New Year’s Resolution: New Home in 2012?

The new year is almost here. Is buying a new home on your list of resolutions for 2012? If it is, then you need to make sure your financial situation is order. By following these tips, you can make your dream a reality.

1. Improve Your Credit Score  

In order to determine whether you qualify for a mortgage, banks or lending companies will check your credit score to determine how much of a risk you are in repaying the money they loan you. The higher your credit score, the more trustworthy they’ll view you. A low score may keep you from getting a loan or the best interest rate. Therefore, check your credit reports with Experian, Equifax and TransUnion to make sure the information contained on them is correct. Get any inaccurate information corrected. It can take 2 to 3 months to resolve any discrepancies. If your credit score is low, you’ll need to make an ongoing effort to improve it by paying down debt, paying your bills on time, keeping your credit card balances low, and not opening new lines of credit. Over time by managing your credit responsibly, you can improve your score.  

2. Determine What You Can Afford 

Use one of the many online calculators to determine how much you can afford for a home, or contact a reputable mortgage broker to discuss your financial situation. Generally, you can afford a home that costs about 2-1/2 times your gross annual salary. However, if you have other financial obligations, like credit card debt, alimony or child support, you may need to settle for a less expensive home. Also, the size of your down payment will determine what you can afford, too. 

3. Save Money for a Down Payment and Closing Costs 

Generally, lenders want at least 20 percent of the home’s purchase price as a down payment. If you can pay more, you may qualify for a larger loan. If you don’t have the money, you may still qualify for a low-down payment mortgage (as little as 3 percent of the home’s cost) through a variety of public and private lenders. Plus you’ll need to pay for private mortgage insurance which adds about 0.5 percent of the total loan amount to your mortgage payments for the year. You also need to ensure you have enough money saved to pay for closing costs and other fees for the appraisal, title search, inspection, and attorney. 

4. Consider All Costs of Home Ownership

Besides your monthly house payment, make sure you can afford all the other costs associated with home ownership, such as property taxes, homeowners’ insurance, homeowners’ association fees, utilities, maintenance and repairs, and home improvements. 

5. Build Up Your Bank Account 

In addition to saving money for the down payment, closing costs and other fees of home ownership, you should have at least 3 to 5 months’ worth of mortgage payments saved. Your lender will want assurance that you’re a good loan candidate who’s not living from paycheck to paycheck. 

By taking a good look at your financial situation and doing what you can to make changes to improve your credit history and save money, you can improve your chances of qualifying for a mortgage and buying a new home in 2012. 

Is Your Home Ready for Winter?

This week is the official start of the winter season. If you haven’t already done so, you should prep your home for the cold weather. The following is a checklist of things to do, so you don’t have to worry about your home this winter.

• Have your furnace inspected to make sure it’s working properly. Keep plenty of furnace filters on hand and change them monthly.
• Bleed the valves on hot-water radiators.
• Check your doors and windows for leaks – caulking and weather-stripping as needed. Install storm windows, replace any cracked windows and/or install plastic sheeting on the insides of windows.  
• Clean out your gutters and downspouts.
• Replace missing or worn roof shingles or tiles.
• Add extra insulation in the attic.
• Insulate any water pipes along exterior walls to reduce freezing. Disconnect garden hoses, drain and store them inside the house. Turn off the water supply to exterior faucets and drain the water in the line. Consider installing an insulated faucet cover.
• Seal foundation cracks and entry points to keep small animals out. Close up crawlspace entrances. Seal the areas around dryer vents, cable outlets and mail chutes.
• Have your chimney or flue inspected. Make sure the fireplace damper opens and closes properly. Stock up on dry, seasoned wood for wood-burning stoves or fireplaces.
• Install smoke and carbon monoxide detectors. Install fresh batteries in existing detectors.
• Trim tree branches that are close to the house or power lines to prevent house damage or the power lines from coming down in storms.
• Stock up on rock salt or environmentally friendly products to melt ice on walkways. Keep sand available for traction for your vehicles.
• Tune-up snow blowers and have snow shovels handy.
• Prepare an emergency supply kit that includes a three-day supply of food and water for each person, a battery-powered or hand-crank radio, flashlights and batteries, candles and matches or lighter, battery back-up to protect your computer and electronic equipment, extra blankets and warm clothes, first-aid kit, and extra pet food, if you have a pet. Never use a generator or other gasoline, propane, natural gas, or charcoal-burning devices inside the house.

By following these winter preparation tips, you can safeguard your home and family against any weather-related damage and save energy, too.

If you’re considering a new mortgage, contact a reputable mortgage broker to discuss your options and determine the best loan for your situation and future plans.

Safeguard Your Home for the Holidays

The holidays can be a wonderful time of the year. While, the glowing candles, the crackling fires in the fireplaces, and the twinkling Christmas lights can make the season merry and bright, they can also increase your risk of a house fire. Every year, more than 400 Americans die due to holiday-related fires, and 1,000 are hospitalized with injuries.

However, by following these tips you can help protect your family while enjoying this festive season.

1.        If you’re getting a real pine tree for your Christmas tree, avoid trees with dry needles – making it more flammable. Before you place the tree in the stand, make a fresh cut into the base of the tree to enable it to absorb water better. Also, water your tree every day to prevent it from drying out.

2.        If you’re using an artificial tree, make sure that it’s fire-resistant.

3.        Place your tree in a sturdy stand so it doesn’t tip over. The tree should be placed at least 3 feet away from fireplaces, radiators, electrical outlets, portable space heaters and other heat sources. Do not block doorways or exits with the tree.

4.        Check your Christmas lights for frayed or bare wires, cracked sockets, or loose connections – and replace as needed, to prevent a fire or shock hazard.

5.        Don’t connect more than 3 miniature light strings together. Avoid overloading your indoor and outdoor electrical outlets.

6.        Check the rating on your extension cords and don’t plug in more than the recommended wattage. Also, don’t use indoor extension cords outside for your holiday light display, since indoor cords are not waterproof and can cause a fire in wet weather.

7.        Don’t run electrical cords under carpets or tack them up with metal nails or staples.

8.        Unplug all your holiday lights, both indoor and outdoor, every time you are away from home and before you go to bed every night.

9.        Don’t use real candles on your Christmas tree. Don’t leave candles or menorahs burning unattended. Keep them away from anything flammable, such a window treatments, decorations, and paper. Always extinguish all candles whenever you leave home or go to bed.

10.     Each year have your fireplace inspected and cleaned. Use a sturdy fireplace screen when burning a fire. Don’t burn wrapping paper or pine boughs in your fireplace, since embers can float out of the chimney and start a fire elsewhere.

11.     Keep all fireplace mantel decorations, including stockings, away from a burning fire.

12.     Test your smoke alarms to ensure they’re in working order.

13.     Develop a fire escape plan – identifying at least two exits for every room, and practice your fire escape plan with family members.

By following these tips, you’ll ensure that you and your family will celebrate many more holidays to come.

If you’re planning to purchase a new home or refinance during the holidays or in the New Year, contact Grandview Lending. We’ll be a happy to work with you for all your mortgage needs.

SIGTARP Cracks Down on Online Mortgage Modification Scams

At the end of November, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) shut down 125 online mortgage modification scams advertised on Google, Yahoo!, and Bing according to the National Mortgage News. The targeted scammers used deceptive Web banners and other online search advertisements, promising homeowners, that in exchange for a fee, they could lower the homeowner’s mortgage through the Home Affordable Modification Program (HAMP), TARP’s housing program. Instead, these advertisers or agents were scamming struggling homeowners. 

In the most common scheme, homeowners paid an up-front fee for the companies’ assistance to lower their mortgage payments. The advertiser or agent would tell the distressed homeowner to quit paying their mortgage and to stop all communications with their lender. Mortgage payments were then sent to the deceptive company and/or the homeowner’s property deeds were transferred. The homeowners’ financial information was also released. In some cases, these fraudulent companies claimed to be affiliated with the federal government by using a name similar to an actual government agency or by placing a government seal on their website. 

In cooperation with SIGTARP’s ongoing criminal investigation, Google and Microsoft, which created Bing and whose technology powers Yahoo! Search, suspended advertising relationships with the fraudulent companies identified by SIGTARP. In addition to stopping all future advertising with these companies, Microsoft also ended advertising relationships with over 400 Internet advertisers and agents associated with these alleged online mortgage modification schemes. Additionally, Google ended advertising relationships with over 500 Internet advertisers and agents linked with 85 of these scams.  

SIGTARP’s mission is to investigate and prosecute criminals who defraud homeowners in connection with HAMP. Plus, through education, SIGTARP wants homeowners to protect themselves from becoming potential victims of mortgage fraud.  

If you want to take advantage of a HAMP mortgage modification, you should work directly with your lender, a reputable mortgage provider, or through HUD-approved housing counselors. HAMP is a free program. You are not required to pay a fee. You should continue making your mortgage payments directly to your lender, and you should never send your payments to another company. Also, be aware that if someone tells you to stop paying your mortgage or to stop all communications with your lender, these are signs of a mortgage modification scam.