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The American Dream

Carole Rodoni — Tue, 22 Nov 2011 20:11:10 +0000

Given the real estate situation over the past few years, many people might think that home ownership is no longer part of the American dream. In fact, nothing is further from the truth. A recent poll conducted by NAR and Harris Interactive proves that home ownership still remains a dream of most Americans, makes a positive difference in family relationships and finances, and adds to the notion of feeling connected to a community. Responders to the NAR-Harris poll, which were both homeowners and renters, cited financial security as the most important factor in home ownership (96% for home owners, 71% for renters). And, they are right.

Data from the Federal Reserve shows a very real disparity in wealth between homeowners and renters. In 2007, the median net worth of home owning families was $234,200 compared with $5,100 for non-home owning families. Before you dismiss the gap as a product of the housing boom, the difference in the late 90s was $168,200 to $5,400.
When you compare median net worth to median earning, homeowners come out ahead again. The net worth of homeowners is about 2 to 3 times their before-tax income while the net worth of renters is only 20 to 25% of their before-tax income.
Home ownership tends to be a slow wealth builder. In many ways, it acts more like a savings account than an investment. Each mortgage payment is like making a savings deposit.

There are benefits to society as well for home ownership. Homeowners typically feel better connected to their community because they live in their homes longer, are more likely to know their neighbors, and participate in community activities.

For a long time, America has been defined as the place where you can live the dream and homeownership is still very much a part of that dream.

New Home Mortgage Rules that May Hurt Not Help the Housing Market

Carole Rodoni — Tue, 08 Nov 2011 19:55:59 +0000

You may have seen reports that the federal government is proposing new mortgage finance rules under which only home purchasers who can afford a minimum 20% down payment on a conventional loanwould get a shot at the best interest rates and terms. It’s true and here are the new guidelines:

Strict mandatory debt-to-income limits. Under the proposal, to get the best mortgage rates, you would need to spend no more than 28% of your gross monthly income on housing-related expenses, and you couldn’t have a total monthly household debt that exceeds 36% of your income.

There would be no flexibility to go beyond these ceilings, unlike in today’s marketplace in which Fannie Mae and Freddie Mac consider debt-to-income ratios along with other factors through their electronic underwriting systems. At the moment, Freddie Mac has an overall debt ratio limit of 45% of an applicant’s stable monthly income.

To refinance your existing mortgage and replace it with one carrying the best interest rate, you’d need no less than a 25% equity stake in your house to qualify. If you sought to take any additional cash through a refinance, you would need 30% equity. Today’s requirements are usually not as strict.

Pristine credit standards. For example, if you were 60 days late on any credit account during the previous 24 months, you would be ineligible for a mortgage at the best terms.

These proposals were released at the end of March by banking, securities, and housing regulators, along with the Department of Housing and Urban Development. The agencies were required by the 2010 financial reform legislation to come up with new standards for low-risk conventional mortgages.

Under the law, loans that do not meet these strict tests will be pushed into a less-favored, higher-cost category. Banks would need to set aside 5% of loan balances in reserves to cover possible losses from defaults. This extra capital cost would inevitably be passed on to consumers.

Financing Smart Home Improvements

Michael Haigh — Fri, 04 Nov 2011 18:55:33 +0000

You’ve found a great home, but it’s a bit rough around the edges and you’re on a limited budget. That leads to a number of questions: How much will the necessary upgrades and repairs cost? How much value will they add to the home? How are you going to pay for all this?

Whether you are upgrading to a larger home in a neighborhood you’ve always loved, downsizing to a smaller home now that the kids are out of the house or even moving to a new state, don’t let a house that you love get away just because it needs some repairs or updates — you do have options!

203(k) Loans
A 203(k) loan lets a qualified borrower not only finance the purchase price of the home, but also include the price of the necessary repairs to the home.

Many types of properties qualify for 203(k) loans. Approved improvements include painting, room additions, decks, bathroom and kitchen remodels, finished attics and basements, structural changes and repairs, environmental rehab such as removing lead paint or making energy efficiency upgrades, roofing, flooring or accessibility upgrades for disabled residents.

It’s important to note that there are two different types of 203(k) loans available and you’ll need to determine, along with your lending professional, which type of loan is right for your particular situation. I’d be happy to spend some time with you to review and determine what might best meet your needs. Here’s a quick overview of the available 203(k) options:

A “streamlined” 203(k) loan is intended for a home that requires only non-structural repairs like cosmetic upgrades (painting, new carpet and appliances, new roof). In addition to the price of the home, you can borrow up to $35,000 to cover improvements.

A “regular” 203(k) loan is for properties that require structural repair, such as room additions, or major landscape work or site improvement. You can borrow the purchase price of the home, plus the price of the improvements, up to 110 percent of the home’s expected value after the improvements.

Once you’ve understood your loan options you’ll also want to examine the specific types of upgrades or repairs you’d like to make to your new home.

Eligible Upgrades and Repairs that Make Sense
Whether you plan to be in your new home for a short or long period of time, you’ll always want to be mindful about how much your improvements will cost and what type of value they will add to your home.

A good place to review this data is in Remodeling magazine’s annual “Cost vs. Value” report. The report is considered a sort of gold standard for the return on investment for various home improvements. This can also serve as an excellent guide towards helping you understand the costs of certain types of upgrades and repairs. The data is available for free on the magazine’s site (www.remodeling.hw.net/2010/costvsvalue/national.aspx), and can be broken down by region and even city. It even provides drill-down information on various improvements, including pictures.

Here’s a look at some of the top remodeling projects you may want to consider that are eligible under 203(k) loans.

Minor kitchen remodel.
If your new home doesn’t have your dream kitchen, this may be a smart choice for an upgrade. While kitchen upgrade costs can be high, Remodeling magazine estimates replacing the cabinet door fronts; adding new hardware; getting a new range; swapping out the counters; laying new flooring; installing a new sink; and painting a dated, 200-square-foot kitchen can bring a 72.8 percent return on investment.

Attic bedroom.
Does your new home lack that extra bedroom you desire? You may want to consider converting your attic space into an extra bed and bath. This will not only provide you with more living space but converting an attic to a 15×15 bedroom with a 5×7 bathroom will bring on average a 72.2 percent return on your investment, according to Remodeling magazine.

Basement remodel.
Finishing a 20×30 basement area into a bonus room with a bathroom and a wet bar can provide you with a great deal more space in your new home and can also add a good deal of value to it.

Another key trend to keep in mind, presented in Remodeling’s latest national data, is that upgrades on the outside of the home offer some of the best value of all home repairs and upgrades. These include:

Steel entry-door replacements.
Swapping out a drafty wood door and jambs for a 20-gauge steel door is the No. 1 replacement in the country.

Replacing the garage door. This improvement takes the No. 2 spot.

Wooden or composite deck additions. In addition to adding ambience to your home, decks can also add to the value of it. For instance, Remodeling magazine data shows that adding a wooden deck with an anchored, 16×20 deck using pressure-treated wood with railings and stairs delivers a 72.8 percent return on your investment.

There are a wide variety of upgrades and repairs permitted under the 203(k) loan programs, so be sure to examine all of your options and determine what makes the most sense for your new home.

Getting Started
Once you’ve determined the upgrades and repairs you’d like to pursue, be sure you speak with an experienced 203(k) lender that is well-versed in the details of permitted improvements under the program. It is also important to note that FHA rehab loans may take longer to close with a lender that doesn’t have experience with them, because there is more paperwork. Working with a lending professional that is experienced with 203(k) loans will help you avoid those delays.

© 2011 W.J. Bradley Mortgage Capital Corp., 201 Columbine Street Suite 300, Denver, CO 80206. Phone #303-825-5670. NMLS ID 3233. Trade/service marks are the property of W.J. Bradley Mortgage Capital Corp. This is not a commitment to lend. Restrictions apply. All rights reserved. Some products may not be available in all states. WJB is not acting on behalf of or at the direction of HUD/FHA or the federal government.

AZ License # BK-0903998; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act RML# 4131002; To check the license status of your CO Mortgage Broker, visit www.dora.state.co.us/real-estate/index.htm; Florida Mortgage Lender license #MLD285; ID Mortgage Broker License No. MBL-2803; IL Residential Mortgage Licensee – License #MB.6760738, 201 Columbine Street, Suite 300, Denver, CO 80206; MN Residential Mortgage Originator License No. 20447094; NV Mortgage Banker License No. 2061; NV Mortgage Broker License No. 504; NM Mortgage Loan Company and Loan Broker Act Reg. No. 01856; OK Mortgage Broker- License No. MB001365; OR Mortgage Lender License No. ML-776; TX Mortgage Banker Reg. No. 74182; UT Mortgage Lender Company License No. 5495659-NMLC; Vermont Broker License #0995MB; Vermont Lender License #6141; WA Consumer Loan License No. CL-3233; Wisconsin Mortgage Banker License No. 699991. NMLS consumer access: www.nmlsconsumeraccess.org/EntityDetails.aspx/COMPANY/3233.

Happy Halloween!

Michael Haigh — Fri, 28 Oct 2011 17:00:37 +0000

As a reminder, I’m always here if you or your friends and family need any home financing advice. My clients are important to me and I’m happy to help anyone you know that might need advice in any way I can.

Michael Haigh

Retail Sales Branch Manager

W.J. Bradley Mortgage Capital Corp.

Office: 650.204.3311

Cell: 415.269.4461

Fax: 877.754.5250

NMLS: 200819

Contact Me

My Website

How to Save $67,960 in this Economy

Carole Rodoni — Mon, 17 Oct 2011 21:07:16 +0000

When Standard and Poor’s downgraded the US Debt rating, everyone thought interest rates would go

up. So far, however, the opposite is true. In fact, rates are the lowest they have been in 50 years. At the

same time, CDs are generating almost no return, the stock market is up and down like a yo-yo, and the

10-year T-Bill as at 2%. So, what works in this scary economy we are experiencing, especially given

slower growth and higher unemployment?

The answer lies with real estate. It’s affordable again, the rates are low so money is cheap, and with

real inflation coming in at 3.5%, if you hold on to it for 5 years it should appreciate. For example, in

yesterday’s world, a $450,000.00 borrower with a 5% 30-year fixed loan would pay $2,416 a month or

$419,652.00 in interest over the life of the loan. Fast forward to today. With a rate of 4.3%, the monthly

payment is $2,227.00 with a payment of $351,692.00 in interest over the life of the loan. You enjoy

$67,960 in savings.

So, while some suggest waiting to buy real estate, you should buy real estate now and then wait. When

rates do start to move up, and they will, you don’t want to look back and say “I wish, I should have, and

why didn’t I.”

Don’t Wait to Leverage Your Purchasing Power

Michael Haigh — Fri, 14 Oct 2011 21:05:28 +0000

Did you know that your real estate purchasing power is at an all-time high? Whether you look at interest rates or the prices of homes or the overall affordability of today’s real estate, there may be no better time than now to make any real estate purchases you might have been considering.

Make no mistake, whether you are looking at trading up, purchasing an investment property or even moving into a new home, there are multiple compelling reasons to take action — and they won’t last forever. Let’s take a look at the cards stacked in your favor:

Interest Rates
Today’s interest rates are astonishingly low. Rates for 30-year fixed loans have been bouncing around between 4 and 5 percent over the last several months. This is significantly lower than the historic average. The average rate for 30-year fixed-rate loans over the last four decades has been 8.9 percent.

When rates are nearly half their typical average, you can rest assured that historic window of opportunity won’t stay open forever. In fact, it might be closing even now. Freddie Mac predicted earlier this year that the rate on 30-year fixed loans would reach 5.5 percent by the fourth quarter and average out at 5.8 percent during 2012.

Every quarter of a percent — even an eighth of a percent — will significantly downgrade your purchasing power. In fact, if you want to see the difference between what you could afford at today’s rates versus Freddie Mac’s projected increases, or the historic average, I would enjoy meeting with you to review some scenarios and show you the comparisons. I think you’ll find the results very eye-opening.

Of course, qualifying for loans might be tougher, but as long as long as your financials are sound and you are seeking a loan that is the right size for your income and down payment, home financing is extremely affordable and obtainable. And, again, even if rates were to increase to meet Freddie Mac’s projection, for example, your purchasing power would still be in amazing shape given the historic average.

Housing Prices
Not only are rates at historic lows, but housing prices are down. While home prices aren’t at the depths they were in April 2009 after the housing bubble burst, they are still very low, thanks to a glut of homes on the market.

According to the most recent S&P/Case-Shiller composite index of 20 metropolitan areas’ housing prices, prices for all U.S. single-family homes (new and existing) finally rose slightly in April after eight straight monthly drops, which could indicate that a new trend of rising home prices is beginning to take off. However, that rise only puts average home prices across the United States back to the levels of the summer of 2003, prior to the housing bubble’s dramatic takeoff in prices. So while home process are still incredibly low, they may not remain that way for much longer.

Overall Affordability
So when we put together interest rates and housing prices and compare them to average American incomes, what do we get? A historic era in terms of the overall affordability of real estate. Nationwide, the affordability of housing during the fourth quarter of 2010 hit its highest level in the 20 years that the National Association of Home Builders and Wells Fargo have been tracking it in their joint Housing Opportunity Index (HOI).

Specifically, the record-setting index reported that 73.9 percent of all new and existing homes sold in the last quarter of 2010 were affordable to households earning the national median income of $64,400. Until 2009, the HOI rarely topped 65 percent and never reached 70 percent.

This marks the eighth quarter in a row in which the Index surpassed 70 percent, where prior to 2009 the Index rarely exceeded 65 percent. The economy might be seeing tough times, but where affordability is concerned this is a golden era for homebuyers that most likely will not come along again in our lifetimes.

It’s Time to Make Your Move
At the height of the housing boom, smart sellers knew when it was time to sell and make the most of their investments. Well, now we are at the opposite end of the spectrum and smart buyers are taking notice. Affordability is at a remarkable high; essentially we are at pre-bubble home prices but with post-bubble lending rates. Your purchasing power has never been better.

If you are investigating how you can capitalize on these market conditions before they change, I would love to sit down with you and assess your buying capabilities and how you can leverage them. Please don’t hesitate to contact me and let’s see how we can harness your true purchasing power.

Let me show you how much home you can afford now.
Let’s look at your options today.

How is the housing market in San Bruno these days?

John Gieseker — Fri, 12 Aug 2011 22:51:52 +0000

The housing market in San Bruno is recovering in the same manner as the rest of the peninsula, thankfully! It’s still strong for selling homes that are in good condition with competitive prices. There are also still homes that need some cosmetic upgrades, if you’re looking for a mild fixer upper!

Essentially these homes have become “stale” on the market due to faulty marketing techniques which gives a buyer the opportunity to find some really attractive deals! It helps when you work with a local agent who knows the area and inventory and is willing to dig a little to find these deals!

How To Clean Outdoor Furniture : Resin, Wood And Metal

Michael Haigh — Mon, 20 Jun 2011 12:52:48 +0000

This week marks the official start of Summer. If your home’s outdoor area has furniture in it, you’ll want to make sure that your furniture is clean.

In this 4-minute video from Lowe’s, you’ll learn tricks to keep your outdoor furniture clean, and protected from the elements. All types of outdoor furniture are covered in the lesson including metal, resin-based, and wooden.

The offered tips include:

Why you should never remove the “care tags” from a furniture pillow
Choosing the proper pressure-washer tip for the job at-hand
How to use car wax as a rust-preventative

Furthermore, the instructional video includes tips for cleaning fabrics and canopies; and for shampooing an outdoor rug.

There’s lot of reasons to keep your outdoor furniture clean — health reasons among them — but it shouldn’t be lost that clean furniture will have a longer useful life than furniture that’s been neglected or ignored.

Clean your outdoor pieces at least twice annually and they’ll give you years of good looks and comfort.

How can I improve my credit score?

Michael Haigh — Mon, 18 Apr 2011 20:40:22 +0000

In addition to not paying your bills on time, there are other factors that can lower your credit score. If you are at or very near your credit limit on your credit card(s), or if you have multiple revolving credit accounts (like department store or gas credit accounts), your credit can suffer.

Creditors also look at your employment record to see if you’ve switched jobs frequently or if you’ve maintained steady employment. These days, many people have late mortgage payments, a short sale or a foreclosure weighing down their credit score. If you have any of those issues to contend with, it doesn’t automatically mean you can’t apply for a loan; call me and we’ll discuss what I can do for you.

Although there are no quick fixes when it comes to improving your credit score, you can take steps to rebuild your score over time:

Continue paying your bills on time — your payment history matters.
Don’t max out your cards or even run the balances up high.
Hold off on applying for new credit or cancelling an old card, since length of credit helps.
Pay down high balances, but don’t just transfer debts among several lenders.
Settle any collections or past due accounts that you possibly can.
Dispute and resolve any inaccurate items in your credit report. The last two years of your credit history are the most important.

* W.J. Bradley is not a credit counseling or financial advisement firm and this information is for educational purposes only and is not to be taken as guidelines or guarantees to improve your credit or financial situation or eligibility to secure a home loan.

We’ve been Accredited by the Better Business Bureau!

Michael Haigh — Thu, 14 Apr 2011 17:54:55 +0000

The Michael Haigh Team at W.J. Bradley is proud to announce that it has been awarded the honorable recognition of being an “Accredited Business” by the Better Business Bureau of California! This is very exciting, as BBB accreditation is a coveted honor earned only by elite businesses that adhere to the highest standards of fair and honest behavior.

In order to become an accredited business, The Michael Haigh Team had to meet all of the BBB’s high standards, pass their review process, and get approved by the BBB’s Board of Directors. Very few mortgage lenders in the area have achieved this recognition.

As with all business accredited by the BBB, The Michael Haigh Team at W.J. Bradley has committed to meet and abide by the BBB Code of Business Practices. The Code represents sound advertising, selling and customer service practices that enhance customer trust and confidence in business. The Code is built on the BBB Standards for Trust, eight principles that summarize important elements of creating and maintaining trust in business.

Being accredited by the BBB means that you can trust us to: Tell the whole truth—our policies are clear, with no hidden exceptions or fees; Keep our promises—whether a written contract or a verbal agreement, commitments are kept; and to be responsive—resolve any concerns in a timely manner.

“We are proud to be accredited by the Better Business Bureau,” says Michael Haigh. “It’s important to me that my clients and partners know how seriously we take our commitment to excellence. We strive to be the best and brightest in the mortgage lending world, while developing and maintaining personal relationships. Being accredited by the BBB helps clearly illustrate this, on an extremely high level.”

For more information give us a call at 650.204.3311 or email Mike at Michael.Haigh@wjbradley.com.

If you would like more information on the Better Business Bureau, you can visit their website located at www.bbb.org.

Thank you all for your continued support!