Posts Tagged ‘VA’

• 3 programs to help you buy a house if you can’t get a mortgage.

  
  I think that there are still challenges in today’s real estate market in either buying or selling a house. Suffice it to say that there are  a lot of folks who owe more than what their home is worth (“underwater”).  There are enough people who have credit problems because of the recession that started in 2007.  Lots of recent  college graduates are strapped with student debt and no jobs and living at home. The economic “recovery” has begun but it is taking forever. And certainly the banks and mortgage companies have not eased up that much on underwriting criteria for buyers. An average credit score to get a conventional mortgage is still almost in the mid 700s. FHA  and VA  are still options but I think we  need to do a better job in spreading the word on those programs and how they work. Plus there are concerns regarding FHA continuous funding. FHA mortgage insurance premium is the highest of any program and never goes away until you finally sell.

  I would speculate that with the uncertainty of the economy, that customers are just reluctant to take the risk in owning.

  I’ll offer a few alternatives that you might consider in getting  into the housing market. I mean you have to live somewhere. Might as well be a place of your own. Here are three for your consideration.

  1. Rent with an option to buy. Probably the most well-known and popular. However it can be the most misunderstood program. An “option” is exactly that. You enter into a  lease to rent a home and you agree with the owner that at some point in time you will, or will not, exercise the option to buy the house at an agreed upon price. You may or may not have put up any money toward that option at the lease signing. You and the landlord may have decided that a portion of the rent goes toward the purchase price or the option. Just remember if you don’t exercise the option, you just remain a tenant and have no ownership rights. Whether you get any money back is determined  by the terms of the option agreement.

  2. Lease purchase , land contract or installment contract.  Buyer and Seller enter into an agreement of sale for the purchase of property. The sellers maintain the title to the property during the term of the contract and the buyers have an equitable interest.  A note of caution here to both parties. If the seller has an existing mortgage on the property there may be and probably is a “Due on Sale ” clause in the mortgage documents. This will indicate that if any transfer of equity occurs then the entire loan will become due in full immediately. Depending on the size  of the existing loan, this could cause some major problems for both buyer and seller. Any real estate agent worth their salt will check all recorded documents before proceeding with a proposal. A good real estate attorney needs to be involved for each party. If there is no mortgage , then the owner can act as the bank and transfer title to the buyer . Depending on any down money and credit obligations the equity build up is subject to negotiations at the time of the offer. Again I would recommend a good real estate attorney get involved with any preparation for both buyer and seller.
  One nice benefit of this type of transaction is that the buyers can get the tax benefits of home ownership.

  3. New program. Just heard about this one. A company buys the home for you and the client enters into an agreement of sale to purchase the property within a certain period of time, i.e 5 years. You put up a down payment of 5 or 10% and pay a 3% admin fee to the company at the time of occupancy. You get the house and its yours to live in as a renter at an agreed upon monthly rent and purchase price. The big difference between this and the rent with option is if you do not get a mortgage by the end of the term you get your down payment back. They keep the 3%. You also agree to a 2-3 % annual rent increase during the term. Again this program is for people who have not been able to qualify for a normal mortgage because of unusual catastrophic circumstances.  Lost a job, unusually high medical bills, and then lost a home through foreclosure or just had some hard times and are trying to work yourself back.  That’s why you agree to a 5+ term. And of course if you can a mortgage sooner, there is no prepayment penalty. There are some additional features. Give me a call and we can discuss some additional details.

  A  few “options” to think about. Just leave me a comment. Contact me via Facebook, Linkedin or Twitter or the old fashion ways of email, salvatoreruta13@gmail.com or cell phone 6107372310

   

• And the question is?

  
  Haven’t played Jeopardy in a while or watched it on TV. But I always thought that the premise was a good one. Give someone the answer and see if they can come up with the right question.  It occurred to me that I am usually walking around with what I think are  all the right answers to all kinds of questions. I guess  I might now recognize that I am somewhat pretentious in my conclusion.  I guess I need your help. How about I give you some answers and you give me what you think are the right questions. Hopefully, I can learn something with you and become a better agent.

  You know, years ago when I first got into the Real Estate business, I had a Broker who told me “Sam, you don’t sell real estate, you solve people’s problems”. That’s stuck with me and I think I have done a pretty good job in asking the right questions to solve those problems. But I think its time to get the customer’s take on this and get you to ask some questions. Anyway, lets see where we go with this and work together. I’ll give you the answer. You let me know what the questions should be. I’ll look at your questions and post them later to get some other folks to chime in if they think you are right wron.  Let me give you an example. 3.5% down payment  is the answer. The question might be,” What is an FHA mortgage ? ” Okay, lets give it a try.

  1.  Seller Assist is the answer. What is the question? This is the format which I won’t repeat every time. You’ll get the drift.
  2. No down payment required
  3. 28%/36%
  4. Buyer’s Agent
  5. Seller’s Agent
  6. Multiple Listing Service
  7. Escrow
  8. Radon Gas
  9. Short Sale
  10. Transunion, Experian, Equifax
  11. Title Insurance
  12.Prepaid Items
  13. 2 years worth of tax returns
  14. A real estate agent
  15. Purchase offer

  Okay, that’s enough for now. Give it a shot. Either comment below with your questions or email me if you like. The more I think about it there can be several different questions for the answers. In addition here is  a podcast that will explain how one might go about purchasing a multi family home where you can  live in and collect rent to help pay for your mortgage. If you would like to pursue that let me know. It can be challenging , but it can  be the start of a pretty good investment portfolio.

  Contact me at 610-737-2310 or email me at salvatoreruta13@gmail.com. Appreciate it.

• Spring Market brings confidence, I think.

  

   

  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.

  

   

  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.

  

   

  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

  

   

  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

  

   

  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.

• 5 different ways to engage using Social Media and stay connected.

  I am getting more geekitized the older I get. I really have become fascinated with all aspects of Social Media and the profound ramifications that it has on the practice of my business, which is selling houses and helping buyers find their dream homes. I don’t feel like I am a johnny come lately to this era but it has been a learning experience. Here are some ways that I promise I’ll stay connected with you and get results.

  1. Facebook. This blog is linked to my Facebook page and will also provide us with an opportunity for a 2 way communication. I’ll try to keep the blog real estate related but I have to say I can slip out of that on occasion . I love the Military and the men and women who serve and have served. You will pick up my bias.

  2. Linked In. Purported to be more of a business venue, I am glad to participate, and though the professions are diverse , they all need advice on real estate. Be glad to give you mine.

  3. Twitter. 140 characters to get your point across makes a lot of sense in initiating a conversation. I have to get better at this to get my point across quickly. It will be a tease but then I hope you will contact me for an in depth analysis.

  4. Pinterest. I am new to this site but I like the chance to “Pin” and also to provide pictures and video to get a real sense of visual reality of one’s opinion.

  5. Google Plus. The big bad boy of internet everything. How can you not be aware of Google and ignore its power.
  The fact of the matter it really has a way to go to match Facebook as far as popularity, but can’t be ignored.

  There are a plethora of other contact venues but I’ll start with the above to get you to discuss what’s on your mind. I’m pretty easy. And of course I am open and eager to interact with you on any platform that you might think beneficial. In fact, please give me your recommendations. Look forward to hearing from you.

  Sam

• Make your Offer Standout

  

   

  Make Your Offer Stand Out

   

   

  By Salvatore(Sam)Ruta

  Choice Properties

  Searching for Lehigh Valley Homes for sale.

  Real estate consumers are realizing that there has rarely been a better time to buy a home. In fact, historically low mortgage rates coupled with lower home prices have even sparked bidding competition in markets around the country.

  A good home in a solid location may attract ample attention only hours after being listed. Home buyers can make their offers stand out from the rest through one or more of the following strategies:

  Price. Obviously, price tends to be the primary consideration for sellers. When you’re competing for a home, to get an edge, think about adding a clause stating that you will beat the highest offer by “x” dollars up to “x” amount. Cash offers can be more attractive to sellers as well. Although sellers will receive their money at closing whether buyers pay with cash or take out a loan, cash offers don’t require lender approval.

  Financing. It’s not enough to be pre-qualified. Pre-qualification only tells how much you can afford. Pre-approval goes a step further. Your lender will thoroughly evaluate your application—including verifying employment information and financial disposition—then clear you for a loan of a determined amount. Having your loan pre-approved gives you a sizeable advantage by putting you on equal footing with cash buyers.

  Good Faith Deposit. Buyers offering a larger-than-customary amount of “earnest money,” a deposit that accompanies an offer, may get a seller’s attention. By committing more money up front, buyers demonstrate greater sincerity and motivation to close the transaction. Your real estate professional can guide you as to the appropriate sum for your specific transaction.

  Contingencies. Consider minimizing contingencies, those clauses that allow buyers to back out of a contract if certain conditions are not met. For example, it’s common for buyers to make the purchase contingent upon their securing satisfactory financing. Obviously, offers with the fewest conditions tend to be more attractive to sellers.

  From a contingency standpoint, first-time buyers are often better prospects for a seller’s home than move-up buyers. That’s because first-time buyers’ offers are not contingent upon the sale of a present home. Even if a move-up buyer has an offer in hand, that buyer’s offer may be contingent on another contingency, and so on down the line. If one transaction derails, they all might.

  Relationship. Help the seller get to know and identify with you by looking for ways to connect. Find common interests, such as a shared appreciation of gardening. You can then persuade the seller that her prize roses will be well tended. Share brief family stories. The more the seller gets to know and like you, the better chance your offer will stand out in a competitive environment.

  Considerations for Short-sale and Foreclosure Transactions – Bank-owned properties represent a significant portion of today’s housing inventory. Competition can be most keen for these homes as their prices can run 10% to 20% below current market value.

  Banks conduct extensive research to set these prices and generally base them on current market value less the cost of required repairs. Make your offer based on your own check of comparable sales and other due diligence. Banks won’t get offended by a low offer, yet a realistic offer will more likely keep you in the running.

  Remember, patience is essential when buying bank-owned property as the process can take up to six months and longer.

  Work with your local Choice Properties Real Estate sales professional to buy your dream home or investment property. His or her knowledge, skill and expertise will help you make sound real estate decisions today or any other time.

  Here is some good news to help give you the encouragement that you need. Listen to the following short podcast.

  Optimism grows

• 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.

• About Lead Based Paint

   

  

  Lead is a highly toxic metal that may cause a range of health problems, especially in young children. When lead is absorbed into the body, it can cause damage to the brain and other vital organs, like the kidneys, nerves and blood. Lead may also cause behavioral problems, learning disabilities, seizures and in extreme cases, death. Some symptoms of lead poisoning may include headaches, stomachaches, nausea, tiredness and irritability. Children who are lead poisoned may show no symptoms.

  Both inside and outside the home, deteriorated lead-paint mixes with household dust and soil and becomes tracked in. Children may become lead poisoned by:

  · Putting their hands or other lead-contaminated objects into their mouths,

  · Eating paint chips found in homes with peeling or flaking lead- based paint, or

  · Playing in lead-contaminated soil

  Take a moment to look at the brochure “Protect Your Family from Lead in Your Home” for additional information (available in English, Spanish, Russian, Vietnamese, Somali and Arabic).

  What can you do?

  If your home was built before 1978:

  · Wipe down flat surfaces, like window sills, with a damp paper towel and throw away the paper towel,

  · Mop smooth floors (using a damp mop) weekly to control dust, Take off shoes when entering the house

  · Vacuum carpets and upholstery to remove dust,

  · If possible, use a vacuum with a HEPA filter or a “higher efficiency” collection bag,

  · Pick up loose paint chips carefully with a paper towel and discard in the trash, then wipe the surface clean

  · Take precautions to avoid creating lead dust when remodeling, renovating or maintaining your home,

  · Test for lead hazards by a lead professional. (Have the soil tested too).

  
  For your child:

  · Have your child’s blood lead level tested at age 1 and 2. Children from 3 to 6 years of age should have their blood tested, if they have not been tested before and:

  · They live in or regularly visit a house built before 1950,

  · They live in or regularly visit a house built before 1978 with on-going or recent renovations or remodeling

  · They have a sibling or playmate who has or did have lead poisoning

  · Frequently wash your child’s hands and toys to reduce contact with dust,

  · Use cold tap water for drinking and cooking

  · Avoid using home remedies (such as arzacon, greta, pay- loo-ah, or litargirio) and cosmetics (such as kohl or alkohl) that contain lead

  · Certain candies, such as tamarindo candy jam products from

  · Mexico, may contain high levels of lead in the wrapper or stick. Be cautious when providing imported candies to children

  · Some tableware, particularly folk terra cotta plates and bowls from Latin America, may contain high levels of lead that can leach into food.

  The brochures are free. Download it here.

  http://www.epa.gov/lead/pubs/leadpdfe.pdf

  Call me at 610-737-2310 for any questions or email me at samruta@yahoo.com