Condos in Gulf Shores Blog » 2008 » April

Assuming you have already established that you can afford to make monthly payments on a mortgage for a Gulf Shores area home, second home or condo, you are already ahead of a lot of potential buyers. 

You probably have already checked your credit report and found that you have a high credit score (ideally).  Now you want to know what to look for when shopping for a mortgage.

Details to Check Out when Mortgage Shopping:

• Broker Fees
• Interest Rate
• Prepayment Penalties
• Length of Loan
• Application Fees
• Credit Report Costs
• Appraisal Expense
• Closing Costs
• Required Down Payment

Pitfalls to watch out for:

• Hidden Charges: Read and ask about fine print
• Avoid Fly-By-Nights: Make sure companies are reputable
• Strongly Consider Using a Local Blank or Mortgage Broker: I certainly don’t have anything against the bank or mortgage guy or gal that you have used in your hometown for years, but this is a resort market and there are idiosyncrasies that can slow down the approval process and in some cases throw it into a tailspin.

Have these things available for your mortgage broker:

• Bank Statement
• Tax Returns
• Paycheck Stubs or Copies
• Marriage or Divorce Papers
• Statements on Interest from any Investments
• Life Insurance Policies

Once you have collected all this information, you are in a better position to learn what type of mortgage you prefer and qualify for. 

Two Loan Types:

• Fixed interest rate loans with consistent, equal monthly installments
• Adjustable interest rate loans: interest rate fluctuates

Primary Residence, Second Home or Investment Property:  How you classify the property will play a significant role in the interest rate you receive.

If this sounds complicated right now, rest assured—I can help you get through the maze in one piece.  Before you know it, you’ll be sitting pretty in your new real estate property in Baldwin County. 

Let’s get started!  Give me a call now at 251-978-7118 or send me an email at John@JohnRicks.com.  I will also be happy to e-mail you a list of banks and mortgage brokers that I have used with success.

Unless you have been living under a rock, you have heard that foreclosures are on the rise in this great country of ours.  Many buyers that are considering wading back into the market are calling to say they are only interested in foreclosures.

While I would never steer anyone away from buying a foreclosure, they are certainly not for the faint of heart.  Let’s look at a few facts.

As of today, April 8th, there are only 59 Single Family Homes listed as foreclosures in all of Baldwin County and only 21 of those are on the island (Gulf Shores/Orange Beach/Fort Morgan).  There are 61 condominiums that are listed as foreclosures out of a total of 2,697 listings (just over 2%) in the Baldwin County MLS.  The point here is that, yes, there are foreclosures out there but they are not rampant as the media would have you to believe.

I have had the occasion to show, write contracts on and even close on a number foreclosures in the last several weeks and I have learned a few things that may be helpful. 

They are not always the least expensive property in the complex or neighborhood.  While they can sometimes be purchased at good prices, my experience has been that they cannot be purchased for pennies on the dollar relative to market price. 

In most cases you must submit a pre-approval letter (I recommend doing that with any offer) from your lender and the earnest money will be required to be a certain percentage of the offering price.

The property is always sold “as is, where is”.  In other words what you see (or can’t see) is what you get.  The homes are usually vacant and utilities are turned off, so if you want to do an inspection on the property, it is up to you to have the utilities turned on (in your name of course). 

The seller will always make you sign an addendum that takes between 10 and 20 pages to say that you know you are buying the property “as is, where is”, the Earnest Money is non-refundable, the seller won’t do any repairs and you will hold him harmless for everything.  Oh, and they will take your first born child if you back out of the deal – OK not really

Then there’s that pesky 12 month Right of Redemption Law in Alabama.  That means that the former owner has one year from the day that he was foreclosed upon to satisfy his debt and reclaim the property.  That is not likely but a possibility nonetheless.

That, in a nutshell, is the lowdown on dealing with foreclosure properties.

If you are interested talking more about foreclosures or any other real estate in Baldwin County, just give me a call or shoot me an e-mail!

John Ricks
251-978-7118
John@JohnRicks.com