HOME BUYER SEMINAR (POST 6) - HOW MANY TIMES DO I NEED TO GET MY WALLET OUT?

We're not talking about downpayments or closing costs here, but instead, “How Much Will it Cost Me Between Writing an Offer and Closing on My Home?” Even if you are thinking you have a zero down loan, you still need to have some available resources to get started.

I operate under the “no surprises” rule, so lets go over how many times you may have to get your wallet out, during the closing process:

Earnest Deposit: An earnest deposit is written into the offer to purchase. It’s also known as your “good faith” deposit. It shows the seller that you are a serious buyer, and is held in our RE/MAX trust account from the time your offer is accepted until closing. The most common amount is close to 1% of the purchase price of your home. A $120,000. home, would likely have a $1,000. deposit. A $275,000. home may have a $2,000. – $2,500. deposit. If you have a specialty loan and have limited funds, we can sometimes get by with a $250. earnest deposit. We will offer what you want and see if the seller will accept it. Your Realtor will need to have this money within 2 days after you are officially under contract with an accepted purchase agreement. Your check will be deposited – not just held. This is not an ADDITIONAL cost to home buying, as this money will be applied directly to the purchase price of your home at closing.

Inspection: If you choose to hire an Inspector you will contract with them “outside of closing”. This simply means that this transaction is not a part of the closing process. You schedule the inspection and pay the inspector directly for his services. Generally inspections cost $300. – $400. and are payable at the time of the inspection. If you choose to have your inspector conduct additional tests such as water tests, radon tests, etc. you will be charged for those additional fees.

Specialty Loan Requirements/repairs to the home you choose:
Depending upon the loan you are getting, the home may have to meet certain structural requirements. You could be responsible for correcting any deficiencies prior to closing on the home. (I know, it seems odd to be doing repairs on a home that you don’t own yet, but this is just the way it is sometimes!) Obviously we attempt to minimize these items and discover them as early as possible. A common requirement is that you could have to install a GFI electrical socket, or put a railing on a stairway. So you could need to have the financial wherewithal to accomplish these repairs. These fees could be any amount, but I've most often seen pretty minimal requirements so in general estimate: $100.

Lender Application Fees: Your lender oftentimes will require an application fee that is likely to be around $300. Ask about the possibility of this fee when you first meet with your lender.

Utilities: Sometimes a utility company could require a deposit or establish account fee. Most often these will show up on your first bill, so may not be an issue up front.

Insurance: Generally your lender will require that your annual home owners insurance be paid up front and that you bring in a rider showing that you have your policy in place and that it is paid for. Inquire more about this with your lender. Insurance costs are all over the map, I would estimate that a starter home could possibly have insurance costs as low as $300.

NOTE: It is difficult to estimate fees that could vary based on the prices of homes, various lender policies, and your own choices. This is intended to let you know about the existence of these fees rather than estimate the amounts -- but, it sure is better to know ahead of time that you're going to need some cash up front.

No surprises, right? ~ Liz

Spring Into Home Maintenance

Six features that need most attention

Spring is always an ideal time to be checking the exterior of your home and catching up on any maintenance items that have come to light since last summer. As always, maintenance begins with a stroll around the house and a careful examination of its condition. Take a tablet with you, make some notes as you go, and then sit down and work up a list of things to take care of -- sort the list in order of the most pressing items first -- and then list the tools and materials you'll need for each task. By sorting and organizing your list in this manner, you can take what may sometimes be a long list of projects and make it a lot easier to undertake.

THE ROOF
Roof damage is an obvious area of concern. You'll want to actually go up on the roof so that you can make a thorough and careful inspection of several different things, so if you're not comfortable with the height or steepness of your roof, consider hiring an experienced, licensed roofing company to do the inspection for you.
As you walk around the roof, look for missing or loose shingles, including ridge cap shingles. Examine the condition of the flashings around chimneys, flue pipes, vent caps, and anyplace where the roof and walls intersect. Look also for areas of overhanging trees that could damage the roof in a wind storm, as well as buildups of leaves, pine needles, and other debris. If you have roof damage in a number of areas, or if the shingles are of an age and condition that makes patching impractical, now may be the time to consider having the entire roof redone. Also, remember that if the shingles have been damaged by wind or by impact from falling tree limbs or other items, repair of the damage may be covered by your homeowner's insurance.

SIDING
Siding can suffer damage from exposure to sun, wind and rain. As you work your way around the house, you'll want to look for areas of siding that may be loose, cracked or sagging. In the case of plywood siding, look for areas of delamination -- separation of the layers of plywood -- or for an overlap seam that may be working loose.
In addition to examining the siding, check the condition of any wood trim, and the condition of both paint and caulking. Peeling or missing paint will need to be spot primed and painted, and the caulking around windows, doors, and trim may need to be cleaned out and replaced to prevent moisture and air from creeping into open gaps.

GRADE
Heavy snow and rain can often cause the soil around your home to move -- washing away in some areas and piling up in others. This type of alteration in the grade levels around your home can result in drainage problems and potential damage to your home, so look for areas of water staining on the concrete, or dirt or water stain patterns on siding -- if they're present, plan on moving and contouring some soil to redistribute the drainage patterns.

FENCES
Ground water can play havoc with fences and gates as well -- soft, wet soil allows fence posts to loosen up and eventually sag or fall over. Check fences by wiggling the posts to see if there is movement -- if there is, plan on removing soil around the base of the posts and pouring additional concrete to reinforce them. This is also the time to check the condition of fence boards and the condition and operation of gates.

SPRING CLEANING
Once you've completed your examination of these and other areas of your home's exterior and completed any necessary repairs, spring is also the ideal time to undertake a good exterior cleaning. In addition to gutters and roof, remove and store your storm windows and clean your windows; use a broom or water to remove cobwebs and dirt from under eaves, as well as on siding and exterior doors; pressure wash patios and walkways (pressure washers can be purchased or rented); and care for exterior wood decks.

SMOKE DETECTORS
Every spring and fall, you want to check your smoke detectors. Replace the batteries, clean the covers, and test the detector's operation before it's too late. If you have gas-fired appliances in the house, including a water heater, now is also a great time to consider adding a carbon monoxide detector. CO2 detectors are inexpensive and easy to install, and are available at most home centers and other retailers of electrical parts and supplies.

HOME BUYER SEMINAR (Post 5) - Obtaining Your New Mortgage!

I asked Kristen Derocha of River Valley Bank in Marquette, if she would be a guest columnist for the Home Buyer Seminar. She was kind enough to provide the following, regarding the process of getting that "all important pre-approval" and ultimately your new mortgage. Kristen would be a great choice to meet with to inquire about your next mortgage -- you'll find her to be friendly, helpful, knowledgeable and sincerely there to help you accomplish your goals. Her contact information is listed below.


1. What advice do you have for those seeking a first home mortgage?

Buying your first home can be an overwhelming experience for anyone. With the help of an experienced Mortgage Banker, that experience will become easier. Choosing a Mortgage Banker that is compatible with your personality assures you that your experience will be a positive one. Your Mortgage Banker will provide you with the proper tools to pre-approve your application quicker and choose a team that will make your dream a reality.


2. What personal finance info. does one need to gather in order to apply for a home mortgage?



Bringing all of the pertinent information to your Mortgage Banker in a timely manner a key factor to help your team qualify you faster and help you decide on the home that is right for you. This information may include the following:Your 2 most current W2s2 most current paystubs Last 2 months checking and savings statements from your bankStatements from your current retirement accounts (i.e. 401K, stocks, IRA’s)If you are self-employed, copies of your last two years tax returnsIf you are refinancing, a copy of your current homeowners insurance policy



3. What should someone do if they're turned down?



Not every situation is going to qualify for a mortgage. Work with your Mortgage Banker to get the specifics on why your situation does not meet the lending guidelines. Your Mortgage Banker will guide you to the path to improve your situation and get you in a home faster.



4. When is it advisable to refinance your home mortgage?



Your Mortgage Banker will give you options that may reduce your current mortgage payment, help you reduce the length of your mortgage and/or roll in other outstanding debt to reduce your overall payments. Typically, homeowners refinance when they can save over 1% in their interest rate or shave enough off of their monthly payment to make it worth while to them. Ultimately, only you will be able to make the decision on whether or not it is the right time for you to refinance your home.



5. What should one look out for when refinancing?



Working with a reputable Mortgage Banker is essential to the success of your refinancing needs. It is extremely important to make sure you are getting “the whole picture” when looking at things such as rate, term, points and closing costs. Make sure that you get a Good Faith Estimate from your Mortgage Banker so that you can be assured of what the total cost of your transaction is going to be and that the payment amount is in line with your budget.



6. How can an applicant best help the refinancing process go smoothly?


Working with your Mortgage Banker and supplying all of the required documents in a timely manner will help your refinancing process go smoothly. It is a team effort to gather all of the information to submit your application and get your loan closed quickly.



Make every moment an Incredible one!!!

Kristen A. Derocha
Mortgage Banker
River Valley Bank
1140 W. Washington St.
Marquette, MI 49855
Direct Phone (906) 226-1393
Cell Phone (906) 361-4101
Fax (906) 226-0290
kderocha@rivervalleybank.com


Thank You Kristen!

Now go get pre-approved! ~ Liz

HOPPY EASTER!

"Downtown Ultimate Egg Adventure"
Downtown Marquette

April 3rd & 4th, 2009

10:00 a.m. - 5:00 p.m.

Look for signs in the windows of downtown Marquette businesses for the

"Ultimate Egg Adventure" participation.

ALSO

The Easter Bunny will be at the Masonic Temple on
Saturday, April 4th

11:00 a.m. - 2:00 p.m.

HOME BUYER SEMINAR (Post 4) - TOURING HOMES!

So, you've been pre-approved by your lender. You've chosen your REALTOR, and we've discussed what you are looking for in a home and come up with a list of properties. Now we should begin to tour homes in order to find the one that is right for you.

By touring homes you will begin to get a good sense of the local market -- or in other words what type of home is being offered for what money. You will also get a sense of what size of home seems about right for you. You'll likely begin to fine tune those needs and wants.

As we tour homes we will have a Sellers Disclosure on hand which offers lots of detailed information on the home provided by the Sellers, such as: do the major systems in the home (heating/plumbing, etc.) work, has the basement ever had evidence of water, does the roof leak, age of furnace, etc. We will be looking for positives in the home as well as negative factors.

When you finally narrow the field to a few homes that you might actually be interested in, then its time to find out even more about them. I will always check on the heating costs for the home - and if you want, other utilities. The heating bill tells you a lot about the home (windows and insulation and furnace for example). Most of the other utilities will be more dependant upon your own personal use. I also will help you to ESTIMATE what the property taxes will be once you own the home. You'll notice that we are rarely provided with current tax information. That is because the current owners taxes are rarely indicative of what YOUR taxes will be after you take ownership. I will look for the most current information we have from the local municipality: the local millage rate and the Assessed Value of the property, and we can get a good estimate of what you can expect.

While we are in the home its a good idea for us to think through what items we might want to write into an offer, such as: what personal property you want to ask for, what information you might make your offer contingent upon -- such as covenants, leases, road association info, etc.

Once you are satisfied that this is the home you want to make an offer on, then we are ready to go back to the office and do just that. We'll cover writing offers next week!

Lets go see some homes! ~ Liz

This handy list of items you may need for preparing your income taxes was online at msnmoney. I thought it appeared very comprehensive. I am not a tax professional, but thought I could share it. Its seems like a good starting point and I suggest you gather data and work with a tax professional. If you would like the name of a good tax preparer in town, email me and I will suggest several.

Taxpayer's checklist for tax year 2008
Information you need
Where to get the data
PERSONAL DATA
Social Security numbers (including spouse and children)
These are required to qualify for exemptions.
Your child-care provider's tax ID or Social Security number
This is critical to qualify for child care credits.
Form 8332, copies of your divorce decree, or other documents proving your right to claim a child living with your ex-spouse.
Divorce documents are on file in the court where you filed. Your lawyer should have them as well. Form 8332 is available on the IRS Web site.
EMPLOYMENT & INCOME DATA
W-2 forms for this year
These come from your employer.
Partnership and trust income
Data for these should come from an accountant or financial institution.
Pensions and annuities
Data should come from the financial institution, insurance company selling the annuity or pension fund.
Social Security Railroad Retirement Benefits
You will need Form RRB 1099 or Form RRB 1042S for nonresident alien recipients of Railroad Retirement benefits.
Alimony received
Tax information should come from your ex-spouse or his representative. Your former spouse will want your Social Security number to be able to deduct any alimony payments.
Jury duty pay
Data should come from the court clerk.
Gambling and lottery winnings
This data should come from the casino or lottery authority. Use Form W-2G.
Prizes and awards
Data should come from the award givers. Use Form 1099-MISC.
Scholarships and fellowships
Data should come from the administrators of these programs. Use Form 1099-MISC.
State and local income-tax refunds
Data should come from the taxing authorities.
HOMEOWNER/RENTER DATA
Residential address(es) for this year
This is your responsibility.
Mortgage interest
Your lender will send you this data on Form 1098.
Sale of your home or other real estate
Your lender or closing agent should send you Form1099-S.
Second-mortgage interest paid
Your lender will send you this data on Form 1098.
Real-estate taxes paid
Your county clerk or lender should send you this data.
Rent paid during tax year
You need to generate this data.
Moving expenses
If your expenses are reimbursed by an employer, the employer will furnish you with data on the moving costs they paid for.
FINANCIAL ASSETS
Interest-income statements
Financial institutions will provide this data on Form 1099-INT & Form 1099-OID.
Dividend-income statements
This will come on Form 1099-DIV from the company paying the dividends.
Proceeds from broker transactions
Your brokers should furnish this data on Form 1099-B.
Tax refunds and unemployment compensation
The issuing agencies should send this information on Form 1099G.
Miscellaneous income including contract or freelance work or rent
This should come from whoever distributes the income on Form 1099-MISC.
Retirement-plan distribution
Whoever sends out your pension checks should send you this data on Form 1099-R.
FINANCIAL LIABILITIES
Auto loans and leases Including account numbers and car value -- if the vehicle is used for business
You can get this data from the lender or leasing company.
Student loan interest paid
The lender should furnish this data on Form 1098-E.
Early withdrawal penalties on CDs and other time deposits
Financial institutions should provide this data.
AUTOMOBILES
Personal-property tax information
This data should come from the state or local taxing authority.
DEDUCTIBLE EXPENSES
Gifts to charity
This data should come from the charity. Since 2007, you have new responsibilities. You will need a bank record (such as a canceled check, a bank copy of a canceled check, or a bank statement containing the name of the charity, the date, and the amount) or a written communication from the charity. The written communication must include the name of the charity, date of the contribution and the amount of the contribution.
Unreimbursed expenses for volunteer work
You will need to keep your own records for this. Remember, you can deduct any driving expenses for volunteer or charitable work at the rate of 14 cents a mile.
Unreimbursed expenses related to your job
You will need to maintain this data.
Travel expenses, entertainment, uniforms, union dues, subscriptions and investment expenses
Your broker will furnish some data. Travel, phone and other related expenses are your responsibility to track.
Job-hunting expenses
You will need to keep and maintain this data.
Education expenses
You will need to keep this data. But if you qualify for Hope or Lifetime credits or other college deductions, the college involved will send you the data on the qualifying expenses you've paid. If you plan to claim education deductions, you will need Form 1098-T from the institution. If you expect to deduct interest on student loans, get Form 1098-E from the lender.
Child-care expenses
You will need to keep this data.
Medical savings accounts
The institution handling the account will be able to generate any data.
Adoption expenses
You will need to track this data and be able to document these expenses.
Alimony paid
You or the authority disbursing funds will need to keep this data. To deduct this expense, you will need the recipient's Social Security number.
Sales-tax expenses
If you expect to claim a sales tax deduction on your 2007 tax return, you will need receipts for expenses. Or you can fill out a worksheet that the IRS provides to help estimate sales tax expenses.
Tax-return-preparation expenses and fees
Your preparer can furnish this data to you.
SELF-EMPLOYMENT DATA
K-1s on all partnerships
The partnership management should generate this data.
Receipts or documentation for business-related expenses
This is data you should keep and track.
Farm income
You or an accountant should tack this information. You will need to prepare Schedule F.
DEDUCTION DOCUMENTS
Federal, state and local estimated taxes paid for current year, including estimated tax vouchers, cancelled checks & other payment records
You must keep copies of this data and track it.
IRA, Keogh & other retirement plan contributions
You can get this information from your financial institutions.
Medical expenses
You must track this data.
CASUALTY OR THEFT LOSSES
Other miscellaneous deductions
You will need to file Form 4684.
Updated Dec. 10, 2008

HOME BUYER SEMINAR (Post 3) - Finding Your New Home!!

O.K. – so now we need to find you a home! You’ve already been pre-approved by your Lender, so we know about what price range you qualify for, and want to purchase in. You’ve also already chosen your REALTOR.

Your REALTOR needs to know both your needs and wants in a home. You can relay this information to them by meeting with them, through a phone conversation, or by describing these things in an email. On my website, I also have a form that you can fill out – that will prompt you for the needed information. Your REALTOR will want to know for instance, how many bedrooms and baths you will need – about what amount of square footage you might want – the age of the home you would be interested in (do you like vintage homes, or do you want a more modern home) – if you are o.k. with a “fixer-upper” or need to have the home closer to “move-in” condition – what areas or neighborhoods you like – related to that, what school system do you prefer – what size of lot do you prefer – even, how busy the road is in case you have children or pets – are there types of construction that you prefer (conventional frame, modular, manufactured, mobile) – do you want a garage, a basement, a family room, a fireplace, etc.

Armed with this information, your REALTOR will begin to set up your “search” on the computer. They are searching the entire MLS (Multiple Listing Service). The MLS is a single system that every participating Real Estate Agency places their listings into. We “share” our listing information, and the ability for ANY agent to show and sell that property. The MLS is the broadest representation of properties for sale in any particular area. You should understand that -- even though there are many Real Estate Agencies, a single REALTOR can help you to purchase ANY home that is in the MLS. Sometimes people unfamiliar will think that the agent can only show their own listings, or those of their firm and that is not the case.

So once your search is completely set up, it is usually emailed to you. You will be able to examine lots of detailed information about each property and look at photos and hopefully a Virtual Tour. Personally, when I set a new client up on a computer search, I will also set them up on "auto email". This feature allows my client to receive all “new listings” that continue to hit the market after I’ve sent them their initial search. You will receive these listings one by one, just minutes after they hit the market! I will also receive notification of what you are receiving so that I am up to speed on your search, and so that I can give you any additional information that I might be aware of.

Now your REALTOR knows you and knows what you are looking for, and if they are on the ball, they may be able to benefit you by letting you know about homes that are just coming onto the market – before too many other buyers know about them. In our office we spread the word amongst one another the moment we list a new home – and this could be days before this home gets into the computer system. :}

You will review your list of homes, choose the ones that you like best, drive by the homes to see that you like the neighborhood, and then ask your REALTOR to set up showing appointments. Most often your REALTOR will need at least one day ahead to get these appointments set up with the owners of the homes.

When we tour the homes we will look for both good and bad elements. Your REALTOR should have a Sellers Disclosure on hand during your showings. We’ll look specifically at that for clues to any concerning items such as a leaky roof or basement. As you tour more and more homes you will get a better sense of what you really like – and your REALTOR will be paying attention so that they can help find that perfect one for you.

Little by little we will fine tune your search, and hopefully shortly we will walk into the one you think could become YOUR home. Next week we’ll talk about making an offer on it!

Lets get out there and look at some homes! ~ Liz