Archive for the 'Julie’s Mortgage Tips' Category
The value of having an HO6, “Condo Insurance” for your New Orleans Condo is Important-Just ask Issac..
Issac was the recent Hurricane that swept through New Orleans last week. The tropical winds lasted about 36 hours and dumped about 10 inches of rain. I know first hand of two condo associations in the Warehouse District that has damages to the roof and in came the water.
You would first think that the condo association’s insurance would cover all the damage. The problem here is that the deductibles for wind and hail are high and may not kick in until $100,000 to $200,000 of damage has occurred. Even then it will not cover possessions and build-outs in the condos. So the condo association has to dig into reserves to cover the roof and other damage that may have occurred.
All lenders now require the condo buyer to have an HO6 policy just in case this happens. It happened last week to about a dozen owners that I know of. They generally require a 40-20 policy or more depending upon the condo and its value. The 40k is for things like floors, cabinets, and appliances. The 20k is for possessions. The deductibles are lower than the master policy. The lender will have a formula for what you need.
The HO6 policy cost about $700 to a $1,000 per year. Cash buyers are not required to get the insurance but they need to have to policy for peace of mind. It is not a common occurrence but it does happen and with first hand knowledge you had better get a policy and upgrade it from time to time.
Both instances centered around the roof leaking. Many of the roofs in the Warehouse District are flat and that seem to be where most of the problems do occur. But not always. I know of one several years ago where a water pipe burst after a transformer exploded. The shock busted the water pipe and after 10 minutes of running it left several units damaged. It does not take a busted pipe long to ruin things. This does not happen often but it does happen…..
So if you do not have your own condo insurance policy, then you need to get one or roll the dice. If you have one it may be time to review it and check it out.
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The Orleans Parish Bond Program is open to first time home buyers who will occupy the home or condo as their residence. Meaning you have not owned a home in 3 years. You have a minimum credit score of 640. You take 12 hours of certified training. If you meet this criteria and find something under $324,359 for a single residential unit then you may qualify for the program.
There is no limit for household income which is highly unusual in these Bond Programs. You will have to use certain lenders. The two that I can recommend is Robert Tynes at Whitney Bank 504-838-6511 and Ted Nusenow 504-310-7422 with Iberia Bank. They participate in the program. Check out the list Lenders for Bond Money in New Orleans
The mortgages carry a 1% origination fee. You can always ask the seller to pay this and up to 3% of your closing cost on top of the program. The program is designed to give you 4% of the purchase price or a super low rate of 3.25% for FHA and 3.5% for a conventional loan. The FHA loan allows you the lower down payment of 3.5% while conventional will require 10%.
There are other things you will need to know but these are basics. Its always best to give your self an extra couple of weeks when dealing with bond money. I have seen it work many times and benefit my clients. Its always worth checking out all the angles and choices.
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The Jefferson Parish Bond money is hard to beat if you can qualify for an FHA or VA loan . The interest rates are extremely good at 3.5% and you get a credit for another 3.5%. The credit is like a gift to you that is hard to pass up. There are limits on income as you can see below and the price of the home. You have to be a first time home buyer and cannot have owned a home in the last 3 years. You will have to live in the property. There is a 1% origination fee that is paid.
It gets even better as you can ask for the seller to pay your closing cost, up to 3% under the new rules. This means you can save your cash and buy with very little down for a home. This is perfect for a person making less than $60,000 or more for a family. Could easily be cheaper than renting and you build equity and have pride in home ownership.
The credit for a home costing $200,000 would be $7000 and you can ask the seller for concessions of another $6000. Borrowing a $100,000 at 3.5% for 30 years for principal and Interest is only $449 per month. The oddity is at these low rates is at the end of year one you will have paid down you loan by $1757. You will have paid $3183 in interest payments which are tax deductible. Borrow 200k and then you just double the numbers.
There are other requirements but if you qualify this is a great deal to put you in a home with a minimum amount of money. Allow about two additional weeks on the loan to close just to be safe. First step is to get pre-approved for the loan then start your search with an experienced agent.
Only certain lenders will be handling the Bond issue but my Favorite Lender Julie Baudier at Standard Mortgage is. Its outstanding service and low cost as well as being a great deal. She can be reached at 504-583-1793. Check it out and then I can get you started with the search.
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March 16th, 2011 categories: Julie's Mortgage Tips
Jefferson Parish Bond money is available for those who can qualify for the Money. If you fit the criteria it is money in your pocket. The one major change that I see is that the loan will have to be an FHA, VA, or Rural Development Loan. For homes it is much easier than condos as each home is check to be FHA ready. This is not so with condos as they have to be on the FHA approved list.
For those that can meet the criteria its a great deal. Find something for $150,000 and ask the seller to pay the 1% origination fee and you get $6000 as a credit on your purchase. The program is designed for the first time buyer who needs the extra money to make the sale work. Not all lenders sign up for the program. Add an extra week for processing.
The rules and numbers change fro Bond issue to bond issue so it good to review the qualifications to see that you fit the criteria. The State of Louisiana will have a Bond Issue as well that can be used in the City of New Orleans with a few different rules.
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Louisiana state Bond money is now available on a first come basis with an accepted contract for first time home buyers. Those who have not owned a home in the last 3 years would be eligible. The LHFA State bond money carries an interest rate of 3.95% for 30 years. You also get a 3% down payment assistance as well. This is like a gift. The rates are great and everyone likes a gift as well. There is a .75% origination fee.
This can folded into a an FHA or VA where you are allowed to ask the seller to pay your closing cost and pre-paid up to a certain point. This will normally fall between 3% and 4%. On a $200,000 loan you can get $12,000 with 3% assistance and 3% sellers concessions to off set your cost of buying.
There are income limits will vary by Parish along with limits on the purchase price. The best I can tell is that the maxium purchase price is $258,690. The income limits for two or less is $61,200 and $70, 380 for three or more. The State has 20 million for this so it may not stay around for long.
For additional information you should call my favorite lender Julie Baudier at 504-583-1793 cell to check out the details. She gives quality service plus the best deal that she can. She works for Standard Mortgage in Metairie. If you fish then you can give her your best fish story. Tell her Eric sent you…………
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New Orleans Condos have had little appreciation in the last couple of years! But there are other advantages to owning !
The yesterday, today and tomorrow flowers is much like the Condo Market in New Orleans. We know what has happened in the past. We know what is happening now even though we may all have a different take on it. None of us know what the future may hold. We do know a couple of things about buying a condo in today’s market. Here are a couple of things we tend to forget when financing a condo in today’s condo market.
Low Interest Rates of 4.5% mean….Lower notes monthly. You borrow 200k and your principal and Interest are $1013.37 per month. One of the things many forget is that you are paying your principal down quicker and building equity faster. In month one you will pay your principal down by $263.37, in the first year it will decrease by$ 3226.44. At the end of five years you would have increased your equity by $17, 684 leaving a loan balance of $182,313. Your total note in not just interest but principle as well.
Tax benefits of owning puts money in your pocket…. In year one you will pay $8934 in interest and that is deductible on your state and federal Income tax. If you are paying 25% income tax rate as an example this saving is 25% of $8934 or $2233.50. On a monthly basis the savings are 186.12 per month in year one. One thing we are certain about is that taxes are not going down from here.
Sweat Equity is also something that can work in your favor…. You may buy a condo that needs some updating or areas where you can improve on the value of the condo. Many of the things you can do yourself to improve the price of the condo. This sweat equity is sweet. It is all yours to keep if you live in the condo for more than two years. No capital gains taxes if this was your home.
Adding thes numbers up in the first year will give you over $400 in tax saving and in equity. Its almost $450 in the first month and actually increases after this point as the loan balance gets smaller as each month passes. At the 36 month the mortgage payment you are paying the loan down at $300 per month. That is the good news about the lower rates………
The largest reason to own is that it is your place to do with what you wish. You can enjoy it and treat it like its your own place. You own it and when yous sell you have a good chance of leaving with something. You rent and you certainly will walk away with nothing. Paying rent for 60 months at $1300 per month is $78,000 that you will not see again. That is certain……….
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February 27th, 2010 categories: Julie's Mortgage Tips
As each month goes by there is always a new wrinkle in the mortgage business. It may be new forms. It may be higher credit scores. It may be new appraisal rules. It may mean more of a down payment. It may mean a more expensive mortgage insurance. The FHA loan is making a big comeback as it may be cheapest route if the condo association can be approved.
This means that less people can buy homes or condos. It is getting harder by the month to get purchasers qualified for a loan. As a seller or buyer you need to start the process earlier and learn what to expect from a lender. Sellers need to know how their property can be financed. The buyers need to know as there are more and more forms to fill out and hurdles to overcome.
Lenders– They have much more work to do on each loan. Most have more time on their hands as many are just not busy. Many have dropped out of the business. Experience does matter in 2010. They need to have to condo experience as its gotten harder. Staying with a local office is highly recommended as the entire work can be done within the company. Ask for the people who are busy, there is a reason.
Sellers of Condos- Sellers need to see if their complex can be on the FHA list that will attract more buyers as the down payment and fees tend to be lower. You as a seller cannot wait but need to be proactive especially if the majority of the condos on the association are less than 300k. Your condo can just be more competitive to the buyer. The new rules took effect Feb. 2010. The federal government has not put many on the list in the last 15 years where people actually want to live. Think ahead and ask questions.
Condo Buyers– Start early and know the kind of loan you are getting. Give yourself more time to complete the process. Add ten days to get the deal done. Knowing the steps to purchasing is essential to a successful purchase. An agent with experience is more essential than ever. First time buyer, second home buyer, and move up buyer its all different in 2010. Do not rely on luck !
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August 20th, 2009 categories: Julie's Mortgage Tips
Last week I was talking to one of my favorite Lenders Julie Baudier of Standard Mortgage about the quality of borrowers that she is getting. Many buyers cannot buy because they have low credit scores. Most loans now require higher credit scores. They are requiring more on FHA loans as well. So if you are in the thinking process now is the time to check your score and learn the ways you can improve your score.
The two main points are that your scores can be raised and they need to be checked every now and then. You need to have them checked on a regular basis as the credit agency’s make mistakes. Its easy to put things on but not so easy to take them off. Do not wait until you want to buy to get started. Starting earlier is better.Tips to improve your FICO score: Increasing your FICO score may take time and often there is no quick fix. FICO scores reflect credit payment patterns over time with more of an emphasis on recently reported information that older information. · Pay off your bills on time. Delinquent payments, even if only a few days late, and collections can have a major negative impact on your FICO score. · If you have missed payments, get current and stay current. The longer you pay your bills on time after being late, the more your fico score should increase. Older credit problems count for less, so poor credit performance won’t haunt you forever. The impact of past credit problems on your FICO score fades as time passes and as recent good payment patterns show up on your credit report. And good FICO scores weigh any credit problems against the positive information that says you’re managing your credit well. · Keep balances low on credit cards and other “revolving credit”. High outstanding credit card debt can negatively impact your FICO score.
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Using a local lender that has a local back office can save you a lot of money, time and aggravation. Having the entire process local makes the people much more accountable to you and your needs. They have to deal with us on a local basis. They are just more accountable plus they are often time the most cost effective way to finance.
Making the call to an unknown person in Dallas or Atlanta is much like talking to the IRS, they just do not want to be bothered. The decisions are last minute. They do not understand our our local market and issues.
The interest rates are generally going to be the same or better. The cost are also gnerally going to be cheaper as well. Always ask for a good faith estimate to check out the cost. Ask if they have a lock in period and if the rates drops can you take advantage of the lower rates.
If your lender is late you may just blow the deal. Many sellers will wait for the loan but they do not have to wait. There are times when they will move to the next person or deal.
Ask around to see who has received good service and who has not. The out of town lenders can cause big problems. We will never hear from them again so the incentive to be crediable is long removed. This happens time and time again. That is why I am bringing it up. Tired of last minute suprises. We as agents have our favorite lenders becuse they get the job done for us and give our clients the attention the deserve.
It is especially true with condos to get the local person who knows the various condo associations and knows how to get the imformation they need. More and more deals are falling apart because the lender does not know the market. Just my point of View ! Eric
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The New Orleans real estate market has come alive in the last 4-5 weeks. Interest rates are still good closing at 5.5% today. One of the things I have learned in the last two to three months is the value of the FHA loan when it comes to condos and homes. There are several advantages which I will touch on briefly so you can get some ideas. It may save you thousands.
You still may be eligible for the $8000 tax credit that ends this November so check this out as well. Real Estate season started late this year but is now in full swing.
- The downpayment is 3.5% for an FHA loan where as Conventional financing is at least 10% and more. This has to be your primary home.
- The credit scores are relaxed and you do not pay extra for a loan if you have average credit as you may have to do with a conventional loan.
- The Mortgage Insurance is almost half of what a conventional mortgage is at this time. This is an insurance premium you will pay if you put less than 50% down. On a $200,000 loan the FHA fee is about $110 per month with the 3.5% down.
- The seller can give you up to 6% of the loan amount in concessions. For a condo this is going to be much less since insurances are in the condo fees. This will also help you pay for the FHA upfront insurance fee along with your other closing cost. This means you can get in for 3.5% if we figure the numbers correctly. This means if you borrow 200k, they you need $7500 of your own money.
The one big issue is weather the condo association can be financed by being on the FHA condo list or by doing a spot approval. Please chose a local lender as they will be far more knowledgeable than an out of town person. An agent can help you with the questionnaire to see if the condo may pass the requirements before starting.
Its always better to know that you will have a high probability of success. This is where a knowledgeable condo agent and lender are very valuable. Here is the questions that are asked to condo association to determine if you can do a spot approval. Spot Approval Process.
There are some very good lenders but there is a special one in Jeff Bollinger ” The FHA Expert ” is one who is an FHA expert in my eyes. He has a weekly blog that can answer many of your questions just by reading his thoughts and many comparisons he makes. A true expert indeed. This is where I go to look for answers when I need to have a question answered. He is not local but has the answers for everyone to read and think about.
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