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Pledged Asset Loans for Tulsa, OK Mortgages

Pledged Asset Loans for Tulsa, OK Mortgages

Pledged asset loans can be used for home purchases (including second homes and investment properties), as well as refinances and cash-out transactions.  This type of mortgage allows for a loan up to 90% of the appraised value or sales price, whichever is less.  This program is ideal for clients who wish to defer capital gains or losses – while maintaining their investments strategy and continually benefiting from interest, dividends and investment appreciation. Here is a summary of how the pledged asset feature works on portfolio loans. Please let me know if you have any questions by calling (918) 949-7248 or emailing me at john@tulsa-mortgages.com.

90% Jumbo Loans

Borrowers can pledge assets to achieve a loan-to-value of up to 90%.  No mortgage insurance is required.  The lender will put a lien on the asset account, which is used as additional collateral.  Borrowers may pledge cash or a stock portfolio – cash is valued at 1:1 and stock is valued at 2:1.  Funds qualified for retirement savings are not eligible.

For example:

  • $1 million purchase price – borrower wants to put 10% down
  • Borrower pledges the eligible asset – stocks, bonds, mutual funds, CDs, money market, savings, etc.
  • A 3 party agreement is put in place between the lender, the borrower and the institution of pledged assets
  • The asset is frozen, funds cannot be withdrawn until the the loan to value is reduced to 70%
  • The asset manager can make trades in the account as desired

Pledged assets may also be pledged by an immediate relative.  The relative does not need to go on the loan.

Furthermore, Free and clear real estate may be considered as crossed collateral on a case-by-case basis.  The additional property must be valued as high as the total loan amount of the property being applied for.   For example: If you are looking for a $900k loan against a $1 million property, and want to cross collateralize instead of pledging liquid assets, the additional property must be valued at $900k (AT THE LEAST), and it must be free and clear.

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Copyright 2015 John Regur All Rights Reserved – Originally Posted at: Tulsa Oklahoma Mortgages – John Regur

 

 

 

Posted in: For Buyers, Jumbo

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How to Avoid Mortgage Insurance

How to Avoid Mortgage Insurance

The only absolute answer for how to avoid mortgage insurance is to put 20% down.  But there are some tricks to at least reduce the premiums.  You can shop for mortgage insurance, you can compare quotes, and you can control the rate your are charged.  All accomplished by how you structure your mortgage.

Now, If you do not put at least 20% down on a real estate mortgage, you will pay some form of mortgage insurance.  Mortgage insurance is insurance you buy for your lender so they will accept less than a 20% down payment.  They are two types of mortgage insurance: up front, which is paid at closing; and the annual premium, which is paid in monthly installments and included into your mortgage payment.

But, you can reduce your mortgage insurance, far below what most people pay.

OK, back to the two types of mortgage insurance:

Up Front Mortgage Insurance

Paid to the mortgage insurer “up front”, or at closing.  The funds for this payment are paid by the lender for all non conventional loans, and become “rolled” into the loan.

Conventional loans do not require Upfront mortgage insurance.  A borrower can choose to pay their annual mortgage insurance in a single premium “up front”, but it cannot be rolled into the loan.

Annual Mortgage Insurance

Quoted as a percentage – to translate it into a dollar amount, multiply your loan amount by the percentage quoted and you will have your annual mortgage insurance premium.  Divide this by 12 and you will have the monthly premium that is added to  your mortgage payment.

You may be required to just pay for it up front, or you may be required to pay both upfront and monthly – it all depends on how your mortgage is structured.  But knowing how the program works and where the options become available is your key to the ultimate question:

What is the fastest and least expensive way to get a loan?

So, let’s get there.  The thing to do next is to look at the mortgage insurance program for each loan type.  Within those programs are the opportunities to reduce mortgage insurance.

Conventional Mortgage Insurance

To give you an exact quote on your mortgage insurance premium for a conventional mortgage I would need your credit score, your loan to value, and your debt to income ratio.  They are banded, and an A+ credit borrower will pay less than an A-rated borrower, and so on.

But here is the kicker.  The difference in an A+ borrower and an A-rated borrower is 1 credit score point.  What if I could improve your credit score by 1 point, let’s say by paying your debt down a few hundred dollars, and it would save you for the life of your mortgage, wouldn’t you want to do it?

That is one of 100 reasons why you want to pre-qualify your mortgage application as soon as possible.  If you need a week or two to save thousands of dollars, you should take it.  Find out your credit score and start getting pre-qualified by clicking here.  Or call me at 918-949-7248.

The next step would be a free analysis report.  How much would you save if you paid all of the mortgage insurance in a single premium?  Would it be better to put 15% down or to put 5% down and use the remaining cash to pay down the mortgage insurance?  What could the tax benefits be?  To initiate your fee mortgage analysis, customized for your personal situation, click for an application here.  Or call me at 918-949-7248.

FHA Mortgage Insurance

  • Upfront Fee of 1.75%
  • Annual/Monthly Fee of 1.35%
  • You pay both.  It never drops off unless you put 10% down at time of purchase, and even then it is required for 11 years.

You can save 5 basis points on your mortgage insurance if you put 10% down, but I don’t know that this is a good use of cash.

Another way to avoid mortgage insurance in an FHA loan program is to amortize over 15 years.  The 15 year mortgage insurance rate is .45% with 10% down and .70% with less than 10% down.

The best way to avoid mortgage insurance in an FHA loan is with the HAWK program.

FHA has recently published a federal register notice announcing a new counseling program.  It’s called The HAWK (Homeowners Armed With Knowledge) Program (click here to read the HUD report), and the program is counseling for first time home buyers.

Benefits of the HAWK program are:

  • upfront fee of 1.25% (a reduction of 50 basis points)
  • Annual/Monthly Premium of 1.25% (a reduction of 10 basis points)
  • After 2 year’s history of timely payments – a reduction to 1.1%

I know the drag is going to be that class, and the whole “counseling” concept, but the program is intended to teach quality budgeting techniques; and financial literacy is a continued education.  Program Counseling must be completed 10 days prior to contracting in order to avoid mortgage insurance by reducing premiums.

Section 184 – aka The Indian Loan

  • Funding fee of 1.5%
  • Annual/Monthly Fee of 0%

For a loan program that requires a down payment of 2.25% and no monthly mortgage insurance, paying an 1.5% funding fee is a bargain.

VA Loans – 100% Financing

  • Funding Fee of 2.15% for first time use
  • Funding Fee of 3.3% for next use
  • Can be waived if borrower has a service related disability
  • Annual/Monthly Fee of 0%

If you increase your down payment to 5%, your Funding Fee goes down to 1.5%, and if you put 10% down it reduces to 1.25%.  These rules apply for first, second or third time use.

Funding fees for National Guard/Reserves are .25% higher across the board.

USDA Rural Development Guaranty 100% Loan Program

  • Upfront Fee of 2%
  • Annual/Monthly fee of .4%

For a 100% loan at 640 credit score, this is inexpensive mortgage insurance.

Copyright 2014 John Regur All Rights Reserved – Originally Posted at: Tulsa Oklahoma Mortgages – John Regur

Posted in: For Buyers

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Tulsa Oklahoma Bond Money

Tulsa Oklahoma Bond Money

Tulsa, OK, has a new down payment assistance program called the TuBond Money in a breifcaselsa County Home Finance Authority Turnkey Mortgage Origination Program.  Paired with an FHA, VA or Rural Development Loan, this program may assist more borrowers in qualifying for 100% Financing.  That’s right; own your home, 0% down payment.  Tulsa Oklahoma Bond Money is back.

In fact, low down payment loans are coming back entirely (click here to see the latest update).

100% Financing – 0% Down Payment

Housing Agencies provide Down Payment Assistance in the form of grants, zero or low interest loans, or assisted rates.  Some cities even have their own home buyer assistance and homeowner rehabilitation programs (click here to see those available in Tulsa, Oklahoma).

The new Tulsa Oklahoma Bond Money Program is a County-wide program and can be used anywhere in Tulsa County limits.  The Tulsa County Home Finance Authority sets the interest rate and terms and table funds the down payment assistance.  You can only use the Tulsa County Home Finance Authority Turnkey Mortgage Origination Program once, and funds are made available on a first-come, first-served basis from a continuously funded revolving pool.

Reserve your funds as soon as possible.  Click here to begin your 100% financing application.

What are the income requirements and how much do you get?

Tulsa Oklahoma HomeThe maximum debt to income ratio allowed is 45%, but a co-signor is allowed.  The co-signor cannot reside in the home and they cannot have an ownership interest.

The maximum household income you can make is $82,880, but we only have to count the income of whoever is on the application.  There is no minimum income required, but you have to qualify with a house payment that fits your budget.  Now here is a cool benefit: if you are hampered with current debt, say student loans, and you need a co-signor, the co-signor’s income doesn’t add to your household income limit.

$214,925.00 is the maximum acquisition amount this particular Tulsa Oklahoma bond money program allows for.  And another bonus:  there is no requirement that you be a first down home buyer.

What properties are eligible?

  • New (never previously occupied), existing, 1-4 unit, condominiums (if HUD approved) and town homes
  • Manufactured homes are eligible but with overlays
  • Land cannot exceed size required to maintain basic livability
  • Residential only – No more than 15% of square footage can be used for business (including child care)

What are the highlights?

  • No federal tax transcripts
  • No recapture tax
  • No first time buyer class required, although it is recommended
  • Gift/Grant Letter is the only additional form to closing
  • Borrower pays zero Origination Charges, zero Discount Points

How do you pay it back?

The assistance provided is a 3.5% grant and is calculated on the Note amount.  The grant can be used for the down payment and closing cost assistance.  There is no second mortgage note.  And here is the best part:

You never have to pay it back!

What is the fine print?

  • The minimum FICO score is 640, 660 on manufactured housing
  • Buyer must use as primary residence
  • Buyer must occupy within 60 days
  • Conventional Loans do not participate
  • Construction to Permanent loans not permitted
  • Government Paperwork Timelines – Extension fees are costly – only use a mortgage professional with bond money experience

Tulsa, OK Bond Money Update:

Increase in the Funding Fee 

Effective with all loans registered on or after June 9, 2014 under the HFA programs, the Funding Fee will be increased to $300.

The response to this mortgage program has been tremendous, and the high volume of applications for underwriting increases every day.

In an effort to decrease turn times, U.S. Bank must increase their staff accordingly. They have reviewed the options and have determined that an increase in the funding fee is the best option at this time to accommodate the related expense.

Check back for further updates!

How to get down payment assistance?Certificate Of Bond Money Training

Reserve your funds as soon as possible.  Click here to begin your 100% financing application.  Your first mortgage funds are locked for you when the reservation is submitted and accepted by the system and a loan number is obtained.  Grant funds are automatically reserved with the first mortgage reservation.

Copyright 2014 John Regur All Rights Reserved – Originally Posted at: Tulsa Oklahoma Mortgages – John Regur

Posted in: For Buyers

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When Do Interest Rates Go Up in Tulsa, OK?

When Do Interest Rates Go Up in Tulsa, OK?

When do interest rates go up in Tulsa, OK?

Everybody is talking about interest rates, particularly about how they will move and when to lock your rate in.  So, how do interest rates move?

It all starts with securitization.  That is when a bunch of individual mortgages are put together into a giant pool of loans.  That pool of loans is further segmented down into mortgage bonds, which themselves are classified based on their risk profile – from AAA rated bonds (the lowest risk class) to unrated bonds (or “junk bonds”,the highest rated risk).

Every day, Mortgage Backed Securities are traded, just like stocks – and like stocks, Mortgage Backed Securities are very volatile.  Today they moved up and down all day, as they do every day.  Now the price of these bonds, and the mortgage rates that are tied to them, move a lot like a teeter totter.  When price goes up, rate goes down, and vice-versa.  To monitor these price movements, charts are used like this one:

candle

This chart is called a Japanese Candle, and we use these charts to identify and forecast patterns in the bond price movements.  These patterns have all kinds of  cool “industry” terms, like “downward breakout”, “triple-bottom” and the “double top”.  Some prefer to see an “inverted hammer”, especially if it is a lead toward a “heads and shoulder pattern”, which can be an indicator for a Stochastic Crossover.  But here is the juxtaposition of it:

Green is Good and Red is Bad.

Anytime you see green on this chart, bond prices are going up and rates are going down.

The point here is that bond prices change constantly and mortgage rates simply follow those prices.

So what can we monitor to stay in front of these price changes?

Well that leads to a big debate in the lending industry:  The Ten Year Treasury vs. Mortgage Backed Securities.

Depending on what your read and depending upon who you talk to, many Tulsa, OK, mortgage companies may tell you that the 10yr Treasury is the preferred index for monitoring the direction that mortgage rates are headed towards in the coming weeks.  But since most rate locks are in regard to a short term consideration, say 30 to 45 days lock periods, I find this method flawed.

There is a huge difference between the 10 Year Treasury and Mortgage Back Securities.  Primarily, there are three:

  1. Maturity – such as 10 year vs. 30 year, or variable factors
  2. Risk – such as default or prepayment
  3. Correlation – short and long term relationships between factors

This is boring stuff, but the point is 10Yr Treasuries and Mortgage Back Securities often diverge, meaning while one is going up the other is going down.  If you want to know the value of Apple Stock, you cannot just look at technology indexes or, let’s say, Microsoft stock.  If you want to know the value of a specific stock, you have to watch that specific stock.  The same principles should hold true to the 10Yr Treasury and Mortgage Backed Securities.

Now, that is not to say that we don’t need to understand 10Yr Treasuries, because Mortgage Backed Securities are competing for the same investment dollar.  And by that I mean that the economy as a whole has an impact on the prices of mortgage bonds.  Depending on what employment is doing, or gas prices or the stock market – all of these have an impact on the pricing of Mortgage Bonds.

The one thing we should really try to avoid is the media.  The mortgage related news is several days behind, at best.  When mortgage rates are improving I often will see negative headlines.

So how do you lock into the lowest rate possible in Tulsa, OK?

Contact me, and let’s get ready to be ready.  The more we can do to get your credit score over 740, the better the rate.  The more we can do to complete document your loan, the shorter lock period we will need.  Remember, we can’t lock until we are ready, so quickly we must get ready.

Copyright 2014 John Regur All Rights Reserved – Originally posted at: Tulsa Oklahoma Midtown Mortgages – John Regur

Posted in: For Buyers

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Piggyback Mortgages

Piggyback Mortgages

Piggyback Mortgages are making a comeback

For home mortgage loans over $417,000, piggyback mortgages are making a huge comeback.

According to the 2013 Annual Real Estate Survey of the American Bankers Association:

Piggyback mortgages accounted for 3.8 percent of all loans originated by bankers surveyed in 2012, compared to 1.7 percent of the loans for 2010.  To read more reports click here.

A Piggyback Mortgage loan means a home mortgage borrower is being underwritten for two mortgages simultaneously.  The second mortgage can be structured as a home equity loan or a home equity line of credit.

Piggyback mortgages lost their popularity in the housing downturn, but now they are returning.  They are used to avoid paying for mortgage insurance when a borrower does not have 20% down.

When the lender has more than an 80% loan to value on a property, they require mortgage insurance from the borrower.  Getting around paying for this mortgage insurance is the purpose of the piggyback loan.

 How to Avoid mortgage insurance with a Piggyback Mortgage

  • Down payment:  10 percent of the purchase price or appraisal value, whichever is lower.
  • 1st Mortgage:  80 percent of the purchase price or appraisal value, whichever is lower.
  • 2nd Mortgage:  10 percent of the purchase price or appraisal value, whichever is lower.

But there is still another great reason to use a piggyback mortgage:  to avoid going over the conforming loan limit.  The conforming loan limit is $417,000, and when you borrower more than $417,000 the mortgage is called a jumbo loan, and they tend to have higher interest rates.  Sometimes it can be advantageous to get a mortgage for the full amount, and sometimes it costs less to use a piggyback mortgage.

It is really a game of mortgage comparisons.  To get a free mortgage options analysis for your particular situation, click here.

 Disadvantages of a Piggyback Mortgage

  • When it comes time to refinance, the mortgage company that holds the 2nd mortgage has to agree to remain in 2nd lien position on title.  This is called a subordinate lien position, behind the primary mortgage company.  The agreement we will need is called a re-subordination, and they are usually pretty simple to apply for.
  • It is not easy to tap into the home equity, as 3rd mortgages are not usually allowed.
  • The inconvenience of making two separate payments instead of one.
  • Requires a good FICO score.
  • Requires at least 10% down.

Have a question?  Ask it here.

Posted in: Conforming, For Buyers, Jumbo, Mortgage Types

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How Are Credit-Score Points Earned?

FICO ScoresHow Are Credit-Score Points Earned?

The official FICO scoring model runs from 300 to 850 points.  But your score will very based on the type of credit you are applying for.  There are differing score-models for each type of inquiry:

(in order of risk preference)

  1. Credit request for a mortgage – BEST
  2. Credit request for a car loan
  3. Credit request for a credit card account
  4. Credit request for a store credit card or consumer loan – Worst

Mortgage and Auto Loans are considered more positive because the debt they create will reduce as monthly payments are applied.

Credit requests for credit card loans usually hit the scores the hardest.  This is because the debt balance is expected to go up every month until there is enough account history to show otherwise.

Once a negative condition hits your credit report, the damage is done. Paying a collection account will not regain the points you have lost.

Credit Score Breakdown

65% is tied to 2 things

  1. Payment History
  2. Credit Utilization
  • The amount of money you are borrowing and whether you are paying your creditors back is the primary source of high credit scores

15% is tied to the amount of time you’ve had credit in your name

  • The more time you have spent managing good credit the higher your score will be
  • First time borrowers bring an added layer of risk

10% is scored on the type of credit used

  • Auto loans and mortgage loans are scored as a positive.
  • Credit Cards are negative.
  • Pay Day loans almost ensure credit score deficiency.

10% is scored on a category deemed “new credit”

  • This is an assessment of the most recently opened accounts and the types of credit that have been applied for.
  • It also scores on how long it has been since you opened an account.
  • At the maximum this category is worth 85 points to your FICO.

A mortgage credit inquiry will lower your credit score by 5 points.  You can have as many mortgage credit score inquiries as you want for 14 days and you will only receive one reduction for 5 points.

Posted in: Condos, Credit, First Time Home Buyers, For Buyers, Household Finances

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Tulsa County Tax Sale

Tulsa County Tax Sale

Tips for Buying at the Tulsa County Tax Sale

The biggest Tulsa, OK, real estate event of 2013 could very well be the Tulsa County Tax Sale the second Monday of June.  The June resale auction is pursuant to Oklahoma Statute Title 68, Section 3135 and is referred to as The Commissioner’s sale. This year there are currently 1264 properties scheduled to go up for auction in the Tulsa County Tax Commissioner’s Sale.

This represents exciting opportunity, but there can be some pitfalls if diligent research is not completed. Properties in some instances have valid Federal, State or City liens which would have to be settled separately from the purchase auction.

Here are a few tips:

  1. Register – Tulsa County Treasurer’s Office at the Courthouse (500 S. Denver, 3rd Floor)
  2. Have your money ready
  3. Learn the guidelines for purchasing county properties
  4. Get a list from the Tulsa County Treasurer’s office.  There is a list on their website, but it is insufficient and out of date
  5. Go see the property
  6. Carefully review the Tulsa County bid form
  7. Contact the Delinquent Tax Department at 918-596-5070 with questions, or check here for answers

Tulsa County Tax Sale by Zip Code

  • 74106 – 238 properties to be sold
  • 74126 – 186 properties to be sold
  • 74110 – 155 properties to be sold
  • 74115 – 101 properties to be sold
  • 74115 – 101 properties to be sold
  • 74063 – 66 properties to be sold
  • 74127 – 49 properties to be sold
  • 74112 – 46 properties to be sold
  • 74107 – 41 properties to be sold

Tulsa County Tax Sale by Building Type

  • 743 Residential Houses
  • 58 Commercial Properties
  • 34 Residential Duplexes
  • 23 Residential Condos
  • 5 Mobile Homes
  • 3 Out Buildings
  • 3 Multi-Unit Properties

Tulsa County Tax Sale Opportunities – Highest Values

  • 8321 E. 61st Street – $8,881,600
  • 7625 E. 21st Street – $2,274,400
  • 8338 E. 61st Street – $2,270,700
  • 311 E. 2nd Street – $954,000
  • 6209 E. 110th St. – $735,000

 

Posted in: For Buyers

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How To Buy A Green Home

How To Buy A Green HomeNew Windows

If you are in the market to buy an eco-friendly dwelling, researchers say you should expect to pay more, on a national average 9% more, than comparable homes that are not green.  They are more sustainable, have lower utility costs and healthier.

What makes a home green?

Green is vogue, and green is vague.

And if you use the term wrong, there is always the bigger and badder hippie who will accuse you of green-washing: the practice of marketing a product as eco-friendly when it really isn’t.Bring it.

How to define a green home?

  • Limits over-usage of resources – It is energy efficient
  • Healthy – Utilizes non-toxic materials
  • Sustainable Future – locally sourced materials and sustainable

Who is a green real estate expert in your market?

Earth Advantage does a certification for realtors, but plenty of realtors know green, and a certificate usually won’t guarantee the agent is an expert; only that they paid someone to say they were. I bet you could ask for referrals, interview a few on the phone, and pick a favorite.The green types, we recognize each other.

Indicators of a Green Home

  • Appliances – Energy Star can be a plus
  • Windows – double pane
  • Heat and Air System – refurbished duct system, programable thermostat
  • Plumbing – water system, In-line water heaters
  • Could do an energy audit – Pro Energy Consultants are
  • You can ask for paper work but some don’t have it – the certification process for a lot of green features may not be standardized yet.

Discern the dwelling’s relationship to the land.

  • The home’s orientation – sun exposure and prevailing winds, which affect maintenance, heating and cooling
  • Landscaping – Look for native plants sustainable watering demands

Let’s talk.  Those of us who are passionate about green tend to have a deeper knowledge of the product.  And because, here is the good news: I can get you there!  I have a mortgage product that will absorbthe costs of making a home energy efficient, and provide you with one simple payment.

I even have a motgage product that will Refinance your home to be more green.

 

Posted in: FHA, For Buyers, Mortgage Types, Section 184 Indian Loans, USDA Rural Development

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Tips for First Time Home Buyers

Tips for First Time Home Buyers

Unusual Home

Many people delay their first real estate investment.  To them it may be a scary, confusing and stressful process.  But knowledge is power, and understanding a few pointers can prepare you to further explore the home buying process, turning the overwhelming and intimidating experience into an exciting one.

Step One – Get Pre-Approved

Although you should not rely on your mortgage adviser to determine what you can afford, knowing your limits and the cause and effect of closing cost options can help you comfortably commit to your budget.  Know your budget and weed out homes that you cannot afford.

A good reason to start with you pre-approval from a lender is you may want to polish your credit report before submitting to the bank.  Paying down credit balances may be a more effective saving method than making larger down payments.

Step Two – Set Priorities

Know your requirements for room counts, square footage, school system and location.  These are the permanent features that do not change without considerable investment.

On the other side of the list are the wants, the things that can be improved upon after you buy the property.  This can include a pool or hot tub, landscaping, finished attic or basement and hardwood floors.

Assessing the wants versus needs will help to keep focused on what is important and where the values are in your real estate search.  Look for homes that have all of the needs and leave some of the wants for future investment.

Step Three – Find the Best Real Estate Team

The real estate team is most often headed by a professional Realtor of your choosing.  Although they will be compensated by the commission paid by the seller, you should take the role of employer when considering your options.  Know what features you value in the realtor you will choose.  You should consider their strength as a negotiator, an advocate, a personal shopper and diligent communicator.  A good Realtor will enhance the investment of time and money you are giving to the project.

But the next most important member of your real estate team may be the home inspector.  They will help you avoid costly problems evident only from a thorough home inspection.  Just as with the Realtor  you should talk to several before hiring one.  Ask for qualifications, what is included in the inspections, how much time he spends and how he reports back to you.  Areas of concern may include but not be limited to construction quality, type and integrity of the foundation, condition of plumbing, heat and air system, electrical wiring and roof.

Knowing what you can afford and what you are looking for in a home will help you recognize how valuable a prospective property may be for you.  And once you know how to value a property, you will be more confident in how much to offer for it.

Posted in: 100% Programs, FHA, For Buyers, USDA Rural Development

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