Lehigh Valley Mortgage & Real Estate: 5 Factors That Decide Your Credit Score

Lehigh Valley Mortgage & Real Estate: 5 Factors That Decide Your Credit Score

Credit scores range between 200 and 800, with scores above 620 considered desirable for obtaining a mortgage. The following factors affect your score:

1. Your payment history. Did you pay your credit card obligations on time? If they were late, then how late? Bankruptcy filing, liens, and collection activity also impact your history.

2. How much you owe? If you owe a great deal of money on numerous accounts, it can indicate that you are overextended. However, it’s a good thing if you have a good proportion of balances to total credit limits.

3. The length of your credit history. In general, the longer you have had accounts opened, the better. The average consumer’s oldest obligation is 14 years old, indicating that he or she has been managing credit for some time, according to Fair Isaac Corp., and only one in 20 consumers have credit histories shorter than 2 years.

4. How much new credit you have. New credit, either installment payments or new credit cards, are considered more risky, even if you pay them promptly.

5. The types of credit you use. Generally, it’s desirable to have more than one type of credit — installment loans, credit cards, and a mortgage, for example.

For more on evaluating your credit go to www.MyFico.com

Reprinted from REALTOR® magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2008. All rights reserved.

Lehigh Valley Mortgage and Real Estate: Specialty Mortgages: Risk and Rewards

Lehigh Valley Mortgage and Real Estate: Specialty Mortgages: Risks and Rewards

In high-priced housing markets, it can be difficult to afford a home. That’s why a growing number of home buyers are forgoing traditional fixed-rate mortgages and standard adjustable-rate mortgages and instead opting for a specialty mortgage that lets them “stretch” their income so they can qualify for a larger loan.

But before you choose one of these mortgages, make sure you understand the risks and how they work.

Specialty mortgages often begin with a low introductory interest rate or payment plan — a “teaser”— but the monthly mortgage payments are likely to increase a lot in the future. Some are “low documentation” mortgages that come with easier standards for qualifying, but also higher interest rates or higher fees. Some lenders will loan you 100 percent or more of the home’s value, but these mortgages can present a big financial risk if the value of the house drops.

Specialty Mortgages Can:

•    Pose a greater risk that you won’t be able to afford the mortgage payment in the future, compared to fixed rate mortgages and traditional adjustable rate mortgages.
•    Have monthly payments that increase by as much as 50 percent or more when the introductory period ends.
•    Cause your loan balance (the amount you still owe) to get larger each month instead of smaller.

Common Types of Specialty Mortgages:

•    Interest-Only Mortgages: Your monthly mortgage payment only covers the interest you owe on the loan for the first 5 to 10 years of the loan, and you pay nothing to reduce the total amount you borrowed (this is called the “principal”). After the interest-only period, you start paying higher monthly payments that cover both the interest and principal that must be repaid over the remaining term of the loan.

•    Negative Amortization Mortgages: Your monthly payment is less than the amount of interest you owe on the loan. The unpaid interest gets added to the loan’s principal amount, causing the total amount you owe to increase each month instead of getting smaller.

•    Option Payment ARM Mortgages: You have the option to make different types of monthly payments with this mortgage. For example, you may make a minimum payment that is less than the amount needed to cover the interest and increases the total amount of your loan; an interest-only payment, or payments calculated to pay off the loan over either 30 years or 15 years.

•    40-Year Mortgages: You pay off your loan over 40 years, instead of the usual 30 years. While this reduces your monthly payment and helps you qualify to buy a home, you pay off the balance of your loan much more slowly and end up paying much more interest.

Questions to Consider Before Choosing a Specialty Mortgage:

•    How much can my monthly payments increase and how soon can these increases happen?
•    Do I expect my income to increase or do I expect to move before my payments go up?
•    Will I be able to afford the mortgage when the payments increase?
•    Am I paying down my loan balance each month, or is it staying the same or even increasing?
•    Will I have to pay a penalty if I refinance my mortgage or sell my house?
•    What is my goal in buying this property? Am I considering a riskier mortgage to buy a more expensive house than I can realistically afford?

Be sure you work with a REALTOR® and lender who can discuss different options and address your questions and concerns!

Learn about the NATIONAL ASSOCIATION OF REALTORS® Housing Opportunity Program at http://www.REALTOR.org/housingopportunity. For more information on predatory mortgage lending practices, visit the Center for Responsible Lending at http://www.responsiblelending.org.

Reprinted from REALTOR® magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2008. All rights reserved.

Lehigh Valley Homes and Real Estate: 5 Property Tax Questions You Need to Ask

Lehigh Valley Homes and Real Estate: 5 Property Tax Questions You Need to Ask

1. What is the assessed value of the property? Note that assessed value is generally less than market value. Ask to see a recent copy of the seller’s tax bill to help you determine this information.

2. How often are properties reassessed, and when was the last reassessment done? In general, taxes jump most significantly when a property is reassessed.

3. Will the sale of the property trigger a tax increase? The assessed value of the property may increase based on the amount you pay for the property. And in some areas, such as California, taxes may be frozen until resale. In Lehigh and Northampton County areas, Re-assessments are NOT triggers by the sale of a property.

4. Is the amount of taxes paid comparable to other properties in the area? If not, it might be possible to appeal the tax assessment and lower the rate.

5. Does the current tax bill reflect any special exemptions that I might not qualify for?

Reprinted from REALTOR® magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2008. All rights reserved.

Lehigh Valley Real Estate & Homes – Common TOP 5 First-Time Home Buyer Mistakes

Lehigh Valley Real Estate & Homes – Common First-Time Home Buyer Mistakes

1. They don’t ask enough questions of their lender and end up missing out on the best deal.

2. They don’t act quickly enough to make a decision and someone else buys the house.

3. They don’t find the right agent who’s willing to help them through the homebuying process.

4. They don’t do enough to make their offer look appealing to a seller.

5. They don’t think about resale before they buy. The average first-time buyer only stays in a home for four years.

Source: Real Estate Checklists and Systems, http://www.realestatechecklists.com

Reprinted from REALTOR® magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2008. All rights reserved.

 

Lehigh Valley PA Bank Owned/Foreclosure Listings as of October 4, 2010

Lehigh Valley Bank Owned/Foreclosures Listings as of October 4, 2010.

• We will post Free Monthly links to properties that are Available as of the above date.

• If you would like to get Notified by Email when I add content to this site…sign up to the RIGHT.

• If you would like us to set you up on a Daily email list of Lehigh Valley Foreclosed/Bank Owned Listings that fit your specific needs…Please Contact us and we will set you up for FREE or you can Request a Search HERE.

• You can View a DEMO Lehigh Valley MLS Search HERE

• Listings are pulled by School District and we have provided the most popular Links..If you need information on another area in the Lehigh Valley, Please contact us.

Follow Link to Access Report

• Allentown, Southern Lehigh School District Listings: 74 Properties – Link Here

• Bethlehem, Nazareth, Whitehall/Coplay School District Listings: 36 Properties – Link Here

• Easton, Wilson, Bangor Area School District Listings: 40 Properties – Link Here

• Northampton, Catasauqua, Northwestern, Northern Lehigh Area School District Listings: 20 Properties – Link Here

• East Penn & Parkland, Salisbury Area School District Listings: 16 Properties – Link Here

Important Real Estate Disclosures

Moriah Represents the Buyer for the Listings above NOT the seller. The Seller’s agent information is available on all Reports.

This information is provided to you by Moriah Martin, Real Estate Agent with RE/MAX real estate through a report generated by the Lehigh Valley MLS system owned by The Lehigh Valley Association of Realtors.

This information is deemed reliable but not guaranteed. Changes to property Status and/or listing Prices can change on a Daily basis…please contact Moriah Martin for any questions on the current status and/or Listing Price of a property

Lehigh Valley Homes & Real Estate – Tips for Home Buying – Out of Pocket Expenses, What to Expect.

Lehigh Valley Homes & Real Estate: Tips for Home Buying – Out of Pocket Expenses when Buying a Home – What to Expect?

 

 So, what should you expect when Buying a Home in the Lehigh Valley?

Depending on What “Type” of Home you purchase will depend on the out of pocket expenses you may have as well as if your plan on getting a loan or paying cash. But, in most cases there are “standard” out of pocket expenses you will have and I will even give you the time frame as to when you will need this CASH on hand. 

Note: A good Rule of Thumb on Closing Costs if you are getting a loan is 6% of the purchase price – $100,000.00 home price would be $6000.00 in closing costs.

Standard out of Pocket Expenses for the purchase of a Residential Home

1) Making your offer – Your Good Faith Deposit – This Should be as much money as you can put down – nothing less than $1000.00.  Unless you are working with a Down Payment and Closing Cost Assistance Program like the Lehigh Valley HOOP Program or PHFA. This is proof that you do not have lots of money saved or in the bank and the seller understands the lower down money with your offer.

Once your Home Offer has been accepted and signed by the Seller

2) Home Inspection Fee within 5 days of your offer getting signed, in my opinion – Nothing less than $350.00 up to $600.00 (if the home has well and septic and is vacate…this will increase the cost up to and including $600.00) If the homes you are looking at have Public water and sewer and you get a Home Inspection and Termite..You are looking at about $350.00 to $400.00. Depends on what Home Inspection Company you use.

3) Appraisal Fee – This must be paid at your application appointment within the first 10 days of your offer getting accepted. This can cost on Average of $475.00.  This is one major reason why you should have your home inspection done within the first 5 days.  This way if you find out something that is major on the inspection and the seller will not negotiate with you..You are not wasting another 475.00 on an appraisal. Verify with your Mortgage Company

4) First Full year from Homeowners Insurance – This must be paid at least 2 weeks prior to settlement day.  Settlement is Typically 30 to 45 days from the time your offer get’s signed.  But, if you are purchasing a Foreclosure, then typically it may take 60 days to close. Short Sales are another story. Estimate Annual Cost: Average $700.00 per yr but depends on coverage.

5) That’s it – Then you will bring the rest of the Down Payment for your Loan that you will be getting to settlement.  Example: FHA Loan requires you put 3.5% down – $100,000.00 purchase price you would need a total of $3500.00 – $2000.00 down when you make your offer and then the remaining $1000.00 and ALL closing costs the day of settlement.  NOTE: Rule of Thumb for closing costs are 6% of the purchase price. But, it will depend on the home purchase price and the property taxes for the home…so, you need to get an estimate on each home that interests your before you count on anything. This will come from your Real Estate Agent & Mortgage Officer.

If you are interested in getting a FREE Home Buing Estimate tailored to your needs…just contact me via click, call or text.

You will get the following answers.

1)  Estimate on your Downpayment FOR different types of loans
2) Est closing costs
3) Est property taxes based on the Home type and area you plan to purchase in
4) The monthly payment…for the loan only and also including the taxes and insurance.
5) If you need to sell first – I can work up your net proceeds based on your Estimated Home Value too

You can not make GOOD decisions WITHOUT GOOD information.

Let me guide you.

When it comes to CASH out of Pocket there should be NO Surprises

 

Lehigh Valley Foreclosures & Buying Foreclosed/Bank Owned Homes – Financing Options BETTER than FHA – No Mortgage Insurance, No Appraisal, 3% down

Lehigh Valley Foreclosures & Buying Foreclosed/Bank Owned Homes – Financing Options BETTER than FHA – No Mortgage Insurance, No Appraisal, 3% down!

The HomePath Mortgage Program for Fannie Mae Bank Owned Homes – The Basic Details (other qualifications may apply) Today 10-7-2010 (only Lehigh & Northampton Counties) there are 259 Foreclosured Homes Listed and are either Available, Pending or under agreement right now. OF THOSE – Fannie Mae Owned = 77 ranging from 24,900 to 730,000.00

FACT: Foreclosures are one of the best ways right now to purchase a home and gain instant equity.

FACT: Banks need to sell their inventory because there is more to come for the next 2 to 3 years.

Program Requirements & Benefits – THE QUICK FACTS of the Standard Program NOT THE REHAB program

1) This program is ONLY available to purchase Fannie Mae REO (Real Estate Owned) Foreclosured Properties. But, there are plenty of them.
2) You can see all of these properties available Here: www.homepath.com – I can show you any of these properties located in the Lehigh Valley Area. (Lehigh & Northampton Counties)

3) There is NO appraisal which saves you 450 to 575.00 out of pocket cash within the first 7 days of your offer getting accepted.
4) If you have a credit score of 660 or higher you only need to put 3% down!
6) If you have a credit score of 620 to 659 you will need to put down 20%.
7) Primary Residence – Owner Occupied Homes (no investors basically) you can get up to 6% seller’s assist!
8) Investors can get 2% Seller’s Assist
9) The Buyer will be responsible for 2% PA Transfer Tax – Typically it is 1% to Buyer and 1% to 1% to seller – for this loan you “the buyer” pays both sides. This is 2% of the purchase price – 100,000.00 property 2000.00 transfer tax to be paid.
10) If the Buyer is only putting down 3% then they will also need to show they  have 2 Months of Loan Payments including property taxes and homeowner insurance payments in their bank account at settlement – This money can be a gift from a family member. This is known as 2 months reserve…just incase something happens like a job loss and injury..the bank sees that you can still cover 2 months in payments.

Owner Occupied VS Investor Rules for Making offers on a Fannie Mae Foreclosure/REO
(so, the key is to know soon as the property hits the market and don’t wait to make your offer) Again…Take a look at my Lehigh Valley MLS Search. Nothing is hidden from you and we work as a TEAM.

1st Look Program – Basically, if you go to www.homepath.com and the property is marked with the “First Look” label…this means that the home has just hit the market and the following rules apply.

The banks would prefer to sell foreclosed properties to Occupied homeowners…WHY? Good question.

Because people who owner there homes take better care of their homes! PERIOD. If the home goes back to a foreclosure in the future…there is a better chance that the home will be in better condition because tenants and investors on average don’t take care of the property like a First Time Home Buyer.

1) The home MUST be on the Market for 4 days BEFORE the bank will even look at offers.  You can make an offer and post date it but, it will be held and submitted on the 5th day.
2) ONLY owner occupied Buyers will be allowed to submit offers during the first 15 days on the Market.
3) Investors will be allowed to submit offers on the 16th Day.

Finally, How can you get this loan? Local in the Lehigh Valley Area.  The only player right now is Wells Fargo.  I know my blogs always talk about Wells Fargo – But, they are the ones who are stepping up to the plate to help people in all areas of these special Government incentives.  Both National and local.

PS: There are programs available through HomePath for investors also.  But, this Blog is focused on Residential Owner Occupied Homeowners.

PSS: Here is another reason that your first step should be meeting with a Real Estate Agent that is Foreclosure and Short Sale Certified.  They are the ones who can make sure you get the best deal with the best financing options.  Depending on who you talk to will depend on your end results.

Let me walk you through it, One Step at a Time.

Buying Lehigh Valley Foreclosed Homes – Bank Owned Homes & Getting a Loan to Buy them

Buying Lehigh Valley Foreclosed Homes & Bank Owned Homes – Getting a Loan to  Buy & maybe Rehab them.

Do you want a GREAT DEAL? Are you interested in finding a home that needs work but wonder how you can get a loan on the property? Then Rehab loans are for you. Learn Here.

Times have changed….we are digging our self out of a Recession and the way MOST are buying homes has also changed.

CURRENT FACTS

1) MOST Home Buyers are going with an FHA Loan where you only need 3.5% Down as ofToday.not allow any major home repairs and this will make it impossible for home buyers to purchase the below properties.

2) The problem with the Standard FHA Loan is there is an FHA appraisal required that will

SO HOW CAN YOU BUY THE FOLLOWING TYPES OF PROPERTIES THEN?????

Our Current Lehigh Valley Real Estate Market is filled with the following types of homes.
Homes that Need “TLC”
“Handman Specials”
“Investor Specials”
“Foreclosed Properties – Enter at your own Risk” know as Bank Owned Homes
“Vacant & Occupied Short Sales”

The way to purchase homes like this IS the best KEPT secret in THE Lehigh Valley Area.

Now, this type of Financing is NOT something you can do on your own…you need the guidance of professional Mortgage Renovation specialists and a Real Estate Agent “Buyer Agent”  who also works with Home Buyer’s interested in purchasing Distressed – Handyman Specials, Foreclosures and walking you through the entire process of purchasing a home and getting a rehab loan that fits your needs.

NOTE: NOT EVERY MORTGAGE COMPANY WORKS WITH THESE PROGRAMS
NOTE: NOT EVERY REAL ESTATE AGENT IS INTERESTED IN HELPING BUYER’S WITH THESE PROGRAMS.
NOTE: IT IS HARD TO FIND INFORMATION ON THESE PROGRAMS AS IT IS NOT QUICK AND EASY TO DO…BUT WORTH THE TIME AND EFFORT. That is why you only found my Blog on the topic.

NOTE: Depending on the Home you are interested in purchasing and the location of the home will depend on what type of loans are availalbe to you.

But, here are some of the Programs made for these types of homes that need “TLC”

1) FHA 203K Streamline – Rehab Loans – smallier repairs up to about $20,000.00
2) FHA 203K Standard – Rehab Loans – Larger repairs – You can do complete rehab inside and out

3) Also, if the home is a Foreclosured Home/Bank Owned Home and THE Owners name is Fannie Mae – then it may qualify for a HomPath Mortgage (currently loan without Rehab is available) There is a national bank that does the rehab loan for this also. See My Blog on HomePath Mortgage Loans.

Make sure the Loan Officers and Real Estate Agent you are working with Specialize in Foreclosures and Rehab loans or they will have no clue and/or they may not be interested in finding a clue.

In the Lehigh Valley – Wells Fargo is the only player for these loans right now…and you need to make sure the person you speak to at Wells Fargo specializes in these loans.  I have the contacts…just shoot me an email.