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Is an FHA 203K Rehabilitation Loan the Right Fit for You?

by Maureen Cool

One of the quickest, though not the easiest, ways to build equity in a home is to buy a home in distress and rehab it. Investors often refer to this process and “fixing and flipping” a property. They buy distressed properties, bring them back to life and sell them quickly for a tidy profit. It’s a tried and true real estate investment strategy, but it’s not just for real estate investors. Individual homeowners can use the “fix it and flip it” strategy without actually flipping the property and the FHA 203k loan program makes this easier than ever.

What is an FHA 203K Loan?

Essentially, an FHA 203K loan is a government backed loan that allows you to include both the initial purchase price of the home as well as any renovation costs. You have one loan and one closing rather than a series of micro loans and one big loan.

As with other FHA loans, you are required to put down at least 3.5 percent of the total value of the loan. Other FHA requirements are also in effect. You will need a credit score of 640 or higher, a maximum debt-to-income ratio of less than 43 percent and the full loan amount cannot exceed the maximum FHA loan value cap for your area.

In addition to the typical paperwork that goes along with an FHA loan, you will be required to provide a detailed proposal covering the improvements you plan to make to your new home, a thorough cost estimate and a timeline for when those improvements will be completed.

Before the lender agrees to finance your purchase and proposed renovations, an appraiser will value the home as it is and give an estimate of the market value of the home after your proposed improvements are complete.

Streamlined or Traditional?

There are two forms of the FHA 203K loan: the streamlined and the traditional.

The streamlined FHA 203K loan is used to purchase and rehab homes that do not require structural repairs. Proposed repairs cannot exceed the $35,000 cap.

A traditional FHA 203K loan is used when structural repairs will be made. Generally, there is a $5,000 minimum for repairs and no cap.

Both forms of the FHA 203K loan require the homeowner to begin repairs within 30 days of close and all repairs to be completed within six months of close.

All forms of repair and rehabilitation are allowed with an FHA 203K loan with the exception of luxury items like saunas, swimming pools and other luxury additions.

The Downside of the FHA 203K

First of all, you are required to stick to your proposed schedule and cost estimate. This means that you can expect regular inspections of the work site, and that can be a hassle.

In addition to the periodic inspections, as with all FHA loans, you will be required to pay mortgage insurance for a minimum of 11 years and this can increase the cost of your loan significantly. Your interest rate will also be higher than a traditional FHA loan. Closing an FHA 203K loan takes longer and is more expensive than a traditional FHA loan. There is more paperwork involved and there is an additional $350 processing fee.

Even with these drawbacks an FHA 203K loan is still an excellent tool for the average homebuyer looking to invest their money in a property that needs a little help and quickly build up his or her home equity. An FHA 203K loan is definitely something to discuss with your lender. You should always weigh your options before committing to a loan.

Feel free to contact me for an appointment today. I will be happy to answer any questions you may have, help you to determine how much house you can afford, and/or help you to find your next dream home.

Maureen Cool, CRS
RE/MAX Realty Plus

www.TheCoolTeam.com
Maureen@ACoolRealtor.com

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Maureen Cool  is your ultimate real estate resource for Sebring, Avon Park and Lake Placid and surrounding areas. Visit my website for detailed information regarding today’s real estate markets.

Photo courtesy of geraldbrazell/Flickr.com.

How do you Calculate Residual Income for a VA Loan?

by Maureen Cool

How Will Residual Income Affect VA Loan Qualifying?

This week’s topic may be specific, but still extremely important –  because if this criteria is not followed, it could result in a closing being cancelled instead of celebrated.

VA Residual Income Guidelines

Per the VA:  “Residual income is the amount of net income remaining (after deduction of debts and obligations  and monthly shelter expenses) to cover family living expenses such as  food, healthcare, clothing and gasoline.” Read more here...

Whether it be USDA, FHA, Conventional or VA loans, just call or email to discuss your scenario and let us show you the "Metroplex" difference!

Article courtesy of:

Sean Stephens
Metroplex Mortgage Services, Inc.

Email:  SeanS@MPLX.org
8622 North Himes Avenue Tampa, Florida 33614
Toll Free: (800)806-9836  - USDALoanPro
Alabama, Florida, Tennessee NMLS: #185264
Texas NMLS: #356690

Understanding What It Takes to Sell a Luxury Property

by Maureen Cool

Selling luxury real estate is an art form and requires an attention to detail that is near obsessive as well as the assistance of an expert realtor. Buyers that are willing to invest millions of dollars to acquire a luxury home know what they want and they are determined to get it. The slightest problem or misstep and they will go on their merry way.

So, how do you ensure that you avoid any of these missteps when selling your luxury property on the open market?

Here’s a step-by-step guide to help you with selling your luxury home regardless of the market.

Get Your Property Ready to Show

When selling any property, it’s an accepted practice to clean the property to get it ready for showing. With a luxury property, this process intensifies tenfold. It’s not enough just to clean a luxury home; it needs the white glove treatment. Most sellers choose to hire a professional cleaning crew to go over the property with the proverbial fine-toothed comb. Every little detail must be perfect.

The same is true for the grounds. Once again, a professional landscaping crew is normally hired to make sure that all the hedges are uniform, the flower beds are refreshed and full of new, colorful flowers and the grass is fairway perfect.

Beyond just simply cleaning, many people choose to professionally stage their properties. Staging is the process of creating a look using furniture, artwork and other embellishments to create a look that is appealing to the discerning luxury homebuyer. It replaces furniture that may be dated with modern furniture. Essentially, it updates the entire look of the house.

Yes, this will cost money, but studies have shown that luxury home sellers that go through this process typically sell their home from between five and 20 percent more than those that do not.

Professionally Photograph and Film Your Property

Photographs used to sell a luxury home should be taken by a professional home photographer. Most luxury home buyers – or their agents – begin the home search online, and the only thing they have to judge a property by is a photo. Make sure that your photos stand out by using a professional photographer.

Because luxury properties are unique and possess so many distinctive architectural features and amenities, it is difficult to convey and accurate representation of the property with just still photos. That is why many people choose to also incorporate a video of their property in their marketing materials. Like the photos, make sure this video is recorded and edited by a professional. It will pay off in the end.

Market Your Property

Marketing is essential to sell a luxury property. The pool of potential buyers for luxury properties is understandably small. You must do your best to ensure that as many people have the opportunity to view your property as possible in order to improve your chances of finding the right buyer. Make sure that your agent is distributing your property through a variety of online outlets such as the local MLS, Trulia, Zillow, etc. Also, do not neglect to advertise on foreign real estate sites. A large number of luxury property buyers live outside of the United States.

Put the Word Out Through Brokers and Friends

As a luxury homeowner, your friends and their friends are part of your potential buyer pool. Make sure to get the word out to your network of business colleagues and friends that you are interested in selling your property. Some sellers even go so far as to host a party right before they put their home on the market or right after. They invite all their friends as well as well-respected brokers to the party. This gives the seller the chance to get the word out while the house looks its absolute best but in a relatively informal setting.

Show the Property

Be prepared to show your property as often as it takes to sell it. Don’t expect that your property will sell within the first few weeks. If it does, that’s great, but be prepared for the process to take a while. Luxury home buyers are picky. Don’t be offended if everyone doesn’t love your house. Be persistent and the right buyer will come along.

Showing your home is made much easier with an expert real estate agent on your side. He or she will handle all the showings. You don’t even have to be there. You can be away at the office or on vacation while your agent is showing the property. In fact, it’s normally better for both parties if the owner is not present while the house is being shown.

If you follow these steps, you will sell your luxury real estate, and you will command a top price. So, there’s no reason not to do your best to put your home in the best possible light, market it aggressively and show it until it sells. Contact me today if you are ready to sell your home. I will be happy to go over any questions you may have and help get the selling process started.

Maureen Cool, CRS
RE/MAX Realty Plus

www.TheCoolTeam.com
Maureen@ACoolRealtor.com

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Maureen Cool  is your ultimate real estate resource for Sebring, Avon Park and Lake Placid and surrounding areas. Visit my website for detailed information regarding today’s real estate markets.

Photo courtesy of Sean Stanfield at Flickr.Com.

With the amount of paperwork that is shuffled at a real estate closing, it is easy to become intimidated when it comes time to close a real estate transaction.

Don’t be intimidated. Most of this is the standard boilerplate and legalese. Most closing attorneys will breeze through this, expecting you to just nod and agree.

There is one area of your closing papers that you need to pay close attention to though: the HUD-1 or settlement form.

The HUD-1 is a government-mandated settlement statement that breaks down the costs of the real estate transaction in exhausting detail. This is an important document because it details how the end amount that the buyer and seller owe is calculated, and any miscalculation can mean that one party owes thousands more than they should.

So, let’s break down the HUD statement piece by piece. It’s only about two pages, so it shouldn’t take long.

The First Section

The first section of your HUD-1 settlement form will cover the basic information about the loan that will be used to purchase a specific piece of real estate.  In sections B through I you will find the buyers, sellers and lenders names. You will see the address of the property and a legal description if necessary.  The settlement company will be listed. The closing date will be listed. The loan will be described in exhausting detail.

Most of this is pretty simple stuff, but mistakes are made. One area to pay close attention to is the “Loan Type” section. Make sure the box that is checked is the correct one.

The Second Section

Section two of your HUD-1 settlement form will summarize the costs of the buyer and the seller. Section J deals with the buyer’s costs. It bears a strong resemblance to a tax form. Fields 100 through 120 detail the various sums the buyer owes. Line 120 will show the total. Fields 200 to 220 deal with amounts credited to the buyer with 220 being the total. 300 to 303 calculate the final amount due from the buyer using line 120 and 220 to calculate line 303 – the final amount due.

Section K deals with the seller’s side of the transaction. It will detail and total any reductions in the final amount due to the seller at close.

Check these figures carefully and make sure they are accurate.

The Third Section

Section three details the various settlement charges such as brokerage fees, lender fees, title insurance, escrow deposits, recording fees, etc.

Once again, make sure these fees are accurate and do not hesitate to ask questions of the closing attorney if you have any.

The Fourth Section

This is the Good Faith vs. Reality section, and many real estate professionals feel that this is the most important section for the buyer – and for good reason. In this section you will find a line-by-line comparison of the estimated costs of the loan versus the actual costs of the loan.

The final line will have a dollar amount and a percentage that the actual amount varies from the estimated amount. Most of the time this percentage is minimal, but on occasion, lenders make mistakes. If the amount exceeds 10-percent, the borrower is entitled to a refund for the overage.

The Final Section

The final section of the HUD-1 settlement form deal with the particulars of the loan. It will cover loan amount, interest rate, monthly payment, amount of insurance, etc.

So, that’s it. The HUD-1 form only looks intimidating. In reality, it’s very simple, and you shouldn’t feel intimidated as you check it line by line. It’s a very important document. Make sure to read it to protect yourself. Contact me today for a consultation. I will be happy to answer any questions you may have and/or help you find the home of your dreams.

Maureen Cool, CRS
RE/MAX Realty Plus

www.TheCoolTeam.com
Maureen@ACoolRealtor.com

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Maureen Cool  is your ultimate real estate resource for Sebring, Avon Park and Lake Placid and surrounding areas. Visit my website for detailed information regarding today’s real estate markets.

Photo courtesy of Alexander Owens at Flickr.com.

Can Credit Rescoring Help You Qualify for a Loan?

by Maureen Cool

Rapid rescoring is a powerful tool that can help buyers towards becoming “mortgage ready” by maximizing the built in potential of a homebuyer’s credit score in as little as 3 to 5 days. This week’s blog will provide details on this powerful tool which can be a solution to help those just miss prospects. Read more here...

Whether it be USDA, FHA, Conventional or VA loans, just call or email to discuss your scenario and let us show you the "Metroplex" difference!

Article courtesy of:

Sean Stephens
Metroplex Mortgage Services, Inc.

Email:  SeanS@MPLX.org
8622 North Himes Avenue Tampa, Florida 33614
Toll Free: (800)806-9836  - USDALoanPro
Alabama, Florida, Tennessee NMLS: #185264
Texas NMLS: #356690

Easy Ways to Go Green in Your Home

by Maureen Cool

The term “green living” means a lot of things. Mainly, though, it’s about living in a way that’s friendly to the environment. When you think about a green home, you may think of solar panels, wind turbines, grey water recycling, and other expensive projects. An environmentally friendly home doesn’t have to be expensive, however.

Homeowners that want to go green on a budget have many different ways to do it. With some time and a little work, you can go green in your home without spending a lot of cash.

You can get a big bang for your buck from basic maintenance projects around your home that make your home more energy efficient. Using less energy to heat and cool puts less strain on natural resources. Some of these projects include weather-stripping your doors and windows, plugging leaks in your walls and foundation, switching to low flow shower heads, and fixing dripping faucets. Each of these tasks only takes a few minutes and costs very little. However, they can significantly cut your energy use.

Going green is not just about energy savings, however. It’s also about using products that have less impact on the environment. Green up your shopping by buying products that use less packaging, buying local so that less fuel is used to transport items, and switching to household cleaners and detergents that are environmentally friendly. You may end up buying fewer things overall, which can save you money as well.

There are many other simple things you can do green up your home, including:

  • Install a programmable thermostat, and set it so your air conditioning doesn’t run when you are not home.
  • Switch to energy-efficient LED light bulbs.
  • Plant landscaping in your yard that will shade your house in the summer but allow sunlight through in the winter.
  • Replace old appliances with a newer, energy-efficient models. This is an investment, but can save you money in the long run on your utilities, which will help offset the cost.

You don’t have to shell out thousands of dollars for new solar panels on your roof or a wind turbine to go green. There are many other ways you can green up your home and routine. Remember, every time you make an environmentally friendly choice, no matter how small, you make a difference. Contact me today for a consultation. I will be happy to answer any questions you may have and offer suggestions on what you can do to increase your home's value.

Maureen Cool, CRS
RE/MAX Realty Plus

www.TheCoolTeam.com
Maureen@ACoolRealtor.com

Let’s Connect!

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Maureen Cool  is your ultimate real estate resource for Sebring, Avon Park and Lake Placid and surrounding areas. Visit my website for detailed information regarding today’s real estate markets.

Photo courtesy B Cleary/Stock.xchng.com

What is the FHA $100 Down HUD REO Program?

by Maureen Cool

The FHA $100 Down, HUD REO program is a purchase-money loan offered in limited geographic areas to borrowers purchasing a home owned by the Department of Housing and Urban Development. Buyers are only required to make a $100 down payment and may be eligible for sales incentives provided by HUD. Read more here...

Whether it be USDA, FHA, Conventional or VA loans, just call or email to discuss your scenario and let us show you the "Metroplex" difference!

Whether it be USDA, FHA, Conventional or VA loans, just call or email to discuss your scenario and let us show you the "Metroplex" difference! - See more at: http://www.mplx.org/blog/hud-reo-program/#sthash.nTtqBp1r.dpuf

Article courtesy of:

Sean Stephens
Metroplex Mortgage Services, Inc.

Email:  SeanS@MPLX.org
8622 North Himes Avenue Tampa, Florida 33614
Toll Free: (800)806-9836  - USDALoanPro
Alabama, Florida, Tennessee NMLS: #185264
Texas NMLS: #356690

15 or 30 Years – Which Mortgage is Best for You?

by Maureen Cool

Your home is one of the biggest purchases you’ll ever make. If you’re like most people, you’ll need a mortgage to buy it.

These days, there are a lot of different mortgage loans available. Should you get a traditional 30 year loan, or a faster 15 year mortgage? It turns out that both options have pros and cons. Before you make a decision, take a look at these points:

A 30 year mortgage offers flexibility. Your monthly payments are lower, because they are spread out over more time. If you become ill, lose your job, or have some other financial trouble, you are less likely to get into trouble with your mortgage. If you want to pay off your mortgage early, you can choose to pay extra each month toward your loan principal.

However, a 30 year mortgage carries a higher interest rate. That’s because the bank is taking a longer risk with you. So even if you do pay off your mortgage early, you will still be paying more in interest.

A 15 year mortgage will save you money with a lower interest rate. Borrowing money for a shorter time at a lower rate will save you thousands of dollars in interest payments over the life of the loan.

15 year mortgages also force you to pay off your loan earlier. If you can afford the higher monthly payments but don’t have the self-discipline to make extra payments yourself, this might be the right option for you.

However, the downside to a 15 year mortgage is the lack of flexibility. If you do run into financial trouble in the future, you can’t just pay less and turn it into a 30 year mortgage.

How do you decide which mortgage is right for you? Get preapproved for a mortgage before you start shopping for a home, and talk to your loan officer. Find out what the payments will be, and see how they fit into your budget. When you’re ready to shop for a house, contact me for an appointment. I look forward to helping you find your dream home!

Maureen Cool, CRS
RE/MAX Realty Plus

www.TheCoolTeam.com
Maureen@ACoolRealtor.com

Let’s Connect!

Facebook
Google+
Pinterest

Maureen Cool  is your ultimate real estate resource for Sebring, Avon Park and Lake Placid and surrounding areas. Visit my website for detailed information regarding today’s real estate markets.

Photo courtesy Fernando Mengoni, Stock.XCHNG.

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Photo of Maureen Cool, CRS, CIPS, RSPS Real Estate
Maureen Cool, CRS, CIPS, RSPS
RE/MAX Realty Plus
809 US 27 South
Sebring FL 33870
863-873-7243
Fax: 863-385-5897

Maureen Cool * RE/MAX Realty Plus
809 US 27 South, Sebring, Florida 33870
Office: 863-385-0077 X215
Direct: 863-873-7243
Fax: 863-385-5897

 
           


 

Maureen Cool of RE/MAX Realty Plus offers real estate services to buyers, sellers, relocation's in the Highlands County real estate area.

Including Polk County, Hardee County, Okeechobee County, Desota County and Glades County.


Whether you are looking for luxury, investment, second home, commercial, bank owned, foreclosures properties Maureen Cool and The Cool Team are your real estate professionals for the entire Central Florida area.
 

Maureen Cool is your Luxury Home Expert in Highlands County. 
She can assist you with your Sebring, Avon Park and Lake Placid real estate needs. 

 

 

This website is designed and maintained by
Kim Hughes Real Estate Virtual Assistant

 

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Unless otherwise indicated, all materials on these pages are copyrighted by Maureen Cool. All rights reserved. No part of these pages, either text or image may be used for any purpose other than personal use. Therefore, reproduction, modification, storage in a retrieval system or retransmission, in any form or by any means, electronic, mechanical or otherwise, for reasons other than personal use, is strictly prohibited without prior written permission.