Advice Worth Taking: Tips for Women Hunting for A Mortgage

The previous blog post (see here) noted that women are 32% more likely to pay a higher interest rate on their loan, according to the Journal of Real Estate Finance and Economics. Ostensibly, women are far more likely to take the advice of a friend or colleague rather than consult with several different lenders and compare (see article).Now for some advice to women to close that gap and make us all more informed consumers.

Be sure to look not just at different lenders, but at different types of lenders; check out large national banks, mortgage brokers, online lenders and smaller lenders to ensure you’re getting the best range of options.

Also, make sure you’re comparing the same loan product. A 30-year fixed at a national bank will have a very different rate than an ARM at a smaller lender. And on top of the type of loan, remember that rates change daily, hourly in fact; try to cross-reference these loans within the same day, or preferably within the same part of the day, if possible.

If you’re having trouble remembering who you talked to and what you talked to them about, try writing several scripts and working on a spreadsheet so you can keep the data in the right place. This will also make sure that you’re asking them the same questions for certain pieces of data – rates, terms, points, etc. As you work on your script, become familiar with loan terms so you know what you’re dealing with (you can do that here). A little up front research can go a long way to prepping yourself for these conversations. It will also keep you from worrying about getting the run-around because you’ll know what you want before you call.

So when it comes to advice from our friends, ladies, keep an eye on what we have to do on our own to make sure we’re making the best possible decision for ourselves as we move into our new homes.

Take note, ladies, let’s make sure to do our loan research!

Women don’t shop enough for home loans

Ann Brenoff, AOL Real Estate, December 2, 2011

The report, published in the Journal of Real Estate Finance and Economics, set out to explain why women were 32 percent more likely to get a subprime mortgage than men in a 2006 study. According to a team of researchers led by Florida Atlantic University’s Ping Cheng, the answer wasn’t discrimination because of gender or even income disparities.

Women pay higher rates because they are more likely to listen to friends’ recommendations, whereas men are more likely to shop around for the best deal.

“Our empirical test confirms that search effort is rewarded in (the) marketplace, and suggests that gender disparity in mortgage rates may be addressed by policies aimed at improving women’s financial literacy and search skills,” the report summarizes.

It makes sense to Daily Finance columnist Laura Rowley. “It’s not surprising, because mortgage shopping can be incredibly complex, so we look to people we can trust to help make the decision,” says Rowley. “But this is one area where you don’t want to get by with a little help from your friends.”

Instead, she advises, call two mortgage brokers and a direct lender, preferably a local small or midsize bank, and try the following script: “Hi, my name is (X) and I’m in the market to buy a ($X) house, and I’m going to put down (X) percent.

“I’m getting three written estimates, and then I’m going to choose. Can you email me a cost-estimate worksheet stating all the fees and the interest rate?”

Be sure to get the estimates on the same day, as rates can change quickly. Also, don’t ask for rates and fees by phone; unscrupulous brokers will simply lowball their estimate to get you in the door, says Rowley.

More on Winter listings: Generational changes lead to market shifts

The previous post mentioned that selling your home in winter may not be as unappealing as it may have once been. Delving further into this trend, we start to see a demographic reason for this shift. Traditionally, the homebuying season mirrors school calendars so that parents can minimize impact on their children during a move. However, “The generations are changing and we are seeing millennials come of age, so to speak, and closer to the homebuying age…hopeful property owners aren’t as locked into traditional seasonal patterns,” says Julie Reynolds, vice president at Realtor.com (see article).

In cooler climates, even as these changes are taking effect, homeowners can be tempted to take lower offers than they might during warmer seasons, fearing fewer buyers. These sellers should take note of these changing market realities. As well, in warmer climates, buyers are actually competing in winter against “snowbirds” for whom properties in the sun seem far more valuable when the lower temperatures set it.

Here in the Tri-Valley area, our world class schools mean that sellers here may see less of a shift than other areas. However, with the high price point Pleasanton, Livermore and the like fetch, many buyers may be looking to take advantage of the winter slow-down to cash in on a bargain-priced home. What does all this mean for our area homeowners? It means that while change may come a bit slower, the Tri-Valley will slowly feel the effects of these demographic shifts and the real estate market may thaw even while temperatures are at their lowest.

As trends shift and the market follows generational patterns, we will see a redefinition of what it means to both list and to buy in the winter months. Using the tips mentioned in the previous article as well as consulting me about how best to show your house or where best to find the greatest winter deals on a home means that doing a real estate transaction in wintertime doesn’t have to leave you out in the cold.

Rethinking seasonal home sales…

Winter Real Estate Blues are a Thing of the Past

Mike Wheatley, The Seattle PI, November 25, 2011

The way things used to work was that real estate agents would often recommend against winter home sales, and advise their clients to take their properties off the market over the winter months in order to “freshen things up” and get the home ready for spring when more buyers would be on the lookout.

But that was the old way of doing things. According to Sam DeBord of SeattleHome.com and Coldwell Banker Danforth, any agent advising this practice now is making a serious error. If you want to sell your home, you should leave it on the market at all costs.

These days, freezing cold weather, holidays and a lack of daylight hours are not stopping prospective buyers from getting out there and searching. 90% of buyers actually do their house-hunting online anyway, and many more are quite happy to drive around neighborhoods they’re interested in and seek out listed homes, come wind rain or shine.

Also – and this is very important for anyone desperate to sell – during winter there will be significantly less competition.  So even though there are traditionally less home sales in winter than other seasons, when these are equated to the reduced inventory on the market, it’s likely that your home still has the same chance of being snapped up as it would in warmer weather.

So the moral behind this story is a rather simple one. If you really want to sell, then sell!

TARP on the Lookout: The Federal Government Shuts Down Mortgage Relief Scams

You may not have heard of it, but it’s watching out for you: TARP, the Troubled Assets Relief Program. The federal government created TARP to reduce fraud, waste, and abuse and to purchase assets and equity from financial institutions to strengthen its financial sector. Signed into law by George W Bush in 2008, TARP was a response to the subprime mortgage crisis. While its success has long been under questions, TARP has in fact seen some success lately. To date, “of the total $700 billion bailout money, banks, other financial institutions and U.S. carmakers received $413.4 billion, of which, about 77% (nearly $317.6 billion) has been recovered by the government” (see article).

Along with focusing on helping struggling financial institutions, TARP also acts as a kind of consumer watchdog. This week, TARP shut down hundreds of shady relief sites that advertise on large search engines. To bolster their efforts, Google has since suspended relationships with 500 advertisers and agents linked to the online mortgage fraud scams that advertised on its search engine and Microsoft, for its part, cut off 400 advertisers this week. Purchasing certain search words like “foreclosure assistance” and “loan modification,” these groups seek out distressed homeowners as they search online for guidance (see article).

These scams can target homeowners in a number of ways: they can require up-front fees for supposed assistance and, in extreme cases, they advise borrowers to cease paying their loans and cut communication with their lenders. Often claiming to be associated with government agencies, these scams can lead to thousands of dollars in losses and credit issues for homeowners who fall prey to them.

Should you be searching for assistance with your loan, be wary of what you find in your searches. Make sure to do your due diligence and check out any groups claiming to offer help. Consult your Realtor, lender or banker before committing to anything and always be wary of anyone requiring money up front.

For further assistance, the government has set up a hotline to answer questions and offer guidance to distressed homeowners; for more information, call the Hope Hotline at 1-888-995-HOPE (4673) or go online to http://www.makinghomeaffordable.gov/pages/default.aspx.

Take note – Your water bill will be a bit higher from here on in.

Water bills are going up

Delores Fox Ciardelli, Pleasanton Weekly, November 8, 2011

Water bills are going up for residents in Zone 7, which includes Pleasanton, Livermore, Dublin and the Dougherty Valley portion of San Ramon. A 5% increase approved Oct. 19 should translate into an additional $1.88 to the monthly water bills of typical households.

Board members said the raise in rates will ensure reliable service and establish funding for infrastructure investments. The district is also setting aside fund for water-quality improvements such as taste- and odor-control projects and demineralization to reduce water hardness.

The rate increase was necessary, in part, to maintain Zone 7’s 40 miles of pipeline, nine municipal wells, three water treatment plants and a groundwater demineralization facility, all of which were built more than 40 years ago.

“In this period of tight budgets, Zone 7 continues to maintain a high level of service while achieving cost-efficiencies in operations and maintenance,” Board President Sandy Figuers said.

Efficiency measures include a soft hiring freeze, employee benefit and cost-of living wage concessions and lowered costs of outside contracts by using more-house resources. The district has also reduced chemical costs by participating in the Bay Area Chemical Consortium.

The board considered raising rates up to 10% but decided on the 5% to help out its ratepayers in these difficult economic times. All of the board members emphasized that, while nobody likes a rate increase, a minimal level was necessary to avoid a spike next year when still the economy may be bad.

Zone 7’s operating budgets for this fiscal year and for 2012-13 are $2.2 million and $2.5 million, respectively, less than for 2010-11, the board reported.

Keep Your Home California program expands…

In 2010, the federal government named California as among the top 18 states hardest hit by the market downturn. In an effort to curtail Californians losing their homes, the government created what is now the Keep Your Home California program, which was developed in collaboration with numerous community partners, foreclosure counselors, housing advocates and others directly involved in helping struggling homeowners.

Recently, Keep Your Home California has expanded its eligibility to different types of distressed homeowners. It has officially expanded its service to include aid to homeowners who raised cash through refinancing, who have second homes and who have been unemployed longer than six months. They have also extended the limit from six months to nine months for financial aid to those with mortgages of up to $3,000. For homeowners who received cash for refinancing their homes, they are now eligible for a reduction in their loans by $50,000 in order to help make their monthly payments more affordable with the Principal Reduction Program. Also available is a $5,000 stipend to help those relocating after opting for a deed in lieu or short sale through the Transition Assistance Program.

$2 billion strong, this program has already helped nearly 8,000 homeowners and Keep Your Home California is looking to make that number even larger. According to The Press-Enterprise,  “almost 50 mortgage servicers now participate and together they represent more than 85 percent of mortgages in the state” (see article). Business Wire quotes “This expanded eligibility will allow more families to qualify and receive greater assistance,” said Claudia Cappio, Executive Director of the California Housing Finance Agency. “We are continuously evaluating our experience so far and making adjustments like these based on the initial results of the Keep Your Home California program” (see article).

Since the program’s inception, it has been steadily increasing its aid potential with greater funds and an extended reach. In order for homeowners to be eligible, their lenders must be participating in the program so that along with more funds, Keep Your Home California is seeking to expand its lender participation.This program is not just about handing out cash, however, as it offers counseling, financial events and other resources to help educate distressed homeowners about their options.

Should you have any questions about this program, look here:

888.954.KEEP(5337) between 7 a.m. and 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays, or visit their site here.