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How do you get a mortgage in Delaware?

Applying for a mortgage in Delaware is actually easier than you think. People may have a pre-conceived notion that getting qualified for a mortgage is a tedious, time consuming and difficult task when in fact it’s quite simple and the pre-approval can be accomplished in minutes!

First things first and that’s a little definition of terms. There are actually two main phases of getting a mortgage.
The first is phase called the “pre-approval” and the second the “approval” or “commitment”. The professional that
accomplishes the pre-approval and coordinates the loan through the approval phase is known as a
mortgage loan officer. It’s extremely important that your loan officer be someone you are comfortable with,
you trust, and communicates routinely with you. Here’s a quick explanation of the pre-approval process:
 

• your credit is pulled and a verbal statement of your monthly or yearly income is taken
• this information is entered into the loan officer’s mortgage software
• the software determines if you are qualifiedthe software calculates the amount you are qualified for                                                                      
• the loan officer gives you a Pre-Approval Letter

 Viola…that’s it! You can now go and shop for houses and the whole process takes about an hour!So what’s next? Well you shop-’til-you-drop for homes that fill your wants and needs, you find one and you and your real estate agent write an offer (commonly called writing a contract in the business). The sellers say yea, or nay. You and your agent negotiate with the seller(s) and their agent, agree on terms and everybody signs… then it’s time to get the mortgage approval.

So what else is involved? In a nutshell, here’s the additional information you’ll need to provide to your loan officer for the mortgage approval/commitment:

• previous (2) years taxes (1040’s)
• previous (2) years W-2’s
• (2) most recent pay stubs
• previous 60 days bank statements

Your loan officer will collect this information and create a “mortgage package” to send to another mortgage professional called the Underwriter. This person gathers all of this information and asks you for any additional information that they may require. Once he or she has all the information they need they will use software to determine the exact terms of your mortgage amount and your monthly payments. The next step is to send an Appraiser to the property to make sure the value of the home meets or exceeds the amount of the loan and when all is complete…mortgage approved, and you’re on your way to owning a home!

So don’t’ get all stressed out over applying for a mortgage; finding a home you like a lot of times is more difficult. As is with many things in life; the hardest part of doing something you always wanted to do is getting started. With the help of professional, knowledgeable real estate agent and mortgage loan officer, the home buying process can be gratifying and fun!

Thank you for reading my New Castle County Delaware Real Estate Blog!
Posted by Michael A. Brown of Keller Williams Realty, Christiana, DE.
302-798-2300

Great news for home buyers and sellers in Delaware; the tax credit has been extended AND expanded! So what does this mean for you? Well here’s the low down:

People trying to hurry and close on a home before the previously established Nov. 30th, 2009  deadline can relax!  The deadline now is twofold:

1. You must sign an Agreement of Sale (contract used to make an offer on a home for sale in Delaware) before May 1, 2010

2. You must close (keys in hand!) on the home before July 1, 2010

This doesn’t mean that you should drag your feet in searching for your home because as most agents know; a great deal will sell in any market, so don’t let that one you love get away! What it does mean is that you can make the whole procss a little less stressful if you found yourself feeling “hurried” to close by Nov. 30, 2009.

And what do I mean by “expanded” you ask? Well this is the new and exciting part! Any person looking to sell their home and purchase another can qualify for up to a $6500 tax credit. Here’s the skinny on that:

1. You had to have lived in your current home for at least five of the last eight years                                                                            HOME SWEEET HOME

 2. The home you are purchasing must be worth $800,000 or less

3. The home you are purchasing must be your primary residence meaning it can’t be a second home or an investment property.

Another great aspect of the programs is that the income levels to qualify for the credits have increased also. Previous levels were $75,000 for an individual and $150,000 for couples. The new levels are$125,000 for individuals and $225,000 for couples! How cool is that?

So buying and selling a home in Delaware just got even better! Buyers you are set up to get more from buying a home than just the home. Sellers; there are bound to be more buyers looking to purchase YOUR home now due to these programs. Sweet!

Thank you for reading my New Castle County Delaware Real Estate Blog!
Posted by Michael A. Brown of Keller Williams Realty, Christiana.
302-798-2300

This is one of the most commonly asked questions in the real estate business. Buyer and sellers alike have a keen interest in agent commission. So what exactly is the commission and how is it determined? Like almost everything in real estate, the commission is negotiated. The seller(s) and the listing agent (the agent that will be responsible for helping the sellers sell their house) come to an agreement on what percentage of the dollar amount received for the sale of their home will be paid to the brokerages of the listing agent and buying agent.

For example; a 6% commission on a home sold for $100,000 would produce a $6,000 commission. For simplicity we will assume that the commission will be split evenly with 3%, or $3,000 going to each brokerage. The brokerages will then pay the agents all or a portion of the commission. The portion, or percent, that the agents receive varies based on each brokerage’s policies and procedures. A 50/50 split would result in the agent and the brokerage each receiving $1,500.

This is the fundamental definition of real estate commissions and a brief explanation of how it works. The commission, in my experience can also be used a tool. What do I mean by that? Well a tool is something that is used to assist in accomplishing a task, to make that task easier to perform, or provide increased results with the same or less amount of effort. How could a commission do this?

To figure that out let’s take a brief look at selling a house. Many of you reading this now have sold a home, are currently selling a home or may be considering selling in the future. The the main goal of th eagent is to get their clients home sold at a maximum price in the shortest amount of time. Paramount to accomplishing that is to get the a lot of people to view the home. A simple and time-tested way of doing that is by using the commission as one of their tools.

There are a few ways to utilize the commission to garner public interest and one way is to offer the buying side (buyer’s agent) an increased commission over the comptetion (similar houses for sale in your area). Great agents know this and many times will decrease their own commission while increasing the buyer’s side so that they can attract more buyers and serve their clients most effectively. Getting a client’s home sold in the shortest period of time and the maximum dollar amount are always top priority.

So the next time an agent asks for 6% commission or even higher; take into account they probably have your best interest in mind!

Thank you for reading my New Castle County Delaware Real Estate Blog!
Posted by Michael A. Brown of Keller Williams Realty, Christiana, DE.
302-798-2300