Thursday, September 13, 2007

It's a Great Time to Find Your Dream House

Many factors have come together in recent weeks making now a great time to find your forever home:
  • Rates have dropped creating an opportunity to lock into a 30 year loan at historically low interest rates.
  • Moving your equity to a more stable location can help protect your current investment.
    The Bay Area should escape worst of the states economic slump. "Real estate losses in the Bay Area will not be that bad, and the rest of the economy should be doing pretty well," Ratcliff said. "The Bay Area is positioned to do better than the rest of California for the next few years."
Real estate is cyclical. In the past, the market has repeated in roughly five year cycles (the recent 9 year up cycle is historically unusual, which could indicate that we are over due for a correction.) This could be a predictor that the market may be at the beginning of a five year downward trend. Desirable neighborhoods in Albany, Berkeley, Kensington and Oakland have held relatively steady during past downward trends.
  • For the sake of your investment, real estate agents recommend holding a property for a period of longer than five years. Purchasing a home that can meet your long terms needs will minimize any short term shifts in the market. The market traditionally responds to cyclical downturn with five years of rebound and gain.
  • Competition has decreased as some buyers sit back and wait for the market to declare itself. Decisive buyers have the advantage. Although prices have not dropped in desirable locations, prime properties in prime neighborhoods are available without the heartache of multiple offers. Your odds of being able to purchase the first house you fall in love with have increased.

Wednesday, September 12, 2007

Refinance or New Purchase: What You Need Today to Get a Good Loan

Mortgage rates have fallen with the expectation that the Federal Reserve will lower the federal funds rate when they meet on September 18th. This has increased the number of applicants looking to refinance and apply for new purchase loans. Rates are good, but qualifying for the best rate is more difficult during the current mortgage crunch. Banks are understandably a bit shell shocked from the recent melt-down in the sub-prime market. This will result in a pendulum effect and a conservative approach to evaluating borrowers. Proceeding with caution is a good thing. Let's learn from past mistakes and move forward. For those looking to take advantage of the good rates, here is what it takes to impress a lender:
  • A Good FICO Score. Improve yours today with simple tips from our past post: Fix Your Credit...

  • A Sizable Down Payment. Most loans now require at least 10 percent down, and lenders prefer 20 percent down.

  • A Reputable Mortgage Broker. A good lender can increase your odds. Walking into your local bank branch may seem like an obvious approach to securing a home loan. However, your bank will have limited products available at any given time. Conversely, a good mortgage broker can shop your assets through multiple sources and help find the best program available for your situation. Reputation is important because you don't want to be disappointed if promises are not kept. Call your real estate agent for a reliable recommendation.

  • Verifiable Income. Lenders would like to see at least two years of documented income. Self-employed individuals can still get financing, but rates may be higher.

  • Patience. As banks take a more critical look at their borrowers, it may take longer for approval. Gather all the paperwork, and then realize that you may have to wait.
  • A Backup Plan. Some well-qualified buyers were disappointed recently when their lender unexpectedly pulled the plug.
  • A Dependable Real Estate Agent. A good real estate agent can help coordinate the pieces and keep your escrow on track.
Research source for this article: Dow Jones Business News (09/03/07)

Tuesday, September 4, 2007

This Old "Green" House - An Environmentally Conscience, Period Sensitive Kitchen Remodel

Modern sensibilities are easily honored and reinterpreted with today's "green building" materials and techniques. Eco-friendly materials such as recycled glass, cork and bamboo look great in a mid century or contemporary homes. But, is it possible to do a sensitive restoration on a historic home and still inject green practices? Although there is always more that could have been done, here is how we met the challenge during a recent kitchen remodel:

  1. We installed low formaldehyde insulation while the walls were open to increase the rooms energy efficiency and minimize off-gassing. We also opened up the floor plan through the mud room; with a screen door on the far end, a casement window (which cranks out to capture bay breezes) in the middle, and large opposing crank windows ( equipped with simple shades rated to block heat and UV rays) at the table end. This increases cross ventilation through the kitchen which is sufficient to cool the room sans air conditioning in the Summer.
  2. We purchased formaldehyde free solid wood cabinetry: No off-gassing and durability for a longer useful life.
  3. We Installed recycled oak floors (purchased from a demolished barn) and used low VOC water-based stains.
  4. We strove for a "forever" kitchen by choosing finishes with longevity in mind and honoring the original architecture over current trends. Appliances were the exception because they tend to have a serviceable life that is relatively short, and we expect they will need to be swapped out at some point. Modern appliances also help a historic kitchen appeal to a wider audience.
  5. We looked for energy star ratings on all appliances. Ranges do not appear on the list because there is no agreement on what to test. We bought a high-end range top, because its longevity will likely out serve all the other appliances in the kitchen. Also consider whether a new appliance will make you a better cook, or if the manufacturer of the appliance is just selling you the idea that it will make you a better cook. We opted not to have any fancy warming drawers or wine refrigerators that use extra energy.
  6. For the most part, we used florescent lighting for all task and overhead illumination. We cheated a bit, and used two incandescent fixtures as accents over the sink and table (but they get the least amount of use.)
  7. Our counter tops are marble with a low-VOC sealant done by Green Envirotek. This isn't a super green surface, but we hope they will go the distance in our "forever kitchen." The new earth friendly sealants take away most of the maintenance issues and the marble can be re-polished down the road to bring back its original luster. Marble also gets extra points for its timeless beauty.
  8. At the prep sink, we opted for a roll-out composting bin instead of a garbage disposal. The main sink accommodates both trash and recycling bins.
  9. Every project has its concessions: I started a search for recycled glass for the back splash along the range wall. I fell in love with an Ann Sacks, Glace tile, which is not made of recycled glass instead. I like how the hand made quality of the tile speaks to a home with history, and the shape feels reminiscent of old subway tiles. Later, I found a 100% recycled alternative at Bedrock Industries, BlazeStone Tile. Too late for me to mend my ways, but maybe this can benefit someone else.
  10. Recycling gave history to some of the room's accessories. The artwork is old crate labels that we found at an antique shop and the kitchen chairs were re-purposed from an old dining room set.