Tuesday, June 30, 2015

Choosing the Right Contractor for Your 203k Project

This is getting harder and harder to find good contractors who will charge a "fair price" for your renovation project. I actually hate to get that call from a lender who is doing a streamlined k loan and wants to get a list of contractors from us for that project because we don't typically work that way.

Contractors, like any other trade contractors, have a tendancy to increase their prices when times are good and get competitive when times are not so good. This is not a bad thing and by the end of the year most of the contractors we know are flush again, waiting for the winter months when they get competitive again. It is just the way things are. Please don't misunderstand this isn't necessarily a bad thing, it is just the reality of it all.

Here is what the results are however and that is a sad reality for the owner, borrower, buyer, etc when a project comes available for bid.

Streamlined k project - This is where everyone else tells you that the maximum amount is $35,000... it's not but that is what the guideline actually says. Your contractor bids the job at $34,500, the lender says the loan is dead or it must be a Standard 203k loan because the contractor failed to realize this particular lender REQUIRES a 10% contingency reserve to be included in the loan dropping the actual work to about $32,000. Remember this loan as the one with NO structural work.

NOTE: once this happens the HUD Guideline says this loan has tripped the check valve (my words not HUD's) and is now a Standard 203k. This can also happen if the appraiser sees repairs that should have been called out and weren't... oops, another tripped check valve, it is now a Standard 203k.

If your lender does both Streamlined k and Standard 203k loans this isn't a problem but if your lender only does streamlined loans you will hear the new story line like "there is too much work for the 203k so you need to find another home to purchase" or "we need to get the cost of the work down.

Standard 203k project - This type loan has no $35,000 limitation. In fact the loan in most of the areas I work has a maximum loan amount of $729,750 so the limit is the purchase price + renovation costs not to exceed the $729,750 limit. Yes, of course the home must appraise for the loan as well as the borrower must qualify for the higher amount.

What does the consultant do for their fee? 

We just completed a project where we put the bid together along with the scope of work and bid the job for the client. This is what we do for our fee. Then the project went out to bid. Contractor 1 bid the job at $85,000 in construction costs, permits, fees, etc. On the surface it is pretty straight forward. Oh, almost forgot, my bid was about $59,000 including costs and fees, permits etc. Why such a large difference? Two possible answers, one is that my bid was not very good. We aren't perfect and are not above making a mistake from time to time, or, two - the contractor was very busy and used this opportunity to make up for a low bid on the last job.

Second bid came in at $60,000 from a contractor that we knew and recommend all the time. What does a consultant do for their fee - simply let the borrower know what a "fair price" might be for their project then helping them find a contractor who isn't so busy or one that is not trying to recover from a bad season.

What can you do about high contractor bids? 

Shop more, this is time consuming but certainly the right thing to do if you are way high. If you are only a little higher than you need to be there are other solutions. Talk to the contractor and see if they can help meet the necessary requirements. Remember that they are just people with a skill and being nice guys we all want to see the deal progress. Sometimes a contractor will step up and work with you to make it happen. This is clearly the fastest solution. Or, you could contact your "consultant" and get a few names.

Back to the original question - When a lender asks me for a list of contractors it just isnt' the right question... they should be asking for the name of a few contractors who are hungry right now. Again, we like to promote the contractors that we deal with on a regular or semi regular basis as we believe them to be the best in the business. This doesn't mean that we know them all and we take on new contractor all the time. If you have a favorite contractor and want them to be added to our list please have them contact us. We are located in every area of CA and most other states.

To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation".

Saturday, June 27, 2015

HOME LOANS - Renovation home loans

Whether you're buying or refinancing, the mortgage expert at EverBank will help you find a loan that meets your needs—and avoid any bumps in the road. These guys are a direct lender with processing, underwriting and funding all under one roof, they keep things moving smoothly from start to finish. And are dedicated mortgage to walk you through the process every step of the way, making sure there are no surprises at closing.

  • 40 years of loan expertise
  • No-surprise closings
  • 50-state lending network
  • Fixed and adjustable-rate loans
  • Jumbo loan amounts up to $3 million
This the one I've been chomping at the bit to tell you about. A fixer loan up to $3,000,000 loan amount is here. This month I had a couple clients call me with properties that had a purchase price of $780,00-800,000 and needed $100,000 to $150,000 in construction... FHA only goes to $625,500, now you have another avenue for these higher balance transactions up to $3MM in loan amount.

Wednesday, June 24, 2015

Your First Mortgage: What First Time Buyers Should Know

For first time homebuyers, the mortgage qualification process is often much more difficult than finding the starter home of their dreams. If you decide that you're ready to purchase your first home but aren't sure how or where to start, here are four helpful tips for getting the ball rolling right into home ownership.

1. Check your credit. If your credit rating is not any good, you're going to have a hard time getting anyone to lend you a large amount of money. There are several free sites potential first time homebuyers can visit to find out how they're being rated by the three major credit agencies. Lenders will use these scores to determine your trustworthiness, so it's important that you're not surprised by what it says. If you find any errors, you can have them corrected.

2. Get your documents in order. To get pre-approved for a loan, you'll need to have several documents in hand to show the lender that you can afford to make the monthly payments. You'll need to have your tax returns from the past couple of years, bank account statements to show that you have enough savings for a down payment, and paystubs for a more recent confirmation of income. You'll also need your social security number on hand so the mortgage company can run your credit.

3. Decide what size home you can afford. Your monthly payments will be made up of much more than just the principle and interest of the loan. Included in your payment will likely be your local property taxes, the homeowner's insurance on the home, any flood insurance, and the monthly mortgage insurance premium if you choose not to put down at least 20% of the selling price up front. Research the costs of these factors in your area for an idea of what they will add to your monthly payments.

4. Pick a lender or two. Make an appointment to talk with a mortgage representative near you. You'll also want to talk with a local lending company or your bank. Going to more than one place may help you understand the process best, and you'll be able to compare terms to get a better deal. They will help talk you through the process and ensure that you understand the terms of the loan. Further, if you qualify, the lending agent will also be able to offer you pre-approval for a loan, which will help in the negotiation process once you find your dream home.

Getting approved for a mortgage can be a confusing process, especially for first time homebuyers. By being prepared to qualify for a loan before you find the right home for you, you'll be able to spare yourself the heartache of missing out on it because you didn't qualify for the loan. Once you have your financing squared away, you can let the searching begin!

In Dallas, mortgage options are easy with Benchmark Bank. Learn more at https://www.benchmarkbank.com.
Article Source: http://EzineArticles.com/?expert=Andrew_Stratton

Article Source: http://EzineArticles.com/9065122

Thursday, June 18, 2015

How to Find Your Ideal Fixer-Upper Homes for Sale

Investing in a house is a big decision that often comes with a big price. However, with the right skill set and tools, anyone can buy a fixer-upper home that can be renovated at a more affordable price. These homes for sale are available everywhere and may be just a few repairs away from complete restoration.

What Is a Fixer-Upper?

A fixer-upper home is a piece of property for sale that is in need of renovations, repairs, or overall maintenance. These homes for sale often make great investments, as they can be bought at a discounted price. The extra money is then used to make general repairs either by the buyer or a hired contractor. If done correctly, this strategy can either make for a more affordable investment with less of a down payment or it can allow the buyer to resell the fixed property for a profit.

Your Ideal Fixer-Upper

Many times, the perfect fixer-upper is simply the one whose potential other buyers cannot see. Sagging ceilings, broken windows, or bad carpets can turn other buyers off. If situated in the right neighborhood where property values are likely to increase, buying these fixer-upper homes for sale can make for an ideal, lasting investment. The location is often key.

Conditions to Consider Before Buying

When searching for your next property to restore, there are a few other basic conditions to consider:

- The layout of the used home has many repercussions. A house that is already chopped up into tiny apartments or renovated poorly by past owners can be a bigger job than many can handle. This can involve moving walls, which is expensive and at times impractical with certain foundations.

- Configuration of the property is another aspect that has more weight if you are planning to resell it for profit. Often, houses with three bedrooms or more are sold more easily. Other key aspects are kitchens with more than one entrance, master bedrooms located on the first floor, and a good overall flow.

- The condition of the house is of the utmost importance. Some houses need a little repair, while others need an all-out makeover. One thing to consider when buying your fixer-upper is your skill set. A simple repair for one owner can be a nightmare for another. Be sure you know how to make the repairs needed, or discuss the cost with a trusted contractor.


It is always a smart idea to get your property inspected by a certified expert before making the final purchase. Pest inspections, roof inspections, sewer line inspections, home inspections, and engineering reports can make all the difference in your decision. The experts have the qualifications to assess every detail and can give you a proper assessment of these fixer upper homes for sale.

When looking at homes for sale in Newburyport, MA, residents visit http://mynewburyportrealtor.com/.
Article Source: http://EzineArticles.com/?expert=Andrew_Stratton

Article Source: http://EzineArticles.com/9069286

Monday, June 15, 2015

My Fixer Aquisition Cost is $850,000 and It Needs $250,000 in Work

Just got this call... YES, we can help you.

Chris Davis at Everbank will guide you through their process. Just click on the link for Chris' web-page. It still has to appraise for the full amount including the renovation or in this example about $1.1 Million or so.

Last week the question was for a $745,000 sales price and $150,000 in construction. Yes, these are now doable up to $3 Million loan amount. Not the typical LTV of course but Chris will fill you in on their guidelines for this product.

We had one a while back that, had it been a single family home would have worked out well for the $1.5 Million purchase and $625,500 renovation project. You can see that this opens up a whole lot more homes for renovations.

Remember the one we did last year for an $888,000 purchase and $150,000, this loan would have been better for the client than the 203k was able to do.

Now you have renovation financing for those higher end home.

REO Realtors can move more of those high end foreclosures with this loan product.

Friday, June 12, 2015

Realtors Report 2015 As The Perfect Year To Purchase Your First Home

If you are thinking that 2015 sounds like a fantastic year to purchase your first home, then you are bound to be in good company. Read on to find out why many first-time buyers will find this year to be the best year in quite a while to purchase a new home.

The Housing Market Is Better Than Ever

The housing market is now in the midst of a perfect storm! From lower interest rates to pent-up buyer demand, everything seems to be coming together this year.

When the market started to slowly recover in late 2012, it was entirely a seller's market. Unfortunately, they took this opportunity to price homes just out of the reach of potential buyers. However, sellers are now coming around to the demand for lower price tags and have listed properties at more realistic prices. Though 2014 had a very slow autumn season, history has shown that slow falls are usually followed by a slew of buyer demand the following spring. If the past couple months are any indication, this seems to be the case for 2015.

In addition, interest rates are finally coming down after a steady increase starting in May 2013. Some realtors feared rates would rise to 5%, consequently slowing down the burgeoning market. However, since September 2014, rates have gone steadily down and are now at the lowest that they have been in over two years! Unfortunately, these rates can't stay low indefinitely. It would be wise to purchase a home soon since the Federal Reserve has decided to allow rates to remain low until later this year.

The Economy Is Booming

Probably the most significant reason of all to purchase your first home in 2015 is the upward march of the general economy. Between gas prices going down, the stock market going up, and unemployment declining, things are really starting to turn around.

Lending institutions have finally started to loosen their grip for the first time since the 2008 housing bubble burst. Freddie Mac- and Fannie Mae-backed loans are now even offering a loan that only requires 3% down as a deposit. Combined with lower gas prices, this generous program will enable many young families to move out to the peaceful suburbs and commute to work. Home values have also increased 3.68%, according to realtors, making the purchase of a home a great investment.

Take Another Look

Are you willing to buy your first home in 2015, or are you still undecided? Now that you know experts feel that this year will be the strongest year in the last decade, it may be worth your while to meet with a few realtors in your area to get a feel for your local market. Attend some open houses and read some online listings. If you still think that the market is failing, you may be pleasantly surprised. There is nothing like the feeling of owning your own piece of this world, so why not take the plunge?

When considering realtors, Ann Arbor residents visit http://www.isellannarbor.com/about_us.html.
Article Source: http://EzineArticles.com/?expert=Alfred_Ardis

Article Source: http://EzineArticles.com/9064975

Tuesday, June 9, 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.

Saturday, June 6, 2015

Financing For Mixed Use Properties - 203k Online.com

Mike Young talks about how a 203k mortgage is a great way to find financing for a mixed use property. See more at http://www.203konline.com

Wednesday, June 3, 2015

Two Types of 203k Loans - FHA 203k Renovation Loan Differences

Josh Smith explains the differences between the two types of FHA 203k Renovation Loans, and what can be done with them!