Thinking about buying a house with an FHA Mortgage?

Well, here's another reason to "Get off that fence", "Pull the trigger", "make the leap" and act RIGHT NOW. 


                                                                                    The Federal Housing Administration (FHA) has changed it’s policies regarding the insurance fund and are to take effect on June 3rd 2013.

The FHA recognizes most, if not everyone, doesn’t have 5, 10 or 20 percent to put down on a home. They say if a buyer meets their guidelines, they're willing to insure the loan. The buyer must pay a monthly mortgage insurance premium (MIP) until the loan reaches 78 percent of the original loan amount. That is until June 3rd.

Beginning June 3, borrowers who apply for FHA insured mortgages will pay for mortgage insurance for the life of their loans. FOR THE LIFE OF THE LOAN!!

Currently the rule says a borrower must pay the insurance for a minimum 5 years and until the loan reaches 78 percent of the original loan amount.

Typically once the 5 years, 78 percent is reached, the mortgage payment is lower and the cost of paying MIP is no longer part of the mortgage. At this point your monthly mortgage payment will be less. Everyone likes a lower payment, right?

Well, come June 3rd, MIP will no longer fall off after 5 years. It will be permanent for any FHA insured borrower who puts down less than or equal to 10%

If you’re on the fence about buying or in the process of choosing a home, I’d say get under contract before June 3rd. For loans with FHA case numbers assigned on or after June 3, 2013, FHA
will collect the annual MIP for the maximum duration permitted under statute. 12 U.S.C. § 1709(c)(2)(B).

For information regarding your financial outlook and what best works for you, I highly recommend, L.A. Mortgage Company.

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Understanding the Offer Process

Understanding the Offer Process....

★ Drafting the Purchase Contract
★ Price bidding and best offers
★ Engaging in a bidding war

Once you’ve decided on the home you want to buy, your real estate agent (ME) or attorney will draft a purchase offer or contract in your name, which he or she submits to the seller’s agent or attorney.The seller can respond in one of three ways: accept the offer, counter it with a higher asking price or reject it.

"Below-price" bidding:

Bidding for a property below its asking price is almost par for the course during what’s called a “buyer’s market.” When there’s a glut of houses or condos on the market, for which there are not enough buyers, a prospective buyer can confidently try to skim 10 percent off the asking price off the property. But if you bid 20 percent below what a seller wants, you may be out of luck. Many experts advise against subtracting more than 10 percent from the owner’s asking price. However, you can sweeten a relatively low offer price by guaranteeing the seller a quick closing and a large earnest-money deposit. Or, if you accept the present state of the home without demanding free upgrades, you could sway the owner in your favor over other bidders.

Highest and best offer:

Sometimes sellers or their agents get restless during negotiations and ask you to quote them your highest and best offer for the home. Don’t go out on a limb if you are not 100 percent sure you want this particular property. You can always reconsider if you feel you made a mistake, after comparing other properties to the one that forced you to make a blind bet on its value.

Full price offers:

There’s no shame in agreeing to pay the seller’s full asking price without bartering. If the home you’re pining for is worth its price tag and you really want it, offer to pay the full asking price. Do you want to see your dream home slip through your hands because you want to pay $1,000 less for it? Another buyer may show up five minutes after you, eager to pay that difference.

Bidding Wars:

Engaging in a bidding war for a property with other interested buyers is not for the faint of heart. Be warned that you may end up paying too much for that dream home and regretting it. As one of an unknown number of rivals in a bidding war, you’re competing against each other blindfolded. Neither you nor your agent will know how many offers the seller has on the table, because real estate license laws allow listing agents to keep such information confidential in the seller’s interest.

You may end up having to cough up a lot of extra cash for the down payment, if you’re the winner with the highest bid. Instead, you could keep your cool and stay off the multiple offer- and counteroffer-carousel. Sometimes, all rivals for your dream home may throw in their towels and call the bidding war quits. Who knows, the seller may then come knocking at your (old) door to ask you to submit your purchasing offer. In that case, you’ll end up the real winner, possibly holding the power to barter with the seller for a lower purchase price.

At all stages of the buying process, keep a written record of negotiations between you and the seller, as well as changes to agreements made with any involved parties. In the heat of the home buying process, you may not remember that you wanted the seller to throw in his basement refrigerator, or check on the size and location of your high-rise condo’s storage unit. 

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5 Tips for first time Home buyers.

5 TIPS FOR 1ST TIME HOME-BUYERS...

Buying a first home can be a scary, confusing and stressful process. Many would-be buyers are understandably nervous at the prospect of making the largest purchase of their lives. Rather than diving in and hoping for the best, you should prepare carefully before you begin the house search.

Following some useful tips will help you turn an overwhelming and intimidating experience into an exciting search that yields the right home!

1.) Establishing a Realistic Price Range:
A common mistake among first-time home buyers is purchasing more house than they can afford. You should not rely on banks to determine what you can comfortably spend on a new home. Banks are adept at determining the amount of monthly debt in the form of mortgage, insurance, credit card, student loan and auto loan payments. They have no way of knowing, however, what you spend each month on groceries, entertainment and utilities.
You should make a list of all monthly expenses, excluding rent or your current mortgage payment. Whatever is left after monthly expenses is the amount available for a mortgage payment and housing expenses such as taxes, insurance and home maintenance. Carefully consideration of your budget saves time by weeding out homes that you cannot afford and guards against overspending.

2.) Seeking Pre-approval:
Getting pre-approved for a mortgage prevents a deal on a dream home from falling apart due to failure to obtain financing. You should compare loans from several lenders to see which one best suits your needs. A pre-approval letter will give you some power to negotiate on a home’s price because the seller will view a pre-approved offer more favorably than an offer that comes without lender pre-approval.
Keep in mind that pre-approval is different from pre-qualification. During pre-qualification, the lender estimates what you can afford. Preapproval is a more involved process in which the lender looks at your credit report and performs an extensive financial background check. At this point, you will get a good idea of the mortgage interest rate as well.

3.) Setting Priorities:
You should compile a list of what you need and want in a house. Needs might include the number of bedrooms, square footage, high-quality schools and commute time. These needs are aspects of the house that either cannot be changed or cannot be changed without substantial cost to you.
Wants, on the other hand, are something you would like and that can be changed. Wants may include a pool or hot tub, landscaping, finished basement or hardwood floors. Making a list of wants and needs helps you focus on what is really important in a house, narrowing the list of prospective homes. Ideally, the new house will include all of the needs and a few wants.

4.) Choosing the Right Neighborhood:
Crime statistics, insurance rates, property taxes and school quality are important considerations for you. Because the neighborhood makes up a large part of a home’s value, take your time to find exactly what suits your needs. You should also consider job commute, traffic during rush hour and proximity to amenities such as shopping, churches and libraries.
Driving through the neighborhood at various times during the day and night will provide a more complete picture of the location. Don’t forget to talk to potential neighbors, who can be a good source of information regarding the neighborhood and residents in the community. Take note that bad neighbors can bring down the value of a house.

5.) Finding the Right Home Inspector:
You will also need a professional home inspection. Even new houses may present costly problems evident only to a home inspector. You should talk to several inspectors before hiring one. You should ask about the inspector’s qualifications, scope of the inspection, how long it will take and the nature of the report you will receive at the end of the process. Main areas covered by the inspection should include quality of construction, integrity of the foundation and condition of plumbing, electrical, heating and cooling systems. If the inspection uncovers serious issues, such as cracks in the foundation, you may decide to back out of the contract or ask the seller to repair the problem. 

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★LENDER CHECKLIST★: What You Need for a Mortgage.

★W-2 forms — or business tax return forms if you're self-employed — for the last two or three years for every person signing the loan.

★Copies of at least one pay stub for each person signing the loan.

★Account numbers of all your credit cards and the amounts for any outstanding balances.

★Copies of two to four months of bank or credit union statements for both checking and savings accounts.

★Lender, loan number, and amount owed on other installment loans, such as student loans and car loans.

★Addresses where you’ve lived for the last five to seven years, with names of landlords if appropriate.

★Copies of brokerage account statements for two to four months, as well as a list of any other major assets of value, such as a boat, RV, or stocks or bonds not held in a brokerage account.

★Copies of your most recent 401(k) or other retirement account statement.

★Documentation to verify additional income, such as child support or a pension.

★Copies of personal tax forms for the last two to three years.

Before meeting with a Lender, be sure to have most, if not all of these items in a safe neat folder. This will greatly expedite the process. :)

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"Bird Streets" Doheny Estates West Hollywood, Ca 90069

Many who work in the entertainment industry of L.A. want to be close to the studios, offices and creative buzz of Sunset Boulevard, but still crave privacy and quiet at the end of the day when they return home – hence the popularity of the Hollywood Hills, with its views and elegant estate homes. Maybe the most elegant of all are the homes are those of the Doheny Estates.  That's Me------>

Located on what are known as the “Bird Streets”, the exclusive Doheny Estates are at the west end of the Hollywood Hills, bordering Trousdale Estates and Beverly Hills. You get here by following the winding streets that crawl past gorgeous residences along the hillside. Once you have reached the Doheny Estates, you’ll find that you have the sparkling lights of Hollywood displayed before you and on a clear day you can see all the way to the Pacific Ocean.

The Hollywood Hills - The neighborhood north of West Hollywood - has a spectacular variety of homes with the best views available in all of Los Angeles. This residential area above the Sunset Strip is home to the highest concentration of celebrities in Los Angeles.

Homes in this neighborhood with a unique "90069" West Hollywood zip code (while actually being located within the city of Los Angeles), are the most expensive cost-per-square-foot average in all Los Angeles, exceeding Beverly Hills and Bel Air.

Whether you are looking to buy or sell a Doheny Estates home, you need the guidance of an experienced realtor who knows the area well. Having lived in the "Birds" has afforded me an intimate knowledge of this neighborhood, it's current market trends, and I look forward to sharing this knowledge with you. :)

*ECONOMIC WEEKLY UPDATE 5/3/13*

This week marked more good economic news! Real Estate related news began Tuesday when NAR reported March resale number of homes under contract Rose 7% from March 2012.

Stocks soared today after a much stronger than expected jobs report. The economy added 165,000 nonfarm payroll jobs. The unemployment rate fell to 7.5%, a 4 year low. The DOW and S&P are on track to end the week up almost 2% and the NASDEQ up 3.3%. Finally, this is starting to shape up as what a recovery looks like! Stocks also were up with the S&P500 ending the month of April at a record high. The major markets finished April with the DOW up 13.3, NASDEQ up 10.2% and S&P up 12% for the year. This run up has been a result of higher than expected earnings, dropping unemployment, robust home sales, rising home prices, dramatically fewer foreclosures, and rising consumer confidence.

As the economy improves, demand for loans increases, and interest rates rise. Rising rates, in turn, drive down the price of bonds. The yield hit 1.75% today as investors jumped into stocks and out of bonds. Minutes from the Federal Reserve meeting last month indicated that policymakers seemed headed to winding down their bond purchasing before a weak March jobs report took them by surprise. They will continue purchases of Treasury’s and agency mortgage backed securities until the outlook for the labor market has improved. If the outlook for labor market conditions improve as anticipated, the Fed will then decrease purchases of massive bond buying in the year and stop them by year-end. If the Fed does in fact try to pull-out and exit the $85 billion bond buying program because the program has either been deemed a success or has become ineffective, it is possible the Fed will face many unintended consequences.

The latest GDP report confirmed that the Housing Sector has become an important contributor to the economic recovery.
Residential fixed investment added to overall economic growth over the past eight consecutive quarters and contributed more than 0.3 percentage points in growth over the first three months of this year. Moreover, near record low mortgage rates should further drive the housing market recovery over the near term.

So where are we now with rates??

This week rates are falling for all types of mortgages, and the average 15-year fixed loan has hit an all-time low of 2.56%, for a second straight week, dropping from 2.61%, both better than the previous low mark of 2.63% set in November. A year ago the 15-year rate stood at 3.07%. The 30-year fixed has now dropped for a fifth straight week to 3.35%, from 3.40% a week ago. After rising as high as 3.63% in March, the rate is again honing in on the 3.31% all-time low seen last November. A year ago the same rate averaged 3.84%.

The five-year ARM sank to 2.56% with an average 0.5 point.
It was down from 2.58% a week ago. The one-year ARM dropped to 2.56% with an average 0.3 point. It was down from 2.62% a week ago.
This week marked the *FIRST TIME* in history the 15-year fixed, five-year ARM and one-year ARM all averaged the same percentage. This week mortgage applications showed a slight uptick and the refinance share of mortgage activity remained unchanged, accounting for 75% of total applications.

What do I have to do to buy a house??

As the spring home-buying season begins, a real estate maelstrom of market forces is making this spring one of the toughest times in memory to purchase a home.

Most agents agree, it's the ultimate sellers' market -- very few sellers and hordes of buyers.
The saying "Cash is King" appears to be the new normal. Many homes that would be purchased in a normal market by average buyers are ending up in the hands of cash-paying investors domestically and from abroad.

In a normal market, increasing demand and rising prices would encourage more sellers to put their homes on the market. But that has been slow to occur because home prices fell so low in the crash that many homeowners can still only sell their homes at a loss or for not much gain. Simply put, nobody wants to sell at the bottom. Prices bottomed only a year ago, and that means we're still too close to the bottom to see a lot of homeowners putting their houses on the market. And there's a very long way to go to where inventory is back up to normal levels.

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