1635976943342574 UA-72458003-1 google-site-verification=bpkXPmzUUBtm0pA_hz68HRCFRNqdIA9eF18eNT7U93w Why Fodor's Travel Says The 'Best Traces of Hip-Hop Culture Are Found Everywhere in Oakland' https://youtu.be/aTsDXAtfXdI

REAL ESTATE ADVISOR: SEPTEMBER 2019 –  Down payment got you down?

Down payment got you down?

Ten things to know before buying a home

• LOOKING TO BUY OR SELL A HOME IN THE EAST BAY? I can help! Visit ===> www.carlosfcamargo.net 

Posted on September 11, 2019 at 5:54 PM
Carlos Camargo | Category: Buying a House, Credit & Home Finance, First-time Buyer, Glossary of Housing & RE Terms, Real Estate Market Update

First Time Home Buyer? 10 Facts No One Tells You

First Time Home Buyer? Ten Facts No One Tells You

Buying your first home can feel like both the best of times and the worst of times. Here are 10 facts nobody tells you when you’re buying your first home.

1. Something will go wrong

No move is ever perfect. Something will get broken or there will be something you’ve forgotten to bring or do. With any luck, the setback will be minor, and you can chalk it up to the old adage, “things happen.”

2. Some of your conditions might not be met

One of the least enforceable clauses in offers to purchase is one for cleaning requests. You can stipulate that carpets, refrigerators and ovens be cleaned. However, if they haven’t been, there is often very little that you can do about it.

If a major repair hasn’t been completed as promised, one of two things will happen: you either won’t take possession of the property on the day you planned or your funds will have to be placed in escrow pending resolution of the issue.

3. If you don’t have the closing fees, you don’t get your new home

Closing costs and legal fees are due on closing, and your funds won’t be released to the seller unless your closing-vendors (PSL, Sidewalk, Soft-Storey, Pest home service providers) are paid. Closing costs usually range from two to five percent of the purchase price, but be sure to verify this information before arriving on closing day. This money is in addition to your down payment.

4. Good schools increase a home’s value

You’ll pay more for a house in a good school district. Of course, the good news is you’ll get more for it when you decide to sell. If the home you’re planning to buy is your “forever” home and you don’t have, or plan to have children, this may not matter. Still, it’s something to think about.

5. Your neighborhood may be about to change drastically

The municipality may be planning a park, a school, or a playground for your area. Depending on your lifestyle, that can mean profound changes in a short period of time. Check with local administration and the area’s local representative. The first can tell you what the plan is. The latter will have a far better grasp of whether outlined timelines are accurate or not. You can base your decision on the information they provide.

6. You need to read all the documents yourself

It’s tempting when you’re paying a lawyer to review HOA or condo documents to simply delegate this task. However, a close reading of the minutes of meetings will teach you a lot about your neighbors-to-be and help you avoid nasty surprises, like planned increases in fees or devolving renovations that used to be the condo board, or HOA’s responsibility to individual owners.

7. Don’t apply for other credit while mortgage shopping

Applying for a loan or another credit card may seem like a good idea when you’re about to take the home ownership plunge and know you’re going to need to buy things like garden tools, a gazebo, and a grill. Don’t do it unless absolutely necessary. It can negatively affect not only the amount of your pre-approved mortgage, but it can also mean you don’t get pre-approval. Wait until after you’ve bought your home to apply for more credit.

8. You’re going to need “earnest” money

Also known as a deposit, you’ll likely need about $2000 per $125,000 worth of house available when you make an offer. This money is required as a show of good faith and will be held in escrow. You’ll get it back if your offer isn’t accepted, or it may be applied to your down payment. You may forfeit this money, though, if you’re the one who withdraws from the deal.

9. Your neighbors-to-be may be your best source of information

Walk around the area you where you want to live. If you see people out gardening or mowing their lawns, talk to them. Strike up a conversation and explain that you’re thinking of buying. Ask receptive individuals what the neighborhood is like, how long they’ve lived there, and how long they’re planning to stay. If you learn that your new home is located next door to some party animals who blast music every single summer evening, you may not enjoy your own backyard, so you may want to reconsider.

10. Check for rebates you may be entitled to

You may qualify for first-time homeowner rebates. There may be other municipal, state, or utility-provider rebates available, too. Start investigating early. It may make more sense to invest in attic insulation than an air conditioner if you’re going to get a rebate that covers some or all the cost of the insulation. Some areas offer rebates on newer, more energy-efficient appliances. You won’t know that unless you do your homework.

A good real estate agent can talk you through the buying process. Now you’re already ahead of the game with these ten facts nobody tells you, and you’ll be able to focus on offer strategy rather than the fundamentals.

BUY VS. RENT

BUY VS. RENT – Should you buy your home or rent it? This is an age-old debate that really has no right or wrong answer because it depends on each individual. For some, buying makes more sense, and for others, renting is the best fit.🏠 LOOKING TO BUY OR SELL A HOME IN THE EAST BAY?🏠 Visit: www.carlosfcamargo.net | Call: 510.798.5016#BHGRE #CarlosFCamargoPhD #RealEstate #RealEstateAgent #RealEstateBroker #RealEstateLife #NoPlaceLikeHome_EastBay #OaklandCA #Realtor #RealEstateForSale #RealEstateExpert #Broker #HomeForSale #HouseForSale #PropertyForSale #realestatemarket #HouseHunting #ExpectBetter #BHGRealEstate #bayarea #BHGReliancePartners #contracostacounty #alamedacounty #reliancepartnersbhgre #RealEstateLifeStyle #RealEstateTips #successtips #home #HomeDecor #HomeDesign

Posted by Carlos Camargo on Thursday, August 29, 2019

Posted on September 3, 2019 at 2:33 AM
Carlos Camargo | Category: Buying a House, Credit & Home Finance, First-time Buyer

1st Half of 2019 – California Housing Affordability

2019-Q2 CA Housing Affordability – https://lnkd.in/eE2k2_J

The percentage of home buyers who could afford to purchase a median-priced, existing single-family home in California in second-quarter 2019 dipped to 30% from 32% in the first quarter of 2019 but was up from 26% in the second quarter a year ago, according to C.A.R.’s Traditional Housing Affordability Index (HAI). California’s housing affordability index hit a peak of 56 percent in the second quarter of 2012.

C.A.R.’s HAI measures the percentage of all households that can afford to purchase a median-priced, single-family home in California. C.A.R. also reports affordability indices for regions and select counties within the state. The index is considered the most fundamental measure of housing well-being for home buyers in the state.

A minimum annual income of $122,960 was needed to qualify for the purchase of a $608,660 statewide median-priced, existing single-family home in the second quarter of 2019. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $3,070, assuming a 20% down payment and an effective composite interest rate of 4.17%. composite interest rate was 4.62% in first-quarter 2019 and 4.70% 2Q-19

🏠 LOOKING TO BUY OR SELL A HOME IN THE EAST BAY?
🏠 Visit: www.carlosfcamargo.net | Call: 510.798.5016

#BHGRE #CarlosFCamargoPhD #RealEstate #RealEstateAgent#RealEstateBroker #RealEstateLife #NoPlaceLikeHome_EastBay#OaklandCA #Realtor

Posted on August 30, 2019 at 9:10 PM
Carlos Camargo | Category: Buying a House, Credit & Home Finance, Español - Comprar Vivienda, First-time Buyer, N.A.R. - C.A.R. Update, Real Estate Market Update

Thinking About Buying Your First Home?

Thinking About Buying Your First Home?

Buying your first home can be intimidating, so take some proactive steps to make the process more manageable

A house could be the biggest purchase you will ever make, and the process of shopping for a home and obtaining a mortgage can be overwhelming. However, there are steps you can take to make the process more manageable and the purchase more attainable.

Download the FDIC Guide Today:
https://www.fdic.gov/consumers/consumer/news/june2019.pdf

 

1. Know Your Credit History and Score

One of the key factors in getting approved for a loan is your credit score. Your credit history determines your score, and the higher the score, the better the loan terms become. You are entitled to a free credit report once every 12 months from each of the three nationwide credit bureaus: Transunion, Experian, and Equifax. Go to www.AnnualCreditReport.com, the official site for consumers to obtain free credit reports, or call 1-877-322-8228. If you notice any errors on your report, work on correcting them as soon as possible. The Federal Trade Commission offers helpful suggestions on how to fix errors on credit reports at Disputing Errors on Credit Reports

A high credit score helps you not only get approved for a mortgage, it also improves the terms available. Here is a breakdown of the five major components that make up your credit score.

    • Payment History – Reported payments account for 35% of your total credit score. Late payments will affect your score negatively, so it’s important to consistently make payments on time.

 

    • Credit Utilization – How much of your credit is in use makes up 30% of your score. If you reach the credit limit on your credit cards, it lowers your credit score. Do your best to start paying down credit card balances to free up your credit.

 

    • Length of Credit History – How long you have been using credit and making payments as well as the amount of time each of your credit accounts have been open is 15% of your total credit score. If you’re trying to clean up your credit, closing accounts may not necessarily be the answer. It may be best to pay off accounts and keep them open to maintain long standing accounts.

 

    • New Credit – Be cautious when opening new credit accounts, which accounts for 10% of your score. Opening too many new accounts in a relatively short period of time could hurt your score.

 

    • Credit Mix – The remaining 10% of your score relies on the variety of credit accounts you have. Having a mix of revolving credit accounts, such as credit cards, and installment loans, including auto loans and student loans, with positive payment histories show that you can manage different types of credit and will increase your score.

 

Remember, the higher your credit score as a potential buyer, the lower the risk to a potential lender. 

2. How Much Can and Should You Spend?

When reviewing mortgage applications, lenders pay close attention to your debt-to-income ratio (DTI). DTI shows how much of your monthly gross income – your income before taxes or other deductions are taken out – goes to monthly debt payments. Many lenders prefer that your total monthly debt payments, which include housing payments, auto loan payments, student loan payments, and minimum credit card payments, not exceed 40% of your gross monthly income. Some lenders prefer a DTI of 36% or less. Others may accept a higher ratio. 

When looking at your finances to determine how much you can afford for a monthly mortgage payment, keep in mind that the payment will include not only the loan principal and interest but also taxes, homeowner’s insurance, and possibly mortgage insurance (lenders require you to pay mortgage insurance when your down payment is less than 20% to protect the lender in the event you default on the loan). While you will need more information to get an exact figure of the house price you can afford, such as the interest rate on your loan and how much of a down payment you will have to put toward the purchase, look at your DTI as discussed above to get a better idea of the monthly payment that will fit your budget. 

Many websites have calculation tools that can help you determine how much you can afford and the amount your monthly payment will be under different scenarios. The U.S. Department of Housing and Urban Development’s (HUD) maximum financing calculator is a good place to start and can be found at FHA Maximum Financing Calculator

For more information on figuring out how much you can afford, visit: 

Money Smart – Making Housing Decisions 

Money Smart – Buying a Home

Mortgage Moves: How much can you afford?

Decide how much you want to spend on a home

3. Save, Save, Save

Having savings makes it easier to purchase a home. Saving can be hard given the challenges many first-time home buyers face with high housing costs and student loan debt, but most lenders require a down payment, and you will likely be responsible for closing costs. You will also want to have money available once you complete the purchase for maintenance or repairs in your new home. So let’s look at the possibilities. 

To increase your savings, see if there is a way to tighten your budget and lower your current housing costs. Automating your savings may help keep you on task with obtaining your savings goals too. Check with your bank about linking a savings account to your checking account and creating a regular automatic deposit to the savings account. In addition, automatic savings apps, which help you save by rounding up certain purchases to the nearest dollar and setting the money aside, can add a little extra to your savings. 

The Consumer Financial Protection Bureau and Federal Trade Commission have useful resources for those interested in learning more about ways to save. Visit Start Small, Save Up and Make a Budget

You may also be able to take advantage of down payment and closing cost assistance programs offered by government agencies and non-profit organizations. Be sure to take the time to research what is available and what your qualifications are to apply for these special programs. Start with HUD’s website for more information about assistance programs in your state: HUD – Local Information

HUD also provides lists of approved housing counselors in each state that can help with the home buying process: 

HUD Approved Housing Counseling Agencies 

For suggestions on how to save money with worksheets to help you plan to save visit: Money Smart – Your Savings 

4. Start Organizing Documents

When you apply for a mortgage, most lenders will want one or two months of paystubs, two years of tax filings, three to six months of bank account statements, information about any retirement savings, and other documentation specific to your financial situation, such as explanations of any recent large deposits or withdrawals from your bank account. It can be overwhelming to pull together so much information in a short timeframe, so start early. By getting these documents in order at the beginning of your house hunting journey, you give yourself time to ensure you have all of the documents the lender requires. 

When you’re ready to buy a house, understanding the costs and benefits, researching your credit and housing options, and building your savings are the best first steps toward owning your first home. In next month’s article, we’ll take a look at the next step in the home buying process: applying for a mortgage. 

 

 

Posted on July 5, 2019 at 11:57 PM
Carlos Camargo | Category: Buying a House, Credit & Home Finance, First-time Buyer

NEED-TO-KNOWS ABOUT REAL ESTATE CONTINGENCIES

 

You’ve found a house you’d like to purchase, and you’re ready to make an offer. It’s time to take a closer look at the purchase contract—perhaps the most important legal document for real estate transactions—and decide how you want to modify its terms, including adding various contingencies.

 

Contingencies? Yes, it’s an uncommon word. The real estate industry is filled with unfamiliar terminology. A contingency refers to particular provisions in a standard purchase contract. If the condition isn’t met, you’re allowed to back out of the purchase, without penalty.

 

Contingencies are a good thing, in terms of protecting buyers. They can also backfire if you insist on too many contingencies or are competing with less demanding buyers.

 

Here are several key points to keep in mind.

 

1. Know the market.

In a seller’s market (when there aren’t many properties in a specific price range or a particular geographic area for sale), contingencies will encourage sellers to find a more accommodating buyer.

In fact, in a strong seller’s market, some buyers severely limit their contingencies and offer more than the seller’s asking price, potentially triggering a bidding war.

In a buyer’s market (when there are more properties for sale than there are interested buyers), sellers are more likely to accept buyer contingencies.

Don’t know what market your area is experiencing right now? That’s okay. Your Accredited Buyer’s Representative specializes in staying current on that information for your local market. Just ask!

 

2. Understand which contingencies are common (and which aren’t).

Your buyer’s representative can also provide the best advice on which contingencies are appropriate and commonly accepted in your market. Every area operates under different standards and conventions.  

A few examples:

  • Home inspection – If something is seriously wrong with a house, you’ll want to know before you buy, not after the closing, when it’s too late to address the issue with the seller. Inspections are primarily designed to evaluate the structural and mechanical condition of a property, although specific conventions vary by market. Inspections may also check for mold, radon, pests, lead, septic systems, or other specific concerns. A home inspection (at the buyer’s expense) is a highly recommended contingency clause.

 

  • Attorney review – The seller, the buyer, or both may request a certain number of days to have their attorney(s) review the contract for sale and the closing documents.

 

  • Mortgage financing approval – Smart buyers secure a pre-approval letter from their lender before submitting an offer. However, your mortgage financing could still fail to reach final approval due to findings in the property inspection, a too-low appraisal, or a final review of your financial situation.

 

  • Approval of homeowner association (HOA) documents – If you are buying a property governed by an HOA, you can request these documents before making an offer to ensure the HOA is on solid financial ground. Alternately, this can be a contingency item.

 

  • Early occupancy (with payment of rent) or furniture move in – If your timeframe requires a critical move-in deadline, such as the start of a school year, you may want to stipulate this as a contingency.

 

  • Appraised value – The appraisal may come in lower than your offer, in which case an appraisal contingency can provide an option to attempt to renegotiate the selling price. Also, note that lenders can reject your mortgage application if an appraisal comes in too low.

 

  • Home warranty – A buyer may make the sale contingent on their ability to secure a home warranty on the property. Be aware that some home warranties require a home inspection before purchase to prove that a warranty claim is not a pre-existing condition.

 

  • Sale of a current home – This contingency requires the seller to agree to delay closing until you’ve found a buyer for your current home. It’s a tall request, especially in a seller’s market. If the contingency includes a “bump” clause or “kick out” clause, the seller can continue marketing their home in hopes of finding another buyer.

 

3. Watch those dates!

If your contract includes deadlines related to contingencies, be sure to monitor them carefully. Your buyer’s rep will help you stay on top of these too.

Dates matter, since even a one-day lapse could put you in jeopardy of non-performance of your contractual obligations, potentially resulting in the cancelation of your purchase contract and loss of your earnest money.

Add any critical deadlines to whatever calendar system you rely upon, as well as alerts a couple of days before the deadline hits.

KNOW YOUR CONTRACT CONTINGENCIES: CALIFORNIA’S REAL ESTATE INSPECTION CONTINGENCY 14(B)(1)

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“Buyer’s offer has no contingencies.” This phrase has become increasingly common in the Bay Area’s competitive real estate market, where buyers are looking for every advantage to stand out from the crowd. Whether you are the buyer or seller, it is important to know what contingencies are and where to find them in your contract.

In this three-part series, I will explain the typical real estate contingencies and help you identify them in your California real estate contract.

What Are Contingencies in Real Estate?

A contingency is a condition that must be fulfilled before the sale of a home can close. In California, these conditions are typically found in the buyer’s offer. The most common form we use to write an offer is California Association of Realtors (C.A.R.) Form RPA-CA.

Real estate contingencies typically fall under three major categories: appraisal, home inspection and mortgage approval. Think of these contingencies as a buyer’s and seller’s safety net. If a home does not appraise at a certain value, if an inspection reveals a major problem, or if the buyer cannot obtain adequate financing, the parties can back out of the contract without penalty.

In addition to specifying contingencies, your contract will set specific deadlines. For example, the buyer will have 17 days to complete inspections (see below). It will also state when and how notice of cancellation must be given and received.

California’s Inspection Contingency: 14(B)(1)

home_cutawayIn California, the default inspection contingency gives the buyer a little more than two (2) weeks – 17 days – to complete all inspections.

C.A.R. Form RPA-CA, section 14(B)(1) reads:

BUYER HAS: 17 (or ___) Days After Acceptance, unless otherwise agreed in writing, to: (i) complete all Buyer Investigations; review all disclosures, reports, lease documents to be assumed by Buyer pursuant to paragraph 10A and other applicable information, which Buyer receives from Seller; and approve all matters affecting the Property; and (ii) Deliver to Seller Signed Copies of Statutory and Lead Disclosures and other disclosures Delivered by Seller in accordance with paragraph 10A.

During this 17-day contingency period (or the timeframe agreed to between the parties), the buyer typically hires independent inspectors to look at the home’s roof, foundation, structure (termites, mold, etc), and any other areas of the home the buyer sees fit. Contact your real estate agent for referrals to trusted inspection professionals.

If any major problems are found, a buyer may then ask the seller to make repairs or may request a monetary credit for repairs at closing – see section 14(B)(2). The seller, however, has no obligation to respond to either request.

Lifting The Buyer’s Inspection Contingency

After the agreed upon inspection period has passed, the seller must request that buyer lift their inspection contingency. If seller does not obtain a contingency removal, buyer’s inspection period remains in effect, “based on a remaining contingency.” See 14(B)(4). This means that technically buyer’s inspection contingency can remain in effect all the way through the deal — meaning buyer can back out and recover any earnest money deposited with escrow.

Sellers, your agent will likely send a “Notice of Buyer to Perform” (NBP) requesting that buyer either remove the contingency or back out of the contract. This will allow you to move on to other back-up offers if buyer fails to adhere to the agreed-upon inspection timeline.

Should I Write a No-Contingency Offer?

Well, that depends. Has your seller already had a professional inspection completed? What did the inspection reveal? Was the foundation adequately inspected? What about the roof? How old is the home? What updates have been recently done by the seller? Were permits obtained for any structural work?

I have represented Bay Area buyers who successfully wrote offers with no contingencies and I have represented buyers whose succesful offers included more contingencies than are typical. No home is the same and I think your offer should reflect your comfort with the home’s condition, your ability to obtain financing (or pay cash), and your overall risk tolerance.

I recommend that buyers do as much due diligence as possible before writing an offer. There is no substitute for being 100% confident in your offer before it is sent on to the seller. This will set the tone for a smooth transaction all the way to the closing table.

 

Posted on June 27, 2019 at 10:49 PM
Carlos Camargo | Category: Buying a House, Credit & Home Finance, Credit & Home Finance, First-time Buyer

Bay Area Real Estate Market Turning to Buyers – www.carlosfcamargo.net

Market Turning to Buyers – www.carlosfcamargo.net

The market is transitioning towards buyers.
After peaking in April, the real estate market in Alameda County has been on a steady down trend.
 
The sales price to list price ratio, or what buyers paid divided by what sellers were asking, was at 111.2% in April. As you can see in the chart below, it has fallen steadily since then and it ended the year at 101.8%.
 
The median sales price for single-family, re-sale homes peaked at $1,005,000 in June. It ended the year at $849,500. The average price peaked at $1,113,911 in April. It ended the year at 944,087. In December, both the median and average prices were lower than the year before. Something that hasn’t happened since March 2012!
 
Sales of single-family, re-sale homes were down 1.6% from the year before. There were 10,134 homes sold in Alameda County in 2018.
 
Condo statistics show similar trends.
 
The sales price to list price ratio peaked in April at 109.2%. It closed the year at 100.3%. That is the lowest it has been since May 2012!
 
The median sales price for re-sale condominiums peaked at $681,000 in July. It ended the year at 620,000. The average price peaked in June at $706,110. It ended the year at $637,327.
 
Condo sales were down 7% from 2017.
Expect these trends to continue in 2019. That is, prices will continue to decline and sales and inventory will increase.
 
The market is transitioning towards buyers.
 
Expect these trends to continue in 2019. That is, prices will continue to decline and sales and inventory will increase.
 
The market is transitioning towards buyers.
 
For assistance in this market, do not hesitate to contact me. If you are thinking of selling, I can provide a free comparative market analysis.
_____
LOOKING TO BUY OR SELL A HOME? www.carlosfcamargo.net
 
#BHGRE #carlosfcamargophd #RealEstate #RealEstateAgent #RealEstateBroker #RealEstateInvestor #RealEstateInvesting #RealEstateLife #RealEstateForSale #RealEstateExpert #Realtor #Realty #Broker #HomeForSale #HouseForSale #PropertyForSale #HouseHunting #HouseHunt #ExpectBetter #BHGRealEstate #BHGReliancePartners #BHGGrandLake #LakeMerritt #bayarea #alamedacounty
Posted on January 27, 2019 at 4:53 AM
Carlos Camargo | Category: Buying a House, Credit & Home Finance, Real Estate Market Update

Buying a home? The first step is to check your credit.

Buying a home? The first step is to check your credit.

Research shows that people who plan carefully for big purchases, like owning a home, are less likely to run into financial trouble later. So if you are thinking about buying a home this year, let’s make a plan. The first step: Check your credit.
 
It’s always a good idea to review your credit reports and scores periodically, even if you’re years away from shopping for a home and a mortgage. If you’re planning to buy a home this year, we recommend checking your credit reports and scores as soon as possible.
 
The better your credit history, the more likely you are to receive a good interest rate on your mortgage loan. Lenders will use your credit reports and scores as important factors in determining whether you qualify for a loan, and what interest rate to offer you. If there are errors on your credit report, you may have trouble qualifying for a loan. So, don’t delay in checking your credit. Review your credit reports and take steps to fix any errors.

 
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LOOKING TO BUY OR SELL A HOME? www.carlosfcamargo.net
 
#BHGRE #carlosfcamargophd #RealEstate #RealEstateAgent #RealEstateBroker #RealEstateInvestor #RealEstateInvesting #RealEstateLife #RealEstateForSale #RealEstateExpert #Realtor #Realty #Broker #HomeForSale #HouseForSale #PropertyForSale #HouseHunting #HouseHunt #ExpectBetter #BHGRealEstate #BHGReliancePartners #BHGGrandLake #LakeMerritt #bayarea #oakland
Posted on January 15, 2019 at 11:52 PM
Carlos Camargo | Category: Buying a House, Credit & Home Finance, First-time Buyer

Choosing the Right Lender: Questions to Ask Before Applying for a Mortgage

5 Essential Questions to Ask Your Mortgage Lender

Let’s face it, it’s much more fun to search for homes online and attend open houses than it is to research your home loan. After all, what’s not to like about house hunting—you get to see beautiful homes and imagine yourself living in them.

As exciting as that is, it’s the financing that hangs most of us up and may prevent you from getting into a home altogether.

If you’re like many homebuyers, you’re not really sure where to start when it comes to your home loan. In fact, a Consumer Financial Protection Bureau (CFPB) survey found that nearly half of homebuyers don’t shop around for a mortgage lender at all—they just go with the first one that comes their way.

Question: Would you marry the first person that came your way based on a single date? Or would you date around a bit to be sure they’re the right one?

You’d date around, of course. Which is what we suggest you do when you’re looking for a mortgage lender—date!

With all that in mind, here are five essential questions you should ask when you interview prospective mortgage lenders—way before touring your dream home. By asking these important questions, you’ll find that you can zero-in on the one that’s right for you.

Ready to get started? Great. Here are the questions:

1. What is your process for preapproval and closing?

Make sure the lender’s timelines line up with your home buying goals. Understand when they will pull your credit score. Don’t open or close any accounts during that time, or take out credit for any other large purchases. Ideally, you should check your own credit score first to review for any errors or issues you’ll need to address that may negatively impact your credit score.

What information will your lender need to preapprove you for a home loan? Ask how long the preapproval will be valid. Typically, it’s for 60 – 90 days and can be updated as needed.

Ask about the lender’s closing process. Where will it take place? Do they work with a particular law office or do they do it in house? Some lenders may offer a closing at your home or even online.

2. How do you communicate with homebuyers?

You never want to be the last to know. Ask how they will manage your loan process and all the steps along the way. Will you have an account representative who will inform you of updates? Do they offer an online system with notifications?  Think about how you like to communicate and what works for your schedule.

3. What will be my down payment requirement?

Your minimum down payment will depend on the type of loan your lender recommends for you. Talk to your lender about what you have saved, how much you’d like to put down and your goals for a monthly payment.

The good news is that 20 percent down is not required today. Several loans today offer a 3 – 5 percent down payment. FHA loans, popular with first-time homebuyers, have a 3.5 percent minimum down payment. And, if you are a veteran or member of the military, you have access to VA loans which offer zero percent down. Most low down payment loans require a minimum credit score of 620.

4. Do you participate in any down payment assistance programs?

There are more than 2,500 homeownership programs available across the country that can help you save on your down payment and closing costs. State and local housing agencies administer a wide range of programs, including grants, second mortgages, affordable first loans and tax credits. They develop and manage the program, review applications and approve lenders who can issue loans with these programs.

Most homebuyer programs have multiple participating lenders. Find out what special low down payment programs and accompanying down payment assistance programs they may offer. Some lenders offer they own proprietary down payment help as well.

Check out the programs available in your market and discuss with your lender and Realtor.

5. What fees will be included in my loan and what fees will be due at closing?

Lender fees will be associated no matter what loan product choose. They include origination fees, the cost of writing the loan and closing costs. Fees are just as important as your interest rate, and there are ways to lower your interest rate with additional fees.

Interest rates today are low and they are determined by the Federal Reserve. You can also lower your interest rate by paying “points.” A point is equal to 1 percent of your loan amount. For example, you might have an interest rate of 5%, but it could be lowered to 4.5% by paying 2 points at closing.

The cost of your loan is determined by several factors, including your loan terms (15 years, 30 years, etc.), your credit score and your loan type. Ask your lender to outline fees based on your personal situation and by different loan options.

According to the Know Before You Owe mortgage disclosure rule, your lender should provide you with the Loan Estimate and the Closing Disclosure to help you understand your fees. The rule also requires that you get three business days to review your Closing Disclosure and ask questions before you close on a mortgage.

Improve your bottom line by shopping around for your home loan and interviewing lenders. Research by the CFPB found that a borrower taking out a 30-year fixed rate conventional loan could get rates that vary by more than half a percent. That could translate into saving thousands on your mortgage.



Food for Thought: Questions to ask any lender

Posted on June 7, 2018 at 6:13 PM
Carlos Camargo | Category: Buying a House, Credit & Home Finance, First-time Buyer

TIP #5 – GOT Realtor? If not, Get REALTOR®!

TIP #5 – GOT Realtor?
If not, Get REALTOR®!

To find the right real estate agent, it helps to understand the difference between a broker, a Realtor, a buyer, and a listing agent. Brokers occupy the top of the real estate totem pole. Some are easy to identify especially in the case of small firms, because it’s usually their name on the “For Sale” sign outside the house. The broker is the person licensed by the state to buy and sell houses. An agent can’t do business without a broker, which is why agents part with a percentage of their commissions. Brokers may also be agents themselves, active in both sales and administration, but generally they provide the management blanket under which agents operate.


A Realtor is a broker or agent who is a member of the Board of Realtors, an organization that follows a code of ethics beyond state license laws. It is realtors who sponsor the Multiple Listing Service to which every real estate agent in the country is beholden for listing or searching prospects. 

 

Once upon a time, all real estate agents worked for the seller. Now they tend to specialize into listing agents, buyer’s agents, and dual agents. A listing agent puts a home for sale on the Multiple Listing Service, and works primarily with the home seller. A true buyer’s agent does not list homes for sale very often and works primarily for buyers. While many agents focus on either listing or buying, there are also agents who split their time between buyers and sellers. These are dual agents. If you are in the market for a house, any type of agent can do the job. The question is which one is most likely to look out for your interests and serve as an trusted adviser throughout the process best.

 

Posted on January 23, 2018 at 4:10 AM
Carlos Camargo | Category: Buying a House, Credit & Home Finance, First-time Buyer

STEP 4 — GET PRE-APPROVED

STEP 4 — GET PRE-APPROVED:
A 12-STEP GUIDE TO BUYING A HOME IN THE S.F. EAST BAY

GET PRE-APPROVED

Before shopping for a home, it is important to know how much you’ll be able to actually spend. The best way to do this is to get pre-qualified for a mortgage.

The process of getting pre-qualified involves providing some personal and financial information to your mortgage lender, such as income and asset info, as well as information for pulling credit.

Your mortgage lender will review this information and let you know how much you’ll be able to spend on a home.

Getting pre-approved is the next step.

Getting pre-approved is more in-depth than getting pre-qualified. During the pre-approval process, you will be asked for documentation which support the information you’ve verbally provided as part of your pre-qualification.

Documentation typically includes W-2s, pay stubs, and bank statements; and may include federal tax returns.

A distinct advantage of completing the pre-qualification and pre-approval steps before looking for a home is that you’ll know in advance exactly how much you can afford.

In addition, getting pre-approved also allows you to move much faster when you find that perfect home. In today’s competitive market, a pre-approval lets the seller know your offer is serious. Not having one can weaken your bid and cause you to lose out to another buyer whose financing is already in order.

GET LEVERAGE WITH A PRE-APPROVAL LETTER 

Play to Win!

Many buyers get frustrated when their Realtor asks if they have been pre-approved.  They think, “all I want to do is look at houses, we can worry about the pre-approval later.”  I can understand your frustration, but let me help explain why the pre-approval process is so important….

1. A Pre-approval Letter shows that you can buy a house

Unless you plan on buying a house for cash, you will need some sort of Financing.  If you cannot obtain the financing, say hasta luego to the idea of buying a home, for now.  There is not much more that is frustrating (to buyers and Realtors alike) than to look at houses for several days only to find out that you cannot obtain financing to buy one.  Therefore, we usually ask for a pre-approval so we can both have reassurance that you can buy a house.

2. A Pre-approval Letter helps define your search

It lets you know what you can spend, so it saves you time and energy from searching for houses that you cannot afford.

Think of the emotional drain of finding the house of your dreams and then the bank says that you cannot afford it.  I would rather you not look at those houses that you cannot afford.  If you can only afford a $400,000 house, we need to make sure you are only looking in that price range.  If you look at too many houses outside of your price range, you will not enjoy the houses in your price range as much.  A Ford Focus never looks as good after you drive a Lamborghini.

3. You’ll have more leverage in negotiations with the seller

Having a pre-approval letter really makes your offer look good to the seller of the house.  They are more willing to negotiate with someone who is pre-approved than someone who isn’t.  Plus, if there are multiple offers on a house, yours will be ranked higher due to the fact that you are already pre-approved.  It is less risky for the seller than looking at an offer from someone who isn’t.

4. A Pre-approval letter is better than being pre-qualified

Many banks will give you an informal estimate of what you can afford, and this is known as pre-qualification.  It is not a statement of fact, but rather an opinion.  Make sure you get an official Pre-Approval letter.  This is a statement of fact, and will hold a lot more weight than a pre-qualification letter.  It takes more work to get pre-approved, but it will save you a lot of time in the long run.

 

 

Posted on January 17, 2018 at 8:41 PM
Carlos Camargo | Category: Buying a House, Credit & Home Finance, First-time Buyer