Home Buying

It’s Time to Re-Approve Your Pre-Approval

As the federal home buyer tax credit nears its April 30 end-date, there’s a lot of would-be home buyers still working to get under contract in Chesterton, Crown Point, Dyer, Highland, Munster, Portage, Schererville and Valparaiso.

A piece of advice for all of them: If your pre-qualification and/or pre-approval letter is more than 8 weeks old, it would be prudent to have your lender “re-pre-approve” you.  Mortgage guidelines have been in flux and your original lender letter may now be invalid.

For example, over the past half-dozen months, the majority of mortgage lenders in Northwest Indiana have reduced their risk tolerance with respect to:

• Maximum debt-to-income ratios
• Minimum allowable credit scores
• Calculation of “assets in reserve”

For buyers of condominiums and co-ops, even the subject property itself is coming under tougher scrutiny.

Today’s mortgage applicants need to be a complete package. It takes more than just good income and credit to get approved anymore and today’s buyers should revisit their qualifications. What passed underwriting in January may not pass in May.

Being pro-active brings other advantages, too. If a mortgage re-pre-approval does unearth an issue, it’ll be easier for every party to the transaction to address and correct it up-front versus trying to clean up a mess once a home’s already under contract.

Talk to your Realtor and your Certified Mortgage Planning Specialist about your pre-qualification/pre-approval letter before you bid on a home in Northwest Indiana.

Contact James K Barath in Northwest Indiana to Qualify for Your FREE FHA Home Loan Approval Today!

Home Buying

Top 10 Cities for Bargain Homes

As the housing market improves across the country, certain cities are emerging as relative bargains.  Some areas, like Miami, were hit hard by the recession, and other areas are buoyed by good school systems and strong labor markets.

In this 5-minute video from The Today Show, 10 cities are highlighted for their bargain home prices based on size, value, local job growth and home value appreciation.  And they’re not “small towns”, either.

Among the featured cities:

• Miami, Florida
• Akron, Ohio
• Tuscon, Arizona
• Minneapolis, Minnesota
• Trenton, New Jersey

Although this video clip is about finding gems on a national scale, did you know that home bargains also exist locally in Northwest Indiana. You just need to know what to look for.

With mortgage rates low and tax credits available, it’s not likely that bargains will last.

Need more expert advice? Ask the team of Certified Mortgage Planning Specialists at Benchmark Mortgage.

Home Buying

Home Buyers Get Green Light as Pending Home Sales Plunge

Just one month after touching a 3-year high, the National Association of Realtors® Pending Home Sales index plunged in November.  A “pending” home sale is a home that is under contract to sell, but has yet to close.

The 16 percent drop marks the first retreat in Pending Home Sales since January of last year.

The weak Pending Home Sales data is an indication that Existing Home Sales data will be soft this month. This is because, historically, 80 percent of Pending Home Sales convert to “closed sales” within 60 days, and most of the rest close within 120.

With Pending Home Sales down, the housing market should lose some of its momentum.  For today’s home buyers, this kind of slack can represent a terrific opportunity.

Home prices are a function of supply and demand; of buyers and sellers. When buyers outnumber sellers, competition leads to bidding wars, ultimately, and higher home prices overall.  The imbalance can also create a sense of urgency that results in over-paying for a home.

When buyers are sparse, on the other hand, the psychology of real estate shifts. 

Home sellers are keenly aware of foot traffic and requests for second and third showings. Without buyers, their homes can’t sell.  They also note a lack of general feedback from the market.

It’s at this point that seller fear can creep in and it becomes a buyer’s best time to buy.

Based on November’s Pending Home Sales data, it’s clear that home sellers are in abundance right now.  Home buyers have leverage.

It may not last.

With mortgage rates easing lower this week, the federal home buyer tax credit still in effect, and the Holiday Season officially over, buyers are getting back to business everywhere. 

Plus, with the tax credit deadline of April 30, 2010 fast approaching, buyer activity should increase over the next 4-6 weeks.

The market looks ripe for a buy but don’t rush it.  Take your time and bid right. But when you’re ready, be ready – once the momentum shifts back to sellers, you might lose all that leverage you built up through the winter.

Need more expert advice? Ask the team of Certified Mortgage Planning Specialists at Benchmark Mortgage.

Home Buying

How To Find Good Deals As Buyers Market Comes To An End

Home Buying

The Minimum Preparatory Steps When Co-Purchasing a Home with a Friend or Family Member

Both mortgage guidelines and the economy have tightened since 2006, bringing more attention to “joint homeowners” — non-spousal partners that buy and share a home as roommates.

The practice is not new, but, anecdotally, co-purchasing is becoming more common.

In the video above — filmed two years ago but still on-target today — real estate expert Barbara Corcoran provides good advice for co-purchasing partners. Like any business relationship, it’s important to plan ahead.

• Hire an attorney to draft contracts and agreements
• Have a plan for when one or both parties wants to move or sell
• Consider life insurance policies on each other

The over-riding theme for co-purchasing arrangements is to be prepared. Done right, however, they can create two proud homeowners where there would have otherwise been none.