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Whether you are interested in buying or selling, Lea will guide you through this process effectively and professionally, handling any problems which
may arise during the transaction. In each case, Lea will look out for your best interest in this most important experience! | Q: | How do I Examine a Foreclosure before purchase | | A: | Buyers considering a foreclosure property should obtain as much information as possible from the
lender about the range of bids being sought. It also is important to examine the property. If you are unable to get into a foreclosure property,
check with surrounding neighbors about the property's condition.It also is possible to do your own cost comparison through researching comparable
properties recorded at local county recorder's and assessor's offices, or through Internet sites specializing in property
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| Q: | Why buy a house? | A: | Here
are some frequently cited reasons for buying a house: * You need a tax break. The mortgage interest deduction
can make home ownership very appealing.
* You are not counting on price appreciation in the short term.
* You can
afford the monthly payments.
* You plan to stay in the house long enough for the appreciation to cover your transaction
costs. The costs of buying and selling a home include real estate commissions, lender fees and closing costs that can amount
to more than 10 percent of the sales price.
* You prefer to be an owner rather than a renter.
* You can handle the
maintenance expenses and headaches.
* You are not greatly concerned by dips in home values.
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| | Q: | What can I afford? | | A: | Know what you can afford is the first rule of home buying, and that depends
on how much income and how much debt you have. In general, lenders don't want borrowers to spend more than 28 percent
of their gross income per month on a mortgage payment or more than 36 percent on debts. It pays to check with several lenders before
you start searching for a home. Most will be happy to roughly calculate what you can afford and pre-qualify you for a loan.The price you can afford to pay for a home will depend on six factors:
1. gross income
2. the amount of
cash you have available for the down payment, closing costs and cash reserves required by the lender
3. your outstanding
debts
4. your credit history
5. the type of mortgage you select
6. current interest ratesAnother number lenders use to evaluate
how much you can afford is the housing expense-to-income ratio. It is determined by calculating your projected monthly housing
expense, which consists of the principal and interest payment on your new home loan, property taxes and hazard insurance (or
PITI as it is known). If you have to pay monthly homeowners association dues and/or private mortgage insurance, this also
will be added to your PITI.This ratio should fall between 28 to 33 percent, although some lenders will go higher under certain
circumstances. Your total debt-to-income ratio should be in the 34 to 38 percent range.
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| | Q: | How much will I spend on maintenance expenses? | | A: | Experts generally agree that
you can plan on annually spend 1 percent of the purchase price of your house on repairing gutters, caulking windows, sealing
your driveway and the myriad other maintenance chores that come with the privilege of homeownership. Newer homes will cost
less to maintain than older homes. It also depends on how well the house has been maintained over the years.
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| | Q: | Where do I get information on housing market stats? | | A: | A real estate agent is a
good source for finding out the status of the local housing market. So is your statewide association of Realtors, most of
which are continuously compiling such statistics from local real estate boards. For overall housing statistics, U.S. Housing Markets
regularly publishes quarterly reports on home building and home buying. Your local builders association probably gets this
report. If not, the housing research firm is located in Canton, Mich.; call (800) 755-6269 for information; the firm also
maintains an Internet site. Finally, check with the U.S. Bureau of the Census in Washington, D.C.; (301) 495-4700. The census
bureau also maintains a site on the Internet. The Chicago Title company also has published a pamphlet, "Who's Buying
Homes in America." Write Chicago Title and Trust Family of Title Insurers, 171 North Clark St., Chicago, IL 60601-3294.
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| | Q: | What is the standard debt-to-income ratio? | | A: | A standard ratio used by
lenders limits the mortgage payment to 28 percent of the borrower's gross income and the mortgage payment, combined with
all other debts, to 36 percent of the total. The fact that some loan applicants are accustomed to spending 40 percent of their monthly income
on rent -- and still promptly make the payment each time -- has prompted some lenders to broaden their acceptable mortgage
payment amount when considered as a percentage of the applicant's income.Other real estate experts tell borrowers facing rejection
to compensate for negative factors by saving up a larger down payment. Mortgage loans requiring little or no outside documentation
often can be obtained with down payments of 25 percent or more of the purchase price.
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| | Q: | How long do bankruptcies and foreclosures stay on a credit report? | | A: | Bankruptcies
and foreclosures can remain on a credit report for seven to 10 years.
Some lenders will consider an borrower earlier if they have reestablished
good credit. The circumstances surrounding the bankruptcy can also influence a lender's decision. For example, if you
went through a bankruptcy because your employer had financial difficulties, a lender may be more sympathetic. If, however,
you went through bankruptcy because you overextended personal credit lines and lived beyond your means, the lender probably
will be less inclined to be flexible.
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| | Q: | What is Fannie Mae's low-down program? | | A: | Fannie Mae is expanding the
availability of low-down-payment loans in an effort to help more people nationwide qualify for a mortgage. Two new programs will help potential
buyers overcome two of the most common obstacles to home ownership, low savings and a modest income.To address many first-time buyers'
struggles to save the down payment, Fannie Mae developed Fannie 97. The program provides 97 percent financing on a fixed-rate
mortgage with either a 25- or 30-year loan term through Fannie Mae's Community Home Buyers Program.Fannie Mae's new Start-Up Mortgage
will assist buyers with a 5 percent down payment who are at any income level. Yet applicants do not need as much income to
qualify and less cash for closing than with traditional mortgages. Borrowers will receive a 30-year, fixed-rate mortgage with
a first-year monthly payment that is lower than the standard fixed-rate loan.Freddie Mac, Fannie Mae's counterpart, also offers
low-down-payment loan programs.
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Lea Underwood, REALTOR® - Prudential Network Realty
375 Atlantic Blvd Suite 1 - Atlantic Beach, FL 32233
c: 904.571.0790 - o: 904.241.2417 x 213 - f: 904.241.7766
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is a service mark of The Prudential Insurance Company of America. Equal Housing Opportunity. 