Why use an agent to search for homes for you

Why use an agent to search for homes for you

I have helped countless first time home buyers find their home and many of the could have saved themselves plenty of hassle when first starting out. A lot of buyers start out using sites like Trulia or Zillow. Many people do not know this but those sites are third party vendors that purchases their information from databases like the one I belong to. A lot of the information and homes on that site are outdated, not even on the market, or have the wrong information wasting the valuable time of home buyers like you.

The easiest and best way to search for homes is to have an agent like myself run a search and set up a portal in the MLS for you. It is free of charge as is the services of any buyers agent. The MLS or Multiple Listing Service is the database that we as realtors list the homes we have for sale. It is the only place to get the most updated and accurate information about homes on the market.

What I do when I set up a portal in the MLS for you is get your name and email address. I then find out what criteria you are looking for in a house. Things like the area or school districts you want, square footage desired, number of bedrooms or bathrooms, whether you need a garage or basement, price range etc.... Once I have all that, I enter it into the database and the system will pull out EVERY home on the market that matches your search criteria and send it to your email in a easily viewable report with all the information on the homes that you need. It's by far the easiest way to search for homes. Saving you time and frustration.

The best part of it is you will also receive an email alert the minute a home that  matches your search criteria goes on the market giving you the upper hand in being able to see the property before many other home buyers. You will also receive a link to the portal where you can save the homes that you are interested in to easily view them later or delete the ones that you don't like.

Believe me when I tell you that is by far the simplest and simplest way to search for homes. If you are interested in getting set up with a free home search, just email me at jamesgrennay@remax.net or call me at 810-893-2288 and I will get you set up that day.

Getting a home inspection

Before you buy a home, one of the things you should do is to have the home checked out by a professional home inspector. Buying a home is expensive enough as it is - why would you choose to fork over another $200-$250 if you're not required to? In this report, we'll delve into what a home inspection can reveal and why you shouldn't forgo this optional procedure.



The Home Inspection Contingency

Your first clue that a home inspection is important is that it can be used as a contingency in your purchase offer. This contingency provides that if significant defects are revealed by a home inspection, you can back out of your offer, free of penalty, within a certain timeframe. The potential problems a home can have must be pretty serious if they could allow you to walk away from such a significant contract. I always put this into my purchase agreements for my clients.
What a Home Inspection Examines

Inspectors vary in experience, ability and thoroughness, but a good inspector should examine certain components of the home you want to purchase and then produce a report covering his or her findings. The typical inspection lasts two to three hours and you should be present for the inspection to get a firsthand explanation of the inspector's findings and, if necessary, ask questions. Also, any problems the inspector uncovers will make more sense if you see them in person instead of relying solely on the snapshot photos in the report.

The inspector should note:

• whether each problem is a safety issue, major defect, or minor defect
• which items need replacement and which should be repaired or serviced
• items that are suitable for now but that should be monitored closely

A really great inspector will even tell you about routine maintenance that should be performed, which can be a great help if you are a first-time homebuyer.
While it is impossible to list everything an inspector could possibly check for, the following list will give you a general idea of what to expect.

Exterior

• Exterior walls - The inspector will check for damaged or missing siding, cracks and whether the soil is in excessively close contact with the bottom of the house, which can invite wood-destroying insects. However, the pest inspector, not the home inspector, will check for actual damage from these insects. The inspector will let you know which problems are cosmetic and which could be more serious.
• Foundation - If the foundation is not visible, and it usually is not, the inspector will not be able to examine it directly, but they can check for secondary evidence of foundation issues, like cracks or settling.
• Grading - The inspector will let you know whether the grading slopes away from the house as it should. If it doesn't, water could get into the house and cause damage, and you will need to either change the slope of the yard or install a drainage system.
• Garage or carport - The inspector will test the garage door for proper opening and closing, check the garage framing if it is visible and determine if the garage is properly ventilated (to prevent accidental carbon monoxide poisoning). If the water heater is in the garage, the inspector will make sure it is installed high enough off the ground to minimize the risk of explosion from gasoline fumes mingling with the heater's flame.
• Roof - The inspector will check for areas where roof damage or poor installation could allow water to enter the home, such as loose, missing or improperly secured shingles and cracked or damaged mastic around vents. He or she will also check the condition of the gutters.

Interior

• Plumbing - The home inspector will check all faucets and showers, look for visible leaks, such as under sinks and test the water pressure. He or she will also identify the kind of pipes the house has, if any pipes are visible. The inspector may recommend a secondary inspection if the pipes are old to determine if or when they might need to be replaced and how much the work would cost. The inspector will also identify the location of the home's main water shutoff valve.
• Electrical - The inspector will identify the kind of wiring the home has, test all the outlets and make sure there are functional ground fault circuit interrupters (which can protect you from electrocution, electric shock and electrical burns) installed in areas like the bathrooms, kitchen, garage and outdoors. They will also check your electrical panel for any safety issues and check your electrical outlets to make sure they do not present a fire hazard.
• Heating, ventilation and air conditioning (HVAC) - The inspector will look at your HVAC system to estimate the age of the furnace and air conditioner, determine if they function properly and recommend repairs or maintenance. An inspector can also give you an idea of the age of the home's ducting, whether it might have leaks, if your home has sufficient insulation to minimize your energy bills and whether there is any asbestos insulation.
• Water heater - The home inspector will identify the age of the heater and determine if it is properly installed and secured. The inspector will also let you know what kind of condition it is in and give you a general idea of how many years it has left.
• Kitchen appliances – The inspector will sometimes check kitchen appliances that come with the home to make sure they work, but these are not always part of the inspection. Be sure to ask the inspector which appliances are not included so that you can check them yourself.
• Laundry room - The inspector will make sure the laundry room is properly vented. A poorly maintained dryer-exhaust system can be a serious fire hazard.
• Fire safety - If the home has an attached garage, the inspector will make sure the wall has the proper fire rating and that it hasn't been damaged in any way that would compromise its fire rating. They will also test the home's smoke detectors.
• Bathrooms - The inspector will check for visible leaks, properly secured toilets, adequate ventilation and other issues. If the bathroom does not have a window and/or a ventilation fan, mold and mildew can become problems and moisture can warp wood cabinets over time.

Home Inspection Shortcomings

A home inspection can't identify everything that might be wrong with the property - it only checks for visual cues to problems. For example, if the home's doors do not close properly or the floors are slanted, the foundation might have a crack - but if the crack can't be seen without pulling up all the flooring in the house, a home inspector can't tell you for sure if it's there.

Furthermore, most home inspectors are generalists - that is, they can tell you that the plumbing might have a problem, but then they will recommend that you hire an expert to verify the problem and give you an estimate of the cost to fix it. Of course, hiring additional inspectors will cost extra money. Home inspectors also do not check for issues like termite damage, site contamination, mold, engineering problems and other specialized issues.

SEE: 10 Reasons You Shouldn't Skip A Home Inspection

After the Inspection

Once you have the results of your home inspection, you have several options.

• If the problems are too significant or too expensive to fix, you can choose to walk away from the purchase, as long as the purchase contract has an inspection contingency.
• For problems large or small, you can ask the seller to fix them, reduce the purchase price, or to give you a cash credit at closing to fix the problems yourself - this is where a home inspection can pay for itself several times over.
• If these options aren't viable in your situation (for example, if the property is bank-owned and being sold as-is), you can get estimates to fix the problems yourself and come up with a plan for repairs in order of their importance and affordability once you own the property.

The Bottom Line

A home inspection will cost you a little bit of time and money, but in the long run you'll be glad you did it. The inspection can reveal problems that you may be able to get the current owners to fix before you move in, saving you time and money. If you are a first-time homebuyer, an inspection can give you a crash course in home maintenance and a checklist of items that need attention to make your home as safe and sound as possible. Don't skip this important step in the home-buying process - it's worth every penny.

                               

Rural Development Loan

USDA Rural Development loans are designed by the government to help medium income Americans living in rural and suburban communities buy a new home. They are the most competitive loan in the market

• NO money down
• Low interest rates
• 30 year fixed rates
• Government guaranteed
• You have the ability to roll in your closing costs into the loan
• Flexible credit guidelines

The Rural Development Home Loan is a 30 year fixed rate loan available for low to moderate income families who are looking to buy, build, improve, repair, or rehabilitate homes in rural areas. If a buyer has had ownership of a primary residence in the last three years, they are not eligible for the program. To qualify for a Rural Development loan buyers must meet the MSHDA (Michigan State Housing Development Authority) sales price, income limit, and first time home buyer eligibility guidelines. All adult members of the new home must apply jointly for the loan.

The Rural Development loan is known as the no money down home loan.

This is because applicants can borrow 100% of the home’s cost! The Rural Development Loan is the only zero down loan offered to those who have not served in the military. The maximum amount guaranteed by Rural Development can include closing costs, prepaid/escrow items, and the RD guarantee fee. Most Rural Development Loan applicants receive almost all of their earnest, also known as good-faith deposit, back after closing. However, the maximum loan amount cannot include repairs and/or improvements to the property.


Who applies for a Rural Development Loan?
 Those wanting to stop renting and buy a home with zero down.

Families and individuals looking for their first home.

People in rural areas.
 
What areas are considered Rural Development Areas?
 Rural Development Loans are offered in areas with a population of 20,000 or less people. Right now, the areas that qualify are and home in Genesee county North of Stanley rd., any home West of Elms Rd., Any home East of Potter Rd., and any home South of Grand Blanc Rd.
  
What Properties are eligible?
New homes or builders’ models that have not been previously occupied

New condominiums approved by the FNMA or FHLMC

Existing homes that have been previously occupied

Existing Condominiums that have been previously occupied.

New manufactured homes approved by RD.

**All must be in Rural Development Areas**  

Income Limits
Household income cannot exceed 115% of the median household income of the area.

A family of 1 – 4 cannot exceed an income of $74,050

A family of 5 – 8 cannot exceed an income of $97,750 

Occupancy Requirements
Borrower(s) must occupy the property within 60 days of closing.

VA Loans

      VA Loans: What Are They? What Are the Advantages?

What Is a VA Loan?

VA loans are home loans for the purchase of a primary residence available to consumers who have served or are presently serving in the U.S. military. While the Department of Veterans Affairs (VA) does not lend money for VA loans, it backs loans made by private lenders (banks, savings and loans, or mortgage companies) to veterans who qualify.

Who Is Eligible for a VA Loan?

• Veterans
• Active-duty personnel
• Reservists/National Guard members
• Some surviving spouses

What Are the Benefits of a VA Loan?

• No down payment required (unless required by the lender or the purchase price is more than the reasonable value of the property).
• Buyer informed of reasonable value.
• Negotiable interest rate.
• Ability to finance the VA funding fee (plus reduced funding fees with a down payment of at least 5 percent and exemption for veterans receiving VA compensation).
• Closing costs are comparable with other financing types (and may be lower).
• No mortgage insurance premiums.
• An assumable mortgage.
• Right to prepay without penalty.
• For homes inspected by VA during construction, a warranty from builder and assistance from VA to obtain cooperation of builder.
• VA assistance to veteran borrowers in default due to temporary financial difficulty.

How Can Veterans Get VA Loans?

Veterans can apply for a VA loan with any mortgage lender that participates in the VA home loan program, but will need a Certificate of Eligibility from the VA to prove to the lender they are eligible for a VA loan. Lenders can also get the certificate on behalf of their clients.

 

How to Apply for a Certificate of Eligibility and What Evidence You'll Need to Get the Certificate

Click here for eligibility requirements

 

How Big of a VA Loan Can a Veteran Get?

 

2014 VA County Loan Limits : According to the VA there is "... no maximum that[1] an eligible veteran may borrow using a VA-guaranteed loan." However, there are county limits that must be used to calculate the VA's maximum guaranty amount for a particular county. Generally, an eligible veteran can get a loan up to $417,000 with no money down and in some high-cost places, up to $1,094,000.

Other Resources

General info about VA loans, click here.
General FAQ page for VA loans, click here.

FHA 203K Loan ( Rehab Loan)

FHA 203k Loans: What Are They? What Are the Benefits?

Getting a Mortgage Loan for a Fixer-Upper: A Primer on FHA 203k Loans

The idea of buying a fixer-upper and turning it into your dream abode can seem so perfect -- every nook and cranny just to your specifications! The reality, however, can be harsh. When you realize how much it will cost to remodel, you often also realize that you can’t afford it. Or you find out that a lender won’t give you a loan because the home is considered “uninhabitable” as it is. That’s where an FHA 203k loan comes in.

An FHA 203k loan is a loan backed by the federal government and given to buyers who want to buy a damaged or older home and do repairs on it. Here’s how it works: Let’s say you want to buy a home that needs a brand-new bathroom and kitchen. An FHA 203k lender would then give you the money to buy (or refinance) the house plus the money to do the necessary renovations to the kitchen and bathroom. Often the loan will also include: 1) an up to 20 percent “contingency reserve” so that you will have the funds to complete the remodel in the event it ends up costing more than the estimates suggested and/or 2) a provision that gives you up to about six months of mortgage payments so you can live elsewhere while you’re remodeling, but still pay the mortgage payments on the new home.

 

Which repairs qualify?

There are two main types of FHA 203k mortgage loans. The first is the regular 203k, which is given for properties that need structural repairs such as a new roof or a room addition; the second is the streamlined 203k, which is given for non-structural repairs such as painting and new appliances. Among the other repairs that an FHA 203k will cover: decks, patios, bathroom and kitchen remodels, flooring, plumbing, new siding, additions to the home such as a second story, and heating and air conditioning systems. The program will not cover so-called “luxury” improvements such as adding a tennis court or pool to the property.

 

How much money can you get?

The maximum amount of money a lender will give you under an FHA 203k depends on the type of loan you get (regular vs. streamlined). With a regular FHA 203k, the maximum amount you can get is the lesser of these two amounts: 1) the as-is value of the property plus repair costs, or 2) 110 percent of the estimated value of the property once you do the repairs. With a streamlined loan, you can get a loan for the purchase price of the home plus up to $35,000. To determine the as-is value of the property or the estimated value of the property post-repair, you may need to have an appraisal done. You can read details on how these estimates are made here. You will be required to put down 3.5 percent, but the money can come from a family member, employer or charitable organization.

 

What kinds of properties qualify?

Qualifying homes include: a one- to four-family home that has been completed for a least a year; a home that has been torn down, provided that some of the existing foundation is still in place; a home that you want to move to a new location. The home cannot be a co-op, but some condos are eligible. For a full list of eligible properties, see this. Your property will also have to qualify under the usual FHA requirements. For example, its value cannot exceed a certain maximum amount, which depends on where you live.

 

What are the pros and cons of these loans?

The main benefit of these loans is that they give you the ability to buy a home in need of repairs that you might not otherwise have been able to afford to buy. Plus, the down payment requirements are minimal, and often you get decent interest rates (note that the interest rates and discount points will vary by 203k lender, so it’s important to make sure that you’re getting a good deal on the loan).

The downsides are that not all properties qualify, there are limits on the funding you can get and applying for the loan isn't easy. For example, to apply for the loan you may need to hire an independent consultant to prepare the exhibits required (to get the loan, you have to provide a detailed proposal of the work you want to do and cost estimates for each item).

FHA Home Loan

What is an FHA Loan?
An FHA loan is a mortgage loan that is insured by the Federal Housing Administration (FHA). Essentially, the federal government insures loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on their mortgage payments.

The FHA program was created in response to the rash of foreclosures and defaults that happened in 1930s; to provide mortgage lenders with adequate insurance; and to help stimulate the housing market by making loans accessible and affordable. Nowadays, FHA loans are very popular, especially with first-time home buyers.

 

What Are the Advantages of FHA Loans?

Typically an FHA loan is one of the easiest types of mortgage loans to qualify for because it requires a low down payment and you can have less-than-perfect credit. An FHA down payment of 3.5 percent is required. Borrowers who cannot afford a traditional down payment of 20 percent or can’t get approved for private mortgage insurance should look into whether an FHA loan is the best option for their personal scenario. Another advantage of an FHA loan is that it can be assumable, which means if you want to sell your home, the buyer can “assume” the loan you have. People who have low or bad credit, have undergone a bankruptcy or have been foreclosed upon may be able to still qualify for an FHA loan.

FHA Loan Requirements

• Must have a steady employment history or worked for the same employer for the past two years
• Must have a valid Social Security number, lawful residency in the U.S. and be of legal age to sign a mortgage in your state
• Must make a minimum down payment of 3.5 percent. The money can be gifted by a family member.
• New FHA loans are only available for primary residence occupancy
• Must have a property appraisal from a FHA-approved appraiser
• Your front-end ratio (mortgage payment plus HOA fees, property taxes, mortgage insurance, home insurance) needs to be less than 31 percent of your gross income, typically. You may be able to get approved with as high a percentage as 46.99 percent. Your lender will be required to provide justification as to why they believe the mortgage presents an acceptable risk. The lender must include any compensating factors used for loan approval.
• Your back-end ratio (mortgage plus all your monthly debt, i.e., credit card payment, car payment, student loans, etc.) needs to be less than 43 percent of your gross income, typically. You may be able to get approved with as high a percentage as 56.99 percent. Your lender will be required to provide justification as to why they believe the mortgage presents an acceptable risk. The lender must include any compensating factors used for loan approval.
• Minimum credit score of 580 for maximum financing with a minimum down payment of 3.5 percent.
• Minimum credit score of 500-579 for maximum LTV of 90 percent with a minimum down payment of 10 percent. FHA-qualified lenders will use a case-by-case basis to determine an applicants' credit worthiness.
• Typically you must be two years out of bankruptcy and have re-established good credit. Exceptions can be made if you are out of bankruptcy for more than one year if there were extenuating circumstances beyond your control that caused the bankruptcy and you've managed your money in a responsible manner. See this page for more details.
• Typically you must be three year out of foreclosure and have re-established good credit. Exceptions can be made if there were extenuating circumstances and you've improved your credit. If you were unable to sell your home because you had to move to a new area, this does not qualify as an exception to the three-year foreclosure guideline.

Property needs to meet certain standards:

Also, an FHA loan requires that a property meet certain minimum standards at appraisal. If the home you are purchasing does not meet these standards and a seller will not agree to the required repairs, your only option is to pay for the required repairs at closing (to be held in escrow until the repairs are complete).
Keep current on the premium costs for FHA loans by visiting the U.S. Department of Housing and Urban Development (HUD).

 

FHA Loan Limits

There are maximum mortgage limits for FHA loans that vary by state and county. In certain counties, you may be able to get financing for a loan size up to $729,750 with a 3.5 percent down payment. Conventional financing for loans that can be bought by Fannie Mae or Freddie Mac are currently at $625,000

The Preapproval Process

What is a pre-approval?

A pre-approval is a commitment letter from a lender or loan officer that confirms a borrower will qualify for a particular loan amount based on income and credit information.  Most pre-approval letters are good for 60 to 90 days.  Most sellers won’t entertain an offer without an accompanying pre-approval letter.

Why you should get pre-approved?

The most important reason for getting pre-approved is to have an accurate idea of how much house you can afford.   This will ensure that you only look at homes that are truly in your price range.   If you know what you can afford before you start looking, you will not become discouraged down the line.  Nothing hurts more than finding that perfect dream home only to discover  that you can not afford it.
A pre-approval letter is also essential in this competitive real estate market.  If you make an offer on a house without a pre-approval, your offer will not be taken as seriously as an offer from another person with a pre-approval (or more likely will be rejected entirely).   All offers are sent out with a pre-approval letter, source of funds, and credit scores.  The exception is for all-cash buyers who only need to show proof of funds and omit credit scores and pre-approvals entirely.

Documents you’ll need to provide to get a TRUE Pre-approval

• Your W2 from the past two years
• Your paystubs for the past three months
• Your tax returns from the past two years
• Your checking or savings bank statements for the past three months (this will likely have your down payment funds in them as well)
• Your statements for all your other assets (stocks, bonds, retirement accounts) for the last two months
• Your current mortgage, tax, insurance and HOA documents if you already own and are purchasing a second home/investment property.
• If you are self-employed: Your business tax returns for the past two years in addition to your year-to-date profit and loss statement and year-to-date balance sheet
• Your credit report and score (which I will run for you)

If anyone offers to pre-approve you without ALL of the above documents, you should run!   There is no way to provide a TRUE pre-approval without analyzing all asset and income documentation.
Get Pre-Approved!

Contact me to get pre-approved today.  After looking at your asset and income documentation I can determine your qualification within minutes (with all the necessary paperwork provided).  Once you are pre-approved you can confidently start looking for the perfect place to call home.  Contact me to set up a consultation or if you have any  additional questions about the buying process.