“The significant problems you face today cannot be solved at the same level of thinking you were at when you created them.” Albert Einstein

The housing market has definitely caused significant problems for some people but is also providing some amazing opportunities for others. Agents aren’t like retailers who wake up one day realizing they have the wrong merchandise on the shelves.

Everyone needs a place to live and whether you rent or buy, you pay for the house you occupy. While the home for sale remains the same, the methods that produce results have to change.

Listing agents are diametrically opposed to the objectives of buyer’s agents. This is not to say that there cannot be a win-win situation but each agent is trying to negotiate the best price and best terms for their client.

Financing can make listings more marketable and structure a transaction to provide the buyer with the cheapest cost of housing. Personal experience is a great teacher but a very expensive way to learn. An expert, like a Residential Finance Consultant can provide information and tools to make better decisions to be able to profit in the current market.

Carbon monoxide is colorless, odorless and toxic. It’s called the “silent killer” in homes because some victims are not even aware that the deadly condition exists.

Homeowners must be concerned about unmaintained furnaces, water heaters and appliances that can produce the deadly gas. Other sources could include leaking chimneys, unvented kerosene or gas space heaters and even exhaust from cars operating in an attached garage.

The Environmental Protection Agency suggests the following to reduce exposure in the home:

• Keep gas appliances properly adjusted
  
• Install and use an exhaust fan vented to the outdoors over gas stoves
  
• Open flues when fireplaces are in use
  
• Do not idle car inside garage
  
• Have a trained professional inspect, clean and tune-up central heating systems annually

It is the mantra of people who missed a great deal. It’s the theme song of the procrastinator. It’s the refrain that reminds us of the one that got away.

Some people are still beating themselves up because they didn’t recognize the housing bubble was really going to burst. It is impossible to change the past but will they see the signs of the next housing trend?

In the past four years, prices have adjusted with 30% corrections nationally and much more in areas with high percentages of foreclosures. New homes are almost non-existent. Interest rates are slightly above record lows. Consumer goods are skyrocketing; our budget deficit and national debt are staggering and escalating inflation appears certain.

“Forget stocks. Don’t bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.” states Shawn Tully, Senior Editor at-Large for Fortune magazine in a March 28, 2011 article.

“If I would have known that this was the best buyer’s market ever, I could have taken advantage of the prices and interest rates; I should have fixed my cost of housing for years to come.” Don’t catch yourself saying this. You owe it to yourself and your family to get firsthand information to see what your options really are.

It’s obviously going to be a Herculean task for Congress to balance the budget and reduce the deficit. It’s sort of like the country song lyric that goes “everyone wants to go to Heaven but nobody wants to go now.” It is estimated that the mortgage interest deduction cost the government $100 Billion last year which is why it is a target for cuts.

The Mortgage Interest Deduction has been part of Income Tax laws in this country since 1913. The United States of America is one of the few countries in the world that allow such a deduction. Our goverment has always supported homeownership as is evidenced in the different tax benefits it receives.

• Mortgage interest deuction up to $1,000,000 in acquisition debt on a principal residence and second home
  
• Deduction of interest on Home Equity debt of $100,000 over acquisition debt used for any purpose
  
• Capital gain exclusion on up to $500,000 for married couples filing jointly and $250,000 for single homeowners
  
• Favorable long-term capital gain rates if gain exceeds exclusion limits
  
• Property tax deduction

There are homeowners that would like to have a larger/nicer home but are patiently waiting for the market to improve. A frequently heard objection is that they can’t sell their home for what it is currently worth.

Buying up in a down market is actually advantageous because while you might get less for the home you’re selling, you’re also getting the larger home for less. For instance, if you had to sell a $200,000 home for a 10% discount, you might feel that you left $20,000 on the table. However, buying a $300,000 for the same 10% discount would put you $10,000 ahead on the sale and purchase.

The other obvious matter is that when the mortgage rates increase while you’re waiting for the market to improve, it dramatically increases your cost of housing with higher payments. The cost of housing is affected by price and mortgage rates.

To accurately evaluate your current options, you need facts and assessment tools that will provide you the information to make an informed decision.

Fixed Rate mortgages are at their lowest level for 2011 as reported in the current Freddie Mac weekly Primary Mortgage Market Survey. Many qualified buyers missed the opportunity last fall in October and November to refinance at record low rates. This may give homeowners one more chance to refinance and save money on their payments.

An important thing to keep in mind is that points paid in connection for refinancing a home are generally not considered prepaid interest and must be spread over the life of the mortgage. Some advisors suggest that you have the lender quote a “par value” loan to eliminate the points which will lower refinancing costs even though the mortgage rate will be slightly higher.

Additional income tax information is available in IRS Publication 936.

In many cases, the seller and the buyer are actually represented by their real estate agent.  In those situations, there is a fiduciary relationship created that requires the agent put the client’s interests above their own.

There is generally no such relationship between buyers and lenders.  Some of the housing crisis issues may have been avoided had the lenders been more concerned for the buyer’s best interests.

The following are a few warning signs that should cause a buyer to do much closer investigation:

1. Claims that bad credit is not an issue
   
2. Prepayment penalty
   
3. Larger than normal loan charges
   
4. Rate gouging by brokers – yield-spread premium
   
5. Loans without escrow accounts for taxes and insurance
   
6. ARM loans that only go up and not down
   
7. Initial loan to secure property with plan to replace it later

As a real estate professional, I can recommend a lender who is experienced in your market and has a history of providing good service.  A real estate professional can be a good intermediary between you and the lender.

• “It’s impossible to get low down payment loans.” – UNTRUE! 
  
  FHA down payments are only 3.5% and VA is 0%.  In some areas, there may be some 100% USDA loans available.
  
   
  
• “It takes perfect credit to get a loan.” – UNTRUE! 
  
  There is a relationship of better rates to better credit but many issues on a credit report may be explained.  The way to know for sure is to speak to a reliable lender.
  
   
  
• “If I’ve had a bankruptcy or foreclosure, I can’t qualify.” – UNTRUE! 
  
  Credit history following a short sale or foreclosure is very important and there can be extenuating circumstances.  It only takes a few moments with a reliable lending professional to find out if your individual situation will allow you to qualify.
  
   
  
• “Getting pre-approved is expensive.” – UNTRUE!
  
  Usually, the only expense to getting pre-approved is the cost of the credit report which could be around $35.  The advantage is that you will know that you qualify for a particular mortgage amount.
  
   
  
• “I should wait to qualify until I find a home.” – UNTRUE!  
  
  The best interest rates are only available for the highest credit scores.  It can take time to qualify for a mortgage especially if there are issues that need to be corrected.  It is to your advantage to start the qualifying process early in your home search.
  
   
  
• “All lenders are the same.” – UNTRUE!
  
  Reliable lending professionals will explain the entire process before collecting fees, quote fees up-front, have competitive products, do what is necessary to get the loan approved and close at the locked rate and terms.  Ask for recommendations from recent borrowers.
  
   
  
• “Adjustable rate mortgages are more expensive than fixed rate mortgages.” – UNTRUE!
  
  Adjustable rate mortgages can be less expensive than fixed rates if the buyers’ circumstances warrant it.  There are many variables and you need to be aware of them before deciding which type of loan to finance your purchase; the ARM may provide the cheapest cost of housing.

Buyers and Sellers need solid information to make good decisions.  The agent who represents you in the sales may be the BEST recommendation for a reliable lender.  The mortgage plays an enormous role in determining the overall cost of housing and you need solid information to make good decisions.

Recently, a homeowner had a burglary and part of the insurance claim was denied because they didn’t have proof of purchase or a current inventory of their personal belongings.  This is something that could happen to anyone.  Even if you had an inventory but it was several years old, it could cost you money.

Some homeowners who have placed an insurance claim for losses say that they realized something was missing months after they had filed.  The inventory can actually serve as a guide to make sure you get compensated for all of your loss.

The best proof of purchase is to have a receipt for the item.  The reality of the situation is that most people don’t keep receipts.  The next best item is to have an inventory and the more details like pictures, the better.

Contact me for a Home Inventory.  Once you get it completed, put it somewhere safe so you’ll have it when you need it.  Saving it in the “Cloud” like  Microsoft Office Live is convenient because you can acess it from any computer with Internet access.