Friday, September 30, 2011

Refinancing? Current loan limits expire this week...

Current loan limits expire this week (today on Friday).

Current conforming loan limits are scheduled to expire Friday, Sept. 30. The maximum FHA, Fannie Mae, and Freddie Mac conforming loan limit will decline to $625,500 beginning Oct. 1, 2011, from the current $729,750 limit, though the majority of counties will fall far below the $625,500 maximum.

The conforming loan limit determines the maximum size of a mortgage that FHA, Fannie Mae, and Freddie Mac government-sponsored enterprises (GSEs) can buy or guarantee. Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.

An estimated 30,000 people will be impacted in California by this new limit.
If you are thinking of refinancing, or a purchase, I can certainly help you choose a reliable, professional lender.

Francis Rolland
Silicon Valley real estate
Local real estate links.

worthy to note: our next E-Waste collection and shredding event: 10/22/11
at: 161 S. San Antonio Rd, Los Altos, CA 94022.
It's easy, it's free, it's green!  Stop by for free shredding service and bring your electronic recyclables with you!  TV's, cell phones, batteries, computer stuff.... ;-)

Friday, September 23, 2011

Can you be an "accidental landlord" ?

Reading this article from Rismedia called: “sign of the times, accidental landlords”, it reminded me of several situations I have seen recently here in the Bay Area, with clients who became exactly that: an accidental landlord.

What do you do indeed when you need to move, but your property would not sell for what you bought it for?

One solution is to sell it at a loss, and recuperate this loss in the new purchase, which is going to be less expensive too; but you cannot do this as easily nowadays. It used to be that you could purchase a home and get a “bridge loan” from the house you were moving from. The bridge loan was predicated on the house being sold within 2 or 3 months. Banks did not have any problem doing this because they were pretty sure your old house would sell fairly quickly. You cannot get such a bridge loan today, and therefore you have to sell your previous house first, and then move to temporary housing and start looking for your new house. Not very convenient…

Another solution is to buy subject to the sale of your current home. This is harder to do than to say; often it means you’d have to pay more, to compensate for a weak bargaining position. It is almost impossible to do if you are looking for a desirable property, and other people want it too.

The remaining option is to rent out your previous house and purchase your new home. But there again the banks are a lot tighter with their money (hum.., your money…), and the rules are much stricter. The ideal is when you have enough income to qualify for 2 loans easily. If you are not in this ideal case, you need to show that your previous house has a tenant in place before they will lend you on your purchase. And there you go, you are an “accidental landlord”.

People do not intend to remain a landlord for long, just the time for the market to improve enough that it will make sense to sell. But actually, if you are going to have savings, it makes sense to spread them over several investment vehicles: the usual suspects are “real estate”, CD’s, bonds, stocks and cash. Over the long term, a real estate investment can be a good retirement account. But remember to check with your tax advisor: depending on your specific situation, the tax implications will not be the same.

If you think you may find yourself in such a situation, call me to discuss your options.
Thanks for reading!

Friday, September 16, 2011

Fix Ups for Property Resale

Are you a homeowner preparing your home for sale? If you are, you may want to consider these 6 real estate fix up tips. They will help you increase your chances of getting the most return at the time of sale, for a modest cost. We can often overlook the simplest things but these 6 tips will ensure that you optimize for the maximum payout.
"Money wisely spent is money wisely earned."
  • Cleaning and de-cluttering - costs $290 but yields a $1,990 Return (put things in boxes, since they will end up in boxes anyway)
  • Brightening - costs $375 but yields a $1,550 Return  (clean and clear windows, update light fixtures)...
  • Smart staging - costs $550 but yields a $2,194 Return
  • Landscaping enhancements - costs $540 but yields a $1,932 return (new flowers, nice colors, clean up...)
  • Repairing electrical or plumbing - costs $535 but yields a $1,505 Return - time to repair these little things that have been left alone...
  • Replacing or shampooing dirty carpets - costs $647 but yields a $1,739 Return
The yields are estimates of course, but a good indication of the results.

The ROI (return on investment) on performing these property fix ups is pretty good, so consider them closely. The time spent performing the tasks are plainly worth the effort.

The 6 home fix up tips were the result of a Home Sale Maximizer Survey released by - the result of a survey of nearly 600 real estate professionals to try to find out what pays the most. The survey was to aid home sellers in determining what to consider to prepare their homes for sale time.

Let me know, as always, how I can help!
Silicon Valley Market Trends

Thursday, September 8, 2011

Buyer beware! lenders need to know everything!

Buyers beware...  When applying for a loan: lenders need to know everything!

1- All funds used for the down payment and closing costs are going to be very carefully scrutinized by the lender:
  • you must provide detailed and accurate information to show which accounts the funds are in and where the funds are coming from,
  • you must document the source of any funds that have been in your accounts for less than 2 months,
  • any changes that occur to your financial condition will need to be explained to the lender,
  • changes to your assets, employment, income or credit scores during the escrow could jeopardize your ability to qualify,
  • provide complete documents, - all pages!
  • provide documents with names, addresses and account numbers.

2- The lender is going to require a letter of explanation and/or support documentation for:
  • recent inquiries or derogatory items on your credit report,
  • recent deposits, transfers of money etc... in your accounts,
  • evidence earnest money deposit has cleared your account.  ... hum, they don't trust much...

3- If you are receiving Gift Funds the lender will require:
  • a gift letter signed by you and the gift donor,
  • evidence of the donors ability to gift the funds (bank statement),
  • evidence of the receipt of the gift funds, in your account.

4- Things not to do during an escrow:
  • do not transfer funds between accounts, nor make large deposits into your bank accounts,
  • do not buy a car!... or spend large amounts of money on stuff..
  • do not change jobs,
  • do not close or open credit card accounts.

Yes, it is a real experience, to get a loan nowadays!  ;-)

For lenders referrals, do not hesitate to contact me.

useful links