Louisville Real Estate Blog | Brad Long Real Estate Group | Keller Williams Louisville East

Construction Starts on Bridge to Connect Downtown Louisville and Jeffersonville

After a very long multiple year wait, the groundbreaking took place on the bridge that will connect downtown Louisville and Jeffersonville. The governor, community leaders and many residents were on hand to witness the beginning of the construction of the bridge. The downtown crossing is half of the $2.6 billion Ohio River Bridges Project.

The other half is an East End bridge that will connect Prospect Kentucky with Utica, Indiana. Both bridges are scheduled to be completed  in 2016. The new downtown bridge will carry six lanes of northbound Interstate 65 traffic, working in tandem with a revamped Kennedy Bridge, which will be converted to six lanes of southbound traffic. The downtown bridge project is expected to employ about 500 people.

Please visit Louisville Real Estate for all of your real estate needs in the Louisivlle, KY area.
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LOCAL REALTORS HAPPY WITH LOUISVILLE INCREASE IN HOME SALES

Flash-Local real estate professionals are elated over latest stats showing how hot the Jefferson County real estate market and sales have become.  According to Metro Search Inc. statistics, 37% of the homes on the market in Jefferson County have been selling in 20 days or less. That includes the peak period of the real estate bubble in 2005 when 26% of the homes on the market sold in 20 days or less. Some experts are saying that some homes are actually selling in the first few days on the market. Home sales in Jefferson County for the first five months of this year are up 17% over the same period last year. Sales are pending on about 29% of the homes on the market in Jefferson County and other surrounding Kentucky counties, according to  the Greater Louisville Association of Realtors.

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Always Check the Permit History of Your New Kentucky Home

When purchasing a new home, you want to always protect yourself from unwanted surprises. Yes we think we do everything possible like a home inspection, title searches, etc., but few of us ever think about going into the building department and asking about old permits that may have been taken out on the property that we are looking at to buy. You always want to find out as much as you can about the property before the closing.

I always suggest that the offer should include an inspection contingency even if you're making an offer in any kind of competition. The contingency wording should be broad enough for you to inspect whatever you deem necessary, so you will have the confidence that the home will satisfy your housing needs within a budget you can afford. You should always have the option to withdraw from the contract and have your deposit returned if the seller wont correct the problem(s) or at least participate in a mutual solution of the problem(s).

An important item that is often overlooked during buyers' inspections is the permit history on the house. It can be a hassle dealing with the city bureaucracy, and few buyers have time to go to the city building and planning department. If you can't do the investigation yourself, you should pay someone to do it for you because overlooking it could come back to haunt you for years to come. Many times previous owners have taken out permits and either not finished the work, or not called for the final inspection of whatever work they were supposed to do. Some times the previous owners just forgot to call the city for final buyoff and many times the previous owner did more than what the permit called for and sometimes the work was done incorrectly or not to code.  While you're checking on old permits, be sure to find out if any back fees are owed. You may need to check directly with the cashier at the building and planning department.

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Facts About Buying Your Louisville Home

If you are like most people, when you decide to buy a new home, you will make a down payment and get a mortgage loan on the balance.  If that amount falls short of 20% of the homes value, and you are going to get a conventional loan, be aware that you will most likely have to pay for 'private mortgage insurance' (PMI). Most lenders go by the old rule that the more a person puts into the purchase then the lower is the risk.

Private mortgage insurance (PMI) is a policy that protects the lender against financial loss if you should default on your loan. Lenders always will seek to minimize their risk by asking for a substantial down payment, usually 20% or more, or will want insurance that will guarantee them the principal amount if they have to foreclose.

The lender benefits from the PMI insurance but the borrower has to pay for it. The premiums will vary.  Factors that affect the cost of the insurance include the type of mortgage, loan amount, and the amount of your down payment.  Generally, you can expect PMI to be about 0.5 percent of the loan amount.  

Is there a way to avoid having to pay for PMI? Some lenders will waive the PMI requirements if you pay a higher interest rate on your mortgage loan. In this option, they actually build the PMI cost into the loan and make the premium payments for you.  There are other options available that vary from lender to lender and it's best to discuss this with your lender when deciding on what type of PMI loan you want.

If you have had your loan for awhile and been paying the PMI, the PMI portion will eventually end.  When you have at least 20 percent equity in your home (home value minus loan balance), you can ask your lender to have PMI cancelled. Most lenders will require a good payment history, be up to date and current with the payments, and have no liens against the home.  Some mortgage loans will have a minimum wait time before PMI can be eliminated. The lender will require a new appraisal of the home and the homeowner will have to pay for that.
PMI is not tax deductible. You pay the fee and never see any benefit from it.
It is wise to keep abreast of your homes value at all times and then notify your lender when your loan to value has gone below 80%.

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BANKS AND CREDIT UNIONS..WHAT'S THE DIFFERENCE

I am often asked by my customers about what the difference is between a bank and a credit union especially when one of my Louisville buyers is looking for a mortgage loan source. I am probably asked the same question several times in a month.

To be as brief as possible:
Bank and Credit Unions are more alike than they are different. The key philosophy behind them are different in that banks operate with the goal of generating profits and credit unions are community based institutions that are non profit. In credit unions, you must have a membership and it requires that you have an account with minimum deposits, and each member is a part owner in the credit union. The higher the deposits, or shares, the higher the share of profits.

The credit union has a Board of Directors who makes the major financial decisions. A bank is owned by a private company or corporation. Most credit unions usually finance small projects related to community development and try to keep money within the community. Banks, on the other hand, tend to finance larger projects and they may or may not be in the community where the bank is located.  Usually the interest rate charged by banks is a little higher than what credit unions charge.

Credit unions are exempt from paying most state and federal taxes and therefore usually able to offer higher savings account rates and usually lower rates on loans. Banks also tend to have larger variety of products and services that  allow you to centralize your banking needs. One of the biggest disadvantages in joining a credit union is their relative inconvenience as they typically have less ATMs and branches and usually lack variety in investment products and services.

Choosing a bank or credit union is all about what's suitable for your own particular needs. There can be differences in rates and services in different credit unions. It is best to check out the credit unions that you may be eligible to join and your bank to see what type of mortgage loans are offered and their going rates.

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Credit Reports Do Not Tell Everything About You

To most of us, it seems like the credit reporting agencies are constantly spying on everything we do and every move we make. Our names, address and social security number along with our birthdate appears on our credit reports. There are some things though that don't appear on credit reports, and the lenders, or banks, can't see when they run a credit report on any of us.  Here are 7 secrets that your credit report won't reveal:

1    YOUR SALARY
Salaries stopped being on credit reports in the early 1990s. They had been up to then but it was decided that there were too many variables involved for them to be accurate. Other reasons are that income really isn't a measure of credit worthiness, it is just a measure of capacity. A credit report and your credit scores are meant to tell a creditor whether or not you are going to make a payment, not whether you can make a payment.
Unemployment benefits, alimony, child support and public assistance  does not appear on credit reports.

2    EMPLOYMENT STATUS
Your job information is not shown on your credit report. If you lose your job, no one will know. Employment information, though, could be there and will vary slightly depending on which of the three credit bureau reports a lender pulls. Names of your employer or past employers could be on the report if you applied for credit and listed them on any of the applications you might have filled out. Most agencies wont list your job title or dates of employment. Employment information reported varies with the three agencies.

3    SPOUSES CREDIT HISTORY
Contrary to popular belief, when someone runs a credit report on you, that is all he or she will see. If you are a co signer on certain accounts, the other names or relationship to you will not be shown. One thing you might notice no matter where you live: When you pull your own credit report, some versions will include your spouse's name, says Ulzheimer. But the reports lenders and others view won't have that.

4    ANY CRIMINAL PAST HISTORY
Credit bureaus don't include criminal conduct on credit reports.
Three exceptions: First, if you have a financial situation that also involves the court system, such as a judgment or lien, it will show up on your credit report. Second, child support payments can also show up as a regular debt on your credit report. If you receive a fine or ticket, don't pay it and it goes to collection, then that collection activity could show up on your report. But it would appear as a debtor trying to collect an overdue debt. There wouldn't be any details on the initial infraction.

5    MEDICAL BILLS AND DEBT
The Fair Credit Reporting Act prohibits listing information on your report that jeopardizes your medical privacy. Often, this means medical debt doesn't appear unless it goes to collections. One possible exception: Pay with a credit card or through a third-party lender and the balance could show as a regular debt, minus any medical information.

6    NONTRADITIONAL TYPE LOANS
Pawned some valuables? Taken out a payday loan? Signed for a car title loan?  Those transactions don't show up on your credit report. But if you default and the lender enlists a collection agency to come after you for the balance, that action likely will go on your report. Usually utility payments for gas, lights, telephone, etc., wont show up on your credit report, however some do report late pays. If a bill is not paid and goes to collection, then that may end up on your report.

7    YOUR NET WORTH
A credit report is basically a list of all your current and recent past debts and obligations. That is all.
There's nothing on a credit report that talks about how much money you have in the bank, the money you have in a brokerage account, your stock options or any other assets you might have. Also not on the report: the worth of your home or home equity. The only related item that you could see: your mortgage, plus any loans or liens you have on the property.

Some other things that usually wont show up on your credit report:
*Not paying your rent.
*Late payments of taxes.
*Late payments to small vendors.
*Anything your creditor agrees not to report.
*Not carrying a balance on a credit card account.

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SOME MISCONCEPTIONS REGARDING CREDIT

Almost every day I somehow get involved with having to explain to customers and potential customers, the importance of having and maintaining a good credit rating.  In recent years, most of us have gone through some sort of situation where our credit rating (good or bad) was threatened or jeopardized in some way. Most of us are pretty well informed about credit ratings and how they work. Many times a day, we hear about identity theft and how it can hurt your credit rating. With all of this said, I thought maybe I could clarify some misconceptions regarding credit and credit reports. The subject is important to me as it affects my business and my customers and potential customers.

If you are about to purchase a home, refinance your present home, rent an apartment or home, then you know how important your credit rating can become. Relatively small credit score differences can keep you from getting into that apartment or from buying that home you have dreamed about.
Here are 5 myths regarding credit:
      1    MYTH: Having a lot of cash, or savings in the bank, or having a good job and good income, or even lots of equity in your home will make your FICO score less relevant when you apply for a new loan for a purchase or for refinance purposes.
    FACT: No matter how much cash or savings you might have, or how much money you make, if you want a real estate mortgage loan, you must meet the mortgage lender’s FICO score guidelines, and those guidelines are getting tougher and tougher all the time.
       2    MYTH: If you have no debt, or no late payments, then your credit rating or score should be good.
    FACT:  Don't confuse financial responsibility and good credit, they are two different things. Having no credit accounts or debts doesn't give you good credit - it only gives you no credit.
      3    MYTH: If you check your own FICO score prior to filling out a loan application, it will help you because you won't have any negative surprises.
    FACT:  The originator of your real estate mortgage loan, whether it is a Mortgage Broker or a banker, must pull a credit report on you from their own credit score provider and the score maybe different from the one you saw when you checked your FICO score, and it may even have different detailed line items than the one you saw.    
      4    MYTH: If you have had a foreclosure or a short sale on your credit record, your credit report will be damaged for at least 7 years, making it almost impossible to get any credit, especially for a mortgage loan.
    FACT:  Derogatory or negative credit items, like late mortgage payments, foreclosures and short sales, appear on your credit report for 7 years, however,  your credit score can be rehabilitated enough to be able to buy a home or obtain other credit in less time, depending on your particular circumstances.
     5    MYTH: Having a short sale that shows up on your credit report is better than having a foreclosure show up on it.
    FACT: According to the Credit Reporting Agencies, short sales and foreclosures will have the same impact on your credit score. Of course, like everything else there are exceptions and your own particular circumstances will determine which way the agencies will rate you.
In summary, it is best to have a few good open accounts, and to keep the payments up and current at all times.

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Anchorage Homes For Sale

The beautiful town of Anchorage is located  in Eastern Jefferson County. The town boasts an abundance of beautiful oak and magnolia trees, parks with great walking and bike paths. Real estate is a little above average with the 2012 median home price for Anchorage KY is $475,000.


 

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Home Maintenance Tips For All Year Long

As responsible homeowners, we all know that there are certain things that must be done routinely with regards to the proper maintenance of our most prized possession, our home. 

Unfortunately, most of us don’t have the time or the monetary resources to do the job correctly or even address some of the types of preventative maintenance that's required. Most of us don’t know the most important items that need to be checked routinely, so we wait until something goes out, or doesn’t work anymore, then we do something about it. Sometimes, that isn’t even an incentive to act, or react. This is not a good way to maintain your most expensive possession, and it is a good way to get your homeowners insurance policy cancelled if you ever try to make an insurance claim on repair costs after the fact. Regular attention to key areas will save money over the life of the home and help to preserve the integrity of the home insurance policy.

 This isn't a big list, but there are some key areas to pay attention to:

  • CHECK THE ROOF AND ROOF DRAINAGE
    Besides the roof itself, the gutters are probably most important to good water drainage all year long. Most people never look or check the gutters on their homes or garages. What happens to the water once the gutters take it from the roof and deposit the water on the ground is also important. All of the gutters should be checked for leaks, and buildup of leaves, branches and dirt  at least once a month in the winter and at least every few weeks during the summer. Accumulated moisture due to a build-up of leaves, dirt and debris can lead to damage on the roof, in the attic insulation, soffits, and behind any siding, and can affect both inside the home as well as the outside. Also make sure that the water is draining away from the foundation where very serious issues can develop, affecting the stability of the entire structure of the house or garage. Check your roofs on a regular basis. Roofs sometimes take a long time to reveal a leak or any problem. Go into the attic and look for tell-tell signs of leaking, like staining of the roof boards, or damage to the insulation in the attic. This is one area that you might want to call in an expert if you have no idea what to look for. It could save you thousands of dollars in roof repairs or replacement.
  • SEALING - WEATHER STRIPPING - CAULKING
    We all could lower our energy bills by spending a couple of hours every few months to make sure that our windows, doors and other house openings are properly sealed off from the outside weather. Over time, caulking will dry out and crack and sometimes it is not obvious that moisture is leaking into the house through these cracks. The caulking will start to let in outside air and eventually cause mold or mildew problems inside the house. If the doors and windows don’t have weather stripping, you should invest a few dollars and put the stripping on all windows and doors so they do not leak air and moisture into the house. This also prevents insects and other pests from entering the home. You should routinely check for any damage from termites throughout the entire building,  including under the house too if the house. This is important.
  • CHECK KITCHEN & BATHROOM PLUMBING FIXTURES - APPLIANCES
    All appliances in the home should be carefully checked to see if they are operating  safely and properly. Gas appliances can be checked by calling the gas company on a routine basis. They will come out and check for any leaks in the appliances as well as in the gas lines and check for carbon monoxide leaks coming from the water heater or heating system. Check all plumbing fixtures like leaky faucets, sinks, garbage disposals, toilets, etc. Save yourself a lot of time and money and headaches by fixing plumbing leads as soon as they are discovered. Check the furnace and air conditioning filters every other month or so and replace them often for best results.
  • MISC ITEMS TO BE CHECKED ON ROUTINE BASIS
    Routinely check the condition of your garage (s) and any other outbuildings you have on the property. We tend to take our garages for granted and hardly ever clean them. This too is dangerous and could cost you your insurance  policy through a cancellation due to a fire, or even a flood caused by a faulty washer, or sink or plumbing problems in the garage. Check and clean the floor once in a while, including the driveway. Check for concrete cracking, or broken glass in any of the windows in the garage. Do you have a work bench or work shop within the garage?  Clean it up once in a while and be sure that any saws, drills, table saws, etc., are always unplugged when you are finished with them. If you have storage in the garage, make sure it is clean and neat and not a fire hazard. Patio enclosures should also be checked out to be sure there are no roof or patio cover leakage. The trees and shrubs around the house and garage should be trimmed regularly with any overhanging limbs from large trees cut off or cut back so if they fall they won't damage the roof or side of the building, or crack concrete areas.

IN SUMMARY:Neglecting to routinely inspect your home for needed repairs or replacement of certain items is not just a gamble with your  budget, but a serious risk in the event of a homeowners insurance claim. Standard policies include disclaimers for damage caused by neglect of the policy holder, and guess who that is You!! In Louisville we are fortunate to have many trained and experienced home repair people that you can depend on for any type of construction service or repair. Look in the Yellow Pages for the type of service you need. You can also go online and type in the appropriate service at Google.com, or use Yahoo search, Bing or which ever search you like. But don’t put off checking out these important maintenance issues.

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The Pros and Cons of Reverse Mortgages

More and more seniors are opting for the reverse mortgage to help offset retirement expenses and healthcare costs. I hope to answer some questions regarding reverse mortgages as best I can but advise those who may be interested in a reverse mortgage to seek the counseling of an attorney before making any decision on taking out a reverse mortgage.


                          A good family meeting to talk about the subject is also advised.

What is a reverse mortgage? A reverse mortgage is basically a loan that is available to people who are generally over the age of 62 that enables a borrower to be able to convert part of the equity in their home into cash. Reverse mortgages were originally conceived as a means to help people who were nearing their retirement, and had limited income, to be able to use the money they have put into their home to help pay off debts and/or help cover their basic living expenses, or help pay for their health care, etc. There are no restrictions on how the money is used. The reverse mortgage money does not have to be paid back to the lender until the home is either sold or is vacated for some reason. As long as borrower lives in the home, they are not required to make any monthly payments towards the loan balance, but must remain current on any property tax and insurance payments.

There are qualifications that the borrower must meet such as the age requirement is  62 years old. These qualifications are subject to change.

  • The reverse mortgage must also be the primary lien on the property.
  • Any prior mortgages must be paid off in full.
  • The borrower can us reverse mortgage funds to help pay off any existing mortgages.
  • The property must be the borrower’s primary residence.
  • The borrower is required to remain current on any real estate taxes, home insurance, and, if applicable, condo fees or the borrower will be susceptible to default.
  • The borrower is also responsible for maintaining the property in good order and for making any and all necessary repairs.
  • The borrower always retains title and ownership of the home.
  • The amount of funds that the borrower can receive depends on the age of the youngest borrower, the value of the home, the interest rate and upfront costs. The funds can be delivered to the borrower as a lump sum, as a line of credit or as fixed monthly payments, either for a fixed amount of time or for as long as the borrower remains in the home. Sometimes the borrower can opt for a combination of ways to receive the funds. There are very little fees involved with getting a reverse mortgage and usually the fees can be paid out of the funds received.
  • The only up front fee us usually the appraisal fee. Usually counseling is required by most lenders and there might be a counseling fee over and above the appraisal fee, but both usually are not much more than $200.00 to $250.00 total. 

There are various types of reverse mortgages being offered today and it is advisable to talk to several lenders who specialize in reverse mortgages about the different requirements and guidelines that are involved.

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Know More About Mortgage Financing Before Buying

The housing market in Louisville has certainly heated up in the last few months and if the experts are right, this upturn will continue.  This is good news for buyers, sellers and for all the real estate professionals.

With more and more people looking to buy a new home, possibly their first home or even a commercial property, it has become clear that a good number of people really do not understand real estate financing. In face in a recent survey involving over 1000 current and potential homeowners, run by the Zillow Real Estate website, over 1/3 of the participants gave wrong answers regarding basic real estate mortgage and financing including information regarding banks and  lenders and other important related questions.



Here are some of the results of the Zillow website survey:

  • 31% of buyers in the survey, didn't think that it was possible to get any kind of mortgage loan with less than 5% down.  This is incorrect..there are loans insured by the Federal Housing Administration that can require as little as 3.5% down. 
  • 34% didn't know what the term 'annual percentage rate' (APR) means.  Terms like 'APR', 'points', 'origination fees', 'underwriting fees' 'appraisal fees', 'escrow' and 'title fees' and all other costs involved with getting a mortgage loan are important so you can figure out what the overall cost of the loan is going to be.
  • Many of those surveyed thought that they could get the best deal by going through the bank where their checking and savings accounts were held. Competing banks and lenders can often undercut other banks by large margins.
  • 25% of those surveyed thought that you were obligated to close with the lender that has already pre approved your mortgage. In reality, there's no obligation. If buyers see better terms available they should take them.
  • Many in the survey indicated that they thought that lenders were required by law to charge the same fees to all clients for credit reports, appraisals, etc. This is incorrect..Fees vary from bank to bank and can often be negotiated.
  • In the survey, over 26% of the people said that once pre approved they thought they were obligated to go with the lender that pre approved them. This is not true, you are not obligated and if you find a better rate, go with that lender.
  • Many homeowners in the survey thought that if their mortgages were underwater, or if they owed more than the property was worth, they could not refinance their existing loans into lower interest rate loans.  This is incorrect. There are many lender who deal specifically with underwater loans and refinancing those loans.
  • Nearly a third of the survey participants thought that if they had gone through a foreclosure or short sale, they would have to wait seven years for their credit scores to recover so they could buy a home again.  This depends on each situation and many who experience a foreclosure or short sale can get financing in as little as a couple of years.

So often the buyers focus on getting a lower home price and totally ignore the importance of finding the right loan for their situation. I always recommend that buyers shop around to multiple lenders and compare rates and fees to get the best deal. Working with a good mortgage broker can go a long way to help simplify the application process and get you the best interest rates and lowest fees. If you don't know what APR means then it's going to be difficult to compare rates of the different lenders.

If a home buyer can lower their interest rate by just half a percentage point, they can not only increase their purchasing power, but save thousands of dollars over the life of the loan. For every $100,000 borrowed, a half percentage point lower rate will lower your monthly payments by about $28 per month on a 30 year fixed rate loan, and that adds up to more than $10,000  over the 30 year life of the loan.

In next week’s blog posts I will outline the many different types of mortgage loans that are available.

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Meet The Brad Long Group

Meet Louisville's finest Realtors from the Brad Long Group of Keller Williams Realty Louisville East. Our Realtors know and believe strongly in our fiduciary responsibilities to our clients and we treat their decisions, assets and time as if it were our own.

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