Mortgage Rates Continue Downward Spiral!!!

What does that mean to you? If you have been thinking about purchasing, remodeling, a family vacation, or even paying for college tuition, now could be a great time to refi. Even if you don't have big plans, a refi to a lower interest rate will put more money in your pocket each and every month by lowering your monthly mortgage payments. Now may be the best time to buy that new home you have been thinking about!Don't miss out give Centerpointe Mortgage a call today at 241-3080 to get pre-approved. Mention Carmen Lonardo at Canal Walk Realtors and get a FREE list of homes for sale in your price range and a FREE Home Buyer consultation when your mortgage is pre-approved.

Rates are Down ... Time to Buy?

Great news! Mortgage rates took a plunge last week! But, lending criteria are still tight. If you are ready to buy a new home now is the time to jump in the market. Rates are low and list prices remain very affordable. But, line up your financing first because there is nothing worse than falling in love with that perfect home then finding out you cannot get it financed!

Need help with the financing? Give me a call at 585-233-4119 or email me at carmenlonardo@canalwalkrealtors.com and I will be glad to recommend a few lending resources my clients have used successfully over the past few months.

Lease-to-Own

Lease – to – Buy, better known as “Rent to Own”, is gaining in popularity these days among both buyers and sellers of real estate. A Lease – to – Buy contract allows a renter to lease a property and at the end of the lease gives them the option to buy it. Typically, a nonrefundable option fee is paid when the contract is signed which may be applied to the purchase price when the option is exercised. And, a portion of the monthly rent may also be applied to the purchase price or towards the buyer’s down payment. In today’s tight lending environment a potential buyer with some credit issues may benefit from this type of arrangement while he takes steps to remedy his creditworthiness. A seller benefits by being able to get immediate cash flow on their property and a contract to sell at a later date.

There are other benefits for both buyers and sellers and, as with almost anything, several issues to watch out for. Never sign any contract without a review and consultation with your attorney.

Is Rent to Own a viable option for you? Give me a call and let’s find out!

How To Use Seller Financing to Your Advantage

Seller financing is preferable to conventional financing because it allows you and the seller to negotiate the terms.
With this type of financing you don't have to be bound to strict underwriting guidelines and regulations as you commonly are with traditional loans originated through a bank or mortgage company.
You will generally still be required to give the seller a down payment, make monthly installments on the loan and have to pay interest; but it can be a good way to avoid conventional guidelines, especially if you have credit problems.
It can also save you a few bucks because you won't be required to pay a loan origination fee and you won't be subject to an appraisal and inspection as you would with conventional financing.
Seller financing can work a couple of different ways. With both strategies you're going to negotiate a final sales price with the homeowner and then agree upon a monthly payment for a specified time frame.
The difference is really in how the first mortgage is handled if there is one. If there isn't, you simply make the payments to the homeowner and if you default they take back the property.
When there is a first mortgage in existence, one option is to purchase the property through a second mortgage. In this situation you agree to pay a specified monthly amount to the homeowner in addition to making the payments on the first mortgage as well.
Should you default on either one of the payments, the home will be taken by the entity you failed to pay.
Another way to handle seller financing is with a wrap around or deed of trust. The only difference with this scenario is that instead of you making the payments on the first mortgage, the seller will continue to make the payments out of the funds you give him or her each month for your payment.
The problem that can occur with a wrap around mortgage, however; is it the homeowner fails to make the payments on the first mortgage. If that should happen the lender will take back the property and both you and the homeowner will be out of luck. It won't matter that you've made every one of your payments to the homeowner on time because the first mortgage took priority over the wraparound mortgage.
In order to avoid taking this risk, you can request a clause in the wraparound mortgage stating that should the homeowner default on the first mortgage; you reserve the right to make payments and thereby avoid foreclosure.
==================================Sal Vannutini is the author of Fixer-Upper Fortunes: How to make big profits from fixer upper properties. New real estate home study manual reveals how you can safely make a fortune fixing up old homes and quit your job forever.Click here now: http://www.fastfixerupperprofits.com
Sal is also the creator of "Foreclosure Wizard". He has created the ultimate foreclosure investment tool. It provides a unique step-by-step process that will help you quickly and easily determine which deals have profit potential and which ones are a waste of your time.Click here now: http://www.foreclosurewizard.com

Who Should We Believe?

It has been a frustrating week with all of the meddling going on with the financial markets. I keep hearing and reading that the "fix" is needed or we will be in even worse shape soon. I also keep hearing and reading that all of this could have been avoided - some claiming that the mistakes happened way back when our country was mending itself out of the "Great Depression". What I see is a lot of finger pointing and the stark reality that whatever gets done or doesn't get done to address whatever problem we are having or not having ... You, your neighbor and I will get stuck with the bill, one way or another. Not sure why I'm paying for a mess I didn't create?

On a positive note, there has been some positive activity in the local real estate market over the past couple of months. I have two listings pending and soon to close and lots of interest on the 6 family in Palmyra and the mixed-use building on Culver Road in the City. I think its going to be a very productive fourth quarter!

Green Homes Attractive to Buyers

(ARA) - Home buyers of all income levels are looking for environmentally friendly properties, according to a study taken by the U.S. Green Building Council and McGraw-Hill Construction. And in the difficult housing market of today, sellers are looking for new ways to attract buyers. Making a home greener with cleaner air quality may just be the answer to getting bids. Homeowners can use the following tips to make their house more environmentally friendly: * Buy appliances that use less water and electricity. Many companies sell appliances like washing machines and dishwashers which use 10 to 15 percent less energy and water than standard models. Not only are the appliances using less, but they save money when it comes to the electric and water bills. * Use environmentally friendly flooring. A wood floor produced without VOCs (volatile organic compounds) keeps the air clean in the house. Globus Cork offers cork flooring in 37 different colors which not only helps to maintain a constant air temperature in the room thanks to its natural thermal insulation properties, but also is a renewable resource. This is because only the cork bark is trimmed from the tree and the cork oak trees continue living. In addition, cork has a waxy substance called suberin, which repels bugs, mold, mites and even termites, keeping allergens at bay. Go to www.CorkFloor.com to learn more about the product. * Change heavily used lights with energy-efficient models. According to the U.S. Department of Energy ENERGY STAR program, if every American home replaced its five most frequently-used light fixtures – such as the kitchen ceiling lamps, outdoor post lamp or the living room table lamps – with fixtures that have earned the ENERGY STAR, almost $8 billion would be saved each year in energy costs and greenhouse gasses reduced at the rate of almost 10 million cars. * Keep inside air from escaping. Seals around windows and doors can break or be damaged over time and need to be replaced. Homebuyers shopping for a new property tend to check the house’s summer and winter energy bills, and a properly sealed home can change those bill amounts significantly to make a house more attractive. According to the Green Building Council study, 70 percent of home buyers are more inclined to purchase a green home than a conventional home during a down housing market, and half of the homes renovated between 2005 and 2007 used products chosen for their green qualities. With just a few changes or upgrades, a house that has been sitting on the market for some time can become a quick sell thanks to its environmentally friendly features. Courtesy of ARAcontent

Add A WOW Effect to Sell Your House!

(ARA) - Whether you're selling your home or planning to live there for years to come, you can add interest and value using architectural elements. Customizing your kitchen, bath or master bedroom using architectural elements is a simple way to set your home apart and increase the "wow factor" of those rooms that real estate agents say sell houses. Kitchens * Add decorative corbels (an architectural support bracket), panel and crown mouldings to stock cabinets to create a high-end, customized appearance. * Add a ceiling medallion above the breakfast bar or table to enhance a light fixture and create a focal point. Baths * Switch out the simple wood trim around doors for elegant casings and add a chair rail at mid-wall height. * Add a decorative shelf or mantel for display of art, plants or your favorite fragrance bottles. Master Bedrooms * Trimming the bedroom with crown moulding shows attention to detail and complements rooms of any style. * Add a niche to your wall for dramatic display space. Highlight special photos, keepsakes or a piece of art. Adding architectural elements to customize the spaces in your home doesn't have to be difficult or expensive. Companies such as Focal Point use a light-weight, closed-cell polyurethane that won't rot or mildew to create detailed mouldings and decorations. The pieces look like plaster and wood, but offer a cost-effective and time-saving alternative to traditional materials. For more information or design inspiration, visit www.FocalPointProducts.com or call (800) 662-5550 to find a dealer near you.

First Time Homebuyer Tax Credit

Congress and President Bush recently passed the Homebuyer Tax Credit which allows first time homebuyers a credit on their income tax return of up to $7500 towards the purchase of a home. This could be a significant benefit for first time buyers because it would reduce their tax liability this year by up to $7500 - if they owed tax on $10,000 the credit would reduce their tax liability to $2500. Hopefully we can help buyers take advantage of this new opportunity!

Fed Cuts Do Not Mean Mortgage Rates Will Also Drop

The Fed cut rates several times this year but it doesn't seem like mortgage rates experienced the same drop. This is a source of confusion for many of us but the answer is simple. The Fed cut the funds rate and the discount rate which are the rates charged when banks borrow short term money from other "banks". These are not mortgage rates. Mortgage rates are based on mortgage backed securities - essentially the investment market performance of bonds issued by Freddie Mac and Fannie Mae. If we are buying bonds as an investment for the long term we do not want inflation to degrade the fixed rate of return they provide. So, in an inflationary period, bonds will be less desireable and therefore carry a higher rate which will translate into higher mortgage rates.

Of course, sometimes mortgage rates are based on other indexes but generally speaking the vast majority of mortgage rates are based on Freddie and Fannie bonds.

Bugs Around The House

As bug infestations tend to peak this time of year in most areas, now is a good time to familiarize yourself with some of the critters that can cause damage to you and/or your home. Hopefully, you will have no more than a casual encounter with a few of these pests. While most homeowners understand that termites can cause serious structural damage, here is a brief primer on some other common insects found around homes. Homeowners can deal with some of these insects, however, the HouseMaster Technical Staff recommends contacting a professional exterminating company in the case of a termite infestation or a serious infestation by any other insects.

CARPENTER BEES
Characteristics: Broad head; metallic blue/black with yellow or white hairs; ¾” – 1” (18-25 mm) in length. Location: Dry wood on the outside of homes, barns, fences; twigs or tree limbs.Diet: Plant nectar.Damage: Cuts ¼” – ½” tunnel at a 90° angle to the entry hole; usually in exterior trim pieces; can cause extensive damage if recurring.Comments: Prefers to nest in unpainted/untreated soft wood, such as pine, cedar and redwood.
CAVE CRICKETS
Characteristics: Straw-color with 3 dark bands on the head; ¾” body length (18 mm). Location: In warm, dark places in homes, trash dumps in warm weather. Diet: Plants and other organic matter, including cloth. Damage: They can make an annoying noise; presence usually indicates moisture concerns. Comments: Infestations can include a large number of insects, particularly in suburban areas. BROWN RECLUSE SPIDER
Characteristics: Brown with violin shaped marking on back; 3/8” (10 mm). Leg span 1 to 1½” (25-35 mm). Has three eyes. Location: Lives in cracks and crevices and other dark areas; spins fine cotton-like webs near its shelter. Diet: Insects. Damage: Poisonous; can cause skin damage around bite and serious secondary infections. Comments: If a brown recluse bite is suspected, or any reactions occur from a bite by an unknown insect, see a doctor immediately.
CARPENTER ANTS
Characteristics: Variable but typically black or reddish/black; ¼” – ½” (6-12 mm) in length. Location: Trees, stumps, logs, houses. Diet: Insects, meat, sweets, fruit, eggs. Damage: Can cause structural damage. Excavations in wood; tends to be localized but can be extensive if untreated. Comments: Needs moisture, migratory; will drop onto houses from overhanging trees.
SCORPIONS
Characteristics: Brown, gray, black or yellow; ½” – 2½” (12-60 mm). Location: Under rocks, trash, crawl spaces, attics. Diet: Soft-bodied insects. Damage: Will sting humans if provoked; can be very poisonous. Comments: All stings should be treated by a doctor immediately. Generally found across the southern United States.
BLACK WIDOW SPIDER
Characteristics: Black with red hourglass on underside of abdomen or back; ½” body length (12 mm). Location: Seldom found in homes; more common in wood piles, porches, outhouses. Diet: Insects. Damage: May bite humans; can be very dangerous. Comments: If bitten, see a doctor immediately.
Remember, these tips are only general guidelines. Since each situation is different, contact a professional if you have questions about a specific issue. More home safety and maintenance information is available online at www.housemaster.com.

Copyright © HMA Franchise Systems, Inc.

Reprinted from the Housemaster eNewsletter July 2008

How Much of a Mortgage Can I Afford?

Not only does owning a home give you a haven for yourself and your family, it also makes great financial sense because of the tax benefits — which you can’t take advantage of when paying rent.The following calculation assumes a 28 percent income tax bracket. If your bracket is higher, your savings will be, too. Based on your current rent, use this calculation to figure out how much mortgage you can afford.

Rent: _________________________
Multiplier: x 1.32
Mortgage payment: _________________________

Because of tax deductions, you can make a mortgage payment — including taxes and insurance — that is approximately one-third larger than your current rent payment and end up with the same amount of income.For more help, use Fannie Mae’s online mortgage calculators.

Reprinted From Realtor Magazine Online July 2008 with permission from the National Association of Realtors. Copyright 2008. All Rights Reserved.

Do You Know Someone Who Rents?

Here are some facts they won’t get from their landlord:

• It’s a Buyer’s Market
• Homes are Priced Competitively
• Mortgage Rates are Affordable
• Their Rent Pays the Landlord’s Mortgage

That last one is a biggie! Paying rent is like throwing away money because there is no residual economic benefit from the expense. Instead, the same renter, affording their own home, would be making an investment in their long term net worth.
The economic benefits of homeownership are tremendous! Tell your renter friends and relatives to contact me today to learn how to unlock their door to personal wealth through homeownership!

Real Estate as a Retirement Tool

4 Ways to Make Money on Real Estate Investments Many real estate professionals use their experience in buying and selling properties to finance a comfortable retirement. "As real estate professionals, we're uniquely qualified to implement various investment strategies and to see opportunities that many people are never exposed to. Those who don't participate are missing a golden opportunity," says Dan Bohlke of Bell-Key Properties Inc. in Hampton, Va. Consider these real estate investment strategies.1. Buy and hold for rental income. For the last 14 years, Bohlke and his business partner-wife, Karen, have been systematically buying well-located single-family homes at or slightly below the current median sale price for their area—from $80,000 to $120,000. Most are acquired by assuming existing mortgages of former owners or through owner financing. Once the properties are paid off, they generate about a 7.5 percent to 8 percent annual rate of return. That means a $100,000 house that is paid for should produce about $7,500 to $8,000 a year in spendable cash flow after paying real estate taxes, insurance, maintenance, management, and other fees. "You need just $1 million in paid-for real estate—or 10 homes costing $100,000 each—to produce a real retirement income of $75,000 to $80,000 per year," Bohlke explains. "It self-adjusts upward with inflation, so you won’t be living on a fixed income. And as the properties increase in value, so does your net worth.”TIP: Buy properties near each other; it’ll make management easier.TIP: Using a professional property management company to manage your investments creates a liability barrier between you and your clients because the property manager handles all day-to-day operations and assumes a portion of the risks from issues such as lead-paint disclosure and fair housing practices. —Daniel Bohlke, Bell-Key Properties Inc., Hampton, Va.2. Buy, hold, and eventually sell. Another strategy used by Dan Bohlke is what he calls “the real estate garden concept." Periodic, sequential investing involves acquiring properties at the rate of one or two per year and then systematically reselling them after 12 to 15 years. "The soil is your local real estate market, the seeds are the properties you acquire, and the fruit is rental and sale proceeds," he explains. "When your crop matures after 12 to 15 years, you can start selling the properties each year in the order of their purchase, using a portion of the proceeds of each sale to reseed your garden (acquire more properties) and using the remainder to live on in retirement." With this approach, two properties acquired per year and sold after 15 years should produce a perpetual income stream of more than $100,000 a year, even after setting aside enough money to continue acquiring two properties per year. Another choice is to sell off half the properties you've acquired over the years and use the sale proceeds to pay off the other half. This would create a cash flow from the remaining paid-for properties as in the buy-and-hold strategy above.3. Buy and resell. Real estate professionals often have the advantage of recognizing changing markets or houses with untapped potential and are able to capitalize by buying low and selling high. Eric Goosen, Goosen Realty Services, St. Clair Shores, Mich., buys two-to-four-unit rental buildings. Because he lives at each property, Goosen’s often able to put only 10 percent down, as opposed to 40 percent or more for investment property. Often he holds the property for two years, so he can take advantage of the $250,000 capital gains exemption on the sale of a personal residence to avoid a portion of the taxes on the sale. Goosen also renovates the properties to increase their value. TIP: Institute a guaranteed sales program to buy the homes that don't sell by the end of the listing period at your company; it can create a ready made pipeline for new real estate investments. —Bill Watson, Watson Realty Corp., Jacksonville, Fla. TIP: Don’t take advantage of a buyer’s plight and buy a home at an unfair price. It will damage your business reputation in the community. 4. Build and sell. Developing properties isn’t for everyone, but your market knowledge often helps you identify up-and-coming areas where in-fill development is justified. In New Orleans, Bill and GiGi Burk of Burk Realty use a computer-based analysis program he developed to determine the highest cost-per-square-foot price the market will bear. He then compares that cost to the actual estimates for buying land and completing construction and determines if he can sell the property for a high enough return (15 percent to 25 percent or more) to justify the risk. Equally tough is paperwork and patience needed to obtain permits and local zoning approvals. Downtimes in the market are a great time to execute a develop-and-sell strategy, says Bill Burk. “We’ll be ready when the market comes back.”TIP: You can use pre-tax retirement dollars to investment in real estate through a “self-directed” IRA. All income and expenses from the property are paid for by the IRA, but you can make buy and sell decisions with the approval of the account’s custodian.

Reprinted from Realtor Magazine Online (April 2008) with permission of the National Association of Realtors. Copyright 2008. All rights reserved.

Did You Know it's a Buyer's Market Out There?

Unfortunately we keep getting inundated with negative news about the housing market. There is no question that in some areas of the country the market is bad. Home loans made to borrower’s who could not afford them in the long run coupled by depreciation in value are fueling the vast majority of the problems. But not in our area! The Rochester area has been fairly insulated from this mess.
In Rochester, I think, our housing market problems continue to be a result of the media reports which have made both buyers and potential sellers extremely skittish. But, out of this adversity comes an incredible opportunity, first for buyer’s and then for sellers.
What I have been noticing lately is the affordability of the existing inventory and the value that can be found in every corner of the community. When a buyer joins this affordability with low mortgage interest rates, opportunity abounds!
The Rochester real estate market provides buying opportunities for both owner-occupants and investors. If you are thinking about buying a first home or a new home, NOW is the time to buy! If you want to increase your investment holdings, NOW is the time to buy!
Contact me today so that I can help you take advantage of the Rochester Buyer’s Market Today!

Wealth Effects of Homeownership

A recent survey showed three out of four homeowners said their home represents a large portion of wealth, and many use the value of their homes when making important financial decisions.

The buildup of home equity provides Americans with both financial resources and security. Homeowners use their home equity to get cash for emergencies as well as the purchase of big-ticket items. In addition, the capital gains people realize from the sale of their home are a significant source of downpayment funds for most repeat buyers, but are used for other purposes as well.

For owners who clearly understand the value of the wealth in their homes as opposed to the value of their stocks, bonds and pension plans, the survey found that three out of four home owners say their house wealth is greater than their stock wealth. Given the stable growth in home values over time, especially when compared with other kinds of investments, it gives people the confidence to use that equity for various needs.

Given the increasing volatility in the stock market over the last few years, this underscores the importance of homeownership as the primary nest egg for most Americans.

Nearly two out of five repeat home buyers chose a more expensive home to further improve their standard of living and increase their potential for building even greater household wealth in the future.

30-Year Mortgage Rates Fall to 4-Year Low

Daily Real Estate News January 25, 2008
Housing industry observers are hopeful that the recent decline in mortgage rates will lead to a recovery in the market. Freddie Mac reports that interest on 30-year, fixed loans fell for the fourth straight week, landing at their lowest level in nearly four years. Economists say mortgage rates averaged 5.48 percent for the week ended Jan. 24 -- down from 5.69 percent a week ago -- because of the latest reports about the economy and because the Federal Reserve made its biggest cut in 20 years to a key interest rate. Freddie Mac also reports that rates on 15-year mortgages declined to 4.95 percent from 5.21 percent, rates on five-year adjustable-rate mortgages dropped to 5.13 percent from 5.4 percent, and rates on one-year ARMs slipped to 4.99 percent from 5.26 percent. Source: Baltimore Sun (01/25/08) © Copyright 2008 Information Inc.

Reprinted from Realtor Magazine Online, The Weekly Real Estate News, December 2007, with permission of the NATIONAL ASSOCIATION OF REALTORS. All rights reserved. http://www.realtor.org/realtormag

Sanity-Saving Tips for New Landlords

Daily Real Estate News October 26, 2007 Thinking of becoming a landlord? It's not as easy as you might think, experts say. Here are six rules that will help you find good tenants and make money. Rule 1: Don’t be deluded about the market. Joseph Cooper, vice president of Massachusetts-based Monument Mortgage, cites "underestimating the cost in time and the cost in money of actually owning property" as the biggest mistake investors make. To overcome that weakness, he and others suggest studying local vacancy rates, getting a good appraisal and gathering information about any construction in the area that could change the status quo.Rule 2: Get out your calculator. To get a good estimate of the initial rate of return: Take the first-year revenue minus estimated first-year expenses (including some value placed on your time) divided by the full cost of the property when purchased (essentially price plus transaction costs minus mortgage). To calculate the rate of return in later years, divide by estimated equity in the property (what you could sell it for after deducting transaction costs and the remaining mortgage), taking into account price appreciation or depreciation. It’s also wise to consult an accountant on how much of a tax and cash-flow benefit depreciation will provide.Rule 3: Choose tenants carefully. Prospective tenants who respond promptly and conscientiously to calls or e-mails and who show up on time to see units likely will be responsible when it comes to paying rent and taking care of the property. And be careful to observe discrimination laws. Landlords can choose among prospective tenants for economic reasons that arise after credit, employment, and reference checks. Set financial standards for prospective tenants that make you comfortable that they can cover the monthly rent.Rule 4: Avoid getting sued. An aspect of the landlord-tenant relationship that can lead to litigation include mishandling of security deposits. If a tenant pays a security deposit, in many states several conditions must be satisfied, including placement of the money in an interest-bearing account and inspection of the property. Other issues include lead paint levels and failure to provide a minimum standard of habitability.Rule 5: Get Expert Help. Keep an electrician on speed-dial — as well as a plumber and handyman. It also helps for landlords to know a good lawyer, financial adviser, mortgage broker, and real estate professional.Rule 6: Forget about flipping. "Anybody who buys something and says to you, 'I'm going to make a ton of money in two years and sell this thing' isn't being realistic," says mortgage banker Joseph Cooper. "That does happen, but it's extremely rare. You should be buying real estate with the idea that you're going to hold it for five to 10 years. That will take you through a cycle of up and down." Source: Boston Globe, Shira Springer (10/21/07)

Reprinted from Realtor Magazine Online, The Weekly Real Estate News, December 2007, with permission of the NATIONAL ASSOCIATION OF REALTORS. All rights reserved. http://www.realtor.org/realtormag

5 Simple Ways To Increase a Home's Value

Daily Real Estate News December 31, 2007 5 Simple Ways to Increase a Home's Value Good home maintenance is key to creating and preserving a home’s value. Not to mention, it also impresses potential buyers. Here are five basic steps that every home owner ought to take — before spending money on dream bathrooms or gourmet kitchens.1. Safety. Make sure smoke detectors and carbon monoxide detectors are installed and in good working order. Check fuel-burning appliances to make sure they are properly vented and no gas connections leak. Make sure the electrical system is adequate. Flickering lights and popping breakers are the sign of a problem. Anchor handrails and grab bars adequately.2. Preventive maintenance. Repair any leaks in the roof, seal gaps in the siding, paint bare wood, replace damaged decking, patch cracks in concrete, and caulk around tubs and showers.3. Conserve energy. Install a programmable thermostat, weatherstrip doors and windows, fix leaking faucets, upgrade insulation, and replace leaky windows. 4. Go green. Consider environmentally friendly materials for windows, doors, siding, decking, fencing, roofing, flooring, and insulation. 5. Improve comfort. Get rid of clutter, open up spaces, update window treatments to allow in more light, and organize closets and storage.Source: The Associated Press, James and Morris Carey (12/29/07)

Reprinted from REALTOR® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS® Copyright 2005. All rights reserved. www.REALTOR.org/realtormag