Yes! Most of the publicity has been directed to the checks the citizens will get, but the real estate industry is excited about a different component of the package. The House plan calls for an increase in Fannie Mae and FHA loan limits from $417,000 to $729,750, or 125% of the area’s median home value. That should translate to about $700,000 for FHA in our area and $625,000 for Fannie Mae loans. The FHA down payment guidelines will be unchanged.
Loans above the maximum, Jumbo loans, are considered non-conforming resulting in higher interest rates and more qualifying difficulties – all of this maximized after the lending debacle commenced. Jumbo interest rates are from 1-1.75% higher than conforming loans. When you combine a savings of 1.5% for the change to a conforming loan status, and the wonderful rate drops of last week, a Borrower can now save $812 a month on a $500,000 loan! It will probably be April before the ESP changes will take effect, but knowing they are coming can help you plan your real estate course of action. Whether buying or refinancing, this is big news.
Not directly related to the ESP, but certainly a sign of the times, are the recent interest rate drops. We saw a 30 year fixed rate loan drop from 6%, good, to 5%, great, in one week – last week. If you’ve been on the fence about taking action in this market you really should look at this low cost money. You can try to time the market drop to save a few thousand, or you can capitalize on the loan incentives lenders are offering and save money during the entire course of your property ownership … while you watch the market recover and enjoy the anticipated appreciation.
Our Advice: With the good loan rates now great, and prices at a point that we doubted we’d see again, it is an ideal time to buy. It is wise to watch the market, but don’t get caught trying to time the drop so long that you become part of the bounce when it turns. Real estate is a long term investment. If you are buying for your residence you not only get the opportunity to make an investment … you get to enjoy it daily. Buy what you want now and get on with your life. We are actually seeing a considerable increase in market activity that will affect the inventory as well as Seller’s attitudes and motivation. The time has come … ask your agent to explain why.
Push Play and get your life off Pause. You control your real estate destiny … take the responsibility and time to get a true assessment of today’s market and how it affects you and your specific circumstances. It will take time to really get it, but it is time well invested.
Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com or www.carsonvalleyremax.com , or email us at carsonvalleyland@hotmail.com 775-781-5472.
Thursday, January 31, 2008
Friday, January 25, 2008
More Short Sale Buzz!
We Still Keep Hearing About Short Sales … Are They Real and Why Should We Do It?
Short sales are very real but they have become as confusing as the market itself. There are several aspects to a short sale when you are considering one. The first is to make sure you qualify, i.e.- you owe more than the property is worth (call your agent for a current value – things are changing quickly), have limited other assets, inability to pay, don’t own other real estate, etc., in other words … you have a genuine need for debt relief. Once you’ve determined that (not hard if you are truly qualified!) the next step is to consider options – short sale vs. foreclosure vs. bankruptcy. Each has it merits depending on your circumstances.
Bankruptcy is usually the least desirable. It can extend the time you can live in the home but has many extended adverse impacts on you, your credit, and your mind. Foreclosure is the likely option, inevitable in some cases, if you can’t or won’t put together a short sale. So what is the difference to you? 1. A short sale will typically last 3-4 years on your credit report. A foreclosure will be there 7 years. 2. With a short sale your credit is not as severely impacted. A foreclosure can reduce your FICO score up to 400 points. A short sale will impact it 50-180 depending on how it is reported. 3. A short sale is a more dignified solution. You sell your home to another person just like your neighbors do. A foreclosure often results in the home being vacant for months, signs promoting the bank ownership of the property, dead landscaping, etc. 4. It is usually easier to rent a home to move to with a short sale than after a foreclosure. Most landlords check credit on tenant applicants these days.
There is now tax relief due to a law passed last year and signed by President Bush in late December. It does not help every individual that gets mortgage relief, but it will help many. Regardless of the tax relief you get, or don’t get, it is generally better to control your own destiny and work to effect a short sale, or settled agreement with your lender.
Our Advice: The foreclosure option requires no action …don’t make your payment…wait until the date of the sale…and move out. The short sale requires marketing your property, providing the bank with proper documentation of your need including a hardship letter, financial statement, pay stubs, tax returns, bank statements, etc. - work on your part, often unpleasant because of your present financial circumstances, but it is usually worth it for the long term positive effect on you. Additionally, helping the lender out of their investment problem instead of forcing a foreclosure is something you can do to help the institution that committed to help you when you wanted help … when you wanted to buy your house. Make every effort to implement a short sale … you will be happier in the shorter-long run.
A short sale involves a lot of work by your agents, it also requires them to have specific knowledge of how to navigate the inevitable maze the corporate lender makes agents run through. If you are having difficulties making your payment call your agent immediately to explore your options. Waiting won’t solve the problem.
Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com or www.carsonvalleyremax.com , email us at carsonvalleyland@hotmail.com 775-781-5472 toll free at 800-814-8799 ext. # 254.
Short sales are very real but they have become as confusing as the market itself. There are several aspects to a short sale when you are considering one. The first is to make sure you qualify, i.e.- you owe more than the property is worth (call your agent for a current value – things are changing quickly), have limited other assets, inability to pay, don’t own other real estate, etc., in other words … you have a genuine need for debt relief. Once you’ve determined that (not hard if you are truly qualified!) the next step is to consider options – short sale vs. foreclosure vs. bankruptcy. Each has it merits depending on your circumstances.
Bankruptcy is usually the least desirable. It can extend the time you can live in the home but has many extended adverse impacts on you, your credit, and your mind. Foreclosure is the likely option, inevitable in some cases, if you can’t or won’t put together a short sale. So what is the difference to you? 1. A short sale will typically last 3-4 years on your credit report. A foreclosure will be there 7 years. 2. With a short sale your credit is not as severely impacted. A foreclosure can reduce your FICO score up to 400 points. A short sale will impact it 50-180 depending on how it is reported. 3. A short sale is a more dignified solution. You sell your home to another person just like your neighbors do. A foreclosure often results in the home being vacant for months, signs promoting the bank ownership of the property, dead landscaping, etc. 4. It is usually easier to rent a home to move to with a short sale than after a foreclosure. Most landlords check credit on tenant applicants these days.
There is now tax relief due to a law passed last year and signed by President Bush in late December. It does not help every individual that gets mortgage relief, but it will help many. Regardless of the tax relief you get, or don’t get, it is generally better to control your own destiny and work to effect a short sale, or settled agreement with your lender.
Our Advice: The foreclosure option requires no action …don’t make your payment…wait until the date of the sale…and move out. The short sale requires marketing your property, providing the bank with proper documentation of your need including a hardship letter, financial statement, pay stubs, tax returns, bank statements, etc. - work on your part, often unpleasant because of your present financial circumstances, but it is usually worth it for the long term positive effect on you. Additionally, helping the lender out of their investment problem instead of forcing a foreclosure is something you can do to help the institution that committed to help you when you wanted help … when you wanted to buy your house. Make every effort to implement a short sale … you will be happier in the shorter-long run.
A short sale involves a lot of work by your agents, it also requires them to have specific knowledge of how to navigate the inevitable maze the corporate lender makes agents run through. If you are having difficulties making your payment call your agent immediately to explore your options. Waiting won’t solve the problem.
Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com or www.carsonvalleyremax.com , email us at carsonvalleyland@hotmail.com 775-781-5472 toll free at 800-814-8799 ext. # 254.
Sunday, January 13, 2008
Nevada Homestead Update
We’ve had many inquiries lately regarding the act of filing a homestead on a primary residence as protection from credit cards debt. The Nevada Homestead Act does not protect a homeowner from any debt that was voluntarily incurred. This category includes mortgage financing, credit card debt, auto financing, lines of credit and Federal tax liability. Following is a repeat of an article we published in June of 2007 that offers a explanation as well as links to print the required homestead document.
Homeowner’s are advised to seek competent legal counsel regarding the ramifications of filing a Declaration of Homestead. This article is intended as a public service and not legal advice.
I’ve heard I should Homesteading my house … what does that mean?
The Nevada Homestead Act today doesn’t mean you can squat on 160 acres of public land and eventually own it, rather it is a means to protect equity in your home against seizure, forced sale by general creditor claims, and judgments that might be entered against you. The amount of protection was recently increased in Nevada to $550,000. The Nevada Homestead Act is one of the gifts the Constitution of the State of Nevada gives to homeowners and yet it’s amazing how few people actually take advantage of it. Most of the people we speak with don't even know it exists.
Here’s how it works: You must own or be buying your home or mobile home in order to file a Declaration of Homestead. The home must be your principle residence, not a rental or investment property. It doesn’t matter whether you are single, married or an unmarried head of household. You may homestead your mobile home even though you don't own the land the mobile home sits on. Some mortgages may prohibit homesteading, check with your lender to ascertain their position on you homesteading your property.
Be aware that a homestead will not protect your home or mobile home if the judgment or lien is for: Taxes, the mortgage or deed on the home or mobile home, improvements made on the home or mobile home, mechanics liens and other liens on the home or mobile home, any debt or obligation you willfully and voluntarily incur.
Thanks to legislative changes this year, you can protect $550,000 of your equity. If your equity exceeds $550,000 you should go ahead and homestead understanding that you will only be able to protect $550,000 of your equity. To protect your property all you need to do is: Obtain and fill out a Nevada Declaration of Homestead form, sign it before a notary and print your name beneath your signature, Record it at the County Recorder's office of the county in which the property is located. There is a nominal recording fee. You can record your homestead at almost any time, even if you have already lost a lawsuit or had a judgment entered against you.
If you have already filed a Declaration of Homestead on your property remember that you will need to prepare and record a new one if you: Sell your home and buy another one, move your mobile home from one lot space to another, marry, divorce or become widowed, get a new loan.Our Advice: Filing a Declaration of Homestead is easy and is such a valuable tool that we recommend all Nevada homeowners utilize this very inexpensive means to protect their home equity.
You can obtain a homestead packet at most office supply stores, or contact Lisa and Jim by phone or email, or simply stop by at 1320 Highway 395, Gardnerville. You can also Click Here for Nevada Homestead Form.
When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, 775-781-5472, Visit our websites at www.carsonvalleyland.com or www.carsonvalleyremax.com email us at carsonvalleyland@hotmail.com
Homeowner’s are advised to seek competent legal counsel regarding the ramifications of filing a Declaration of Homestead. This article is intended as a public service and not legal advice.
I’ve heard I should Homesteading my house … what does that mean?
The Nevada Homestead Act today doesn’t mean you can squat on 160 acres of public land and eventually own it, rather it is a means to protect equity in your home against seizure, forced sale by general creditor claims, and judgments that might be entered against you. The amount of protection was recently increased in Nevada to $550,000. The Nevada Homestead Act is one of the gifts the Constitution of the State of Nevada gives to homeowners and yet it’s amazing how few people actually take advantage of it. Most of the people we speak with don't even know it exists.
Here’s how it works: You must own or be buying your home or mobile home in order to file a Declaration of Homestead. The home must be your principle residence, not a rental or investment property. It doesn’t matter whether you are single, married or an unmarried head of household. You may homestead your mobile home even though you don't own the land the mobile home sits on. Some mortgages may prohibit homesteading, check with your lender to ascertain their position on you homesteading your property.
Be aware that a homestead will not protect your home or mobile home if the judgment or lien is for: Taxes, the mortgage or deed on the home or mobile home, improvements made on the home or mobile home, mechanics liens and other liens on the home or mobile home, any debt or obligation you willfully and voluntarily incur.
Thanks to legislative changes this year, you can protect $550,000 of your equity. If your equity exceeds $550,000 you should go ahead and homestead understanding that you will only be able to protect $550,000 of your equity. To protect your property all you need to do is: Obtain and fill out a Nevada Declaration of Homestead form, sign it before a notary and print your name beneath your signature, Record it at the County Recorder's office of the county in which the property is located. There is a nominal recording fee. You can record your homestead at almost any time, even if you have already lost a lawsuit or had a judgment entered against you.
If you have already filed a Declaration of Homestead on your property remember that you will need to prepare and record a new one if you: Sell your home and buy another one, move your mobile home from one lot space to another, marry, divorce or become widowed, get a new loan.Our Advice: Filing a Declaration of Homestead is easy and is such a valuable tool that we recommend all Nevada homeowners utilize this very inexpensive means to protect their home equity.
You can obtain a homestead packet at most office supply stores, or contact Lisa and Jim by phone or email, or simply stop by at 1320 Highway 395, Gardnerville. You can also Click Here for Nevada Homestead Form.
When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, 775-781-5472, Visit our websites at www.carsonvalleyland.com or www.carsonvalleyremax.com email us at carsonvalleyland@hotmail.com
Wednesday, January 9, 2008
I Heard Buyers Need to Put More Money Down … Is That True?
You might have caught wind of Fannie Mae’s Announcement 07-22 dated December 5, 2007. That announcement established some new guidelines for lending in a “down market”, the most impactive of which is the requirement for an additional 5% down in such a market. Example: the requirement will mean that a 100% loan (no money down) would then require 5% down. It only applies to loans with application dates on, or after, January 15, 2008, and only in down markets.
The guidelines require the lender to get the additional 5% if the appraiser notes in the appraisal that they are in a down market. If the appraiser does not make such a notation, “Fannie Mae strongly urges lenders to implement processes and apply supplement sources and tools to validate current housing trends and not rely solely on the information reflected in the appraisal.” The lenders and appraisers can use the following services: Standard & Poor's - S&P/Case-Shiller® Home Price Indices ,
Office of Federal Housing Enterprise Oversight (OFHEO) , and National Association of REALTORS (NAR) . There are other subscription/fee based services that they may use.
Also being implemented by some lenders is risk based pricing for conventional products. In such a situation borrowers with credit scores below 620 (or missing score – no credit established) would pay an additional 2 points. Credit scores of 620-639 an additional 1.75 points, 640-659 an additional 1.25 points, 660-679 and additional .75 point. This is, of course, in addition to the normal punitive points and higher loan rate related to the lower credit score.
Our Advice: Recent conversation with an active local lender revealed that we are not locally in a “declining market”. There are areas so identified across the nation, but nothing in our service area. Of course, this can change, we certainly have had a drop in our prices, and we have been told that some lenders are already treating our market as if it were in a “down” status, requiring the additional down of their borrowers. If you have limited funds for a down payment and are trying to time the market drop, we suggest that you act now to make sure that you can buy a home.
If our area achieves a “declining market” status and you are caught with the requirement of additional down payment funds that you don’t have, you might have to wait until the market starts rising again to buy your home. As the market rises the money you might have saved will certainly be lost – maybe forever if you are priced out of the market as we have seen in the past. We anticipate that the market will bounce high and fast when it turns – timing is the only question. Control your own destiny and get on with your life.
Save money and maintain a good credit score. Lenders still want to make loans – they are just exercising better discretion on who they make loans to than they have in recent years. Make yourself a desirable borrower and you, too, will enjoy the American Dream.
Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com of www.carsonvalleyremax.com , 775-781-5472. Email us at CarsonValleyLand@hotmail.com .
The guidelines require the lender to get the additional 5% if the appraiser notes in the appraisal that they are in a down market. If the appraiser does not make such a notation, “Fannie Mae strongly urges lenders to implement processes and apply supplement sources and tools to validate current housing trends and not rely solely on the information reflected in the appraisal.” The lenders and appraisers can use the following services: Standard & Poor's - S&P/Case-Shiller® Home Price Indices ,
Office of Federal Housing Enterprise Oversight (OFHEO) , and National Association of REALTORS (NAR) . There are other subscription/fee based services that they may use.
Also being implemented by some lenders is risk based pricing for conventional products. In such a situation borrowers with credit scores below 620 (or missing score – no credit established) would pay an additional 2 points. Credit scores of 620-639 an additional 1.75 points, 640-659 an additional 1.25 points, 660-679 and additional .75 point. This is, of course, in addition to the normal punitive points and higher loan rate related to the lower credit score.
Our Advice: Recent conversation with an active local lender revealed that we are not locally in a “declining market”. There are areas so identified across the nation, but nothing in our service area. Of course, this can change, we certainly have had a drop in our prices, and we have been told that some lenders are already treating our market as if it were in a “down” status, requiring the additional down of their borrowers. If you have limited funds for a down payment and are trying to time the market drop, we suggest that you act now to make sure that you can buy a home.
If our area achieves a “declining market” status and you are caught with the requirement of additional down payment funds that you don’t have, you might have to wait until the market starts rising again to buy your home. As the market rises the money you might have saved will certainly be lost – maybe forever if you are priced out of the market as we have seen in the past. We anticipate that the market will bounce high and fast when it turns – timing is the only question. Control your own destiny and get on with your life.
Save money and maintain a good credit score. Lenders still want to make loans – they are just exercising better discretion on who they make loans to than they have in recent years. Make yourself a desirable borrower and you, too, will enjoy the American Dream.
Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com of www.carsonvalleyremax.com , 775-781-5472. Email us at CarsonValleyLand@hotmail.com .
Wednesday, January 2, 2008
Its January … Are There Any New Laws Affecting Nevada Real Estate?
Though the Nevada Legislature meets every other year, the results of the last legislative session take effect over an extended period depending on the complexity of implementing the new law. Several new, or changed, laws that impact real estate took effect on January 1, 2008.
Pest Inspectors in Nevada can now be denied a license, or have their license revoked, if the licensee “Has been convicted of, or entered a plea of guilty or nolo contendere to, a felony or any crime involving moral turpitude, in any court of competent jurisdiction in the United States or any other country.” Moral turpitude? Precise definition is difficult, but generally means crimes with an intent element demonstrating moral laxity, bad character, or violence, and conduct that is inherently base, vile, or depraved, and contrary to the accepted rules of morality, and the duties between persons or to society in general.
Additionally, a complete set of fingerprints and written permission authorizing them to be reviewed by the FBI must be submitted with a Pest Inspection license application. One more subtle, but significant change – one must be licensed to “alter” a report as well as prepare one. It seems logical … if the property has been cleared only a pest licensee should be able to confirm that and change a report.
Some real estate related tax law has protective changes including:
(a) Exemptions are now allowed for property owned by the Archaeological Conservancy if it meets certain criteria (NRS 361.111.1).
(b) Lodges and other benevolent or charitable organizations personal property are no longer limited to $5,000 maximum exemption.,
(c) An initial claim for a tax exemption on real property acquired after June 15 and before July 1 must be filed on or before July 5th .,
d. Many changes for common interest community properties – see 361.233.1 for details.,
(e) A county assessor may, by… electronic means or any other means the assessor deems appropriate, disseminate information to the public concerning the taxation of property, including… information relating to the valuation and assessment of property, exemptions from taxation, the declaration of a homestead and programs for the assistance of senior citizens. 2. …information… must…be in a form that is easily understood and readily accessible to the public.
Nontraditional mortgage loan products are now defined as:
(a) A residential loan agreement whose terms allow a borrower to defer repayment of principal or payment of interest on the loan for a period.
(b) Includes, without limitation: (1) An interest-only loan; and (2) A payment option adjustable-rate mortgage.
(c) Does not include: (1) A home equity line of credit other than a simultaneous second-lien home equity line of credit; or (2) A reverse mortgage.
Our Advice: Monitor law and ordinance changes and how they can affect you. New water law is having a dramatic financial impact on property owners in other counties. The cost to the property owners is in the millions of dollars. A reasonable change in the water law is the restriction of 2 acre feet of annual use by residential well users instead of no more than 1,800 gallons per day, the previous legal restriction. Good to know during times of the year when more water is needed.
We highly suggest that you monitor bills during the Legislative session. They can directly impact you without your input if you aren’t paying attention.
Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com or www.carsonvalleyremax.com , email us at carsonvalleyland@hotmail.com 775-781-5472 or toll free at 800-814-8799 ext #254.
Pest Inspectors in Nevada can now be denied a license, or have their license revoked, if the licensee “Has been convicted of, or entered a plea of guilty or nolo contendere to, a felony or any crime involving moral turpitude, in any court of competent jurisdiction in the United States or any other country.” Moral turpitude? Precise definition is difficult, but generally means crimes with an intent element demonstrating moral laxity, bad character, or violence, and conduct that is inherently base, vile, or depraved, and contrary to the accepted rules of morality, and the duties between persons or to society in general.
Additionally, a complete set of fingerprints and written permission authorizing them to be reviewed by the FBI must be submitted with a Pest Inspection license application. One more subtle, but significant change – one must be licensed to “alter” a report as well as prepare one. It seems logical … if the property has been cleared only a pest licensee should be able to confirm that and change a report.
Some real estate related tax law has protective changes including:
(a) Exemptions are now allowed for property owned by the Archaeological Conservancy if it meets certain criteria (NRS 361.111.1).
(b) Lodges and other benevolent or charitable organizations personal property are no longer limited to $5,000 maximum exemption.,
(c) An initial claim for a tax exemption on real property acquired after June 15 and before July 1 must be filed on or before July 5th .,
d. Many changes for common interest community properties – see 361.233.1 for details.,
(e) A county assessor may, by… electronic means or any other means the assessor deems appropriate, disseminate information to the public concerning the taxation of property, including… information relating to the valuation and assessment of property, exemptions from taxation, the declaration of a homestead and programs for the assistance of senior citizens. 2. …information… must…be in a form that is easily understood and readily accessible to the public.
Nontraditional mortgage loan products are now defined as:
(a) A residential loan agreement whose terms allow a borrower to defer repayment of principal or payment of interest on the loan for a period.
(b) Includes, without limitation: (1) An interest-only loan; and (2) A payment option adjustable-rate mortgage.
(c) Does not include: (1) A home equity line of credit other than a simultaneous second-lien home equity line of credit; or (2) A reverse mortgage.
Our Advice: Monitor law and ordinance changes and how they can affect you. New water law is having a dramatic financial impact on property owners in other counties. The cost to the property owners is in the millions of dollars. A reasonable change in the water law is the restriction of 2 acre feet of annual use by residential well users instead of no more than 1,800 gallons per day, the previous legal restriction. Good to know during times of the year when more water is needed.
We highly suggest that you monitor bills during the Legislative session. They can directly impact you without your input if you aren’t paying attention.
Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com or www.carsonvalleyremax.com , email us at carsonvalleyland@hotmail.com 775-781-5472 or toll free at 800-814-8799 ext #254.
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