Archives for July 2014

Signs That the St. Louis Housing Market Is On the Rise

July 23, 2014 By Sean Zalmanoff

The National Association of Realtors revealed that there was an influx of new homes entering the market.

This is great news for buyers who had been experiencing limited choices in new homes since this past January. Although still down 5.2 percent from the same period last year, pending home sales showed a jump of 6.1 percent. The onset of warmer weather has finally put St. Louis homeowners back to the business of selling their properties. This trend is being noted not only in St. Louis, but all across the nation.

An Ideal Sellers Market

Thanks to a lagging market in the earlier part of the year, a shortage of houses on the market made for an ideal sellers market for St. Louis residents. House hunters are reporting that homes are being bought in only a few days. With multiple offers being made and actual bidding contests taking place for ownership, some have resorted to offering cash as an incentive in order to entice the seller to choose them.

This is not making things easy for a house hunter and it is being suggested that in order to make themselves just as appealing to a seller they should be getting pre-approved for a mortgage. This is a sign to the seller that your offer is serious and that it won’t fall through later for lack of funding.

Pre-Approval Before House Hunting

Most home buyers do not realize that they have this option. Having your TBD Approval in hand before the hunt not only makes you more attractive to a seller who is getting multiple offers, it saves you the time and heartache of looking at homes that are not in your budget.

How Lenders Qualify Borrowers

Traditionally, more value was placed on the value of a home than on the borrower’s ability to pay the monthly mortgage premiums. Recent economic events have taught lenders to look harder at the borrower then on the assets of the home. This should not scare you away from looking for a house. There are a variety of loan packages available that are backed by Fannie Mae and the FHA that are helpful for first-time homebuyers and those whose credit is less than perfect.

Before meeting with a real estate agent, meet with a reputable lender like Sean Z Mortgage, who will work on helping you determine how much house you can afford. We will get busy on getting your pre-approval so that you can get busy on the hunt for the perfect home. A good lender knows that there is more to the job than collecting data and running it through a formula. Sean Z Mortgage will go over with you your personal and financial situation to find you the perfect loan package that can fit all of your needs.

Be ready for this strong seller’s market that has taken over the St. Louis real estate market by getting prepared beforehand. The better you look financially to a seller with options the better the odds that they will pick you. Call Sean Z Mortgage with USA Mortgage at (314) 361-9979.

Photo credit: Nan Palmero via Flickr

Home Loan FAQs

July 23, 2014 By Sean Zalmanoff

Getting financing is the most important piece in the path to home ownership.

Before contacting a real estate agent, your first call should be to a qualified lender to find out what types of loan options are available, which ones you qualify for, and most importantly, to find out how much house you can afford. During this time you should also be learning some mortgage fundamentals.

What Is a Mortgage?

A mortgage is a loan that is using property or a home as collateral. It is absolutely necessary unless you have the cash for the full purchase price. You essentially are promising the lender that you will be making small monthly payments to help pay that loan back. If you fail to do this, they have the right to seize the collateral, which is the house. That is what is known as a foreclosure.

How Much Will the Monthly Payment Be?

That depends entirely on the amount of the home loan and the terms that you secured; expect it to consist of four separate things:

The principal, which is the amount of money that you borrowed.
Interest payments, which are the fees charged to you by the lender for allowing you to borrow the money.
The yearly property taxes that are charged to the home. Lenders will insist on collecting this; defaulting on your taxes could cause you to lose the house to local authorities, an event that they cannot intervene with.
Monthly insurance payments that are paid on the home in the event of a fire, flooding, or roof damage. This is collected by the lender as well to ensure payments are made. You may also be required to pay a PMI which is an additional insurance for your lender if you are making a down payment of less than 20% of the home’s value.

What Is the Difference Between a Fixed and Adjustable Rate Mortgage?

With a fixed rate mortgage, the interest rate applied at the closing of the loan will remain consistent for the life of the loan, as opposed to the adjustable rate mortgage, which can fluctuate with the interest rate. The terms for an adjustable rate review are usually applied every 3, 5, or 7 years.

What Is APR?

APR, or annual interest rate, is a compilation of all the fees your monthly payments will be covering, including the interest. Closing costs, insurance fees, and taxes are all considered when determining APR.

What Is TBD?

TBD financing is securing a loan before choosing a house. To be determined programs allow you to start the house hunting program with the confidence of knowing how much credit will be extended to you.

Sean Z’s TBD mortgage program is helping thousands of St. Louis residents find the affordable house of their dreams as opposed to the unaffordable. It helps tremendously in making the process of buying a home as enjoyable and stress free as possible. Stop by our office today and get started on your right path to being a home owner.

Sean Z Mortgage – (314) 361-9979

Photo credit: U.S. Department of Agriculture via Flickr

Is It Time You Reversed Your Mortgage?

July 16, 2014 By Sean Zalmanoff

A reverse mortgage can be a viable option for seniors who would like to supplement their social security income.

Is a reverse mortgage right for your circumstances?

Reputable lenders, like Sean Z Mortgage, will make sure that you understand the benefits and risks of a reverse mortgage, and help you decide if it is right for your situation, before you sign on for one.

How Does a Reverse Mortgage Work?

As a responsible home owner, you have been making timely mortgage payments on your house for years, possibly decades. This has allowed you to build up equity in your home. Equity simply means that you now have value in the property above what is owed on it. A reverse mortgage allows you to tap into that equity to finance other things.

At first glance that seems like a home equity loan, and in some ways it is similar. The major difference though, is that as a senior, you are receiving monthly payments on that equity instead of making them for the loan. With a reverse mortgage, the borrower has the option of receiving one large lump sum of cash, monthly payments for so long as the borrower is living at the address, a line of credit or any combination of the three. Many seniors like to do a small lump sum cash advance to finance a big expense and then take the rest as monthly payments to supplement their income.

Who Qualifies For a Reverse Mortgage?

Any homeowner must be at least 62 years old to qualify for a reverse mortgage. In most cases, credit scores are not taken into consideration. What does make a difference is the amount of equity in the home and its condition.

How Much Can Be Borrowed?

The borrower’s age and the equity in the property impact the amount that can be borrowed. The loan must first be used to pay off the balance of any mortgage or lien on the property. What is left after that is the available cash. Both Fannie Mae and the U.S. Department of Housing and Urban Development offer special reverse mortgage backing to seniors.

What Can the Money Be Used For?

Typically, how the money obtained by the homeowner with a reverse mortgage is spent is at their discretion. Many will use it to help cover unexpected medical bills and treatments, while others may use it to finance a special vacation or other large purpose. The vast majority of seniors though are using the monthly payment option and using the funds as a second source of income to help pay monthly expenses.

When Do I Have to Start Paying the Loan Back?

A reverse mortgage is paid back when the home is sold. Until that time, you still retain ownership and hold the deed. Talk with a lending expert like Sean Z Mortgage to help you decide if a reverse mortgage will work in your circumstances. This is a great way for a senior citizen to be rewarded for all the years spent keeping up with their home and the mortgage payments. Call Sean Z Mortgage at (314) 361-9979 for more information.

Photo credit: The Marmot via Flickr

Avoid These Common Mistakes When Buying Your First Home

July 3, 2014 By Sean Zalmanoff

Buying a first home is a major milestone in a person’s life.

While this is supposed to be an exciting time, it is often fraught with undue stress. Do not let your lack of experience ruin what should be one of your proudest moments. Avoid these common mistakes and you will find that the first-time home buying experience really is a joyful time.

Consider Your Finances

Be realistic about your finances. There is more to owning a home than making monthly mortgage payments. You also have to consider property tax, insurance, HOA fees, increased utility bills, and maintenance. All of these are often overlooked when budgeting for a first home. To avoid this potential financial trap, talk with a mortgage lender before you start house hunting.

There are many government backed loans that offer special incentives to first-time home buyers. You can also look into a To Be Determined, or TBD loan. This type of approval process is based on your income, not on the value of the house. Getting approval will give you an excellent idea of how much house you can afford. Once you do have your approval from your lender, you can then budget in those additional expenses to give you a clear idea of the price range you should be looking in.

Avoid Emotional Buying Decisions

A first time home buyer may be overly excited about their imminent purchase, and tend to base their home buying decisions on emotions. This is a big financial decision you are about to make. Looking at homes before you know how much you can afford is a backwards approach. Get pre-qualified first with a TBD mortgage and you are going to make better choices for your future.

Working With a Real Estate Agent

Choosing a real estate agent you can count on is essential. While some people will try and avoid fees by dealing with listing agents themselves, this is a big mistake. Listing agents are contracted by the seller and will not have your best interest in mind. You need to have your own buying agent to help you negotiate price and terms.

How Much Down Payment Should You Make?

You may have been saving money for years in order to make a down payment on your first home. A big mistake a first time home buyer may make is using all of those pennies and not leaving any cash on hand. While this may help keep monthly mortgage payments down by eliminating PMI insurance, it won’t be worth it in the end if you suddenly need cash to fix a broken appliance in your new home. Talk with your lender about mortgage programs that offer little money down to first time home buyers as a part of their terms.

The last thing to remember during the home hunt is not to do any big shopping before your closing date. Some home buyers get excited and start going on furniture shopping sprees but this is a mistake. Lenders will sometimes do one last credit check before they close and if they see a sudden big change in your debt to income ratio they can deny the loan. Wait until all the paperwork is signed before starting to furnish your new home.

If you follow these few simple steps then you will quickly be on your way to home ownership. Call The Sean Z Mortgage Team with U S A Mortgage at (314) 361-9979 to get you started.

Photo credit: Benjamin Reed via Flickr

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