These days one of the biggest impediments to closing a Reno/Sparks real estate sale can be the buyer’s ability to get a mortgage.
Here are some tips for anyone who hopes to land a loan:
- Turn to the government. The biggest source of loans these days is the Federal Housing Administration (FHA) and the Veterans Administration (VA). These programs accept borrowers with lower credit scores and allow them to put down as little as 3.5 percent of the purchase price.
- Document, document, document. Borrowers will need bank statements, brokerage statements, W-2 forms and tax returns.
- Boost credit scores. Borrowers should avoid having more than one-third of their maximum borrowing capacity outstanding on one credit card. If necessary, rotate the debt among several cards.
- Work your connections. Comparison shopping is easy online, but if your customer has an established relationship with a local bank, suggest they try that lender first.
Source: BusinessWeek.com, Christopher Palmeri (01/23/09)
Being a Reno/Sparks real estate consultant I always appreciate any question or comments on the Reno/Sparks real estate or any of the articles I post.
Send all questions to chance@ballard-company.com
Northern Nevada Business Weekly Reports:
Sales of 294 existing homes were reported in Washoe County during December, up 34% from the same month a year earlier. The RSAR says the median price of $218,900.00 was down 23% from a year ago.
Being a Reno/Sparks real estate consultant I always appreciate any question or comments on the Reno/Sparks real estate or any of the articles I post.
Send all questions to chance@ballard-company.com
FHA Loans have several advantages over conventional loans, including lower down payments and more relaxed credit-qualifying guidelines. The federal government created FHA loan programs to encourage homeownership throughout the country. The FHA can help people to obtain a loan with little or no down payment. The FHA does not supply the loan; it simply insures the loan to limit the risk to the lender. HUD and FHA offer many valuable programs to offer people who wish to purchase homes.
Benefits of a FHA mortgage:
- A 3% down payment, as opposed to a 5% down payment on traditional loans
- Low monthly mortgage insurance
- Low closing costs, which are regulated by HUD
- No credit score requirements
- Qualify for a loan two years after a bankruptcy
- Qualify for a loan three years after a foreclosure
The FHA loan guidelines are more relaxed than conventional loan guidelines; this includes less strict regulations about past bankruptcies and/or foreclosures, job requirements, use of alternative credit, and debt-to-income ratios. The FHA ensures that their interest rates remain competitive with the interest rates of conventional loans.
FHA loans were originally created to help first-time buyers; people who are not first-time buyers may qualify, however, the FHA does not allow anyone to have more than one FHA-insured loan at a time.
The borrower is required to pay an insurance premium upfront, but this premium can be financed into the loan amount directly. The borrower must also pay a monthly premium, which is .5% of the total loan amount divided equally over 12 months. Unlike a conventional loan, the FHA requires a termite report and clearance, as well as a few other property condition standards, to qualify for a loan.
Types of FHA Mortgages
- Conventional Fixed Rate Mortgages are set for a certain amount of time at a specific interest rate. The interest rate never changes, which means that your mortgage payment remains the same throughout the life of your loan except for fluctuations in property taxes and homeowner’s insurance. Fixed rate mortgages are usually not assumable and often have a prepayment penalty. Fixed rate mortgages are good for people who plan to own their home for a long period of time.
- Conventional Adjustable Rate Mortgages are set for a certain amount of time, but the interest rate changes over the lifetime of the loan. Usually the interest rate is a fixed for the first three or five years, but after that period of time the interest rate will rise and so will your mortgage payments. Adjustable rate mortgages are good for people who plan to stay in their home only for the amount of time that the interest rate is fixed.
- Hybrid Mortgages are similar to adjustable rate mortgages, but the fixed-rate time period is usually longer. For example, a hybrid mortgage may have a fixed interest rate for the first ten years and then the interest rate will increase. Hybrid mortgages are good for people who plan to spend many years in their home but know that they will eventually move into a new home.
- Jumbo Fixed Rate Mortgages are specifically for borrowers who are seeking a mortgage for $333,700 or greater. It is risky for a lender to finance a mortgage this high, so jumbo fixed mortgages are designed for large mortgages that are set for the lifetime of the loan, and the interest rate is usually higher than a conventional fixed rate loan.
- Balloon Mortgages are when a borrower makes smaller payments at the beginning of the mortgage and then pays off the entirety of the loan at a later date. This is good for people who know they will have a large sum of money in the future, or for people who need a lower payment now but expect to make more money in the future.
- Relocation Mortgages are available for people who need a loan to relocate to a new home while their existing home is for sale.
- Bridge Mortgages are similar to relocation mortgages; you can purchase a new home prior to the sale of your existing home. You will have a larger mortgage payment because you will pay for both homes until the existing home sells. However, if there is a home you want to purchase immediately and you are afraid that it will sell while you wait for your existing home to sell, then you can purchase the home with a bridge loan.
- Equity loans allow you to take a loan out on your home based on the existing equity percentage of your home.
- Self-Employed Income Mortgage Loans are available for people who are self-employed, and thus have difficulty showing proof of a steady stream of income.
- The VA’s Home Loan Guarantee Program for veterans is very similar to FHA loan programs. Veterans can get loans through the FHA to buy a home with no down payment, and get money to make home and energy-efficient improvements to their new homes.
These are just some of the many loans available for people who are looking to purchase a home through the FHA
Being a Reno/Sparks real estate consultant I always appreciate any question or comments on the Reno/Sparks real estate or any of the articles I post.
Send all questions to chance@ballard-company.com
The first thing most people do to make them not qualify for a loan to buy Reno/Sparks real estate is add on additional credit such as:
1.) Buying a car
2.) Getting additional credit cards
3.) Co-signing for a family member
The second thing is to change jobs while in the loan process to buy Reno/Sparks real estate.
The third is missing payments or paying bills late while in the process of buying Reno/Sparks real estate.
Being a Reno/Sparks real estate consultant I always appreciate any question or comments on the Reno/Sparks real estate or any of the articles I post.
Send all questions to chance@ballard-company.com
This is about 1/3 of the Reno/Sparks real estate market. Unlike a short sale, when buying a foreclosure getting the offer accepted usually takes less than a week. Then the problems begin, one of the biggest is the title company. Depending on how over worked the staff is; these people work very hard, I had calls from them before 9:00 am and after 8:00pm. Another possible problem is the deed to the property has not been updated and needs to be (this happens only happens on a rare occasion). Very rarely will you close a foreclosure before the closing date. However, closing a foreclosure two to three weeks late happens regularly. While you can get a great deal on a foreclosure, be aware it might be a very frustrating process.
Being a Reno/Sparks real estate consultant I always appreciate any question or comments on the Reno/Sparks real estate or any of the articles I post.
Send all questions to chance@ballard-company.com
When buying a short sale, the first thing to understand is that it usually takes a while. This about 1/3 of the Reno/Sparks real estate market. The hardest part is getting an answer from the bank (hopefully your only dealing with one). This process can take months and it seems like the bank is in no hurry. This is where it seems most short sales fall apart as the buyer gets tired of waiting. Once the offer finally gets accepted, it will usually take less than 30days.
If dealing with two different banks from a 1st and 2nd mortgage this has the potential of being a real nightmare. The problem usually starts when the bank with the 1st mortgage has a policy that states it only will give the bank with the 2nd mortgage a certain amount no matter what the price. The bank with the 2nd mortgage has a policy that states it needs so much on every dollar that is owed. Which in most cases is a lot more than the 1st wants to give to the 2nd. With a lot of luck even this obstacle and be cleared (sometimes).
Being a Reno/Sparks real estate consultant I always appreciate any question or comments on the Reno/Sparks real estate or any of the articles I post.
Send all questions to chance@ballard-company.com
- Will Short Sales Save Housing? (curiouscapitalist.blogs.time.com)
If you look on the back of the power bill, this is a temporary charge to foster the development of new alternative energy projects in Nevada. Now please understand I have no problem with the development of alternative energy. I just thought you would like to know what your being charged.
Being a Reno/Sparks real estate consultant I always appreciate any question or comments on the Reno/Sparks real estate or any of the articles I post.
Send all questions to chance@ballard-company.com
Met with a gentleman last month. He says "Chance what can you do to sell my condo". First I let him know how people reason for buying has changed. Use to be a person would buy a house and the value would go up and they would have equity in their house. His condo a one bedroom 480sqft that was built in 1982, has been totally remodeled, similar properties once sold between $85,000 and $90,000. He understands that bank REOs and short sale have reduced their prices to sell. He also understands that he will have to compete with their price. So I show him how I will get him listed on several different web-sites. I also show him what the fliers or possible post cards will look like. I then explain different marketing techniques that will be used to sell his house. So we go over the comparable sales in the area and he decides to list this property for $55,000 (been reduced to $39,000). I explain to him how this is higher than anything in the area that has sold in the past 3 months. He understands that I feel this price is to high, but is close to what I think it should be listed at.
Doing the Math:
$39,000.00
- 8,000.00 down payment
$31,000.00 financing amount
$244 + 113.00 = $357.00
30yr fixed @ 6.5% monthly payment $244.00 plus insurance.
HOA fees $113.00
Profit $475.00 – 357.00 = $118.00
Rents going between $475.00 – $525.00
Profit $118.00/ month – insurance.
Interest rates and Insurance will verify.
Buyer to verify all rates and payments.
Like to thank National City Mortgage for the interest rate.
All information deemed reliable but not guaranteed.
A Short Sale is when the bank agrees to discount a loan balance due to an economic or financial hardship on the part of the home owner. The home owner sells the property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender. Usually the bank is in the process of foreclosing on the property due to the current owner defaulting on their loan and both the current owner and the bank that holds the note (mortgage) are involved with the process of selling the home and signing the necessary documents and disclosures. This about a third of the Reno/Sparks real estate market.
There is usually more time and ‘red tape’ involved with purchasing a Short Sale…especially if there is a 1st and a 2nd mortgage with two different lenders. Those can be a nightmare waiting to happen if you’re impatient. In other words don’t be in a hurry to close escrow on a Short Sale because it could take months. This is due to the sellers/homeowners must submit a “short sale package” to the bank that must be approved in order to consummate a short sale. This is where the timely process comes in, because if these packages are incomplete or submitted incorrectly (lenders requirements for their submission process & packages vary) the homeowner & agent can expect either significant time delays.
Highly recommend any Seller trying a short sale see a lawyer and an accountant to help avoid any delinquent judgments and/or tax implications.
Being a Reno/Sparks real estate consultant I always appreciate any question or comments on the Reno/Sparks real estate or any of the articles I post.
Send all questions to chance@ballard-company.com
|
|
Qty Sold
|
% Chg
|
Volume Sold
|
% Chg
|
Average Sale
|
% Chg
|
Median Sale
|
% Chg
|
Qty Active
|
% Chg
|
|
|
Current Period
|
181
|
|
42,853,317
|
|
236,758
|
|
214,500
|
|
451
|
|
|
|
One Year Ago
|
268
|
|
71,267,655
|
|
265,924
|
|
250,975
|
|
818
|
|
|
|
Increase/(Decrease)
|
(87)
|
-32%
|
(28,414,338)
|
-40%
|
(29,166)
|
-11%
|
(36,475)
|
-15%
|
(367)
|
-45%
|
|
|
Current Period
|
285
|
|
79,497,583
|
|
278,938
|
|
275,000
|
|
577
|
|
|
|
One Year Ago
|
280
|
|
92,614,349
|
|
330,765
|
|
318,000
|
|
950
|
|
|
|
Increase/(Decrease)
|
5
|
2%
|
(13,116,766)
|
-14%
|
(51,827)
|
-16%
|
(43,000)
|
-14%
|
(373)
|
-39%
|
|
|
Current Period
|
3
|
|
930,000
|
|
310,000
|
|
315,000
|
|
18
|
|
|
|
One Year Ago
|
13
|
|
5,238,300
|
|
402,946
|
|
405,000
|
|
40
|
|
|
|
Increase/(Decrease)
|
(10)
|
-77%
|
(4,308,300)
|
-82%
|
(92,946)
|
-23%
|
(90,000)
|
-22%
|
(22)
|
-55%
|
|
|
Current Period
|
8
|
|
2,974,000
|
|
371,750
|
|
280,500
|
|
42
|
|
|
|
One Year Ago
|
14
|
|
8,244,550
|
|
588,896
|
|
485,000
|
|
69
|
|
|
|
Increase/(Decrease)
|
(6)
|
-43%
|
(5,270,550)
|
-64%
|
(217,146)
|
-37%
|
(204,500)
|
-42%
|
(27)
|
-39%
|
|
|
Current Period
|
111
|
|
45,782,846
|
|
412,458
|
|
330,000
|
|
339
|
|
|
|
One Year Ago
|
86
|
|
47,317,692
|
|
550,205
|
|
527,000
|
|
459
|
|
|
|
Increase/(Decrease)
|
25
|
29%
|
(1,534,846)
|
-3%
|
(137,747)
|
-25%
|
(197,000)
|
-37%
|
(120)
|
-26%
|
|
Sub Total – RESIDENTIAL (All NW Reno)
|
|
|
Current Period
|
588
|
|
172,037,746
|
|
292,581
|
|
|
|
1,427
|
|
|
|
One Year Ago
|
661
|
|
224,682,546
|
|
339,913
|
|
|
|
2,336
|
|
|
|
Increase/(Decrease)
|
(73)
|
-11%
|
(52,644,800)
|
-23%
|
(47,332)
|
-14%
|
|
|
(909)
|
-39%
|
Being a Reno/Sparks real estate consultant I always appreciate any question or comments on the Reno/Sparks real estate or any of the articles I post.
Send all questions to chance@ballard-company.com
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