Bergen County NJ Real Estate Blog

If you’ve turned on the TV or read the news in the last few months, you have certainly heard buzz about the supposed “credit crisis” taking over America.  Tales abound of  Bergen County NJ real estate buyers being required to put 20% to purchase a home, or first-time buyers unable to find a lender to write them a loan. It seems the press just can’t get enough of all the “misery” in the Bergen County NJ real estate market.  But is this what’s really happening?  Let’s take a look at the facts:

Indeed, we are in the middle of what might be considered the biggest disservice ever perpetrated on potential home buyers.  The truth is that mortgage money is as available today as it was a year ago and loans are being made with little or no money down.  Wondering who these lenders are?  They may be right down the street – you just have to know where to look!

Federal Housing Administration (FHA) loans are making a huge impact on the mortgage industry; recent estimates show that about one out of five mortgages is an FHA loan. Although FHA loans never “went away,” their re-emergence is a result of the collapse of the sub-prime market. Although the FHA doesn’t technically require a minimum credit score, most lenders will not approve an FHA loan with a credit score below 500. That is still a far cry from the notion that an 800 score is the bare minimum for potential buyers.

Perhaps the biggest advantage of an FHA loan is that it requires only a 3% down payment. You read that correctly – 3%! Moreover, that 3% can come in the form of a gift or grant.  FHA borrowers only need to have $500 in a transaction.  On top of all this, FHA mortgage rates are as good or better than their conventional counterparts.

Extremely competitive rates, low or no down payment, and easier qualifying.  No wonder FHA is moving up the charts!

Please call me at 201-930-3070 or visit PaulaClarkRealtor.com if you would like more information about FHA loans, a referral to a reputable local lender, or help getting into your first Bergen County NJ home. You may also begin searching Bergen County NJ real estate here!

The dilemma is increasingly common: you want to retire — but you haven’t yet retired your mortgage.

According to the Federal Reserve, among households headed by someone age 65 to 74, over 32% had a mortgage on their primary residence in 2004, up from less than 19% in 1992.Going into retirement and still carrying a mortgage?  Here’s how to do it:-  If you have a heap of savings and a modest mortgage, go for the loan payoff.  You might consider trading down to a smaller home or, work part-time until you’re rid of the mortgage.
-  If you have cash sitting in, say, a money-market fund held in a regular taxable account, also consider using these savings to reduce your loan balance.  Sure, your mortgage may be costing you just 6% and the interest might be tax-deductible. But your money-market fund is likely yielding only 5% — and you have to pay tax on that income. If your mortgage is so large that paying it off will seriously crimp your retirement, you need to try to get the mortgage payment down as low as possible.

Even better, trade down!  After paying a 5% or 6% real-estate commission and paying off your current mortgage, in most cases, you could put down cash on your new home, leaving you with a smaller mortgage.  If you financed that over 30 years at 6.5%, your monthly payment would be lower.

You might even consider refinancing later in retirement, shrinking your monthly payment further by again extending the loan another 30 years.  Even with today’s tight credit standards, you shouldn’t have a problem qualifying for a new loan, as long as you have a reasonable amount of retirement income.

Thinking of retiring to Bergen County NJ?  Begin by requesting a complimentary relocation package.  Or, for more personalized service, please call me at 201-930-3070 or visit PaulaClarkRealtor.com to learn more about Bergen County NJ real estate.

Thanks to today’s tightening credit standards, you may need more paperwork than ever when applying for a new home loan.  To try to make the process less daunting, I’ve put together this list of items you may be required to bring along when you visit your lender to begin the loan application process:  (please note, all lenders are different and may require more or less paperwork!) 

Employment/Income-          Addresses of employers for two full years-          Gross monthly income, proven by last two pay stubs-          W-2’s, if available-          Proof of pensions, retirement, disability, or Social Security-          Proof of income from rentals, investments, etc.-          Proof of child support or alimony paid/received-          Self-employed: two years 1040 tax returns-          Current year profit and loss statement 

Creditors-          Each creditor’s name and type of account-          Account numbers-          Monthly payments and approximate balances-          Amount of child care expenses 

Banking-          Names of checking & savings institutions-          Account numbers and current balances-          Last two months bank and savings statements 

Miscellaneous-          List of assets in stocks, bonds, land-          Life insurance cash value-          Social Security numbers for all parties-          Veterans: Certificate of Eligibility & DD-214 or Statement of Service-          Divorce Decree and/or Separation Agreement if applicable-          Child support documentation if applicable-          Bankruptcy papers if applicable 

This may seem like an unreasonable amount of work to have to do on your part just to apply for a home loan.  But imagine if you were about to lend hundreds of thousands of dollars to somebody – you’d probably want a pretty good idea of that person’s ability to pay you back! 

Please click here to download TripleCalc software that will allow you to compare three mortgages at one time.  You can also visit my website or email me to learn more about