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A Discussion On Zero Down Mortgage Loans

Nov 14, 2009 Mortgage Loan

For the first time in years, the price of a home has decreased, giving more and more people the option of owning their first home. There are a few different programs that offer even more savings, such as low to zero down mortgage loans. These various programs give the first time home owner incentive to take advantage of the low cost of buying a home.

A few notable mortgage brokers programs are offered to those who have marginal to fair credit scores and want to buy their first home. These are a couple popular mortgage lenders that offer really good deals for zero or low down payment.

1. USDA is offering no money down on land in select rural areas. Some income restrictions do apply to receive this offer. Not only do the select few get a mortgage with no money down, they also get a low interest rate of 3.50%.

2. A lender known as Crown Financial Solutions has a program that targets those with a low to moderate credit score. The interest rate for this program hovers around 3%.

The United States government also has a popular option for first time home owners, known as the FHA. This is targeted towards those with not so good credit to get a loan by just looking at the past few years of payments. There can’t be any bankruptcies over the past two years and credit scores have to be good after the discharge.

Owning a home is fairly easy as long as your credit history is fair to moderate. With zero down mortgage loans and the price of homes lowering, it is easier than ever to buy the first home. With the prices of homes and programs such as the ones mentioned, it truly is a great time to buy a home.

If you are in the market to Buy a Home then check out Rob Kosbergs’ Detailed No Cost report on Attaining your PerfectHome with a Zero Down Mortgage or for up to date Mortgage info visit my Mortgage Blog

Tags: down payment assistance, economy, Fha, Finance, home buying, money, Mortgage Loan, Mortgages, no money down mortgage, real estate, Refinance, short sales, zero down mortgage

Good Realtor, Bad Realtors

Sep 28, 2009 Business Loan

There is a plus side to the housing market being in a decline, and that would be the limited amount of bad agents out there. This is a great benefit if you are in the market to buy or sell a home, because chances are you will find a more reliable, up-to-date realtor. In the past a lot of agents did a lot of their work from their offices, but now they really do need to be out in the field in order to be successful. With that information though, you do still need to be careful in choosing your agent.

There is still the part time agent that is out there just to make a sale a few times a year for some extra cash. The cashier at the local grocery may take advantage of a not so up-to-date client in order to make some extra money. Even an utility worker in your town may try to pass himself off as a full-time realtor. In cases like this, they are more hurting their clients than helping them.

In the recent years that the market has taken a dive, it has also taken a toll on realty activity in general. In my area alone, bank owned properties are 10% of their inventory and 40% of their sales. If you find yourself dealing with a realtor that hasn’t a clue what to do in the case of a bank owned or short sale property, you more than likely will not have a successful closing.

Here is an example of a predicament one of my clients was recently involved in. The clients I had been working with made an offer in escrow with a bank that was out of our area. We held up our part and followed all instructions that we were supposed to, while waiting for the escrow to be opened. With the last 20 sales that I have worked on with bank owned properties, there has always been an issue opening the escrow.

To make a long story short, after weeks of no response to my pressings, the bank finally admitted to me that they had accidentally filed the paperwork with the wrong office. And to add insult, they suggested that we could still be liable for the delay. I turned it all around, but some people are just gone terrible with details. I think I am getting too old for this business!

Had I not known what I have learned from all my experience with REO’s, this could have gone really bad for my client. Less-experienced realtors are dangerous in these types of situations. So protect yourself and only work with someone who works in realty full time.

Tags: Business Loan, home buying, home for sale, house for sale, luxury homes, New Homes, property, property listings, real estate, realty, resort homes, single family homes, vacation homes

A Sour REO

Sep 26, 2009 Business Loan

Recently I got into a bit of a hassle with some REO per diem ridiculousness and delays. I thought it might help someone out there to share a bit of the details.

Believing that there could be more problems ahead if we did not move forward, we continued on with our offer. This is why I am lucky to have experience in this field. I have witnessed this happen with several other clients, and I just reassure them to continue on with what their responsibilities, and forget about the bank for a moment.

As long as we can prove that the delay was not of our doing, we can get out of having to pay the per Diem. I made for sure that all inspections, including the termite inspection, was done by the listing agent, and done in a timely manner. Fortunately, since my client is paying for this property in cash, we needn’t worry about the appraisal. If a client were to be purchasing a home from a loan, you need to be in direct contact with the lender throughout the process, making sure the appraisal is completed in time.

You don’t want anything going wrong at the last minute if you can help it. You can’t always get everything to go the way you would like, but if you do everything you can do, things tend to turn out OK. I always have to remind my clients that most banks don’t really have any idea of what is going on at any given time. They seem to just flounder around in the hopes something will eventually happen.

It hasn’t been uncommon for me in the last few years to observe a bank doing something completely out of the ordinary. It doesn’t happen very often that a property owned by a bank has a smooth closing. As long as you hire an experienced Realtor that knows what they are doing, and you stay on top of things on your part, you should have a successful closing on a home.

Tags: Bank Owned Property, Business Loan, home buying, home for sale, house for sale, luxury homes, New Homes, property, property listings, real estate, realty, REO, resort homes, single family homes, vacation homes

Beware of Buying a Short Sale

Sep 14, 2009 Business Loan

Have you heard nightmare stories about short-sales and ever wondered what the fuss is all about? The major issues involved with buying/selling a short-sale are: everything has to be approved by the bank, the bank takes a long time to do anything, many banks have poor processes/systems, and there is no guarantee the bank will approve the deal.

1. Bank approval is required: often times, the seller doesnt care at this point ” it is hard enough to get them to do what is needed for the short-sale, but then you need to get bank approval. Every aspect of the deal must be approved by the bank. The seller is the gatekeeper and the bank is the decision-maker, however they are not working together.

2. The bank takes a long time: Short-sales range from 2-6 months to get an approval. The problem with this is that many buyers that are actively looking for a home want to be secure that they have a home and they want it now. While they are waiting for a short-sale to get approved, it is quite common for them to find another property that is not a short-sale and purchase it. This causes issues for the seller and the bank when one buyer drops out and they need to find another, which usually further increases the sale process.

3. Inexperienced professionals: short-sales are a new thing and there are a lot of them. As such, the realtors, bank employees and negotiation firms have very little experience. There are very few industry guidelines or examples to follow. Each bank has a different system and each bank makes regular changes to their system in the hopes of creating a better process. With very few people that really know what they are doing, it is easy to see how things get mucked up

4. There is no guarantee: simply put, many short-sales do not go through and the home ends up in foreclosure. This can happen for a variety of reasons. Sometimes, the bank itself is unreasonable and tough to deal with. Sometimes, the short-sale negotiator/Realtor is to blame. But usually, its a mixture of all of these reasons. This uncertainty is a problem for some buyers and one of the main reasons they purchase another property while waiting for a short-sale to get approved. One in the hand is better than 2 in the bush

In summary, there are many reasons why buyers (and some realtors) simply stay away from short-sales altogether. It is a long and cumbersome process that is uncertain to yield the hoped for result. So if you are thinking of buying or selling a short-sale, make sure to have the right professionals doing the job for you. Ask for a list of their recent short-sale successes and failures ” and ask for referrals.

To view all San Diego homes for sale, log on to Adam’s website. You can also get up to date stats and market data, as well as local and school information.

Tags: Business Loan, buying real estate, home buying, short sales

Guide To Getting Real Estate Clients

Sep 4, 2009 Business Loan

There are numerous new rules to survival in the current real estate market. A lot of them however, I have looked at the demand side of the equation. Sure, if you market properly for listing leads you may have numerous properties to offer the new exacting customer, but where do you find that New Exacting Customer?

1) Opportunists: Although a lot of individuals feel that we have not hit bottom, the people looking to invest are starting to pop up. There are a lot of real estate investors are searching for that next opportunity, foreclosure, or discounted sale. The savvy Realtors that can help investors with the details of getting control of a property with less than 100% down, there may still be opportunities to be had. It may behoove you to promote your services and experience to the investment market, either for individual real estate services, or even consultation and guidance.

2) Relocation clients: Yes it is now a buyer’s marketplace, but that does not mean that there aren’t buyers. Contrary to three years ago, buyers today have their choice of both the property that they want and the agents that they want to work with. To get the focus of these clients, position yourself as an aggressive savings manager with expertise in helping buyers get the best possible deal and the home of their dreams. As for attracting these clients, place ads, co-op market with your local coffee shop, fitness club and small businesses, and host how to buy foreclosure webinars and seminars.

3) Help relocating: Some of the most successful real estate agents are now turning to the relocation market and establishing programs to service that niche. Resources such as the internet, online pages, and even the phone book, or HR department of your closest multinational may be able to connect you with the right people.

4) Specialist in Real Estate Owned properties: Both on the buying and selling side, the agents that deal with the banks have a ready-made inventory on discountable properties. Contact the loss mitigation department of various banks to see if they have inventory that you can sell. Also, if you are familiar with the requirements of the banks to purchase bank owned property, you can position yourself as a specialist for both the investor and the movers looking for a deal.

Visit Cammie Xysliion at MLSNI to learn more about real estate and how real estate agents effectively attract clients. Cammie currently manages lockbox real estate resources as well as MLSNI.

Tags: Business Loan, expired listings, Foreclosure, home buying, home selling, real estate, Real Estate Agent, Realtor, Realtors, realty, Relocation

Keep Your Eye On REO Deadlines

Aug 31, 2009 Business Loan

Buying a bank owned (REO) property is a much different process than a traditional listing and it is imperative that your Realtor know the difference. If your Realtor is not aware of the differences, they could not only cause you to lose the property, but also cost you money in the process. Let me explain.

When a bank owns a property, they have complete control over the situation. They have the ability to make the rules and do not have to follow any disclosure requirements. The bank will typically have you, the buyer, sign an addendum which will give them full disclosure to the process, and leave you with no protections.

They will give you a timeline you have to follow, or more likely then not there will be repercussions. They really unfair thing about it, is that they don’t have to respond to anything or anybody until they are good and ready. For an example, I myself have a bank owned property being held in escrow at this moment, on which I was approved for well over a month ago. However, the bank didn’t even open my escrow until almost three weeks into the thirty day stint.

We didn’t even receive a copy of the contract or addendum until we were already three weeks in. It just so happens that the addendum we had signed way back at the beginning of the process had a clause that we pay $100 per day per diem for every day that went past the first thirty days.

Of course the bank took their time, and never completed anything in a timely fashion, causing us to not be able to meet the deadline. As you may already know, the majority of short sales do not close with a hitch. A short sale doesn’t have to be a terrible experience, but if your Realtor doesn’t put in the time and effort, it will end up being just that. By the same token, REO’s can end up the same way. In my case however, my Realtor assured me that everything was moving along smoothly, and we were just waiting for a response from the bank.

Submitted by: B. Stein has much experience shopping new homes for sale and properties overall. Check out his other articles on the internet.

Tags: Bank Owned Property, Business Loan, home buying, home for sale, house for sale, luxury homes, New Homes, property, property listings, real estate, realty, REO, resort homes, single family homes, vacation homes

Short Sales Are Tricky

Aug 31, 2009 Business Loan

Let me tell you about how I wrapped up a deal involving a short sale that was going nowhere fast…

I knew it would only be a matter of time before this property would again be on the market as a bank owned property. I encouraged my eager clients to be patient, and that I would be consistently searching all of the MLS listings until I came across their desired property again. Within a little over a week, my hunch was confirmed when I came across the same cabin, now listed at $130,000 and as a bank owned property. I called my clients within minutes, informing them of the fantastic news, and we wrote an offer for $115,000 cash that day.

The very next day the bank counter offered with $117,000, and my clients jumped on it. Luckily for us, the bank also fixed some busted pipes underneath the house that more then likely the original owner wouldn’t have been able to do. The fact of the matter is that the bank held out for a month and a half, and didn’t accomplish anything as a short sale property.

After the bank took ownership of the property, we were able to settle on a fantastic offer, and get a few repairs out of the deal as well. The second time I came across this situation it was very similar to the first. My clients in this situation, made an offer of $340,000 on a property listed as a short sale, and priced at $389,000. Again we played the waiting came for over two months while the bank had the house reappraised and had numerous BPO’s completed.

After two months, the bank oddly enough rejected our offer, and let the house go in to foreclosure. Again I patiently watched and waited until I saw the house listed again, but for $390,000 this time around. My clients and I agreed that the house was quite a bit overpriced, and thought it better to wait to see if the price would come down at all. We waited two weeks, the price had not fell, and we felt it a perfect time to finally make an offer.

We made a generous offer of $333,000, and sat back waiting for a response from the bank. Within a day, we heard back from the bank, and they had declined our offer again. After another week went back, and numbers were tossed around, we made a final offer of $339,000 and had it put into escrow. In conclusion, we again were able to get a better price, in a faster amount of time, when the homes we were interested in, were bank owned.

Article submitter Dan Troy has much experience shopping a house for sale and homes for sale in general. Check out more of his articles on the web.

Tags: Business Loan, home buying, home for sale, house for sale, luxury homes, New Homes, property, property listings, real estate, realty, resort homes, single family homes, vacation homes

Investors In Residential Real Estate Now Have New Limits Because Of New Mortgage Rules

Aug 17, 2009 Mortgage Loan

In its last act as a semi-independent company, Fannie Mae altered mortgage guidelines for real estate investors last Friday. It was Fannie’s 22nd update this year.

There are several parts to the new guidelines. Part one involves number of properties owned by one person. Formerly, one person could own 10 properties. However, now, if a person applies for a mortgage loan, Fannie Mae will not grant the loan for second homes or investment properties if the applicant already has loans on more than 4 properties.

There is a loophole, however. Fannie Mae will not count properties against the 4-property limit if they are held in the name of a corporation. This holds even if the real estate investor is the sole owner of said corporation.

So, it will be important for investors to consider restructuring their real estate holdings in to the corporate framework and negate the 4 property limit. Even though such action is sometimes taken for tax/liability reasons, now it is good for mortgage approval reasons.

Secondly, some of the guidelines do not have such a loophole. All investment property mortgages will be assessed with new loan-to-value based loan fees by Fannie Mae.

- 1.75% loan fee for loan-to-value less than 75% - 3.00% loan fee for loan -to-value 75.01-80.00% - 3.75% loan fee for loan-to-value 80.01-90.00%

These fees, along with other risk fees assessed by Fannie Mae are mandated to be paid by the buyer. The other risk fees are a minimum of % for investors.

The government hasn’t released any information about possible relaxation of mortgage guidelines since their Fannie Mae/Freddie Mac takeover. If the guidelines loosen up, this would be helpful for real estate investors. If those who want to mortgage property can’t qualify for a loan, lower rates aren’t going to be a lot of help.

If you’re currently in the market for an investment property (or two), consider that it may be cheaper and simpler to purchase over the near-term versus the long-term. And consider moving your existing properties into a corporate structure first.

Tags: down payment assistance, economy, Fha, Finance, home buying, money, Mortgage Loan, Mortgages, no money down mortgage, real estate, Refinance, short sales, zero down mortgage

First Steps in Buying a Home

Aug 14, 2009 Business Loan

Once you have made your decision to buy a home and stop renting, you’ll need a strategy to get started on your search. The secret in searching for the perfect home lies in your ability to identify exactly what you want out of a home.

Many first time home buyers feel overwhelmed and frustrated by the homebuying process simply because there are too many decisions to make. How do you decide on the best location? What if the home isn’t in the best move-in condition? Can you afford to be so far away from work? Making sure you’ve asked yourself the right questions and creating a ‘wishlist’ for your ideal home will make the home buying process much easier, and also help you get over many of the challenges involved in finding that perfect home. Start creating your wishlist with the following essential questions and considerations in mind:

1. What are the essential amenities you’re looking for? Think about fireplaces, swimming pools and kitchen appliances that you want to have in your new home. Prioritize these so you can simply say ‘no’ to a prospective home if it doesn’t meet the basic amenities criteria. Be as specific as possible with this section so you can narrow down the hundreds of options available.

2. Be specific about your location. Author Ilyce Glink of ‘100 Questions Every First-Time Home Buyer Should Ask’ explains that location is one of the most important factors when considering different homes. You’ll need to think about where you will be located in relation to schools, places of worship, shopping venues and even your friends and family. Your final location will determine how much you may need to drive each day - and if it’s worth the extra effort.

3. What is the ideal size? Do you need more than three bedrooms? Is your family growing? If you are going to need more space in the near future, you may need to buy a home with more space than you currently use. Project your home needs for at least the next three to five years so you select the right size.

4. Do you want to buy a home that needs renovation? Are you willing to put in the time, effort and finances to renovate a home? How much are you willing to invest on repairs and modifications? Create a standard concerning renovations so you can remove certain homes from your search.

5. Do you value safety and security? This is an important issue for families with small children and individuals living alone. What are the things you will need in order to feel secure in a home and neighborhood? Eliminate homes that do not pass your safety and security guidelines.

Remember to put in some effort in clarifying your home preferences and goals in life. This exercise can simplify the home buying process and will help you feel comfortable with your purchase in the long-run.

Tags: Business Loan, home buying, real estate, real estate - buying/selling, real estate investing, Real Estate Investment, Real Estate Investments, real estate-housing

Avoid 6 Things While You Are Waiting For A Mortgage Approval

Aug 12, 2009 Mortgage Loan

A home buyer should know that there are 2 stages to mortgage loan approval. We have heard of preapproval. When the buyer submits the loan application to his loan officer for preapproval, Stage 1 begins.

When pre-approval is requested, it will be a preliminary home mortgage approval indicating that the mortgage will likely be approved for a certain down payment and purchase price.

This preliminary approval becomes obsolete once the buyer signs a purchase agreement. Stage 1 is now over because the buyer must now secure the actual loan from an “underwriter” and not the loan officer.

Stage 2 of the process occurs when a mortgage underwriter is reviewing credit, income, assets, job history and probable other things. It is the job of the underwriter to insure that the buyer can meet the lending institution’s criteria for loans.

This procedure should be a formality if the Stage 1 loan officer did an appropriate job. Usually this stage moves along as anticipated. However, sometimes the buyer changes his loan “risk” without intending to do this, but affecting the mortgage approval. The buyer doesn’t mean to decrease his loan probability, it “happens.”

During the mortgage approval process, the buyer must not do anything that will increase his loan risk during the time between Stages 1 &2. Risk needs to remain consistent. The following are 6 things of the “Honey Don’t” list for this interim period:

1. Don ‘t miss a payment to a creditor 2. Don’t transfer large amounts of money in or out of your bank accounts (large may have different meanings to different people) 3. Don ‘t accept gift of cash without talking with your loan officer first (There are rules for gifts) 4. Don’t buy a new car (or increase loan or lease payment) 5. Don ‘t quit your job or change career(don’t switch to a “commission” job ) 6. Don ‘t open a new credit card (no matter the deal)

There’s other items, too, but this a good start. Now, avoiding these mistakes may not be practical for everyone. Therefore, if you know you’re going to violate a “rule”, check with your loan officer first. There are a lot of “gotchas” in mortgage lending and it helps to have professional guidance for your individual questions.

Tags: down payment assistance, economy, Fha, Finance, home buying, money, Mortgage Loan, Mortgages, no money down mortgage, real estate, Refinance, short sales, zero down mortgage