The Real "Price" of a “No-Cost” Loan

Just a quick mention about my previous post about the show...Last week we talked about the “Keep Your Home California” program.  One of the logistical complications that has caused the delay is the fact that Fannie Mae and Freddie Mac last week instructed their loan servicers to participate in the program, dramatically increasing the number of potentially eligible homeowners.  Will keep you posted on that. . .

This week, we look at the real costs associated with a "no-cost" loan

Some homebuyers who may be concerned about paying high closing costs might be tempted by a “zero-cost” or “no-cost” loan option, which requires no cash outlay, but typically adds a half percentage point to the rate. 

However, some financial consultants say these loans tend to be most beneficial to buyers planning to have the loan for less than five years.

Making sense of the story
    •    One of the primary differences between a no-cost loan and similar loans is that no-cost loans do not tack on closing costs to the balance, but instead increase the rate.

    •    With no-cost loans, third-party fees including the appraisal, credit report, title insurance, recording, and the use of a mortgage broker are paid by the lender.  The fees, including the amount the broker is being paid, are disclosed on the closing statement.

    •    Home buyers who bypass a broker and work directly with a lender may encounter less transparency, as loan officers are not required to disclose the amount the bank is making on the loan.

    •    Borrowers weighing their loan options are advised to use a mortgage amortization calculator to compare the costs for a conventional loan compared with a no-cost loan.  The Federal Reserve provides an amortization calculator on its Web site at www.federalreserve.gov.

574 WATSON STREET, Monterey MLS #: 81015217 $1,995,000 Beds: 5 Baths: 4 (3/1) 
One of the most unique & beautiful homes in Monterey. This Craftsman Cape Cod style home has been completely remodeled.  Spectacular views of Monterey Bay, mountains, and city lights from the master bedroom and viewing room. The home's luxurious interior is spacious and the workmanship is something to marvel at.  SqFt: 4,900 Lot Size: 34,557 Sqft

384 CORRAL DE TIERRA , Salinas Monterey Highway #: 80828203 $1,530,000 Beds: 1 Baths: 1 (1/0) 
Seller Financing or partial Property Trade for navigable waterfront property!  16 yr old guest house on gated 10acre parcel. Can be purchased separately or with adjoining three 10 acre parcels for a fabulous 40 retreat/estate!!  SqFt: 1,488 Lot Size: 10 Acres

4041 EL BOSQUE DRIVE, Pebble Beach MLS #: 80941855 $1,495,000 Beds: 3 Baths: 3 (3/0) 
This single story, unfinished Mediterranean Style home, offers an open & spacious floor plan high ceilings  & beautiful , custom windows. Extra wide front entrance Door.  Living room, casual dining rooms & family room with fireplace,  a spectacular gourmet kitchen.  Plan has radiant floor heating with tiles/granite.  Great value in PB, owner will complete the home at this price  SqFt: 3,300 Lot Size: 12,870 Sqft

0 SW CORNER OF MONTE VERDE AND 12Th STREET, Carmel MLS#: 81050665 $1,150,000 Beds: 2 Baths2 (2/0) 
Here's the perfect Carmel getaway.  All freshly painted and updated and all new granite kitchen. Located on a corner lot in the Golden Rectangle.  SqFt: 1,342 Lot Size: 4,000 Sqft  Come see me this weekend Sat  2-4 & Sun 1-4.

461 DELA VINA AVENUE,#205, Monterey MLS #: 81052880 $189,000 Beds: 2 Baths: 1 (1/0) 
Conveniently located in Monterey, close to shopping and restaurants, this condo has so much to offer! Large closets, sky lights to let in natural light, in-unit laundry, surplus of storage and covered parking. The large patio is a great place to enjoy the peace and quiet this complex offers & the kitchen/dining/family/great room is large, inviting and oh so cozy!  SqFt: 970 Lot Size: 921 Sqft 

©  Patty Ross, KRXA Radio Show #184  November 12, 2010

Keeping Your Home in Challenging Times

The U.S. Treasury Department has approved CalHFA's plan to use nearly $700 million in federal funding to help California families struggling to pay their mortgages.

Keepyourhomecalifornia.com 

The Keep Your Home programs are focused on assisting low and moderate income families stay in their homes, when possible, and leveraging additional contributions from lenders and mortgage servicers.
Primary objectives for the Keep Your Home Programs include:

• Preserving homeownership for low and moderate income homeowners in California by reducing the number of delinquencies and preventing avoidable foreclosures
• Assisting in the stabilization of California communities

Each of the Keep Your Home programs is designed to address one or more aspects of the current housing crisis by doing the following:

• Helping low and moderate income homeowners retain their homes if they either have suffered a financial hardship such as unemployment, have experienced a change in household circumstance such as death, illness or disability, or are subject to a recent or upcoming increase in their monthly mortgage payment and are at risk of default because of this economic hardship when coupled with a severe decline in their home's value.
• Creating a simple, effective way to get federal funds to assist low and moderate income homeowners who meet one or all of the objective criteria described above. Speed of delivery will be balanced with fulfillment of the specific program's mission and purpose.
• Creating programs that have an immediate, direct economic and social impact on low and moderate income homeowners and their neighborhoods.

The program was due to begin Nov. 1^st but has been delayed several weeks due to logistical issues – more on that next week..

MY TOP PICKS FOR THE MONTEREY PENINSULA REAL ESTATE MARKET:

4 YANKEE POINT DRIVE, Carmel Highlands MLS #: 81051778 $949,000 Beds: 3 Baths: 2 (2/0)
Yankee Point Home under $1.0M! Views of the ocean, key to beach, many fresh details, best of appliances, Fruit trees large side yard, very private nestled among the trees. Decks with plenty of outdoor area to entertain. Home shows pride of ownership in all respects. Everything is in wonderful move-in condition. Regular sale. Estate sale everyone is motivated.  SqFt: 1,808 Lot Size: 19,084 Sqft

4235 CANADA LANE, Carmel 93923 MLS #: 81021878 $629,000 Beds: 3 Baths: 3 (2/1)
MOVE-IN READY SPACIOUS HOME ON A QUIET CUL-DE-SAC IN AWARD-WINNING CARMEL SCHOOL DISTRICT. NEW CARPETING & INTERIOR PAINT THROUGHOUT, NEW STAINLESS STEEL APPLIANCES, VAULTED CEILINGS, LIGHT, BRIGHT & SPACIOUS 3 BEDROOMS, MASTER BATH HAS SEP TUB & SHOWER, DUAL SINKS, ALL BEDROOMS OPEN ONTO DECKS TO TAKE IN THE FORESTED VIEWS. LARGE 2 CAR GARAGE + CIRCULAR DRIVE.  SqFt: 1,880 Lot Size: 17,859 Sqft

38350 LAUREL SPRINGS ROAD, Carmel Valley MLS #: 81027147 $595,000 Beds: 1 Baths: 1 (1/0)
The Magic Kingdom - 40 acres of complete privacy, mature oaks & madrones, open meadows. Wonderful mountain views, well-built cabin in like-new condition. Energy self-sufficient property. Gently rolling meadow - ideal for construction of new home, horse barn, and paddocks. Locked security gate, video camera system on property. Located about 50 minutes' drive from Carmel. Live close to nature.  SqFt: 840 Lot Size: 1,743,358 Sqft

1077 AMADOR AVENUE, Seaside MLS #: 81028692 $198,888 Beds: 2 Baths: 1 (1/0)
Bay views from front yard. Sale to be "As Is"--major fixer upper subject to short sale approval.  SqFt: 864 Lot Size: 5,000 Sqft

© Patty Ross KRXA Radio Show #183  November 5, 2010

Breathe Easier: 5 Tips to Banish Mold from the Home

I hesitated talking about this issue (not uplifting) until I found actual mold under the floor in the bathroom of my very own house this week! I live in a 1932 cottage in Carmel. Living on a peninsula opens us up to a bit more of this issue than in dryer areas. Often, our first encounter with mold at home occurs in that infamous spot between the shower curtain and tub. It’s pretty disgusting, but it’s easy to wipe up. Unfortunately, in most homes, this isn’t the extent of the mold—the more problematic mold is the insidious kind, hiding behind walls and in floorboards, and potentially contributing to a range of allergies and other illnesses.

What causes mold? Surprisingly, advanced building materials are one of the main culprits. An aging home is at even greater risk, as normal occurrences like window and roof leaks bring in even more moisture—and moisture is a direct cause of mold. Limited ventilation or sunlight only makes the problem worse.

How do you find the mold in your home? Sometimes it’s easy—it may be right in front of you, or you’ll find it by its distinctly musty smell. Though it’s harder to find hidden mold, you can do so by looking behind and beneath fixed materials and appliances: refrigerators, dishwashers, sink cabinets, washer/dryers, carpets, vinyl flooring—anywhere near where water flows or where air doesn’t penetrate readily. Also, look for signs of discoloration on walls and ceilings; this can denote a moisture buildup behind which mold may lurk.

Once you find the mold, remove it with a store-bought anti-fungal solution, or get rid of it with a weak bleach solution—1 cup bleach in 1 gallon of water. But even more important than removing it is eliminating as many of its causes and sources as possible.

Follow these 5 tips to drastically reduce the mold in your home:

1. Call in a home inspection professional to assess water-damaged areas.

2. Keep humidity low. Humidity levels should be under 40% in order for mold to stop its forward march.

3. Replace any carpets and furniture that have ever been significantly damaged even if they look OK on the outside.

4. Carpet in the bathroom or basement? Don’t even think about it. And if you have it, get rid of it.

5. Provide adequate ventilation in hot areas. The kitchen and bath are two of the highest-risk rooms for mold. Install exhaust fans in both.

There are at least 5 more tips so call me for the long list 831-236-4513..

And for this week's top picks in the Monterey Peninsula real estate market:
0 SW CORNER OF MONTE VERDE AND 12Th STREET, Carmel MLS #: 81050665 $1,150,000 Beds: 2 Baths: 2 (2/0)

Here's the perfect Carmel getaway. All freshly painted and updated with 2 bedrooms, 2 baths and all new granite kitchen. Located on a corner lot in the Golden Rectangle. SqFt: 1,342 Lot Size: 4,000Sqft open this Sat 1-4 & Sun 2-4 Come see me

16091 BALFOUR LANE, Salinas Monterey Highway MLS #: 81051596 $549,000 Beds: 3 Baths: 3 (2/1)

Single story Serra Village home at a great price! This lovely home is filled with light and set on a large, corner lot. The 3 bedrooms are all good sized with updated bathrooms. The living room/dining room combo has a large & beautiful brick fireplace with French doors leading to a large backyard with patio & lush lawn. Lovely front yard & patio. Great home, Great price & truly turn key! SqFt: 1,667 Lot Size: 10,365 Sqft

1255 MESCAL STREET, Seaside MLS #: 81051436 $430,000 Beds: 3 Baths: 2 (2/0)

Short sale opportunity. Very nice single-story home in upper Seaside. Enjoy the city light and airport views from the back and rolling hills from the front. Sales price subject to lender approval. Home is in move-in condition. SqFt: 1,719 Lot Size: 7,800 Sqft

1925 BRADBURY STREET, North Salinas MLS #: 81050619: $225,000 Beds: 3 Baths: 3 (2/1)

Beautiful 3 bed 2 1/2 bath home in the Cottages at Miramonte. Very well cared for and maintained and in great condition. High Ceilings, fireplace, nice tile counters, and a large back patio. Short sale subject to lender approval. SqFt: 1,397 Lot Size: 2,580 Sqft

© Patty Ross, KRXA Radio Show #182 October 29, 2010