Lina Robertson's Blog: October 2009

Harry Reid's office just confirmed these details:

1) Sen Isakson, Dodd, Lieberman have agreed, and Senate Finance 
[Baucus and tax staff] have agreed to this credit extension and 
expansion:
2) For first time homebuyers, the income level to qualify is $ 
75,000/150,000
3) For step up buyers the income level to qualify is $ 125,000/250,000
4) For step up buyers, they must have been residing in their primary 
residence for 5 years
5) The credit is 10% of the sales price, with a maximum of $ 7290.
6) The credit runs from Dec. 1, 2009 to April 30, 2010.
7) For legitimate sales contracts as of April 30, 2010 you have 60 
days to close.
8) There is a waiver for military.
9) This will be added to the Unemployment Insurance bill. It will 
then go to the House.

If you are purchasing in a planned development, there may be a recreational facility, or one may be planned for the neighborhood. While such amenities are great, you must familiarize yourself with the facility, the management, and the documents pertaining to the facility. If the recreational package is planned but not yet constructed, find out what guarantees exist to insure construction. Builders and developers with the best of intentions sometimes get caught in adverse market conditions—such as the past two years—and find themselves short of cash. Good intentions will not construct a facility costing hundreds of thousands or even millions of dollars. Don’t base your purchase upon a wonderful facility that may never materialize. Talk to other homeowners and see if the projected date of completion has already been postponed.

 

It’s a good idea to speak to the president of the homeowner’s association if there is one is in place. Ask about repairs that may be planned or needed. Does the association have sufficient reserves to complete the work or will it be necessary to assess homeowners for needed funds. Such assessments are quite common and, in mandatory associations, participation is not optional. Associations have the power to place liens on any home where the homeowner refuses to pay and could even force the sale of a home to collect their fees.

 

Recreational facilities can be a source of pleasure and relaxation, but, improperly funded or managed, can be a financial nightmare for unsuspecting homeowners. Check out the physical and financial condition of the facility where you wish to live.

 

The Housing Guru: The one source for all your housing questions

I work with mostly first-time homebuyers who are not familiar with the process of buying a home and who may be confused about how much money they may need to be able to buy.

DOWN PAYMENT - The minimum down-payment is usually 3.5% of the purchase price.  However, this can range from as little as 0% to as much as 20% of the price depending on the type of loan.  There are some programs available that assist with down-payment.  The Down Payment on your DREAM program in PG County is an example of a down-payment assistance program for first-time home buyers purchasing a vacant foreclosure in the County.

CLOSING COSTS - Closing costs are the costs associated with purchasing the home, acquiring the mortgage, purchasing title insurance, as well as any state or city taxes involved.  These costs vary by location and depending on your mortgage arrangements but usually run between 3% and 6% of the purchase price.  Sometimes arrangements can be made to have the seller assist the buyer with some or all of the closing costs.

EARNEST MONEY DEPOSIT - This deposit is submitted with the offer.  The deposit is held in escrow and credited towards the buyer's down payment and/or closing costs.  However, this check is cashed following acceptance of the offer.  The seller may be entitled to the deposit if the buyer defaults on the contract.  This deposit is usually a minimum of 1% of the purchase price and the amount may need to be increased in competitive situations.

HOME INSPECTION - This is paid for by the buyer at the time of inspection.  The costs involved vary depending on the size and purchase price of the home but cost approximately $250-$500.

TERMITE INSPECTION - Many mortgages require a termite inspection.  This can either be billed to the closing company and paid at the settlement table or paid for up front.  The costs range from $35-$55.

OTHER INSPECTIONS - Any additional inspections that the buyer is interested in having done are paid for by the buyer.  These may include radon inspections which can cost between $125 and $200, mold inspections, well water tests, septic system evaluations, chimney inspections, and anything else the buyer is interested in investigating prior to committing to purchase the home.

APPRAISAL - A few lenders will have the appraisal paid for at closing.  However, many lenders will have the buyers pay for this up-front.  That way if something goes wrong with the contract the lender is not stuck with the cost of the appraisal.  This can vary in cost from approximately $350-$550.

 

If you are interested in learning more about purchasing a home  or for more information about the down-payment assistance programs available in Prince George's County, MD don't hesitate to contact me.

Dr. Stacey-Ann Baugh

Long & Foster Real Estate

www.staceybaugh.com

staceyannbaugh@gmail.com

240-481-3565 (C)

301-924-1100 (O)

 

I Make House-Calls!