Will the government’s foreclosure pact offer us any help?

Maybe. What you will be looking for is a principal reduction. To qualify for one, however, borrowers have to be behind on their payments or at “imminent risk” of default, which you might be. Most principle reductions are expected to go to borrowers whose loans are owned by one of the five big banks, which are Ally Financial, GMAC Mortgage, Bank of America, JP Morgan Chase and Wells Fargo (but the government hopes to make a similar deal with nine other banks). Some borrowers whose loans were packaged into securities may qualify.

The settlement calls for principal reductions on both first and second mortgages but doesn’t cover loans owned or backed by government-backed Fannie Mae or Freddie Mac. Borrowers will get letters from their mortgage companies to advise them if they qualify for help. But government officials are encouraging borrowers to contact their mortgage company to see if they qualify. There is also a national clearinghouse site with more information: nationalmortgagesettlement.com.

Refinance program

If you decide to refinance your present home, the refinance program applies only to loans owned by the referenced banks. Borrowers have to be current on their loan payments and owe more than their home is worth. The interest rate can be reduced to as low as 5.25 percent. In your case, the resulting loan payment could be low enough that you could rent out your present home and go on to buy a larger one.

Foreclosures

This does not apply to you, but those foreclosed on between 2008 and 2011 are eligible for a cash payment of between $1,500 and $2,000. They will receive a form in the mail. They don’t have to prove they shouldn’t have been foreclosed.

When you’re ready to do some repairs, home inspectors quoted in CNN Money say you have decisions to make. They recommended these priorities:

1. Electrical system.

Wiring problems can cause fires or electrocution. Call an electrician to open your main panel box, tighten loose connections and look for trouble spots. He can also check switches, outlets and light fixtures. To lengthen the life of circuit breakers, flip every one off and back on once a year to prevent corrosion.

2. Basement.

Have a home inspector check the building foundation, especially if beams have bowed or posts are rotting. Structural damage downstairs means shifting and wall cracking upstairs, so have the foundation checked as well. Water causes most problems. Keep the basement dry by making the landscape slope away from the house.

3. Roof.

A water stained ceiling means roof problems, as do missing or broken shingles, smooth spots where granules have worn away from shingles or green algae growth on the roof. To prolong the life of the roof, prune tree limbs so they are at least 10 feet from the roof to keep squirrels away and let moisture evaporate after rain.

4. Gutters.

When it’s raining, check for clogs and overflows. Get gutters cleaned one to three times a year, depending on how many trees you have.

Home improvement stores are breathing a sigh of relief and the construction sector is seeing a ray of light. Homeowners and landlords are improving their properties for the first time in several years.

IHS Global Insight is predicting a nationwide increase in home-improvement spending of 5.7 percent for 2012. Small-scale improvements are popular with most updates, including new light fixtures and faucets, kitchen cupboards and exterior doors, rather than room additions.

The rise in improvement spending comes as the economy and consumer confidence are picking up. It’s encouraging to the construction industry, which has seen new-home construction fall since the recession. Though more new homes are being built, the number is still low.

One interesting fact is that people who know they are underwater on their mortgages are going ahead with improvements. Whatever their homes are valued at by others, they and their children like where they live. They can afford their mortgage payments, and are secure in their employment.

People in such situations think their property values will rise in the future but know that could be some years away. If they need a room or a patio, they think they might as well go ahead with it.

Financing with home-equity loans probably isn’t available for them, so personal savings or other types of loans have to be used.

Brian Santos, The Wall Wizard, gives this advice…

1. Clean the surface. Buy a 90-percent pure solution of rubbing alcohol and a self-wringing sponge mop with a scrubbing strip. Put a half gallon into a bucket and scrub the walls with an up-and-down motion. Wring the mop into an empty bucket so the solution isn’t contaminated.

Rubbing alcohol will remove dirt, fingerprints, cooking grease, nicotine stains and crayon.

2. Smooth the surface. Darken the room and put a halogen work light ($15) on the floor next to the wall. Use a wall board sanding strip to remove anything that shows up.

To fill any depression, use a vinyl surfacing compound and a drywall knife to smooth it out.

Tap in nail heads and use the compound to fill the holes and depressions made by hammer strikes.

3. Apply the first coat. Use a sealer over any remaining stains, mold, mildew, and porous surfaces, such as unpainted plaster or drywall and large areas of joint compound or patching plaster. Use a primer on all other surfaces.

If the top coat will be paint, have the primer tinted to match the finish color so you don’t have to apply a second coat.

Bargain prices and low FHA down payments are fueling home sales

Few ideas tug at the heart strings like the thought of having a home of your own. For many, the days of longing may be coming to a close. The goal is in sight.

Not only is the home you want now within your price range, but it will take less cash than ever before. Think FHA.

If demands for huge down payments have kept you from moving forward, a Federal Housing Administration loan will remove that obstacle. It requires only 3.5 percent down.

Interest rates are the lowest they’ve been in more than fifty years. Some FHA loans charge only 4 percent interest on a 30-year loan and 3.33 percent on a 15-year mortgage.

A $100,000 30-year loan at 4 percent would have payments of just $477 a month. For $150,000 the mortgage payment would be about $617 per month, and a $200,000 mortgage payment would be $954. The cost of mortgage insurance would be added when you make a low down payment.

If you have a dream home in mind, you’ll be pleased to know that the FHA can now guarantee mortgage loans as large as $729,750 from private lenders in the most expensive regions of the United States. That’s up from $625,500. For the limit in any city, visit www.fha.gov and click on “conforming loan limits” and “high cost areas.”

Just being able to afford a home is the least-important reason for buying one. The freedom of it, added to the living space you need, the conveniences and beauty are the primary rewards.

The jurist and poet Oliver Wendell Holmes said, “Where we love is home, home that our feet may leave, but not our hearts.”

Could that describe the home you have in mind, one that the hearts of your children will always return to?

Our new website gives you access to a wealth of real estate knowledge along with cutting-edge tools that will simplify the decision-making process. In addition to a crisp layout and easy to navigate interface, some other features you might enjoy include:

·Quick and Advanced property searches
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Explore our website and find out what Janko Realty and Development can do for you.

Our website was created by an independent local developer, Brian Smith (bjsmith3@gmail.com)