Why You Should Visit with a Buyer’s Agent Before Getting Pre-Approved

October 13, 2010 By Leave a Comment
Finding the perfect home starts with a plan

Getting pre-approved for a home loan is the first order of business when you’re looking to buy a home in Iowa City. If you’re relocating to the Iowa City area this is a challenge since you don’t know anyone yet. That’s also true for first time home buyers who are not always familiar enough with the process to know the questions to ask when they do meet up with a lender. Finding the perfect home starts with a planRight there are reasons enough for you not to rush off and talk to a lender before you visit with me. Nope. I want you to talk to me first. I can save you from making costly mistakes. That’s what Buyers Agents do. They help you to make smart decisions. They won’t refer you to any lender. They’ll talk to you about your specific needs and help you figure out what kind of mortgage professional you need. In my case, once I have a little background info I’ll have a couple of more loan oriented questions for you.

Are you looking for a loan with a low or no down payment option? Or… Do you intend making a large down payment of 10% – 20% or more?

For those looking for no or low down payment options there are several available here in the Iowa City area.

FHA loans offer a low down payment option, at present 3.5% and although there are several lenders in town that offer them, I prefer to send my clients to someone who specializes in them.

100% Financing Options are still available as in-house loans with some of the local banks here in Iowa City. They are usually 5 or 10 year adjustable rate mortgages (ARM’s) and are very popular with people relocating to the area who know they may only be here for 3 to 4 years. Fellows or Residents to the UI Hospitals or Faculty and Students to the University of Iowa spring to mind. There is a high demand for these loans – As Iowa City is a relocation destination this makes perfect sense.

I should mention that I also serve clients in the North Liberty area and there is another 100% financing option for rural areas in the form of the USDA – Rural Development Loan. North Liberty is growing fast, but still classes as a rural area where it’s possible to qualify for a rural development loan.

These are just a few examples and as you can tell from just this relatively small amount of information, depending on your circumstances there are many different loan programs, so it’s really important for you to hook up with the right lender. It’s my goal as your buyer agent to make sure we start out the buying process on the right foot. Getting you Pre-approved for the right home loan by a lender who will get you to closing with the minimum amount of fuss is right at the top of my list. Just email me or give me a call at 319-400-0268 when you’re ready to get started…


In the meantime, here are a couple of things you can be putting together ready for that meeting with a lender.

*Documents Required by Lenders to secure financing:

Full Loan Application (If applying by phone this would be sent out by the bank the same day).
2 years of tax returns or W2 forms
Paycheck stubs for most current 30-day period
Monthly debt (who with, how much, loan number)
2 months recent bank statements to verify cash to close
Address of mortgage company or landlord for past 2 years
Drivers license (Legal aliens will also be required to provide visa or alien registration card)

*Depending on the loan, other documents may be required.

Comparing Lenders: It’s always a good idea to compare lenders. Particularly closing costs vary greatly from lender to lender and you want to be sure you get the best deal. Making sure you get a GFE (Good Faith Estimate) is the only way to easily compare quotes, so make sure you get one from every lender you speak with.

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Forget the Negative Headlines – It’s a Great Time to Buy A Home!

September 9, 2010 By Leave a Comment

Houses in Iowa City are priced to sell and interest rates are at an amazing 4.25% for a 30 year fixed loan. How come the market isn’t humming? That’s what I’m wondering. Could it be that the negative headlines we get fed on a daily basis through the Media is having an effect on the average consumer? Could it be that they’re so confused that they have no idea what to think anymore? I know if I wasn’t in the real estate business I would be pretty confused right now!

I see that the buyers who are able to see the benefits of buying a home now rubbing their hands with glee at the deals they’re making. I closed on an almost $300,000 house just a couple of weeks ago and the buyer shook his head in amazement when he realized how low the monthly payment was for so much house. It doesn’t get any better than this folks!

So the $8000 tax credit is gone. So what! This is better. That was a one time gift. Most buyers had spent it in their heads before ever getting to the closing table. What we have now is the gift that keeps on giving. The super low interest rate means you save money each and every month – On a home you will pay less for than you would have just a couple of years ago too. Looking at the bigger picture Iowa City is a pretty stable economic environment anyway. There’s no reason to buy into the idea that buying a home is a bad financial decision.

Since I’m a freak about data and don’t want you to just take my word for it I want to share with you a really compelling article I came across yesterday showing the financial benefits of buying a home. Financial Planning: 5 reasons to buy a house today. It’s so well written that I really have nothing to add. Except maybe this: If you want to learn about the real estate market talk to a professional. Find someone who knows your market. I know the Iowa City and Coralville real estate market and can talk about it all day long. Find someone who knows your market. Talk to them. In many parts of the country it is a GREAT time to buy a home.

Filed Under: Buyers Info, Mortgage & Finance Tagged With: ,

100% Financing Options in Iowa City

April 15, 2010 By 2 Comments

Think 100% financing options don’t exist anymore since the credit crunch? That may be true for home loans sold on the secondary market, for in-house loans here in Iowa City they are still going strong and as popular as ever!

Iowa City is a relocation town. We have a high turnover of folks who need to move on after 3 to 4 years. Local banks are smart and recognize this trend as a good business opportunity and offer 5 or 10 year ARM’s (Adjustable rate mortgages) with competitive rates and low closing costs. Buyers don’t need to worry about points, PMI or a down payment. This is a simple straight up loan tailored for people who are looking for a short term loan, who know they’re not going to grow old in a home and will be relocating back out of state in just a few years.

Want to learn more about these types of loans? Email me and I’ll put you in touch with a couple of good local lenders who will be able to help you out.

Filed Under: Mortgage & Finance Tagged With: ,

Do You Repair Your Credit Yourself or Work with a Professional?

January 15, 2010 By Leave a Comment

To get a home loan these days you need to have good credit. For government backed loans like FHA, VA and USDA loans you might get away with just fair credit, but for conventional loans you really need good credit. So what can you do to repair your credit yourself and when do you need a professional?

That depends on what the problem is. If you have errors on your credit report about delinquencies that have been settled, but not reported to the credit bureaus, you can take care of that yourself. Contrary to what you might think, you don’t have to wait around for these companies to report it. You can get in touch with the credit bureaus yourself, providing proof of payment and they will take it off your credit report.

There are several resources that walk you through the process, and one of them is here. You can also visit the credit bureau websites and start the process online. (You’ll find the links to the page to file a dispute below along with the physical addresses). You’ll still need to send in documentation, but it will be less paperwork to fill out. To dispute errors you will need a recent copy of your credit report. If you have been denied credit recently you are entitled to a free credit report and of course once a year it is possible to get a free credit report at annualcreditreport.com.

Now if you have a bigger problem and have outstanding debt that’s in the hands of collection companies, then it’s time to turn to a professional. What you need is a GOOD Credit Repair Company. This is where you need to be careful, because there are a lot of companies out there who charge the earth and promise the world. You don’t want one of those. You want a good, reputable, preferably local credit repair company to help you out of the fix you’re in and not charge an arm and a leg to do it.

I know, many people think you can do this yourself too. I’m not one of them. And here’s why:  When it comes to finances, I believe it’s always better to work with a professional. You’re too close to the subject, your emotions will get in the way – And emotions are the last thing you need in a negotiation. Period. Someone with no emotional attachment to the situation who negotiates down debt on a daily basis is what you need. Not only will you save yourself the stress of talking to a collection agency, you’ll also in many instances save money in the long run.

Did I manage to convince you of the value of a professional? I hope so. Now all that is left to do today is to share with you the name of a reputable company in the Iowa City / Cedar Rapids area. Heartland Credit Restoration Inc offer excellent credit repair services in our area. They are a family owned and operated business based in Hiawatha, IA. They charge a reasonable fee and not only help you with your current problems, but also help you build your credit for life. Repairing your credit shouldn’t be a quick fix just to get you qualified for a home loan, it should be life altering, so you never have to deal with the stress of this situation again.

Experian
Dispute Department
P.O. Box 9701
Allen, TX 75013

Trans Union
Consumer Solutions
P.O. Box 2000
Chester, PA 19022-2000

Equifax
P.O. Box 7404256
Atlanta, GA 30374-0256

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USDA Home Loans: 100% Financing Option for North Liberty IA

January 12, 2010 By Leave a Comment

If you took a look at my market reports this month for the Iowa City area you’ll know that North Liberty had a great year. Home sales were up by 15% last year in what otherwise was a slow market in the area. North Liberty has got a couple of things going for it. The first is location. Situated between Iowa City and Cedar Rapids it’s perfect for those who prefer to live a little further away from all the action. What it also has going for it is that it has a lot of newer or new homes at somewhat better prices than Iowa City or Coralville. (Sticker shock is not unusual for folks relocating to Iowa City and Coralville). 

Have I peaked your interest on North Liberty yet? That was the plan… Now I’m going to tell you about a third thing North Liberty has going for it. If you buy a home in North Liberty, it’s considered a rural area and you may be able to qualify for a USDA Rural Development Loan that offers 100% financing. Right now with banks looking ever closer at credit conventional loans are harder to qualify for and the USDA Rural Development Loan has become a very lucrative alternative. In short, the Rural Development loan offers you 100% financing on a home loan with a low interest rate AND no PMI (Private Mortgage Insurance).

Below are some FAQ’s put together by a very knowledgeable loan officer in the area, Jessica Greving, VP at Residential Mortgage Network in Coralville. She definitely knows her way around specialty loan programs like the USDA Rural Development Loans, FHA and VA Loans.

What are the basic eligibility requirements for a USDA Rural Development Loan?

Homes financed through the USDA Rural Development Loan must be in a rural area.  That would include North Liberty, Solon, Tiffin, Oxford, Williamsburg, Amana and other communities with less than 20,000 residents. The buyer should make less than the RD income guideline (example: 1-4 person family in Johnson County should make less than $87,400 and a 5 or more person family should make less than $115,350. If a buyer pays childcare they can reduce their income by the childcare amount. Visit USDA Rural Development Website for a detailed itemization of income qualification.

How long will it take to process and close a RD loan with RMN, Inc.?

Since RMN, Inc. has the authority to approve the RD loans and is familiar with the process, it is just as quick as any other financing. If you do request something faster than the average approval time, please contact Jessica directly to determine appraisal time frame.

What is the difference between a Guaranteed loan and a Direct loan?

The Guaranteed loan is offered through a participating lender like Residential Mortgage Network, Inc. There are no prepayment penalties, no recapture tax and income is not checked periodically after closing.

A Direct loan is offered directly through the local USDA office (most counties in this area are served by the USDA office in Tipton) and is designed to help very low income borrowers. Borrowers receive a subsidized interest rate and their income is checked every 2 years.

Do I need a pest inspection?

Yes, a pest inspection is required on all RD transactions unless it is a 2nd floor or higher condominium purchase. It can be paid by buyer or seller.

What issues are there with appraisals?

The appraiser is required to note the following: Chipped/peeling paint on the exterior of the home if built prior to 1978, less than 2 years remaining life on the roof, positive draining around the exterior foundation of the home (especially if the basement appears moist), waste pipe relief valve on the water heater to be extended to within 8″ of the floor. These are the most common occurrences.

Is the interest rate higher?

No, RMN does not charge a higher interest rate. Though rates from one program to the next can vary a bit from day to day, the RD rate is generally in line with the FHA, VA and conventional rates. Additionally, there is not a charge for credit scores down to 620.


Are there higher fees?

The standard closing costs are approximately $1200. USDA charges a 2% fee that is added to the buyer’s loan. A buyer purchasing a home for $100,000 will borrow $102,040. The program does not charge monthly PMI.

Are condominiums eligible for the RD loan program?

Yes! There is still 30-year fixed condominium financing available! If you have already identified the property you’d like to buy, your agent should contact your lender for an approved condominium list.

Getting pre-approved is the first order of business when you buy a home and talking to a few different lenders about the different options is a good idea. Choosing a home loan is one of those times when the devil is in the details…

Need some help navigating your way through the home buying process? Give me a call or drop me an email. I’m here to help!

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