5 benefits of getting your mortgage preapproval

 

Couple hugging with keys to their new home

Loan pre-approval, contrary to popular belief, is not for the agent’s benefit. Loan pre-approval is to prove a buyer’s credibility to the seller. Real estate experts tell first-time home buyers that it’s critical to apply for a loan before shopping for a home because a loan pre-approval is an essential first step. But do you know that it’s far better to be preapproved for a loan than to be pre-qualified? There are more advantages to gaining pre-approval than you would initially surmise. When the lender hands a borrower a pre-approval letter, it means the borrower can:

Save Time by Looking at the Right Homes 

If your real estate agent is sending you automatic e-mail listings of available homes, you can ask her to change the parameters to more tightly encompass the selection of homes that you are qualified to buy. If you’re not receiving e-mails from your agent, ask her to send them to you. Most MLS systems allow an agent to send clients much of the same data that agents receive. This way, you’ll save time by checking out homes you can actually afford to buy instead of falling in love with “pie in the sky.”

Spend More Time Examining the Right Homes

By decreasing the inventory of homes to those that fit your parameters, you can allot more time to thinking about all the little nuances each home has to offer. Many of first-time home buyers never move past the price point when sorting out their preferences, but now you can devote your energies to looking at the little things that matter the most to you such as whether your SUV will easily pass through the overhead space in the garage or smash into the microbeam.

Gain Confidence and Avoid Disillusionment

Now when you find that perfect home, nobody can take it away from you by telling you that you do not qualify to buy it. You can minimize anxiety and remove last-minute loan surprises that could disqualify you. You’ll sleep better at night knowing that the home you selected is yours. Moreover, you can tell your relatives and friends that the home you made an offer is definitely going to close and you will not “lose face” with anybody.

Increase Bargaining and Negotiating Power

Sellers will be more likely to immediately accept your offer, even if that offer is for less than list price because you are giving the seller peace of mind that her home is sold. She can take her home off the market and place it into pending status with confidence that the buyer is qualified to obtain a loan. Although the property still needs to qualify, for a seller, having the knowledge that the buyer can close is enormous. It will give your offer more credibility.

Enjoy a Faster Closing Period

Because there is no window period while your loan application is processed, the lender can speed up the entire processing procedure. Appraisals can be ordered immediately. It’s possible under certain circumstances to shorten a 30-day closing to two or three weeks, which comes in handy if a seller needs to move quickly and can’t decide which offer to accept. Your purchase offer will undoubtedly move to the front if you can accomplish the seller’s need to close quickly.

Because mortgage approval is generally the longest contingency to satisfy in a purchase contract, it is to your advantage to obtain a pre-approval letter as soon as you’re ready to begin your search. Lenders will render a decision based on your complete loan application, reviewing bank accounts and other assets, employment verification and the data collected from three credit reports.

At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.

Updated April 09, 2019
https://www.thebalance.com/the-advantages-of-loan-preapproval-1798390

 


Posted on January 10, 2020 at 6:40 pm
Denise Vansant | Posted in Mortgage Preapproval Advantages | Tagged

Are You Considering a 55+ Community in the Myrtle Beach Area?

5 Benefits of Living in a 55+ Community in the Myrtle Beach Area
*55+ Communities are Age-Restricted. The membership limited to the 55 and older crowd, you’ll be surrounded by like minded people that share similar interests, making it easy to forge new friendships. … One buyer must be 55, the spouse may not need to meet this requirement. Caretakers of younger disabled children: The disabled child is exempt from the age 55 requirement
*Active Lifestyle. 55+ Communities offer many ongoing activities for their members
*Convenient Locations near shopping, medical care and other amenities
*Low-Maintenance Living. Where Can you live near the beach for such an affordable price?
*Sense of Community- Make new friends and have an ongoing support system
 
If your thinking of buying in a 55+ Community please contact me for additional information regarding the local communities in the Myrtle Beach area. I can recommend financing options as well as send you current listings for these properties. 

Posted on January 21, 2020 at 5:45 pm
Denise Vansant | Posted in 55+ Communities |

FHA ISSUES NEW CONDOMINIUM APPROVAL RULE

HUD No. 19-121
HUD Public Affairs
(202) 708-0685
FOR RELEASE
Wednesday
August 14, 2019

FHA ISSUES NEW CONDOMINIUM APPROVAL RULE
Comprehensive policy revisions include ability to approve individual units in nonapproved condo projects

WASHINGTON – In an effort to promote affordable and sustainable homeownership, especially among credit-worthy first-time buyers, the Federal Housing Administration (FHA) today published a long-awaited final regulation, and policy implementation guidance, which establish a new condominium approval process.

Designed to be flexible and responsive to market conditions, FHA’s new condo rule and the new Condominium Project Approval section of the Single Family Housing Policy Handbook, provide a comprehensive revision to FHA condominium project approval policy.  In particular, the new policy will allow certain individual condominium units to be eligible for FHA mortgage insurance even if the condominium project is not FHA approved. The polices become effective October 15, 2019. Read FHA’s new condominium approval regulation.

FHA’s new condominium policy is part of a broader Administration objective to reduce regulatory barriers that currently restrict affordable homeownership opportunities. FHA’s new rule:

  • Introduces a new single-unit approval process to make it easier for individual condominium units to be eligible for FHA-insured financing;
  • Extends the recertification requirement for approved condominium projects from two to three years;
  • Allows more mixed-use projects to be eligible for FHA insurance.

“Condominiums have increasingly become a source of affordable, sustainable homeownership for many families and it’s critical that FHA be there to help them,” said U.S. Housing and Urban Development Secretary Ben Carson. “Today, we take an important step to open more doors to homeownership for younger, first-time American buyers as well as seniors hoping to age-in-place.”

HUD Acting Deputy Secretary and FHA Commissioner Brian Montgomery added, “Today we are making certain FHA responds to what the market is telling us. This new rule allows FHA to meet its core mission to support eligible borrowers who are ready for homeownership and are most likely to enter the market with the purchase of a condominium.”

The vast majority (84 percent) of FHA-insured condo buyers have never owned a home before. While there are more than 150,000 condominium projects in the U.S., only 6.5 percent are approved to participate in FHA’s mortgage insurance programs.  As a result of FHA’s new policy, it is estimated that 20,000 to 60,000 condominium units could become eligible for FHA-insured financing annually.

Single Family Policy Handbook Guidance

FHA’s new Single Family Handbook sections published today provide the additional requirements that lenders and other industry participants need in order to implement FHA’s new policy, including requirements for single-unit approvals, minimum owner occupancy requirements, and commercial/non-residential space limits. Read FHA’s changes to its Single Family Handbook.

Single-Unit Approvals

As of October 15, FHA will insure mortgages for selected condominium units in projects that are not currently approved.  An individual unit may be eligible for Single-Unit Approval under the following conditions:

  • The individual condominium unit is located in a completed project that is not approved;
  • For condominium projects with 10 or more units, no more than 10 percent of individual condo units can be FHA-insured; and projects with fewer than 10 units may have no more than two FHA-insured units.

Minimum Owner-Occupancy Requirements

FHA will require that approved condominium projects have a minimum of 50 percent of the units occupied by owners for most projects.

FHA Insurance Concentration in Condominium Projects

FHA will only insure up to 50 percent of the total number of units in an approved condominium project.

Commercial/Nonresidential Space Limits

FHA will require that the commercial/non-residential space within an approved condominium project not exceed 35 percent of the project’s total floor area.

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HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all.
More information about HUD and its programs is available on the Internet
at www.hud.gov and https://espanol.hud.gov.

You can also connect with HUD on social media and follow Secretary Carson on Twitter and Facebook or sign up for news alerts on HUD’s Email List.

https://www.hud.gov/press/press_releases_media_advisories/HUD_No_19_121


Posted on January 16, 2020 at 1:59 pm
Denise Vansant | Posted in FHA ISSUES NEW CONDOMINIUM APPROVAL RULE |

Buying a New Construction? Why You Need Your Own Real Estate Agent

Buying a New Construction? Why You Need Your Own Real Estate Agent

When you’re house hunting, the allure of new construction is undeniable. You get to be the first to live in the pristine home—one untouched by grimy hands or muddy shoes. It’s full of brand-new appliances and the finishes and treatments that you picked to fit your aesthetic. And you won’t have to worry about making any cosmetic or structural upgrades for years.

If you are interested in buying a new construction, the builder’s agent will be ready to help you with the process. But make no mistake: You need your own real estate agent from the get-go. Even if it seems like plug and play to sign up with the builder’s on-site agent, you’re going to want someone representing your side of the deal.

What is a builder’s agent?

When you buy a new construction, the home’s builder is considered the seller, and the agent representing the builder is called the builder’s agent.

“The builder’s agent will always have the builder’s best interest in mind,” says real estate agent Jason Walgrave, with Re/Max Advantage Plus, in Lakeville, MN.

After all, the job of the builder’s agent is to get the highest price for the homes the builder is selling so the agent is not going to be as eager to negotiate down.

Why you should hire your own real estate agent

It’s a good idea to have your real estate agent accompany you on your first visit to the new construction. Why? Because the builder (aka the seller) will be responsible for paying the commission, and needs to know if you’ll have a real estate agent representing you. So bringing your agent to the first visit will make it clear that the builder’s agent will be on the hook for paying commission. Some builders might even refuse to pay your agent a commission if you don’t register the agent the first time you visit the home on a new construction site.

“Your real estate agent’s job is to help you get the most value for your money, with the least hassle and frustration,” says Patrick Welsh, a real estate agent with Keller Williams, in Houston.

When buying new construction, here’s what your real estate agent will help you with that you might miss out on if you stick with the builder’s agent:

  • Negotiating extras: Want upgraded counters or appliances in that new home? Your agent can help you with all those extra perks, amenities, and upgrades. “We can often negotiate with the builder on things like paint color or even the style of garage door, especially if the housing development is in the beginning stages,” Walgrave says.
  • Recommending financing: A builder typically will have a “preferred” lender that it will try to steer you to, but your real estate agent can help make sure that you’re getting the mortgage that works best for your situation. Shopping around is always wise, and you don’t want the builder’s agent pressuring you into using their suggested professional unless it’s right for you.
  • Overseeing a home inspection: Tempted to forgo a home inspection in new construction? Don’t do it, advises Welsh. “The number and severity of new-home defects often rival resale home problems,” he says.The builder’s agent is unlikely to push for or offer up an inspection, so it’s up to you and your real estate agent to make it happen.

How the builder’s agent can help you

All that said, the builder’s agent can be a valuable resource for learning about your potential new home.

“They are knowledgeable about the construction and available amenities, as well as the housing development and general community vibe,” says Walgrave. You can rely on the builder’s agent for background information—just don’t make this individual your sole point of contact on the buying and selling process.

Everyone wants to walk away from buying a home—whether it be a new construction or not—with peace of mind. Having a real estate agent in your corner will help facilitate that.

https://www.realtor.com/advice/buy/should-you-go-it-alone-when-buying-from-home-builder/

Posted on January 13, 2020 at 7:04 pm
Denise Vansant | Posted in New Construction, why work with a realtor |

Landlords Find Alternatives to Security Deposits

Landlords Find Alternatives to Security Deposits

Renters are finding fewer places that charge a security deposit. That may be good news for tenants, but it’s a source of stress for landlords.

Security deposits have traditionally been a way for landlords to protect themselves if a resident causes damage to a property or stops making payments. But the large upfront payments before moving in have proved to be problematic for tenants. Renters can spend more than $3,400 on moving costs, according to research from Hotpads. With higher rent costs, new tenants may already be feeling stretched thin and a security deposit could even price them out.

Further, if the landlord takes any deductions from a security deposit when the tenant moves out, tensions often arise.

As such, some state and local governments are passing laws to limit security deposits. For example, Seattle has a law that limits security deposits so that they are equivalent to no more than one month’s rent. New York state recently approved a similar bill.

But landlords are still needing some assurance that a tenant won’t bail on them or leave them with a high bill for cleanup once they move out.

Some landlords are offering residents an opportunity to buy surety bonds instead of paying a security deposit. The renter pays a portion of the total deposit when they move in. That goes into a pool of funds to cover any damages or rent loss. It’s a nonrefundable upfront fee. This allows renters to save money when they go to sign a new lease, but they still may have to pay more later on. If landlords find damages from the renter once they move out, the bonding company will pay to fix those damages. They’ll then require the renter to pay for reimbursement.

Another alternative that landlords are turning to is lease insurance. “With lease insurance, instead of paying a large sum of money for a security deposit, residents pay a monthly fee over the course of their leases,” Reichen Kuhl, CEO and co-founder of LeaseLock, whose company provides lease insurance, writes for Forbes.com. “As a result, the property owner is covered if the resident damages the property or skips their rent.”

https://magazine.realtor/daily-news/2020/01/13/landlords-find-alternatives-to-security-deposits?AdobeAnalytics=ed_rid%3D6463694%26om_mid%3D1836%7CRealtorMagNews_2020_01_13%26om_nytpe%3DREALTOR%20MAG%20NEWS


Posted on January 13, 2020 at 6:55 pm
Denise Vansant | Posted in security deposits |

7 Reasons To Work With a Realtor

 

REALTORS® aren’t just agents. They’re professional members of the National Association of REALTORS® and subscribe to its strict code of ethics. This is the REALTOR® difference for home buyers:

  1. Ethical treatment. Every REALTOR® must adhere to a strict code of ethics, which is based on professionalism and protection of the public. As a REALTOR®’s client, you can expect honest and ethical treatment in all transaction-related matters. The first obligation is to you, the client.
  2. An expert guide. Buying a home usually requires dozens of forms, reports, disclosures, and other technical documents. A knowledgeable expert will help you prepare the best deal, and avoid delays or costly mistakes. Also, there’s a lot of jargon involved, so you want to work with a professional who can speak the language.
  3. Objective information and opinions. REALTORS® can provide local information on utilities, zoning, schools, and more. They also have objective information about each property. REALTORs® can use that data to help you determine if the property has what you need. By understanding both your needs and search area, they can also point out neighborhoods you don’t know much about but that might suit your needs better than you’d thought.
  4. Expanded search power. Sometimes properties are available but not actively advertised. A REALTOR® can help you find opportunities not listed on home search sites and can help you avoid out-of-date listings that might be showing up as available online but are no longer on the market.
  5. Negotiation knowledge. There are many factors up for discussion in a deal. A REALTOR® will look at every angle from your perspective, including crafting a purchase agreement that allows enough time for you to complete inspections and investigations of the property before you are bound to complete the purchase.
  6. Up-to-date experience. Most people buy only a few homes in their lifetime, usually with quite a few years in between each purchase. Even if you’ve done it before, laws and regulations change. REALTORS® handle hundreds of transactions over the course of their career.
  7. Your rock during emotional moments. A home is so much more than four walls and a roof. And for most people, property represents the biggest purchase they’ll ever make. Having a concerned, but objective, third party helps you stay focused on the issues most important to you.

https://magazine.realtor/sales-and-marketing/handouts-for-customers/for-buyers/7-reasons-to-work-with-a-realtor


Posted on January 10, 2020 at 7:05 pm
Denise Vansant | Posted in why work with a realtor | Tagged

Are you thinking of buying a short sale home?

Before Buying a Short Sale Home

realtor showing couple interior of house

Buyers who pursue short sales firmly believe that it will present them with a good deal. Before jumping on a home you see listed for a price you think is too low for the neighborhood, ask your agent to call the listing agent to find out if the home is a short sale, because you might want to think twice about making an offer on a pre-foreclosure, short sale home. It’s not as simple as you may believe, and very few can close in 30 days or less.

Defining a Short Sale

A successful short sale means the seller’s lender is willing to accept a discounted payoff to release an existing mortgage. Just because a property is listed with short sale terms does not mean the lender will accept your offer, even if the seller accepts it. That’s because sellers need to qualify for a short sale. If their agent sells very few short sales, that’s a red flag for your buyer.

Be aware that the seller doesn’t need to be in default before a lender considers a short sale; a lender may consider it if the seller is current, but the value has fallen. The seller may also owe more than the home is worth, so a discounted price might bring the price in line with market value, not below it.

Check the Public Records

Do your research before making an offer to purchase. Your agent can find out who is in the title, whether a foreclosure notice has been filed, and how much is owed to the lender(s)—which is important because it will help you to determine how much to offer.

Remember, banks are not under duress to accept a short sale so the offer needs to be reasonable.

If there are two loans, you could have a problem. The first mortgage lender’s position is protected by the second lender unless the second lender does not want to foreclose. If a seller owes $160,000 on the first and $40,000 on the second, offering $160,000 leaves nothing for the second. The first will need to give something to the second to gain its cooperation, but it’s not nearly as much you would think. Often $3,000–$6,000 is acceptable.

Hire an Agent with Short Sale Experience

It’s already less-than-ideal if the listing agent has never handled a short sale, but it’s even worse if your own agent has no experience in that arena. You need an experienced short sale agent who can anticipate surprises, stop problems from happening, and help to expedite your transaction and protect your interests. You don’t want to miss any important detail due to inexperience or find out your transaction is not going to close on time because no one bothered to follow up in a timely manner.

Qualifying the Property and Seller for a Short Sale

A lender is unlikely to agree to a short sale unless the seller has no equity and is unable to repay the difference between your sales price and the existing loans. Sellers will need to provide a hardship letter to the lender and may owe taxes on the amount of debt that is forgiven.

It is illegal for a seller to demand that buyers pay them to be given the right to purchase the seller’s property; do not be lured by sellers who suggest this practice. In a short sale, the seller typically receives no money because the lender is losing money. A HAFA short sale was once an exception, but those no longer exist.

Submit Documentation and Purchase Offer to Lender

Once the seller has accepted your offer, the listing agent will send it to the lender for approval; you do not have a deal until the lender accepts. The lender will want a copy of your earnest money deposit and proof of funds, as well as want to see that you are preapproved for your own loan, so send a current preapproval letter for the lender, dated within the last 30 days. It will help if your agent sends a list of comparable sales that support the price you are offering to pay for the home.

Give the Short Sale Lender Time to Respond

Make your offer contingent upon the lender’s acceptance and give the lender a time frame to respond, after which you will be free to cancel. Some lenders submit short sales to committee, but most can decide within two weeks to three months. As a buyer, you cannot contact the lender, nor can your agent; the listing agent should have the appropriate information for the lender, so be patient.

As a buyer, you cannot contact the lender nor can your agent, so be patient.

Understand Short Sale Commissions

The seller is not keeping any of the money but still pays the commission from the proceeds of the sale. Regardless of the commission the seller has agreed to pay, the lender is the entity approving the commission. The lender will likely negotiate the commission directly with the listing broker, who will then share the commission with your agent.

If you have signed a buyer’s broker agreement with your agent, ask if the agent will waive the difference due, or you might have to pay it out of your pocket. Some brokers feel it is unfair to penalize the agent, but the lender is calling the shots.

Reserve the Right to Conduct Inspections

Generally, the lender will not allow a seller to pay customary items that a traditional seller would pay—including home protection plans for the buyer, roof, pest or termite inspections, and pest completions. A buyer will be asked to purchase the property “as is,” which means no repairs.

It is extremely important that a buyer obtain a home inspection. Be sure to reserve your right to one before agreeing to purchase a short sale home.


Posted on January 10, 2020 at 6:59 pm
Denise Vansant | Posted in credit score, short sales |

Credit Scores Demystified!

Credit Scores Demystified
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If you’ve made a resolution this year to get your credit on track, getting started can feel a bit daunting. After all, it can sometimes seem as if credit agencies want to keep you in the dark about how scores are calculated. Not to worry – with some diligence on your part and a little insight into the world of credit score-keeping, you can get back on track in 2020.

Paint your credit score on your wall for extra motivation

Credit scores follow an algorithm first developed by the data analytics company FICO years ago. For a while, credit scores weren’t the primary force behind a credit decision but over time the impact of a credit score became more and more important. Most every loan program available today has a minimum credit score.

There are five characteristics of your credit history that make up your three-digit score: your payment history, account balances, the length of your credit history, the types of credit used and how often you’ve applied for new credit. Credit scores will improve much more quickly by paying attention to the two categories that have the greatest impact on a score: payment history and account balances.

Payment history accounts for 35 percent of the total score. When someone makes a payment more than 30 days past the due date, scores will fall. An occasional “late pay” won’t do much damage to your score but continued payments made more than 30 days past due definitely will. Preventing late payments is a key to recovering your score.

Account balances compare outstanding loan balances with credit lines and make up 30 percent of your score. If a credit card has a $10,000 credit line and there is a $3,300 balance, scores will actually improve, as the ideal balance-to-limit is about one-third of the credit line. As the balance grows and approaches or exceeds the limit, scores will begin to fall.

The remaining three have relatively little impact. How long someone has used credit accounts for 15 percent of the score, but there’s really nothing anyone can do to improve this area other than to wait. Types of credit and credit inquiries both make up 10 percent of the score. By concentrating on payment history and account balances, scores will improve significantly over the next few months.

Inspections vs. Appraisals vs. AVMs
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Appraisal after inspection
Inspections, appraisals, and automated valuation models, while related, all have different functions but can be easily confused. Let’s take a closer look.

Inspections: A property inspection is ordered by the buyer and is meant to be an unbiased look at the condition of the property. While not necessarily required by a lender, an inspection protects the buyer from purchasing a home that requires expensive repairs or otherwise doesn’t live up to its list price. A property inspector will examine the condition of the property inside and out, running through a checklist of areas including, but not limited to, the roof, electrical panels, wiring, plumbing, appliances, doors and windows. If any issues pop up, the inspector makes note and provides the buyer with a report.

Many reported issues will need some attention but won’t affect financing. If major repairs are needed however, the lender might want to have those issues addressed before they provide any funding.

Appraisals: Once the inspection has been completed and reviewed, the lender can order an appraisal. The appraisal will consider comparable homes in the area as well as other factors such as lot size, nearby schools and crime rates. The goal of the appraisal is to determine the true value of the property for the sake of the lender.

The key difference between an inspection and an appraisal is that an inspection aims to assess the physical condition of a home itself, while an appraisal solely determines the market value of the real estate.

AVMs: An automated valuation model is a digital evaluation of the value of a home. An AVM will quickly research the database of similar homes in the area and compare them with the value of the subject property. AVMs are often used to assess the value of a property portfolio, and have the advantage of saving time and money since no one physically visits the property. However, AVMs can’t take into account the true condition of a property and often aren’t enough to secure a conventional loan for a home buyer.

QUESTIONS? VISIT vansant.docksiderealtycompany.com

personal photo
Denise Vansant
Realtor
Realty ONE Group Dockside

843-940-3609


Posted on January 9, 2020 at 2:41 pm
Denise Vansant | Posted in Uncategorized | Tagged