Michael Santos

MLB Residential Lending

What Is A Short Sale?

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What Is A Short SaleNobody enters into a mortgage assuming they are going to fall short on their payments; however, life happens and borrowers might need a way out. In serious situations, lenders may elect to foreclose on homeowners who are unable to make their mortgage payments. Fortunately, there might be another way out. This is called a short sale.

A short sale can be used to help homeowners who are struggling cater to those who are looking to buy a home. At the same time, there are risks to both parties. Therefore, there are a few important points to keep in mind.

What Is The Structure Of A Short Sale?

If someone owes more on their mortgage than the property would otherwise sell for, this is called a short sale. In this situation, the lender accepts the money coming from the sale of the home rather than that money going to the homeowner. This is because the homeowner still owes a significant amount of money on their mortgage.

Take, for example, someone who owes $300,000 on their mortgage. In a short sale situation, he or she would sell the home for $250,000 in a short sale. In this fashion, the lender agrees to accept a smaller amount of money for the home than he or she would get otherwise. In essence, the lender is then short $50,000. This is where the name comes from.

This is different from a foreclosure. A foreclosure happens when the borrower falls so far behind on payments that the lender reclaims the property.

The Benefits Of A Short Sale

The biggest benefit of a short sale is avoiding foreclosure. A foreclosure is a disastrous event for someone’s credit score. When someone agrees to a short sale process instead, he or she will often buy a more affordable home shortly thereafter. 

Buying A Home In A Short Sale

On the buyer side, the biggest benefit of targeting a short sale home is that there is usually a great deal on the price. The lender is already not getting their money on a regular basis and is often motivated the sell the home quickly to recoup their money.

On the other hand, short sales often take longer to proceed. The lender has to approve the sale and price, which might lead to delays. The condition of the house may also not be in good shape. Therefore, be sure to get a home inspection.

Calling your trusted real estate agent and mortgage loan professional is the best thing to do if you have questions regarding your home and a possible short sale.

Why Buying A Home In An Adjacent Area To The Best Neighborhood Is A Wise Strategy

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Why Buying A Home In An Adjacent Area To The Best Neighborhood Is A Wise StrategyHave you ever seen a scientific experiment with things growing in a Petri dish? This is a metaphor for how neighborhoods grow as well. Things in a Petri dish grow towards the areas that have more nutrition to attract them and repel from areas that have bad things that they do not want.

A popular neighborhood does a similar thing. It may have boundaries that are certain street or other physical barriers. Nevertheless, if the area builds its popularity, it tends to grow and might also cause an improvement in the surrounding areas.

Homes In Adjacent Neighborhoods

An adjacent neighborhood is one that is right next to another one. For example, in the Los Angeles Metro Area, just to the west of Beverly Hills is Century City. Century City is a fine area so it is usually called by its name. However, properties in Century City are also “Beverly Hills – Adjacent.”

This nomenclature is a bit like identifying a “used car” as a “pre-owned vehicle.” It is a marketing technique to say a home is located in a neighborhood adjacent to a popular one. However, those homes are indeed special. If the popular area appreciates significantly, this may have a positive impact on the neighborhoods surrounding it.

Mapping Adjacent Neighborhoods

It is a terrific strategy to look at the opportunities for buying a home in an adjacent area near the best neighborhood in town.

Use Google maps to find the map that includes the best area of town and what is around it. Then, research the listing prices for homes that are within the best neighborhood and those that are in the adjacent areas. For comparison, look for homes of the same style, type, and size

Zoom in on the satellite view of the streets to get a close look at the places just inside and just outside the official boundaries of a great neighborhood. It may be surprising to find areas that have a significant pricing differential, even just for a few blocks on a few streets. Those particular areas are worth further exploration.

Barriers To Progress

Be aware that physical barriers are stronger than psychological ones. A river, a very wide street, a public park or another major physical barrier can permanently separate a neighborhood from another adjacent one. These may block a growth opportunity.

What to look for are adjacent areas where the barrier between the neighborhoods is psychological and there is nothing at all very different between the great neighborhood and two blocks down the street. These few blocks in the adjacent neighborhood are where one might discover a treasure. It is possible to find a home that has a slightly better price. It might appreciate at the same rate as the best neighborhood next door or faster to catch up with other similar homes.

Summary

Using the adjacent neighborhood strategy may help avoid buying a home only in the most expensive areas that may be over-priced. Many find that the adjacent areas are just as nice and a home there may be a better value. 

Work with a real estate agent that knows the area well. Your agent should be able to help you discover the up-and-coming adjacent areas and properties that might offer an enhanced investment opportunity. As always, your trusted home mortgage professional is the best resource for current financing options.

The Basic Home Security Checklist Every Home Needs

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The Basic Home Security Checklist Every Home NeedsDid you realize that only around 17 percent of the homes in the United States have a security system? Leaving your residence unprotected can come back to haunt you in the future.

The longer you wait to find and fix security problems, the harder you will find it to keep your family safe. Taking the time to inspect your home is a great way to see where security problems exist. With the help of the checklist in this article, you can secure your home and keep burglars at bay.

Check Your Existing Security Alarm

If your home does have a security alarm, you need to make sure it has all of the latest features and updates. Some homeowners think that a security alarm is something they can set and forget.

One of the main things you need to make sure your alarm has is monitoring. With monitoring, you will be able to get the authorities to your home in a hurry in the event of a burglary.

The key to getting the right monitoring is working with the right security company. Before using a particular company, find out more about how they will monitor your home. Paying a bit more for high-quality monitoring will be worth it considering the safety it will add to your residence.

Check Your Windows and Doors

As you inspect your home, be sure to pay close attention to your doors and windows. Usually, these are the areas that a burglar will target when trying to break into a home. If the windows or doors are old and not working properly, it can put you and your family in a lot of danger.

This is why replacing damaged doors and windows is so important. You may also want to think about adding window alarms to your home. With these alarms in place, burglars will not stand a chance when trying to gain access to your residence. An experienced security company will have no problem installing these window alarms for an affordable price.

New Outdoor Lighting is a Good Idea

Another factor you should pay attention to when inspecting your home is the condition of the exterior lighting. If there is limited illumination on the outside of your home, you need to fix this immediately. Leaving the outside of a home dimly lit is like sending an invitation to burglars. This is why investing in high-quality landscape lighting is a good idea.

Things like motion-sensor lights can help you keep burglars away. Instead of trying to find and install these lights on your own, you need to hire professionals. They will be able to get the new lights in place in a hurry.

They can also help you choose the right places to put these lights.

A Great Investment

Instead of looking at additional home security as something you have to do, you need to view it as something you want to do. The money you invest in better home security will be worth it in the long run.

What’s Ahead For Mortgage Rates This Week – January 6th, 2020

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What’s Ahead For Mortgage Rates This Week – January 6th, 2020Last week’s economic reports included readings from Case-Schiller Home Price Indices and National Association of  Realtors® data on pending home sales. The Conference Board of the U.S. Senate also released its Consumer Confidence Index. Weekly readings on mortgage rates and first-time jobless claims were also released.

Case-Shiller Reports 0.10 Percent Uptick in National  Home Price Index

The National Home Price Index issued by Case-Shiller for October reported a year-over-year increase of 3.20 percent in home prices. Case-Shiller’s 20-City Home Price Index reflected the influence of low inventories of affordable homes as pricey metro areas reported slower growth if not declines in home-price growth.

 The top three cities reporting highest year-over-year home prices were Phoenix, Arizona with5.80 percent growth; Tampa, Florida with 4.90 percent growth and Charlotte, North Carolina, which had 4.80 percent home price growth.

Analysts said that the shift in higher home-price growth rates to smaller eastern and southern metro areas was evidence of continued shortages of affordable homes in coastal and major metro areas. Home prices in San Francisco, California declined for the third consecutive month in October after posting double-digit home price growth in recent years.

Pending home sales,  which are sales for which purchase offers have been made but not completed, rose 1.20 percent in November as compared to October. Regionally, pending home sales reports were mixed. The Western region led with a 5.50 percent growth rate in pending home sales. Pending home sales were 1.00 percent higher in the Midwest and fell by -0.10 percent in the Northeast. Pending home sales fell by 0.20 percent in the  South. 

Lawrence Yun, the chief economist for the National Association of Realtors®, said that “The supply of available homes is not yet meeting healthy demand.” Real estate pros consider pending home sales a gauge of future closings.  

Mortgage Rates, New Jobless Claims Dip

Freddie Mac reported lower average mortgage rates last week; 30-year fixed-rate mortgages averaged 3.72 percent and were two basis points lower. Rates for 15-year fixed-rate mortgages fell by three basis points and averaged 3.16 percent. The average rate for 5/1 adjustable-rate mortgages was one basis point higher at 3.46 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable-rate mortgages.

New jobless claims fell by 2000 claims to 222,000 claims filed last week; analysts expected a reading of 223,000 initial jobless claims filed. The U.S. Conference Board reported a lower consumer confidence reading of 126.50 in December, but this was caused by an upwardly-revised November index reading of 126.80.

Consumer confidence in current economic conditions rose 4.40 points to 170.00 points, but this momentum was offset by the reading for consumer confidence in economic conditions over the next six months from 100.30 points to 97.40 points. Analysts said that flagging consumer confidence indicated that the economy is not likely to grow significantly in the next six months.

What’s Ahead

This week’s scheduled economic news includes labor sector readings on private and public job growth and the national unemployment rate. Weekly readings on mortgage rates and initial jobless claims will also be released.

3 Critical Considerations When You Choose Your Garage Doors

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3 Critical Considerations When You Choose Your Garage DoorsOwning property comes with a number of major responsibilities. This includes home maintenance and repairs. One of the common topics that people think about is the garage door. Sometimes, the garage door breaks and needs to be replaced. Other people might be adding a garage door for the first time. There are lots of options to choose from and this is an important decision.

There are a number of factors that people need to consider when trying to decide on a garage door.

The Material

First, people need to think about what their garage door is going to be made out of. The classic option is wood. It has a sleek, stylish look and can be stained to the owner’s preference. At the same time, steel has become a more popular option. This is because steel is stronger than wood. Other homeowners even elect to go with aluminum. Aluminum is lighter than steel and uses less energy. Aluminum can also be colored to look like wood. The material is a good place to start when looking for a garage door.

The Durability

Next, homeowners need to think about the durability of the various options. Some garage doors are going to be stronger than others. Garage door repairs can be expensive and this is a cost that homeowners should avoid if possible. Try to find a durable garage door that can stand up to the routine wear and tear. The stronger the material, the more durable it is going to be.

The Insulation

Finally, also consider the insulation that will be provided by the garage door. The garage is typically an unheated area. This means that any heat in the garage can easily escape through various openings. One of the largest openings is through the garage door. Try to find a door with some insulation. This will trap heat inside the garage and lower the home’s energy costs. An insulated garage door might be more expensive but can also save money on utility bills.

Choosing The Right Garage Door

There are a lot of options when it comes to garage doors. Each choice has its benefits and drawbacks. Homeowners need to take the time to assess the various options and figure out which one is right for them.

If you are in the market for a new home or interested in refinancing your current property, be sure to consult with your trusted home mortgage professional.

5 Excellent Pathways To Home Ownership For Millennials

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5 Excellent Pathways To Home Ownership For MillennialsMillennials are a huge socio-demographic group of over 83 million people. Many of them want to buy a home but face challenges that their parents did not necessarily have. Homes are more expensive. In most places, home prices rebounded to exceed the pre-2008 economic collapse values. Moreover, home prices continue to go up.

The encouraging news is that there is home financing readily available and mortgage interest rates are still reasonable. Even if it is more challenging, the greatest investment that most Americans can make is buying a home. Paying rent is only helping the landlord get rich. Homeownership is still highly desirable and a part of a wise long-term investment strategy.

Here are some tips that millennials can use to become homeowners.

Save For The Down Payment And Build An Excellent Credit History

The best rates for home loans are for those with an excellent credit history who can put down 20%. It is possible to borrow the down payment. The problem with this strategy is that the cost of the loan is higher. The mortgage rate may be higher and the lender may require private mortgage insurance (PMI). PMI pays off the loan balance to the lender if the homeowner defaults on the loan; however, it does not protect the homeowner’s equity in the home or any down payment. PMI just adds another monthly expense.

Create Non-Location Dependent Income

Home prices are somewhat dependent on the local economy and the employment available in the local area. By creating non-location dependent income through the “gig” economy. Work as a freelancer or a person who telecommutes by working from home. With this income, you will be freer to look for a home in a rural area or an area where the home prices are lower.

Take Advantage Of First-Time Homebuyer Programs

Many first-time homebuyer programs are offered by programs of the federal government through the Housing and Urban Development (HUD) and other agencies. Be sure to investigate those possibilities when considering buying a home.

Hunt For A Home In Low-Cost Areas

Use the online systems when searching for a home to compare two things, 1) the median price of homes for each area and 2) the cost of living for each area. The areas with low median prices and that have a lower cost of living are usually easier places to buy a home.

Partner With Others

A home-buying partnership is something many are using to make owning a home more affordable. Multigenerational ownership is used by many families to buy a large home together and share it. Other partnerships can be made among individuals, who are not relatives, to share ownership. Choose ownership partners very carefully and be sure to have competent legal counsel when creating a written ownership agreement.

Summary

Millennials are challenged with new obstacles when seeking to buy a home. The strongest challenge is the cost of homeownership. However, there are many clever ways to improve the chances of enjoying an affordable ownership situation. Be patient and do not give up. Work with a REALTOR® who understands the challenges and is an expert in the area where you are thinking about buying and with a trusted home mortgage professional to find the best financing options for your situation.