Sun City Grand Real Estate & Arizona Retirement Communities

Are you purchasing a home in Phoenix?  Is the house bank-owned, does it need some TLC, or would you just like to paint, carpet and put in some new appliances?  The FHA 203k Streamline loan is the perfect solution.  Click here for a more detailed guide for specifics on how the 203k loan works. 

FHA's Streamline 203(k) mortgage program allows Phoenix homebuyers to finance up to an additional $35,000 into their mortgage, to improve or upgrade their home before they move-in.  Phoenix homebuyers can use this type of loan to pay for property repairs, such as those identified by a home inspector or FHA appraiser.  These improvements are not just limited to repairs and can also be cosmetic upgrades to the existing property.

Now that you have gone through the whole financing process and you have reached your closing date, what happens next?   Rehabilitation construction should begin within 30 days after closing, and all work must be completed within six (6) months from the closing date.

How does your General Contractor get paid?  After the closing, your loan is typically sold to a servicing company, like Bank of America.  This process normally takes 7-10 days, but is currently taking approximately 21 days.  This is due to an influx of new loans being purchased from the recent closure of various mortgage lenders.  After the loan is sold, 50 percent of the rehabilitation funds are disbursed immediately to the borrower and/or contractor.  Included with the initial disbursement is an instruction letter that explains how the final disbursement will be made upon completion and provides the necessary contact information.  The balance is disbursed upon completion of all work. If the cost of the renovation is over $15,000, an inspection by the original appraiser is required.

For borrowers working with a contractor, a W-9 must be provided to set up the contractor, and a two-party check is made out to the borrower and the contractor and sent to the borrower.  If multiple contractors are being used, 50 percent of the cost of the repairs for each contractor is disbursed up front.  For borrowers performing work themselves, a self-help agreement must be signed before the funds are disbursed. The check is then made out directly to the borrower.  A borrower is typically only allowed to perform work themselves if they have experience in that line of work.

Who handles all of the disbursements and other requirements during the rehabilitation process?  The servicing company handles all rehabilitation disbursements and project inspections.  The amount designated for repairs and improvements, including the contingency reserve, holdback, and PITI, if applicable, are deposited into an interest-bearing repair escrow account, insured by the Federal Deposit Insurance Corporation (FDIC). 

What happens if your repairs have unexpected costs?  The contingency reserve is required to cover unexpected repairs.  The reserve is usually only required if the repairs exceed $7,500 and is typically 10 percent of the total repair amount.  The contingency reserve can only be used on those changes that affect the borrowers health and safety, or is due to an increase in cost for an item of necessity.  If a change order results in a decrease in costs, the amount will be added to the contingency reserve.  Additional improvements that do not affect the health and safety, or an increase in cost due to a necessity item, must be paid for directly by the borrower and not paid out of the contingency reserve fund.  The remaining balance in the contingency fund, after all work has been completed, will be used to pay down the principal balance of your loan.

Congratulations!  It's time relax and enjoy yourself.

If you're considering purchasing a home that may need some cosmetic upgrades or repairs, please contact the David Krushinsky Team to get pre-approved. 

* These are guidelines for loans funded by W.J. Bradley Mortgage Capital Corporation and may not be the same as other lenders.  You should consult your mortgage company to see if the same rules apply.

 

What does the rise in gold prices mean for your real estate business?

You're a real estate agent.  You've survived thus far in one of the most difficult periods in the real estate industry since the word REALTOR was trademarked back in 1950.  Many of your colleagues have left the industry because they couldn't or didn't foresee the need to pare back expenses and find ways to continue to sell houses.

You're a survivor, and would have reason to be proud of that fact if only you had time to reflect.  You don't, though, because this market eats up every second of your time, and you're scrambling to stay upright while the world you knew so well is shifting beneath your feet.

What does the rise in gold prices mean for your real estate business?

You don't have time to look at the commodities market.  You're in real estate, after all.  But that shift that's taking place requires your attention.  Step back for a moment.  Look at the bigger picture.

As the Federal Reserve prints more dollars, the value of those dollars declines.  Supply and demand, just like the price of the homes you're selling.  Increased supply of homes for sale (and the supply of bank owned homes continues to flood the market) means lower prices, and for the moment, interest rates are low too.  You might be tempted to think that your business has actually hit a sweet spot. Avoid that temptation.

What does the rise in gold prices mean for your real estate business?

It means your business is about to change dramatically yet again, and perhaps sooner rather than later.

Gold futures hit a record high yesterday, briefly touching $1,049.70 an ounce.  It's expected to go higher.  And here's the takeaway: the price of gold forecasts inflation.  It runs up before the inflation hits.  In 1980, after a four year runup in the price of gold to more than $873, per ounce, inflation hit an annualized rate of nearly 15%.  I remember it well, as I was a real estate developer at the time. 

That 80's market took me bankrupt at age 41.  One year prior, I had a net worth in real estate of $4 million, with debt of $1 million.  I wasn't prepared.

Here's a list of the things I'm doing, courtesy of CrisisTimes.com, to make sure my business survives this next twelve months:

• Simple is better
• Do what you love
• Master your field
• Get out of debt
• Sell unwanted items
• Positive Attitude
• Value your time

• Put your money to work
• Market yourself
• Control spending
• Visualize your goals daily
• Budget Planner
• Debt Consolidation
• Relax and think clearly

JOIN ME!  We live in exciting times, and there's an abundance of opportunity.

___________________

I'm Mike in Tucson, your preferred Tucson, AZ Mortgage lender.

SUNSTREET MORTGAGE
Call me if I can help you or someone you know
with a purchase or refi mortgage.
(520) 349-9090

photo courtesy flickr /andrew in coins