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Robert E. Tait's Blog - Allied Mortgage Group, Inc.

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12668018_SEver hear the terms REO, bank-owned, short sale or HUD home? And have you even wondered what the heck all those terms mean? Here are some definitions used to describe common types of distressed properties:

Foreclosure: This refers to the process of a lender taking possession of a property from an owner who isn’t paying their mortgage as promised. After the process of foreclosure is completed and the homeowner has left, the property is offered for sale at auction.

REO or bank owned: The terms REO – short for the term “real-estate owned” – and “bank-owned” both refer to properties that are owned by banks. Properties gain that distinction after they go through foreclosure and fail to sell at auction. Adding to the confusion is that REOs and bank-owned properties are often called foreclosures. REOs, or bank-owned properties typically are offered for sale by real-estate agents and sold in “as-is” condition, meaning any repairs will be up to the buyer.

Short sale: This term refers to a property being offered for sale by a homeowner who owes more on their mortgage than their home is worth. Because the seller is asking a bank to accept less than they are owed, the bank is involved in the sale process and ultimately must give final approval to the selling price. That makes short sales some of the most complex and time-consuming real estate transactions.

HUD home: Still with me? This term refers to a home that was originally purchased with a loan insured by the Federal Housing Administration, which is part of the U.S. Department of Housing and Urban Development, or HUD. The FHA guarantees loans made by private lenders, so if a borrower defaults on an FHA loan, the agency will pay off the lender and take responsibility for the property. At that point, the property becomes a “HUD” home and is offered for sale in much the same way as a bank sells an REO.


20067797_SReady to buy your first home? Your first step is to visit a mortgage lender to see how much house you can afford. But be prepared for the paperwork that comes with it. Here are the documents you’ll be asked to provide as part of the loan application process:

Rental payment history. If you’re a first-time home buyer, you’ll need to provide proof that you paid your rent on time. Your lender can tell you how to document this payment history.

Tax returns. You will likely be asked for two or three years of tax returns with all the attached schedules and documents.

Paychecks, W-2s and other income documentation. Start with at least a month’s worth of paychecks, plus W-2 forms for you and your spouse. Do you have income from other sources? Include documentation for any freelance work, self-employment income and child support payments as well.

Account information. Your lender will want to see checking and savings account statements for at least one month. You may be asked for any other account statements as well to document your down payment funds and money you have set aside in savings.

Remember, the more quickly you respond to requests for documentation, the more quickly your loan application can be processed!


46796187_MEight seconds.

Not much time, right? But that’s how long you have to catch a buyer’s attention when selling a home. So, you’ve got to make those seconds count from the moment a prospective buyer arrives on your property.

It’s not just about selling your home quickly. It’s also about fetching the highest price possible.

Properties that look nice and smell nice inevitably sell for more money than comparable homes with cluttered closets, dishes in the sink and dandelions speckling the front lawn. So, how do you get your home ready for a potential buyer? Here are some tips that will help you make a good first impression.

Let’s start with the outside:

  • Curbside appeal: Believe it or not, the cleanliness of your street and sidewalk matter when it comes to selling a house. Keep the pavement in front of your house free of litter – even if it takes a sweep – and remove any weeds that may be growing up through the cracks of your sidewalk.
  • Fresh paint: Even if you don’t want to spend the money to paint the entire house, there are a couple places that will pay off in dividends if you can afford a few gallons of paint. When it comes to making a good first impression, there’s no better place to start than with the fence. Give it a fresh coat. You should also think about the front door, shutters and even lamp posts to send a message that you care about details.
  • Landscaping: No buyer will be impressed by an overgrown, or weed-infested, lawn. Keep the yard looking nice by mowing the grass, weeding flower beds and clipping any hedges.

Now for the inside:

  • Lighten up: Make sure your house looks as bright as possible. Light is a proven seller. So keep the windows clean, replace any burned-out light bulbs and even use mirrors to help magnify the feeling of light and space.
  • Color scheme: Although you may enjoy decorating in orange or lime green, avoid those colors when selling. Look for neutral colors that allow buyers to better picture themselves in the home.
  • Clean, clean and de-clutter: Make sure your potential buyer isn’t distracted by a gallon of milk on the counter, dust bunnies beneath the couch or knickknacks piled high on your shelves. Focus on making your home look big, clean and desirable.

Does that help? If you have any questions, don’t hesitate to call.


The 20 percent downpayment myth

Oct 3
7:29
AM
Category | General

793815 - two-story house with five dollar bills backgroundThink that you need a 20 percent downpayment to purchase a home? Many prospective home buyers buy into this myth, studies show. Yet research shows that among those who take out a mortgage to purchase a home, the median downpayment is about 10 percent.

For first-time home buyers (comprising more than one third of all home buyers), the downpayment is typically lower, in the 5 percent range, while repeat buyers typically make a downpayment of around 14 percent, according to National Association of Realtors’ data.

In all, 88 percent of home buyers finance their home purchases. Some other home financing facts:

  • For 59 percent of home buyers, the source of their downpayment is wholly or partially their personal savings. Thirty-eight percent of home buyers use all or part of the proceeds from the sale of a primary residence, contributing to the larger downpayment for repeat buyers.
  • For 13 percent of buyers, the most difficult step in the home buying process is saving for a downpayment. Of those buyers, nearly half say that student loans made saving for a downpayment more challenging. Forty-two percent cite credit card debt as being their primary challenge; 37 percent cite car loans.
  • Of all home buyers surveyed, 65 percent are married couples, 18 percent are single females, 7 percent are single males, and 8 percent are unmarried couples.

Are you ready to purchase a home? We’re here to help you get started!


38391470 - female realtor giving young couple key from real estateYou found a home your family loves. But you’re not the only one who wants it. What’s the best way to make an offer on a home that other buyers are vying for as well? Here are some ways to put your best foot forward:

Start off with your best offer. This isn’t the time to start with a lowball offer and wait for the seller to make a counteroffer before you offer more. If you have competition, you’ll want to consider making your best offer right off the bat. That said, don’t let a multiple offer situation push you into offering more than you’re comfortable paying.

Make sure you’re pre-approved. Make sure you’re pre-approved for a home loan before you start your home search, not just prequalified. Attach your pre-approval letter to your offer.

Don’t skimp on earnest money. An adequate earnest money deposit is a sign that you’re serious about buying the home.

Don’t waive the home inspection. In multiple offer situations, it’s easy to get caught up in the competition and do whatever it takes to win. To stand out, some buyers will even elect to not make a professional home inspection a contingency of their offer. Home inspections are an important part of the home buying process and can help you spot costly problems.

Relax. There are so many parts of a multiple offer situation you have no control over, so try not to let the stress get to you.


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