Christi Nelson's Lake Oroville Real Estate Blog

Interest rates are low and prices have come down. Some buyers have decided that it is a good time to buy, even if it is a little while before the Oroville Real Estate Market fully stabilizes.

Buyers who have a house to sell face a more complicated situation than they did when they bought their first home. They may not be able to afford to buy a new house before selling the old one. And, it may be more difficult to find a home to buy because many sellers are not selling now due to current market conditions.

Despite complications, homeowners who want to trade up in a down market can benefit financially. They may sell their current home for less than it might have sold for a few years ago, but they also could pay a lot to less for the replacement home.

Let’s say your current home that was worth $300,000 two years ago is now worth $200,000, or 20 percent less. Even though you would sell for $100,000 less today, if you buy a $1 million house that two years ago was worth $1.25 million, or 20 percent more, you come out $150,000 ahead.

Interest rates are still at an all time low! Even edging up this week, they are 4.81 on a 30-year fixed. On a $200,000 mortgage the principle and interest payment at todays average rate would be about $1049, compared to $1,199 a year ago. A savings of $150.00 per month.

Combine those two major factors and add the $8000 tax credit to first time buyer and the $6500 credit to move up buyers and you have a win win situatuion!

The 30-year fixed-rate mortgage averaged 4.91 percent with an average 0.7 point for the week ending November 12, 2009, down from last week when it averaged 4.98 percent. Last year at this time, the 30-year FRM averaged 6.14 percent.

 Mortgage Rates
30 Year Fixed: 4.98%
15 Year Fixed: 4.40%
1 Year Adj: 4.47%
(U.S. Weekly Averages)

I came across this article again, and thought it might be a good to share at this time.. Alot of buyers are aware of the tax credit but still are on the fence in fear…What if  “life happens” and I lost my job? Fear of being in the   same  situation as alot of the homeowners now. Well this article may help put your mind at    ease,  but dont forget the clock is ticking on the credit. You MUST close escrow by midnight on November 30th to qualify! Oroville Real Estate

 To help provide first-time home buyers with peace of mind when purchasing a home, the CALIFORNIA ASSOCIATION OF REALTORS® Housing Affordability Fund (C.A.R.H.A.F.) is offering a mortgage protection program to first-time home buyers.

Through the C.A.R. Housing Affordability Fund’s Mortgage Protection Program, first-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month, for six months, to help make their mortgage payments. A qualified co-buyer also can participate in the program, and receive a monthly benefit of $750 per month for up to six months.

To qualify for the Mortgage Protection Program, Applicants must:

1. Be a first-time home buyer – someone who has not owned
             property in the last three years (includes co-buyer)
2. Open escrow April 2, 2009, or later, and close on or before
   Dec. 31, 2009 (purchase agreement cannot be dated before April 2, 2009 (purchase agreement cannot be dated before April 2,2009)
3. Use a California REALTOR® in the transaction
4. Purchase the property in California
5. Be a W-2 employee (cannot be self-employed)

Read more…

Recently I went to the Realty World NCA event  where I was introduced to the team at Realty World Financial Services, Inc. I learned of some great programs they have to help homeowners in financial distress.

It is important to remember that we want to do everything we can to help homeowners KEEP their homes. Many homeowners are fighting like crazy to stay in their home and barley making it. Homeowners that are current on their payment but in trouble may find this a perfect solution. With all the different talk of scams and failure to find anyone to do a loan modification, I was pleased to hear that they actually were helping homeowners.

Their goal is to educate you on all aspects of the Short-Payoff-Refinance and Modification so that you are 100% aware of exactly how to obtain the approval that you deserve.
 
Unlike a Loan Modification, where you are modifying your existing mortgage to more  favorable terms, due to some form of ‘hardship’,  the Short-Payoff-Refinance is qualifying for a new FHA 30yr Fixed Loan or “New Money” as they say in the mortgage business, and paying off your existing lender for 90 to 97% of ‘Fair Market Value’ of the home.
 
With a Short-Pay, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor but more importantly the lender.  This negotiation is all done through communication with a bank’s internal department’s.  Once the Discounted Payoff Demand has been obtained by the current note holder, the refinance is completed and the proceeds of the refinance to the original lender is in full satisfaction of the 90 to 97% agreed upon debt.  In such instances, the lender would have the right to approve or disapprove of a proposed loan balance. These circumstances are usually related to the current real estate market and the borrowers’ financial situation. .

They are also very well equipped to perform Loan Modifications by using a streamlined approach using HTI (Home to Income) and NPV (Net Present Value) tools to assist borrowers.

If you are a struggling homeowner, please contact me at mail@ChristiNelson.com so that I can put you in contact with a loan officer.

REO stands for real estate owned. This term is used when referring to a home that has gone through the foreclosure process, failed to find a buyer at the auction, and is now owned by the bank. One of the major benefits of buying a bank-owned REO property vs a Foreclosure is that buyers can purchase the home free of title liens and other claims. Lenders generally expunge all second and third liens, as wells as delinquent taxes, HOA and mechanics’ liens.  In addition, there are no tenants to deal with or evict and the property evaluation process can be done easily.

Making an Offer

Offers are usually FAXED to the bank by the listing agent. There is no formal presentation. It may take a few days to get an answer, so be patient. Keep in mind: nothing happens evenings and weekends (banks are closed)

Since there is no face-to-face presentation to the bank, provide the listing agent with a pre-qualification or better yet, a pre-approval letter when submitting an offer. Most times you will be required to go through a certain lender for that letter, and not doing so could cause you to lose the property. However you may choose any lender for the actual financing of the purchase, once you have an accepted offer.

Usually, if you didn’t offer full price, you can expect to get a counter offer from the bank. It will be the banks agreeable terms so read everything carefully as they only put what they WILL do and everything else in your offer is VOID. The counter offer can come with additional bank addendums to the contract and should be read carefully by both you and your real estate agent. Be prepared, these counter offers and/or addendums can be many pages long, and they are nothing to be afraid of. Just make sure you are agreeable to all the terms they have set.

Property Condition

Banks always want to sell a property in “as is” condition. Most will provide a Section 1 pest certification, but not unless you include it in your offer and negotiate the point. They will allow you to get all the inspections you want (at your expense), but they may not agree to do any repairs.Your offer should include an inspection contingency period that allows you to terminate the sale if the inspections reveal unanticipated damages that the bank will not correct. The banks usually give 7 to 10 days so know what inspections you want and order them as soon as you have an accepted offer.

I highly recommend everyone get a full home inspection! 

Even though you agreed to “as is,” always give the bank another opportunity to make repairs or give you a credit after you’ve completed your inspections. Sometimes they’ll re-negotiate to save the transaction instead of putting the property back on the market, but don’t take it for granted. They are required to get as much as they can for the property and may not do any repairs, willing to put it back on the market! Keep in mind it is all just a file to them. There is no personal connection as with a typical seller.

 A short sale is a sale of real estate in which the proceeds from the sale are less than balance owed on a loan secured by the property sold.
In a short sale, the bank or mortgage lender agrees to reduce a loan balance due to an economic or financial hardship on the part of the borrower/mortgagor.
A short sale typically is done to prevent a home foreclosure. Often a bank will allow a short sale if they believe that it will result in a smaller financial loss than foreclosing as there are carrying costs that are associated with a foreclosure. For the home owner, one advantage includes avoidance of a foreclosure on their credit history. A short sale is typically faster and less expensive than a foreclosure for the banks.
This negotiation is all done through communication with a bank’s loss mitigation department, and usually your real estate professional. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes (but not always) in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale.
In short, a short sale is nothing more than negotiating with the bank a payoff for less than what they are owed.