First Time Home Buyers use FHA Mortgage and Seller Paid Closing Costs to Buy Real Estate Now. Best Market Conditions for Foreclosures and Short Sales in Decades. Go To http://RealEstateMarketingThisWeek.com
Part 1 (Excerpt)
Seller paid closing costs the best deal going
Today were going to be talking about mortgage strategies, buying real estate, all the different things that you need to know from here on out through 2009, lots and lots of opportunities. We brought back once again one of the best financial planners in the entire country Mr. Brett Fallon.
We also have in the studio today a very good friend of mine Mr. Dan Havey. Dan has been in the real estate and mortgage industry for over 20 years, in fact he got me into the industry, he was instrumental, in fact the major hand behind putting together of the loan modification hotline.
Velocity Financial is a financial services firm, were primarily focused on doing mortgages for residential purchasing and refinances. One of the things that we have seen is that the purchasing market has picked up quite a bit and looks in my eyes like we very well may have hit the bottom on prices.
You can buy a 3000 square foot house for $150,000 these days, and one thing that we’ve recently found is most of the sellers are willing to pay closing costs on behalf of the buyer. Its a known fact that it’s a cold sellers market and sellers are happy to have an offer, whether it be a low offer or not.
Now I have a couple examples I want to share, it’s important to point out that I am not a realtor, I dont want to be a realtor, those people that take the time to get a license to be realtors they know what they’re doing and they do it very well, however you being the person that is going to buy a home, you need to protect every penny that you can. The example I have written down, and Brett feel free to chime in at any time if I should happen to miss something here.
I’ve put together a scenario of purchasing a $300,000 house, now if you buy a $300,000 house and you have to put 3% down as in my example that works out to be about $9000. Let’s just say that the closing costs associated with purchasing that house plus the prepaid interest, setting up an escrow account, paying a year’s worth of homeowners insurance, there is also property taxes that must be paid, home owners dues, all these different things, those can add up. They don’t need to be 3% they can be less, they can be more. This example is just making it simple so that you can understand it.
If you buy a house for $300,000 you put 3% down and 3% for closing costs, your out-of-pocket for this example is going to be about $17,500. Now if you were going to buy that home and have all of that prepaid escrow and closing costs deferred to the seller and actually paid $309,000 so that you actually roll the closing costs into the cost of the home, and only came out-of-pocket 3% you would be out-of-pocket about $8900. So the savings there is $9000. Your mortgage payment will go up, however with a payback of about 160 months. So in other words if you take the money out of your account today youre going to lose that and have a lower payment…
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- Real Estate & Mortgage Marketing 6 – Making Home Affordable Dec08 Fannie Mae Loan Mod Guidelines
- Real Estate Conditions 7 – Mortgage & First Time Home Buyer Dec08 Refinance & Interest Rates
- Real Estate Conditions 8 – Mortgage & First Time Home Buyer Dec08 30 year Fixed FHA Financing
- Real Estate Conditions 2 – Mortgage & First Time Home Buyer Dec08 Seller to pay Closing Costs
