Home Buying

Government Shutdown Affects Real Estate Market

photo credit: rpongsaj

Some mortgage loan application processing could be delayed as a result of IRS and Social Security Administration offices being closed. Fortunately, FHA and VA loans do not require IRS tax returns. Some conventional lenders are allowing processing to proceed with verification being postponed until later in the process, but this decision is being made at the lender level. Social Security number verification could also cause delays.

Fannie Mae and Freddie Mac will continue to operate without interruption. Federal Housing Finance Agency will continute operations. FHA will endorse continue to endorse new single family mortgage loans. However, FHA will not make new multifamily loan commitments. National Flood Insurance Program will not be affected because it is funded by premiums, not tax dollars.

Pre-qualification vs. Pre-approval

photo by danielbertsche 
 
Here is part of an email sent to me by Dan Flavin from Waterstone Mortgage:
 
DaCia,
People often believe that pre-qualifying for a loan or being pre-approved for financing mean the same thing. However, pre-approval entails making a stronger commitment to a buying a property, albeit tentative. Pre-qualification is simply the step you take before you conduct a real estate search to see how much house you can afford to buy. To pre-qualify for a loan then, you need to sit down with the lender and provide him with your income and debt information and an estimated down payment amount. Pre-qualifying helps get the ball rolling when you are looking for real estate. On the other hand, when you apply for pre-approval, you must provide the lender with documentation that details your salary, debt load, and assets. While the process of pre-qualification is free, an application fee is assessed for pre-approval. Your credit information will be run as well. However, just because you obtain pre-approval still does not mean that you can automatically obtain financing. Funding will only be officially approved once a title search is conducted and an appraisal on the property is made.
Dan
 
I hope Dan’s email has shed light on the difference between pre-aaproval and pre-qualification. If you need help getting pre-qualified or pre-approved, please call our office today.

Buying a Condo

Many buy-and-hold investors choose to purchase a condo for many reasons, but mainly because they are usually cheap enough to buy with cash or own outright within a few short years. Another advantage of owning a condo is yard work and exterior maintenance is handled by the condo association. Make sure you pick a competent real estate agent who can guide you over the many pitfalls that can come with purchasing condo.

Let’s start with the basics: A condominium, or condo, is a unit that privately owned, while common areas are collectively owned by all condo owners in a complex. In other words, a condo owner usually owns their individual units, but not the building or land it is on.

  • What are the monthly condo fees? Even if you pay cash for a condo, you will still be charged a monthly fee that covers trash removal, exterior maintenance, and sometimes certain utilities. There is a wide range of how much this fee could be and a good real estate agent supplies the buyer with this information, as it can greatly impact the decision to purchase.
  • Are there any outstanding condo fees or liens on the property? If there liens on the property, you may have to pay them before being able to purchase. A good real estate agent will order a preliminary title search in order to uncover this information for their buyer agent.
  • Purchase and review the condo documents. There is usually a limited time period the buyer has after entering into a ratified contract to purchase and read the condo documents (which are the condominium association bylaws). If the buyer dislikes any detail of how the community is setup, the buyer can exit the contract without penalty.
  • Consider the building, the condo community, and the neighborhood. These are things that you have little control over, but affect your living condition and the value of the condo greatly. Let these factors be as big of deciding factors as the condo unit itself.

Buyers: Do You Really Need a Real Estate Agent?

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“Do I need a real estate agent? I found the property I want to buy online, myself.” If I had a dollar for the number of times I’ve heard this said, I probably would be on vacation in the Bahamas instead of writing this post from my home in Washington, DC. Only licensed real estate agents have access to the multiple listing system, a real-time database of properties listed for sale. Hence, online search engines of properties for sale may not include every listing or may include listings that are no longer available.

Finding the home of your dreams is just the beginning stage of my job. Actually, the beginning, or warm-up, is getting my clients pre-approved with one of my mortgage partners who can best meet their needs. Once my buyer client is clear on how much buying power they have, we go “house hunting.” Fast forward, my client finds the property they want to find purchase and I help them submit an offer. Having a buyer’s agent comes in handy if you are unfamiliar with drafting contracts and the legal statutes surrounding them. Fast forward past negotiation (another task for your agent) and the buyer’s agent helps to coordinate appointments with appraisers and home inspectors. A good buyer’s agent will aid you in selecting a title company and will keep their ear to the ground for any issues that surface concerning chain of title or any liens.

There are numerous procedures, research steps, and processes involved in a real estate traction. A real estate agent has the skill, knowledge, experience, and network to guide you through to closing smoothly.

 

MMP: Short Sale Sellers are in luck too!

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Buying a home in the state of Maryland? Planning to purchase in Capitol Heights, Brentwood, Cole Manor, Fairmont Heights, Mt. Rainier, or Seat Pleasant, Landover, Palmer Park, Glenarden, or Langley Park? You could receive closing and down payment assistance whether you are a first time homebuyer or not. The Community Development Administration (CDA) of the State of Maryland provides the MMP to offer a loan programs with low interest rates and down payment and closing assistance. Today (April 19, 2013) the APR for a FHA loan is 4.082% and 4.229% for a conventional. The Downpayment and Settlement Expense Loan Program offers consumers a deferred loan of $5,000 at no interest. Deferrable, in this case, means the loan is repaid when the property is resold. This assistance could help you purchase a home with very little of your own money upfront. Be aware, income and purchase price limits do apply.

Even more assistance can be obtained through the CDA’s Partners Match Programs, House Keys 4 Employees, Builder/Developer Incentive Program, and the Community Partners Incentive Program.

There are many approved lenders that offer the Maryland Mortgage Program. Click here for a list.

More information on the MMP can be found at www.mmprogram.org or Contact me and my lender partners will provide you with you information you seek,

PG county’s My Home Program

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Are you a first-time home buyer? Are you planning to purchase in Prince George’s County? Make sure you check out the My Home program. This program will assist with the down payment, reduce the mortgage principal, and/or assist with closing costs. Along with being an owner-occupant and being a first-time buyer, purchasers need to be credit worthy and attend a 8-hour housing counseling class provided by a HUD certified housing counseling agency. Borrowers are eligible to borrow up to 5% of the purchase price for a 10 year term. The kicker is that the loan is offered at 0% interest. The loan is also deferred, meaning there are no monthly payments! The balance is due upon sale or transfer of the property or when the owner ceases to occupy the property. This program is excellent for renters looking for a route to home ownership. For more information on this program, click here. There are many alternatives to saving a large down payment. Contact me and I’ll find something that meets your needs!

REO properties

REO’s are bank owned properties. They can be a great, fiscally, if you know what you’re doing. The time an REO is active is usually very short and the listing price is usually way under market value. My strategy with REO’s i to present the highest and best offer, the first time. Hmmmm. What is the highest and best offer? A real estate professional (such as myself) could provide you with their opinion of market value, based on a comparative market analysis. With a little paint, you could a bank owned property your home for a bargain. Message me for more information on REO’s.

HUD Homes

front_20611546What is a HUD home? Simply, it is a foreclosure. The government has certain agencies who guarantee mortgages. When a lendee defaults, the bank forecloses and sells the home to recover their losses. When an individual defaults on a government backed loan, the foreclosed property becomes a HUD home. Typically foreclosed properties are less expensive than standard sales, but they as usually sold as-is and need a bit of work. A buyer could find a HUD home at www.hudhomestore.com. Making an offer on a HUD home is similar to being at an auction, so be prepared for a bidding war!

I would love to help you locate a foreclosed property. Call me today!