Sterling Arms Home for Sale | Stratford, NJ & Understanding Home Ownership

This condo is currently for sale in the Sterling Arms development in Stratford, NJ. Have you maybe thought of buying a home but are a little too nervous to take the first step? Hopefully with the information you find below, you will have a better feel for what kind of payments are realistic and an estimate on if you may qualify.

What would my payment be?

You can purchase a home like this with as little as 3.5% down. If the purchase price was $135,000 and you made the minimum down-payment of 3.5% then your monthly payment would be about $1,230. This payment includes the mortgage, taxes, insurance, and association fees.

If you are a first time home buyer, you may also qualify for a grant to purchase this home which will help cover the necessary down payment and some additional costs. For more information on how to utilize your options as a first time home buyer, check out Understanding and Using All of Your First Time Home Buyer Options

What kind of income would I need to qualify?

When you look to qualify for a mortgage, the mortgage company will want to verify your gross income (pre-tax income) as well as all of your monthly debts such as credit cards, student loans, or car payments - basically those items that would show up on your credit report. (For more info on credit, check out Why I'm Stressing Over Someone Else's Credit and Financing and Mortgages with a Credit Score Below 620.)

To qualify for purchasing this home you would want to have at least a gross monthly income of about $2,800. This income can come from one or more borrowers. For example, if you and your significant other would like to purchase this home, your combined gross monthly income would need to be about $2,800 or more. This equates to an hourly income of a little more than $8 an hour for 40 hours a week for each borrower.

This example assumes that you have no car loans, credit card charges, or student loans, etc. IF YOU HAVE MONTHLY BILLS such as these you can certainly still qualify, you would just need to have additional income to cover these bills and still have a good debt-to-income ratio. (total monthly debts divided by total monthly gross income). Your debt ratio should be around 45% or lower. You may qualify for a higher debt ratio, but it would probably not be a prudent move.

Can the seller pay for my costs?

The answer is some of your costs. This is commonly referred to as seller concessions. The seller can pay for fees such as closing costs, points, title fees, recording and appraisal fees, and such. The seller CAN NOT pay for your down payment. However, there are many ways you can come up with a down payment. Two of the most common ways to make a down payment (other than using your own money) is to utilize a grant from the county or state (such as first time buyer grants) or to you can receive a gift from a family member or employer for the down payment. Or you can do both! There are many other ways to come up with a down payment such as a loan, sweat equity, and more, but the scope of this article can not cover those. For more information on grants check out NJ First Time Home Buyer Grant Program, Tax Credit Loan Program: The "Prefund" Program, or First Time Buyer Options in South Jersey

For more information on seller concessions check out Understanding Seller Concessions | Seller Paid Closing Costs | Seller Contributions | Seller Assist

We have reviewed an estimated monthly payment, how much you need to earn to qualify, and a few ways on how your down payment and closing costs can be paid. Check out these other helpful links.

• Non-Occupant Co-Borrowers....How Knowing the Rules Can Help You Obtain a Home Now!!!
• $8000 Tax Credit Information for First-Time Home Buyers
• NJ First-Time Home Buyer Mortgages and Grants
• Home Buying Tips

Finally one of the best ways to get ready for a home purchase is to surround yourself with great people, namely a great loan officer and Realtor. If you don't currently have a loan officer to help you out and answer all of your questions, I (Steve Kappre) would love to help. Likewise if you don't have a real estate agent who can help you out with that part of the transaction, then I can help find you one that is GREAT at what they do. A great loan officer or real estate agent will LOVE to have you ask them questions. If they don't then MOVE ON!!!

Best wishes - if you have any questions please comment below, e-mail, text, or call Steve Kappre (Contact info below).

---

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

• All areas concerning First-Time Home Buyer Mortgages, grants, down payment assistance, police and fire loans, rehab loans, 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 Home Buyer Links

Understanding and Using All of Your First Time Home Buyer Options

Understanding Seller Concessions | Seller Paid Closing Costs | Seller Contributions | Seller Assist

Financing and Mortgages with a Credit Score Below 620

Why I'm Stressing Over Someone Else's Credit

---

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

• All areas concerning First-Time Home Buyer Mortgages, grants, down payment assistance, police and fire loans, rehab loans, 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

100% Financing for Salem County, NJ

100% financing is available for a home purchase for any town in Salem County. This mortgage option is available to both first time home buyers and those selling a home and relocating. This loan option is known as a USDA loan, and is fast becoming one of the most popular loans.

Although this 100% loan option has been around for many years, its popularity thinned over the last several years because of the easy access and availability of 100% financing from every lender in business. The 100% financing loans offered over the last several years though were mostly adjustable rate mortgages.

The USDA loan is a 30-year fixed loan. Here are some additional important aspects of this mortgage option:

• There is no monthly mortgage insurance
• The mortgage insurance premium can be financed so that you don't need to pay it at settlement
• The seller can pay as much closing costs as is needed. This allows a buyer to have some or all of their closing costs paid by the seller.

One of the benefits of having the seller pay closing costs is to keep more money in the buyer's bank account. This creates a safer environment as a homeowner, financially being ready and able to take care of those little "unplanned" events that happen as a home owner.

For additional information, to get pre-approved for a mortgage, or any other needs, feel free to Contact Steve Kappre on his cell phone at 856-419-3561.

Other Helpful Links

Understanding and Using All of Your First Time Home Buyer Options

Understanding Seller Concessions | Seller Paid Closing Costs | Seller Contributions | Seller Assist

Financing and Mortgages with a Credit Score Below 620

Why I'm Stressing Over Someone Else's Credit

---

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

• All areas concerning First-Time Home Buyer Mortgages, grants, down payment assistance, police and fire loans, rehab loans, 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

Affordable Housing In The Villages at Berkley in Mantua, NJ and in other Gloucester County, NJ Areas

Here you can find some great information regarding affordable housing programs in Gloucester County, NJ. Some towns in Gloucester County have affordable housing units for both low and moderate income families. The units typically are one or two bedrooms, sometimes three, and you have to apply for approval with an affordable housing firm.  Approval is based off of your income, the number of people in your family, and some other criteria.

LET'S TAKE A STEP BACK.  You may have heard it many times by now; This real estate market has GREAT opportunities for home buyers. For those that have the patience and thick skin, they can sometimes get a great buy when bidding on a foreclosure or short sale. But this process can be extremely aggravating and unfruitful, not to mention for some families in New Jersey, even foreclosure and short sale home prices are still out of their price range.

With afforable housing homes, single parents and/or one income family households can purchase a home that is at their price range. As an example, it isn't uncommon for a home in the Villages at Berkley in Mantua, NJ (Gloucester County) to have homes for sale in the $40,000 to $60,000 range.

MORTGAGE OPTIONS FOR AFFORDABLE HOUSING UNITS

Affordable housing qualifications regarding mortgage financing is for the most part the same as buying any other home. One of the GREAT things about purchasing at this price range (which is based off of your income and family status) is that you are very likely to qualify for almost any grant option out there such as those offered by the particular county or those offered by the state. Indeed many affordable housing buyers can get into a home with little to no money, and even have enough of a grant to pay for ALL mortgage requirements such as the down payment and closing costs.

FHA, Conventional, and VA are all options within the affordable housing purchase parameters. USDA is not an option due to some of the affordable housing guidelines regarding home ownership. Frankly 100% financing would rarely be needed when utilizing a combination of grants and other options.

Other home costs such as taxes and association fees are also reduced. In New Jersey this is important due to the high taxes (along with everything else).

As an example...

... A home purchase for $60,000 in The Village at Berkley in Mantua, NJ would have taxes of about $115 a month and association fees of $64. This is roughly 1/2 to 2/3 of what these figures would be on a unit the same size that is not purchased through an affordable housing program. Once all monthly costs are added together, those costs being the mortgage, association fees, taxes, mortgage insurance, and home owner's insurance (if needed) the monthly payment is about $525 - $550 at a 6% mortgage rate.

Indeed it is often a lower payment to buy a home than to rent.

BELIEVE IT OR NOT ...

... Right now some of the affordable housing offices NEED BUYERS. This is no joke. Amazing as some of these offers sound, there are homes and options available that aren't being taken advantage of. One of the reasons that this happens is because the affordable housing offices do not co-op.  What this means for a buyer is that although an affordable housing office uses a Realtor and their real estate office to complete the transaction, unless your Realtor works for (or specifically with) the affordable housing firm, then your Realtor will not get paid if you buy one of these units. Your Realtor is in business to make money, (and rightly so), so don't hold it against them if they aren't jumping to get you into one of these homes.

If you would like a personal introduction to an affordable housing representative, call Steve at 856-419-3561 and he will be able to quickly set you up with an application for one of the available homes.

Affordable housing areas in Gloucester County, NJ: Mantua | Williamstown

New Jersey Housing Resource Center

Other Helpful Links

Understanding and Using All of Your First Time Home Buyer Options

Understanding Seller Concessions | Seller Paid Closing Costs | Seller Contributions | Seller Assist

Financing and Mortgages with a Credit Score Below 620

Why I'm Stressing Over Someone Else's Credit

---

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

• All areas concerning First-Time Home Buyer Mortgages, grants, down payment assistance, police and fire loans, rehab loans, 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

For Sale By Owner in Wrightstown, Burlington County, NJ 08562 with Mortgage Options

If you have been looking for a new home in the Wrightstown area of Burlington County, NJ then check out this 3 bedroom home with a great backyard and more. If you have been looking in the area you may have missed this home since it is a For Sale By Owner.

You can view more pictures of this home by checking out the link below which will bring you to the online flyer.

Check out the online flyer for this For Sale By Owner here. When you are done looking at the additional photos, check out the financing options available for this home. These mortgage options are over and above beyond typical financing options.

 

MORTGAGE OPTIONS

Typical FHA, VA, or conventional loan mortgage financing is available on this home. Read on to understand some additional mortgage options.

First-Time Home Buyer Smart Start Grant - This option will allow a qualifying first time home buyer to obtain a grant that will cover the required down payment necessary for an FHA loan. Alternately if a VA loan is used, the grant can cover some or all of your closing costs. You can effectively purchase a home having the entire purchase price financed and the closing costs covered by a grant. For more information check out NJ First Time Home Buyer Grant Program

Pre-Fund Tax Credit Program - Similar to the Smart Start grant option above, but utilizing a portion of the $8,000 First-Time Home Buyer Tax Credit. For more information check out Tax Credit Loan Program: The "Prefund" Program

USDA 100% Financing - Like a VA loan, a USDA loan allows a home buyer to finance 100% of the purchase price of a home. This for sale by owner property qualifies for a USDA loan (not all homes qualify - a home has to be in a specific geographic area). Interest rates on a USDA loan a very attractive, often the same as conventional or FHA rates. For more information check out 100% Financing in Gloucester County, NJ

For additional information about the property shown here, or about any mortgage options, feel free to contact Steve Kappre at 856-419-3561 or by e-mail or text message (see below).

Other Helpful Links

Understanding and Using All of Your First Time Home Buyer Options

Understanding Seller Concessions | Seller Paid Closing Costs | Seller Contributions | Seller Assist

Financing and Mortgages with a Credit Score Below 620

Why I'm Stressing Over Someone Else's Credit

---

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

• All areas concerning First-Time Home Buyer Mortgages, grants, down payment assistance, police and fire loans, rehab loans, 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

Home For Sale in West Deptford, NJ | NJ Smart Start First Time Home Buyer Mortgage

Are you a first time home buyer looking for your first place?Are you looking in the Gloucester County, NJ area but still haven't found the right place? There are many factors that make the current real estate market a great time to buy, especially for the first time home buyer. Not only is the federal tax credit available to first time buyers who close on or before November 30, 2009, but there are still many great first time home buyer financing options.

Understanding the First Time Home Buyer Smart Start Mortgage Options

NJ First Time Home Buyers have an option to utilize state mortgage funding programsto receive grants ranging from 2-4% (of the loan amount). As an example, a $100,000 loan amount would allow you to receive a grant of up to 4%, or $4,000. This grant can be used towards your required down payment and/or towards your closing costs (the fees required to be paid when purchasing a home).

Let's break this down to further understand the process of buying this home for sale in West Deptford when utilizing the NJ First Time Home Buyer Smart Start Grant option.

There are several loan types that can be used when choosing the Smart Start First Time Buyer Financing option, including Conventional, VA, FHA, and USDA mortgages. For our example we will use FHA requirements/guidelines. FHA requires a home buyer to make a 3.5% down payment. This home in West Deptford is for sale at $249,500. The 3.5% required down payment is $8,732, leaving a balance of $240,767, which will be the loan amount (Plus MIP - which we will not discuss at this moment.)

To find out what grant amount you can obtain, just multiply the loan amount of $240,767 by 4%. In our scenario, the buyer's grant would be for $9,630. This amount will satisfy the 3.5% down payment required by FHA, and will also give you extra money to put towards your closing costs. The remainder of closing costs can be paid by the buyer, the seller, or even a relative.

There are many first time home buyer options both in New Jersey and in West Deptford. All you have to do is work with a reputable, and more importantly knowledgeable, loan officer/lender.

If you have additional questions or would like to be pre-approved for a NJ Smart Start mortgage, feel free to contact Steve at 856-419-3561.

If you would like to view this property or another home for sale in West Deptford or Gloucester County, we can help you with that too.

Other Helpful Links

Understanding and Using All of Your First Time Home Buyer Options

Understanding Seller Concessions | Seller Paid Closing Costs | Seller Contributions | Seller Assist

Financing and Mortgages with a Credit Score Below 620

Why I'm Stressing Over Someone Else's Credit

---

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

• All areas concerning First-Time Home Buyer Mortgages, grants, down payment assistance, police and fire loans, rehab loans, 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

MORTGAGE OPTIONS FOR THE VILLAGES AT BERKLEY, MANTUA, NJ

Are you considering a home for sale in the Villages at Berkley located in Mantua, NJ (Gloucester County)?

The Villages at Berkley is a condo and townhome complex located off of Berkley Road in Mantua, NJ. The complex boasts a club house, pool, tennis courts and other amenities. Located in Gloucester County, NJ, there is plenty of access to local stores such as Home Depot, KMart, Staples, and ShopRite. More recently to come to Mantua is a Target and a Lowe's Home Improvement Store. With all of these local options, Mantua still has plenty of parks and walking trails such as those at Chestnut Branch Park on Main Street, which is also the location for many of Mantua's youth sports events.

MORTGAGE FINANCING OPTIONS

The Villages at Berkley has a good price range, spanning from properties below $100,000 to the larger models which have sold for over $200,000. A portion of the units are low-to-moderate income units with one or two bedrooms. Some larger models have 3 bedrooms, 2.5 baths and basements. Below is a breakdown of several financing options you can consider for purchasing a home in the Villages at Berkley.

The typical loans available for Gloucester County area are: Conventional, FHA, VA, and USDA.

Purchase price: $100,000

Loan: FHA (Required downpayment is 3.5%, or $3,500)

Tax Estimate: $140/mth

Est. Assoc. Fees: $72/mth

Est. Closing and Prepaid Items: $3,200

Est. Monthly Payment: At a 5.5% rate, the mortgage payment would be $547

Est. Total Monthly Payment (PITIA): $823/mth

**First Time Home Buyer's OPTIONAL FINANCING: One current mortgage option is to use a portion of the first time home buyer's tax credit as a down payment on  a home. Utilizing this program, known as the Tax Prefund mortgage option, a first time home buyer can receive up to $5,000 of the $8,000 tax credit currently given from the federal government. This $5,000 will be applied to the buyer's required downpayment of $3,500. With $1,500 left over from the credit, a buyer can then apply the balance ($1,500) towards their closing costs. Using this equation a buyer would have to have $1,700 of their own money to close on a purchase of this home. (A buyer can also utilize seller concessions to pay for the difference, in which case in the end, the buyer would need no money his own.)

*  -  *  -  *  -  *  -  *  -  *  -  *  -  *  -  *  -  *  -  *  -  *  - * 

 

Example #2: Home Purchase using 100% Financing (USDA) loan

Purchase price: $150,000

Loan: USDA (Required downpayment is 0%)

Tax Estimate: $216/mth

Est. Assoc. Fees: $80/mth

Est. Closing and Prepaid Items: $3,800

Est. Monthly Payment: At a 5.5% rate, the mortgage payment would be $851

Est. Total Monthly Payment (PITIA): $1,185/mth

In this scenario no downpayment is required. A buyer would still have to pay their estimated $3,800 closing costs and pre-paid items (taxes and insurance). These costs can also be negotiated to be paid by the seller. This is typically done and the time of negotiation when a buyer and seller come to terms.

*  -  *  -  *  -  *  -  *  -  *  -  *  -  *  -  *  -  *  -  *  -  *  - *

 

Example #3: Home Purchase using a Conventional loan

Purchase price: $225,000

Loan: Conventional (5% minimum required down payment - our example will use 20% down)

Tax Estimate: $349/mth

Est. Assoc. Fees: $125/mth

Est. Closing and Prepaid Items: $4,500

Est. Monthly Payment: At a 5.5% rate, the mortgage payment would be $1,022

Est. Total Monthly Payment (PITIA): $1,496/mth

*  -  *  -  *  -  *  -  *  -  *  -  *  -  *  -  *  -  *  -  *  -  *  - *

 

Above you have seen just a few examples of financing a home in the Villages at Berkley. There are many other options and ways to structure financing for a new home. Many of these options will work on other homes in the area, but all mortgage programs have guidelines that may or may not allow you to utilize them with the home you desire to purchase. Be sure to consult a mortgage professional with your particular scenario to see what options are available to you.

Other Helpful Links

Understanding and Using All of Your First Time Home Buyer Options

Understanding Seller Concessions | Seller Paid Closing Costs | Seller Contributions | Seller Assist

Financing and Mortgages with a Credit Score Below 620

Why I'm Stressing Over Someone Else's Credit

---

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

• All areas concerning First-Time Home Buyer Mortgages, grants, down payment assistance, police and fire loans, rehab loans, 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 FAQ: TIPS, GUIDES, PROGRAMS, CREDITS, GRANTS, AND MORE!

• Tax Credit Loan Program: The "Prefund" Program
• $8000 Tax Credit Information for First-Time Home Buyers
• First Time Buyer Options in South Jersey
• NJ First-Time Home Buyer Mortgages and Grants
• $8,000 FIRST TIME BUYER TAX CREDIT - CHECK RECEIVED !!!!
• Understanding and Using All of Your First Time Home Buyer Options
• Understanding Seller Concessions | Seller Paid Closing Costs | Seller Contributions | Seller Assist
• Home Buying Tips
• Financing and Mortgages with a Credit Score Below 620
• NJ First Time Home Buyer Grant Program
• 100% Financing in Gloucester County, NJ

CREDIT SCORING RESOURCE

• Credit Scoring - What Makes Up My Credit Score? (1 of 6)
• Credit Scoring - Payment History (2 of 6)
• Credit Scoring - Balances (3 of 6)
• Credit Scoring - History (4 of 6)
• Credit Scoring - Mix of Accounts (5 of 6)
• Credit Scoring - Inquiries (6 of 6) 
• Why I'm Stressing Over Someone Else's Credit

OTHER RESOURCES

• Energy Efficient Credits and Helpful Energy Links
• Non-Occupant Co-Borrowers....How Knowing the Rules Can Help You Obtain a Home Now!!!

For additional information and questions regarding first time home buyer options, mortgages, grants, or any other mortgage or real estate related questions, feel free to contact Steve Kappre below. With years of local service as a local first time home buyer specialist, you can have all of your needs met with just one phone call.

---

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

• All areas concerning First-Time Home Buyer Mortgages, grants, down payment assistance, police and fire loans, rehab loans, 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

Here is an article by one of my peers regarding the 203k FHA Rehab loan. This is a great program that in my opinion is under-utilized considering our counrty's current foreclosure/short sale sitation. This loan allows you to purchase a home and repair it all in one loan. Read below for more info!

With all the excitement of the first time home buyer tax credit, buyers often get confused and miss out on other important options.

As a first time buyer, don't let the excitement of the $8,000 tax credit cause you to miss out on many other home buying options. It isn't uncommon for a buyer to confuse the federal tax credit with seller credits, down payment assistance, or first time home buyer grants.

First time home buyers have many options.  Utilizing one option does not hold a buyer back from utilizing one or more other options allowed to them as a first time home buyer. This article is written not to go into great depth on each option, but to help you realize the different options available as a first time home buyer and how to utilize each/all of these options.

Read on to understand some common terms and how to take advantage of each option.

Tax Credit

The federal tax credit is the (up to) $8,000 incentive that everyone is talking about. Most home buyers that haven't owned a home in the last 3 years will qualify for this. In general, this credit is realized as a credit for you when you complete your taxes in the spring of 2009 (for 2008's income).

For example, if you would have normally received $2,000 back after completing your 2009 tax returns, the tax credit would add an additional $8,000, to make your total amount received $10,000. For additional information and guidelines, go directly to First-Time Home Buyer Credit: Answers.

Seller Credit (Seller Concessions)

A seller credit, better known as seller concessions, is a scenario when the seller agrees to pay a certain amount of your settlement costs. The seller may pay a percentage, such as 2, 3, or 6% of the purchase price, or they may pay a dollar amount, such as $2,500 or $5,000.

For more information on understanding seller concessions visit Understanding Seller Concessions | Seller Paid Closing Costs | Seller Contributions | Seller Assist.

Grants for First Time Home Buyers

Many people miss out on first time home buyer grant options. Once a buyer hears about the $8,000 tax credit, they sometimes go deaf to other options, either out of excitement or because they don't realize they can utilize more than one option.

A grant is a program often issued by a county or state that offers funds to the home buyer for the purchase of a home. Either a flat dollar amount or a percentage of the loan amount is used to calculate the funds offered. A typical grant percentage would be 2, 3, or 4% of the loan amount. For instance, 4% of a loan amount of $100,000 would give you a $4,000 grant.

Grants can be utilized for down payment requirements and/or to pay for closing costs. Depending on the purchase price and the grant selected, a grant can sometimes even cover all requirements the buyer has concerning both the down payment requirement and closing costs.

Down Payment Assistance

As of the date of this article, down payment assistance in the traditional sense is not available.Down payment assistance programs (DAPs) were an option where the seller would indirectly give a buyer the money needed for down payment requirements. These transactions in general had a higher default rate then most, therefore this option is no longer available. Examples were the Nehemiah program or the Genesis program. There is a movement to reinstate these programs. The mentioning of DAPs here is simply to help you differentiate and not confuse them with other options.

How to Utilize More Than One First-Time Home Buyer Option

Here's where the rubber meets the road. A common example of utilizing all of the above options is as follows:

1. Buyer meets with grant official or loan officer for qualification requirements pertaining to a specific grant option. In our example the buyer will use an FHA mortgage, which requires a 3.5% (of the purchase price) down payment. The purchase price is $100,000, therefore the down payment requirement for this would be $3,500.
2. Loan officer and buyer determine that the use of a 4% grant would be the wisest choice. Since the down payment requirement is $3,500, the financed amount will be $96,500 ($100,000 - $3,500). Based off of $96,500, a 4% grant would be $3,860 (loan amount x 4%, or $96,500 x .04)). Compare the grant amount with the buyer's down payment requirement of $3,500, and the grant amount is $360 more than the required down payment amount. This type of grant covers the down payment requirements and some additional funds to be applied towards the closing costs.
3. Assuming closing costs are $5,000, here is how you can determine what to request from the seller to get the closing costs paid as well. We can subtract the extra money left over from the grant, in this case $360, from $5,000. Our sum is $4,640. FHA requirements allow the seller to pay up to 6% of the buyer's closing costs. We don't need all 6% (or $6,000), we only need $4,640 from the seller. So when the purchase of the home is negotiated, the buyer's agent negotiates with the seller's agent that the seller will agree to pay $4,640 towards the buyers settlement fees/closing costs.
4. Buyer goes to settlement needing $0 to close, and in fact they will get back the money already deposited with the real estate agent and lender.
5. Lastly, the buyer can still maximize the use of the federal tax credit and receive their $8,000 after filing their 2009 tax returns.

All-in-all, in our scenario the home buyer will receive $16,500 for purchasing a home ($3,860 grant + $4,640 seller's concessions + $8,000 tax credit).  The buyer is able to utilize three separate home buying options and in the end, still have their own money in the bank, which will then get boosted in several months by the $8,000 tax credit. Now THAT is the kind of lending and buyer representation that creates solid, well founded home owners, which is exactly what we all desire.

By working with knowledgeable professionals, you can utilize multiple buyer options to make your home buying experience an amazing event!

 

If you would like more information, as a buyer, seller, real estate agent, real estate office, financial planner, college or other party, feel free to contact Steve Kappre directly on his cell at 856-419-3561 or via e-mail at steve@stevekappre.com.

 

---

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

• All areas concerning First-Time Home Buyer Mortgages, grants, down payment assistance, police and fire loans, rehab loans, 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

About 40 minutes left!!!! Shane Victorino needs your vote to go to the All-stars!!!!

We got this shirt in Hawaii last summer. Shane's dad was running for county council. If you see a girl wearing it tonight at the game, right above the team's dug-out, that's my eldest daughter. We are hoping she will get on TV, we can DVR it, and that maybe Shane will sign it for her.

I'll be at the game too. About 50 rows up, haha.

Let's start the chant ... "Shane, Shane, Shane ..."

Here's the link to vote .....

VOTE NOW: Cast your All-Star Final Vote

 

---

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

• All areas concerning First-Time Home Buyer Mortgages, grants, down payment assistance, police and fire loans, rehab loans, 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

Having the seller pay some or all of your closing costs is common. Some buyers and their real estate agents have a hard time structuring these type of transactions. Below are FAQ's to help you understand the structuring needed for a purchase with seller concessions.

Clarifying Terms

When talking about this topic there will be many phrases thrown around that basically mean the same thing; seller concessions, seller paid closing costs, seller assistance, seller contributions, and more. For our purposes we will use the term seller concessions.

How much can I ask for in seller concessions?

Typically on conventional loans the most a buyer receives in seller concessions is 3% (On a $100,000 purchase, $3,000). Making a larger down payment can raise the amount of concessions allowed from 3% to 6% or even 9%. However you rarely see these high concession amounts because if a buyer is putting, for instance, 25% down on a home, they don't have the seller pay concessions for them. Not only that, but if you need 9% in concessions, something is usually wrong with your financing.

On FHA loans, you can receive up to 6% in concessions. (On $100,000 purchase price, $6,000) Typically the lower the purchase price the higher percentage of seller concessions you will need. It is not typical to have a $300,000 purchase price and need $18,000 in seller concessions. It is much more typical to see, for instance, a $60,000 purchase price and have $3,600 in concessions.

On USDA loans, there is no limit to the allowable seller concessions, other then it has to make sense. A buyer would not typically need a percentage of seller contributions over about 4-5%. There are some examples below of reasons why a high percentage of concessions would be needed.

How do I calculate the seller concessions?

Simply take the purchase price, and multiply it by the percent allowed for the type of loan. For example, a $100,000 purchase price with 3% concessions is $3,000, and 6% concessions is $6,000, etc. On a calculator, you would multiply 100,000 x .03 or .06 respectively.

What can seller concessions cover?

Seller concessions can cover your closing costs which may include mortgage related fees, title company fees, the set-up of an escrow account, your home owner's insurance costs, state taxes or stamps, and more. Many, but not all, home owner's insurance companies will allow you to pay the policy premium at settlement. If that is important to you find out upfront. Seller concessions CAN NOT be used for a down payment.

What is NOT Seller Concessions?

Grants are not seller concessions. Down-payment assistance programs are not seller concessions either.

For first time home buyers, a lender and real estate agent that work together closely can structure an offer to purchase a home where you can utilize both a grant to pay for all of your required downpayment, and seller concessions to cover all of your closing costs. It is not rocket science. You simply have to work with people that know what they are doing.

It is important for your lender and your real estate agent to convey approval terms BEFORE making an offer on a home. Any real estate agent worth your time would have a buyer pre-approved before submitting offers on a home. This being said, it is important that your real estate agent not only knows how much you can afford, but also the terms and conditions of your approval. Some pre-approvals are contingent on seller concessions and/or grants. This needs to be communicated to all parties up-front.

Am I paying more for a home if I use seller concessions?

Some people may look at their purchase of a home in this way; (Using round figures) I can pay $190,000 for a home and pay my own settlement costs of $10,000 I can pay $200,000 for a home and have the seller pay $10,000 of my settlement costs. Viewed this way you are actually financing the costs. You pay interest on $10,000 more, BUT you get to keep $10,000 in your pocket, which more importantly you can keep for a safety net (and earn interest from yourself).

SIDE NOTE: This aspect can not be over-emphasized. If your lender thinks it is "OK" to put you in a home where you have literally a few hundreds dollars in the bank after settlement, you both are setting up for a VERY RISKY situation and one which could go into default very quickly. It is unwise to purchase a home and immediately be poor. It would do all home buyers well to consider this before purchasing a home. Hopefully you will have a lender or real estate agent who would care more about you in this sense then than just getting another paycheck, but don't assume that.

Ways to utilize seller concessions for your benefit

• Have some or all of your closing costs paid by the seller.
• As a first time home buyer utilize both a grant and seller concessions to cover your closing costs and down payment requirements.
• Create a financially safe environment by keeping more money in your pocket after settlement. This aspect is overlooked too often yet is very important to you as a home owner.
• Have the seller pay points for you. This will make your monthly mortgage payment lower by giving you a lower interest rate.  In some cases this can be the deciding factor on if you qualify to buy a home. This will also lower your debt-to-income ratio, which is one of the major factors a lender looks at when approving a loan.
• Avoid private mortgage insurance (PMI). If you are a buyer that has the assets available to make a 20% down payment, but not enough assets to pay closing costs, then have the seller pay your closing costs. This will bring you to the 80% loan-to-value level and allow you to eliminate PMI. (NOTE: This is all negotiated when you make your offer on a home and agree to terms).

Conclusion

Seller concessions are an important part of home financing. Used correctly, seller concessions can save a buyer money, allow more financing options, and create a financially safe environment. Consider these important aspects prior to making an offer on a home and you will be much better off, both at settlement and in the long term.

If you have any questions about seller concessions or any other mortgage/real estate topic(s), feel free to contact Steve Kappre directly.

 

---

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

• All areas concerning First-Time Home Buyer Mortgages, grants, down payment assistance, police and fire loans, rehab loans, 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

Wishing everyone a happy and safe Fourth of July. May we NEVER forget the reason we celebrate this holiday and the many souls that gave their lives, and those that still do, for our freedom.

My heart-felt appreciation and thanks go out to those men and women that risked it all. May you never be forgotten in our hearts and by our actions.

God Bless You All

---

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

• All areas concerning First-Time Home Buyer Mortgages, grants, down payment assistance, police and fire loans, rehab loans, 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