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Showing posts from November, 2018

Gift of Equity

There is a little-known mortgage program that could provide the vehicle for the right person to get into a home.If a person sells their home to another for less than the fair market value, the difference in the appraised value and the sales price is considered a gift of equity for the buyer.FHA requires that borrowers receive gifts of equity only from family members transferring title to the borrower.An appraisal is required to determine the value of the home.The sales price is subtracted from the appraised value to determine the equity to be gifted.If a home appraises for $300,000 when the owner will sell it for $250,000, the gift is $50,000.The gift is applied to the down payment.In this example, the borrower would have to qualify for a $250,000 mortgage which would require private mortgage insurance because a 20% down payment on a $300,000 home would be $60,000.If the buyer had an additional $10,000 in cash to put down, the PMI would not be required, and the monthly payments would …

Do You Know the Way?

It may be natural for first-time buyers to be unsure of the process of buying a home because they haven't been through it before but even repeat buyers need to know changes that have taken place since the financial housing crisis.The steps in the home buying process are predictable and generally follow the same pattern.It certainly makes the move stay on schedule when you know all the different things that must be done to get to the closing.In the initial interview with your real estate professional, you share the things you want and need in a home, discuss available financing and learn how your agent can represent you in the transaction.The pre-approval step is essential for anyone using a mortgage to purchase a home to assure that they're looking at the right price of homes and so they'll know what they can qualify for and what the interest will be.Even with lower than normal inventory, it is difficult to stay up-to-date with the homes currently for sale and the new one …

Roll the Repairs into the Mortgage

It's been said that if you can find a home that has most of what you want, you should go ahead and purchase it.Many first-time buyers are using everything they have for a down payment and closing costs and would have to "live" with the less than perfect home until they can save the money to make the changes.The FHA 203(k) mortgage allows a borrower to purchase a home and provides additional funds for improvements to be made.These types of renovations can include kitchen and bathroom remodels, flooring, plumbing, heating and air conditioning systems, additions and other things.The benefit to the buyer is that they have the opportunity to consider a home that needs repairs and might have been unacceptable without a program like this.Being a FHA loan, a minimal down payment is required, fair interest rates and generous qualifying requirements.The 203(k) Streamline can be used for cosmetic improvements, appliances and minor remodeling up to $35,000 in cost.As you can imagine…

Getting the "Right" Home

Finding the right home is still the biggest challenge buyers are faced with in today's market as is shown in the latest Confidence Index Survey.Assuming the buyers find the "right" home with determination, perseverance and the help of a real estate professional, 88% of all transactions last year required financing to get the buyer's address on the home.93% of first-time buyers needed financing.Pre-approval is an essential step that needs to be handled before buyers begin searching for a home.The benefits to the buyer fall into the category of confidence.PRE-APPROVAL GIVES YOU CONFIDENCEKnowing the amount you can borrow
the mortgage amount decreases as interest rates riseLooking at the right priced homes
price, size, amenities, locationComparing and identifying the best loan
rate, term, typeUncover issues early that could affect the most favorable loan terms
time to cure possible problemsBargaining power to negotiate with the seller and possibly, competing buyers
price, te…