Cape Coral Florida's Real Estate Guide

Shopping for a new home is an emotional experience. It's also time consuming and  comes with a myriad of details. Some buyers, however, caught up in the excitement of buying a new home tend to overlook some items. Their home purchase turns into an expensive process. These errors generally fall into three areas:

• Paying too much
• Losing a dream home to another buyer
• Buying the wrong home

When you have a systematic plan before you shop, you'll be sure to avoid these costly errors. Here are some tips on making the most of your home purchase:

Bidding without sufficient information
What price do you offer a seller? Is the seller's asking price too high? Is it a deal? Without research on the market and comparable homes, you could lose thousands of dollars. Before you make that offer, be sure you have researched the market. A professional realtor, can offer an unbiased opinion on the value of a home, based on market conditions, condition of the home and neighborhood. Without knowledge of the market, your offer could be too much. Or worse, you could miss out on a great buying opportunity.

Buying a mis-matched home
What do you need and want in a home? Sounds simple. Yet, clearly identifying your needs and bringing an objective view to home shopping, leaves you in a better position. Sometimes, home buyers buy a home that is too large or too small. Perhaps they didn't consider the drive to work, the distance to school, or the many repair jobs waiting for completion. Plan ahead. Use your needs list as a guideline for every home you view.

Unclear title
Before you sign any document, be sure the property you are considering is free of all encumbrances. As part of their services, a realtor can supply you with a copy of the title to ensure there are no liens, debts, undisclosed owners, leases or easements.

Outdated survey
Before the purchase is completed, an updated survey is essential. This report will indicate boundaries and structural changes (additions to the house, a new swimming pool, neighbor's new fence which is extending a boundary line, etc.).

Unexpected repairs
For $300 - $500 a professional inspector will conduct a thorough inspection of the home. This way, you'll have an idea of the cost of future repairs. Make the final contract subject to a favourable report.

Shopping without pre-approval
It only takes a few days to get financing pre-approval. When you are shopping for a home, this gives you more power. A seller is more likely to consider an offer from a serious buyer.

Getting a mortgage without perfect credit

WASHINGTON - March 17, 2010 - The government keeps promoting programs designed to help existing homeowners refinance their mortgages at a lower rate, as well as get perspective buyers into homes. In other words, Uncle Sam says he's here to help.

"Phooey," say homeowners and prospective homeowners, who keep complaining that it is ridiculously hard to get a mortgage or refinance one.

Can both sides be right?

Unfortunately, yes. But if you are willing to do a bit more work than in the past, it is possible to lower your mortgage rate to 5 percent or arrange to buy your first home. It is clear that there is pent-up demand to do both.

Seemingly qualified buyers keep telling me they can't get a mortgage. According to Credit Suisse (CS) and others, more than one-third of homeowners hold a 30-year conventional mortgage at 6 percent or higher. I will tell you what you need to do, but first we must understand what is going on in the marketplace.

A demanding lending landscape

Today it is unquestionably more complicated and difficult to get a home loan than it used to be. Burned by the recent housing meltdown they helped to create, lenders currently go over every requirement with a fine-tooth comb. They are looking for higher credit scores and more money down.

Still, the situation is far from hopeless: Loans at attractive rates are still available for those with less-than-perfect credit and minimal-to-no equity.

How should one negotiate the landscape? I checked with industry experts and here's what I learned: Banks and mortgage brokers can still get you a mortgage of $417,000 or less at the best rates through Fannie Mae (FNM) and Freddie Mac (FRE) programs if you have a credit score as low as 660 and can put 20 percent down. Jumbo loans, those greater than $417,000, remain more expensive.

What about more complicated scenarios? I checked on a number of specific situations - for example, people who can put 20 percent down but have a credit score of only 630, or people who have a score of 630 and only 10 percent to put down. I found these deals can get done but, not surprisingly, you will pay an additional quarter- or half-point. This means that instead of getting a 30-year mortgage at 5 percent, you would have to pay from 5.25 percent to 5.5 percent. Not too bad.

What about tougher scenarios, such as trying to buy or refinance with average credit, but zero to negative equity? According to expert Brian Fishman of Illinois-based DB Diamond Mortgage Group, the zero-down days are over, apart from incentives such as the soon-to-expire homebuyer credits.

Refinancing is possible, however. Freddie Mac has refinance opportunities for those with mortgages of up to 105 percent of their appraised value. Fannie has them for up to 95 percent. The lower credit and low-or-zero-equity deals will cost at least a point or more above published rates. But it might get done.

Don't assume your hands are tied

Believe it or not, even if your first and second mortgages total 125 percent of the appraised value, Fannie or Freddie may yet have programs that will refinance the first mortgage at a reasonable rate, as long as the second-mortgage holder doesn't object. Since every scenario is different, I'm not suggesting that you refinance this type. I'm simply suggesting you weigh all reasonable options vs. assume that you have no choices.

How can you determine which opportunities are available to you and which best suit your particular circumstances? I'm still a big fan of doing homework. I recommend that you consider seeking input from multiple sources, such as your current servicer, your local bank and your mortgage broker, and your local real estate professional.

To start, I'd suggest a reputable mortgage broker. While they are being paid a commission by lenders to help place you with them, they will often get you an equal or possibly better rate by shopping for you. You are also more likely to know where you stand among the various options before you get bogged down with paperwork.

In a nutshell, if you have credit scores in the low 600s or higher, 10 percent or greater equity in your home, and you're paying above 6 percent, you should be shopping to refinance. If you're in the market to buy a home, set these levels as your minimum standards, understanding that the better your credit and the more you can put down, the better your chances of getting the lowest mortgage rate available.

No matter what you do, remember that you have options and should do your homework. If you find that you're so far under water that nothing seems to make sense, maybe it's time to seek an alternative strategy, such as a short sale.

Copyright © 2010 The McGraw-Hill Cos., Marc Roth. All rights reserved.

Home equity loans available again

NEW YORK - March 15, 2010 - Banks are again offering home equity loans.

Lenders are expected to make about $36 billion in new home equity loans over the next year, according to Moody's Economy.com. That's actually more than the $34 billion in home equity loans made in 2008.

The difference will be the way the money is spent, says Frank Nothaft, chief economist at Freddie Mac. Most of it will go for necessary home improvements.

"Consumers are better at managing their own personal balance sheet as a result of the difficult recession we went through," Nothaft says.

Source: Bloomberg, Kathleen M. Howley, Prashant Gopal, John Gittelsohn (03/11/2010)

© Copyright 2010 INFORMATION, INC

If you can say that you aren't in trouble with your mortgage, then consider yourself one of the lucky ones. Making responsible choices has paid off and so far you haven't had to face the threat of foreclosure on your home. Unfortunately, in today's economy, it is tough to be sure that it will remain that way. Unemployment rates are through the roof and unexpected events such as serious illness are enough to take down even the most consciencious homeowners. Here are some things you can do to recession-proof yourself and make sure that your home doesn't become a foreclosure statistic.

Most importantly, you must save, save, SAVE! Make sure that you have a minimum of three months worth of mortgage payments saved in case of emergency. To get there, make a household budget and stick to it. Chances are that if you sat down and reviewed your current spending habits you will see ways you can cut back. Here are a few ideas that can help you build up your financial safety net:

• Cut out the coffee (not completely, of course)-Are you addicted to stopping at Starbucks? Gotta have your Dunkin Donuts? Coffee at places like these can be $2-4 per cup. Break out your coffee maker and brew your own to save some cash.
• Bag your own lunch-Going out to lunch is great but it takes its toll on your pocketbook and waistline. Spare both and bring your lunch from home. You'll end up with extra money and extra room in your jeans!
• Make it a movie night-Do you love the nightlife? Drinks out these days go for up to $10 a piece. Save your cash and spend the night in with a good movie and a bottle of wine. Your wallet will be glad you did!

Keep yourself honest in your efforts by writing down your purchases each day. Review them objectively at the end of the day and if you stumble, make it a point to do better the next day. By keeping your eyes on the prize and building your financial security, you can ensure your future no matter what the economy throws your way.

President Obama has a plan to help 7-9 million families to refinance or restructure their loans called the Homeowner Stability Initiative. President Obama wants to make a point that this plan is to help responsible families, not those who have made poor judgements and investments. This plan is not for investors; it is only for those who live in their homes and are worried about keeping their home.

Even if you are not behind on your mortgage yet, help is available to you through this plan. If you have been affected by declining home values to where your house is now worth less than the remainder owed on your mortgage, refinancing is now available. Its aim is to restore the balance between the homes value and the amount owed on the mortgage so that keeping your home is affordable to you.

If you are behind on your mortgage due to circumstances like job loss, illness in your family, or a dramatic increase in your payments due to rising interest rates, there is now a $75 billion dollar plan in place to make reduce your mortgage payments to 31% of your annual income. The lenders will need to restructure loans for these homeowners and it will be up to them to decide who will receive aid. Why? It is not in the lender's best interests to restructure a loan for someone who will likely default in the future. They will need to determine whether this is a person who simply bought more house than they could afford or someone who made responsible decisions but has been suffering financially nonetheless. It may end up that it is in the lender's best interest to foreclose on the home while the home's value is higher and that is what will end up happening under those circumstances.

Homeowners are expected to feel relief from this plan almost immediately after it goes into full effect on March 4th. If you are having trouble paying your mortgage, contact your lender now and see what can be done to help you save your credit and your home.