Question:

We already completed the pre-approval process for an FHA loan but we are now re-thinking other loans

Advice:

Conventional (non-government) loans now require a minimum 10% down payment.  FHA is a great option if that is a challenge.

Also, you may want to look into your local and city and county first time homebuyer and down payment assistance programs.  Many of them are beginning to receive funding, but it doesn’t last long.

If you are a member of CalPERS or CalSTRS - you definitely need to look into the home purchase programs they offer.

Question:

How do I know if  I’m not over paying what the house is worth?

Answer:

The bank will not lend you more than the home is worth.  What is happening many times in this market is that once the appraisal is complete and if the value comes in lower than the sales price, the seller is lowering the sales price to the “value” of the home.

The bottom line is, if you can comfortably make the payments and you love the home, it’s a great deal buying in this market!

Question:

How long is the wait now? Short sale accepted by seller.

Answer:

That is a question that is better answered by the seller’s agent or the bank itself.  If the seller has submitted other offers to the bank there’s a good chance that it’s already “in process” and assigned to a loss mitigation rep.

The seller of the home does not really have much say as far as “accepting” the offer.  Many times, a short sale is a tactic used by homeowners to delay foreclosure and live in the home for a longer period of time.

If you have a real estate agent working with you, have them communicate with the sellers agent and determine whether or not the bank is being cooperative.

Good luck!  Short sales are all over the place in how they play out - every bank is dealing with it differently.

Question:

Regarding the 8k Tax Credit…What if you have a couple and one has ever owned a home. Qualify?

I have a friend who is engaged.  Her fiance owns but she never has. They want to buy a home together this year. Would she/they qualify for the 8k tax credit?  Would she need to qualify on her own merit?  Could she get the loan with him and then be the one that gets the deduction?   Thanks!!!

What if both are on the loan but only one is in title?

Answer:

It may have to do with how your ‘buyer’ files her tax returns.  If she files single and holds title as Joint Tenants, there may be a case for her receiving a partial payment of the credit.  This is really a question best asked of the IRS

Question:

How much would you expect to pay foreclosure in benicia?

Answer:

If you are speaking about a specific property that you are looking at and you are wondering what to offer?  That’s where an experienced Buyer’s Agent will help out tremendously.

Depending on where the seller of the home (bank) lists the home and what the buyers are paying to live in that neighborhood - that will determine what you should offer in order to be “in the game”.

Offering less than what is being offered because you think you can “get a deal” is a myth unless you’re a mostly cash buyer and the seller thinks they can unload the home quickly and with no hiccups.

If you are asking for the seller to pay closing costs, and if you REALLY love the home…..the bottom line is - everything on the market right now is a GREAT buy if you plan on living in the home for a while.

Another thing to consider, for the sake of being competitive, is that you can not buy the home for “more than it’s worth”.  Regardless of the sales price, if the appraised value of the home comes in less - the seller will typically reduce the sales price to meet the value.  The lender will not finance more than the home is worth.

Hope this helps - if you’re not working with a Buyer’s Agent yet, start interviewing one now.  A good agent will give you a significant edge when making offers.  Rod sounds like he know his market…maybe start there.

Scott

Question:

How to get a Fair CMA???? Superior comps

Answer:

Your very best bet would be to have an experienced buyer’s agent helping you.  I am not an agent trying to solicit business here - this is just good, honest advice.

What offer you make depends on many factors - first and foremost, how much do you love the home?  If your intention is to make an offer that is aggressive enough to get accepted, the good news is that you can not pay more for the home than what it’s worth.

Let me explain.  Regardless of what the “purchase price” is of the home - the lender will not lend more than the home is worth.  This is a valuable tactic for making offers on foreclosure homes in competitive offer environments.

Once the appraisal has been completed by the lender (for your home loan) you will know exactly what the current value of the home is and ultimately, what the sales price should/would be.

Complete the appraisal within your contingency period and you can back out of the purchase if the seller refuses to sell the home for what it’s worth.

Hope this helps a little.

Question:

Can the 1.75 pts on a FHA loan be financed? If so, can it top the limit of 729k  w/o being  nonconforming

Answer:

The first place to start would be the HUD website to make sure that you’re in an area that will allow you to go to the maximum $729,750.

The loan maximum allowed LTV is calculated off the base loan amount.

Here’s a link to the HUD website for verfication - FHA Loan Limits from HUD Site

Question:

I have a 30 year fixed 5.875% APR loan. At what APR is it worthwhile to refinance?

Answer:

One other thing to consider would be what your ultimate goal is.  If you are simply trying to reduce your monthly payment with no consideration of long term cost, then refinancing and reducing your payment may be a benefit.

Especially at your interest rate, many times it doesn’t make long term sense to refinance if you’ve had that loan for longer than a few years.  By ‘resetting’ and re-amortizing your loan, the cost will be considerable over the long term.

Remember when you first received your loan statement and almost all of your payment went to interest?  Well, if you’ve had your loan for a few years, that number has begun to skew toward the principle side paying more and more toward reducing the loan each month.

By refinancing, you are tipping that scale back to a mostly interest packed payment which will not benefit you in the long run.  It’s something to consider and most loan officers fail to address this because it means they don’t make a commission!

Hope that helps in your decision making process

Question:

How much mortgage broker usually gets from the deal?

No matter if he/she is paid by bank or directly by the buyer. How my do they make usually? I googled it and see people saying that 1% is fair? Is that true? Is there any averages or ranges available somewhere?

Answer:

“Wow, 1.5% ti8 2.5%, that’s crazy!” - I think Jack Winters that disclosed the 1.5% - 2.5% is probably the most honest answer you’ve received here.

Lenders and Brokers always make more than just what is charged on line 801 of the good faith estimate or HUD 1.  The only question is do they disclose it?

Most lenders will typically 1% as an origination or discount fee (which is not a true buydown) and they will get around 1% from the lender.  It’s not a “kick back” so much, especially if it’s a direct lender.

There is a lot of money earned by the servicer of the mortgage loan over a period of time, especially when the majority of your mortgage payment is interest for the first 10 to 15 years or so.

The bottom line is, Jack provided the most accurate answer if you really want the truth.  1% is a typical loan origination fee and lenders will explain to you how they make money and give you the opportunity to determine how to structure the loan and rate so that the buyer/owner gets the most benefit from their loan…ie…TRUE discount points.

Great question - Interesting response from Pros

Question:

H4H lender is forcing me to use a lawyer in order to apply for an loan. If this wrong?

Answer:

Hope 4 Homeowners is not a lender or a company Okwjoe - it’s a loan modification company that is trying to trick you into paying an upfront fee.  Do more research, i can refer you to a company to give you a different perspective on the process - www.helpUmodify.org

I don’t typically like to talk about business here but I am passionate about helping consumers avoid scams like this!  Congratulations to you for asking more questions.

The Hope 4 Homeowners program was a miserable failure and the Treasure, FDIC and the Fed have since come up with better options.  They are working on the H4H program, but they’ve got a ways to go on it.

Hope this helps