How Buyers Can Save Money When Purchasing a Home

Altadena, Ca Home Janes Village Area

Home Buyers can save thousands of dollars when they purchase a home by negotiating some of the closing costs.

Closing costs run 3% to 6% of the purchase price.  If we take a purchase price of $490,000.00, your closing costs could run you between $14,700 and $29,400.00.  Quite a big difference.

You will receive a Good Faith Estimate on closing costs shortly after applying for the loan.  The Truth in Lending Act now requires lenders to provide consumers with good faith estimate within 3 days of receipt of the loan application.

When you receive the Good Faith Estimate review the charges line by line with your lender and inquire what the service is for and whether the item is negotiable.

Some of these costs are negotiable and some services you can purchase for a lower price from a vendor different from the one selected by the lender.

Ask you Realtor.  If you don’t have a Realtor, ask the Lenahan Realty Group about negotiating your closing costs as well as the many other cost-saving opportunities we offer such as our Buyer Programs and Free Home Warranty Program!

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Mary K. Lenahan, JD, Realtor
Beautiful-California-Homes-For-Sale.com
SEARCH THE MLS HERE
(626) 798.9050
Mary.Lenahan@Dilbeck.com
Cell/Text: 626.226.6056
Your Business & Referrals Are Appreciated!
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Rent vs Buy: A Formula to Consider – Another Sign It May Be Time To Buy

Pasadena CA Home

There are many factors to consider when deciding whether to rent or buy.

One fabulous factor to consider is the increased take-home pay you will enjoy as a result of the tax deductions allowed to home-owners.

There are many other factors that are more personal and emotional to consider when buying a home,  such as your family’s size, ages, and needs, your desired life style, and what seems to be an innate desire to own a corner of the world that you can call all your own.

According to an article in CNNMoney,  a rule of thumb used by economists to determine if it makes more financial sense to buy vs  rent is a mathematical formula.  This formula is:

Purchase price divided by Annual Rent for a similar home.  If the resulting number is BELOW 15, start looking for the home you want to buy.   If the number is ABOVE 15, continue to rent.

Out of curiosity, I applied that formula to Pasadena living.   I used the average sale price of a Pasadena, CA home that sold in December 2010, which according to DQNews.com was $490,000.   The “average” rental price for homes listed for lease in Pasadena this  month that are 3 bedrooms and 2 baths is  $2771.00.

I then divided the average priced home sold by the  annual average rental price ($33,252).  The resulting number was 14.7 – which according to economists, is a “buy sign”.

The above CNN.Money articles notes that out of 50 major cities, 36 were now on the buy side.

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Mary K. Lenahan, JD, Realtor
Beautiful-California-Homes-For-Sale.com
626) 798.9050 / Cell*Text: 626.226.6056
MKLenahan@yahoo.com
Dilbeck Real Estate Real Living
Short Sales & Probate Real EstateTransactions

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Potential Property Tax Savings for Buyers 55 years or Older Buying Replacement Homes

Country Club Neighborhood Home, Altadena CA

If you’re a current homeowner 55 years or older wanting to buy a new home but not wanting  to give up the low property taxes you’ve been enjoying, Propositions 60 or 90 may help you get into the home you’ve  been dreaming of.

If one of the propositions apply, you may transfer the trended base value of your current home to a replacement home of equal or lesser value of your home’s current market value.   In other words, if you buy a $500,000 property, your property taxes will not be based on $500,000.00 property value, but rather on the trended base value of your current home.

It’s a once in a lifetime benefit.    The tax benefit can apply even to new construction.  The orignal home and replacement home must be your principal residence.   Either you or your spouse can qualify to meet the minimum age requirement.

The replacement home must be purchased or completed within 2 years of the sale of your home.   A claim must be filed within three years of the purchase or completion of the replacement home.

Proposition 60 applies to intra County transactions, i.e. where you sell the original home in same county as you buy the replacement home.  Proposition 90  applies to inter county transactions, i.e. where you sell a home in one county and buy in another county.

Not all Counties in the State of California participate in Propositions 60 and 90.   Call the appropriate County Tax Assessor to determine if that County participates in Propositions 60 and 90.

As of  February 15, 2010, the following counties were participating in Proposition 90:

• Alameda:    (510) 272-3797
• El Dorado:   (530) 621-5719
• Los Angeles:  (213) 893-1239; see http://assessor.lacounty.gov/extranet/guides/prop6090.aspx
• Orange:  (714) 834-2746
• San Diego: (619) 531-5481
• San Mateo:  (650) 599-1743
• Santa Clara:  (408) 299-5338
• Ventura: (805) 654-2176

You must file a claim to enjoy this property tax saving.  For LA County, forms are available at the LA County Tax Assessor’s website.  assessor.lacounty.gov The LA County Tax Assessor even has a help desk where you can e-mail your questions:   helpdesk@assessor.lacounty.gov

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Mary K. Lenahan, JD, Realtor
Beautiful-California-Homes-For-Sale.com
SEARCH THE MLS HERE
(626) 798.9050
Mary.Lenahan@Dilbeck.com
Cell/Text: 626.226.6056
Your Business & Referrals Are Appreciated!
DRE 01867737

FHFA to Explore Ways to Encourage Banks to Modify Mortgages

According to a Washington Post article,  the Federal Housing Finance Agency (FHFA) is looking at ways to change the way banks manage mortgages and thereby reduce the number of foreclosures.

“Critics say the current system makes it more lucrative for a bank to foreclose” [than to modify the mortgage terms].    Apparently, if a loan is modified, fees to the loan servicer may be reduced.  However, with a default, fees are tacked on that can be collected at the time of foreclosure.

The FHFA warns however, that changes may not occur until Summer 2012.

 

Mary K. Lenahan, JD, Realtor
The Professional Difference
(626) 629.8709
Mary.Lenahan.Dilbeck.com
SEARCH THE MLS HERE

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