Posts Tagged: ‘Buying your first home’

Purchasing A Home With A Friend

August 5, 2021 Posted by Andre Hemmersbach

A few times a year I have clients who are thinking about buying a property with an unmarried “significant other” or friend. The idea sounds great and does have significant benefits. It is important, however, to consider both the pros and the cons of making the decision to co-purchase a property. The major benefits of buying a house with a friend are obvious:

Pros:

  • A bigger down payment is available to purchase the property and
  • You have someone to share the mortgage and other monthly expenses or
  • Help is available with property maintenance and repair work and
  • There may be extra income to help you qualify for a larger mortgage.

And I’m sure you can come up with a few additional advantages.

Cons:

  • If your co-borrower is not financially strong or has credit issues getting a loan could be be more difficult or
  • The promissory note you sign (mortgage) is written as a joint and several liability, meaning that if your co-borrower does not or cannot pay it becomes your sole responsibility or
  • You and your partner may a have different ideas on how much to spend or how to improve the property or
  • When one partner wants to sell and the other does not, how do you resolve the issue or
  • What happens to the ownership with the untimely death of a partner.

The examples of problems that could arise are only limited to your imagination on relationship variables and are not as clear as the benefits. If things go bad, your situation could leave you with some lasting complications.

Buying a property with a partner may or may not be the best decision you ever made in purchasing a home. My advice to all clients, including couples who are going to purchase prior to getting married, is to pay an attorney a small sum of money for an agreement that spells out the terms of the partnership. This is the best investment you can make in your partnership!

Please call me for a free consultation to discuss your home financing goals.

Managing Your Credit Scores

July 27, 2021 Posted by Andre Hemmersbach

Managing your revolving accounts is a tricky situation as it relates to your credit scores. For example, you may think it impresses the FICO scoring algorithm to max out your credit cards/store cards and to make your payments on time. That action will cost you interest and crush your scores.

The reality is you get penalized if you are using them too much (FICO penalty code 10); you get penalized if you don’t have any (FICO penalty code 15 & 16); you get penalized if you have them but are not using them (FICO penalty code 24); you get penalized for having too many or too few (FICO penalty code 3, 4 & 26) and you also get penalized by using a few of them at once even if it’s not very much (FICO penalty code 5).

Call me to set up a no obligation consultation to discuss what steps you need to take to increase your credit scores in preparation for purchasing your dream home.

Buyers Market Coming Soon

August 20, 2018 Posted by Andre Hemmersbach

Are we on the cusp of a change in the Real Estate market? The last 4 years have seen incredible increases in real estate values mainly due to an imbalance between supply and demand. Buyers (demand) have outstripped listing inventory (supply) month after month and year after year. In the last few weeks, I have had a number of conversations with Realtors who have told me that things seem to be slowing down. Multiple offers scenarios, while still happening, are being joined by less buyers and some properties that are not priced correctly are not getting any action. The truth will be revealed at the end of August and September (see chart below).

Price vs Listing Chart

Price vs Listing

 

The end of summer traditionally has a pretty sharp drop off in the number of properties for sale. If at the end of August and September that seasonal adjustment does not happen with its normal veracity, we could be seeing a future with buyers having a bit more room for negotiations.

I have been helping clients finance their real estate for the last 30 years. Call me for a free consultation.

Hot Up-and-Coming Real Estate Markets

March 21, 2017 Posted by Andre Hemmersbach

A great way to find hot up and coming real estate markets is to see where people are moving and it’s as simple as supply and demand…remember Econ 101?

According to United Van Lines, which has been tracking moving statistics for 40 years, retirees left sand and sunny beaches for western mountains. See the “Annual National Movers Study” below.

US map of hot up and coming real estate markets

United Van Lines Movers Study

Moving In Real Estate Markets

The top inbound states of 2016 were:
1. South Dakota
2. Vermont
3. Oregon
4. Idaho
5. South Carolina
6. Washington
7. District of Columbia
8. North Carolina
9. Nevada
10. Arizona

 

South Dakota is the most popular moving destination of 2016 with nearly 68 percent of moves to and from the state being inbound, furthermore, the state has continued to climb the ranks, increasing inbound migration by 23 percent over the past five years. New to the 2016 top inbound list are South Dakota at No. 1 and Arizona at No. 10 with 68 and 57 percent inbound moves, respectively.

 

Moving Out Real Estate Markets

The top outbound states for 2016 were:
1. New Jersey
2. Illinois
3. New York
4. Connecticut
5. Kansas
6. Kentucky
7. West Virginia
8. Ohio
9. Utah
10. Pennsylvania

In addition to the Northeast, Illinois (63 percent) moved up one spot on the outbound list, to no. 2, ranking in the top five for the last eight years. New additions to the 2016 top outbound list include Kentucky (58 percent), Utah (56 percent) and Pennsylvania (56 percent).

Purchasing a rental property or a second home in a hot and up coming real estate markets is a good bet if you are looking for capital  appreciation. If you follow some basic real estate investment guidelines, do a little homework and work with professionals, it could pay off in a big way! Call me to discuss winning strategies for purchasing investment properties.

Home Loans For The Self-Employed

April 9, 2016 Posted by Andre Hemmersbach

1040-Tax-Form

Home Loans for the Self-Employed

Getting home loans for the self-employed borrower may be easier than you think. Tax season normally represents a time of financial pain, but for some self-employed individuals it could represent an opportunity!

Everyone knows that one of the factors a lender will review before approving a borrower for a home loan in their income. What most people do not know, is that there is flexibility in the documentation requirements for self-employed borrowers.

A little known policy loophole in some lender’s underwriting guidelines is the ability to only use a 12 month average of net income from self-employed borrowers. Not all lenders follow the policy and some loan officers just default to asking for the industry standard 2 years returns because they do not know any better. The problem with that is once the underwriter reviews 2 years tax returns, they cannot just “lose” the documentation per their agreements with their investors; they have to use the 2 year average. On the other hand if your loan officer is aware enough to review and catch it upfront, a self-employed borrower who had a terrible 2014 but a record breaking income year in 2015 could be off and running with an approval to purchase the home they deserve!

I know the above to be true as our office usually turns around one to two deals every month that have been declined elsewhere for this very reason.

Please call me to set up a free consultation to create a plan so that you can qualify for a home loan to purchase your house.