Most home sales go through without a hitch but there is always a chance that one will hit a snag somewhere along the line. Many of these are minor irritants, some are downright disappointments.

Few of the latter compare to falling head-over-heels for a condo only to learn that the community isn’t HUD-approved so you can’t use your FHA-backed loan for the purchase.

In reality, if you’re working with the right real estate agent, this shouldn’t happen; he or she should be checking the condo complex’s approval status before even showing you the home.

When it does happen, however, it typically leaves the buyer dazed and confused. Let’s take a look at what FHA requires of condo buyers that differs from its single-family home requirements.

The basic FHA requirements

Lenders have a tough job, especially when it comes to buyers using an FHA-backed loan to purchase a condo. Not only must it determine if the borrower is a decent credit risk, but it must also take into account the risk of loaning money for a home that is governed by a homeowner association. And, regardless of your credit worthiness, if the HOA has problems, the lender and/or FHA will deny the loan.

Some HOA problems that FHA frowns upon include:

• A high number of rentals in the community. FHA rules demand that, at minimum, 50 percent of units must be occupied by the homeowner. In 2016, HUD changed the minimum to 35 percent, under certain circumstances. Learn more about those circumstances at HousingWire.
• The homeowner association fee delinquency rate must be lower than 15 percent of the budget.
• No investor/entity may own more than 50 percent of the units in the community, but only if half of the units in the community are owner occupied. So, if Warren Buffet or some random Saudi Prince decides to snatch up 52 percent of the homes in a condo community, the complex will be denied HUD approval.
• FHA will not guarantee loan repayment on a condo community that is in litigation. Once the litigation is settled (which can take years), the community can be considered for certification. Litigation examples run the gamut from the HOA suing the developer for construction defects to the famous cases of homeowners suing the HOA for the right to fly an American flag and the proper disposal of pet waste.
• The HOA’s cash reserves must be equal to or in excess of one-years’ worth of the association fees. FHA wants to see that the HOA has sufficient reserves to cover expensive repairs or replacements.

This is by no means the entire list of requirements, but represents some of those we most frequently come across. They are quite demanding – so much so that in 2013, about 60 percent of U.S. condo complexes seeking certification were denied, according to John McDermott of National Mortgage News.

Sure, it’s tedious, but the FHA process has advantages

Any home purchase requires a certain amount of due diligence. The buyer’s legal duty is to thoroughly inspect the property and the paperwork that goes with it, before going through with the purchase. Typically, the onus for this due diligence is on the buyer, but in the case of an FHA-backed loan for a condo, HUD does a lot of it for you.

Yes, you still need to read and understand every word on every document included in the HOA documents provided to you before you close on the home. While you’re trying to wrap your brain around covenants, conditions and restrictions, however, FHA will be poring over the financial solvency of the HOA. While they may just find something distasteful in these documents, knowing that they’re scrutinizing the HOA’s budget and other financials should bring you peace of mind.

Becoming HUD-certified isn’t a one-off task, either. The association must reapply every two years.

Finally, owning a home in a HUD-certified community makes it easier to sell down the line.

Avoid disappointment

If you’re toying with the idea of buying a condo with that FHA-backed loan, do yourself a favor and check out HUD’s list of certified communities. Then, avoid looking at those that aren’t on the list. You’ll find the online database, here.

This Sunday we celebrate Mother’s Day and, like many holidays, it took the work of one tireless promoter to bring Mother’s Day to life. Her name was Anna Jarvis and she was a devoted daughter, committed to finding a way to pay tribute to not only her own mother (who gave birth to 11 children), but all mothers, worldwide.

The why of it all

The idea of setting aside one day a year to honor the women of the world who gave birth to and raised us was actually her mother’s dream and it instilled in young
Anna a resolve she couldn’t shake. Jarvis frequently recalled the day her mother, a Sunday school teacher and peace activist, gave a lesson on “Mothers in the Bible,” and concluded the day’s teachings with the following prayer:

“I hope that someone, sometime will found a memorial mother’s day
commemorating her for the matchless service she renders to humanity
in every field of life. She is entitled to it.” 

Jarvis’ never forgot these words and recited them at her mother’s funeral in 1905, adding her vow that “by the grace of God,” her mother’s dream of a day to honor the contributions of all mothers – living and dead – would be realized.

A tireless campaign

Jarvis and her supporters started a letter-writing campaign to their city leaders and she used the podium in her church and other civic arenas to speak on the topic.

Her efforts were initially met with disinterest but she was not dissuaded. Finally, after enlisting the help of a Philadelphia philanthropist, John Wanamaker, Jarvis was able to breathe new life into the movement.

Two years later, her home state of West Virginia became the first to recognize a day set aside to honor mothers. Four years later, in 1914, President Woodrow Wilson signed the proclamation creating Mother’s Day, a national holiday, to be celebrated every year on the second Sunday in May.

Retail takes over

Jarvis’ mother, a woman devoted to the care of soldiers during the Civil War, was so fond of carnations that Jarvis chose the flower as the Mother’s Day symbol. White carnations were worn by those whose mother’s had passed away and red or pink carnations were worn to honor mothers who were still living.

The subsequent boost in sales led florists to take Jarvis’ ideas and run with them.
Soon after, other retailers jumped on the bandwagon and Mother’s Day became a heavily promoted holiday by retailers, urging the purchase of cards and chocolates as well as flowers.

Jarvis steps out

Anna Jarvis was appalled by the monster she created, soon becoming so irritated over the corruption of her mother’s idea and the exploitation of the sentiment that she – again, tirelessly – worked to have it rescinded. She led boycotts, threatened lawsuits and performed acts of civil disobedience, to no avail.

In 1925, Jarvis was arrested for disturbing the peace after a protest over the commercialization of Mother’s Day. Nevertheless, the never-married, never-a-mother Jarvis spent the rest of her life devoted to the repeal of Mother’s Day. To this day, Mother’s Day, as well as most of our other beloved holidays, remain hijacked by retail.

When homeowners ask how to get a home sold, there is typically more to the question. For instance, some really want to know how to get it sold quickly, some are wondering how to sell a home to get more money out of it while others have a home languishing on the market and just want to know how to get the thing sold.

There’s no mystery to getting a home sold; it all starts with basic real estate principles and practices.

Timing

It’s important to know the current trends in your local real estate market before putting your home up for sale. Is it a buyer’s market – where there are more homes available than buyers? Or is it a seller’s market, with few homes available and lots of buyers?

Your local newspaper most likely covers your regional real estate market but this is also information you can obtain by asking your real estate agent.

This information is important for several reasons:

• If you can afford to wait to sell your home, the current market may be the deciding factor as to whether you sell it now or wait.

• It helps you price your home appropriately.

• It gives you an idea of what to expect during the time the home is on the market.
Another aspect of timing the sale of your home is the season. Home sales are seasonal and the ideal time to sell the home is in spring. This doesn’t mean, however, that homes don’t sell at other times during the year, even in the dead of winter.
In fact, although fewer homes are listed and sold in winter than in spring, the likelihood that you’ll sell your home is higher in the former than in the latter.

Price

The number one reason a home sits on the market and doesn’t sell is price. To make matters worse, sellers of overpriced homes typically reject initial offers because they think they are too low, when, in reality, they are most likely close to the market value of the home.

In a buyer’s market, it’s even more important to price your home competitively. If you choose the right real estate agent, your list price should be very close to the home’s true market value. It’s up to you, then, to either lower it a bit to create more interest or to overprice the home and risk eventually having to drop the price.

Condition

It almost sounds trite in today’s real estate market to mention that a home needs to be cleaned and decluttered before putting it on the market. While the advice is common, it’s still very good. A clean home with maximum curb appeal will put your house above the competition.

Make repairs to anything that obviously needs it. This means dripping faucets, loose banisters, cracked windows – anything that a buyer will notice. These little things make it appear that the home hasn’t been maintained – something no buyer wants to take on.

We can discuss larger repairs and whether or not they should be tackled.

Realtor

Your Realtor can make or break the deal. Keep that in mind when determining who to hire to assist you in the sale of your home. This is not the time to hire that friend of a friend or your Aunt Martha.

Choose your agent carefully and then work as a team, following up with one another frequently throughout the process.

Getting your home sold requires, overall, patience. Take your time with each step in the process, ensuring that nothing falls through the cracks. Listen to the advice of your real estate agent and you’ll soon be on your way to the next phase of your life.

Once upon a time, in a sleepy little town in Minnesota, a man with big ideas and lots of vacant land decided to build a subdivision. The problem he faced was that his parcel was zoned for commercial development. City leaders, however, were more than accommodating when he asked for a zoning change on enough of the land to build 170 houses. The rest of the parcel retained the commercial zoning designation.

The subdivision was developed, homes were built and families moved in. It became one of the more in-demand neighborhoods because of the majestic and natural beauty of the heavily wooded acreage that fronted it.

Almost 30 years later, the original landowner’s son, who inherited the vacant parcel when his father died, decided to sell it and a major big-box retailer decided to purchase it. The plan is for a 24-hour, 180,000 square-foot superstore, directly across the street from the sleepy little neighborhood.

Environmental impact studies show that traffic in the area will go from 2,000 vehicles per day to a whopping 14,000. The back of the superstore will face the neighborhood. The back of the store is where huge diesel trucks make their deliveries in the middle of the night – big trucks that beep when they back up and idle while they unload.

Homeowners are upset, to say the least. Although hundreds attended each city council meeting in which the subject of the new commercial development was discussed, voicing their concerns over the noise, the traffic and the decimation of their home’s value, the city council finally granted the store’s developers their conditional use permit.

The Moral of the Story

Homes surrounded by open space are attractive to many home buyers. For these people, you just can’t put a price on the seclusion and serenity such a location offers. Vacant land near a residential area, however, should raise a red flag. After all, if it’s vacant, it’s buildable.

The only way to find out for certain if anything is planned for the vacant land is to consult with the local city government.

Zoning

A northern California real estate agent represented Jack, who owned a 5-acre ranchette that he wanted to sell. Situated on a prime piece of Wine Country real estate Jack purchased the property several years ago and paid a hefty price.

Because he didn’t bother checking the zoning in the area, Jack lost about half of the value of his home when the property fronting his was purchased by someone who then used the land to slaughter and butcher pigs.

Zoning rules also affect how you can use your own property. If you plan on operating a business out of your home, remodel the house or add structures, park a boat or RV in your driveway, or even cut down trees you will need to check your area’s zoning rules.

Check the zoning of nearby vacant land or the property you want to purchase by going to your county’s courthouse or planning department. Don’t forget to ask for the long-term plan for the area as well.

Taxes

It’s hard to think of doing a background check when you’re in love with a house, but it’s critical to do so. One of the checks that most homebuyers fail to run is the property’s tax history. Real estate taxes go up – that’s a given. But knowing how quickly and how high the taxes on the home of your dreams have moved in the past is important information.

This is especially pertinent if you’re purchasing in a new development where there is a greater need for services. Excessively high property taxes make a huge impact on your monthly payment.

Known as “tax traps” by Bankrate.com’s Marcie Geffner, they include unexpected reassessments and rate hikes, among other unanticipated surprises. She suggests that you check with the local tax assessor to determine the following:

• How the assessor calculates taxes
• If the home will be reassessed when you purchase it
• The date of the next reassessment
• Which exemptions, if any, apply

There is much to consider when purchasing a home. Don’t allow your emotions to get the best of you, do your research and that home may just turn out to be one of the best investments you’ll make.

It’s no secret that we all love our homes, and buying a new one can be an exciting investment. We put great effort into personalizing that home so that it represents who we are.

Now the big question here is; should you live in a new home before renovation or renovate it before you move in? 

Basically, if it’s lighting or plumbing repairs that you need to make the house habitable before you move, there’s no problem at all. Proceed with those minor renovations. However, if this is a big project it will require a lot of thought, planning, and resources to complete. Therefore, recommend you live in your newly acquired home for some months before knocking down its walls.

In this article, you’ll read four good reasons you should consider living in your home before you dive right into major improvements or renovations.

1. You may change your mind

You may have great ideas for the kind of improvements you would like to make on a new home as soon as you become the owner. However, until you live there for a while, it is difficult to know whether its current condition is right for you and your family.

For instance, you may have immediate plans to expand the available space by demolishing a certain wall. While these plans may seem great at the first, you may not know the benefits of that initial layout to your family without actually living in the house for a few months

Your day-to-day experiences in that new house could make you change your mind about your early ideas for major renovations. So be patient and give it a little time before you do anything major.

2. Immediate renovations can add significant stress

Buying a home is not a straightforward task. It’s a huge undertaking that can require a lot of thought, planning, and dedication. All these can be stressful. However, If you have successfully overcome all these hurdles, carrying out major renovations right away can add unforeseen stress and deny you the happiness that comes with remodeling a home.

Instead of rushing into carrying out major renovations, move in right away and start to experience life in your new home and its immediate surroundings. After you have settled in, you’ll find you’re more relaxed and focused on the task at hand.

3. Give yourself time to carefully plan

Home renovations can not be done without careful planning. No matter the size of the project, they are time-consuming and should be planned well in advance. This means contacting multiple contractors to get their take on what you really want and to give you an estimate. Once you have settled on a contractor, discuss the duration of the project and oversee it carefully with patience.

In some cases, a contractor may not know your desired wants and needs. The only true way to become familiar with these problems yourself is to become well versed with daily life in your new home.

4. Waiting allows you to save for your dream project

Waiting for at least a year before you dive into major home improvements and renovations will help you set a budget and save the required amount needed to complete the projects successfully.

The cost of major projects such as bathroom renovation, second-storey addition or kitchen renovation varies considerably depending existing parameters, scope, size, and goals. Your budget will ultimately determine the kind of renovation projects you can carry out right away and what will have to wait.

Bottom lines

While you should be open to updating a new home that doesn’t fulfill your needs, don’t feel stressed about getting all that work done right away. Move into that new house and stay there for at least six months. You may be surprised at how your priorities and decisions change once you settle in.

The bathroom is arguably one of the most important rooms in the house, and among the most frequently used. However, it is easy for homeowners to overlook this space when it’s time to renovate or update. Updating the bathroom is a worthwhile investment which not only adds value to the home but also increases the overall quality of your day to day life. If you are not sure if you really need to make a change, here are the top signs that it is time to update your bathroom.

1. The Bathroom Has Mold

If you happen to notice dark spots sprouting up in the corners, parts of the ceiling, directly above the bathtub, or shower, it’s time to update your bathroom. Keep in mind that not all leaks/drips are visible, so make sure you look for mildew and mold near the edges and corners of your shower and bathtub. Sometimes mildew and mold problems can arise from minor issues like drips, leaks, faulty pipes, or improper ventilation which can be easily fixed by doing some minor repairs. However, in case you have a serious mildew or mold problem even after you have done the minor repairs, chances are that you have a much bigger problem to deal with. Make sure you deal with that problem immediately, before it gets worse. If the water gets into your bathroom floor, it could eventually end up compromising its’ structural integrity.

2. There are Cracked, Chipped, Stained or Broken Glass in the Bathroom

As mentioned earlier, the bathroom is one of the most frequently used rooms in the house. This means that the shower tiles, sink faucets, light fixtures, and ceiling fans are all in frequent use, therefore when they start breaking down, it is time to consider updating your bathroom. If the ceiling starts crumbling, you notice discolored tile grout, the mirror is broken, or there’s cracked linoleum and tile floor, you need to consider how you can repair the damaged materials while updating your bathroom at the same time.

3. It’s No Longer Big Enough

When brushing your teeth or taking a shower, you should feel like you’ve room to move around. Many homes have a standard 8’ by 5’ bathroom; this size does not allow for a variety of layout or design options. If your family has grown and the bathroom feels somewhat cramped, it is time to consider updating the current space with new features that optimize the function and storage.

4. It’s Out of Date

Design trends come and go. If you have a pink bathtub, avocado floors, a brightly colored toilet, or gold fixtures, it might be time to update your bathroom. These are simply out of style and can greatly hurt your chances of resale. Moreover, an outdated bathroom might actually be hiding a number of unseen problems which need to be addressed. You should consider updating by using neutral colors on the bathroom walls, and then accenting with a color. Some other simple tricks can include swapping your outdated flooring, fixtures, lighting, and handles.

5. There are Leaks in Your Bathroom

Leaks are common in many bathrooms. Depending on the particular situation, a leak can be because of a minor problem that’s easy to repair or can be a major problem which has to be addressed immediately. In case the leak is a result of rust or corrosion which has been present for quite some time, it might be causing serious water damage which can weaken the structural elements of your house, and might end up costing you thousands of dollars in repairs. If you notice serious leaks, you should really consider updating your bathroom; not only will it save you on your water bill, it will prevent structural damage.

6. You are Looking to Sell Your House Soon

If you’re contemplating on selling your home in the near future, you should consider updating your bathroom. If your bathroom doesn’t look high class, you need to upgrade it. Also, if you’ve an older house, updating the bathroom is crucial. When the bathroom is updated, it can be a major selling point, and might even position your house for a much quicker sale.

According to a recent survey from bls.gov, the United States has created over 250,000 new non-farm jobs as of July, 2016. This, in effect, overshadowed the previous prediction of 180,000 that had been speculated by various economic tabloids. While to the average citizen this might sound like great economic news, that’s not necessarily the case for those eyeing fresh mortgages as the rates are now expected to skyrocket. So, does this necessarily mean that the 2016 refi window has already closed?

How Rate Markets Work

Before we even jump to conclusions, let’s address how the rate markets made their way to where they are now.

Keep in mind that individual mortgages are often packaged into separate mortgage bonds – also known as MBS ( Mortgage Backed Securities ). These bonds, in turn, impact rates on a daily basis. If you’re wondering how, then remember that bonds often pay a rate of return to the respective investors every year and that rate in question is always inverse to a specific bond price. (Bonds are often traded on a daily basis.)

So, in light of the positive economic news, more bonds will be sold, which as a consequence, makes the prices per bond drop and the rates climb higher. The opposite remains true. And this explains why the rates rose momentarily after the release of a blowout of jobs report at the beginning of August.

How the Rates are Expected to Perform in Fall 2016

From the analysis in the above paragraph, one may be tempted to believe that the chance to jump on the refinance bandwagon is long and gone. However, this couldn’t be any further from the truth! This is because rate markets are often volatile and throughout the better part of 2016 we have seen the repeated rise of refinancing opportunities albeit, with looming economic uncertainty.

Take, for instance, in January and February of this year, the Mortgage rates in the U.S dropped to their all-time lowest level in three years. According to economic gurus and analysts, this could be associated with the concern over the economic instability of other countries outside of the United States.

Later in June, around the same time when the U.K voted to exit the larger European Union, the rates dropped even lower, which confirmed the concern of non-U.S territories economic volatility.

Now, the coming months usher even more hectic and unpredictable times. There’s a presidential election and, not just one, but three Federal Reserve meetings in the not so distant future. All these will be factors that will influence the rate markets whether we choose to acknowledge them or not.

This is coming from an informed perspective that the three remaining fed policy-setting meetings that are scheduled in September, November and December have a high likelihood of introducing or raising the current bank-to-bank lending rates. Which, of course, will, in turn, have an impact on the mortgage rates and bond markets.

But before you jump the gun and blame it all on the Fed rate, consider that at times the volatility of the rate markets is affected by the bond market anticipating an impending Fed rate way of ahead of time. A good example is how last year investors dumped their bonds ahead of the annual Fed meeting in December.

Far from this, it is general knowledge that the Fed often tries to remain as politically neutral as possible. So this year, the bond market is somewhat split on trying to guess when the next hike is likely to occur. While some think it will be introduced in September, others argue that it will most likely be seen during the December 14th meeting – after the presidential elections.

So When is the Best Period To Lock a Refi Rate?

Given the unpredictability of the rate market dynamics, it is inevitable that at one time or another you will have to ask yourself this tentative question. One thing is certain, however – rate dips are always coming and going ever so quickly. Therefore, it is always a great idea to keep checking the rates regularly. Remember that as soon as the rates drop, the affected lenders tend to spring into action almost immediately.

It’s still best to inquire about the rate lock. The rate lock is simply the number of days or months when a given rate remains fixed. Normally, the long the rate lock, the higher the rate is likely to be.