Should You Pre-Pay Your Mortgage

Have you recently considered taking action involving one of the following mortgage issues?

•  An increasing number of homeowners are opting for higher monthly mortgage payments on shorter loans, but with interest rates at record lows and property values still in flux, that may not always be the best decision. In other words, investigate the difference, for you, between a 15-year mortgage vs. a 30-year mortgage, or a 5-year fixed option if you plan to stay no more than 5-years.
• Choosing to pay down a mortgage ahead of schedule by paying extra money at a refinancing or by choosing a shorter-term loan may not be enough to offset what the money could have earned if invested in the markets, according to financial advisers.
•  Paying off a mortgage early, at the expense of other, more liquid savings and investments, could also stifle cash flow, especially in retirement. Once a house is paid off, in order to access its value, the owner would have to sell, get a line of credit, or take out a reverse mortgage to access the equity.
• Financial advisers recommend that home owners only consider pre-paying their mortgages if they already have an emergency fund of at least six months to a year in cash, have other retirement savings, and plan to stay in the house for at least five to 10 years.

Home Improvement Trends In Energy Efficiency and Exteriors

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  7 Hot Home Improvement Trends that Make Your Home Work for You

  Home improvement trends embrace energy efficiency, low maintenance exteriors, and double-duty space. Read

Visit houselogic.com for more articles like this.

Copyright 2011 NATIONAL ASSOCIATION OF REALTORS®

Is Your HOA FHA-Approved?

Many homeowner associations in Orange County and Los Angeles County are experiencing certain problems, and these problems could lead to more difficult-to-sell units in an already-soft condo market. For example, some loans are not getting approved for conventional Fannie Mae financing at the close of escrow due to too many owners being delinquent on monthly dues. As times become tough, and owners have to short sell, or go into foreclosure, the associations are not able to collect the scheduled income, and lowered reserves are a concern to lenders.

While associations are not required to have special approval for conventional loans, HUD now requires complete project approval before an FHA loan may be given. And the advantage is that sellers have more potential buyers with this approval, many more. FHA loans have made up 50% of the market in some areas, because they fit the 1st-time buyer's budget with 3.5% down payment, and 1st-time buyers are the majority of buyers in some markets, including condominiums.

If your association is up for renewal for FHA loans, or your association would like to be FHA approved, the following factors are essential for project completion:

1. Owner occupancy must be 50%.
2. No more than 15% of the units can be dues-delinquent over 30 days.
3. No one entity or person may own more than 10%--this is a problem in a 12-unit complex where 1 person owns 2 units, and this is not uncommon in areas such as Long Beach and San Pedro.

4. No more than 50% of the units may be FHA insured.

5. No pending litigation which adversely affects the entire association (collection and foreclosure litigation does not make the HOA ineligible).

HOAs must provide the condominium documents, along with certain information, and if eligible, the process may take about 60 days or more. This approval can help out owners who wish to refinance as well. You don't have to be selling in order to start the approval process, in fact, it's far better if the association obtains it before units go on the market, or an owners attempts a re-finance.

To be approved will usually cost about $1500 to $2000. For more information on documents HOAs provide, and help with finding a source, please contact me to find out where to get started. Some lenders will provide the approval if they are the source of your loan.

Will Lower Loan Amounts Hurt Some California Sellers?

July 1 was the cutoff date for loan limits that exceed the permanent loan limits. In case you've forgotten, the upper limit of $729,750 for conventional and FHA in California was a temporary accommodation. The permanent loan limit is $625,500 as of October 1, 2011.

This change is projected to have the biggest impact on the highest-end counties,  i.e., Marin and Contra Costa Counties, but also Riverside and San Diego Counties are not far behind, where 11 and 12 percent of the (non-FHA) home sales would be rendered ineligible. In Los Angeles County, about 2.3%  loans would be rendered ineligible, but Los Angeles County also represents 25% of the state's households.  The lower limits for FHA loan in Los Angeles County would impact about 5.4% of the loans.

All told, the changes could affect 30,000 California families. If liquidity in the high end market becomes slower than it already is, where do the move-up buyers move to if their eligibility is tougher, and where do the condo-to-house buyers move to in the lower range when fewer properties are put on the market?

One loan limit for the entire country cannot be right--the West Coast market rose above the national level years ago, and the current loan limits recognize that. We need to keep the high-end market moving, so the rest of the housing market does also.

Issues raised to Ben Bernanke, Federal Reserve Chairman, in a House Committee hearing July 13:

Ackerman then asked Bernanke how Congress should reconcile the possibility that many homeowners will not buy homes in this higher bracket when they would otherwise be qualified to do so.  "I don't have an answer other than to say that we have to get our housing finance system back into working order," Bernanke said. 

Researchers from George Washington University have said the FHA already exceeds the market share needed to serve its targeted demographic of low- to middle-income homebuyers. And, a separate report from the National Association of Home Builders suggests more than 17 million homes across the country will become ineligible for cheaper federal funding – at a time when the housing market continues to struggle.

The truth is, they're really not sure what works and what is needed, and getting the finance system back in order sounds good.

Missing Mortgage Payments? It's Not Too Late

Wondering what a homeowner should expect when payments are missed? The most important thing to know is that no matter what stage of default a homeowner is in, there is almost always a way to avoid foreclosure. That being said, the quicker a homeowner does something about the situation, the less challenging it will be to resolve.

First, here’s what a distressed homeowner should expect to happen when payments are missed:

30 Days Late: The lender will attempt phone contact or send a notice in the mail.

60 Days Late: The lender will attempt to make contact by phone and follow up with another letter in the mail.

90 Days Late: The lender will send a letter demanding all past due amounts within 30 days and start the foreclosure process.

120 Days or More Late: The lender’s attorneys will take over and the homeowner will be responsible for their fees in addition to missed mortgage payments and the loan amount due.

Not late yet, but about to be?

Homeowners who are not yet late but foresee missing payments should communicate this to their lenders as soon as possible. In the past, many banks wouldn’t work with homeowners unless they were one or more payments behind. In light of the mortgage crisis, most lenders would now rather take a proactive stance and decrease their loan losses. They are more willing than ever to work with homeowners to avoid being late.

If you are visiting my website at http://www.juliahuntsman.com/distressed-property-resources-short-sales.html and you or someone you care about may miss mortgage payments in the near future, please contact me. I can help navigate the process and put you back on a path to financial stability. Contact me today and alleviate the stress that comes with unaffordable mortgage payments. Find out what your options are.

Looking for a Home Plus Guest Quarters Under $350,000? It's Here!

This upgraded and remodeled single family home the Circle Area of Long Beach has a lot of advantages for a new homebuyer because there's so little work to do! 

Who wouldn't want the upgraded bathroom, and the new kitchen with granite counters and recessed lighting, complete with the cooktop range with downdraft feature? Hardwood floors, dual-paned windows and a roof (2005) in geat condition help a new buyer get settled quickly. 

Verizon FiOS is already installed for state-of-the-art connections.

The nicely landscaped yard is completely enclosed, and patio areas are paved with Saltillo tiles. The side yard is good for play area or a dog run.  And, though it's not permitted, there are additional guest quarters of approximately 175 sq. ft. with bathroom which makes a great office space or a third bedroom also!

Two-car garage with laundry hookups. For current listing price for 3100 Spaulding St.,  See listing here..

Please call me for more info!  Julia Huntsman, Broker, Lic #1188996

Note:  This listing is off market.

Lower Loan Limits and a Higher 20% Minimum Down Payment?

Without an extension or permanent change enacted by Congress, loan limits will decrease from $729,750 to $625,500.  Couple that with new demands for a minimum 20% down payment for conventional loans and strict debt-to-income ratios, and there could be a very sad situation.

In many states these changes may not change too many people's lives.  But in California where the market has for years been higher than other areas of the country, those changes could be critical, decreasing ability of buyers and sellers to purchase and sell, and hurting the recovery of our market. There are 27 California members of Congress who have spoken out against these changes. Everyone should know how their homebuying or homeselling future could be impacted by these changes, and possibly be shut out of the market.

And to make matters more confusing, there have been alternate proposals, and different ideas of what defines a Qualified Residential Mortgage, meaning those mortgages that could be exempt from the new rules. While it may have started with good intentions, these new rules, if passed into law, could have unintended, unknown effects.



Know Your Local, Local Market: A Call to Confidence, for Buyers AND Sellers

Don't short change yourself.

Sometimes people act as if they are just looking for a reason to feel bad, and any attempts to correct, or just gently push away, negative assumptions are met with even stronger resistance.  Twice in four days, the negativity virus has struck people I'm talking to. (The open house rate can be much higher.) One person believed he has the worst looking house possible and that it will never sell, when in fact, a few immediate corrections, including some paint, costing $1000-$1500 would probably put the home on its path to a motivated buyer in at least his house price median. Unfortunately, this owner has fallen prey, over and over, to the repetitious negative media message about "the bad market", all the while knowing nothing about his neighborhood statistics. He couldn't believe he actually had an opportunity somebody out there is looking for: a solid little house with a large back yard in a nice neighborhood under $350,000. Instead, he was looking backwards at perceived complications and difficulties, not forward into the light of a sold property. Maybe he's just not ready, but just in case he's reading this, the light of a sold property can be a very happy light.

This is the real job of a real estate agent: educating the client, which in turn would fire them up with more enthusiasm and motivation about taking action. It's a shame to see a person get into a real funk, a downward spiral of mopiness, when I'm hearing there are buyers looking and looking for certain opportunities. Repetition of the message is where it's at.  The media knows this, and feeds on the human tendancy to embrace fear.  So Realtors have to know it also: We have to be prepared over and over, to show, act and tell wherever and whenever, the postive truths about a client's local market, and show them what solutions could work best for them, over and over. You can't convince someone of something they really don't want to be convinced of, however, repeating things over and over is the key to all learning. Yes, it's a challenge. 

I tried to explain to my prospective seller that the first time buyers are out there in great numbers, in fact, in Los Angeles County, about 60% of first time home buyers can afford a median-priced home (at the height of the market it was about 10%).  At the end of 2010, the LA County median priced single family home was $323,000 (per CAR), and for April 2011, it was $333,000 (per tax data).  And then I tried to explain that investors with all or 50% cash have been very strong in the market also, composing 30-50% of all sales in some markets, actually making it tough for the first time buyers who get outbid.  So Mr. Seller, for the right property in the right area, there's competition out there. Our unsold inventory in Long Beach is recently at 2-3 months (that used to be called a seller's market), the housing affordability index is now where it was in 1999 and 2000. The trickle up effect is that the higher end homes are selling more--those over $750,000 in Los Angeles County have decreased in supply of inventory compared to one year ago.

Just give peace a chance.

Single Family Sales--Market Snapshot for May & Past 12 Months in Long Beach

Date: Avg price Dec 2010 to May 2011
'Single Family Residence'
 'Long Beach'

The most sales of single family homes in Long Beach within in past 2 years is in the $200,000-$300,000 price range: a total of 1,347. The top selling area in that price range in the last 12 months was in North Long Beach, with 821 closed sales in the last 12 months, and continues to have the highest sales volumes for May, at 71 sales, in the same price category!

Based on a group of 60 listings, Bixby Knolls/California Heights area averaged $562,025 in May with 25 sales, with the Plaza and Los Altos areas at 21 and 20 sales for May. The top 5 areas in average sales price for May are Belmont Heights at $878,900, Belmont Shore/Naples at $842,000, Park Estates at $749,000 (4 sales), Bixby Knolls/Cal Heights, and Lakewood Village at $544,000. Remember, these monthly average sold prices are based on properties sold during May, and are not their list prices.
Overall, the chart, based on MLS data, shows an  upward trend--with monthly variances--in average price since December 2010 for the City of Long Beach.

New Listing: 555 Maine Ave., 309, Emerald Villas, downtown Long Beach

 Looking for that desirable "under $200,000" price? You have found it here. This is such an attractive east-facing unit in the Emerald Villas, bright and sunny in the mornings. Besides a great floor plan that features a master bedroom/master bath, plus a 2nd bedroom with a hall bath, inside laundry, and a third floor view, the buyer also receives all the appliances (microwave, refrigerator, stove AND stackable washer/dryer). The living room features a gas fireplace, and floor-to-ceiling beveled-seam mirrors on its entire south wall, plus Pergo flooring. Although it's not needed that often, this unit also has central air and heat. This is a nicely maintained unit that has been recently carpeted (bedrooms), painted in the last 2 years, with newer appliances since 2007.

If the buyer needs a loan source, I can possibly help with a source that provides 3% and 5% down conventional for condos. The building is currently FHA-approved, but its status for FHA after July 31 is unknown at this point. The HOA common areas include rooftop deck, central atrium pool and spa, and exercise room. HOA fees on this unit are $245/month and includes two side-by-side parking units. Location is near an elementary school, and all downtown amenities, including the Aquarium, Convention Center, and nearby freeway access.

Take advantage of this opportunity! These units sold in the $350,000 range in the high market. To see more on this unit, go to Long Beach Homes and Condos.  Now listed at $179,000! UPDATE: This unit is now re-sold.