HARP myths debunked by Freddie Mac Exec…..

HARP Myths Debunked by Freddie Mac Exec

A Freddie Mac senior vice president is using the company's blog to debunk a few myths she says may be keepinghomeowners from refinancing through HARP, the Home Affordable Refinance Program.  Tracy Mooney's information about on nine HARP misconceptions might not only be helpful for homeowners themselves but a good resource for lenders to share with customers and the public.

1.      Myth One is that refinancing with HARP (or any other program for that matter) would reset the clock and the borrower would again be looking at 30 years of mortgage payments.  This, as Tracy points out, is not true as almost any refinancing allows the borrower to pick a term from 10 to 30 years for the new loan.  The counterpoint is that most borrowers opt for a 30yr term and this does indeed entail a new 30 years of payments.  Even then, if the interest rate is lower and the borrower simply continued paying the original mortgage payment, less interest would be paid over time and the loan would be paid off faster than the original would have been.  Bottom line: all things being equal, dropping the rate is advantageous in most cases.

2.      Some borrowers have so many offers to refinance coming their way they fear some may be scams.  Mooney says that many legitimate offers have specific information identifying the borrower's existing loan such as the account number.  Also the borrower can report any suspicious offers at 888-995-HOPE. When in doubt borrowers should check with their current lender.

3.      Another myth is that HARP can't help homeowners who are underwater on their mortgage.  That, in fact, is what HARP was designed to do and has no restrictions on loan-to-value ratios for fixed-rate mortgages.

4.      The fourth myth is that refinancing is hopeless for the unemployed.  HARP does offer options that might work such as underwriting based on assets rather than income.  Borrowers should reach out to their lender to discuss available solutions.

5.      It is possible to refinance through HARP even if the borrower's current lender doesn't participate in the program.  Freddie Mac and Fannie Mae have lists of lenders who can discuss options and eligibility with anyone.

6.      Some people believe they are ineligible if they currently have an adjustable rate mortgage (ARM).  HARP was in fact created to help such homeowners obtain mortgages that are more stable and sustainable.  With rates still so low it is the perfect time to lock into a fixed-rate mortgage

7.      Myth Seven is that condos are not eligible for HARP refinancing.  Not only are condos eligible but so are investment properties and second homes.

8.      It isn't always necessary to have sufficient cash up front to pay closing costs.  Lenders can evaluate whether a borrower qualifies to have closing costs and other necessary expenses rolled into the new loan.  

9.      Finally many homeowners think HARP is only for those who are behind in their payments and in danger of foreclosure.  In fact HARP is intended specifically for homeowners who are current on their mortgages but are underwater and unable to refinance through a traditional refinance programs

Moony said potentially millions of homeowners could save money each month by refinancing through HARP.  The program has more than 2.9 million success stories so hopefully if you now know these myths are just that, she says, reach out to your lender and get started with HARP because, "Saving money is a good thing!"

Best Regards, Capital Valley Team
 

 

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Home Improvement Projects for Winter…

5 home improvement projects guaranteed to cure the winter blues

If you’re dreading the long months of cold weather ahead and the thought of being stuck inside, consider curing cabin fever with some fun, easy and rewarding home improvement projects.

When choosing projects to tackle first, Brian Bolger, Lead Contractor with Bolger Design & Remodeling in Mechanicsburg suggests focusing on ones that will increase your property value, save money on your utility bills, and, of course, add a smile to your face. Here are five ideas to get you started.

1. Create walls that wow

Since you're stuck inside staring at the walls, why not give them a new look. Adding modern trim work, crown molding and a bold coat of paint can completely change the look of a room without the expense of doing a complete renovation, Bolger said.

“Contrary to what many homeowners might believe, you can use paint in your home without opening up every window as long it’s an environmentally friendly and waterborne paint, which has virtually no fumes,” he said. “Plus, the dryness of the colder months can actually produce faster results.”

To really add visual interest to your walls, homeowners could go with a new or dramatic paint color or use painter’s tape to create stripes or patterns. A winter project Bolger and his wife are actually getting ready to do is hang wallpaper in their bedroom.

“Wallpaper is making a bit of a comeback thanks to home improvement shows,” Bolger said. “It can definitely be a do-it-yourself project or you can get professionals to do it. My wife and I have hung it before in other rooms, so we have some experience on our side.”

“Replacing interior doors is an affordable way to give your home an updated look versus an expensive remodel,” said Ken Shuman with B&B’s Custom Trim

Bolger also works on a lot of custom trim and crown molding projects which he said for an investment of between $500 and $800 dollars, can make all the difference in the world in bringing some life back into a room. A popular trend right now he said is replacing typical baseboard with ones that are at least five inches wide.

2. Add a “splash” of personality to your kitchen

For homeowners looking to spice up their kitchen without spending a pretty penny, adding a backsplash is a great solution, not to mention the perfect project for a cold winter weekend.

“For several hundred dollars you can completely change the look of your kitchen, as well as customize it to fit your personality,” said Clark Shindel, an at-home service specialist at The Home Depot in Mechanicsburg. “Our free do-it-yourself backsplash and tile workshops are our most popular classes.”

Just a few years ago The Home Depot had only about 40 tiles to choose from. Today, the store has more than 400 different styles and sizes, ranging from classic subway tile to natural stone to metal. While adding more functionality to a kitchen, a backsplash can also help accessorize and emphasize countertops, cabinets and appliances.

“Installation is a relatively simple process, but it is very tedious and time intensive,” said Shindel, who recommends making it a weekend project. “We offer products like theSimple Mat and peel and stick tiles that save time and eliminate a lot of the mess.”

Two pitfalls he warns do-it-yourselfers about are not taking the time to prep and lay out a template which can result in irregular lines or spaces. And not cleaning off the grout completely, which once dry can result in a nasty haze that is almost impossible to get off.

In addition to free tile classes, The Home Depot does offer backsplash installation services for those homeowners not quite daring enough to tackle it themselves.

3. Lighten up your rooms

What better way to brighten and warm your spirits this winter than with new lights, lamps or ceiling fans. Not to mention it’s an easy and affordable way to update the style of any room.

“We get a lot of customers during the winter who are shopping for new lights to get ready for the holidays or to accent kitchen and bathroom renovations,” said Charlotte Couch, showroom manager at Yale Lighting Concepts & Design in Swatara Township. “They are also looking to save on their energy bill with ceiling fans which push heat back down.”

LED-style lights, which come in contemporary and bold styles, also provide a money-saving option. Installing dimmers in areas like the family room or dining room saves money, while allowing homeowners to customize the ambiance.

In addition to pendant lighting, another style that is growing in popularity, said Couch, is Steampunk, which is a cross between vintage and industrial designs. But for a softer more romantic feel, a crystal chandelier is still a timeless choice.

“When it comes to installation and dealing with electrical issues my advice is to hire a professional so you know it’s done right,” Couch said. “Especially with ceiling fans, you want to be sure they aren’t loose or wobbly.”

4. Turn dull doors into classy decor

With home improvement projects, sometimes it’s the things that are used the most that are noticed the least. Like all the doors in your home — in and out of rooms, to closets and utility rooms. But after a closer look, the scratches, cracks, old hinges and outdated style can be hard to miss.

“Replacing interior doors is an affordable way to give your home an updated look versus an expensive remodel,” said Ken Shuman, salesman and estimator B&B’s Custom Trim Inc. in Rapho Township. “Most of the homeowners that come to us are looking for doors that have a unique or more modern look than what they have.”

According to Shuman, there are a lot of options that many people might not even think about. For example, double doors are a much more functional and attractive alternative to sliding doors and bi-fold doors, while French-style doors can add natural light and architectural detail to a space.

“A big thing with customers right now is not so much the door, but the hardware,” Shuman said. “Homeowners are choosing update hinges and doorknobs with more modern colors like brushed nickel or aged bronze.”

While installing interior doors can be a job for do-it-yourselfers, Shuman pointed out that it can quickly turn into a bigger job than expected, especially when replacing doors in older homes.

“Most doors are not going to just fall into place,” Shuman said. “The jobs we do involve cutting, trimming and shaping the door to size, and sometimes replacing the molding.”

Shuman’s advice to homeowners looking to replace interior doors is for them to do their homework, know their budget, and have an idea of what they like.

5. Take your bathroom from drab to fab

There’s no better time than the winter to turn your boring bathroom into a spa retreat. While replacing a faucet, re-grouting tile, or repainting are relatively easy for the do-it-yourselfer, more ambitious jobs like replacing the tub or adding tile floor might be better left to a professional.

While a complete remodel might be a bigger investment, it’s worth considering, said Charles Cornelius, owner of Chazz’ Home Improvement in Mifflin Township

“Many older homes were not built using mold-resistant drywall, so if you’re going to make an investment in upgrading your bathroom, that’s one of the best places to start,” he said. “Knowing what’s going on behind the walls is important before making expensive updates.”

According to Cornelius, there is also a lot of plumbing involved with replacing bathtubs, sinks and toilets, which requires an expert to ensure it’s done right. Once the walls are closed up, a small leak can go unnoticed for a long time, resulting in serious damage and possibly a complete remodel.

“My philosophy is that if you’re going to invest in a project, do it right the first time,” he said.

 

Negotiating Repairs…

How to Negotiate Repairs After a Home Inspection

Tug of war with cash

Most would-be buyers and sellers believe the real estate “deal” is negotiated at the signing of the contract. By that point, the counteroffers have been made and the back and forth has happened, so it’s easy to assume that the deal will go on auto-pilot until closing.

The reality, though, is that in many cases, the deal-making and negotiations only start at the contract signing. Even in more competitive real estate markets, negotiations still happen once in escrow.

For example, if you’re a buyer, the property inspection or sellers’ disclosures — maybe the HVAC system has some issues — may prompt you to seek a credit. But where do you go from there?

Here are three tips for negotiating repairs after a home inspection.

1. Ask for a credit for the work to be done

The sellers are on their way out. If the property is moving toward closing, they’re likely packing and dreaming of their new home. The last thing they want to do is repair work on their old home. As a result, they may not approach the work with the same conscientiousness that you, as the new owner, would. They may not even treat the work as a high priority. If you take a cash-back credit at close of escrow, you can use that money to complete the project yourself. Chances are you may do a better job than the seller, too. Finally, if you get the credit, there will be less back and forth to confirm the work has been done.

2. Think ‘big picture’

If you know you want to renovate a bathroom within a few years, then you likely won’t care that a little bit of its floor is damaged, that there’s a leaky faucet or that the caulking needs to be redone. These things will get fixed during your future renovation. However, the repairs are still up for negotiation. Asking the seller for a credit to fix these issues will help offset some of your closing costs.

3. Keep your cards close to your chest

A good listing agent will walk the property inspection with you, your agent and the inspector. Revealing your comfort level with the home or your intentions, in the presence of the listing agent, could come back to haunt you in further discussions or negotiations.

For example, if you mention you’re planning a gut renovation of the kitchen, the sellers will certainly hear about it. And they’re going to be less likely to offer you a credit back to repair some of the kitchen cabinets. Also, if the listing agent hears you tell the inspector that you love the home so much you don’t mind replacing the HVAC system, the agent will surely let the sellers know about that.

Eyes wide open

A word of caution: You should never complete the original contract assuming that you can negotiate more as a result of the property inspections. If it’s a competitive market and the property inspection comes back flawless, there’s nothing to negotiate. If you attempt to negotiate anyway — to recoup what you lost in the initial contract negotiations — you risk alienating the sellers and possibly giving them an incentive to move on to the next buyer.

You need to go into escrow with your eyes wide open. A real estate transaction is never a done deal until all the money has been wired in and the deed transferred. Prior to signing the real estate contract, your main concern is that you may be competing with other buyers. Once you’re in escrow and doing inspections, however, it’s just you and the sellers. Stay on your toes. Otherwise, you may risk losing out on further viable negotiation opportunities, which could lead to buyer’s remorse.

Related:

 

Money Saving Strategies for Home Buyers…

Homebuying: Money-Saving Strategies at Time of Purchase

By AJ Smith



For nearly all of us, buying a homerepresents one of the biggest financial transactions of our lifetime. There's really nothing that compares to buying a home, since not only do we have to put up thousands of dollars of our own money but we also (usually) have to borrow much more than that.

There's really no getting around the fact that buying a home is expensive. It takes a lot of financial discipline to save up a down payment and make the monthly payments.



Along the way, there are bound to be problems that eat into your savings. Everything from a new roof to a broken water heater is going to cost you. (Of course, renting can also have costly surprises such as escalating rent and being forced to move.) While there's not a whole lot you can do about some of the costs of buying a home, there are ways to reduce your out-of-pocket costs.



Do You Really Need a 20 Percent Down Payment?: You may have heard that the standarddown payment is 20 percent. But it's possible to get a mortgage with little or nothing down. The best known of the low-down-payment options is backed by the Federal Housing Administration. The 3.5 percent down payment on an FHA loan requires you to pay a mortgage insurance premium every month along with your house payment. Obviously, your monthly payment will be higher with an FHA loan since you're borrowing more money but it might still make sense for you.



Shop Around for Your Mortgage: One of the easiest ways to cut costs when buying a home is by finding a low-interest loan. Get quotes from big banks, online banks and credit unions so that you can compare their fees and interest rates.



Some banks like to "massage" their annual percentage rates so that their rates seem lower than they are. Make sure that you compare the Good Faith Estimate given to you by each bank. One thing to note is that you are allowed to get as many quotes as you want within a three-week period. Normally, each quote would be a separate credit check, but when you're shopping for a mortgage, multiple quotes are considered only one inquiry on your credit reports.



Negotiate With the Seller: If you're looking to get a portion or even all of your closing costs covered, then negotiating with the seller is your best bet. Depending on the state of the real estate market in your area, you could ask for more or less. If the real estate market is struggling or the property in question has been on the market for an extended period of time you may be able to get the seller to cover all of your closing costs.

FHA to lower maximum mortgage amount next year…

FHA to lower maximum mortgage amount next year

 

Published: Monday, Dec. 9, 2013

The federal government announced Friday it's lowering home loan limits in many areas across the country next year.

The change takes effect Jan. 1, the U.S. Department of Housing and Urban Developmentsaid.

"As the housing market continues its recovery, it is important for FHA to evaluate the role we need to play," Federal Housing Administration Commissioner Carol Galante said in a statement. "Implementing lower loan limits is an important and appropriate step as private capital returns to portions of the market and enables FHA to concentrate on those borrowers that are still underserved."

FHA loans, with their low down payments, are popular with first-time homebuyers.

"Anything you do to make it harder for people to get loans is going to have an impact on the marketplace," said Jim Heidisch, a broker in Pompano Beach, Fla.

Roughly 650 counties nationwide will see lower limits, according to HUD, which oversees FHA. The higher limits were part of the 2008 economic stimulus package designed to help the country during the Great Recession.

HUD said the lower limits were meant to take effect in 2009, but Congress delayed implementation because of the ongoing lending crisis.

 

 

Remodels coming up again in Sacramento…

Remodels ramping up again in Sacramento area