Posts Tagged ‘renovation’

Pontypool Park Choices

Pontypool Park Choices (Photo credit: Wikipedia)

I deal with first time homebuyers on a daily basis and I love it.  Most first time buyers need guidance, advice, and someone they can trust.  One of the main questions I get asked is what choices do I have?  Or, I want a first time buyer program.  It’s my job to ask the right questions in order to lead them down a path where they can achieve their dream of owning a home.

First time homebuyer choices:

A Conventional Loan – A conventional loan normally requires a 5% down payment.  Underwriting guidelines can be a little more stringent and may require a debt to income ratio (money coming in versus money going out) less than 45%.  Anytime you put down less than 20% you will also have a mortgage insurance premium added to your payment.

A FHA Loan – A FHA loan only requires a 3.5% down payment.  Underwriting guidelines allow for a buyer to have some issues as long as there is a reasonable explanation.  This program does have mortgage insurance added to your monthly payment.  FHA also has Upfront Mortgage Insurance.  Until April 9th, this is 1% of your purchase price.  After April 9th, it will be 1.75%.  This amount is charged to the buyer but is added back into the loan and is financed over the life of the loan.

A HomePath Loan – A HomePath loan only requires a 3% down payment.  HomePath loans are only available for HomePath houses.  These are foreclosed homes owned by Fannie Mae.  This loan does not require an appraisal and does not require mortgage insurance.

A Rural Development Loan (USDA Loan) – A USDA loan does not require a down payment.  It does require the home to be located in a specific area and qualify for this program.  Properties can be located online at http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do .  Also, USDA has a cap regarding how much income your entire household receives.  If your household is over this cap, you would not qualify.

Renovation Loans – 203K, HomePath Renovation, and Homestyle.  While these loans do require additional effort on the buyers part, they do help the buyer purchase the home with the repairs or renovations included in the original loan.  After closing, the repairs are made.  These programs are also helping home values and steadily increasing values in neighborhoods.  Each renovation program has its own guidelines and requirements.

VA Loan – A VA loan does not require a down payment.  Being a veteran myself, I always love doing loans for other members of the armed forces.

Buying your first home can be stressful.  Make sure you are dealing with someone who can explain all of your options, clearly, and is willing to hold your hand through the entire process.  If you would like to discuss your options, please feel free to give me a call or email me anytime.  I would love to help you realize your dream.

About the Author:  Chuck Walden (NMLS #148160) is a loan officer with Prospect Mortgage.  Email Chuck at chuck.walden@prospectmtg.com or call 678-725-8076. Website is www.ChuckWalden.com

 

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Finally.  More and more home  buyers are discovering the benefits of homeownership using a Rehab or Renovation Loan.  Why buy a home that isn’t exactly what you want?  You shouldn’t. Why settle for an outdated kitchen?  You shouldn’t.  If you’re an investor, why use your own funds to repair the problems with the property you are buying?  You shouldn’t.   What if you could replace all of the kitchen appliances, paint the interior, and replace the carpet in your mortgage?  You can. 

There are several types of renovation loans that work with most home purchases.  They all have the same benefit to the buyer.  Finance in repairs, remodeling, and renovation into one loan.  The main three types of renovation loans are 203K, HomePath Renovation, and Homestyle.  They are each different but the end result is the same.  A happy homeowner with a house they are proud to call home.

Another added benefit is that the new home will appraise for more than the purchase price.  This increases home values in neighborhoods which I know all of us appreciate.

If you are an agent or buyer and interested in an easy cheat sheet, email or call me anytime and I’ll send it to you.  This program benefits the homebuyer, the agent, and the community.  A win win for everyone involved.

About the Author:  Chuck Walden (NMLS #148160) is a loan officer with Prospect Mortgage.  Email Chuck at chuck.walden@prospectmtg.com or call 678-725-8076. Website is www.ChuckWalden.com

English: Ruin of a house

Image via Wikipedia

I have been receiving more and more calls concerning the HomePath Renovation Program.  This excites me and it should make you excited too!  Anytime a buyer upgrades a property, whether they are using it as a primary home or investment property, it’s a good thing for the neighborhood and for the market as a whole.  The buyer may purchase the home for $150,000, but they may be adding $30,000 in repairs or upgrades.  The final appraisal will take into account the purchase price plus repairs.

I addressed the HomePath Program a few days ago and the HomePath Renovation Program is very similar.  When you log in to www.homepath.com , each property will be assigned a program. You will see a logo for HomePath Eligible, HomePath Renovation Eligible, or both.  These properties are foreclosed homes owned by Fannie Mae.  They offer very attractive prices and there are deals to be had.

The HomePath Renovation Program allows the buyer to put down as little as 3% on the property.  Then after closing repairs, renovations, or upgrades can be accomplished with proceeds from the loan.  A list of repairs could include repairing or replacing the roof, repairing or replacing the HVAC system, kitchen remodeling, interior or exterior painting, replacing windows, and replacing carpet. Obviously, this list is not all-inclusive but you get the point.

A program that can be used for a primary residence, second home,or investment property is a win win for everyone.  If you would like to discuss this program, please call or email me anytime.  I would love to help.

Recently, I have heard, on numerous occasions, that 203K loans are the worst.  They take too long, it’s hard to qualify, and they never close.  Guess what?  They are wrong!  One of the benefits of working with the nations 2nd largest 203K lender is that I have the ability to educate realtors and buyers.  We lend our own money.  We handle our own draws.

It is possible that an agent may have worked with a lender that did not have a clue on how to do these in the past.  This probably left a bad taste in their mouth and they vowed never to do another one. If that is the case, realtors are leaving cash on the table.  Now, let me be honest.  203K mortgages are not quick, but they are very doable.  If you can wait 45-50 days to close a transaction, then it’s a piece of cake.  How many times have you heard a potential buyer offer negative feedback on a home such as “if only the kitchen was bigger” or “if we only had a sunroom”?  As a realtor, this should be a buying sign.  If you have a potential buyer that needs something else in a home, then do a 203K.  Add new appliances.  Add a sunroom.  Replace the carpet.  Replace the roof.  Finish the basement.  Replace or repair the AC unit.  Paint the house.  Add a deck.  Use your imagination! 

These loans are perfect for any repairs that are needed or any repairs that are desired.  They are backed by HUD and are simply the purchase price of the new home plus repairs.  I would highly recommend discussing this program with your buyers and both of you give me a call.  Get pre approved and then go shopping for your dream home.

The name of the game is to sell houses.