First Time Home Buyer Tax Credit Extension?
September 17, 2009
There’s talk of an extension for the first time home buyer tax credit. There’s been a number of bills introduced to congress having to do with this extension. The latest potential extension gives it another 6 month run. Congress just passed a bill extending the credit for service members only for a year. It might be worth looking into purchasing your first home if they pass it. Read here how to buy your first home.
UPDATE: There is more and more talk every day about this extension. Nancy Pelosi mentions a possibility of extending it to all home purchases, while other bills have been introduced to extend to the end of 2010 with a gradual reduction.
With the tax credit deadline fast approaching, the tax credit is almost out of reach. The inventory of available homes are starting to dwindle as first time buyers are getting all the good deals as soon as they come available. Any new buyers may as well forget about good deals that can be found with foreclosures or short sales because they take too long. There is barely enough time to find a home and get financing in our area. If you’ve planned on buying and taking advantage, you better act now.
I feel that the market is being helped by this “cash for houses” plan and to see it go will also see a downturn in the housing market and economy. With 1,400,000 new buyers this year thanks to this stimulus, it’s going to be sad to see it go.
**There is no official approval for an extension or new tax credit for next year.
First Time Home Buyers Should Find a Home Soon
June 29, 2009
If you are a first time home buyer and are considering purchasing a home and benefitting from the first time home purchase tax stimulus, you will want to stop thinking and start looking.
The purchase transaction will have to be closed before December 1st, 2009. However, once you have an offer accepted, it can take a couple months to close on a deal. It used to take 30-45 days to close on a deal, but that number has been increased recently.
- Understaffed lenders aren’t able to handle files as quickly as they used to, so loan underwriting takes much longer than before.
- Recent regulations criminalizing all direct communication between appraisers and mortgage brokers adds another few days to weeks on to the transaction.
Right now, it’s not unusual to see a sale go 45 to 60 days or longer before closing! This means if you don’t buy before September 1st, there is a chance you won’t close in time.
Don’t miss out on this once in a lifetime opportunity. Prices are low, interest rates are low, and there’s a lot of homes to chose from. It’s a lot easier and cheaper to buy a home than you may think.
How to save time finding a home:
- Find a buyer’s agent.
- A free buyer’s agent can show you all properties you might like in one or two days. - Search extensively online and find the best choices
- You can save time by eleminating the least likely possibilities so you don’t have to visit too many homes. Start searching now!
- Install Dwellicious.com and save all the properties you find from all the sites to one location. - Don’t search way out of your price range.
- Have your preapproval letter, good faith estimate, and earnest money ready for an offer.
Call or email today for a free consultation.
Start searching Stark County now!
How To Get a Great Deal in the Current Real Estate Market
April 22, 2009
The real estate market these days is constantly changing. Today’s market is a strange one. There are always really good deals to be found, but because of the current explosion of buyers on the market, they can be difficult to find. There are a few ways to get a real steal in real estate.
First of all, get in contact with a free buyers agent and get prepared to buy a house. This can take some time, and you will miss out on a property of your dreams if you aren’t ready.
There are two types of sellers that will often sell property below market value; banks and estates.
Purchasing a property owned by a bank can be difficult and stressful, but the rewards are high. First of all, be aware that these transactions could take more than a couple months to get accepted and closed, so if you want to get the tax stimulus, you will have to close by December 1st, 2009. You will want to get started immediately, because you may not find a deal on a home you are interested in for some time. There are two types of bank-involved properties you can purchase, bank owned and short sales.
Purchasing REO (Bank Owned or Foreclosed Properties)
With REO homes, you will want to watch the market very, very, very, very closely. Look at all the new listings that come up every day in your desired market. A good real estate agent can help you with this by sending them to you in an email or other format. As soon as one pops up that you might like, take a look at the property that day if possible. If you like it, put an offer on the property that same day! When an REO property gets on the market, there are usually multiple offers on the first or second day if it’s priced well.
Not all REO properties are listed below market value, but it does happen when the bank wants a quick sale. An agent can help you identify a well priced listing. You will want to make your best offer up front because if you try to get an even better deal, you may get outbid. You might consider giving an offer at or over asking price to help improve your odds of winning. It can take a few days to a few weeks to hear back on an accepted offer, so break out the nail file, it’s going to be a stressful wait.
Purchasing Short Sales
A “short sale” is when the owner of the property owes more on the home than what it’s worth and they need to sell it, for whatever reason. The bank they are borrowing from has to get involved and approve the purchase price. We are running into these more and more these days.
My brokerage has many short sale listings and we understand the process involved. These banks all handle short sales differently. Some lenders aren’t even accepting offers at the listing price or even contacting the seller for nearly a year about a submitted offer. An agent that works with these entities are aware of which ones are better to deal with. Keep in mind that multiple offers can be submitted on the property while awaiting acceptance.
If you get outbid on a property, don’t be discouraged, an even better deal could make it’s self available. You may want to keep an eye out for another property while waiting to hear back, you can always rescind your current offer and place a new one on a different property.
Buying Estates
An estate sale is when heirs have gained ownership of a property for many reasons including when a parent passes away or moves to assisted living. Many times the property has a lot of equity since it was lived in and paid on for many years, allowing an aggressive listing price. The heirs may wish to have a quick sale so they don’t have to make payments on the property. These sales are usually a lot easier to deal with than banks. A great way to get a good deal at an estate is to purchase it at auction. An auction requires a down payment. A real estate agent can help you find and buy at auction.
While the other types of sales do produce good deals on properties, you will want to work with a buyer’s agent that can keep you informed on the market and help you recognize value.
Give me a call if you are looking in Stark or Summit County, Ohio to get started today! 330.412.2221
10 Reasons to Own Instead of Rent (not what you’d expect)
March 14, 2009
We’ve all heard the familiar reasons to own instead of rent. “Build equity”, “invest in your future”, “stop paying someone elses mortgage”, “forced savings plan”, etc. I have constructed a list of own-not-rent motives that you may not have thought about.
10 (different) reasons to own a home instead of renting.
- You can move in and out when you want to, you don’t have to wait till your lease is up.
- No one has to approve the colors you paint your walls.
- You actually could be paying less monthly in your own home than similar rentals. Enough to make a difference.
- You don’t have to inform anyone that your living arrangement has changed.
- Want new lighting fixtures? Not a problem.
- Typically, your mortgage payment doesn’t ever increase, unlike rent. (Unless you get an ARM)
- Staying in your home longer, means you can become more involved in the local community.
- You don’t have to ask anyone to fix your shower head, just do it yourself.
- Help build your credit by paying on time.
- Most importantly: You don’t have to ask anyone if you can have a pet! Please adopt.
Are you a first time home buyer? Get started with my first time home buyer’s guide.
First Time Home Buyer’s Guide – Part 2
February 20, 2009
Ok, You now have the small amount of money it takes to buy a house. That’s the hardest part! This next step is crucial… unless you can pay cash for your property. Please note, it’s going to take 30-60 days to close on a property once you have an accepted offer, and most of this time is spent getting your loan approved with the bank.
Determining your affordability
The latest interest rate I saw was at 5.5%, so for every $1000 you borrow, your principal and interest will be $5.68 at a 30 year term.
So, let’s do the math:
Don’t forget taxes and insurance (which vary for each property), and mortgage insurance.
All this can be worked backwards so you know how much home you can afford based on the maximum total monthly payment. So, if you don’t want to pay more than X dollars a month, then you can afford a Y thousand dollar home.
Choosing the lender
There are a few options out there for borrowers. Your first option is to decide whether you are going to borrow from a bank or mortgage broker. The main difference between the two is that a mortgage broker usually has a wide variety of loan programs from many different or a select few lending institutions. Where as a bank has a select set of loan programs from one lending institution; the bank they work for.
What does this mean? If you go into your local bank and ask for a mortgage, they are going to sell you a their loan. Your payments will be going to that bank. If you go to a reputable mortgage brokerage, they can shop from a wide variety of lenders to give you the best rate and terms. This also gives the mortgage broker the flexibility of finding the right program for your unique situation. Mortgage brokerages typically hire services from local small businesses like appraisers, helping the local economy, where as corporate banks typically keep everything in-house. I would recommend using a mortgage broker because they have less overhead so they tend to have lower costs, more competitive rates, are less restricted, and are more personable and understanding.
Make the call
Now you need to determine if a lender will sell you a loan based on your credit scores, household income, and other factors. Call your friendly neighborhood loan originator and ask them to pre-qualify you for a loan. This will take a few minutes of your time where they will ask you about how much you make, collect social security numbers, and the like. It is important that you answer honestly because you will have to prove everything you say when it is time to get approved for your loan. They will punch your numbers into their fancy computers and check your credit. Then they will let you know what you qualify up to and quote you a current interest rate. You could request a good faith estimate from these lenders to see their costs so you can compare to other estimates, however you will need to take some documentation and go to their office so they can accurately create one for you.
Whipple Financial Services, LLC is a great mortgage broker. Call Joe at 330-477-6762. ~~~ MB.802575.000
If you don’t qualify right away, don’t get discouraged. Whipple will work with you and point you in the right direction to be qualified ASAP at no charge.
Now, you are ready to start looking for a home, and this is where I come in. I can’t wait to show you how exciting this part is.
First Time Home Buyer’s Guide – Part 1
February 18, 2009
So, you want to buy a home? Great idea! It’s the American dream and it’s more possible than you probably realize. This is probably the best buyers market we will see in our lifetimes.
What makes this the best time to buy?
- Prices are incredibly low
- Interest rates are so low that borrowers are saving hundreds of dollars a month
- The quantity of available homes is mind boggling
- The government now has tax credits and down payment programs for first timers
The question I come across most often from first time home buyers is “How do I get started?”. This series of blogs will get you up to speed on what you need to do to get prepared and walk you through the whole process.
Step 1: Get your hands on some cash.
The days of 100% financing are gone like the wild west. You will most likely need some sort of down payment. Keep in mind there are Ohio government programs like OHFA that you could qualify to get most of your down payment paid for. The lowest down payment I have seen lately is 3.5% of the purchase price for FHA financing. Conventional is right behind that with 5% for good credit.
To put that into perspective, lets say you buy a $100,000 dollar home (which is a lot of home in my market) you will need minimum $3,500 for a down payment or $1,750 for a $50,000 home. Most lenders accept gifted money as well, so if you can borrow from Mom, Dad, Grandparents, Uncle Rob, that will work. There are also government programs to help you with the down payment. OHFA is a state program in Ohio that will pay your down payment and charge you a slightly higher interest rate on your loan.
There are a few additional items you may need to pay for, but many costs can be paid for by the seller if you ask them to. These fees are unique for every market.
- Appraisal – Approximately $150 – $400 depending on which appraisal the lender requests. The appraisal is required by your lender to make sure your new home is worth what you are borrowing. Most of the time, the appraisal comes in at or above the purchase price. You will likely be paying for this.
- Inspections – I will be going more into detail about inspections in this series, but you may wish to get your new home inspected by professionals. There are a few typical inspections. These include general home inspections($200) and wood destroying insect inspections($50-$75). There are other inspections available if you are concerned such as mold, radon gas, and lead based paint.
- Title Fees – approximately $500 – $1500 depending on your purchase price and loan amount. In order to own the property, you will need to transfer the title to your name. This is done by a third party title company.
- Lender Fees – Varies depending on the lender and the loan amount. You can work with your loan officer to keep these down.
- Homeowner’s Insurance – Your first year will need to be paid by or at closing if you are getting financing.
Again, you can ask for the seller to pay for your closing costs and inspections at the time of the offer. So in essence, you might only require the money for part of the down payment, appraisal, and homeowner’s insurance. If the seller is unwilling to pay the closing costs, you could always raise the purchase price on a counter offer so they net the same amount. This way you don’t have to pay out of pocket for most of the costs of the transaction.
There is something called earnest money deposit that you could put forward with your offer to show you are earnest in purchasing the home and will be applied to your costs at closing. This can help to get your offer accepted, if the seller sees you are willing to risk money. If you rescind on your offer for no apparent reason, this money is forfeited to the seller. If you fail to get financing, the inspections are unsatisfactory, you lose your job, or any other good reason for breaking the contract, you will get this money back. This deposit can be any amount you chose and is optional, however, many foreclosed properties have a minimum amount required for acceptance.
It’s a good idea to have the first couple months of mortgage payments saved up also. You can also recoup the costs of buying a home if you purchase one in 2009 thanks to the stimulus package. First time home buyers are eligible if they or their spouse haven’t owned a home in the previous three years. They are eligible for $8000 tax credit that you don’t have to pay back if you own the home for more than three years.
Step 2: Getting Prequalified with a Lender
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Listings
Great 3 BR, 2 Bath Canton Home For Sale | All Appliances Stay!
Excellent 3BR, 2 Bath, NW Canton Home For sale, w/ appliances!
For Sale $64,900
NW Canton Home for Sale – 2 Story Colonial
Great location 2 story colonial at an even greater price
For Sale $79,900
Completely Remodeled 3 Bedroom Home for Sale in Canton OH with large lot
Completely Remodeled 3 Bedroom Home for Sale in Canton OH
Sold $59,900
Large 4 Bedroom Remodeled Canton Home w/ First Floor Laundry
Large 4 Bedroom Remodeled Canton Home w/ First Floor Laundry
For Sale $59,900
Uniontown/Springfield Twp Home For Sale – 2005 built house with large lot and detached garage
Uniontown/Springfield Twp Home For Sale – 2005 build w/ almost 3/4 acre and detached garage
For Sale $150,000
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