Tip of the Day:Top Ten Mortgage Banker Tips

The Mortgage Bankers of America list the following as their top ten tips for homebuyers. Thought they were worth repeating here, with my two cents thrown in.

1. Check your credit report. It really is the most important of all. The credit report will let you know if you will look attractive to lenders. Knowing what they see is to your benefit.


2. Develop a monthly budget. Know what your monthly expenditures are and determine what is 25% to 28% of your income. It is what lenders are going to be looking at so if you look first you will have some idea of the mortgage payment you can afford.


3. See a lender first. I would switch this one with the next one and encourage buyers to begin early thinking about and sorting the features they need vs want in a house, then go lender shopping. I encourage buyers to make a list of everything they want in a home and then assign priorities to the items sorting needs from wants. I encourage them to revisit the list as they go through the search for a lender process. It helps separate the first emotional response to home buying.


4. Needs vs. Wants (see above)


5. Take time to learn important terms. It is especially necessary for first-time homebuyer to learn the lingo of real estate.


6. Thoroughly investigate the mechanics of the deal - are there additional costs/fees that you need to consider?


7. There are various types of mortgage packages. Take your time ask, questions and take the time to understand the package you and your lender put together.


8. Get pre-qualified. It's fast, it easy, and you do not have to have just one. The reason to get pre-qualified is that it tells you how much money you are likely to have toward your home purchase.


9. Visit as many homes as possible. The best home for you is out there waiting for you to come along and find it.


10. Work, interactively with a mortgage lender. For the process to go smoothly the homebuyer must be willing to answer all the questions the lender may ask so being readily available is important.

The homebuying process, with the right team supporting you, will be a pleasant memory and you home a place to enjoy rather than a burden with the correct mortgage package.

Good Luck and Happy Hunting!

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Tip of the Day: How Much Housing Can You Afford?

There are so many different kinds of mortgages available now that people with special requirements can probably find something that suits them perfectly. But becuase of the great variety, there is no simple, accurate formula that can tell you how big a house payment lenders will qualify you for.
Still, the Mortgage Bankers Association of America does have a way for you to make a rough estimate of how much you can afford if you are choosing a 30-year fixed rate loan -- the most popular mortgage now.
The MBAA says that, in general, you monthly housing costs (including mortgage payment, taxes, insurance and other fixed expenses) should be between 25% and 28% of your local monthly income. Those monthly housing costs plus other long-term debts (expenses extending more than 10 months into the future, such as car payments or other installment loans), should not exceent 36% of your before-tax monthly income.
But be aware that there may be exceptions to the above guidelines. And you might be able to qualify for a larger mortgage using a different kind of loan

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Apple iphone – Just Another All-in-One?

Took a look at the new Apple iphone online. The convenience of having all the tools of the trade available in one handheld item is tempting. The sleek design is worth the price if - and this is an important point - if you are among those who never misplace anything and who's kids don't touch your stuff. If you have never left your phone at home and had to return for it or left your camera at work, while you went to view a potential listing or found your four year old had climb your five drawer chest of drawers to play with your PDA/camera then an iphone is worth a look. Even if you have not plans of purchasing the thing it is worth a look. I admit it is inconvenient to not have the camera with you on a listing appointment but if your leave this camera somewhere you might well miss a lead's call. Another consideration, is that if the phone has to go to the shop, so does the camera, the address database - you get the idea. I may grumble about keeping track of my PDA, camera, and cell phone but the truth is keeping the items separate according to their duties works for me, for now.
It is supposed to be available through Cingular for a year before it becomes available through other services and go for about $500.
Check out the iphone

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Affordable Housing Bill Battle Ahead

Well, the sides are being chosen and the rhetoric has begun in the fight to end Regional Contribution Agreements (RCA) here in New Jersey. Though the Supreme Court said that all New Jersey town must ensure that low and moderate income residents have affordable housing, the more affluent suburban towns have used RCA’s to shift their responsibility to others -- mainly cities.
Now on the one side you have the cities that have been benefiting from the practice and who want the funds to keep coming. On the other side you have the suburbs that fear an influx of low to moderate income residents would tax their services and encourage sprawl. There is some validity to the sprawl claim but New Jersey is one of the most densely populated states in the nation, a certain amount of sprawl goes with the territory. It seems a bit unfair that low to moderate income residents are forced to live in cities because suburban towns have dumped off their responsibility to provide affordable housing. It will be interesting to watch how this plays out.

The bill, A3857 is here for review.
Read the article here

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Do We Need Another Martin?

Dr. Martin L. King Jr. died in 1968 and since his death the work of creating a colorblind America continues. Dr. King said he worked to ensure his children and grandchildren would be judged by their character rather than their skin color. Equal civil rights, though already the law of the land still has a ways to go before it can be said to be the practice on our country. In Alabama, efforts to remove racist language from their state Constitution as recently as 2002, failed. Justice is still peeking around her blindfold, in that a disproportionate number of blacks receive more severe sentencing and racial profiling continues. The economic difference between the rich and the poor continues to widen. So what will it take? Perhaps a societal change is needed. Not a mere enlightening of the society, but a change that affects the spirit. Is it only in tragedy that “We the People” takes on its truest meaning? Can we not find that spirit and bring it to the front without misfortune? Do we need another Martin L King Jr., or can his dream find a home in all of us?

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Homeowner Rights vs Homeowner Assoc. Rules: Who has the final say?

Just read that the New Jersey Supreme Court is considering a case that will decide just who has the final say in what happens in developments when a homeowner objects to the rules of the homeowner association. It is intriguing, this argument that associations act like state entities. Now don't get me wrong, homeowner associations can be rigid in their efforts to maintain a certain "look" to the development, and they have the enforcement clout through fines and liens. What theese homeowners seem to miss is, didn't the look of the development itself play a part in what attracted them to development in the first place? How did they think that look was maintained?
The dispute in Twin Rivers, New Jersey brought by five homeowners seems to have three main components: putting political signs on the lawn (size and number), extra fees for community room use, and an editorial dispute of the association newsletter content.
While some might see the suit as petty - one justice was skeptical about trying to regulate a press entity under which the newsletter falls, the part of the complaint dealing with the lawn signs has the potential to set a precedent that will affect homeowner associations rules throughout the country.
Any thoughts?

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Great Interest Rate Makes Home Buying Easier

As the softening of the housing market continues to affect more industries the Fed continues to hold the interest rate steady. To give the Central Bank its due, they did take notice of the softening of the housing market at their October meeting. By holding the interest rate steady for the last four months, they have helped create a housing marketplace that is great for buyers. The steady lowered rate has meant lower mortgage rates. Sweetening the scene for buyers are builder incentives and giveaways which mean those looking to move into a spankin' brand new homes have some honeypot finds out there. Inventories of existing homes remain high so the marketplace has the potential of fulfilling a variety of homeownership dreams.

Read the Trenton Times Article

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New Jersey Tax Lies?

Oh good grief! It was bad enough when I read that NJ property taxes where the highest in the country and that NJ’s lacked sufficient affordable housing throughout its counties but now it looks like NJ raised its taxes in 2006 to the tune of $1.84 billion while the rest of the states cut taxes by $2.1 billion.
While on the one hand I want to yell at Governor Corzine and the legislature to get us off the number one list in these negative areas but the reality is the state has a $4.5 billion budget deficit. The money to pay it has to come from somewhere.
How can there be a property tax credit for anybody, much less for households making less than $250,000 a year, when there is a projected budget deficit for 2007 of $2 billion. Helloooo!! Is that tax credit going to add to the deficit or is it included in the $2 billion already. Where did the idea of the state running up so much debt come from in the first place? Five million maybe but, two billion no.
How does the government manage cash flow with that kind of deficit? Are there any reserved funds for unexpected disasters or is that what they want to dole out to taxpayers? It makes sense legislators want at the pension and healthcare benefits of unionized state workers. It’s a wonder they don’t want at Medicaid and other programs that help low to moderate income people. They are certainly not going to look at their own and their colleagues’ abuse of the pension and health care system by double dipping.
Still here it is January 2, 2007 and there have been exactly zero of the promised legislation passed or otherwise made ready for Governor Corzine’s pen. The legislature had no problem going home without passing one piece of tax reform legislation. I suppose one year’s tax credit is supposed to take the taxpayer’s mind off the fact that the legislature is looking for another way into your wallet.
Still as I sitting here looking over my computer out the French doors at the tree where my hammock allows me to recover after riding the mower over the grass during the summer, I would not want to live any place else.
Read the article

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Housing Market Looking Up

Well it is official, existing home sales were up 6% in the Northeast and .8% in the West, remained unchanged in the Midwest, and fell 1.6% in the South, according to the National Association of Realtors(NAR). While I’ve heard the words bubble burst, recession, and crash referred to the events of 2006, softening is probably the best explanation of what happened in the real estate marketplace and now things may just be stabilizing.
The Fed said new home sales in November rose (3.4% with the median price $251.700). That means builder inventories are decreasing and buyers are trickling back into the marketplace. Looks like the word has spread sufficiently that we are in a buyer’s market and properties must be priced for this market rather than 2005’s market.
NAR also said median price of existing home sales was $218,000 in November meaning half the homes sold cost more and half cost less. Also NAR reports existing-home inventories are decreasing too. We need both this section to recover to start 2007 right.

May each of you have a Happy and Prosperous Year!

Read the NorthNJ.com report
Read the NAR report
Read NJ.com report

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Doing the Utility Company Shuffle

New Jersey is offering assistance to residents who are struggling to pay gas or electric bills this winter. Guess where they are getting the $1.3 million to help seniors, jobless, and ill -- the utility companies themselves. Mind boggling, right? The next question is: did the utility companies just up and decide to donate the $1.3 million? If you believe that, well … naiveté is cute in children, buddy. No, you have to follow the money and in this case it seems some customers left without collecting their deposits. The money was just sitting there tempting the poor helpless utility companies. Now the utility companies can access that money by donating it to other customers for service. Maybe I am being cynical here -- well yes, I am being cynical, but while the companies may help seniors, the jobless, and the disabled through the winter with the money, and mind you I agree that the cause is worthy, it sure looks like the utility companies wanted access to the abandoned deposit money and this was a way to get it. My hat is off to whoever came up with the positive spin on the shuffling of inaccessible money to company coffers.

Tip of the Day:
Before you move up collect or transfer all deposits on the old home to the new one. Utility companies happily transfer service and deposits if you notify them prior to moving day.

Read the AP NewsFlash.

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Locked Out and No Place to Go

It’s a sad day when a legend dies, it is even sadder when a five-year old child gets locked out of his home during Christmas. Now don’t get me wrong, I respect the music of the “God Father of Soul” James Brown. (Audio link here) I respect what his work did for music. I have some really, really good memories of the beats and riffs in some James Brown standards likeThe Payback, I Got the Feelin’ and Say it Loud, I’m Black and I’m Proud. I hear it sampled everywhere.
It is a shame that according to AP reporter Harry R. Weber, Tomi Rae Hynie and James Brown II have to live in hotel and may not even have access to their clothing or his toys until the legal shenanigans are completed. James Brown has taught one final lesson that has nothing to do with music: homeowner partners need to make sure all property is shared jointly legally, whether its with a partnership agreement or by placing both names on the deed , tax records, etc. Just make sure what ever you do, it is done legally and the original and copies of the proof is outside of the residence like a safety deposit box and a lawyer's office.
Image Courtesy of James Brown Website

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Tip of the Day: When a Feelin’ Won’t Do It

While I am tempted to say if you live in central NJ and your house isn’t selling you should call me especially if you, like James Brown, "Got the Feelin'" and went the For Sale by Owner (FSBO) route, but there are still some things FSBO’s can do.
This article makes some good suggestions the first being to video tape the exterior of the home. The exterior is the first things a visitor or potential buyer will see. Looking at the exterior on video will give you distance and oftentimes clarity the condition of your home. If what the visitor sees is crap grass, over-grown trees, yard debris, trash receptacles, broken fixtures, peeling paint etc. your home will show negatively on the outside – which will have an impact on the price a buyer will offer.
Assuming you have packed away all your personal items for the new house, consider having a consultation on staging your home. Often there is too much furniture in homes making rooms appear smaller which could make your asking price appear inflated.
Finally make sure you have had a comparative market analysis done. The market changes as houses come on and are sold or withdrawn from the market. I offer this service for free with no obligation to sellers and I am others do also.
Read the article for more tips.

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Widen Your Territory or Die

Luxury suburban mini-mansion maker, Toll Brothers of Horsham PA, must have been privy to the proverbial message on the wall. It sure seems like Robert Toll heard it and has heeded the message expanding his luxury home building business to include high-density housing in the form of luxury condominiums in Manhattan, Queens, Brooklyn, and Hoboken, NJ. Toll Bros primarily built luxury single family suburban homes so the change to urban dwellings is notable.

Read Michael Corkery's report.
Image:2002 THE NEW YORK TIMES

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Another Builder Posts Q3 Losses

Hovnanian Enterprises of Red Bank, New Jersey reported a quarterly loss of $117.9 million or $1.88 per share down from $165.4 million or $2.53 in profits during the same period a year ago.

"We did not anticipate suddenness or magnitude of the fall in pricing that occurred this year in many of our communities," Chief Executive Ara Hovnanian said in a statement. "Our profitability and the pace of new home sales in our markets continues to be adver sely impacted by high contract cancellation rates, increases in the number of resale listings and increases in the number of new homes available for sale."

Shares fell 16 cents on the New York Stock Exchange and in after hours trading it fell another $1.25 to $34.
Read the Janet Frankston Lorin report
Read TheStreet.com report

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Affordable Housing Across NJ --Maybe

Assembly Speaker Joseph Roberts’ D-Bell Mawr proposed reform bill of New Jersey’s affordable housing rules has number. It is A-3857. The proposed bill will eliminate regional contribution agreements (RCAs) which allowed municipalities to reassign a portion of their affordable housing responsibility – as much as fifty percent – to cities. The proposed bill also creates housing rehabilitation and assistance program for grants to municipalities. The lack of affordable housing across the state means minimum wage workers would need to 119 hours a week to afford a two-bedroom apartment at $1,103 a month. We will watch what happens with proposed bill A3857.
Read Robert Stern's article.

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Are Incentives the Way to Get Buyers?

Offering incentives is a marketing ploy to get buyers to come look. Builders have the best chance at attracting lookers since they can offer a wider variety of incentives than the average existing home sellers. Still existing home sellers are getting into the act offering to buy points (which would lower monthly payments) and pay fees (pool, lawn maintenance, etc). But for all of the incentives builders and sellers have come up with, paying for incentives instead of just reducing asking price seems the more prevalent practice. Sellers hope lookers see a dazzling incentive carrot and come nibbling. Whether lookers will actually make buy depends on the looker rather than the incentive. We have had about five years of sellers being in control of real estate transactions and now the pendulum has swung the other way. Price reductions bring out buyers rather than lookers.
Read Judy DeHaven's story on Sellers and Incentives

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On and Off Again Katrina Aid

Add another avoidable disaster to those associated with Hurricane Katrina relief efforts. One would think U.S. District Judge Richard Leon would have known better; trying to force the federal government to explain itself clearly is a daunting task. The judge ruled that FEMA must get better explanations of its decision to cut aid to the 4200 Texas families affected by Hurricane Katrina. He pressed to get the explanation finished by today—but FEMA is appealing the decision and asking for an enforcement delay. The ruling on the delay will not come before the middle of the week at best and by then FEMA will have advised Texas officials of aid restoration and sent out letters to Katrina affected families. Should FEMA prevail in appeals court, they would then have to turn around and tell Katrina victims their wretched luck won again. What a mess!
Read CBS News article

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Tax Reform: Home for the Holidays

Legislators went home for the holidays without passing one piece of tax reform legislation. While some legislators wasted time being angry with Governor Corzine because he told them to work on reforming the pension and benefits packages of non-unionized, appointed and elected officials. Still they have gone home and passed nothing. Perhaps the job of policing elected officials is just too big for the legislature… after all it is their colleagues that are double-dipping into the benefits and pension funds. It would have been a lot easier to cut the benefits of the faceless unionized worker than mess with that guy/gal across the isle.
Read The Times article for a different point-of-view.

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Affordable Housing: City or Burbs

With Governor Corzine’s campaign pledge to create 100,000 affordable housing units in the state, one needs to take a look at where those units will go. Many municipalities pay cities through Regional Contribution Agreements (RCA) to handle up to 50% of their afforable housing responsibility. These agreements ideally help all parties concerned but we don’t live in an ideal world.
For example, Trenton benefits from its RCA and is using a portion of its RCA funds to rehab houses and provide homeownership to low income families.
Read Eva Loayza article
Affordable housing in the suburbs is not progressing as well in part because of RCA’s but also because suburban municipalities are in dire need of residents who will not further distress their school districts. Also the infrastructure, at present, may not offer enough support these families.
Read Darryl R. Isherwood article
With State Assembly Speaker Joe Roberts introducing a bill that may eliminate the RCA practice, cities and suburbs may have to scramble to negate the negative effects. What is important though is that whether low income housing is effective in the suburbs will depend on the infrastructure low income families need. Meeting low income family needs beyond the roof over head requires serious consideration.

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Bold and Ambitious Tax Reform: Fantasy?

Well it looks like the legislature is going to pass the tax credit this year. What is unclear is whether the thing will be sustainable. Governor Corzine required a comptroller and a 4% increase cap on future increases. That legislation is on track. Now do get me wrong, the government letting me keep my money is real important to me, nice of them too; but, is that really what’s happening?
First up, the Democrats:
Have property tax assessments been decreased across the board? No, at this point it probably cannot just be decreased. Has anything been done to decrease the amount NJ residents will have to pay next year? Well sort of… If Democrats have their way, most New Jerseyans will pay 20 percent less and the municipality will collect that 20 percent from the state. The state would foot 20 percent of the bill for household with incomes below $100,000 with higher incomes getting less. They are working on making the thing sustainable.
Republican Naysayers:
Republican colleagues have complained that everyone should have the same amount of relief. (If everyone had the same income, equal credits would make sense – what NJ resident would mind an income greater than $100K per year?) Other Republicans say the credit is not sustainable. (Don’t you just hate naysayers who are just so stuck on their side of the isle agendas instead of helping slay the runaway property tax beast?)
Is it too much to hope for a bipartisan effort to reform property taxes that recognizes those most in need of relief have less gross income start with or is bipartisan teamwork a fallacious fantasy?
Read the McNichol and Hester article
Read the AP article.

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