Saturday, August 29, 2015

My 203k Consultant Isn't Doing a Good Job of Managing the Contractor!


Well, I don't know how to put this any other way but "it isn't the consultant's job to manage the contractor" so he or she shouldn't be expected to do that.

1) The consultant is a consultant when first hired. They will consult with you and help you develop a plan to renovate the property. A "scope of work" or "scope of renovation" so that every contractor you might have bid this job does so with the same list of items to complete.

2) Secondly the consultant can assist you in finding a lender or a contractor if you haven't found one. We typically know who can close these loans fast and who only talks a good talk. We can give you our "do not use" list of contractors but only in the event you have chosen one of them. Some contractors, a very short list, don't have a clue about contracting but have had the ability to pass the test and get their license.

3) The consultant can assist you in choosing a contractor from the bids that have come in on the project. The lowest bid may not be the best bid. We had one not too long ago where we bid the job at $82,000 and the first contractor bid over $100,000 and the second bid at $67,000. Of course the owner felt they wanted the $67,000 bid. That is fine but we asked the lender to fund the $82,000 as it was pretty clear to me that they forgot something or made an error and we are not here to bankrupt a contractor.

4) Once the loan closes we are "no longer the consultant" however we then work for the lender as the "draw inspector" on our projects.

No where in our job description does it say we have to, or are expected to, manage the contractor. On the contrary we "consulted" and told you right up front that "YOU are the boss, YOU are responsible to choose the contractor, YOU are responsible to call the contractor and communicate your pleasure or displeasure with the contractor.

As an inspector to monitor the progress we are typically out to see the property about once every 30 days so "the borrower", being there nearly every day, must call the contractor and insure they are on the job when it appears they aren't.

The Homeowner/Contractor agreement says very clearly that once the project begins the contractor should have someone on the project working each day until it is completed so feel free to call them and let them know when their employee(s) don't show up on the job.

Wednesday, August 26, 2015

FHA 203K Rehabilitation Loan

The Federal Housing Administration (FHA) 203K mortgage loan allows homebuyers to finance additional monies into their mortgage for household repairs, upgrades, or improvements. The majority of homebuyers embark on a home improvement project within 90 days of purchasing their new home. In addition to starting new home improvement projects, many new homebuyers purchase appliances shortly after buying their new home. Home improvements and new appliances can be costly and add significant financial burden to most household budgets, especially after acquiring a new mortgage. To lessen the burden of these costs, FHA created the 203k rehabilitation mortgage. This loan product is a favorable alternative for many homebuyers who intend to undertake home improvement projects or purchase appliances for their new home. Because the FHA 203K mortgage offers permanent financing, a borrower will only need to obtain one loan to finance both the purchase and rehabilitation of the property. An appraisal is completed based on the current and the projected value of the property.

The FHA rehabilitation mortgage comes in 2 basic types. The first is the regular 203K loan, which can be used for properties that have significant repairs exceeding $35,000, or if the property is in need of structural repairs (including room additions). The second type of rehabilitation mortgage is the 203K streamlined loan; this version is available for the purchase of a house in need of minor repairs, such as: painting, new air conditioner or furnace, or painting.

The maximum mortgage that is available on a 203K loan is calculated as follows: the as is value of the property plus the repair costs, or 110% of the estimated value of the property once all the repairs have been completed. An FHA appraisal would be needed for these calculations. As with all FHA loans, the down payment requirement is 3 ½%. For FHA 203K loans, the down payment is determined by the total acquisition cost (which is the sales price plus the cost of repairs).

For either the regular FHA 203K or streamlined loan product, an itemized contractors estimate is required thoroughly listing all the repairs to be completed. The contractor will need to be licensed, registered in the city where the work is to be performed, and insured. If a full 203K loan is needed, a licensed FHA consultant will be required in addition to the licensed contractor. All 203K loans will have a contingency reserve added to the mortgage to cover any unforeseen expenses during the repair or improvement phase. The contingency reserve typically adds a 10 to 20% cushion to the contractor's estimate. This is added so there will be enough funds to complete the repairs in the event that the repairs end up costing more than the original estimate suggested. The contractor's repair work should be completed on a 203K loan within six months after the house transfers into the borrower's name. If the house is uninhabitable, there is also a provision which allows a borrower to roll up to six months of mortgage payments into the loan. This is to offset living expenses, if the borrower has to live elsewhere during the remodeling.

Eligible improvements for the FHA 203K mortgage programs include:

• Remodeling Kitchen and Baths

• Modernizing Plumbing, Heating, Air-Conditioning, and Electrical Systems

• Roofing, Gutters, and Downspouts

• Windows, Flooring, Tiling, and Carpeting

• Energy Conservation Improvements

• Improvements for Accessibility

• New Freestanding Appliances

• Lead-Based Paint Stabilization or Abatement of Lead-Based Paint Hazards

• Structural Alterations in Reconstruction (Full 203k only)

All health, safety, and energy conservation items must be addressed prior to completing any general improvements. Luxury improvements are not eligible under this program. Construction or additions can only be financed under the full 203K program (refer to for details).

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Sunday, August 23, 2015

25 Things to Consider When Buying a Home

Buying a home can be stressful, so it is important to have an idea of what you are aiming to purchase before you head into the transaction. Here we will take a look at 25 things that you need to consider when you are buying a home.

25. Your Budget

Know how much you can spend on every aspect of the deal.

24. Location

Where do you want to live and what benefits does a particular location provide?

23. The Loan

Are you able to secure the money you need to make the purchase viable?

22. The Estate Agent

Who are you going to work with in an effort to find the home of your dreams?

21. Your Credit

Will your credit history damage any potential purchases? Know where you stand beforehand.

20. Re-sale

Think about any home you're interested in with the long term in mind. Will it have re-sale value a decade later?

19. Know What You Want

Make a list of the things you want from your ideal home so you can match it as much as possible.

18. Consider All Expenses

Tax, insurance and plenty of other expenses have to be considered before you make your offer.

17. The Contracts

Never, ever sign anything before you have had a chance to take it away and examine it properly. This is a fast way to putting yourself in a bad position.

16. Research Funding

Do you qualify for governmental aid? If you don't know then take a little bit of time to put the research in and find out.

15. Staging

Remember that any house you view is carefully staged, so look beyond that and imagine yourself in the home.

14. Have an Emergency Fund

Unexpected problems can cause serious issues with your budget, so make sure you have an emergency fund stashed away.

13. Do You Have to Own?

Never completely disregard renting as an option, so at least give it some consideration before buying.

12. The Smells

Odours can be indicators that something is wrong with a home, so take a little time to sniff around when you are viewing to detect mould or other unpleasantness.

11. Use Your Head

The heart can be a powerful thing, so try to remove emotion from the buying process as much as possible to make logical decisions.

10. Negotiations

Be careful about what you make as a first offer and always be polite with the seller.

9. Patience

You need to take your time and not rush into a purchase if you want a truly great home.

8. Crime Reports

You should be able to find crime statistics for any area you want to move into, so make sure to check them carefully.

7. Schools

If you have children you should know what schools are available for them.

6. Commuting

Are you going to find it easy to get to work from your new home? Make sure you know beforehand.

5. Home Inspection

Never buy any property where you haven't had an independent home inspection carried out.

4. Utilities

Understand who you will be paying for your utilities and how much they are likely to cost each year.

3. The Market

How does the property market look at the moment? If it is favourable to sellers then it may be a good idea to wait.

2. Down Payment

There is no point heading into the home buying process without having the down payment, so know how much you need.

1. Room Size

Does the house offer you enough space for what you need? If not then consider looking elsewhere.

Keep 100% Commission You Earned It - Now Keep It If you are looking for a job in Boston that has the potential to make over 150k+ your 1st year and you have your real estate license in MA then please contact us at Also for more information about investments property, or Cape Cod real estate please then visit are Boston real estate blog Thank you for reading. P.S. If you like this article please give us a tweet! Please note the content is not intended to be, legal or investment advice. You should consult a licensed attorney or realtor for advice regarding your individual situation.
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Monday, August 17, 2015

Personal Finance Tips : How to Apply for an FHA Loan

Apply for an FHA loan, or Federal Housing Authority loan, by meeting the loan criteria, filling out the paperwork, and considering the income requirements.

Friday, August 14, 2015

FHA Homeowner Loans Can Be a Lifesaver

Long-term mortgages, such as 30 years loans, are commonplace today but that hasn't always been the case. Decades ago, a person financed their family home using five-year term loans with a required 50 percent down payment. After that 5 year term was up, Joe Public acquired another loan, and at the end of a particular length of time, you had to then produce the total to be paid.

In addition to the large down payment, those loans had other issues. It was difficult for people to be approved for such loans, particularly when folks suffered a loss of jobs or when real estate prices turned down. So in order to assist future homeowners, in 1934, the newly formed Federal Housing Administration (FHA) began offering up long-term mortgage home loans guaranteed by the federal government. This helped lots of people get long-term home loans with minimal down payments, which made it easier to endure tough times.

FHA Home Loan Advantages

FHA mortgage loans possess some benefits over common home loans. Given that the federal government protects FHA mortgage loans, they generally come with more lenient qualification and requirements, decreased down-payment requisites, and additionally they may well be assumable. They also offer home loans to individuals whose credit ratings would, in any other case, disqualify them for a regular mortgage. And additionally, the interest with a FHA mortgage loan is usually much lower for those with less than desirable credit, than it may be via a customary loan package.

Thereby, FHA mortgages have become well-liked by novice home buyers. In case you get declined from various other mortgage loan companies as a result of substantial debt to earnings percentage or because your credit score is unattractive, you ought to think of applying for a FHA mortgage loan, in which those prerequisites may be missing or even a great deal more accommodating.

Information on FHA Home Loans

FHA home loans have their problems and they are definitely not for all people. As an example, the FHA establishes mortgage loan limitations to guarantee the package will serve low to moderate-income homeowners. You may find that because of these home loan limits that you really must have to obtain a Conventional loan to buy your own house.

It's interesting to note that the Federal Housing Administration itself cannot supply you the finances for your home and also it doesn't set the interest percentage rates on the lending products. The FHA is generally insuring the homeowner loan you are receiving from your loan provider. Surprisingly, your FHA loan is not actually backed with your tax dollars, rather it's funded by your mortgage insurance premium payments.

Here's How to Get One

The FHA can provide a variety of lending products like standard fixed rate home mortgage loans or adjustable rate financial loans. A particular benefit of a FHA variable rate mortgage is they ensure that the monthly interest rate on your mortgage will only adjust by no more than 1 or 2 % points - absolutely no unanticipated shocks or tremendous jumps to surprise you financially.

The whole process of obtaining a FHA home loan is really very similar to obtaining a standard home mortgage. You'll need to produce proven evidence of your income over the past 2 years - however what qualifies as income is relaxed a touch. Items like alimony, child support, retirement, or social security and such qualify as income for FHA. And additionally, short-term debt (less than 10 months and under $100 per month) is not going to count against an individual.

All in all, a FHA loan is a great option for potential home buyers!

Visit my site to learn more about Michigan FHA loans and other loans at competitive prices.
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Tuesday, August 11, 2015

4 Low or No Down Payment Mortgage Options

Are there still low down payment mortgages available to prospective home owners in 2015?

The housing market seems to be steadying itself. With a solid increase in sale prices and home values appreciating, the components are in place to support a positive outlook on the future for the housing market.

Unfortunately, one avenue that may hold back or slow down the health of the housing market is the credit market. It has become increasingly difficult to qualify for a home mortgage, much less save for the required down payment, which has increased in recent years due to the market collapse.

The good news is that there are mortgages available to help those home buyers who have difficulty in saving for a large down payment. These low down payment mortgage programs range from federal to local and are outlined below.

No Down Payment Mortgages: USDA

The Department of Agriculture's Rural Development mortgage guarantee program offers a no down payment program that is based on the location of the home, so not all homes will qualify.

Click here to see if the house you are considering will qualify. Typically, the homes that qualify are located in rural areas or the outer areas of city limits. This program has been so popular that it has had periods during the year when it will run out of money to further fund any deals. Also, due to the popularity and an apparent lack of personnel, be prepared for longer processing and underwriting periods than some of the other options provided here.

No Down Payment Mortgages: VA Loan

Available for qualified veterans, Veterans Affairs guarantees no down payment mortgage loans. Private lenders originate these loans, which have no mortgage insurance. There is a funding fee, but that can be rolled into the loan.

No Down Payment Mortgages: Navy Federal

Navy Federal Credit Union offers no down payment mortgages to qualified members for homes that are purchased as a primary residence. Membership is restricted to military personnel or the family members. This program is similar to the VA program, but the funding fee is actually lower.

Low Down Payment Mortgages: FHA

The FHA mortgage program has gained in popularity as other no or low down payment mortgages have disappeared in the wake of the market collapse. FHA guaranteed loans currently account for 15% of the market. The required down payment for an FHA loan is 3.5%. The FHA recently increased their rates and they are based on the purchase price of the house.

Even if you do not have the ability to save for a large down payment for your house purchase, do not give up hope. As you can see there are several viable mortgage options available. And we may see additional options as the housing market gets healthier and lenders relax their lending guidelines further. It's still a great time to buy a home with today's average interest rate at 4.31% and housing prices not fully recovered.

Port City Home Buyers LLC is one of Wilmington and Jacksonville's premier real estate investing groups because we focus on doing things right. We specialize in distressed single family houses (foreclosures, bank REO's, sellers who need to sell fast). We then provide a great mix of remodeled homes for new home owners, turn key rentals for landlords or wholesale them to other investors. For more information about our company and how we can help you, visit
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Saturday, August 8, 2015

Why Making a Down Payment on a House Is Necessary

You may have heard all kinds of suggestions on what size of down payment you should make on your house. These range from no money down up to 30%. There are several factors that go into determining what the best down payment is for you. You might also find different types of loans that won't necessarily penalize you for a lower down payment.

A down payment is the amount of money you are willing to pay out when you finalize the home loan contract. It reduces the amount of money being financed, and it can mean you gain a beneficial interest rate.

This is not the same thing as earnest money, the money you put forth in a home offer. The seller will see the earnest money as a sign you are serious about buying their house. Your earnest money can be rolled into your down payment, once you get to that phase.

Your loan to value ratio is based on the amount of the loan left after your down payment. The more you can pay as a down payment, the lower your loan amount is. Your loan to value ratio will also be lower. The value is the value of your home - what you are buying it for. Your bank will give you preferential rates for a loan to value ratio of 80% or less.

A private mortgage insurance, or PMI, might have to be paid for if you put down less than 20%. Since your loan to value ratio is higher, you are seen as more of a risk. Many banks got burned in the housing market crash of 2008, and this is one way of preventing that from happening again.

People with exceptional credit may qualify for a 5% down payment, thanks to their credit history. Banks are more likely to look favorably on them, hence the lower rate.

If you really want to get into a house, and you are willing to pay a PMI, it might be worth a lower down for you. Otherwise, waiting might be the best plan for you so you can reduce your monthly costs. Talk to your lender and evaluate your own financial situation to see what will be best. You will still want to have some money in savings for the unexpected, so don't drain yourself completely.

An FHA or federally backed loan might be able to save you some on your down payment. Many times these loans only require 3.5% as a down payment. If you are a veteran, you may qualify for a no money down VA loan. See your lending institution for more details.

Some states may also have some home loan assistance options. It's worth looking into them, especially if you are willing to live in the country.

Ultimately, the larger a down payment you can make, the better. It will get you a preferential rate and it will reduce the face value of the loan. Banks will be more willing to talk to you and finance your home loan if you can pay a higher down payment.

If you looking for a jobs in Boston that has the potential to make over 150k+ your 1st year. And you have your mass real estate license then please contact us at Tazar. Also if you need the best Boston plumbing service at a fair value please contact Boston Plumber.
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Wednesday, August 5, 2015

How Do I find an FHA 203k Consultant?


That is a good question. You can go to the HUD website and find one or you can go to Yadzooks website and find one, or you can contact us and we'll line you up with one. The problem is going to be the same in both cases. The question you should be asking is "how do I find a good FHA 203k consultant?" 

They are not all the same just like all Realtor's are not the same. I see some that go way overboard to provide a quality service for their clients and others that do the bare minimum and they draw the same fee. So please don't just look for a consultant, find a good one. 

The biggest difference is going to be in the service they provide to the client. We all work off the 1994 HUD guideline for the most part at least as far as it goes. No one in his right mind would charge less than the fees described in that guideline. No raise in 20 years... mmm. that is your first clue.

 Example 1 - If the consultant tells your client they will do the inspection for $350 "beware". I lost a job because I quoted $800 plus mileage right off the guideline while my competition quoted $350. He got the job. It involved a room addition where he provided a penciled in sketch that barely readable... oh, how did I know he did this? The client told me and showed me when the consulting invoice came in at $800+mileage. Oh, and that first $350 was a "show up charge" for the initial inspection.  This client ended up paying $350 more than we would have charged and we do a professional looking sketch of the addition with a CAD program as part of our fee. 

This consultant also had a contractor come out and provide a bid, then wrote the specifications around that bid.  

Example 2 - Client calls us and asks for a "feasibility report", what do you charge? My competion charged $200 and then charged $700 for the consultation - I quoted $700 for the consultation to save the client the $200 fee and get the loan closed faster. All the lender saw was the $200 vs the $700 fee and guided them to the other guy. That is all just fine but the loan would have closed faster with us and at a $200 lessor cost to the client. Don't always choose the lowest up front fee and assume it is the best way to spend your client's money. In this case the loan officer chose to put his commission and the Realtor's commission back a week or three because he thought he was saving his client money. BTW, you don't need a feasibility report for a full 203k it is an additional fee that in many, most cases, it isn't necessary. 

What should a 203k consultant do for their money? 

The consultant should be making their inspection independent of the contractor and created a "bid request and job specification" then priced it out so the client has an idea of the cost of this project. Then that list goes out to the contractor(s) for bid. This way the client is informed up front and the contractors all bid the same list.