Look before you leap into buying a house

Here is some sound advice from the California Association of Realtors.... Right now there are still people out there trying to take advantage of good people... do your homework. I get scared when I see signs that say "Buy this home for $500.00 down" I know how mortgages work and what banks require and realize that these people are ripping other people off. Again if it sounds too good to be true... well you know what happens....

With interest rates and home prices looking extremely attractive, many are thinking of buying or refinancing a home. Before purchasing or refinancing, experts recommend that consumers conduct research prior to making such a move.

KEEP THIS IN MIND
• Most financial institutions have tightened their lending guidelines and increased their down
payment requirements. No longer can someone purchase a home without a down payment or
documented income, nor can owners refinance multiple times without sufficient equity in the home.

• One of the primary factors financial institutions consider in their decision to lend is a strong credit record. Borrowers can increase their chances of being approved for a home loan by requesting their credit report and FICO score at least six months prior to applying for a loan. This allows the consumer to dispute errors and/or pay any outstanding debt.

• The first step in deciding whether or not to purchase a home is deciding how much a borrower can afford, according to Melinda Opperman at Springboard Nonprofit Consumer Credit Management. Opperman recommends home buyers spend no more than 31 percent of their gross income on a home payment, including principal, interest, insurance, property taxes, and homeowners’ association dues.

• Home buyers also should have a savings account with funds available to pay for home
maintenance and unforeseen emergencies, such as a job loss. First-time buyers who are
concerned about a potential job loss are urged to apply for the CALIFORNIA ASSOCIATION OF
REALTORS® Housing Affordability Fund (C.A.R.H.A.F.) Mortgage Protection Program (MPP). The C.A.R.H.A.F. Mortgage Protection Program provides qualified, first-time home buyers with up to $1,500 for up to six months to help make mortgage payments, if they are laid off. Applications must be submitted by a California REALTOR®, among other qualifications. For more information about MPP, please visit

• Refinancing can provide homeowners lower interest rates and, in some cases, greater financial
security. A senior analyst at Bankrate.com, an online consumer information service, advises that
anyone with an adjustable-rate mortgage who can refinance to a fixed-rate loan do so now because interest rates are very likely to rise in the future.

• While most loans require at least some equity to refinance, there are exceptions. A homeowner
with an existing FHA mortgage can refinance to another FHA mortgage without having equity. The new loan does not require an updated appraisal of the house, which would show reduced equity. To read the full story, please click here:

Have a great weekend,

Jeff

www.JeffHallRealtor.com

jeff@JeffHallRealtor.com