Finance

Central New Jersey “Boomerang Buyers” Enter the Picture

May 16, 2013 By Mike Downer Leave a Comment

“Time flies when you’re having a good time” we hear. But time can also pass quickly for those who’ve had to go through difficult times. Case in point is a million and a half borrowers who have recently experienced the pain of a foreclosure. That’s the estimated number of those who, by this time next year, will have waited long enough to again become eligible for an FHA loan.

Anyone interested in buying a Central New Jersey home after a foreclosure has come through a tough period. The standard waiting period for an FHA-guaranteed loan is 3-4 years following a foreclosure or short sale (though individual circumstances vary). Now that the weeks and months have ticked by, this sizable crop of newly eligible prospective ‘boomerang buyers’ may soon find themselves contemplating the option of buying a home after a foreclosure.

That estimate of the size of the newly eligible was provided by Moody’s Analytics. Since they are key players in determining creditworthiness, it’s a source I trust. A chart of Moody’s count from the second quarter in 2011 (when their number was a mere 285,000) to next year’s second quarter 1,500,000 provides a convincingly uphill slope.

Still, being eligible to apply does not mean automatically qualifying for an FHA (or any other) loan. Success in buying a Central New Jersey home after a foreclosure continues to depend on the same standards that always apply. After the waiting game is over, having cured credit damage will become the prime requirement.

To increase their chances of successfully buying a home after a foreclosure, Central New Jersey prospects will have paid existing credit card and loan debts with the kind of unfailing regularity that reassures loan officers and credit analysts alike. If that hasn’t been the case, the time to begin is ASAP.

Website Zillow predicts the next most influential group of buyers will be those who are looking to buy a home after a foreclosure or short sale. Central New Jersey residents who are among them — and who are ready to make this their turnaround season — should give me a call. We can get started with the pre-approval process!

The DoorPath Team is the most comprehensive online source for Central New Jersey real estate information and services. Whether you are looking for the latest sales, trends or homes for sale in Somerset, Middlesex, Union or Hunterdon Counties in New Jersey, The DoorPath Team at Coldwell Banker Residential Brokerage has it all at your fingertips. Browse information regarding short sales, foreclosures, new construction, investment property, land sales or commercial locations throughout Central New Jersey plus much more at www.DoorPath.com or call Michael “Mike” Downer at 732-302-1771.

Filed Under: Buyers Resources, Finance, Sellers Resources Tagged With: Central New Jersey, Coldwell Banker, Doorpath Team, FHA, FHA Loan, foreclosures, Hunterdon County, investment property, land sales, loan modification, Michael Downer, Middlesex County, Moody’s Analytics, new construction, short sales, Somerset County

Central New Jersey Short Sale Option: Action Steps

May 3, 2013 By Mike Downer Leave a Comment

A short sale is the option usually preferred by anyone who faces foreclosure. It’s the path that, with the approval of the mortgage lender, promises to ultimately minimize damage to the homeowner’s credit score.

According to Realty Trac, distressed sales of all kinds continued to decrease in the last reported quarter, yet the non-foreclosure short sale volume increased by 4%. That amounts to a significant 22% of all sales. Realty Trac’s are the most reliable national statistics, and our Central New Jersey short sale profile has likewise reflected the continuing working out of the distressed property phenomenon.

Completing a short sale in Bridgewater (or anywhere else, for that matter!) can be challenging. If you’ve decided that it is your best course, you can do a lot to help your agent accomplish it:

From the beginning of the short sale process, keep your agent informed of any changes in the financial picture. That means keeping up-to-date on the changing balance remaining on the mortgage, as well as the number of missed payments. When the information is at hand, your agent can impart the sense of urgency that gets your home sold as fast as possible.
The speed of sale is important, yet while a Central New Jersey short sale specialist is an expert in that arena, other important details regarding taxation and the law may influence the best overall strategy. By encouraging your real estate agent to work alongside an experienced attorney or tax specialist, you will form a team that can execute your short sale package more efficiently than if they worked independently.
Executing a short sale means meeting multiple demands—each with its own timing requirements. That can mean a lot of pressure: but if your agent asks you to do something or provide additional information, stand ready to do it! That speeds negotiations with buyers and lenders, increasing the chance that you will successfully close your short sale.

Short selling a home is a somewhat complicated process. I offer a no-obligation, in-home consultation to help assess your circumstances and the next steps to consider.

Filed Under: Buyers Resources, Finance, Investment Property, Sellers Resources Tagged With: Central New Jersey, Coldwell Banker, Doorpath Team, foreclosure, foreclosures, Hunterdon County, investment property, land sales, loan modification, Michael Downer, Middlesex County, new construction, Realty Trac, short sale, short sales, Somerset County

Central New Jersey Investment Properties Offer Long Term Potential

April 29, 2013 By Mike Downer Leave a Comment

Never mind what those TV get-rich-quick infomercials would have us believe: building long-term wealth requires focus and patience. Patience, because a steady growth is a more reliable strategy than flashier single investment ‘wins’ — and focus, because opportunities slip past when daily demands soak up all our attention.

For financially secure individuals, current real estate trends deserve some attention. Right now we have an environment that may be unique in our lifetimes — one that calls for seriously considering the long-term potential investment properties offer. If you agree that investment properties in Central New Jersey are worth investigating further, you will discover multiple financing alternatives:

Finding a mortgage for Central New Jersey investment properties is the choice most people think of first. However, since the lending market is still in recovery mode, it may be a while before most down payment requirements drop below 20%-30%
By setting up a self-directed IRA, you may be able to make investments through your existing savings. Such investments come out of your IRA, and the profits generated remain there and grow tax-free until you retire. There are limitations to this method of financing: don’t rely on this route until you have sought the advice of a qualified financial advisor or your tax attorney.
For anyone 62 or older, an idea that is not often considered is the reverse mortgage. The object is to allow you to access equity from the property you currently own without having to sell it. Unlike a regular mortgage, the equity released need not be repaid until the mortgaged property is sold or the borrower dies; but it may be repaid with the interest accrued without penalty at any time.

To be sure this or any of the other financing paths work to your advantage, you’ll need a sharp pencil — and guidance from a reliable licensed financial counselor. If you’ve already been thinking that the time is right to start or grow your investment portfolio through the purchase of real estate, contact us for hot leads on some of today’s best investment properties in Central New Jersey.

Filed Under: Buyers Resources, Finance, Investment Property Tagged With: accrued interest, Central New Jersey, Coldwell Banker, Doorpath Team, Elizabeth “Liz” Brain, foreclosures, Hunterdon County, investment property, land sales, loan modification, Michael Downer, Middlesex County, new construction, Reverse Mortgage, Self Directed IRA, short sales, Somerset County

Central New Jersey Mortgage Snoozers Could Be Losers!

April 19, 2013 By Mike Downer Leave a Comment

Your mortgage: you only think about it once a month (if you’re on autopay, maybe not even that often). Why worry about it? If it ain’t broke, don’t fix it, right?

Wrong!

Like all aspects of your big-picture financial planning, keeping an eye on that mortgage can be an extra wealth-building move. We can point to three reasons why re-evaluating your Central New Jersey mortgage could pay dividends:

Down, Down, Down…

Ok, with interest rates continually making headlines, this one might be a no-brainer. But some folks don’t realize just how attainable significant savings may be: a drop of just a single percentage point in the local mortgage rate can make a gigantic difference. A general rule of thumb is that if you can lower your interest rate by a percent or more, it usually makes sense to refinance. It’s certainly worth looking into.

Pay More Sooner (Build Wealth Quicker)

Nobody wants to part with more hard-earned cash than necessary, but extra money out now can wind up saving a lot of greenbacks later. Making just one extra payment a year will have you owning your home free and clear sooner – whereupon those payment dollars become yours!

Sound too painful? It needn’t. See if you can set up bi-weekly payments of half your monthly mortgage amount. You’ll be making 26 payments annually: the equivalent of 13 monthly payments! Confirm with your lender that the extra payments go toward principal.

Eye That Equity

If you’ve got a PMI payment, you know that extra insurance doesn’t come cheap. So why make the extra payment a single month longer than necessary? By law, your lender is required to stop charging you PMI after you accrue 22% equity in your home. But in many cases, once you hit 20% equity, simply writing a letter to your lender will prompt them to allow you to stop paying PMI then and there.

For most of us, our home in Central New Jersey is one of the largest investments we’ll ever make. Got a real estate question? We are here all the time to supply you with friendly help and advice!

Filed Under: Finance, Sellers Resources Tagged With: autopay, Central New Jersey, Coldwell Banker, Doorpath Team, Elizabeth “Liz” Brain, foreclosures, home mortgage, Hunterdon County, interest rates, investment property, land sales, loan modification, Michael Downer, Middlesex County, mortgage refinancing, new construction, PMI, short sales, Somerset County

Part 1: What First Time Central New Jersey Homebuyers Aren’t Told

April 15, 2013 By Mike Downer Leave a Comment

First time homebuyers in Central New Jersey are told a lot of things —

“Save your money,” their parents advise.

“Location, location, location!” their friend’s friend cautions.

Reasonable advice, for certain. But there some important elements of the home buying process which a typical Central New Jersey first time homebuyer doesn’t usually hear. We’ve listed some of the most important ones, in no particular order:

1. Mortgage rates you see advertised aren’t usually what you get

The banner ads are everywhere online: “3.2% rates!” “No money down!” But the truth is, mortgage rates vary greatly. The only way you’ll know what rates you actually qualify for is to go through a complete mortgage application including credit pulls and income verification. One more point to consider: online mortgage calculators, while handy, can be deceptive if you do not factor in the real cost of tax, insurance and PMI when you’re looking at an FHA-loan.

2. Every Tiny Bit of Debt Counts

Think that $1400 left on your Visa isn’t going to matter? Think again. Every iota of debt weighs in when your credit is scored. What many Central New Jersey first time homebuyers aren’t told is that when you apply for a mortgage, nearly every element of your financial history is going to be analyzed with a fine-toothed comb. All debt will be factored in as the bank figures out how much it is willing to lend. Standards have stiffened, so the earlier you dispose of even small issues, the better.

3. Your Choice of Agent Makes All the Difference

Let me guess: your friend’s friend also has an agent to recommend (she carpools with his sister’s next door neighbor). There’s no reason you shouldn’t interview her: maybe that’s the right fit for you. But don’t just sign up with the first agent you find: this is a working relationship that can shape your family’s future. Your agent’s connections, experience, and market knowledge will be key — and can well make the difference between your writing an offer that gets accepted or not.

(Coming Next: Another 4!)

Filed Under: Buyers Resources, Central NJ Property Information, Finance Tagged With: Central New Jersey, Coldwell Banker, credit pulls, Doorpath Team, Elizabeth “Liz” Brain, FHA Loan, First Time Home Buyer, foreclosures, Hunterdon County, investment property, land sales, loan modification, Michael Downer, Middlesex County, mortgage calculator, mortgage rates, new construction, no money down, short sales, Somerset County

A Short Sale Can Aid the Seller, Too

March 29, 2013 By Mike Downer Leave a Comment

A Central New Jersey short sale represents real value for the homebuyer, of course. But to some extent, it is also a boon to the seller. Being able to unload a property that’s underwater helps avoid the most dire credit consequences of a foreclosure.

But lingering credit damage can still result from any short sale — if the short seller allows it to happen. Should you find yourself in the short sale situation, be proactive in protecting your credit score. You will put yourself in a position to re-enter the market sooner than you think if you take action to improve a damaged credit score following a short sale. Here’s how:

Sit down and write out a strategic monthly payment plan for all open credit accounts and loans. It becomes real when you put pencil to paper. If the total is unrealistically large, contact as many lenders as needed and ask to reduce the payment amount. Making on-time payments is how you will build and repair your credit.
Apply for a secured credit card. It is tempting to use only debit or prepaid cards, but this does nothing to rebuild credit. Secure a credit card with a deposit, and then use it to make calculated purchases you know you can repay on time.
Be on time with all rent, medical bills – and every other account. Immediately after a short sale in Bridgewater for instance is the right time to downsize and be frugal — but you need to keep certain accounts — bills, rent, etc. — open. It cannot be overstated: the key is to make all payments consistently on time.

Not everyone escaped unscathed from the recent downturn, but it’s also true that lenders are now a lot more familiar with good prospective borrowers who could not avoid its consequences. Whether you have been through a short sale in Central New Jersey or not, if you are looking to buy a home in Central New Jersey, do give us a call. We’ll put you in touch with our mortgage broker, and we will see how close you are to owning your next home!

Filed Under: Finance, Investment Property, Sellers Resources Tagged With: Central New Jersey, Coldwell Banker, Doorpath Team, Elizabeth “Liz” Brain, foreclosure, foreclosures, Hunterdon County, investment property, land sales, loan modification, Michael Downer, Middlesex County, new construction, short sale, short sales, Somerset County

Agents Bring Central New Jersey Knowledge to FSBO Dealings

March 27, 2013 By Mike Downer Leave a Comment

Suppose you are driving past one of those ‘For Sale by Owner’ yard signs…and the house looks good!

Do you screech to a halt, jump out and rush up to the front door to – quick! – sign a deal? More likely, you jot down the phone number (hopefully one is visible, though with For Sale By Owner signs, it’s not always the case) so you can call up your agent to get the details.

Veteran buyers considering a Central New Jersey For Sale by Owner (FSBO) property know why it’s highly beneficial to use their agent from the start. Even if you have found the home yourself, you should want that first call to go to an agent.

Here’s why:

Agents offer advanced relationships that stand to improve your bottom line. For example, timing often can make or break a deal, and agents can utilize their network of the area lenders who have proven most reliable. Agents are also likely to have vetted referrals for specialized services to address fireplace and chimney issues, drainage, asbestos removal, etc.
Agents are experienced negotiators whose familiarity with Central New Jersey real estate requirements strengthens your position vis-à-vis credits and repairs. Agents understand potential issues likely to come up at inspection — and can help you evaluate each item in your inspection report.
Some buyers believe they can save money by not using an agent in a For Sale by Owner transaction. Sometimes that happens, but more often than not, it’s the FSBO owner whose heart is set on pocketing that extra 2.5 – 3%. Agents can save you money in other ways – by negotiating a lower selling price, proposing intangible benefits (like cash for closing), etc.

Circumstances differ, but the bottom line value an experienced agent adds is a clear understanding of the complications and issues that often arise during dealings – whether ‘For Sale by Owner’ or not. To get to closing, be sure your agent is involved. And if you’re looking for an agent, we would love to help – call us today to discuss how we will help!

Filed Under: Buyers Resources, Finance, Sellers Resources Tagged With: Central New Jersey, Coldwell Banker, Doorpath Team, Elizabeth “Liz” Brain, For Sale By Owner, foreclosures, FSBO, Hunterdon County, investment property, land sales, loan modification, Michael Downer, Middlesex County, new construction, short sales, Somerset County

Are Home Prices Trends in Central New Jersey Sustainable?

March 21, 2013 By Mike Downer Leave a Comment

Who doesn’t want to know what will happen in the future? That’s a very small group, for sure, since good planning is a cornerstone of good management — for households as well as for organizations of every kind.

So, whenever Central New Jersey homeowners see headlines like “Home Prices Up ‘Unsustainable’ 5.9% in 2012,” above a MarketWatch article that explains that price growth is expected to slow, they probably would like to gauge the reliability of the forecasters.

In this case, MarketWatch is part of the relatively stalwart Wall Street Journal, so credibility goes up. But closer examination finds that the author is just reporting information real estate site Zillow compiled. Zillow is indeed an internet behemoth — but can Somerset County or Hunterdon County homeowners rely on its national predictions to gauge local home prices?

Our own take is to find out how well has this source done in the past…

Looking back a very short while ago (to December 26 of last year), we find that Zillow’s survey of 100 economists and forecasters “said they expect home prices to increase in full-year 2012 by 4.6%.”

Hey! Hold it! This is only March, but now the same outfit is telling us that the actual home prices gain last year was 5.9%. Doing a little arithmetic, it seems that the 100 economists and forecasters, faced with the task of estimating home prices for a year that had just a week left, were off by 28%! (They also acknowledge that the same panel had predicted the rise would be 2.3% only three months earlier).

So I guess it’s not that surprising that they feel home price rises like last year’s are going to be ‘unsustainable’ in 2013. Apparently the actual home prices were unsustainable last year, too!

Since real estate and home prices in Central New Jersey are inherently local, it takes on-the-ground expertise to keep up with them. If you’d like to know where your home falls in today’s market, contact us now to schedule an initial consultation. We are getting ready for an interesting spring season —and we would love to help you explore your options!

Filed Under: Buyers Resources, Finance, Sellers Resources Tagged With: Central New Jersey, Coldwell Banker, Doorpath Team, Elizabeth “Liz” Brain, foreclosures, home prices, Hunterdon County, investment property, land sales, loan modification, local real estate, Michael Downer, Middlesex County, new construction, short sales, Somerset County, Wall Street Journal, Zillow

Knowing It’s Time to Check Out Somerset County Homes for Sale

March 14, 2013 By Mike Downer Leave a Comment

It’s pretty common to hear from previously contented tenants who suddenly experience the Eureka! moment – one where they realize they should have bought a home a while back. Eureka! moments happen most frequently around April 15 — but they can strike anytime. To minimize the lapse between Eureka! and the moment when home ownership became the smart choice, here are some indicators current tenants should watch for:

Stability Shift

When your long-term job stability changes, your ability to predict future finances changes with it. Current renters should start surveying Central New Jersey homes for sale when the breadwinner becomes newly established in a long-term position.

Credit Profile Shift

To qualify for one of the homes for sale in Bridgewater or the surrounding area may not require perfect credit; but a better credit score means a lower interest rate (and smaller monthly payments). Keeping an eye on your credit profile will confirm that the single best way to boost it is to pay your bills on time, every time. As with the previously cited stability qualifier, lenders take it all into account, and improved credit coupled with today’s record low interest rates pencil out to mortgage eligibility.

DIY Profile

An additional sign that you are ready to investigate the homes for sale in Bridgewater appears when it becomes clear that you can easily handle day-to-day maintenance. Diligent upkeep of a property, inside and out, can take chunks out of your budget if it must all be handled by paid professionals. Especially if you enjoy the process, the more of it you take on, the more you (instead of a landlord) will benefit.

Owning a home is one commitment that should only be taken on after you have researched Central New Jersey homes for sale, organized your finances, and are confident that your family is ready to settle down for the long haul. If you are close to such a Eureka! moment, contact me to discuss your goals. With market conditions nearly ideal for first time buyers, I’m here to help you find a home that will turn your Eureka! moment into, ‘It’s good to be home’!

The DoorPath Team is the most comprehensive online source for Central New Jersey real estate information and services. Whether you are looking for the latest sales, trends or homes for sale in Somerset, Middlesex Union or Hunterdon Counties in New Jersey, The DoorPath Team at Coldwell Banker Residential Brokerage has it all at your fingertips. Browse information regarding short sales, foreclosures, new construction, investment property, land sales or commercial locations throughout Central New Jersey plus much more at www.DoorPath.com or call us at 908-658-9000 x 159 or cell at 732-302-1771.

Filed Under: Buyers Resources, Central NJ Property Information, Finance Tagged With: Central New Jersey, Coldwell Banker, credit profiule, Doorpath Team, foreclosures, Hunterdon County, investment property, land sales, loan modification, Middlesex County, new construction, Rentennials, renters, short sales, Somerset County

How Central New Jersey Real Estate Investors Use Their IRA

March 3, 2013 By Mike Downer Leave a Comment

In case you missed it, there is at least one widely overlooked local real estate investment possibility that can be available to active IRA holders. Especially if you are among those who look at the current Central New Jersey real estate market and find numerous investment possibilities with significant long-term upsides, the Self-Directed IRA option can be worth looking into. Some of the broad outlines of how it works:

1. The right IRA custodian

Custodians are trustees who hold self-directed IRA assets and file documents with the IRS. Central New Jersey real estate purchases are considered ‘non-traded’ assets — and not every IRA custodian allows for them. You may need to find one who does.

2. Use only IRA funds

All costs associated with your real estate investment must be paid using funds from the self-directed IRA. These can include property management expenses (if you use the property as a rental), taxes, repairs, and insurance. Using IRA funds for any personal expenses or personal benefit will lead to penalties.

3. Guard your interests

Be careful to play by the rules. For instance, you cannot involve a spouse, family member, or company in which you have a 50%+ interest; nor may you reimburse yourself for work you do on the property (including the reporting and other administrative requirements).

According to Fox Business News, many people are using self-directed IRAs to purchase non-traded assets like real estate. Since there are significant limitations as well as advantages, it is all but mandatory to consult a qualified accountant or legal professional before proceeding. If it looks as if the advantages predominate, it will be time to go about finding the right Central New Jersey property for your investment…time to contact me!

The DoorPath Team is the most comprehensive online source for Central New Jersey real estate information and services. Whether you are looking for the latest sales, trends or homes for sale in Somerset, Middlesex Union or Hunterdon Counties in New Jersey, The DoorPath Team at Coldwell Banker Residential Brokerage has it all at your fingertips. Browse information regarding short sales, foreclosures, new construction, investment property, land sales or commercial locations throughout Central New Jersey plus much more at www.DoorPath.com or call us at 908-658-9000 x 159 or cell at 732-302-1771.

Filed Under: Buyers Resources, Finance, Investment Property Tagged With: Central New Jersey, Coldwell Banker, Doorpath Team, foreclosures, Fox Business News, home repairs, Hunterdon County, investment property, IRA Funds, IRA Investments, land sales, loan modification, Middlesex County, new construction, New Jersey Real Estate Market, Self Directed IRA, short sales, Somerset County, taxes