Tag Archives: Loan

#TaraMTG Tuesdays: What You Must Know About Rent-To-Own Homes!

DHREA 04/12/2018

(Every Tuesday we feature a blog from one of our fantastic affiliates, Tara Mortgage Services!)

 

If you’ve browsed home sale listings, you’ve probably seen ads for “Rent-to-Own or “Lease-to-Own” homes. These agreements are similar to traditional rental contracts. However, they also give you an option to purchase the rental home.

Curious as to what renting-to-own involves or wondering if it’s a good option for you? Read on to understand the details of a rent-to-own contract and contact us for personalized mortgage advice.

The Anatomy of Rent-To-Own Contract

A rent-to-own contract usually has two parts to the agreement: a standard lease agreement as well as a separate document that outlines your option to buy. Both documents may be incorporated into one document or they exist as two separate ones.

Rent Agreement

In the rental part of the rent-to-own arrangement, it’ll state that the property will remain as the landlord property unless you choose to exercise the right to purchase the home. While this document will include language that mentions “purchasing,” this is still foundationally a rental agreement. It is not a purchase agreement. Just like any other standard lease agreement, it will include terms concerning the amount of rent to be paid, lease period, and outline the repair and maintenance responsibilities of the landlord.

Purchase Agreement

This difference is most notable in the rent that you’ll pay, as we mentioned above. You’ll still be required to make timely monthly payments, but the amount will be substantially higher than the rent of a similar property. This “extra” amount that you pay is usually put into an escrow account as part of your option to buy. It’s the landlord responsibility to set aside this additional portion of the rent aside to apply toward the principle or to refund it should you decide to purchase.

Your Rights and Obligations

Lease-to-own arrangements have unique features that differ from common lease agreements. This difference is most notable in the rent that you’ll pay, as we mentioned above. You’ll still be required to make timely monthly payments, but the amount will be substantially higher than the rent of a similar property. This “extra” amount that you pay is usually put into an escrow account as part of your option to buy. It’s the landlord responsibility to set aside this additional portion of the rent aside and apply toward the principle of the house or refund it to you upon purchase.

In a way, you’re building equity in the house during the rental period.

Maintenance is also different. Unlike a traditional lease agreement where the landlord is responsible for all repairs, in the rent-to-own contract, you’ll be responsible for the upkeep of the property. Most tenants and landlords consider it a fair agreement since, typically, the tenant will own the house eventually.

Other Details

Until your exercise your right to purchase, the property is legally owned by the landlord. Yes, even if you have made significant repairs and have invested several months of “equity,” you’ll still have to comply with the terms of the rental agreement. If any of the conditions are violated, the purchase option is voided. You’ll lose your option fee as well as the escrow percentage of the monthly rent payments.

Risks and Benefits

Many consider a rent-to-own agreement because they lack funds for the down payment, or their poor credit has made them temporarily ineligible for a mortgage (remember that poor credit can be improved!). With a rent-to-own arrangement, a tenant will be able to gradually build equity in a property while still having the possibility to opt out. However, financially, this could make the situation worse. If you choose not to exercise the right to purchase the property or fail to come up with the funds for the purchase, you could lose all of the funds you accumulated on the escrow account.

If you have poor credit or zero funds to purchase a home, you have other options other than rent-to-own contracts. Call Tara Mortgage Services for a free consultation to learn about your options!

 

 

 

Connect with nearly 600 other Real Estate professionals! Join Alex Deacon’s Real Estate Networking Workshop group on MeetUp.com today, and be the first to receive updates regarding Alex’s FREE monthly workshops!

Alex Deacon Real Estate Networking Workshops

Carnegie, PA
590 Members

Learn investing from a local expert with a vast amount of experience in the Pittsburgh market. Alex started investing in 1993. We will review hands on examples, analysis, and …

Check out this Meetup Group →

Visit our affiliates!

MACE Property Management: www.PittsburghPropertyManagement.com

Tara Mortgage Services, LLC: www.Tara-MTG.net

HDH Settlement Services, LLC: www.HDHTitle.com

Burkhead Insurance Services: Burkhead.Insure

Bin There Dump That: www.PittsburghDumpsterRental.com

 

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Avoid These Mistakes That Delay Closing Your Home Loan

DHREA 30/10/2018

(Every Tuesday we feature a blog from one of our fantastic affiliates, Tara Mortgage Services!)

 

Our goal is to get your home loan to close as quickly as possible –we know that when it comes to making an offer on your dream home, time is crucial. Did you know that you also play an essential role in making your loan close fast?

Here are the most common causes that delay home loan approval and closing:

#1: Missing Financial Details

We don’t need to know your entire financial history, but we will need to see every detail from the past two years. Don’t worry; we’ll let you know precisely what you need to provide, making sure that everything moves as quickly as possible.

#2: Leaving Out Documentation

The documentation needed for your loan may vary (and we’ll let you know what your loan calls for) but keep in mind that we’ll need the following:

  • Tax returns and W-2s from the past two years (or year-to-date financial statements for the self-employed)
  • Last month’s pay stubs
  • Two months of bank account statements
  • Copy of any transactions that exceed $1,000 Home insurance quote
  • Financial details of any other homes, businesses, or vehicles that you own
  • If anything significant pops up when we check your credit, we’ll need documentation for this as well.

#3: Mistaking Pre-Qualified For Approval

Pre-qualified requires minimal information from you. It’s a great way to get an idea of how much you can afford to buy, but it doesn’t mean that your loan is approved. Applying for a loan, getting approved for the loan, getting the underwriting approved are the additional steps that need to happen before your loan is approved and can take the step toward closing. Don’t let this discourage you! We take care of all the heavy lifting and make sure that it moves along quickly. All we need from you is to get the ball rolling by applying for a mortgage.

#4: Not Sharing Details Of The Offer With Us

When you buy a home, the purchase contract will layout certain financial milestones that we need to know about, such as by when your loan approval should be secured and how many days you have to close. If we miss any of these dates, not only will it delay your loan but it could cause you to lose the home!

#5 Making Big Changes to Your Finances or Career

Changing jobs, opening a new line of credit, making big purchases, or loaning your friend 3k to start up their business changes your financial portfolio. This means that adjustments must be made and you may not qualify for as much as you originally were quoted. The application process, essentially, needs to start over –delaying your home loan and delaying closing even more.

There are many more factors that could delay your home loan, things that are out of your control. Rest assured that we will be with you, ready for any surprises, minimizing any unnecessary delays.

Contact Tara Mortgage Services today to partner with a home loan specialist that has your best interest in mind!

 

 

ALEX DEACON’s NOVEMBER REAL ESTATE WORKSHOP HAS BEEN ANNOUNCED! CLICK BELOW FOR DETAILS, TO RSVP, AND TO CONNECT WITH NEARLY 600 REAL ESTATE PROFESSIONALS!

Virtual Bus Tour of Current and past rehabs

Saturday, Nov 10, 2018, 10:00 AM

Hampton Inn Bridgeville
150 Old Pond Rd Bridgeville, pa

20 Members Attending

We have done a few actual bus tours in the past but with the strong turnout I dont like to have to turn down folks due to the high volume of requests. Our next workshop in November we will do a virtual tour of some current and past projects and show you where to spend your money wisely and where you can and cant cut corners in order to stay profita…

Check out this Meetup →

Visit our affiliates!

MACE Property Management: www.PittsburghPropertyManagement.com

Tara Mortgage Services, LLC: www.Tara-MTG.net

HDH Settlement Services, LLC: www.HDHTitle.com

Burkhead Insurance Services: Burkhead.Insure

Bin There Dump That: www.PittsburghDumpsterRental.com

 

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#TaraMTG Tuesday: What To Expect The Day Your Home Loan Closes

DHREA 09/10/2018

(Every Tuesday we feature a blog from one of our fantastic affiliates, Tara Mortgage Services!)

“What happens on closing day and after?” That’s a question we get asked often.

On closing day, you’ll sign documents to finalize the transaction and release the funds from your home loan. You’ll also receive digital or paper copies of all the signed documents plus the keys to your new home.

It seems pretty cut and dry, and for the most part, it is! Most of the loan processing work will be complete by this point.

In the whirl of excitement that you’re moments away from becoming a homeowner, you might get confused on what’s actually going on on closing day.

Here’s a quick break down of what you can expect on the day your loan closes.

What To Expect The Day Your Home Loan Closes

There are several “parties” involved in making your loan possible, and they all play a part in your closing, too. Some of these parties include your loan officer or broker, your realtor, lawyer, underwriter, title company, seller, the seller’s realtor, and you.

Each party makes sure that all is correct and complete with your loan. The final “package” can be quite extensive which is why you’ll receive it several days before the actual closing date, giving you the time to look it over.

There are several documents that need signing. They may vary somewhat, however, for the most part, these are the documents you’ll be signing on closing day:

  • Closing Disclosure: This contains your final loan terms and details about your closing costs.

  • Mortgage Note: This is essentially a “promise” to repay the loan.

  • Mortgage or Deed of Trust: Lays out the details of what happens should you fail to repay the loan.

  • The Deed: This legally transfers ownership of the property to you.


Closing day is also when you’ll pay the closing costs and your down-payment. Remember that both of these payments should be done with a certified check, not cash or personal check. Be sure to also bring a copy of your proof of insurance (don’t worry, we’ll remind you of all of this on closing day) and that’s it!

If your possession date is the same as your closing date, you’ll receive your keys then. If your possession date is different, you’ll know about it ahead of time. It’s noted on your purchase agreement and we’ll make sure you’re clear on all the closing date details before you sign.


Post-Closing 

These are other things that’ll happen after closing. They’re not directly related to your loan but just a few things to keep in mind.

Offers in the Mail. Home sales are public record so be prepared to receive lots of mailed offers for home services, legal services, and maybe even mortgage protection insurance.

You may find some of these offers useful but research before committing. There are scammers that will send you an offer appearing as if it came from a reputable lender or other mortgage service provider.


Possible Payment Changes

Terms of your loan won’t change, that is, unless you have an adjustable-rate loan or if you refinance. However,  it may be possible for your payments to vary slightly due to changes in your escrow account.

For example, if the property taxes or insurance increases, your mortgage payments will also increase. Don’t worry about ever “overpaying.” If there are any overages in your escrow account, you’ll get a refund.


The home loan process has many moving parts right up to the very end, but we’re here to make it all clear and keep everything on track for you. You can count on Tara Mortgage Services to be your trusted resource for all your home and property financing needs.

SEATING ADDED! Alex Deacon’s RE workshop this Saturday is so popular, we’ve added extra seating to accommodate the demand! Alex is bringing in Josh Caldwell as his special guest speaker for added punch! RSVP below while seating is still available!

How to find and analyze my next RE Investment

Saturday, Oct 13, 2018, 10:00 AM

Hampton Inn Bridgeville
150 Old Pond Rd Bridgeville, pa

62 Members Attending

This is our most widely asked for workshop. We do this a few times a year and it will contain the steps you can take right now with very little experience. You can implement these steps and start using them in your day to day investment journey. We will discuss and hit on a few very important ideas on how to do the following 1. Where to look for th…

Check out this Meetup →

Visit our affiliates!

MACE Property Management: www.PittsburghPropertyManagement.com

Tara Mortgage Services, LLC: www.Tara-MTG.net

HDH Settlement Services, LLC: www.HDHTitle.com

Burkhead Insurance Services: Burkhead.Insure

Bin There Dump That: www.PittsburghDumpsterRental.com

 

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#TaraMTG Tuesdays: Little Known Factors That Affect How Much Property You Can Afford

DHREA 02/10/2018

(Every Tuesday we feature a blog from one of our fantastic affiliates, Tara Mortgage Services!)

 

Getting pre-approved for a home loan is an essential first step to knowing how much home you can buy. But did you know that the property itself also effects on how much you can afford? Here are some of the factors that determine how much you can afford to buy with your home loan.

Ways that the Type of Property Effects How Much Home You Can Afford:

How You Plan on Using the Property

Will this be your primary residence, a second home, or an investment property? Home loan options are partially affected by how you plan on using your new home. When it comes to underwriting a home loan, usage refers to occupancy, not how many properties you currently own or have owned in the past.

For example, if you want your new property to be considered a primary residence, you’ll have to show that you intend to live in the home for the most of the year (in addition to other requirements). Primary residences often qualify for the lowest minimum down payment, sometimes as low as low as 3%, depending on the loan.

If instead, you intend to live in the home for part of the year and it’s 50+ miles away from your primary residence, then it’s considered a second home. The great thing is that second homes often have similar interest rates to that of primary residences, however, you’ll need a larger down payment.

If you plan on renting out the new property, then it’s considered an investment. Investment properties are lucrative, given the right property and management, however, keep in mind that these types of properties have higher interest rates and down payment requirements than the first two options.

The Type of Property

What you end up paying for a single-family home versus a condo can vary, even when the listing prices are the same. Some home loans bump up the rate slightly with condos and townhomes. Plus, HOA fees must also be factored into your mortgage, which affects how much you approved to purchase.

Trickier still are mobile homes and non-warrantable condos. But don’t let this discourage you! There are many nuances to matching the loan to the property and purpose, but that’s what we’re here for –to take care of the details and lay it all out plainly for you.

The Property Tax Rate

Property taxes vary from area to area and may add significantly to your monthly payment. You have the option to exclude it from your mortgage payment and pay the taxes yourself every year, however, doing it in this manner does not affect how much you’ll pay. It will still be the same amount. Keep this in mind when considering how much you’re comfortable paying every month.

Local Mortgage Programs

Depending on the home’s location and your financial profile, you might qualify special loan programs that offer discounts. These discounts vary in availability and may even be determined block-by-block. So if you previously shopped around for homes and thought you couldn’t afford a particular neighborhood, it’s time to look again!

Need help figuring out if you can afford a specific home or if you qualify for a special home loan program? Call Tara Mortgage Services today! We’re the local mortgage professionals and know what it takes to get you approved for the right home loan.

 

 

RSVP to Alex Deacon’s October Real Estate Investing workshop! Seating is going fast!

How to find and analyze my next RE Investment

Saturday, Oct 13, 2018, 10:00 AM

Hampton Inn Bridgeville
150 Old Pond Rd Bridgeville, pa

27 Members Attending

This is our most widely asked for workshop. We do this a few times a year and it will contain the steps you can take right now with very little experience. You can implement these steps and start using them in your day to day investment journey. We will discuss and hit on a few very important ideas on how to do the following 1. Where to look for …

Check out this Meetup →

Visit our affiliates!

MACE Property Management: www.PittsburghPropertyManagement.com

Tara Mortgage Services, LLC: www.Tara-MTG.net

HDH Settlement Services, LLC: www.HDHTitle.com

Burkhead Insurance Services: Burkhead.Insure

Bin There Dump That: www.PittsburghDumpsterRental.com

 

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#TaraMTG Tuesday: What comes first, the sale or the purchase?

DHREA 11/09/2018

(Every Tuesday we feature a blog from one of our fantastic affiliates, Tara Mortgage Services!)

 

You may be wondering if there is a right order to buying and selling a home when you’re already a homeowner. For example, would it be better to sell first and then shop for a new home?

Or maybe it’s best to buy first then sell your current home?

This blog will help you to understand the advantages of each scenario as well as a creative alternative.

A lot has changed since the last time you applied for a home loan. Your income, your FICO score, and even how you apply for a home loan is different!

What To Consider When You Buy First:

One of the main perks of buying first is that you can take your time to shop around, similar to the way it was when you first bought your home. You can visit as many open houses as it takes to find just the right one without any pressure to rush your decision.

You can also take your time to plan the move, make any repairs or upgrades, and even move your stuff little by little instead of packing it all in one moving day. Changing your address, turning on utilities, and making changes to childcare and school can also be coordinated with ease when you buy first.

On the other hand, there may some overlap in mortgage payments if you don’t sell your current home within a month of buying your new home. If the possibility of carrying both mortgages sounds like too much of a burden then buying before selling may not be for you.

You’ll also want to consider that your income and debts affect how much you qualify for. In other words, it will be difficult to get approved for a new home loan if your income can’t support two mortgages.

What To Consider When You Sell First:

Selling your home first means that you’ll have your equity free and on hand, ready to make an offer on the next house. In a competitive market, having cash on hand is a significant advantage.

You’ll also save money by not having to pay two mortgages and utilities at the same time. It can even seem pretty wasteful to pay double when in reality you are living only one home.

While avoiding paying double would be ideal, you should know that there may be some overlap. For example, you will likely have temporary housing in an apartment while you shop for your new home. In this case, you’ll probably pay a month or so of rent plus your mortgage.

But this is still a better scenario than paying for two mortgages for an indefinite amount of time. Remember that when you buy first, you are at the mercy of other homebuyers. If instead, you’re renting, the worst that can happen is that you pay a fine for breaking the lease early.

Plus there’s also the feeling of being rushed to find a home. When you sell first and are renting an apartment, there’s a sense of urgency to buy quickly and stop “throwing money away” towards rent. 

The Homebuying-and-Selling Alternative

We’ve given you the pros and cons of both selling-first and buying-first scenarios.

Now we want to share an alternative to both: make an offer that is dependent on selling your current home.

This is called a “contingent offer.”

The main benefit is that it bridges your current home to your future home so that you avoid double mortgage payments and the need to rent an apartment.

You may be wondering what to use as a down payment if it’s tied up in the equity of your current home. A possible solution is to take a home equity line of credit (HELOC), and use it to cover the down payment while still paying the mortgage on your current home.

Whether you buy or sell first, it requires quite a bit of coordination, especially when it comes to qualifying for a new home loan. Find out the expert advice you need and learn more about your options by contacting Tara Mortgage Services today!

 

 

Alex Deacon Real Estate Networking Workshops

Carnegie, PA
510 Members

Learn investing from a local expert with a vast amount of experience in the Pittsburgh market. Alex started investing in 1993. We will review hands on examples, analysis, and …

Check out this Meetup Group →

Visit our affiliates!

MACE Property Management: www.PittsburghPropertyManagement.com

Tara Mortgage Services, LLC: www.Tara-MTG.net

HDH Settlement Services, LLC: www.HDHTitle.com

Burkhead Insurance Services: Burkhead.Insure

Bin There Dump That: www.PittsburghDumpsterRental.com

 

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#TaraMTG Tuesdays: Can You Get a Home Equity Loan After Bankruptcy?

DHREA 08/05/2018

Looking to get a home equity loan but have a bankruptcy on your credit history? It may not be as bad as you think! Actually, it may be just the thing to help your credit recover. Find out the basics of a home equity loan and see how some of our clients are using it to help them bounce back after filing bankruptcy.

Need immediate help? Contact us via phone or use our online form, and we’ll have answers for you fast.

Home Equity Loans and Bankruptcy

Bankruptcy will appear on your credit history for about ten years. However, there are circumstances where you’ll be able to get a home equity loan much sooner than that. Each case is unique, so we encourage you to contact our office to review your needs.

Two issues that often lead to defaulting on financial obligations and make it difficult to recover:

  • high-interest rate loans
  • having multiple loans

That’s why many of our clients are looking for ways to consolidate into one, low-interest rate loan, and that’s what a home equity line of credit can do for you!

If you have a bankruptcy on your credit history or are on the verge of filing, you might want to consider a home equity loan as a way to pay off multiple debts and have just one easy loan to focus on.

What is a home equity loan?

A home equity loan taps into the equity, or accumulated value, of your property. The equity is determined by an appraisal, similar to the one you had when you first purchased your home. Once approved for your equity loan, sometimes called a second mortgage, you’ll be able to use your funds to pay off any outstanding debt.

Benefits of a Home Equity Loan

Interest rates on home equity loans are generally lower than other loans or credit cards. In fact, most of our borrowers use a home equity loan to pay for other items such as college tuition or medical expenses rather than applying for credit cards or getting a personal loan.

Home equity loans have flexible terms, offering you the choice between a fixed or adjustable rate. Another benefit is that the interest paid on a home equity loan is tax-deductible! The benefits of a second mortgage after you’ve filed for bankruptcy are also excellent.

Your single monthly payment will often be lower than your current multiple debts, making it easier to stay up-to-date with your obligations. And, after a few months of on-time payments, your credit score will begin to rise, helping your credit to recover!

Getting a home equity loan after bankruptcy can be a challenge, however, don’t let that discourage you! We have the experience and dedication to get loans approved in all sorts of financial situation.

Contact Tara Mortgage Services today for help with your mortgage needs!

RSVP To Alex Deacon’s FREE May Workshop Today! Limited seating is available!

Analyze a Buy and Hold Property. Its not all about the numbers.

Saturday, May 12, 2018, 10:00 AM

Hampton Inn Bridgeville
150 Old Pond Rd Bridgeville, pa

28 Members Attending

This workshop is one of the most important sessions if you want to learn how to analyze deals for buy and hold. Its not all about the ROI. There are many other factors to consider when you have a long term strategy. We will go into detail and look at various scenarios and different property styles and types. From an A area single family property to…

Check out this Meetup →

Visit our affiliates!

MACE Property Management: www.PittsburghPropertyManagement.com

Tara Mortgage Services, LLC: www.Tara-MTG.net

HDH Settlement Services, LLC: www.HDHTitle.com

Burkhead Insurance Services: Burkhead.Insure

Bin There Dump That: www.PittsburghDumpsterRental.com

 

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