Ashtonwoods @ Seville

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HARP 2.0

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*If you are underwater homeowners and would like to refinance, read this now*

For underwater homeowners who want to refinance their mortgages, the details of HARP 2 are coming into focus.

HARP 2 is a liberalized revision of the Home Affordable Refinance Program. (See Bankrate's HARP page.) HARP's goal was to allow homeowners to refinance their loans, even if they owed more than their homes were currently worth. Millions of homeowners are in this predicament because their homes lost value in the bursting of the housing bubble.

HARP was introduced in 2009, and it was designed to help homeowners with mortgages owned by Fannie Mae or Freddie Mac. The program let borrowers refinance at up to 125 percent of their homes' current values. For example, under HARP, if you owed $125,000 on a house that was now worth $100,000, you could qualify for a HARP refi, because your loan was 125 percent of the home's value. But if you owed more than 125 percent of the home's value, you were out of luck.

That 125 percent loan-to-value limit has been eliminated under HARP 2. Under new rules issued on Tuesday, there is no loan-to-value limit on HARP refis -- at least, for borrowers who have fixed-rate mortgages.

The elimination of the loan-to-value limit is the biggest change under HARP 2. Here is a rundown of HARP 2's guidelines:

• The program is for borrowers whose mortgages are owned by Fannie Mae or Freddie Mac, and who got their loans before May 2009.
• HARP had been scheduled to expire at the end June 2012; HARP 2 extends the expiration to the end of 2013.
• There is no loan-to-value cap anymore for borrowers who now have fixed-rate mortgages.
• For borrowers with ARMs, the loan-to-value cap remains 105 percent.
• Borrowers can qualify for HARP 2 refis if they have paid on time for the last six months and have no more than one 30-day late payment in the last 12 months. Originally, HARP didn't allow any delinquencies in the last 12 months.
• Fees have been reduced. Lenders are fond of adding fees to loans that have an added smidgen of risk. Fannie and Freddie call these fees "loan level price adjustments," and the charges easily can climb to 2 percent of the loan amount on HARP refis. Under HARP 2, the fees are reduced to zero percent on loans for 20 years or fewer, and 0.75 percent for mortgages for more than 20 years and for ARMs.

Generally speaking, the changes go into effect  Dec. 1.

Regulators and analysts expect HARP 2 to result in 1 million more refis than would have closed under HARP, with an average loan balance of $150,000 to $175,000.

By Holden Lewis · Bankrate.com

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9 ways to keep lid on energy bills

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No one likes wasting money, especially in these tough economic times. So it certainly makes sense -- dollars and cents -- to make a small investment of time and supplies to close up those heat-wasting air leaks around your home. It'll pay back big dividends in reduced energy bills and a warmer, more comfortable house this winter. So let's look at some of the areas where those drafts may be lurking, and see how to take care of them.

1. Doors and windows: This should be an obvious one. If you can see gaps between your siding and your windows or exterior doors, close them up with a bead of clear or paintable acrylic latex caulk. Larger gaps can be filled with foam backer rod before applying the caulking.

2. Exterior penetrations: Some of these areas are going to be obvious, while some may take a little bit of searching. Some examples of exterior penetrations where air can leak into the house include exterior faucets, dryer vents, exterior electrical outlets, exterior light fixtures, holes that have been drilled for phone and TV cables, conduit penetrations, exit points for plumbing drains, and penetrations for air conditioning lines. Closing these penetrations may require a variety of different techniques, including caulk, expanding spray foam, or, in the case of electrical boxes and fixtures, specific gaskets that are designed to fit the boxes.

3. Exhaust-vent covers: Dryer vents, range hood vents, bath fan vents, and other interior ventilation equipment typically terminate outside the house in a plastic or metal cover that has one or more louvers on it. The louvers are designed to be in the closed position whenever the fan is not in use, so that outside air doesn't leak in. Check all of these louvers to be sure they're closing completely, with no air leaks. If they aren't, you can adjust the spring tension to hold them closed more tightly; add foam weatherstripping tape for a more air-tight seal; or replace the entire vent cap with a new one.

4. Gaps around interior vents and recessed lights: Inside your home, heated air can be leaking out around that same ventilation equipment, where vent pipes pass through the walls or ceiling, or where vent covers meet wall and ceiling surfaces. Recessed light fixtures can also be real air-leakers. Around the vent pipes and recessed light cans, seal any gaps with caulking. For the vent covers and recessed light covers, remove the covers, then adjust the springs and/or add foam weatherstripping tape to create a tight seal between the cover and the ceiling.

5. Heat-duct penetrations: Gaps around heating-duct cans where they pass through the floor or wall allow cold air to enter from the crawl space, while gaps around ceiling-duct cans allow heated air to escape into the attic. To close those drafts, first remove the register, then use a combination of caulking and/or metallic duct sealant tape to close any gaps between the sheet metal cans and the floor, wall or ceiling surface.

6. Fireplaces and woodstoves: Lots of gaps can occur around these appliances. With a conventional fireplace, keep the damper closed except when burning a fire to prevent heated air from escaping up the chimney. Consider investing in a set of air-tight doors, which close off the air leaks and also make your fires more efficient. Look for gaps around woodstove and gas fireplace flue pipes, and air leaks around masonry chimneys. Use a metal collar if necessary around flue pipe penetrations, and seal gaps with heat-resistant sealant specially formulated for this application.

7. Attic and crawl space hatches: These can be real air losers if they're not weatherstripped, so take care of that with some foam tape. Make sure the hatches are insulated as well.

8. Interior doors to unheated spaces: If you have any interior doors that lead to unheated spaces, including basements, garages or attics, be sure the doors are weatherstripped to prevent air leakage. If possible, replace older, hollow-core doors with solid-core or, better yet, insulated metal doors.

9. Sill plates and penetrations: This one's not as easy to deal with, but it's well worth the effort to try to do whatever you can with it. Air can leak both into and out of the house through gaps where the sill plate meets the foundation or the siding, and around plumbing and wiring penetrations drilled through wall plates in various areas. If you have a gap between your siding and the bottom of your exterior wall, especially in older homes where the use of sill sealers was not a common practice, consider closing up this big air gap with a bead of caulking or expanding foam. In the basement, crawl space and attic, if you can access any of the pipes and wires that pass through the wall plates, seal the penetrations with expanding foam.

By Paul Bianchina Inman News

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Phoenix Valley Wide Weekly Market Update 11/23/11

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Buyer Agent

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Q: Who Represents Home Buyers?

A: NOBODY... unless you use Buyer's Agent

Introducing: Buyer's Agent Services

Listing Agents represent seller. 

Builder Home Sales Associate represent builder.

Who represents buyers in real estate purchases? 

Only Buyer's Agent and their Brokers represent buyers.

Do I need a Buyer agent?

Do you need someone to 

• Explain the terms and conditions in Purchase Contract?
• Negotiate price?
• Coordinate inspection, appraisals, walk-throughs?
• Answer to any question / resolve the issues during the contract periods?
• Work at your BEST interest?
  

If you answer is YES for all the above questions, then you will need a Buyer's Agent.

Most buyer's agents will accept the co-broke fee offered by the seller/builder and not charge the buyer a commission. 

A Buyer's Agent will:

• Acts in the Buyer's best interest.
• Has a duty to disclose all facts to the buyer.
• Has a duty to advice the buyer.
• Obeys all legally permissible instructions.
• Maintains the confidentiality of the buyer's position.
• Negotiates on the buyer's behalf.
• Opens up all properties (FSBO) and ("Not on the market")
• All buyers have the right to representation. Whether you move into town or across town.

So seek out an agent who will REPRESENT YOU!
My personal commitmment to you as Buyer's Agent

• I will listen to you, because when I fully understand your real estate goals, I can help you achieve them.
• I will represent you with integrity and find you a home that best matches your needs. 
• I will help you through the offer, financing, and escrow processes.
• I will communicate with you by keeping you up to date at every stage of the sales process.
• I will stay aware of the latest market trends and keep you updated.
• I won’t push you into buying a home. Instead I offer knowledgeable and trusted advice.

I will make sure you will get the best price, no hassle, shortest time and smooth transaction for you next home purchase. You will have an enjoyable home buying experience!

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Power Ranch, Gilbert AZ Home for Sales

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Power Ranch, Gilbert AZ - Award Winning Masterplanned Community

Power Ranch and Trilogy at Power Ranch is the masterplanned community that has set the standard in the southeast valley of metropolitan Phoenix, Arizona. It offers a welcome oasis of comfort with an abundance of large scale amenities. 

Power Ranch is designed to celebrate diversity and foster the active Arizona family lifestyle with a wide variety of homeowner activities. Although Power Ranch is a growing community, it retains the small town feeling that is the hallmark of the best places to live and a the perfect place to raise your family for decades to come. Power Ranch is so much more than just a house.

Power Ranch is a multi-award winning community. It was selected as the Best Masterplanned Community 2003, 2004 and 2005 by Ranking Arizona and ranked in the top five communities since 2003. It was recognized as one of the five Best Master Planned Communities the Nation by the National Association of Home Builders in 2002. 

Power Ranch Facts:

• Two Community Parks
• Two Catch & Release Fishing Lakes
• Two Community Clubhouses
• 25 Meter Swimming Pool, Shallow Play Pool, Resort Pool With Whimsical Water Features, Splash Fountain
• Full Basketball Courts, Volleyball Courts
• Three Field Soccer Complex
• 200+ Acres of Open Space & Greenbelts
• 26+ Miles of Trails Connected Throughout the community

>>Power Ranch Home for Sales<<

School near Power Ranch:

Gilbert schools

Arizona schools

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Finally, Time to Buy a House

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The conditions are now right for homebuyers looking long-term.

U.S. house prices have plunged by nearly one-third in five years and the nation's homeownership rate is falling at the fastest pace since the Great Depression.

Two key measures now suggest it's an excellent time to buy a house as a long-term residence or an income property (but not for a quick flip). First, the nation's ratio of house prices to yearly rents is nearly restored to its pre-bubble average, suggesting the financial advantages of homeownership once again await buyers. Second, when ultra-low mortgage rates are taken into consideration, houses are the most affordable they've been in four decades of data.

Two of the silliest mantras prevalent during the real estate bubble were that a house is the best investment you'll ever make and that a renter "throws money down the drain." Whether buying is a better financial deal than renting isn't a stagnant fact but a changing condition that depends on the relationship between prices and rents and the cost of financing, among other factors.

But the math is shifting in favor of buyers. Stock-oriented folks can think of a house's price-to-rent ratio as akin to a stock's price-to-earnings ratio, in that it compares the cost of an asset with the money it's capable of generating. For investors, a lower ratio suggests more income for the price. For prospective homeowners, a lower ratio makes owning more attractive than renting, all else held equal.

Nationwide, the ratio of median home prices to rents on average-size apartments is 11.3, down from 18.5 at the height of the housing bubble, according to Moody's Analytics. The average price-to-rent ratio between 1989 and 2003 was about 10, according to Moody's. So valuations appear almost back to normal, on average.

But for most house buyers, mortgage rates are a key determinant of their total costs. Rates are so low right now that houses in many markets look like bargains, even if price-to-rent ratios aren't hitting new lows. The 30-year mortgage rate rose to 4.12% this week from a record low of 3.94% last week, Freddie Mac said Thursday. (The rates assume 0.8% in prepaid interest, or "points".) The latest rate is still less than half the average since 1971.

As a result, house payments are more affordable than they've been in at least four decades of data. The National Association of Realtors Housing Affordability Index hit 183.7 in August, near a record high in data going back to 1970. A reading of 100 would mean that a median-income family with a 20% down-payment can afford a mortgage on a median-price home. The index's historic average reading is 120. So today's buyers can afford handsome houses--but prudent ones might opt instead for moderate houses with skimpy payments.

For example, a median house in Phoenix costs $121,700, according to Zillow.com. With a 20% down-payment and a 4.12% mortgage rate, a buyer's monthly payment would be about $470. Rent for a comparable house would be more than $1,100 a month, according to data provided by Zillow.com. That suggests buyers are much better off, even after adjusting for their additional expenses.

Of course, all of this assumes mortgages are available -- no given now that lending standards have tightened. But long-term data on down-payments and credit scores suggest conditions are more normal than many buyers think, according to Stan Humphries, chief economist at Zillow.com. "If you have good credit, a job and a down-payment, you can get a mortgage," says Mr. Humphries. "There's more paperwork and scrutiny than five years ago, but things are pretty much like they were in the '80s and '90s."

Not all housing markets are cheap, of course. Mr. Humphries says Zillow has developed a new price-to-rent ratio that uses price and rent estimates for each individual property rather than city medians, to better reflect the choices facing typical buyers. A fresh look at the numbers suggests Detroit and Miami are plenty cheap for buyers, with price-to-rent ratios of 5.6 and 7.7, respectively. New York and San Francisco might favor renters, with ratios of 17.6 and 17.2, respectively. The median ratio for 169 markets is 10.7.

For investors seeking income, one back-of-the-envelope way of seeing how these numbers stack up against yields for other assets is to divide 1 by the price-to-rent ratio, resulting in a rent yield. The median market's rent yield is 9.3% and Detroit's is 17.9%. From those yields, a real estate investor would have to subtract for taxes, insurance, upkeep and other expenses, and costs vary widely by market and case. But suppose total expenses are 4% of the purchase price. With the 10-year Treasury yield sitting at 2.2% and the S&P 500 index carrying a dividend yield of 2.1%, rents for residential housing in many markets look attractive, even after expenses.

It's little wonder that, as The Wall Street Journal reported in August, even investment funds are dabbling in single-family houses.

A few caveats: First, not all transactions are average ones. Even in attractively priced markets, buyers should shop carefully. Second, prices may well fall further. Celia Chen, a senior director at Moody's Analytics, expects that prices will fall another 3% before bottoming early next year and rising slowly thereafter. "If the economy slips back into recession, however, we could easily see a 10% drop," says Ms. Chen.

Fourth, property "flipping" can be dangerous even when prices are rising. That's because absent a real-estate boom, house price gains simply aren't that exciting. Research by Yale economist Robert Shiller suggests houses more or less track the rate of inflation over long time periods.

That's what we'd expect from something made from sticks and stones and other ordinary materials. Houses aren't the magic wealth creators they were made out to be during the bubble. But when prices are low, loans are cheap and attractive investment yields are scarce, as now, buyers should jump.

By Jack Hough, SmartMoney.com

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The Top 3 Mistakes Buyers Make When Looking for a Home

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In real estate, there are a few rules that buyers should be aware of but most are not.  Not knowing and following these rules could compromise your future negotiations, weaken your position, and put you at risk if you've signed a buyers agency agreement. 

1. Never discuss personal matters with anyone except for your priest/rabbi/minister, your lawyer, and real estate agent
This is number one because this is the most commonly violated portion of the real estate transaction.  Let me first address buyers who have not hired a buyer's agent.  When a buyer discusses personal matters such as their desire to move, financial situation, reasons for moving, etc with a real estate agent they haven't hired, that information could come back to haunt them if that agent is on the other side of the transaction.  This is very common, especially in small towns or with areas with a dominate real estate agent.  They could be representing the seller on the next home you're looking to buy and the information they might be sharing is what you offered up at a prior meeting.  The best solution is to keep it to plesantries.

2. Never venture to an open house without your buyer's agent
What most buyers do not understand is that the agent in the open house or sales model does not represent you.  They may be very nice in the way they address you to give you that impression but they represent the seller. Therefore, any information that you share can be used against you in any transactions with that agent. 

3. Never venture to a new home sales model without your buyers agent.
New home sales agents are real estate agents too and they represent the builder, not you. Therefore, if you want all the advantages of having an agent on your side, bring them with you.  Venturing to one without your agent essentially cuts them out of the transaction. Depending on your buyers agent, their brokerage may choose to sue you for the commission owed and not paid by the builder at that point. 

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Easy and Affordable Green Home Makeovers

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Want to save the environment, but can’t afford costly solar panels? Are you eager to cut down on energy costs, but leery about putting a wind turbine in your backyard? Don’t worry. There are plenty of easy and affordable ways to “go green with a home makeover and stay within your budget.”

Here are some green living tips for doing environmentally friendly home and yard makeovers on a tight budget:

Audit

Start with a home energy audit. Check to see if your local utilities company provides this service. If it doesn’t, plenty of other companies do. The auditor should make a complete inventory of all your household appliances that use electricity and/or water. An energy audit is a good way to determine how efficient (or inefficient) your appliances are, and whether your home heating and cooling system is running efficiently.

Change your lights

Replace your incandescent light bulbs with more efficient compact fluorescent light bulbs (CFLs). The latter will last longer while using less power.

Water, water everywhere

Some modern, multi-headed shower systems spew out water at the incredibly wasteful rate of 80 gallons per minute (gpm). Buy a water saving showerhead that emits water at a rate of 1.75 gpm instead. You will save thousands of gallons a year.

Toilet

Composting toilets, that turn human waste into natural fertilizer, are a great way to conserve water. However switching to a composting toilet is a pretty major step for most people. Fortunately, there’s no shortage of other things you can do in the bathroom to go green. Use recycled, processed-chlorine free toilet paper, organic cotton bath linens and a PVC-free shower curtain.

Magic carpet ride

Your home contains a magnet for dirt, dust, bugs, fungi, animal dander and toxins. It’s called a carpet—i.e. the wall-to-wall variety found in so many American living rooms. Not only is your carpet a dirt reservoir, but it’s probably made from nylon or some other petrochemical synthetic material. Use area rugs made from natural fibers instead. Make sure the rugs are stitched, not glued.

Naturescaping

Instead of drowning your lawn in a sea of dangerous pesticides and chemicals, make your own bug and weed repellent from hot peppers and water. Some households remove the grass from their yards and replace it with rocks, gravel, wild flowers and native plants (hearty species that don’t require much water or fertilizer). If you do have a grass lawn, don’t feel obliged to constantly mow it. A “high mow” with a push mower gives grass the chance to grow sufficiently to deny shade to weeds, and hopefully, kill them.

Other simple suggestions:

• Don’t run the water while brushing your teeth
• Only use your toilet for its intended purpose, not as a ‘garbage disposal’
• Cut shower time to five minutes max
• Dry your clothes on an outdoor line or on a drying rack
• Wash your clothes in cold water instead of hot
• Use an organic, cotton or wool mattress and organic cotton bedding
• Turn your thermostat down two degrees in winter. Turn it up to 73 in summer

These simple methods will help reduce your carbon footprint while saving money on utility bills. Any structural upgrades you make to the home will be especially valuable, as green homes are increasingly sought-after by many homebuyers. With global warming quickly becoming a huge issue, it’s up to each of us increase our focus on environmentally friendly, sustainable living.

via bhg real estate

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The Islands Gilbert AZ 85233 Home for Sales

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The Islands Real Estate and Homes for Sale | Gilbert AZ 85233

Last updated on July 11, 2014
The Islands, located in Gilbert AZ 85233, is the largest lake community in the Phoenix Valley. Elegantly constructed around a beautiful, peaceful lake, properties in the Islands are among Gilbert's most sought-after real estate.

The Islands community consists of three lakes and a large park. This unique oasis in Gilbert allows home owners to enjoy water recreation activities such as boating and fishing year round, while extensive bike paths and green areas allow residents to enjoy the great Arizona winters. The Islands offers an Arizona living experience unlike any other with an upscale active environment and beautiful landscaping.

The Islands, Gilbert AZ 85233

Conveniently Located in The Islands
Residents in The Islands enjoy near by shopping, grocery stores, restaurant and other amenities.

Community and Demographic Information for The Islands
Gain valuable insight into the The Islands community by looking at household incomes, crime risk, education levels attained, and potential for extreme weather. Use the map to locate points of interest like shopping, restaurants, and health care services.

Artemina is served by Gilbert Unified District. School aged children is attending Islands Elementary, Mesquite Jr High and Mesquite High School. The quality of a school can greatly influence home values in an area. Access Gilbert 85233 school detailed information on the Gilbert Unified School District, school ratings, test scores by grade, student-teacher ratio, and much more.

Affordable Financing Options
Several low down payment financing options including; FHA 3.5% 0.5% Down Financing, VA ZERO Down Financing, Conventional Financing and others are available. Contact Us to find out what loan programs you qualify for. Learn more about how to buy a house in Gilbert AZ with a low down payment.

Free Market Report Gilbert AZ 85233
The data used this Gilbert 85233 Market Report is consolidated from multiple sources and includes current listings, recent sales, and more. Whether you’re a buyer or seller, the knowledge you gain will help put you in control of your real estate transactions.

View Homes for Sale in The Islands

What's My The Islands Home Worth?

Click here to Find Out Your House Value Instantly

Free MLS Home Search

Ready to Sell?

• Call 480.721.6253 or Contact Us to schedule a Complimentary & NO OBLIGATION Seller Consultation
• Go to sell.sweephoenixhomes.com for Comprehensive Marketing Plan when list with us
• Click here to Check your Gilbert home's value instantly
• Click here and Enter your zipcode and find out Market Snapshot for Free
• Not Thinking of Selling Right Now? – Text Update to 480.788.6408 and Your Zip Code and I will send you the following update on the 1st of every month. NO SPAM – JUST ONE INFORMATIVE TXT PER MONTH

Ready to Buy?

• Call 480.721.6253 or Contact Us to schedule a Complimentary & NO OBLIGATION Buyer Consultation
• TXT AZ246 to 32323 to Download My GPS enabled Mobile App and Browse Homes on your smartphone

Swee Ng

Keller Williams Realty

sweeng@kw.com

15905 S 46th St #160

Phoenix , AZ , 85048

480-721-6253

Swee Ng, Realtor with Keller Williams Realty who live, work and play in Gilbert AZ, specialty in Residential Resale, First Time Home Buyer and Investment Homes.
Visit www.SweeEastValleyHomes.com for your Gilbert Real Estate needs.
Go to www.GilbertAZHouseValue.com to find out what your Gilbert house is worth instantly.

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Better Mortgage Rates Start With Better FICO Scores

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If you plan to use a mortgage for your next home purchase, you’ll want to keep your credit scores as high as possible. Credit scores play an out-sized role in determining for which mortgage product you’ll qualify, and to which rate you’ll be assigned by your lender.

The higher your credit score, the lower your mortgage rate will be.

What Is A Credit Score?

History has shown that the best way to predict a person’s behavior over the near-term future is to look at that person’s behavior in the recent past. It’s a concept similar to the First Rule of Physics — an object in motion tends to stay in motion.

We can apply this theory to consumer credit, too. A person who has recently paid his bills on-time should continue to pay his bills on-time in the near-future.

This is the basis of credit scoring; using your past to predict your future.

To mortgage lenders, your credit score represents your likelihood of making on-time mortgage payments for the next 90 days. “90 days” matters because, after 90 days without payments, a homeowner falls into default.

Higher credit scores correlate with lower default risk which explains why people with high credit scores tend to receive lower mortgage rates than people with low credit scores. This is true across all loan types, including conventional, jumbo, and FHA mortgages.

Like most else in finance, those with the lowest risks get to pay the lowest rates.

Lenders Use The FICO Scoring Model, Exclusively

There are three main credit bureaus in the United States. They are Equifax, Experian and TransUnion. Each offers a bevy of credit-scoring products, available for purchase on their respective websites. Prices range from “free” to several hundred dollars.

None, however, are particularly relevant in the home-buying process. This is because the nation’s mortgage lenders rely on a different credit model — the FICO model.

FICO is named for the Fair Isaac Corporation. It was “invented” in the 1950s and has become the mortgage industry standard for credit ratings. Today, FICO scores are omnipresent to the point that people generically refer to all credit scores as “FICO scores”.

This is akin to calling all adhesive bandages “Band-Aids”. FICO is the brand name — not the product.

FICO scores range from 300-850.

Credit Scores Change Mortgage Rates

Your FICO score has always influenced the mortgage rate for which you’re eligible. In 2008, though, it began to change your loan fees.

In response to major mortgage market losses, in April 2008, both Fannie Mae and Freddie Mac introduced something called Loan-Level Pricing Adjustments (LLPA). Loan-level pricing adjustments are “discount points” added to a mortgage rate, based on a specific borrower’s risk to the lender.

A discount point is a loan fee, paid at the time of closing. 1 discount point is equal to 1 percent of your loan size.

Example : A $300,000 mortgage that’s assessed 1 discount point will have $3,000 in extra fees due at closing.

Fannie Mae and Freddie Mac know that low credit scores correlate to high default rates so, like an insurance policy, they assigned the highest costs to the highest-risk borrowers.

Assuming a 20% downpayment, look at how discount points change based on credit score. Fees get massive for FICOs under 700.

740+ FICO  : There are no discount points required. This loan is “low risk”.

720-739 FICO :  0.250 discount points are charged to the borrower, or $250 per $100,000 borrowed

700-719 FICO :  0.750 discount points are charged to the borrower, or $750 per $100,000 borrowed

680-699 FICO :  1.500 discount points are charged to the borrower, or $1,500 per $100,000 borrowed

660-679 FICO :  2.500 discount points are charged to the borrower, or $2,500 per $100,000 borrowed

Now, not many new home buyers just have that kind of extra cash just laying around. Therefore, as an alternative to paying discount points with cash, many choose to “roll up” the fees into their respective mortgage rates. In general, 1.000 discount point can be “traded in” for a 0.250 increase to your mortgage rate.

Example : A consumer with a 680 FICO score is required to pay 1.500 discount points at closing, or can alternatively accept a mortgage rate increase of 0.375%.

This is why it’s important to keep your credit score high. There are real dollar costs for having scores under 740.

Improving On Your Credit Score

If your credit score is not as high as you’d like, the good news is that you can take steps to raise it — sometimes without even changing your spending habits.

via Trulia

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Now might be the best time ever to buy a home

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Now could be the best time in history to buy a home. Presuming, of course, you have the money and the credit to do so.

The average rate on a 30-year fixed mortgage hit record lows last week, down to 4.01%, according to Freddie Mac. The Federal Reserve's recent "Operation Twist," which was designed to do just this, appears to be doing the trick.

There are a lot of reasons to consider buying a home right now. The big savings on interest is just one of them — the difference between a 4% rate and a 5.5% rate on a $200,000 home loan is just shy of $200 in monthly payments and can save a homeowner more than $60,000 in interest payments across the life of the loan.

Another motivating factor could be the fact that rents remain sky-high in the U.S. right now, and in many markets it's actually cheaper to buy a home than rent a two-bedroom apartment.

While housing might not be at a "true" bottom just yet, there are many signs it is nearing one in many markets. Housing prices rose from June to July in 17 of 20 cities tracked by the Standard & Poor's/Case Shiller home price index. It marked the fourth straight month of rises in most U.S. cities.

That's to say nothing of the case-by-case bargains to be had. Here are two personal stories that show the opportunities to be had in this housing market:

I live in the Washington, D.C., area and purchased a short-sale home in 2009. Although three months of back-and-forth with the bank drove my wife and me crazy, we finally closed on the property just hours before a foreclosure auction — after which my Realtor asked if I wanted to immediately re-list my home with him for about 30% more than we had just paid. I had purchased the property for a growing family and good schools, so I politely declined. But the message was clear: If you suffer through a painful distressed property purchase, you get a hefty discount for your trouble.

On the other side of the coin, my brother purchased a newly constructed home in Roanoke, Va., as his wife attended medical school at Virginia Tech. Seemed like a good idea at the time — but now he's 40% upside down on his house and renting it for barely enough to cover the mortgage. Unfortunately, he now lives six hours away, so it's no picnic to manage his rental. My brother recently decided he has enough stress in his life so he will list the house at slightly below market rate just to get rid of it — even if it's going to cost him big-time. Very bad for him, but some lucky southwest Virginia family is going to get a nearly brand-new home for a heck of a deal.

I'm sure many of you have your own story to tell about the housing market. Share it with me (see below) or better yet, post it in our comments section so everyone can read and weigh in.

There are plenty of other bank-owned homes or desperate sellers that folks can pursue, with deals akin to the two listed above. But the million-dollar question, of course, is whether prospective homeowners can get a loan — and if they can, whether they want one.

After the mortgage meltdown, banks have wisely tightened lending standards . That's as it should be, but it understandably shuts many folks out of the market. Other people have good credit but don't have the necessary savings for higher down payments some lenders now require. That's to say nothing of folks who perhaps could sign up for a new home but are just too uncertain about their job or retirement.

Whatever the reasons, it all adds up to a decided lack of demand in the housing market. Many factors have created great deals right now, but those factors also might just be too daunting for many to overcome right now.

I remain convinced that I made the right choice in buying my home — not because it was an "investment," but because it's in one of the best public school systems in the country and I now have two beautiful daughters who wouldn't fit very comfortably in an apartment. And by the way, that two-bedroom apartment rented for only about $100 less a month than my current mortgage. Buying a home was the right thing for my family, and for my finances.

And perhaps that's the biggest lesson of all: The best reason to buy a house is because it will become your home — not a path to profits.

By Jeff Reeves, Market Watch

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Real Estate as a Longer Term Investment

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Return of Investment since 2000

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Val Vista Lake, Gilbert AZ Home for sales

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Val Vista Lakes, Gilbert AZ - Water Wonderland Paradise

Located in Gilbert, just southeast of Phoenix, Val Vista Lakes offerings are the result of an artfully master planned community consisting of 900 acres. This luxury development includes twenty-four subdivisions of exquisite properties, some of which have lakefront and several of which are custom gated communities. Also included within the master association are a variety of commercial businesses, that consist of restaurants, grocery stores, medical facilities, pre-schools, retail clothing, insurance agencies, banking facilities and automotive needs, just to name a few of the conveniences right in your own neighborhood.
Val Vista Lakes consists of four spacious sports parks, meandering bicycle paths, and a luxurious clubhouse.  The clubhouse features an eight-court championship tennis complex, indoor racquetball courts, cardio and weight training facilities, junior Olympic swimming pool and spa, banquet and meeting rooms, waterfalls and a tropical lagoon swimming pool with a sandy beach.

Val Vista Lake Home for Sales

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The Next Mortgage Crisis

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As a financial education company, we often see financial crises coming because employees contact us when they have financial problems or concerns they need help resolving.  With the recent mortgage crisis, we began to see a major spike in calls on debt in the year leading up to the meltdown.  Debt calls in 2006 increased to an all time high—representing close to half of our total calls at the time.  Even worse, many callers were frantic.  They weren’t looking to simply reduce their debt load; they were struggling to make ends meet.  They weren’t asking about putting together a plan to pay off high interest rate debts; they were beginning to consider drastic options like foreclosure and bankruptcy.

It was rather like seeing a car crash in slow motion.  You know it’s coming and you can tell the driver to slam on the brakes or swerve out of the way, but it’s too late to do much more.

Today, there’s another mortgage crisis in the works—that is, NOT having one—choosing to rent when you can afford to buy; choosing to forgo building equity in a home as a major source of retirement security—something that may be more necessary now than ever before with a soft stock market and low interest rates.  This emerging crisis is not yet at the car crash stage– more at the reckless driving without a seat belt stage.  There is time for Americans to resolve this one, but they must change their perspective on home ownership before it’s too late.

Why own a home when you can rent?  We are hearing this question much more these days as people choose to “sit out” of the real estate market or disregard homeownership altogether after seeing many of their friends and family end up in short sales or foreclosures.  Renting is the low-risk option for these callers.  It’s the only way to ensure that nightmare will never happen to them.

The problem is that it will; it’s just a different nightmare. Consider this:  A homeowner with a $1,500 monthly payment would still be writing the same check fifteen years later while prices everywhere increase around them.  In August 2011 the Consumer Price Index included a .4% increase in rents, the biggest increase since 2008, which represents an annualized increase of 4.8%.  If rents didn’t even increase that much but simply kept up with inflation at a 3.2% annual increase, a $1,500 rent payment would cost that renter nearly $900,000 over the next 30 years.  The same $1,500 payment made to their mortgage would be only $540,000 (because the payments don’t increase with inflation) and of course would end with a final payment. There might even be some real equity in the property, even with a dismal 1% growth rate over 30 years, a $300,000 property would appreciate well over $100,000 giving the homeowner an additional nest egg for retirement.

The renter, by contrast has no equity in their home, so in addition to almost $900,000 in rent in the above example, the renter would also be giving up $400,000 in retirement assets (and that’s at a growth rate of just 1%– far lower than even the lowest growth rate over a 30 year time period).   At a time when retirement is becoming much more challenging, an extra $400,000 (or likely more) can make a major difference, not to mention the impact of NOT having to pay a mortgage.  How much less would you have to save for retirement if you didn’t pay the mortgage?

And this doesn’t even include the tax benefits. The US government essentially subsidizes your house payment by allowing a mortgage interest and property tax deduction on Schedule A of the 1040.  Any points you pay when you get the loan can also be deducted.  Then an amazing thing happens: the IRS allows a tax exclusion on the sale of a primary residence.  Owners who live in their property two out of the past five years, who have equity and sell their primary residence, receive a maximum capital gain exclusion of $250,000 (if married $500,000.)  Where else can you get a tax break on an investment and then receive the proceeds tax free? I can’t think of another investment like it.

So, deciding that “renting” is safer and there’s no need to take the risk of buying a home or even waiting in an effort to time what is an unpredictable real estate market, buying only when prices have been up for a while, can be very costly.  It doesn’t bring with it the emotional trauma of a foreclosure or short sale.  But it is a slow drain on your finances, that over time, could compromise your ability to retire or at the very least, to retire the way you want, when you want.

All that said, I’m by no means advocating homeownership for everyone.  For many, renting is the right option, at least for now.  If you can’t afford to own a home, you shouldn’t even consider buying—one of the key lessons learned from the mortgage crisis.  Your mortgage should be under 25-30% of your income not including bonuses or promotions and you should have an emergency fund of 3-6 months expenses in savings before you purchase a home.  Also, if you don’t qualify for a reasonable interest rate on a mortgage due to credit problems, if your income is unstable, or if you crave mobility, renting is the better choice.  Renting is cheaper than buying in the short term and has other advantages:

Repairs: as a renter, when you turn on the shower and freezing cold water spurts out in your face, you simply make a phone call to the landlord and they have to install a new water heater instead of you footing the bill.  

Mobility: If you have a job opportunity or promotion in another state, you simply give notice and move.  You don’t have to go through the arduous process of selling (or not being able to sell) your home.  You are free from the obligations of homeownership.  

Property taxes:  As a homeowner, even when your mortgage is paid off you still have to pay property taxes and insurance, and those costs will continue to rise.

Just remember that freedom has its price and, in this case, it is a steep one. It costs much more in the long run to rent, which is why homeownership can be the ultimate retirement strategy.  When people are making decisions on whether to buy a house or not, many aren’t factoring in thirty years from now when the home is paid off.  They are wondering if the market is at the lowest point possible, if interest rates will drop even lower or if the property will appreciate. This vital element of homeownership has a long incubation period.  We always hear that an employee’s peak earning years come after age 50, when you combine high earnings with the elimination of an expense that takes up a third of most people’s take home pay, people have a real chance to meet their financial goals.  Homeownership is the ultimate retirement plan.

Home ownership isn’t for everyone, but for many, it is the best choice. The smartest choice, of course, is making the right decision for the right reasons based on your own circumstances.  Homeownership basics apply just the same as they always have:  buy only the home you can afford, lock in a fixed rate loan with the lowest interest rate possible, and refinance only to get a lower rate and only for the same loan amount and same term.  What got many people in trouble during the financial crisis was going to the extreme and buying a house they could barely afford with a variable rate loan payment.  When the payments reset with higher interest rates, many couldn’t make the payment.  They never should have been in the house in the first place.

If Americans don’t recover soon from their pessimism around homeownership, we predict another fallout from the financial crisis will surface many years from now when a nation of renters tries to retire.  They won’t have equity in their homes.  Their paychecks will be stretched to the limit, not leaving room for saving and investing for retirement and other financial goals such as college funding. Instead of their expenses reducing through retirement, they will look straight down the barrel of increased rent payments for the rest of their lives.  Homeownership makes a significant difference in the long run so it is concerning to see so many walking away from the American Dream.  We don’t want to see it become the American Nightmare.

By Liz Davidson, Forbes

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