FHA-Condos-Updates

Huge Updates – FHA Makes it Easier to Finance Condos

Starting October 15, 2019, FHA is updating their guidelines to make financing a condo easier for owners. This has been a long awaited update that will allow for individual unit approval and relax it’s requirements to make more properties eligible for FHA financing. 

This new policy creates flexibility within changing market conditions. This update includes the following key changes: 

Individual Condo Unit Approval for FHA

It is now easier to approve single-unit condos for financing. Previously, a person who wanted to purchase a condo using FHA financing had to choose a unit within an existing approved condominium project. The entire building would have had to receive approval before a person could buy a single unit with an FHA-insured mortgage loan. 

Now the FHA will allow the approval of individual condo units! The new guidelines will allow certain single-unit condos to qualify for FHA mortgage insurance, even if the rest of the project/building has not yet been approved for the loan program. 

Who Benefits from this Change?

Ben Carson, the HUD Secretary, believes that this new update will be especially helpful to first-time home buyers and senior citizens. 

“Condominiums have increasingly become a source of affordable, sustainable homeownership for many families … Today, we take an important step to open more doors to homeownership for younger, first-time American buyers as well as seniors hoping to age-in-place.”

The majority of FHA-insured condo buyers have never owned a home before. HUD estimates that there will be an additional 20,000 to 60,000 condos per year could become eligible for FHA financing. 

Condo Restrictions

  • Lenders are able to do single-unit approval for existing condos that are not in an approved development at 90% LTV. The borrower must have 10% down.
  • Unit is at least one-year old or is already occupied
  • Not in a project that has been denied, banned or blocked by the FHA already. (It can be an expired project or not appear at all, but not a Rejected project)
  • The project has to have five units or more
  • 50% or more owner-occupancy percentage (If we can get the project approved it’s 35%, but on a spot loan it’s 50%)
  • 10% or less FHA concentration (no more than 10% of the properties already have FHA loans)
  • No manufactured homes
  • No houseboats
  • Is not part of an unapproved phase of a condo project that has approved phases already
  • No cooperative ownership
  • No condo hotels or hotel arrangements
  • No rent pooling agreements
  • No timeshares
  • No multi family condo units
  • No care facilities
  • Not in a Coastal-Barrier Resources System (coastal areas where new construction is no longer allowed)

Disclaimer: We are not affiliated with the Department of Housing and Urban Development or the Federal Housing Administration in any way. The information above is for educational purposes only and does not constitute official policy. To learn more about these changes, refer to the HUD website.

 

Sources: 

http://www.homebuyinginstitute.com/news/fha-guidelines-individual-condo-units/

https://www.housingwire.com/articles/49851-fha-to-make-financing-easier-for-condo-owners/

https://www.forbes.com/sites/brendarichardson/2019/08/15/new-fha-guidelines-expand-access-to-condo-mortgages/#679da059323b

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HappyFam-FirstTimeHomeBuyers

How to Buy your First Home: The Steps you Need to Follow

Buying your first home can be SO exciting, but it can get overwhelming if you’re unsure what all the steps are. So much excitement comes with knowing that you qualify for a home loan and soon you will be buying a home in Arizona. Before you start your journey to buying a house in Arizona, here are some tips you may want to keep in mind. 

  1. Grow your cash reserves 

Home buying can be an expensive venture, and you will need to have some cash set aside. For some homebuyers, getting a mortgage is the first option in order to finance their dream home. However, first-time homebuyers may not be aware of the importance of having some cash set aside before applying for a home loan or considering different Arizona home buying programs that finance homebuyers. Many lenders require cash reserves before accepting loan applications. Here are some important facts you need to know about having cash reserves when applying for home mortgages. 

  • Cash reserves are the saving balances that will be available after the close of the home purchase. 
  • You may use part of the cash reserves to clear down payment for the home you are planning to purchase. 
  • Lenders consider cash reserves to be the emergency fund and you will use it as a backup to pay for housing expenses in case anything happens to your income.
  • Mortgage lenders will calculate cash reserves in months. This refers to the number of months your reserves can be used to pay for housing expenses.

Note that having larger cash reserves before applying for a mortgage can help to negotiate for a lower rate. Therefore it may be beneficial to consider accumulating enough cash reserves to attract cheaper mortgage rates from lenders.

2. Determine the value of the house you are willing to purchase

The second step that you need to consider is determining the value of the house that you can afford. It is not all about buying a house in Arizona, but ensuring you are buying an affordable property. This helps you to avoid over borrowing. Some home buyers find themselves trapped in debts because they purchased a property that is more expensive than what they can afford to pay. If you qualify for a mortgage when buying a house in Arizona, it does not mean you have to take the maximum amount to purchase the property. You need to consider a suitable Arizona home buying program that will help you finance the home while also making it affordable for you to repay.

3. Use your cash reserve as a down payment

If you are not able to raise the full amount to purchase a home in Arizona, then try raising the down payment. This can be 20% of the total price or even more. This means that you will not have to pay for private mortgage insurance. The PMI is meant to protect the mortgage company when you are not able to make the repayments ending up to foreclosure.

Not sure where to start? Have more questions? Find a Loan Officer and ask them anything!

4. Compare home buying mortgage rates 

Congratulations for qualifying for the loan! What’s next? Compare what other lenders are offering. Research different Arizona home buying programs. Be keen to check the rates at which they are willing to lend you at. Some lenders will charge you more compared to others. Remember to read the full mortgage terms and conditions and ask questions. Just because a lender is charging you a lower interest rate doesn’t mean the mortgage will be affordable for you. The terms and the total cost of the mortgage might make the mortgage more expensive. Don’t be afraid to ask questions throughout the process.

5. Does the Home you are buying match your requirements?

There are several factors to consider when determining a suitable home. Are you purchasing a home with an intention to resell for a profit? What is the likelihood of finding a buyer in case you are planning to resell? Check for the features making the home suitable and other attractions in order to determine if the price is suitable and right for you.

6. Consider Home inspection and valuations to ensure a fair buying price

When buying a home in Arizona, you need to involve third parties. First, you need home inspectors who will check to make sure the home is constructed as per the local regulations and standards. If the house does not meet the minimal requirements, you might end up incurring losses when the authorities finally catch up with you. The property valuer will calculate the face value of the property to advise you if you are getting fair pricing.

Consider undergoing the above steps before buying a house in Arizona. The steps will help you identify a suitable lender, the best Arizona home buying programs while making sure you purchase the most suitable and affordable property.

Ready to see the amazing possibilities of owning a home? We’re happy to help. Get a payment quote and one of our Loan Officers will gladly assist you.

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5 Hacks for First-Time Home Buyers Looking For a Fixer-Upper

Buying a fixer-upper can be a fulfilling, rewarding experience — or a total nightmare!

If you’re not careful, that charming little bargain might have hidden damage that significantly increases the price and increases the amount of work needed. If you’re planning on living in the house, this can be intrusive and frustrating. If you’re looking to flip the home, this could be a financial disaster. Here are 5 hacks for buying a fixer-upper.

Not sure where to start? Have more questions? Find a Loan Officer and ask them anything!

1. Decide on your Goals

You should decide whether you’ll be living in the house or flipping it before you make the purchase because this decision will guide many of your future actions. For example, if you want to flip, you should have contractors lined up for all work before you make your bid. Time is not on your side when flipping; the longer it takes to sell, the higher your costs. Flipping will affect your cosmetic choices, too. In your own home, you can add any personal touches you want and develop the home to your own preferences. But if you’re selling, you want to make generic, non-controversial design choices in line with current trends.

2. Finding a Good House

As MoneySense explains, most buyers are superficial, so houses that have been on the market for a while are great candidates for fixer-uppers. It could be that everyone saw a dirty or old-fashioned house and were either put off instantly or didn’t want to spend the money on remodeling. Of course, you’ll need to do your due diligence and ensure there isn’t a more serious reason the house hasn’t sold yet. However, if you can find a worn-down place that’s been on the market for a while, you’ve got a strong justification to make a low-ball offer. You can also look up foreclosed homes in your area or simply tell a few agents what you’re looking for, as they’ll have a good knowledge of what’s available.

3. The Buying Process

Fixer-uppers require a bit of extra work before buying, as well as afterward. Make sure you have the house fully inspected, especially if the house is in a deep state of disrepair, has been on the market for a very long time, or has a particularly low asking price. Remember, a highly rated inspector can make all the difference in unearthing major problems that will save you money and headaches. The average cost of a home inspection is $278 to $390, so consider that money well spent if you avoid a disaster. If the inspection results yield moderate concerns, and if your negotiation skills are decent, you might be able to persuade the current owner to foot the bill for some of the repair costs. If you want to flip the house (the median sales price for a home in Mesa is $254,000), you should also do an in-depth analysis of all your costs versus the potential sale price, and use this to guide your bids.

4. Doing Repairs Yourself

Warning! Are You Making These Mistakes That Could Be Killing Your Credit? Joey Chandler Friends

If you hire contractors to make renovations, you’ll be paying one or more people an hourly rate to complete jobs, on top of your material costs. So to minimize your overhead, you’ll want to complete as much work yourself as you can. Make sure you have the right equipment for the job. Buy or rent power drills, jigsaws, sanders, levels, stud finders, and other equipment ahead of time, according to the work you’ll need to be doing. Of course, the extent of DIY work you do will depend heavily on your time constraints and skill level. Be honest about this, and if you’re a novice, pick a home that needs only minor repairs.

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5. Living with Construction

One of the most important factors in buying a fixer-upper is determining where you will live during renovations. If you can afford to live in your current home, you’re in luck. If you need to live in your new home amidst construction, you’ll need to be prepared mentally and financially. Ideally, there should be a few rooms where you can live in comfortably that provide retreat and can be exempt from construction. You’ll also need to budget for a storage unit to hold your belongings so they aren’t vulnerable to damage.

Alternatively, and assuming you have the space, you could spring for a prefabricated steel storage shed to put in your backyard, one that can be used to store your possessions during the construction process and after. Not only are they relatively low cost and easy to set up, but a prefab steel building can safely keep your things secure on your property, as opposed to stored inside a unit that could be miles away from where you live.

Buying a fixer-upper is not for everyone, and that’s part of the reason you’ll have less competition and be able to buy at a lower price. While it’s true that a worn-down house can sometimes turn out to be more trouble than it’s worth, diligence and caution can help you avoid these nightmare scenarios. If you plan carefully, and you’re realistic about the costs, a fixer-upper could turn into your dream home — or turn a tidy profit!

Ready to see the true possibilities of owning a home? We’re happy to help. Get a payment quote and one of our Loan Officers will gladly assist you.

5Mistakes

Warning! Are You Making These Mistakes That Could Be Killing Your Credit?

Congratulations! You filled out your loan application...

with a lender and you are under contract on your dream home! You are handing the keys over to the mortgage company and keeping your fingers crossed that your loan will go through. Maybe, you aren’t worried in the slightest because you know that you have a stellar credit score, money in the bank, and everything seems to be going smoothly. On the other hand, that little voice inside your head is persistently egging at you, telling you the loan isn’t going to go through because of x, y, and/or z. Either way, we want to make sure you feel 100% confident when applying for a mortgage loan at any point in your life. 

As a lender, we take your documents and push the loan through the process as soon as possible. Typically, we get everything ready with time to spare and you are looking good on your clear to close. THEN you decide to open a new Target Red Card (come on, have you ever met anyone that does NOT enjoy shopping at Target?), one week before we are closing on your home… OR you deposit all of your mattress money into your bank account because you’re getting ready to buy some pinterest-worthy furniture for your new digs. You didn’t want to put it on a credit card or make a large purchase before closing, right? 

STOP RIGHT THERE! We have got to get you prepared, otherwise that home that you have invested Earnest Money into, may disappear. This is not an exaggeration. We have borrowers tank their loan in minutes.

Let’s make sure we set you up for success and get you that dream home!

Not sure where to start? Have more questions? Find a Loan Officer and ask them anything!

Here are 5 Credit Mistakes to Avoid During the Loan Process

We may pull your credit report at closing, and if your credit scores have dropped, you may no longer qualify for the rate that was underwritten and the final approval may come back with a higher rate. You may have to start the process over again depending on how badly you have damaged your credit.

1. DON’T APPLY FOR NEW CREDIT OF ANY KIND.

Warning! Are You Making These Mistakes That Could Be Killing Your Credit?

We talked about this previously, but let me stress that unless you are given specific instructions to do so, it is best to avoid any attempts at obtaining new credit. This includes “Pre-Approved” offers that you have received in the mail, or at a department store that offers a discount for applying for their store card. When your credit is pulled by a potential creditor or lender, you can lose points from your credit score immediately, so best to just hold off for now.

2. DON’T CLOSE CREDIT CARD ACCOUNTS.

Warning! Are You Making These Mistakes That Could Be Killing Your Credit? Ryan Gosling

Hold off on closing credit card accounts until after close. If you do close an account, it can impact your credit score in a number of different ways, such as decreasing your “available” credit, thus increasing your balance/limit or utilization percentage. It can also affect the length of credit history factor.

3. DON’T MAX OUT OR INCREASE THE BALANCE ON ANY OF YOUR CREDIT CARD ACCOUNTS.

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We know that it’s tempting to order those new Lay-Z-boys for your man cave, but please refrain! It’s a tragic mistake. Increasing credit card balances, is one of the fastest ways to bring your scores down and can impact as much as 50-100 points immediately.

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In the wonderful world of collections, there are actually many tips and tricks that can help relieve you of these financial burdens. So many in

4. DON’T DO ANYTHING THAT WILL CAUSE A RED FLAG TO BE RAISED BY THE SCORING SYSTEM.

Warning! Are You Making These Mistakes That Could Be Killing Your Credit? The Office GIF

The small things matter here. Avoid adding new accounts, co-signing on a loan, changing your name or address with the bureaus. The less activity on your reports during the loan process, the better. Don’t give them a reason to reevaluate your application.

5. AVOID DEPOSITING CASH

in your bank accounts. Remember that mattress money? Keep it where it is because if you deposit it, the lending guidelines require us to document where it came from. I know this seems counterproductive right? In this case, it’s true; more money more problems. Trust us on this one. 

 If you have any questions feel free to give us a call. Let’s make sure we protect your credit score while we are securing your home loan! Being proactive with your credit can make financing a home a simpler and faster process. We want to help you get into a home!

Ready to see the true possibilities of owning a home? We’re happy to help. Get a payment quote and one of our Loan Officers will gladly assist you.

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Easy Ways To Declutter: How To Get Your Home Into Shape

Easy Ways To Declutter: How To Get Your Home Into Shape by Jackie Waters from Hyper-Tidy

Decluttering
your home has many benefits; aside from making it more aesthetically pleasing,
getting organized can also help improve your mood and prevent stress, anxiety, and even depression from setting
in. Many homeowners aren’t sure where to start, however, and are overwhelmed at
the thought of tackling bigger jobs in the basement or garage. There are many easy ways to clear out your home without the
help of a professional, and it pays to have the right tools and knowledge
before you begin.

First,
you’ll want to think about whether you’re going to try to sell any items you no
longer want, as these will need to be pulled out and set aside. Many homeowners
plan for a garage or yard sale, but you can also place gently-used
items up for sale with apps like Poshmark and Vinted. Have cleaning supplies
ready before you begin, and make a plan for large items of furniture (in case
you need help moving them).

Read on to find out more about the best ways to whip your home into shape by
decluttering.

Learn more about the second-hand
economy

The
second-hand economy is often talked about these days as
a way to make money, but many people aren’t sure exactly what it is or how to
get involved. In short, the second-hand economy is simply a way for anyone to
sell or buy gently-used items in order to make or save money, and it’s highly
beneficial for the environment, because it prevents buildup at landfills–one
of the biggest contributors to climate change. Think about the items you own that
you no longer need or want; would they make a good fit for selling through an
app or other marketplace?

Get organized

One
of the best things about decluttering is the ability to get organized, because it will help you maintain
a clean and tidy home even when you’re busy. Having bins and shelving to place
everything you own will allow you to keep things neat and clean up quickly
throughout the week, saving you from having to complete a big cleaning job all
at once. Introduce storage solutions to each room as you declutter; you might look
for furniture that has hidden storage, especially if you’re short on
space.

Remember the rules

There’s
a general consensus among professional organizers that if you have items in
your home that haven’t been used or worn in a year or more, they can probably go. Unless it’s
a seasonal item, think about whether you’ll be able to get any use out of it or
if it would better serve someone else. There are many places you can donate to;
look online to find out what your local options are as far as thrift stores and
shelters. Many of us hold emotional attachments to belongings, so keeping the
1-year rule in mind will be helpful when you’re cleaning out your closets.

Start in the bedroom

Many
people don’t realize how much clutter their living space contains until they
start the process of tidying up, and this includes the bedroom. You may have a
nightstand full of books to be read, or a dresser surface full of jewelry and
perfume bottles. Look around, and make a list of all the spots in your room
that could be pared down or organized a bit better, and do this first, as it
can benefit your ability to sleep well and reduce anxiety.

Decluttering
your home can be a big job if it’s never been done before, so keep in mind that
you don’t have to do it all in one day. Break down the process over several
weekends to keep from getting overwhelmed, and make plans to get help if you
need heavy furniture to be moved.