Rent to Own Homes In Mesa

November 18, 2010 By Leave a Comment

As a homeowner you may have concerns about what options you have if you need to move and you know that the market is slow and you may have trouble selling your place. While this is a valid concern there are options.

Of course there are the short sale, foreclosure options, but I’m talking about something different – rent to own.

Rent to own homes come in two varieties: 1. you have a home and 2. you want to buy a home.

  • First I’ll cover you as a homeowner.

If you need to sell your home and can’t for whatever reason, you may be able to “sell” your home over time to someone who wants to buy it. In other words, you allow someone to make payments to you with the intention that they will complete a full purchase of your home after a designated period of time where this is a full deed transfer and your mortgage gets paid off with their mortgage or cash payment.

In the case where you want to sell your home in a rent to own situation you will need to be very careful about how you set the deal up so that it will work for both you and the home buyer. If you don’t price the home properly, if you are upside down on the mortgage, or if the home buyer doesn’t get their mortgage approved you may have problems on your end if your legal paperwork isn’t set up properly.

It is my suggestion that if you want to go this route then you get help to starting looking at the process and then ultimately get a real estate attorney involved to draw up the legal paperwork to make both you and the buyer are covered.

  • Next you as a home buyer.

Let’s say for whatever reason your credit is shot, or you can’t qualify for a mortgage you consider buying a home through a rent to own agreement or a lease purchase contract. Maybe you have been told by a loan officer that you need some time to pass to help your credit scores improve – then one option you may have is to start a rent to own agreement.

If you structure your legal paperwork correctly and handle the money that you pay the home owner correctly then you will have a very strong credit reference to qualify for a mortgage in the future. You may also be able to qualify to refinance the home into your name versus a purchase mortgage if your paperwork is setup correctly.

Rent to own homes are great for home buyers who need to improve their credit and want to live in a home versus an apartment, or that they want to start getting some of the financial benefits of home ownership that doesn’t come with renting.

It is important to get guidance no matter what because if you are trying to sell your home and you don’t set the deal up correctly you could be stuck and vice versa if you are trying to buy a home on a lease purchase and you don’t do it correctly your mortgage application in the future might not get approved.

If you live in Mesa or Gilbert and you want to explore a rent to own home I can help you. I want to cover what is a rent to own home so that you know what I’m writing about and what help I can provide you with.

Filed Under: Financing Information Tagged With: , , , , ,

Home Buying in Mesa – Gilbert Home Buying in 2011

November 17, 2010 By Leave a Comment

Quite often I get asked by Mesa or Gilbert home buyers that I’m working with, or tire kickers looking to find a real estate to work with, “when in the process they should speak to a lender about getting a mortgage approval?” My quick answer is almost always – “now before we start working together.”

“Why?” You may ask.

Well, we’re all busy people and we need to know right off the bat what we’re dealing with in terms of your finances. Now, the old school was that we could sit down and talk about your finances to do a quick pre-qual to see where we should start shopping for home. But, in the new school of today’s mortgage guidelines it is very important for you (or any potential home buyer) to visit with a loan officer (I recommend that you talk to at least 3) to get a real pre-approval on your mortgage.

The pre-approval process gives you the information and confidence you need to shop for homes in your price range with the monthly payment you can afford and are comfortable with. During the pre-approval process, a mortgage lender will look at your credit report, your bank statements and pay stubs, your rental payment history or mortgage payment history.

In checking these items things come up that may surprise you that you may have to get resolved or explain that may take some time to work through. This is especially true when it comes to credit reports and other situations that may affect your credit or income.

You may need some longer lead time to get things resolved – perhaps up to 6 maybe even 12 months. In general though, I have seen many things get resolved over a 1-3 month time frame. So if you are looking to purchase a home in Gilbert or Mesa sometime in early to mid 2011 – now is the time to get in touch with a lender (or three) to see what you are pre-approved for.

Filed Under: Financing Information, Mortgage Guidelines

Better Credit Scores Get Better Mortgage Rates in Mesa and Gilbert

November 2, 2010 By Leave a Comment


Mesa Mortgage Interest Rates and rates for Gilbert home buyers have been falling since early-April 2010. Whether you’re looking to refinance or buy a home, however, know that not everyone will qualify for today’s low rates.

Mortgage approvals are primarily based on good income, good equity and strong credit, and, without all three, the best rates of the day remain out of reach. Now, you can’t always ask for a raise and equity is a function of the housing market, but you can do something about your credit score.

In this 4-minute segment from NBC’s The Today Show, you learn some credit basics to help propel your score higher:

  • There’s no “quick fix” for credit. Time + Good Credit Behavior = Better FICOs.
  • Pay every bill when it comes due. Even one late payment can damage your score.
  • Don’t close old credit cards

Also among the segment’s advice is to stop worrying about whether rates have bottomed. Refinance today if it makes financial sense. Then, if, by chance, rates fall in the future, just refinance again.  Don’t be greedy, we’re told.

Filed Under: Credit Scoring, Financing Information, Mortgage Rates Tagged With: , ,

Buyer Beware – Homeowner Beware About Paying Upfront Costs

October 13, 2010 By Leave a Comment

Are you looking for a mortgage company to work with? If so, I have a brief caution about starting the loan process with anyone and this comes from an interaction I had with one of my clients who had bought a house from me a while back and was now going to take advantage of the very low interest rates to refinance his mortgage.

I asked him to describe the process he was going through and he started with the mortgage company he was thinking about using wanted an upfront loan application fee to get started. At that point, I raised my hand and told my client to stop talking to that particular mortgage company. Instead I suggested that he either contact one of the very competent loan reps I know from Mesa and the East Valley, or continue to shop for a mortgage company who didn’t want to collect an upfront fee.

It is not necessary for a mortgage company to collect an upfront fee to take a mortgage application from you to get you pre-approved. With all the fraud cases running around, not only with mortgages, but with loan modifications too, I always recommend to my clients who ask – don’t pay an upfront fee to a mortgage lender to get a prequalification or even a pre-approval. Once you get to the point of needing to get an appraisal on your home, then you are going to get into a cost.

If you have doubts about the value of your home give me a call. I’m not an appraiser but I can assess the possible values of your house to help you determine what type of refinance program when you speak to your loan officer again. There are a few different types of refinancing programs depending on your home’s value respective to your mortgage balance.

For a home valuation in Mesa please contact Kay Wood

Filed Under: Financing Information

Using Retirement Money to Buy a Home

September 24, 2010 By Leave a Comment

If you talk to just about anyone in the mortgage and real estate industries right now, most first time home buyers are having trouble coming up with enough money to cover their down payment and closing costs as they try to buy a home.

As such, there are many places to look for money and assistance: down payment assistance programs, first time home buyer programs, non profit housing counseling agencies, employer programs, parents, relatives, friends, and even retirement accounts like Roth and Traditional IRAs.

IRAs, if you have them, can be a great source of money for down payment and closing costs. As of 1997 and the Taxpayer Relief Act, Americans who have either traditional or Roth IRAs, or both, can tap into them without penalty in the case that they are a first time home buyer buying their first home. There is a cap on this withdrawal of $10,000 so use it wisely.

Not everyone in the financial world will agree with me about this, but in some cases it may work to use a little bit of your saved retirement money to help you purchase a home.

I wouldn’t go it alone on this decision however. If you have a financial planner – which I am not – I would give them a call and schedule some time with them discuss what you are thinking of doing.

If you don’t have money set aside in an IRA and you are young – say high school age and working, you may want to chat with your parents about having them help you set up an IRA so you can start saving for retirement and possibly a home. You will need to have a job to set one up – but your parents can help you put money into it. Setting this account up early in life can help you build a sizeable nest egg as you grow older which would give you something fall back on if you needed it in the future.

Filed Under: Financing Information

Mortgage Rates in Mesa AZ – A Rocky Ride

September 20, 2010 By Leave a Comment

Sometimes I get asked what do I think rates are going to do and I have to sit back and think for a minute – how do I answer this question without sounding like I’m trying to sell something versus providing real value to the person asking me the question.

Right now, as of September 2010, mortgage rates are the lowest that I can remember – which is going back quite a few years – no I’m not going to say how far back, but let’s just say at least 20 years…

With low rates home buying is an attractive proposition and when coupled with low home prices home buying certainly hasn’t been this good since the early 2000′s. But, while buying is good, it is not necessarily for everyone. Please see: Buy or Rent: is it right for me?

There are a lot of factors that go into what mortgage rates are going to do. I am no expert so I leave the technical parts of what will mortgage rates do up to my mortgage lenders. What’s happening right now however is that those that watch rates and act on rates (Wall Street Investors) are grappling with the state of U.S. economy and unable to discern whether it’s growing, or slowing. With this and other information like retail sales, consumer confidence, unemployment/employment figures and other federal economic reports showing conflicting information, mortgage rates have been dancing.

What is important to consider though is that with rates and housing prices as low as they are, worrying about rates going lower shouldn’t be that much of a consideration if you are a serious home buyer or home seller. If you can’t afford a home in today’s market with 4% interest rates on lower priced homes, perhaps owning a home isn’t right for now. If you are serious and qualified, a .125% change in rate isn’t going to make that much difference to you.

Therefore, if you haven’t already, it may be time to call your loan officer for a refinance or to get pre qualified to buy a new home. Rates could certainly fall further, but they’re looking more likely to rise. Give me a call to start your Mesa AZ home search.

Filed Under: Financing Information Tagged With: , ,

Escrow Taxes And Insurance In Arizona – What Should I Do?

August 3, 2010 By Leave a Comment

Escrow schedulingIf you own a home in Mesa Arizona, or anywhere in Arizona for that matter, if your responsibility to pay your real estate taxes and homeowner’s insurance. The ramifications of not paying your taxes could be that you lose your home in a tax sale (proceeds are used to pay your back taxes). If you don’t pay your homeowner’s insurance, your mortgage company can force the issue with tacking on extra fees and a new policy which if you don’t pay could eventually lead to you losing your home in a foreclosure.

Another outcome of not paying your taxes could be that you lose your home to foreclosure because that would be a breach of your mortgage contract – this is also the case just mentioned if you don’t pay your insurance (breach of mortgage contract). When you qualify for a mortgage and buy a home, the mortgage documents you sign actually require you to agree to pay your real estate taxes and homeowner’s insurance in addition to paying the mortgage principal and interest.

As a homeowner, you have some choice about how you manage your real estate tax and insurance bills.  If your mortgage amount is less than 80% of your home’s sales price, then you can choose to pay your real estate taxes and insurance from your own bank account when the bills come due, or you can choose to pay 1/12 of the annual bill to your mortgage servicer each month, and then let your servicer pay the bills on your behalf when they come due.

Your mortgage servicer, in most cases, is the company that handles your mortgage payment on behalf of your mortgage company. They take your payment and split it up to pay all the folks who get paid whenever you make your mortgage payment.

If your mortgage is over 80% of your home’s sales price, or value, then you will have no choice in the matter, you will be escrowing your taxes and insurance – meaning your monthly mortgage payment will consist of a principal, interest, tax and insurance payment.

Mortgage companies and mortgage servicers prefer that your taxes and insurance are escrowed — it reduces two major lender risks:

  1. That the home’s real estate taxes go delinquent and are sold to a third-party
  2. That the home endures catastrophic damage during a lapse of insurance coverage

Typically, if you choose to escrow your taxes and insurance you will get a lower interest rate and/or closing costs. This is because lenders often charge a premium to “waive escrow” (i.e. pay their own taxes and insurance). Escrow waiver fees vary between banks, but can range up to half-percent of the amount borrowed. The larger the loan, the stiffer the penalty in dollar terms.

Choosing to waive escrow can also raise your mortgage rate by up to 0.250 percent.

If you’re unsure whether escrowing is right for you, talk to your loan officer and/or financial planner. There’s good reason to go either route depending on your profile.

Filed Under: Financing Information Tagged With: , ,

How To Refinance An Underwater Mortgage

March 12, 2010 By Leave a Comment

Making Home Affordable logoThe Federal Housing Finance Agency has extended the government’s Home Affordable Refinance Program by 12 months.

HARP’s new end date is June 30, 2011.

Originally known as Making Home Affordable, HARP aims to help Arizona homeowners refinance their mortgage who may otherwise be ineligible because of falling home values.

There are 4 basic HARP criteria every borrower must meet:

  1. The existing home loan must be guaranteed by Fannie Mae or Freddie Mac.
  2. Your home must be a 1- to 4-unit property
  3. You must have a perfect mortgage payment history going back 12 months. No 30-day lates allowed.
  4. Your first mortgage balance must be 125% or less of your home’s market value

If you’re not sure whether Fannie Mae or Freddie Mac back your mortgage, you can look it up. Fannie’s website is http://www.fanniemae.com/loanlookup; Freddie’s is http://freddiemac.com/mymortgage.  If you don’t locate your loan on either website, your mortgage is backed by a third-party and is not HARP-eligible.

For homeowners that meet HARP’s criteria, there are some underwriting details of which to be aware.

First, if your original mortgage does not require mortgage insurance, your HARP mortgage will not require it, either — regardless of your new loan-to-value.

Second, all HARP refinances require income verification. It doesn’t matter if your original mortgage was a stated income or no income verification loan. You should expect to produce 1040s and W-2s for your HARP refinance and asset statements, too.

And, lastly, second (and third) mortgages may not be “rolled in” to a new first mortgage loan balance. Junior lien holders must agree to remain in a junior lien position, regardless of combined loan-to-value.

There is a thorough HARP FAQ section on the government’s website, but it’s for general questions only. For specific Home Affordable Refinance Program information, first make sure you’re program-eligible, then pick up the phone to call your loan officer.

HARP is complex enough that you’ll want to talk with a human before taking a proper next step.

Filed Under: Financing Information Tagged With: , , ,

Rising Mortgage Rates Linked to Job Numbers

March 4, 2010 By Leave a Comment

Unemployment Rate 2008-2010Conforming and FHA mortgage rates in Mesa, Arizona have improved recently, but that could all change with the release of the Non-Farm Payrolls report.

Non-Farm Payrolls is the official name of the government’s monthly jobs report and, given the fragile state of the U.S. economy, Wall Street will be watching it closely.

Jobs are an important part of the nation’s recovery. Among other concerns, unemployed Americans don’t spend as much money on goods and services, and are more likely to default on a mortgage. This retards economic growth and increases the potential for foreclosures.

When jobs numbers worsen, therefore, it follows that economic projections worsen, too.

Poor employment figures draw money away from the stock markets and into less-risky bond markets, including mortgage-backed bonds.  Mortgage rates improve (get better, drop, go lower) as a result. Conversely, when jobs numbers improve, stock markets gain and bond markets worsen.

Analysts expect that job numbers will continue to fall.

The Bureau of Labor Statistics press release usually hits roughly an hour before mortgage pricing will be available to consumers. If you’re worried about rates rising on the heels of a strong jobs report, therefore, be sure to get your rate lock in today instead. If you wait, it may be too late.

Filed Under: Financing Information Tagged With: , , ,

Home Buying Tax Credit Deadline Approaching Soon

March 3, 2010 By Leave a Comment
Proud New Homeowners

Proud New Homeowners

The Home Buying Tax Credit that has helped a lot of families buy a home in the past two years is slated to expire at the end of April 2010. In order to qualify for the tax credit (either $8000 for first time home buyers or $6500 for repeat buyers) you must have a signed executed contract by April 30, 2010 and your escrow must close by June 30, 2010.

How to get mortgage interest rates.

Filed Under: Financing Information Tagged With: , , ,
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