Wednesday, January 31, 2007

Fed Holds Federal Funds Rate at 5.25 Percent

Fed Holds Federal Funds Rate at 5.25 Percent

The Federal Reserve's Federal Open Market Committee today announced it would maintain the target for the federal funds rate at 5.25 percent. This is the fifth consecutive month the committee opted to keep the key rate unchanged, following gradual increases from 1 percent to 5.25 percent between June 2004 and July 2006. The federal funds target rate is the interest rate charged by banks when they borrow funds "overnight" from each other.

In a prepared statement, the Fed acknowledged positive signs for moderate economic growth in the coming months, including the stabilizing housing market, but still cautioned that some inflation risks remain. Future interest rate increases "will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information," according to the statement.

To search for all available homes for sale in the San Fernando Valley & Santa Clarita Valley, visit:

Banks Move Earlier To Curb Foreclosures

By Ruth Simon
From The Wall Street Journal Online

As the number of borrowers falling behind on their mortgage payments climbs to the highest level in five years, the mortgage industry is trying new strategies to help bail them out.
Much of the attention is on homeowners who in recent years took out adjustable-rate mortgages, a popular way to finance a home when interest rates were low. Now, with rates having moved up, many of these borrowers have recently seen, or soon will see, their mortgage rates adjust higher for the first time.

To head off problems, mortgage companies are reaching out to borrowers earlier. Bank of America Corp. is allowing some borrowers with ARMs to refinance into a different loan at no cost. Citigroup Inc.'s CitiMortgage unit is focusing extra attention on parts of California, Florida and New York where home prices have moved up sharply. It is also contacting delinquent borrowers within days after a missed payment, if it doesn't fit their normal bill-paying habits.
The rise in bad loans also is leading to a pick up in so-called short sales, in which a lender allows the property to be sold for less than the total amount due and often forgives the remaining debt. For the lender, the process can be shorter and less costly than foreclosing, especially in a declining market. For borrowers, it is a way to avoid having a foreclosure on their credit report.

Sheldon Klain, a manager in Dallas, wound up saddled with loans on two homes last year and now is trying to arrange a short sale of one of them. Mr. Klain got into trouble after he moved to Dallas from Las Vegas to take a new job. He bought a home in Dallas, thinking he had found a buyer willing to pay $475,000 for his Las Vegas home. The sale fell through at the last minute and Mr. Klain found himself stuck with two homes and behind on payments on the Las Vegas house.

Mr. Klain says his Las Vegas house, which is in a gated community and has a swimming pool, is valued at $419,000, according to a recent bank appraisal, well below the $440,000 he owes on the property. "The dump in the market put us behind the eight ball," he says.

For some borrowers, efforts to work out bad loans can be complicated by the fact that many mortgages no longer are held by the banks that made the loans. Instead, roughly two-thirds of mortgages are packaged into mortgage-backed securities and sold to investors. How much leeway a borrower is given can vary, depending in part on the rules spelled out at the time the securities are created. Some agreements, for instance, don't permit loan modifications or limit the circumstances under which a loan can be modified. Others put a cap on how many loans can be restructured.

Some 2.51% of mortgages were delinquent in the fourth quarter, according to new data from Equifax Inc. and Moody's Inc. That is up from 2.33% in the third quarter and the highest level since a recent peak of 2.53% in the first quarter of 2002.

The increase in bad loans is broad based, with delinquencies rising in the past year in roughly 80% of the 250 local areas analyzed by Moody's Some of the biggest increases have come in California, where high prices have made it hard to afford a home, and in other once-hot markets such as Las Vegas and Port St. Lucie, Fla. Among the handful of major metropolitan areas where delinquencies have fallen: Salt Lake City, San Antonio and Albuquerque, N.M.

The rise in delinquencies is unusual because it comes at a time when the economy is relatively strong. Even though job growth remains healthy, "the total mortgage delinquency rate is the highest that it's been since the depths of the [2001] recession," says Mark Zandi, chief economist at Moody's He attributes the increase in part to the weaker housing market and the widespread use of adjustable-rate mortgages, many of which now are resetting at higher rates.

What is more, as demand for loans softened, mortgage lenders loosened their standards and made riskier loans, Mr. Zandi says. He expects that nationwide delinquency rates could rise by as much as a full percentage point from current levels in the next year, but he doesn't expect the trend will have a significant impact on the overall economy.

Until recently, mortgage delinquencies were low by historical standards, which Mr. Zandi pegs at about 2%, based on the dollar value of loans that are at least 30 days past due. One reason: Rising home prices made it easy for borrowers who missed payments to refinance or sell their home. That changed as home prices flattened or fell in many areas.

Adding to the pain are higher short-term interest rates, which mean bigger monthly payments for borrowers with adjustable-rate mortgages or home-equity lines of credit. In addition, many mortgages were taken out in the past few years and now are approaching the point in their life when delinquencies typically pick up. An increase in mortgage fraud in parts of the country also has contributed to bad loans, lenders say.

"Keep in mind that 2004 and 2005 were aberrations," with low delinquencies and rapid home-price growth, says Michael Fratantoni, an economist with the Mortgage Bankers Association. He says the biggest increase in delinquencies has been among borrowers with scuffed credit records who took out adjustable-rate mortgages.

To head off potential problems, CitiMortgage contacts borrowers with adjustable-rate mortgages by phone and by mail monthly, beginning months before the rate on their loan resets, to alert them to the upcoming payment increase and explain their options, says CitiMortgage President Bill Beckmann.

Bank of America is using computer models to predict which borrowers may run into trouble -- even before they miss a payment. "We're calling earlier and more often" because it increases the chances that a borrower's problems can be worked out, says Bob Caruso, Bank of America's national servicing executive.

Among the bank's options: Borrowers who miss a payment because of illness or job loss may be allowed to add the unpaid debt to their loan balance, Mr. Caruso says. Other kinds of loan modifications also are becoming more common. These include arrangements that allow a troubled borrower to refinance into a less costly loan or that lower the interest rate on the mortgage for several years to make the payments more affordable.

Mortgage companies also are looking for additional ways to reach financially stretched borrowers. In some of the Midwestern markets where it has bank branch offices, National City Corp. is working with local clergy, United Way organizations, social workers and housing counseling agencies to help borrowers reluctant to talk with their lender. The bank's Web site explains workout options and allows borrowers to apply online for assistance. National City is one of a dozen major lenders behind a national advertising campaign that will, beginning this spring, promote a toll-free number (888-995-HOPE) borrowers can call for homeownership counseling and referrals.

Bank of America says it has seen short sales of homes increase 25% from last year, albeit coming off of relatively low levels. And in San Diego, the number of entries in the local multiple-listing service that include the words "short sale" has climbed to 98 from about 50 a year ago, according to Sandicor Inc., the local multiple-listing service. A short sale can be less of a black mark than a foreclosure on a borrower's credit record, because it indicates the borrower was working with the lender.

There can be downsides for borrowers to short sales. Under certain circumstances, the debt forgiven by the bank may be taxable to the borrower. What is more, convincing a lender to go along with a short sale can be difficult, and borrowers who have a mortgage and a home-equity loan may have to negotiate with two lenders or two departments of the same bank.

"There are all sorts of log jams," says John Izzo, the agent handling the sale of Mr. Klain's Las Vegas house. Mr. Izzo says he is currently working on 19 short sales, but figures just "one in five might be successful."

To search for all available homes for sale in the San Fernando Valley, Santa Clarita Valley and surrounding areas, visit:

10 Questions to Ask Before You Hire an Agent

Not all real estate agents are the same. If you decide to seek the help of an agent when selling or buying your home, you need some good information before you make any moves.

Picking an agent is one of those critical issues that can cost or save you thousands of dollars. There are very specific questions you should be asking to ensure that you get the best representation for your needs. Some agents may prefer that you don’t ask these questions, because the knowledge you’ll gain from their honest answers will give you a very good idea about what outcome you can expect from using this agent. And let’s face it - in real estate, as in life - not all things are created equal.

Hiring a real estate agent is just like any hiring process - with you on the boss’s side of the desk. It’s critical that you make the right decision about who will handle what is probably the single largest financial investment you will ever make.


1. What makes you different? Why should I list my home with you? It’s a much tougher real estate market than it was a decade ago. What unique marketing plans and programs does this agent have in place to make sure that your home stands out favorably versus other competing homes? What things does this agent offer you that others don’t to help you sell your home in the least amount of time with the least amount of hassle and for the most amount of money?

2. What is your company’s track record and reputation in the market place? It may seem like everywhere you look, real estate agents are boasting about being #1 for this or that, or quoting you the number of homes they’ve sold. If you’re like many homeowners, you’ve probably become immune to much of this information. After all, you ask, "Why should I care about how many homes one agent sold over another. The only thing I care about is whether they can sell my home quickly for the most amount of money."

Well, because you want your home sold fast and for top dollar, you should be asking the agents you interview how many homes they have sold. I’m sure you will agree that success in real estate is selling homes. If one agent is selling a lot of homes while another is selling only a handful, ask yourself why this might be? What things are these two agents doing differently?
You may be surprised to know that many agents sell fewer than 10 homes a year. This volume makes it difficult for them to do full impact marketing on your home, because they can’t raise the money it takes to afford the advertising and special programs to give your home a high profile.

Also, at this low level, they probably can’t afford to hire an assistant, which means that they’re running around trying to do all the components of the job themselves, which means service may suffer.

3. What are your marketing plans for my home? How much money does this agent spend in advertising the homes s/he lists versus the other agents you are interviewing? In what media (newspaper, magazine, TV etc.) does this agent advertise? What does s/he know about the effectiveness of one medium over the other?

4. What has your company sold in my area? Agents should bring you a complete listing of both their own, and other comparable sales in your area.

5. Does your Broker control your advertising or do you? If your agent is not in control of their own advertising, then your home will be competing for advertising space not only with this agent’s other listings, but also with the listings of every other agent in the brokerage.

6. On average, when your listings sell, how close is the selling price to the asking price? This information is available from the Real Estate Board. Is this agent’s performance higher or lower than the board average? Their performance on this measurement will help you predict how high a price you will get for the sale of your home.

7. On average, how long does it take for your listings to sell? This information is also available from the Real Estate Board. Does this agent tend to sell faster or slower than the board average? Their performance on this measurement will help you predict how long your home will be on the market before it sells.

8. How many Buyers are you currently working with? Obviously, the more buyers your agent is working with, the better your chances are of selling your home quickly. It will also impact price because an agent with many buyers can set up an auction-like atmosphere where many buyers bid on your home at the same time. Ask them to describe the system they have for attracting buyers.

9. Do you have a reference list of clients I could contact? Ask to see this list, and then proceed to spot check some of the names.

10. What happens if I’m not happy with the job you are doing to get my home sold? Can I cancel my listing contract? Be wary of agents that lock you into a lengthy listing contract which they can get out of (by ceasing to effectively market your home) but you can’t. There are usually penalties and broker protection periods which safeguard the agent’s interests, but not yours. How confident is your agent in the service s/he will provide you? Will s/he allow you to cancel your contract without penalty if you’re not satisfied with the service provided?

Evaluate each agent’s responses to these 10 questions carefully and objectively. Who will do the best job for you? These questions will help you decide.

Monday, January 29, 2007

Fed Likely to Hold Off on Rate Cuts

When Federal Reserve policymakers meet on Tuesday, economists predict that interest rates will be left alone, according to a survey by USA Today.

Economists previously thought the Fed would cut rates in early 2007. However, their tune is changing as recent data suggests the economy is faring better than was expected given the slowdown in housing.

The Fed has left interest rates unchanged since June 2006, after raising them 17 times over two years.

Most of the economists surveyed do not expect a change in interest rates until the fourth quarter, when they think a quarter-percentage-point cut is likely. But opinions vary.

For example, economists at The Conference Board and Bear Stearns predict rates will be higher at the end of the year than they are now.

Timothy Rogers, the chief economist for in South Natick, Mass., says it’s too close to call.

"It could go either way right now. Anyone who comes out and says he knows which way things are going is full of malarkey," he says.

Source: USA Today, Barbara Hagenbaugh and Barbara Hansen (01/29/2007)

Saturday, January 27, 2007

50-year mortgages: low payments, low equity

Get cold sweats just contemplating 30 straight years of mortgage payments? You ain't seen nothing yet.

Home buyers shopping for a loan may notice a new kid on the block: the 50-year mortgage.

Some mortgage lenders see the idea as an alternative to "interest only" loans and a tool to shrink those monthly obligations -- especially in high-ticket areas such as California.

"It's hard for some people to conceive this is happening," says John Marcell, immediate past president of the California Association of Mortgage Brokers. "But it makes a lot of sense. You'll be able to buy a more expensive home than you could qualify for otherwise."

But some consumer advocates and financial professionals worry that buyers who need to stretch payments over 20 more years are coveting too much house.

Read more... click here.

To search for homes in the San Fernando Valley & Santa Clarita Valley visit:

Thursday, January 25, 2007

Real estate: Who's Buying Now

Real estate: Who's buying now
The nation is changing. So is the average home buyer.
By Les Christie, staff writer

Changing American demographics and social norms are altering the real estate landscape: the average home buyer is very different compared with buyers of generations past.

The biggest group of home buyers by far is still married couples, accounting for 61 percent of all homes bought, according to the National Association of Realtors.

But single women now purchase 22 percent of all homes. Single men accounted for only 9 percent of purchases.

According to Pat Vredevoogd Combs, the president of the National Association of Realtors, that shows real change. "Thirty-five years ago, when I started out as a realtor, a single woman couldn't even get a mortgage," she says.

Part of the reason why women have become so big a buying bloc is that more women are single than ever before. The New York Times recently concluded, after an analysis of Census Bureau data, that 51 percent of all American adult women now live without a spouse.

And women are much more financially independent than ever. They account for about 57 percent of all college graduates, almost the reverse of the ratio of 40 years ago.
All this has changed not only circumstances for women but attitudes as well.

"Women are more confident and financially savvy than ever before," says Vredevoogd. "Plus, there are many good mortgage products out there that work well for them."

She says that women benefit from the many of nontraditional mortgage choices they have today. These include small cash down loans that enable recent graduates and divorcees, who may not have a big nest egg available, to achieve homeownership sooner.

The generous assortment of mortgage loans has also helped another emerging demographic: minority homeowners, who now account for 30 percent of all homes bought.

During the 10 years through 2005, homeownership among African Americans grew from 44 percent to 48 percent, according to Vredevoogd. Among Hispanics it grew from 43 percent to 49 percent and among Asians, from 51 percent to 60 percent. All these groups made significant progress toward achieving the level of homeownership of 72 percent that the nation as a whole enjoys.

One rising group of homeowners who require little, if any, assistance consists of buyers from abroad. Just as more Americans are buying vacation homes in foreign countries, so are deep-pocketed foreigners buying second homes here.

According to Janet Branton, vice president of business specialties for NAR, overseas buyers made some $41 billion worth of residential real estate purchases in the United States during 2005.

More foreign buyers hail from Germany than any other location. They account for 13 percent of the total purchases from overseas. Latin Americans are right on their heels, also at 13 percent. Other countries at the top of the list include Australia (11 percent), Japan (10 percent) and the United Kingdom (10 percent).

Many of these overseas buyers, says Vredevoogd, acquire vacation properties in resort areas such as Miami and Ft. Lauderdale in South Florida, Palm Springs, California, and the ski resorts of the Rockies and the Sierras.

To search for all available homes in the San Fernando Valley & Santa Clarita Valley, visit:

Tuesday, January 23, 2007

How to Speed Up the Sale of Your Home

Selling a home is no easy task, and it's even more difficult when you're trying to sell in the dead of winter -- when the weather is bad, the days are shorter and greenery is in short supply.

There are good reasons for selling in the winter, however -- namely, less competition. But you still have to work hard to attract the best customers. According to, it's all about staging. Here are Bankrate's tips for presenting your home in the best way to snag those winter buyers:

Keep walkways and driveways clear of snow and ice. You may not have to mow the lawn or trim the shrubs, but in the winter, consider this duty your "yard work."

Present a warm and cozy home. Make sure the temperature is comfortable and not too cool for visitors coming in from the outside. Turn on gas fireplaces if you have them.

Show during "high-daylight" hours and make your home as light as possible. Clean blinds and curtains and keep them open during daytime showings. Put the highest wattage bulbs in amps and fixtures, and turn the lights on when you show. And wash your windows -- even a little bit of grime gives the impression that the home isn't well cared for.

Set the mood with a little soft background music and some pleasant smells. Light a few candles that give off a nice scent, such as vanilla. Just don't overdo it -- you don't want people to think you're trying to mask a bad smell.

Ask prospective buyers to remove their shoes or slip on paper booties over them. Doing so shows buyers that you are proud of your home and take meticulous care of it.

Emphasize the features of your home that make it a good place to live in the winter. If your roads are regularly plowed and de-iced, be sure to make it known.

To search for all available homes for sale in the San Fernando Valley & Santa Clarita Valley, visit:

(Source: By Marshall Loeb From MarketWatch )

Monday, January 22, 2007

Fewer Sellers Go FSBO in Slow Market

When the housing market slows, sellers know it can be a lot tougher to turn their property into a buyer magnet. With more homes on the market and increased pressure on pricing, buyers have more power in the process.

For-sale-by-owner transaction have fallen over the past decade to 12 percent of all sales today from 18 percent in 1997, says the NATIONAL ASSOCIATION OF REALTORS®.
NAR spokesman Walter Molony says sellers believe real estate practitioners are better equipped to achieve fast sales at top dollar in a weak market, adding that the median price for agent-assisted transactions was about 16 percent higher than FSBO sales last year.

Practitioners orchestrate showings, handle paperwork, and identify serious buyers for sellers, Moloney says.

(Source: National Association of Realtors)

Richard's Notes.... If your thinking of selling your home, hire a local real estate professional who is familiar with your neighborhood, able to use the internet to market your house to its full potential, and able to return calls and emails quickly.

Saturday, January 20, 2007

Top 7 Tips for First Time Homebuyers

Purchasing your first home is a big step, that comes with some very serious decisions. Many homebuyers are intimidated by the process, and continue renting much longer than they should, or need to. However, if you break the homebuying process down into these simple steps, and follow these important tips, you will find the process less intimidating, and much more manageable.

1) Before You Begin, Ask Yourself One Question

Will you live in your next home for at least 3 years? If the answer is "Yes," you should probably purchase, rather than continue renting. With average appreciation, you'll break even on your closing costs after 2 years, and start making money at year three. Every year after that will put more money in your pocket! The most expensive aspect of real estate is buying & selling, so the longer you can live in the home the better. However, purchasing makes sense if you can make as little as a 36 month commitment.

2) You Don't Need a Down Payment!

It always surprises me how many people want to purchase a home, but don't because they believe that a hefty down payment is required. Zero down programs are very common, and are quickly becoming the norm, rather than the exception to the rule. Because your new home is collateral for the loan, there are many banks that will jump at the chance to loan you 100% of its value. Perfect credit isn't a requirement, either. Because real estate typically appreciates in value, it's often easier to be approved for a 100% mortgage than it is to borrow 100% for a car!

3) Get Pre-Qualified

Pre-qualification is a very important step, and the step that first time home buyers dread the most. Qualifying to buy a home is pretty easy and requires relatively little work for you. Pre-qualification is what gives you buying power and allows you to make an offer on your dream home when you've found it. More importantly, pre-qualification will let you know how much your new home will REALLY cost - in monthly payments. A $150,000 or $300,000 home doesn't mean a lot to most buyers - but $1200 per month and $2500 per month are tangibles that everyone can understand. After your lender pre-qualifies you, ask them for a "payment table" that shows you a rough estimate of TOTAL monthly payment based on purchase price. Pick your payment, and you know the price range to shop in.

4) Consult a Real Estate Professional ASAP

Many first time home buyers avoid contacting a Real Estate Agent because they dislike high pressure sales. However, Real Estate Agents have an advantage over traditional salespeople because they have access to the Multiple Listing Service, which is a database that lists roughly 99% of the homes for sale in a given market. This means that your Real Estate Agent doesn't have to sell - he/she merely presents your options. The most important qualities to look for in your Real Estate Agent are his/her knowledge of your specific market and their willingness to help. Interview a few agents and choose one that will help guide you through the process. You'll find the help & insight will be invaluable - and you'll be glad you contacted your Real Estate Agent sooner, rather than later.

5) Make a List of "Must Haves" & "Wants"

Many new home buyers mistakenly think that they will "just know" when they "walk into the one." While some buyers DO fall instantly in love with a home, this is not the norm. You'll find your search is easier, and you will be more confident in your decision, if you take a systematic approach to your search. The best way to organize your search is to make two lists: Your "must haves" and your "wants." Your "must haves" are the absolute necessities in your new home - in fact, you don't even need to view a home if it doesn't have every "must have." Great examples of your "must haves" are price, school district, size, etc... Your "wants" are the qualities that you would like for your new home to have, but it's not a necessity. Great examples of "wants" are color, flooring, kitchen appliances, surround sound, and type of exterior. By taking the time to articulate what you need and want in your new home, you will know exactly what to look for when viewing prospective homes.

6) Pick Your Favorite Neighborhoods

You can always make changes to your house, but you can never change its location. Most home buyers already have a good idea of where they would like to live because of school districts, work, or other factors. However, neighborhoods can be pretty different, even in the same area of the city. Ask your Real Estate Agent to email you a list of homes in the specific area of town you're interested in. Take a drive through the different neighborhoods on the list your Real Estate Agent sends you, and choose your favorites. Pay attention to area amenities, how well the yards & common areas are kept, and if you see a lot of "for lease" signs - which can be an indication of a heavy rental area, and lacking in "pride of ownership." After you have picked your favorite neighborhoods, and you know your "must haves" and "wants," you can literally make a list of EVERY home available that meets your criteria, and view those homes.

7) Make Your Decision!!!

Homebuyers often hesitate after they've found the right home because they're not confident about their decision, or their decision-making process. Your home is probably the largest investment of your life, and it's normal to feel butterflies in your stomach before putting your first home under contract. However, if you do your due diligence - and you have if you followed the steps above - then you will have your bases covered. If you've found a home that meets all of your "must haves," most of your "wants," is in the right neighborhood, and in your budget - it's the home for you! Don't wait and let another buyer take YOUR home!
Buying your first home can seem very intimidating, but can be extremely exciting. If you think that buying a home is right for you, it probably is. Make sure and follow these important tips and you'll know you made the right decision when you find your first home.

To search for available homes in the San Fernando Valley, visit:

Thursday, January 18, 2007

Secrets to simultaneous real estate closings

Selling one house and buying another is like putting yourself between a rock and a hard place.
If you set both closings within the same basic time frame you run the risk of ending up with two mortgages or much worse.

If you schedule them with sufficient time between to solve any closing problems you face the prospect of renting and moving twice.

This is not a rare occurrence -- the National Association of Realtors, or NAR, estimates 6.24 million homes were bought or sold during 2006, and unless you were a first-time buyer or kept your old house as an investment property, most of those transactions involved buying one house and selling another.

But there are steps you can take to protect your best interests.

A dual real estate transaction means you have two choices: a simultaneous closing or a staggered closing. With a simultaneous closing, you set these two transactions as close together as possible, often on the same day -- usually selling first and buying second. With a staggered closing, you build in some time between the two transactions -- days, weeks, months or even more.

First, the bad newsWith a staggered closing, you incur the cost of renting in the interim. You may have to find a place to store some of your belongings and deal with the hassle and added expense of moving twice. You're losing the equity you could be building in a new home. And there's the ever present danger you'll fritter away the profits you've banked from the last sale before you can get into your next home.

A simultaneous closing also has disadvantages. If something goes wrong in the first transaction, you could find yourself in big trouble.

If the first closing fails and you don't walk away with a big fat check, you may not be able to close on the house you're buying. Which could mean you're defaulting on that contract and could lose your earnest money deposit -- often as much as 10 percent or 20 percent of the purchase price.
If this happens at the last minute you, of course, have nowhere to live and have to immediately arrange to have all your possessions put in storage. Obviously this situation could lead to many other expenses and inconveniences. If you're more fortunate, you could quickly arrange for an extra loan to enable you to close on the home you're buying and to cover the period in which you own two homes -- so-called "bridge" financing. At best, you would only have the burden of making two mortgage payments every month.
For more information, click here.

San Fernando Valley Real Estate

Tuesday, January 16, 2007

How to Stop Paying Rent & Own Your Own Home

Don’t pay another cent in rent to your landlord!
It’s a dream we all have - to own our own home and stop paying rent. But if you’re like most renters, you feel trapped within the walls of a house or apartment that doesn’t feel like yours. How could it when you’re not even permitted to bang in a nail or two without a hassle? You feel like you’re stuck in the renter’s rut with no way of rising up out of it and owning your own home.

Well, don’t feel trapped anymore! It doesn’t matter how long you’ve been renting, or how insurmountable your financial situation may seem. The truth is, there are some little known facts that can help you get over the hump, and transfer your status from renter to homeowner. With this information, you will begin to see how you really can:- save for a downpayment - stop lining your landlord’s pockets, and- stop wasting thousands of dollars on rent.


The problem that most renters face isn’t your ability to meet a monthly payment. Goodness knows you must meet this monthly obligation every 30 days already. The problem is accumulating enough capital to make a down payment on something more permanent.
But saving for this lump sum doesn’t have to be as difficult as you might think. Consider the following 6 important points:

1. You can buy a home with much less down than you think. There are some local or federal government programs (such as 1st time buyer programs) to help people get into the housing market. You can qualify as a first time buyer even if your spouse has owned a home before as long as your name was not registered. Ensure your real estate agent is informed and knowledgeable in this important area and can offer programs to help you with your options.

2. You may be able to get your lender to help you with your down payment and closing costs. Even if you do not have enough cash for a down-payment, if you are debt-free, and own an asset free and clear (such as a car, for example), your lending institution may be able to lend you the down-payment for your home by securing it against this asset.

3. You may be able to find a seller to help you buy and finance your home.Some sellers may be willing to hold a second mortgage for you as a "seller take-back." In this case, the seller becomes your lending institution. Instead of paying this seller a lump-sumfull amount for his or her home, you would pay monthly mortgage installments.

4. You may be able to create a cash down payment without actually going into debt. By borrowing money for certain investments to a specified level,you may be able to generate a significant tax refund for yourself that you can use as a down-payment. While the money borrowed for these investments is technically a loan, the monthly amount paid can be small, and the money invested in both home and investment will be yours in the end.

5. You can buy a home even if you have problems with your credit rating. If you can come up with more than the minimum down-payment, or can secure the loan with other equity, many lending institutions will consider you for a mortgage. Alternatively, a seller take-back mortgage could also help you in this situation.

6. You can, and should, get preapproved for a home loan before you go looking for a home. Preapproval is easy, and can give you complete peace-of-mind when shopping for your home. Mortgage experts can obtain written preapproval for you at no cost and no obligation, and it can all be done quite easily over-the-phone. More than just a verbal approval from your lending institution, a written preapproval is as good as money in the bank. It entails a completed credit application, and a certificate which guarantees you a mortgage to the specified level when you find the home you’re looking for.

Consider dealing only with a professional who specializes in mortgages. Enlisting their services can make the difference between obtaining a mortgage, and being stuck in the renter’s rut forever. Typically there is no cost or obligation to enquire.

To sum up, there are many important issues you should be aware of that affect you as a renter. Why on earth would you continue to lose thousands by throwing it away on rent when with your agent you could take a few minutes to discuss your specific needs so that you can stop renting and start owning?

This conversation costs you nothing. And, of course, you shouldn’t have to feel obligated to buy a home at the time your view this. But by taking the time to explore your options, and learn about the ways you can afford to buy a home, think how prepared and relaxed you’ll be when you are ready to make this important step.

Search FREE for homes in the San Fernando Valley & Santa Clarita Valley now by visiting this site:

Friday, January 12, 2007

17 Ways to Save Energy

Get a home energy audit every couple of years with your power company to find ways to cut costs.

Check with your utility company for rebates whenever you install energy-saving equipment.
Add more energy-efficient insulation to your attic, with the appropriate R-value, or resistance to heat flow, for your climate and the type of heating in your house.

Turn down your home thermostat two degrees and save 24 kilowatt hours a month. It might not sound like much, but it adds up.

Buy a programmable thermostat, especially if your home is vacant most of the day. Set it to turn on a half hour before anyone arrives home.

Adjust your thermostat to a comfortable temperature and wait. Turning your thermostat up or down dramatically wastes energy and increases your heating costs.

Lower your hot water thermostat 10 degrees, but no lower than 120 degrees. You'll still get all the hot water you need and save 25 kilowatt hours a month.

Fix leaky faucets -- one drip a second is 20 kilowatts a month.

Invest in weather-stripping kits if you've got drafty doors.

Trade your standard candescent bulbs for compact fluorescent bulbs. They are more energy-efficient, last for years instead of months, consume little power and generate little heat.
Turn off your computer when not in use, or use the energy-saving "sleep" mode.

Seal energy leaks. Caulk over cracks and small holes around windows and exterior walls. Look carefully around plumbing pipes, telephone wires, dryer vents, sink and bathtub drains and under countertops.

Participate in your power company's special energy-saving program. Some programs shut down electric appliances for short bursts of time during peak hours. You hardly notice the difference -- except in your bill.

Buy major appliances that sport the "Energy Star" sticker. That shows the appliance meets or exceeds standards set by the U.S. Department of Energy and the Environmental Protection Agency.

Consider a front-loading washing machine. They use 50 percent less energy and one-third less water. Plus, they remove far more water in the rinse cycle, and that translates into big savings in dryer time.

When building a home or replacing a roof, select a roof based more on energy efficiency than on how it looks. Light-colored roofs, such as white, galvanized metal or cement tile, do the best job of reflecting the sun, and cool quickly at night.

Landscaping with the right mix of trees and shrubs can lower your energy bills by blocking winter winds or the summer sun.


To search for homes in the San Fernando Valley, visit:

Thursday, January 11, 2007

The Buying Power of Women

Women are the CPOs (Chief Buying Officers) of American households, and are rapidly gaining in gender status as the nation's top wealth holders.

According to Tom Peters and other experts monitoring the American marketplace, women now make 83 percent of all consumer buys, including 94 percent of home products, 89 percent of vacations, and 75 percent of all decisions regarding the purchase of the largest investment most of us will ever make -- a house.

As women have increased their earnings, built their own businesses, weathered divorces, widowhood, and taken charge of family bequests, they've grown more independent and wealthy. IRS data indicates women comprise 39 percent of the top wealth holders in the U.S., a category defined as adults with total assets of $625,000 or more. That adds up to some 2.5 million women with combined assets of $4.2 trillion. Significantly, 42 percent of the women in this group will be single or widowed, according to the IRS, by the year 2050.

The IRS notes that this will result in the transfer of an estimated $41 trillion from seniors to the next generation composed mainly of Baby Boomers. Since women tend to outlive men by an average of 5 to 7 years, according to the US Census Bureau, even more wealth will be concentrated in female hands.

But the newest wrinkle in female buying power is young, single women across the country who are fueling a new wave of home buying that is far ahead of their male counterparts. Evidence of this trend recently surfaced in a story in the New York Times that described a boom in the purchase of condos in Brooklyn by young, single women.

The National Association of Realtors (NAR), in a study released last month, reported that young women in the 25-34-age bracket bought 1.76 million homes in the period from July 2005 to June 2006, accounting for 22 percent of the market. That's up from 14 percent a decade ago. The number of single men buying homes stayed flat at 9 percent during the same period.

The median age of single women buying a home for the first time is 32, according to the NAR study. The median income for all single women buyers (including those who have owned before) is $47,300. Their median age is 42, a figure pushed higher by divorcees or widows.
Reasons for this buying trend -- according to various research experts and confirmed by my own experience in the real estate business -- include:

  • Women are surpassing men in higher education degrees (According to the U.S. Department of Education, 57.4 percent of women enrolled in colleges eligible for federal student aid in 2003-4 compared to 42.6 percent of men.)
  • Women are already successful in their chosen careers, and their earning power is higher than it's ever been. “Among 25-34-year olds -- key home-buying years,” says Peter Francese, a demographic trends analyst for Ogilvy & Mather in New York, “these women have good jobs and they make money.”
  • Young women are more concerned these days about building an early nest egg and becoming financially independent in the event Mr. Right doesn't come along. Equally important, in my opinion, is that women are also more willing to trust their instincts and “go for it” when they see a smart investment than they have in the past. A February 2004 study of 1,134 women by Prudential Financial reveals that one in three respondents finds herself more involved in financial decision-making than five years ago.

However, during 20 years in the real estate business, I've witnessed a behavior pattern in women that I find ironic and counterintuitive. Despite their increased education, discretionary purchasing power, and instinct for what constitutes a wise investment, many women -- particularly those in the 34 – 45 demographic -- feel compelled to discuss their buying decisions with men in their lives.

And women are frequently dissuaded from going ahead with what later proves to be a good investment, often to avoid bruising the ego of a spouse, Significant Other, or other influential men in their lives.

Nevertheless, I'm encouraged that women, led by their younger cohorts, are finally getting over that emotional bump in the road to profitable real estate investment and financial independence -- needing a male opinion. This is a refreshing sign in such an active real estate market filled with rich, new opportunities.

From my perspective, I believe we are about to enter a new wealth building period in the U.S. real estate market and, armed with growing financial power and a new independence, women will lead the way.

by Wanda McPhaden
Source (

Wednesday, January 10, 2007

Mortgage Applications Soared Last Week As Interest Rates Fell

U.S. mortgage applications skyrocketed during the first week of 2007 as interest rates fell for the first time in five weeks, lending support to the view that the housing market is stabilizing, an industry trade group said.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity jumped 16.6 to 671.1 for the week ended Jan. 5.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.13%, down 0.09 percentage point from the previous week. Interest rates were above year-ago levels of6.08%.

Monday, January 08, 2007

California builders expect return to 'normal market' in '07

The chief economist for the California Building Industry Association trade group expects housing starts for single-family homes, condominiums and apartments to range from 155,000-170,000 units this year, which could be about the same or slightly lower than in 2006, the group announced this week.

Single-family housing starts in 2007 should range from 110,000-120,000 units, Nevin also stated, compared with about 110,000 single-family housing starts in 2006, and multifamily construction starts are expected to range from 45,000-55,000 units, compared with 58,000 in 2006.

"Keep this year's forecast in perspective -- we are returning to a normal market," Nevin stated. "Producing 155,000 to 170,000 units will be more than any year from 1991 to 2001 and could exceed production levels from 1990 and 2002 as well."
Nevin said he expects production to be especially low in first-quarter 2007 as builders finish selling excess inventory, and he expects construction to pick up later in the year. "We need to be building about 240,000 new homes, condos and apartments a year to meet the need for housing," he stated, adding that fees and constraints on housing make it "all but impossible to meet the need in the entry-level market."

Housing prices will remain soft to stable in most markets, according to Nevin's forecast.
"We are already seeing signs of price stabilization as builders in some markets have sold most of their standing inventory. We expect that trend to accelerate after the first quarter. Because there's still excess inventory, there are still significant concessions, which we expect will drop considerably later in the year," he stated.

In California, the forecast calls for a gain of 180,000 to 210,000 total jobs in 2007, which is on pace to match 2006 and about half that of 2005. Construction costs "appear to be at a standstill" for wood-frame construction, the forecast report states. Home-building costs and land prices are expected to fall in most metro areas of the state in 2007, with "accelerated opportunities for smaller builders to obtain land at prices that are almost palatable, both in suburban and urban areas."

Search for homes in the San Fernando Valley and Santa Clarita Valley.

Thursday, January 04, 2007

Housing to Stabalize in 2007

For many residential real-estate markets in the U.S., this year started with an advantage to sellers and ended with buyers holding the upper hand. But, unlike some people had expected, the switch didn't follow the deafening "pop" of a massive real estate bubble.

That spells good news for both buyers and sellers in 2007, as markets return to balance, prices moderate and, if interest rates remain subdued, sales begin to edge higher.

Many markets saw slower home-price increases and a build-up of inventory in 2006, much to the dismay of optimistic sellers. And while speculators -- investors who many argue are partially responsible for the massive housing boom -- tried to exit the market, buyers began waiting out the correction to get the best prices, causing a drop in home sales.

In many areas, however, the correction wasn't as harsh as some had feared. In fact, the year as a whole might even have been described as "healthy" if the country's perspective hadn't been skewed by the boom of the past few years, said John McIlwain, senior fellow for housing at the Urban Land Institute. The market is still "well within long-term norms," he said.

"I think the story of the year is the bubble that wasn't," McIlwain said. "Instead of a bubble busting, so far it has been a healthy correction."

One of the bright spots of this correction: stabilized interest rates. Rates reversed course and trended down beginning in the summer. Last winter, some interpreted increasing rates as a signal that the real-estate party was coming to an end; now, with the 30-year fixed-rate mortgage averaging just above 6% and a lot of inventory on the market, it's not a bad time to buy, McIlwain opined.

And it does appear that this period of correction may be soon drawing to a close, said Lawrence Yun, senior economist for the National Association of Realtors.

"The past three, possibly four months have been seeing more stabilizing patterns," Yun said.

Inventory appears to be topping off, monthly declines in home sales seems to leveling and mortgage purchase applications appear flat, he said. All are indicators, Yun said, "that perhaps the bottom has already passed or (the market) is trying to reach the bottom over the very short term."

In San Diego, one of the hottest markets during the boom, realty executive Vicky L. Campbell said she's seeing evidence of the stabilization in her local market. October and November turned out to be good months for sales, said the sales manager at Century 21 1st Choice Pacific. She's even more optimistic for the near future as prices become more realistic -- as long as interest rates hold steady. "We're going to have a really good year next year," she said.

To view all available homes for sale in the San Fernando Valley, visit:

12 tips for a mold-free home

Follow these suggestions to keep mold from growing in your home:

Check the exterior of your home regularly for accumulation of ground water.

If you ever see bubbling or dampness in a wall, get the wall opened to see what's causing it.

If your house sits above a foundation and there's a heavy rain, put electric fans under the house to dry the ground.

Fix leaky faucets, pipes and other leaks as soon as you find them.

Have your heating and air conditioning system serviced each year.

Clean and dry out wet or damp areas within 48 hours.

Keep indoor humidity below 60 percent by venting bathrooms and dryers to the outside, using air conditioners and dehumidifiers, using exhaust fans or opening windows when cooking, washing dishes or cleaning, and increasing ventilation.

If you have a leak that saturates carpet, ceiling tiles or upholstery, remove them.
Use paint that has an EPA-approved mold inhibitor.

Clean kitchens and bathrooms with mold-killing cleaners.

Don't carpet bathrooms.

Don't put vinyl wallpaper on walls that are at risk of sustaining water damage.

Monday, January 01, 2007

40 Year Mortgages

The 40-year mortgage, for years a niche product, has gone mainstream. Whether it earns widespread acceptance is another matter.

Forty-year mortgages have lower monthly payments than their 30-year cousins, although they cost more over the life of the loan because the borrower pays interest for 10 years longer. With the lower monthly payments, they are seen as a tool to allow people to buy homes that are unaffordable with 30-year mortgages.

"It allows you the opportunity to have a lesser payment, and for many people it gives the luxury of choice," says Jim Sahnger, a broker with Palm Beach Financial Network in Sewall's Point, Fla.
Forty-year mortgages have been rare because lenders couldn't sell the loans to investors through the government-sponsored enterprises Fannie Mae and Freddie Mac. The mortgages remained on the lenders' books, tying up money for a long time. That state of affairs changed in June 2005, when Fannie Mae started buying 40-year home loans.

For a long time, Fannie Mae would not buy mortgages with terms longer than 30 years. Fannie Mae stuck its toe in the 40-year mortgage pool a year and a half ago when it started a pilot program to buy the long loans from 22 credit unions. Now Fannie Mae has taken the plunge, and will buy conforming 40-year mortgages from any qualified lender.

Borrowers will have a choice of a fixed-rate loan or a variety of adjustable-rate mortgages, or ARMs. A spokesman for rival Freddie Mac says the company doesn't buy 40-year mortgages, but is considering adding them to its product line. However, spokesman Brad German adds, "Borrowers looking for lower monthly payments have plenty of other options to choose from, such as ARMs, interest-only loans or combinations of the two."

The demand for 40-year mortgages has been minuscule, partly because few lenders have offered them. The most-prominent 40-year lender is Washington Mutual. Fannie Mae assumes that more lenders and brokers will offer the long loans now that they can be sold on the secondary market.

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