A credit score is a number that helps lenders predict how likely you are to make your payments on time. This score affects your ability to obtain credit and helps determine what you pay for credit cards, auto loans, and mortgages on Virginia Beach real estate. Even your insurance rate is related to your score. The higher your score, often referred to as a FICO score, the more apt you are to be approved for and pay a lower interest rate on new loans.

What do the numbers mean?

FICO scores range from 300 to 850, with most people scoring in the 600s and 700s, and are generally rated from excellent to very bad.

• Above 800 is considered excellent. This rating reflects that fact that you pay bills on time, have a strong credit history, and have not filed for bankruptcy. You use your credit responsibly.

• Between 750 and 800 falls into the very good category. You are considered a very low risk because of your history of paying bills on time and acting responsibly.

• Between 700 and 750 puts you in the low risk range. You my have missed some payments in the past, but you current record is good. You do not have an excessive amount of credit card debt.

• Between 650 and 700, or fair, means you are a moderate risk. Your credit history may include older negative items, too many recent applications for new credit, or a higher than normal credit card debt.
  

• Between 600 and 650 is a bad score, and you are deemed a high risk for purchasing Virginia Beach real estate. Your score most likely reflects high credit card debt, late payments, collections, or bankruptcy, and you may well be turned down for new credit.

• Below 600 is considered very bad, and you are viewed as a very high credit risk. If you are approved at all, it will be at a much high interest rate–or you may even need a cosigner or a very large down payment in order to secure a loan.

Because you have not yet established a credit history due to lack of credit cards and/or loans, you may have no credit score. Opening a new credit card account and using it responsibly for a few months should alleviate this problem.

What makes up the credit score?

Your payment history comprises 35% of the score, with the amount of debt you have affects about 30%. 15% of the score is derived from the length of your credit history, with 10% resulting from recent new credit applications. Other factors such a s a variety of credit types make up the final 10%.

How can you improve your score?

• Use you credit cards to establish a positive and consistent pattern of payment.

• Check your credit report for inaccuracies. This is a common problem, so look for and report misinformation.

• Have a variety of debt. In addition to a mortgage on your Virginia Beach real estate, add auto loans and credit cards to the mix. It is important to demonstrate good money management in more than one area.

The three major credit reporting agencies are Equifax, Experian, and Transunion. You are entitled to one free credit report a year from each of the three.

A home inspection is of primary importance because it allows you to obtain an unbiased professional assessment of all the components of the property. It is a step necessary for you to decide if you will stay with your original offer, renegotiate based on documented issues and needed repairs, or back away from the purchase of that piece of  Virginia Beach real estate altogether.

Selecting a qualified inspector is vital. Your realtor can provide you with the names of reputable firms, or you can go online to research services offered and credentials. Specific information you should know about the inspector and the inspection process included the following:

1. Credentials and background: Is he/she licensed in your state? Is he affiliated with any respected organizations such as the American Society of Home Inspectors? Membership in these groups requires that inspectors follow strict guidelines about ethics and continuing education. Be sure to inquire about experience and training. A construction-based background is a plus, as is attending a college with an emphasis on construction or attending a home inspection school.

2. Fees: Although you don’t want to spend money unnecessarily, this is not a place to scrimp. Your house purchase is a very large investment, and you need to know as much as you can about it. Do remember that money spent on a quality inspection now will be returned to you by avoiding unexpected costly repairs in the future.  The price of an average inspection varies depending on the age, size, and condition of the house. Some inspectors base their fees on the list price of the Virginia Beach real estate. Get estimates from all you contact, but don’t assume that the lowest priced is the best choice for you.

3. Type of report: Some inspectors use computer generated onsite reporting, some a handwritten checklist, and others a computer generated report you won’t receive for few days. By and large, the last option is in your best interests since it gives the inspector time to review his findings, look up any questions he may have, and send you a detailed, descriptive report. He should also be able to provide you with pictures of the problem areas. Feel free to ask him for a sample report.

4. The actual inspection: Make sure that you will be allowed to accompany the inspector and ask questions as he checks out the house and grounds. This is a good time for you to become familiar with the home‘s inner workings, locate shut-off valve and breaker panels, and pick up tips on operating and maintaining different systems.

A thorough home inspection of an average home should take between 2 ½ and 4 hours and should cover both internal and external components of the property. Major items examined should include:

a. Siding, foundation, brickwork, etc.

b. Insulation

c. Deck, roof, garage

d. Attic/basement

e. Driveway and walkways

f. Electrical system

g. Plumbing

h. Doors and windows

i. Heater, air conditioner, and hot water heater

j. Ceilings, walls, and moldings

Having your Virginia Beach real estate inspected will allow you to make an informed decision about the purchase of a house and will provide you with both essential knowledge and peace of mind.

ADVANTAGES:

• HOME WARRANTY: Generally this warranty is good for one year and covers heating, cooling, and electrical systems and plumbing. Some also cover appliances.

• INCENTIVE PROGRAM: Many builders use incentives, both large and small, to attract buyers. Examples include vacations or furnishing for your Virginia Beach home. Note: these incentives are often offered only if you use the builder’s lender.

• CUSTOM DESIGN: If you become involved with the builder early in the building process, you may have a say in the home’s construction–from customized features to flooring to colors.

• FASTER CLOSING. No titles to search.

• SAFETY/HEALTH: No worries about old wiring. lead paint, or asbestos.
  

• LESS MAINTENANCE: Materials used in the exterior of a new home do not require yearly painting.

• ENERGY EFFICIENCY: Less waste, and thus lower bills.

PRECAUTIONS:

• HIRE A BUYERS REAL ESTATE AGENT who is experienced in new home sales. A strong Realtor negotiating on your behalf can save you thousands!

• CHECK OUT THE BUILDER: Talk to those already living in the new community. Find five or six homeowners who have purchased a Virginia Beach home from him in the past five years. Ask what they like and don’t like about their houses. Has he been responsive to problems? Check with the Better Business Bureau to see if there are complaints against him.

• EVALUATE THE BUILDER’S LENDER: Some builders own their own lending company and therefore don’t offer you the best deal . Beware of being locked into using that lender in order to qualify for incentives. Request that the lender guarantee its Good Faith Estimate.

• HIRE A HOME INSPECTOR: Even if you have a one year warranty on your Virginia Beach home, some problems won’t surface until that service has expired.

• GET LEGAL ADVICE: Have a real estate lawyer check your purchase agreement to make sure you are protected and to explain your liabilities and commitments.

Suggestions for making a Virginia Beach Real Estate inventory include:

• Organize it by room.

• Describe each item, including make and model, and where it was bought. Record the serial number, if the item has one.

• Attach sales receipts, purchase contracts, and appraisals to your list.

• For clothes, count each type of item, such as pants, shoes, shirts, coats, etc. Particularly note those that are valuable.

• Supplement your written list with photographs. Make sure you label the photos. *If you have a video camera, videotape each room. You can also add a narration as you tape.

• Don’t forget items that are in drawers, closets, attic, and basement.

• Use your computer. Make your list, scan in receipts, photos, and other papers. Keep these in a fireproof box. Make a copy of your inventory and photos and store them away from the house.

• Add valuable new items (such as a new entertainment system) to the inventory when you purchase them. Review and revise the list annually.

What is generally covered?
Under the HO-3 policy type (the most popular), damage caused by perils and hazards such as fire, lightning, smoke, windstorm (in certain parts of the country), hail, vandalism, falling objects, theft, weight of snow or ice, vehicle striking the structure, building collapse, water damage from bursting pipes, and structural damage from an electrical surge are covered.

What is usually excluded?
Under the same HO-3 policy, damage not covered includes that caused by an earthquake, floods, windstorms (in certain parts of the country), war, pets, birds, rodents, or insects, sewer backup, pollution. Damage done by you or that which is the result of normal wear and tear is also excluded.

Do not despair, however. You can add riders or special endorsements to your policy to cover some of the above-mentioned exclusions and/or to increase the coverage for items whose value exceeds the basic limits. Some of these endorsements can include: wind, sewer backup, jewelry, fine art, furs, theft coverage protection, etc.

Valuable items such as jewelry, art work, and collectibles should be appraised so that you will have adequate coverage. Another thing to consider is adding a rider to insure your home office if you do not have a separate business policy.

So you have purchased adequate insurance for your Virginia Beach real estate, have inventoried your belongings, and have put that list in a protected place–and you’re feeling secure and confident. But what if life throws you a curve and your property is stolen or damaged? Then what? Look for Part IV in this series for help in filing and/or settling a claim and for tips to prevent losses at all.

An Insurance Guide For Your Virginia Beach Real Estate – Part I

Uses and Applications: This program can be used in three ways:

1. To purchase a home and its land for rehabilitation

2. To purchase a dwelling at one site and move it to another mortgaged property for rehabilitation

3. To refinance existing secured loans on a home for rehabilitation

4. To convert a one-family dwelling to a two, three, or four family residence OR

5. To convert a multi-family dwelling to a one-family home.

Eligibility:

Property:

1..Must be a one-to-four family dwelling that is at least one year old

2. If the dwelling has been demolished, some of the foundation must remain

Improvements:

1. All construction must comply with HUD Minimum Property Standards

2. All rehabilitation dealing with thermal or heating/AC systems must be energy efficient

3. Cash-paying home buyers can refinance their Virginia Beach real estate within six (6) months of purchase in order to make improvements

As with any government funded programs, the property to be purchased is subject to appraisals to determine the “as-is” and “after rehab” values of the real estate. In addition, the Virginia Beach home owner will be expected to provide HUD with the following:

1. A plot plan of the site

2. Proposed interior plan of the dwelling

3. Work write-up and cost estimate

HUD also offers an FHA Streamlined 203 (k) program that allows buyers or owners of Virginia Beach real estate to purchase or refinance a home that needs up to $35,000 of rehab/repair.

Basic facts Home Buyer Tax Credit:

• The deadline is April 30, 2010 (June 30^th with a binding, signed contract)

• First-time buyers are eligible for a tax credit of 10% of the purchase price–up to $8000.00

• Repeat buyers (those who have lived in one residence for 5 consecutive years of the last can receive a credit of up to $6500.00.

• Income levels–$125,000 for individuals; $225,000 for couples.

• The credit may be claimed on this year’s tax return (for 2009).

***Remember that a tax credit is a dollar-for-dollar deduction in what a taxpayer owes. If the credit exceeds the amount owed, a refund will be issued.

Because it generally takes 3 to 4 weeks to process a loan and often an additional month for inspections and paperwork, there are some important and beneficial steps you can take to expedite the purchase of your Virginia Beach home.

Beating the deadline:

• Get pre-approved for a loan. Have your credit report, proof of funds, and employment certification ready to submit.

• Know what you are looking for. Have some well-thought-out ideas about the desired location, style, and price of your new Virginia Beach home.

• Supply all documents to your lender in a timely manner.

• Communicate often with your lender. Stay on top of the loan status, closing date, etc.

• Avoid a short sale, which is often a lengthy and unpredictable process.

• Take advantage of the expertise and advice of your real estate agent. He/she can be an indispensable asset and guide in your Virginia Beach home buying experience.

Too good to be true? Perhaps. Buyers of foreclosed property, especially if it has been unoccupied and not maintained for some time, must be acutely aware of possible problems and trouble spots involved in such a sale and may have to realistically face some unpleasant facts. As Vince Mastronardi, president of On-Site Specialty Cleaning and Restoration, observes, “Buyers need to educate themselves about the potential pitfalls of purchasing distressed property. It’s not so much what damage occurred, but the sources of that damage and how long before the problem was addressed.”

A cautious buyer should look for signs which indicate that all is not well with a piece of Virginia Beach real estate.

1. The presence of mold. Once mold takes hold, it is almost impossible to get rid of. Look for places which have been excessively painted in an attempt to cover up mold.

2. Lack of heat for months in a home not properly winterized. Result? Burst pipes and water damage.

3. Hints of water damage. Peeling, bubbling, or discolored paint may occur as a result of moisture. Other evidence of water damage includes swelling in walls/ceilings, stains, and             a musty odor.

4. Blocked drains or pipes may lead to sewage problems.

5. Evidence of vandalism or break-ins. Signs of such activity include holes punched in walls and broken windows. Theft of appliances, fixtures, air conditioning/heating units,             pipes, and electrical wiring is also of concern.  Were the stolen items properly removed or carelessly ripped from their location?

6. Indications of furnace malfunction or soot damage. Telltale signs include black cobwebs, greasy grey residue on walls, or an oily odor.

7. Renovations in an older home. You would be wise to check to see if permits were issued. Was the work performed by a professional? Does it conform to required Virginia                     Beach real estate building codes? Was asbestos disturbed during construction?

8. Debris dumped in the yard. You will be required to remove such refuse in a timely (and possibly expensive) manner.

9. Occupation by uninvited critters. Wild animals often live in abandoned structures. Look for snakes, rodent infestation, and unexpected “nests.”

Obviously, you must insist on a thorough inspection of your Virginia Beach real estate to avoid buying a badly flawed foreclosure filled with unpleasant and costly surprises. Be sure to request air quality and surface testing; it is well worth the little extra it costs. You should also inquire about any corrections that have been made to address damages and talk to the company who performed the repairs.

By diligently doing your homework and actively anticipating problems, you may just find the foreclosure which fits your needs and is indeed a bargain!

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Part I of this three-part series dealt with analyzing your financial situation, getting prior loan approval, and determining your real needs/desires in a first home. All that having been accomplished, you will now want to look for a mortgage and decide which is the most advantageous for you.

As with any major purchase, you will want to shop around for the best deal. Contact several lenders (bank, savings and loan, credit union, private mortgage company, or a state or federal government lender.) Before doing that, however, you need to familiarize yourself mortgage types, terminology, and options. Your real estate agent will be helpful in this mission, as will the internet. Keying in First-time house buyers, mortgage assistance, HUD, or Community Housing Partners, will result in innumerable informative sites, a wealth of information for you to consider, and, most likely, a list of questions for you to ask your realtor and/or potential lender.

For help in determining which type of mortgage is best for you, check the chart found at http://mortgages.interest.com/content/first . In an easy-to-read format, the characteristics and suitability of many types of loans (fixed rate, step, balloon, adjusted rate –ARM) are simply and clearly explained. If, for instance, you plan to live in your Virginia Beach home more than 10 years and desire stability in payment amounts, then a fixed rate mortgage is for you. If, however, your finances are currently strained, but you know that in 5 to 10 years your monetary situation will improve or that you will most likely move within 10 years, then an ARM or balloon mortgage may be better for you. Being familiar with these options allows you to discuss them intelligently with your real estate agent and/or lender and then select the type which best fits your circumstances.

Another good source of information for first-time home buyers is the Department of Housing and Urban Development (HUD), an agency which oversees FHA loans. This type of loan is particularly useful if you have little money for a down payment, less than great credit, or large monthly bills. An FHA loan requires as little as 3% down (and it can be a gift from a relative or friend). In terms of your credit rating, the FHA is primarily concerned that for the past two years you have paid bills in a timely manner and have been steadily employed. With FHA you have to wait only two years after declaring bankruptcy, and your debit-to-credit ratio can be higher than for a conventional loan. You can qualify for an FHA loan if your monthly payments are no more than 43% of your income, and, as with conventional loans, you can choose from many types.

Of course, there are some negatives to consider before taking on an FHA loan. Interest rates generally run about 1/8 of a percentage point higher than conventional rates, but the real disadvantage of an FHA loan is that the borrower must pay an up-front insurance premium of 1.75% of the mortgage if the down payment is less than 20%. This cost can, however, be added to your total loan amount.

When you have done all of your homework and are ready to actually apply for a mortgage, be sure that you have all the figures and paperwork required by the lender–and bring them with you. You’ll most likely need the social security number of each borrower; copies of bank account statements for the past 6 months; evidence of any other assets; a recent paycheck stub showing your earnings; credit card account numbers and the amount due on each; account numbers and balances due on outstanding loans; copies of income tax filings for the past two years; and a contact who can verify your employment. Yes, it‘s quite an extensive list, but be sure to check with the lender to see if anything else will be required..

As always, to avoid mental stress, financial strain, and even real estate fraud/scams such as bait and switch or loan flipping while purchasing your Virginia Beach home, be forearmed with accurate information and heed the sound advice of your trusted real estate.

Coming next!! Part III–finding your perfect first home, making an offer, and preparing for the closing.

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