The most important thing to do is GO SEE YOUR LENDER!  When buying a home in  todays market you have to have a letter from a respected lender. . . . → Read More: Different Levels Of Financing Approval]]>  There are over 25K homes on the market  just in the Charlotte and surrounding area. Having said that, finding you a home is not an issue.

The most important thing to do is GO SEE YOUR LENDER!  When buying a home in  todays market you have to have a letter from a respected lender. There are several different types of letters a lender can issue:

1) Pre-Qualification Letter – This means simply the lender has pulled your credit score.

2) Pre-Approval Letter – This means the lender  has checked your credit, bank statements, employment,  and probably looked at your tax returns.

3) Loan Commitment – This means the lender has checked and verified all of your information at least twice. You are good to go, the money is yours.

IT’S IMPERATIVE YOU HAVE ONE OF THESE LETTERS TO SHOW YOUR VALUE AS A BUYER TO YOUR REAL ESTATE BROKER AND COMMITMENNT TO THE SELLER.

Simply put, a Short Sale is where your lender approves and allows you to sell your home for less than you owe the bank. Understand the bank must approve the Short Sale, the bank will tell you if you are allowed to accept an offer, you have no . . . → Read More: Short Sale vs Forclosure, Which Way To Go?]]> Neither choice is a great one.

Simply put, a Short Sale is where your lender approves and allows you to sell your home for less than you owe the bank. Understand the bank must approve the Short Sale, the bank will tell you if you are allowed to accept an offer, you have no control over anything, you must be already behind in your payments, and the most unique qualifcation is your property must be worth less today than what you owe on the property now.  In other words, if you paid $300,000.00 for your home – you owe $240,000.00 – and it appraises for $283,000.00, the bank is probably going to deny your request to Short Sale because there is value to pay the bank off in full. An example of  an approvable  Short Sale would be, if you paid $300,000.00 for your home – you owe $240,000.00 – and it appraises for $203,400.00. Even with an approved Short Sale your credit will be affected, meaning for at least 2-3 years you would not be able to purchase another home. However, if you continue pay all of your other credit lines on time over a 2-3 year period, it would be possible at the end to purchase another home. Understand that missing a mortgage payment is like running a stoped school bus, it doesn’t get much worse than that.

Now lets talk about Foreclosure , thats where you just didn’t make your payment and you either abandoned the property or continued to stay without paying until the sherriff removes you. If you wait until the sheriff comes, you’ll normally be given about 15 minutes to leave the property. After that you’ll have to contact the listing agent to get back in the home to get the rest of your things and you only have a 10 day window to do so. If not removed or agent has not been called in the 10 day time frame then your stuff is subject to trash removal or will be sold. Keep in mind  that the laws are different from state to state. As far as your credit goes, asumming you pay all of your other credit lines on time, you’re still looking at a 5-6 year period before you could purchase another home.

So to answer the question, a Short Sale is always better in my opinion. Hope this has been helpful.

PMI – Private Mortgage Insurance is the vehicle that allows homebuyers to borrow amounts in excess of 80% of the purchase price or value of a property on conventional loans. It’s an insurance that is provided by a . . . → Read More: Understanding Real Estate and Mortgage Insurance]]> What is mortgage insurance and how does it tie in with the real estate industry and transactions?

PMI – Private Mortgage Insurance is the vehicle that allows homebuyers to borrow amounts in excess of 80% of the purchase price or value of a property on conventional loans. It’s an insurance that is provided by a private mortgage insurance company to protect lenders against loss in the event that the borrower defaults on the loan.

MIP – Mortgage Insurance Premium is the insurance that is charged by the Department of Housing and Urban Development (HUD), a government agency. HUD guarantees or insures the performance of every FHA loan and protects a percentage of the lender’s investment against a borrowers default. Unlike conventional loans, at least one form of  MI is required on all FHA loans regardless of the percentage of the value of the home that is borrowed. The mandatory premium enables borrowers who might not otherwise fit within conventional guidelines to receive funding for the purpose of buying or refinancing a home.

Funding Fee – Is the type mortgage insurance that is used by the Veterans Administration (VA).

Guarantee Fee – Is the type mortgage insurance that is used by the USDA Rural Development program.

Regardless of what it’s called all types of government loans have some type of mortgage insurance on them. Here’s the best definition: The amount paid by a borrower for mortgage insurance, either to a government agency such as the Federal Housing Administration (FHA) or to a private mortgage insurance (MI) company to protect the lender against default by the borrower.

Dover Mortgage Company ( Jane Estes )

In my opinion there’s only one reasons,  bad credit.

An agent has found a seller who is desperate enough to lock down his property for a set period of time with someone who they already know has bad credit.  A lease / . . . → Read More: What about doing a Lease / Purchase Contract?]]> Why would a buyer in todays market do a lease / purchase contract?

In my opinion there’s only one reasons,  bad credit.

An agent has found a seller who is desperate enough to lock down his property for a set period of time with someone who they already know has bad credit.  A lease / purchase, as with any contract has to have a end date. So what the seller is banking on is the buyer has said he or she will over the next 6-12 months clean his credit up and be ready to buy the sellers home in this mortgage market when the credit standard to buy has never been higher. Does that sound like it makes sense. The answer should be NO. Since you already know the buyer  has bad credit, what makes you think he or she will  pay the rent on time. I’m sure someone can think of some other reasons but credit is the main one.

Here’s a reason a buyer sould not want a lease / purchase. By the time your 6-12 months are up and assuming you are one of the acceptions to the rule and didn’t have bad credit, why would you want to lock yourself into buying a home with so many other choices on the market.

Just rent, at the end of the lease if you still love the home and the seller still wants to sale and everythings ok with the credit then  purchase the property. No harm no foul

Ask the builders represenative “Who is your client?”. As big as they smile and as nice as . . . → Read More: Tips When Buying New Home Construction]]> Ask the builders represenative if they are a licensed real estate broker. In North Carolina the builder’s sales represenatives do not have to be licensed realtors. Therefore they are not held to the same standard as a licensed realtor.

Ask the builders represenative “Who is your client?”. As big as they smile and as nice as they seem, just remember, they are paid by and work for the builder.

Some builders don’t put all of their properties in the MLS. How do you know what the original price was? How do you know what the current price is? Are they running any specials? You have to go by what the represenative tells you. Once a property is entered in the MLS system,it creates a history that can be tracked for up to ten years. Some builders will run specials for a set period of time. The first time you look at the home it will be one price, the next time you go look the builder will have dropped the special and raised the price of the home. How much sense does that make in the best buyers market in 25 years?

Some builder represenatives may tell you, if  you don’t use a realtor they can discount the purchase price of the home.

Some builder represenatives may not tell you or suggest to you to get a home inspection. By law you have the right to have a home inspector check out the property.

1) Buyers must be patience. The bank does not care about you, your wants, your credit, or how much money you’re putting down. They’re working thousands of short sales at any given time, you just have to get in line and wait your turn. If you . . . → Read More: Buying or Making Offers on Short Sale Properties]]> Several things to know when making offers on short sales.

1) Buyers must be patience. The bank does not care about you, your wants, your credit, or how much money you’re putting down. They’re working thousands of short sales at any given time, you just have to get in line and wait your turn. If you can or will be patient you can get a heck of a deal.

2) Seller must be available to sign contract. Short sales are not bank owned properties, the bank is allowing the seller to sale the property  for less than is owed, therefore the seller must be available and willing to sign contract. Every bank is different, some will want the seller to sign before the bank accepts to show intent, other banks will not want seller to sign until the bank gives the ok. This process can take anywhere from 2 weeks to several months.

3) Pre-inspect home. All short sales are sold as-is. The last thing you want to do is wait weeks or months for the bank to accept your offer and then find out ther’re major issues with the home. It never hurts to ask the bank for a major repair. If  it’s a lender required repair, that may be the help you need to get the repair done or get your earnest money back.

5) Protect your Mortgage Qualifcation. They’ll be plenty of time to buy things for the home after you close. DO NOT open any new lines of credit, don’t buy anything that requires a loan or payment, and don’t buy any big ticket items until after closing. The last thing you want to have happen is to lose your loan qualification.

4)Earnest money. In NC you don’t have a contract unless you have some amount of earnest money. Have your broker write the offer so that the earnest money will be deposited upon acceptance of offer, not at the time of offer. This way you don’t tie your money up and lose interest.

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