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Actions to Take Before Buying a Home Today

by Fannie Mae

As the housing downturn has shown, homeownership is about more than buying a home – you have to make sure you can keep the home over the long term. If you’re thinking about buying a home, these five steps can help ensure you get the right house for you, and the affordable financing that helps make homeownership a long-term success:

Get Educated. A little mortgage know-how goes a long way toward ensuring you get an affordable mortgage

Before you hire an agent or find a lender, get educated on the loan process and key factors that make a loan affordable. You’ll want to know about loan types – fixed-rate mortgages, adjustable-rate mortgages, FHA and VA loans – and the full range of line items that contribute to the total cost of securing the loan, including discount points, appraisals, and real estate agent commissions.

If you would like more in-depth information, the Department of Housing and Urban Development (HUD) can put you in touch with the nearest housing counseling professional in your area. Visit the HUD Website for more information. You can also check with local government, neighborhood associations and neighborhood bank branch offices for information sessions on home buying as well as homebuyer- education programs.

Get Your Finances in Order. Given today’s stronger lending guidelines, it’s more important than ever to get your finances in order<

First, get a copy of your credit report, which usually includes your credit score. If your credit score is low (anything below 620), take the time to improve it. If you find errors on the report, take the time to correct them. This may put your home buying plans on hold (creditors typically look for a two-year history of consistent, on-time bill payment to establish good credit), but it could result in a better loan and more affordable rates.


Establish a Budget. Before you start searching for your home, make sure you know how much home you can afford

Lenders will evaluate all your debts and take into account your full financial situation in qualifying you for a mortgage. A key factor is how much income you bring in vs. how much you will pay out each month. Here’s a good guideline to check where you are: Your housing expense (the mortgage payments on the house you are buying) should generally not exceed 28 to 33 percent of your total monthly gross income – and all revolving debt (including car payments, credit cards payments, and your mortgage payment) should not exceed 36 to 40 percent of your total monthly gross income.

It’s always helpful to create a monthly budget, itemizing all your recurring expenses, including estimated maintenance costs, taxes, utility bills, and condo or homeowners’ association dues. Then, test your budget. If you can pay all these debts and continue to add to savings, you may be ready to buy a home. If not, you may have to revise your plans.

Start Saving. Having savings in reserve helps ensure you can afford the upfront costs of homeownership

These include:

• Down Payment – Five to twenty percent of the purchase price. (Keep in mind, a lower down payment means you’ll have to qualify for a higher loan amount and pay for mortgage insurance – adding to your monthly mortgage payment).

• Deposit – Two percent of the purchase price, typically. Sometimes called earnest money, a deposit shows the seller you’re serious about buying the home. If your offer is accepted, the deposit or earnest money will be applied towards the down payment. If your offer is rejected, the down payment will be returned to you.

• Closing Costs – Three to five percent of the purchase price, on average. These costs include all fees required to execute the sale, including attorney fees, title insurance, appraisals, and points.

Get Pre-Approved. In today’s competitive market, home buyers should get pre-approved for a mortgage before they begin their house hunt.

To be pre-approved for a loan, your lender will gather information about your job, assets, income, and debts and then determine how much financing you’re qualified to receive, backed by a pre-approval letter. When you’re ready to make an offer, this letter will tell the seller you’re a serious and qualified buyer. It will also give you an edge over competing buyers who are not pre-approved.

Keep in mind, pre-qualification doesn’t mean you have an approved loan. You’ll still need to apply for a loan if your offer is accepted.

Ulster County Real Estate Statistics 5/15/10

by Team Ulster
Ulster County Multiple Listing Sales Stats 1/1/2001 - 5/15/2010   Year Number of Average sale Median sale
Year Number of Average sale Median sale   1/1/08 - 6/15/08 units sold price price
  units sold price price     461 $300,777 $240,000
2001 660 $170,241 $137,000   Low sold 20,000    
2002 1544 $185,400 $150,000   High Sold 3,200,000    
2003 1526 $216,119 $180,000   0-$100,000 22    
2004 1786 $250,572 $215,000   $101K - $200K 136    
2005 1883 $279,239 $245,000   $201K - $300K 158    
2006 1657 $283,288 $247,000   $301K - $400K 70    
2007 1563 $300,742 $250,000   $401K - $500K 32    
2008 1200 $288,758 $239,200   $501 - 1mill 33    
2009 1184 $241,065 $209,000   1mill + 10    
2010 YTD 379 $239,797 $209,000   % over $1M 2.10% % under $300K 68.50%
                 
                 
                 
Year Number of Average sale Median sale   Year Number of Average sale Median sale
1/1/09 - 6/15/09 units sold price price   1/1/10 - 6/15/10 units sold price price
  346 $240,574 $197,500     513 $237,207 $210,000
Low sold 34,900       Low sold 20,000    
High Sold 1,300,000       High Sold 2,150,000    
0-$100,000 48       0-$100,000 53    
$101K - $200K 127       $101K - $200K 184    
$201K - $300K 91       $201K - $300K 163    
$301K - $400K 44       $301K - $400K 70    
$401K - $500K 13       $401K - $500K 24    
$501 - 1mill 20       $501 - 1mill 17    
1mill + 3       1mill + 2    
% over $1M 0.80% % under $300K 76.80%   % over $1M 0.003% % under $300K 77.90%
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 

Protect Yourself from Mortgage Modification Scams

by Fannie Mae

Mortgage modification scams can occur when unscrupulous people prey on borrowers who are struggling to keep their homes. While they promise to help, the people who perpetuate mortgage scams do little to no work, charge excessive fees, and use tactics that often put the homeowner at greater risk of losing their home. If you’re modifying your mortgage or facing foreclosure, here are five keys ways to protect yourself from mortgage rescue scams.

 

Do your homework and know your options

Ask questions and get explanations so that you have a complete understanding of any modification or refinance. Always be sure to read and understand all paperwork before signing. Don't sign papers in exchange for a promise that someone else will pay off your mortgage.

 

Don’t pay for counseling. Free, legitimate help is available

Beware of high-pressure sales tactics, including pressure to act quickly, and deals that appear to be too good to be true – they are. A legitimate housing counselor will never ask you to sign paperwork before you understand it. You don’t need to pay for counseling – call 888-995-HOPE or go to www.HUD.gov to find a free HUD-Approved housing counselor.

 

Know the person you’re working with. Make sure your housing counselor is HUD-approved

Before responding to any person or organization offering to "save" you from foreclosure, find out if the organization is HUD-approved. Find a housing counselor on the HUD.gov website. Your lender or a HUD-approved housing counselor is the safest source of information and help. No one should guarantee you they can stop foreclosure.

 

Don’t submit your mortgage payments to anyone other than your mortgage company. Beware of people who ask you to send your payment to them

Scammers might ask you to make your payments to them; however, they pocket your payments instead of sending them to the lender. You should only send your mortgage payment to your mortgage company.

 

Ask for Help. Again, free, legitimate help is available

Contact the HOPE Hotline (1-888-995-HOPE) or Fannie Mae at 1-800-7FANNIE (732-6643) or your servicer for help. To report a scam, visit www.preventloanscams.org. To learn more about avoiding scams, visit www.loanscamalert.org.

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Contact Information

Photo of Laurel Sweeney Real Estate
Laurel Sweeney
Berkshire Hathaway HomeServices Nutshell Realty
1209 State Route 213, PO Box 452
High Falls NY 12440
Office: 845-687-2200
Toll Free 877-468-5783
Fax: 845-687-4162

© 2016 BHH Affiliates, LLC. An independently owned and operated franchisee of BHH Affiliates, LLC. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of HomeServices of America, Inc.®.  Equal Housing Opportunity.