Buyer's FAQ Frequently Asked Questions 

                                

   

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Important Buyer Questions  


Q.  What is the advantage to owning vs renting? 

Owning, as a long term plan for investment, as well as a place to call home, is still the best way to go.  For example:  The average rent is $1500 per month, this payment is equivalent to a $253,000 mortgage at 4.5%.  Rates, prices and seller concessions have never been better.  Rent always goes up, however a fixed mortgage only goes up when taxes or insurance do.



Q.  What is a Reverse Mortgage? 

It is a great way for Seniors to stay in their home without the burden of a mortgage.  And now it is not just for refinancing, if you want to sell that big 2 story for that cozy ranch....this mortgage can help.  Shoot me an email for more details.   



Q.  Do I need Flood Insurance?

It depends on the elevation of your property, generally determined by a survey.  There are things that can be done to minimize the amount of flood insurance that may be required.  The more risky the zone (defined by a lettering system coupled with the structure elevation) the more costly the insurance.Additional information can be found: https://msc.fema.gov/portal#main-content



Q.  Do I need a home inspection?  

It is highly recommended, even with new construction.  There are all kinds of potential problems; everything from improper installation, material defects to lack of permits. 



Q.  How many investment properties can I own?

As many as you want BUT you can only own up to 10 financed properties per FNMA guidelines and the (hoops are large). FNMA.



Q.  What is the downside of a "short sale"?

A "short sale" is often a pre-foreclosure.  It is either a home where the owner is behind in the payments or the owner has to sell & is upside down in the mortgage (the mortgage is higher than the market value).  So, in order for the short sale to be approved by the lender, the owner has to prove financial need, inability to repay, and the lender must approve the price and terms.  If there is more than one lender, multiple mortgages on the property, it must be approved by all parties.  This process can take up to 8 months and the lender can disapprove the sale at any time prior to issuing their "short sale approval letter."  The price agreed upon with the Seller can be “renegotiated” UP by the lender after they do their own independent appraisals.  That is why there are so many foreclosures: the short sales are not working well.  Since it is a more "desperate" situation than an "arm's" length transaction, it may be priced below market.  It can be a good buy depending on the price, condition and if the buyer has the time to wait. 



Q.  What is the difference between a "Short Sale" & foreclosure? 

A short sale is owned by the current property owner, and the sale and terms must be agreed to by the owner and approved by all lenders involved.  A foreclosure is owned by the lenders and/or investors involved the process it is much shorter and definitive.



Q.  Can I get a mortgage on a foreclosed home? 

It depends on the condition of the property.  The lender is looking at the general condition, windows in not broken, roof in good shape, siding ok, all  major systems working etc.  If it is not you must resort to a fix up loan, FHA has a loan FHA 203k.  It is a little tricky but can work well.

 

 

Q.  What are points? 

Points are fees charged by the lender.  Each point is 1% of the loan amount being financed.  The lower the interest rate the higher the points (they are charged to offset the lower interest the investor will be earning on that loan.)



Q.  Can I buy a home with no money down?

Except for our Veterans, or Navy Federal members, the No Money Down loan has disappeared.  Risk is being assessed, and low down is considered a riskier loan than one with NO investment.

 

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