Tanya Runkle NMLS/MLO#307502

Road Maintenance Agreements. The concern or need for this type of agreement may never come up where you live and work. However in many markets this is commonplace and a concern that arises. Here is the Lending Perspective and why we need this in order to close.

We recently worked with a Veteran and his family on their purchase of a rural property in Washington State. The seller had owned the home for 30+ years and did not have anything more formal than a verbal agreement with her neighbors on who would keep up the private road that they all used. That verbal agreement worked well for her while she owned the property, but how could we lend on a home and ensure that our borrower would have adequate access to their home, and a usable road to get there?

Most often, all parties will come to an agreement on their own, record the agreement and we move forward. Some agreements have left our key issues that years later result in expensive litigation between homeowners. A Real Estate Attorney is an excellent resource to make sure that issues like the following are addressed:

• Right of Entry-who uses it and the property location
  
• Apportionment of maintenance costs-the how
  
• Binding effect-addresses the successors in interest, heirs and assigns
  
• Notices-how notices regarding the road will be sent out and who will send them
  
• Maintenance and repairs spelled out
• How expenses will be shared
• Enforcement-what happens if a homeowner does not hold up their end of the agreement
  
• Terms of Easement
• Consideration-purpose
• Legal description and who it benefits
  
• Misc...legal stuff that keeps everyone out of trouble!

Wishing you success!

Tanya Runkle

Who Makes a Good FHA Borrower?

• First Time Home Buyers
• Buyers with a lower down payment-3.5% down and the down payment can be a gift
• Buyers that are two years out of a Bankruptcy or one year into a Chapter 13 repayment plan (we would need permission from the Trustee to purchase a new home, but it is done often!)
• Buyers whose foreclosure was finalized 3+ years ago

Benefits of FHA Financing

• 6% seller contribution to buyers closing costs and pre paid expenses
• Student loan debts can be excluded from debt to income calculation if deferred for 12+ months
• Non occupant co-borrowers can help a buyer qualify for first home purchase
• No reserve requirement like many conventional loans

What has changed about FHA Financing?

• Property repairs are more in line with Conforming/Conventional property guidelines
• Buyers with an existing home must show they have a minimum of 25% equity position, and rental income property documented and supported to qualify. Talk to your FHA approved Lender for more information.

Check your County Loan Limits for FHA at: https://entp.hud.gov/idapp/html/hicostlook.cfm

No Thanks...I'm just looking.

Those of us who began our career in retail sales are far too familiar with the classic buyer objection. My first real job was in sales at Nordstrom when I was 16. I am so thankful for the excellent training, leadership and business philosophies that I gleaned while with the company, they have shaped who I am today. However, until recent years, I continued to sell. I was doing what I have been trained to do. Find a hot lead and sell, sure, sometimes the process took a while if we were repairing credit, working on credit score or searching for a home. But the hot buyer was who I was after, and intersecting with them when they were ready to go made my day. And it still does. But, who did I overlook in the process?

Non-selling and what we can learn from Colombo

I began non-selling about five years ago. I educate and offer information. My job is to offer what people are looking for, earn their respect and trust, and help them get what they want. And, by offering information without obligation I am non-threatening, relaxed, and have fun with the people I work with. About five years ago I heard someone make the statement that we should stop selling and give people what they want in Lending and Real Estate. If we do not, they will hang up and call the next person who will give them what they want, or visit their site. This is usually the person that will end up working with them.

So, I began to focus only on answering questions and educating instead of closing. At the end of an interaction with a potential buyer who is in the education phase, I ask them if I can give them additional information that they might find helpful. This might be a report, access to information to repair credit, or anything that might help them while they learn. I do not ask them to do their loan with me, they are not there yet. But, if I do an excellent job of answering questions, giving information and bring out my inner Colombo I have put myself ahead of everyone else. At the end of each show Colombo turned to leave then thought for a moment, and asked his question. It took the person off guard and he was able to gain the information he needed. Listen, listen, offer information, and be the last person your potential buyer needs to call...because you just gave them what they want.

"The Best Three Hundred Bucks I Ever Spent"

I share this story with every new buyer I meet when they are deciding if they should waive or obtain a Home Inspection. About five years ago I was working with an excited First Time Home Buyer whose daughter had a mold allergy. She found a newer home in a subdivision, beautiful inside and out and could not wait to tell me about how quickly she fell in love with this darling new home. I was very excited for her, she had worked very hard to get to this point, and it sounded like she had found "the one." As we had discussed before, I urged her to hire a Home Inspector even though the house was "beautiful" and seemed perfect so far in every way. She chose not to bring her daughter with her the day of the home inspection, and that was a good call. As the Home Inspector and potential new home owner went through the home and headed to the attic, he discovered more mold than he had ever seen in his career inspecting. Had her daughter made it through a couple visits to the home and ultimately moved in she could have become extremely ill. Disappointed but glad she had the inspection, she dubbed it "the best three hundred bucks I ever spent." Side note, this home was FSBO and not listed with an agent.

Not only does a Home Inspection help a buyer make an educated decision and possibly avoid a money pit, but they receive an education in the process. Where are the water and gas shut-offs, how often should I change that filter, how do the allergy filters in this furnace work? If they are not buying new construction with a builder to walk them through and also be around after closing, where else are they going to obtain this great education and possibly save themselves a lot of heartache?

Home Inspections Are Good For Buyers to:

• Evaluate the physical condition: structure, construction, and mechanical systems
• Identify items that need to be repaired or replaced; and
• Estimate the remaining useful life of the major systems, equipment, structure, and finishes.

Your Credit Score is a fluid number that changes as your credit report changes. Therefore, any change to your credit report could impact your credit score. Here is some helpful information to take into consideration:

The Players
Equifax, Transunion, Experian

How Credit Scores are Weighed

• 35% in established from your payment history, collections and public records (bankruptcy, liens, etc..)
• 30% is established from your outstanding balances being carried on your accounts. Balance as opposed to limit. This an important reason not to use the maximum credit available on credit cards, it can lower your score even if your payment history is excellent.
• 15% is based on your length of credit history. It is better to have credit for longer time frames. Credit repair experts recommend paying down or paying off the credit cards but leaving them open. The difference between the limit and balance can improve your overall credit rating.
• 10% is established around the type of credit you have (mortgage, installment, lease, revolving)
• 10% is established around your request for credit (inquiries) meaning that every time you apply for credit your scores are impacted with certain FICO rules. FICO rules typically allow for more than one credit pull when you are purchasing or refinancing a home understanding that it may take more than one credit pull to complete the process. For more information on FICO rules visit www.myfico.com

How to Obtain a Copy of Your Credit Report
Consumers can request a copy of their credit report annually which is an excellent way of proactively managing your credit scores. This can be done by contacting the three credit bureaus directly. You can access this information online at http://www.equifax.com/home/en_us. You can also request a consumer copy of your credit report when you apply for a home loan. Since your credit score is a very important part of your home loan approval, what type of home loan you are able to receive and ultimately if you can obtain financing now, working on your credit now can make the difference in owning a home.

Repairing Your Credit
If you're facing complicated credit issues, you may want to consult with a professional credit repair company. Before you do, make sure you familiarlize yourself with FTC regulations and information to be certain you are dealing with a reputable firm. Credit repair is not the only way to improve your scores, it's possible to make good scores even better by taking steps like these:

Evenly distribute your credit card debt. The goal here would be to change the ratio of debt to available credit as mentioned before by evenly distributing the debt between the cards until you can bring the balances down or pay them to zero.

Keep you existing accounts open and active. Mandy consumers are anxious to close accounts with a zero balance, but this can truncate credit history and work against a positive debt-to-available credit ratio.

Keep credit inquiries to a minimum. Each inquiry into your credit can impact your scores anywhere from 2-50 points. If you have already been approved for a home loan, a good rule of thumb is to not buy anything or allow your credit to be pulled for other purchase until after you have closed on your home. Ask your Mortgage Consultant for more information on this.

Taking steps to improve your positioning will help cultivate a more fruitful financial harvest, putting you that much closer to obtaining the home of your dreams.

Check in for the next step in the First Time Home Buying Series, for more information on what you need to know to prepare yourself.

Have a blessed day, Tanya