Posted by Paul Sian on Thursday, April 6, 2023 at 7:00 AMBy Paul Sian / April 6, 2023Comment
How Do Construction Loans Work And When Are They Best to Use
Are you starting to think about buying a home? Have you looked at properties on the market, but nothing jumped out at you?
Maybe you have specific things you want in a home you can't find. If this sounds like you, custom building a home may be the route you want to take.
Building your own home will allow you to make your best choices from top to bottom.
But how do you go about financing a new home-building project? We will explore everything you should know about getting a loan for construction. Construction loans have a bit more work to them than traditional financing.
Let's examine what you need to know about construction loan financing.
What is a Construction Loan?
A construction loan is designed to cover the cost of building a new home. With a construction loan, a borrower will receive a lump sum of money that they can use to pay for the costs of building their new home. Construction loans are short-term and typically have a duration of one year or less.
A construction loan can be obtained through a bank or other financial institution. To qualify for a loan, the borrower must meet certain criteria, such as good credit and a reliable income.
The loan amount is typically based on the estimated cost of the home-building project.
Once the loan is approved, the money is typically disbursed to the borrower in stages. These stages are called...
Posted by Paul Sian on Thursday, February 16, 2023 at 7:00 AMBy Paul Sian / February 16, 20232 Comments
Walking Away From A Home Purchase Contract
After an offer has been accepted on a home a buyer has some options for walking away from the contract and possibly getting their earnest money back. Usually those times to walk away and get the earnest money back apply during the contingency periods written into the contract. A buyer can walk away though at any time from the contract up until the actual signing of all documents at closing. Walking away from a purchase contract though could result in the buyers losing their earnest money or worse being sued if there were no contract contingency clauses upon which they based their decision to cancel the contract. This article explores some of the different ways buyers can walk away from a contract to purchase a home and the consequences for doing so.
Most contracts to purchase a home should contain a contingency section which allows a buyer to have the home inspected for condition. A home with a bad condition may mean that the current offer price does not make sense. The buyer may also decide that based on the condition they no longer want to purchase the home. Whether the buyer can walk away from the home purchase contract based on a condition issue depends on the terms of the contract and the local laws that govern the real estate contract.
In the Greater Cincinnati Ohio area in the past the standard MLS (Multiple Listing Service) contracts that are provided for real estate agent use had flexible language that would allow a buyer to back out for almost any condition issue. The...
Posted by Paul Sian on Thursday, December 15, 2022 at 7:00 AMBy Paul Sian / December 15, 2022Comment
Buying A Home Without A Mortgage
The use of a mortgage to buy a home is what is used by a majority of homebuyers. Around 70% of homebuyers are using a mortgage when buying a home. There are other means with which to buy a home and this article looks at some of the alternatives and what to look out for when buying a home without a mortgage.
Buy a Home With Cash
One of the most commonly used means for buying a home and that does not involve taking out a mortgage is buying a home with cash. Many investors purchase homes with cash with the goal of fixing up the home and selling it for a profit or fixing it up, getting the home rented out and then getting a mortgage to cash out their equity.
There are also home buyers buying a home to live in with cash. These buyers may be getting their cash from savings, borrowing from retirement accounts, borrowing based on equity in stocks or other real estate, gifts from family members and other sources. Especially in a market where the mortgage rates are high, buying a home with cash to get a discount on the purchase price may be a good option for those who have access to cash. Once purchased with cash there are plenty of mortgage lenders who are willing to give a mortgage to that homeowner so they can get some of their cash out of the equity they have.
While cash purchases of homes allow a home buyer to close quicker than a mortgage purchase would allow that does not mean a cash buyer should rush things. Instead the cash buyer should seek to use all available contingencies to make sure that not only is the...
Posted by Paul Sian on Thursday, April 29, 2021 at 7:00 AMBy Paul Sian / April 29, 20212 Comments
Tips For Winning A Real Estate Bidding War
In today’s real estate market all over the US home buyers are seeing fewer homes available for sale and having to compete with multiple other buyers for those same homes. The end result is bidding wars where home buyers have to compete against other home buyers in hopes of getting the winning bid. There are some strategies that home buyers can use to put their offer on top and this article looks at those strategies and why they may be a good strategy or not.
Pay In Cash
A good way to beat out other buyers who will mainly be using financing to make the purchase of the home is to offer cash for the home. Sources of the cash can include 401(k) loans, loans from family members, bank or business lines of credit, cash savings and more. With cash the buyer can shorten the time period for closing (if the seller wants that) as well as waive the appraisal contingency. One less contingency in the offer means the seller has one less thing to worry about going wrong prior to closing. With a cash offer the seller also does not have to worry about a mortgage lender pulling the loan at the last minute. After closing the buyer always has the option to get a mortgage on the home and put the cash back from where they got it from.
Get A Mortgage Pre-Approval
The message about mortgage pre-approval is often repeated and bears repeating here. Going into a bidding war on a home without a pre-approval letter when buying a home with a mortgage...
Posted by Paul Sian on Thursday, January 14, 2021 at 12:00 PMBy Paul Sian / January 14, 2021Comment
Podcast: VA Mortgages
For this podcast I sat down with Trey Budke, mortgage loan officer with USA Mortgage where we discussed the VA mortgage and all the benefit it offers to active duty and veteran miltary service memebers. Learn about VA mortgage credit requirements, down payment requirements and more.
Posted by Paul Sian on Thursday, October 29, 2020 at 4:00 PMBy Paul Sian / October 29, 2020Comment
How To Write An Offer To Buy A Home
This article looks at how home buyers and/or their real estate agents should be filling out the Contract to Purchase a home document. Even though this focuses on the contract adopted by the Cincinnati and Dayton Area Boards of Realtors a lot of the terms are common to many contracts used to buy a home around the US. As with anything that is outside one’s area of expertise it is highly recommended that one consult with a local real estate agent or real estate attorney to make sure the contract they are using is filled out correctly and in accordance with local requirements.
Location and Money
Probably the two most important areas of the contract include the specific location of the property and the price being offered. Sometimes an address is not enough especially if the real estate being sold includes more than one parcel in the sale. So while an address is highly recommended, additional information like parcel identification number (PID), property description, or some other type of identification used by the local governing agency would be important to include in the contract to purchase.
How much is being offered is also important and the sellers will be paying close attention to that number. When using computer-based forms one only need enter in digits the amount being offered and the computer will write out the purchase price in words so as to limit confusion. $300,000.00 with a decimal point or comma in the wrong place can lead to some confusing numbers being thrown around. The written words three hundred thousand dollars with “$300,000.00” typed out means less confusion as to the offer price. Along...
Posted by Paul Sian on Thursday, May 7, 2020 at 11:30 AMBy Paul Sian / May 7, 2020Comment
New Construction Home Buying Process
Some home buyers may prefer to start from scratch and build a new home from the ground up. While there are developments that offer newly built homes often times those homes lack customizability and instead the home buyer may only find cookie cutter homes with some ability to decide on what types of interior upgrades they may add. Home buyers who want to get their own home plan put on paper and then get built will be looking at the custom build option which this article explores further.
Home buyers should not be talking just to one lender but comparing different lender offerings. Buyers can find different lenders to speak with through family and friend referrals and referrals from their real estate agent. Certain professions like doctors or veterans have available to them specific mortgage ...
Posted by Paul Sian on Thursday, April 23, 2020 at 7:00 AMBy Paul Sian / April 23, 2020Comment
Why Now More Than Ever It Is Important To Have A Mortgage Pre-Approval Letter When Buying A Home
With the impact of the COVID19 shutdowns still echoing throughout the economy many home buyers are wondering whether now is the right time to buy a home. Many still desire a home of their own for building equity, laying down roots or simply being able to say they own a home. With most home purchases happening with a mortgage it is very important that home buyers understand the process of getting a mortgage and get their pre-approval before they start looking for a home. Getting a pre-approval lined up ahead of time is critical due to the changes brought about as a result of the virus. This article explores some of the impact of those changes.
What Does A Pre-Approval Letter Do?
First and foremost, the process of sitting down with a lender for getting pre-approved should involve asking the lender what types of mortgage loans do they have and what will work best for you. Mortgages come with different down payment options and different payback options that buyers need to understand so they can fit the mortgage payment into their budget. Most home sellers will not take an offer seriously without a pre-approval letter and even more so during this time frame of the virus many home sellers will not allow buyers into their home without the same letter.
A pre-approval letter means a mortgage lender has analyzed a home buyers credit, debts and assets and determined they qualify for a mortgage loan to buy a home for no more than a certain amount. The pre-approval letter is basically a good to go decision by a lender that they will lend to a home buyer so they can buy a home. The...
Posted by Paul Sian on Thursday, February 6, 2020 at 7:00 AMBy Paul Sian / February 6, 20202 Comments
Major Things To Be Aware About In A Home Inspection Report
An inspection report on a home or investment property provides a general opinion on many conditions and factors of the property. The inspection report is not the final word when it comes to the condition and many inspection reports will state that a professional should be brought in to further evaluate a particular condition. That language is critical for home buyers to pay attention to since only through the opinion of a professional contractor can the true condition be known. This article explores those inspection areas where getting extra input is valuable.
Why Another Opinion May Be Needed
Since home inspectors are more general specialists in terms of the home, they do not hold themselves out to be experts in all of the systems of the home especially when some of those areas require licensing to work as a contractor. Examples of licensed contractor professions include plumbers, Heating Ventilation and Cooling (HVAC), and electricians. Licensing requirements vary state by state and certain other contractors may also require licensing.
Home inspections can make or break a sale. A home in great condition with very few problems to make note of will let buyers rest assured they are getting a good home with very little to address prior to move in. Homes with major issues can break a deal if the home buyer and seller cannot agree on repairs, can’t agree on a price reduction to account for the repairs, or the buyers are just plain turned off by the problems. A home inspection is the starting point for discovering the condition of...
Posted by Paul Sian on Thursday, November 21, 2019 at 7:00 AMBy Paul Sian / November 21, 20192 Comments
Should You Buy A House Directly From The Listing Agent?
Sometimes home buyers think they can get a better deal or get a leg up on the competition by dealing directly with the listing agent of the house. What ends up happening though is the buyer instead ends up overpaying and/or ends up getting a poor deal since they did not have anyone representing their best interests. The listing agent represents the seller and while it is possible for the listing agent to represent both parties in a transaction by doing so they have to be more neutral in a deal which results in no one really being represented at all. This article explores further why it is not a good idea for home buyers to go directly to the listing agent when trying to buy a home.
In the typical home buying transaction a seller will have their own agent and the buyer will have one as well. Each side being represented by their own agent then have their own best interests brought to the negotiating table. If a buyer’s agent happens to learn the seller is divorcing and needs to sell their home fast then that is something important that the buyer’s agent should share with the buyer. On the other hand if one agent is representing both the seller and the buyer they must take a more hands off approach and if that agent knew the seller was getting a divorce and that would factor into negotiations they would not be able to tell the buyer that.
Maybe the buyer believes they can represent themselves on their own without the need of an agent and use that as the reason for talking directly to the listing agent. In that case so long as...
Posted by Paul Sian on Thursday, September 19, 2019 at 7:00 AMBy Paul Sian / September 19, 2019Comment
What Should Buyers Be Reviewing On The Property Disclosure Form?
The property disclosure is an important document that sellers provide to potential buyers. With the property disclosure the sellers are listing out details about the condition of a home. Most states have laws governing the use of the property disclosure form as a means to help inform buyers about the house they wish to buy. Generally homeowners are required to disclose known (or should have known) conditions about the home they are trying to sell. Buyers should carefully review the disclosures because even if the home that looks great on the internet it may be one they wish to avoid if there are major issues disclosed about the home. This article looks about what buyers should know about the property disclosure form.
Use The Disclosure Form As A Screening Tool
Before a home buyer goes to visit a home they should be asking their real estate agent for a copy of the property disclosure form. The property disclosure form is often uploaded into the local MLS along with other disclosure documents to which their real estate agents have access to. Buyers should review the disclosure form for any condition they may consider to be a deal breaker before they visit the home. If the property disclosure forms mentions mold, foundation issues, bad roof, water leaks or something else many buyers may not want to view those homes as some of those conditions can prevent the buyer from using a traditional mortgage to make the purchase. By...
Posted by Paul Sian on Thursday, September 5, 2019 at 7:00 AMBy Paul Sian / September 5, 20192 Comments
Do I Have To Give Earnest Money When Buying A Home?
When buying real estate often times the buyer is expected to give some earnest money as part of the transaction. Earnest money is usually paid up front when the offer is accepted and is held in a trust account with the listing broker, the buyer’s agent broker or with the title company. The earnest money stays in a trust account until the real estate transaction is closed or when both parties agree to terminate the transaction and there is agreement as to where the money should go to. While earnest money is not a requirement it is highly recommended and this article will explore more about earnest money works in a real estate transaction.
Should You Give Earnest Money When Making An Offer?
Earnest money is in essence a good faith deposit that a home buyer or investment real estate buyer is giving that shows they have true interest in purchasing certain property. While earnest money is not a requirement it is highly recommended since it can show the level of interest a buyer has. It is in essence a down payment put towards the purchase of a home. Earnest money can be refundable depending on the terms of the real estate purchase contract. If the real estate purchase contract conditions the purchase on a home inspection, appraisal and/or the buyer being able to get a loan to purchase the property then the language of most standard contracts state if those conditions cannot be met the earnest money should be returned to the buyer.
In some commercial real estate transactions sellers will sometimes require some or all of the earnest money to become “hard” or non-refundable due to the time and complexity involved with commercial real estate. The...
Posted by Paul Sian on Thursday, August 29, 2019 at 7:00 AMBy Paul Sian / August 29, 20192 Comments
What Kind Of Paperwork Does One Need For A Mortgage Pre-Approval?
The first step when buying a home, buying investment real estate or buying real estate for business purposes should be getting pre-qualified or pre-approved for a loan. A pre-approval letter lets buyers know they have the ability to get a loan to buy real estate. Additionally it lets buyers know how much real estate they can afford and usually what the payment terms will be. By having one’s paperwork in order prior to starting the pre-approval process the buyer can ensure a pre-approval process that runs smoothly and is done quickly enough so they can start with the actual shopping for real estate.
Real Estate Buyer Who Are W2 Wage Earners
For those who work for an employer who provides them a W2 form at the end of the year the W2 form will be something lenders will want to see as part of the pre-approval process. Generally lenders are looking for a copy of the last two to three years of W2 forms provided from an employer. If a buyer works multiple jobs then make sure the W2s from each employer is presented as the income from those forms will be used to determine the buyers overall income. The more income a buyer can show the higher their pre-approval can be. The W2 also shows the stable income flow of the buyer which will help in making the determination to approve for a mortgage or not.
Lenders will also be looking for the last two pay stubs from the buyer’s job. The pay stubs show how much the buyers pay currently is and also details the deductions a buyer has from their paycheck. While the typical federal and state tax deductions, health plan deductions are expected if they lender does...
Posted by Paul Sian on Thursday, June 6, 2019 at 7:00 AMBy Paul Sian / June 6, 2019Comment
What To Know About Doctor Loans For Buying A House
While the mortgage programs for military veterans is common knowledge due to being sponsored by the federal government, less known about are doctor loan programs offered by many banks. Some loan programs are generally offered exclusively to doctors whereas others expand to include many others employed in the medical profession. Nurses, physician’s assistants, physical therapists and more may qualify for some of the programs depending on the lender. This article focuses on the doctor mortgage loan programs in particular and some of the information provided for this article is from Walt Wollet of Fifth Third Bank who is licensed to lend in 32 states and based in the Greater Cincinnati, Ohio area.
Why A Mortgage Loan Just For Doctors?
Fresh out of school doctors may have a large amount of debt from student loans but due to their earning potential they represent a good client to the banks. So while the doctor’s assets and current income may not be that high at the start of their career they have the ability to earn quite a bit and build up their asset base quickly. Once employed as a doctor they are able to work for some time increasing their earnings as they go up. The risk for job loss for doctors is also very low due to high demand for those in the profession. That all adds up to a long-term customer banks would love to have and a reason to earn and keep their business.
Doctor loans are designed to help newly graduated doctors by not taking...
Posted by Paul Sian on Thursday, May 23, 2019 at 7:00 AMBy Paul Sian / May 23, 2019Comment
What To Consider When Buying A House To Tear Down And Build New
In many older developed neighborhoods there is very little vacant land available for those wanting to build a new home. For some buying land with an old home and tearing down the old home so a new home can be built can make economic sense. Whether the neighborhood is preferred for it’s location, the great schools it is affiliated with or just the community charm, buying an old house so a new one can be built after tear down can be a great strategy. This article explores some of the considerations home buyers should take into account when buying a home to tear down for a new construction build.
Get A Team In Place Prior To Even Considering The Purchase
As there are many steps and considerations involved in buying a house to tear down for purposes of building a new home having your team in place from the start is important. Team members should include an architect (for fully custom builds, some builders already have architects on their team), a builder, a real estate agent, a mortgage lender and a real estate attorney. These team members will need to work together to make sure that the home and land that is being purchase will meet all the requirements so a new house can be built on it. Miss any of the critical considerations below then the entire plan will fail.
Important Things To Consider
For starters the new home buyer will need to verify if a permit is needed to tear down a home. Due to all the pieces of a home, tearing it down can have an environmental impact and local governments want to make sure hazardous items from a demolished home are properly disposed of. Demolishing an old home...
Posted by Paul Sian on Thursday, April 4, 2019 at 7:00 AMBy Paul Sian / April 4, 2019Comment
Smart Things To Do After Buying A Home
Prior to closing on the purchase of a home the new homeowner to be should consider what types of services they will be needing for the home. For some of those services calls should be made prior to closing so as to make sure upon moving day the house has power, water and any other services needed to make sure everything goes smoothly. Most services that are acquired for a home are obtained by contacting the provider directly and letting them know the date the service needs to be turned on. This article explores what kind of service providers should be contacted by new homeowners and offers advice on avoiding getting overcharged through those claiming to be service brokers.
When To Request Services
As mentioned above for some services the service providers should be contacted before closing in order to make sure services like power, water, and internet are switched over to the new owners name in time for when they need to move in. With some companies a call should be made at least a couple of days before so that they have enough time to process the change in names of who will be paying for the bill. This is especially important for the electric, gas and water bill as many sellers will request the service be taken out of their name as soon as closing day in order to not spend any extra money than they have to. If the home being purchased has a sump pump the lack of power can cause water backup in the basement which will end up in a big mess for the new homeowners to take care of. The home sellers are not expected to maintain the power on a home after closing day so the new owner needs to make sure it is...
Posted by Paul Sian on Friday, November 23, 2018 at 7:00 AMBy Paul Sian / November 23, 2018Comment
What Happens When The Sellers Refuse To Move Out Of The Home
When buying a home the homebuyer goes in with the expectation that the homeowner is ready to sell and move to a new home, sometimes thought that may not always be the case. For whatever reason a homeowner may have second thoughts on leaving a home after the buyer has had all the inspections and appraisal done. What is a buyer to do in those situations? The answer depends on whether the seller is refusing to move before or after closing as to what actions a buyer can take and is explored further in this article.
Seller Refuses To Move Before Closing
Prior to closing the seller can outright tell their agent and the buyers that they changed their mind about selling their home and will refuse to close on the sale let alone move. The buyer’s options are limited in this case. Yes the homebuyer could sue to attempt to get the seller to sell their home but most courts rarely like to force people to sell their homes and instead are more likely to award damages to the buyer for actual losses (paying for inspections, appraisal, movers and more). Courts could also award punitive damages to the buyer in order to punish the seller for their lack of follow through on the contract. In the end though the buyer is without a house and must begin the process again of finding another home.
This is a situation that is hard for a homebuyer to avoid as there is no way to really tell if a home seller is really motivated to sell or is just listing the home on the market with no actual intent of really wanting to sell. For most home sellers the goal is to sell their home and...
Posted by Paul Sian on Thursday, November 8, 2018 at 7:00 AMBy Paul Sian / November 8, 2018Comment
4 Helpful Tips For Buying Your Next House
Whether you are buying for the first time or buying a subsequent home there are some tips to follow in order to make sure the home purchase is a successful one. With a home being one of the largest purchases a person will make in their lifetime it makes sense to go in with full planning and an understanding of how the buying process works. Any time wasted on bad strategies are just that, time wasted that could have been saved by putting you into a home sooner. This article explores some of the strategies homebuyers should be using and ones that may only lead to frustration.
Getting Pre-Approved For A Mortgage
While this is often talked about it bears repeating, shopping for a home without a mortgage pre-approval is a recipe for frustration. The mortgage pre-approval not only gives you an idea of how much home you can purchase it also can give you an idea of your monthly payments. A $200,000 dollar house does not mean you divide $200,000 by 360 months (12 monthly payments times 30 years mortgage) and that is your payment. Your ultimate mortgage payment not only depends on the house price, but also on the taxes and insurance you will be paying for the house. So when getting a pre-approval make sure to ask your lender about the monthly payments that include principal, taxes and insurance.
Since taxes and insurance can vary on the value of the home and the location those numbers are subject to change. As a result if you do find a home that you like be sure to ask your lender to calculate the monthly payments for you based on the taxes you will be paying for that house along with the estimated insurance. If the monthly payment...
Posted by Paul Sian on Thursday, October 18, 2018 at 7:00 AMBy Paul Sian / October 18, 2018Comment
Tips For Buying A Foreclosure Home
Oftentimes buyers may hear that a particular home is a bank or government owned home which is also known as a foreclosed home. A foreclosed home is a home that the prior homeowner has stopped paying the mortgage on and the lender takes the homeowner to court in order to take possession of the home in to try and recover money that is owed to them. Foreclosed homes must go through a full foreclosure hearing in a court in order to make sure the debt is valid and the homeowner has legitimately stopped paying back on the mortgage. Once back in the possession of the mortgage lender they may or may not make some repairs if needed and will put the home on the market for a new buyer to purchase. For some mortgage loans that are backed by government mortgage programs (like FHA, VA, USDA) the government will ultimately take possession of the home and eventually sell it back on the open market.
If you are considering buying a home that has been foreclosed upon this article is article is for you as it will provide tips on how to make the best of buying a foreclosure home.
Where Do You Find Foreclosure Homes For Sale
Just as most homes are found on the Internet via the Multiple Listing System (MLS) many foreclosure homes make it to the MLS as well when being listed for sale. On occasion depending on the lender and the condition of the home sometimes homes make it to select auction sites in order to limit who can buy the home and as a result may not be found on the MLS. Foreclosure homes in very poor condition sometimes will be sold with cash offer only requirement since the condition will not meet appraisal standard for traditional mortgages.
Those who want to ultimately live in a foreclosure that is in poor...
Posted by Paul Sian on Thursday, October 11, 2018 at 7:00 AMBy Paul Sian / October 11, 2018Comment
Tips For Choosing The Right Neighborhood
Finding the right neighborhood is just as important as finding the right house, as the right house in a neighborhood that does not work for you can lead to eventual dissatisfaction with the house. Neighborhoods encompass many different aspects so it pays to do your research fully and understand what a particular neighborhood may or may not offer. The perfect neighborhoods for a family with kids may not be the perfect neighborhood for an empty nest couple or a single person looking for a home. This articles looks at some of the things homebuyers should be considering in a neighborhood when shopping for a home.
The location of a neighborhood is key. Living in a great neighborhood fifty miles away from your workplace may leave you with little time to enjoy your neighborhood since you have to spend more time driving back and forth to work. So while there may be a great neighborhood fifty miles away that does not mean you should be considering it unless your employer offers benefits like working from home rather than having to come into the office every day. Long commute times can be stressful and result in many wasted hours that should instead be spent enjoying time with your family or enjoying your neighborhood.
The neighborhood location in terms of the community amenities and features are also something to consider. Being in a more rural area you are less likely to find recreation centers, shops, malls and other places to go to, but if you enjoy the peace and quiet the rural area may work better...