The Different Ways to Pay for Closing Cost

Again the key is how long will you own the home or own the loan. If you are a first time home buyer I really recommend paying your closing cost in the rate. The odds are great you will not own the property long enough to matter too much. I am a big fan of owing less money.

Here is a table that I used to explain the different scenarios in the video.

Fell free to contact me if you would like to discuss this further.

Don’t forget you can search all homes listed by Realtors by clicking on the Search Homes Tab up top.

FREQUENTLY ASKED QUESTIONS ABOUT HOME RUN 2 GRANTS

Any questions fell free to contact me. Voice or Text 801-694-4762 or Rob@Aubrey.net

As I wrote about on August 24th. Utah has committed federal stimulus money to issue another 1,950 $4,000.00 Home Run Grants. The first Home Run Grant generated $377,000,000 in Real Estate Sales. That is a lot of stimulus.

Below are FAQs for the Utah’s Home Run Grant 2

What is the $4,000 Home Run 2 Grant?

The Home Run 2 Grant is a mortgage assistance program that grants $4,000 to home buyers who wish to: (A) have a new home constructed, (B) have a partially-constructed home completed, or (C) purchase a newly-constructed home. It must be the primary residence of the home buyer. Homes that have been previously occupied do not qualify.

How is Home Run 2 different from the first Home Run program?

The first Home Run program, which ended in June 2009, provided a $6,000 grant to eligible home buyers. Home Run 2 provides a $4,000 grant. The first program required that homes be ready for occupancy upon closing. Home Run 2 buyers have two additional options. They can purchase a home that is contracted for construction or partially finished and contracted for completion. Homes that have been previously occupied do not qualify.

When a Home Run 2 Grant Commitment is issued, if the Eligible Home is fully constructed, the Commitment expires 10 calendar days after the date of issuance (unless that day falls on a weekend or holiday and then it is the following business day). If the Eligible Home is somewhere in the construction process, the Commitment expires on June 30, 2010.

All other aspects of the program are materially the same as the first Home Run program, as summarized below.

Who is eligible to receive a $4,000 Home Run 2 Grant?

Continue to the whole set of FAQs

You Can Buy A House Now or You Can Buy One Later

There is speculation that interest rates will go up. The thinking is in order to pay for the bailout it will come from 10 Yr Treasury Bonds. Without getting into all the technicalities of how the Treasury Bonds work and yada, yada, yada…  Rates should go up.

When a person applies to get a home mortgage loan the end qualifying is based on a monthly payment. Let’s assume a person’s monthly income does not increase dramatically over the next year.

Here is what a $1,500 per month payment looks like if rates go up.

The difference is a pretty big.

I found this awesome little slide show.

It compares interest rates going up versus properties going down in value.

Click here to view the embedded video.

There is no such thing as creative financing and an institutional lender. Banks are not very creative. You notice he said Co-Conspirator.

This is a really great question. I think the more you put the better.

When you are making an offer I am assuming you want to negotiate the best deal possible.

So with that said let’s look at why more EM can help you. For starters, the EM goes towards your down payment or towards your closing cost if you are doing 100% financing.

It shows how serious you are and shows you have some money. This along with good deadlines can help you get a better price as a buyer. The reality is, if you are putting down 3% or more in a total down payment, than there really is no reason, for you not to put a large EM.

Your EM is protected with the basic contingencies of the Standard Board Of Realtors Real Estate Purchase Contract-REPC (pronounced rep-see).

Those basic contingencies are Appraisal, Inspection and Loan. They all have deadlines and you can cancel the contract within those guidelines with WRITTEN NOTICE. If the contract is canceled within the parameters of the contract then the EM is returned to the buyer.

Another reason is called liquidated damages.  The default clause of the REPC Paragraph #16

DEFAULT. If Buyer defaults, Seller may elect either to retain the Earnest Money Deposit as liquidated damages, or to return it and sue Buyer to specifically enforce this Contract or pursue other remedies available at law. If Seller defaults, in addition to return of the Earnest Money Deposit, Buyer may elect either to accept from Seller a sum equal to the Earnest Money Deposit as liquidated damages, or may sue Seller to specifically enforce this Contract or pursue other remedies available at law. If Buyer elects to accept liquidated damages, Seller agrees to pay the liquidated damages to Buyer upon demand. It is agreed that denial of a Loan Application made by the Buyer is not a default and is governed by Section 2.3(b).

So a large EM benefits you as a buyer all the way through, as long as you monitor your dates and everyone in the transaction stays on task and on time, your money is not at risk.

In summary, a larger EM along with good deadlines can help you negotiate a better price and in the event the seller defaults you awarded a larger damage settlement.