Who can believe that we are almost through April? A popular prediction for the real estate market this year is that millennials are finally going to decide to buy homes. After numerous conversations with individuals from this age group, it seems that condos and flipped properties are going to be extremely popular among this demographic. Below are some things to keep in mind when showing these types of properties.
• If the buyer is utilizing FHA financing, the condominium complex must show as approved on the HUD website (https://entp.hud.gov/idapp/html/c ondlook.cfm). It is important to verify this regardless of what is stated as eligible financing on ARMLS.
• If the buyer is utilizing conventional financing, a condo certificate is required (typically paid for by the buyer), and must be completed by the HOA. The answers to the certificate dictate whether a property is eligible.
• HOA dues on condos tend to be much higher than similar priced single family homes. Keep in mind that we utilize an estimated amount of $50 for HOA dues on most prequalification’s, so the higher HOA could affect what the borrower qualifies for.
• There is a 90 Day Flip Rule in effect for FHA borrowers. This means that the buyer cannot get into contract until the 91st day since the most recent sale of the subject property. If you accidentally get into contract beforehand, we can originate the loan, but the contract will need to be rewritten on the 91st day.
• If the buyer is utilizing conventional financing, there are circumstances that require a second appraisal. Numerous factors dictate this requirement and should be taken on a property by property basis.
• We are noticing a significant increase in contracts where Open Door or Offer Pad are the seller. Properties that are owned by these entities are required to adhere to the FHA 90 Day Flip Rule.
Top 10 Rules to Follow When Applying for a Mortgage
1. Do not change jobs or quit your job.
2. Do not purchase a new car, truck, or van.
3. Do not use credit cards excessively or let current accounts fall behind.
4. Do not spend money you have set aside for closing.
5. Do not omit debts or liabilities from your loan application.
6. Do not buy furniture.
7. Do not allow new inquiries on your credit.
8. Do not lose the paper trail of any large deposits in your accounts.
9. Do not change bank accounts.
10. Do not co-sign a loan for anyone or obtain a new line of credit.
by Andrew Augustyniak Branch Manager