alex621's Blog: All Categories

If you are looking to buy in DC, please be aware of the real estate taxes on vacant properties. The DC government raises the real estate taxes drastically on vacant properties. The reason being, is that they want the owners to either sell them or rent them, therefore minimizing the over vacant properties in the DC and hurting home values. This applies to all residential homes. The DC taxes are usually based on the sales price, minus the Homestead exemption (which is $67,500), times the rate of .88 cents per 100. If you purchase a DC property make sure all parties are aware of this. This is not a deal-killer, as long as you can get in front of it. I am working on one right now, and I notified everyone, including the bank and underwriter, and we resolved it…

There are some areas that have a high number of manufactures homes, and borrowers who are either looking to buy or refinance these types of homes, should know some of the conditions and documents that banks will ask for. First, a great program for manufactured homes is FHA. With FHA you can go to max financing which is 96.5% loan-to-value for a purchase or a rate and term refi. On a cash-out, you will be maxed at 85%. A lot of banks will also go down to a low loan amount, I have seen as low as 50k. Here are some of the items banks and underwriters will ask for; A DOT tag, DOT is Department of Transportation.  You may also need to provide an engineering certificate stating the house is on a permanent foundation and that any attached structures or additions…

Right now buyers believe that buying a short sale home is a great bargain, and for the most part, they are wrong. When an offer is made on a short sale, the banks are taking up to 120 days to approve it. As a buyer, you need to wait for that third party approval, and therefore you cannot lock a rate until then. You are taking a big risk by missing out on historically low rates.

What potential buyers should be looking at, is homes for sale by individual owners. You can still get a great bargain, and lock in for 30-45 days, and take advantage of super low rates, while also receiving seller help to cover your closing costs. Potential buyers should look for some common signs; uncut lawns, vacant properties, homes listed for over 90 days, etc. Buying from…

A great investment opportunity that buyers are over-looking are multi-unit homes. Multi-units are considered 1-4 unit buildings. Anything over 4 units is considered a commercial property.  You can purchase these properties using an FHA loan. FHA offers awesome advantages. The first being a 3.5% down payment. The second being, on 3-4 multi-units, you can use projected rental income on the remaining units, you will NOT be occupying. This will be calculated by, “The appraiser’s estimate for fair market rent from all units, including the unit the borrower chooses for occupancy, and minus the greater of the; appraiser’s estimate for vacancies or the vacancy factor used by jurisdictional HOC”. (This is from MRI FHA Standards guideline book, section 603.03, third…

In this very strict market, underwriters are flagging everything. One item I have seen a lot of recently is customers turning in bank print-outs. There is nothing wrong with them, as long as they have a few key items. If they can printed on letterhead, that would be great. If not, please make sure you have a bank representative stamp, date and sign it the print-out. Also, please make sure they circle key information, like your account number, or your SS number. If you are using the print out to source and verify an Earnest Money Deposit, please also circle the EMD.

Please be aware, when you submit a bank statement for an EMD, banks will require a corresponding bank statement to show the check has cleared, and also that you have enough to cover any…

A lot of self-employed borrowers don’t pay them selves a salary and only take draws. If you have an S corporation, you need to pay yourself a reasonable salary it is required per their rules. If you only take out draws, as an S Corporation, and you get audited, you will have a lot of problems with the IRS, which no one wants. Also, when you pay yourself the reasonable salary, it must be documented. If you transfer money from a business account to a checking account, that will not suffice. You will have to submit IRS form 941 to show what your quarterly salary is. Most self-employed S corporations also pay themselves a end-of-the-year bonus from the proceeds of the company. For that to used in qualifying purposes, you will need to provide a 2 year average.… Read Full Post

On November 18th, FHA will be implementing new guidelines. Here are some of the highlights. Also, for the complete FHA announcement, please read the, FHA Streamline letter ML-09-32. On Streamlines, there will be a 6 month payment seasoning period required. If you have had your loan less than 12 months, you cannot have any late payments. If you have had your FHA loan over 12 months, “you cannot have more than one 30-day late payment in the preceding 12 months, AND have made all current payment for the three months prior to the date of application”. Also, there has to be a net tangible benefit to the borrower, examples are; Going from an AMR to a Fixed rate, or reducing the term of the loan, ex. From a 30 yr to a 15 yr. The reduction in payment must be at…

Most people have multiple trade lines, so they never become an issue. When they do become an issue is with a lot of first time home buyers. Sometimes these borrowers are living at home for free, so they cannot verify rent, and they not have a car, to show that debt as a trade lines. They may also have only 1 or 2 credit cards. I don’t want this to come across as a bad thing, because having little debt is a good thing. I just want to explain how it will apply to the approval process. The banks would like to see 3 or 4 trade lines that report to the credit bureaus for at least 12 months. Also, if you only have 1 or 2 small ones, like credit cards, you may not receive a credit score from all 3 bureaus. With 1 or 2, you may only receive 1 or 2 scores.…