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What Is PMI or Private Mortgage Insurance?

by Diane Cardano-Casacio & Her Team

PMI or Private Mortgage Insurance is normally required when you buy a house with less than 20% down. Mortgage insurance is a type of guarantee that helps protect lenders against the costs of foreclosure. This insurance protection is provided by private mortgage-insurance companies. It enables lenders to accept lower down payments than they would normally accept. In effect, mortgage insurance provides what the equity of a higher down payment would provide to cover a lender's losses in the unfortunate event of foreclosure. Therefore, without mortgage insurance, you might not be able to buy a home without a 20% down payment.

The cost of PMI increases as your down payment decreases. Example: The cost of PMI on a 10% down payment is less than the cost of PMI on a 5% down payment. Your PMI premium is normally added to your monthly mortgage payment.

The decision on when to cancel the private insurance coverage does not depend solely on the degree of your equity in the home. The final say on terminating a private mortgage-insurance policy is reserved jointly for the lender and any investor who may have purchased an interest in the mortgage. However, in most cases, the lender will allow cancellation of mortgage insurance when the loan is paid down to 80% of the original property value. Some lenders may require that you pay PMI for one or two years before you may apply to remove it.

To cancel the PMI on your loan, contact your lender. In most cases, an appraisal will be required to determine the value of your property. You will probably also be required to pay for the cost of this appraisal. Another way of cancelling the PMI on your loan is to refinance and to get a new loan without PMI.

Courtesty of http://www.mtg-net.com/sfaq/faq/pmi.htm

The Importance of Neighborhood Reports

by Diane Cardano-Casacio & Her Team

Location, Location, Location. That's what everyone says, isn't it? It's true that location is, for the most part, the only aspect of your home that cannot be changed. So why don't people pay more attention to it?

For sellers, understanding and considering their neighborhood and location is very important when it comes to pricing their home to sell. What type of school district is this school in? What are the crime rates and median house prices for this area? Any expert agent should be able to provide this information to you. The Diane Cardano Team goes a bit further and provides this public information to prospective homebuyers of your property as well. If you are in an award-winning area, why not show that off?

For home buyers, this is often an overlooked aspect of their home search. It's easy to get caught up in sizzle factors of a property- that finished basement great for a man-room, or that soaking tub every woman desires. How about what the world outside of the home is like? You need to make sure you research the school district, crime rates, housing information and other statistical information to make sure this is a place you'd feel comfortable living.

Remember, open houses and showings can paint a pretty picture- but what happens at night in the neighborhood? How about at 6am? During a week day? Perhaps it's a good idea to test run the commute, and drive through and around the community during all hours of the day to get a real feel for the area.

If you need help getting information on a particular area, let us know! We can print out a report for you!

Open House Caution For Buyers

by Diane Cardano-Casacio & Her Team

Open House Caution For Buyers

Yes, it's that time of year again. The weather is getting warmer, flowers are poking through the ground and the anticipated "Spring Market" is here. Open Houses are in abundance and it is very tempting to just take a Sunday drive and "stop in" to a few houses.

What many buyers don't realize is that they need to be careful when entering an Open House. At times, first time homebuyers think that checking out open houses is the first step in the homebuying process. While graduates of our first-time homebuyer workshop would tell you that is not the case, it's still the common thought.

Open Houses are scheduled and hosted by the Listing Agent of a home for sale. The Listing Agent, the one who greets you so warmly and asks probing questions like "So how did you like it?" is working for the SELLER.

Often times buyers, with or without representation, make the mistake of giving away crucial information to this Listing Agent. They'll let the agent hear them gushing over the gorgeous hardwood floors, try to persuade and sell their spouse on why it's such a great house, "Oh but honey look at how cute it is from the street!" or they will give away other buying signals. Other times buyers will come right out with answers to all the agent's questions, like what type of settlement timeframe they are considering or how they feel the home is priced.

The best word of advice is to keep your wits about you during an Open House. If you truly like the home, have your agent schedule a re-showing so that you can see the home with YOUR representative nearby. Don't talk too much and give up information- what you may think is insignificant information and chatter could actually be a crucial part of negotiations.

If you are not currently working with an agent, you should start the process of finding one soon. Make sure you have representation and remember that 99% of the time, the Seller pays your agent, not you.

If you have any questions, don't hesitate to give us a call at 215-576-8666. Thanks!

$8000 Tax Credit For Homebuyers- Did You Hear?

by Diane Cardano-Casacio & Her Team

Final score: $8,000 for homebuyers

First-time purchasers get a tax credit windfall if they buy before December.

By Les Christie, CNNMoney.com staff writer

Last Updated: February 17, 2009: 12:13 PM ET

NEW YORK (CNNMoney.com) -- There's a nice windfall for some homebuyers in the economic stimulus bill awaiting President Obama's signature on Tuesday. First-time buyers can claim a credit worth $8,000 - or 10% of the home's value, whichever is less - on their 2008 or 2009 taxes.

A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of witholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount. But there has been a lot of confusion over this provision. Adam Billings of Knoxville, Tenn. wrote to CNNMoney.com asking:

"I will qualify as a first-time home buyer, and I am currently set to get a small tax refund for 2008. Does that mean if I purchased now that I would get an extra $8,000 added on top of my current refund?"

The short answer? Yes, Billings would get back the $8,000 plus what he'd overpaid. The long answer? It depends. Here are three scenarios:

Scenario 1: Your final tax liability is normally $6,000. You've had taxes withheld from every paycheck and at the end of the year you've paid Uncle Sam $6,000. Since you've already paid him all you owe, you get the entire $8,000 tax credit as a refund check.

Scenario 2: Your final tax liability is $6,000, but you've overpaid by $1,000 through your payroll witholding. Normally you would get a $1,000 refund check. In this scenario, you get $9,000, the $8,000 credit plus the $1,000 you overpaid.

Scenario 3: Your final tax liability is $6,000, but you've underpaid through your payroll witholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.

To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as "first time" buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.

Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)

Applying for the credit will be easy - or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.

Lukewarm reception

The housing industry is somewhat pleased with the result because the stimulus plan improves on the current $7,500 tax credit, which was passed in July and was more of a low-interest loan than an actual credit. But the industry was also disappointed that Congress did not go even further and adopt the Senate's proposal of a $15,000 non-refundable credit for all homebuyers.

"[The Senate version] would have done a lot more to turn around the housing market," said Bernard Markstein, an economist and director of forecasting for the National Association of Homebuilders (NAHB). "We have a lot of reports of people who would be coming off the fence because of it."

Even so, the $8,000 credit will bring an additional 300,000 new homebuyers into the market, according to estimates by Lawrence Yun, chief economist for the National Association of Realtors.

The credit could also create a domino effect, he said, because each first-time homebuyer sale will lead to two more trade-up transactions down the line. "I think there are many homeowners who would be trading-up but they have had no buyers for their own homes," Yun said.

Who won't benefit, according to Mark Goldman, a real estate lecturer at San Diego State University, are those first-time homebuyers struggling to come up with down payments. The credit does not help get them over that hurdle - they still have to close the sale before claiming the bonus.

One state, Missouri, is trying to get around that problem by creating a short-term loan on the tax credit of up to $6,750. The state would loan borrowers the money so they could use it at closing as part of the downpayment. Then, when the buyers receive their tax credit from the IRS, they pay back the state. Other states may follow with similar programs, according to NAHB's Dietz.

Many may look at the tax credit as a discount on the home price, according to Yun. A $100,000 purchase effectively becomes a $92,000 one. That can reassure buyers apprehensive about purchasing and then watching prices continue falling, he added.

And it provides a nice nest egg for the often-difficult early years of homeownership, when unexpected repairs and expenses often crop up. Recipients could also use the money to buy new stuff for their home - a lawnmower, a rug, a sofa - and, in that way, help stimulate the economy.

CORRECTED: An earlier version of this story incorrectly stated how much taxpayers who were owed a refund would receive under the credit. To top of page

First Published: February 16, 2009: 5:38 PM ET

5 Ways To Prepare Your Home For Spring

by Diane Cardano-Casacio & Her Team

5 ways to prepare your home for spring


For the Journal-Constitution
Published on: 04/03/08

Despite the lingering cold weather, the first day of spring officially arrived on March 20. Once again it is time to go out and assess the condition of our homes after the winter weather. Here is my list of five spring "hot spots" to check.

1. Gutters and downspouts: With any luck, we will have some good soaking rains this spring. Since no one likes to spend time outside in cold weather, there is a good chance that your gutters and downspouts are full of leaves and other debris. Overflowing gutters can deposit excessive amounts of water against the foundation of your house, resulting in water leaking into basements and crawl spaces. It is time to make sure that your gutters and downspouts are clean.

Kris Jensen / AJC
Clean out and prepare gutters and downspouts for hoped-for rains in the coming months.
 
 

2. Decks: Winter weather can be especially hard on exterior wood surfaces. Check the decking and railings on your deck for cracking or splitting wood. Badly damaged wood should be replaced. Since the summer sun is also hard on exterior wood, spring is a good time to apply a coat of sealer on the decking and railings. A number of good products are available at home improvement and hardware stores; however, my favorite wood sealer called Total Wood Protectant must be purchased from the manufacturer. Information about this product is available online at www.woodsealants.com.

3. Trees: Especially if you have trees close to your house, now is the time to inspect them. You probably can find simple things like dead branches on your own, but assessing the health of a suspect tree may require the assistance of a certified arborist. Our ongoing drought has affected the health of many of our trees. If you have any trees on your property that you suspect are not healthy, I recommend having them inspected.

4. Termites: Warm weather is when termites begin to swarm. A swarm of termites looks like a series of black flying ants. If you are working in the yard and see these flying insects, you should notify a licensed pest control company as soon as possible. Since the Georgia Association of Realtors contract no longer requires termite letters when you purchase a home, some recent homeowners may not even be aware of the potential damage that can result from termite infestation. I strongly recommend that you have your house bonded by a licensed pest control company.

5. Air conditioner: First of all, make sure that you have changed the filter in your furnace. The same filter serves your air conditioner. This filter has been working hard all winter and likely needs to be changed or cleaned. Spring is also the best time to have your air conditioning system checked by a licensed heating and cooling contractor. When choosing a contractor, make sure they are licensed by the state. It is a good idea to ask friends and associates who they use and are happy with.

8 Cheap Ways To A More Energy-Efficient Home

by Diane Cardano-Casacio & Her Team

8 cheap ways to make your home more energy-efficient

If you're dead-set on that charming but energy-inefficient house, here are some relatively inexpensive ways to whittle your energy bills after you move in.

By Melinda Fulmer of MSN Real Estate

One of the ways to make your home more energy-efficient is to install a programmable thermostat and timer for the water heater.  (© Steve Gorton/Getty Images )

One of the ways to make your home more energy-efficient is to install a programmable thermostat and timer for the water heater.

1. Replace your refrigerator
This is one of the biggest energy-guzzling appliances in the house, says Lisa Dornan, spokeswoman for Direct Energy, and there have been big changes in the efficiency of this appliance over the last five years. "If you look back at the top-rated refrigerator in 2001 that was Energy Star, and one you'd buy today with an Energy Star rating, there would be a 20% to 40% difference in energy efficiency," she says. Her firm, Direct Energy, performs home energy audits and is an energy retailer. Replacing older dishwashers and dryers can make a big difference too, she adds.

2. Install a programmable thermostat and a timer for the water heater
Just as you would flip off the lights before heading out to work, you should turn the heating or cooling off or down while you're away. Program the thermostat for a higher temperature when you're gone in warmer months, or lower in cooler months. These thermostats can be had for $150 at big-box hardware stores.

Likewise, don't heat your water when you're not there to use it. "You definitely want to make sure you are not heating the whole tank needlessly," Dornan says.

Tankless water heaters can be a great investment too, she adds, but they may take a few years to pay for themselves.

Read:  5 tip-offs that a new home is an energy hog

3. Put a solar film or solar shades on the outside of windows to cut the heat
If you're moving into a house with single-paned windows, or living in a climate with extreme heat, you should consider putting something on the outside to reflect the light, Arizona home inspector Scott Hubbard says.

4. Don't let the heat escape
Also, caulk window and door frames to make sure they are airtight. And if possible, use honeycomb-type shades on the inside to trap the heat before it is absorbed into the room.

5. Use compact fluorescent bulbs
This is kind of a no-brainer, experts say, because it's so cheap to do and saves so much on your electricity bill. "Just for swapping out 10 light bulbs (in my home), I was able to get $400 a year in energy savings," Dornan says.

6. Change the filter on your air conditioner regularly
This monthly maintenance helps it run more efficiently, Dornan says, and minimizes wear and tear on your unit. Arranging furniture so it doesn't block air vents also is important to maximize the flow of cooling from your system.

7. Put in shady landscaping
Planting a tree or some vegetation outside a big window can shade your house from the strongest rays of the sun and stifle freezing winds. Planting low-water native plants can also cut your water bill, lowering the total cost you pay for you home each month. (See this slide show on
16 water-wise plants and read more about planning a drought-tolerant garden.)

8. Invest in an attic fan
These inexpensive fans can make a difference in the temperature of the whole house and keep your air conditioning from working so hard.

Full House At This Month's Buyer Workshop

by Diane Cardano-Casacio & Her Team

This month we had a full house of first time homebuyers at our buyer workshop. As we do each month, Diane Cardano & her team presented free information about the homebuying process to people who wanted to learn and become well-educated as they prepare to buy a home.

C.A. Sokol from Vision Mortgage Capital came and discussed information about interest rates, credit scores, and other hot topics that tend to confuse first time homebuyers.

We hold workshops every month for buyers at the Abington Library, from 6:30-8:30pm. These workshops are free, open to the public and are so incredibly informative that every person considering buying a home should attend.

If you missed this workshop, you can still attend the next one! For more information on our next workshop tentatively scheduled for April 22nd, go to www.SavvyHomeBuyerWorkshop.com

Why It's So Hard To Sell Your Own Home

by Diane Cardano-Casacio & Her Team

Check out this interesting article from Realtor.com:

FSBO Woes: Why It's So Hard to Sell Your Own Home
For most people, a for-sale-by-owner (FSBO) transaction simply isn't in the cards.

By Marcie Geffner at Realtor.com

Granted, some people are able to sell their own homes without the services of a real estate agent. Some of these successful do-it-yourselfers are very experienced home sellers. Others are transferring ownership of their home to a child, a coworker or a tenant who's already living in the home. These circumstances are the exception, not the norm, however. For most people, a for-sale-by-owner (FSBO) transaction simply isn't in the cards. Here are five reasons why.

1. FSBOs can't list their home in the MLS. FSBOs aren't permitted to put their home in the multiple listing service (MLS) because these industry membership organizations are open only to licensed real estate brokers and agents. FSBOs are also locked out of many home search engines and Web sites, including the gigantic Realtor.com. Sure, a determined FSBO can put a for-sale sign in his or her front yard and run a tiny advertisement in the local newspaper, but the home won't receive nearly as much exposure as it would through the MLS.

2. Agents won't show FSBO homes. In a typical home sale, the buyer's agent receives a percentage of the commission that the seller pays the listing agent. Without a listing agreement, there's no guarantee that the buyer's agent will be compensated for his or her services, unless the buyer has signed a buyer's brokerage agreement that specifically provides for such compensation. Even if a FSBO offers to pay the buyer's side of the commission, most agents won't want to go through a transaction with an unsophisticated self-represented seller across the table. That means the pool of potential buyers for FSBO homes is limited primarily to unrepresented and probably unqualified prospects.

3. FSBOs usually overprice their home. Like most homeowners, most FSBOs honestly believe their own home is worth more than comparable homes in the same neighborhood. Usually, they're wrong. A real estate agent can provide an update on market conditions, an assessment of the likely selling price of the home and tips for improving the home's buyer appeal. Overpricing a for-sale home is a sure way to deter potential buyers 4. Buyers will feel intimidated. Potential buyers will spend less time in a for-sale home if the owner is present during the showing, and they'll be shy about discussing its pluses and minuses with their own agent if the owner is within earshot. Buyers will also be less inclined to make an offer if they know they'll be negotiating directly with the seller. Having an agent on each side creates an effective emotional buffer between the seller and buyer.

5. FSBOs are likely to stumble into legal trouble. Real estate transactions are fraught with potential liability for unwary sellers, particularly in states that have extensive disclosure requirements (e.g., California). A FSBO who overlooks even one required form or legally mandated disclosure could face a protracted and expensive buyer lawsuit after the transaction closes.

From realtor.com.

Great News: Housing Starts Unexpectedly Surge

by Diane Cardano-Casacio & Her Team

Housing starts unexpectedly surge

Government report shows construction of new homes jumped 22% in February.

NEW YORK (CNNMoney.com) -- Initial construction of U.S. homes unexpectedly surged in February, after falling for eight months, according to a government report released Tuesday.

Housing starts rose to a seasonally adjusted annual rate of 583,000 last month, up 22% from a revised 477,000 in January, according to the Commerce Department. It was the first time housing starts increased since June, when they rose 11%.

Economists were expecting housing starts to decline to 450,000, according to consensus estimates compiled by Briefing.com. Still, starts are down more than 47% from February 2008, when over 1.1 million new homes broke ground.

New construction of single-family homes, considered the core of the housing market, increased 1.1% to an annual rate of 357,000 versus 353,000 in January.

February's increase was driven by a nearly 80% increase in construction of multi-family homes. New construction of buildings with 5 or more units increased surged 80% to 212,000 from 118,000 in January.

Applications for building permits, considered a reliable sign of future construction activity, rose 3% to a seasonally adjusted annual rate of 547,000 last month. Economists were expecting permits to fall to 500,000.

While the surge in new construction was a welcome sign for the nation's battered housing market, analysts warned that the increase could be short lived.

"With new home sales still falling and the months' supply at a record, there is no reason for homebuilding to rise," wrote Ian Sheperdson, chief U.S. economist at High Frequency Economics in a research note. "This is a temporary rebound, not a recovery."

New home construction surged in the Northeast, jumping nearly 89% last month. Starts also increased in the Midwest and the South.

In the West, where the housing market was overbuilt in the boom years and where there is a glut of foreclosed homes, starts declined nearly 25% versus the previous month.

Casting Out Clutter

by Diane Cardano-Casacio & Her Team

Love those toy trains from your childhood? Totally attached to your collection of moose stuff? Dedicated to your college fraternity memorabilia? Take a deep breath and a long gaze –then box ‘em up and ship them out to a storage facility or at least to a hidden spot under your bed. For no matter how much sentiment these personal items hold for you, these little treasures are nothing but CLUTTER to prospective buyers.

Removing clutter is an important step in fighting the staging shark. Clearing clutter from your home accomplishes two things; it makes areas of the house easier to clean and it neutralizes the space so prospective buyers can picture their own treasured items there. So, if you begin cringing as you read the following suggestions, repeat this mantra after me: Space sells.

Many folks find it easier to begin with clearing out the garage, an area where unwanted items often land. Throw away worthless items you can do without and store important items in a warehouse or friend’s garage. As you collect "disposable" items from your house de-cluttering, organize them neatly in your garage in preparation for a garage sale. Many home sales experts recommend removing half your furniture from the house. This is a good time to repeat, "space sells." Accent tables, extra chairs, cabinets that hold huge collections are good choices for removal.

For example, a dining room table with chairs should be kept in the room while a corner china cabinet or curio shelf would be removed. Bedrooms should contain just one double or queen size bed or two twin beds. Extra beds should be stored. Take an inventory of those items you can do without for awhile. Make a note of where you plan to put each item when it is removed. Store it, sell it or give it away. Depersonalize space. Remove your teenage daughter’s poster of Orlando Bloom from her bedroom, your husband’s stuffed deer head from the study and any partisan items like bumper stickers, books or magazines from the family room. All spaces should be neutral zones so potential buyers can picture their own belongings in each room. Remind your family members that they can have these items back as soon as the house sells!

Just as it is good to remember that space sells, it is also important to remember The Rule of Three. Step one of the rule: Take everything off the kitchen counter, bathroom vanity, table tops and mantles and wipe them clean. Step two: Return only THREE items to each space. Yes, ONLY three. As for the left over items-store them, sell them or give them away. Keep in mind that nothing is sacred when a house is on the market. Anything that can be opened in any room-closets, drawers, cabinets, shower curtains, pantry doors-will be explored by potential buyers. Clean out and organize closets, drawers and the pantry. Keep the shower spotless and remove shampoo and conditioner bottles or any other personal care items.

In the bedroom, remove half the clothes from each closet, put shoes on a rack and hang purses and belts on pegs or organizers. Don’t forget to recycle all those newspapers you have stashed in the hall closet. Leave no cabinet door unopened or unclean. In her book, "Simples Steps You Can Take to Sell Your Home Faster and for More Money in Any Market," AIlyce R. Glink suggests creating a "clutter collector" in areas where papers and writing utensils seem to collect. Glink’s clutter collector is a large flat storage box that is kept where mail and schoolwork seem to end up each day. Keep all receipts, old phone messages, pens and pencils, children’s artwork, permission slips and other miscellaneous papers in the box. Just before a potential buyer is scheduled to arrive for a showing, store the cutter collector underneath a bed.

Whew! Now that you’ve de-cluttered your house, what do you do with the items that you no longer need but are still usable? You have several options. If you donate them to a charity, you may be able to receive an income tax deduction for the value amount. An added bonus: Often these organizations will pick up donations so you can spend your time elsewhere. You can always sell unwanted items through consignment shops, classified ads, garage sales, tag sales or an auction. It might be nice to have a little extra cash to help pay moving expenses. But if you can’t bear to part with these unnecessary treasures, self-storage may be the right answer for you. Rented storage units are particularly convenient places to keep furniture, seasonal sports gear, holiday decorations and patio furniture.

If clearing clutter seems like an overwhelming task, just remember that doing so is an important part of fighting the staging shark. Reducing clutter makes each room easier to clean because there are fewer objects to move when dusting and vacuuming. And don’t forget what is down the road: The move. The more you clean out or box up, the easier it will be to prepare to move after your house sells. Since you will have more important things to do at that time, doesn’t it make sense to get it done before your buyer looks at the house?

 

Displaying blog entries 1-10 of 17

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Diane Cardano & Associates
CARDANO Realtors
1021 Old York Road, Suite 401
Abington PA 19001
Office: 215-576-8666
Fax: 215-576-8677