Good Info – Good Decisions

Good Info – Good Decisions

While low inventory is certainly challenging buyers, not having a clear understanding of mortgage financing is also causing issues. By having good information, they are able to make better decisions as well as compete favorably.Mortgage Rate History0517.png

Most buyers don’t realize how the mortgage rate is determined for a borrower. While annual income is important, a good credit score, low debt-to-income ratio, loan-to-value ratio and ability to repay the loan are vital concerns.

A variety of myths seem to permeate the market such as rates are set and released once a day; FHA loans are for first-time buyers only; pre-qualification commits the lender; lender fees are not negotiable and adjustable rate mortgages always go up.

Misunderstanding of actual mortgage practices may be a contributing factor to why more buyers are not taking advantage of what are still historically low mortgage rates.

While getting solid information about mortgages and being pre-approved from a lender are very important, it is only one step in the home buying process. Success in buying a home in today’s market should begin with a real estate professional who will coordinate all the different parts of the transaction including mortgage, title, insurance, inspections.

If you would like a detailed list of listings in Ukiah, Willits, Cloverdale or anywhere else in Mendocino County, Sonoma County or Lake County, just ask. There’s no cost or obligation, just the information you want when you want it. Click Here to Sign Up!

Til next time… May all your deals be easy ones!
Follow me on Twitter @yourmendorealty

Clint Hanks                                   707-391-6000

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Springtime Maintenance

As April showers make way for May flowers, it’s time to start tackling annual upkeep to keep your home in prime condition.

You can start by grabbing a pad and pencil, and walking around your house to note all the miscellaneous maintenance needed in the coming months: the board in your deck that’s begun to lift out of place (the toe-stubber), gutters that need cleaning, debris on the roof that needs removing, a tree with roots encroaching on your home’s foundation, and anything else that grabs your attention.

Sadly, I just had to remove an oak tree that was growing up through my deck. The tree died, so it was a fire hazard, a visual blight, and its branches could’ve dropped on unsuspecting family members at any time. While it can be expensive to take care of some maintenance, the cost of not doing so can be far more costly.

As you walk around, be sure to check the eaves for birds’ nests or hornets’ nests. To eliminate hornets’ nests, there’s a nifty product on the market with a directional nozzle that allows you to spray a nest from 20 feet away—giving you an excellent head start before a swarm of angry buzzing comes your way.

If you have a wood-burning stove, spring is the perfect time to buy wood. Buying it now gives the wood all summer to dry out, and plenty of time for your teenagers to stack it. Do not stack the wood against the house—that’s a recipe for a termite or powder post beetle disaster.

Many of us don’t think about termites or other pests after we purchase our homes unless we see clear evidence of their work. However, pests do a lot of damage before you know they’re there. Each spring, you should put on your overalls and grubby shoes and crawl under your house to look for anything out of the ordinary—moisture, a loose or broken heating/air conditioning duct, and any evidence of pests.

I once had to crawl under a house to re-route a dryer vent. The space was so tight I had to slide on my back, pulling myself along using the joists. As I pulled myself deep into the space, I came nose-to-nose with a black widow nest teeming with baby spiders. It’s amazing how quickly you can move in a tight space with proper motivation. Hopefully your crawl space experience will be less exciting than mine.

As you inspect your crawl space, pay special attention to moisture, either standing water or damp earth, because hot weather will cause that moisture to evaporate and condense on the subfloor, which can lead to dry rot and termite infestations, according to Matt Miller of Mendo-Lake Termite. If you find termite mud tubes (Google this if you don’t know what they look like), black widow spiders, or other unwelcome creepy crawlies, my advice is to call Matt Miller immediately.

The solution to moisture under the house is almost always more ventilation. It may not solve the problem completely, but it will help. Matt says, “I’ve never seen a house with too much ventilation in the crawl space.” Just make sure you cover the vents with screens to keep out the unfriendlies: raccoons, squirrels, skunks, and the neighbor’s cat.

Once your crawl space under the house has been attended to, head up to the attic to make sure nothing is amiss there—no leaks causing fungus or dry rot, and no critters. If you don’t have an attic fan, consider getting one. In Ukiah, attics can get up to 160 degrees, taking years off the life of your roof and wasting electricity because your air conditioner is working harder than it has to.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

 

Reasons to Refinance

Reasons to Refinance

Regardless of the reasons to refinance a home, the basic question to ask is: “Do you plan to live in the home long enough to recapture the cost of refinancing?” There are always expenses involved in refinancing which can be paid in cash or rolled into the new mortgage.

From a strictly financial standpoint, the break-even point is achieved when the cost of refinancing has been recaptured by the monthly savings. It would take approximately 23 months to recapture $4,000 of refinance costs with a lower payment of $175 a month.22683914-250.jpg

  1. Lower the rate
  2. Shorten the term so that the loan will build equity faster and be paid off sooner.
  3. Lower your payment to reduce your monthly cost of housing.
  4. Convert an ARM to a FRM to stabilize your payment due to concern of rising interest rates.
  5. Cash out equity to be able to use the money for another purpose.
  6. Combine a first and second mortgage.
  7. Consolidate personal debt so the interest is tax deductible.
  8. Payoff higher cost debt such as credit cards, student debt, etc.
  9. Remove a person from a loan as in the case of a divorce.

Points paid to purchase a principal residence are tax deductible completely in the year paid. However, the points must be spread over the life of the mortgage on a refinance. For that reason, consider getting a “par” value loan with no points. It may have a slightly higher rate but the interest will be fully deductible and it will lower the cost of refinancing.

Determine the break-even point on your situation by using the Refinance Analysis . Call for a recommendation of a trusted mortgage professional.

Til next time… May all your deals be easy ones!
Follow me on Twitter @yourmendorealty

Clint Hanks                                   707-391-6000

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Hope for the Best, Prepare for the Worst — Prevent Wildfire Damage

With summer right around the corner, now is a good time to prepare your property for the threat of wildfires. Most fires start small. If you are ready, you may be able to stop a fire from spreading. Be sure you know where the closest fire hydrant is, as well as your garden hoses and hose bibs. If you have a well that produces at least two gallons per minute, consider filling a 2000-gallon storage tank so it’s ready if you need it.

Clear flammable brush 100 feet from your home and trim trees 10 feet off the ground. Make sure tree limbs do not hang over your roof and clear any debris off your roof. If you have aboveground utilities in your neighborhood, keep an eye on electrical lines that go through trees—make sure there’s plenty of clearance. A good tip from the University of California Agriculture and Natural Resources Department is to locate woodpiles and other fuel sources at least 30 feet from all structures and maintain a 10-foot clear area around them.

Unfortunately, even with all this preparation, your home can go up in flames. Just ask the families who returned to find ash where their houses used to be in Lake County in recent years. For insurance purposes, you should create a photo or video log of all your possessions. While tedious, it’ll be time well spent if you need an insurance company to pay a claim.

It’s important to know what your homeowners insurance covers, especially in light of a new clause included in some policies, called the brush warranty. The brush warranty says your insurance company won’t cover your home for wildfire damage if your home is within 100 or 200 feet (depending on policy) of brush vegetation, even if the brush is on someone else’s property. With the Valley Fire in 2015 and the Clayton Fire in 2016, insurance companies are doing their best to reduce the risk of huge payouts. If your policy is up for renewal, be sure to read the whole thing before signing it. As I’ve said before, “The big print giveth and the small print taketh away.”

Most renters hear the term “homeowners insurance” and assume it isn’t for them. They’re wrong. While they may not own the structure they’re living in, they have a home where everything except the structure can be covered by a homeowners policy. Much to some people’s surprise, homeowners insurance can cover everything from fire damage to the mailman slipping on your driveway.

When it comes time to buy insurance, I strongly urge you to go with a local agent who can walk you through the various options. When you buy an online policy, no one explains the details. The “deal” you think you’re getting may include a 200-foot brush warranty, for example. As I said, insurance companies are taking a hard look at rural Northern California. Certain areas in Mendocino County have “brush hazard scores” above 80 (on a 100-point scale). Anyone with property with a score in the mid-80s or higher is going to have a hard time finding affordable insurance.

While homeowners insurance is helpful after a disaster, it’s best to be prepared, because some items cannot be replaced. In addition to food, water, and medications for you and your pets, you’ll need clothing and, depending on the situation, you may need your own shelter for a while. You may also need fuel for your vehicle.

If you have time to pack more than the essentials, I recommend grabbing the irreplaceables: photo albums, family heirlooms and keepsakes, important documents, and if you can, your computer. For more information about disaster preparedness, go to www.ready.gov.  They have a wildfire safety toolkit, as well as many other resources.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

 

Indecision May Cost More

Indecision May Cost More

“More has been lost due to indecision than was ever lost to making the wrong decision.” Interest rates have as much effect on housing costs as price and when they are both trending upward, it can be very expensive to wait.25787590cropped.jpg

There can be some legitimate reasons for postponing a purchase such as needing to save the down payment, improve your credit or waiting to find out about a possible transfer. The problem is that prices and interest rates could, and very likely will, go up in the future.

If the price of $250,000 home went up 5% and the interest rate went from 4.5% to 5.25%, the payments would increase by $176.42. The additional cost over a seven-year period would be close to $15,000.

The questions that indecisive buyers need to ask themselves is “how am I going to feel knowing that if I had not waited, I could have been living in the home for less money?” and “What would I have spent the money on if I didn’t have to make the larger payment?”

Use the Cost of Waiting to Buy calculator to find out how much indecision may be costing you.

If you would like a detailed list of listings in Ukiah, Willits, Cloverdale or anywhere else in Mendocino County, Sonoma County or Lake County, just ask. There’s no cost or obligation, just the information you want when you want it. Click Here to Sign Up!

Til next time… May all your deals be easy ones!
Follow me on Twitter @yourmendorealty

Clint Hanks                                   707-391-6000

The post Indecision May Cost More appeared first on Clint Hanks, 707-467-3693.