Tag Archives: Closing Costs

If YOU are a Renter, but Don’t Want to Be …

If YOU are a Renter, but Don’t Want to Be … 
     Day after day, messages via social media and news media constantly show-up regarding the Rent VS Buy debate …

An article I ran across in Forbes today is a prime example.  It offered some rather startling facts regarding the current cost of renting (6/2015).

The headline read … “A Record Number of Americans are Spending More than 30% of Their Income on Rent”.

     Here are 2 statistics from that article that caught my eye: 

     1.  One in five renting households making $45,000-$75,000 a year are spending more than 30% of their income on rent. 

and … 
 
     2.  Meanwhile, it’s good to be a homeowner. The number of households paying more than 30% of their income on housing has declined for three straight years to 39.6 million, or just a quarter of homeowners.
 
     Add the following info and stat from the “How America Views Homeownership” survey into the debate:  
 
  • People who currently rent show a desire to buy homes, with only one in 10 saying they prefer renting over owning    
     So why are so many of today’s Renters not asking questions, seeking guidance, inquiring about home buying, or taking action to buy?
     That’s a question that haunts me as a Chicagoland Mortgage Lender …
     But maybe the survey offers insight:
  • Attitudes about homeownership are positive, but consumers’ misperceptions about credit score, down payment and income requirements persist    
     I can’t address or clear-up every misperception out there with just one post.  So my objective today is simpler:
 
     I want to convince those presently renting … but hoping to buy a home … to contact me or pick-up their phones and call me (or their own local Mortgage Lender).  To get FACTS …
 
     If you’re a Renter and fit any of the following categories:
  • You hope to buy a home, now or at some point in the future
  • You were a homeowner in the past and hope to become a homeowner again
  • You have not had your Credit Scores run by a Mortgage Lender  (Scores/Reports offered by others, such as Car Dealers, Credit Card Companies, online sources can be vastly different from those utilized by Mortgage Lenders)
  • You know your Credit Scores and need help/guidance in improving them
  • You’re tired of renting
  • You have questions regarding what homebuying possibilities and options exist for you
  • A cost comparison/financial analysis would benefit you
  • More …
     
     Make that call or contact:  You may be one of those currently renting that thinks or assumes (incorrectly) they can’t buy a home … but actually can.  I see it often.
     Please note:  I’m not saying there’s anything wrong with renting or not wanting to be a homeowner.  That’s not the intent of my message.
     But there IS something amiss, if:  You WANT and HOPE to buy a home … yet pass on your dream of homeownership because of misperceptions, preconceptions, or inaccurate info.
    If that describes you:  I urge you to have a conversation with me soon.
     That conversation holds the key to gaining the facts and answers you need to make sound decisions about buying and renting.
 
     The info/answers gained from your conversation will:
  • Be based on YOUR finances
  • Be based on YOUR Credit Scores
  • Be based on YOUR needs
  • Provide valuable info that can serve as YOUR personal roadmap moving forward
     The info provided will be based on FACTS.  Facts as they pertain to YOU.  Not myths or stories.
     If you’re a Renter, but don’t want to be:  Get facts now … 
     If in need of mortgage answers … or if you’re hoping to Buy or Refinance in Chicagoland, Illinois, or Wisconsin … contact me today!  I’ll put my 37 years of mortgage experience and expertise hard to work on your behalf.
     I can easily be found at:
Direct:  815.524.2280
Cell/Text:  708.921.6331
eFax:  815.524.2281
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Gene Mundt, Mortgage Lender, a Lender with 37 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. 
 
Your Referrals are Greatly Appreciated!

Love Your New Construction … But Educate Yourself About Future Tax Bills

 Love Your New Construction … But Educate Yourself About Future Tax Bills

     *  I want to preface this article by saying it’s geography specific to the Chicago Area and its collar-counties …

     So you’ve opted for building or buying a newly constructed home.  You’ve decided you’re okay with investing most, or all, of your savings to cover the Down Payment and Closing Costs.  After all, it’s a new home, you hopefully won’t need money for repairs or improvements for quite a while. 
    

https://1609956119.secure-loancenter.com/FreeConsult.aspx

     Plus, the property taxes for your new home will initially be lower, as they’ll be based upon the vacant lot on which your new home is built.  (The new home wasn’t completed yet for the previous tax year’s bill.) 

     But how does this effect your future tax bill and the tax portion of your monthly mortgage escrow?

     When obtaining financing, during your first year of a new construction occupancy, the real estate tax portion of your escrow account is based upon the last available tax bill for that property.  Again, that tax bill, (referred to above), is based on the vacant lot, so your Mortgage Escrow Account, set-up at the time of your Closing, has been funded by low monthly payments … maybe as low as $50 to $100.  

     It must be pointed out:  I, as your Mortgage Lender, am required to base your tax escrow figures upon the MOST RECENT AVAILABLE tax bill.  I, like all Lenders, am prohibited from collecting anything beyond that.  

     The pros for homeowners that result from this are:  Their initial monthly mortgage payments are quite low.  But unfortunately, there are cons that come with this too.  

     What are those?  In the second year of occupancy, the County Tax Assessor having jurisdiction over the property, notes that the property (vacant lot) has been improved upon with a newly-constructed residence.  

     In Chicago and its Collar Counties, the following is an example of what the typical ramifications of this vacant lot/new construction tax escrow scenario are … and the timeframe in which they occur:

   1.  Closing occurs on:  August, 2012.  The Occupancy Permit is issued on that date.

   2.  Taxes for the previous year of 2011 (based on Vacant Land), now payable in 2012, were $100.00.
https://1609956119.secure-loancenter.com/FreeConsult.aspx 
   3.  The Builder paid the 2011 tax bill for $100 at the time of the Closing in August, 2012.

   4.  The Buyer/Borrower’s Mortgage Escrow (based on the 2011 tax bill) is figured and set-up at Closing.  The Mortgage Lender require they pay $50 per month into their escrow for Real Estate taxes, beginning with their first payment due in October, 2012.  

   5.  New tax bills are issued in May 2013, for the previous 2012 tax year.  They still don’t reflect the newly- constructed improved property, as the Assessor’s Records aren’t updated in time to reflect that improved property’s existence.

   6.  AFTER these tax bills are issued, the Tax Assessor updates the property record card noting the Occupancy Permit issuance and the date of Occupancy, August 2012.  The Tax Assessor then submits the new improved evaluation and assessment accordingly.
      
     Fast forward to May 2014 …  

   7.  New tax bills are once again issued, but now they reflect 16 months of improved property (the last 4 months of 2012 and the entire 12 months of 2013).  This new tax bill is issued at the current tax rate levied for the property’s Township.

   8.  As a result, the Homeowner’s/Borrower’s Escrow Account is short.  It doesn’t have enough money in it to pay the new tax bill reflecting the improved (newly constructed) property.  * Remember, the Escrow only has collected the low $50 per month amount allowed at the time of Closing.  But the new bill is “catching up” on the missed months of taxes based upon the improved property.  

   9.  The Mortgage Lender, based upon the new tax bill they have received, sends the Homeowner/Borrower a notice of an increase to their escrow payment … or they provide the Homeowner an option to cover their shortage in escrow with a lump sum payment.

     The result of this new construction tax scenario can be scary and burdensome for a homeowner.  If they haven’t prepared by setting aside an estimated amount for their new higher taxes, panic can set in.  All too often, I’ve seen the homeowner have to opt for the larger monthly escrow payments because of their ill-preparedness. 

     If you are considering the buying or building of new construction in Chicago or a Collar County:  Don’t be caught off guard regarding your new construction property taxes.  They will rise at some point.  Be fully prepared for that. 

     While you’re in your initial Mortgage Process and your Closing, listen to me, your Mortgage Lender.  Heed my advice regarding your escrow and future tax bills.  This issue is too important to not fully understand it, prepare for it, and act upon it …

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

    
     *  For thorough, detailed new construction financing advice and assistance in the Chicago area, contact me today!  I’ll put my 36 years of mortgage experience hard to work on your behalf.  I can be easily found at:

Direct:  815.524.2280815.524.2280
Cell/Text:  708.921.6331708.921.6331
eFax:  815.524.2281815.524.2281
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.