If you’ve filed for bankruptcy, if you are making payments to your Chapter 13 bankruptcy, or your bankruptcy has been discharged, you may be wondering what it means for your ability to get a home mortgage. Fortunately, it’s still very possible to get a mortgage after bankruptcy with the right preparation and knowledge. Knowing what to expect and how to prepare can help you make sound decisions during the mortgage process. In this article, I will explain the steps you need to take in order to get a home mortgage after bankruptcy. We’ll discuss everything from improving your credit score to getting pre-approved and finding the right lender. With the right preparation and guidance, you can be well on your way to getting a home mortgage after bankruptcy, possibly during your bankruptcy!
When you file for bankruptcy, your ability to get a mortgage is greatly limited. Bankruptcy is specifically designed to allow a debtor to reorganize and get back on their feet financially. It’s intended to be a temporary fix, not a permanent solution. Like any legal process, bankruptcy’s main goal is to allow you to get your financial house in order and put your financial life back in order. Making the effort to get a mortgage after bankruptcy is a great way to get back on track. After bankruptcy, your credit is seen as “damaged” by mortgage lenders, mortgage guidelines, and Underwriters. Credit scores and credit history are used by lenders to determine your ability to be approved, your interest rate and mortgage products. An overly low credit score can lead to higher interest rates, higher monthly payments, and possibly not being able to be approved for a mortgage. Before you begin the mortgage process, you should look at and analyze your credit score and credit make up. Lenders are going to be looking to see if you have re-established credit, really, lenders will want to see that you have current trade lines with some history of repayment. Lenders will want to see how you are handling that credit after your bankruptcy, keeping your balances low, and ensuring no accounts are reporting late payments.
Every mortgage program has their own guidelines and rules for how long you have to wait before you can be pre-approved for a mortgage. Why do you have to wait? When I was a mortgage underwriter I was told that we don’t care that a borrower had to have a bankruptcy to improve their financial situation, we care about whether they learned from having to have that bankruptcy. Time allows for Underwriters to make that decision as to how you are and will handle your credit.
How long you have to wait will depend on what bankruptcy you have used or you are currently in, Chapter 7 or Chapter 13 bankruptcy.
For a Chapter 7 bankruptcy you will have to wait from 2 to 4 years from the DISCHARGE DATE depending on the mortgage program, FHA and VA mortgages requires a 2 year wait, the USDA mortgage programs requires a 3 year wait, and for the most part both Conventional mortgage programs require a 4 year wait.
Of the two Conventional mortgage programs Freddie Mac is a bit more lenient. If your bankruptcy is reflected on your credit report and we get an automated underwriting approval then there is no waiting period.
For a Chapter 13 Bankruptcy, it gets very interesting. You will need to wait 12 months from your FILING DATE for FHA, VA, and USDA as long as you have made your last 12 bankruptcy payments in full and on time. Making it possible to get a mortgage approval while you are still paying on your Chapter 13 bankruptcy.
Also, we will need to get permission from the Court to allow you to get a new home and mortgage. With a Conventional mortgage, it is a 2 year wait from the discharge date or 4 years from the dismissal date.
Once you have examined your credit scores, you want your scores to be in the 600 credit score range especially if you are considering FHA or VA. If you want to consider USDA or Conventional you will want your scores to be nearer to 640. The credit scores you will need will depend on the lender and their overlays to the guidelines and the mortgage program. Once you are sure you have re-established your credit and there are no late payments on this credit, and you have cleaned up any mistakes on your credit report, you are ready to get pre-approved for a mortgage. Pre-approvals can be beneficial for a number of reasons. It gives you an idea of your likely mortgage payment, which is helpful for budgeting. Being pre-approved will allow you to know how much of a sales price you should be considering. Being pre-approved will simply provide you with peace of mind. It also lets your real estate agent and the seller know that you’re likely able to get financing, which can help speed up the home buying process. Pre-approval gives you an advantage over other borrowers.
Now that you know what to expect and what documents to assemble, it’s time to figure out what your monthly mortgage payment will be. This is a critical part of the mortgage process and will have a big impact on your loan terms and amount. Your monthly payment is based on a number of factors, including the amount of your loan amount, loan interest rate, and loan term. To figure out your loan payment, you’ll need to consider all these factors and make a realistic estimate. The good news is there are a number of ways to estimate your payments. You can use a mortgage calculator, discuss it with a lender, or simply make an educated guess. It’s important to use a realistic method and not over-inflate your payment estimate.
Know your budget and have a total house payment in mind that works within your budget. Know what that maximum house payment is that you will not go a dollar over, this will help you and your loan officer establish the maximum sales price that you can be approved for and still not be house poor.
In some cases, lenders may require you to obtain mortgage insurance. This insurance protects the lender in case the borrower doesn’t repay the loan. It comes with a cost, which is included in your monthly payment amount. Although it may be required by your lender, you should still carefully consider this additional cost before choosing to obtain mortgage insurance. Mortgage insurance is designed to protect lenders in the event of a loan default. A loan without this insurance would result in a lower monthly payment amount. However, it’s important to note that the insurance is only payable if you’re late on your payments.
Finding the right lender is crucial in the process of getting a mortgage after bankruptcy. There are a number of factors to consider when choosing your lender, including their mortgage knowledge and experience, ease of loan application process, can they do manual underwriting, and do they have any guideline overlays. Make sure to look around and ask a lot of questions. You may be able to find better options and interest rates as you look for the right mortgage lender. Once you’ve found a lender that you’re comfortable working with, make sure to clearly communicate your needs. Know what you’re looking for, including how much you’re willing to borrow, how much you’re able to put down, and what type of loan you’d like to use. If you’re unable to fully explain your needs, a lender may push you towards a loan that isn’t a good fit. A home buyer that does their HOME WORK will be appreciated by the mortgage loan officer they work with.
Before and after the mortgage pre-approval you will be asked for your filed bankruptcy documents, all pages. If your bankruptcy has been discharged you will be required to provide the Discharge Letter provided from the court.
If you are in the midst of paying your Chapter 13 you will be asked to get a letter from the Trustee involved for permission for you to purchase a new home. Also, you will be asked to document that you have made the most recent 12 or more payments to the court on time. These documents and then the standard documents for a mortgage pre-approval application, that will include paycheck stubs, W2 or 1099 forms, bank statements, and possibly tax returns. Your loan officer will know what they want and need.
When you’ve finished the mortgage process and have your loan documents in order, it’s time to find a new home. This is a crucial step in the process and can have a big impact on your next new home. Hiring a real estate agent to be your buyer’s agent will allow you to shop around and compare homes. You can also use their expertise and contacts to help you find the perfect new home. Hiring a real estate agent can be beneficial for a number of reasons. They can help you navigate the home buying process, make comparisons between houses, and help you find the perfect home on your budget. They can also help you negotiate on prices, concessions, and get the best deal possible.
Congratulations! You’ve completed the mortgage pre-approval process and are ready to find your new home. As you finalize the purchase, make sure to include all these steps in your mortgage closing checklist. - Get a home inspection. The home inspection is helpful for identifying potential problems with the home, and save you from making costly decisions. - Get your home insurance policy in place. Make sure to have your homeowners insurance in place before closing on your new home. Get quotes as home owner’s insurance can vary a lot between insurers. Start with the insurer that has your car insurance as they will offer a multi-policy discount. Once you have found the best quote, put it into place. Get your mortgage documents to your mortgage lender as soon as possible. The more you are ready the faster you can close on your next new home.
You have gone through or you are currently in a bankruptcy? Are you looking to purchase a new home? Don't let bankruptcy stand in the way of realizing your dream of home ownership. With the right guidance, you should be able to get a mortgage after or during bankruptcy. I specialize in helping home buyers who are in Chapter 13 or have had a bankruptcy discharged get a mortgage sooner. I can help you can get the home of your dreams without having to wait years after bankruptcy. Take the first step today and contact me to find out how you can get a mortgage after or during bankruptcy. I will guide you every step of the way towards a new home and a brighter financial future.
If you want to make an appointment to talk here is a link to my calendar where you can schedule a convenient time to talk, https://calendly.com/bobrutledge. If you would like to learn more follow this link to my website to learn a lot more, https://www.bobrutledge.com/mortgage-after-bankruptcy
Down payment assistance programs are programs that provide financial aid to home buyers who are struggling to save enough money for a down payment to purchase a home. These programs may be offered by state or local governments, non-profit organizations, or other groups. They can take the form of grants, low-interest loans, or a combination of both. Eligibility for these programs can vary, and may be based on factors such as income, location, or first-time home buyer status. In some cases, home buyers may be required to complete a homebuyer education course or meet other requirements in order to qualify. Some program also have income limit requirement to be eligible, it's important to check the specifics of the program you are looking into.
Overall, down payment assistance can make homeownership more affordable and accessible for people who might not be able to purchase a home without assistance. It's important to check if there's any program available in your area and what is the requirements to be eligible for it.
It is also important to note that not every program will be suitable for everyone and it's important to consult with a professional and compare the different options before making a decision.
When you find the program you are interested in, make sure you thoroughly read the eligibility requirements and understand the application process. You also want to check if the program is still active, funded and/or open to new applicant as some program have limited fund and open on specific time window. This is when an experienced and knowledgeable mortgage loan officer will pay dividends.
It's also important to keep in mind that some down payment assistance programs have income limits, and you may need to meet certain requirements such as completing a homebuyer education course, or having a certain credit score, it's important to check the specifics of the program you are looking into.
Down payment assistance can make buying a home more affordable by helping to reduce the amount of money that a home buyer needs to save for a down payment. By providing assistance with the down payment, these programs can help home buyers purchase a home that they may not have been able to afford otherwise.
Down payment assistance can make buying a home more affordable in several ways:
In general, down payment assistance can help home buyers bridge the gap between what they can afford and the cost of buying a home. It can also make homeownership more sustainable by reducing monthly payments, closing costs and overall costs of purchasing a home. However, it's important to check if there's any program available in your area, and what are the requirements to be eligible for it before starting the process.
The Missouri Housing Development Commission (MHDC) is a state agency that works to create affordable housing opportunities for Missouri residents. They offer a variety of programs to help first-time homebuyers, move up home buyers, and low- to moderate-income families purchase a home. Some of the programs offered by the MHDC include:
First Place: This program provides down payment and closing cost assistance for first-time homebuyers, and offers competitive interest rates and reduced mortgage insurance requirements. There is a Cash Assistance portion of this program that will provide up to 4% of your loan amount to be used for your down payment and/or closing costs. There is a non-cash assistance portion that will provide a lower than market interest rate when you provide your own down payment.
Next Step: This program was built for move up home buyers AND first time home buyers that have higher income levels than what the First Place guidelines allow. Next Step provides down payment and closing cost assistance, and offers competitive interest rates and reduced mortgage insurance requirements. There is a Cash Assistance portion of this program that will provide up to 4% of your loan amount to be used for your down payment and/or closing costs. There is a non-cash assistance portion that will provide a lower than market interest rate when you provide your own down payment.
MCC: The Missouri Homeownership Preservation (MHP) Tax Credit program, also known as the Missouri Homeownership Opportunity (MCC) program, provides a tax credit to first-time homebuyers who purchase a home within the state of Missouri and meet certain income requirements.
Minimum required credit score for MHDC is 640 or higher.
There are income limits for each program depending on household size and area.
Limited to primary residences only, single family, 2 family, condos, and manufactured homes.
Purchase price limits.
Cash assistance will be in the form of a second mortgage. The second mortgage will be forgiven if the borrower stays in the home/loan for ten years. The second mortgage will diminish after year five by 1/60 every month until year ten when it will be completely forgiven. No additional monthly payment required.
It's important to note that the MHDC program are not direct loans, but rather they are programs that work in partnership with participating and approved lenders. Not all lenders offer or provide the MHDC Down Payment Assistance programs.
The St. louis area is a hot bed for down payment assistance, along with having MHDC available to all home buyers in the area there is down payment assistance program operated through St. Louis County that is utilized by St. Louis City, St. Louis County, Jefferson County, and St. Charles county to provide down payment assistance for home buyers.
You will work hand in hand with your lender and one of several providers of the down payment assistance. The providers are, Beyond Housing, Better Family Life, The Housing Partnership, or NECAC.
Available Down Payment Assistance Per Household: (as of this writing)
Note: It is possible to stack this Down Payment Assistance Program on top of MHDC to provide a larger down payment for your new home.
The other areas of Missouri do not have the wealth of down payment assistance programs as in the St. Louis Area. There will always be available the First Place and Next Step Down Payment Assistance offered through MHDC. There are some smattering of local down payment assistance programs available in Columbia, Blue Springs, Independence and in the Springfield area but many times these programs are lacking funds, come and go, or the MHDC program is the best available.
Some lenders have their own in-house down payment assistance, many do not have down payment assistance program at all. One of the better in-house programs is offered through the CHENOA Down Payment Assistance program.
The Chenoa Fund Down Payment Assistance Program (DPA) is a second mortgage loan for eligible borrowers who meet income, purchase price and other program guidelines, as established by HUD and the Chenoa Fund. The DPA is intended to assist borrowers who lack the funds necessary to make a conventional down payment. The Chenoa Fund DPA is available to first-time homebuyers and repeat homebuyers who meet certain income and purchase price limits. The program is offered through participating lenders, and borrowers are required to complete a homebuyer education course as a condition of program eligibility.
The Chenoa Fund Down Payment Assistance Program has certain rules and guidelines that borrowers must meet in order to be eligible for the program. Some of these include:
Purchase price limits: The purchase price of the home must fall within certain limits, as established by the program.
Income Limits
First Time Home Buyer or Repeat Home Buyer
Primary Residence Only
Minimum of 600 Credit Score for all borrowers
Home Buyer Education may be required
Single Family, Condo, Manufactured, or townhouse
It's important to note that these rules and guidelines may vary depending on the specific program and the participating lender, so it's a good idea to check with a participating lender for the most up-to-date information.
I have have been a mortgage loan office since 1995 and I specialize in helping home buyers with down payment assistance, purchasing a new home with little to no money out of pocket, and making that next home purchase more affordable.
I would welcome the opportunity of speaking with you to answer all your questions, feel free to email me at bob@bobrutledge.com or if you would like to set up an appointment follow this link LET'S TALK.
If you would like to take about 3 minutes of your time to fill out my Down Payment Assistance Pre-Qualification I will gladly respond within 1 to 2 business days with a complete analysis of what down payment assistance programs are available to you, what mortgage programs are best for what you want, and how to make it all work for you. Click on this link GET DPA and I will have answers to you very soon.
$5,000
Jefferson County
City of Florissant
$6,000
St. Louis County
$10,000
St. Charles County*
City of O’Fallon
The housing marketing in the St. Louis Missouri area is getting more and more difficult for home buyers, the most recent statistic I saw for certain areas of St. Charles and St. Louis County showed homes on the market for only 17 days! We are starting to see Open Houses that have dozens of potential home buyers attending and multiple offers on homes their first day going onto the market. Speed, Agility, and paying very close attention to new homes coming to market is most new home buyers best methods to stay ahead of the game. But, many home buyers have a secret weapon, a weapon that allows them to consider ALL homes on the market creating a better home buying experience.
THE FHA 203K YOUR SECRECT WEAPON
The FHA 203k is a renovation mortgage program that will provide you with the funds to not only purchase your new house but also fix it up to make that house your home. The FHA 203k is becoming the secret weapon of choice for many first time home buyers because it helps them consider every house for sale in the area or location they consider their first choice. No longer do they have to settle for a house, no longer do they have to turn away from a house that needs some repairs or even a lot of repairs, and no longer do they have to scratch off AS IS houses.Imagine finding that near perfect house, it is located in the area you want, the house is what you want, it is close to work, good schools, and play, the it has more rooms than you need, it is everything you want except..... The FHA 203k will fix that except for you and fix it to what you want!Because you are not competing for a house that many others want you have more ability to negotiate the sales price, negotiate closing costs, and get more home for possibly less money. The FHA 203k should be your secret weapon if you are looking for a house in the St. Louis and St. Charles area or even nearby.
The FHA 203k is just one of many renovation home loans, if you would like to learn more about the FHA 203k in St. Louis Missouri, I have a lot of information at my website, https://www.bobrutledge.com/fha-203k-renovation-St.Louis.Another option is the conventional counterpart to the FHA 203k, the Fannie Mae HomeStyle Renovation Mortgage, there are many similarities to the two programs, the biggest differences is that the HomeStyle has a higher loan limit, requires a little more for down payment, and limits the renovation costs. Go to https://www.bobrutledge.com/HomestyleRenovation and learn more. If you are eligible for a VA mortgage, thank you, there is a VA Renovation Home Loan that can help tweak that house you are looking at. The VA Renovation Mortgage will not allow for anything really major and limits you to $35,000 in renovation costs but it can help. If you would like to learn more go to https://www.bobrutledge.com/VA-renovation-mortgageAt my website you can read about the Renovation Equity Plan and how a renovation mortgage is helping new home buyers build instant equity in their new home. There is a Renovation Mortgage FAQ that should help to answer all your questions.If you are having troubles finding that new home or you are about to enter into the St. Louis and St. Charles home market you need the FHA 203k as your secret weapon. I would welcome the opportunity to work for you as your mortgage loan officer, I can get you approved for any mortgage plus any renovation mortgage, go into your home search with more.
My name is Bob Rutledge, I closed my first FHA 203k renovation mortgage in 1998 and I have closed 100s of renovation mortgages in my career. I have been certified as a FHA 203k and Renovation Mortgage Specialist because of my experience and knowledge. New American Funding is a national lender and one of the best renovation lenders in the market, out offices are located throughout St. Louis and St. Charles Missouri. Visit me at https://www.bobrutledge.com/Home
Should You Take Out a HELOC to Pay Off a Mortgage?
Those who understand the basics of a HELOC, or home equity line of credit, tend to sing its praises. They know just how useful those loans can be when you’re trying to remodel your house or have unexpected expenses. But what about using a HELOC to pay off a mortgage? Is this even a good idea?
Since a HELOC is a loan that uses the equity in your house as collateral, it makes sense that you’d want to use it to pay off your mortgage. That would ideally leave you with one single loan. However, there are several pros and cons here that need to be gone over before.
Heloc Vs Mortgage
Before we can start going through the pros and cons of using a HELOC to pay off a mortgage, we first need to explain the differences between these two loans. Although there is no clear winner when comparing HELOC vs mortgage, as both have their good and bad points, both of these loans are quite different. A HELOC is a loan that’s taken out on the equity in your home. This is the amount that’s available when you subtract the amount that you owe on your mortgage from the overall worth of your home. A mortgage, on the other hand, is a loan that’s taken out in order to purchase or refinance a home. Those funds are set into a fixed loan for that single purpose. This makes it quite different than a HELOC, which is designed kind of like a bank account in that you can use the money, pay it back, and then use it again. For this reason, some people wonder if they could use a HELOC to pay off a mortgage. You can always check out our site for these types of tips, or a reputable HELOC information site to keep up to date. The concept of going down to this one single loan is quite appealing. Before you start to contemplate HELOC vs mortgage, it’s important to consider the following points.
How Much Is Left On Your Mortgage?
One important thing to think about before you make your HELOC vs mortgage choice is whether or not you have the funds available on your HELOC in order to pay off your mortgage. Plus, you need to understand that the closer you are to paying off that mortgage, the more your payment amounts go straight to the principle. However, if the overall worth of your home has gone up considerably and your mortgage is fairly small – yet has years left to go – then you could use a HELOC to pay off a mortgage.
Are You Eligible for a Heloc?
Another factor is whether or not you’re eligible for a HELOC as far as your credit is concerned. If you received your mortgage more than seven years ago and have damaged your credit rating since then, you may not be able to take out that additional loan. In this case, then you clearly won’t be able to use a HELOC to pay off a mortgage. This leaves the mortgage as the best option when weighing the HELOC vs mortgage loans.
Other Pros and Cons
On top of the responses to those two questions, there are some additional pros and cons that must be considered when trying to choose whether or not to use a HELOC to pay off a mortgage. Let’s work through them one by one.
Pros
Cons
The Decision
When trying to choose whether or not to use a HELOC to pay off a mortgage, it’s really up to you. There are a number of different factors, some of which can help you choose which is the most important to pay off first – HELOC vs mortgage. Both have their own sets of pros and cons, although the HELOC is much more flexible.
Hi, I am Bob Rutledge with New American Funding a progressive and customer oriented Mortgage Company. I have been a Mortgage Loan Officer for over 2 Decades, I have closed 1000s of mortgage, I have experience as a Mortgage Underwriter too. I specialize in First Time Home Buyer Programs, Renovation and Construction Mortgages, and knowing the best mortgage options, programs and guidelines to provide the best to my clients. I concentrate on making more options available to home buyers! When we work together you will find that I answer all questions, sometimes before they are asked. I prefer to be available to you as much as my family and life will allow, I am accessible to you via my cell 314-913-9678, text, or email bob@bobrutledge.com, or you can visit my website at www.bobrutledge.com.
THE RENOVATION MORTGAGE EQUITY PLAN
How you can purchase a new home with the lowest down payment possible and greatly increase your equity while making your new house your home!
Are you a FUTURE HOME BUYER? Are you looking to purchase a house that will provide you with instant equity? It is what every new home buyer wants! It is possible to find that house if you search hard and long! But, you can shorten that search with the Renovation Mortgage Equity Plan.
Have you been looking at the houses on the market and feeling a bit let down? In today's current housing market every day there are home buyers purchasing a new home and settling for less than what they wanted. Why is that? The current market of available homes is made up of mostly very dated homes, foreclosures, distressed properties, aged and outdated houses! That perfect home is very difficult to find if not near impossible.
Here is the scenario that many home buyers are finding, they are first pre-approved by their mortgage loan officer for what in most cases is a standard 30 year fixed rate mortgage, FHA Conventional, VA or USDA. These are all great mortgage program, you are pre-approved for what you asked for or what your mortgage lender provided you.
Then the home buyer goes looking at and for the houses in the areas they prefer to live, what they find is not what they had hoped for. Sure, the houses are in the neighborhoods, school districts, and areas desired, the houses are the types of homes the home buyer want. The yards are spacious, it’s a ranch, it’s a two story, it has a basement, a garage, it’s what they were looking for except for one thing, it needs a lot of work to make it livable or for that matter what they would want to wake up to every day. So the home buyer goes on looking, and looking, and looking, eventually they end up settling or they continue renting.
There are several mortgage programs available to all home buyers that will allow you to purchase that near perfect home, and turn that ugly duckling home into the beautiful swan that you want. But, what if I told you that not only will these home loan programs allow you to transform any house into that home to be proud of, but within a very short time, months, you can have a home that has doubled, tripled or more in equity.
The FHA 203k mortgage, the Fannie Mae HomeStyle, and VA Renovation mortgages are all specifically designed to provide a home buyer, with the means to fund the repair, rehabilitation and renovation of their near perfect house into the home of their desires. The renovation mortgage will roll into one loan the sales price of your near perfect house and the cost of making it your dream home, I will not get into these home loans in-depth here. If you would like to learn more about the FHA 203k mortgage, the Conventional HomeStyle, or the VA Renovation Mortgages please visit my website at www.bobrutledge.com where you will find all you need to know.
NOTE the FHA 203k mortgage is not the same as the standard FHA 203b mortgage, not all lenders can provide the FHA 203k mortgage which is one of the reasons they do not offer this program to home buyers. The same can be said about the VA Renovation Mortgage and the HomeStyle Renovation Mortgage to an even greater situation. Not all lenders do these types of mortgage programs and most Loan Officers lack the experience you want.
I successfully work with a home buying team every month that will help several home buyers find and secure the home of their dreams using the FHA 203k Renovation Mortgage, the VA Renovation Mortgage, or the HomeStyle Renovation Mortgage in conjunction with the Renovation Mortgage Equity Plan. So much so that I encourage ALL my home buyers not to buy a new home until they find THE house that can quickly turn their LOW down payment into at least a 10% equity stake. In most instances my first time home buyers will have established that 10% to 20% equity stake within three to six months after closing on their new home, even in today’s declining, stagnate, or barely growing house market.
HOW DOES THE FHA 203k EQUITY PLAN WORK
Start with the development of your team, your team will consist of a real estate agent, a mortgage loan officer who is experienced, knowledgeable, and able to do ALL renovation mortgage programs, and a home remodeling General Contractor. Don’t be concerned if you do not immediately have a general contractor available to you, more than likely your real estate agent or loan officer will help you. In many instances the Loan Officer will know the perfect Real Estate Agents and/or General Contractors to refer you to.
Are you willing to do your HOME WORK? I hope so, because the Renovation Mortgage Equity Plan can and will place thousands upon thousands of dollars worth of equity into your home. Equity in your home is the best and generally the most important wealth many of us will accumulate.
To start your real estate agent should be well versed and experienced in putting together a reliable and accurate Comparable Market Analysis, CMA. Your real estate agent should have a very solid knowledge of the housing market in the area you want to live, and last your agent should have a true desire to see you get the absolute best home on the market.
Next, your loan officer should have all the renovation mortgage programs available to them, make sure they have done many renovation mortgages because these home loans are a lot more involved than the normal mortgage. In the hands of an inexperienced lender a renovation home loan can turn into a home buyer’s nightmare. In the right hands the FHA 203k mortgage is fairly easy and will not take more than another couple of weeks to close than a normal mortgage, I usually ask for 45 to 60 days to close.
The general contractor should have experience in home remodeling, renovation and repair work. They should be aware that the renovation mortgage will pay them through an escrow account that will not provide funds to them until work is proven to be complete. The contractor should have a very sharp pencil, meaning that they know how to create thorough and accurate estimates. Last, the contractor may have to visit several houses with you, providing estimates of work, make sure they are willing to do this for you.
Your HOME WORK should include that YOU have your renovation mortgage loan officer team member insure they provide you with a complete working knowledge of the renovation mortgage you will be using and that they PRE-APPROVE you for that mortgage program. The pre-approval will establish the limits of the total loan amount, it also provides you with a virtual wheelbarrow full of money, when you make an offer on your new home the seller will know you are a home buyer to be taken seriously.
Now that you are pre-approved, have your real estate agent team member provide you with a list of candidate houses, these will be homes that match what you are looking for in a home, have all the appearances of a bargain home, priced below the market, and may need some TLC to get the house to be your home.
Drive by and visit the houses with your real estate agent, take with you a note pad and a camera. At every house you visit take extensive notes on the house, note the repairs you feel need to be made, develop a wish list of what you would like have done to the house to make it your home. Are the appliances outdated, you can have them replaced with a renovation home loan. Is the flooring hideous, worn, spotted, shag carpeting, a renovation mortgage can cover that too. Would you like a bigger garage or a garage period! Whatever you can dream of more than likely can be done with a FHA 203k, HomeStyle or VA Renovation home loan. If the house is empty or you have permission take pictures of the house to help you remember that house later.
Keep in mind that your have a real estate professional as one of your team members, ask for and listen to their suggestions and allow them to point out the good and the bad. Your real estate agent is a fountain of knowledge and wants to see you get that great bargain home with a ton of equity potential.
Next, whittle the number of houses to your favorites and most potential homes. Go back and revisit the houses on this new list with your contractor team mate in tow. At each home provide your contractor with your notes and your wish list for that home. Let the contractor do their thing, finding items that need attention or repaired, and have them make suggestions as to remodeling and your wish list. Be taking notes of everything from this visit too. Before you leave that house or very soon after have your contractor provide you with an estimate of cost to make this house your home.
Add the sales price of the house or what you are willing to pay for the house and the estimated cost of repairs does it come in below the amount that your loan officer approved you for? Ask yourself this question; can I see this house as my home? If so, you are ready to move on to the next step. This next step will determine whether you make an offer on the house and for how much. Now that you have established the cost of purchasing this house and bringing it up to what you want in a home have your real estate agent perform a bulletproof CMA based on the repairs, work, and remodeling you will do for this house.
Does the Comparative Market Analysis, CMA, show that this house has the potential to meet your minimum gained equity after your down payment? Yes or No, if yes then keep going. If No, don’t be concerned there are a lot more potential homes out there and coming on the market
Based on the findings of your real estate agent’s work, the CMA, this will determine whether you make an offer or not. Also, it establishes your negotiating start and and end positions. You know the value this house holds so do you can start low and have a stop point OR you make a higher offer and negotiate seller concessions to help reduce the out of pocket cost of purchasing a new home. This is why you have a real estate professional, they are trained and experienced in negotiations.
When using the Renovation Mortgage Equity Plan never buy a new home that doesn’t have at least 10% Equity Potential!The Renovation Equity Plan has helped many home buyers gain near instant equity wealth as well as protect the new home buyer from a declining housing market. In this current housing market a home buyer with a very small down payment can quickly see their investment turn into a situation in which they are more equity rich soon after all the renovation work is completed!
Another advantage of the Renovation Mortgage Equity Plan is that many home buyers are finding that they are gaining a 20% or more equity position which allows them to refinance, soon after the completion of work, to a new mortgage with a lower interest rate and no mortgage insurance. Just the elimination of the required monthly mortgage insurance payment can lower a house payment by 10 to 20 percent. Now you have a home with equity and a lower house payment!
PUT YOUR TEAM TOGETHER TODAY TOMORROW START YOUR HOME WORK
My name is Bob Rutledge and I specialize in renovation mortgages, I am a Certified Renovation Mortgage Specialist, and I close renovation mortgages every month. Most mortgage lenders cannot say that.
I have the ability to close FHA 203k, VA Renovation, and HomeStyle Renovation loans all over the State of Missouri, quickly, easily and with far less stress. I have worked with home buyers and owners not only in St. Louis and the surrounding area, but in Kansas City, Springfield, Cape Girardeau, Columbia, Sikeston and other towns in Missouri.
I am also licensed in Texas, Ohio, Florida, and Illinois. I am quickly gaining experience in these states as well.
We are licensed in 48 states and many of the United States territories. If I cannot help you with your renovation mortgage needs I can refer you to someone that I trust.
If you need help with a renovation mortgage, have questions or would like to apply for a renovation mortgage please free to contact me. Email me at FHA203kbob@gmail.com
Are you about to start the home buying process? Are you currently in the process and you feel overwhelmed with the process of home buying? You’re not alone. Homebuyer surveys find that more people today want to buy a home, but challenges such as saving for a down payment and student loans are keeping them sidelined.
We know the vast majority of buyers (92 percent) use online search at some point in their home buying process. Maybe that’s how you found me at www.bobrutledge.com!
But, before you start picking out your dream house online, take a minute to make sure you grasp these 7 key facts about homeownership.
1. Go back to school (for a day). We know you probably just Goggled “how to buy a home,” but did you know there are homeownership education courses that can really help you prepare? Homebuyer counseling is occasionally required when using a down payment assistance program, but any buyer can benefit. You’ll learn about the home buying process, improving your credit, mortgage terms, planning a budget and more. Plus, a new study finds that by simply participating in these in person or online courses, you’ll reduce your risk of foreclosure by 42 percent.
2. Get an agent. If you aren’t yet a homebuyer, there’s no reason not to have a real estate agent. Your agent’s commission will come from the home you purchase, not your pocketbook. Everybody wins! Even if you don’t think you’ll need help with lots of showings, a real estate agent will help you navigate contracts between you and the seller and set up important things like the home inspection. As a new buyer, you’ll benefit from the expert help.
3. Find the right lender. (PICK ME) Your mortgage lender will help you secure your home financing—and, there are many types of banks and lenders who can help. Unfortunately, according to the Consumer Financial Protection Bureau (CFPB), nearly half of homebuyers don’t shop around for a mortgage lender. Like you, your finances and home buying goals are unique. So, it makes sense to shop around and interview your lender for the job. Find a lender that can work within your parameters and not their own, too many lenders will make YOU
4. Your credit score matters. The type of loan you get, including interest rates and points paid, is primarily determined by your credit score. The better your credit score, the more affordable loan you can get, often with more options for a low down payment. For low down payment loans, your MIDDLE credit score needs to be a minimum of 620. Review your credit report, make adjustments and get prepared so you can enjoy the lowest interest rate possible and save cash over the life of your loan.
5. You don’t need 20 percent down. You may have heard or read that you need 20 percent down. It’s not necessarily a bad thing, but that’s just not the case. And, if using a low down payment can get you in a home now (instead of 3 years from now), you’ll enjoy low rates and get out of a rising rent situation. Low down payment options have been around for a long time. In fact, data shows that low down payment loans with sound underwriting (loan is fully documented, income verified) are just as successful as loan with large down payments.
6. Down payment programs offer savings. Did you know the average down payment assistance benefit is more than $8,000? Many homebuyers don’t know about homeownership programs that can help them get in a home much more quickly and provide a valuable cash cushion for other home buying expenses. You could save on save on your down payment and closing costs, or even get ongoing tax credits. If you would like to see how a low down payment mortgage and down payment programs can help to get you into a new home with zero out of pocket expense follow this link to my ZERO PROGRAM.
7. Don’t forget to budget closing costs. Most buyers focus on saving for a down payment, but your closing costs can run you another 3 to 5 percent of the sales price. It’s important to factor in those costs so you are prepared for the closing table. Ask your agent about negotiating those costs with the seller. In addition, some homeownership programs can help you cover your closing costs.