Posts Tagged ‘foreclosures’

Ten Incredibly easy steps for buying that first home.

Posted on: April 20th, 2016 by admin No Comments

realty-1151243__180Really you don’t have to be afraid. Like they say “It isn’t rocket science”. If you answer yes to any of these questions, its time to go out an get your piece of the American Dream.

  1. Are you throwing rent money out the window every month?
  2. Are you turning green with envy every time one of your buddies talks about their palace in the burbs or the city for that matter?
  3. Have you been to at least one seminar on how not to invest your money in the stock market?
  4. Have you looked at your income tax return and said to yourself ” How come I don’t have any more write offs?
  5. And finally, has your spouse threaten to leave you unless you find a way out of that dump you live in?

Okay, I’m known for being a wise guy. But seriously isn’t it time to get out and get your own? It really isn’t that hard to get started.

  1. Go find a real estate agent that you like and trust. Talk to your friends about who they used. There is nothing better than a referral. If you don’t have any friends, look around you and go on the internet and see who has a lot of listings. These agents are probably very active in the market. There are agents who specialize as buyers agents but they are not readily identifiable as the listing agents. Be sure to go to the agents websites and look for endorsements from past clients. That will tell you how good they are, regardless if they are a listing or selling specialist.
  2. Once you pick the agent, go get pre-qualified for a mortgage. What does that mean? It means a possible lender will check your credit, your basic income and give you an idea of what you can borrow. Your real estate agent will give you some recommendations on who to go to. There is no charge for this service. But when you find a house, you will have to go through a formal mortgage application.
  3. Go find houses on line and screen them for what you want. Stick to the main websites;  The Multiple Listing Service, your agent’s website or Zillow. If you don’t know what Zillow is, believe me you will learn quickly.
  4. Go drive by the houses first. Pictures and video are great but you have to scope out the neighborhood.
  5. Pick some and go look at them with your agent.
  6. Like one, well go ahead scaredy – cat make an offer. The worse that will happen is that the seller will say no, but maybe if you are lucky you can negotiate the price and other conditions. You know, like removal of the Lama Haired rug or replacing the 40 year old furnace. But its like the lottery…. You can’t win if you don’t play.
  7. Everybody agrees? Okay, do your stuff; inspections, mortgage app, title search(the agent will help you with this for another recommendation).
  8. Go to settlement, sign papers.
  9. Get the keys
  10. Move in

Now was that so bad? Okay… Like I said I am a wise guy.  But it really isn’t that bad. Give me a call and we shall venture the journey together. It can be a lot of fun and maybe by this time next year Uncle Sam will send you a big fat check. Who knows?

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What is the Best Way to Finance a HUD Home?

Posted on: April 17th, 2012 by admin

 

What Is the Best Way to Finance a HUD Home?

 

FHA financing is the best way to finance a HUD Home for most buyers.

 

FHA has certain advantages over conventional financing:

 

  • The total down payment for an FHA loan is only 3.5% of the sale price. (This number may increase in the near future. The down payment amount may also change to reflect risk factors in credit score. Check with your loan officer for the most up-to-date information.)

 

  • Debt-to-Income Ratios  are generally higher with FHA loans. Buyers can qualify with 29%  Front End Ratio  and 40% Back End Ratio , compared with similar conventional products that limit borrowers to 33-36% on the back end. Borrowers have more borrowing power with an FHA loan.

 

  • Example (front end): Monthly Income x 29% = Maximum PITI (principal, interest, taxes, and insurance). For a monthly income of $3, 000, that means that $870 is the maximum mortgage payment for qualifying purposes.

 

  • Example (back end): Monthly Income x 40% = Maximum PITI (principal, interest, taxes, and insurance). For a monthly income of $3,000, that means that $1,200 is the maximum mortgage payment for qualifying purposes.

 

  • FHA lets the buyer negotiate a 3% seller assist toward closing costs. In many cases, a borrower needs no more than 3% of the total sale price as a total cash-out-of-pocket investment. There are other alliances and programs that will let the seller pick up the whole tab. Some of these plans are under close scrutiny by the U.S. Internal Revenue Service.

 

  • FHA is more lenient with credit issues than conventional lenders. Even bankruptcy discharges can work with FHA if good credit follows the discharge. FHA underwriters give much credence to letters of explanation about credit recitals.

 

HUD Homes offered with FHA financing offer special incentives to buyers. HUD Homes eligible for FHA 203(b) financing have reduced closing costs because there is NO APPRAISAL fee. Lenders are required to use the appraisal that HUD has on file if the appraisal is less than 150 days old. (If you sell a HUD Home near the end of the 150-day window, you can make a written request to HUD to extend appraisal validity 30 days, to 180 days. That request must be in writing two weeks before the 150 day appraisal expiration date.)

 

Keep in mind an important fact about FHA financing for HUD Homes:

 

FHA will only finance a maximum loan amount that corresponds to HUD’s asking price. If a buyer is inclined to “bid up” a property and finance that property with FHA financing, he will have to make up the difference between the asking price and the bid amount with additional down payment monies.

 

For instance: A buyer expects that there will be competing bids for a house at 123 Main Street. HUD’s list price is $85,000. The buyer is confident that the real value of the property is closer to $100,000. He bids $90,000. His down payment will increase from 3.5% of $85,000 ($2,975 down payment) to that amount PLUS an additional $5,000 ($6,912 down payment).

I know that I mentioned this in my  last blog, but here is a good primer on searching for a loan for your new home. Click here for the video.

Remember if you want a list of already approved HUD Homes or have in mind a conventional purchase using FHA financing, give me a call at 610-737-2310 or email me at samruta@yahoo.com.  Start your search on the right at the  Lehigh High Valley link.

 

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Shopping for a Loan

Posted on: April 11th, 2012 by admin

Can I Bid Online for a HUD Home?

So you found the home of your dreams. Well you can finance it  a couple of ways; get a mortgage, ask the sellers to lend you the money or pay cash. Which one of these alternatives do you think you would use? I am not being a wise guy. A friend of mine who runs an upscale development told me yesterday that she has made 3 sales this month so far; all cash and all over $500,000. Maybe the market is coming around. What do you think?

When you are ready to make an offer on a HUD home, that is, one that is owned by HUD, you need to use a Real Estate Agent.

I don’t know where real estate buyers get the idea they can place a bid on a HUD Home without a real estate agent.

Buyers cannot bid for HUD Homes online at HUDHomeStore.com

 

The only way to place a bid is to work with a real estate agent who works at a HUD approved real estate brokerage. (Translation: That’s me!)

 

Buyers are NOT able to submit bids on their own behalf.

If you are going to make an offer on any  home but it is not HUD owned you do not have to use  a real estate broker unless it is listed by a real estate broker.

A real estate agent will be glad to walk  you through the procedure in submitting a bid for your home.

Here is another closed captioned video on Shopping for the loan.

Don’t forget, If you want to find some homes to start your search, click on the link on the right side blog bar on “Finding a home in the Lehigh Valley.

email me at samruta@yahoo.com or call me at 610-737-2310

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Buying a home HUD FHA

Posted on: April 6th, 2012 by admin

There are numerous resources out there to guide one through the buying process for an FHA HUD home. Wether you are comtemplating a resale home, or a foreclosure. The following video which is closed caption provides some good basic information in starting your search.  Then we will followup with an FHA Loan Checklist.

Buying an FHA HUD Home (Closed Caption)

 

FHA Loan Checklist

 

Here is a list of documents you will need to apply for an FHA loan:

  • Address of place of residence (past two years)
  • Social Security numbers
  • Names and location of employers (past two years)
  • Gross monthly salary at current job(s)
  • Pertinent information for all checking and savings accounts
  • Pertinent information for all open loans
  • Complete information for other real estate owned
  • Approximate value of all personal property
  • Certificate of Eligibility and DD-214 (for veterans only)
  • Current check stubs and W-2 forms (past two years)
  • Personal tax returns (past two years), current income statement and business balance sheet for self-employed individuals

 

 

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Where Can I Get Updates About New HUD Homes?

Posted on: April 5th, 2012 by admin

Where Can I Get Updates About New HUD Homes?

 

The BEST place to get information about HUD Homes is HUDHomeStore.com , HUD’s superstore site.

 

HUDHomeStore.com is a one-stop platform containing everything you need to know about the HUD REO sales program:

 

  • HUD property information;

 

  • Property disclosures and addenda;

 

  • Real estate and consumer registration features;

 

  • Interactive maps on home page, special programs pages, and property detail pages;

 

  • Resources and contact information for real estate agents and brokers, consumers, state and local governments, and nonprofit organizations.

 

The new website features all HUD Homes in the country.  Real estate agents and consumers have the same view of properties, and access to a myriad of resources and contact information.

Here is a video on how to register for HUD Homes.

Any questions? samruta@yahoo.com
Phone; 610-737-2310

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5 Facts About HUD Homes Buying Every Investor Needs to Know!

Posted on: March 28th, 2012 by admin

Here are some quickie tips for the HUD Investor.

5 Facts About HUD Homes Buying Every Investor Needs to Know

 

Investors can buy HUD Homes, but there are some restrictions on investor bidding. Here are some things investors should know about HUD Homes.

 

  1. HUD gives owner occupant buyers priority in the bidding process. When a property is listed for sale as a new listing, only owner occupant bids are accepted for the first 30 days.

 

  1. Investors can place bids on newly listed properties on Day 31.  Investors can purchase only one HUD property in a 24-month period.

 

  1. Investors are not eligible for FHA financing.

 

  1. Earnest money requirements are higher for investors than owner occupants.

 

  1. Nonprofit investors may qualify for a “First Look” at HUD Homes if they intend to offer the property as affordable housing following their purchase.

If you are an investor and you are interested in HUD Homes, call me and we can discuss a strategy to move forward and add a HUD Home to your portfolio.

I’ll also send you a list of HUD properties.

samruta@yahoo.com

610-737-2310

 

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50% HUD Homes Discount

Posted on: March 2nd, 2012 by admin

Here’s a program that needs some awareness. Pretty neat.

Give me a call or email me and I’ll send you a list of homes that meet the requirements.

Law enforcement officers, pre-Kindergarten through 12th grade teachers and firefighters/emergency medical technicians can become homeowners through HUD’s Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home.  In return you must commit to live in the property for 36 months as your sole residence.

 

How the Program Works

 

Eligible Single Family homes located in revitalization areas are listed exclusively for sales through the Good Neighbor Next Door Sales program. Properties are available for purchase through the program for five days.

 

How to Participate in Good Neighbor Next Door

 

Check the listings at HUDHomeStore.com for your state. Follow the instructions to submit your interest in purchasing a specific home. If more than one person submits on a single home a selection will be made by random lottery. You must meet the requirements for a law enforcement officer, teacher, firefighter or emergency medical technician and comply with HUD’s regulations for the program.

HUD requires that you sign a second mortgage and note for the discount amount. No interest or payments are required on this “silent second” provided that you fulfill the three-year occupancy requirement.

The number of properties available is limited and the list of available properties changes weekly.

Good Neighbor Next Door FAQs

 

Q: What Is the Good Neighbor Next Door (GNND) Sales Program?

 

A: HUD wants to strengthen America’s communities. The Good Neighbor Next Door Program offers HUD owned single family (one-unit) homes to eligible participants at a 50% discount.

 

Q: Am I Eligible for the GNND Sales Program?

 

A: Law enforcement officers, teachers and firefighters/emergency medical technicians and who meet all other requirements of the program are eligible to purchase an available home.

 

Q: How Much of a Discount Can I Get on a HUD Home?

 

A: You can get a 50 percent discount off the HUD appraised value. For example, if HUD lists a home at $100,000, you can buy it for $50,000 provided, you occupy the home as your personal residence for the required occupancy period. If you qualify for any FHA-insured mortgage program, your downpayment is only $100 and you may finance closing costs.

 

Q: What Kind of Mortgage Financing Do I Need?

 

A: You may use FHA, VA, or conventional mortgages, or cash. HUD requires you to sign a Second Mortgage and Note on the discounted amount (which is $50,000 in the example above). No interest or payments are required on this “silent second” mortgage if you live in the home for the entire 36 month occupancy period. You may be required to pay a pro-rata portion of the discount to HUD should you fail to fulfill the three year occupancy requirement.

 

Q:  What is the Occupancy Period?

 

A: You must live in the home as your sole residence for a full 36 months. The purpose of the program is to strengthen communities by encouraging employed, professional law enforcement officers, teachers and firefighters/emergency medical technicians to live in the community. You will have 30, 90 or 180 days to move into the home you purchase, depending on HUD’s determination of the condition of the home and the level of repairs that may be required, if any. The 30th, 90th or 180th day is the start date for the occupancy period. Your are released from all obligations under this program at the end of the 36th month following the start date. HUD views the occupancy obligation seriously and vigorously pursues violators to the fullest extent of the law.

 

Q:  What Is an FHA Rehabilitation Mortgage and How Can It Help Me Buy a HUD Home?

 

A:  The FHA 203(k) mortgage program helps homebuyers buy a home and have enough money to rehabilitate or repair it. Repairs must cost more than $5,000. The cost of the repairs and the mortgage are combined into a single monthly payment. Consider FHA?s 203(b) program if needed repairs are under $5,000. FHA also has a new Streamlined 203(k) program which may be useful. Discuss these financing options with your lender!

 

 

Q:  Can I Sell the GNND Home after 3-years and Keep the Profit?

 

A:  Yes. After you live in the GNND home 3 years, you can sell the home and keep any equity and/or appreciation.

 

Q:  Do I Have to Use a Real Estate Broker or Agent to Buy a GNND Home?

 

A:   Yes.

 

Q:  Do I Have to Be a First Time Homebuyer to Take Advantage of the Program?

 

A:  No. However, you may not own any other residential real property at the time you submit your offer to purchase a home and for one year previous to that date. For example, if you submit an offer to purchase a home on August 1, 2007, you may not have owned a home during the period from July 31, 2006.

 

Q:  Where Are These Homes Located?

 

A:  The HUD homes are located in designated Revitalization Areas. There are hundreds of Revitalization Areas located in the United States.

 

Q:  Does HUD Provide a Home Warranty?

A:  No. All GNND homes are sold “as is,” without any kind of warranty. You may hire a home inspector, however.

 

Q:   Can I Buy Multiple Unit Properties (E.g., Duplexes, Triplexes, Etc.) through the Officer Next Door Program?

 

A:  No. You can only buy single unit homes, townhouses, and condominiums through the GNND Program.

 

Q:  Do I Have to Pay Earnest Money or Other Deposits in Order to Submit a Contract for a GNND Home?

 

A:  Yes. The amount of the earnest money deposit required is an amount equal to one percent of the list price, but no less than $500 and no more than $2,000. HUD considers all offers to be a commitment to purchase a home if you are awarded the sale. Therefore, please carefully consider your offer and be aware of HUD’s policy on earnest money as stated here: If an offer is accepted, the earnest money deposit will be credited to the purchaser at closing. If the offer is rejected, the earnest money deposit will be returned. Earnest money deposits are subject to total forfeiture for failure of the participant to close a sale.

 

Q:  Can I Bargain with HUD on the Price of a GNND Property?

 

A:   No. You must offer the exact HUD list price when bidding on any GNND property. Then you get a 50 percent discount off of that list price.

 

Q:  What if I Leave the employment, that made me eligible, for Any Reason, during the Mandatory 3-year Residency Period?

 

A:  Nothing happens, but you must continue to live in the home for the full 36-month mandatory occupancy period. If you move out of the GNND home, you will have to repay HUD on a prorated schedule. In addition, you must certify that it is your good faith intention to remain employed as a law enforcement officer, teacher or firefighter/emergency medical technician for one year beginning with your purchase. Do no attempt to participate in the program if you know in advance that you will not be employed as required for at least one year.

 

Q:  Some Agencies Have Other Homebuying Programs. Can the GNND Program Work in Conjunction with These?

 

A:  Yes, as long as you can meet all the GNND program rules while participating in these other programs.

 

Q:  What Happens if a Participant Fails to Honor the 3-year Occupancy Requirement?

 

A:  HUD can demand repayment of the discounted amount on a prorated basis. That means you would have to repay 1/36th of the discount you received for each month that you did not occupy the home. HUD also may initiate administrative sanctions including, but not limited to, barring the officer from participating in any HUD/FHA programs, as well as other federal programs. In any case of fraud or abuse, HUD will refer the case to HUD’s Office of the Inspector General for investigation and possible criminal prosecution. HUD may also notify the officer’s employing agency. Criminal prosecution and conviction for fraud and abuse concerning the GNND Program can result in a fine of up to $250,000 and/or two years in federal prison.

 

Q:  How Does HUD Enforce the 3-year Residency Requirement?

 

A:  The participant must certify he or she is living in the GNND home as a sole residence at the time of purchase and each year after that. HUD can conduct spot checks to make sure the GNND home is your sole residence at any time during the 3-year period. You also must sign a note and mortgage for the discount amount. HUD may foreclose this mortgage if you do not comply with the 36-month occupancy requirement

Don’t forget if  you have any questions contact me using the info on  the right sidebar.

 

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It was the best of times, it was the worst of times ……

Posted on: February 26th, 2012 by admin

Charles Dickens, A  Tale of Two Cities,  published 1859.

I remember with some mental anquish how as a college student studying English Literature that I dreaded Dickens. I don’t know what it was that made me feel that way. Maybe it was the size of the transcripts or the titles (Bleak House, Oliver Twist, Pickwick Papers) that seem to provide a premonition of  a long arduous study of  boring  English monologue. More than likely it was a youthful college mentality that seemed to be more focused on frivolity rather than serious study.  But age has its advantages and aha moments and now I think I understand the true understanding  and pleasure of literary masterpieces.  Now when I review ” A Tale of Two Cities”,” A Christmas Carol”, or” Great Expectations”, I have no regrets for my  delay of literary appreciation.

You might ask… Sam, what does this have to do with Real Estate? Fair enough. I have to say that I am drawn to the parallels I perceive in this crazy bi-polar market. Its the best of times….Its the worst of times. Excuse the paraphrase Mr. Dickens, but my aim is to make my analogy somewhat contemporary. Its the best of times for a buyer.  Low interest rates, lower than we have seen in 50 years.  Home prices are low.  Since the bubble in 2007, prices have been on a downward spiral and there are  plenty of homes to choose from.  Its the worst of times for a seller for the exact same reasons I mentioned above. Plus in a lot of cases the sellers can’t sell because they are “underwater”. They owe more on the home than what its worth. It gives me a chance to wonder. Where are we going with all of this over analyzed, statistical conflagration of  charts, opinions, and emotional diatribes?  Hell, I don’t know.

I would have thought my experience in the business would lead me to feel some sense of confidence in predicting the market. Been doing this thing for 34 years plus.   I am more confused now than when I sit down with my accountant to do my income taxes.  In the Dickens novel, the protagonists in Paris were dealing with poverty, privilege class and violent revolution with Madame Guillotine as the ultimate adjudicator. Those folks in London, though maybe not as violent in the outcome, were dealing with a topsy turvy world of social change. Starting to sound like deja vu.

We can’t escape the fact that this is an election year and because of the 24 hour cable news bloviating, my head is ready to explode with the constant harangue of candidates  telling me things are better, worse than they have ever been , that we are on are way back, or Armageddon is due about noon tomorrow. What’s an average non conformist like me to do? And what do I tell my clients?

Wait….. before we continue with this somewhat esoteric contemplation, I have to take care of  some personal matters that are for real.  I need gas in my car.  I go to New Jersey for my gas. Its 20 cents a gallon cheaper. My wife also shops at Dollar General and Giant Supermarket with a briefcase full of coupons. We keep the house at 68 degrees in the Winter and 76 in the Summer.  We are on our way to becoming pretty much self sufficient with food storage that will last  for I am not quite sure how long, but we feel that we should be prepared.  For what, your guess is a good as anyone else’s.  A few weeks ago we spent a Saturday taking the NRA Basic Pistol Shooting Course because we felt that today we should at least know something about weapons. The class was full with  60 people, and I would say all about our age. Boomers who are concerned with just protecting their families and what’s left of their assets. Good class, they told Gloria and me that our shot groups were “tight”.

You know for the most part we are doing these things to protect ourselves and to save as much money as possible. For the last several years we have all heard that  as a country we are spending too much money, that we are a gazillion dollars in debt to other countries but really big time  to China. They are our bankers. And we buy a lot of stuff from them.  So we save our money, cut back on non necessities  and try to conserve fuel,  food and energy. So what do we hear now from the so called “Economists”.  Consumers generate 70% of GDP (Gross Domestic Product). So if we as consumers stop spending money we are going to force the good old USA into a Double Dip Recession.  What am I missing here? I know that I can overwork cliches but I really don’t want to have the cake let alone eat it too.

Somebody is feeding us a line of baloney. The only problem is, who?

The only thing I can offer you is my gut. I think  the real estate market “feels” like its getting a little better.  I “see” things beginning to happen.  I “hear” more positive statements coming from the people I really trust.  Did I cover all facets of  Neuro-Linguistic Programming in that last statement? Thanks to Tony Robbins for that reference.  Maybe I could have added “smell”  but other than showing some really stinky houses, I don’t know how much of a barometer that is for an economic recovery.

I guess we just have to move on. What I can promise you is that I will not be pretentious or condescending if you ask me for my opinion. I’ll try to help you decide what to do about that house you want or don’t want anymore.

I can’t lay all of the blame for my early confusion to the realm of English Authors like Charles Dickens. I thought I was on my way to a more rational  view of literature by switching over to American authors. And then I met Joseph Heller and “Catch 22”.
I can still hear Captain Yossarian trying to get himself grounded from flying combat missions during WWII. They (The Army Brass) kept telling him the only way that would happen if he was diagnosed as being crazy. And since he knew it was crazy to keep flying suicide missions he was obviously sane and therefore would have to keep flying,….. Catch 22.  Move over Yossarian and save me a seat!!! We are in this together and Charles Dickens  is out there somewhere.

 

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