Monday, December 29, 2008


A home inspection is an objective visual examination of the physical structure and systems of a home, from the roof to the foundation. Having a home inspected is like giving it a physical checkup. If problems or symptoms are found, the inspector may recommend further evaluation.

WHAT DOES IT INCLUDE?The standard home inspector's report will review the condition of the home's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems; the roof, attic, and visible insulation; walls, ceilings, floors, windows, and doors; the foundation, basement, and visible structure.

The purchase of a home is probably the largest single investment you will ever make. You should learn as much as you can about the condition of the property and the need for any major repairs before you buy so that you can minimize unpleasant surprises and difficulties afterward. Of course, a home inspection also points out the positive aspects of a home, as well as the maintenance that will be necessary to keep it in good shape. After the inspection, you will have a much clearer understanding of the property you are about to purchase. If you are already a homeowner, a home inspection may be used to identify problems in the making and to learn preventive measures which might avoid costly future repairs. If you are planning to sell your home, you may wish to have an inspection prior to placing your home on the market. This will give you a better understanding of conditions which may be discovered by the buyer's inspector, and an opportunity to make repairs that will put the house in better selling condition.

WHAT WILL IT COST?The inspection fee for a typical one-family house varies geographically, as does the cost of housing. Similarly, within a given area, the inspection fee may vary depending upon the size of the house, particular features of the house, its age, and possible additional services, such as septic, well, or radon testing. It is a good idea to check local prices on your own. However, do not let cost be a factor in deciding whether or not to have a home inspection, or in the selection of your home inspector. The knowledge gained from an inspection is well worth the cost, and the lowest-priced inspector is not necessarily a bargain. The inspector's qualifications, including his experience, training, and professional affiliations, should be the most important consideration

CAN'T I DO IT MYSELF?Even the most experienced homeowner lacks the knowledge and expertise of a professional home inspector who has inspected hundreds, perhaps thousands, of homes in his or her career. An inspector is familiar with the many elements of home construction, their proper installation, and maintenance. He or she understands how the home's systems and components are intended to function together, as well as how and why they fail.
Above all, most buyers find it very difficult to remain completely objective and unemotional about the house they really want, and this may affect their judgment. For the most accurate information, it is best to obtain an impartial third-party opinion by an expert in the field of home inspection.

CAN A HOUSE FAIL INSPECTION?No. A professional home inspection is an examination of the current condition of your prospective home. It is not an appraisal, which determines market value, or a municipal inspection, which verifies local code compliance. A home inspector, therefore, will not pass or fail a house, but rather describe its physical condition and indicate what may need repair or replacement.

A home inspector is typically contacted right after the contract or purchase agreement has been signed, and is often available within a few days. However, before you sign, be sure that there is an inspection clause in the contract, making your purchase obligation contingent upon the findings of a professional home inspection. This clause should specify the terms to which both the buyer and seller are obligated.

It is not necessary for you to be present for the inspection, but it is recommended. You will be able to observe the inspector and ask questions directly, as you learn about the condition of the home, how its systems work, and how to maintain it. You will also find the written report easier to understand if you've seen the property first-hand through the inspector's eyes.

No house is perfect. If the inspector identifies problems, it doesn't necessarily mean you shouldn't buy the house, only that you will know in advance what to expect. A seller may adjust the purchase price or contract terms if major problems are found. If your budget is tight, or if you don't wish to become involved in future repair work, this information will be extremely important to you.

IF THE HOUSE PROVES TO BE IN GOOD CONDITION, DID I REALLY NEED AN INSPECTION?Definitely। Now you can complete your home purchase with your eyes open as to the condition of the property and all its equipment and systems. You will also have learned many things about your new home from the inspector's written report and will want to keep that information for future reference.

Friday, September 19, 2008

10 Questions You Should Ask Your Lender.

1.What Types Of Mortgages Does Your Lender Offer?
Most mortgage companies offer a wide array of loan options to fit various situations. Tow most common loan types are fixed-rate and adjustable-rate mortgages (ARMs).

A fixed-rate mortgages interest rate and principal payment remain constant for the life of the loan. Since the interest never changes during the life of the loan, the borrower can always budget for a mortgage payment. (Keep in mind that Insurance and Taxes are adjustable annually if the borrower is escrow they may see slight adjustment in their mortgage payments due to these annual adjustments). A fixed- rate mortgage is the best option especially if the borrower is planning to stay in the home for a while (5 years or more).

With the ARMs, the interest rate and your payments are adjusted upon down periodically as the market index changes. The rate usually is adjusted between three months and five years. ARMs are usually protected by caps that limit how much the interest rate adjusted up the first time, and each successive time or overall. This option is good in you are getting a mortgage at a time when the rate is high or if you are planning to sell before the first adjustment period.

2.What Is the Interest and Annual Percentage Rate (APR)?The interest rate used to calculate your total cost over the life of the loan and the amount of your monthly payment. (The higher your interest rate the more your monthly payment will be). The APR is derived by calculation that includes the interest rate and all the other related lender fees divided by the loan term.

3. What Are the Discount Points and Origination fees?Each point equals 1% of the loan amount. Therefore 1 point on a $200,000 loan cost $ 2,000. Points are a way to buy down the interest rate. The more points you pay the lower your interest rate. Landers may have some restrictions on points buy down. Points are tax deductible, no matter who pays for them. The longer you plan to stay in the home the more it worth it to pay for discount points.

4. What Are The Closing Costs?
Closing costs are fees included in your loan, usually, include charges for credit reports deed search and more. Your lender is required by law to provide a good faith estimate of your loan’s closing costs within three days of receiving your application. Your mortgage consultant should explain the purpose of all the fees Your Real Estate Professional should try to have the seller pay some of these closing costs on your behalf.

5. What Are Rate Locks and When Can You Take Advantage Of Them?Interest rates fluctuate daily. Think about locking in the interest rate if interest rates are rising. Licking in interest rate is usually good for 30 to 45 days while you search for the right home. Lock in the interest rate on the application, not an approval. So if the rate goes up between the time you applied and the time you are approved you will not have to pay the higher rate.

6. What Is The Minimum Required Down Payment?The down payment determines the loan’s rate and term. The minimum down payment is the lowest amount of money you can put down on your home; this is expressed as a percentage of the property’s value. Required down payment usually range from 3%-20%. A 3% down payment requires 97% financing, with a 5% down payment 95% will be financed. The larger the down the lower the principal and monthly payments. Larger down payment usually enables you to obtain a lower interest rate. Down payment, less than 20% requires you to have mortgage insurance (PMI).

7. Is There A Prepayment Penalty?Sometimes if you pay off your mortgage early you could be charged a prepayment penalty. The penalties usually are as much as 3% of the loan balance or the equivalent of six month’s interest. Often, prepayment penalties decline or disappear over time. Sometimes you may be able to secure a better interest rate if you agree to a prepayment loan. You may want to think twice before you agree to a loan with a prepayment penalty. Most borrowers do not stay in the home for the life of the loan. They usually refinance or sell the home.

8. How Long Will It Take To Close My Loan?Closing time may vary from about 2-6 weeks, depending on how long it takes to assess your documentation and check your credit. Try to submit your application far enough in advance to ensure funding for your loan. Talk to your real estate agent about allow the maximum time (6 weeks) for closing when you find the home you want to purchase. This will give your loan processor more time to work on your loan. If the loan processor is done before the maximum time, ask your agent to request a change of closing date so you can close earlier.

9. What Might Delay My Loan Application?Avoid potential delays by making sure your application is complete, correct and legible. Provide all the supporting documentation needed so; your loan processor will have all the necessary information to proceed with the processing of your loan.

10. What Are The Documentations Do I Need?Some of the documentation that you need is your name and contact information of your current employer, proof of income, social security number, bank statements, and any assets you have. You loan officer should provide you with a checklist of all the documentation you will need for the loan to be processed.

Finance Tools!

visit: ATLANTA HOMES FOR SALE for all your Georgia real estate needs.

Friday, August 1, 2008

How Does Short Sales Work

The short sale is simple in theory. You owe more than the home is worth or you can no longer pay the mortgage payments so in order to sell without bringing money to the table yourself you must convince the bank that you have a financial hardship and cannot make the payments. The bank may then agree to take a lower payoff than the total loan amount. Example: if you owe $350,000 but can only sell for $300,000 then the bank will be "forgiving" $50,000 in debt. But, at least you've sold the home and avoided foreclosure. In practice, the short sale usually isn't that simple. There is a lot of work that needs to be done. A short sale package must be put together to show bank hardship, inability to pay, the homes value, repairs, net to the bank after sale etc. It will be the bank's decision whether or not to accept or reject an offer. The bank will have the final say over any offer you accept because the offer will be less than your loan payoff. Banks can take their time with a decision but I think that many banks will be speeding up the process as time goes on and they get their loss mitigation departments up to speed. If you are able to make your mortgage payments you probably should. However, the bank will usually not consider a short sale as an option until you've already missed a couple payments. But, those missed payments will show up as late payments on your credit report so, the fewer there are the better. Before putting your house on the market have your agent check what other properties are SELLING for in your area (In other words make sure your agent do a Market analysis for your area). Not what they are "on the market" for but selling for. Start there and lower your price quickly until you get an offer. Remember you are under a time constraint if you want to avoid foreclosure. The key thing is to get an offer. Once you have one you'll at least have something to work with even if it is low. Keep in mind that a short sale will have less of a negative impact than a foreclosure will on your credit. The consensus is that a short sale will cost you around 100 points on your credit score while a foreclosure will cost you 200-280 points and stay on your credit report much longer. So, pursue the short sale aggressively to avoid a foreclosure. Another thing you should be aware of are the tax consequences. You may end up owing taxes on the amount of debt that is forgiven. There are ways you may be able to avoid the tax. If you can show you were insolvent at the time of the sale then the IRS may exclude the debt forgiveness from taxation. Take a look at section 108 of the IRS Code and form 982. You might want to consult with an attorney or accountant that is familiar with the process because it could end up saving you on your taxes.

How to Write a Short Sale Hardship Letter
The Hardship Letter is part of the short sale package and is written by the seller or their representative. It is used to explain to the lender the reasons for the borrower's need for a short sale. Reasons such as divorce, job loss, medical issues, etc. can and should be included. Usually just a one page letter with the pertinent information will suffice.

A simple letter in the following form should suffice:

DateLender NameAddressLoan NumberDear Sir/Mama,{In this section explain your hardship and why you must utilize a short sale - some example hardship reasons are listed below}

  • Unemployment
  • Reduced Income
  • Divorce
  • Medical Bills
  • Too Much Debt
  • Death of my Spouse
  • Death of a family member
  • Payment Increase
  • Business Failure
  • Job Relocation
  • Illness
  • Damage to Property
  • Military Service
  • Other (Please Specify)
Borrower’s SignatureDateCo-Borrower’s SignatureDate

Please contact CENTURY 21 ATLANTA GA Real Estate agent for more details.