Foreign Buyers Could Be Soon Buying a Home & Stay

A bill recently introduced in the Senate proposes that foreigners who spend $500,000 or more on a residential property should be eligible to obtain a visa that will allow them to stay in the country.
Several stipulations would be attached to the offer, however. Foreign investors would need to purchase a primary residence of at least $250,000 but spend at least $500,000 on residential real estate (another property could be a rental) — and through cash purchases only. The property would also need to be purchased for more than its appraised value, and the buyer would need to agree to live in the home for at least 180 days each year, which means any foreign buyer would be required to pay U.S. income taxes on any foreign earnings too. 

The visa could be renewed every three years, but it would not serve as a way toward citizenship.
"Many people want to come and live in the United States," says Sen. Charles Schumer, D-N.Y., who introduced the legislation this week with Sen. Mike Lee, R-Utah. "They will be here spending money and paying taxes, and the most important thing is they'll sop up the extra supply of homes we have right now compared to demand, and that's what's dragging our economy down."

Some brokers say that a visa incentive to foreign buyers could potentially even triple sales in their markets.
"California, Florida, New York, Colorado, Hawaii, and Texas — those states will see a huge increase in demand," Sandra Miller, a broker at Engel & Volkers in Santa Monica, told the Los Angeles Times.

Top 6 Reasons Mortgage Applications Are Denied

About 50% of home refinance and  30 percent of purchase mortgage applications are denied.

 It's tough especially since mortgage lenders have become increasingly restrictive in terms of their lending guidelines since the housing market crash.

Here are the top 6 reasons mortgage lenders reject applications.
1. Income issues. Most failed mortgage applications falling into this category have income too low for the mortgage amount they are seeking. But increasingly, the recent turmoil of the job market are also causing this issue, as people who have changed their line of work or have changed from salaried employee to freelancer over the last couple of years can also have their home loan applications rejected based on income.When you are self employed you must show proof of at least 2 years income.If you have not been in business for at least two years you will not be approved for a mortgage.

2. Debt To Income Ratio. If the mortgage for which you're applying plus your monthly payments on credit card, car and student loan debts are more than 45% of your total gross income, you could have problems qualifying for a home loan. You might also run into problems if you rely too heavily on bonuses, overtime, cash wages or rental income, all of these can be difficult or impossible to get a mortgage.

3. Credit issues. Today, the mortgage-qualifying FICO score cutoff falls somewhere between 620 and 660, depending on which lender and which loan type you need. More than one-third of Americans, by some numbers, have credit scores too low to qualify for a home loan. Even if your credit score is high enough to qualify, if you have any late mortgage payments, a short sale, a foreclosure or a bankruptcy in the last 2 years, loan qualifying could be difficult.

4. Property didn't appraise. Since the whole industry had its hand smacked for allowing home values to skyrocket in a very short time, (2002 to 2006) appraisal guidelines have tightened up. So, it is increasingly common to have the property appraise for a price lower than the sale price negotiated between the buyer and seller.Keep in mind that as you negotiate back and forth with the seller, there might be some foreclosed properties in your neighborhood that just sold at lower than expected which brings down the value of the property you may be tring to sell. This change the whole game and unavoidably brings the value down of the properties in the neighborhood.

5. Condition problems. With all the distressed properties on the market, and with most non-distressed sellers barely breaking even, more home-sale transactions than ever are falling apart due to condition problems with the property. Many lenders will not extend financing on homes where the appraiser points out problems like cracked or broken windows, missing kitchen appliances, electrical problems, or wood rot.
And in the world of condos and other units that belong to a homeowners association, if more than 25 percent of units are rented (rather than owner-occupied) or more than 15 percent are delinquent on their HOA dues, new applications for refinance or purchase mortgages on units in the development are likely to be rejected.

6. Technical difficulties with application. The days when lenders just took your word for it are long gone. Applications with incomplete or unverifiable information will fail. If any of these mortgage loan application glitches arise in your homebuying or refinancing process, it's critical that you connect with your mortgage professional to determine what course of action to take to get your loan approved.

Don't upgrade your house beyond the level of neighboring homes

Don't upgrade your house beyond the level of neighboring homes.
Real estate experts have long observed that home buyers are hesitant to pay a premium to buy the best house on an otherwise modest neighborhood.

Customizing a home with extravagant features, beyond all reason, does make your house harder to sell later. But adding features and upgrades that make your life in your home mirror your dream life, or create the comfort and lifestyle your family craves? If you can afford it without draining your home of equity or going into consumer debt, go for it, especially if you plan to be in the property over the long term.
It's your home, not just another financial asset, and one of the major advantages of ownership is your ability to create a comfortable, personalized habitat for your life.

Don't necessarily expect to get back your investment in upgrades dollar for dollar, and do avoid making bizarre customizations unless you're OK with reversing them when you do list the place for sale, but don't hold back on creating a custom home experience for your family and your lifestyle because you heard it's a bad investment.

Paying off your mortgage is bad.

 Paying off your mortgage is not such a good idea today.

During the real estate boom, many an mortgage companies espoused borrowing against your home to buy more homes, creating wealth or consolidating debts or even buying cars, boats, vacations etc.. Basically they were saying to Americans to use their home equity as cash cow.

While that worked for very few, for awhile, you can see how that turned out. A real disaster and terrible advice. But even now, traditional and conservative financial advisers still say that paying off your mortgage is not the best use of cash, as your mortgage interest is tax deductible, and the better use of the funds is to invest them for growth.

For people who can and are inclined to pay their homes off, though, this rule is off-target. Paying off your home is less about making the most assertive financial move possible, and more about creating security, fixing a low set of living expenses, and hedging against economic and job market uncertainty.

The best practice in today's economy is to make money moves that create maximum sustainability and minimum stress; if that means paying your mortgage off, then do it.

30-Year Mortgage Rates Drop Below 4%

For the first time ever, 30-year fixed-rate mortgages fell below 4 percent, Freddie Mac reported in its weekly mortgage market survey.