A Great Savings Opportunity

300% return on your savings. WHAH??!! A typo? Too many zeros?


This is no joke. Utah Individual Development Account Network (UIDAN -- visit uidan.org) has a buying program that matches a buyers savings 3 to 1. The maximum amount they will shell out is $4,500. So if you save $1,500 (maximum savings) over a specified period of time, they will give you $4,500.

Unfortunately, this cannot happen instantaneously. There are some time constraints before you can get the maximum value of $4,500. The most you can deposit in the savings account per month is $62.50. This means it takes two years of using the account to get the maximum return. If a buyer saved for one year, the maximum the program would pay is $2,250 for your $750 savings ($62.50 x 12).

This program is perfect for an individual/family that is planning on buying a home down the road, maybe after finishing school or vocational training or waiting to repair your credit. While you are wating, simply save $62.50/month in this account and in two years, you'll have $6,000 (enough for the FHA required down payment for a $170,000 home).

The program is for first-time home buyers but that definition is broader than you might think. Anyone who has not owned a home in the last 3 years is considered a first-time home buyer. And since this program takes a year or two to really accumulate savings, people who may have just sold a home and don't plan on buying for a couple years, could really benefit. This is the perfect scenario for anyone who may have bad credit from a recent short-sale, foreclosure, bankruptcy etc. This is the greatest money saving vehicle while your credit is repaired.

The qualifications are as follows:

-Have less than $10,000 in total assets (one car is exempt)
-There is an income limit (you can't make a lot of money)
-You have to live in Utah
-You have to have a Social Security Number
-You have to be over 18
-Save $15 and no more than $62.50 per month
-Save in the program for a minimum of 12 and a maximum of 36 months
-Attend a personal finance and money management workshop series
-Complete asset-specific training for selected asset goal prior to purchase
-Regular contact with case manager
-Agree to address any credit issues that would inhibit you from purchasing a home
-Agree to abide by the program’s rules

To take the qualification quiz, go to:
http://www.uidan.org/quiz.aspx

The program also works for someone who wants to save for more education or for a business.

For more details on the program go to:
http://www.uidan.org/

Seven Steps to Home Ownership

I was recently invited to be the real estate agent keynote speaker at a home buying seminar at the University of Utah alongside my loan officer colleague, Nelson Barss. During the seminar, I was really impressed by the eagerness of people to buy a home. There seems to be an inherent desire in all people to own land and a home of their own.

I thought I would share the presentation. The following information from my presentation will be helpful if you are thinking of buying a home for the first time or if you are going into round 2 or 3 of homeownership. Who couldn't benefit from an occasional homebuying 101 refresher course?

Seven Steps to Home Ownership
Based of a Keller Williams Model

1. Decide to buy
2. Hire a Real Estate Agent
3. Secure Financing
4. Find Your Home
5. Make An Offer
6. Perform Due Diligence
7. Close & Move In


1. Decide to buy
When to buy?.... When can you afford?

Utah Starter Home:
List price: $150,000
Loan: $150,000
Credit Score: ~700 /Rate: 4.3%

$756 - Principle & Interest
$125 - Property Tax
$25 - Homeowners Insurance
$138 - Mortgage Insurance
Payment: $1,043/month

…$150,000 Home, Payment: $1,043/month

Median Salary
*UofU Grad Starting Median Salary: Yearly: $44,200
*according to Payscale.com, 2011-2012 payscale report

Monthly Income: $3,683
$1,043 payment is 28% of Your income

…$150,000 Home, $1,043 house payment is 28% of income

Debt Limits
Debt Limit for Borrower = 50%
Wise Debt Limit = 40% of Income

40% of $3,683 is $1,473
$1,473 for debts - $1,043 for house
$430 remains for other debt


2. Hire a Real Estate Agent
Who? Why? How Much $?


Who?
The buyer is the Hiring boss:
Hire someone with at least 2 years full-time experience
Many agents are part-timers with little experience or availability

Why? An agent is:
Market Analyst – Ensure you don’t overpay
Liaison – Lender, Title, Inspector, Contractor
Contract Specialist – Buying a house = Contracts
Negotiator – Knowledge of what’s negotiable
Trained Eye – Mold, Meth, Shingles, Appliances
Knowledge – Short sales, Foreclosures, etc.
Secretary – Scheduling, Research
Finder – Full-time hunter of homes

How Much $?
A buyer pays: $0.00 Zero
Seller’s Pay Commissions
Listing agent & buyer agent split the contracted percentage %
Commissions are not added to price
Prices cannot be higher than appraisal


3. Secure Financing


Loan Officer - Crucial:
Preapproves your loan (required for offer on home)
Helps determine your best mortgage option
Submits Purchase Contract to Underwriter
Gets appraisal & title commitment
Obtains funding for closing






4. Find Your Home
The Fun Part




Location Location Location
Wishlist: Analyze Values Needs & Wants

Establish a “Hotsheet” with your agent
Your agent will set up auto-emails of homes that match your specifications

Multiple Listing Service or “MLS”
www.utahrealestate.com Give your agent MLS listing #’s of houses you’re interested in and let your agent schedule multiple appointments


5. Make An Offer
The Nervous Part

Price—offer must reflect true market value of the home
Terms—address timing and financial considerations & what's included
Contingencies—“conditions” that allow you to opt out
Seller Concessions— common in a “Buyers Market” — Seller may pay closing costs (saving a buyer thousands)

Real Estate Purchase Contract (REPC)
Purchase Contract Approved by the State
Ensures you are protected as a buyer if drafted properly




6. Perform Due Diligence
Courting the Home


Property inspection - structural or hidden issues
Hire a home inspector
Cracks or crumbling in the foundation
Cracks inside the house over windows
Water stains in ceilings, floors, or walls
Faded or worn shingles
Mold or Meth issues


7. Close & Move in

Pre-closing responsibilities include:
Appraisal, title search, and title insurance.
Keeping yourself mortgage worthy!
Doing a final walk-through of home.
Countdown to closing includes:
Getting your settlement statement, certified funds, evidence of insurance, and transfer of clear title.