Stashing Your Cash Under the Mattress To Buy A Home?

Every day I learn of buyers that have been saving their money to buy a home in the future, but they do not keep the money in a bank account. It seems odd that people would do that but for some, it seems to increase their motivation as they see the cash pile up. When it comes to getting a home loan, this practice could create unwanted results.

Before a lender underwrites a home loan, the lender will want to confirm that the cash on hand is legitimate. Verifying the source of funds is a basic loan requirement.

Seasoned funds are funds that have been in a bank account for at least 60 days prior to loan application so prospective buyers should consider putting their deposit and down payment in the bank at least 60 days prior to applying for a loan. The deposit and the down payment must be considered seasoned funds.

If the funds are not yet in the account and the home buyers just located their dream home, there are alternative strategies such as negotiating a longer escrow. It will take time to work with gift funds or any other source of funds to ensure approval.

Today’s buyers have many different financing options and flexible loan programs to allow for unusual and unconventional situations such as self-employed, receiving gift funds from relatives, cash-income, emergency response professionals, teachers, nurses and doctors, low income, recently employed, and buyers with credit card debt, etc.

If you are looking to purchase a home through financing, I strongly recommend that you speak with a trusted lender or a Realtor to learn all your options. Being well informed will increase your chances of making the right home buying decision!

Thinking about buying or selling a home?  Contact me at any time.  I am never too busy for you!

Mariness Chata / (661)317-3332 / MarinessChata@outlook.com / BRE#01082675

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Tax Credit Loan Program That Helps Buyers Qualify & Save!

If you are thinking about buying a home, and you have not owned a property in the last 3 years, you can take advantage of a great loan program that will give you tax credits in addition to the normal tax write off.
As an example, a buyer purchasing a property for $470,000 with 3.5% down using an FHA financing could get a mortgage credit of $335.00 per month in addition to the regular mortgage write off. Another benefit of this credit is that it will be used to reduce their debt-to-income ratios facilitating the ability to qualify for a home loan.
Let’s look at the calculation example:
A property of $470,000.00 financed with 3.5% down and an interest rate of 4.375% will cost $3,208.41 per month (taxes & insurance included). When applying the $335.00 tax credit, it will cost $2,873.41. This tax credit makes a 4.375% rate look like a 3.09% interest rate.
The amount is a straight Tax Credit. Not a Tax deduction. This can help many home buyers that could not qualify before qualifying now. Also, the buyer may continue to receive a tax credit for as long as they live in the home and retain the mortgage.
For more details about this program and to find out if you could qualify for it, contact a local lender that has extensive knowledge on it and has been helping other buyers take advantage of this program or call me.

Thinking about buying or selling a home?  Call me at any time.  I am never too busy for you!

Mariness Chata / Mariness Chata & Associates / (661)317-3332 marinesschata@outlook.com    BRE#01082675

 

Can You Buy A Home with A Reverse Mortgage?

Reverse mortgages allow seniors (62 and older) to stay in their homes without any mortgage payments by borrowing against the equity of their homes without a requirement to pay it back until the borrower dies or the house is sold.

For some seniors, this is a welcome solution as they have no intention or need to move, and it frees them from a mortgage payment allowing them to have a greater quality of life with their fixed income.  For others, the ideal solution would be to sell and move closer to family or purchase a smaller home, or yet one that would fit their physical needs best. Unfortunately, the option is not available to some of these seniors as their fixed monthly income would not be sufficient to pay for the new house’s mortgage payments.

The ability to purchase a new home using the proceeds of the sale of the existing home and financing the balance with a Reverse Mortgage allows them to live in the new home free of monthly mortgage payments.

This type of loan product is called HECM – Home Equity Conversion Mortgage and in 2008 the loan evolved to include a new variation that allowed senior homeowners the option of purchasing a new home as well. 

The HECM for Purchase allows a senior to move to another principal residence that best fit their needs and to obtain a reverse mortgage. The buyer’s down payment will be from the sale of the previous home or other savings.  The equity earned through the down payment and the new home’s value is then used to calculate the reverse mortgage loan amount.  All or part of the reverse mortgage funds then covers the remaining cost of the home, just like with a traditional mortgage.

The benefit to financing with a reverse mortgage is that instead of paying the loan back every month over time like a traditional mortgage, reverse mortgage repayment is deferred to when the loan matures This way, senior borrowers on a fixed income can finance the purchase of a new home without the burden of having to make monthly mortgage payments. Borrowers are responsible for paying property taxes, homeowner’s insurance, and for home maintenance.

For more details on this loan program and to learn how it could benefit you, consult with a local lender that has vast experience with Reverse Mortgages.  Feel free to reach me at any time for more details and to discuss the options available to you.

Proven Method To Pay Off Debt Fast

We all have or have had lingering debt that took quite a long time to get paid off.  Managing several open accounts and paying some amount towards each one can be a burden when the balances are not going down.

Here is a proven method to pay off your accounts faster than you ever thought.  Once the debt is gone you can start saving it for a home or investing in your retirement.  Dave Ramsey calls it the “Debt Snowball Method”. It is quite simple actually, and very efficient.

Here is how it works:  “you pay off debts in order of smallest to largest, gaining momentum as each balance is paid off. When the smallest debt is paid in full, you roll the money you were paying on that debt into the next smallest balance”.

“It looks something like this:
Step 1: List your debts from smallest to largest.
Step 2: Make minimum payments on all your debts except the smallest.
Step 3: Pay as much as possible on your smallest debt.
Step 4: Repeat until each debt is paid in full.”

As you start celebrating the elimination of one account after another, you’ll probably feel more positive and encouraged.  Being in control of your finances will allow you to plan for more meaningful purchases or investments towards your future. 

For more information and details about the Snowball Method check out  https://www.daveramsey.com/blog/get-out-of-debt-with-the-debt-snowball-plan.  Whether you chose to use this method or any other methods available to you, I encourage you to take control of your finances and hopefully teach others to do the same.  Your success story will certainly motive others to do the same.

Thinking about buying or selling a home? Call me at any time.  I am never too busy for you.

Mariness Chata / Mariness Chata & Associates / (661)317-3332

 

 

 

 

 

 

How to Get Money To Improve A Fixer-Upper

We can’t help but be impressed with the renovation masters from TV shows such as Fixer Upper, Flip Or Flop, Property Brothers and others.  Some of us are up to the task of buying a home that needs work that includes renovating and repairing it to make it our own.

The good news is that there are several loan programs tailored to help you do just that: purchase that home that you love but needs work. Here are some loan options that you can take advantage of.

• FHA 203K Streamline – This is a loan where buyers can put down 3.5% and get up to $35,000.00 for repairs, home improvements. This loan must be owner-occupied.
• FHA Standard 203K – This loan can be done up to the county limits with 3.5% down. If you go over the $35,000.00, then you would need to have a HUD consultant assist you in getting bids and approving the improvements.  This loan must be owner-occupied.
• Fannie Mae Renovation Loan – This loan can be done to the county limits with 5% down.  Money can be used for improvements and repairs.  There is no consultant and rates are very competitive.  This loan must be owner-occupied.
• Private Money Rehab Loan – This can be done on an investment property. Minimum down would be 25%.

The first step before going out there and start shopping for a fixer upper is to sit down with a trusted local lender and review all the guidelines for each of those loans to find out which one would benefit you the most. Understanding the entire process and choosing to work with a Realtor that is also knowledgeable and familiar with it will avoid confusion that can cause you to miss out on an opportunity.

Thinking about buying or selling a home?  Contact me at any time.  I am never too busy for you.

         Mariness Chata / Mariness Chata & Associates / (661)317-3332

 

 

Low Downpayment Loans: Are They Real?

First time home buyers that have not been able to save up a lot of money to buy a home do not have to give up on the homeownership dream.  There are several loan programs created to help them out.

Here goes a list of several options that can help.  To find out if you would qualify for any of these programs please check with your local lender.

• First-time Buyer Tax Credit – This allows buyers to get a tax credit for 20% of the interest they pay on a loan!  This could save the average buyer over $3000.00 year as long as they own their home.
• CalHFA Loan  – This allows buyers to buy with no money down as long as they are first-time buyers making less than $128,000.00 annually!
• CHENOA – Down payment assistance and the down could be forgivable if your income is less than 115% of the median income in your county.
• Home ready and Home Possible – Not first-time buyer programs, but a buyer can save hundreds of dollars a month with lower rates and lower PMI rates.
• CALHFA Teacher Loan – Rewards teachers and staff who serve California Public Schools.  Down payments assistance up to $15,000.00.

(Courtesy of Mike Meena)

Thinking about buying or selling a home?  Contact me at any time.  I am never too busy for you!

Mariness Chata/ Mariness Chata & Associates / (661)317-3332

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Loan Amount X Income: How To Calculate It?

Based on today’s interest rates, we can use the following calculations as a guide to see how much mortgage you can afford.  The big caveat is that your situation is unique, and this is in no way a loan pre-qualification. Meeting with a lender to go over your situation is the only way to find out for sure what is the best loan scenario and the most you can qualify for. Also, there are many other loan programs available out there.  You have options like FHA, VA, Self-employed loans and many other options to fit your particular situation. Let’s use $100,000.00 per year income as an example: ●        20% down on a conventional loan. Great credit and No debts = approximately $790,000.00 purchase price and monthly payment would be approximately $4,150.00 including taxes and insurance. ●        5% down on a conventional loan. Great credit and No debts = approximately $645,000.00 purchase price and monthly payment would be approximately $4,150.00 including taxes, PMI and insurance. ●        3.5% down on an FHA loan. Medium credit and No debts = approximately $595,000.00 purchase price and monthly payment would be approximately $3,900.00 including taxes, PMI and insurance. Here are a couple of scenarios for anyone that have bills to pay, like most of us. 20% down on a conventional loan. Great credit and $1000 in monthly car payments and credit card bills = approximately a $600,000.00 purchase price with a monthly mortgage payment of $3150.00 including taxes and insurance. 5% down on a conventional loan. Great credit and $1000 in monthly debts =  approximately a $490,000.00 purchase price with a monthly mortgage of approximately $3150.00 including taxes, PMI and insurance. The above calculations are for loan amounts up to $679,650.00, but these are just rough estimates.  Your personal unique situation will need to be analyzed by your lender. (Above information was a courtesy of Mike Meena). Thinking about buying or selling a home? Contact me at any time.  I am never too busy for you! Mariness Chata / Mariness Chata & Associates / (661)317-3332

Solar Panels and Tax Considerations

I received this great information from Theresa M. Stewart, CPA and I thought about sharing it with you to help clarify the matter of Solar Panels and its tax benefits.

Solar energy is growing, and California is leading the way. More and more Californians each year are installing solar panels on their home, businesses, and rental properties, and the energy cost savings can be substantial.

There can also be substantial tax savings as you may get a tax credit of up to 30% of the cost of buying and installing the panels.

If you are considering putting solar panels on your property, beware that there are many aggressive salespeople who are misrepresenting the tax savings that you may be entitled to. Note the following:

• Leasing solar panels may be the most economical choice for you; however, tax credits are only available if you purchase the panels;
• Roof replacement and repair costs are typically not available for solar credits;
• If you finance the purchase of the solar panels through any of the programs that allow you to make your finance payments through your property taxes, that portion of your property taxes is not deductible as property tax;
• If you install solar panels on your business or rental property, then you may be required to pay back some or all of the tax credits if you sell the property or convert it to personal use within five years of installing the solar panels; and
• If you are an owner of a partnership, LLC, or S corporation that installs solar panels on its property, then you may be able to claim the tax credits on your personal income tax return, but special rules may limit your credit.

There are other tax and nontax considerations regarding whether you should lease or buy your panels or whether you should go with solar at all. Please contact your Tax Accountant or CPA to discuss.

Thinking about buying or selling a home? Contact me at any time.  I am never too busy for you!

Mariness Chata / MarinessChata@outlook.com / (661)317-3332  

Access Information on Homes For Sale and Sold Prices In Your Neighborhood HERE!

What Are Appraisers Looking For?

Agents and borrowers alike often find the appraisal process confusing and opaque – it’s why we consistently field questions on what appraisers look for when inspecting a property and how agents can best prepare. Not only can appraisers’ opinions on value make or break a deal, but they also play a crucial role in determining if the property in question meets all health and safety standards required for a clean appraisal (also referred to as the Minimum Property Standards, or MPS).

Though an appraisal does not replace a full home inspection, Underwriters and Investors rely on the appraiser’s report to determine if the property meets the MPS – this is true of conventional, FHA, and VA appraisals.

FHA and VA appraisals do, however, have slightly different health and safety checks that are required during the home inspection. B/c these different checks can be difficult to parse out online, we created a list below of the common health and safety checks required of all 3 types of appraisals, and the specific checks required for only FHA and VA.

CONVENTIONAL, FHA & VA

• Test for a properly working and strapped heater
• Validate every bedroom has 2 points of egress
• Ensure oven hood is present in any full kitchen
• Verify that there are properly placed CO and Smoke detectors
• Identify any exposed wiring or missing electric box cover plates
• Address any water damage issues
• Verify adequate heat source (does not need to be permanent)
• Check for evidence of termite damage
• Check for signs of foundation damage
• Verify no other obvious health and safety issues present (broken glass, broken doors/walls, animal droppings, etc.)

FHA & VA

• Identify any chipping, peeling or cracked lead-based paint – interior and exterior.
• Verify the property has proper drainage
• Test for permanent working heat-source
• Test for adequate water pressure (both hot and cold) and ensure no water leaks
• Test for a working oven hood/fan (carbon monoxide danger)
• Ensure major appliances/garage door opener work
• If the garage is attached, ensure the door from house to garage is self-closing
• Verify roofs have at least a 3-year remaining life
• Complete a head and shoulder inspection of attic and crawl space.

(Beau McGlasson)

Thinking about buying or selling a home?  Contact me at any time.  Let’s talk about your options and create a game plan to achieve your goal.  I am never too busy for you. 

How Much Is Your Home Worth? Click HERE for latest sales in your area.

Mariness Chata / Mariness Chata & Associates / (661)317-3332

 

What Is A Seller’s Market?

Buyers and sellers often recognize changes in the market after the changes have already affected them. Homeowners who consider selling their homes but stay on the sidelines watching sales pass them by often miss the boat.

A seller’s market, like all other markets, is not a permanent situation and can change anytime. The opportunity to sell a home for the highest possible price will not last forever.

Buyers are often tentative and second-guess the market by overanalyzing property values. Many times, waiting for an exceptional deal or the perfect home in the desired price-point is not a wise move in a seller’s market. The combination of a low inventory of available homes, rising prices, and the expanding number of buyers in the market may result in a buyer losing the opportunity to acquire the desired home unless the buyer takes quick action. 

Pricing a home under these conditions is not a license to grossly overprice it. If a home is listed far above the market value, it will not sell and even after several price reductions, it may sell for less than the desired market value. Many of us know about a home that has been for sale for several months while surrounding homes sold quickly.

The key to buying or selling a home in this market is to understand it and to have access to recent data on what is happening in the area that you are looking to buy or sell a home. Also, most importantly, it needs to fit your short and long-term needs and goals. 

Thinking about buying or selling a home?  Contact me at any time.  Let’s talk about your options and create a game plan to achieve your goal.  I am never too busy for you. 

Click HERE to search for homes for sale and sold prices in your area

Mariness Chata / (661)317-3332 / MarinessChata@outlook.com