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

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

How To Improve Your Credit

 Credit scores play a big role in determining whether you’ll qualify for a loan and what your loan terms will be. So, keep your credit score high by doing the following:

Check for errors in your credit report.
Thanks to an act of Congress, you can download one free credit report each year at annualcreditreport.com. If you find any errors, correct them immediately.

Pay down credit card bills.
If possible, pay off the entire balance every month. Transferring credit card debt from one card to another could lower your score.

Don’t charge your credit cards to the max.
Pay down as much as you can every month.

Wait 12 months after credit difficulties to apply for a mortgage.
You’re penalized less severely for problems after a year.

Don’t order items for your new home on credit.
Wait until after your home loan is approved to charge appliances and furniture, as that will add to your debt.

Don’t open new credit card accounts.
If you’re applying for a mortgage, having too much available credit can lower your score.

Shop for mortgage rates all at once.
Having too many credit applications can lower your score. However, multiple inquiries about your credit score from the same type of lender are counted as one if submitted over a short period of time.

Avoid finance companies.
Even if you pay off their loan on time, the interest is high and it may be considered a sign of poor credit management.