Are you considering a new kitchen, replacing your windows,  or finishing your basement and want to know how much money you’d recoup if you decided to sell your home? Exactly how much you’ll recoup in costs depends on several factors, including the direction of the broader housing market, the value of the homes in your neighborhood, when you plan to sell the home and the nature of the project itself. In some housing markets, you could earn more than your investment back on a remodeling project. Adding a midrange deck to a home in San Francisco, for example, often recoups well more than 100% of its costs on homes sold within the year of the project s completion. But you shouldn’t count on those types of returns. In Columbus, Ohio, the same project is likely to recoup less than two-thirds of its costs. Understanding which home improvements recoup the most amount of money is important if a person is considering selling his or her home in the future.

Finishing your basement

A person can usually recoup 80%-100% of his or her cost when finishing a basement. Adding square footage, additional bathrooms, and extra bedrooms to a home can be the best way a person can increase his or her property value. In 2012, a client of ours contacted us about selling his home. He owned a 1300 square foot 2 bedroom rancher that had a 1300 square foot unfinished basement. After looking at comparables in his neighborhood, we believed he could sell his home for $190,000 with the unfinished basement. The homes that had  finished basements in this neighborhood were selling for considerably more money. His floor plan with a finished basement was selling for $250,000 in his neighborhood. Our client finished his basement for $30,000 and was able to recoup 200% on his investment. This isn’t always the case, but adding square footage to your home is usually the best money spent and it will give you the highest return on your improvement cost.

Kitchens

A person can usually recoup 70%-80% of his or her cost on a kitchen remodel. Kitchens are a focal point of the home and having a remodeled kitchen will certainly help a seller when selling their home. A person can spend $5,000-$60,000 on a kitchen remodel, so it is important to know what is typical for your neighborhood. Doing a $60,000 kitchen remodel in a $200,000 home won’t make sense, but if someone is doing a remodel that in economical and fits his or her neighborhood they could see a 70%-80% recoup of cost on a kitchen remodel.

New Windows

Windows are something buyers look at when searching for a home. A seller could recoup 65%-70% of his or her cost when replacing their windows. Replacing windows not only increases the value of your home, but also reduces your utility bills while you live in your home. Utility cost are a concern for many buyers, and having double pane vinyl windows in a home will make your home more sellable in a competitive market.

Home Maintenance

People always ask Brandon and I what they can do to increase their home values, and the answer is home maintenance. Home maintenance is the cheapest thing you can do to your home, but it makes a world of difference. Paint, yard work, and cleaning will cost you a weekend and a couple hundred bucks. Making sure your home has curb appeal, and ensuring it is being presented in the best condition possible is the best way to make sure you get top dollar for your property. If you are considering a home improvement but are considering selling your home in the near future, call us to assess how your home improvement will affect your property value.

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In today’s lending landscape there are many different ways to obtain a loan to buy a home. Different programs offer different requirements and benefits to the borrower. It is important that any person looking to obtain a loan knows about these loan programs and understands how they work. Today we are going to discuss the different ways you can buy a home with little or no money down. More often than not this is in the form of loan programs that offer down payment assistance. Some have been around for a while and others are brand new programs, but all of them can be the road to Homeownership for many buyers.

1.       Colorado “Turnkey” Mortgage Origination Program

This program is brand new to the El Paso County region and already has been a very popular choice among home buyers looking for down payment assistance. The draw to this program is the down payment assistance is non-repayable! As long as you qualify it is like getting a down payment for FREE!

Benefits – The program provides a competitive 30 year fixed rate mortgage (typically about .50% higher than the typical market interest rate) with a down payment assistance grant equal to 4% of the mortgage amount to qualifying low and moderate income families. The 4% grant money is a non-repayable grant and can be used for down payment and or closing costs.

Eligible Loans – Borrowers can utilize this program with FHA or VA loans.

Buyer Requirements –

-There is NO first time homebuyer requirement

- Minimum of a 640 FICO credit score

- Maximum of a 45% debt to income ratio (DTI)

- Maximum credit qualifying income for a 2 person household is $88,900 / $103,700 (3 or more)

- Maximum Home purchase Price is $283,000

2.       CHFA Smartstep with Down Payment Assistance

CHFA or Colorado Housing and Finance Authority has been around for several years helping Colorado families realize their homeownership dreams. CHFA offers assistance with a buyer’s down payment in the form of a repayable second mortgage. The requirements and features differ slightly from the Turnkey Program.

Benefits – The program provides affordable fixed 30 year interest rates with a down payment assistance second mortgage equal to 3% of the Mortgage amount. The 3% assistance is in the form of a second mortgage that has monthly payments with the same rate and term as the first mortgage.

Eligible Loans – Borrowers can utilize this program with FHA or VA loans.

Buyer Requirements –

-Must be a first time homebuyer (defined as someone who has not had an ownership interest in a primary residence for the three years prior to the mortgage loan closing)

-Minimum of a 620 credit score

-Maximum of a 45% debt to income ratio (DTI)

-Purchaser must complete a CHFA homebuyer education class (online or in person) prior to loan closing

-Must contribute a minimum of $1,000 toward the purchase of the home

-Maximum credit qualifying income for a 2 person household is $74,100 / $85,200 (3 or more)

-Maximum home purchase price is $299,900

3.       FHA Gift Money

Traditional FHA Insured loans require the borrower to put down 3.5% of the mortgage amount. If a borrower does not have the 3.5% down payment they can receive it as a gift. The only requirement is it has to be a gift from an immediate family member (parents, grandparents, sibling etc)

As you can see there are several ways to secure a loan and realize your homeownership dreams without having to have any funds available for down payment. A good lender can always lead you in the right direction when it comes to figuring out the program that works best. Let us know how we can help!

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A short sale is when a homeowner owes more than their home is worth, and they negotiate with their lien holder (bank that holds their mortgage) to accept less than what is owed on the property.

What is the difference between a Bank Owned home and a short sale?

A bank owned home has already foreclosed. The bank is in possession of the home and is trying to sell. When a home is a short sale, the bank does not own the home. The seller still owns the home, but the contract is contingent on the bank approving the short pay-off.

The short sale process for Sellers:

The first thing to do when considering a short sale is to consult an attorney and CPA. There are liabilities to consider when a person short sales a home. Article ( Short Sales: Best Option for Most, But Not All) www.frascona.com/resource/jag0310_short_sale_payoff_foreclosure_colorado.htm  Once a person decides that a short sale is a viable option, they should consult a Real Estate Consultant and contact their lien holder to obtain a short sale packet. Your lien holder will require you to provide bank statements, W-2′s, and a financial worksheet. As part of qualifying a property owner for a short sale, the lien holder is looking for a financial hardship.  The property owner must provide a letter to his or her bank explaining their financial hardship.  Having your paperwork ready upfront will help expedite the process once you have an offer on your property.

The short sale process for buyers:

Short sales take time. When buying a short sale you must be flexible on timeframe. Short Sales will take 3-6 months to complete on average. Unless the short sale has been approved by the bank, the list price is not guaranteed. The bank can increase their asking price. You must be flexible on timeframe and price, but if your patient it may pay-off in the end.

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With historically low interest rates available to buyers, the Colorado Springs Real Estate market is showing signs of a recovery. In 2012, foreclosures in El Paso County were down 38% from 2010.  Not having to compete with as many bank-owned properties is beneficial to those looking to sell their home. New construction is rebounding as well. New construction permits were up 65% in 2012. These are all great signs for homeowners. As of January 2013, there were 2,930 current listings for sale in El Paso County. El Paso county has not had inventory levels this low since December 2001. With rates low and the inventory level dwindling, now is the right time to buy and things are looking up for homeowners!

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