Wednesday, December 30, 2015

When Should You Start The Mortgage Process?

Studies have shown that over 92% of Americans surveyed have said that they at one point want to own their own home. For many, owning their own home is part of the American Dream.

Part of the process of owning your own home is the mortgage process. Yes, that perfect house that you have found will not be yours until you can make the bankers happy with your mortgage application.

Since joining the mortgage industry over 8 years ago, there is one question that I have been continually asked: "If I am thinking of purchasing a home, when should I start the mortgage process?"

The answer has always been pretty easy. Whether you are thinking of purchasing a home 2 months from now or even 2+ years from now, the time to start the mortgage process is now.

I have heard people say before "we are going to start the mortgage process in a year or two. We need to work on a few things first to get ready." That statement is great and the forethought of preparing for homeownership is a fantastic idea. Here is the problem: Imagine if for 2 years you were "working on a few things" but they were the wrong things? Imagine if for 2+ years you were working on things and thought you were ready, only to find out that during that time you were working on the wrong things and in fact were another 1 or 2 away because of it?

The time to contact a mortgage lender is now, even if you aren't ready or looking to purchase a home for awhile. Your loan officer can pull your credit as well as check your income, assets, etc. If there are things you need to work on (paying off collections, saving for a down-payment, increasing your credit score, etc) they can help you put that plan in place and help you along the way. This will make sure that when you are ready to purchase, that you actually are ready.

Choosing a mortgage lender can be a bit intimidating. There are options such as your local bank, national banks, mortgage lenders, mortgage brokers and more. Rates and fees are important of course- but qualification requirements can vary drastically between all of those choices. If you have challenging credit or income situations, your lender of choice could make the difference between approval and decline. Make sure that you understand what each lender's guidelines entail.

I do hope that this article has helped you to realize that starting to plan for your mortgage financing early is a good idea and finding a great loan officer is key to your mortgage financing success.

Matthew (Matt) Krimm is a Regional Manager with Hancock Mortgage Partners. To talk to a licensed loan officer about your mortgage goals or to answer any questions you have about what programs might be available for you, call 800.535.8417 or apply online @ To contact him directly, call 443.219.2775 or visit his website
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Sunday, December 27, 2015

4 Reasons to Buy Real Estate (Instead of Renting)

After years of an up and down market, house prices are beginning to normalize. Since 2013, housing prices have been rising at a rate comparable to income or mortgage rates. This is great news for people who are looking into taking the plunge and purchasing their own real estate, because it means that property values are sustainable. It is a perfect time for people interested in purchasing their own home to finally take the next step. Here are a few reasons that you should end your lease and look into getting your own place.

It's an Investment

Many people don't think of it as such, but a house, or any type of real estate, is an investment. It is one of the most important investments that most people will make in their entire lifetime. With renting, the landlord is profiting from their investment, while you are not. When you buy, some of the money you pay each month is going to pay off the loan on your house. You are essentially buying the house, a little chunk at a time, while you're living in it.

It's Cheaper in the Long Run

If you're planning on staying in your home for a while-at least a decade-the overall price of your home is cheaper than the amount of money that most people spend on renting a standard apartment. Even though you are now assuming the responsibility of providing maintenance and upkeep for your home, and it is associated with more upfront costs, purchasing would put you on top in the long run.

It's an Opportunity for Turnover

You've heard of flipping houses before; it is becoming a more viable option in the stable housing market. This doesn't mean you have to flip your house. But when moving in, it should be a serious consideration. If you are not happy with the neighborhood, the house itself, etc., owning a home means that you can sell that home again for a profit.

It Gives You Creative Control

This might seem like a given, but when you own it, you can do almost anything you want to it. When owning real estate, you don't have to keep in line with the landlord's or apartment complex's rules and aesthetic. You have freedom to paint the walls or landscape the yard in any way you please.

Despite purchasing a home being in most respects a sound investment, it is still an important financial decision that should not be taken lightly. When considering purchasing your own home, look for a real estate agent you can trust. Don't let just anyone give you advice on this crucial choice in your life.

To learn more about their options for real estate, Rockford, IL residents should visit
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Thursday, December 24, 2015

Happy Holidays!

Wishing You Peace and Joy this Holiday Season and throughout the Coming Year!

Tuesday, December 22, 2015

Teacher Next Door Program


Teacher next door, officer next door, etc. If you have a teacher or law enforcement officer, fire fighters, EMT officers looking for a property you may want to start here HUD FORECLOSED HOMES FOR SALE to see if something is for sale.

1) These teachers and officers next door bid on the home just like anyone else. make your off, make a full price off + $1 or $2.

2) Once the offer is accepted HUD reduces the price by 50% for your teacher or officers.

3) They must plan on living there about 3 years to get the full benefit. If they sell prior to that time HUD may recover their gift.

4) BE CAREFUL to build your commission into the off to purchase because they won't pay a commission for these properties unless it is in the offer.

5) For each $1 you bid over the asking price, your client will have to pay that amount over the bid price. Example: Asking price = $300,000, Your offer is $310,000 your 50% discount kicks in at $150,000 x 3.5  down payment + another $10,000 more on the down payment because you bid too high. Yes, you got the property but at what cost to your client? Better way, offer a few dollars over the listing price, something that is manageable.

Get more details on the "Good Neighbor Next Door program" that includes teachers, law enforcement, fire fighters, and EMT workers.

Friday, December 18, 2015

We Have Your Back When it Comes to Remodeling

That is just what it means to be a 203k consultant or renovation/remodel consultant. Most people don't remodel their home very often and guess who knows it? That is correct, the contractors know it and quite often they capitalize on it.

Task was to add a second story to this home, the budget was $150,000, well, it couldn't be done but I felt it could be done for $159,000 and the borrower agreed that it was still doable so we moved forward.

It is my job to create a scope of work and give you a bid on what I think a contractor should be charging for this specific SOR (scope of renovation) as so many lenders call it.

Next step is for us to print out the SOR without prices in it and give it to the borrower to use to solicit bids. We don't like to let this out of our control so we send it to the borrower's contractor selection with a copy to the borrower so they can see our comments to the contractor and that way we maintain control so the lender can close the loan quickly.

Once we have a "confirmed bid" from a contractor so our bid is "validated" the appraisal is typically ordered. Many will order the appraisal with our bid paperwork as the scope of work doesn't change, only the price may change slightly.

Now the bids come in, in this example the borrower had a contractor but she made a crucial mistake, she let the contractor know that she was so excited to have them working on her project to take this bungalow home and turn it into a "craftsman" style home. Her contractor bid the job at $298,000 versus my bid of $159,000. Yikes! What do we do now?

That is easy. We merely send it out to another contractor in the area with no preconceived notions. The second bid came in at $161,000. Just 1/2% higher than our original bid.

Conclusion: Rest assured we have your back. When the contractor's know that they will typically bid a bit tighter in the first place.

If your contractor isn't providing a bid for the job up front before the contractor's bid come in your consultant isn't doing their job per the guideline.

Tuesday, December 15, 2015

The Mortgage Process Explained

Purchasing a home can be a frustrating and intimidating process. The best way that you can prepare for the purchase of your next home is to know what is required of you and what is happening during your home buying journey. Although, your lender will be the best source to explain the current status of your mortgage, the following is an overview of the stages of the mortgage process.

• Preparation and Pre-approval - The first thing that you should do prior to starting your search for a new home is to find a respectable and knowledgeable lender and to apply for a fully underwritten pre-approval. To obtain a full pre-approval, you will need to provide the lender with the following: proof of income, employment, and source of down payment. This information will allow the lender to determine your maximum buying power and which loan types you qualify for.

• Home Search - After you are pre-approved, you should provide a copy of your pre-approval letter to your real estate agent. When you find a house and your real estate agent presents an offer, the seller and listing agent of the property will likely require a copy of the pre-approval letter for the offer to be considered.

• Loan Application - Once you have a fully signed purchase agreement, you can officially make loan application on the property you are purchasing. You may need updated pay stubs and bank statements for your lender. At this time your lender will likely order the appraisal and title work for the property.

• Underwriting - Once the appraisal and title work has been completed, your mortgage should be submitted to the underwriting department for final approval. If any additional documentation or explanations are needed, they will be requested after the loan has been underwritten. You may receive a conditional approval letter, which outlines the items needed before the loan can close. Avoid new debt, derogatory credit, and changing employment during this stage. If any of these things happen, contact your lender immediately.

• Closing - After you have provided the documentation to clear any approval conditions. You should receive your final approval letter. Your lender will contact the title company to set the closing date for your mortgage. You should receive the closing disclosure three days prior to signing your final papers. Thoroughly compare your closing disclosure to your loan estimate, which you would have received when you made loan application. If there are any discrepancies in fees, contact your lender for an explanation. When you meet with the closing agent to sign your final papers, the mortgage and ownership of the house should transfer by the next business day.

Patience and understanding is needed when purchasing a house and obtaining a mortgage. Stay in contact with your lender and your real estate agent to find out what is going on, and what is needed to keep the process moving forward. Having a greater understanding of what is going on during your home buying process will limit frustration and the potential for the mortgage to be denied. Using experienced and trusted real estate and mortgage professionals should decrease possible delays and make the process smoother.

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Saturday, December 12, 2015

Why Use a Consultant for a Renovation Loan?

I can't tell you how many times I have heard about how the process is all but complete, we have been working on this loan for 3 months then they call a consultant and say something like "okay, we need the consultant's report - can you do it by tomorrow?"

There are many lenders who will coach you do to it this way making it seem like the consultant's job is necessary but trivial. Watch out for that kind of lender.

Remember my lender Donna, who wanted to be the best 203k lender in the business. She closed her very first 203k in 21 days. Yet there are many lenders who don't even call the consultant until it is already 60-90 days into the process and everyone else has reached the finish line. Then they say "GO" to the consultant. We actually will find health and safety issues and grading issues that no one noticed needed to be completed in the scope of work quite often.

If you understand the consultant's roll you would know that they just kicked the client in the teeth by doing it this way.

We are the FIRST inspection, not the last that should happen. Get your consultant out there ahead of the crowd and they will lead you to the finish line and likely pull everyone along with them.

I just had a lender take seven (7) months to close an escrow. I'm still trying to figure out why anyone would use them... but the rules are that "the lender has to choose the consultant" so when you see an order come through from them you take it and you smile and you do your part. We can't "bad mouth" that client nor can we tell you that the client takes seven months to close these loans or we won't be hired by them ever again... maybe that would be a good thing, mmmm.

We'll we just closed another one for a different lender, it only took 4 full months. Why, because we had a newby. A new loan officer who wanted the experience so instead of letting the team work, the LO decided to micromanage and instead of getting my job done with one email we had to put up with copies going to everyone in the chain and then getting a response from everyone in the chain...wasting everyone's time. More imporantly causing the wheels to stop turning so we all have to ramp up again. Let the team function as designed.

Had you come to the consultant first we would have directed you to a lender who can actually close these type loans in 30-45 days tops and if you are in SC maybe even 21 days.

I received a call just this week where a buyer is doing all their advance work. They have identified a home and asked if I could give them the name of  an electrical sub contractor to give them a price on the electrical. Maybe you need a plumbing contractor too? Yea but first I want to know about the electrical work.

Hello, did he just ask me to send out a sub contractor to do my consultation for free? I reminded him that I quote a project cost in all regards not just the electrical. I also reminded him that even though he gets a quote on the electrical for $10,000 by the time a general contractor puts his markup on that number all his work was for nothing. I reminded him that is what I do for a living and you want me to give you the name of a guy who will give you a FREE quote on one little piece of the project. Interesting thought. He is wasting his time.

Wednesday, December 9, 2015

Evaluating FHA 203k Loans - Is it a Good Fit For You?

Distressed foreclosed homes are in abundance in today's nationwide real estate market. These properties can be purchased for as much as a 75% discount because there is substantial work that is needed to make the home functional and attractive to live in.

Let's assume you're a first time home buyer and researching lending options. You want to take advantage of the discounts available on banked owned foreclosure properties. You've also learned about the 203k rehabilitation loan available from the U.S. Department of Housing and Urban Development (HUD), but you're trying to determine if this is a good fit for you.

Here are some considerations to help you evaluate:

#1: Your FHA 203k loan amount will include the purchase price and repair costs (plus several other fees and a contingency fund for repairs). You'll need to qualify for that entire loan amount and will also need cash for a 3.5% down payment of the entire loan amount (not just the purchase price of the home).

#2: It is vital to consider the repair costs of a distressed home while evaluating your options. Sure the bank may be selling the home to you for $50,000 but it requires approximately $35,000 in repairs (and probably up to 10% more than that since estimates are rarely perfect). Add up the costs. Is this a better deal than purchasing another home that is nice and in move-in condition?

If you're going to use this loan program, be sure that you're able to get an outstanding deal and a home with immediate equity after the renovation is complete. Otherwise, you are likely better off purchasing a home that requires very little or no work.

#3: It takes time to have renovations completed - the larger and more complex the project, the more opportunity there is for delays. Things such as getting permits and inspections from the city can take considerable time. The great news about the FHA 203k loan is that you don't have to make loan payments for up to six months while this work is completed, however you need to ensure that you have the luxury of waiting to move in until the home is in livable condition.

Distressed foreclosure homes offer some of the best values in the real estate market today. If you believe the FHA 203k loan may be a good fit for you, be sure to speak to a mortgage broker or direct lender that has experience with these loans and get started!

Shannon Bynes is a Real Estate Solutions Specialist with Good Faith Home Buyers LLC. We provide solutions to both buyers and sellers throughout South Florida. For buyers, we provide both beautiful, completely renovated homes ready for move-in as well as fixer-uppers at wholesale prices. For sellers, we provide fast cash offers with lightning fast closings. Our job is exceed your expectations and provide reliable service and solutions that you can count on every time.
Check us out online at []
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Sunday, December 6, 2015

7 Secrets to Buying Your New Home

Whether you are thinking about purchasing your very first home or you are ready to sell and buy a new one, good advice and helpful tips are things you can always use. There are many decisions to make, some of which can even rob you of sleep, forcing you to stay up all night playing through different scenarios in your mind. When you are ready to get serious about buying your new home these secrets can be put to good use.

1. Take Advantage of the Internet - There is plenty of information available online. With the click of the mouse you can access available listings from many sites. You can also use a mortgage calculator to determine what you can afford while also being able to compare lenders and real estate agents.

2. Get Familiar with Your Credit - If you are going to be securing a mortgage, you should know exactly what is on your credit report. Don't wait until you are ready to apply for a mortgage to find out. Pull your credit report now, so you have time to have mistakes fixed while you are still in the shopping process.

3. Hire an Agent - Since you are about to make one of the biggest financial decisions of your life, you want a real estate agent who makes you feel comfortable. You should never feel like you are a burden, nor should you feel pressured into any decision.

4. Get Pre-approved - When you are confident that everything on your credit is correct, get pre-approved. This way, you will know exactly what you are approved, providing peace-of-mind in knowing you can close on your dream home when you find it.

5. Stop Trying to Time the Market - If you are trying to wait for the perfect time to buy a home, you may be waiting a very long time. The market can change by the day, so today could look bad but tomorrow may seem perfect.

6. Stalk the Neighborhood - If you end up hating the neighborhood, you may regret your buying decision. Being happy with the neighborhood is just as important as loving the features of the home.

7. Don't Focus on Features - If a bay window, crown molding or soaking tub are at the top of your list maybe they shouldn't be. You could pass up a perfect new home to which these features can be easily added.

Buying a new home can be a very positive and exciting experienced; or it can be a nightmare that you can't wait to be done with. The more educated you are on the topic the more likely you are to look at the big picture and think through your every move. By doing this and keeping these above secrets in mind, you will put yourself in a position for a smooth and successful new home process!

Sturdy Foundations, Inc. is dedicated to "Strengthening Homes, Communities & Lives". For more information, visit us today to at
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Thursday, December 3, 2015

My Clients Need a Garage But I Found the Perfect Home Without One?

Can I build a garage with the 203k program? 

Maybe - 

Yes, you can if there is no other garage on the site. If you do have a garage on site, then the new garage may be considered a luxury item and thus not be allowed. 

If you have a home that just needs a garage to be complete, build one with the FHA 203k, no problem.

If you have a two car garage and want to build a new detached garage too, No Can Do.

You can build a detached garage if you want to providing there is no other garage and there is no living area over or attached to that new garage structure.  If there is to be an in-law unit above the garage or in any way attached to that garage, the new garage must share a wall with the existing structure.

In 1994 we were taught that we could attached with breezeway but that is no longer the case. The guideline is being interpreted and misinterpreted to meet the current regime.

Why do I say misinterpreted? Simply because they still think "only 5 draw inspections can be financed into the loan" which other lenders interpret means no more than five draws are allowed. That part of the guideline actually states "On a project of $10,000 no more than five draws are allowed". They all quote the last half of that sentence but clearly by any rational person's interpretation on a project of $250,000 in construction maybe there could be a few more.

Attention Realtors, you have a client and you have found the best house in the world for them but it doesn't have a garage, attached or detached. No problem, it is an FHA 203k loan. Sell them on getting a 203k consultant and having their new loan include the cost of the new garage. Right now that is about  $20-30,000 depending on the size. We just finished a two-car detached garage for $28,000 that was over sized to accommodate a small work shop and another that was $20,000 without a garage door. The borrower wanted to get that outside the 203k.

Monday, November 30, 2015

Financing For Mixed Use Properties - 203k

Mike Young talks about how a 203k mortgage is a great way to find financing for a mixed use property. See more at

Friday, November 27, 2015

What You Should Know About a FHA Mortgage

Almost all homebuyers need to get a mortgage of some sort in order to afford their home. These loans are vital to the economy as we found out during the economic crisis of 2008. If you are trying to buy a piece of property you should look into getting a loan from the Federal Housing Administration. This branch of the Department of Housing and Urban Development has been working to insure loans to homebuyers. This means you can get lower interest rates with friendlier term limits if you take a FHA loan. Let's explore FHA loans a little more and see how they work.

How It Works

You are probably wondering how the federal government can offer low interest rates while at the same time making the qualifications for a FHA loan very easy and relaxed. The trick is simple. The borrower pays for mortgage insurance which protects the lender in the case that the borrower defaults on their loan. Pretty simple, right? Because each borrower is essentially covering themselves in the event that they cannot make their payments, the FHA can offer the consumer a loan with superb terms! If you are trying to get into a home, but have been turned down by the banks, you need to see what the FHA can do for you!

Credit Qualifications

For anyone with a credit score over 580, the FHA can offer you a mortgage with a down payment that is as low as 3.5 percent. Consumers who fall into the 500- 579 range are looking at a down payment of roughly ten percent, and those with a credit score under 500 generally do not qualify. However, the FHA can and will make exceptions for people with unorthodox or insufficient credit histories who do not have a credit score of at least 500. To see if you qualify for exceptions you need to speak with an FHA lending specialist.

Closing Costs Could be Covered

Buying property comes with a lot of other costs as well. These costs include, appraisals, title expenses, and credit reports. The FHA allows lenders, sellers, and builders to cover closing costs in order to entice a consumer to purchase their home. However, if a lender covers your closing costs, you will generally end up paying a higher interest rate on your mortgage. You will be able to compare rates between lenders with and without costs covered, so that you can make the best choice for your situation.

It is On Your Lender

The FHA is not the institution that is going to give you the money to put down on a residence. The FHA is merely an insurance fund, so if you are looking to get an FHA mortgage, you need to make sure that your lender is FHA approved. It is also important to note that not all FHA approved lenders offer the same rates even on the same loan, so it is still important to shop around for the best possible rates.

The FHA makes getting a new home a lot easier. See if your lender is FHA approved, and learn more about what they can offer you.

When looking for a Dallas mortgage, visit Benchmark Bank. Learn more about our services at
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Tuesday, November 24, 2015

Saturday, November 21, 2015

Using FHA Loans to Buy Your House? You Need an FHA Experienced Realtor!

If you're in the market for a home, FHA loans can provide you the means to get into a house much less expensively than a regular loan can, and they're especially beneficial to you if you're of modest means.

However, FHA loans can also be tricky to navigate, and you need to know what you're doing BEFORE you get one...

It's imperative that you have an FHA experienced realtor if you're looking to purchase a home with this type of mortgage, because there are some processes you'll need to go through in order to have the process go smoothly. If you don't do this, it could cost you both time and money you can ill afford.

Having an FHA experienced realtor can help you navigate the process, he or she can make things easier, and set things up so that the process itself is much easier.

Some things you should know about An FHA mortgage:

§ Lower minimum down payment

The down payment for an FHA loan is just 3.5%, as compared to at least 20% for conventional loan, and you can have a family member, charitable organization, or even your employer pay that amount. If you go for a conventional loan, you'll usually need to prove you have the down payment amount yourself.

§ Same interest rates as conventional loans (most of the time)

Usually, FHA loans have similar interest rates as conventional loans, but this will also depend on your credit score. There is an FHA 203K (rehab loan) that would usually result in a higher interest rate due to more risk if the lender is loaning money to rehab the property too. It will be much less than getting a construction loan though.

§ Sometimes okay even with weak credit

FHA loans will often be approved even for those who have had credit problems, whereas conventional loans will be much more difficult to get. What's more important with the loan is your income. Even if you have enough income, you've been at your job for a while, and your job is pretty secure, you might still face problems getting a conventional loan where FHA might be an easier loan to qualify for.

§ Higher ratio of mortgage payment income

With conventional mortgages, you can only have Housing Expense ratios of 28% of your monthly income, and 36% ratios of monthly debt to income to qualify. FHA loans allow a ratio of 29% and 41% respectively.

§ No prepayment penalty

Fortunately, there are no prepayment penalties if you pay your loan off early with an FHA loan.

§ Closing costs can be included in FHA loans (up to 6% of the purchase price)

Closing costs can also be included in these loans, as long as you qualify for the higher amount of closing costs.

Other things in regard to your realtor and FHA loans

Of course, you'll also need to know these things yourself, but it's imperative that your Realtor also knows the differences between conventional mortgages and an FHA mortgage. It's important because if your realtor doesn't know the ins and outs of these loans, he or she may proceed based upon the assumptions used for conventional loans, only to have FHA loan requirements not met and the process itself thwarted.

In addition, most FHA loans require that the home in question be appraised first, and that the property in question is in "habitable" condition. If your realtor knows what FHA requires for a particular property, he or she will be able to account for any possible issues with the appraisal so the process goes as smoothly as possible.

The bottom line?...

In short, if you don't work with an FHA experienced realtor, and you're planning to get your home financed through this loan program, you could find yourself not only failing to get the home you want, but spending money you don't have only to be disappointed in the end. Save yourself a lot of heartache, and find an experienced realtor to work with.

Dustin Miller is a Realtor who specializes in helping FHA buyers and works with homeowners to avoid foreclosure by doing short sales. He works in the Coral Springs / Coconut Creek, FL area as a Short Sale Realtor and resident. If you have any questions regarding your specific situation visit his site for his contact info and feel free to contact him anytime. For more FHA loan answers check out more info on FHA Loan Requirements [] by clicking the link You can also read more related articles or search for properties including FL Condos at this site
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Wednesday, November 18, 2015

I Was Told I Couldn't Refi Till After 6-months - Simply Not True.

When does it make sense to refinance before 6 months is up?

You just purchased a home, it isn't quite the way you wanted it but you needed to close the loan quickly, or so everyone told you. Now you can't really enjoy it till you get it fixed up and everyone is now telling you that you need to let this loan mature at least six months before you can refinance. Well, it just isn't true. In fact, it would be to YOUR benefit to refinance immediately with regards to getting the money to fix it up.

Simply not true!

FHA 203k loans have a little known feature for those who need to fix up a property they just purchased and likely should have purchased under the 203k program in the first place. It is simply that you can refi immediately and as long as you close the new loan within six months of the original loan closing YOU get to count all that money you put down as money you have in the new transaction. This is huge because you can

This is huge because otherwise you would have to show equity on a home you just purchased and may have to come up with more money to close the new loan. The drawback is that the original lender may loose their commission on the first loan. Not typically an issue if you let them do the new 203k loan. If they don't do the FHA 203k then they just loose their commission. Sometimes $%^* just happens. In many cases they can do the 203k for you

Sunday, November 15, 2015

FHA Loans Help First Time Home Buyers

Being a first time home buyer is both an exciting and frightening time. You cannot wait to find the house of your dreams, yet you worry about finding a lender, the interest rates and the final monthly payment. These concerns double if you have ever filed bankruptcy or have blemishes on your credit. This is why so many first time home buyers turn to FHA (Federal Housing Authority) loans. Since 1934 the FHA has been helping first time buyers like you make their housing dreams become a reality.

Why FHA?

FHA loans offers many benefits that conventional lenders do not. They are much more lenient in a variety of ways; ways that would normally get you a big fat "NO" on other home loan applications. Let's take a few moments to explore these benefits and why you should apply for an FHA loan when purchasing your first home.

Your Credit Score

Traditional lenders require a credit score of at least 720 before they will even consider approving you for a home loan. FHA, however, will approve you with a credit score of 620. Have you filed bankruptcy? No problem. Yes, you have to wait a bit, but with FHA the time is much shorter--two years after filing they will approve your application. If you haven't filed bankruptcy, but have collections or late payments, they tend to overlook these provided you are now making payments on time. Liens, however, are not forgiven.

Down Payments and Interest Rates

With an FHA loan, your down payment is only 3 percent, versus the typical 20 percent required by most other lenders. They also permit the seller to pay up to 6 percent of the closing costs to make the process even easier on you. Although your FHA interest rate is variable (there may be some fixed rate FHA Loans), their rates are so low you actually pay less over the life of your loan than a person with a 30-year fixed mortgage rate.

Application Process

It is actually fairly easy to get approved for an FHA loan, as they are lenient about who they lend to. You must have steady employment and meet the credit requirements, which we talked about earlier. They do expect a reasonable explanation for late payments, such as the loss of a job or a serious illness.

Importance of Debt to Income Ratio

Your debt to income ratio plays a vital role in any lender's decision. They take into consideration all your current debt (i.e. car and credit card payments, school loans, etc.), and will add in your potential mortgage payment. FHA loans are much more lenient about this as well. They allow a 50 percent debt to income ratio, which is extremely high in the lending world.

Now that you have read this article, it is my hope that your hope is rejuvenated and your mind at ease, at least a little. Although your credit life may not be perfect, you still have a fighting chance at buying the home of your dreams, thanks to the Federal Housing Authority. During a time and economy that is making it difficult for first time home buyers to obtain a mortgage, FHA loans are giving you back your dream. Run with it.

Charles F. Butler is a Real Estate Professional in Carson, Ca, specializing in First Time Home Buyer Programs, Distressed Sales, REO Residential and Commercial properties. Charles helps homeowners develop a second income stream so they can save their homes from foreclosure. Follow My Blog: Http://  Develop A Second Income Stream  3 Weird Tricks To  Earning 100% Commissions  Commission Loop Holes
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Thursday, November 12, 2015

FHA 203k has Arrived in Graeagle CA

Opened another office in Graeagle CA to service Sierra and more of Plumas Counties, as well as parts of Nevada County that are closer to Graeagle than formerly possible. 

Why do you need to know about this? Easy, places like Loyalton, Almanor, Beckworth, Verdi, Portola, and even Truckee (Nevada County) can be accessed much easier from this office. 

What is a 203k loan? 

Simply a tool for Realtors to sell more houses. This program allows you to sell more home as it opens up all the "fixer" type properties to the everyday client. Many people might purchase a home if they knew what the repairs would cost to fix it up but they don't. Well now they can easily find that by using a 'feasibility report' or 'feasibility analysis' which we provide for a modest fee. We have two feasibility clients. One is the seller, the point of this report is so you can help bring your seller to reality when they are asking too much for the property and you know it won't sell at that price. But moreover it also pin points the repairs so your seller gets the most they can and be fair to all concerned.

Feasibility Analysis

This is a quick look at the property for the buyer or the seller of a property. 

Seller Feasibility Report

- If a seller wants the highest possible amount for their property and they understand it needs work this product is a must. We provide a limited report that identifies the items that are health and safety or of necessity under the HUD/FHA Minimum Property Standards (MPS). This is all the seller is interested. What repairs are needed to bring my property to the MPS to get it sold. 

- If the seller is a bank or lending institution we also provide an estimate of the cost for repairs that most potential buyers might do such as update the kitchen or bathroom(s) where they were adequate for MPS.

This gives the potential buyer info they need to make a decision now. 

Buyer Feasibility Report

- If a buyer is about to place an offer on a property that requires repairs they must have a clear idea of the cost to make the repairs. If the property is being sold for $250,000 and needs $150,000 in repair it must appraise at $400,000 or it doesn’t make any sense to buy it. If the value after improvements to MPS is only $350,000 then the home is only worth $200,000 “as is”. Knowing that number for the repairs is part of your due diligence prior to purchase of a fixer.

- On the other hand, the buyer may also want to know the cost of the additional repairs they may want to add to the mix. In that case a Feasibility Analysis from The Mike Young Team will also provide a quick estimate of those repairs as well. So you actually get two estimates, one for MPS which is used to help you with your offer and, the second one with your additional improvements that make this YOUR HOME.

Let us know if you need us to come by one of your weekly or monthly meetings for an educational session.

Out of area owners

You may service out of area owners and that is okay too, If their homes or second homes need repairs we have a couple of programs they can use to get their homes fixed up for the spring as well. Many of these out of area owners who use this area for their summer homes will be leaving the area for their winter homes by the end of this month. These non-owner occupied programs have purchase and renovation limits or refinance and renovation limits up to $3 Million. These are good for investors as well as second home buyers.

Monday, November 9, 2015

Finding The Right Mortgage For You

Shopping for the right mortgage can quickly become overwhelming. With so many loan options available today it's important to understand how to find the right mortgage that fits your needs.

Purchasing a home is a huge financial commitment. Not only do you have to find the perfect place to call home, but also the right mortgage product that fits your situation. If you are unsure where to start, you can always ask a real estate professional. We deal with lenders daily and know a variety of reputable ones that we can recommend.

Step 1: Finding a Mortgage Lender

When shopping for a lender you will want a reputable company, the best deal available and stellar customer service. It's important to note that many times you may have one institution as the lender and another as the loan servicer. Ask questions as this will need to be understood before you close. While this doesn't change the terms of the loan, it will mean that you may be writing the monthly mortgage check to another company. Unfortunately, when it comes to whom services the loan, borrowers have no real say in the matter. It is worth it to shop around for a mortgage lender with which you feel comfortable and will also look out for your best interests. Ideally you will find a lender that offers competitive loan terms that can also handle your loan efficiently and competently. Things to ask when shopping around for a loan are the interest rate, points, APR and closing costs. You should also make sure that there is no pre-payment penalty should you pay off the loan early. The vast majority of buyers will opt for a 30-year loan with either a fixed or adjustable interest rate. However, with interest rates being as low, many buyers are choosing a fixed interest rate.

Step 2: Getting Qualified

Before the house hunt begins, a borrower should meet with a lender to get pre-qualified and figure out what they can comfortably afford. To get qualified for a loan, a lender will typically ask for the following items:

  • Two years of federal tax returns
  • Two years of W2's
  • Thirty days of paystubs
  • Statements for all asset accounts for the past 60 days (checking, savings, and any other investment accounts)

Once you submit a loan application and submit all of the required documentation, a lender will be able to tell you how much you qualify for and also can issue a pre-qualification letter that can be submitted with an offer. A pre-qualification letter can go a long way in showing that you are qualified to purchase the property.

Step 3: Understanding the Different Types of Loans

You will find a variety of loan types from which to choose. For instance, you may hear the term 'ARM'. Let's use the example of a 5/1 ARM. This means that the interest rate is fixed for five years and then adjusts annually after that. The appeal for an Adjustable Rate Mortgage (ARM) is that the initial rate is lower the a fixed rate. But when the loan resets the interest rate could go much higher. Often borrowers will choose an ARM if they don't plan on having the property for long.

For borrowers that don't have the ability to put 20 percent down on a property, the Federal Housing Administration (FHA) offers a loan that can be done with as little as 3.5% down. The FHA loans also offer an opportunity for homeownership to buyers that have less than perfect credit. The main problem with this type of loan is that mortgage insurance will be tacked on (mortgage insurance is required for any loan that has less than 20% down). The Veteran's Administration offers loans with lower to no down payments to service members and their surviving spouses. There are also first-time homebuyer loans that are available as well as rural financing through the USDA.

The other type of loan worth mentioning is the Jumbo loan. The standard loan maximum is $417,000, anything over that is considered Jumbo. Typically a Jumbo loan will require a higher down payment and potentially a higher interest rate than "conforming" loans.

There are many other options available to borrowers today. The best advice is to shop around to find the best product that fits your individual needs.

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Friday, November 6, 2015

What Should I Spend on a Remodeled Kitchen?

Who knows. I do know that was the guest speaker at a round table discussion on remodeling some time ago in San Jose. I got there a few minutes behind schedule and a San Jose Contractor was on stage talking at the time I arrived. He had videos and photos of some beautiful kitchens without a doubt.

Then he dropped the bomb on everyone when he started showing us photos of this kitchen and that and telling us the cost to do that remodel, was $70,000, and this other one at $65,000, and yet another at $80,000.

This is not to say he isn't or wasn't right but do we need these kitchens in a $300,000 or a $500,000 house... I don't think so.

This is a kitchen we put in for about $8,400.00 at retail price. The price the home owner would pay for this kitchen.

This isn't a $70,000 kitchen but it is a great kitchen for the house we put it into.

All Solid Wood Maple Cabinets with granite counter tops.

Does every home need a $70,000 kitchen, I don't think so. This kitchen made the cook in this home extremely happy.

When someone calls me to hire us and asks "What is your fee?" I cringe. How many consultants would just take the contractor bid and input it into the paperwork. We actually consult with our client. See what it is they are trying to accomplish with their renovation loan and then work to get that into their budget. It isn't about what our fee is, it is about getting you want you want at a price you might not otherwise be able to afford. We earn our fee by saving YOU money. We typically save our clients 4-5 X our FEE so you want us to give you the highest fee possible. I would think. Actually we are very competitive.

A client called the other day and asked my fee. I told her $800.00 based on her construction budget. She said another consultant told her only $350.00, I told her that I'm sure she won't be charged that. I was right. She called me back in a month and apologized. Her other consultant charged $350.00 for showing up at the inspection and then charged her $800.00 for the consultation. She actually paid $350 more thinking she was going to save money. Had we done that job she would have received better service, no bait "n" switch tactic, and we would have found a contractor that fit her needs better, providing more bang for her buck. What you pay isn't always what it costs you. You would be better to ask, "What do I get for your fee?"

Tuesday, November 3, 2015

Use the FHA Mortgage Specifically Created for Home Improvement

Almost everyone knows about FHA mortgages. They are tailor-made for first time homebuyers and others with less than perfect credit or other financial issues. You don't have to be low income or have bad credit to use FHA, but generally the loan limits prohibit high priced homes.

What you may not know about FHA is that there is a special loan program designed to provide the funds to buy or refinance your home PLUS additional funds to make repairs or improvements.

This FHA mortgage is called the 203K and the K is the operative part of the name. Not every lender participates in the rehab loan program, but the major national lenders do. If the loan officer you contact is unaware, then call the corporate office and ask them to direct you.

The FHA 203K loan program calls for an FHA inspector to go over the house, using the plans you gave him. Before you get to this inspection phase, you should be working with a general contractor who understands how to provide plans and specs for a project. Plans and specifications are standard in the contracting industry for anyone managing a project >$5000, which is the minimum rehab amount for this loan program.

The FHA inspector will decide if the project is feasible, depending on whether there is additional work required to bring the property up to code, and whether or not the property will appraise for enough to make the project "worth it". FHA is willing to lend based on the after-rehab value and will even stretch that value a little in order to get houses brought up to code.

Once the lender is happy with the valuations, the plans and specs, and the inspector's report, your loan file will be reviewed by an underwriter specially trained and certified in rehab loans. Your credit and finances do not have to be perfect to be approved, but the creditworthiness and qualifications are similar to a regular FHA loan.

One of the benefits of a 203K is that all costs can be added into the project. The fees, permits, closing costs, etc. are all added up and your downpayment on the purchase is calculated on the total. If you are refinancing instead of purchasing, the amounts are totaled the same way, but you might already have enough equity in the home to avoid coming up with any cash.

What's next? Once approved, the loan closes and the rehab portion of the money is escrowed by the lender. The contractor submits requests for payment and each phase is inspected. As soon as the work passes the inspection for completion, the contractor is paid. You can not go back to the well for more money, so your initial plan must be a good one. A contingency fund is usually added in during the total project calculation.

This contingency fund can only be used to fund hidden repairs that were not evident during the initial workup. Any remaining funds in the contingency are used to pay down the mortgage at the end of the project.

The FHA 203K mortgage is not a "piece of cake", but if you do not qualify for low cost money at the local home improvement equity loan bank, then it is very definitely worth looking into.

Judi Moore authors Ask The Underwriter at and personally answers questions from readers about FHA mortgages and mortgage advice in general.
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Saturday, October 31, 2015

Can Portola CA Take Advantage of the FHA 203k Programs?

The hustling bustling town of Portola located in Plumas County CA, can certainly use the advantages of the FHA 203k loan guarantee program. Why do I say "loan guarantee program"? Simple because that is what FHA is. They guarantee the lender that they will buy the loan back up to 96.5% of it anyway if for some reason the buyer doesn't make the payments and the home needs to be foreclosed.

What that means to the buyer or person refinancing is two-fold.

1) The borrower gets into the home with only 3.5% down and only 2.5% down on a refinance and their equity may be substituted for that so they might get the refinance and renovation money with no money out of their pockets.

2) The borrower gets the money to purchase or refinance AND the money to remodel or renovate the home all in one, low interest, thirty-year fixed rate mortgage. Money is only limited by maximum loan limits for the county. In Plumas County it means you might purchase a home for $250,000 and put another $75,000 into it in remodeling. Make it YOUR own home with your finished touches.

What it means to a Realtor - lots more business even when inventory is low. How is that you say? Easy, when inventory is low you may have a 2-bedroom home with one bathroom and your client needs a 3-bedroom, 2 bath house... it is a 203k and we add the other bedroom or two and bathroom or two.  Just think of it this way, you have a 2-bedroom house for $175,000 and they put $175,000 into the remodel. In 3-5 years you will likely be selling that $350,000 home for them.

What about those mixed use buildings downtown? Did you know you can purchase a mixed use building under this program? Higher commissions are all yours. What is a mixed use that would qualify? How about a storefront with two stores of living area above, even one story of living area above. You merely ignore the commercial aspects and count the residential units to see what $ amount you can get from the chart below.  So, for three units over a commercial store you are looking at a loan amount of $521,400 which means the sales price might be about $540,000.00 and the buyer gets in for 3.5% down payment or about $18,900. Lives in one unit, rents two out for about $600 per month each so their rent on their living unit is about $1800 per month and they have the store to rent out or run their business. If they tent it out for $2000 per month they are living rent free in Plumas County, Portola CA

PLUMAS County FHA Loan Limits

One-Family - $336,950
Two-Family - $431,350
Three-Family - $521,400
Four-Family - $648,000

Wednesday, October 28, 2015

Buy That House - The Fix-up Loan

Have you been looking for a house for some time now, but you have not found the one that is just right for you?

It could be for any number of reasons that the houses that you are seeing do not meet your requirements.

The layout is all wrong; The kitchen cabinets and counters are old and warped; The baths were in style back in 1945; You would be embarrassed to bring your friends and family to the place; The windows are of the old and energy wasting single pane variety; The furnace looks like the space capsule; The hardwood floors would be nice if they were sanded and buffed; The walls need to be painted after you scrub off years worth of cigarette deposits; The basement is dark, damp, and downright spooky;... And, yes, unfortunately, the list can go on and on. Certainly, you do not want to buy someone else's problems related to their lack of maintenance or a house styled to their preferences in design. Who has the time or the money to deal with these issues?

But wait. There may be a solution. You may be able to get a house, which meets your wants, needs, and desires. You may be able to have a house that is within your budget. You may be able to overcome the problems, which were created by these neglectful homeowners.

Indeed, you may be able to meet your objectives and at the same time actually purchase one of these homes, which have just left you disappointed and wanting for more.

The solution: The FHA 203K loan. Basically, this loan will allow you to purchase one of these less than desirable homes, fix it up, and still stay within the values for homes in that particular neighborhood within which you are looking.

Here are some general statements about using this type of loan:

First, if you purchase one of these homes, then you can expect the price to be lower, than if the house were in good condition. The appraiser will definitely consider the value to be lower than the better houses. So a house that has the potential to be worth $200,000, for example, could be purchased for let's say $100,000 or a number, which reflects the amount of work, which is needed. Second, the work which needs to be done, in order to actually qualify for an FHA loan, plus the work, which you would like to have done to make the home your own is determined. Let us say for our example that the cost of this work would be $75,000. Notice that the total of the purchase price and the fix up cost are $175,000 rather than $200,000. Typically, one can expect to pay less than the nice house price, because there are very few buyers if any who will want to take on this endeavor without some profit or equity involved. However, even if there were no equity at the completion of the project, remember that your other objective was to have a house, which meets your requirements. The basic steps to purchase a home by this method are as follows:

· Work with your lender to determine the amount of house that you can afford and payments, which would be in your comfort range. With this information, you can determine the price range for homes that you can afford;

· Work with your Real Estate Agent to find a property. Even if you are using a FHA 203K loan, you will still want to look in the neighborhood of your choice, look for houses, which have sufficient living area for your needs, and are within the cost and value parameters, which were established with you and your lender. It is important that your Real Estate Agent have some knowledge, although they do not have to be an expert, of the cost of various home improvement projects;

· When you find a house that will meet your requirements, prepare an offer to purchase. The offer must state that you will be using an FHA 203K loan. There should be a feasibility contingency which is to determine the full scope and cost of the repairs;

· Once, you have a ratified contract, you will start your feasibility study. This step may require several experts. These experts will be perform the following activities:

- 203K HUD Consultant: Walk-through with a visual inspection to determine if the property has any chance of meeting the cost requirements. If the numbers do not work, then the contract should be terminated at that point.

- Home Inspector: An inspector will look at things in more detail than, the 203K Consultant. For instance, the inspector will pull the electric panel and examine for any not to code, unsafe, or outdated wiring. If the inspection uncovers problems, which were beyond your original repair estimates, then you may need to recalculate to determine if the numbers can still be managed. If not, then the contract should be terminated;

- 203K HUD Consultant / General Contractor: Return to the property for a more detailed examination. At this time, he will prepare a report, which itemizes, with costs, those things, which will be done. It may be worthwhile to bring your Contractor with you for this visit. It is your Contractor who will need to agree to the pricing that goes onto the 203K HUD Consultant's report;

- FHA Appraiser: The appraiser will look at value in two ways, one the value of the property in its current condition, and two, the value of the property in its fixed up condition. Also, the appraiser will make certain that the report from the 203K HUD Consultant includes conditions related to Minimum Property Condition Standards;

- Termite Inspector: FHA will probably require a termite certification, but the termite inspection is not necessarily needed upfront. Between the FHA 203K HUD consultant and the Home Inspector, you should get a good idea as to whether this should be done upfront or not.

- Lender: The Lender will review the report from the FHA 203K HUD Consultant to assure that all of the numbers still work. If so they will process the paperwork.

· If everything is still within budget after all of the inspections and appraisals, then the deal will go to settlement and the Buyer will take over ownership of the property. Notice that it is still the house, which needs work.

· Per the terms of the 203K Loan, the work must be completed within 6 months and should be overseen by a General Contractor. Also, it is preferable that any work that is to be done be by licensed contractors, however, it is possible for the Buyer to perform some work such as painting, although it is under the eye of the General Contractor.

· The General Contractor should understand that he does not get paid upfront. He gets paid in phases after various stages of the work are completed. As each stage is completed, The FHA 203K HUD Consultant and the Buyer examine it and then sign off if it is okay before the General Contractor gets his money.

The Buyer cannot move into the house until the house meets occupancy requirements. It is possible that, depending upon the improvements, the Buyer can move in from the start or possibly not until the project is complete.

The loan amount is based upon the purchase price plus the cost of the estimated repair costs, as prepared by the FHA 203K HUD Consultant. If the actual cost is less than estimated, then it increases the equity, but does not reduce the payment.

Since some degrees of repair will preclude the Buyer from moving in to the property right away, the FHA 203K Loan has a provision, whereby up to 6 months of payments can be financed right into the loan. With this feature, a Buyer is not paying for rent and a mortgage payment at the same time.

This is the basic procedure for a FHA 203K Loan. Of course, there are other details and the procedure could deviate on any given deal.

That's it. You can get the home of your dreams and in your price range and all from someone else's mess.

 Ron Trzcinski

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Sunday, October 25, 2015

Create Inventory to Meet Your Client's Needs

By Mike Young

What I love about this business is that we see a different house or two every day and watch it as it transforms to meet the buyer's expectation.

Yep, that is my Chrysler 300 in the driveway.

This is the "after" scene if the same house. Nice neighborhood but there were no homes in that neighborhood that fit this family's needs. So they added SF to the home to get the home they wanted and in the neighborhood they wanted.

When inventory gets low this is a viable solution to many home buyers.

This can make the difference in an average Realtor and an exceptional Realtor. Providing your client with the home they are looking for, even when it isn't readily available.

You have to be looking at your inventory differently than you may have ever looked at it before. This is why I enjoy working with "Rookies" as they aren't "set in their ways" where they can't see the potential.

In all cases the work happens after the close of escrow. The Realtor gets paid, and goes to the next buyer. The construction starts and we stay with the buyer to the end of the process. We are happy to copy you on the progress photos if you like so you can stay in tune with the progress and create a portfolio of before and after photos. If you want to do that now to help you get started feel free to request photos for that purpose. We have thousands of archieved photos for you of homes we have completed.

REO Realtors, provide us with addresses of your hardest to sell properties and we'll give you some marketing ideas to help you sell those unwanted properties. We can even do manufactured homes with some minor stipulations. Even if they were built prior to 1976? That is the question isn't it?

Thursday, October 22, 2015

203k Lender Training

Lender Training now available. Be the best you can be. We'll show you how to provide the best possible service, help you with your Quality Control program, getting you set up right in the beginning can make all the difference in your success or failure with the FHA 203k.

Did you know the lender is REQUIRED to choose the consultant yet we see borrower's changing that assigned consultant now and again. We'll even show you want works and what works better with your marketing efforts.

Why spend a lot of money on things that we already know "doesn't work" marketing the FHA 203k loan program is so simple that most won't do it, thinking it is so easy it won't work... we prove it works, every time, If you want more loans this simple and inexpensive technique works wonders.

Call for an estimate tailored to your needs 
1.707.812.7668 ask for Mike

Monday, October 19, 2015

Can I Replace the Foundation with a 203k loan?


I have a 203K client that is starting the project from the foundation (pier and beam). During the estimate development process, the contractor selected is recommending replacement of all piers is that okay to replace all piers and still remain compliant with 203K rules?

Yes, it is. You can repair or replace a foundation with the FHA 203k and the HomeStyle Renovation Mortgage Product. This gives you options. We start with homes that have faulty or no foundations all the time.

This home had a foundation that you could actually grab a hand full and it would fall apart in your hand. The contractor was a bit older and didn't like bending over so much so he raised the house a little higher so he didn't have to bend over to work on it.

Saturday, October 17, 2015

FHA 203(K) Rehabilitation Loan, Is It For Me?

What is an FHA 203(k) Loan?

There seems to be a lot of confusion about the 203(k) loan from FHA. It is easy to see why, just look at the name, when I think of rehabilitation I think of a long drawn out battle. If I close my eyes and imagine a property that I would need a rehabilitation loan for I picture an old dusty mansion with exposed pipes, a broken down roof with mold damage everywhere, the hard wood floors are worn, warped and need replacing, there are holes in the walls exposing daylight through the bricks and I picture the only thing salvageable being the foundation and load bearing walls. In truth, the 203(k) is perfect for that type of home, but it is also a good program for other types of homes as well. Let's examine some of the options available with this wonderful program.

What is the 203(k)... Really?

One of the questions I'm most commonly asked is "Do you think that this property will pass FHA inspection?". My reply is always the same, as much as people seem to believe that FHA has their own super strict inspection, the do not. There is no inspection required by FHA. They do require that the house is insurable, and sometimes the insurance company will require a 4 point inspection, but FHA doesn't require it. The only other "inspection" required is the appraisal and as long as there are no obvious reasons for the house not to be in good livable condition it passes FHA guidelines. Why do I bring that up? Because the first thought I get when I think about a "rehabilitation" loan is a loan for properties that don't pass FHA's "required inspections", but the 203(k) is so much more than that.

If I were naming the 203(k) loan product, I would have used a slightly different term than rehabilitation. I would have called it the 203(k) Home Improvement loan. This loan can be used to modernize a perfectly livable home, or to change the flooring in a house because you would prefer bamboo flooring to carpet, or tile flooring to hard-wood because you like it better. There is a minimum $5,000 repair threshold in order to do the loan, that has to be met on structural changed, such as remodeling a bathroom and kitchen or changing the flooring. After that 5,000.00 threshold is met, you can even include items like new appliances.

Another great part of this program not many understand is that the 203(k) can be done as a re-finance to a home you already own, this truly makes it a home improvement loan rather than a rehabilitation loan.


Of course this is still an FHA loan, so only owner occupied properties are eligible, though the program seems like the perfect fit for the investor buying a foreclosure property that needs some updating, investors need not apply. However a person looking to buy a foreclosed home as their primary residence is the perfect candidate for this type of loan.

Also the process for a 203(k) loan does take longer than a traditional FHA loan, but when you do move in you can have the house completed to the way you like it, with the repairs done by certified professionals and the cost rolled up into one payment with your mortgage.

All of the work must be properly permitted and completed by professionals that are licensed and insured, so there is no getting Uncle Larry to do the work for you to save money. For the right borrower, the 203(k) loan is a fantastic product and should be seriously considered as an option for those not 100% satisfied with the house they may be purchasing. I for one, am very excited about the opportunity to start offering these loans to my clients again.

If you are a realtor with a house that has been on the market for a while and is in need of some updating, it would probably be a good idea to talk about the 203(k) option with your favorite mortgage professional

Find more articles like this at Florida Mortgage Pro Get pre-qualified by me here
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Tuesday, October 13, 2015

Lender Lingo - What To Know When Applying For A Mortgage

The fact of the matter is no one likes talking about borrowing money, but for many of us there comes a time when it's unavoidable. This inevitability doesn't have to be a heart-pumping, palm sweating nightmare. With the proper mindset and planning, going to a lender for a mortgage can be an easy process with minimal stress, and you'll come out knowing every possible answer. When preparing for the big day, here are some things to keep in mind.

Type A or B?

A good first step is getting to know the types of financing offered by your lender and which of those loans they believe will best suit your personal and financial situation. For instance, if you're buying a house that is in a less than perfect state, an FHA 203k may be the best choice. An FHA (or Fair Housing Administration) mortgage allows for the renovations, repairs, and the cost of the house all in one. On the other hand, if your future home is in a higher than normal cost bracket, then you may need a "jumbo mortgage", which comes with some added complications. Discussing the pros and cons of each type of advance and how they may best fit your needs will bring you to the next step.

Act of Faith

Obtaining what's called a GFE or Good Faith Estimate is a must when applying for financing. After you gain, preapproval is the best time to ask for your GFE. This mandatory document is created by the U.S. Department of Housing and Development, also known as HUD, and will provide you with information about the cost to close your mortgage, as well as the terms of the credit and the settlement charges. This form also has important dates, escrow account information, tradeoff table, and a shopping chart. You should bring any questions or concerns about your GFE to your loan officer. If you're still not sure, asking your realtor could also shed some light on any uncertainties.

Avoiding the Tar Pit

It is important to know what will slow your loan down. Many don't know that preapproval does not guarantee you to a line of credit. Make no mistake, until the full process is finalized, they don't have to give you anything. When it comes time to pony up the dough, a lender will go back through your employment status, credit scores, financial status, and other background information before concluding the transaction. Best thing to do is keep the pace. If you can help it, don't move around large sums of money, switch jobs, or start shopping for a new car after being preapproved. Take the time to go over your credit report, be available if the loan officer has any questions or concerns during the approval process, and always make sure to fill out every document to completion.

Showing your lender that you are making every possible effort to find the best mortgage for your situation, helps them gain confidence that you're a good match for their money. The loan officer is as much a person with a goal as you are, a common goal that you both share. Both of you want to see your application approved and getting all the information possible and keeping your life on a stable path ensures the best outcome.

When looking for a lender, Ann Arbor residents go to Huron Valley Financial, Inc. To learn more, visit
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Saturday, October 10, 2015

I Was Told I Couldn't Refi Till After 6-months - Bah Humbug

When does it make sense to refinance before 6 months is up? 
You just purchased a home, it isn't quite the way you wanted it but you needed to close the loan quickly, or so everyone told you. Now you can't really enjoy it till you get it fixed up and everyone is now telling you that you need to let this loan mature at least six months before you can refinance. Well, it just isn't true. In fact, it would be to YOUR benefit to refinance immediately with regards to getting the money to fix it up.


FHA 203k loans have a little known feature for those who need to fix up a property they just purchased and likely should have purchased under the 203k program in the first place. It is simply that you can refi immediately and as long as you close the new loan within six months of the original loan closing YOU get to count all that money you put down as money you have in the new transaction. This is huge because you can 

This is huge because otherwise you would have to show equity on a home you just purchased and may have to come up with more money to close the new loan. The drawback is that the original lender may loose their commission on the first loan. Not typically an issue if you let them do the new 203k loan. If they don't do the FHA 203k then they just loose their commission. Sometimes $%^* just happens. In many cases they can do the 203k for you