Tuesday, June 30, 2009

Condo owners in Florida, including Aventura condos, Miami Beach condos, Sunny Isles Beach Hallandale condos

Owners of a condo or a townhouse with condo associations, take note re: HO-6 “WALLS IN” INSURANCE

This just in from Michele J. Baena, Senior Home Mortgage Consultant,
Florida Home Finance Group, LLC, An Affiliate Of Wells Fargo Home Mortgage….

As of July 1, borrowers must obtain Homeowners - 6 (HO-6) “walls-in” insurance for all condominium projects with attached units. Most borrowers will not be familiar with walls-in insurance requirements or will think their monthly association dues cover the needed insurance.

Typically, Condominium Associations do not insure the interior of the condo unit. It is the responsibility of the condo owner to properly insure interior improvements, such as: kitchen cabinetry, bathroom or lighting fixtures, upgraded flooring, extensive sound systems and appliances.

Insurance Requirements:

Walls-in coverage is required for all improvements and betterments within the condo unit. In most instances, coverage is provided by a separate, borrower-maintained and borrower-provided HO-6 policy (or comparable policy).

The amount of coverage is determined by the borrower’s hazard insurance provider.
The policy must indicate that claims (settlements) for damage to the unit will be paid on a replacement-cost basis.
The maximum deductible allowed is 5%.

NOTE: If a Condominium Association’s master insurance policy provides walls-in unit coverage, the borrower does not need to obtain insurance (see next section). The master policy must include replacement coverage of improvements and betterments the borrower makes on the unit.

If a borrower disputes the need for their individual borrower-provided HO-6 policy because they believe their Condo Association’s master insurance policy covers their individual unit, they can follow up with their Condo Association, Property Manager, REALTOR or builder to verify coverage is included in their master policy. If the borrower is informed coverage is provided, they will need to obtain:

Declaration (of Condominium, CC&Rs, or Master Deed)
Articles of Incorporation
Recorded Condo Plan/Plat/Survey Map
All applicable recorded/executed items

It will then have to be submitted for verification. michele.baena@floridahomefinancegroup.com, www.homeloans.com/michele-baena APPLY ON LINE

Saturday, June 27, 2009

Why Buy Now? -- Fein Times in Real Estate

Why buy now?

Interest rates remain low, but may rise over time, the number of homes and condos on the market far exceed demand driving down price and the first-time home buyer credit of up to $8,000 expires the end of this year.

Interest rates: Mortgage rates jumped from about 4.5% to 5.4%. Not yet a deterrent but a call to act soon. The monthly cost already have increased about $55/month. Not a lot but it rates are projected to rise over time. Why buy now? a 1% increase in interest rates can wipe out a 10 percent drop in home price in a 30 year mortgage. Check out this YouTube video that provides a simple explanation on mortgage interest rates: or cut/paste: http://www.youtube.com/watch?v=_lnrH0WhCNo

Months of Inventory a Market Indicator:
Months of inventory is the number of months it will take to sell all the listings in a given market or neighborhood. Important to note in this equation is a large number of listings are priced well over current market price and the sellers won’t accept less. If those listings were eliminated, ‘months of inventory’ would decrease even further. A balanced market, meaning it is neither a buyer or seller’s market, according to industry analysts, is about six months of inventory. One factor suggesting the bottom is either here or near is the # of months of inventory is shrinking.

First time homebuyer tax credit of up to $8k?
Scroll down for an earlier blog post.

Your competition for that home or condo you want is heating up!

Florida’s existing home sales rose in May – the ninth month in a row that sales activity increased in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR). Also, for the first time in many months, the statewide median sales price in May for existing homes and for existing condos rose over the previous month’s figure.

Prudential Florida Realty Steps Up With Its Own Stimulus Package
Two major hurdles keeping today’s homebuyers on the fence even when market indicators show it’s a buyers market may be fear -- employment stability and concerns that prices may continue to decline. Prudential Florida Realty stepped in to overcome both obstacles.

The "Homebuyer Employment Guarantee" is a mortgage payment relief program facilitated by the in-house mortgage company, Florida Home Finance Group, an affiliate of Wells Fargo Home Mortgage. It is designed to protect homeowners from the most common cause of missed mortgage payments and foreclosures: Involuntary unemployment and /or disability. A $620 investment paid by either the buyer or seller will: Cover up to $2,000 per month, for 24 months for Principal, Interest, Taxes and Insurance PITI. Total maximum benefit payout is $16,000 over all.

Afraid you buy the house and need to sell before you have earned equity? Buy a ‘Price Guaranteed Listing’ by Prudential Florida Realty. If you need to sell within three years and the price declined, I won’t charge you the listing commission.

First time homebuyer tax credit of up to $8k?
Go to www.aventuracondosales.com, my blog, for more information. Since I posted that blog, a number of bills have been introduced in the House and the Senate that lobby for an expansion of the measure. Among the proposed changes:
Setting a new cap of $15,000.
Extending the tax break into mid-2010.
Making the benefit available to all home buyers, not just first-timers.
Offering a separate tax credit to $3,000 for borrowers who refinance.

Thursday, June 11, 2009

First time homebuyer $8000 Tax credit

Mortgage rates are at an all time low, sellers are motivated, owning a home is a great investment in your future, and can lead to many, many years of happy memories.

And now….. Another great reason to buy a home now – an $8,000 tax credit for first time homebuyers!

If you qualify and buy your primary home residence before December 1, 2009, then you’re eligible for the credit—allowing you to deduct 10% of the purchase price of your home up to $8,000 when you file your taxes. A lot of people thought the $8,000 tax credit would be available for closing costs or to supplement the down payment of the purchase. Not so unless you live in Florida.

In Florida, the buyer can now access a down payment program (DAP) that is funded by the State of Florida based on a bill the Governor signed May 29. However, don't get too excited as it comes with strings attached, according to Michele Baena, Senior Home Mortgage Consultant, Florida Home Finance Group, LLC, An Affiliate Of Wells Fargo Home Mortgage.

She reminds us that the buyer can only use the down payment assistance [DAP] with an FHA loan and the Buyer must still come up with the first 3.5% down payment from their own funds (just like they do today). The DAP can be used to pay for closing costs, pre-paids, discounts points to lower rate or additional down payment. Lender also has to review tax returns carefully to make sure borrower will be eligible for the $8000 tax credit. DAP will also need to be counted as a second lien at the time of purchase and may have a monthly payment calculated into the ratios.

Michelle offers a simpler solution that accomplishes the same thing as the new legislation and is a lot less complicated.

Have the buyer go FHA and come up with their own 3.5% down payment (Gift or otherwise) just like you would have to under the new legislation. Have the SELLER pay the closing costs and pre-paids. Once the loan closes the buyer can wait until they file their 2009 tax returns in 2010 or they can easily file an amended tax return right after closing at no cost and get the $8000 tax credit right after they close.

If you use conventional financing, [most often you will need 20% down], or if you pay cash for the purchase, you would file an amended tax return for the $8,000 tax credit.

Want more information about the tax credit? Go to www.irs.gov or www.HousingMarketFacts.com, from the National Association of Realtors, for more information.

Ready to get started and search for your new home in South Florida, go to www.lorifeinsells.com to search properties for free.