The Four “C’s” in the Loan Process

Having good credit and a steady job just does not seem to be good enough in today’s credit world when it comes to getting your home loan approved.  You need to make an impression.  Below are some great tips I would like to share with you.

Today’s lenders are a picky bunch when it comes to the loan approval.  Even well-qualified borrowers are expected to jump through some pretty high hoops to qualify for financing.

Have no fear. The tips below and suggestions can help you make the best possible impression on the lender of your choice.

Just as job hunters may wonder what top employers want to see on a resume, prospective borrowers may be curious about what lenders look for on a loan application.

The four C’s

The answer may be summed up with a mnemonic called “The four C’s,”

•    Capacity, which refers to the adequacy of the borrower’s income to cover the interest and principal due on the loan, plus property taxes and homeowners insurance.

•    Character, which refers to the borrower’s track record of paying debts, as evidenced by his or her credit history and credit score.

•    Capital, which refers to the borrower’s down payment (or equity) as a percentage of the current value of the home.

•    Collateral, which refers to the safety and soundness of the home and the value of the home as determined by an appraisal relative to the agreed-upon purchase price.

Today’s mortgage broker might use a quadrant with “income,” “credit,” “assets” and “property” in the four corners, but his point is the same as that of the four C’s:  What lenders like to see is strength and stability in all four areas.

Maybe your credit score has some dings or you need a stated-income loan.  Borrowers who are qualified but whose down payment will be less than 20% of the purchase price of the home must withstand a second level of scrutiny. That’s because mortgage insurers also have to approve such loans, and they have “completely different qualification ratios”. Borrowers in this situation should discuss their options with a loan officer who is familiar with lenders’ and insurers’ guidelines.

Have paperwork in order

Lenders rely not on the borrower’s say-so but on a pile of paperwork to verify and document the borrower’s financial position. At a minimum, most borrowers are required to submit the following:

•    One month of paycheck stubs.

•    Two years of W-2 forms.

•    Three months of bank account statements.

Additional paperwork also may be required:

•    If you’re self-employed or earn more than 25% of your income from commissions or bonuses, you’ll need to hand over two years of income tax returns.

•    If you’re divorced, the lender will want a copy of your settlement to ascertain how much alimony or child support you’re obligated to pay or are entitled to receive and the duration of those payments.

•    If you’ve filed for bankruptcy protection within the past seven years, you’ll need to show your bankruptcy papers.

•    If you’ve deferred repayment of student loans, you should provide your deferral agreement as well.

“If (borrowers) have student loans that are going to be deferred for at least 12 months, that may help them qualify, so they would want to bring the account numbers for those loans.  Student loans are counted as debt, but deferral of repayment may strengthen the borrower’s application.

Garage Sale Organizational Tips

We find that many families use a change of residence as an opportunity to dispose of many outgrown and no-longer-wanted items. It beats taking the items with you and can even put several hundred dollars in your pocket toward buying furnishings for your new home.

As Realtors, we are expected to be wise in all matters relating to a change of residence. Even though garage sales are far from our primary field of expertise, allow us to pass on the best advice we have picked up over the years.

Planning

Allow plenty of time – three to four weeks – to prepare. Choose a date that will not conflict with holidays or other events that might lure prospective customers away. More people are likely to show up on weekends than weekdays. Your sale is likely to attract more customers if you join together with neighbors in a larger effort with more merchandise – some homeowner groups sponsor neighborhood sales that are proving popular.

What to Sell

Practical household goods, bicycles, children’s toys and clothes, sports equipment and garden tools are popular. Adult clothing has less appeal – price accordingly. All items should be clean, polished and in good repair.

Display

Merchandise your items attractively in neat, clean surroundings. Paper tablecloths offer a pretty setting for glass and ornamental items. Cluster things in categories. Place more desirable items toward the back so browsers can notice other merchandise on their way to the most popular items. Have a 25-cent miscellaneous table for young shoppers. Clothes should be sized accurately and hung on a temporary rack.

Logistics

Locate your appliance table near an outlet so customers may try before they buy. Set aside adequate parking and a place to load large items. Have plenty of bags and boxes on hand for packing and newspapers for wrapping glass items. Ideally, a place for trying on clothing should be provided.

Promotion

Place a classified ad in the local papers – include three or four of the more tantalizing items for sale, directions and other pertinent details (you may or may not want to include your phone number). Take advantage of free publicity provided by bulletin boards in grocery stores and other public places. Provide directional signs to your property using an indelible pen. If your house is listed for sale, have your Realtor® hold an open house on the same day, thus increasing traffic for both the house and the sale.

Pricing

Visit other sales to get an idea on how to price things. Remember that garage sale shoppers are looking for deals, so be prepared to bargain and lower your prices. Really valuable items such as antiques should not be sold at a garage sale; they are not likely to bring the desired price from bargain hunters. Nothing is too worthless to be valuable to someone, so have a giveaway box for old magazines and other assorted odds and ends.

Staging

Post a notice that all sales are final and payment must be in cash. Keep ample change in a cash box in a protected spot. Keep a record of sales, especially when there are several sellers. One recording method that is simple and efficient is to use small adhesive stickers to price items, then transfer the sticker to the name of the seller when the item is sold.

Moving – Let’s Get Pre-qualified

How much home can you really afford? The first step in buying a home is to have a budget and figure out how much you can actually afford. Your agent or lender can help you with this in a couple of ways:

• Pre-qualifying process This process will give you a general “estimate” of what you will be able to afford.

• Pre-approval process This process will allow your lender to review your finances in more detail in order to determine the amount of money they agree to loan you for your home purchase.

Your lender will review your finances and focus on a few main areas such as:

• Gross monthly income
• Credit history
• Amount of outstanding debts
• Source and amount of money available for down payment and closing costs
• Interest rates, etc.

All these things put together will help your lender determine two important qualifying ratios.

1. Debt-to-Income Ratio Generally the amount of debt you pay each month should not exceed 36 percent of your gross monthly income
2. Housing Expense Ratio Most lenders will not approve your loan if the mortgage payment exceeds 28 to 33 percent of your gross monthly income

These are the first steps in determining how much you can afford when purchasing a new home. For more mortgage and finance information feel free to contact me at any time or visit my Finance Information page.

Options for fencing

There are many reasons to add a fence on your property, you may want privacy, to keep your children and pets safe as well as add value and appeal to your home. If you do decide to install a fence, it is important to ensure that you are erecting it on your property only. You should not assume that a prior fence or market was located on the property boundary, and reference should be made to property deeds and legal surveys. You may find evidence of survey stakes to help you determine the boundary lines.

There are many different types of fences to choose from to best suit your budget and situation. Visit the fence project estimator to get an idea of cost and how to find a quality fence company in your area.

Types Of Fences

Wood Fences. A popular and cost effective choice, wood fences can be made out of Western red cedar, cypress, or treated pine. When maintained properly, wood fences can endure the harshest weather and provide you with several years of serviceability. Wood fences can come in privacy, picket or rail style. Visit the FAQ for more information on wood fencing.

Vinyl (PVC) Fencing. Vinyl fences are strong and highly durable – retaining their shape, color and structural integrity. In addition to their attractive appearance, this style of fencing offers many benefits. It is fireproof, wont rust or rot, termite resistant and is virtually maintenance free. While this type of fencing is more costly than wood, you will not need to replace the fence in a few years, they are built to last a lifetime. There are many styles of vinyl fencing available to suit your needs from privacy to picket.

Chain Link Fencing. Chain link fences are an economical way to provide years of maintenance-free security and access control. These types of fences are extremely versatile; they can be made in a variety of heights, and can handle anything from a simple boundary marker for a homeowner to perimeter security. You can also get vinyl coated chain link fences in different colors for added versatility.

Wrought Iron Fences. This style of fencing is extremely durable and has a classic look. They are available in different colors, patterns and heights. This style of fencing can be used for walkways, porches, and perimeter and driveway gates as well.

You may have heard the old saying that good fences make for good neighbors,  while this may be true adding a fence to your home can be a significant investment. It is a good idea to shop around and consider all your options. Some things to consider: what is the primary purpose your fence? Will it provide security, satisfy municipal codes, retain children or pets, secure a pool or spa? There as many reasons for investing in a fence as there are  options!

Now is the Time to Invest in Real Estate in Sebring, Avon Park & Lake Placid

I just finished two full days at the Allen Hainge Cyber Star Summit in Orlando, July 21-22.  My head is on overload with all the great ideas, latest tech tools, and best marketing ideas for selling real estate.  Some of the top selling agents from around the country attended this event.  Along with all these good tips and talk about the negative media on foreclosures, short sales, high gas prices etc., one of the points agents from around the country kept making is there are great deals just waiting for buyer!  The stock market may be bad.  But now is the best time to invest in real estate for those with money to invest.  Pick up good properties at rock bottom prices.  Invest in your future.

To find out the best deals in Avon Park, Sebring and Lake Placid, give the Cool Team of Maureen and Carl Cool a call today at 863 873-7243 or 1-888-243-2665.  We will be happy to provide a free list of foreclosures and short sales in the Highlands County area by email.   You can request this by emailing me at maureen@ACoolRealtor.com.

June 1 – July 15, 2008 Real Estate Update: Sebring, Avon Park & Lake Placid

June 1 – July 15, 2008  Real estate sales in Highlands County are down a little, but this tends to happen during the summer.  Our real season is January through March with summer being the slowest.  The greatest amount of sales are short sales or bank forclosures.  There are some really good deals out there.  I just saw a home go into the MLS close to Florida Hospital that is a foreclosure for $69,900.  It is a four bedroom home (the garage was converted to the fourth bedroom).  For an investor or first time home buyer, this is a steal.  RE/MAX continues to lead our county with number of sales.  I am fortunate enough to continue being one of the top selling agents in Highlands County.  Finding good buyers to qualify continues to be an issue.  But, the buyers are there!
 
This is the recap of activity for the past six weeks June 1 – July 15, 2008 in Highlands County.
 
Single Family Homes
 
Currently Listed                      1,578
Contingent or Pending             116
Sold   6/1 – 7/15                     77
       Sebring                           42
        Avon Park                      11
        Lake Placid                     23
 
Condos, Villas, Duplex
 
Active                                   357
Contingent or Pending            15
Sold                                     9
 
Mobile Homes – Owned Land

Active                                    134
Contingent or Pending             9
Sold                                      7
 
The majority of the sales were under $125,000, 15 sales were over $250,000 and 5 sales were over $400,000.  The houses that are price to sell are selling.   With all the media about short sales and foreclosure sometimes really good deal of great homes that are in the best condition are missed.  Work with an experienced agent…Call Maureen Cool to find the best deals.  Maureen keeps up with listing daily and knows what is new on the market that is prices right.  Let Maureen help you find your next home.  Now is the time to buy!.  Let the next great deal be yours!  Call Maureen Cool today at 863- 873-7243.

April-May 2008 Real Estate Update Sebring, Avon Park & Lake Placid

This is what is happening in the real estate market in Highlands County for the months of April and May 2008.  Homes are selling, but again it is the lower priced homes under $175,000.  RE/MAX Realty Plus continues to out sell everyone else in Highlands County at more than 2 to 1.  RE/MAX continues to dominate the market which is good news for those listed with us!    The inventory for homes on the market is still at an all time high.  Homes need to be priced correctly and in the best possible condition to compete in this market.
 
This is a quick look at what has happened over the past two months.
 
Single Family Homes April 1 – May 31
 
Currently Listed                       1,659
Contingent or Pending              140
Closings for April & May           151
Sebring                                   75
Avon Park                               24
Lake Placid                             44
 
Condos, Villas, Duplex
 
Currently Listed                       356
Contingent or Pending              11
Closings for April & May            23  
 
Mobile Homes – Owned Land 
 
Currently Listed                         163
Contingent or Pending                13
Closed April & May                     22

RE/MAX – It’s a Small World!

Yesterday I spent a great day in Sarasota with a group of friends and fellow agents from my office, RE/MAX Realty Plus in Sebring.  We went to a RE/MAX Florida Regional meeting in Sarasota.    We started the meeting with lunch at the Columbia Restaurant on St. Armands Key.  I grew up in Tampa and one of my favorite restaurants is the Columbia Restaurants in Ybor City.  So I never miss a chance to eat at any Columbia Restaurant.  So after a wonder Cuban lunch, it was off the Ritz Carlton in Sarasota for an afternoon meeting.  I picked up more good ideas for marketing and reconfirmed RE/MAX is the place to be!
 
While sitting in a large room with lots of agents in the second row.  Liz, the lady behind me, started talking and introduced me to the agent she was with, Donna Toms both from a north Tampa office.  They just joined RE/MAX from Century 21 (good move for them).   Donna said you look familiar where are you from?  I asked “have you been to Sebring?” She said “No haven’t been there.”  Then I said, I grew up in South Tampa.  She said so did I.  Then I asked her where she went to high school she said Robinson High School.  This is where I went.  I asked her when she graduated.  She said 77 (me 73), but said she had an older sister and she would ask her if she knew me.  Well she seemed familiar to me too.  The meeting started.  All of a sudden it hit me.  I turned around and said  “Did you have horses?”  At the same time we both said “Maica.”  Maica was my first horse.  I use to show and ride Quarter Horses.  I sold Maica when I was in high school to Donna Nanz.  So the new Tampa RE/MAX agent is the same person who bought my Maica.  It has been 35 years since I last saw Donna.  She was about 13.  I can remember her riding her horses, with a cowboy hat, hair in a pony tail, and always riding bareback  and with not saddle.  So when someone says, “It’s a small world,” it really is!
 
I wish Donna and Liz much luck with their move to RE/MAX.  I am so happy I attended the meeting yesterday.  It’s always fun to look back on the good old days!  Anyone looking to move to Tampa, I have a good referral person to send you to.
 
Remember for all your real estate needs in Highlands County – Sebring, Lake Placid and Avon Park, give Maureen Cool a call today at 863 873-7243 or 888 243-COOL(2665).

March 2008 Real Estate Update: Sebring, Avon Park & Lake Placid

March 2008 turned out to be a great month for real estate sales in Highlands County.  RE/MAX in Highlands County has 23% of the market share with the next closest office at 6.5%.  As my son would say “RE/MAX Rules!”   In Highlands County, RE/MAX has closed 287 transactions YTD and continues to out sell the next closest office two to one.  I think most will agree this is very impressive especially since we have fewer agents!

This is a recap of what is active on the market and what  has sold during March 2008 for residential sales.

Single Family Homes

Currently Listed               1,676

Contingent or Pending      150

March Closings                71

       Sebring                    37

       Avon Park                12

       Lake Placid               13

Condos, Villas, Duplex

Active                            364

Contingent or Pending      12

March Closings                14

Mobile Homes – Owned Land

Active                             141

Contingent or Pending      22

Closed March                  15

The majority of the sales were under $150,000 and only six sales were over $250,000.  The houses that are price to sell are selling.  I heard on agent descript the market as a beauty contest.  The homes in the best condition, correctly priced win the sale.  A home than needs work — painting, cleaning, new carpet, yard work cannot compete.  It will be Maureen Cool’s pleasure to show you the best of the best for sale in Highlands County.  Let the next great deal be yours!  Call Maureen Cool today at 863 873-7243.

Short Sale – As a Seller, What You Should Know Before You Decide

Is a short sale a good thing for a seller?  As a seller you should consider some facts before you jump as a Seller into a Short Sale.  As an experienced Realtor in the Avon Park, Sebring, and Lake Placid market, I see many disasters in the making with short sales.  You can give me a call to see if a short sale is right for you.  I do not handle the actual short sales because it is not my expertise.  Nor am I a foreclosure consultant.  But, I do know when a short sales may be the best option for you and I can point out red flags that I might see.   If a short sale appears to be the best choice for your situations, I can refer you to an experienced Realtor to handle your short sale.  Some agents may bill themselves as being an expert in short sales.  This is not always case.  The buzz word these days is Short Sale and many Realtors have jumped on the band wagon to present themselves as experts when they are not.  For example, you would not or I would not get to the same doctor for a cold as we would for major surgery and you should not just pick any Realtor for a short sale without checking their track record with short sales and ask for references from past clients they have handled short sales for.
 
What is a short sale?  This is when the homeowner places the home for sale and the lender agrees to take less for the mortgage than what is owed and releases the homeowner from the deficit.  The homeowner owes more than what the house is worth.  Suddenly, payments are more than the homeowner can afford.  This could be caused by loss of a job, reduction in income, divorce or death of a spouse, or an unexpected increase in mortgage payment, taxes and insurance.  The homeowner can no longer afford to live in the home.  They decide to sell and realize in this slow market they cannot not sell their home for what they owe and they are facing foreclosure by the lender.  This is when a Short Sale may take place.
 
What sellers do not realize is, a short sale may not be all that it is cracked up to be.  You think the lender will let you sell the home for less than what is owed and release you from the difference.  This may not be the case.  Before you agree to do a short sale realize that the following may occur:
 
1.  There may be tax ramifications from a short sale which include the money the lender is releasing you from may be taxable by the IRS.
 
2.  The person or Realtor handling the short sale may be collecting a fee from the sale in addition to collecting a commission.  Find out what this fee is.
 
3.  When you put up a Short Sale rider on the for sale sign in your yard, this tells the world that the property has started the foreclosure process and the list price is less than what is owed.
 
4.  Just because someone tells you they can do a short sale, it may not happen.  All this person is attempting to do is negotiate with the lender to take less.  They are gambling they can do this on your time.  If the short sale happens, the Realtor makes money.  If it does not happen, you go to foreclosure.   In some cases, but not always the lender may approve the short sale and still require you to pay the difference in what is remaining which is called the deficiency.
 
5.  There is no guarantee the person that list your house to do a short sale will be able to negotiate with the lender.  If the lender refuses to honor the approved discounted price and closing, the property will go to foreclosure.  The short sale is a way to try to avoid foreclosure.  When you accept the offer made by a buyer, you have accepted a lesser amount than the actual mortgage(s).  This is where the Realtor goes to work and has to convince the lender that it is in the lenders best interest to take less than what is owed.
 
6 If you are in a situation that you can no longer make payments, it is always advisable to consult an attorney and accountant to find out the ramifications the short sale may have on you.
 
7.  If you have equity in your home but are unable to make your current payments you may be better off selling just a little over what you owe to cover your expenses.  This will help promote a quick sale.  In no circumstances should you sign your house over to anyone or put it in a TRUST without an attorney looking at this.  If you do sign your home over to a trust this may mean that someone else will realize the equity in your home and will sell it for the profit.  You have just GIVEN your home away when you sign it over to a trust.   Know who the trustee is on the trust.  Do they know the Realtor proposing to do the short sale?  What is the relationship to the Realtor?  Have an attorney look at any papers before you sign.
 
If you are considering a SHORT SALE in Highlands County, give Maureen Cool a call at 863 873-7243.  She will talk to you about your situation, give you options to consider and try to help.