NewsUSA) – When Danielle and Jimmy returned to their home state after three years in Germany, they spent the next six months looking for their first home.
“Location was so important to us. We got used to walking everywhere while we were in Germany. Grocery stores, restaurants, beer gardens and pubs were all within walking distance of our apartment. We wanted to find a neighborhood like that,” explains Danielle, an employee relations attorney.
They found the perfect neighborhood: Bay View, Wisconsin. They also found a house in a perfect location, right across from a park, with a lovely view of Lake Michigan.
But the house itself wasn’t so perfect: it needed about $20,000 worth of renovations. And the sale price was on the high side of their price range.
“We looked at other homes in the neighborhood that were cheaper and in better shape. But we kept coming back to this one. It was in the perfect spot. And when we found out there is a beer garden in the park in summer, it was a done deal!” Danielle says.
They successfully closed on the house in January and spent a month painting, installing a new kitchen floor and remodeling the master bath before they moved in.
So how did Danielle and Jimmy manage to buy a more expensive home and have money left over to fix it up? With direction from their loan officer, here’s how they did it:
1. They were pre-approved before starting the house hunt, so they knew their price range.
2. They used conventional financing with private mortgage insurance, which allowed them to put down 5 percent instead of 20 percent. Their mortgage payment is higher, but still within their monthly budget.
3. The lower down payment made it possible to buy the more expensive home.
4. Putting less money down also allowed them to keep cash for the renovations.
For more information on how to purchase a home with conventional financing and a low down payment, check out the articles and videos on this website, created especially for first-time homebuyers: contact us by the contact form below.
Now that gold prices have dropped like a brick, real estate is starting to shine again. Back in August 2011, when gold was at its peak, investors were asked where they’d want to keep their money long-term. According to a Gallup poll, 34% said gold was the best investment.
Now, only 24% of investors say gold is a good investment.. Real estate essentially ties gold for the best investment currently, at 25% to 24%, respectively. In August 2011, 19% of those surveyed listed real estate as their top choice.
Stocks also are more popular, with about 22% saying the market is the best long-term place for their investment dollars. In August 2011, 17% had that view.
“Stocks have been booming and real estate has been recovering in recent months, likely contributing to the decline in gold’s perceived investment status,” Gallup researchers noted in a prepared statement released late Tuesday.
Gold still has its standard bearers, of course. Though investors no longer are rushing to gold, solid support comes from men over 50 years old, while Americans who consider themselves politically independent favor gold over stocks almost two-to-one: 26% to 15%.
I wrote a blog about the Nigerian scam sometime ago. I’m repeating this warning from the FBI since I know someone who fell for this scheme. The person would not tell me how much he lost, and he was somewhat sheepish about it.
So anyhow, here goes, hopefully it will prevent someone from going off the deep end and losing a lot of money to these dirt bags.
“Nigerian letter frauds combine the threat of impersonation fraud with a variation of an advance fee scheme in which a letter mailed from Nigeria offers the recipient the “opportunity” to share in a percentage of millions of dollars that the author—a self-proclaimed government official—is trying to transfer illegally out of Nigeria. The recipient is encouraged to send information to the author, such as blank letterhead stationery, bank name and account numbers, and other identifying information using a fax number provided in the letter. Some of these letters have also been received via e-mail through the Internet. The scheme relies on convincing a willing victim, who has demonstrated a “propensity for larceny” by responding to the invitation, to send money to the author of the letter in Nigeria in several installments of increasing amounts for a variety of reasons.
Payment of taxes, bribes to government officials, and legal fees are often described in great detail with the promise that all expenses will be reimbursed as soon as the funds are spirited out of Nigeria. In actuality, the millions of dollars do not exist, and the victim eventually ends up with nothing but loss. Once the victim stops sending money, the perpetrators have been known to use the personal information and checks that they received to impersonate the victim, draining bank accounts and credit card balances. While such an invitation impresses most law-abiding citizens as a laughable hoax, millions of dollars in losses are caused by these schemes annually. Some victims have been lured to Nigeria, where they have been imprisoned against their will along with losing large sums of money. The Nigerian government is not sympathetic to victims of these schemes, since the victim actually conspires to remove funds from Nigeria in a manner that is contrary to Nigerian law. The schemes themselves violate section 419 of the Nigerian criminal code, hence the label “419 fraud.”
If you know someone who is corresponding in one of these schemes, encourage that person to contact the FBI or the U.S. Secret Service as soon as possible.
Be skeptical of individuals representing themselves as Nigerian or foreign government officials asking for your help in placing large sums of money in overseas bank accounts.
Do not believe the promise of large sums of money for your cooperation.
President Lyndon Johnson signing Civil Rights Bill as Martin Luther King looks on. Source: Wikimedia Commons
Martin Luther King, Jr., (January 15, 1929-April 4, 1968) was born Michael Luther King, Jr., but later had his name changed to Martin. His grandfather began the family’s long tenure as pastors of the Ebenezer Baptist Church in Atlanta, serving from 1914 to 1931; his father has served from then until the present, and from 1960 until his death Martin Luther acted as co-pastor. Martin Luther attended segregated public schools in Georgia, graduating from high school at the age of fifteen; he received the B. A. degree in 1948 from Morehouse College, a distinguished Negro institution of Atlanta from which both his father and grandfather had graduated. After three years of theological study at Crozer Theological Seminary in Pennsylvania where he was elected president of a predominantly white senior class, he was awarded the B.D. in 1951. With a fellowship won at Crozer, he enrolled in graduate studies at Boston University, completing his residence for the doctorate in 1953 and receiving the degree in 1955. In Boston he met and married Coretta Scott, a young woman of uncommon intellectual and artistic attainments. Two sons and two daughters were born into the family.
With most lenders requiring borrowers to put down at least 20 percent as a down payment – unless using an FHA or VA loan, or purchasing mortgage insurance – the best holiday gift some people might receive would be help with a down payment on a house.
According to a survey by Trulia, the biggest barrier to buying a home these days is saving for the down payment. The survey, conducted over the summer, found that 51 percent of renters said coming up with money for the down payment was preventing them from buying, while 35 percent identified qualifying for a mortgage as the stumbling block.
Under federal tax law, each individual is permitted to give money or valuables worth up to $13,000 to a single recipient in a calendar year. A married couple could jointly bestow up to $26,000 a year per recipient.
According to one financial planner, there also is the option of lending a relative or close friend the money for the down payment, or the closing costs, then forgiving the loan in a future year. The recipient would have to pay interest on the loan until it was forgiven, at which point it would become a gift.
Another way to help with the down payment is to pay other expenses, such as tuition, thereby freeing up money to make a home purchase. Gifts for educational or medical expenses are not subject to taxes, as long as they are paid directly to the educational or medical institution.
However, prior to giving the money, gift-givers should consider their own financial picture, and they should make sure the recipient is responsible and not behind on other payments that could be subject to debt collection.
Tighter lender standards and an unstable job market have made it tougher for some people, especially those just starting out, to qualify for a home mortgage on their own. So, some home buyers are turning to family members or close friends with good credit to co-sign a home loan.
Making sense of the story
While becoming a co-signer may seem like a good solution, money manager and lenders caution against those who are asked to be the cosigner.
A cosigner, even if not living in the house, is really a co-borrower, meaning he or she still is responsible for payments if the occupant is unable to meet his or her obligations. In other words, if the principal party defaults on the loan, the cosigner is on the hook.
One financial planner suggests potential co-signers take a less risky alternative, such as providing a cash gift for the down payment. Under current tax laws, a person can give as much as $13,000 to a person, free of gift taxes, or $26,000 per person, if a married couple filing jointly is giving the money.
Those considering co-signing a mortgage must conduct due diligence. First, the cosigner must understand why the family member or friend is asking for help. Potential co-signers shouldn’t be afraid to look into the requester personal finances to help determine whether he or she will be able to repay the loan. Perusing credit reports also will show the track record he or she has for paying off debts.
A discussion about worst-case scenarios also should take place before signing on the dotted line. Working out a written contract containing an agreement about what would happen in the event of a default, also is recommended.
Cosigners also should keep in mind that the mortgage will show up on their credit report, and could affect their own ability to borrow money or buy a second home. If the principal borrower makes a late payment, that also will show up on the co-signer’s report.
More home owners who are desperate to avoid foreclosure are finding themselves victims to loan-modification scams.
In the latest to grip headlines, attorneys in California — where these scams are particularly rampant — filed the state’s first class-action lawsuit against an alleged loan modification scam, part of RewireMyLoan.com. In the lawsuit, prosecutors charge that the company collected nearly $5,000 each from at least 90 victims, promising to do loan modifications and offering a 100 percent money-back guarantee. The victims say the company never did the loan modification or refunded their payments.
The majority of the victims in the lawsuit are Spanish-speaking, and while the advertising and discussions they had with the company were in Spanish, they say the contracts they signed were in English. The home owners say they were also told to not contact their bank directly or their contracts would be voided. (Read: How to Spot Foreclosure-Prevention Scams)
Scam Prevention Network
The Lawyers’ Committee for Civil Rights, government housing agencies, and other nonprofits have created the Loan Modification Scam Prevention Network to compile complaints about such fraud. From February 2010 to June 1, the network gathered nearly 15,000 complaints involving $37 million in lost money. California accounted for the majority of the losses, with 3,105 complaints filed and $11 million in losses from these scams.
For home owners who believe they were a victim of a loan-modification scam, the Loan Modification Scam Prevention Network encourages them to visit www.preventloanscams.org to file a complaint.
Foreclosure properties, especially those with the water and power turned off, may not qualify for standard financing, but would-be owner-occupants may qualify for a federally insured 203(k) loan.
Would-be owner-occupants who do not have enough money to purchase a foreclosure home using cash, may qualify for the federally insured 203(k) loan, which allows borrowers to roll projected rehab costs into the loan.
According to one real estate expert, most foreclosure properties are sold as is, and, oftentimes, heat, plumbing, and electric are turned off, making it unlikely a lender will lend money on the home.
To qualify for a 203(k) loan, buyers generally hire an independent consultant hired by the Federal Housing Administration to review contractor cost estimates and architectural plans for things like whether the work will bring the property up to minimum standards, while not going overboard on improvements.
Buyers should be aware that not all foreclosure properties are eligible. For instance, a partially built house that has never had a certificate of occupancy requires a construction loan of the kind that a commercial developer would use.
The interest rate on a 203(k) loan is approximately a quarter of a percentage point higher than on a standard FHA-insured loan, and a buyer also can expect to pay 1 or 2 points.
Also, as with other FHA-backed loans, down payments may be as low as 3.5 percent, and loan limits apply. Currently, most FHA loans are capped at $729,750.
May 19, 2011 taking the Metro now, as it seems to have better hours than the commuter train; we arrive in DC on Thursday 5/19/2011, and walk to the United States Botanical Garden (near the Capitol). This garden was first established in 1820, by George Washington, Thomas Jefferson, and James Madison!! It moved to its present location in 1850. After a stroll in the outside garden with mostly native plants we enter the big glass walled garden. Here there are different sections devoted to almost any environment imaginable, from the desert to the jungle and everything in between. One area explores the use of plants as medicines, proving that the original medicine men and women really knew what they were talking about. There are some truly amazing orchid plants and dozens of other amazing flowers.
Then, basically across the street we find the National Museum of American Indian, the 18th Smithsonian museum, opened in 2004, with a beautiful exterior design, reminding me of rock formations in the southwest of America, and even inside, everything is rounded, I don’t think there was a straight wall in the whole place.
Photo courtesy of Wikipedia
And what really surprised me, was, this museum covered Indians from Antarctica to the Arctic, the whole of the “Americas”, South, Central and North, even Hawaii… and I had no idea that there were so many different tribes, customs and foods. Speaking of food, we went to the renowned native inspired Mitsitam cafeteria for lunch, trying foods from South America, Central America, and the Northeast. All were quite good, so we ventured on, learning of each tribe, their customs, beliefs, and lifestyles. The overwhelming sense was how badly most of the indigenous population of the Americas have been treated by the “conquering” Europeans, really, continuing to the present day. A very sad side of our growth as a nation.
In the afternoon, we went to the National Air and Space Museum, just up the street, but knowing that we would have to come back the next day to “finish.” We spent most of our time in an IMAX presentation about the Hubble Telescope, how it has been repaired multiple times in space, and what it has taught us about our universe, and millions of other universes. It is a truly amazing film, including the sensation of actually being in space with the astronauts, if you ever have the chance, please go see this IMAX film, the stars will virtually come to dance on your face.
May 20, 2011, returning to the National Air and Space Museum on Friday, we viewed many other historical aircraft and stories, from the Wright Brothers, delivery of the US Mail, WW I, WW II and the current day. The museum is quite complete, having full size airplanes, unmanned drones, and a replica of the first space craft on the moon. There were TONS of excited children there, and many interactive sites, one of the most child friendly museums we have seen. And the “cafeteria” was only McDonald’s!
Photo courtesy of the National Archives
Moving on, we went to the National Archives for a peek at the founding documents of our nation, and a tour of the importance of the archives in recording the truth, researching the past, and even righting some of the wrongs that we have made as a nation. The National Archives and Records Administration is our national record keeper, created in 1034. Anyone is allowed to access the records, researching family trees, citizenship records, and any other research you are interested in. Through its records proof was found of the money the Nazis stole from Jewish families, resulting in a return of that money to relatives of the victims.
Photo courtesy of Spy Museum
From there we went to the private International Spy Museum, with some chilling looks at the past, present and future of the damage that is possible to be caused by spies. There were truly some interesting stories of people in the past who were spies, including famous actors and actresses, I would have never thought it was possible.
There was a chilling glimpse of spy tactics and terrorism in the future that might be ahead for us, using the internet. It was a very scary ending. Thinking back over our trip, one day we were at cafeteria where the computers had gone down, and we witnessed the mass confusion that that caused, people with no cash, huge lines etc. …Just think what would happen if we had no electricity for an extended period of time, and it was a deliberate action, with no rapid repairs on the way??? Or any number of mass scale interventions in our country.
Judy J. Pinegar is a writer
She has written for numerous web sites and magazines
– When Danielle and Jimmy returned to their home state after three years in Germany, they spent the next six months looking for their first home.
