Stephen Katz Mortgage Blog

VA Loans: Pros & Cons

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Wed, 26 Oct 2011 03:55:25 -0700

If you’re a qualifying veteran or service member, a VA mortgage can be a great deal. VA mortgages offer a lot of benefits, including
being one of the few 100% financing options available. There are however, certain situations where you may be better off going with a FHA mortgage or a conventional loan backed by Fannie Mae or Freddie Mac.

Pros of a VA home loan

The government guarantees at least one-quarter of the loan amount on a VA mortgage, which is why you don’t need to put up a down payment. It’s also why you don’t have to buy mortgage insurance, which is required on FHA loans and conventional mortgages with less than 20 percent down.

Closing costs are also limited on VA loans, with the lender’s fees limited to 1 percent of the loan amount and restrictions on the
types of fees that can be paid by the buyer. On the other hand, the seller may pay all closing costs plus an additional 4 percent to cover pre-paids.

In addition, the maximum you can borrow is typically greater than what you can get in an FHA or even conventional Fannie Mae or Freddie Mac loan.

Finally, if you eventually run into a financial hardship, it’s usually easier to obtain forbearance on a VA mortgage than on other types of home loans.

Cons of a VA mortgage

On the downside, you do have to pay an upfront Funding Fee to obtain a VA loan, which varies from 0.5 percent to 2.8 percent of the loan amount, depending on your service history, down payment or whether you’ve previously obtained a VA loan. By comparison, the upfront fee on an FHA loan is a flat 1 percent. However, on FHA mortgages you have to pay mortgage insurance
equal to as much as 1.15 percent of the loan balance annually, so the VA loan will still likely be the better deal.

Conventional loans backed by Fannie Mae or Freddie Mac require private mortgage insurance (PMI) if you’re putting less than 20 percent down. So, if you are putting down 20 percent or more, a conventional mortgage could be the better deal.

VA mortgages can also take longer to close due to additional required paperwork. In addition, the home has to pass an inspection before the loan will be approved, which can further delay the process.

Finally, both VA and FHA mortgages are assumable, meaning you can simply transfer them to a qualified buyer when selling your home, rather than the purchaser having to take out a new mortgage. With mortgage rates currently at historic lows, this could be an attractive selling point a few years down the road, if interest return to higher levels.

On VA loans though, you’re still liable for the mortgage if the person assuming the loan is not a qualifying veteran. If they default,
you’re on the hook. On FHA mortgages, the mortgage can be assumed by any qualified borrower and you’re free of any further liability for it.

Dysfunctional Congress leads to even Lower Interest Rates

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Wed, 03 Aug 2011 22:02:25 -0700

Current low mortgage rates have fallen again as the U.S. continues to shows signs of a sluggish economy with a drop in consumer spending.

Dropping by .125%, today’s 30 year fixed mortgage interest rates are at 4.125%. 15 year fixed mortgage interest rates are at 3.500% and 5/1 ARM loan rates are at 2.750%, both remaining the same. Conforming 30 year fixed mortgage loans are the most desired long term mortgage product amongst borrowers because they offer the security of a monthly mortgage payment that remains the same for the entire length of the loan. With 0.7 to 1% origination fee, these are the lowest mortgage rates available to borrowers who have good credit and can also produce documentation to receive lender approval.

FHA 30 year fixed mortgage rates dropped sharply as well and is currently at 4.000%. Remaining the same, FHA 15 year fixed mortgage rates are at 3.500% and FHA 5/1 ARM loan rates are at 3.250%. While FHA low down payment requirements, as low as 3.5%, make home ownership more attainable, these low FHA mortgage rates are keeping the long term monthly mortgage payments low and affordable. FHA mortgage rates are not affected by personal credit scores which does happen with other types of mortgages. FHA offers numerous benefits that overshadow the higher FHA closing costs (APR) which is due to the upfront mortgage insurance premium and other FHA fees.

Again, today’s jumbo 30 year fixed mortgage rates dropped by .125% and are are 4.750%. Jumbo 15 year fixed mortgage interest rates are at 4.375% and jumbo 5/1 ARM loan rates are at 3.250%. Jumbo mortgage loans are used by high end borrowers who require financing above the conforming loan limit, which is $417,000 to $729,750 depending on location. Borrowers must have excellent credit to receive these lowest jumbo mortgage rates with 0.7 to 1% origination fee.

Tips to Help Your Kids have a Smooth Move

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Thu, 28 Jul 2011 19:45:27 -0700

This is a great list to start with when you move with children. You have to really see it through their eyes and work to understand their concerns. Many times, it is just about asking them questions and soliciting their feelings to help them through the process. This is a good list of checkpoints.

Moving with children can be a stressful and traumatic experience, especially for younger children. However, it doesn’t have to be. Read through these simple tips on making relocating with children easy and exciting for them, and less stressful for you!

Be Positive! It is not uncommon for kids to echo their parent’s emotions. It is important to be upbeat and encouraging toward your children about the move. Even if you are stressed. Trust me, if you alleviate the stress on your children, you’ll alleviate some of your own stress. Be sure to keep your family’s schedule on track as much as possible, so the kids don’t feel overlooked.

Communication goes a long way. Be sure to involve your children with the moving plans. Explaining the move with your kids will not only make them feel better about the situation, but also make them feel involved with the process. You will also want to make sure they understand why. Sometimes kids don’t understand the reasons for the move. All they see is the friends and school they are leaving, their home and neighborhood. Explaining the why is not going to make this better for them, but it may make it easier.

Involvement. If your children are old enough to understand what is going on, you should get them involved in the moving process. As I mentioned above, they are leaving their friends, neighborhood, and school. Getting them involved in the move will make it a more positive experience for them rather than a negative one. If you know specific information about things such as possible schools, recreational areas, clubs, etc, share it with them. Involve them with choosing your future home, and if possible take them on the house hunt. Ultimately, involving your children in any way will give them a sense of control in a situation where they may otherwise feel helpless.

Packing. Even you having a moving company coming to pack your things, it is a good idea to let your children pack up a few things that belong to them. Maybe help them to choose items that are important to them or have some sort of sentimental value. Pack them up in a box and put their name on it (i.e. “Molly’s Stuff). Then take this box with you instead of the moving company. That way the things that mean the most to your child will be right there with them.

Say Goodbye. Sounds simple, but for your children this may be the most traumatic part of their experience. People grieve over people they leave behind, even if a death is not involved. If you are moving across the country and your child is leaving behind a very good friend. Let them say goodbye. Perhaps throw a going away party for your child and let them invite those who mean a lot. It may be a good idea to make some sort of scrapbook about the things your child is going to miss. This way they can look back and experience these things even after they move. You could get them an autograph book to have their friends and teachers sign. All these ideas will help your child with the moving process and possibly the grieving process that may follow.

Kids first. Once you make the move be sure to meet your kids’ needs first, if possible. Set up their rooms first; this will help them to feel secure and at home with their new surroundings. Get them on their schedule as soon as possible and stick with it. If there are community events or recreational programs that interest your children, get them involved! This would be a great way for them to not only move on with their new life, but maybe even find new friends!

All in all, relocating is not a fun experience for anyone. You will be surprised how these few tips will relieve the pressures on your own life as well as your children’s. Be sure to take care of yourself and your spouse in the process as well. Remember no one is doing this alone and you all are in it together.

FHA may be Your Best Choice

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Mon, 04 Jul 2011 23:10:14 -0700

The demise of subprime, no-documentation and no-down-payment loans is more than three years in our rear view windows. Many folks with credit challenges and little cash have turned to Federal Housing Administration (FHA) and Veterans Affairs (VA) loans for their home financing needs.\

While the FHA has recently tightened itsstandards, it’s one of the only options for a low down payment. Consider the following:

FHA loans require just a 3.50 percent down payment in most areas.
Maximum allowable loan amounts vary from $271,050 to $793,750, depending upon the area.
Interest rates are competitive. Today’s 30-year fixed rates are as low as 4.50 percent with no points or origination fees.
3/1 and 5/1 adjustable-rate mortgages are available.
Most lenders will accept FHA applicants with credit scores as low as 620.
FHA allows gift funds for 100 percent of the down payment from a family member.
FHA allows the seller to contribute up to 6 percent toward the buyer’s closing costs and or prepaids.

The downside to an FHA loan is the mortgage insurance premium, or MIP. FHA applicants must pay MIP in two ways: first, an upfront fee of 1 percent of the loan amount, which can be financed into the loan, and second, an additional annual premium of 1.15 percent, added to the mortgage payment. But if an FHA loan is the only option, it’s well worth it.

Let’s look at the example of a $300,000 purchase. The down payment would be 3.50 percent, or $10,500. The loan amount would be $289,500 plus the 1 percent upfront MIP premium of $2,895, totaling $292,395.

At 4.50 percent, the monthly principal and interest payment (P&I) equals $1,482. Add the annual 1.15 percent premium of monthly $277 payments, and the total monthly payment, excluding hazard insurance and real estate taxes, equals $1,759. Its not a bad deal for a $300,000 house. If you’re a looking to buy and are hoping for a low cash outlay, an FHA loan is definitely worth investigating.

Your Rights Under the Federal Fair Credit Reporting Act

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Wed, 25 May 2011 02:16:41 -0700

When you review your credit report, or just begin to investigate your credit status, keep in mind that federal law provides you with a set of rights to aid in your task of gauging your credit rating. Here is a brief summary of your rights under the law.

Notification of any occurrence in which your credit report has been used to deny the granting of credit, insurance, or a job. You have the right to know which credit agency provided the data.
A free copy of your credit file each year, as well as whenever you are denied a loan, insurance, or a job because of information in your file.
Access to your credit score, though not necessarily free of charge.
Response to your identification of data on your report that you believe to be inaccurate or incorrect. The credit reporting agency must investigate your claim(s) unless they can show them to be frivolous. If the investigation finds your claim to be true, the agency must correct the report in a timely fashion.
Purging of old information that would lower your credit rating. If you have slow or missed payments that are more than seven years old, they should not be included in the report. Personal bankruptcies are deleted after ten years.
Limited access to your report. No one should have access to see your report unless they have a valid reason, such as in response to your application for credit, a job, or an apartment lease. You must give written permission for your employer or potential employer to access data.
Right to sue a credit agency or user of data that violates your rights under the Act.
For detailed information and procedures in exercising your rights, go to www.ftc.gov/credit.

What type of Mortgage is Best?

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Tue, 24 May 2011 02:01:45 -0700

A mortgage is a loan where the house and land are used as collateral for the loan. If the borrower fails to make his payments, the bank forecloses on that property. In the case of foreclosure, the bank may sell the house to clear the mortgage debt.

Here are some types of mortgages can help first-time home buyers understand the fundamentals:

Conventional Mortgage – this is a mortgage loan wherein the underlying terms and conditions meet the guidelines of Fannie Mae and Freddie Mac. Depending on market conditions and consumer trends, about 35-50 % of mortgages are conventional mortgage.

FHA Mortgage – this was initially intended for low income individuals. FHA mortgages are home loans that meet underwriting guidelines set by Federal Housing Administration (FHA) and supported by Government National Mortgage Association (Ginnie Mae).

VA Mortgage – this is offered to veterans of the United States Armed Forces and secured by the U.S. Department of Veterans Affairs. This type of mortgage requires a lower down payment , ofter zero down.

The type of mortgage that best fits a home buyer is chiefly determined by his/her financial status. Each mortgage loan requires a different down payment, different qualifying criteria, and different credit score standards.

Fixed-rate Mortgage (FRM) – this is a mortgage loan where the interest rate on the note remains the same through the term of the loan. They are the most popular. For first-time home buyers, the common choice is the 30-year fixed-rate loan, but other terms are also available.

Adjustable-rate Mortgage (ARM) – this is a mortgage loan where the interest rate on the note can periodically change. The interest rate adjusts with the market at some point during the term. The borrower benefits from a lower introductory rate.

What’s on Your Credit Report?

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Wed, 11 May 2011 01:24:26 -0700

Included in your credit report is the following:

* Personal information; your name, current and previous addresses, Social Security number. Any civil judgments, tax liens (federal or state), and bankruptcies.

* A list of your current active, and closed, credit accounts, including bank credit cards and store accounts.

* Any record of slow payments, missed payments and delinquencies.

* Length of time each account has been open.

Look for the following when reviewing your report:

* Any Incorrect information – an account that you never opened, one that you know you have closed, any payments that are not showing and that you have evidence of having paid. Accounts that you never opened could be a sign of identity theft – someone opening an account under your identity.

* Any of your personal data that is wrong.

* Persistent history of late payments, especially involving penalties for missing due dates. If this data is accurate, you probably will not qualify to get the best terms on your loan.

* A habit of making the minimum payment on credit cards, thereby creating a growing balance, will lower your credit rating.

* More than a few active credit cards and more than four or five store accounts will have a negative effect on your credit rating.

* Outstanding debt that is a large percentage of the credit extended to you. If you are “maxing” out your credit cards, lenders will not be eager to extend credit to you on favorable terms.

If you find negative information on your credit report, and it is correct, you have two options. You can push back the home purchase decision until you can improve your credit rating, or you can move ahead and accept whatever loan terms you are offered. Changing your credit rating may take several months of diligence on your part, but it will save you a lot of money in the long run and make the purchase easier. If you decide to go ahead, contact a lender early to see what type of loan you can get with your current credit history. Be careful of taking on more debt.

How Much Mortgage Can I Get?

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Tue, 26 Apr 2011 20:04:19 -0700

The difference between the cost of the house and the amount of cash you have to put down is filled by one or more mortgage loans. A mortgage loan differs from other types of loans in that the loan is secured by the property you are buying. In other words, the lender does not have to depend on your word to assure that the loan will be repaid. If for some reason you cannot or are unwilling to make your payments on time, there is a legal procedure called “Foreclosure” through which the lender takes over the property or will have it sold to satisfy what you owe. That is the main reason the terms on mortgage loans can be much more liberal than on a credit card or other unsecured loan.

The loan terms you get will depend on two main factors: the economy and your personal risk assessment. The primary effect the economy has on your loan is to determine the interest rate. Interest rates rise and fall according to the supply and demand of money in the financial markets coupled with the forecasted rate of inflation. Rates also vary for different kinds of mortgage loans. In almost all cases, “fixed-rate” loans will be more expensive than “adjustable-rate” loans.

The better you look to the lender, risk-wise, the lower your interest rate and costs will be… and the more likely you are to get a low down-payment loan. A lot will depend on your credit score which is a good indication to the lender of your ability/willingness to pay your loan payments on time. Credit score is a number that condenses the information on your credit report to a scale between 400 and 850. It may make you uncomfortable that someone has reduced you to a number, but the risk of extending you a loan based on some criterion. Credit scores are not perfect, but they are an improvement over judging you based on more superficial criteria, such as your family status, or social class. Indeed, you can always take steps to improve your credit score.

Advice from a Home Inspector

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Sun, 17 Apr 2011 08:43:18 -0700

From a home inspector’s point-of-view, my advice is to buy simple and buy smart. Buy what you can afford, not what will make you look good to others. “Keeping up with Jones’s” is not reasonable in real estate. You can no longer expect a fast-rising market to bail you out of a purchasing mistake, as was often the case in the past.

For New Construction

When I say buy simple, I mean select a home of good, quality construction. When I say buy smart, I mean choose the features you need- do not be lured into closing by extravagant upgrades that you will not use anyway. Think Honda, not Jaguar. Fancy trim on the outside = more painting and places for rot. Lots of crown molding and fancy trim inside = more dusting, more painting, and more cracks as the trim shrinks.

By all means, upgrade to the stone countertop, it will last. Forego the Jacuzzi that you will use only until the novelty wears off. If you do purchase a Jacuzzi, be sure to get the optional heater; otherwise, the water cools too quickly and you will likely only use it once a month.

Despite what the flooring representative claims, hardwood floors are always a better choice than pre-finished laminate veneer. Most of the homes I inspect are not new. I SEE what lasts and what does not.

The fancy stove range that does everything is very appealing in theory. In reality, however, most individuals spend very little time cooking. Restaurant sales in America prove this, as does my experience of seeing 4-year old homes with ratty microwaves, while the 2nd oven has the factory sticker still on the inside door. Spend upgrade money on something you will use, such as better cabinets, a better faucet/sprayer, or bigger sinks.

Get the garage door opener first, as you will likely be buying curtains and furniture for your new home after closing. Besides, most people don’t have the tools, ladders and other things that you will eventually have to buy, even if you do not want to.

Here is the best advice I can give (though most individuals tend to ignore it): opt for the most energy efficient furnace and a/c unit you can obtain.

For Resale’s

Evaluate the outside of the home and the surrounding neighborhood. This is what visitor’s see first and what buyers will look at when YOU go to sell. I do not recommend the practice of buying a home in a bad neighborhood because it is cheap. It is cheap for a reason. When it comes to buying in “up and coming” neighborhoods, be very careful.

From a home maintenance point-of-view, water is the biggest concern. Water will destroy your home far quicker than termites. Leaks, rot, and mold go hand-in-hand. Elaborate roof lines with valleys and gables cost more to re-roof and tend to leak more. Once again, simple is better.

Siding is also a top home maintenance consideration. Brick is best, followed by Hardiplank (cement), vinyl is ok, but it depends on the grade (vinyl is never painted, so if you do not like the color, walk away). It is also important to note that starter homes were often built with cheaper (thinner) vinyl. Stucco is a mixed bag. There is hard stucco and EIFS. Both can have problems if the original installation was poor. Wood will require more frequent caulking and painting than any other siding.

Once you buy, here is what you need to know: Homes are not throwaway items.

That statement seems simple and almost stupid to put in print, but you would be amazed how many new home buyers treat it as if it was.

Simple repairs become big repairs if left for too long. Some can even become a nightmare. Clogged gutters can become a basement/crawlspace water problem, and if left even longer, this can cause a mold issue.

A little drip from the icemaker line can ruin floors, cause mold problems, and damage the floor on the other side of the wall. Leaking drains underneath kitchen sinks will quickly ruin the cabinet bottom. All cabinets are particleboard these days and can not withstand water exposure for extended periods of time.

Once per year, go around the outside of your home and touch-up any caulk that is cracked, hard or has peeled free. In addition, annually inspect the functionality of your downspouts during a fairly hard rain – check to see if the gutters are overflowing and note where the water runs.

In terms of the a/c unit, do not buy those 59 cent mesh filters with the flimsy cardboard frame. If you spend the extra money for the $5.00 pleated paper filter, your home will be cleaner, your a/c will work better, and you won’t be paying to have the a/c coil cleaned in 4 or 5 years. Change a/c filters once per quarter, not every month. Ensure you have the correct size- just because the old one in there is 16×20 does not mean that it is the right size. You may need a 16×25. Look inside the slot or furnace where the filter goes to determine the correct size.

Watch your garage door open and close from the inside. Check for loose hinges, as this is common. Does it go up crooked or jerky? The track may be loose, bent, or the springs may be misadjusted. Chain drive garage door openers often get loose and will cause jerking movements if left un-tightened.

In the bathroom, keep the shower curtain inside the tub and tight against the wall at the shower end of the tub. Over time, water escaping from the shower will pop the floor tile loose, rot the floor, and create mold in the ceiling below.

Reseal wood decks at least every 2 years. Wait a minimum of 4 days after preparatory pressure washing to give the wood sufficient time to dry before sealing. Double or triple coat the end grain of the lumber

When mowing the lawn, keep grass clippings away from the a/c unit. You should flush the a/c coils with a garden hose every spring. You should also perform annual Freon level checks. To do so, run the unit and see if the large diameter copper line going to it gets cold and forms condensation after 10 to 15 minutes. If it does not, it is likely low on Freon. Running an a/c unit on low Freon is the leading cause of compressor failure. It is equivalent to running a car with insufficient water in the radiator. If the unit is low on Freon, call an HVAC guy and get it topped off.

Test the T&P (safety) valve on the water heater annually to ensure it does not get stuck closed. If you are not sure what/where the T&P valve is; your home inspector can show you. I take the time to show all of this and more to my clients.

Kevin Barnaba

CABO (code) Certified Inspector

http://www.NorthernInspections.com

Over 3000 Inspections performed since 1996

What It Means to Be Able to Afford a Home

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Thu, 14 Apr 2011 02:17:04 -0700

The three basic factors affecting your ability to afford a home are 1) the price of the home, 2) how much cash will be required, and 3) the monthly mortgage payment on the loan. As you may suspect, the three are tied together so that when one factor changes, so do the other two. Each is limited by your personal and financial situation and influenced by conditions in the market. Nevertheless, it is possible, with a little research and homework to make estimates of these factors sufficient to give you a good indication of whether you can afford to purchase a home.

The first factor is the cost of a home that will meet your needs. You will need to outline your needs and research asking prices for similar houses that are on the market. Keep in mind average negotiating room as well as typical seller concessions toward closing costs. Such concessions in lieu of a lower price, may be helpful in fitting the financing to your situation.

The second factor is the amount of cash you can afford to invest in the purchase. Despite how good an investment the home purchase turns out to be, you will not be able to access the cash you invest until you sell the house. This is likely to be at least several years, or you probably would not be thinking of buying a home. This is not like putting cash into a bank account; it is more like putting it into a certificate of deposit with a hefty penalty for early withdrawal. Nevertheless, the more you invest in cash, the less your mortgage will cost.

The last part of the affordability picture is the mortgage loan. Lenders have a maximum amount they will lend on a home, based on its market value, or sales price if lower. In most cases, they require some type of mortgage insurance or guarantee to lend more than 80 percent of value on an owner-occupied home. This mortgage insurance is not unusual, it is, in fact, used by the majority of first-timers as well as by many upgraders. Insurance is offered by private companies (i.e., private mortgage insurance) and the federal government (i.e., FHA insurance). The federal Department of Veterans Affairs (VA) offers home-loan guarantees (VA loans) as a benefit to qualified military veterans. All these insurance programs have the effect of reducing the amount of cash down payment you need to finance the purchase.

The three factors are highly connected. If you cannot make the numbers fit, you must find a cheaper home or come up with more cash. For planning purposes, you can calculate the largest loan you think you can get and the highest down payment you think you can arrange. And that will determine the most expensive house you can afford. You might also figure another estimate based on the amounts you feel comfortable borrowing and investing. That will become your baseline number. From there, you can search for homes that fit in your price range.

Needs versus Wants

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Tue, 05 Apr 2011 23:59:23 -0700

Home buyers come in all shapes and sizes, all with distinct, diverse needs and wants. Homes are definitely not a one size fits all market. Let’s first, we’ll help you find your home needs.How much house do you really need? We will present information and questions. Your answers will help you feel confident that you have considered all of the important factors. You should use a work sheet to record your specific needs. This work sheet is not set in stone, as your information will vary with changes in your life. We recommend that you prioritize your needs using an ABC system. “A” would be a most important necessary need. Only a few need categories will have A’s. “B” would be important, but not essential, and “C” would be desirable. Ask yourself, “What are my basic needs?” This is the starting point for knowing how much house you really need. Ask yourself “How do I wish to live?” This is your lifestyle. Depending upon location requirements you may be able to afford a house with more than your basic needs. Adding your wants to your needs helps you to better distinguish between potential houses. Needs are those things you cannot do without as opposed to wants, which you’d love to have but may have to put on hold for now. This is particularly true for first time buyers. A house that meets both your needs and wants is the ultimate home, the golden ring on life’s carousel.

As we go through life; our needs and wants change. Regardless of the type and location of a house, there must be a required number of bedrooms, bathrooms and other rooms besides a kitchen and living room that will meet your basic needs. As your interest change so will your home priorities. The appeal of a log cabin in the woods can produce driving passions for some. Others will seek the white picket fence with a neatly packed Cape Cod-style home within walking distance of a small town.

How Important is Location?

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Sat, 02 Apr 2011 00:43:54 -0700

Location is important enough that you probably should decide on a neighborhood before you even look at a house. Like the house purchase, take some time to think about what is important to you about where you live, find the places you visit frequently – your job, the homes of your friends and relatives, stores, and recreational facilities –and decide how important it is to be close to each one.

Think about what makes an environment pleasant to you, for example, some people are rediscovering the old-fashioned pleasures of large trees and sidewalks, others like large yards that help to separate you from your neighbors. You may be able to get an idea of what type of families live in an area just by driving through at different times during the day. Some neighborhoods attract young couples with small children, couples with older children, professionals, or retired people. Real estate agents should be able to give you some information (be aware that they are prohibited by law from giving data or opinions on an area’s composition or trend in racial or ethnic makeup).

Look at how houses in the neighborhood are maintained to detect any signs that the area is declining. How many of the homes are offered for rent? Established neighborhoods usually enjoy a long period of vitality during which home owners invest in keeping their homes in good condition, mainly because they believe that the area has a future. When that faith is no longer wide-spread, homes are allowed to deteriorate at a greater rate. Such an area most likely is doomed to continue to decline.

Collecting Information about Your Potential New Home

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Tue, 29 Mar 2011 05:32:03 -0700

Prospective homebuyers need a lot of information about the neighborhood and city that may become their new home. The most important information is gathered through personal experience. My advice is to drive through the area, preferably at different times, on different days, to observe the day to day life of the area. On the weekend, observe the way most owners take care of their homes. Do they do the bare minimum, or take pride in their home’s appearance.

Another good idea is to observe traffic during rush hour. How long will it take you to get to work and run your shopping errands? Are there safe ways to walk around the neighborhood or for the children to go to school? Are there parks and other recreational areas close by? These things may or may not be important to you.

If you are moving to a different county, you will want to know the property taxes. Information in real estate listings may not be accurate. Often times the amount of taxes paid by the seller are adjusted for tax exceptions. Most counties will have a website where you can find out the tax information and other insight about the area. Such information most often is from general sources, such as the U.S. census, but may give you some useful decision-making help. A great source for school information is www.schoolmatch.com.

If you are working with a real estate agent, ask them to look up recent sales and current listings for homes in the neighborhood. Ask them to put together an analysis for you and should at least be willing to give you a sample of recent sales prices. If you are looking at a number of areas and want to do a little research on your own, you can access data on home values on several websites such as www.zillow.com, www.realestate.yahoo.com/Homevalues, and www.homegain.com. One nice feature of most of these sites is that you can see the values for surrounding homes and get an idea of how values are distributed through the community.

The Attraction of Owning a Home

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Sat, 26 Mar 2011 00:46:43 -0700

Besides the promise of the “American Dream” there are some very real advantages of owning a home. These provide perspective when making the decision to become or to remain a home owner. Let’s look at the list of most-often cited advantages:

PRIDE OF OWNERSHIP. Sure, you are proud of owning something so large, expensive, and vital as a house. But this aspect is more than a vanity. Pride of ownership means that you are accepting a bigger role in your community (i.e., not as a fly-by-night renter). You take responsibility for the appearance and upkeep of your property. Your home becomes an expression of your taste and values.

SELECTION. Although you can find single-family homes for rent, they may be in short supply in the neighborhoods where you want to live. For the most part, single-family rental homes are something of an oddity in the housing market. Most investors do not buy single-family homes to rent them out because they have to pay a higher price to outbid those who want to live in the home. When they are available, such homes often are available only temporarily, and not in the best locations and maybe not in the best condition. To get the type of home you want, you may need to buy rather than rent.

ABILITY TO REMODEL. Landlords are not always keen on their tenants’ making significant changes to the premises. Understandably, they do not know how long you will rent and may find it difficult to get another tenant in a home with all the rooms painted pink. One of the great things about owning a home is the ability to change it according to your own tastes (although there may be limits on what you can do to the exterior, even if you do own the home).

CONTROL. When you own, you not only have the right to remodel the home, but you have more control over your destiny (at least as far as where you live is concerned). You do not have to worry about needing to move when your lease expires. You don’t have restrictions attached to your ability to live in the home. As long as you make your mortgage payments and obey the law, you can enjoy your home indefinitely.

PREDICTABLE COSTS. When you buy, you lock in the main cost of the home at the purchase price. Depending on the loan you get, you may lock in the loan payments as well, although the total monthly payment increases if it includes a provision for taxes and insurance. There are no unexpected rent increases. Many home owners find that their monthly payments actually decrease as their income rises over the term of the loan.

INVESTMENT. The value of the home may increase over time, so that when you are ready to move, you are able to sell it for more than you paid. Though you have to repay the outstanding principal of the loan, you get to keep all of the gains from the increase value. If you borrowed money to buy the home, your rate of return on your initial investment is magnified. Even if the value of the home does not increase, you may have some gain because of the portion of your loan payments devoted to principal reduction.

TAXES. The federal income tax code provisions that give special advantages to home owners. Interest paid on a mortgage loan for a home you live in can be used as an itemized deduction against taxable income. Property taxes paid on the home are eligible as well. These deductions may help lower the cost of homeownership, though the benefit of all itemized deductions is tempered by the standard deduction available to all taxpayers. Local governments often provide homestead exemption discount on property taxes due on owner-occupied homes. The potentially most important break, however, is the fact that for most people, gains on resale of a residence are exempt from taxation if you live in the home for at least two years.

Home Insurance: Is it covered?

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Fri, 25 Mar 2011 02:34:13 -0700

So you’re buying your first house. Now is a great time to review home insurance policies and find answers to a few important questions: What losses are covered? When do I use it? How do I know if I’m overpaying?

Let’s start with the basics: Home insurance is designed to rebuild your home should it be damaged or destroyed. Many years ago insurance started out covering only fire losses, which is where you get the term ‘Fire insurance’. However, Fire insurance has expanded over time to be the much more comprehensive Home insurance. Named perils insured against for Home insurance are Fire/Lightning, Smoke, Wind/Hail, Falling Objects, Vehicles, Vandalism/Mischief and others (read your policy closely and consult your agent). Exclusions can include: Flood, Earthquake, War, Nuclear Hazard, Intentional Loss and others (read your policy closely and consult your agent). If you are concerned about flood or earthquake there are often coverages available to you.

Be Careful!! Some insurance companies are letting policyholders go because they are filing too many claims! If you think you may have a loss, call your personal agent first. He/she will be able to guide you to make sure the claim is covered and worth filing. A good practice is to only file a home insurance claim when you really need to. For many companies in GA, the underwriting looks just as bad/worse to have three $600 claims in 5 years as is does to have one for $20,000. Insurance companies know accidents happen, but when 3 or more claims happen in a short period of time, there is a pattern of loss and the insurance is going to cost that much more as a result.

To make sure you’re getting the best rates, call and speak to your personal agent. They are there to help you and work for you, not just collect your premium! If you’re not receiving good customer service or you feel your rate is too high, do not be scared to shop around. All companies look at basically the same information, but they all interpret it differently. You could save big just by making a few phone calls. And don’t forget to bundle the Auto, Life, and Umbrella policies. You can certainly get a better overall rate by having policies under the same roof.

Basics you need to know about a Home Inspection

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Thu, 24 Mar 2011 00:29:58 -0700

Home inspections are not all the same. A large historic home, for example, will require a different type of inspection than a condominium. However, the following is a list of basic items and systems that a home inspector will check. You can also use this list to help you size up potential costly problems in properties you might purchase.

Structure: A home’s support system impacts how the property stands up to weather, gravity, and the earth movement. Structural components inspected including the foundation and the framing.

Exterior: The inspector should look at sidewalks, driveways, steps, windows, and doors. A home’s siding, trim, and drainage also are part of an exterior inspection.

Roofing: A well-maintained roof protects you from rain, snow, and other elements. Its important to note of the age of the roof, conditions of flashing, roof draining systems (pooling water), damaged shingles, loose gutters and downspouts, roof vents, and chimneys.

Plumbing: Thoroughly examine the water supply and drainage systems, water heaters, and fuel storage systems. Drainage pumps and sump pumps also need to be examined. Poor water pressure, noisey pipes, rust spots, or corrosion can indicate potential problems.

Electrical: Safe electrical wiring is a necessity. Look for the condition of service entrance wires, service panels, breakers and fuses, and disconnects. Also take note of the number of outlets in each room.

Heating: The home’s heating system, ventalation system, flues, and chimneys should be inspected. Look for water heater leakage, whether the size is adequate for the house, speed of recovery, and energy rating.

Air Conditioning: Your inspector should explain your home cooling system, its energy source, and inspect the central and wall ventalation equipment. Consider the age and energy rating of the system.

Interiors: An inspection of the inside of the home can reveal plumbing leaks, insect damage, wood rot, mold, and other issues. An inspector should take a close look a the following:

• Walls, ceilings and floors

• Steps, stairways, and railings

• Countertops and cabinets

• Garage doors and garage door systems

Ventilation/insulation: To prevent energy loss and high power bills, an inspector should check for adequate insulation and ventilation in the attic and in unfinished areas such as crawlspaces. Also look for proper, insulation in walls. Insulation should be the appropriate type and R-value for the climate. Excess moisture in the home can lead to mold and water damage.

Fireplaces: They’re charming, but they could be a hazzard if not properly installed. Inspectors should examine the system, including the vent and flue, and describe any fuel burning appliances.

An excellent source for more details is the virtual home inspection at www.ASHI.org, the Web site of the American Society of Home Inspectors.

FHA Offers Low Down Payments For First-Timers

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Wed, 23 Mar 2011 00:20:52 -0700

Except for VA , and a handful of state-sponsored loan programs, 100% loans of the last decade are now gone. For first-time home buyers it is just one more obsticle to get over in the search for an affordable home loan.

Enter FHA (Federal Housing Administration), the government-backed loan program that has been around for years. For nearly a decade, an FHA mortgage was nearly non-existent, partly because of its own archaic lending guidelines and partly because of 100% conventional loans that FHA could not compete with.

Today, however, FHA home loans represent over 35% of all mortgages originated. Most of the loans are made to first-time home buyers since FHA does not have income restrictions and requires only a 3.5% downpayment.

Conventional mortgages require a minimum down payment of 5% or more. Add to that the closing costs which can equal 2% or more of the loan amount, and escrows that tack on another 1% or so and you have a financial barrier the majority of first-time home buyers are unable overcome. Of course you can get sellers to contribute to closing costs and escrows, but that still leaves a sizable down payment that buyers must have in order to purchase a home.

Lenders need authorization from FHA to make FHA home loans. Some lenders, like large banks, and other “Direct Lenders” are given greater lending authority which gives them more leeway than smaller lenders and mortgage brokers. There are, of course, other a full set of guidelines to follow with an FHA mortgage, but if a home loan with a low down payment is what is needed in order to buy a first home, an FHA home loan may be your best choice.

Title Insurance Protects Property Ownership

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Tue, 22 Mar 2011 04:55:24 -0700

Most real property buyers understand that a title search is necessary to be sure they can rely on the title received at their closing. However, there are some title problems which cannot be discovered even by the most thorough title search; these are hidden hazards which are beyond the scope of a reasonable search of the records, and include forgeries, fraud, errors by the recording clerk’s office in filng deeds, inchoate contractor’s and supplier’s liens, defective foreclosures, faulty surveys, misinterpreted wills, conveyances by a minor or a mentally incompetent person, an undiscovered heir or ex-spouse who returns to claim an interest, or a deed delivered after the property owner’s death, to name just a few.

A title insurance policy protects the insured up to the policy amount, which amount can escalate in certain types of policies, from loss which results from such title defects. A title policy does not guarantee that title problems will not occur, but it does protect one from loss resulting from covered title defects which threaten one’s ownership rights. It will also pay all legal fees involved in the defense of one’s rights as insured. Although title losses occur infrequently, when they do occur they can be very expensive if one is not insured.

Lenders recognize the value of title insurance protection and obtain a lender’s policy of title insurance when they make loans which are secured by real property. A lender’s policy provides protection only to the lender for the loan amount, and provides no protection for the owner’s equity; in fact, in the event of a claim, the title insurer which is not also providing owner’s coverage to the owner for her equity can be subrogated to the rights of the lender upon paying that lender’s losses and can enforce payment of the loan obligation evidenced by the promissory note it acquires from that lender to recoup its losses. On the other hand, an owner’s title policy not only protects the property owner’s equity, it also creates a duty to the insured owner which negates the possibility of lender subrogation. The owner’s equity would be the difference between the owner’s policy amount, corresponding to the price or value of the property when the policy is issued (as escalated if applicable), and any liens or encumbrances on the property which are either specifically excepted in the policy, such as the owner’s purchase money mortgage(s), or which are created after the effective date of the policy, and so are not covered by it. Title insurance protects against title defects in the past, before the new owner takes title, not defects in the future, when the title is under the owner’s control, and in this respect it is unlike most casualty insurance, which covers future perils.

The cost of an owner’s policy is minimal when obtained at the same time as the lender’s policy, because the title insurance company gives a “simultaneous issue rate,” reflecting the fact that providing two policies, although requiring more work and involving additional exposure, is less trouble because the same property is involved in each. Owner’s title insurance is purchased through a one-time premium payment, and will even protect the named insured after he sells the property, based on liability by reason of warranties in any transfer or conveyance of the title to a third party.

Decide on Your Moving Method

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Tue, 22 Mar 2011 04:47:26 -0700

Decide on Your Moving Method

There are now several different ways to move—from moving yourself, asking friends to help to renting a truck or using container-based moving, to full service professional movers. As the decision impacts your moving costs and time commitment, it helps to look at the various options:

Moving Yourself

The most economical way to move is to do-it-yourself. Sounds simple enough, just load up your stuff and go. This can be a good choice if you’re not going far, don’t have a lot of things to haul and have a strong back. Some things to consider before you decide to handle your own move. Do I have time to pack, load, unload and drive? How many heavy items, like furniture and appliances, do I have to move? Am I physically capable to do this hard work? Do I have friends and family that can help me?

Renting a Truck

If you’re moving your one-bedroom apartment across town or across state, you might find that it is much better to rent a truck than to use your own vehicle. Shop around for truck rates, and don’t rent more truck than you need. Rental companies have charts that help you calculate what’s needed to haul your belongings. Companies like U-Haul and Ryder make it easier with step-by-step moving and packing guidance.

Container Based Moving and Storage

Another great option is container based moving and storage. The company brings an empty storage container to your home and you can take your time packing and loading it. A few advantages are:

* Height – The container is level to the ground and easier to pack than a truck

* Convenience — When you are ready, you simply call them and they pick it up and take it to one of their storage centers or to your new home.

* Flexibility – You can move across town or across the country or have the items stored in their warehouse.

Professional Movers

There are several reasons to choose a professional moving company. They can:

* Save you time

* Save you effort

* Greatly reduce your stress level

* Protect your belongings!

This is particularly true if you are moving a 3-bedroom house across the country. Most people underestimate how much work it is to move a large house….and how physically demanding it is! Remember that you’ll get insurance to cover your belongings. Just verify the amount to ensure all your valuables are covered.

When hiring professional movers, it is important that you choose a reliable company. Ask for references and check them carefully!

When choosing your moving company, be sure you understand:

* The rates and charges that will apply.

* The mover’s liability for your belongings.

* How pickup and delivery will work.

* What claims protection you have.

Homeowners still get Substantial Tax Breaks

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Tue, 22 Mar 2011 04:22:43 -0700

Tax Day is just over a month away. Below is a list of the three major homeowner tax deductions for 2010. Mortgage Interest – This is by far the largest tax incentive for homeowners and for most people the largest deduction on the entire tax return.

Real Estate Taxes – The taxes paid on a personal residence and property are another major deduction for homeowners. The amount varies greatly depending on the county you reside, but is typically 1.0 to 2.0% of the value of the home.

Mortgage Insurance – Mortgage insurance paid in 2010 can be tax deductible. However, only mortgage insurance contracts issued from 2007 to present are eligible.

There are also income restrictions that can decrease the deductibility. By the end of January, you should receive a Form 1098, which will show the total amounts of mortgage-related tax-deductible expenses you paid in 2010. According to the IRS, you must itemize these deductions on Schedule A of Form 1040. Additionally, certain eligibility restrictions, such as income limits, may apply. Be sure to consult your tax advisor.

Free Webinar on "Video Marketing" Nothing to buy, Nothing being sold...

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Wed, 16 Mar 2011 01:20:08 -0700

Class 2 of our Marketing Explosion Series:

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Thursday, March 17th, 9:00 AM EDT

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- How to Record Videos and What to Use
- Must-Haves for ALL Videos
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There is nothing to buy, nothing being sold

...just some good information.

I spent $2000 for the series, but I am sharing it with my referral partners for Free!!

Unfortunately, I only have bandwidth for about 100 people, so please sign-up early

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Should I use a real estate agent to Buy my First House

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Sun, 06 Mar 2011 02:52:21 -0800

In a word YES! It’s good advice for any home buyer to use a qualified Realtor, but this is especially true for first-time home buying. A real estate agent can assist a buyer get appointments to see houses, negotiate with sellers, negotiate offers, and recommend a good inspector.

It is best to find a Realtor who lives in teh area. Locally-based agents will be able to give more valuable insights on the town including practical information about area shopping and restaurants, public schools, neighborhood atmosphere, and other community offerings.

My advice is to hire an experienced Realtor through trusted recommendations. If you are looking to move within your own town, you can ask neighbors and friends for names of the Realtor they used, as well as a brief list of what they liked about working with him or her. Keep in mind that even though email is convenient, I would suggest a call or visit the Realtor in person for a brief consultation.

Spending just a few minutes with the agent can reveal a lot about how the home buying experience will be. Buyers should note how the Realtor makes them feel and whether the agent really seems to understand Their needs and wants… first impressions are generally pretty accurate.

Q&A on Homeowners’ Insurance Snow Coverage

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Sun, 06 Mar 2011 01:41:50 -0800

In the aftermath of January and February snowstorms, homeowners are urged to check their homeowners’ and vehicle insurance policies to be sure they are protected against property damage caused by the harsh weather. These questions are a good placve to start:

Q: What kind of storm damage is covered on the outside of your house?

A: Regular homeowners’ policies include protection for wind, snow and rain damage to the outside of a home, as well as damage caused by a structure’s collapse because of the accumulation of snow.

Q: If ice buildup on my roof caused a leak that got into my ceiling on the inside of my house. Am I covered?

A: Interior water damage to a home is usually NOT covered unless the exterior of the home is damaged from a covered accident. However, if interior water damage occurs as a result of missing shingles, that would be covered.

Q: Would damage caused by freezing pipes be covered?

A: Some policies cover damage from frozen pipes, as long as the damage is not a result of the homeowner’s failure to keep the home adequately heated. So keep those pipes insulated and water dripping on deep freeze nights.

Q: Is there a standard type coverage for home and auto insurancpolicies when it comes to winter storm coverages?

A: Homeowners’ and auto policies provide basic protection, but some policies provide a broader range of coverages than others. Read your carefully.

FHA set to Increase Mortgage Insurance Premiums

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Sun, 06 Mar 2011 01:34:20 -0800

Starting April 18, 2011, the Federal Housing Administration (FHA) mortgage insurance premium will be increased on all 30 year and 15 year loans. The amount of the increase is a quarter of a percentage point (.25) which is typically financed into the loan. This will in turn be an average increase to new borrowers of about $32 per month.

FHA says the increase is needed to maintain the stability of the Mutual Mortgage Insurance Fund (MMIF). It is estimated that this increase will generate around $3 billion annually to the MMIF. The additional expense may have borrowers looking to obtain mortgages in the private sector.

FHA loans will cost a borrower almost twice as much for mortgage insurance on a 30 year loan as compared to a non-FHA mortgage. If you are looking to buy a home with an FHA mortgage, now is the time to apply before the increase. There are plenty of great deals on homes in the market today and with rates so low, now is the perfect time to jump in.

National Association of Realtors January Numbers

Stephen Katz (Katz Mortgage Team, a branch of VanDyk Mortgage Corporation) — Sun, 06 Mar 2011 01:28:39 -0800

Existing home sales moved up for a third month in a row in January as sales of bank-owned properties, investor purchases, and all-cash transactions increased from December, according to the National Association of Realtors.

Sales of existing single-family homes, town-homes, condos and co-ops were up 2.7 percent from December, to a seasonally adjusted annual rate of 5.36 million properties, NAR said.

That’s up 5.3 percent from last year — the first year-over-year increase in sales since last spring, when sales were pushed up by the national homebuyer tax credit.

At $158,800, the country’s median price for all housing types was down 3.7 percent from last year, with distressed homes accounting for 37 percent of all sales. The median price of a single-family home was down 2.7 percent, to $159,400.

For detailed Statistical information, check out this link

http://www.firsthomefirstloan.com/national-association-of-realtors-january-numbers/