Hard Money Loans

San Diego County is home to one of the largest concentrations of military bases in the United States. In fact, the San Diego area contains 12 major Marine Corps and Navy bases and facilities. If you’re in the military and moving to San Diego, one of your biggest decisions is whether to buy a property, live on base housing (if this option is available to you), or rent a home or apartment. If you choose to buy a property, there are many issues to consider before taking this step.

BUY OR RENT?

The decision to buy or rent is more complicated for military personnel because you may be assigned to San Diego only for a limited period of time. If you plan to purchase while in San Diego and then sell when you transfer, the condition of the real estate market at the time you sell will make this either an easy or difficult process. In a seller’s market (when demand exceeds supply), properties tend to sell quickly and at or above asking price. In a buyer’s market (when supply exceeds demand), properties usually take much longer to sell and may sell below asking price. Individuals in the military should consider this issue in determining whether to buy or rent real estate in the San Diego area.

For those who choose to buy, the major other consideration is the likely appreciation rate of your property during your tenure in San Diego. If you plan to sell your property before you depart to your next assignment, you should remember that there are expenses (e.g. realtor fees, taxes, etc.) associated with selling your house, and any price appreciation you realize by owing the property for a few years, may or may not be offset by these fees.

Some individuals choose to keep their property even after they transfer to a new assignment outside of San Diego. In these cases, you can rent out the property, leave it empty, or find another acceptable use of the dwelling. If you choose to hire a Property Manager to oversee the renting and maintenance of your property, keep in mind that the fess for this service will cut into any monthly profit you realize on the property.

GETTING A HOME LOAN?

If you decide to purchase a property, obtaining a home loan is one of the tasks you must undertake. Many active-day members, retirees and other service veterans are eligible for special loan programs guaranteed by the Veterans Administration (VA).

To be eligible for a VA guaranteed loan, you must have served on activity duty and have a discharge status of other than dishonorable after a minimum of 90 days of service during wartime, or a minimum of 181 continuous days during peacetime. There is a minimum 2-year service requirement for veterans who enlisted after September 7, 1980. The 2-year requirement also applies to Officers who began service after October 16, 1981. There is a minimum 6-year service requirement for National Guard members and Reservists, and surviving spouses are also eligible under some conditions. There are other special conditions in which a person may be eligible, so contact your local VA office to get more information.

WHAT IS VA GUARANTEED LOAN?

The VA loan is a federal guarantee of a maximum of 25% of a home loan amount but not to exceed $104,250. This formula allows eligible members to obtain a maximum loan amount of $417,000 (as of 2006). However, service members must meet other eligibility requirements. Individuals borrowing using this type of loan must intend to be occupants of the purchased property.

Private lenders are the source of funds for VA guaranteed loans. The guarantee provides these private lenders assurance that the federal government will reimburse the lender up to the maximum allowable amount if the borrower fails to repay the loan. Because of this guarantee, lenders are more favorable to offering loans without a requirement for a down payment.

VA CERTIFICATE OF ELIGIBILITY

Individuals desiring a VA guaranteed loan must first obtain a Certificate of Eligibility from the Veterans Administration (VA Form 26-1880). Contact your local VA office to obtain this form by calling 1-888-244-6711. You will need a copy of your military discharge document (DD-214) to submit with your application. Once you have the Eligibility Certificate, you can then select a lender or mortgage broker to work with on getting the loan.

CLOSING COSTS

In addition to the purchase price of your property, there are closing costs that must be paid to process your home loan. These closing costs are fees that are charged by different service providers to help complete the loan process. For example, your lender will require an appraisal of the property to make sure that its value is at or above your purchase price. Other charges commonly included in closing costs are: recording fees, credit report fee, prorated taxes and assessments, hazard insurance, flood insurance (if required), survey, title examination, title insurance, postage and shipping fees, and the VA Funding fee.

WHAT IS THE VA FUNDING FEE?

The VA charges a fee to individuals utilizing the VA guaranteed loan. This fee is a percentage of the loan amount and is linked to the size of your down payment on the home you plan to purchase.

For active-duty personnel or veterans who put no money down, the funding fee is 2.15% of the loan amount. This rate increases to 2.4% for National Guard/Reserve.

For active duty personnel or veterans who put a down payment greater than zero but less than 10% of the loan amount, the fee is 1.5% of the loan. This rate increases to 1.75% for National Guard/Reserve.

For active duty personnel or veterans who put a down payment of 10% or more of the loan amount, the fee is 1.25% of the loan. This rate increases to 1. 5% for National Guard/Reserve.

The rates listed above are for first time users of the VA loan guarantee program. Individuals who have used the VA guaranteed loan program before pay higher rates than first time users. The rates above are subject to change. In some limited cases, individuals are exempt from paying the funding fee. You should contact your local VA center for current information.

CHOOSING A VA LOAN VS. A CONVENTIONAL LOAN

You must carefully evaluate the terms of the VA guaranteed loan vs. the terms of a conventional loan. One advantage of a VA guaranteed loan is that many lenders will not require you to put a down payment on the purchase of the property, assuming you meet their other lending criteria (e.g. credit scores, sufficient income, adequate debt to income ratio, etc.). There are also many zero down payment conventional loan programs. In some cases, the VA guaranteed loan will offer a lower interest rate and better terms, and in other cases, you can obtain a better deal through conventional financing. A good loan officer can help you evaluate the advantages of either loan, given your particular situation.

FINDING THE RIGHT HOME

If you are familiar with the San Diego area, then you probably already know where you want to live. If you are less familiar with the communities in San Diego, your Realtor can serve as an excellent resource to answer your questions. There are many steps to take during the home search process, which include:

1. Work with your loan officer to identify how much you can afford.
2. Determine what type of property you want to buy (single-family home, townhouse, condominium, other). Your Realtor can advise you about the differences between these types of properties.
3. Determine how many bedrooms, bathrooms, square footage, etc. you need.
4. Determine what areas of San Diego you would consider living in.
5. Calculate the drive time (with and without traffic) to your job.
6. Identify the quality of schools in the neighborhoods that you are considering.
7. Locate the crime statistics for the neighborhood that you are considering.
8. Identify the location of local community resources such as libraries, shopping centers, athletic centers, etc.
9. Ask your Realtor to advise you about the resale potential of the home you are considering.

Although there are many other factors to consider, the above is a good starting point. Your Realtor should be able help you get answers to the questions above as well as provide you many other resources. Keep in mind that most Realtor’s who assist homebuyers and paid by the home seller, but make sure to ask your Realtor about this.

HOW MUCH SHOUD I PAY FOR A HOUSE?

Your Realtor should be an excellent source of information to help you understand a fair offer price. The Realtor should provide you information about what other similar properties in the same community have sold for recently, current pricing trends for the community, as well provide you a recommendation based on their experience in the local market.

DO I NEED A HOME INSPECTION?

There are many other issues besides the offer price to consider when making an offer. For example, many buyers find it advantageous to get an inspection of the property by a qualified inspector. The inspection typically covers the major systems of a property. Check out the National Association of Home Inspectors web site for more information about what is covered in a typical home inspection. Getting a home inspection is generally a good idea.

HOW LONG WILL THIS TAKE?

If you want to use the VA guarantee, then make sure you have obtained the Certificate of Eligibility far in advance of your relocation to San Diego. Whether or not you are using the VA loan program, be sure to obtain a loan pre-approval (sometimes called loan prequalification) from a lender or mortgage broker. This lets home sellers know that you are a serious buyer and are ready to act quickly if needed.

Prior to moving to San Diego, get a sense of the local real estate market. Your Realtor can set up an automatic email notification system that will send you descriptions and pictures of properties that meet your criteria. Doing this type of research should save you a lot of time when you arrive.

Once you have your loan pre-approval, the next step is to locate a property that meets your needs. Your Realtor should show you a variety of available properties that meet your criteria. Once you find a house you an interested in, your Realtor will prepare the purchase offer documents, and guide you through the loan and closing process.

In summary, it’s simply a process of getting a loan, finding a house that you like, making an offer that is accepted, and going through the closing process, which can occur in less than 30 days.

CONTACT A SAN DIEGO REALTOR

If you are moving to San Diego, contact a Real Estate agent who is familiar with VA guaranteed loans and has experience working with military buyers. Many agents have prior military service themselves, and are very familiar with your situation and needs.

How do HomeGain, Realtor.com, Service Magic and other companies like this make money? These companies are called lead generation companies. They spend vast amounts of money advertising on TV, the Internet, radio, and in print so that you’ll go to their website to find information about real estate. When you click on a property and request information the company then either sells the lead at a fee ranging from $20-$50 for an unqualified lead or up to a 35% referral fee for leads that are more valuable.
What does the company do for the fee charged? The answer might be pretty surprising. They don’t do anything, but forward the lead to a service provider. Yep, that’s right. You can search the MLS on any number of free websites so the website they provide is little more than a mechanism to get your information. Some people think agents, contractors, or other service providers are overpaid for what they do. Take a look at these companies and ask yourself if forwarding an email is worth $1500 (That’s the commission split they would receive on the sale of a $150,000 home.).
Who pays the fees that these companies charge? For the most part, the Realtor, mortgage broker or other service provider pays for these leads. The laws of business provide that you can’t get something for nothing. This is very true. So by adding no value to the transaction and taking up to 35% of the payment for service, the middle-man is taking value from both the consumer and the service provider.
Why is this bad for consumers? In real estate like many other service industries, the best Realtors obtain their business through referrals. The weaker, newer, less experienced agents typically buy leads from sources such as these. The next time you visit a site like these lead generators, think twice about giving them your information and go directly to the source. You’ll cut out the middle-man and get a better agent for your hard earned dollar.

Some people choose to use a real estate agent and some people choose to go it alone. One thing I have noticed over the years is that a number of seasoned investors looking in a new city will seek out a good agent while novice investors will frequently go it alone. I have even had a number of successful real estate agents seek out my help when they are moving to our city. Why do some of these seasoned investors choose to work with an agent? Below is a list of 7 benefits of using an agent.

1. Understand potential restrictions of the property. I recently heard a story from a friend at the city development office in Austin Texas. A couple had saved up for their retirement. They wanted to retire and live out in the hill country. They went to the foreclosure auctions. At the auction they purchased a lot for 500,000. It had great views and they were going to build their dream house on it. They had researched the lot before the auction and found it was zoned SFR which means a single family residence can be built on it. After purchasing the lot they started plans to build their retirement house. At this time they discovered the lot was in the 25 year floodplain. My friend at the city development office explained that the lot could not be built on and was basically worthless.

2. Know about new developments that might affect a properties value. A good realtor will know of proposed new developments that might affect different properties in which a buyer is interested. Whether these developments are positive or negative can be valuable information when weighing different housing options.

3. Find potential problems with a property. It is always a good idea to have a home inspector look at a potential house. However, a Realtor is a good first line of defense to see if a house has inherent problems. A Realtor that can know about common problems, such as foundation or electrical, that affect a particular neighborhood.

4. Understand contracts specifics. Whenever you buy or sell a house you are entering into a large personal transaction. It helps to have someone on your side that deals with these types of transactions on a daily basis. A Realtor can help you understand contracts and can explain what is typical for your area. The most common pitfall into which I see unrepresented buyers fall is to become involved in an atypical contract that is not to their benefit. For instance a seller will sign an offer that has an option period that is 4 times longer than what is typical. A buyer might put in offers on multiple properties with long option periods. The buyer will wait and see if the market appreciates. If the market has appreciated the buyer buys the house at now and undervalued price. If the market has gone down the buyer walks away.

5. Misperception of a benefit of going it alone. Buyers frequently think that by not using a buyers agent they will get a better deal from the seller. In most situation the listing agent asks for 6 percent from the seller. If a buyer comes with an agent the listing agent splits the 6 percent with the buyers agent. If an unrepresented buyer comes the listing agent keeps the whole 6 percent. On the selling side, For Sale By Owners (FSBO) often think they are saving alot of money by avoiding a listing agent. Nationally, FSBO homes sell for 14 percent less than agent listed homes in the same neighborhoods. In addition alot of FSBO’s still end up having a buyers agents involved. There is also money spent on advertising. Since an agent has experience marketing homes the agent often can spend money more effectively on advertising. Agents often know which advertising sources produce the most potential buyers.

6. Save time when looking for listings. Looking for listings without an agent can take up large chunks of time. When looking with an agent you can see several homes in a few hours. When going it alone you have to call the listing agent for each house and wait at the house for the agent to arrive and open up the house. In addition agents often know houses which are not listed or may have already identified potential problems with a particular house of interest.

7. Insure Security. When a home is listed with a broker, agents coming to the house have to usually log in. This allows the listing agent to keep a record of every party coming into the house. Since their business is on the line, agents are more likely to protect the house from damage or theft. For a variety of reasons, it is generally not a good idea to have random people you do not know come into your house. Often sellers simply have a phone number, but that phone could be their house, a friend’s house, a pay phone, or even a stolen phone.

Searching for a home can be stressful and difficult but it can also be fun. Whether you choose to look for a home on your own or with a Realtor its a good idea to be a extremely careful when you seek out your dream home.

What do the letters behind a real estate agent’s name stand for? Real estate agents, like doctors, lawyers, and other professionals can ear designations, certifications, and other credentials. These are usually shown by putting a series of initials after the agent’s name. The most common designations and certifications are: Broker, REALTOR, e-Pro, CHMS, GRI, ABR, and CRS.
What does an agent have to do to obtain the designation or certification?
e-Pro requires an agent take a class on basic computer skills. It has no real estate content, but ensures your agent can use email and the web. It should really be a bare minimum bar for the technology aptitude of your agent.
REALTOR is the one of the easier credentials to obtain (but one of the hardest to live up to). A REALTOR is a real estate agent that belongs to the National Association of REALTORS and agrees to follow the Realtor Code of Ethics. You can read about the code here http://www.realtor.org/mempolweb.nsf/pages/Code?OpenDocument
Broker is a bit harder to obtain than REALTOR. In Texas, for example, a broker license is required to be able to operate your own real estate company. An agent must have their license for 2 years and complete over 600 hours of real estate education prior to applying for a broker’s license. The broker’s license is granted upon completion of an exam administered by the state. Brokers are basically real estate agents with advanced educations.
GRI stands for Graduate Realtor Institute. Less than 50% of agents have this designation. The GRI requires 12 days of continuing education with passing grades on three exams. There are no production or time requirements so an agent can literally earn this designation by sitting in class for 12 days and passing the tests. This designation is in no way a measure of real estate sales experience.
ABR stands for Accredited Buyer’s Representative. Less than 30% of agents have this designation. This designation combines 2 days of classroom work and an exam with the requirement that the agent show proof of at least five buyer sales. This designation shows that the agent has had both formal classroom time and in the field experience.
CRS stands for Certified Residential Specialist. Less than 4% of all agents have this designation. This is the most difficult designation to obtain and is a measure of a high degree of formal education and real world transactional experience. To obtain a CRS, the agent must attend three 2-day classes, pass three exams, and provide proof of 25 closed transactions within the last 24 months. While the transaction experience isn’t a huge amount, it does weed out the inexperienced agents and the classes weed out those agents who aren’t dedicated to continuing education.
Other designations are out there, but for the most part they are issued by inconsequential groups and have no real bearing on the agent’s abilities and are used more for marketing purposes than anything else.

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