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 @ http://www.HMP-MidAtlantic.com. To contact him directly, call 443.219.2775 or visit his website http://www.MatthewKrimm.com.
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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 http://gogambino.com/aboutus.html.
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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

By


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 [http://www.goodfaithhomebuyers.com]
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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 http://www.SturdyFoundations.com
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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.