First time home buyers in the Chicago area

Why Are Appraisals Important?

  Who Does the Appraisal? When an appraisal is done, an unknown, third-party, qualified professional is brought in to examine the property. The buyer and lender do not have the ability to choose the appraiser. This person will go to the property and look at the amenities of the property, and then compare that to all the properties that have sold in the area to determine a fair market value for your home. Is the Appraised Value Acceptable? A lender will look at the appraised value of the home, and compare that value to your contract price, whether you have bought the home or are doing a refinance. After the appraisal, the lender needs to check that the appraised value is acceptable, and also determine the condition of the home to see whether any improvements need to be made. In some cases, such as with FHA renovation loans, a list…

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What Can You Do with a Chicago Renovation Loan?

      What specifically are you allowed to do with a renovation loan? The real question is, “What can’t you do?” because there is a lot of flexibility with this type of loan. What can you do with a Chicago Area Renovation Mortgage? There are many different ways to use this program. There are three basic types to look at: FHA 203k renovation loan: a great way to get a government-insured property with as little as 3.5% down, including costs of repairs Homestyle renovation loan: better if you have a bit more of a down payment VA renovation loan: includes special benefits for veterans and disabled veterans The good thing about renovation loans is their flexibility: you can use it for something that just needs a little bit of work or a home that needs a tremendous amount of work. It doesn’t matter what the condition of the property…

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What Mortgage Programs Are Available to Veterans?

If you’re a veteran or a disabled veteran, what special programs for buying a home are available to you? If you served your country, you can take advantage of the Veterans Administration Loan Program that allows you to get 0% down on a home loan. In addition, there are other benefits with a VA loan, which will be described below. Funding Fee When setting up a Veterans Administration loan, a funding fee is attached to the mortgage. VA loans do not require mortgage insurance, as with typical mortgages when you put less than 20% down. However, there is a one-time funding fee that is added back into the mortgage. The amount of the funding fee depends on whether you were active duty, or served in the National Guard. However, if you are a considered a disabled veteran, this funding fee is waived and can save you money up front. Real…

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Learn About the Illinois Assist Program

                  For first time home buyers, there is a great new program called the Illinois Assist Program. This program is great news for first-time buyers and is a grant that does not have to be paid back, which gives money back at closing towards your down payment and closing costs. If you qualify, you can get up to 5% of the loan amount back, which can be a huge amount. Qualifications for the Illinois Assist Program There are some strings attached – it is not available everywhere in Illinois, but is in a number of areas in the Chicago area: including Cook County, Kendall County, and a number of cities such as Naperville, Schaumburg, and Aurora. There are income caps for the buyer, but they are still relatively high so there is room for you to buy, and there is a cap…

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How to Find the Right Lender for a Chicago FHA 203k Renovation Loan

      A renovation loan, or FHA 203k renovation loan, is a great tool for buying a home that needs some repairs or improvements to raise the value of the home. Renovation loans allow buyers to incorporate renovation costs into the mortgage in order to improve the home and raise its value immediately, rather than waiting to renovate years down the road. In addition, this can save money in comparison to a second mortgage or use credit cards to make improvements. When shopping for a lender, what questions do you need to ask when considering a renovation loan, or FHA 203k renovation loan? How Experienced Is the Lender? How many renovation loans has the lender done in the past? There are many moving parts to a renovation loan: you have to approve the situation, know the timing of everything, and know what is allowable under the terms of the…

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How Can a Chicago 203k Renovation Loan Save You Money?

  If you’re looking into buying a home in the Chicago area, a 203k renovation loan can end up helping you save money. If you’re looking to buy with an FHA 203k loan, it will allow you to buy a home, and add in some improvements at the same time. While it costs a bit more to buy with a 203k loan than a traditional mortgage, you can still save a lot of money if you know what you’re doing. When a Renovation Loan is Appropriate It comes down to your plans for the home after you buy. Many folks think that a renovation loan is only for buying a run-down property or a foreclosure, and homes that haven’t been cared for very well. However, there are many homes in good condition that are simply out of style, such as homes occupied by older folks that need some updating, that…

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Down Payment: Where Are The Funds Coming From?

One of the issues we see arise during the loan process happen while verifying down payment.  Down payment funds may come from several sources, and all of them have their own unique documentation requirements.  If the underwriter is unable to easily see where the money came from it can cause a huge headache for everybody, including you. Luckily, there are things you can do to help ensure that this part of the process is as smooth as possible.  When reviewing the bank/investment account from which the Down Payment will be coming from, the underwriter is looking over the most current 60 days in the transaction history.  Any deposits into the account, besides payroll direct deposits, will need to be explained. This makes the easiest way to avoid frustration is to have your down payment funds already in a separate account with no deposits within the past 2 months.   If this…

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What Is the Mortgage Appraisal Process?

                    Today, we are going to talk about appraisals and the mortgage appraisal process. When you go to get a mortgage, lenders approve YOU, and your specific financial situation. A lender will begin by looking at your credit, your income and your debts, the sources of your income, and the specific property you are buying or refinancing. The lender will check that the cost of the home is where you need it to be from a financial standpoint, and that it comes in at the right value by doing an appraisal. Finding an Appraiser When doing an appraisal, a qualified appraiser is brought in to appraise the value of the home. Previously, we could pick the appraisers that we brought in to do the appraisal that knew the area well. However, today there is more of a blind system: appraisers are…

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How To Get A VA Loan for 0% Down?

                    We will discuss VA Loans, which are 0% down loans for qualified military veterans. If you are a qualified military veteran, or an active duty Servicemember of the military, the U.S. Department of Veterans Affairs (VA) provides home loans with special benefits to help you become a homeowner. Special Benefits One of the best perks of being an active member or veteran of the military is the VA Loan, which requires you put down as little as 0% down for a down payment, without the requirement of mortgage insurance. Conventional mortgages require minimum down payment, where buyers have to pay a percentage of the home purchase price up front when buying a home. Other programs such as FHA loans reduce the down payment required, often lowering the minimum down payment to a lower percentage than conventional mortgages. Most loans under…

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Chicago FHA 203K – When You See Cash Offer Only on a Listing, Think FHA 203K

With all the distressed properties on the market, a good portion are inevitably going to have issues with the property condition. If you are looking in the MLS, at Realtor.com or one of the local search sites, you will find that some of these homes are marked as cash only. When you see cash only this means that the property has serious problems of one form or another, and that the seller, or the seller’s agent, doesn’t think it will pass as acceptable to get either conventional or FHA financing. This means that the overall pool of available offers for this property has shrunk down to the investors who are ready and willing to buy with all their own cash. These investors are looking for big returns and they will take on a project that needs a lot of work, but it has to be at a price where they…

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