Category Archives: Mortgages

From the inbox: how much should I budget for home maintenance?

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Ooh. This is a good one. The general rule of thumb is one percent of the purchase price of your home, annually. Jeff Brown, from Main St, has quite a good breakdown on what this means for you as a homeowner.

For a home price of $200,000, that’s $2,000 annually it’s recommended you plan for. You may not always spend that much but I do recommend you save it…because there will be times you do.

Last year, I had to replace my roof ($1K deductible) and repair some damage from a washer that failed ($15 part, $1K deductible).

Knock on wood and I really shouldn’t say this but this year we have been fortunate (so far) and not had any major home maintenance issues.

 

Mortgage Debt Forgiveness Act extended for 2015

If you owe more than your home is worth, there may be more options than you know.  One such option is a short sale, in which the bank agrees to allow you to sell the home for less than the mortgage balance owed.

If the home is your primary residence, you may also be exempt from paying taxes on the forgiven debt.

What does this mean?  If the lender forgives $10K in debt, the IRS may treat this as income, meaning you could owe taxes.  This Act – the Mortgage Debt Forgiveness Act – is meant to exempt you from those taxes (provided you meet the conditions, etc.).

Questions?  If you’re in Colorado, I’d love to help.  If you’re in one of our sister states, let me know and I will connect you with the local agent!

This is not legal advice.  Always consult a CPA, Attorney and local Realtor as needed!

From the inbox: Can I really buy a home for $780 up front on a VA loan?

I get variations of this question a lot! The short answer is, “Yes, in Colorado Springs and with a VA loan, it is possible (other areas, please consult your local Realtors!).”

Longer answer: there are three costs to a home buyer generally in the purchase process.

1. Earnest money: this is “good faith” money a buyer puts up to compensate the seller if they (the buyer) breaches contract for a non-protected reason.  I’ve had a lot of success w/$500 earnest money in town.  When that hasn’t worked, we try $750 or $1,000. Note: coordinate with your lender but you can often get this money back at closing.

2. Inspection costs: a home inspection costs about $280 in Colorado Springs. This is a sunk cost; even if you choose not to continue with the purchase, this isn’t reimbursable in the normal course of a purchase.

3. Appraisal: there is an appraisal cost that some lenders will charge upfront, others charge as part of the loan costs.

In sum, it is entirely possible to buy a home for an upfront cost of $780-$1280, depending on the lender and the earnest money required…and that earnest money can often come back to you.

Questions, please give me a call! If you’re looking to buy or sell in Colorado Springs or Denver, I’d be honored to earn your business.

Facebook.com/robthompsonrealtor

From the inbox: are you joking about $780 up front to buy a home?

Short answer: I have fun with but rarely joke when it comes to real estate (this is serious business!).  Nope, not joking, you can often get into a home for as little as $780 in Colorado Springs.

Longer answer: there are three costs to a home buyer generally in the purchase process.

1. Earnest money: this is “good faith” money a buyer puts up to compensate the seller if they (the buyer) breaches contract for a non-protected reason.  I’ve had a lot of success w/$500 earnest money in town.  Note: coordinate with your lender but you can often get this money back at closing.

2. Inspection costs: a home inspection costs about $280. This is a sunk cost; even if you choose not to continue with the purchase, this isn’t reimbursable in the normal course of a purchase.

3. Appraisal: there is an appraisal cost that some lenders will charge upfront, others charge as part of the loan costs.

In sum, it is entirely possible to buy a home for an upfront cost of $780-1180, depending on the lender and the earnest money required…and that earnest money can often come back to you.

Questions, please give me a call! If you’re looking to buy or sell in Colorado Springs or Denver, I’d be honored to earn your business.

Facebook.com/robthompsonrealtor

From the inbox: what does it mean to be underwater?

Good question! Short answer: underwater is an industry term meaning you owe more on a home than it will sell for.

Interesting sidenote: I cleaned foreclosures in Las Vegas on the side and saw two homes where the homeowners turned on the water taps and walked away from the home.  In both cases, it was days before someone gained access to the property to shut it off.  They wanted to make the home literally “under water.”

DON’T DO THIS.  If only for the guy that comes in later, please don’t do this.

Longer answer: in an underwater situation, one may feel there is not “out.”  This is not the case; walking away from a home is not the nuclear option people think it is.  In some cases, the bank may be able to pursue you for a deficiency judgement for years afterwards.

The better answer is often a short sale, where you sale the home for less than the amount owed but the lender consents to the sale and forgives the remaining debt.

In other cases, we may be able to work within your existing equity to make a sale happen.

Questions?  Give me a ring at 719-440-6626!

Tools: VA loan calculator?

Curious to see what a given home might look like payment wise?

Check out:  https://www.whatsmypayment.com/VA/  — it’s one of the more efficient and useful calculators I’ve found online!

From the inbox: what’s the deal with this 1.75% refinance offer I just received?

Good question!  First, this is not legal advice, always consult a licensed and insured professional before making any decisions.  However, ALWAYS read the fine print.

In this case, with mortgage rates in the 4% range at the time of this writing, a 1.75% rate seems way too good to be true.

How can they do it then?

It’s likely an ARM (Adjustable Rate Mortgage), or a mortgage that has a variable percentage rate that tracks an index.  Or, it may have a balloon payment due at the end of a certain time period (e.g., a $50K payment due in one year, five year, etc.)

If it sounds to good to be true, it may be.

Questions, don’t hesitate to ask!

VA loans rock

If you are entitled to a VA loan, you should know these are an incredible entitlement. The loan allows you to buy a home with no money down at market rates. How much home can you afford? This calculator can help you decide.

VA Loan Calculator

If you’re looking to buy or sell in the Colorado Springs area, please give Rob a call at 719-440-6626.

New regulations coming for homebuyers soon…

…looking to buy soon? It may behoove you to lock that loan in this year. Talk to your lender or give me a ring and I can give you the contact # of a good guy I know.

Looking to buy or sell in Colorado Springs? Please give me a chance to earn your business. Call Rob @ 719-440-6626!

Colorado Springs in top 35 cities to live…

According to the “Livability Index.” Personally, I think it’s #1!

Whether it’s 35th or 1st, if you’re looking to buy or sell a home in Colorado Springs, please call Rob at 719-440-6626!