further stabilize housing and the economy."

The HOI indicates that 72.2 percent of all new and existing homes sold in the first quarter of this year were affordable to families earning the national median income of $63,800.

Some of the best markets for affordability is:

• Syracuse, New York

• Dayton, Ohio

• Grand Rapids-Wyoming, Michigan

• Indianapolis, Indiana

• Youngstown, Ohio, and

• Bay City, Michigan

Of course, affordability, like most aspects of the housing market, is a local issue. The local economy has a direct effect on home prices, market favor (buyers or sellers), and the like.

Take for example, New York-White Plains-Wayne, New York-New Jersey. The NAHB says this region continued to lead the nation in poor affordability. Less than 21 percent of all homes sold in the 1st quarter 2010 were affordable.

Other markets where affordability is low:

• San Francisco, California

• Honolulu, Hawaii

• Santa Ana-Anaheim-Irvine, California, and

• Los Angeles-Long Beach-Redwood City, California

Be sure to talk to your local REALTOR® about where your local market fits into the affordability equation. 


Published on Realty Times

Written by Carla L. Davis

Thinking about Buying or Selling? 
Call Alvin's Team Today! 877-651-7810 
Or visit our website: www.LivingLakeTahoe.com

Should You Buy A Condo?

Condos can be a great option for many buyers. But is this type of home the best fit for you? Let's examine some of the pros and cons of buying a condo.

Pros

Maintenance. Most condominiums require very little maintenance from their tenants. Yard work and the like are done and paid for through your monthly dues. Reserve funds are saved up by the condo association for larger periodic repairs, such as roof replacement and painting.
Amenities. In many condominium communities you'll find you have access to a clubhouse, pool, exercise facilities, concierge, or even door security. These great perks cost you nothing extra and are quite the draw for many buyers.

Condo Board. Neighborly disputes happen. You like it quiet. Your neighbor loves their music. Instead of having to address the issue yourself, you can always rely on the condo board to ensure that order is kept, both of the grounds and of the residents.

Cost. In many cases, you can find a condo in your preferred neighborhood for a cheaper price than a single family detached home. This can come in handy when parents want children to go to the best public schools in the area. They may not be able to afford the house around the corner, but they can afford the condo in a community.

Social Living. Many condo residents find that their quality of life is improved by the neighbors they develop friendships with. Some communities have social gatherings and mixers on a regular basis.

Cons
Monthly dues. While the condominium unit itself may come with a cheaper price tag, once you add in monthly dues or fees you could see yourself being priced out of the property. Condo fees range widely, but in some markets and communities can be several hundred dollars a month. And remember, these fees continue even once the property is paid off.

Limited Outdoor Space. Yes, you may have a patio or a balcony, but most condominiums lack any sort of yard space. And what outdoor space the community does offer, is of course shared space with the other residents.

Limited Space in General. You may luck out and find a condo with a garage or storage units. If so, you are in the minority. If you have lots of things to store, and no extra space to put them, remember to add in a storage rental space into your monthly expenses before buying.
Less Privacy. You share a wall with your neighbors. You may even have neighbors above or below you. In this case, remember the noise factor.

Resale. There are fewer buyers looking for condos. Large families are generally on the hunt for a single family dwelling.

Poor Management. What happens if your condo manager hasn't kept enough money in reserve for repairs? The extra expenses are earned through a "special assessment" of the residents. This means you may be slapped with a bill -- unexpectedly -- costing you hundreds of dollars. Poorly managed condos can also run down very quickly. Broken sidewalks, overgrown hedges, and disorderly residents spell disaster for resale value.

Condo Board. You notice this was on the pro side of the list as well. That's because while a board can be your best friend for helping keep order and for dealing with neighbor issues best left for the management, they can also be a little too heavy on the rule making. Some condo boards are very strict. And that extra gnome you wanted to display, just might cost you more than you bargained for.

Subletting. Did you know that a condo board can make it "illegal" for you to rent your unit out? Be sure to check out the rules before you buy, especially if you are considering using the property as a rental unit at some time.

Published on Realty Times
Written by Carla Hill July 1, 2010

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Mortgage Basics

Points, fees, and adjustable rates. If you are brand new to the home buying arena, then mortgage terminology can be as foreign as reading Greek.
The famous quote by Sir Francis Bacon rings true for all prospective buyers, "Knowledge is power." Use the following glossary of terms to help you raise your own awareness.
Underwriting: This lender process is used to determine how much of a risk you and your mortgage would be to their company. An underwriter will evaluate such things as your credit, available collateral, as well as your employment and current debts.
Points: Broken into two categories, discount and origination, this term refers to a fee paid when obtaining a mortgage.
Discount -- These fees are tax deductible. You can assume to pay 1% of the total loan amount for each point. Paying points can reduce your final interest rate.
Origination -- Less popular with buyers, as they offer no real benefit to the borrower, these points are fees paid to the lender or loan officer in exchange for their job of evaluating and processing your mortgage loan. These points are not tax deductible.
Fixed Rate: Your interest rate will remain the same throughout the life of the loan.
Adjustable Rate: Your interest rate is adjusted periodically. There also may be a penalty for paying off the loan before its maturation date.
Amortization: The decrease in the principle owed on a home, as it decreases over the life of the loan.
Down Payment: A portion of your total home cost that is paid up-front. It can result in a smaller monthly payment and a lower principle balance.
Good Faith Estimate: RESPA requires the lender to provide a borrower with an estimate of the fees that will be due at closing. They must provide this within three days of taking your application.
Escrow: Your funds are held in an escrow account by a third party until the closing of your transaction.
Refinancing: There may come a time during the life of your loan that you will wish to refinance. Perhaps you want to take advantage of lower interest rates or to consolidate debt. If you are eligible, in great credit standing, you may be able to do just that.
For more information the mortgage process, be sure to talk with a lender or your real estate agent.

Written by Carla Hill

July 19, 2010

Improve Your Credit Score

Healthy credit scores have never been more important. As banks tighten their lending standards, it's important to have your score as high as possible.
A FICO score is a number, in general from 300 to 850, that is formulated from your payment history, including such things as amounts of money owed, length of your credit history, new credit accounts open, and how you have used your credit. Age, salary, race, education, and religion do not affect your score. You can't buy a good score; you can only build one over time by demonstrating that you are a responsible borrower.
To improve your credit score, start with these steps.
1. Pay your bills on time. This seems like a simple enough feat, but in hard economic times, more and more borrowers are finding themselves hard-pressed with the decision of what bill to pay. If you find yourself having a hard time paying bills, be sure to talk with the lender or company you owe. They may have programs or suggestions that will help you avoid having your bill sent to collections.
2. Don't let items go to collections. Once an item is sent to collections, your credit report will suffer. This ding will stay on your report for seven years.
3. Don't open other new credit lines when applying for a home loan. You may want the new car or living room set, but the home buying process is not the time to open multiple new accounts. This is a sure-fire way to temporarily reduce your credit score. If you do this before finalizing your mortgage, you many find yourself stuck with a higher interest rate.
4. Monitor your report on a regular basis for errors and cases of identity theft. Errors do happen. To get them corrected quickly, be sure to contact both the organization that provided the erroneous information, as well as the credit bureau. Identity theft happens. And it is your responsibility to identify it and address it!
5. Pay down credit cards. Carrying high balances on credit cards can severely affect your credit score. Think of it this way. If you have a grand total of $10,000 worth of credit limits available, but you owe $5,000 on all of your cards put together, you are using half of your available credit!
The best loans and mortgages are available to borrowers with FICO scores 700 and above. Experian, one of the major credit reporting agencies, reports that the average credit score is 693.
For a look at your credit report, visit the government sponsored site, myannualcreditreport.com. You may access your report three times a year free of charge.

Published on Realty Times
Written by Carla Hill
August 10, 2010

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Avoid Common First-Time Buyer Mistakes

If you are in the market to buy your first home, you may have already realized that the process involves many different levels of knowledge and understanding. Chances are many steps of the process are completely foreign to you.

By arming yourself with an arsenal of important questions, as well as with a team of professionals, you are sure to avoid some of the most common first-time homebuyer mistakes.

1. Hire the Right Agent. Personalities and experience levels range greatly, just as with any profession. Consider interviewing several local agents before deciding on which one to hire. Do you want a new agent who is sweet, patient, and ready to answer lots of questions? Or would you prefer a seasoned agent who gets you the best deal, but has less than stellar people skills? The choice is entirely yours, neither one being better than the other, but will make a big difference on how you feel about the process.

2. Interrogate the Lender. There's no need to play good cop, bad cop. This simply means you need to ask every question that comes to mind. In the wake of the predatory lending storm, its important to be sure you understand exactly what your mortgage will entail. Be sure to compare rates with other lenders to be sure you are getting the best rate. You can also ask for par pricing, which is the rate without points.

3. Be Ready To Act. In many markets, highly desirable areas come with a large amount of competition. Many buyers may be looking at the same homes as you. If you hesitate, you may very well lose out on your dream home. The best advice? Don't begin the process of viewing homes unless you are really ready to buy.

4. Think Long Term. You love the house, and you can deal with the small bedrooms and laundry room in the garage, but will the next set of buyers? If you are planning on selling the home in the next few years, you must remember to consider the resale value of a home. Is this neighborhood appreciating quickly, or are homes losing value?

5. Be Competitive. We all want to buy a home for the best bargain price possible, but a careful consideration is respecting the seller. You may view a low ball offer as a starting point, but a seller may view it as an insult and refuse to answer your offer. If you really want a home, be reasonable with your starting bid.

Use these simple tips to avoid some of the most common buyer mistakes! 


Written by Carla Hill
August 5, 2010 Published on Realty Times

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810 
Or visit our website: www.LivingLakeTahoe.com

Mortgage Rates Down Again as GDP is Revised Lower

McLean, VA – Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), with the 30-year and 15-year fixed-rate mortgages reaching record lows for this survey. (The 30-year fixed-rate survey began in 1971, and the 15-year began in 1991.) The 5-year adjustable rate mortgage also reached its lowest level since Freddie Mac began tracking it in 2005.

30-year fixed-rate mortgage (FRM) averaged 4.49 percent with an average 0.7 point for the week ending August 5, 2010, down from last week when it averaged 4.54 percent. Last year at this time, the 30-year FRM averaged 5.22 percent.

15-year FRM this week averaged a record low of 3.95 percent with an average 0.6 point, down from last week when it averaged 4.00 percent. A year ago at this time, the 15-year FRM averaged 4.63 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.63 percent this week, with an average 0.6 point, down from last week when it averaged 3.76 percent. A year ago, the 5-year ARM averaged 4.73 percent.

1-year Treasury-indexed ARM averaged 3.55 percent this week with an average 0.7 point, down from last week when it averaged 3.64 percent. At this time last year, the 1-year ARM averaged 4.78 percent.

Frank Nothaft, vice president and chief economist at Freddie Mac, said, "And yet again, interest rates for fixed-rate mortgages and now the hybrid 5-year ARM fell to all-time record lows this week following the second quarter GDP release. Annual revisions cut the cumulative GDP growth in half over the past three years ending in the first quarter of 2010 from 1.4 percent to 0.6 percent. This reduces inflationary pressures and allows longer-term rates room to ease.

"More recently, housing investment picked up in the second quarter of this year as the homebuyer tax credit spurred new and existing sales and low mortgage rates encouraged remodeling. Fixed residential investment added 0.6 percentage points to second quarter real GDP growth following two quarters of decline." 


August 6, 2010 , Published on Realty Times

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May Round Up: Rates Tick Down

In Freddie Mac's results of its Primary Mortgage Market Survey the 30-year fixed-rate mortgage (FRM) averaged 4.78 percent with an average 0.7 point for the week ending May 27, 2010, down from the previous week when it averaged 4.84 percent. Last year at this time, the 30-year FRM averaged 4.91 percent. The 30-year FRM has not been lower since the week ending December 3, 2009, when it averaged 4.71 percent.

The 15-year FRM this week averaged 4.21 percent with an average 0.7 point , down from the previous week when it averaged 4.24 percent. A year ago at this time, the 15-year FRM averaged 4.53 percent. The 15-year FRM has not been lower since Freddie Mac started tracking the 15-year FRM in August of 1991.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.97 percent this week, with an average 0.7 point, up from the previous week when it averaged 3.91 percent. A year ago, the 5-year ARM averaged 4.82 percent.

The 1-year Treasury-indexed ARM averaged 3.95 percent this week with an average 0.6 point, down from the previous week when it averaged 4.00 percent. At this time last year, the 1-year ARM averaged 4.69 percent. The 1-year ARM has not been lower since the week ending May 27, 2004 when it averaged 3.87 percent.

"These low rates will help to elevate home-buyer affordability and soften the effects of the sunset of the home-buyer tax credit," said Frank Nothaft, Freddie Mac vice president and chief economist. "The credit substantially propelled home sales, as reflected in the strength of the April existing and new home sales, which were up 7.6 percent and 14.8 percent, respectively.

"The latest information from Freddie Mac's repeat-transactions home-price indexes also show some encouraging signs, with national metrics either slowing their descent or showing a modest rise, suggesting that the sharp downturn in national indexes since 2006 may be nearing an end. The S&P/Case-Shiller Index for the United States was up 2.0 percent year-over-year, and while the FHFA Purchase-Only Index and Freddie Mac's Conventional Mortgage Purchase-Only indexes showed declines of 3.1 percent and 1.1 percent, respectively, from first quarter of 2009 to first quarter of 2010, the FHFA's monthly U.S. index showed a pickup in values from February to March."

Do You Marry the Credit Score?

Some think that the good credit will outweigh the bad credit. Or some hear that lenders average everyone's credit scores together. If Jane has an 800 credit score and John has a 400 credit, score, their combined score would be 800 + 400 = 1200 divided by two, giving a not-so-terrible-after-all score of 600. Okay, close to terrible but certainly nothing near 400.

Of course, that's not so. In either case. Good credit doesn't erase bad credit. In fact, bad credit will kill the deal altogether. And scores aren't averaged, they're examined independently and the 400 score would render the 800 score impotent.

If a spouse or joint borrower has bad credit, and the person with good credit can qualify on her own, then leave the person with bad credit off the mortgage and simply include him on the title.

How Can You Tell If You Are In a Buyer's Market?

Markets operate on the basis of supply and demand. If you have a local market where the supply of homes is significantly greater than demand, you will have a market where home sales slow, prices stall or drop, properties are more affordable and purchasers are typically able to negotiate significant concessions from sellers. And that, in a nutshell, is a buyers market.

Today many local markets favor purchasers. No less important, interest rates are at the lower end of the scale on an historic basis, and you can do well with conservative, reasonable financing such as FHA, VA and conventional loans. Relative to the past few years, now is a good time to buy in many areas.

Buyers Often Overlook Insurance Costs

Insurance is usually the last thing people worry about when they are buying a new home. According to the Insurance Information Institute, that's a mistake, because it will be an expense a buyer will have as long as they own the property.

Here are some key issues that the institute urges every buyer to consider:

How far is the home from the fire department? A location close to the station usually means lower insurance costs.

What is the condition of the plumbing and electrical systems? Older and poorly maintained systems cost more to insure.

Does the property meet current building codes? Up-to-date properties are safer and also cheaper to insure.

What about wind damage? If insurance against windstorms is required, is private insurance available or will the buyer have to rely on a state-run program? If there a windstorm deductible, how high is it?

Is the home vulnerable to flooding? Floods aren't covered under a standard homeowner policy, although most major insurers will provide it through the National Flood Insurance program. How much the insurance costs depends on where the property is.

Is there earthquake risk? Earthquake insurance requires an endorsement or a separate policy. 


Written by Realty Times Staff, Published on Realty Times

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810 
Or visit our website: www.LivingLakeTahoe.com

Going on a Financial Diet

Many Americans live on a margin, spending more than they earn, using credit to make up the difference, and saving at near invisible rates.

Living past their means, they use credit to buy houses, cars, and merchandise that many experts would suggest they really can't afford. This "good life" is great, until the person is no longer able to make their payments. And as unemployment rates hover over 9 percent (U.S. Bureau of Labor Statistics), more and more Americans are finding themselves in this predicament and subsequently facing bankruptcy, foreclosure, and even homelessness.

Journalist Laura Rowley, wrote for Yahoo! Personal Finance earlier this year, "Almost half of Americans reported having trouble keeping up with monthly expenses and bills, according to a 2009 survey on by FINRA Investor Education Foundation. Nearly one-quarter reported overdrawing their checking accounts."

Americans are saving at an alarmingly low rate. According to the Bureau of Economic Statistics (BEA), "Personal saving as a percentage of disposable personal income was 4.0 percent in May." This is up only 0.2 percent from the month earlier.

Are you one of the millions who need to put your debt on a diet?

It's a hot topic these days. So hot, in fact, that talk show giants, like Oprah Winfrey have featured series on how to reduce debt, increase your savings, and secure your own future.

This financial restructuring just might help you save your home one day. Take a moment to look over these tips.

1. Credit Cards: Financial expert Suze Orman said it best, "You must pay more than the minimum payment every month, as much more as you possibly can. If you owe a credit card company $5000 at 18 percent interest and all you do is pay the minimum each month it will take you over 30 years to pay it off." Call your card companies and try to negotiate a better rate, as well. Pay off the cards with the higher interest rates first.

2. Emergency Fund: In today's economy it is important to be prepared for long stretches of unemployment. Each household should have an emergency fund equal to eight months worth of bills. This means if your expenses for one month equal $3,000, you should have at least $24,000 in savings. Laura Rowley reports, "Only 49 percent of FINRA respondents reported that they had set aside funds sufficient to cover expenses for three months in case of sickness, job loss, economic downturn or other emergency."

3. Wants Versus Needs: The best way to start saving more, is to start spending less. In this country we have created of tradition of expecting bigger and better. It may be time to examine your lifestyle and to be realistic about what you can really afford. And that doesn't mean what payment you can afford, but what you can actually afford to buy.

4. Increase Your Income: There may be extra ways for you to have cash coming in, including selling off unneeded items. If your debts are large, you may consider taking on a second or part-time job. If you are a stay at home parent, perhaps you have skills that will allow you to work part time from your house, such as design work or even baby-sitting.

5. Plan for the future. Many Americans have no retirement savings. Consider changing your priorities from "plenty now" to "enough for the future." Exchange the morning Starbucks for savings bonds and IRAs.

Overall, it's about restructuring how you approach life. The saying, "Money can't buy you happiness," couldn't be more true. You may be surprised that exchanging weekend shopping trips and dinner out for family game nights and home-cooked meals may be a welcome change in your family. 


Written by Carla Hill
June 29, 2010 , Published on Realty Times 

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