Greenville, NC

Hey Pirate Nation!

East Carolina University starts in just over a week and we all know what comes along with school - the late nights (studying, right?), pizza, first tastes of alcohol (yeh, right) and lots of good southern food! To help you avoid the "Freshman 15" - www.HealthyPirates.com is now full of useful information for you!

Just like Deryck Wilson & RE/MAX Preferred Realty - Healthy Pirates is part of Pirates Supporting Pirates!

Parents & Students - Why RENT when you can BUY! Establish credit history, take advantage of a $8,000 possible TAX CREDIT, pick your own roommates, amazing tax write-offs! Loans via the "Kiddie Condo" program are easy and hassle free and there is a HUGE inventory of affordable condos and town homes as well as single family residences CLOSE to campus! Walk to School! Buying can easily be LESS EXPENSIVE than renting, especially with roommates.

DERYCK WILSON, BROKER, REALTOR
Student Living Specialist

Owning and Financing the Student Property

Talk to your accountant and attorney to determine the ownership method that works best for you. Some parents will buy as owner occupied property; others will treat it 100 percent as a rental property for additional tax benefits. There are many ways of holding title, including creating a Family Limited Liability Company (LLC).

Several options are available for financing your student property.

• FHA "Kiddie Condo" loans. If you want your student to be in title to the property and you want to pay the minimum amount down, using FHA financing is the easiest way to purchase a property. The FHA "Kiddie Condo" loan program helps students qualify for loans by allowing them to co-borrow with a blood relative. Down payments for this type of loan can be as little as 3 percent of the total purchase price, and interest rates are lower than those on investment properties. Maximum FHA loan limits vary by location so check to see what they are for your county.
• Non-owner occupied loans. Some parents will choose to own the property as investment property by putting 20 percent down and using non-owner occupied conventional financing. The Chase Family Opportunity Mortgage allows parents to classify the property as a second or vacation home, therefore allowing them to pay less in points than on a rental property mortgage.
• Interest-only loans. An interest-only loan, rather than a fully amortized loan, is another option. The advantage of using an interest-only loan is that it reduces the monthly payment.

If you're buying a condo, check the owner-occupancy ratio of the complex. This may affect the type of financing you can secure.

Help Your Child Establish Credit

If you decide to have your child on the mortgage and deed, help your child establish credit before you apply for a mortgage. Obtain a credit card in the student's name, preferably a year prior to your purchase. Also, if the student has a car, it's a good idea to have a small loan on the car in the student's name which can also help their credit rating.
By Duane Duggan and Shannon Petrie, FrontDoor.com

Visit your local condo and townhouse connection for more info: www.GreenvilleHomeTeam.com

Housing & Economic Recovery Act (HERA)

Take Notice! - New government regulationis going into effect on July 30, 2009. This regulation requires all mortgage lenders to provide the Truth in Lending (TIL) disclosures to borrowers according to a defined schedule. The schedule may alter the borrowers' closing date expectation. The regulation is in the best interest of our borrowers, so it's important we all understand and implement it thoughtfully and consistently. In addition, we all need to work to ensure the changes that will result from this regulation are understood by our borrowers!

LOANS CANNOT CLOSE UNTIL AT LEAST SEVEN DAYS HAVE PASSED FROM DATE OF APPLICATION!

Dont Believe all the hype! - There is no more closing a loan in 5 days! (Was there ever?) Lenders must issue the initial TIL disclosure at least 7 business days before loan consumation (document signing). Regardless of how the initial TIL is provided to the borrower, closeing documents cannot be signed earler than 7 business days after the initial TIL has been issued.

Changes start the 3 Day Clock AGAIN - If there are any changes to the loan parameters that affect the Annual Percentage Rate (APR) on the TIL, the resulting APR must be compared to the latest TIL provided to the borrower. If there is an increase greater than .125% in the APR, the lender must provide a corrected TIL to the borrower. Fees considered to be finance charges that are used in the APR calculation include but are not limited to discount points, lender fees, Life of Loan flood certification coverage, settlement agent or attorney fees. Borrowers MUST be provided three business days to review this amended TIL prior to loan closing. This is new, current, FEDERAL LAW - Banks will be fined $4,000 for errors.

Fees Can't be collected until disclosures are received - The regulation prevents the collection of all fees from the borrower, except the expected cost of the credit report, until the initial TIL has been receieved by the borrower. This may delay the appraisal orders or orders for other essential services; therefore it's very important we work together (lenders, agents, attorneys) to set the borrowers' expectations for closing accordingly. This will eliminate the shopping around for rates and the non-contact internet loans. If the initial TIL is delivered to the borrower face-t-face, fees for these services can be collected at that time.

The changes this regulation brings are positive ones for our borrowers. This new regulation strives to ensure that borrowers have a clear understanding of the financial obligation they are about to assume.

Again, if the initial or latest TIL and the closing paperwork's APR changes .125% or more (1/8th of a percent) the closing WILL NOT take place. Think of the domino effect here - the movers that are waiting, the contingent sale, etc etc. PLAN AHEAD!

For more information, visit www.HUD.gov or www.Remax-Greenville-NC.com for updated alerts!

Information courtest of Deryck Wilson, REALTOR with RE/MAX Preferred Realty