Q & A Saturday – When Do I Need Flood Insurance?

Welcome to our Q & A Saturday video.

In these Q & A Videos we will answer your questions about real estate.  Any real estate related topic from questions about  selling your house, buying a house, real estate investor questions, land lording questions, local market questions and many others things are all fair game. 

Today’s question is “When Do I Need Flood Insurance?

In this video Shaun talks about when you will need flood insurance for your house.

 

Some of the main points covered in this video are:

1)      What is Flood Insurance?

2)      What is my risk?

3)      When do I have to get it?

4)      Should I get it if I do not have to?

 

The National Flood Insurance Program (NFIP) was created by Congress in the 60s to help with people that were victims of floods since most homeowner’s insurance policies did not cover these events.  The program is run by FEMA and rates are based on risk levels for a given property based mostly on the location and the expected probability of a flood occurring.

Unfortunately there is a lot of controversy as to how accurate the flood maps are and if these probabilities are realistic.  Also in the last few years many maps have been redone, putting many properties in flood zones that were not before, and rates have increased, sometimes significantly.

The short story is if you are deemed to be in a “High Risk” zone and have a mortgage held by pretty much any back you will be required to have flood insurance.  If you have a mortgage through a private they may require it as well but might not.  If you own the property outright it is your choice to have the coverage or not.  There can be good reason to have the coverage but you also may feel it is a waste of money and would rather self insure (as in pay for any flood damage yourself with money you have set aside for repairs).

Flood insurance has become a much bigger concern the last few years as it can be very expensive now so those costs have made some places very unaffordable for people to buy.  Some changes were made that made things a little easier on people but it has still become a much more important consideration when buying a property than it was even a few years ago.

 

 

Do you have a house in a Flood Plain?  Do you need to sell a house in Massachusetts or New Hampshire and can’t afford the flood insurance?  If you would like to sell your home  fast and hassle free  schedule a consultation  with us today.

 

Hope you enjoyed the video and leave any other questions you have about the topic below or any other topics you would like to see covered in future videos.  I encourage anyone that has things they would like to talk about to let me know what they are.  You can always fill out a contact us form here and put Q & A in the subject, just leave a comment with your questions below here, send an email to info@masshomesale.com, or post it on our Facebook page or Twitter account.

 

Some useful resources:

          The Governments “Flood Smart” website to learn more and see your risk.

          Our main article on Selling a House As Is.

          Our Video on Selling a House As Is.

          All of our posts on Selling a House As Is.

          If you want to sell a house in Massachusetts or in New Hampshire we can help.

 

 

 

 

 

 

(Image credit: Japanese Floods via RT.com)

 

Q & A Saturday – What is an Assumable Mortgage?

Welcome to our Q & A Saturday video.

In these Q & A Videos we will answer your questions about real estate.  Any real estate related topic from questions about selling your house, buying a house, real estate investor questions, land lording questions, local market questions and many others things are all fair game. 

Today’s question is “What is an Assumable Mortgage?

Assumable Mortgages - Creative Real Estate

In this video Shaun talks about what is an Assumable Mortgage and how they work.

 

Some of the main points covered in this video are:

1)      What is an Assumable Mortgage.

2)      What are the advantages.

3)      What are some of the drawbacks.

4)      What types of mortgages are most likely to be assumable.

 

An assumable mortgage used to be a pretty common way to purchase a house until the early 1980’s.  Sellers would offer their houses up with possible financing in place and there was not much to taking over a mortgage and the seller no longer being obligated to paying the loan, the new owner would be.  However at that time banks realized they were losing a lot of potential income as rates were in the double digits for home mortgages and the loans being assumed were far less than this.  At this time the “Due on sale” Clause started being very common and soon would be found in all conventional mortgage loans.  Typically today the only loans that can potentially be assumed are FHA and VA loans.  Even with those the new borrower will have to go through a qualifying process that is not much different than the one needed to get a new loan.

There are definitely some advantages to the seller if the loan is assumed vs. being taken “subject to”, which essentially is the same result except that the sellers name is still on the loan and they are ultimately still responsible if the new buyer does not pay it.  Therefore, MUCH less risk for the seller in this scenario.  On the opposite side it will be more risky for the buyer since in this case they are responsible for the loan when in a Sub To deal they can walk away unscathed (The ethics of this is a different story…).

The only real reason to want to take on as assumed mortgage would be if the terms are much better than the ones available to the new borrower.  Unlike a Subject To situation the borrower needs to qualify so the only reason to assume is if the rates and terms are very good.  Currently with the very low interest rates on mortgages there is not likely to be a big spread here.

In summary while assumable mortgages used to be very common they no longer are.  Only a small subset of mortgages generally have the possibility of being assumable and with the more stringent qualifying process needed (unlike back in the 70s and 80s) the advantages of the process is limited as well for the buyer.  So while still possible it is not a very useful method to sell a house and not a particularly advantageous method to buy one either.

 

 

Do you need to sell a house in Massachusetts or New Hampshire and not sure if you can sel with an assumable mortgage?  If you would like to sell your home fast and hassle free schedule a consultation with us today.

 

Hope you enjoyed the video and leave any other questions you have about the topic below or any other topics you would like to see covered in future videos.  I encourage anyone that has things they would like to talk about to let me know what they are.  You can always fill out a contact us form here and put Q & A in the subject, just leave a comment with your questions below here, send an email to info@masshomesale.com, or post it on our Facebook page or Twitter account.

 

Some useful resources:

–          Our Video on Selling a House with Seller Financing

–          Our Video on Selling a House with Subject Too Financing

–          Our Video on The Due On Sale Clause

–          Our Video on Selling a House with a Wrap Mortgage

–         Our Video on What are the Different Types of Seller Financing

–          Guest post on 3 Reason to Sell with a Lease Option

–         Our Video on Selling a House with a Lease Option

–          All our articles/videos on Financing and Lease Options

–          If you want to sell a house in Massachusetts or in New Hampshire we can help.

 

 

 

 

 

 

(Image credit: Assumable Mortgages via PRMI)

 

Q & A Saturday – Can I Cash Out Refinance My Rental?

Welcome to our Q & A Saturday video.

In these Q & A Videos we will answer your questions about real estate.  Any real estate related topic from questions about selling your house, buying a house, real estate investor questions, land lording questions, local market questions and many others things are all fair game. 

Today’s question is “Can I Cash Out Refinance My Rental?

 Buying a House with Cash - Doing a Cash Out Refinance on a Rental Property

In this video Shaun some of the requirements usually needed if you want to do a cash out refinance of a rental property.

 

Some of the main points covered in this video are:

1)      The typical seasoning requirements

2)      Commercial vs. Residential loans

3)      What if I own it in my businesses name?

4)      Oh by the way you still have to do all the typical stuff to qualify for the loan as well!

 

A strategy many investors hope to use when building a rental portfolio is to refinance properties to get more cash to help purchase more properties.  In the past this was an easier proposition than it generally is these days.  While these loans can be done there are many restrictions on them, in the most common places to get them, which makes it difficult.

If you are getting a typical non-owner occupied residential loan (these are your 30 year fixed rate ones with good rates) you generally have to own the property in your personal name and cannot have more than 5 mortgages in your name already.  Beyond that you have a seasoning requirement that means you have to own the property for more than 6 months to be eligible, and many banks want closer to 12.  Even at that they will often only give you around 70% of your purchase price for that kind of loan.  That might be fine unless you bought something at a good price because it needed work and you spent a lot of the repairs.

For example you buy a house for $100K cash then put $50K in to it to get it in great shape and it then appraises for $200K.  In this case you would hope to get 70% (or more!) of that appraised value so you can get most of your capital our, and still have a lot of equity.  However often at the 6 month mark you might only get 70% of the initial $100K which means you have $80K still tied up in the property.  The issue there is if the exact same deal presented itself again the investor now needs to find an additional $80K beyond what they started with to be able to do it.

 

Do you want to sell a rental house with equity?  Do you need to sell a house in Massachusetts or New Hampshire and can’t get the money out of it you need?  If you would like to sell your home fast and hassle free schedule a consultation with us today.

 

Hope you enjoyed the video and leave any other questions you have about the topic below or any other topics you would like to see covered in future videos.  I encourage anyone that has things they would like to talk about to let me know what they are.  You can always fill out a contact us form here and put Q & A in the subject, just leave a comment with your questions below here, send an email to info@masshomesale.com, or post it on our Facebook page or Twitter account.

 

Some useful resources:

–          Fannie Mae Cash Out Refinance requirements.

–           Freddie Mac Cash Out Refinance requirements.

–          Our Video on How Many Mortgages you can have.

–          Our Video on the Costs to Rehab a House.

–          If you want to sell a house in Massachusetts or in New Hampshire we can help.

 

 

 

 

(Image credit: Buying A House Cash via 702homebuyers.com)

 

Q & A Saturday – What are Closing Costs?

Welcome to our Q & A Saturday video.

In these Q & A Videos we will answer your questions about real estate.  Any real estate related topic from questions about selling your housebuying a house, real estate investor questionsland lording questions,  local market questions and many others things are all fair game. 

Today’s question is “What are Closing Costs?

Closing Disclosure Image - What Are Real Estate Closing Costs?

In this video Shaun discusses the many transaction costs to buy and sell real estate.

Some of the main points covered in this video are:

1)      What “Closing Costs” are

2)      What are some of the costs associated with buying a house

3)      What are some of the costs associated with selling a house

4)      Ballpark range a seller can expect to pay in closing costs for a normal transaction

5)      Shaun forgetting it is already the 2nd weekend of the new year :) 

 

If you have never bought or sold a piece of real estate the costs associated with the transaction can be pretty jarring when you first see them.  When buying a place all the costs associated with your mortgage loan can add up to a lot and this is on top of your attorney fees and recording fees, and any other things people stick on there for you.  When selling, especially when using an agent (like the vast majority of transactions) the costs can seem ridiculously high.  Starting with those real estate commissions that can easily add up to 5-7% of the selling price of your house, while these fees are not set and can be negotiated this is a pretty typical range.  Beyond that there will be recording fees, attorney fees and usually some number of other garbage fees that people will charge you.  Aside from that it is very common to be asked to pay some closing costs for the buyer.  This can add 3-4% to your fees if you agree to do it.  Now often the buyer will pay a little higher price, but not always and sometimes if you do not agree they just will not have enough cash on hand to buy the house.  All told it is not odd to see a seller lose 8-12% of the sale price of the house to closing costs.  For an investor running their numbers it is tough as we need to account for both sides of the transaction while running our number.  Last week we talked about the true cost of rehabbing a house and various closing costs can add up to 15-20% of the final sale price in costs so this is not some incidental number that does not have to be accounted for.  This accounting did not even account for a typical situation where we offer to pay most, or all, of our sellers closing costs so there is little mystery about how much money they will make.

 

Do you want to sell a house with little or no closing costs?  Do you need to sell a house in Massachusetts or New Hampshire?  If you would like to sell your home fast and hassle free schedule a consultation with us today.

 

Hope you enjoyed the video and leave any other questions you have about the topic below or any other topics you would like to see covered in future videos.  I encourage anyone that has things they would like to talk about to let me know what they are.  You can always fill out a contact us form here and put Q & A in the subject, just leave a comment with your questions below here, send an email to info@masshomesale.com, or post it on our  Facebook page or Twitter account.

 

Some useful resources:

–          Last week’s video on all the costs needed to Rehab a house.

–          All our articles/videos on Financing and Lease Options

–          If you want to sell a house in Massachusetts or in New Hampshire we can help.

 

 

 

 

(Image credit: Closing Disclosure Image via entitledirect.com)

 

Q & A Saturday – What is the Due On Sale Clause?

Welcome to our Q & A Saturday video.

In these Q & A Videos we will answer your questions about real estate.  Any real estate related topic from questions about selling your house, buying a house, real estate investor questions, land lording questions, local market questions and many others things are all fair game. 

Today’s question is “What is the Due On Sale Clause?

Due On Sale Clause Mortgage - Massachusetts and New Hampshire Real Estate

In this video Shaun discusses what a “Due on Sale Clause” is in a mortgage.

 

Some of the main points covered in this video are:

1)      What is the “Due On Sale Clause”

2)      How it relates to Seller financed real estate transactions

3)      What is “Subject To” and how it is related

4)      Dangers of the Due On Sale Clause

5)      Ways to avoid triggering it

6)      How is gives the bank the right, but not the obligation, to call the loan

 

The “Due On Sale Clause” is standard language you find in pretty much any mortgage and note written by a bank over the last 30+ years.  Prior to that time it was very common to sell a house “Subject To” the existing mortgage.  At that time interest rates were well into double digits for mortgages and banks did not want to miss out on originating much higher interest notes. 

This clause gives the bank the right, but not the obligation, to call the note due if there is a title transfer of any sort.  The one exception is it is transferred into a trust for estate planning purposes (This is also a work around that some investors will use to make it less likely for a due on sale issue to come up).  The most common time for an issue to arise is when an investor buys a property Subject To or with a Wrap Mortgage.  When doing these things the new owner continues to pay the existing mortgage.  If the bank becomes aware of the title transfer they can call the note due.  If this happens the new owner will need to pay off the loan, refinance the loan, sell the house to pay off the loan, transfer the property back to the original owner or let it to foreclosure.  This last part is the risk in a sub-to or wrap situation since while the new owner loses the property and anything they put into it the original owner will have the foreclosure on their credit.  Ethical investors will not let that happen and in the worst of cases will deed the property back to original owner.  It is fairly rare for a bank to invoke the due on sale clause if the loan is being paid as it is a difficult and expensive task to do a foreclosure and they have enough non-performing notes to worry about.  However it DOES happen and it is a risk.

 

Hope you enjoyed the video and leave any other questions you have about the topic below or any other topics you would like to see covered in future videos.  I encourage anyone that has things they would like to talk about to let me know what they are.  You can always fill out a contact us form here and put Q & A in the subject, just leave a comment with your questions below here, send an email to info@masshomesale.com, or post it on our Facebook page or Twitter account.

 

Resources mentioned in the video and some other useful resources and good articles:

–          Our Video on Seller Financing

–          Our Video on Subject To Financing

–          Our Video on What a Wrap Mortgage is

 

 

 

 

(Image Credit: Adaptation of lowest mortgage rate via blog.credit.com)

 

 

Q & A Saturday – Who Stopped the Yellen?

Welcome to our Q & A Saturday video.

In these Q & A Videos we will answer your questions about real estate.  Any real estate related topic from questions about selling your house, buying a house, real estate investor questions, land lording questions, local market questions and many others things are all fair game. 

Today’s question is “Who Stopped the Yellen?

Janet Yellen Portrait - MA and NH Real Estate

In this video Shaun discusses the recent Federal Reserve decision to not raise interest rates and why they made that choice.

 

Some of the main points covered in this video are:

1)      Why the Fed decision was not surprising.

2)      Problems with unemployment and participation.

3)      The US dependence on exports and the world economy.

4)      Looking at you China!

5)      Other economic concerns that may have factored in.

6)      Will they raise rates before the end of year?

 

There has been talk about when the Federal Reserve would raise rates for years now.  They have made indications that they are more confident in the economy and that day is destined to come sooner rather than later.  However they once again decided that the economy is too fragile to risk disrupting things.  I agree with the decision as I would say that things are the house of cards built on artificially low interest rates.  I won’t go into all the detail from the video but there are many reasons to agree with this thought.

 

Hope you enjoyed the video and leave any other questions you have about the topic below or any other topics you would like to see covered in future videos.  I encourage anyone that has things they would like to talk about to let me know what they are.  You can always fill out a contact us form here and put Q & A in the subject, just leave a comment with your questions below here, send an email to info@masshomesale.com, or post it on our Facebook page or Twitter account.

 

Resources mentioned in the video and some other useful resources and good articles:

–          Bloomberg Article comparing current conditions with past economies when there were rate hikes in the 90s and 2000s

–          Another Good article from the NY Times on the Fed’s decision

 

 

 

 

 

 

 

 

(Image Credit: Janet Yellen official Federal Reserve Portrait via Wikipedia)

 

 

Q & A Saturday – What is TRID?

Welcome to our Q & A Saturday video.

In these Q & A Videos we will answer your questions about real estate.  Any real estate related topic from questions about selling your house, buying a house, real estate investor questions, land lording questions, local market questions and many others things are all fair game. 

Today’s question is “What is TRID?

TRID - MA and NH Real Estate

In this video Shaun discusses some of the new regulations and procedures that will be going into effect soon with the implementation of TRID.

 

Some of the main points covered in this video are:

1)      What does “TRID” stand for – TILA-RESPA Integrated Disclosure

2)      When does TRID go into effect?

3)      What delays have there been and will there be any more?

4)      The new 3 day review period that is expected to cause delays of around 2 weeks when closing a loan after the new rule goes into effect

5)      Some cynical reasons why the mortgage industry might be planning for these delays

 

The new TRID regulations will undoubtedly cause lots of delays when they take effect this fall.  Mortgage originators will schedule things out farther and there will be many delays at the end of the process as well.  Best course is to make sure to work closely with your mortgage professional to move things along.  As a seller you or your agent should also make sure to check in very regularly to make sure things are on track.  Make sure to be prepared to gather requested information as quickly as possible to minimize these delays.  As mentioned in the video we will do a more involved blog post as the implementation deadline gets closer and hopefully more details become clearer about the ramifications to TRID.

 

Hope you enjoyed the video and leave any other questions you have about the topic below or any other topics you would like to see covered in future videos.  I encourage anyone that has things they would like to talk about to let me know what they are.  You can always fill out a contact us form here and put Q & A in the subject, just leave a comment with your questions below here, send an email to info@masshomesale.com, or post it on our Facebook page or Twitter account.

 

Resources mentioned in the video and some other useful resources and good articles:

–          Sample forms and disclosures from the Consumer Financial Protection Board

–          Article on the House Bill proposing delay in TRID enforcement

–          Great article going over TRID on The Massachusetts Real Estate Law Blog

–          Article going over reasons for longer and extended rate locks

–          TRID FAQs from Old Republic Title

–          Our Blog Post Going over TRID (Coming Soon)

 

 

 

(Image Credit: TRID-Icon via iarbuzz.com)

 

 

 

Selling a House to an FHA Buyer

Introduction:

In our recent Q&A Saturday video we discussed some qualifications needed for a property to be eligible for an FHA insured loan.  This is such a broad topic and with so many other issues involved we decided to write a more complete post discussing all the aspects involved with selling to a buyer that wants to use FHA financing.

FHA Logo - Real Estate Financing

What is FHA Financing?

First a quick discussion on what FHA financing is.  There is not actually an actual FHA loan per se.  What the FHA (Federal Housing Administration) does is insure loans made to buyers through this program and that meet the FHA’s lending guidelines.  One of the reasons for this is that the typical FHA borrower has some risk factors that would either keep them from getting a conventional mortgage or would make such a loan much more expensive.  Most lenders following Fannie Mae and Freddie Mac guidelines will start to impose “Risk Based Pricing” for lower down payments, credit scores under 740 and other things like if the property is a condo or a multifamily like a duplex or the around here the quintessential Boston Triple-decker.  For FHA no penalties for those types of properties (though condo complexes need to be FHA approved to qualify) and borrowers can put as little as a 3.5% down payment and minimum credit score of just 580.  That can even go as low as 500, but that does require 10% down.

So in a nut shell the FHA makes it possible for many people to finance a property that otherwise might have little to no chance of getting a mortgage loan.  In fact without some of these risk based penalties an FHA backed loan is often a lower rate than what is available from a conventional lender.

Why sell to an FHA borrower?

The simple answer is that it greatly expands your buyer pool.  You do not seek out an FHA buyer but by being accepting of people using an FHA loan you will be exposed to far more buyers than if you do not want to deal with those loans.

Now there are drawbacks to dealing with an FHA buyer.  First off since it is a government sponsored program there is a lot of extra paperwork and red tape and it typically takes longer for an FHA loan to close than a conventional one, it is a minor miracle if one ever closes in less than 45 days and don’t hold your breath for it to come in much less than 60.  There is also one particular situation that can really drag it out.  As mentioned above a condo complex must be FHA approved for a loan to be made on units in the complex.  The qualifications for that are not anything amazing, and honestly it would be almost impossible to get a conventional loan on a unit in a complex that doesn’t meet the FHA standards.  However for a conventional loan they just look at that data and say if they will do the loan or not while there is the formal FHA approval.  If the complex isn’t already approved it can be during the underwriting process.  A good loan officer with experience can sometimes turn these over in less than a month (Still expect that will basically add on to the time to do the loan) but we have personally had a sale hung up for over 6 months because of delays in getting this FHA approval.

In addition to being slow there can be additional costs associated with them.  On occasion they will require a 2nd appraisal and the seller has to pay for this.  This issue will come up much more often for an investor selling a property.  Also while it is common for buyers to ask for closing cost concessions from sellers it is almost a given for FHA.  If you have someone that can just barely get the minimum down payment if you don’t agree to pay their closing costs they likely just can’t buy the place for lack of funds, so it is less likely to be a negotiation point as it might be a necessity to have the purchase move forward.  Also one of the additional forms you have to fill out is an addendum that basically says that the buyer can back out of the deal and you cannot keep the deposit even if they have gotten to the point of waiving all the contingencies.

Finally the biggest issue is the mandated repairs required by the underwriters to meet the FHA property condition standards.  These size and scope of the repairs can be all over the place but if they are cited by the appraiser or requested by the underwriter they need to be done or the loan will not close.   The impetus falls on the seller to make these repairs or their sale will fall though.  If you are low on funds and had intended to sell you house “As Is” this can be a big issue if the work is of any size.

What Repairs does FHA Require?

We went over a lot of this in our video last weekend on “Does My House Qualify For FHA Financing?” but here is a recap and slightly expanded list of things that you should expect will always be required to be fixed prior to closing an FHA loan.

1)      Some major repairs that FHA will almost always require fixing

  1. Non functioning HVAC
  2. Leaking Roof
  3. Peeling Paint in Pre 1978 Houses (Lead issue)
  4. Non-Functional kitchen (Usually missing/damaged Stove)
  5. Bad Drainage (Water in basement, standing water around foundation, bad grading of yard, inadequate drainage from gutters…)
  6. In MA you will need a passing Title V report – See our recent video on “Can I Sell a House with a Failed Septic System
  7. Active pest infestations
  8. Bedrooms with insufficient egress
  9. Evident structural problems
  10. Dilapidated out-buildings (Think the rotted out shed that is about to fall over)
  11. Empty swimming pools

 

Now most of these things are not crazy requests and many will be issues with conventional financed buyers as well.  However many of these would not be issues or at least not to the extent that they are for FHA backed loans.

Some things such as the HVAC needs to be on during the appraisal and needs to function at that time and appear to not be past the end of its useful life.  If it works you are probably okay, but if has issues and looks something like this:

 Bad HVAC - FHA Financing Issues

Then you are going to have issues with FHA or conventional.

In contrast to that peeling paint is unlikely to ever come up as an issue for funding a conventional loan but will be a big issue for FHA.  Take a look at this ceiling:

Peeling Paint - FHA Financing Issues

This is actually the ceiling in the hallway right outside the bathroom in my own home.  We buy, sell and lease properties for a living and usually do extensive renovations on places often to the tune of $40K or more, yet my own home would not qualify for FHA financing without doing some of these minor repairs.

What other Repairs Might FHA Require?

Again this was discussed in the video last weekend.  There are many items that MAY be cited and need to be repaired, but are not always an issue.  Any of these items could be cited on the report and if they are they will need to be taken care of as well.

2)      Some minor repairs that might get cited

  1. Missing/damaged handrails
  2. Cracked glass in a window (Not a broken or boarded up window)
  3. Damaged or soiled floors (Not to extensive and not a safety/trip hazard)
  4. Damaged walls, like small random holes
  5. Ripped screens
  6. Peeling paint in post 1978 built houses
  7. Minor plumbing issues (Think leaky faucets, busted pipes will be an issue)
  8. Evidence of previous (non active) pest infestation
  9. Rotted/damaged counters and cabinets
  10. ANYTHING else they decide to put on there…

 

These are all items that could be cited but often do not come up as issues.  However it is often a matter of degree.  For example even though they do not often cite damage and extensive wear and tear in a kitchen if yours looks something like this:

Crappy Old Kitchen

You might have an issue.  This one could be borderline for being cited as an issue for a conventional loan as well.

Bullet point #10 above is the biggest issue with FHA repairs.  It is that you just do not know what other things they might say are an issue and will need to be fixed.  You can try to talk with them and try to get them to change the requirements but if they are not open minded they do not have to listen to you and there is no particular recourse for you.  The choice generally will come down to do all the repairs listed or lose the sale.

Conclusion:

If you feel the best way to sell your property is to a retail buyer then you should be willing to work with FHA buyers.  This group is a very sizable portion of buyers and if your goal is to maximize your sale price having the largest pool of potential buyers possible will be needed for that.

If you want to sell the place fast and with as few hassles as possible that is not going to be the experience with an FHA buyer.  While selling to any retail buyer that needs financing can be slow and lots of issues come up someone getting a conventional loan will likely close a bit faster and with far less issues. 

Another important point to consider is that when selling to an FHA buyer the repairs will be required and you must do them or the sale will fall through.  When selling to a conventional buyer they can request repairs but you do not have to do them, it is part of the negotiations.  If you want to sell your house “As Is” that is unlikely to happen with an FHA buyer and can be an issue for many conventional buyers as well, but it is possible.  Of course when selling to an investor that is the normal way.

In summary working with FHA borrowers is necessary to maximize exposure of your property but that exposure comes with a price.

 

 

Do you want the opposite of the FHA experience?  Do you need to sell your Massachusetts or New Hampshire house fast?  If you would like to sell your home fast and hassle free schedule a consultation with us today.

Please share your questions and comments below.

 

 

Q & A Saturday – Does My House Qualify For FHA Financing?

Welcome to our Q & A Saturday video.

In these Q & A Videos we will answer your questions about real estate.  Any real estate related topic from questions about selling your house, buying a house, real estate investor questions, land lording questions, local market questions and many others things are all fair game. 

Today’s question is “Does My House Qualify For FHA Financing?”

FHA HUD Logo - Massachusetts Real Estate

In this video Shaun discusses some of the many requirements for the condition of a property getting an FHA loan.

 

Some of the main points covered in this video are:

1)      What are some major repairs that FHA will almost always require fixing?

  1. None functioning HVAC
  2. Leaking Roof
  3. Peeling Paint in Pre 1978 Houses (Lead issue)
  4. Non-Functional kitchen (Usually missing/damaged Stove)
  5. Bad Drainage (Water in basement, standing water around foundation, bad grading of yard, inadequate drainage from gutters…)

2)      Other repairs that might not get cited, but have and will sometimes

  1. Missing/damaged handrails
  2. Cracked glass in a window (Not a broken or boarded up window)
  3. Damaged or soiled floors (Not to extensive and not a safety/trip hazard)
  4. Damaged walls, like small random holes
  5. Ripped screens
  6. Peeling paint in post 1978 built houses
  7. Minor plumbing issues (Think leaky faucets, busted pipes will be an issue)

3)      Other repairs can always be cited by the appraiser and there is not much you can do about it

 

FHA loans can be a great product for many homebuyers.  That can be especially true in pricey markets like we have in Eastern Massachusetts.  Low down payments, lower interest rates and lower credit qualifications make homes more assessable to people than they would be otherwise.  However it is a government program and that means that it is going to have a lot of Red Tape.  There are many hurdles that need to be overcome to qualify yourself as well that we didn’t get into here.  Qualifying the property is often the EASY part!  If you are buying with an FHA loan or selling to someone getting one expect there to be a lot of things that come up and don’t expect it to close in much under 60 days in most cases.

 

Hope you enjoyed the video and leave any other questions you have about the topic below or any other topics you would like to see covered in future videos.  I encourage anyone that has things they would like to talk about to let me know what they are.  You can always fill out a contact us form here and put Q & A in the subject, just leave a comment with your questions below here, send an email to info@masshomesale.com, or post it on our Facebook page or Twitter account.

 

Resources mentioned in the video and some other useful resources and good articles:

–          FHA Loan overview

–          FHA Homepage on the HUD.gov website

–          Good article on FHA Seller Repairs

–          Out recent video on “Can I Sell a House with a Failed Septic System

 

 

 

(Image Credit: FHA-HUD Logo)

 

Q & A Saturday – How Many Mortgages Can I Get?

Welcome to our Q & A Saturday video.

In these Q & A Videos we will answer your questions about real estate.  Any real estate related topic from questions about selling your house, buying a house, real estate investor questions, land lording questions, local market questions and many others things are all fair game. 

Today’s question is “How Many Mortgages Can I Get?

In this video Shaun how many mortgages an investor is allowed to get from large institutional lenders aka banks.

 

Some of the main points covered in this video are:

1)      What is a Residential Mortgage?

2)      Who are Fannie Mae and Freddie Mac and why we care about how many mortgages they think we should have

3)      The loan limits set for each organization (Mea Culpa on misspeaking to this below)

4)      Alternative loan products if a residential mortgage is no longer an option

5)      The extra costs that can be associated with these products

 

 

This should give you an understanding of how many residential mortgages any individual is allowed to have and some of the alternatives if that number gets maxed out.  A few additional points is that I DID misspeak in the Video and Fannie Mae allows for up to 10 mortgages and Freddie Mac is 4, however after recording this I discovered they will some be changing that to 6 (See links below).  This goes to show that I should continue with my normal practice of getting my links to other recourses before recording the video.  :) 

 

Hope you enjoyed the video and leave any other questions you have about the topic below or any other topics you would like to see covered in future videos.  I encourage anyone that has things they would like to talk about to let me know what they are.  You can always fill out a contact us form here and put Q & A in the subject, just leave a comment with your questions below here, send an email to info@masshomesale.com, or post it on our Facebook page or Twitter account.

 

Resources mentioned in the video and some other useful resources and good articles:

–          Fannie Mae’s Maximum Loan Guidelines

–          Freddie Mac’s Maximum Loan Guidelines

–          Good article explaining how to find a Portfolio Lender (Alternate Loan Option)

–          General definition of a Commercial Real Estate Loan (Alternate Loan Option)

–          Out recent video on “What is a Hard Money Loan” (Alternate Loan Option)

 

 

 

 

(Image Credit: Fannie-Freddie via UrRepublic.com)