Conventional – Waiting Period after Bankruptcy

FHA – Waiting Period after Bankruptcy

VA – Financing Waiting Period after Bankruptcy

I like to give credit when credit is due…
This great information was provided to me by:
Robert OBoyle
Branch Manager
13011 S 104th Ave Ste 204
Palos Park, IL 60464
Office: (708) 827-8001
Email: Robert.OBoyle@AcademyMortgage.com

Until the next time,

Mark Killion
Kale Realty
542 W. Roosevelt Rd
Chicago, IL 60607

Send me a note!

Visit me online: www.773property.com

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As you might know, most condo buildings and associations
are NOT approved for FHA financing. So, it can be challenging
to find condos in Chicago that will qualify for FHA
financing.

Of course, you can visit the HUD website to find out which
buildings are approved for FHA. But, the website does not
tell you which condos are currently on the market For Sale.

The biggest advantage of using FHA financing is that you only have
to put down 3 1/2 % of the purchase price for a down payment.
Most conventional programs require at least 10% down.
That is a big difference!

Also, it is usually easier to qualify for a FHA loan because
it has a lower credit score requirement than a conventional loan.
Most banks only require 620 to 640 credit scores for a FHA loan.
But, conventional loans usually require 680 or better.

And last, but not least, conventional loans have stricter rules
regarding debt ratios. So if you are like most Americans and
you have a car note, student loan, and credit card debt, you
will probably qualify for a larger loan if you go with FHA.

Shopping for a condo can be tricky. I have a lot of experience with
real estate sales. I would be happy to represent you as a buyer’s agent.
The cost to you is absolutely nothing!

So, if you are looking for a FHA Approved Condo, please Send me a note!
with your name and price range.

Until the next time,

Mark Killion
Kale Realty
542 W. Roosevelt Rd
Chicago, IL 60607

Send me a note!

Visit me online: www.773property.com

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Newport Condos - Kenwood Chicago

Financing a condo can be tricky.
Here are some important questions to ask the listing
broker BEFORE you submit an offer on a condo:

1. How many units in the building are rented out?
Most lenders require that at least 51% of the units be owner occupied.
So if there are a lot of rentals in the building, it will be hard to finance.

2. Are there rental restrictions?
Many associations are starting to restrict rentals. So if you are planning
on buying a condo as an investment property, be sure to check if rentals
are allowed in the building. If there are restrictions, you might be required
to complete an owner-occupant addendum which states that you intend to use
the property as your primary residence.

3. How much does the association have in reserves?
It is important that the association have adequate funds in reserve to
pay for future repairs. If the association is underfunded, lenders will
be hesitant to finance a condo there. Also, if the association is underfunded,
they are likely to hit you with a special assessment in the near future.

4. What special assessments have been mandated in the past five years?
Occasional special assessments are often unavoidable. But frequent special
assessments probably indicate that the property is being mismanaged, or the association is
underfunded.

5. Is the condo building in litigation?
If the association is facing a pending court case, or is currently in litigation,
start looking for another condo to buy.

6. Are more than 10% of the units owned by a single entity?
If several units are owned by the same person, the lender will view this as
being risky. For instance, if a developer hits hard times, multiple units can
go into foreclosure simultaneously. The property value of the remaining condos
in the building will probably decrease significantly as a result.

7) Have there been any recent sales in this building? And did they involve financing?
If a condo has been sold in the last 6 months, and it was financed,
then you are probably in good shape. If all the recent transactions were
cash deals, then this might indicate that the building didn’t qualify
for financing.

8) Do you have FHA financing?
Most condos and condo buildings will not qualify for FHA financing.
I estimate that for every 100 condos on the market, only 5 of them will
qualify for FHA financing.
So if you are shopping for a condo, you should line up conventional financing
instead of FHA financing.

Conventional financing will require higher credit scores and a higher down payment.
Most lenders would like you to have at least a 680 credit score and a 10%
down payment to go with it.

9) How many units are behind on their assessments?
If several owners are behind on their assessments, this could be a red flag.
If the owners are not paying their assessments, they are probably in financial
distress. It will only be a matter of time before they stop paying their
mortgage. If several owners are behind on their assessments, most lenders will
not finance a condo in the building.

10) How many short-sales and foreclosures are on the market in this building?
If there are other condos in this building on the market, are they distressed sales?
If so, it could mean trouble. Lenders only want to finance condos in stable buildings.
If more than a couple of units are in some stage of foreclosure, then you should probably
find a condo somewhere else.

As you can see, financing a condo can be tricky. It is now more important than ever
to work with an experienced real estate agent that understands the complexity of condo financing.
Otherwise, you may waste a lot of time viewing condos that won’t qualify for financing.

Until the next time,

Mark Killion
RE/MAX Premier Properties
1205 N Dearborn
Chicago, IL 60610

Send me a note!

Visit me online: www.773property.com

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After 5 straight quarters of declining U.S. foreclosures,
the number of default notices rose in the 3rd quarter of 2011.
This could be a sign that things will be getting worse before they
start to get better.

I believe the foreclosure process slowed down late last year due
to the “robo-signing” scandal. That was the scandal where it was
discovered that banks were foreclosing on homeowners without reading
all of the facts.

Now that banks have a process in place to deal with foreclosures, I would
expect the number of foreclosures to continue to rise in the short term.

Here in Illinois, there was a spike in Bank Owned Properties (aka REO).
The number of REO sales in Illinois was up 27% in the 3rd quarter.
Other states that had increased REO sales included Georgia (42%)
and Massachusetts (62%).

The entire foreclosure process in Illinois still takes about a year to complete.
In some cases, it can take a lot longer.

When will it end?

Well, it appears that this real estate slump or market correction will
continue for several years. The slump is already close to its 5th Birthday.
It looks like this financial malaise will drag on for another few years.
As long as the unemployment rate remains historically high, I think
the real estate market will remain flat until 2015.

Also, it is estimated that 1 out of every 3 homeowners is underwater.
“Underwater” is a nice way of saying that an owner owes more than the
home is worth. For example, an owner might have a $200,000 mortgage,
but the home is only worth $115,000. So in this example, the home is
underwater by $85,000. Unless banks start doing more loan modifications
where they reduce the principal balance, today’s underwater homes will
be tomorrow’s foreclosed homes.

What does this all mean?

So, if you are thinking about selling, now is as good a time as any.
I don’t think the market will get any better any time soon.
If you are thinking about buying, please do your homework.

Look at the neighborhood trends and determine which neighborhoods
have the most stable property values. I would recommend buying a
single family home. Buyers can still get FHA financing for single family
homes. So their selling prices have been relatively stable.

Since mortgage rates are at record lows, it is still a good time to buy.
You just have to do your homework. I would suggest working with a Realtor
that has experience in your neighborhood of choice.

What can I do if I am facing foreclosure?

There is a FREE hotline available to assist owners that are facing foreclosure.
The phone number is 888-995-HOPE. Please visit the HOPE website for more info:

http://www.995hope.org/

Until the next time,

Mark Killion
Real Estate Broker
Century 21 Affiliated
5200 S. Harper Ave
Chicago, IL 60615
24 Hour Voice Mail: 312-242-1822
Send me a note!

Visit me online: www.773property.com

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Now let’s take a look at Chicago’s South Shore neighborhood.
Like everywhere else, the real estate meltdown has really hit
South Shore hard.
In my opinion, South Shore is very undervalued right now.
Buying real estate in South Shore should be a great long term value play.

This neighborhood has a lot going for it. For one, it is very close to the lake.
So this is lakefront property selling at prices from 15 years ago.

Also, there are big development plans in the works for this neighborhood.
A whole new lakefront community is being planned. It will be near 83rd and South Shore Dr.
It may take 10 to 15 years for it all to come to fruition though (see an artist rendition below).

This neighborhood has plenty of shopping and it is close to the
Metra Train and public transportation.

It is important to note that two distinct markets have emerged in most of Chicago.
A low-end market, and a high-end market.

Low-end market: Also known as distressed sales. These include foreclosures and
short-sales. These properties usually need extensive repairs.
These are priced very low, usually under $50K.

High-end market: Recently rehabbed properties. These properties have granite counters,
hardwood floors, custom cabinets, stainless steel appliances, etc.
These are priced much higher, usually starting at $150K.

Also, the availability of financing is a major influence on selling prices. If a property can
not be financed, the selling price will generally be much lower than its financed counterpart.
You see this a lot with all of the low priced condos out there. Condos are very difficult to finance
right now. If the current association is underfunded, you can’t get financing. This phenomenon is reflected in
the depressed selling prices for condos (see below).

But that’s enough of the small talk and real estate ‘mumbo jumbo’, let’s get down to the numbers.

This analysis is based on MLS Data for the 6 month period ending SEP-23-2011

SOUTH SHORE SINGLE FAMILY HOMES:

2 BEDROOMS: 2 homes sold. Average price = $20K

3 BEDROOMS: 17 homes sold. Average price = $94K

4 BEDROOMS: 17 homes sold. Average price = $109K

5+ BEDROOMS: 4 homes sold. Average price = $194K

———————————————————-

SOUTH SHORE CONDOS:

1 BEDROOM: 6 condos sold. Average price = $35K

2 BEDROOMS: 19 condos sold. Average price = $36K

3 BEDROOMS: 20 condos sold. Average price = $33K

4 BEDROOMS: 19 condos sold. Average price = $27K

———————————————————-

SOUTH SHORE MULTI-UNIT:

2 FLATS: 13 properties sold. Average price = $95K

3 FLATS: 10 properties sold. Average price = $86K

4 FLATS: 2 properties sold. Average price = $37K

———————————————————-

SOUTH SHORE MULTI-FAMILY 5+ Units:

6 unit building: 3 sold. Average price = $109K

9 unit building: 1 sold. Average price = $100K

10 unit building: 1 sold at $40K (Needed total rehab)

20 unit building: 1 sold at $300K (NOI = 68K)

68 unit: 1 sold at $400K (Needed total rehab)

———————————————————-

SOUTH SHORE RENTALS:

Studio…. 6 rented… Average Rent = $534

1 Bedroom…. 22 rented… Average Rent = $669

2 Bedroom…. 22 rented… Average Rent = $948

3 Bedroom…. 18 rented… Average Rent = $1,158

4 Bedroom…. 5 rented… Average Rent = $1,380

5 Bedroom…. 18 rented… Average Rent = $1,479

–=======================================================

Well, there you have it. Another informative analysis done by yours truly.
If you are thinking about buying, renting, or selling in the South Shore
neighborhood, this should give you a good idea of current market values.
If you have any questions, or need advice, please feel free to contact me.

Until the next time,

Mark Killion
Real Estate Broker
Century 21 Affiliated
5200 S. Harper Ave
Chicago, IL 60615
24 Hour Voice Mail: 312-242-1822
Send me a note!

Visit me online: www.773property.com

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I received this information from a good loan officer
that I know. This info was so useful, that I wanted
to share it with all my blog readers out there.
I will cut and paste his e-mail below. Feel free to
contact him with any questions. For VIP Treatment,
Be sure to mention you saw this info at www.773property.com.

============================================================

“Hello,

Mortgage insurance guidelines were relaxed on Monday.
Borrowers with credit scores as low as 620 can obtain
mortgage insurance on an owner-occupied single family
home, a 2-unit property or a condominium with as little
as 5 percent down!
This is a major reduction in scoring requirements as the
previous minimum score was 680. Your clients who
previously were limited to FHA financing can broaden
their home search and move forward with a home purchase.

Many customers with a 620 credit score also have limited savings.
Chicago Bancorp has an excellent home buyer program available
for any property in Illinois. Our Moderate Income program gives
3% down payment assistance to 1-2 person households with
income less than $75,000.
Our Low Income program gives 5% down payment assistance
for a single person who makes less than $42,000 or two people
who make less than $48,000. Both programs have higher income
limits for 3+ person households….”

For more information, please contact:

Phillip Williams
Senior Mortgage Banker
Chicago Bancorp
NMLS ID #217499
312-738-6006

============================================

Until the next time,

Mark Killion
Real Estate Broker
Century 21 Affiliated
5200 S. Harper Ave
Chicago, IL 60615
24 Hour Voice Mail: 312-242-1822
Send me a note!

Visit me online: www.773property.com

EQUAL HOUSING OPPORTUNITY

The Chicago Tribune published an article today on
the topic of closing costs. According to a recent study,
closing costs average $3,500 in Illinois. This would be
for purchases which required financing. For cash transactions,
closings costs dropped down to about $2,000.

So keep this in mind when you are getting ready to submit
an offer to purchase real estate. If you are using financing,
you will have to bring about an extra $3,500 to the closing table.
This is in addition to your down payment!

I would suggest asking the seller to contribute 3% towards
your closing costs. This will help reduce your “out of pocket”
expenses. When I say “ask the seller”, I mean have your
Realtor write that in the contract. It doesn’t hurt to ask.
Many buyers don’t have enough cash saved up to cover
a down payment AND closing costs.

Be sure to ask your lender how much they will allow the
seller to give back at closing to cover your costs. Some
programs allow up to 6% back. But be careful, the more
you ask for, the less likely the seller is to accept your offer.
The seller is looking at their bottom line. They might feel
that giving back 6% is too much. I have had success with
asking for 3% back for some of my previous valued clients.

If you are submitting a cash offer, I probably wouldn’t ask
for any closing cost credits. Just subtract $2,000 from the
amount you are willing to spend on the property. The result
would be your maximum purchase offer amount.

Closing costs can cover fees like:

Title Search Fees
Title Insurance
Appraisal Fees
Attorney Fees
Survey
Termite Inspection
Home Inspection Fees
Wire Transfer Fees
Loan Origination Fees
Loan Points
Loan Application Fees
Property Insurance
Notary Fees
Document Preparation Fees
Transfer Tax Stamps
etc.

Each title company and lender have their own specific fees
that they charge. So, your actual closing costs will vary.
But just keep the average costs in mind and you should be OK.

Until the next time,

Mark Killion
Real Estate Broker
Century 21 Affiliated
5200 S. Harper Ave
Chicago, IL 60615
24 Hour Voice Mail: 312-242-1822
Send me a note!

Visit me online: www.773property.com

EQUAL HOUSING OPPORTUNITY

However, you can often find a handful of condos on the market
that are actually in FHA approved buildings.

If you are looking for a FHA approved condo, please send me a note
to mark@markkillion.com

Until the next time,

Mark Killion
Real Estate Broker
Century 21 Affiliated
5200 S. Harper Ave
Chicago, IL 60615
24 Hour Voice Mail: 312-242-1822
Send me a note!

Visit me online: www.773property.com

EQUAL HOUSING OPPORTUNITY

In many areas of the city, the number of properties
sold is trending up while the selling price is
trending down. So demand is being driven by
increased affordability and the tax credit.

Also, investors are back in the market snatching up
deeply discounted bank owned properties. The
distressed property sales are pulling down Chicago’s
median value. There are properties on the South
and West Sides selling for $20,000! But, I think
that certain areas, like the South Loop and the Near
North side, are stabilizing. Sales activity in those areas
is high, but there is also a lot of inventory on the market.

Hopefully, when the tax credit expires, consumer
confidence will be higher than it is currently. The
timing is good, because it expires during the busy
Spring selling season. So right when it expires,
seasonal demand will be picking up.

I think we hit bottom around July/August 2009.
There is a lot of pent-up demand out there. But there
is even more uncertainty. The main concern now is
job creation. But, I think overall that 2010 will be a better
year than 2009.

Until the next time,

Mark Killion
Real Estate Broker
Century 21 Affiliated
5200 S. Harper Ave
Chicago, IL 60615
24 Hour Voice Mail: 312-242-1822
Send me a note!

Visit me online: www.773property.com

EQUAL HOUSING OPPORTUNITY

For this analysis, I made “1400 West” my
western cutoff point.

2009 3rd QTR…West Loop Condo Sales
========================================
….Type……….#_Sold……….AVG_Price
=========================================
..1Bed…………….87……………$254K
..2Bed…………..111……………$350K
..3Bed…………….27……………$530K
..4Bed………………3…………….$690K
———————————————————————–

There was a lot of activity in the 3rd quarter
within the West Loop. A total of 228 condos were
sold in the 3rd quarter. That’s 76 condos
sold per month. It looks like buyers in the
West Loop are still finding financing. This
is a great sign for the local Real Estate market.

Currently there are 647 Condos listed for For Sale
on the MLS. So, we have about 8 1/2 months of
inventory.

A balanced market is considered to have 6 months
of inventory. So, it is leaning towards being a buyers’
market in the West Loop. But, prices seem to be
holding up pretty well at $349K for the average
2 bed/2 bath condo.

Please contact me for more information on buying
(or renting) a West Loop Condo.

Until the next time,

Mark Killion
Real Estate Broker
Century 21 Affiliated
5200 S. Harper Ave
Chicago, IL 60615
24 Hour Voice Mail: 312-242-1822
Send me a note!

Visit me online: www.773property.com

EQUAL HOUSING OPPORTUNITY