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/

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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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What Is Vesting?- Woke Wednesdays In Real Estate E7

What Is Vesting?

Vesting is a legal term which means to give or earn a right to a present or future payment, asset or benefit. It is most commonly used in reference to retirement plan benefits when an employee accrues non-forfeitable rights over employer-provided stock incentives or employer contributions made to the employee’s qualified retirement plan account or pension plan. It is also commonly used in inheritance law and real estate. Vesting means to get a right or give it to a present or future payment, asset or benefit.

 

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One of the best benefits you can get from vesting is to get rights to employer-provided assets over time, which will surely be an incentive for any employee to work an extra harder in order to have a better retirement life one day.The company will set the non-forfeitable rights and determine when the employee earns those benefits. A major factor that will play in this decision will be how long the worker has been working for the company.

 

In the context of retirement plan benefits, vesting gives an employee rights to employer-provided assets over time, which gives the employee an incentive to perform well and remain with the company.

Types of Vesting

 

1- Tenancy in common

Tenancy in common is another way to hold title on a property, where each person involved owns a portion of the property. Upon the death of a tenant in common, his/her share will go to whom that person decided based on his/her will, or otherwise there would be an intestate succession.

2- Community Property with Right of Survivorship

Community property with right of survivorship ensures a surviving spouse receives the deceased spouse’s property share. Community property tenancy allows couples to own an undivided interest in the entire property. Spouses are not allowed to pass their property interest to someone other than their spouse in a will. This type of tenancy is restricted to married couples and registered domestic partners. Property will automatically pass to the surviving spouse without having to go through the probate process.

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3- Joint tenancy

Joint tenancy is a type of co-ownership  between two or more persons in which each person owns an undivided interest of the whole. Because joint tenancy creates a right of survivorship, upon death, a party’s share of property will pass to the remaining joint tenant.  The surviving spouse will be left with 100% share of the property. Because the surviving spouse automatically receives the property, probate can be avoided (at least until the surviving owner passes away).

 

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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/

8 STEPS FOR LOAN CLOSING: The normal timeline and escrow periods- MMM E8

 

 

Sometimes we may feel like it will never ends the process of buying a new home, till all of a sudden it’s all over and you become a homeowner.

Today we are going to go over the different stages that you’ll likely have to go through before you can finally say that you have a new home.

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STEP 1: Pre-Approval—1 Week

 

Getting pre-approved can be a key step in order to make this long process seem much shorter and be ahead of your competitors that are not pre-approved in the market. Less than 10 percent of homebuyers get a pre-approval letter before they start looking to buy properties, which doesn’t make much sense as it’s usually a requirement to make offer on any property. Your offer won’t be taken nearly as serious by the sellers as if you were pre-approved. You’ll also see that many realtors will stick to show houses to only those who have been pre-approved in the first place. The pre-approval letter will make it a lot easier to get that house of your dreams that you really don’t want to lose. And the best part is that it takes about 15 minutes to fill out a mortgage application. Make sure you have the following information:

 

  • Employment and address information for the past two years
  • Current employer and landlord contact info
  • Bank, retirement and investment account statements
  • Proof of income (such as pay stubs or tax returns)

 

Once you’ve filled it out, it should take just about one to two days to get a pre-approval, and around a week to get pre-approved.

 

STEP 2: Finding a Home—No Timeline

Now that you have your pre-approval letter, you can start shopping. Now the clock stops and you’re not in a rush for making a decision, so take your time to look at what the market has until you find what suits best your needs. Buying a house is never a decision that should be taken lightly.

When you’ve found the house that you were looking for, you’ll be ahead of competition and things will go quicker. However, the negotiations that will be involved can certainly be overwhelming at times till both parties agree on a price for the property.

Here are some tips: Be realistic with the amount of money you can invest in a house, but also don’t go too low with your offer as that can end negotiations, especially if there are others interested in purchasing that property too. A good way to estimate the home’s value would be to compare it to other similar properties that have been sold in the area, and then see if the list-price is fair.

If you manage to end the negotiations on a good place and get your offer accepted, then you proceed to go into escrow and now what’ll matter is to go fast and make the right moves to try to get lower interest rate.

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STEP 3: Home Inspection—1 Week

 

Now what we’d recommend you to do is to make an inspection of the home that you are aiming to buy, to evaluate any defects in the property that may affect its safety,liability, future market price…

 

Make sure an inspector comes to take a look at the place before you make a final offer on the place, the faster you can the inspection done the better as there are deadlines always for inspections to be done!

 

STEP 4: Appraisal and Title Search—1 Month

You’ve looked through the inspection report and decided to move forward. As soon as you give your go-ahead on the property, your lender will schedule an appraisal to make sure the sale price is aligned with the values of similar homes. An independent, licensed appraiser will estimate the home’s value based on comparable properties.

It can take up to a week to get an appraiser to look at the property, maybe more if the market is hot where homes are selling quickly, and another week to finish the process. Next, a title company will research the home’s legal history to make sure there are no claims, liens, pending legal actions or other encumbrances on the property. Altogether, it takes about a month for your lender to make sure these important bases are covered.

STEP 5: Scheduling Closing Day—1 Week

Once the appraisal and title search are done, you’re on the last part of the process to get your home. Your closing date will be scheduled for the following week.

 

STEP 6: Closing Disclosure Review—3 Days

Before you sign on your new home, you’ll have a final chance to review the terms of your mortgage and an itemized list of your closing costs. Your closing disclosures will arrive three days before closing.

Take time to look the closing disclosures over carefully. This document determines who is responsible for which costs, so you’ll want to ensure each item on the list has been assigned to the correct party.

A Closing Disclosure usually contains:

  • Your basic mortgage information
  • Transaction summary for the sale
  • Settlement charges, including total fees paid to the real estate broker, mortgage lender and escrow reserves
  • Final loan terms, including your initial interest rate and monthly payment

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STEP 7: Closing—1 Day

It’s finally time to sign all that paperwork and take possession of your new home. The process can take a while, so it’s not something you want to try and squeeze into your lunch break. Better plan on taking the day, or a half-day, off.  Be sure to bring a valid ID.

This is also when you’ll need to pay your closing costs, so come prepared with any required payments in hand. In order to process payments quickly and get you into your home, payments should be certified funds, such as a cashier’s check or wiring the funds directly to escrow a few days prior to closing.  Personal checks are generally not allowed.

You’re almost there!

STEP 8: Getting Your Keys—2 Days

The papers are signed and you have everything ready to move in. You should receive your keys within a few business days. If in doubt, ask your Realtor as it is in your original contract. Now that you’ve made it through the mortgage process, you can relax and enjoy your new home!

 

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/