Live in Ocala? | Self-Employed? Avoid These Common Borrower Traps

Rhonda Buckner with Buckner Homes Realty
3200 SE 20 Ave. Ocala, Florida 34471

If there’s one type of borrower in this credit market whose profile has been scrutinized the most, it’s the sole proprietor. Self-employed individuals/sole proprietors used to be able to get stated-income loans that would allow them to provide supporting income documentation. But the paradigm has shifted, and these borrowers now have a more challenging time qualifying for a mortgage than ever before.

Financial professionals often advise the self-employed to write off as much of their expenses as possible in order to show less income on their taxes. While this is quite favorable from an accounting standpoint, taking expenses reduces the taxable income needed to offset liabilities, such as a mortgage payment.

The common self-employed borrower traps most sole proprietors will encounter when getting a mortgage include:

Not showing enough income on your Schedule C form

Showing little income on your Schedule C reduces the amount of income you’ll have to offset your liability (new mortgage), and showing a loss (negative income) makes things even tougher. To determine the income that will be used to offset a mortgage payment (including taxes, insurance and private mortgage insurance, depending on loan program), take your combined annual income (your annual profit) for the past two years then divide by 24. The income will need to be at least 55 percent greater than the mortgage payment, assuming no other liabilities.

Not being self-employed for 2 years

This is not to say your loan will be denied if you have less than two years of self-employment history. However, you’ll need to show a net profit, with a current year-to-date profit and loss statement as well as your most recent year’s self-employed income tax returns.

Not being able to document large cash deposits

Any deposits going into your bank account have to be part of your regular income and will need to be documented as such.

Not having a third-party business validation

This means either a business license — such as a real estate license if you’re a real estate agent, for example — or a CPA letter showing that you have filed self-employed income tax returns for the past 24 months. Another option is showing your business profile online.

Using business funds in a mortgage transaction

If the funds for the transaction are coming from a business account, the mortgage lender will assess your ability to use those funds as part of your regular cash flow and business model. In other words, if your regular cash flow, income and business are such that those funds would be plausible for your use, you’ll be OK. This will be determined by the mortgage underwriter. However, if the business funds do not support a way of how those funds were originally generated, you’ll need to provide a CPA letter showing that the use of those funds does not impact the cash flow of your sole proprietorship business.

Business liabilities

Debt obligations that the business pays will show up on your credit report, so be prepared to provide supporting documentation. If these are business debts, but are paid for personally, these debts cannot be omitted, and they will count against your borrowing power.

< Give Rhonda a call to help you find that perfect home and to discuss the options that buyers have. As always you can search for homes in Florida at . I am always here to help you. Just call and say Help Help me Rhonda 352-266-2637

What You Need to Know About Mortgage Rate Locks

Rhonda Buckner with Buckner Homes Realty
3200 SE 20 Ave. Ocala, Florida 34471

Whether buying a home or refinancing a mortgage, your mortgage lender will require you to lock your rate on the amount borrowed no later than five days prior to closing.

Mortgage rate locks guarantee the interest rate for a “set” period of time, and the length of the lock essentially determines how long you have to close escrow. This is where consumers can often find themselves scrambling to meet the interest rate lock, so the costs don’t accumulate.

Rate lock options

As you do your loan comparison shopping, you’ll find mortgage rate locks vary in time length.

15-day lock: Provides the “lowest-cost rate” available in the market on any given day. The loan needs to be approved by underwriting to take advantage of this lock.
30-day lock: Fair market rate. This option is most commonly used for interest rate locking upfront before loan approval.
45-day lock: Used for transactions taking longer, whether the loan is approved or not.
60-day lock: Used in circumstances where the loan is prolonged, such as when one borrower is out of town for a period of time, whether the loan is approved or not.
The shorter the lock, the less risk the mortgage lender takes in tying up that money, which means a better interest rate for the consumer.

Extra costs

It’s not uncommon to see an interest rate variation by as much as 0.25 percent on the longer rate locks compared against 30-day and 15-day rate locks.

The longer the lock, the more risk the lender takes and the slightly more costly the loan can become, depending on the day you choose to lock in your interest rate. Lenders are always concerned about interest rate risk.

For example, let’s say you lock your interest rate today on a 30-year fixed rate mortgage at 3.25 percent for 30 days. If rates rise to 3.5 percent, the lender could make an extra 0.25 percent margin on the money you’re committing to borrow. That means if your transaction takes 32 days rather than the locked 30 days, the costs to extend your loan can be upward of half a discount point expressed as a percentage of the loan amount. Using a $300,000 mortgage loan, an extension fee for additional time can run upward of $1,500.

Comparison shopping

Don’t be afraid to let your mortgage lender know that you’re shopping around and that you’re willing to lock in an interest rate that you deem to be fair and reasonable. A reputable mortgage lender knows consumers shop for mortgages, forcing them to be competitive to stay in business.

All lenders are under very tight underwriting restrictions from Fannie Mae and Freddie Mac, so locking in the mortgage rate does not guarantee that your loan will actually close escrow. Making sure you lender reviews your financials improves the odds, greatly.

Get a rate quote from a lender upfront and make sure it’s an interest rate that the lender can pull the trigger on if you say “go.” Be prepared to send your mortgage company your credit, debt, income and asset information so it can make sure that you can actually qualify for the amount of money you’re looking to borrow.

Give Rhonda a call to help you find that perfect home and to discuss the options that buyers have. As always you can search for homes in Florida at . I am always here to help you.
Just call and say Help Help me Rhonda 352-266-2637

Good News For the Ocala Real Estate Market | October Marks 12th Consecutive Month of National Home Value Increases

Rhonda Buckner with Buckner Homes Realty
3200 SE 20 Ave. Ocala, Florida 34471

U.S. home values rose in October for the twelfth consecutive month. Median home values nationwide last month rose 1.1 percent from September and 4.7 percent from October 2011, to $155,400.

The monthly increase was the largest since August 2005, when home values rose 1.2 percent month-over-month. The year-over-year increase was the largest since September 2006.

Home values rose in the month in line with continuing recovery in the broader national economy, and reflect increased buyer demand driven by high affordability and tight inventory.

“We’ve reached a milestone with one full year of monthly home value gains,” said Zillow Chief Economist Dr. Stan Humphries. “Skeptics will point to the large role that investors are playing in the recovery, or to the large number of foreclosures yet to hit the market, as factors to be wary of. But the bottom line is that homes are more affordable now than at any time in recent memory, and buyers are seizing this opportunity. We expect to see increasing numbers of potential buyers entering the market as the broader economy continues to recover and household formation picks up further.”

A number of major markets were up substantially in October. Among those metro areas sporting double-digit, year-over-year gains in home values were Phoenix (22.3 percent), San Jose (11.4 percent) and Denver (10.4 percent). Only Chicago failed to register either month-over-month or year-over-year home value gains.

On the rental side, national rents were largely flat month-to-month, falling 0.1 percent to a Zillow Rent Index of $1,279. Year-over-year, rents nationwide were up 5.4 percent, and rose on an annual basis in all but three of the largest metros surveyed.

Give Rhonda a call to help you find that perfect home and to discuss the options that buyers have. As always you can search for homes in Florida at . I am always here to help you.
Just call and say Help Help me Rhonda 352-266-2637

BENEFITS OF FHA 203K|Financing for Renovations.

Rhonda Buckner with Buckner Homes Realty
3200 SE 20 Ave. Ocala, Florida 34471

There are a lot of homes out there for sale as foreclosures and short sales. There are good homes that do not need any work usually go very quickly. That leaves the homes that need work left. Many homeowners that want to purchase, have little money. There is a loan program out there that can help you buy that home and fix it up and roll all the costs into a loan. Get your home and have it customized for you as soon as you move in.

Buyer Benefits
Obtain loan covering mortgage and remodeling work with historically low interest rates
Regardless of scope of work, ONLY 3.5% down payment required
Create your DREAM home WITHOUT huge out-of-pocket costs
Take advantage of “as-is” properties priced below market value
Anything from appliances to complete STRUCTURAL renovations available
Give Rhonda a call to help you find that perfect home and to discuss the options that buyers have. As always you can search for homes in florida at I am always here to help you. Just call and say Help Help me Rhonda

Fiscal Cliff Matters To Housing | Mortgage Debt Forgiveness Extension

Rhonda Buckner with Buckner Homes Realty
3200 SE 20 Ave. Ocala, Florida 34471

Rhonda Buckner with Buckner Homes Realty3200 SE 20 Ave. Ocala, Florida 34471352-266-2637

The much feared ‘Fiscal Cliff’ matters big time for housing.
Wrapped deep within the ongoing negotiations on now to avoid the ‘Fiscal Cliff’ is the extension of the Mortgage Debt Relief Act. Short sales, REOs, Loan Mods….basically the entire housing market would be seriously gut punched if the Mortgage Debt Relief Act isn’t extended.
But, don’t worry. Its getting extended.
From what I have read, folks I have spoken the 2007 Mortgage Debt Relief Act WILL be extended. My contacts in D.C. have told me that neither political party is debating the necessity of extending the Mortgage Debt Relief Act

What I am concerned about is the Mortgage Interest Tax Deduction. Don’t be surprised if the final agreement has in it a limit as to how much you can deduct and limit the deductions based on your income.

Rhonda Buckner Ocala’s Short Sale Specialist 352-266-2637 Sells Short Sales Quickly

Good News for Ocala Home Owners! | Negative Equity Recedes in Third Quarter; Fewer than 30% of Homeowners with Mortgages Now Underwater

Rhonda Buckner with Buckner Homes Realty
3200 SE 20 Ave. Ocala, Florida 34471

Today, Zillow released its third quarter Negative Equity Report. Negative equity for homeowners with mortgages has fallen to 28.2 percent from 30.9 percent in the second quarter. That’s great news for struggling homeowners.

Slightly more than 14 million U.S. homeowners with a mortgage were in negative equity, or underwater, in the quarter, owing more on their mortgages than their homes are worth. That was down from 15.3 million in the second quarter. Additionally, the nation’s 30 largest metro areas covered by Zillow’s report all experienced quarter-over-quarter declines in negative equity.

Negative equity rates are driven in large part by home values – when home values rise, negative equity rates fall; when values fall, negative equity rates tend to rise. In the third quarter, home values rose 1.3 percent compared to the second quarter, to a median value of $153,800, according to the Zillow Home Value Index (ZHVI). Throughout much of 2011 and into the first half of this year, home values fell, and negative equity rates rose. The past two quarters have reversed this trend, and we’re hopeful it will continue.

However, a number of factors could affect home values – and as a result, negative equity rates – in the fourth quarter. Most notably, it is critical that ongoing negotiations centered around resolving the fiscal cliff problem do not adversely affect consumer and investor confidence. If markets don’t react favorably to the shape of fiscal cliff agreements, it is possible pessimism and uncertainty will slow down household formation and cause home buyers and sellers to reconsider the wisdom of buying or selling.

In this ever changing time in real estate call Rhonda Buckner with Buckner Homes Realty at 352-266-2637 for all of your real estate needs!

It is Time to Buy a Home In Ocala! | 30-Year Fixed Mortgage Rate Ties Record Low

Rhonda Buckner with Buckner Homes Realty
3200 SE 20 Ave. Ocala, Florida 34471

Mortgage rates for Erin Lantz, director of Zillow Mortgage Marketplace. “Looking ahead, we expect rates to stay in record-low territory as Congress works though a resolution for the looming fiscal cliff.”

Additionally, the 15-year fixed mortgage rate this morning was 2.63 percent, and for 5/1 ARMs, the rate was 2.38 percent.

What are the rates right now? Check Zillow Mortgage Marketplace for up-to-the-minute mortgage ratesfor your state.

*The weekly rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

There has not been a better time to buy a home! Call Rhonda Buckner with Buckner Homes Realty at 352-266-2637 and she will find the perfect place for you to call home!

Buying a Home in Ocala? | 3 Reasons Why Buyers Shouldn’t Go It Alone

Rhonda Buckner with Buckner Homes Realty
3200 SE 20 Ave. Ocala, Florida 34471

Before the era of online property listings, thick books were distributed to local real estate offices every few weeks. Agents sifted through them looking for homes that might be a good fit for their buyer clients. They’d then call their clients with the address and have them do a drive-by. Maybe they’d even fax the listing to their client. Either way, that information wasn’t available to the general public, and real estate agents held all the cards.

Today, everything you might want to know about a property is available with a few clicks. The history of a listing shows how long it’s been on the market, when the seller bought it and if the seller tried to sell it a few years back. Consumers can even see comparable properties to gauge home value.

Given the wealth of easily available property information, you might be wondering whether a real estate agent is even necessary anymore. Here are three reasons why agents are just as important as they were years ago — if not more so.

You need someone to interpret all that information

Yes, there’s a ton of information out there for the general public, but all that data is meaningless if you can’t interpret it or predict how it might affect your investment.

For example, imagine that you’ve found a home online you love, and you’ve discovered a comparable home that sold two months ago for $50,000 less. Your inclination might be to wait and not make an offer or to make a lowball offer. However, a good agent would know that the “comparable” you found has dry rot and termite issues on the back deck. They’d know there was work done in the basement without permits, which the new owner would have to take care of. An unrepresented buyer would miss out on this home without this inside knowledge.

Often, having an agent to bounce ideas off of, validate what you’re thinking about a home or highlight a disclosure you wouldn’t have noticed, gives you peace of mind — and can save you a lot of time, trouble and money.

It’s the agent’s job to know the market

Trying to buy or sell a home is practically a part-time job, one that requires its own expertise.

A real estate agent’s livelihood depends on knowing the market and the history of all the homes sold in a particular neighborhood over the course of five years. Agents help a variety of buyers and sellers through the process over and over.

The sheer repetition of completing many deals is something buyers and sellers don’t have. Through that repetition, experienced agents learn when to avoid a certain inspector, when and why it makes sense to make a client put in an offer ahead of an open house, or how to navigate a title issue with the escrow company prior to a closing. A good agent immediately knows when a home that appears to be an amazing “deal” is actually too good to be true and can also spot an incredible opportunity that a buyer might miss.

You can’t afford to make a mistake

Years ago, people who bought homes could usually expect a slow but steady increase in their investment over many years. That was OK, because homeowners were in it for the long haul. Life was simpler then. People stayed in their jobs until retirement. They wanted to establish roots in their community.

Fast-forward to today. If nothing else, the past five years have shown us how volatile the real estate market has become. Prices went up and up and up, then crashed, and are now moving back up. The equity many people counted on was wiped out and, depending on when they bought, might never come back. At the same time, job security has become a thing of the past. Few people, especially those younger than 40, plan to retire with the companies they’re currently employed by. We’re a highly mobile society.

The point is, life feels more unpredictable than ever, and buying a home is a huge investment. With so much change and uncertainty, the stakes are high. If you make the mistake of buying at the height of the market or buying the best house on the block, and then you have to sell sooner than expected, you could lose a lot of money.

Rhonda Buckner with Buckner Homes Realty has been in the real estate business since 1993. Call Rhonda Buckner at 352-266-2637 to help you find the right home for you!

Average U.S. rate on 30-year loan dips to 3.39%

Rhonda Buckner with Buckner Homes Realty
3200 SE 20 Ave. Ocala, Florida 34471

WASHINGTON – Nov. 2, 2012 – The average U.S. rate on a 30-year fixed mortgage slipped this week and stayed near its record low, a trend that’s helped boost home sales and refinancing.

Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan declined to 3.39 percent from 3.41 percent last week. Four weeks ago, the rate touched 3.36 percent, the lowest level on records dating to 1971.

The average on the 15-year fixed mortgage, often used for refinancing, fell to 2.70 percent. That’s down from 2.72 percent last week and close to the record low of 2.66 percent reached two weeks ago.

The low rates have helped drive a modest housing recovery. Rates have fallen further since the Federal Reserve started buying mortgage bonds in September to try to encourage more borrowing and spending.

Home sales have increased from last year, and prices are rising more consistently in most areas. Builders are more confident and beginning work on more homes.

Lower rates have also persuaded more people to refinance. That typically leads to lower monthly mortgage payments and more spending.

In August, home prices rose in nearly all U.S. cities, and many of the markets that were hit hardest during the housing crisis are starting to show sustained gains, according to the latest Standard & Poor’s/Case Shiller index. It was the third straight increase.

Still, the housing market has a long way to a full recovery. And many people are unable to take advantage of the low rates, either because they can’t qualify for stricter lending rules or they lack the money to meet larger downpayment requirements.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for 30-year loans was 0.7 point, unchanged from last week. The fee for 15-year loans ticked up to 0.7 point from 0.6.

The average rate on a one-year adjustable-rate mortgage dipped to 2.58 percent from 2.59 percent. The fee for one-year adjustable rate loans remained at 0.4 point.

The average rate on a five-year adjustable-rate mortgage edged down to 2.74 percent from 2.75 percent. The fee was unchanged at 0.6 point.

Call Rhonda Buckner with Buckner Homes Realty for all of your Real Estate needs at 352-266-2637

Ocala and Florida Homeowners | $260M going to Florida homeowners

Rhonda Buckner with Buckner Homes Realty
3200 SE 20 Ave. Ocala, Florida 34471

TALLAHASSEE, Fla. – Nov. 2, 2012 – Florida Attorney General Pam Bondi reached an agreement with lawmakers on the future of $300 million the state received as part of the large national mortgage settlement. Florida’s 2013 Senate President Don Gaetz and 2013 House Speaker Will Weatherford joined Bondi today in announcing that the funds will go toward housing.

The $300 million went directly to the state. In addition, about $7.5 billion under the settlement will go directly to Florida homeowners.

Bondi and lawmakers initially disagreed over who had authority to distribute the money – the attorney general or the Florida Legislature. Under the agreement, Bondi will seek approval to disburse $60 million. She proposes that the money be used for downpayment assistance, foreclosure-related legal assistance, initiatives to ease the state’s foreclosure backlog and Attorney General enforcement efforts.

The Florida Legislature will allocate about $200 million during the 2013 legislative session, where Gaetz and Weatherford have agreed to appropriate the money for housing issues. While lawmakers have flexibility, they say possible uses include foreclosure prevention, neighborhood revitalization, affordable housing, homebuyer or renter assistance, legal assistance, counseling or other housing-related programs.

Bondi will use approximately $40 million as additional civil penalties.

“This plan gets much-needed assistance to the homeowners and communities suffering the effects of the foreclosure crisis, and ensures that the settlement funds are spent with the transparency, accountability and flexibility that comes from the legislative process,” says Bondi. “I thank President-designate Gaetz and Speaker-designate Weatherford for working together with me to implement the mortgage settlement in a way that’s in the best interests of our state.”

“It’s wonderful to see the money from this settlement being committed for its intended purpose – housing, and cleaning up the foreclosure mess,” says John Sebree, senior vice president of public policy for Florida Realtors. “In many others states, the money was used to balance budgets and plug deficit holes. Florida Realtors applaud General Bondi and the Legislative leadership for recognizing the foreclosure problems in Florida that need to addressed.”

In addition to Florida’s share of the money and direct relief to homeowners, the settlement mandates extensive reforms of the banks’ mortgage servicing practices.

For more information regarding the bank settlement, visit the Florida Attorney General’s website.

For all of your Real Estate needs call Rhonda Buckner with Buckner Homes Realty at 352-266-2637.