January 19, 2012

Real Estate Outlook For 2012 – Good News?

 Yes there is promising news for California real estate in 2012. 

 Homes Sales – They are stabilizing overall and were up 4.2% in December in the state.  Of note is that 52% of S.CA home sales are “distressed” properties (1 in 3 foreclosures and 1 in 5 short sales). Good that they are selling because we will not be completely healthy until these homes are moved.  Investors (26% of the sales) are getting great deals as are first time homebuyers and second home buyers – but they have to move fast to get in escrow.  (Best time in long time to buy? – Read what the guy who called the crash says now HERE)

 Home Values – Worst is over in most areas and many realtors are seeing multiple offers, although in the lower price ranges.  With rates in the 4’s homes have not been this affordable for a very long time.  The median price for Los Angeles was $307,000 last month.

 With rents rising homes are becoming cheaper than renting.  For those, like me, who bought when prices were higher, see below (HARP 2.0)

 Getting a Mortgage – Can you afford the payments?  You can probably get a loan.  If you can’t you can’t.  In all cases there is lots of documentation, questions and getting the loan closed on time can be stressful (this is where I shine, folks).  Buying a median price home today, with 20% down would cost only about $1,500/month including property taxes and insurance.  Cheap.

 Underwater? – Washington is finally getting it.  Duh – allowing homeowners to refi today who have always paid their mortgages on time but can’t refi because they are underwater on the loan is smart.  More money in their pocket is more money into our economy.  Yesterday I read that the talk of “low doc” and even “stated income” may be used.  Well, careful boys, but if a guy is working and has been current why not make it easy and let the banks take less? 

 The program is called HARP 2.0 (coming in March, HARP 1.0 sucked).  There would be no minimum appraisal value.  However, only for loans owned by Fannie Mae or Freddie Mac done from 2006 to 2009.

 Commercial Property – David, why is this important?  Strength in office and industrial markets reflects growth prospects for employment.  For homes it is all about jobs. Commercial was in a free-fall in 2008 and 2009 but it has started recovering.  Especially strong jobs recovery is seen in San Diego and coastal areas of LA (Santa Monica particularly).  Latest news at www.CallCommercialCapital.com

 Most Frequent Question – Conforming loans, jumbo loans, Fannie, Freddie what’s the difference?

  • Fannie and Freddie loans are up to $625,500 loan (FHA to $729,750) and the max loan amount varies by county. Down payments as low as 3% (3 ½% FHA and ZERO VA-GO VETS!)
  • Jumbo loans – Over $625,500 and cannot be sold to Fannie or Freddie and no HARP.  Bit higher in rate ½% or so and require at least 20% down.

Remember, for a real estate or commercial loan question Ask David Garrett  310 456 1056


 

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June 10, 2011

Car A/C Health Safety Tip

 

David passes along a health tip he learned from a friend about the air inside your cars

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May 13, 2011

Keeping Strawberries and Your Fico Score Fresh

Free Credit Report Here


 

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May 1, 2011

Spring – Time To Clean Up Your Credit Report?

First checking your credit history when you are making an offer to purchase a home is a risky mistake.  Errors on your report can knock off as much as 100 points on your “fico score” and greatly increase the rate at best or not get approved at worst.  Correcting those errors can take 30 days or longer and that “perfect” house you spent months finding might be gone. 

Some people learn of a drop in their score when the bank spikes their rate. Can they do that? Yes they can.

You can easily check your credit history 4 times a year for free.  There are three credit bureaus and each gives you a free look once a year, so rotate them every 4 months.  Spring is a good time to start. 

For the free reports go to www.AnnualCreditReport.com

Questions about your report?   Ask David Garrett

310 456-1056

AsDavidGarrett@gmail.com

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April 25, 2011

At Home, With Randi – Rose Geranimum Cake

Rose Geraniums are a wonderful variety.   The leaves have the most wonderful scent.  Roll them in your hands and you will enjoy the smell for sometime.  Not to mention, when blooming, the flowers are small and a pale pink.  Easy to propagate and establish many more.
There are probably many things you can bake with the leaves, but I have discovered one that is quite lovely.  A Victorian Rose Geranium Cake.  Very pretty for a child`s birthday.  Get the receipe HERE  

 I was disappointed with the cake recipe itself.  I think they could have made a mistake with the amount of butter.  I think one stick would have been sufficient.  It was too heavy.  However if you have a favorite cake recipe, I would try that.  Just infuse the leaves in the flour and let stand over night.

Otherwise give the original a try leaving out the one stick of butter.  Would make great cupcakes for a child`s birthday as well.
Rose Geraniums, or sometimes called Scented Geraniums can be found at most good nurseries.

Randi


 

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February 27, 2011

Homeowner Write-Offs at Risk?

First-time homeowners often ask me about the tax advantages of home ownership.  They can be significant and, as a rule-of-thumb, the income tax saving annually can equal  the property taxes for many. 

Eligible for deductions for federal income tax include mortgage interest (including some equity and other type “second” loans) and property taxes.  Capital gains on the sale of a primary residence also can be excluded from taxes (the first $250,000 for single taxpayers and $500,000 for married couples).  There are restrictions and limits on all these so always check with a tax professional.

Capital Hill is working on propsals that would put limits on these tax benefits for “high-income” individuals.  So, does that mean just “fat cats” will get trimmed?  That’s no guarantee.  The mortgage interest deductions costs the Treasury $99.8 billion this year and, therefore, is a juicy target.

However, no one anticipates that any of these benefits will be eliminated over even significantly cut within the next few years.


 

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February 26, 2011

What’s My Fico Score? – It Took an Act of Congress

In July 2011 theFair Access to Credit Scores Act (FACS) goes into effect. Finally you will be able to get a copy of your credit score if your application was declined or adversely approved for ANYTHING! (Adversely means anything except the most favorable rate or deal)

This could be for a car, your insurance, department store or even if you are assessed a deposit for utilities! It will apply across the board for any adversely or declined credit.  This is a major win for consumers. You will now be able to get access to your information and hopefully more consumers will realize the COST of having “credit dings or inaccuracies”.

 This also puts the burden to supply the score NOT just on the credit bureaus, but on the utility company, auto dealer, insurance agency etc. The only people who won’t get to see their scores are the ones who get the best rates or deal that’s offered.

(thanks to Jim Hogle, USCCRA, for the heads up)


 

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February 24, 2011

The End For The Fixed Rate Mortgage?

There is no debate that major changes are coming to financing a home.  After over $150 billion in losses to taxpayers from Fannie Mae and Freddie Mac that model of government involvement is over.  Together with FHA the three are financing 90% of homes today.  Not sustainable.

All three programs were created to help more Americans own homes by lowering the cost of financing and increasing their availibilty.  It worked.  However, Fan and Fred, beholding to shareholders first, just got too greedy and took too many chances.  That game is over.

Not easy for Uncle Sam to slip out the back door on this but he is packing his briefcase.  One of the goverment ideas is to reduce their loan volume by 10% a year.  There are other ideas from The Treasury Department and now it’s over to the politicians to find ways to get re-elected over the debates.

Bottom line?  Higher rates and more adjustable rate mortgages (ARMS) which are standard in many developed countries.  The loans will be 30 or even 40 years terms but the rates will adjust monthly to annually.  A fixed rate for the first 3 to 5 years will be common. 

For those who want them I expect a 30 year fixed loan may be still around but the rate will be high.  Something to keep in mind is that most 30 year loans never go 30 years anyway.  We move or we refinance on average every 5-7 years.


 

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February 22, 2011

Fannie Mae, Freddie Mac and Bank Chums Get Slapped – Foreclosure Halt?

A federal judge has put a hitch in the getalong for foreclosures on MERS.  What MERS?  It’s a clever (or so they thought) invention by Fan, Fred and some big banks years ago to save time and money in recording mortgage transactions.  Seems when MERS sought to foreclose some homeowners asked who the hell MERS was (they thought BofA owned their mortgage!).  Good question. 

While the ruling might appear to stop foreclosures, or at least slow them down, it probably won’t.  At least the banks know now they need to be a bit more, well, smart in the future.  What were they thinking?  Read more here http://www.boston.com/realestate/news/blogs/renow/2011/02/oh_my_oh_mers.html


 

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February 22, 2011

When 1 + 1 = 1

Banks just aren’t fair. 

A couple wants to buy their first home and she has good income but a 580 credit score (too low to qualify regardless of income).  He works part time and has a 800 fico score but his income alone is not enough to qualify for a mortgage.  So, simple, take her income and his score and give them the loan:  1 + 1 = 2!

Nope.  Banks take the lowest fico score of both people, in this case 580 and it’s a “no”.   To use her income she needs to be a co-borrower and her fico bumps his.  If his income alone would qualify she could stay off the loan and the deal is done.  That is often how it is done when a low fico score disqualifies or means a higher rate.

Moral – know what’s on your credit (you can check for free at www.AnnualCreditReport.com ) and you might want to check your betrothed’s credit before the trip down the aisle.


 

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