Financing Varieties

When someone asks me what types of financing are available, I usually start with the most typical and work my way from there.  Such as the Conventional, FHA, VA and sometimes USDA loans.  But often we get to talking about other aspects of real estate and I don't finish that long list-- so I wanted to highlight a couple of options that can be forgotten.  

One is the manufactured financing, which is alive and well.  Yes, after the market crashed years ago, trying to find manufactured financing was difficult to impossible.  But as the years went by, more and more products became available again.  Rick Costa of Bay Equity Home Loans has supplied me with a flyer of information regarding manufactured home loans which includes Conventional, FHA, and VA loans...

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 For those loans with low down payments, I usually think of the 5% Conventional and 3.5% FHA loan, but Rick also showed me they have a 3% down payment loan program to those who qualify that includes a Down Payment Assistance (grant) to help those qualified to purchase.  

So many types of loan products are out there!  This is one of many, many reasons why a potential buyer should find a lender they are comfortable with (or ask the real estate agent they are working with for suggestions and begin by interviewing them).  If you are not comfortable with the person, then interview another lender, by all means.  This will be a long road and I want to know you are comfortable with who you are working with along the way!

You can reach me at www.MendoHomes.com for more information.  MendoRealEstate@gmail.com and 707-354-2999 (cell).  Realtor Karena Jolley with Coldwell Banker Mendo Realty Inc. license 01482063.  If you are currently working with an agent please do not consider this a solicitation. 

When Dropping Interest Rates Is Not Always Good...

In reading a recent article on interest rates, it was an interesting point that they are making regarding the expected drop in mortgage rates.  To buyers, a drop in mortgage rates is great because their payment drops or buying power increases.  So as investors are running to the bond markets and away from the volatile stock markets, the mortgage rate Is apparently going to drop and please the buyers—but maybe not all buyers!  This is because the banks lending may not see the jumbo loans as attractive at lower rates than previously, and may not offer as many of the larger loans, choosing to concentrate on the more conforming government loans.  So anyone looking to purchase in the higher price ranges may find it much harder to get those jumbo loans as rates drop… in Mendocino County the conforming limit is $417,000 so anything above becomes a jumbo loan.  In Sonoma County the limit is $554,300.  If a buyer is looking for a large home or home on land, these limits can be reached and exceeded very quickly!  So having the interest rate drop is not always the best thing to happen…

(the article I was reading can be located at: http://realtormag.realtor.org/daily-news/2016/02/22/mortgage-rates-may-be-headed-for-record-low?om_rid=AAC4q5&om_mid=_BWy2jFB9K9eisH&om_ntype=RMODaily)

Karena talks to First Time Homebuyers Part Two

Hello, this is Karena Jolley with Coldwell Banker Mendo Realty Inc.  Today we’re picking up where I left off in the first video to first time homebuyers.  Now we’re ready to start looking at homes in the price range that you have been qualified for.  Some buyers are looking for a fixer so they can work and put equity into the home. Depending on the type of loan, we may need to look for more of a cosmetic fixer because loans such as FHA, VA and USDA will be much pickier about property condition.  With VA loans, the lender will want to see a very clean home with a cleared Pest and Fungus report.  With FHA and USDA loans, the home must have all appliances functioning and be clean enough that the appraiser does not take note of rotten boards, holes in the walls or floor, any structural or mildew issues, etc.  So, a home with a rotten deck, hole in the roof, obvious signs of wood rot, etc will raise too many issues and prevent the loan from being approved.  However, if the home simply has dated flooring, lighting, and worn features, then it could very well be fine for purchase! 

At every home we will do our best to point out obvious issues that we notice when we show you properties—we are not experts or inspectors and cannot find all issues, but when a condition pops out at us are glad to point it, give our thoughts on it and suggest an inspector that could check it out. 

So, when we are looking at homes, you will be seeing if you like the home, floorplan, amenities, location, etc while we look and see if there is anything we want to advise you on.  When we move forward in making an offer on a house, it’s best to guess what repairs and maintenance the home needs and offer a comfortable price taking this into account.  If an offer is accepted and inspections reveal more than what we were guessing, then that is where renegotiating on price or asking the seller to do repairs comes in to play.

Next up will be a discussion of the ins and outs of the offer process!

Karena talks to First Time Homebuyers part one

Hi, this is Karena Jolley with Coldwell Banker Mendo Realty Inc. and if you are a first time homebuyer, then there are many questions I would like to help answer and help you with to make the buying process so much more comfortable.  There is too much for me to discuss them all in this short video, but I wanted to briefly talk about a couple of important aspects to get you started.  First is knowing what you are qualified for and what your options are.  It sounds easier to jump into looking at houses first, but unfortunately I have seen clients heartbroken because they have found a home but then cannot qualify for it, or the payments are too high, or they cannot get qualified fast enough and another offer beats them out.  So, give me or my partner Kelsi a call or email and we can help get you connected to an experienced lender who will show you your options.  There are many types of loans out there with different down payment requirements, so knowing ahead of time is great preparation.  And many people ask me about interest rates, so a good local lender Rick Costa has provided this great brochure of 30 things that affect rates.  It helps explain why one person gets a different rate vs another person-- besides the fact that interest rates are constantly moving up and down in the market!  

Once you know what you are qualified for, then we need to talk so that I can understand what you would like in a house and property and what location.  It helps me to keep an eye on the market for you, and also to create a custom search so that you are notified as soon as something comes onto the market too.  Then it's time to go out looking!  And that brings up a whole host of other questions that I would like to cover in future videos, so that you can better understand the process.

Please feel free to contact me with questions

Insurance for Homes

Hey, everyone!  Getting insurance for your newly purchased home is not as easy a venture as it used to be.  There are still many insurance carriers, but the cost has definitely gone up and certain areas are being penalized depending on its location within the apparently updated maps showing high fire areas and also the flood zones.  

This absolutely affects qualifying to purchase and also your payment per month.  Before you put an offer on a property, your lender should give you an estimate of what your qualifying range is, your esimated payment per month, and your estimated closing costs to obtain your loan to purchase.   The lender will do their best to guess the insurance cost-- and you will be paying for your first year upfront as part of your closing costs-- and so with these new, higher insurance rates-- we are all getting thrown for a loop and scrambling to get an idea of the new insurance rates on properties.  I will update you when I see some sound numbers and get a good idea of how much it's changed.  For now, I am just seeing a home's rate change here and there, and can say it's definitely gone up, not down!!

Here's another bit of fun-- flood insurance.  Get ready to make sure there is a flood elevation certificate so the lender and insurance company can see the elevation of the insurable buildings vs the 100 year flood zone elevation.  Good news is that some properties can see a dramatic reduction in the flood insurance premium by getting this certificate.  Bad news is that it's another $400 and up cost to every escrow with insurable buildings and a buyer getting a regular loan (private money loans may not require this but talking about private money loans is a whole other discussion I shall have later!).   If you already have a flood elevation certificate on your property, keep it!!  They are not automatically filed with the county or government agency and if you lose the paperwork (some bank owned properties may have had them done in the past but the paperwork is gone, etc) then you may have to get it done again!  At the end of the day, flood insurance premiums have gone up, too, so even with a reduction in premium for a certificate showing the house isn't as badly in the flood zone as first thought, it will still cost more than it used to...

Underwriters and Water

Okay, so I am starting to see a trend towards getting really picky about wells and developed springs...  and even small water districts, too when it comes to loan conditions.  Recently there was a small water district whose name had Spring in it...  and once the underwriter saw that, they started asking lots and lots of questions.  Now we have done one water test and although there's NO fecal coliform, there is some plant bacteria-- so the underwriter is requiring we get a chlorination system installed...  and I expect to have to do another water test after installation, too.  

Here's my concern.  SO many properties in my area are on wells, shared wells, small water districts, and developed springs...  so are we now looking at production tests and water quality tests for all?  That will add a significant cost to the escrow and transaction...  who will pay for it?  Are we having to think of requesting the sellers to pay for it when writing the purchase offer?  And how much is enough information for the underwriters?

I sincerely hope that the underwriters stop pushing in every direction with more and more conditions, because they will simply begin making it impossible for a buyer to get a loan.  Reasonable requests, yes!  But waiting until all other conditions are cleared and THEN putting forth new questions and conditions has been throwing a curveball into our escrows and jeapordizing timeframes and transactions right and left.  It's stressful enough for a buyer to purchase today!!  They don't need these added surprises, too...