Michael Dunn, Realtor (505) 379-5849 call or text!!! AbqDunn@gmail.com

Michael Dunn, Realtor

Coldwell Banker Legacy (505)379-5849 Call/Text ** AbqDunn@gmail.com

Buyer FAQs

What is a 1st time home buyer??

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The answer to this question is not the obvious answer that one would think. There is a lot of talk about first time buyers and the many programs that are available to them.  The definition of a first time buyer is someone who has not owned a home for the last 3 years.  They may have owned homes in the past, but haven’t within the last 3 years.  There are many programs available for first time buyers that allow them to purchase homes sometimes with as little down as $500.00.  The mortgage industry is always looking for ways to make it easier for people to buy a home and one of the ways is allowing them to have little or no money down.  In the past in order to own a home you had to have 20% down.  The most common first time buyer loan is with the Federal Housing Administration, but, there are also first time buyer loans in conventional and VA.  Stay tuned to this station for information on the different FTB loans and how you can purchase a home using them.

 

Rachel Donovan

Legacy Mortage

License # 368845
505-328-4792
rdonovan@legacymortgagenm.com
http://legacymortgagenm.com/RDonovan/

 

Don’t miss out on Fannie Mae incentives for buyers!!

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Once in a while Fannie Mae will offer incentives for buyers who purchase a Fannie Mae foreclosed home and they currently have one that is ongoing until October 31, 2011. The incentive allows for the buyer to get up to 3.5% of the purchase price to use towards the buyer’s closing costs! The home must close before October 31, 2011. Contact me for a list of Fannie Mae foreclosed homes that qualify for this incentive! 505-379-5849 call or text AbqDunn@gmail.com

Parents for kids OR kids for parents!!

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  • FHA has a loan program that the financial industry has lovingly labeled: The “Kiddie-Condo” Loan (although, they are not limited to the purchase of a condominium … it can be a standard single-family home, duplex, etc.)
  • Essentially, here are the highlights:
    1. The maximum FHA loan for Sandoval, Bernalillo, and Valencia Counties for a single family dwelling is $271,050.00. (Higher loan amounts are available for 2, 3, and 4 unit dwellings.)
    2. The min. down payment on 1 unit dwellings is approximately 3.50% of the purchase price. (You may be able to qualify & the funds are available, for the MFA program which includes 3.0% grant money in combination with this FHA loan, your actual down payment could be .50%.
    3. Parents can purchase the home and place their son or daughter in it. (The reverse can happen too. Let’s say the children have some elderly parents with a fixed income, they … the children … can qualify for the home … adding whatever income and debt that the parents have … and qualify based upon the combination thereof.)
    4. They all will be on title for FHA purposes. Different for FHA/MFA.
    5. Qualifying is based on the strength of the buyers’ and parents’ credit scores, debt to income ratios, etc.
    6. New:  The child is not required to have taxable income, however, credit must be acceptable with at least 1 credit score.  If the child is a student with no income, non traditional credit is NOT allowed.   FHA will no longer allow alternative sources of credit for borrower’s who have no credit or taxable income at all.
    7. Borrower’s must have 2 months cash reserves for total PITI monthly payment of their own funds.  No gift of reserves is allowed.
    8. This program is used many times by families who choose, while their child goes to college, to have them in a house … rather than in a dorm. Sometimes the program is used to help a young family get a head-start.
    9. During that time, everyone in the family is benefiting from home ownership and the appreciation associated with it, while not wasting money for housing for the student (if applicable).
    10. The child also benefits, as he or she is establishing a credit rating of their own.
    11. The parent benefits in as much as the normal down payment on “investment” property can be as much as 30% and the interest rate would be higher as well. This would be considered “owner-occupied” as the son or daughter is living in the home.

Please call Rachel for the details. Rules and guidelines are subject to change at all times. Be sure to follow-up with Rachel Donovan with Legacy Loan Officer for any updates.

***Rachel Donovan
Legacy Mortage
License # 368845
505-328-4792
rdonovan@legacymortgagenm.com
http://legacymortgagenm.com/RDonovan/


 

Is a 2/1 Buy Down Your Solution to Your Next Mortgage?

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Make your home ownership experience more comfortable with a 2-1 Buy Down from Legacy Mortgage.  The loan is a FIXED 30 year loan with a reduced interest rate for the first 2 years.  This program allows you a lower payment those first years leaving more cash each month for the little extras.

How the loan works.  The first year rate is 2% points below the market rate, the 2nd year rate is 1% point below, and years 3 – 30 are at the market rate from when you closed.

  • This loan starts with a lower interest rate for the first 2 years and is FIXED for the next 27 years.
  • An example is, year 1 rate would be 3.0%
  • Year 2 would be 4.0%
  • Years 3 – 30 would be 5.0%
  • The cost is 2.5% of your mortgage amount.  A $100,000.00 mortgage would cost $2500.00.
  • Buyer or seller can pay this.
  • The principle and interest payment on a $100,000 30 year fixed at 5% is $536.82.
  • The principle and interest payment on the 2-1 Buy down $100,000 loan first year at 3% is $421.60 a difference of $115.22 per month.
  • The principle and interest payment for the 2nd year at 4% is $477.42 a difference of $59.40 per month.
  • The principle and interest payment for years 3-30 is $536.82.

This loan allows you to have a reduced payment during those first few years of homeownership making the transition much more comfortable for buyers.

Call Legacy Mortgage and Rachel Donovan to get all the details on this loan as well as all other mortgage loan options.

Rachel Donovan
Legacy Mortgage
505-328-4792
rdonovan@legacymortgagenm.com
http://legacymortgagenm.com/RDonovan/

New Mexico Real Estate Contracts (Owner Financing)

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They myth that NM Real Estate contracts are illegal or the devil is just that, a myth. They are definitely not illegal and are used quite often in New Mexico. A New Mexico Real Estate contract is a legally enforceable agreement where the seller agrees to sell and the buyer agrees to buy real property in New Mexico on a deferred payment arrangement. Once the buyer performs all of the obligations per the contract he/she is entitle the the deed. The Real Estate contract does not convey Legal title but does convey equitable title. Simply put it obligates the seller to convey legal title once the buyer has fulfilled the terms outlined in the Real Estate contract.

There are no requirements on how the contract terms should be wrote. Its all up to the buyer and seller. Typically amortized over 15 or even 30 years just as would be outlined in a regular mortgage. I have seen the interest rates pretty close to the going rate for a standard mortgage on up to a few points higher than that of a regular mortgage. So, if the going interest rate for a normal mortgage is 5% you might see an owner financing rate 6-8%. Once again, this is all negotiable and up to the buyer and seller to agree upon.

The obvious reason for doing a NM Real Estate Contract is that the parties don’t want to or can’t obtain a normal mortgage. This could be for numerous different reason:

-Maybe the buyer owns too many properties, makes enough money to support another payment but does not fit the guidelines of obtaining another mortgage thru a lender?? In the investment world this happens a lot with lenders getting tighter and tigher on the criteria

-Maybe the house does not qualify for a mortgage?? Normal mortgages require an appraisal to be completed and depending on the condition of the house it may not be a home that would fit the criteria that the bank is willing to lend on. Tyically seen in home that need renovating. There are no requirements as to the appraised value or condition of the property in owner financing unless the buyer requests it.

-Maybe, just maybe, the buyer is an independent contractor or a small business owner that has a great credit score and has plenty of money for a down payment but still does not meet the quidelines to obtain a mortgage thru a lender??

Point I am trying to make here is that these are not just used because the buyer has terrible credit, no money down and probably wont make the payments. (And yes, I have heard of them referred to that way). These can be used to achieve a common goal….. to buy and sell a home

Coldwell Banker Legacy Realtors (505) 292-8900 8200 Carmel NE Ste. 103A Albuquerque, NM 87122