The Good, The Bad and The Ugly of a Home Owner’s Association

Home Owners Association, better known as the “HOA” have become “Big Brother” of many communities. These associations were formed to ensure neighborhoods remained esthetically pleasing to owners and visitors and a more uniform look and feel remained balanced. However, as the years have passed home owners associations have changed the rules, bylaws and guidelines for living comfortably in your castle.

When we make a purchase as important as a home we’d like to think we could do just about anything but developers err on the side of uniformity and like-minded individuals who’d rather ensure their homes bring increasing value. And when you get right down to the reasoning of an HOA, you must ask yourself; is it really all that bad to keep your community looking good?

While taking a pragmatic view of the Home Owners Association the good effects really outweigh the bad; your bylaws explain what you can and cannot do in your community. This is essentially an agreement between you and the community that you signed off on when you moved in and it’s the HOA’s responsibility to ensure you live up to your agreement.

What many people do not realize is that you have the right to call the HOA before you buy a home. You can ask questions to make sure you are willing to live by all the regulations set forth for that community. No one really goes through the trouble of inquiring what the guidelines are before purchasing a home and that is one of the biggest problems.

The HOA determines:

• What type of fence you can install and specifically where on your property you can install it;
• What style and color deck you can build and the dimensions of the deck;
• What day and time you are able to place your garbage bin outside on garbage day and how long it can remain out before you are fined;
• Whether basketball courts, swimming pools, bar-b-cue grills or the color, type and style of your front door are within the guidelines of that community

In simple terms – you must ask your HOA for permission to change, install or erect anything on your property. Why? Suppose you’re trying to sell your home and your neighbor wants to paint their front door a designer’s psychedelic color? How many people will purchase your home knowing they will have to live next to Picasso, never knowing what color’s he’ll use next?

This is why the HOA ensures uniformity and you never have to worry about crazy colors or embarrassing statues suddenly appearing on someone’s front lawn. But not everyone enjoys living under the rule of a Home Owner’s Association.

There will always be those who love to rule with an iron fist; and then you have some people who are not ethically and morally capable of handling an HOA position.

The developer first places HOA board members there and when the community is complete the new board is then voted in by a quorum of homeowners. Each position has a certain term limit and each position comes with a clause that many feel is unfair.

Board members are insured, payable with community funds, against any lawsuits; meaning you cannot sue them based on their decisions whether good or bad.

A board position comes with a lot of power and many homeowners do not enjoy having rules enforced especially when it’s easy for malicious intent. Cars towed, fines combined, requests denied and funds misused; any number of issues pop up when board members and homeowners views are conflicting and then combative. Oh yes! Many issues have turned into bloody noses and black eyes.

So how do you resolve issues with the HOA? Just about all bylaws explain how to remove the board of directors from the HOA. Or you could take the easy route before you move into a new community and call your HOA management company to ask questions.

Be sure to note the most important aspects of your happiness in your new home such as should you want to change the color of your front door or entire house, what colors have been approved? Asking plenty of questions now can resolve lots of headaches down the road.

Simpler Mortgage Forms Are Proposed

The myriad of complex disclosure forms required in getting a mortgage soon could ease a bit as a new federal agency tries to streamline and simplify an important part of the process.

In its first major move the Consumer Financial Protection Bureau released two prototypes of shorter and easier-to-understand disclosure forms that lenders must give home buyers when they apply for a mortgage.

The overall goal of the agency is to help consumers better comprehend the terms of the loans and compare them with mortgages available from other banks.

The forms will have simpler language and use high-lighted terms, arrows and "yes" or "no" graphics to provide key details about a loan, which include whether the mortgage terms can change, projected monthly payments for different years and a new piece of information - how much of the loan would be paid off in 5 years.

Some mortgage industry leaders have supported the simplification of disclosures but feel the changes would cost too much and cause legal liabilities.

The new form would replace two slightly longer mortgage disclosures that many home buyers complain are duplicative and difficult to understand.

The changes are due in great part because of regulatory failures leading up to the subprime mortgage meltdown, the consumer bureau is making simplified mortgage disclosures a priority as it prepares to start operations in July.

Changing the disclosure forms is the first of several ways the agency will become a key player in mortgage regulation. For instance, it also will set new standards for how companies service home loans.

The financial reform law enacted last year created the consumer bureau and directed it to develop a "single, integrated disclosure for mortgage loan transactions" by July 2012.

Lenders are required to provide two forms to a consumer within three days after he or she applies for a mortgage. The forms outline the loan's interest rate, initial monthly payment and other features.

One form is a two-page Truth-in-Lending-Act mortgage disclosure statement. The other is a 3 page "Good Faith Estimate (GFE)" required by the Real Estate Settlement Procedures Act.

In a poll last fall by Consumer Reports magazine, 84% of respondents who had applied for a loan or credit card recently said they had some difficulty understanding the financial disclosures.

The consumer bureau released the forms as part of its "Know Before You Owe" project to get feedback from the public, consumer groups and the mortgage industry.

Over the next four months, the agency will conduct interviews about the forms with consumers and mortgage industry officials in six cities - Los Angeles, Chicago, Albuquerque, Baltimore, Birmingham, Ala., and Springfield, Mass.

The 4 Factors That Make Or Break Your Mortgage Loan Application

There are 4 primary factors a loan processor will look at when you’re being considered for a mortgage loan. Many prospective buyers fail to take the time and review those factors that will be considered and this can lead to disappointment.

By having a clear understanding of your financial history you’ll be able to cleverly negotiate your loan terms.

Income & Employment

• What is your gross income?

This question is used to gauge your pre-tax and pre-deduction earnings. This is the baseline lenders use to determine the mortgage amount that you will qualify for.

• Do you make any overtime pay or bonuses?

This question is used to determine if you have any other income that can be utilized toward increasing the approval amount.

• How long have you been employed?

This question is used to weigh stability of your income. Individuals who jump careers every few years are considered to be a higher risk when it comes to loans than someone who has stayed at the same place of employment doing the same type of work for 24 months or longer.

Debt

• What is the minimum amount you pay toward all unsecured loans each month?

This question is used to determine the amount of disposable income a borrower has once all of their monthly financial obligations have been met. Unsecured debt applies to credit cards, personal loans, student loans, car payments or any other monthly payment currently being made to satisfy a debt.

• Do you have any debts in default or collection?

Your credit report will reveal the negatives, however, here is an opportunity to acknowledge extenuating circumstances for any negative debt. Not all negative items are a death sentence when it comes to a mortgage approval. This question is designed to help a loan officer assess your overall financial health,

Credit

Once a lender has pulled a borrower's credit they may have questions on items that exist on a credit report. The most common questions are to verify and respond to negative items that exist.

Money for Move In

Lenders want to validate available assets that can be applied toward down payments and closing costs when making a home purchase. The more available funds a borrower has to close on a home the less of a risk they are considered meaning that they are more likely to obtain a loan. The following are some of the more common questions that a lender will ask in regard to money for move in.

• Do you have a savings account?

• How much is in your savings account?

• Do you have an IRA or a 401K that you could access for additional funds?

• Do you have a family member that would be willing to provide you funds as a gift for down payment or closing costs?

Lenders questions will vary from one borrower to another based on the buyer's unique financial situation. However, this information can be utilized as a baseline guide for being prepared when applying for a mortgage.

Feds Changing Jumbo Mortgage Market

It sounds like another round of bad news for the mortgage industry. The government has made it clear that no one is constitutionally entitled to a government-backed mortgage of up to $729,750, no matter where you live. Even in places where the cost of buying a house is far above the national average.

The recession has been tough on the jumbo mortgage loan market, loans for homes that are over $417,000. Investors stopped buying jumbo loans and the jumbo mortgage market virtually shut down overnight.

Homeowners who wanted to refinance to take advantage of historic low interest rates found they simply couldn't get anyone to give them a loan, particularly since home values were falling. Buyers purchasing high-cost homes found they had to put down as much as 30 or 40 percent in order to land financing.

In a dozen high-cost areas such as Manhattan and San Francisco, the government stepped in to back jumbo loans to $729,500. That helped bring down the cost of financing large loans for consumers. What many Realtors and mortgage lenders didn't understand is that the measure was temporary. Last year, it was given a one-year extension.

Now, the message is clear: If you want a jumbo loan, you'll have to get one from the private mortgage market. While the government will still back mortgages in high-cost areas, the magic number seems likely to drop to $625,500.

And, that means jumbo mortgages are going to be far more costly - if you can get them at all.

It shouldn't surprise anyone that the National Association of Realtors is up in arms. The Realtors are convinced that home values will drop in those areas once government-backed financing dries up. The Mortgage Bankers Association has also joined the fight, expecting that fewer homebuyers will be able to get the financing they need to close.

Will cutting back government financing hurt the housing industry? Maybe. The real problem is that the housing industry is still on life support, with the federal government supplying the dopamine.

Fannie Mae and Freddie Mac, the secondary mortgage market leaders, have been in conservatorship (basically, a special form of bankruptcy) for months. Together with FHA, these three entities are backing more than 90 percent of all mortgages. Fannie Mae, which just asked for another $6.5 billion to make up for mortgage losses, and Freddie Mac have cost taxpayers hundreds of billions of dollars.

Realtors say that home buying is anemic. Pending sales of existing homes have been up and down over the past few months. New home sales have been virtually nonexistent. This is the first spring real estate market since 2007 without a homebuyer tax credit, and while activity has picked up in some markets, home prices are still falling.

What the housing industry really needs is a country where jobs are being created and its citizens are going back to work. If you have a job, you can afford to buy a home and get a mortgage. It's far bigger bang for the buck than backing mortgages worth nearly a million dollars.

Rate On 30-year Fixed Mortgage Falls To 4.63%; Fewer Foreclosures In April

Fixed mortgage rates have fallen to their lowest levels of the year, giving Americans more incentive to buy homes or refinance their loans.

Freddie Mac said Thursday the average rate on the 30-year loan fell to 4.63 percent from 4.71. The average rate on the 15-year fixed mortgage slipped to 3.82 percent from 3.89 percent. Both are at their lowest points since December. It marked the fourth straight weekly decline.

Rates track the yield on the 10-year Treasury note, which fell close to its lowest level of the year this week.

Low mortgage rates could boost the struggling housing market, which has dragged on the economy. Home sales are far below healthy levels. Most homebuilders reported a drop in new orders in the first three months of the year, an indication of future activity.

Job worries and strict lending standards have kept potential buyers on the sidelines. And the high number of foreclosures is forcing home prices down, leaving some would-be buyers concerned that prices have yet to bottom out.

Fewer homeowners had their houses repossessed by banks in April than a year ago, foreclosure listing firm RealtyTrac Inc. said Thursday. But that's because it's taking lenders longer to take back homes already in the foreclosure process because of paperwork delays. Last fall, evidence surfaced that lenders pushed through foreclosures without properly reviewing each case.

The holdup threatens to push back a resolution to the foreclosure crisis and a meaningful recovery in housing.

To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.

The average rate on a five-year adjustable-rate mortgage fell to 3.41 percent from 3.47 percent. The five-year adjustable-rate loan hit 3.25 percent last month, the lowest rate on records dating back to January 2005.

Note: Article originally written by Janna Herron of The Associated Press

Bankrupt homeowners shed second mortgages

Stung by the crash of the housing market, some struggling homeowners are using a little known but increasingly popular provision of the bankruptcy code to eliminate second mortgages and avoid foreclosure.

Statistics are hard to come by, but bankruptcy lawyers say the provision has been used effectively on hundreds, if not thousands, of cases in the San Francisco Bay area during the past two years.

"It's a big thing in our valley," said James "Ike" Shulman, a San Jose bankruptcy lawyer. "But it's not widely known."

Shulman, co-founder of the National Association of Consumer Bankruptcy Attorneys, said he has helped a number of clients who have filed for personal bankruptcy use the law to hold on to their houses - including three last week.

Cathy Moran, a Mountain View bankruptcy lawyer, said one of her clients had a $132,000 second mortgage voided by the court.

"This is a really big-ticket issue that allows people to keep a home and conform the mortgage to something closer to real value," Moran said.

Bankruptcy laws prevent homeowners from eliminating the debt of a first mortgage if they plan to stay in their home.

But second mortgages are treated differently. They can be declared unsecured debt when there is no equity to cover them, as is the case for millions of houses that are now worth far less than a few years ago.

When that happens in a personal bankruptcy proceeding, the second mortgage is put on hold and no payments are required while the homeowner completes a repayment plan for other debts - which typically takes three to five years.

At that point, the second mortgage is eliminated.

Many of these second mortgages were granted during the housing bubble, when home prices were going in one direction only - up, up and up.

"A lot of these are loans that shouldn't have been made at all," said Henry Sommer, editor of Collier on Bankruptcy, a publication on bankruptcy law.

One of Shulman's clients, Veronica - who asked that her full name not be used - was struggling to keep the San Jose house she bought in 2005 for $612,000.

Her home's value has dropped to about $367,000 - less than her first mortgage of $489,000 - which allowed her to petition the bankruptcy court to set aside her $122,000 second mortgage. The court granted her motion.

She successfully completed her payment plan for other debts two months ago, and her second mortgage is now eliminated.

"It's wonderful," she said. "After almost six years, I am finally able to see the light at the end of the tunnel, and I'm so, so grateful."

Mortgage bankers don't like the practice.

"It's a troublesome phenomenon. It's one of those things that's just now developing and bubbling up," said Dustin Hobbs, spokesman for the California Mortgage Bankers Association. But there is little the mortgage industry can do, aside from seeking to change the law.

And there are no complaints from investors in first mortgages, like the pension and retirement funds represented by the Association of Mortgage Investors. "We think with the right controls, something like this to allow a responsible, distressed homeowner to reorganize their assets, liabilities and cash flows is a very pro-business proposition," said Chris Katopis, the association's executive director. "We disagree with what the mortgage bankers associations are saying on this."

"We're having great results using the rule," said Brette Evans, a San Jose bankruptcy lawyer. In one recent case, a small-business owner was able to hang on to her home by setting aside a $240,000 second mortgage, she said.

That put the borrower in "a safe zone" where she could work out a modification of her first mortgage, Evans said.


Note: Article originally written by Pete Carey of San Jose Mercury News

Federal anti-flipping rule waived through 2011 to keep homes selling

The Federal Housing Administration announced back in February that it extended its anti-flipping waiver through 2011 to encourage the resale of foreclosed homes.

The rule prohibits FHA to issue a mortgage on a home owned by a seller for less than 90 days.

From the press release:

This action will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

“As I noted when we first announced this policy change early last year, because of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” said FHA Administratoin Commissioner David Stevens. “Today I can report that this policy change has been effective. Since the original waiver went into effect on last February, FHA has insured more than 21,000 mortgages worth over $3.6 billion on properties resold within 90 days of acquisition.”

FHA research finds that in today’s market, acquiring, rehabilitating and reselling these properties to prospective homeowners often takes less than 90 days.

Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

Stevens added, “Because of past restrictions, FHA borrowers have often been shut out from buying affordable properties. This action enables our borrowers, especially first-time buyers, to take advantage of this opportunity and buy a home that has recently been rehabilitated. It will also help to move more foreclosed properties off the market and reduce the number of vacant homes in neighborhoods throughout this country.”

Knowing The Real Monthly Mortgage Payment A First Time Homebuyer Will Pay

As a first time homebuyer, you will be exposed to hundreds or thousands of ads everyday; media stories, friends' advice, and online mortgage calculators that will provide you with partial information. All of these sources will lead you to believe that you can have a larger home loan balance with what seems to be a very low monthly payment. Or they will show you a monthly payment that seems extremely affordable for what you are looking for, trying to hook you to make the purchase.

The underlying truth though is that most of these monthly mortgage payments that you will come across are not completely accurate. Most of the super low mortgage payments that you see advertised are targeted to a specific homebuyer who has perfect A credit and usually do not include Property Taxes or Homeowners Insurance that you will also need to pay for each month.

Marketing departments are very smart and will show these low payments just to generate leads.

The marketing ploys usually have a small fine print that tells a different story. These super low payments will typically require extremely high credit scores in the high 800s and at least a 20% down payment.

If you put less than 20% down, your monthly payment could then also include mortgage insurance to be added to your payment. Look closely in the fine print, if you can locate it and you will see all the requirements to qualify for that payment and what type of loan program it is.

An advertisement does not know what your credit score is or if you plan on putting down a down payment.

Your monthly mortgage payment will typically include Principle and/or Interest payments, Property Taxes, Homeowners (Hazard) Insurance and possibly even Mortgage Insurance. It is important to talk to your loan officer and find out exactly what your TOTAL monthly payment will be and what will be included in that payment.

Keep in mind too, that some neighborhoods will require you to pay a Home Owners Association fee or other Community specific fees each month on top of your monthly mortgage payment. If you are used to renting, you also may not realize all the different utility expenses that you will need to pay as a homeowners instead of a renter.

In order to keep your overall monthly expenses in your comfort zone, it is very important to know your TRUE monthly payments and expenses. You don't want to buy your first home only to find that it is a financial burden. Buying your first home should be a great point in your life, not a financial nightmare.

Checks And Balances Before You Buy That Home!

How would you know if the most beautiful community was ripe with crime? Would it make a difference if your “perfect place on earth” was targeted by burglars? Most people locate their dream home without performing proper checks on a neighborhood. There are many online tools that can be an invaluable starting point in finding your home.

Find out the latest Mortgage Rates

You can find valuable online calculators that will provide good insight into how much home and how much mortgage you can afford. While an online calculator may not provide the absolute bottom line, it will provide at-a-glance analysis of a homeowners’ monthly responsibility. Simply select the state, the type of loan you are interested in and the amount of the loan you’re in the market for.

Get Reports on Schools, City Statistics and Cost of Living

Want to learn more about the city where your future home is located? Ask your agent. They have access to salary calculators to determine how much you can expect to make in your line of work, get statistical reports on various cities near you; you can also learn more about the schools and school ratings, and compare the cost of living in different towns.

Sexual Predators in the Neighborhood

While most of us never want to think of such a horrendous possibility, everyone should perform this check.

1.Visit the FBI's web page at www.fbi.gov. Once there, select A to Z index located at top of page; then find the words Sex Offender Registry towards bottom and click on it. You will see a list of the 50 states and their sex offender registries. Click on the words "The National/State Sex Offender Public Website" if you want to use the FBI's list. You will need to agree to the terms of use.

2.Since you probably don’t have a name, you can do an Advanced Search; enter just the name of your town and the zip code. You will then be able to see a list of all the sex offenders in that town.

Crime Statistics for any Neighborhood

Most people have no idea about any negative aspects of a neighborhood, especially when it comes to crime. Performing a street-specific crime statistics search should be number one on your to-do list. There’s a website called Spotcrime.com where you’re able to search any neighborhood in all states to see what crimes have been reported.

1.Visit Crimespot.com and input any address; browse through any listings that have popped up.

When you’re about to invest in one of the most expensive things in your lifetime you should ensure it meets all your prerequisites.

Can The Self Employed Get A Mortgage Loan?

When you work as a self employed worker sometimes it can be difficult to get approved for a mortgage loan. While the self employed worker is not viewed as an attractive home buyer, obtaining a loan is not impossible.

Traditionally, self employed workers were able to get a non-documentation loan but that was abolished when the sub-prime market tanked. Now everyone must prove they earn a living in order to get approved for a mortgage loan, so that will be your first step to prove steady self employed income.

• You’ll have to show a minimum of two to three years' tax statements or company accounts signed off by a qualified accountant and you'll be assessed on your profits

• Accountants use many legal loopholes to reduce your tax burden by reducing your stated profits but when applying for a mortgage loan, this may work against you because of the stated lower income.

• Make sure you have accounts paid on time. If you have good credit and a good credit report then that goes in your favor. If you can show that you’re a self employed worker who has steady profits and has managed to pay your bills on time, this will rate highly in your favor.

• You should have a healthy savings account to show that you have collateral and you’re responsible enough to save for your future.

If banks are still hesitating approval of your mortgage loan, try to get a loan from the smaller banks in your local area. Community banks and credit unions may be more willing to give you a loan.

The self employed group has grown over the past few years due to the quick rise in unemployment so banks understand the hiccups and underwriters are accustomed to the demand for mortgage loans.

And surprisingly, banks are already looking for a mortgage product to market to the self employed group.

10 Tips to Create the Illusion of More Space for Small Homes

We all know by now we should de-clutter to make rooms appear larger but who wants to pack away that treasured antique furniture that dear ole grandmother gave you?

It might be time to try some decorating tips that will help you make rooms look larger and use your space wiser.

1.Go Vertical

Extend cabinets, wall units and bookshelves to the ceiling; especially the kitchen cabinets.

2.Go Lighter

Paint walls light or use pale colors which make the rooms look wider.

3.Go Brighter

Use recessed lighting, inexpensive wall sconces and standard tube-like skylights instead of table or floor lamps; light closer to the ceilings also widens a room.

4.Add a Splash of Wow! Don’t Be Boring

Adding bold accents with varying patterns, prints and colors can deflect thoughts that a space is small. This is an area which you’ll want to experiment. And separating the walls of a small room into blocks of color can also add visual depth.

5.Utilize Wall Space

Place hooks and magnetic strips on walls in the kitchen and elsewhere and use them to hang pots, pans and other objects to off tables and counters. This emphasizes focus from smaller units to the walls.

6.Size Matters

Measure your space and furniture before any purchase. Couches designed to hug walls are a great way to open up a room, and armless couches and chairs can create the illusion of space. Floor cushions are a good alternative to create seating without adding more furniture and can be easily stored when not in use.

7.Watch Your Angles

Furniture that sticks out at the wrong angle in a small room can draw the eye and make it appear even smaller.

8.Make a Small Bathroom Appear Larger

Small bathroom design can be made to look larger with a few fast easy decorating tips. Enhance small bathroom space using pale, cool colors that reflect light; whites, pastels, and neutral colors to make the bathroom appear larger than it really is.

9.Small Dining Rooms

The easiest way to create more space in a small dining room is to downsize the table. A small dining room table, or one with removable leaves that can be stored away when not in use, will go a long way in making the room look more open and spacious.

10.Decorating for a Small Living/Family Room

It is one of the most frequently used rooms in the house, especially for purposes of entertaining and relaxing, so decorating a small living room to be warm and inviting yet still appear spacious is very important. Sometimes the most effective way to increase usable space is to simply reorganize the furniture. Get as many items off the floor as possible by repositioning them on shelves if possible.

There Is More To Assuming A Mortgage

Many clients inquire about properties that are listed as having an "assumable mortgage"; if only it was that easy to take over a mortgage!

The concept of assuming a mortgage payment seems so appealing yet it’s not what it seems. There is a lot more to ‘assumable’ than that.

In a nutshell, an assumable mortgage is a mortgage where a buyer can take over the amount and terms and begin making mortgage payments based on the terms that have been agreed upon.

But nowadays, lenders require the assumer of a mortgage to qualify for the amount and interest rate of the mortgage, so you will still require a down payment (lenders will not finance 100% of the value of an assumable property) and a good credit score.

This can be accomplished by having the appropriate amount of equity built in to the property so that there is the equivalent of a down payment in the property or, you must still provide a down payment out of your own pocket.

With an assumable, you have to qualify for the original mortgage the property was purchased with, so it is not as simple as just taking it over.

Therefore, if you wanted to buy a particular property and you are satisfied with the interest rate and purchase price, your real estate agent would arrange for you to talk to a representative of the lender who holds the mortgage (Wells Fargo, Citibank, etc) about assuming the mortgage. They will take an application from you and assess your ability to carry that particular mortgage, and determine if you will require an additional down payment (by assessing the purchase price in relation to the market value of the home).

If interest rates have risen since the original mortgage was taken out by the seller, the buyer is the party that benefits the most from an assumable mortgage. However, most recently, the situation can be reverse: interest rates are lower than what they were when mortgages of a longer term were taken out.

So, in many cases, when you take in to consideration the pertinent factors when assessing a mortgage (principal, rate, and down payment required) there may not be any benefit for you to assume older mortgages when you consider the rate that your own bank or mortgage broker can obtain for you.

So with an assumable mortgage, you take over the term, current interest rate and payments from the seller, and the seller is liable to the lender for any default by you.

These are just a few of the factors to consider with an assumable mortgage.

What If You Could Buy A Home 50K Under Market

With the unfortunate circumstances of foreclosures, home prices took a nosedive and left lenders with a huge inventory of homes. Some in pristine condition and many that became an eyesore, just waiting for anyone to take it off their hands. Those eyesores are available for sale at bottom dollar pricing.

You’re probably familiar with many of the acronyms including REO’s that banks are holding title to. These are homes that were foreclosed and were not sold at auction. These REOs are sitting there on the banks books waiting for the right owner at an unbelievable price.

Many of us have been looking at homes without real vision and seeing the potential the home may have. You can walk through a home where the appliances have been removed and copper pipes pulled out or perhaps even the walls have holes; but don’t turn and run just yet because a 203K Rehab loan could repair and upgrade all of that.

First of all, don’t let all the guidelines and paperwork scare you because there are some steps to take in order to secure a 203K Rehab loan; but they’re simple steps;

• Identify the property you’re interested in

• List specifically what must be done to the property and what you "want" to be done

• Give the items on your list an approximate estimate for the work to be done (get a contractor to provide some estimates and other general help)

• Submit the offer with your list

• After the offer is accepted contact a licensed contractor for an itemized estimate

• An FHA appraisal will be done and it will outline what absolutely must be done

• Revise and fine tune what will be done and we'll make a final FHA worksheet

• One closing and we are done!

The 203K Rehab loan is designed to allow homebuyers to purchase and rehab a home with a small down payment on a house and use their leverage to roll costs into the loan and still personalize with repairs and upgrades right from the start. It’s like starting off with a shell and customizing it. This rehab loan is definitely not for the homebuyer looking to move-in quickly, since any construction takes time to plan and complete. This is for the homebuyer that has a long-range plan.

Think of how much money is saved when you can get a deal on a home and then customize it to your liking.

And just because a home is labeled as a foreclosure doesn’t mean it’s gutted from the inside out. Many of these homes are in perfectly good shape with minor needs for repair. Here is a solution for finding your dream home and improving upon what you have.