Helpful Real Estate Articles

If you are a homeowner then you should make building equity in your home one of your number one priorities. The reason for this is that equity in your home is like having cash in your bank account because you are able to borrow against it for a variety of different purposes. Also, when you build equity in your home it means you are that many dollars closer to owning your home outright. There are quite a few things you can do in order to build equity in your home that include making a higher down payment, additional principal payments, shorter mortgage, as well as focusing on home improvements.

Making a large down payment helps you build equity in your home because every dollar you pay in your down payment goes directly to your equity. Because of this, saving money in order to make large down payments has several benefits. First, it automatically increases your equity as means that you will require a lower loan amount which means you will pay less money in interest. So, if there is any way you can make a large down payment make every effort to do so.

Another way to build equity in your home it makes more payments on principal than is required. This is important because every dollar paid on principal means another dollar built in equity and less money that will accrue interest. So, even if you can only make small extra payments on principal now still go ahead and get in the practice of doing so. It will really pay off in the long run.

Also, sacrifice in the short run and have a short mortgage term rather than a long one. By doing this you do several things. First, you pay more money per month on your loan, but you will have less money accrued in interest and build equity significantly faster. Also, if you have a short loan period you will save a considerable amount of money that would be accrued in interest otherwise and the peace of mind of knowing that you own your home much faster.

Investing in home improvements is another way you can build your equity. The reason this builds equity is because when you make home improvements you increase the value of your home, which means you will be able to build more equity. However, there are some things to keep in mind when considering home improvements. For example, home improvements to kitchens and bathrooms always increase the value of your home more so than external improvements like swimming pools or fences.

If you are interested in building home equity then make a plan that includes the aforementioned tips and make sure you follow it diligently. By doing this you will build equity in your home quickly and efficiently.

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Many homebuyers choose adjustable rate mortgages for the initial financing on their home purchase. Rising interest rates and other terms can be confusing to the borrower.

Adjustable rate mortgages (ARMs) are loans in which the rate varies. Adjustable rate mortgages loans will follow how interest rates rise and fall. There are many reasons why a consumer might choose an ARM, but they can be risky loans.
One reason a consumer might choose an adjustable rate mortgage is the rates are generally lower in the beginning than a fixed rate loan. If you expect to be in your property for a short time, say for 5 years, then an ARM with the first 5 years fixed can be a good choice.

There are three main types of ARM loans offered by lenders. They include:
A 5/1 ARM loan is where the payment is fixed for 5 years adjusting for the remaining 25 years.When you get a 3/1 loans payments are fixed for three years and adjust for 27 years. The 2/1 ARM is fixed for two years and adjustable for 28 years.

An adjustable rate mortgage works like this. It is usually fixed for a certain amount of time initially, anywhere from 1 month, 5 years or something in between. After this period the loan then becomes adjustable according to the published  "index", such as LIBOR Prime rate, Cost of Funds Index, or other index plus a margin, which is the lender profit.  If the index rises, your rate rises. If it lowers, your rates should fall. There is a lifetime cap on the amount interest can increase over the life of the loan.

What happens when there is a sudden higher mortgage rate? You have some options when it comes to dealing with higher rates.

The most common is to refinance to a mixed rate mortgage. If you have enough equity built up and can afford the higher payments this is a good option. Watch out for prepayment penalties in your current mortgage. Be sure to know what the costs of refinancing are and how they will affect your loan.

Another option is the talk to a reputable credit counselor. They may be able to help you lower your payments, deferring the unpaid interest. This will increase your loan balance though. On other debts try to work out a lower payment plan to offset the higher mortgage payment.  Or persuade your lender to agree to forbearance or have them postpone the increase to a future time when you will be able to pay.

You can also sell your home. List it with a real estate agent if you have the equity to pay commissions and costs of the sale. Or sell it yourself.  Deed your house to the lender in a deed-in-lieu-of-foreclosure agreement. You will receive no money for your equity and your credit will be adversely affected.

Of course foreclosure is an option, but it's not desirable. The worst thing to do is to do nothing.

When choosing an adjustable rate mortgage, be aware that rates could increase over the life of your loan. Your payments can rise and you may need to make adjustments in your other debt. If you plan on living in the home for only a short time, an ARM might be the best option in financing your new home.

Do you have an ARM and how is it working for you?

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There is an unfortunate stroke of luck and you have engrossed yourself neck-deep in bad credit. Credit repair seems to be the need of the hour. You need a dolphin-jump to free yourself from the shackles of bankruptcy and you are out of ideas. You are loaded with bank notices and warnings. How do you handle this stressful bad credit? You are just a layman and bankruptcy can dig up nightmares for you. This is really getting on your nerves. Well, the very sensation seems stinky. It feels miserable if you are glued with bad credit and you need a quick guide to credit repair.

 A few handy tips, well imbibed can raise your eyebrows and get you exercising your jaw. These can give you a reason to smile and can set you back on your track. But self help may be the best help. You don’t need to be depressed. Bad credit can be repaired through a few systematic steps and make you credit- worthy in some time.

 5 basic steps to credit repair

 1. Getting your credit reports

There are three chief credit government departments that regulate these credit functions. TransUnion, Experian and Equifax. You need to research up and get to know their opinions about your case in specific. There is every chance of diverse viewpoints amongst all three. Those in bankruptcy hunting for credit repair need to report to only one particular bureau to whom they subscribe. Thus people with bad credit don’t need to report to all three. You can get reports from all three for $9 each and can get them free if you have been denied insurance, employment or credit due to bad credit. You can obtain them in 60 days after your rejection. The most considerable report can be considered by you as an option.

 2. Examine the reports

 Once you obtain the reports check them in every nook and corner for any kind of mistakes. The reports may be erroneous as these bureaus do not cross check the information provided by the credit companies to them. Be sure to look for any obsolete information and erroneous account records. Be painstaking enough while organizing and preparing points of dispute. If there are any false points there you can look to rectify them through your good habits and timely billings and fight bankruptcy.

 3. Dispute reporting

Report the points of dispute to the credit bureau after thoroughly preparing a list of errors and their proper justification. Remember to keep the supporting documents, letters, identity proofs, address proofs and other important documents that can get your errors rectified. You must then send them to the credit authority to rectify the errors.

 4. Dissolve bad credit and escape bankruptcy

You can use various consolidation techniques and also recommend the bank to lower your installments. You can also take various credit cards and diversify risks.

 5. Show your credit worthiness

You can approach petrol pumps, banks, companies, shops, etc that have your previous proofs of purchase and liquidity. You can forward these to the bureau, gain their trust and repair credit.

Which makes more sense? Paying someone or organization hundreds or thousands of dollars to do what you can do yourself? Or you taking the time to call your debtors and take the money that you would have paid others and pay off your debtors yourself?

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You wouldn't believe the stories that me, Darlene and our partner is hearing from people in the tri-state area about how their homes are being stolen from them by scammers. The stories will bring tears to your eyes.

If you or someone you know is having ANY problems making mortgage payments and/or received an Act 91 package, or are already in foreclosure, please call us right away at 215-439-5625 for honest loan modification and foreclosure guidance.

It's sad that I have to say this to our family members, friends and associates but don't lose your home or property because you don't want us to know your business. We are professionals and we won't discuss your personal business with anyone. We're family and friends that you can count on. We have had family members, friends and associates buy homes from others because of credit, income or other issues.

 Here's a short list of what you need to know to avoid loan modification fraud:

1 - If Anyone Asks for An Upfront Free it is most likely a loan modification scam. A reputable loan modification company will never ask for an upfront fee. If a loan modification company does ask for a fee in the beginning, odds are you'll never see that money again.

2 - If They Tell You to Pay Them Instead of Paying your Mortgage it is most likely a loan modification scam. They may spin it in a way were this makes sense, but you should NEVER send your mortgage payment to anyone other than your lender.

3 - If You Don't Know the Company and They Ask for Confidential Information Over the Phone or Online there's a good chance it is a scam. General rule of thumb online- there are very few instances in which you should share your personal and confidential information online. Unless you absolutely know and trust the source, do not give out this information to anyone.

4 - If They Guarantee That They Can Stop Foreclosure then it is most likely a scam. No one should be able to guarantee that they can stop foreclosure, not even legitimate companies can guarantee this.

5 - If They Pressure You to Sign Over the Deed of Your Home it is almost definitely a loan modification scam. A legitimate mortgage counselor would never force you to sign over the deed of your home, or force you to sign anything without making sure that you full understand.

There are many legitimate and helpful loan modification companies out there, but the fact that there are a few loan modification frauds means you must be aware of what to watch out for an how to avoid them.

Call me right now at 215-439-5625 for honest guidance. We are helping many people successfully save their homes and reducing their rates and mortgage payments.

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You don't need to be an economics major to figure out that if health care is going up 10% or more every year while income is only going up 4%, things aren't looking too good. It is entirely possible for a person to work their entire life and retire with a nest egg of $200,000 or more only to have it wiped out by one major medical issue. This is especially the case when machines must be used to keep you alive due to a severe injury or illness. It is in tragic times like these that a living will can be the difference between saving or breaking a family--economically at least.

A living will is a legal document granting another person the right to cease treatment in the event a person becomes unable to live, eat, and function without the aid of machines or medical care. A feeding tube may be removed, a ventilator turned off, or any other machine or device that is being used to keep a person alive may be discontinued or turned off if the executor of a living will determines so.

Of course, there are certain conditions that must be met in order for the executor of a living will to be able to make the decision to cease treatment. Unfortunately, there are no uniform and concrete set of conditions to be met in a living will because they differ from state to state.

In general, however, physicians must determine that a person is unlikely to improve and in a debilitative or painful state. Also, the person must not be able to care for themselves and thus require a machine or other medical device in order to remain alive. At that point, a person with a living will can have treatment terminated if the executor requests doctors to do so.

Of course, there are instances when a living will is contested by other family members not named in the living will. In most cases, the courts have ruled in favor of the wishes made clear in the living will and rarely ordered the continuation of treatment. And honestly, that treatment is very expensive and run into the thousands of dollars--each and every day.

No one wants to see the passing of a loved one but no one wants to see them suffer, either. If a person took the time to have a living will drafted and they found themselves in a situation covered by the document, then chances are they would want treatment stopped. While an unpleasant topic, the fact remains that medical situations arise where the person will not recover and is only being kept alive by machines. Prolonging life at that point only costs everyone more suffering, confusion, and money. A living will is the responsible alternative that takes a potentially painful decision out of other people's hands and puts it squarely in yours--where it belongs.

As realtors we have seen the devasting effects on families who don't have a living will. Please make sure that you and your family are aware of the importance of creating a living will.

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If you are a residential or commercial tenant, please take a minute to read this very valuable tip. Never, ever pay your landlord in cash without getting a receipt at some point, especially, if you are renting from a private landlord. Here's why.

As Realtors and Property Managers, we run across far too many tenant prospects that have disputes with their current landlords and desperately need to move but have no proof that they have ever paid their rent on time or at all for that matter.

Just say for instance, you and your landlord are in dispute over your about badly needed repairs and you have decided to stop paying rent. Now the landlord will most file for eviction against you. So, you've been summoned to court and the Judge ask you to provide proof that you have paid your rent in accordance with the terms of your rental lease but you can't. Well, you have just hurt your case. You could have paid your rent early every month, but if your landlord is really crazy he or she could simply say that they have never receive a dime from you. This happens all the time.

If you rent from a rental management company, then your rental history can be verified by prospective landlords, mortgage companies or banks with a phone call or a rental verification letter. However, even when renting from a management company, get in the habit of paying your rent with a checks, post office money orders (USPS money orders are safer, easier to trace and refund) or automatic payments. This way if the management company has terrible bookkeeping, a fire or even goes out of business, you can verify your rent payments. Look out for number one and keep your own records.

Also, rent receipt books that can be brought at your local dollar store won't cut it either. Mortgage companies and banks won't accept hand written receipts or letters from Mom, Dad, Sister, Aunt Louise or any one else for that matter as legitimate proof.

When applying for a mortgage, a good landlord reference and copies of 12 months worth of rental payment receipts from a management company or cancelled rent checks, money orders or bank statements is essential and will do wonders for people with bad credit. If you don't pay any of your other creditors, please make sure that you pay your landlord, mortgage company or banks and pay them on time. Having a roof over your head is a must!

Last but certainly not least, if you have a dispute with your landlord, DO NOT withhold the entire rent amount. File a compliant; pay at least half of the rental amount; and keep good records of every conversations and action made by your and the landlord. More importantly, contact your local Landlord and Tenant Court or Tenant Action Committee for professional state specific advice.

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A mortgage is a financial agreement between a lender and an individual that is hoping to purchase a home. The lender will pay for the home and the home buyer will need to pay the lender back, over the course of several years including interest. Not everyone does qualify to have a home loan like this but many do. This has become the standard way of purchasing a home in the United States. While it may not be the most affordable, as it is always more affordable to pay off the home in one payment, it is an easy process and one that can allow more people to own the home of their dreams.

What makes you qualify for a mortgage has a lot to do with the type of life you are leading financially. The lender of this home loan will want to make sure that you can actually pay for it. They will want to insure that the home will be able to be paid for today and into the future. To do this, they will look at several aspects of the potential home buyer.

The first thing that they will look at is the work history of the individual or individuals looking to purchase the home. They are looking to find out if they have employment and if they have had it over the course of their adult life. If they have steady employment, this is ideal as it shows that an individual is less of a risk of not being employed. Of course having a job shows that you have the money coming in so to pay off the home mortgage .

Next, the lender will look at the amount of money coming into the potential home buyer as opposed to what his bills are. Here, they are looking to make sure that there is enough income coming in to pay off the monthly payments that a home loan has. The debt to income ratio that they are looking for is vitally important because if there is not enough coming in, they are likely to default on the loan.

The credit score of the home owners is also very important. If you are a new homeowner, one that has never had a home before, you should insure that your credit score is high. This tells the lender of the mortgage just how responsible you are with your debts. Someone that has no credit or poor credit is more of a risk to the lender then the other guy that has good credit. If you have owned a home before, the lender of the home loan will want to look at how well you paid down your past home loans. The better that you do this, the better your qualifications for obtaining this type of loan are.

In the end, each lender will have a different set of rules as to what is okay and what is not. The good news is that you can get no obligation loan quotes easily, right on the web to allow you to see if you do qualify as well as how much of a loan you qualify for. A mortgage is a serious commitment that only the people that can afford it should take on.

Please don't hestitate to contact us at with all of your real estate and mortgage questions. Kevin at 215-439-5625 * Darlene at 215-439-56265 of via email at kdj@kevinanddarlenejamison.com

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OK. You've made the decision. You're ready to buy a house.  Great!  You've got that dream home pictured in your head.  Now all you have to do is find a Realtor (Kevin and Darlene of course), make your offer and move in.  Right?  Wrong.

Your first step should be to find a trustworthy mortgage professional.   But that's not the fun part, you may say. Why start with a mortgage professional?  In a nutshell, this can save money, time and increase your bargaining power.

Your mortgage lender/broker is going to be able to tell you first if you can qualify to purchase a home at all.  Second, if you are in the running for purchasing, he or she can tell you how much home you can qualify for.  Think about it.  Do you and your Realtor want to run around for a month or two worth of weekends, finally find your dream home, just to find out that you cannot afford it?  That's a lot of time, and time is money (or at least a lot of wasted weekends).  Wouldn't it be better up front to know what you can and cannot buy, zero in on that, and achieve that wonderful feeling of success? Of course.

Well, you may have already thought of all that.  However, did you realize that the seller of your dream home may give you preferential treatment if you're pre-approved?  The seller has a life too and time lines like the rest of us.  They want deals that are going to work.  They don't want their home under contract, just to have the deal fall through because the buyer cannot qualify!  So, let's say you make a bid on a house and another party makes a bid at the same time for the same amount.  The other bidder is pre-approved, you aren't.  Which bid should they accept? Obvious.  Another scenario, let's say you (not pre-approved) make a bid and another bidder bids slighter lower but is pre-approved.  Which bid would you accept?

And one last matter to cover, there are different levels of pre-approvals.  The lowest level might be called pre-qualification and this involves the mortgage professional taking your information (income, expenses, etc.), putting it all together and letting you know how much home you can qualify for based on the numbers you provide.  Another level of pre-approval is for the mortgage professional to run the loan through automated underwriting (getting more technical, here) to get an approval provided that all your info can be verified.  The highest level would be running the loan through a lender and actually doing all the verifications.  Obviously, the higher level of pre-approval gives you more to stand on and carries the most weight when bidding on a home.  In any case, your mortgage professional should provide you with a letter stating on what level you are pre-approved.

Hopefully by now the picture is clear, call that mortgage professional BEFORE starting your house search.  And maybe, just maybe, the process might even be fun.

Please don't hestitate to contact us at with all of your real estate and mortgage questions. Kevin at 215-439-5625 * Darlene at 215-439-56265 of via email at kdj@kevinanddarlenejamison.com

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Your debt-to-income ratio (DTI) is a simple way of calculating how much of your monthly income goes toward debt payments. Lenders use the DTI to determine how much money they can safely loan you toward a home purchase or mortgage refinancing. Everyone knows that their credit score is an important factor in qualifying for a loan. But in reality, the DTI is every bit as important as the credit score.

Lenders usually apply a standard called the "28/36 rule" to your debt-to-income ratio to determine whether you're loan-worthy. The first number, 28, is the maximum percentage of your gross monthly income that the lender will allow for housing expenses. The total includes payments on the mortgage loan, mortgage insurance, fire insurance, property taxes, and homeowner's association dues. This is usually called PITI, which stands for principal, interest, taxes, and insurance.

The second number, 36, refers to the maximum percentage of your gross monthly income the lender will allow for housing expenses PLUS recurring debt. When they calculate your recurring debt, they will include credit card payments, child support, car loans, and other obligations that are not short-term.

Let's say your gross earnings are $4,000 per month. $4,000 times 28% equals $1,120. So that is the maximum PITI, or housing expense, that a typical lender will allow for a conventional mortgage loan. In other words, the 28 figure determines how much house you can afford.

Now, $4,000 times 36% is $1,440. This figure represents the TOTAL debt load that the lender will permit. $1,440 minus $1,120 is $320. So if your monthly obligations on recurring debt exceed $320, the size of the mortgage you'll qualify for will decrease proportionally. If you are paying $600 per month on recurring debt, for example, instead of $320, your PITI must be reduced to $840 or less. That translates to a much smaller loan and a lot less house.

Bear in mind that your car payment has to come out of that difference between 28% and 36%, so in our example, the car payment must be included in the $320. It doesn't take much these days to reach a $300/month car payment, even for a modest vehicle, so that doesn't leave a whole lot of room for other types of debt.

The moral of the story here is that too much debt can ruin your chances of qualifying for a home mortgage. Remember, the debt-to-income ratio is something that lenders look at separately from your credit history. That's because your credit score only reflects your payment history. It's a measurement of how responsibly you've managed your use of credit. But your credit score does not take into account your level of income. That's why the DTI is treated separately as a critical filter on loan applications. So even if you have a PERFECT payment history, but the mortgage you've applied for would cause you to exceed the 36% limit, you'll still be turned down for the loan by reputable lenders.

The 28/36 rule for debt-to-income ratio is a benchmark that has worked well in the mortgage industry for years. Unfortunately, with the recent boom in real estate prices, lenders have been forced to get more "creative" in their lending practices. Whenever you hear the term "creative" in connection with loans or financing, just substitute "riskier" and you'll have the true picture. Naturally, the extra risk is shifted to the consumer, not the lender.

Mortgages used to be pretty simple to understand: You paid a fixed rate of interest for 30 years, or maybe 15 years. Today, mortgages come in a variety of flavors, such as adjustable-rate, 40-year, interest-only, option-adjustable, or piggyback mortgages, each of which may be structured in a number of ways.

The whole idea behind all these newer types of mortgages is to shoehorn people into qualifying for loans based on their debt-to-income ratio. "It's all about the payment," seems to be the prevailing view in the mortgage industry. That's fine if your payment is fixed for 30 years. But what happens to your adjustable rate mortgage if interest rates rise? Your monthly payment will go up, and you might quickly exceed the safety limit of the old 28/36 rule.

These newer mortgage products are fine as long as interest rates don't climb too far or too fast, and also as long as real estate prices continue to appreciate at a healthy pace. But make sure you understand the worst-case scenario before taking on one of these complicated loans. The 28/36 rule for debt-to-income has been around so long simply because it works to keep people out of risky loans.

So make sure you understand exactly how far or how fast your loan payment can increase before accepting one of these newer types of mortgages. If your DTI disqualifies you for a conventional 30-year fixed rate mortgage, then you should think twice before squeezing yourself into an adjustable rate mortgage just to keep the payment manageable.

Instead, think in terms of increasing your initial down payment on the property in order to lower the amount you'll need to finance. It may take you longer to get into your dream home by using this more conservative approach, but that's certainly better than losing that dream home to foreclosure because increasing monthly payments have driven your debt-to-income ratio sky-high.

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In the issue of repairing your credit, it is best to do it yourself. Most often, you may hear or see advertisements claiming outstanding credit repair services offering you legal and guaranteed solutions to your credit problems. These services may use mottos that are quite enticing to those who are in dire need of credit repair. There are even others who get easily convinced after reading authentic testimonials from several customers, who might not actually exist.

When you are really in need of credit repair, the first thing you want to do is to act immediately. You should remember that this action should be done by you and not
anyone else. Luckily, there are several factors that can help you avoid scam credit repair services.

The Fraudulence

Day after day, several companies appeal to consumers who have awful credit histories. Often, they promise to tidy up credit reports, for a price, to help
consumers loan a car, mortgage a home, or even get a job. The horrible fact is they cannot deliver; you should keep this in mind especially if you do not want to worsen your debt. These companies would only take the cost of the services with them and vanish into thin air.

The Signs of a Scam

If you had responded to a credit repair service, there are warning signs that can help you determine an authentic credit repair offer from a fraud. Firstly, be aware of companies that wish for you to pay the cost of the repair before providing any services. In addition, avoid those companies that do not divulge any possible legal rights you are entitled to and what processes you can do yourself without payment.

There are companies that advise consumers to directly contact a credit reporting agency - you should avoid such companies. More so, if the company you have
responded to suggests that you to create a new credit identity and then make a new credit report by applying for an Employer Identification Number to use rather
than you SSN, you should immediately stop contacting that company.

Lastly, those that advise you to argue all information included within your credit report or take actions that may seem illegal, i.e. generating a new credit
identity, should be avoided.

Remember that you could be prosecuted for wire or mail fraud if you use the telephone or mail to apply for credit and give information that are not authentic.
Lying on a credit application, misinterpreting your SSN and acquiring an Employer Identification Number from the IRS under false pretenses are all federal
crimes.

Most importantly, you should remember that included within the Credit Repair Organization Act is the rule that credit repair companies should not require you to
pay until the services they have promised are complete.

The best possible way to avoid poor credit history, and totally keep you safe from fraudulent creditrepair services, is to do a periodic credit report review. Reviewing your credit report is important because the information in your report affects your
chances of getting an insurance or loan. Make sure that the information is correct, complete and regularly updated before applying for a loan. Lastly, by doing periodic check-up on your credit report, you can be safe from identity theft, which can create a major problem not only in your credit report.

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