Tips and Resources for ...
Buying, Selling, Maintaining & Staying in your Home

BUYING/SELLING A HOME

Why purchase a home instead of rent?

• Interest payments on your mortgage may be tax deductible
• You will have a permanent place of your own
• You’ll build equity in the home as you pay off the mortgage
• A home is a long-term investment that may increase in value
• You can assure that you have stable housing costs

- CALIFORNIA HOME PRICE MEDIANS by County / City - including Alhambra (DQ News)
- SO. CALIFORNIA HOME RESALE ACTIVITY by County / City - including Alhambra (L.A. TIMES)
- FREE ONLINE HOME VALUE REPORT
- WHY LEASE-TO-BUY MAY BE A GOOD OPTION
- 10 STEPS TO SELL MORE QUICKLY IN STALLED MARKETS

Types of Mortgages  

• Jumbo Mortgages
• FHA Loans - 3% down payment
• VA loans - 100% financing for veterans
• Conventional Mortgages - most common mortgage
• CalPERS loans - mortgages for CalPERS, LRS, and JRS members
• Construction loans - finance the construction of a home
• CHFA loans ( Calhfa ) - first-time homebuyer loan program
• STRS loans - mortgages for members STRS retirement program
• Sub-Prime Mortgages - mortgages for those with bad credit
• Home Equity Loans - home equity loans, second mortgages and home equity line of credit loans
• Cal Vet Loans - special program for veterans buying a home in California
• FHA Streamline Refinance Loans - If you have a FHA loan your can do a FHA streamline refinance mortgage.
• Reverse Mortgage - information on reverse mortgage for seniors over 62

City of Alhambra First-Time Homebuyer Programs
The City of Alhambra offers resources to help qualified homebuyers purchase their first home! Get up to $75,000 in down-payment assistance plus $15,000 for home repairs. Click here to find out more!

Multi-Family Rental Development Partners
The California Housing Finance Agency (Multifamily Division) provides permanent financing for the acquisition, rehabilitation and preservation of existing rental housing, as well as new construction of rental housing. CalHFA-financed affordable units are targeted to very low to moderate income families, individuals with special needs, and others. CalHFA-financed affordable units are targeted to low and moderate income families and individuals in California. Click here to find out more!

MAINTAINING YOUR HOME

City of Alhambra Home Renovation Programs
Property Rehabilitation Grants/Loans - The City of Alhambra offers resources to help qualified homeowners with home repairs. Click here to find out more! (See also Senior Minor Home Repair Program)

CALCULATORS

Mortgages
• Am I better off renting?
• How much can I borrow?
• What home can I afford?
• How much can I save in taxes?

Loan Decisions
• What income is required to qualify for a mortgage?
• How much will my payments be?
• How much will adjustable rate payments be?
• Which is better: fixed or adjustable?
• Which is better: 15- or 30-year term?
• Loan Comparison: Which loan is better?
• Lender Comparison: Which lender has the better loan?
• How much should my down payment be?
• Should I pay points to lower the rate?
• How can I reduce mortgage insurance costs?
• What will my closing costs be?
• What is the advantage of biweekly payments?
 
Paying Down Your Mortgage
• How much can I save if I start biweekly payments?
• How much faster can I pay off my mortgage by increasing my payments?
 
Refinancing
• Am I better off refinancing?
• What will my refinancing costs be?
• How long will it take to break even on a refinance?

STAYING IN YOUR HOME

Steps To Take When You May Be Unable To Pay Your Mortgage
Contact Your Lender NOW!  If you are a homeowner and have received a notice of default from a mortgage lender, there are a series of legal steps that a lender must take before a property is foreclosed. Get the facts! Lenders have workout options to help you keep your home. However, these options work best when your loan is only one or two payments behind. The farther behind you are on your payments, the fewer options are available. Do not assume that your problems will quickly correct themselves. Contact your mortgage lender to discuss your circumstances as soon as you realize that you are unable to make your payments. While there is no guarantee that any particular relief will be given, most lenders are willing to explore every possible option.

Resources for avoiding foreclosure

• Talk to a housing counseling agency (most services are free or very low cost)
        Springboard Non-Profit Consumer Credit Management
        Career Partners Office, 3505 N. Hart Ave., Rosemead, CA 91770
        Appointment #: (800) 947-3752 / Online Counseling
• Federal Reserve Bank - Mortgage Foreclosures Resources
• HUD Tips for avoiding foreclosure
• HUD-approved counseling agencies  
• Hope Now Alliance is a cooperative effort between the U.S. government, counselors, investors, and lenders to help homeowners who may not be able to pay their mortgages. Call 1-888-995-HOPE to speak with a HUD-approved credit counselor.
• Home Ownership Preservation Foundation
  Free counseling: 1-888-995-HOPE (24 hours per day/7 days per week).
• NeighborWorks
• ForeclosureInfoCA.org - This website, a project of the Public Interest Clearinghouse and the State Bar of California, can help answer your questions about foreclosure.
• Center for Responsible Lending
• Homeowner Crisis Resource Center
• League of California Cities 
• National Foundation for Credit Counseling
• State of California Consumer Home Mortgage Information
• Mymoney.gov - the U.S. government's website dedicated to teaching all Americans the basics about financial education..

What options do I have if I miss a payment?
If you miss a mortgage payment, you should talk with your lender and agree upon a:

• Workout plan - usually where you repay what you owe (on top of your monthly payment) spread out over a year.
  
• Reinstatement: This option may be available to homeowners who can demonstrate to a lender that they have available funds to pay back the outstanding balance on their mortgage in a short time (up to 24 months).  This solution works best for homeowners who can make up their total past due balance through a combination of lump sum payments and/or "extra" payments (spread out over a 12-24 months) in addition to their regular mortgage payment.
• Forbearance: Your lender may allow you to reduce or suspend payments for a short period of time after which another option must be agreed upon to bring your loan current. A forbearance option is often combined with a Reinstatement when you know you will have enough money to bring the account current at a specific time in the future. The money might come from a hiring bonus, investment, insurance settlement, or a tax refund.
• Repayment Plan: You may be able to get an agreement to resume making your regular monthly payments, in addition to a portion of the past due payments each month until you are caught up.
  If it appears that your situation is long-term or will permanently affect your ability to bring your account current.
• Mortgage Modification: If you can make the payments on your loan, but you do not have enough money to bring your account current or you cannot afford the total amount of your current payment, your lender may be able to change one or more terms of your original loan to make the payments more affordable. Your loan could be permanently changed in one or more of the following ways: 
    - Adding the missed payments to the existing loan balance. 
    - Changing the interest rate, (Ex: make an adjustable rate fixed).  
    - Extending the number of years you have to repay. 
• Claim Advance: If your mortgage is insured, you may qualify for an interest-free loan from your mortgage guarantor to bring your account current. The repayment of this loan may be delayed for several years.
• Loan modification – where the lender agrees to change the terms of the loan to give you a monthly payment that you can afford. 
   
• Return the house back to the lender. This this isn’t as easy as it might seem.
   
  The options are:
• Sale: If you can no longer afford your home, your lender will usually agree to give you a specific amount of time to find a purchaser and pay off the total amount owed. You will be expected to obtain the services of a real estate professional who can aggressively market the property.
• Pre-Foreclosure Sale or Short Payoff: If the property's sales value is not enough to pay the loan in full, your lender may be able to accept less than the full amount owed. This option can also include a period of time to allow your real estate agent to market the property and find a qualified buyer. Monetary help may also be available to pay other lien holders and/or help toward paying a few moving costs.
• Deed in lieu – where you voluntarily agree to give the house back to the lender, in exchange for their agreement to stop going after you in the foreclosure case and to zero the balance due on the loan. Although this option sounds like the easiest way out for you, generally, you must attempt to sell the home for its fair market value for at least 90 days before the lender will consider this option. Also, this option may not be available if you have other liens such as judgments of other creditors, second mortgages, and IRS or State Tax liens. 
• Assumption: A qualified buyer may be allowed to assume your mortgage, even if your original loan documents state that it is non-assumable.
• Abandoning the house – this is a really bad idea.  Leaving the house empty can lead to an increase in crime for the neighbors who stay, and problems for you.  Because you own the house, until the bank files a new deed.  If the house is damaged, the city has the right to come after you for housing code violations.  You may also continue to owe taxes.

Beware Of Predatory Lending Schemes
Most mortgage lenders are reputable and provide a valuable service by allowing families to own a home without saving the thousands or hundreds of thousands of dollars necessary to buy it outright. However, a few, unscrupulous lenders, especially those who make high risk second mortgages, engage in predatory lending practices that can increase the likelihood that a borrower will lose his or her home to foreclosure. These abusive practices include making a mortgage loan to an individual who does not have the income to repay it, charging excessive interest, points and fees or repeatedly refinancing a loan without providing any real value to the borrower. Borrowers facing unemployment and/or foreclosure are frequent targets of predatory lenders because they are desperate to find any "solution" to their default.

Homeowners frequently receive refinance offers in the mail telling them that they have been "pre-approved" for credit based on the equity in their home. When you are wondering how you are going to pay your mortgage and other bills, it may appear very attractive to borrow against your house. But consider this, if you cannot make your current payments, increasing your debt, even if you get some temporary cash, will make it harder to keep your home.

Beware of Scams:

Information is your best defense against becoming a victim of predatory lending especially for a desperate homeowner!  Do not sign anything you do not understand. It is your right and duty to ask questions

• Equity skimming: a buyer offers to repay the mortgage or sell the property if you sign over the deed and move out. 
• Phony counseling agencies: offer counseling for a fee when it is often given at no charge. 

Where to Report Suspected Predatory Lending – Call (800) 348-3931 to get information on what steps to take to file a complaint.

Fair Housing Resources:

• The Housing Rights Center contracts with the City of Alhambra to provide Alhambra residents with FREE counseling services related to fair housing and landlord/ tenant issues.  Common matters include evictions, security deposits, rent increases, repairs and lease/contract issues. As needed, referrals to other agencies and/or appropriate literature is distributed to patrons. In addition to landlord/tenant counseling, other services include Discrimination Complaint Investigation, Enforcement & Litigation, Predatory Lending Hotline, Outreach & Education, and Advocacy. A free leaflet, available at the library, explains all of the services available through the Housing Rights Center.

Legal information and additional assistance:

• Questions about real estate law
• California Department of Corporations - has enforcement authority over the California Residential Mortgage Lending Act, the California Finance Lenders Law and Escrow Law.
• Center for California Homeowner Association Law 
• Your consumer rights with debt collectors
• Reviewing your credit report
• Get a free credit report
• Check the license status of any real estate agent
• Check the license status of any mortgage broker or lender
• Insurance checklist for homebuyers
• Obligations when signing or co-signing a loan
• Asian Real Estate Association of America (AREAA) - a national professional trade organization dedicated to closing the homeownership gap facing the Asian Pacific American (APA) community.