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South Carolina Real Estate School for Success | February 2012

How good is your home foundation?

by Frankie Griffin 25. February 2012 12:48

 

Steel Piers to correct Foundation Issues

The most important and critical part of any home is the foundation.  If you have a good and strong foundation, the home will likely last for a hundred years or more.  However, if the foundation begins to develop problems, it can result in your home crumbling around you over time.  Although home buyers will likely have homes inspected prior to closing, I would recommend buyers have a foundation expert check out the foundation to ensure you will not have problems after you purchase the home.

 

The expert in foundation repairs in the southeast and specifically South Carolina is Terratec, Inc, soil and foundation stabilization specialist.  Terratec uses steel piering to push consecutive three foot long sections of high-strength steel tubing into the ground to refusal or load-bearing strata.  Structures are stabilized and/or lifted once all pier sections are installed to the proper depth at each of the required pier locations.  After stabilization or lifting is achieved, the steel piers are permanently attached to heavy duty steel brackets that have been previously mounted to the structure’s foundation footing.

 

As a buyer, when looking at homes for sale, there are several things you should look for when it comes to potential foundation issues.  A few signs of problems would include:

 

  • Uneven or sloping floors
  • Cracks in the brick foundation
  • Cracks in walls
  • Doors and windows will not open properly
  • Space between wall and ceiling or floor

 

If you are considering selling your home, sellers should also check for these signs.  We all know bad news does not get better with time, so lets make sure we know prior to negotiating a contract with a buyer, if there are any issues with the foundation.  If you see any of the above signs of potential foundation issues, call Dwayne Blanton, with Terratec, Inc., and he will come out at no charge to pin point potential problems.  Dwayne will also provide a free estimate to have your foundation repaired.

 

If you are considering a Real Estate License to start a new career or even to make some money part time in Real Estate, we would love to help you become a Successful Real Estate Agent at the Real Estate School for Success.  We have classes for any type of license you would be interested in to include, a SC Real Estate License, SC Appraisers License, SC Property Managers License or SC Home Inspectors License.  We have a Home Inspection class staring on March 15th, 2012 for only $450.  That is nearly half price when compared to other providers.  If you or someone you know would like to be a Home Inspector, register for this class on line or call the Real Estate School for Success. 

 

You can also receive a 10% discount on any class by entering the promo code below when you register on line at the Real Estate School for Success.

 

Discount/Promo Code is:  foundation

 

 

  Click here to listen to Saturdays Success in Real Estate Show.

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What you need to know about Government Loans.

by Frankie Griffin 20. February 2012 05:47

Government Loans

The two Government Loans we will discuss in this blog is the FHA and VA loans.  The FHA loan is Government Insured and the VA loan is Government Guaranteed.  Government loans will typically have more conditions to be met than conventional loans, but the one condition that makes these loans so common today is the down payment requirement.  VA loans require zero down payment while the FHA loan requires 3 ½ % down as compared to the conventional loan which would require anywhere from 5 % to 20% down.

 

As the Seller of a home where the buyer is seeking a Government loan, it is important to understand what closing costs will be involved with the transaction.  Although it is very common in the market today for sellers to agree to pay for the buyers closing costs, the seller must pay some of the buyer costs.  These costs are called non-allowable costs.  Non-allowable costs are those costs that the government will not allow the buyer to pay.  Either the seller will have to pay such costs or the lender will have to pay these costs.  If the lender agrees to pay the costs, it will most likely cause the interest rate to go up to offset the perceived loss to the lender.  As the seller of the property, make sure your agent explains what the non-allowable costs will are and the purpose for the costs.  It will affect you bottom line (Net Return).

 

Government loans also require addendums to the contract, such as the FHA addendum.  This addendum must be signed by the buyer and the seller, which simply states that the property must appraise for the purchase price or more or the financing will not be approved.  This is a common contingency in the contract already, but this addendum must be included with the contract when submitted to underwriting.  If you are using the VA loan, the Government will require a Certificate of Reasonable Value (CRV), which is the Governments equivalent of an appraisal.  If the CRV is less than the sales price, the buyer must pay the difference of the two amounts out of pocket.  The Government will not loan more than the CRV amount.  If monies are paid out of pocket, it cannot be borrowed or given to the borrower.  The money must be in the buyers bank account and it must be seasoned for at least sixty days.

 

Andy Aun with Aun and McKay Law Firm will be conducting a seminar to educate real estate agents, as well as buyers and sellers, on the requirements of Government financing.  There are many issues that must be considered at the time a contract is ratified in order to avoid default by either party to the contract.  This seminar is FREE to all and will include food and drinks.  Please see the flyer with all the information you need for this seminar at the bottom of this blog.  This seminar will be Thursday, Feb 23rd in Lexington, SC.  Hope to see you there!

 

When discussing finance or re-finance with a loan officer, you will do well by including Erica West, with New American Mortgage, as one of those you speak to.  Erica West is an expert in financing as well as down payment assistance programs.  Erica may be able to get the down payment you need at no cost to you.  Give Erica West a call at (803) 528-5019.

 

If you are considering a Real Estate License to start a new career or even to make some money part time in Real Estate, we would love to help you become a Successful Real Estate Agent at the Real Estate School for Success.  We have classes for any type of license you would be interested in to include, a SC Real Estate License, SC Appraisers License, SC Property Managers License or SC Home Inspectors License.  You can also receive a 15% discount on any class by entering the promo code below when you register on line at the Real Estate School for Success.

 

Discount/Promo Code is:  government

 flyer.bmp (2.47 mb)  Flyer for Aun and McKay seminar on Government Loans.

 

  Click here to listen to Saturdays Success in Real Estate Radio show!

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How much down payment does a homebuyer need today?

by Frankie Griffin 12. February 2012 04:58

Loan to Value (LTV) Ratio?

As a Realtor®, it is so important to know and understand the type of loan your homebuyer will be using.  Otherwise, the contract of sale will likely not be drafted in such a manner to protect your homebuyer’s best interests.  It is simply not enough to receive a pre-approval letter from the lender.  Exercise your due diligence and make sure you know the type of loan and terms associated with the loan or you may be wasting your buyers (and your own) time.

 

One example I use in my classroom is concerning a young man that came to see me about purchasing a home.  As always, I asked him if he had already applied for a loan.  Much to my surprise, he said he did and had a pre-approval letter in his hands for $150,000.  I then asked if he knew the terms of the loan and he replied that he had been told he could buy any house up to $150,000.  I called his lender and learned that he was pre-approved up to $150,000 with a 90% Loan to Value (LTV) ratio.  After hanging up with the lender, I asked the buyer how much money he had to put down on his new home.  He said if he had to put money down, he felt comfortable putting $5,000 down on the home.  I told him the most he could buy a house for is $50,000, which was very confusing to the buyer.  You see, the LTV ratio is critical in knowing what one can buy.  With a 90% LTV ratio, that means the bank will loan 90% of the purchase price and the buyer will have to put 10% as a down payment.  What a huge waste of time this would have been to all involved if we had made an offer based solely on the pre-approval letter.

 

Down payments can be one of the biggest concerns for homebuyers today.  Therefore, the type of loan program will typically be decided by the amount of money available for down payment as well as credit report/history.  There are four common loans a homebuyer can choose from today with varying degrees of LTV ratio’s. 

 

1.  Conventional Loans have a 95% LTV ratio.  However, if a buyer only makes a down payment of 5%, they will likely have to pay Private Mortgage Insurance (PMI).  PMI will be paid until the buyer has accumulated 20% equity in the property.

 

2.  FHA loans have a 96.5% LTV ratio, which requires 3.5% down payment.  Since these are Government Insured loans, you will likely have to pay Mortgage Insurance Premiums (MIP).

 

3.  VA loans have a 100% LTV which requires no down payment.  This is a Government Guaranteed Loan.  The government will guarantee the first 25% of the loan amount, up to $104, 250.  Lenders will typically be willing to loan up to four times the guarantee, or $417,000, since they basically get 25% equity in the property with the Governments Guarantee.  The Government Guarantee eliminates the need for PMI or MIP.

 

4.  USDA loans also have a 100% LTV.  However, one can only get this loan for the purchase of a home in a rural area.  You will have to check with your lender to determine if the home you are considering is listed as a rural property.  Although you will have to pay PMI with this loan, it is very cheap as compared to Conventional loans.  One can expect to pay around $12 per month for every $50,000 in loan amount.

 

It is vitally important for homebuyers to use a Realtor® that understands the types of financing and which loan type will best suite the buyers circumstances as well as having a very knowledgeable loan officer.  I always suggest talking to two or three loan officers to see which one can get you the best deal.  I also suggest you use a local lender that you can actually go see and talk to.  Most on-line lenders are out of state and often times very difficult to get answers or help from in a timely manner.  When discussing finance or re-finance with a loan officer, you will do well by including Erica West, with New American Mortgage, as one of those you speak to.  Erica West is an expert in financing as well as down payment assistance programs.  Erica may be able to get the down payment you need at no cost to you.  Give Erica West a call at (803) 528-5019.

 

If you are considering a Real Estate License to start a new career or even to make some money part time in Real Estate, we would love to help you become a Successful Real Estate Agent at the Real Estate School for Success.  We have classes for any type of license you would be interested in to include, a SC Real Estate License, SC Appraisers License, SC Property Managers License or SC Home Inspectors License.  You can also receive a 15% discount on any class by entering the promo code below when you register on line at the Real Estate School for Success.

 

Discount/Promo Code is:  loans

  

 Click below to hear this weeks Success in Real Estate Radio Show!

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