This makes sense, doesn’t it?  Isn’t this what you’re told to do?  Absolutely but it’s absolutely wrong.

The strongest emotion is fear.  When it comes buying a home, fear is the #1 reason buyers make tragic mistakes.  The young man who wanted my listing could not afford it.  He had no idea about the true cost of a mortgage loan and no idea about closing costs.  How could this happen?  He spoke to 5 different banks and shopped through the web.

It’s very simple - his fear of commitment allowed him to be used by mortgage loan salespeople.  They did what he demanded instead of what was right hoping to “build rapport” to secure the loan when he found a house.  He is now upset because he can’t afford a home he loves.

In the early 80′s marketing folks came up with a neat idea:  Let’s redefine a pre qualification as a pre approval.  Buyers love this – they get a meaningless piece of paper to go along with their offer and have total control.  Well, that’s great.  You have total control of nothing when you’re jumping off a cliff.

I blame the buyer, the bank and his agent.  I’ve never had a buyer disappointed like this.  I teach my customers how to buy a home the right way and insist that they speak to my banker, Emi Kalici of Weichert Financial.  Why?  Because Emi has the right model of taxes and home insurance so the monthly payment amount is real.  You can’t get that from walking into a bank branch or going online.

Don’t allow yourself to be sucked into a feel good no commitment approach – don’t allow your fear to put you in a precarious position.  Buy a home the right way so your home buying experience is fun, rewarding and successful giving you many happy years in a home you can definitely afford.

Town websites give you a special look into the character and services of a community.  Although not all towns have a website, most do and they are filled with information and community news.

Are you shopping for a Tenafly home?  The Tenafly Borough site has the Tenafly Memorial Day Parade schedule telling you that everyone is invited to the Tenafly Elk’s Club for refreshments after the ceremony. 

Looking for a Ridgewood home?  If you go to the Village of Ridgewood website you’ll learn that the Ridgewood flood rating is unchanged which gives it’s residents a 15% discount on insurance. 

Looking for an Englewood home?  The City of Englewood website tells you that all Englewood residents are eligible for a 20% discount card for prescriptions.  

If you’re thinking of buying a home in Cresskill the Cresskill Borough website announces that the town is having it’s Spring Festival on June 11th.

I have all the town websites for you on my site.  Click Here and choose the town you want!

Since then, getting a bank to loan on new construction in Bergen County has been difficult if not impossible.  But there has been one bank that’s kept its new construction loan department open – TD Bank.  In addition to TD Bank, Wells Fargo and Provident Bank of New Jersey also do new home financing.

I called TD Bank this week to review financing for a new 3 lot subdivision in Ho-Ho-Kus that I’m working on with Beverly Mitchell in my office; the interest rate quoted was very attractive – only just over prevailing mortgage rates with no points.

Each Ho-Ho-Kus lot is around 1 acre and we have packages for buyers at $1.5-1.7 million with architect plans for gorgeous 5,800 sq ft houses and a master builder in place.

If you drive up the Tenafly East Hill, you’ll be amazed at all the new houses being built there.  Tenafly has always enjoyed a strong demand for luxury new construction on it’s East Hill acre lots.  Buying a new Tenafly home is no problem for qualified buyers today.

Whether you’re building a new home in Tenafly, Ho-Ho-Kus or anywhere in Bergen County, you can get a mortgage as long as you’re qualified.

Leonia homes are always in strong demand.  Why?  Leonia has a simply fabulous commute to NYC via express bus service from NJ Transit  and Coach USA whose commuter buses typically take it’s residents to Manhattan in less than 50 minutes.  Leonia also has a strong school district and great community spirit.   Leonia homes are mostly older, gracious colonials for which it is renown.

Recently I sold a Leonia home to a young couple buying their first house.  Marketed as well kept and updated with a beautiful young kitchen and shining hardwood floors, it really is a very pretty home plus the location was perfect – a quiet street only one block from the NJ Transit #166 bus for a perfect commute.  Everything looked great until the home inspection.

I have been a full time professional residential agent for over 20 years so you can imagine that I’ve sold hundreds of homes but no real estate agent is a home inspector.  When the home inspector got to the attic, he found that the roof substructure had separated a bit.  Doesn’t sound like much does it?  Guess what - it’s huge.  I contacted a local contractor who advised we needed an architect.  When they came a few days later, the home inspector’s findings were confirmed; fixing it will cost $6,500.

Getting a good home inspection is the best money any buyer can spend.  My buyers were also fully protected by their superb attorney who got them the extra weeks I needed to get the right contractor to look at the house.  Using excellent professionals - home inspector, contractor and attorney – gave my buyers the protection and information they needed to avoid making a home buying mistake.

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This is when most people focus on finding a home inspector.  And for most people they find a home inspector in a matter of minutes which really doesn’t make a lot of sense.

Consider this:  Didn’t you spend a lot of time doing research on the market and looking at a variety of locations?   Let’s say the home you picked is in Bergenfield.  Didn’t you also spend time looking at homes in Englewood, Teaneck, Dumont, Bogota and perhaps further out in Bergen County like Fair Lawn and Waldwick where pricing is similar?  

Amazingly enough, most people spend hardly any time at all in finding their home inspector.  Just a few minutes on the web and that’s it.  I tell my buyers to get ready early on.  Don’t wait until you’ve found your house to find the right professionals you need and that includes a home inspector.

The State of New Jersey licenses home inspectors.  If someone gives you a recommendation, you can go to the State of NJ Divison of Consumer Affairs to verify that the person recommended is licensed.  A great resource is the American Society of Home Inspectors and HUD has it’s own top 10 list of questions to ask the inspectors you investigate.  Another idea is to consult with your attorney and, of course, your real estate agent can suggest home inspectors too.

When you buy a house the home inspection is one of the major parts of the home buying process.  Spend the time to do the research you need to get the right home inspector for you.

Now what on earth is that? you might ask.  Each town is divided into blocks on each block are lots.  The property the house is on has an address of it’s own by block and lot.  For example, if your home is on 20 Maple Street, it has a specific block and lot number.  Let’s say you’re on the north side of Maple Street and that’s Block 1403 and on Block 1403 there are 12 lots and 20 Maple is lot 9.  The property identification by Block and Lot would be Block 1403, Lot 9.

The New Jersey MLS has tax maps for all towns in Bergen County and also many other counties as well.  Tax maps display property dimensions of the lot and can also reveal some other very important items such as easements, streams or irregular lot lines that may not be disclosed in the listing.  Before you make any offer at all, your agent needs to check the NJMLS Tax Assessor Map to see what, if anything, is there.  Below is an example of a Right of Way.  It’s actually on Lot 9 and you can also see that the property lines on Lot 9 are very irregular too. 

It’s entirely up to you whether or not an easement, irregular property line, right of ways, etc. is acceptable but what’s not acceptable is not having the information at hand.  The NJMLS helps by having the Tax Assessor Map available – when shopping for a home, make good use of it.

On October 4th the FHA announced new credit requirements for mortgages which raised the bar for home buyers.  To get a 3.5% down payment loan, a buyer now needs at least a 580 credit score.  For home buyers with FICO scores of 500-579, down payments must be at least 10% and if your credit score is under 500 you’re out of luck – you won’t get a FHA loan.

At the same time, the up front mortgage insurance premium was reduced from 2.25% to 1% and the limit on annual premium increases was raised from .55% to 1.55%

Some people criticized the FHA for making it tougher to get a loan in Steve Bergsman’s excellent article on these changes, he quotes an expert as saying that while only 2% of all FHA borrowers have FICO scores under 580, 27% of them default.  Ouch!

What should be criticized, in my view,  are the wide FHA mortgage ratios allowed.  How about allowing up to 55% of your gross income to qualify for a FHA mortgage?  I think that’s a disaster in the making.  Do you think spending close to 75% of your take home pay on your mortgage makes sense?

Emi Kalici, the Weichert Gold Services Manager in my Tenafly office, said that Weichert Financial Services as a licensed FHA underwriter can be more relaxed with FICO scores for qualified Weichert buyers.  This sounds a whole lot beter for financially able people than widening their ratios recklessly.

The attorney or real estate agent who did a great job for you when you purchased your home are not necessarily the best choices if you are upside down in your house and need to do a short sale.  Skills needed for short sales are very different.

Short sales are arduous transactions requiring a tremendous amount of work and/or patience on the part of everyone involved.  The individual who negotiates with the bank is the person who achieves or loses the opportunity get the home sold.  It really is as basic as that.

If you are buying a home that’s a short sale, you also need a professional in short sale transactions.  There are special protections you must have that don’t exist in conventional transactions.

Sometimes a short sale is not the best idea for you whether you’re a buyer or a seller.  Without an expert’s advice, how can you analyze what’s best for you?  I have done several short sales successfully.  What I can tell you is that without the help of short sale professionals, I could not have achieved the success I did.  If you need the name of a short sale professional, just let me know.

What is a line of credit?  A line of credit (aka credit line) is when a bank grants an unsecured loan amount.  Unlike a regular loan, interest is only charged on how much of the credit line you use.  For example, a department store credit card has a limit of $500.  That’s your line of credit.  You spend $50 which leaves $450 left on your line of credit to use.  When the bill comes, if you pay it off in full, there’s no interest charged.  If you don’t pay it in full, the amount you owe incurs a credit charge. 

Harry Vanezis, Vice President and Senior Loan Officer at Bank of America, said that for mortgage loans, banks consider a car loan/lease and rent/mortgage payments as lines of credit too.  Harry advises that you get a bank and department store card.  “Charge your gas every other month on the bank card and use the other for gift purchases but pay off the bill in full when it arrives so you don’t incur interest expenses” said Harry.  “If you do this and pay your other bills in full and on time, you’ll have an excellent credit history.”  While 4 lines of credit are best, 3 will work if your other credentials are strong.

Amazing as it is, paying cash for everything makes getting a mortgage difficult because you have no verifiable record of good financial behavior.  Prudent and regular use of lines of credit creates an excellent credit history.