6 – Do’s Before You Apply For A Mortgage

 With good preparation, most things are easier. That works in mortgages too! Today, I want to give you some ideas that can make your mortgage experience less painful.

Income Items:

1. Gather your documents. Today, many people will have to produce 2 years’ complete tax returns, including W2′s, 1099′s, K1′s, and all the schedules, as well as a month’s worth of pay stubs.
2. Be prepared to explain them. Deductions in your returns and your pay stubs may impact the income your lender will use to qualify you which, in turn, has a big impact on the loan you will get.
3. Have a breakdown of base pay versus overtime for both your pay stubs and 2 years’ W2′s. Lenders treat overtime (and bonus income) differently than your base pay. Be prepared to explain any changes over the last few years because your loan officer will ask you about it.

Asset Items:

1. Start accumulating your bank statements. Lenders look back 3 months from when you sign your contract of sale.
2. You will have to explain any and all large deposits (which are defined as deposits greater than your regular pay check) because lenders want to make sure you haven’t taken out any new loans that aren’t on your credit report.
3. Avoid any significant cash deposits. However, if you did have a cash deposit, understand that the lender will have you source it (a bill of sale and DMV receipt for that motorcycle, for example).
4. If you will be receiving a gift, consult your loan officer on how to document it (from the donor’s ability to how you deposit it).

Credit Items:

1. Ask your loan officer to run your credit and go over it with them. Believe it or not, most credit reports contain errors. Best to identify them and get working on correcting them as early as possible.
2. Do what you can to pay down your balances to under 30% of available credit to help you get the best score possible.
3. Do NOT close accounts or pay off collection accounts without discussing it with your loan officer. Either one of these logical moves can actually have a negative impact on your score.

When buying a home, remember the Boy Scout motto, “Be prepared”. Following these suggestions will make your loan approval easier and less stressful.

Credits- Dean Hartman- The KCM Crew- Neal Paskvan

If you need some advice about this subject or anything else Real Estate… feel free to contact me.
Neal Paskvan- Baird Warner- Downers Grove- 630-964-1855

   Email  neal.paskvan@bairdwarner.com

First Time Buyer Advice Video

First Time Buyers Have Lot's of Questions  the Main one is...What can you comfortably afford?
Learn how the relationship between your income and total debt could affect your home buying budget.

Know your debt-to-income ratio, which is the percentage of your monthly income that is spent on debt.

• Talk to a lender before you go house hunting so you focus your search on homes you can comfortably afford.

Find a Trust Worthy Realtor who you feel comfortable with and can walk you trough all the steps of the process.

Feel free to contact me with any questions... All my best, Neal  neal.paskvan@bairdwarner.com

First Time Buyer Video provider by AOL

Energy Savings at Home | Energy Efficiency Tips | HouseLogic

 

Are You Looking for Energy Savings in All the Wrong Places?

Ack! Our energy costs are going up because too many of us are making the wrong judgment calls about how to save energy. Here’s why we’re having a disconnect.

Do you see your energy bills rising even if you’ve implemented up to three projects to save energy? In the first of our two-part Q&A with an expert on consumer attitudes toward energy efficiency, we look at the energy-saving truths many of us ignore. Hint: Replacing windows isn’t your best bet. Tomorrow, we’ll show you what you can do to actually start seeing some savings.
Suzanne Shelton is president and CEO of Shelton Group, a marketing agency specializing in sustainability and energy efficiency. Shelton Group’s annual Energy Pulse research report — released last fall — tracks consumer attitudes toward energy-related topics.

Read more: Read More from House Logic

 

Energy Savings at Home | Energy Efficiency Tips | HouseLogic

In Real Estate, Keeping Current Matters!

 

There is too much misinformation being spread about today’s real estate market. Studies are being misinterpreted. Prominent names are being used to foster a point even if their quote is from years ago.

As an example, we want to look at a story published last week by The Fiscal Times titled The New American Dream: Rent, Don’t Buy. In the article, they claim:

“Call it the Big Selloff—America is headed toward a future in which fewer people own the spaces they call home… Those trends are just the beginning.”

We are not arguing that the homeownership rate is under downward pressure in this country. We are disputing some of the ‘evidence’ used in the article. Here are three points we want to refute:

The Homeownership Rate IS NOT in a Freefall

The article quotes a Morgan Stanley study from July 2011 which did make the argument that the homeownership rate was trending downward. Many others made the same point at that time. What the article failed to mention is that the homeownership rate unexpectedly increased in the third quarter of 2011! As DSNews reported in early November:

“After falling to a 13-year low during the second quarter, the homeownership rate posted a highly unexpected rise in the third quarter, according to a Census Bureau report.”

The jury is still out as to whether the homeownership rate will continue to fall or whether it has already bottomed out.

The Founders of Case-Shiller ARE NOT Saying Renting is Better

In the article mentioned above, they claim that the team that founded the prestigious Case-Shiller Pricing Index believes that buying makes little sense. The article explains that back in 2006 Robert Shiller presented a study based on data collected prior to 2005 showing that, over time, it made more sense to rent than buy. They use this information to conclude:

“Another skeptic is Yale economist Robert Shiller, co-creator of the Case-Shiller Home Price Index.”

They claim Shiller is a skeptic today based on what he said six years ago!

The major challenge we have with this is that Karl Case, the other founder of the Case Shiller Index, came out ten days ago saying that now is the time to buy. The New York Times in a story published on 12/30/2011 quotes Professor Case as saying:

“If you’re buying a house or apartment to live in and pay for over time, and can afford the payments, then it’s a terrific time to buy.”

Beracha and Johnson DID NOT Conclude That You Shouldn’t Buy

The Fiscal Times article went on to say:

“And in a paper this June in the journal Real Estate Economics, two researchers calculated that over the past 30 years, most often it would have been better to rent than buy.”

They were referring to the great study done by Beracha and Johnson titled Lessons from Over 30 Years of Buy versus Rent Decisions: Is the American Dream Always Wise? We are very familiar with this study as we posted on it back in May of last year. The paper does explain that over the last thirty years the financial benefits of buying vs. renting could be debated.

However, the conclusion of the paper left no room for argument. According to professors Beracha and Johnson, NOW IS THE TIME TO BUY!

“(F)undamental drivers now appear to be in place that favor homeownership over renting in the near term future…

“[This] might seem unwise to many given the recent crash in the real estate markets around the country. However, rent-to-price ratios now seem to be in place along with other fundamental drivers that favor ownership over renting.”

They conclude their research paper with this sentence:

“Conditions (historically low mortgage rates and relatively low rent-to-price ratios) now seem in place to favor future purchases.”

Dr. Johnson, Ph.D. — Florida International University (FIU) and Editor of the Journal of Housing Research, is now a guest blogger on this site and in November shared with us his current presentation on this issue. To download the presentation, go to http://realestate.fiu.edu/buyer-or-renter-nation.html.

Bottom Line

We attempt to keep our readers current on this very rapidly evolving housing market with this blog, our tweets, our facebook posts and our subscription service. The letters K-C-M preface each offering. They actually stand for ‘keeping current matters’. We believe that helping our followers stay on top of the latest information available will help correct the housing market.

 

 

Downers Grove Real Estate

 

At 31, Robert Charlton had grown disillusioned with his job as a technical writer. "The idea of doing a desk job for another 30 years seemed painful to me, so I came up with this idea of trying to retire before 45," he says. He shared the idea with his wife Robin, who was then 31 and working as a travel agent.

Robert read up on personal finance instead of hiring an adviser and looked at taxable accounts they could draw from before turning 60. During that period, Robin completed an accelerated nursing program to become a registered nurse. By age 43, they'd gone from $16.88 in their checkbook at age 28 to saving up enough money to leave both their jobs and live off the interest.

 

5 TIPS FROM EARLY RETIREES

 1. Cut housing costs. The Charltons spent a year carefully tracking their spending to see where they could cut back. But as Robert says, "the truth of the matter is, we really didn't have that much fat to cut out." Still, they agreed to rent out half of the bi-level starter home they owned in Boulder, Colo., so they could pay off the mortgage and pad their savings. Switching from a 30-year to a 15-year mortgage also helped the couple reach their goal. "You save so much on interest that it does result in a higher monthly payment, but not as high you would think," says Robert. They later sold their house and put the equity into a bond fund.

2. Agree on your priorities. Instead of buying new cars, the couple kept their old ones, and Robin stuck to grocery shopping lists instead of buying whatever caught her eye. "That's how he shopped [without sticking to the list] so he was cut off from shopping," she says. Keeping their shared goal in mind kept their eyes on the prize. "We were both on the same page," adds Robin. "We both knew we wanted to put the money towards experiences." However, because they value travel so much, the Charltons didn't completely deprive themselves while saving up for retirement. As Robert says, it's important to "balance living for tomorrow with living for today." If saving feels like too much of a chore, it's easy to fall of the bandwagon.

3. Live below your means. Now that they've left the workforce, the Charltons live modestly by staying in hostels and focusing on less expensive travel destinations. They estimated needing between $30,000 and $40,000 annually, and they've managed to stay in that range, though they're averaging closer to $40,000. Earlier this year, they splurged on a trip to Italy and Switzerland for their 25th wedding anniversary. However, Robert says, "we typically have tried to travel places where the dollar goes further, like Argentina and Chile, where the exchange rate was in our favor." Destinations like India and Nepal have higher airfare but low day-to-day expenses so they stay for several months at a time to balance out the airfare costs.

4. Stay in the game. Although the Charltons' portfolio has had its ups and downs, they've resisted the urge to try to time the stock market or get out altogether. "We did some of our best investing during the bear market of 2000 to 2002," says Robert. "We bought stocks 'on sale' and reaped the rewards afterwards." Although he says they could have gotten a higher return on investment if the timing had been different, they also underestimated future earnings, so that helped them reach their target more quickly than planned.

5. Don't rule out temporary work. Dips in the market have made it more challenging for the Charltons to live off their interest. So when Robert was offered a six-month consulting project in 2009, he jumped at the opportunity to rebuild their capital. Although he'd once dreaded going to work, he actually liked the temporary arrangement. "I genuinely enjoyed working hard during that window because I knew it wasn't endless, which was the thing I found challenging early on when I first came up with this plan," he says.

Robin adds that they're open to making adjustments as they go or returning to work if needed. However, she values the chance to travel and be active while they're young and healthy. "Working as a nurse, I realize so many people save so much and a lot of people don't get all the years they thought they'd get," she says.

Click here for the rest of the story

Dupage County Health Department > News

FOLLOW THESE PRECAUTIONS FOR FURNACE AND FIREPLACE SAFETY

Mon January 9, 2012

DUPAGE COUNTY- People rely on their furnaces and fireplaces to function properly year after year, often not remembering proper maintenance or cleaning. This is a dangerous practice resulting in thousands of injuries and deaths among Americans. The DuPage County Health Department recommends the following precautions to keep your family safe this winter:

Furnaces:

• Change or clean your furnace filter regularly.
• Have a professional check your furnace to be sure it is in good repair. Some furnace services can check to see if the furnace gets enough fresh air. Many homes are over-insulated and lack intake-air piping. This causes the furnace to burn improperly and can reduce the oxygen in your home to a dangerously low level.
• Move all materials that burn easily away from the furnace, including old rags, sawdust, wood scraps and flammable liquids such as gasoline and kerosene. (Because vapors from flammable liquids ignite easily, store these liquids in tightly capped containers.)
• Have a professional inspect your chimney and flue at least once a year and clean them if necessary. Carbon monoxide levels can become dangerous if smoke cannot escape from blocked flues or chimneys. Also, soot in flues and chimneys is highly combustible and can easily ignite, sending a ball of fire from the furnace or fireplace into the house.

Fireplaces:

• If you have a fireplace, be sure it was made to be used and is not just for decoration.
• Only burn materials designed for a fireplace. Coal and charcoal release carbon monoxide, and some products emit deadly gases. If using artificial logs, burn just one at a time. They may produce more heat than the fireplace can withstand.
• Always use a fireplace screen to prevent hot embers from popping out into the room.
• Do not go to bed or leave the house until you are sure the fire is completely out. Securely shut the fireplace screen or doors.
• Put ashes in a metal container and empty it after each time you clean the fireplace.
• Install smoke and carbon monoxide detectors on every level of the home. Test the alarms periodically and change the batteries at least once per year.

For more information on the DuPage County Health Department, follow us on Twitter @DuPageHD or become a fan on Facebook

Real Estate 2011: House Prices in Chicago and the Suburbs - Chicago magazine - October 2011

 

THE NEW NEW RULES OF REAL ESTATE: Eleven years ago, Chicago offered a guide to making the most of the sizzling-hot housing market. What a difference a decade makes. Now, confronting the realities of today’s pinched economy, local real-estate pros weigh in with the best strategies for buying or selling a home. PLUS: Our annual survey of housing prices in nearly 300 neighborhoods and towns

By Dennis Rodkin

RULE NO. 1   Yesterday is gone

RULE NO. 2 Don’t play the “let’s just see what happens” game.

 

Get the rest of the story from Chicago Magazine by Dennis Rodkin here

6 lowball-offer errors home buyers make - MarketWatch

CHICAGO (MarketWatch) — For some home sellers, it was a long summer without a home sale. That means this fall, some buyers — smelling the desperation — may be able to cut a better deal.

Read rest of the story here