Category Archives: Sellers Paying Closing Costs

Dreaming of Owning a Home? Potential Move-Up Homebuyer? Don’t Be Afraid!

     Two articles I read just this morning addressed the issue of potential home buyers’ fears of rejection as they pertain to mortgage financing.  Each article, also spoke about the many misconceptions the public has that contribute to their fears.

https://1609956119.secure-loancenter.com/FreeConsult.aspx     The statistics quoted in these articles (per a national consumer survey by loanDepot LLC) were somewhat distressing for me as a Mortgage Lender.  The most alarming were:

  •  Nearly half (46%) of prospective homebuyers have not pursued the financing they would need in order to buy a home due to fear they wouldn’t qualify for a mortgage
  • More than half (56%) of all buyers who don’t currently own a home, but want to, indicated they’re not pursuing homeownership because they fear they won’t qualify for a loan
  • Of those who want to buy a home but haven’t tried to because they think they won’t qualify, 53% think today’s qualification environment is tougher than last year.


    And finally …
 

  • Fewer than three-quarters of Americans who fear they won’t qualify admitted they haven’t actually taken any steps to find out for sure


     That last statistic is a particularly frustrating one, as it seems that collectively Mortgage Lenders, the real estate industry, and news media have done a good job of delivering the message (a needed educational one, admittedly) regarding the numbers of steps and larger amount of documentation required of today’s mortgage applicants.  

     But we may have done too good a job.  As the statistics show, potential homebuyers are now intimidated and fearful of the homebuying and mortgage process.  That’s not good … nor is it the reaction we seek. 

     If you are hoping and wanting to buy, you shouldn’t be scared of the process you need to follow to accomplish it.  And you certainly should never be scared of approaching or contacting me or your real estate professional.  You should not be afraid to ask questions or perform some fact-finding.  

     What you find out may surprise you! 
    

http://www.genemundt.com/MortgageChecklist.aspx

     Recently I wrote a post, What are the Requirements to Qualify for a Home Loan Today?”  It offered many of the basics for mortgages and mortgage applicants as they exist currently (post written 4/28/2014).

     The truth is:

  • Mortgage programs are available that accept Credit Scores (in some cases) as low as 580.
  • You do NOT have to put 20% Down on your home purchase
  • Mortgage Programs exist for 0% Down (VA and USDA-RD loans) or as little as 3.5% Down (FHA financing)
  • According to Ellie Mae:  Credit standards have loosened in comparisons to one year ago.  Approval rates for  applications are almost 3% higher than they were (58% in March of 2014
  • Exceptions DO exist for those that suffered “Extenuating Circumstances” (Foreclosures, Short Sales, Bankruptcy, etc.)
  • Sellers CAN assist with Closing Costs
  • A NO received on your Mortgage Applications doesn’t have to remain a NO indefinitely
  • Mortgage consultations are typically FREE.  Mine, for Chicago area clients, definitely are.

  
     Please, if you’re considering buying a home now or in the future … don’t assume you know an outcome or the answers to questions left un-asked.  Find out for sure if you can buy for the first time or if you can become a “move-up” buyer.   

     Dreaming of Owning a Home?  Potential Move-Up Homebuyer?  Don’t Be Afraid!  Contact me today.  Together we’ll discover what facts and reality exist for you … and then move forward accordingly.

http://www.genemundt.com/ContactUs.aspx


     *  Hoping to Buy, Construct, or Refinance a home in New Lenox, another Lincoln-Way Community, Will County, or elsewhere in the Chicago areaContact Me.  I’ll put my 36 years of mortgage experience and expertise hard to work on your behalf.
     I can be easily found at:

Direct:  815.524.2280
Cell or Text:  708.921.6331
eFax:  815.524.2281
 
Click HERE for your FREE Mortgage Consultation!
Ready to Apply for your Mortgage?
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Gene Mundt, Mortgage Lender, a Lender with 36 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL


    

Is it the Right Time for You to Sell Your Present Home & Buy the Next?

 

Is it the Right Time for You to Sell Your
Present Home and Buy the Next?

 
https://1609956119.secure-loancenter.com/FreeConsult.aspx     The final decision to Refinance your existing Mortgage (or  not), should be based on one simple thing.  It must make good financial sense …  

     That decision is often times determined by the length of time you, as a Homeowner, “guesstimates” you’ll own your loan (i.e., stay in your present home).  A good rule-of-thumb is that the monthly payment savings received through the Refinancing (at minimum), should “pay back” your Closing Costs for your Refinance.  

     Similar (and additional) considerations need to be made by those Homeowners hoping to upgrade or “step-up” to a bigger and better home and becoming Home BUYERS again.  For those in this situation, it’s important to remember: 

     ALL transactions are not created equal.  In most transactions, Home Buyers pay a “fixed” amount of Closing Costs.  “Variables” that affect that amount could be (but not limited to):

     Sometimes, these costs can be paid for by the Sellers, if negotiated into the Sales Contract.  Otherwise, Home Buyers can easily pay up to $5,000 for costs associated with buying.  In simple math this equates to:  A Homeowner’s 5-year stay in their purchased home costs $1,000 a year.  ($5,000 of totals costs, divided by the number of years in the home (5), equals $1,000 of costs per year.)

     This fact also needs to be considered: During the time you’ve lived in your home you’ve paid down your Mortgage balance … year by year, payment by payment.  Maybe you’ve even paid some extra to the Principal too.  

     On the Sales side of their transaction, Sellers must remember:  Their home’s Appreciation or Depreciation in value must also be considered.  In a good housing market, the home will have appreciated in value during that duration of time.  That Appreciation helps to cover the costs they as Sellers face when they move on.

http://www.genemundt.com/ContactUs.aspx     As a Seller, it’s a good rule-of-thumb to assume that costs will equal 8% to 10% of the Sales Price of your home.  That varies of course, depending on the state, city, county, and the percentage of Real Estate Commission being paid.

     While your decision to move can be ruled by emotional reasons or the need for a lifestyle change, the decision should definitely include financial considerations, as well.  No matter your reasons, if you’re ready to move, it’s important to “do the math” regarding a move and sale.  Obtaining a Realtor’s opinion of what it will take to sell your home is wise.  

     Down Payment funds are critical to any purchase, but especially for those Selling one home and buying another.  BEFORE you agree to list your home and sell it, get Pre-Approved by a Mortgage Lender to discover your options or limitations for purchasing your next home. 

     Most U.S. Homeowners consider a move within the third and fifth year after their first purchase.  National averages have shown that most 30-year Fixed Rate Mortgages last an average of  7 years (approximately).  When Sellers retain control of the timing of their moves from one home to another, they are more likely to come out ahead.  

     Is it the Right Time for You to Sell Your Present Home and Buy the Next?  Possessing the facts and information needed to make sound financial decisions greatly reduces the stress that accompanies the Buying and Selling of a home.  

     In Chicagoland, contact me so we can discuss your plans and do the math for your personal scenario.  We’ll discover what options exist for you.  That way you’ll be better prepared to make sound Sellingor Buying decisions …        

http://www.genemundt.com/ContactUs.aspx

     

*   I can be easily found at:

Direct:  815.524.2280
eFax:  815.524.2281
Cell or Text:  708.921.6331

 

Click HERE for your FREE Mortgage Consultation!
Ready to Apply for your Mortgage?
https://1609956119.secure-loancenter.com/WebApp/FullAppLogin.aspx

 

 

 

 

 

 

 

 

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Gene Mundt, Mortgage Lender, a Lender with 36 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL

 

 

 

Preparing to Buy a Chicagoland Home: Seller-Paid Closing Costs

Preparing to Buy a Chicagoland Home:

Seller-Paid Closing Costs

– See more at: http://activerain.com/blogsview/4308152/preparing-to-buy-a-chicagoland-home-seller-paid-closing-costs#sthash.spFanGOx.dpuf

Preparing to Buy a Chicagoland Home: 
Seller-Paid Closing Costs
https://1609956119.secure-loancenter.com/FreeConsult.aspx     Looking out my office window right now, you’d never know that Spring … and Spring’s busier Chicagoland housing market isn’t that far off.  Yet, it’s true …

     Chicagoland First-time Home Buyers (those typically purchasing homes from the low $100K’s to the low-$200K’s) and anyone else hoping to buy during this upcoming Spring’s warmer-weather market, should be making their plans NOW, while winter snow is still on the ground and temperatures are frigid. 

     So, if you’re a hopeful Chicagoland First-Time Home Buyer (or anyone seeking Mortgage financing) what should you be considering or educating yourself about right now … at the beginning point in your process?

     First of all, find yourself a knowledgeable, experienced Mortgage Lender to work with.  Not sure how to do that?   

     Here’s a few suggestions:  

     Inquire with Real Estate Agents that transact in Chicago or the Chicagoland area in which you hope to live.  Check with Real Estate Attorneys, your friends or family members that have Closed on a Mortgage loan recently. Talk to Insurance Agents or others that work in the local real estate industry.  Gather names and note those mentioned multiple times. 

     Don’t skimp on the attention you give this matter.  Do your homework.  Find the right person for you.  (For more help and guidance, click HERE.)

     Once you’ve found your Mortgage Lender, have a long talk with them about your finances and your Credit.  Get Pre-Qualified to discover:

  •   What Home Buying options exist for you
  •   Your Credit Scores 
  •   Your Credit capabilities
  •   If elements of your Credit need polishing 
  •   The Price Range of home you can buy
  •   Establish a timeframe for your upcoming purchase

     
     One of the most important topics you’ll talk about with your Mortgage Lender will be regarding a Down Payment on your home purchase.  At this time in the year, I often hear from Borrowers that Income Tax Refunds will be a contributing source to their Down Payment funds.  

     For Buyers hoping to utilize Income Tax Refunds during their home purchase (or Agents working with those Buyers), it’s critical to make sure that Income Tax Returns are filed as early as all supporting documentation (W-2’s, etc.) is received.  Tax Returns should be filed electronically, as this  expedites the depositing of Tax Refunds into Checking or Savings Accounts.

     It’s important for Home Buyers to know:  Income Tax Refunds ARE acceptable to Lending Underwriters when saving/accumulating assets to buy a home.  Since most loan programs require Down Payment funds to come from the Buyer, it’s important to demonstrate Down Payment funds as verifiable money in accounts.  (Accounts can be Savings, Checking, Money Market, Mutual Funds, Bonds, Stocks, and Retirement.)

http://www.genemundt.com/MortgageChecklist.aspx

      

Keep in mind that the:
  • Minimum Down Payment on FHA Loans is 3.5% 
  • FHA requires a 3.5% Down Payment, but ALL or PART of that Down Payment can be a Gift
  • Minimum Down Payment on most Conventional Loans is 5% 
  • At this time, it remains totally acceptable for Sellers to pay Closing Costs.  

     In the case of Sales Prices under $100,000, it’s almost necessary to get Seller-paid Closing Costs due to new regulations in place as of January 10, 2014, per the Consumer Financial Protection Bureau (CFPB).  Certain Closing Costs ARE allowable when Seller-paid.  That simply allows your Mortgage Lender, to cover the cost of traditional fees incurred in a Real Estate purchase at Closing time. 

     I’ve included a breakdown of the guidelines (as of this writing) on the maximum allowable Closing Costs that a Seller can pay.  These Costs are expressed as a percentage (%) of the Sales Price …

     For Conventional Loans:

  • Fannie Mae –  3% if Owner-Occupied  *
  • Freddie Mac – 3% (2.5%in some cases) if Owner-Occupied
  • Investment Property – 2%

    *  Can be greater, if Loan-To-Value is less than 90%
     
     For FHA:

  • Up to 6%

     For VA:

  • Up to 4% 

    
Preparing to Buy a Chicagoland Home: Seller-Paid Closing Costs …  As you can see, there’s quite a list of things to talk over with your Mortgage Lender when you hope to buy a Chicagoland home.  It’s normal to have lots of questions.  So, let’s get started and get those questions answered.  Contact me now so together we can best prepare you to buy a home …

http://www.genemundt.com/ContactUs.aspx


     *  Hoping to Buy, Refinance, or Build a Home in Chicago or the greater Chicagoland area?  Contact me!  I’ll put my 36 years of Mortgage experience and expertise hard to work on your behalf.
     I can be easily found at:

Direct:  815.524.2280
Cell or Text:  708.921.6331
eFax:  815.524.2281
Click HERE for a FREE Mortgage Consultation!
Ready to Apply for your Mortgage?
 Twitter Account of Gene Mundt, Mortgage Lender   LinkedIn Account of Gene Mundt, Mortgage Lender   Facebook Acct. of Gene Mundt, Mortgage Lender   Pinterest Acct. of Gene Mundt, Mortgage Lender   Digg Acct. of Gene Mundt, Mortgage Lender
 Trulia Acct. of Gene Mundt, Mortgage Lender   Zillow Acct. of Gene Mundt, Mortgage Lender   Lender411 Acct. of Gene Mundt, Mortgage Lender    Klout Acct. of Gene Mundt, Mortgage Lender    Gene's Chicagoland Blog/Gene Mundt, Mortgage Lender
Gene Mundt, Mortgage Lender, a Lender with 36 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL.