What does it take to get married? Well, it starts with a formal proposal.
With life in general, two people meet. Man loves woman. Woman loves man. Man buys a diamond ring (as is the formal custom), gets down on one knee and says “will you marry me?” Then he experiences a split millisecond of gut wrenching terror while he awaits a response; hopefully a yes!
In real estate, man AND woman (though sometimes alone and not together) look for a home. At first they go it alone (newspaper, weekend open houses, maybe craigslist?). One or two weeks in they make nice with an Agent. This Agent (out of the kindness of his or her heart) 
puts together a list of homes for sale and saddles them up in the SUV…and off they go…house hunting!
As they go through the list and the Agent expends gallons of gas at $4.43 a gallon (how nice of him or her) it’s either “love at first sight” or “honey, let’s get out of here” until…suddenly…man and woman (though sometimes alone and not together) find the one they LOVE. 
They want to put in an offer. You know, ask: “will you marry me?” Well, as is the formal custom in today’s Real Estate Market, they need to be Pre-Approved (this is the real estate "diamond ring" equivalent). A seller won’t take you seriously without one. The answer to “will you accept my offer” is a resounding (and sometimes gut wrenching) “NO.”
On the advice of their REALTOR® they accept the offer for $5,000 - $10,000 less. Why? Because they proposed with a diamond ring. They were pre-approved. Pre-approval says, “I’m qualified to buy THIS house. I have the income, credit and down payment necessary. See...look... I told you so.” This escrow will close! The seller accepts.
A pre-qualification says nothing of your credit. You haven't jumped through the underwriting hoops. Sure a lender took a gander at your DTI, quoting you a possible rate and payment (to arrive at a price point you're comfortable with). But still, no: credit report, verification of income, etc. You’re proposing empty-handed. And that’s not very confidence inspiring to Mr. Motivated Seller. Is it?
My name is Ricardo Bueno. I’m a mortgage lender based out of Los Angeles, CA. If you need to get approved for your next Real Estate purchase you can reach me at (323) 810-2175 or via email at ricardo (at) ricardobueno (dot) com
The fact is, it can be tough coming up with enough money for a down payment!
Say you needed 10%... 10% of $400,000 is a whopping $40,000!
Calculation:
$400,000 Purchase Price x 10% = $40,000 (required down payment excluding closing costs)
You've only managed to save $25,000 but you're ready to own; you're paying too much on taxes every year so the mortgage write-off would serve you well and the monthly payments are affordable. What do you do?
Lucky for you your parents really want to help and they've agreed to give you the difference for the down payment and closing costs...this is called Gift Money!
HOW DOES IT WORK? WHAT DO I HAVE TO DO?
You have to provide your lender with a notarized letter (signed by each of the givers) stating that the dollar amount given to you was a gift. Pretty simple huh? And what's great about it is that the money doesn't need to be seasoned.
Also, there is no limit with respect to dollar amount on Gift Money that you can receive but there will be tax implications to the person gifting the money for amounts beyond the $12,000 annual exclusion (you have to file a gift tax for monies beyond $12,000).
*Disclaimer: I am not a licensed CPA so please consult with your local Tax Professional for more clarity on the tax implications of Gift Money.
For more questions on how you can use Gift Money for your down payment and how to appropriately structure your next purchase, you can contact me here or call me directly at (323) 810-2175.
Follow me on Twitter: RicardoBueno | Follow me on FaceBook | Visit my blog: www.industry-report.com | Join me on LinkedIn (ricardo@ricardobueno.com)
The fact is, we all need money! We have:
car payments,
insurance payments,
mortgage payments,
and all of life's other expenses.
This means you'll work harder to cash a larger paycheck and it also means you might apply for a loan at some point to have cash available in case of emergencies.
Our recent onslaught of Fed Funds Rate cuts means lower interest rate credit cards and lower rate second mortgages (HELOCs). But you can also directly exercise a degree of control over the interest that you pay on your loans; be it the rate on your plastic or the rate on your mortgage.
An excellent Credit Score (or more specifically your FICO Score) translates into the best rates on every kind of loan; car loans, credit cards, home equity lines of credit, first lien mortgages, etc.
Now your FICO Score will range between 300 and 850. If your score is currently above 700, you have excellent credit. If it's slightly lower than 700 (between 680-699, it's still good credit but given our current market landscape, it's definitely time for a boost! Anything less than 680 is going to cost you an added premium to today's current mortgage market rate.
So do you know your FICO score? If you don't, you can get a FREE credit report from a series of differen
t sources. For example,
When you register for a copy of your credit report, be sure to request reports from all three credit reporting agencies (Transunion, Equifax, and Experian). Not all information is reported the same to each credit reporting agency. As such, you will notice different FICO scores from each of the three credit bureaus.
If you notice any items inappropriately noted on your credit report, formally notify the respective credit bureau noting the discrepancy. At this point they'll have (30) thirty days to respond and verify the information otherwise it's coming off!
So check for mistakes. In fact, recent studies show that at least 79% of credit reports have errors noted on them which once again begs the question:
Do you know your credit score?
If you have any question regarding inaccuracies in your credit report, or if you have questions on how to improve your FICO score in general, ASK ME here or call me directly at (323) 810-2175.
Mortgage Planner
Direct: (323) 810-2175 | Fax: (323) 223-0302
Check Daily Mortgage Rates: www.industry-report.com
Apply Online: www.ricardobueno.com
No false promises just smart, innovative, professional and ethical financing solutions! Licensed in 43 States!
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