5 Myths about Using FHA Loans to Buy Southern New Hampshire Homes Debunked

FHA loans are mortgages issued by qualified lenders, including traditional lenders like Citigroup and Wells Fargo, and insured by the Federal Housing Administration (FHA).  The popularity of these loans are skyrocketing and for good reasons.  They feature low down payments, low closing costs and are easier to qualify for.

Despite this popularity, there are many misconceptions surrounding FHA loans.  Here are just a few myths and the facts behind them.

Myth #1: FHA only loans small amounts to buyers of Southern NH homes. 
Fact:  To help stabilize the real estate market, the government recently raised the maximum loan amount from its original cap of $362,790 to $793,750. The FHA loan amount a buyer can borrow varies by state and county and by type of home (Single Family, Two-Family, Three-Family, Four-Family).

Myth #2:  FHA loans are exclusively for lower-income borrowers. 
Fact:  FHA loans are available to everyone. There are no maximum income restrictions.  Potential borrowers must verify income and assets to ensure they can afford the loan.

Myth #3:  FHA loans are exclusively for first-time buyers of Southern NH homes.
Fact:  Whether Southern New Hampshire home buyers are making their first home purchase or their twentieth, they can potentially qualify for an FHA loan.

Myth #4: FHA loans are affiliated with the low-income housing program.
Fact:  FHA loans have nothing to do with the Section 8 Housing Program or any other low-income or subsidized housing programs. FHA loans are simply mortgages insured by FHA.

Myth #5: FHA loans are risky. 
Fact:  FHA loans are often easier to obtain, but that does not make them riskier.  The FHA requires full documentation of borrowers’ income and assets to ensure they can afford the loan.

If you’re ready to look at Southern NH homes to buy, whether you’ll be using an FHA loan or a non-FHA loan, I can help you find your perfect home.  Give me a call today at 603-821-1134 or email me at Dave@TeamHeeter.com to get started.

5 Steps to Rebuilding Your Credit After a Southern New Hampshire Foreclosure

When you go through a Southern New Hampshire foreclosure, your credit score drops considerably. The good news is that you can rebuild your credit.  Here are a few tips to help:

   1. Create a budget. A budget lets you see exactly how much money you have to spend each month. It also helps you track where you spend your money. Put together a budget that fits your lifestyle and then stick to it.

   2. Build an emergency fund. You never know when an emergency will happen. When you’re prepared for a financial emergency, you’re better protected from financial problems.

   3. Repair your credit.  Review your credit reports from all three credit bureaus.  Dispute any errors you find.  Removing errors from your credit reports help improve your credit.

   4. Establish new credit. This can be tricky after a Southern New Hampshire foreclosure. New credit will give you a chance to prove you can manage debt. However, you certainly don’t want to find yourself owing more than you can possibly pay. If you can get a traditional credit card, your interest rate will be very high, so choose and use your credit cards wisely. An alternative is to apply for a secured credit card, which requires that you put money down as a deposit before credit is extended to you. Use your card regularly but lightly, and you will see your credit start to improve as you make consistent payments.

   5. Have patience. It takes time to rebuild your credit. Don’t expect your credit score to be in the good or excellent range within weeks or even months after your Southern New Hampshire foreclosure. It’s going to stay on your credit report for seven years, so there’s no need to rush.

A foreclosure is not the end of the world. Let me help you plan for and find your next home so it fits your budget. Give me a call at 603-821-1134 or email me at Dave@TeamHeeter.com.

4 Types of Mortgage Lenders for Your Southern New Hampshire Home Loan

One of the least understood aspects of Southern New Hampshire home loans is the different types of lenders.  Many people assume they have to get a home loan from a traditional bank.  Not so.  There are many different types of lenders. 

Here are the main types of mortgage lenders and how they function:

   1. Mortgage Bankers: Mortgage bankers are loan originators that operate with the sole objective to sell the loan they create to another source. Even though they will sell the loan they must have the ability to finance the loan in the first place and hold it until it is sold.

   2. Mortgage Brokers: This type of lender does not originate loans for your Southern New Hampshire home, they prepare the paperwork to submit to multiple lending institutions and get offers they will present to you to choose from. Their offers may come from any of the other types of mortgage lenders.

   3. Banks and Savings & Loans: These are the most common traditional sources of mortgage loans.  They use the backing of their depositors to fund mortgages.  In turn, they use the money paid by borrowers to repay the depositors’ interest for allowing them to use the money as an investment.

   4. Credit Unions: Credit Unions operate in largely the same way a bank or savings and loan does by using money from a pool of depositors to finance investments in the form of mortgages and other types of loans. The difference is that most credit unions are operated out of a collective pool of closely associated people generally through a work place or professional organization.

If you’d like help determining the best type of mortgage lender for your Southern New Hampshire home purchase, give me a call today at 603-821-1134 or email me at Dave@DaveHeeter.com.

Are You Pre-Qualified, Pre-Approved or Approved for a Southern New Hampshire Real Estate Mortgage?

One of the more frustrating aspects of buying Southern NH real estate is qualifying for a mortgage that will allow you to buy the home of your dreams. Lenders use terms to describe your loan status that may be confusing.

For example, what is the difference between being pre-qualified, pre-approved or approved for a mortgage on your Southern New Hampshire real estate?

·    Pre-Qualified – This just means that the lender may approve you for a loan if everything checks out. Pre-qualification is based solely on information you give the lender about your income and debts. This is no guarantee that you will get a loan. People do sometimes omit important details about their finances (whether accidentally or intentionally), so the lender won’t even be able to give you a possible loan amount at this point.

·    Pre-Approved – Once your lender pulls your credit report, they can give you an idea of what kind of loan you may get. When you’re pre-approved, you still have no guarantee that you will get a loan, but you have a better idea of your price range. Sellers like working with people who are pre-approved because it shows that their credit has been verified, and they are more likely to qualify for a loan.

·    Approved – When you are approved for a loan, your financial records have been verified, and the lender can say for sure how much they are willing to lend you for a particular home. You can be approved for a mortgage only after the lender has approved both you and the home. Once you have approval, you can move forward with the purchase.  This is why a financing contingency is included in the standard Purchase and Sales agreement used in New Hampshire for writing contracts to buy and sell property.

For more information about the mortgage approval process for purchasing Southern New Hampshire real estate, call me today at 603-821-1134 or email me at Dave@DaveHeeter.com.

Closing Costs Defined: Lender Fees for Buying Southern New Hampshire Real Estate

The closing table can be a confusing place. You have what seems like mountains of paperwork pushed in front of you. You sign countless pages, often not completely understanding what is written. People often leave the closing on their Southern New Hampshire real estate wondering if anyone took advantage of them.

When you understand the meanings of the words that are included in the closing paperwork, you’ll feel more secure about what you’re signing.  To help you gain that knowledge, here are definitions for some of the most common lender fees included as part of closing costs when buying Southern New Hampshire real estate.

    * Appraisal Fee: This covers the cost of the appraiser who assesses the property’s value.

    * Credit Report: Lenders check your credit history before approving you for a mortgage. This covers the cost of your credit report. 

    * Discount Points: This fee lowers the interest rate on your loan. Each discount point costs 1% of your loan amount and reduces your interest rate for the life of your loan (usually by fractions of percentages).

    * Flood Certification:  This is the cost of the automated service that tells the lender whether or not the property is located in a flood plain.  If it is, it may require flood insurance.

    * Lender’s Inspection Fee: This fee usually applies to new construction. It covers the cost of inspections performed by the lender, but does not include pest inspections.

    * Mortgage Broker Fee: This fee covers any fees or commissions paid to the mortgage broker.

    * Mortgage Insurance Application Fee: Mortgage insurance protects the lender and pays a portion of your mortgage in case you die or default on your loan. This fee pays for mortgage insurance processing.

    * Processing Fee: The lender charges these fees to process and approve a mortgage.

    * Tax service fee: This fee covers the cost of the lender setting up your tax escrow and monitoring the payment of your property taxes.

Let me help you take the confusion out of closing costs. Call me today at 603-821-1134 or email me at Dave@daveheeter.com for more information about lender fees for your Southern New Hampshire real estate.

Buying a Southern NH Home for Sale – Fixed or Adjustable-Rate Mortgages?

As soon as you decide to buy a Southern New Hampshire home for sale you’ll be looking at loans. You’ll see balloon loans, fixed-rate mortgages, adjustable-rate mortgages and a few others. Fixed and adjustable-rate mortgages are the most common, but why and what’s the difference?

The biggest differences are in cost and security. Fixed-rate mortgages can cost more, but have a measure of security. Adjustable rate mortgages, or ARMs, can cost less, but have less security.

As with all things, ARMs and fixed-rate mortgages have pros and cons. Here are just a few:

The Pros and Cons of ARMs
When you buy a Southern New Hampshire home for sale with an ARM, your payments will be lower than a loan with a fixed-rate mortgage. Because the payments are lower, you can afford to buy a more expensive home. As well, ARM payments are based, in part, on interest rates. When interest rates fall, your payments go down.  (It's not an immediate effect: the payments are recalculated at regularly scheduled intervals predetermined by the loan paperwork - could be every 2 years or 5 years, etc.)

The cons of adjustable-rate mortgages are just as big as the pros. For example, because they are based on whatever the current interest rate is, you can end up having a higher mortgage payment if interest rates rise over the term of your loan. If rates rise sharply and the cap on how much the rate can rise per adjustment is set high, a 6% ARM can turn into an 11% ARM within four years. Another negative is that because ARMs aren’t easy to understand, borrowers can be confused, which makes it easier for shady mortgage companies to trap them in a bad deal.

The Pros and Cons of Fixed-Rate Mortgages
With fixed-rate mortgages, your payment stays the same whether interest rates rise or drop. This makes budgeting easier and is a plus when interest rates rise. However, homeowners with fixed-rate mortgages have to refinance if they want to take advantage of dropping interest rates.

Likewise, because the payment never changes, fixed-rate mortgages cost more. Mortgage lenders don’t offer rate breaks on fixed-rate mortgages. The other con, which may be a big one to some, is that fixed-rate mortgages don’t vary from lender to lender. With adjustable-rate mortgages, the lenders are flexible and can customize the loan to your needs; this isn’t true with fixed-rate mortgages.

The biggest question to ask yourself when considering an ARM or fixed-rate mortgage is, “Can I afford my home if interest rates spike?” You could start paying $875 a month, and, with a quick rate rise, end up paying $1,514 within four years.

My Advice
With interest rates as low as they are right now, I see no value in getting an adjustable rate mortgage.  As long as interest rates are in the 6% and under range, I would ignore the adjustable rate option and stick with the security of the fixed rate mortgage. 

When considering which type of home loan to use for buying a Southern New Hampshire home for sale, don’t be afraid to ask a lender to explain the pros and cons of each type in depth. Don’t ever consider signing the contract if you aren’t sure what you’re signing.

If you’re looking for a great home to buy, I can help. Call me at 603-821-1134 or email me at Dave@DaveHeeter.com for more information.

How Does a Second Mortgage Work on a Southern NH Home?

You may not know it, but you can take out a second mortgage on your Southern New Hampshire home if you have equity in the property.  A lender may offer you a home equity loan (HEL) or a home equity line of credit (HELOC).  Which one is right for you?  Here are a couple of tips to help you decide:

    * A home equity loan is commonly referred to as a second mortgage.  Expect the process to be similar to getting your primary mortgage.  Your home will have to be inspected, and you’ll need to arrange for another appraisal.  Home equity loans frequently have a higher interest rate than primary mortgages because the lender is at a greater risk of you defaulting on the loan.

    * The HEL can be a fixed-rate mortgage, which means that your interest rate and payments are fixed for the duration of the loan.  This makes it easier to plan for the payments, so you’ll be able to borrow responsibly and not get in over your head.

    * A home equity line of credit is more like a credit card secured by your Southern NH home.  It allows you to withdraw money, up to a set limit, whenever you need it. There is generally a minimum payment due each month.  Unlike a loan, you'll increase your available credit each time you make a payment.

    * A line of credit usually has a variable interest rate, like a credit card.  It may have a low introductory interest rate for a short time, and then increase for the rest of the loan term.  You can access the funds with a bankcard or checks drawn off the HELOC.

If you are borrowing for a single project like remodeling the kitchen of your Southern New Hampshire home, you might think about a home equity loan.  However, if you’re looking to finance a re-occurring expense like college tuition, an open line of credit might work best for you. 

Have questions about mortgages or real estate?  I’m happy to help.  Call me today at 603-821-1134 or email me at Dave@DaveHeeter.com.

Wish You Could Refinance Your Southern NH Home But Think Your Home Isn't Worth Enough?

If you’re a homeowner who is unable to refinance to a lower interest rate because your Southern New Hampshire home’s value has decreased, there’s hope.

A program called the Home Affordable Refinance Program (HARP) has been extended for another year. This program, intended to help borrowers whose homes have fallen in value, was due to expire as of June, 2010. Fortunately, HARP has been extended and will now stay in effect through June 30, 2011.

How does HARP help?

The program allows qualified borrowers who owe more than their homes are worth to refinance at lower interest rates. It’s projected to help 4 to 5 million homeowners with loans owned or guaranteed by Fannie Mae and Freddie Mac.

If you’re a Southern New Hampshire home owner whose mortgage interest rate is significantly higher than the current market rate, you could see an immediate reduction in your payments. However, some homeowners may not see their interest payments go down if they refinance to a fixed rate and payment. Those include homeowners who:

• are paying interest only 
• have a low introductory rate that will increase in the future
• face a balloon payment

If you are one of these homeowners, you should still consider refinancing because it could save you a great deal of money by reducing the amount of interest you pay over the life of your mortgage.

Who qualifies for HARP?

You may qualify if:

• You own and live in your home.
• The loan on your home is owned or guaranteed by Fannie Mae or Freddie Mac. 
• When you apply, you are current on your mortgage payments. 
• The amount you owe on your mortgage does not exceed 125% of the current market value of your property. 
• You’re able to pay the new mortgage payments. 
• The refinance improves your ability to pay your mortgage long term.

If you have questions about HARP or any other questions about Southern New Hampshire homes, please give me a call today at 603-821-1134 or email me at Dave@DaveHeeter.com.

3 Things You Need to Know About the Mortgage Payment for Your Southern NH Home

When you look for a mortgage, you want to find one that allows you to buy the biggest house possible for a monthly payment you can afford. This seems simple enough. All you need to do is a little division to determine your monthly payment.

Unfortunately, this isn’t the entire picture of your monthly mortgage payment, and lenders don’t always explain this to you. Here are three things you need to know about your monthly mortgage payment for your new Southern New Hampshire home:

1.    Interest and Principal. Only part of your monthly mortgage payment actually pays down your loan. A portion of your mortgage payment goes toward your loan principal and part of it pays the interest. The longer you have your loan, the more money goes toward your principal each month. Be aware that at the beginning of your loan term, most of your payment goes toward interest and does little to reduce the amount of money you owe on your home.

2.    Homeowner’s Insurance and PMI. Typically, your lender collects money to pay your homeowner’s insurance premium. This increases the amount of your monthly payment and can change if your insurance company raises or lowers premiums. Depending on your loan amount and property value, you may also have to pay private mortgage insurance (PMI) which protects a lender against loss if you default on your loan.

3.    Property Taxes. In most cases, your annual property taxes will be paid through your lender. The lender collects extra money each month that they pay to your local government at the end of the year. When local taxes increase or decrease, so does your payment.

Call me today at 603-821-1134 or email me at Dave@DaveHeeter.com to help you find the home (and mortgage provider) of your dreams.

Buying a Southern New Hampshire Home: Free Credit Reports Not All They Seem

You’ve finally decided that, yes, you can afford to buy a Southern New Hampshire home. After years of frugal saving, hard work and patient waiting, the timing is great. You don’t want to wait anymore, so you rush out and start looking for homes. It is, after all, a buyer’s market, and you’re a buyer.

Now, if you read about real estate, you’ve probably considered your credit. Is my credit strong enough? Is my score high enough? Some go to lenders and request preapproval. A few request prequalification. Many, however, go to the “free” credit score searches.

Of those who use the credit score searches, some find a Southern New Hampshire home they want to buy. They then confidently take their credit reports to the lenders and find out the lenders don’t care about the reports. Others find out that the “free” doesn’t really mean free.

Generally, these credit reporting services are helpful, but most aren’t free. You sign up to get your report and, in the fine print, you’re agreeing to enroll in services that require a monthly fee. The services you end up paying for can be somewhat helpful.  But many people sign up not knowing what they’re getting into.  If you want those types of monthly services, research the companies and don’t fall for scam sites, because they’re out there.

Why won’t leaders use the credit reports you take to them? 

They can’t use the credit scores you bring to them. In fact, they’re required to request credit scores on their own. And, the credit reports lenders get may not reflect what you receive from the reporting services you hired.

Typically, lenders use the median FICO Scores from three credit bureaus: Equifax, Experian and TransUnion. Those FICO Scores may not be the same from bureau to bureau. Some of the “free” credit places provide these scores, but usually from only one bureau rather than all three.

So what should you do?

Talk to the lender. Get preapproved, not prequalified. Not only will you find out how good your credit really is, but you’ll also be more attractive to sellers.  And, preapproval tells you exactly how much you can reasonably afford to spend on your new Southern New Hampshire home.

If you’re looking for a beautiful home to call your own, I can help. Call me at 603-821-1134 or email me at Dave@DaveHeeter.com for more information.

Is a Reverse Mortgage on Your Nashua Condo a Good Idea?

Did you know that cash could be hiding in your Nashua condo?  If you are sixty-two or older, you may be able to qualify for a reverse mortgage and never have to make a mortgage payment as long as you live in the home.  Let me tell you a little more about a reverse mortgage:

What Is A Reverse Mortgage?

A reverse mortgage uses the equity in your Nashua condo to make payments to you.  You aren’t required to make any payments for as long as you live in your home.  The loan doesn’t become due until you have not lived in the home for at least twelve months.  Your home can pass to your descendants if they refinance the loan themselves.  The money can be used for any purpose you want. 

Funds are received as a lump sum, a line of credit, or a monthly payment.  You’ll have access to more money with the line of credit, but the interest rate is variable.  If you decide on a lump sum or a monthly payment, you will have a higher interest rate.  The line of credit can be a credit card or like a checking account.  You can buy groceries, gas and pay your bills out of this account.  

The reverse mortgage process is similar to the conventional mortgage process.  The property will need an inspection and appraisal.  There are origination fees and closing costs associated with this type of loan.

Who Qualifies for a Reverse Mortgage?

The first requirement is age; only those sixty-two or older are able to qualify.  There are no income or credit requirements to be approved for a reverse mortgage.  Some lenders even let you roll the down payment and closing costs into the loan so that you don’t have pay any money up front.

The loan is based on the age of the youngest borrower.  The older you are, the more money you will qualify for.  The good news is that the money will not affect your Social Security benefits or Medicare, though it can affect Medicaid and Supplementary Security Income payments.
 
There are advantages and disadvantages to a reverse mortgage, so be sure to do your homework before making this important decision.

If you have questions about reverse mortgages, or would like to discuss buying or selling a Nashua condo, give me a call today at 603-821-1134 or email me at Dave@DaveHeeter.com.

Why Get Pre-approved for a Southern New Hampshire Home Loan?

There are a few things you can do to make the process of buying a new Southern New Hampshire home easier and faster.  Getting pre-approved for financing is one of them.  Here are four advantages of having a loan pre-approval:

REALTORS® Take You Seriously

When you walk into an agent’s office with pre-approved financing, the agent knows he is not wasting his time showing you homes. If you do not have pre-approved financing, be prepared for agents to ask a lot of questions and even possibly request that you get financing in hand. They are not trying to be invasive. They are avoiding "tire kickers" while helping you streamline the process.

Home Sellers Feel More Comfortable Dealing with You

When you have pre-approved financing, sellers are more apt to work with you on price or other needs in order to close the deal. They know that there are not going to be contingencies on a loan, or waiting and wondering if you qualify for the loan. They know they don't have to worry about turning other prospects away and then finding out you haven't been able to get a loan.

Fast Closings

Getting pre-approved for a loan means no waiting on the biggest of all hurdles before closing.  Other items needed to close on a Southern New Hampshire home purchase usually move quickly, but loan applications can drag out and require setting a closing date far into the future to allow for the time needed. 

Less Stress

Above all else, having your financing in hand before you even begin to look for the perfect Southern New Hampshire home makes the entire process less stressful for you. Knowing you have the money to back you up when you find the home of your dreams is much better than finding paradise and having to worry about getting financed and possibly losing it.

If you would like to find out more about pre-approved home loans, I can help. Contact me at 603-821-1134 or Dave@DaveHeeter.com.

Will Your Credit Stop You from Getting a Southern New Hampshire Real Estate Loan?

Good credit is more important than ever, if you want to get a Southern New Hampshire real estate loan.   Knowing what’s on your credit report and how lenders view various aspects of your report is crucial.

First Things First

Get a copy of your credit report from all three of the credit reporting companies: Equifax, Experian, and TransUnion. You are entitled to one free report every year from each of the three credit reporting companies.  Whether you’re considering getting a loan or not, you should always take advantage of that opportunity to make sure your credit reports are accurate.

Range

FICO® scores range from 365 to 840. While the standards for what lenders consider a “good” FICO® score changes constantly and varies by lender, here’s a general breakdown of today’s standards:

·    Over 750 is excellent and should get you the best terms and rates. 
·    Under 600 might get you a Southern New Hampshire real estate loan, but you’ll want to shop for the lender who’ll give you the best rates and terms.
·    Under 500, you need to brace yourself for waiting until you get your credit in better condition.

What Determines Your Score

There are many things that can affect your score.  Magically (or not), each of the three companies tend to view things just a little differently, which means your score will not be the exact same for all three. That’s why it's so important to get copies of your report from all of them. However, the two main things that all companies consider in rating your credit score are delinquencies and debt-to-income ratio.

What You Can Do To Immediately Improve Your Score

·    Check the entries: Make sure any debts or delinquencies listed are true. Report any errors.
·    Pay off debts: But do not close accounts. Having available credit is good as long as it doesn't look like you’re over-extended by having your credit maxed out. The lender may worry that you’re living off your credit and can't afford your bills.

If you would like more tips on how to improve your chances of getting a Southern New Hampshire real estate loan, I can help. Call me today at 603-821-1134 or email me at Dave@DaveHeeter.com for more information.

First Steps to Getting a Mortgage for Your Southern New Hampshire Real Estate

You’ve reached that time in your life where you’re ready to buy Southern New Hampshire real estate.  Even though the mortgage approval process can be intimidating, you can get yourself ready to apply for a loan.  These are the first steps to buying your home:

Make a List
First, make a list of your finances.  Include all your income, and factor in your normal monthly debts.  Miscellaneous bills, like your daily coffee or weekly magazine, should be listed too.  Write down everything that you spend each month.

Calculate what 28% of your income is.  Most loan officers recommend not spending more than 28% on your housing costs.  You may not want to take on a mortgage loan for the maximum amount offered without consulting your list to see what money is actually available for you to spend.

Decrease Your Debt
 Once you’ve have detailed your finances, it's time to make a budget.  A good budget can help you eliminate wasteful spending which will allow you to pay off more of your debts.  When planning your budget, don’t forget to include some personal money. 

Start with the small debts first.  Pick the credit card with the highest interest rate and smallest balance and work from there.  After one debt is paid off, use the extra money that you’re saving from the first card, and pay off the next.  This way, you should be able to pay your balances down quickly.

 It only takes a couple of months of good payment practices to begin to see your credit score go up. With a good credit score, you can get a better interest rate.  This will save you thousands of dollars in mortgage payments over the life of the loan.

Save For the Down Payment
You’re ready to start saving for the down payment on your Southern New Hampshire real estate.  It has to be paid up-front at the loan closing, but sometimes the seller will pay the closing costs.  (And don't forget...if you can find a property by the end of April 2010, you may qualify for the first time homebuyer tax credit of $8,000 or the second time homebuyer credit of $6,500.)

If you’d like more tips on how to buy or finance Southern New Hampshire real estate, browse through my blogs labeled "Buying Tips" and "Financing" and feel free to contact me with any questions by calling 603-821-1134 or emailing Dave@DaveHeeter.com.

Buyer’s Guide to Your Southern New Hampshire Home’s Appraisal Terms

If you're getting a mortgage on a home, your lender will require an appraisal. This is performed by a licensed appraiser who evaluates your home and determines its value. Here is a guide to your Southern New Hampshire home’s appraisal terms.

·       Age: The actual age of your home is how long since your home has been built. The effective age is the adjusted age of your home based on improvements and repairs.

·       Adjustments: Homes used for comparison are usually not exact replicas of your home. The appraiser will make adjustments for things like premium views or swimming pools to bring the home values closer together.

·       Appraisal: This is the estimated value of your home based on the appraiser’s documentation.

·       Comparison approach: A type of appraisal in which your home is compared with others in your area. Most appraisers use this approach because the market determines what your home will sell for.

·       Cost approach:  A type of appraisal in which your home is valued based on how much it would cost to replace it if it was destroyed. This is typically used on newer constructions.

·       Depreciation: Depreciation is a loss in value due to age or condition.

·       Easements: Your electric company or local government may have an easement, or right to use your land.

·       Encroachments: When you or your neighbors have items like fences resting on each other’s property, it is called encroachment.

·       Market value: This is the highest price you could expect to get for your home under normal circumstances.

·       Remaining economic life: This is the time from the appraisal when improvements become useless or valueless.

·       Subject property: Your property is called the subject property.

Let me help you through the process of buying your next Southern New Hampshire home. Call me today at 603-821-1134 or email me at Dave@DaveHeeter.com for more information.

How Much Mortgage Can You Really Afford for a Southern New Hampshire Home?

Owning a Southern New Hampshire home can be a sign of independence and success.  It allows you to build up equity and the mortgage interest and property taxes are tax-deductible.  Can you afford it, though? 

Reputable lenders look at a list of criteria to decide how much they’ll loan you.  This list includes:
·    Credit score
·    Existing assets including cash
·    Car leases or loans
·    Credit card balances
·    Debt consolidation loans
·    Home equity loans
·    Installment loans
·    Student loans
·    Other monthly debts
·    Size/source of your down payment

If you’d like to get an idea of what you can afford before talking to a lender, here are a few tools you can use to decide whether a Southern New Hampshire home is within your budget:

·    As a rule of thumb, your house hunting budget can be about 2.5 times your pre-tax annual income.  If you earn $50,000 a year, your budget for house hunting should be around $125,000.  The more money you have to put down and the less other debt you have, the higher your budget can be (up to about 4 times your annual income).

·    Your Housing Expense Ratio, which is principal, interest, taxes and insurance (PITI) shouldn’t be more than 25% to 28% of your pre-tax monthly income.

·    Your Debt-to-Income Ratio should be no more than 36% of your pre-tax monthly income.  This is the ratio between how much you owe and how much you earn.

·    Use an online calculator to figure how much home you can afford, or talk to a mortgage consultant.

“Qualifying for” and “can afford” can be two different things.  Shopping for a Southern New Hampshire home within your budget will save you a lot of heartache now and in the future.

If you'd like help determining how much mortgage you can really afford, I can help.  Call me at 603-821-1134 or email me at dave@daveheeter.com for more information.

Buying Southern New Hampshire Real Estate and the Good Faith Estimate

If you’re buying Southern New Hampshire real estate and talking to lenders, you’ll hear about the Good Faith Estimate. Because the Good Faith Estimate is required by law and lists all the costs associated with a mortgage, including closing fees with estimated pricing, it's a good place to start when searching for a lender.

Best practice for buying Southern New Hampshire real estate is to shop for lenders first. While you’re looking, ask for a Good Faith Estimate and then compare them. This will be your first indication about which lender is best for you.

Not All Estimates are Created Equal
Many closing fees for buying Southern New Hampshire real estate are considered typical and have an average price range, such as:

·    Title search and title insurance: $450 - $600
·    Appraisal: $150 - $400

Because real estate closing practices vary depending on where you live, your location helps to determine what those closing costs will be. However, you might also find some extra padding on your closing fees, which some in the mortgage and real estate industries call “junk fees."

Most Good Faith Estimates (GFEs) have a break down of individual charges, but some may just be a lump sum amount such as: “Total of lender’s fees $1,395.” As long as the fees add up correctly to the estimated amount, there’s no problem. However, watch out for and question general wording like “miscellaneous fees,” “packaging fees” or “marketing fees.”

You have the right to request an explanation for any fee listed on the GFE. Although most GFEs have an explanation after each listing, some may not. If a fee seems odd to you, ask about it.

It's Only an Estimate
One final tip:  The GFE is only an estimate, not the exact amount you'll be paying.  There are new regulations this year about which costs are allowed to change and by how much, so check out the 2010 HUD Booklet, which also has some general homebuying advice.  At least one day before closing, get your final tally of the closing costs from your lender.  Compare this to your Good Faith Estimate to make sure no additional fees were added.  If you see inconsistencies, talk with your lender immediately to resolve these issues.

Need help finding a good lender?  I can help.  Call me at 603-821-1134 or email me at dave@daveheeter.com for more information.

Will An Increase in Your ARM Mean Foreclosure for Your Southern New Hampshire Home?

With the current national and local foreclosure woes, and the strains of the economy these days, many people are worried about what they’ll do when their ARM (adjustable rate mortgage) resets.  Here are a few suggestions to help you weather the current financial storm:

What is an ARM?
ARM refers to a mortgage loan that has a variable interest rate.  The amount of the monthly payments will change several times over the life of the loan.  ARMs usually have a lower introductory interest rate than a fixed-rate mortgage.  After a period of time, the interest rate is recalculated in relation to current market rates, and though the amount it can increase is often limited by 'caps' on the number of percentage points it can increase in a given year, the adjustment frequently results in a higher interest rate and monthly payment.

Get Out Your Loan Paperwork
Many homeowners are worried about what will happen to their monthly payments when the ARM resets.  Foreclosure is a real worry.  The best way to avoid foreclosure in Southern New Hampshire is to know exactly what the terms of your loan agreement are.  Look for the date that the interest rate is set to change.  Find out what the cap is on each interest rate adjustment, and what the cap is for interest increases throughout the life of the loan.

After you have gathered that information, you can calculate what your ARM will reset to.  It’s best to know what the worst-case scenario payment could be when your ARM adjusts.  This information can help you determine if you are going to need help getting your loan payments manageable.  The next step is to make a detailed list of your current and future income and bills.  This will give you a better understanding of your financial status.

Call Your Mortgage Company
If, after you make this list, you can see that you are going to have trouble making up the difference in the monthly payments, call your mortgage company.  It’s best to call them before you miss a payment.  They may be able to renegotiate the terms of your loan for you.

If you're ready to sell your home, I can help. Call me at 603-821-1134 or email me at dave@daveheeter.com for more information.

Buying Southern New Hampshire Real Estate: Money, Mortgages and Closing Costs

Because buying Southern New Hampshire real estate is one of the most important and expensive purchases you’ll ever make, it's worth the time to consider ways you can save money.  Here are a few ideas on how to save money on your mortgage and closing costs:
  
Pay Attention
You have to pay attention to how much the Southern New Hampshire real estate costs. You have to pay attention to how much the house is worth and how much more you may have to put in the kitty for any repairs that will need to be done. Use these details to negotiate.
  
Negotiate with the Seller
Negotiating with the seller is expected.  You already know you can negotiate on the price of the home, but did you know you can also negotiate who pays the closing costs?  In this buyer's market, it has become common to ask the seller to pay some or all of the closing costs when you purchase a home. Be careful with your negotiations.  Many sellers will up the price of the home if you ask for them to pay closing costs.
  
Negotiate with your Lender
Negotiating with your lender has become the new norm.  In fact, depending on the lender’s Good Faith Estimate and your credit standing, negotiating for a better deal on your mortgage could save you thousands in the long run.
  
Examine the Good Faith Estimate
A Good Faith Estimate is the estimated settlement costs, or closing costs, your lender will expect you to pay. These can add up to as little as 3% and as much as 5% of the sales price. However, as the name implies, it is only an estimate, and prices are subject to change.  (There are new regulations this year about which costs are allowed to change and by how much, so check out the 2010 HUD Booklet, which also has some general homebuying advice.)
  
Carefully read your Good Faith Estimate. While some closing costs are usual, such as title insurance, others can be dropped by opting out of a service. Still others are “junk fees,” which you can negotiate for.
  
When buying Southern New Hampshire real estate, you always want the best deal you can get. The same should be said when picking a mortgage lender. Pay attention to the good faith estimate.  In fact, get one from several lenders and compare them. Don’t let the excitement of buying a home override your good business sense.
  
Consider Rolling Closing Costs into your Loan
Many new homeowners roll their closing costs into the loan. However, if there’s a way to pay them at closing, it might be better to do so. Paying them now saves you money because spreading them throughout the life of the loan means shelling out more interest.
  

If you’re looking for a great deal on an even better home, let me negotiate for you.  Call me at 603-821-1134 or email me at dave@daveheeter.com for more info.  

FHA Changes the Rules for Buying a Southern New Hampshire Home for Sale

The FHA, or Federal Housing Administration, has helped many a homeowner buy a Southern New Hampshire home for sale by providing mortgage insurance through FHA-approved lenders. However, a change in policy, announced in January, may make it harder for those with poor credit.
  
Before we talk about FHA's change in policy, let's cover a few of the basics about the FHA and how it might help you buy a Southern New Hampshire home for sale.
  
What is the FHA?
The FHA is a government agency that provides mortgage insurance to approved lending institutions.  It assists homebuyers by providing mortgage insurance to lenders to cover most losses that may occur when a borrower defaults.  This encourages lenders to make loans to borrowers who might otherwise not be able to get a loan.
  
What is an FHA Loan?
An FHA loan is a loan provided by an FHA-approved lender and insured by the FHA. In other words, the FHA guarantees that a lender won’t have to write off a loan if the borrower defaults – the FHA will pay. Because of this guarantee, lenders are willing to make mortgage loans.
  
An FHA loan might help you get a mortgage by providing:
·       Lower down payments
·       Lower closing costs
·       Easier credit qualifications
  
Now let's talk about the changes FHA is making…
  
The Future of FHA Loans
Until recently, the FHA has managed to weather the real estate turmoil rather well. In fact, the turbulence surrounding other lenders had potential homebuyers flocking to take advantage of FHA loans. However, even FHA's bank account is starting to suffer. In order to shore up capital reserves and keep 34 million families in their homes, the FHA is changing the rules.
  
Before the changes, borrowers were required to pay a down payment of 3.5% of the cost of the home. Now, borrowers with a credit rating below 580 will be required to pay at least a 10% down payment. As well, the good upfront mortgage insurance premiums of 1.75% are increasing to 2.25%. The FHA is now trying to get Congress' approval to raise the annual premiums from 0.55%, although the amount it will seek is still unknown.
  
What This Means for You
If you’re interested in buying a Southern New Hampshire home for sale, but haven’t because you’re waiting for the market to bottom out, you may end up losing out on a great deal. With almost record low mortgage rates, home values lower than they’ve been for eight years, the first-time and upgrade homebuyer tax credits and a wide selection of homes, there may never be a better time to buy.
  
Whether you want to use an FHA loan or a traditional loan, I can help you cash in on this great buyer's market. Call me today at 603-821-1134 or email me at dave@daveheeter.com.