Home Equity Loan: You can typically borrow up to 90% of your primary residence’s value or 80% of your secondary residence’s value. The interest is tax-deductible and the application process is not as intense as it would be if you were applying for a conventional loan. This is usually the easiest and fastest way to access cash. Property must have equity.
Cash out Refinance: This process is very similar to applying for a mortgage and can take 30-45 days to complete. This type of transaction can be done on any property that you own that has equity.
401K or IRA: You could borrow or withdraw money from these accounts in order to finance a real estate investing project. Another option would be to reduce the amount you contribute or stop contributions all together and instead save those funds for a down payment. Talk to financial adviser about specific rules or penalties.
Sell Something You Own of Value: A second car that you hardly drive, a boat maybe, or some forgotten savings bonds. Sacrifice and sell these items in order to finance your investment.
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.
Here is part of an email sent to me by Dan Flavin from Waterstone Mortgage:
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.
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.
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.
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!
What 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!