Sellers Concession Towards Closing Costs

What Is A Sellers Concession?

On every home purchase, no matter what state the home purchase is, there are closing costs associated with the home purchase transaction. Home buyers need to put down a down payment plus they will have closing costs associated with the purchase of the home. All mortgage loan programs allow a home seller to offer a home buyer a sellers concession towards closing costs. The home buyer can then use the sellers concessions to offset their closing costs where in many instances, the can cover all of the home purchase closing costs and all they need to worry about is coming up with the down payment.

What Does Closing Costs On Home Purchase Cover?

Closing costs on a home purchase transaction covers all costs and fees associated with the origination of the mortgage loan and all costs and fees associated with the purchase of the home. Examples of closing costs includes origination fees, credit reporting fees, underwriting fees, title charges and fees, attorneys fees, recording fees, homeowners insurance premium, pre-paids ( 2 months tax and insurance escrows ), appraisal fees, home inspection fees, and any other fees and costs in the purchase of the home.

What Is The Maximum Sellers Concession A Buyer Can Receive?

The maximum sellers concession a home buyer is allowed to accept depends on the mortgage loan program. FHA allows a maximum of 6% sellers concession, VA allows a maximum of 4% sellers concession, Conventional Loan programs allows a maximum of 3% sellers concession on owner occupant and second homes and 2% on investment properties. Home buyers can use all of the sellers concessions for closing costs only. Home buyers cannot use sellers concessions towards the down payment of the home. Any surplus of sellers concessions needs to go back to the home seller and the seller cannot give a home buyer a kickback of the left over sellers concessions in any way or form. It is best for the home buyer and mortgage loan originator to make sure that the sellers concessions is not wasted and that any surplus of the sellers concessions will be used such as by buying down the rate for a better rate. Home buyers can pay points to buy down their rates and on cases of sellers concessions overages, that is how mortgage lenders use the surplus sellers concession is to buy down the rate by buying points.

Why Would Sellers Give Sellers Concessions?

Sellers concessions is very common and most home buyers do get sellers concessions by home sellers. Home sellers are not giving out free money for the sake of helping a home buyer. Sellers concessions normally helps a home buyer qualify to purchase home where otherwise they would not qualify. Most home buyers need to scrap by to get a down payment of 3.5% for FHA Loans or 3% to 5% down payment for Conventional Loans and closing costs can add to another 3% or more of the purchase price. Lets take a case scenario on how home sellers give sellers concessions towards a home buyers closing costs: Say a home seller wants to net $100,000 on a home purchase and wants to help the home buyer with closing costs of $4,000 on a FHA Loan. The home seller and home buyer will negotiate a purchase contract for $104,000 with a $4,000 sellers concession towards the home buyers closing costs. The home buyer will have $4,000 to cover his or her home closing costs and the home seller will net his $100,000 price.

Fixing Credit To Qualify For Home Loan

Tips In Fixing Credit To Qualify For Home Loan

It is highly recommended for home buyers or homeowners thinking of refinancing in checking their credit and credit reports for any errors they may have on their credit reports and see if they can maximize their credit scores so they can qualify for a mortgage loan and if they do qualify for a home loan, have the best credit scores possible to get the best mortgage rates. Mortgage rates are determined by the mortgage loan borrower’s credit scores and the higher the borrower’s credit scores are, the lower the mortgage rates the borrower will have.

Quick Tips In Improving Your Credit Scores

There are some quick tips where you can boost your credit scores. If you have maxed out credit cards, the chances are that you will have lower credit scores. Paying down your credit card balances will definitely boost your credit scores. The higher your available credit balance is, the more positive impact it will have on your credit scores. Having no active credit trade lines will have a negative impact on your credit scores. If you have no active credit trade lines, you should get three to five secured credit cards with at least $500 credit limits. Each one of those secured credit cards should boost your credit scores by 10 to 20 FICO points and as those secured credit cards ages, it will have more of a positive impact on your overall credit profile. As your secured credit card ages and you develop a perfect payment history with the secured credit card company, the secured credit card company will eventually get you a credit limit increase without having to put any more additional deposit. Once you have a timely payment history with your secured credit cards and your credit scores are at least 700 FICO, you will be able to qualify for traditional unsecured credit cards. Do not apply for unsecured credit cards if your credit scores are below 700 FICO.

Credit Repair Prior To Applying For Mortgage

If you are planning in enrolling in a credit repair program, make sure you do it well in advance of applying for a mortgage loan. The main reason is because credit repair involves disputing negative credit items to the three credit reporting agencies and there are strict mortgage lending guidelines when it comes with credit disputes during mortgage process . You cannot have any credit disputes on non-medical collection accounts with credit balances that totals $1,000 or more ( total of unpaid collection accounts ) to qualify for a FHA Loan. You need to get the credit disputes retracted in order for the mortgage process to proceed. You can qualify for FHA Loans with unpaid collection balances and charge offs. Charge off accounts and medical collection accounts are totally exempt and do not count under FHA federal mortgage lending guidelines. However, if you have more than $2,000 of unpaid collection account balances of $2,000 or more on non-medical collection accounts, then 5% of the unpaid collection balance will be used to calculate the mortgage loan borrower’s debt to income ratios. Cases where the mortgage loan borrower has a large collection account balance like $10,000, then 5% of the $10,000 unpaid collection balance or $500 will be used as the mortgage loan borrower’s monthly debt and will be used to calculate their debt to income ratios even though they do not have to pay the $500 per month. For those mortgage loan applicants with large collection account balances and prior bad credit, it is highly recommended that they start a credit repair program to see if they can have their collection accounts and negative credit items deleted off their credit report. However, credit repair does take time and home buyers should start credit repair program well ahead of time of them actually applying for a mortgage.

What Is A Short Sale?

What Is A Short Sale And How Does It Work?

A short sale is when a mortgage lender approves the sale of a homeowner’s home for a value less than the amount the homeowner owes on their mortgage loan balance. After the 2008 Real Estate and Mortgage Meltdown, real estate values have collapsed where many homeowners who had equity in their homes were left with home mortgages that were higher than the amount they owed on their mortgage loans. Since the economic and the real estate meltdown, many homeowners have seen their home values go back up and many, especially in California, Florida, Illinois, Texas, and other parts of the country. However, there are still homeowners who still have mortgage loan balances that is higher than the balance of their homes. In order to sell their homes, they need to come up with the difference on what they owe from the sales price of their home. With a short sale, the homeowner has the mortgage lender’s blessing to sell their home at the current market value and will often forgive the debt that they owe.

Short Sale Process

If a homeowner is going through financial hardship and they owe more on their mortgage loan balance than the value of their homes, their mortgage lender may accept a short sale. Getting approved for a short sale is a process. Mortgage lenders will want to see financials of the homeowner and the reason why their mortgage payments is a hardship. After carefully reviewing the mortgage loan borrower’s financials and credit, the mortgage lender can approve a short sale. The homeowner can choose a realtor of their choice. The mortgage lender will do their own due diligence on pricing the home and will research recently sold properties in the area. Once a listing price is decided, the homeowner can have their real estate agent list the property. Once a potential home buyer submits a real estate purchase offer, the homeowner has no say so whether or not to accept the real estate purchase offer. The real estate purchase offer needs to be submitted to the mortgage lender who holds the note. Most mortgage lenders take their sweet time in reviewing the real estate purchase offer and sometimes it may take weeks or months before getting back to the home buyer with a counter offer. Short sales are a long process and take much longer to close than traditional home sales because banks and mortgage lenders normally take long.

Can A Homeowners Who Short Sales Qualify For Another Home Loan?

A short sale will definitely affect the credit and credit scores of the homeowner. However, homeowners with a prior short sale can definitely qualify for another home loan after short sale. If the homeowner has been timely with their mortgage payments and all other monthly debt payments up to the date of their short sale for the past 12 months, there is no waiting period to qualify for mortgage after short sale. Unfortunately, most mortgage lenders want the homeowner to skip at least one months mortgage payments for the short sale to be effective and this 30 day late payment on their mortgage payments will trigger a three year waiting period after short sale for FHA Loans and a four year waiting period after short sale for Conventional Loans.

Credit After Short Sale

A short sale will most likely trigger a 100 plus point drop in the homeowner’s credit scores. However, the credit scores will eventually go back up as the short sale ages. Homeowners who had short sale should start re-establishing their credit by adding positive credit and being timely with all of their monthly debt payments. Secured credit cards are the best tools in re-establishing credit after short sale and each secured credit card can boost a consumer’s credit scores by 30 or more points and expedite the credit re-establishing process. Never be late on any monthly debt payments after short sale. Most mortgage lenders will disqualify mortgage loan borrowers who had late payments after short sale, bankruptcy, and foreclosure. One 30 day late payment after short sale can disqualify a mortgage loan borrower from qualifying for a mortgage loan for at least seven years. A short sale will be on a consumer’s credit report for 7 years.

Condotel Financing

Difficulty In Condotel Financing?

A condotel condominium unit is a condominium unit within a hotel complex or a condominium project that has a rental desk or rental office in the lobby of the complex. Condotel units were extremely popular back in the 2000’s where many banks and mortgage companies were eager to finance condotel units. After the 2008 Real Estate and Mortgage Meltdown, condotel financing came to an abrupt halt. Almost all banks and condotel financing lenders stopped lending on condotel units. Condotel unit owners who owned condotels and wanted to sell their condotel units had the most difficult time in selling their units because the condotel buyers could not get financing. Condotel buyers were limited to cash buyers only due to lack of condotel financing. Many folks who wanted to purchase condotel units as second homes could not think of purchasing a condotel unit because they could not come up with cash funds. Due to the lack of available financing for condotels, condotel unit prices started tumbling nationwide. Many condotel unit owners could who purchased their condotel units in the mid 2000’s could not sell their condotel units and could not get them refinanced even with their current condotel mortgage lenders.  No matter how good of a banking relationship the condotel unit owner had with their condotel mortgage lenders, their mortgage lenders would not refinance their condotel loan that they were already servicing.

Condotel Financing Now Available

Condotel unit owners are now in luck. Condotel Financing is back. Condotel Financing are 30 year portfolio adjustable rate mortgage loans. 3/1 ARM, 5/1 ARM, and 7/1 ARM mortgage loan programs are now available. The index is based on the one year treasuries ( Cost Maturity Treasury CMT ) and the margin is set at 3.0%. The condotel complex needs to qualify as well as the condotel mortgage loan applicant.

Condotel Unit Requirements

For a condotel unit to qualify for condotel financing, the condotel unit needs to be at least 500 square feet, have at least one bedroom, and have a full kitchen. The condotel complex needs sufficient reserves and the condo complex cannot have any major litigation going on or have any major building violation issues. Not more than 10% of the condotel units can be in foreclosure.

Condotel Financing Requirements

To qualify for condotel financing, the condotel mortgage loan applicant needs at least a 680 FICO credit score, have one year reserves for the borrowers primary residence as well as the proposed condotel principal, interest, taxes, and insurance, cannot exceed 40% debt to income ratios, and require a 25% down payment. The 25% down payment on a condotel purchase loan is for first and second home condotel units only. For condotel unit buyers who have two properties and the proposed condotel purchase is the third property they are purchasing, then the condotel purchase is considered a investment condotel purchase and a 40% down payment is required. If you have any questions about Condotel Financing, contact Gustan Cho at Gustan Cho Associates at 262-716-8151 or email Gustan Cho Associates . Gustan Cho and his associates are available 7 days a week, evenings, as well as holidays to answer all of your questions.

Hard Money Capital Group

Welcome To Hard Money Capital Group

Hard Money Capital Group is a hard money and private money lender that caters to real estate investors, real estate developers, and property flippers who need fast temporary financing. Hard Money Capital Group, www.hardmoneycapitalgroup.com , has no loan minimum and can fund loans as little as $20,000 and close it in as fast as one week. Most hard money lenders want a minimum of a $100,000 loan minimum and most hard money lenders may take as long as 30 to 90 days to process a hard money loan. Hard Money Capital Group‘s management staff consist of professional real estate investors, mortgage loan professionals, and real estate professionals so they understand the importance of fast financing and understand that many real estate investors went through bad credit due to the 2008 Real Estate and Mortgage Meltdown.

Does Hard Money Capital Group Have Credit Score Requirements?

Hard Money Capital Group does not have any credit score requirements. Hard Money Capital Group is an asset based mortgage lender and want the hard money borrower to have skin in the game. Minimum equity and/or down payment requirements to qualify for a hard money loan with Hard Money Capital Group is 35%. 100% financing is available if the hard money borrower can cross collateralize other properties. Hard money borrowers with bad credit or lower credit scores can qualify for hard money loans with Hard Money Capital Group. While the hard money loan borrower utilizes the hard money loan, Hard Money Capital Group can help the hard money loan borrower fix and improve their credit through its sister company, Credit Fix Advisors , and help them with an exit strategy with a traditional mortgage lender, Gustan Cho Associates . Gustan Cho Associates are commercial and residential mortgage professionals whose specialty are no mortgage lender overlays . Gustan Cho Associates are creative mortgage lenders, portfolio lenders, and have access to specialty mortgage lending programs such as Doctors Funding Group . Doctors Funding Group offers unsecured financing to doctors, dentists, veterinarians, chiropractors, pharmacists, nurses, and other licensed members of the healthcare community for as much as $500,000. Hard Money Capital Group is different than any other hard money lender because every hard money client is a lifelong borrower and they offer full service not just funding the hard money loan, but also assisting the hard money loan borrower with credit repair, and helping them with an exit strategy.

Fix Rehab Flip Loans

Fix Rehab Flip Loans are one of the most popular hard money loan programs. Most traditional mortgage lenders do not want to originate and fund loans under $100,000. However, we at HMCG can fund hard money loans as small as $20,000, the hard money loan borrower can rehab the property and flip it at a handsome profit. For hard money borrowers who want to keep the investment property and keep it as a rental after the rehab, they can get a hard money loan with HMCG , fix the property and get end financing with Gustan Cho Associates. During the time of the rehab, HMCG will help the hard money loan borrower maximize their credit scores and do credit repair so they can get the best mortgage rates and terms on their end financing.

If you are interested in a private money or hard money loan that can close in a week, please contact HMCG at 800-900-8569. One Solution Real Estate, www.onesolutionrealestate.com, full endorses Hard Money Capital Group.