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/