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“100% financing available through down payment assistance programs”

Troy Schuricht (Community First Financial) — Tue, 01 Apr 2008 18:07:28 -0500

"100% financing available through down payment assistance programs" - Troy Schuricht

SITUATION:

You would like to purchase a home but one or all of the following applies to your situation:

very limited money for a down payment
marginal credit history
high debt load

FEATURES:

The Federal Housing Administration (FHA) is a division of HUD, an agency of the US Government. The FHA insures lenders such as Fairfield Mortgage against your default on a mortgage, which enables you to obtain a loan at a great rate and with only a 3% down payment. The program is available for both first-timers and repeat homeowners alike.

BENEFITS:

An FHA loan enables you to buy a home with little money down and less than perfect credit at an interest rate that is typically only .25 - .50% more than prevailing conventional mortgage rates. This loan also allows your lender to "stretch" your qualifying ratios a little more than many other types of loans.

DETAILS:

Maximum loan amount in metro Phoenix is $346,250 for a one-unit property
Mortgage Insurance (MIP) is required as follows: (Up-front = 1.5% of the loan amount and can be financed into the loan + Monthly = .5% of loan amount divided by 12)
Primary residences only
No pre-payment penalty
15 and 30 year fixed-rate loans available as well as a 1-year and 3-year adjustable rate mortgage (1% yearly and 5% lifetime caps)
Seller is required to pay these closing costs for the buyer: underwriting, doc prep, and tax service fee
100% financing available through down payment assistance programs
Down payment can come from a gift from a relative, friend, or charitable organization
Targeted credit score of 600 or higher
Very limited late payments or other derogatory credit items allowed over previous 12 months
Targeted debt ratio of 41% and lower
Excellent program for co-signing situations (still only have to put 3% down)
FHA appraiser is required to do a scaled-down inspection of condition of property
Mortgage is qualifying-assumable

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

click to: Google Troy Schuricht!

Arizona Construction Loans

Troy Schuricht (Community First Financial) — Fri, 28 Mar 2008 13:19:43 -0500

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

click to: Google Troy Schuricht!

The Best Loan Options for the Construction of Your Home

Troy Schuricht (Community First Financial) — Mon, 11 Feb 2008 19:24:09 -0600

A C/P or Construction-to-Permanent, also called "One Time Close" is a type of construction loan that rolls directly into your permanent financing once your home has received its Certificate of Occupancy. Typically, the borrower qualifies for the loan to the guidelines of the permanent loan. The borrower can select whatever end loan program that a lender may have in their portfolio (ie. 30 year fix; 3/1, 5/1, 7/1 ARMs, Interest Only, 15 year fix, etc.). The construction period is the riskiest part of the loan. Thus, lenders will charge a little more in fees to administer the loan and a higher interest rate during this period. Once the home is complete, then what has been actually used from the construction loan will convert into the principal amount of the permanent financing. Lenders who offer a CTP program typically do so because they want your permanent loan. Once the home is built, the lender now has a secured asset for their loan.

A Construction Only loan is obviously a construction loan only for the purpose to build the home. Once the home has been completed, the borrower is responsible to find a permanent loan to payoff the construction loan. In today's market, the construction only loan is mostly used by builders who build a home with the purpose to sell and owner occupied borrowers who have credit challenges.

Why would someone want to use the "Construction-to-Permanent" loan?

One set of fees. With the C/P loan, the lender will charge only one set of fees for the loan.
No worries about pre-qualifying for a permanent. When you are approved for the construction loan, you have been approved for the permanent loan.
Competitive pricing. Those lenders in the C/P market want your business. Thus, the lenders are trying their best to make their programs competitive.

Why would someone want to use the "Construction Only" loan?

Planning to sell the home during or immediately following completion. These loans are designed to be reimbursed by either a mortgage from a buyer of the home or a refinance.
Experiencing credit challenges. Typically, borrowers who have a mid-FICO (credit) score of 620 or below will not qualify for a CTP loan and must look to the Construction Only products.
You want a specialized permanent loan. Sometimes lenders who offer C/P programs do not carry the type of permanent loan that you desire. If this is the case, the borrower may have to go to another lender for the specific loan program that they desire.

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

click to: Google Troy Schuricht!

How to Pick Your Construction Loan Officer

Troy Schuricht (Community First Financial) — Mon, 11 Feb 2008 19:16:05 -0600

How special are construction loans? In a report from Countrywide Home Loans, only 1 in 10 loan officers do more than 1 construction loan per year. So less than 10% do more than one loan per year, this makes finding a loan office that is experienced with construction loans very difficult. Like all advisor's associated with real estate, loan officers should be interviewed by potential clients. Here are a few questions that individuals seeking a construction loan should ask their future loan officer candidate:

1. How many CONSTRUCTION loans do you close PER MONTH? - Experience is everything.

2. Have you closed a loan in my neighborhood? - Knowing the local area can make or break a deal

3. Can you provide testimonials and references? - Word of mouth from someone else.

4. Do you have an on-line presence? - The Internet is a great tool for information.

5. Do you work for a Broker or Bank? If you choose to work with a loan officer at a Bank you could only have one option. Brokers on the other hand can have hundreds of options for you.

6. Are you a lead generation web site? Be-careful about on-line application for construction loans. - Most site are lead site not actual mortgage companies that specialize in construction loans. Your information is collected and SOLD.

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

click to: Google Troy Schuricht!

How much "Skin in the Game" do I need?

Troy Schuricht (Community First Financial) — Wed, 23 Jan 2008 21:22:43 -0600

Maricopa County, the largest county in Arizona and one of the largest county in the USA, had over 22,000 building permits issued in 2007. This estimate is provided to me by Construction Monitor, LLC. With in this 22,000 there were some quite large home built and many of them still being built. The ultra luxury home that is 10,000+ square feet can take 2 or more years.

Now here is a question that I received today; What is the largest construction loan I can do? My answer is pretty simple: there is no limit. If you want to build a $20 million mansion I can finance it. My question to you is do you have $10 million dollars to put down and can you document income enough to support such a payment. This illustration is a inflated to make a point, it is not the dollar amount that is in question, but how much money do you have to put in the project.

Simple rule in construction loans: the higher the loan amount the more money an individual needs to invest in the project.

I wish I could just write out a simple formula about how much money is needed, but because construction loans are so unique and have variables like lot equity, sweat equity (owner builders), cross collateralization and so on. It is very difficult to group everyone together.

If anyone ever has a client that needs some guidance, email (troy@cffinfo.com) me the answer to these questions and I can tell you what money they need invested into the project. In the construction industry we call this "skin in the game".

Do you own the lot?

If so, when did you buy?

What is the lot balance?

What is the lot value now?

What are the construction costs?

What is your completed appraised value?

What is your estimated credit score?

Can we fully document your income or do you need stated income loan?

With this information I can create a starting point as to loan type and capital required to close your construction loan.

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

click to: Google Troy Schuricht!

What is the largest construction loan available?

Troy Schuricht (Community First Financial) — Wed, 23 Jan 2008 21:17:59 -0600

Simple rule in construction loans: the higher the loan amount the more money an individual needs to invest in the project.

Do you own the lot?

If so, when did you buy?

What is the lot balance?

What is the lot value now?

What are the construction costs?

What is your completed appraised value?

What is your estimated credit score?

Can we fully document your income or do you need stated income loan?

With this information I can create a starting point as to loan type and capital required to close your construction loan.

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

click to: Google Troy Schuricht!

The Best Real Estate News in 2008 is...

Troy Schuricht (Community First Financial) — Tue, 15 Jan 2008 20:20:35 -0600

Interest Rates are at the lowest level we have all seen a long time. Purchases and Refinancing is about to become popular again.

Despite all of the recent well reported real estate related woes, I have great news for everybody. RATES ARE DOWN! And truth be told, rates are actually way down. Rates are currently better than anything we have seen in the last 3 years, and by the time you read this, they could be at an all time low for the last 10+ years!

The reason they are so good today is really difficult to pinpoint. There are really dozens of reasons, but my market advisors are saying that these low rates are influenced from the speculation that the Fed will continue to lower prime (which is a good guess).

Here are my rates on Jan 15^th. These rates assume that you qualify. Qualifying has never been easier; the streamline process has reduced the documentation and time to refinance.

30 year fixed 5.375%

15 year fixed 4.875%

5 year ARM 5.175%

5 year ARM 4.75%

Please give me a call (or email) to explore if this is a good time to refinance or purcahse. Aside from the many that will refinance during this rate spike, this is a fantastic time to purchase investment property.

Troy Schuricht
7575 E Redfield Rd Suite 235Scottsdale, AZ 85260
480-305-8905 - office
troy@cffinfo.com
http://www.communityfirstfinancial.com/
http://www.yourlendertroy.blogspot.com/
click to: Google Troy Schuricht!

Construction Loans ? Why and When to Use Them

Troy Schuricht (Community First Financial) — Tue, 15 Jan 2008 20:10:15 -0600

Why use a Construction Loan?
Building your dream home, though exciting, may present many challenges. Although you may be familiar with the traditional mortgage process, a construction loan includes additional elements of risk. In a typical construction project, the contractor will request funds when work is completed. Many times a homeowner will build their dream home without the use of financial institution funds. There are various ways to pay your contractor, many people feel they should pay cash, use a home equity line of credit from another property or cash out an investment.
This presents unique challenges for the homeowner. The homeowner must manage the additional responsibility of ensuring all subcontractors and suppliers are paid in a timely fashion. The homeowner must also understand the statutory documentation requirements in their state. If the draw process is not properly managed and the contractor does not pay the subcontractors and suppliers, the homeowner may be subject to mechanics liens. To mitigate your risk throughout the fund control process, consider the benefits of a construction loan and the process. The construction process is a complicated one and the construction draw process will ensure all subcontractors and suppliers are paid so that you don't have to pay the bill twice.
A construction loan is a check and balance of the funds that are dispersed throughout the build of a new home. With the help of the lender(s), inspectors and draw processing staff your funds are reasonable protected.

Understanding the Costs Involved
As you begin the process of building a new home, you'll want to understand the costs associated with your construction and permanent loans. You'll also need to know when the expenses occur so that you can prepare an accurate budget.
· You can begin construction with as little as a 10% down payment or 10% equity in the total cost to acquire your lot and build your new home. If you don't own your lot, the first draw of your construction loan may be used to pay off your lot. There are instances that a borrower will not be required to have any money down.
· The interest rate on your construction loan is typically tied to the Prime Rate. You will be billed monthly for interest only, and your payments will be based on the current balance of it at the current interest rate for the previous 30 days. Borrowers can build in an interest reserve account to pay the interest payment during construction.
· When you finish building your new home, we will modify your construction loan to a permanent loan of your choice. Various options for locking in your rate are available depending on the product selected.

Total Project Costs
This is the cost to complete the home and consists of soft costs, hard costs, land value, closing costs, contingency and interest reserves.
Soft costs: Permit fees, engineering fees, architectural fees and other costs associated with building the home but not directly a part of the actual construction costs. Many times the borrower has already paid some of these costs. To consider these paid items as "equity," the borrower must document the cost with a bill and a canceled check or a paid receipt.
Hard costs: The actual cost of construction covering all materials and labor associated with the building of the home. Typically the borrower will enter into a contract with a contractor to build the property. Like a purchase contract for an existing home, this contract will set forth the work to be done and the costs associated with that work. All contracts must be for a fixed price; "Cost Plus" contracts are not acceptable. To support this cost, we require a signed and dated copy of the contract along with a detailed Line Item Cost Breakdown prepared by the contractor. All contracts and budgets must be reviewed by, and contain terms acceptable, to standard lending guidelines.
Closing Costs: Costs associated with the closing of the loan (e.g., title costs, loan fees, discount fees, inspection fees, appraisals, etc.)
Contingency: In certain circumstances a reserve account will be needed to cover unforeseen cost overruns in the construction of the home. A required 5% of the hard costs will be established in the Contingency Account (Contractors may hold a reserve other than what usually required by the Lender.)
Interest Reserve: At loan closing, an account is established to pay the estimated interest costs during the construction of the home. Since the borrower is only charged interest on the amount of funds disbursed, an estimate of the average disbursed amount is made. Our construction specialists will estimate that, on average, 60% of the loan amount will be disbursed during the term of the construction period. This interest reserve account is paid up front and is held to pay the interest during the time of construction.

Troy Schuricht
7575 E Redfield Rd Suite 235Scottsdale, AZ 85260
480-305-8905 - office
troy@cffinfo.com
http://www.communityfirstfinancial.com/
http://www.yourlendertroy.blogspot.com/
click to: Google Troy Schuricht!

How do you avoid payments during construction of your home?

Troy Schuricht (Community First Financial) — Thu, 10 Jan 2008 12:41:50 -0600

Use an interest reserve account:

At loan closing, an account is established to pay the estimated interest costs during the construction of the home. Since the borrower is only charged interest on the amount of funds disbursed, an estimate of the average disbursed amount is made. Your construction loan specialists will estimate that, on average, 60% of the loan amount will be disbursed during the term of the construction period. This interest reserve account is paid up front and is held to pay the interest during the time of construction. The idea of this account is to help individuals so they do not have two housing payments during the course of construction.

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

click to: Google Troy Schuricht!

Why use a Construction Loan?

Troy Schuricht (Community First Financial) — Fri, 28 Dec 2007 14:18:49 -0600

Building your dream home, though exciting, presents many challenges. Although you may be familiar with the traditional mortgage process, a construction loan includes additional elements of risk. In a typical construction project, the contractor will request funds when work is completed.

Many times a homeowner will build their dream home without the use of financial institution funds. There are various ways to pay your contractor, many people feel they should pay cash, use a home equity line of credit from another property or cash out an investment.

This presents unique challenges for the homeowner. The homeowner must manage the additional responsibility of ensuring all subcontractors and suppliers are paid in a timely fashion. The homeowner must also understand the statutory documentation requirements in their state. If the draw process is not properly managed and the contractor does not pay the subcontractors and suppliers, the homeowner may be subject to mechanics liens. To mitigate your risk throughout the fund control process, consider the benefits of a construction loan and the process. The construction process is a complicated one and the construction draw process will ensure all subcontractors and suppliers are paid so that you don't have to pay the bill twice.

Construction loan is a check and balance of the funds that are dispersed throughout the build of a new home. With the help of a lenders, inspectors and draw processing staff your construction loan funds are reasonable protected.

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

click to: Google Troy Schuricht!

Log Home Construction Loans

Troy Schuricht (Community First Financial) — Fri, 28 Dec 2007 10:08:57 -0600

The all inclusive, one-time close, Log Home Construction Loan program will insure that building your log home is a simple and rewarding experience. The log construction loan program will work hand in hand with the Log Home Company of your choice. These programs are specifically designed to provide the funding necessary for your Log Home order to be placed and also for the delivery of your Log Home to your construction site. The one-time close feature of the log construction loan, combines three loans into one, encompassing your land purchase, (if necessary), your log home and construction costs, and your choice of permanent financing, with just one closing.

- Flexible, Up-Front Funding Options. Providing deposits, up-front, to your Log Home Company in order to insure your log order placement is secure. Funding options for the logs upon delivery are also available.
- Your permanent mortgage note can be in place before you ever break ground.
- 100% financing. No downpayment and low to no out of pocket closing cost programs.
- Owner/Builder programs and Stated Income Documentation programs.

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

click to: Google Troy Schuricht!

Construction Loan Interest Reserve Account

Troy Schuricht (Community First Financial) — Thu, 27 Dec 2007 20:52:06 -0600

Interest Reserve Account:

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

click to: Google Troy Schuricht!

Unstanding the Costs of a Construciton Loan

Troy Schuricht (Community First Financial) — Thu, 27 Dec 2007 20:46:21 -0600

Understanding the Costs Involved
· As you begin the process of building a new home, you'll want to understand the costs associated with your construction and permanent loans. You'll also need to know when the expenses occur so that you can prepare an accurate budget

· You can begin construction with as little as a 10% down payment or 10% equity in the total cost to acquire your lot and build your new home. If you don't own your lot, the first draw of your construction loan may be used to pay off your lot. There are instances that a borrower will not be required to have any money down.

· The interest rate on your construction loan is typically tied to the Prime Rate. You will be billed monthly for interest only, and your payments will be based on the current balance of your construction loan at the current interest rate for the previous 30 days. Borrowers can build in an interest reserve account to pay the interest payment during construction.

· When you finish building your new home, we will modify your construction loan to a permanent loan of your choice. Various options for locking in your rate are available depending on the product selected.

Total Project Costs

This is the cost to complete the home and consists of soft costs, hard costs, land value, closing costs, contingency and interest reserves.

Soft costs:Permit fees, engineering fees, architectural fees and other costs associated with building the home but not directly a part of the actual construction costs. Many times the borrower has already paid some of these costs. To consider these paid items as "equity," the borrower must document the cost with a bill and a canceled check or a paid receipt.

Hard costs:The actual cost of construction covering all materials and labor associated with the building of the home. Typically the borrower will enter into a contract with a contractor to build the property. Like a purchase contract for an existing home, this contract will set forth the work to be done and the costs associated with that work. All contracts must be for a fixed price; "Cost Plus" contracts are not acceptable. To support this cost, we require a signed and dated copy of the contract along with a detailed Line Item Cost Breakdown prepared by the contractor. All contracts and budgets must be reviewed by, and contain terms acceptable, to standard lending guidelines.

Closing Costs:Costs associated with the closing of the loan (e.g., title costs, loan fees, discount fees, inspection fees, appraisals, etc.)

Contingency:In certain circumstances a reserve account will be needed to cover unforeseen cost overruns in the construction of the home. A required 5% of the hard costs will be established in the Contingency Account (Contractors may hold a reserve other than what usually required by the Lender.)

Interest Reserve:At loan closing, an account is established to pay the estimated interest costs during the construction of the home. Since the borrower is only charged interest on the amount of funds disbursed, an estimate of the average disbursed amount is made. Our construction specialists will estimate that, on average, 60% of the loan amount will be disbursed during the term of the construction period. This interest reserve account is paid up front and is held to pay the interest during the time of construction.

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

click to: Google Troy Schuricht!

Benefits of a "Two Time Close" Construction Loan

Troy Schuricht (Community First Financial) — Thu, 27 Dec 2007 20:37:40 -0600

Two Time Close Benefits:

Underwriting guidelines are more forgiving (must show end loan approval in some cases)

Up to 24 months to complete construction

Wide variety of programs to choose from for the permanent mortgage

Flexible down payment options

Interest-only payments during construction, with a floating rate based on the prime rate plus a margin

Used to finance most SPECS

Usually higher LTV's allowed

Usually higher DTI's allowed

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

click to: Google Troy Schuricht!

"Two Time Close" Construction Loan

Troy Schuricht (Community First Financial) — Thu, 27 Dec 2007 20:32:23 -0600

The Two-Close allows for flexibility to make changes while you build. With the Two Time Close, you get construction financing up front and close on your permanent mortgage after the home is completed. Because the permanent loan amount is determined after construction, you can make changes and add enhancements throughout the building process. The term is 6 to 24 months and interest rate is determined by prime plus or minus a margin. The margin is determined by your risk, which is: credit scores, loan amount, equity in project and other factors.

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

click to: Google Troy Schuricht!

Benefits of a "One Time Close" Construction Loan

Troy Schuricht (Community First Financial) — Thu, 27 Dec 2007 20:04:28 -0600

One Time Close Construction Loan Benefits:

Finance the lot, home construction costs, closing costs and mortgage into one loan
"Build On Your Lot" financing - lot balance is paid off with first draw
Loan is based from the "appraised value", in some instances borrowers have a minimum contribution, this allows for low down payments
All permanent loan options: 30 year fixed rates, ARM's, Interest only, Option Arms
Financing for primary residence, second homes and investors
Stated income available
Saves time and Money
Streamlined qualifying process
Single set of closing costs
Up to 24 months to complete construction
Rate locked in at closing, with an option to "float down" to a new rate after construction if rates have improved (in some cases)
Low down payment requirements
Interest-only payments during construction

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

click to: Google Troy Schuricht!

"One Time Close" Construction Loan

Troy Schuricht (Community First Financial) — Thu, 27 Dec 2007 19:56:54 -0600

A One Time Close Construction Loan is a mortgage financing option for new home construction. This loan program combines financing for a lot purchase (or lot payoff), home construction costs and mortgage into "one loan".

There are two phases to this loan program: an "interest only" construction phase and a permanent mortgage phase; however, there is only oneclosing. The borrower pre-selects a construction term of either 6, to 24 months based on the amount of time needed to build the home. The Builder, or General Contractor, requests incremental draws or line item draws during the construction phase for payment of materials, supplies and labor. "Interest only" payments are due each month based on the outstanding drawn balance of the construction loan. Once the home is 100% complete, the borrower automatically converts the loan into the permanent mortgage; thus, no additional fees, re-qualification, or paperwork is required.

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

click to: Google Troy Schuricht!

Home Buying Tool Kit for Construction Loans

Troy Schuricht (Community First Financial) — Tue, 04 Dec 2007 19:09:17 -0600

The Home Buying Tool Kit -Construction Loans

The home buying tool kit is designed to describe the many steps that go into buying a home. Within each step we will identify the team and tools that will be helpful. In some cases we provide these tools for you, in many cases your team will have additional tools and resources.

Home Buying - Part 1

1. Build your TEAM

If there was one thing that will make a difference between a good experience/deal or a bad experience/deal...it is your team. Your team could consist of a Real Estate Agent, Mortgage Broker, Title/Escrow Agent, Insurance agent, Home Inspector, General Contractor, Real Estate Attorney, and the list can go on. We are going to start with the most important...and that is your Real Estate Agent and Mortgage Broker.

So how do you know the difference between a good team member and a bad one...we recommend the book Rich Dad's Real Estate Advantages...in chapter 5 it covers some of the questions to ask and what to look out for.

2. Your Exit STRATEGY (& Credit) = Loan Options

Most mortgage brokers focus on your credit as the key factor in placing you into a certain type of loan. While your credit is important...It is your intended exit of your property that will define your loan options. If you are looking to hold this property for the long term then you may be looking for a 30 year fixed loan that is paid off within the 30 years or sooner. If you intend to only keep this home a few years, then an interest only loan may make the most sense. Why, because it will keep your monthly payment low.

No matter what your exit is, there is a loan program for everyone. The problem, most people look for the 'best deal' instead of the loan program that is the 'best fit'.

3. FIND a Home

So here comes the step of going out and finding a home. One of the most important parts of this process is managing your emotions. Yes, the purchase of a home is an emotional decision...lets just be aware of that. To give you a different perspective though, it is important to understand the difference between a consumer and investor. Consumers make decisions based on emotions while an investor makes decisions solely by the numbers.

My recommendation is be both a consumer and an investor, get what you want (emotions) yet make sure it makes financial sense.

Home Buying - Part 2

4. CONTRACT

When in doubt, tie up the property by getting the property 'under contract' and just ensure that your escape clauses are in place. Earnest money...it is important to know 'how much' earnest you need to put down. Truth is, all that you need to put down is $1 to $100, whatever amount is required by your title/escrow company to open an escrow account. Real Estate Agents will tell you they like 1% or some other amount because it show that you are a 'serious' buyer. Point is...earnest money is negotiable. Everything is negotiable.

Quick Contract tips..if you want something, be specific. If you want an 'escape' be broad. Two examples, I want the Viking Refrigerator so in my contract I am going to add the serial number and photograph..or; This deal is subject to my partners approval. You may not want that Viking to be replaced by a GE (no offense GE) and for the other example I never said that my partner was my dog and the property didn't pass the sniff test.

Real Estate Agent...getting into serious contracts, use a Real Estate Attorney.

Tools - Your real estate agent will have a standard purchase agreement.

5. ANALYSIS of the Property

There are 2 areas of property analysis to consider: Property condition and property value.

Property Condition- Do you know if you are buying a dog? Do you want to buy a dog? (Believe it or not some people do as they love the concept of fixing a property up.) The point is do you know what needs to be 'fixed' or 'updated' on the home prior to purchasing.   A good home inspector will identify issues or problem areas throughout the entire home. If your home inspector does identify issues, then you will want to bring in specialists to quote the work and evaluate what it will take to handle the work.

Property Value - When buying a home there is one primary number that you want to be aware of...The Appraised Value of the property.   You will get this from an appraiser, but one tip...ask for (and review) a copy of the appraisal before you close.

6. LOAN Analysis

Below is a quick checklist of items that you will want to know concerning your loan. You will want to compare this information to your current financial situation and your exit strategy to ensure that this loan fits your needs. It is always recommended that you talk to at least 3 mortgage brokers about your deal, as every mortgage broker may have access to a different loan program.

Here is the hit list of what should be included in a Good Faith Estimate:
    -Interest Rate
    -Monthly Payments
    -Taxes and Insurance
    -Loan Amount
    -Pre-payment Penalties
    -Fixed or Variable Rate
    -Term (Length)
    -Amount of money needed to close (your check to bring to closing)

Home Buying - Part 3

7. CLOSE on the property

Closing takes place at a title/escrow company. As we discussed in step 6 - Loan Analysis, you will need to know how much money to bring to the closing table.

There are a lot of documents, take the time to make sure you know what you are signing. If you don't know what a document is for, ask the title agent for clarity. While all of the documents are important, the HUD 1 is very important to review. This outlines who (seller, buyer) pays what and who (mortgage broker, Real Estate Agent, Title, etc.) gets paid what.

Take a friend, spouse, therapist, family member to closing with you. Remember this can be a very emotional experience, so if you need to have some 'support' with you, take it.

8. Execute your EXIT

Now that you have closed and own the property it is time to execute your exit. Is your plan to hold the house for a few years and then sell it? If so, you will want to talk to your CPA to discuss when to sell. Owning the property for 1 year and a day could be the difference between paying 30ish% tax (taxed as ordinary income) or using a 1031 exchange to roll the profit into another property, tax deferred. If you own and have lived (occupied) in the property for 2 out of the last five years, you could take the profits with no tax hit. 1 day could be the difference between thousands of dollars that you may need to pay in tax.

Maybe your plan is to accelerate your loan pay down? Your mortgage broker should have tools to help you take what is normally a 30 year payoff to a 10 or 11 year payoff by using a combination of increased monthly payments and utilizing a HELOC (home Equity line of Credit).

9. EXPAND - What's Next

No matter where you are starting from, there are tremendous opportunities in real estate to create and make money...even in an up and down market. It often starts with your first home, and then you build from there.

So what resources are available to you get the education and find the right team members...

1. Join a real Estate Investors Club
2. Attend seminars in your area - you can find these in your local newspaper.
3. Attend the Community First Financial monthly book club

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

How to Start the Construction Loan Process

Troy Schuricht (Community First Financial) — Wed, 21 Nov 2007 16:34:37 -0600

The options for construction lending have never been better. Construction loans now offer lot financing and construction financing all in one. Years ago the process often required the borrower to first get a lot loan, then a construction loan, and then get a permanent loan when the building process was over.

We here at Community First Financial, LLC have never been fully satisfied with that process, over the years we have developed a process and a loan that is more builder-friendly and a process that makes the customer feel comfortable.

We now have a Construction Loan program that allows the borrower to close on their loan ONLY ONE TIME, and then just modify their construction loan into permanent financing if they choose after construction. (We still offer regular construction-perm financing as well.)

There are no less than 5 different rate scenarios available, from Prime + to Adjustable Rates, to fixed rates right from the start.

Of course, getting pre-approved is the key to this whole scenario. To have the virtual buying power of cash, you must be educated about the loan process, and be pre-approved for your qualifying loan amount, before you ever budget for a home.

This loan requires the builder to be approved and meet some underwriting standards for pre-qualification, this is a process I make very easy for both builder and borrower.

For more critical information about getting pre-approved for a One-Time Construction Loan, you can do three things:

1. Go to http://www.communityfirstfinancial.com/ to fill out our secured construction loan application form, or email troy@cffinfo.com to receive our construction loan questionnaire.

2. Call us at 480-305-8905 and speak directly to a Construction Loan Specialist who can walk you through the entire process and help you to understand the construction process.

We know that educating you is the best way to serve you, and we are honored to have the opportunity to assist you when you are building your home. Please do not hesitate to use our educational tools to understand the construction process

Modifying a Construction Loan to a Permanent Mortgage

Troy Schuricht (Community First Financial) — Wed, 14 Nov 2007 20:18:35 -0600

Permanent Mortgage

Once the construction on your new home is nearly completed, you can conveniently convert your Construction-to-Permanent Loan to a permanent 30- or 15-year mortgage. Our Roll-to-Permanent Loan Officer will contact you when your project is 70% complete to begin the conversion process and get you in your dream home sooner, without the hassle of multiple loans.

Congratulations! Your new home is now complete and it's time to plan your housewarming party.

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

Construction Loan Disbursement

Troy Schuricht (Community First Financial) — Wed, 14 Nov 2007 20:15:55 -0600

Disbursement

Unlike an existing home loan, your construction funds are disbursed during the construction phase as the construction of your new home progresses. These payments are called draws or disbursements. Lenders will disburse construction funds based on the amount of work that as been completed on your project.

If, for example, your construction budget is $100,000 and your project is 10% completed (as indicated by a third-party inspector), you will be eligible for a disbursement of $10,000 for that portion of the project.

By having a reimbursement loan, you can ensure your disbursed funds are closely aligned to the progress of the construction.

It is important to know that your Construction-to-Permanent loan is a reimbursement loan

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

Construction Loan Closing

Troy Schuricht (Community First Financial) — Wed, 14 Nov 2007 20:13:05 -0600

Loan Closing

The initial closing includes the payoff of the lot or existing mortgage (if applicable) and related closing costs, less your down payment. Any additional costs will be paid by you at closing. You must have an adequate down payment (equity) at the closing. Equity is defined as cash paid towards the lot, pre-paid construction expenses and cash paid at closing, if required.

Want to use the equity in your current home towards the closing of your construction loan? Ask about a bridge loan or home equity line of credit.

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

Construction Loan Processing

Troy Schuricht (Community First Financial) — Wed, 14 Nov 2007 20:10:37 -0600

Loan Processing

Upon receiving your loan application and all necessary documentation, your Construction Loan Specialist and Processor will verify the information you have submitted. They will also track the receipt of your appraisal along with any other required documentation from other parties involved in your transaction, such as escrow and title companies.

After your loan is submitted to underwriting and approved, your Construction Loan Specialist will call you to select a construction loan program and lock in your construction loan rate.

The key to construction loan processing is a team that has experience in processing construction loans.

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax

Construction Appraisal

Troy Schuricht (Community First Financial) — Wed, 14 Nov 2007 20:07:19 -0600

Appraisal

Once your plans and specifications have been finalized, I will order your appraisal for you. You can then schedule your appointment with the appraiser who will need your plans to determine the value of your home. On loans more than one million dollars require a second appraisal. This second appraisal is done by an appraiser that is indepentant of the first appraisal.

The appraised value is based on the home after the construction is complete.

Troy Schuricht

7575 E Redfield Rd Suite 235

Scottsdale, AZ 85260

480-305-8905 - office

480-393-8801 - fax