Friday, January 10 2014
It can take years for first-time buyers to save up for their first home’s down payment, but even after that hurdle has been cleared, it can take even more time to secure a mortgage -- if they have neglected the other part of the equation. Their credit rating.
Before first-time buyers in Evansville will be able to move forward with that initial home purchase, they need to ensure that their credit score does not raise the kind of questions that sometimes derails an otherwise well-qualified home loan applicant. This has always been true, but may become even more likely as lending limitations grow increasingly strict.
But it’s the occasional recording error or misstatement that is most easily preventable. Ironically, those often affect perfectly well-qualified buyers—precisely because they have no reason to suspect that a problem could crop up.
The upshot: first time buyers should start reviewing their credit history one year to six months before they intend to buy a home. Since the credit agencies provide upon request free copies of every individual’s report once each year, the only hassle is having to check the details line-by-line (a single reporting error can have a big impact on an overall score). And since it’s not unusual to take 90 days or more to cure a disputed entry, the earlier a first-time buyer begins the process, the better. Individuals can file a dispute online with the credit bureaus, or can hire a credit repair company to assist with disputes. In all cases, claims should be documented and correct information provided immediately.
Once a first-time buyer is certain that his or her reports are accurate, is it time to relax? Hardly. It’s important to continue to monitor those scores to ensure against accidental surprises. Especially, after wholesale credit card thefts sowed confusion and disruption throughout the system, it’s probably wise to assume nothing. Several online services offer credit monitoring (and it’s possible that your bank might provide free monitoring).
From first-time buyers to seasoned investors, I’m here to help my clients every step of the way. Call me today! You can reach me on my cell phone 812-499-9234 or email Rolando@RolandoTrentini.com
Monday, November 18 2013
When a first-time home buyer begins hunting for the prize that has to serve both as a satisfactory home base and a solid investment, most feel a mixture of excitement (a home is a landmark achievement!) and maybe just a touch of apprehension. Like any expense you’ve never encountered before, it’s appropriate to take extra care the first time out — and to pay attention to what experience teaches. Along those lines, here are some mistakes that are easy for a first-time home buyer to make. Fortunately, they’re also easy to sidestep:
1. Waiting for a better rate
Adjustable rates may well be about as low as they’re going to get right now – and some signs point to an increase in the coming months. For a first-time home owner who will be taking out a loan, if the property is right, hesitating to make a commitment based on a loan rate gamble is seldom a good idea.
2. Thinking short term
Consider thinking of a home as a lifetime investment. Even for those who are single or newly-wedded, it’s possible that being open to a house with extra rooms could end up saving considerably on moving, transaction and agent fees, taxes, etc. It’s equally important to look at neighborhoods and how they are changing and developing. If you do resell your home, location can make a big difference in how.
3. Underestimating hidden costs
The monthly mortgage payment isn’t the ultimate bottom line. When a first-time home buyer comes across a property that fills (or exceeds) everything he or she has been looking for, if the mortgage payment looks to be right, it’s easy to overlook other homeowner expenses. Experienced buyers make hardheaded estimates of maintenance fees and property taxes — they will be every bit as consequential as the mortgage bill.
For a first-time home buyer in Evansville, when thoughtful perspective goes into your final decision, it’s that much more likely to be a decision that pays off in the long run. If you are preparing to buy this fall, I’ll be standing by to help get you started! You can reach me on my cell phone 812-499-9234 or email Rolando@RolandoTrentini.com
Monday, March 25 2013
The concept of “starter homes” cropped up after the end of the Second World War, when millions of young families took advantage of low-cost new developments to gain a foothold in homeownership: the emblematic first step in fulfilling the American Dream.
Today’s first-timehome buyers are a lot less predictable—just as the market itself is altogether different. As we recover from the previous years’ economic declines, which temporarily suppressed the number of Evansville home buyers, the combination of low interest rates and historically affordable home prices allows many to aim for bigger and more accommodating housing— skipping the starter home altogether.
For sure, the market hasn’t completely abandoned the starter home idea—especially if you include REO and foreclosure fixer-uppers as financially rewarding targets for handy young householders. The FHA 203(k) loan, which includes a built-in “limited repair” budget, can enable that route. But new home buyers also find other prospects can be newly within reach— among them, larger older homes and newer condominium and townhome choices.
If the combination of bargain prices and low mortgage rates isn’t enough to call prospects to action, the clear trend toward rising prices may do the trick. As inventories of the best bargains begin to shrink and mortgage rate rises look more and more inevitable, home buyers could well imagine a ‘tick-tock’ sound growing louder. For area sellers waiting to make a move upward on the housing ladder, the same conditions could well make this spring’s real estate market the one they’ve been waiting for.
It all means that prospective home buyers in Evansville stand to be rewarded by keeping an open mind about the variety of properties they may now find within reach. By seeking the help of an experienced agent, the widest choice of possibilities will be open for consideration. If you are looking for the area’s most up-to-date market advice, I’m here to make sure you have access to the tools you need to make the right decision—the first time around, and every time after! You can reach me on my cell phone at 812-499-9234 or email: Rolando@RolandoTrentini.com
Friday, February 15 2013
To the extent that rentals reflect wider real estate movement, there is good news and bad news for Evansville tenants. It all depends on how they view it (and how they chart their personal housing strategy). The bad news was not unexpected: for the third straight year, rents were up across the nation in 2012, according to apartment housing industry expert MPF Research.
Although rents rose at a slightly slower pace than in 2011, national forecasts are calling for rent increases in 2013 that match last year’s. The research firm said that apartment rents climbed 3.0% in 2012, down from 4.8% in 2011, but again were above the long-term norm of 2.5% registered over the past 20 years.
For tenants currently in rentals -- both apartments and single-family homes -- rents may be heading up, but the good news is that this price pressure has not yet resulted in a less friendly home buying environment. “Loss of renters to purchase in the now-improving for-sale housing market is having only a very small impact,” according to MPF’s report. In other words, rentals are not being lost in large number even though rents are rising, so floods of first-time homebuyers are not yet adding significant upward pressure on single-family home pricing.
Even with housing prices on the rebound, first-time homebuyers who decide to leave the world of rentals to buy a home now will still benefit from the record low interest rates and distressed property bargains that result in historically affordable home prices.
Another group that would hail rising rental rates are investors. "Most places are starved for new product right now, so properties that will complete over the coming year appear likely to do incredibly well, generally without hurting the results for the existing stock," according to Greg Willett, MPF’s vice president.
Whether you are looking to buy or sell a rental home in Evansville or the surrounding areas, conditions warrant a thorough look at the opportunities available now and those opening this spring. Call me to get started on a plan of action! You can reach me on my cell phone at 812-499-9234.
Tuesday, February 08 2011
First-time home buyers once set out to buy a “starter home,” which refers to an entry-level property that is affordable and often needs some updating. But new buyers are forgoing the “room for improvement” home, and are getting more choosy in their home shopping.
Eighty-seven percent of first-time home buyers said they want to purchase a home that is move-in ready, according to a survey from Coldwell Banker Real Estate, which surveyed 300 first-time home buyers in the last year. First-time home buyers made up half of the market in 2010, according to the National Association of REALTORS®.
"There's a real 'aha' moment for sellers revealed by this survey that the condition and quality of their home matters a great deal to first-time home buyers," says Diann Patton, a consumer real estate specialist with Coldwell Banker Real Estate LLC. "On top of that, our agents have reported that on average, first-time home buyers now look at more than 11 homes before making decisions, which is higher than in the past. They can be choosy about what appeals to them and are recognizing the benefits of the low prices and wide selection of homes in many areas."
Location is a key deciding factor when looking for a home: 78 percent of new buyers said the home had to be in an area convenient to shops and services, according to the survey. What’s more, three-quarters of buyers said it was important to be near their workplace, and nearly two-thirds said it was important to be close to "highly rated" schools.
Many first-time home buyers said the current real estate market offered them more opportunity than they had expected. For example, half of new buyers said they found a home in a more desirable neighborhood than they expected; 61 percent were able to get the home at a better price; and 40 percent got more space than expected.
Source: “Coldwell Banker Real Estate Survey: First-time Buyers Demand New Kind of ‘Starter Home,’” Marketwire (Feb. 8, 2011) http://www.realtor.org/RMODaily.nsf/pages/News2011020801?OpenDocument
Thursday, July 01 2010
After a close brush with a deadline that could have impacted tens of thousands of home buyers, the U.S. Congress last night passed an extension of the Home buyer Tax Credit closing deadline.
The extension is included in the Home Buyer Assistance and Improvement Act (H.R. 5623) and will prevent as many as 180,000 home buyers from losing their eligibility for the tax credit through no fault of their own. These households had home purchase contracts pending as of April 30 and had until June 30 to close on their purchases to claim the federal tax credit. Under the legislation that passed last night, these households now have until September 30 to close.
The NATIONAL ASSOCIATION OF REALTORS® supported extension of that closing deadline because buyers are experiencing delays in getting their financing closed. The delays are the result of the large number of transactions that are short sales, which can take a long time to close, and the rush of transactions lenders are processing from buyers submitting contracts before the April 30 contract deadline.
The legislation, which now goes to President Obama for signature, is designed to create a seamless extension of the closing deadline; there will be no gap between June 30 and the date the President signs the bill into law.
NAR worked closely with congressional leaders on both sides of the aisle in supporting lawmakers' passage of the legislation, which the association says will help provide additional stability to real estate markets across the nation.
Separately, the U.S. Senate also last night passed the National Flood Insurance Program Extension Act of 2010 (H.R. 5569), which extends the National Flood Insurance Program until September 30. This will allow home purchases in the 100-year floodplain to move forward. The House passed the bill last week.
When signed into law by the President, the bill, which will apply retroactively, will cover the lapse period from June 1 to the date of enactment of the extension. Without flood insurance, households buying homes in the 100-year floodplain cannot obtain mortgage financing.
More information on both pieces of legislation is at REALTOR.org.
Source: NAR http://www.realtor.org/RMODaily.nsf/pages/News2010070101?OpenDocument
Saturday, March 27 2010
A recent report from the National Association of Realtors shows that existing home sales dipped slightly in February, partially due to winter storms.
Friday, March 19 2010
Realtors cite federal tax credit, very low interest rate.
The $6,500 federal tax credit for home-owners buying their next home is being credited for part of the upward movement in house prices in Vanderburgh and surrounding counties.
According to a report by the Evansville Area Association of Realtors, the sale price of single-family homes in Vanderburgh, Warrick, Posey and Gibson counties in January and February increased by 13.5 percent over the same period last year.
Chris Dickson, the association's president-elect, said he believes the tax credit brought out buyers for homes in the range of $150,000 to $250,000.
"There are more buyers in the market looking to take advantage of the federal tax incentives," said Dickson.
"The fact that average sale prices in 2010 are starting out strong, compared to 2009, also shows that the housing market in this area continues to rebound."
Dickson also attributed the increase in part to mortgage rates that remain at historic lows.
Bob Reid, president of the Realtors association, agreed.
He predicted March and April also will be strong as the April 30 deadline nears for the expiration of the $6,500 tax credit and for the $8,000 federal tax credit for first-time home buyers.
"There's been no discussion about extending the credits," Reid said.
According to Reid, a person must sign a contract agreement to buy a house by April 30 and must close on the house purchase by June 30 to be eligible for the tax credits.
In January and February this year, the average house sale price in the four counties was $126,282, up from $111,603 in the same two months in 2009, according to the association report.
In Vanderburgh County, the average sale price for the two months rose 7.7 percent to $104,380.
The price was $96,849 for the same period in 2009.
Dickson said Warrick County had the biggest increase, rising by 15.59 percent to $186,818, compared with $161,148 in 2009.
The number of homes sold in the four-county area remained about the same: 341 sold the past two months compared with 343 for the same period last year.
The number of days it took to sell a house on average was 100 in January and February, compared with 110 in 2009.
Because of the increase in the average sale price, the overall volume rose 12.8 percent with more than $43.1 million in homes sold in January and February, compared with $38.2 million last January and February.
"Unfortunately," Dickson said, "many sellers are under the mistaken impression that the market is poor, so they are hesitant to put their homes on the market."
As a result, the number of homes available to buyers dropped to its lowest level in over two years, according to Dickson.
"We need more homes on the market to supply the buyer demand. ... Homes that are in good condition and priced well are selling."
Sunday, February 21 2010
The first-time homebuyers' tax credit, along with low interest rates and home prices, may have led to builders feeling a bit better about the market for new, single-family homes.
Tuesday, November 17 2009
Take a close, hard look at the new $6,500 federal tax credit for "move up" home buyers that passed the Senate and House last week. Though it's been getting second billing to the original $8,000 credit for first-time purchasers -- now extended by Congress through June 30 -- the $6,500 credit for current homeowners just might have your name on it.
How does it work? When will it be available?
First things first: The new credit is available now. It took effect Nov. 6, the day President Obama signed the legislation. This means that if you fit the key criteria -- you've owned and resided in your current home for a consecutive five out of the past eight years, and your adjusted household income doesn't exceed $125,000 if you file taxes singly, $225,000 if you are married filing jointly -- you can claim the credit as soon as you close on a qualifying home.
That could be next week, next month or next spring. There is no actual move-up requirement in the new credit. In fact, homeowners who plan to downsize may prove to be significant users of the credit, along with people who are relocating because of employment changes.
If you fit the criteria and are considering buying another home sometime in the coming year, you might want to speed up the process and sign a contract by April 30 and close by the June 30 expiration date. Think of it this way: If the government is willing to give you $6,500 to act a little faster than you had originally planned, hey, why not?
Some other key features of the $6,500 credit:
-- Whatever you intend to purchase, the home cannot cost more than $800,000.
-- The replacement home must become your main residence. There is no requirement in the legislation that you sell your current home. You could rent it out, turn it into a second home or list it for sale later in 2010 when prices might be higher. If you plan to retain it, however, make sure you move into the new house on the day you close so that there is no question it was your principal residence at that time.
-- Like the first-time-buyer credit, the $6,500 version permits a broad range of dwelling types for your purchase. These include newly constructed or existing single-family homes, condominiums, manufactured or mobile homes, and boats that function as your principal residence. You cannot claim the credit if you are buying a second home or an investment property.
-- The Internal Revenue Service is required by Congress to scrutinize claims -- both the $6,500 and the $8,000 variety -- far more closely in the coming months than it did earlier this year. This is because federal investigators have documented significant instances of fraud -- supposed home buyers who were actually minors as young as 4 and fabricated sales. Investigators also found numerous cases of technical violations, such as purchase transactions among immediate family members, which are prohibited.
The revised rules require taxpayers to submit copies of their settlement statements (HUD-1 forms), along with their requests for credits using IRS Form 5405. Congress's new rules also prohibit minors and those who are dependents on another taxpayer's filings from claiming the credit.
-- Home buyers who go to closing between Nov. 6 and Dec. 31 can claim the $6,500 credit on their 2009 federal tax returns or amend their 2008 returns. Similarly, eligible purchasers in 2010 will be able to file for the credit on their 2009 or 2010 returns.
Talk to your tax adviser regarding timing, which may be affected by your household income applicable to a given year.
If you aren't sure whether you can make the deadlines established for the new credit -- a binding contract by April 30 and a settlement by June 30 -- do not assume that Congress will provide another extension. All the political and budgetary signs point the other way, and some of the primary authors of the credit insist that this is it -- no more extensions next year. Take them at their word.
For an excellent consumer resource with frequently asked questions on both the credits, go to http:/
Saturday, November 07 2009
Expected to contribute approximately $22 billion to the economy, Congress overwhelmingly passed a bipartisan measure this week extending the $8,000 home buyer tax credit to April 30, 2010.
The legislation, which is part of a larger bill that also extends unemployment benefits, was signed into law by President Obama today.
More people are now eligible to take advantage of the law, which includes a $6,500 tax credit for buyers who are current home owners and have lived in their home for five of the past eight years.
Income limits for eligible home buyers were also expanded to $125,000 for single buyers and $225,000 for couples, up from $75,000 for individuals and $150,000 for couples. Qualifying home prices are capped at $800,000.
NAR's Government Affairs Division has compiled facts on the changes made to the current tax credit. NAR members sent more than 500,000 letters to leaders in Congress and made nearly 13,000 telephone calls to Senate offices last weekend to encourage support. So far this year, REALTORS® have spent nearly $14 million lobbying Congress, according to federal campaign finance records compiled by the Center for Responsive Politics.
Sen. Johnny Isakson, a Georgia Republican and a former member of NAR, was key in extending the credit, as well as pushing it through initially. Other prominent boosters include the National Association of Homebuilders and the Mortgage Bankers Association.
Listen to NAR President Charles McMillan's podcast announcement.
NAR economists estimate that approximately 2 million people will take advantage of the tax credit this year.
Sources: NAR and The Associated Press, Julie Hirschfeld Davis (11/06/2009)
Monday, August 24 2009
Bills to extend the maximum $8,000 tax credit for first-time home buyers, which expires Nov. 30, are pending in both the U.S. House and the Senate.