Voters united over homeownership

Voters ranked home ownership just below being successful at their jobs and slightly more important than the ability to pay for their own education or the education of a family member.

by Broderick Perkins
© 2011 DeadlineNews.Com

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Deadline Newsroom - The message American voters recently sent to legislators in Washington D.C. is pretty clear: "Don't make home ownership any more difficult than it already is."

Voters who are homeowners free-and-clear, voters who are homeowners owing more than their home is worth, voters who rent and voters who still live with parents, by and large, all want to own their own home.

A recent National Association of Home Builders' survey, jointly conducted by Republican Party-leaning Public Opinion Strategies and the Democratic Party-leaning Lake Research Partners reveals the vast majority of respondents, 74 percent, said home ownership was "very important" or "one of the most important" goals in their lives.

They ranked home ownership just below being successful at their jobs and slightly more important than the ability to pay for their own education or the education of a family member.

A full 94 percent of respondents ranked owning a home as at least "somewhat important."

"Despite the current housing downturn, Americans still see home ownership as a core value and a key building block of being in the middle class and creating strong jobs in their communities," said Celinda Lake, president of Lake Research Partners in a prepared statement.

"The bipartisan consensus outside the Beltway is that owning a home remains an essential part of the American Dream," she added.

The survey found:

• More than one in three (36 percent) said a home is their most valuable investment followed by 33 percent who said a retirement savings program was their top investment.

• When asked if owning a home is the best long-term investment they can make, even with the ups and downs in the housing market, 75 percent "strongly agreed" or "agreed" the purchase is worth the risk, compared to 23 percent who "strongly disagreed."

• When asked if owning a home is the best long-term investment they can make, even with the ups and downs in the housing market, 76 percent of voters who have a mortgage strongly agreed or agreed. The same was true for 81 percent of those who own-outright; 67 percent of renters; 72 percent of those who don't pay a mortgage and 65 percent of homeowners who owe more than their home is worth.

• There's also strong agreement to the statement over age groups. When asked if owning a home is the best long-term investment they can make, even with the ups and downs in the housing market, the "strongly agree" or "agree" came from 73 to 79 percent of age groups 18-34; 35-54; 55-64 and 65 and up.

• Ninety-five percent of all homeowners are either "very happy" or "happy" with home ownership. Among homeowners "underwater" (owing more than their home is worth), 83 percent are "very happy" or "happy" with their choice to own.

• Also, in light of recent legislative and regulatory moves to mandate mortgage down payment levels, voters said the greatest barrier for those who want to own a home is the down payment (31 percent); job uncertainty (21 percent); credit score (16 percent); inability to get a loan (11 percent); current personal debt (9 percent); concerns that if home prices drop, the home investment would be worth less than the purchase price (8 percent).

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The cost of living in your own SF Bay Area home

Sustainable uses for empty car lots

There's more to buying a home than just the purchase price. Fortunately, everything is negotiable. There's a lot to negotiate when it comes to buying a home in the San Francisco Bay Area.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - The median home price in the San Francisco Bay area was down to $350,000 in May, nearly half the peak median of $665,000 back in July of 2007, but the cost of living in your own home still isn't cheap.

There's more to buying a home than just the purchase price.

Everything in real estate is negotiable, but here's what you can expect to pay.

Down payment

Most mortgages available today require a 20 percent down payment — $70,000 based on the median price from the San Diego-based MDA DataQuick real estate information service. The median includes new and resale houses and condos.

FHA, VA, other federal, city and state government programs can get you in the door for less down — zero, 3.5, 10 percent — depending on the program.

"There are lots of incentives for new homes, but for resales, the incentives just aren't there," says Julia Truesdale Keady, president of Silicon Valley Association of Realtors, based in Cupertino.

Interest rates

In late June, interest rates averaged 5.4 percent, according to Freddie Mac. The rates include about one point. Each point is 1 percent of the purchase price — $3,500 on the median priced Bay Area home.

"When I quote rates, they will include fees [points] to get that rate," says Quincy Virgilio, president of the San Jose-based Santa Clara County Association of Realtors.

He also says some rates are as low as 5 percent (plus a half to a full point) for loans no bigger than $417,000.

Property taxes, HO insurance, HOA dues

Expect to advance pay some property taxes and homeowner insurance premiums.

Otherwise, you'll have to document you've socked away enough to cover the cost for a few months.

Throughout the Bay Area, annual property taxes are typically about 1 to 1.25 percent of the home's purchase price.

Insurance will set you back an additional $50 to $100 a month. Higher deductibles and discounts net lower premiums.

Monthly HOA dues (paid by residents of common interest developments (CIDs) such as condos, townhomes, etc.) vary from property to property, but average about $400 a month for a $500,000 unit in Palo Alto, says Keady, also a real estate agent with Alain Pinel in Palo Alto.

Upkeep, maintenance

Keady says because monthly dues help pay for the CID's upkeep and maintenance, that amount is a good target for single-family homeowners budgeting for upkeep.

Richard Calhoun, broker-owner of Creekside Realty in San Jose, disagrees. He says only half of HOA dues go to upkeep. The other half pays for management. That means single-family homeowners who mange their own home can get by for less.

The final figure is property-dependent and based on the home's age, condition, wear and tear and other factors.

"Some people are harder on homes than others," says Virgilio, who is also a mortgage broker and owner of Realty World CA Property Network and Mortgage Network, both in Campbell.

Transfer fees

City property transfer fees vary widely from city to city and range from as little as $0.55 per every $1,000 of the sales price in many San Mateo County cities, to $3.30/$1,000 in Santa Clara County cities of San Jose and Palo Alto, to as much as $15/$1,000 in Berkeley and Oakland in Alameda County.

Bay Area counties also charge an additional transfer fee, typically $1.10/$1,000 in each county. Who pays the fee is determined by local customs, but buyers typically pick up some of the cost.

Additional fees

How much more the buyer pays in settlement fees varies based on local custom and the sales contract. Fees include title and escrow costs, additional loan and documentation fees, appraisal, home inspections and others.

Calhoun says have an extra 1 percent, plus $2,500 or more for additional settlement fees.

For the full list of possible costs of buying a home, see the HUD-1 Settlement Statement.

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© 2008 DeadlineNews.Com

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Get "News that really hits home!" for your Web site or blog from the DeadlineNewsGroup.Com.

You are reading a sample of "News that really hits home!", now available from several beats and published in a growing number of locations.

Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Perkins is also the first Examiner to cover three beats for the Examiner.com news service:
• National Offbeat News Examiner
• National Consumer News Examiner
• National Real Estate Examiner

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Deadline Newsroom FAQ 9108

When you have questions needing answers that really hit home, contact the Deadline Newsroom. This installment: home buying timing; getting the best mortgage; home ownership costs.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - Q: The market is flat, prices are falling in some communities. Should I buy a home now or wait?

A: Don't base your home purchase decision solely on market conditions.

It can be profitable if you can buy low and sell high, but home buying is more than an investment. There's also the tangible aspect of a roof over your head. Buy a home right now to live in for a decade or more and not only will you stop dropping rent into a black hole, chances are you'll also enjoy some appreciation and numerous tax benefits along the way. Buy a home in a soft market and expect to flip it for a profit in six months to a year and you could lose your shirt. And there are a lot of potential outcomes in between.

Home buying is a very personal decision. Buy a home based on your financial ability, lifestyle needs and personal goals. Check your credit, shop around to see what's available and what you can or cannot afford and get professional help from mortgage and real estate experts to help you make a sound decision.

It's not always a good time to for you, as an individual, to buy. You have to decide when it's a good time for you to buy.

Q: Money is tight. Underwriting terms are tough. How can I be sure I have the best mortgage I can get?

A: Three tips.

1) Examine your credit report. You need to know how creditworthy you are before the lender discovers how creditworthy you aren't. You may have some credit cleaning up to do. The better your credit and the higher your credit score the better your position to negotiate for the lowest mortgage cost and the best terms. Your report, one from each of the big three credit reporting agencies -- that's three reports each year -- is available from AnnualCreditReport.com.

2) Shop around. Shop lenders, brokers, credit unions, your bank or financial company, as well as federal, state and local government home loan programs. Compare all the numbers of every loan program you consider. Use the Federal Deposit Insurance Corporation's (FDIC) "Mortgage Shopping Worksheet" to conveniently make that comparison.

3) Get independent, professional help, counseling and education from a mortgage or home buying counselor who has no stake in your mortgage or home purchase. You want to both educate yourself about the home loan process and get assistance in determining which mortgage best fits your financial status, lifestyle and home owning goals. ACORN.org; NeighborWorks, your local housing or social services department and other recognized agencies can get your steered in the right direction.

Q: What costs are included with home ownership?

A: Home ownership costs begin with financing costs -- your down payment, mortgage points, fees, commissions and other costs associated with writing your mortgage, as well as title and escrow costs and fees. See the HUD 1 Settlement Sheet to learn about mortgage and title and escrow fees.

You lender may also require that you have sufficient savings or financial holdings intact after you sign for your mortgage. The lender wants to make sure you aren't stretched too thin after you buy a home. The next costs are in your regularly monthly mortgage payment which likely will consist of a payment against the principal and interest on you loan. You can include in your monthly payment (and should if have a difficult time budgeting) or pay on your own homeowners insurance and property taxes.

Additional costs are associated with the upkeep of your home -- maintenance, repairs, landscaping, home improvements, alterations and additions.

Got questions? Send them to news@deadlinenews.com. We'll do our best to get you the most relevant answer.

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the new Deadline Newsroom, DeadlineNews.Com's news back shop. In both cases, it's where all the news really hits home.

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