Gloucester County, NJ Real Estate

Using Your Blog to Educate Both the Public and Professionals

There is a truism concerning people; We all like to learn and be in the "know". No one wants to be ignorant. Everyone wants to know how to do things right! Concerning real estate, a home buyer doesn't want seller concessions, APR, or first time buyer programs to be confusing. And certainly neither do the professionals that are in the business!

Some people have a passion to share and educate. That is indeed one of my passions. Here is how I use my blog to educate both professionals and the public.

• Professional: I write about things that I feel will help other professionals grow; Effective Blogging: Don't Kill Your Blog Posts by Sharing ALL of Your Thoughts,
• Public: I write about the questions I get most; How to Have a Seller Pay Your Closing Costs While Using a First Time Home Buyer Mortgage Program to Cover Your Down Payment
• Both: I write about current real estate events that are personal to me; Do You Have an October/November Settlement in NJ? Don't Be Caught Off Guard!

First and foremost these blog posts are used to educate. I LOVE this format because I don't really have to give a "sales pitch" to other professionals or to the public; they can just read about what I write and make the decision all on their own. This I've found is one of the best ways to lay the groundwork for a relationship (IMHO). 

If you haven't done it yet, create blog posts that you can use over and over again. One of my most useful series was one on credit:

• Credit Scoring: What Makes Up Your Credit Score? (Part 1 of 6)
• Credit Scoring - Payment History (Part 2 of 6)
• Credit Scoring - Balances (Part 3 of 6)
• Credit Scoring - History (Part 4 of 6)
• Credit Scoring - Mix of Accounts (Part 5 of 6)
• Credit Scoring - Credit Inquiries (Part 6 of 6)

 

I can't tell you how many people this series has been sent to. There is a large percentage of "lookers" that have low credit scores, and this series really allows those that are motivated to help their situation and to buy in the future. Most people are genuinely grateful, and have found that when they take an hour or so to educate themselves, that the results are generally fabulous.

When someone needs additional explanation or they have very general questions, (or I don't have time to talk), I will send them the links. I will also use these posts when someone e-mails me for information but I can not get back in touch with them. Here are some examples below (along with the above links already mentioned):

• Understanding and Using All of Your First Time Home Buyer Options
• NJ First Time Home Buyer Mortgages and Grants
• Financing and Mortgages with a Credit Score Below 620

I simply follow up later to see what questions they have and to help them understand. More times than not, the blog posts give a great foundation and education and we can move on from there, or at least help them to make an educated decision!

 

Feel free to contact Steve with any questions (see below)

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Steve Kappre is a Mortgage Planner with Treasury Mortgage, a subsidiary of Aurora Financial Group. For more info check out:

• NJ First Time Home Buyer Mortgages, grants, down payment assistance, and more
• NJ Reverse Mortgages
• All aspects of purchase and refinance mortgages, up to and over 100%
• Home renovation loans for refinance or purchase
• Conventional, FHA, USDA, VA, HMFA, PHFA, Police and Fire, Live Where You Work, and more

Contact Steve Kappre directly: 856-419-3561 | Subscribe to Steve's blog via e-mail

Do You Have an October/November Settlement in NJ? Don't Be Caught Off Guard!

A quick reminder to real estate professionals and consumers alike: This time of year in New Jersey many property taxes are "updated", potentially causing the 2008 tax estimate that is showing on the MLS to be inaccurate. Sometimes the change is so small a buyer doesn't even notice. Sometimes a property's taxes could go up by $1,000 or more per year. It depends on the home you are buying.

Do not listen to rumors or leave it to chance. 

Have your real estate agent and title company do all the homework they can to find out what those taxes will be at the settlement table. Over the last month, I've seen no less than 4 closings where taxes where higher at settlement. In one case it was rather upsetting to the buyer who was already doing a 2/1 buydown so that she could afford the payment. On another occasion the buyer's taxes were about $90 more a month. That is a BIG DEAL on a $165,000 purchase!!

So if you are in New Jersey and are settling on your new home in October or thereafter, be forewarned.

 

Feel free to contact Steve with any questions (see below).

 

 

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Steve Kappre is a Mortgage Planner with Treasury Mortgage, a subsidiary of Aurora Financial Group. For more info check out:

• NJ First Time Home Buyer Mortgages, grants, down payment assistance, and more
• NJ Reverse Mortgages
• All aspects of purchase and refinance mortgages, up to and over 100%
• Home renovation loans for refinance or purchase
• Conventional, FHA, USDA, VA, HMFA, PHFA, Police and Fire, Live Where You Work, and more

Contact Steve Kappre directly: 856-419-3561 | Subscribe to Steve's blog via e-mail

  

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Steve Kappre is a Mortgage Planner with Treasury Mortgage, a subsidiary of Aurora Financial Group. For more info check out:

• NJ First-Time Home Buyer Mortgages, grants, down payment assistance, and more
• NJ Reverse Mortgages
• All aspects of purchase and refinance mortgages, up to and over 100%
• Home renovation loans for refinance or purchase
• Conventional, FHA, USDA, VA, HMFA, PHFA, Police and Fire, Live Where You Work, and more

Contact Steve Kappre directly: 856-419-3561 | Subscribe to Steve's blog via e-mail

 

How to Have a Seller Pay Your Closing Cost While Using a First Time Home Buyer Mortgage Program to Cover Your Down Payment

Being a first time home buyer can certainly be a confusing situation. If you do not work with a Realtor and loan officer that know the business well, the complexities of buying a home can whirlwind out of control. As a first time buyer using first time home buyer mortgage options, these situations must be handled even more delicately. This article will focus on how to get the seller to pay the closing costs associated with the purchase of a home, and how to utilize local state or county first time home buyer grant/assistance programs to cover your required down payment needed to purchase a home.

STEP ONE - LINE UP YOUR FIRST TIME BUYER PROGRAM

Meet with a loan officerto be pre-approved for a first time home buyer mortgage and to confirm the amount of concessions you will need (or, how much you need the seller to pay for you). These options and figures can vary greatly based on the location of the home, the loan programs available, credit profile, the home's taxes, and more. It is vital that you find a loan officer that has a working knowledge of all of the local first time home buyer programs.

It is not uncommon for a loan officer to give inaccurate advice based off of his/her specific bank's limited options. The fact is that most lenders do not offer local first time home buyer financing. Many lenders simply state that, for instance, FHA or USDA loans are first time buyer programs. This is inaccurate, and indeed this can keep some people out of the home buying "game". To complicate matters, even if you find a lender that offers one of this programs, their loan officer(s) may have never worked with this type of program.

So to reiterate, find a local, experienced "first time home buyer" loan officer, and don't be afraid to ASK MANY, MANY QUESTIONS. Any reputable loan officer will be happy to answer all of your questions.

Some first time buyer grant/assistance programs are tied to the actual mortgage - they are a one-in-all financing scenario. Other grant/assistance programs are completely separate from the mortgage approval process. Depending on where you are looking to by, some of these programs may overlap. You may prefer one program above another, or sometimes even use more than one at the same time. Again, another reason to work with a loan officer experienced in helping first time buyers with these types of financing.

STEP TWO - DETERMINE CONCESSIONS

Once the first time home buyer grant/assistance program is determined, the lender can then calculate the amount of seller concessions you will need (the amount the seller will need to pay for you). Let's look at the following example to determine how a lender would determine this.

For our example, we will use the SMART START program currently offered in New Jersey (to participating lenders). With the NJ Smart Start program, a buyer can obtain assistance of up to 4% of the loan amount. In most cases, the buyer will select an FHA mortgage which requires a 3.5% down payment. (in this case, the mortgage is approved together with the assistance program).

Let's break this down:

Home buyer purchases a home for $200,000

FHA down payment requirement is 3.5%, or $7,000

The loan amount after the 3.5% down payment required would be $193,000

The assistance program, in this case, would be 4% of the loan amount, or $7,720

We find that the assistance of $7,720 covers the required down payment of $7,000

The left over assistance money ($720) would be used towards the buyer's closing costs.

Let us assume the buyer's closing costs plus prepaid items come to $6,000

To find out how much you need the seller to pay, you would take $6,000, subtract the positive credit from the assistance program ($720), and that is the amount the buyer would need to request for the seller to pay = $5,280

 

STEP THREE - START MAKING OFFERS

Meet with a Realtor to discuss your pre-approval and your objectives. Even though many Realtor's are familiar with seller concessions, many are not familiar with home buyer programs such as those mentioned above. To be ultimately successful you will want your loan officer and your Realtor to speak in detail about your specific loan approval and financing terms. As a buyer, do not assume all parties are on the same page. As a buyer, your involvement, even as a first time buyer, is very valuable.

Some Realtors will be priceless when making offers and negotiating for a buyer. Some will have a tendency to make offers based on the pre-approval amount only, not paying attention to the seller concessions desired (or required). Some agents may request the maximum amount of seller concessions allowed with FHA, which is 6%, but this is rarely needed.  If not structured correctly, the buyer will potentially lose out on the excess concessions they don't use, meaning that they over pay for the home. 

Maybe it goes without saying, but you "Get what you pay for" when you choose a professional to work with. Except in this case, you may pay much more (for a house) and get much less (from the seller). Ask as many questions as possible. It will help you find the right person(s) to work with.

 

 

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Steve Kappre is a Mortgage Planner with Treasury Mortgage. Steve specializes in;

• All areas concerning NJ First-Time Home Buyer Mortgages, grants, down payment assistance, tax credits, and more.

• Reverse Mortgages

• Equity Management strategies for high-end homes and high net worth individuals.

Contact Steve Kappre directly at 856-419-3561 or at www.stevekappre.com

Helpful information regarding FHA, inspections, FHA appraisals, etc. I get asked this question all the time. This is a brief explanation of the difference between a FHA appraisal, a home inspection, and the "myth" of the standalone FHA inspector. Your Realtor should definitely know the difference as well.

Thanks goes to Texas Realtor Ashley Myers for making me aware of this great video. Since I'm a lender I only deal with a small portion of what you are about to see. If you are a buyer looking to invest in a short sale property or foreclosure, you'll get a good laugh from this while sadly being educated in how things tend to pan out with some of these transactions.

 

 

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Steve Kappre is a Mortgage Planner with Treasury Mortgage. Steve specializes in;

• All areas concerning NJ First-Time Home Buyer Mortgages, grants, down payment assistance, tax credits, and more.

• Reverse Mortgages

• Equity Management strategies for high-end homes and high net worth individuals.

Contact Steve Kappre directly at 856-419-3561 or at www.stevekappre.com

Rates - APR - Points - Fees: How the Playing Field is Still "Crooked"

I talked to a client today who was shopping me against some other lenders. I don't blame people, and frankly if I think someone else has a better offer and they are legit, I advise "my client" so and have no hard feelings.

In the scenario today, said client was offered 4.5% with no points. I told him it wasn't possible, but lest I be ignorant, I dropped by this other lender's website. Indeed, the lenders website quoted 4.5% with no points and an APR of 4.878%. The website gave the assumed loan amount and purchase price. So I went and did the math. What did I find out?  To make the rate and APR accurate, I had to add 2.25% in points ON TOP OF all of the regular fees (title, appraisal, etc.).

In other words, even though the quote was 4.5% with zero points, the TRUE cost was 4.5%, plus typical closing costs, PLUS 2.25% in additional fees/costs.

Please send me your Goofy Good Fake Faith Estimate!

There are several issues with this scenario

1. APR is supposed to HELP consumers, not confuse them. Clearly this bank (a large bank at that) is charging hefty fees instead of points. This brings us to our next point ...
2. Points are tax deductible costs - most other fees are not. Charging high fees in lieu of points is an injustice to the consumer. We see rates quoted with NO POINTS to make them look better to consumers. However the total cost is ultimately higher than a lender that is straight forward, charging the same dollar amount but in the form of points. A loan with the same cost in points (versus fees) is a far better deal, saving a consumer hundreds or thousands in tax deductible costs.
3. APR is "pliable" - Certain fees are calculated into the APR calculation, others are not. Do not assume lenders don't play with the "names" of fees to artificially lower their APR's. That doesn't seem to be the case in the above example, nonetheless keep this in mind.
4. Lastly, said bank WOULD NOT give the buyer a good faith estimate without having him apply for a mortgage. OK, not so crazy, but the good faith estimate would not be given for 3 days. And if the bank charged an application fee? That would just be another deceptive way to lure a consumer in and tie them to the bank.

Any lender should be able to offer you a good faith estimate (GFE) in a fairly short amount of time, 24 hours or less, allowing some time for when a lender is very busy. Assuming the lender is honest and accurate with their fees, you should be able to see the true cost of their offered rate. You should be able to see, as in the above scenario, that their rate of 4.5% with no points really has a lender fee of $4,119 (Actual additional cost based on their APR). This same week I had another rate shopper send me a goof good faith estimate with 1% in points and $2,100 in application fees. THIS IS NOT NORMAL or fair to you as a consumer, especially on a purchase loan.

I am not angry for losing business. I am however angry because of the lenders and loan officers that mislead and decieve consumers who are just looking out for themselves by rate shopping. What we often see, is that many consumers that search the world over for the lowest rate, actually end up paying much higher costs via deceptive lenders. Consumers can be blinded by a low rate, not allowing them to see the true cost.

 

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Steve Kappre is a Mortgage Planner with Treasury Mortgage. Steve specializes in;

• All areas concerning NJ First-Time Home Buyer Mortgages, grants, down payment assistance, tax credits, and more.

• Reverse Mortgages

• Equity Management strategies for high-end homes and high net worth individuals.

Contact Steve Kappre directly at 856-419-3561 or at www.stevekappre.com

NJ First Time Home Buyer Seminar: South Jersey - Clearview Adult Community School Class

Are you a first time home buyer in New Jersey?  Do you need more information to make an educated decision for buying a home? Buying a home isn't a snap decision, it is a pivitol time in life, and means that making good decisions when buying a home can effect the life of you and your family for many years to come.

Topics Covered:

• First Time Home Buyer Grants
• Down Payment Assistance
• Mortgage Programs: FHA, USDA, Specialty loans
• Upfront costs to expect as a buyer
• How to read a Good Faith Estimate
• The process of buying a home from A-Z
• Credit scoring info and tips
• Q&A session

Registration required - more information below.

 

Place and Location

Wednesday, October 14th  |  7pm 

Clearview High School, 625 Breakneck Road, Mullica Hill, NJ 08062

To Register for this class - View the Class Brochure and Follow the Instructions or contact Steve for help.

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Steve Kappre is a Mortgage Planner with Treasury Mortgage. Steve specializes in;

• All areas concerning NJ First-Time Home Buyer Mortgages, grants, down payment assistance, tax credits, and more.

• Reverse Mortgages

• Equity Management strategies for high-end homes and high net worth individuals.

Contact Steve Kappre directly at 856-419-3561 or at www.stevekappre.com