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IS THE MARKET TOO SCARY TO BUY? (By the way – NO!)

December 31, 2010 No Comments

Wow, we are being hit by all sides these days.  The money market is in disarray, lay-offs are high, California hasn’t passed a budget.  Can it get any worse than this?  Why would anyone buy?

 It is being blared across the air waves that it’s as bad as the 1920s.  So, can/should you buy? 

Did you know that A LOT of people made money during that depression.  How?  They did not follow the pack.  This is very hard to do.  The best managers of money (Boone Pickens, Warren Buffet, and Bill Gates – for example) are a different breed of cat.  They seem to operate opposite of the crowd.  They buy when no one else is and they will freely tell you to do the same.  It takes a brave soul to not follow the crowd.

There are statistics that show things are not as bad as they seem.  In Sonoma County home sales are up – way up.  First time buyers can finally afford to buy and they are.  There are multiple offers on many homes.  Homebuyer loans are getting approved and people are moving into these homes.  There are not as many homes on the market as there were at the peak in November 2008, which will serve to drive the prices up.

 The moral of the story is – Buy Now!  If you have the required down payment (as low as 3.5%) and can afford the monthly payment (average $1,420 monthly) – do not wait.

 Look to the statistics of what is occurring in THIS market (Sonoma County, Marin County, etc…).  The statistics show a brisk market that is competitive and will only go up from here.

Forest Tardibuono is a CA DRE Broker with over 20 years experience in real estate and lending.  His number is (707) 523-2099.  See website @ sunpacmortgage.com.

4 Ways to Buy a Home

December 29, 2010 No Comments

 Newly Built Home – There are still newly built homes on the market.  In the Sunday section of the paper these are highlighted with a map.  Sometimes there is special financing available through the builder.

  1. Resale Home – These are homes for resale by the owner.  Sometimes the owner still lives in them and sometimes they are empty.  Financing is available through the Federal Housing Administration (FHA), Fannie Mae and Freddie Mac.  All three agencies require proof of income, a down payment and will examine your credit.  30 year fixed mortgages are available.
  2. Short Sale – These are homes for sale that require homeowner/seller approval and lender approval.  The seller owes more than the property is now worth.  As an example, the mortgage owed is for $400,000, but the house is only worth $250,000 right now.  The seller and their mortgage holder have to approve the contract for sale.  The loan you get will be a typical FHA, Fannie Mae or Freddie Mac 30 year fixed.  But you might have to wait – even up to 6 months – for the mortgage holder to approve a lesser pay-off.
  3. Foreclosure – For some reason a lot of people think buying a foreclosure requires a strange and different loan.  It does not.  BUT FHA, Fannie Mae and Freddie Mac do require an appraisal.  The appraisal cannot say the house is an extreme “fixer” and needs lots of lots of work, or you won’t get a typical 30 year fixed rate loan. If the foreclosure you are looking to buy is tired and dirty – which a lot of them are – you generally can get a typical loan.  If the property is an extreme “fixer” and it is obvious, the appraiser will note this and the lender will not approve your loan.  Other than that, buying a foreclosure is like buying a regular resale.

Forest Tardibuono is a CA DRE Broker with over 20 years experience in real estate and lending.  His number is (707) 523-2099.  See website at: sunpacmortgage.com.

The Wave Is Coming

December 27, 2010 No Comments

We keep hearing reports that the foreclosure wave is coming. It’s on the news and in the paper. Maybe it is, maybe it isn’t. We have not seen much evidence of it in Sonoma County. Here’s what we know so far… Fannie Mae has been holding back flooding the market with foreclosures so prices stabilize. That is working well. The Medium Price has gone up from $305,000.00 to $320,000.00 since January 2009. Foreclosures for sale have gone down from 350+/- in December 2008 to 116 as of today.

IF the wave is coming you need to prepare now. All offers made on foreclosures require loan approval be attached to the offer. Sometimes 2 loan approvals are required. If you do not have loan approval they will not look at the offer. Get loan approval now!

There are 3 types of loan you can get right now. Fannie Mae and Freddie Mac (usually 30 year fixed, low interest rate loans) for as little as 5% down. FHA an easier standard for loan approval and only 3-1/2% down. And lastly, private money from private individuals. These private money loans are needed if the house (a wreak/dump) does not qualify for the government loans. Private money requires 20% to 25% down, but the private party lending the money does not care what shape the property is in.

The Federal Government is keeping rates low. Normally rates are dictated by the yield on Treasury Bonds. Yields are up and rates should be up, but they are not. The guys on Wall Street are befuddled because the normal measure of interest rates isn’t happening. The “wave is coming” is the “perfect storm” for buying. House prices are low and interest rates are low.

This perfect storm lasts for a brief time, so get approved now and be prepared. Forest Tardibuono is a CA DRE Broker with over 20 years experience in real estate and lending. His number is (707) 523-2099. See website @ sunpacmortgage.com.

Oh, there’s no place like home for the Holidays

December 17, 2010 No Comments

‘Cause no matter how far away you roam,

If you want to be Happy in a million ways,

For the Holidays you can’t beat Home Sweet Home.

Ain’t it the truth! As a mortgage and real estate guy, I’m probably a bit more biased towards that viewpoint than most but who will argue the point. Especially at the Holidays! But I must say that the song is especially poignant if you are a Home Owner. And what can possibly be sweeter than buying your first home. Or trading up to your dream home. Or graduating up further, to where you have your Home Sweet Home and can now buy an investment property!

For centuries owning your own home and the land upon which it was built has been deemed the noblest pursuit and a sign of prosperity and security. We all have this ingrained need for this home ownership. It does the heart good to accomplish this. All of us want to accomplish this because it’s in our DNA from eons past. It’s probably a caveman thing originally! I can see my wife picking out the furniture for it with a boulders and logs theme! Or going totally for the animal skins motif like wooly mammoth.

All seriousness aside, I have preached the big 3 reasons to buy in many past Articles – Tax write-offs, appreciation and pride of ownership. That last one is actually buying with your heart, knowing it satisfies way more than the financial side of things. Have you noticed that when you do things from the heart they always seem to work out? It’s funny how it works but accomplishing home ownership can make you “Happy in a milion ways” many of which will end up enhancing your financial situation.

A bit of current events also make for further compelling arguments to buy right now. Rates have recently ticked up. Don’t be left out in the cold on this one. It’s a huge big deal to get a really low rate. The state of California economic forecast brightens. Brighter future means more people have jobs and the competition for homes will stiffen. The median price for homes in Sonoma County recently dipped in October.

All these things can work for you if you just think with your heart right now. There is no place like Home for the Holidays! Your own Home.

Forest Tardibuono- the Guy in the White Hat – is a CA DRE Broker with more than 22 years of experience in real estate and lending. His phone number is (707) 523-2099. Email is Forest. See website @ www.sunpacmortgage.com.

WHAT IS A “HARD” MONEY OR “PRIVATE” MONEY LOAN

December 15, 2010 No Comments

There are several types of loans you can use to purchase or refinance. This applies whether you are buying a home to live in; a home to rent out; or a commercial building. They include the standard 30 year fixed rate mortgage; the government FHA/VA loans; a commercial property SBA loan; or a private money loan.

Private money is money borrowed from private individuals. I bet you’ve borrowed money from a relative. That was a private money loan. It wasn’t from the bank or some other institution. Most private money lenders/investors lend money through a mortgage company (there are laws that require this).

Why would anyone borrow private money? There are some great advantages. The property you want to borrow against may not be something a bank will lend on. Banks require a property be in good shape. What if you are looking for speed? Hard money loans are generally much faster than a bank loan. What if your credit isn’t bank worthy? A private money lender will lend you money even with bad credit!

Private money loans are based largely on equity. The most you will get is 70% of the value of the property. If it’s worth $300,000.00 you will be able to get $210,000.00 If you want a 100% loan, hard money will not work.

An example of a hard money loan just happened. The borrower had almost all of the money to purchase a house. She needed only $75,000.00 more – but didn’t qualify for a bank loan. The purchase price was $231,000.00. She only wanted to borrower 32% of the value. That loan got done within 4 days for a quick close. She beat out other’s that put in offers for the house. She could and did quickly close and her house payment is the payment on $75,000.00.

Another example, a contractor wanted to buy a dump house. No bank would lend on it because it was so dilapidated. The contractor had enough for a decent down payment and proved he had enough to fix it up for resell. He got a hard money loan was able to fix up the house and pay off the loan within 4 months.

Maybe you need a hard money loan!

[youtube=http://www.youtube.com/watch?v=V2ebzlL4360]

Forest Tardibuono is a CA DRE Broker with over 22 years experience in real estate and lending. His number is (707) 523-2099. See website @ sunpacmortgage.com.

RENT VS. OWN

December 15, 2010 No Comments

Have you heard the news? Mortgage interest rates are down to 4-1/2%. Mortgage interest rates have been hovering around 6% for months. But the Feds are trying to stimulate home purchasing and have been working to get mortgage rates down. What does that mean to you when purchasing a house? (Oh – by the way, home sales are at a 3 year high in Sonoma County. But, I digress.)

What does 4-1/2% do for you? Let’s compare a 6% rate to a 4-1/2% rate and your ability to qualify for a home purchase. If you buy a home for $300,000.00 and have a mortgage on it of $270,000.00 your payment @ 6% would be $1,620.00 a month. At 4-1/2% the monthly payment would be $1,368.90. That’s a savings of $251.10 a month.

Put another way – let’s say last month you qualified to buy a home for $300,000.00 because the rate being used to qualify you was 6%. What would you now qualify for since the rate is 4-1/2%? Let’s use the same 6% payment you qualified for before. Your payment of $1,620.00 today will get you a home at a price of $352,000! Wow, that’s quite a bit more!

We have been saying for months now that Sonoma County’s property values have hit bottom and it’s time to buy. Well – more evidence is out – home sales are at a 3-year high in Sonoma County. We knew this was coming several months ago. We are advocates of buying a foreclosure. They are 15% below the other houses on the market and are selling like hot cakes! You can finally afford to buy. Now add to all this news interest rates at 4-1/2%, there will be a bigger surge.

IT’S TIME TO BUY! Rents are going up in this tight rental market (where do you think the people are going when they lose their home to foreclosure? They must rent… making the rental market tight.)

Forest Tardibuono is a CA DRE Broker with over 22 years experience in real estate and lending. His number is (707) 523-2099.
"The Guy in the White Hat"