“Be sure you put your feet in the right place, then stand firm.”
— Abraham Lincoln: was the 16th President of the United States
10 SURPRISING REASONS YOU CAN’T GET A HOME
Getting a home signifies financial security and an investment for the future. Owning a home is part of the American Dream. There are some surprising reasons why you can’t get a home.
1. Down Payment – You may have the required 10%-25% on the asking price of the home you are interested in but how you acquired it and how long you’ve had it could keep you from getting the home. Many times relatives offer young couples the down payment. Lending institutions take this into consideration when looking at the ability of a homeowner to keep up with mortgage payments. Saving the down payment over time lends to the credibility of money management.
2. Credit– Credit history is an ongoing process. Student loans are one of the first obligations a person may have as an adult. Late payments may have a bearing on your ability to acquire a home later in life. Credit scores are also affected by utility payments. Any recurring bill that is paid late may come back to haunt you even though your financial situation is now more sound. Your debt to income ratio ideally needs to be under 45%. Less than a 3 month asset reserve in a bank account will generally keep you from getting a home. Check your credit score with all 3 agencies and make sure there is nothing being reported incorrectly. You need to aim for a score of 660 or better.
3. Job Security – Your job history may be why you can’t get a home. Lenders look for stability. If you jump from job to job, regardless of monetary or career improvement, lenders see you as a financial risk. When the economy takes a downward turn, employers tend to retain employees with seniority. Also taken into consideration is the risk of the job.
4. Parent History – If your parents have a questionable credit history, you may be dealing under their shadow. If parents foreclosed, you may be affected. If they were late with mortgage or credit card payments, you may be looked upon as having the same traits. If you are asked information on parent particulars, you may need to look elsewhere for home financing.
5. Location – The location of a home may affect whether or not a lender is willing to risk mortgaging it. LNG routes, Super Site areas, fault lines, destructive weather patterns all have bearings on mortgage risks lenders are willing to take on.
6. Inspection – More and more, home inspections are being required to seal the closing deal. Hopes have been dashed to learn major expenses must be incurred to pass inspection for the approval of the sale.
7. Condition – Fixer-uppers may offer pricing that appears affordable. If you have no background of construction or home improvement projects completed, lenders are leery to finance such undertakings. They may require a lump sum amount be in an account to cover the improvements necessary to ensure the property does not result in a loss to the lender.
8. Liens – If you owned property before and were subject to liens for unacceptable reasons such as credit card debt or unpaid taxes, you may not get the home you desire. A current homeowner may also have substantial liens that need to be satisfied at closing either from the sale itself or as additional costs to the buyer.
9. History – The history of the home may be the deciding factor that keeps a lender from financing in your behalf. A murder, haunting, nearby sinkhole, or other less favorable activity, bear upon the lender’s willingness to finance such a home.
10. The Bank – Economic conditions and bank lending history may be the reason you can’t get a home. Banks may be leaning toward only very secure clients to up their lending credibility. If a bank turns you down, look to other options before you decide to settle on thinking you can’t get a home. FHA, VHA, or a first time buyer program offer other alternatives for which you may qualify.
If you can’t get a home loan with one lender, chances are good that another institution will also turn you down. You should take some time and work at increasing the good points that will work in your favor. Try again when your situation has improved.
ARE HOME OWNERS HAPPY WITH HOME OWNERSHIP?
Seventy-two percent of home owners say they are satisfied with owning a home, mostly attributing their satisfaction to the pride home ownership brings them as well as the freedom to control what type of home improvements and upgrades they can do to their homes, according to HomeGain’s 2012 Home Ownership Satisfaction Survey of more than 1,400 home owners across the country.
The survey shows that “in spite of declines in the values of homes nationwide, satisfaction among home owners remains high … with nearly 3 of 4 home owners satisfied with home ownership.” Louis Cammarosano, general manager of HomeGain, said in a statement.
The Northeast had the highest percentage of satisfied home owners at 77 percent, followed by the Southeast (73 percent), West (71 percent), and the Midwest (68 percent), according to the survey.
But for those 28 percent of home owners who say they aren’t satisfied with home ownership, the majority blamed it on the price depreciation of their home as the chief reason.
Here are some other differences the survey uncovered for home owner satisfaction verses dissatisfaction:
–The survey found that home owners who purchased their homes three to eight years ago tended to be the most dissatisfied. On the other hand, home owners who purchased their home in the last three years, or more than eight years ago were found to be the most satisfied.
–The home owners who were the most satisfied with home ownership paid less than $75,000 for their home, whereas home owners who purchased a home for more than $800,000 were the least satisifed.
–Home owners purchasing a foreclosed home or a home in a short sale also had some of the highest home ownership satisfaction rates, according to the survey.
HOW TO HELP YOUR CLIENTS BUY A FORECLOSURE
Home buyers can be attracted to the big bargains that foreclosures and pre-foreclosures can offer, but these can be tricky, lengthy transactions to negotiate and there’s a lot to think about before jumping in, real estate professionals say.
Make sure you get a good value: Before a buyer makes an offer on a foreclosure or short sale property, real estate agents say buyers need to carefully review with their agent’s comparable sales prices in the area, the number of nearby foreclosures, the school districts, and close-by amenities–which all can be important factors that can influence home values, says Daren Blomquist, vice president at RealtyTrac.
“You want to be careful if every house is in foreclosure,” Blomquist says. “When you purchase a property in this market, the value will probably go down before it goes up. If it’s the only property in a market, you can probably get a good deal.”
Generally, Alexis McGree, co-founder and president at ForeclosureS.com, says that buyers need to be realistic and shouldn’t expect any more than a 10 percent to 20 percent discount on a bank-owned property.
Watch the condition: Foreclosed homes often are sold as-is, but experts urge buyers to get a home inspection done prior so they know the cost estimates of any repairs needed. “Getting a home inspection is not a requirement, but you can make it a requirement by including an inspection contingency clause in your offer agreement,” says Marvin Goldstein, president of the American Society of Home Inspectors. “No one wants surprises on the last day.” Plus, you may be able to use any condition problems uncovered in the home inspection in negotiations to justify a price discount.
Look for special financing: The Department of Housing and Urban Development offers some options. For example, “the Federal Housing Administration Section 203(k) program is great for foreclosed home buyers,” says Blomquist. “The FHA loans give you more money to help fix up the property.” The loans, which are insured by HUD, allow borrowers to use some of the loan for any needed repairs. The loans require a down payment of 3.5 percent of the purchase price.
Run a title search: Experts also recommend running a title search on the property to find out if the property has any liens from other lenders or whether any property taxes are owed.
BANKS, GOV’T NEAR DEAL ON FORECLOSURE SETTLEMENT
Up to 1 million at-risk, underwater borrowers may be eligible for a reduction on their mortgage principal, if a settlement between big banks and government officials gets the final approval.
The mortgage aid is reportedly on the table as big banks and federal and state government officials are nearing an end to months of settlement talks stemming from foreclosure abuses allegedly made by banks that caused many home owners to lose their home.
“We’re very close to a settlement that would both fix the servicing problems, but also help over a million families around the country stay in their homes and get help,” Shaun Donovan, U.S. Housing and Urban Development Secretary, said during a recent forum at the Winter Meeting of the U.S. Conference of Mayors in Washington.
Under the proposed settlement, major lenders J.P. Morgan Chase, Bank of America, Wells Fargo, Citigroup, and Ally Financial would pay between $20 billion to $25 billion to settle alleged foreclosure abuses.
Donovan also said banks also would reduce the mortgage principal of up to 1 million borrowers by about $20,000 each. Furthermore, he noted that some families who were wrongly foreclosed upon may get compensated as a result of the settlement.
DON’T LAG ON WINTER HOME MAINTENANCE
Homes may require some extra attention when it comes to maintenance to protect itself against the cold, harsh weather.
A recent article at Realty Times offers up some maintenance tips for the winter months:
Keep out drafts. Twice a year check your windows and doors for any air leaks, and add caulking, if needed. If extra caulking won’t suffice and you don’t have the money for a replacement, consider adding a storm door to keep out drafts or at least purchasing a draft blocker, which lies at the bottom of your door to block out the cold air.
Check the heating system. “Central heat and air units need to be checked over,” the Realty Times article notes. “When a unit is well-serviced it will save you fuel and thus money.”
Assess the ductwork. Make a trip to the attic to ensure that any parts haven’t become disconnected as well as a critter hasn’t chewed through any duct work.
Clean the gutters. Gutters can become clogged of leaves or other debris. When that happens, they can hold water, which can eventually rot away the siding or roof of your home. Make sure to keep the gutters clean.
Prevent freezing pipes. “When the weather drops below freezing you need to keep your pipes from freezing,” the Realty Times article notes. “Let faucets drip and unhook all outdoor hoses.”