Pasadena Real Estate

My emphasis on this Pasadena real estate blog has been to provide both home buyers and home sellers the most up to date data of what is going on in our local real estate market.  Recently, I've been mentioning that multiple offers have been prevalant in Pasadena and surrounding neighborhoods.  Also, as the home buyers that I work with know, pre-approval with several direct lenders is critical to the success of winning your home purchase bid.

The question does come up though - Will my Credit or FICO score take a hit if I get pre-approved with multiple lenders?

Some home buyers are concerned that multiple applications will hurt their credit scores.  Rightfully so!  If not done correctly, you may see a bit of a deduction on your FICO Score.

READ MORE:  5 tips to improve your FICO scores

Here's what you absolutely need to know:

Multiple credit inquiries and their timing play a role in your overall FICO score!

Credit score agencies usually group together multiple inquiries for the same type of new loan over a short time period.  This allows home buyers to shor for their interest rate.  However, the duration of that time period varies among different credit scores according to Cynthia Baker, a spokesperson for the Experian credit bureau.

The current FICO score uses rolling 30-day to 45-day "buffers" to group related inquiries, but older generations of the score still in use may have shorter inquiry grouping buffers, according to Craig Watts, a spokesperson for Fair Isaac.

So... if you are shopping for a home for sale, I strongly recommend that you get pre-approved with several direct lenders at about the same time.  My suggestion is that you call your real estate agent's recommended home lenders around the same time, not more than a week apart.  Both home lenders will require the same information for the pre-approval process.  It's easier to just collect the necessary paperwork and forward it to the lenders at the same time. 

Once you find your Pasadena home, you can just make a quick phone call to see who has the best interest rate and concentrate all your attention on the home, condo or townhome that you are purchasing.

Buying property in Pasadena doesn't have to be difficult.  Make sure that you work with a reputable real estate agent who can take you through the process of buying your next home.

Read More:

Getting More House for your $

9 Stupid Things Buyers do to mess up their home purchase

The fastest way to lose your earnest money deposit

Homes for Sale Information:

South Pasadena City Guide

If you are thinking of buying or selling your Pasadena home, condo or townhome, please give us a call for a comprehensive and free consultation. We can be reached at 626-204-3340.

IRINA NETCHAEV & ASSOCIATES

Pasadena Real Estate Agents

445 South Fair Oaks Avenue

Pasadena, CA 91105

(626)204-3340

With Station Fire burning for the last week or so, home insurance carriers are taking a strong stand when it comes to providing fire insurance to Pasadena home buyers. 

A United States Forest Service air tanker drops fire retardant next to a line of fire as the Station fire burns in the hills above a home in Acton last night (AP Photo/Dan Steinberg)

One of the conditions of getting a home loan is to provide evidence of fire insurance.  Certain insurance carriers have advised home buyers that they are no longer writing insurance policies in certain zip codes until the Station Fire is out. 

If you found a home and are currently in escrow with an anticipated closing date over the next few weeks, your closing might be affected.  I currently have several home buyers in this situation.  One of my buyers, who is buying a house in La Crescenta which is closer to the fire, was able to get the carrier to issue a home policy by increasing their deductable temporarily.  Once the Station Fire is over, they will lower the deductible to the original policy agreement.

Another one of my home buyers, who is buying in the San Rafael hills of Pasadena, has been told that the entire zip code is not eligible for new insurance policies.  Even though, this home is totally away from the fire zone and has not even come close to being evacuated.

So, if you are buying a home in Pasadena, La Crescenta, La Canada, Glendale and other fire affected cities, please contact your insurance carrier immediately to ensure that you will be able to get fire hazard policy and your home closing will not be affected.

Read More:

The fastest way to lose your earnest money deposit

9 Stupid Things Buyers do to Mess Up their House Purchase

Save Thousands of $s with Home Inspections

Pasadena Real Estate Guide

PMI stands for Private Mortgage Insurance.  This is an insurance that protects lenders against potential borrower defaults and is usually a requirement for any home loans where the home buyer puts less than 20% down.

Historically, PMI was one of those real estate expenses that could not be deducted, but congress has allowed certain home borrowers to deduct the PMI expense.

But to qualify for the deduction you must have bought or refinanced your home since Jan. 1, 2007. This deduction is only available for PMI premiums paid on the original loan for a property acquired or refinanced between 2007 and 2010 and may be deducted as mortgage interest.  Any prepaid mortgage interest must be deducted evenly over 84 months and, therefore, can't all be deducted in the year of payment.

Families with adjusted gross incomes of up to $100,000 can deduct 100% of their insurance premiums, much the same as they deduct property taxes. The deduction is then phased out up to an adjusted gross income of $110,000.

How much is PMI?  The annual premiums run about 0.5% to 0.75% of the outstanding balance, $500 to $750 a year for every $100,000 you owe.

So if you purchased your home, condo or townhouse in 2007 or later, do not forget to take advantage of this nice tax deduction if you qualify.

Read More:

Pasadena Real Estate Guide

Real Estate Market Report for Pasadena and surrounding cities

Getting More House for your $

If you are thinking of buying a Pasadena home, Pasadena condo or townhome, please give us a call for a comprehensive and free consultation. We can be reached at 626-204-3340.

IRINA NETCHAEV & ASSOCIATES

Pasadena Real Estate Agents

445 South Fair Oaks Avenue

Pasadena, CA 91105

(626)204-3340

There are multiple announcements about how home buyers can now use the $8,000 tax credit to use as the down payment on their home purchase. Let no one say that I'm a "party pooper", but somehow, I can not get excited by this announcement.

Why?  Well... let's take a look at the announcement made by HUD (US Department of Housing and Urban Development) first:

DONOVAN ANNOUNCES RECOVERY ACT'S HOMEBUYER TAX CREDIT CAN IMMEDIATELY HELP THOUSANDS OF FIRST-TIME HOMEBUYERS TO BUY A HOME
FHA plan will stimulate new home sales and help stabilize housing market

WASHINGTON - Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration's new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today's action will help stabilize the nation's housing market by stimulating home sales across the country.

The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today's announcement details FHA's rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA's new mortgagee letter, visit HUD's website.

"We believe this is a real win for everyone," said Donovan. "Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation's housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we're doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing."

First of all, let's get this straight.  You will only qualify for the full $8,000 if your adjusted gross income is not over $75,000 if you are single or $150,000 for joint filers.  If you are make anywhere between $75,000 and $95,000, this tax credit begins to phase out.  And, if you are fortunate enough to make over $95,000 or $170,000 for joint filers, you will not qualify for any tax credit!

Second, the tax credit is only 10% of purchase price UP TO $8,000.

Third, let's face this... this loan will be considered as DPA or better known in the lending industry, Down Payment Assistance.  Any type of down payment assistance has to be accounted for in the borrower's Debt to Income Ratio.  If you are an FHA buyer and already are trying to qualify for 96.5% of the value of a home and now you will have yet another DPA on top of that, the chances are no bank will ever approve you for the mortgage.

Fourth, this essentially is a short term, bridge loan.  I do not see HUD stating anywhere that this loan is going to be free.  Short term bridge loans are usually expensive.  Would you, as a first time home buyer, be willing to pay 8% to 10% interest on this money?

Five, how long do you think it will take the government to approve you for this loan?  Do you think that they'll be able to make the 7 to 10 day loan contingencies that we're seeing on our contracts now?  I doubt it!

And, finally, how much will the banks charge to set up this loan, to print loan docs or any other expenses associated with processing tihs loan?

Sounds like a lot of fairy dust to me.  What do you think?

READ MORE:  Pasadena's Real Estate Market Activity:  Back to Basics

Pasadena Real Estate Guide

Read 5 home buyer tips for getting more home for your $.

9 Stupid Things Buyers do to Mess Up their Home Purchase

Multiple Offers on Pasadena Homes?

State of the Pasadena Housing Market by Chief C.A.R. Economist

If you are an LAUSD (Los Angeles Unified School District) employee, you may qualify for a special home loan through CalSTERS.  This special home loan program is open to over 700,000 CalSTRS members including LAUSD employees and college educators.

To assist in purchasing your Pasadena home, CalSTRS offers an 80/17 loan program.  Here is what it looks like:

• You need to have a 3% down payment.  2% of the down payment can be gift money, but not from selling property.
• 1st home loan (mortgage) will be 80% of the purchase price.
• 2nd home loan (mortgage) will be for 17% of the purchase price.  BUT, payments on the 2nd mortgage are deferred for 5 years!
• There is no Mortgage Insurance
• There is no Pre-Payment penalty.

This special home loan is available for single family homes and Fannie Mae approved condos only.

So if you are thinking of buying your Pasadena home and work for LAUSD, don't forge to check into this CalSTERS loan.

Read More:  Pasadena City Guide

                  South Pasadena City Guide

                  San Gabriel City Guide

                  San Marino City Guide

What a great opportunity!