Archive for December, 2008

Americans Don’t Want War, Americans Want a Home

Saturday, December 27th, 2008

I would like to share with you a powerful essay written by Yelena Bonner, wife of the exiled Soviet physicist Andrei Sakharov.  Bonner came to the United States for heart surgery and returned to the Soviet Union after six months in the U.S.

At a time when many are wondering just what home ownership means, I thought it appropriate on this Christmas Eve to share with you her powerful essay again.  What is remarkable to me is that she truly understands the American Dream – home ownership -more than many Americans do.

“I Want a House,” by Yelena Bonner.

I maintain that Americans do not want war. What Americans want is a house. No matter their place on the social ladder, they want a house of their own. They want a house and the ground it stands on, that’s all.

The First Lady says that when the President retires, they will sell the house in which they lived before the Presidency. The children are grown, and the place is too big for them. So, they will buy a smaller house. A wonderful plan! The President doesn’t want war, he wants a new house.

I also want a house, in addition to my usual wants that everyone be together and healthy, and that there be no war. A house with enough land around it for me to plant flowers. I don’t need a lot of bedrooms, just one for us and one for Mother, a guest room, and one more so that I’m always ready for our Grandchildren. And I’d like a room where I could at last spread out my books, and Andrei could make a mess.
What nonsense I’m writing! I want a house! This is me, who should be counting the days, no, counting the hours of my freedom to do what I want.

But you know, I’m 63, and I’ve never had a house. Not only that, I’ve never had a corner I could call my own. After the war we had a room in a communal apartment – there were 48 people in that apartment and only one toilet. I think the first time I was mistress of my own place was, well, it’s hard to believe, it was in Gorky, while we were in exile. I do not want that.

My Daughter has a house in Newton, Massachusetts. It makes me so happy to think that she has a house. Her family is caught up in our affairs, in our Gorky horrors and suffering. They have forgotten the pleasure of their house. I want them to go back to caring about it – it has done so much for them.

I want a house. My dream – my own house – is unattainable for my husband and myself, as unattainable as heaven on earth. But, I want a house. If not for me, then for my son and his family in America. My son and I plan to buy one. And, I am learning many new things. The house should be near good schools. My Granddaughter is three, and schooling is not far off in the future. It should be in the suburbs – vacations are short, and a child should not have to grow up in a polluted city. It should be close to work – both parents have jobs and there is only one car. It should have a foundation and basement. I have never known such considerations to exist. It should have three bedrooms so my mother can be with them, or at least visit. And, it should have a studio. My Son, Alyosha, needs a workroom for his mathematics.

A house is a symbol of independence, both spiritual and physical. Some own a tiny house, like a toy cottage with only the soil in their flower boxes. Others have lots of bedrooms, baths, and extensive lawns. The American feeling about his house expresses the main traits of Americans – the desire for independence and privacy. But that attitude gives rise to a third trait; “My house is my pride and joy.”

And from that comes, “My city, my state, and my country is my pride and joy.” It is an attitude that is open, kind, and caring, both toward the house and everything it stands for – the soil in the flower boxes and the lovingly tended lawn, even if it’s only three yards square. And I say, this shows that Americans care about the land in general, and about the whole world.

I want, I want, I want. More than the children, I want a house. But, it’s time for me to pack my bags. The children live here, I live over there. What difference does it make if Gorbachev and Reagan meet in June, or any other month? Americans don’t want war, they want a house. I don’t want war, I WANT A HOUSE.

Thanks to Chris McLaughlin for the reprint of this article.

Greg Cook

First Time Home Buyers Network

www.homebuyerhelpnetwork.com

951-265-4532 (mobile office)

951-699-7813 (Fax)

greg@homebuyerhelpnetwork.com

It’s Too Important…DO IT RIGHT!

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First Time Home Buyers-What Lenders Look for in a LoanApplication

Thursday, December 4th, 2008

We’ve talked about Credit History and Asset, the next leg of the CH-A-I-R is Income. 
INCOME  is how a lender determines your ability to pay. You may have heard about DTI (Debt to Income Ratio). Based on past performance lenders know that you can only effectively allocate a certain percentage of your income toward your monthly payment and your other credit debt. Your lender has guidelines that will allow a certain percentage but you have to take a long look inward, examine your spending habits and determine exactly what your budget is for your monthly payment. You and your lender should spend a lot of time figuring out exactly the right payment for you and then “STICK WITH IT!”.
General lender guidelines are between 29-33% of your monthly income going toward your house payment. The yard stick a lender uses is your “gross” monthly income (before taxes, SSI and other deductions). Most lender websites have calculators you can use to help you “pre-qualify” yourself. Frankly these calculators are a waste of good programming. INCOME is one of the most subjective areas of underwriting and it takes an experienced loan originator determine how much income is useable for the purpose of your home loan. If you are a salaried employee and your paycheck is the same week after week after week, then you can get a “handle” on your pre-qualification amount. But most of us have variances in our checks, i.e. overtime, bonus, shift differential etc. these require the help of a professional or you will find yourself looking at homes for which you don’t qualify. If your Lender says you qualify for $200,000 AND you are comfortable with that payment, don’t look at $230,000 homes. It’s basic economics the more you pay for a house the higher the monthly payment.
Much of the current “mortgage mess” is due to folks, just like you, buying homes they couldn’t afford. They either overstated their income or were “qualified” at a much higher DTI than was reasonable. At the First Time Home Buyers Network we don’t want you to buy your first home and then lose it because the payment was more than you could handle. If you have confidence in your lender (if you don’t you shouldn’t be working with him/her anyway) don’t stretch beyond your budget. You have to decide which is more important: Getting the house you want or Getting the house you can afford?

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First Time Home Buyer What Lenders look for in a Loan Application

Wednesday, December 3rd, 2008

Yesterday we talked about your Credit History as leg one of and how it fits into the CHAIR. Today we’ll discuss the “A”.

ASSET – The second leg refers to the property you intend to buy. This “leg” is critical to a lender’s decision because the house is the lender’s security for the loan and if you cannot make your payments it’s what the lender now becomes the homeowner.

Your lender wants to make sure your home is comparable in value to the other sales in the neighborhood and to make sure the sales price accurately reflects the value. HINT: Your Realtor represents the seller (unless you sign a buyer’s agreement) so you want to do your own homework on what the “comps” are in the area. There are a number of websites including www.zillow.com. You can also ask your Realtor to provide you a list of the comps from MLS to help you determine a good offer price.

When the time is right, your lender will order an APPRAISAL. The appraisal will cost between $350-$425 and is done by a licensed and certified appraiser of the lender’s choosing. His/Her job is to determine the correct market value and to make sure your new home meets the minimum health and safety standards.

Sometimes your offering price will be more than the appraised value. If that should happen, then one of two things will need to happen 1) Renegotiate with the seller a lower price or 2) You can bring in a bigger down payment. Loans are always based on the LESSER of sales price or appraised value.

The appraisal is protection for you and the lender to make sure your purchase price accurately reflects market conditions. Paying too much for a house doesn’t help anyone except the seller.

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