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5 Questions You’re Afraid to Ask Your Home Insurer By Joe Szabo, Scottsdale Real Estate Team

December 2, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team Ever have a burning question for your insurance company that you didn’t want to ask because you were too afraid? You may have thought, “What if I ask this question and my premium goes up? Or what if they drop my policy altogether?” If you’ve ever had those fears, today is your lucky day. We know the implications of approaching certain topics with your insurer, so we posed five troublesome insurance questions to Mike Pesackis — a licensed HomeInsurance.com agent since 2006. Here are his insights.

I’m getting my kids a trampoline for Christmas. If I don’t tell my insurer, my home insurance premium won’t go up, right?

Correct — but if there is a claim associated with that trampoline, you might not be covered, either. Trampolines are responsible for many injury claims every year. As a result, the presence of a trampoline is an underwriting concern. Typically, owning a trampoline does not result in a rate increase. Some carriers will require protective netting, while others will not insure a home with a trampoline at all. This is definitely a case where disclosing to your carrier up front is a much better strategy than possibly being denied a claim.

I was in a car accident, but there was no damage to either vehicle. Should I tell my insurance provider?

This is a sticky one. If it were me, I would not tell my insurance agent because this would open up a can of worms unnecessarily. However, if the police showed up on the scene and filed a report, your insurance carrier will definitely find out eventually. In that case, it would be in your best interest to have your carrier find out directly from you.

I adopted a dog from a local shelter. Should I tell my insurer?

Absolutely! Regardless of the breed, having a dog in your house increases risk, which means your carrier needs to know. Many home insurance carriers cover dog bite liability; however, a claim would only be covered if your carrier actually knows you own the dog. Depending on the breed of your dog or whether the dog has a bite history, the insurance company could raise your premium, decline to renew your policy or exclude coverage for the dog altogether. The best thing to do is call your provider ahead of time, reveal your plans and let the carrier help you through the situation. Generally, carriers only consider a few breeds — including pit bulls, Dobermans, and Akitas — automatic disqualifiers. Often, though, getting a dog is a non-event, especially if you’re getting a typically non-aggressive breed such as a Lab, beagle or poodle.

Will my auto insurance premiums go up if I file a claim for a broken windshield?

This depends on your carrier and how your policy is written. Many carriers will offer “full glass” coverage on comprehensive claims — meaning that a broken windshield would be replaced without you paying a deductible, and with no impact to your premium. If you do not have full glass on your comprehensive coverage, your premium might go up slightly, but not nearly as much as it would for an accident. Carriers are typically pretty lenient when it comes to comprehensive claims (such as a broken windshield) because these types of issues do not have anything to do with your abilities as a driver.

I run a business out of my home. Is my home business covered under my home insurance policy?

Not typically. Home insurance carriers shy away from businesses in homes because with increased foot traffic comes increased risk of liability claims (such as a slip/fall). In some cases, your business-related equipment or inventory might not even be covered by your home insurance policy. Your best bet would be to call your carrier to discuss your business. Depending on the scope and nature of your business, the carrier might require you to get a professional liability policy or small business insurance policy to further mitigate risk. Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, info@ScottsdaleRealEstateTeam.com or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

Happy Thanksgiving From Joe Szabo, Scottsdale Real Estate Team

November 27, 2014 Joe Szabo

From Joe Szabo, Scottsdale Real Estate Team

Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, info@ScottsdaleRealEstateTeam.com or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

Even With More Homes for Sale, Low-Priced Homes Tough to Find By Joe Szabo, Scottsdale Real Estate Team

November 25, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team There are 15.8 percent more homes on the market this year than last year, but whether home shoppers will be able to find one to buy will depend on their budget. Zillow’s Real Estate Market Reports for October looked at housing inventory across the nation by price tier. In most markets, the share of high-priced homes for sale was growing much more quickly than low-priced homes for sale. Overall, the housing market is softening. Home values are growing at a slower pace. The U.S. Zillow Home Value Index is up 6.4 percent from October 2013, its slowest annual pace of growth in more than a year. That’s good news for buyers. Zillow Chief Economist Dr. Stan Humphries said he expects to see demand for lower-priced homes grow as more millennials prepare to buy. But in markets around the country, buyers with a budget on the low end for their metro are likely to find tight inventory. In a majority of markets, the share of homes in the upper price range was growing faster than the share in the lower price range. In Dallas, Atlanta, Phoenix and Nashville, there were at least two times more homes for sale priced in the top third of the market than in the bottom third. To dive into our recently released October Real Estate Market Reports, visit Zillow Research. Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, info@ScottsdaleRealEstateTeam.com or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

Refinancing in a Volatile Rate Market: Get the Facts First By Joe Szabo, Scottsdale Real Estate Team

November 22, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team Mortgage rates hit 16-month lows in mid-October, spent three weeks slowly inching up, and have now dipped back to those lows. Rates rise and fall when bond markets sell off or rally, respectively, based on how they interpret daily economic news and data. This rate volatility will continue as the Fed winds down its six-year rate stimulus campaign. If you understand the loan process, you can capitalize on rate volatility by capturing the lows when they come. Ask your lender the following five questions to align your loan process with this volatile rate market.

1. Did I miss the mini refinancing boom of 2014?

No. Rates are low enough that the mini refi boom from mid-October could resume. But with economic uncertainty driving rate markets up and down daily, you must have a plan. You can’t just lock a rate when they dip and hope your loan closes on time (see #5 below). The best approach is to contact a lender if you’re considering refinancing. Taking this step ensures you will have the loan process underway, with a rate lock being the last thing you’re waiting for. Then you can set a rate target with your lender based on short- to medium-term rate market expectations, and give your lender a standing order to lock the rate when they see it during volatile daily trading.

2. How do I get accurate rate quotes without submitting all my documentation?

As you begin your loan process, you can find out exactly what lenders are quoting by submitting a custom loan request on Zillow. However, it is important to note that once your credit report is run and your financial and property documentation information is collected, any changes or updates to your original loan request can affect your loan amount and mortgage rate. Additionally, a lender will analyze whether the math supports paying points on a refinance given your objectives—paying 1 point (which is 1 percent of your loan amount) should lower your rate by at least .25 percent. In this case, the interest cost savings from the .25-percent lower rate repays the cost of the point in four years, and everything from that point forward is pure benefit from the lower rate. You should also work with your lender to determine whether a cost or no-cost refinance is better for you financially. Refis cost about $2,500 to $4,500 depending on your market, and your rate will be .125-percent to .25-percent higher if you choose a “no-cost” refi. Knowing this, you can prepare for a lender consultation by analyzing cost vs. no-cost refi options in advance.

3. Why should I submit my documents as soon as possible?

Your lender will need to pull your credit report, monthly debt, pay stubs, W-2s, tax returns, asset statements, and anything else impacting your financial profile such as promotions, career changes, job gaps, maternity leave, loans you’ve made or received, and income or debt from divorces. Your loan officer will have to collect and analyze these documents, which an underwriter at the bank will then have to approve. An appraiser must inspect your property, then submit a full report for the lender to review, along with a title report, insurance, and any other relevant property information (such as a full questionnaire, budget, bylaws, homeowners association rules, and Articles of Incorporation if your property is a condo). If you start the loan process early by submitting your application and required documents, you can avoid unpleasant surprises or adjustments before you lock a rate.

4. What if rates drop after I lock my rate?

You have options if this happens. Whether you’re locking a purchase or a refi loan, rate markets will move up or down after you lock your rate. If rates rise, your lock protects your rate as long as your loan closes within the rate lock period (see #5 below). If rates drop, ask about your lender’s “rate renegotiation” policy. Most lenders follow a model similar to this: If rates drop at least .25 percent, you can renegotiate your rate to capture about half of that drop. So if you locked at 4.125 percent with a lender that followed this type of model, and rates dropped to 3.875 percent, you could renegotiate your rate to 4 percent.

5. Will my loan close before my rate lock expires?

Ask your lender if their quoted rate allows enough time to close your refi given all factors of your profile and their bank’s “turn times.” It’s important to know refinance loans in a rate-fueled market don’t close as fast because lenders will always put their purchase loans ahead of their refis in line for approval. Be sure to ask your lender about their lock extension fees, and make them clarify who pays the extension fees: you or them? Lock extension fees range widely. They can be .125 percent of the loan amount for 15 extra days, or .125 percent for 5 extra days. On a $250,000 loan, that means a 15-day extension could range from $312.50 to $937.50. Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, info@ScottsdaleRealEstateTeam.com or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

How to Prepare Your Home for Holiday Guests By Joe Szabo, Scottsdale Real Estate Team

November 19, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team When friends or relatives are coming to visit for the holiday season, make their visit a pleasure by thinking ahead and offering them your gracious home. Fruit baskets and floral arrangements aren’t necessary — just a bit of thoughtfulness and good planning. The following steps will walk you through what you need to know to make your next hosting experience a great one for everyone.

Valet welcome

If parking in your neighborhood is limited, be sure to reserve your off-street spot for your guests. Go out ahead of time and track down a convenient street spot if you need to — just don’t make your guests spend their first moments at your place looking for a parking space.

Prep the porch

This area is the first thing guests see when visiting your home, so make sure it is well lit, freshly swept and outfitted with clean cushions and fresh plants.

Grab-and-go

Create a simple breakfast station by keeping fresh fruit, breakfast cereals and other essentials together on the counter for early risers. Give guests a quick kitchen tour the night before so they can get their morning coffee or tea without waiting for you in the morning. If you want to set an extra-special table, adding a monogrammed mug and a small flower arrangement is lovely and doesn’t take much extra effort.

Make it casual

Cleaning your home before guests arrive is a must; however, keeping the atmosphere around the house as close to normal as possible will help put guests at ease. Newspapers on the coffee table and a casual playlist in the background set the stage for relaxation.

Stock the essentials

Your guest room doesn’t need to be outfitted like a four-star hotel, but certain basics should be in place to make your visitor comfortable. The essentials include fresh sheets, pillows and blankets on the bed, window coverings, a working light, bath towels, a wastebasket and a cleared shelf and hanging area in the closet. Bonus items include a fan, iPod docking station, clock, hairdryer, snacks, mini toiletries such as razors, aspirin and hairspray, and a surge protector for charging devices.

Allow for downtime

It’s too easy to over-plan activities for holiday guests. Having a few tentative outings or other visitors on the agenda can be helpful, but avoid the urge to fill every last minute. Most guests will really appreciate some blocks of unstructured time to relax, chat, read, nap or even venture out on their own.

Jump right in

When dinnertime rolls around, feel free to have guests pitch in with a few simple tasks in the kitchen. Ask them to set the table, pour the wine, choose the music, or prep greens for a salad, and soon your visitors will be feeling right at home. Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, info@ScottsdaleRealEstateTeam.com or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

Rates Near 2014 Lows: What You Need to Know Before Locking In By Joe Szabo, Scottsdale Real Estate Team

November 13, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team Mortgage rates hit 2014 lows in mid-October and are still near 16-month lows. The rate dip has prompted many homeowners to explore refinancing and many home buyers to ask questions about how they can secure a low rate. Here’s a rate reference guide to help you navigate this market and obtain the best terms on your financing.

Understanding the rate market

Most home mortgages in the U.S. are eventually packaged into bonds, and rates change as mortgage bonds trade in the open market each day. Bonds pay a rate of return to investors each year. These “rates” rise when bond prices fall, and fall when bond prices rise — then consumer mortgage rates typically follow suit. Bond markets tend to behave the opposite of stock markets in that bonds tend to sell (mortgage rates up) on positive economic outlooks and rally (mortgage rates down) on negative economic outlooks. Since mid-October, a more negative economic outlook has pushed bond prices higher and mortgage rates lower, and it’s been driven by a variety of factors, including:

Minutes from the Fed’s Sept. 17 rate policy meeting were released Oct. 8, confirming that, even though the Fed is slowly unwinding post-crisis rate stimulus programs, it maintains a cautious economic outlook. This sentiment also contributed to a big stock selloff, which further helped bond prices rise and rates drop.
Persistent weakness among European consumers and banks
Overall lackluster U.S. economic growth data
The continued threat of Ebola spreading to the U.S.

Lender rate quotes explained

Whether you’ve found your lender on Zillow or through another source, eventually you’ll need all fees disclosed to you line by line. If you don’t get the line-item fees when first quoted, the easiest way to figure out if you’re being quoted a rate that has hidden fees is to review the APR along with the rate, which lenders are federally required to disclose to you. APR is simply a representation of what a rate would be if all fees were included. The APR will be notably higher than your actual rate if extra fees are built in. For example, if your 30-year fixed rate quote was 4 percent, and the APR was 4.083 percent (or something similarly close to 4 percent), you can rest assured that when you see the line-item fees, there won’t be any extras beyond standard items such as underwriting, appraisal, credit report and title/escrow fees. However, if your APR was much higher, look out for additional origination or discount fees —also called points. It’s fine to pay points if you’re using them to “buy your rate down.” As a rule of thumb, paying 1 point (which is 1 percent of your loan amount) should lower your rate by 0.25 percent or more. In this example, the interest cost savings from the 0.25 percent lower rate repays the cost of the point in four years, and everything from that point forward is pure benefit from the lower rate. Make your lender walk through this breakeven math with you.

Rate lock tips for refinancers and home buyers

Once you’re ready to buy or refinance, you’ll want to lock in your rate, which ensures the rate for a set number of days. Timing is crucial. If you lock in a rate and you haven’t submitted an application to your lender, then you’re unlikely to close on time for the locked rate. If you’re refinancing, it’s important to contact a lender as soon as possible, especially when rates are volatile. This will increase your odds of being prepared to lock in a great rate. If you’re buying, you need to know that a rate lock runs with both a borrower and a property. So you can’t lock a rate until you’re in contract to buy a property. Watching the market is useful to know the rate range you might end up in, but you’ll be locking a rate at the market levels when you enter into contract. Your lender can advise on the short-term rate outlook to determine the best time to lock. Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, info@ScottsdaleRealEstateTeam.com or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

Full Disclosure: Reveal Your Home’s Flaws to Speed the Sale By Joe Szabo, Scottsdale Real Estate Team

November 10, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team In most states, the law requires sellers to fill out paperwork regarding their knowledge of the property they intend to sell. Many agents and sellers see disclosures as a thorn in their side. Why would they badmouth their property or listing? Why not say as little as possible and see if the buyer discovers any issues on their own? This is a penny-wise and pound-foolish mentality. Non-disclosure can lead to major headaches during escrow. You could lose the buyer, be forced to renegotiate the price or have to put the property back on the market. Non-disclosure can also lead to litigation months or even years after the sale. Self-disclosing, pre-inspections and putting it all out there prior to a buyer making an offer helps to usher the sale along and make the process simpler. It’s smart business, and ultimately saves time and money. If handled well, disclosures and calling out known issues helps inform your pricing and marketing strategy. Here are five tips to use disclosure to your advantage.

Order a building report

Each municipality has a building department that keeps records on every property. For a small fee, they provide building reports that contain valuable information about the home, such as the building’s history, permits issued, closed permits, violations, zoning information and sometimes landmark or historic status. Buyers or their banks will likely request this report. When they see open permits or violations, you better believe they are going to ask you to cure them, request a credit or walk away. Be prepared by ordering a building report early in the selling process. If you have issues to address, you can take care of them before you list the property. The potential buyer will then see a clean report, which will inspire confidence — not only in the property, but also in you as a seller.

Have inspections done prior to listing your home

Most sellers balk at this idea. Why pay to have the home inspected if you plan to sell? The answer is so that you can ultimately make more money. A home listed for sale at a great price gets a buyer in the door to make an offer, but that buyer will have his or her inspection regardless. It they find dry rot in the garage, they will either walk away from the deal or ask you for money. If you lose the buyer, the property goes back on the market with a stain on the listing. Everyone will ask what happened to the first deal, and you will likely be forced to disclose this new, known issue. If you credit the buyer, your ultimate net proceeds will be lower than if you had priced the termite work into the asking price and let buyers know about the issue up front.

Be the bearer of the bad news

Provide buyers with disclosure documents before they make an offer. Let them know you recently replaced the roof, completed some electric work without a permit or once had a window leak but remedied it by replacing some flashing. By revealing these issues, you’ll let the buyer know they are working with a fair and honest seller, and they will know more about the home. They will likely pay more for that piece of mind, and might even feel more comfortable moving ahead — even with some issues.

Arm your agent with knowledge

The listing agent is the only person who sees, meets and knows every member of the transaction. They should know as much about your home as possible before taking the listing. Knowing about defects helps the agent advise you on price and strategy for going to market. If your home needs a new roof and some electrical updating, the agent will likely factor that into your list price. Your listing agent is your team member. Keeping information from them will make you appear to be dishonest when the issue eventually comes up.

Get buyer sign-off on disclosed information

Nobody wants to be bothered with a legal issue after the sale. But when markets slow, or a buyer feels remorseful about their purchase for any reason, it’s not uncommon for them to go after the seller. To avoid post-sale legal hassle, document any issues in writing, and get the buyers to sign off on all reports, inspections and disclosures. This step is especially important with known issues or big-ticket disclosure items. No one likes surprises and you, the seller, ultimately lose when you don’t properly disclose information about your property. Think of the buyer as your customer, and treat them well. You’ll be better off in the long run. Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, info@ScottsdaleRealEstateTeam.com or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

Is It Too Hard To Get a Mortgage? By Joe Szabo, Scottsdale Real Estate Team

November 6, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team Six years after loose lending guidelines caused the worst financial crisis since the Great Depression, many still argue it’s too hard to get a mortgage in this country. The debate was framed well recently as USA Today squared off with the Mortgage Bankers Association (MBA), the country’s top housing finance advocate. USA Today said that human discretion has been taken out of mortgage decision making at banks, and they rely too heavily on transferring loan risk to government-backed entities Fannie Mae and Freddie Mac. The paper printed a rebuttal from MBA head David Stevens saying lenders are running scared because unclear regulations and heavy-handed enforcement can put them out of business overnight for lending to imperfect borrowers. Both make a similar point in different ways: Home lending got too tight post-crisis and is still too tight. But before we discuss how it’s loosening, let’s remember how we got here.

Brief history of the mortgage industry

The global financial crisis that began in August 2007 was set off by bad mortgage lending. Until the 1980s, consumer banking held to a simple “savings and loan” model in which community bank reps knew their clients’ finances intimately and could make common sense loan approval decisions; and lenders funded home loans from deposits with modest home price increase expectations. Then an innovation called loan securitization enabled community banks to sell pools of loans to Wall Street firms, who would create investment funds out of those mortgage pools. Instead of keeping loans on their books until more deposits could be raised to lend more, banks could unload loans in bulk to raise money to fund more loans. This approach placed more emphasis on the originate-and-sell-your-loans model. Over time, this practice made it unclear whether the lending bank or a future investor was accountable for loan quality. Two other trends also blurred accountability: a banking mergers and acquisitions wave changed community banking to global banking, and a deregulatory wave meant “savings and loan” banks became Wall Street trading firms that could package and sell their loans.

Further complications develop

Simultaneously, as the 1990s and 2000s progressed, home prices began an upward trajectory that — thanks to loose monetary policy, looser loan guidelines and unregulated mortgage securities trading — continued without interruption until home prices started falling in mid-2006. Banks lent more and transferred the risk elsewhere. As such, loan standards virtually disappeared, and loans were being made to borrowers with poor credit, and no jobs, income or assets. When these loans started going bad and set off the crisis, accountability was hard to pin due to loans being sold and securitized. A massive re-regulatory wave followed the 2008 crisis. By 2010, a new body of laws was created (called Dodd-Frank), and the laws have been implemented slowly each year since then. It’s now illegal to make loans without verifying a borrower’s income, assets and credit score, and it’s illegal for banks to sell loans without retaining some sort of accountability.

The new lending landscape

It took more than 20 years of loosening loan guidelines to spark a full-blown financial crisis. However, it’s only been four years since Dodd-Frank began the slow process of re-regulating, so it’s not yet fair to say that lending is too tight. As lenders slowly get more comfortable with the new laws, it’s also important that you practice common sense. A lender is there to serve you and do the home buying math for you. The math you most need to understand is your debt-to-income ratio. This is a number that tells you what percentage of your income is going to housing and other debts. The debt side of your debt-to-income ratio only includes your full monthly housing obligations and items from your credit report such as car loans, student loans and credit cards. It doesn’t include costs like food, utilities, clothes and spending money. The income side of the ratio uses gross income, not take-home pay. So while lenders sometimes will allow for a slightly higher debt-to-income ratio, you need to determine if you can really afford a home and still maintain your desired spending habits. As for how loan guidelines are evolving, here are some highlights: Low down payment options: Fannie/Freddie is currently working on an option for borrowers to put only 3 percent down on homes, with the loan maxing out at $417,000. And the Federal Housing Administration (FHA) still does 3.5 percent down. In both cases, mortgage insurance is required, and lenders can choose whether they layer more conservative requirements (for income, credit scores, etc.) on top of the Fannie/Freddie/FHA guidelines. Low credit score options: The average credit score on loans Fannie/Freddie is buying today is about 740, but they will buy loans with credit scores as low as 620. Again, it’s up to the individual lender to decide whether they layer more stringent credit score requirements on top of Fannie/Freddie guidelines, so ask your lender. Lower or inconsistent income options: If your debt-to-income ratio is slightly higher because you’ve had a gap in income, you’re self-employed or your income is heavy on bonuses or commissions, certain lenders might make exceptions on this. Find a retail bank lender that doesn’t sell its loans to Fannie, Freddie or other investors. It’ll be the most likely to make these exceptions, and will only make them if there are other compelling factors like strong credit scores, and money left over after you close. Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, info@ScottsdaleRealEstateTeam.com or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

Warning! Fall Sticker Shock Ahead By Joe Szabo, Scottsdale Real Estate Team

November 3, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team Brace yourself for sticker shock this fall! Here are five common expenses that are on the rise, and tips for minimizing the monetary bite.

Grocery staples

You’ve likely seen the headlines: expect hikes this this fall on everything from oranges, bacon and milk to cheese, butter, chocolate and more. What to do: Start by clipping coupons — studies show that the average family can save up to $1,000 per year. Also give generic brands and private labels a try. A family that spends $100 per week on groceries could save up to $1,500 annually with this strategy, according to Consumer Reports. Finally, buy alternatives such as turkey bacon instead of bacon, and margarine instead of butter.

Airfares

Did you know that the average cost of a domestic round-trip ticket reached about $510 in the first half of 2014? And that doesn’t include extra fees such as checked luggage, fast-track security lines, early boarding, additional legroom and other perks that can add from $9 to $299 to the cost of a flight. What to do: While some “gotcha” charges are unavoidable, airline-affiliated credit cards that offer benefits such as discounts on in-flight entertainment, meals and more can translate into big savings. You should also buy your ticket about six weeks in advance for the biggest savings.

Clothing

As the economy recovers, apparel demand is rising, yet supplies are tight. Plus, we’ve been up against some of the worst weather patterns since the 1930s, and cotton crops have been totally destroyed. Given that nearly three-quarters of all garments sold in the United States contain cotton, prices have risen — up about 5-8 percent this year — and are expected to continue increasing. What to do: Shop consignment, and dig deep into your own closets — and even your friends’ closets. Clothing swaps are big right now. They’re a great way to declutter your closet and update your wardrobe, all while hanging out with your favorite people.

Homes

Not only are prices on the rise, but so are mortgage rates. Zillow’s chief economist, Stan Humphries, predicts rates will rise from their current level of just below 4 percent to 5 percent by the end of 2015. What to do: If you’re on the fence about buying a home, think about entering the market sooner rather than later. After all, waiting can be costly. Even a small, 1-percent increase in rates reduces your purchasing power by a whopping 11 percent. To put this into further perspective: if you could afford a loan of $400,000 at a rate of 4 percent, an increase to 5 percent would mean you could afford a loan of just $356,000.

Electricity rates

While electricity rates vary widely from one state to the next, the reality is that due to more stringent regulation and other factors, they’ve been rising just about everywhere over the past decade, jumping by the double digits in many states, even after accounting for inflation. And there’s no end in sight. In fact, National Grid recently warned its customers that they should expect their electricity bills to be as much as 37 percent higher than last year – starting in November. What to do: Your home’s biggest electricity guzzler is air conditioning and heating, accounting for as much as half of your energy bill. Make sure your systems are running at their highest efficiency by having annual professional cleanings and checkups. Schedule a service call now. In the meantime, become as energy efficient as possible. Steps such as installing programmable thermostats, lowering the temperature when you go to bed, or using a high-efficiency furnace or boiler can reduce your bill by 10-30 percent. Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, info@ScottsdaleRealEstateTeam.com or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

Halloween cocktails at metro Phoenix restaurants By Joe Szabo, Scottsdale Real Estate Team

October 30, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team It’s fun to get in the mood for Halloween with decorations, costume shopping, and, for adults, themed cocktails. Some of these are classic drinks with scary-sounding names. Others are creative libations dreamed up by Valley bartenders. Whatever the case, get in the spirit and enjoy one of these creepy cocktails: Zombie This tropical cocktail was named for the way it’s said to make the imbiber feel. Invented in the 1930s by Donn Beach of the Don the Beachcomber restaurant in Hollywood, the drink features rums, liqueurs and fruit juices. At Crudo, Micah Olson created his version ($10) with four kinds of rum, absinthe, sweet falernum syrup, Don’s Mix (a grapefruit and cinnamon syrup made for tiki drinks), Angostura bitters, grenadine and lime. Details: Crudo, 3603 E. Indian School Road, Phoenix. 602-358-8666, crudoaz.com. Vampiro This New Age cocktail is similar to a Bloody Mary, but with a twist. The bartenders at Clever Koi made their version ($10) from tomato, orange and lime juices; tequila; hibiscus and ginger syrup; and Bittermens Hellfire bitters. The drink is $10. Details: Clever Koi, 4236 N. Central Ave., Phoenix. 602-222-3474, thecleverkoi.com. Bacon Bloody Mary There are many theories for how this popular drink got its name. The most well-known is that it was named after Queen Mary I of England. The icy queen was nicknamed “Bloody Mary” because of her order to execute Protestants. No matter the name, the drink is delicious with brunch. Fox Restaurant Concepts’ Bacon Blood Mary cocktail is made with spiced tomato mix, bacon vodka, cracked pepper and Worcestershire sauce. The cocktail is $9 at Culinary Dropout and $7 at Zinburger. Details: Locations Valley-wide. foxrc.com. Corpse Reviver No. Blue Although it sounds like it’s named for a zombie apocalypse, the Corpse Reviver family of cocktails is actually intended as “hair of the dog” hangover cures. Each version has different ingredients. The most popular is the No. 2, made with gin, lemon juice, triple sec, lillet and a dash of absinthe. Ross Simon of Bitter & Twisted created this No. Blue version ($10), a mix of gin, blue curacao, lillet blanc, lemon juice and a touch of absinthe. Details: Bitter & Twisted Cocktail Parlour, 1 W. Jefferson St., Phoenix. 602-340-1924, bitterandtwistedaz.com. El Diablo The bartending staff at Blue Hound created several Halloween cocktails, including El Diablo. The drink ($10) features hibiscus-infused tequila, creme de cassis and lime juice, shaken over ice, then topped with ginger beer and garnished with a lime wheel. Details: Blue Hound Kitchen & Cocktails, 2 E. Jefferson St., Phoenix. 602-258-1231, bluehoundkitchen.com. Vampire Bite and Vesper the Mansion Ghost Mixologist Charlie Zeiler is scaring up guests with his spooky concoctions. The Vampire Bite features Old Tom Gin, Campari, lemon juice, raspberry syrup, an egg white and Peychaud’s bitters, shaken over ice and strained into a coupe glass. Vesper the Mansion Ghost is a mix of gin, vodka and lillet blanc, mixed with ice and strained into a coupe. Details: Mix It Up Bar and T. Cook’s, Royal Palms Resort and Spa, 5200 E. Camelback Road, Phoenix. 602-840-3610, royalpalmshotel.com. See more here Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, info@ScottsdaleRealEstateTeam.com or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

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