Home Loans made simple.
How do I check the flood zone?
Use the FEMA flood map tool. If the home is in the blue area, it is in a flood zone.
When is flood insurance required?
Anytime a home is located in a flood zone, the lender requires flood insurance unless FEMA has issued a LOMA or LOMR-F for the property.
The seller has cheap flood insurance. Can I have their policy?
Sometimes the seller is grandfathered in on a better rate for flood insurance. If the quotes you are getting are much higher than what the seller is paying, talk with the seller's insurance agent. The seller's flood policy might be transferrable to you.
Do I need an elevation certificate to get a flood insurance quote?
If the property is in a flood zone and built on high ground, the elevation certificate could give a better rate. If the property is low, the standard rate could be better. A good insurance agent will be able to advise you if you need an elevation certificate. When purchasing a property in a flood zone, it is usually best to get an elevation certificate to see if it helps. No sense overpaying for years. Most surveyors charge $100-$450 for an elevation certificate. The best time to order an elevation certificate is with a survey. A surveyor will usually give a discount for ordering both at the same time. On a purchase transaction involving financing, the title company usually orders the survey and elevation certificate.
How do I get rid of flood insurance? LOMA or LOMR-F?
If the property is higher than the base flood elevation, then a LOMA or LOMR-F could be an option. Documentation about the property is submitted to FEMA by the homeowner or a surveyor. The application can be submitted via FEMA's online portal or by mail. The online portal is better because it is cheaper and you get status updates. The FEMA review process takes approximately 60 days. If FEMA agrees, they will issue a letter removing the property from the flood zone. With this letter, the lender will allow the flood insurance to be dropped in most cases.
How to request a LOMA or LOMR-F
Change your flood zone determination
What kind of inspections will I need to get homeowners insurance?
Older homes will need a 4 point and wind mit (wind mitigation) report. These reports are made by a home inspector. After Hurricane Ian, many insurance companies are requiring a 4 point on homes as new as 2021. When in doubt, talk with your insurance agent to see which reports are needed. The 4 point covers the electrical, plumbing, roof, and HVAC system. The wind mit covers the home's wind resistant features, such as how the roof trusses are nailed down. Once the home passes the home inspection, ask your inspector for these reports. The typical cost for a home inspection, wind mit, and 4 point is around $500.
What credit score do I need?
The minimum credit score is 550-620 depending upon the loan program. The lenders look at a variety of factors. Sometimes a credit score higher than the minimum is required. In addition to credit score, the lenders have additional requirements such as income and assets.
How do I build my credit score?
Credit cards are the best form of credit to get to build your credit score. Try to get two credit cards. If you already have more than that, keep the cards open. Closing accounts will push your score down. Each month, charge the cards up to a $50 balance. Stop at $50. When the bill comes in, pay the balance down to $13. Thirteen is a magic number. It will help maximize the number of points your credit score gets. Repeat the process each month. Over time, your credit score will improve. A small balance on a credit card is better than a big one. Don't max the card out. When making the monthly payment, try to leave a small balance on the card. A small balance, such as $13, is better than a $0 balance. Make sure you always pay at least the minimum each month. Once your credit score is high, you can start paying the card off in full each month. When you are trying to rebuild your credit, leaving a small balance each month helps to improve the credit score faster.
For your other bills, try to pay them on time. You want to avoid getting any new collections. What about medical bills? Lenders don't consider medical bills to be bonified debt. However, having a medical bill go to collections will hurt your score. A lower score can make qualifying for a mortgage more difficult. Try to pay all medical bills on time.
Should I pay off collections to improve my credit score?
Once a loan goes to collection, it hurts your credit score just as much if it has a $0 balance or a $1000 balance. If you are trying to improve your score, the best approach is usually to ignore old collections and not pay them off. If you pay them off, the creditor updates the date of activity to today, which pushes your score down. It is quite common for people to pay off collections only to see their credit scores drop. The drop is usually short lived. Three to six months later, their scores are usually back up. FYI, this isn't intended to be legal advice. If you feel you owe the money, repaying the creditor shows good character. Unfortunately, good character sometimes comes at the price of a temporarily lower credit score!
Should I dispute everything derogatory on my credit report as a way to improve my credit score?
If you win the dispute, everything is good. It can improve your score. If you lose, the tradeline gets tagged with "consumer disputes this". Depending upon the loan program, you might qualify for more house if you didn't have disputes on your credit. To remove the disputes, you will have to call the credit bureaus and ask them to remove the dispute remarks. Sounds simple, right? Wait until you experience the customer service of the credit bureaus. You may find yourself calling multiple times before the disputes are removed.
What credit card companies do you recommend?
Do a google search for "credit cards for building credit".
A lot of stores offer credit cards. These can be easier to get.
Remember: You only need 2 credit cards so don't get too crazy with signing up for new credit. I don't want to pull your credit and see a dozen new credit cards because you were "trying to build your score".
How much is the down payment on a primary home?
A common down payment is 3.5%. There are loan programs available with down payments ranging from 3-5%. In rural areas or for veterans, 0% down could be an option.
Additional lending guidelines apply.
How much is the down payment for an investment?
20% is common for a house.
25% for a 2-4 unit property.
Additional lending guidelines apply.
What are closing costs?
Closing costs are the expenses of purchasing a home. They include homeowners insurance, flood insurance, title insurance, transfer taxes, recording charges, appraisal, survey, origination fees, points, daily interest, escrow account, and prorations for property taxes. Closing costs typically range $7,000-$15,000. On a high priced home, the closing costs can be more. If you are curious about what the closing costs are on a particular property, I can run the numbers for you. When a buyer is shopping for a home, they often have me run numbers for them on multiple properties.
Can the seller pay the closing costs?
If the seller agrees to pay the closing costs, then yes. Different loan programs have caps on how much the seller can pay. When you write up the purchase offer, include the amount of closing costs you want the seller to pay. This is called a seller concession. An example is, "Seller concession to be $8,000 for buyer's closing costs and prepaids." This verbiage goes in the notes section on page 12 of the purchase contract.
How long does closing take?
30-45 days is normal.
My rental lease is up, but I'm not quite ready to buy? Now what?
Try negotiating with your landlord to be on a month-to-month rental agreement. Then, when you are ready, you can purchase and move into your new home. Sometimes landlords are willing to accept month-to-month in exchange for slightly higher rent. In Cape Coral, the summer months are slower for the rental market. If you need more time in the summer, the landlord might be more willing to accommodate you. January, February, and March is high season here. These are the toughest months to find a rental. During this time, many landlords try to lock the tenant into a 1 year lease to avoid vacancies in the summer.