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What Affects Mortgage Rates?

Posted by admingg on Nov 2, 2019 in Buying a Home, Local Experts, Mortgage Info, Real Estate, Uncategorized | 0 comments

Your mortgage rate depends on your own financial portfolio and the home you plan to buy. But that’s not all. Mortgage rates also reflect movements in the U.S. housing market and the global economy — which is why they’re in constant flux.

Economy – The global financial picture drives all interest rates, including mortgage rates
Lender pipeline – The amount of business a lender is currently processing can impact their rates
Property location – State laws can drive up lender costs or keep them down
Home use – Primary residence, vacation home, or rental?
Property type – Single-family, multi-family, condo, mobile, co-op, etc.
Loan-to-value – Borrowing less (and putting more down) gets you a better rate
Credit score – Better credit means a lower interest rate
Loan features – Term, documentation, rate adjustment, interest-only payments, etc.
Points – Paying more up front for “discount points” lowers your rate
Loan amount – Very high or very low loan amounts can mean higher rates

The lowest advertised mortgage rate will probably apply to you if you have a low loan-to-value ratio and great credit. Everyone else will be subject to risk-based pricing adjustments.

You’ll only know what your rate is by getting a custom mortgage quote from a lender based on your unique borrower profile. And, typically better personal service from a local mortgage broker that will give you personal service with local interest in the community – they have more to lose if they do a bad job!!!

Taking control of mortgage rate factors

You can’t control many of the things that impact your mortgage rate. (Unless, maybe, you’re the president of the Federal Reserve or POTUS.)

The good news is that the variables you can control have the most impact on your rate. They are:

Property type — If deciding between two homes, incorporate the relative cost of financing when comparing them
Loan-to-value (LTV) — Putting more money down improves your chances of loan approval, cuts your loan fees and gets you a lower mortgage insurance rate (if applicable)
Credit score — It may be worth it to put off buying a home and concentrate on raising your FICO score for a lower rate
Loan features — Choosing a loan with a shorter fixed-rate period, or one with a 15-year amortization instead of a 30-year term can save you a lot in interest
Points — You can buy a lower interest rate by paying more up front, if you have expendable cash on hand
Loan amount — It might be smarter to get a conforming first mortgage with a purchase-money second mortgage than taking out a more-expensive jumbo home loan

By understanding the factors you can and can’t control, you can get your best mortgage rate when you buy or refinance a home.

HUD FHA Condo Financing

Posted by admingg on Aug 14, 2019 in Local Experts, Mortgage Info, Real Estate, Retirement, Selling a Home, Uncategorized | 0 comments

HUD Announces New FHA Condo Financing Rules!

The U.S. Department of Housing and Urban Development is expected to release updated guidance tomorrow on FHA-insured condominium financing. The new rules should benefit your real estate clients and customers by allowing more buyers to obtain low down-payment mortgages on affordable housing options.

Specifically, the new rules will:

Extend FHA certifications on condo developments from two years to three years, reducing the compliance burden on condo boards.
Allow for single-unit mortgage approvals—often known as spot approvals—which will enable FHA insurance of individual condo units, even if the property does not have FHA approval.
Secure additional flexibility in the ratio of investors to owner-occupants allowed for FHA financing in a condo building.

The full guidance will go into effect in mid-October, 60 days from publication.

“Condominiums are often the most affordable option for first time home buyers, small families, and those in urban areas,” said NAR President John Smaby, in a statement issued to the media Wednesday morning. “We are thrilled that (HUD) Secretary (Ben) Carson has taken this much-needed step to put the American dream within reach for thousands of additional families.”

Since 2008, NAR has championed policy changes in condo lending. NAR has sought rules that would allow the owner-occupancy level to be determined on a case-by-case basis and that would extend the approval period for project certification to five years.

NAR’s existing-home sales report for June showed condominium and co-op sales at a seasonally adjusted annual rate of 580,000 units, a decline of 3.3% from May and 6.5% from June 2018. With more than 8.7 million condo units nationwide, only 17,792 FHA condo loans have been originated in the past year.

“This ruling, which culminates years of collaboration between HUD and NAR, will help reverse recent declines in condo sales and ensure the FHA is fulfilling its primary mission to the American people,” Smaby said.

The full rule for single-family condo financing is scheduled to be published in the Federal Register on Aug. 15, 2019, and available online at https://federalregister.gov/d/2019-17213, and on govinfo.gov.

Updates & Upgrades Value to Sale

Posted by admingg on Jul 9, 2019 in Buying a Home, Local Experts, Real Estate, Selling a Home | 0 comments

June 26, 2019 | by Danielle Braff

As modest increases in inventory begin to attract more buyers to the market, it may seem wise for your sellers to undertake renovation projects to boost their competitive edge. Kitchen and bathroom upgrades, for example, are among buyers’ most desired features and can fetch a handsome return on investment, according to the National Association of Home Builders. But even as remodeling demand rises—the NAHB predicts home improvement activity will jump 1.6% and 1.1% in 2019 and 2020, respectively—some real estate professionals aren’t sold on the idea that renovating always fast-tracks a home sale.

There are two types of homes that sell quickly in today’s market: fixer-uppers and completely renovated properties, says Blayne Pacelli, a sales associate with Rodeo Realty in Studio City, Calif. You’ll need to pay attention to local market dynamics to determine the salability of each type of home in your area. For example, if your market has an abundance of investors, who typically renovate anyway for flips or rental properties, your sellers may not need to upgrade their homes in order to sell. Traditional buyers, however, may want a move-in–ready property.

In the Los Angeles neighborhood where Pacelli works, investors and traditional buyers are both aplenty. His renovation advice to clients depends on each one’s situation. “If a house is already fixed up except, say, one bathroom, I would suggest updating that bathroom to [appeal to a wide market],” he says. “If the bathrooms and kitchen need updating, I would leave them as is” and market the home to investors.

Weighing Your Options

There’s no doubt that home improvement increases property values, but renovating can be expensive—and there’s no guarantee your clients will recoup all of the costs at resale. With that in mind, you must help your clients decide: Is the expense of remodeling worth it? Small improvements rather than large-scale projects may suffice. “Timing matters as does the cost to renovate,” says Elisa Uribe, a sales associate with Golden Gate Sotheby’s International Realty in Oakland, Calif. “It is a seller’s market in our area. In some cases, minor changes such as interior and exterior painting and updating the landscaping can add a lot of curb appeal and make the house more appealing to a buyer.”

Uribe has also used virtual staging to present renovation options to buyers, relieving her seller of having to do the work. In March, she sold a client’s unrenovated three-bedroom, one-bathroom home, built in 1910, at the list price of $564,000. The sale occurred even though the seller had not updated the property’s exterior siding, windows, landscaping, and hardwood floor finishes.

The buyer was attracted to Uribe’s virtual staging of the home, which showed what it would look like with the updates and new furniture. Uribe also virtually staged the home’s layout with an additional bathroom to show buyers the renovation possibilities. “My client was out of state and didn’t have the time, or the funds, to update the house himself,” Uribe says. “The buyer was an investor who planned to update the property and put it back on the market fully renovated.”

Less Is More

Sometimes, some form of home improvement is necessary to elevate the profile of an otherwise undesirable property. In these cases, it may be best to choose simple projects with big impact, such as refreshing the paint or hardwood finish. James McGrath, co-founder of Yoreevo LLC in New York, says one of his buyers recently closed on a condo that had been extensively renovated. The seller, an interior designer, saved money by designing the remodeling projects herself, but she still spent $100,000 on the actual work, which included gutting the kitchen and bathroom among other changes, McGrath says. “If it’s not the highest price per square foot in the building’s history, it’ll be pretty close,” he says of the deal.

The renovated unit received a lot of foot traffic, with 60 to 70 showings. “That being said, the owner won’t make money on the renovation,” McGrath says. Though the renovation generated a higher price for the condo—which McGrath’s client bought for $690,000— it wasn’t enough to cover the seller’s remodeling costs, he adds. This is an example of why McGrath suggests that homeowners avoid big projects prior to selling.

Another renovation con: While the improvements may be a hit with some buyers, others may have different preferences and won’t pay a higher price for the work that was done. In fact, McGrath’s buyer brought in his own contractor because he wanted to replace the tile in the kitchen and backroom. Though the tiles were new and in pristine condition, the buyer had a different vision for the space, McGrath says. “Presumably, the seller would have gotten the same offer from [my buyer] had she not spent thousands of dollars on those tiles.”

Protect Clients’ Bottom Lines

You can help keep your sellers on budget by reminding them that “restoring the home to a good state of repair” is all that’s necessary before listing, says Michael Edlen, SFR, a sales associate at Coldwell Banker Pacific Palisades in Pacific Palisades, Calif. But that may mean something different in each market. In areas where buyers have the advantage, a seller may need to do more work on his or her home. “If an owner does not perform basic repairs, many buyers tend to ‘horribilize’ what they think they see and how much it could cost to fix it.”

If your client’s home needs an overall update, focus on the smallest items that have the biggest impact first and test it on the market before deciding to invest in larger projects. Updated light fixtures and window treatments, which are eye-catching accents, are often enough to move buyers, says Dawn Levy, a sales associate with Berkshire Hathaway HomeServices Georgia Properties in Atlanta. If your clients want to take it a step further, they can install new energy efficient windows, which can be costly but is a huge selling point with buyers, Levy adds. “A home with good bones that needs a cosmetic facelift is much more appealing to buyers,” she says. “Price point also plays a role here.”

Of course, the value of any renovation depends on your market. What works in one area may not work in another, so you must be knowledgeable about your specific neighborhood. In New York, for example, condos and townhomes that aren’t completely renovated typically don’t get much attention from buyers, says Eric Rosen, a broker with Halstead Manhattan LLC. “If the apartment or townhouse requires work, then the seller would be penalized,” he says. “This means that the property will trade for less than the repairs would have netted in a sale.”

14 Things to Avoid Before Buying a House

Posted by admingg on Jun 13, 2019 in Buying a Home, Local Experts, Mortgage Info, Real Estate | 0 comments

14 Things to Avoid Before Buying a House

Many first-time home buyers are surprised to discover just how many ways you can mess up a home purchase. You may have got your pre-approval, found a home you loved and made an offer. But if you want to avoid messing up the transaction, you will need to be extremely careful until the sale has closed.

Keep reading as I tackle what not to do before buying a house. Many of these items are mortgage mistakes that can be easily avoided. If you have an exceptional mortgage broker or real estate agent, more than likely a few of these points have already been mentioned.

Use the following tips to protect yourself and your home purchase. In fact, be sure to check out what you should do before buying a home. These twenty tips will help you make the best buying decision possible.

Making mistakes is easy when you have never bought a home before. Avoid these home buying mistakes to keep the stress out of your life!

Don’t miss loan payments.

You must keep your payments current on all your loan accounts, including credit cards and car loans. The lender will look at your credit again before finalizing your mortgage, and if you have missed any payments, it may lead to you losing the loan.

Many buyers mistakenly believe that once the lender issues their loan commitment, they are golden. This is NOT the case! Lenders have the power to revoke a mortgage commitment and will do so if they see fit. Not too long ago a buyer was purchasing a home I listed in Millbury Mass. The buyer had been selling and buying a house simultaneously. They closed on their existing home but didn’t make their last mortgage payment.

Unfortunately, this was flagged on their credit report and prevented the buyer from getting the loan for their new purchase.

They had to apply at a new bank under a different program (FHA instead of conventional). Needless to say, this caused their purchase to be delayed, and in the process, they lost thousands of dollars.

Be careful before you consolidate your debt.

Debt consolidation can be tempting when you finally start looking at buying a home. Most consolidation offers make it possible for you to bring all your debt under one umbrella payment, which makes sense for some people.

But there are also often hidden fees and interest rates that can increase dramatically without warning. Consolidation may not improve your credit in the way you expect, so be sure to read all the fine print.

Avoid changing jobs.

It goes without saying that changing jobs is not something you should do in the middle of purchasing a home! One of the things lenders look closely at is your employment history. They want to be sure that you are financially stable and capable of making your loan payments.

By changing a job before you get your loan, you make yourself less appealing to the lender. Changing situations may cause the lender think you are unstable, or that you won’t have a steady income to keep up with the mortgage. The word stability is something lenders love.

Keep your move under wraps until after the closing takes place.

Don’t shift your finances around before getting the loan.

When a lender pre-approves you, the approval is based on the current state of your finances. You want to maintain that state – the one that got you the pre-approval – at all costs. Sometimes buyers make the mistake of shifting their money around to better position themselves, but this is a mistake.

Wait to make any financial changes until after you have gotten your mortgage. If a lender sees you moving money around various accounts, they will ask for an explanation.

You will need to give them a detailed accounting of why you moved your money around. Avoid making this mistake and keep your money in one place before closing.

Don’t start banking at a new institution.

Your bank may have made you angry or upset. Or maybe you saw a great offer from a competing bank that you just can’t pass up. Well, you do need to pass it up, because changing banks before getting your loan can disrupt everything.

Just like the job and the finances, your banking history and status is part of the equation that leads to you getting pre-approved. Change your bank, and you may not get final approval.

Avoid buying a car…or motorcycle, RV, boat, etc.

Without a doubt buying a car while also purchasing a home is a common mistake. Doing so is also at the top of the list of what you shouldn’t do before buying a home. Sometimes the feeling of knowing you are finally going to get a home of your own can be so exciting that you start looking at other ways to improve your life – like buying a car.

Unfortunately, purchasing a car can throw a wrench into your home buying plans. Your loan pre-approval was based on the state of your credit and your debt load at the time of pre-approval before you bought a car. Adding the debt that the car purchase will bring may make you unable to get the loan for your home.

Don’t buy furniture or household goods on credit.

Another mistake many home buyers make is using credit to start preparing for their new living arrangements. You may want to start buying furniture and appliances to fill up your new home and make it truly yours, but hold back.

Taking on new debt, even for furniture or other household related items, will change the state of your credit and may throw up a flag for the lender that leads to the loss of your loan approval.

Avoid making large deposits into your bank account or making cash deposits.

Money that appears suddenly in your bank account makes lenders uneasy. In fact, they prefer for you to have the money that is going to your down payment in the same account for at least two months.

Lenders refer to the two month period as “seasoning,” and consider it a demonstration of stability and your ability to cover the loan payments. Whenever you make a significant deposit or start doing unusual or unexpected things with your finances before the home purchase, the lender may begin to scrutinize the loan and might back out.

The bank could, in fact, think it’s fishy to see large deposits moving in and out of your account, especially if that hasn’t happened before. Doing as little as possible to make a lender scrutinize your finances.

Avoid lying or stretching the truth on your loan inquiry.

You may have no intention of lying about your finances when you fill out a loan application, but the point needs to be stated regardless. Lying on a loan application is fraud, and if the lender finds out that you mislead in any way, you will almost certainly lose your loan.

Even stretching the truth or making an honest mistake that is inaccurate, can cause you significant problems if the truth is discovered. So be very, very careful that all the information you put down is entirely accurate. Falsifying knowledge is a definite no-no when applying for a mortgage.

This a significant home buying mistake that can put you in a horrible spot.

Don’t let anyone make inquiries into your credit.

Any time you apply for a credit card, a loan or even try to sign up for a new service, like a cell phone service, the company you are working with will probably make a credit inquiry. They do this to determine if you are a safe risk, much as the mortgage lender does.

But when the mortgage company sees that inquiries are being made, it may assume you are trying to take out more debt – even if you aren’t. While one or two queries may not be enough to lose your home loan, there is no reason to take unnecessary risks when you are so close to getting your home.

One mortgage myth worth knowing – having your credit checked by multiple lenders when buying a home does not affect your credit score all that much.

From MyFICO – “FICO scores are more predictive when they treat loans that commonly involve rate-shopping, such as mortgage, auto, and student loans, differently. For these types of loans, FICO Scores ignore inquiries made in the 30 days before scoring. So, if you find a loan within 30 days, the inquiries won’t affect your scores while you’re rate shopping.”

Don’t spend the money you are going to use to cover closing costs.

For many home buyers, the period surrounding the home purchase is one of financial scarcity. Money may be tight right now, which can make the money you saved to cover closing costs tempting. But avoid spending it.

The last thing you want is to be unable to cover closing costs when you are at the point where you almost have your new home. Stay strong and avoid spending it if you can help it. AND, Don’t overspend on a home!

Don’t overextend yourself.

When buying a home, lots of lenders will gladly give you what they think you can afford on paper. What you qualify on paper, however, doesn’t necessarily mean what you’ll be comfortable living on day to day.

Some buyers make the mistake of really overextending themselves. They end up becoming a slave to their home. If going out to a nice dinner from time to time is something you have been accustomed to be more conservative with your house purchase.

Avoid being a co-signer for anyone.

When you co-sign a loan, you are obligating yourself financially. It does not matter that you are not the primary person on the loan. If the lender needs money and is unable to get it anywhere else, it will come looking for you to pay.

Home lenders are well aware of this fact and are therefore disapproving of any applicant that decides to co-sign. As with all the other points listed above, you need to focus on keeping your credit and financial situation stable and constant until you have closed on the house.

No matter how badly you may want to help out a friend or family member, try to postpone co-signing until you have the money for your home purchase.

Don’t spend more than the value of the home.

There are times when real estate markets become extremely hot! In real estate jargon, we call this a “seller’s market.” Most of the country has been experiencing these conditions over the last few years. Buyers have been put in the position where winning bidding wars are the norm, not the exception in many places.

In fact, you’re more likely to see fancy ways to beat the next guy to the punch like an escalation clause in an offer. When you are in an environment such as this, it is easy to overspend as a buyer. After all, if you have lost out on a few homes, you’re more than likely going to reach to get a house you love.

When involved with multiple offers it is not uncommon for the sale price to be pushed significantly above asking. While the buyer may be willing to do this, a lender may not. When the home doesn’t appraise, the borrower may be stuck putting up more money or risk losing the house. You can’t assume the seller will be cooperative and drop their price. You could be rejected for the loan if you can’t make up the difference.

Thinking of Selling?

Posted by admingg on Jun 13, 2019 in Featured Property, Local Experts, Real Estate, Selling a Home | 0 comments

Key Questions for Owners Thinking of Selling

For many cities throughout the U.S. real estate markets, today undeniably favor sellers. With those markets that are particularly competitive, it can be very tempting to list your home even when you haven’t made a concrete decision to sell. Taking the plunge and listing can be an exhilarating decision, but doing so without asking yourself some important questions could leave you scrambling to figure out what you’re going to do should your home be a highly sought-after property.

If you’re toying with listing, ask yourself the questions below before you make your final decision.

How much is my home worth?

Unless you consistently check real estate prices in your area or are comparing comparable homes in your neighborhood, it’s likely you may not know the true value of your home. If you’re thinking of selling, it’s important to find out how much your home is worth. If you are dreaming of a new neighborhood, with the hopes that you’ll make a good amount of money off your current residence, do your due diligence and ensure your home is worth what you think. The last thing you want is to find out your home is worth less than you thought and your dream neighborhood is no longer an option. You can work with your local real estate agent to find out the current market value of your home.

How much is it going to cost me to sell?

When you list your home it can be easy to get caught up in the thoughts of how much you’ll make from selling, but selling a house does not come without costs. Selling can get expensive, especially when one considers all the outside factors that go into a home sale. Again, your local agent can help you understand the total costs (especially since many costs are dictated by where you live in the U.S. and other factors), but as a seller you can typically expect to pay these important items:

Agent commission (Seller typically pays Buyer AND Seller commission) (6%)
Staging and home preparation costs (1%)
Seller concessions (1-3% )
Repair costs (determined based on inspection)
Home ownership/overlap/moving costs (1%)
Closing costs (1-3%)

Sellers end up paying a fair share of the costs when it comes to the home sale/purchase. If all is said and done, and you’re only going to make $10,000 off your sale, is it really worth it to sell if your main goal is a good return on investment?

How long will it take to sell my home?

For some homeowners, a quick home sale is a reality if you live in a city with a competitive real estate market. But for many others, the time it will take your property to sell is really dependent on your where you live and the price and condition of your home. If your home is in excellent condition, it’s likely buyers will be immediately interested. If your house is in need of work, you might not see as many interested buyers. According to the National Association of Realtors (NAR), the median number of days a home in the U.S. sat on the market hit a new low of 29 days in April 2017. With that being the national average, your local real estate market will have its own average (that is also impacted by the condition of your home and the listing price), so there’s no concrete answer as to how long it will take to sell your home, but if you have a home that buyers want, it could be pretty quick.

Should I make repairs?

While many owners may balk at the idea of fixing up their home to sell it, the truth is that making repairs or improving your home can help sell it faster. You by no means have to make repairs when you’re toying with listing your home, but fixing up any pretty blatant cosmetic issues may help your property sell faster. It’s even a good idea to hire an inspector prior to listing to know if there are any issues with the core components of your home to avoid any surprises when it comes to a potential buyer hiring an inspector. It’s important to remember that major items, like issues with a foundation, HVAC system, or any other major part of the home, can be total deal breakers for some buyers, so make a point to assess your home prior to listing to ensure you know what you can leave as is and what you may want to fix beforehand.

Do I know where I want to go?

This is pretty important, especially if you are inclined to impulsive decisions. For some, selling a home due to a job relocation or wanting to be closer to family provides a for sure destination. But for those thinking of selling with no idea as to where they want to go, it’s a good idea to start thinking about and looking at places to move to. In those markets where homes go fast, you’ll want to have a pretty solid plan as to the area/neighborhood you want to be in, and you’ll have to be willing to compromise if you can’t find a home in your dream area. Seller contingencies are common, so don’t feel like you have to have your home sold before looking at other properties – it’s better to be on top of this than leave it to the last minute and not have a place to go once your current home sells.

Choosing to sell can be a hard decision, especially when there’s lots to consider. If you need any help, or just want to talk to someone with current real estate knowledge, your local agent is more than happy to answer questions and provide information on your local real estate market. Reach out today if you’re thinking of selling!

Is a Lease-option Right For You?

Posted by admingg on May 18, 2019 in Buying a Home, Local Experts, Mortgage Info, Real Estate, Selling a Home | 0 comments

Lease Options, Land Contracts & “Timed-Purchase” with Early Occupancy…

Options to purchase a home outside of getting financing today exist for about the same reasons. The home seeker does not have the resources to buy a home at this time. It could be a credit problem from bankruptcy or foreclosure, divorce, job loss, medical hardship, new career, starting a business, 1st time home buyer and even no credit at all.

The bottom line: You cannot buy right now, but you want a certain home or area, you don’t want to rent and you don’t want to move twice.

Like 96% of the buying public, you go online and search, dream and look for options to get what you want. Getting into a home is no different except that you may be pressed for somewhere to live (quickly) depending on your circumstances. So, you read about lease options & land contracts as a way to get into a home. You may even read about so-called no money down schemes (we will address that later!). But you wonder, are they too good to be true. Can you really get the home you want at a price you can afford and finance/re-finance it later when your situation improves.

Simple Answer: Yes, you can. That’s the good news. The bad news is it is not without an added cost.

In most cases, the owners of nicer homes in better areas don’t want or need to offer terms. These homes sell at fair market value relatively quickly and the risk to the seller typically ends at closing. Sellers often need their proceeds from the sale to move on. Whether buying another home, paying off debt, or investing the sellers would need a good reason to offer terms. And whether you like it or not, sellers typically expect to make money on offer a buyer terms – they become the lender in this case and will be carrying the risk of the buyer’s maintenance, negligence and default if something goes wrong. After all, the buyer is the one with credit problems or life circumstances.

Put Yourself in the Sellers Shoes

Lease option candidates are typically a credit risk or have other life concerns;
Owners of better homes are not interested in a regular lease/tenant relationship so the buyer must have intention to buy;
Buyers must have earnest money down – this would become part of their purchase money but it is typically not refundable;
Maintenance has to be on the tenant/buyer – can the tenant/buyer afford repairs;
Terms for monthly rent start minimally at interest only payments with a balloon clause to payoff the seller in so many months – this does not go towards purchase price;
The seller SHOULD want additional monthly payment as an incentive to complete the purchase – this extra money reduce down payment upon purchase, but is not refundable; and
The best deal for both parties is to include an incentive clause that rewards the buyer for closing prior to a deadline.

EXAMPLE: A $200,000 home seller may want 5% down and 8% interest-only payment on a 24 month contract. The seller is offering an incentive of 2x the amount paid monthly above the interest only payment for a payoff on or before 12 months into the contract, 1.5x the amount paid monthly above the interest only payment of payoff before 18 months and 1x the amount paid monthly above the interest only payment for a payoff on or before 24 month contract term. The seller should also have a default clause at 24 months or a defined change in terms that penalizes the tenant/buyer to compel the fulfillment of the contract to withdraw and vacate – forfeiting their rights and moneys. The math here is pretty simple –

$10,000 Down, $1520/mo. Add $300/mo for overage and close within 12 months will make your down $15,400 at closing. In buying the home, your new payment will be under $1000 at 4.5%.

The “incentive” to fulfill early serves two purposes especially if the buyer contributes regularly :
1) If the tenant/buyer is serious about buying they should be improving their condition to be a good mortgage loan applicant AND they should be saving money for the purchase; and
2) In paying in what they are “saving” in order to buy the property, they can report to the loan officer that they have additional funds towards purchase outlined by the contract.
The motivated buyer will add as much as they can each month above the required monthly payment as that would increase much faster than savings, go towards reducing their loan liability making them both a better applicant and requesting a smaller loan, and instill confidence with the seller. It should be a win-win.

Buyer Beware of Your Misconceptions!

Too often, I hear agents and buyers asking why the seller needs a down payment or why the buyer needs to include a credit report, bank statements & employment verification. Buyers have been mislead into believing that their credit history does not matter, or sellers should be happy with say 5% interest when the banks are offering ~1-2% on CD savings. The answer is really simple, and you may not like it… more often then not, lease-option & land contract buyers are high risk. Private owners simply cant afford to absorb the possible damages and costs like big lenders can.

The bottom line is that these can be a good situation for all parties when all parties perform. Your local professional Realtor can get you connected to a local title company &/or attorney to establish escrow, hold title &/or quitclaim documents and record liens where necessary.

More Info from BankRate: How Rent To Own Works

DISCLAIMER: This is provided for informational purposes only. It is not legal or financial advice. Interested parties should consult licensed professional practitioners in your locale in order to conduct business in accordance with local, state and federal laws. Company, website and writer assume no liability for the use or misuse of any opinions expressed in this article.

4 Tips For Making A Competitive Offer

Posted by admingg on May 15, 2019 in Buying a Home, Local Experts, Mortgage Info, Pre-Market Opportunities, Uncategorized | 0 comments

So, you’ve been searching for that perfect house to call ‘home,’ and you’ve finally found it! The price is right, and in such a competitive market, you want to make sure you make a good offer so that you can guarantee that your dream of making this house yours comes true!

Below are 4 steps provided by Freddie Mac to help buyers make offers, along with some additional information for your consideration:

1. Determine Your Price

“You’ve found the perfect home and you’re ready to buy. Now what? Your real estate agent will be by your side, helping you determine an offer price that is fair.”

Based on your agent’s experience and key considerations (like similar homes recently sold in the same neighborhood or the condition of the house and what you can afford), your agent will help you to determine the offer that you are going to present.

Getting pre-approved will not only show home-sellers that you are serious about buying, but it will also allow you to make your offer with confidence because you’ll know that you have already been approved for a mortgage in that amount.

2. Submit an Offer

“Once you’ve determined your price, your agent will draw up an offer, or purchase agreement, to submit to the seller’s real estate agent. This offer will include the purchase price and terms and conditions of the purchase.”

Talk with your agent to find out if there are any ways in which you can make your offer stand out in this competitive market! A licensed real estate agent who is active in the neighborhoods you are considering will be instrumental in helping you put in a solid offer.

3. Negotiate the Offer

“Oftentimes, the seller will counter the offer, typically asking for a higher purchase price or to adjust the closing date. In these cases, the seller’s agent will submit a counteroffer to your agent, detailing their desired changes, at this time, you can either accept the offer or decide if you want to counter.Each time changes are made through a counteroffer, you or the seller have the option to accept, reject or counter it again. The contract is considered final when both parties sign the written offer.”

If your offer is approved, Freddie Mac urges you to “always get an independent home inspection, so you know the true condition of the home.” If the inspector uncovers undisclosed problems or issues, you can discuss any repairs that may need to be made with the seller or even cancel the contract altogether.

4. Act Fast

The inventory of homes listed for sale has remained well below the 6-month supply that is needed for a ‘normal’ market. Buyer demand has continued to outpace the supply of homes for sale, causing buyers to compete with each other for their dream homes.

Make sure that as soon as you decide that you want to make an offer, you work with your agent to present it as quickly as possible.

Bottom Line

Whether you’re buying your first home or your fifth, having a local professional on your side who is an expert in his or her market is your best bet in making sure the process goes smoothly. Happy house hunting!

Harvard Housing Study

Posted by admingg on Mar 29, 2019 in Buying a Home, Local Experts, Mortgage Info, New Construction, Real Estate, Retirement, Selling a Home, Uncategorized | 0 comments

JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY – 2019

Harvard released its comprehensive study on housing trends and the current state of housing. The report begins with the Executive Summary:

With new construction still slow to recover from historic lows, almost 80 percent of the nation’s 137 million homes are now at least 20 years old and 40 percent are at least 50 years old. The aging of the US housing stock has been a boon to the home improvement industry, helping to lift the remodeling market to nearly $425 billion in 2017, according to the latest estimates from the Joint Center for Housing Studies.

Indeed, in the years since the Great Recession, spending on improvements and routine maintenance to both owner-occupied and rental properties has not only increased the value of the existing stock but also contributed a dominant share of residential investment. In addition, the tens of millions of projects undertaken annually—from roof and window replacements to major kitchen and bath remodels—generated 2.2 percent of national economic activity in 2017.

Some of the recent strength of the remodeling market reflects a significant increase in spending by rental property owners. The surge in rental demand following the housing crisis prompted owners to invest in substantial upgrades to their units. Homeowners also had some catching up to do on maintenance and replacements deferred during the downturn, particularly on properties converted to rentals or left vacant for extended periods.

Get the full report here: Harvard JCHS Housing Study

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