A “Greatest Hits” List: Top Rehoboth Beach, DE Home Loan Scams
They never fail to surface once real estate activity shifts into high gear: the Rehoboth Beach, DE home loan scam operators. They seem perpetually ready to pounce on unwary would-be home buyers—notably those who are unfamiliar with the standard procedures employed by established mortgage lenders in the normal course of preparing a legitimate Rehoboth Beach, DE home loan or refinancing package.
Falling prey to an unscrupulous mortgage scam can result in anything from inadvertently divulging personal information all the way to significant monetary losses—including home title fraud that takes expensive and time-consuming legal action to correct.
One simple way to protect yourself from some of the common home loan scams is to acquaint yourself with signs that an offer probably isn’t on the up-and-up. If you see any of these bullet-pointed red flags, it’s time to find out more about who you are really dealing with—or simply to hit the exit:
The lender isn’t particularly interested in your ability to pay. A lender who proposes monthly payments that exceed 28% of your gross income fits that category.
If the phrase “bad credit doesn’t matter” appears in an operator’s advertising or communications, get rid of them.
If a lender encourages (or even hints at) “fudging” the numbers on your application, drop them. The simplest “fudge” constitutes mortgage fraud, which is a crime—and legitimate lenders don’t tolerate it.
If the cost of a loan for less than $150,000 exceeds 5%, find out why. Most home loan closing costs range between 2%-5%.
No GFE. Lenders are required to provide a Good Faith Estimate of the loan costs within three business days of receipt of your application. Failure to do so is a red flag.
If the final loan documents show closing costs that differ significantly from the GFE, check the Consumer Financial Protection Bureau’s website to judge whether the changes are legitimate. The CFPB is a government bureau that makes sure you’re being treated fairly.
- Written by Jimmie Bachand
Passage of Mammoth Rescue Plan Act: It's a Lot to Absorb
The passage of the massive American Rescue Plan Act last week gave those who plot the ebb and flow of Rehoboth Beach, DE housing activity much to ponder. Even without the Act, most observers already expected that by the end of spring, the majority of the U.S. economy would be undergoing a healthy recovery due to the escalating rollout of the COVID-19 vaccines. It was predictable that the Act's injection of trillions of dollars (including $20 billion for increased vaccine production) would add strength to the rebound.
But what would be the impact on real estate in general—and Rehoboth Beach, DE housing in particular? For Rehoboth Beach, DE sellers, the outlook couldn't help but be positive. According to website therealdeal.com, in February, U.S. sellers had been chalking up close to 100% of their asking prices (99.6%, to be precise). The pace of sales looked to be heating up as well if the Mortgage Bankers Association report of a 7% increase in weekly home loan applications was a fair indication. The MBA concluded that despite rising rates, homebuyers appeared "ready to 'spring' into action."
At least for the short run, real estate investors also seemed likely to benefit. The direct stimulus checks to individuals were sure to boost retail spending—ultimately flowing to the retailers' landlords. Additionally, consultants at Novogradac identified an Emergency Rental Assistance portion of the Act—a 21,550,000,000-dollar (those are billions!) monetary injection that will come to the aid of renters. Their landlords may be unnamed, but they are definitely part of that picture.
By the week's end, it was the size of the package that continued to draw both praise and criticism—most audibly from those worried that the downstream cost would greatly outweigh the immediate benefit. The focus was also shifting to a discussion of how rapidly the cash could realistically be injected into the economy—and whether it might overheat an already recovering economy.
- Written by Jimmie Bachand
Some Down Payment Misconceptions are Still Common
In a post published last week, a panel examined some common real estate misconceptions. Seven Forbes Real Estate Council members sought to correct misinformation they say they encounter most frequently—especially from first-time homebuyers. The errant assumptions were especially noteworthy because they deal with a pivotal element in Rehoboth Beach, DE real estate transactions: down payments.
Here are five misconceptions the panelists singled out, followed by the panelists’ corrected notions:
· A large down payment is essential. Yesterday’s predominant 20% ‘normal’ has become today’s 6% or less.
· Only the down payment is needed at closing. Other fees are due at closing.
· Down payments are not necessary. In addition to demonstrating financial strength, down payments lower monthly payments and attract better interest rates.
· Cash is always required for a down payment. Not always; other assets can be pledged (such as a stock portfolio).
· You can put down 3%-5%. Yes, but that’s not the whole story. In addition to closing costs, owning your Rehoboth Beach, DE home also involves insurance, utility, and maintenance expenditures.
There were seven misconceptions in all, including these two, whose “corrections” seem to disagree:
· “A lower down payment makes for a poor offer” was corrected with “one should not feel like their profile is less appealing just because they are taking on greater than 80% financing.”
That would be good news were it not for this:
· “There’s no need to put down more than 20%” brought this correction: “…a large down payment reduces the risk to the seller that an offer will fall out of contract due to a property not appraising at the offer value.”
In all cases, it’s good to remember that the down payment amount affects the degree of risk to the lender, not the seller. The only reason the seller might be concerned is if the offer can’t be financed because the mortgage amount (selling price minus down payment) is higher than the property’s appraisal will support.
Putting those last two in the list illustrates how even real estate professionals have different ideas about what factors a seller might use to choose the winner when multiple offers are on the table.
- Written by Jimmie Bachand
5 Hygienic Renovations for Selling Rehoboth Beach, DE Homes
Last week, area homeowners who plan on selling their Rehoboth Beach, DE homes might have discovered some promising ideas for making the most of today’s pandemic-spawned health concerns. The ideas came in a video presented by realtor.com, which introduced some newly popular renovations aimed at helping “Coronavirus-Proof” homes. Since they are designed to reduce the transmission of germs of all kinds, the tips could also spur the interest of homeowners who won’t be selling their Rehoboth Beach, DE homes anytime soon. The five ideas:
1. Replace bathroom faucets and soap dispensers with new touchless models. If you’ve ever puzzled about how to turn on a faucet to do your 20-second hand-washing without contaminating the handle with your unwashed fingers—worry no more!
2. Install smart lighting. Contact-free lighting eliminates the spread of microbes on light switches, which experts agree is a leading germ transmission source. Smart lighting systems also cut electricity usage.
3. Buy a patio heater. Get-togethers are safer outdoors, so being able to move entertaining out into the open air in chilly weather makes safer socializing possible.
4. Upgrade to a bidet. New models that “rinse and blow-dry” are environmentally friendly (and one way to put an end to toilet paper shortage angst!).
5. Consider installing a sanitizing closet. New “smart closets” are designed to create self-cleaning wardrobes by disinfecting clothing. New varieties can be equipped with ultraviolet lighting, air jets, or ozone technology. Increasingly adopted by retail clothing stores, this technology is now making the leap to the residential market.
- Written by Jimmie Bachand