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
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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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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Evictions are a landlord’s worst nightmare. If you’ve been through the process, you know this from experience. If you haven’t, you likely know from other landlords’ experiences.
There is nothing enticing about going through what can be a long, expensive, and drawn-out process to force a tenant from your rental. If it’s come to this, it’s a safe bet that you’ve reached your limit with them, but what is the true cost of an eviction?
For your tenant, an eviction on their record can affect their credit score and limit their options on rentals in the future. An eviction judgement will be available to future landlords, employers, or anyone else that would search their public records. The eviction will remain on their report for, on average, about seven years.
Those are a few things that it will cost the tenant, which can be a major hindrance to them moving forward (and a good deterrent to keep them from breaking the lease in many cases!), but what does it mean for you as the landlord and property owner?
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6 Common Buyer Questions for Sellers
Home buyers want to know specifics about the homes that pique their interest. So be proactive and address their questions upfront by finding the answers to some of the following questions from your sellers before you list.
1. How old is the home? When was it last renovated?
2. How old is the roof?
3. What structures or fixtures are included in the list price? For example, is the seller OK with the appliances, ceiling fans, swing set, window treatments, and shed being included in the sale?
Read more: 6 Common Questions From Sellers
4. What are the home’s annual costs for upkeep? Provide estimates for electric, water, gas, trash, pool maintenance, lawn care, homeowners’ association, and any other regular fees associated with the home.
5. How is the home heated or cooled? How old are the units?
6. Are there any outstanding permits or liens on the property?