Yes, you might be better off buying now than when the tax credit was in effect. The reasons are very simple. A historic drop in interest rates and less competition if you are buying residential property under $400,000. If you were taking out your mortgage today, your interest rate would probably be around 4.5% for a thirty year fixed rate mortgage.   Rates in April were right around 5.25%. You would be spending $135 less on your monthly payment, for an annual savings of $1,620 per year.

Home sales hit a wall with the expiration of the tax credit, reminiscent of how "Cash for Clunkers" sucked up a lot of future demand for car sales. One advantage of the current market situation is that lower interest rates and housing prices are available to everyone purchasing residential real estate, whether homeowners or investors. I have noticed an increase in savvy investors buying real estate to "fix and hold". They are saying the drop in demand after April has enabled them to get lower offers accepted.

Do I wish a tax credit would come back for everyone, not just first time homebuyers? Of course I do. Do I think it will with our record deficits? Not likely. If you purchased back in April, congratulations. You are making yourself rich instead of a landlord.  Hopefully you went with a zero or low cost loan. If so it might make sense to refinance now, saving a lot of money. As always, have your mortgage professional do the numbers.

Remember that unless you are Warren Buffet, you can not time the market. I have missed a lot of great deals because I thought prices were going to go a little lower. Feel free to call or email with any questions.

Next Week: Update on FHA negative equity refinance program

Best

Chip

Chip Allen

Crestline Mortgage Bankers

A Division of Universal Lending Corp

Direct: 303.947.2109

Fax: 303.987.0676

Loanchip@hotmail.com

Your Lender for Life!

When people you care about need a mortgage,

for purchase or refinance, please do not keep me a secret.

Click here to Get started searching for YOUR Colorado Dream Home. 

As you know, a lot of Realtors these days are utilizing social networking to get the message out about a home that they are trying to sell on behalf of their client. Consumers are posting their homes on Craig’s list and Zillow in hopes of attracting a buyer. They post the home information week after week on their profiles, but they never seem to get a lead and or inquiry. Shortly thereafter, they abandon the process and tell everyone that social networking didn’t work for them and you know what, they’re right.

The reason they are right is because they are doing it wrong. They have missed the point of the entire platform and how it works. According to Webster’s dictionary, the term “social” means, “of or relating to human society, the interaction of the individual and the group, or the welfare of human beings as members of society.” The key term in that whole thing is interaction. You cannot just post material day after day on social networking sites and never interact with other people. You need to comment on their posts, their home listings, their pictures, their comments, and their games. When you do that, you start a dialogue. The dialogue turns into a conversation and the conversation may turn into a friendship. Once you make friends then you can do deal! I’ll say that again in case you missed it. You need to make friends first and then that gives you the opportunity to do deals like sell a home. If you follow that rule about making friends first, then you’ll finally see results from social networking. This rule applies to any business and not just real estate. 

I was recently consulting a non-profit group on internet and social marketing. They thought that they could spend $1500 a month on internet marketing and see a direct P&L result of say $3000 a month. Social networking doesn’t work that way. It’s not a cash machine where the standard profit and loss balance sheet applies. Here is what I told the nonprofit on what they could expect if they embark on an internet social media campaign: 

“The most likely scenario to see a return on your investment will be in the form of relationships. You will broadcast a message and make yourself known to thousands of people every day (which is 100 times more than what you are doing now with a passive website). Out of that, conversations will happen, relationships are made, databases are formed, and followers ensue. Over time, those relationships will become stronger and leads to visits to the Ranch and that will lead to someone stepping up making a one-time gift donation of say $10,000. Then a second person will step up with a one-time gift and so on and so on.” 

That’s the way social networking makes things happen. So stop posting information about homes; start conversations or provide value added information that start conversations. Make a friend and do a deal. 

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost 

Click here to Get started searching for YOUR Colorado Dream Home.

http://www.coloradodreamhouse.com/index.php/news/ The next four weeks are going to be slow in Colorado Real Estate as kids get ready to go back to school and parents try to get back into their normal routines. The good news is the second selling season from September 15^th through November 15^th is right around corner. That’s the second best time to sell a home in Colorado. What does the next four weeks mean for buyers and sellers? To find out watch this week’s market update with Fuller Sotheby’s International Realty agent Dan Polimino.

Check out the video at http://www.youtube.com/watch?v=ppt7X137KeA 

Click here to Get started searching for YOUR Colorado Dream Home.

Effective October 4th, 2010, FHA will lower the upfront mortgage insurance premium (MIP) and raise the annual mortgage premium. Upfront MIP will decrease from 2.25% of the loan amount to 1 percent. The annual mortgage insurance premium, paid monthly on FHA loans over 15 years, will change from 55 basis points to 85 or 90 basis points.  The reason for the change is to prop up the FHA Mutual Mortgage Insurance Fund which is "running on fumes" and needs to be gassed up.

Under the current rules a $200,000 loan has a $4,500 upfront MIP and a monthly premium of $91.67. Currently the monthly MIP is computed by taking the loan balance of $200,000 multiplying by 0.0055 and dividing by 12. The good news under the new rules is that the upfront MIP will decrease by $2,500, however the monthly MIP will increase by $60 or $70; an annual increase of $720-$840 per year. It is not known at this point if borrower's who wish to refinance an existing FHA mortgage will receive a credit towards the upfront MIP on a new mortgage.

Is it better to wait or go forward now?  As always, have your mortgage consultant do the math to see what best suits you. The logic of reducing upfront fees and increasing monthly fees, when there is a pressing need to increase a reserve fund, escapes me.  It must be because I did not go to Harvard and have spent most of my life in the private sector.

Feel free to call or email with any questions or comments.

Next Week: New FHA program for borrowers with negative equity.

Best, Chip

Chip Allen

Crestline Mortgage Bankers

A Division of Universal Lending Corp

Direct: 303.947.2109

Fax: 303.987.0676

Loanchip@hotmail.com

Your Lender for Life!

When people you care about need a mortgage,

for purchase or refinance, please do not keep me a secret.

Click here to Get started searching for YOUR Colorado Dream Home. 

There is no question that the luxury housing market has been hit hard by the recession. People in this price range lost plenty of money in the market, investments, and may have lost their jobs and or their retirement plans. As such, some people had their ability to buy high-end homes and had disposal income taken away. Today, those people who still have the ability to buy luxury homes are looking, but I notice a trend that they are really looking at unique homes.

That makes sense. Let’s face it: there is a smaller pool of buyers in the luxury market place than ever before and as such, if they are going to spend their money, chances are they are going to spend it one of two ways: 1) on a property that is a real deal, or 2) on a unique property. 

Finding a property that is a real deal is not too hard to do these days so let’s tackle the latter and talk about unique properties. As of late, I have seen more and more activity on properties that are really one-of-a-kind. For example, finding a home on the water in Colorado is no easy task. There is a luxury home in Larkspur, Colorado that has its own 25-acre water skiing lake. It’s stocked with trout; the home is 6500 sq. ft. of luxury on 35 acres with a barn, greenhouse, and outbuilding. It has a 17,000-gallon koi pond, a boat launch, and 2000 ft of sandy beach. Now that’s a unique property and as such, people are looking at it. 

Land is a tough sale these days, but if it’s unique with a spectacular location, it will get some showings. For example, there is a 154-acre parcel for sale in Colorado Golf Club. The reason why this is unique is it’s the largest parcel of land available in the prestigious Golf Club and it’s the only one of this size. It has magnificent views of the front range from every angle, views of Betts Lake, and the golf course. It’s set up to be the perfect equestrian site and truly qualifies as a unique property for someone to build their dream ranch. 

In Sedalia, Colorado there is a home that’s 12,000 sq. ft. on 10 acres, but what makes it unique? For starters, it backs to 400 acres of open space. That qualifies as never having someone in your backyard. It also has a large unfinished space with 20-foot ceilings that would make the perfect indoor basketball court, squash/handball court, or a real stadium-style theater. 

Recently, the Wolfe Team at Fuller Sotheby’s International Realty had the Phipps Mansion for sale and that went under contract right away. Obviously, that historic landmark more than qualifies as a unique property, but emphasizes that even in this market there are buyers for luxury properties particularly if they are unique. 

There are lots of stories around Colorado about unique properties. Feel free to drop me a note about yours and I might just write about it. 

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost 

Click here to Get started searching for YOUR Colorado Dream Home. 

http://coloradodreamhouse.com/featured/property.php?id=9 This striking Tuscan-style four-bedroom, six bathroom, 7270 square foot mountain home enjoys breathtaking views in the Genesee park area. Perfectly echoing the surroundings, just the right touch of natural stonework and wood accent both the exterior and interior of this home. You will be more than impressed by the professionally decorated finishes throughout; the Sellers have spared no expense to make this a true show home.

Two enclosed, heated patios, one with a stainless steel gas grill, mini refrigerator and keg cooler, greatly increase living space allowing you to bring the great Colorado outdoors, in.

Take the virtual tour at http://www.youtube.com/watch?v=YPK4lvmt3A0

http://www.coloradodreamhouse.com/index.php/news/ More and more real estate transactions are falling apart these days over inspection items. Just 5 years ago very few deals fell apart over inspections items. What happened? Did all of the homes in the US fall into disrepair in five years? I think not. The difference between 2005 and 2010 is “perception.” To find out more watch this week’s market update with Fuller Sotheby’s International Realty Agent Dan Polimino.

Check out the video at http://www.youtube.com/watch?v=NkAiJGRnIC0 

Click here to Get started searching for YOUR Colorado Dream Home.

The most dreaded part of applying for a mortgage is all the paperwork. Mortgage documentation requirements are more stringent than ever and every "T" must be crossed and every "I" dotted. Fortunately, at this point, there is no truth to the rumor that you and your pet's blood type are required to get a home mortgage. Low doc and no doc loans no longer exist. If you can not prove your income, assets, etc you will not get a loan. 

A competent mortgage originator will look at your individual situation and see if he can minimize the pain. An example would be a salaried borrower with one job. In this case, W-2's would probably be sufficient and the borrower would not need to furnish tax returns. Make sure the information is legible and complete. When a bank statement is requested, it means the complete bank statement and not just the front page.   

Your mortgage originator does not need a history lesson on how things were done when you applied for a loan five years ago. While your friends mean well, if they have never been in the mortgage industry, they are confusing you and wasting everyone's time. I had a client who had some unusual, and unworkable, ideas about a purchase mortgage.   I tactfully asked where these ideas were coming from. She said she had a friend who was in the oil industry - they worked at a gas station - but "spent a lot of time on the web"! 

If you will be out of town, let the loan officer know as soon as possible. The mortgage industry has not embraced electronic signatures. While you may be able to have documents faxed or emailed to you when you are gone, the printing costs may be frightening. With loan packages running over 30 pages, and hotels charging $2.00/page to receive or send a fax, do you really want to spend $120 because you did not plan?   

Help your lender help you. Your lender should be committed to providing the best service possible to make the process as fast and painless as possible. Remember that mortgage originators hate to bother clients but need the information to close the loan.   The sooner you provide the information, the sooner you can close. And look forward to something pleasant, like a root canal.  

Chip Allen

Crestline Mortgage Bankers

A Division of Universal Lending Corp

Direct: 303.947.2109

Fax: 303.987.0676

Loanchip@hotmail.com

Your Lender for Life! 

When people you care about need a mortgage,

for purchase or refinance, please do not keep me a secret. 

Click here to Get started searching for YOUR Colorado Dream Home.

I have often talked about the battle between buyers and sellers in today’s real estate market and I don’t want to badger the point any further, but I think that the problem has now spread to the realtors.  I think today’s realtor gets up every morning and puts on their proverbial fatigues and helmet then heads out the door to what to do what he or she perceives to be “going to war.” 

Today’s realtors are stressed out more than ever. The pressure to sell homes, sell them quickly, and sell them in a “not so hot market” has never been greater. Talking with agent after agent each day, I have concluded that they are getting sucked in the toxic dance that has been happening with buyers and sellers. I have a short story that illustrates this point well. 

I called an agent inquiring about putting an offer in on behalf of my buyers on his listing. On the phone he was charming, helpful, eager, and it sounded like it would be pleasant to do a transaction with him. We put the home under contract with his sellers and my buyers and the agent went from Dr. Jekyll to Mr. Hyde. During the subsequent weeks while we were going through inspection, appraisal, and amendments he was defensive, uncooperative, and combative to say the least. I got to thinking why? Why are more and more agents finding it so hard to get along? Don’t get me wrong, it’s ok for an agent to be a hard negotiating advocate for his or her clients, but this isn’t war. The only explanation I could come up with is, “it comes from the top down.”  We clearly have a trickledown effect from the sellers to agents, buyers to agents, and brokerage firms to agents. The mood of the country is essentially setting the mood of all parties involved. 

Back to the story: We ended up closing deal and the buyers got the home they wanted, but it wasn’t remotely smooth. It caused a lot of unnecessary trouble and stress for my buyers and all because the listing agent had a mindset of “who wins, who loses, and who gets their way.” It could have all been avoided. 

What’s the moral to the story? It’s three-fold: 1) The economy has put a lot of people in a bad mood, but as agents, buyers, and sellers we need to find a way to rise above that. 2) Buyers and sellers need to understand that in most cases agents want to do a great job for them. Beating them up (figuratively) is not going to help. 3) The story above just underscores how valuable a truly good agent can be. It can make all the difference between a smooth and pleasant transaction and one that is a Nightmare on Elm Street. 

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost

Click here to Get started searching for YOUR Colorado Dream Home.

http://www.coloradodreamhouse.com/index.php/news/ Two things stop more people buying from purchasing a home more than anything else…down payment and credit score. In this week’s market update Dan Polimino tells us that there is help for people who need down payment assistance and how anyone can easily clean up their credit. To find how you can get money to buy a home or how to clean up your credit watch this week’s market update with Fuller Sotheby’s International Realty agent Dan Polimino.

Check out the video at http://www.youtube.com/watch?v=wmMpAbE2y7o

Elizabeth Duke, a governor on the Federal Reserve board, reported last month that credit for both consumers and businesses continues to tighten. Banks tighten credit by raising credit score requirements, reducing credit limits, and/or increasing requirements for "skin in the game". "Skin in the game" refers to a larger down payment for a mortgage or car loan, or increased collateral for commercial loans. For a variety of reasons both strong and weak banks are cutting back on lending. An uncertain economic outlook as well as concerns about government intervention are commonly cited. 

What can you do?

The importance of a good credit score can not be overstated. The higher your credit score, the better your chances of getting any type of loan, as well as a lower interest rate. Check your credit score to see if any erroneous reports are pulling your score down. Be sure to pay your bills on time and keep revolving credit balances as low as possible. Being too close to your credit limit will have a negative impact on your credit score.  

Consumers are reporting more flexibility and better results by using credit unions for credit cards. A mortgage banker with several different investors has more options for a mortgage than a bank. If a bank or credit union turns you down for a car loan see if the auto dealer can help. Like a mortgage banker they often have multiple sources for financing.

Check the financial rating of a financial institution at www.bankrate.com. If a bank has a five star rating they are in a better position to lend than a bank with a one star rating.

Always interested in your comments or questions.

Good luck,

Chip 

Chip Allen

Crestline Mortgage Bankers

A Division of Universal Lending Corp

Direct: 303.947.2109

Fax: 303.987.0676

Loanchip@hotmail.com 

Your Lender for Life! 

When people you care about need a mortgage,

for purchase or refinance, please do not keep me a secret. 

What changed? Well it’s certainly hasn’t been because there are more jobs, but I can point to a few things that helped: 

<!--1)  The tax credit finishing up at the end of April brought in a frenzy of business at the 11^th hour. It was crazy for a few weeks at the end of the April. Since Uncle Sam was not extending the credit, more people realized the urgency to buy now.

<!--2)  While unemployment is not reversing itself for the moment, I do think it has stabilized, marked by a few good months of positive job growth. This instilled some confidence in people to start spending money again. Jobs are the one area that can turn the entire economy around and prevent a double dip recession. Many large corporations are flushed with cash so the question now is, will they hire employees and expand or will they pay it out to shareholders?

<!--3)  Pent up demand! It’s a term we have used a lot over the last 18 months, talking about the need and demand by people to buy new homes. I have said all along in this column that as realtors, we could feel the pent up demand to buy homes; we just did not know when it would shake loose. It started this summer.

<!--4)  Finally, while new construction is not booming around the country it is doing ok here in Colorado. I know many builders that have started new projects, created new price points, new marketing strategies, and new alliances and as a result are doing pretty well. It’s far off from where we used to be but its start.

The only question that remains is, “Can we keep it going?” I hear the analysts talking every day about the chances of a double dip recession. I don’t have a crystal ball to know one way or another if that will happen. I do know this market is fragile to say the least and we can all hope for the best.

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost

Click here to Get started searching for YOUR Colorado Dream Home. 

http://www.coloradodreamhouse.com/featured/property.php?id=13 Amid beautifully landscaped grounds and canopy trees, this stunning stone residence radiates Old World elegance and charm. Elegantly designed and spacious rooms, wide-planked walnut floors, a large gourmet kitchen, and a two-story family room with a stone fireplace are just some of the architectural elements designed to create an atmosphere of warmth and sophistication. 

Among the plethora of amenities are a Cherry wood study, a sumptuous master suite, three additional bedrooms, six baths and an enormous exercise room. In addition, a sensational children's retreat offers a special spot for family enjoyment. The covered terrace with a cozy fireplace, and a large lawn area for evening gatherings, complete the package. Truly a distinctive offering in a desirable location, this elegant home is timeless in design and detail. 

Take the virtual tour at http://www.youtube.com/watch?v=qzuJsTLJWkU

http://www.coloradodreamhouse.com/index.php/news/ In this week’s market update Fuller Sotheby’s Real Estate Agent Dan Polimino tells us that buyers coming from the East or West coast are in for a shock when buying a home in Colorado. Colorado is one of the first states to experience the recovery in the housing market and as such buyers from the east and west coast are surprised they are having a tough time getting 30, 40 and 50% off the sale price. Colorado is not California or Florida when it comes to real estate so buyers better have a different mindset. To find out more about why the housing market is better in Colorado, watch Dan Polimino and this week’s market update.

Check out the video at http://www.youtube.com/watch?v=AQd3rQx8a7U

A cash-in refinance is when the new mortgage is smaller than the existing mortgage and the homeowner brings cash to the closing table. In contrast, a cash out refinance is where the old mortgage is less than the amount of the new mortgage and the borrower receives cash back. Freddie Mac has estimated that almost one third of its mortgages today are cash-in refinances. 

The strategy is to make your mortgage work harder for you. Savvy borrowers are doing this to: 1) eliminate mortgage insurance, 2) avoid the higher rates on jumbo loans, or 3) a loan to value issue will not allow them to payoff the old loan in full.   

Like any refinance, you and your mortgage professional should do the math. With a $300,000 mortgage, the pure interest rate savings would be about $275 per month. Do not look solely at the change in the monthly payment as you might be adding on to the life of the loan. I have seen my clients continue to make the same payment to payoff their mortgage faster, put the savings into retirement or savings accounts, or payoff those evil credit cards. 

As always you should consider how long you intend to stay in the house to make sure you recapture any costs and still have adequate liquidity. Utilizing cash from a CD or savings account that is paying 1% to eliminate a much higher interest rate is a safe way to improve your financial situation. 

As always, interested in your thoughts. 

Best, Chip 

Chip Allen

Crestline Mortgage Bankers

A Division of Universal Lending Corp

Direct: 303.947.2109

Fax: 303.987.0676

Loanchip@hotmail.com 

Your Lender for Life! 

When people you care about need a mortgage,

for purchase or refinance, please do not keep me a secret.

A year ago, I wrote that “there has never been a bigger gap between a buyer and seller than what we seeing in the current market place.” I wish I could report that a year later, the gap has closed significantly, but it hasn’t. In some respects, it even got worse because in the lower price ranges, it has become a sellers’ market and they are looking to turn the tables on buyers.

I am not sure what it is; maybe the strain of the economy keeps everyone in a foul mood but it seems that one transaction after another pits the buyer against the seller in an adversarial war. The simple fact is that the seller distrusts and doesn’t like the buyer, and the buyer distrusts and doesn’t like the seller. As the agent, we are stuck in the middle, attempting to be the peace maker or referee between the two sides. Let’s just assume for a moment that we can get a buyer and seller together on price and it’s under contract. One would think that the acrimony would end there, but really, it’s just the beginning.

Next comes the inspection where they argue, haggle over inspection items or even the wordings of the inspection objection. My all-time favorite is a fight between the buyer and seller about matching sink stoppers in the master bath. Discussions, emails, and endless phone calls on why there are not two garage door openers or fights over $200 dollars. Why? So the buyer or seller can say or feel like they won the battle and other guy lost. 

This is not about winning and losing and or how much you can stick it to the other guy. I am not naïve. I understand that we are living in an opportunistic time period, but is it possible to do it with civility, respect, and without all the acrimony?

I was talking to some of fellow colleague in preparation for this topic to find out if they were experience the same enormous discord between their buyers and sellers. Everyone to a man and woman said yes, but some told me not write this column because it would go through one ear and out the other. Maybe they are right and no one will pay attention to this column and it will be business as usual. I hope not.

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost

http://www.coloradodreamhouse.com/featured/property.php?id=1 This wonderful home in Highlands Ranch is on the market for the final four weeks. This five-bedroom, four bath, 3800 square foot home rests just steps away from a quiet greenway path, and RedstoneElementary School. With new carpeting on the main floor, fresh paint throughout, new exterior paint and a finished basement, this home is ready immediately. Three bathrooms, a powder room, and a three-car garage make this space a joy to live in. The cul-de-sac location next to the green belt makes it private with plenty of space for the kids to play.

Take the virtual tour at http://www.youtube.com/watch?v=NTDQcRiD1cg 

http://www.coloradodreamhouse.com/index.php/news/ In this week’s video market update Fuller Sotheby’s International Realty Agent Dan Polimino says even in a down market there are still buyers for unique luxury properties. Dan highlights a few of the properties he feels are ultra-unique to Colorado. Find out what is the cream of the crop watch this week’s market update for Denver Colorado with Dan Polimino. 

Check out the video at http://www.youtube.com/watch?v=Gxwr-zNiOXE 

So, you’ve exercised your rights as dictated by the FCRA and disputed some inaccurate information on your credit report. Statistics show that 80% of credit reports contain inaccurate information. Disputing these inaccuracies is your legal right and is encouraged by the Federal Trade Commission and consumer groups. But now you’ve applied for a mortgage and your lender is telling you there is a “problem” because you have done this and it could cost you your loan. 

The dispute was valid, so why should this be an issue? 

Fannie Mae’s underwriting software flags tradelines listed with a dispute comment. The application is sent back to the lender to determine the validity of the dispute. Unless the dispute remark can be removed at the bureau level the loan would have to go through a manual underwriting process. 

The problem is that getting these remarks removed can be a difficult process. If they are not removed the loan will have to be manually underwritten, which is a lengthy labor intensive process. In some cases it causes the loss of the loan. 

According to Fannie Mae spokesperson, Amy Bonitatius, “Fannie Mae’s eligibility requirements do not prohibit the delivery of a loan to Fannie Mae where the borrower has dispute information on their credit report. In order to protect borrowers from adverse impacts resulting from inaccurate reporting data, our policy requires the lender to determine and document whether or not the dispute information is accurate and underwrite the borrower’s credit accordingly.” 

As for Freddie Mac, according to their spokesperson, Brad German, their policy towards disputed accounts is similar to Fannie Mae’s. “The presence of dispute tradelines will affect the system’s determination of a borrower’s credit reputation and its decision to accept the application or refer it to the lender for manual underwriting.” This means it may be possible for an application to make it through Freddie Mac’s automated approval system and not be returned due to disputes. However, the criteria for determining this is “proprietary” so there is no way to predict what will or will not be returned. 

Why all the fuss about disputed accounts? For years many credit repair agencies have been trying to trick the system by disputing items on a credit report for the borrower. This would tag the dispute remark causing the item to be excluded from the scoring model.  This is not always the case anymore. According to Fair Isaac, if a disputed account is derogatory, it will “most likely” still be factored into the scoring model, depending on the nature of the dispute. In the case of accounts in good standing, some information may be excluded from the scoring model. Because their systems are also proprietary they won’t say which items will or won’t be excluded or what would constitute a dispute that would eliminate it from the scoring model. Because a negative account can seriously impact a credit score, having it removed could falsely boost a borrower’s credit score. Fannie and Freddie have implemented this process as a way of protecting themselves from fraud. 

What’s the answer? Again, getting the disputed remark removed is the best option. While not easy, it can be done. Currently, Experian will accept a letter from the borrower stating the account is no longer in dispute. However, Equifax and TransUnion require a letter directly from the creditor clarifying the dispute or agreeing to its removal. Loan Originators can use the Rapid Rescore service available through Advantage Credit Inc. to expedite this otherwise lengthy and frustrating process. 

Fannie said recently they are reviewing their policies around this issue, but this could take a very long time. In the meantime, if a borrower has a legitimate dispute regarding an item on their credit report, it might be wise to suggest they wait until after the loan process to dispute the account. Otherwise it might severely delay or completely halt their refinance or purchase. 

In a perfect world, maybe someday, Fannie, Freddie and Fair Isaac will all have a meeting of the minds and create the perfect system so the consumer won’t be caught in the middle. Yes, in a perfect world……. 

Chip Allen

Crestline Mortgage Bankers

A Division of Universal Lending Corp

Direct: 303.947.2109

Fax: 303.987.0676

Loanchip@hotmail.com  

Your Lender for Life! 

When people you care about need a mortgage,

for purchase or refinance, please do not keep me a secret.

It’s the end of the July and in a few short weeks the summer real estate season will begin to slow down. Right around the second week of August, things begin to slow down as parent and children try to sneak in one more vacation before school starts. Then once school kicks in and people get back into their normal routines, real estate will pick up again. If you’re a seller, don’t be surprised if you see a dip in your showings between the second week of August and the second week of September. 

The question for buyers is: did you take advantage of the historically low prices and low interest rates this summer? Here are a few things I saw this season: 

1)      Unbelievably low prices. I am going to go out on a limb and I’ll eat my words if I wrong, but I think it’s safe to say that values have never been this low and we may never see this again. 50% off some homes is not part of a regular 10-year real estate cycle. This happens once in a lifetime.

2)      Sellers in the 200-400 price range turned the tables on buyers. Sellers understood that the bottom of the market had come and gone, they stayed firm on their prices, and in most cases got full asking price.

3)      Lower than normal inventory. The words “I can’t find a home for my buyers” was spoken by more Realtors this past summer than in the last three years.

4)      Mistakes, Mistakes, Mistakes. More than one buyer decided to do nothing rather than make a decision this past summer thinking that the home would still be on the market whenever they were ready. Those buyers were disappointed to find out that their number one choice had sold. That trend of “I don’t have to make a decision today, tomorrow or in a month” is quickly coming to an end for buyers. 

The good news is I think we are poised for good fall. It was fall of last year when we first began to notice the turnaround in the economy. Right around September, showings started to pick up and we had one of our best fall’s selling seasons in some time. I expect the same to be true for this year. The fall selling season goes from mid-September through mid-November. 

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost 

http://www.coloradodreamhouse.com/index.php/news/ Many HOA’s are in financial trouble because of foreclosures, short sales and the economy. The HOA’s are passing along higher fees and special assessments on to current home owners within a community. Many times it’s hard to find out about these problems when a buyer is under contract with a home in a HOA community because there are no meeting notes about the issue. Why are there no meeting notes or documentation? To find out watch this week’s market update with Fuller Sotheby’s International Realty Agent Dan Polimino.

Check out the video at http://www.youtube.com/watch?v=MrZrAB2RycM

Been making your credit card payments on time, careful not to exceed your limit, and been shocked when the credit card company cuts your limit or closes the card without warning?

This is occurring more and more because some companies are getting out of the credit card business or trying to limit risk. Even cardholders with strong (720 +) credit scores are having their limits cut or the account closed if it is inactive.

The impact on your credit score can be devastating. Your credit utilization ratio- the amount of debt you owe divided by your available credit- is responsible for about 30% of your credit score. A consumer could easily see a score drop of over 50 points. Worse yet would be if you were on vacation only to discover you did not have the available credit you were counting on. Cardholders should check on the available credit every billing cycle and read every piece of mail sent by their credit card company even if it appears to be junk. 

What should you so if your limit is cut? Call the issuer and see why they did it. It is possible the decision was based on erroneous information from a credit bureau. Ask to speak to a supervisor. Try applying for a credit card where you bank or with your mortgage holder. Credit Unions have a reputation for being more reasonable when it comes to credit cards. 

Please let me know about your success or horror stories. 

Best, Chip  

Chip Allen

Crestline Mortgage Bankers

A Division of Universal Lending Corp

Direct: 303.947.2109

Fax: 303.987.0676

Loanchip@hotmail.com  

Your Lender for Life! 

When people you care about need a mortgage,

for purchase or refinance, please do not keep me a secret.

Recently, my business partner called and told me that he was being interviewed by a magazine and one of the questions was, “Why move to Denver?” Great question in fact, considering all of the marketing and social networking I do, you would think that I may have gotten that question one or two times. Honestly, I don’t think a client or even a potential client has ever asked me. So I started to jot down reasons why someone might be attracted to Denver. This is not by any means a complete list, but just off the top of my head. I would love to hear your reasons why someone would love to live in Denver so feel free to email me at the address at the bottom of the page. 

1)      Number one has to be the sunshine. Over 300 days of sunshine every year is not only a plus, but it’s a morale booster. Even when it’s cold and snowy, a sunny day can do wonders for people’s frame of mind.

2)      The Mountains. It’s our playground and there is a lot to do there from camping, hiking, mountain biking to fishing and hunting. If you can’t have the oceans, at least have the mountains.

3)      Plenty to do. The Denver Nature and Science Museum, The Denver Zoo, The Wildlife Experience, Water World, Elitch Gardens, The Botanical Garden, Red Rocks, Garden of the Gods, and many other hot spots are all must sees when you live in Colorado

4)      Sports, Sports, and more Sports. The Denver Nuggets, The Colorado Avalanche, The Colorado Rockies, The Denver Broncos, and the Colorado Rapids are some of the best major league sports teams in the nation. Not to mention all five teams have relatively new venues that make the spectator experience 100 times better. Oh and don’t forget our major universities like the University of Colorado, Colorado State, and The Air Force Academy.

5)      Shopping. If shop ‘til you drop is your motto, then Denver is the place to do it. The 16^th street mall is one of a kind, Park Meadows Mall, Flatirons Mall, Cherry Creek, and the new Southlands and are just a few of the best.

6)      Healthiest Cities. Denver and Colorado Springs ranks in the top 5 of the healthiest cities in the nation year in and year out from national health and fitness magazines. Coloradans love the outdoor and stay active all year long which is why we have so many healthy people. 

There is just not enough room in this column to talk about everything Denver has to offer but this should peak some interest. I encourage you to send me your list and we’ll pass it along to all those who are thinking about making this great state their home. 

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost

We usually think of a reverse mortgage as a way to help people over 62 use the equity in their homes to upgrade their quality of life.  But what if they want to buy a new home?

Last week I spoke with a retired couple who want to downsize to a ranch style home because their tri-level home is too big and has too many stairs.  The current house payment is almost $1,500 a month with over 20 years before it is paid off.  Even with excellent credit and ample cash reserves, their income is not sufficient to qualify them for the loan they needed.

The solution is a reverse mortgage for a purchase.  Equity in their present home is estimated to be over $100,000.  This will be used for the down payment and closing costs on the new home.  The down payment is calculated based upon the age of the borrowers. On the new home they only need to pay property taxes and insurance.  Quite a drop from the $1,500 they were paying! 

Many of the guidelines for a purchase reverse mortgage are the same as if a homeowner is doing a reverse mortgage on their existing residence.  Reverse mortgages are only for a primary residence, as long as the borrower lives in it.  The property may not be a second home or rental.  Credit and income ARE NOT considered.  The borrower(s) must take an approved counseling class. 

With the current mortgage market madness it is refreshing to provide borrowers with a mortgage that is better for them than what they originally wanted. 

If you have any questions or know anyone who might benefit from this, let me know.  No cost or obligation to see if I can help. 

NEXT WEEK: Credit Card Limit cut?  

Chip Allen

Crestline Mortgage Bankers

A Division of Universal Lending Corp

Direct: 303.947.2109

Fax: 303.987.0676

Loanchip@hotmail.com  

Your Lender for Life! 

When people you care about need a mortgage,

for purchase or refinance, please do not keep me a secret.

Tamrick Homes is a small builder that did not know if they would survive the real estate crash. In 2006, they started a development that was planned for 120 homes in Dacono, Colorado which is a southern Weld County about 20 minutes from downtown Denver and just south of Longmont. At that time, many builders - large and small, had the cities of Dacono, Firestone, and Frederick on their radar. People were moving there en mass because of larger lots, larger homes, wide open spaces and really affordable prices. Tamrick jumped into the mix and had just cleared phase one of the development. Infrastructure was in place and they started building homes. The plan was simple develop and build the first 40 or so lots in Phase One then start on Phases Two, Three and Four. The problem was that the economy had other plans. After selling the first half dozen homes they built it was pretty quiet in Eagle Meadow Estates. They tried everything to entice and attract buyers, but there were none. In fact, there were some pretty dark days where Tamrick thought they would be another builder casualty from the great crash of ‘08 and ‘09. 

Credit the banks that held the notes on Eagle Meadow Estates. They worked with Tamrick Homes to keep the project alive and keep it out of foreclosure. Tamrick did their part and came up with a new game plan to start marketing a product line of homes that appealed to a wider audience at a more affordable price. They did creative financing and at the beginning of this year, there was some light at the end of the tunnel. The banks saw that the economy was coming around and buyers were showing some interest in the homes there. Lo and behold, the banks offered Tamrick money to build their first spec home in 18 months. Fast forward to today and Tamrick is busy building homes every month in Eagle Meadow Estates and all are under contract. 

This is a fine example of a bank and a builder working together to get through the tough economic times. Tamrick is going to be fine and will make it through, but many builders, even the big, ones did not. I would like to say that banks have gotten the message on the need to work with people and companies to find solutions, but I am going to reserve those comments for now until I hear or see more stories like Eagle Meadow Estates. 

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost 

http://www.coloradodreamhouse.com/index.php/news/ A few weeks ago Dan Polimino told people that the relationship between buyer and seller had never been worse. Now comes along some buyers from Virginia, and he has to eat those words. What happened with the buyers from Virginia? How did they prove Dan wrong, and why is he eating his words? To find out watch this week’s market update with Fuller Sotheby’s International Realty agent Dan Polimino. 

Check out the video at http://www.youtube.com/watch?v=5_GsL3Ugl8c 

http://www.coloradodreamhouse.com/featured/property.php?id=0 As you drive up the private lane through a forested Colorado Hillside to the gated entrance of this mountain estate you will notice the cares of the day quickly disappearing and begin feeling the serenity of this one-of-a-kind mountain retreat. Located a short 26 miles or 25 minutes from downtown Denver, but a world away from the hectic city lifestyle. Situated on just under 7 acres with a 10,292 square foot main house, a 1052 square foot guest house and new 2,080 square foot carriage house where your nearest neighbors are Elk and Deer yet you are only five minutes to shopping and restaurants. Expansive views of snow capped peaks are the icing on the cake of this one-of-a-kind exclusive estate.  

Take the virtual tour at http://www.youtube.com/watch?v=C097w2raSo8

A divorce mortgage is a refinance transaction that removes the departing spouse from the current debt secured by the home. The spouse retaining the property refinances the loan that is in both parties name with a loan in their name alone. 

A common misconception is that the departing spouse is no longer liable for the mortgage if they sign a Quit (not quick) Claim Deed to surrender their interest in the property. Even if the departing spouse no longer has an ownership interest in the property they are still liable for the mortgage unless: the mortgage holder agrees to release them from liability, or the loan is paid off. 

In a divorce mortgage the departing spouse may receive cash for their portion of any equity in the home, or simply benefit by being relieved of future financial obligation on the property. Outcome will vary depending on individual circumstances.

Borrowers could of course contact the existing mortgage holder and see if they could requalify without the departing spouse. If you try this approach be very careful that you will qualify before you pay any fees other than a credit report. You do not want to spend  hundreds of dollars on an appraisal to find out you can not get a loan because of income, credit, or other issues. 

Interest rates continue to drop. Last week saw the lowest interest rates for fixed mortgages since March, 1956. Let me know if you would like a current quote.

Remember, interest rates float down and JUMP up!

Chip Allen

Crestline Mortgage Bankers

A Division of Universal Lending Corp

Direct: 303.947.2109

Fax: 303.987.0676

Loanchip@hotmail.com  

Your Lender for Life!

When people you care about need a mortgage,

for purchase or refinance, please do not keep me a secret.

Last month, I received an email from a reader of this column telling me that the problem of “keeping up with Jones” was one of the main reasons we got into real estate trouble in this country. What he is saying, if you are not familiar with the term “keeping up with Jones,” was that some people over bought or bought too expensive of a home for their income level just to keep up with family, friends, neighbors, or colleagues who had similar size homes. Still, others may have been ok with that level of mortgage payment had the economy not fallen, but when things went bad they were not able to sustain those commitments. He also went on to say that the real estate agents were partially to blame for pushing people into homes they could not afford.

I agree that this did happen and some real estate agents did push people into higher priced homes, but I am fairly sure that the vast majority of those buyers went willingly. Yes, some people did saddle themselves with too high a mortgage payment and still, others got approved for loans that should have never been allowed to buy a home. I don’t have the stats and I am not sure if this encompasses the main reason why real estate fell and fell hard. What I am sure of is that I can point the finger to at least 10 different directions that all bear some responsibility.

Here’s the good news part of this story. Since this occurred, I have seen remarkable progress. Today’s buyer is more aware of the impact of their mortgage costs than ever before. I see a more cautious buyer, a more conservative buyer, and a more informed buyer. I see very little “keeping up with the Jones’” mindset and see more and more people telling me that they do not want to be married to their home. I see more people downsizing than upgrading, and more people talking about a quality of life than things they need to buy. As far as real estate agents go, a lot of bad apples are no longer in the business and the real professionals are still here and doing well.

In summary, was the real estate crash bad? Yes, it was and a lot of people got hurt, lost homes, jobs, and families. Did this country learn its lessons about debt, materialism, greed, and what’s important in life? I am not sure; only time will tell, but I like the preliminary results. 

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost 

http://www.coloradodreamhouse.com/index.php/news/ Once upon a time Colorado was the number one hot spot for foreclosures. Today they are harder to come by and it’s even harder to find a good one.  Fuller Sotheby’s International Realty Agent Dan Polimino is advising some his buyers to actually avoid foreclosures. To find out why watch this week’s video market update with Dan Polimino.

Check out the video at http://www.youtube.com/watch?v=YnVLmlorXpw

You do not have to be Bill Gates to get a mortgage, however, mortgage requirements have tightened up considerably.  Unless you are a vet applying for a VA mortgage, 100% financing is gone.  Stated income programs, programs where income was not verified, have gone the way of dollar a gallon gasoline.  It might come back someday, but I would not count on it. 

Factors that lenders focus on include: income to debt ratios, stability of income, down payment, and credit scores.  While these guidelines have been tightened up significantly people are still getting mortgages to purchase or refinance.

FHA is the most flexible of current mortgage programs.  You may still purchase a home with a down payment of 3.5% of the purchase price.  FHA is also more lenient on credit scores, and other requirements, such as reserves.  Reserves are the cash or other liquid assets a buyer has after the closing.

If you have been turned down for a mortgage, find out why.  The problem may be fixable with a little work, or it could be you have an incompetent lender.  It never hurts to get a second opinion.

Next week: Divorce mortgages

Chip Allen

Crestline Mortgage Bankers

A Division of Universal Lending Corp

Direct: 303.947.2109

Fax: 303.987.0676

Loanchip@hotmail.com 

Your Lender for Life!

There is a saying in business that 20% of the people you deal with create 80% of your aggravation. I believe this to be true because I have seen it time and time again in my own life. The question is: what do you do with the 20% that you consider as toxic people? Answer…you remove yourself from doing business with that 20%. How does this pertain to real estate? Simple: real estate is all about relationships. As an agent, do you click with the buyer or seller? Does Mr. and Mrs. Seller or Buyer click with the agent? If you are not all on the same page and do not feel like you have a great relationship of trust and confidence, then you’re well on your way to a toxic relationship.

In these economic times, no one has the time, patience, money, or effort to continue to be involved with toxic people. Yet, we do it all the time. Each one of us puts up with someone else. Many of us have said over and over, “If and when this person gets out of my life, things will be a lot better.” Maybe you shouldn’t wait until that happens. Maybe you should cut the cord and your losses now and get back your sanity. Maybe it’s time to start saying goodbye to that 20% that creates 80% of your aggravation? I know what you’re saying, “Dan, it’s not that easy,” or “I can’t afford to do that,” or “I need that client,” or “I need that job,” or “I have come too far with this Realtor.” Listen, I am a firm believer that if you let go of that 20% of toxic people, you won’t lose anything, but gain everything. With a positive frame of mind, good people supporting you, having more time to think freely and creatively, and becoming a happy person will, at the end of the day, produce far more success than what you would have earned from that group of toxic people.

http://www.coloradodreamhouse.com/index.php/news/ Fuller Sotheby's International Realty Agent Dan Polimino tells us that when it comes to the Real Estate transaction buyers still don't get along with sellers and visa versa. Why is there so much animosity and what are the problems? Watch this weeks market update with Dan. Also Dan Polimino highlights this weeks home 995 Longbow place. http://www.coloradodreamhouse.com/featured/property.php?id=15

Check out the video at http://www.youtube.com/watch?v=sJ7hqt5wIAg

A reverse mortgage is a loan for homeowners over 62 who have equity in their homes.  The property must be the homeowners primary residence; not a second home or investment property.  It is called a reverse mortgage because the homeowner receives a check from the mortgage company instead of making a payment to the mortgage company.  A reverse mortgage may be used for either a purchase or a refinance of an existing home.

 
The money is tax free as it is proceeds from a loan and not considered income.  The loan does not have to be paid off as long as the homeowner lives in the home.  With a reverse mortgage the homeowner does not have to qualify for the mortgage or worry about credit issues.  The homeowner may use the funds for anything they desire: in-home care, remodeling, a new car, etc.

 
Homeowners are required to take a counseling class, prior to closing the loan, to make sure they understand all of the benefits and responsibilities of a reverse mortgage.  The program is designed for those who plan on staying in their homes for an extended period of time.  It is not meant for borrowers who plan on moving in the near future.  Homeowners may will the property to whoever they wish, but they may not change the title after taking out a reverse mortgage. 

 
A reverse mortgage is a non-recourse loan.  This means that the house pays off the loan, not the homeowner or heirs.

Is a reverse mortgage right for you?  That depends on your individual circumstances.  Feel free to call for a complimentary consultation.

 
Chip Allen

Crestline Mortgage Bankers

A Division of Universal Lending Corp

Direct: 303.947.2109

Fax: 303.987.0676

Loanchip@hotmail.com

Your Lender for Life!

I have recently been showing some relocation buyers around town who were looking for a nice single family home with acreage. Unfortunately, the areas they wanted to live in and the price point of the homes didn’t come with big backyards. This then brings up the inevitable discussion about how much land and home you get when you live on the East Coast. 

Yes, I know I am from the East Coast so I know and hear from relocation buyers all the time, “How come there are no backyards in Colorado?” My business partner Gary Lohrman once had a client in from the East Coast who quipped, “I expected to measure my land in acres, not inches.” Well put. 

Let’s assume one thing first before we get into the reasons why we have little yards. First, we are not talking about city properties. Even cities on the East Coast that were built on a grid like Denver and have small lots. What we are talking about is the difference in lot size for suburbs. 

Reason # 1 and I think you could have guessed this…MONEY! Yes, developers figured out that when they buy land, they should subdivide it into postage stamp size lots and build as many homes as possible on that land to increase their profit. This is not news to anyone which brings us to the question, “Weren’t developers on the East Coast interested in making money?” 

Answer: Yes they were, but a lot of development on the East Coast occurred prior to 1970 when land was not a premium like it is today, particularly in the outlying areas. Remember, there was a time when it was not cool to live in the suburbs so builders used large lots to lure people out of the city. 

Reason # 2. The California Influence. Right around 1970, builders around the country took notice of what was happening in California. Land was and has always been a premium in California and builders had to maximize their land with large homes on small lots in order to make a profit. Business was good and some of those builders brought their model to Colorado. Other builders in Colorado followed their lead and tada we have the large home with a blade of grass in the backyard. 

Since then, the trend has continued and proves to be a good business model for builders so we keep getting more of the same. There will always be some builders and I know of a few that will build on bigger lots at a reasonable price, but it will be in an outlying suburb to entice people to move there. 

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost

http://www.coloradodreamhouse.com/index.php/news/ This week we take a look at home values in Boulder, Colorado. For a long time people have thought that Boulder was insulated from price drops because it is such a special place to live and always seems to be in demand. That held true all the way through August of 2009. That was the peak for the average home value in Boulder at $429. Since then as you can see from the graph from Zillow.com, home prices have been falling in Boulder and still are dropping to an average of $410. To see how other communities and neighborhoods are doing like Niwot, Louisville and Superior click the link below.

http://bit.ly/9HxRX5

As always if you have questions or want to speak with me about buying or selling home in Colorado feel free to contact me at 303-522-1161 or dpolimino@fullerproperties.com. 

This beautiful home is nestled among the pines in Parker, Colorado. This 9,750 square-foot home boasts a beautiful open floor plan with 5 bedroom suites and 6½ baths is artfully woven together with old-world Mediterranean style. From first sight of the soaring cathedral ceiling of the Grand Entry, plenty of airiness and natural light distinguishes the spacious feel of this home and evokes a brightly genial atmosphere. This home is unique in the sense that it is built in a style to accommodate either the family with separate bedroom wings for the children or the empty nester / retiree looking for their final purchase in a home.

For more details check out http://www.coloradodreamhouse.com/featured/property.php?id=11 

Take the virtual tour at http://www.youtube.com/watch?v=fV59HuDQZP8 

http://www.coloradodreamhouse.com/index.php/news/  In this week’s market update Fullers Sotheby’s International Realty agent Dan Polimino talks about the activity in Denver the last two months and what he expects to see in June and July. Dan also begins a series taking a look at homes that are great deals in this market. To find out Dan Polimino’s best bargain this week watch the video market update for Denver Colorado.

Check out the video at http://www.youtube.com/watch?v=vy_aKOOj1wo

A common myth among people with an ARM (Adjustable Rate Mortgage) is that they can switch to a fixed rate mortgage when they see interest rates headed up.  This is like waiting to put on your seat belt before a traffic accident.  By the time you react, it is too late.  Remember that interest rates float down and jump up.

When looking at your ARM mortgage you should consider how long the current rate will last.  It might last for years or it might reset every month.  You need to examine your mortgage documents to know.  Factors to consider when analyzing your mortgage are: the index, margin, adjustment period, and caps.  Your interest rate will consist of the index plus the margin.  Common indexes are COFI (Cost of Funds Index), LIBOR (London Interbank Offered Rate), 1 year CMT (Constant Maturity Treasury), etc.  Margins can vary widely and must be analyzed individually.

ARM's always have "caps" that specify how much the loan can change in a given time period and over the life of the loan.  One ARM mortgage might have caps that limit the rate increase to 1% a year and 6% over the life of the loan, while another could change monthly with a ceiling interest rate of 14%.  The fact that your neighbor's ARM went up or down does not mean your mortgage will change the same way.

Feel free to call or email me with any questions or current rate quotes.

Next week: Reverse Mortgages

Chip Allen

Crestline Mortgage Bankers

A Division of Universal Lending Corp

Direct: 303.947.2109

Fax: 303.987.0676

Loanchip@hotmail.com

Your Lender for Life!

The other day, I was taking a glance at the recent MLS statistics and it jumped out at me the startling difference in stats compared to one year ago.

Let’s take a minute and talk about some key indicators in the real estate market and what the data from Metrolist tells us about the health of local real estate.

First, inventory has been stable and it’s been remarkably low. For at least the last 18 months, we’ve been hearing rumor after rumor from “industry insiders” that banks were getting ready to flood the market with a massive amount of foreclosures. I hear it and I hear it, but it doesn’t happen. We’re all grateful it hasn’t happened and as a result, if you take a look at inventory as of the date of this column, there are only 21,000 single family homes and condominiums on the active market. That’s low for this time of year and it’s only up 1% from this time last year. Conclusion: inventory is low, has remained low, and probably will stay low for a while which means less choices for the buyer and better prices for sellers.

Sold data is what we all want to know about and it gives us some of the best news of the all the numbers. Sold homes and condos are up 16% from last month and 23% from this time last year. Better yet, average days on market are down 7% from last month and 22% from last year. To top that, the average sold price rose 7% from this time last year.

There is good news with homes that are under contracts as well. Homes that are under contracts are up 12% from last month and 27% percent from last year. That 27% represents the most significant change in all of the market data.

Combine this information with the data that was released about positive job growth in March, April, and May and you start to have a good feeling about the recovery. There is pent up demand by home buyers and now we are starting to see those results. Remember, jobs and real estate are always the last indictors to come around for a recovering economy and with positive news in both sectors, maybe we are out of the woods.

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost

This is a mortgage without any closing costs added on to the loan or paid by the borrower. Examples of closing costs would be origination fees, discount points, appraisal cost, processing, underwriting fees, title insurance and recording fees. A mortgage where these costs are added in is not a true no cost loan.

How is this possible? With a no cost loan, the mortgage investor increases the interest rate to pay for the closing costs. In essence, the investor "pays for the party" instead of the borrower. For example, a borrower could obtain a thirty year fixed rate mortgage at 4.75% with $3,600 in closing costs and the same mortgage at 5.25% with no closing costs. The difference in the monthly payment would be $68 a month. Even before you consider the time value of money and possible tax consequences; it would take a borrower 5 years to break even. Most mortgage professionals will opt for a no cost loan when doing their own mortgage, unless it is a purchase and the seller is paying the fees.

The size of the mortgage not only effects how much you can save but the final rate and costs. The bigger the mortgage, as long as you stay under the conforming loan limits, the better the price.  Many of the costs for a mortgage, such as appraisal and underwriting, are basically fixed and do not vary with the size of the loan. While title insurance costs will increase with the size of the loan, a $200,000 mortgage will not cost twice as much as a $100,000 mortgage.

Next Week: Seduced by an ARM (Amazingly Risky Mortgage)?

Chip Allen

Crestline Mortgage Bankers

A Division of Universal Lending Corp

Direct: 303.947.2109

Fax: 303.987.0676

Loanchip@hotmail.com

Your Lender for Life!

Love at first sight only happens in the movies, right? Some believe it while some don’t when it comes to finding a mate, but what about when it comes to finding a home?

In today’s real estate market, would one be foolish to buy the first home they saw? Maybe not! There is no hard and fast rule about how many homes you need to see before making an offer. You could see three homes, find the exact one you are looking for, turn to your Realtor and say, “I don’t need to see anymore. Let’s make an offer on this one.” Somehow, over the last four to five years, we have gotten brainwashed into thinking that we need to see 40-90 homes before we can make an intelligent decision. That’s just hog wash. Chances are, after you have seen 20+ homes, they all start to look alike and you can’t remember which one had the main floor office versus the main floor master.

I have said it before and I’ll say it again. There is no perfect house, and if you find one that meets 85% or greater of your needs, then you’ve done well. Spending month after month and weekend after weekend looking for a home that meets 100% of your criteria is an exercise in futility. Many times, buyers fail to see the potential of the homes that they are looking at because they are in such a hurry to see what’s next on the list and what could be even better. I found that in life, sometimes we spend too much time looking for what’s better.

You may have looked at 1 home, 10 homes, or 100 homes and I bet for the people out there that have looked at 100, they came back to buy one of the very first homes they ever saw in their search. Trust your instincts when you are shopping for a home. If it feels right, it probably is and more shopping will only delay your purchase of that home. There is no shame in buying the first, second, or third home you’ve seen. In fact, I often say to my buyers after we’ve seen a home and they’ve had a positive response, “Is there any reason to see more or should we talk about making an offer on that home?” Remember what I always say, “Realtors are the only people meant to look at homes for the rest of their lives.”

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost

http://www.coloradodreamhouse.com/index.php/news/ This week we take a look at what’s happening with home prices in some parts of Colorado. Homes values in the State of Colorado are up 0.2 percent from this time last year, Colorado Springs is up 0.1 percent, Denver is up 2.3% and Fort Collins is up 1.4% overall. Those are good numbers and are certainly moving in the right direction. To look at other cities like Boulder or even other States like Nebraska and Arizona, click the link below.

http://bit.ly/djeVuC

If you have question about buying or selling home in Colorado feel free to contact me at 303-522-1161 or dpolimino@fullerproperties.com.

http://www.coloradodreamhouse.com/index.php/news/  In this week’s market update Dan Polimino tells us how anyone can get listings of homes sent right to their email inbox. It’s called an automatic email drip campaign and your local realtor should be able to provide it to you through their personal web site or the local MLS. To find out how you can receive emails of homes that you are looking for watch this week’s market update with Dan Polimino from Fuller Sotheby’s International Realty.

Check out the video at http://www.youtube.com/watch?v=0kuuIRiaTy4

Bad economic news in Europe is good news for American homeowners and homebuyers. Europeans, and other investors, are flocking to the safety of US securities causing the rates on mortgages to fall. Freddie Mac announced that mortgage rates have fallen to the lowest level of the year.

If you intend to stay in your home for less than a year it probably does not make sense to refinance. The old rule of thumb, that it does not pay to refinance unless you drop two percentage points, is worthless.

The correct way to analyze your mortgage is to compare the costs of refinancing against the pure interest rate savings. Eliminating mortgage insurance is an added bonus that should be included, if applicable. For example, if your pure interest rate savings and dropping the mortgage insurance saves $200 a month, and your total closing costs are $1,400, you would break even in seven months. Hard to find an investment in this day and age that will beat that!

Do not look solely at the change in the payment as that is deceptive. The reason is that you may be adding on to the life of loan. I have seen my clients refinance and the take the savings and apply that directly to principal. They have the flexibility of a lower payment, if needed, and the option of paying the mortgage off sooner and saving tens of thousands of dollars.

Remember that interest rates float down and spring up. You need to check sooner, rather than later, if you want to take advantage of this.

Next time: What is a zero cost loan?

Chip Allen

Crestline Mortgage Bankers

A Division of Universal Lending Corp

Direct: 303.947.2109

Fax: 303.987.0676

Loanchip@hotmail.com

Your Lender for Life!

Seventy-seven percent of home buyers had a home inspection done last year. Why wouldn’t everyone want a home inspection? An example would be a contractor doing a fix and flip. The contractor may have already gone through the home, felt that it was structurally sound, plans on gutting it, and therefore does need a home inspection. The rest of us get a home inspection and it’s always a good idea to do so, but there are some tips to making sure you get a good one.

1)   Always hire a licensed inspector. At least you will be able to have some comfort knowing that they had to pass a core competency test on home inspection to conduct their trade. You can look for licensed professionals with the ASHI (American Society of Home Inspectors) badge or NAHI (the National Association of Home Inspectors) license.

2)   Always ask upfront about costs and shop around. Find out what is included with a home inspection and what’s not. In Colorado, most companies charge an extra fee for a radon test. Some states don’t have an issue with radon so it’s not even a part of their services. Also, ask if their services and inspection carry any type of guarantee.

3)   The average inspection for a home should take a couple of hours and even longer for large homes or older homes. Ask the technicians when you will get their report, and how it is delivered (fax, mail, email).

4)   Always be present at the inspection. Most inspectors don’t want you to follow them around from room to room. Most prefer to do their job quickly and efficiently and then sit down with you at the end to discuss what they have found. That’s also the best time to break out your list of questions.

5)   Finally, if you have more questions after you receive your report, don’t be afraid to contact your inspector for follow up. One cautionary note: everyone wants to know how much things are going to cost to repair. Some inspectors will give you that advice, but most are going to tell you to get a written estimate from a tradesman. 

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and http://www.coloradodreamhouse.com/denverpost 

http://www.coloradodreamhouse.com/index.php/news/ This week we take a look at home values for Broomfield, Colorado. The highest home values we have seen for Broomfield were in November of 2006. Broomfield hit a high $263,000 on November 1st, 2006. Values steadily dropped until May 1, 2009 almost three years later to a low of $234,000. The good news is home prices are up from May of last year to an average price of $247,000 that’s an increase of $11,000 in one year or 5.4%. To find out more about Broomfield, your neighborhood or nearby cities like Louisville and Erie click the link below.

http://bit.ly/bAVUFB

If you have question about buying or selling home in Broomfield or any other city in Colorado feel free to contact me at 303-522-1161 or dpolimino@fullerproperties.com.

http://www.coloradodreamhouse.com/featured/property.php?id=1 This wonderful 5 bedroom, 4 bath, 3800 square foot home rests just steps away from a quiet greenway path, and Redstone Elementary School. With new carpeting on the main floor, fresh paint throughout, new exterior paint and a finished basement, this home is ready immediately. Three bathrooms, a powder room, and a three-car garage make this space a joy to live in. The cul-de-sac location next to the green belt makes it private with plenty of space for the kids to play.

Take the virtual tour at http://www.youtube.com/watch?v=NTDQcRiD1cg

http://www.coloradodreamhouse.com/index.php/news/  In this week’s market update Dan Polimino tells us why it’s not a good idea to buy the highest priced, most improved home on the block if you think you might sell it one day. Dan details a buyers decision to buy the most expensive home in subdivision A or the least expensive home in subdivision B. If this is not going to be your last home Dan says buy the least expensive home in subdivision B. To find out why watch this week’s market update with Dan Polimino from Fuller Sothebys International Realty.

Check out the video at http://www.youtube.com/watch?v=ehnSHIccjsw

The market value of condos may be further depressed by new Homeowner Association (HOA) requirements set by FHA. FHA loans are the most popular mortgage product for condos because of the combination of low down payment and easier qualifying. Other mortgages may be available for HOAs that are not FHA approved, however, they have: 1) higher rates; 2) higher down payments; 3) more stringent qualifying guidelines.

Implemented in February, the HRAP/DELRAP (HUD Review and Approval Process/ Direct Endorsement Lender Review and Approval Process) program sets out new guidelines for projects to be eligible for FHA financing. Among the requirements are:

* the HOA may not have 15 percent of the homeowners delinquent on HOA dues
* one investor or entity may not own more than 10 percent of the project
* at least 50% of the project must be owner occupied
* More requirements apply. Call 1- Chip Allen below for more information.

Chip Allen
Crestline Mortgage Bankers
A Division of Universal Lending Corp
Direct: 303.947.2109
Fax: 303.987.0676
Loanchip@hotmail.com
Your Lender for Life!