The Most Cost Effective Ways to Save on Heating Your Home This Winter

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Have you lost any deals due to a Home Inspection?? — Bill Nickerson’s Blog

A great read!

We hear so many times of home sales falling apart due to home inspections or some minor repair issues. Broken steps, missing railings, chipping or flaking paint and the list goes on. These are typically minor issues and can be fixed quickly and affordably. What if I told you I have the answers to your […]

via Have you lost any deals due to a Home Inspection?? — Bill Nickerson’s Blog

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Beyond Curb Appeal

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Home Buying & The Down Payment

Massachusetts Home Buying – Is the Purchase and Sale Deposit the Same as the Down Payment?
Being a Massachusetts home buyer is a bit different than buying in some other parts of the country. Here in Massachusetts we have a two part contract system. It consists of the “Offer to Purchase” and the “Purchase and Sale Agreement.”

Initially, at the offer stage it is customary to put a deposit of $500 to $1,000 along with the offerdownpaymentonhouse in order to bind the agreement.

Ten days to two weeks after the offer comes the Purchase and Sale Agreement. This is the actual complete document that will have all the terms and conditions of the sale. At Purchase and Sale signing, the buyer will put down a more substantial deposit in order for the seller to feel secure about taking the property off of the market.

The question then arises – is the Purchase and Sales deposit the same as the “down payment?”

The customary amount for the P&S deposit is equal to 5% of the purchase price you will be paying for the property. And, I would not advise putting down any more than this. There is really no reason to do so.

Unless you are in the situation with an FHA or VA loan in which you will be able to put a low down payment, 5% will not be a significant enough amount to qualify as your complete down payment. This is still merely a deposit that holds the property off of the market.

When the P&S is signed and executed, the deposit check is cashed and the funds are put into an escrow account. There they will stay there until your closing at which time this money is brought forward and applied to your purchase.

At the time of your closing you will be bringing “good funds,” usually a bank check, for the remaining amount of your down payment as well as any closing costs.

As a Massachusetts home buyer you should know – there is a definite distinction between the Purchase and Sale deposit and your down payment.

Gift Funds and Seller Concessions

Great article from Bill Nickerson

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As much as things change in the mortgage industry, many things stay the same.  If you are applying for a Home Loan with less than 20% down, did you know that you can still Free Moneyreceive gift funds from several different sources?  Did you know the seller can give up to 6% of the sales price to the buyer to be applied towards closing costs? It can never hurt to ask your family, the sellers as well as your employer when purchasing a home.

Gift Funds:

As each mortgage program comes with its own set of guidelines, Gift funds to be used towards the purchase of a home are allowed from a family member, domestic partner, borrower’s employer,  a charitable organization, governmental agency, or public entity that has a program to provide home ownership assistance to low and moderate income families or first time homebuyers. In some cases, a close friend with a clearly defined and documented interest in the borrower. A gift letter is required. Transfer of the gift funds must be documented. The file must document that the gift funds were from an acceptable source and were indeed the donor’s own funds.

Seller Contributions:

When you submit an offer to purchase a home, it is common to ask if the seller will give a credit back to be applied to closing costs.  Depending upon the specific type of mortgage product you apply for, the sellers can give up to 6% of the sales price toward actual closing costs, prepaid expenses, discount points and other financing concessions. Also included in seller contributions are interest rate buy downs and payment of Up Front Mortgage Insurance Premium (UFMIP). Each multiple offersdollar exceeding the 6% must be treated as an inducement to purchase.  In other words, if any monies are left over after paying the closing costs and pre-paid items, they must be returned to the seller.  A buyer can not walk away from the Closing table with extra funds.

I have included a printable flyer that shows you the amounts that are allowable as seller concessions to be used for closing costs.

If you have any questions about Gift Funds or Seller Concessions, feel free to call or email me anytime.  I can be reached at 978-273-3227 or email me at bill@billnickerson.com

via Gift Funds and Seller Concessions — Bill Nickerson’s Blog