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.

Francis

Silicon Valley Real Estate

Local market trends

useful links

Why it is a good time to buy real estate...

Real estate is positioned well for the future...

From our Coldwell Banker blog...
* "Baby boomers are in their prime real estate buying years and are 78 million strong.

* The Pew Research Center reports minority homeownership levels still have room for improvement. The gaps between white and minority households remain significant with homeownership rates for Asians (59.1 percent), African-Americans (47.5 percent) and Latinos (48.9 percent) well below the 74.9 percent among whites.

* Immigrants are moving to the U.S. by the tune of 1.1-1.5 million a year depending on the source. These are legal immigrants who add value to our country and society. They need housing.

* Echo boomers will likely have similar economic impact in coming years that their baby boomers parents have had through their lives. Echo boomers are born between 1977 and 1994 and are 73 million strong and according to the Joint Center for Housing Studies at Harvard University, 4 million turn 21 each year.

* Household formation is also an important statistic. The Joint Center for Housing Studies at Harvard University projects at least 1.25 million households will be created annually from 2010-2020 and will be led by the echo boomers.

* Between 2010 and 2020, the Census Bureau projects U.S. household growth to be in the range of 1.25 to 1.5 million per year, which will create an additional demand for housing. This should equate to a demand for 12.5 -15 million total new households during this decade.

* People move for lifestyle. There have been 4 million marriages and a record more than 8 million babies born in the last two years indicating there is demand for housing. Many of these growing families have not bought a home and are either renting or living with family as they save for a down payment. We know there is pent up demand." ....


Why is now a smart time to buy?

"I.I.I.P. Inventory, interest rates, incentives and price. In most markets around the nation, home inventory has increased giving buyers a greater choice. At the same time, mortgage rates remain at near historic lows and home prices have seemingly stabilized. 2010 saw median prices increase slightly by 0.2% to $172,900. This has made home affordability the best since at least 1973 and maybe ever."

Thanks for reading, and let me know how I can help, always!
Francis
Silicon Valley Real Estate
Los Altos Specialist

Rates:
Mortgage rates: Week ending 8/4/2011 30-yr. fixed: 4.39 fees/points: 0.8% 15-yr. fixed: 3.54 fees/points: 0.7% 1-yr. adjustable: 3.02% Fees/points: 0.5% (Source: Freddie Mac)

Valuable Appliance Longevity Report Every Home Owner Must Have

Have you ever thought about the life expectancy of your household appliances? How about the materials used to build your home? Well, if you are like many home owners today, you probably haven't given it much thought at all. I mean, who really needs to know how long the shingles on the roof are going to last, anyway, right? But, that is just the point; there are some things, you, the home owner, need to know.

Whether you are buying a home or thinking of selling your home, it is important to understand the estimated life expectancy of all your appliances and other home materials. Buying or selling a house without factoring in the cost to fix aging materials can cost you in the long run.


There are many factors involved that can age a household appliance like a refrigerator or building material such as siding.

• Weather
• Maintenance
• How an item is used.

Here are some examples depending on above factors:
• A refrigerator may last up to 13 years.
• Cooks, - your kitchen cabinets have a life expectancy of 50 years.
• Outdoor lovers, your outside deck has only a life span of 20 years.
• Vinyl Siding will last for the lifetime of the house, and
• Your wood floor will endure for 100 years. Of course, all under ideal circumstances.

The NAHB, National Association of Home Builders released a report in 2007 entitled, "Study of Life Expectancy of Home Components." They list appliances, building materials, as well as other components you may never have thought about. The comprehensive report is only 19 pages long yet boasts as a worthy read of any home owner or potential buyer.

Let me know, as always, how I can help!

Francis

Silicon Valley Specialist
Local Real Estate resources
Silicon Valley Market Trends

Do you rent out one of your properties?

Reporting is now easier for mom-and-pop landlords.

I had send earlier in the year an email to all my clients who rented out a property, to alert them about a new IRS reporting requirement.

Good news: this has changed, for the better. Here is how:

Households that find renters for a second property but are not in the business of real estate don’t have to send an IRS Form 1099 to vendors if the vendors do more than $600 worth of work in a year. Landlords have faced the 1099 reporting requirement for a while, and that requirement continues to apply to them, but last year the requirement was extended to households and entities that rent out property as a sideline but are not in the rental housing trade.

The National Association of Realtors and others strongly opposed that expansion and succeeded in persuading lawmakers to repeal it, which Congress did.

President Obama signed the repeal into law in late April, so, now the requirement applies as it always has: just to those in the business of real estate.

Francis Rolland

Silicon Valley real estate