Re/Max Fit to Sell -- Why a Home Doesn't Sell

Re/Max Fit to Sell - Why a Home Doesn't Sell

Check out this video in a series of videos from the Re/Max Collection "Fit to Sell".  This video talks about Why a Home Doesn't Sell.  Click the link below to view the video.

                                  Why a Home Doesn't Sell - Re/Max Fit to Sell  

Market Update, March, 2014

Market Update -  March, 2014

Check out what the market is doing in Birmingham Area by clicking the link below!

                                          Market Update - March, 2014

8 Places to Go When Your Mortgage Lender Says No

8 Places to Go When Your Mortgage Lender Says No

By: Dona DeZube     Published: February 4, 2014

New mortgage rules draw some pretty clear lines about who should -- and shouldn’t -- get a mortgage. If you fall outside the lines and your lender says no, you have eight other options.

New mortgage rules are pretty clear about what you have to do to convince a lender you’re a qualified mortgage borrower. Meant to measure your ability to repay, the new rules created a list of eight things lenders had to check to make sure you could repay your mortgage.

Those protections help ensure we’re not going to see a repeat of the mortgage crisis any time soon. The new rules are also designed to reward banks for staying away from risky products like interest-only loans. But if you can’t meet any of the eight standards you’re going to find it harder to get a new mortgage or refinance your existing mortgage.

The NATIONAL ASSOCIATION OF REALTORS® predicts the changes will slice about 5% to 7% of borrowers out of the market.

Where do you turn if you’re in that 5% to 7% or you like your balloon loan and want to refinance into another balloon loan?

The fine print in the new rules created some exemptions that you can use to try again if you don’t meet one or two of the eight qualified mortgage checks, or if you want to go with a loan product that the rules discourage lenders from making.

1.  Your State Housing Finance Authority

State Housing Finance Authorities specialize in helping first-time and low-to-moderate income homebuyers and homeowners. They’ll often give you a below-market interest rate or the option of putting down as little as 3%.

In exchange, you’ll likely have to agree to complete a financial education course and prove every penny of your income.

Historically, HFAs have had much lower rates of late payments and foreclosures than for-profit lenders, so they’re exempt from the rules.

2.  An Itty-Bitty Bank

Banks and credit unions that have less than $2 billion in assets and make 500 or fewer first mortgages don’t have to follow the same rules as larger lenders.

That’s because they didn’t make the risky loans that led to high foreclosure rates during the mortgage crisis. Plus, they tend to hold on to the loans they make (rather than selling them to investors). That makes it easier for the bank to work with customers who run into financial trouble.

Small lenders can charge higher fees and interest rates than big banks, which they need to do if you have a tiny loan amount, because some fees, like a title search, cost the same no matter how big or small your loan is.

If, for example, you had a $20,000 mortgage, the fee cap would limit you to $1,000 in fees, which probably isn’t enough to cover a title search and appraisal. Although the bank would still earn interest on your loan, it would have to pay the fees for you -- and no bank wants to do that.

Some small lenders can still make balloon loans, where you owe one big payment at the end of your loan. A balloon loan has a lower monthly payment than a regular mortgage loan where each month you pay back some of the money you borrowed instead of just interest.

The catch is that the small lender has to hold on to your loan for at least three years and can’t sell it into the secondary market.

So you’ve got to persuade the bank that your mortgage is a good investment. Small bankers can be very conservative lenders, which is another reason they didn’t end up with a lot of foreclosures on their hands during the real estate crisis.

Right now, any lender who meets the size rule can use the small lender exemption. Starting Jan. 10, 2016, only small lenders in rural underserved areas will get to use the exemption, so don’t delay trying this avenue unless you live in a sparsely populated place.

3.  A Government-Guaranteed Loan

The new rules set a clear line for how much of your income, max, you should be using for debt: 43%. If you’re above that limit because you have too much debt or not enough income, there’s a work-around.

You can go over the 43% limit if your loan is guaranteed by Fannie Mae, Freddie Mac, the Federal Housing Administration, the VA, or the U.S. Department of Agriculture’s rural housing loan program.

4.  Community Development Nonprofits

Nonprofit lenders who work with low- and moderate-income borrowers don’t have to follow the new mortgage rules. As long as they don’t make more than 200 loans a year, they can create special loan programs to help the people in their community.

Community Development Financial Institutions set up shop in areas undergoing revitalization. They target a particular community for assistance, including homebuyer incentives. CDFI lenders also don’t have to follow the new mortgage rules.

5.  Homeownership Preservation and Foreclosure Prevention Programs

If you’re underwater on your mortgage, meaning you owe more than your home is worth, you can still get a loan from a foreclosure prevention program or a homeownership stabilization organization. Because these groups have a history of knowing how to help troubled homeowners, they don’t have to follow the new mortgage rules.

6.  A Safer Loan

If you’re in a dangerous, unfair loan right now and you want to refinance into a safer loan, your lender doesn’t have to follow the eight standards when it gives you a better loan. There’s an exemption from the ability to repay standards when a lender is moving a borrower out of:

·         An adjustable-rate mortgage that’s about to adjust to a much higher payment.

·         An interest-only loan.

·         A loan with negative amortization (meaning the amount you owe can go up even if you make all your payments).

Your new standard loan:

·         Has to have a fixed rate for the first five years.

·         Must lower your monthly payment.

·         Can’t have fees of more than 3% of the amount you’re borrowing.

7.  A Work-Around

If you’re rich enough that your bank has assigned you a personal wealth manager, that’s the person to talk to when it’s time to refinance. Your bank will want to keep you as a customer and will find a work-around to fund your loan.

For example, if you’re using more than 43% of your income for debt but you can show you have millions in assets, your personal banker will make the case that you’re quite able to repay your mortgage even though you don’t meet the debt-to-income rule.

8.  Another Kind of Loan

The new mortgage rules don’t apply to all loans. It specifically doesn’t include:

·         Open-ended loans.

·         Timeshare loans.

·         Reverse mortgages.

·         Temporary loans, including bridge and construction, and the construction phase of construction-to-permanent loans.

·         Loans from the bank of Mom and Dad.

If one of those types of loans will work instead of a mortgage, you won’t have to meet the new mortgage rules.

Read more: http://members.houselogic.com/articles/getting-a-mortgage-when-lender-says-no/preview/#ixzz2xaNPYp6L

Re/Max Fit To Sell - Top 5 Issues in Preparing Your Home for Sell

Fit to Sell - Top 5 Issues in Preparing Your Home for Sell

How to Insulate Your Crawl Space

How to Insulate Your Crawl Space

By: Dave Toht

There’s a right way and a wrong way for insulating your crawl space, depending on where you live. Do you know the difference? We do — read on!

Take a look under your house. Damp, dangling insulation is a sure sign of outdated or shoddy installation. If your house was built before energy-conserving building codes were standardized in 1990, you may find no insulation at all. The U.S. Dept. of Energy currently recommends insulation with an R-value of at least R-9 in floors.

To keep things cozy underfoot, you’ll need to select the right insulation approach for your local climate. Winter temperature is the continental divide:

·         In moderate or dry climates without the threat of sustained subfreezing temperatures, insulation between floor joists makes sense. 

·         Where winter temperatures are extreme, opt for insulating the walls and sealing off the crawl space entirely.

Floor insulation for moderate climes

If your winter temps seldom linger below freezing, you’re in luck. Six-inch-thick, R-19 fiberglass batts installed between floor joists -- along with careful moisture control and mold prevention --  gets the job done. Best of all, at roughly $1 per square foot, it’s easy on the pocketbook.

Here’s what it takes to do it right.

·         Support: Fiberglass batts should be unfaced and installed so they make contact with the underside of the subfloor. Wood lath placed every 18 inches or a crisscross webbing of wire provide the best batt support. Avoid stay rods (aka tension rods). They compress the fiberglass, lessening its insulation value, and can pop loose.

·         Ventilate: An insulation contractor can calculate the ventilation your crawl space needs and will cut in new vents as required.

·         Seal the subfloor: Holes for electrical wiring and plumbing should be sealed with spray foam insulation.

·         Insulate plumbing pipes and HVAC ducts to prevent heat loss and freezing.

Closed-cell spray foam combines thermal and moisture protection, but at $5 per square foot, it's too pricey for most budgets. However, it might be your only alternative for filling the webbing between truss-type joists.

Avoid open-cell spray insulation -- it soaks up moisture like a sponge.

Enclosing your crawl space: The cold climate choice

In a cold climate, the most efficient technique is to insulate the walls of your crawl space and close it off from the elements by sealing all air leaks. That way, plumbing pipes and HVAC ducts are protected from freezing temps, helping to conserve energy.

The best method is to insulate crawlspace walls with rigid insulation. At about $5 per square foot for professional installation, including materials, it comes at a cost but offers a permanent solution. You can do the job yourself for about half the cost, but it’s a challenging, time-consuming DIY project.

A thorough job also includes: 

·         Nixing the vents: Simply closing the vents in your foundation won’t do the job. Vents must be removed and the holes sealed.

·         Insulating the rim joist: Use closed-cell spray foam to insulate the rim (aka band or perimeter) joists — the joist that rests on top of your foundation walls.

·         Insulating the foundation: Glue rigid foam insulation board to the inside of foundation walls, using waterproof construction adhesive, and seal all seams with waterproof tape. A 4-by-8-foot sheet of 2-inch-thick expanded polystyrene insulation (R-value 7.7) is $26. A double layer is recommended.

·         Add a vapor barrier: Whether the floor of your crawl space is bare earth, gravel, or concrete, it is going to exude moisture. A 6-mil polyethylene plastic vapor barrier covering the ground keeps the wet at bay.

·         Get rid of moisture: Moist household air is bound to cause condensation in the crawl space. In addition, any slight plumbing leak can build up over time. A dehumidifier or sump pump eliminates the moisture that mold loves.

Make moisture control a priority, warns Chuck Henrichsen, owner of Clean Crawls, a Seattle insulation firm. “If you don’t, your crawl space becomes a Petri dish.”

With crawl space sealed off from cold and moisture, your crawl space can be linked to your household HVAC system via vents. That way, warm air is circulating under your floors, warming them up and helping to keep you toasty. There's no need to cool off your crawl space in summer, however; close vents when your air conditioning is running.

“Visit HouseLogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®."

Closing CheckList

Real Estate Closing Checklist 

Here is just an example of some things to expect when you are under contract and preparing to close on your home. This example is closing with a mortgage, closing with cash is a little less involved.  

Click the link below to see the CheckList:

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                                  Real Estate Closing Checklist

Monthly Market Update - December, 2013

Monthly Market Update - December, 2013 

Here we are at the end of  2013!  What a great Year!  Let's make 2014 even better!!!  Take a look at the monthly market update - December, 2013.

      Monthly Market Update - December, 2013 - Per Birmingham MLS