The zero-down loan? It’s making a comeback
NEW YORK – June 16, 2017 – Buyers may soon be able to bring less to closing. They were blamed for precipitating the housing crisis years ago, but major lenders are giving no- and low-downpayment loans another shot.
Several major lenders are reportedly offering loans with just 1 percent down. Navy Federal, the nation’s largest credit union, offers its members zero-down mortgages in amounts up to $1 million. NASA Federal Credit Union markets zero-down mortgages as well.
Quicken Loans, the third highest volume lender, offers 1 percent downpayment options, as does United Wholesale Mortgage. And the Department of Veterans Affairs has offered zero-down loans to eligible borrowers for many years.
Also, Movement Mortgage, a large national lender, has introduced a financing option that provides eligible first-time buyers with a non-repayable grant of up to 3 percent. As such, applicants can qualify for a 97 percent loan-to-value ratio conventional mortgage, which is basically zero from the buyers and 3 percent from Movement. For example, on a $300,000 home purchase, a borrower could invest zero personal funds with Movement providing $9,000 down. The loan also allows sellers to contribute toward the buyer’s closing costs.
So far, the delinquency rates on these low- to zero-down payment loans have been minimal, according to lenders. Quicken Loans says its 1 percent down loans have a delinquency rate of less than one-quarter of 1 percent. United Wholesale Mortgages told The Washington Post that it has had zero delinquencies from the borrowers on its 1-percent down loan since debuting it last summer.
For Movement’s new loan product, the lender will originate the loans and then sell them to Fannie Mae, which remains under federal conservatorship. Fannie officials released the following a statement:
“(We’re) committed to working with our customers to increase affordable, sustainable lending to creditworthy borrowers. We continue to work with a number of lenders to launch (test programs) that require 97 percent loan-to-value ratios for all loans we acquire.” They add that there “is no commitment beyond the pilots,” which are “focused on reaching more low- to-moderate income borrowers through responsible yet creative solutions.”
During the housing crisis, zero-down loans were among the biggest losses for lenders, investors and borrowers. However, housing experts say the latest versions are different from years ago. Applicants must now demonstrate an ability to repay what’s owed. They also must have stellar credit histories and scores, and lenders require a lot more documentation to prove borrowers are in good standing.
Also, many of the programs are charging higher interest rates. For example, Movement’s rate for its zero-down payment option in mid-June was 4.5 percent to 4.625 percent, compared with 4 percent for its standard fixed-rate mortgages.
Some critics say that the borrowers who really could benefit from such options aren’t able to qualify for them. Paul Skeens, president of Colonial Mortgage Corp. in Waldorf, Md., told The Washington Post that “it seems like people without excellent credit scores and three months of [bank] reserves don’t qualify.”
Source: “No Down Payment? No Problem, Say Lenders Eager to Finance Home Purchases,” The Washington Post (June 14, 2017)
Buy a home, Millennium Sales, Berta Correa, Investing in Real Estate.
When Hurricane Matthew threatened South Florida last October, it gave the region a frighteningly realistic dress rehearsal for the hurricane season that begins Thursday.
Emergency operations centers cranked into action. Shelters opened, brigades of electrical workers went into the field and thousands of government workers set aside their usual jobs to attend to their hurricane battle stations.
The preparations exposed flaws, particularly in managing shelters. There were water shortages, long lines and an insufficient number of Red Cross volunteers. But the storm also showed that the billions spent hardening the electrical grid paid off, as Florida Power & Light was able to restore power much more quickly than in the past.
Officials say the brush with Matthew left South Florida in a stronger position to face whatever challenges come with the new season.
“Matthew was probably one of the best exercises we could have had, in terms of all the preparatory steps we had to take,” said Curtis Sommerhoff, Miami-Dade County’s emergency management director. “It gave us the ability to shake a little bit of the rust off.’’
Hurricane season runs through Nov. 30, with the peak coming in mid-August through September. The National Oceanic and Atmospheric Administration predicts this year’s season will be more active than usual, with five to nine hurricanes, of which two to four will be Category 3 or above, with winds of at least 111 mph.
Hurricane Matthew, which briefly reached catastrophic Category 5 strength, approached South Florida in early October, moving parallel to the coast until it made landfall Oct. 8 in South Carolina. The last hurricane to hit South Florida was Wilma, in 2005.
As Matthew loomed over the region, Palm Beach County was expected to get the worst of it. Officials opened 15 shelters and announced a voluntary evacuation of the coast.
Hardly anyone evacuated. The next day, the county issued a mandatory evacuation, and many coastal residents complied. Such a gradual approach is unlikely to be repeated.
“We originally said something like ‘We strongly encourage evacuations,’” said Bill Johnson, Palm Beach County’s emergency management director. “That could place a bit of doubt. In the future we’re going to be very clear about what we mean about evacuations. I don’t think we’re going to try to mess with voluntary versus mandatory. We’re just going to say ‘Evacuate, period.’”
Johnson said the county had doubled its number of shelters, but he said the Red Cross was unable to fully staff them. The county then quickly trained staffers to step in. Johnson said the Red Cross will retain a role in staffing shelters, but it will be a diminished one, supplemented with county workers.
Roberto Baltodano, spokesman for the American Red Cross – South Florida Region, denied there had been a staffing failure.
“The Red Cross opened and staffed every shelter requested by Palm Beach,” he said.
Another problem appeared at Palm Beach County’s pet-friendly shelter, which quickly got overcrowded — with people. The county requires that family members stay at the shelter with their pets, so each puppy might be accompanied by a family of four. Johnson said this year an additional shelter will be designated pet-friendly.
Still, Johnson said, “We did well in Matthew overall. In spite of the fact that it’s been a decade-long drought, I believe that for the most part our activities went according to plan.’
The Red Cross fully staffed shelters in Broward and Miami-Dade counties during Matthew, but this season the organization said it can staff only half of Broward’s 14 shelters, said county emergency management director Miguel Ascarrunz.
Ten Broward shelters were opened during Matthew and took in more than 2,000 people, according to the county’s report on its response, which listed several problems.
Long lines stretched outside shelters, with evacuees waiting up to two hours as police officers conducted background checks. Water wasn’t immediately available at some shelters. All three homeless assistance centers and the Broward Addiction Recovery Center evacuated 1,100 people by bus to Arthur Ashe Middle School in Fort Lauderdale and Coral Glades High School in Coral Springs, overwhelming them.
Still, shelter staff did “a remarkable job in a short amount of time,” according to the county’s report.
Ascarrunz said Broward has taken steps to deal with problems exposed by Matthew, including meeting with the Broward Sheriff’s Office to avoid to the background-check bottleneck and training 150 county workers to run the shelters.
“We’ve made good progress,” he said.
For Florida Power & Light Co. and its customers, the lesson from Matthew was clear: The investment of nearly $3 billion to harden the grid since the debacle of Hurricane Wilma has paid off.
Although Matthew knocked out power for about 2 million FPL customers, the company restored service to nearly 99 percent within two days. This was a big improvement over the aftermath of Wilma in 2005, when thousands of customers lost power for more than a week, with some waiting up to 18 days for the restoration of service.
Wilma, of course, was a direct hit on South Florida, not a glancing blow. After it struck, FPL was harshly criticized for poor maintenance that allowed rotted out power poles to topple in the storm. The investments made since then included replacing or reinforcing about 115,000 poles, as well as improving technology and redundancy throughout the grid.
“What we learned is that a lot of those investments really paid off for customers,” said FPL spokesman Chris McGrath. “Not a single one of the power poles that we hardened failed in Matthew.”
Vacation in Fort Lauderdale – with your dog.
Did you know that a recent survey showed that 90% of dog-owning travellers consider their pet when booking accommodation? If you’re one of that huge number of people, then allow me to introduce to you our Fort Lauderdale vacation paradise – and yes, your dog is most welcome too.
In fact, we have special treats and amenities that are especially for him or her. But first, let’s look at your gorgeous home-from-home.
Yes, that’s your apartment on the right – upper floor. It has direct views over the wonderful Rio Grande canal. Right from your apartment, you can watch the water traffic go by. From the upper balcony or from the dock, enjoy your morning coffee or your evening glass of wine watching yachts, cruisers, paddle-boarders and more.
The apartment is located midway between the famous Fort Lauderdale Beach and the fabulous Las Olas Boulevard with its incredible boutiques, galleries and dining options – and many of those restaurants and cafés are dog-friendly.
Your vacation apartment is close to the very best Fort Lauderdale can offer – art museums, theatres, concert venues, historical sites, fine dining and so many attractions and events. And for your dog? In your apartment you’ll find:
- A beautiful, ultra-soft microfibre dog bed
- Organic dog treats
- Feeding and water bowls
- Custom-prepared book showing all the local facilities available to your pet
- Aromatherapy dog shampoo and conditioner (great for after the beach)
- Dog towel
- Collapsible dog bowl for when you’re out sightseeing
- Um … waste bags
And for the human guests?
- A cute Mid Century Modern apartment right on the water
- Free wifi and cable TV
- Free designated parking right in front of the building
- Central air conditioning (so important in Florida)
- Beach chairs, beach umbrella, cooler for your snacks
- Onsite manager to answer your questions / supply extra provisions
- Tourist guides and money-off coupons
- Top quality linens and towels
Curb appeal is your home’s first impression on prospective buyers and, as we all know, first impressions matter. Make a big mistake in the presentation, and you’ll have a hard time getting buyers through the door.
But how do you know if you’re making a big mistake? It depends. Check out how close you are to these curb appeal disasters.
1. The outside doesn’t match the inside
Paul Sableman/Flickr CC
Chain-link fence, overgrown lawn, no landscaping … even if your house is gorgeous inside, potential buyers might not be able to see its beauty if they need a weed whacker to get to the front door.
We’ll repeat it: First impressions matter. No matter how great your personality is, you wouldn’t go on a first date without brushing your teeth and hair and putting on pants (we hope). So you shouldn’t put your home on the market without a little TLC, either.
“There is nothing worse than seeing pictures of a home’s beautiful interior online only to find that they completely neglected the outside of their home,” says Liz MacDonald, Philadelphia-based home stager and host of the web series Shelf Help.
2. Overflowing (or visible) trash cans
Charles Wagner/Flickr CC
Trash, shockingly enough, is a nonstarter for most home buyers. Obviously, garbage spilling over your lawn is a big no-no. But even the sight of trash cans on the curb can be a turnoff.
“Make sure to keep those trash bins out of sight and as empty as possible at all times,” MacDonald says. “The last thing you want buyers to think about when making a first impression is the trash.”
If you need to move out before the home sells, make sure to check in on things regularly (or have a friend or neighbor do it for you). Movers may leave stuff behind or the neighbor’s trash may blow into your yard—things happen—just don’t let buyers see it.
3. The half-finished house
Joffre Essley/Flickr CC
Unless you’re selling your house as is or as a tear-down, don’t leave any outdoor home improvement projects incomplete. If the first thing that buyers see is an unfinished paint job or patchy roofing, odds are good they’ll assume the inside is unfinished as well and just keep on driving.
4. An overly unique sense of style
Love your bright violet front door? Think your flock of pink flamingos is delightfully kitsch? Are you certain your giant dinosaur-shaped mailbox is so you? We get it. Being able to display a style all your own is one of the best aspects of homeownership.
That is, until you go to sell your house.
“Keeping items like lawn art or ornaments is too specific to appeal to the masses,” MacDonald says.
Rein it in on the inside and the outside, otherwise potential buyers will just see a whole lot of weekend work ahead.
“Your best bet is to go neutral to appeal to the broadest range of buyers,” MacDonald says. That means no bright colors, no unusual trim choices, and no DIY garage-door mural (even if it is kind of adorable).
5. The barren wasteland
Carolyn Williams/Flickr CC
One of the biggest mistakes you can make is to do nothing at all. No matter how clean, updated, and sellable your house is, there’s something extremely off-putting about not having any landscaping.
Houses with nothing green going on just seem, well, naked. And you don’t even have to do much—or spend much—to make your yard pop.
“Modern and minimal is always the way to go,” MacDonald says.
Add some simple shrubs that are native to your area, a few flower beds or fruit trees for some color, and voila—you’ve got curb appeal.
6. The overcrowded porch
A big, comfy porch is like catnip to buyers on the prowl, but only if you’ve done it right. If your porch is overflowing with large chairs, planters, and hanging baskets, buyers are going to feel claustrophobic—not cozy.
“Keeping it simple is key,” MacDonald says. “You want to showcase the space without any clutter or extra pieces of furniture that don’t function specifically for the purpose of enjoying your porch.”
Do your research, choose your listing price, and watch the buyers line up.
Unlike the cost of a gallon of milk or a flat-screen television, a home’s price can be hard to pin down. It’s complicated because each home is unique, and has its own story to tell.
When it comes to setting the price of a house, the only thing to do is to look at the recent sales and active listings of similar homes in your area. Combine this research with the inside market knowledge of a local real estate agent, and you can confidently choose your list price.
Here are some guidelines to keep in mind when determining how much to ask for your house.
Make sure to look at recent comps
Markets change fast, so it’s best to find comparable sales within the past three months. If you go back too far, you will see homes where a deal might have been made many months before it closed.
Real estate markets can turn on a dime, so a deal put together more than six months ago isn’t applicable. Pending sales are your best indicator of the current market’s conditions.
Understand that fixtures and finishes matter
Let’s face it, buyers prefer a tastefully renovated home with neutral finishes and fixtures over an unrenovated home, one stuck in the ’80s, or one with outlandish decorations.
When looking at comparable houses online, you must be objective. If your home isn’t updated, it’s not going to sell for as much.
Here’s the good news: The amount of money it would cost to upgrade your house is probably a lot less than the difference in value. Be open to making some small changes before listing.
No two homes are alike
The 2,000-square-foot, 3-bedroom, 2-bath home with two-car parking on a quarter acre down the street just closed for $500,000. That means your home — also a 2,000-square-foot, 3-bedroom, 2-bath house with two-car parking on a quarter acre — is also worth $500,000, right?
Not so fast. What you don’t realize is that the other home’s three bedrooms are not all on the top floor, and that the home lacks an en-suite master bathroom, its kitchen is closed off from the living areas, and the layout is choppy.
Buyers pay more for better floor plans and flow. Your home, with an open concept kitchen/living area and three bedrooms all near each other, is much more valuable.
Small nuances in the market will affect price
Understand that each comparable home requires some serious research before calling it a “comp.” A house down the block may seem like it’s the same location as yours, but it could be in a different school or tax district, which will affect its value.
A smaller home may have sold for 20 percent more than yours, but maybe it was on a double lot that could be split, which makes it more valuable to a builder or developer.
If you see a nearby home with a price that seems off the mark, there must be a reason. Dig deeper to uncover what it is, and realize that the home may not, in fact, be a comparable one.
Go see homes for sale
Rarely does anyone decide to sell overnight. Once you realize a sale is in your future, get out and see what’s in your market. Check out open houses nearby to see the interiors for yourself.
Homes you see in January will likely be pending or closed by the time you list in April. Or they may still be on the market, which is an indication of poor pricing.
Check out the different floor plans, finishes and fixtures of nearby homes for sale, and consider whether each is more or less valuable than yours.
The best seller is the informed one. So don’t rely solely on your agent’s word about a particular house, or the market in general.
Use your agent as a resource
The earlier you bring a local real estate agent into the fold, the better. Top agents tour properties regularly, and know their market inside and out. They can likely explain the seemingly inexplicable, and offer tips to help make your home more valuable.
A good agent has the inside knowledge on pending homes sales and their finger on the pulse of the market 24/7. But remember to research independently, and never rely solely on the advice of your agent.
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Heed these 8 suggestions from real estate pros to ensure your property gets the highest possible price.
Little things mean a lot when it comes to selling your home and getting a great price for it. But if everything counts and you have only so much time and money to invest, how do you know where to start to get your home for-sale ready and to fetch the best price?
As we head into the hottest selling season and with 5.3 million homes expected to change hands this year, use some or all of these strategies to help you leverage all you can against the competition.
- Stage and declutter your home
One of the panel members Consumer Reports consulted was the former executive producer for This Old House, Massachusetts realtor and renovation consultant, Bruce Irving. Bruce was previously interviewed by Oprah protégé, Nate Berkus, and The New York Times called him “the house whisperer.”
“Do all the work necessary to make your property look good, not through expensive changes but through excellent staging,” says Irving. “Your agent should be able to provide proper advice and even bring in a professional.”
That means clearing out your clutter.
“I have a gal who I send into listings to declutter and depersonalize for sellers and just tidy things up using the sellers’ own possessions for the most part,” says Karen Wallace, an agent with Lyon Real Estate, located in Auburn, CA.
Tara Miller of Tarabell’s Designs in Portland, OR, does just that: she helps homeowners and agents stage their houses for maximum sales appeal.
Miller points out that people who don’t keep up on needed repairs end up spending the most when it comes time to prepare a home for sale.
“It’s remarkable what regular home maintenance, cleanliness, and minimizing clutter in your everyday life can do for you when it comes time to sell.”
She also notes that staging a home is very different from designing or decorating. “It’s a tough thought, but not everyone likes your pets, hobbies, sports teams, or religion.”
2.Clean it up!
“If it’s dirty, it will not sell — even if it’s a great place,” says Kathy Partak, a realtor with Select Estate Properties in Auburn, CA.
In fact, most of the agents we spoke to focused on overall cleanliness and space as the biggest factor in selling your home.
And cleanliness pays off, according to Consumer Reports: cleaning can deliver a 3% to 5% return on investment, and this is something you can do yourself.
When showing your home, Irving adds, “Raise window blinds, lower toilet seats — make sure the place looks at least as good as it would if you were having your boss over for dinner.”
3.Enhance your curb appeal
First impressions sell your home. As soon as a potential buyer drives up to your house, they’re making judgments — and a messy yard or a broken mailbox could cost you.
“Exterior space is ‘free’ extra square footage and is so appealing to buyers,” says Wallace. “It pays to enhance it.”
But if your staging budget doesn’t include the outdoors, Partak suggests making the most of the walk from the car to the entry.
“Make it look nice from the curb with some easy potted or planted flowers to trim the walkway.”
4,Pay attention to details
The details that you may believe are insignificant can turn out to be major selling points for your home. For Irving that includes everything from paint touch-ups throughout the house to a full redo of public rooms.
“Wash your windows, replace compact fluorescent bulbs with incandescent or halogen, and remove or minimize personal photographs,” he says.
If you have a small budget, Partak suggests upgrading to energy-efficient windows, and adding new appliances in the kitchen. “These are always the things that bring in more money.”
5.Refresh your kitchen and bath
Don’t forget two of the the most important rooms in your home: the kitchen and bathroom. Consumer Reports estimates that you can increase your home’s value by as much as 7% through renovation.
If you don’t have renovations in your budget, Kristen Kohnstamm, principal broker and co-owner of Dunthorpe Properties, a luxury real estate firm in Portland, OR, recommends fresh paint, a low-hanging opportunity to freshen up your space and potentially boost your asking price.
Choose a neutral palette to increase the appeal to as many tastes as possible; buyers need to be able to easily visualize themselves living in the home, and bright colors might turn them off.
“The worst thing you can do is put lots of money into things like carpet, paint, and other aesthetics that a new homeowner will likely want to change,” says Kohnstamm.
6.Invest in good photos
Make sure your real estate agent offers great photos that show your home in its best light when it comes time to list. Home buyers seeking a new place to live will see the pictures online before ever making a decision to visit.
And when it comes to open houses and showings, Irving suggests you “absent yourself” because sellers can sometimes get in the way of a sale by taking things too personally.
7.Don’t DIY everything
Irving’s top tip includes a good finger-wagging at people who think they can DIY a home sale and still come out ahead.
“First and foremost, for correct pricing, widest and best marketing, and the highest price, hire a real estate agent,” says Irving.
8.Try not to take it personally
Kohnstamm cautions first-time sellers to temper their emotions when it comes to the sale of their home. This won’t necessarily increase the value, but will speed up the sale.
“Whatever comments are [made] about your home, they’re never intended as a personal affront. Remember, everyone has different tastes, but clean and well-maintained never goes out of style.”
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8 Common Home-buying Mistakes
Gearing up to buy your first home? Not so fast. Here are 8 common mistakes you’ll want to avoid.
1. Shopping for a home before you get preapproved
Searching for a home is exciting, and it can be very tempting to hire a real estate agent and immediately begin shopping. The problem with this is twofold: you may not fully understand your price range, and you won’t be able to make a qualified offer when you do find the perfect home. Getting pre-approved for a mortgage before you shop will allow you to refine your price range, and enable you to quickly make a strong offer on the home you desire.
2. Not knowing your credit score or debt-to-income ratio
Your credit score and debt-to-income ratio are two of the most significant metrics that lenders use when approving you for a mortgage. You can find your credit score on sites such as freecreditreport.com and creditkarma.com, and you can calculate your debt-to-income ratio by dividing your recurring monthly debt by your monthly gross income.
3. Forgetting about property taxes and home maintenance fees when budgeting
Monthly mortgage payments are often significantly lower than renting costs, but they’re not the only cost of owning a home. Property taxes, homeowner’s association fees, and home maintenance costs can add significantly to your monthly expenses. Make sure to incorporate these into your budget.
4. Picking the first mortgage company and product you see
The lender and mortgage you select can help save you thousands of dollars over the course of your mortgage loan. Before choosing a lender, search for their current interest rates online and compare those with other lenders. After you’ve narrowed your choices to a few lenders, determine which lender will give you the best advice when choosing your mortgage product.
Certain mortgage products may be great for one borrower but not for another. For example, ARM loans are great for borrowers who will be moving or refinancing soon, whereas fixed rate mortgages are great for borrowers who are settling down.
5. Not budgeting properly for closing costs
Closing costs add up quickly. Taxes, origination fees, the down payment, attorney fees, title insurance, and all other closing costs place a large initial hurdle to buying a home. Make sure to thoroughly inspect your HUD-1 Settlement Statement before you close to budget and understand your closing costs.
6. Skipping the home inspection
Home inspections are often considered to be an annoying expense, but the value of a home inspection can be massive. To an untrained eye, the home you’re looking at may seem perfect, but an inspector will help point out any potential flaws in the home. These will give you a better understanding of the home you’re buying, and will allow you to negotiate with the seller for repairs or credits.
7. Buying when you’re in a transient stage
The closing costs for buying a home are not the only expense you’ll have when transferring ownership. Selling costs can also be extremely pricy – especially when you seek the assistance of a real estate agent. If you think you may move in the next year or two, it is probably smarter to rent instead of buy.
8. Relying on verbal commitments
Don’t trust any commitment unless you have it in writing. Having a commitment in writing will give you legal leverage if the other party attempts to back out of their commitme
Filed Under: Buying/Selling, First Time Home Buyer, General, Homeowner Tips, Purchase
Tagged with: First Time Home Buyer, first time home buyer mistakes, first time home buyer tips, first time homebuyer, home buying mistakes, home buying tips, homebuying mistakes
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