Sun City Neighborhood

October MLS Inventory, Sun City Neighborhood

Mortgage Fraud and your Buyer's Agent

When buying a home in today's market, you MUST be concerned about MORTGAGE FRAUD. Not only the FRAUD FOR PROFIT that many have experienced, but the FRAUD FOR HOUSING. Yes, if you lie, or are encouraged to lie in the mortgage application, that is FRAUD. It is both a Federal and Arizona FELONY. Your buyer's agent should help you avoid potential financial losses and criminal prosecution.

This post is inspired by 2 others on this forum. Lenn Harley's MORTGAGE FRAUD THRIVES - THE PLAYERS ARE THE SAME and Broker Bryant's You want my buyer to do what?

Both of these posts touch on the Buyer's agent responsibility in the procurement of a home loan. I am just adding some of my thoughts to theirs.

Many problems in today's real estate market have been caused by FRAUD! Often guided by the lending officer, who feels pressured to make the deal at any cost. Since most states do not require the lending officer to have a fiduciary responsibility to the lender, fraud may easily occur.

Buyer's agents DO have a fiduciary responsibility to the buyer. It is their highest duty when representing the buyer. Why don't they stop the fraud? Here are a few reasons.

1. Accepting a buyer provided lender. Sorry folks, this is my biggest fear. Many, if not most lenders don't play well with real estate agents. They do not keep us in the loop, and often won't provide us with the information necessary to protect and counsel the buyer. Make sure your lender will talk to your agent, or be prepared to accept the consequences.
2. Many agents don't understand mortgage rules and procedures. I will bet most agents have never seen a buyer's Good Faith Estimate. If your agent doesn't know what is on this document, there is no way to help the buyer understand the loan they are getting.
3. In my state, most buyer's agents do not attend closings. I have never seen a loan originator at a closing. It is at the closing, or a few days earlier, that you get to look at the Note. The Note defines all of the terms and conditions of the loan. Anything said or written prior to the signed note are null.
4. Many agents were "trained" to let the "mortgage professional" do the job without interference. This has often been justified as "preserving a buyer's privacy". It is imperative the buyer's agent be involved.

These are just a few of the things a buyer's agent should do to protect their buyer, and make the real estate purchase a good one.

Fall is here!

It may be only for a few days, but this first day of fall was glorious! I'm sure we will have some more triple digit days before Halloween, but today was great.

The people who live in the New England area, upper Midwest, and even in Arizona's mountains mark the change of seasons by the changing colors of the leaves in the trees. Those of us who live in the Sun City and Sun City West of Arizona's Sonoran desert mark the change by the changing colors of the license plates on the cars in front of us. I particularly like the blue of Minnesota, and the red of Wisconsin, but all snowbirds are welcome.

And now for a joke. Seen on a bumper sticker... So many snowbirds, so little freezer space! Joke folks

Jim Little, Your Sun City Realtor
http://jclittle.com/
Ken Meade Realty
17001 N Del Webb Blvd
Sun City AZ 85373
800-877-1776
623-977-1776

By the way...if you know someone who is interested in buying or selling real estate in the Sun City Neighborhood, Peoria, Glendale or Surprise, please call me with their name and phone number. Thank you!

ARMs, Part 3, Pitfalls and Benefits

The Adjustable Rate Mortgage (ARM) can be a valuable tool when buying a home. It can also become your worst nightmare.

Benefits of an ARM include:

• Ability to qualify for  more house since the qualification is based upon the first payment level.
• Gradual increase in payments if the ARM is correctly selected. This increase will hopefully be made up by an increase in your earnings.

Pitfalls of the ARM:

• Teaser, or introductory rates. This is why so many people are in trouble today. These rates mean your payments will be abnormally low at the beginning. The loss to the lender is made up by resetting after the introductory period to a level greater than the market rate. The change in monthly payment isn't gradual, it happens at once, causing monthly payments to be more than many can pay. Foreclosure is the result.
• High prepayment penalties and excessively long prepayment periods. These lock the borrower into the loan, as it is not possible to borrow enough to pay these. Recently I have seen prepayment penalties of 7% and prepayment periods of up to 9 years.
• Income fails to rise as expected, Even if your income doesn't increase, your payments may. You are obligated to make payments based upon your index, not your income.

I hope this series helps to explain the Adjustable Rate Mortgage. If you have any questions, drop me a line.

Jim Little, Your Sun City Realtor
http://jclittle.com/
Ken Meade Realty
17001 N Del Webb Blvd
Sun City AZ 85373
800-877-1776
623-977-1776

By the way...if you know someone who is interested in buying or selling real estate in the Sun City Neighborhood, Peoria, Glendale or Surprise, please call me with their name and phone number. Thank you!

Adjustable Rate Mortgages Part 2

ARMs, how they work.

A basic Adjustable Rate Mortgage (ARM) is based upon the following items (be sure your lending officer and real estate agent explains them in detail)

• An Index
• Margin
• Adjustment Period
• Maximum Increase per Period
• Maximum Increase over the Life of the Loan

INDEX: Each ARM is tied to an economic index. The index relates to the cost of the money loaned, to the lender. The loan interest, upon which the payment is based is equal to the INDEX + MARGIN. Be Careful when evaluating the index. A volatile index means your loan will adjust in an extreme fashion. Common indexes are:

• LIBOR, the London InterBank Offered Rate
• COFI, the Federal Cost of Funds Index
• T-Bills, the interest rate paid by the Treasury Bills.
• Many others may be used.

MARGIN. A percentage added to the index to allow the lender to recover costs and make a profit. If you are the borrower, you want this number to be as low as possible. If you are the lender, you want it to be as high as possible.

ADJUSTMENT PERIOD. This could be monthly, quarterly, twice a year, or yearly. Pick the one you decide will fit your situation. Pick carefully, however, you will not be able to change this later.

MAXIMUM INCREASE PER PERIOD. This one can be a killer. As a borrower, you want this to be as low as possible. An increase of 1% on a $200,000 loan is about an $80 a month increase. If you do this quarterly, you might find you cannot afford the payment.

MAXIMUM INCREASE PER YEAR. Again, another killer. Keep this number as low as possible.

MAXIMUM INCREASE FOR THE LIFE OF THE LOAN. This caps the loan. No matter what happens to interest rates over the life of the loan, this is the maximum interest rate you can be charged.

Jim Little, Your Sun City Realtor
http://jclittle.com/
Ken Meade Realty
17001 N Del Webb Blvd
Sun City AZ 85373
800-877-1776
623-977-1776

By the way...if you know someone who is interested in buying or selling real estate in the Sun City Neighborhood, Peoria, Glendale or Surprise, please call me with their name and phone number. Thank you!

Adjustable Rate Mortgages, Good or Bad, Part 1

Much has been said recently about the causes of our current and projected foreclosure rate.

Often vilified by the press as the cause of today's mortgage mess, is the adjustable rate mortgage. (ARM)

The ARM was originally developed as an instrument to give people, often first time buyers a way to get on the property ladder earlier in life. These were often younger buyers, educated, in the early stages of their careers. These buyers typically had some money down and for their closing costs.

The ARM loan was often offered at a lower interest rate since the lender didn't have the risk of inflation leaving the lender with a low return loan during periods of higher yields. These loans were typically limited to between 5 and 7 year terms, after which the loan would be renegotiated, refinanced to a fixed rate loan, or the property sold.

The advantage to the buyers is that they would be qualified for the loan on the initial rate, usually less than that of conventional loans. The initial payments were lower, and as their income increased, so did the payment.

The borrowers using these loans had every reason to believe that their income would increase as the loan interest and payments increased.

More recently, ARMs were used to finance borrowers who had minimal or poor credit records, and no real potential of increased income. Additionally, these buyers had little or no money to invest in the property, hence need to get their down payment and closing costs financed. As recent events have made clear, this is a recipe for financial disaster.

Jim Little, Your Sun City Realtor
http://jclittle.com/
Ken Meade Realty
17001 N Del Webb Blvd
Sun City AZ 85373
800-877-1776
623-977-1776

By the way...if you know someone who is interested in buying or selling real estate in the Sun City Neighborhood, Peoria, Glendale or Surprise, please call me with their name and phone number. Thank you!

Is it Time to Buy A New Home?

To know the answer to that question, it is important to ask yourself the following questions first:

1. Do you plan on living in the home for 3 to 5 years?
2. Do you have a stable job or retirement income?
3. Are rents and rental occupancy rates increasing in the area you wish to live?

If you answered yes to these three questions, now is the time to buy a home.

If you want a great buy, and could care less about keeping up with the Jones. buy the house that will provide a HOME for you and your family.

The tactic many buyers seem to be taking now, that of attempting to time the market, is self-defeating. Attempting to "time" the market and buy at the bottom, is as difficult as trying to "time" the top and sell at the top. If you don't believe me, ask the many thousands of real estate "investors" who have filed for bankruptcy recently.

When considering buying a home for you and your family, a few very important things must be considered.

1. Pick a home with a good LOCATION! Homes with good locations sell when nothing else will.
2. Pick a home with good fundamentals. Don't buy one with an odd floor plan, a lot too big or too small for your needs, too few or too many bedrooms or baths, etc.
3. Get a loan approval FIRST! Interest rates are still near historical lows, and if you are buying a normal family home, fixed rate conforming loans are still availabe, but the seller will need to know you are prepared to buy the home before taking the home off the market. Your real estate agent should be able to help you with this.

Jim Little, Your Sun City Realtor
http://jclittle.com/
Ken Meade Realty
17001 N Del Webb Blvd
Sun City AZ 85373
800-877-1776
623-977-1776

By the way...if you know someone who is interested in buying or selling real estate in the Sun City Neighborhood, Peoria, Glendale or Surprise, please call me with their name and phone number. Thank you!

>About The Author

As a full time agent with Ken Meade Realty a Sun City neighborhood Brokerage business, Jim utilizes his Marketing Degree and 35 years of Business and Real Estate experience in order to help clients with their primary residence and second home needs. He contributes to a daily Web Blog which focuses on the Sun City, Sun City West, Glendale, Peoria and Surprise Arizona Real Estate Market, as well as other topics important to those and neighboring communities. For more information on Jim and Ken Meade Realty, please visit his website at http://www.suncityneighborhood.com/ or his other blog at:http://activerain.com/blogs/jlittle

Jim Little, Your Sun City Realtor

30 Home Buying Secrets You Should Know

Lenn Harley, a broker in Maryland at Homefinders.com wrote about this in her blog. I feel it is important enough to quote a few of the secrets here.

Secret: The agent's whose name is on the FOR SALE sign in the yard has promised the seller that he/she will get the best price for the seller.  The only information required of a seller's representative would be "material defects".  General condition of a property should be obtained the a home inspection with a contingency to void the contract if the house has serious maintenance, structural problems

Secret:Earnest money deposits may be forfeited if a buyer falsely represents his/her financial ability to obtain financing.  Buyers who do not cooperate with the financing paragraphs and cause the seller to keep the home off market have caused the seller serious damages and may not get their earnest refunded.

Secret:  Termite Warranties do not protect your home from termite damage.  Termites cannot read.

To see the other 27 secrets, please go to Lenn Harley's blog by clicking here.

Jim Little, Your Sun City Realtor
http://jclittle.com/
Ken Meade Realty
17001 N Del Webb Blvd
Sun City AZ 85373
800-877-1776
623-977-1776

By the way...if you know someone who is interested in buying or selling real estate in the Sun City Neighborhood, Peoria, Glendale or Surprise, please call me with their name and phone number. Thank you!

>About The Author

As a full time agent with Ken Meade Realty a Sun City neighborhood Brokerage business, Jim utilizes his Marketing Degree and 35 years of Business and Real Estate experience in order to help clients with their primary residence and second home needs. He contributes to a daily Web Blog which focuses on the Sun City, Sun City West, Glendale, Peoria and Surprise Arizona Real Estate Market, as well as other topics important to those and neighboring communities. For more information on Jim and Ken Meade Realty, please visit his website at http://www.suncityneighborhood.com/ or his other blog at:http://activerain.com/blogs/jlittle

Jim Little, Your Sun City Realtor

When are you Age Qualified?

Homes for sale in Sun City Grand, Westbrook Village

If you like many others believe you have to be 55 years old to live in an active adult community, have I got news for you.

Both Sun City Grand, and Westbrook Village have lower age restrictions. You may buy a home and live in it at age 45 in Sun City Grand. Homes for sale in Sun City Grand range from $129,000 to $889,000.

Westbrook Village has an even lower age limit. You can buy a home and live in it in Westbrook Village at age 40. Homes for sale in Westbrook Village range from $149,000 to $539,000.

How can these communities do this? The federal rule is that 80% of the homes have at least 1 occupant over 55 years old, and no occupant under 19 years old for longer than 90 days. If the bylaws of the community allow it, and the community governing body will keep the records, households can be allowed occupancy of younger people up to 20% of the total. The key is keeping records, which Sun City Grand and Westbrook do.

Think about it, you can enjoy the benefits of active adult community living while you are still young enough to enjoy it.

Jim Little, Your Sun City Realtor
http://jclittle.com/
Ken Meade Realty
17001 N Del Webb Blvd
Sun City AZ 85373
800-877-1776
623-977-1776

By the way...if you know someone who is interested in buying or selling real estate in the Sun City Neighborhood, Peoria, Glendale or Surprise, please call me with their name and phone number. Thank you!

>About The Author

As a full time agent with Ken Meade Realty a Sun City neighborhood Brokerage business, Jim utilizes his Marketing Degree and 35 years of Business and Real Estate experience in order to help clients with their primary residence and second home needs. He contributes to a daily Web Blog which focuses on the Sun City, Sun City West, Glendale, Peoria and Surprise Arizona Real Estate Market, as well as other topics important to those and neighboring communities. For more information on Jim and Ken Meade Realty, please visit his website at http://www.suncityneighborhood.com/ or his other blog at:http://activerain.com/blogs/jlittle

Jim Little, Your Sun City Realtor