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Can You Get an FHA Loan on That Sacramento Home?
Many homes in Sacramento can meet guidelines for buyers to get an FHA loan.
Whether you can get an FHA loan on that home in Sacramento depends partly on the financing terms offered in the listing. And that depends on whether the listing was completed correctly by the listing agent. Some agents use templates; they don’t always proofread the documents before obtaining signatures and uploading the information into MLS, so they make mistakes. They might say a home is for sale with FHA terms when it is not or they might eliminate that form of financing when they meant to include it.
On top of this, if you ask the Sacramento listing agent if you can get an FHA loan on that home, some of those agents will undoubtedly not know the answer. If you ask if the listing is correct, the listing agent also might not recall whether she listed it with or without FHA terms. So it can be pointless to ask the listing agent these questions, and you also take a chance that the listing agent might tell you no, absolutely no FHA financing, when that could be a false statement as well. See the dilemma?
For example, take a condo complex in which many of the units are not owner occupied. In other words, the rental units exceed the number of owner-occupied units. That percentage alone is often enough to make the complex not a viable situation for an FHA loan, but that is not always the case. There are some complexes in which a buyer can obtain an exemption and still purchase the home with FHA financing.
The person to ask about that is your mortgage lender. I also know a Wells Fargo loan officer who has recently cleared underwriting with an FHA loan on a condo complex that is mostly occupied by tenants. That complex is not on the FHA approved list, either, so you can’t rely on that list.
If it’s a home that is listed without FHA terms, a buyer might consider whether she is willing to bring the home up to FHA standards in order to write an FHA offer that the seller will accept. Perhaps the home was built prior to 1978 and has peeling paint on the eaves. A buyer can offer to paint the eaves to get an FHA loan, relieving the seller of the liability and hassle, and that offer might go through.
But the one thing you don’t do is write an offer with an FHA loan requirement for a home advertised without those terms by assuring the seller you will take care of any issues and then later refuse to comply. Make sure you know what you are getting into when you initially view the home. If your agent can’t explain FHA repair guidelines to you (some cannot), ask your mortgage lender for assistance. Video record the home, note defects, tally the expenses and be fully informed prior to making an offer.
Be ready for a weird thing to pop up in underwriting because it can happen. But if you want the home, that’s what you do. If you need help buying a home in Sacramento, call the Elizabeth Weintraub Team at 916.233.6759.
Messing With Credit Reports When Homebuying Creates Chaos
Sacramento homebuyers checking credit reports while in escrow can spell disaster.
Well meaning Sacramento home buyers have messed up their credit reports to such an extent that we are now working on our third extension to close escrow. It’s not really the buyers’ fault. They are just doing what they believe is the right thing to do because either they were not informed or the communication delivered was unclear. Most normal buyers, if given the choice to screw up closing or close on time would choose to close on time. Unless they didn’t know any better. And if they didn’t know any better, I ask you, who is to blame?
I say it’s not the buyer. It’s also not the Sacramento listing agent, in case you’re wondering, because listing agents do not communicate with the buyer in a non-dual agency situation. That’s the job of the buyer’s agent and the buyer’s lender.
How Altering Credit Reports Can Create Disaster
The other problem is home buyers do not understand credit reports. They don’t know that when they close an account, for example, they could be affecting their FICO score. The score will probably go down. If their FICO score decreases, it could increase the interest rate they will pay. If the interest rate changes, that necessitates a new closing disclosure under TRID guidelines, put into place by the government last October. TRID overhauled everything you thought you knew about mortgages. A new closing disclosure delays closing.
To be safe, borrowers should never attempt to fix or update their credit reports without first speaking to a credit professional. What makes sense to regular person could be completely wrong. Credit is not simple. A credit professional such as your mortgage lender should be a guiding light for your home loan and can advise a borrower how to fix credit reports prior to obtaining a preapproval letter.
But once a home buyer is in contract to buy a home, all activity on that credit report should cease and desist. That means do not put any new purchases on a credit card. Do not close accounts. Do not dispute credit errors. Do not open new credit accounts. In short, do not touch your credit report.
In case you wonder, what’s the big deal? So what if escrow is delayed? Let me add that the seller is not required to close escrow after the period expires. In addition, if your interest rate goes up, a 1/4 point bump on a $300,000 loan means you will pay an additional $15,685.20 over the term of the loan. The safest thing to do is do not even look at your credit reports while you are in escrow. Don’t click. Fingers off the touchpad.
Full Service for Sacramento Real Estate Clients Does Not Mean Everybody
Jackson, Tessa and Pica asleep on the desk of Realtor Elizabeth Weintraub
There are days I wonder how I ever find time to oversee my business and sell real estate, yet still manage to provide standard full service for our Sacramento real estate clients while juggling the chores of life. I just do it. Lately, it’s been a bit tricky because our diabetic cat, Pica, is struggling with sudden health issues. As a result, stoic Pica gets 3 antibiotic pills shot down his throat, a Pepcid, an anti-vomiting pill, Prozac, 2 Sam-E, and a 1/2 tablet of Prednisolone each day. This is in addition to his twice daily injections of insulin to treat his diabetes and his twice daily injections of fluids to prevent dehydration.
The fluids are administered by a long needle inserted under his skin and requires a lot of patience from the cat. On top of squirting full syringes filled with baby food down his throat because his appetite shut down, and trying different samples of wet cat food to entice him to eat. It’s a struggle. Before giving insulin now, we also have to test his blood sugar by stabbing his paw with a needle to draw blood. That’s a lot of medical attention, poking, prodding, for one cat to endure.
I almost feel like a full-time feline caretaker. You haven’t really lived until you’ve had to shove a thermometer up a cat’s butt. Speaking of sticking things up a butt, this reminds me of the supposed home buyers who call, demanding an immediate showing of a Sacramento home, when they aren’t planning to use us to write the offer because they have their own darned agent who is unavailable to show . . . and it is not our listing.
I tell you what. Why don’t you come over tonight and sort my recycled trash from organic? Oh, not your job description? OK, how about you wash my car? Maybe you would like to weed our gardens or lay fertilizer? That’s makes as much sense as expecting an agent offering full service for Sacramento real estate clients to do a job for which she is not your Realtor.
If you are our client, we move heaven and earth to accommodate you. Not our client; not our circus, not our monkey.
I stop whatever I’m doing when a client needs me and calls. Half dressed, I stop. In the middle of lunch, plate into the ‘frig. I answer the phone. My clients’ needs come first. My husband is used to this by now and nothing I do amazes him anymore. How I am able to offer full service for Sacramento real estate clients is because I work with clients who deserve the best. I don’t work with somebody else’s real estate client.
Although a buyer did call me a few days ago and asked us to write an offer for her. She had viewed the home with the listing agent but for some smart reason decided she deserved her own representation. We called that listing agent and we offered the agent a referral fee, because that’s the kind of Sacramento Realtors we are. We’re not out to steal anybody’s client. But first you have to be our client for us to offer full-service to you.
Our poor little Pica, the ocicat, gets the rest of my attention this week, well, aside from a couple of new listings. He is recovering and starting to pull through, which is excellent news. His temperature has been drastically reduced, and he’s starting to eat again. I don’t give up on him, and I most certainly do not give up on our clients.
How to Borrow Against Equity After Buying a Home
Some home buyers want to borrow against equity after closing for improvements.
Do not make the mistake of believing it is a slam dunk to borrow against home equity after buying a home or that obtaining a home equity loan will be the same as getting a mortgage to buy. Many home owners today are planning to make improvements right after closing. When sellers ask me if they should hang on to their home and improve it, or whether it makes more sense to buy a new home and fix up that home, well, everybody’s situation is unique.
For starters, many sellers who ask that question don’t really like their own home. There might be something about the location, configuration or style they don’t like, too. That can be resolved by buying a new home, even if that new home doesn’t meet all criteria and after closing, deciding to borrow against equity to fix it up. The question is why install a new HVAC, roof and siding at your old house when those costs will NOT be returned in whole upon resale? You don’t accumulate equity just because you have fixed a leaky pipe.
You may as well fix up your new home. At least you will be there a while to enjoy it. And while you’re making maintenance repairs, why not remodel the kitchen to your tastes or add a swimming pool? You can probably get a home equity line of credit if you borrow against your equity through a local credit union. The difficulty with this arrangement, though, is trying to obtain that line of credit immediately after closing.
A little known thing happens during escrow that most people have never considered. When your escrow closes, the existing loans owed against the property by the previous seller are not automatically lifted from the property. Escrow closes on a promise from the existing lenders that they will each issue a reconveyance after closing and record in the public records. And therein lies the difficulty.
A new homeowner cannot borrow against equity until those liens have been reconveyed. If the old lender(s) drag feet, it can take a month or more to remove those liens. The solution is to obtain a letter from the lenders stating the loan will be removed, but even that can absorb precious time to obtain. So it’s not instantaneous that many sellers can immediately get a home equity line of credit. Take that little quirk into consideration before beginning your home improvement projects after closing.
Tip: Before remodeling your home, check to make sure the previous loans recorded against your new home have been released. If you need help buying or selling a home in Sacramento, call top producer Elizabeth Weintraub at 916.233.6759.
Top 3 Tips for Buying a Home in the Sacramento Spring Market
Following Elizabeth Weintraub’s 3 tips are likely to lead to buying a home in Sacramento.
Before I talk about my tips for buying home in the Sacramento spring market, let me say that the Elizabeth Weintraub Team, our small band of rabble-rousers, are shaking up the real estate market in Sac Metro this spring. We ranked #2 for the month of March among all Lyon Realtors, and we have about 1,000 agents. We might have had the same type of production for February, now that I pause. February was so long ago, though . . .
Our Sacramento real estate market is moving fast and furiously. This means when a buyer finds a home to buy, he or she should make an offer. Among the many tips for buying a home that you can find online, probably the first tip you will read is for the buyer’s agent to call the listing agent and ask: how many offers do you have?
Top 3 Tips for Buying a Home in Sacramento This Spring
In this market, among the best tips for buying a home a home that I can provide is pay list price or better. I see buyers trying to negotiate like this is 1999 instead of 2016. I’m not sure if their agents have been sleeping under a rock or if the buyers themselves never watch the news nor read a newspaper. This spring real estate market is made up of no sellers, too many buyers.
The second tip is do not assume the listing agent will not receive an offer by the time your agent submits an offer. Just because there are no offers on the table at the time your buyer’s agent calls does not mean a half dozen might not show up between then, later and after your offer arrives. Don’t base your offer on the state of affairs at the time you write it. Base that offer on the future. Put your best offer out there because you might not get another chance.
There is no law that says a seller must counter all of the offers through a multiple-offer situation. Sellers are free to choose just the one offer that meets all needs. Some do that just that.
The final of my tips for buying a home in Sacramento this spring, you may want to pass on the cobweb agent and consider a professional buyer’s agent. All agents are not equal. Choose your buyer’s agent based on the type of lawyer you would want on your side if you had to go to court. If you wouldn’t want that agent representing you in court, don’t choose that type of agent to write your offer. Find an experienced agent who is busy in this spring market, and you’ll go into escrow.
Call Elizabeth Weintraub at 916.233.6759. We serve four counties.
