Real Estate Information Archive

The home loan process can seem intimidating, especially for a first-time homebuyer. It is not a simple process, but it doesn't have to be too complicated. There are many resources available to help you prepare for your home buying journey, and your mortgage lender can answer the questions you have throughout the process.

Here are some of the key steps to the home loan process, as well as some tips to help you understand what you can expect:

1. Preparation and self-assessment

Before you dive head-first into buying a home, make sure that you know how much you can afford.  The first step is to calculate your "debt-to-income ratio." You can do this by adding up your current monthly bills then subtracting your total current income. This will help you determine whether you can afford a mortgage payment, and if so, what amount might fit into your budget. Using an online mortgage calculator is a good way to help you determine what the estimated cost of your monthly mortgage payment will be. Doing these calculations first will help you assess your resources and determine your budget to purchase a home.

2. The loan application

Download a blank loan application ahead of time so you can look it over and familiarize yourself with it. This will give you an idea of the information you need when completing and submitting the application. The necessary documents may include: proof of income, proof of employment for the past two years, proof of identity, proof of residency and your social security card.

3. Origination and Underwriting

Origination - The loan officer will review your financing options, work with you to complete the credit application and create the loan account.

Underwriting - An underwriter will review the application and determine the level of credit risk you represent based on your credit score, income, existing debt and down payment. You may be asked to provide additional information about your finances during this step.

4. Satisfying loan conditions and full loan approval

In this step, you will receive a "conditions to approval" list from your lender, which outlines the tasks you must complete before the loan can be closed. For example, the lender may ask for additional documentation to verify income, savings or emergency funds or other proof that you can afford to repay the loan. At this point in the process the lender may offer a conditional loan approval and start the document verification process. If you accept the conditional loan approval offer, once all conditions have been met, the lender will issue a full loan approval.

5. Processing

Once you've selected your dream home, you'll sign a purchase agreement with the seller. The purchase agreement tells the lender how much you have agreed to pay to purchase the home. The lender may then have the home appraised and will provide you with a copy of the appraisal.

6. Closing

In the final step of the process, the lender works with a title company to obtain and review a title report and then finalize your title on the home. The titling company receives a closing package, which contains the documents that need to be signed, recorded and become part of your mortgage loan file. At the closing, you will sign all closing documents and pay any closing costs. The lender then receives all of this signed paperwork to complete the process.

Once this process is complete, you're ready to move into your dream home. The home loan process may take some time, but these steps are well worth the wait. (BPT)

Home inspectors are good at their jobs but they are not above missing some things because they are human.   There are several things that home inspectors have been known to miss during a home inspection so you might want to keep your eyes open and pay close attention during the inspection so that you don’t end up having to pay for expensive repairs once you move in to your new home.   A few things that may be missed by your home inspector  are below.

1. Inspectors do not always go over all the bells and whistles of a home and appliances are on the list of things they do not always pay a lot of attention to.  The last thing you want is to move into your new home to find out that you have a leaky dishwasher that needs to be replaced.  If you want to make sure appliances have not been overlooked you may want to check them yourself. 
    
2. Leaky faucets are also things that can be overlooked by home inspectors.  Take your time to walk through your soon to be new home and check the faucets for leaks just in case your inspector may have missed something.   It’s a good idea to check outdoor faucets as well.
    
3. Cracked sewage and drainage pipes might also be something that your inspector doesn’t take a look at and may therefore miss.  It may be worth your while to pay a bit of extra money to have an in depth look at your drainage pipes. 
    
4. Sometimes home inspectors will not pay a lot of attention to decks, porches and balconies.  There can be problems in these areas such as safety issues and cracks that may not arise until right before you make the purchase of the home.  Perhaps a second follow up inspection may be a good idea if you feel that one of these areas may be a potential problem. 

Again, home inspectors are human and they are not above missing some potential problems  with your new home.  Realize this fact before you have your home inspection so that you too can keep your eyes open for any potential problems you see in and around your prospective new home.  Once you move in you will be able to rest assured that you have not bought into a money pit. 

Courtesy of New Castle County DE Realtor Tucker Robbins!

Over the years there hasn’t been that much to talk about when it came to housing for Veterans but as the months and years go by things are beginning to look up for those who have protected our country and are still continuing to do so.  With Veteran’s Day being this week, it seems a good time to look at a few ways that veterans housing is improving for the better.   

• Many companies are beginning to get on the band wagon of helping out veterans in our country.  One of those companies is the Arizona Fisher House.  This facility will provide housing for vets and their families who are being treated in medical facilities in Tucson Arizona.  This housing will be temporary while the vets are being treated but it will be provided at no charge to the veterans.   
•  Homes For Heroes  is an awesome program that allows veterans as well as other home town heroes a chance to own a home of their own.  In order to find out more about homes for heroes you can look them up online.  This program offers great discounts to veterans and their families so that their dream of owning their own home can become a reality. 
• Marmion Apartments in Los Angeles is offering housing for 24 veterans and their families as well as 24 low income families.  There are almost 3,000 homeless veterans in Los Angeles alone.  That number is not acceptable and this is one of the reasons why changes are finally being made. 
• In Green Bay Wisconsin Veteran’s Manor will be opening in June for Veterans who need a place in which to live.  This location will offer 50 one bedroom apartments in which to house 50 veterans and their families. 
• If Tennessee is where you call home you may want to check out Patriot Place which is a 34 unit apartment complex for Vets and their families. 

These are just a few ways that things are beginning to look up in the housing market for veterans.  I believe as time goes on we will see programs like this in our local community.  After all veterans have done and how much they and their families have sacrificed their lives for our country’s freedom, this is the least that can be done.  If you see a Veteran today, be sure to offer them your sincere thanks and appreciation for your freedom! 

Courtesy of Wilmington DE Realtor Tucker Robbins.

Short sales can represent interesting investment opportunities but keep in mind they are not a typical transaction. The owners will be getting exactly zero out of selling their home – but they might be preventing a foreclosure damaging their credit even more. The short sale lender will be getting less than the amount of the mortgage out of the sale – sometimes considerably less. You write up an Agreement of Sale, the sellers agree, but now the hurry up and wait game starts as you await the short sale lenders response/approval. Even so, there are things you need to know on the way in:

1. You will have little or no control over the transaction and at times there will be frustratingly little information on what is happening. The short sale lender will only deal with the buyer or the buyer’s short sale negotiator. You, your realtor (we of course recommend The Robbins Team), or your attorney will not be able to get any information from them directly. You will need patience.
    
2. Short Sale Purchases are not automatically a good deal. Sometimes it is amazing how difficult some lenders are at reconciling their valuation with real market value.
    
3. The experience of the short sale negotiator is a factor. When they present a preliminary HUD-1 to the short sale lender it must be substantially similar to the final one. Home Owner Association dues and sewer/water bills, for example must be included. If unexpected expenses to the short sale lender come up shortly before settlement, they can kill the deal. There are several commercial entities in our area that specialize in short sale negotiations, but they normally charge around 3%. This fee is paid by the buyer (usually offset by including 3% settlement help in the contract of sale).
    
4. Potentially there is very little seller motivation – they are not getting anything out of it.
    
5. Short sale lenders can change the terms of the contract, but you, as the buyer, are not obligated to accept the changes – think of it like it’s a counter offer.
    
6. Other offers can come in after yours has been submitted to the lender – creating an auction type situation – depending on which short sale lender is involved. You will have no recourse if the lender accepts another offer – unless you put in the contract wording that “Until this offer has been responded to, the seller will not consider any offers within the short sale approval period”. The problem is the buyer cannot back out until either the short sale lender rejects the offer or the short sale contingency date has passed. Some short sale lenders will strike such clauses.
    
7. Some short sale lenders (Nationstar Mortgage is the only one I am aware of, but there could be more) will actually put your offer in an online auction for 2 – 3 months to see if they can get more money. I would also avoid Ocwen Financial.
    
8. Under the home inspection contingencies “within 10 business days of short sale approval all utilities will be turned on” is a good clause to add for your protection. You want the utilities to be on for you home inspection.
    
9. Be sure you understand that in spite of home inspections, the property is really being sold “As-Is”. Even though the contract might not say that, the home inspection is defacto “As-Is”. The seller will likely not do any work and the short sale lender practically never does. The main purpose of the home inspection is to find out what is wrong with the property and decide if you want to go forward. If you are getting an FHA or VA mortgage be aware they have no escape clause for repairs. There are times that buyers will have to do required repairs at their own expense in order to satisfy FHA or VA mortgage inspections. FHA and VA financing requires they must be done before settlement and they don’t allow escrows. If you are going to do repairs before settlement, be sure you have approval to do such and be aware that if you do not purchase the property, there is basically no recourse to recoup the repair investment.
    
10. If the seller has a USDA mortgage, the USDA does not release the seller from a deficiency amount until after settlement in spite of the seller having a short sale approval from the bank.
     
11. Settlement Statement Approval – the seller’s mortgage company can have different requirements as to how different expenses are shown on the settlement statement than how the buyer’s mortgage company wants the expenses shown. This can cause delays in settlement.
     
12. Many times the seller must be delinquent on their mortgage before the lender will even consider a short sale. This can delay the process even further if you have to wait until the seller is delinquent for several months before starting the short sale process. Some lenders will even require the seller to go through a class before they can start the short sale process.
     
13. Short sale lender approvals for people selling investment properties are much more frequently not approved.
     
14.  When the short sale is approved, the deficiency (the difference between what is owed by the seller and the amount the short sale lender will actually receive) can be an issue. It can go to the seller in 3 ways:
    1. Excused (Obviously seller preferred – though it can have tax consequences, where the IRS treats the deficiency as income, but congress passed laws that prevent that – but they haven’t been extended yet to cover 2015).
    2. A note (where the seller will make periodic payments to the short sale lender after settlement to cover some percentage of the deficiency).
    3. Left as an open issue (The short sale is approved but the short sale lender don’t say what happens to the deficiency – a somewhat scary situation for the seller)
        
15. If it is a HAFA mortgage company, the process provides any 2^nd mortgage holder must also approve the Short Sale.
     
16. The settlement might never happen. The seller could abandon the deal. The buyer might find another property or run out of patience. The short sale might not be approved. A vacant property (especially one without power) could be damaged or vandalized.

By Tucker Robbins, Berkshire Hathaway HomeServices
(302) 777-7744 | Tucker@RobbinsRealEstate.com

You have just found out that you have been approved to buy a new home.  I am sure you are super excited as this is one of the most exciting times in your life.  I would suggest that you slow down your excitement just for a moment to consider the following warnings before you begin your search.  Once you have taking time to breathe in and out for a moment and have taken into consideration all that may come your way, get ready to have a great time searching for your dream home! Below are a few warnings for potential home buyers and tips on how to handle these warnings. 

• Buying a fixer upper may be more expensive than you can afford.  If you do decide to go the route of a short sale or  foreclosure  be sure that you not only have the funds needed to do so, but that you have a lot of patience as well.   If you are someone who has patience and you are willing to wait a while, you may find that buying a home that is being sold as a short sale or a foreclosure to be the way to go if you want more for your money. 
   
• Don’t ignore issues that a home inspector finds.  If the home inspector finds issues with the house that are going to cost you a lot of money out of pocket to fix, you may want to consider negotiating with the seller for covering the cost of these issues.
   
• If you see issues while touring a home, always point it out to your Realtor and ask them about it.  If your Realtor is a good and respectful Realtor, he or she will take the issue seriously and will talk with you about the next steps you should take if you are interested in making an offer on that particular house. 
   
• If the home you are considering has had additions in the past, make sure to have these additions checked out to make sure they are up to code.  You can check with the county that the home is in to look over the work permits to make sure things were done correctly and to ease your mind. 

Once you get all of your questions and concerns addressed, you will then likely feel more comfortable moving forward with making an offer on the home of your dreams.

If you are in the market for a new house, don't be scared to attend open houses.  As long as you go armed with the knowledge of what might be asked of you at an open house you should be ready to answer without worry or hesitation. Keep in mind that Realtors who hold open houses are not like used car salesmen, they are there to help you find the home of your dreams. Be polite and remember your open house etiquette when touring an open house. 

• You may be asked at an open house how long you have been looking for a home.  This question is only asked to find out just how serious you are about purchasing a home and in what time frame you are planning to do so.  For example if you have already been looking for a few months then you are most likely more than ready to hone in on exactly what type of house you are looking for.  Be very specific with your answer to this question.
   
• Another question you may be asked at an open house is if you already have an agent you are working with.  This question is asked because the Realtor wants to know if they can represent you in your search for a new home.  You may be asked who your agent is if you already have one.  Don't hesitate to give out names because all the Realtor wants to do is call your agent for feedback instead of bothering you with such things.  By answering this question you are keeping yourself from having to give out any of your own personal information.  This way you have a buffer between you and the Realtor who is holding the open house.
   
• You may be asked if you are looking to buy in the specific neighborhood in which the open house is being held.  The Realtor is not trying to get all into your business by asking this question, he or she is just trying to find out if you really are serious about making a home purchase and what area you are interested in.  Just be honest with your answer, there is no right or wrong answer here. 

The main thing I would suggest to you when attending an open house is that you go in with an open mind.  Be willing to open up and answer any questions you might be asked with a clear honest answer.   You never know you may just be walking right in to your new dream home!

Military families are going to like what the Obama Administration has been up to lately.  A new agreement was made last year to lower the mortgage payments of those who fight for our country.  The agreement was made with five of the nation's largest mortgage lenders; Wells Fargo, Ocwen Loan Servicing, CitiMortgage, Bank of America and Quicken Loans. 

These new lower mortgage payments are going to help military families in the following ways:

• Give military families a little wiggle room when it comes to paying their bills
• Aid military families in being able to fight for our country while providing for their families back home
• Make military families aware that this type of help does exist and is available to them

Some military families are not aware that help from the government to lower their mortgage  has been in place for some time.  This new service will help every military family to know that it is available to them and will also make it much less of a hassle for them to receive. The big banks and financial institutions will now be notifying service men and women who qualify for lower rates.  These institutions will also make it very easy to enroll in the program.   

It is expected that thousands of military families will benefit from this new program.   It will be so nice for those who are serving us in such an honorable way to receive back a little from the government and for more military families to be able to own their own home.  Not only that, but many of these military families who take advantage of the governments help to lower their monthly mortgage payment will also be able to send their children to college or even be able to put some back to retire on. 

I personally give the government two thumbs up for this new assistance to military families.  It is a perfect time to show those who fight for our freedom just how much they are appreciated. 

If you have recently begun looking for a new home to purchase, you already know that it is very competitive out there.  It is important for you to realize going in that there are many other families searching for their dream home also.  If what you think is your dream home slips through your fingers because you are outbid, don’t take it personally; take it as a sign that the particular house you were bidding on is simply not the one for you.  There are ways to be competitive however. Here are a few tips for competing in a buyer’s market. 

• The most important tip is to keep your feelings in check when making an offer on a house.  Of course you face the possibility of being out bid, but don’t let that come back to bite you with your next offer.  Be sure to keep your mind open and realize that the house for you and your family is out there and that you will find it eventually.  Try not to let your feelings get in the way and cause a bidding war.  Don’t bid higher than you can actually afford to pay or you may end up with a budget you cannot afford. 
   
• Get a pre approval from a bank or Mortgage Company  BEFORE you go out looking with a Realtor for your new home.  Since it is a buyer’s market you are going to want to do all you can to make your offer stand out above all others.  Also when you do find the home of your dreams you will be able to make an offer right away and won’t have to worry about someone bidding before you get your approval. 
   
• Be sure to have enough money set aside for a down payment on the home you want to purchase.  If your loan type does not require you to have a down payment such as a USDA loan, you need to still be sure to have enough cash set aside to cover the difference between the appraised value of the home and the price you have agreed to pay.  Sometimes the appraised value of the home can be less than the price agreed upon by you and the seller. 
   
• Try not to get into a bidding war with investors if you can help it.  You don’t want to end up with a house that needs repairs that you cannot afford because you paid too much for the house in the beginning.  If you DO bid against investors, try not to let your heart get set on that one particular house. 

Moving to the country may sound appealing to you however there are a few things you need to think about before doing so.  Living in the country can be rewarding if you are willing to take a few things into consideration before moving there.  Getting away from the hustle and bustle of the city may be just what you are in need of.  In this blog post we are going to give you a few tips for making your move to the country a peaceful one.

• Realize that most homes out in the country require that you have a well.   Well water although great tasting may need a bit of work in order to get it ready to drink.  Sometimes well’s can be costly if you are moving to a rural area that has hard water.  Just be sure to keep this little fact in mind before you move out to the country and you won’t be surprised by it if you end up needing to purchase some sort of water softener. 
• Realize that your commute to work may be a bit longer if you work in the city and choose to purchase land or a home in the country.  If living in the country is important to you and your family then making the sacrifice of driving a little bit further to work may be worth it to all of you.
• Buying land or a home out in the country is also going to mean a more difficult time driving anywhere in the event of inclement weather.   You and your family may have to settle in for a few days and just enjoy one another when bad weather comes once you move out to the country.  This can be a blessing or a curse, depending on the way you look at it.  It is just good to be aware that rural roads typically do not get cleared as fast as roads in the big cities when bad weather sets in.  You may want to consider buying a four wheel drive if you purchase a home in the country so that you can more easily maneuver around the snow covered country roads.
• The cost of trash removal can get quite expensive in the country.  Many folks that live in the country take their trash to the local dump because they can save quite a bit of money that way. 
• If you are considering buying a home in the country to get away from loud neighbors, be aware that you may have to deal with gun shots and folks hunting within walking distance of your home once you move out on a bigger piece of land. 

If moving to the country sounds appealing to you and none of these items we have listed for you to think about bother you, then you are likely going to enjoy living in the peace and tranquility the country life has to offer you. 

Information courtesy of New Castle County DE Realtor Tucker Robbins.

Buying a property through a short sale can be financially beneficial. But, as a real estate buyer, you need to go into the process understanding your market! That means having a knowledgeable realtor and attorney.

A homeowner is “underwater” with their mortgage when they owe more than the value of their home. The term “short sale” comes from the situation where the proceeds from a sale are less than, or “short” of, the amount of debt.

Lenders are motivated to allow a short sale when they perceive it will create more net income than a foreclosure. Sellers are motivated because it puts them in more control of timing, and causes less damage to their credit than foreclosure.

For the buyer, a short sale means a purchase price that is discounted from the normal sale price. However, the market situation with short sales is very specific to your state and your market. Here are some trends across the country…

25% of US homeowners with a mortgage are underwater. That is 10.7 million homes! That percentage is down from 28% in September 2012. It is important to note that 8.3 million of those homes are on the edge of being underwater with a LTV ratio of 90%-110%. The other 2.4 million have an average LTV ratio of 125%.

A primary factor helping that downward trend is a decline in investors’ interest in short sales. A decline in investors buying at discount means prices are moving upward. Increasing prices means increases in value, which means increases in equity for the homeowners.

However, according to RealtyTrac.com it will take years, not months, for the 125% LTV owners to recover enough equity to allow them to sell. That means the short sale opportunities for buyers will be available for a while.

As a buyer of a short sale, be aware the process takes time. All parties have many more documents to review and approve. Your due diligence will take longer. And the process leading to a closing will take longer.

Make sure you are working with a Realtor and an attorney who have experience with short sales in your market.

At least, make sure your Realtor and attorney have actual experience with short sales. Go into the process with a lot of patience.

Information provided by Wilmington De Realtor Tucker Robbins.