Feb 012017
 

Closing TableDefinitions: Closing Costs in New York.

When people think of closing costs typically they think of the fees paid at the closing table. The fact is, closing costs are all fees associated with the purchase (or refinance) of a house. For our purposes in this definition, we’ll concentrate on closing costs associated with purchases in New York.

 

The bulk of closing costs are indeed paid at the closing table. These include:

• Origination fees and other miscellaneous fees (application, underwriting, document prep, etc.) paid to your mortgage lender
• Flood Certification Fee paid to independent verification of flood zone
• Title charges paid to the title company (including searches and insurance for you and for your mortgage)
• The fee paid to your attorney to represent you (you might pay a retainer fee to your Attorney in advance of the closing)      Closing Attorney
• Municipal fees paid to record your mortgage and record your deed
• Taxes or transfer fees required to be paid to your state, county, or local municipality
• Escrow deposits to create your escrow accounts for the purpose of paying your annual homeowner’s insurance renewal premiums and property tax bills when due
• Miscellaneous Fees associated with your loan application and/or closing: Title Closer “pickup” fee, Title endorsement fees, Bank Attorney, and etc.

You will pay other fees in advance of closing, too. These include:

• Home Inspection: All Homebuyers should obtain a Home Inspection report from a Certified Engineer or Home Inspection Service. This report will give you advance warning of the condition of the plumbing, heating, electrical, roofing, foundation and other structural and age-related issues for the house you wish to purchase.
• Appraisal Fee: An Appraisal determines the value of the house for the purpose of making a lending decision. Typically the appraisal fee is paid for within 5 days of the Lender sending you a Loan Estimate of Closing Costs. (Lenders are not permitted to incur any fees on your behalf such as an appraisal fee or application fee or an origination fee until 4 days after they have sent a Loan Estimate to you; you must have time to review this document and agree by signing an “Intent To Proceed” form before a fee such as an appraisal fee can be charged to you)
• Application Fee: Many Lenders charge application fees in the beginning of processing a loan application.

Preparing for Closing

Prepare for closing by reading your Closing Disclosure

• First Year Homeowner’s Insurance: When you buy your home you are required to purchase, prior to closing, the first full year of Homeowner’s Insurance for your home. You must present proof of this insurance, including a receipt indicating the insurance premium has been paid in full for one year, prior to closing your mortgage loan. If you are including escrows in your monthly mortgage payment for your insurance and property taxes (required by all Lenders for FHA Insured Mortgage Loans and most Conventional Loans), then your Lender will pay your renewal premium every year after your first year from your escrow account.

Closing Table

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.

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Happy House Hunting!

Jan 312017
 

There are several reasons why Buyers can’t use FHA Financing for their home purchases. You would think that HomeBuyers should have the full range of loan programs options available to them when making their financing decisions.  They DO!  But Buyers are too often getting discouraged and diverted from using FHA Financing by Realtors, home Sellers, and, yes, mortgage professionals.

And many of those Buyers don’t qualify for other types of financing, which makes these reasons all the more insidious and dastardly.

REASON 1: Inexperienced FHA Appraisers. Unfortunately, the FHA program has an incorrect reputation for “difficult” appraisals, i.e., appraisals requiring lots and lots of repair items prior to closing.  I hear often from real estate agents of the terrible experiences they had with FHA loans, specifically the appraisals. Thanks to the radical changes in our mortgage business since 2010, many very experienced Appraisers left the business. This deficit was eventually filled, especially as the economy improved, by new appraisers.

These Appraisers simply don’t have the necessary understanding of FHA appraisal standards. I reviewed once such appraisal yesterday. The Buyer found me after an intensive Google search for an expert mortgage professional on FHA 203k Renovation financing. She’s been trying to buy a bank-owned foreclosure property (REO) since last July!  The Lender she was working with simply couldn’t figure out how to make the financing work with the renovation financing.  When I reviewed the documents she submitted, I realized the main problem with her file was the appraisal.

First, this was a terrible appraisal all around: Incorrect purchase price, comments skewed all over the report instead of properly situated in the addendum, crazy comments on, and use of, comparable sales, and I mean CRAZY.  Secondly, and most importantly for this poor Homebuyer, the appraiser demonstrated a crystal clear LACK of understanding of FHA “health and safety” and property condition guidelines.  This appraisal is for a property in Westchester County, an area where I often hear the objection from realtors about their bad experiences with FHA appraisals.

REASON 2: Realtors’ bad experiences.  First and foremost, let me state this radical idea: NO ONE gets to tell a Home Buyer what type of financing they can or can not use to complete a home purchase. But too often, that’s exactly what happens.

Because Realtors have had a bad experience with an FHA transaction—or worse, they’ve “heard” of people having bad experiences—they strongly discourage Home Buyers from using this option.  I have personally had Realtors tell me on the phone, “Oh, no, they can’t use an FHA loan for this house.”  No kidding!  When I inquire as to the reasons why, there ensues a litany of false information embedded in the Realtor’s mind about how the FHA program works.  I will then explain that, since I work for the Lender, and have extensive experience with FHA financing, these ideas in their heads are, ummm…WRONG!

Let’s be clear: if a Realtor, or a home Seller, by extension, has had a bad experience with an FHA loan, that does NOT prevent a Buyer from going ahead with the financing of their choice.  I mean, what if these people once had a bad experience with home buyers who showed up driving silver four-door cars?  Would they be prevented from buying the home?  Of course not because that is just absurd!  Well, so is the idea that a Buyer cannot use their preferred (or ONLY) method of financing a home purchase.

REASON 3: Inexperienced or misinformed mortgage professionals.  The answers given to home buyers by mortgage professionals range from, “Oh, you cannot buy a home with FHA financing over $417,000 with less than 10% down.” FALSE. To, “You know, FHA financing is only for people with bad credit.” FALSE. To, “That program is only for First Time Buyers.” FALSE. To the all-time doozy, “My bank does not Offer FHA financing.” From the depository lender with the HUD Eagle on the front door!

Make no mistake, the lack of understanding of the FHA program and/or lack of experience/education by these professionals is probably the biggest reason why so many Buyers have difficulty using FHA financing (and why Realtors and Sellers have so many bad experiences).

What to do?

If you are buying a home using FHA financing, let NO ONE discourage you from using the loan program.  It’s an excellent program and has been available to home buyers for more than 80 years!  And, when selecting a mortgage professional, do your background research on that person’s experience in general (HERE on the NMLS Consumer Access website by clicking “Self-Reported Employment History” on an individual’s licensing profile) and for FHA financing specifically.  GOOGLE is your friend!

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

Happy House Hunting!

Jan 252017
 

The National Association of Realtors (NAR) released their 2016 annual report. The good news: sales of existing Single Family homes (including Condos and Co-Ops) are the best in a decade. The bad news: Inventory of homes for sale hit a record low.

I’ve experienced this low inventory trend anecdotally through my experiences working with First Time Home Buyers here in New York.  

Lawrence Yun, NAR chief economist, said, “Solid job creation throughout 2016 and exceptionally low mortgage rates translated into a good year for the housing market,he said. However, higher mortgage rates and home prices combined with record low inventory levels stunted sales in much of the country in December.”

Here’s my advice to you First Time Buyers out there:

First, you must be prepared before you hit the streets looking for homes. If there are not enough homes available, but lots of Buyers walking around competing with you for that limited supply of houses, then being well-prepared can put you ahead of the crowd. One of the best ways to beat out another Buyer when competing for a house is to have “all your ducks in a row” even if your Offering price is LOWER! I’ve seen it happen, time and time again.

Second, you must strike while the iron is hot. If you see a home which comes close to your “Wish List” for location, features and price, present your OFFER the same day! The early bird gets the worm!

With homes inventory at record low I have also seen in my travels lots of homes that have no business being on the market! Yes, there are homes out there which you actually cannot or should not buy. The reasons are many and varied but they range from unrealistic Sellers with over-priced homes and a stubborn refusal to negotiate price to bad Listing Agents who tell you that your financing package won’t work for their Seller if it’s an FHA or VA loan to homes with serious physical or legal problems (mold in the basement; ancient and leaking roof; an extension without permits/certificates; a deceased owner with improperly filed estate documents, and etc., and etc.).

If you are prepared with a solid team of professionals they will guide you away from potentially harmful or crazy deals. Which brings me back to being prepared!

I have seen it time and again when existing home inventory is low: the Buyer who is clear-eyed and prepared wins and accomplishes their goal of homeownership!

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

Happy House Hunting!

How To Prepare to Become a Homeowner

 First Time Homebuyers, The Affordable Home, Uncategorized, Veterans  Comments Off on How To Prepare to Become a Homeowner
Jan 232017
 

START. No matter what your timeline for when you plan to become a Homeowner. START. Put “all your ducks in a row” as it were.
START. Now. Why? Too many Homebuyers wait until they’re actively looking for homes. Then it becomes overwhelming because of the lack of preparation.   

Think about it. You’re out on a Sunday afternoon visiting three open houses you saw advertised on Zillow. The first house is a wreck, and a bank foreclosure to boot (and that wasn’t in the advertisement!). But the second house, painted in a lovely yellow tone with the perfect fieldstone finish around the foundation, in great condition, and priced right…now this is a house worth considering!

So you want to put in an Offer. But you are not yet Prequalified for mortgage financing. (Preapproved? Prequalified? Same thing, no matter what the real estate agents tell you!). Oh, and you don’t even have an Attorney selected. Home Inspector? Who? What? WAIT…whoa…WOW…this is overwhelming!!!

START. Find a great Licensed Mortgage Loan Originator with a reputable Direct Lender. If you follow the “get pre-approved” link on Zillow, you’ll be referred to an excellent and local mortgage professional. But don’t stop there. For that mortgage professional, or any mortgage professional you come across in your research, do a little background checking…you know, like a “Private Detective!” You can verify the license of your mortgage professional at National Mortgage Licensing System Consumer Access HERE. When you’re on the site, click on “Self-reported Employment History.” If the mortgage person was managing a pizza restaurant three years ago, well, I’ll let you draw your own conclusions. Remember, longevity in this business is hard to accomplish and in the doing, the mortgage pro gets better and better and…yes, experience counts!

START. Get referrals to two very important members of your home-buying team: a great Attorney who specializes ONLY in real estate and a Certified Home Inspector. Interview them; review the cost; determine if you like these pros. Put them on notice you’re not yet ready to buy, but you’ll want them at a moment’s notice once you’re out there shopping for a home.      handsome

START. Credit: let the mortgage professional tell you if your credit is sufficient for mortgage financing. I meet lots and lots of consumers who—while checking their own credit reports—decide ON THEIR OWN that their credit isn’t sufficient. Except…wait for it…you don’t work for the bank! Let the bank tell you if your credit is acceptable, or not. You’ll most likely be surprised.

START. Income: here’s the basics for qualifying for a mortgage loan. 2 years consistent employment history. We’ll use your current salary to qualify (not what you were paid before you got that big raise three months ago). Unless you get lots of overtime, or bonuses are a regular occurrence, or if you are Self-Employed, we don’t need to average your income; we’ll use the current salary. For those other income situations, your mortgage pro will do the math for you based on the different loan program guidelines (FHA has different requirements from FannieMae and different from FreddieMac). If you recently graduated college with a degree, we can use the education history (in most cases) towards the two year requirement.

START. CASH!!! Here’s the thing, even if you’re buying in New York, where the closing costs are the highest anywhere, you really can buy a home with minimal down payment. Because many loan programs allow the Seller to pay your closing costs through a “Sellers’ concession.” You’ll negotiate this into your purchase price when you make an Offer.

START. Put your team together. Review your Credit, your income, your cash. Rely on a trusted mortgage professional to tell you exactly where you stand today for a mortgage loan. Focus on monthly payment. Even if you’re not going out looking for homes until next summer, preparing for that experience is one of the smartest things you can do today in your endeavor to become a Homeowner!

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

Happy House Hunting!

Can You Use a VA Loan to buy a CONDO in New York?

 First Time Homebuyers, The Affordable Home, Uncategorized, Veterans  Comments Off on Can You Use a VA Loan to buy a CONDO in New York?
Jan 172017
 

Yes it is possible to use a VA loan to purchase a condo in New York. BUT…the condo must be a VA approved condominium. If the condo is not on the list, you cannot use a VA loan to purchase the condo.

Find VA Approved Condos HERE.

Everyone wants an affordable home…but there are other considerations you must take into account when considering a Condo.

As an advocate for First Time Buyers, I always give this advice to clients who are considering purchasing a condo. First, consumers often have the mistaken impression that condos are “cheaper” or have lower monthly payments than you would have for a home purchase, say of a Single Family Home.

While this may be true on the overall price of the property, in terms of the monthly payment, a condo can often be nearly equal to that for a single family home. This is because the monthly expense for a condo is not only Principal, Interest, Insurance and property taxes (and mortgage insurance depending on the loan program if other than VA), but also the monthly expense for the Homeowners Association. This “HOA” cost can be prohibitively expensive. When I prequalify a client for a condo in NY Metro area, I use an average monthly HOA expense of $650. Obviously HOA fees vary from one condo to another, but this is a fair average cost based on my experience.

So,when factoring that $650 into a monthly housing expense, the overall monthly expense for a condo can be almost or exactly equal to that of a single family home.

Therefore, I advise first time buyers to look at the other aspects of condo living to make a determination as to whether this is a good “fit” for their home buying experience. If a condo is considered as a “starter home” experience, then I would caution a first time buyer that a single family home is probably a more reasonable property to accomplish that goal.

Other factors to consider with condos:
When real estate markets turn “down” Co-Op, Condo, and 3 & 4 Family homes tend to suffer first in the potential for resale. So, if you own one of these properties, and you MUST sell, but the market has turned south, you will face significant challenges in getting your home sold.

-Living in a condo means you will often be living “up close and personal” with your neighbors. Very much similar to living in an apartment building, even if the condos are townhome style properties.

Condo living comes along with restrictions—more often than not—on what you can and cannot do to your property.

Overall costs for a condominium can increase dramatically if the condo is poorly-managed, or if an unexpected major incident—such as a heating system failure or roof collapse—occurs and winds up costing the condo monies in excess of their “capital reserve” account. If a condo association needs to increase its capital reserve account for any reason, this means a special assessment for the individual condo owners, maybe as much as several hundred dollars a month.

I often say to first time buyers that Condo living differs from owning a single family home not in the monthly payment, but rather by asking this question: “Do you mind shoveling snow?”

BOTTOM LINE: Approach a CONDO purchase by reviewing ALL variables in the experience and don’t focus solely on cost.

Read about the Basics of VA loans HERE.

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

Happy House Hunting!

To Prepay Or Not to Prepay, that is the Question

 Tax Benefits of Homeownership, The Affordable Home  Comments Off on To Prepay Or Not to Prepay, that is the Question
May 232015
 

calculator photo2I was included in a FaceBook thread where a homeowner considered whether to refinance his 30year Fixed rate mortgage into a 15 year fixed rate mortgage, or to find an online calculator that would assist him in creating a prepayment plan.

Here’s his query:
Can anyone recommend a decent mortgage calculator site/app/spreadsheet?
We’re currently on a 30 year/4% fixed. Trying to compare two options:
1) Switch to a 15 year/3.65%.
2) Start paying an additional quarterly payment against principal with the existing mortgage.
I know this isn’t exactly advanced math, but I also feel like someone must have put something together that shows the impact of added payments against principal. Mortgage calculators are great at helping figure out the cost of new mortgages (i.e., option #1 above), but not so good at helping jigger existing mortgages (option #2).
Any help?

Here’s my response:Light-Bulb-Clip-Art
First check with your tax professional before you consider a day in the near future when you “burn the mortgage!” While it may feel great to someday own your home free of any debt, you might lose out on a valuable (in real dollars) tax deduction. Second, rather than refinance and incur closing costs again, prepaying a 30 year mortgage is easy-peasy! Simply add 4% of your current Principal and Interest monthly for year one of your prepayment plan. In subsequent years, add ANOTHER 4% of each years’ NEW monthly payment. Treat your mortgage like an employee with “4% cost of living raises” each year. If you follow this course you can prepay a 30 year loan in 13 years. Hope that helps!

 

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

Happy House Hunting!

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

Check out my Zillow profile HERE

Find me on TWITTER: @tcurranmortgage

Happy House Hunting!

Apr 132015
 

tax refundIt’s tax time and many homeowners receive large tax refund checks. Here’s some advice I’ve put together for you on different ways to use that money.

This article is part of my series “The Affordable Home.”  In the series I seek to focus on the intangible benefits of homeownership by making them, well, tangible.  I believe the affordable home is the sensible and proper approach to homeownership; so many new homebuyers today specifically focus on the affordability of the mortgage loan instead of the “HGTV” aspects of a house. I find this attitude refreshing for two reasons.

First, it’s an “old” attitude: in decades past the idea of buying a home revolved around diligent budgeting to save up the down payment and the concept the monthly payment should be affordable.

1950-oct-28-crop

The features of the house—granite countertops, high end appliances, paved driveways—were minor considerations and certainly did not make for sound decision-making when buying a home.  Those features could be added later, if one so desired, and those “old-timers” (I was once one of them) knew that.

Second, during the past decade, during the “Boom” the focus was on something I considered completely nuts: buy a home, an amazing home packed with big rooms, big features, and big monthly payments, at any cost.  Affordability be damned.  I struggled as a mortgage professional during those years to try to talk sense into people.

Since it’s tax-time, the advertising from folks who want your refund checks are everywhere.  There was the TV advertisement: “Just in time for your tax refund we’ve received a new stock of bamboo flooring!”

bamboo

It occurred to me that this is the time of year when many people, especially homeowners, get large tax refunds and the sharks start circling looking to take a bite out of that refund check.  To this I say, “STOP!  Take a minute to reflect on what you should do with your money!  You worked hard for it, and you bought an affordable home so you could get that refund, don’t throw it away without giving it due consideration.”

Here are my suggestions to spend your tax refund wisely:

1. Consider investing the money for your future.  My pal Nick, the owner of the Westside Steakhouse  was at one time a stock broker.  Here’s his take on wisely using your money:: “Never spend more than you make and save some money every week.”  Awesome advice and I believe that fits very handily into my concept of the affordable home.   Especially in this day and age of doubt over pensions, we consumers must be smarter and more responsible with our planning for retirement.  Follow Nick’s advice and invest your tax refund to begin or supplement your savings plan.

The New York Times “Your Money” section featured a wonderful piece recently about a new vehicle that makes it easier for us to create a sound investment strategy without all the costly bells and whistles.  Here’s the link to that article:  Financial Advice for People Who Aren’t Rich

I have long advised my clients to consider retaining a Financial Advisor to provide counsel on all things finance-related: investing, budgeting and insurance.  You can find a local Financial Advisor in the your area here:  National Association of Personal Financial Advisors

And here is sound advice from a CPA about investing not just your refund, but investing throughout the year and the tax benefits/ramifications: Fund Your Retirement Or Your Child’s College?

2. Create an Emergency Reserve.  Take some or all of that refund check and put together your emergency reserves.  Park the money somewhere it’s inaccessible by debit card!  You’ll need ease of access, but putting it within reach of a debit card is a surefire path to disaster.  pile of cash

3. Pay down debt.  This tends to be the long held standard amongst many homeowners I’ve known over the years.  I believe this is an admirable activity, but I believe taking your tax refund to pay down debt should be part of a comprehensive plan for debt management.   To take a page out of my friend Nick’s finance playbook: don’t spend more than you earn.  I advocate tending to your credit use respectfully and as part of your total family budget every month.  This way you won’t necessarily have to take your hard won refund check and pay down a credit card balance.  Of course, if, during the year you experienced an emergency and needed to access your credit to assist with that emergency, then paying off that debt at tax time is a sound strategy since it’s a one time event.

I’ve found that Consumer Action is the best site on the ‘net for sound advice on all things credit related, including how to obtain lower credit card rates and fees and great counselling on preparing and maintaining a family budget.  Find them here: Consumer Action

 Another Smart Strategy for The Affordable Home: Take home more money in your paycheck; get a smaller refund at tax time.

I hope my suggestions are useful to you at this exciting time of year.  Of course, I also advocate that you really shouldn’t get such a large refund at tax time if you’re a homeowner.  I’ve long believed that you should incorporate into your homeowners’ “network of advisors” a great tax professional or CPA.  By doing so, you can lean on your tax professional/CPA to advise you on the correct withholding throughout the year to increase your take-home pay, reduce your end of the year tax refund (and prevent having to pay!), and enjoy the benefits of homeownership every month instead of once a year. Here’s the IRS page on how to calculate correct withholding, but I recommend you do this only under the guidance of your tax professional/CPA:  IRS Withholding Calculator

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

Focus On Total Monthly Payment

 First Time Homebuyers, How-To Negotiate, The Affordable Home  Comments Off on Focus On Total Monthly Payment
Apr 122015
 

WOW! What a beautiful day today here in The Bronx to be out and about House Hunting! If you’re shopping for your first home today here’s some simple advice to help you make the right decision on your home buy.

1. Wish List: Be sure to have a WRITTEN wish list of everything you want in a home. Include features, condition (how much improving are you willing to do?) and location (proximity to transportation/work and desired school districts). When you find a home that comes pretty close to your wish list, it’s a good house for you!

2. Focus on TOTAL Monthly Mortgage Payment. Your total monthly mortgage payment includes the Principal and Interest of your mortgage loan, one-twelfth of your property taxes/Homeowners Insurance/Flood Insurance/Mortgage Insurance (depending on the mortgage loan program), otherwise called “PITI.”

Your Mortgage Banker should be only a phone call/text/email/tweet away from providing you with an accurate TOTAL monthly mortgage payment. I advise this to be the best option for accurate information as opposed to online calculators. Your Mortgage Banker will be more familiar with local common and customary costs such as Homeowners Insurance and Flood Zone costs as well as local property taxes (be wary of the property taxes listed in the real estate listing for under-estimating).

If you’re qualified for a mortgage loan program that requires mortgage insurance (PMI, FHA, or VA Guaranty) those online calculators can’t correctly calculate your monthly insurance. If your Mortgage Banker isn’t available or isn’t familiar with those local common and customary costs you need to find a different Mortgage Banker!

3. Make OFFERS promptly. Nothing demonstrates that you are a serious buyer like making an OFFER on a home immediately. Don’t wait until Thursday! If a home comes close enough to your basic Wish List requirements and the total monthly mortgage payment fits your comfort zone then strike while the iron is hot!

You’ve got nothing to lose and everything to gain! Sellers want to work with serious buyers, and so do their real estate agents. Get your Offer prepared in writing with your agent before you go home. Then enjoy your evening and let the real estate agents and the Seller fret, worry, and negotiate with YOU.

4. Prepare your counter-offer position. Assuming the Seller doesn’t accept your initial Offer, prepare your pricing strategy for the next highest price you’re willing to go up to. Once again, focus on Total Monthly Mortgage Payment. Never pay more than you’re comfortable with! And, prepare your “walk away” strategy, too. Some Sellers and their agents are just too unrealistic with their pricing expectations.  If they don’t respond to your Offer in a reasonably prompt manner, and with a reasonable counter-0ffer (less than 5% of List Price is NOT reasonable IMHO), then it’s time for you to walk away from the negotiating table.  Let them chase YOU.  After all, you’re a prepared and serious buyer, not a time-waster.

negotiating

5. Line up your professionals to move your deal along.  Be sure to have your ATTORNEY, your HOME INSPECTOR and, of course, your Mortgage Banker all lined-up and ready to jump on your home buying bandwagon once you and the Seller have worked out and agreed on your terms and price.  Your professional team should respond to your heads-up about your accepted Offer within less than two hours, IMHO, to help you prepare to buy your home.

Do you have questions about Total Monthly Mortgage Payment?  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

Happy House Hunting!

 

 

 Posted by at 4:43 pm

Purchase and Renovate: ONE LOAN

 First Time Homebuyers, The Affordable Home  Comments Off on Purchase and Renovate: ONE LOAN
Apr 102015
 

Sunday afternoon during the springtime. You’ve found the right house. It’s the house you want: the price is right, the location is right, the amenities are all…right. But there’s a problem with this house that is otherwise so right: it needs a new kitchen with appliances. Oh, and the windows are ancient, ugly, drafty and in serious need of replacement.

retro k

You want this house. And you’re rather move in to your new “right” house with that a new kitchen, appliances, and windows.

But how to purchase the home and find the money to renovate?

Maybe Uncle Harold can lend you the money after the closing. But, do you really want to ask Uncle Harold for such a favor? Then you know you have to invite him for every Thanksgiving and every Christmas and every Fourth of July barbecue. You LOVE Uncle Harold, but EVERY holiday? Umm….

 

uncle

 

And what if the house won’t pass muster with your Lender’s appraisal? Maybe those windows and broken kitchen cabinet doors will catch the Appraiser’s attention and she’ll call for them to be repaired prior to closing. (We call that a “Subject To” appraisal: the appraisal is subject to completion of required work before the Lender will close your mortgage loan) The Seller is willing to do only minimal work to help you pass an appraisal, but do you really want to rely on the Seller’s handywork to repair the kitchen cabinets and/or windows?

All of a sudden Uncle Harold spending all his holiday time with you is looking like your only option…

But there are several programs where your Lender can provide you the mortgage money for your home purchase and for the renovations. The beauty of it? A Purchase and Renovation Loan!  ONE LOAN and thus ONE MONTHLY MORTGAGE PAYMENT.

The first, and most commonly used, is the FHA 203k Rehab Mortgage . With this program you can actually do a full house gut-renovation if you wanted to. It all depends on how much mortgage money your Income, Assets, and Credit allow you to qualify for, AND how much the home will be worth AFTER your proposed improvements. That’s right, that same appraiser who might have “subjected-to” your “right” home will now tell you how much the home will be worth with the new kitchen, appliances and windows. Yup, definitely improves value and the “After-Improved” appraisal will reflect that. Better still, the Lender’s approval decision is based on that “after-improved” value.

The FHA also offers the FHA 203k Streamline program. You need a minimum of $5,000.00 in improvements to qualify (can you say “Appliances?”) and the maximum is $35,000 for improvements. This program offers a faster, more efficient process of approving a purchase/renovation loan. And meets your “right house” scenario of new kitchen, new appliances and new windows, unless you’re selecting crazy expensive product/services.

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FannieMae has a similar program for your renovation needs, too. FannieMae HomeStyle. This program is similar to the FHA 203k for purchasing and renovating that “right” home you found.

So, don’t lose hope. You can buy that house that’s so right for you. Ask me for more details by clicking “Ask Trevor.” I’m happy to give free advice all day long; it’s what I do.

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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.

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 Posted by at 2:12 pm