Home on the golf course

Granite coutertops and up to date appliances await you!

Entertain with ease while enjoying this gourmet kitchen with Granite countertops, island and hearth room with fireplace. Impressive large foyer and great room that features 28’ ceilings with expansive windows all allowing for natural light.

In order to decide which of the two is better for you, you need to carefully analyze your life situation in the following areas:

1. Current Financial Situation

Can you presently afford to pay the higher monthly payment of a 15-year loan on your  Lees Summit real estate? In addition to income, factor in other expenses such as credit card debt, car payments, food, clothing, and entertainment. As a guiding principle, your total housing expense should not exceed 40% of your gross monthly income minus taxes. Beware of becoming house poor and having few liquid assets. It is essential that you have a hefty nest egg to rely on I n case you lose your job or are unable to work.

2. Spending Habits

If you choose a 30-year mortgage, what will you do with the money you save each month?

Will you save/invest it? Put it in a retirement or college fund? Can you live on a budget, avoid credit card debt, and save regularly? If so, then the 30-year loan may work well for you. If, however, you can afford the higher payment and will most likely “fritter away” any extra money, you just may be better off borrowing for 15 years.

3. Tax Ramifications

You should certainly check with your accountant regarding the tax benefits and /or disadvantages of each type of mortgage. Because mortgage interest is a major income tax deduction, many people want to keep paying the mortgage on their Lees Summit real  estate for as long as they can.

4. Future Expenses
Will you need extra money for college costs or retirement planning? What about emergency repairs on your Lees Summit real estate or nursing home fees? The 15-year mortgage lacks the flexibility of the 30-year one in providing money to deal with these needs. If you have saved or invested the money saved with the 30-year mortgage, you will have liquid assets available to meet these expenses. You can, of course, obtain a home equity loan on your 15- year mortgage, but you will pay a rate of interest higher than that on the original loan.

5. Your Ultimate Goals

If your major financial purpose is to build equity quickly and pay off the mortgage in a shorter time, the 15-year loan may be for you. If, however, you’d like to make mortgage payments for a shortened time period but have serious reservations about contractually obligating yourself to an inflexible higher amount, you might consider making extra payments on your 20-year mortgage, whatever and whenever you can. Another option is to convert your 30-year loan to a 15-yeae one at a time when your financial situation is stable and you have accumulated assets adequate to sustain you in an emergency.

Deciding which mortgage is better for you will require an understanding of the advantages and disadvantages of each and a thorough analysis of your current and future financial situation, your lifestyle, and your goals.

Pre-qualification:

This is a lender’s informal way of estimating how much you may be able to borrow. It is based on the information you provide (often by phone), none of which needs to be verified or documented. Since a letter of pre-qualification gives you an idea of how much house and the amount of mortgage payments you can afford, the best time to get pre-qualified is as soon as you decide you want to buy a Lees Summit home.

You supply to the lender unverified information about your income, assets, debts, and possible amount of a down payment. There is no cost involved in obtaining pre-qualification, and there is no commitment for either party. Understand, however, that a letter of pre-qualification does not mean you will get a loan; it is simply a ballpark figure of the amount you can afford to spend on your Lees Summit home and an indication that you might qualify for a mortgage in that amount.

Here you can get an informal and quick estimate of your pre-qualification or for a more in-depth analysis.

Pre-Approval:

This designation is a firmer commitment on the part of the lender and requires a more detailed and formal process which includes a credit check and employment verification. You will need to provide W2’s, pay stubs (tax returns if you are self-employed), and bank and investment statements to verify your assets.

While this process is more detailed and complex, it is definitely worth your time and effort! Not only does it allow you to shop for Lees Summit homes with more financial confidence, pre-approval also shortens the actual loan application process and often allows for quicker settlement. In addition, sellers appreciate the fact that pre-approved house hunters are serious about buying their property and that financing should not be a problem.

In Summary:

Pre-qualification:

1. Informal collection of data

2. No documentation required

3. Verification not done by lender

4. An estimate of the amount you might be able to borrow.

5. Not an entitlement to a loan; simply the first step in the home buying process.

Pre-approval:

1. Comprehensive collection of data

2. Documentation required

3. Verification is done by lender

4. Certification of how much money the lender would most likely be willing to loan you

5. Not an absolute guarantee of financing. Funding won’t be given until after the property appraisal, title search, and any other items needing verification have been completed.

Jackson County and Kansas City MO had 6,401 foreclosure homes in September 2010. The average price of a Kansas City MO home was $143,422 and the average sales price of a foreclosed home was $102,455, according to RealtyTrac.com. A $40,967 savings.

Jackson County and Kansas City MO Foreclosure Activity and Home Price Index

Kansas City MO foreclosure activity increased in Sept with 870 new foreclosures while price appreciation was 0.0%.

Jackson County MO foreclosure activity is based on the total number of properties that receive foreclosure filings – default notice, foreclosure auction notice or repossession notice – each month. Home price appreciation is based on month-over-month percentage change of the Home Price Index. The Home Price Index is calculated from home sales records.

Jackson County and Kansas City MO Foreclosure Geographical Comparison

 Jackson County and Kansas City MO foreclosures were the same as national statistics and 0.13% above Missouri numbers.

Jackson County and Kansas City MO Foreclosure Activity by Month

The number of bank-owned properties decreased from 411 in August to 328 in September and the number of auctions increased from 547 to 542. There is a six month rising trend.

Are you or someone you know behind on your mortgage payments and facing a foreclosure? You do have options. A short sale may be the answer to saving you, your family and your home. I am a Certified Distressed Property Expert (CDPE). Contact me a call for a private consultation.

1. ACT NOW! Time is of the essence. Do not ignore letters or calls from your lender. If you do, chances are that action to foreclose will begin quickly.

2. CONTACT YOUR LENDER: When you reach the lender, you should be prepared to provide him/her with your account number; a brief explanation of your circumstances; income documents or evidence of unemployment, public assistance, or business losses; and a list of your household expenses. Ask about a reduced interest rate, refinancing, lengthening the term of the loan, and a repayment plan for missed payments. In all probability, the lender will mail you a loan workout package. It is important that you complete and return these forms quickly.

3. DO RESEARCH; Reread your loan documents to determine what is said about unpaid mortgage payments. Learn about specific foreclosure laws in your state Get in touch with the government housing office where you live.

4. CONSIDER SELLING: Lenders will most likely suspend foreclosure proceedings while your Lees Summit home is on the market and possibly even eliminate mortgage payments during this time. Explore a short sale. If the market value of your house is less than you owe, your lender may consider taking the sale proceeds and forgiving the rest of the debt. Or you might give your deed to the lender in return for the loan balance being cancelled. Check with an attorney or housing counselor before taking these actions.

5. BEWARE OF SCAMS! Avoid “foreclosure prevention” companies who offer to negotiate with your lender, will cost you thousands of dollars, and may even “rescue” your home away from you. Do not sign anything from these firms!

6. SET PRIORITIES: Pay the mortgage on your Lees Summit home before paying credit card debts, doctor bills, or the like. Can you sell a second car or other assets? Could you take a second job to ease the situation? Your lender needs to know that you are serious about trying to find a solution to your financial problems and are willing to make sacrifices to do so.

7. EXPLORE ALL OPTIONS:

a. Get legitimate help. Contact a HUD approved housing counselor (1-800-569-3287) or 1-888-995-HOPE) for free or low-cost guidance. Help is also available from the National Foundation of Credit Counselors (1-866-557-2227). Also, check with your local bar association or a neighborhood legal services program for pro bono legal representation.

b. Look into government benefits such as fuel assistance, food stamps, or property tax abatements to help you through this difficult period.

It is important that you be both aware and proactive in your fight to keep your Lees Summit home!

Probably having the greatest impact on a potential buyer is your floor plan. Open spaces which make the living area appear large, airy, and unobstructed are most desirable. Flexible floor plans feature an eat-in kitchen which opens up into the dining and family rooms, thus allowing for family togetherness and ease of entertaining. To achieve this sense of space and unity, you should provide multiple accesses to the kitchen and ensure an unobstructed line of sight and a practical traffic flow. Here are specific suggestions regarding these layouts.

Multiple Uses

While buyers are no longer clamoring for extremely large homes with excess square footage, they do insist on functional areas with both specific and multiple uses. Home offices are still in demand, but several smaller work stations spread throughout your Lees Summit home are also in vogue. Dual office/bedrooms, large and plentiful storage spaces, and a children’s retreat for study and recreation have become popular, as have entertainment centers such as a bar, a home theater, or an exercise room. Of primary importance is the idea that no space is wasted and that the need for both privacy and togetherness has been considered throughout your home.

In keeping with the “greening” of real estate, rooms which bring the outside in are valued by buyers. This effect can be achieved by a large expanse of windows overlooking gardens, a pool, or inviting landscaping and by carefully selecting eco-friendly paints. These should reflect the soothing colors of nature–from pastels to earth tones.

Of equal importance to a potential buyer of your Lees Summit home are features which bring the inside outside. Today’s buyers want to extend their “open” atmosphere to a yard which has spaces, furniture, and equipment designated for specific uses–an outdoor cook/dining area, for example, a reading/relaxation corner, a children’s activity space, or a conversation area grouped around a fire pit.

You may also want to consider generational home buying trends as you plan your remodeling. According to the National Association of Home Builders (NAHB), both young buyers and the over 50 set are “driving the demand for smaller, smarter homes designed to function more efficiently with no wasted space and plenty of room for storage.” The Boomers desire “high-tech features, an open floor plan, and spaces to enjoy outdoor living.” (NABH Builders’ Magazine, July 2009, “Brave New World.”)

Eligibility: you must be at least 62 years of age, own your own home (or have a very low balance that can be paid off), and be living in it as your primary residence. Your Lees Summit home must meet FHA property standards, and you must provide on-going maintenance and pay property taxes, association dues, and insurance. In addition, you must also agree to attend an information counseling session

Amount: Factors used to determine the amount of your eligibility include your age, interest rates, and the value of your home. Most reverse mortgages provide you with a monthly payment. The are online websites that allow you to calculate/estimate the amount. Go to www.AARP.com, www.USAReverseMortgageAdvisor.com, or www.ReverseMortgageGuides.org for assistance.

Advantages: As stated in Gilbert’s Guide, a reverse mortgage includes these advantages:

• Reverse mortgages for seniors can be set up as a monthly payment, line of credit or a lump sum—whatever works best.
• No matter how the reverse mortgage is set up, the home owner does not make any monthly payments.
• No monthly payment is due from the home owner unless he or she dies, moves or sells the home. At that time, the loan is due in full, plus interest and fees.
• The home owner can receive monthly income from a reverse mortgage as long as he or she lives in the home as a primary residence. A home owner could potentially continue to receive monthly payments even after the loan balance is higher than the amount that the house is worth.
• Neither the home owner nor his or her heirs will ever owe more than the home is worth, no matter how many payments are received or how high the interest rates become.
• It’s fairly easy to qualify for this loan since credit scores and income are not part of the qualification process.
  

Thus, you may convert home equity into available money to meet escalating medical costs, supplement Social Security payments, and make necessary repairs to your Lees Summit home. Best of all, you can stay in your home and not have to move.

Disadvantages: Gilbert’s Guide also cautions that there are cons involved with reverse mortgages. Some of these include:

• Reverse mortgages for seniors have high closing costs. The senior must pay origination fees that are about double what they are for conventional mortgages and mortgage insurance. The interest rates are adjustable. So, because the set-up costs are expensive, you certainly don’t want a reverse mortgage if you’re going to move in three to five years.
• For seniors who depend on Medicaid or other state or federal programs, it’s important to consider if reverse mortgage payments will affect their eligibility.

The senior is required to attend counseling by an independent HUD counselor prior to receiving a reverse mortgage. These are complex loans and this is a measure of consumer protection, and this point should be high on your reverse mortgage pros and cons checklist.

As with any financial undertaking, you should meet with your real estate agent, your tax advisor, and your attorney during the decision-making process. Discuss the matter with your family members who may be affected by your participation in this program. Talk with other seniors who have a reverse mortgage, and use, either in person or online, knowledgeable sources such as AARP, Fannie Mae, HUD, the Federal Housing Administration and your bank to your advantage.

• If a crime has been committed, report it to the police. You should get a copy of the police report.

• Contact your insurance agent or company immediately.

• If necessary, try to protect your property from further damage. Save your receipts.

• Don’t dispose of damaged items until the adjuster has seen them.

• Prepare a list of damaged items. Take pictures of the damage. (Now aren’t you glad you made an inventory list/video?)

• Get the appropriate claim forms and fill them out completely. Return them within the time limit.

If you encounter problems (such as denial or inaction within a reasonable period of time) settling your insurance claim for your Lees Summit real estate, you can follow these steps:

• Make sure you can support your case with documentation. Be prepared to send copies with any letters. Keep the original documents, such as estimates and receipts and only send copies. Also keep copies of all letters.

• Be prepared to document each phone call. Note the date and time of each conversation and name of each person you talked to.

• Review your policy to see if it contains information on resolving disputes or appealing a claim denial.

• Talk with your agent or company representative. If they can’t solve the problem then get the name and phone number of the company’s claims manager.

• Send a letter explaining your problem including copies of supporting documentation to the company claims manager.

• If your problem still isn’t satisfactorily resolved, then contact your state insurance department and file a complaint. Locate your state insurance web site using the National Association of Insurance Commissioners (NAIC) web site.

• As a last resort, you may want to consult an attorney. Make sure you choose an attorney that specializes in homeowners insurance. Be prepared to pay a consultation fee and get the fee structure in writing before pursuing the case.

To reduce the chances of having to file a claim at all, use common sense when it comes to installing and maintaining smoke, carbon monoxide, and motion detectors, cleaning chimneys and wood stoves on a regular basis, and keeping a dry chemical fire extinguisher in the kitchen. Rely on deadbolt locks and an alarm system for protection against theft and use space heaters with caution. Your policy may contain clauses or conditions that specify other reasons that could void portions or all of your coverage. Examples include failure to report claims promptly, failure to cooperate fully with the insurance company, and failure to protect the property from further loss. Another example would be using your home for a business (perhaps even providing informal but regular childcare for three or four children not your own) not specifically included in the policy. Make sure you read your policy carefully to determine what the conditions are.

An insurance company may also cancel or refuse to renew your coverage or raise your premiums if for any reason the property no longer meets their underwriting criteria. For example, perhaps the building has grown too old or the zoning has changed, or you have in some way increased your liability exposure trampoline to the yard). Filing too many claims, in many cases, may also lead to cancellation.

And a word to the wise about keeping your policy in effect. An insurance company can cancel your policy for non-payment of premiums, fraud, or misrepresentation. Your policy may contain clauses or conditions that specify other reasons that could void portions or all of your coverage. Examples include failure to report claims promptly, failure to cooperate fully with the insurance company, and failure to protect the property from further loss. Another example would be using your home for a business (perhaps even providing informal but regular childcare for three or four children not your own) not specifically included in the policy. Make sure you read your policy An insurance company may also cancel or refuse to renew your coverage or raise your premiums if for any reason the property no longer meets their underwriting criteria. For example, perhaps the building has grown too old or the zoning has changed, or you have in some way increased your liability exposure. Filing too many claims, in many cases, may also lead to cancellation.
An Insurance Guide For Your Lees Summit Real Estate – Part I

An Insurance Guide For Your Lees Summit Real Estate – Part II

• Organize it by room.

• Describe each item, including make and model, and where it was bought. Record the serial number, if the item has one.

• Attach sales receipts, purchase contracts, and appraisals to your list.

• For clothes, count each type of item, such as pants, shoes, shirts, coats, etc. Particularly note those that are valuable.

• Supplement your written list with photographs. Make sure you label the photos.
• If you have a video camera, videotape each room. You can also add a narration as you tape.

• Don’t forget items that are in drawers, closets, attic, and basement.

• Use your computer. Make your list, scan in receipts, photos, and other papers. Keep these in a fireproof box. Make a copy of your inventory and photos and store them away from the house.

• Add valuable new items (such as a new entertainment system) to the inventory when you purchase them. Review and revise the list annually.
  

What is generally covered?
Under the HO-3 policy type (the most popular), damage caused by perils and hazards such as fire, lightning, smoke, windstorm (in certain parts of the country), hail, vandalism, falling objects, theft, weight of snow or ice, vehicle striking the structure, building collapse, water damage from bursting pipes, and structural damage from an electrical surge are covered.

What is usually excluded?
Under the same HO-3 policy, damage not covered includes that caused by an earthquake, floods, windstorms (in certain parts of the country), war, pets, birds, rodents, or insects, sewer backup, pollution. Damage done by you or that which is the result of normal wear and tear is also excluded.

Do not despair, however. You can add riders or special endorsements to your policy to cover some of the above-mentioned exclusions and/or to increase the coverage for items whose value exceeds the basic limits. Some of these endorsements can include: wind, sewer backup, jewelry, fine art, furs, theft coverage protection, etc.

Valuable items such as jewelry, art work, and collectibles should be appraised so that you will have adequate coverage. Another thing to consider is adding a rider to insure your home office if you do not have a separate business policy.

So you have purchased adequate insurance for your Lees Summit real estate, have inventoried your belongings, and have put that list in a protected place–and you’re feeling secure and confident. But what if life throws you a curve and your property is stolen or damaged? Then what? Look for Part III in this series for help in filing and/or settling a claim and for tips to prevent losses at all.

An Insurance Guide For Your Lees Summit Real Estate – Part I