The guidelines for obtaining a mortgage these days favor those who get a regular paycheck. Even if you have almost no money for a down payment, the lenders are happy to lend, if you are what they consider “employed”. Doesn’t matter that you may be laid off and not be able to find another job. As long as you are getting that regular pay check when you apply for your loan, the lenders feel a sense of security.

This has hurt the entire California market but even more so those who earn their income in the entertainment industry. Unless you work full time for a studio or a production company – a production company with a long running show that is, it doesn’t matter if taxes are withheld from your check or not. If you work on various assignments and are only paid while you are working, you are considered “self-employed”.

How do the lenders analyze your income if you don’t have a regular paystub to show them?

First, they take your most recent two years of tax returns and analyze your income line-by-line. If you have received income on the first line (Line 7: Wages, salaries, tips, etc) the income from both years will be averaged. As long as both years are similar. If you made less income in the most recent year, they won’t average, they just use the lower year.

Each line will be averaged separately. For those who also receive checks without taxes being withheld (Schedule “C” income-Line 12) there is more to it. Each expense number that is broken out on the Schedule C form will be analyzed.

There is a different criteria for analyzing each line of your return.

If all this seems confusing, it can be. What’s most important for you to know is that if you are thinking of buying a home this spring or even in the next year or two, it’s important to have a mortgage expert discuss your options with you in advance. Too many buyers who earn a substantial living, assume that they can get whatever size mortgage they can easily pay each month. The problem arises when you try to use common sense – that doesn’t work anymore. Guidelines, with a few execptions, aren’t based on logic.

The truth is, California is different. Always has been, always will be. The government has mandated guidelines that work for middle America, but they forget there is a big country out there and a lot of borrowers have been left out in the cold. In many cases, it seems the more able you are to pay your mortgage payment each month, the less likely you are to fit today’s rigid guidelines.

Forewarned is forearmed. If you’re self-employed by the lenders’ definition, your work history – for the past two years anyway, becomes the focal point. Planning ahead can save you a lot a grief.

As underwriting guidelines for lenders become more stringent, we need to re-examine what a good mortgage application looks like. As you begin your search for a home, there are a few items that you should be aware of that will help get your loan approved – and with the best possible rate and terms. At the same time, if you are aware of these factors, it will lessen the stress that goes along with the mortgage process.

Income Documents

Most lenders want to see a full month of paystubs and one or two years complete Federal Tax Returns. Assembling them ahead of time and holding on to every paystub you get is a good idea even before you find a home or submit your mortgage application. It will save you time later.

If you are self-employed, it will be even more important to keep track of the money you earn. Make copies of each check you receive before you deposit it, even if there is no tax withholding on the stub.

If you receive other income, such as child support or alimony, and you want that income also considered, a stamped copy of your property settlement agreement will be necessary.

In fact, it’s very important to discuss all your sources of income with your mortgage professional before you begin your house hunt.

Asset Documents

Assets documentation will be examined for the 2 months prior to your applying for a loan. The lender will scrutinize your deposits. Anything over $500 will have to be explained and the source proven with documentation.

Optimizing Your Credit Score

Interest rates are credit score sensative, so even though you may have perfect credit, you may not use your credit enough, or you may have a temporary high balance (even if you pay off your cards in full each month). This, and many other factors, can decrease your score, and even though it’s over 700, you will pay a higher rate. Simply having no later payments is not always sufficient.

It’s also important to know that if you order your own credit report, the scores will differ from the report your lender “pulls”. The solution? Have your credit checked before you begin looking for a home. That way, you can adjust your spending, and balances to maximize your credit profile before actually applying for a loan.

Appraisal Concerns

Everyone is afraid they might be over-paying for their home. Remember, as long as you have an “appraisal contingency” in your offer, you are protected. If the appraisal comes in lower than the amount you have agreed to pay, you can either renegotiate the sales price, or come up with the difference in cash. If you renegotiate, the seller is usually (not always, but usually) open to that discussion because any other buyer will have the same problem when they get their appraisal.

If you are beginning your house hunting search within the next couple of months, you can get preapproved here, then you’ll be ready to go when you find your home.

A lot of borrowers will quite innocently cause the downfall of their mortgage.  You can avoid potential problems by following these 10 simple commandments:

1. Thou shall not change jobs or become self-employed.
2. Thou shall not buy a car, truck or van unless you plan to live in it.
3. Thou shall not increase your credit card balances or let your payments fall behind.
4. Thou shall not spend the money you have set aside for closing.
5. Thou shall not buy furniture before you buy your house.
6. Thou shall not originate any new inquiries on your credit report.
7. Thou shall not make any large deposits without FIRST CHECKING WITH YOUR LOAN ORIGINATOR.
8. Thou shall not change bank accounts or move money between accounts.
9. Thou shall not co-sign for anyone.
10. Thou SHALL tell your mortgage broker everything.

On occasion, you might have to break one of the rules in this list. Life happens and there is just no way to make it a perfect one.

When you simply must break one of the rules (with the exceptions of #10!), let your Loan Officer know about it right away. Let her know in advance it at all possible. There are ways to compensate for almost any sitution that can arise during the mortgage loan approval process. But it is much easier to anticipate a problem, than it is to pick up the pieces after the fact.

These numbers are truly amazing. It makes great financial sense to purchase a home today, and here’s why. Look at the actual COST of a home right now compared to previous years.

Residential real estate values have returned to 2003 first quarter prices. That in itself, says something, but when you factor in today’s much lower mortgage rates, the case for buying a home becomes even more compelling.

In 2003, 30-year mortgage rates stood at 5.88%. Today they are 4% or less. How does that impact the actual COST of a home? On a home purchased for $500,000 with a 20% downpayment here is the difference in monthly cost:

You not only are saving $458 each month, or $5,496 a year but over the life of the loan you save $164,796. You buy the home for the same PRICE but the COST is almost $165,000 lower.

Add to this the size of today’s mortgage payment vs household incomes and you’ll be even more surprised by the findings. JP Morgan Chase did a study of incomes vs mortgage payments today and 10 years ago. They found that to get to the same mortgage payment to income ratio, home prices today would have to rise by 27%. This means that given the same income, you can qualify for a 27% larger loan.

So, while some buyers are on the fence – they forget the big picture. All the stars are aligned, the same home prices but lower rates and higher incomes. Don’t miss the boat and one day say “I remember when I could have . . .”

It’s finally here. No matter how underwater your mortgage is you may be able to refinance to today’s low rates.

You current loan must meet certain criteria. Here are some of the highlights.

• There in no maximum Loan To Value.
• There is no Income Requirement
• There is no Asset Requirement
• Primary Residence, Second Home and Investment properties are eligible.

What’s the catch?

You may be eligible if:

• Your current loan is owned by Fannie Mae. Call or email us your address and we’ll look it up for you.
• Your current Fannie Mae loan closed prior to June 1, 2009.
• Your credit score is at least 620
• There is a reserve requirement if your property is a Second Home or Investment Property.

What about Mortgage Insurance?

• If you do not have mortgage insurance on your current loan, you will not have it on the new loan.
• If you have mortgage insurance now, it will continue with your new loan.

These are the highlights. If you want to begin to look at the possibilities for your situation, call or email us.

You’ve worked hard to get that listing appointment. Today is the day. Now what?

Frankly, most listing presentations are boring, boring, boring. Every real estate agent’s spiel is just about the same – the exception being the price. The agent thinks “how do I present a realistic price but compete with an agent who comes in with a high number just to get the listing? Most Realtors® rely on “chemistry”. I’ve talked with too many agents who say, “We really hit it off – I don’t know why they gave the listing to someone else”.

Here are some tips to make you stand out and be that Someone Else.

Know Your Market.

Become a student of the local marketplace and share statistics that will have meaning for your potential seller. Also track trends in the national marketplace. Even though it will not directly relate to your seller, it will distinguish you as a well-read, well-connected, and well-informed agent.

Ask questions and LISTEN. If you could listen in on typical listing presentations, you’ll hear the agent doing 80% of the talking, with the prospect hardly getting a word in. I guarantee you that the seller will be bored with your one-sided dialogue.What the prospect has to say is more important than what you have to say. Great salespeople do less than 25% of the talking.

Ask questions.

Especially if you had the homeowner fill out your Pre-interview Questionnaire before the meeting, you already know the questions you need to ask. Your prospect will be blown away by what appears to them to be great insight into their needs. It will be easy to match your presentation to their hot buttons.

Be a Clock Watcher.

Don’t overstay your welcome. Just like on a hot (or not so hot) date, you’ll sense when it’s time to wrap up. And don’t save the price recommendation until the end of your presentation. If you put your price recommendation at the very end of a long presentation during which you did 80% of the talking, you can pretty well predict that your seller will be tuned out.

Keep it short and sweet. Get right to the point . . . a 90-minute presentation is neither short nor sweet. Sellers don’t want to sit through a long appointment – they have other things to do, and they most certainly don’t want to listen to an agent for that long.

Within the first few minutes of the appointment, inform your seller that your listing presentation will take no more than 45 minutes. I can tell you that more than half of the sellers will thank you when you tell them that your presentation will be brief. Many times clients will actually come out and thank you again for not taking up too much of their time, (as you are leaving with a signed contract). A good, brief presentation results from a proper structure, a clear presentation plan, and knowing what to say and how to say it.

One additional bonus tip: I’ve seen MLS listings with property descriptions that are so bland and uninteresting that even the most exquisite home appears (on paper) to be nothing much. I’ve also seen listings that the agent has taken time to write in detail and with well thought out descriptive terms that make buyers excited about viewing a property. Take a look at the MLS and find a listing that didn’t sell. Read the description. Now find the same property’s new listing with a different agent. If the new description is far superior to the original, take a screen shot of each. (If the property hasn’t been re-listed, find a different property with a great description and use that – then go get the listing of the property that wasn’t re-listed.) By showing the seller the difference between the two word pictures, you will be showing how an effective agent works vs an agent who is just going through the motions.

Now, go get those two listings!

It’s human nature to think “it won’t happen to me. It’s always the other guy” but don’t kid yourself. As many as nine million Americans have their identities stolen every year. That’s a staggering number. If you’ve ever known anyone who has gone through this particular hell, you know how life-altering it can be.

Here are 6 simple steps to protect yourself.

1. Always shred financial documents or documents with personal identifies such as social security numbers.
2. Don’t carry your Social Security card in your wallet or imprint the number on your checks. Yes, some people still do.
3. Be especially alert for bills that don’t arrive on time, new credit cards that arrive unexpectedly or denials of credit for no apparent reason.
4. Inspect your credit report at least once a year. Better yet, sign up for one of the credit report monitoring services. There are more mistakes than ever on credit reports but even more important, reviewing your report can show you if someone has accessed it without authority.
5. Do not leave personal information out in the open. A trades person can scoop up a piece of paper without you knowing.
6. Always shred credit card applications that come in the mail unsolicited.

Hope this never happens to you or your loved ones, but you can help yourself by following the above steps.

For a list of Important Contacts that you will need in the event of Identity Theft, credit.com is a great resource.

Why move to an expensive new house when you can get all the new features you want in your existing home—without any net cost to you!

If your existing home has become outdated, cramped, inefficient, uncomfortable or too expensive to maintain, you may think buying a new house is the only alternative. But selling your existing home and buying again can be more expensive than you think. Factor in realtor fees, moving costs, a potentially longer commute and decorating/furnishing expenses—and the price of a new home may not be your best choice!

Fortunately, there’s a better solution. Renovating your existing home can provide all the lifestyle enhancements you’re looking for at a fraction of the cost. And if you renovate and refinance strategically, not only can your outlay be minimal, your increased asset value can be HUGE!

TIP #1: Make sure you understand WHY you’re renovating.

Before you go too far, stop for a minute and consider why you’re renovating. Is it to make your home more livable for you and your family? Or is it to make your home more marketable so it will sell at a higher price? Both of these are good reasons to renovate.

But an even better reason to renovate is to achieve BOTH! By making improvements that suit your lifestyle AND add value to your house, you can cover much—if not all—of your renovation expenses, so there’s no net cost to you!

TIP #2: Choose a renovation that delivers as high a return as possible.

Not all home renovations are created equal. Sure, almost all improvements increase the resale value of your home. But the increase may not always be enough to pay for the cost of the improvement. To make your renovations pay back as much as possible, it’s important to keep in mind what future buyers want, as well as what you want.

Fortunately, the renovations with the biggest payback are usually the ones you’re likely to want too. Here are the TOP THREE renovations for return on investment:

If the renovation you had in mind isn’t in the top three, here’s a list of the renovations that offer AVERAGE payback potential:

TIP #3: How to make your new kitchen increase your home’s value.

OK, so you’ve decided to renovate your kitchen. Great choice! Now here are the improvements you—and future buyers—are likely to find most appealing.

Open wide. Your kitchen should be the nucleus of your home, not an isolated warren that people visit only at feeding time. Consider removing walls between the kitchen and dining room or den. This gives your home an open feeling, as opposed to the chopped up look of outdated homes.

Triangulate. Create a triangle between the refrigerator, stove and sink so you can move efficiently from point to point. Ideally, the sides of the triangle should be 4-9 feet. Include an island if space allows.

Lighten up. Lighting should illuminate while setting a warm mood. Replace harsh overheads with hanging lights above work areas or recessed lighting under cabinets. Install dimmers. Lighting can create a dramatic difference very inexpensively!

Resurface. Painting or re-facing old kitchen cabinets and adding new door pulls makes a huge difference at minimal cost. Install hardwood or tile flooring. For extra drama (if it fits your budget), replace the countertop with natural stone.

Replace. Get rid of brightly colored or outdated appliances and replace with energy-efficient built-ins.

TIP #4: How to make your new bathroom increase your home’s value.

Whether you’re renovating an existing bathroom or adding a new one, chances are you’ll recoup most of your costs at resale time. Again, here’s what adds the most value for you and potential buyers.

Shiny and new. One truth about real estate is that buyers like new stuff. This is especially true in the bathroom where steam and water make fixtures age rapidly. New tubs, sinks and toilets should be white or cream. For extra pizzazz add a steam shower or whirlpool tub.

Resurface. As in the kitchen, paint or reface old cabinets and add new door pulls. Textured or slate tiles make great flooring, especially if they’re heated.

Lighten up. Make the room look airy and new with bright yet warm lighting and large unframed mirrors.

Maximize space. Choose a small but deep tub, and a tall but compact toilet. Eliminate cabinets and vanities, and install a behind-the-mirror cabinet or cut a niche into the wall. Choose a sleek wall-mounted or pedestal sink, the smaller the better. Use towel rings rather than rods.

TIP #5: How to increase your home’s value by painting.

Painting is so inexpensive—roughly 75¢ per square foot—yet it pays for itself in visual appeal and resale value.

Inside your house, warm and neutral colors such as bisque, cream, fawn, gray, walnut or soft green are often best for quick sale because they’re inoffensive and easy to cover. But you may prefer decorator shades, like vibrant red, bronzed orange, gray/brown or gray/green. Often these decorator shades have strong appeal for buyers too, but it may take a little longer to find the right buyer. Fortunately, it’s quick and inexpensive to change colors at resale if you have to.

The decision’s a little easier outside where natural colors like taupe, gray, olive, gold and warm brown are both stylish and easy to sell.

TIP #6: Energy savings and safety should also be considerations.

Up to now, we’ve been discussing renovations that enhance appearance, convenience and luxury. But there’s also value in more practical considerations. How much your house costs to operate, how green it is and how safe your family feels are equally important to you and future buyers. Here are some things that can save money—and may save your life!

•    Energy efficient furnaces and air conditioners

•    Improved insulation

•    Energy efficient windows

•    Ceiling fans in rooms with high ceilings to push warm air down

•    Heat circulating fireplaces

•    Low flow and dual flush toilets

•    Flood alarms and wired-in CO and smoke detectors

•    Security systems

Some of these items can be expensive, but over time the money you save on heat, light and water can pay for the upgrades—and make your home more appealing to buyers! For instance, installing an energy efficient furnace and air conditioner can cut energy consumption by 50%. You may also save on insurance by installing security systems and other hazard prevention devices.

TIP#7: Always keep marketability in mind.

Taking a strategic approach to renovations means thinking about future salability every step of the way. Here are some important considerations:

•    The more recent the improvement, the higher the return on investment.

•    Even if your renovations don’t recoup their entire cost, they usually make your home sell faster.

•    If your home’s market value is above the average for your neighborhood, expect a relatively low return on renovations. But if your home is below the average, your return will be much higher.

•    Renovations offer a better payback if you live in an appreciating neighborhood.

•    If the homes in your neighborhood all have family rooms or third bedrooms, it pays to bring your house in line.

•    For maximum resale value, renovations shouldn’t raise the value of your house more than 10-15% above the median sale price of other houses in your area.

TIP #8: Be sure you understand all the financial details before you start.

There’s no point calculating how much your renovations will pay back if you can’t afford to do them in the first place. You need to be absolutely clear on the costs before you begin. Get quotes from at least two local renovators, architectural firms or materials suppliers. Then, take the most reasonable quote and add 10-15% for unexpected costs.

To save money, you may be able to do some simpler steps yourself—like painting—but don’t overextend yourself and end up with an unfinished or substandard job. You may also be eligible for incentives from utilities or governments for energy-efficiency upgrades.

TIP #9: How to make your home pay for your renovations.

Now that you know what you want to accomplish and how much it’s going to cost, if you have substantial equity in your home that will probably be the least expensive source of funds. If you haven’t refinanced in a while, you may find that you can pull the cash from your equity with a new mortgage and still lower your payments because of the lower rates.

An equity line of credit is also an inexpensive possibility, but only if you plan to pay it off  sooner rather than later. Even though today’s rate is low, the “life cap” on equity lines is 18% and you don’t want to be caught in that trap.

This is the perfect time to raise the bar in your real estate business. Re-dedicate your efforts to list or sell more homes, make more contacts, learn more strategies.

The first step is your real estate marketing plan. Without a plan you’ll waste time and money.

Let’s work first from the numbers you want to hit. Download your Goal Setting Worksheet for 2012.

Now, how are you going to hit those numbers?

1.    First, spend some time cleaning out your database.
2.    Add all those new names you’ve meant to add but haven’t yet.
3.    Outline a 3-point marketing plan: internet, email and print. If you really want to surpass your numbers, add a 4th leg – public speaking, publishing or create your own radio show.
a.   Internet: This means your own blog – which you keep up to date. It also means social media, the more sites the better.
b.   eMail – regularly send a newsletter (not one prepared by someone else). Send this monthly. In the interim, if you have something newsworthy, create an additional email.
c.   Remember the days of the print newsletter? They are so unusual now that you will definitely stand out.
d.   For those who are really serious, becoming a public figure, even in a small pond, will send you over the top.

Most agents hesitate to spend money on marketing when business is slow, yet that’s when it’s needed the most. The top real estate agents across the country spend as much as 10% of their income on marketing.

Make the biggest splash with the least amount of time invested by deciding exactly what your marketing plan will consist of, plugging it into a calendar, then following it daily.

Here are the 6 marketing traits of the top real estate agents in the country.

1) Set Clear Objectives
2) Invest 10% of their earnings into marketing:
a) Specialty print
b) Internet
c) Other
3) Spread the wealth
a) Do not market in one area only – use internet, print, FB ads, etc.
4) Learn New Technology
5) Track their results
6) Constantly Think About How They Can Stand Out From the Crown

Remember, it’s all about visibility and consistent communication.

For any of you who haven’t heard this ….. this month all cell phone numbers are being released to telemarketing companies and you will start to receive sales calls.

…. YOU WILL BE CHARGED FOR THESE CALLS

To prevent this, call the following number from your cell phone:

888-382-1222.

It is the National DO NOT CALL list It will only take a minute of your
time. It blocks your number for five (5) years. You must call from the
cell phone number you want to have blocked. You cannot call from a
different phone number.