Hard Money Loans

The Department of Housing and Urban Development has released a mortgagee letter outlining requirements that impact the use of government logos when advertising Federal Housing Administration programs. HUD provided copies of two logos that can be used by approved mortgagees. HUD said that any advertisements must emphasize the mortgagee and not FHA or HUD.

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The Department of Housing and Urban Development published a mortgagee letter clarifying and updating existing guidance concerning refinance transactions for FHA insurance. Many of the items discussed in the letter are effective immediately, as they are clarifications of already existing policy. New guidance becomes effective 60 days from the date of the mortgagee letter.

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The inspector general of the U.S. Department of Housing and Urban Development has issued a letter to Sen. Charles Grassley questioning the low amount of a Department of Justice settlement with Beazer Homes. The settlement was tied to alleged fraud at the company’s defunct mortgage unit on federally insured mortgages. The inspector general claims that, given the losses, the amount of the settlement was not enough.

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Why would any borrower accept 15% rates and 5% on the front of a hard money commercial loan?  Because their other options are worse.  For example they may lose a substantial amount of equity out right or have to take on a partner that may take a higher percentage of their equity than a hard money lender would charge in fees.

Also the commercial hard money loans are easier and more reliable to attain than finding, negotiating and bringing on a partner or waiting months for a conventional loan to close (assuming the borrower qualifies).  Partners also have the high potential of creating legal issues if the project does not work out as planned.

Hard Money Commercial Loans  

For borrowers seriously considering going with a hard money commercial lender it is wise to only use a source that has been referred to borrowers by an experienced, unbiased third party.   This segment of the industry is filled with unethical people that have the bad habit of taking $15,000 good faith deposits with no intention of funding loans.  For many borrowers this $15,000 may be their last chunk of cash and they can’t make the mistake of going with the wrong commercial hard money lender.   Borrowers have almost no recourse either as most have to sign agreements stating that the fee is non refundable and the Letter of Intent is only a letter of “interest”.   Which of course, relieves the hard money lender of funding the deal. 

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.

Finding the perfect Huntsville home for your family is a new beginning for not just you, but your entire family and sometimes your extended family and friends. You may be closer to work, but your children may have to switch to a different school system. The best way to deal with all the changes involved with moving is to make the Huntsville home of your choice as perfect as you can. Of course it’s hard to find every single thing you ever wanted in a home but most of the time with a thorough search of the Huntsville housing market you can come close to finding pretty much what you are looking for.

Before you even begin looking at houses, sit your family down and talk about what you’d each like to have in your Huntsville home. Take notes and have each of them tell you in order of importance what they think is most important. If you or your spouse spend more time at home than the other, take special care to find out and consider what they feel is most important in a home. Particularly if one is at home with the kids or works from home, special concessions may need to be made for them.

The next step is to get prequalified for your Huntsville home purchase. Check with two or three lenders to make sure that they can get you the best rates available. There may be some things that are negotiable, so take the time to talk to the lender in person.

Now the fun begins, take your list and your prequalification letter with you and begin looking for a good Realtor that will satisfy your needs. Find a realtor that can work with your house, and is good at working with buyers, not just sellers of property. Experience is key when finding the best realtor to help you find the perfect Huntsville home. They should be able to look at your prequalification letter and your list of requirements and start sorting through the Huntsville homes that are available and that meet your family’s needs.

Ideally, you will find just the right Huntsville home in a few days, normally one to three days of serious Huntsville home shopping is enough to find a home that works well for everyone. Occasionally a Huntsville home shopper will have been watching a particular home for months or even years and it has just come on the market and the home sells quickly. Normally a home buyer will walk through each Huntsville home, with a list of preferences, and determine which home is going to be the best fit for you and your family. It is unlikely you will find one that has everything your family wants, but you can get pretty close. There are a lot of choices to make when looking for a Huntsville home, and you are sure to be pleased before long. The Huntsville home market is a sometimes fast pace market active and stimulated in part by Redstone Arsenal military base. Huntsville’s local economy is healthy and upbeat, if you’re considering a move to the Huntsville, Alabama area you won’t be disappointed with the many great things our area has to offer.

Steve A. Thomas is your Huntsville home resource serving Huntsville, Alabama and surrounding areas. Steve A. Thomas Realtor, Associate Broker, ABR, e-Pro RE/MAX Huntsville Cell: 256.694.4663 Toll Free: 800.239.4749 Ext. 4945 Web site: http://www.HuntsvilleAreaHomes.comArticle Source:http://www.articlesbase.com/real-estate-articles/finding-the-right-huntsville-home-for-you-and-your-family-1378739.html