An informational source for people who are relocating, with a particular focus on moving to the Carlsbad area of North County San Diego (and nearby coastal communities), with advice, guidance and true stories to help you on your way and make it a great journey, from a REALTOR� with plenty of personal (4 major moves, most recently from Boston to Carlsbad, California) and professional relocation experience. Are you running into problems selling your home? Need to find a new one quickly? Never moved before and haven't a clue? You'll find some great tips on how to solve your relocation issues here. Or ask me a question any time and I'll share some solutions or tell you where to get more information.
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There is some good news for folks who are relocating to California and will be buying a new home afte March 1, 2009 and before March 1, 2010.
You MUST buy a new construction home (one that has never been lived in) in order to quality and must apply for the credit from the Franchise Tax Board here in California.
This must be a primary home and you must live there for two years.
So, if you are also a FIRST TIME HOME BUYER you might qualify for up to $18,000 in California - the new $8,000 First Time home Buyer credit AND the new home credit offered by CA.
If I can provide more information about Carlsbad and surrounding areas, or the housing market in general, or otherwise assist you in your homes search, please contact me by phone or text at (760) 840-1360 or email me at JDowler@remax.net.
FLASH - Interest Rates have Dropped: Is This YOUR Opportunity?
You may have heard but ...the interest rates dropped substantially recently on the heals of the Fannie Mae and Freddie Mac takeover by the government. This could mean substantial savings for you if you have been sitting on the fence. And it could be good news for sellers whose homes are not selling.
The other thing to know is that the mortgage requirements are getting more stringent, and it is expected that we will see even more and tougher, standards next year. Many folks who might qualify now may not do so next year. And if the rates go up too...
Finally, you probably know that the higher mortgage limits are going to end at the end of this year for certain mortgages (e.g., FHA). This means some loans for median priced homes, say in the Carlsbad area, will then, again, become jumbo loans.
Is this YOUR opportunity to buy?
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If I can provide more information about Carlsbad and surrounding areas, or the housing market in general, or otherwise assist you in your homes search, please contact me by
phone or text at (760) 840-1360 or email me at JDowler@remax.net.
I started a series recently on financial planning as it pertains to real estate purchases. We talked about financial planning in general, keeping in mind our overall financial goals as we consider our real estate purchase. My friend Paul Paroti, a financial planner, shared his wisdom with me regarding making these real estate purchase decisions with long term goals in mind.
Next we discussed the issue of down paymentsand the financial considerations associated with making decisions about where the money is coming from, long term goals, tax implications and so on. As a financial planner, Paul again shared some thoughts on this important decision so buyers can give appropriate consideration to their down payments and where to obtain the cash. Putting a large chunk of money down may not always be the right financial decision.
Another popular focus of buyers these days, especially the baby boomers, is on buying a vacation or second home. The current real estate market presents a phenomenal opportunity for second home buyers.Whether you’re a baby boomer looking for a home to move to permanently in a few years, or just someone who loves the idea of having your own vacation home, the housing market is ripe for buying in many areas, and thus the chance to get into a second home at a great price is there for the shrewd buyer.
While buying a second home offers countless benefits, and sounds rather idyllic for many of us, there are some financial implications of a second home purchaseMost people are aware of all the benefits- the prestige of owning an attractive property, the enjoyment of weekend and holiday getaways and the economic benefits of long-term appreciation and a tax sheltered investment.
However, buyers should realize that the expenses of owning a second home can be significant, and my feeling is that most people underestimate the true cost of owning a 2nd home.Like a primary residence, you likely expect to have a mortgage, property taxes and homeowner’s insurance (as well as HOA dues if it’s a condo or townhome).What you probably haven’t given as much thought to are other expenses you’re more likely to incur with a second home than with a primary residence.
When you buy a new primary home you’re likely to bring at least some of your furnishings from your prior home
With a second home you’ll likely need all new furnishings unless you buy the property completely furnished - everything from living room and bedroom sets to a washer and dryer to silverware and dinner plates
Since many second homes are located some distance from the primary home it is essential to consider the costs of traveling to and from your second home.With gas prices where they these days are things can add up quickly
Finally, don’t forget the costs of maintaining your second home.Even if you’re a do-it-yourself gardener at home, chances are you’ll need to hire someone to help with your second home, unless you’re up for driving who knows how far just to mow the lawn, or taking time from your “vacation” to mow the grass and deal with other maintenance issues
I recommend that second home buyers sit down and make a list of all these “additional” expenses so you have a reality check on your costs.Then, add 10%-15% to account for miscellaneous items and things you may have forgotten.The purpose isn’t to scare you, but rather to make sure you give serious thought to the full ramifications of your purchase.
Buying a second home is an opportune time to sit down with your financial planner (and if you aren’t using one this might be a good reason to start working with one).He or she will be able to “crunch the numbers” and show you how your second home purchase will affect your big picture situation.Taking the time to do this will give you the peace of mind of knowing you’re on the right track.Worst case scenario? If buying your dream second home would put a crimp in your retirement plans you’re better off finding this out beforehand.
By taking a little extra time to think everything through and understand the financial implication, you’re ensuring you’ll be able to enjoy your new second home without any unnecessary worries.Happy house-hunting!
I appreciate Paul’s thoughts on these issues and recommend you give him a call or send an email with any questions about your second home purchase and how to factor this into your long term financial planning goals. Paul can be reached at (714) 424-9440 (office), (949) 466-7519 (cell) or via email at Paul@ifsplanning.com.
Why not find out how he can help YOU with your financial planning objectives?
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If I can provide more information about Carlsbad and surrounding areas, or the housing market in general, or otherwise assist you in your homes search, please contact me by
phone or text at (760) 840-1360 or email me at JDowler@remax.net.
Most buyers, unless they qualify for 100% financing or obtain gift money, will allocate a large chunk of cash to the down payment (up to 20% or more of the purchase price; with detached homes starting around $500K in Carlsbad we are talking $100,000!). And the decision of how large a down payment to make on your home purchase is not just about making a competitive offer, but may have huge implications on your big-picture financial situation. This decision requires a careful analysis and depends on your unique set of circumstances.
So I got some information from a friend of mine, Paul Parotti, a financial planner, and wanted to share this. With the help of a qualified real estate agent, financial planner, mortgage professional and possibly a CPA, buyers should look at the following factors when making this decision:
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How will the down payment expense affect your nest egg? Tying up too much of your net worth in your home would create major problems if you were to lose your job or encounter some other financial difficulty. For those who think they will always have the option of cashing out excess equity by refinancing, consider that mortgage standards on cash out refinances are much more stringent than on purchase transactions, with lower loan-to-value allowances and stricter borrower credit requirements. Even if you do qualify for a cash out refinance, closing costs may be several thousands of dollars. The bottom line: it’s best to keep enough cash available to float you for six months or more, just in case.
If I can provide more information about Carlsbad and surrounding areas, or the housing market in general, or otherwise assist you in your homes search, please contact me by
phone or text at (760) 840-1360 or email me at JDowler@remax.net.
The conforming loan limits for loans funded by Freddie Mac and Fannie Mae now have temporary new limits.
In the past, buyers who needed a loan larger than the conforming limit (i.e., the JUMBO loan) of $417,000 paid a higher interest rate. For many, the significant increase in the monthly payment was enough to keep them out of the buying market, especially in areas like Carlsbad (and San Diego in general) where median home prices generally exceed this limit.
The new limits, in place for loan that originated between July 1, 2007 and December 31, 2008, are $697,500 for a 1-unit dwelling, and up to $1,341,350 for a 4-unit property.
These changes are expected to bring more buyers into the pricey Carlsbad and San Diego housing markets, and coupled with the declines in prices we have seen in the last few years, increase the affordability level for many.
If you are buying a new home, or are a seller who has a buyer who is purchasing your home, and it will be financed by a bank, watch out for that appraisal.
Why do I raise a red flag?
BUYERS:
Well, as a buyer, the home you are purchasing must appraise at an amount that meets the underwriter's requirements for the loan amount. They won't loan you $500,000 for a home that appraises at $475,000. Not good business for the bank. So this is a critical step.
Secondly, the timing is important here. The appraisal MUST be reviewed by the underwriter in order to review it and then approve the loan. That can take a day or two, or more. So if the appraisal itself is delayed in getting to the bank this may hold up the loan approval process.
Make sure you talk with your lender and that they order the appraisal as soon as you have a signed purchase agreement. It may take a few days for the appraiser to schedule the appointment, and then several days more before the actual appraisal is sent to the bank. You will have to bird-dog this process, as will your agent, to keep things moving along.
SELLERS:
The appraisal is critical for you as well. Obviously if the home does not appraise the buyer will not get a loan and will not go to closing. Bad for you. Herein lies the risk of selling a home at over market value - the bank will wonder about loaning $500,000 when comparable homes are selling at $475,000.
The timing for you is important too, for obvious reasons. While it is not your responsibility directly you have a vested interest in things moving along. So, your agent may want to keep tabs on what is happening at the buyer's end so the appraisal get scheduled promptly. And since it is likely your listing agent may need to let the appraiser in, you don't want any delays.
One option buyers have (and those who are refinancing) is to lock in their interest rate (i.e., so your rate does not change even if the rates for your particular mortgage program shift up).
The mortgage company will quote you a particular rate when you first get pre-approved. This rate MAY or MAY NOT ultimately be the best rate, depending on what rates are doing at the time.
Right now it might be prudent to lock in your rate, since they are the best they have been in about 2 years. But I am not a mortgage professional. So check with YOUR lender to see what they recommend.
A rate lock will usually last up to 45 days (but they vary from program to program), so depending on when closing is scheduled, this may or may not work. Also, if the rates seem to be trending downward, your lender may suggest watching the trends before you pay the fee (if there is one) to lock in.
On the other hand, if rates are expected to go up, or are starting to move in that direction, locking in may get you the best rate NOW and save you some bucks on your monthly payment.
Have you taken a look at the interest rates recently?
If you have been holding off buying, thinking that prices may go down, you might take a serious look at the interest rates.
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Prices are changing in some areas, but not all. But another important financial consideration are the INTEREST RATES. The rates have DIPPED BELOW 6% for fixed rate mortgages, the lowest in 2 years. We don't know where they will go in the future, even with the Feds recently cutting the rate another 1/4 point.
Even if prices drop a bit, if the rates go up, you could lose out on the best combination of home price and monthly payment that we've seen. And it may be THE TIME for you to refinance your current mortgage as well.
Talk to your mortgage professional to see if NOW is the best time to make that move.
Does Your Relocation Package Include Closing Costs?
If you have a relocation package with your new employer, there are a number of possible components that can impact your move, and that you should check on.
Another item that may be covered in your relocation package are CLOSING COSTS.
You might have these paid for on the sale of your home, but perhaps also at the buy side of the transaction. Check to see if either is the case, since this may have an impact on what you negotiate for on the sale or purchase of your home. It may also impact what you can afford.
For example, some sellers will offer to pay a portion of your closing costs when they counter offer YOUR offer. This doesn't do you any good if you are getting the closing costs paid for. So something else might need to negotiated as part of your agreement to buy the home which can be to your benefit, say a lower price.
Knowing ALL the details of your relocation package is critical so you are prepared.
Buyers and Sellers - Be Aware of Insurance Moratorium
Buyer and sellers - you may already have heard, but do to the fires here in San Diego County there in a moratorium by the insurance comapnies on writing new policies on homes that are being sold. This will be temporary but I learned about this yesterday. This also happened after the fires 4 years ago,
If your home is in escrow and closing is imminent, or you are buying a home that is due to close, please check with your insurance provider right away. Escrow cannot close if you cannot provide proof of homeowner's insurance, which I expect you already know.
I understand that California Fair Plan will write policies but these are not comprehensive and you would want to get a better policy after closing occurs.
I have also heard, though, that the moratorium MAY be lifted n Monday since they are making progress with the fires, so the impact may be minimized. We will see.
One thing for sure, rates are going to change in many areas of San Diego, and we may see some policies get canceled, or insurers may decline to insure in certain areas.
BTW if you need an insurance broker here in the San Diego area, please let me know.
I hope you are all well and safe if you are in this area.
Market Update on the Mortgage Industry (Guest Blog)
To All,
Yes I'm still here. There hasn't been much of anything going on in the mortgage market other than the issue with lenders going under. Not to make it sound like it's not a big deal, but I advised everyone of this a month ago so it shouldn't be news to you. We're continuing to see a lot of fallout from the subprime industry. Probably the biggest change is in the 100% financing arena. If a borrower has to do stated income, 100% financing, the minimum credit score is now at 680...and that's with very few offering it at all. Before all the mess, we could go as low as 620. Bottom line, just be diligent in making sure your clients are qualified so the deal doesn't fall through in the middle of escrow. I predict, as we get further into the year, there will be more lenders offering stated income, 100% financing at lower credit scores.
As for rates, not much movement. There was a brief panic in the bond market earlier this month from the March jobs report. Basically the labor market showed much more strength than anticipated sparking wage inflation fears and sending the bond market downward. We witnessed a small spike in bond yields and that translated into a small spike in mortgage rates. Despite the great rates, mortgage applications continue to drop from week to week due to the shake up in mortgage lending. Right now a conforming 30 year fixed is at 5.875% with jumbo 30 year fixed hovering right around 6.125%. Going with an adjustable rate product won't save you a whole lot as a 5 year fixed is at about 5.625%. It's the same story, rates won't move significantly until the FED decides it's necessary to lower interest rates. Right now the economy is growing with little worry of immediate inflation so I don't think the FED will lower rates anytime soon. The DOW is flirting with the 13,000 level for the first time and there doesn't seem to be anything to stop it from going higher.
Be careful out there and don't let your clients get into a bind with the ever changing mortgage market.
If you'd like more information on the daily market, please visit my website.
I know this is an unpleasant subject, but now that tax time is approaching (too quickly, in my mind, but there it is), I thought I would take a moment to talk a bit more about taxes as they relate to your relocation. If you moved in 2006, you may have some deductions you can take advantage of when you file April 15 (or before, if you are really on the ball).
Keep in mind that I am NOT a tax expert, and I cannot provide tax advice. For that, I strongly recommend talking to your accountant or CPA. Don't miss out on a deduction that is rightfully yours! By the same token you don't want to try to deduct something that you are not entitled to.
The IRS puts out a pretty good tax guide that I used myself in the past entitled Publication 521: Moving Expenses. It is as readable as all the other tax publications (sarcasm intended).
You can take a deduction for the cost of moving your household goods (provided you meet the distance requirements)
And there are some transportation costs (lodging and driving your car to the new location) too. Check on this as I believe there is an allowance for lodging the first night after your stuff is packed and for the first night in your new location
I understand there is also a deduction that may be allowed for a second car that you drive to your new location. Watch the $ per mile as this seems to change each year and may be different from what it was last year (2005)
Storage of household goods (there is a limit on the time allowed)
Market Update on the Mortgage Industry (Guest Blog)
I just posted a Market Update Guest Blog which focuses on the mortgage industry and recent issues, especially in the subprime market. The next few weeks will be telling in terms of the impact this may have on some buyers (those who would have normally been looking for 100% financing).
It is helpful reading, and reprinted verbatim with the author's permission. Good article for both buyers and sellers in this housing market.
What Do You Know About Credit Scores and Reporting?
My guess is that some of you know alot about credit scores, how they are calculated, what affects them, and how they are used. Others, I suspect, do not. Perhaps you have some misconceptions about them as well.
A colleague of mine in the mortgage industry writes on ActiveRain regularly as I do. He recently wrote an excellent article on credit scores, and I wanted to share it, rather than trying to paraphrase it for you.
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If you are buying a new home, or are a seller who has a buyer who is purchasing your home, and it will be financed by a bank, watch out for that appraisal.
I know this is an unpleasant subject, but now that tax time is approaching (too quickly, in my mind, but there it is), I thought I would take a moment to talk a bit more about taxes as they relate to your relocation. If you moved in 2006, you may have some deductions you can take advantage of when you file April 15 (or before, if you are really on the ball)..gif)
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