The Home Column

Home is where the heart is, right? I bought a home in 2005, about six months before the peak of the housing market boom, and chronicled the entire home buying journey. Since then, I’ve kept up to date on all things related to housing, mortgages, and taxes in this column.


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How to Choose the Right House for Your Situation

buy the best houseEven after the turmoil seen in recent years, buying a home is still considered one of the major financial milestones in life.

Choosing a home, though, can be fraught with pitfalls, especially if you want to get the right home for your situation. Buying a fixer upper might work for some people, but is it really the right choice for you? And what about purchasing the best home in the neighborhood? Is going high end the right decision?

It all depends on where you’re at, and what you expect to do with your home. Kim Clark, the owner of Bayside Realty Consultants, offers some things to think about as you attempt to find the right house for your situation:

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Beware Real Estate Agent Buyer Contracts

Signed ContractsWe had some friends over the other night and they were sharing with us their home buying experience and how challenging it was for them. They were in a similar situation to ours – they’ve outgrown their home and were actively searching for their “forever” home. They weren’t in a rush to buy anything that fit, they were picky. They also knew that the home they wanted was outside their price range at the moment so they were happy to put in bids below asking price and hope they got lucky. Worst case, they would wait a year or so to build up a cash cushion for a larger down payment so they could get into a price range that fit their wants and needs.

As it turns out, the realtor they were working with wasn’t down with this strategy. There was some name calling, someone threw out the words “unethical,” and it came time for the two parties to go their separate ways. There was a catch – my friends signed a contract. I don’t know the exact details but it was a mess to get out of the contract and our friends have to wait a period of time for the term to expire. Until yesterday, I didn’t know real estate agents had their clients sign contracts. I’ve only ever bought two houses and both with the same agent and in neither case did the words “contract” ever come up.

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Understanding the Streamlined Modification Initiative

Fannie MaeThe Federal Housing Finance Agency (FHFA) rolled out a new simplified program to help homeowners keep their homes and avoid foreclosure. It’s called the Streamlined Modification Initiative and the program went into effect July 1st and will expire August 1st, 2015. It’s a lot like the mortgage modification programs of the last few years with one key difference – a huge reduction in paperwork.

If you’re a borrower who is at least 90 days behind on payments on a mortgage owned or guaranteed by Fannie Mae (check your loan) and Freddie Mac (check your loan), you’ll start to get offers from lenders to try this program. The key difference in this program is its simplicity, you simply need to make the new payments for a trial period of 3 months and then the modification is permanent. There’s no evaluation of eligibility (no need to prove hardship), there is no need for documents, no back and forth and red tape.

The only other requirements are that the loan must be at least a year old, the borrower has to be less than 24 months (the official term is 90-720 days delinquent) behind and their loan balance must be 80% or more of the home’s value (80%+ LTV). Also, if your loan has been modified at least two times before then you are not eligible.

If you are eligible, your mortgage servicer will send you a latter that details the terms of the modification as well as the trial payments. To start, you just pay the new payment. Make three payments and the modification is permanent. If you don’t make all three, you don’t get the modification.

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How to Save Money with a Moving Company

U-HaulAs we wrote a little while back, we bought a house and will be moving pretty soon. One of the worst parts about buying a house is that you have to move. We’ve spent the last eight years in this house, a wonderful eight years, but that also means we’ve accumulated eight years of junk.

In previous moves, I was always moving from one apartment to another. Or moving from an apartment to a house. I didn’t have much of anything really. A couple friends, a U-Haul, and an afternoon was all it took to move from one place to another. Fast forward to today and that’s simply not possible anymore. We could still go the U-Haul route but we’d need a larger truck, more friends, and probably a lot more time. So we’ve decided to go with a moving company.

So, in preparing for this move, we’ve learned a few things that I hope can be helpful for you:

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The Fastest Way to Find Your Perfect Home

StopwatchAs we mentioned a while back, we’re buying a home and it’s a very exciting time for us. It wasn’t always so exciting though and if you’ve ever looked for a home, you’ll agree. The actual task of finding a house you like can take a very long time and there are no guarantees you’ll ever find one you like. I’ve heard horror stories, they were horror stories to me anyway, about people having to look at a hundred homes before they found one they liked… only to lose out on it because their offer wasn’t good enough.

A hundred houses. If you spend a minimum of half an hour inside, that’s still 50 hours. That’s more than a standard work week. Add in travel time and you’re probably pushing 80 hours. Two solid weeks. It’s incredible.

Here’s the secret… it’s up to you to be efficient.

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We’re Buying A House (Maybe)

SoldWe haven’t covered it much on Bargaineering (you might have guessed given the increased interest in credit scores), but we’re buying a new home. We submitted an offer a little while ago and after a little back and forth, it was accepted. We’re buying a house about ten minutes south of where we live now and while we aren’t excited about packing up and moving, we are really excited about the home itself.

Bargaineering was around when we bought our first house and we chronicled the entire process. A lot of it is mundane, downright boring if you’ve already done this yourself, but at the time it was all new to us. Getting pre-approval, while much easier then, hasn’t changed much except for how much paperwork you need to submit. Back then you typed a few numbers on a form and you were in! That’s why I didn’t write much about the process this time around – it wasn’t that much different and it wasn’t a completely new experience for us.

That said, in the last eight years, some things have changed…

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7 Essential Tips for Buying Your First Home

Buying a House in the USA“This is most likely the largest financial investment you’ve ever made,” Chicago real estate attorney John R. O’Brien says.

When you buy a home, you are making a huge commitment. On top of that, buying a home is a complex transaction, requiring titles, insurance, escrow, and there are usually a number of players involved. As a first-time home buyer, things can become overwhelming.

If you are planning to buy a new home here are 7 essential tips to ease the process:

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HARP Refinance with Quicken Loans: My Experience

Not too long ago, I was on the Credit Sesame site. A little pop-up window appeared, asking me if I wanted to refinance my loan.

I’ve been wanting to refinance my home for a couple of years now. I’d asked my bank about it, but they were unwilling to go below 4% with my self-employed income. I knew that I qualified for HARP under the expanded eligibility guidelines, but my bank didn’t seem to be interested in this loan.

I put it on the back burner until I received that pop-up message from Credit Sesame. On a whim, I went ahead and clicked “yes.” Within three minutes — I kid you not — a representative from Quicken Loans was calling. I let the call go to voicemail because I was, to tell the truth, a little unnerved by how fast the lead went out.

After a week of once-daily messages from Quicken, I decided to go for it. I called and explained my situation.The loan officer told me that I qualified for HARP, and that we could start on the paperwork immediately. He assured me that my income situation wouldn’t be a problem, since I have several years of tax returns to show my income is fairly steady. It also helped that we had yet to miss a mortgage payment in five years — and we have good credit.

This was February 6.

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