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Thursday, February 26, 2009
How to Be a Good BorrowerToday I'm going to blog about how to be a "good" borrower. The best type of borrower,
the ones that lenders are really looking for, have the following qualities: Number
one is good credit. "Good" credit these days is a FICO score of 720 or over. This will give you access to the best
rates today. Number two is be a light debt carrier. Lenders want to see a debt load of
43 percent or less - a $430 monthly commitment to mortgage and debts if your income is $1000 per month. Number three is a down payment. Expect to put at least 10 percent down for a "conforming" loan.
You can get away with as little as 3 percent on an FHA loan, or if you put down as much as 20 percent, you will not have to
pay private mortgage insurance. Be prepared to provide paperwork. Lenders will want to
see W-2's, tax filings, paystubs and documents for your income and savings. Have them together and ready. My next blog will be on how to get and sustain that good credit score.
Monday, February 16, 2009
International Buyers are Buying HereI've had quite a few international buyers coming here to buy with the price of the dollar being
so weak comparatively. It's been very interesting to deal with them and get their perspective on what's going on.
The great thing is, these international buyers are infusing our economy with money and strengthen and stabilizing home prices.
Be sure that if you are working with, or are an international buyer, that you also consult with a competent accountant to
advise you as to the tax ramifications of buying and owning property in the States.
2:26 pm cst
Thursday, February 12, 2009
Foreclosure and Short Sale Experiences....If you are a first-time buyer, there are some things you need to know about buying short sales or
foreclosures. For those of you who don't know what a short sale is, it's when the
Seller owes more money on the home than what it is worth, and the Seller asks the bank to take less of a payoff on the mortgage(s)
owed in order to sell the house. Understand that as a buyer, the person you're not really negotiating the final deal with
is the Seller. It is the bank (or bank(s)). They are the final decision maker on how much to sell the home for, when to close
and even what to pay for as far as closing costs. I have a nice young couple that I am working with now whose closing date
was moved up and survey is not being paid for because the bank dictates the terms. Know going in that whatever you negotiate
with the Seller is subject to approval by the bank. Back in September, I had the buyer
of a short sale actually end up paying more than the listing price for a home because the bank wouldn't otherwise approve
the short sale. She didn't have to do it, of course, but even at the higher price she paid, it was still a great deal
and she was happy. But that deal that she signed in May didn't close until September. Short sales take time! Foreclosures are a bit easier in the fact that the bank already owns it and you deal and negotiate directly
with them. However, buyer beware! The contracts for sale of these places are strictly AS-IS meaning you don't have any
guarantees or warranties as to the condition of the property. Do an inspection! A
thorough one. And please, please make sure all utilities are working and on when you do the inspection. It may be a pain to
have them turned on, but it will be well worth it. You don't know what types of electrical or plumbing problems there
could be if the water and electricity is turned off. And of course, have a competent real
estate agent and real estate attorney represent you.
Wednesday, February 4, 2009
Mortgage Application Charges DoubleIt has just been announced that Bank of America, Chase and Harris Bank are all doubling their mortgage
application fees to as much as $750. This decision comes in the wake of increasing demand for refinancing and more consumer
rejections because of tightening lending restrictions. With fewer banks making home loans,
existing banks are free to start charging higher fees. The country's four largest banks made most of last year's mortgages
nationwide. Chase, Bank of America, Citigroup and Wells Fargo made 63.8% of the loans in 2008, up sharply from 35.8% last
year.
Tuesday, February 3, 2009
New Fannie Mae Fee Will Cost Condo BuyersIf you're thinking about buying a condo, you might want to close prior to April 1. It's just been announced that as of April 1, any condo buyer who puts less than 25% down on a condo will
pay an extra fee of .75% on a 30-year fixed loan. To do some simple math, if you are buying a $300,000 condo with a $240,000
loan and a $60,000 down payment (20%), you'll pay an extra $1,800 fee to Fannie Mae. For most people, it won't completely
kill the deal, but with the City of Chicago transfer stamp and all other fees you pay if you're buying a condo in the
City, that could really add up.
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