Gloucester County, NJ Real Estate

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

Mon, 06 Jul 2009 13:52:57 -0500

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

Zero Down Mortgage Loans for Cape May County, NJ

Sun, 22 Nov 2009 18:25:22 -0600

Zero Down Mortgage Loans in Cape May County, NJ

Although many 100% financing options have recently been taken away from the home buyer's mortgage options, one of the best zero down mortgages ever is still around and going strong; The USDA mortgage program.

Not only does this 100% mortgage require no down payment, but the seller can pay all of the buyer's closing costs, which will allow a home buyer to get into a home with very little money out of pocket.

This 100% financing program is a 30-year fixed loan that has no monthly mortgage insurance. You do not have to put 20% down to avoid that expensive mortgage insurance with this loan. And interest rates for the USDA mortgage program are comparable to FHA or conventional mortgages.

There are a few limitations; The location of the home you are buying will have to be in an eligible area. If you are buying a home in Cape May County, NJ, many of the locations within the county are approved for 100% financing. (see map - lighter area).

A USDA mortgage is also income restricted, however it does have fairly high income limitations, and the majority of home buyers will find that they qualify.

If a USDA loan does not work for your particular situation, there are other options including first time home buyer grants and assistance programs (both state and county programs), FHA/VA loans, FHA 203K Renovation / Purchase loans and other options. For more information, to be pre-approved, or to have any questions answered, contact Steve Kappre (below).

See also some other counties offering 100% Financing:

100% Mortgage Financing in Cumberland County, NJ

100% Financing in Salem County, NJ

100% Mortgage Financing in Gloucester County, NJ | USDA

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% of the home's value
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

FHA 203K Streamline Renovation/Purchase

Thu, 19 Nov 2009 16:26:18 -0600

Are you a home buyer looking at homes in New Jersey? Have you found the right property, at the right price, and the right location, but it needs A LOT of work? Enter the 203k renovation loan. This loan can be used for both the purchase or refinance of a home. Check out the information below from my friend Ken, and if you have any questions, don't hesitate to call. I'd be happy to help and explain.

Quick note: For repair of luxury items or for renovations above $35,000 we can do these too, just call.

Via Ken Cook, FHA Home Loans 678-439-8683:

So you or your client have found a home in a great area in the client's price range. Only one problem: it's in bad shape. The HVAC system is 50 years old, the roof is 40 years old and the windows may as well not even be closed. Plus the kitchen has vinyl floors in 3 different patterns and the counters are all laminate with burns and holes and scars.

Not to fear! Meet the FHA 203K Streamlined renovation loan.

Eligible Improvements Virtually any kind of improvement is eligible provided it becomes a permanent part of the real property and adds value.

Additions to the structure

Kitchen or bath remodels

Finished basement or attic

Patios, decks or terraces

Roofing and landscaping

Safety, energy efficiency and electrical upgrades

Handicapped accessibility improvements

Luxuryitems are not eligible

Swimming pools, hot tubs, tennis courts, gazebos, barbecue pits, saunas or alterations to support commercial use

The maximum loan amount must be within the FHA loan amount maximum for the MSA where the home is located and must include the purchase price and the renovation amount. The maximum renovation amount is $35,000 and the minimum is $5,000. Under $5,000 we can do with an escrow of repair funds. A minimum of 10% contingency reserve is required and must also fit into the FHA loan maximums for the area where the property is located. (Any balance remaining on the contingency will be applied to the principal balance and may not be used for additional repairs.)

Yes, it takes a little longer to close an FHA203k Streamline loan than it does to close a standard FHA loan. If you are an agent and you are concerned about that extra couple of weeks just think of it this way: You may make a sale you would not have otherwise made. You may help a buyer get into a home in the area where they wanted to live instead of where they "had" to live. You can be a real hero for someone.

If you are in Georgia I can help you with the necessary paperwork and give you a short class in how to use the FHA 203K Streamline Rehab loan to purchase, sell or represent homes in today's economy. Never hesitate to call me at any time and I'll be happy to answer your questions.

Ken Cook - Georgia - FHA, USDA, VA and Conventional Home Loans (678) 439-8683

Gloucester County, NJ Concerts at the Library

Mon, 16 Nov 2009 20:30:57 -0600

Come On Out for the Saturday Night Concert Series at the Gloucester County, NJ Library

The Gloucester County Library is putting the word out for their 8^th season of Saturday Night Concerts. The concerts are free and no reservations are required. All concerts are held at the Main Branch of the Gloucester County Library in Mullica Hill (389 Wolfert Station Road (Route 45 located close to Route 322 (See map/directions below)).

The concerts being at 7:00 PM (doors open at 6:30). Check out the concert series list below!

December 5 - The Seacoast Brass Quintet performing classical and seasonal music

(No Concert in January due to the holiday weekend)

February 6 - Jazz vocalist Katie Eagleson

March 6 - The Homegrown String Band - American folk and traditional music

April 3 - The Copeland String Quartet - classical music

May 1 - The Midiri Brothers Jazz Sextet

Steve Kappre is a Mortgage Advisor with Treasury Mortgage, a subsidiary of Aurora Financial Group. For more information 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% of the home's value
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

Cleaning for a Reason-Chemo recipients FREE Service

Fri, 13 Nov 2009 13:23:29 -0600

This is a great service I never knew was available. I checked the Gloucester County, NJ area and there are some local businesses that are on board with this great free service. Share this with anyone you can! ~ Steve

Via Jane Cross (Homes By Cross, inc.):

If you know any woman currently undergoing Chemo, please pass
the word to her that there is a cleaning service that provides FREE
housecleaning - 1 time per month for 4 months while she is in treatment.

All she has to do is sign up and have her doctor fax a note confirming the treatment. Cleaning for a Reason will have a participating maid service in her zip code area arrange for the service. http://www.cleaningforareason.org

Please pass this information on to bless a woman going through Breast Cancer treatment. This organization serves the entire USA and currently has 547 partners to help these women. It's our job to pass the word and let them know that there are people out there that care. Be a blessing to someone and pass this information along.
Jane Francis Cross 704-608-0228
Broker/Owner Homes by Cross
Serving Charlotte NC Real Estate and Relocation Needs since 1994.

A full service brokerage covering South Charlotte real estate, Ardrey, Ballantyne, Fort Mill, Huntersville, Indian Land, Lake Norman, Lake Wylie, Marvin, Matthews, Mint Hill , Pineville, Stallings, Uptown Charlotte, Waxhaw, Weddington, Wesley Chapel homes for sale.

The East Greenwich, NJ Crawfish

Wed, 11 Nov 2009 08:48:09 -0600

I am not sure how long these guys have been here, but one thing is for sure; They seem to be doing VERY well.

When we first moved to Mickelton, NJ (East Greenwich Twp), we soon took notice of the large lobster-like creatures swimming below the bridge. I'd have to say we were all rather amazed at their size.

From my fishing days when I was younger, I remember crayfish/crawfish being much smaller. These ones must have been feasting on the "Best in the world Jersey Tomatoes"!

This isn't the first time we have seen these guys, but the pictures here are from outside the front of our house, in a development, in the street. This guy either crawled up from the sewer or he walked a really long way from the nearest water!

I'll be putting him back in a safe spot. Maybe he will return in the spring.

Steve Kappre is a Mortgage Advisor with Treasury Mortgage, a subsidiary of Aurora Financial Group. For more information 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% of the home's value
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

100% Financing in Salem County, NJ

Tue, 10 Nov 2009 21:52:08 -0600

100% Financing in Salem County, NJ

Are you looking to purchase a home in South Jersey? One of the best mortgage programs available today is the USDA mortgage program. This mortgage loan is still somewhat unknown despite its popularity in this current market. A USDA mortgage allows a home buyer to purchase a home with zero money down. Not only is there no required down payment, but the seller can pay all of the buyers closing costs, which will allow a home buyer to get into a home with very little out of pocket.

A USDA mortgage is a 30-year fixed loan that has no monthly mortgage insurance. Interest rates for the USDA mortgage program are comparable to FHA or conventional mortgages. There are a few limitations; The location of the home you are buying will have to be in an eligible area. If you are buying a home in Salem County, NJ it is already in a designated USDA area.

A USDA mortgage is income restricted, however it does have fairly high income limitations, and the majority of home buyers will find that they qualify for this option.

If a USDA loan will not work for your particular situation, there are other options including first time home buyer grants and assistance programs (both state and county programs), FHA loans, and other options. For more information, to be pre-approved, or to have any questions answered, contact Steve Kappre (below).

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% of the home's value
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

100% Mortgage Financing in Gloucester County, NJ | USDA

Sun, 08 Nov 2009 21:36:52 -0600

100% Mortgage Financing in Gloucester County, NJ | USDA

Whether you are a first time home buyer in Gloucester County, NJ or a move-up home buyer, one of the best mortgage programs going right now is the USDA loan option that allows 100% financing. Unlike many of the risky loans that were available several years ago, this 100% financing loan is a 30-year fixed loan that has no monthly mortgage insurance cost.

Interest rates for this USDA mortgage program are comparable to FHA or conventional mortgages. The location of the home you are buying will have to be in an eligible area. Roughly half of Gloucester County, NJ is available for 100% financing (All of Salem County, NJ is eligible).

This mortgage option is income restricted, but has very flexible (high) limitations, and the majority of home buyers will find that they qualify for this option. For more information, to be pre-approved, or to have any questions answered, contact Steve Kappre.

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% of the home's value
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

Holiday Craft Show - East Greenwich, NJ

Fri, 06 Nov 2009 21:26:44 -0600

Holiday Craft Show

Originals for sale by community artists

Mickleton (East Greenwich), NJ

Saturday ~ November 7, 2009

900am - 400pm

Location: The Little Red School House, located on Harmony Road, just off of King's Highway

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% of the home's value
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

Using Your Blog to Educate Both the Public and Professionals

Wed, 28 Oct 2009 17:40:45 -0500

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):

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)

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!

Wed, 28 Oct 2009 11:49:57 -0500

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).

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

Open Letter to First Time Home Buyers

Thu, 06 Aug 2009 09:53:50 -0500

Just a reminder to you potential first time buyers considering taking advantage of the $8,000 tax credit ... time is runing out. You must settle before December 1st (so you must settle on November 30th or before). Now lets be realistic. I've closed loans in 2 weeks from start to finish - but as pointed out below, you should allow AT LEAST 45 days to settle since there are too many variables - home repairs take time, appraisals can take time, and this isn't considering the TIME IT TAKES to FIND a home and agree to terms.

Via Erik Hitzelberger, --Louisville-Bullitt County Real Estate (RE/MAX Alliance - Louisville REALTOR-Luxury Homes):

Dear Procrastinating First Time Home Buyers:

I know you. I've seen you in the mall on December 23rd. I've watched you race through town en route to the airport; screeching up to the terminal just in time to prevent your mom from giving up and getting in the cab. I even saw you run over the neighbor's cat on your way to the post office on April 15th. (Actually, disregard that last one. I'm sure it was just a large stick). You excel when the stakes are high. You thrive on knowing you'll succeed where mere mortals would stumble. Your methods are a bit unorthodox, but you always come through at the buzzer. In most circles, I would be you.

The significant difference here is that I own a house. For better or worse, I don't have a stake in the $8000 tax credit game. You do though. You have the opportunity to change your life for the better and you plan to do so. Tomorrow.

My only concern is that tomorrow may not be when you think it is. By now, you know the tax credit expires December 1st. As this is month's away, I'm sure you've given little thought to actually looking for a house. There are far more pressing deadlines to be dealt with. I know you are busy, so I won't take up much more of your time. But, you need to know...

December 1st is the wrong date.

To be eligible for the credit, you have to take possession by December 1st. When everything was working well, it took around 30 days to close a loan. These days, things don't work well very often and it's not going to get better once you and your brethren leave the couch. Underwriters are scarce and banks aren't about to staff up for the onslaught knowing there is a going to be a huge void immediately afterwards. It will take at least 45 days to close. With that in mind,

October 16th is the real drop-dead date.

Reset your internal clock.

NOW!!
You'll Miss the $8000 Tax Credit After

I'd tell you to start now, so you can take advantage of the best deals, but it would be a waste of breath. So, I'll just say,"Call me when you are ready."

Sincerely,

Erik

* * * * *

Erik Hitzelberger is a licensed REALTOR with RE/MAX Alliance in Louisville. If you need a Louisville Real Estate agent please email me or call 502.921.3989.

I specialize in the following areas of the Metro Louisville Area: Prospect, Middletown, Jeffersontown (J-Town), Fern Creek, Okolona, Shepherdsville, Mt Washington, Hillview, Brooks and Pewee Valley. Click the following links to learn more about Louisville and Bullitt County Real Estate or to Search for Louisville Homes

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Speachless Sundays: Sunny Soccer Saturdays

Sun, 25 Oct 2009 22:03:49 -0500

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 Costs While Using a First Time Home Buyer Mortgage Program to Cover Your Down Payment

Wed, 21 Oct 2009 20:40:17 -0500

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.

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

FHA Loans Need Appraisals, Not Inspections

Tue, 13 Oct 2009 12:45:19 -0500

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.

Via Minneapolis Home Inspections - Reuben Saltzman (Structure Tech Home Inspections):

I get a lot of questions about FHA Inspections, and it's about time I sat down and blogged about it. Here are the most common questions I get asked about standard FHA loans. This information does not apply to FHA 203(k) Loans.

Can You Do The FHA Inspection? FHA loans do not require a home inspection, they require an appraisal. The appraiser does this. These are often mistaken for an inspection. Home inspections are still strongly encouraged.

How Can I Pass The FHA Inspection? First, see above. FHA appraisals require the appraiser to look for obvious defects with the house, but the appraiser never requires repair of these items - the underwriter does. Trying to figure out exactly what might require repair is a bit of a guessing game, and often has much more to do with the people doing the appraisal and the underwriting than it does the property itself. Nevertheless, here is a partial list of some common defects that get flagged:

Chipping / Peeling / Flaking Paint

Rotting wood

Electrical outlets or switches that are defective

Plumbing leaks

Non-functional heating plant or AC

Roofs with less than two years of life left

Missing or badly damaged floor coverings

Obvious structural problems

Do I Need A Home Inspection If I'm Getting An FHA Inspection? Again, see above. FHA appraisals are not home inspections, and it's unfortunate that they get confused as such. The FHA appraisal has nothing to do with a home inspection.

Do I Need An FHA Certified Inspector If I'm Getting An FHA Loan? No. The home inspection is completely independent of the FHA loan.

Reuben Saltzman, Structure Tech Home Inspections - Email - Minnesota Home Inspector