Secret #7 To save $$$ when buying

Get informed ahead of time and...

Lastly, it's important to get financially informed and ready before actually starting to look at homes. Knowing how much you can afford is crucial in getting fitted with the right home. Finding the perfect home and then finding you can't may the payments without becoming house-poor is very disappointing at the very least. Given the cost of gasoline today its in everybodies interest to limit looking to the right price range.

Also, compare your reasons for moving
- needing larger home due to family growth
- needing to downside due to empty nest
- relocation to different area
- job change

What type of home works best? What are the current real estate trends?

After carefully weighing the needs of you situation, and your financing picture, there is one more important step. Select an experienced Realtor to represent your needs.

Our extensive and ongoing training is aimed to providing only the best service to all our clients.
A dedicated Realtor can provide great assistance throughout the entire home buying process from original thinking thru moving in, and beyond. Remember, the realtor's services are always free to you the buyer (at least for me), since the seller provides payment for our services through the listing agency. Having someone to represent you through the somewhat complex home buying process is a win-win situation.

I hope this series on saving money when financing and buying has been helpful. Please contact me at (800)643-7752 or don@dbullis.com if I can be of any assistance.

Secret #6 To save $$$ when buying

The keyword is become informed and compare- Look at several lenders programs and rates.

Just as most buyers wouldn't buy a home after looking at just one, so should you be objective when placing a mortgage. Also, steer of any lender who wants money up front (before actually submitting an application after selecting home and having a contract).

No reputable mortgage broker or lender should ask for money just to give Pre-Approvals. Admittedly, all hope to get your loan business which is correct, but in my experience, competion is the best vehicle to ensure getting the most "bang for your buck".

Lastly, each lender has at least several loan products and selecting the right one for you should not be left up to the mortgage agent. Also, Mortgage brokers vs. Banks, etc. might be advantageous, since they are free to shop for the best products.

Secret #5 To save $$$ when buying

There are Questions You should Ask all Mortgage Lenders.

By taking a few minutes to understand how the “game” works, you can save yourself thousands of dollars, and get a loan that best fits your personal situation. But we’re not done yet. It’s now time to meet with your lender, or lenders, face-to-face.

Now he or she is going to ask you a lot of questions in order to better your situation and find the loan package that works best. In order to compare lenders you might also ask questions as well, such as:

1. What types of loan program options do I have and how do they compare?
2. Will I be charged separate discount points? If so, how much?
3. Will I be charged a separate document preparation fee? How much is it?
4. Will I be charged a separate underwriting fee?
5. Will there be additional fees at closing? What is the total of all these costs?
6. Is there a Lock Period with this loan? If so, how long?
7. What will my annual percentage rate be with this loan?

Remember, you have a right to this information, and mortgage lenders will answer these questions without hesitation. Also, in Delaware lenders provide a Good Faith Estimate which should will cover most of these questions. Never feel that you’re imposing on them.

Secret #4 To save $$$ when buying

Know important loan terms

OK, so you’ve decided you know how much you want to put down on a home. You need an understanding of some loan terms and how they affect your loan. Your lender will likely discuss these with you in their "Loan Good Faith Estimate", but if not don't hesitate to ask.

ORIGINATION FEE. Watch out here! This is what most mortgage companies charge to “originate” your loan. And it’s pure profit for the mortgage lender. The traditional fee is 1% of your total loan amount. If it is more than 1% you need to know why.

LOCK PERIOD. Watch out here as well! Make certain you know what your lender is quoting you! The lock period is the period of time that a quoted interest rate/discount point combination can be guaranteed. The shorter the lock period, the lower the rates. If you’re quoted a 15 day lock, make sure you can close your loan in 15 days, otherwise if market rates to up, you’ll be subject to a higher rate loan at closing.

JUNK FEES. Pay attention here! Junk fees are all of those small items, such as warehouse fees, document preparation fees and messenger services, flood fees, tax service fees, administration fees, processing fees, underwriting fees, etc., that most lenders add on to their origination fees. Some mortgage lenders mark these fees up to generate extra profit. Make certain you find out what fees you’ll have to pay – and make certain they’re not marked-up!

APPRAISAL AND CREDIT REPORTS. Warning! Make sure these outside services are not marked-up by your lender. Appraisal and credit reports are provided by outside vendors and are usually standard in each market. Other costs are also standard, including insurance and tax impounds; termite inspections; and title, escrow, and recording fees. These expenses are NOT part of the cost of the loan itself and should not figure into your mortgage lender decision.

Secret #3 To save thousands when buying a home

Understand The Basics Of Home Financing

Your ability to afford a home will be related to a number of items. They are:

1. The PRICE of the home.
2. Your DOWN PAYMENT on your home, and thus the amount financed.
3. The INTEREST RATE
4. The TERM of your loan: 10 year, 15 year, 30 year.
5. The overall TYPE of your loan: Most common is fixed vs. variable rates, but there are
typically numerous of loan programs to choose from.

And just in case you were looking for a specific “rule of thumb” for financing your home, you should know that…There Are NO reliable General Rules Of Thumb About Financing Your Home. Each case is different, and your personal financial circumstances will have an impact on how much home you can afford.

However, you MUST understand the relationship and impact interest rates, term of loan, and type of loan can have on your overall financial picture.

How Interest Rate and Term can make or COST you thousands.

Mortgage lenders toss around interest rate numbers as if it doesn't matter.

They DO! And to illustrate the impact interest rates can have on your overall financial picture, The table below showes the interest you pay over the term of a 30-year, $150,000 loan at 8%, 7% and 6%.

Your banker might tell you his “slightly higher rate” is only a matter of $103 a month in payment. But YOU should know better! Take a look at the table below…

Loan Amount $150,000 $150,000 $150,000
Interest Rate 8% 7% 6%
Monthly Payment $1,101 $998 $899
Total Interest Paid $246,233 $209,263 $173,757
Savings -- $36,970 $72,476

That’s money taken out of your pocket if you don’t look for good rates! And if you think interest rate has an impact on your overall financial picture, take a look at what modifying the TERM of your loan can do…Here’s another example of a $150,000 loan at 7% interest. But this time, we examine the total interest paid when you select a 30 year vs. a 15 year vs. a 10 year amortization…

Term 30 Year 15 Year 10 Year
Interest Rate 7% 7% 7%
Monthly Payment $998 $1,348 $1,742
Total Interest Paid $209,280 $92,640 $59,040
Savings -- $116,640 $150,240

The “bottom line?”
Estimate the maximum amount of payment you can afford, and adjust TERM and INTEREST RATE of your loan to minimize the amount of total interest you’ll pay.

But then your banker cuts in and says, “but the interest you pay is Tax Deductible…” And you should know this: If you’re in the 28% tax bracket, for every dollar in interest you pay, you only save 28 cents. Don’t go spending a dollar to save 28 cents if you can help it!

Secret #2 To save thousands when buying a home

Many people go about the home finding process backwards. They go through the entire process of searching, evaluating, and writing an offer on their home, WITHOUT being financially prepared; And it usually costs them money. A lot of money!

Doing a few things up front, BEFORE you go searching, will save you a lot of money, time, and hassles. What are those things?

First, find a MOTIVATED lender.

No, don’t just go down to your local bank where you’ll likely to be slowly tortured by bureaucracy and paperwork. Your banker may be a good friend for your checking, savings and perhaps an auto loan. But most bankers are not motivated to work hard to earn your real estate business (although some are changing their ways).

That’s because one of the quotas bankers have to live by is: “How many BAD loans did you originate?”

They don’t get measured by their production…

They don’t get measured by their service…

They only get measured by the MISTAKES THEY AVOID!

Now, I know if your local banker sees this, he’s going to cringe a bit, and start reciting all the ad campaign jargon most banks are spouting these days. But the truth is…

There Is Absolutely NO Incentive For A Traditional
Banker To Serve Your Best Interests…

What you want to do is find a mortgage lender who is MOTIVATED to take your loan. One who represents many different products, and can offer you many options for making your loan most affordable.

Here’s an important tip: Ask your REALTOR® to refer one or two lenders to you. Why? Because your agent has influence over lenders because they send lots of clients. It’s not just YOU alone talking to them.

If they don’t give you first class service, the REALTOR® who sent you will refer (ALL) their clients to someone else. So they’re motivated to SERVE YOU. And the minute you have a problem with your loan, you can turn to your REALTOR®…who has much more influence and leverage over the lender than you alone.

After all, your REALTOR® and lender both want to see the transaction close. There’s power in numbers and influence. Use it to your advantage.

Now, the second thing you want to do is GET PRE-QUALIFIED with a lender. Better yet, try to get PRE-APPROVED.

Why? Because the first question any home seller will ask when an offer is presented is “Is your buyer approved for a mortgage?”

And rightfully so! The seller doesn’t want the deal to fall through because you couldn’t get financing. When they accept your offer, their home comes OFF the active market. If you fall through, it costs them time and money.

Plus, there’s one more reason to get pre-qualified or approved…

You Will Have Much More Power To Negotiate
Price And Terms When You’re Financially Qualified!

When you have money behind you, the seller knows your serious. And a serious buyer ALWAYS has more influence to negotiate. So do yourself a favor, GET PRE-APPROVED!

Now, the third way to become financially prepared is to have deposit funds available immediately. One way to do this is to write a check for 3% of the highest price you’ve been qualified for financing.

Make the check out to the Brokers Trust Account, or the Title Agency you will use. The broker or title company are trustworthy fiduciaries by law, and will hold the check un-cashed until you make an offer that’s accepted.

Now I know what you’re thinking… “It’ll be a cold day in Ecuador before I write a check before we’ve even located a home.” I understand.

But you may want to consider this…

Jim and Susan were buyers from outside their immediate area. Because of their distance, they could only get together with their agent with two days notice. And the market was pretty good.

Three homes came on the market, and were sold before they could get together to visit them. Twice, they lost other deals because of bidding wars.

Finally, out of frustration, they placed an un-cashed deposit with their broker.

When they finally found the right home, they decided to write an offer…

And because they placed an un-cashed check on deposit, their agent could enter negotiations with verbal authority to make the offer. And because the agent could demonstrate that he had earnest funds, the buyers were able to sign a faxed copy of the offer, and their deal was secured.

And it’s a good thing! The very next day, three more offers came in on the home they just put into escrow!

1st Secret you need to save thousands in Financing your home

Did you know that your knowledge about home financing can mean the difference between making and losing tens of thousands of dollars? If you’re like most people, home financing…with all its hidden costs and games…can be a daunting and confusing event. And for about 80% of people out there, borrowing $100,000…$200,000…or even $500,000 or more is the largest financial transaction you will incur in your life.

Small mistakes can leverage themselves into big losses of money. That’s why you need to be armed to the teeth, not only with helpful knowledge, but with proven, helpful strategies and questions that will get you the very best mortgage for your situation for the absolute lowest cost available in the market.

See below to understand why "What you don't know can cost you thousands". This is the 1st of seven points important to financing you next home purchase or even if you decide to refinance.

Secret #1: Clearly Understand How Much Financing You Can Afford

Like it or not, there are two guidelines bankers and mortgage lenders use to determine how much loan you can afford.

The first guideline is the Payment To Income Ratio. This guideline compares your income – or your total household income – to the amount of mortgage payment you’re considering.

To calculate the “payment” part of the formula, the lender will take the mortgage payment (principal + interest) and add to it Property Taxes and Insurance. Hence the term “PITI” (principal, interest, taxes, and insurance).

Usually lenders will loan up to 28% of your total household income.

But before you think you’re home free, there’s something else you need to know…

It’s called the Debt To Income Ratio. Debt refers to ALL the major monthly payments other than your mortgage payment (PITI). To arrive at this amount, the lender will consider…

Your car payment.
Your credit card debt and payments.
Any IRS liens or payments due.
Any other payments and debts you have (boat, second home, etc.)

Then, they’ll compare your total debt to your ability to make current payments with your new home loan added into the equation.

Now, here’s the “catch.” Each mortgage company sets different limits on your Debt To Income ratio, which is why it’s critically important to find a MOTIVATED LENDER!

Don’t follow the “canned” financial advice like you see on TV. Most of that advice is “rule of thumb,” and designed for the lowest credit rating and highest interest rates.

Think about this…

If you spend two or three days to find a loan that saves you $40,000 to $150,000 or more over its term, your time is WELL WORTH SPENT! Doing a little homework on your own will literally save you thousands over the term of your loan.

Thanks, Don

Encouraging news! More people can afford to own.

About a third of households in the fourth quarter of 2007 would have been able to contribute a 10-percent down payment and be approved for an adjustable-rate loan at 6.21 percent on a starter property. In the same three months of 2006, just 25 percent of people met those guidelines for purchasing a home priced at 85 percent of the local median home price.

The downturn in California's housing market is cited as the main factor for the increase in affordability. The most affordable area of the state was in the desert north of Los Angeles, though Sacramento County was very close. By comparison, just 20 percent of households were able to afford to live in Monterey, where the price of an entry-level home is approaching $600,000.Source: North County Times (CA) (02/19/08)

3 Deadly Mistakes to avoid in selling your home

1. Failing to dress your Property to sell- Buyers look for HOMES, not houses. They buy homes in which they FEEL they would like to live. One of the major factors in getting your home to sell quickly is very simple: MAKE IT FEEL LIKE “HOME.” First impressions set the tone for a buyer visit, and they’re LASTING! Approach your home in your car like any buyer would. Examine the outside as you’re approaching. How does it look? Are shrubs away from the home? Oil in the driveway? How does the grass and landscaping look?

Now go inside just like a buyer would. You want to be aware of four senses: smell, touch, sight, and hearing. Go through room by room and test all four senses. Check flooring and carpet for stains and odors.

2. Pricing Your Home Incorrectly- Every seller wants to realize as much money as possible when selling their home. The natural inclination is to price the home high, thinking you can always come down in the future. But a listing price that is too high frequently nets the seller LESS money than an original price at market value. Why is this? Because people looking for homes in your price range will reject your home in favor of other homes in a reasonable price range.

And here’s the real clincher: Agents who would readily bring buyers through your home will automatically cross it off their showing schedule because it’s priced too high. They’re only motivated to show homes with the highest probability of selling. Agents simply will not show overpriced homes because they work by commission. They know market values because it’s their job to know. And they don’t want to waste their time.


3. Not getting the right Marketing Exposure Of Your Property

The most obvious marketing tools everyone uses (Open Houses and classified ads) are only moderately effective. Successfully marketing of your home (getting the highest price, at the right time, and with no hassles and problems) requires much more. Surprisingly, less than 1% of homes are sold at an open house. Agents use open houses to attract buying prospects, not to sell your home. And advertising studies show that less than 3 % of people purchased their home because they saw it in an ad.

That’s why the most competent agent will have a broad spectrum of marketing activities, emphasizing the specific strategies that will work best for YOUR particular property or area. In fact, I use an unprecedented [28 Step Marketing Plan] in selling your home. If you like, I would be happy to share every one of those [28] strategies with you at your convenience. I have many more suggestions on this subject.

Email me for "the rest of the story" at don@dbullis.com and mention Mistakes in Selling your home and include your address. I will mail you the complete report.

Don

How long should I hold on to my home?

Recent nation-wide Real Estate market events cause many to wonder how long do I need to hold onto my home to enjoy a reasonable profit.

NAR statistics show that despite the annual decline in the fourth quarter 2007 median home price, the typical seller who purchased their home six years ago still saw a very healthy gain. The median increase in value for sellers who purchased that home in the fourth quarter of 2001 is 31.2 percent, and the median home equity accumulation is $49,000.

In the fourth quarter, the largest single-family home price increase was the Cumberland area of Maryland and West Virginia, where the median price of $116,600 rose 19 percent from a year ago. Next was Yakima, Wash., at $170,600, up 18.0 percent from the fourth quarter of 2006, followed by the Binghamton, N.Y., area, where the fourth quarter median price increased 14.8 percent to $110,000.

“The healthiest housing markets today generally are moderately priced and are experiencing job growth and often population growth, which in turn is supporting strong price growth,” Yun says. “Most of the weakest markets have either experienced both job and population losses, or they are experiencing corrections following a prolonged period of rapid price growth.”

Pre-Approval or Pre-Qualification!! Which is best

I get asked frequently "Why is Pre-Approval important?
For Home Sellers, Pre-Approval is stronger evidence of a buyer's ability to complete a home purchase, whereas Pre-Qualification (although quick and easy) is not as good an indicator.

Given that most people don't have the hundreds of thousands dollars lying about to purchase a home, securing a mortgage is a very important step in the buying process. In order the Buyers become approved for a mortgage, lenders require income verification, credit card and other loan stubs, credit statements, etc. to carefully determine whether the buyer meets all the requirements for the amount and terms; and therefore will be able to continue to settlement.

Buyers also benifit from Pre-Approval:
Since there are several non-refundable expenses during the purchase process, the sooner a buyer uncovers any reason why they might not be able to secure a mortgage means less money lost. Getting Pre-Approved while still looking is far superior to finding out after the fact.