The Real Folsom Blog

Foreclosure Prevention Workshop in Sacramento

Homeowners struggling with their mortgage payments may be interested in an upcoming workshop in Sacramento. On Saturday, Feb. 16, a free consumer workshop on foreclosure prevention will be hosted by Sen. Darrell Steinberg from 10 a.m. to 1 p.m. at the Antioch Progressive Baptist Church, 7650 Amherst Street in Sacramento. This is part of a series of statewide workshops presented by the State and Consumer Services Agency and Business, Transportation and Housing Agency. Credit counselors, loan servicers and lenders will be on site to offer assistance and information on options available to help owners in difficulty to keep their home. Plan to bring you loan documents and any other relevant financial information to the event. The following web site, www.yourhome.ca.gov, gives info on the workshop but no phone number or e-mail if you want additional info.

Recent Folsom Home Sales Jan. 30

This past week looked better as far as recorded home sales in Folsom--up to seven sales from the five sales recorded by MetroList, our local multiple listing service, the previous week. Here are details on these sales. The properties were listed and sold by various multiple listing service brokers. If you don't see a sale you've been wondering about, drop me a line at annerhea@kw.com and I'll look it up for you.

• 1712 Parkway Drive North (3 bedrooms/2.5 baths, 1712 sq feet) sold for $360,000 at 99.73% of list price, $210 per sq foot.
• 1557 Borrasca Dr (3 bedrooms/2.5 baths, 1905 sq feet) sold for $360,000 at 92.31% of list price, $189 per sq foot.
• 800 Willow Creek Dr (3 bedrooms/2 baths, 1968 sq feet) sold for $365,000 at 89.04% of list price, $185 per sq foot.
• 1321 Tippens Wy (3 bedrooms/2 baths, 1434 sq feet) sold for $390,000 at 97.74% of list price, $272 per sq foot.
• 125 Baurer (4 bedrooms/3 baths, 2256 sq feet) sold for $455,000 at %95.79 of list price, $202 per sq foot.
• 848 Morningside Dr (3 bedrooms/3 baths, 2230 sq feet) sold for $469,999 at %98.95 of list price, $211 per sq foot.
• 103 Donaldson Wy (4 bedrooms/3 baths, 2619 sq feet) sold for $480,000 at 97.96% of list price, $183 per sq foot.

The above properties were on the market for an average of 67 days on the market and sold for an average price of $411,428.

How Long Will It Last and How Much Will It Cost

Keeping with yesterday's theme of home remodeling, I thought I'd share two Web sites that offer information on how long you can reasonably expect different components in a home to last and how much it will likely cost to replace them. This issue is useful when considering remodeling projects but also an important one for the home buyer. Although it's outside the scope of a home inspector's practice to provide the life expectancies of major components, mostly because they don't generally know when the components were installed, it's not unreasonable to ask for an opinion on the existing components. I did find two Web sites both homeowners and home buyers should find of some use. Check out www.pillartopost.com/home-repair-cost-upgrade-guide.aspx for info on how much different remodeling and construction projects might cost. And for a guide to life expectancy of some major home components, check out www.nahb.org/fileUpload_details.aspx?contentID=72475.

Remodels That Bring Good Returns

The market is tough on sellers right now. I won't argue that point. But whether or not you plan to put your house on the market any time soon, it's always a good idea to take good care of what is likely your largest asset--your house. Every year Remodeling magazine publishes its "Cost vs. Value Report" looking at which projects bring the best return on investment. The magazine prepares the report in cooperation with Realtor Magazine and breaks down the results by region. Here are some of the findings, you might find useful if you are planning to put your house on the market in the not-too-distant future:

• Focus mostly on exterior upgrades.  In the Pacific region, these six projects had a cost recovery of more than 100 percent: a wood deck addition, a minor kitchen remodel, fiber-cement siding replacement, wood window replacement, and an upscale wood and vinyl window replacement.
• Projects least likely to give you a good return when you sell included a home office remodel, installing a back-up power generator, and adding a mid-range sunroom.
• Some considerations before you undertake a remodeling project: does the remodeled space reduce the perceived number of rooms or available square footage, what is the condition of the rest of the house, and what is the value of similar homes nearby.

If you are thinking of doing some remodeling (especially with an eye to selling in the not too distant future), start by consulting with a local remodeler about construction costs and then carefully evaluate market conditions and what other similar area homes are selling for.

FHA Loans Make a Comeback

This week guest blogger Barbara Van Duyn of First Priority Financial takes a look at another 100 percent financing program. If you have any questions, you can reach her directly at Barbara@VanDuynGroup.com.

FHA loans are becoming popular again as changes in high loan-to-value(LTV) conventional mortgage  programs are being eliminated and stiffer qualifying guidelines leave some homeowners on the side lines. So let’s take a closer look at the benefits of an FHA loan to see if it makes sense for you. 

Less than perfect credit: Because FHA insures your mortgage, lenders are more willing to give you a loan. That includes borrowers with limited credit, blemished credit and FICO scores as low as 581 making it easier to qualify for than a conventional loan. 

Smaller Down Payment: FHA requires that the home buyer invest at least 3 percent of the sales price in cash for the down payment and closing costs. For example, if the sales price is $300,000, a borrower must invest at least $9,000. However, the borrower can use gifts from family, funds from local, state, or government agencies, or other sources for the down payment. So in essence you can purchase a home with 100 percent financing. 
      
Lower cost: FHA loans have competitive interest rates because the federal government insures the loan for lenders. For the best interest rate and terms on a mortgage, you should compare mortgages from several different lenders. FHA allows the seller to contribute up to 3 percent of a buyer’s closing costs so it’s possible to get a no-cost loan. 

The maximum FHA loan limit for a single-family home in Sacramento County is $362,790. With higher LTV loans comes mortgage insurance and that’s true for FHA. There is an up-front mortgage insurance premium equal to 1.5 percent of the loan amount that is paid at closing. In most cases, this mortgage insurance premium is included in your loan amount, so you are really paying it over the life of the loan or as long as you keep the loan. In addition, on loans with a term greater than 15 years and a loan to value of 90 percent or greater, you will pay an annual mortgage insurance premium of 0.5 percent of the loan amount in monthly installments. Now…don’t let mortgage insurance scare you. Seller contributions can be used to offset these charges. Have a mortgage professional compare the costs of a conventional mortgage versus FHA to see which offers you the lowest costs and greatest benefits. You may be surprised to learn that an FHA mortgage including mortgage insurance is a better choice.      

All the Best! Barbara

Back to Duty for CalVet Loans

It wasn't so long ago that you couldn't get a seller to do a deal with a CalVet loan. Among the reasons: they take a bit longer to process and have certain non-negotiable requirements. In a hot market, sellers didn't need to bother. But how things have changed. Sellers in our current market need to be priced more competitively than ever before  and need to show flexibility when it comes time to negotiate the terms of the purchase. One loan type sellers can expect to see more of is the CalVet loan. Here are the basics of the CalVet loan:

• Open to all active service, National Guard, and Active Guard/Reserve, and honorably discharged veterans who have served a minimum of 90 days of active duty.
• CalVet programs are not limited to first-time buyers. In fact, many veterans are repeat buyers.
• Three basic programs are available: CalVet/VA, CAlVet 97, and CalVet 80/20.
• Loan amount limits exist.
• Also offer features such as insures against possible floods and earthquakes, covers properties (other than condos and mobile homes) for loss from fire and other hazards, and no prepayment penalties.

So sellers be ready, the CalVet loan is back on duty!

Keeping It Real

Yet another gloomy real estate article on page one of the Bee this morning ("Foreclosures Soar to State Record"). At least no one should be too surprised by this one, real estate experts have been predicting the spike for months. What is unforturnate though is what is lost of the real estate picture--namely the fact that this is a great time to buy. Those sitting really pretty are first-time home buyers: interest rates are still low, inventory is good, and there are good deals to be had with bank-owned properties. Now that said, it's still not an all doom-and-gloom time for sellers, especially those looking to move up into their dream home. Look at it this way, you may be selling low but you then are also buying low. If you bought 5-7 years ago and didn't do any refinancing to a higher loan or taking out of a line of credit, then you are in prime position to use your built up equity to trade up. You don't need to put your life on hold waiting to see what the economy is going to do. Houses priced competively are getting sold (sometimes with multiple offers). My point today is simply this, make sure you look at the whole picture when you start thinking real estate and making real estate decisions.

And for those struggling with mortgage problems, the state has created a Web site, www.yourhome.ca.gov, that offers lots of consumer mortgage information, from tips on avoiding foreclosure, to HUD-approved home loan counseling agencies, to information on home loan programs. Check it out!

Recent Folsom Home Sales Jan. 22

It's time for our weekly look at recent home sales in Folsom. Once again it was a slow winter week with only five sales recorded by MetroList, our local multiple listing service. Here are details on these sales. The properties were listed and sold by various multiple listing service brokers. If you don't see a sale you've been wondering about, drop me a line at annerhea@kw.com and I'll look it up for you.

• 101 Ore St (3 bedrooms/2.5 baths, 1738 sq feet) sold for $348,500 at 99.60% of list price, $201 per sq foot.
• 133 Singer Ln (4 bedrooms/2 baths, 1811 sq feet) sold for $485K at 94.17% of list price, $268 per sq foot.
• 1017 Smith Wy (3 bedrooms/2 baths, 2507 sq feet) sold for $499,900 at 100% of list price, $199 per sq foot.
• 144 Hillswood Dr (4 bedrooms/2.5 baths, 2294 sq feet) sold for $585K at 98.32% of list price, $255 per sq foot.
• 727 Misty Ridge Circle (5 bedrooms/3 baths, 3591 sq feet) sold for $862K at 99.19% of list price, $240 per sq foot.

There are 306 Folsom homes currently on the market (one up from last week). Best price is at $219K, highest property is at $1,399,000. Average days on the market: 78 and median price: $479K.

Enjoy the week! At least it's a short week for those of us who had MLK Day off. BTW, I still have a small supply of 2008 fridge calendars available. Let me know if you'd like one and I'll pop it in the mail to you. Just e-mail me.

100% Financing Is Still Alive and Well

This week, and for the next few weeks, guest blogger Barbara Van Duyn of First Priority Financial takes a look at some popular 100 percent financing programs. If you have any questions, you can reach her directly at Barbara@VanDuynGroup.com.

Considering all the negative news being reported about the current state of affairs in the real estate and mortgage markets, you may be surprised to learn there are loan programs available today that will finance 100 percent of your purchase within limits. Over the next three weeks, we are going to take a closer look at the most popular programs from Fannie Mae, Freddie Mac, and FHA so you can see if they make sense for you. Some are designed only for first-time home buyers, some allow you to have owned a home in the past, and another is OK with you owning more than one home. Our conversation will include qualifying guidelines including those related to our local county. And in this “buyer’s market” you will learn how a seller can help you pay for some, if not all, of your loan costs. Mortgage insurance goes hand in hand with these loan programs so it’s important that you understand its role and the additional costs it brings to the mortgage. We’ll tack this one too. So come back next week and let's begin our journey down this path and see if one of these programs might be right for you. All the Best!  Barbara

New 'Green' Designation for Builders

Hot off the PR press: Soon, it will be a little easier for homeowners to identify "green" builders and remodeling experts thanks to a new "green" designation and certification program being unveiled by the National Association of Home Builders (NAHB) at their upcoming Feb. 14 International Builders' Show in Orlando. And the goal is for the first class of Certified Green Professionals to receive their designation in early May. Way to go green NAHB!