Wednesday, September 30, 2015
Friday, September 25, 2015
Many Military members may not know about this hidden gem. While using a VA Loan you could qualify for another one at the same time.
Wow! a Potential house for Mom or a Rental property "cha-ching".
Below is more detailed information.
Second-tier Entitlement and VA Loan
credit to www.Military.com
While there’s plenty to know about the VA Loan for those just looking to use it the first time, there’s a dearth of information about using two VA Loans simultaneously.
“A lot of vets think they can only use their VA Loan once,” said Dan Davis, a VA Loan Specialist with VAMortgageCenter.Com. “They’re trying to save their VA Loan benefit when they don’t have to be.”
The VA does allow for having two VA Loans at the same time, however the borrower must qualify for the second loan and in some cases, may need two years of rental history on the first home to offset the mortgage payment when trying to get qualified income-wise to purchase a second home.
Each borrower using a VA Loan has a $36,000 entitlement that the VA guarantees to the lender in the unfortunate event that a borrower would default on the loan. The VA’s formula dictates whether or not all that entitlement is used with the initial loan, and thus, additional entitlement can be available. And even if the entitlement is $0 after the purchase of the first house, then the Veteran or active duty member can still use their second-tier entitlement, but there will be a standard minimum and maximum loan limits on what the borrower can use to buy that second house.
Often that minimum is $144,000 as set by the VA, and the maximum loan amount is around $260,000 for second-tier entitlement, however the formula is applied when calculating the second-tier entitlement, and that formula can result in a higher maximum loan amount.
“Second-Tier entitlement is nice though because for those people using it, it means they don’t have to sell their (first) property right off the bat,” Davis said of obtaining the second VA Loan. “But you still have to qualify for the VA Loan.”
While Second Tier Entitlement is not widely used because of its complexity and the fact that plenty of lenders are not well versed in calculating it, does not mean that interested borrowers should wave the white flag and look elsewhere for a different home loan.
If you’re in a VA Loan already and thinking about using your VA Loan again, Davis recommends calling the VA Loan Specialists at VAMortgageCenter.Com to learn more about your second-tier entitlement.“There are a lot of people that don’t know about it or are misinformed, lenders included,” Davis said. “But there are those out there, like VAMC, which do know about second-tier entitlement and how to calculate it, and are comfortable working with it.”
An Example of calculating second-tier entitlement:
$417,000 (is the loan limit) X 25% = $104,250 - $36,000 (base entitlement) = $68,250 + $21,853 (or the veterans remaining entitlement on COE) = $91,130 X 4 = $360,412 (this is the max amount the veteran can use in this example)
Typical Issues on a Home Inspectioncredit & Posted by Jeff Knox on Thursday, September 24th, 2015 at 1:16pm.
Meet The Usual Suspects of a Home InspectionHome inspections are both a necessary step to buying a home and are very in-depth. If you are a first time buyer, I bet you have never looked at home with this kind of attention to detail. Home inspection reports can be overwhelming. They average somewhere between 25 to 30 pages. However, know that your home inspection will cover almost every working system and structural component of the home you are purchasing. While there are certainly major issues which arise on a home inspection report and should never be ignored, there are often little, pesky items which are noted on almost every inspection report I've ever seen.
Major issues which should not be ignored? Large problems with your plumbing, HVAC, roofing, foundation and electrical. These can be what we call "deal breaker" items and they should always be remedied by a seller prior to a buyer closing on a home. In no way am I advising you to skip or ignore major issues. If a significant issue involving one of the aforementioned items is found on your inspection report, talk to your agent immediately about how to remedy the issue or cancel the contract. Not all of the major issues should cause you to terminate a contract, but they should cause you some concern about repairing the issues prior to taking possession of a home.
A Little Background on Home InspectorsOK, so let's get a few things out of the way first. (1) Home inspectors will absolutely find things wrong with every home. Why? Because you're typically paying them about .10 per square foot for the inspection. Meaning, if you are buying a 3,000 square foot home, you may expect to pay around $300 for your home inspection. Some inspectors are higher in pricing and some are lower. But, be careful when you hire a discount inspector. The old adage of "you get what you pay for" absolutely applies to home inspections as well.
So, in our example, a home inspector is charging you $300 to inspect your new home. If an inspector spends 3 hours at the home and then tells you there is absolutely nothing wrong with the home, you aren't going to trust their professionalism or that he did a thorough job looking over your home. Plus, every home has something wrong ranging from severe problems to pretty insignificant issues. Even new construction homes have issues. Advice - if you hire an inspector and he tells you nothing is wrong with the home, you may want to get a second opinion by another inspector. In 10+ years of real estate, I've never seen a perfect home inspection. Remember how I said they average 25 or so pages? How can nothing be wrong in 25+ pages?
(2) Home inspectors also take on quite a large amount of liability when they inspect a home. If a home inspector misses something significant like a water leak, you buy the home, the home floods due to the inspectors negligence of missing the major water leak, guess who is getting sued? That's right, the inspector. So, in an effort to cover their behinds, inspectors will (intelligently) note every issue they find on a home, whether it is major or very minor. They will note everything from a loose toilet screw to a leaky faucet to a step missing on the front porch in order to minimize their own personal liability. If they fail to note something as small as a broken step on the front porch and grandpa falls off the porch due to the faulty step, guess who gets sued? That's right, the home inspector!
Now you will have a little background as to why your report will cover so many issues, problems, recommendations, tips and be longer than you ever expected a report to be about a home. Honestly, it can be pretty interesting reading when it comes to learning about your new home, its structural components, working systems and how your home is basically put together. I'd advise you to read it beginning to end when you get it.
Top 10 Usual Issues Found on Every ReportWe've addressed the major concerns and I've given you a little background on home inspectors, their motivations and their jobs. Now let's focus on the meat of this article and those little issues I see at almost every inspection. While these issues should be corrected, they are not concern for panic or walking away from a home you really want. Here is my list of the top 10 things which are on almost every home inspection report I've ever seen...
#10 - Soil Height Around Foundation Of HomeThe soil height around the foundation of the home will not be the correct height. It doesn't matter if the soil is 2" around the foundation or 12" tall around the foundation, the height will not be correct to the inspector. I've never seen an inspector say the soil level around the foundation is the correct height. Hell, I don't even know what the correct height is supposed to be. However, I can tell you that it will be noted on your inspection report.
#9.5 - GFCI Outlets Not Up To CodeIf you're buying a preowned home, get ready because the GFCI outlets will NOT be up to current building code. Local code on GFCI outlets seem to change as much as gas prices at the pump. Again, I've never seen a preowned home live up to current building code with regards to its GFCI outlets. The outlets not being up to current code doesn't mean the seller has to rectify the situation. The home will be "grandfathered" into the correct code for when the home was constructed. This just means that if the home was constructed today, the GFCI outlets wouldn't meet current code. In case you don't know, GFCI outlets are the ones required in a wet area and will cause the breaker to trip with the slightest detection of water. These outlets save lives in kitchens and bathrooms. But, I can promise you that the home your buying will not be up to current code with its GFCIs.
#9 - Smoke Detectors Not Up To CodeI included a #9.5 and a #9 because both of these issues are code issues. Smoke detectors are now required to be in every bedroom in the State of Texas. This one is probably a good point to remedy after you purchase the home. Smoke detectors do save lives and having them in every bedroom is a good rule of thumb. Again, this isn't something the owner must fix. And, truthfully, I'd rather go to the hardware store and buy my own smoke detectors since I can get them with carbon monoxide features built into the same unit. If you make a seller fix this issue, you can rest assured they will do it as cheaply as possible. Get your own smoke and carbon monoxide detectors when you go to the hardware store for the other things on this list.
#8 - Foggy WindowsYou've seen them. You probably have one or two in your own home. No matter how much you clean and scrub these windows, they still have a "fogged" appearance. This issue stems from the double panes of glass with inert gasses (mostly argon) in between the panes which insulate both the windows and your home. The gasses are sealed between the panes by a seal. Over the years, the seals eventually break down and succumb to the elements which allow moisture to begin to enter the space between the panes. This is when fogging will occur. You can read more about this at Pella's website. Needless to say, I bet it hasn't been on the top of your repair list for your home. And, it won't be for a seller either. Expect some foggy windows.
#7 - Wood Rot Around Those Exterior DoorsExterior doors take a beating from mother nature. Fully expect there to be some wood rot around exterior doors, windows and your garage door framing. Wood rot is evidenced by the coat of paint peeling (usually near the ground) and the surface of the wood being exposed to the elements. If you ever seen any rotten wood, you'll easily be able to identify what the inspector is talking about when he shows you the wood rot. This is a very common issue. Wood rots. Expect this to be noted on your inspection report.
#6 - Get Your HVAC ServicedThis one is a very popular one here in Texas. Even if the HVAC is performing correctly on inspection day, I've never not seen an inspector recommend getting it serviced. This is a big CYA inspectors use in this part of the country because as modern humans, we enjoy our cold AC and warm heat. If your system gives you problems right after you purchase the home, guess who you are blaming? Yep, the inspector. I swear this is an item inspectors mark as needing repair or servicing before they even arrive at the home for the inspection. You'll see this item marked...I guarantee it.
#5 - Loose Nails On The RoofEach roof has thousands of nails which secure the roof to the decking and the decking to the framing of the home. You'll have some missing and loose nails. My guess is that the seller never even knew any of the nails were loose. However, if the seller did know there were some loose nails, I can almost guarantee you that he or she never climbed onto the roof to remedy the issue. You live with loose roof nails on your home, so did the seller. A handyman can make this repair. Don't stress about some loose nails on your roof.
#4 - Replace Those Broken Sprinkler HeadsSprinkler heads take a lot of abuse from kids running over them in the yard to mower blades hitting them when mowing, to just being stuck into the ground. I promise there will be some broken sprinkler heads. I think they cost about $4 at the local hardware store and they simply screw off the threaded PVC pipe in the ground. They are a very easy fix and you do not need a handyman to fix these. This is about as easy of a DIY project as you will find.
#3 - Window Screens Will Need RepairI've never quite figured out why we have window screens in Texas. But we do and they'll need repairing or replacing. You'll probably even find that some of your windows are missing their screens. Where these screens go is something I've never quite solved. At any rate, there will be missing screens, broken screens and screens which are bent and no longer fit the window correctly. Again, here in Texas it is usually hot and I cannot remember the last time I opened a window to let in "nice" hot breeze. I wouldn't worry about window screens but this is your call. In any event, get ready to read about missing window screens.
#2 - The Bathroom Exhaust Fan Vents To The AtticThis one drives inspectors mad. In the old days, builders would simply vent the bathroom exhaust fan into the attic. However, we now need special vents to vent to the exterior of the home as opposed to the attic. Modern code says that venting to the attic will cause the moisture from the bathroom shower to collect in the attic and could cause wood rot for the raw framing. I guess in theory this is right. However, I've never seen a home where the exhaust fan has caused major issues in the attic. Honestly, most people never correct this issue. This one is up to you.
#1 - Caulk, Caulk & More Caulk!No, I'm not being dirty. Read carefully. I said "CAULK." Get ready because you're going to need a gallon of it when the inspector is finished looking at your new home! Caulk can help seal the weather out of your home and inspectors love this product. They'll want you to caulk around windows, doors, bathtubs, showers, counters, backsplashes, your kids, the dog, the Christmas Tree.... OK, so maybe not the kids, dog or Christmas Tree, but they will want you to caulk just about everything else in the home. I'm not kidding! After you get your home inspection report, you may email me and tell me I was right about the caulk. Caulk comes in at #1 because, well, you'll see...
Sunday, September 6, 2015
Condo's vs Townhouses "courtesy of www.diffen.com
Tuesday, September 1, 2015
cincinkyrealestate.com on a great article on "How to avoid some charges in the Closing Cost". The article is a must read, since it details a wide array of Cost associated with the Closing procedure. For info click on " How to Avoid Closing Cost Sticker Shock "