What You Need to Know After Buying A Historic Home

historicSo you’ve just purchased your new dream home complete with all the features you’ve always wanted, but it’s in a historic district and has come with its share of problems. Making repairs on a historic property will differ because of rules and regulations you will be required to follow. Below Dean Graziosi has included some information that will help you take your first steps toward making those repairs and restoring your new home to its natural beauty.

Most interior changes won’t be affected by the historical status of your home. You may be required, however, to keep it up regularly. All you will probably need are typical building permits to renovate the inside of your home. Exterior changes, however, require planning approvals. You should consult with your local planner early on in the buying process to find out all you’ll need to know for your area. Check back often during the projects you are undertaking to make sure all details are receiving attention.

Adding onto the property if it is considered a local landmark is another project entirely. Here, you will need to get permission from the Historic Preservation Commission. Small changes such as ordinary repairs and maintenance won’t need to go through this commission. Here, the planning staff will probably be able to help you with the details. Also, different areas may have varying requirements, so it is important to familiarize yourself with your particular location.

When buying the property, you’ll know whether or not it will need work and how much. Consider the cost of this work plus that of securing any permits you will need to take care of it. Owning a historic home can be a dream come true, but if you have to then turn around and put a whole lot of money into it, the dream can turn into a nightmare.

Plan your projects well. Get all the information you’ll need before making the plans. That way you won’t be surprised to find out you should have secured something you were unaware of and you’ll stay within the zoning guidelines. If you are on a tight budget, take care of each project separately. That way you can pour a lot of time and energy into them all individually. Budgeting for all your projects will also help you keep up with expenses as you go along. An article posted on sf.curbed.com points out you can actually save money by purchasing a historic home.

Owning and restoring a historical house can be very satisfying. If your dream is to purchase an older home, one in the historic district might be the perfect choice. It may come with more headaches, but will all be worth it in the end. You can learn more about this and other real estate topics by visiting Dean Graziosi’s website.

FHA Loans and Interest Rate Lock-Ins

FHA loansWhen applying for an FHA loan, you will begin by filling out an application as with any other type of loan. You will work with the lender to obtain approval of the loan, and once this has occurred, you can then move forward with securing it. The tricky part can be agreeing on an interest rate that you, the borrower will pay throughout the duration of your new loan. Dean Graziosi provides some useful information about this process below.

When you and the lender agree on an interest rate, this is what is known as a lock-in. Both you and the lender are committing to this rate and will enter into an agreement. Negotiating the interest rate is a standard part of obtaining an FHA loan. There are, however, some important rules to consider.

As an article posted on FHA.com notes, “Under all currently active FHA single family mortgage insurance programs, the borrower and the lender negotiate the interest rate and any discount points.” Once you and the lender agree on an interest rate and it is locked in, other FHA rules apply. These rules state that the lender may charge a commitment fee that will guarantee the interest rate and any discount points for a specified period of time. This commitment is in writing. The extent to which the interest rate or discount points can change may also be limited.

FHA loans can work much differently from conventional loans, so it is important to thoroughly understand what you are taking on before deciding this is the best option for you. Locking in an interest rate is very important because you will always know how much interest you are required to pay each month, but you should be aware of any additional expenses you may incur along the way.

So, how long do you have from the time of the agreement to the lock-in actually taking effect? According to FHA.gov, the minimum time for lock-ins is 15 days. It may be possible for the loan to close in less than 15 days at the borrower’s convenience, and the lender still may be able to earn the lock-in fees. Lenders are required to honor all relevant commitments.

What happens if the interest rate needs to be re-negotiated? Can you and the lender come to an agreement for a rate that is different from the previously agreed upon lock-in rate? Here the borrower is required to provide you with a HUD interest rate disclosure statement that will explain the terms of the loan are, in fact, negotiable. If there is an increase in either the interest rate itself or discount points, the lender will need to re-qualify you. This rule may require you to re-submit to a credit check, a debt-to-income ratio calculation, or other re-qualification data the financial institution requires.

Before locking in an interest rate, know what fees you may be required to pay and make sure the funds are there to do so. An FHA loan may be the best option for you, and the more prepared you are, the better off you’ll be in the long run. You can find more real estate topics at Dean Graziosi’s blog.

How You Can Get A Mortgage With Bad Credit

credit approvedIf you current credit score is in the fair, poor, or bad range you may think that your dreams of qualifying for a mortgage are over.  While that may be true for the majority of potential home buyers with low credit, there are some options for home buyers with less than a perfect credit score.  Dean Graziosi explains some of the ways in which you can still obtain a mortgage with poor credit.

Lenders base their decision to approve a loan on the strength of your credit score.  They use this number to determine how you have managed your credit in the past and how well you can handle the addition of a mortgage.  If you’re unsure of what your credit score is, you can request a free copy of your credit report from the credit reporting agencies.  When you receive your credit report, you should look over it carefully and take note of any errors that the report may contain.  If your report contains any errors, you should contact the credit reporting agency at once and have them taken care of.  It’s recommended that you take care of this before you apply for a mortgage.  If your score is still too low for a lender to approve you, they may offer you some quick steps which can help you improve your credit score.

Prior to the housing crisis borrowers were approved for mortgages with having to provide proof of their income and assets.  During this time subprime lenders often approved loans for borrowers with low scores, which cost them more in higher interest rates.  Since the housing crisis, a lot of subprime lenders have gone out of business, but you may still be able to qualify for a mortgage.

The most common way for borrowers to get approved for a loan with a low credit score is through the Federal Housing Administration’s program.  The FHA insures lenders against default and requires that borrowers have a credit score of 580 or higher and a down payment of 3.5%.  However, the majority of lenders still require that borrowers have a credit score of 620 and higher to approve their FHA loan.  Borrowers will also need to provide lenders with documentation of their income and assets.  Dean Graziosi states that they will also need to meet the debt-to-income ratio set by lenders.

While FHA loans are a lifeline for borrowers with poor credit, there is also a downside to these loans in that they typically require higher mortgage insurance requirements than a conventional loan.  Borrowers must make these insurance payments for the entire length of their loan unless a larger down payment can be made.  While obtaining a home loan with poor credit may be more difficult, it is not impossible.

Buying a Home after Bankruptcy

bankruptcyWhen you file either Chapter 7 or Chapter 13 bankruptcy, you are not only devastated, but you may believe that your dreams of purchasing a home are over.  When you enter into bankruptcy, your ability to obtain a loan or get a credit card is drastically impacted because of the effect that the bankruptcy had on your credit score, states Dean Graziosi.  It will take some time to rebuild your credit and get it to a point where you can apply for new credit, but it is not impossible.  If you properly prepared and carefully planned your finances you may be able to purchase a home sooner than you imagined.

The first thing that you should be aware of when filing bankruptcy is that it must be discharged before you even consider contacting a lender.  Once your bankruptcy has been properly discharged, your first step should be to carefully examine your credit report.  If you notice that there are any debts that you have paid still listed, you need to contact the credit reporting agency and have them removed.  Each year you can request a copy of your credit reports from the three major reporting agencies, take advantage of that and dispute any errors you may notice.

The next thing you should do is begin rebuilding your credit.  The fastest way to do this is to demonstrate to creditors and other lenders that you can successfully pay back any money you owe them.  The two most effective ways to do this is to obtain a secured credit card or an installment loan.  When you obtain a secured credit card, you are limited to the amount that you have on deposit with the issuing bank.  An installment loan is a loan that you obtain where you are required to repay either a personal loan, student loan, or car loan through installment payments each month.  When you obtain an installment loan, your only worry is that you can make these payments on time each month.

You should be prepared to wait at least two years after your bankruptcy has been discharged before you apply for a mortgage.  You may be able to qualify for a mortgage sooner, but know that the interest rates and terms may not be as appealing compared to those you can get if you wait.  To ensure that you receive the best possible rates and terms, Dean Graziosi recommends waiting a minimum of two years.

After you have waited two years, you should ensure that you are fully prepared to apply for a mortgage.  You will likely have to meet certain criteria from your lender before they agree to approve your loan.  Your debt-to-income ratio will be scrutinized; your time and stability at your current job and a current savings and checking account will also be looked at carefully.  Purchasing a home after bankruptcy is not impossible; it may just require some additional work on your part.

What to Know Before Attending An Open House

houseAttending an open house can be fruitful. It’s a way to view a property and learn more about it without the pressure that can sometimes be placed on you as a buyer when viewing on your own with a real estate agent. As a seller, you’ll need to decide whether or not you will benefit from submitting your home to one. Dean Graziosi provides some great tips for this in his real estate blog.

If you are like most home buyers of today, your search for a new property will begin online. When perusing real estate listings, look for great photos. These are what will initially provide you with visuals of the various listings. Detailed pictures are best because they really capture the different features that can really help sell a home in the end. Make a list of houses you would like to view and talk to your real estate agent about whether or not open houses will be held for these properties. If so, your agent will post the date and you can then make a list of those you would like to attend as well as their dates and times.

Go to an open house prepared. Know what you are looking for in a home and be ready to compare features of different properties. Keep in mind you probably won’t find all the features you want in one place the first time around, so you may have some decision making to do once all open houses have been visited. Then again, you just may find your dream home right away. Since you really never know how you’ll feel about a particular property until you view it, having a good idea of what you want before-hand will serve you well.

Take your time. When going through a home, don’t rush. Look at all the rooms and pay close attention to detail. This will help you decide whether or not you want to look at a particular home again or move onto the next. If you like what you see, chances are you’ll seriously consider it as the one you want to make your next home.

Open houses are a great way to view a home in person rather than simply online. As Dean Graziosi points out, sellers should take every opportunity to do this so more buyers can have the chance to see what is really for sale.

Look past the home staging. As an article in CNN Money advises, it’s easy to be so wowed by what you see that the important things are overlooked. Instead, look under window dressings and under rugs to view what may have been covered up.

Open houses can be beneficial, and you can learn a lot by attending them. You can read more about this topic by visiting Dean Graziosi’s blog.