Archive for January, 2010
FHA–CAN IT HELP ME?
January 29th, 2010 categories: Buying, Investment, Market Trends, Real Estate Finance, Selling
In words of one syllable, YES, it certainly can. The Federal Housing Administration was founded in 1934 as a response to the banking crisis of the Great Depression. There are a few frequently asked questions about FHA loans and I would like to answer them here. A recent Realtors Confidence Index report states that 39 per cent of recent home buyers purchased with a FHA loan. My problem with that is the question of what is a “recent period of time?” Suffice it to say that this type of loan has become more popular because of the housing credit crunch.
1. Does the FHA actually provide the loans?
No, the FHA insures the lender.
2. Are FHA loans available only to low income borrowers?
No, there are loan limits, but the loans are available to any qualified buyer.
3. Is it true that FHA loans are only available for small homes?
No, they can be used for all sorts of properties. Single family homes, condominiums–even owner-occupied multi-unit properties. Repeat, there is a limit to the amnount that can be borrowed. Note: not all condominium associations are eligible for FHA loans.
4. What about first-time home buyers, are FHA mortgages only for them?
No, again, anyone who qualifies can have a FHA loan. If you have a low credit score or a smaller down payment, they are particularly helpful.
5. Are FHA appraisals more difficult than other appraisals?
The lender must use an FHA approved appraiser when they order the appraisal. It shouldn’t take any longer or be any different from any other appraisal.
6. Does FHA loan processing take more time and is it more difficult and complicated than conventional loans?
No, it coesn’t take longer. Any delay can have a variety of causes–incomplete paper work or a slow lender or any of a number of reasons. I have heard of FHA loans closing in 30 days.
7. Can all lenders make FHA loans?
Not everyone can make an FHA loan. The lender must be approved by the FHA.
This is the basic nuts and bolts of the thing. Let me know if you need more information. I can also give you a list of approved condominium associations in a given zip code. Just call me at 312-981-2360 or my cell phone, 312-607-1306 or e-mail me.
Here are three other posts you might enjoy:
Credit Boo Boo Down With Your Credit Score
Home Affordability and Mortgage Rates
| Discussion: 1 Comment »
A DREAM COME TRUE–WINNING A NEW HOME! NOT!
January 28th, 2010 categories: Buying, Market Trends, Selling
All of us have probably fantasized about winning that million dollar home with the purchase of a one hundred dollar raffle ticket–sounds great doesn’t it? Mary Umberger recently published a good article about how the raffles work. I found it interesting and you might find it interesting too. Just click here. There are a number of charitable organizations in the Chicago area who routinely run a house raffle. I have listened to their radio ads for years and always sort of wondered how they work. Many winners elect to take the cash payment for a couple of reasons. The Internal Revenue Service regards the win as if it were cash and not a new home–a huge headache that arrives on April fifteenth. You are living in a dream home and you can’t afford the taxes–more of a nightmare than a dream! That situation would give new meaning to the words “house poor.” If you take the cash prize rather than the house, the charity will withhold $250,000 for the IRS. Another interesting point that the article makes is that the charities themselves hire consultants who help them with the nitty gritty of running the raffle. It isn’t a ticket selling raffle but HGTV’s annual Dream Home Giveaway is extremely popular and it does not have a cash alternative to the home. Most winners have sold their homes because of the tax consequences although some people have sold them because they were too far from their real home. I enjoyed learning a bit more about the home raffles–hope you do too.
Other articles that you may find ineresting are:
Is Your Home A Money Pit, Sinkhole or Drain?
Commute Time and Cost? Is It Worth It?
Chicago Real Estate News vs. National Real Estate News
| Discussion: 1 Comment »
CANCELLED FINAL WALK THROUGH? WHY?
January 27th, 2010 categories: Market Trends
So there I was, waiting in the lobby for the buyers and their Realtor–this was the day for the final walk through and closing. It is eight-thirty in the morning and closing is scheduled for nine in my office–very close by. Both of the buyers had taken the day off to close. I arrived in the lobby of the building, no buyers and their agent, so I sat down and listened to voice mail. The buyers’ agent had called me at 10:30 last night–no closing. I had not heard my cell phone so I hot footed it to the office–sure enough, the closer was here. After telling her the news. I quickly called the seller’s attorney to wave him off and next of course was the seller. What happened? The buyers’ lender had made a huge error in the APR, the Annual Percentage Rate for the loan. The APR takes into account some of the costs of getting the loan–points, most loan fees and mortgage insurance. Not taken into account are non refundable application fees, title insurance premiums, late payment charges, appraisals, title examination fees and document preparation. Apparently the lender had exceeded the 1/8th of a percentage point difference that is allowable–things do change during the mortgage approval period and the rule allows for that with the1/8th of a percentage point rule. There is a three-day waiting period before the closing can happen so that the lender can disclose the new APR to the buyer.
Why do we have APR? It is to help you compare the actual cost of your loan from more than one lender. The terms can vary from lender to lender and the APR enables the borrower to make a good comparison. The APR allows the consumer to compare apples to apples–certainly a valuable thing to do. The reason for the three-day waiting period after the lender discloses the true APR is to allow the borrower to compare APR figures. It is just possible that the borrower might not want the loan when they see the new APR. Hopefully we will get this closing done on Friday–the fourth day. I am ever so glad that the buyers were not stuck with a moving truck outside the building waiting to unload–that can get to be a really nasty scene. This is one more reason to be really, really sure that your lender’s representative is thoroughly aware of all the new rules and regs.
Do you need someone to help you find a property and take advantage of the tax credits? Just let me know, 312-981-2360 is my direct line and my cell phone is 312-607-1306. E-mail is great too!
Other posts that might help you are:
Mortgage Approval Process No Nos
Must Haves for a Mortgage Application
A Final Walk Through Is a Mandatory Must Do
| Discussion: 1 Comment »
LOUIS SULLIVAN RESTORATION! HOORAY!
January 25th, 2010 categories: Buying, Chicago Events, Market Trends, Selling
Blair Kamin, architecture critic for the Chicago Tribune, published a wonderful article on the restoration of the old Carson, Pirie, Scott & Co. store at One South State Street. Because I am a rabid Chicagophile and because I used to be an architectural historian I was delighted to read the article describing a thoughtful, loving restoration. I can hardly wait to get down to State Street and see something that has made it yet again a great street. Sullivan’s work has been almost systematically destroyed so it is an unusual and wonderful happening that this restoration has been so carefully done. I recommend that anyone with even a smidgen of interest in Chicago architecture read the article. Louis Sullivan’s ornament is some of the most beautiful ever created. Just click here to read the entire article. The retail space has been difficult to fill even though the office space is 80 per cent rented. The location is fabulous–hopefully the retail space will rent as the economy improves.
Here are three articles you mikght find interesting:
Real Estate Definitions–More of Them
Real Estate Definitions–Even More of Them
Sweet Dreams? No! A Bit Kooky? Yes
| Discussion: 1 Comment »
REVERSE MORTGAGE? WHAT IS IT?
January 22nd, 2010 categories: Buying, Market Trends, Real Estate Finance
Have you ever wondered about a reverse mortgage? I know I have. Mary Ellen Podmolik recently published an article in the Chicago Tribune that explains what a reverse mortgage is and how it operates. She gives both the pros and the cons. One of the significant negatives is the fact that the total cost of the fees can be up to 10 per cent of the loan amount. If your home is paid for and you are finding yourself strapped for cash, you might want to investigate a reverse mortgage. To read the entire article, just click here.
Do you need an experienced Realtor to help you identify a new home? I would love to be that Realtor–just call me at 312-981-2360, that’s my direct line or on my cell phone, 312-607-1306. I also like e-mail! In this day of electronic marvels, I can e-mail listings to you after we have identified the price range and neighborhood that suit you best. So, I am applying for the job of helping you find a new home.
Here are some other articles that you might find interesting:
Credit Boo Boo Down With Your Fico Score
Underwriting Can Be a Minefield
15 Year Mortgage vs. 30 year Mortgage
| Discussion: No Comments »
SLOWLY GETTING READY TO SELL?
January 20th, 2010 categories: Market Trends, Selling
Yes, that’s what I said–take your time! Let’s pretend you are thinking of downsizing when the last chick leaves the nest or you are retiring and moving to a less hostile environment–why not use the time between now and then to get your home ready for sale. You could even take a couple of years. Here are a few things to think about.
- Anything that can endanger the home or your health should be a top priority. Obviously a leaky roof needs to be repaired or replaced. Faulty wiring is a danger to you and your family and will probably come up with an inspection.
- Unless you are in a high-rise building, a termite inspection is not a bad idea. Termite damage is inside the wall most of the time and a trained termite inspector knows what else to look for in other parts of the home. And termites do thrive in Chicago–in some of our most expensive neighborhoods.
Remodel your kitchen and baths? This is expensive and time consuming. Think about just changing the counter tops and appliances. Perhaps a new vanity and light fixture for the bathrooms–just to freshen.
Consider replacing moldings, doors and trim–not too expensive and the effect can be remarkable–add crown moldings if you don’t have them. Of course you want to have a fresh coat of paint–that is always the best, cheapest freshener ever. Rip out old carpet and replace it unless you have wood floors that can be refinished relatively inexpensively. A neat trick is to buy cheap carpet and expensive carpet pad.
And of course we always get to clean and de-clutter–I don’t know how many times I have written about clean and de-clutter and they still are the absolute bedrock foundation for getting a home sold. Remember that you will have to pack, unpack and pay for moving everything you choose to keep. Cleaning out and getting rid of unnecessary belongings is probably best done slowly–a good reason to start preparing for an eventual move while it is still eventual. Even if you decide not to move–think how organized and clutter free your home life will be!
Of course each home is individual and differs from every other home in its needs–if you would like to talk to someone about what will help your home sell without spending a lot of money, just call me. I am at 312-981-2360, direct line, or cell 312-607-1306. I like e-mail too!
Here are a few articles you may find helpful:
Paint the Easiest Cheapest Refresher
Rub a Dub Dub–How About a Cheap Tub
Need to Spruce Up Your Home and Stretch Your Dollars?
| Discussion: 1 Comment »
HOW GREEEN ARE MY WINDOWS
January 19th, 2010 categories: Buying, Market Trends, Selling
One of the Tribune’s real estate columnists, Mary Ellen Podmolik, recently published an article about what the Department of Energy is doing to encourage the replacement of old leaky windows with new, very energy efficient, windows. We’ve talked alot about green, green, green and here is a concise statement about windows. One of the points that I had never thought about is that you don’t lose heat and cool only through your windows–the rest of the house has to be sealed tightly or the windows won’t make much of a difference. If you are considering replacing windows, you surely want to read this article–just click here.
Here are several articles that might help you:
Energy Tax Credits Going Down The Drain
A Healthy House is a Green House
| Discussion: 1 Comment »
CHICAGO REAL ESTATE DREAMS
January 18th, 2010 categories: Buying, Market Trends, Selling
Don DeBat is another excellent real estate writer who can be found in the Chicago Sun Times. Don recently published a wonderful summary of Chicago real estate fantasies. One of the most interesting is Gerald W. Fogelson’s proposal to build a six-block long deck on the air rights over the Metra railroad tracks along Lake Shore Drive between 14th Street and Cullerton Avenue immediately west of Soldier Field. Another interesting idea is the development of a so-called Veteran’s Village on the site of the former Michael Reese Hospital. To read this imaginative article by Don, just click here. We have such a wonderful city–how great to have more dreams that could improve it! Remember, Millennium Park was just a dream a few years ago. Navy Pier was just a dream a few more years ago and look at the dimension those two dreams have added to our wonderful Chicago!
Questions about Chicago real estate–call me, direct is 312-981-2360, cell phone is 312-607-1306. E-mail makes good sense too!
Other articles that might interest you are:
In God We Trust and Our Realtor. . .
Chicago Real Estate News vs National Real Estate News
Commute Time and Cost? Is It Worth it?
| Discussion: 1 Comment »
CHANGES THAT YOU MUST KNOW ABOUT
January 15th, 2010 categories: Market Trends
Larry Steinway has written a short article on the changes in lending rules that went into effect on January first. If you have even an inkle that you will be buying or selling a piece of real estate this year–read on!
Hello All,
I wanted you to be aware of the vast changes that have once again challenged our industry beginning January 1, 2010. The new Regulation X (as it is being called) dramatically affects the way disclosures are handled on the loan side of a purchase or refinance. This has hit the whole industry nationally, whether the loan is done through a bank, broker or mortgage banker.
The new GFE (Good Faith Estimate) 2010 may have ramifications on the time a transaction can be completed and any changes that may affect the deal along the way. Any “change” to rate, fees, extensions, sales price, credits, etc… or anything that may affect the APR of the loan could impact the ability to close on time. Due to these changes, it has never been more important to fight for a reputable title company and a lender that you know and trust to handle your transactions. This is not a market for rookies!
There are many lenders pushing for changes to the purchase contract to now extend the loan contingency dates and to encourage longer escrow periods to allow for these changes. Many rush situations will now be completely out of the control of the lender to accommodate, as any change to the transaction will set into effect a new process for re-disclosure, so please establish realistic time frames when negotiating your purchase contract.
I will be sharing a lot of information on a go forward to keep you informed, but wanted to make sure you were aware of some of the implications of the changes that went into effect. This is said to be the biggest change to the mortgage lending industry in over 20 years and will have a vast impact on the ability to modify and change purchase transactions and any change that will impact the APR on the loan.
We have hit the ground running with significant training and education to keep us at the front of the pack. I will keep you informed as to how the change is impacting the lending world and to keep you up to date on what you can expect for the future.
I appreciate your support and will guarantee that we will do everything in our power to educate you and your clients and to insure a smooth lending process for your clients. I am committed to your success and know that 2010 will be solid year for Real Estate.
Thank You
Larry Steinway
Senior Mortgage Banker
P: 312.884.7373
F: 312.592.7534
Baird & Warner Financial Services
737 N. Michigan Ave.
18th Floor
Chicago, Illinois 60611
Thanks for reading the article–it really spotlights all the things Realtors and buyers and sellers need to be aware of RIGHT NOW!
Questions? Call me at 312-981-2360, direct, cell phone is 312-607-1306 or e-mail me.
Other articles that you might find helpful are:
Credit Boo Boo Down With Your FICO Score
15 Year Morgage Vs. 30 Year Mortgage
Record Keeping 101 for Home Owners
| Discussion: 1 Comment »
BUYERS NEED TO KNOW. . .
January 14th, 2010 categories: Buying, Market Trends
Along with the glorious spring thaw Chicago is experiencing, I am expecting buyers to come out in full force. Especially with the tax credits available now. If you would like to have the key to a wonderful new home in your hand, here are a few things that you need to keep in mind as a buyer:
- Closing costs. These can add up and they can be significant. Remember to figure them in your estimates of cash needed to close. I have a sheet that lists them all–I would be happy to e-mail it to you,
- Condos can be a bit more difficult than a single family home purchase. Lenders are looking at the building as well as the buyer. Have your agent get the condo questionnaire early so that if there is an issue with the building you know about it before you pay for an appraisal.
- Investigate sources of money other than the tax credit we all know about. The federal government has a Mortgage Credit Certificate program. This program is for first-time buyers with moderate incomes.
- Choose your Realtor with care. Experience, knowledge of the area you want, these are important and I think the most important thing is to have a Realtor who listens to you and gets back to you with the answers to your questions promptly. Being a friend or relative may be a good reason to choose a Realtor–it should not be the only reason.
Looking for a Realtor with experience in the Chicago market? Just call me, 312-981-2360 (direct) or cell phone 312-607-1306. E-mail is great too!
Other posts that might be helpful to you:
Common Sense for the Tax Credit Extension
| Discussion: No Comments »
