Thursday, August 27, 2009

Act fast! Homebuyer tax credit ends soon!

NEW YORK ( -- Use any metaphor you want: the ticking clock, sands running through the hourglass or pages falling away from the calendar. The fact is, time is running out to claim the $8,000 first-time homebuyers tax credit. CLICK HERE to read the article!

Thursday, August 20, 2009

Indy is still a top pick!

CLICK HERE to read the list of "Most Affordable Cities" according to

The older, industrial Midwest cities generally offer the best bargains. Indianapolis has led the NAHB's Housing Opportunity Index for 16 straight quarters. Nearly 95% of all homes sold there were affordable to those earning the area's median income of $68,100.

Sunday, August 16, 2009

This Month in Real Estate

Only FIVE months since the 1970's have been this good to buy a home! Plus a good explaination on paying down your mortgage and tips on raising your credit score.

Tuesday, August 4, 2009

Broad Ripple Bungalow

CLICK HERE to see pictures of a great 2 bedroom, 1.5 bath bungalow with a Sunroom, fenced yard, and finished basement. All for $104,900!!

Friday, July 31, 2009

Do you have "Good Funds?"

Effective tomorrow, July 1st, any funds brought to closing in the excess of $10,000 must be in the form of a wire. The Good Funds Bill, House Bill 1374, has been signed into effect by the Governor. The new law affects all title companies in Indiana and cannot be deviated from under any circumstance.

When scheduling a closing, keep in mind that wire transfers are not immediate. A wire transfer requires time to be recognized by the receiving bank. While some wires post immediately, many can take 4 hours or even longer from the time sent until the time received by the intended party. Many banks have early afternoon cut offs for processing both outgoing and incoming wire transfers. This could result in some wire transfers not being completed until the following day.

Thursday, July 30, 2009

New Mortgage Requirements

I was in a meeting this morning with Kurt Francher of Bank of America Home Loans and learned a few new things:

1. Any deposits over $500.00 have to be documented. If you sell anything or receive a gift and make a deposit over $500.00, make a copy of the check and file it away just in case you're asked. In fact, just make copies of all checks you deposit.

2. Buyers must have 30 days on the job before closing. Previously a buyer only had to have one paystub to prove they were working. If you're starting a new job, you're a minimum of 30 days from closing.

3. Relocating couples used to be able to count the "trailing spouse" income even if the spouse had not gotten a job yet. No more.

If you have any questions about financing, let me know. Kurt Francher can be reached at 317-679-8832 or Let him know I sent you!

Sunday, July 26, 2009

Why First Time Buyers May Only Have 10 Days Left To Buy A Home

You may be thinking "Oh...I've got plenty of time cash in on the $8,000 Tax Credit!" but I challenge you to read on...

Some facts to consider:

1. You must own the home on November 30th. That's a Monday. Banks aren't open and you can't close on Saturday or Sunday. The Friday before is an iffy time to close since it's right Thanksgiving. Realistically, you should plan to close no later than Wednesday the 25th...AT THE LATEST! And that's assuming you're not heading out of town for Thanksgiving. ( I really talking about Thanksgiving in July??) Read on.

2. Many home loans are taking 45-60 days to close. In fact, it's kinda rare to have one close on time right now! A buyer really should have the home under contract no later than October 1st to be safe.

3. September: This September has a chance to be a really crazy month in real estate! Think about it: "The Law of Supply & Demand." If a lot of buyers are looking at homes at the same time, there will be more competition for those homes and buyers will lose negotiating ability. Buy in August if you can at all to avoid paying more money the last minute rush! (Note to Sellers: Great time to list your home!)

4. If you plan to be cautious and buy during the month of August and you only have weekends free to look at homes...guess what? Since this weekend is over, YOU HAVE ONLY 10 DAYS TO FIND A HOME!

Click on one of the real estate links on the right side of this blog to begin your home search or contact me today and find out why so many First Time Buyers have said, "Roger's my REALTOR!!"

Don't get caught in a bidding war or lose the home you want! Buy in August!

Roger Lundy
Keller Williams Realty

Thursday, July 23, 2009

10 Things To Buy Before The Economy Improves

The "Sale of the Century" may be nearly over....

CLICK HERE to read what we need to be buying now!

Monday, July 20, 2009

Hamilton County Honors

I just saw this in the MIBOR e-newsletter and wanted to pass it along:

The list of Indiana cities and towns making national rankings keeps growing. According to Inside Indiana Business, several Indiana communities are receiving high rankings in this year's wide-ranging "Best Places to Live" lists published by Money Magazine, Fortune and CNN. Communities were singled out because they were the best places to live, most affordable, and have had the most job growth.

Hamilton County is named as the eleventh best county in the country for job growth over the last eight years. The two Hamilton County communities featured in that article are Noblesville and Westfield. Among the overall Best Places to Live Top 100, Brownsburg in Hendricks County is 33rd, while the Lake County town of St. John is 48th. The Allen County community of New Haven is second when it comes to Affordable Homes. To read the full Inside Indiana Business article click here. For the Best Places to Livewebpage click here.

This Month In Real Estate 2009 First Time Home Buyer Tax Credit Special Edition

Each month, This Month in Real Estate provides expert opinion and analysis on real estate trends across the nation. The aim of the consumer-oriented segments is to provide real information on real estate.

Friday, July 17, 2009

This Month In Real Estate

This Month In Real Estate--CLICK HERE for the youtube clip!

Each month, This Month in Real Estate provides expert opinion and analysis on real estate trends across the nation. The aim of the consumer-oriented segments is to provide real information on real estate.

Thursday, July 16, 2009

Glossary of Real Estate Terms

Amortized Loan
A loan that is completely paid off, interest and principal, by a series of regular payments that are equal or nearly equal. Also called a Level Payments Loan.

An increase in value of real estate.

Assumption of Mortgage
The taking of title to property by a grantee, wherein he or she assumes liability for payment of an existing note secured by a mortgage or deed of trust against the property, becoming a co-guarantor for the payment of a mortgage or deed of trust note.

Balloon Payment
The final payment of a mortgage loan when it is larger than the regular payment. It usually extinguishes the note.

Capital Gains
The taxable profit derived from the sale of a capital asset. It is the difference between the sale price and the basis of the property, after making appropriate adjustments for closing costs, fixing-up expenses, capital improvements, allowable depreciation, etc.

The final settlement of a real estate transaction between buyer and seller.

A system of individual fee ownership of units combined with joint ownership of common areas of the structure and land.

Contract for Deed
A contract ordinarily used in connection with the sale of a property in cases where the seller does not wish to convey title until all or a certain part of the purchase price is paid by the buyer.

Contract of Title
A summary or digest of the conveyances, transfers, and any other facts relied on as evidence of title, together with any other elements or records which may affect the marketability of the title.
Conventional Mortgage
A mortgage securing a loan made by investors without governmental underwriting, i.e., not FHA-insured or VA-guaranteed.

Counter Offer
A seller’s rejection of an offer made by a buyer accompanied by an agreement to sell the property to the potential buyer on terms differing from the original offer.

Certificate of Reasonable Value. A document of appraisal issued by the VA establishing their opinion of the maximum value.

The written instrument which, when properly executed and delivered, conveys title.

Discount Points
Additional charges made by a lender at the time a loan is made. Points are measured as a percent of the loan, with each point equal to one percent. These additional interest charges are paid at the time a loan is closed to increase the rate of return to the lender so as to approximate the market level.

Earnest Money Deposit
A down payment made by a purchaser of real estate as evidence of good faith.

Created by grant or agreement for a specific purpose, an easement is the right, privilege or interest which one party has in the land of another.

The interest or value an owner has in real estate over and above the liens against the real property.

The deposit of instruments and funds with instructions to a neutral party (Escrow Agent) to carry out the provisions of an agreement or contract. When everything is deposited to enable carrying out of instructions, it is called a complete or perfect escrow.

The trading of equity in a piece of property for equity in another property.

Fannie Mae
The nickname of the Federal National Mortgage Association (FNMA), a tax-paying corporation created by Congress to support the secondary mortgages insured by FHA or guaranteed by VA, as well as conventional home mortgages.

Fee Appraisal
The act or process of estimating values of real estate or any interest therein for a fee.

FHA Loan
A loan which has been insured by the federal government guaranteeing its payment in case of default by the owner.

Firm Commitment
A lender’s agreement to make a loan to a specific borrower on a specific property. An FHA or PMI agreement to insure a loan on a specific property, with a designated purchaser.

A loan insured by the federal government similar to FHA loans, usually used for residential properties in rural areas.

Freddie Mac
The nickname for the Federal Home Loan Mortgage Corporation (FHLMC), a federally controlled and operated corporation to support the secondary mortgage market. It purchases and sells residential conventional home mortgages.

The holder of a mortgage or the permanent lender for whom the mortgage banker services the loan. Any person or institution that invests in mortgages.

Joint Tenancy
Joint ownership by two or more persons with right of survivorship; all joint tenants own equal interest and have equal rights in the property.

Land Contract
A contract ordinarily used in connection with the sale of property in cases where the seller does not wish to convey title until all or a certain part of the purchase price is paid by the buyer.

Lease Purchase Agreement
The buyer makes a deposit for the future purchase of property with the right to lease the property in the interim.

An encumbrance on the property which usually names the property as security for the payment of a debt or discharge of an obligation. Examples: Judgments, taxes, mortgages, deeds of trust, etc.

Loan Commitment
A written promise by a lender to make a loan under certain terms and conditions. These include interest rate, length of the loan, lender fees, annual percentage rate, mortgage and hazard insurance and other special requirements.

Loan to Value Ratio
The ratio of the mortgage loan principal (amount borrowed) to the property’s appraised value (selling price). On a $100,000 home with a mortgage loan principal of $80,000, the loan to value ratio is 80%.

Marketable Title
Merchantable title, free and clear of objectionable liens or encumbrances.

Mortgage/Deed of Trust
An instrument recognized by law by which property is pledged as security or collateral for debt without transfer of title or possession, to secure the payment of a debt or obligation to the lender. Title transfers to the lender during the foreclosure process which occurs in the event that the debtor defaults on the loan obligation to the lender.

Mortgage Insurance Premium (MIP)
The consideration paid by a mortgagor for mortgage insurance either to FHA or a private mortgage insurance (PMI) company. On an FHA loan, the payment is one-half of one percent annually on the declining balance of the mortgage. It is a part of the regular monthly payment and is used by FHA to meet operating expenses and provide loss reserves.

The lender of money or the receiver of the mortgage document.

The borrower of money or the giver of the mortgage document.

A written promise to pay a certain amount of money with or without specific terms.

Origination Fee
A fee or charge for the work involved in the evaluation, preparation, and submission of a proposed mortgage loan. Origination fees are paid by the borrower to the lender.

Personal Property
Any property which is not real property. For instance, money, savings accounts, appliances, cars, boats, etc.

One percent of the loan amount.

Prepayment Penalty
The fee paid to the mortgagee for paying the mortgage before it becomes due. Also known as prepayment fee or reinvestment fee.

Prepayment Privilege
The right given a purchaser to pay all or part of a debt prior to its maturity. The mortgagee cannot be compelled to accept any payment other than those originally agreed to.

Private Mortgage Insurance (PMI)
Insurance written by a private company protecting the mortgage lender against loss occasioned by a mortgage default.

Privately Insured Mortgage
A conventional mortgage loan on which a private mortgage insurance company protects the lender against loss.

Promissory Note
Following a loan commitment from the lender, the borrower signs a note promising to repay the loan under stipulated terms. The promissory note establishes personal liability for its repayment.

Purchase Agreement
An agreement between a buyer and seller for the purchase of real estate.

Real Property
Any land and whatever by nature or artificial annexation is a part of it.

Rent with Option
A contract which gives one the right to lease property at a certain sum with the option to purchase it at a future date.

Second Mortgage/Second Trust
Also known as a Junior Mortgage or Junior Lien. An additional loan imposed on property with a first mortgage, generally at a higher interest rate and shorter terms than a “first” mortgage.

Special Assessment
A legal charge against real estate by a public authority to pay the costs of public improvements such as street lights, sidewalks, street improvements, etc.

Straight Loan
A loan with periodic payments of interest only; the principal sum is due in one lump sum upon maturity.

A parcel of land that has been divided into smaller parts.

Tenancy in Common
Ownership by two or more persons who hold undivided interest, without the right of survivorship. Interests need not be equal.

Term of Mortgage
The period during which a mortgage must be paid.

Often used interchangeably with the word ownership. It indicates the accumulation of all rights in a property.

Title Insurance
An insurance policy which protects the insured (purchaser or lender) against loss arising from defects in title.

Trust Account
An account separate and apart and physically segregated from a broker’s own funds, in which the broker is required by law to deposit all funds collected for clients.

VA (Veteran’s Administration) Loan
A loan guaranteed by the Veteran’s Administration.

Warranty Deed
A deed used to convey real property which contains warranties of title and quiet possession, and the grantor agrees to defend the premises against lawful claims of third persons.

Thursday, July 9, 2009

How to Choose a Good Inspection Company

Is an inspection necessary?

You have the right to request an inspection of any property you are thinking of purchasing by a professional inspector of your choice. You should always exercise your option to have the physical condition of the property and its inclusions inspected. Many of the more severe and expensive problems such as mechanical, electrical, structural and plumbing, are not noticeable to the untrained eye. If repairs are needed, Roger can negotiate these in your contract. A professionally conducted home inspection followed by a written evaluation is becoming standard procedure in home buying because of increased buyer awareness and savvy.

What should your require from an inspector?

The increase in buyers requesting property inspections has caused a rapid increase in the number of people entering the inspection field. Look for designation by the American Society of Home Inspectors (ASHI).

The American Society of Home Inspectors

The best thing is to ask if the inspector is a member of the American Society of Home Inspectors. ASHI is a non-profit professional organization with strict standards and qualification criteria for membership. To become a member an inspector must demonstrate, through extensive testing, a proven knowledge of residential construction. They must have experience and expertise to recognize defects and problem situations. They are required to have the ability to convey their finding in a meaningful report. And, they are required to meet continuing education requirements. ASHI’s Standards of Practice and stringent Code of Ethics serve as a professional performance guide which all members follow.

ASHI estimates the number of home inspectors in the U.S. to be about 10,000. While membership in ASHI grows daily, only about 1,200 to date have met ASHI’s strict membership requirements. ASHI is recognized by government agencies and professional groups (including the National Association of REALTORS®) as the nation’s leading home inspection organization. ASHI sets standards for professional practice and qualification which are recognized throughout the country.

What does an inspection entail?

A qualified inspector will follow ASHI’s Standards of Practice in conducting their inspection. The inspection consists of a physical inspection of the home with the purchaser present, followed by a written report detailing their findings. They report on the general condition of the home’s electrical, heating and air systems, interior plumbing, roof, visible insulation, walls, ceilings, floors, windows, doors, foundation, basement, and visible structure. The inspection is not designed to criticize every minor problem or defect in the home. No home is perfect. It is intended to report on major damage or serious problems that require repair for the well-being of the home, and that might require significant expense.

Buyer education is necessary

The primary purpose of the inspection is to educate the buyer to enable them to make an informed purchasing decision. The inspector should allow and even encourage the buyer to attend the home inspection. A good home inspector knows how the home’s many systems and components work together and how to minimize the damaging effects of sun, water, and the passage of time. Attending the inspection provides an important opportunity for the buyer to learn, first hand, how their prospective new home works, and about possible repair costs and maintenance routines. This is valuable information which could increase the life span, and perhaps the future selling price of the home.

Continuing education is important for inspectors

A competent home inspector is familiar with the latest construction materials, home building techniques, and professional equipment. Consumers should research whether prospective home inspectors actively monitor the changes in construction and real estate in order to keep their business practices current and professional. Members of ASHI must meet annual continuing education requirements for this purpose.

Time and fee guidelines for the inspection

The time necessary to properly inspect a home, as well as the fee charged by an inspector, varies according to market location, the size and age of the home, and the individual inspection company. However, you can expect that it will take an average of two to three hours to competently inspect a typical one-family, three-bedroom home, with an average cost of $200 to $300.

Beware of false claims

Consumers must be cautious in evaluating some of the claims made by people hoping to fill the growing demand for home inspection services. Many new companies request only an application fee. Some claim to offer certification but do not require exams or proven credentials. Still others boast engineering licenses as assurance of competence, even though the engineering license has nothing to do with home inspecting.

Inspection extras

Some inspectors may be qualified to provide other types of services with their inspection that go beyond the scope of the ASHI standards. In certain states, ASHI members say that radon testing is the most common extra service requested.

Tuesday, July 7, 2009

Understanding Your Options For Taking Title

Carefully consider how you intend to take title of your property. This will determine your legal status, rights and obligations to the property. You may want to discuss your options with an attorney to determine which is best for you. Most of the possible ways to take title to your property are listed here.

Joint Tenancy with Right of Survivorship

Joint tenancy is a method of co-ownership that gives title to the real property to the last survivor. Title to real property can be acquired by two or more individuals. If a married couple acquires title as joint tenants with the right of survivorship, they must specifically accept the joint tenancy to avoid the presumption of community property.

Tenancy in Common

Tenancy in Common is a method of co-ownership in which parties do not have survivorship rights and each owns a specific undivided interest in the entire title.


Title may be taken in the name of a corporation provided that the corporation is duly formed and in good standing in the state of its incorporation.

General Partnership

Title may be taken in the name of a general partnership provided that the general partnership was duly formed according to the laws of the state. A partnership is defined as a voluntary association of two or more persons as co-owners in a business for profit.

Limited Partnership

Title may be taken in the name of a limited partnership provided that there are one or more general partners and one or more limited partners. A certificate of limited partnership must be filed in the Office of the Secretary of State, a certified copy of which must be recorded.

What is Title Insurance?

A Title Insurance Policy is a guarantee by a title company that a thorough investigation of the title to the property has been conducted and that you have been notified of any outstanding claims to the property. The title insurance company reports any defects in the title in the form of a Title Commitment so that these matters can be corrected. It is important that you know of all claims on the property and have them resolved and declared away prior to you taking title to the property. The Title Commitment will carefully detail what items of encumbrance are not covered by the policy. You can then either get these items resolved or bow out of the transaction. Title insurance covers matters that occurred before the policy’s effective date, but were discovered later. Your policy will detail what is covered, what is not covered and the effective date.

Title insurance is issued by the title company when they are certain the property is free from all liens, encumbrances, interests, etc., and the insurance guarantees such. This is so the title can be legally transferred to the buyer to be used as security for the lender’s funds. This is why Title Insurance is required by the lender. Your lender has an interest in knowing that you and the lender are the only parties with claims to the property.

The title insurance company thoroughly searches the public records to uncover any unpaid taxes, mortgages, judgments against previous owners, easements and other court actions or recorded documents which can affect title to the real estate. The insurance also provides protection against any defect in the public record such as forgery, similar names, error in the records, etc., and protest against any undiscovered or unrecorded claims that may arise in the future.

When Title Insurance is issued the title insurance company accepts the responsibility for any and all claims on the property prior to your purchase if they do not find the claim or call it to your attention prior to your purchase of the property. That responsibility includes defending your title in court if necessary (at their expense) or bearing the cost of settling the claim (if it proves valid) in order to perfect your title and keep you in possession of your property.

Unlike other forms of insurance, the original premium is your only cost as long as you or your heirs own the property. There are no annual payments required to keep your Owners Title Insurance Policy in force.

Title Insurance protects you twice - it notifies you of claims against the property and insures you against any future claims on hidden items.

Why Title Insurance is so important!

To understand why a title search is so important you must understand the nature of real estate. Real estate has always been considered man’s most valuable possession. It is so basic a form of wealth that many special laws have been enacted to protect ownership of land and the buildings which stand on the land. The owner who is selling the property has extremely strong rights, as do his family and heirs. Also, there may be others who have “rights” in the property you are going to buy. These may be governmental bodies, contractors, or any other individuals who have perfectly proper unpaid claims against the property. Unscrupulous owners may have gotten a second mortgage on the home prior to closing.

Anyone who has such a claim in the property you are buying is, in a sense, a part-owner. The property may be sold to you without the party having the claim knowing about the sale. Without a title check conducted by the title insurance company you would know nothing about such claims at the time you buy. All such claims remain attached to the real estate you are purchasing and not to the previous owners. The title company will notify you of all liens, encumbrances, and interest in the property so that these can be resolved by the current owners prior to the sale. Proof of a “good” title, a title free of any liens, encumbrances or interests, is important because otherwise you are liable for the claims.

Title insurance policies are standard. Owner’s policies usually do not cover one or more of the following matters (often referred to as “Standard Exceptions”), unless an additional premium is paid and/or extra investigative work or a survey is done and the necessary evidence is furnished to the title company. When the evidence is furnished and the insurance coverage is given, this is frequently referred to as “Extended Coverage.” The Standard Exemptions are:

¨ Claims of people who turn out to be living in the house (such as prior owner’s tenants or someone living without your knowledge in your cabin) if their presence there isn’t a matter of public record;

¨ Boundary line disputes;

¨ Easements or claims of easements not shown by public records;

¨ Unrecorded mechanic’s liens (claims against the property by unpaid home improvement contractors);

¨ Taxes or special assessments left off the public record.

Other important exclusions from coverage include zoning, environmental protection laws, matters arising after the effective date of the policy, and matters created, suffered or assumed by the insured.

Tuesday, June 30, 2009

Does it matter what day I close?

Because you will pay interest, taxes and insurance from the day you close, you would probably prefer a closing that dovetails with your present lease or mortgage so that you won't pay expenses on two different places for part or all of a month. On the other hand, you may want a few days with the new house vacant, for painting or other projects.

If you're placing a new mortgage, you'll be asked to prepay interest for the rest of the present month, to bring you up to the lender's usual "first of the month" bookkeeping. That means if you close early in the month, you'll need that much more cash. It isn't really an extra cost, of course, because you'll own the property from that day on. Still, between that and the rent you're paying, you might prefer to buy toward the end of the month.

You won't, by the way, need to make any mortgage payment on the first of the next month because mortgage interest is normally paid in arrears (the opposite of in advance). Close in June, prepay interest up to June 30th, and you won't owe any July payment because that would have been for use of the money during the month of June, and you paid that at closing. Your first payment will be due in August and will cover July's interest.

Sunday, June 28, 2009

This Month In Real Estate

This Month In Real Estate (US): June 2009
CLICK HERE to watch the youtube clip!

Each month, This Month in Real Estate provides expert opinion and analysis on real estate trends across the nation. The aim of the consumer-oriented segments is to provide real information on real estate.

Thursday, June 25, 2009

What Is A Point?

What is a point?
A point is equal to 1% of the amount of the loan.

Why do lenders charge points?
Whenever governmental regulation, state usury laws and/or competitive practices prohibit the lender from charging a rate of interest which would make the real estate loan competitive with other fields of investments, the lender must seek some method of increasing the yield for the investors. By charging “points” the lender can bring the real estate loan up to those other investments.

Are points called anything else?
Yes, they are sometimes called the Loan Origination Fee, Commitment Fee, Discount Fee, Warehousing Fee, and Funding Fee.

Who pays the points?
FHA: The buyer is usually charged with the Loan Origination Fee. The Discount Fee can be paid by the buyer or the seller or can be split between both.

VA: The same as for FHA.

Conventional: Points can be paid by the buyer, seller, or split between the two. State it specifically in the contract!

Do the number of points charged fluctuate?
Yes. If rates on mortgage loans are lower than other investments then funds will be drawn away from the mortgage market. Also, when there is a heavy demand upon the money market because of business needs, military requirements or other government borrowing, the result is that money for home mortgages becomes scarce and therefore, more expensive. When this occurs, more points can be charged. Points balance the market. Points are not set by government regulation but are set by each lender individually.

Are points tax deductible?
Points on a home mortgage (for the purchase of, and secured by, the taxpayer’s principal residence) are deductible currently if points are generally charged in the geographical area where the loan is made and to the extent of the number of points generally charged in that area for a home loan. If you are in doubt about points being deductible you should contact your tax accountant

Tuesday, June 23, 2009

Predicting Your Monthly Payment (The PITI)

Your monthly payment (PITI) is the sum of four items - the principal on the loan (P), the interest on the loan (I), property taxes (T), and homeowner’s insurance (I). To predict your monthly payment for a 30-year fixed rate loan, use the following table to determine the principal and interest part of the payment. Simply divide the loan amount by 1,000 and then multiply that figure by the appropriate interest rate factor from the table below. To that sum, add 1/12th of the amount of your yearly taxes and 1/12th the amount of your yearly insurance premium; this will give you your PITI payment.

For example: If your mortgage loan amount was $150,000 your monthly PITI would be:

$150,000 divided by 1,000 equals 150. If your interest rate is 12% you would multiply 150 by 10.29, resulting in a value of $1,542.50. Add your monthly insurance premium (approximately $25-$75 per month) and your property tax to your principal and interest and this is your monthly payment.

All property owners must pay general real estate taxes. These taxes are also called “ad valorem” taxes because the amount of the tax varies, according to the value of your property. General real estate is levied for the operation of various governmental agencies and municipalities. Other taxing bodies may include school districts, drainage, water, sanitary and recreation districts.

Each agency or municipality determines how much money is needed for the budget. They receive these funds through mills levied against properties in their counties. The state limits how much the mill levy can increase each year without voter approval. Each mill is equal to one-thousandth of one dollar ($.001) of assessed value or $1 for every $1,000 of assessed value.

The actual tax is calculated by multiplying the assessed value by the current mill levy. General taxes are a lien against your home as of January 1st, the year of the tax, even though in Indiana they are not due until the following year.

Properties are valued or assessed by the county assessor. The land and buildings are usually assessed separately. The assessed value is approximately 12-15% of the true value (percentage value is determined by state law.) If an owner feels the assessed value of their property is incorrect, they can present their objection through the local taxing authority on an annual basis.

Wednesday, June 17, 2009

Step-By-Step Loan Process

The first step — find a lender you can trust

In the home buying process you need to find an experienced lender at the same time as you begin to work with your REALTOR®. You begin the mortgage process at the same time as you begin looking so you know the value of the home you can qualify to purchase. Roger can recommend a trusted, qualified lender.

The next step — processing your loan application

The lender begins processing your loan application, ordering credit reports, and performing verifications. This is the pre-qualification phase. Therefore, when you go looking for your dream home, you know how much you can spend for it!

Final lender pre-qualification — the search is on!

When you have final lender pre-qualification you can seriously concentrate on finding a home that you know you qualify to purchase immediately.

Under contract — title work begins

Now that you have a home under contract the lender processes the necessary paperwork. In the meantime, the title company begins the searches and processing the title work.

Underwriting — final approval

When your application is completed and verified, the file goes to the Underwriting Department for final approval!

Getting the keys to your kingdom — Now it is yours!!

With the loan process completed, you are ready to go to your closing and secure the keys to your new home. Your next steps will be over the threshold of your new home!

Monday, June 15, 2009

Understanding What Debts Count Against Me

Lenders give consideration to present debts, or liabilities. Depending on the type of loan for which you apply, a lender will count any debt on which you must pay for more than 6 months. Car loans are among the most common liabilities in this category.

Before you arrive for mortgage application, list your liabilities, including loan numbers, monthly payments, balances and time left to run. Student loans are considered obligations if payments are presently due. Child support or alimony is considered an obligation.

Watch out for credit cards. Some lenders, for certain mortgage plans, may consider that you are liable for the potential full borrowing power on each of them. That can be true even if you carry no balances.

Your assets, debts and income allow the lender to judge whether you can make the proposed mortgage payments. The final question is : are you not only able but willing to meet your obligations? That's where your credit history comes in.

It is essential to divulge information about past credit problems frankly during your interview. You should have already discussed judgments or bankruptcies with the real estate agent during your first meeting. Such problems won't necessarily prevent you from obtaining a mortgage, but if the lender's checking turns up any lies, you're in trouble.

If you've never borrowed money, don't worry. An old wives' tale says you must take out a loan and repay it to establish credit. Lenders know, though, that you've been around long enough to get into trouble if you were going to. No credit history is considered good credit.

Saturday, June 13, 2009

Loan Application Checklist

□ Picture ID with social security number of borrower and co-borrowers
□ Payment to cover the application fee
□ Name and complete address of all landlords for the past two years

□ Employment history for the past two years including names, addresses, phone numbers, and length of time with the company
□ Copies of your most recent pay stubs and W-2 forms (past two years)
□ Verification of other income (social security, child support, retirement)
□ If self-employed you need copies of the past two years signed tax returns including all schedules, and a signed profit and loss statement of the current year. Retirees need tax returns for the past two years
□ If you have rental property income bring a copy of all lease agreements

□ Copies of all bank and credit union statements for the past three months
□ Copies of all stock/bond certificates and/or the past three statements from all investment and retirement accounts
□ Prepare a list of household items and their values
□ Copies of title documents for all automobiles, boats, motorcycles, etc
□ Face amount, monthly premiums and cash values of all life insurance policies. (Cash value may be used for closing costs or down payments. You need documentation from the carrier indicating cash value.)

□ Credit cards (account numbers, current balances, monthly payments)
□ Installment loans (car, student, etc.) Same details as for credit cards
□ Mortgage loans (property address, lender with address, account numbers, monthly payment and balance owed on all properties presently owned or sold within the last two years.) Bring proof of sale of property sold
□ Child care expense/support (name, address, phone number.)

□ Bankruptcy - Bring discharge and schedule of creditors
□ Adverse credit - Bring letters of explanation
□ Divorce - Bring Divorce Decrees, property settlements, quit claim deeds, modifications, etc., for all divorces by yourself or your spouse
□ VA only - Bring Form DD214 and Certificate of Eligibility
□ Retirees - Bring retirement and/or Social Security Award Letter

Friday, June 12, 2009

How Much Home Can You Afford?

When you are ready to begin looking at various houses to find your dream home you need to prepare all of the necessary materials to present to the lender. Your lender will tell you exactly what you can afford so that you do not spend time looking at “too much” home. There are three key factors that you will need to consider when determining how much home you can afford. These are the down payment, your ability to qualify for a mortgage, and the closing costs associated with your transaction.

Down Payment Requirements:

Most loans today require a down payment of between 3.5% and 5% depending on the type and terms of the loan. If you are able to come up with a 20% down payment you may be eligible to take advantage of special fast-track programs and possibly eliminate mortgage insurance.

It is often thought that bigger is better when it comes to down payments. In many cases this may be true. However, the arithmetic will differ from case to case. A bigger down payment means smaller monthly payments, and lower interest expense for as long as you remain with a mortgage. This can be an important factor for many people.

But if you can put your available funds to work for you, so that they can earn more than the interest rate on your loan, you could be dollars ahead with a smaller down payment. Also, a smaller down payment may allow you to keep your extra cash liquid and available for an emergency.

Closing Costs:

Don’t forget to think ahead carefully. In addition to the down payment on your dream home, you will be required to pay fees for loan processing and other closing costs. These fees must be paid in cash at the time of the final settlement, unless you are able to include these in your financing. Typically, total closing costs will range between 1-2% of your mortgage loan. A more detailed schedule will be available from your lender.

Qualifying for the Mortgage:

Most lenders require that your monthly payment ranges between 25-28% of your gross monthly income. Your mortgage payment to the lender includes four items -- the PITI. These items are discussed in detail on a following page entitled “Predicting your monthly payment -- the PITI.” Remember, when you buy a home all interest is tax deductible so you will qualify for a major tax advantage that will effectively increase your take-home pay. Your total monthly PITI and all debts (from installments to revolving charge accounts) should range between 33-38% of your gross monthly income. This is a general rule of thumb, but other key factors specifically determine your ability to qualify for a home loan. These factors are:

History of employment, stability of income, potential for future earnings, education, vocational training and background, and any secondary income such as bonuses, commissions, child support, etc.

Credit Report:
History of debt repayment, total outstanding debt and total available credit. If you have concerns about your credit record consider contacting one of the major credit bureaus for a copy of your file: Equifax (800) 685-1111; TRW (800) 392-1122; and Trans Union (312) 408-1050.

Cash on hand, other liquid assets such as savings, checking, CDs, stocks, etc.

The home you are buying must be appraised to determine that it has adequate value and is marketable to ensure it will secure the loan.

Thursday, June 11, 2009

Glossary of Real Estate Brokerage Relationships

In Indiana, real estate brokers and their salespersons are required to disclose the type of working relationship they have with the buyers and sellers in a real estate transaction. There are several types of relationships that are available to you. You should understand these at the time a broker provides specific assistance to you in buying real estate. Buyer’s Agent and Seller’s Agent relationships are commonly referred to as “agency” relationships and carry with them legal duties and responsibilities for the broker as well as for the buyer and seller. A buyer is advised to consult legal counsel before entering into any agency relationship.

Buyer’s Agent

A Buyer’s Agent acts solely on behalf of the buyer and owes duties to the buyer which include the utmost good faith, loyalty, and fidelity. The agent will negotiate on behalf of and act as an advocate for the buyer. The buyer is legally responsible for the actions of the agent when that agent is acting within the scope of the agency. The agent must disclose to sellers all adverse material facts concerning the buyer’s financial ability to perform the terms of the transaction and whether the buyer intends to occupy the property. A separate written buyer’s agreement is required which sets forth the duties and obligations of the parties.

Seller’s Agent

A Seller’s Agent acts solely on behalf of the seller and owes duties to the seller which include the utmost good faith, loyalty, and fidelity. The agent will negotiate on behalf of and act as an advocate for the seller. The seller is legally responsible for the actions of the agent when that agent is acting within the scope of the agency. The agent must disclose to buyers or tenants all adverse material facts about the property known by the agent. A separate written listing agreement is required which sets forth the duties and obligations of the parties.

Limited Agent

A Limited Agent assists the buyer and seller throughout a real estate transaction with communication, contracting and closing without disclosing any of the following to either of the parties:

· Any material or confidential information, except adverse material facts or risks actually known by the agent concerning the physical condition of the property and facts required by statute, rule, or regulation to be disclosed and that could not be discovered by a reasonable and timely inspection of the property.
· That a Buyer will pay more than the offered purchase price for the property.
· That a Seller will accept less than the listed price for the property.
· Other terms that would create a contractual advantage for one party over another.
· What motivates a party to buy or sell the property.

Wednesday, June 10, 2009

The story of “Roger’s my REALTOR®!!”

It all started with Legos®, a piece of cardboard, and my wild creativity! I have wonderful memories of building Lego® houses and real estate offices...developing ‘lots’ on my cardboard neighborhood...and driving clients around in Matchbox® cars to look at houses. Since childhood, all I have ever wanted to do is sell real estate. In 1990, I was hired by Graves REALTORS® because of that story! I was the first person the management team had ever heard say: “Selling real estate is all I have ever wanted to do.”

In preparation for my career, I left home in Central Florida to attend Anderson University in Anderson, IN. While working towards my Management/Marketing degree, I participated in Study Abroad programs throughout Europe, Central America, and the Carribean. My favorite courses were Publicity and Public Relations which gave me a strong foundation for marketing homes. While at AU, I was introduced to Indianapolis and chose not to return to Florida, but create my home in Indianapolis, “the biggest small town in America.”

I have been blessed with a thriving business which has continued to grow. My interest in Internet Marketing and using technology to help make the moving process easier for my clients has brought national recognition for our efforts. Most importantly, it has earned us the respect and trust of our clients and their continued referrals.

This growth has led to the development of a Team that I am very proud of and enjoy working with every day. As a Team, we are better prepared to handle all of the details of your move as they agent working alone just can’t keep up with all of the things that make your move a success.

I invite you to read on and learn more and to find out why so many of your neighbors are saying,

“Roger’s my REALTOR®!!”