http://www.adrianawillis.realtor/

Rosamond Real Estate, Quartz Hill, CA (2026)

02/10/2022

Impound Accounts Explained
WRITTEN BY DAVID REED

Impound Accounts Explained
Impound accounts, sometimes referred to as Escrow accounts in various parts of the country, are funds set aside to take care of property taxes and insurance when due. Some loans require impound accounts while others leave them as an option. Let’s take a closer look at these accounts and what they accomplish.

Mortgage lenders need to make sure property taxes are paid. That’s pretty simple. Unpaid property taxes can lead to a taxing authority to begin foreclosure action to force the sale of the property and pay off the unpaid taxes. That’s why lenders want to be assured property taxes are paid because property taxes are considered a superior lien to a mortgage or home equity loan. In the case of a foreclosure, the taxes are paid first then the remaining amounts go toward paying off the existing mortgage.

To provide an additional degree of protection, impound accounts are set up. With an impound account, as each mortgage payment is made, so is a monthly installment for property taxes and insurance. These monthly amounts don’t get sent to the taxing authorities each month or the insurance agent but accrue in separate accounts. There are property tax impound accounts and insurance impound accounts.

When the property taxes come due, the accrued funds are then delivered to pay the taxes, assuring the taxes are paid on time. The same occurs with an insurance impound account. When the insurance policy is up for renewal, the funds are released to the insurance agent.

Impound accounts can be required or optional. Loans that require impound accounts are government-backed mortgages. Government backed mortgages are VA, FHA and USDA programs. For loans where the first mortgage balance represents more than 80% of the sales price of the home, impound accounts are required. These are not optional for the borrower. Individual states may also impose additional standards. For loan amounts that are less than 80% of the value, impound accounts are an option.

If you have an option, should you set up impound accounts? That’s really up to you. Some homeowners would rather pay the property taxes and insurance when do on their own. Doing so keeps the homeowner’s funds in their checking, savings or investment accounts. The homeowner then pulls out the funds to pay taxes and insurance.

Finally, homeowners can have the option of cancelling impound accounts at some point in the future with conventional loans. With VA, FHA and USDA loans, there are no such options, impound accounts are required for the life of the loan. In order to cancel impound accounts with a government-backed loan, the existing loan must be refinanced into a conventional mortgage yielding sufficient equity to allow for the cancellation of impound accounts.

Like many other aspects of a conventional loan, lenders can have different protocols when it comes to impound cancellation guidelines. If you think you are eligible to have impound accounts cancelled, you’ll want to contact your lender and get the proper information on their process for impound account removal.

01/07/2022

Tips For Getting Your Home Sold In The Winter
WRITTEN BY JAYMI NACIR

So you've decided to list your home this winter. Perhaps you've had a job change, need to relocate out of the area, or have financial or family reasons for moving. No matter what is driving the move, you may be concerned about selling at this time of year. But just because you missed the boat on the spring selling season doesn't mean you can't get your home sold quickly, and for a profit. A few tips can help get it moving.

Take photos early... or late
If you can take photos before the trees become barren and the grass goes dormant, do so! The last thing you want is for your home to look blah and depressing in photos. If you can capture a snowy day (with perfectly scraped walkways, of course), that works, too. It never hurts to have your home looking like a winter wonderland.

Go easy on the holiday décor
"Deck the halls, but don't go overboard," said HGTV. "Homes often look their best during the holidays, but sellers should be careful not to overdo it on the decor. Adornments that are too large or too many can crowd your home and distract buyers. Also, avoid offending buyers by opting for general fall and winter decorations rather than items with religious themes."

Always mind your curb appeal
Just because it's winter doesn't mean you can let things slide out front. Potential buyers won't give you a pass on chipping paint, a fence that needs repair, or a front door that's seen better days just because it's frigid outside.

Safety matters
Shoveling the walk from the street to your home is necessary to make it reachable, make it inviting, and also make it safe. The last thing you want is a slip and fall that could result in an injury, and a lawsuit. "Continually shovel a path through the snow, especially if snowflakes are still falling," said the balance. "Footprints on freshly fallen snow will turn to ice if the temperature is low enough, so scrape the walk. Sprinkle a layer of sand over the sidewalk and steps to ensure your buyers' stable footing. Remember to open a path from the street to the sidewalk so visitors aren't forced to crawl over snowdrifts."

Get a good indoor mat
Perhaps you never use a mat for indoors or yours is grubby or tattered from 10 straight years of winter wear. This one super easy move may not be noticed by visitors - but it sure will if it's missing or not in good shape. Little things like a $10 mat can give buyers the impression that your whole house is well cared for, or just the opposite.

Clear the front door clutter
If you live in a climate where there is likely to be snow or rain, there are a few more steps you'll probably have to take in order to keep your house looking great inside. How does your coat closet look? If it's stuffed with jackets, scarves, boots, and gloves, relocating some to make room for potential buyers to put their stuff away while touring your home is a good idea - plus, a tidy coat closet gives the impression that there is plenty of storage space in the home. It goes without saying that winter wear and shoes that tend to stack up in the entry should be banished while your house is on the market.

Make sure everything is functional
Imagine you live in a climate that stays relatively temperate year-round, and then you have a cold spell. You turn on the heater for the first time the night before your first showing, and…nothing. Same for the fireplace in the living room. Your freezing cold house is probably not going to make a great impression on buyers. As soon as you decide you're going to sell your home, go through it room by room, checking all major appliances and home functions and looking for little things that may escape notice on an everyday basis - cracked light switches, chipped baseboards, light bulbs that need to be replaced - so your home is perfect for showings.

Light it up
Shorter days with earlier sunsets limit the amount of natural light in your home. Turning on all the lights before showings is more important than ever. Think about the exterior when it comes to lights, too. If you only have a porch light, you might want to consider adding some landscaping lighting, which will help accentuate your outdoor space.

Listen to your REALTOR® when it comes to price
Will you be able to command top dollar for your home and get the same price you would have had you listed in spring or summer? That depends on so many things, including your neighborhood, the available inventory, the condition of the home, and, of course, your listing price. A trusted real estate agent will take all mitigating factors into consideration and use comparables in your area to develop a pricing strategy.

When it comes to offers, remember this tidbit from Realtor.com: "Just because your home's on the market during the slow, chilly months doesn't mean you have to accept a lowball offer. If you make your home attractive in all the right ways, qualified buyers will come."

12/21/2021

When Does It Make Sense to Use Your Home’s Equity?
WRITTEN BY ADMIN

Housing prices continue to rise significantly, with median home prices soaring past $400,000 for the first time. Housing prices have been going up for eight years. This means if you’re a current homeowner, you might have a significant chunk of equity in your home.

When does it make sense to use that equity and put it to work, particularly since interest rates remain low?

The Benefits of Using Equity Now
There are some economic factors outside of your personal situation that could make now a good time to use your home’s equity.

• Mortgage rates are historically low, meaning it’s cheap to borrow money right now. You could end up taking equity out and then earning a lot more than you would pay in interest on a mortgage. Since rates are low and you can lock in your rate for an extended period, you might not see your mortgage rates increase, if at all.

• Inflation is going up at near-record paces, and that makes the idea of fixed-rate debt pretty appealing. If you get a fixed-rate mortgage for 30 years, your payments will be cheaper in real dollars.

• When you have borrowed equity, the interest is tax-deductible, and it’s tax-free.

• If you use the equity in your home, you’ll have liquidity, so you can take advantage of opportunities as they might arise.

Are There Risks?
Some risks can come with taking the equity out of your home as well.

For example, if you already have a high debt-to-income ratio, taking on more debt is never wise. If your income is at risk, you should avoid taking on new debt as well.

How Do You Know Where to Invest?
If you want to take equity out of your home, the goal is that you’re earning more than the interest rate on your loan. There are a lot of ways you can do this.

For example, you could invest in the stock market or a real estate investment trust (REIT).

Other financially wise ways to invest the equity in your home include:

• To secure a stronger financial future, you might consider tapping into your home’s equity to pay off high-interest-rate debt. For example, if you have a credit card with a 16% interest rate, and you get a loan with a 3.5% interest rate, you’re going to get yourself out of debt faster, and you’re going to reduce what you’re paying in interest significantly.

• Investing in real estate can be a smart way to use your home’s equity. For example, you might use the money from your home equity to then put a down payment on a rental property.

• Starting a business is a way to invest in your future, although it’s risky.

The goal, if you’re considering now as the optimal time to tap into your equity, is to invest in something that’s going to generate income. You want to pay back your loan with income so that you grow your wealth for the future.

11/24/2021

What If You’re Priced Out of Buying a Home?

WRITTEN BY ASHLEY SUTPHIN

First-time homebuyers are facing a serious problem when it comes to buying a house. While the acceleration may be cooling somewhat, there are still record-breaking rises in home prices. Recent data shows for the first time in the U.S., median home prices surpassed $400,000.

Several factors are likely to continue this trend. There are a lot of motivated buyers, limited housing supply and low mortgage rates. Inflation is pushing prices up for essentially everything, including homes. Low mortgage rates allow buyers to buy more than they would be able to ordinarily, so they can get involved in heated bidding wars.

Sellers are also staying put because they don’t want to jump into a highly competitive buying market, limiting the supply of available homes even more.

Homebuilders can’t get the materials they need, and even if they can, there’s a labor shortage.

Where does this leave first-time buyers or any buyer?

What Does It Mean to Be Priced Out?
If you’re priced out in the real estate market, it means that you can’t afford even an entry-level home. There are often a number of factors that can lead first-time buyers to be priced out, many of which are converging with one another right now.

If you’re trying to buy a house right now, you probably notice the down payment you worked hard to save isn’t going as far as you planned. If you saved 20% of the expected price you prepared to pay for a house, that might no longer be sufficient.

So, what can you do?

You might think automatically you should keep renting, but rent prices are going up because of inflation as well, while wages aren’t keeping up, so this isn’t the ideal option.

There are a few things you can do, and none of them might feel ideal, but your options are limited when you’re priced out.

Save More
If you live in a market that’s not affordable for you right now, you may need to keep renting and adding to your savings. This does also allow you to wait out the market somewhat. You may need to be patient because it could be a couple of years before you’re able to re-enter the marketing successfully.

As you’re thinking about what you can afford, it’s better to base it on your monthly expenses rather than the sales price.

If you are setting more money aside and you’re going to try and wait out the market a bit, don’t just put it in a standard savings account. You may need to put at least some of your savings into riskier but more high-earning options like stocks.

Change Your Expectations
Another option you have available when you’re otherwise priced out of the market is to change your expectations. With limited inventory and all the other factors going on in the market right now, you may have to give up a few things on your wish list, or maybe more than a few.

You could end up buying a fixer-upper that’s more in line with your budget.

For first-time buyers, being humble is key to getting a home in the current environment.

Broaden Your Home Search Geographically
Just like you might need to give up on some of your wish list as far as home features, you might also want to broaden the area where you’re looking geographically. There can be considerable differences in the price of homes from one neighborhood to the next or one suburb to the other.

Many people aren’t just moving out of urban areas to be able to afford a home—they’re changing cities altogether. For example, residents of expensive locations like New York and San Francisco are moving to more affordable cities like Austin and Atlanta.

Hire a Great Real Estate Agent
Finally, if you don’t already have a great real estate agent on your side, it would be nearly impossible to navigate the current market as a first-time buyer without getting one. Even if you can find a home you’re able to afford, you may be facing stiff competition.

Real estate professionals know about properties before they go on the market, so you’ll have an edge there. They’ll also be able to help you understand your local market so you can adjust your expectations as needed.

A real estate pro can negotiate on your behalf and cut some of the stress out of the experience for you.
It’s not an easy time to buy a home, but that doesn’t mean it’s impossible. You might wait it out, or you could shift your approach and strategy a bit.

10/20/2021

Are Home Improvements Tax Deductible?
WRITTEN BY ASHLEY SUTPHIN

There are tax implications of making home improvements, but only in specific situations. When it comes to your taxes, a home improvement might include any work done that increases the value of your home substantially, improve the useful life of the property, or creates new uses.

We’ll get more into what that means specifically below.

Home Improvements vs. Repairs
First, the money you spend on your home in terms of taxes can be divided into improvements and repairs.

The cost of capital improvements can be added to your tax basis in your house. Tax basis is what’s subtracted from the sales price to figure out how much your profit is. With that in mind, you can only take advantage of this if you’re selling your home.

A capital improvement in this context is what was mentioned above—anything that adds value, adapts a home to new uses, or prolongs its life. Something that you could include as a capital improvement might be a new roof or central air-conditioning.

Capital improvements don’t have to be big purchases either—something like storm windows counts or a home security system.

Repairs can’t be added to your basis. Repairs might include painting your home or fixing your gutters.

If you make improvements to your home, make sure you keep records of everything so you’ll have them if you do sell.

Tax Deductions for a Home Office
One way you could save on your taxes and improve your home at the same time is to build a home office. You get a small deduction on improvements you make to your home if you’re using one of the rooms exclusively as your work area, which many people are doing now.

Any repairs benefiting your home can also be deducted, based on the percentage amount of your home used as an office.

Similarly, if you rent out a part of your home, you might be able to deduct what you make in improvements to that area. If you were to, just to give you an example, add a bathroom to the area of your home you rent, you might be able to write that off in its entirety.

Medical Modifications
If a health care provider suggests modifications to your home to help you or to allow you to provide care for your family member, such as an aging parent, the expenses of these updates may be deductible. Examples include adding a wheelchair ramp or modifying your doorways. If the improvement adds value to your home, on the other hand, it’s not deductible.

Upgraded Energy Systems
The IRS has residential energy-efficient property credits. Qualifying properties according to their guidelines updated in April 2021 include solar electric, solar water heaters, fuel cell property and small wind turbines. Also included are geothermal heat pumps.

Improvements qualifying for a residential energy property credit include adding energy-efficient exterior windows and doors and skylights and roofs that are metal or asphalt. Insulation updates are included, and so are upgrades to heating and air systems to make them energy-efficient.

There are some ways to save on your taxes by upgrading your home, but limitations also exist. If you’re unsure of anything, it’s best to talk to a tax professional because guidelines can change from year to year.

08/06/2021

What to Know About the Expiring Eviction Ban
WRITTEN BY ASHLEY SUTPHIN

The Biden administration says it won’t renew a federal eviction ban. The reason the administration says it’s unable to do anything is that there was a Supreme Court ruling handed down recently that said Congress ultimately has to take action. The expiration means six million renters could be at risk of losing their homes.

No Extension
The Biden administration won’t extend the pandemic eviction moratorium because they said doing so would likely lead to a challenge in the Supreme Court.

The Centers for Disease Control and Prevention initially issued the federal eviction moratorium in September of last year. The ban was extended through last month, but July is its endpoint.

The temporary moratorium prevented landlords from removing people from their homes for not paying their rent. The suspension was established in response to the pandemic when the economy was mostly shut down.

Millions of people weren’t able to make their rent because of lost jobs and wages. The thinking behind the moratorium was that if something wasn’t done, a big wave of evictions would mean people would have to turn to shelters or crowd into homes with other family members, preventing social distancing.

Cities and states also put in place their own eviction moratoriums. New York’s started early in the pandemic that is set to go through August, and California’s will run through the end of September. California’s goes a step further by eliminating rent debt for low-income people facing economic hardship.

For residents of Washington D.C., landlords can’t start evictions until August 26, and only if they’d filed one against you before the pandemic. Other evictions can begin until October 12 in D.C., and you have to be given at least 60 days’ notice.

Hawaii’s eviction moratorium lifts on August 6, and Illinois runs through August as does Maryland.

In New Jersey, as a renter, you can’t be evicted until January. You also can’t be evicted for nonpayment of your rent during any month when your landlord accepted federal rental assistance.

Four states, Massachusetts, Oregon, New York, and Nevada, are temporarily banning any evictions for anyone with a pending application for rental assistance. The rental assistance program can be accessed through the Consumer Financial Protection Bureau. They have a tool that lets you apply for rental relief and if you’re approved, you could qualify for up to 18 months of rent coverage.

What the Moratorium Didn’t Do
The federal moratorium did not forgive unpaid rent or fees. It just moved the debt into the future. When it ends, tenants have to pay back rent unless they can come to some other agreement with their landlord.

There’s no alleviation of financial responsibility because of the federal moratorium. There’s also nothing in the order that would prevent charging or collecting fees, penalties, or interest.

Additionally, the order didn’t protect residents from evictions for other reasons, such as endangering other residents.

President Biden Calls on Congress to Act
President Biden’s administration says they are calling on Congress to act to extend the federal moratorium, given the delta variant that’s spreading in the U.S. House Speaker Nancy Pelosi says she believes the ban should also be extended and is working with a White House to find a way to make that happen.

07/05/2021

Buying a For Sale By Owner Home

WRITTEN BY WILL FRIEDNER

Have you ever thought about buying a For Sale by Owner Home? There are some things that you need to be aware of when buying a house directly from the owner.

Nowadays, everyone is trying to save money and sell their house on their own. You can save money buying a for sale by owner home. You can also get yourself into a lot of trouble if you are not sure what to look for.

Pricing
The first thing to check into if you are buying a for sale by owner home is the price. Many people will price their house based on how they think their house compares to their neighbors house that may be for sale. Sellers often get emotional over what they perceive is the value of their house.

Sellers always think that their house is way better than any other house in the neighborhood. They have all of the great memories there. The kids first steps, Christmas mornings, kids graduations, etc.

Appraisal
Even though you may think the house is perfect for you, do some research on the price. Unless you are paying cash for the house, an appraiser from the bank is going to come out. You may think "no big deal". The problem is that the bank will be charging you for the appraisal. These appraisals can cost from $600-1000. Nobody wants to spend $1000 on a house that they are not going to buy!

If the appraiser says that the value is lower than what you have agreed to pay, you now have a situation with the seller. They can either agree to now sell you the house at the price that the appraiser came up with, or the bank will make you come up with the difference before they will give you a loan. For example, the bank will not lend you $250K on a house that appraised for $230K even if you qualify for that amount. Basically, the bank is buying the house, so they want to make sure they can get rid of it if you quit making your payments.

Negotiate
This is something that you can negotiate. When you write up the purchase agreement or buy-sell, you can ask for the owner to pay for the appraisal if it comes in low. If he is so confident of his price, he should be willing to pay for the appraisal if it comes in low.

This brings me to another point. Always remember that EVERYTHING is negotiable. You should hammer out every detail before you get too far down the line with the sale. The last thing that you want to have happen is that you are a couple of weeks away from closing and something comes up that will cost money to fix. This is where many deals fall apart. Emotions can run high if the seller is half moved out of the house and you start asking for repairs or discounts on the sale price.

Disclosures
Another huge thing to keep in mind, is that if the owners are not using a realtor, they probably have not filled out a property disclosure form. When a house is listed by a real estate company, the company will require the seller to fill out and sign a document that discloses every issue with the house that they are aware of.

The document covers everything about the house and property. For example, if they put on a new roof 3 years ago, if they remodeled the kitchen, etc.. The document also has them disclose if there ever was a water leak or any other kind of damage to the house. They must disclose if they ever had to treat the house for mold, or radon.

I am not accusing anyone who is trying to sell their house on their own of lying, but if they don't have to fill out one of these forms, they may forget to tell you about something that could cause problems in the future for you.

Inspections
This is where the home inspection becomes so very important when buying a for sale by owner home. You may hit it off with the seller, you may totally trust the seller, but you must do an inspection! The seller may not be aware that his attic is full of mold. The seller may not be aware that the foundation of the house has issues. There are so many things that may be wrong with the house that will turn into your problem if you don't do an inspection.

Depending on the size of the house, an inspection will probably cost around $400. This is the best money you can ever spend. That $400 could save you thousands in future repairs.

Ask Questions
One thing that I would ask the seller right out of the gate is why are they selling? What is their motivation? Are they having financial troubles, or do they just need to move. Think about it, if someone is in desperate need to sell due to financial problems, they may be more likely to forget to tell you something that may be wrong with the house. Again, I am not saying that all FSBO's are dishonest or that they are all trying to screw you. It would be in your best interest to find out as much as you can about the seller. If they have nothing to hide, they should be very open about their past and the homes past.

Water Rights
Another thing to research if needed, is the water situation. In Montana, water rights are a huge deal. If you are buying a place on a larger piece of land, look into the water rights. The last thing that you want is to find out that you don't have access to much water or you have to pay someone for more water.

You can call the local DNRC office and find out if there are any water rights that go with the land. If the land that you are buying is on a lake or a stream, you can't just pump water out of it without the proper water rights.

Septic Systems
If there is a septic system, this should also be addressed. When buying a for sale by owner home, you should go down to the sanitation department and get the septic permit for the house. With an older house, there may not be a permit at all. If this is the case, some banks or loan programs will not work. If you can find all of this out in the beginning, you won't be out all of the money for the inspection and appraisal just to find out that you can't buy the house.

Another thing to look for on the septic report is the size of the system. The systems are approved for the amount of bedrooms in the house. If someone has added on to the house, the permit might be wrong. The septic permit might be for a 3 bedroom house, but the house now has 4 bedrooms. This can also be an issue with some of the loans that you may be using for the purchase. It can also be an issue if you have problems with the system in the future. If you have to do repairs you will need a permit from the sanitation department. They may require you to put in a whole new system that can handle the extra bedroom. This is not a cheap project.

Summary
Obviously, every house is different. There are many, many things that you need to check into. When buying a for sale by owner home, the main thing that you need to keep in mind is to do your homework on these things up front. All of these things can be negotiated before you get too far into the deal. The key is to do your homework! Find out about all of these things before you spend a bunch of money on inspections and appraisals.

When you are doing the negotiations, you will also learn a lot about the seller. You will be able to figure out what type of person he or she is and how much you should trust them going forward with the deal. This is all up to you, the more work you do up front, the more you will benefit.

If you are thinking of buying a for sale by owner home or if you are in the middle of one of these deals, feel free to contact us with any questions.

06/08/2021

What Does ‘Fully Amortized’ Mean?
WRITTEN BY DAVID REED

Mortgage loans come in most shapes and sizes such as different interest rates, loan terms and others. One term you may have heard of is ‘fully amortized.’ It’s sort of a mouthful but it’s an important feature of most loans today. A fully amortized loan is one where the loan is eventually paid off at a predetermined period of time while making regular monthly payments. This is in contrast to so-called ‘interest only’ loans or ‘negative amortization’ loans. Neither of which is hard to find in today’s lending environment.

That used to not be the case. In fact, there was a period not too long ago where interest only loans were all the rage. Negative amortization, or neg-am was also a financing option. How do those loans work? An interest only loan is fairly easy to figure out. An interest only loan is one where only the interest on the loan is paid each month. This of course results in the loan balance never being paid down unless the borrower makes an extra payment each month towards the loan balance.

Because in the monthly payment where both principal and interest are paid, an interest only loan will logically have a lower monthly payment. The downside? Unless the borrower actively pays down the loan balance, not only will the original loan be untouched but when it comes time to sell the home, it’s possible the selling costs associated with the transaction mean the borrower has to come to the closing table with money instead of receiving proceeds from the sale.

A neg-am loan is a bit more complicated. A neg-am is opposite a fully amortized loan. Instead of the loan balance being paid down each month, it could actually grow. It amortizes in the opposite direction. If the borrower fails to make a ‘fully indexed’ payment which includes both principal and interest, the unpaid portion gets added back to the loan amount. This means the loan balance would be higher than when originally issued. This takes an interest only loan to an entirely new level.

Both of these two loan types contributed to the mortgage and housing collapse in the late 2000s. Loan balances grew instead of getting smaller. Borrowers who tried to ‘flip’ a property using these loans soon discovered some programs were no longer available. Programs such as not having to provide verification of employment or so-called ‘sub-prime’ loans designed for people with damaged credit. This contribution to the financial collapse caused the federal government to issue new guidelines. These guidelines required loans to be fully amortized. No more interest only or neg-am. There were and still are a few loan programs that offer interest only, but neg-am loans are no longer around. The introduction of the fully amortized feature provided a safer lending environment and contributed to the financial recovery in June of 2009.

When you first speak to your loan officer about a new mortgage, all the features of the available loan programs will be provided. But a stated or neg-am loans won’t be one of them.

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