Category Archives: All About Buyers

Loan Pre-approval: The First Step in Buying a Home in Santa Cruz, Ca

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Today’s market requires you to become pre-approved, prior to purchasing a home.  The combination of a low inventory, decreased home prices, and record low interest rates have created many multiple offer situations. Therefore, if you were to view a home and not have a pre-approval letter, there is a huge chance of your perfect home, slipping through your hands. A pre-approval from a lender will not only strengthen your chance of securing the home of your dreams, but it will also determine your price range and narrow your search parameters.

When applying to your lender, be certain you are getting pre-approved, which is a significant step past pre-qualified. If you are only pre-qualified, you will have a good estimate of how much you can borrow, but it does not include an analysis of your credit report or an in-depth look at your ability to purchase a home.

Pre-approval is basically a promise from the lender that you’re qualified to borrow up to a certain amount of money at a specific interest rate. The first step is applying to a lender.  You will want to do a little shopping around. 30 years is quite the commitment, and you will want to feel comfortable with your choice. Be aware that interest rates change daily, so you are shopping more so for a loan officer.

What Do You Need for Pre-approval:

  • Pay stubs and W2s (lenders are looking for income verification for two years)
  • Two or three months of bank statements
  • If you are self-employed, you will need tax returns from the last two years
  • Divorce decree (if applicable)
  • Loan documents on your current home (if applicable)
  • Many lenders and brokers will ask you to pay for the credit report required for      pre-approval, but this is generally the only fee you will encounter during pre-approval (sometimes, though, a lender will charge a fee; be sure to ask if it’s free)

After you have submitted your documents and they have verified your ability and willingness to repay the loan, your loan representative will submit your complete application to the underwriter. The underwriter will return one of four decisions: approval, approved with conditions, suspended (which means they need more documentation from you before they can make a decision), or denied. Once approved, your lender will issue a loan commitment.

For more information, contact us today for a referral of an experienced and well-respected lender in the Santa Cruz area. I hope this information helped you. If there is ever any way I can be of service to you or anyone you know, please contact me at (831) 457-5510. There is never a charge and you’re under no obligation of any kind.

Finding the right real estate agent in Santa Cruz

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Selling your home may seem overwhelming, and if you have chosen the right real estate agent you will be surprised with the seamless transaction. Be aware that not all agents are created equal. There are agents who will pour all their efforts into handling your asset as a treasure, while others may hand the work to an assistant.

Before searching for an agent, you must understand some real estate jargon: Real Estate Agent, REALTOR(R), and Broker. The terms real estate agent and REALTOR(R) are interchangeable. These terms stand for a person with a state license to represent a buyer or seller in a real estate transaction in exchange for commission, while working under a Broker. A Broker may have more knowledge, training and experience by may not be as hands on. Remember though, that not all real estate agents are REALTORS(R), only those who are members of the National Association of REALTORS(R) have the right and priviledge to call themselves REALTORS(R).

After you understand the real estate language, now it is time to narrow down your choices by knowing what you want from your agent. There are always many different brokerages. They all can legally sell your property, and each will handle your sale with their individual and possibly unique procedures.

Many agents may have a niche that would be more tailored to your needs. If may be a simple choice of a listing agent versus a buyer’s agent or you may need special assistance due to a distressed situation. In such a case, be sure to seek an agent with specific certifications or training, ie: short sale, foreclosure preventions, internet marketing, luxury homes, etc.

Once you’ve narrowed down your options, create a list of questions to ask during each interview. This will showcase how each agent will work towards selling the home with your requirements. After all the interviews, review all applicants to a high standard. Your real estate agent should have extended experience, a strong commitment and a passion for real estate.

I hope this information helped you. If there is ever any way I can be of service to you or anyone you know, please contact me at (831) 457-5510. There is never a charge and you’re under no obligation of any kind.

FHA mortgage insurance premiums to increase

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HUD announced it will increase FHA single-family mortgage insurance premiums (MIP) to improve the FHA insurance fund’s capital position and encourage private capital to return to the home  mortgage market. Under the increases, the FHA annual MIP will increase by 0.10 percent for loans under $625,500 and by 0.35 percent for loans above that amount. Upfront premiums (UFMIP) will increase by 0.75 percent for all loans (1.75% from the current 1%). HUD says it will publish a mortgagee letter soon with additional details.

The 0.10 percent MIP increase will be effective on all loans with case numbers assigned on or after April 1, 2012. The additional 0.25 percent for mortgages exceeding $625,500 will be effective for case numbers assigned on or after June 1, 2012. The UFMIP increase will be effective for case numbers assigned on or after April 1, 2012.

Just a reminder a case number assignment cannot be ordered until loan documents and a signed application is received from a borrower. HUD is closely monitoring this requirement to ensure case number assignments are not being ordered to locked down guideline changes.

FHA estimates that the UFMIP increase will cost new borrowers an average of approximately $5 more per month, based on the borrower’s ability to include the increase in the balance of the new FHA loan. Taken together, these premium changes will increase FHA’s revenue more than $1 billion through Fiscal Year 2013.

How to Buy your first Santa Cruz home the easy way!

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Avoid10 common potentially devastating mistakes 1st time home buyers make…

Buying a home can be a “hair-raising” experience. It can be a roller coaster of emotions… finding the right place… securing the loan… moving in. And, if you’re like most of us, your home will be your largest investment.

Many home buyers do very little research before “diving in” and investing their hard-earned money. Before doing that, doesn’t it make sense to be as informed as possible? That’s what this report is all about. It’s designed to help you avoid 10 common, critical mistakes many home buyers make. If you follow these 10 suggestions, with the help of the right real estate professional, you’ll make a good sound business decision that you’ll be happy and proud of for years to come.

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January Home Sales Slow in Santa Cruz, Ca

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As you may remember from my post in December, the year in Santa Cruz County rounded out with an increase in unit sales of 17.7% from the previous month and an increase of 6.2% from 2010.

Fast forward to January 2012 and what a different picture. Unit sales declined 54% from the previous monthand 6.5% from the previous year. Despite high unemployment, slow economic growth and other problems plaguing the economy, most American households believe that now is a good time to buy a home.

Negative home-selling sentiment is strongly related to difficulty in finding buyers at desired sales prices, as well as the large overhang of mortgages past due or on foreclosure. But with only 6 months of inventory, most sellers should be excited over the turnaround.

Let us help you. If there is a specific area in Santa Cruz you are interested in, please give me a call at (831) 457-5510 to provide you the information you need. Have a great day!

End of 2011 Real Estate Stats for Santa Cruz County

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December rounded out the year in Santa Cruz County with an increase in unit sales of 17.7% from the previous month and an increase of 6.2% from 2010.

The average sale price for single family homes ended up 5.5% below 2010 at $544,226 but the overall total volume was only down 1.6%.

Despite high unemployment, slow economic growth and other problems plaguing the economy, most American households believe that now is a good time to buy a home. I have seen an increase in the number of interested buyers and just had a listing go under contract in 5 days.

Negative home-selling sentiment is strongly related to difficulty in finding buyers at desired sales prices, as well as the large overhang of mortgages past due or on foreclosure. But with only 5 months of inventory, most sellers should be excited over the turnaround.

Remember the most important real estate market is the street where you live or want to buy. If you are curious about a particular area, please give me a call at (831) 457-5510 so I can give you the numbers that are specific to you.

2011 year end real estate market statistics for Santa Cruz County

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December rounded out the year in Santa Cruz County with an increase in unit sales of 17.7% from the previous month and an increase of 6.2% from 2010.
The average sale price for single family homes ended 5.5% below 2010 at $544,226 but the overall total volume was only down 1.6%.
Despite high unemployment, slow economic growth and other problems plaguing the economy, most American households believe that now is a good time to buy a home. I have seen an increase in the number of interested buyers and just had a listing go under contract in 5 days.
Negative home-selling sentiment is strongly related to difficulty in finding buyers at desired sales prices, as well as the large overhang of mortgages past due or in foreclosure. And with only 5 months of inventory, most sellers should be excited over the turnaround.
Remember the most important real estate market is the street where you live or want to buy. If you are curious about a particular area, please give me a call at (831) 457-5510 so I can give you the numbers that are specific to you.

Housing issues in 2012

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So what does 2012 hold for real estate? As always, the story will be local. Remember the most important real estate market is the street where you live or want to buy.

While many housing markets rose together during the boom and fell together during the bust, they’re exiting the downturn at different speeds, and so it’s not very useful to talk about a “national” housing market.

In Santa Cruz, the issues will be unemployment, jobs, inventory, lending requirements and of course price. The unemployment rate has been higher in Santa Cruz County than in the State of California. Jobs are very hard to find as there are no major employers other than UCSC and the County which have both experienced cutbacks.

The inventory has declined 19.5% since the same period last year. Overall average selling prices on single family homes has declined 5.5% in 2011 as compared to 2010.

For complete statistical information on the real estate market in Santa Cruz, contact me at (831) 457-5510.

Are you ready to buy a home in Santa Cruz?

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These questions may be ones you are asking yourself about whether you are ready to buy:
1. How long do you expect to live there?
2. What can you afford to pay eachmonth for housing expenses?
3. What costs are included in home ownership? Mortgage, taxes, insurance, utilities, maintenance, fees, other?
4. Will the interest rate increase over time? Interest only?
5. What other costs are requires to complete a purchase? Closing, moving, repairs?
6. Are local market conditions favorable to buying now or should you wait?
7. Are there any assistance programs available to me that can help reduce the costs?
8. If you are currently renting, how does renting vs buying compare?
9. What are your employment expectations for the future?
10. What are your long term financial goals with regards to housing?

To preview some Santa Cruz “Best Buys” or for any other questions and to schedule a confidential buyers consultation, contact me.

 

Santa Cruz Median Price drops to record levels

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With sales up over 21% year over year in November, the median price fell to $410,000 for single family residences in Santa Cruz County. This is the lowest it has been since March of 2009.

Despite historically low mortgage rates, traditional lenders remain reluctant to provide mortgages to anyone with less than stellar credit.  And, in certain markets, lenders are requiring down payments of more than 20 percent of the home’s purchase price.

This is creating a buying frenzy at the low end where 67% of the sales in November were under $500,000. Sales of high end homes or those over $1m fell to only 4% of the market.

Inventory is also at an all time low dropping 22% from last year and almost 10% from last month. For complete Santa Cruz real estate market statistics, contact us to get the most recent information on the street where you live or are looking to buy.