As a raucous send off to 2014, this month I am going to tell you something specifically geared for YOU, no matter who you are. For the first time ever I actually collaborated with someone on this article (Angela Erves, Land Home Financial).
But before I get to that, I need to tell you about something really cool that my company (Better Homes & Gardens) just rolled out, literally* this morning.
The groundbreaking news is they have launched a bigger and better search engine that can eventually squash the daylights out of some other searches (I’m not going to name names, so I will just call them Tillow and Zulia.) I personally tested it this morning, and I can tell you it has some really innovative features. What sets it apart is that it doesn’t just do zip code/town searches (standard) and you don’t only search by property/house sizes and price (yawn), but you can actually search through additional lifestyle features like schools, parks, and public transit. (I guess they ignored my suggestion of walking distance to bars.) I especially like the fact that you can use a commute-tool to search houses and sort them by travel time at a certain time of day. For example, you can say “houses in Berkeley within 15 minutes by car from the Rockridge BART station at 8:30 am.” All of the items in purple you can change to fit your own personal search locations, times, and mode of transportation.
Test drive this thing yourself by going to BHGRE.com. It has a lot of potential, and although they still need to refine some things, the additional search features outweighs its present unwieldiness in certain areas (notably specific address and neighborhood searches). Once they dial that down, this search engine will be a really terrific tool for you to use. On the site they proudly display the slogan “The Friendliest Search In Real Estate”, by which I can only assume the consumer testing small group results must have rejected other options such as, “The Most Standoffish Search In Real Estate.”
Now on to your 2014 Grand Finale from me: Incredible information. As mind boggling as it seems, the lending environment has completely changed from a year ago when even Bill Gates could not get a home loan to save his life.
Remember back in my April Rumor Mill when I told you:
“They are going to make it easier to borrow. They have to. The people with the 740 credit scores have already bought, and the people happy in their houses have already refi’d. For banks to get back their big quarterly profit reports from mortgage lending, they are going to have to find creative ways to let more little people buy again.”
Well they have gotten creative and it is here. Find your area of interest below and read a small snap shot of what is available to you. Of course my lawyer Eric would like me to include the caveat that everything in the world is subject to individual approval, every situation is different, consult an attorney, a financial advisor, your mother-in-law, a magic 8 ball, yadda yadda yadda, wear a helmet, and don’t blame me.
This one is a BIGGIE — Self-Employed Borrowers Breakthrough: Anyone self employed can tell you it’s been absolutely impossible to get a loan to buy a house. Impossible. The fundamental problem is that if you maximize deductions and have a good CPA, at the end of the year your income shows at about 37 cents, right? Well check this out: Self-employed can now qualify their income using just bank statements from the previous 12 months for loan amounts up to $2m. It means that no tax returns need to be provided, and you can borrow based on what you really make. Minimum credit score is 680, and you can do it as a refi as well and get up to $350,000 cash out. This one is a really big deal.
Poor Struggling First Time Homebuyer: In Contra Costa and Alameda counties as long as you make under $101,775 a year, your credit score is minimum 640, and the house you want to buy ends up under $417,000, the world is your oyster. California HFA will give you a grant (you don’t have to pay back!), Land Home Financial has 97% loan programs, and with Seller credits combined you can actually buy a house for like…and this is not a made-up number… $1000 down. I am not missing any zeros. I said one thousand dollars down. Is this ridiculous? Maybe, but it is real. This is miraculous for those who can afford the mortgage payment but haven’t been able to save up the tens of thousands of dollars needed for a down payment just a short time ago. They want the little people to own houses again, and they are putting their money where their mouth is. Hurry up and buy one before they come to their senses.
Well Off Up To $1m Buyer: With an 80/10/10 program, the bottom line is you need to have 10% down and you can buy a house. And guess what? No mortgage insurance.
Super Duper Well Off Over $1m Buyer: Generally speaking, they want you to put 20% down up to a $2m loan, 25% down up to $3m loan. This loan also has no mortgage insurance, and you can actually do a 40 year loan (ARM) with the first 10 years interest-only. Rates for this loan are in the mid-3’s right now, and gift funds from a relative are allowed to make this happen.
Investor Buyer Thinking Of Getting A Rental Property And Living The HDTV Dream: Generally speaking you will need at least 20% down (up to $417k) and 25% down for properties over that. However there is also a loan that qualifies just based on the cash flow of the property where you don’t need to show your own personal income at all.
Final Note — Duplex, or in-law unit you can rent: The lender will actually take about 75% of the rents and increase your net income by that amount. Simplified example: You make $4000 a month, and the house you want to buy has a separate unit that you can rent for $1000 a month. Now the bank will say your income is $4750 a month. This can really help you buy a property that you would otherwise not be able to afford.
Here’s the deal people, I could have sent you a card or some chocolate. But for your gift I gave you what you really want: A house. Hurry up and call me, I look forward to it!
p.s. Angela Erves, Land Home Financial, will evaluate your actual situation as well as do credit repair for free. Call her directly at 510-812-2109
* As a matter of interest, the word “literally” has been so misused when actually the person meant “figuratively” ( e.g. “I am literally starving to death right now!” “I was so tired I literally could not get out of bed!” ) that the definition of literally has now, literally, been amended to include the word figuratively. True story. Merriam-Webster had recently added a second usage of the word “literally” to mean the same as “virtually,” but as hyperbole for emphasis. The Oxford English Dictionary has also included the informal definition, “used for emphasis while not being literally true,” since 2011. If you are still reading to this point you are literally avoiding doing something at work, so I am linking this article on the subject so that you can figuratively make your boss explode if they catch you.