Union County Real Estate Talk

Use FHA 203k Financing to Make that Ugly Distressed Property Your Charlotte Dream Home

Interest rates at historic lows.  Lots of homes at discounted prices.  Foreclosures, short sales, distressed properties. There’s never been a better opportunity for a Charlotte NC home buyer to get a great deal on a home with an affordable payment.

You agree.  You should take advantage of the opportunities in this real estate market. 

What holds you back is the condition of all those distressed properties.  Ugly outdated kitchens.  Missing appliances and light fixtures.  Walls with holes.  Stained worn carpet.  Furnaces and air conditioners that don’t work.  You can’t see these ugly houses as your home and after making a down payment and paying closing costs, you can’t afford to fix them up.

Don’t let condition and repairs keep you from being a Charlotte NC home buyer.  There is a solution.  Consider an FHA 203k loan to finance both the purchase and the renovation of that fixer-upper.

The FHA 203k loan program has two types of loans that can be used for renovations.  The Standard 203k will cover structural repairs and landscaping and site work.  The Streamline 203k covers repairs and renovation up to $35,000.  Structural work and landscaping are not covered under the Streamline program.

How does the FHA 203k program work?  A scope of work for the repairs is identified and cost estimates are developed by a contractor or contractors.  The participating lender orders an appraisal, approves the buyer’s qualifications for the loan including the budget and cost of repairs.  Once the loan is approved, closing of the property occurs with funds for renovations set up in an escrow account.  The renovation must be completed within six months of closing for the streamline program.

What  repairs are eligible under the FHA 203K program?

Streamline 203k repairs include roofing, gutters and downspouts, heating and cooling systems, plumbing and electrical, flooring, kitchen remodeling, interior and exterior painting, appliances, decks, porches and patios, window and door replacement, and wells and septic systems.  No structural work is allowed under the streamline program.

The Standard 203k program includes everything allowed under the Streamline program as well as structural renovations.  Under the Standard program, you can move load-bearing walls, repair structural damage, add rooms, improve landscaping or finance renovations that will take longer than six months to complete.

Want to know more? 

Contact Carol Fox of Allen Tate Realtors at 704-905-3935.  Carol recently completed training to become a Certified 203k Specialist and can provide you with more details about the program.

Copyright 2010.  Carol Fox.  Allen Tate Realtors.  *Use FHA 203k Financing to Make That Ugly Distressed Property Your Charlotte Dream Home*

Charlotte NC Home Buyers—Mortgages Then and Now

If you are like the average Charlotte NC home buyer, you have probably moved to a different home every five to seven years.  You probably got a mortgage when you made that move.  Getting the mortgage then was most likely fairly easy.  A cake walk.

That was then.  This is now.  Getting a mortgage today is not what you remember. 

I’m writing this post because my recent buyer clients, who have purchased homes before, are finding the mortgage process to be different than what they expected and very stressful.  I hope that I can explain today’s process and provide some answers that will remove some of the anxiety and stress from getting a mortgage.

 If you are a Charlotte NC home buyer today, here are three  things to consider about the mortgage process.

How long will it take to get loan approval?

Then

No so long ago, there was very little documentation required to get a mortgage.  There were even loans called no-doc mortgages where nothing was verified on your loan application.  the basic steps in the process were the same for all loans but there were no mandatory timetables for processing a loan.  You could get your loan approved very quickly.

Now

No documentation and no mandatory disclosures and timetables led to fraud and consumer abuse.  The inevitable crackdown led to new regulations.  Now, you can get preapproved by a lender but until there is a purchase contract, the lender can’t generate the necessary disclosures for you to review and sign.  Once those disclosures are generated, there is a mandatory three day waiting period before the lender can proceed.  Monies to pay for the appraisal can’t be collected by the lender until you have received the disclosures.  If there are any changes to the loan such as a new rate lock or a different loan amount, the disclosures have to be generated again.  From the time the initial disclosures are issued, there is a waiting period of seven business days before you can close.

Why does the lender ask me for so much documentation?

Then

No documentation led to fraud and abuse as stated above.

Now

Expect the lender to require documentation of everything about your financial life.  No documentation loans have turned into fully and well documented loans.  Often, one document that you provide leads to more questions and requests for additional documents.  It can seem like a never-ending process.  Remember “stated income” income loans where you filled out the loan application stating what your income was without any proof?  They don’t exist anymore.  In fact, a new Lender Quality Initiative means that the lender has to pull tax transcripts as part of the process to ensure that your tax returns match what your loan application says.

How will my credit score affect my loan?

Then

There was a loan program for just about any credit score.  Sure, you might pay a higher interest rate or an obscenely high rate in the case of really low scores, but you could get a mortgage.

Now

Your credit scores will have to be near or above 700 for most mortgage programs.  This means that if you are contemplating a move, determining what your credit score is should be your first step.  If it is too low, work on credit repair.  Even if you have good credit and you are in the loan process, don’t do anything during the loan process that will affect your credit score.  The lender is now required to pull a second credit report just before closing.  You could find your approval rescinded if you’ve taken on new debt and you no longer qualify for the loan.  Always delay all purchases of furniture and appliances until after your loan closes.

Want to know more about buying a home in Charlotte NC and its small towns?  Visit www.CarolinaSmallTownLiving.com.

Copyright 2010.  Carol Fox.  Allen Tate Realtors.  *Charlotte NC Home Buyers—Mortgages Then and Now*

Charlotte NC Home Buyers—Did Your Lender Pre-Qualify You, Pre-Approve You or What???

Are you a potential Charlotte NC home buyer?  Have you spoken with a mortgage loan officer?  Did your loan officer give you a document that says that you are qualified to purchase a home?  Are you mystified about what that document means?

I have learned to be wary of the pre-qualification and pre-approval letters that mortgage lenders issue to home buyers.  Here is why.  As a Charlotte NC home buyer, you may think that you have a document that entitles you to purchase a home without further scrutiny or loan hurdles.  In reality, what you may have is only an opinion from a loan officer that will not stand up to today’s documentation and review process.

Learn the four types of approval letters that lenders issue to make your home-buying process smoother and easier.  This is what you need to know.

• Pre-Qualification Letter.  This is the first step.  You speak with a loan officer on the telephone, the loan officer pulls your credit and asks you about income type and amount and financial assets.  None of your financial information has been verified and the loan officer can only issue an opinion that you should be able to qualify if your information checks out.  In my opinion, it is too early to make an offer on a home if you are at this stage.
• Pre-Approval Letter. To get this letter, you must take the next step and fill out a formal loan application form.  Your loan officer should ask you to supply documentation on income and assets that supports what you put on the loan application.  Your application is then submitted to an Automated Underwriting System or Desktop Underwriting System.  If this computer program gives you an accept, you can get a pre-approval letter.  Keep in mind that this approval is conditioned on an underwriter’s verification of the data entry into the program, any outstanding documentation, a property appraisal and title work for the property.  If the underwriter is unable to verify what is on your loan application, then the pre-approval letter is invalid.  I believe that most home buyers can make an offer on a home at this stage unless their financial situation is so complex that they should go to the next step.
• Approval Letter.  After the loan officer takes the application and gathers all the required documentation, an underwriter reviews the package for compliance with the Automated Underwriting Acceptance, mortgage product and lender guidelines.  If your loan package clears all of these hurdles, you can get a true approval with conditions letter.  Conditions could include additional documentation, an acceptable home appraisal, and clear property title.  Some lenders won’t issue an approval letter without the appraisal and title work.  Once you get the approval letter, the process is nearly complete, but you still must clear appraisal and title work hurdles.
• Commitment Letter.  Once the appraisal, title work and homeowner’s insurance policy are received, reviewed, and approved by the underwriter, you will get a commitment letter.  This letter states that you are approved with no conditions outstanding preventing the loan from closing, except perhaps a statement showing the prior sale of your current residence.  Your file is now Clear to Close.  Congratulations!  A clear to close means that you’ve made it to the end of the process.

Want to know more about buying a Charlotte NC home?

First Time Home Buyers Guide

Home Buyer Tax Credit

Copyright 2010.  Carol Fox.  Allen Tate Realtors.  *Charlotte NC Home Buyers—Did Your Lender Pre-Qualify You, Pre-Approve You or What???*

Charlotte NC Home Buyers—IRS Issues Documentation Rules for Home Buyer Tax Credit

Are you thinking of taking advantage of the Home Buyer Tax Credit in 2010?  If so, you need to know the eligibility requirements and deadlines for the program.  In addition, the IRS has issued new rules requiring certain documentation to be submitted with your request for the tax credit. 

What do Charlotte NC home buyers need to know about the home buyer tax credit and the new documentation requirements?

Who qualifies?

• A first time home buyer is someone who has not owned a principal residence during the three years prior to the date of purchase.
• A repeat buyer is someone who purchases a home to use as a principal residence after living in their current residence for at least five consecutive years in the past eight years.

What is the amount of the tax credit?

• First time home buyers may get ten percent of the cost of the home up to $8000.
• Repeat home buyers may get ten percent of the cost of the home up to $6500.

What are the deadlines?

• The home must be under contract by April 30, 2010 and close no later than June 30, 2010.

What documentation must be submitted when claiming the Home Buyer Tax Credit?

• IRS Form 5405 must be submitted along with certain documentation.
• First time home buyers must submit a copy of their settlement statement, or HUD1 form, with Form 5405.
• Repeat home buyers must include documentation to show their five-year residency in the previous home, such as mortgage interest statements, property tax records, or homeowners insurance records.
• Tax filers wishing to claim the Home Buyer Tax Credit must file with paper forms rather than electronically because of these documentation requirements.

What should be the first step in the process for Charlotte NC home buyers who want to participate in these programs?

• First time home buyers should contact a real estate broker and a mortgage loan officer for home purchase prequalification.  Learn more about buying your first home here.
• Repeat home buyers will want to contact a real estate broker to determine the value of the current residence.  Click here to request a comparative market analysis of your home.

Copyright 2010.  Carol Fox.  Allen Tate Realtors.  *Charlotte NC Home Buyers—IRS Issues Documentation Rules for Home Buyer Tax Credit*

Charlotte NC Tops Forbes List of Best Cities to Buy Real Estate Now

Are you are a renter?  Should you become a home buyer?  A new study may give you some answers.

According to Forbes Magazine, now may be the best time in years for Charlotte NC renters to become home buyers.  Forbes created a list of top cities that are the best places to buy real estate and Charlotte NC came in at Number 2 on the list. 

How did Forbes identify the best cities to buy now?

First, the Forbes study looked at the premium to buy, which is the difference between what you pay monthly to own a home versus renting.  The premium to buy has dropped dramatically.  Forbes then looked at future appreciation from the five-year Case Shiller home price outlook.   A low premium to buy combined with excellent future appreciation prospects identified ten cities as smart places to buy a home now.

Here are the numbers for the Charlotte NC metropolitan area from the Forbes study.

• Premium to buy, 15 year average:  56.9%
• Premium to buy, Q3 2009:  48.2%
• Five-year home price index forecast:  12.55%
• Median rent:  $671
• Median home price:  $199,600.

The First Time Home Buyer Tax Credit gives Charlotte NC renters another reason to buy now.  Contract for a home by April 30, 2010 and close by June 30, 2010 and you may be eligible for up to $8000 in tax credits from the federal government. 

Click here to learn more about tax credits for first time home buyers and repeat buyers.

Copyright 2010.  Carol Fox.  Allen Tate Realtors.  *Charlotte NC Tops Forbes List of Best Cities to Buy Real Estate Now*

Charlotte NC Home Buyers--How the 2009 Mortgage Disclosure Act Affects Your New Mortgage Loan

The next time you get a new mortgage loan, you may notice some changes in documentation and procedures due to the Mortgage Disclosure Act that took effect on July 30, 2009.  The purpose of this new law is to protect you, the Charlotte NC home buyer, from deceptive lending practices and to ensure that you are a well-informed consumer.  It improves the timeliness and effectiveness of loan disclosures given to you, provides a waiting period for you to make an informed decision about your loan, and increases lender accountability.

What may be new to you...

• Loan disclosures must be given to you before appraisal fees are collected.
• Your loan cannot close before a waiting period of at least 7 days after the initial loan disclosure.
• If the APR (annual percentage rate) on the initial Truth-in-Lending disclosure increases beyond a certain amount, a new Truth-in-Lending disclosure must be issued.
• If a new Truth-in-Lending disclosure must be issued, there is a three day waiting period before the loan can close.

What could trigger a new Truth-in-Lending disclosure for a Charlotte NC home buyer?

• an unlocked rate
• a change in loan amount
• a rate re-lock
• a change in closing fees
• a change in closing date

Tips for a Smooth Loan Approval and Closing

1. Identify your final loan product and loan amount at application and make changes only if necessary.
2. Lock in your interest rate and points early in the process.
3. Provide all documentation requested as quickly as possible.
4. Respond quickly to any emailed disclosures.
5. Allow for a reasonable closing time, typically at least 30 to 45 days.
6. Work with your real estate agent to choose a closing attorney and closing date at the beginning of the process.

Copyright 2009.  Carol Fox.  Allen Tate Real Estate.  *Charlotte NC Home Buyers--How the 2009 Mortgage Disclosure Act Affects Your New Mortgage Loan*

Charlotte NC Short Sales and Loan Modifications

Charlotte NC home buyers who are considering the purchase of a "short sale" property often ask me why they are so difficult and why a bank would foreclose on a property rather than take a short sale offer where they would most likely net more from the sale than if they foreclosed.  The following post written by Katerina Gassett in Wellington Florida gives a great explanation of the reasons that a lender might turn down a short sale or loan modification request.

Charlotte NC First Time Home Buyers--Time is Running Out for the $8000 Tax Credit

97 days, 10 hours, 41 minutes, and 5 seconds.  That's how much time is left for Charlotte NC first time home buyers who want to take advantage of the $8000 tax credit.  If you intend to participate in the program, you must close your new home by November 30th, 2009.  You should be searching for a home now because once you get your chosen property under contract, it may take 45 days or longer to close the transaction.

I believe that the First Time Home Buyer Tax Credit program will create a frenzy over the next two months similar to the Cash for Clunkers program.  I experienced this first hand this week when I listed a very nice home in Matthews NC at a price attractive to first time home buyers.  Within the week, there were five showings of the property and four agents submitted offers.  Each of the offers was made by a first time home buyer.  Unfortunately, three of those buyers were disappointed not to get the property and will have to continue their search.  If you are a Charlotte NC first time home buyer, find a great agent to help you find a home, get pre-qualified for a mortgage and begin your search as soon as possible.

Learn more about the $8000 First Time Home Buyers Tax Credit.

Charlotte NC Homes for Sale that are Perfect for First Time Home Buyers

Here are two homes that are priced perfectly for Charlotte NC first time home buyers.

8525 Amelia Drive

This east Charlotte home is priced at $133,900 and has four bedrooms, beautiful hardwood floors upstairs and downstairs plus a beautifully landscaped half acre lot.  Update 11/09  8525 Amelia Drive is Sold.

6519 Mallard Park Drive

This home is located in the University area of Charlotte.  With four bedrooms, it is a great value at $150,000.

Copyright 2009.  Carol Fox  Allen Tate Realtors.  *Charlotte NC First Time Home Buyers--Time is Running Out for the $8000 Tax Credit*

Buying a home in the Charlotte NC marketplace?  Allen Tate Realtors now offers a Job Loss Protection program for qualified Charlotte NC home buyers.  The Job Loss Protection program can give you greater confidence to move forward with your home purchase in the current uncertain economy.

How does the Allen Tate Job Loss Protection program work?

• The program provides up to six months of mortgage payments during the first 24 months from date of closing if the borrower or co-borrower becomes involuntarily unemployed.
• Coverage is up to $1,800 per month.
• The program is offered at no cost to the buyer and must be funded by the seller.

Who is eligible for the Allen Tate Job Loss Protection program?

• The borrower must be employed full-time at time of closing.
• The borrower cannot be self-employed, an independent contractor or on active military duty.
• The borrower must be eligible for state unemployment benefits.

Who administers the Allen Tate Job Loss Protection program?

• The Job Loss Protection program is part of the HELP (Home Owner Education and Loss Protection) program administered by the Rainy Day Foundation.
• The Rainy Day Foundation is a non-profit organization whose mission is to assist individuals in maintaining home ownership.  The HELP Program provides voluntary financial and budget counseling to buyers via telephone and e-mail for the first 24 months following closing as well as emergency counseling and grants to assist home owners during times of financial hardship.

Charlotte NC home buyers who are interested in adding this protection program to their home purchase should contact me for a list of Allen Tate homes currently offering the Job Loss Protection program.  I can also offer the program on any Charlotte NC home for my qualified buyer clients.

For more information about the Allen Tate Job Loss Protection program, contact Carol Fox at 704-814-6242 or via email.

Visit www.CarolinaSmallTownLiving.com to learn more about buying your next home.

Copyright 2009.  Carol Fox.  *Charlotte NC Home Buyers Now Have Job Loss Protection*

Matthews NC first time home buyers should take note of a recent IRS press release designed to educate consumers about ways to claim the first time home buyer tax credit available for home purchases in 2008.  According to the press release, the Treasury Department wants taxpayers to maximize their credit and get their money back as soon as possible.  I'm sure that every eligible first time home buyer would agree with Treasury's goals.

What are the basic provisions of the First Time Home Buyer Tax Credit?

• Matthews NC first time home buyers can claim up to ten percent of the purchase price up to $8000.
• The credit amount will be phased out if your adjusted gross income is more than $75,000 for single filers or $150,000 for joint filers.
• The First Time Home Buyers credit does not have to be repaid provided the home is your principal residence for three years after the purchase date.

What are the filing options for a Matthews NC first time home buyer according to the IRS?

• File an extension.  If you haven't filed your returns yet but are buying a home soon, you can request a six-month extension to October 15th.
• File now, amend later.  You can file your return now, buy a house and file an amended return later to claim the tax credit.
• Amend your 2008 tax return.  If you've already filed your 2008 tax return, you can file an amended tax return to claim the tax credit on the 2008 return.
• Claim your credit in 2009.  You can wait until 2009 to claim the credit if it makes more financial sense to do so.

Get more details at IRS.gov on the revised Form 5405 First-Time Homebuyer Credit.

Read more about programs for first time home buyers in North Carolina.

Matthews NC First Time Homebuyers--Claim Your $8000 Tax Credit in 2008   

First Time Home Buyers in North Carolina--Get Help with Your Down Payment

Click here to learn more about buying your first home.

Copyright 2009.  Carol Fox.  *Matthews NC First Time Home Buyers--The IRS Wants to Help You Get Your $8000 Tax Credit*