Peter Tzannos - REALTY EXECUTIVES



Posted by Peter Tzannos on 2/10/2020

Photo by Vincent Rivaud from Pexels

When you buy a luxury home, you have several options when it comes to paying for the home. While some luxury buyers invest fully in the home and purchase outright, most find that opting for a mortgage of some type keeps options open and reserves capital for other things. Mortgages can be used for high end homes, but not all products are available -- or useful -- for this luxury space. Whether you are buying or selling, knowing what to expect when it comes to financing can help you strike the perfect deal. 

 Conventional Mortgages

Depending on where you live and the cost of the high end home, a conventional mortgage could be all you need. In parts of the country where a huge home in pristine condition still falls within the guidelines of a complying mortgage, this may be your best option. While it may not always work for you, exploring the conventional financing options is an ideal first step. 

Conventional loans are conforming loans – that fall within a specific set of guidelines. You can use a conventional loan for your own residence or for a vacation or investment home. Opting for this type of mortgage could result in lower costs to you (if you have at least 20% equity, you can avoid PMI). If the mortgage for your prospective home is under the limit of $453,100, then you can choose a conventional loan for your home.

That $453,100 limit is for mortgages in most areas, but a few select zip codes in the US allow for an even larger limit. In these high end locations, the limit for a conventional loan is much higher: $679,650. These limits are not the cost of the home itself, but the amount that you can borrow and still qualify for the conventional, conforming loan.

Jumbo Loans

When a conventional loan isn't quite right, or the loan amount for the home in question is over the stated conventional limits of $453 or $679K, then a jumbo loan will work best. These loans are designed for expensive, high end homes and properties and may have more stringent requirements when it comes to down payment amounts and the assets that need to remain on hand after the home purchase.

Aside from the differences in the amount of the loan, a jumbo loan works in a way that is very similar to a conventional loan. Expect to go through an underwriting process, to supply proof of income and to shop around for the best possible rates when you choose this option. 

No matter what product you choose, expect a luxury home mortgage to follow similar steps to a conventional one. Depending on the amount borrowed and the buyer's financial health, the process could take less time than a conventional one. 




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Posted by Peter Tzannos on 12/16/2019

Photo by Nattanan Kanchanaprat via Pixabay

If you’re in the market to purchase a home, it can be a confusing process. Interest rates, types of loans and what may apply to you can all sound like a foreign language. It’s always best to have some background knowledge before going to see a mortgage broker to make sure you’re on the same page. Although there are many components to the process, one of the main elements that directly affects you is the type of loan you qualify for. Here’s a quick guide:

  • Land Purchase

You may want to build a home on a specific piece of land. Most banks offer up to 85% of the price of the land for residential and investment purposes.

  • Home Purchase

These loans finance the purchase of a new residential property or home from previous owners. There are many categories: fixed-rate, adjustable-rate, conventional, jumbo, FHA, VA, USDA and bridge. Each one has elements that mortgage brokers use to determine whether you would be a good candidate for that type of loan.

  • Home Construction

If you’re looking to construct your home from the ground up, this is the type of loan you will be considered for. The loan and application process is a little different from a standard home purchase loan. If you want the loan to be included as a part of the total price of the house, the land should have been bought within a year.

  • Home Expansion/Extension

Even if you’re purchasing a home, you may decide you need to expand it. These types of loans work differently if you are purchasing the home, so working with a mortgage broker will provide more insight.

These four loan options may directly impact your decision and ability to purchase. When considering the type of loan you are seeking, you should also think about where you want to live and how long you plan to stay there. Each specific type of mortgage loan may require different amounts for a down payment, have different standards, require mortgage insurance and interest.

The type of mortgage loan and interest rate will also affect your monthly payment. A mortgage broker should be able to help choose wisely to save money in a number of areas. The most important thing to remember when searching for a home loan: they are not one size fits all. Every home loan is dependent on your current circumstances, credit rating and income level.

Everything may sound confusing right now, but you have a good foundation to work from. As your mortgage broker walks you through the process, you'll be able to identify those loans that may be mentioned without feeling like you're lost. Being educated on what's out there can also help ask the right questions. Although a mortgage broker is designed to help you get the loan you want, they also want to make money too. Working with one that appreciates your knowledge (even if limited) is key. Good luck!




Tags: Mortgage   loan   Homebuying  
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Posted by Peter Tzannos on 10/7/2019

Securing a mortgage can be quite challenging if you do not meet specific requirements and demands made by the lenders. But really, you can’t blame lenders or mortgage companies for setting up these rules. Most of these demands are made to ensure the borrower can repay a loan without too much of a problem.

Everyone has one or several bad habits that have affected them or will affect them one way or another. When it comes to securing mortgage though, some bad habits might interfere with that decision. These habits will cast a shadow over your profile, putting doubts in the mind of the lender. Bad habits like any of the ones listed below will affect your chances of securing a mortgage.

Gambling

Gambling is a terrible financial habit that could also be addictive. Betting away some of your money on rare occasions is not enough to affect your chances of securing a mortgage. Taking out credit or a short-term loan to finance your gambling habit, however, will affect your chances of obtaining a mortgage – your gambling habit might also make you default on your credit card repayment.  

Personal Debt

Having substantial private debt will most likely cast doubt on your mortgage request. Lenders would be skeptical about your ability to pay back a new loan. Before you go ahead and apply for a mortgage, pay off all outstanding debts and keep a clean savings profile.

Defaulting on payments

Having a history of defaulting on previous loan repayment will reduce your chances of getting a mortgage. Defaulting is the single worst thing you can do to yourself. Lenders would not want to provide a loan to an individual who has a bad habit of defaulting.

Exceeding Overdraft 

Another bad habit that will cast doubt in the minds of lenders is exceeding your overdraft limit. If you don’t have an arranged overdraft limit, contact your bank. If lenders go through your bank statement and find your account messed up irrespective of how much income Is in there, they would probably turn down your application for a mortgage.

Late Credit Payments 

Making a late payment on your credit card and other loans is an excellent way to dig your own grave when requesting for a mortgage. A single late payment can mess up your credit score and would remain on your credit history for as long as seven years. 

If you are guilty of any of these habits and intend to secure a mortgage, you need to have a clear record first before proceeding with your application for a loan. If you are worried about whether you will qualify for a mortgage, talk to your real estate agent about your options and use prequalification forms to determine your likely approval.





Posted by Peter Tzannos on 9/9/2019

Do you dream of buying a home? If your answer is yes, then VA home loan can make it a reality. A VA home loan differs from the traditional mortgage home loan. It is essential to know if you are eligible to apply for a VA home loan and how it can help you purchase your own home.

What is VA Home Loan?  

A VA home loan is a loan for which veterans, active-duty service members, and some surviving spouses are eligible. Generally, VA loans feature better terms than a traditional mortgage, and it is easy to qualify. For many military borrowers, the flexibility and no-down payment nature of VA Home loan have made it the most reliable lending plan in the market. You may find it interesting that from 1944 until today, VA home loans have made over 20 million service members homeowners.

VA Home Loan- Eligibility requirements

To be eligible for a VA Home Loan, a person must meet one or more of the following criteria:

- You must have served 90 straight days of active service at the time of war.

- You must have served 181 days of active service. 

- You have accumulated six or more years of service in the Reserves or National Guards.

- Your spouse, who is a service member, becomes disabled or dies during service.

How Does VA Home Loan Work?

The first step to homeownership through VA home loan is to get pre-qualified. You will need to meet up with a VA lender to help you get an estimate of the price of the home you can afford based on your credit, income, and other financial factors.

After getting pre-qualified, the next thing to do is to pre-approve your loan. This will give you the power to take action when you see a home you love. When the preapproval process is complete, you will need to hire a knowledgeable VA agent to help you place an offer and negotiate with the seller.

If you and the seller have agreed concerning the price for the house, your lender will order a VA appraisal of the home. Also, underwriters will analyze your income, finance, and related documents. Next, get ready to sign several kinds of legal documents at your loan closing. After this, you will get the keys to your new home.

Here are some of the most important things to know about a VA home loan;

- It is reusable as long as you pay off the loan every time.

- You can only use it for specific homes.

- You can use it for a primary residence.

- It does not require mortgage insurance.

- It comes with a VA funding fee.

Even if you qualify for a VA home loan, take your time to think if owning a home is right for you. Consider the maintenance, property taxes, and Home upkeep. Renting may seem cheap. Before you go for a VA home loan, consult a home loan specialist.





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Posted by Peter Tzannos on 6/17/2019

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The idea of homeownership can seem daunting if you doubt you can save up a down payment. After all, even a modest house on a conventional mortgage requires twenty percent plus the closing costs. When saving up seems out of reach, try these creative tips to grow your nest egg:

Delay gratification

A lofty word for a simple idea, delaying gratification means doing without for now so that to attain a specific goal. Nearly every budget has discretionary funds—what’s left over after paying rent, utilities, and other necessary bills. Once you’ve identified what’s left over, you get to decide how to spend it. When homeownership is the goal, some purchases become less necessary, and others can wait until you’ve attained your objective.

First, open a savings account specifically for your down payment. Consider setting it up in a credit union or a different bank from your regular financial institution so that the extra effort it takes to move it into your regular account mitigates the temptation to use it to pay bills.

Then, consider ditching these items for less expensive alternatives (or altogether) and putting the savings directly into your new account. Treat the savings as an expense, the same way you did the bill payment, or else the extra funds could just slip away:

  • Gym membership: finding a less expensive gym or utilizing a local park for workouts could save you an extra $35-50 per month.
  • Dump satellite or cable. Try to opt for less expensive online streaming alternatives or plan regular evenings with friends to share viewing your favorite shows. Depending on the plan you have, savings can really add up and more time socializing with friends is a bonus.
  • Instead of expensive meals out, plan a movie or game night at home. Invite friends and share potluck or have everyone bring ingredients to cook together.
  • Local libraries have current books, DVDs, audiobooks, and magazines so make a habit of stopping there to check them out instead of paying for your own. Many electronic media memberships have options for sharing with a friend or family member and qualifying for free books and audios.
  • Make saving a game. See who saves the most each week—you or your spouse/partner—and allow that person one small indulgence—a latte, for example, or an evening free of the children for a spa bath.

Set a price on each of these events and pay that amount into your savings account. If you don’t isolate the savings, you’ll find it harder to keep it up.

Find alternative income

You could take a second job to add to your savings or a freelance gig. Put 100 percent of what you've paid into your savings account. Other options include monetizing a hobby (if it doesn’t cost you more money than you make) to sell online or through local outlets. Perform seasonal jobs such as raking leaves, shoveling snow or washing windows.

Put all loose change in a piggy bank (or coin jar). Determine to spend only paper money, then save all the loose change. When the jar or bank is full, take the coins to the bank or a coin-counting machine. Discipline yourself to put the cash in your savings account though so it doesn't slip through your fingers.

As you near your savings goals, reach out to your real estate professional for tips on finding the perfect home in your budget.




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