That is the second most popular phrase from today’s home shoppers. It is only second to "I have to sell my home to buy a new one."

Here are some solution suggestions for dealing with either of these issues.

Are you a prospective buyer who doesn’t like the kitchen, carpet or…? Just get a buyer’s agent who has the mortgage contacts to help you get a Renovation Loan like FHA’s 203K program, or a conventional lender’s similar program.

If you buy an eligible home using a renovation loan, you don’t have to settle for an outdated, inefficient floor plan, ugly carpet, or a home with a great location but not enough space.

Renovation loans can be used for almost any remodel or improvement that will ADD VALUE to the home being bought, up to the FHA area maximum home value. In Maricopa County that is currently $346,250.

There are some qualifications and requirements that MUST be met, and it is imperative that you get good, competent advise from your agent (should know the neighborhood very well) and from a qualified lender. (Please note, not all lenders are qualified to underwrite and fund these specialty loans)

Do you have to sell a home? Are you finding buyers don’t want your outdated home, no matter how low you price it?

Why not select a selling agent familiar with these loans and work with that agent and his mortgage lenders to market the home toward the Renovation buyer? It might help you overcome the 1970’s kitchen, the worn out Avocado Green carpet, the lack of a great room the lack of a garage or home office

Are you interested in the fantastic opportunities in the Foreclosed properties now available?

You probably know that most foreclosed properties are in poor condition. What better way to use a renovation loan than in the purchase and rehabilitation of these homes? An experienced agent, teamed with a professional mortgage banker can help you achieve your goals, and may help you get more house for your housing dollar than you ever dreamed possible.

Don’t be left behind, call today to start your new home search.

Jim Little, your Sun City REALTOR®

Please visit my Web Site, suncityneighborhood.com where you can search the MLS with no registration for free.

The Arizona Republic reported today (7/20/09) in an interview with Bob Bemis of the Arizona Regional Multiple Listing Service (ARMLS) That only 28,000 of ARMLS’ 36,000 former members renewed their dues for the 2008-2009 period. Even though ARMLS expects 3,000 late renewals, the anticipated net decline represents 20% fewer agents than last year.

It is presumed that the agents not renewing are either agents who are retiring, were part-time, or who had licenses during the boom times and are not willing to put the time and effort into competing in today’s market.

I hope that the remaining agents are the professional level, active agents with a commitment to the real estate industry, and to the clients and customers. I also hope that this will lead to a higher level of professionalism and client care than has been the case in the last several years.

When buying a home in today’s market, you MUST be concerned about MORTGAGE FRAUD. Not only the FRAUD FOR PROFIT that many have experienced, but the FRAUD FOR HOUSING. Yes, if you lie, or are encouraged to lie in the mortgage application, that is FRAUD. It is both a Federal and Arizona FELONY. Your buyer’s agent should help you avoid potential financial losses and criminal prosecution.

This post is inspired by 2 others on this forum. Lenn Harley’s MORTGAGE FRAUD THRIVES – THE PLAYERS ARE THE SAME and Broker Bryant’s You want my buyer to do what?

Both of these posts touch on the Buyer’s agent responsibility in the procurement of a home loan. I am just adding some of my thoughts to theirs.

Many problems in today’s real estate market have been caused by FRAUD! Often guided by the lending officer, who feels pressured to make the deal at any cost. Since most states do not require the lending officer to have a fiduciary responsibility to the lender, fraud may easily occur.

Buyer’s agents DO have a fiduciary responsibility to the buyer. It is their highest duty when representing the buyer. Why don’t they stop the fraud? Here are a few reasons.

1. Accepting a buyer provided lender. Sorry folks, this is my biggest fear. Many, if not most lenders don’t play well with real estate agents. They do not keep us in the loop, and often won’t provide us with the information necessary to protect and counsel the buyer. Make sure your lender will talk to your agent, or be prepared to accept the consequences.
2. Many agents don’t understand mortgage rules and procedures. I will bet most agents have never seen a buyer’s Good Faith Estimate. If your agent doesn’t know what is on this document, there is no way to help the buyer understand the loan they are getting.
3. In my state, most buyer’s agents do not attend closings. I have never seen a loan originator at a closing. It is at the closing, or a few days earlier, that you get to look at the Note. The Note defines all of the terms and conditions of the loan. Anything said or written prior to the signed note are null.
4. Many agents were "trained" to let the "mortgage professional" do the job without interference. This has often been justified as "preserving a buyer’s privacy". It is imperative the buyer’s agent be involved.

These are just a few of the things a buyer’s agent should do to protect their buyer, and make the real estate purchase a good one.

It may be only for a few days, but this first day of fall was glorious! I’m sure we will have some more triple digit days before Halloween, but today was great.

The people who live in the New England area, upper Midwest, and even in Arizona’s mountains mark the change of seasons by the changing colors of the leaves in the trees. Those of us who live in the Sun City and Sun City West of Arizona’s Sonoran desert mark the change by the changing colors of the license plates on the cars in front of us. I particularly like the blue of Minnesota, and the red of Wisconsin, but all snowbirds are welcome.

And now for a joke. Seen on a bumper sticker… So many snowbirds, so little freezer space! Joke folks

Jim Little, Your Sun City Realtor
http://jclittle.com/
Ken Meade Realty
17001 N Del Webb Blvd
Sun City AZ 85373
800-877-1776
623-977-1776

By the way…if you know someone who is interested in buying or selling real estate in the Sun City Neighborhood, Peoria, Glendale or Surprise, please call me with their name and phone number. Thank you!

Get a Home Loan for Only 4% Interest!

That is a teaser rate folks, YES IT IS TOO GOOD TO BE TRUE!

Many lenders in the past have offered rates like this and even lower. You see it on TV all of the time. Thes are teasers, meant to get you to call them. Even if you got a loan at that rate, you need to read the fine print.

Almost without exception, these rates are offered for a limited time frame (1 to5 years). After the introductory period the rate will reset, most of the time at a much higher interest rate, or to market rate but the difference between the teaser rate and the market rate is added to the principle or term of the loan.

Yes, your parents were right! Don’t sign anything before reading it.

For information on a Realtors opinion on Adjustable Rate Mortgages: click on the following articles.

• Adjustable Rate Mortgages, Good or Bad, Part 1
• Adjustable Rate Mortgages Part 2
• ARMs, Part 3, Pitfalls and Benefits

Jim Little, Your Sun City Realtor
http://jclittle.com/
Ken Meade Realty
17001 N Del Webb Blvd
Sun City AZ 85373
800-877-1776
623-977-1776

By the way…if you know someone who is interested in buying or selling real estate in the Sun City Neighborhood, Peoria, Glendale or Surprise, please call me with their name and phone number. Thank you!

The Adjustable Rate Mortgage (ARM) can be a valuable tool when buying a home. It can also become your worst nightmare.

Benefits of an ARM include:

• Ability to qualify for  more house since the qualification is based upon the first payment level.
• Gradual increase in payments if the ARM is correctly selected. This increase will hopefully be made up by an increase in your earnings.

Pitfalls of the ARM:

• Teaser, or introductory rates. This is why so many people are in trouble today. These rates mean your payments will be abnormally low at the beginning. The loss to the lender is made up by resetting after the introductory period to a level greater than the market rate. The change in monthly payment isn’t gradual, it happens at once, causing monthly payments to be more than many can pay. Foreclosure is the result.
• High prepayment penalties and excessively long prepayment periods. These lock the borrower into the loan, as it is not possible to borrow enough to pay these. Recently I have seen prepayment penalties of 7% and prepayment periods of up to 9 years.
• Income fails to rise as expected, Even if your income doesn’t increase, your payments may. You are obligated to make payments based upon your index, not your income.

I hope this series helps to explain the Adjustable Rate Mortgage. If you have any questions, drop me a line.

Jim Little, Your Sun City Realtor
http://jclittle.com/
Ken Meade Realty
17001 N Del Webb Blvd
Sun City AZ 85373
800-877-1776
623-977-1776

By the way…if you know someone who is interested in buying or selling real estate in the Sun City Neighborhood, Peoria, Glendale or Surprise, please call me with their name and phone number. Thank you!

ARMs, how they work.

A basic Adjustable Rate Mortgage (ARM) is based upon the following items (be sure your lending officer and real estate agent explains them in detail)

• An Index
• Margin
• Adjustment Period
• Maximum Increase per Period
• Maximum Increase over the Life of the Loan

INDEX: Each ARM is tied to an economic index. The index relates to the cost of the money loaned, to the lender. The loan interest, upon which the payment is based is equal to the INDEX + MARGIN. Be Careful when evaluating the index. A volatile index means your loan will adjust in an extreme fashion. Common indexes are:

• LIBOR, the London InterBank Offered Rate
• COFI, the Federal Cost of Funds Index
• T-Bills, the interest rate paid by the Treasury Bills.
• Many others may be used.

MARGIN. A percentage added to the index to allow the lender to recover costs and make a profit. If you are the borrower, you want this number to be as low as possible. If you are the lender, you want it to be as high as possible.

ADJUSTMENT PERIOD. This could be monthly, quarterly, twice a year, or yearly. Pick the one you decide will fit your situation. Pick carefully, however, you will not be able to change this later.

MAXIMUM INCREASE PER PERIOD. This one can be a killer. As a borrower, you want this to be as low as possible. An increase of 1% on a $200,000 loan is about an $80 a month increase. If you do this quarterly, you might find you cannot afford the payment.

MAXIMUM INCREASE PER YEAR. Again, another killer. Keep this number as low as possible.

MAXIMUM INCREASE FOR THE LIFE OF THE LOAN. This caps the loan. No matter what happens to interest rates over the life of the loan, this is the maximum interest rate you can be charged.

Jim Little, Your Sun City Realtor
http://jclittle.com/
Ken Meade Realty
17001 N Del Webb Blvd
Sun City AZ 85373
800-877-1776
623-977-1776

By the way…if you know someone who is interested in buying or selling real estate in the Sun City Neighborhood, Peoria, Glendale or Surprise, please call me with their name and phone number. Thank you!

Much has been said recently about the causes of our current and projected foreclosure rate.

Often vilified by the press as the cause of today’s mortgage mess, is the adjustable rate mortgage. (ARM)

The ARM was originally developed as an instrument to give people, often first time buyers a way to get on the property ladder earlier in life. These were often younger buyers, educated, in the early stages of their careers. These buyers typically had some money down and for their closing costs.

The ARM loan was often offered at a lower interest rate since the lender didn’t have the risk of inflation leaving the lender with a low return loan during periods of higher yields. These loans were typically limited to between 5 and 7 year terms, after which the loan would be renegotiated, refinanced to a fixed rate loan, or the property sold.

The advantage to the buyers is that they would be qualified for the loan on the initial rate, usually less than that of conventional loans. The initial payments were lower, and as their income increased, so did the payment.

The borrowers using these loans had every reason to believe that their income would increase as the loan interest and payments increased.

More recently, ARMs were used to finance borrowers who had minimal or poor credit records, and no real potential of increased income. Additionally, these buyers had little or no money to invest in the property, hence need to get their down payment and closing costs financed. As recent events have made clear, this is a recipe for financial disaster.

Jim Little, Your Sun City Realtor
http://jclittle.com/
Ken Meade Realty
17001 N Del Webb Blvd
Sun City AZ 85373
800-877-1776
623-977-1776

By the way…if you know someone who is interested in buying or selling real estate in the Sun City Neighborhood, Peoria, Glendale or Surprise, please call me with their name and phone number. Thank you!