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A Zero Closing Cost Mortgage? Yes, It Is Possible - and Here Is How to Make It Happen
By Peta-Gay
June 1, 2015

For both refinance and purchase loans, a typical borrower may pay between three to six percent of their loan amount in closing costs. The actual amount will vary based on a number of different factors, but the bottom line is that these costs can equate to thousands of dollars for a home loan applicant. Closing costs may include everything from title charges and collections to set up the escrow account to prepaid insurance, appraisal fees, inspection fees and more. Finding a zero closing cost mortgage could help you to save a significant amount of money, and the good news is that you actually could make this a reality for your next mortgage.

Decreasing Closing Costs

There are essentially two different ways that you can achieve a zero closing cost mortgage or otherwise come very close to paying no closing costs. The first option is to take steps to decrease your closing costs. First, you can negotiate with your seller to pay a portion of your closing costs, and some sellers may agree to pay one or two percent, if not more.

You may also work with your lender to receive a slightly higher interest rate in exchange for a rebate at closing. Some loan programs may also waive appraisal fees. When you include a combination of each of these options for your next transaction, you may have most or all of your loan fees paid for.

Finding a Zero Cost Loan Program

Another idea is to apply for a true zero closing cost loan program. These are unique loan programs where the lender may allow you to roll the closing costs into the loan amount. This is typically only available with refinance loans rather than with purchase loans. You essentially will use equity from your refinance to pay for your closing costs so that you do not have to come to the closing table with funds.

There are also zero cost loan programs for purchases, and these typically have the compensating factor of giving you a higher interest rate. This may result in a higher mortgage payment, but the benefit is that you will not have to pay any costs at closing. If you are strapped for cash or do not want to pour your assets into paying for closing costs, this is a great option.

As you can see, you do have a few options for decreasing or eliminating your closing costs altogether. You may consider shopping around to compare the different options. Keep in mind that different lenders as well as different title companies may charge different fees. It may be wise to work with a mortgage representative to more easily compare the options, and you can set up an appointment to speak with a professional today. Speak with your trusted real estate agent for a referral.

About the Blogger - Peta-Gay Lewis, MRP is Owner and CEO of Property Locators, LLC™. She is a licensed REALTOR in DC, MD, and VA with Douglas Realty, LLC (8096 Edwin Raynor Blvd Suite C Pasadena, MD 21122). Her contact information is 202 683-0158 (c), 410 255-3690 (o) or agent@propertylocatorsllc.com

An Insider Guide to the HomePath Program and Closing Cost Assistance from Fannie Mae
By Peta-Gay
June 2, 2015

Home buyers today may be concerned about finding the perfect home to purchase, but they are also often concerned with the process of applying for a mortgage. The loan application process itself may seem daunting, but many are concerned about finding a great deal on their mortgage. This may include getting a great interest rate and finding a program with low closing costs. The Fannie Mae HomePath program and closing cost assistance program is a beneficial option for many, and you may benefit from learning more about it.

What Is This Program?

The Fannie Mae loan program has been around for many years, and it is designed to provide borrowers with a lower interest rate than some of the other programs available. It also has easier underwriting guidelines than some of the other options. However, the HomePath program started in 2009 in response to the rising number of foreclosures at that time. This program gives buyers a great opportunity to find homes that were financed through Fannie Mae and that were foreclosed on. The goal was to help Fannie Mae sell some of the homes they had foreclosed on more quickly by providing buyers with easier underwriting requirements and closing cost assistance than they otherwise would have access to.

What to Expect From This Program

If you are not familiar with this program, you may consider exploring it in more detail. The program's website has many listings for foreclosed properties, and this makes it easy for you to find a great deal on a property in your area.

You should be aware that there are essentially two programs under the HomePath umbrella. One is designed to resemble a traditional mortgage program with closing cost assistance and easier underwriting requirements. The other is designed for properties in need of renovations, and with this program, you may be able to borrower more than the current value or sales price of the house.

While you may want to find the perfect home and get it at a great price, you also want to set up affordable financing. When a traditional buying and mortgage experience is not right for you, the HomePath program offered by Fannie Mae is a great option to consider. You can spend time exploring the foreclosed properties on the website today, and you can also work with a mortgage broker to learn more about the HomePath financing options that are available to you, ask your trusted real estate agent for a referral.

About the Blogger - Peta-Gay Lewis, MRP is Owner and CEO of Property Locators, LLC™. She is a licensed REALTOR in DC, MD, and VA with Douglas Realty, LLC (8096 Edwin Raynor Blvd Suite C Pasadena, MD 21122). Her contact information is 202 683-0158 (c), 410 255-3690 (o) or agent@propertylocatorsllc.com

Thinking About Buying a Rental Property? 3 Reasons You Will Want to Get a Mortgage Pre-Approval
By Peta-Gay
June 8, 2015

A rental property is a wonderful investment option to consider, and it can provide you with everything from considerable tax benefits to appreciation and monthly cash flow. While you may be eager to get started searching for a new rental property to invest in, a good idea is to take the initial step to get pre-approved for your mortgage. There are several good reasons why a pre-approval is an important first step to take.

Determining What Sales Price to Consider

The mortgage rules and guidelines for an investment or non-owner occupied property are different than those for an owner occupied property. For example, a key difference is that most lenders will require you to make a larger down payment. When you get pre-approved for your mortgage, you can more easily narrow down your property choices so that you only consider those that are affordable for your budget.

Estimating Cash Flow

When you invest in a rental property, you will need to estimate the cash flow for the property to ensure that it is a good investment. This may include reviewing the monthly rents and operating expenses, and it also includes analyzing the mortgage payment. When you get pre-approved for your mortgage, you can estimate your monthly payment and determine which properties are a better investment opportunity for you and which will generate the largest profit for you.

Structuring A Stronger Offer

By getting pre-approved, your mortgage professional will provide you with a pre-approval letter. This letter can be given to a seller when you structure your offer, and essentially this will strengthen your offer and make you look like a more serious and qualified buyer. When you are in a bidding war, this letter can make a big difference in your success. Furthermore, it can streamline your mortgage process once your offer is accepted by the buyer, and it will enable you to create a more realistic closing date on your offer.

While you may be ready to jump head first into your property search, you may benefit from taking time to get pre-approved for your mortgage. This process takes very little time to do, and it will facilitate the entire process. From searching for a great property and analyzing its strength as an investment opportunity to helping you pass through the loan process, you will benefit in a number of ways.

About the Blogger - Peta-Gay Lewis, MRP is Owner and CEO of Property Locators, LLC™. She is a licensed REALTOR in DC, MD, and VA with Douglas Realty, LLC (8096 Edwin Raynor Blvd Suite C Pasadena, MD 21122). Her contact information is 202 683-0158 (c), 410 255-3690 (o) or agent@propertylocatorsllc.com

Buying a Classic Older Home? Three Upgrades You Will Need to Make Immediately
By Peta-Gay
June 3, 2015

While some home buyers only want to live in a brand new home and will custom build a home to their specifications, others are drawn to the historic character and charm of a classic home. Older homes may have incredible architectural detail and special features that you simply do not want to change. However, there are some essential features that should be upgraded as soon as possible after you take ownership of your classic home.

The Electrical Panel

Many older homes were built at a time when electricity use was at a minimum, but the reliance on electricity has increased over the years. Older homes may commonly have an electrical panel with 50 amps or less, but your current needs may require you to have a panel with at least 200 amps. It may be good to have an electrician inspect the electrical panel as well as the wiring in the home to determine if an upgrade is needed in your new home.

Re-Plumbing the Pipes

A quick plumbing inspection will tell you if the home has copper, steel or other materials used with piping. The best material is copper because it is resistant to leaking, corrosion and rusting. Steel pipes generally should be replaced with copper as soon as possible. Other materials, such as cast iron, may be acceptable to keep in place. However, sections may need to be replaced if the pipes are more than 50 years old.

Firestops in the Structure

The good news about the structure of older homes is that older homes generally are better built than newer homes. However, most lack the critical feature of a firestop. A firestop essentially can minimize how fire travels through a home. Adding firestops to an older home can improve safety for the home's occupants in the event of a fire and can minimize fire damage.

It is understandable that you may want to retain the historic character and charm of your older home. These may have been the features that you fell in love with when you bought it. However, you also want to ensure that the home has modern features that will make it comfortable and safe for you and your family to live in. These are all important improvements that you will want to make now that ultimately could improve your experience throughout the entire time you live in your home.

About the Blogger - Peta-Gay Lewis, MRP is Owner and CEO of Property Locators, LLC™. She is a licensed REALTOR in DC, MD, and VA with Douglas Realty, LLC (8096 Edwin Raynor Blvd Suite C Pasadena, MD 21122). Her contact information is 202 683-0158 (c), 410 255-3690 (o) or agent@propertylocatorsllc.com

Buying a Home? What to Do if Problems Are Found During the Final Home Inspection
By Peta-Gay
June 4, 2015

As a home buyer, you may go through a number of different steps to ensure that the property that you purchase is in great condition. For example, you may complete an initial walk-through or even several home tours before you make an offer. You may also order a property inspection and even negotiate for the seller to make some repairs on your behalf. A day or two before your closing date, you may set up a final home inspection to ensure that the home is still in the same condition as the initial walk-through. In most cases, there will be no problems with the final inspection. However, in the event that there is a problem with the final inspection, you will need to know how to handle it.

Work With Your Real Estate Agent

As a first step, you should discuss the issues with your real estate agent. Your real estate agent may have some strategies or ideas that can be used to help you overcome the issue in the best possible way. Minor issues may be resolved with a last minute negotiation to the sales contract. More significant issues may need to be rectified prior to closing, and you may need to delay the closing by a few days or longer until any issues are resolved.

Consider Walking Away

It may be rare for a property to have issues during the final home inspection, and most issues that do arise at this late stage in the buying process may be resolved through negotiations between the buyer and seller. However, in the event that the seller plays hard ball and refuses to work with you to resolve the matter or in the event that the issue is so significant that you are not comfortable with it, it may be an option to walk away from the property.

In most sales contracts, wording is present that requires the property to be delivered to the buyer in the same condition as it was when the contract was signed less general wear and tear. Walking away may not be ideal, but it may be the best option in some cases.

Making a final home inspection is not a requirement, but it is advisable. It can ensure that the home your purchase is in the same condition as it was when you did the initial walk-through, and you can apply these tips if you discover that the home is not in the same condition.

About the Blogger - Peta-Gay Lewis, MRP is Owner and CEO of Property Locators, LLC™. She is a licensed REALTOR in DC, MD, and VA with Douglas Realty, LLC (8096 Edwin Raynor Blvd Suite C Pasadena, MD 21122). Her contact information is 202 683-0158 (c), 410 255-3690 (o) or agent@propertylocatorsllc.com