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FHA mortgage insurance premium increasing
FHA is increasing it’s financed mortgage insurance premium and it’s monthly insurance premium for all case numbers ordered on or after April 1, 2012 (think of a case number as ready to order an FHA appraisal).
The financed mortgage insurance premium is increasing to 1.75% from 1.00%. The monthly premium is also being increased by .10. For an FHA minimum down borrower, this means a factor rate of 1.25 rather than 1.15 monthly. The total increase in monthly payment cost is approximately $12.78 per every $100,000.
You should make your clients aware of this or discuss with their loan officers. Let me know if you have questions.
Take care,
Julie Hirsch
Julie Hirsch
Sterling Savings Bank – Home Loan Division
Loan Officer
10230 NE Points Drive, Suite 530, Kirkland, WA 98033,
Direct: 425-893-5717
Julie.Hirsch@sterlingsavings.com
FHA Changes are in the works!
There are several FHA changes in the works that I want to make you aware of:
There will be an increase in the monthly Mortgage Insurance Premium. The proposed increases to MIP are 1.25 percent for conforming loan amounts and to 1.50 percent for high balance loan amounts.
There is also discussion to increase the upfront Mortgage Insurance Premium.
HUD has also proposed a change in policy for seller concessions. The new proposal is to limit seller concessions as follows:
Reduce the amount of permitted seller concessions to 3 percent or $6,000, whichever is greater.
Limit seller concessions to never exceed the borrower’s actual closing costs.
It also redefines what can be considered as acceptable closing costs to be paid by seller concessions.
This is a proposed rule that is currently out for comment and can be viewed online here.
These changes have not been officially announced by FHA in a Mortgagee Letter, but I expect to see one issued soon. As soon as the official announcement has been made I will provide you with more information including the effective date. If you have any questions about how these changes may impact you please contact me today!
Sincerely,
Steve Dellario
Steve Dellario
MLO-175867
Partner/Mortgage Banker
425-889-8889
dg@dellariogroup.com
Americans still sold on homeownership
Seventy-eight percent of Americans identified as likely to vote in the 2012 presidential election said that owning their own home was one of the most important things in their lives, according to the survey by Lake Research Partners done for the National Association of Home Builders and presented here Wednesday at the International Builders Show.
And 74% agreed, with 43% strongly agreeing, that owning a home was worth it even with all the ups and downs of the housing market.
“People told us that homeownership is more than just bricks and mortar, more than just having a big mortgage. It’s about family. It’s still part of the American dream,” said Alex Batty, a partner with Public Opinion Strategies who analyzed the results.
One-third of those polled even said housing was one of the best investments you could make, ignoring the 30%-plus drop in home prices nationally since the peak of the housing boom in 2006. The only better investment Americans can think of is a retirement account such as an IRA or 401(k).
Current homeowners were not discouraged in the least by the pitfalls of paying for and maintaining a house: 96% said they were happy with their decision to own a home and 85% said they were very happy with that decision.
“The desire for homeownership long-term is still there,” said Frank Nothaft, chief economist for mortgage agency Freddie Mac, even if economic and job uncertainty is keeping people from jumping into the market today.
The NAHB commissioned the election-year survey in the hopes of backing up its lobbying effort on Capitol Hill with data that could show Congress and the Obama administration that housing is still a valued commodity in the country and that Americans want the government to provide supportive housing policies, said Jim Tobin, the trade group’s chief lobbyist.
“It’s been frustrating for us, to see what we think is a lack of focus on housing,” Tobin said. “We’re just starting to see some of our efforts on this pay off with the Republican candidates and the president.”
Obama late in January unveiled a new mortgage-refinancing plan designed to help distressed homeowners.
That kind of assistance is what respondents to the survey said is appropriate for the government to do in support of housing. Two-thirds said it was OK for the government to ensure the availability of 30-year mortgages and 75% said it was all right to use the tax code to support homeownership.
And in a warning to those would propose to cut the mortgage-interest tax deduction as part of the deficit-reduction debate, 65% said they would be less likely to vote for a candidate who supported that position.
Written by Steve Kerch, for MarketWatch. View article online at:
http://www.marketwatch.com/story/americans-still-sold-on-homeownership-2012-02-08
How Google’s New Privacy Policy Affects You
If you’re a Google user, you have recently seen a notice regarding their new privacy policy. This notice includes two options: “Dismiss” and “Learn More.” This pop-up is appearing across all the Google based services, and encourages users to learn how Google is handling your private information.
First, it is important to understand how Google currently handles and monitors traffic before one can appreciate Google’s latest changes. A website’s privacy policy is created to regulate and communicate how they are handling data they receive when you log in, browse content, and register for a website. Google’s objective is to collect and compile user information (including browser language, telephone numbers, and search queries) while you are logged onto a Google based account (e.g., Google Search, YouTube, Gmail, Google Plus). They then take that information and store it in a central location for analysis. Google uses this information to create customized advertisements and tailor search results to be unique to each individual user.
Google claims that they will not sell or share any of its information it collects with any other third-party companies. It’s important to note that the most recent policy change is not going to change how Google handles your information; surprisingly, Google has been using this method of gathering information for years. The biggest and most important change is that instead of having different sets of data across separate services, now Google can combine that data to get a bigger picture. Google is going to be able to combine the data to a central location to get a more accurate and realistic representation of usage of services. As more user-based business appear online, it is imperative to stay educated on how companies such as Google handle such sensitive information.
A major feature of this new policy change is the ability to opt out of these services by turning off search history while logged into your Google account. The best way to opt out using Internet Explorer is to go into your Internet Options to disable the collection of browser history from the general tab. Mozilla Firefox requires that you go into the privacy settings to choose “never remember history.” Google Chrome has possibly the easiest way of opting out by using Google Chrome’s built in Incognito Mode. Allowing Google to gather and use your search data will start to modify results towards your trending usage.
A good example of a positive change for the individual begins by pretending that you search frequently about political subjects. Eventually, Google will recognize that you are viewing websites with a particular bias. Over a set period of time, websites that display an opposite bias will begin to have a lower priority in your search results. Another example of how Google will use your information to your benefit is interest-based advertisement. Google will use your trending searches along with other data to create “smart ads.” For instance, if you search for bicycling and outdoor sports regularly on YouTube, you might see adds generated that will display local bicycle shops the next time you do a search on Google’s homepage. As you can see, Google’s policy does not appear to be all as bad as some may try to tell you.
If you have any questions or need help adjusting your privacy settings, please contact us and a Tech Analyst will happy to assist you.
Contributions to this article were made by Devin Sag, Tech Helpline Technical Analyst
About Tech Helpline
The Tech Helpline goal is to provide superior technology support services to all. We have been in operation for ten years, and our talented, US-based analysts share a passion for technology and are here to help you with your technology questions.
Tax Resolutions for 2012
Many people resolve to be wiser with their money in the new year, and it just so happens that being smart about your taxes is a good way to get started.Whether it’s your only resolution or just one of a few, sticking to your new year’s tax resolutions throughout the whole year is the trick to being successful. And just like resolving to be healthy during the year will have you in better shape for the future, following your financial resolutions can make tax time far easier next year.Use these tips to help build a successful approach to your tax resolution. Get started now. Procrastination can be your downfall – it often happens that the longer you put something off, the more daunting a task it seems. And the last thing anyone needs is an excuse to be more overwhelmed by the thought of working on taxes. If you know that you struggle with preparing your return, make the call to a professional who can help you. But again, don’t wait – tax preparers’ appointment books fill up fast during tax season. Set up a filing system – and stick to it. The flurry of paperwork is stressful enough when you’re doing your taxes – not being able to find a necessary slip of paper only makes it worse. Create files for receipts and other documents and be sure to keep them updated. If you want to go digital, use a scanner to file everything neatly away in specialized folders on your computer. Take advantage of tax-saving benefits offered by your employer. If they’re available to you, consider how much smarter it is to use pre-tax dollars for things like medical expenses and child care. If you need more guidance about how to best take advantage of the offered programs, check with your human resources department, or your own tax preparer or financial planner. Promise to give yourself a tax check-up twice a year. Don’t let yourself be shocked when tax time rolls around – the psychological and financial stress of being unprepared for a big tax bill can take a major toll. Do yourself a favor by checking on your tax liability a couple of times through the year. If you need to make adjustments to your withholding, do so as quickly as you can. Even if you find that nothing needs to be changed, you’ll have something to smile about and one less worry to occupy your mind. Make it a habit to save. Putting extra money away is always a good habit, whether the intent for it is to help pay off tax bills or to purchase a new vehicle. Giving yourself a little extra cushion to fall back on doesn’t have to make you feel fiscally stressed, though. Put away $20 here and there, or have a percentage of your paycheck sent directly to a savings account, and you’ll be excited by how much you have at the turning of the next new year.Bothersome as taxes can seem, if you prepare for them throughout the year, you might find the experience far easier the next time you have to file. For more ideas about a financially sound new year, visit blog.equifax.com.
via At Your Service.
Coldwell Banker University is #1!
Coldwell Banker University is #1!
Coldwell Banker University has gained a major honor. Training Magazine unveiled its prestigious Top 125 list last night in Atlanta. Coldwell Banker University ranked #1 for all real estate brands – a whopping 64 spots ahead of our nearest real estate competitor. Overall, Coldwell Banker University placed #9 for all industries in the top 10 with the likes of Verizon and McDonald’s!
Coldwell Banker University has more than 80 breakout sessions at the coming Generation Blue Experience. Learn from the best!
Here is how we stack up:
Coldwell Banker #9
Keller Williams #73
Century 21 #96
ReMax #108
Congratulations!
© 2012 Coldwell Banker Real Estate LLC. All Rights Reserved. Coldwell Banker® is a registered trademark licensed to Coldwell Banker Real Estate LLC. An Equal Opportunity Company. Equal Housing Opportunity. Each Office Is Independently Owned And Operated.
Four Simple Ways to Raise Your Credit Score
Raising your credit score can improve your life in many ways. You’ll have access to cheaper mortgage rates, you’ll pay less for insurance, and you may even have a better shot at your dream job. Here’s how to proceed:1. Know what’s going on.Annual credit report.com allows you a free report from all three credit bureaus once a year. Avoid other "free credit report" sites, which are really attempts to sell you something. You’re also entitled to a free report if you’re turned down for credit. Dispute any misinformation that negatively impacts your score. Creditors have 30 days to verify their report or they must remove the negative information.2. Pay your bills on time.It may seem obvious, but it’s amazing how much one late payment can hurt you. To help avoid this, have your monthly bills withdrawn from your checking account automatically. If you’re ever unable to pay, don’t just ignore the bill. Call the creditor and try to work something out. Sometimes creditors forgo a negative report if you make a good faith effort to pay what you can.3. Pay down your card balances.Credit scores are based on how much credit you use in comparison to how much is available. The smaller your balance, the better you’ll look, but don’t avoid using credit altogether. You can’t have a good credit score without using some credit.4. Avoid closing unused accounts.Unused accounts help by showing successful payment history. Closing them means you have less credit available, which hurts your score.Improving your credit score is often easier than you think, and most situations are far from hopeless. With a little effort, you can enjoy all the benefits of a better score.
Positive Housing Market Trends
Mortgage rates have hit record lows, which means housing affordability is at an all-time high. But are home buyers taking advantage of this opportunity? The latest real estate news suggests that potential home buyers are becoming actual home owners.According to the National Association of Realtors NAR, pending home sales for November increased 7.3 percent to the highest level in 19 months. The Pending Home Sales Index assesses the health of the real estate market by evaluating housing contract activity. An index of 100 is considered healthy; the November index sits at 100.1, up from the previous year’s November index of 94.5. The index hasn’t been this high since April 2010, when the then-upcoming deadline for the home buyer tax credit created an increased demand in the housing market. In today’s market, there might not be a tax credit incentivizing buyers, but there are record-low mortgage rates. Potential buyers who have been waiting on the sidelines for the market to improve are finally signing contracts to take advantage of a 30-year fixed-rate mortgage below 4 percent.The Supply of Homes on the Market DecreasedThe total housing inventory for November fell 5.8 percent. By the end of the month, 2.58 million existing homes were available for sale. Of those homes, 29 percent were foreclosures and short sales, down from 33 percent a year ago; while still high, this is movement in the right direction.Construction Spending IncreasedThe improving real estate market is also boosting the construction trade. According to the U.S. Census Bureau of the Department of Commerce, construction spending rose 1.2 percent in November, due in large part to a 2 percent increase in residential construction spending.Residential construction spending is up, foreclosures are down and more real estate contracts are being signed. Unfortunately, not all of those contracts will make it to closing. According to NAR, around 33 percent of its members reported contract failures, on track with October numbers but far above the reported 9 percent of contract failures a year ago. The possible reasons for these contract failures are varied; declined mortgage applications, failed home inspections, and low appraisals can all sink a deal. NAR economists believe that the number of existing home contracts that make it to closing should increase in the months ahead.Are You Ready to Buy?If you’re looking to purchase a home, take every precaution to ensure your deal isn’t one of the 33 percent. Secure your financing before placing an offer on a home, and seek a second appraisal if the first is too low. If your first deal falls through, don’t be afraid to make an offer on another home. Based on the latest real estate news, it’s a good time to buy.
via At Your Service.
Is it a Good Time to Invest in a Rental?
If you’ve been watching the housing market’s long-term slump, you’ve probably wondered if it’s time to pick up an investment property. Here are the things you need to check before you make that commitment:1. Your finances are solid and your emergency fund is in place. You have cash on hand to cover unexpected repairs. You’re either paying cash for the property or your credit is sound enough to get a good loan.2. The overall economic picture is stagnant or improving. If you wait for the big turnaround, you’ll be too late. Beware of trying to catch the very bottom; it can’t be seen until it’s passed.3. The local economy is strong. Keep in mind that all real estate is local. Some markets have turned around and others are beginning to turn around; these are the best places to begin your search. Make sure you understand where the economic growth comes from, and what will make it continue.4. The rental market is good. When "for rent" signs disappear in a matter of days and landlords keep raising their rents, you’ve found a great prospect.5. The cash flow looks wonderful. If that bargain foreclosure can be put in shape quickly and cheaply and your mortgage payments are covered by the rent, you have an ideal situation. If not, figure out how long it will be before you achieve positive cash flow. Be sure you can identify the catalysts that will keep your property value appreciating while you wait.6. The property has location, location, location. The schools are good, transportation is accessible, and there are no big negatives.7. The property is structurally sound. Look past dated appliances and dirty carpet. But if the house has major foundation cracks or termites, take a pass.8. Make sure you’re ready for the commitment. A rental property can be a profitable investment, especially when a down economy creates lots of bargains. If you enjoy fixing up houses and can handle the occasional emergency call, being a landlord is for you. But owning rental property isn’t for everyone, and it isn’t a good deal everywhere. Make sure you understand the market and can meet the challenges before signing those papers.h
Tip of the week – FHA 203k – by Julie Hirsch
Use the FHA 203k loan when you have buyers who want to rehabilitate a property. This is a wonderful program when a property has repairs needed. The program’s objective is to rehabilitate properties, so it’s not meant to finish off unfinished new construction. The property should have had a certificate of occupancy for at least one year. This is an owner occupied loan program, so the buyer must intend to live in the property.
From experience, I have found that the use of an FHA consultant is advantageous whether streamline or regular FHA 203k. It’s also easier to have one contractor rather than several contractors, and the contractor needs to have an appropriate license. If permits are needed then the permits should be in place by closing.
The main differences between the streamline 203k and regular 203k is that the streamline does not allow for structural repairs and is limited to $35,000 total cost of repairs which needs to include the contingency factor.
The appraisal is based off of the value of the property once improvements have been made.
This is a great program even for a first time home buyer. I have found that the buyers who are more organized tend to work best with this program. The buyer needs to be able to select a contractor and to understand bids, etc. There are many of those buyers out there right now looking to take advantage of low house prices and fixer upper properties.
If you have any questions then let me know.
Julie Hirsch
Julie Hirsch
Sterling Savings Bank – Home Loan Division
Loan Officer
10230 NE Points Drive, Suite 530, Kirkland, WA 98033,
Direct: 425-893-5717
Julie.Hirsch@sterlingsavings.com
Coldwell Banker Branded Websites Remain Most Visited
01-26-2012
PARSIPPANY, N.J. (Jan. 26, 2012) – According to Nielsen and comScore Media Metrix, the two global leaders in digital measurement, Coldwell Banker branded websites had the highest number of unique visitors among all national real estate franchise brands for full-year 2011. This marks the second consecutive year that the Coldwell Banker brand ranked No. 1 in Web traffic among all real estate franchisors.
“The Coldwell Banker brand is clearly top of mind when consumers go online and search for a home,” said Michael Fischer, chief marketing officer, Coldwell Banker Real Estate LLC. “Consumers know our great brand and have shown a desire to utilize the suite of online tools seen throughout the Coldwell Banker network at the national and local levels.”
According to Nielson, Coldwell Banker websites had 17.5 million unique visitors in 2011, which was more than 28 percent higher than the next nearest franchise brand competitor (13.7 million). Similarly, Coldwell Banker branded websites (26.1 million unique visitors) had the highest Web traffic ranking among real estate franchisors in the comScore Media Metrix full-year ranking for 2011, easily outpacing its next nearest competitor by 21 percent (21.6 million unique visitors).
The Coldwell Banker brand continues to place an emphasis on developing its website into a hub for consumers to find and prepare for the home buying and selling process. Recent additions include the lifestyle search page and first time home buyer resource center.
Coldwell Banker Real Estate LLC accessed the aforementioned information through its subscription to both Nielson and comScore Media Metrix. The rankings encompass all consumer Web traffic (unique visitors) to national and local websites operated by the franchise brands as well as by their franchisees.
Great Decor is in the Details
Sometimes the grandest design changes are in the small details—a re-covered lampshade, painted knobs for old cabinetry, a new valence above a window. Plus, small changes are manageable because they don’t cause household upheaval. Transform your home decor style by paying attention to little design details.
Replace dated hardware for a shiny new look.
Simply replacing wooden doorknobs, for instance, with gorgeous crystal knobs can add dramatic vintage appeal to bedrooms or closets. Switch nondescript drawer pulls with something sleekly modern or decidedly retro for a new look. You can find vintage hardware online; or buy stylish reproductions of old hardware in many home improvement and home decor stores.
Paint small accents for a big design statement.
Painting can be a big project, but a few strategically painted accents are enough to make a huge design statement. For a surprising pop of color, paint a medallion around a ceiling fixture, or paint an old hutch a bold color and use it to brighten a dark corner. Painting furniture not only breathes new life into old, shabby pieces, but it also ties mismatched pieces together.
Swap out weary fabrics to revive a room.
If you are tired of staring at the same prints in a room, consider swapping them for pieces of tapestry. Change out picture frames too. Matching black frames might indicate a more contemporary look, while vintage frames will add charm. For inexpensive updates that add visual appeal to any room, consider a new tablecloth for a dining room table, new curtains for windows, re-covered throw pillows for sofas, and new seat cushions for chairs.
Add the unexpected.
Move a dining room chandelier to the bedroom or bring in an interesting piece of furniture to break the monotony of a matchy-match set. Make a treasured family heirloom the focal point of a room.
Show off a collection.
Don’t hide beautiful china in a cupboard. Instead, place it out on a buffet or on top of a shelf where it can be seen and enjoyed. Frame your collection of vintage postcards to hang in a hallway; show off antique quilts or chenille spreads in an armoire or make a pottery collection stand out by displaying the pieces together. Collections that are part of a home’s design style are easier to enjoy than collections that are haphazardly displayed.
Memorable style is all about attention to details. Visit a local bookstore and browse through the decorating books. Bring a notebook and write down the design elements that catch your eye. All the small changes you make around the home will add up to some big design changes you’ll love.
What to Ask Before Buying at a Foreclosure Auction
Although foreclosed properties can be good deals, the process of buying is rife with pitfalls. Here is what you must know:
1. Have you done your research?
A foreclosed property may have all sorts of clouds on its title, from multiple bank loans to tax and contractor’s liens. Once you buy, you’re responsible for all such balances. Be especially wary of the situation where one bank forecloses, but another still demands to be paid.
2. How far has the process gone?
If the foreclosure hasn’t happened yet, it’s often possible to contact the owners and arrange a pre-foreclosure sale, which can benefit both parties. The next step is the foreclosure auction, where the greatest risks and rewards are found. Finally, it’s possible to buy post-auction properties from the bank. These are usually spruced up, but they’re priced higher as a result.
3. What is the condition of the property?
When buying at auction, you’re usually not allowed to tour the home. Even in the other two situations, you usually buy “as is.” Always assume you’re buying the value of the land and basic structures, and discount everything else. Disgruntled homeowners have been known to strip cabinets and appliances and pour concrete down the drains. If you’re able to get into the property, hire a thorough home inspection before making a bid.
4. Will you have to evict?
If the property is occupied, getting the former owners out is your problem. An unoccupied property is often a better bet. If a formal eviction is necessary, be sure you take the cost into account.
5. Can you get a loan?
Keep in mind banks are often unwilling to loan money on properties in poor condition. Moreover, auctions usually require you to show up with cash in hand. Given extra repair costs and other possible surprises, foreclosure purchases require an ample cash cushion.
Foreclosures can be a great deal, but they are best pursued by those with a tolerance for hassles, knowledge of the game, and an ample checkbook. If that’s not you, a non-distressed home sale or a short sale is a better option.
Mortgage Rates Remain
According to the Freddie Mac Primary Mortgage Market Survey, average fixed mortgage rates have held steady in recent weeks. For five weeks in a row, average rates on 30-year fixed-rate mortgages haven’t increased over the 4 percent mark. At the same time last year, the average rate on 30-year FRMs averaged 4.46. While the 15-year FRMs held steady at an average of 3.3 percent from the week before, rates are down an average of 0.51 percent from the same time last year. Adjustable-rate mortgages, meanwhile, have also fallen to record lows.Good News for Home BuyersThe loss of percentage points is good news for home buyers. Due to these low mortgage rates, home affordability has never been higher. And it seems as if home buyers and homeowners looking to refinance are taking advantage of this opportunity. Data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey shows that for the week starting November 28, mortgage applications were up 12.8 percent from the previous week.An Increase in Consumer ConfidenceThe Conference Board Consumer Confidence Index improved from October to November―jumping from 40.9 to 56.0 percent in the span of a month. A decrease in mortgage rates and an increase in consumer confidence may help explain the recent report from the National Association of Realtors, which shows a sharp increase in pending home sales, from 84.5 percent in September to 93.3 percent in October.Higher FHA Loan LimitsBuyers looking for a home in one of the country’s high-priced housing markets just caught a break. The recent passing of a bill reinstated the former limit of $729,750 for Federal Housing Administration-backed mortgages in high-priced areas, effectively canceling the October imposition of a $625,500 ceiling. Unfortunately, Fannie Mae and Freddie Mac backed loans won’t see an increase in line with the FHA.The rise in mortgage applications and pending home sales means many people are taking advantage of these record-low mortgage rates. If mortgage rates remain at record lows, more Americans should regain their confidence in the real estate market.
via At Your Service.
Current Tax Breaks for Homeowners
There are many benefits to owning a home, not the least of which are the financial advantages of home ownership. Homeowners can gain a number of tax benefits, and, combined with the Fed’s indication to keep interest rates attractively low throughout the new year, home buying in 2012 is promising to be a financially astute plan. Consult with your accountant about which of the following perks you might enjoy.
Mortgage Interest Deductions (MID)
This deduction allows home owning taxpayers to reduce their taxable income by the amount paid in interest on their residential home loan. Since interest payments alone can easily be double (even triple) the sale price of the property, this deduction can be quite valuable!
In 2011, the legislature considered putting this tax benefit on the chopping block. The good news is that the deadline for action passed in November, and there is presently no proposal to limit this mortgage interest deduction.
Home Improvements
Improvements that add value to a home can be deducted. From increasing energy efficiency through improved insulation or high performance windows to installing qualifying medical improvements like wheel chair ramps, upgrading your home can pay you back with some significant tax breaks. (This doesn’t apply to necessary home repairs, however.)
On the market?
Hang onto all records relating to the sale of your property, since selling costs can be deducted from any capital gains you realize from the sale. Selling costs can include agent commissions, title insurance, legal and inspection fees, even administrative and advertising costs. Some minor improvements and repairs might be considered selling costs, if performed within 90 days of the sale to increase the property’s appeal. Moving costs might also be deductible.
Property Tax
Property taxes (called "real estate taxes" in some areas) are fully deductible. Take into account any city or state property tax refunds, as those will affect the total amount you can deduct.
Telecommuting Benefits
Current estimates indicate that 20 to 30 million people in the U.S. work from home at least part of the time. There are some great deductions to be had for telecommuters. Office supplies, computers, telephones, fax machines and other office equipment, including furniture, can all be deducted. So can painting or repairing the home office for upkeep. Also, calculate the appropriate percentage your home office uses of the utilities and household rent or mortgage.
Other Possible Breaks
The deduction for Private Mortgage Insurance premiums is set to expire soon, but it’s been extended before, so there’s a chance that benefit could continue. Various "green" technology benefits may be available. Be sure to ask your CPA about all the ways home ownership can save you big money.
via At Your Service.
VA Loan Tip by Julie Hirsch
VA King County loan limits have just decreased from $500,000 to $458,850. The 2012 limits apply for VA loans funded on/after 01/01/2012. A heads up if you have any VA clients with loans greater than $458,850. VA made the change with no formal announcement to lenders.
Please let me know if you have questions.
Julie Hirsch
Sterling Savings Bank – Home Loan Division
Loan Officer
10230 NE Points Drive, Suite 530, Kirkland, WA 98033,
Direct: 425-893-5717
Julie.Hirsch@sterlingsavings.com
What Homeowners Should Know About Strategic Default
Who would risk the negative impact of defaulting on a mortgage if they didn’t really have to? About 17 percent of Americans who defaulted on their mortgages in the second quarter of 2010 did exactly that, according to a study by Experian, the leading global information services company.
"Strategic default"—choosing to stop paying on your mortgage even if you can afford the monthly payments—peaked at the end of 2008 during the height of the Great Recession. At that time, strategic defaults accounted for 20 percent of all mortgage defaults 60 or more days overdue, according to Experian.
And while the percentage of Americans taking this option has steadily declined since then, the credit risks for strategic defaulters remain unchanged.
"Not paying your mortgage will have a far-reaching, long-lasting impact on your ability to secure future credit, regardless of the reason for your default," says Charles Chung, Experian’s president of Decision Analytics. "Experian’s study indicates that many strategic defaulters continue to faithfully pay on their other debts. Some even purchase other homes for better terms before selectively defaulting on their upside-down mortgage."
For those who owe more on their home than its current market value, it’s tempting to walk away from a bad investment, even if the monthly mortgage payment is affordable. But when considering strategic default, homeowners should keep several factors in mind:
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Defaulting on a mortgage is the second most damaging thing someone can do to their credit, even if they continue to pay other bills. Only bankruptcy will affect a credit score more adversely than foreclosure.
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Foreclosure remains on a credit report for seven years. During that time, securing other credit at reasonable terms and rates will be very difficult, if not impossible.
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Potential employers are looking at credit reports. In fact, 60 percent now check applicants’ credit reports, according to an article in the Washington Times. By impacting their credit, a strategic default may affect their ability to get a job.
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Fannie Mae, the government-controlled mortgage giant, said it would implement a policy to prohibit strategic defaulters from getting a new Fannie Mae-backed mortgage for seven years from the date of foreclosure.
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Finally, in some cases, the debt that foreclosure "erases" may be recorded as income, which means taxes will have to be paid on it.
"Some may see strategic default as a way to get out of paying a bad debt," Chung says. "But its associated costs like a lower credit score, higher interest rates and less ability to secure future credits, can wipe out the financial benefit of no longer having a mortgage payment."
To learn more about credit management, credit reports, credit scores and the factors that affect them, visit www.Experian.com.
Destroying Household Odors
Candles, potpourri, spray fragrances and such will cover up an unpleasant household odor, but covering up an odor does only that; cover it. These pretty fragrances will not eliminate the odor at its source for a lasting solution. For that, you need to do one of two things:
Absorb the Odor
Baking soda is the most commonly used and recommended product for absorbing odors. And it’s inexpensive (about one dollar a box) and effective. Many of us know that to remove an odor from a refrigerator we simply need to place an opened box of baking soda in the fridge or freezer compartment. The same technique will work in any small, enclosed area of the home, closets and storage chests included. Baking soda can also be used to absorb carpet and furniture odors by sprinkling it onto the offensive area, then allowing the baking soda to sit for several hours before vacuuming it up.
Another way to use baking soda as a household deodorizer is to mix two cups of water with two teaspoons of baking soda in a spray bottle. Mist the mixture onto soiled surfaces.
Looking for more odor absorbers? Try kitty litter, charcoal, chalk or newspaper. Litter and chalk can be left in open containers. Contain the mess of charcoal by placing it in a box or container with several holes punched in it. These are especially effective at removing musty odors in damp areas, as the substances will absorb humidity in the air as well.
Neutralize the Odor
Neutralizing an odor that is trapped in a fabric or porous surface is the best, and often the only way to permanently eliminate it. Look to your kitchen cabinet for a common household grocery item that serves double duty as an odor neutralizer: vinegar.
Vinegar is useful for a variety of cleaning purposes and odor removal. Vinegar is especially useful for cleaning odors caused by pet accidents and is recommended by many veterinarians to eliminate cat urine odors. It is important to use something like vinegar to neutralize cat urine because unless the scent is destroyed, the cat will likely make the same spot his regular potty place.
Mix vinegar and water in a one-to-one solution and douse the offensive smell. Blot with a towel to remove excess liquid and let dry. Pouring vinegar into coffee pots (half cup to a pot), garbage disposals, and sink drains is highly effective at cleaning and deodorizing, as is microwaving a bowl of vinegar and water or a vinegar and water soaked dishcloth to remove odors in the microwave.
Other items to try are club soda (which is a good fabric spot and stain cleaner, too), lemon juice (not recommended for fabric) and citrus fruit wedges. Fruit wedges from lemons and oranges deodorize trashcans and garbage disposals (slice and place in the trash or run through the disposal).
Eliminate the Source
Eliminating household odors does not have to be expensive, and these handy, everyday items can do the trick nicely. The most effective use of any odor removal product is eliminating the source of the odor to keep you home odor free. Depending on the surface, a thorough soap and water washing may be all that is needed; for sensitive fabrics and hard to reach odor origins, try using one of the methods mentioned here.
via At Your Service.
Update Your Home with Color
Are you tired of your bland color scheme? Whether you add color to your walls or handpick some colorful accessories, the right colors can turn your home into a stunning showplace. Here are some ideas to keep in mind when using color.
Warm or Cool?
Warm colors tend to be energizing. If you want to enliven a dull room, add splashes of yellow, red or orange. For an easy fix, add cozy cushions, sumptuous drapes and soft carpets in warm tones.
Cool colors have a relaxing effect. To settle a busy room or create a calming sanctuary, choose hues like blue, green or mauve.
What Color Should I Paint My Walls?
When choosing color for your walls, less is more. The bright red that looks so appealing on a one-inch square sample in the shop may look quite different on your walls. It’s worthwhile to spend a little extra time and money comparing paint samples in your home before making a final choice. Try to view the colors during different times of day and under various lighting.
Rich, warm hues can be especially overpowering in large doses; on the other hand, one accent wall in a jewel-like warm color can be splendid. Pale, cool colors usually work well on walls, as the effect is more subtle. Whatever color you choose for your walls, you can draw it out with furniture, window treatments and accessories in darker or lighter shades of the same hue.
Add Color with Furnishings and Accent Pieces
Is your old furniture ready for an update? Give a worn-out, neutral colored couch a trendy new look with a fitted slipcover. Slipcovers come in dozens of colors, textures, fabrics and patterns, so you’re sure to find something that appeals to the interior designer in you. Choose slipcovers that complement the existing color scheme in your room, or go for an exciting new palette to give the room a radical change.
Colorful throws, pillows and rugs can also add interest to a neutral color scheme. Choose complementary colors for a striking look. For a more streamlined, simple effect, choose colors that match or are similar to the color of the furniture and walls. Try painting your walls pale blue, and then add lampshades in a darker shade of the same blue for a professional effect.
Remember, your use of color can make the difference between a boring room and a finished, enticing retreat. Don’t be afraid to experiment with colorful slipcovers, cushions and rugs to create striking effects.
Loan Tip of the week
Just a heads up that the appraisal system has changed again. To comply with the new Fannie Mae/Freddie Mac guidelines, we are not releasing appraisals to borrowers until the appraisal has been reviewed and approved by underwriting first. This would prevent a situation of a client getting an appraisal and then having value contested afterward by underwriting. The best solution for your loan officers to shorten processing time is having files submitted to underwriting, to have conditions cleared, in advance of receipt of appraisal.
On another note, due to VA taking huge losses, VA has tightened it’s credit guidelines. I will need several VA cases run through on the software to figure out the changes that VA has made for credit and ratios. However, I think the “spirit” of the new guidelines is to have changes such as lowering debt ratios to 45% – 50% similar to Conventional financing. If you have any VA files in process, then you may want to make sure that your approvals will hold through closing.
On a positive note, I have an approved file with 80/10/10 financing in the $700k price range. The trick is finding the second mortgage, and I found a credit union who was game for making the loan. This is still highly unusual, but it’s always worth trying to make deals work!
Have a wonderful holiday!!
Julie Hirsch
Julie Hirsch
Sterling Savings Bank – Home Loan Division
Loan Officer
10230 NE Points Drive, Suite 530, Kirkland, WA 98033,
Direct: 425-893-5717
Julie.Hirsch@sterlingsavings.com
