Jan 8, 2010
The Benefits of a Good Faith Estimate and Pre-approval When Buying Real Estate
Most real estate purchases are bought with loans so getting a good faith estimate and pre-approval letter from your lender helps the process start off on the right foot. The good faith estimate, or GFE for short, is required by law to be provided by lenders when you are seeking a loan. It lists out the estimated closing costs, monthly payments, and interest rates for the loan program you are looking at getting. The pre-approval letter is provided by lenders once they have run your credit and get your income / debt information. By getting the GFE and pre-approval letter, you can be confident that the loan will get processed with no surprises. There are also additional benefits to getting pre-approval and GFE before you even begin the property search. For one, by discussing your debt to income ratio with your lender and obtaining the GFE, you can determine your maximum price. It helps to know the maximum sales price when shopping around so that you do not waste time and energy looking a over-priced properties, and also vice verse, you do not waste time and energy looking at under-priced properties. You can find an area in your price range that fits your needs and narrow down your search. You also will determine your monthly payments with the GFE. The monthly payments should include the property taxes, insurance, principle, and interest plus any private mortgage insurance (PMI). If the monthly payments are higher than you wanted, then you can adjust your sales price to be lower. Another reason to get your pre-approval and GFE before starting your home search is that you may find out some issues with your credit or financial situation that you could clean up before moving forward with a purchase. For example, the first time I bought a house, I found out that I had a $50 charge on my credit report from 3 years ago, which brought my credit score down. And with a lower credit score, I would have gotten a worse interest rate on the loan. I say ‘would have’ because I was able to pay off this collection and clear up the ding on my credit before going into the loan underwriting process. Finally, by getting a pre-approval letter, you have proof for a seller that a lender has confidence in being able to fund the purchase on your behalf. This helps with presenting offers and negotiating. Many sellers will not even accept an offer unless it is accompanied by a lender’s letter. Furthermore, if you do not have a letter, the seller may counter higher given that he feels he is taking on more risk that you may not be qualified for the loan amount. Also, if you happen to get into a multiple offer situation, your offer will be much stronger with a pre-approval letter.
Watch the video related to buying real estate
Buying a foreclosed property is a very good deal. Discover how to buy foreclosed property withexpert tips from a licensed real estate agent in this free video. Expert: Richard Blake Bio: Richard Blake is a licensed real estate agent that has closed more than 20 times the number of transactions per year than that of the average realtor for the last three years. Filmmaker: Christopher Rokosz
Help answer the question about buying real estate
How do relocation real estate buying programs work?
So we’re interested in buying this house. However, there’s an agreement by the seller with a relocation real estate company, to buy the house from them if they can’t sell it after a period of time. We found out we made an offer that is lower than the relocation company. So are we working with the seller or the relocation company? And is this not worth it? Seems the relocation company did not incorporate the expected decline in home prices. It needs a lot of upgrades and needs some repairs too — the reason our offer was also agressive. Any thoughts? Advice? thanks!
About Author
Ki works in the Austin Texas Real Estate market. His website provides a free search of the Austin MLS along with a search for Downtown Austin Condos
Hi Paul I was wondering can you get me a loan specialist on the FHA 203k rehab loan and the repo loan for ohio and detroit? and get me a list of properties the qualify in both cities
Well first and foremost you need to come up with the money. Here are some ways. . . . This is the biggest challenge and where most people give up on the whole idea. . . .
1. Get a mortgage http://www.jeremydrobeck.com
2. Ask friends & family to lend you the money
3. save up the $$$
4. withdraw from a 401k
5. move the money to a self directed IRA and then use the the IRA to buy property
6. personal loan
7. Get a peer to peer loan online.
Hi
I am a real estate agent in Los Angeles Ca.
If you can help me where to find those banks notes .
Where do I need to start?
I thank you/
YES ,
I make about 60K a yr in rent on an avrage of 6 homes
Its not all proffet. I try to make at least 200.00 a month more than the MTG , INS, & Taxes The longer U own it the the smaler the MTG Payment ,The ins & tax goes up And tennants Move out etc. Long Turm is ok Property Values aventuly go UP and then U can Cash in eather sell it Keep it for income / retierment
Good Luck
You dont need to join a website to get listings. However, what we have done at the office is purchase a marketing kit from http://www.getthoselistings.com it worked well because we were able to target specifically the listings we wanted…and my boss was thrilled because our completive advantage increased drastically! But check it out, and if you have any questions I'd be glad to help (or I'm sure you can contact the site owner).
Better question is what area in Manhattan can you afford. Before meeting with the broker you should let him/her know what your price range is. Questions to the realtor should be:
How much down payment
Monthly maintenance
How difficult to be accepted by Condo Association
Amount of money in reserve for major repairs and renovations of common areas.
How often have owners been charged with special assessments.
Do some research of average condo prices per sq. footage,
Good luck
I don't know what you mean by savings. The mortgage interest and property taxes are deducted on schedule A as you already know. That helps to reduce the amount of tax you owe at the end of the year. (if you would have owed any). I guess what you are asking is how much each paycheck will you save in federal income tax??
To figure that out you have to know how much interest per year your mortgage will be and how much property tax your house will be charged.
After you know those answers you can divide the total by the number of paychecks you receive a year and then have your employer reduce your federal witholding by that amount.
My dealings with relo companies have been mixed. It used to be more common for companies to offer relocation packages to employees of a *certain position*. The benefits to the employees can vary widely.
Sounds like you are dealing with a buy-out. That's a pretty sweet deal for the transferring employee. Typically, an appraisal is done and the employee and the company reach an agreement of a buy-out price. At that point, there is little incentive for the transferring employee to negotiate the price down from what the company has agreed to pay.
At this point, you will typically do all negotiations with the owner, not the relo company. Some times, after the property is under contract between the owner and a buyer, but, just before closing (a couple of days), the relo company will buy out the owner and then closing documents and will show the relocation company as the seller of record. Just depends on the deal the owner (transferring employee) has.
You may just have to wait and see if you can negotiate with the relo company AFTER the buy-out. It may take a while until the relo company recognizes that the asking price is too high. Then you may be able to negotiate a lower price.
Good luck.
The first goal is to live within a budget. You'll need to do this to properly handle the house payment and still put some aside for retirement.
The next goal is to aggressively save for a down payment.
While you're saving for the down payment, read and research the home buying process.
where the turf..meets the surf….. your fingers not pulsating that much,
if you have time to write the 1st chapter of a very boring book.
I am an agent, I closed on a property yesterday for 434K and the house appraised 2 years ago for 800K…it really depends on the bank, some banks don’t even accept FHA lons, It also depends on the condition of the house..in most cases form my experience, your offer will not be accepted without signing a bank adddendum, you have to read that document carefuly and consult an attorney..
No.
But anyone who tells you at your level of experience and knowledge to go in debt to invest and buy real estate by using your home as security is doing you a disservice, especially as roller coaster natured as California real estate is. There will even be someone who will counter my comments herein to say how wrong I am and tout their success. I recall the Bible verse that says "Many are called but few are choosen." So as you are filing the bankruptcy forms it is too late, and you'll remember to not do it again. I have helped people like you write the letters of explaination for their financial failures enough to know that for the average person it is not a wise decision to gamble with the family home and its security.
You need to save some funds, for in the next yr or so there will be forclosures in CA that you will be able to get favorable bank financing on at good prices. I'd suggest that a better investment is a commercial income producing property that has long term leases and low turnover with "credit" tenants if possible.
A lot of these guru people that tell you to go in debt also have disclaimers in small fonts that also say "…these results are not typical." There will be a few that do succeed and those few will be the featured guests- who are also compensated for their endorsement. Several of those same guru pitching their material have also been bankrupt but they do not tell you that, because you would then not buy their program because it did not work for them not does not work for most people. That is why they now "tell" you how to get rich, as they get paid- by you up front for their "knowledge" or technique. Many simply tell you what you want to hear, an easy way to get wealthy when in fact there is no such way or everybody would be doing it.
True, real estate is a good means to grow wealth but there are better ways to invest in real estate with less risk than leveraging your home thereby putting it, possibly your marriage and family at risk.