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6 Questions to ask when applying for a loan

When applying for a mortgage loan, whether it’s a refinance of your current mortgage or a loan for a home you wish to purchase, you will want to make sure you are getting the best deal possible. Asking your lender some basic questions will ensure you not only get a good deal, but that you actually know what to expect from the loan you receive.

1.      What are the rates for a 5 year Arm, 7 year Arm, 10 year Arm, and 30 year fixed?  Take a look at each car on the lot. There are many options to choose from in mortgages. If you are looking for an Arm, you may find a 7 year has a better rate than a 5 year Arm, or that a 30 year is better than them all. Don’t just take the first product offered to you.

2.      What happens after the fixed period on my Arm ends? Should you choose to go with an Arm on your loan, ask your broker how often the rate adjusts after the fixed period. Will it adjust once a year, every six months, or every month? Also, what are the caps on each adjustment? Ask about the margin and index used to determine your rate. Most loans use the LIBOR as their index during the adjustable period, but margins can range quite a bit. Subprime margins can be particularly nasty.

3.      Why does this loan have a prepayment penalty? Generally speaking, unless you are getting a loan from a subprime lender you should not have to accept a prepayment penalty. Lenders may push a prepayment penalty to get a lower rate (or to earn more money), but you do not have to take it. Even on subprime, you do not have to take a prepayment penalty if you don’t want one. But you will have to either buy it down or accept a higher rate.

4.      What is that fee for? Don’t be shy. This is your money that is being spent here! If there is a fee or charge you do not understand, ask your broker or lender to explain it to you and why you are paying it.

5.      What would my rate be for a no closing cost loan vs. with closing costs? Remember, ANYONE can do a no closing cost loan. You will just have to take a higher rate to get it so the broker can afford to pay those costs for you and still make some money. Don’t be fooled by the radio ads for these products, there is an inverse relationship between rate and cost. But it is a good idea to know your options.

6.      What costs might change from the good faith estimate?  Don’t forget, it’s called a Good Faith “Estimate” for a reason. The lender will do the best job they can to nail down numbers in the first meeting. But depending on the lender he brokers to, the timing of closing, and the escrow or title company used, the numbers can change. However, you are protected from a lender or broker increasing their fees at the last minute.

Washington

state recently enacted legislation requiring brokers and lenders to get borrowers signatures on a new good faith estimate at least 3 days prior to signing before they can raise any lender fees.

Friday's Did You Know?

The City of Bothell's original inhabitants were the Native American Simump Tribe.  They called the region, not Bothell...but "Squak" which means a swampy lowland.  As a matter of fact the Sammamish River was originally named Squak Slough.

Kirkland drivers will enjoy new improvements in April

We have good news for Kirkland drivers next month. If the weather cooperates, we plan to:

• Reopen the intersection of 116th Avenue NE and NE 128th Street
• Open the new NE 128th Street bridge
• Remove the southbound I-405 HOV lane crossover (pdf 185 kb) between NE 124th and NE 116th
• Open the new HOV direct access ramps on the south side of the NE 128th Street bridge

We expect to complete all our freeway work in the north end of Kirkland this fall. The improvements should help ease congestion, reduce collisions and make commute times more reliable. For detailed information and updates, please visit the Totem Lake Freeway Station Project and Kirkland Nickel Project Web pages.

Crews demolish portions of new I-405 HOV ramps in Totem Lake to repair structural problem

We told you that we discovered a structural problem in the construction of the new I-405 HOV ramps at NE 128th Street in Totem Lake. Earlier this month crews began removing concrete to begin the repair process. We’re almost done with this demolition work, and then we’ll begin reconstructing this portion of the ramps.

As engineers developed the repair plans, they determined that we needed to remove more of the cantilevered sections than originally intended. They also added some further reinforcement to the scope of the repairs. These changes were necessary to ensure the durability and safety of the structure, and raised the cost estimate for the repairs to $3.5 to $4million.

The story of the $600 Cat

You gotta see the story of the $600 cat in our pet contest section written by Jay - The Phoenix Real Estate guy.

Septic Tank Care for Eastside Homes

Greg Perry

Not a glamorous subject.  Sewers and septics.  Yet without proper waste disposal, what would our home ownership experience look like?    After we turn the flush lever, we don't even want to think about what happens....we just want it to go away.  For our forefathers, their image of home included that little old shack out back with the 1/2 moon.  Deluxe accommodations were a 2 holer and a sears catalog.

Before purchasing a home, you should have an "as built" (map of the septic and drain-field system).  As-builts can be acquired at the King County Health Department.  The as-built will also tell you how many bedrooms the septic tank is rated for.  Your purchase and sale contract should include a septic tank pumping and inspection and an inspection of the drain-field. 

Septic tanks are an effective way of handling wastewater -- if they are maintained properly.  With literally thousands of On Site Sewer Systems servicing homes on the eastside, I thought I would pass these septic care tips to you.

1. Practice water conservation. The more wastewater you produce, the more the soil must treat and dispose. To reduce your water use:

• Use water-saving devices.
• Repair leaky faucets and plumbing fixtures.
• Reduce toilet reservoir volume or flow.
• Take shorter showers.
• Take baths with a partially filled tub.
• Wash only full loads of dishes and laundry.

2. Keep accurate records. Know where you septic tank system is and keep a diagram of its location. Records of its size and location may be available at your local health agency. It is also wise to keep a record of maintenance on the system. These records will be helpful if problems occur, and will be valuable to the next owner of your home.
3. Inspect your system once each year. Check the sludge and scum levels inside your septic tank to make sure that the layers of solids are not within the "early warning" levels. The tank also should be checked to see if the baffles or tees are in good condition. Periodically inspect the drain field for odors, wet spots or surfacing sewage. If you drain-field has inspection pipes, check them to see if there is a liquid level continually over 6 inches. This may be an early indication of a problem.
4. Pump out your septic tank when needed. Don’t wait until you have a problem. Routine pumping can prevent failures, such as clogging of the drain-field and sewage back-up into the home. Using a garbage disposal will increase the amount of solids entering the septic tank and require more frequent pumping.
5. Never flush harmful materials into the septic tank. Grease, cooking fats, newspaper, paper towels, rage, coffee ground, sanitary napkins, and cigarettes cannot easily decompose in the tank. Chemicals such as solvents, oils, paint and pesticides are harmful to the system’s proper operation and may pollute the groundwater. Septic tank additives do not improve the performance of the septic tank, nor do they reduce the need for pumping. For information on the proper disposal of hazardous household waste, call the Recycle Hotline, 1-800-RECYCLE.
6. Keep all runoff away from your system. Water from surfaces such as roofs, driveways, or patios should be diverted away from the septic tank and drain-field area. Soil over your system should be slightly mounded to help surface water runoff.
7. Protect your system from damage. Keep traffic, such as vehicles, heavy equipment, or livestock off your drain-field or replacement area. The pressure can compact the soil or damage pipes. Before you plant a garden, construct a building, or install a pool, check on the location of your system and replacement area.
8. Landscape your system properly. Don’t place impermeable materials over your drain-field or replacement area. Materials, such as concrete or plastic, reduce evaporation and the supply of oxygen to the soil for proper effluent treatment. They also can hinder getting to the system for pumping, inspection, or repair. Grass is the best cover for your system.
9. Never enter any septic tank. Poisonous gases or the lack of oxygen can be fatal. Any work to the tank should be done from the outside.
10. Check with your local health agency for help with system problems. Although some malfunctions may require complete drain-field replacement, many problems can be corrected with a minimum amount of cost and effort.

Septic System Failure

Warning signs of a failure:

• Odors, surfacing sewage, wet spots or lush vegetation growth in the drain-field area.
• Plumbing or septic tank backups.
• Slow draining fixtures.
• Gurgling sounds in the plumbing system.

If you live in the Kirkland City limits, you should be aware of the Kirkland Emergency Sewer Program.

If you notice any of these signs or if you suspect your septic system may be having problems, contact your local health agency for assistance, King County Health Services East Service Center (206) 296–4932.

Happy Birthday Jameson William Perry

By Greg Perry

I'm not writing anything about real estate today.  Something came along that was much more important.  I met my new grandson today.  My son and partner Brian and his wife Jennie are now a family. Happy birthday Jameson! 

425realty's Top 10 Most Offensive Buyer Turn Off's

Top 10 We show LOTS of Eastside homes.  LOTS!  We're with your Buyers, Mr. and Mrs. Seller.  We see what they see and hear what they say to us afterward.  Here's our "Letterman" style Top 10 Most Offensive Buyer Turn Offs list.

10.  The street jungle (or is there a house behind the shrubs???) -- If we need a machete to get to your front door, your house automatically becomes unkempt in the mind of the Buyer.  And what about your weed yard?  Not to mention your kids trikes and bikes lying all over.  If you're too busy, hire someone to take care of your front yard.  You'll make more money and have a quicker sale.

9.  The nasty front door -- Sure your door is de-laminating and the paint is peeling, but it still works!  And what about your worn, rusty door knob.  The best one of all is your ill-working lock that makes it a crap shoot to see if we can really enter!

8.  The filthy floor with your sign "Please remove your shoes."  Are you kidding me?  Sometimes I feel like I have to wash my shoes!  If your carpet has the look that your kids and pets eat, drink and sleep on it (and worse).  Spend the $$ to have it cleaned and stretched!  By the way, save your carpet allowance.  If carpets need to be replaced, replace them.  Buyer's pick the house that looks the nicest.

7.  So you're an interior designer -- and you love your royal purple walls in your living room!  Trouble is your Buyer owns an expensive olive green sofa and love seat.  OUCH!  OK, we'll go down the street to buy the new construction that's painted in nice neutral tones.  Why should my Buyer have to paint your walls, anyway?

6.  Way toooooo much stuff -- The last time I wanted to juke and weave was when I played high school football.  Maneuvering around the 12 antiques and 3 couches you have in your living room (because you just HAD to have them) are hard on the hip bones.  Put them in storage so we can see your house, not your stuff!

5.   Kujo -- You love your dog, but he looks like Kujo to my fearful Buyer.  Can't wait to get out fast enough.  Or she won't even go in!

4.  Dirty bathrooms -- If there's a hint of body hair lying about--GROSS!  Did you know there are soap scum cleaners for the shower door and tub?  And how about the moldy caulking?  Flushing and cleaning toilets is a good thing when selling your house.  And for goodness sake, pick up your underwear!

3.  Selling us your home -- Yes, you know your home.  Do you really think we're interested in the shelf you put in your pantry 10 years ago?  We really do have eyes and can see the obvious.  Besides, how can my Buyer's fall in love and bond with your house when they can't discuss where to put their furniture?

2.  Phew! -- I know, you're a cigarette smoke blowin', deep fat frying, pet loving, mold growing son of a gun.  But you have a great idea!  You'll just spread plug in air fresheners around.  You just gave me and my Buyer an instant headache.  If it smells, it wont sell.

1.  And the number one most obnoxious Buyer turn off is..... Your overpriced house.  Yes, you're attached to your house.  You've raised your 6 children there and are proud of the redecorating you did 15 years ago.  You want to maximize your investment.  So do the Buyer's.  They'll find the best value, believe me! 

An Amazing Eastside Remodel

By Greg Perry

Every once in awhile I run across an absolutely stunning remodel of an older home.  For me, it's fun to see older floor plans reworked and the latest amenities installed.  This remodel is from my client (and computer repair and maintenance technician) Loren Campbell.  I'll let the photo's speak for themselves.

Before photos (click on the photos to expand):

And the amazing "after" shots!

Garrett Marr, (who has done a lot of work on my home), did the remodel work on this beauty.

Because we're so active in the market place, if you're looking for an oustanding service provider, give us a call.  We'll refer you to the best! 

What is happening out there?

By Ryan Jensen           

As you read the news these days, it’s hard to miss all of the hype surrounding the woes of the mortgage lenders and mounting foreclosures in many markets. There is so much being written and said about what is happening and what will happen that it can be a bit scary sounding to those casually paying attention. Do we need to be concerned here in the Northwest? What will this mean for rates? Will all the foreclosures push down home prices? Will Pete Rose ever get into the hall of fame?

            At the turn of the century, after 9/11 and the Dot.com bust took their tolls, interest rates were at historic lows. The feds had dropped the prime rate all the way down to 1%, and 30 year mortgage rates were absolutely amazing. Everyone rushed to buy and refinance their homes to take advantage of these rates. Subprime lending took off and made it easier than ever for people with credit challenges to get a mortgage, even up to 100% financing.

            Today the problem is many of these subprime lenders were putting their borrowers into short term arms, or mortgages where there low interest rates were only fixed for 2 -3 years. After the fixed period expired their rates became adjustable and tied to indexes like the LIBOR, which has dramatically risen since the time they bought their homes. Some people were able to just refinance into a low fixed rate loan or another arm, but many others were unable to qualify for a new loan due to continued credit problems and were stuck with sky-rocketing payments. As a result, delinquencies and foreclosures are on the rise and some subprime lenders, overwhelmed by suddenly un-sellable loans, are now going under.

            Now what does this mean for you here in the Northwest? Well, the first thing to remember is that Western Washington still seems to be enjoying a good housing market while other markets around the county are struggling. Home values are still rising while others in the U.S. drop. My contacts with Wells Fargo have even told me their bank is forecasting Seattle to be their strongest market this year. The majority of the foreclosures have been in the Midwest and central  United States. So I would not be concerned about an oversupply of repossessed homes and distress sales on the market pushing down home values. We will see however lender guidelines being a bit more restrictive. Fewer lenders are offering 100% financing (though some still do) and the minimum required credit score for many programs has been raised. As far as interest rate movement, the negative impact all of this has had on the economy may indeed cause the federal reserve to drop interest rates later this year. But a lot of that will depend on what happens in the housing market this spring and summer.

Fixing the Kirkland crawl (WSDOT Kirkland Nickel project)

  Driving  on I 405 at any time during the day, especially during commute times, can be aggrevating for sure.  There are several "bottlenecks" that can back traffic for miles.  One of the most aggrevating is the "Kirkland crawl", between Hyw 522 and NE 85th.  In 2006, the WSDOT started the Kirkland Nickel project to widen the freeway between NE 124th and NE 85th, and the Totem Lake station project to relieve traffic congestion in this area.

The Kirkland Nickel Stage 1 Project is being built to improve personal and freight mobility and reduce foreseeable traffic congestion in a manner that is safe and reliable. It is one of 2003 gas tax funded projects that constitute the first step toward fulfillment of the I-405 Corridor Program. 

The End Result
The Kirkland Nickel Stage 1 Project will reduce congestion through the "Kirkland Crawl," and complements the Sound Transit 128th Direct Access project, which began construction in June 2005. It will improve the 116th Street Interchange (pdf 314 kb). The Project will build an additional lane (pdf 330 kb) from NE 85th to NE 124th both Northbound and Southbound.

Kirkland Nickel Stage 2 Project will be constructed as an element of the larger SR 520 to I-5 Widening Project. Stage 2 will address an additional lane Northbound from 70th to 85th and Southbound from SR522 to NE 124th and NE85th to SR520.

Project Benefits

• Improves safety by reducing congestion-related accidents
• Shortens periods of congestion by increasing travel speeds during peak commuter hours in the "Kirkland Crawl"
• Improves north and southbound merging conditions at NE 85th Street
• Installs a fish passage improvement on Forbes Creek
• Constructs five new noise walls and upgrades or relocates four existing walls

Here is some contstuction update information:  http://www.wsdot.wa.gov/Projects/i405/KirklandNickelStage1/Construction.htm