COMPLETE NM INFORMATION PAGE

FAQ HOW WE FIND YOUR HOME

Home buying and selling tips

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WHAT TO BRING
If you cut out your agent when you buy you will still pay the same, click to see how fees are in NM

TO SEE NM HOLIDAY
WE CAN HELP YOU LIST AND SELL YOUR EXISTING HOME BEFORE YOU DO ANYTHING CALL US!
NO FIRE ANTS IN NM, FEW FLEAS, AND LITTLE LYME DISEASE!!
PLASTIC PIPE WARNING! LEAD PAINT WARNING!Tip

 Very few homes in the Albq. Area have basements.
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 Evapotive cooling is in common use in the Albq. Area. If you need info on how they work ask Chuck by email.Tip

Your "Loan To Value (LTV) Ratio" is the ratio of the loan to the price of the house. If your loan to value ratio exceeds 80%, most lenders require Private Mortgage Insurance (PMI). This PMI insures the lender against possible losses should you default on the loan. PMI effectively adds about .4% to your interest rate, though it varies with the loan to value ratio. Check with NM Mortgage for latest rates on our page.

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WINDY SEASON MAR/APR RAIN JUL/AUG (except el nino)

The monthly expenses of a home are referred to as "PITI." This stands for "Principal, Interest, Taxes and Insurance." The principal and interest (PI) together equal your mortgage payment. The taxes (T) are the property taxes, which vary dramatically depending on your location. The insurance (I) is your hazard insurance. Annual premiums for basic policies are about .3% of the cost of the house.

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You do not need to pay off all your monthly debts before applying for a home loan. If the lender's long term debt ratio is 36%, and the lender's housing expense ratio is 28%, then long term debts, such as car payments and student loans, can consume up to 8% (=36% - 28%) of your gross monthly income before impacting the loan amount for which you qualify.

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Lenders limit the portion of your gross monthly income that may be dedicated to the Principal, Interest, property Taxes, and property Insurance (PITI).Typically PITI must absorb less than 28% to 33% of your gross monthly income. Furthermore, PITI plus other long term debts must absorb less than 36% to 40%.

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A safe estimate for closing costs is 5% of the loan amount. For example, the closing costs on a home loan of $100,000 are approximately $5,000. If you have $25,000 to put down, you can afford a home of about $120,000.

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Seattle has one of the highest appreciation rates in the country, with over 12% annual appreciation between 1987 and 1993. Albuquerque is in the top 4 cities that appreciate. With a median home price of over $360,000, Honolulu has the most expensive home prices in the United States.

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INTEREST RATES

TERMS USED
The interest rate of an adjustable rate mortgage is tied to an index. The most popular indexes are listed below, along with their average over the past twelve years:

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Fannie Mae's "3/2 loan program" provides loans to first-time buyer of 95% of the house price. The buyer may put down as little as 3%, with the additional 2% down payment in the form of a gift from family members, a government program, or nonprofit agency.Call (800) 732-6643
If you cut out your agent when you buy you will still pay the same, click to see how fees are in NM

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The following eight states are "community property" states:

Moving to an unfamiliar town? Subscribe to the local paper to get a flavor for the area. Trish and I can give you the information.

Tip TO SEE FAIR HOUSING INFORMATION

Federal Housing Administration (FHA) loans are not limited to low income families. The current FHA loan limit is about $100,000. The FHA does not provide the loan directly. Instead, the FHA simply guarantees the loans, which are obtained through local lenders. Ask Mike Potts our money guy about this.

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Often a new-home builder will not negotiate on the base price, because the base price will impact the appraisal value of subsequent homes the builder sells.

However, in a buyers market, the builder will negotiate on the options and amenities included in the base price.

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You can limit your competition for homes by making purchase offers during the November to January holiday season.

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A home sold without a real estate agent may not be lower in price. Sellers enduring the headache of marketing their own home are usually trying to save the commission for themselves, not for their buyer.

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Even if you have no children, the quality of the local schools will be important to potential buyers when you eventually sell. Make a list of the schools that serve your area and have it with your home brochure.

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Of the many factors influencing the potential profit of home ownership, the most important is appreciation. Trish and I think satisfaction is also right up there.

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You can reduce the total amount of interest you pay on the loan by pre-paying some of the principal. The impact of this prepaid principal is to reduce the life of a fixed-rate loan. The monthly mortgage payment remains fixed however. When you prepay the principal of an adjustable rate mortgage, the life of the mortgage stays fixed. The monthly mortgage payment is reduced at the next adjustment date.
INTEREST RATES

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If the current owners keep all items in the basement elevated off the floor, suspect that the basement takes on water in the winter.

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Tax in NM

Three closing costs are tax deductible in the year of the sale:

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Keep a shoe box with lid in your closet. Every time you are faced with an unmatched sock, put it in the shoe box. On your birthday, dump out all the socks. You will discover that all of your unmatched socks have magically found their mates!

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Within three days of applying for your home loan, the lender must send you a "Good Faith Estimate" of your closing costs. Verify that this estimate agrees with the information that the lender gave you before you applied for the loan.

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If you paid for the appraisal, you are entitled to a copy of it. If it is not offered, request a copy in writing.

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When qualifying you for a loan, lenders typically do not consider income from rooms rented out in a home you are purchasing as a personal residence.

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Verbal agreements aren't worth the paper they're written on.

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Ask the utility company for the average monthly bill of the home you are considering. Ask the same question about your current home, so you can compare.

TipTypically a home should have at least 100 amp electrical service. The amperage of the service is determined by the main circuit breakers. The amperage of the service is usually less than the sum of the individual circuit breakers.

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Insurance agents have a wealth of information on any given neighborhood.Give your insurance agent the address. Ask him or her to tell you everything they know about the area. Request an estimate of your car and hazard insurance premium at the address under consideration. If you need an agent ask Chuck or Trish.

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A termite report focuses on fungal and pest infestations. The focus of a building inspection report is much broader, including checks of the foundation and appliances, among other items. In Albq. Are of NM we do not see a lot of above ground infestations. Most are subterranean type.

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Typically fixed-rate loans are not assumable, and adjustable rate loans usually are. FHA loans made prior to December 1, 1986 and VA loans made prior to March 1, 1988 are freely assumable. Any loan sold to Fannie Mae before November 10, 1980 is fully assumable.

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Lenders usually qualify borrowers for an adjustable rate mortgage using the maximum possible interest rate at the beginning of the second year. For example, assume that the initial rate is 5% and that the interest adjusts annually. If the annual adjustment cap is 2%, then the lender qualifies the borrower at 7% (=5% + 2%).

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Adjustable loans include a ceiling on the maximum interest rate over the life of the loan. Always get this life-time cap figure as an absolute maximum interest rate (such as "16.5%"), not as a maximum change in interest rate (such as 5%). This prevents any ambiguity.

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The best home owner's insurance policy guarantees "full replacement value," not simply "depreciated value."

If the home is more than a few years old, always include the "code upgrade" option, which covers the cost of meeting new code requirements since construction of the home.

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If you intend to live in the home less than seven years, always ask if the lender offers "short-term fixed" loans. These loans are amortized over 30 years, but are due in 5 or 7 years. The interest rate is often .5% lower than a straight 30 year loan.

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For bargains, look for ads that imply cosmetic problems with the house, such as "diamond in the rough" or "has potential." A house that requires a $1,000 face lift is often priced $10,000 below market value.

TipPoints are tax deductible by the buyer in the year of the sale. Even points paid by the seller can be deducted by the buyer.

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When purchasing in a new development, always ask residents who have already purchased if they are satisfied with the quality of construction and with the responsiveness of the builder to complaints.

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Some of these tips are taken from "HomeBuyer - The Book and Software Home Buying Kit" for Windows. $27.95 from Stratosphere Publishing. 1-800-646-6456. Press the "More Info" button for details.

TipThe top three remodeling jobs in terms of "return on investment" are:

Seven states have no state income tax:

For a free copy of your credit report, call TRW at 1-800-392-1122.

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During your regular commute hours, drive from and return to the home you are considering purchasing. This alerts you to potential traffic problems. We have average mileage's on our web site.

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For information on repossessed homes owned by the Fannie Mae, the largest housing finance agency in the nation, call 1-800-553-4636.

Rental ads are loaded with potential home sellers, waiting to be harvested. Call on rental ads for homes that interest you and ask the landlord if he or she would consider selling the home.

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The local school district office can direct you to the results of school-by-school tests. We have them on our web site nmhomes.com.

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A prequalification letter from a lender may encourage the seller to take your offer seriously. This letter states that, given the preliminary financial information that you have provided the lender, you qualify for a loan of a given amount at a given interest rate. Contact us or go to our online prequal at:. We have a page on the site.

But a pre-approval letter is even better. This letter states that you are actually approved for a loan of a given amount at a given interest rate, pending only an appraisal on the home of your choosing. To get preapproved by the lender, you must formally apply for the loan and pay the associated loan application fee.
 
 

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Trish Dawson, Attorney at Law, REALTOR (R)
Chuck Dawson, Associate broker with

COLDWELL BANKER LEGACY

PO Box 2480
Corrales NM 87048
(505)898-9380

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TRISH DAWSON, JD, REALTOR (R)  AND
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