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How Veterans Of A Military Branch Can Buy Homes With No Money Down

June 6, 2011 by Leave a Comment

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Veterans of the military are entitled to a variety of well-deserved benefits. Realtor® Dave diCecco of Charlotte, North Carolina shares his experience of working with veterans and advising them of potential real estate opportunities:

Today I had the opportunity to talk to a young buying couple about the possibility of owning their first home. We talked and had discussed some options available to them. One of the things we talked about was financing. Which lead me to the question: ”have you ever served in the military for our country?”

Being a military veteran myself I realize that one of the greatest benefits I received when I got out was to be able to purchase a home through the Veterans Administration (or more commonly known as the VA) with no money down. Yes, a benefit our servicemen and women receive for serving our country is that the government will guarantee the loan with no money down.

You still have to qualify for the mortgage as you would any other program. In addition, the debt to income ratios still have to be in line for the house you want to buy. However; if you can qualify for a mortgage and are a veteran of a military branch honorably discharged you may qualify for a VA mortgage.

Unlike other programs that have restrictions on where you can buy and what type of house you can purchase the VA does not care. If the house qualifies for a mortgage and passes the inspection and appraisal process with approved credit they will loan you the money.

I closed one recently where we got the seller to pay closing costs and the buyer had to come to the table with $13.00 to close. Yes, that is not a misprint a total of $13.00 and he owned a house (with the bank).

if you are looking to buy a house and are a veteran of the military you have served your country and this is just one way the government helps us out.

Click here to read more blog posts by Dave diCecco.

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Buyers and Sellers Should Lay Cards on the Table

April 3, 2011 by Leave a Comment

ForSaleSold wide Buyers and Sellers Should Lay Cards on the Table

When a buyer or seller is not completely honest with their Realtor, it can be a bad deal for everyone involved says Birmingham, Alabama Realtor® Charita Cadenhead.

“That’s right.  All you have to do is be upfront and truthfully provide all of the information that your real estate agent requests so that we’ll be in a better position to negotiate on your behalf.  Just think of it as a card game.  The good news is that there is no bias in this game. The rules apply to both buyers and sellers so don’t feel like you’re being picked on.

Here’s a tip you’ll want to be sure to use: Your lender will want you to play the same game. You see when you fill out that mortgage application and state that your earned income is $3000 per month, they’ll be expecting you to be able to back that up when they start to investigate it.  They’ll want to contact your employer’s Human Resources department so forget about getting your best friend Sally to pretend like you’ve worked for her and that she can verify your income.

I once had a client who had been estranged from her husband for years. She had not seen or talked to him in years.  I’ll tell you what else she hadn’t done: divorced him. Yep, the truth all came out when the title was pulled.

And poor sellers. So many of you are under water on your mortgages and want to sell. But if you contact us (real estate agents), we’ll want to know that little tidbit of information upfront. You see we’ll be in a better position to guide you if we know you’re behind on your mortgage. Knowing that little bit of information sets us on an entirely different course and being that time is of the essence, we don’t want to waste it by taking action that will work against you.

I have not even tapped the surface of the setbacks caused by withholding information. While you might think that you are helping yourself, you are actually hurting yourself when you don’t put all of your cards on the table.

So from here on in, let’s make a deal. You put all of your cards on the table and I’ll play the hand I’m dealt and use that to heighten your chances of coming out a winner. There are no guarantees, but the odds sure will be in your favor…”

Click here to read more blog posts by Charita Cadenhead.

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What an “Arms Length Transaction” REALLY Means

March 3, 2011 by Leave a Comment

MortgageSeesaw wide What an Arms Length Transaction REALLY Means

Recently, Walnut Creek, California Realtor® Terrylynn Fisher got a question from a woman who wanted to know if she could short sell her home and have a friend buy it at the lower price so that she could get a new loan for a lot less and then live there and/or buy it back later. Here is what Terrylynn advised this potential client.

“When you think about trying to have the seller stay in the home as a tenant, buy it back from a family member who might be able to afford the short sale reduced price, etc. it might seem benign enough to you. There is likely to be a form in the final paperwork, required to be signed by buyer, seller and agents that is called “Affidavit of Arms Length Transaction.”What does ”Arms Length Transaction” mean?  Here is the language…taken from a transaction and a requirement of closing. 

Affidavit of “Arms Length Transaction”

All parties to this contract hereby affirm that this is an “Arms length transaction.”

No party to this contract is a family member, business associate, or shares a business interest  with the mortgagee (you, seller, homeowner, anyone whose name is on the loan). Further, there are no hidden terms or special understandings between the buyer or seller or their agents or Mortgagee.(Like money, kickbacks, gifts and/or arrangements to move back in or stay in the property in any capacity including putting your kids names on the lease.)

The buyers and sellers nor their Agents have any agreements written or implied (spoken or hinted, a wink or a promise) that will allow the Seller to remain in the property as renters (you must move, your whole family must move, you must move everything and not move back, Eever) or regain ownership of said property (you cannot buy it back later from whomever purchases it, go on title and/or live there ever), at any time after execution of this short sale transaction.  None of the parties shall receive any proceeds from this transaction except the sales commission. (Buyers cannot receive credits, kickbacks or any funds from any party to the transaction unless written in as part of the contract, and approved by the short sale lender in their condition letter. Sellers cannot receive credits, kickbacks or any funds, gifts, gift cards, or any funds from any party to the transaction unless approved by the lender in writing as part of the contract and short sale lender condition letter, no matter what).

You will then be asked to sign and affirm this “Arms Length Transaction” Affidavit.  Putting your name on it says that you understand and agree that you are acting in good faith and do not intend to do any of the things that it states you will not do.  So, don’t.

Anything outside of this agreement is considered lender fraud.  It is not worth it.  If you have a legitimate short sale and your lender has approved a kinder, gentler solution to minimize impact to your family and your credit, it’s time to move on.  There is life after a short sale (or foreclosure) and a clean break and moving forward is in order for your well being, your family and for those of us whose tax dollars are going to bail out the lending institutions and make up some of these losses…” Click here to read the rest of Terrylynn Fisher’s blog post.

 

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How FHA Appraisal Affects Your Home Sale

January 25, 2011 by Leave a Comment

Real Estate Crossword wide How FHA Appraisal Affects Your Home Sale

by Kevin Rhodes, Guest Writer

“I have noticed that when clients are selecting a Realtor® to work with, they never give thought to the appraisal process of the transaction that lies ahead. I challenge those people to change their mindset as in today’s tight lending market, the appraisal is a MAJOR source of a deal potentially falling apart.

When a buyer is contracted on a house, and he or she is using an FHA loan, whatever the appraisal comes in at will stick with the property for 6 MONTHS! What does this mean to the Buyer and Seller? It means something VERY important!

Let’s assume the house appraises for less that the contracted price. Typically speaking, the lender will only loan up to the appraised value of the home, so this is a large problem for both parties. Usually the options are that the seller must reduce his or her price to the appraised value. Or the buyer needs to come up with the difference in cash.  Another option is to meet somewhere in the middle.

As a Seller, this dilemma is very serious. If after reviewing the appraisal, you and your agent feel that the appraiser missed something or his report is in error, you can appeal the appraisal and hope for a fix. However, this can take a lot of time away from your transaction. If you choose not to appeal the appraisal or you determine that the appraisal is correct, then it is in your best interest to try all efforts to make the deal you have in your hands work. I say this because if you allow the deal to crumble with this buyer, for the next 6 MONTHS, any buyer that comes along that tries to buy your house on an FHA loan is required to use the appraisal that has already been done. So essentially, you are somewhat stuck, thus it would be worth your while to try everything to make deal #1 work.

I have one very proactive step that I do for all of my listing clients in an effort to avoid any appraisal issues. First I require the appraiser to schedule his appraisal appointment through me (the listing agent). Secondly, I will prepare a package for the appraiser that includes very strong comps to help support our contract price.  I will also point out unique features of the home that the appraiser might otherwise miss.  I leave this packet either on the front porch or just inside the house.  I want it to smack him in the face to where he has to pick it up!  I make sure to let the appraiser know that “I thought these neighborhood comps might aid you in your appraisal process.” So far I am batting 1000 and I have not lost an appraisal yet. However, I know it’s not a matter of if I will lose one, it’s just a matter of when.

For the buyer, if the appraisal comes in below the contract price, this is a great advantage for you. In today’s buyers market, very few buyers are paying over the appraised value of a home. I wouldn’t either. This is primarily because no one knows which direction property values are going to go in 2001 and beyond. What buyer would want to buy a house that appraised for $500,000, and then two years later have it worth $410,000? No one would. So if an appraisal comes in below your contract price, hold firm and do anything you can to get the seller to come down to the appraised price.”

 

Kevin Rhodes is a Realtor with Keller Williams in Dallas, TX.

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Fannie Mae News on “Walkaway Borrowers”

December 30, 2010 by Leave a Comment

foreclosuredr wide Fannie Mae News on Walkaway Borrowers

Fremont, California REALTOR® Brian Ripp cautions that borrowers who consider walking away from their mortgages have yet another reason to think twice. 

“Fannie Mae has implemented a new policy that penalizes borrowers who walk away even though they had the ability to pay, or who did not complete a workout arrangement.  Such borrowers now will be ineligible to obtain a Fannie Mae-backed mortgage loan for seven years. 

However, borrowers who experience extenuating circumstances may be eligible for a new mortgage loan within two to three years, depending on the situation.

Fannie Mae is also considering legal action to recoup the outstanding mortgage debt from borrowers who strategically default on their loans in jurisdictions that allow for deficiency judgments.  The company plans to instruct its servicers to monitor delinquent loans facing foreclosure and recommend cases that might warrant the pursuit of deficiency judgments…”

Click here to read more posts by Brian Ripp.

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