Written by Phoebe Chongchua on Thursday, 23 January 2014 1:13 pm

For many people, the American dream of owning a home is exactly that: a dream. The housing crisis, the high unemployment rate, increasing debt, and tougher restrictions on mortgage qualifications, make it seem like Mission Impossible, especially for generations like Gen Y. The millennias, as they’re also often called, are referred to as the group born between the mid-seventies to late nineties.

While this group came of age during turbulent economic times, homeownership is still a priority to them. It may, however, seem that factors are stacked against them. This group tends to be well educated – many went to college — and also have an entrepreneurial spirit that makes them creative with their money.

But for Gen Y, if they want to achieve the American dream, a few critical steps will pave the way to the road to homeownership.

Get a handle on debt

Get a handle on debt. This generation likes the idea of being their own boss, working from home, tele-commuting or “sidepreneurism”, the term used for people who start their own side business while still working full-time. They can be very creative in developing money-making jobs with the Internet and start-ups are often part of their dream job. However, sometimes these starts-ups are funded with only their own credit cards, which can rack up a considerable amount of debt. If the company is profitable all ends well but if not, they may be strapped with that debt which makes it very difficult to save for a home. Plus much of this generation has student loans and debts that they’re still paying off.

Like anyone interested in buying a home including homes for sale in Napa Ca, focusing on reducing debt will help prepare them to qualify for a mortgage. When possible, cutting back on major expenses is a good way to start saving for that home.

For the first time, people are keeping their cars longer than ever. Many people are opting to continue with repairs and maintenance rather than have a monthly car payment. This can be an excellent strategy to help save money as long as the repairs and gas money on the older car don’t equal more than a new car payment and cost of gas, registration and insurance. A newer car will have a higher vehicle registration fee but also, at least initially, fewer repair expenses and it will likely get better gas mileage.

Other ways Gen Y can saveare to cut the cable and home telephone cords. This can save more than $100 a month. This generation grew up with the use of computers and electronics. Many see no real need for cable or even Internet at home. Their offices are often coffee shops that offer free WiFi. They often use their smartphones and cellular data packages to watch shows and get the news. A home phone has become obsolete for many because they simply use their cell phones. Cutting household utility expenses such as these can end up saving them hundreds of dollars a year.

Save Save Save

Still others are renting rooms out or even renting out their furnished homes when they travel for work or play. Using sites that advertise for short term rentals, some in this generation are finding they can make a little extra cash by having a roommate or placing their furnished home for rent, even for a short period such as a couple of weeks when they’re away. And, of course, some are moving back home with their parents to save up for that downpayment. The more they can save, the better prepared they’ll be to achieve the American dream of home ownership.

Four Ways Government Shutdown Impacts New Mortgages

MortgagesFour Ways Government Shutdown Impacts New Mortgages

Story by Realtor.com

Mortgage rates are sliding as October gets rolling, but will rates – and the entire mortgage market – be sidelined by the U.S. federal government shutdown?

For the record, 30-year fixed mortgage rates fell to 4.32% for the week of September 26, 2013, down from 4.50% on September 19, according to data from Freddie Mac.

Under normal conditions, homebuyers would be leaping off the fence to grab lower mortgage rates, but with the shutdown, there’s enough uncertainty in the air to keep mortgage consumers on the sideline until Uncle Sam is open for business again.

Some of that uncertainty over the mortgage market and the government stoppage is linked to facts on the ground, and some is closer to fiction.

Watching the markets, mortgage rates for Napa Valley Real Estate did waver a little but we didn’t see massive movement some expected. This shutdown does come at an especially bad time as new home sales and home construction are building back up. More uncertainty is not what we need.

With that uncertainty as a backdrop, let’s clear the air and point to four ways the shutdown really does impact the mortgage market:

1) Lower rates may be due to the shutdown – By and large, mortgage rates move with the direction of the economy. If banks and mortgage lenders think the economy is slowing – as it likely will under a prolonged shutdown – they will lower rates to attract more business.

In fact, rates remain fairly unscathed at this point, although there is an upward bias,” says Bob Van Gilder, a mortgage broker at Finance One Mortgage. “There may be some bumps in the road as the I.R.S. and the Social Security Administration have limited services, which will affect the mortgage process. But if you are being offered a rate that is attractive to you take it. You can’t lose by being able to sleep at night.”

 Impacts on New Mortgages

2) FHA loans will be affected – If you’re a consumer waiting on a Federal Housing Administration (FHA) loan, you could be out of luck for now. In fact, approved mortgages will certainly be slowed while the FHA is shut down, even as it provides other services to the public.

The reason is this. With any FHA loan, mortgage services firms have to order a FHA case number, prior to an appraisal on the home. With the FHA’s lights out, those case numbers can’t be processed. Expect that process to take longer with fewer hands on deck.

3) I.R.S. documents out of reach – Another consequence of the U.S. government shutdown is the inability of mortgage firms to verify a borrower’s income via his or her U.S. tax returns. By law, any mortgage loan approval is subject to the review by the mortgage lender of at least one year’s worth of federal tax returns, and must be verified by the I.R.S. through a 4506 Transcript. With I.R.S. staffers at home, that process is stalled as tax agency workers would be unable to verify tax return documents.

Some industry experts say the damage here may be minimal, depending on the size of the lender.

“One of the biggest impacts to the mortgage market is that the ability to obtain a 4506 and Social Security Number Verification has been halted,” says Jason Auerbach, an LPO manager at New York city-based First Choice Bank/Lending. “The 4506 IRS Transcript is verification from the IRS that the income documentation, specifically tax returns, provided by a client match with what they filed.” Auerbach adds that the 4506 mandate does not impact lenders who are selling loans directly to Fannie Mae so many of the large lenders will see little disruption. However, smaller lenders who sell adjustable rate mortgages to investors may have to halt that lending,” he says.

4) A weaker U.S. housing market – The U.S. Housing and Urban Development, which runs the Federal Housing Authority, only has 337 out of 8,709 managers and staffers on the job this week. The longer that HUD is blacked out, the more potential problems for the U.S. housing market.

“If the shutdown lasts and our commitment authority runs out, we do expect that potential homeowners will be impacted, as well as home sellers and the entire housing market. We could also see a decline in home sales during an extended shutdown period, reversing the trend toward a strengthening market that we’ve been experiencing,” HUD said in a recent report, entitled HUD 2013 Contingency Plan for Possible Lapse in Appropriations released last week (find it at http://portal.hud.gov:80/hudportal/HUD , under “Featured News.”

HUD does report that essential services, like HUD homeless assistance grants, housing services for veterans and housing for disabled people and AIDs patients will continue running.

The birds-eye view?

The mortgage market should largely remain up and running during the government shutdown, and homebuyers may even get a bonus, if mortgage rates keep falling while government agencies are shuttered.

By no means it is a perfect scenario, but for homebuyer, sellers, and real estate professionals, it’s certainly a survivable one.

Government Shutdown Impacts New Mortgages

The Financial Perks of Home Ownership


Staged & Sold, Sell Your Home Like a Pro

Getting Your Home Sold

The Ripple Effect of Buying and Selling a Home

The Ripple Effect


Save Big With Shorter-Term Loan

Learn how you can save big with a shorter-term loan. The chart below shows how you can pay less on your interest if you pay just a little more each month on your loan. Chart from C.A.R.

One Cool Thing

California Home Prices Increase

PricesCalifornia Home Prices Increase

California home sale prices came close to a 4-year high in July, with the pace of sales year-over-year growing for the fourth month in a row, the CALIFORNIA ASSOCIATION OF REALTORS® reported.

Making sense of the California Home Prices increase

  • The median home price in July for an existing single-family home was $333,860 last month, up 4.2 percent from $320,540 in June and nearly 13 percent from a year ago, when the median home price in California was $296,160.
  • July’s median home price was the highest since August 2008, when it was $352,730.  July also marked the fifth consecutive month that the median price increased month-over-month and year-over-year.
  • Sales in July rose to an annualized pace of 529,230 homes, an increase of 15.3 percent compared with last July.
  • California’s housing inventory including Napa Real Estate was nearly flat in July, with the index of existing, single-family homes at 3.4 months compared with 3.5 months in June.  However, July’s inventory was down from a revised 5.6-month supply in July 2011.  The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate.  A 7-month inventory is considered normal.


Not only have California Home Prices increased in the last year. Just this January Napa County home prices increased by 14% compared to last years January sales.

Napa County Stats

California Home Prices Increase

California Home Prices: A History



A Brief History of California Home Prices from CAR.org


Jamie Johnson Cook Elected Secretary of Napa Chapter

IMG_2741Congratulations Jamie!

Born and raised in the Napa Valley and licensed as a REALTOR® since 2005, Jamie Johnson Cook of Heritage Sotheby’s International Realty has been elected for a third term as Secretary of the Napa Chapter of NorBAR.

She obtained her Bachelor’s Degree in Business Administration from Sonoma State and became a certified HAFA Specialist in 2010.

Eliminating The Mortgage Deduction Is Foolish


Eliminating The Mortgage Deduction is Foolish


Congress, as part of negotiations on avoiding the “Fiscal Cliff,” has made direct references to “closing loopholes” and “limiting deductions” as a way to raise revenues.  Clearly, the mortgage interest deduction is high on this list of revenue raisers.

Losing the Mortgage interest deduction will disproportionately affect the middle class because a larger proportion of the middle class takes the deduction. In California 89% of those who took the mortgage interest deduction earned less than $200,000.  Losing the deduction would cost the average California taxpayer over $3,900.


What You Can Do To Help Keep the Mortgage Interest Deduction:

Call Congress.  First and foremost, we are urging the public to get involved by calling Congress to ask that the mortgage interest deduction be preserved. The public may reach Congress by calling 202-224-3121.  The Capitol switchboard operator will help callers identify their member of Congress and connect them.

Get the word out.  Many people seem to be blissfully unaware that their mortgage interest deduction is in danger.  Please help spread the message.

Link to the following web page: www.KeepTheMID.com . This site has information about contacting Congress, more information on the MID and links to articles.

Eliminating The Mortgage Deduction Is Foolish


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