Three quick tips about using an FHA 203K loan for renovating a Jacksonville foreclosure...
If you haven't heard about this program, it's a regular FHA home loan coupled with a renovation loan. If you qualify for a standard FHA loan, you can get a 30-year fixed as long as both loans only total 96.5% loan-to-value. The difference is that your foreclosure home doesn't have to be in tip top shape to close the sale. You purchase the home in "as-is" condition and make repairs and your desired upgrades after the closing. (Of course, you don't have to purchase a foreclosed home-any home will do--we just think it's the most likley choice given the real estate market in Jacksonville, FL!)
Keep in mind:
1. Value must support investment. Make sure your Jacksonville FL real estate agent finds a home that will sell for less than it's worth. Get the home at a discount! Remember, you must add the cost of all your anticipated repairs to the sales price. A common mistake home owners make is putting too many upgrades into the home. It doesn't take long for renovation costs to drive your loan amount ABOVE the current market value of the home. (i.e., is this really a home/neighborhood where crown and granite are expected?) No one should be upside down on a home before they move in.
(1) PURCHASE PRICE
+ (2) REPAIRS
________________________________
(3) TOTAL INVESTMENT (less than or equal to market value)
2. It's going to take longer. FHA 203K loans are more complex, involve more parties (such as contractors, builders, inspectors, etc....) and therefore requiring more time. Expect 60 days from contract to closing here in the Jacksonville FL market.
3. Choose your repair work carefully. First, select a HUD consultant and perform an inspection immediately after your offer is accepted. Identify deficiencies in the property and determine which improvements you must or should make, always conscious of the total price (purchase price plus repair costs = market value). Then choose your loan type: "Streamline" if your repairs are cosmetic and non-structural in nature and will not exceed $35,0000; "Full" if repairs are structural and extensive (no limit).
While these loans aren't for everyone, it's an opportunity for those who normally could not participate in the buying frenzy associated with foreclosure homes in Jacksonville, FL to get a great deal or purchase a first home.
These are only three quick tips to use when considering FHA 203K loans. We've got many more details and access to local lenders who close FHA and FHA 203K loans frequently here in the greater Jacksonville FL area. Send us an email or give us a call.
Buyers, PUH-LEASE pull out cash for purchases...at least until you close!
Back on June 1, I posted an announcement (a warning, really) to buyers who are preparing for closing. The rules have changed! Fannie Mae rolled out it's "Loan Quality Initiative" and it's having widespread impact. While many of the rules are not entirely new, the enforcementof them is. Fannie Mae, in an attempt to get repaid, is forcing strict mandatory underwriting guidelines. Buyers need to be extremely cautious of their financial and spending habits during the home purchasing process, especially from the time of initial loan application to the day of closing. Even a small store credit purchase, such as home furnishings at Home Depot, or the application for a new credit card could result in a denied home loan, a canceled closing, and even a forfeiture of the binder deposit according to most purchase and sale agreements.
Read the Top 3 Ways to Mess Up a Home Closing Here>>
Underwriters will reevaluate a buyer's credit situation a SECOND time, immediately before closing. That means any new credit applications, income or job changes, or new monthly payments could affect the credit report or debt-to-income ratio. Even job position changes, such as moving from salaried to commission-based or changes in commission structure could affect this delicate process.
As I've said previously, a buyer's safest bet is to put a freeze on spending during the home buying process. While furnishing and decorating the new home upon move-in may be part of the homeowner's dream, this could be detrimental if not done cautiously and with cash. Our advice? Secure the home first; improve it later.
The best deals will go to the Smart Property Purchasers! Get your funds together early, plan your budget wisely and be ready to act quickly when the best deals hit the market this summer!
Need a jump start on dealing with debt? We like Dave Ramsey's Total Money Makeover. Want to search FL foreclosures on your own or set up automatic notifications when they hit the market? Click here and get started for free right now!
Want to read more about the new Fannie Mae guidelines? (You will have to navigate through a lot of legal jargon, but this is the link to the facts: https://www.efanniemae.com/sf/lqi/pdf/lqisummary.pdf
For more reading on the topic, here are two additional blogs I recommend:
http://www.inman.com/news/2010/06/23/borrowers-face-new-set-credit-checkups
Of course, if you have any questions, want to talk to a local lender about your situation, or want to start looking for Jacksonville FL homes, give us a call!
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Buyers, PUH-LEASE pull out cash for purchases...at least until you close!
Is the Jacksonville FL home market really recovering? Recently the Florida Times-Union published its quarterly real estate report over the Father's Day weekend. The paragraph of the article suggested that "recovery" was underway. As a local Jacksonville Realtor and home owner, I'm not so sure...

While the number of sales in the Jacksonville FL real estate market is on the rise, up by 14% over last year, the numbers only account for half of the recovery equation. Recovery is not one-sided, measuring favorable environments for buyers; True recovery must account for the seller side of the equation as well.

Conditions for sellers are anything but favorable. Home values continue to remain extremely low, even down 8.5% from last year. Foreclosures and short sales are rampant. Many mortgages are still upside-down. In my mind, a full recovery of the real estate market in Jacksonville FL would include both: increased number of sales (including new housing starts), and increased home values. Sales prices need also be on the rise. Even if average sale price in Jacksonville were to steady itself, that would be a positive sign for local Jacksonville homeowners.
In the meantime, buyers (particularly those who intend to purchase with cash!) can clean up with unprecedented bargains on distressed properties. (See for yourself and sign up for automatic foreclosure notifications here: www.houses-that-rock.com!) Sellers, I'm sad to say, will need examine their alternatives to see if selling is even a viable option. The Jacksonville FL real estate market is highly competitive. Even the most attractive and desirable homes must be priced below market value to stand a chance. Upgrades and condition are taking a back seat to low prices.
So what would a full real estate market recovery look like to you? I'm curious and welcome opinions...
Jacksonville FL Home Sales Increase--Is that really a recovery?
Unique Find: Waterfront Jacksonville FL Foreclosure Home
Every now and then a truly unique foreclosure will pop up in Jacksonville, FL. This once is on a huge, waterfront lot with a deep water boat dock. Some of the renovations are already underway. The detached garage appears to have been used as an office--prewired for network and fully air conditioned with its own unit. It has a full bath and multiple entrances. There is a separate detached shed for storage.
The home itself is situated on the back of the lot and has gorgeous waterfront and tree views. Will be posting more info on this great find soon!
Listed in the LOW $200,000's!!


Unique Find: Waterfront Jacksonville FL Foreclosure Home
Settle in and Get Comfortable...Real Estate Market Outlook for Jacksonville FL
That's been our advice to real estate consumers in the Greater Jacksonville FL area that we serve.
One of the first things we were taught about the real estate market is that change happens SLOWLY... That's why you will hear something missing in economists' predictions: the V-shaped rebound. It's common thought that markets dive and bounce back, often at the same rate of speed. We think of it as a "what-goes-up-must-come-down" philosophy, in reverse. But this is proving not to be so with the real estate market. And the market in Jacksonville FL is certainly no exception.
In noticing the chart below, pay little attention to the predominant blue line--this indicates the number of new listings coming on the market. For the purposes of this discussion we concern ourselves only with sales that actually closed.
If you scroll to the right and follow the gray line (closed sales) you will see "w" shapes in the line graph every few years, particularly in 2004, 2005, a little in 2006, and 2009. This "w-shaped" rebound is typical in real estate and in our Jacksonville market. There is good reason to anticipate a "w-shaped" rebound in the years to come. In other words, as Realtors, we do not expect the Jacksonville Market to bounce back or enjoy a sudden and joyous recovery, in terms of number of sales AND local home values. In short, our best advice it to find a way to adapt to the inevitable. Just in case this is as good as it gets for, say, the next three years, what will do you?
Riding out the storm is a good option for most. If you are able to get yourself out of debt, work on that and save for a down payment on your next home or a cash purchase on an investment property. You will still have plenty of time to take advantage of this buyer's market! Be patient and responsible in your real estate decision-making. But expect competition, especially when trying to purchase a foreclosure. You will also need to have your finances ready to move quickly. Learn all you can and work your way out. We can help point you in the right direction.
Settle in and Get Comfortable...Real Estate Market Outlook for Jacksonville FL
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