Dec 16, 2013
The world of mortgage lending has changed significantly since the housing bubble burst. Mortgage lenders have returned to traditional loan standards that require extensive documentation of income and assets for a loan approval
Government regulatory agencies also continue to react to the housing crisis, with more adjustments to mortgage requirements set to go into effect in 2014:
Qualified Mortgage Rules
Whether you’re thinking of buying a home or mulling over refinancing your mortgage, Jan. 10, 2014, could be an important date for you to remember. The Consumer Financial Protection Bureau is in the process of implementing regulations to meet goals set forth by the Dodd-Frank Act in Congress, which was meant to correct the errors that led to the housing crisis. The CFPB’s “Qualified Mortgage,” or QM, rules go into effect in January. Essentially, these rules require lenders to prove borrowers’ ability to repay a loan by meeting several guidelines, including a maximum debt-to-income ratio of 43 percent. While many lenders already limit borrowers to a similar maximum debt-to-income ratio, the new rules won’t allow for any compensating circumstances such as significant cash reserves or a large down payment to be considered in order to offset a higher debt ratio.
If you have credit problems or a high debt-to-income ratio, you may want to push through your loan application for a refinance or home purchase to make sure you close your loan before the new rules go into effect. However, many lenders are already using QM standards in order to make sure they’re in compliance with the regulation. Mortgages that don’t meet QM standards will have to be held by the lender rather than sold to Fannie Mae and Freddie Mac, so most lenders are careful to meet the new standards.
The 3 Percent Rule
The new QM requirements also limit fees for originating a loan to no more than 3 percent of the loan amount. If you’re financing a more costly home, such as a $400,000 home or more, the lender can easily keep fees under 3 percent, which in this case would be $12,000. However, if you’re refinancing a smaller loan balance or purchasing a less expensive home — for example, for $80,000 — the lender might find it more difficult to keep all fees under $2,400. Mortgage lenders are less likely to offer loans for smaller amounts since they won’t always recoup their costs and make enough profit to pay their staff. If you need a small loan, you may want to push to get it closed before Jan. 10, 2014.
Self-Employed Borrowers
One particular group of borrowers will most likely be impacted by the QM rules: self-employed borrowers. These borrowers already are heavily scrutinized and find it more difficult to obtain a mortgage because they must prove their income based on tax returns and profit-and-loss statements, rather than standard paystubs and W2 forms. The “ability-to-repay” feature of QM rules requires all borrowers to prove they have the cash flow to make payments on their mortgage. Self-employed borrowers often have fluctuating income and rely on cash reserves to pay bills in-between payments, but the emphasis on cash flow can make it harder for lenders to approve a loan even for someone with significant funds in the bank.
Potential Lower Loan Limits
The Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, announced in October that plans to reduce the maximum loan limits for conventional conforming loans will be delayed until later in 2014. Typically, loan limits are adjusted on Jan. 1 of each year, but the agency decided to wait to see the impact of the introduction of QM rules before making changes. Currently, the limits are $417,000 in most housing markets and rise to $625,500 in high cost areas. If you need a mortgage near these limits, it would be wise to close your loan earlier in 2014 rather than later in case limits are lowered.
Realtor.com
Dec 16, 2013
Home remodeling may have taken a backseat during the recession, but not anymore. According to a 2013 Hanley Wood Survey, remodeling sales were up 10 percent compared to 2012, and 45 percent of remodelers surveyed expected another 10 percent growth in 2014.
Home remodeling is back in again, and with the desire to improve our homesteads come a bunch of new and exciting trends we’ll start seeing next year.
1. Modern Kitchens
According to data compiled by Hanley Wood and Remodeling Magazine, 61 percent of remodelers surveyed expect to complete kitchen remodels in 2014, more than any other room in the house. And, those remodels are expected to follow a new trend.
Not so long ago, remodeled kitchens had a rustic feel with warm paint colors and cabinetry, and wrought iron hardware and lighting. Now, modern is in, with white or gray cabinetry, simple countertops, glossy finishes and minimalist designs. Appliances are more likely to be blended into the design or hidden away from view entirely to give the kitchen a sleeker appearance.
2. Brass Accents
Brass made a comeback at home-design and remodeling conventions this year and the trend is expected to pick up in 2014. While brass is nothing new, it has gotten a facelift. Highly polished, bright brass hardware and lighting is gone; rustic, dull and hammered brass is in. The new looks will be incorporated into kitchen and bathroom hardware as well as lighting and door hardware throughout the house.
3. Updated Bathrooms
In the Hanley Wood survey, bathrooms came in second to the kitchen with 58 percent of remodelers planning to do bathroom remodels in 2014. As far as style, vintage bathrooms with wainscoting and claw-foot tubs won’t be as popular as resort-style bathrooms that feature amenities such as large walk-in showers with multiple shower heads, heated floors or towel racks, and jetted bathtubs. For coloring and style, glass tiles will be a popular feature as well as neutral and cool colors like ash gray, light blue and off-white.
4. Vibrant Colors
While the kitchen may be getting the modern single-shade treatment next year, designers have a different idea for other rooms. Bright accent colors such as turquoise, yellow and orange that were popular in 2013 have a new twist; in 2014, they’ll be more of a focal point and even more vibrant with colors such as Green Flash, Lemon Zest, Nectarine and Rouge Red, according to Pantone, the international authority on color. Designers will start featuring vibrant accent walls, main paint colors and flooring throughout bedrooms and main living spaces.
5. Sustainable Materials
Going green is nothing new, but sustainability may get easier in 2014 remodels. According to Craig Webb, editor-in-chief of Remodeling Magazine, “Manufacturers and builders are constantly getting greener and greener in the way they source materials and put up homes.” As a result, “Energy efficiency is becoming an assumption, not an add-on.” Next year, remodels will include more renewable materials such as bamboo, energy-efficient appliances and additional designs that incorporate the local climate
Realtor.com
Oct 21, 2013
As you search for a home, you may have come across the term easement in a listing and wondered what it means. An easement is a legal arrangement by the owner of the property and a non-owner to use the property in some fashion. You may see this term used in listings where a home is located near a public recreational area. For example, the property may come with a walking easement to the nearby lake.
If there are any existing easements between the current seller and a neighbor, the seller’s attorney or the seller’s agent needs to advise the buyer. It’s important to know if easements exist and how they affect the purchase or usage of the home being bought. Easements often allow the use of a pathway between adjacent properties or a pathway to reach a common play area, yard or even a fish pond.
The most common easement is called the right of way, allowing people to pass through. Easement of support refers to excavations of property. Delivery people and meter readers all have the right to step on your property by easement of right of way. Less common are easements of light and air and rights regarding artificial waterways. Easements can be hotly contested, especially where rights to oceanfront property or conservation land are in dispute.
Easements are mostly created by a binding written document. As a rule, courts base the allowance to have an easement on intention of the original parties in each situation. Courts prefer written easements and also consider account customs, habits and practices for the property.
A real estate attorney working for a home buyer can investigate any current easements connected to the property. The attorney will explain the ramifications to the buyers. Because easements are a property law issue, they are usually straightforward. An easement can be canceled in writing, by expiration date, in estoppel and even by death. For further clarification about your specific situation, consult with a real estate attorney on what easements mean to your home purchase.
Realtor.com 2013
Oct 21, 2013
Property values have come roaring back. Many can now refinance their loans by virtue of having additional home equity. And increased property values can also put homeowners in a better financial position to sell their home without entering short sale territory. But the fact remains: Everyone wants to attain maximum value for their real estate and home repairs can help. So what’s the best barometer of a home’s true worth? Simple: the amount a ready, willing and able buyer is willing to pay at any given point in time. Unfortunately, appraisal estimates can be skewed, especially when not all the home repairs and improvements are taken into consideration. This is why you should weigh all home improvement decisions carefully before you commit.
When You’re Refinancing
Unlike in years past, the weight of an appraisal to determine the home value for the purposes of refinancing a mortgage is based upon the facts (which are primarily based on other homes that have sold) and what the property description is.
Improvements that may help a refinance valuation:
- Additional bedroom or bathroom
- Addition to the lot size
- Addition to the garage
- Improvement that expands the “use” of the home
When it comes to improvements such as landscaping, painting, any home improvement more “cosmetic” in nature, realize that the primary benefit is for the enjoyment of the property, not for trying to influence value.
When Selling
A home buyer is going to take into consideration all of the facts associated with the property, location, lot size, square footage, bedrooms and bathrooms, as well as additional cosmetic improvements that have been done that add to the look and feel of the home.
Improvements that may help a sale price:
- New paint job
- Freshly maintained landscaping
- Remodeled and/or upgraded interior
- Deck and/or patio addition
- Additional bedroom or bathroom
- Addition to the lot size
- Addition to the garage
What’s the Biggest Bang for Your Buck?
These include the high-ticket items that increase square footage. An additional bedroom or an additional bathroom increases the square footage, which in turn allows an appraiser to make higher adjustments when determining valuation against other comparable homes around the subject property.
Refinancing
Let’s say you have funds ready for possibly improving your home for long-term enjoyment. Instead of using the funds to make home improvements in an attempt to enjoy your home more, you might actually see a greater benefit if you used that money toward a refinance. Over time, the money you save from refinancing could then be put toward those home improvements down the road.
Selling in the Near Future
Typically, you won’t get a dollar-for-dollar recapture on the home improvement cost, even when selling. Because the weight is given to improvements that expand the use of the house (i.e. bedroom, bathrooms, etc.), it’s more common to expect 20 cents on the dollar, or maybe 30 cents on the dollar, depending on the improvement in such a scenario. Because the market is the strongest indicator of price, the market will dictate sales price followed by additional improvements and subsequent marketing of the home.
Realtor.com 2013
Sep 11, 2013
Talk to 10 different people about homeowners associations (HOAs), and you’ll likely get 10 different opinions. Some people love living in a development with an HOA, while others find it too restrictive. Depending on your lifestyle and needs, it can be a great experience or one that feels too intrusive. Today about one in five Americans live in a house with home-owner or condo fees.
HOAs began in the mid-19th century but didn’t really gain in popularity until the early 1960s, as an outgrowth of the postwar housing boom and the growth of the middle class. Typically, an HOA is incorporated by the developer during the development and sales process, and gradually control and ownership are transferred to the home purchasers upon completion of the project. The original owner/developer quits membership in the association and has nothing more to do with it. Anyone purchasing a home in an existing housing development with an HOA must become a member. There is no other option. The overall purpose of the HOA is to represent the residents. Depending on how active these associations are, they can be quite effective in providing forums for common home-owner representation and needs.
HOAs Are Like Small Towns
A homeowners association governs the development like a small town. The HOA’s powers include imposing fines, organizing activities and providing certain services. It can also levy assessments and force home owners to pay them. Many HOAs have yearly dues, and a homeowners association can legally impose monetary fines to enforce its decisions. The groups usually appoint a board of directors, which may then elect an association president and other officers. Meetings are typically monthly but can be quarterly, depending on the size of the group.
If the HOA is larger, it will likely be broken down into committees. Committees are also appointed for various activities: maintenance, membership dues and neighborhood representation. An accounting committee or, in smaller HOAs, an individual is assigned to present the annual budget and monitor expenses and funds collected. During the foreclosure crisis, some HOAs began to lose revenue as people living in homes facing foreclosure stopped paying their fees.
HOAs Can Promote Neighborhood Harmony and Uniformity
HOAs offer many benefits to the home owner. According to the bylaws of the association, it can collectively represent the group for whatever purposes assigned. For example, to maintain a certain degree of conformity, the association can stipulate which changes are permitted for the exterior of the buildings. Sometimes the HOA can determine acceptable noise levels. If there are common areas, such as gardens and pools, the members can appoint an internal management committee or elect to bring in an outside maintenance company. On snowy days, a snow-removal company may need to be called in, and this service will be paid for out of the association’s funds. For condos or groups with shared structures or parking lots, fees can go to upkeep.
HOAs Can Be Restrictive and a Financial Drain
If you want to change the color of your house or even add a new tree, you may run afoul of your local organization. Also, if your HOA decides to undertake a major capital improvement project and the governing group approves it, you may be left with no choice but to pay your share. If you fail to pay your dues or you go against the HOA rules, you could be assessed fees and late charges. If you disagree with some of the rules, it can be very hard to get them changed.
Overall, most people see an HOA as a positive. According to the Foundation for Community Association Research (FCAR), 70 percent of residents in common-interest communities say they are satisfied with their community-association experience. The FCAR’s research also found that 76 percent believe their own community-association rules “protect and enhance” property values.
Realtor.com
Jun 14, 2013
Buttermilk-and-Honey Chicken Kabobs
Ingredients
- 1/4 cup hot sauce
- 1/4 cup tomato paste
- 3 tablespoons honey
- 1 cup buttermilk
- 1/2 small sweet onion, grated
- 6 garlic cloves, minced
- 1 tablespoon cracked black pepper
- 2 1/4 teaspoons salt, divided
- 3 pounds skinned and boned chicken thighs, trimmed and cut into 2-inch chunks
- 10 (6-inch) wooden or metal skewers
- Vegetable cooking spray
- Grilled lemon halves
- Toasted Pecan Pesto (See Preparation Below)
Preparation
- Whisk together first 3 ingredients in a large bowl until smooth; whisk in buttermilk, next 3 ingredients, and 2 tsp. salt until blended.
- Place buttermilk mixture and chicken in a large zip-top plastic freezer bag; seal and chill 3 hours.
- Meanwhile, soak wooden skewers in water 30 minutes. (Omit if using metal skewers.)
- Coat cold cooking grate of grill with cooking spray, and place on grill. Preheat grill to 350° to 400° (medium-high) heat. Remove chicken from marinade, discarding marinade. Thread chicken onto skewers, leaving a 1/8-inch space between pieces; sprinkle with remaining 1/4 tsp. salt.
- Grill kabobs, covered with grill lid, 6 to 8 minutes on each side or until chicken is done.
- Serve with lemon halves and Toasted Pecan Pesto.
Toasted Pecan Pesto
- 2 1/2 cups loosely packed fresh basil leaves
- 2/3 cup olive oil
- 1/2 cup chopped toasted pecans
- 1/2 cup loosely packed fresh mint leaves
- 2 garlic cloves, sliced
- 1 tablespoon fresh lemon juice
- 3/4 teaspoon salt
- 1/4 teaspoon dried crushed red pepper
Preparation
- Process all ingredients in a food processor until smooth, stopping to scrape down sides as needed. Cover and chill 1 to 8 hours before serving.
Southern Living Magazine-June 2013
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