Posts Tagged "FHA"

How To Buy A House And Get The Money To Fix It Up!

Posted in For Buyers, Mortgage Loans

You are First Time Homebuyers and you have Found THE HOME.  You have watched DIY and HGTV and you know you can do everything those couples do on the home improvement show, but beyond the down payment, you have very little money to replace the cabinets in the kitchen, tile the bathroom and maybe add a family room in the basement.   What’re ya gonna do?

Cheer up little buckaroo, as sure as the sun shines, or in Utah the rain comes as of late, you can accomplish all those magical repairs, rehab your home and live the life of Riley (now that Really dates me doesn’t it).

How can you accomplish this miraculous feat you ask?  Simple, with an FHA 203k rehab loan.  This most fabulous loan will allow you to not only purchase your home, but finance the improvements as well and keep it all in one mortgage at low FHA loan rates.

Now, what Can you do with an FHA 203k loan you ask?  Any or all of the following:

• Paint
• Repair a kitchen
• Add a deck or patio
• Insulate for greater energy efficiency
• Replace flooring ie tile, carpet, etc
• Add a bathroom, replace a bathroom
• Finish a basement
• Replace windows
• Replace Appliances ie stove, furnace, water heater…energy credit
• Add central air (again energy credit here)
• And Much More

What Can’t you do with an FHA203k mortgage loan?

• Put in a pool or an ice skating rink
• Add a Theater Room and all the equipment (you could get away with the room)
• Buy a Ferarri
• Any other Luxury item, like gold plating the baseboards
• Putting in a yard

So what do I have to do to get one of these FHA 203k loans you ask?

There are hoops to jump through to qualify for this kind of mortgage (what government program Doesn’t have hoops?)

• Owner/occupants only…no flipping or investors (and no you don’t have to be a 1^st time homebuyer to qualify)
• The house must have been completed for at least 1 year , no new construction houses, sorry
• You will need to have 2 appraisals (one for the as-is value now and one for the projected value once the work is completed)
• Only 1 appraisal for a HUD Home- ask me how you can get one of those for $100 down!
• You must identify the repairs and work to be done, and have a written estimate of materials and labor by a licensed contractor and an interior plan of the home.
• Note here: You can actually do the work, but you must have enough in escrow for labor in case you don’t get it done in a timely manner.
• Repairs and addition must have the proper permits, inspections and be done to code
• And most of all…..you must be able to qualify for the finished product (cost of house + rehab money), so you can’t buy that million dollar fixer upper guys, sorry…..well unless you can Afford that million dollar home.
• You must still have your 3 ½ percent down payment for the entire purchase price (home + rehab money)

So, if you’re game for the hoop jumping, have the vision to make the ugly duckling into a swan, then the FHA 203k loan is just what you are looking for.  Give us a call (yep the number is right up top) or text us…or you can even email us… and we will help you get started, both with the mortgage and with finding the right home to apply it to!

Is It REALLY A Buyers Market?

Posted in For Buyers, General Musings

Looking For Your First Home?

First Time Homebuyers in the Salt Lake Area, as in other areas, are being repeatedly bombarded with the message that it’s a Buyers Market, you can get screamin’ deals, housing prices are hitting rock bottom. Sellers are desperate to sell and will accept anything, Foreclosures and Short Sales are the easy pickins’.  Heard anything like that?

While many buyers are finding and purchasing homes, what I am seeing more and more these days is that first time buyers especially are becoming disappointed, frustrated and  understandably burnt out by repeated attempts to “catch the bargain”.  Those homes priced under market value (usually short sales and bank owned properties) in the first time homebuyers price range (usually under $250,000) are hotly pursued with multiple offers coming from cash buyers or strong buyers who don’t need closing costs paid by the seller and can close quickly.  And with multiple offers, the price goes up.  A home listed under market value at an enticing price of $160,000 with multiple offers ultimately sells for its true market value of $180,000. Kinda makes it seem like it’s not so much a buyers market, right?

Well, its still a Buyers Market in the sense that there are many properties for sale in the Salt Lake Area, but you may need to step back and develop a different strategy for purchasing your home, especially if you are like most first time homebuyers, stretching the dollars to get the most house for your money….with an FHA loan and needing 3% closing costs to make it happen. So here are a couple of tips to make it less frustrating:

• Look at your “wants” list versus your “needs” list. Prioritize those elements that are truly important to you, the ones you cannot live without, and then think of everything else as gravy.  Remember, there is no such thing as a perfect home and your first home will not be your dream home. Your goal should be to buy  a home you can afford, then use the equity in the first home to get into your dream home.
   
• Revisit your home budget and perhaps reset it, and then avoid looking at homes near the top of your price range..  Keep to the mid range of where you are comfortable payment wise, and then you have a little room to go up in price if you find a really great home with multiple offers.
   
• Learn that Short Sales are not always the best deal.  Short sales are their own little class of real estate and although they seem to be a way of getting a $250,000 property for 185,000….they really aren’t.  Properties selling short are oft times set artificially low to generate an offer to go to the bank (A bank won’t look at a short sale until they have an offer to go with it).  You can never guarantee that the price listed is even the price the bank will accept. So… you could wait 2 or 3 months for the bank to process the sale and have the bank return a price that is $20,000 more than you can afford to pay.
• (and pssst…. Here is an extra bonus) Foreclosures or bank owned properties are lots easier to work with, take less time….and can usually get you a better deal!  But you have to be quick on foreclosures, so don’t hesitate to make an offer, cause others will and you want to be the FIRST OFFER.
• Make a decision when you find a home you like.  If you like a property, chances are others are going to like it too.  The biggest problem I see with homebuyers today is procrastination…waiting, thinking the deal will get better or another house will be better; then missing out on the house they want because it goes under contract while they are making a decision.  This is called “analysis paralysis”, and even in a buyers market, it can cost you.
•  Finally, don’t get stuck in one area.  There are great neighborhoods all over the Salt Lake Valley and bad pockets as well. Don’t overlook great neighborhoods just because they don’t have the right zip code, and remember that you might pay much more for the location than for the house itself.

To sum it up, have patience and expand your horizons. Home hunting can be fun, so relax and go with the flow.  And by all means….pick a Realtor that laughs! (giggle, giggle)