Time to refinance? You've got to run the numbers - MarketWatch

WASHINGTON (MarketWatch) -- Question: I have a two-year-old, 15-year cash-out refi in Texas. It's now considered a home equity loan, at 6.5%. I am thinking that it does not make sense for me to refinance again at 5% to save $170 per month because I would have to pay two additional years on the back end.

The savings is net of borrowing 100% of the $5,000 in closing costs, so there will be no up-front cash out of pocket. The original loan was for $143,500 and has a balance of $131,500. By refinancing, the $1,250 payment would be reduced to $1,080 on a new loan balance of $136,500. E.L.

Answer: To make the right choice, at least arithmetically, you gotta run the numbers. Here's how:

1. Figure out what you are going to spend by refinancing. In your case, that would be $5,000 plus, since you are going to roll that amount into the loan's principal, whatever your interest costs will be.

More

1031 Exchange Basics

By C. Grant Conness, President, 1031 Alternatives Group

Many investors have asked what exactly is a 1031 exchange, what are the guidelines and timelines, and can you legally defer your capital gains taxes? I thought it would be beneficial to answer some of your most common questions in this article.

What is a §1031 Exchange?

A §l031 Exchange is a transaction in which a taxpayer is allowed to exchange one investment property for another by deferring the tax consequence of a sale. The transaction is authorized by §1031 of the IRS Code.

The IRS Code actually reads: "No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment, if such property is exchanged solely for property of like kind, which is to be held either for productive use in a trade or business or for investment."

More

Best Tips to Get Your House in Tip Top Shape | RISMedia

As the all-important spring selling season approaches in an historically slow housing market, sellers need to do all they can to market their home - and that includes staging it to attract and “wow” potential buyers. Home stagers know just the right moves to take a house from bland to grand and bring home the biggest return on investment. “Attention to detail throughout the home can make the difference between a house that sells and one that sits on the market,” explains Kate Hart, one of America’s top home stagers and owner of Hart & Associates Staging & Design. 

“In particular, improvements to the kitchen and bath - the two rooms that sell a home - will always help bring in the buyers.”

More

Making an Offer on a Home. It’s not all about the Benjamin’s… — The Phoenix Real Estate Guy

If you read enough Q&A sites, talk to enough people, and listen closely, you will often hear this when people talk about making an offer on a home:

“We put in a full price offer and didn’t get the house!”

or

“The seller’s accepted an offer from someone who offered less than we did!”

Most peoples gut instinct leads them to believe that what matters in making an offer on a home is the price. Part of this may stem from real estate agents incessant harping that “price is everything”. And while aggressive pricing is the key factor in getting a home sold (at least in the Phoenix real estate market, and many other US markets as well), there are other factors besides price that a seller should evaluate on any offer their home receives. And if the seller is evaluating other factors, the savvy buyer will consider those factors when making an offer on a home…

More

Government cracking down on mortgage scams - San Jose Mercury News

Associated Press

Posted: 04/06/2009 08:36:26 AM PDT

WASHINGTON — Top federal and state officials today announced a broad crackdown on mortgage modification scams, accusing "criminal actors" of preying on desperate borrowers caught up in the nation's housing crisis.

Government officials say scammers are seeking to take advantage of borrowers in danger of default. The frauds often involve companies with official-sounding names designed to make borrowers think they are taking advantage of the Obama administration's efforts to help modify or refinance 7 to 9 million mortgages.

Officials say such operations almost always are fraudulent, and that help is available for free from government-approved housing counselors.

More

Spring Home Sales

Spring is the optimum time to sell a home. Regardless of whether it's a buyer's market or a seller's market, inventory almost always rises in the spring. Why? Because the largest number of buyers are actively searching for a new home during the months of April, May and June.

Tip: If your home has been languishing on the market since the holidays, take it off the market. Give it a chance to "cool down" for a few weeks before putting it back on the market. Nobody is going to look at your home in the spring if the DOM show it's been on the market for several months. Buyers gravitate toward fresh, new listings!

Here are 15 things you can do to improve the odds that your home will stand out among the sea of new listings flooding the spring-time real estate market:

More

How not to be a victim of foreclosure fraud

by Jay Hammond on March 31, 2009

As the number of struggling homeowners facing foreclosure continues to rise, so do the number of unscrupulous individuals and firms will to prey on them.

“A mortgage lender or a financial counselor can assist you in finding real options to avoid foreclosure,” said Sissy Osteen, an Oklahoma State University Cooperative Extension resource management specialist. “If someone is offering to consult with your lender and offers to arrange to stop or delay foreclosure for a fee be sure to check his or her credentials, reputation and experience. It’s important to protect yourself and not be a victim of a foreclosure scam.”

More

Types of Home Inspections

Question: What Types of Home Inspections Can a Buyer Do?

A reader asks, "My husband and I had our offer accepted last night on a house in a really cool neighborhood. The house is a little old, so we're concerned that it might not pass a home inspection. Our agent says a home inspector might refer us to other inspectors. What other inspectors? What types of home inspections can a buyer do?"

Answer: Your real estate agent should be able to give you a list of the types of home inspections that are generally conducted in your area. She is correct in saying that your home inspector might suggest that you hire other inspectors.

Does a Home Inspector Check Everything in a House?

More

5 Recommendations for Navigating Today’s Mortgage and Housing Markets

”There are five distinct strategies that can help home owners, buyers, and sellers successfully navigate today’s turbulent mortgage and housing markets,” said Gibran Nicholas, chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers.

1. Understand and Utilize the New Tax Credits. Many home owners are not aware that the latest government stimulus package gives them a special tax credit of up to $1,500 for making certain home improvements. Also, if you are buying a primary home and you have not owned a primary residence in the last 3 years, you may qualify for the new $8,000 first-time-homebuyer tax credit. “Although you can’t use the credit to help with your down payment, the credit can be claimed on your 2008 tax returns if you buy the home in 2009,” Nicholas said. “This means that even if you buy the home after you file your taxes on April 15, you can simply file an amended 2008 tax return and the IRS will send you a refund check for $8,000.”

More

Mortgage Rates 'as Low as 2 percent'

Some of the 3 to 4 million homeowners eligible for loan modifications could see interest rates as low as 2 percent under the Obama administration's new "Making Home Affordable" (MHA) initiative.

Originally dubbed the "Homeowner Affordability and Stability Plan," MHA contains a provision to modify mortgages for qualified homeowners struggling to make the monthly payment.

A loan modification, unlike a refinance, changes the terms of the existing loan without writing a new one. Modifications are designed to make mortgages more affordable.

Also called a "workout," this provision is open to anyone including those who haven't missed payments, but may be at risk of missing payments.

The modification plan is open to anyone with any loan that has a balance under Fannie Mae and Freddie Mac limits, which now as high as $729,750 in some high-cost areas.

More

How to Buy After Bankruptcy or Foreclosure

Put your fears aside. Just because you have bad credit, filed bankruptcy or gone through a foreclosure does not mean you cannot buy a home. You most certainly can buy a home with bad credit. But you're going to pay more than a borrower who has sparkling credit.

The Waiting Period After Foreclosure / Bankruptcy

• The period between bankruptcy filings is seven years, but the ding to your credit report stays for 10 years.
• For better rates with a conforming loan, the wait is four years after filing bankruptcy.
• FHA guidelines are two years after a foreclosure, which means you could qualify for as little as 3.5% down.
• Hard-money lenders will often make loans six months after filing bankruptcy or a foreclosure, but will a require 20 to 35% down payment. The interest rate will be very high and the loan terms are not as favorable; many will contain prepayment penalties and be adjustable.
• Subprime lenders (not to be confused with hard-money lenders) are no longer making 100% financed loans.

More

HouseMaster Highlights Red Flags for Home Buyers during National Home Inspection Month

HouseMaster, a North American inspection franchisor, reminds buyers and sellers that a professional home inspection is critical when buying or selling a home. As April marks National Home Inspection Month and the start of the peak home buying season, HouseMaster is providing consumers with a simple list of “red flags” to watch out for during the home buying process. Each of these red flags could be a sign of significant issues and defects and each should be thoroughly evaluated by a professional home inspector before potential buyers make an offer on the home.

These are the red flags that home buyers should look out for:

Numerous extension cords: This could be a sign of an outdated electrical system. Today’s electrical needs have grown significantly and as a result the home could require an entire electrical upgrade to meet these new demands. A professional home inspector will be able to assess whether a new panel and wiring is needed or additional receptacles will need to be installed.

Low water pressure or gurgling: If you turn on the faucet and the pressure is low, it could be evidence of a problem with older galvanized piping or inadequate piping. A professional home inspector will indicate the type of piping and estimated age and determine whether or not an entire new plumbing system is required. In many instances, sections of piping can be replaced on an as needed basis to correct the problem.

More

Mortgage Broker Answers

After you interview your mortgage broker or lender and ask the tough questions, what do you do with the answers? How do you know if the answers you receive are applicable to your situation? Here are the answers acceptable to most borrowers.

1. Answers to Which Type of Loan is Best

Look at the point spread between the interest rates offered on fixed-rate mortgages versus those on adjustable-rate mortgage loans. If the difference is small, say, around .5%, you would be better off with a fixed-rate mortgage.

Interest-only loans are a popular option if you decide to stay in the property for a long period of time, more than five years. Otherwise, the property may not appreciate enough to provide you with adequate equity to sell if you choose this option for a short-term residency.

More

Walking away from mortgage is costly

Call it the fast unraveling of the American dream.

Americans are losing their properties at an alarming rate. The national foreclosure rate now stands at 3.3 percent, and more than 11 percent of all mortgages are either delinquent or in foreclosure, according to the Mortgage Bankers Association.

In most cases, homeowners end up in foreclosure because of a job loss or a gimmicky mortgage with a rate that resets so high the homeowner no longer can afford to make the payment.

However, some homeowners who can afford their mortgage -- even if they struggle to make the payment -- may be tempted to abandon their dwellings simply to get a financial fresh start.

Such a decision can have dire and lingering financial ramifications, experts say.

"Unfortunately, people can often be most victimized when they're scared about their financial well-being," says Stephanie Bittner, community education and outreach coordinator for Consumer Credit Counseling Service of Delaware Valley.

More

Renters get foreclosure relief

It's every renter's worst nightmare: To move into a home or condominium with affordable rent only to find out that the owner has lost the property in foreclosure. The rent money and security deposit are gone, and chances are good that the bank that now owns the property will evict the tenant even if the rent has been paid.

Such sudden evictions have been on the rise due to the dramatic increase in home foreclosures across the U.S. But some tenants will have other options now that Fannie Mae and Freddie Mac have introduced new programs that let renters (and in Freddie Mac's case, former homeowners) continue to occupy the home after foreclosure.

More

6 Landscaping Tricks That Wow Buyers

Landscape designer Michael Glassman has cooked up a recipe for guaranteed curb appeal.

1. Add splashes of color. With every changing season, a landscape should provide a new display of colors, textures, and fragrances. "It’s best to use one or two and repeat them," Glassman says. Example: white iceberg roses that bloom in spring, summer, and fall as a backdrop; in front, a contrasting punch of purple salvia or lavender that will flower at the same time; and as an accent, a crape myrtle tree that provides changing leaf colors in fall and interesting branches come winter.

2. Size trees and shrubs to scale. These should be planted in the right scale for the house so that they don’t block windows, doors, and other architectural features on the home’s facade. A large two-story house can handle a redwood, Chinese pistache, sycamore, or scarlet oak, but a one-story cottage is better paired with a flowering cherry, crabapple, or eastern redbud. Too many trees cast too much shadow and cause potential buyers to worry about maintenance and costs.

More

A Homebuyer's Guide To Working With A Seller's Agent

Buying a home for the first time involves collaborating with a seller's agent or subagent. It is crucial that you understand how things will work between you and the subagent because these people act as representatives to the seller and are therefore expected to bring you to the deal. As a seller's agent, they are entitled to a commission and have certain duties and obligations.

Each state may have distinctive regulations when it comes to home buying. Similarly, the national law has certain prohibitions relative to it. As suggested by the author of the book "100 Questions Every Home Buyer Should Ask", home buyers must make an effort to read thoroughly all the documents such as agent's forms and disclosures before signing to fully understand the services being offered. There are several things that a seller's agent may or may not be allowed to do in your favor:

The seller's agent cannot disclose the list of comparable home's prices in the area. Often referred to as 'comps', a compilation of similar homes in the area will be given to you. Comps usually consist of listing information and list prices. This is necessary to ensure that an unreasonable price is avoided once negotiation takes place.

More

How to Stage a Living Room

Question: Should We Stage Our Living Room or Leave the House Vacant?

A reader asks: "Is it better to show our home vacant or should we try home staging? I think our living room looks a little bare and doesn't really convey how wonderful the space could be, but my husband thinks home staging is too expensive."

Answer: In most home selling situations, a home shows better with furniture. Staring at a ceiling, floor and four empty walls make it hard for buyers to visualize their own belongings in the home. If buyers can't picture themselves living there, they are not likely to buy it.

More

First-time home buyers moved by tax credit

The first-time home-buyer tax credit may be motivating some to take action and buy a home this spring, according to ZipRealty survey results released this week. Sixty-two percent of first-time buyers said that the $8,000 tax credit is giving them an incentive to buy in 2009.

Of those who weren't motivated by the credit, 29% think it's not enough money to make a difference, 28% didn't think they would qualify and 24% think home prices will continue to decline.

But perhaps not enough is being done to promote the perk, according to some in the home-building industry. In a recent article on "Nation's Building News," a publication of the National Association of Home Builders, one industry executive suggested just that.

More

How Foreclosures Work ?

Home buyers who want a good deal in real estate invariably think first about pursuing foreclosures. Buyers have this picture in their mind of a cute little house, surrounded by a white picket fence that is owned by a widowed mom who fell on hard times, but that scenario is generally far from reality.

Why Do Sellers Go Into Foreclosure?

Sellers stop making payments for a host of reasons. Few choose to go into foreclosure voluntarily. It's often an unpredictable result from one of the following:

More