The 203k Program Can Help Make It Happen

Today’s real estate market presents a lot of opportunity for interested home buyers—with the growing supply of foreclosure properties and short sales, there are certainly some great deals to be had.

The problem in buying a “distressed” property, however, is that these homes are often damaged due to lack of maintenance or prolonged vacancy. So while the price tag might be right, the investment necessary to make the home livable might just push buyers well beyond their budgets.

As a member of the Top 5 in Real Estate Network®, however, I have access to the latest information on mortgage and financing options. One particular option that is providing hope for many of today’s home buyers is HUD’s FHA 203k program, a loan that enables buyers to not only secure a mortgage, but receive the funds necessary to improve the home as well.

Here are five facts about the 203k program to help you determine if it might be the right fit for you:

1. The FHA Section 203k program was originally introduced by HUD in 1978 as a program to rehabilitate and repair single-family homes. The 203k is a single mortgage loan that provides funds to purchase a home and make repairs and improvements. A simpler version, the Streamline 203k, was introduced in 2005. This version offers less documentation and lower loan fees for renovations that don’t exceed $35,000.

2. In today’s market, conventional financing, which often requires 20% - 25% down on a home and a perfect credit score, is often hard to come by. However, with less-than-perfect credit and as little as 3.5% down, you can get an FHA loan, such as the 203k.

3. The 203k approval process is a little more complicated than a conventional loan. For example, you’re required to secure renovation costs from an established, licensed contractor and deliver a package of the proper paperwork to the lender to secure FHA approval. Make sure you work with an agent—like a member of Top 5—who is well-versed in the 203k program, or who can connect you with a lender that is.

4. The 203k loan is not just for foreclosure or distressed properties. More than 80% of the homes in America were built before 1990—that’s over 100 million homes that are 20 years old or older—and almost every one is in need of some amount of repair and updating. The 203k loan, therefore, offers advantages for almost any home purchase.

5. The 203k loan is not just for home purchases but can be used to finance a home improvement, as well!

For complete details on the HUD 203k program, you can visit www.fhainfo.com/fha203k.htm. Please feel free to e-mail me, too, since this information can be hard to digest and confusing. This is just one more loan product that might help you obtain the house of your dreams!

Ask These 4 Questions before You Buy

Condominium homes have always been, and will likely always be, an efficient and economical route to becoming a first-time homeowner. They can offer the comfort, prestige, and even luxury appointments that apartment living may lack, often at a cost that is not much different than rent. With the current first-time home buyer tax credit and the deadline for the move-up tax credit fast approaching, I advise you move fast on any condo purchase you may be considering.

With my experience as Member of the Top 5 in Real Estate Network®, I am well aware that not all condominiums are the same, however, so make sure you ask the following four questions before you buy:

What will you own? Read the bylaws and be sure you understand what you will be responsible for and what belongs to the condo association. Will you own the boat dock at the back of your unit? Can you elect to build a spa on your patio? Generally, unit owners own and are responsible for the interior of their condos, while costs for outside maintenance including common areas and sewer lines are the association’s responsibility.

Who lives there? Are the majority of residents owners or renters? Owners generally take more interest in proper maintenance and are more willing than renters to serve on the association board and enforce complex rules and regulations–including the regular collection of homeowner dues.

How effective is the homeowner’s association? Do they have legal counsel, reasonable funds and a capable, caring volunteer board? One way to judge is to check with residents about restrictions, oversight and timeliness of repairs and upgrades. Another is to take a hard look at the grounds and be wary of signs of neglect.

What about special assessments? The association should have the power to special assess for needed, one-time large expenditures. Otherwise, things that need to be done may never get done at all, leaving the complex vulnerable to disrepair and lowered property values.

The other issue to discuss with your lender are what kind of financing is available.  If the condominium is approved for FHA financing, then you can get in with a 3.5% downpayment.  If it is not approved, then you need to know your options.  Usually you will need 10% down.

Don’t miss this great opportunity to become a homeowner or to downsize by buying a condo (remember, the move-up tax credit does not require you to move to a larger or more expensive home) and take advantage of the TAX CREDIT offered by the Federal Government.  Please e-mail me for more tips on buying a condo and forward this information to any family and friends who may be in the market as well.

As a Member of the Top 5 in Real Estate Network®, home buying clients often ask for advice on the best ways to manage and save money. As the credit card bills from holiday spending start to roll in, here are 10 New Year’s resolutions from bills.com for the year ahead…and beyond:

1. Make a plan. Create a straightforward budget for the year and monitor it monthly or weekly. Each month, review your progress and revise where necessary.

2. Use cash. Move away from credit cards and avoid going into debt, especially for daily, routine and ongoing purchases. Write checks or use automatic bill payments for bills, and withdraw enough cash or use a debit card for other expenses. Track withdrawals diligently to avoid going into overdraft.

3. Pay bills on time. The most important element of good credit is paying bills on time. Keep bills in one location and check that spot weekly. Set up online payments or write due dates on a calendar to stay on track.

4. Save. Your goal should be to save 10% or more of your income, but starting with even a few dollars a week is a great way to develop the habit of saving. You can always add more to your savings at any time. For example, after you pay off a bill, add the amount you would normally pay toward the bill to your savings instead. If you get a raise, bonus, cash gift or other one-time monetary receipt, save it—or at least a portion of it.

5. Practice preventative health. Money cannot buy good health, but in today’s world of skyrocketing medical and insurance costs, getting sick can cost you. Exercise and eat well, get enough sleep and, in these stressful times, take time to pursue relaxation practices, whether that means spiritual practices, meditation, a workout or coffee with a friend.

6. Think twice before spending. Find creative ways to cut back on expenses—take care of household maintenance, barter services or goods with friends or neighbors, and fix up old belongings rather than rushing to buy new ones. Some statistics say that people buy 30% more when shopping with a larger cart, so even a small change like avoiding the store cart when possible could save you money.

7. Participate in a retirement plan. Many believe now is a great time to invest for the long term. Especially if your employer matches contributions, contribute to a business retirement plan. If you are on your own for retirement savings, invest in an Individual IRA, Roth IRA and/or plan for self-employed persons.

8. Have the right insurance. Insurance protects against expenses you cannot cover yourself. Be sure you have life insurance to protect your family, auto insurance to cover your car, health insurance to provide for at least major medical incidents, and home or renter’s insurance to protect possessions from theft or disaster.

9. Pay taxes on time. File your income tax return on or before April 15, with any tax due, to avoid penalties. At the same time, adjust withholding if needed to account for changes in income. That step might be especially important this year for those with lost or reduced work. If your refund was large, have fewer taxes withheld so you are not giving an interest-free loan to the government.

10. Get help if you need it. If you lose your job, file for unemployment quickly. If you are worried that you will be unable to pay rent, mortgage or other obligations, talk to your bank or a reputable debt resolution company to learn about your options.

Remember that today’s attractive housing prices, combined with the government’s expanded and extended home buyer tax credit, make investing in a home one of the best ways to secure your financial well being. If you would like more information, e-mail me, and please forward these sound financial tips to your family and friends.

One of the requirements for becoming a Member of the Top 5 in Real Estate Network® is to provide my community with critical real estate information so you can make the best possible decision when buying or selling a home. To that end, I wanted to pass along some key facts about the extended and expanded tax credit that are critical for you to understand in order to take advantage of this opportunity:

1. Eligibility: The tax credit is now available for first-time home buyers and eligible current homeowners. A first-time home buyer is an individual who has not owned a principal residence during the three-year period prior to the purchase. This law applies for both parties in a married couple; if you haven’t owned a home for three years, but your husband has, then neither one of you can qualify for the tax credit. A qualified current homeowner who wished to move to a different home, must have owned and resided in their residence for five consecutive years out of the last eight.

2. Salary requirements: Single taxpayers with incomes up to $125,000 and married couples with a joint income up to $225,000 qualify for the full tax credit. Single taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.

3. Amount of credit: The maximum credit amount for first-time home buyers is $8,000; the maximum credit amount for current homeowners is $6,500. The federal tax credit amounts to 10% of the cost of the home, up to a maximum credit of $8,000 for first-time home buyers and $6,500 for current homeowners. Under the new legislation, a tax credit may only be issued for homes purchased for $800,000 or less. The tax credit is a true credit—it does not have to be repaid unless the homeowner sells or stops using the home as their principal residence within three years after the purchase.

4. It’s refundable: The tax credit is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if you owe no tax or the credit is more than the tax owed. The credit is claimed using Form 5405, which you file with your original or amended tax return.

5. Timeline: The credit is available for homes purchased on or after November 7, 2009 and before May 1, 2010. The federal income credit can be claimed on one’s individual or joint tax return for the purchase of any single-family home (newly-constructed or resale, single-family detached, townhomes or condominiums) between the dates of November 7, 2009 and April 30, 2010. Home purchases subject to a binding sales contract signed before May 1, 2010 will also qualify for the tax credit as long as closing occurs by June 30, 2010.

Take advantage of this wonderful opportunity to get FREE money! Call us today and we’ll get you started. As a buyer, we need to get you qualified ASAP with a lender and for home sellers, we need to get your house on the market NOW so that we have time to properly market it, get it sold, and then find your new house - all by the end of April!!

SENATE EXTENDS HOMEBUYER TAX CREDIT

The Senate voted by a 98-0 margin to extend the First-Time Homebuyer Tax Credit while also expanding the credit
To EXISTING HOMEOWNERS who want to move to another residence.

The new legislation extends the maximum $8000 tax credit for the first-time homeowners to April 30, 2010, as
long as Purchase Agreement is written the last day of April, and closes by June 30, 2010, these folks would still
be available for tax credit.

This new legislation also includes a maximum of $6500. Tax credit for existing homeowners who want to purchase
a new residence. However they need to have lived in their current home for five consecutive years, within the
past eight years.

The level of qualifying income has been expanded, allowing individual taxpayers who make up to $125,000 and
Joint filers earning up to $225,000 to qualify. The earlier credit had been limited to individuals earning up to
$75,000 and joint filers up to $150,000.

A smaller credit would also be available to individuals who make up to $145,000, and couples who earn up to
$245,000.

Tax credits could be claimed for homes that cost up to $800,000.
Courtesy of Becki Lawrence
Beki Lawrence
Senior Loan Consultant
FAIRWAY INDEPENDENT
MORTGAGE CORPORATION
(225)364-2368 Ofc
(225)806-1919 c
Email: bekil@fairwaymc.com
Web: Loansbybeki.com
Fax: (225)372-2633

As a leader in real estate, I am repeatedly asked specific questions about today’s market - especially in today’s economy. In an effort to provide more information to my community, I am sending you this Top 5 Real Estate Social Networking Systemsm “e-Article,” in which I provide useful real estate information to my real estate networks. If you find the enclosed information beneficial to your family and friends, I encourage you to forward it to your “social network” as well.

Quick Ways to Make Your Home Stand Out from the Competition

You may be hearing more about “staging” your home before putting it on the market for sale, but according to Melissa Birdsong, vice president for Trend, Design and Brand for Lowe’s (www.lowes.com), “refreshing” your home will really help set it apart from the others—and that’s critically important in today’s buyer’s market.

Buyers look at a lot of homes, so I am frequently asked for ways homeowners can make their home stand apart from the rest on the market. While having a well-staged home is now the rule rather than the exception for a faster sell and a better price, Birdsong suggests thinking beyond the obvious for ways to make your entire home feel updated and inspired. Here are her recommendations for quick ways to refresh:

- A fresh coat of paint on worn walls provides a “wow” factor without excessive cost or effort. While this isn’t new news, something that tends to get overlooked (and can have just as much impact) is painting the trim and other accents that may have gotten scuffed or dingy over the years. Freshly painted trim work is cleaner and a healthy home environment is very appealing to buyers. Just one caveat, don’t paint your walls WHITE! No pinky, beige, or other colors that will date your house. You need CURRENT paint colors!! If you need help with this, just ask me!

- Hardware is a quick fix as well. Switching out knobs and pulls in the kitchen or bath will catch the eye and revive an entire room. Taking it a step further to update faucets, light fixtures and even switch plates can take a space from ordinary to inspiring. Area rugs, lamps and plants are also quick ways to add life and warmth to a room with the convenience of portability. Because they are easily changeable, updating “unattached” items can instantly modernize a space with a fresh style.

- And don’t forget first impressions—exactly how fast are prospective buyers driving past the home? No brake lights? A quick tap and then accelerate? Or do they come to a full stop to get a better look? That fresh, new interior will never be revealed if the curb appeal of the exterior is blasé. Everything from container gardening and clean welcome mats to new storm doors and shutters can pull that buyer into your drive.

Artistic staging can showcase the best features in a home. But in today’s market, take a refreshing approach—go that extra mile and look for ways to make the home memorable to a potential buyer. AND anything that takes the buyers ‘eye’ away from the house needs to be put up - that includes stuffed animal heads or fish, clutter, velvet Elvis paintings (not kidding!), etc. The buyers need to walk in your home and see a wonderful sense of space and be able to visualize their belongings.

As a member of the Top 5 in Real Estate Network®, I can consult with you to uncover other ways to refresh your particular home.

The two most difficult parts of the home selling process, once the house is under contract, of course, is passing the home inspection and the appraisal process. Today we are going to talk about things you can do to help the inspection process go smoothly.
1. I highly encourage all my sellers to have their home pre-inspected before it goes on the market. It puts the seller in a stronger position because they have a good idea on what the buyer’s would have seen later on and can address it before the house goes on the market. It also allows the seller to negotiate from a position of strength, knowing that there shouldn’t be any surprise from the buyer’s inspection.
2. Put a home warranty in place during the listing period. Old Republic Home Warranty offers free warranties to my sellers during the listing period. Then, when the house is sold, you pass the warranty to the buyer and you pay for it at closing. This gives you some piece of mind during the listing process for things that break down.
3. Make sure that your house is as clean as possible - cleaner than most of keep our houses! It must sparkle! It shows that you care about your home and that you take care of it. That will impress the buyers and the Realtors.
4. Have a copy of the inspection available for the buyer to look at when they visit the home and mark the repairs that you have completed.

I hope these tips help you get really to make it to closing. For more information on Old Republic Home Warranties, please go to www.orhp.com.
Information on Home Inspections go to http://www.advantageinspectionservice.com. (There are more warranties and inspection services to choose from, but these are two that I have had a lot of clients give me excellent report on over the years.).

There are currently 170 home sales pending in East Baton Rouge parish in the $80,000 - $160,000 price range. This is evidence of first time home buyers scrambling to meet the November 30th deadline. The window of opportunity is still open but prospective buyers should understand that the sale must CLOSE by November 30th to qualify. There is talk of the government extended this popular program into next year. Hopefully, the program will be extended - but those who prefer a sure thing should take action now. There are still plenty of homes to consider and mortgage rates are excellent.

Fast forward to the fall of 2014 - what will mortgage rates be? Will home values increase? No one knows the answers to these questions - but I think it is probable that mortgage rates will be higher than today’s current rates and that home values will continue a steady, modest growth in Baton Rouge and surrounding areas. If you rent your current residence, should you continue to rent? Given today’s mortgage rates, available entry level homes on the market AND the $8,000 first time home buyer tax credit program I think one day in the future we will reflect back on today’s market conditions and say “that was as good as it will ever be - I wish I had bought my first house in 2009.”

Bill Arey The Pat Wattam Team

With only a few weeks left to find a home and start your loan process, many first time home buyers will miss out on the $8000 Tax Credit for First Tim Home Buyers. We have tried to caution our clients not to wait until the 1st of November to buy a house because, with the Thanksgiving Holidays, you will more than likely not be able to make the November 30th closing date.

The tax credit, combined with the low interest rates, makes buying a home very attractive! These two programs will allow you to buy more house and reimburse your savings account from the downpayment!!! DO NOT DELAY! Call us today at 225-298-6900 and ask us to help you get started!!