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Home Financing Challenges

You hear the dismal news everyday, lenders are in not lending, home values are falling, foreclosures are at an all time high and you may wonder how the mortgage crisis affects you.

Record low interest ratesare getting alot of  attention and many potential homebuyers are wanting to know, is now the time to buy a new home?  It could be if you have stellar credit, steady income and don’t mind playing by ever changing rules. One of the biggest impacts that the mortgage meltdown has caused is that underwriting standards are tighter than ever before, leaving many people out of luck when trying to get approved for a home loan. Here are today’s top challenges for home buyers:

1. Credit Score – Defaults and foreclosures have caused lenders to raise the bar on acceptable credit scores. Want those ultra low interest rates? You have to have nearly perfect credit to qualify. In fact, just get approved for a home loan, you’ll need a score well above 600, and if you want to avoid higher rates and your score should be above 700.
2. Income Requirements – The rules of engagement for income and proof of income has changed a lot. Your mortgage application will be checked and verified multiple times. Previous “liar loans” or no documentation loans are now illegal, which hurts the self employed. You may be turned down for any number of things that look strange or can’t be verified on your application, even if you are purchasing with a good bit of cash.
3. Changing Guidelines  - OK – you have credit scores above 700, debt to income below 36% and at least 20% down. You have been employed by the telephone company for 10 years. You’re set, right? Not so fast. Both far reaching regulations and nervous individual lenders keep changing the rules for qualifiers. You may have to jump through many hopes to get your loan approved, even if you look great on paper.
4. Low Appraisals - Short sales and foreclosures may put some bargains on the market, but they also impact the value of other homes in the neighborhood or community. Houses are not appraising for the contract price, slowing or stopping the application process. Inexperienced appraisers also hurt the appraisal process.
5. Condo Approvals – Finally, the condo and townhome market has been hurt by increased regulations, with lenders taking not only the individual buyer into consideration but also the status of the condo building ownership – documenting cash reserves, occupancy and delinquency rates of other occupants. 

It may be tougher than ever to get a home loan, and only time and some success stories will relax the current standards. Hopefully, the strict guidelines will help the overall market long term by slowing foreclosures and delinquent loans.  Do you have a success story or have you experienced challenges with obtaining financing? We would love to hear your comments!

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Oak Glen

Yellow Brick

Homeowners Impacted By Costly Insurance Trends

Many homeowners are feeling the pinch when they open their property insurance bills as many insurance companies are raising premiums at alarming rates. Additionally, some new home buyers are facing challenges finding companies to cover their property at all; and existing homeowners are seeing policies cancelled after years of rate increases.

What’s going on with property and casualty insurance?

1. First of all buyer beware – of Chinese drywall and other inferior materials. Recently, Consumer Reports has highlighted an issue with faulty Chinese drywall. Bought cheaply, thousands of complaints are stating that the product is not only inferior and likely to fall apart, but is actually a health hazard. The problem is not widespread, but presents enough of a trend that insurers are covering their bases by excluding it from coverage or raising rates as a preventive measure against possible claims.
2. Location, location, location – and if your dream home is on a coastal waterway, be prepared to pay more for your homeowners insurance. What’s more, insurance companies are requiring separate deductibles for coastal property – primary insurance and secondary wind, water or specifically hurricane risk. If you file often, be prepared to go without; frequent claims cause insurers to cancel or not renew.
3. Lower home prices are also driving rates up and replacement or rebuilding coverage down. Even if the value of your home falls, shop around for the best price on covering your home in the event of a disaster, and make sure your coverage is adequate.
4. And if things aren’t bad enough, bad credit scores continue to drive up rates on homeowners insurance (as well as auto and other insurance). People with poor credit are considered to be a high risk for responsible behavior and an indicator of future financial trouble. With unemployment rates high and home prices falling, poor credit is driving up rates across insurance plans.

Understand your current homeowners policy and the coverage you are paying for. Shop around – it pays off to compare and switch insurers for better rate plans. And remember, all kinds of market trends can factor in what you pay – and what you get for it.

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29491 The Yellow Brick Road, Valley Center, CA

Amazing home is still lovingly maintained with many upgrades in the last few years. Solar system on roof provides minimal electric bill. Property boasts dual master suites, huge great room, a 5 stall barn with tack room and irrigated pasture. A detached guest house is also offered which was permitted as an office. This home is conveniently located with all paved roads. Enjoy a new kitchen, furnace and AC with in the last 4 years. Outdoors you will find a built-in BBQ, sparkling pool, spa & fire pit. There are three driveway gates including private entrance to guest house.

Step foot into this rambling rancher with 3 entrances for maximum convenience and parking.

A stylish fireplace with built-in heatilator is focused in the living room. Settle in on a cold day in front of the fireplace and relax.

At home chefs will love the new kitchen. It features all new appliances, refaced cabinets and glass fronted upper cabinets with puck lighting great for showcasing your knick knacks.

The dining room provides ample space for a large table and china hutch. Hosting dinner parties for the masses or even the most intimate of company will be a breeze here.

Gather with family and friends in the huge 40 foot great room. This space can be configured multiple ways to fit any lifestyle. Relish in the abundance of sunlight filtered into the room through large bumped out windows.

Open views into the great room is offered from the first of two master suites. The main master suite offers a double door entry, warming fireplace, his/hers walk-in closets and French doors leading to a private patio. Take advantage of the extra storage provided by the built-in shelves.

Each of the additional family bedrooms is nicely sized and would make great guest rooms. You could even utilize one as a home office if needed. They are both bright and comfortable with custom painted walls and neutral carpeting.

Just around the sidewalk outdoors is a guest house with its own entry, driveway and laundry facilities. The guest home features a front and back porch, nicely sized kitchen and ample storage.

The large backyard hosts a sparking swimming pool, hot tub and fire pit which overlooks the barn. The barn boasts 5 stalls plus a tackroom. One of the stalls is currently used for hay storage. Don’t miss this rare opportunity!

Contact Diane Conaway of RE/MAX United for more information or to schedule a showing. Visit www.WelcomeToNorthCounty.com or email DianeConaway@REMAX.net.

31105 Cole Grade Road, Valley Center, CA

Come see this very usable ranch style home in convenient location. Owner has expired Major Use Permit for preschool with parking for 35 cars. This property offers 2 on-site wells and numerous outbuildings.

Enjoy spacious rooms and gorgeous views. The home boasts a living room, dining room and family room. The living and family room both offer fireplaces great for cold nights.

A huge master suite takes up all of the second level. It offers a spacious master bath and wraparound deck with panoramic views.

This property is settled on very level land with fruit trees making the possibilities endless. Animal pens on site accommodate horses and livestock.

Contact Diane Conaway of RE/MAX United for more information or to schedule a showing. Visit www.WelcomeToNorthCounty.com!

Home Inspections vs Home Appraisals – Understanding the Difference

If you are a first time homebuyer, be prepared to learn a lot of new lingo – fast! Two of the most commonly misused terms in the home buying and selling process are inspection and appraisal. A home inspection is not the same as a home appraisal, and you’ll need both.

The home appraisal assesses the market value of a home. Most lending institutions will require a current appraisal to complete a new loan or a refinance. The appraisal is all about what the home is worth, not about the features and the safety of the home. The appraisal serves to validate the price on the home, make sure the home is not over-insured and verify that it meets FHA property standards.

The home inspection is all about the condition of the home and is conducted by a qualified home inspector whose job is to determine that the structure of the house, from foundation to rafters, is sound and safe. Here are some of the features of the home that the inspector will examine to make sure the house is up to current code and safety standards:

• HVAC
• Interior plumbing
• Electrical systems
• Roof and  attic
• Insulation
• Walls, ceilings, floors,
• Windows and doors
• Foundation and basement
• Other structural components

One you purchase your home, you may want to consider conducting a maintenance inspection every three to five years to look for problems or changes that could later turn into expensive repairs. You can find inspectors through the American Society of Home Inspectors (ASHI) or through your local home builders association. Whether you are buying, refinancing or maintaining your home, remember that appraisals are about value and inspections are about condition but both are important!

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