Joel Dameral's South Lake Tahoe Real Estate Blog (530-545-8827)

The following is an interesting article a friend sent me from the Chicago Tribune dated 10/11/09.  I thought it might be helpful for anyone looking to buy or refinance a home.

With low mortgage rates and a federal incentive for first-time homebuyers, you might be enticed to buy a place or refinance the one you’re in.

But new regulations on brokers, appraisers and mortgage lenders have changed the rules for getting or refinancing a mortgage. Some rules went into effect this month, and others will kick in soon.

“Over the past year, getting a mortgage as a buyer or when refinancing has become more arduous and more expensive,” said Dale Robyn Siegel, author of “The New Rules for Mortgages.”

Here are a few tips, some accounting for fallout from the credit crisis.

Don’t use a mortgage broker unless you need hand holding. In the past, brokers typically shopped your loan to multiple lenders, which was a big help. But new regulations have hamstrung their ability to efficiently shop for the best deal. Among them is a rule that lenders can’t accept home appraisals commissioned by brokers. So, you’ll have to pay for new appraisals with each lender, which costs time and money.

In the end, you’re probably better off shopping for a mortgage by yourself, said Siegel, who owns a mortgage brokerage in White Plains, N.Y.

However, if you’re very busy or need hand holding, it could be worth using a broker, she said. Just realize you’ll pay a slightly higher interest rate because that’s how the broker gets paid.

Shape up your credit. You barely needed to fog a mirror to get a mortgage or refi a few years ago. Today, it’s different.

“Qualifying for a mortgage is the most difficult it has been in decades,” said Dale Vermillion, author of “Navigating the Mortgage Maze.”

Starting Nov. 1 or Dec. 12, depending on the type of loan, anybody with a credit score of less than 620 will have a very difficult time getting a mortgage. That’s because government-backed mortgage financier Fannie Mae is tightening lending standards to the 620 benchmark, even for loans backed by a federal agency such as the Federal Housing Administration or Veterans Affairs.

To get the best rates — and save money on monthly payments — you’ll need a score of about 720 and have a verifiable, steady income, Vermillion said.

So, take steps to raise your credit score. The scoring formula is complicated, and specifics are secret. But the best ways to raise your score are: pay bills on time and pay off debt. Less known are to never close an old credit card account and try to use a very small percentage of your available credit, regardless of whether you pay off your card balance every month. And check reports at Annualcreditreport.com.

Get a fixed-rate mortgage. The vast majority of buyers and refinancers are better off with a rate that won’t change, Siegel and Vermillion agree.

“Why are you taking out an adjustable-rate mortgage that’s going to change in five years when you can take out a 30-year fixed and never think about it again?” Siegel said.

With a primary residence, it’s usually best to think long term, and that means a fixed-rate mortgage.

Gregory Karp is a personal finance writer for The Morning Call, Allentown, Pa., and author of “Living Rich by Spending Smart.”

Today was the annual kids fishing derby at Lake Baron (Tahoe Paradise Park).  As usual the local Moose Lodge did an outstanding job.  They stocked the lake with 3500 pounds of rainbow trout (no cuts like rumored).  My daughter (5 years old) caught 2 nice fish in about half and hour.  Her big brother wasn’t quite as lucky, but he did help her reel in her monsters.  She wants to donate the fish to the wildlife center to feed the bears and eagles. 

The Moose members had loaner equipment, bait, tackle, food, and great raffle prizes.  This is a great community event.   I can bet I know where my son will want to be the next few evenings- looking for the ones that got away.  I guess I will be there with my fly rod…… Hope to see you also.

     The crowds are gone, the beaches are empty, the bike trail is easy to navigate, and the school buses are running.   Fall in Tahoe is my favorite season.  The mornings are crisp (sometimes with icy windshields) and the afternoons and evenings are warm.  I had a class in Reno yesterday and drove home through Hope Valley (hwy 88) and the trees are changing colors- This is our version of the Northeast color change.  If you get the chance to go take a walk along the Carson River and listen to the silence- its addictive.  Its time to find the fall decorations for the front of our house (and I guess I better start the snow-blower).  Happy Fall…..

     With the current low interest rates now may be the time to downsize form your current home.  The positives could include money savings in the areas of energy costs, homeowners insurance, taxes, and maintenance.  Lifestyle changes include such things as less time on building maintenance and cleaning.

     The hardest part of the move will probably be deciding (or agreeing) what “stuff” to part with, and how to do it.  We had a garage sale over the Labor Day weekend that was very successful.

     One should also consult their tax adviser to find out about the tax consequences of downsizing.

Short sales can occur if a lender (or multiple lenders) agrees to accept an amount less than what is currently owed against a home.  The more lenders there are on a home the harder it is to conduct a short sale.  It is often best if your real estate agent or lawyer contacts the lenders loss mitigation department to help in the process.  One common misconception is that when you proceed with a short sale there is not a “ding” on your credit record.  This is not true.  There is a hit to the credit score often 200 to 300 points.  Although unlike a foreclosure you may be able to buy another house in a little a 2 years.

A foreclosure usually starts when a homeowner stops making payments for whatever reason.  This ends with the mortgage holder selling the home at auction. If there are not any bids high enough the bank will bid and take control of the property.  Many times the homeowner can stay in the house for up to a year before being forced to move.  Like the short sale this can be a hit of 200-300 points on ones credit score.  It takes much longer (in some cases 7 years) before you can buy another home.

Neither of these options should be taken lightly.  If, as a homeowner, you are considering one of these options please consult an attorney, tax professional, and a real estate professional before signing any paperwork.  One reason you should contact a professional is because many times (not always) you are still obligated to pay the difference between what your mortgage company gets for your property and what your loan amount was.

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On Friday December 5th many people from our community got together in the middle of town at the Lake Tahoe Visitors Center for the annual Christmas tree and Menorah lighting ceremony. The place was packed with families. Santa arrived in one of the Borges 2 horse open sleighs and was immediately surrounded by a mass of excited kids and parents.

While some lined up to talk to Santa, others lined up for a sleigh ride. There was free hot chocolate, cookies, song, and a fire pit. The only thing that could of made it better would be about 3 feet of fresh powder.

The art league had exhibits open and an original cabin from the early 1930’s was decorated for the period.

I love being part of a community that has activities like this for our families. It was fun for my kids to play with friends and see their teachers at this social event. If you have other ideas for community events let me know so I can pass the suggestions on the powers.