Tag Archives: mortgage loans

Negotiate Your Best House Buy

06 Monday Oct 2014

Posted by in Foreclosure, Home Buyers, Home Loan & Mortgages, Home Sellers, Homeowners, Investors, Uncategorized

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Negotiate Your Best House Buy home-for-sale-sign
By: G. M. Filisko
Keep your emotions in check and your eyes on the goal, and you’ll pay less when purchasing a home.

Buying a home can be emotional, but negotiating the price shouldn’t be. The key to saving money when purchasing a home is sticking to a plan during the turbulence of high-stakes negotiations.

A real estate agent who represents you can guide you and offer you advice, but you are the one who must make the final decision during each round of offers and counter offers.

Here are six tips for negotiating the best price on a home.

1. Get pre-qualified for a mortgage
Getting prequalified for a mortgage proves to sellers that you’re serious about buying and capable of affording their home. That will push you to the head of the pack when sellers choose among offers; they’ll go with buyers who are a sure financial bet, not those whose financing could flop.

2. Ask questions
Ask your agent for information to help you understand the sellers’ financial position and motivation. Are they facing foreclosure or a short sale? Have they already purchased a home or relocated, which may make them eager to accept a lower price to avoid paying two mortgages? Has the home been on the market for a long time, or was it just listed? Have there been other offers? If so, why did they fall through? The more signs that sellers are eager to sell, the lower your offer can reasonably go.

3. Work back from a final price to determine your initial offer
Know in advance the most you’re willing to pay, and with your agent work back from that number to determine your initial offer, which can set the tone for the entire negotiation. A too-low bid may offend sellers emotionally invested in the sales price; a too-high bid may lead you to spend more than necessary to close the sale.

Work with your agent to evaluate the sellers’ motivation and comparable home sales to arrive at an initial offer that engages the sellers yet keeps money in your wallet.

4. Avoid contingencies
Sellers favor offers that leave little to chance. Keep your bid free of complicated contingencies, such as making the purchase conditional on the sale of your current home. Do keep contingencies for mortgage approval, home inspection, and environmental checks typical in your area, like radon.
5. Remain unemotional
Buying a home is a business transaction, and treating it that way helps you save money. Consider any movement by the sellers, however slight, a sign of interest, and keep negotiating.

Each time you make a concession, ask for one in return. If the sellers ask you to boost your price, ask them to contribute to closing costs or pay for a home warranty. If sellers won’t budge, make it clear you’re willing to walk away; they may get nervous and accept your offer.

6. Don’t let competition change your plan
Great homes and those competitively priced can draw multiple offers in any market. Don’t let competition propel you to go beyond your predetermined price or agree to concessions—such as waiving an inspection—that aren’t in your best interest.

Taking out a Mortgage Next Year? Plan for a Bigger Pile of Paperwork

10 Tuesday Dec 2013

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If you’re refinancing your home or getting a mortgage to buy one, your lender will likely ask for more documentation of everything you claim on your loan application.

The New Lending Rules: Qualfied Mortgages

The new rules they were discussing, called the qualified mortgage or ability-to-repay rule, protect consumers from unscrupulous lending practices and provide creditworthy homebuyers with access to safe mortgage financing. That mean lenders must look deep before making a mortgage loan.

Lenders can still make any loans they like, but if they go outside the qualified mortgage rules, they lose protection against borrower lawsuits claiming that the loan was unfair or inappropriate. Many lenders have faced lawsuits filed by state attorneys general and class actions over loans made before and during the housing crisis.

To make a qualified mortgage, the lender will have to follow exact steps to prove eight things beginning in 2014:

1. Your current income or assets.

2. Your current employment status.

3. Your credit history.

4. The monthly payment for the mortgage.

5. Your monthly payments on other mortgage loans you get at the same time.

6. Your monthly payments for other mortgage-related expenses, such as property taxes.

7. Your other debts.

8. Your monthly debt payments, including the mortgage, compared with your monthly income and how much money you have left over each month after paying your debts.

Kevin Watters, CEO of mortgage banking for JPMorgan Chase, agreed that low- and moderate-income buyers, as well as self-employed buyers who don’t have a consistent flow of income, might have a tougher time in the new lending environment. “We need to work together to help first-time buyers into affordable housing options,” he said.

Cash vs. Mortgage
The new guidelines worry REALTORS® who see homebuyers who use a mortgage being passed over by sellers who accept offers from cash buyers (most cash buyers are investors and about one- third of recent existing- home sales involved investors).

I can’t blame sellers for taking cash deals. If I were selling my home, I might not want to wait for a buyer to go through a lengthy mortgage approval if I could quickly close the deal by accepting a cash offer from an investor.

Will It Take Longer to Get a Loan?

Since the rules aren’t in place yet, we won’t know how long it’ll take to process loan applications using the qualified mortgage until after January.

Regardless of whether you apply for a mortgage now or after the qualified mortgage rules start, your best bet is to:

Assume the loan process will be slower than the last time you got a mortgage, so don’t let it stress you out.

Make a copy of every piece of paperwork you give to your lender. That way, if you’re asked to send it again, you’ve got it ready to go.

Discuss lender choices with your REALTOR®. She’s watching local people go through the mortgage application process every day and knows what lenders are really doing versus what their loan officers say they’re doing.

Don’t lie on your loan application. All the new verifications mean you’re just going to get caught and then you won’t get your loan.

Regina Wallace – Prospect Equities~Infiniti – Real Estate Specialist
Call or Text: (708) 966-9065- E-fax: 800-654-4904 – Email: Regina@reginawallace.com