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Archive for August, 2011

My next couple of blogs will concentrate on the best loan programs for home buyers. The first is an FHA loan called the Platinum Grant Program. Normally FHA loans require a minimum contribution from the buyer of 3.5% down payment.

The Platinum Grant requires only 1/2% down payment from the buyer, the other 3% down payment comes courtesy of a grant, not to be paid back by the buyer.

There are some strict guidelines that have to be met by the prospective buyer. The home has to be owner occupied, that’s the case with all FHA loans. The buyers income can not exceed $87,000 per year.

The buyer can request in their purchase contract up to 6% seller contributions for closing cost. Interest rates are fixed at 4.5% and is very reasonable considering the low down payment required for this program.

Here’s an example that Rick Carrie from MetLife Home Loans in Davis prepared specifically for this blog. A couple renting for $1500.00 a month.

By utilizing the Grant Program, they can buy a home at $215,000 and pay the same amount for the mortgage that they were paying in rent. They also get the tax benefits from ownership.

Assuming the buyer uses the 6% seller contribution for the closing cost,
the buyer would only come out-of-pocket for $1,075.00 to purchase their property. This is an amazing opportunity for the individual or family that wants to pursue a home now. Do you know of anyone that might be interested in this program?

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Despite the volatility of the US economy, one thing remains constant. Investors will always look to stay ahead of the curve.
The advantages of investing in todays market is the potential to capture assets that provide positive cash flow. These investments are the holy grail of real estate investing. In a strong market, these properties might not exist, but in down markets, a smart investor can pick out these diamonds. Are you contemplating purchasing your first investment or you a seasoned investor? My areas of expertise are Sacramento, Yolo
and Solano counties have 100′s of properties that would be considered excellent rentals with positive cash flows. Economists consider an idea vacancy rate to be 5%. The vacancy rates for Davis 3.4%, Dixon 4.2%, Woodland 2.99% and Sacramento 6%
are all very attractive in that respect. Home prices have adjusted by as much as 25% to 55% in this area. We have no rent control in this region which is an appealing aspect to investment ownership. Let’s take a look at a few different loan scenarios using 25% down, compliments of Daniel Chen of Wells Fargo Bank in Davis, California.

Purchase Price- $100,000   $200,000   $300,000

Loan Amount-   $75,000      $150,000    $225,000

Interest Rate          4.75%          4.50%          4.50%

Monthly Cost    $555.40        $1,028.36    $1,512.54

Rents have not declined at the same pace or to the degree of the housing market. The combination of low interest rates, level rents and a steep decline in property values has created many opportunities for investors. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, read my other Blogs and easy access to view all local area homes for sale.

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Over the last few years with the dip in housing prices and many buyers purchasing homes with little or no down payment, the real estate market has seen a rise in foreclosures and short sales.

Now Chase Bank is attempting to remedy this situation and entice home owners with huge monetary assistance. A client received a letter from Chase Bank regarding their short sale request. Here’s a synopsis from this letter dated April 27,2011

Thank you for talking to us about how we can help you sell your home and avoid foreclosure. As we discussed, the short sale of your home will mean you will owe nothing more and will receive $30,000 to make a fresh start upon the sale of your home. To get started with your short sale, please follow these important steps and keep us informed.
1) Choose a real estate agent
2) List your home at fair market value
3) Send us your listing agreement

I have heard from sellers that are going through the short sale process that Chase Bank has given $20,000 to $30,000 incentives and also $15,000 toward home repairs for the buyer of the short sale. These payoffs are not instantaneous, short sales take a minimum of four months to complete and can take as long as a year to close escrow.

This aggressive procedure is not being used by other banks but this could be a standard that other institutions will implement. First-time home buyer purchases of short sales dropped to 39.7 percent of short sale transactions in August, according to a recent Housing Pulse survey. Real estate agents responding to the August survey indicated that home buyers frustrated with the short sale delays are resorting to placing offers on multiple properties, with the intention of closing on only one. This practice can bog down the short sale approval process at mortgage servicers.

Short sales rose 19 percent between the first and second quarters with 102,407 tranaactions completed nationwide during the April-June period, Realty/Trac recently reported. Pre-foreclosure short sales took an average of 243 days to sell after receiving the initial foreclosure notice. That’s down from an average of 256 days in the first quarter and follows three straight quarters in which the sales cycle has increased.

Are you or do you know of anyone considering a short sale? I have helped many families navigate through the short sale puzzle. Home owners are able to recover financially much quicker using the short sale strategy instead of foreclosure. Please visit my website www.JohnnyBrooksHomes for helpful tips on buying or selling a home, read my other Blogs and easy access to view all local area homes for sale.

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