You see a house advertised.  You call the listing agent.*

The listing agent asks:

"Are you  working with a Realtor? "

You say "no."

The listing agent asks:

"Have you been pre-approved for a mortgage."

You have not talked to a lender but you've done some on-line pre-qualification thingies (thingies is a highly technical mortgage term there is nothing inherently wrong with these mortgage thingies)  and you know  you can afford a house for... let's say $150,000 based on your income and your debt.

You and the agent schedule the appointment.  You fully understand the agency relationships in the transaction whether the agent is working for you, or working for the seller or both (disclosed dual agency ) and thus neither you nor the seller... agency... that's a whole 'nuther blog for another day...

You see the house. You love the house  You make an offer, the house is priced at $158,000 but you you hope that seller will accept your offer of $150,000 because that's what the on-line thingies told you, you could afford.  You  know the house is overpriced. The seller accepts the offer.

You go to a lender. The lender says "oops" You can't afford it. "You need to ask the seller to raise the price and build in your closing costs (points, the down payment on certain programs ams...)

You go back to the listing agent and say ...

* It does not necessarily even need to be the listing agent on a property... it just is in my scenario...  it could be another agent, it could be your buyers agent if they have not made sure you are really, really qualified for the offer you are making to the seller.  It was just the listing agent in this scenario...

Is the moral of this story just automatically ask for concessions on any offer?  No, not really the moral is get pre-approved by a good lender... I have links to good lenders on my website mortgage page on  MaureenMcCabe.com (link is in the sidebar here.)

I'd love to hear from you if you have a comment on the topic of mortgage finance, mortgage fraud, pre approval, etc.  All comments are moderated so you will not see your comment immediately. Thanks. Copyright 2008 Discover Columbus and Maureen McCabe

I found Dan's video on Teri Lussier's The Brick Ranch blog about Huber Heights Ohio (Dayton area.)  If you go really far back somewhere on this blog there is at least one post inspired by Dan Green... but it was when he was in Chicago. 


Need mortgage info...  read Dan Green's blog...

Why Mortgage Rates Didn't Fall More When The Fed Made A Surprise 0.750% Rate Cut

Why More Talk Of Recession Makes Mortgage Rates Fall

A mortgage set up for biweekly mortgage payments pays down principle on the mortgage quicker.

In his Real Estate Notebook column in This Week Community Newspapers last week Bill Evans wrote about "A biweekly mortgage payment plan"

"A biweekly mortgage payment plan means that half of the scheduled monthly payments are made every two weeks, which means that you make 26 payments per year -- one extra payment per year. "

Evans makes the point that setting your mortgage up for bimonthly payments is not refinancing.

This Week Community Newspapers are published for many Central Ohio communities including Clintonville, Dublin, Gahanna, Grandview Heights, Hilliard, New Albany, Northland, Olentangy, Upper Arlington, Westerville amd Worthington and are published weekly. Evans, the president of Real Living HER writes a weekly column in the papers.

Mortgages / finance are the thing I hate blogging about more than anything else. I did recently write these two posts myself with info I learned in a class taught by Real Living Mortgage Branch Manager Susan McKnight.

Home Seller FHA Finance Quiz

Home Buyer FHA Finance Quiz

FHA is government insured financing.

Central Ohio home sellers here's a quiz on FHA financing and what it means to you as a seller.

True or False

1. FHA requires "Electrical Ground Fault Interrupters (GFI)" circuits to be installed when a plug / outlet is within 6 feet of a water outlet.

True
False

2. FHA requires handrails where there are three steps or more.


True
False

3. FHA requires a termite inspection on a home.

True
False

4. FHA requires an electrical certification on a home.

True
False

5. FHA requires a roof certification on a home.

True
False

6. FHA requires a furnace certification on older homes with gravity feed or steam (registers) heat furnaces.

True
False

7. FHA requires the seller to pay for the underwriting, commitment and processing fees for the buyers loan.

True
False

8. FHA appraisal are more likely to under-appraise than a conventional mortgage loan because the appraiser has a different set of requirements.

True
False

9. FHA loans allow for carpeting and /or decorating allowances in a purchase agreement.

True
False

10. FHA requires chipping paint to be scraped and repainted on homes built after 1978.

True
False

Tabulate your answers...


and scroll down to see the correct answers for FHA financing today... in 2007






The answers to all the questions is "False."

The seller does not have to worry about certifying roofs, the electrical system, the structural system (except on manufactured housing) Or a heating system. There is not a requirement for GFI outlets to be installed. There is not a requirement that the house be tested for termites or other wood destroying insects (the purchase contract may require a termite exam but FHA does not. It is negotiated in the contract with the buyer.)

That is not to say that if the roof is leaking you don't have to disclose it. Or that if there are signs of a defect in the roof for example that the appraiser is not going to ask for a roof certification. If there is a stain on a ceiling the appraiser could ask for the roof to be certified but not all roofs, electrical systems, structural systems, furnaces, etc. have to be certified.

In the old days a house was considered guilty until proven innocent by FHA certifications to the contrary. Not anymore.

Homes built prior to 1978 the appraiser may require chipping paint to be scraped and repainted because of lead paint.

The seller no longer pays for any charges for the buyers loan other than the tax service fee ($80.)

The questions and answers were part of a quiz for a continuing education class taught by Susan McKnight, the branch manager for Real Living Mortgage in Columbus.

Contact me about offering your property to buyers with a free 1%, 1 year buydown. 30 year fiixed FHA financing with one year at a lower interest rate.