Nance Realtors Blog

Northern VA Real Estate Blog by Kristofer Nance

Buying handyman specials?

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Question by (mimi): House buying?
Lets say you want to buy a house, but  it needs some repairs and don’t have the money for them…… if you get a  loan from a  credit union will they only give you the loan for the amount of the home? I’ve seen those house flipping shows where the person buys a home and they fix it up, but do they get a loan to fix the home on top of the loan to buy the home?

Best answer:

Answer by tim

You should make sure your contract offer is contingent on a satisfactory appraisal.

For example, you submit a contract for some value, it could be the asking price or some value less that that. You should make the contract contingent on the house  appraising for at least equal  to your offer. You should also make the contract contingent on a home inspection, by a professional inspector to identify that there are no major problems in the property such as plumbing, heating and cooling,  and so on. If the house doesn’t pass the inspection, you can ether cancel the contract or try to negotiate a resonable compromise with the seller. 

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How do I record on my taxes a rental house purchase for less than tax value.?

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Question: How do I record on my taxes a rental house purchase for less than tax value.?
My husband and I purchased his grandmother’s home from his dad and two brothers. One brother forfeited his 1/3 of profit to keep the house in the family. We paid the other brother cash for his 1/3. Once we get the house ready and rented, we will start paying my father-in-law back his 1/3. What value should I use for the purchase price of the home? How will that affect our taxes by paying less than tax value for the home?

Best answer:

Answer by artillerygirl01
It won’t affect your taxes until you actually start renting it out and earning income. You use the purchase price of the home plus any capital improvements you made as your cost basis in the house, and you will depreciate that value over the life of the home, using the IRS depreciation schedule.

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Before buying a foreclosure do I need a home inspection?

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Question: home inspection?

We recently purchased a home that was foreclosed. We knew the previous owners and keep in contact with them on a regular basis. They told us everything that they had going wrong with the house or any problems they were having (really, not much). The home was winterized about 4 months ago. Our real estate agent said since the previous owners are telling us everything with the house, it wasn’t necessary for us to put up the $400 to get the home inspection. I would feel better, however, to at least have somebody come out to look at utilities and termites. Is this possible to do, or when I sign up for an inspection, do I have to get the whole shebang?

Answer:

I always recommend that my clients get a home inspection.  The old owners may not even know everything that might be wrong with the house. “Pay the money it’s worth it”

You can have a home inspection even if you already purchased the home. but you should have done one prior to your home purchase. 

Virtually very mortgage  lender will require a satisfactory termite inspection prior to generating a clear to close. Most likely you had a termite inspection.

What do you think? Answer below!

I need to find a way to finance a house purchase?

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Question joe bloe: I need to find a way to finance a house purchase?
I make under 30K a year, I have a horrible and I mean HORRIBLE credit history because of my ex wife’s mismanagement of our finances. I want to be able to purchase my grandmother’s house back but it is valued by the bank at 500K
I know but the question is ALTERNATIVE ways!!

Best answer:

Not going to happen. You do not have the income to make those high payments or even pay the property taxes.

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Q&A:Home Purchase?

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Question: Home Purchase?
My husband and I were pre-approved for a mortgage. We found a house we liked and put in a contract on it. We had a foreclosure  back in 2008  and some lates on other accounts around the same time. Since then we have had good credit. We have established new trade lines that are over a year old with no late payments. Our credit scores are 606 and 614. We are going through underwriting and they are telling us that we aren’t being approved because of the foreclosure we had, nothing was said when we were being pre-approved for a loan. The loan officer told me that I need to write a letter explaining how and why we went to foreclosure. We lost our home due to an ARM rate that we couldn’t afford it. Can this help with our FHA loan approval?

Best answer:

The loan officer that did your pre-qualification letter obviously did not know FHA guidelines. That’s why now that the underwriter is taking a closer look, they obviously don’t like what they see. One year of payments on trade lines doesn’t negate a foreclosure and your scores are still really low.

FHA guidelines are 36 months since foreclosure. Credit score ABOVE 620!

If there are negatives on your credit since the foreclosure. FHA will want you to have COMPENSATING FACTORS in order to get an exception. These are:

1) Job stability
2) Year over year growth in income
3) Paid off/down credit accounts
4) Paid off collections (except medical)
5) Assets (reserves)
6) Low DTI Ratio (Debt to Income) / Good income over your payments

A letter stating you didn’t anticipate your previous ARM payment adjusting is just not good enough.  Legitimate reasons are usually medical, death in the family forced change in income. 

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Home Buying?

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Question by Ricky: Home Buying?
So I’m new at this home buying stuff – what’s an “escrow account”?

Best answer:

If you choose to have escrow or your mortgage company requires it. It’s basically a savings account they put your money into to save for things like PMI (mortgage insurance if you borrow more than 80% of the value of the home most mortgage companies require it and it is really expensive so do all you can to avoid it like the plague) and taxes.

So usually they just tell you that your mortgage payment is $ 1200/month…probably $ 275 of that is escrow. They collect in advance to pay your property taxes…they are not allowed to collect more than 20% more worth of taxes than your estimated tax bill…they usually have a little extra in the account because taxes go up every year and they don’t want to get caught short.

The bad thing about escrow is that you are giving your mortgage company an interest free loan on your money. They are going to make money on your escrow payments.  My feeling is why shoud I let them make money on my money if I could do it myself. If I put the $ 275/month in a money market account I am earning 5% interest on that money…if I send it to the mortgage company they are making that 5%.

The good thing about escrow is that if you are really bad at saving you don’t have to worry about your taxes being paid. They are doing it for you. You just send your payments every month and they take care of the rest.

So you need to decide if you can save the money on your own (you don’t get a choice on escrow if they require PMI they will pay that for you, you can’t do it yourself).

Good Luck!

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Q&A: house buying and credit rating?

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Question by Ed : house buying and credit rating?
I am looking for tips for first time home buyers? how does good credit affect mortgage?

Best answer:
The better your credit, the lower your interest rate will be. Less interest equals smaller payments. Good credit makes more money available to you so you can buy more house then someone with poor credit.

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home buying?

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Question by v1ru5: home buying?
Hi, I am currently in a process of buying a house. I am wondering about the law of the home ownership. My question is, when buying a house, is it also includes the land on which the house stood on?

Thank you for answering my question

Best answer:

Answer by cozdiver
When you buy a house, your contract should say how many square feet you get. If your buying a condo you only get that condo, no property.

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Q&A: how should i start with the home buying process as a first time homeowner?

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Question by jennifer: how should i start with the home buying process as a first time homeowner?
I am 31 years old, have ok credit, and make @ 33,0000 per year. I would now like to buy a home but don’t know how to start the home buying process. What should i do to start the home buying process? I am also afraid that i will be turned down,if so what would i do to get approved?

Best answer:

Answer by Steve
Step one is to find a good mortgage broker and get pre-approved for a mortgage. This will tell you first, whether you can get a mortgage and second, how much mortgage you can afford.

Assuming you can get approved, next, figure out how much you can realistically afford to pay and then go online and see what type of mortgage that will get you. Don’t forget you will also have taxes and insurance to pay, so factor them in (the calculators will only give you the payments on principal and interest).

Once you have been approved and know how much you want to pay, find a real estate agent and start looking for houses in your price range. Be prepared for the real estate agent to show you houses more expensive then your price range…be firm.

Finally, research the neighborhoods available to you and see if you want to live there.

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