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Rent vs Buy Breakeven Horizon

by Preservation Properties

Are you a first time home buyer?

Or, perhaps just unsure about what to do at this point in your life: continue to rent or take the leap and purchase a home?

Here's some helpful information reflecting the 'break even horizon' when it comes to renting vs buying.

In other words, learn how many years it will take before owning a home becomes more financially advantageous than renting the same home.

This article takes into consideration some very important factors that should help determine your decisions:

  1. Time horizon
  2. Future prices and rents..financial trends
  3. Tax deductibility 
  4. Maintenance costs
  5. Transaction costs

Learn how to compare 'apples to apples' not 'apples to oranges' so that you make the financial decisions that are truly in your best interest here.

For a quick summary on the subject, this version is simpler.

Whichever route is best for you...buying or renting...we're here to help every step of the way!

Newton Losing Some Public Transportation?

by Preservation Properties

 

MBTA Proposing to Eliminate Several Newton Bus Routes.

The routes include bus 52 (Centre St.to Parker to Dedham); bus 170 (Waltham to W. Newton to Boston) and express buses 500, 554, and 555.  All Newton bus routes are under consideration for reduction or elimination.  These changes would put more cars on our roads, increasing traffic congestion, air pollution, and noise (road traffic is the most important single source of noise in urban environments).
 
Green Decade/Newton believes good public transit system is crucial to the livability of our villages and vital to the economic, social and environmental health of our region.  We urge the MBTA to look for other alternatives that will encourage and strengthen public transit.
 
You have until March 1 to tell the MBTA what you think by e-mail to fareproposal@mbta.com; by regular mail to MBTA attn:  Fare Proposal Com., 10 Park Plaza, Boston, MA 02116; by phone 617-222-3200/TTY 617-222-5146.

 

This article comes from Green Decade Newton

What Should I Fix On My Credit Report?

by Jessica Hunt with Preservation Properties

In a recent study, 19 percent of American consumers who reported finding an error in their credit reports opted not to dispute the error, even when they were offered $5 to file the dispute!  Why not?  Well, some said they thought the error was too minor to impact their score, while others said the dispute process seemed too difficult to tackle.

The fact is, when you’re trying to qualify for a home loan, some of the items on your credit report that can pose a threat to your home finance plans might surprise you. Here are 5 surprising credit report entries you absolutely must fix, especially when you are in the process of buying or refinancing a home.

1.     Account balances you recently paid down or off. If you’ve just finished paying a bill down or off, you might not dispute the elevated balance that remains on your credit report because it’s not actually an error, per se.  But the whole point of paying the balance down was to bring down your credit utilization ratio, which is a heavily weighted factor in your overall credit score. 

Correcting the actual balances of your outstanding bills downward to account for your recent pay-down efforts poses such a large potential improvement impact for your credit score that it might even be worth paying your mortgage professional the $30 to $50 it will cost for them to initiate a Rapid Rescore, which can update your reports to reflect your slimmed-down balances in about 72 hours, compared with the 30 to 60 days you’d expect to wait to see results from a traditional dispute or update.

 

2.     Incorrect former addresses. Of the 19 percent of consumers who spotted an error on their report in the study, nearly 40 percent of those errors were in what the credit bureaus call “header data," things like the consumer's previous street address. Many elected not to dispute these sorts of line items because the error doesn't seem like it would impact their credit score.  While an inaccurate address might not have much to do with your score, it can still wave a red flag, signaling issues that can foul-up your mortgage application.

A misspelling in an otherwise correct street name should not cause you grave concern.  But if the previous addresses listed are in the wrong city or state, or otherwise come out of nowhere, they might signal that someone has used your name and/or social security number to obtain credit at a different address.  Credit card fraud and identity theft are difficult to unravel when you’re not seeking credit; they are much more complicated to resolve when the credit stakes are high and the underwriter as picky as they are in the course of applying for a mortgage.  

Also, current and previous addresses that conflict with where you’ve told the lender you live(d) can raise suspicion that you might be buying a second or rental home, rather than the owner-occupied home you say you’re trying to buy; that can provoke a lender to demand that you ante up more down payment dough, make you jump through greater hoops to prove your true address or even stop you from qualifying for the loan altogether.

3.     Bills that were never yours in the first place. As with completely bizarre former addresses, accounts listed on your credit report that you never opened in the first place can be a red flag that tips you to the fact that someone else might have stolen your identity and opened a credit card or account in your name.  If you find one of these items on one credit bureau report, but it’s currently closed or has a zero balance, you might be tempted to let it slide, thinking it can’t move the needle on your credit score.  In reality, though, if someone is using your identity to obtain credit and you fail to dispute that the bills belong to you, they might continue to use it, which can cause you real problems.  Of course, if the bills weren’t paid on time or have been placed in collection, disputing the accounts’ presence on your credit report is a must.

If they were paid on time every time, though, the analysis might be different.  Unfortunately, instituting a fraud-based credit freeze or fraud alert on your credit reports at the same time as you’re applying for a mortgage can complicate your own loan qualification process significantly.  If you find yourself in this situation, carefully scrutinize the rest of your report and the credit reports you receive from the other bureaus to detect whether other fraudulent accounts exist, then consult with your mortgage professional on exactly when and how you should go about disputing the accounts which weren’t actually yours.

4.     Limits listed as lower than they really are. As with closed accounts that were never yours in the first place, accounts that are listed on your credit report as having limits that are lower than they really are might seem like a battle not worth fighting.  But the fact is that only two inputs go into the credit utilization ratio that comprises about 30 percent of your FICO score: how much credit you have available, and how much credit you have used.  So, if you have account balances that show up on your credit reports as lower than they actually are (i.e., that you have less credit available to use), that inaccuracy can skew your credit score and screw up your mortgage qualifying efforts. Big time.

5.    Derogatory items that should have aged off. Very few of us are perfect, and you might have worked hard to pay your bills on time in an effort to overcome a credit ding from back in the days.  Although the impact a derogatory item has on your credit score wanes over time, it’s still your right (and your responsibility) to make sure negative items disappear from your credit report when they are supposed to – that’s 7 years for a late payment, 10 years for a bankruptcy.  If you are still seeing credit dings on your report after more than the relevant time frame has elapsed, dispute them and claim the rehabbed credit (and score) you’ve since earned.

It’s not very common that credit report disputes cause dramatic changes in credit score, but again, many borrowers aren’t disputing these sorts of items they don’t realize could make a difference in their homebuying or refinancing prospect. 

Beyond that, if you’re close to a credit tier cutoff, like 620-640 or 740-760, depending on your loan type, even a few points’ difference can be the difference in qualifying for a home or not, or paying a higher mortgage interest rate for the life of your loan.  For these reasons, it behooves every potential borrower to be proactive in spotting and correcting these 5 must-dispute errors.

Draft Bill May Hike FHA Down Payments To 5%

by Jessica Hunt with Preservation Properties

Republicans on the House Financial Services Committee have drafted legislation that would raise the minimum down payment for FHA mortgages to 5 percent, cut FHA loan limits in most markets, and move the Agriculture Department's rural housing program to FHA's parent agency, HUD.

 


  

Though the draft bill has not been introduced, titled or assigned a number, it is expected to be the main subject of a hearing Wednesday before the Subcommittee on Insurance, Housing and Community Opportunity, chaired by Rep. Judy Biggert, R-Ill. After that, the bill is likely to be formally introduced and sped through subcommittee and committee votes and head for action by the full House.

  

By lowering maximum FHA loan limits in large numbers of local areas - well below even the limits that are already scheduled to kick in Oct. 1 - the bill would squeeze down FHA loan volume across the country, cutting a resource for some home purchasers who can't obtain a conventional mortgage. Most New England and mid-Atlantic states would end up with lower loan ceilings along with major markets in the Midwest and the Rocky Mountain states.

 

To read the full article from Inman News, click here

Water Legacy Greywater Recycling

by Jessica Hunt with Preservation Properties

 

google map to real pro systems

For most of us, setting up a grey water system— that is, setting up a system to recycle waste water that's only slightly contaminated to use for flushing a toilet or watering plants—is too complicated. Water Legacy aims to change that by bringing a mainstream grey-water recycling system into the home.

 

Water Legacy's residential graywater reclamation system conserves potable water by recycling spent water for safe usable purposes. Wastewater generated by homes is usually either black water, contaminated to levels that prohibit use, or graywater which can be treated and stored for non-potable reuse.


Water Legacy's system is a stand-alone system that collects used bathing greywater, filters and disinfects this water, and managgoogle map to real pro systemses the automatic supply to the toilet system. After it's installed, it requires no operator intervention.

Unlike the DIY solutions, Water Legacy uses a multi-barrier disinfection system to ensure that even the water in your toilet has been disinfected using hydrogen peroxide and UV. Unfortunately, this only supplies water to your toilet and is not designed to help you water your lawn or plants.

 

Make your yard a Certified Wildlife Habitat

by Jessica Hunt with Preservation Properties

 

When writing recently on native and drought-tolerant plants for California landscaping, I came across this little tidbit: The National Wildlife Federation (NWF) has a program, “that helps members turn their backyards into wildlife havens.” How spectacular!Bird

Being a national organization, this program applies all over the country, not just to California. And you can certify your garden to be one of 140,000 Certified Wildlife Habitats across the U.S.!

The cost is minimal ($20 dollars and is what you’d pay for a good plant, so consider it part of the landscaping budget), and you get certified. You also become a member of the NWF with a year subscription to its award-winning National Wildlife magazine, plus a subscription to the quarterly tip-filled newsletter which will help you run and maintain your habitat, and your name will be listed in the NWF national registry of certified habitats.

The best part is that it’s not as difficult as it might sound to get your yard up to snuff. You need some basic amenities for the critters that most yards probably already have to one degree or another, stated as per NFW’s site:

  • Food sources like native plants
  • Water sources like birdbaths or fountains
  • Places to take cover like birdhouses or thickets
  • Places to raise young like dense vegetation or shrubs or nesting boxes
  • Sustainable gardening like chemical-free fertilizers and compost

This program can be instigated just about anywhere: on your college campus, at your child’s school, or in any other community garden area. Check out The National Wildlife Federation’s website for details and more information on how easy it is to turn your outdoor space into a wildlife habitat!

--Jocelyn Broyles

Headline image by Howard Cheek from TheNationalWildlifeFederation.org

All information from National Wildlife Federation’s Certified Wildlife Habitat™ program.'


This article comes from Yahoo Green

Getting Married? A Way To Put Your Gifts To Work

by Jessica Hunt with Preservation Properties

 

Now that Spring time is approaching, you will hear about more and more people getting engaged.  I am one of those people who just recently got engaged and as I slowly plan the wedding, we have been thinking about different gift ideas and registries.  You are probably wondering when this article is going to start discussing houses or being green- I promise I will get there!

google map to real pro systemsSo, if you are going to be a newlywed who wants to then buy a house, you can tell all of your guests that you would like a gift of money.  Now, normally the FHA (Federal Housing Administration) has problems with gift money where it can't trace where the money came from... BUT you can now go to your bank and ask for a Gift Escrow account.  You then can give your wedding guests directions on how to give money through this escrow account.  Your guests can help you get into your new home and you don't have to worry about tracing where the money came from when it comes down to having your downpayment.

Plus, this is a green alternative, you don't have to worry about people using wrapping paper or never using that 4th toaster that you were given as a gift.  Nothing goes to waste.

 

5 Things Home Buyers Do That Turn Sellers Off (and Kill Deals)

by Jessica Hunt with Preservation Properties

On today’s market, every savvy seller wants to know what turns buyers off, so they can get their homes sold as quickly as possible, for as much as possible.  But buyers, take note – there is a minefield of seller turn-offs you can trigger that hold the potential to keep you from getting the home you want at the best price and terms, or to unnecessarily complicate dealings with your home’s seller.

Lest you think all of today’s sellers are under the gun and will just put up with whatever behavior buyers dish out, be aware that there are still many multiple offer situations in which buyers have to compete with each other to get a home – buyers who trigger these turnoffs tend to lose in those scenarios.  Also, avoiding these seller turnoffs can create a transactional environment of cooperation and avoid things turning adversarial.  That, in turn, can empower you to score a better price, get extra items you want thrown into the deal, and even negotiate more flexibility around your escrow and move-in timelines – all perks that can make your life easier and your budget go further.

For sellers, these turnoffs pose the potential of irritating you out of an otherwise good deal – maybe even the only deal you have!

Here’s a few of the most common buyer-perpetuated seller turnoffs, with tips for sellers on how to keep an emotional (and economic) even keel, even if your home’s buyer makes some of these waves:

1. Trash-talking. Trash-talkers are the home buyers who think they’re going to negotiate the list price down by slamming the house, telling the sellers how little it is really worth, how the house across the street sold for nothing, why the school on the corner should make them desperate to give the place away, etc. This strategy never works; in fact, when you attack a seller and their home, you only cause them to be defensive, and think up all the reasons that (a) their home is not what you say it is, and (b) they shouldn’t sell their home to you! 

Sometimes this happens with buyers who actually love a house and just walk around it fantasizing about all the ways they would customize it to their tastes while a seller is there. 

Sellers: avoid being at home while your home is being shown. 

Buyers: save your commentary for your agent; if you do encounter the seller in person keep your conversation respectful and avoid critiquing the house or the list price.

2. Being unqualified for mortgage financing. When a seller signs a buyer’s offer, most often the seller agrees to effectively pull the home off the market, forgoing other buyers who might be interested.  As such, the only thing worse than getting no offers on your home is getting an offer, getting into contract, then having the whole thing fall apart when the buyer’s loan falls through – especially if that could have been predicted or avoided up front.

Sellers: Work with your agent to vet your home’s buyers’ qualifications, including their loan approval, down payment and earnest money deposit – before you sign a contract.  It’s not overkill for your agent to call the buyers’ mortgage pro before you sign the contract and get a level of comfort for how robust their qualifications are. 

Buyers:  Get pre-approved.  Seriously.  And make sure that you don’t buy a car, quit your job, deposit lottery winnings or do any other financial twitchery between the time you get loan approval and the time you close escrow on your home.

3. Making unjustified lowball offers. No one likes to feel like they are being taken advantage of.  And sellers generally know the ballpark amount that their home is worth, as well as what they need to sell it for to get their mortgage paid off.  Yes – the price you pay for a home should be driven by its fair market value, rather than the seller’s financial needs, and deals are more available in a market like the current one, in which supply so vastly outpaces demand. But just throwing uber-lowball offers out at sellers hoping one will hit the spot is not generally a successful strategy, especially if you really, really want a given property.

Sellers:  Don’t get overly emotional about receiving a lowball offer; counter at the price you and your agent decide makes sense based on the total circumstances, including your motivation level, recent comps and the interest/activity level your listing is receiving.

Buyers:  Work through the similar, nearby homes that have recently sold (a/k/a comparables) before you make an offer to factor the home’s fair market value into your offer price – also factor in how much you want the place, too.  Don’t be amazed if you make an offer far below asking, and don’t get a response.

4. Renegotiating mid-stream. Sellers plan their finances, moves and  - to some extent – their lives around the purchase price a buyer agrees to pay for their home.  If you get into contract to buy a home, find out during inspections that costly repairs need to be made, then propose a lower sale price, repair credit or even actual repairs to the seller, that’s sensible and fair.  But if you were aware that the property needed a lot of work before you made an offer on it, then you come back asking for beaucoup bucks’ worth of credit or price reductions midstream, expect the seller to cry foul.  And holding the seller up two weeks into the transaction because you caught a case of buyer's remorse? Not cool, and not likely to foster the spirit of cooperation you may need to get your deal closed.

Sellers: avoid mid-stream price renegotiations by having a full set of inspection reports and repair bids at hand when you list your home.

Buyers: try to avoid renegotiating the entire deal unless you get some major surprises at your inspections or inflating small repairs to try to justify a major price cut.

5. Misleading or setting the seller up.  Remember when we talked about buyer turn-offs?  Being misled by listing photos or very fluffy property descriptions was high on the list.  The same goes for sellers.Offering way over asking with the plan to hammer the seller for a reduction when the house doesn’t appraise at the purchase price?  #LAME  Making an as-is offer planning the whole time to come back and ask for every penny ante repair called out by the inspectors?  Lame squared.

Sellers:
  If you get multiple offers and are tempted to take a sky-high one or one that claims to be all cash, consider requesting proof that the buyer has sufficient funds to make up the difference between what you think the home will appraise for and the actual sale price, and statements showing the cash truly exists. 

Buyers: Don’t be lame. I’m not saying you have to tell the seller exactly what your top dollar is, but making offers with terms designed to intentionally mislead is really, really bad form – and can result in losing the home entirely if and when your bluff gets called.

10 Pieces of Paper You Must Round Up to Buy (or Sell) a Home

by Jessica Hunt with Preservation Properties

Home buyers and -sellers alike often bristle with anticipatory irritation at the mere thought of all the paperwork they expect they’ll have to come up with to do their transaction, above and beyond the basic loan application, contract, disclosures and closing docs. And these worries start way in advance; it’s as though, before they even start visiting open houses, buyers begin to visualize - and dread - spending hours upon hours in the dank catacombs of the Vatican (à la Da Vinci Code) combing through ancient files, seeking some rare and precious artifact documenting their childhood dental history or genealogy.

In some respects, this vision of the experience of obtaining a home loan might not be far off - there are oodles of hoops through which to jump and, occasionally, the loan underwriter requests something sort of bizarre. But more commonly, there’s a pretty finite universe of documents you’ll really need to scrounge up to get your home bought - or sold. Here they are:

  1. ID (e.g., driver’s license, state-issued ID, passport).  Who must produce it?  Buyers and sellers.  Why?  Uh, hello!?!  Lender wants to know that you are who you say you are, buyers, and the title insurance company wants to make sure, sellers, that you actually have the right to sell the home.  Funny enough, this commonly goes unrequested until you get to the closing table, when the notary requests to see it before signing, but some mortgage brokers and even some real estate brokers and agents may ask to see it earlier on.
  2. Paycheck Stubs.  Who must produce it?  Any buyer financing their purchase with a mortgage.  Sellers, usually only in the case of a short sale.  Why? Buyers’ purchase price ranges are determined, in part, by their income. And short sellers have to prove an economic hardship.
  3. Two months’ bank account statements. Who must produce it?  Buyers getting financing; sellers selling short. Why? Buyers’ lenders now require proof of regular income and proof that the down payment money is your own.  Short sellers?  It’s all about the hardship.
  4. Two years’ W-2 forms or tax returns. Who must produce it?  Mortgage-seeking buyers and short selling sellers. Why? Banks want to see a stable, long-term income. They also limit you to claiming as income the amount on which you pay taxes (attn: all business owners!). And in short sales, again, they want documentation of every single facet of your finances.
  5. Updated everything. Who must produce it? Buyer/mortgage applicants. Why? Because things change, and because the time period between the first loan application and closing can be many months - even years! - on today’s market. During the time between contract and closing it’s not at all unusual for underwriters to demand buyers produce updated mortgage statements, checks stubs, and such - and its quite common for them to call your office the day before closing to request a last minute verification of employment!
  6. Quitclaim deed. Who must produce it?  Married buyers purchasing homes they plan to own as separate property.  Married sellers selling homes that they own separately, or joint owners selling their interests separately.  Why? With the Quitclaim Deed, the other spouse or owner signs any and all interests they even might have had in the property over the the selling owner, making it possible for the title insurer to guarantee clear, undisputed title is being transferred in the sale.
  7. Divorce decree.  Who must produce it? Buyers and sellers who need to document their solo status or the property-splitting terms of their divorce. Why? Again, to ensure that the seller has the right to sell.  Recently single buyers might need to prove that they shouldn’t be held to account for their ex’s separate debts or credit report dings.
  8. Gift letters.  Who must produce it? Buyers using gift money toward their down payment.  Why? The bank wants to be sure the gift came from a relative, and is their own money to give.  They also want the relative to confirm in writing that it’s a gift, not a loan - a loan would need to be factored into your debt load.
  9. Compliance certificates. Who must produce it? Usually sellers, but sometimes buyers, by contract. Why? Some local governments require various condition requirements be met before the property is transferred, like some cities which require a sewer line be video scoped and repaired, cities which require a checklist of items be met before a certificate of occupancy be issued (usually relevant to brand new and really old homes, the latter of which are often subject to lead paint concerns) and energy conservation ordinances which require low-flow toilets and shower heads to be installed. Ask your real estate pro for advice about which, if any, such ordinances apply in your area.
  10. Mortgage statements. Who must produce it?  Any seller with a mortgage. Why? the escrow holder or title company will need to use them to order payoff demands from any mortgage holder who has to get paid before the property’s title can be transferred.

By no means is this an exhaustive list.  Agents: what documents do you see buyers and sellers struggle to scrounge up during their home buying transactions?

A Budget Friendly Guide TO Greener Living

by Jessica Hunt with Preservation Properties

Displaying blog entries 1-10 of 26

Contact Information

Preservation Properties
439 Newtonville Avenue
Newtonville MA 02460
Office: 617.527.3700
Fax: 617.527.2050