May 182015
 

inspector 1You definitely want to be present at the inspection; budget anywhere from 2 to 5 hours for the inspection. Dress as if you might get dirty; bring a flashlight. You’ll go through the house side by side with your Inspector. After the inspection, your Inspector will discuss with you any major issues you need be aware of to discuss with your Attorney. You’ll get a written report shortly after the inspection day.

Typically your Home Inspection will alert you to problems in five key areas, and these key areas directly relate to the contract of sale in a New York home purchase:

1. Foundation: sound and solid
2. Roof free of leaks
3. Plumbing working and leak-free
4. Heating system sufficient and operating
5. Electrical system sufficient and up to code

image w definitions

If there is a serious problem with any of these five items, typically the Seller has a responsibility under the terms of the contract of sale to repair the problem at their expense, not the Purchaser’s expense. Sometimes a Purchaser will receive a credit at closing to repair one of these items (assuming the home and the defective issue has not compromised the Lender’s appraisal). When the Purchaser receives a credit at closing, the amount of the credit is based upon legitimate estimates for repair and negotiations between the Attorneys representing each party.

Other items you discover are in need of repair/upgrade (i.e. dishwasher not operating properly; air conditioner on second floor inoperable, etc.) can be negotiated for a repair credit or replacement at the Seller’s expense. Again, these negotiations are typically handled by the Attorneys.

It is not as common as you might think that a purchase price is reduced due to repairs from a Home Inspection. Best to consult with your Attorney for more detailed information in this area.

 

 
Do you have questions?  Click on ASK TREVOR and I’ll respond to any and all inquiries, even if you’re not buying a home in New York State.

Check out my Trulia profile HERE

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Find me on TWITTER: @tcurranmortgage

Happy House Hunting!

Key Points for VA Loans

 First Time Homebuyers, The Affordable Home, Veterans  Comments Off on Key Points for VA Loans
Sep 052013
 

veterans 1More Veterans are using their Veterans Benefits to buy homes today with VA Loans.  The problem many of them encounter is this: Mortgage Loan Originators (MLO) don’t have sufficient experience with VA Loans.  This can make for some troublesome times when a Veteran is buying a home.  You definitely want to work with an experienced MLO, someone with at least 15 years experience.   Take some time when shopping for your VA Loan to interview the MLO before you make a decision.

Some key points for you to know when you interview a Licensed Mortgage Loan Originator (MLO) for your VA Loan:

VA Funding Fee is 2.15% of the Loan Amount (and is always financed) for Active Duty Veterans with at least 180 Days active duty. No Funding Fee for Disabled Veterans.

The Funding Fee is different for other service types/periods, including Reservists.

A Veteran can finance 100% of the purchase price of the home.modern home 191

A Seller can pay all of a Veteran’s Closing Costs, and more.

There’s a lot of misinformation out there about VA Loans and your MLO will need to be available to explain and reassure the Seller and the real estate agents of the VA process. For example, many Sellers and/or real estate agents believe that VA Loans take “a LONG TIME” to approve and close. Not true. (My average closing time on VA loans is about 6-8 weeks compared to 3-4 weeks for FHA). They also believe that VA Appraisals ALWAYS slash the value of the house. Not true. I’ve only seen one VA Appraisal come in slightly less than purchase price in the last couple of years, and, in that case, both the Listing Agent and I suspected the value might be tight before. Bottom Line: your MLO has to have clear communication to make it easier for you to negotiate with Sellers when competing against other Buyers with different financing terms.

If your MLO asks you for your DD-214 right away, then you know you’re dealing with someone with experience. You don’t need the Certificate of Eligibility or COE as we MLO’s can obtain that directly from VA on your behalf.

thank you veteransFor a New York Purchase you’ll need some cash for your “Good Faith Deposit” when you sign the contract of sale. It’s the rare Seller who will sign a contract with a Buyer who doesn’t at least put $10,000 on the contract (refundable to the Veteran at closing due to the 100% financing). Not that it’s impossible (I’m working with 3 Veterans right now who have less than $5,000 to put down), but it will require serious negotiating on the part of your MLO, real estate agent, and Attorney.

VA Condos: few and far between because the VA just doesn’t approve enough Condos, so focus on Single Family Homes. Find VA Approved Condos

Two Family Homes: unless you have experience in property management (and can prove it), you’ll have to qualify with your own INCOME for the purchase; rental income will be excluded from the qualifications.

You’ll need a Termite Report but YOU CANNOT PAY FOR IT, the Seller must pay.

We qualify Veterans’ Income two ways: a percentage of monthly gross income, or “Debt to Income Ratio” AND a residual income method which is similar to doing a family budget, so it’s a pretty cool way to qualify you. idyll

 

Do you have questions?  Click on ASK TREVOR and I’ll respond to any and all inquiries, even if you’re not buying a home in New York State.

Check out my Trulia profile HERE

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Ask Trevor A Question

You Need To Build Credit: Where to Begin

 All You Need To Know About Credit, First Time Homebuyers  Comments Off on You Need To Build Credit: Where to Begin
Aug 232013
 

You need to build more good credit. I recommend opening the following accounts as a way to build credit:pile of cash

  • Sunoco http://www.gosunoco.com/ways-to-save/gas-credit-cards/
  • CareCredit: available at your Dentist. http://www.carecredit.com/apply/landing.html
  • CapitalONE secured credit card http://www.capitalone.com/creditcards/mastercard-secured-credit-card/

A secured credit card works like this: you deposit with the credit card company a pre-determined amount, say, $500. This amount is your credit limit. You swipe and use the card same as a regular credit card; the secured card activity gets reported on your credit report thus building your credit history. My advice: open the account and use no more than 50% of your “limit.” Then make MINIMUM monthly payments; don’t replenish the total amount! This type of activity gets much better results on a credit report.

  • Bank Debit/Credit Card: If your bank offers a card attached to your checking account that can be used as either credit or debit, then you should use the card as credit. Check with your bank to see if they offer this type of card AND if they report the activity to the credit bureaus when you use the card as a credit instead of debit.

Visit my Useful Links page for other great websites that provide accurate and honest advice on building credit.

 

Do you have questions?  Click on ASK TREVOR and I’ll respond to any and all inquiries, even if you’re not buying a home in New York State.

Check out my Trulia profile HERE

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Find me on TWITTER: @tcurranmortgage

Ask Trevor A Question

Definitions: Earnest Money Deposit or EMD

 Definitions, First Time Homebuyers, The Affordable Home, Veterans  Comments Off on Definitions: Earnest Money Deposit or EMD
Aug 192013
 

Earnest Money Deposit or EMD

When you sign a contract to purchase a home, you’ll provide an “earnest money deposit” to be held until closing in an escrow account by the attorney for the homeowner. If you are purchasing a HUD Home the EMD check is presented with your Offer by the HUD Approved Broker in the bidding process.

If you’re applying for an FHA loan, the EMD usually equals your 3.5% down payment. If you apply for other types of financing—-VA or Conventional—then your  Real Estate Agent or Attorney will guide you as to the amount requested by the Seller.

There is no “set” or required amount for the EMD, although many Sellers’ often request 10% of the purchase price. This is a matter of some negotiations between your Real Estate Agent/Attorney and the Seller’s Agent/Attorney.

For example, what if you’re closing out a CD for your entire down payment but you only have $10,000 cash on hand for the EMD today? It’s important to discuss with your Real Estate Agent/Attorney before you come in to sign the contract the amount of the EMD.

Do you have questions?  Click on ASK TREVOR and I’ll respond to any and all inquiries, even if you’re not buying a home in New York State.

Check out my Trulia profile HERE

Check out my Zillow profile HERE

Find me on TWITTER: @tcurranmortgage

Ask Trevor A Question

Definitions: Short Sale

 Definitions, First Time Homebuyers, Veterans  Comments Off on Definitions: Short Sale
Aug 162013
 

Definitions: Short Sale

The definition of a short sale is when a homeowner owes more to their current mortgage lender than they can sell the house for on the open market and sells the house for the market price
after negotiating with their lender to accept less.

For example, Henrietta and John own a single family house. The balance on their current mortgage is $267,000. John lost his job and they wish to sell the house to relocate to another state for better employment opportunities. They invite local Realtors to make a “Listing Presentation” as to how much Henrietta and John’s house could sell for under current market conditions. The consensus among these Realtors is a price range of $195,000-$220,000.

Henrietta and John owe more than the house can be sold for. They retain the services of a local attorney who specializes in negotiating short sales. Their attorney then negotiates with their existing Lender to accept less than the $267,000 owed on the house and basically to accept payment based on whatever Henrietta and John can sell the house for.

The negotiating of the short sale is a complicated and difficult process. Henrietta and John’s attorney will need to present comprehensive income documentation to their Lender. The Lender will in turn conduct it’s own analysis of the value of the house and the merits of accepting Henrietta and John’s offer of less money rather than conducting a foreclosure proceeding.

Thanks to recent Federal Government initiatives, the process to negotiate a short sale has become easier. What used to take nearly a year to accomplish can now be negotiated in as little as 45 days, although the average processing time for a short sale approval is probably closer to six months.

When Henrietta and John receive the approval for their short sale, there will be some fundamental conditions in place.

1. Their Lender will receive ALL proceeds of the sale AFTER Henrietta and John have paid customary closing fees for their locale and real estate commissions and legal fees to their attorney.

2. They will not be allowed to receive any funds in their pocket.

3. Their Lender may reserve the right to obtain a “deficiency judgment” against Henrietta and John for the amount of the mortgage loan left unpaid by the approved short sale.

What does a short sale mean for a Homebuyer?

1. Be PATIENT. You may have a considerable waiting period from the time you sign a contract of sale to the point when the short sale is approved on the house you are buying.

2. Get your Mortgage Approval and MAINTAIN your financial status. Once your mortgage loan application is approved and your Lender issues a loan commitment, be sure your Income, Assets, and Credit stay the same as when you made your loan application. Because it may be some time before you close, your Lender will update your documentation used for the loan approval. If your financial situation changes, you may lose your approval altogether.

3. You can’t get Something For Nothing. Don’t think you can get a house in a short sale situation for “fire sale” prices. After all, the house didn’t get burned in a fire, the Homeowner simply owes more than current market prices will bear. If you offer substantially below the market price, chances are the Lender approving the short sale for the homeowner may counter your offer to a higher price. This is based on their independent analysis of market prices for similar homes in close proximity to the house you are buying.

Do you have questions?  Click on ASK TREVOR and I’ll respond to any and all inquiries, even if you’re not buying a home in New York State.

Check out my Trulia profile HERE

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Find me on TWITTER: @tcurranmortgage

Ask Trevor A Question
Nov 222011
 

Wow, 27+ years as a Mortgage Banker! I have seen the occasional short appraisal! I started in November 1989 because I wanted to become a Homeowner so I chose a path which would get me there: Mortgage Professional.

Times were tough back in that market.  Interest rates were high and property values had dropped dramatically.  The employment picture for many Americans wasn’t very promising.  There were a lot of foreclosures and homeowners had a hard time refinancing their mortgages due to lost equity.  Sounds very similar to our recent post-meltdown market with the exception of the interest rates (11% in 1989!!!).

I received a valuable part of my education early on in my career as I dealt with purchase transactions where the appraisal came in for less than the purchase price.  Buyers, Sellers and their respective Realtors are all “IN IT TO WIN IT” and make the deal happen.

How you see your house!

I carry that education with me to this day when my HomeBuyer clients ask me at application time, “What happens if the appraisal comes in for less than the Purchase Price?”   I know many HomeBuyers may think it’s a NO-BRAINER: the Seller will automatically reduce the price.  But that is NOT the case right out of the gate.  Here’s what I learned all those years ago about appraisals that come in short:

How the Appraiser sees your house

When the bank appraisal comes in for less than the contract price

there are FOUR ways to proceed with the transaction.

 

  1. The Purchaser comes up with the difference in cash. If the appraisal is less than the Purchase price, the Seller basically assumes the Purchaser wishes to buy the house according to the terms of the contract, including the agreed upon Purchase Price. Therefore, the Seller assumes the Purchaser will come up with the cash necessary to complete the transaction.
  2. The Purchaser and the Seller meet in the middle. The Purchaser comes up with some cash but the Seller also agrees to reduce the price enough to meet the Purchaser somewhere “in the middle.”  Both sides want to complete the transaction and so they work it out.  This is compromise at its best.
  3. The Seller reduces the Purchase Price to equal the Appraised value. This is the least likely scenario, but not an impossible one.  Sellers often want to complete the purchase transaction on the original terms of the contract, including the price. But a determined Purchaser working with a great Realtor, by digging in and working hard to negotiate can often make it happen.
  4. Nothing happens and the deal is cancelled. The Purchaser either cannot or will not come up with the extra cash and the Seller refuses to reduce the price completely or even a little bit to meet the Purchaser.  In this case the transaction is cancelled, the Down Payment is returned, and everyone goes home unhappy.  The Purchaser has to begin all over again and the Seller has to put the house on the market and try to find a new Purchaser.

In the end, the motivations of all parties to make the deal happen and close the transaction rule the day.  Those motivations drive everyone to find a solution and get the deal closed.  Or not.

Do you have questions?  Click on ASK TREVOR and I’ll respond to any and all inquiries, even if you’re not buying a home in New York State.

Check out my Trulia profile HERE

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Find me on TWITTER: @tcurranmortgage

Happy House Hunting!

Apr 092010
 

There is a deliberate process to making an offer and I include here a step-by-step set of instructions on how that works. More to the point: my instructions will help you get the house you want, even if you are dealing with a difficult Seller, a Bank-Owned property, or if you are competing against another Buyer for the same house.

 

I have seen these methods work many times over with my clients over my 26 year career as a mortgage professional.

green typical residential house door in Ireland (number 5, golden lock and handle)

 

My basic methodology here is one of making your Offer a very formal proceeding. When you take these formal steps you are demonstrating to everyone involved in the transaction just how serious a Buyer you are. You will set yourself apart from the crowd. I have seen this method work time and time again for my Homebuyer clients.

 

FIVE Steps To Making An Offer:


STEP 1. Always make offers in writing. Yes, it is absolutely true that offers can be presented verbally. Don’t do that. Put your offer in writing every time. Even if you are in a situation where you and the Seller are sending counter offers back and forth, every new offer should be in writing.

When your offer is in writing, you come across to the Seller as serious. Think about it, anyone who is taking the time to go in to the real estate office and sign the form is serious about buying a home.

Put the following into your written offer:

-The amount of your “earnest money deposit” or “good faith deposit.” That is the amount of money you’ll put into escrow with the Seller’s attorney upon signing the contract of sale.

-The amount of your mortgage financing. Of course you’ll back this up with a prequalification letter, but you must include the amount of your mortgage in the offer.

-Items included in the sale. If the appliances and the chandelier in the dining room are to be included in the sale, make sure they are written in to the offer. This shows the homeowner you were paying attention when you inspected the home and asked, “What’s included in the sale?”

-Attorney Information: the name and complete contact information for your attorney.

-Anticipated contract date. Always make this date within 48 hours of your offer. Present the assumption the Seller will accept your offer and immediately forward a contract to your attorney.

Again, this demonstrates to the Seller how serious you are. You are in effect saying, “I am so serious about buying this home I want to sign the contract immediately!” Imagine how many other Buyers out there are delaying things like signing the contract (and potentially changing their minds).

-Anticipated closing date. This is an interesting point for the offer. I always recommend putting the closing date for an offer within thirty days of the contract. The fact is most closings take place within 60 days of contract, and your attorney will most likely change that date in the contract, but if your offer says “thirty days,” once again you demonstrate how serious you are about buying the home.

mind the step caution sign on a blue wall background


STEP 2. Prequalification letter.
Your mortgage professional should be available to fax a prequalification letter within hours of your making your offer; even on Saturdays or Thursday evenings.

 

STEP 3. Mortgage pro phone call. I think a phone call from your mortgage professional to the Listing Agent is a home run. When the Listing Agent hears from the mortgage person directly how eminently qualified you are, imagine how that raises your profile in the mind of the agent and the Seller!

 

STEP 4. Home Inspection ready to go. When you sign your offer, be sure to tell your Realtor that you’ve already spoken with your Home Inspector and you can have the inspection done tomorrow. Whoa, that’s really the mark of a serious Buyer!

 

STEP 5. Get ready with your counteroffer. If you offered less than the asking price, then you need be prepared with your counter offer if the Seller either declines or counters your opening offer. All of the steps above should be repeated with the new price replacing the original number. Organization and swift responses rule the day! Oh, you may not want to counter offer. That’s okay, too.

Close-up shot of keys in the lock of open door. One key is in lock another hanging on the ring

Unlock the door to homeownership with this method

Good luck and Happy House Hunting!

Do you have questions?  Click on ASK TREVOR and I’ll respond to any and all inquiries, even if you’re not buying a home in New York State.

Check out my Trulia profile HERE

Check out my Zillow profile HERE

Find me on TWITTER: @tcurranmortgage

I welcome Comments for all my blog entries.  I will be happy to review and approve all legitimate comments provided by readers of tcurranmortgage.com.  If you wish to Comment on any entry, please do so and I will quickly review and approve.

Apr 252009
 

Recent conversations with First Time Buyers have revealed a refreshing attitude amongst today’s home buyers: affordability. People don’t want to get in over their heads with a mortgage payment they can’t afford. I really like that. I have advocated exactly that concept with my clients for my entire career: buy a home you can afford.

During The Boom my words of advice in this regard fell on deaf ears. I would do then as I do now: calculate the mortgage payment and ask the client if this number fits the family budget. In other words, “Can you afford this?” Too often the answer would be “Yes” when I truly knew it should be a “No.” I tried to tell these folks to buy a cheaper house, buy a home they could afford so as not to lead to trouble down the line. I walked away from many of those situations because I just couldn’t reconcile the math and I wouldn’t be a party to a future financial disaster. I knew full well, as I left the room, that another mortgage “professional” would sit down with those clients and tell them what they wanted to hear, give them a truly bad mortgage, collect his commission check, and march off into the sunset leaving this family with a ticking time bomb.

I sat last night with a young couple shopping for a 2 family home. They make an excellent income and have excellent credit. They’re working with not a whole lot of cash (for New York) and so we’ve qualified them for an FHA Insured mortgage loan. They had an expression, “Use a blanket that’s big enough.” In other words, buy a home you can afford. It’s truly all about the monthly payment. If you can’t reconcile that number with your family’s budget, you’re either not ready to buy, or you should look for a less expensive home.

Even though this couple could afford a pretty hefty mortgage payment based on their income, they insist on shopping for a house that allows for a mortgage payment that leaves “breathing room” in their budget. This is good, sober thinking.

When you buy a home, you’re reaching for the stars to make the dream of homeownership come true. But reaching for the stars doesn’t mean you have to launch yourself into orbit. You can make that dream come true with an affordable mortgage payment if you are honest with yourself and realize that you really need to a “blanket that’s big enough.”

Makes sense to me, a blanket that’s big enough keeps you warm at night.

I welcome Comments for all my blog entries. I will be happy to review and approve all legitimate comments provided by readers of tcurranmortgage.com. I do not permit unfettered access to comments for obvious reasons: mortgage spammers and their ilk. If you wish to Comment on any entry, please do so and I will quickly review and approve. Thanks for reading tcurranmortgage.com. Hope that helps!

They’re BACK. Mortgage Losers/Thieves/Lowlifes Return To the Industry

 Uncategorized  Comments Off on They’re BACK. Mortgage Losers/Thieves/Lowlifes Return To the Industry
Apr 182009
 

We’re seeing it. All those mortgage losers who put this industry and the economy in the toilet are returning to prey on consumers once again. They’re returning because opportunities abound to separate hard-working homeowners and homebuyers from their money.

We’re hearing of people getting back into the mortgage business after the long cold “winter” of 2007-2009 when business was hard to come by and only the brave and the bold stuck it out to continue hard-earned careers. These mortgage-professional-wannabees are coming back because low interest rates and a newfound sense of optimism are bringing buyers back and opening up homeowners’ minds to the idea of refinancing.

The Associated Press reported of a warning from Senator Charles Schumer about these mortgage losers. The Senator it seems is also aware of the return of these crooks looking to ripoff consumers. Read more HERE

More than ever when shopping for a mortgage the words “Buyer Beware” ring true. Look for those mortgage professionals with substantial experience and preferably those who you find through a referral from a friend or family member, or your tax professional or attorney. Searching the internet for a mortgage professional is, IMHO, a recipe for disaster. You’re likely to come across many alleged experts who only want to tell you what you want to hear just to get your business. Once they get you to the closing table, everything changes and you can watch your money evaporate from your wallet.

I’ve recently cautioned against working with non-FHA approved mortgage people. These are yet another class of mortgage lowlife who pretend they are allowed to originate FHA loans. Worse, they pretend to know “all about” FHA loans. I just spoke on the phone while writing this blog entry with a young man who told me how he encountered many such people who claimed they could approve him for an FHA loan on a Co-Op apartment purchase. He told me they all seemed very happy to want to separate him from his money for application fees and the like. He contacted me to ask about getting an FHA loan for a Co-Op. He seemed to know already that such a loan was not available, but thought it’s because FHA doesn’t insure Co-Op loans. In fact, FHA DOES indeed insure Co-Op loans (FHA is an insurance program; FHA doesn’t make the loan, they insure the Lender’s loan in the event of foreclosure). I explained this fact to him. The problem with FHA and Co-Op loans is there are no Lenders who provide such financing.

No conversation about mortgage lowlifes would be complete without a mention of those poor homeowners trying to do a loan modification. As I mentioned recently, there are many scams out there with alleged “loan modification experts” very willing to take thousands of dollars in fees from distressed homeowners while providing absolutely nothing in return: no modification, no saving of the house, nothing, nada, zilch. Many of these crooks are, in my opinion, former mortgage losers who have changed their crime tactics from putting unsuspecting people into terrible sub-prime loans. Now they seek to steal your money—and your home—by pretending to counsel you on modifying your loan. BUYER BEWARE.

If you truly feel you wish to modify your loan contact an attorney. Or do it yourself.

On a sidenote, I attended a job fair yesterday seeking to recruit salespeople for the company where I work. I met the recruiters from the FBI and asked them to please, “…hire more people today and arrest more mortgage brokers.” They laughed and asked what I do. “I’m a mortgage broker!” I replied. “Please, I’m serious,” I continued, “these people have destroyed my industry, please hire some good people today and go out and arrest more mortgage brokers.”

Postscript: To the young man who called for advice on FHA and the Co-Op loan: Thank you for your kind compliment about tcurranmortgage.com and thank you for stopping by to read my rantings!!!


I welcome Comments for all my blog entries. I will be happy to review and approve all legitimate comments provided by readers of tcurranmortgage.com. I do not permit unfettered access to comments for obvious reasons: mortgage spammers and their ilk. If you wish to Comment on any entry, please do so and I will quickly review and approve. Thanks for reading tcurranmortgage.com. Hope that helps!

A New Hope…just like the Old Days

 Uncategorized  Comments Off on A New Hope…just like the Old Days
Dec 082008
 

There’s a feeling of hope we’re seeing from new clients; they want to buy homes. Monthly payment leads the day when it comes to determining if they can buy a home, not the rate, not the state of the economy, not the state of the housing market. And that’s just like the old days.

The hope is driven by the idea there will be a new President, a new administration, and a new attitude in Washington.

These people are coming out in the cold, looking at homes, asking questions, making offers and ultimately buying a home. Many of them are being qualified using another traditional mortgage “standard” the FHA Insured mortgage loan.

FHA has been around since The Great Depression and is still, in my humble opinion, the best way for a family to purchase a home. FHA financing allows for a more “human” understanding of a borrower’s qualifications; lower credit scores (not “deadbeat” credit, just the stuff life throws at you), lower cash required for downpayment (important in the NY Metro region where the cost of living and closing costs are so high), and the ability to use more of your income to qualify for the loan.

I’ve performed miracles using FHA loans throughout my career; and a lot of plain old boring loans that didn’t require a miracle, just a human touch.

FHA is a government insurance program; it’s not a bailout. The bank makes the loan, Uncle Sam insures it against foreclosure. So an old program comes into it’s own just in time. As a new sense of optimism sweeps into the housing market, the old-fashioned way of getting your mortgage—with some help from the government through the FHA—comes once again into vogue.

Yay for that.