New Orleans Westbank Real Estate Blog / NOLA Westbank Homes


    Home Staging Essentials

    Guest Article By:
     Andrew Hill @ Austin Homes

    So you?ve decided to sell your home. While there are probably many different reasons for why you?ve made your decision, chances are you are now considering how to go about staging your house. Home staging is a make it or break it phase of the real estate business that too many sellers are unsure of. If you?re in that same boat, not to worry. Here are a few helpful tips to make this part of selling your home much smoother.

        1.   Hire a Realtor 

          This is probably one of the most obvious yet commonly ignored parts of the equation. No one wants to spend the extra money on a Realtor?s commission and that is understandable. But before you try to sell your home on your own, ask yourself, ?Would I consider buying a home that was ?For Sale By Owner??? The fact is buyers are reassured by the fact that a home is being sold by a professional. They trust that the home is being advertised truthfully and will be much more willing to consider your house. Not only that, but a Realtor provides a second pair of eyes and their own pointers about what needs to be fixed in your home before a showing.

             2.   Impress From the Beginning 

          Do you know what really puts a showing off to a great start? A well manicured exterior. Think about the tremendous difference a clean-cut yard can make. Take the time to mow your lawn, trim the hedges, remove dead plants, fix any broken windows and add a touch of paint where necessary.

           3.   Be Tidy     

          Once you have them inside your home, you want the house to be as tidy as possible. This means that before every showing you should vacuum, mop, dust and straighten furniture as necessary. Try to keep your belongings organized after you come home from work or school so that when it is time to stage your home you will have less to pick up.

           4.    Set the Tone 

          Remain neutral but lively. This may be one of the trickiest aspects of the game. When buyers visit your home they are trying to imagine if they could live there or not. To assist in this illusion, you should remove any objects that are too unique to your family; otherwise you may isolate some buyers. At the same time you want to add a few personal touches so that your home doesn't feel like a sterile hospital wing.

            5.   Avoid Distractions     

          Finally, make sure pets, children, and anything with the potential to be loud or messy are out of the way when buyers are touring. While you may love playing with your pets and kids, others may not be as fond of them so it is best to err on the conservative side.

    Just follow these tips and you?ll be on your way to staging your home like a professional.
    For more tips on how you can stage your home well or for real estate information in general, be sure to contact Cindy Tuck today!             By Andrew Hill @ Austin Homes


    Following comments from Cindy:

    If you still need to put more pizzazz into your home to really make it stand out, you may want to consider Professional Home Staging. You can ask your Realtor for Recommendations. Studies show that this can actually save time and money for many Sellers:

    In a National study conducted by the Real Estate Staging Association, 126 homes were selected that had been professionally staged After being on the market for 263 days.  (That's 9 months!!!)  Then the homes sold quickly.  This same study took 284 homes that the owners had professionally staged Before they went on the market and they Sold on an average in 40.5 days! This is approximately 223 days LESS time on the market (7 Months).  Just think of how much money those Sellers saved on their mortgage by selling their home quicker!

    In another study, the results of a National Survey conducted by HomeGain, showed homes which the Seller's spent an average cost of  $300-$400 on Professional Home staging increased their home sale by $1500-$2000.  That's a return of 586% !!!


    Watch this Video for more statistics on Staging: "This Month in Real Estate" May 2012- KW


    One local company here in the New Orleans area is Sudden Change Interiors - www.suddenchangeinteriors.com

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    What Do Americans Think About the Current Housing Market?
    Photo: © Steve Greer - iStockphoto


    Home buyers and investors alike are trying to gauge the health of the real estate market. One of the best ways to predict sales figures is to ask Americans if they plan on buying. The Fannie Mae National Housing Survey of May 2012 reported on the attitudes of 1,002 polled Americans toward the real estate market and the economy. The answers reflect the current?and the future?state of the housing market.

    Higher Home Prices

    Seventy-two percent of survey respondents believed that the current real estate market
    was a good one to jump into, a one percent increase over the previous month. A much smaller 15 percent of respondents thought market conditions favored sellers. The reason?many respondents expected home prices to increase by an average of 1.4 percent, the highest value yet recorded in the National Housing Survey. This increase would incentivise many Americans to start their home searches before prices rise, while encouraging sellers to wait for a higher asking price. Another reason for the positive outlook is the belief of 41 percent of respondents that home mortgage rates will increase over the next year; buyers want to lock in their mortgages before rates increase.

    Downturn in Personal Finances

    Yet only 63 percent of those surveyed would buy in today's real estate market, down from 64 percent in April and 66 percent in March. This could be due to the answers respondents gave to questions about personal finances. Twelve percent of respondents expected to see a decline in their financial standing, while 46 percent expected their financial situation to stay the same over the next 12 months. Fifteen percent of those questioned stated their household income is lower than it was a year ago.

    Positive Signs

    While 32 percent of those surveyed said their expenses had increased significantly in the past year, that is the lowest value reported in the history of the survey and a four percent decrease from the month before. And a record-high 38 percent of respondents believed the economy was starting to improve.

    Rising Rents

    Survey respondents also foresaw an increase in rental prices. Forty-nine percent?the highest percentage recorded to date?believed rental prices would rise. On average, respondents expected rents to increase by 4.1 percent over the next year. It could be the rising rents, or it could be the dream of home ownership, but when respondents were asked what they would do if they were to move, only 32 percent would rent while 63 percent would buy.
    Americans are approaching the American dream with a little more caution, keeping their finances and the future of the economy in mind?an approach that can only help the long-term stability of the housing market.

    This Article was written for my NOLA Westbank Homes Newletter for July: Realty News


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    Mortgage Loan Prequalification or Preapproval ?

    We have a guess post blog this week by Andrew Hill @ NewHome Source  written about Prequalifing for your mortgage loan.  I want to point out that terminology differentiates in different parts of the country.  So to eliminate confusion, I just want to point out that there is a difference between prequalification and a preapproval.  A prequalification is not always a preapproval, because a preapproval only occurs after your mortgage company receives and verified your documents that back up the information you provided to them about your income, assets, liabilities and job experience.  When you punch in answers to a set of questions online and are given a mortgage prequalification, this is not going to hold a lot of weight when it comes time to put in an offer to buy a home.  Please be sure you are working with a qualified Realtor who has a valid Preapproval Letter waiting for you!

    Prequalification: What is it & Why does it Matter?

    By Andrew Hill @ www.newhomesource.com

    So you?ve decided you?re ready to buy a home. Congratulations! Whether you?re a first time buyer or an expert in real estate, the first thing you?ll want to do it get prequalified for a home loan. You probably have heard this term before, but what exactly does it mean to ?prequalify?? In short, pre-qualification is an assurance by the lender, which determines the highest loan amount that you qualify for.

    Why should you prequalify? For starters, it saves you time and money. Buyers who are pre-qualified are able to consult better realtors and thus receive better service. Pre-qualified buyers are also given preference in multiple-offer situations and can negotiate for a better price than those who haven?t been prequalified.

    Given these benefits, you may be asking yourself, ?How can I get prequalified??
    In order to do prequalify, you?ll need:
    1.      Credit reports
    2.      Online mortgage/finance services
    3.      A lender
    The process essentially consists of you and a lender (or a mortgage broker) looking over your credit history and your debt to income ratio, for which you?ll need to provide your gross monthly income and total monthly payments. Depending on your unique situation, the lender you?re working with may ask for other documentation and information regarding your finances.

    In order for you and the lender to look over your financial background and current situation, you?ll need to give your lender authorization to pull your credit report. After your information has been evaluated, the lender will construct a letter of prequalification for you, which states that they have reviewed your credit and financial information.
    With this little letter in hand, you?ll be that much closer to finding the home of your dreams.

    Tips:

    -To find a good lender, ask for a referral from a trusted relative, friend, or co-worker.
    -Prequalification is usually a free service. If the lender tried to charge you, find a different lender. 
    -You don?t have to do business with the lender that prequalifies you. Shop around, compare rates, and choose the lender who has the best offer.


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    Home Buying Process For FHA Homes & First Time Homebuyers

    The following information is meant to help Buyers understand financing using FHA and is provided to us using information directly from one of HUD's Management Companies, HomeTelos First.  Their website info is given below.



    FHA offers 1-to-4 unit residential properties HUD acquires as a result of a foreclosure action on an FHA-insured mortgage. FHA then becomes the property owner and offers homes for sale at consumer-friendly prices to recover the loss on the foreclosure claim.
    You must have a Real Estate Agent to submit your offer. Any real estate broker registered with FHA may submit your offer and contract to purchase on your behalf. FHA will pay your real estate broker's commission using proceeds from the property sale.
    FHA's homes are offered for sale at fair market value, based on a recent appraisal. Generally, FHA sells homes in what is known as an "Offer Period," during which a potential buyer's offer must be made. At the end of the Offer Period, all offers are opened and the bid providing the highest acceptable net return to FHA may then be accepted. Following the initial "Offer Period" homes remaining unsold are offered on an "extended" basis which means offers may be submitted any business day. If a bid on one of these homes is acceptable, the broker will usually be notified within 48 hours of FHA's acceptance of the offer.





     Understanding HUD Properties and Financing
    1. Where do FHA properties come from?
      FHA, or the Federal Housing Administration, is part of the Federal Government's Department of Housing and                                                          Urban Development (HUD). FHA helps home buyers qualify for mortgage financing by offering lenders insurance against 
      home buyer default.
      When a home buyer defaults on an FHA insured mortgage, the lender may foreclose and take ownership of the home. The 
      lender then transfers ownership of the home to FHA in exchange for FHA paying the lender the balance that was due on the 
      mortgage. FHA sells tens of thousands of foreclosed properties each year using the expertise of industry experts such as 
      HomeTelos.
    2. If I want to buy a HUD property, can I use an FHA loan to buy the home?
      Yes! Your lender still needs to qualify you for an FHA insured loan. Remember, FHA does not make loans directly to homebuyers. You must go through your lender. However, FHA financing is not required. Your lender can guide you through available financing programs, including FHA.
    3. Does getting an FHA-insured mortgage help in buying a HUD Home?
      HUD may have more attractive downpayment terms on an FHA mortgage if a borrower is buying a HUD home. Check with your real estate broker regarding special terms or homebuyer incentives.
    4. Can HUD help if the property I am buying needs some repairs?
      Through the FHA, HUD offers Property Rehabilitation Mortgage Insurance, also known as a "203k loan". In this program a lender sets aside part of your mortgage in a repair escrow, which you can draw on to make needed repairs. Talk to your lender about FHA 203k loans, and if one is right for you.
    For more information on HUD Properties go to HUD's website at 
    http://www.neighborhoodlink.com/article/Homeowner/How_To_Buy_A_HUD_Home.
    For more information on HUD/FHA Properties go to: http://www.hud.gov/offices/hsg/sfh/ins/203b--df.cfm.
    For specific information on FHA Property Rehabilation Mortgage insurance Program, go to: 
    http://www.hud.gov/offices/hsg/sfh/203k/203kmenu.cfm.
    To find a specific FHA approved lender in your area, go to: http://www.hud.gov/ll/code/llslcrit.cfm.


     FHA's 9-step process for first-time buyers

    For first-time home buyers, there is a huge amount of information and guidance available. Sorting it out, and making sure that it is objective can be challenging.  Make sure you work with a Realtor you are comfortable with to help you and use the following guidelines.   FHA provides the best guidance in this area centered around 9 steps any soon-to-be homeowner should take. HomeTelosFIRST provides the information below that will guide you through these 9 steps, and give you plenty of support along the way.
    It may be surprising to you, but most homebuyers find their homes through the Internet. Feel free to start your journey by selecting homes currently available in your area, using the How To Search For A Home feature on the HomeTelosFIRST Homepage. The steps below can help you to refine your choice, and better help to smooth the road to buying the home that best meets your needs.
    Step 1. Figure out how much you can afford.
    To help you calculate how much you can afford to buy a home, FHA recommends you use models operated by Ginnie Mae, like FHA a part of HUD that supports mortgage financing. To get an answer to just how much you can afford, click on http://www.ginniemae.gov/2_prequal/intro_questions.asp?Section=YPTH
    Step 2. Should you rent or buy?
    Is this the right time financially for you to by? To see what works best for you financially, click on
    http://www.ginniemae.gov/rent_vs_buy/rent_vs_buy_calc.asp?Section=YPTH
    Step 3. Know your rights.
    You need to make sure you receive the information you are entitled to along your road to homeownership.
    You have the Right to..
    • Shop for the best loan for you and compare the charges of different mortgage brokers and lenders.
    • Ask for a Good Faith Estimate of all loan and settlement charges from your lender before you agree to the loan and pay any fees.
    • Know what fees are not refundable if you decide to cancel the loan agreement.
    • Ask your mortgage broker to explain exactly what the mortgage broker will do for you.
    • Know how much the mortgage broker is getting paid by you and the lender for your loan.
    • Ask questions about charges and loan terms that you do not understand.
    • Receive a credit decision that is not based on your race, color, religion, national origin, sex, marital status, age, or whether any income is from public assistance.
    • Know the reason if your loan was turned down.
    • Ask for the HUD settlement cost booklet "Shopping for Your Home Loan" from your lender.
    Step 4. Shop for a loan.
    To find a lender and loan terms that best meet your needs, you should learn some of the terminology used, what can help you, and what can cost you. To help guide you in shopping for the right loan, check out this HUD booklet by clicking http://www.hud.gov/buying/booklet.pdf
    Would you comparison shop in only one store? To find mortgage lenders doing business in your area that are approved by FHA, go to
    http://www.hud.gov/ll/code/llslcrit.cfm
    Step 5. Check out Home-buying Programs
    Your lender usually knows about any local programs offered to first time homebuyers, but it is always good to check for yourself. One avenue to do so is to see what programs have been identified by local HUD offices. Click here to see what might be available in your state:http://www.hud.gov/buying/localbuying.cfm
    Step 6. Finding a qualified real estate agent to help you buy your home
    Nearly 75% of today's home are found and purchased through the Internet. This does not eliminate the need for you to select a qualified real estate agent to represent you. A qualified real estate agent provides the best security for any buyer in ensuring a great home purchase. You should expect your agent to:
    • Develop a preliminary evaluation of a property (including both pros and cons) and provide an explanation of comparative property values in the area.
    • Properly advise you on price and other advantageous negotiating options and prepare a purchase offer.
    • Make a timely and complete offer on the home you are interested in buying.
    • Notify you immediately regarding offer acceptance, offer rejection, or counter offers.
    • Arrange inspections, warranties, and any certifications that might affect the value of the property.
    • Accompany you on a final walk-through of the property before closing.
    • Attend the closing and provide assistance to you and your attorney at the closing.
    Remember, your real estate agent can guide you, but only you know the home that is right for you.
    To locate a real estate agent in your area, click here to find agents you may wish to represent you: Find An Agent
    Step 7. Get a Home Inspection
    What you see may be what you get, but what about what you don't see? It pays to engage the trained eyes of a home inspector to make sure you fully understand the condition of the property you are buying. To learn more about home inspections, check out the information at this site:http://www.pueblo.gsa.gov/cic_text/housing/inspection/home.htm
    Step 8: Obtaining homeowners insurance
    Homeowners insurance is more than just a good idea. Your lender will require that you carry sufficient coverage to at least pay off your mortgage amount if your home were severely damaged. To get some background on what to look for in a homeowners insurance policy, clickhttp://consumeraction.gov/caw_insurance_homeowner_renter.shtml
    Step 9. Closing
    One of the most exciting moments of your life is actually closing on the purchase of your new home. To understand the process and remove stress from the event, try reading some background information provided at this website: http://www.hud.gov/offices/hsg/ramh/res/sfhrestc.cfm
    Congratulations, you made it through the 9 steps! The materials referenced along the way are not the only sources of information for you. 
    Always work with your Real Estate Agent to guide you through this process and give you more resources/ information.
    Find out more on HomeTelosFIRST Homepage @ www.hometelosfirst.com 






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    3 Things You Should Know About Short Sales







    Having a Realtor can bring some stability into a Short Sale transaction, but everyone needs to realize that a short sale?s success depends on a variety of issues.  This type of transaction is constantly evolving; however there are a few things that remain the same and any Seller considering a Short Sale will need to understand.

    Market Value Matters
    Short sales sell for market value.  You heard this correctly!  A bank will generally agree to a short sale if the numbers make sense.  Banks realize that homes need to appraise and Banks also need to mitigate their loss.  Therefore, having a home listed for well below market value is not the best strategy for getting an approved short sale.  It's true you may get plenty of offers, but if the bank won?t accept any of them you end up having wasted a lot of energy,  face disappointment and several angry potential buyers.
    Banks are no longer in the business of giving away houses.  The banks need numbers that make sense. So when the figures make sense, the likelihood of a successful short sale closing is 90%.
    Only Real Hardships Get the Help
    I?ve heard of many potential sellers say the only reason they are pursuing a short sale is because everyone else is doing it.  Purchasing a house during the housing boom is not a legitimate hardship.  If you purchased a house during that time period and now you are unable to pay your mortgage - that is a hardship.
    Strategic default is never a good idea! Banks actually analyze short sale sellers? hardships, and most center on the economy, so the bank is going to make sure that a short sale is in their own best interest.  Acceptable hardships include medical issues, divorce, disability, significant loss of income, death, unemployment, and relocation.
    Short Sale Laws are Local to Your State
    There are currently no national short sale laws on the books.  There are federal guidelines, but they can be applied when and how a bank wants.
    In the Short Sales I have done in my state, when the short sales are completed the deficiency amounts were forgiven for homes which were the primary residence of the Sellers.  But this may not be the case in all states, or when the home was not owned for the purpose of the primary residence.
    States can either have recourse loans or non-recourse loans.  A recourse loan allows the bank to demand a borrower pay the difference between what the property is sold for and what is owed on the lien.  Many recourse states allow lien holders (banks) to pursue judgment liens against the borrower for the deficiency amount.  This process allows the bank to garnish a borrower?s wages until the debt is paid off.  Garnishments can be as much as 25% of non-exempt disposable earnings, and bankruptcy doesn?t always save a defaulted borrower from judgment liens.
    Remember - Your Real Estate agents is not allowed to practice law, unless they are actually licensed to do so. However, Realtors are required to be aware of possible penalties for short selling a home and also be able to direct their clients to the right resources to discuss the possible consequences and solutions.  So it is important to consult with your Realtor and your CPA.
    Short sales can be complicated to navigate, so don't try to do it alone.  But for those of you who qualify and require some much-needed relief, remember, it is important to have an experienced Realtor to help you. 


    Note: This article also includes information summarized from the Trulia website provided as a service to Realtors.


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    How Do I Get My Down Payment To Buy A Home?

    Hello Everyone,
              Sorry for the long break.  Many of my clients have been having concerns about coming up with their down payment to buy their new home.  I came across a list of tips I would like to share with you from Trulia, one of the web's top home listing websites, to help with just this...

    The following Article can be enlarged for viewing by clicking on it, and then click again to enlarge:


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    Impact of Our Economy on Buyers ? Especially First Timers
    For a long time now, most people have been worried about the economy and how it will effect them.  The unemployment rate is rising and so are the number of foreclosures.  The worry of job security and tightening of credit standards have kept many buyers out of the market.  Most buyers still in the market are looking for homes lower in price than before, and this is causing the average sale price of homes to be lower across the board.  On top of this, more homes selling at foreclosure prices will eventually bring the rest of home prices down.  Out of the buyers who are left, some sit back for the prices to drop lower.  This causes bumps in the road as the market trys to stabalize.  The truth is that the ones that wait too long are going to miss the opportunities that exsist now.  While prices of homes are still low and interest rates have now dropped this week again, too many buyers are not taking advantage of this.  Read here where New Orleans City Business reported this week, "Average Rate on 15 Yr Mortgage Dips Below 4%".  This article reports that the average 15yr fixed mortgage dropped to 3.97% while the average 30yr fixed mortgage fell to 4.88%.  The yield on U.S. Treasury bonds fell due to worries that the crisis in Japan could slow economic growth, which the rates followed.

    ?What every first time home buyer should know

    So what should the first time homebuyer do?  Be prepared!  Education and planning is the key and remember to get help.  Consult your Realtor for advice even if you don't believe you are ready to buy yet.  Here are Do's and Don'ts to follow:

    Do:

    Save your money now while you are planning.  Save money now and don't wait.  Most first time homebuyers are using FHA loans becasue they only need a 3.5% downpayment, but also remember you will also need money for closing costs and pre-paid items such as homeowner's insurance. 

    Gather a team you trust.  Assemble a professional team to get you through the technicalities of home buying.  Start with finding a Realtor. Interview this person to make sure they are knowledgable and that you feel comfortable with them.  Then your Realtor can help you to continue to build your team to include a mortgage specialist and then later a home inspector and title company.  Ask around for referrals and meet with them in advance so that you are comfortable relying on their advice when you need it most.

    Know what you can afford.  Only you with the help of your Realtor and lender can properly determine what you can afford.  Mortgage standards are still constantly changing and your bank or mortgage company of choice can help you keep up with the most recent requirements.  They will also run your credit report.  A good mortgage specialist will not only let you know if your credit is up to standards, but also give you suggestions to get you ready if it is not.  You want a credit score minimum of 640, but the higher the better.

    Choose the right option for you.  After you know what you can afford, narrow down your search by figuring out what type of home suits you best.  Ask yourself questions such as do you want: a house or a condo?  A new home or older home?  Is more square footage worth a longer commute?  Are you looking to renovate or move right in?  In the city or a smaller community?  You may also want to drive around in the towns your are considering to find the neighborhoods you like and will feel comfortable in.


    Don?t:

    Skip the home inspection. You may know a handy guy, but the best way to see if your dream home will turn into a nightmare is by having, before you purchase your home, a home inspector identify any potential problems and determine whether or not any upgrades need to be made.

    Buy more than you need.  Even if you can afford a more expensive home, choosing one that you love at a lower price point allows you to keep some breathing room in your budget. A fourth bedroom that you never use is just another room to clean and heat!


     
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    NOLA Westbank Housing Market Stats 2010 vs 2009 - How Did We Start 2011 ?

    On the Westbank, we started January 2011 with similar number of listings on the market as January of 2009 & 2010.  Number of Sales, for the month of January, are slightly higher with 84 solds in 2011 compared to 77solds in 2009 and 74 in 2010.  Sellers appear to becoming more realistic in asking price with the overall average listing price in January 2009 at $196,247 to $188,174 in January 2010 until now in January 2011 at $169,366. 

    Although, the average listing price of the homes that actually sold were still much lower as the chart below shows comparison of January 2009, 2010 and 2011:

    (Click on any chart below to enlarge)



    This table below compares statistic totals for all of 2009 to 2010? for Single Residential Homes on the Westbank:

    This chart above shows in % the following:
    • Only ? 1.5% # Listings in 2010 over 2009?
    • Average Listing Price of All Listings ? 9.3% 2010 over 2009
    • # Sales ? 8.6% 2010 over 2009
    • Average Listing Price of Sold Listings ? 5.9% 2010 over 2009
    • Average Actual Sold Price? 6.2% 2010 over 2009
    • DOM (Days on Market) ? 7.4% 2010 over 2009
    The overall inventory of homes on the market, measured in number of months, were very similar in 2010 @15 months to 2009 @ 14 months.

    The following charts show the month to month comparisons of statisitcs for Single Residential Home Listings and Sales on the Westbank:
     
     
     
     
     

    Overall, it appears buyers are continuing to be very cautious, and spending at an average less on a home than in the past.  Therefore, the lower priced homes are selling the fastest and overpriced homes don't have a very good chance of selling...  although, the market still continues to stablize.  It is predicted by many experts that an abundance of foreclosures are going to be dropped into the market later this year and that another wave of mortgage tightening in on it's way.  If this is the case, and you have been waiting for the right time to sell a home, now is the time to do so.


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    Why Is It Important For Buyers To Get Pre-Approved First?/ Common First Time Homebuyer Mistakes
    Buyers often wonder WHY they need to get pre-approved for a home loan and here are my top four reasons:

    1. Not all Buyers qualify for a home loan, or they may be approved for a much smaller amount than anticipated.   I've had clients come to me and say I can afford X amount a month and according to the mortgage calculator online I can spend X amount on my purchase. Unfortunately what you can afford and what your lender will loan you are two different stories.

    2. To make sure you how much home you can afford.   When getting pre-approved by a lender they will not only go over which loan programs you qualify for, but they will also give you an estimated monthly mortgage payment and closing costs based on your approved loan amount. With this information you can then decide how much of a home you can afford.

    3. The Seller wants to see proof.   A majority of sellers in today's real estate market won't even entertain offers that are not accompanied by a Pre-Approval Letter or, if paying cash, Proof of Funds. By providing a pre-approval letter with your offer the seller will know you are not only a serious buyer, but a ready, willing and able one.

    4. You need to know the terms of your offer.   When writing an offer you must know the terms you will be offering; the loan program you are choosing, how fast you or your lender can close along with whether or not you need/want seller contributions. Say your estimate for closing costs is around $10,000, but after your down payment you only have $3,000 left to spare. That means you will need to ask the seller to contribute $7,000 towards your closing costs in order to have enough to purchase their home. Seller contributions are not negotiated after you are under contract on a home, this is done during negotiations.


    Looking at homes prior to getting pre-approved for a home loan is like putting "the cart before the horse." There are several steps to the home buying process and this is why you need to have a good Realtor.  When you need assistance, Give me a Call...

    __________________________________________________________________________________________________________
    5 Common First-Time Home Buyer Mistakes

    1.  They don?t ask enough questions of their lender and end up missing out on the best deal.

    2. They don?t act quickly enough to make a decision and someone else buys the house.

    3. They don?t find the right agent who?s willing to help them through the homebuying process.

    4. They don?t do enough to make their offer look appealing to a seller.

    5. They don?t think about resale before they buy. The average first-time buyer only stays in a home for four years.



    Source: Real Estate Checklists and Systems


    If you are a qualified Homebuyer, now is the time to look for your dreamhome.  Read this Article to find out why: Real Estate Trends for 2011

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    Foreclosure Resource Guide - Buying A Home Again After A Foreclosure?
    Last week we discussed how foreclosures are still on the rise, the affects on the community and how a Short Sale can be an alternative for a homeowner.  But what about those who have been through a Foreclosure?   When can they buy a home again?


    Your credit score will take a major hit after a foreclosure, but there are guidelines to follow when you're ready to be a homeowner again.  If credit is reestablished after the foreclosure, and depending on the type of loan you will use to buy your next home, it can take between 3 - 7 years to be accepted for a home loan.  In the link below, you will find a chart which will outline the present standards set by FHA, Freddie Mac and Fannie Mae for the wait time on these loan types for those who have gone through Foreclosure, a Short Sale, or Bankruptcy.  With discipline and perseverance, you can again be in a position to obtain a home loan. The next link below will give you a 5 step guideline on how to reestablish your credit and become a homeowner again.

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    Handling the Foreclosure Crisis
    Foreclosures are still on the rise. On January 13, 2011 City Business reported that the New Orleans area had the 95th highest foreclosure rate in 2010 among 203 markets tracked nationwide. Foreclosure activity was up 36.25 percent over 2009 in the area comprised of Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. James, St. John and St. Tammany parishes. There were 7,822 filings for a foreclosure rate of one in every 57 housing units.

    If you or someone you care about are one of the many homeowners worried about this happening to you, are you asking yourself, "Where do I turn for help?"  First let me say that there is nothing to be embarrassed about and there are many other people in your position.  You need to seek help now before the problem gets worse.  Most people are afraid to turn to their local Realtor because they think they will have to pay money out of pocket that they don't have.  What they don't realize is that an experienced Realtor in the area of Short Sales and Foreclosure can actually help them, and most of the time without the homeowner spending any extra money.  You can talk to your Realtor to find out if a Loan modification is best for you, or if selling your home would be best.  They can show you what questions to ask your Mortgage Company, or in some cases with your authorization, talk to them for you.

    Maybe you are not the one facing foreclosure but worried because it is happening all around you.  Below are several links to more resources to guide you.  This will explain more on how to talk to your Mortgage Company, what a short sale is and how this may help you.  If you are a homeowner in a neighborhood with foreclosures, you may want to read up on how this will effect you. 

    Our next Blog will be the next Chapter on Foreclosures to continue this Foreclosure Resource Guide.  So please tune in...

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    FIRST TIME HOMEBUYER INCENTIVES & 7 STEPS FOR HOMEBUYING
    7 Steps to Take Before You Buy a Home 
    First Time Homebuyers are often a little worried about getting started in the process of buying a home and don't know what to do first.  Below are 7 steps that most experts would agree on, and having a Realtor you trust to walk you through these steps is proven to be very helpful.  By doing your homework before you buy, you?ll feel more content about your new home.  Having a good Realtor on your side looking out for you can be an important key- but for a first time homebuyer...  Priceless
     

    1. Decide how much home you can afford
    Generally, you can afford a home priced 2 to 3 times your gross income. Remember to consider the necessary homeowner costs which must be covered: property taxes, insurance, maintenance, utilities, and community association fees, if applicable.


    2. Develop your home wish list
    Be honest about which features you must have and which you?d like to have.  Remember, this is your first home, and you may be able to work up to those like to haves the next time, but you need to be able to make payments on this one first.



    3. Select where you want to live
    Drive through the neighborhoods you think you may be interested in.  You may want to make a list of your top-five community priorities, such as commute time, schools, and recreational facilities.

    4. Start saving
    Have you saved enough money to qualify for a mortgage and cover your downpayment?  Even though ideally you should have 20% of the purchase price set aside for a downpayment, an FHA loan only requires 3.5% downpayment which can be a lot easier for a first time homebuyer to obtain.  A small downpayment preserves your savings for emergencies and you will still need to consider closing costs.
    But Remember...   The lower your downpayment, the higher the loan amount you?ll need to qualify for, and the higher your monthly payment.


    5. Ask about all the costs before you sign
    A downpayment is just one homebuying cost. Your REALTOR® can tell you what other costs buyers commonly pay in your area?including home inspections, title and attorneys? fees. Keep in mind the extras you?ll also want to buy after you move-in, such as window coverings and new furniture but don't buy these until you are closed on your new home.


     
    6. Get your credit in order
    Your REALTOR® can help suggest several mortgage representatives to find out how your credit stands and you can pick the one you feel most comfortable with.  You can also order your credit report directly - You?re entitled to free copies of your credit reports annually from the major credit bureaus: Equifax, Experian, and TransUnion.  A credit report details your borrowing history, including any late payments and bad debts, and typically includes a credit score. Lenders lean heavily on your credit report and credit score in determining whether, how much, and at what interest rate to lend for a home. Most require a minimum credit score of 620 - 640 for a home mortgage.


     7. Get prequalified
    Meet with a lender to get a prequalification letter that says how much house you?re qualified to buy. Start gathering the paperwork your lender says it needs. Most want to see W-2 forms verifying your employment and income, copies of pay stubs, and two to four months of banking statements.
    If you?re self-employed, you?ll need your current profit and loss statement, a current balance sheet, and personal and business income tax returns for the previous two years.

    Other web resources are listed in link below in the Homebuyer Training Voucher Program under Cerified Home Buying Training Agencies.

    Get a free credit report from each of the three credit reporting bureaus


    HOMEBUYER TRAINING VOUCHER PROGRAM


    There is first time homebuyer training out there which can not only give you the training you need to make good homebuying decisions, but can also offer you the opportunity to take advantage of other first time homebuyer incentives.  This course normally costs between $50 - $80.

    Would you like to take take the course for FREE!

    For a limited time, as my client you can take advantage of the Home buyer Training Voucher Program for free!

    This is how it works: First we will meet for a Buyer's interview and we will discuss your homebuying goals.  There is no charge for this meeting or to hire me as your Realtor.  Once you become my client, you will go to any Certified Home buyer Training Agency and pay for the course up front. Then we will send in a voucher application for you.  After your application is received, you will be reimbursed the entire course fee within 30 Days. Its as simple as that!  But Hurry - Funds are limited and will be disbursed on a first come first serve basis.  You may want to check out the websites of some of these agencies and see what incentives some of these have to offer.  Please click on link below to find the agency you prefer: 




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    WESTBANK SINGLE HOME SALE STATS AS OF OCTOBER 2010





    See charts below for Westbank Single Family Home Statistics and compare 2009 numbers to 2010 as of October (Click each Chart to Enlarge):








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    Dos & Don't of Selling Your Home
    Many people think that selling a home is easy.  All you have to do is put a sign in the front yard and wait for people to call.  The fact of always being available for phone calls and that many calls are from people that are just being nosy is not considered.  Neither is all the paperwork involved and legal issues that they are leaving themselves wide open for.  Selling your own home can become your part-time job that needs your full time attention.  Having a Real Estate Agent has many more advantages than you might think and actually save you money instead of costing you more.  Most people selling their home on their own have no idea how to price their home or how to keep up with price checks in the current market.  Buyers see these homes as "Discounted Properties" instead of a regular listing, therefore, you could actually make less selling your own property than if you paid for professional help.  Your local Real Estate Agent can give you up to date information on comparable homes as well as insight on what you need to do to get your home ready for the market...    and also much more. 
    A good Realtor can save you much time, money and stress in selling your home.
     
    If you are selling yourself, or even if you have an agent, you still want to be aware of what buyers are thinking about your home and how you can win them over.  Most buyers will not be as honest with a homeowner than they would with a Realtor.  Below are links to 3 articles written for House Logic that give more information on dos and don'ts of selling your home, as well as pricing.  If you still need help, give me a call.




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    Southshore Home Sale Statistics & Homeowner Advantages
    How are Home Sales on the Southshore this year compared to last year?  Let's go over some facts before finding out.  Everyone is worried about the economy now days.  So much so that some very qualified Buyers are afraid to take advantage of the lowest interest rates in years and some very low home prices.  The fact remains that this will not last forever and if you are one of the people with a steady job, good credit, with the need or desire for a new home, it is time to seize the market!  Don't believe you can afford a home?  Don't know if your credit is good enough?  Well, what will it hurt to find out!  Here is a link to my list of preferred lenders - you can call one of them to find out if you are ready now, or if not, how far are you from getting there and what to do: CLICK Here for MORTGAGE LIST

    First, let's look at the statistics.  Most of the statistics I've been posting are for the Westbank, but this time I will give you the Home Sale numbers for the whole Southshore (Click on Chart below to enlarge for Detail):


    It appears that as the tax credit incentive disappeared, so did buyers.  Soon after we started out the year, we were above last year's numbers, but we have been going more down hill ever since July.

    There are still plenty reasons to buy a home now.  With interest rates being at an all time low, buying now will put more money in your pocket than if you wait to buy later when rates shoot up.  Click Here to find out Why this is a Great Time to Buy a Home. 

    Read this article below to find out about Homeowner tax advantages:
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  • 7 Homeowner Tax Advantages

    When you?re evaluating how much home you can afford, make sure you factor in the tax advantages of homeownership. Read



  • Below are more articles for your information on tips to improve your credit and determining how much home you can afford:



    Remember, If you have any questions about any information provided here or if you need to weigh your options, feel free to give me a call.  I am here to help.

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    Is It Time To Make Repairs in Your Home... Or Just Replace the Items?
    When Plumbing, Heating, Roofing problems exist in your home, or when any large appliance fail, it can be a very heavy load on your mind as well as your checkbook.  You don't want to go through the expense of replacing if you can spend a lot less money to fix the problem and it will not break again for some time. So should it be replaced or repaired?  How do you know?

    Below are informational links from HouseLogic to explain how you can decide.  These articles were written by experts who can guide you through to make good decisions:
    Copyright 2010 NATIONAL ASSOCIATION OF REALTORS®




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    Successful Homebuying
    Buying a home doesn't have to be so stressful.  Having the right Realtor on your side to not only help with finding the right home for you, but successfully help you to complete your purchase is the key.  Here at NOLA Westbank Homes, I am committed to providing my Buyers and Sellers with up to date and accurate information to help them every step of the way.

    Below you will find several articles provided by House Logic and the National Association of Realtors that will do just that.

    Not sure if this is the right time to buy your new home?  This link will bring you to a brochure to help you know if this is the right time for you:  7 Reasons Why Now Is A Great Time To Buy A Home
    Visit houselogic.com for more articles like this.
    Copyright 2010 NATIONAL ASSOCIATION OF REALTORS®
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    WESTBANK HOME SALE STATS AS OF AUGUST 2010
    Statistics as of August 2010:





    ?Announcement:
                    New Orleans Westbank Realty Team has a new name.  We have re-structured and are now NOLA WESTBANK HOMES     But...  Our Blog name will stay the same.

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    National Housing Trends

    June housing sales were up for the 10th month in a row as closed units were up 11.4 % over June 2009 while prices climed 8.8% for the same period.  All regions of the country were up in both units closed and average prices.  The main reasons are believed to be the continued impact of the tax credit and low interest rates.
    In both our region here in the South and the Midwest, June 2010 housing units rose 8.5% over June 2009.  The highest increase is in the Northeast which rose 28.3% over June 2009, the strongesat results for any region for the sixth consecutive month.

    The increase in housing sales for the 10th month in a row where housing sales for the present month were above the same month from the prior year; and price increases just hit their 7th month in a row on the same basis.  Housing sales for the entire year are expected to be above the level of 2009 in the range of 4-7% even with a decline in this year's second half.  Home prices will continue to strengthen for at least the next three months but may level out thereafter.  The upper price end  of most housing markets remains soft at this time with no significant recovery in sight at this time.

    Below are charts with more information graphs showing Home Sale trends including Housing Inventory, Mortgage Rates and Affordability nationwide:






    In my post to come I will give you an update of the local housing sale statistics.

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    Smart Kitchen Remodeling
    Most people realize that the Kitchen and Bathrooms are generally the 2 areas of the home that make a big difference when it comes to selling your home and can cost you the most money...
    And if you bought your home at a discount so that you can fix these areas up for yourself to your liking, the articles I gathered below will be sure to help.

    Since I was not here last week to blog (I was on vacation), I thought that I would gather a few articles this week to make up for the time lost...

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    6 Reasons to Reduce Your Home Price
    While you?d like to get the best price for your home, consider our six reasons to reduce your home price.

    If you don't receive any offers for a few weeks, check out other comparable houses on the market and what they're going for.

    Home not selling? That could happen for a number of reasons you can?t control, like a unique home layout or having one of the few homes in the neighborhood without a garage. There is one factor you can control: your home price.


    These six signs may be telling you it?s time to lower your price.

    1. You?re drawing few lookers

    You get the most interest in your home right after you put it on the market because buyers want to catch a great new home before anybody else takes it. If your real estate agent reports there have been fewer buyers calling about and asking to tour your home than there have been for other homes in your area, that may be a sign buyers think it?s overpriced and are waiting for the price to fall before viewing it.

    2. You?re drawing lots of lookers but have no offers

    If you?ve had 30 sets of potential buyers come through your home and not a single one has made an offer, something is off. What are other agents telling your agent about your home? An overly high price may be discouraging buyers from making an offer.

    3. Your home?s been on the market longer than similar homes

    Ask your real estate agent about the average number of days it takes to sell a home in your market. If the answer is 30 and you?re pushing 45, your price may be affecting buyer interest. When a home sits on the market, buyers can begin to wonder if there?s something wrong with it, which can delay a sale even further. At least consider lowering your asking price.

    4. You have a deadline

    If you?ve got to sell soon because of a job transfer or you?ve already purchased another home, it may be necessary to generate buyer interest by dropping your price so your home is a little lower priced than comparable homes in your area. Remember: It?s not how much money you need that determines the sale price of your home, it?s how much money a buyer is willing to spend.

    5. You can?t make upgrades

    Maybe you?re plum out of cash and don?t have the funds to put fresh paint on the walls, clean the carpets, and add curb appeal. But the feedback your agent is reporting from buyers is that your home isn?t as well-appointed as similarly priced homes. When your home has been on the market longer than comparable homes in better condition, it?s time to accept that buyers expect to pay less for a home that doesn?t show as well as others.

    6. The competition has changed

    If weeks go by with no offers, continue to check out the competition. What have comparable homes sold for and what?s still on the market? What new listings have been added since you listed your home for sale? If comparable home sales or new listings show your price is too steep, consider a price reduction.

    More Helpful Advice:

    How to ready your home for sale at little cost

    How to review offers on your home

    G.M. Filisko is an attorney and award-winning writer who made strategic price reductions that led to the sale of a Wisconsin property. A frequent 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.

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    Keep Your Home Sale from Falling Apart


    If something falls apart before a home sells, the sellers are responsible for fixing it.


    Finding a buyer for your home is just the first step on the homeselling path. Tread carefully in the weeks ahead because if you make one of these common seller mistakes, your deal may not close.


    Mistake #1: Ignore contingencies

     

    If your contract requires you to do something before the sale, do it. If the buyers make the sale contingent on certain repairs, don?t do cheap patch-jobs and expect the buyers not to notice the fixes weren?t done properly.

    Mistake #2: Don?t bother to fix things that break

     

    The last thing any seller needs is for the buyers to notice on the pre-closing walk-through that the home isn?t in the same condition as when they made their offer. When things fall apart in a home about to be purchased, sellers must make the repairs. If the furnace fails, get a professional to fix it, and inform the buyers that the work was done. When you fail to maintain the home, the buyers may lose confidence in your integrity and the condition of the home and back out of the sale.

    Mistake #3: Get lax about deadlines

     

    Treat deadlines as sacrosanct. If you have three days to accept or reject the home inspection, make your decision within three days. If you?re selling, move out a few days early, so you can turn over the keys at closing.

    Mistake #4: Refuse to negotiate any further

     

    Once you?ve negotiated a price, it?s natural to calculate how much you?ll walk away with from the closing table. However, problems uncovered during inspections will have to be fixed. The appraisal may come in at a price below what the buyers offered to pay. Be prepared to negotiate with the buyers over these bottom-line-influencing issues.

    Mistake #5: Hide liens from buyers

     

    Did you neglect to mention that Uncle Sam has placed a tax lien on your home or you owe six months of homeowners association fees? The title search is going to turn up any liens filed on your house. To sell your house, you have to pay off the lien (or get the borrower to agree to pay it off). If you can do that with the sales proceeds, great. If not, the sale isn?t going to close.
    After finding a buyer, all you have to do to make it to closing is to avoid these five traps.



    Information obtained By:
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    Create a Home Emergency Preparedness Kit
    Having a home emergency preparedness kit could be the key to your family?s safety if disaster strikes.




    Garage doors are particularly susceptible to storm damage. Learn how to reinforce garage doors before a storm hits. Additional home improvement videos can be found at DannyLipford.com.

    Preparing a home emergency preparedness kit you hope never to use may seem like a waste of time and money. But when disasters happen that are beyond your control, you can take charge of how you respond. ?What became clear in Hurricane Katrina is that in big events, the government isn?t going to come to your aid right away. You have to be prepared to take care of yourself,? says Rick Bissell, PhD, a professor of emergency health services at the University of Maryland, Baltimore. According to a 2008 FEMA survey, more than half of all U.S. households have some sort of disaster preparation in place. If yours isn?t one of them, here?s what you need to do.



    First, make sure important papers are in order

     

    If a flood destroys your home, you could spend weeks or even months just trying to re-create the essential documents you?ll need to get back on track. That?s why it?s critical to have backups of important papers, including the deed to your house, proof of insurance, medical records, passports, social security cards, and a list of personal contacts. Keep one copy at home in a portable case and another offsite in a safe place. And while you?re at it, use the opportunity to check whether your insurance is up to date. ?People often don?t know what their homeowners? insurance policy covers, and most don?t cover flooding,? points out Bissell. Find out what hazards your area faces, and make sure you?re protected against them.



    Tailor a preparedness kit to your personal needs

     

    Humanitarian organizations and government aid agencies offer guidelines for creating an emergency preparedness kit. But along with the basics like food and water, it?s important to have what you need for your particular situation. You may not need extra blankets in southern California, but you do need escape ladders in case of wildfire. And you?ll want extra extra blankets to survive a winter power outage in Maine.
    Think about what you need for the safety of your house, too. Knowing where to find the main electrical and water shutoffs?and having the right wrench to turn them?can make the difference between a house that weathers the storm and one that experiences catastrophic flooding or fire.



    A basic emergency preparedness kit

     

    FEMA recommends you keep a ?grab and go? bag with these items in case you need to evacuate:
    Water: One gallon per person per day for at least three days, for drinking and sanitation; double if you live in a very hot climate, have young kids, or are nursing. Bottled water is best, but you can also store tap water in food-grade containers or two-liter soda bottles that have been sanitized. Factor in your pet?s water needs, too.
    Food: At least a three-day supply of nonperishables and a can opener. Pack protein, fruit, and vegetables, but make sure they?re in a form you actually like?it?s bad enough not to have access to fresh food without also having to subsist on nothing but canned tuna. Include treats like cereal bars, trail mix, and Tootsie Rolls. Store food in pest-proof plastic or metal tubs and keep it in a cool, dry place.
    Flashlights and extra batteries: ?Candles are not recommended because there are many house fires caused by candles left unattended,? says David Riedman, a public affairs officer with FEMA.
    First-aid supplies: Two pairs of sterile gloves, adhesive bandages and sterile dressings, soap or other cleanser, antibiotic towelettes and ointment, burn ointment, eye wash, thermometer, scissors, tweezers, petroleum jelly, aspirin or non-aspirin pain reliever, and stomach analgesics such as Tums, Pepto-Bismol, and a laxative. (All those Tootsie Rolls can be hard to digest.)
    Sanitation and hygiene supplies: Moist towelettes, paper towels, toilet paper, garbage bags, and plastic ties. You might also want travel-size shampoo, toothpaste/toothbrush, and deodorant.
    Radio or TV: Keep a portable, battery- or crank-operated radio or television and extra batteries to remain connected in case the power goes out, as well as an extra cell phone charger. You can buy a good emergency radio online from the Red Cross.
    Plastic sheeting, duct tape, and dust masks: In case you need to seal your home or shelter from airborne contaminants.
    Extra items: A whistle to signal for help, a favorite toy or other comfort items for kids.
    Cash.
    Update your kit as your needs change, and replace food and water approaching its expiration date. You might pick a specific time each year to check, such as before hurricane season in the south or after Thanksgiving if you live in the north.
    Wendy Paris is a New York-based writer whose work has appeared in This Old House magazine and other publications. She keeps chocolate chips on hand in case of emergency.

    Video provided by Today?s Homeowner host, Danny Lipford.
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    4 Tips to Determine How Much Mortgage You Can Afford

    By knowing how much mortgage you can handle, you can ensure that home ownership will fit in your budget.

    Here are six surefire ways you can get your finances in order before you buy a home.


    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.

    Instead of just taking out the biggest mortgage a lender qualifies you to borrow, consider how much you want to pay each month for housing based on your 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?

    Still not sure how much you can afford? You can use the same formulas that most lenders use, or try another of these traditional methods for estimating the amount of mortgage you can afford.

    1. The general rule of mortgage affordability

    As a rule of thumb, you can typically afford a home priced two to three times your gross income. If you earn $100,000, you can typically afford a home between $200,000 and $300,000.

    To understand how that rule applies to your particular financial situation, prepare a family budget and list all the costs of homeownership, like property taxes, insurance, maintenance, utilities, and community association fees, if applicable, as well as costs specific to your family, such as day care costs.

    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 costs hundreds. 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.

    3. Consider your overall debt

    Lenders generally follow the 28/41 rule. Your monthly mortgage payments covering your home loan principal, interest, taxes, and insurance shouldn?t total more than 28% of your gross annual income. Your overall monthly payments for your mortgage plus all your other bills, like car loans, utilities, and credit cards, shouldn?t exceed 41% of your gross annual income.

    Here?s how that works. If your gross annual income is $100,000, multiply by 28% and then divide by 12 months to arrive at a monthly mortgage payment of $2,333 or less. Next, check the total of all your monthly bills including your potential mortgage and make sure they don?t top 41%, or $3,416 in our example.

    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, consider what amount would be comfortable and use that for the calcuation instead.

    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.

    Adopted from Information Provided By: G. M. Filisko

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    7 Tips for Improving Your Credit
    Paying off credit card balance via computer



    Here?s how to clean up your credit so you get the least-expensive home loan possible.
    Getting the loan that suits your situation at the best possible price and terms makes homebuying easier and more affordable. Here are seven ways to boost your credit score so you can do just that.

    1. Know your credit score

    Credit scores range from 300 to 850, and the higher, the better. They?re based on whether you?ve paid personal loans, car loans, credit cards, and other debt in full and on time in the past. You?ll need a score of at least 620 to qualify for a home loan and 740 to get the best interest rates and terms.
    You?re entitled to a free copy of your credit report annually from each of the major credit-reporting bureaus, Equifax, Experian, and TransUnion. Access all three versions of your credit report at www.annualcreditreport.com. Review them to ensure the information is accurate.

    2. Correct errors on your credit report

    If you find mistakes on your credit report, write a letter to the credit-reporting agency explaining why you believe there?s an error. Send documents that support your case, and ask that the error be corrected or removed. Also write to the company, or debt collector, that reported the incorrect information to dispute the information, and ask to be copied on any materials sent to credit-reporting agencies.

    3. Pay every bill on time

    You may be surprised at the damage even a few late payments will have on your credit score. The easiest way to make a big difference in your credit score without altering your spending habits is to diligently pay all your bills on time. You?ll also save money because you?ll keep the money you?ve been spending on late fees. Credit card or mortgage companies probably won?t report minor late payments, those less than 30 days overdue, but you?ll still have to pay late fees.

    4. Use credit carefully

    Another good way to boost your credit score is to pay your credit card bills in full every month. If you can?t do that, pay as much over your required minimum payment as possible to begin whittling away the debt. Stop using your credit cards to keep your balances from increasing, and transfer balances from high-interest credit cards to lower-interest cards.

    5. Take care with the length of your credit

    Credit rating agencies also consider the length of your credit history. If you?ve had a credit card for a long time and managed it responsibly, that works in your favor. However, opening several new credit cards at once can lower the average age of your accounts, which pushes down your score. Likewise, closing credit card accounts lowers your available credit, so keep credit cards open even if you?re not using them.

    6. Don?t use all the credit you?re offered

    Credit scores are also based on how much credit you use compared with how much you?re offered. Using $1,000 of available credit will give you a lower score than having $1,000 of available credit and using $100 of it. Occasionally opening new lines of credit can boost your available credit, which also affects your score positively.

    7. Be patient

    It can take time for your credit score to climb once you?ve begun working to improve it. Keep at it because the more distance you put between your spotty payment history and your current good payment record, the less damage you?ll do to your credit score.




    Other web resources

    Please note that we recently obtained permission to publish information in articles obtained by NAR - National Association of Realtors.  The above was one of these such articles and this information was published by them with the name of HouseLogic.© Copyright 2010 NATIONAL ASSOCIATION OF REALTORS
     How FICO scores are calculated
    &
    Answers to frequently asked credit report questions
    Image: Rob Daly/OJO Images/Getty Images

    G.M. Filisko is an attorney and award-winning writer who keeps a close eye on her credit scores. A frequent 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.
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