Debbie Brodie’s Chico Real Estate Blog

Now is a great time to buy a house.

With the extension of the $8,000 first time home buyer credit and the addition of a $6500 credit for some move-up home buyers, many people will be out shopping for the best deal of the holiday season.

But you have to be able to qualify for a home loan. Here are some tips.

For mortgages, 620 is the new magic number
Near historic low mortgage rates, favorable home prices, and the federal tax credit for first-time home buyers have contributed to home purchases in the past year.  However, the onset of the credit crisis, new regulations for home appraisals, and more stringent guidelines for purchases and refinances have resulted in confusion for some potential home buyers.

While using a mortgage broker to find the best loan may work for some buyers, it may not always be the best route.  In the past, mortgage brokers could “shop” a loan to multiple lenders to help find the best deal.  However, new practices and procedures under the Home Valuation Code of Conduct (HVCC) have hampered mortgage brokers’ abilities, namely that lenders may no longer accept home appraisals commissioned by brokers.  As a result, consumers may have to pay for new appraisals with each lender, which costs time and money.  However, consumers who are very busy or need guidance may find that working with a mortgage broker is the easiest solution.

Qualifying for a mortgage under current lender standards is more difficult nowadays than in years past.  Beginning Nov. 1 or Dec. 12, depending on the type of loan, Fannie Mae is tightening its lending standards to the 620 credit score benchmark—including loans backed by the Federal Housing Administration and Veterans Affairs.  Borrowers with credit scores of less than 620 will find it very difficult to qualify for a mortgage.   However, to qualify for the best rates, consumers generally need credit scores of 720 and must have verifiable, steady income.

As for loan type, most real estate professionals agree that a fixed-rate mortgage is the best choice for buyers and refinancers.
To read the full story, please click here.

In this era of REO’s and short sales, I am seeing more home renovations on a budget.

When people think of updating an older home to make it more “green” -they often think of insulation and  dual pane windows. These are things that will make the home more energy efficient.

But what about the renovation itself.  Are there ways we can be good to our planet during the process?

Picture our land fills. Maybe there is something used you can buy from classified ads or craigslist? I have found everything from cabinets to, yes, the kitchen sink!

Can you sell any useable parts? Your old cabinets could be the perfect solution to someone elses cluttered garage!  Extra parts can be donated to the Re-store  for Habitat for Humanity.

If you need to dispose of something, are you taking it to the proper disposal center?

Here is a valuable list of  resources for the Chico area:

This home caught my eye today. Sitting on almost half an acre, this bank owned property has over 2100 square feet, an in-ground pool and a huge garage.

This is a great opportunity for some wanting room to roam. It came on the market today for $280,000. Definitely worth a look.

Click Here to View Listings

Definition of Debbie’s deal of the day: This is a property on the SNV MLS that Debbie would consider buying if Debbie had enough dollars to buy all the deals!

Has anyone heard of the "Home Valuation Code of Conduct?" Appraisers have, and some are worried. The code has been revised to put a firewall between the brokers and the appraisers. No more cozy relationships.

After being devastated by problems with unscrupulous lenders and brokers, the Federal Housing Finance Agency, Fannie Mae, Freddie Mac, and the Office of the New York Attorney General released a revised version of the Home Valuation Code of Conduct. The new "Appraisal Code" has an implementation date of May 1, 2009, and it may be downloaded here.    

A local appraiser brought this to my attention and told me that appraisals are already being ordered from appraisal management companies back east, and that many Chico appraisals are being assigned to Sacramento.

From back east, Chico and Sacramento seem like neighbors. But an appraiser ninety miles away has no idea of the street to street values of Chico. As a Realtor, I would not dare try to establish the market value for a Sacramento home. I know better.

Would a Sacramento appraiser know the difference in value between a home on 7th Street. and a home on 10th Street in Chico? Both homes were built in 1925. They are just three blocks apart. Same square footage. But the values are night and day. 7th street holds some of the most expensive homes in Chico, while 10th St. falls on the opposite end of the scale. Where one home’s value is over $300,000, the other is closer to $200,000.

Across town, a newer home with 2200 sq ft is nestled in with homes between 1100 and 1400 sq ft. These are entry level homes on sub-standard streets. Yet an out-of-town appraiser insisted the value be compared with homes of the same size, clear across town in an upscale area. This appraiser missed the value by 30% and cost my client a home.

Any local appraiser would know the true value of these homes, and would never make these mistakes.

I agree that appraisal fraud needs to eradicated. But not at the cost of accuracy. It would be a huge mistake to think that an appraisal can be done on data only, without knowing the nuances of each community. 

For the statement from Fannie Mae, click here.