Lenders are loaning in Your area. Ask me about Hud’s renovation loan program.
Source: HUD $100 Down Payment Program
Lenders are loaning in Your area. Ask me about Hud’s renovation loan program.
Source: HUD $100 Down Payment Program
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“Great South Suburban Homes – First Time Buyer Dream, Needs Some Work”
Chrisha Mitchell – Realtor
To sell or to rent. It’s a tricky question, especially in a down market. If you are relocating or just ready to move on from your ball and chain of a house, renting might make more sense than selling. Here is a quiz to help you decide whether you should sell or rent your home.
Here’s an example of a situation where a couple had to examine how affordable it was for them to sell their house. The couple knew they wanted to move to a new home, but they live in an area of Florida where houses have halved in value since the peak in 2006 – the same year their house was purchased. As they debated whether to sell their home, they realized that if they chose to sell, they would be forced to take a $150,000 cash loss, not including closing costs. They looked at the numbers and decided they could not afford to sell their home. For them, it made more sense to rent their home and purchase a second home that then became their primary residence. When you rent, you may take a loss on a monthly basis, but you do not have to come up with the cash to satisfy the loan immediately upon sale. If you sell at a loss, then there is no tax benefit.
Research the going rents in your market using tools like the MLS listings andcraigslist.org. Look for comparable properties in your neighborhood or similar neighborhoods to get sense for what your home might bring in as a rental. It is important to take features like square footage, number of rooms and upgrades such as granite kitchen counter tops, location and proximity to desirable schools into consideration while looking for comps. You can also talk to real estate agents and property managers to get their take on pricing. If it turns out that you can’t cover your mortgage with the projected rent, then calculate how much of a loss you can take to still be able to afford to rent the house.
You can often take losses and costs from rental properties as tax deductions. In addition to deducting the cost of your mortgage beyond the rental income, landlords can often deduct all expenses associated with the rental, including property management and maintenance fees. Consult your accountant to ensure that you know what the costs and benefits will be from a tax perspective before you make the decision to rent rather than sell your home.
If you don’t mind sacrificing your credit score for a few years, you can’t afford to rent and you really need to get out of your house, then a short sale is always an option. A short sale is a real estate transaction in which the bank agrees to accept less than the amount owed on the mortgage to release the owner from their financial obligation. For example, if the mortgage on a home is $200,000 and a buyer makes an offer for $150,000, the bank may accept this offer and forgive the additional debt. Besides mucking up your credit, a short sale can also contribute to your tax bill. Often, the forgiven amount (in this case, $50,000) can be added to your tax bill as taxable income. It is important to consult a lawyer or accountant so that you know the details of how a short sale will impact your taxes and your credit before you move ahead.
Depending on your immediate financial situation and long-term outlook, it can make more sense to rent rather than sell. In some cases, a short sale is the best remedy for escaping an underwater property and moving on with your life. Before you make any decision about renting or selling, be sure to consult a lawyer or accountant for customized consultation so that you fully understand the tax ramifications and benefits given your unique situation.
Chrisha Mitchell – Realtor & Broker
Chicago IL – Divorce is rarely easy and often means a lot of difficult decisions. One of the most important decisions is what to do about the house.
In the midst of the heavy emotional and financial turmoil, what you need most is some non-emotional, straightforward, specific information and answers. Once you know how a divorce affects your home, your mortgage and taxes, critical decisions are easier. Neutral, third party information can help you make logical, rather than emotional, decisions.
Probably the first decision is whether you want to continue living in the house. Will the familiar surroundings bring you comfort and emotional security, or unpleasant memories? Do you want to minimize change by staying where you are, or sell your home and move to a new place that offers a new start? Only you can answer those questions, but there will almost certainly be some financial
repercussions to your decision process. What can you afford? Can you manage the old house on your new budget? Is refinancing possible? Or is it better to sell and buy? How much house can buy on your new budget?
To help you know what questions you should ask and how to arrive at the right answer for your specific situation, a FREE special report has been prepared by industry experts entitled “Divorce: What You Need to Know About Your House, Your Mortgage and Taxes”.
If you are interested in selling your Illinois home contact me to request your free report.
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Pass Your Home Inspection
Homebuyers Want to Know Your Home Inside And Out
“According to industry experts, there are at least 33 physical problems that will come under scrutiny during a home inspection when your home is for sale. Here are 11 you should know about if you’re planning to put your home up for sale.”
While homebuyers are as individual as the homes they plan on purchasing, one thing they share is a desire to ensure that the home they will call their own is as good beneath the surface as it appears to be. – Will the roof end up leaking? Is the wiring safe? What about the plumbing? – These, and others, are the questions that the buyers looking at your home will seek professional help to answer. According to industry experts, there are at least 33 physical problems that will come under scrutiny during a home inspection. We’ve identified the 11 most common of these and, if not identified and dealt with, any of these 11 items could cost you dearly in terms of repair. In most cases, you can make a reasonable pre-inspection yourself if you know what you’re looking for. And knowing what you’re looking for can help you prevent little problems from growing into costly and unmanageable ones.
11 Things You Need to Know to Pass Your Home Inspection
1. Defective Plumbing. – Defective plumbing can manifest itself in two different ways: leaking, and clogging. A visual inspection can detect leaking, and an inspector will gauge water pressure by turning on all faucets in the highest bathroom and then flushing the toilet. If you hear the sound of running water, it indicates that the pipes are undersized. If the water appears dirty when first turned on at the faucet, this is a good indication that the pipes are rusting, which can result in severe water quality problems.
2. Damp or Wet Basement. – An inspector will check your walls for a powdery white mineral deposit a few inches off the floor, and will look to see if you feel secure enough to store things right on your basement floor. A mildew odor is almost impossible to eliminate, and an inspector will certainly be conscious of it. It could cost you $200-$1,000 to seal a crack in or around your basement foundation depending on severity and location. Adding a sump pump and pit could run you around $750 – $1,000, and complete waterproofing (of an average 3 bedroom home) could amount to $5,000-$15,000. You will have to weigh these figures into the calculation of what price you want to net on your home.
3. Inadequate Wiring & Electrical. – Your home should have a minimum of 100 amps service, and this should be clearly marked. Wire should be copper or aluminum. Home inspectors will look at octopus plugs as indicative of inadequate circuits and a potential fire hazard.
4. Poor Heating & Cooling Systems. – Insufficient insulation, and an inadequate or a poorly functioning heating system, are the most common causes of poor heating. While an adequately clean furnace, without rust on the heat exchanger, usually has life left in it, an inspector will be asking and checking to see if your furnace is over its typical life span of 15-25 yrs. For a forced air gas system, a heat exchanger will come under particular scrutiny since one that is cracked can emit deadly carbon monoxide into the home. These heat exchangers must be replaced if damaged -they cannot be repaired.
5. Roofing Problems. – Water leakage through the roof can occur for a variety of reasons such as physical deterioration of the asphalt shingles (e.g. curling or splitting), or mechanical damage from a wind storm. When gutters leak and downspouts allow water to run down and through the exterior walls, this external problem becomes a major internal one.
6. Damp Attic Spaces. – Aside from basement dampness, problems with ventilation, insulation and vapor barriers can cause water, moisture, mold and mildew to form in the attic. This can lead to premature wear of the roof, structure and building materials. The cost to fix this damage could easily run over $2,500.
7. Rotting Wood. – This can occur in many places (door or window frames, trim, siding, decks and fences). The building inspector will sometimes probe the wood to see if this is present – especially when wood has been freshly painted.
8. Masonry Work. – Rebricking can be costly, but, left unattended, these repairs can cause problems with water and moisture penetration into the home, which in turn could lead to a chimney being clogged by fallen bricks or even a chimney, which falls onto the roof. It can be costly to rebuild a chimney or to have it repointed.
9. Unsafe or Overfused Electrical Circuit. – A fire hazard is created when more amperage is drawn on the circuit than was intended. 15 amp circuits are the most common in a typical home, with larger service for large appliances such as stoves and dryers. It can cost several hundred dollars to replace your fuse panel with a circuit panel.
10. Adequate Security Features. pass your home inspection – More than a purchased security system, an inspector will look for the basic safety features that will protect your home such as proper locks on windows and patio doors, dead bolts on the doors, smoke and even carbon monoxide detectors in every bedroom and on every level. Even though pricing will vary, these components will add to your costs. Before purchasing or installing, you should check with your local experts.
11. Structural/Foundation Problems. – An inspector will certainly investigate the underlying footing and foundation of your home as structural integrity is fundamental to your home.
When you put your home on the market, you don’t want any unpleasant surprises that could cost you the sale of your home. By having an understanding of these 11 problem areas as you walk through your home, you’ll be arming yourself against future disappointment.
For more information contact “The Realty Team” (708) 966-9282.
Pass Your Home Inspection
“Subtle changes in the way you approach mortgage shopping, and even small differences in the way you structure your mortgage, can cost or save you literally thousands of dollars and years of expense.”
Mortgage regulations have changed significantly over the last few years, making your options wider than ever.
Get the right Information
Whether you are about to buy your first home, or are planning to make a move to your next home, it is critical that you inform yourself about the factors involved.
Industry research has revealed that there are 6 common mistakes that most homebuyers make in mortgage shopping that can have a significant impact on the outcome of this critical negotiation. If handled correctly, these issues could result in a mortgage that will cost you less over a shorter period of time.
6 Things You Must Know Before Obtaining a Mortgage
Before you commit your hard earned dollars to monthly mortgage payments, consider these 6 issues. Effective consideration of these important areas can make your payments work much harder for you.
1. You can, and should, get pre-approved for a mortgage before you go looking for a home. – Pre-approval is easy, and can give you complete peace-of-mind when shopping for your home. Your local lending institution can provide you with written pre-approval for you at no cost and no obligation, and it can all be done quite easily over-the-phone. More than just a verbal approval from your lending institution, a written pre-approval is as good as money in the bank. It entails a completed credit application, and a certificate, which guarantees you a mortgage to the specified level when you find the home you’re looking for.
2. Know what monthly dollar amount you feel comfortable committing to. – When you discuss mortgage pre-approval with your lending institution, find out what level you qualify for, but also pre-assess for yourself what monthly dollar amount you feel comfortable committing to. Your situation may give you a pre-approval amount that is higher (or lower) than the amount of money you would want to pay out each month. By working back and forth with your lending institution to determine what this monthly amount is, and what value of home this translates into at today’s rates, you won’t waste time looking at homes that are not in your price range.
3. You should be thinking about your longterm goals, and expected situation, to determine the type of mortgage that will best suit your needs. – There are a number of questions you should be asking yourself before you commit to a certain type of mortgage. How long do you think you will own this home? What direction are interest rates going in. and how quickly? Is your income expected to change (up or down) in the near term, impacting how much money you can afford to pay to your mortgage? The answers to these and other questions will help you determine the most appropriate mortgage you should be seeking
4. Make sure you understand what prepayment privileges and payment frequency options are available to you. – More frequent payments (for example weekly or biweekly) can literally shave years off your mortgage. Simply by structuring your payments so that they come out more frequently, will significantly lessen the amount of interest that you will be charged over the term. For the same reason, authorized prepayment of a certain percentage of your mortgage, or an increase in the amount you pay monthly, will have a major impact on the number of years you will have to pay and could shorten your payment term considerably. These two payment options can cut years off your mortgage, and save you thousands of dollars in interest. However, not every mortgage has these prepayment privileges built in, so make sure you ask the proper questions.
5. Ask if your mortgage is both portable and/or assumable. – A portable mortgage, where available, is one that you can carry with you when you buy your next home and avoid paying any discharge penalties. This means that you will not have to go through the entire mortgage process again unless you are making a move up to a much more expensive home. An assumable mortgage is one that the buyer for your home can take over when you move to your next home. This can be a very powerful tool at the negotiating table making it much easier and more desirable for a buyer to buy your home, and again saves you any discharge penalties.
6. You should seriously consider dealing with a Mortgage Expert.– —Consider dealing only with a professional who specializes in mortgages. Enlisting their services can make a significant difference in the cost and effectiveness of the mortgage you obtain. For example they can make the process faster thereby avoiding costly delays. Typically there is no cost or obligation to enquire.
For additional information contact “The Realty Team” 708-966-9282 or Click Here
This post was written by Chrisha Mitchell of Prospect Equities Real Estate.
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