Seven tips when considering a HELOC for Home Renovations

Homeowners looking to undertake home renovations can often use a home equity line of credit or HELOC to finance their projects. Here are six quick tips on how to shop for and manage a HELOC:

Shop around. Comparison shop to get the best rate.

Ask about the margin. If you’re offered a rate that’s lower than the competition, it’s probably just an introductory rate, so ask about the lender’s margin. For example, if the introductory rate is 3.5 percent and your lender’s margin is 2 percent, your final interest rate will be 5.5 percent.

Consider a conversion clause. Some HELOCs allow you to convert a variable interest rate to a fixed rate, usually during the draw period (5-10 years).

Watch out for balloon payments. Balloon payments mean that you must pay the balance in full when the draw period is up. Do not choose this option unless you have the financial means to handle it.

Create a family plan. Decide what the money will be used for and who will handle the funds. Keep in mind, you can lose your home if the HELOC is not handled properly. Create a payback plan. Come up with a reasonable plan for how the loan will be paid back.

Consider other options. Nowadays, some homeowners opt for a “Cash out Refinance” if they have substantial amounts of equity in their home. A cash out refinance allows the homeowner to refinance their existing home loan into a new loan for a higher amount. The homeowner is then paid the difference in cash. If you are renovating your home, consider this option as some contractors will offer a discount for services if paid in cash.

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Nicole Emanuel Real Estate

Coldwell Banker

(408) 410-2060

www.realestatebynicole.com

nicole.emanuel@cbnorcal.com

BRE# 01899594

Best Smart Home Tech at CES

From robot dogs to a $5,000 massage chair, the Consumer Electronics Show featured some cool George Jetson-y smart home tech that is becoming all the rage. Check out this video of some of the best and brightest for your home at CES this year. Sign me up for a laundry folding machine! Which invention would make your life easier?

 

Down Payment – 10 Things to Know Before Buying a Home

For many Americans, coming up with a down payment for their first home can be a major roadblock—and quite often the reason for renting, rather than owning a home.

A down payment is the difference between the home’s purchase price and its mortgage amount. This percentage of the sale price must be paid up-front and can vary by lender, location, and loan program. A higher down payment generally translates into lower loan interest rate requirements.

Typically, a down payment comes from personal cash savings, but it can also be a gift that is not to be repaid, or a borrowed amount secured by assets.

While conventional loan down payments may be close to 20% of the sale price, government loans typically have lower down payment requirements. This allows potential homebuyers who normally cannot meet down-payment requirements an opportunity to qualify for a mortgage. Keep in mind that down payments that are less than 20% of the sale price typically require mortgage insurance payments.

10 things to know before buying a home

  • Before you start looking for a home, get pre-qualified for a loan. This will help you determine how much home you can afford and will give you an advantage over buyers who do not have their financing setup in advance
  • If you have marginal or bad credit, consult your lender. You may be able to qualify for a loan depending on how long ago and what reason(s) caused the bad credit.
  • You will need a down payment. Down-payment requirements vary depending on the type of loan.
  • You will need funds for closing costs. Closing costs are charges for services related to the closing of your real estate transaction. They include, but are not limited to: Escrow fees, title policy issuance fees, mortgage insurance fees, fire, flood, and homeowners insurance, county recorder fees, and loan origination fees. Consult your lender for an actual estimate of these costs.
  • Some loans have “points” and some do not. A point is a loan origination fee equivalent to 1% of the loan amount. Together with the interest rate, they constitute the yield on your loan for the lender.
  • Mortgage rates can be fixed or adjustable. Which one is right for you depends on whether mortgage rates are at a high or a low point when you purchase, and on how long you plan to live in the home.
  • There are two main types of loan categories. Conventional mortgage loans are available with fixed or adjustable interest rates. Government loans include FHA fixed and adjustable rate mortgage loans, and VA fixed rate mortgage loans.
  • If you are a low-to-moderate-income homebuyer, there are special programs designed to help you. These loans are available through private lenders, as well as local and state housing agencies.
  • You may have to pay mortgage insurance. Mortgage insurance protects the lender from potential loss if you should default on your mortgage loan payment. Mortgage insurance is always required on FHA mortgage loans.
  • Many organizations offer home loan counseling to prospective homebuyers. They will cover home selection, REALTOR® services, lenders, loan programs, homeownership responsibilities, saving for a down-payment, and other important pieces of information.

Recent Mercury News Article Shows its a Great Time for Buyers!

Check out this recent article in the Mercury News which discusses the recent trends in the Bay Areal real estate market. (Bay Area Homes Sales Below Average, Price Growth Slows). While its hard to say whether its a seasonal phenomenon or a market trend in the Bay Area, anecdotally, we have been seeing home sales slow down for the past few months. What we do know is the slow down has created an opportunity for many buyers in the market to purchase without all the competition. If you are considering a purchase, now is the time while other buyers are taking a break for the holidays!

Tips for Selling Your Home in the Fall

Summer has ended, the weather is cooling, leaves are changing and, you may be surprised to learn, homebuyers are out in force. Autumn is a popular time for corporations to relocate associates – creating a pool of buyers who need to make quick decisions about housing. They’re serious about purchasing and, with fewer houses on the market this time of year, your house may soon be getting more attention. What can you do to make sure your home sells before all the leaves fall off the trees? Here are a few helpful tips:

Highlight the location. Bring the benefits of your location front and center. Establish a list of perks that your property offers, such as proximity to public transportation, schools, shopping, recreation or entertainment. Continue reading “Tips for Selling Your Home in the Fall”

Housing Outlook for 2014: Steady Sales and Higher Prices

Want to get an idea where the real estate market is headed in 2014? Check out this recent article (Housing Outlook for 2014: Steady Sales and Higher Prices) which discusses the speculations of NAR®’s Chief Economist Lawrence Yun who forecasts existing home sales to hold fairly even in 2014 and the median sale price of homes to increase nearly 6% with inventory shortages being felt again this year.

Meanwhile, the Kiplinger Letter, in its annual economic forecast issue, calls for a 4% increase in existing home sales. The publication says new home sales are likely to jump about 16% next year after soaring 36% in 2013 and 20% in 2012.

That’s great news for sellers again this year and means that buyers may breathe a little easier in the search for a home with a slight increase in inventory.

If you have questions about the market and are considering a move in the new year, give me a call today to discuss your options!

 

Bay Area Calender of Events for May

Looking for something to do this month? Take a look at this calender of events for our local area to help you get out and enjoy the beautiful weather!  May 2013 Events Calendar

As always, feel free to call me for all your real estate related needs! Happy Spring!

Nicole