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.
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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Seller disclosure is a tricky maze to navigate. If you’ve recently decided to put your home on the market, you might feel hesitant to reveal problems (minor though they might be) which could discourage potential buyers. But not revealing them could get you in a world of legal trouble.
So how much do you really need to disclose? And how detailed do you need to be?
We’d love to give you a concrete answer. But disclosure laws vary by state—and even by city. So here are some basic rules to govern how and when you disclose any problems. (Just remember to do your research on local regulations, and check with your Realtor® and/or real estate attorney so you can know you’re totally covered.)
10 Essential Questions to Ask When Buying a Home (That You May Have Missed)
Do I Have to Disclose a Previous Repair?
Bad Neighbors, and Other Nightmares You Might Need to Disclose to Buyers
When in doubt, disclose
In general, sellers should disclose any known facts about the physical condition of the property, existence of dangerous materials or conditions, lawsuits or pending matters that may affect the value of the property, and any other factors that may influence a buyer’s decision.
But how can you possibly know what might influence a buyer’s decision? Maybe a window leaks a little bit when it rains or the basement just barely floods every now and then. Do you really need to disclose it? After all, you’ve learned to live with those things, so the buyer should be able to deal with them, too, right?
Wrong answer! Especially if you want to avoid a lawsuit down the line.
“Most sellers think it is in their best interest to disclose as little as possible,” says Rick Davis, a Kansas real estate attorney. “I completely disagree with this sentiment. In the vast majority of cases, disclosing the additional information (especially if it is something that was previously repaired), will not cause a buyer to back out or ask for a price reduction.”
That also means disclosing issues that have recently been repaired, Davis says. Why? If the buyer later discovers that a repair job was botched, you could be on the hook for additional repairs.
Always disclose inspection reports
In most places, you don’t have to provide copies of inspection reports, but doing so can save you a lot of trouble.
Here’s why: We already know that all sellers have a duty to disclose any “material defects.” And while buyers and sellers may disagree on what a material defect is, one of the best ways to avoid a lengthy legal battle is to just give the buyer all copies of past inspection reports you have—no matter how old they are.
That way, they can’t say they weren’t informed of a problem.
“Sellers should disclose anything and everything they can think of,” says Adam Buck, a certified real estate specialist with the Frutkin Law Firm in Arizona. “Ironically, the more disclosures you make, the less important they might become to the buyer.
“Think [of] prescription medication commercials,” Buck adds. “When was the last time someone decided not to use a new medication because of the laundry list of side effects rattled off at the end of the TV commercial?”
What you don’t know won’t hurt you
Although the threat of a lawsuit can be scary, there’s one thing you don’t have to worry about: The courts won’t hold you accountable for failing to disclose issues you’re unaware of.
Let’s say your house is infested with termites. But you’ve never seen one, or they were missed by an inspection (or maybe there never was an inspection). You can’t be held responsible for not disclosing this defect if it’s discovered by the buyer a few months after closing.
In fact, at a certain point the burden falls on buyers to do their due diligence to uncover any problems.
And if you don’t know, don’t guess
Buyers can ask for a lot of information about a home, including things you’ve never even thought about.
One common problem area in disclosure? Measurements of the home.
Even if you’ve had an appraiser check out your home, you may have no idea how many square feet it truly is because, as it turns out, there’s no single agreed-upon way to measure a home. Yep, that’s right. Three different appraisers can come up with three different measurements.
In a situation like that, it can be tempting to just guess or come up with an average. Resist the temptation, otherwise the buyers can come back later and say you lied or misled them about a material issue.
If you really don’t know the answer to a question the buyers are asking, just say you don’t know—and put it on them to find out the answer.
And if they push you for exact figures on something like square footage, make sure you properly attribute where those numbers came from.
Buck even recommends including a clause in the purchase contract that any square foot measurement quote is an approximation, and if this is a material issue for the buyers, it’s their responsibility to investigate it further.
Just remember: Don’t be afraid of scaring them off with too much information.
“It is much better to lose a buyer by clearly disclosing all known issues than it is to spend two years and tens of thousands of dollars in litigation,” Buck says.
Warren Christopher Freiberg is an attorney and freelance writer living in Chicago.
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