Buyer Information

When To Consider A FHA Loan

November 14, 2017 by admin

FHA loans present a viable borrowing alternative to conventional loans for potential home buyers. Congress established the FHA in 1934 during the Great Depression as a way for lower income borrowers to purchase a home. The FHA became part of the Department Of Housing And Urban Development in 1965. FHA loans are mortgages insured by the Federal Housing Administration (FHA). The FHA is not a lender, but an insurer. Because of their relaxed restrictions, they can sometimes offer borrowers a path to home ownership that a conventional loan may not.

When looking at loans, you may want to consider an FHA loan to avoid the more stringent requirements that often come with conventional mortgages. Since the FHA insures the loan lenders are able to loosen the qualification requirements since they are no taking on the risks associated with a borrower defaulting. A conventional lender will demand a higher credit score, larger cash down payment, and a lower debt to income ratio.

You should consider a FHA loan if:

You Have Less Than A 5% Down Payment
FHA loans require as little as 3.5% down.

Your Credit Score Is Less Than Perfect
If your credit score is less that 620 an FHA loan may be the most viable option for you. In some cases lenders will consider a credit score as low as 580. If your credit score is below 580 a 10% down payment is required.

You Are Funding Your Down Payment Entirely Via Gifted Funds
FHA guidelines allow for 100% of your down payment to be gifted. Conventional loans cap the amount of gift money that can be used as a down payment.

Your Debt To Income Ratio Is High
Your debt to income ratio (DTI) is a major determining factor in how much you can borrow. DTI is the sum of all of of your monthly debt payments divided by your monthly income. The FHA is much more lenient on maximum DTI ratios. The DTI for an FHA loan is typically 45%, but can be as high as 50% in some cases. Conventional DTI ratios carry a DTI maximum of 43%.

You Have Had A Foreclosure Or Short Sale In Your History
FHA guidelines are much more lenient than conventional loans with respect to the waiting time prior to applying for a loan following a foreclosure, short sale, or deed in lieu of foreclosure by a potential borrower. The period following the discharge of a foreclosure and a new FHA application can be as little as 3 years as opposed to 7 years for a conventional loan.

Wallingford PA Real Estate – Wallingford, PA 19086

Hey Neighbor! – Where Is The Property Line?

March 15, 2017 by admin

Fences Can Define Property Lines – But Are Often Incorrectly Placed

Where is the property line? It is a question that every prospective buyer asks. The seller may answer definitively that they know exactly where the line is, and when questioned further they will cite an answer from the previous owner or on information that the neighbors have relayed. They probably have a rough idea but cannot say with absolute authority where the property lines fall, nor should you. If you are really lucky it might be possible to uncover the metal pins or small concrete markers that mark the property boundaries, but for many older homes this evidence of demarcation has long since disappeared.

The only way of knowing with certainty where your property lines are is to have a survey performed by a licensed surveyor. The cost of which usually runs about $800. A surveyed plan will mark all boundaries and lot lines along with all structures, easements and also show any potential problems.

A survey is accurate with in a fraction of an inch and will usually mark all corners for the person ordering the survey. A typical marker today is an orange stake driven into the ground. In the past a marker could have been a rock or stone marker.

The Agreement of Sale allows gives the buyer the option of electing to perform a survey as part of their due diligence, but a survey is not required when a house is sold in Pennsylvania. It seems a bit counterintuitive but when you purchase a home in Pennsylvania you do not definitively know the boundaries of the real property you are buying lie.

When is a survey necessary?

– The construction of any new features or structures on your property – a new fence, shed, garage, driveways, pools, etc. A survey is required to ensure the proposed construction does not violate any regulations regarding setbacks, etc.

– When the footprint of a home is being expanded via an addition

– The subdivision of an plot of land

– When a boundary dispute between neighbors arise

Wallingford PA Real Estate – Wallingford, PA 19086

Buying A Condominium? Know Your Contract Rights

March 7, 2017 by admin

Strath Haven Condominiumns

During the Roman Empire, the term “condominium” came into use to describe a building where owners occupied separate floors but shared a common roof. Over the years, as condominiums have grown in popularity throughout the country they have become governed by statues. In Pennsylvania condominiums are governed by the Uniform Condominium Act which outlines the rights and responsibilities of condo owners and Homeowner Associations are governed by the Pennsylvania Uniform Planned Community Act.

The Act also details specific rights of potential condo and HOA buyers in the standard Pennsylvania Agreement of Sale. Among these rights is the buyer’s ability to terminate an agreement that centers around the review of the documents and by laws of the condominium or homeowner’s association.

The paragraph reads:

The Act provides that Buyer may declare this Agreement VOID at any time before Buyer receives the association documents and for 5 days after receipt, OR until settlement, whichever occurs first

When a buyer and seller enter into an contract that involves a condominium or homeowners association the current set of association documents, including the by laws, rules and regulations, budget, etc, must be ordered by the seller within 15 days of the execution of the agreement.

Once the documents are received by the buyer a document known as a Receipt Of Documents is executed and the buyer then has 5 days in which to review the package of association documents. If upon this review there are rules, budgetary issues, etc. that concern the buyer they have the right to terminate the contract within the 5 day period and have their deposit money returned to them. The buyer also has the right to void the contract at any time before the receipt of association documents.

This protection is afforded to buyers of a condominium or homeowners association in order to allow them time to review the laws of the association as they pertain to their future daily life in the community. For instance if the association does not allow barbeque grills on unit balconies, or there are restrictions on the exterior paint colors, and such an restriction would be considered unreasonable by the buyer they can opt to back out of the contract.

Generally such rules are known to buyers prior to entering into a contract, but there cane be some hidden regulations that are not widely know that would cause a buyer some reservation.

This provision actually does work as I recently had a buyer who after reviewing the homeowner association documents was concerned about several regulations contained in the association by laws. He elected to terminate the contract and received his deposit money back.

Wallingford PA Real Estate – Wallingford, PA 19086

Understanding Your FICO Credit Score

February 28, 2017 by admin

The importance of wise and prudent use and management of credit is critical. Your creditworthiness determines the terms and interest rate of any loans you apply for, and ultimately whether or not a lender will lend to you at all.

You have probably heard of the acronym FICO. FICO stands for Fair Isaac Corporation, the company who provides the majority of credit scoring services in the country today.

FICO credit scores range from 300 to a high of 850. The following chart is a breakdown of credit scores for the U.S. credit population:

% Of Population Credit Scores

2% – 300 – 499

5% – 500 – 549

8% – 550 – 599

12% – 600 – 649

15% – 650 – 699

18% – 700 – 749

27% – 750 – 799

13% – 800 – 850

When discussing FICO scores terms in mortgage financing a score of 620 has historically been the dividing line between “bad” and “good”. Financing is possible for borrowers with credit scores below 620, but the interest rate will be higher and the terms more strict.

Various facets of your credit data are more important that other when determining your FICO credit score. The breakdown that follows summarizes the major criteria, and their relative weight in the determination of your credit score.

These percentages are based on the importance of the five categories for the general population. For particular groups – for example, people who have not been using credit long – the importance of these categories may be somewhat different.

PAYMENT HISTORY

Account payment information with such agencies as credit card companies, lenders of installment loans, mortgages, and retailers. This part of your credit score measures your ability to pay on time, and the money you have past due. The presence of adverse public records such as bankruptcy, judgements, suits, liens, wage attachments, etc., collection items, and/or delinquency or past due items is also a factor

AMOUNTS OWED

Information concerning the total amount of credit you have outstanding, number of accounts, balances on account, and how much credit you have relative to the maximum amount creditors are willing to extend to you.

LENGTH OF CREDIT HISTORY

This factor measures how long your accounts have been open with creditors and lenders. The longer your credit history, the easier it is to accurately identify payment patterns.

NEW CREDIT

The data used here reflects how much credit you’ve applied for lately. The number of recently opened accounts, and number of credit inquiries are key elements.

TYPES OF CREDIT USED

This is the measure of the diversity of credit you have in your portfolio. For example, do you have a mortgage, car loan, and credit cards? The more types of credit you have, the more accurately your score can be determined.

A FICO score takes into consideration all these categories of information, not just one or two. No one piece of information or factor alone will determine your score. The importance of any one factor depends on the overall information in your credit report.

For some people, a given factor may be more important than for someone else with a different credit history. In addition, as the information in your credit report changes, so does the importance of any factor in determining your FICO score. Thus, it’s impossible to say exactly how important any single factor is in determining your score – even the levels of importance shown here are for the general population, and will be different for different credit profiles. What’s important is the mix of information, which varies from person to person, and for any one person over time.

Your FICO score only looks at information in your credit report. However, lenders look at many things when making a credit decision including your income, how long you have worked at your present job and the kind of credit you are requesting.

Wallingford PA Real Estate – Wallingford, PA 19086

Title Insurance Rates In Pennsylvania Have Increased

May 5, 2016 by admin

Effective May 1, 2016 the Title Insurance Rating Bureau of Pennsylvania (TIRBOP) has instituted new title insurance rates for the Commonwealth of Pennsylvania. The rates for Title Insurance in Pennsylvania are increasing 12% and will impact all transactions closing after May 1st. The last increase in Pennsylvania Title Insurance rates was 7% on July 1, 2012.

Wallingford Real Estate – Wallingford, PA 19086

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S. Clark Kendus