Home Loan Focus

Archive for August, 2008

So I’m continuing on with a quick little series to spell out some simple and easy gadgets for accomplishing your goals.  This started with an article I wrote about gadgets that you need to successfully hunt for a house these days.  After hanging out with some family members that are not as gadgetly inclined as myself, I started trying to focus on some relatively easy and where possible cheap or on sale gadgets that would fit the bill for my mother.

So this time I’m talking about, GPS system. On the surface a GPS system can seem rather intimidating.  So I wanted to find a system that was easy to use while you’re driving. Now, I use a technology called voice recognition. What this means is, when I talk my computer types of the words for me.  I have seen a number of GPS systems that allow you to type little bitty numbers on a screen, and you should have this as a fallback option. However when you are driving, it’s a whole and easier to just say a street name.

So when is looking for a GPS system, I went and looked for GPS system that had voice transmission capabilities and came across this great little whizbang gizmo. 

it’s a Magellan GPS system, and it has a long title to describe the specific model number, but if I were telling this to my mother she would start to get faint hyperventilate, and her eyes would glaze over as I listed off the model number, so I am just going to give you the link.  

here it is, the Magellan Maestro.

Now you can literally go to town while you’re looking for a house and you won’t get lost!

I recently recommended some great gadgets for house hunting that people should consider.  Now, I received a couple emails from that article, from people asking what gadgets I use specifically.  I started to respond, but realized that I am not your typical person.

I’m a bit of an early adopter gadget freak and the tools that I use are not necessarily going to be the tools that are right for everyone else.  I had a bit of an epiphany this weekend however when my family and I went to the beach.  It was my wife and three kids, plus my mother and my wife’s parents.

Both my mother and my father-in-law both used slightly different models of the same digital cameras.  Neither one of them are gadget people.  They both resisted getting cell phones for years, my father-in-law ultimately accepting a cell phone when I bought a phone for him and added it to our plan.

Gadgets and computers are not impossible for them to use, but they definitely don’t go out of their way to add another gadget to their bag of tools.

They both use a Kodak Easy Share camera (my mom with the 7 megapixel version shown above, and my father-in-law with a 5 megapixel version that’s a bit older).  They also both use these cameras a great deal.

The camera is easy to use, easy to get fantastic pictures with, and easy to get those computers onto a computer (just set the camera on a docking bay (a little holder/stand thing and it automatically zaps the computer to your hard drive without any other effort required).

Now, this camera is also pretty cheap.  I might pay several hundred dollars for a camera or more, but my mother and father-in-law (possibly wiser) will not.  This gem of a camera is less than $200 and can be found on sale for about $185 or better from time to time.

I am going to look back over my previous recommendation and see if I can tune things up for non-early adopters next.  For people that buy the latest gadgets the tips are solid.  But for people like my mom, I need to check it to find the good buys and the easy easy easy and practical devices as well.

Considering buying a new home in the near future? Do you have children and want to know how the local school districts rate? I found a great site last weekend when I was viewing homes in the south Austin, TX area called SchoolMatters.com. All you have to do is select a state, choose a town and hit search. The site will then provide a detailed list of schools and how their districts rate compared to others in the region. The website also offers a number of reviews from local parents and teachers alike. Whether you are looking for Lake Travis real estate or real estate in Austin Texas, you should definitely check out this site.

In addition to Austin real estate, School Matters offers many testimonials as well as detailed information from all across America. If you have children and are considering buying a new home, it is important to know that they will not only have a great roof over their heads, but a great opportunity to succeed when they are no longer under that roof. 

Oftentimes, people use the words Realtor and Real Estate Agent interchangeably. Little do most people know, that there is a world of difference between the two. Even though both a Realtor and an agent are both licensed to deal in real estate transactions, only a Realtor is bound by the National Association of Realtors code of ethics.

The code of ethics is harshly enforced and includes seventeen articles that specify actions and standards of practice. Although there is no guarantee that a non-affiliated license holder will deviate from ethical dealings, the National Association of Realtors code of ethics is an attempt by the industry to regulate agents’ actions to protect consumers. 

Source: homebuying.com

Wholesale rates in the US skyrocketed to 27 year highs in July.  This happened against the backdrop of home builders continuing to cut back on construction with a glut of unsold homes littering the market from Charlotte to LA.

That means that the Federal Reserve will almost certainly have to increase interest rates or risk the spectre of out of control inflation that could make the value of the US dollar worthless to the point that people would be better off burning bills this winter than spending it on a heating oil.

The Federal Reserve has been trying to avoid raising interest rates for months in an effort to let the housing market correct itself, but that attempt will surely halt to avoid risking the entire US economy.

During periods of inflation, rapid inflation or hyper inflation the cost of items go up.  That means that a gallon of milk that costs $5 today, could cost $10 next month or $500 at the end of a quarter if hyper inflation kicks in.  Hyperinflation has not been seen in the industrialized world in more than 75 years, but that is largely due to the tenacity of modern banking and modern central banks. 

During periods of inflation it is better to own things, commodities or gold, which still have tangible value, while the value of money rapidly decreases.  If the value of the dollar continues to drop month to month, you are better off investing your money in tangible items that you need now as opposed to waiting.

Conceivably, if you buy something on sale with a credit card even today, and pay it back next month with dollars that are worth less than they are today, you are actually getting a better deal (if and only if you pay off your balance, otherwise you could also see your interest rates sky rocket.)

Personally, I have had my eye on a Nokia N95 smart phone to use with my work for months now.  Its on sale at Buy.com for $477.  This may be the right time to buy that phone if the value of the dollar keeps dropping.  Months from now the list price could be much higher as the value of the dollar drops, and it is a tool that I can utilize to get more work done efficiently.

The last step in the 3 steps to improve our mortgage rate is to improve your loan-to-value ratio. A prospective borrowers loan-to-value ratio is figured by dividing the amount you want to borrow by the price of the home you wish to buy. For instance, if you want to buy a $200,000 dollar home and you want a mortgage of $180,000 dollars, your LTV would be 90%.

Most lenders prefer an LTV over 80%. If your LTV is under 80%, a lender will likely insist that you purchase private mortgage insurance for the loan. In order to improve an LTV ratio, a borrower can either increase their down payment or choose a less expensive home to purchase. Unfortunately, a large down payment is like a colon cleanse for your savings, but it will definitely be beneficial in the long-run.

Source: Credit.com

In order for a mortgage lender to determine how much you can afford to borrow, they will look at your debt-to-income ratio. This number is determined based upon your pre-tax income divided by the amount you use to pay off credit cards, student loans, auto loans etc. Keep in mind that your credit card payment is determined as the monthly minimum not the total balance.

A borrowers debt-to-income should be under 30% in order to assure favorable terms on a mortgage. If your DTI is too high, you should consider paying off some of your smaller loans or perhaps pay down your credit cards, focus on large items like airplane tickets and electronics instead of Halloween decorations or sexy costumes. Be sure not to close any of your credit cards because this will lower your credit score. Another way to improve your DTI you can have a spouse co-sign on your application. A co-signer will increase your total income thus improving your DTI.

Source: Credit.com

There are many ways to improve the odds of receiving a favorable mortgage rate. We all know that lenders are going to check all three of your credit scores (Equifax, Experian, and TransUnion). It is extremely important to know exactly what your score is on each of these three reports. If you have a score above 650, you will most likely receive a decent mortgage rate, but if your score is higher than 750 your rate will be even lower.

In order to increase your credit score quickly, there are a number of steps you can take to improve your rating.  Keep in mind, that you should check your credit scores at least 3-6 months prior to applying for a mortgage to allow enough time for your “fixes” to take.

To help increase your credit score, these steps can start you down the road. First, it is recommended that reduce your card balances below 35% of your total credit limit. Second, keep your accounts stable, make timely payments and avoid unnecessary applications for credit. Lastly, correct any inaccuracies that may be on your reports, you don’t want to be paying for auto parts, expensive dinners and vacations you had nothing to do with.. Be sure to be proactive in regards to your credit, sometimes someone else’s clerical error can be the difference between a good rate and a great one!

Source: Credit.com

Saving money during a move is as simple as how involved you can be. If you make yourself available, you can save hundreds of dollars on even the simplest of relocations. One of the best things you can do is pack your belongings yourself, utilizing local businesses (liquor stores and produce depts.) boxes and old newspapers. Another great option is borrowing tools instead of buying them. For example, why purchase a tape dispenser when you’re probably only ever going to use it once.

One of the more important things you can do to help the affordability of your move is to be decisive on what needs to be moved to the new location versus the garbage, I mean do you really need ten different boxes full of different types of the best acne treatments?. In my own opinion, the best way to avoid this fiasco is to do as much of the moving yourself. You are far less likely to transport something you don’t necessarily need if you are doing the lifting and carrying yourself.

Source: Movinghints.com

Summertime is just about ready to come to an end and much of the country, and with some or many pools will start to get cleaned up and shut down and prepare for winter. Setting up and cleaning and maintaining a pool can be a lot of work, and like a boat people don’t always get as much enjoyment out of a pool is they expect when they first install it.

New home buyers have to seriously consider whether or not a house with a pool is actually a benefit or a money pit and time waster in disguise. Pools can be a lot of fun, but you must consider whether or not it is in your lifestyle to use a pool and a regular basis and maintaining clean the pool as well. Comparing a cool for the summer season can easily take a weeks worth of work.

If you have small children you should also consider the safety issues or associate with a pool. You may have to be extra vigilant about watching young children and ensuring that they don’t fall into the pool, you may have to build or set up fences and gates around the pool to protect young children, and you may even have to rebuild additional decks or fix or repair concrete walkways and things like that on a regular basis.

All of those things are typically not terribly cheap, and that pool that seems to raise the selling price of a home in the listing, I actually make that home much more expensive to maintain his good on the road. If you look at a home’s value from an accountant’s perspective, a pool can actually be a drag on the value of the home if you consider all the money you have to invest and spend on that pool as time goes forward.

So before you sign on the dotted line, and head to the store to pick up some new swimsuits, make sure that this is the right choice for you. Maybe there’s a link in your future or a home by the ocean or even a membership at the YMCA, there are many alternatives other than buying a house with a pool.