New Jersey diversity analysis: Which county has the biggest immigrant population?

NJSpotlight posted a list of the New Jersey counties that have the largest immigrant populations. Which county topped the list? Hudson County – just last year 11,000 new immigrant residents moved here.

On a more local note, Middlesex County is second on the list due in large part to the high population of Asian Indian residents. According to the story, after Santa Clara, CA and Queens, NY, Middlesex County’s Asian Indian population has the third-highest concentration in the country.

Union County ranked fifth on the list.

Getting a Mortgage? Don’t miss the point(s) …

Mortgage

In terms of your mortgage, a point is an additional loan fee that is paid to the lender in exchange for a lower interest rate. It’s called “buying down,” and it allows you to reduce your rate for the life of the loan.

Let’s say you secured a mortgage loan for $500,000 without points, at 4.6% on a 30-year mortgage, your payment would be approximately $2,560 a month. If you paid two points ($10,000), the interest rate would go down to 4.1% and the monthly payment would decrease to around $2,415, a savings of $145 a month.

It would take you about eight years to recoup the money you paid up front. If you are planning on staying in your home a while, this will save you money in the long-run. Before deciding, ask yourself:

  • How long will I keep the home?
  • Do I have extra money to pay points?
  • Could that money be better used for something else?

Some may suggest that a smarter option is to invest that $10,000 because you could do much better than your $140 savings, but you have to weigh the variables.*

Here are three simple rules of thumb in determining your particular course of action:

  • If you plan to stay in the house for less than three years, do not pay points
  • If you plan to stay in the house for more than five years, pay 1 to 2 points
  • If you’ll be in the house for three to five years, paying points doesn’t make a significant difference

Since points are interest-payment related, they may be deductible on your taxes in the year that you close. See your tax advisor for details.

Mortgage points can add up to valuable savings over the course of your loan, but the future isn’t always predictable. Even if you “plan” on staying in your home for 20 years, changes in your career or family life could alter that plan.

* The above example is for illustrative purposes only. Be sure to check with your financial or tax advisor regarding your particular situation.

Calculate your mortgage payments here …

Buying a new home? Here’s what to look for during your first visit

There’s nothing worse than finding a great home only to find it’s a money pit waiting to happen. No house is as perfect as it may appear, and sellers won’t always disclose everything that’s wrong. With an inspection and due diligence on the part of you and your agent, you can discover most potential problems:

Look around the neighborhood: Are there many homes for sale? Are local stores and restaurants closing? If people are looking to leave the neighborhood, there’s a reason why.

Pay close attention to the exterior: Extra layers of roofing, boards near walls, plants growing out of the gutters or cracks in the pavement can indicate that not much care went into maintaining the property.

Look at the yard grading: If it slopes toward the house, it could cause a serious water problem with water running down the foundation walls or into the basement. Scour the foundation for damage as bulges and cracks bigger than one-third inch can mean the house has serious structural issues.

Use your eyes and nose: The smell of sewage, gas or unpleasant odors could be caused by serious issues. Hire a plumbing company to send a camera through the pipes to determine if there are blockages or breaks.

Check the electrical: Flip light switches. inspect the fuse box. If things appear ancient, it can be costly once you move in.

Keep a lookout for insects: Bugs, ants and traps could be a sign that there’s a problem.

With a little detective work, you can save a lot of time and money to make sure things are good enough to become your home.

Looking for a new home? Search through the listings currently on the market in Central New Jersey right here …

What’s the deal with foreclosures in New Jersey?

We Know Central Jersey Real Estate

What’s going on with foreclosures in New Jersey? Well here’s a couple interesting statistics according to RealtyTrac:

Foreclosures are up: Despite the national trend of the rate of foreclosures decreasing, the rate is increasing in New Jersey. Nationally, foreclosures were down in the first quarter of 2015 by 7% from the previous quarter and down 8% from the first quarter of 2014. However, in New Jersey bank repossessions increased 18% from the first quarter a year ago.

New Jersey is among the top five states in foreclosure rates in the US right now including: Florida, Maryland, Nevada, Illinois, and New Jersey.

The process takes years: Because New Jersey is set up as a judicial state – meaning the foreclosure process has to go through the courts – we have one of the longest time frames in the country. From the time the bank starts the foreclosure process to when the bank takes possession, the average time period in New Jersey is currently 1,115 days or just over three years.

What does it mean? If you’re looking to purchase a foreclosed property whether for a residence or an investment, the level of bank-owned homes on the market is up at the moment so now is a good time to do it.

on the best way to purchase bank-owned properties.

Read more about the RealtyTrac report here: http://www.realtytrac.com/news/foreclosure-trends/march-q1-2015-foreclosure-market-report/

Dealing with the Down Payment

Ever dream of owning a home but don’t think you can because you lack the down payment and closing costs? Here are a few tips:

piggy-bankBorrow from your retirement account: A 401(k) or traditional IRA may allow a first-time homebuyers to borrow up to $10,000 for their down payment without incurring a penalty. If you’re self-employed or your employer allows it, you may also be able to borrow up to $50,000 from your current 401(k) and pay yourself back over five years at a reasonable interest rate.

Ask family: If you are able to get help from a family member, the lender may ask you to sign a gift-letter form, attesting to the relationship. They may also require your relatives to explain where they got the money and prove that they are financially able to make such a gift.

Look for down payment assistance grants: Down payment assistance and community redevelopment programs offer affordable housing opportunities to first-time homebuyers, low-income and moderate-income individuals and families who wish to own a home.

Come to a lease/purchase agreement: Homeowners who can’t sell their homes may consider a lease/purchase agreement, where you rent the home you want to buy and a percentage of your rent is applied to the down payment. Make sure you get a contract outlining all the details so both parties are protected.

Add it to the wedding registry: Some mortgage companies allow those getting married to set up a down payment registry.

Cut back and save: If nothing else, there’s always the old-fashioned “saving for a rainy day.” Try putting aside 10% of each paycheck and eating at home instead of eating out. If you’re married, save the money you would spend on birthday, anniversary and Christmas presents and put it toward your house. You also may need to forget that vacation this year.

These sacrifices may seem significant but they will be worth it once you’re inside your own home.

Thinking About Co-ownership with a Friend?

Friends often share holidays, vacations and important moments in life. Why not buy a home together? Joint ownership makes sense, especially for those unable to afford a home on their own. Each can enjoy a real estate investment, and can even strengthen the friendship.

The opposite could happen as well. Friends can feud over the most trivial of things, placing the long-term housing investment at risk. Here are some tips for surviving co-ownership with a friend:

  • Disclose financial information: Know what you’re getting into. Agree upon the type of home and location, and are comfortable with living with one another.
  • Consult with an attorney: A contract is vital, as is listing each person’s name on the deed and the mortgage papers. The percentage of ownership must be clearly stated in the contract, including details of each person’s share of the down payment and the way in which mortgage payments are to be divided. This sets the stage for deciding each one’s share upon sale.
  • Get pre-approved for a mortgage: Odds are those buying a home will need to jointly qualify as co-borrowers on a single mortgage in order to purchase a property held in tenancy in common or joint tenancy.
  • Understand wants and needs: Options and terms will be contingent on each individual’s credit history, financial health and obligations—as well as what you’re both looking for in a house. Discuss all of this ahead of time.
  • Have an exit strategy: Job changes or unexpected romances could evolve where marriage will soon be in the picture. What happens then? This should be agreed upon before the house is bought.

Finding the perfect home for two can be a challenge. Just make sure that when buying any real estate with friends, you don’t let the friendship cloud your judgment.

4 Tips to Determine How Much Mortgage You Can Afford

By: G. M. Filisko

By knowing how much mortgage you can handle, you can ensure that homeownership will fit in your budget.

Homeownership should make you feel safe and secure, and that includes financially. Be sure you can afford your home by calculating how much of a mortgage you can safely fit into your budget.

Why not just take out the biggest mortgage a lender says you can have? Because your lender bases that number on a formula that doesn’t consider your current and future financial and personal goals.

Think ahead to major life events and consider how those might influence your budget. Do you want to return to school for an advanced degree? Will a new child add day care to your monthly expenses? Does a relative plan to eventually live with you and contribute to the mortgage?

Consider those lifestyle issues as you check out these four methods for estimating the amount of mortgage you can afford.

1. Prepare a detailed budget.

The oldest rule of thumb says you can typically afford a home priced two to three times your gross income. So, if you earn $100,000, you can typically afford a home between $200,000 and $300,000.

But that’s not the best method because it doesn’t take into account your monthly expenses and debts. Those costs greatly influence how much you can afford. Let’s say you earn $100,000 a year but have $1,000 in monthly payments for student debt, car loans, and credit card minimum payments. You don’t have as much money to pay your mortgage as someone earning the same income with no debts.

Better option: Prepare a family budget that tallies your ongoing monthly bills for everything — credit cards, car and student loans, lunch at work, day care, date night, vacations, and savings.

See what’s left over to spend on homeownership costs, like your mortgage, property taxes, insurance, maintenance, utilities, and community association fees, if applicable.

2. Factor in your down payment.

How much money do you have for a down payment? The higher your down payment, the lower your monthly payments will be. If you put down at least 20% of the home’s cost, you may not have to get private mortgage insurance, which protects the lender if you default and costs hundreds each month. That leaves more money for your mortgage payment.

The lower your down payment, the higher the loan amount you’ll need to qualify for and the higher your monthly mortgage payment.

But, if interest rates and/or home prices are rising and you wait to buy until you accumulate a bigger down payment, you may end up paying more for your home.

3. Consider your overall debt.

Lenders generally follow the 43% rule. Your monthly mortgage payments covering your home loan principal, interest, taxes and insurance, plus all your other bills, like car loans, utilities, and credit cards, shouldn’t exceed 43% of your gross annual income.

Here’s an example of how the 43% calculation works for a home buyer making $100,000 a year before taxes:

1. Your gross annual income is $100,000.

2. Multiply $100,000 by 43% to get $43,000 in annual income.

3. Divide $43,000 by 12 months to convert the annual 43% limit into a monthly upper limit of $3,583.

4. All your monthly bills including your potential mortgage can’t go above $3,583 per month.

You might find a lender willing to give you a mortgage with a payment that goes above the 43% line, but consider carefully before you take it. Evidence from studies of mortgage loans suggest that borrowers who go over the limit are more likely to run into trouble making monthly payments, the Consumer Financial Protection Bureau warns.

4. Use your rent as a mortgage guide.

The tax benefits of homeownership generally allow you to afford a mortgage payment — including taxes and insurance — of about one-third more than your current rent payment without changing your lifestyle. So you can multiply your current rent by 1.33 to arrive at a rough estimate of a mortgage payment.

Here’s an example: If you currently pay $1,500 per month in rent, you should be able to comfortably afford a $2,000 monthly mortgage payment after factoring in the tax benefits of homeownership.

However, if you’re struggling to keep up with your rent, buy a home that will give you the same payment rather than going up to a higher monthly payment. You’ll have additional costs for homeownership that your landlord now covers, like property taxes and repairs. If there’s no room in your budget for those extras, you could become financially stressed.

Also consider whether or not you’ll itemize your deductions. If you take the standard deduction, you can’t also deduct mortgage interest payments. Talking to a tax adviser, or using a tax software program to do a “what if” tax return, can help you see your tax situation more clearly.

G.M. Filisko is an attorney and award-winning writer who’s owned her own home for more than 20 years. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

Visit HouseLogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.

Owner-Occupants Given Better Chances for Fannie, Freddie Bank-Owned Properties

The Voice for Real Estate

The Federal Housing Finance Agency has announced a change for the sale of Fannie Mae and Freddie Mac REO (bank-owned) properties. This change allows owner-occupants the first opportunity to purchase an REO property for the first 20 days that the property is on the market.

The change to give owner-occupants a better chance to purchase REO properties was made with the best interests of each community in mind.

Watch here for more information about the new policies for REO properties …

Thinking of purchasing a distressed property? Talk to us about your best strategy for finding a great deal on your new home. CONTACT US HERE

KCM Talks about 3% Down Mortgages

Keeping Current Matters

Keeping Current Matters has a post about the conventional mortgages that Freddie Mac is scheduled to start buying that offer a low 3% down payment. This is definitely good news for buyers that have issues coming up with a big enough down payment. First-time home buyers in particular should benefit from this new offering as well as buyers with good income and credit but a lack of a substantial down payment.

You can read more on the KCM Blog … Freddie Mac’s New 3% Down Program

Looking for a mortgage representative you can trust? Contact me for recommendations …