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Thursday, March 12, 2015

Mortgage Rate Fluctuations Have Big Impact! www.TheCaliforniaPropertyConnection.biz


DAILY REAL ESTATE NEWS | THURSDAY, MARCH 12, 2015

Even the slightest movement in mortgage rates can translate into more – or less – purchasing power for your clients.
John Burns Real Estate Consulting recently looked at how the fluctuation in rates effects the average consumer. The firm found that a typical family earning $60,000 a year could afford around $1,800 month for the mortgage payment.
In 2000, a 30-year fixed-rate loan, which averaged an 8 percent mortgage rate, would have qualified that family for a $245,000 loan.
But at a 4 percent mortgage rate – which current rates are averaging – that same family can qualify for a $377,000 loan.
"In other words, each 1 percent drop in interest rates in the last 15 years has allowed home sellers to raise the price 12 percent," according to Jon Burns Real Estate Consulting’s analysis.
Source: "How Tiny Mortgage Rate Moves Can Buy You a Lot," CNBC (March 10, 2015)


An Expert In Your Court
Robert De La Rosa
"CALL NOW 909.271.5640"
"Get Qualified Now By A Loan Professional" 

Coldwell Banker Town & Country
501 W Redlands Blvd
Redlands CA, 92373
CalBre 01435824

Wednesday, March 4, 2015

www.TheCaliforniaPropertyConnection.biz


4 Tips to Determine How Much Mortgage You Can Afford


By knowing how much mortgage you can handle, you can ensure that homeownership will fit in your budget.
Homeownership should make you feel safe and secure, and that includes financially. Be sure you can afford your home by calculating how much of a mortgage you can safely fit into your budget.

Why not just take out the biggest mortgage a lender says you can have? Because your lender bases that number on a formula that doesn’t consider your current and future financial and personal goals.

Think ahead to major life events and consider how those might influence your budget. Do you want to return to school for an advanced degree? Will a new child add day care to your monthly expenses? Does a relative plan to eventually live with you and contribute to the mortgage?

Consider those lifestyle issues as you check out these four methods for estimating the amount of mortgage you can afford.

1.  Prepare a detailed budget.

The oldest rule of thumb says you can typically afford a home priced two to three times your gross income. So, if you earn $100,000, you can typically afford a home between $200,000 and $300,000.

But that’s not the best method because it doesn’t take into account your monthly expenses and debts. Those costs greatly influence how much you can afford. Let’s say you earn $100,000 a year but have $1,000 in monthly payments for student debt, car loans, and credit card minimum payments. You don’t have as much money to pay your mortgage as someone earning the same income with no debts.

Better option: Prepare a family budget that tallies your ongoing monthly bills for everything -- credit cards, car and student loans, lunch at work, day care, date night, vacations, and savings.

See what’s left over to spend on homeownership costs, like your mortgage, property taxes, insurance, maintenance, utilities, and community association fees, if applicable.

2.  Factor in your downpayment.

How much money do you have for a downpayment? The higher your downpayment, the lower your monthly payments will be. If you put down at least 20% of the home's cost, you may not have to get private mortgage insurance, which protects the lender if you default and costs hundreds each month. That leaves more money for your mortgage payment.

The lower your downpayment, the higher the loan amount you’ll need to qualify for and the higher your monthly mortgage payment.

But, if interest rates and/or home prices are rising and you wait to buy until you accumulate a bigger downpayment, you may end up paying more for your home.

3.  Consider your overall debt.

Lenders generally follow the 43% rule. Your monthly mortgage payments covering your home loan principal, interest, taxes and insurance, plus all your other bills, like car loans, utilities, and credit cards, shouldn’t exceed 43% of your gross annual income.

Here’s an example of how the 43% calculation works for a homebuyer making $100,000 a year before taxes:

1.    Your gross annual income is $100,000.

2.    Multiply $100,000 by 43% to get $43,000 in annual income.

3.    Divide $43,000 by 12 months to convert the annual 43% limit into a monthly upper limit of $3,583.

4.    All your monthly bills including your potential mortgage can’t go above $3,583 per month.

You might find a lender willing to give you a mortgage with a payment that goes above the 43% line, but consider carefully before you take it. Evidence from studies of mortgage loans suggest that borrowers who go over the limit are more likely to run into trouble making monthly payments, the Consumer Financial Protection Bureau warns.

4.  Use your rent as a mortgage guide.

The tax benefits of homeownership generally allow you to afford a mortgage payment -- including taxes and insurance -- of about one-third more than your current rent payment without changing your lifestyle. So you can multiply your current rent by 1.33 to arrive at a rough estimate of a mortgage payment.

Here’s an example: If you currently pay $1,500 per month in rent, you should be able to comfortably afford a $2,000 monthly mortgage payment after factoring in the tax benefits of homeownership.

However, if you’re struggling to keep up with your rent, buy a home that will give you the same payment rather than going up to a higher monthly payment. You’ll have additional costs for homeownership that your landlord now covers, like property taxes and repairs. If there’s no room in your budget for those extras, you could become financially stressed.

Also consider whether or not you’ll itemize your deductions. If you take the standard deduction, you can’t also deduct mortgage interest payments. Talking to a tax adviser, or using a tax software program to do a “what if” tax return, can help you see your tax situation more clearly.



An Expert In Your Court
Robert De La Rosa
"CALL NOW 909.271.5640"
"Get Qualified Now By A Loan Professional" 

Coldwell Banker Town & Country
501 W Redlands Blvd
Redlands CA, 92373
CalBre 01435824

Tuesday, March 3, 2015

How Long is That Remodel Going to Take? www.TheCaliforniaPropertyConnection.biz


How Long is That Remodel Going to Take?

Some remodeling projects go on for weeks and make a mess of your home life. Here’s what you need to know to survive.
Renovations can take weeks -- and sometimes months. That means endless days of subcontractors traipsing through your home, noisy tools, and major dust. Even some minor projects can disrupt your daily routine. Before you begin to remodel, know what’s in store for you and your family.
We’ve highlighted nine common remodeling projects that homeowners are likely to undertake -- projects that require professional contractors and that take at least one week to complete.

We also talked with veteran remodeler Paul Sullivan, who has renovated homes for 34 years and is president of The Sullivan Company in Newton, Mass.

Sullivan helped us rate each project on a “disruption scale” of 1 to 10, with 1 being the least disruptive to your everyday home life and 10 the most. If your project reaches a 10, consider getting a hotel room for the duration.

Attic Bedroom Conversion

National average cost: $51,696

Time: 8 to 10 weeks

What’s involved: A project that converts unconditioned attic space into a bedroom must include egress windows and at least one closet. Most likely, you’ll extend plumbing, HVAC ducts, and electrical wiring to the attic, and add insulation, drywall, and flooring.

Disruption scale: 3  Luckily, most of the work is in the attic and doesn’t involve your main living areas. You’ll have to put up with contractors moving through the house to get to the top, so provide drop cloths or old rugs to protect your floors. Also, plaster dust from drywall installation and finishing likely will float throughout your home, so you’ll want to change furnace filters every two to three weeks during the project.

Related: Install an Attic Dormer Window
Refinishing Hardwood Floors

National average cost: $1.50 to $4 per square foot

Time: 2 to 14 days

What’s involved: Sanding, staining, and sealing wood floors.

Disruption scale: 9  Whether you’re refinishing one floor or an entire house, the process involves a world of hurt. You have to move furniture and cover surfaces to protect from wood dust, which disrupts the flow of family life. And if you use oil-based sealants, you’ll have to live somewhere else to avoid breathing VOC fumes. Plus, you won’t be able to walk on floors for at least two days after the last coat of sealant is applied.

Related: Should You Refinish Hardwood Floors Yourself?

Bathroom Remodel

National average cost: $16,724

Time: 2 to 3 weeks

What’s involved: Turning your outdated bathroom into a dream spa includes updating plumbing fixtures, installing ceramic tile around a porcelain-on-steel tub, replacing an old toilet with a low-flow, comfort-height model, and installing ceramic floor tiles and solid-surface vanity counters.

Disruption scale: 7 to 10  If you’re remodeling your only bathroom, expect major disruption of your personal hygiene routine. You’ll have to wash in the kitchen sink, and install a portable potty in the yard or make friends with a neighbor when nature calls. You’ll have less pain if you have more than one bathroom in the house. Even then, you’ll suffer water outages during plumbing updates. And if you’re remodeling a master bath, you must put up with workman tromping through your bedroom.

Related: 7 Smart Strategies for Bathroom Remodeling

Major Kitchen Remodel

National average cost: $56,768

Time: 8 to 12 weeks

What’s involved: Replacing cabinets, installing a kitchen island and countertops, replacing appliances, adding lighting, and changing flooring.

Disruption scale: 8  Kitchens are the heart of the home, so when they’re down, you’ll eat out more, wash coffee cups in bathroom sinks, and hold family meetings in the family room where your microwave and fridge now live. To ease the disruption, your contractor can easily set up a construction sink somewhere by running a couple of hoses from existing kitchen plumbing through the dust wall to a make-shift kitchen in an adjacent room.

Related: 6 Green Kitchen Remodeling Tips

Minor Kitchen Remodel

National average cost: $19,226

Time: 1 to 2 weeks

What’s involved: Replacing cabinet box fronts, adding new hardware, updating appliances, sinks, and faucets, and installing new flooring.

Disruption scale: 5  Kitchen facelifts are less disruptive merely because they’re finished faster than major remodels. You’re mainly pulling and replacing, so plumbing and electrical can stay put, and you’ll still have access to your fridge until the new one arrives.

Related: 10 Tips for a Low-Cost Kitchen Facelift

Basement Remodel

National average cost: $62,834

Time: 4 to 6 weeks

What’s involved: Finishing the lower level of a house to create an entertaining area, wet bar, bathroom, and egress windows required by code.

Disruption scale: 2  Seems counter-intuitive, because turning unfinished space into extra living space requires all the finishes of a new addition -- plumbing, electrical, flooring, walling, and insulation. But the good news: Work is confined to a part of the house you rarely use. Contractors can enter and exit through the basement door (if you have one), and noise and dust are easily confined. The biggest disruptions come from periodic electrical and plumbing outages.

Related: Add an Egress Window to Your Finished Basement
Roof Replacement (Asphalt Shingles)

National average cost: $19,528

Time: 1 week

What’s involved: Removing and replacing roofing moisture barriers, flashing, and shingles.

Disruption scale: 1  Replacing your roof is one of the least inconvenient remodeling projects you can do. You’ll have to put up with some banging, move your cars away from the house, and keep dogs and kids out of the yard during the demolish phase. Roofers will cover the ground around the job to corral debris; and after the job, they’ll go over your yard with a magnetic roller to pick up stray nails.

Related: Hurricanes: Protect Your Roof

Siding Replacement (Vinyl)

National average cost: $12,013

Time: 1 to 2 weeks

What’s involved: Removing and replacing old vinyl siding with new vinyl siding.

Disruption scale: 3  You’ll endure lots of banging around your house as the new siding goes up. If noise bothers you, stick in your earbuds and listen to something soothing. Even though contractors will cover the area around the house, expect some debris to litter the yard. Keep curious kids and pets inside while work is being done to avoid accidents.

Related: Siding: A Guide to the Options
Two-Story Addition

National average cost: $161,925

Time: 16 to 20 weeks

What’s involved: Framing, adding utilities, and finishing a 24-foot-by-16-foot wing including a family room and second-floor bedroom and bathroom.

Disruption scale: 4  Building an addition is like constructing an entire house attached to your house. But oddly, it’s life as usual until the very end, when you break through the wall that connects the two structures. Expect a lot of noise and trucks in your driveway throughout the project. The last one to two weeks, when you connect the structures, you’ll have to put up with some commotion -- demolition, carpentry, drywall installation, and painting. Figure you’ll have a major cleanup job throughout the house when the construction is over.

Related: Hidden Costs of a Two-Story Addition



An Expert In Your Court
Robert De La Rosa
"CALL NOW 909.271.5640"
"Get Qualified Now By A Loan Professional" 

Coldwell Banker Town & Country
501 W Redlands Blvd
Redlands CA, 92373
CalBre 01435824

Monday, March 2, 2015

REALTORS® More Confident for the Spring!


DAILY REAL ESTATE NEWS | MONDAY, MARCH 02, 2015

REALTORS® are more optimistic as they head into the spring-selling season, with their housing outlook for the next six months looking more upbeat, according to the January 2015 REALTORS® Confidence Index, a survey of more than 4,000 REALTORS® on the latest housing conditions in their local markets. REALTORS® citied the effect of mortgage rates -- that have been less than 4 percent lately -- and a reduction in Federal Housing Administration mortgage insurance premiums as two big reasons for renewed optimism. 
Spring Housing Optimism
Some markets, however, did show a slight dip in confidence in January. Real estate professionals in Massachusetts, Pennsylvania said the harsh weather was causing market slowdowns. Also, states with more oil and gas extraction activity, like in Texas, reported growing concerns about the impact that the steep drop in oil prices would have on their market. In coastal areas – like Florida and New Jersey – some real estate professionals expressed continued concern over uncertainty regarding flood insurance rates that were affecting sales.
Still, overall, REALTORS® nationwide are reporting greater buyer activity in their markets, but said that there was not enough inventory of homes for-sale to meet the increase in demand. Inventory was reported as "low" in most areas, particularly for "affordable" listings. Also, a low level of new home construction, they say, was contributing to the lack of inventory.
The biggest obstacles facing the market, according to REALTORS® surveyed: qualifying for a mortgage (although that has been showing signs of improvement); modest income growth among home buyers; weak credit and income profiles; and for condo buyers in facing persistent problems with projects not meeting eligibility guidelines for FHA or VA or conventional financing.
About 47 percent of REALTORS® surveyed reported that the price of their "average home transaction" was higher in January compared to a year ago. The median home price of an existing home as of December 2014 was $209,500, up from $197,700 in December 2013.
REALTORS® continue to expect home prices to pick up modestly over the next year, with the median appreciation expected about 3.2 percent this year. States with the most upbeat price expectations include the District of Columbia, Florida, and Nevada, where real estate professionals there expect home prices to increase about 4 to 5 percent this year.
Source: “REALTORS® Confidence Index” (January 2015) and “REALTORS® Confidence Index Survey: January 2015 Survey Highlights,” National Association of REALTORS® Economists’ Outlook Blog (Feb. 24, 2015)


"Get Qualified Now By A Loan Professional" 
An Expert In Your Court
Robert De La Rosa
"CALL NOW 909.271.5640"

Coldwell Banker Town & Country
501 W Redlands Blvd
Redlands CA, 92373
CalBre 01435824

Thursday, February 26, 2015

New-Home Sales Stay Resilient!

DAILY REAL ESTATE NEWS | THURSDAY, FEBRUARY 26, 2015

Sales of newly built, single-family homes barely budged in January, staying near an elevated December sales reading, according to the latest report from the U.S. Department of Housing and Urban Development and U.S. Census Bureau. For the past two months, new-home sales have been trending at post-recession highs.
Inside the New-Home Market
"The fact that January sales numbers maintained the gains we made in December is encouraging news, especially consideringharsh weather affecting certain parts of the country,"  said Tom Woods, chairman of the National Association of Home Builders.
New-home, single-family sales dropped 0.2 percent in January, reaching a seasonally adjusted annual rate of 481,000 units. Inventories of new homes for sale were at a 5.4-month supply at the current sales pace in January.
Regionally, new-home sales rose by the largest amounts in the Midwest in January, increasing 19.2 percent in January. New-home sales also rose in the South, by 2.2 percent.
However, new-home sales plummeted in the Northeast, falling 51.6 percent in January, and largely attributed to harsh weather conditions this winter. New-home sales also fell 0.8 percent in the West.


"Get Qualified Now By A Loan Professional" 

An Expert In Your Court
Robert De La Rosa

"CALL NOW 909.271.5640"

Coldwell Banker Town & Country
501 W Redlands Blvd
Redlands CA, 92373
CalBre 01435824


How to Assess the Real Cost of a Fixer-Upper House

When you buy a fixer-upper house, you can save a ton of money, or get yourself in a financial fix.
Trying to decide whether to buy a fixer-upper house? Follow these seven steps, and you’ll know how much you can afford, how much to offer, and whether a fixer-upper house is right for you.

1.  Decide what you can do yourself.

TV remodeling shows make home improvement work look like a snap. In the real world, attempting a difficult remodeling job that you don’t know how to do will take longer than you think and can lead to less-than-professional results that won’t increase the value of your fixer-upper house. 
  • Do you really have the skills to do it? Some tasks, like stripping wallpaper and painting, are relatively easy. Others, like electrical work, can be dangerous when done by amateurs.
  • Do you really have the time and desire to do it? Can you take time off work to renovate your fixer-upper house? If not, will you be stressed out by living in a work zone for months while you complete projects on the weekends?

2.  Price the cost of repairs and remodeling before you make an offer.

  • Get your contractor into the house to do a walk-through, so he can give you a written cost estimate on the tasks he’s going to do.
  • If you’re doing the work yourself, price the supplies.
  • Either way, tack on 10% to 20% to cover unforeseen problems that often arise with a fixer-upper house.

3.  Check permit costs.

  • Ask local officials if the work you’re going to do requires a permit and how much that permit costs. Doing work without a permit may save money, but it'll cause problems when you resell your home.
  • Decide if you want to get the permits yourself or have the contractor arrange for them. Getting permits can be time-consuming and frustrating. Inspectors may force you to do additional work, or change the way you want to do a project, before they give you the permit.
  • Factor the time and aggravation of permits into your plans.

4.  Doublecheck pricing on structural work.

If your fixer-upper home needs major structural work, hire a structural engineer for $500 to $700 to inspect the home before you put in an offer so you can be confident you’ve uncovered and conservatively budgeted for the full extent of the problems.

Get written estimates for repairs before you commit to buying a home with structural issues.

Don't purchase a home that needs major structural work unless:
  • You’re getting it at a steep discount
  • You’re sure you’ve uncovered the extent of the problem
  • You know the problem can be fixed
  • You have a binding written estimate for the repairs

5.  Check the cost of financing.

Be sure you have enough money for a downpayment, closing costs, and repairs without draining your savings.

If you’re planning to fund the repairs with a home equity or home improvement loan:
  • Get yourself pre-approved for both loans before you make an offer.
  • Make the deal contingent on getting both the purchase money loan and the renovation money loan, so you’re not forced to close the sale when you have no loan to fix the house.
  • Consider the Federal Housing Administration’s Section 203(k) program, which is designed to help home owners who are purchasing or refinancing a home that needs rehabilitation. The program wraps the purchase/refinance and rehabilitation costs into a single mortgage. To qualify for the loan, the total value of the property must fall within the FHA mortgage limit for your area, as with other FHA loans. A streamlined 203(k) program provides an additional amount for rehabilitation, up to $35,000, on top of an existing mortgage. It’s a simpler process than obtaining the standard 203(k).

6.  Calculate your fair purchase offer.

Take the fair market value of the property (what it would be worth if it were in good condition and remodeled to current tastes) and subtract the upgrade and repair costs.
For example: Your target fixer-upper house has a 1960s kitchen, metallic wallpaper, shag carpet, and high levels of radon in the basement.

Your comparison house, in the same subdivision, sold last month for $200,000. That house had a newer kitchen, no wallpaper, was recently recarpeted, and has a radon mitigation system in its basement.
The cost to remodel the kitchen, remove the wallpaper, carpet the house, and put in a radon mitigation system is $40,000. Your bid for the house should be $160,000.
Ask your real estate agent if it’s a good idea to share your cost estimates with the sellers, to prove your offer is fair. 

7.  Include inspection contingencies in your offer.

Don’t rely on your friends or your contractor to eyeball your fixer-upper house. Hire pros to do common inspections like:
  • Home inspection. This is key in a fixer-upper assessment. The home inspector will uncover hidden issues in need of replacement or repair. You may know you want to replace those 1970s kitchen cabinets, but the home inspector has a meter that will detect the water leak behind them.
  • Radon, mold, lead-based paint
  • Septic and well
  • Pest
Most home inspection contingencies let you go back to the sellers and ask them to do the repairs, or give you cash at closing to pay for the repairs. The seller can also opt to simply back out of the deal, as can you, if the inspection turns up something you don’t want to deal with.

If that happens, this isn’t the right fixer-upper house for you. Go back to the top of this list and start again.

More from HouseLogic

What you need to know about foundation repairs

Budgeting for a home remodel

Tips on hiring a contractor
G.M. Filisko is an attorney and award-winning writer whose parents bought and renovated a fixer-upper when she was a teen. A regular contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.


"Get Qualified Now By A Loan Professional" 

An Expert In Your Court
Robert De La Rosa
"CALL NOW 909.271.5640"

Coldwell Banker Town & Country
501 W Redlands Blvd
Redlands CA, 92373
CalBre 01435824