4 Different Loan Products for Homebuyers

As a homebuyer, you should know what your options are when it comes to financing your purchase. I’ll go over four different types of loans for you today.

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There are a number of different loan products that you can use to purchase your home. I’ll go over four of them today. 

The first and most popular loan is conventional financing backed by Fannie Mae or Freddie Mac. This loan requires 5%, 10%, 15%, or 20% down, and you can use this option on a condo or single-family home. 

The second is FHA financing. An FHA loan lets you move into a home with as little as 3.5% down. The private mortgage insurance rate does end up being a bit higher, but the FHA loan also works well with a lower credit score. 

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   An FHA loan lets you move into a home with as little as 3.5% down.

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The 203k loan is similar to the FHA loan but it allows you to rehab the property. The 203k program gives you money to make upgrades and renovate the home. Of course, they are going to come in and monitor the work to make sure that it’s done by a qualified contractor. Still, that’s a great product if you want to renovate a bank-owned or short sale property. 

The final product is the homestyle loan. This is similar to the 203k loan but you do have to put a bit more money down than you would for an FHA. You can’t use the FHA or 203k on a condo, but you can use a homestyle loan. The homestyle loan will also finance construction costs. Again, they will monitor your process to make sure you are working with a qualified contractor. This is a great product to use.


If you have any other questions about buying a home, just give me a call or send me an email. I would be happy to help you!

5 Costs That Shock First-Time Homebuyers

Your mortgage isn’t the only thing you’ll have to pay when you buy a home. Here are five unexpected costs.

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If you’re thinking about buying a home, you need to be aware of all of the costs associated before you decide to take the leap. Here are five expenses that typically shock and/or creep up on first-time buyers.

1. Closing costs. These include mortgage taxes, lender application fees, attorney fees, and more. They vary from state to state and lending company to lending company, so make sure you get an accurate estimate of what yours will be.

2. Home improvements. According to a study by the Harvard University Joint Center on housing studies, the average home maintenance is 1% to 2% of the value of the home per year. For a $300,000 home, that’s around $3,000 per year. A condo will have slightly lower maintenance costs.

3. Property taxes. They vary from town to town and tend to go up most years. However, if you feel like what you’re paying is too high, you can appeal your property taxes on your own or with the help of an attorney.

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Closing costs vary from state to state.

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4. Utilities. These also vary based on the climate and the city you’re living in. In Atlanta, utilities are around $2,600 per year. In Portland, they are closer to $3,800.

5. Homeowners insurance. If you’re getting a mortgage, you’re going to be required to have homeowners insurance regardless. The annual premium is around $1,132 per year.

If you have any questions for us about any of these costs or anything else relating to real estate, give us a call or send us an email. We look forward to hearing from you.

Why You Need to Start With a Strong Offer

When you make your first offer on a home, it needs to be a strong one. There are a couple of main reasons why.

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When you make your first offer on a home, you need to make sure that it’s a strong offer. Why?

First of all, there’s the matter of etiquette to the seller.

For example, let’s say that a seller lists their property at $800,000. It just hit the market and you see it over the weekend for the first time. You make an offer at $750,000.

Now, the seller hasn’t been on the market long enough to accept that offer. They might counter offer and they may even accept your offer at $760,000. However, they will continue to show that property to other buyers. They will also look for every chance to kill that deal. 

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Don’t give someone else the chance to make a better offer than yours.

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The other thing to keep in mind is that once another buyer knows that you’ve already made an offer on the property, they will go in with a stronger offer than yours. Don’t give another buyer a chance to steal your dream home away.

Go in with a strong offer, get in and out of attorney review, and try to get to the closing table as soon as possible.

If you have any other questions about buying a home in today’s market, just give me a call or send me an email. I would be happy to help you!

3 Tips for Winning a Bidding War

If you’re looking to buy, you’re probably going to run into some competition for that dream home. Use these three tips to stand out and win the bidding war.

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With inventory so low, it’s possible you’ll run into a multiple offer situation while trying to snag your dream home. To make sure your offer stands out and wins the bidding war, follow these three steps.

1. Include a letter with your offer. Tell the sellers a little bit about yourself and why you love the home. It adds a personal touch that sellers love.
2. Make the terms easy for the seller. Try to be easy on them as far as the inspection and appraisal goes and allow for a flexible closing date.
3. Figure out the best price to offer based on the market, instead of the list price. It really depends on what the comparables look like and what the competition is doing. With the market so competitive, the list price isn’t going to be what the home sells for, so keep that in mind.

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Craft an offer based on the market instead of the list price.

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If you have any other questions, please feel free to reach out with a phone call or an email. We’re always happy to help.

The Benefits of Buying an Off-Market Property

Are you tired of getting dragged into bidding wars? Off-market properties may be the solution for you.

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Why would a buyer be interested in an off-market property?

Off-market inventory is very popular for buyers who’ve already missed out on other properties and know exactly what they’re looking for. Time is less of a factor in this case because it takes longer for us to find off-market properties.

For example, let’s say you wanted to purchase a unit in The Hudson Tea here in Hoboken but lost out in a bidding war. What we would do is call the rest of the units in the building and see if any of the owners would be willing to accept the same offer you made on the unit you lost out on.

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Off-market properties allow you to bypass bidding wars.

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If you missed out on a home in the suburbs, we would draw a circle around that home’s entire neighborhood and start reaching out to other homeowners in the event that they might want to sell. This is a great way to find inventory without worrying about getting into another bidding war. If the property makes sense, excellent. If not, that’s fine too. We’ll just keep moving along and see if any of the other neighbors would want to sell their home.

If you’re tired of bidding wars, we’re here to help. I estimate that one out of every 10 transactions we handle is an off-market transaction. Not only does it help buyers, but sellers usually get a great number at the end of the day as well.

If you have any questions about off-market properties, feel free to email me or give me a call. I look forward to hearing from you!

How Much Will an Investment in Real Estate Pay Off?

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Today we'll be looking at investments, and we'll be comparing a condo investment with a home investment. We'll be using the cap rate to determine which investment is better than the other. 

Let's say that you purchase a condo for $500,000 and have a monthly payment of $2,500. This is $30,000 per year, so you would take $30,000 plus all expenses related to the investment and divide it by $500,000. Let's say that your return each year on the investment is $19,000, so you would divide that by $500,000 and get about a 3.8% cap rate. This is pretty low, but pretty average for someone who would buy a condo and rent it out for some supplemental income. 

For a two family home that costs $500,000, there would be a monthly payment of $4,000. That's $48,000 per year, and that would give you a 6.8% cap rate. That's almost double the payout when you're spending the same amount of money.  

This is incredibly important when you're investing. There are a lot of ways to invest your money, but you want to make sure that you're doing it intelligently. If you have any questions, please don't hesitate to contact me!