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5 things to discuss with your significant other before purchasing a home

September 29, 2016

5 things to discuss with your significant other before purchasing a home

 

By: Bpt Brandpoint

 

In a relationship, you count on your significant other to be there with you through the good and the bad. They are your best friend, your confident and your closest ally. And you count on being able to have important conversations with them as well.

One of those important conversations every couple should have focuses on money and each person’s respective financial goals, especially if you are planning to purchase a home. However, 33 percent of married or partnered adults have difficulty discussing money with their significant other, according to a Wells Fargo survey. “I think money is one of those topics most couples put off discussing because it can be sensitive,” says Arlene Maloney, senior vice president, Wells Fargo Home Mortgage. “However, if you don’t discuss money before entering into a major credit purchase, like homeownership, you open yourself up for potential problems down the road.”

Purchasing a home is one of the largest investments most people make in their lifetime. When two people decide to achieve the goal of homeownership together, it’s important to understand not only your own finances and credit profile but your partner’s finances and goals as well.

To help you broach this conversation with your partner, here are some things you should discuss before you move forward:

Where you will live and what you want to purchase. Do you want to live in the city or the suburbs? Are you set on a single-family home or a condo? Do you want to build your home or purchase an established property? Having answers to these questions will help you speak to a lender and learn more about how the type of home you choose may affect loan approval requirements or what options exist if you want to build your home. You’ll also learn if any bond or down payment assistance programs may be offered in the municipalities you are considering.

Your partner’s credit score. Lenders use customers’ credit profiles to help determine your ability to repay a loan. When purchasing a home with someone else, both of your credit scores are considered. In most cases the lowest middle score between the two of you will be used. If you or your significant other has a very low score this may not only impact the loan amount you receive but also the interest rate. It may even prevent approval. If one of the credit scores is very low, as a couple you might discuss only one person applying for the mortgage loan.

Have an honest conversation about debt. An important factor that lenders evaluate is your debt-to-income ratio. This varies by mortgage program but a good rule of thumb is to ensure your debt level is at or below 36 percent of your gross monthly income. Having an overabundance of debt could impact the amount of the loan or whether you receive mortgage approval.

How much money can you put toward the purchase? It isn’t necessary for you to put 20 percent down but most loan options require some sort of down payment. In many cases lower down payment options require mortgage insurance, which will increase your monthly payment.

Will one or both of you be on the note? If purchasing a home with someone else, each of you must qualify in order to be on the note, and both of you are responsible for the debt. If only one person is on the note, the other may not engage in any transactions regarding the loan, including refinancing, or application for modification. If one of you has less desirable credit, you may decide that only one of you will apply for the mortgage. You should also consult your state’s attorney general’s office to see if any community property laws exist in your state. Such laws could make a spouse legally responsible for any debt acquired by the other spouse after marriage. If such a law exists in your state, it’s important you are aware of it.

Purchasing your first home is an exciting time and, for many people, a sign of success. But while you may want to rush out and start the shopping process now, take your time. Having a conversation with your significant other about the topics above beforehand will ensure you’re both on the same page and set you up to make the most of your future and the home it includes. To find answers to your other questions about credit and homeownership, visit Wells Fargo’s Smarter Credit Center or WellsFargo.com/mortgage.

 

Consider me your resource for all things real estate!  Selling, buying, upsizing, downsizing, relocating, investing, vendor referrals, shoulder to cry on during renovations and more.  Just send me an email or call me at 619-888-2117. 

 

Real Estate @ A Glance: September 2016 Edition

September 20, 2016

 

 

 

Here is the most recent information on the San Diego housing market. For specific information on your neighborhood or a market analysis on your home, please send me an email or call me at 619-888-2117.

Reportable Period :: AUGUST 2016:: SAN DIEGO ASSOCIATION OF REALTORS®

Closed sales began to cool for much of the country last month, and conventional wisdom indicates that year-over-year declines are going to be present for the remainder of the year, given the low inventory situation in most markets. Demand is certainly present and has created competitive situations that have kept prices up. Rental prices are also up, which may lure more toward homeownership.

As inventory continues to drop, the contradictions of today’s market are evident. Sellers should feel confident enough to list homes at fair prices and receive meaningful offers in a healthy residential real estate and overall economic environment.

Median Sales Price: $505,000
Days on the Market Until Sale: 30
Housing Affordability Index: 2016-Q2: 26%
Months Supply: 2.3

Reportable Period:: August 2016 :: SAN DIEGO ASSOCIATION OF REALTORS®

total-market-august

 

 

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5 Newbie Mortgage Mistakes (and How Much Each Could Cost You)

September 15, 2016

How Much Will It Cost You

 

Can’t wait to cozy up in that cute Colonial, but anxious about signing up for your first mortgage? We get it. Buying your first home is a big stinking deal. But with a little know-how, it’s easier than expected to make smart mortgage moves and save big bucks over the course of your loan.

By avoiding these mistakes, you can put your home-buying butterflies to rest.

1. Finding Your Home Before You Find Your Mortgage

How Much It Could Cost You: Enough to send your future kid to college. Seriously, over the life of the loan, you could end up paying tens of thousands of dollars more in interest and fees than you need to.

Why People Mess This Up: If you don’t have your financing buttoned up before you find your dream home, your desire to win the bid could influence you to offer a higher price and overpay on a mortgage because you had no time to shop around. Getting your financing all set before you feel the pressure to make an offer gives you time to qualify for a more attractive loan and gives you the confidence to make a fair offer because you’re a qualified buyer.

How to Avoid It: Start talking to lenders at least three months — maybe even a year — before you start house hunting. Time-consuming tweaks like paying down debt or improving your credit score can have a dramatic effect on overall mortgage costs.

2. Not Comparing Loans Correctly

How Much It Could Cost You: Just like No. 1 above, you could overpay by tens of thousands over the life your loan.

Why People Mess This Up: First-time buyers often get seduced by a low interest rate and don’t take into account the cost of fees. A lower-interest loan could actually cost you more than one with a higher rate because those fees can be steep enough to outweigh the interest savings.

How to Avoid It: Compare loans by the annual percentage rate, or APR, not just by interest rate. Each lender should give you a document aptly named “loan estimate.” The APR will be listed there (if it’s not, you don’t want that lender). The APR combines a home loan’s interest rate with closing costs and other fees like points (which is why it’s usually higher than the interest rate), then converts the overall costs to an annual percentage. This gives you an apples-to-apples comparison so you can understand what you’re paying over the life of the loan. You’re welcome!

3. Falling for Marketing Gimmicks

How Much It Could Cost You: More than enough to buy a good used car (or at least enough to cover Uber fees for a few years).

Why People Mess This Up: ”Lenders use advertising hooks like, ‘We pay your mortgage insurance,’ or ‘You don’t pay the closing costs,’” says Casey Fleming, mortgage adviser in Silicon Valley, Calif., and author of “The Loan Guide: How to Get the Best Possible Mortgage.” Don’t be fooled. “You still pay those costs,” he says. “If you’re not paying in cash, you’re paying it in the interest rate.” Fleming estimates those costs can add a quarter point to an interest rate, which as an example, translates to $9,203 (the difference between a 4% interest rate and one that is 4.25%) for a mortgage of $176,000.

How to Avoid It: Block out the noise. Shop for your mortgage according to trusted recommendations and reliable reviews, not slick deals that sound too good to be true.

4. Not Budgeting for Your Craft Beer and Yoga Pants

How Much It Could Cost You: Time and money for the things you love to do, like meeting friends over a pitcher of the newest session beer, then hitting the gym in the morning to work it off.

Why People Mess This Up: Lenders qualify you for what you technically can afford on a spreadsheet. They’re looking at your monthly debt-to-income ratio. They don’t look at what you spend your disposable income on: your passions and hobbies. So homebuyers often end up with a mortgage payment they can only afford by scaling back on the things they enjoy.

“One homebuyer may be a homebody, like to cook, and have no pets to pay for,” says Dave Jacobin, president of 1st Mariner Mortgage. “Meanwhile, a second buyer with the exact same income and debt situation might travel every weekend, enjoy fine dining, or shop a lot. Lenders can’t look at that.”

How to Avoid It: Track your spending monthly, so you really know how much you spend. Factor fun into your future when deciding which mortgage offer is the best fit. “Two years into your home purchase, you want to be happy you did it,” says Jacobin. “You don’t want to be mortgage poor.”

5. Not Knowing How to Eyeball the Paperwork

How Much It Could Cost You: Thousands of dollars in surprise closing costs.

Why People Mess This Up: Because the paperwork seems so freaking daunting. But good news: As of October 2015, new mortgage rules require lenders to send you paperwork that actually makes sense.

This new paperwork comes in two different documents. It’s much easier to scan and understand than the old paperwork, which used to be the model for everything bad about tiny legal print.

1. The loan estimate will come first. Here are some key things to look for:

The APR (see No. 2 above)
The interest rate
The monthly payment
The loan terms, such as a 30-year or 15-year mortgage, adjustable rate or fixed
The total cost of the loan
Cash amount you’ll need at closing

2. The closing document will come at least three days before you close. It should look just like the first document, but instead of estimates it will have final numbers. If you see any increases or additional fees you weren’t expecting, question the lender immediately. Because if it shows even a tenth of a percent interest-rate jump you weren’t expecting (say 4.1% instead of 4%) — and you don’t question it — that could mean a difference of almost $3,700 on a $176,000 mortgage.

How to Avoid It: Watch for those docs. Review and compare them. And, most importantly, don’t be afraid to speak up if you spot a surprise. Now, how easy was that?

Article from: ClientDirect

 

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Time to Sell?

September 8, 2016

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timetosell-300dpi

Homeowners Insurance: Is Mold Covered?

September 1, 2016

mold

 

 

 

Mold strikes fear into the hearts of those who’ve heard horror stories about toxic mold, expensive mold remediation, and denied home owners insurance claims. Yet mold can be found anywhere, including in most homes. It’s usually harmless.
Mold needs moisture to thrive. Problems can arise for home owners when the presence of persistent moisture goes undetected or unresolved, leading to widespread mold growth. Moisture can result from high indoor humidity, flooding, or a leaky roof or dishwasher.

Whether mold damage is covered by home owners insurance often comes down to the source of that moisture. Take an hour or two to review the language of your policy, especially as it pertains to water damage. Look for mold exclusions or limitations.

Mold and home owners insurance
Most basic home owners insurance policies exclude coverage of damage caused by mold, fungi, and bacteria, says Mark Ferguson, property claim specialist with General Casualty Insurance in Sun Prairie, Wis. Yet that doesn’t mean a mold claim will be denied automatically.

In most cases, if mold results from a sudden and accidental covered peril, such as a pipe bursting, the cost of remediation should be covered, says Ferguson. That’s because technically the pipe burst is the reason for the claim, not the mold itself. Claims are more likely to be rejected if mold is caused by neglected home maintenance: long-term exposure to humidity, or repeated water leaks and seepage.

It’s hard to put a precise dollar figure on mold damage because most insurers don’t separate mold claims from water-damage claims, says Claire Wilkinson of the Insurance Information Institute. About 22% of all home owners insurance claims result from “water damage and freezing,” a category that includes mold remediation, according to the III. A 2003 white paper on mold from the III put the cost of the average mold claim between $15,000 and $30,000, at least five times the average non-mold home owners claim at that time.

After a rush of mold claims in the early 2000s, most states adopted limitations on mold coverage. Amounts vary, but a typical home owners policy might cover between $1,000 and $10,000 in mold remediation and repair, says Celia Santana of Personal Risk Management Solutions in New York. Most policies won’t cover mold related to flood damage. For that, home owners need separate flood insurance, which averages $540 per year through the National Flood Insurance Program.

Is extra mold coverage necessary?
It might be possible to purchase a mold rider as an add-on to your existing home owners policy. Ask your agent. A rider will offer additional mold coverage. Cost and your personal risk-tolerance are the driving factors behind a decision.

Premiums will vary based on where you live and the value of your house. You could pay from $500 to $1,500 a year for a rider on an existing policy. Prices tend to climb in humid southern climates, and in Texas and California, where there have been high-profile mold cases.

In general, older homes in humid climates where mold thrives will be more costly to insure than newer constructions in a dry climate. In particular, homes built within the past five years are likely constructed with mold-resistant wood, drywall, and paints, says Santana. Newer homes are also less susceptible to water infiltration.

If your insurance carrier isn’t willing to provide a rider because the risk is too great, specialty companies such as Unitrin might sell you a standalone mold policy. Brace yourself for a hefty price tag. Annual premiums for a standalone mold policy might range from $5,000 to $25,000. Weigh the cost against risk factors including the age and value of your home, its construction, and the prevalence of mold issues in your area.

Moisture prevention is the key
The surest way to avoid having a claim denied is keeping mold at bay in the first place. Preventing mold and eliminating mold when it does occur are critical to protecting the value of your home.

To help prevent mold growth in your home, the III suggests taking the following steps:

  1. Lower indoor humidity with air conditioners, dehumidifiers, and exhaust fans.
  2. Inspect hoses and fittings on appliances, sinks, and toilets.
  3. Use household cleaners with mold-killing ingredients like bleach.
  4. Opt for paints and primers that contain mold inhibitors.
  5. Clean gutters to avoid overflow and check roof for leaks.
  6. Avoid carpet in wet areas like basements and bathrooms.
  7. Remove and dry carpet, padding, and upholstery within 48 hours of flooding.
Article From: CALIFORNIA ASSOCIATION OF REALTORS®

 

Consider me your resource for all things real estate!  Selling, buying, upsizing, downsizing, relocating, investing, vendor referrals, shoulder to cry on during renovations and more.  Just send me an email or call me at 619-888-2117. 

 

A Bucket of Information on Graywater

August 25, 2016

Graywater

 

 

What is Graywater?

Graywater is untreated wastewater that does not include any toilet discharge, unhealthy bodily wastes, or manufacturing wastes. It is wastewater from bathtubs, showers, bathroom washbasins, and clothes washing machines. Wastewater from kitchen sinks, dishwashers, and laundry of soiled diapers is not included.

How can I use Graywater?

Graywater can be used to irrigate landscaping and plants but not on root crops or edible parts of food crops. Irrigation lines can be either drip or leach systems and the discharge point must be covered by at least two (2) inches of mulch, rock, soil, or a solid shield to minimize the possibility of contact with humans and domestic pets. Be aware that some soaps and detergents can contain a variety of chemicals to aid in cleaning that may be harmful to your plants. Avoid soaps with chlorine or bleach, peroxygen, sodium perborate, sodium trypochorite, boron, borax, petroleum distillate, alkylbenze, “whiteners”, “softeners”, and enzymatic components. Please contact a reputable landscape specialist for more information.

What regulations should I know about?

On January 27, 2010, the State of California finalized the graywater regula ons for Chapter 16A “Nonpotable Water Reuse Systems” into the 2007 California Plumbing Code (CPC). The emergency graywater regulations were enacted to help residents of California conserve water by facilitating greater reuse of laundry, shower water, and similar sources for irrigation. In addition, by making legal compliance easy, the State hopes to reduce the number of non-compliant graywater systems. Your graywater system must comply with the 2007 CPC and other codes enacted by your local municipality or water purveyor.

All other gray water systems require a permit. A permit must be obtained from the building department of your local municipality. If you live in an unincorporated area of San Diego County, you must obtain your permit from the County of San Diego Department of Environmental Health (DEH) …read more.

Do I need a permit?

Not all graywater systems require a permit. Generally, clothes washer systems designed and operated to meet the following criteria do not require a permit, but you may need to notify the local jurisdiction on and/or your local water supplier. The following are system design requirements:

  1. Design will permit diversion of graywater to an alternative sewage disposal system.
  2. There are to be no connections between the graywater and potable water systems, and no pumping of the graywater will be permitted.
  3. The graywater will be contained on site, with no ponding or runoff.
  4. The graywater will be released under at least two (2) inches of mulch, rock, or soil, or a solid shield.
  5. Water used to wash diapers or infectious garments will be diverted to sewage disposal system.
  6. Graywater will not contain hazardous chemicals.
  7. The design will be consistent with the plumbing code.
  8. An operation and maintenance manual will be provided to the owner and all subsequent owners/tenants.
  9. All other gray water systems require a permit. A permit must be obtained from the building department of your local
    municipality. If you live in an unincorporated area of San Diego County, you must obtain your permit from the County of San
    Diego Department of Environmental Health (DEH).

Follow this link to get more information from the Graywater Fact Sheet by the San Diego County Water Authority

 

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Community Matters When Buying A Home

August 18, 2016

Consider me your resource for all things real estate!  Selling, buying, upsizing, downsizing, relocating, investing, vendor referrals, shoulder to cry on during renovations and more.  Just send me an email or call me at 619-888-2117. 

 

 

Community Matters When Buying a Home

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