Posts Tagged ‘qualifying’

  • Spring Market brings confidence, I think.

    Business Handshake

     

    I’m not one who just takes recent economic news as gospel. But having said that, it does look like we are moving forward with a better housing market. Just take a look at this recent post by Don DeZube of the National Association of Realtors.  Spring Market. You have to admit its pretty positive.  The increases are slight but are running ahead of  last year. The office that I manage is up about 6% over last year. That includes all categories: average sale price, less time on the market, list price of homes, total volume sold and total listing volume.

    If there is one problem, it’s that we do not have enough good salable properties on the market. The buyer demand is there and we find ourselves in multiple offer situations. The sellers are happy but the buyers are not. One  cause for the shortage certainly can be attributed in part to  thousands of properties still”underwater”, that is, the owners owe more than the house is worth. Banks are slow in approving possible short sales. Also the Feds have not extended the “debt forgiveness ” provision that allowed sellers to escape the tax consequences of such a sale. There is also some implication  that lenders are holding back millions of stalled foreclosures from the market in the hope that  rising prices will allow the lenders to recoup a larger return of dollars at the “Sheriff Sale”. Who knows…Plus under the new QM rules (Qualified Mortgage), underwriting guidelines are making it  much harder for the average home purchaser to qualify for a mortgage.

    Man Scratching Head

     

    Lenders are trying to address the above issues by loosing up certain underwriting criteria. Credit scores of 620 and in some cases 550 will get you into a home.  The fact that mortgage applications for all types of  loans are off in some cases 60% from last year might be one reason that lenders are looking for business with less than a truant officer’s mentality. If they don’t lend it, they are not going to make it. Not rocket science.

    Here is an explanation to help you better understand the “QM” rules.

    One last thing that I have mentioned  several times. If you are in financial trouble, wondering about whether you can stay in your home because you are behind in your mortgage, are considering bankruptcy or in a reverse mortgage and you have any questions, please give me a call. Don’t do anything drastic until you have a chance to talk to a  professional. I can recommend several that can help. Call me at 6107372310. No obligation.

     

  • So what’s the deal with the Stock Market? Gimme the House instead.

    Businessman Bouncing Over Stock Chart

     

    I don’t have a clue.  Used to be  able to gauge the housing market by what’s going on in the Stock Market.
    I gave up on that comparison a long time ago. To me it makes absolutely no sense. How can a barometer of the economy change so fast. I mean really, up 200 points one day, down 225 the next. I saw a pundit on a business show the other day that said traders are now using computer programs that make changes in a nano second. How is that possible? They buy, sell  and set the tone for the market before you or I even have a chance to act before our first cup of coffee. Crazy….  There is a thing called “Penny Stocks”. Companies that are looking for money and issue stocks that are worth literally  less than a penny a share. Okay……  I’ll buy a hundred shares for a dollar? Still sounds like a night at the Casinos to me. Kinda like playing the penny slot machines. Maybe I’ll hit it big and get a 1000% return.

    Wall street might be a dead-end for the average family.  But then there is the housing market. The great banking debacle of  2007 seems like a generation ago. Mention to a millennial that their grandparents actually had double-digit interest rates when they bought their first house, they look at you like  you have two heads. But it’s 2014 and there is a zero point 30 year fixed rate at 4.875%.  Pretty good.  The values of homes are rising again and home owners are looking at  increased equity. Buyers are coming out of hibernation but are still a little unsure of how to go about that purchase. One thing that is  a must, is that both buyers and sellers have to be reasonable in negotiating.
    Credit is still a concern but there are programs to address the buyer with as little as 580 credit score. How can that be? I have always said that there are only a few ways that banks can make money. The  main way is to lend it. The refinance boom is over for lenders. That means they have to go after purchasers of homes who need mortgages. Now is a great time to be a buyer and negotiate with a lender for a great rate.  For a really concise explanation of the current market and what you might need for a down payment and minimum credit scores  for  potential buyers, listen to this podcast.

    There is no getting away  from the financial trauma we all experienced over the last several years, but the housing market is coming back and there is no better investment for the average family. The volatility of the stock market is something that a lot of us just don’t want to risk, at least not right now. There’s something about an”Inverted Yield Curve” that leaves me wondering what it all means. Call me for housing info at 6107372310. Or email me at my new email address salvatoreruta13@gmail.com

  • Death and Taxes

    taxes picture

     

    I think you know what I mean. Its inevitable. But I guess I  anticipate the tax portion of this phrase with  utmost dread every year. April 15, or some day real close  when the government comes a calling and tells me to pay up.  God I hate it. and I always pay. Oh I know what  some you are thinking… you  always get money back.  How come I don’t. Well because I basically don’t want to give the government the use of my money interest free all year-long. That what it is. They take it out of my paycheck send it in and then those spend happy bureaucrats use it all year-long without so much as a thank you let alone any interest on it. Where’s the fairness in that?

    No, I’ll take my chances in taking as many exemptions as I can to get as much cash as I can in my paycheck. I’ll pay  up once a year and the penalty. But in the meantime I am using the money for me and my family. But ideally I should zero out, no refund, no penalty. I’m working on that.

    But regardless,you can’t escape. But the good news is, if you are a home  owner and borrowed money to purchase the home ,the mortgage interest is deductible. That, along with any property taxes that you pay. Pray to God that our leaders in Washington stop trying to eliminate these deductions from the average homeowner. That fact that we are almost 18 trillion dollars in debt as a country, leaves little doubt that they will continue to come up with  creative  waves of separating you from your hard-earned money.

    It really is a war. Us fighting to keep it, and them fighting to take it. And even death won’t free you from the tax man. Your  federal estate is taxable over 5.4 million dollars and in some states like Pa. the inheritance tax can be as high as 20%.

    Because of the terrible economic situation that has occurred since the crash of 2007-2008, many folks have found themselves owing money to the Federal government when they thought they were out of the woods and on the way back to stability. Let me give you some examples.

    1. Selling your home short. This is where you received the okay from your lender to sell your home for less than what you owe. Up until the  end of 2013, there was no income tax due on debt forgiveness by a lender for  an owner occupied single family home.  This exclusion  expired at the end of 2013 and Congress has shown no interest in extending this provision. So if you sell underwater in 2014 you may owe a big fat tax bill to Uncle Sam. The only way to escape this is to file Bankruptcy or be declared “Insolvent” by the IRS. There is a difference. Talk to a lawyer and an accountant about these alternatives.

    2. Forgiveness on credit card debt. This is similar to the above scenario except there has never been an exclusion. I have met several folks who have worked long and hard to rearrange credit card debt only to receive a 1099 C from the credit card company indicating that the debt is forgiven but now report it to the IRS as income.

    It really is a shame that folks are trying hard to work out some equitable solution to pay their bills and find out that the hole is some cases is deeper.

    Because of situations I mentioned, it is getting harder and harder  to reestablish oneself for the possible purchase of  a home, let alone pay off debt. But there is hope. Did you know that you can buy a house and get a mortgage after a discharged bankruptcy. Also if you lost a home to foreclosure, yes you can buy another house after a period of time. There are some  new credit caveats for sure, but it is possible. If you are in a Chapter 13 Bankruptcy your time frame is even quicker. Chapter 13 is when you are actually making payments to a creditor under court supervision.

    Look, we all have problems. Some are financial, some are medical, some are emotional. But I am one of those guys that feels if you recognize your limitations and mistakes and are willing to keep on plugging for you and your family, then don’t give up the dream. That’s why I’m here, to discuss the options and give you some advice. Those experts that I can suggest you meet with will help you, not for free, but they won’t break the bank for you again.You owe it to yourself and those you love. But you have to take the initiative. Call me and get started. 6107372310. The first meeting with me is on the house. Click here for some additional 2013 tax tips.

  • Touchy, Feely

    touchy feely

     

    Internet, smart phone,voice mail, email,Facebook. What do they all have in common?  Heck this one is easy.  They all allow so-called communication between two or more people without any overt face to face interaction. No, you can’t count Skype.You know you all have heard or seen the story, or perhaps you actually participated in the event, where two or more people are at some location, function, or event, where  or at least the majority of people are transfixed on their cell phones and everyone  is texting, emailing or Facebooking  to someone else and are not even looking or speaking at the person next to them. By the way is Facebooking really a verb?

    I’ll probably be accused of paranoia or at a minimum some  old senior member of the real estate community who just doesn’t quite get it. They will say this is not the wave of the future but it is the present. It’s reality, and get on board. Well I think, notwithstanding my age,  I get around pretty good in the Digital Age.  I am Linked In, Facebooked, Pinned, Twittered and am blogging away. But I know from my long life in the Real Estate profession, that after searching online for their dream house, buyers want to talk to somebody for advice, they want to go out and look at the house, drive by the neighborhood, go inside, look at the carpeting, paint and room sizes. They want to smell the air inside to see if there were smokers in the house, if it smells like, cat, dog or a beauty salon. A Buyer is not going to get the “feel” for those things  just looking online.  And most importantly, they want to be with a professional who can provide decent council about the house. Here are some additional tips on preparing yourself before you buy. Tips

    If you are a seller , can you really be objective about the house where your kids were born, or where you grew up? Maybe  you really liked all of that Flock wallpaper when you lived there. Or those metal kitchen cabinets that you painted 3 times different colors over the last 20 years. And 1 and half baths were just fine for your family of 5 and you never had any problems with the 20 year stove, refrigerator or the dark walnut paneling in the family room or finished basement. You get the drift. If you are honest with your self, if you are a seller, here are some examples  of  things you can do to get your house ready. Click here.

    I guess what I am saying that if you want to sell or buy a home and you think you can do it by yourself using only digital and social media marketing;  then maybe you might want to rethink  your purchasing and selling strategy. Go with an agent and touch the house, feel it, see it and ask a million questions. If your selling home sweet home, look that agent straight in the eye and make him  give you  no baloney answers on what you need to do to get it sold. You might have to spend a few dollars, but it might save you some eye strain staring at those digital devices.  And you might make a connection with someone who will become a trusted adviser.

  • Here’s a little secret in negotiating with either a buyer or seller.

    Teenagers - Whispering a Secret

     

    Real Estate Agents are always put in a position of representing somebody. Most of us tend to think of an agent as either representing the seller or the buyer. Pennsylvania law requires that once an agent meets a consumer for the first time and there is a “significant discussion of real estate” that we are required to give them a written disclosure regarding the different kinds of representation that we can provide. The client has to acknowledge that disclosure in writing. It doesn’t bind the client to the agent. It’s just that it proves that the agent has done his or her due diligence in complying with the law. There is no contract at this time.

    There is also the tricky position an agent is put in if a consumer calls the real estate office for the first time and begins to engage in a “significant discussion regarding real estate”. There is particular language that an agent must use and disclose to the consumer again regarding representation. To say the least it can get to be a little unusual and uncomfortable for both parties especially if the customer is just calling to find out where the property is or whether it has 3 or 4 bedrooms. We are not lawyers but sometimes you wonder how close we come. It really gets complicated if you have to explain the differences between buyer, seller, transaction brokerage(No representation) or Dual or Designated Agency. Dual Agency is when the client purchases the listing agent’s property and Designated Agency is when the client wants to purchase another home through the agent’s office listed by a fellow agent in that office. Oh yeh, that puts the broker of the company in a dual agency position.

    Did you get all that? I can assure that even some experienced agents don’t get it. Where does the rapport development come in? Where does the  need determination start by the agent? I have to ask you some questions. I don’t want to interrogate you like we are  in some court. There is this “dance” that occurs between the agent and the potential client. I want to comply with the law  but I don’t want to offend the customer.

    Let me get back to that “little secret” that will help you in negotiating with either the buyer or seller in a transaction. When you decide you want to either buy or sell a home and you are checking out agents to assist you. Ask them right up front “Are they going to represent you” In other words are they going to work for you on your behalf. Are the going to keep everything you tell them confidential, are they going to use their negotiating skills to get you the best deal possible. Do this up front and before you give them any information ask them to put that obligation in writing. In the case of the home for sale , a listing contract that will spell out their obligation to work on your behalf to get the highest and best price for your home. In the case of the buyer, a  buyer agency contract that obligates the agent to find you the best home for the best price. In either case, you the consumer make the final decision.  But the point is, if you do this up front in writing then you have something that you can enforce if you feel that the agent isn’t representing you in your best interests.

    The written contract is usually not a problem with a listing,that is, an owner who wants to sell his or her home. No one is going to do anything regarding the marketing of that home until there is contract. Representing a buyer is a usually a different story. A lot of buyers do not want to feel obligated to one agent. Fine shop around, but one more little secret,do not disclose any personal information as far as your financial, bottom line pricing or other personal information, until you have a contract with that agent. As far as a fee you can negotiate that in with the Buyer’s Agency Contract , so that the fee can actually come from the seller at the time of settlement.

    I guess as a final note and it isn’t any secret , before you pick someone, make the contacts, make sure they provide you with Consumer Notice , understand representation, make the agent commit in writing and then discuss confidential information.

    Need some help on this topic and just want to chat about it? Contact me at samruta@yahoo.com or call me at 610-7372310.

  • 5 things you can do to make sure you don’t miss the home buying opportunity of a life time.

     

    Well we have six months under our belts for 2012. What happened and what is going to happen? Prognostication has always been fun, but after 30 plus years in the Real Estate Sales business, I think I can at least spot some trends that are critical.  Recognizing those trends might give you a leg up on the competition for the purchase of your home.

    1. Sales are up. It’s good news and bad news. More sales mean more sellers are getting rid of those houses they can’t handle any more. Bad news, the inventory is shrinking. That includes foreclosures and God help us, short sales. I have heard several cases of multiple offers on a single property and buyers being very disappointed.
    So the first thing you should do is to  get a good real estate agent to work with. Tell he or she that you definitely want to buy and you are motivated to move quickly. Tell them that it is incumbent upon them to keep you informed as far as what is available and be ready to see it fast.  Let them know that you will work exclusively with them if they preform.  If you are going to shop with other agents, most of them will put you on the back burner and you will not find the deals.

    2. Get pre approved for a mortgage ahead of time so that you can move fast when you find the home you want. Your offer will be much stronger if you can indicate that your mortgage approval is conditioned only upon an appraisal for a home.
    Mortgage companies and banks in some cases are no longer willing to give you this service because of cost and risk. Have your real estate agent help with his or her contacts. Or start with your own bank and put the squeeze on them.

    3.  Look at bank owned properties (foreclosures) , than conventional, then short sales.  Start with bank owned.  No need to go through a lot of  paperwork from the seller to the bank to you. By this time, they own it and they want to get rid of it.  Your chances of getting a good price here are strong since there is no emotion attached or mortgage to pay off.
    Then try conventional. If the owners are not underwater and there is equity and they have to move, the motivation will be strong to keep the  selling price at similar levels of foreclosures.
    Last, Go ahead and try short sales, but you have to be patient. Make sure your agent is familiar with the process as well as the listing agent. And by the way, do not agree to use a short sale negotiating company that wants to charge you a fee as the buyer.  This could literally add thousands of dollars to your closing costs. This should be the responsibility of the seller.
    If you are a seller and need to sell because you are underwater, my advice is to contact an attorney who is familiar with negotiating with creditors. In most cases that means finding a good Bankruptcy attorney. You do not have to file bankruptcy to use these attorneys. But they are used to doing deals with creditors and they know the paperwork. You will pay a fee but it might be worth it to  renegotiate a first or second mortgage to get the house sold if you have a buyer.

    4. Do it soon. Interest rates are not going to stay this low forever. Let me give you an example. A  $200,000  mortgage at 3.5 %  for 30 years will mean monthly payments of $898.  That same mortgage at 5% will cost $1073 a month. And these amounts do not include taxes or insurance.

    5. Regardless of the offer, don’t forget to ask the sellers to help you with closing costs. Sellers are motivated to sell. But,…. And this is a big But. Don’t insult the seller with a low ball offer and ask for closing cost help.  You will probably put yourself in a lousy negotiating position and also insult the seller. Be reasonable. In any negotiation, both parties have to feel like they won something.

    Now get out there and go buy or  sell  a house.

    If you want me to help, then call me at 610-737-2310 or email me at  samruta@yahoo.com

     

  • HUD HOMES, Can I buy?

    Here is a great primer for starting that search for the dream home. Info comes right off the HUD site. Need help? Give me a call at 617-737-2310 or email me at samruta@yahoo.com

     

     

    GETTING STARTED

     

    1. HOW DO I KNOW IF I’M READY TO BUY A HOME?

    You can find out by asking yourself some questions:

     

    - Do I have a steady source of income (usually a job)? Have I been employed on a regular basis for the last 2-3 years? Is my current income reliable?
    - Do I have a good record of paying my bills?
    - Do I have few outstanding long-term debts, like car payments?
    - Do I have money saved for a down payment?
    - Do I have the ability to pay a mortgage every month, plus additional costs?

     

    If you can answer “yes” to these questions, you are probably ready to buy your own home.

     

    2. HOW DO I BEGIN THE PROCESS OF BUYING A HOME?

     

    Start by thinking about your situation. Are you ready to buy a home? How much can you afford in a monthly mortgage payment (see Question 4 for help)? How much space do you need? What areas of town do you like? After you answer these questions, make a “To Do” list and start doing casual research. Talk to friends and family, drive through neighborhoods, and look in the “Homes” section of the newspaper.

     

    3. HOW DOES PURCHASING A HOME COMPARE WITH RENTING?

     

    The two don’t really compare at all. The one advantage of renting is being generally free of most maintenance responsibilities. But by renting, you lose the chance to build equity, take advantage of tax benefits, and protect yourself against rent increases. Also, you may not be free to decorate without permission and may be at the mercy of the landlord for housing.

     

    Owning a home has many benefits. When you make a mortgage payment, you are building equity. And that’s an investment. Owning a home also qualifies you for tax breaks that assist you in dealing with your new financial responsibilities- like insurance, real estate taxes, and upkeep- which can be substantial. But given the freedom, stability, and security of owning your own home, they are worth it.

     

    4. HOW DOES THE LENDER DECIDE THE MAXIMUM LOAN AMOUNT THAT CAN AFFORD?

     

    The lender considers your debt-to-income ratio, which is a comparison of your gross (pre-tax) income to housing and non-housing expenses. Non-housing expenses include such long-term debts as car or student loan payments, alimony, or child support. According to the FHA, monthly mortgage payments should be no more than 29% of gross income, while the mortgage payment, combined with non-housing expenses, 4 should total no more than 41% of income. The lender also considers cash available for down payment and closing costs, credit history, etc. when determining your maximum loan amount.

     

    5. HOW DO I SELECT THE RIGHT REAL ESTATE AGENT?

     

    Start by asking family and friends if they can recommend an agent. Compile a list of several agents and talk to each before choosing one. Look for an agent who listens well and understands your needs, and whose judgment you trust. The ideal agent knows the local area well and has resources and contacts to help you in your search. Overall, you want to choose an agent that makes you feel comfortable and can provide all the knowledge and services you need.

     

    6. HOW CAN I DETERMINE MY HOUSING NEEDS BEFORE I BEGIN THE SEARCH?

     

    Your home should fit way you live, with spaces and features that appeal to the whole family. Before you begin looking at homes, make a list of your priorities – things like location and size. Should the house be close to certain schools? your job? to public transportation? How large should the house be? What type of lot do you prefer? What kinds of amenities are you looking for? Establish a set of minimum requirements and a ‘wish list.” Minimum requirements are things that a house must have for you to consider it, while a “wish list” covers things that you’d like to have but aren’t essential.

     

    FINDING YOUR HOME

     

    7. WHAT SHOULD I LOOK FOR WHEN DECIDING ON A COMMUNITY?

     

    Select a community that will allow you to best live your daily life. Many people choose communities based on schools. Do you want access to shopping and public transportation? Is access to local facilities like libraries and museums important to you? Or do you prefer the peace and quiet of a rural community? When you find places that you like, talk to people that live there. They know the most about the area and will be your future neighbors. More than anything, you want a neighborhood where you feel comfortable in.

     

    8. WHAT SHOULD I DO IF I’M FEELING EXCLUDED FROM CERTAIN NEIGHBORHOODS?

     

    Immediately contact the U.S. Department of Housing and Urban Development (HUD) if you ever feel excluded from a neighborhood or particular house. Also, contact HUD if you believe you are being discriminated against on the basis of race, color, religion, sex, nationality, familial status, or disability. HUD’s Office of Fair Housing has a hotline for reporting incidents of discrimination: 1-800-669-9777 (and 1-800-927-9275 for the hearing impaired).

     

    9. HOW CAN I FIND OUT ABOUT LOCAL SCHOOLS?

     

    You can get information about school systems by contacting the city or county school board or the local schools. Your real estate agent may also be knowledgeable about schools in the area.

     

    10. HOW CAN I FIND OUT ABOUT COMMUNITY RESOURCES?

     

    Contact the local chamber of commerce for promotional literature or talk to your real estate agent about welcome kits, maps, and other information. You may also want to visit the local library. It can be an excellent source for information on local events and resources, and the librarians will probably be able to answer many of the questions you have.

     

    11. HOW CAN I FIND OUT HOW MUCH HOMES ARE SELLING FOR IN CERTAIN COMMUNITIES AND NEIGHBORHOODS?

     

    Your real estate agent can give you a ballpark figure by showing you comparable listings. If you are working with a real estate professional, they may have access to comparable sales maintained on a database.

     

    12. HOW CAN I FIND INFORMATION ON THE PROPERTY TAX LIABILITY?

     

    The total amount of the previous year’s property taxes is usually included in the listing information. If it’s not, ask the seller for a tax receipt or contact the local assessor’s off ice. Tax rates can change from year to year, so these figures may be approximate.

     

    13. WHAT OTHER TAX ISSUES SHOULD I TAKE INTO CONSIDERATION?

     

    Keep in mind that your mortgage interest and real estate taxes will be deductible. A qualified real estate professional can give you more details on other tax benefits and liabilities,

     

    14. IS AN OLDER HOME A BETTER VALUE THAN A NEW ONE?

     

    There isn’t a definitive answer to this question. You should look at each home for its individual characteristics. Generally, older homes may be in more established neighborhoods, offer more ambiance, and have lower property tax rates. People who buy older homes, however, shouldn’t mind maintaining their home and making some repairs. Newer homes tend to use more modern architecture and systems, are usually easier to maintain, and may be more energy-efficient. People who buy new homes often don’t want to worry initially about upkeep and repairs.

     

    15. WHAT SHOULD I LOOK FOR WHEN WALKING THROUGH A HOME?

     

    In addition to comparing the home to your minimum requirement and wish lists, use the HUD Home Scorecard and consider the following:

     

    - Is there enough room for both the present and the future?
    - Are there enough bedrooms and bathrooms?
    - Is the house structurally sound?
    - Do the mechanical systems and appliances work?
    - Is the yard big enough?
    - Do you like the floor plan?
    - Will your furniture fit in the space? Is there enough storage space? (Bring a tape measure to better answer these questions.)
    - Does anything need to repaired or replaced? Will the seller repair or replace the items?
    - Imagine the house in good weather and bad, and in each season. Will you be happy with it year-round?

     

    Take your time and think carefully about each house you see. Ask your real estate agent to point out the pros and cons of each home from a professional standpoint.

     

    16. WHAT QUESTIONS SHOULD I ASK WHEN LOOKING AT HOMES?

     

    Many of your questions should focus on potential problems and maintenance issues. Does anything need to be replaced? What things require ongoing maintenance (e.g., paint, roof, HVAC, appliances, carpet)? Also ask about the house and neighborhood, focusing on quality of life issues. Be sure the seller’s or real estate agent’s answers are clear and complete. Ask questions until you understand all of the information they’ve given. Making a list of questions ahead of time will help you organize your thoughts and arrange all of the information you receive. The HUD Home Scorecard can help you develop your question list.

     

    17. HOW CAN I KEEP TRACK OF ALL THE HOMES I SEE?

     

    If possible, take photographs of each house: the outside, the major rooms, the yard, and extra features that you like or ones you see as potential problems. And don’t hesitate to return for a second look. Use the HUD Home Scorecard to organize your photos and notes for each house.

     

    18. HOW MANY HOMES SHOULD I CONSIDER BEFORE CHOOSING ONE?

     

    There isn’t a set number of houses you should see before you decide. Visit as many as it takes to find the one you want. On average, homebuyers see 15 houses before choosing one. Just be sure to communicate often with your real estate agent about everything you’re looking for. It will help avoid wasting your time.

     

    YOU’VE FOUND IT

     

    19. WHAT DOES A HOME INSPECTOR DO, AND HOW DOES AN INSPECTION FIGURE IN THE PURCHASE OF A HOME?

     

    An inspector checks the safety of your potential new home. Home Inspectors focus especially on the structure, construction, and mechanical systems of the house and will make you aware of only repairs,that are needed.

     

    The Inspector does not evaluate whether or not you’re getting good value for your money. Generally, an inspector checks (and gives prices for repairs on): the electrical system, plumbing and waste disposal, the water heater, insulation and Ventilation, the HVAC system, water source and quality, the potential presence of pests, the foundation, doors, windows, ceilings, walls, floors, and roof. Be sure to hire a home inspector that is qualified and experienced.

     

    It’s a good idea to have an inspection before you sign a written offer since, once the deal is closed, you’ve bought the house as is.” Or, you may want to include an inspection clause in the offer when negotiating for a home. An inspection t clause gives you an ‘out” on buying the house if serious problems are found,or gives you the ability to renegotiate the purchase price if repairs are needed. An inspection clause can also specify that the seller must fix the problem(s) before you purchase the house.

     

    20. DO I NEED TO BE THERE FOR THE INSPECTION?

     

    It’s not required, but it’s a good idea. Following the inspection, the home inspector will be able to answer questions about the report and any problem areas. This is also an opportunity to hear an objective opinion on the home you’d I like to purchase and it is a good time to ask general, maintenance questions.

     

    21. ARE OTHER TYPES OF INSPECTIONS REQUIRED?

     

    If your home inspector discovers a serious problem a more specific Inspection may be recommended. It’s a good idea to consider having your home inspected for the presence of a variety of health-related risks like radon gas asbestos, or possible problems with the water or waste disposal system.

     

    22. HOW CAN I PROTECT MY FAMILY FROM LEAD IN THE HOME?

     

    If the house you’re considering was built before 1978 and you have children under the age of seven, you will want to have an inspection for lead-based point. It’s important to know that lead flakes from paint can be present in both the home and in the soil surrounding the house. The problem can be fixed temporarily by repairing damaged paint surfaces or planting grass over effected soil. Hiring a lead abatement contractor to remove paint chips and seal damaged areas will fix the problem permanently.

     

    23. ARE POWER LINES A HEALTH HAZARD?

     

    There are no definitive research findings that indicate exposure to power lines results in greater instances of disease or illness.

     

    24. DO I NEED A LAWYER TO BUY A HOME?

     

    Laws vary by state. Some states require a lawyer to assist in several aspects of the home buying process while other states do not, as long as a qualified real estate professional is involved. Even if your state doesn’t require one, you may want to hire a lawyer to help with the complex paperwork and legal contracts. A lawyer can review contracts, make you aware of special considerations, and assist you with the closing process. Your real estate agent may be able to recommend a lawyer. If not, shop around. Find out what services are provided for what fee, and whether the attorney is experienced at representing homebuyers.

     

    25. DO I REALLY NEED HOMEOWNER’S INSURANCE?

     

    Yes. A paid homeowner’s insurance policy (or a paid receipt for one) is required at closing, so arrangements will have to be made prior to that day. Plus, involving the insurance agent early in the home buying process can save you money. Insurance agents are a great resource for information on home safety and they can give tips on how to keep insurance premiums low.

     

    26. WHAT STEPS COULD I TAKE TO LOWER MY HOMEOWNER’S INSURANCE COSTS?

     

    Be sure to shop around among several insurance companies. Also, consider the cost of insurance when you look at homes. Newer homes and homes constructed with materials like brick tend to have lower premiums. Think about avoiding areas prone to natural disasters, like flooding. Choose a home with a fire hydrant or a fire department nearby.

     

    27. IS THE HOME LOCATED IN A FLOOD PLAIN?

     

    Your real estate agent or lender can help you answer this question. If you live in a flood plain, the lender will require that you have flood insurance before lending any money to you. But if you live near a flood plain, you may choose whether or not to get flood insurance coverage for your home. Work with an insurance agent to construct a policy that fits your needs.

     

    28. WHAT OTHER ISSUES SHOULD I CONSIDER BEFORE I BUY MY HOME?

     

    Always check to see if the house is in a low-lying area, in a high-risk area for natural disasters (like earthquakes, hurricanes, tornadoes, etc.), or in a hazardous materials area. Be sure the house meets building codes. Also consider local zoning laws, which could affect remodeling or making an addition in the future. Your real estate agent should be able to help you with these questions.

     

    29. HOW DO I MAKE AN OFFER?

     

    Your real estate agent will assist you in making an offer, which will include the following information:

     

    - Complete legal description of the property
    - Amount of earnest money
    - Down payment and financing details
    - Proposed move-in date
    - Price you are offering
    - Proposed closing date
    - Length of time the offer is valid
    - Details of the deal

     

    Remember that a sale commitment depends on negotiating a satisfactory contract with the seller, not just Making an offer.

     

    Other ways to lower ins-insurance costs include insuring your home and car(s) with the same company, increasing home security, and seeking group coverage through alumni or business associations. Insurance costs are always lowered by raising your deductibles, but this exposes you to a higher out-of-pocket cost if you have to file a claim.

     

    30. HOW DO I DETERMINE THE INITIAL OFFER?

     

    Unless you have a buyer’s agent, remember that the agent works for the seller. Make a point of asking him or her to keep your discussions and information confidential. Listen to your real estate agent’s advice, but follow your own instincts on deciding a fair price. Calculating your offer should involve several factors: what homes sell for in the area, the home’s condition, how long it’s been on the market, financing terms, and the seller’s situation. By the time you’re ready to make an offer, you should have a good idea of what the home is worth and what you can afford. And, be prepared for give-and-take negotiation, which is very common when buying a home. The buyer and seller may often go back and forth until they can agree on a price.

     

    31. WHAT IS EARNEST MONEY? HOW MUCH SHOULD I SET ASIDE?

     

    Earnest money is money put down to demonstrate your seriousness about buying a home. It must be substantial enough to demonstrate good faith and is usually between 1-5% of the purchase price (though the amount can vary with local customs and conditions). If your offer is accepted, the earnest money becomes part of your down payment or closing costs. If the offer is rejected, your money is returned to you. If you back out of a deal, you may forfeit the entire amount.

     

    32. WHAT ARE “HOME WARRANTIES”, AND SHOULD I CONSIDER THEM?

     

    Home warranties offer you protection for a specific period of time (e.g., one year) against potentially costly problems, like unexpected repairs on appliances or home systems, which are not covered by homeowner’s insurance. Warranties are becoming more popular because they offer protection during the time immediately following the purchase of a home, a time when many people find themselves cash-strapped.

     

    GENERAL FINANCING QUESTIONS:THE BASICS

     

    33. WHAT IS A MORTGAGE?

     

    Generally speaking, a mortgage is a loan obtained to purchase real estate. The “mortgage” itself is a lien (a legal claim) on the home or property that secures the promise to pay the debt. All mortgages have two features in common: principal and interest.

     

    34. WHAT IS A LOAN TO VALUE (LTV) HOW DOES IT DETERMINE THE SIZE OF MY LOAN?

     

    The loan to value ratio is the amount of money you borrow compared with the price or appraised value of the home you are purchasing. Each loan has a specific LTV limit. For example: With a 95% LTV loan on a home priced at $50,000, you could borrow up to $47,500 (95% of $50,000), and would have to pay,$2,500 as a down payment.

     

    The LTV ratio reflects the amount of equity borrowers have in their homes. The higher the LTV the less cash homebuyers are required to pay out of their own funds. So, to protect lenders against potential loss in case of default, higher LTV loans (80% or more) usually require mortgage insurance policy.

     

    35. WHAT TYPES OF LOANS ARE AVAILABLE AND WHAT ARE THE ADVANTAGES OF EACH?

     

    Fixed Rate Mortgages: Payments remain the same for the the life of the loan

     

    Types


  • Lets talk VA for a moment.

    VA Loans Are Opening Homeownership Doors for More Vets
                 By Salvatore Ruta,  Choice Properties

     

     

    Past and current military personnel looking for financing in today’s more stringent mortgage environment can take advantage of the VA loan program, which has been available for more than six decades to help members of the military own their own homes. Lets not forget the vet in searching for Lehigh Valley Homes for sale.

    The program, established in 1944 as part of the Servicemen’s Readjustment Act, is available for any individual who has served in active duty in any branch of the U.S. military for a minimum of 90 days.

    “The beauty of this loan is that it allows financing without requiring a down payment,” said Eric Kandell, founder of lowvarates.com. “It also doesn’t allow the mortgage lender to charge the veteran private mortgage insurance.”

    A VA loan does require the borrower to pay a one-time funding fee on their purchase, which can be paid up front or financed into the total cost of the loan. The funding fee for regular military members is 2.15% of the loan. Reservists pay a fee of 2.40%.

    Non-active duty personnel, such as individuals in the Army Reserves or National Guard, may apply for a VA-backed mortgage provided they have completed six years of service. Spouses of deceased or missing military members are also eligible if they have not remarried. Those who were dishonorably discharged from any military branch are not eligible.

    “I’ve closed more VA loans in the past two years than in the past decade,” said Steve Thorne, area manager for First Financial Services, Inc. in Raleigh, N.C. “It really is a great benefit to the veteran in the ‘New Mortgage World.’ The key to getting more veterans to take advantage of this benefit is simply an awareness of the benefit.”

    Statistics provided by the Department of Veteran’s Affairs show that roughly 25 million people are eligible  for a VA loan yet only 10-15 percent of those have taken advantage of it when buying or refinancing.

    One reason is that for many years leading up to the mortgage crisis, there were many conventional mortgage products that were easier or more economical to the veteran than the VA loan.

    “In the wild, wild west of mortgage lending from the early 2000s to 2008, 100% financing was common,” Thorne said. “So why pay the VA funding fee just to have 100 percent financing? Not to mention the VA control of the appraisal process, understanding residual income and all the additional disclosures. It was just a more cumbersome process then the ‘come on down, everybody gets a loan’ of the conventional arena.”

    Many veterans, especially those not so recently discharged, aren’t sure of VA loan benefits or that the program even exists. With the VA loan the veteran can buy a home with little to no money out of pocket.

    “In the past, veterans were told about other financing on the market and people were more inclined out of ignorance to use non-VA loan financing,” Kandell said. “[The VA loan] is a great loan and you are going to see a massive shift in numbers going forward.”

    Talk to a mortgage representative for more on VA financing.

  • Buying a home HUD FHA

     

    There are numerous resources out there to guide one through the buying process for an FHA HUD home. Wether you are comtemplating a resale home, or a foreclosure. The following video which is closed caption provides some good basic information in starting your search.  Then we will followup with an FHA Loan Checklist.

    Buying an FHA HUD Home (Closed Caption)

     

    FHA Loan Checklist

     

    Here is a list of documents you will need to apply for an FHA loan:

    • Address of place of residence (past two years)
    • Social Security numbers
    • Names and location of employers (past two years)
    • Gross monthly salary at current job(s)
    • Pertinent information for all checking and savings accounts
    • Pertinent information for all open loans
    • Complete information for other real estate owned
    • Approximate value of all personal property
    • Certificate of Eligibility and DD-214 (for veterans only)
    • Current check stubs and W-2 forms (past two years)
    • Personal tax returns (past two years), current income statement and business balance sheet for self-employed individuals

     

     

  • Where Can I Get Updates About New HUD Homes?

     

    Where Can I Get Updates About New HUD Homes?

     

    The BEST place to get information about HUD Homes is HUDHomeStore.com , HUD’s superstore site.

     

    HUDHomeStore.com is a one-stop platform containing everything you need to know about the HUD REO sales program:

     

    • HUD property information;

     

    • Property disclosures and addenda;

     

    • Real estate and consumer registration features;

     

    • Interactive maps on home page, special programs pages, and property detail pages;

     

    • Resources and contact information for real estate agents and brokers, consumers, state and local governments, and nonprofit organizations.

     

    The new website features all HUD Homes in the country.  Real estate agents and consumers have the same view of properties, and access to a myriad of resources and contact information.

    Here is a video on how to register for HUD Homes.

    Any questions? samruta@yahoo.com
    Phone; 610-737-2310