Buyer Pitfalls To Avoid Prior To Closing On A Home

1)      CREDIT INQUIRIES - Please do not allow your credit to be pulled during the loan process. Your scores are reduced when pulled multiple times and can adversely affect your scores and could affect your loan approval or interest rate.  A credit comparison report will be pulled at funding and any variances will need to be addressed and could put your funding at risk.

2)      MAJOR CREDIT PURCHASES – Do not make any major purchases on credit without contacting me first.  This includes major purchases such as a car, or furniture, etc. which you may want for your new house.  These will affect your debt ratios and your credit scores and possibly your approval.

3)      MONTHLY PAYMENTS – Make all of your monthly obligation payments ON TIME. Your credit will be pulled again prior to closing, and any late-payments, collections or charge-offs could adversely affect your loan, even up to the day of closing/funding.

4)      BANK STATEMENTS & OVERDRAFTS – Do not have any NSF charges on your bank statements between now and closing.  Copies of your bank statements could be obtained prior to closing.  Overdraft charges will signal the underwriter that you are unable to maintain monthly financial responsibility, unless the charges were due to extreme circumstances beyond your control. Please keep all bank statements (Savings, checking, assets, etc) from now until closing.

5)      EMPLOYMENT – If your employment situation should change, or you are thinking about changing your employment situation, call me immediately.  Income and employment are primary factors in final loan approval.

6)      TAX RETURNS – Up to three years of tax returns will be verified using a third party service.  All taxes liabilities owed to the IRS on the returns must be paid and supported via cancelled checks or bank statements.  It is imperative that you let us know if you have not filed a tax return, filed a return late or filed an extension anytime during the last three years.

7)         ASSETS- Any large deposits or withdrawals on your bank account will need to be sourced from  

        beginning to end. If you are going to make a large deposit please get with me for the exact  

        Requirements for documentation so that it will not affect your loan approval.

IF YOU ARE INTERESTED IN PURCHASING A NEW HOME IN THE DFW AREA PLEASE CONTACT TEAMDECLL.  YOUR REAL ESTATE EXPERTS!

Home Buyers beware of making any large purchases or applying for any types of credit prior to closing on you home.  AFTER closing, buy what you wish!  Lenders are now requiring a 2nd credit report to be pulled with in 24 hours of closing.  If a home buyer has applied for credit to purchase new furniture, for example, this could throw your ratios off, and changed your credit score.  The lender could then possible decline to give you a loan, and you were perparaing to move the following day.

Now after you have closed, the skys are the limit.  Once the lender gives you the loan he won’t take it away.  Buy what you want.

This is another instance of the continued tightening of the belt by lenders.  Loans are becoming increasingly harder to get, so buyers need to be very wise.  Before you do anything contact us and we can guide you through this ever changing process.  Don’t let a mistake cost you the purchase of your next home.

If you are interested in purchasing or selling a home in the Frisco, Plano, Allen, or McKinney area’s please contact TEAMDECELL!

 Here we go again with additional changes in the already trouble world of Mortgage.  It seems that the only thing that is certain is that the mortgage industry is going to continue to change.  If you are considering the sale and purchase of a home it is crucial to speak with a LOCAL Lender that can walk you thru this very complicated process. 

I say LOCAL because many consumers have used mortgage institutions over the internet only to find that the loan does not close or the fees have drastically changed.  Work with your Realtor because they will usually have a recomendation of someone that they already have a relationship with.

TEAM DECELL is your neighborhood experts.  We assist clients in buying or selling their home in Frisco, Plano, McKinney, Allen and the Surrounding Area. We also have relationships with Lenders that have a proven track record and can get the job done in a painless and timely manner.  Don’t let the inexperience of others spoil your Home Purchase.  We have a team of experts that will take care of your needs.  Below are the upcoming changes.

1. Mortgage insurance premium (MIP)  increased to build up capital reserves and bring back private lending.
   1. FHA will raise the up-front MIP to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
   2. If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
   3. This will allow for capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
   4. The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.

1. Update the combination of FICO scores and down payments for new borrowers.
   1. New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
   2. This allows FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
   3. This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.

1. Reduce allowable seller concessions from 6% to 3%
   1. The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
   2. This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.

1. Increase enforcement on FHA lenders
   1. Publicly report lender performance rankings to complement currently available Neighborhood Watch data - Will be available on the HUD website on February 1.
   2. Enhance monitoring of lender performance and compliance with FHA guidelines and standards.
   3. Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process
   4. HUD is pursuing legislative authority to increase enforcement on FHA lenders.

1.  Not doing your homework

 
You’ve probably heard the old maxim: “Knowledge is power.” Nowhere is this truer than in real estate whether you’re buying a home or selling a home.  With a price tag that’s two or three times your annual salary, if ever a purchase demanded preparation its home buying. 

It can be overwhelming when you think about all the factors that can affect a home’s value: its location, the school district, deed restrictions, taxes, amenities. That’s why it’s imperative that you do your homework before you start. With all of the information available today on the Internet, from Realtors and in housing guides, there’s really no excuse for entering the market ill-prepared.

2. Trying to make a shrewd investment 

It’s easy to think we are all financial geniuses. No doubt some of you are. So, Mr. Gates and Mr. Buffet, you have my permission to move on to the third biggest mistake in home buying. As for the rest of you, forget everything they told you in that late-night infomercial. While real estate investing can make a great career, it’s no place for amateurs. 

As simple as it may sound, when it comes to buying a home, your best bet is to choose one that appeals to you. The chances are very good that if you like it others will, too.  But also use an expert, that’s what realtors are for.  Our job is to know the market and to assist you in making the right decision.

Am I suggesting that you throw caution to the wind? Lead with your heart and not with your head? Absolutely not, but if you choose a neighborhood where you and others like you want to live and a home that’s attractive and structurally sound, then you probably won’t go wrong. If you want to be known as a shrewd real estate investor, then wait at least three to five years before selling and you can tell everybody that you outguessed the market.

3. Choosing a poor location 

OK – you’ve found the perfect home. It’s in a good school district, it’s got great curb appeal, a terrific floor plan that fits your family and the price is right. The only drawback is the bowling alley that backs up to it. Walk away. 

Nothing spoils life and resale value like a poor location. If it bothers you now, don’t think you will learn to live with it. The flood lights from that office building across the way will only get brighter with time. The planes on final approach to the airport will only get louder and more frequent.  This is where your realtor can assist you.  The builder or the seller is not going to tell you what is in the vacant area in the field right behind the house.  Your realtor can look up in the city plans to find out what that area is zoned for in the future. 

The best looking home, the most extravagant landscaping, tall fences, and insulated windows will never overcome a home site near a pig farm (no offense to pig farmers).

 
4. Overlooking an inferior floor plan for an attractive exterior 

I don’t mean to downplay the importance of curb appeal. A home that turns your head as you drive down the street can be a real asset. Resale will be a lot easier if you don’t have to stand on the curb shouting, “No, wait! I know it looks bad, but this home’s got great personality!” If the romance doesn’t continue when you open the door, then you’ve got a problem that will be difficult to unload. 
   
You want a home that makes your heart beat faster when you first open the door. It’s got to have a layout that makes people feel comfortable, one that responds to the way we live today. Open. Friendly. Functional. 

I’ve seen it happen a hundred times. Buyers approach a home with an exterior they’re not crazy about, then they discover a fantastic floor plan, and when they come back out, the exterior seems to have magically improved. 

If I had to choose between a good-looking exterior or a knockout interior – and I couldn’t have both – I’d choose the great interior any time. After all, that’s where you live every day.

5. Not considering how your family wants to live

 
We all carry around a mental picture of the perfect home. If you’re a child of the 60’s your ideal home probably looks like the Cleaver’s house. Younger shoppers may be searching for the Brady’s or the Cosby’s home, or maybe even the Taylor’s home from Home Improvement. These images seldom fit the way we really live. 

It’s also not about finding a home your parents would like (unless they’re helping with the down payment). It’s not choosing a home your best friends would want. 

This home only needs to fit one family – yours. Your comfort and happiness depends on how well you can judge that fit. 

Start by thinking of how you live now. Try not to be influenced by those fantasies of how life would be if only you had the right home. If your idea of fun is watching reruns of Jeopardy in your pajamas, then look for a TV room that accommodates your favorite naugahyde reclining lounger. If you like to have friends and family over for informal get-togethers, then look for a large kitchen that’s open to the Family Room. How many rooms do you need? How should they be arranged? Master up or down? Will you have use for a home office? 

Don’t overlook how your family lives outside, as well. Will you use a pool or would a hot tub suffice? Do you like to garden and work in the yard, or would you rather have less maintenance? 

If you’re buying a used home, you’ll have to look beyond the current owner’s décor and furnishings. If it’s a builder’s furnished, new model home, the toughest part will be facing the fact that the decorator and furniture don’t come with it. If you’re honest with yourself, you can find a home that will fit your family and feel like…well, home.

6. When buying a resale and new construction, not having the home properly inspected 

I can’t emphasize this one enough. When you find your dream home, it’s love at first sight. As with all love affairs, you begin to lose your objectivity and see only what you want to see. “OK, so the foundation is cracked. But, isn’t this the cutest little window you’ve ever seen?” Now is a good time to seek professional help. 

They’re called structural and mechanical inspectors. Good ones are worth every penny you pay them. A good one is licensed by the state (ask to see his or her certificate) and has no personal relationship with you, the seller, or the Builder. This is someone you pay for a professional, unbiased opinion about the structural integrity and mechanical performance of the home you’re planning to buy. They will inspect every major component of the house from the foundation to the rafters, including the central air, furnace, water heaters, plumbing and electrical. You will also want to have the home inspected for termites. As much as it may hurt to hear something negative about the one you love, this is when you want the ugly truth. 

Many resale homes were built when energy codes were more lenient or nonexistent. Independent third-party performance verification inspections that test for energy-efficiency can make a big difference in the performance of your home and its effect on your pocketbook. 

You and the seller will be given a written report with a list of items that must be repaired before you close the deal. Usually the contract spells out limits on what the seller is obligated to pay for repairs. If the cost of recommended repairs exceeds this amount and the seller is unwilling to pay for them or to adjust the sales price, DO NOT proceed. (You may elect to pay the difference if the overall deal is still a good one.) This could be the toughest decision of your life, but ignore the engineer’s warning and you will live to regret it.

7. If buying new, failing to check out the builder’s reputation 

If you’re shopping for a new home, you probably know where you want to live, so you’ll be comparing homebuilders in that area of town. You’ll look for home designs that appeal to you in a price range you can afford. Once you’ve narrowed your search to one or more builders’ homes, your next step should be to take a long hard look at the builders. Here are the most important questions you should answer about any builder before you let them build your home:

· How long have they been in business? 

· How many homes have they sold? 

· What do their Homeowners think of them?

· How many of the Homeowners would buy from the builder again?

· What do other builders say about them?

· What industry recognition have they received?

· What does the Realtor community think of them?

· What kind of warranties do they offer?

· Do they have a department solely dedicated to warranty issues?

· Do they have an energy-efficiency or green building program?

The best way to check out a builder is to ring some doorbells and knock on doors. Visit the neighborhoods where they build and ask Homeowners about their experiences. You should talk to at least three to five neighbors and get a consensus before you make one of the largest investments of your life. 

If you don’t get satisfactory answers to most of these questions, choose another builder. If none of them pass this test, choose another part of town. Beyond all the fancy advertising and hype, builders have only one thing of real value: their reputation. If the one you’re considering doesn’t have a good one, they shouldn’t get your business.

8. Not getting what you want because you’re impatient 

To borrow a phrase from the Rolling Stones, time is on your side. Show me someone in a hurry to buy and I’ll show you someone who pays too much. There are a lot of things you can rush into and recover from later, but this does not include marriage or buying a home. Never, ever, ever, rush into buying a home.  It is the single largest investment most of us ever make. It requires an enormous amount of energy, effort and research. It takes time to do it right. 

You need time to do your homework. You’ve got schools to check, tax rates to compare, mortgage companies to shop, neighborhoods to drive.

If it’s a pre-owned or new home, you need time to negotiate. Seldom should you pay the “asking price” on a pre-owned or new home. The longer you can take, the better the deal you can usually make. If you find yourself in an unavoidable time bind because of a transfer or the impending sale of your home, try to make arrangements to delay the purchase. You can always store your non-essential things and rent in the interim. Sometimes people who purchase your home are willing to lease it back to you on a pro-rated basis if you need extra time. It doesn’t hurt to ask and it could save a lot. Do the math. If patience can save you $5,000 on the purchase price, wouldn’t that be worth it? 

Whatever you do, even if you don’t have time and you must move forward, try not to show it until after the price is set.  This is best accomplished with your realtor.  You can walk away from the table and let the realtor begin talks with the builder or the seller.  The builder’s goal is to sit you at the table and get you to sign when you’re all excited.  Think about it, the seller is always in it to get more money.  The salesman for the builder and the listing agent for the seller both represent the owner and their best interest not yours.

9. Waiting for a better time to buy based on the market and interest rates

 
Buy low. Sell high. It’s a great plan if you’re a fortuneteller, but for the rest of us mere mortals, here is the best advice for when to buy a home: There is no time like the present. You know what houses cost. You know what interest rates are. You know you have a job (If not and you’re not independently wealthy, maybe you should consider putting it off).  

Warren Buffet says, “The rear view mirror is always clearer than the windshield.” Looking back, we can all see when the best time to buy a home would have been –it is hard to find a better time than the present. Who can predict the future? The best we can do is learning from the past. History shows that those who purchased homes and kept them for three to five years or more did better than those who didn’t. How can you argue with that?  

Will interest rates be lower some day? Maybe – then you can refinance. Will home prices ever be significantly lower? Probably not! Will you be making money in the future? We all hope so. Do you have a crystal ball? Stop your waiting. Just do it.

10. And the biggest home buying mistake…drum roll, please…

                                           not buying at all!  

No place to call your own. No control. No tax break. No appreciation. No equity.

No kidding.

Information is provided by TEAM DECELL.

The summer’s trend of rising home prices is ebbing as the traditional home shopping season end, two reports Tuesday showed.

The Standard & Poor’s/Case-Shiller home price index of 20 major cities rose 0.3 percent to 144.96 in September, the fourth monthly increase in a row. The seasonally adjusted index is now up more than 3 percent from its bottom in May, but still 30 percent below its peak in April 2006.

Another reading of home prices by the Federal Housing Finance Agency held steady from August to September.

Homes for sale in Frisco continue to meet or beat market expectations.  Home sales in Frisco have consistently risen for the past 5 months and the days on the market continues to decline.  That is a definite indicator that Frisco Homes Sales is strong and vibrant.  

If you are interested in talking to someone about your options please call us.  If you are interested in homes for sale in Frisco,  Plano,  Allen and  in McKinney area TEAMDECELL is who you need to call.  We also assist our clients with New Construction as well.  We are your home town experts and offer excellent customer service.  214-975-3210

The week began with September Pending Home Sales coming in UP for the eighth month in a row. The National Association of Realtors index was UP 6.1% for the month, and UP 21.2% over September a year ago! The index hit 110.1, with 100 equaling the average level of sales contracts in 2001, the first year measured by the index.

And, yes, the Mortgage Bankers Association once again reported the average contract interest rate for 30-year fixed-rate mortgages dropped. This time it hit 4.97% with points sinking to 1.01 (including the origination fee) for 80% loan-to-value (LTV) ratio loans.

Information Provided By TEAM DECELL 214-975-3210

2335 Jaguar Dr in Christie Ranch of West Frisco has been reduced.  This home has been reduced from $327K to $290K.  Grand Homes just finished building and is ready to sell this property.  The home is 3810 Sq. Ft with 4 bedrooms, 3.5 baths and a game room and a media room.  Hardwood floors throughout and granite counter tops are some of the upgrades.  At the new low price the home won’t last long. 

For more information on the Frisco, West Frisco and surrounding area or Builders and Home Foreclosures call TEAM DECELL at 214-957-3210.  TEAM DECELL is here to meet all your real estate needs.

What in the world is Stagflation?  Is that even a word or do people just make this stuff up?  This is the latest in buzz word being used to describe the projected up coming condition of our economy.  It’s a period featuring both high prices and high unemployment and whether or not that would blight the U.S. economy.

The stagflation debate arose anew on Friday when a worse-than-expected employment report and a record single-day surge in crude oil prices made economists once again consider the possibility that the U.S. economy could drop into a recession even as inflationary pressures spiraled higher.  Texas is the one state that is almost recession prove.  Cities in the Texas like Frisco, McKinney, Allen, and Plano did not experience bad unemployment numbers. They are experience job growth.

How to prepare:  Here’s the bad news: Preparing for stagflation is tough. You can probably count on one hand the number of rich neighbors you’ve had who can brag about the fortunes they amassed during the 1970’s. There just aren’t that many such folks around.

Stagflation Play No. 1: Housing

The simplest stagflation-proof investment is housing. While mortgage interest rates are still around 6% and inflation is above 4%, the real cost of borrowing is very cheap and housing prices are likely to rise. At least, that’s what usually happens.  Real Estate has always been a solid investment especially here in the DFW area.  Frisco is still one of the fastest growing cities in the US.  In the US, DFW is listed as one of the top 5 cities to live in.  Frisco and the surrounding area population is expected to double in the next 10 years. 

Unfortunately, we’re currently in the midst of the biggest bear market for housing since World War II, and home prices seem to be nowhere near the bottom. Nonetheless, take a moment to remind yourself of an important point: Housing prices will not keep dropping forever.  The Texas real estate market doesn’t have the same problem as some of the other over inflated areas of the country.  Specifically West Frisco, Frisco, McKinney, Plano, and Allen real estate prices are on the up swing.    While the rest of the Nation a decline of about 25% to 30% is about the limit- and every percentage point increase in the rate of inflation is a percentage point that house prices don’t have to drop, because wages (which tend to track inflation) will rise to meet house prices.

So if you have spare cash, good credit and good access to the home foreclosures in your area- and if prices seem to be bottoming out- you could do a lot worse than to pick up a rental property or two.  The Frisco Foreclosures have remained stead and a good deal.  The key is to get in the game.  If you are afraid to buy rentals then consider upgrading your personal home.  If you own a 200K home increase to a 300K home, the same rules still apply.  West Frisco, Frisco, Plano, McKinney and Allen areas are great places to invest.

Even during periods of stagflation, people have to live somewhere. And unless the “stag” component gets really bad, as a landlord you can afford to put up the rent yourself from time to time.  Even if people can’t afford to purchase a home they can rent yours. 

Just make sure of two key things: Finance the investment very conservatively (a down payment of 30% is the way to get the cheapest mortgage) and be pretty sure your rental income will exceed your financial outlays.  If you would like more information on Frisco Homes, Frisco foreclosures or buying rental properties call TEAM DECELL with REMAX Summit Realty at 214-975-3212.  TEAM DECELL has 35 years of collective real estate experience.  They will coach you in the real estate process from start to finish.

Precious Metals Plays

The kerfuffle about madly rising oil prices has obscured the fact that gold prices haven’t risen nearly as much, and are still below the $900 per ounce level. Since the equivalent of the record peak in 1980 in today’s money is over $2,200 per ounce, gold has a long way to rally from here. Gold is a thin market, and so it’s likely that its price will fluctuate wildly both up and down- the up being a huge profit opportunity and the down being a huge risk if you get too greedy.

Nevertheless, the SPDR Gold Shares Trust (GLD) exchange-traded fund (ETF) is well worth holding as a protection against increasing inflation. Just don’t expect to sleep at night if you buy too much.

You may do even better in silver. The iShares Silver Trust (SLV) ETF invests in silver just as GLD does in gold. However, silver is only at one-third of its 1980 high of $50, even in nominal terms, meaning that at the current price of $17 silver has a huge upside if inflationary speculation were to really take hold.

Silver is also a thin market, however, so it’s only for the risk-tolerant.

Cash is King - Even With Funds

For the rest of your portfolio, I’d actually suggest a money-market fund. In the early phase of stagflation, interest rates are far lower than the inflation rate, and so money market funds lose you money in real terms- AND you have to pay tax on the income to Uncle Sam. However, once stagflation has taken hold, investors will no longer accept interest rates below inflation, and so both short-term and long-term rates zoom skyward.

This reality makes bonds an awful investment: You lose the value of your principal, owing to inflation, and the actual cash value of your bonds declines as interest rates rise.

However, money-market funds are reinvested every three months or so, and quickly get the advantage of higher interest rates, enabling them to keep pace with inflation. In the later stages of stagflation, when the U.S. Federal Reserve gets serious about stopping it, interest rates move much higher than the rate of inflation, so your money market fund becomes nicely profitable even when other investments are still in the doldrums.

Calling the End

It’s vitally important to know when stagflation is ending. All the investments that made sense in a period of stagflation make much less sense once the stagflation ends: Gold, silver and, especially, oil, are likely to see their values fall like a stone dropped from a very high place.

The trick here is to watch short-term interest rates. Only when they have been far above the inflation rate for a lengthy period- in 1979-82, for instance, it took nearly three years- inflation will finally come down and sustained economic expansion will be able to resume.

As we’ve noted several times here at Money Morning, Brazil has done very well in the past few years with inflation of 5% and interest rates above 12%. The U.S. equivalent would have the benchmark Federal Funds rate above 10%, while inflation is still at its current level of 4% to 5% (in 1980, when inflation was higher, the Fed Funds rate peaked at 20%). So wait till that happens. A Fed Funds rate of 5%, 7% or even 8% won’t do it- these are wimpy half-measures. Indeed, only when the Federal Funds rate surpasses the 10% level- and stays there awhile- can we be certain that stagflation is being driven back.

Finally, let’s get to some good news. If you still have some cash at the end, when the Fed finally gets around to raising interest rates high enough to kill inflation, and the economy emerges from stagnation, you’re in a wonderful position.

Somebody once asked the oil billionaire J. Paul Getty how to become a billionaire. “Start as a millionaire,” he responded, “and buy in 1932.”

The same was very nearly true for those who started as millionaires and bought in 1982, particularly if they leveraged a bit. The secret was to know when stagflation was ending- and to have the million dollars to invest at the end of that very difficult 15 years.

So again, if you would like more information on Frisco Homes, Frisco foreclosures or buying rental properties call TEAM DECELL with REMAX Summit Realty at 214-975-3212.  TEAM DECELL has 35 years of collective real estate experience.  They will coach you in the real estate process from start to finish. 

1364 Morris Lane is a precious Cambridge Luxury Patio Home in gated community of Creekside at Stonebriar. Open floor plan has soaring ceilings, gorgeous moldings & ceramic tile flooring. Family room with fireplace is open to kitchen. Kitchen features granite counters and island for prep work. Wonderful storage in this beautiful home. Spacious master suite includes sitting area, enormous closet, and beautiful bathroom. Washer, dryer and refrigerator are included. Furniture is negotiable. For additional pictures and information click on the address link or for information on the Frisco and West Frisco Area or on any Frisco Foreclosure call: TEAM DECELL at 214-975-3210.