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If There’s
a Will, There’s a Way
Purchasing a house
for as little as $500 is done all the time, but it takes the
expertise of your real estate partners and the cooperation of both
buyer and seller to pull it off. Everyone has to
be on the same page BEFORE the contract has been negotiated.
Step
1
Start the process of
purchasing a home for as little as $500 by communicating with your
lender. It is very
important for you to provide up-front and forthcoming information to
your mortgage counselor so that she understands your goals. If you want to purchase a
home for little to nothing out of pocket, let your lender know
immediately.
With that
information, your lender should show you what financing options are
available to achieve that end result - $500 total out of
pocket. This
should be factored into your pre-qualification or pre-approval
process.
There is more than
one way to purchase a home with as little as $500, and typically a
buyer uses a combination of methods to reach this goal. The following methods
are:
1)
Financing or “rolling” into the sales price items such
as: down payment,
closing costs and prepaids (taxes and insurance).
2)
Down payment assistance programs / bond programs.
3)
Gift programs.
4)
Interested party contributions (from seller, realtor,
lender).
Step
2
Once you are
pre-approved, have your lender communicate the financial needs of
the transaction to your real estate agent (also called buyer’s
agent). It is
very important for you AND your lender to communicate any critical
financing information to the agent BEFORE making an offer on a
house.
Step
3
Locate the house you
want to buy. Work
closely with your buyer’s agent to locate a home. Once you are ready to
make an offer, you AND your buyer’s agent should contact your lender
to let her know about the property on which you want to make an
offer.
Ask your agent to
pull up “comps” (short for “comparable” homes) in the same
neighborhood or competing neighborhood to get an average square
footage price for similar homes that have sold within the last 12
months.
Have your agent communicate with the lender about the average
sales in the marketplace. Your agent should
determine if there are strong sales in the area to support a higher
appraised value than the asking price of the house you are
interested in purchasing.
With this
information, your lender will want to rerun the financial numbers
for your situation to:
1)
Determine the dollar amount that is needed to factor into the
financing of the home for down payment, closing costs and
prepaids.
2)
Confirm that you still qualify for the loan based on any of
the following factors:
a.
Costs financed into the transaction
b.
Current market rates
c.
Estimates for taxes, insurance and any homeowner’s dues or
assessments associated with the property you are interested in
purchasing.
Step
4
After your agent and
lender have worked together to review the numbers to determine
“feasibility” of the house appraising for any amounts above/beyond
the initial asking price, you are ready to write up an offer. Your agent will walk you
through this process.
Step
5
Your lender will
order an appraisal (official market valuation) on the home you are
contracted to buy. The
house must appraise for the full purchase price – including any
amounts financed or “rolled” into the home – in order for the lender
to provide the maximum financing. The appraised value as
determined by a licensed appraiser is the last and final “key” to
ensuring that you can purchase a home for as little as $500.
Overview
By having an up-front
understanding of the method that lenders and realtors use to help
buyers get into homes for $500, you can make smart choices
about:
1)
Home selection
2)
Home financing options
To contact a
LegacyCare loan consultant
for your home loan,
please
call 817-860-3232 or email to info@legacyfinancial.com.
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