Asha Kiran

Archive for the ‘Home Appliance Financing’ Category

These days, people do not visit the conventional shops anymore to invest on electrical appliances. They have started purchasing white goods online. The number of websites that deal with the sale of electrical appliances online has increased tremendously. If you plan to purchase white goods online, then the following passages will provide an insight into the same. Even the well-professed consumers are falling prey to certain tactics that are widely employed by some spurious online vendors. If you have the appropriate knowledge regarding the same, then you will be able to avert such situations.

It is mandatory to bear in mind that you must seek out the best websites that deal with the sale of electrical appliances online. By purchasing white goods online, through these authorized platforms you are simply insuring yourself from various other fraudulent activities occurring on the internet. These authorized vendors have a reputation to uphold; the same that had taken them all these years to develop and maintain among internet users. If you are not satisfied with the white goods purchased online through them, they will issue refunds without any delay.

The reputed websites will ask the potential customer to create an account with them before commencing the trade of white goods. This is mutually beneficial to the website as well as the customer. The website administrator will be able to keep a track of the various activities happening among the accounts. Likewise, as a customer, you are given even more options to fight back (by asking for a charge back from your credit card company). Credit card companies might ask for transaction numbers and other payment details so that they can track down your transaction and refund the amount in a timely manner.

Secondly, the website will be designed keeping in mind the novice of the online users. Even though many have the capability to purchase white goods online, they simply do not opt for such activities. Since they do not get to see the product (for real), they fear that they might get cheated in the process. In order to eliminate the fears associated with these people, the website will include a “help and support” section that will address some basic queries. Advanced information for conducting the transaction, with an ample number of screenshots will also aid the amateurs to feel good and comfortable.

Here is an insider tip that is known to be highly effective – look out for the company information section. In there you will come across the history and motto of the company. The white goods will be grouped appropriately so that anyone will be able to find a product of their choice. Always stick with those online websites, who offer a variety (electrical appliances from all the reputed vendors must be highlighted and available for purchase on the website). Some of these service providers will also give away free interest free financing schemes to coax the internet users. Look out for the payment options listed on the website – the more the merrier!

The FHA 203K loan is insured by the Federal Housing Administration. Before this program came about, you are required to obtain a temporary loan for buying a home and another separate loan for home repairs. Completion of the repairs is required so you can obtain permanent financing for your improved home.

The Basics of FHA 203K Loan

The FHA 203K loan was originally designed to simplify the process of purchasing a house that needs repairs. To get the funds for repairs, you will get an amount based on the future appraised value of your home. It means that the value added to the house due to the repairs will be considered to calculate the current value. You can get as much as $35,000 financing in order to cover the necessary repair costs.

Your chosen contractors who will repair the home will be able to get the money in two draws. The first draw covers 50 percent of the work and this will be disbursed at the start of the repair. The other 50 percent will be disbursed after the repairs have been completed.

The repairs must be started within 30 days after the loan has been closed. The project should be completed within 6 months. You have to determine the final amount that should be given to the contractors before the loan closes. Therefore, you must get the necessary bids from the contractors for materials and labor costs. You can implement the repairs as long as you are a licensed and bonded contractor.

Types of Repairs Covered by FHA 203K

There are several types of home repairs and improvement that can be covered by FHA 203K loan. These include roof replacement, kitchen remodeling, plumbing and electrical work, renovations for accessibility, house painting, and appliance purchases.

Cosmetic repairs and beautifications are covered by the loan. However, luxury purchases and upgrades are not permitted. You have to take note that funds needed to repair detached structures will not be included in the loan. These structures may include sheds, gazebos, and swimming pool.

How to Qualify for FHA 203K Loan

FHA 203K and other existing FHA home loans have similar eligibility requirements. You can qualify on the basis of your credit and income. Most important of all, the property must be FHA approved.

As a rule of thumb, the monthly repayment amount must not exceed 41 percent of your regular monthly income. You must also have a minimum of 620 credit score which is required by most lenders. Eligible homes include FHA-approved condos, planned urban development homes, sand 1-4 unit houses. You can get this financing if the home has been constructed at least one year prior to application.

You can enjoy great benefits from FHA 203K loan. The loan can be used to rehabilitate your property. It is also used for renovating foreclosed homes and properties.

Vendor finance has also been called seller finance and is sometimes referred to as rent to buy, or rent and buy. There are many people out there who want to buy their own home, and cannot qualify for a bank loan. Since the Global Financial Crisis in 2008 revealed that some lenders had ‘loose’ lending policies, the banking industry has tightened lending policies and a lot of people are finding it harder to qualify for a mortgage with these large lenders.

The ‘vendor’ of a property is the technical term for the seller. Some sellers, or vendors, are open to negotiating flexible finance arrangements directly with the buyers of their house. They might agree to accept a lower deposit for example, or agree to an annual lump sum amount rather than a monthly installment payment – these arrangements are private and can be tailored very specifically to suit the needs of the individual buyer and seller involved.

The vendor, in effect, becomes the financier. They act like a bank by allowing the home buyer to pay them off in installments over time, at an agreed rate of interest. The arrangement is of course secured by written agreements on both sides and this is known as a Vendor Finance Installment Contract.The vendor is not a bank with shareholders and big balance sheets to even up, and they do not have the same restrictions on lending that a bank would. A bank’s priority is to get a good return for their shareholders, not to help someone own their own home. A vendor’s priority is to sell their house – and the buyer’s priority is to buy it.

Vendor finance has actually been around for quite a long time. It is used widely in commercial and rural property deals, and many car loans and appliance rental stores use a similar system. Using this type of financing solution to purchase a residential home used to be quite common and is now in greater demand and is proving an effective option for both the property seller and the home buyer. Vendor finance is also a viable solution when the property is not selling, because the owner of the house can finance the purchaser into the property, thereby increasing the pool of potential purchasers. Often buyers and sellers feel as though they have more control over the buying and selling process, because vendor finance contracts do not involve banks, and rarely have any need for real estate agents either. This can also keep the closing costs down.

As the nation’s real estate market continues to grow and new technology gains more ground, many widely accepted beliefs that were true just a few years ago may not be true today. Before you go after a home mortgage or home loan or any real estate financing, if you have a lot of bad credit because of consumer debt such as credit card or personal loans, try to eliminate or reduce this debt as soon as possible because it’ll affect your ability to qualify for a home mortgage and the estimated monthly payment.

Some tips to know: whether you’re financing or refinancing. most people move or refinance within a seven year period. And loan programs for down payments of 20% or less require you to purchase Private Mortgage Insurance (PMI).

If you’re going to buy a second home or second property, you’ll need to identify the source or sources of your down payment, since you won’t be selling your current house and using the proceeds, and you’ll need to expect a larger monthly payment for housing and other related expenses too.

If you have a problem getting a home mortgage and the seller still owes money on the home you can check with your lender and see if you can get a wraparound mortgage. Although it’s not legal in all states, it will allow you to pay the monthly payment on the existing mortgage and an additional payment to pay the difference; make sure that a wraparound mortgage will not trigger a due-on-sale clause ask the lender in advance.

Many people are not aware that they may be able to customize the length of their loans. Ask the mortgage broker or lender you’re working with. Although lenders usually advertise 15-year loans and 30-year fixed rate mortgages, applicants can ask for 20 years, 25 years or any other number of years that would work better. This may allow borrowers to build up their equity faster and keep their monthly payments in a range they can afford. Some lenders may impose strict limits on how much of the down payment can come from borrowing from other sources.

Some of the advantages of adjustable rate mortgages that are touted include: lower costs – because they are usually priced lower than fixed-rate mortgages so you can increase your buying power and lower your initial monthly payments then if the interest rates go down, you’ll have lower payments. However in all the years I was in the real estate business I never advised anyone to get this type of loan. With the changing market trends one can find themselves in a heap of trouble just like that. This would be a last resort loan and one would have to be sure they were not going to be unemployed in the next few years.

If you’re working with a local builder within a sub-division or housing development and you’re just making carpeting, lighting and appliance selections for a brand new home, you’ll likely be able to get a standard mortgage loan. But if you’re planning to hire the contractors, electricians, plumbers, and painters, you’ll probably need a construction loan, which provides the funds to pay the subcontractors as the work goes along.

You will want to work with your mortgage broker or lender closely to develop an individual home loan or home mortgage program based on your credit worthiness. If you have or think you have a less-than-perfect or ‘bad credit’ credit report don’t worry too much about it. When financing real estate it’s important to know that a low FICO credit score doesn’t mean you won’t qualify for a home loan or home mortgage. There is much ado about the FICO score these days but there are many instances in which it isn’t going to interfere with getting a home loan or mortgage. If you do borrow money for a down payment it must be disclosed to the lender or if any of the money for your down payment was a gift, be ready to provide proof of it.

The 20-year fixed-rate mortgages allow you to make a consistent higher monthly payment throughout all of the 20 years you have the mortgage; the shorter term means you pay the loan off quicker and therefore pay less interest and importantly, build equity faster than you would with a 30 year loan. You’ll also need to take into consideration what the closing costs will be. Ask about the escrow account for taxes and insurance.

Make sure to ask other homeowners how they’re doing and what real estate financing and home mortgage or loan pitfalls to avoid. And whatever you do don’t get yourself into a situation where you are unable to make the mortgage payments; make sure to think far ahead. Try not to get too overwhelmed with all the different home loan and mortgage choices available.

Make a list of questions and get the answers from any real estate agents, real estate brokers, mortgage lenders and any other real estate professionals you know or meet. Ask them about real estate financing, home mortgages, home loans, refinancing and current mortgage rates. Go online and get home mortgage quotes. Online quotes can often be cheaper because of the elimination of middlemen for example. And compare the quotes with other quotes you get locally to find the best rates for you.

In today’s market with so many foreclosures and short sales, many homes do not meet the minimum FHA property guidelines. This means a traditional FHA loan (203B) is not available to borrowers that may be interested in the home. However, there is another FHA program called the 203K program that allows a borrower to finance the purchase of the home along with the costs of the improvements and/or repairs to get the home up to FHA guidelines. It requires only a 3.50% downpayment based on combining the purchase price and the cost of the needed repairs. Few lenders offer this specialized program yet it is a great way for buyers to purchase a home at a great price and finance repairs such as roof replacement, HVAC replacement or repair, kitchen remodel, flooring, etc… into a single loan to keep their payments down.

Here is a real world example:

A first time homebuyer is working with a realtor to find a home. Her realtor was familiar with the FHA 203K program and searched for homes that may provide a better value for her client as she was on a strict budget. She found a listing that had been on the market for over 200 days and was listed as “Cash Only Offers.” The listing included this comment because the house needed a new roof, termite damage repairs and it was missing all of the sinks and toilets in the home. It was located in the neighborhood that client wanted to live but the homes were outside her budget. She looked at the home and was able to see the potential of the home and made an offer using FHA 203K financing. The seller accepted the offer and the buyer financed the price of home plus the costs of the repairs to get the home to FHA standards plus added an appliance package and flooring. The total cost of the home plus repairs was still less than the homes in the same market that did not need repairs yet were outside her budget. She closed on the home with her 3.50% down payment and the contractor began work. In a few short weeks, her lump of coal home was turned into her diamond. She was thrilled and loves her new home in a neighborhood she didn’t think she could afford. As an added bonus, she knows the roof, sinks, toilets, appliances and flooring are all new.

How does the 203K loan process work?

The initial application is the same as a standard FHA loan and the borrower qualification requirements are the same. The difference is just about the property. When the buyer’s home inspection is done, it is reviewed to better determine what repairs are needed to adhere to FHA standards. This gives everyone a good idea of the extent of the needed repairs. If any structural repairs are required, it will require a HUD consultant to do an inspection and write-up of the needed repairs and to monitor the project to its completion. If it is not structural (HVAC, roof, flooring, cabinets, appliances, plumbing, electrical), no HUD consultant is required as long as the repairs do not exceed $35,000.

The buyer gets bids from contractors for the required work and selects a contractor. The contractor then has to submit an application to be approved by the lender. The contractor’s accepted bid is given to the FHA appraiser and the property is appraised based on the value of the home after the repairs are complete. Another benefit of the 203K is that the combined cost of the home and repairs can go up to 110% of the appraised value. This is particularly beneficial if some of the repairs are cosmetic and may not add directly to the value but to the marketability of the home. The appraisal, contractor approval and borrower’s loan application is submitted to underwriting for approval.

Once the loan is fully approved, it goes to closing. At the time of closing, the seller is paid and the ownership is transferred to the buyer and the remaining funds are put in an escrow account for the repairs. Once the closing is complete, the contractor can begin the work based on the bid. When the work is complete, it is inspected and the contractor is paid from the escrow account.

This is a summarization of the process, but the whole idea is there is a way to purchase homes in the marketplace that are not perfect with a minimum downpayment. This benefits the buyer, seller and neighborhood.