Archive for May, 2011

Answers to Questions When Buying A Brooklyn Home ! Page 8

Wednesday, May 25th, 2011

Questions & Answers When Buying a Brooklyn Hme

81. HOW DOES MY CREDIT HISTORY IMPACT MY ABILITY TO QUALIFY?

The FHA is generally more flexible than conventional lenders in its qualifying guidelines. In fact, the FHA allows you to re-establish credit if:

 - two years have passed since a bankruptcy has been discharged
 - all judgments have been paid
 - any outstanding tax liens have been satisfied or appropriate arrangements have been made to establish a repayment plan with the IRS or state Department of Revenue
 - three years have passed since a foreclosure or a deed-in-lieu has been resolved

82. CAN I QUALIFY FOR AN FHA LOAN WITHOUT A CREDIT HISTORY?

Yes. If you prefer to pay debts in cash or are too young to have established credit, there are other ways to prove your eligibility. Talk to your lender for details.

83. WHAT TYPES OF CLOSING COSTS ARE ASSOCIATED WITH FHA-INSURED LOANS?

Except for the addition of an FHA mortgage insurance premium, FHA closing costs are similar to those of a conventional loan outlined in Question 63. The FHA requires a single, upfront mortgage insurance premium equal to 2.25% of the mortgage to be paid at closing (or 1.75% if you complete the HELP program- see Question 91). This initial premium may be partially refunded if the loan is paid in full during the first seven years of the loan term. After closing, you will then be responsible for an annual premium – paid monthly – if your mortgage is over 15 years or if you have a 15-year loan with an LTV greater than 90%.

84. CAN I ROLL CLOSING COSTS INTO my FHA LOAN?

No. Though you can’t roll closing costs into your FHA loan, you may be able to use the amount you pay for them to help satisfy the down payment requirement. Ask your lender for details.

85. ARE FHA LOANS ASSUMABLE?

Yes. You can assume an existing FHA-insured loan, or, if you are the one deciding to sell, allow a buyer to assume yours. Assuming a loan can be very beneficial, since the process is streamlined and less expensive compared to that for a new loan. Also, assuming a loan can often result in a lower interest rate. The application process consists basically of a credit check and no property appraisal is required. And you must demonstrate that you have enough income to support the mortgage loan. In this way, qualifying to assume a loan is similar to the qualification requirements for a new one.

86. WHAT SHOULD I DO IF I CAN’T MAKE A PAYMENT ON LOAN?

Call or, write to your lender as soon as possible. Clearly explain the situation and be prepared to provide him or her with financial information.

87. ARE THERE ANY OPTIONS IF I FALL BEHIND ON MY LOAN PAYMENTS?

Yes. Talk to your lender or a HUD-approved counseling agency for details. Listed below are a few options that may help you get back on track.

For FHA loans:

 - Keep living in your home to qualify for assistance.
 - Contact a HUD-approved housing counseling agency (1-800-569-4287 or TDD: 1-800-483-2209) and cooperate with the counselor/lender trying to help you.
 - HUD has a number of special loss mitigation programs available to help you:
 - Special Forbearance: Your lender will arrange for a revised repayment plan which may Include temporary reduction or suspension of payments; you can qualify by having an Involuntary reduction in your Income or Increase In living expenses.
 - Mortgage Modification: Allows refinance debt and/or extend the term of the your mortgage loan which may reduce your monthly payments; you can qualify if you have recovered from financial problems, but net Income Is less than before.
 - Partial Claim: Your lender maybe able to help you obtain an interest-free loan from HUD to bring your mortgage current.
 - Pre-foreclosure Sale: Allows you to sell your property and pay off your mortgage loan ,to avoid foreclosure.
 - Deed-in lieu of Foreclosure: Lets you voluntarily “give back” your property to the lender; it won’t save your house but will help you avoid the costs, time, and effort of the foreclosure process.
 - If you are having difficulty with an-uncooperative lender or feel your loan servicer is not providing you with the most effective loss mitigation options, call the FHA Loss Mitigation Center at (877) 622-8525 for additional help.

For Conventional Home  Loans:

Talk to your lender about specific loss mitigation options. Work directly with him or her to request a “workout packet.” A secondary lender, like Fannie Mae or Freddie Mac, may have purchased your loan. Your lender can follow the appropriate guidelines set by Fannie or Freddie to determine the best option for your situation.

Fannie Mae does not deal directly with the borrower. They work with the lender to determine the loss mitigation program that best fits your needs.

Freddie Mac, like Fannie Mae, will usually only work with the loan servicer. However, if you encounter problems with your lender during the loss mitigation process, you can coil customer service for help at 1-800-FREDDIE (1-800-373-3343).

In any loss mitigation situation, it is important to remember a few helpful hints:

 - Explore every reasonable alternative to avoid losing your home, but beware of scams. For example, watch out for:
Equity skimming: a buyer offers to repay the mortgage or sell the property if you sign over the deed and move out.
Phony counseling agencies: offer counseling for a fee when it is often given at no charge.
 - Don’t sign anything you don’t understand.

MORTGAGE INSURANCE

88. WHAT IS MORTGAGE INSURANCE?

Mortgage insurance is a policy that protects lenders against some or most of the losses that result from defaults on home mortgages. It’s required primarily for borrowers making a down payment of less than 20%.

89. HOW DOES MORTGAGE INSURANCE WORK? IS IT LIKE HOME OR AUTO INSURANCE?

Like home or auto insurance, mortgage insurance requires payment of a premium, is for protection against loss, and is used in the event of an emergency. If a borrower can’t repay an insured mortgage loan as agreed, the lender may foreclose on the property and file a claim with the mortgage insurer for some or most of the total losses.

90. DO I NEED MORTGAGE INSURANCE? HOW DO I GET IT?

You need mortgage insurance only if you plan to make a down payment of less than 20% of the purchase price of the home. The FHA offers several loan programs that may meet your needs. Ask your lender for details.

91. HOW CAN I RECEIVE A DISCOUNT ON THE FHA INITIAL MORTGAGE INSURANCE PREMIUM?

Ask your real estate agent or lender for information on the HELP program from the FHA. HELP – Homebuyer Education Learning Program – is structured to help people like you begin the homebuying process. It covers such topics as budgeting, finding a home, getting a loan, and home maintenance. In most cases, completion of this program may entitle you to a reduction in the initial FHA mortgage insurance premium from 2.25% to 1.75% of the purchase price of your new home.

If you would like to follow this series of questions and answers about buying your New Brooklyn Home Check it out here

If you’re looking for an experienced, energetic, resourceful  Brooklyn real estate agent or just have a few questions, give me Charles D’Alessandro your Brooklyn Realtor® with Fillmore Real Estate a call at (718) 253-9600 ext.206 or email me at [email protected]

Four Brooklyn Real Estate Mistakes Sellers Make

Wednesday, May 25th, 2011

Real Estate Mistakes When Selling your Brooklyn Home

If your home is sitting on the market month after month, or you’re only receiving ridiculously low offers, then you might be committing one of several common selling slip-ups. Some homes almost sell themselves, but if you don’t have that amazing home in the perfect location, you’ll need to be especially careful that you’re not committing one these four easily-avoidable Brooklyn real estate mistakes.

1.      Your home is priced too high. If no one’s even looking at your Brooklyn  house, it may be priced above market value. Check out the competition, and reevaluate how badly you need to sell. If you’re unwilling to drop the price to get buyers through the front door, maybe it’s not a good time for you to sell.

2.      Your house isn’t marketed well. Make sure you and your real estate agent are doing everything possible to get the word out about your home.  Include all of your home’s best assets and many flattering photos in your online marketing. With most home buyers starting their search on the Internet, if your home doesn’t look good online, they may be crossing your home off their list before giving it a chance.

3.      You hired a bad real estate agent. If your Brooklyn real estate just isn’t selling, it may be because your agent isn’t doing enough to get buyers through the door.When interviewing make sure you hire a Pro, look for a Realtor® to ensure the best.  Make sure you have detailed and open discussions with your agent from the beginning. That way you’ll each know exactly what you expect from the other.  If you’re not getting the results you want, talk with your agent and put a plan in place to reach your goals.

4.      Your Brooklyn home is in poor condition. Make sure all of the necessary fixes and repairs are done. Clean! And, remove as much clutter from your home as you can. You want potential buyers to come in and imagine themselves living there. Don’t make them want to run right back out of the door.

If you need help ensuring you’re not making a common Brooklyn real estate mistake, give me Charles D’Alessandro your Brooklyn Realtor® with Fillmore Real Estate a call at (718) 253-9600 ext.206 or email me at [email protected]

Brooklyn New York Spring 2011 Photo Contest

Sunday, May 22nd, 2011

The winner receives a $100 gift card to The Burger Bistro. Thank you to The Burger Bistro of Brooklyn New York for partnering with Charles D’Alessandro  your Brooklyn  Realtor® of Fillmore Real Estate to sponsor this photo contest. Visit The Burger Bistro’s website to see the menu and discover all the delicious food you can purchase if you win the $100 gift card. Start By Clicking Here .

Brooklyn Real Estate: Answers to Your Short Sale Questions

Friday, May 20th, 2011


There’s a lot of confusion surrounding short sales, so I thought I’d answer some of the questions I’ve received from clients, owners of Brooklyn real estate and blog readers.

Q:  What is a short sale?

A:  A short sale is when a lender agrees to accept less than what is owed on a home.  For example, you owe $300,000 on your home loan, but your lender will allow you to sell your home for $250,000.

Q:  Who makes up the difference between the short sale price and the amount owed?

A:  In the past, the owner of the Brooklyn real estate would receive a 1099 income statement at tax time.  The “forgiven amount” would then be counted as income subject to income tax.  This left homeowners in debt to the federal government for the tax owed on that amount.  Now, with the passing of the Mortgage Forgiveness Debt Relief Act and Debt Cancellation, the short fall on a primary residence is not counted as income.  This eases the financial hardship of those who are already struggling.

Q:  Does a short sale impact your credit the same way as a foreclosure?

A:  No, the impact of a short sale is milder on your credit than a foreclosure.  Short Sales usually reduce your score by about 80 to 250 points and only stay on your record for around 5 years.  Compare that to foreclosures which reduce your score approximately 250 to 400 points and remains on your record for 10 years.

Q: How do I qualify for a short sale on my Brooklyn real estate?

A:  Contact your lender as soon as you know you are in financial trouble.  Government programs, particularly the Home Affordable Foreclosure Alternatives (HAFA), are designed to make short sales more attractive to lenders by giving them incentives for allowing a short sale over a foreclosure.  However, if you allow your loan to become delinquent (more than 60 days), lenders are less likely to grant a short sale.

Q:  Can I sell my home as a FSBO and still qualify for a short sale?

A:  No.  Lenders rely on “broker opinion” as to what the home is worth at this time.  You need to hire a real estate professional that has experience with short sales.  Short sales take longer to close and properly handling the sale can make a difference in getting an offer accepted by your lender.

If you are facing the possibility of foreclosure and  looking for an experienced, energetic, resourceful  Brooklyn real estate agent , let me help you discover the options that are available to you. Give me Charles D’Alessandro your Brooklyn Realtor® with Fillmore Real Estate a call at (718) 253-9600 ext.206 or email me at [email protected]

Answers to Questions When Buying A Brooklyn Home ! Page 7

Saturday, May 14th, 2011

73. WHAT ARE THE STEPS INVOLVED IN THE FHA LOAN PROCESS?

With the exception of a few additional forms, the FHA loan application process is similar to that of a conventional loan (see Question 47). With new automation measures, FHA loans may be originated more quickly than before. And, if you don’t prefer a face-to-face meeting, you can apply for an FHA loan via mail, telephone, the Internet, or video conference.

74. HOW MUCH INCOME DO I NEED TO HAVE TO QUALIFY FOR AN FHA LOAN?

There is no minimum income requirement. But you must prove steady income for at least three years, and demonstrate that you’ve consistently paid your bills on time.

75. WHAT QUALIFIES AS AN INCOME SOURCE FOR THE FHA?

Seasonal pay, child support, retirement pension payments, unemployment compensation, VA benefits, military pay, Social Security income, alimony, and rent paid by family all qualify as income sources. Part-time pay, overtime, and bonus pay also count as long as they are steady. Special savings plans-such as those set up by a church or community association – qualify, too. Income type is not as important as income steadiness with the FHA.

76. CAN I CARRY DEBT AND STILL QUALIFY FOR FHA LOANS?

Yes. Short-term debt doesn’t count as long as it can be paid off within 10 months. And some regular expenses, like child care costs, are not considered debt. Talk to your lender or real estate agent about meeting the FHA debt-to-income ratio.

77. WHAT IS THE DEBT-TO-INCOME RATIO FOR FHA LOANS?

The FHA allows you to use 29% of your income towards housing costs and 41% towards housing expenses and other long-term debt. With a conventional loan, this qualifying ratio allows only 28% toward housing and 36% towards housing and other debt

78. CAN I EXCEED THIS RATIO?

You may qualify to exceed if you have:

 - a large down payment
 - a demonstrated ability to pay more toward your housing expenses
 - substantial cash reserves
 - net worth enough to repay the mortgage regardless of income
 - evidence of acceptable credit history or limited credit use
 - less-than-maximum mortgage terms
 - funds provided by an organization
 - a decrease in monthly housing expenses

79. HOW LARGE A DOWN PAYMENT DO I NEED WITH AN FHA LOAN?

You must have a down payment of at least 3% of the purchase price of the home. Most affordable loan programs offered by private lenders require between a 3%-5% down payment, with a minimum of 3% coming directly from the borrower’s own funds.

80. WHAT CAN I USE TO PAY THE DOWN PAYMENT AND CLOSING COSTS OF AN FHA LOAN?

Besides your own funds, you may use cash gifts or money from a private savings club. If you can do certain repairs and improvements yourself, your labor may be used as part of a down 8 payment (called -sweat equity”). If you are doing a lease purchase, paying extra rent to the seller may also be considered the same as accumulating cash.

If you would like to follow this series of questions and answers about buying your New Brooklyn Home Check it out here

If you’re looking for an experienced, energetic, resourceful  Brooklyn real estate agent or just have a few questions, give me Charles D’Alessandro your Brooklyn Realtor® with Fillmore Real Estate a call at (718) 253-9600 ext.206 or email me at [email protected]

Understanding PMI and What it Means to Your Brooklyn Home

Wednesday, May 11th, 2011

What is Private Mortgage Insurance?

Private mortgage insurance (PMI) is a term many Brooklyn home owners have heard but few understand.  Unfortunately, even more home owners have paid PMI premiums long after it was needed because they didn’t know they could cancel.

Here are answers to questions I am most frequently asked about PMI:

What is Private Mortgage Insurance (PMI)?

As its name states, PMI is insurance.  Like all insurance, it protects someone against the loss of something.  For example, car insurance protects the car owner against the loss of his car.  In this case, PMI protects lenders against the loss of their money if borrowers fail to repay their mortgage.

If you buy a house and make a down payment of less than 20%, lenders require that you pay for PMI insurance.  Let’s use an example of Jane buying a Brooklyn  home for the purchase price of $400,000.  She has $40,000 for a down payment, which is 10% of the purchase price. That means she has to pay for PMI.

What’s the cost of PMI?

PMI premiums vary depending on the mortgage insurance company you use.  Generally, they range from .5 to 1% of the amount of your home loan.  You have the option of choosing the insurance company you would like to work with, and there are many to choose from.  As with any insurance, you should shop around to find a company with which you feel comfortable.

Do all loans require PMI?

No, if you put down 20% or more of the purchase price of your Brooklyn home, you are not required to buy PMI.

I’ve made mortgage payments for 2 years why do I still need PMI?

Understanding how your loan works is very important.  The first several years of your mortgage payments go toward paying down the finance charges (interest) on your home loan.  PMI is based on the principal (the amount you actually borrowed), not including finance charges.  Because of this, it can take many years to reach the point where you’ve paid off 20% of the price of your home.

How do I know when I can stop paying for PMI?

The Homeowners Protection Act (HPA) requires lenders to inform a buyer at closing that PMI can be cancelled and at what point in the loan this will occur.  However, it is still your responsibility as the home owner to request cancellation once you qualify.  In other words, no one is going to automatically cancel your PMI when you’ve paid off 20% of the price of your home.  You must do that or you continue to pay.

What if I forget to ask to have my PMI cancelled?

If you do not ask for PMI to be cancelled, you’ll continue to pay PMI until you’ve paid off 22% of the price of your home.  Fortunately, the lender is required to automatically cancel PMI once you’ve reached the 78/22 point, which means you’ve paid off 22% and only owe 78% of the price of your home.  However, if your loan isn’t current or has more than one late payment in the past year, you still must pay for PMI.

What if I have had late mortgage payments in the past?

As long as you have had no more than two late payments in the past two years, the lender will allow you to cancel.

What if I have had more than 2 late mortgage payments?

The lender will require you to maintain PMI until your home loan reaches 77/23, at the earliest.  In some cases, the lender can require you to maintain PMI up to the halfway point in your home loan, at which time they are required by HPA to cancel.

Will I ever have to get PMI again for my Brooklyn home loan?

No.  Once PMI has reached the cancellation point and has been cancelled, the lender can’t require you to purchase additional PMI.  The only way that can change is if you refinance your current home loan.

If you’re looking for an experienced, energetic, resourceful  Brooklyn real estate agent or just have a few real estate related questions,I’m happy to help. Give me Charles D’Alessandro your Brooklyn Realtor® with Fillmore Real Estate a call at (718) 253-9600 ext.206 or email me at [email protected]

Answers to Questions When Buying A Brooklyn Home ! Page 6

Monday, May 9th, 2011

Questions & Answers When Buying a Brooklyn Home

72. WHAT IS THE FHA LOAN LIMIT?

FHA loan limits vary throughout the country, from $115,200 in low-cost areas to $208,800 in high-cost areas. The loan maximums for multi-unit homes are higher than those for single units and also vary by area.

Because these maximums are linked to the conforming loan limit and average area home prices, FHA loan limits are periodically subject to change. Ask your lender for details and confirmation of current limits.

73. WHAT ARE THE STEPS INVOLVED IN THE FHA LOAN PROCESS?

With the exception of a few additional forms, the FHA loan application process is similar to that of a conventional loan (see Question 47). With new automation measures, FHA loans may be originated more quickly than before. And, if you don’t prefer a face-to-face meeting, you can apply for an FHA loan via mail, telephone, the Internet, or video conference.

74. HOW MUCH INCOME DO I NEED TO HAVE TO QUALIFY FOR AN FHA LOAN?

There is no minimum income requirement. But you must prove steady income for at least three years, and demonstrate that you’ve consistently paid your bills on time.

75. WHAT QUALIFIES AS AN INCOME SOURCE FOR THE FHA?

Seasonal pay, child support, retirement pension payments, unemployment compensation, VA benefits, military pay, Social Security income, alimony, and rent paid by family all qualify as income sources. Part-time pay, overtime, and bonus pay also count as long as they are steady. Special savings plans-such as those set up by a church or community association – qualify, too. Income type is not as important as income steadiness with the FHA.

76. CAN I CARRY DEBT AND STILL QUALIFY FOR FHA LOANS?

Yes. Short-term debt doesn’t count as long as it can be paid off within 10 months. And some regular expenses, like child care costs, are not considered debt. Talk to your lender or real estate agent about meeting the FHA debt-to-income ratio.

77. WHAT IS THE DEBT-TO-INCOME RATIO FOR FHA LOANS?

The FHA allows you to use 29% of your income towards housing costs and 41% towards housing expenses and other long-term debt. With a conventional loan, this qualifying ratio allows only 28% toward housing and 36% towards housing and other debt

78. CAN I EXCEED THIS RATIO?

You may qualify to exceed if you have:

 - a large down payment
 - a demonstrated ability to pay more toward your housing expenses
 - substantial cash reserves
 - net worth enough to repay the mortgage regardless of income
 - evidence of acceptable credit history or limited credit use
 - less-than-maximum mortgage terms
 - funds provided by an organization
 - a decrease in monthly housing expenses

79. HOW LARGE A DOWN PAYMENT DO I NEED WITH AN FHA LOAN?

You must have a down payment of at least 3% of the purchase price of the home. Most affordable loan programs offered by private lenders require between a 3%-5% down payment, with a minimum of 3% coming directly from the borrower’s own funds.

80. WHAT CAN I USE TO PAY THE DOWN PAYMENT AND CLOSING COSTS OF AN FHA LOAN?

Besides your own funds, you may use cash gifts or money from a private savings club. If you can do certain repairs and improvements yourself, your labor may be used as part of a down 8 payment (called -sweat equity”). If you are doing a lease purchase, paying extra rent to the seller may also be considered the same as accumulating cash.

If you would like to follow this series of questions and answers about buying your New Brooklyn Home Check it out here

If you’re looking for an experienced, energetic, resourceful  Brooklyn real estate agent or just have a few questions, give me Charles D’Alessandro your Brooklyn Realtor® with Fillmore Real Estate a call at (718) 253-9600 ext.206 or email me at [email protected]

Answers to Questions When Buying A Brooklyn Home ! Page 5

Tuesday, May 3rd, 2011

64. WHAT CAN I EXPECT TO HAPPEN ON CLOSING DAY?

You’ll present your paid homeowner’s insurance policy or a binder and receipt showing that the premium has been paid. The closing agent will then list the money you owe the seller (remainder of down payment, prepaid taxes, etc.) and then the money the seller owes you (unpaid taxes and prepaid rent, if applicable). The seller will provide proofs of any inspection, warranties, etc.

Once you’re sure you understand all the documentation, you’ll sign the mortgage, agreeing that if you don’t make payments the lender is entitled to sell your property and apply the sale price against the amount you owe plus expenses. You’ll also sign a mortgage note, promising to repay the loan. The seller will give you the title to the house in the form of a signed deed.

You’ll pay the lender’s agent all closing costs and, in turn,he or she will provide you with a settlement statement of all the items for which you have paid. The deed and mortgage will then be recorded in the state Registry of Deeds, and you will be a homeowner.

65. WHAT DO I GET AT CLOSING?

 - Settlement Statement, HUD-1 Form (itemizes services provided and the fees charged; it is filled out by the closing agent and must be given to you at or before closing)
 - Truth-in-Lending Statement
 - Mortgage Note
 - Mortgage or Deed of Trust
 - Binding Sales Contract (prepared by the seller; your lawyer should review it)
 - Keys to your new home

HOW CAN HUD and the FHA HELP ME BECOME a BROOKLYN HOMEOWNER

66. WHAT IS THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT?

Also known as HUD, the U.S. Department of Housing and Urban Development was established in 1965 to develop national policies and programs to address housing needs in the U.S. One of HUD’s primary missions is to create a suitable living environment for all Americans by developing and improving the country’s communities and enforcing fair housing laws

67. HOW DOES HUD HELP HOMEBUYERS AND HOMEOWNERS?

HUD helps people by administering a variety of programs that develop and support affordable housing. Specifically, HUD plays a large role in homeownership by making loans available for lower- and moderate-income families through its FHA mortgage insurance program and its HUD Homes program. HUD owns homes in many communities throughout the U.S. and offers them for sale at attractive prices and economical terms. HUD also seeks to protect consumers through education, Fair Housing Laws, and housing rehabilitation initiatives.

68. WHAT IS THE FHA?

Now an agency within HUD, the Federal Housing Administration was established in 1934 to advance opportunities for Americans to own homes. By providing private lenders with mortgage insurance, the FHA gives them the security they need to lend to first-time buyers who might not be able to qualify for conventional loans. The FHA has helped more than 26 million Americans buy a home.

69. HOW CAN THE FHA ASSIST ME IN BUYING A HOME?

The FHA works to make homeownership a possibility for more Americans. With the FHA, you don’t need perfect credit or a high-paying job to qualify for a loan. The FHA also makes loans more accessible by requiring smaller down payments than conventional loans. In fact, an FHA down payment could be as little as a few months rent. And your monthly payments may not be much more than rent.

70. HOW IS THE FHA FUNDED?

Lender claims paid by the FHA mortgage insurance program are drawn from the Mutual Mortgage Insurance fund. This fund is made up of premiums paid by FHA-insured loan borrowers. No tax dollars are used to fund the program.

71. WHO CAN QUALIFY FOR FHA LOANS

anyone who meets the credit requirements, can afford the mortgage payments and cash investment, and who plans to use the mortgaged property as a primary residence may apply for an FHA-insured loan.

If you would like to follow this series of questions and answers about buying your New Brooklyn Home Check it out here

If you’re looking for an experienced, energetic, resourceful  Brooklyn real estate agent or just have a few questions, give me Charles D’Alessandro your Brooklyn Realtor® with Fillmore Real Estate a call at (718) 253-9600 ext.206 or email me at [email protected]