Sabrina’s Money Matters

So far we’ve covered some important topics in this discussion about HUD homes, and I think we all can agree that it’s a good time to start keeping your eye on the market. There are a few more things to discuss today, primarily, how you’re going to pay for your home. Today we’re talking about paying for the home you’ve picked out, whether that’s a HUD home or not, you take similar steps. Here’s a brief review of what we’ve gone over this week…

Yesterday’s How To: Read a HUD Disclosure;
Tuesday’s How To: Find and View HUD Home Listings;
and Monday’s What Adjustable Rate Mortgages REALLY Were Designed to Do

Accessing and reading the information on the programs available through the government is a great start. For more detailis, check them out here. There are massive amounts of information there, you can even get a “fixer-upper” loan called a 203k loan that is designed to help you rehabilitate a fixer upper house.

The Federal Housing Administration has programs that help first time home buyers more than conventional loans, which may enable you to get into your first home, earlier than you thought. You may think you should pay your debt off first, so let me ask you this:

Will you ever not have debt?

Probably not so don’t let that stop you, see what you can be approved for and go from there. If you’re a first time home buyer you have advantages over those who aren’t first timers, there are down payment assistance programs, grants and special loans that are available to you, and countless other programs that I haven’t mentioned.

A centralized Frequently Asked Questions page from the FHA site could prove to be very helpful in your pursuit of a HUD home as well. This saves you time because your questions may have already been answered.

Another good place to look for financing of your house is to check with the bank that you do business with, especially if it’s affiliated with your job. Credit Unions are another place to use if you have the option, they can sometimes offer better rates than other banks.

The best piece of advice I could give you for buying a home is to ask as many questions as come to mind, you’ll want some way to record your questions to be handy. You wouldn’t believe the oddball times you think of a question and forget all about it later.

If anyone during this process at any time gives you double talk that doesn’t make sense, make them explain themselves, this is no time for misunderstandings. This is one of those kind of business deals in which you need to be fully aware of all of the details. You have to be sure you know what can, won’t, or might happen. Here’s a checklist I’ve written to kind of guide you in the steps that you should take. Understand that every person will have a different experience and this is not an end all to buying homes…this is just a collection of words of advice.

That being said:

1. Pick a house you really really like so that in a few years you don’t hate it.
2. If you buy a fixer upper, have a rough idea of what you’re going to do to the house before you buy it. (Special FHA loans are available for some of these kinds of houses);
3. Read this checklist of questions to ask a home inspector, a home inspection is not at all something that you should ever skimp on…checklist.
4. Your next step should be securing financing (explore your options fully).
5. Information about making an offer on a home can be found detailed here.
6. If you’re buying an existing home that isn’t a HUD home at auction, you may have to negotiate on the purchase price if you feel there are things that you don’t like and are worth trying to get the seller to concede to.

The site I linked to in numbers 5 and 6 contains various articles that you should read for more details on the nitty gritty over at The Deal.

Don’t let anything scare you away from owning your own home, find one you like and want and take the necessary steps to achieve that goal. You’re not getting any younger.

Share your thoughts in the comments or feel free to ask any questions you have.

Yesterday I showed you the different search options you have available to find HUD listings. Today I’m going to go through one of the disclosure statements for a HUD home, to show you the things that are known problems with the home, if any.

I found a listing here locally in Fort Worth to use for our example…not a bad looking place, it definitely has curb appeal. The price is listed at $88,000.00, it’s a 3 bedroom 2 bath house, and it was built in 2002 so the likelihood of major issues are not as high.

This house has a disclosure statement…so let’s go through that.

On the first page you’ll find the address, a photograph if there is one and the date the house was inspected.

On the second and third page is the Table of Contents:

A lot of things are covered in this report, for instance - this house needs work on the flooring, but so far that’s the only problem spotted in each subject of those listed in the Table of Contents.

Here you will see some of the other things they look at in an easy to read chart:

The great thing about all of this information being available to you so easily on the internet is you can find problems and use that information in your narrowing down process without ever talking to anyone. There are a lot of things you can do yourself to fix things you may find that are great weekend projects. This house having flooring problems is not necessarily something you should rule a house out for. You could quite possibly find a perfect house that someone just defaulted on and now it’s available to you. But don’t let simple issues like flooring detract you from an otherwise fantastic find.

Each home listed on the HUD site will have this kind of statement usually, but that does not mean that you should skip an inspection. These disclosures are not meant to tell you all the things an inspector can tell you. Right now the potential for finding a great house and getting a heck of a deal are higher than usual, this is the best time for someone without a lot of resources to do one of two things, buy their first home, or start investing in real estate. Both of these things increase your net worth and have the potential for making you a lot of money.

Here’s what I want you to do:

Check out HUD listings here.

Look through a few listings locally, and see what you can find that you may be interested in, if you have any questions, post it here and I’ll answer it this evening when I get home from work…

Happy Hunting!

Yesterday we talked about why this is the perfect time to seize a HUD opportunity, I have a few things to show you about the process, different screens within the website. This is all readily available and free on the internet, for every state in the US. For this article we’re only searching HUD home listings in Texas. Specifically, Tarrant County.

There are several different government organizations you can check out that have property for sale, but the majority of the other properties are seizures from business and miscellaneous organizations. Check out them out here. But for the purposes of this articles, we’re targeting foreclosures, so we’re just going to go for HUD. If you have the time and patience, another good thing to research for foreclosures would be banks for loans defaulted with them.

So here are a few pages you’ll see in the search. The first is a screen shot of the search parameters by county, the second of cities that have listings and the third is a screen shot of a few of the results after hitting the search button.

Now there are a few things I want to point out to you about the three listings I captured in this last shot.

The first one lists a damaged foundation in the comments, right away you have something to work with, but we all know you don’t want to deal with foundation problems. The second says the same, so we move on. The third says: Converted garage and evidence of mold not remediated (they haven’t corrected any mold if there is any) - this is on every listing. So if you don’t mind a converted garage, we move on and notice that the house is FHA Insured, a very good thing. That means you don’t have to fix anything before they’re willing to insure it, this will save you time and money.

This is just the beginning, tomorrow I’ll write about the disclosure statements you can find, you’ll need Adobe Reader to view the files yourself from HUD (so download it here if you’re looking), but I’ll be providing screen shots of the disclosure I talk about for our purposes. They’re very detailed, sometimes 20 pages plus so be sure to come back tomorrow to find out just how much you can find out about HUD homes from right where you sit.

Come back tomorrow for more or sign up for the Sabrina’s Money Matters RSS Feed so you don’t miss anything!