Trusts and Wills- WW S1 E12

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Welcome to a new episode of Woke Wednesdays in Real Estate, where we’ll discuss the terms “will and “trust” as they’re often confused. One main difference between a will and a trust is that a will goes into effect only after you die, while a trust takes effect as soon as you create it.

When it comes to trusts, there are many types but it’s also important to address the issues that you may have to encounter in your estate plan.

We are going to divide trusts in 3 categories: revocable living trusts, Irrevocable living trusts and testamentary trusts.

1- Revocable trusts are those where someone creates the trust and funds his property into it. The trust’s terms can be changed during the individual’s lifetime.

2- Irrevocable trusts are pretty much the opposite, as once they are created they stay forever. It works basically this way: when you fund an irrevocable trust you place the property into the hands of someone else you’ve chosen as trustee. Once you’ve made this decision and created an irrevocable trust, you can’t take it back.

Why do people go for irrevocable trusts then? Well they bring in many great benefits such as very interesting tax implications that are worth to be taken into account and plenty of other benefits that anyone with great financial situation should consider.

3- Testamentary trusts: they are created by a testator and they don’t come into action till the death of the testator.

So, now you must be wondering: When do Wills and Trusts take effect?

Well, as we just mentioned, a last will and testament will be applied after the testator’s death and any living trust will come on the scene once the papers have been signed.

A will can only govern the disposition of property owned in your sole name at the time of your death, including interests you might have in property such as a tenancy in common.

A living trust can govern and distribute any property it’s been funded with. The grantor transfers his assets into it after it’s formed.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Jumbo Loans- MMM S1 E12

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FULL VIDEO: https://www.youtube.com/watch?v=grX0fjCt2wY&t=117s&list=PLwDXba_ZgjWxgzgVoKQgkLIKTzkvPT6ix&index=15

A Jumbo Loan is a very particular type of loan that is unlike any other conventional, as it’s designed for luxury properties in very competitive markets, which has big tax implications to take under consideration before making any decisions.

Should I qualify for a jumbo loan?

If you are aiming to purchase a home that costs around half a million dollars or more and you don’t have a big initial capital to afford it, a jumbo loan is perfect for you. However, get ready for much more rigorous requirements than in a conventional loan. Why’s that? The reason is because these are operations that involve a much higher risk for the lender, as there is a big amount of money involved and the risk increases.

Here are some of the minimum requirements: you’ re going to need to have a remarkable credit score that’s around 700 and above, as well as a low debt-to-income ratio(between 36%-43%).

Another common requirement is that you need to give proof of that you have cash on hand to afford the payments, which will probably be very high if you for example opt for a 30 year fixed-rate mortgage. Also remember, that for sure you’ll have to present 30 days of pay stubs and W2 tax Forms for the last two years.

In case you’re self-employed, the requirements will be even tougher, as you’ll have to proportionate two years of tax returns and at least 60 days of current bank statements. You’ll need to prove as well provable liquid assets and that you have enough cash reserves to afford 6 months of the mortgage payments.

Jumbo Loan Rates

But not all are bad news when it comes to the jumbo loans’ requirements, as the interest rates have been closing the gap to the conventional loans’ rates and nowadays they can be even lower.

Jumbo loans are often backed by other financial institutions; since these securities carry more risk, they trade at a yield premium to conventional securitized mortgages. However, this spread has been reduced, with the interest rate of the loans themselves.

What’s the down payment like in jumbo loans?

In the recent times, down payments have been going lower in jumbo loans, as it was used to be around a 30% of down payment and now it has fallen all the way down to 10% to 15%. A big reason for this, is that banks are always looking to find new customers that apply for jumbo loans, as jumbo loans borrowers are usually high profile individuals that institutions always love to sign up for long-term deals.

So, who should apply for Jumbo Loan?

As we mentioned in the beginning, these are very particular type of loans, which are made for high-income earners that make at least $150,000 to $500,000 a year but it all depends on how much monthly minimum payment debt a person is carrying and how much they have for reserves as well.  

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

How Does An Appraiser Verify Value?- WW S1 E13

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An appraisal is an unbiased professional opinion of a home’s value. It is very common to have them in any home purchase and is used to determine whether the home’s price is appropiate or not. It’s like a way to make sure that the lender is giving the property for a fair amount. It also protects the banks in worst-case scenarios.

Lenders want to make sure that homeowners are not overborrowing for a property because the home serves as collateral for the mortgage. If the borrower should default on the mortgage and go into foreclosure, the lender will recoup the money it lent by selling the home. The appraisal helps the bank protect itself against lending more than it might be able to recover in this worst-case scenario.

Note: If you’re considering a refinance, it is beneficial to research interest rates using a mortgage calculator.

The lender will be the main figure that gets protected under an appraisal, and will as well order the appraisal.

A property’s appraisal value is influenced by recent sales of similar properties and by current market trends. The appraiser will do a complete visual inspection of the interior and exterior and note any conditions that may affect the property’s value, such as needed repairs.

The report must include a street map showing the appraised property and comparable sales used; an exterior building sketch; an explanation of how the square footage was calculated; photographs of the home’s front, back and street scene; front exterior photographs of each comparable property used; and any other information, such as market sales data, public land records and public tax records, that the appraiser uses to determine the property’s value. Usually the borrower will have to take care of the appraisal costs.

If you’re refinancing a conventional mortgage, a low appraisal can prevent you from doing so. The home needs to appraise at or above the amount you want to refinance for your loan to be approved..

When the appraisal value is lower than expected, the transaction can be delayed or even canceled. Understanding how an appraisal works will always work in your favour.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Property taxes and how they are calculated- WW S1 E11

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FULL VIDEO: https://www.youtube.com/watch?v=5yHbCU1bd_g

Every homeowner has to pay property taxes every year and it may happen that some of them are overcharged. That’s why it’s highly important to maximize your returns and lower your costs.

In Sean La Rue Home Loans we understand how property taxes are calculated, and we can tell you that It is critical to make sure the appropriate rates are charged. This is the key to paying the lowest taxes possible and maximizing your returns.

Why are property taxes so important?

For any city council or state government, property taxes represent one of the big resources to pay really important services such as education, transportation, parks etc…. They estimate the money they need to pay all these services, and they based on the value of a the assessed value of a property, they make the tax rates.

Understanding how these taxes work and which deductions are applied will prevent you from overpaying.


How do we calculate property taxes?

We will know how much taxes we should pay for our home based on its value. However, what many may not know it’s that the land and the buildings on it need to be taken into account.

Assessors have two ways of calculating property taxes: using the mill levy or the assessed property value.

1- Mill Levy

The mill levy is the tax rate levied on your property value, with one mill representing one-tenth of one cent. Tax levies for each tax jurisdiction in an area are calculated separately; then, all the levies are added together to determine the total mill rate for an entire region. Generally, city, county and school districts each have the power to levy taxes against the properties in their boundaries. Each entity calculates its required mill levy, and they are then tallied up to equal the total mill levy.


2-Assessed property value

The assessed value estimates a fair value for a property based upon prevailing local real estate market conditions.

The assessor will be in charge of estimating its overall value by looking at similar properties in the market, how much the replacement costs for the property would be,etc…

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Purchasing furniture on credit before we close- MMM S1 E11

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FULL VIDEO: https://www.youtube.com/watch?v=ffvW_Lq5i18&t=0s&list=PLwDXba_ZgjWxgzgVoKQgkLIKTzkvPT6ix&index=2

The long process of getting a loan is over and everything is set for you to get a new place, the only thing left is to close on that future home of yours. What shouldn’t you do? Let me tell you what in today’s article.

We all know that before closing on a loan, one can be very excited and want to go crazy and buy big items such as bedding, new furniture…

There will be for sure very tempting offers in the market to satisfy those desires, but that can set you in a trap that can cost you the home. So don’t do it, just wait before you close.

Why? Because any meaningful movement in your credit cards will be noticed, especially when applying for a mortgage. So, be extra careful with any impulsive decisions that involve risking losing the home of your dreams. Once you have the keys in your hands and the house is officially yours, then feel free to fill it out with beautiful furniture and all kind of items you may want to buy.

When you are on the home-buying process, your credit is monitored till the day you close on a home, the fact that you’ve been pre-approved doesn’t mean you are done and you can start spending! You’re not done until the loan closes

If you really need some new furniture to fill your house, renting will be always a much better option than purchasing while you’re still waiting to close on a mortgage.There’s often no hard credit check and given that your store-bought furniture will likely take several weeks or months to be delivered, and it can be a more cost-effective option.

Switching jobs at the last minute could be an issue as well, as if you’re making money money with one company but then you switch to another one, that will for sure slow down the process because everything needs to be validated and they need to find out where everything is coming from.

It’s also important to let your lender know if you’re getting large deposits, such as gifts from family members or withdrawals from your IRA to help with the down payment.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Property Tax Deduction- WW S1 E10

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Full Video: https://www.youtube.com/watch?v=ELqM_5n3jrA&t=0s&index=2&list=PLwDXba_ZgjWwOKhc2UP4pxFUXzYO2eP0Q

Property tax deduction are generally those property taxes that someone can deduct from their federal states.

But the question is: When can we ask for a deduction from our property taxes?


We’ll be able to ask for it when we are using our home for personal uses or itemize deductions on our federal tax return. When we say personal property, that includes a taxpayer’s main home, vacation home or a property in a foreign country.

Also, keep in mind, that the real state taxes that we can deduct include the closing costs when buying or selling a property and taxes paid to a county or town’s tax assessor on the assessed value of the personal property.

Now, let’s go over those taxes that we won’t be able to deduct.

Taxes paid on rental or commercial property and property not owned by the taxpayer cannot be deducted. Also, if you are a seller who has paid the seller’s delinquent taxes from a previous year, you won’t be able to apply any deduction for those taxes, as this is a kind of tax that is considered as part of the cost of buying a new place and not deductible.

Another key thing to keep in mind: In order to claim a property tax deduction, the tax must only apply to the value of the personal property owned and be charged on an annual basis. Therefore, if the state tax was only charged at the time the property was purchased then it does not meet the IRS definition of a deductible personal property tax.

A taxpayer can itemize deductions if the sum of all his eligible itemized expenses is greater than the standard deduction allowed in a given tax year.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay positive and stay hungry!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Over Improving Property and Rehab Loans- Woke Wednesdays In Real Estate S1E9

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Full Video: https://www.youtube.com/watch?v=uVVIg1DXNXw&t=6s

Sometimes we purchase a new property and we over improve it to the point where we may not get our investment back. We have to consider how the potential buyer is going to value those improvements and see if it’s worth it for us as potential sellers. The key to find success in Real Estate is to make sure that the buyers get a property they want with the improvements they want.

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So here it’s a tip for today’s episode: before making any improvements in your property, find a buyer that’s interested in purchasing it and adapt the home improvements to the buyer’s desires to assure you get a great deal!

 

 

Do you want to upgrade your property? Then do it the right way, let’s see how!

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We’re going to go over rehab loans and what they can offer to homebuyers or homeowners. Rehab loans are a great way to help you create your own home equity fast by bringing your home up to date with the necessary improvements. They are a great way to finance these home improvements without having to put much of a down payments or high interest rates.

 

Are you a homeowner?

Great! You have the perfect chance to upgrade your property and improve its value by bringing it up to date with all the latest trends based on your specific market. You will first get to know the potential buyers and you’ll see what they’re looking for and once you have that information you’ll know what changes your property needs to get a higher return for it. You don’t have that much savings? No problem, as rehab loans require a minimum down payment of just 3,5%, so that you don’t have to save money forever to pay the down payment.

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Are you a homebuyer?

 

Excellent! A rehab loan will enable you to get a cheap property and improve its value drastically to then sell it for a much higher price. As we said, you barely have to pay down payment but there aren’t also high interests, so instead of trying to purchase a property and apply for a 30 year loan, you could always consider this option along with a rehab loan, where the investment could be smaller and the return higher.

 

Good luck, and I hope you enjoy your new home for many years to come.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

 

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

 

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Top 5 Things That Can Mess Up Your Loan Transactions- MM S1E9

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FULL VIDEO: https://www.youtube.com/watch?v=oAOc2aZJygM&t=53s

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Welcome to a new episode of Monday Mortgage Madness!

What can we stop us from getting approved for a loan? Let’s go over the top 5 things that can do so!

 

1- The soft pull

A soft credit check is a tool that verifies if there have been any inquiries or  any balances have gone up in your credit card reports, if balances go up that soft pool is going to recalculate the monthly payments, so definitely be careful with this. Actions like  buying new furniture before closing happen a lot and can affect your loan approval too, so wait till you have the keys and close on a new home to make any upgrades and keep your balances at zero in the meantime.

 

2- Student loans

 

Today’s young adults are delaying home ownership for multiple reasons, including overwhelming debt..When lenders sit down with your mortgage application, they look at a couple of different things, like how much debt you owe and how much of your income the payments eat up each month. If you have a big debt in student loans and you’re not making a huge salary yet, your debt-to-income ratio is going to be a huge factor that can definitely stop you from being approved for a new loan.

 

3- Credit Scores

Why are credit scores so important? Because it gives lenders an idea of how responsibly you are with money and if they find irresponsible credit behavior, that could contribute to lower credit scores.

 

Making a late payment on your credit card, mortgage or student loan is one of those irresponsible and very common behaviours that we’ll have to be careful with. Late or missed payments can significantly affect your credit scores and overall credit health.

 

If you’ve proven that you can’t pay debts on time, that’s a potential red flag to get approved for a mortgage.

 

A hard inquiry could reduce your credit scores by a few points or it may have a negligible effect on your scores. Normally, a single hard inquiry isn’t something you should worry too much about. But if you’ve applied for several accounts in a short period of time, you could appear desperate for credit, and the damage from those hard inquiries might add up.

To avoid unnecessary inquiries, try to only apply for credit when you can afford it, and try to focus on keeping a good chance of getting approved.

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4- Judgements, Tax liens and Public records

 

A tax lien or civil judgment can still impact you even if it no longer appears on your credit reports or affects your credit scores, specially when applying for a mortgage.So make sure you pay all these: if you don’t want to pay your taxes prior to closing, that will be a problem to close on a new property.

 

5- Medical Collections

 

Medical collection accounts can be a pain to remove from your credit reports. In many cases, it doesn’t affect the loan approval, but make sure you get your credit approved. With a lot of loan programs, if it’s under 5000 dollars it won’t affect the loan approval, but make sure if it can affect your loan approval, and get your credit approved.

 

Good luck, and I hope you enjoy your new home for many years to come.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

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Stay hungry and stay positive!

Make it a great day,

Sean La Rue

 

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

What determines home’s value- Woke Wednesdays In Real Estate E8

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Many first time home buyers believe that the functionality alongside other features of the property are what matters the most to increase its value, but the reality is that the property’s physical structure depreciates over time.

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It is the land underneath the structure that appreciates in value.

Property prices are a function of local supply and demand, the appearance, functionality, and maintenance of the physical structure will certainly impact value, but these factors have less impact than one may think.

 

 

Understanding how location and the future prospects of land values influence property returns allows investors to make better choices between competing assets. The reason that land is an appreciating asset is a simple one. It is in limited supply, and no one is producing any more.

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So why are advisors always suggesting that property owners make constant investments to update their homes? The main reason is to counteract some or all of the depreciation that is slowly reducing the value of the structure.

Let’s go over what new home buyers should consider before making an investment in a property(expecting some high return in the future):

 

 

 

  • Smaller or less-attractive homes can provide greater investment returns.

 

To understand this point, think about two places on equal land parcels in the same neighborhood, one valued near the maximum and another selling at half that price. Since local supply and demand factors drive land values, houses in a neighborhood tend to appreciate by approximately the same amount per year. If the more expensive house appreciates by 10% (not including any specific improvements), this would be equivalent to a 20% return for the other – a much more efficient use of investment capital.

 

 

  • Locations within neighborhoods will affect land values.

 

Not all spots within an area are considered equal. we can see appreciate that most neighborhoods evolve their own social, cultural and demographic characteristics that impact demand for houses there.

 

  • The average age of neighbors can be important and we should take it under consideration.

 

  • Future development can change your property’s value for better or for worse.

 

 

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So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

 

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

 

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

MMM E7: Top 5 Loan Programs for FTHB

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FULL VIDEO: https://www.youtube.com/watch?v=fzgWGf1xpGo&t=7s&index=3&list=PLwDXba_ZgjWxgzgVoKQgkLIKTzkvPT6ix

In Sean La Rue Home Loans, we’ll always advise to anyone who is thinking about acquiring a new property, to first focus in saving up for a good down payment. You’d always have things easier in a 15 year old mortgage than in a 30 year old one(make sure you check out our article: Why You Should Get a Loan). But this is surely a task that it’s easier said than done, and in this new post of Monday Mortgage Madness we are going to tell you about different programmes that could make it easier for you.

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1- First Time Home Buyer Programs in Your State

 

If you are struggling to have a good down payment there are programs in many States that could facilitate that for you, in case you are a first time buyer. So make sure to do some googling and you could be lucky to find one of these.

There is an extended variety of assistance programs, not only for first time buyers, but for those who work in public services too, such as teachers, paramedics,nurses,firefighters… and plenty of other public service jobs.

 

2- Loans for Native American Home Buyers

 

This program is designed to offer home ownership, property rehabilitation, and new construction opportunities for eligible tribes, Indian Housing Authorities and Native American individuals and families wanting to own a home on trust land or land located in an approved Indian or Alaska Native area.

American Indians or Alaska Natives who are part of a recognized tribe, federally recognized tribes, tribally designated housing entities and Indian Housing Authorities will be eligible to apply for this program.

However, in the Section 184 Program, only single family homes will be eligible and loans must be fixed rate and 30 year old or less,while ARM loans are not an option.

Current rules require a down payment of 2.25% of the purchase price for loans over $50,000 and 1.25% for loans under $50,000

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3- VA Loans

For the vast majority of military borrowers, VA loans represent the most powerful lending program on the market. A big con of VA loans is that it’s not a requirement to pay any down payment. Some interesting facts for any that may be considering applying for this program:

1-They’re reusable, which means that once the loan is paid off, you can apply for another and another one with no limitations.

2-You can secure one despite having a history of bankruptcy or foreclosure.

3- No mortgage insurance- which allows to save more money every month.

4- There are limitations on co-borrowers.

5- They come with a mandatory fee

4- Mortgage Insurance

The Mortgage insurance is a must for any risky borrowers with a low down payment. It is crucial as it protects a mortgage lender or title holder in case that the borrower can’t be consistent on payments, dies or is otherwise unable to meet the contractual obligations of the mortgage.

5- Retirement Account Loans and Withdrawals

Having a retirement account can be very beneficial as it can fund your down payment. What you have to consider is if you’ll be able to repay the money you are taking out, as this can be a dangerous route to take for your future finances.

So that’s all for this Woke Wendesdays post, hope you’re ready now to take it to the next step and apply for a loan. If you have any questions feel free to reach Sean La Rue through Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Interested in applying to a home loan? Seanlaruehomeloans.comjesse-roberts-146556-unsplash.jpg

15 day closing full loan commitment | MMM S01 E7

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We have exciting news in Sean La Rue Home Loans, as we now can offer you the possibility of closing your loan in around 15 days. In order to so, you need to do every step perfectly so that you can close your loan as quickly as possible.

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What we’ll need to take care of first is the mortgage application, which we recommend to do either online or in person. If you choose to do it online, make sure to check that your application has been received and is being processed. If you decide to do it with Sean La Rue Home Loans, let us know from the beginning that you want to get it done in 15 days and we’ll do our best to get it done. As we mentioned previously, everything needs to be done perfectly, so read carefully the mortgage application because if you don’t fill the entire document, the process will be delayed.

 

Your bank will require certain documentation to approve the loan and it’s highly important to present all these documents at the time of the application.

Why does my bank want this information? Just to verify that you are in an adequate financial situation to afford taking on a loan, and that you have enough cash already to pay the down payment. It will also help the process avoiding situations such as that the bank chases you for more information, which again would slow down the process.

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We advise to keep everyone who’s involved in the process in the loop, as if you put all the pieces together and give sufficient notice to everyone, you’ll be able to close quicker.

A few more things to keep in mind: make sure you have no blemishes on your credit history. If you see items that show a balance even though they’ve been closed or if you find questionable entries, such as judgments or liens, contact the credit agency immediately and prepare an explanation for the bank. Make sure all negotiations with the seller have been completed as little details can hold up a closing. Sign all disclosures and the commitment letter upon receipt. Make sure you read the commitment thoroughly and understand everything that is required to close the loan. Finally, set your appointment as soon as possible after you’ve been approved so that a scheduling conflict doesn’t ruin everything you’ve worked for.

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So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

 

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

 

 

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

 

What is Title Insurance?- Woke Wednesdays

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Today we are going to break down the basics of title insurance and why it is very important when we are in the process of acquiring a new property. It’s not the typical homeowners insurance that you’re probably thinking of at first, as it doesn’t cover future events that may damage the property, but it does cover the lender’s and owners’ backs against claims for past occurrences that may defect in the title or ownership of a property.

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Title insurance will require an extensive title search of the property. This search will minimize the potential liability to the property owners by discovering any foreseeable title issues.

 

There are two types of title insurance: lenders’ insurance and homeowners’ insurance.  

 

The first one is going to be almost a mandatory for any borrower as it protects the lender in the case that the rights of a property have been transferred not following the law. However the lender’s insurance only protects the lender against loss, while if there is a policy included, it means that there will be some more assurance for the buyer by adding complexity to the title search.

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We need to keep in mind that title search is not going to work always, and that’s where the owner’s title insurance comes into place, as it protects the buyer against possible defects in the title. It is purchased by the seller and it remains optional though.

 

So, why is it a high risk move to not get title insurance?

 

In case of title defect, both parties can be very affected. Some of the common things that title insurance covers are Errors in the public record, fraud,undiscovered liens… Unpaid property taxes by previous owners is one of the most common scenarios that makes sense to get title insurance, as all the responsibility to pay those taxes would now be on the buyer’s shoulders.

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So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

 

Stay Positive and Stay Hungry for Knowledge!

Sean K. La Rue

NMLS #291852

Text/Call 760-835-5663

https://www.franklinloancenter.com/slarue

https://www.facebook.com/SeanLaRueHomeLoans/

 https://www.instagram.com/seanlaruehomeloans

https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

 

Top 3 Ways To Save Money In Your Purchase

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Welcome to another episode of Monday Mortgage Madness! In today’s article we are going to reveal 3 ways to save some money in your transactions before closing on a home.

  1. When you order your appraisal be mindful of a couple things:

Have it done upfront. Any health or safety related.You have to make sure all repairs get taken care of, before you move into a new property.

During the inspection portion of the home appraisal, the appraiser considers both the interior and exterior of a home to get the best value of the house.

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Exterior-wise, the appraiser will consider:

  • The total land area or acreage of your property
  • The condition of the property
  • Any lead or peeling paint, but only if the house was built prior to 1979

 

 

Interior-wise:

  • Working furnace
  • Working air conditioning
  • Number of rooms, although they will also consider windows and closets
  • Garage, although it does not contribute to the square footage of the home
  • Upgraded basement, although it does not contribute to the square footage of the home
  • Built-in appliance upgrades
  • In-ground pool

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If you decide to make upgrades in your home, you need to make sure they are completed before you schedule an appraisal. Unfinished projects reflect poorly on the home value and you will be affected by appraisal extra fees.

The same goes for the presentation of your home. While an appraiser cannot take the overall cleanliness and style into account, the estimated value of your home may be affected by holes in the wall or peeling paint, for example.

 

Home Appraisal Checklist

 

The appraiser will also look for anything needing repairs. Here are some things to check out before your appraisal:

 

  • Check your electric garage door opener to make sure it’s working
  • Secure a handrail on steps or stairwells
  • Secure second floor doors with decks
  • Secure a railing to any and all raised decks
  • Ensure all utilities are functional with no safety issues
  • Ensure water, electricity and air conditioning is functional
  • Address any plumbing, roof leaks or stains
  • Check for cracks in the walls, ceiling or foundation
  • Check for water intrusion through the foundation
  • Ensure your roof is sound and has at least three years of economic life remaining

 

By addressing all these, you’ll be better prepared for an appraisal inspection and you’ll likely improve your home’s value.

 

2.  Funds need to be verified

Evidence of Proof of Funds for Balance of Down Payment

Then we have the funds required to close escrow, the balance of the down payment plus closing costs.

 

The process is always the same: the buyer needs to present certain documentation and get it verified.Here are a few sample types of documentation:

  • – Original bank statement
  • – Online banking statement
  • – An open equity line of credit
  • – Copy of money market account balance
  • – Certified financial statement

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3-.Keep your credit cards at same balances

 

Many of you may not know that making moves such as buying furniture before closing on a home, may make a big difference actually.

When you are in the final stages of getting a mortgage, it’s a good idea to stop using your credit cards, or at least cut way back on credit card spending. Stay patient and be cautious and you’ll secure your future house.

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So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

 

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

 

Interested in applying to a home loan? Seanlaruehomeloans.com

YGRENE, PACE AND HERO: Green Efficiency Programs

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Today, we are going to go over the green efficiency programs (YGRENE, PACE and HERO) and see how we may benefit from them, but see as well what risks may be involved.

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Saving water and energy is good for the environment, and you also benefit in the form of lower utility costs. But big upgrades like drought-resistant landscaping solar panels can be costly. If you’re looking to make green improvements, a PACE loan might be an option for funding. PACE financing makes it easy to qualify for relatively affordable long-term loans, but there are pros and cons to using these programs.

What Is PACE?

Property Assessed Clean Energy (PACE) is a way to borrow money for clean energy projects. Property owners get financing for upgrades and repay through property taxes. Getting approved will mainly depend on home’s equity.

Common uses of PACE include solar installations, energy efficient heating and cooling, water-saving landscaping, and numerous other projects for residential and commercial properties.

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However, in Sean La Rue Home Loans we recommend to check the laws related to PACE in your state, as this type of financing is not available in all states.  Some of the most well known programs are Home Energy Renovation (HERO) and Ygrene.

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Advantages of PACE Loans

These programs have certain features that we thought were important to mention:

It’s Easy to Qualify for them: getting approved for these loans seems much easier than with conventional loans. Your FICO credit score won’t be as important with PACE as with conventional loans, but current or recent issues in your credit reports can cause problems. You must also be current on all property taxes.

No down payment needed: PACE allows you to fund the entire cost of a project with no need of a down payment.. As a result, you don’t need to save up money before jumping on a PACE loan, but keep in mind that there will be higher interest costs and higher payments.

Can be transferred to the next owner: If you sell a property after making improvements, you don’t necessarily have to pay off the loan. The loan is attached to the property, so it can be transferred and paid off by the next owner.  However, many federal loan programs will not allow a buyer to get financing with these tax liens assessed on the property and would need to be paid off at closing.

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Time to repay: PACE loans can be paid off over extended periods of time and, as a consequence, payments can be kept relatively small. But, remember that the longer it takes you to pay it off, the bigger the interests will be.

Potential tax credits: PACE funding might make it easier to qualify for environmental tax credits — check with your tax advisor before making any decisions.

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Problems With PACE Loans

Before using PACE funding for your project, get familiar with some of the pitfalls.

Conflicts of interest: PACE financing is often arranged through contractors who might have an incentive to promote expensive upgrades.  Some of them may make misleading statements to get some of those incentives directly from you.

In addition to getting paid for the work they’ll perform, contractors might get additional referral fees from a lender if they arrange funding, and that’s where a potential conflict of interests may come into place.

Payment shock: You may be faced with a surprise expense when it’s time to make those inflated payments. In some cases, the PACE payment will be added to your monthly mortgage payment in smaller chunks.

Interest costs: PACE funding is relatively easy to qualify for. However, interest rates are sometimes higher than you’d pay if you simply use a home equity loan— especially if you have good credit. Don’t be fooled, PACE loans are not necessarily cheap, energy efficient, or the most cost effective.

Costs and benefits: It’s easy to get approved for PACE programs, but is it worth it? These programs make the most sense for individuals who cannot afford less expensive loans (often due to credit problems or limited income). Projects like replacing your windows can add to your home’s value, so you should get some of that money back when you sell. However, you won’t necessarily see a substantial change in utility costs — and you’ll still have to make higher tax payments.

Risk of foreclosure: PACE loans are secured by your home, so it’s possible to lose your home in foreclosure if you don’t make the payments. It is common to see foreclosure even if you make your regular mortgage payments, which is a position that no homeowners should be in.

The risks above do not mean that PACE programs are bad. However, it’s worth knowing the pros and cons of these arrangements before signing up. Unfortunately, the risks are often overlooked because PACE programs are perceived to be “safe.”

 

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

 

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

 

Apply for a loan: https://www.SeanLoans.com

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

New Loan Limits for 2019

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Credit to Ben Lane( Housing Wire)- https://www.housingwire.com/articles/47489-fannie-freddie-conforming-loan-limits-increase-in-nearly-every-part-of-the-us

 

Loan limits don’t always change but sometimes they do year over year.  Fannie and Freddie have decided to increase the conforming loan limits for 2019.  This is proof of credit guidelines loosening and will allow home buyers to qualify under conforming loan guidelines instead of jumbo loans.  This is a huge opportunity for the market~ 

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 After not increasing the maximum conforming loan limits on mortgages to be acquired by  Fannie Mae  and Freddie Mac  for 10 years, the  Federal Housing Finance Agency  has now increased the conforming loan limit for the third straight year. 

The FHFA announced Tuesday that it is increasing the conforming loan limit for Fannie and Freddie mortgages in nearly every part of the U.S. 

According the FHFA, the conforming loan limits will rise from this year’s total of $453,100 to $484,350 for 2019. That’s an increase of 6.9% from this year’s loan limit to next year’s. 

As stated above, this marks the third straight year that the FHFA has increased the conforming loan limits after not increasing them from 2006 to 2016. 

Back in 2016, the  FHFA increased  the conforming loan limits from $417,000 to $424,100. Then, last year, the  FHFA raised  the loan limits from $424,100 to $453,100 for 2018. 

And now, the FHFA is doing it again, increasing the loan limit from $453,100 to $484,350 for 2019. 

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The conforming loan limits for Fannie and Freddie are determined by the Housing and Economic Recovery Act of 2008, which established the baseline loan limit at $417,000 and mandated that, after a period of price declines, the baseline loan limit cannot rise again until home prices return to pre-decline levels. 

But, as the FHFA noted earlier Tuesday, home prices are still on the rise, which necessitates a third straight yearly increase in the conforming loan limit. 

The FHFA’s third quarter 2018 House Price Index report, which includes estimates for the increase in the average U.S. home value over the last four quarters, showed that home prices increased 6.9%, on average, between the third quarters of 2017 and 2018.  

Therefore, the maximum conforming loan limit in 2019 will increase by the same percentage to $484,350. 

Loan limits will also be increasing in what the FHFA calls “high-cost areas,” where 115% of the local median home value exceeds the baseline loan limit. 

Under HERA, the maximum loan limit in those “high-cost areas” is calculated as a multiple of the area median home value, while setting a “ceiling” on that limit of 150% of the baseline loan limit. 

According to the FHFA, median home values “generally increased” in high-cost areas as well in 2018, which drove an increase maximum loan limits in many areas.  The new ceiling loan limit for one-unit properties in most high-cost areas will be $726,525, which is 150% of $484,350. 

Per the FHFA, special statutory provisions establish different loan limit calculations for Alaska, Hawaii, Guam and the U.S. Virgin Islands. In those areas, the baseline loan limit will be $726,525 for one-unit properties. 

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“As a result of generally rising home values, the increase in the baseline loan limit, and the increase in the ceiling loan limit, the maximum conforming loan limit will be higher in 2019 in all but 47 counties or county equivalents in the U.S.,” the FHFA said. 

For a county-by-county breakdown of the 2019 conforming loan limits, click here. 

 

https://www.housingwire.com/ext/resources/files/Editorial/Documents/FullCountyLoanLimitList2019_HERA-BASED_FINAL_FLAT.pdf  

 

 

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

 

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

 

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Why does every Realtor Want Me To Be Pre-approved?

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Today we are going to tell you why getting a loan can be very beneficial for you and how to get the most out of it.

 

Here are the different points that we are going to touch during this post:

 

  • Getting a mortgage can be a great thing for your future
  • Interest deduction( what’s that and why should I know about it?)
  • Fixed payment
  • Increasing equity

 

Getting a mortgage sounds like a scary step for most of us, and rightfully so it can be if it’s not done right. When someone buys a house, it’s very common to see the case of a confident man/woman/couple who think that they can pay a 30 year mortgage quicker than they are supposed to, and this is a frequent mistake that leads to financial crisis in many cases and regretting having taken a mortgage in the first place.

 

Don’t be one of those people, and make sure you take your time and evaluate things before jumping off a bridge. If, at the moment, with your current financial situation, you just can afford to go for a 30 year mortgage, wait and save more money. Why? Because you don’t want to become a bank’s slave, pay extra commissions and having that mortgage as the worst of your nightmares. Nearly 100% of the US citizens end up paying extra commissions that benefit the richer and make them poorer in the end.

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Getting a mortgage can be a great thing for your future when you save a down payment of at least 10%, but ideally 25%, to then apply to a 15 year fixed-rate mortgage that will ensure a much brighter and happier future.

 

The interest deduction is another interesting matter to take a look at when buying a property. It can decrease the amount of taxes you’d have to pay for a mortgage, which is certainly something to take into consideration.

 

One of the reasons reason why in Sean La Rue Home Loans we recommend purchasing a property is because of building equity, which represents one of the main financial benefits of homeownership.

Equity means, in a simple way, how much you owe from your actual home. You have negative equity when you take your loan balance from the value of your home and the result is a negative number.

When can we improve our equity?

1- When we get rid of a good amount of our mortgage payment

2- When the market’s price of our place goes up

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*How to reduce loan balance:

  • Apply for short mortgages: on average, people struggle a lot more when having to pay longer term mortgages than shorter ones, so you may want to save some more money and make sure you pay your home in the least amount of time possible!
  • Make big payments when you can: if things are going well for you, why not  taking out some of that mortgage payment? I’m sure it’ll be such a relief.
  • Be consistent with your monthly payments: consistency is everything when paying a mortgage, that’s why as time passes, if you’ve been paying regularly every month, more of each payment goes towards equity, and less of each payment becomes interest charges.

 

People have mixed feelings about mortgages, some think that it’s like you are forced to save money every month, and what many don’t see is that you are building up the value of an asset. With a home, the asset isn’t cash in a savings account—it’s equity in your home.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

 

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

What’s the difference between Homeowners and Hazard Insurance

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In today’s post we are going to talk about homeowners insurance and hazard insurance, and why it is so important in order to protect property owners against the possibility of any possible thefts or damages from fires or any unfortunate natural events earthquakes, storms…

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When someone applies for a mortgage, it is requested to give proof of insurance in the property so that the bank can issue the mortgage. When it comes to home insurances, homeowners can get either take a look at all the options and pick one that suits best their needs, or leave it in the hands of their banks, which will add an extra cost to the mortgage given.

What does a homeowners insurance cover?  Interior damage, exterior damage, loss or damage of personal assets/belongings, and injuries that may arise while on the property. However, it’s important to remember when a claim is made by the homeowner, he/she will have to pay a deductible, which will be calculated based on the type of insurance policy, excess costs..etc

What is key here is to keep in mind is that the higher the deductible is on an insurance contract, the lower the monthly or annual premium on a homeowners insurance policy will be.

But of course, there is a liability limit, that usually stands at around $100,000, but it can go higher depending on the policyholder. What the liability limit does, is to estimate the percentage of the coverage that would go toward replacing or repairing damage to the property structures, personal belongings, and costs to live somewhere else while the property is worked on.

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The reason why at Sean La Rue Home Loans we think it’s a must to get hazard insurance when you acquire a property is because your average home insurance won’t usually  cover all sort of damages that your place could suffer. Acts of war or acts of God will usually not be covered in a homeowners insurance policy. Its actually a common requirement from a lender to ask to have a minimal hazard insurance when applying for a mortgage, to protect the investment and value of the new home.

Think about it this way: it’s much easier to deal with the cost from hazard insurance than having to pay off all the costs generated from an unfortunate event that may happen to your property. Better to be cautious than taking risks with this kind of stuff, specially when living in high-risk areas. Whenever you buy a home, you are making an investment. You are investing so much out of your pocket every month in that investment, so why not spending a couple hundred more per year to insure it?

How much hazard insurance do I need for my home?

We’ll know how to estimate how much hazard insurance is actually needed for our particular case based on how much cost would we have in the worst case scenario(event of a total loss).  This amount may change from one year to another, and could be significantly different from the property’s value, that’s why policies are usually written for one year and renewable. It’s very common that lenders include the costs of hazard insurance in the monthly mortgage payment.

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And that’s all for today’s post, hope you found it useful and don’t hesitate in reaching me out if you have any questions or you are interested in making a consultation.

Stay positive and stay hungry!

Make it a great day,

Sean La Rue

Youtube video: https://www.youtube.com/watch?v=nCg3I6G_Kds

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

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Credit, Income, & Assets Test: Getting Pre-approved For a Mortgage

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As we mentioned in the video, C.I.A stands for credit, income and assets. We are going to go more in deep in this article about these 3 to learn what it takes to increase our chances of getting pre-approved for a mortgage.

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Here are the list of things we’ll have to pay attention to and how everything works:

1. We need to prove our income

Nowadays, we need to be prepared to start the process of getting a loan, by giving all kinds of documentation about the different sorts of income that we may have, such as:

  • W-2 statements from the past 2 years
  • Year to date income
  • any recent pay stubs that show income
  • 2 most recent years of tax returns
  • Any additional income(alimony, bonuses..etc)

2. We need to prove our assets

In terms of assets, we need to give proof of that we are in a position where we can afford paying the down payment and closing costs, as well as having some cash reserves after that. Normally there will be other requirements such as having to get private mortgage insurance or paying a funding fee, unless we put 20% down.

Also remember that your pre-approval will be based on your FICO credit score, debt-to- income ratio and other factors, and that all loans, except Jumbo loans, are conformed to GSE guidelines.

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3. We need good credit

You will find that most lenders require at least 620 FICO score or above to get your loan approved, even for FHA loans sometimes. What are FHA loans? they are those that require  lower minimum down payments than conventional loans. For these, as we mentioned in the video you’ll need at least a 580 credit score to get pre-approved. However, if your score is lower, you can still get a FHA loan with a 10% down payment.

If you have a high score (760 or above) lenders will offer you low interests, but if on the other hand, you have a low credit score, don’t worry as lenders will suggest ways to improve your score. The only downside for low score borrowers will be that they’ll have to pay their mortgages in longer periods of time.

That’s all for today, hope you found this content useful and don’t forget to follow Sean La Rue in all social media to stay tuned to all kinds of information about qualifying, real state finance… This has been the first of many articles for Monday Mortgage Madness.

Stay positive and stay hungry!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

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Private Money Loans- MMM S2E9

Let’s talk about private money loans and what are the benefits and disadvantages that they may have.

These loans are backed by the value of the property and since the property itself is used as the only protection against default by the borrower, hard money loans have usually lower loan-to-value (LTV) ratios than traditional loans.

We need to keep in mind that private money loans are not made by banks, but by individuals who are probably aiming to make some business. Who is their target? People who are looking for short term financing and borrowers with poor credit but great equity in their property.

In Real Estate it’s very common the case of property flippers who get properties with private money loans, renovate them and resell them in a short period of time for a price that pays off the loan easily.

When it comes to apply for a Private Money Loan, it can be much quicker than with traditional loans, as private investors who back the loan usually make faster decisions than banks based on the value of the property. Lenders love these type of loans, as it’s a win-win for them. In case the borrowers defaults, there may be a better opportunity to resell a property. They don’t need to be afraid about not receiving their payment.

Private money lenders might not use traditional underwriting process, which can allow for adjustments to be negotiated regarding the repayment schedule for the loan. This could afford the borrower more opportunities to pay back the loan during the window of time available to them.

The costs of hard money loans to the borrower are traditionally higher compared with financing available through banks or government lending programs. The increased cost is a tradeoff for faster access to capital, less stringent approval process and the higher risk that the lender is taking by offering up the financing.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Home possible and home ready programs- MMM S2E7


In addition to having similar names, HomeReady and Home Possible are two of the most popular low down payment mortgage programs. Both programs offer unique features that improve your ability to qualify for a mortgage. They also  share the common goal of making homeownership more achievable for borrowers with lower income and less resources.

One of the unique elements of the HomeReady program is that it allows borrowers to qualify using non-traditional income sources. Borrowers can include income from a non-occupant co-borrower, such as a parent, rental income from boarders and income from a non-borrower household member to help qualify for the loan. The ability to use these additional income sources is a key differentiator compared to other mortgage programs.

The program also permits the use of non-traditional credit profiles for borrowers with a limited credit history or no credit score. If you are a borrower with higher credit score you may have the option of paying a lower mortgage rate and potentially reduced private mortgage insurance (PMI) fees relative to standard loan programs. HomeReady applies more flexible qualification guidelines to enable more borrowers to participate in the program.

The Home Possible program also enables borrowers to incorporate non-traditional income sources in their loan application. Applicants can include rental income from boarders as well as income from the units in a multifamily property that you do not occupy. This feature is especially helpful for multi-generational families where the children may live in one unit of a property and the parents live in another unit.

Another great point to pick  the Home Possible program is that borrowers with lower incomes and borrowers that purchase properties in designated low income census tracts may pay a lower mortgage rate.

Both HomeReady and Home Possible  programs enable you to purchase a single family home with a 3% down payment and no minimum borrower financial contribution.

Home Possible and HomeReady mortgages are provided by traditional lenders including national, regional and local banks, mortgage brokers and credit unions. In Sean La Rue Home Loans we recommend that you compare the loan terms and eligibility guidelines for both programs to find the mortgage that is right for you.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Fee land vs lease land- WW S2 E2


What’s a fee land?

A fee land is a form of freehold ownership where real estate and land can be owned in common law countries. When it comes to the fee land owner’s rights, we need to know that they are limited by government powers as well as by certain encumbrances or conditions in the deed.

What’s a lease land?

A lease land allows you to use a piece of land owned by the landlord in exchange for rent. We see often land leases being used for commercial purposes, as they are usually vacant and the tenant can build a structure that will stay temporarily or permanently.

Lease Land vs. Fee Land

The main difference between buying land and leasing is that by going with leasing you reduce the cost of a home compared to a Fee Land, which you own.   So, by owning on leased land, the homeowner gets the use of the land without spending a certain amount of capital, which will allow to afford a larger home for less money.  

However, keep in mind that you won’t technically own a home until the loan is paid off.

Good luck, and I hope you enjoy your new home for many years to come.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Occupancy for Loans- S2 E2 MMM


Welcome to a new article in seanloans.com!

Let’s dive in today’s topic: occupancy for loans.

When applying for a loan it is necessary to determine the borrower’s ability and willingness to repay a loan in accordance with its terms and to determine if the subject property provides and maintains sufficient value to regain the investment.

A loan’s occupancy type indicates the occupancy status of the mortgaged property.

Property Type
  • Investment – Indicates that the borrower does have the property for personal use and most likely offers the property for rental.
  • Primary Residence – usage property type where the borrower lives in the property.
  • Vacation Home/ Second Home – Here the borrower maintains the property for personal use and does not offer the property for rental.

    Let’s go more in depth about these 3 property types based on the usage

Investment Properties

If a home is used as a rental property, which you earn income from, it’s considered an investment property. Any type of property, such as single-family homes, multi-unit properties or condos, can be an investment property. If you simply act as the owner and landlord of a rental home, it’s considered non-owner occupied. However, if you physically live at the property, it’s classified as owner-occupied. This type of situation can occur if you own a multi-unit home such as a duplex — you live on one side, and your tenant lives on the other.

Primary Residence

We defined properties as “primary residences” when you live there for the majority of the year and you don’t ever rent it out, even during the time you’re not living there. It’s common to see that the lender asks for some legal proof that shows your intention to occupy the property.

Vacation Home/Second Home

On the vacation home, the owner usually stays in the property for just a small period of time every year. it has the same requirement than the primary residence, as it can’t be rent out to be considered a second home in the eyes of the lender.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Homeowners associations- WW S2 E1


A homeowners association (HOA) is an organization that makes and enforces rules for the properties within its jurisdiction.

HOA’s members will have to and are required to pay dues. Some associations can be very restrictive about what members can do with their properties.

Homeowners associations (HOAs) are formed by planned communities with single-family homes or multiple units, such as condominiums.

There are actually certain properties that require becoming a Home Association member in order to purchase them An HOA is typically established to make and enforce rules regarding the properties within the jurisdiction. Most HOAs are incorporated and thus subject to state laws.

Homeowners associations can also have significant legal power over the property owners in their jurisdiction. There will be a set of rules in a document called the Declaration of Covenants, Conditions and Restrictions (CC&Rs), which set certain conditions on owners and their properties. The conditions may include structural restrictions such as the type of fences or landscape allowed, or minor selections such as the color of paint on a house. This document should also outline the penalties for violating the CC&Rs, which may include fees, forced compliance or in some cases, litigation.

HOAs collect monthly association fees or annual dues to pay for upkeep of common areas like parks, tennis courts, elevators and swimming pools. Typical HOA fees are between $200 to $400 per month. HOA fees often contribute to the association’s reserve fund, which is set aside for major renovation projects or emergency use. An HOA’s board of governors is usually responsible for the organization’s finances, including the management of funds.

Advantages of an HOA

HOA members generally aim to maintain a standard of appearance for the property, and the HOA provides the regulations and guidelines for the community. The community standards should support stable property values. There are architectural standards that are designed to keep a uniform appearance to the property. Some HOA fees cover the cost of trash collection and snow removal.

Disadvantages of an HOA

The big downside of being part of an HOA is the high cost of the association fees. HOAs can also be very strict and restrict homeowners from making changes in their own properties.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/

Using credit cards while in escrow-Good or Bad?- MMM S1E13

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When people are buying a house, selling another house or making a major move, they usually tend to have unusual expenses, which in Sean La Rue Home Loans we do not recommend. Let’s see why in this article!


These people may normally spend only a few hundred dollars a month on their credit cards, perhaps even paying it off by the end of every billing cycle. However, when their credit score needs to look its best, they start to spend much more than a few hundred with their credit cards on furniture, moving expenses, home repairs,etc..

Some find it very unfair when their lender tells them that they have a high debt ratio on their credit story, but what we need to keep in mind is that the balance is reported at a specific time, so even if we pay off our debt every month, our credit score may be highly affected if we just spent some thousands all of a sudden for our new home.

What’s our piece of advice?

The common mistake is to think that once the credit reports have been pulled out, we can start spending on stuff for our future home because what’s the matter of buying furniture before closing on a property? Well, let me tell you It is actually a big matter, as it can make a big difference that can result in you losing the house of your dreams.


In Sean La Rue Home Loans we can tell you that when you are in the final stages of getting a mortgage, it’s a good idea to stop using your credit cards, or at least cut way back on credit card spending. Pick out the furniture, but don’t buy it yet. If you do buy a large item, consider paying down your card immediately online, so you’re not caught with a high balance just on the day your bank reports to the credit bureaus.

Good luck, and I hope you enjoy your new home for many years to come.

So that’s all for today, hope you found this article useful so far and don’t hesitate in reaching me out if you have any questions or need a consultation.

Stay hungry and stay positive!

Make it a great day,

Sean La Rue

Facebook: https://www.facebook.com/SeanLaRueHomeLoans/

Instagram: @seanlaruehomeloans

Linkedin: https://www.linkedin.com/company/sean-la-rue-sr-vice-president-franklin-loan-center/