valentinosdcpulse

With 30-year, fixed-rate mortgages at their lowest level in nearly 60 years, it’s not only a great time to buy but also a great time to refinance your DC, Maryland or Virginia home. Even if you don’t have perfect credit or a great deal of equity in your home, there are still ways to refinance at these great low rates.

Nothing is Free – Closing costs are generally 1 percent of the principal on your mortgage.Regardless of what’s advertised, you will always be charged for loan expenses in one way or another. The key is to ask your lender about all available payment options, and do what works best for you. Here are three possibilities.

• Pay Upfront - You bring a certified check to the closing to cover the various expenses.
• Roll-In Charges - All closing costs are rolled into your loan balance. You pay nothing up front but will have a higher monthly mortgage payment.
• No- or Low-Cost Options - You'll pay no closing costs for this option, but you'll be charged a higher interest rate for your mortgage and likely have a higher monthly payment.

Most of you know that location increases the value of your DC, Maryland or Virginia home. It’s worth a great deal when the home is in a nice neighborhood or on a quiet street or has a good school district nearby - or how about all three!

• Your home is a colonial while the neighbors' homes are contemporary.
• The total square footage is more than adjacent homes--whether it was built that way or you added an addition.
• Your exterior decorating style is far off the beaten path. (Think purple paint.)

If you’re in the market for a Metro DC home—your first or your fifth—now is an incredible time to buy. With interest rates near an all-time low, you can get so much more house for your money in DC.

Currently, the benchmark rate for a 30-year fixed-rate mortgage is 4.29 percent, the lowest it’s ever been. The 15-year fixed-rate is 3.42 percent, and a 5/1 adjustable-rate mortgage stands at 3.05 percent. And for DC homebuyers, the rates are even a bit lower at around 4.09 percent, 3.36 percent and 3.01 percent respectively. Here’s what those numbers mean for you.

You’ve found the DC home of your dreams and scored an incredible 4.25 percent for a 30-year fixed-rate loan. This means your principal and interest will be only $492 a month for every $100,000 you borrow. The 30-year mortgage is the best option if you need manageable monthly payments, but there are other alternatives.

With a 15-year loan, your mortgage interest rate will drop, but your monthly payments will increase because you’re financing the loan over a shorter period of time. For example, a 15-year mortgage might have a rate of 3.75 percent but you’ll pay $727 a month for every $100,000 borrowed. The savings on this plan comes in the amount of total interest you save by paying off in 15 years versus 30 years. It’s well worth it if you can handle the higher monthly payment.

Some lenders also offer 10-year loans which deliver even greater interest savings. The interest on a $250,000 loan at 4.0 percent over 10 years is approximately $53,000—total. The same loan over 30 years at 5 percent would mean $233,000 of interest, about 73 percent more.

Adjustable-rate mortgages often have the lowest rates of all loan types, but as the rates adjust so do your monthly payments—usually upward. Consider this mortgage only if you can handle those adjustments.

While the shorter loans save money and build equity quickly, think carefully before you choose. Financial situations can change, making it more difficult to meet those higher monthly mortgage payments. An on-line mortgage calculator can provide hard numbers based on the price of your desired Metro DC home and current interest rate.

As a potential DC homebuyer, you must assess your situation and make the best choice available. But with interest rates this low, you’ll be able to afford that higher-priced home without sacrificing other financial needs. And that’s truly a win-win.

Rachel Valentino and her team at Valentino & Associates at Keller Williams are experts in buying and selling real estate in the Greater Washington, DC area. Contact Rachel's Team today for all of your real estate needs. Also ask about home buying programs in DC that might help you out.

Because of the foreclosure crisis, lenders Fannie Mae and Freddie Mac have instituted a five-year waiting period for foreclosed homeowners wishing to apply for another mortgage. If you have been foreclosed on but are hoping to someday buy another home, here's how to repair your credit after foreclosure:

• You may qualify for a mortgage sooner with an FHA loan. This is especially true if you purchase a home that was foreclosed by HUD.

• Pull a copy of your credit history from all three credit agencies. The credit agencies are: Equifax, Experian, and Trans Union. You can request your credit history from their websites. You are entitled to one free credit report per year from each agency. You can get all three through the Annual Credit Report website. Once you have all three credit reports, make sure all information is accurate. File a dispute regarding any errors with the agency that is reporting the error.

• Make a financial plan and budget. Visit the Financial Planning Association website for online assistance. You could also use software such as Quicken to help you create your budget and financial plan.

• If you have other debts that you are struggling to pay, you may want to consider debt counseling, debt settlement, or bankruptcy in order to make your payments more affordable or eliminate them altogether. A financial planner or debt counselor can help you decide which option is best.

• Begin paying everything on time every time. This will show prospective lenders that you are responsible about your finances.

• Try to pay down your other debt as quickly as possible. If you can, double your payments each month.

• Once you have your current debts under control, you may be able to get approved for new credit. You may be charged a higher interest rate, but you will have a good account reported to the credit agencies. Remember to use your new credit wisely and pay your bills on time.

If you have a foreclosure in your past and would like to buy a new home, contact Rachel Valentino for advice on how to purchase a home after foreclosure and get an affordable mortgage.

Rachel Valentino is your professional real estate agent in the Washington, DC area. If you are buying or selling a home in the DC-area contact Rachel Valentino and her team of DC-area real estate experts.

Many Washington, DC homeowners purchased their homes with the idea of building wealth through equity. Some have even planned their retirement around using the equity in their Washington, DC homes. If you are among the homeowners who plan to use equity in your Washington, DC home to help fund your senior years, you will want to know about the latest news in the reverse mortgage industry.

Mortgage lender Wells Fargo recently announced that it will no longer offer reverse mortgages due to the current unpredictability of home values. Another reason that Wells Fargo is exiting the reverse mortgage industry is the restrictions that make it difficult to determine seniors' ability to pay for property taxes, homeowners' insurance, and other responsibilities of home ownership.

Wells Fargo is not the only major lender to leave the reverse mortgage business. Earlier this year, Bank of America also made the decision to get out of the reverse mortgage arena. Wells Fargo will still service existing reverse mortgages but, as of June 30, will no longer accept new applications.

In 2010, reverse mortgages accounted for only 2.2 percent of the bank's retail mortgage business.
The reverse mortgage program was created by the government in 1987 to assist seniors who were house rich but cash poor. Seniors can borrow against the equity in their homes for a lump sum or a monthly income. The loan is repaid upon the death of the borrower or the sale of the home. Wells Fargo, which is the nation's largest originator of home mortgages, began offering reverse mortgages in 1990.

Wells Fargo says it is still committed to providing options for seniors who want or need access to the equity in their homes. However, the exit of Wells Fargo signals the reversal of business models created over a long period of rising asset values. Many baby boomers are counting on the equity in their homes for the cash they need to see them through their golden years.

If you need help with a reverse mortgage or need more information about the future of reverse mortgages, contact Rachel Valentino at Valentino and Associates. Rachel is an SRES (Senior Real Estate Specialist). She can help you decide how best to use the home equity that you have worked so hard to build. Call her today at (202) 243-7700.

With plenty of good housing deals in the DC area, you may want to go for it this Spring! Mortgage rates are down again, but will you qualify? Here are some pointers on what lenders are looking for and on how you can improve your loan-worthiness. You don't want your credit score to sabotage your chances of buying a home or catch you by surprise.

Your credit score impacts whether you qualify for credit and how much interest you will pay for it. How employers, lenders, and insurers view your credit score can determine your financial future. High credit scores result in the best employment opportunities, lower interest rates, and smaller insurance premiums. In contrast, low credit scores have the reverse effect.

These are difficult economic times and people are losing control of their finances. According to data provided by the U.S. court system, bankruptcy filings were up for the fifth year in a row nationwide. California, which was also hit hard by the housing slump, was also one of the state's to report higher numbers related to bankruptcy filings. In contrast, DC, which survived the housing slump better than many areas, has bankruptcy rates higher than the national average. Lenders are sensitive to potential loan-seekers with shaky credit.

Increasing credit card debt, bankruptcy, and foreclosures can affect your credit score. In view of today's looming economic crisis, many consumers are seeing their credit scores take a nose dive downward. Some people even believe the myth that once a credit score is bad, it can never be rebuilt. Amid the panic, they fail to see that a credit report is a credit history that records a person's buying and spending habits over time. So what would be the first step to rebuilding a credit report? It starts with taking a true look at financial decisions that can turn into bad habits.

There are four bad habits that contribute to bad credit scores. They are:

• Spending without a budget - this almost always leads to disaster and keeps your finances unfocused

• Making late payments - most companies charge you a late fee if you pay after the due date and report you late to the credit bureau after 30 days

• Using credit cards irresponsibly - you should not max our your cards and should strive to leave about 30% of your credit limit unused

• Not tracking credit scores - mistakes, often due to incorrectly reported information, can lower your scores

In addition, not having an emergency savings fund can affect your ability to pay your bills in tough times. This may sound simple, but you can bounce back from bad credit. Just follow the Common Sense Approach. Be willing to change the bad financial habits into good habits, one step at a time.

Can you bounce back from bad credit and bankruptcy? Of course you can, but it will take dealing with a financial reality check on your part. Be willing to admit your past mistakes and learn from them. Keep moving forward. You can turn your bad financial habits into good ones---a step at a time. Just follow a common-sense approach that will help you develop solid financial skills to deal with money and credit.

Depending on your individual case, your record may not make home buying a reality for you right now. It pays to check though. You might be surprised. If you find you need to work on your credit record, now is the time to get started. Before you assume that buying now is hopeless, contact real estate expert Rachel Valentino of Valentino & Associates. She'll walk you through the process of assessing your financing options (all with a friendly attitude) and then help you find a great home in DC, MD, or VA.

With foreclosures on the rise, there has also been an increase in the misinformation being spread about them. If you live in DC, MD or No VA and find yourself in a potential foreclosure situation, contact Rachel Valentino of Valentino & Associates, and her team of DC-area real estate experts. They can help you evaluate your position and possibly avoid foreclosure.

To help you assess your options if you are facing a possible foreclosure, here are some dos and don'ts about foreclosure:

• Do keep paying your mortgage, if possible.

It is not necessary to default on your mortgage payments in order to qualify for help. In fact it is important, if you are financially able, to make your mortgage payments in order to maintain a good credit rating. You may be eligible for a loan modification or other assistance programs even if you are still paying your mortgage.

• Do contact someone for help as soon as you realize that you can no longer afford your monthly mortgage payments.

There is help available. The first thing you should do is contact your lender, explain your situation, and offer to work something out. Some of the possibilities are loan modification, forbearance, reinstatement, repayment plan, or even a short sale. Don't give up if you don't get a response from your lender right away - keep calling. You can also contact a U.S. Department of Housing and Urban Development (HUD)-approved counselor online or call the Homeowner's HOPE Hotline at 888-995-HOPE (4673).

• Don't assume that you need to leave your home as soon as you are notified about a foreclosure.

Foreclosures take months to complete due to the procedural and legal requirements that lenders need to follow. In the meantime, you may be able to work something out with your lender.

• Don't assume you can no longer work things out with your lender if you get a foreclosure notice.

Lenders lose money when they foreclose on a property. In most cases, they would rather consider a workout or other arrangement in which they will get paid.

• Don't assume that you cannot get another mortgage after a foreclosure.

Whether you bought a home you really could not afford or perhaps lost your job and could no longer afford your payments, it is not the end of the world. Learn from your mistake by figuring out a workable household spending and saving plan. It may be several years before you can qualify for a new mortgage, but with careful budgeting and re-establishment of your credit, you will be able to get another mortgage.

• Do be careful about agencies offering to help.

Try to work with your lender first. If you do use a third party, avoid firms that ask for a fee in advance or promise that they can stop foreclosure or modify your loan. Scams are rampant these days, so check internet resources and the Better Business Bureau to make sure you are dealing with an honest company.

If you live in the DC area and are struggling with your monthly mortgage payments, don't ignore the problem. Help is available. Contact DC-area real estate expert Rachel Valentino. She can help you determine your options.

If you have found yourself underwater with your mortgage and can no longer make the monthly payments, you may be frustrated and confused about what to do. A short sale is one option you may want to consider. However, before you do anything, you will want to reach out to your bank and see if a loan modification may be something they can help you with. If not, then discuss what steps you need to follow if you are going to get short-sale approval. Lastly, reach out to a realtor -- once you know what options exist -- to continue guiding you. That's the step where we come in. Call Valentino & Associates and her team of DC, MD and VA-area real estate experts for answers to the question, "Should you consider a short sale of your home?"

What is a short sale? A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property. Usually a short sale occurs when the borrower can no longer make the monthly mortgage payments and the lender determines that selling the property at a loss would be more beneficial than a foreclosure.

A short sale can help a homeowner eliminate the burden of a mortgage that he or she can no longer afford. This can keep a homeowner from declaring bankruptcy or going through the foreclosure process. A short sale however, is not without potential consequences.

What you have to lose:

1) There can be tax implications from a short sale. The forgiveness of the debt can, in some circumstances, be considered income for the homeowner resulting in an income tax obligation.
2) A short sale, bankruptcy, and foreclosure can all have a negative impact on the homeowner's credit score.
3) In some cases, if the homeowner has liquid assets, the bank may not be receptive to the idea of a short sale.
4) As many as 50% of short sales never make it to closing.

Moreover, if eliminating the mortgage will not help a homeowner make other monthly debt payments, a short sale may not be the best answer.

A short sale is something that needs careful thought. If you are considering a short sale, Valentino & Associates can help you decide what options are right for you.

One of the most attractive yet overlooked incentives to buying a home in Washington, DC is the DC Tax Abatement program. This property tax reprieve can mean big, big, BIG savings  to those that qualify... To find out how the DC Tax Abatement could help you buy a new home, contact Rachel Valentino.

The DC Tax Abatement is a five-year exemption from paying property taxes on eligible buyers' homes. As an added bonus, it exempts the buyer from the 1.1% transfer and recording taxes that usually need to be paid at closing. It also allows for a 1.1% credit from the seller, meaning your closing costs can be reduced from around 3% to under 1%!!!

Here, according to DC.UrbanTurf.com, is an example of how the Tax Abatement works: for a $300,000 home, the buyer would save $3,300 in transfer and recording fees, and upwards of $6,600 depending on the transaction. In addition, over the five-year property tax exemption period, the savings would be $9,881.25. Between the exemption on fees at closing and the five-year property tax abatement, the accumulation of savings can be significant.

There are, however, stipulations as to who qualifies for the program as well as purchase price limitations. The purchase price of the home cannot exceed $319,920 and buyers must meet income eligibility requirements. The income limits begin at $53,760 for a single-person household and increase by about $7,680 for each additional person. Other conditions are that the purchase must be for a principle residence and the buyer must be a current DC resident.

Still not sure if your DC home purchase qualifies for the Tax Abatement program? Contact Rachel Valentino and her team of DC-area real estate experts. They can help you determine your eligibility as well as help you file the required paperwork.

Mortgage interest rates are lower than they have been for some time yet the latest employment outlook, which has an impact on interest rates, is still bleak. This can make deciding whether to refinance your Washington, D.C.-area home a difficult decision. There are several factors you need to consider.

One of the most important aspects of refinancing you will need to evaluate is how much you will actually save by refinancing your mortgage. As a rule, the interest rate for your new loan should be at least two percentage points lower than the rate on your current loan. You also need to think about how long you plan to stay in your current home. If you decide to refinance, you will need to stay in your current home long enough to at least break even on your savings with respect to the cost of refinancing. Remember, refinancing involves closing costs, and possibly points, just as you incurred when you obtained your original mortgage. The following is an example of how to calculate  your cost to refinance.

Yahoo Finance offers this example:  If you had a $200,000 30-year mortgage with an 8% interest rate, your monthly payment would be $1,468. If you refinanced at 6%, your new monthly payment would be $1,199, a savings of $269 per month. Assuming that your new closing costs amounted to $2,000, it would take eight months to break even. ($269 x 8 = $2,152). If you planned to stay in your home for at least eight more months, then a refinance would be appropriate under these conditions. If you planned to sell the house before then, you might not want to bother refinancing.

You will also want to be aware of current interest rates. According to The Wall Street Journal, current mortgage interest rates are:

30-Year Fixed - 4.87%

15-Year Fixed - 4.24%

5/1 ARM - 3.53%

30-Year Fixed Jumbo - 5.46%

30-Year FHA - 4.69%

You also need to keep in mind that because of  the gloomy unemployment news, consumers are less likely to make purchases, especially large long-term ones such as homes. With less demand for homes and home loans, interest rates may become lower but may also shoot up. There is a large degree of uncertainty right now, which wreaks havoc on interest-rate fluctuations.

There are also other things to contemplate when making a refinance decision. The term of the mortgage will determine whether you make higher monthly, lower interest, shorter-term payments or lower monthly, higher interest, longer-term payments. This directly effects how much interest you pay and thus how much the loan will cost in terms of interest.  A variable-rate mortgage (ARM) as opposed to a fixed-rate mortgage will also make a difference in how much interest you will pay over the term of the loan.

Refinancing your DC-area home is a major decision. You need to carefully consider such things as what your savings will be, current interest rates, and economic and real estate market trends. Need help? Rachel Valentino and her team of DC-area real estate experts are happy to put you in touch with competitive and trustworthy local lenders who will help you make your refinance decision. Believe me -- I understand. Dealing with loans and trying to decipher what option makes the most sense for your household can be difficult, EXTREMELY confusing, and downright scary....but don't let that interfere with the significant savings you could be accumulating each month. Reach out to us & let us put you in touch with our go-to professionals with a history of competence, empathy & competitiveness.