About to be a homeowner?
New homeowners and soon to be homeowners face of a lot of decisions and it can be difficult to sift through all the information to learn what is most important. Are you are about to be a first time home buyer, thinking about buying a new house to upsize, downsize, or be closer to work, or maybe just considering refinancing your home to get some better mortgage payments or get cash out.
Throughout the process of learning what you need to know you will learn all about interest rates, what to look for in a house, real estate commissions, loan points, mortgage terms, PITI (Principle, Interest, Taxes, and Insurance), etc. We even have comprehensive workshops that cover all the most important points and would love to see you at our next seminar. You can learn more and sign up for that HERE.
However, there are some lesser-known pitfalls and points of information that are extremely important, and we want you to have this information as well. Here we will talk about some of the things you won’t normally hear from your real estate agent or mortgage lender. If you have any other questions or want to learn more about being a homeowner, we are here to help you. You can contact us HERE.
Getting Back In The Ring After Bankruptcy
In the state of Florida, one in ten people filed bankruptcy over the past 5 years. Many of whom are ready to get out of the unbelievably high priced renter’s market and move into home-ownership. But what about that bankruptcy? How will that affect your chances of getting approved?
According to Teresa Fink of American Dream Home Mortgage, conventional underwriting has the standard waiting periods:
“With a Chapter 7 or Chapter 11 bankruptcy, a 4-year waiting period is required from the discharge or dismissal date. If extenuating circumstances are documented, it could be a 2 years. A Chapter 13 bankruptcy requires 2 years from the discharge date or 4 years from the dismissal date.”
If you think you are ready to put the gloves back on and get in the ring for another round, the first step is to understand the foe in the other corner, arming yourself with the right technique, and to of course…
Don’t Let Your Home Be the Amityville House
The process of buying a home should not be rushed. This is where you will protect your family, watch your children grow, and cut all the grass. There are a lot of factors to think about. One of the first factors in buying a home should be the cost- not only the purchase price, but the maintenance price. Houses break- the roof, the pipes, the concrete- and as the owner (vs the renter) the burden is on you financially to fix it.
The best way to circumvent costs is to be able to predict repair and maintenance costs with an inspection BEFORE you buy the home. A good inspector can anticipate the need for a new roof or air handler, recognize signs of flooding, and other extremely costly dangers looming in that house hidden from the eyes of an eager buyer. Also, a “Wind Mitigation” inspection could save you hundreds of dollars a year on your insurance costs and help prevent costly damage to your home during future storms. Be warned, your realtor may advise against a home inspection. They don’t want you to see evidence in a home that could prevent them from getting the sale. Take our advice in this- not theirs.
If you would like to learn more about getting a home inspection on a pending purchase or curtailing the cost of insurance on your current home, reach out to our preferred provider, Get the Facts Home Inspection: http://getthefactshomeinspection.com/.
Making the Moooove to Home Ownership- Consider USDA
When getting a loan for a home, there are several options. One of those options is a USDA loan. USDA loans are a derivative of farming loans that have evolved to include homes in specified rural areas. As a result, only certain homes are USDA eligible, a criterion centered on the location of the home.
The biggest advantage of a USDA home is that under certain conditions, there is no down-payment required, unlike their FHA counterparts that require 3.5% down.
If you are wondering whether or not the home you have your eye on is USDA eligible, you can check for yourself at:
https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
To learn more about USDA loans and to be paired with a competent lender in your area, reach out to us at HERE.
The Goblins in the HOA
In the state of Florida, there are two exceptions to the protections you have as a homeowner; your lender and your HOA. Be warned, HOAs have gotten wind of their powers and have solicited the services of local attorneys willing to foreclose on your home for as little as a $75 HOA fee. It doesn’t matter what your credit looks like, it doesn’t matter the amount of equity, it doesn‘t matter if the house has been your home for 20 years. The attorneys get paid either way (the $75 fee quickly turns into a $3500 debt with attorney fees) and they have no compassion (rightly so) for anything other than serving their client, the HOA- reasonable or as unreasonable as the situation presents itself.
Understanding your credit sometimes means understanding your rights or the lack thereof. Don’t put yourself at risk. What they do is absolutely disgusting, but within their rights.
Remember this the next time you vote.
Nothing But Net: To Refi or Not To Refi
Michael Jordan missed 3000 shots in his career. Sometimes to achieve greatness, you gotta take a couple of bricks. When those bricks are the ones that you have to build your house, there is one thing you should look at before you take a shot at a refinance: Net Tangible Benefit.
There are several reasons to refinance: get a lower rate, get a lower payment, consolidate other debt. Whatever your reason, you should consider the net tangible benefit. This is the net cost of doing the refinance, including closing costs, doc stamps and intangible taxes, and the interest that you are going to pay (again) as a result of re-amortizing your loan. Do the math before you take the shot.
Some further tips: Try not to refinance for any more years than you currently have on your loan. (Remember what we said about lenders manipulating time.) Also, ask the lender for your break-even point (when the savings you create exceed the cost of the refi). Lastly, we strongly recommend against using the equity of your home to consolidate debt.
Make the Choice. Make the Change. Take the (Right) Shot. Delta.