Elkhart County, Indiana Do You Have A Sub-prime Adjustable Rate Mortgage?

President Bush signed the Hope Now initiative in December to slow the flow of defaulted subprime mortgage defaults. The non-profit HUD-approved Homeownership Preservation Foundation should have by now approximately 550 to 600 counselors staffing the phone to talk to concerned consumers. The number is 888-995-4673. They estimate receiving around 2500 calls a day, so expect to be on the phone for a while. The counselor will ask for information about your financial situation and make a determination, including eligibility to participate in the initiative. So before calling gather your mortgage papers, income verification and monthly expenses together so you will be prepared to answer their questions.
Home Owners are eligible if:
They are current and expect to stay current after the rate resets, but are looking to refinance.
They are current but face possible default after rate resents.
They are in default before their rate resets.
The initiative applies only to purchase-money mortgages, not home equity loans, and only to borrowers who secured financing during the height of the housing boom--Jan 1 2005 to July 31, 2007 and whose rate resets between Jan 1, 2008 and July 31, 2010. Lenders estimate there are 1.2 million borrowers eligible.
The counselors can help borrowers who don't meet eligibility for the initiative too. Income problems as a result of a job loss and unexpected expenses like a medical emergency cause people to fall behind.
Troubled borrowers who call the Hope Now number will find that their solution will depend on their situation. If you are able to stay current even with a rate reset Lenders may be able to take these borrowers through a fast-tract process into a more affordable loan.
Home owners who face default after a rate reset they may freeze the rate up to five years. To qualify they must be ineligible for refinancing, occupy the property as a primary residence and have a credit score of less than 660 that hasn't improved more than 10 percent since the loan was originated.
Real Estate Home Owners already in default - a loss-mitigation strategy, such as a short sale or deed in lieu of foreclosure, my be the solution. Under the mortgage debt forgiveness law signed by President Bush, borrowers who receive debt forgiveness as part of a loan workout over the next three years won't have to pay federal tax on the forgiven amount. Those who don't call in time may not be able to avoid foreclosure. If you are in default now, please call Real Estate Agent Evelyn Johnston, Short Sale Specialist to discuss your options at 574-304-7148 or email evelyn@evelynjohnston.com.

Top 10 Reasons To Hire A Real Estate Agent

With so much information readily available online, clients often ask me, "why should we hire a real estate agent" They wonder, and rightfully so, if they couldn't buy or sell a home through the Internet or through regular marketing and advertising channels without representation, without a real estate agent. Some do ok, many don't. So, if you've wondered the same thing, here are 10 reasons why you might want to consider hiring a professional real estate agent.

• Education and Training-You don't need to know everything about buying and selling real estate if you hire a real estate professional who does. Henry Ford once said that when you hire people who are smarter than you are, it proves you are smarter than they are. The trick is to find the right person. For the most part, they all cost about the same. Why not hire a person with more education and experience than you? We're all looking for more precious time in our lives, and hiring pros gives us that time.
• Agents are Buffers-Agents take the spam out of your property showings and visits. If you're a buyer of new homes, your agent will whip out their sword and keep the builder's agents at bay, preventing them from biting or nipping at your heels. If you
• re a seller, your agent will filter all those phone calls that lead to nowhere from lookie loo's and try to induce serious buyers to immediately write an offer.
• Neighborhood Knowledge-Agents either possess intimate knowledge or they know where to find the industry buzz about your neighborhood. They can identify comparable sales and hand these facts to you, in addition to pointing you in the direction to where you can find more data on schools, crime or demographics. For example, you may know a home down the street was on the market for $350,000, but an agent will know it had upgrades and sold for $285,000 after 65 days on the market and after falling twice out of escrow.
• Price Guidance-Contrary to what some people believe, agents do not select prices for buyers or sellers. However, an agent will help to guide clients to make the right choices for themselves. If a listing is at 7%, for example, an agent has a 7% vested interest in the sale, but the client has a 93% interest. Selling agents will ask buyers to weigh all the data supplied to them and to choose a price. Then based on market supply, demand and the conditions, the agent will devise a negotiation strategy.
• Market Conditions Information-Real Estate agents can disclose market conditions, which will govern your selling or buying process. Many factors determine how you will proceed. Data such as the average square foot cost of similar homes, median and average sales prices, average days on the market and ratios of list to sold prices, among other criteria, will have a huge bearing on what you ultimately decide to do.
• Professional Networking-Real Estate Agents network with other professionals, many of whom provide services that you will need to buy or sell. Due to legal liability, many agents will hesitate to recommend a certain individual or company over another, but they do know which vendors have a reputation for efficiency, competency and competitive pricing. Agents can, however give you a list of references with whom they have worked and provide background information to help you make a wise selection.
• Negotiation Skills and Confidentiality-Top producing agents negotiate well because, unlike most buyers and sellers, they can remove themselves from the emotional aspects of the transaction, and because they are skilled. Its part of their job description. Good agents are not messengers, delivering buyers offers to sellers and vica versa. They are professionals who are trained to present their clients case in the best light and agree to hold client information from competing interests.
• Handling volumes of Paperwork-One page deposit receipts were prevalent in the early 1970's Today's purchase agreements are around 10 pages or more. That does not include the federal and state mandated disclosures nor disclosures dictated by local custom. Most real estate files average from one to three inches of paper. One tiny mistake or omission could land you in court or cost you thousands. In some states lawyers handle the disclosures, thank goodness!
• Answer Questions After Closing-Even the smoothest transactions that close without complications can come back to haunt. For example, taxing authorities that collect property tax assessments, doc stamps, or transfer tax can fall months behind and mix up invoices but one call to your agent can straighten out the confusion. Many questions can pop up that were overlooked in the excitement of closing. Good agents stand by ready to assist. Worthy and honest agents don't leave you in the dust to fend for yourself.
• Develop Relationships for future business-The basis for an agents success and continued career in real estate is referrals. Few agents would survive if their livelihood was dependent on consistently drumming up new business. This emphases gives agents strong incentives to make certain clients are happy and satisfied. It also means that an agent who stays in the business will be there for you when you need to hire an agent again. Many will periodically mail market updates to you to keep you informed and stay in touch.

How Long Should It Take You To Find What You Want?

Often, I show only one home, after all, how many homes does one family need? A few buyers will look for years, but buyers who do that are not motivated. A motivated buyer will find a home within two weeks. Most of my buyers, here in Elkhart County, Indiana, find a home within two days.

Good real estate agents will listen to your wants and needs and arrange to show you only those homes that fit your particular parameters.

How Many Homes Will You See?

Studies show that your memory dramatically improves after eating carbs and slows upon eating sugar. So, layoff the soft drinks and have a hearty meal of carbs before venturing out to tour homes. The average number of homes I show to a buyer in one day is seven. Any more than that, and the brain is overloaded. Therefore, don't expect to see 20 or 30 homes, although it is physically possible to do, you probably will not remember specific details about any of them.

The Red shoes Experience

Women will relate to this. say you need anew pair of red shoes. You go to the mall. At the first shoe store, you find a fabulous pair of red shoes. You try them on. They fit perfectly. They are glamorous, priced right too. Do you buy them? Of Course Not! You go to every other shoe store in the mall trying on red shoes until you are ready to drop from exhaustion! Then you return to the first store and buy those red shoes. Do not shop for a house this way. When you find the perfect home, buy it!

How To Rate Inventory

• Bring a digital camera and begin each series of photographs with a close up of the house number to identify where each group of home shots started and ended.
• Take copious notes of unusual features, colors and design elements.
• Pay attention to the homes surroundings. What is next door? Do 2 story homes tower over your single story?
• Immediately after leaving rate each home on a scale of 1 to 10, with 10 being the highest.

View top choices a second time. After touring homes for a few days, you will probably instinctively know which one or two homes you would like to buy. Ask to see them again. You will see them with different eyes and notice elements that were overlooked the first go around.

At this point, your agent should call the listing agents to find out more about the sellers motivation and to double check than an offer hasn't come in, making sure these homes are still available to purchase.

Making the Selection

I'll let you in on a little secret. I generally know which home a buyer is going to choose, and I suspect most other agents operate the same way. Its our intuition, but I make a practice not to steer buyers, and I insist buyers choose the home without interference from me. Its not my choice to make.

Real Estate Agents are required, however, to point out defects and should help buyers feel confident that the home selected meets the buyers search parameters.

Talk to you again soon!

Evelyn Johnston

Prudential One Realty

574-304-7148

evelyn@evelynjohnston.com

Husband Pleasing Desert

This is a fantastic easy to make desert! You will love it!


1/2 C. margarine
1 C all purpose flour
1 8oz pkg cream cheese-room temperature
2 C. non dairy whipped topping, divided
1 3.4 oz pkg. instant chocolate pudding
1 3.4 oz pkg. instant vanilla pudding
2 C. milk
1 C. chopped pecans
1 C. powdered sugar

Prehead oven to 325 degrees. Melt margarine and combine flour and pecans. Mix well and pat into bottom of a 9" X 13" pan. Bake for 20 minutes, let cool. Combine cream cheese, powdered sugar and 1 cup of non dairy whipped topping. Spread evenly over cooled baked crust. Combine instant pudding mixes with 2 cups milk according to package directions. Spread over cream cheese layer. Spread remaining non dairy whipped topping over pudding layer. Chill throughly before serving. May garnish with shaved chocolate. Makes 16 squares.

Enjoy!

Evelyn Johnston
Prudential One Realty
Real Estate Agent
574-304-7148

How To Find The Right Home

Just because you may feel restricted by price ranges-especially if this is your first or second home purchase-don't let anyone tell you that you can't afford to be choosey when looking for a home to buy! You are unique. You have desires and needs, hopes and dreams for your new home that are different from your parents, friends or coworkers, okay? Your local Real Estate Agent will be a good source to help you find homes for you to look into. So lets get busy defining these homebuying parameters and writing them down.

Location and Neighborhood

Suburbs or Country

• 
  
  Pros: Generally less expensive. Often newer. Tract homes and conforming. More home for the money.


• 
  
  Cons: More time in traffic if driving to town for work. Further away from entertainment options cities have to offer.

Urban

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  Pros: Closer to many employers, walking distance to theatres, restautants, schools. Many period homes offer more distinctiveness in styles.


• 
  
  Cons: Often nosier, higher crime rates, more expensive.

Busy Streets

• 
  
  Pros: Often homes on streets with more traffic are thousands of dollars cheaper. If noise doesn't bother you, don't pass up homes on busy streets. Drive by at different times of the day/week to ascertain noise levels.


• 
  
  Cons: These types of homes will always sell for less than others in the same area. If bedrooms are located near the front of the home, sleep may be disturbed.

Cul de Sac

• 
  
  Pros: Number One choice of buyers with children.


• 
  
  Cons: Less privacy, neighbors know more about you.

Corner Lots

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  Pros: Often larger lots, fewer neighbors, more visability.


• 
  
  Cons: More traffic noise. More vulnerable to vehicles jumping the curb. Kids might tresspass at the corner. More sidewalk to shovel in Winter.

Single Family

• 
  
  Pros: Good appreciation. Opportunity for gardens. More privacy. Quieter.


• 
  
  Cons: More expensive than our next catagory. More maintenance.

Condos, Townhouses, Cooperatives

• 
  
  Pros: Less expensive than comparable single family homes. Generally newer so fewer repairs. Lock-n-Go lifestyle. No yard or exterior maintenance.


• 
  
  Cons: Less privacy. Noiser, Common walks and/or floors and ceilings. Sometimes no private yard or balcony.

Number of Stories

Single Story

• 
  
  Pros: Easy wheelchair access. Some medical conditions such as bad knees make it hard for certain individuals to climb stairs. Easier to clean.


• 
  
  Cons: Can be noiser if stereos or TV's are located on same floor as bedrooms. Some people feel safety is compromised if bedrooms are at ground level. More of the lot is absorbed by living quarters.

More Than One Story

• 
  
  Pros: More living space on same foundation than a ranch home. Less noise if entertaining on a lower level while other family members sleep upstairs.


• 
  
  Cons: More trips up and down the stairs to carry stuff to bedrooms. If laundry rooms are on the second floor, washer leaks are major. Might need dual vaccuum cleaners. It is difficult to maintain consistant temperatures on each level without dual heating and cooling units.

Split Levels

• 
  
  Pros: Often less expensive if purchased with lower level unfinished. Higher ceilings are appealing. Downstairs family room seperates noise levels from upstairs. More square footage on same size lots as ranch homes.


• 
  
  Cons: Less storage space. Hassle to take trash downstairs and carry groceries upstairs or vice versa. Kitchens tend to be smaller.

Interior Specifications

Number of Bedrooms

• 
  
  Pros: Common minimum requested configurations are 3 bedrooms. Newer parents prefer bedrooms on one level.


• 
  
  Cons: 2 bedrooms appeal primarily to first time home buyers, singles or seniors. However, don't discount a two bedroom if an extra den will satisfy your space requirements.

Number of Bathrooms

• 
  
  Pros: More than one bathroom is preferred by most people. One bathroom homes are generally less expensive.


• 
  
  Cons: Don't pass up a one bath home if there is room to add a second bath. Sometimes it costs less to put in an extra bath than it doess to buy a two bath house.

Square Footage

• 
  
  Pros: Larger spaces offer more room and cost less per square foot than smaller spaces.


• 
  
  Cons: Don't be mis-lead as lay-out is more important than actual square footage. Sometimes well designed smaller spaces appear larger.

Bonus Room

• 
  
  Pros: Extra space for media rooms, art studios, children's playrooms, gyms, den/study.


• 
  
  Cons: More expensive.

Garages

• 
  
  Pros: Cheaper to build. Convenient if raining or snowing.


• 
  
  Cons: Higher noise levels inside the home from cars. Some people feel they are an eye sore. If the garage door to the house self-locks, you could get locked out at an inopportune time.

Detached

• 
  
  Pros: Can be tucked away from sight lines. Quieter.


• 
  
  Cons: More expensive to build. Farther to walk or carry things in god or bad weather.

Additional Considerations

• 
  
  School Districts


• 
  
  Special Amenities i.e. fireplaces, pools, spas


• 
  
  Condition of Plumbing or electrical


• 
  
  Condition of heating and cooling units


• 
  
  Available Utilities i.e. cable, DSL or satellite


• 
  
  Sewer, cesspool or septic connections


• 
  
  Fixers-If you're handy with tools, you might save a lot of money if you consider homes that need minor improvements, fresh paint or new carpeting.

Nest posting will be about how long it should take for you to find the home that is right for you!

Talk to you again soon!

Evelyn Johnston

Prudential One Realty

Real Estate Agent

evelyn@evelynjohnston.com

574-304-7148

You Should Buy A Home, Right?

Just Married and everyone is saying you should own your home! That's what you've been hearing from family and friends, right? You should own your own home...or should you? Let's weigh the benefits and see if buying is for you...

1) Pride of ownership is the #1 reason why people yearn to own their own home. It means you can paint the walls any color you want, turn up the CD volume, attach permanent fixtures and decorate your home according you your own taste. Home ownership gives you and your family a sense of stability and security. It is making an investment for your future.

2) Appreciation. Although real estate moves in cycles, sometimes up, sometimes down, over the years, real estate has consistently appreciated. The office of Federal Housing Enterprise Oversight tracts the movements of single family home values across the country. It's House Price Index breaks down the changes by region and metropolitan area. Many people view their home as a hedge against inflation.

3) Mortgage Interest Deductions. Home ownership is a superb shelter and our tax rates favor home ownership. As long as your mortgage balance is smaller than the price of your home, mortgage interest is fully deductible on your tax return. Interest is the largest component of your monthly mortgage payment.

4) Property Tax Deduction. IRS publication 530 contains tax information for first time home buyers. Real Estate property taxes paid for a first home and a vacation home are fully deductible for income tax purposes.

5) Capital Gain Exclusion. As long as you have lived in your home for two of the past five years, you can exclude up to $250,000 for an individual or $500,000 for a married couple, of profit from capital gains. You do not have to buy a replacement home or move up. There is no age restriction, and the "over 55" rule does not apply. You can exclude the above thresholds from taxes every 24months, which means you could sell every two years and pocket your profit subject to limitation-free from taxation.

6) Preferential Tax Treatment. If you receive more profit than the allowable exclusion upon a sale of your home, that profit will be considered a capital asset as long as you owned your home for more than one year. Capital assets receive preferential tax treatment.

7. Mortgage Reduction Builds Equity. Each month, part of your monthly payment is applied to the principal balance of your loan, which reduces your obligation. The way amortization works, the principal portion of your principal and interest payment increases slightly every month. It is lowest on your first payment and highest on your last payment. On average, each $100,000 of a mortgage will reduce in balance the first year by about $500.00 in principal, bringing that balance at the end of your first 12 months to $99,500.

8. Equity Loans. consumers who carry credit card balances cannot deduct the interest paid, which can cost as much as 18% to 22%. Equity loan interest is often much less and it is deductible. For many homeowners, it makes sense to pay off this kind of debt with a home equity loan. Consumers can borrow against a home's equity for a variety of reasons such as, home improvement, college, medical or starting a new business. Some states restrict home equity loans.

So now you know, home ownership is the best decision for you. You are focused and certain. Good. Next time we will define search parameters!

Talk to you soon,

Evelyn Johnston
Prudential One Realty
Real Estate Agent
evelyn@evelynjohnston.com
574-304-7148

Congratulations on Your Marriage!

This is the beginning of a very special time in your life, just married! The Wedding is over and now it is time to get on with the Happily Ever After! Where do you begin? Most Newlyweds spend more money in the first year of marriage than settled marrieds spend in five years, according to a recent survey. There is furniture to buy, kitchen staples, automobiles, sheets and towels and a home to put it all in. That home is my specialty! I am a Real Estate Agent and I help take the stress out of the process! Call me at 574-304-7148 to talk about your options as a first time home buyer and the types of mortgages available just for you!