The big financing news this week is that HUD has brought back the $100 down payment program.  Details on this program can be found here.

Remember loan amount, loan-to-value and credit scores will always play a part in the rate that home buyers qualify for.

All 30 year loans

• Rural Development 100% financing:  3.75% with 0 points
• FHA: 3.75% with o points
• Conventional Loans: 4.0% with o points
• VA: 3.75%

15 year loans

• FHA:  3.375%

This information is courtesy of:

Jeffrey Johnson, Mortgage Consultant
Nola Lending Group, LLC
7611 Maple St. Ste.A3
New Orleans, La 70118

Cell: 504-250-7210
Email: Jeff@nolalending.com
Efax: 504-648-3000

We all have a tendency to accumulate things/stuff/junk in our homes.  If you are one of those people that never keeps something just in case, then this is not for you.  For the rest of us, getting rid of things can be a chore.

Fortunately, there are a couple of really easy ways to dispose of things you no longer want, and certainly don’t want to move, that could be useful to someone else.

pickupplease.org

This website allows you to schedule a free pickup of unwanted household goods, clothing, small appliances and small furniture.  It’s easy, easy, easy to just go to the site, provide your pick up address and choose from several different pick up dates throughout the month.  I used them this week and loaded up my front porch with bags of clothes that no longer fit (don’t ask), a box full of coffee cups (I have no idea where they all came from), an old end table and a box of what appeared to be every curtain that has ever hung in my home at one time or another.  When I got back home, all of the items were gone and they left behind a door hanger receipt for tax purposes.  You can’t get much better than that!  The bonus is that donations are used to support local, state and national programs for Vietnam Veterans of America.

Visit pickupplease.org

freecycle.org

Freecycle is a community group that posts items they are offering for free or allows folks to request items they are in need of.  You’ll have to create an account with them, but once that’s done, you can post your discards on the site for pickup by anyone in need.  I’ve used this site as well, getting rid of shoes that I don’t wear anymore by giving them to a member of the Krewe of Muses who is busily gluing, glittering and otherwise embellishing shoes for the parade this year.

Visit freecycle.org

If you know of any other local businesses accepting donations that we can support or get the word out for, please leave their information in the comments below.

Remember loan amount, loan-to-value and credit scores will always play a part in the rate that home buyers qualify for.

All 30 year loans

• Rural Development 100% financing:  3.75% with 0 points
• FHA: 3.75% with o points
• Conventional Loans: 3.875% with o points
• VA: 3.75%

15 year loans

• FHA:  3.375%
• Conventional: 3.25%

This information is courtesy of:

Jeffrey Johnson, Mortgage Consultant
Nola Lending Group, LLC
7611 Maple St. Ste.A3
New Orleans, La 70118

Cell: 504-250-7210
Email: Jeff@nolalending.com
Efax: 504-648-3000

For a seller, the goal is to get that house sold.  At the highest price the market will support.  In the shortest amount of time humanly possible.

For a buyer, the goal is to find a house that says home.  With the right amount of space.  And a few upgrades.  And that is a bargain.

Since buyers and sellers have some conflicting goals, offers and counter offers can sometimes be taken personally.

What are the risks?

Counter offers always set up the risk of the other side just walking away from a possible sale.

Buyers may be fishing for a deeply discounted home and offend the owner with what they perceive as an insulting offer.  Unless their agent is experienced in keeping the emotions out of a sale, this insulted feeling can cause the seller to make a counter offer that says “go away, I’ll never sell you my home” to the buyer, either by countering at full price or just a few dollars below.  And that’s OK…as long as the seller is willing to take a feeling of satisfaction over the possibility of actually coming to terms and getting their house sold.

Sellers are, rightfully, proud of the home they have created and their pricing tends to have a lot of emotion built into it.  It’s also possible that they bought when the market was higher and need a certain price to avoid it costing them money to sell their home.  In either scenario, the home owner might be stuck on a price that a buyer just can’t justify based on what other homes are selling for.  Again, an unrealistic counter could have them looking at the backs of the buyers as they walk away.

You’ll note I said unrealistic.

If an offer is low just because the buyer thinks that every home is selling for pennies on the dollar, then they will quickly find themselves on the side of a number of rejections by sellers.  Conversely, if a seller counters at a price that their agent is advising against based on the market, they will find themselves continuing to own a property that may not fit their needs any longer as the buyer moves on to one of the other properties available.

The bottom line is that sellers want to sell and buyers want to buy.  Allowing a small amount of money to keep this from happening (on either side) is never a good strategy, but it happens all of the time.  I’ve seen buyers and sellers dig in their heels when they are only $500 apart.  As long as you are willing to risk losing a sale or the house that you want, go on with your bad self.

If you want to actually get to a closing, tamp down those emotions, listen to the advice of your real estate professional and find a happy medium, which is what a successful negotiation really accomplishes anyway.

Find New Orleans homes for sale

What’s my New Orleans home worth?

Know the home-court advantage:  While we have definitely helped buy and sell more houses than the average person, I can assure you that we do not know what you are thinking, nor have we taken any classes to read you and sell you.  If you are working with a professional agent, you shouldn’t have to be on guard.  You should know, instead, that a good agent doesn’t sell you a house.

Watch for the qualifying questions:  We don’t need to look for your wedding ring or ask questions about how much you can afford, because a prepared buyer has already taken the steps to be pre-qualified for a mortgage.  This isn’t a car.  It’s likely the largest single purchase you will ever make and the people (and banks) selling homes will not be willing to even start negotiating with you until they are sure you are qualified and not wasting their time.

Hit the streets:  There are rules that agents and brokers must follow when a property is no longer available and that includes updating the status within 72 hours of a home going under contract, being sold or leased or even being taken off of the market.  That said, there will always be a delay in updating some third party sites such as Trulia or Zillow, since they don’t get listing information directly from the MLS.  If you find that a particular site is always out of date, you may want to do a little digging and find a more up to date local site for your home search.

Put time on your side:  “When the agent sends you information…act blase.  Being too eager tips your hand”  Your agent is absolutely the one person that you should inform that you are eager.  It’s the seller that you don’t want to tip your hand to and your agent is there to protect you from doing just that.

Don’t get emotional:  This actually is pretty good advice, because there certainly are things that can derail a home purchase (inspections, appraisal).  Except that buying a home is almost always emotional.  We tell buyers that when they walk into the house that should be their home, they will know it.  Of all of the houses I’ve ever lived in, each one whispered “buy me” as I walked through.

I feel sorry for the person who wrote this piece, because she obviously didn’t feel like her REALTOR® was on her side during her home purchase.  If you have any of those same concerns about your agent, it might be time to find a new one.

When family gets involved in a home purchase, it can makes things a little more challenging (or a little more exciting!), depending on your family’s agenda.

Before you decide to bring a family member along to view homes and share their opinion, ask yourself a few questions

Are they supportive of your decision to buy a home?  Sometimes, friends and family will throw up objections to convince you of all of the reasons to NOT buy a house.  What if prices drop?  What if rates go down more?  What if you find a better deal next week?  You need to know if they are going to be a fun and constructive part of home buying or if you just need to send them an invitation to the house warming after you move in.

Are they in agreement about where you want to live?  This can cause a lot of conflict if the family doesn’t like where you have decided to call home.  They may think the neighborhood is not nice enough, that it’s too much of a commute to your job, that it’s too far away from their own home and not convenient for them to pop in without calling. In these cases, we often find family members making objections to homes when their real objection is just that they don’t want you to be so far away from them.  Again, knowing this in advance might determine who is invited on the house hunting trip.

Are they providing some of the money for your purchase?  Whenever a family member is giving you money towards a home purchase, they generally feel entitled to put their two cents in about what home you choose.  It’s probably best to set the ground rules ahead of time for how much input they will have on what house you decide to buy or to forgo buying until you are able to save enough to do it without their help.

When was the last time they bought or sold a house?  The longer it’s been since someone has purchased or sold real estate, the more things have changed.  I remember when we bought our first house, no one was doing home inspections.  It was basically buyer beware and what you see is what you get.  Today, we will beg until we are blue in the face to encourage our buyers to have a home inspection done on any house they want to buy (even new construction). Building codes have changed, what’s acceptable to a lender has changed and things that can derail a home purchase today weren’t even a consideration years ago.  This is where you should rely on the expertise of your agent to guide you through the process, despite the best of intentions from your family and friends.

More home buying tips

Need a little guidance on your home buying journey?  Contact the West Bank Living Team. 

As you know, the interest rate is affected by the Federal Reserve Bank’s response to the spending habits of consumers and businesses.  The nature of raising or lowering the rate is to maintain a stable economic structure that neither allows for inflation or a recession.  Basically, when people spend too much and there are fewer supplies, the demand goes up along with price to cause short-term inflation.  The Fed responds in this instance by raising short-term rates to level off the amount of spending.  Inversely, if people are not spending as much, the Fed lowers the short-term rates to encourage buying as well as borrowing to stimulate the economy from falling into a recession.

Currently, confidence in the economic stability of our country is at a historic low.  Most individuals and businesses are wary of sticking their necks out and making purchases beyond what is necessary for the basic function of their households and operations.  But how do we respond in our businesses?

Aggressive or Conservative??

As a banker, it’s easy for me to suggest that people take advantage of refinance options on their existing mortgage, especially if they can afford to lower their rate and term.  However, the question still stands as to whether or not rates will go lower.  This is an extremely hard question to tackle.  If you believe Ben Bernanke, the Federal Reserve Bank chairman, and his assessment of the future of our country, you may be inclined to wait out this period (at least 2 years by most estimates) to see if the rate goes lower than the average 4-4.25% 30 year fixed rates that many borrowers are currently cashing in on.  Bernanke, according to a recent speech he gave after the Fed announced their intention to leave rates near zero until 2013, believes that in the long run, the economy will begin to rebound on its own without the direct need of a stimulus package- although there are still rough waters ahead.

I already hear a few of our locals grumble about the terminology “rough waters.”  Remember, our economy is not the only thing that drives our interest rates.  Overseas issues, political wars, especially those that occur in the backyards of countries that import oil and gas are just a couple additional factors that can contribute to our rates (supply and demand on a larger scale).  Natural disasters such as hurricanes and, more recently, tornadoes have impacted economic stability in certain areas in dramatic proportion over the last decade.  The unemployment rate currently sits at 9.2%, a fact that hits home for many residents who are doing their best to put food on the table in a down economy.  Wouldn’t it be wise to guarantee yourself a lower payment in the event you become a victim of a change in circumstance resulting in a decrease of pay or job loss?

The long and short of this is that it’s your choice.  My assertion is that if you understand at least some the factors presented in any discussion on our country’s finances, you have figured that the only thing that is certain is now.  While I might agree with the assessments on the length of time that these rates may be available, I can’t say the same for the employment status of the members of our communities.  Two years into a down economy, more people may be without jobs, struggling to make ends meet.  Keep in mind that credit and employment are two aspects of the mortgage refinance approval process.  As I have written in previous articles, having a savings pattern now will greatly impact your family’s ability to whether financial storms as well as strengthen the community and country at large.  If you can take an opportunity to reduce your payment on your mortgage and put more money in the bank, I say take it.  Poor choices and greed are arguably two factors that have contributed to the condition of our country.  I invite you not to follow the same logic with regard to your financial future.

Thanks to Miles D. Victor of Fidelity Homestead Savings Bank for this information.  You can reach Miles at:
Phone: 504.366.1741
Fax: 504.366.0761
milesvictor@fidelityhomestead.com
NMLS ID- 708040

So, it’s a little discouraging to me when I get phone calls from folks who already have an agent but are driving around calling on signs or cruising the internet and calling listing agents.

I completely understand that you might drive by a house (or see it online) and get all excited, but your agent can give you all of the information on any property on the market, no matter what company or agent has it listed.  Not only that, but if you are seeing things that strike your fancy, your agent needs to know this!  It helps them to understand your desires even more, making them even more effective during your home search.

I’m happy to chat with anyone who picks up the phone and calls, but your interests are best served by communicating with YOUR agent.

Don’t have an agent?  Call Terri at 504.258.5178.  She’s fun, she’s fabulous and she’s the best buyer’s agent in the whole New Orleans area!

Should you rent or buy?

The buy-rent calculation is just one part of the decision-making process. Other factors include:

• How long you plan to stay. If you’re not keeping the home for several years, transactional costs of buying and selling (e.g; commissions, closing costs) can wipe out any buying edge.
• Whether you have cash for closing. It’s not easy to find banks willing to lend more than 80% of the cost of a home. That means buyers have to come up with 20% down, plus closing costs. On a $200,000 home, that’s $40,000.
• Whether you can cover all the homeownership costs. It’s not just the mortgage: There are property taxes, insurance, heat, utilities and regular maintenance.
• Whether you can claim the tax advantages of homeownership. Mortgage interest is deductible and can shave a lot off tax bills but this benefit accrues mostly to high income earners with substantial mortgage payments. Many borrowers claim the standard deduction on their taxes and so derive no savings from the deduction.….Read the entire CNN post

Here’s my issue with their advice on cash for closing…”it’s not easy to find banks willing to lend more than 80% of the cost of a home”….

NOT TRUE!  This might be the case in some of the luxury areas where prices are above the FHA loan limits, but the average home in New Orleans and the surrounding areas is selling for well under those limits and you can buy with 3.5% down, not the 20% noted in the article.  This is especially important for people relocating to New Orleans from areas with a completely different real estate climate.

Before you decide to buy or rent, take the time to talk to a local lender and find out what the real cost of owning in New Orleans would be….don’t rely on the national news to give you local information.

HUD homes (and other foreclosures) can certainly be an affordable way to buy a home.  Just don’t get caught up in thinking that banks are giving away houses or that they will all be in move in ready condition.

Ready to take a peek at what’s available?  Fill out the form below and we’ll send you a free list of foreclosures and HUD homes in minutes.