Buying Beats Renting

Are you staying put for at least three years? Savvy financial experts recommend you buy versus rent!

A new analysis by Zillow, a real estate information marketplace, providing vital information about homes, real estate listings and mortgages, reveals that the "break-even horizon" in more than 200 metros and 7,500 U.S. cities is three years (or less!). This is great news for wary buyers who have been fearful of declining home values in many cities.
These hard-hit cities are making a come back. The report found that in some of these areas the break-even horizon was less than two years!

"Across most of the country, historic levels of affordability make buying a home a better decision than ever, especially considering rents have risen more than 5 percent over the past year," said Stan Humphries, Zillow Chief Economist. "This is the first analysis of metros and cities that presents the buy versus rent decision in an intuitive way, by telling consumers how long they must live in the home before buying breaks even with renting financially. It's much more understandable, and therefore useful, than the abstract notion of a simple ratio of prices to rents. If we want consumers to act on market information, we have to align it with how they think about the issue and make it straight-forward to grasp."

This analysis took into account the full picture of homeownership: downpayment, mortgage, transaction costs, property taxes, utilities, maintenance, tax deductions, and adjustments for inflation and forecasted home values. It also figured rental payments, utilities, and rental price appreciation.

This sunny outlook is not the case in all areas, however. A local real estate professional should be able to tell you the course of your local market and whether or not home values are once again on the rise. There may even be differences from one local community to the next. For example, in Mill Valley, Calif., just north of San Francisco, a homeowner can break even after 8.8 years, while in similarly-priced Menlo Park, south of the city, they must live in the home for 14.1 years.

It all depends on the area. The Miami-Ft. Lauderdale metro is among the most favorable for buying, with homeowners breaking even after only 1.6 years of living in the home.  However, in the San Jose metro, where home values are among the highest in the nation, a buyer must commit to living in their home for 8.3 years before they will break even.

Zillow reports "Metros where it takes more than five years to reach the breakeven point accounted for 7 percent of the 224 metros covered by the report. The metros with the longest breakeven horizons are San Jose, Calif. (8.3 years), Oak Harbor, Wash. (7.2 years), Santa Cruz, Calif. (7.1 years), San Luis Obispo, Calif. (6.3 years) and Salinas, Calif. (6.3 years). The metros with the shortest breakeven horizon are Memphis, Tenn., Miami-Ft. Lauderdale, Fla., Salisbury, Md., Red Bluff, Calif., Mobile, Ala., Tampa, Fla. and Fernley, Nev. (all tied at 1.6 years)."

Written by Carla Hill
September 27, 2012 

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

Existing Home Sales Improve as Mortgage Rates Remain Low

The housing market recovery continues its pace as shown in the latest report from the National Association of Realtors. According to the report, existing home sales rose 7.8% on a seasonally adjusted basis during the month of August and was 9.3% higher than August, 2011. Single family home sales increased 8% while condominium and co-op sales increased 6.1%.
The price of homes also increased with the median home price of all housing types up 9.5%. Housing inventory was up 2.9%, a 6.1 month supply, at the end of August according to the report. While investor purchases stood at 18%, first time home buyers accounted for 31% of existing home purchases for the month. Favorable buying conditions, which includes the continued low mortgage rates still in place, is adding strength to this sector of the economy.
FreeRateUpdate.com's survey of wholesale and direct lenders shows that mortgage rates remained firm this past week with 30 year fixed mortgage rates at 3.375%, 15 year fixed mortgage rates at 2.750% and 5/1 adjustable mortgage rates at 2.125%. These low mortgage rates are available with 0.7 to 1% origination fee for borrowers who have good credit.
Normal documentation for conforming mortgages, both home purchase loans and traditional mortgage refinances, requires proof of income, employment and assets. In some cases, additional information will be requested by the lender after examination of the loan file. Since mortgage rates are expected to remain low, consumers who are interested in a home purchase should take the necessary steps now to improve their credit scores as soon as possible while home prices are still affordable.
The latest Mortgage Banker's Association Weekly Mortgage Application Survey for the week ending September 14th showed that the Refinance Index increased 1% from the previous week and accounted for 81% of all applications. Refinance applications for HARP accounted for 22%. HARP is a non-traditional refinance program that is currently available for existing homeowners who have loans that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009.
When this program was updated to HARP 2.0, loan to value caps were removed which is making it possible for deeply underwater borrowers to refinance to lower mortgage rates. However, the minimum loan to value is 80% and is something that lawmakers have proposed changing in the near future so that everyone could refinance with this streamline process. While HARP does have guidelines to follow, an appraisal is not necessary in most cases. This program is in effect until the end of 2013 which gives eligible borrowers plenty of time to qualify. To receive more information about HARP or other mortgage programs, the online form is available and will returned a response almost immediately.
FHA loans continue to be popular with first time home buyers, especially since credit qualifying is much more flexible. Applicants may also find that FHA mortgage rates have been lower than conforming mortgage rates in recent months which is not always the case. Current FHA 30 year fixed mortgage rates are at 3.125%, FHA 15 year fixed mortgage rates are at 2.625% and FHA 5/1 adjustable mortgage rates are at 2.625%. These purchase loans require a low down payment of 3.5% with credit scores as low as 580 and 10% with scores down to 500, although some lenders do have their own requirements also known as overlays.
FHA is known to have higher closing costs (APR) due to various FHA fees and the upfront mortgage insurance premium, although these are usually added to the loan amount or paid through seller concessions. Gaining in popularity is the FHA streamline refinance with no cash out which does not require any documentation or an appraisal. Borrowers who have FHA loans that were endorsed prior to June 1, 2009 can obtain the FHA streamline with a reduced upfront mortgage insurance premium of .01% and annual mortgage insurance premium of .55%. These reductions are available until the end of 2013 which gives borrowers plenty of time to submit an application. The online form is available for submission and does not require a social security number or other detailed personal information.
Decreasing .125%, jumbo 30 year fixed mortgage rates are now at 3.875%, which is an extremely low rate for this type of mortgage. Jumbo 15 year fixed mortgage rates are at 3.125% and jumbo 5/1 adjustable mortgage rates are at 2.250%. A history of excellent credit is required in order to obtain these lowest jumbo mortgage rates with 0.7 to 1% origination fee. Jumbo mortgages have been on the increase in recent months as the high end housing market has shown serious improvements. While guidelines for these mortgages are known to be stricter, borrowers are usually well qualified to meet the standards. For this reason, lenders are willing to accept the risk because there is also a lot of profitability surrounding these loans. According to Inside Mortgage Finance, originations for non-agency jumbo mortgages for the first two quarters of 2012 were 35.8% above 2011.
MBS prices (mortgage backed securities) affect mortgage rates which move in the opposite direction. Last week's movement of MBS was not enough to cause any major mortgage rate changes. Jobless claims were reported as 383,000 which was above expectations. According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index, builder confidence for September rose to 40 which is now the fifth consecutive month of increases and the highest since June, 2006. The strength and growth of the global economy is still a major concern to investors especially as Europe's crisis continues to drag on.
FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard 0.7 to 1% point origination fee.

Written by Ed Ferrara
September 26, 2012 

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

Your Home-buying Strategy

Buying a home is both exciting and sometimes stressful...whether you're a first-time homebuyer or an expert at it. The key to reducing the stress and successfully finding the home that matches your wants, needs, and budget is to have a home-buying strategy.
A home-buying strategy serves to keep you focused, in line with your goals, and on financial track. It can function much like a marketing strategy does for a company. It contains the important tasks, outlines your objectives in buying a home, your must-haves in a home, your financial budget, your move-in timeframe, location, desires, and more.
It may sound like a lot of work but if you take the time to put together a home-buying strategy and then share it with your real estate agent, you'll find that the clear goals you have will bring you closer to finding exactly what you're looking for and, likely, in a shorter period of time.
Putting together your home-buying strategy: In previous columns, I've written about getting organized for your move by organizing a binder that holds your vital paperwork and any materials that you'll immediately need during the moving process.
Organizing your home-buying strategy works in a similar way. You'll start by taking inventory of the home you currently live in. This gives you the opportunity to note both the pros and cons. Write it all down. Then write down your must-haves, would-love-to-haves, and absolutely-nots. You can write a list on notebook paper and place it in a three-ring binder and share it with your agent. In today's digital era there are many highly useful tools and apps to help you with house hunting. The creative and social website, pinterest.com is wonderful for saving website links and photos to various boards that you organize in categories. Even if you keep digital files, also keep the binder handy as your agent will give you lots of paperwork and having it all in one place will be a big relief when it comes time to find a particular document.
Seek out financing. Do this before you start to physically go out and look for homes. Sure, seeing lots of different homes can be fun (for some people) but seeing homes that you don't qualify for is a lesson in frustration for all. Be realistic and be informed by getting the information you need from a mortgage broker who can get you pre-qualified.
Create categories in your binder. Separate sections with tabs and label them things like: budget, favorites, neighborhood, comps. This is where you will place the notes you take during your house hunting. The "budget" section clearly has the defined price point that you are comfortable with. Surprisingly, some buyers start their shopping without giving careful consideration to this and they wind up frustrated because they're not certain how much home they can afford. The "budget" section also includes other expenses that go along with owning a home such as amount of savings for household repairs and, perhaps, new home furnishings.
Bring along a small camera, video recorder or your smartphone to capture your own quick snapshots that you can print out and put in the "favorites" section of your binder. For the "neighborhood" section, be sure to take a few photos of parks or other areas in the community that make this neighborhood and location a good potential match. Again, there are apps that can also do this on your computer but I find both the use of a physical binder and digital tools to be the most effective. Sometimes you just need to see and hold the photo or papers in your hand.
In the "comps" section, you'll place the comps that you receive from your agent. Sometimes buyers will toss this information away thinking they'll remember the details. However, it's best to keep any comps you receive to review it again later when you're making your ultimate choice. Yes, there is lots of paperwork but it serves a good purpose.
Having all that paperwork and your digital apps at your finger tips will provide you with a solid and effective home-buying strategy that allows you to focus on finding the home you're looking for rather than searching for papers and photos you've misplaced. Also, later when you're contemplating, referencing the photos and notes that you've taken will help tip the scale and help you choose the home that's right for you.

Written by Phoebe Chongchua
August 31, 2012 

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

Detach To Sell Your Home

Selling their home can feel like they're cutting off their right arm for some sellers. They feel a sense of loss, and go on an emotional ride that takes them plummeting into the uncertainty of a move and another new home. Even if there's excitement building about the new place, leaving behind their home and its memories can cause some turmoil.
While having deep emotions about the home you lived in, for a short or long while, is normal, it can cause a lot of trouble if you unleash your emotions during the process of the marketing and sale of your home.
Telling sellers to detach to sell their home is like telling the kid whose cat has a litter to stay emotionally reserved from the kittens. You lived in the house, cared for it, and now you're being told to detach from it. Sure, some sellers are ready to take the leap into the new home and they couldn't be any more detached. But especially families who have raised their children and watched many firsts happen in their home, stay a little more connected. These are the sellers that often put a greater value on their home simply because they have a strong emotional attachment.
Selling a home is a business transaction and likely the largest financial commitment many buyers will ever make. So understanding how to not get caught up in the emotional turmoil will help you keep your home as a real estate transaction, not an emotional roller coaster ride.
First make sure you price your home based on comps of other homes sold in the area. Sounds sensible but a lot of times, emotions come into play causing sellers to overprice their home. Instead, turn to a reliable and expert real estate agent for advice and guidance. Pricing your home to sell is critical. Homes for sale usually get the most traffic in the first two weeks of being listed. If you price it too high, you'll turn off potential buyers.
Often sellers base their home value on an emotional feeling they have about their beloved home or the fact that they paid top dollar for the home. However, in today's market, a home that was purchased at the peak might not fully recoup that price.
Give buyers space. There's a term for parents who tend to over-parent. It's called helicopter parenting–appropriately named because these parents hover over their children and essentially smother them. This could apply to sellers who tend to linger while buyers are viewing their home. This makes buyers uneasy. Often they feel like they have to cut short their visit to the home. They don't feel comfortable to talk openly about the things they like or don't like about the home in the presence of the owners. The lesson here is don't hover.
Consider all offers. Sometimes there is a tendency to turn away the initial offers because sellers think they might not be asking enough since the offers came in so quickly. Yes, it's a catch-22. Sellers want to sell but when the early offers come they're a bit uncertain. Be diligent and review all offers with your agent. You never know which one will be satisfactory until you see all of them.
Emotionally detach. Remember, when you're selling your home it's just a product to a potential buyer. They will see the things you loved about your home but they also will see the things they don't love about it and they'll share those things with their agent. So, it's likely you'll hear criticism about your home. They may criticize the very things you love. Here's where you detach and let the criticism wash over you. If you need to take action, such as repairing something, do it. If it's just a matter of opinion, don't become emotionally caught up in it. This isn't personal...it's business. Sometimes that's hard to remember because with real estate, the home we buy is, in the end, our personal sanctuary but at the time of the sale–it's business. Keep the emotions out of it and detach to sell your home.

Written by Phoebe Chongchua
September 21, 2012 

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

Get Out Of Debt

Get of debt today! It sounds a bit like a late-night infomercial, but the truth is that a debt-free lifestyle can be within reach for you and your family.

Reducing your debt-load can be the next, and biggest step, towards owning a home of your own. This is because you must have a strong credit score to buy in today's market and a strong credit score comes from healthy spending habits and low debt ratio.

Credit used to be something different than it is today. Some reports show that the volume of consumer loans more than doubled in from 1990 to 2000. Changes in credit were happening long before this decade, though. People used to buy only what they had the cash to use. Times have changed.

Students today graduate with an average of $25,000 in student loans. That is a staggering amount consider the current rate of unemployment.

The average American carries $10,700 in credit card debt (CNNMoney) and $59,000 in total household debt.

That's a lot of debt.

When the 2009 recession hit there was a resurgence of Americans paying off debts and funneling money into savings accounts. The U.S. savings rate was on the rise. This showed that American could tighten those purse strings when push came to shove.

While there are many families that are truly struggling to make ends meet and who seek out lines of credit to keep food on the table or the lights turned on, there is a large percentage of Americans that simply swipe the plastic and live on a margin.

Are you guilty of living past your means when you could instead be working towards a debt-free lifestyle and the dream of homeownership?

Homeownership is a great way to create long-term wealth and stability for your family. Today's buyers, however, need to have healthy credit scores (less debt) and of course at least 20 percent cash to put down. Let's get you started toward that dream.

The first order of business is to take an honest look at all of your debts and monthly expenses. Compare this to your monthly household income. Are you spending more than you make? Then it's time for a real intervention.

After you've taken a good, hard look at your finances, it's time to rethink your spending. Start by paying off the highest interest loans and credit cards first. Don't fall into the trap of making minimum payments. Write out a budget of your monthly must haves: rent, groceries, gas, tuition, and utilities. Then use the extra funds to invigorate pay off debt in big, healthy chunks.

It'll be an adjustment at first, but then your new spending ways will become habit. Find alternatives to your favorite activities and nip shopping addictions in the bud. It's time to switch up your priorities. It's not all about having fun. Sometimes we need to be responsible adults and pay off debt before we take vacations, buy new clothes, or buy new cars. Learn to appreciate what you have, stay away from buying what you don't need, and to keep your goals in mind. Homeownership is a very worthy goal. Make budgeting and paying off debt your top priority and you'll reach that goal!


Written by Carla Hill
Published by Realty Times

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

The List Of Improving Housing Markets Is Increasing

If you've been keeping a list, then, just like Santa, you'd better check it twice–not for who's naughty or nice–but rather which real estate markets are improving. According to the National Association of Home Builders (NAHB), "the number of improving housing markets across the country rose to 99 in September."

The data comes from NAHB's First American Improving Markets Index (IMI), released just this month. The figure is up from last month when there were only 80 metro areas on the list. Over six consecutive months, the Index looks at three categories: housing permits, employment, and house prices, to see how much they have improved from previous dips. The most recent IMI shows metro areas from 33 states as well as the District of Columbia.

The growth spurt is, obviously, good news to Barry Rutenber, chairman of NAHB and a Gainesville, Florida home builder. "This solid growth is an encouraging sign that housing continues on a slow but steady recovery path that is gradually advancing from one local market to the next."

NAHB reported that the list grew, overall, by 19. Retaining their spots on the current list were 68 metro areas. An additional 31 new metros were added, while only 12 dropped off.

"More metros across the country are experiencing a sustained uptick in house prices, employment and new building activity as rising consumer confidence in local market conditions pushes more people to consider a new-home purchase," stated NAHB Chief Economist David Crowe in a news release. The downside, according to Crowe, is the "overly tight lending conditions" which are slowing the pace for both builders and buyers.

Still, the NAHB reports that this is a positive sign. The IMI nationally tracks housing markets that are showing signs of improving economic health. In order to get a ranking on the top improving Metropolitan Statistical Areas, the index measures three sets of independent monthly data. Indicators analyzed are from the following areas and sources: employment growth (Bureau of Labor Statistics), home price appreciation (Freddie Mac) and single-family housing permit growth (U.S. Census Bureau). For a Metropolitan area to rank on the IMI, NAHB requires data to confirm improvements in all three measures for a period of at least six months following those measures' respective lows.

On the most current IMI, there are diverse geographical locations including: Tucson, Arizona; Jacksonville, Florida; Springfield, Illinois; Greenville, North Carolina; and Bend, Oregon.

This report will likely be touted as an indication that the housing market is, indeed, rebounding. What does that mean for sellers? It could mean perfect timing. The end of the year is nearing and many sellers are hoping to close escrow before 2012 wraps up. Seeing metro areas across the country improving may be the fuel needed to accelerate the process for the once hesitant and wary buyer.

If your home is on the market, check the full list of 99 improving housing markets on NAHB.org. If your metro area is listed, capitalize on the good news and be sure to have print materials with the information available for your potential buyers.


Written by Phoebe Chongchua
September 14, 2012

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

Favorable Mortgage Rates Help Housing Market Confidence

While conditions continue to show signs of improvement, favorable mortgage rates are helping housing market confidence amongst consumers. According to Fannie Mae's National Housing Survey for August, 35% of survey participants expect home prices to rise over the next year. Consumer attitudes, while stabilized, increased from August 2011.

This study involved attitudes towards owning a home, renting a home, mortgage rates, the economy and personal finances. When asked about mortgage rates, 40% of consumers expect higher rates are too good to last and will rise within the next 12 months. The National Association of Home Builders/First American Improving Market Index reported that a net total of 19 housing markets were added to the list.

To be included in the Improving Markets Index 3 increases must take place: the number of housing permits, employment and home price appreciation. According to CoreLogic, a mortgage and research analytics firm, home prices for July rose 3.8% above last year and is the largest annual gain in six years. Housing affordability continues to be high as low mortgage rates have continued and housing prices are still below their peak reached several years ago.

FreeRateUpdate.com's survey of wholesale and direct lenders shows that mortgage rates stayed firm this past week with 30 year fixed mortgage rates at 3.375%, 15 year fixed mortgage rates at 2.750% and 5/1 adjustable mortgage rates at 2.125%, available with 0.7 to 1% origination fee provided borrowers have good credit. Home purchase loans and traditional mortgage refinances require full documentation for employment, income and credit, all of which will be verified by the lender. HARP is a non-traditional mortgage refinance for borrowers who have loans that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009.

While loan to values for HARP have a minimum of 80%, updates to the program with HARP 2.0 eliminated maximum loan to value caps. Although GSE guidelines for HARP do not require an appraisal, lenders may have overlays that eliminate some borrowers from receiving approval. Since guidelines differ for each lender, borrowers are encouraged to keep seeking a HARP refinance even if they have been denied. For more information about HARP, an online inquiry can be obtained without revealing detailed personal information.

For the past week, FHA 30 year fixed mortgage rates are at 3.125%, FHA 15 year fixed mortgage rates are at 2.625% and FHA 5/1 adjustable mortgage rates are at 2.625%, all remaining steady. FHA still attracts first time home buyers who want lower down payments and easier credit qualifying guidelines. Since many locations offer housing grants or loans through state or local agencies, qualified borrowers can receive additional help for the required down payment. Often, seller concessions can be put toward the FHA closing costs (APR) which tend to be high due to various FHA fees and the upfront mortgage insurance premium. At this time, the FHA streamline refinance with no cash out is very popular since it offers reduced upfront and annual mortgage insurance premiums for borrowers who have loans that were endorsed prior to June 1, 2009. This program does not require an appraisal or other documentation, but requires that borrowers have a good history of mortgage payments. Borrowers can find out more about FHA mortgages by submitting the online form which sends a response almost instantly.

Keeping in line, jumbo mortgage rates were firm over the past week with jumbo 30 year fixed mortgage rates at 4.250%, jumbo 15 year fixed mortgage rates at 3.125% and jumbo 5/1 adjustable mortgage rates at 2.250%, all available with 0.7 to 1% origination fee for borrowers who have a history of excellent credit. While jumbo mortgage guidelines may be stricter, the documentation required is generally the same as that which is needed for conforming mortgages. Higher down payments and additional months of reserves are normally necessary and, therefore, require that borrowers have substantial assets. Since these are private loans held by the lender, jumbo mortgages are considered risky. On the other hand, they are also profitable for lenders who offer them. As more lenders enter the jumbo mortgage market, borrowers will find that the competition may lead to more flexibility with guidelines and approval and are advised to shop around for the best jumbo mortgage rates and terms available.

Last week, markets became more volatile than has been seen recently. MBS prices (mortgage backed securities), which move mortgage rates in the opposite direction, had a few severe swings in both directions which left average mortgage rates still. Investors are now waiting for the Fed's to take further action with a QE3 plan, possibly this week. The Labor Department reported that only 96,000 jobs were added in August although the unemployment rate fell to 8.1% due to the number of people leaving the work force. The labor force participation rate fell to its lowest level seen sine 1981. Unemployment applications fell by 12,000 for the previous week while productivity increased at a 2.2% annual rate. The big market mover was when the European Central Bank announced a new plan to purchase bonds in Europe in order to contain the Euro zone crisis and prevent a financial collapse.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders' rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard 0.7 to 1% point origination fee.

Written by Ed Ferrara
September 14, 2012

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

Picture This House: Why Photos Sell Your Home

As we head into fall, the change in seasons brings about a feeling of concern for some sellers. They fear that their home won't be looked at as much or, worse, won't sell.

Yes, it's true that many buyers, especially those with children, like to be settled into their new home before the school year starts. However, that doesn't mean it's too late for your home to sell.

Stepping up the marketing and generating the right kind of buzz can keep the visits to your home high and create interest in some high traffic places such as social media outlets that can help lure potential buyers in.

We all know the adage, "A picture is worth a thousand words". Well, when it comes to real estate, homes with high-quality pictures are about 60 percent more viewed than those advertised without photos. I'd say that poor photos would also lessen the chance that your home is viewed and/or visited.

This simply makes sense when you think about where most people start to shop for a home--online. Simply having text copy that describes the home, no matter how well written it is, doesn't do what photos and video can do.

Having your home professionally photographed is worth the time and money. If the photographer knows his/her trade well, the photos will "WOW" viewers. Even better, if a video accompanies the photos, you can place both on social media sites. Through the video, you can tell a powerful story. The agent or the homeowner can share compelling information about what makes this home unique.

In a video, you don't want to be emotional, rather, you want to share why this home fits the audience you are targeting. That means you need to know your audience. The same goes for the photo.

At the heart of your marketing should be images that tell a story in photos that convey why this home is a "must-have". Of course, searching for a home is still ultimately based on these parameters (which are usually entered-into a search engine): price, location, square footage, number of bathrooms and bedrooms, pool, etc. Once those parameters have been met and a filtered list of homes is shown, then it comes down to the photos and videos. Potential buyers don't want to waste their time physically driving to homes that aren't what they are looking for. So the better quality the photos, the better results in sales.

What makes quality photos? Good lighting, interesting angles, non-cluttered rooms, color, depth (size of room space), and overall exceptional quality of the image and video. That means the ISO, can't be too high or you'll experience a lot of "noise" (dark areas) in the photo. Raising the electronic gain too much on the video camera can make the video quality poor.

Unless, you're an excellent or pro photographer/videographer, don't attempt to photograph your home yourself. These photos are vital to the sale of your home. They're the marketing materials that will enhance the copy that's written about your home. And, again, the video and photos are often the enticement to actually get potential buyers in the door to make an offer.

Prepare for the professional photographers and videographers. Before your photo experts arrive, be sure to make a list of suggested angles and areas to shoot. Think about where you have your morning coffee. Is it outside on the deck overlooking an amazing sunrise? If so, even though that isn't specifically a photo of the home, it's a photo that tells a story about the home–be sure to have the sunrise photographed. The message in the photo and video will tell a story about the kind of experience buyers will have in this home when they buy it. And, that is definitely worth a thousand words.


Written by Phoebe Chongchua
September 7, 2012

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

What Influences Credit Scores

Its a three-digit number that carries a lot of influence over your future. It can dictate whether or not you'll qualify for a home, car, or business loan. It can also be the deciding factor in whether or not you qualify for a low interest rate.

What exactly is a credit score and what factors contribute to its number?

A credit score is a number from 200 to 800 that reflects your payment and borrowing history. Are you a big spender? Do you make payments faithfully and on time? It's what lenders use to decide a number of factors, including whether or not to lend to you.

There are three main reporting agencies: TransUnion, Experian, and Equifax. Can a credit score from these agencies be biased? The simple answer is no. Your credit score is a true and honest reflection of your debt and payment history. This means that neither a lender nor credit agency can "have it out for you." You are the only person responsible for your score.

There are several factors that contribute to this score.

Type of Credit: Lenders want to see that you have a history of multiple types of credit. This can include credit cards, installment loans, and mortgages.

Amount of Debt: The more debt you have the riskier you appear to a lender. This means paying down or off debt is a great way to make yourself more desirable for a home loan.

Payment History: You want to be on time with every bill. This includes everything from cable and phone to credit card payments. Late payments may be reported to the credit reporting agencies and will negatively affect your score.

New Credit: Do NOT under any circumstances open new lines of credit, no matter how small, before you start looking for a home. Several new lines of credit will dock your score and may indicate to a lender that you are on a spending spree.

Credit History Length: Younger borrowers are always at a slight disadvantage because they have a shorter credit history. A longer credit history gives lenders a better picture of what kind of borrower you really are.

Be sure to check out your credit report three times a year at annualcreditreport.com. It's free, easy, and secure. You'll have to pay a nominal fee in order to see your score, but checking out your report can help you assess areas that need improvement or areas that have errors which need corrected.


Written by Carla Hill
September 10, 2012

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

Home Prices Rebounding With Low Mortgage Rates

Over the course of several months, home prices in many markets have been rebounding with the consistent level of low mortgage rates. The National Association of Realtors data has shown five consecutive months of home price increases through July 2012. This past week, the S&P/Case-Shiller National Home Price Index showed a 1.2% increase during the second quarter of this year. It is obvious that the housing market is recovering at a modest but steady pace as mortgage rates continue to remain affordable, as well as, attractive.

FreeRateUpdate.com's survey of wholesale and direct lenders shows that mortgage rates remained firm this past week with 30 year fixed mortgage rates at 3.375%, 15 year fixed mortgage rates at 2.750% and 5/1 adjustable mortgage rates at 2.125%, all available with 0.7 to 1% origination fee for borrowers who have maintained a record of good credit.

Lending guidelines remain strict for home purchase loans and traditional mortgage refinances. Borrowers must qualify per employment, income and asset requirements and need to provide documentation as proof. After examining and verifying the information in the loan file, lenders often request additional information in order to make their decision for an approval or denial.

The Home Affordable Refinance Program, HARP, is available through the end of 2013 for underwater borrowers who have loans that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009. With the removal of loan to value caps, loans above 125% LTV have been increasing since June when it became possible for lenders to securitize these loans.

However, many lenders still have strict overlays on HARP which has made it difficult for many borrowers to refinance. HARP requirements and mortgage rates differ from lender to lender and require borrowers to actively seek which one will give them an approval and the best deal. The fastest results can be obtained with an online inquiry where lenders are willing and available to assist borrowers who receive a response within minutes and without the need of a social security number.

The FHA streamline refinance is, in many ways, the FHA version of HARP. This refinance is available for all FHA borrowers and, with no cash out, does not require an appraisal or other documentation. This works well especially for underwater borrowers or those who have a deduction in income. Now, for borrowers who have FHA loans that were endorsed prior to June 1, 2009, the FHA streamline has a reduced upfront mortgage insurance premium of .01% and annual mortgage insurance premium of .55%.

This reduction was done to entice more borrowers to obtain an FHA streamline at today's low, affordable mortgage rates, thus reducing the cost of homeownership in order to prevent further foreclosures or defaults. Current FHA 30 year fixed mortgage rates are at 3.125%, FHA 15 year fixed mortgage rates are at 2.625% and FHA 5/1 adjustable mortgage rates are at 2.625%. FHA still offers several mortgage purchase programs that have low down payment requirements, easier credit qualifying and all the long standing benefits that FHA mortgages have had in place for years.

Although FHA closing costs (APR) are high because of various FHA fees and the upfront front mortgage insurance premium, FHA allows borrowers to add this amount to the mortgage loan or use seller concessions in accordance with guidelines. FHA mortgages can be easily obtained through an online inquiry where approved FHA lenders are available to help borrowers obtain their goals.

Current jumbo mortgage rates also remained stable this week with jumbo 30 year fixed mortgage rates at 4.250%, jumbo 15 year fixed mortgage rates at 3.125% and jumbo 5/1 adjustable mortgage rates at 2.250%. Borrowers are required to have excellent credit in order to receive these low jumbo mortgage rates with 0.7 to 1% origination fee. Jumbo mortgages are necessary in higher cost areas where the price of property exceeds the loan limits of conforming and FHA mortgages. Often, guidelines can be strict and require substantial funds for larger down payment and reserve requirements.

Without a secondary market since the housing crisis, lenders generally keep these loans within their own portfolio. Even though it is considered risky, many lenders are re-entering the jumbo loan market because it is also profitable. This move is increasing competition which is making some lenders offer flexibility with guidelines. Borrowers who are in need of jumbo mortgages should shop around for the lowest jumbo mortgage rates and best deal being offered.

Towards the end of last week, MBS prices (mortgage backed securities) started to increase which is good for mortgage rates. Mortgage rates depend on MBS prices and move in the opposite direction. Some data released was not favorable with investors. The Commerce Department reported that demand for U.S. goods fell 3.4% in July which was the most in eight months. The Conference Board's Index indicated a decline to 60.6 in August which is the biggest drop since October and below expectations.

Jobless claims were flat and Chicago PCE Manufacturing came in below expectations at 53.0. The Commerce Department reported that consumer spending rose 0.4% in July, second quarter GDP was revised higher to 1.7% and new orders for manufactured goods increased 2.8% in July. The biggest event last week was Fed Chief Bernanke's speech which indicated possible further monetary easing to boost the economy which investors are now anticipating to see happen at the Fed meeting which starts September 12th.

FreeRateUpdate.com surveys more than two dozen wholesale and direct lenders’ rate sheets to determine the most accurate mortgage rates available to well qualified consumers at a standard 0.7 to 1% point origination fee.


Written by Ed Ferrara
September 6, 2012

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Your Home-buying Strategy

Buying a home is both exciting and sometimes stressful...whether you're a first-time homebuyer or an expert at it. The key to reducing the stress and successfully finding the home that matches your wants, needs, and budget is to have a home-buying strategy.

A home-buying strategy serves to keep you focused, in line with your goals, and on financial track. It can function much like a marketing strategy does for a company. It contains the important tasks, outlines your objectives in buying a home, your must-haves in a home, your financial budget, your move-in timeframe, location, desires, and more.

It may sound like a lot of work but if you take the time to put together a home-buying strategy and then share it with your real estate agent, you'll find that the clear goals you have will bring you closer to finding exactly what you're looking for and, likely, in a shorter period of time.

Putting together your home-buying strategy: In previous columns, I've written about getting organized for your move by organizing a binder that holds your vital paperwork and any materials that you'll immediately need during the moving process.

Organizing your home-buying strategy works in a similar way. You'll start by taking inventory of the home you currently live in. This gives you the opportunity to note both the pros and cons. Write it all down. Then write down your must-haves, would-love-to-haves, and absolutely-nots. You can write a list on notebook paper and place it in a three-ring binder and share it with your agent. In today's digital era there are many highly useful tools and apps to help you with house hunting. The creative and social website, pinterest.com is wonderful for saving website links and photos to various boards that you organize in categories. Even if you keep digital files, also keep the binder handy as your agent will give you lots of paperwork and having it all in one place will be a big relief when it comes time to find a particular document.

Seek out financing. Do this before you start to physically go out and look for homes. Sure, seeing lots of different homes can be fun (for some people) but seeing homes that you don't qualify for is a lesson in frustration for all. Be realistic and be informed by getting the information you need from a mortgage broker who can get you pre-qualified.

Create categories in your binder. Separate sections with tabs and label them things like: budget, favorites, neighborhood, comps. This is where you will place the notes you take during your house hunting. The "budget" section clearly has the defined price point that you are comfortable with. Surprisingly, some buyers start their shopping without giving careful consideration to this and they wind up frustrated because they're not certain how much home they can afford. The "budget" section also includes other expenses that go along with owning a home such as amount of savings for household repairs and, perhaps, new home furnishings.

Bring along a small camera, video recorder or your smartphone to capture your own quick snapshots that you can print out and put in the "favorites" section of your binder. For the "neighborhood" section, be sure to take a few photos of parks or other areas in the community that make this neighborhood and location a good potential match. Again, there are apps that can also do this on your computer but I find both the use of a physical binder and digital tools to be the most effective. Sometimes you just need to see and hold the photo or papers in your hand.

In the "comps" section, you'll place the comps that you receive from your agent. Sometimes buyers will toss this information away thinking they'll remember the details. However, it's best to keep any comps you receive to review it again later when you're making your ultimate choice. Yes, there is lots of paperwork but it serves a good purpose.

Having all that paperwork and your digital apps at your finger tips will provide you with a solid and effective home-buying strategy that allows you to focus on finding the home you're looking for rather than searching for papers and photos you've misplaced. Also, later when you're contemplating, referencing the photos and notes that you've taken will help tip the scale and help you choose the home that's right for you.


Written by Phoebe Chongchua
Published by Realty Times

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