Getting What You Deserve

CNN's "Wow, I could've had a prime mortgage" looks at why many borrowers who qualified for prime-rate loans wound up with subprimes instead.

The news source reveals that a regional director of one company reviewed several hundred [subprime] loans recently for its wholesale division and found that ***all of them***, with one exception, qualified for a prime-rate loan.

What's one way to make sure you're getting the best possible program for which you qualify? Know your credit score. (Prime loans are usually granted to borrowers with credit scores of 650 or higher.) And since other factors also influence which package you're ultimately offered, talk with your mortgage professional and don't be afraid to get a second opinion.

Pet Owner? Selling Your House?

Pets can actually make your home harder to sell. Experts often suggest that you put your pets in a kennel while showing your home.But that's not always practical or affordable. So what else can you do? Quicken Loans has several useful tips:

Vacuum every day, even twice a day. Pay careful attention to the corners and edges of carpeting, where pet hair can accumulate.

Avoid Pet Smells Use cleaning products with a lemon scent and wipe all surfaces before a showing. If the smell of your pets is extremely strong, try bleach. (While bleach is not a favored smell, most experts agree the smell of bleach is better than the smell of someone else's pets.)

Make Sure They're Not Home During Showings Having your pets at the house is the last choice and no tonly for cleanliness reasons. The last thing you need is a lawsuit when someone claims your dog bit them or a family member.Arrange for friends or family to take your pets for a few hours. If you simply can't arrange to get your dogs out of the house, set up a temporary pen in your backyard.

Market Your Home to Other Pet Lovers Instead of trying to hide all evidence of pets, promote the fact that your home is "pet-friendly."

Source: Quicken Loans

5 Key Questions to Ask a Home Seller

Inman News shares five key questions home sellers -- and their real estate agents -- hope buyers don't ask:

1.) WHY ARE YOU SELLING THIS LOVELY HOME?

When you know why the seller is selling, you can

• tailor a purchase offer that will meet the seller's needs, and
  
• determine if the seller is highly motivated to sell
  

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2.) HOW MUCH DID THE SELLER PAY FOR THIS HOME?

The answer to this question shows how much cash the seller absolutely must receive -- and how much room there is to negotiate.

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3.) WHAT DEFECTS DOES THE HOME HAVE, AND HAVE THERE BEEN ANY RECENT PROFESSIONAL HOME INSPECTIONS?

Smart listing agents obtain the seller's written disclosures at the time of listing and have it easily available to prospective buyers. Also, home sellers often have customary professional inspections completed before the home is put on the market.

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4.) WHAT PROBLEMS HAVE YOU HAD WITH THIS HOME?

In most states, court decisions and statutes do not require home sellers to reveal past problems that have been corrected. But it is still important for buyers to know if those past problems might again become future problems.

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5.) WHAT IS THE QUALITY OF THE PUBLIC SCHOOLS?
Even if you don't have small children, this is an important question to ask. Top quality schools contribute to home values and future market value appreciation. Families prefer to buy in communities with superb public schools and are willing to pay extra for the privilege.

Automated Valuation Models

Generally, an appraisal is an independent estimate of a property's value that is provided by a licensed appraiser. With residential real estate, these valuations are often made on the basis of the value of recent comparable properties, as well as a physical examination of the home itself. As impartial third-parties with a strong knowledge of local pricing, appraisers provide a valuable service for buyers looking at properties they emotionally value.

Automated valuation models (AVMs) serve a basic and fundamental purpose to buyers and sellers, but are not a replacement for the services of a licensed appraiser. (In fact, companies offering AVM services have been subject to legal action for calling their products "appraisals".) An AVM is a computerized estimate of what a specific property is worth, based on database information and analysis of a variety of factors (including property attributes, location, recent sales, tax assessments, and other criteria). It is best-suited for situations when a reasonably accurate estimate of a property's value, rather than a full appraisal, is needed.

Critics of automated valuation models state that anything short of an on-site, exterior and interior professional appraisal is likely to overstate the true worth of the property if it's located in a slowly-appreciating market. They also point out that AVM estimates are often based upon very faulty data that will most likely not include "fresh sales" in your area.

Relying solely on AVMs to give you a value prior to selling your home is also risky. This is because automated valuation models base their value estimates without anyone evaluating the condition of your home or the condition of the comparable sales that were used to estimate your home's value. Your Realtor(R) can provide you with a list of comparable properties in your specific area and physically assess the interior and exterior of your home to give you suggestions on an appropriate asking price.

When you purchase a home, your mortgage lender will likely require a full appraisal by a state-licensed appraiser. (This is to ensure that the loan amount is consistent with the true value of your home, and that you are not overpaying for the property.) We can recommend qualified, experienced appraisers who are familiar with the New Hampshire market: For details, call (603) 472-2272.

Tax Tips for First-Time Homebuyers

Itemizing works for many -- but not all -- homeowners. Choose the deduction method that gives you the larger deduction amount: sometimes, it's the standard deduction. Also, the time of year when you actually closed on your house could make a big difference in your deduction method choice.

Make the most of mortgage interest. If you itemize, be sure to write off all the interest you paid on your mortgage (even from private loans,such as seller financing).

Hang onto your HUD-1. Don't rely solely on Form1098 information. Initial adjustments of interest for the first month following a sale should be figured in; that information can be found on the HUD-1 closing document.

Points pay off. You can deduct points for the tax year in which you purchase the home. They're fully deductible... as long as they are reasonable and consistent in the area where you bought your home. And if it's a primary residence, you can choose to amortize or deduct the points all at once.

Check your property tax bill. Depending on when you bought your house and your jurisdiction's tax year, you may be able to claim a deduction.

Home-Equity loan or line of credit? As long as the loan (of up to $100,000) is secured by your residence, its interest is deductible.

Self-employed and working out of your house? Don't forget about any home office deductions to which you may be entitled.

Did you make improvements to your home to alleviate a medical condition? Be sure to itemize these, too.

Source: Bankrate.com

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The NH First-Time Homebuyers Club makes the home purchase an easier one. Better yet, it's absolutely free! Learn more at www.NHFirstTimeHomebuyer.com.

3 Rules for Successful Real Estate Investing

• Do your homework. Know the market and its risks.
  
• Prepare for the worst. It will happen.
  
• Think location, location, location.
  

Source: MSN.com

How Your Credit Score is Calculated

35% -- of your score depends on your payment history
30% -- of your score is based on how much you owe
15% -- of your score depends on the average age of your accounts
10% -- of your score depends on new credit
10% -- of your score is based on your experience with revolving credit, such as credit cards

Source: Kiplinger's Personal Finance Magazine

Questions to Ask When Interviewing a Listing Agent

Agent Experience

• How long have you been selling real estate?
  
• How many homes did you sell last year (as a seller's agent)?
  
• Of the homes you sold last year (again, as a seller’s agent), what was the average number of days between the original listing and an accepted offer?
  
• What is the average ratio between the listing price and the selling price?
  
• What is your experience with my particular neighborhood?
  

Marketing Plan

• How do you propose to market my house? (open houses, previews for agents, yard signs, MLS listings, etc.)
  
• At open houses: will ***you*** be there to interact with potential buyers, or will you just send an assistant?
  
• What sort of advertising will you do?
  
• What sort of Web marketing can I expect? (photos, virtual tours, links to other Web sites, etc.)
  
• Do you take professional-grade photographs (or work with actual professional photographers)?
  
• How often do you expect to communicate with me regarding inquiries and other buyer interest?
  

Personal Info

• Do you consider yourself readily accessible? (evenings, weekends, by cell phone or beeper)
  
• Do you expect to be out of the office while my home is listed? (vacation, etc.) If so, who will be handling the listing in your absence?
  
• Can you provide (at least) three references?
  

Money Matters

• What do you think my home is worth, and how do you determine your valuations?
  
• What is your fee structure? Commission, flat-fee, a la carte? Do you recommend one or another?
  
• What do the fees include and, perhaps more important, what don’t they include (e.g., document preparation, etc.)?
  
• “That’s a hunk of change” (or something to that effect). Why do you believe you’re worth it?
  

Source: zillow.com

Ways Your House Can Make You Money

Here are some tax strategies for home owners:

• The "2 in 5" rule: if you've lived in your home for two out of the previous five years, you get a tax break when you sell it
  
• Rent out part of your home: for "rental property" income now and tax benefits when you sell the property
  
• Create a home office: this is handy if you've got a high income that is preventing you from taking the full mortgage interest deduction
  
• Move out early -- and still save: if you have to sell your home under certain unforeseen circumstances
  

To learn more, click here.

Pre-Qualification vs. Pre-Approval

Pre-Qualification:
-- doesn't require a credit check
-- carries no weight with buyers or lenders
-- based on buyer's word on his/her income and assets
-- gives you a fair idea of the price range of home you should be looking at

Pre-Approval:
-- is the next step after prequal
-- requires getting your credit checked.
-- involves us confirming and verifying information that is relevant to your obtaining the best possible loan program
-- allows you to choose which program best suits your needs

Once you're pre-approved, we help you strategize on how to structure your offer, with respect to seller-paid closing costs. You'll also receive a written pre-approval letter to attach to your offer.

Decoding Real Estate Jargon

Here's what some popular descriptors may really mean:

State-of-the-art: Meet the Jetsons
Spacious: Airplane hangar
Charming: Small
Gourmet: Viking range
Cute or cozy: Small
View: Of what?
Fantastic: According to whom?
Well-maintained: Old, but not a disaster
Wonderful: Not much to talk about
Great neighborhood: What's wrong with the house?
Renovated: Red flag: botched job?
Remodeled: When? How long ago?
Fixer-upper: A shack
Handyman's dream: A wreck
Needs TLC: Somebody screwed up a remodel
Romantic: Old
Tear-down: Just what it says: tear it down
No price: Overpriced
Great starter home: Tiny
As-is: Smells like a tear-down

Source: zillow.com

Information Overload?

Are buyers are being provided with too much information when hunting for a mortgage? Does disclosure of complex transactions, such as yield spread premium (YSP), confuse homebuyers and lead to poor financial judgment? These are the issues being looked at by the Federal Trade Commission (FTC). A report that is scheduled to be released soon already has the National Association of Mortgage Brokers (NAMB) considering changes in mortgage disclosure forms.
Stay tuned...

Source: Realty Times

Normal Wear and Tear

To get a full refund on your apartment's security deposit when you move out, you must return a rental in its previous state, minus "normal wear and tear."

"Normal wear and tear" usually includes:

• Some matting of the carpet
  
• A few nail holes on the walls
  
• Fading or yellowing of the paint
  

Some things that clearly don't fall under normal wear and tear include:

• Stains and burns on the carpet
  
• Broken windows
  
• Broken or missing blinds
  
• Gouges in the doors and walls
  
• Flea infestations caused by your pet
  
• Pet scratches on the molding and on or around doors
  

Source: MSN

Common Borrower Mistakes

Here's a list of common mistakes made during the new loan process, according to Yahoo Finance:

Believing you're qualified for the loan, when you aren't.

Not considering the taxes or insurance.

Taking an ARM simply because the lender recommended it.

Misunderstanding private mortgage insurance (PMI).

Not considering the loan term.

Not picking a less expensive house.

Source: Yahoo Finance

Above the (State) Law?

Last month, the United States Supreme Court ruled that national banks’ mortgage-lending subsidiaries do not have to obey state banking regulations, according to the New York Times. And because the federal government has not established a broad set of regulations against predatory lending, says the newspaper, borrowers face new issues.

For consumers, the decision raises a new question: How do you tell if a lender is regulated by state lending laws? The short answer is: Check with your state’s banking regulator. (You can access the New Hampshire Banking department's Web site at www.nh.gov/banking)

Source: New York Times