Preparing to Buy a Chicagoland Home: Seller-Paid Closing Costs

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Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI

Preparing to Buy a Chicagoland Home:

Seller-Paid Closing Costs
 

https://1609956119.secure-loancenter.com/FreeConsult.aspx     Looking out my office window right now, you'd never know that Spring ... and Spring's busier Chicagoland housing market isn't that far off.  Yet, it's true ...

     Chicagoland First-time Home Buyers (those typically purchasing homes from the low $100K's to the low-$200K's) and anyone else hoping to buy during this upcoming Spring's warmer-weather market, should be making their plans NOW, while winter snow is still on the ground and temperatures are frigid. 

     So, if you're a hopeful Chicagoland First-Time Home Buyer (or anyone seeking Mortgage financing) what should you be considering or educating yourself about right now ... at the beginning point in your process?

     First of all, find yourself a knowledgeable, experienced Mortgage Lender to work with.  Not sure how to do that?   

     Here's a few suggestions:  

     Inquire with Real Estate Agents that transact in Chicago or the Chicagoland area in which you hope to live.  Check with Real Estate Attorneys, your friends or family members that have Closed on a Mortgage loan recently. Talk to Insurance Agents or others that work in the local real estate industry.  Gather names and note those mentioned multiple times. 

     Don't skimp on the attention you give this matter.  Do your homework.  Find the right person for you.  (For more help and guidance, click HERE.)

     Once you've found your Mortgage Lender, have a long talk with them about your finances and your Credit.  Get Pre-Qualified to discover:
  •   What Home Buying options exist for you
  •   Your Credit Scores 
  •   Your Credit capabilities
  •   If elements of your Credit need polishing 
  •   The Price Range of home you can buy
  •   Establish a timeframe for your upcoming purchase
     
     One of the most important topics you'll talk about with your Mortgage Lender will be regarding a Down Payment on your home purchase.  At this time in the year, I often hear from Borrowers that Income Tax Refunds will be a contributing source to their Down Payment funds.  

     For Buyers hoping to utilize Income Tax Refunds during their home purchase (or Agents working with those Buyers), it's critical to make sure that Income Tax Returns are filed as early as all supporting documentation (W-2's, etc.) is received.  Tax Returns should be filed electronically, as this  expedites the depositing of Tax Refunds into Checking or Savings Accounts.

     It's important for Home Buyers to know:  Income Tax Refunds ARE acceptable to Lending Underwriters when saving/accumulating assets to buy a home.  Since most loan programs require Down Payment funds to come from the Buyer, it's important to demonstrate Down Payment funds as verifiable money in accounts.  (Accounts can be Savings, Checking, Money Market, Mutual Funds, Bonds, Stocks, and Retirement.)

http://www.genemundt.com/MortgageChecklist.aspx
      
Keep in mind that the:
  • Minimum Down Payment on FHA Loans is 3.5% 
  • FHA requires a 3.5% Down Payment, but ALL or PART of that Down Payment can be a Gift
  • Minimum Down Payment on most Conventional Loans is 5% 
  • At this time, it remains totally acceptable for Sellers to pay Closing Costs.  

     In the case of Sales Prices under $100,000, it's almost necessary to get Seller-paid Closing Costs due to new regulations in place as of January 10, 2014, per the Consumer Financial Protection Bureau (CFPB).  Certain Closing Costs ARE allowable when Seller-paid.  That simply allows your Mortgage Lender, to cover the cost of traditional fees incurred in a Real Estate purchase at Closing time. 

     I've included a breakdown of the guidelines (as of this writing) on the maximum allowable Closing Costs that a Seller can pay.  These Costs are expressed as a percentage (%) of the Sales Price ...

     For Conventional Loans:
  • Fannie Mae -  3% if Owner-Occupied  *
  • Freddie Mac - 3% (2.5%in some cases) if Owner-Occupied
  • Investment Property - 2%
    *  Can be greater, if Loan-To-Value is less than 90%
     
     For FHA:
  • Up to 6%
     For VA:
  • Up to 4% 
    
     Preparing to Buy a Chicagoland Home:Seller-Paid Closing Costs ...  As you can see, there's quite a list of things to talk over with your Mortgage Lender when you hope to buy a Chicagoland home.  It's normal to have lots of questions.  So, let's get started and get those questions answered.  Contact me now so together we can best prepare you to buy a home ...


http://www.genemundt.com/ContactUs.aspx

     *  Hoping to Buy, Refinance, or Build a Home in Chicago or the greater Chicagoland area?  Contact me!  I'll put my 36 years of Mortgage experience and expertise hard to work on your behalf.

     I can be easily found at:
Direct:  815.524.2280
Cell or Text:  708.921.6331
eFax:  815.524.2281
 
Click HERE for a FREE Mortgage Consultation!
Ready to Apply for your Mortgage?
 
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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656

 

Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 

 

Your Referrals & Testimonials are Always Greatly Appreciated! 

 

Email Me .. to be added to my Mortgage & Real Estate Newsletter

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Topic:
Lending / Financial
Location:
Illinois Will County
Groups:
Realtors®
Mortgages
Chicago Area Real Estate BUZZ!
1st Time Buyers
Bananatude
Tags:
mortgages
fha
down payments
va
1sttime home buyers
sellerpaid closing costs
chicagoland home buying
prequalifying for mortgage

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Ambassador
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Gene this is an excellent quick reference for Buyers.  You provided a lot of valuable information within this blog.

Jan 22, 2014 10:43 PM #1
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

One thing I've noticed here is that, if the buyers doesn't understand the different loan programs, they may select a loan officer with a company not authorized to participate in the state and county first time buyer program.  Sadly, the loan officers don't tell them, but take the loan app anyway and the buyer ends up discouraged and out of the market.

Reminds me of residental real estate agents taking a listing on a commercial property with no commercial experience.

Jan 22, 2014 10:43 PM #2
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Noah Seidenberg
Coldwell Banker - Evanston, IL
Chicagoland and Suburbs (800) 858-7917

Hi Gene all your information is so important to us here in Chicago Land. Your photo says it all. at least here next to Lake Michigan it's a sunny 5 degrees.

Your list of options and advice is so valuable and I thank you for providing it to us.

Jan 23, 2014 12:30 AM #3
Rainer
355,882
Tom White
Franklin Homes Realty LLC (615) 495-0752 or www.FranklinHomesRealty.com - Franklin, TN
Franklin Homes Realty LLC, Franklin TN

Gene, you did a great job outlining some options available to homebuyers in the Chicago area! If I was looking for an expert, you would be it.

Jan 23, 2014 02:25 AM #4
Rainmaker
2,471,948
Rebecca Gaujot, Realtor®
Vision Quest Realty - Lewisburg, WV
Lewisburg WV, the go to agent for all real estate

Gene, good information for homebuyers. I have some first-time buyers that wanted to see some homes, but were not pre approved.  They are talking with a lender.

Jan 23, 2014 07:16 AM #5
Rainmaker
1,214,476
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

George:  Thanks so much!  I always appreciate your comments and nod ...

Lenn:  I know what you're saying.  I'm always taken aback by these actions, as I wonder what .. or how .. they hope to assist a Buyer that does not have the means to buy without the assistance of the programs you mention.  To what end are they taking an application?

I hope the information proves beneficial to you and your clients, Noah ... definitely why I post it here on AR and elsewhere.  I hear we're supposed to warm up some in the next day or two.  Not soon enough for me!!

Tom:  You're always so kind ... thank you so much ...

Always a timely and good option to get them in front of a Lender, Rebecca.  For them ... and you, as the agent too.  Hope it turns out well for all ...

Gene

Jan 23, 2014 08:55 AM #6
Rainmaker
2,224,638
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

With this kind of preparation for getting folks ready to buy a home, the entire process has a much better chance of coming together, especially when they work with you.

Jan 23, 2014 06:02 PM #7
Rainmaker
1,214,476
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Appreciate your kind words, Joe ... and preparation, as you well know, is crucial ...

Gene

Jan 23, 2014 11:51 PM #8
Rainmaker
224,735
Kristal Wilson
Strategic Sales and Marketing - Chino Hills, CA
Cause We Like 'Em New ~ New Home Specialist!

Gene ~ allow me to first say we have been suffering through 80 degree temperatures here in Long Beach. ;-) Absolutely now is the time for buyers to begin preparing to purchase a home. Best way to win is to be prepared!

Jan 24, 2014 07:15 AM #9
Rainmaker
1,214,476
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Kristal:  I like how you use the word "suffering" ... the Chicagoland region is expecting sub-zero temps for the next few days again.  Share some of that 80 degrees with us!

And thanks so much for the comment.  I totally agree with you ... preparation helps immensely!

Gene

Jan 25, 2014 12:49 AM #10
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Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Gene, Great information. I reviewed the benefits with a buyer today of FHA vs. Conventional. He actually has many options and downpayment flexibility. It being a relo sale, help will come from the relo company.

Jan 25, 2014 07:12 AM #11
Rainmaker
1,214,476
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Love hearing that, Debbie .. exploring ALL the options is the best advice and guidance.  Have to admit, the fact that you do this doesn't surprise me!

Gene

Jan 25, 2014 08:43 AM #12
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Rainmaker
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Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

708.921.6331 - 40+ yrs experience
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