Author Archives: Matthew

Buying a Home in Atlanta

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Atlanta, Georgia is an incredibly desirable place to live, with a nearby airport, a means of ground transportation as well as tropical climate and a deep, cultural history. The availability of build-able land in Atlanta enables home buyers to find virtually any kind and price of housing they desire.

When searching for a home in Atlanta, there are a few things to keep in mind. Knowing how much you can afford and the type of home you want should always be at the top of your list. Once you’ve found a home that suits your needs, you need to make an offer. Sometimes this process can go on if the buyer and seller can’t agree on a price, but be patient and try to work things out. Your next objective should be to get an inspection done on the home to ensure that you won’t be stuck with a home that needs major repairs. After the signing process you will finally be able to enjoy your new home!

What is a HUD Home

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What is a HUD (Housing and Urban Development) Home?

An HUD home is a residential property recovered by the U.S. Department of Housing and Urban Development as a result of a foreclosure on an FHA-insured mortgage loan. HUD then offers the property for sale to recover some of the loses on the foreclosure claim.

Who is eligible for a HUD home?

Anyone is eligible for a HUD home as long as you have cash or can qualify for a loan. HUD homes are initially offered to people who are buying the home as their primary residence, often referred to as owner-occupant purchasers. Following the priority period for these homebuyers, unsold properties are available to all buyers, including investors. Any mortgage broker registered with HUD may submit an offer and contract to purchase on your behalf.

How do you buy a HUD?

HUD foreclosures are sold using a bidding process, meaning there’s an offer period, during which sealed bids are accepted from your agent. At the end of that period, all offers are then opened. HUD will usually accept the highest bid, or the bid that brings them the highest net. HUD then pays the real estate broker’s commission, if included in the contract. HUD does not, however, finance homes. You’ll need to finance through a financing institution, but be sure your financing is in order before you make an offer. If your bid is accepted, and you do not close on the house, you may lose the money deposit you submitted with the offer. If you have any further questions regarding buying an HUD home or would like to speak to a loan officer.

Mortgage Application Checklist

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Applying for a mortgage means more than filling out an application. No matter where you apply for a mortgage loan, you will need to assemble most of the following documentation to support your application.

1.Applications Forms:

  • Uniform Residential Loan Application (Form 1003), fully completed and signed by all borrowers
  • Borrower’s Certification & Authorization
  • Application or Appraisal / Credit Report Fees

2.Information About Your Property:

  • Copy of the fully signed Sales Contract or Binder of Sale (Purchase Only)
  • Copy of the Deed to the Property (Refinance Only)
  • Copy of Homeowner’s Insurance policy, front page (Refinance Only)

 

3.Verification of Employment And Income:

  • Consecutive and original pay stubs covering the past 30 days, typed or computer generated with year-to-date earnings for each borrower
  • Copies of W-2 Forms for the past two (2) years for each borrower
  • If commission, seasonal earnings, bonus or overtime income exceed 25% of gross income, include previous two years’ personal tax returns with all schedules (signed and dated by applicants)
  • If income from sources other than employment is to be considered (rental income, dividend/interest income, alimony/child support. social security), proof of the source and amount of that income will be required
  • If self-employed (25% ownership or more) or a general partner:
  • Previous two years personal tax returns with all schedules (signed and dated);
  • Previous two years corporate/partnership tax returns with all schedules (signed and dated);
  • A Year-To-Date Profit and Loss Financial Statement (signed and dated)

 

4.Verification of Assets and Liabilities:

  • Copies of all pages of recent bank, broker and IRA statements for the past three (3) months, which reflect sufficient liquid assets to cover your down payment, closing costs, and assets remaining after closing. (Note: On passbook accounts, please provide a copy of the cover, title pages and all transaction pages.)
  • Signed statement of explanation for large deposits in checking or savings accounts
  • Gift Letter, along with evidence of donor’s ability to give or verification of your receipt of the gift (a copy of the most recent bank statement showing the source of the gift)
  • Copy of the executed contract of sale for real estate currently owned but under contract
  • Evidence of mortgage, property tax and insurance payment amounts on each property
  • Signed copies of all current leases on each property
  • Signed copies of your personal federal tax returns (Form 1040) for the past two (2) years, with all schedules attached, if you owned and rented out other real estate during those two years

 

5.Verification of Mortgage And/Or Rent Payments:

  • Mortgage payments: 12 months’ mortgage payment history may be required if this information cannot be obtained from a credit report
  • Rent payments: copies of last 12 months of cancelled checks (front and back) or letter from landlord stating 12 months’ payment history (include landlord name, address and telephone number)

 

6.Other Documents Will Be Required

The property is a condominium or a cooperative

You are relocating to or from another state.

What To Do If You Are In Debt

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There’s one common theme that seems to be running through the veins of households and that is that as many as 60% are drowning in debt.  So what can you do if you are in debt?

The reason so many people are in financial trouble is really quite simple.  Our modern day world encourages us to spend and with credit so easily available we have become spending addicts.  Now we can buy now pay later and never miss a step.

Before you decide to make the major decision of going into bankruptcy which will ruin you financially and cause you to loose everything there are some things you can do.

Give debt consolidation a try.  There are all kinds of free services that are ready to help.  How debt consolidation works is all of your debts are consolidated together and paid off leaving you with a loan that has a reasonable interest rate and is anywhere from 10 to 20 years long.  It’s a good way to get out of your current situation and have a manageable payment.

One way to save a lot is by eliminating those extras.  Make a list of how many times you go to the coffee shop in a week, how many movies you rent, or any other money spending habits you have.  Total it up and you’ll be amazed at how much you might save.  Don’t cut yourself off totally but do reduce this expense by as much as 85%.  You can save a real bundle this way.

Start collecting that loose change.  Pocket change can add up quickly.  Take it and toss it into a container marked for savings. Every three months add it up.  You’ll be pleasantly surprised.

You also need to stop using your card because when you do this you will reduce your spending.  You also need to list what you are planning to buy including your groceries and then go over the list cutting what you don’t really need.  Anything you can live without should be cut off the list.  When you are shopping buy nothing except what you have put on your list.

Get rid of all those extra credit cards.  How often do we find that we have a wallet full of credit cards?  Get rid of all but two cards and of those two one should be in your wallet and the other [with no balance] should be placed in a zip lock bag, set in a container of water, and placed in the freezer.  This will eliminate any urge to use it but you will still have it for emergencies

In our modern plastic world it is very easy to get into debt and even easier to get in over our head with our buy now pay later mentality.  There are lots of things you can do if you are in debt that will help you slowly work your way out.

Should you ever get a credit card?

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Most people consider credit cards to just be a fact of life. Some of us make it longer than others before we get one, and some of us handle the responsibility better than others but most people have at least one credit card. But having a credit card doesn’t have to be a given.

Not Having a Credit Card

A lack of ability to live within our means is why most of us get credit cards. As more and more people have crippling debt loads, we can see this is not a good way to live! However, if you don’t have a credit card, you’re forced to actually keep track of the money you bring in and the money that goes out, and live accordingly. Not having a credit card takes away the feeling of a safety net we can get from cards, but it’s a false sense of security because sooner or later those bills will need to be paid – with interest! \

There are times when removing that so-called “safety net” can feel stressful. You know that if you’re down to the last dollars in your bank account there really isn’t anything else to fall back on, but in some ways this pressure is a good thing because it forces us to tweak, squeeze and reevaluate our budgets and where we spend our money.

An Emergency Credit Card

It is nice to have the peace of mind knowing that if there is an extreme catastrophe – such as an accident or large medical bills – you will have some way of taking care of it. This is where an emergency credit card may be a good idea but it takes commitment to not declare every little issue an emergency and whip out the credit card! To keep that from happening, don’t keep the card in your wallet. Or perhaps even cut up the card and ask for a few checks from the company that can be used in an emergency. Any barriers you can place in your own way to make the card more difficult to use will be a good thing in the long run!

When and if You Should Get a Credit Card

Another reason in favor of getting a credit card is to, well, build credit! However, this requires that you manage the card in a responsible way, paying off the bills as required and managing the balance you have otherwise it can work against you! There are other ways to build credit as well, so don’t think that a card is your only option.

If you do opt for a credit card it’s typically wise to wait till you have some sort of steady income, and a smart budget in place, to ensure that you won’t fall back on living on your card instead of living within your means!

The Global Income with Regards to Commercial Mortgage Underwriting

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Global income if considered with regards to commercial mortgage underwriting is the income of the borrower. This process involves the way through which the commercial mortgage underwriters try to get a clear idea on the total NET income of the borrower. The global income calculations are done based on the total income of the person applying for the commercial mortgage. The calculations are to be done irrespective of it being an online mortgage application or an offline one.

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Calculating the global income

In case of the commercial real estate mortgages, one thing is quite common for a borrower. That is he/she can have different entities which may be showing profit and some others that is going to show loss. It is similarly common a thing which can be seen, this is that most of the borrowers’ personal expenditures actually far exceeds that what they are able to actually make through the different sources of their income in commercial real estate. In case a commercial real estate borrower is going through a tough time and if he/she has low income, it would get tough for that person to get a real estate mortgage.

For example let us consider a case of commercial refinance. IN this case let us take that a commercial refinance is to be done on a commercial mortgage which is owner occupied and has a loan amount adding up to almost $1,000,000. The rate on the proposed real estate loan is 6.5% and the loan term is on a 25 year amortization schedule. Now it is always better to keep an example simple so as to get a better understanding of the whole fact. So, we are considering that the borrower has one business and also has personal income & other expenditures; no other items are to be taken into account. On analyzed view after paying on the business tax returns, non cash expenses like depreciation, the interest, and amortization and so on, you may be able to see that there is $150,000 as net income to service the proposed mortgage.

Again on personal front, the borrower is supposed to pay himself $100,000 per year from the business; the W-2 income. Let us consider that the monthly bill of the borrower is $4,500. In majority cases the banks double the personal expenses which show up on personal credit report so as to cover all kinds of personal expenses which do not actually show up. Thus it is $4,500 x 2 x 12 months which again equals to $108,000. So, according to an under; as per underwriting guidelines the person is $8,000 short of personal income. This amount then gets subtracted from the $150,000 net income from business. Thus, global net income of this person is only $142,000.

How Do Construction Loans Work?

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What are Construction Loans?

A Construction to Permanent Loan is a “One Time Closing Loan” available to Borrowers who have an agreement with an “approved” General contractor/builder to build their single family detached personal residence. Borrowers will have one closing and will sign one set of loan documents for both the construction and permanent phase of the home. Lenders provide the borrower with the loan amount to construct their new home with financing up to 95% of the value of the home.

The Borrower has the choice of using the “Prime Plus” or the “Fixed Rate” options in the construction phase. With either option, the permanent rate can be locked in up front and guaranteed with today’s rate. When using the “Prime Plus” option, the Borrower does not have to lock and may choose to “float” or use the “Range Protector” program. When using the “Fixed Rate” option, the Borrower must agree to lock his interest rate for the entire construction period.

The following loan programs are available for Construction to Permanent mortgages:

  • 30 year Conventional
  • 15 year Conventional
  • 7 year Balloon
  • 5 year Balloon
  • 30 year Jumbo
  • 15 year Jumbo

Term

Generally, the construction phase varies from 6 to 9 to 12 months while the permanent loan is amortized over a 30 or 15 year term.

Eligibility

The following homes are eligible for a Construction to Permanent Loan:

  • Single family one-unit detached residences.
  • Detached dwellings in Planned Unit Developments (PUDs).
  • Manufactured homes permanently affixed to the property.

How a Mortgage Pre-approval Helps You House Hunt

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Mortgage and Home Loan Pre-Approval BasicsIt is easy to get swept up in the excitement of shopping for a new home, especially when it is your first. It is fun to tour open houses and get a feel for what is on the market that might feel like home. That being said, beginning to house hunt before you have gotten pre-approved with a mortgage lender may lead to disappointment. You may think you know what you can afford, but your lender may have a very different idea. You don’t want to discover that after you have put in an offer on your “dream” home that you don’t qualify for the size of loan you need or that there are other complications related to your credit or other credit worthiness factors.

Mortgage Pre-Approval Before You Shop

When you get pre-approved for a mortgage through a mortgage website or lender, the lender does a complete financial review and provides you with the maximum price you can spend on your home. When you have this number in mind while house hunting,there are the following benefits:

  • You can begin your house hunt with reasonable expectations based on what you can truly afford
  • When submitting an offer on a home, exactly how much you can bid during the negotiations
  • You receive a mixed interest rate for a short period of time. If interest rates go up between the time of your pre-approval and home purchase, you pay the lower rate

There are buyers that believe a pre-approval is only beneficial to make them more credible when making an offer. If the above teaches you anything it should be that getting pre-approved makes you more informed and reduces the stress of your house hunt. You have enough to focus you energy on, the last thing you need to worry about is getting your financing confirmed right before you make an offer on your home. Getting pre-approved is the first step you should take before house hunting.

Allegheny County Property Tax Assessment Guide

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The most recent downturn in the US real estate market, has resulted in a severe reduction in the value of real estate nationwide. Real estate taxes are tied to the property valuation and this has created both a dilemma and an opportunity. Since counties across the United States depend on revenues from real estate taxes to run county government, reductions in values create a serious dilemma for those governments. At a time when they need more money for social services, they have less revenue.

The flip side of that dilemma is the opportunity it presents for a homeowner to reduce their property taxes by appealing their previous assessments and reducing their home value.

The process of reducing one’s Allegheny County assessment is a relatively simple process. The homeowner can file an appeal through the Office of Property Assessments. Once the appeal is filed, the Board of Property Assessment Appeals and Review and the Board of Viewers hears the appeal and makes the decision to change the assessed value.

The process for filing appeals includes two (2) different types of appeal. Each has its own forms.

1. Annual Assessment Appeal Form – This is to be used if you believe the assessed value of the property to be inaccurate. It can be obtained in person at the County Office Building or online at the property appeals forms web page. Check for the filing deadline. Once you file your appeal, you will receive notification, by mail, of the date, time and place of the hearing. This is approximately 14 days prior to the hearing for all residential properties and approximately 30 days’ prior for all commercial properties.

2. Special Appeal Form – This is to be used if you received a notice of assessment change from the Office of Property Assessments. If you wish to contest the Allegheny County Assessment, this form must filed within thirty (30) days from the official mail date of the notice. You will also receive notice of a hearing on a special appeal. However, the board has 6 months to hear that appeal.

With respect to your hearing, you must bring evidence top support your claim that the property tax is too high and that you are entitled to a home value reduction. Your proof must relate back to the County’s base year which was 2002.

At your hearing, you will need to provide data on the value of your property. Luckily, the internet makes it possible for you to research similar homes in your neighborhood and find sales of similar properties that sold recently in your area. You then need to do a similar search for data relating to the current home value. Showing that the home value has fallen should result in your appeal for a reduction in your real property assessment and thus a reduction in your property taxes.

Manage Your Debt by Creating a Budget

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Getting deep into debt isn’t nearly as difficult as getting out of debt.  You can use a budget to effectively reduce your debt.  In fact, at some point in our lives,  we all need to create a sound budget.

The most important thing you can do is to make sure you don’t add anymore to the debt you have.  The biggest problem today is the use of credit cards which has become an addiction when it comes to purchasing unnecessary items. Since it’s just a loan with a high interest rate, we tend to forget to think about the physical nature of it. With your new budget, if you don’t have any cash in your pocket then you simply don’t buy anything.

You need to sit down and make a list of your expenses for the month. That includes your rent or house payment, car payment(s), gas, groceries, credit card payments, cable, utilities, gas, internet, entertainment, and any other expenses you may have.  Be honest with yourself, otherwise this project simply won’t work.

Once you’ve listed everything, total up your monthly expenditures then subtract your net monthly income.  How are you doing?  Are you breaking even, ahead of the game, or in the dreaded red?  Chances are if you are reading this article looking for help you are in the red.

Don’t get too depressed.  Time will improve your situation.  Now it’s time to determine where you can cut expenses.  Can you eat out less?  Avoid your daily Starbucks?  Look for a better telephone plan or cellular plan?

This isn’t as difficult as you might think.  Let’s look at our love for having coffee.  If you just cut this one expense you can save $100 plus a month.  What about those lunches we eat out?  If you pack a lunch you’ll save about $200 a month.  So far we’ve saved $300 and haven’t done anything too painful.

Another easy way to save money is to bargain shop.  Cut out coupons for products you use and watch sale flyers for good deals on products you use then stock up.

You should also request a reduction in interest rate from your credit card companies.  Yes they do look at requests and if you could get a lower rate you can save money.  Another option is to go to your bank for a personal loan and then get rid of the credit card.  The lower interest will help you pay things off faster.

When payday arrives your check needs to go right into the bank.  Carrying cash around will lead to unnecessary spending on those sale items you really don’t need.

Lastly you can work at increasing your income whether you take on another job part time, ask your boss for a raise, or maybe pick up some freelance work.  Just a couple hundred dollars a month extra can help put a dent on that debt.

Using a budget to reduce your debt will make it much easier for you to clear up that debt and feel less stressed overall.