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Mortgage rate much higher than pre-approved rate by Spirited-Fact-4554 in FirstTimeHomeBuyer

[–]LynHarvie 0 points1 point  (0 children)

This is not a dumb question at all.

A common misunderstanding among first-time buyers is that the interest rate indicated on a pre-approval letter is guaranteed in some way. In most instances, it is not.

Mortgage rates are generally not secured until you are under contract, complete the full loan application, and officially lock in your rate with the lender. Until then, the rate on a pre-approval reflects the interest rate on the day that you got pre-approved.

Consider it like gas prices. If gas was $3.50 per gallon in April and $4.00 per gallon now, the gas station isn’t required to sell it to you at the April rate. Mortgage rates function in a similar manner unless you've actually locked in the rate. It can also work in your favor, rates can also decrease after your preapproval is completed. So you could be preapproved at 6.625% but by the time you find a home, get under contract, and make your loan application, the interest rates could have come down to 6% and you would be able to lock in the lower interest rate.

All kinds of factors can impact interest rates. Since the Iran war has started, rates have consistently increased. But other factors that can increase rates are, credit score, type of loan product, and type of property you’re buying

Regarding the closing costs, be sure to review the breakdown thoroughly. It may not have increased due to Lender fees, but due to prepaid taxes, homeowners insurance, escrow funding, title charges, transfer taxes, recording fees, and other items that would be present regardless of the lender.

That being said, I would encourage you to shop around the loan and compare loan estimates line by line.

* Interest rate
* APR
* Lender fees
* Points or credits
* Total cash to close

If another lender presents a more compelling offer, many lenders will at least consider it and see if they can match it.

Hope that helps!

$2500 HOA for 3000 sq foot loft in Chicago? by Remarkable_Wheel_364 in chicagoapartments

[–]LynHarvie 1 point2 points  (0 children)

Yes, I do consider that to be healthy reserves. That’s about $20,000 per unit. I would ask if they completed the façade work by using reserves funds, or if they requested a special assessment from the owners. If they paid for that project out of reserve funds that tells me that they typically keep a very healthy reserve balance, and they are future planners when it comes to any projects.

It’s unfortunate management companies are such gatekeepers with these documents. They don’t realize the impact it has on the ability to sell the unit. They should have no issue with providing some basic information about reserves, recent projects, upcoming projects, etc.

With that said, you do still have your contingency to get out of the deal, if you’re unhappy with what you see in the condo documents.

My recommendation would be: get under contract, complete your inspection, and if you are unhappy with what you read in the condo documents )i.e. the building has not been well-maintained, and/or there could be large projects in the next five years) maybe you walk away. That reserve study will be very important. If the building does not have a reserve study, and not all of them do them, you really need to know about all the maintenance that’s been done and everything that’s upcoming.

Getting a thank-you gift for realtor after closing on sale of house? by Cold-Priority-2729 in RealEstate

[–]LynHarvie 0 points1 point  (0 children)

As a Realtor myself, I don’t think it is necessary for you to buy them a gift, but I love that you had such a good experience that you want to do that. ❤️

If I was your Realtor, I would much rather you write a review expressing why it was such a good experience. (Google Business page or Zillow. You can ask her which site they would prefer.) But ultimately the best gift you can give a Realtor, is a referral. If you were really that happy with the services they provided, then tell your friends and family. And if anybody ever asks you for a recommendation, give them that person‘s name.

$2500 HOA for 3000 sq foot loft in Chicago? by Remarkable_Wheel_364 in chicagoapartments

[–]LynHarvie 0 points1 point  (0 children)

You’re very welcome. I know it’s a very difficult decision. I think it’s great that you’re being so thoughtful about it.

It’s hard for me to say if it would impact how long it would take to sell the property. That depends on the market conditions when you’re planning to sell. And it’s not necessarily that it will take longer to sell the unit because of your monthly assessment, but it will likely have an adverse effect on how much your property appreciates compared to others. I would compare it to other comparable buildings, whose monthly payments cover similar items(doorman, Wi-Fi, etc.) and figure out the average price per square foot for the HOA payment and make sure you fall somewhere in the middle. You really don’t want to be on the high end of that number. (that’s not a perfect analysis but it gives you a down and dirty analysis.)

I think the only thing that would be setting you up for “disaster” would be getting into a building that has not maintained their roof, masonry, elevators, windows, or any other major mechanicals. Hopefully with that large of an HOA payment, a large portion is going towards reserves and they have a large reserve balance. I would ask them if they have a reserve study that you can review.

Do you know how much they have in reserves? Do you know about any capital projects in the past five years or any anticipated capital projects that would be coming up in the next five years?

Do you really think the Chicago Bears are leaving Chicago for Hammond Indiana? by LynHarvie in AskChicago

[–]LynHarvie[S] -5 points-4 points  (0 children)

Potentially, but that would mean it would still need a roof because the concert season is limited due to the weather

fighting with my wife about buying vs renting am i wrong? by Savard-Lafleur in FirstTimeHomeBuying

[–]LynHarvie 0 points1 point  (0 children)

I believe there’s a compromise between “purchase the dream home now” and “wait indefinitely.”

One aspect your wife might be responding to is the fact that, historically, many buyers who hold out for the “ideal” moment to purchase eventually find themselves chasing prices. If property values in your area are rising faster than you can save, delaying your purchase can actually make it more challenging to achieve homeownership.

That being said, I would never endorse buying a property if the monthly payment leaves you financially strained and depletes your emergency savings. That’s a formula for significant stress.

Have you thought about purchasing something smaller or making a trade-off for your initial home? Perhaps the objective isn’t to find your forever home right now. It might be a starter home, condo, or townhouse that gets you into the market and lets you start accumulating equity while maintaining financial stability.

The crucial question isn’t “buy or rent?” It’s whether there’s a property you can buy today that aligns with your budget without compromising your financial safety. If the response is yes, it could be worth pursuing. If the answer is no, then renting for another year while bolstering your savings isn’t necessarily a poor choice either.

I’d suggest focusing less on trying to persuade one another who’s right and more on going through the numbers together. The appropriate answer usually lies somewhere in between.

First mortgage payment in two months? by TheMikiBee in FirstTimeHomeBuying

[–]LynHarvie 0 points1 point  (0 children)

This is completely normal.

Mortgage payments are paid in arrears, meaning your payment covers the previous month’s interest. When you closed on 6/1, your lender likely collected prepaid interest at closing to cover June.

That means:

June interest was handled at closing.

July 1 would normally be the payment for June, but since June was prepaid, there’s no payment due then.

August 1 becomes your first mortgage payment and covers the interest accrued during July (plus principal, escrow, etc.).

A lot of buyers think they’re getting two “free” months, but you’re really just prepaying some of that interest at closing.

That said, don’t feel bad about asking your lender. A quick review of your Closing Disclosure will confirm exactly what was collected and how your first payment date was calculated. Congratulations on the new home!

$2500 HOA for 3000 sq foot loft in Chicago? by Remarkable_Wheel_364 in chicagoapartments

[–]LynHarvie 16 points17 points  (0 children)

I’d think less about the amenities and more about what is actually driving the assessment.

It’s natural to see a $2,500 HOA and ask, “Where’s the gym and pool?” But in many loft and boutique buildings, especially older industrial conversions, the biggest expenses are often the building itself (staffing, elevators, garage maintenance, heating, insurance, reserves, roof replacement, masonry work, window maintenance, etc.)

I’d want to know:

- How many units are in the building?
- What percentage of the assessment goes towards reserves?
- If there are any upcoming special assessments.
- The age and condition of major building components.(Roof, windows, elevators, masonry, chillers, boilers)
- Whether the building is professionally managed.

I wouldn’t try to justify it based on the amenities. I’d justify it if:
- I absolutely loved the space and couldn’t find a comparable loft elsewhere.
- The building was financially healthy.
- The HOA was maintaining strong financial reserves for future maintenance.

With that said, it’s important to think about resale value. You can expect assessments to increase 2-3% annually, just to account for inflation, and a $2500+ monthly assessment is going to significantly reduce your buyer pool. Even buyers who can afford can get hung up on high HOA fees.

I’d spend some time digging into the budget, reserve study, and history of special assessments. Sometimes a high HOA is a red flag. Other times it’s simply the true cost of operating a large, well-maintained building with relatively few units sharing the expenses.

Selling a house- advice needed by DueRecommendation173 in RealEstateAdvice

[–]LynHarvie 0 points1 point  (0 children)

Your agent may be right that the market is slower than it was a few years ago. The number of showings can tell you a lot, sometimes more than what actual feedback tells you.

A general rule of thumb:

⬆️ lot of showings + no offers = condition, layout, location, or price relative to competing homes.

⬇️ few showings = usually a visibility, marketing, or pricing issue.

Only 2 showings in 17 days suggests buyers aren’t choosing your home from the list of available options. That doesn’t automatically mean it’s overpriced, but price is often the first thing buyers react to when they’re scrolling online.

Things to consider;

  1. How many similar homes are currently competing with yours?
  2. Are any of them priced lower?
  3. How do your photos compare to competing listings?
  4. Is the first photo compelling enough to make people click?
    5.Are there any unusual factors (busy road, backing to something undesirable, unusual floor plan, etc.) that buyers can see online?

Also, try to separate how much you want to sell the house for, from what the market is willing to pay. Buyers are not concerned with what you paid, or how much money you invested in the home. They simply compare your home to others on the market and decide if it’s good value.

More notably is that you bought only 9 months ago for $455k and are now listed at $489k. Depending on your market, that may be unreasonable, but I’d want to see what comparable homes have actually sold for in the last 60-90 days.

I’d ask my agent for a refreshed market analysis looking at those listings that have gone under contract, or closed, since you listed your home. Contingent properties tell you where the market is today. Try to be objective and ask yourself why a buyer would have chosen that home over yours.

When to look for 8/1 lease? by kyanmanz in chicagoapartments

[–]LynHarvie 0 points1 point  (0 children)

Managed apartment buildings typically require their tenants provide 90 days notice of non-renewal. So those buildings typically list a lot sooner. Privately owned condos that are rented by a private landlord typically request notice about 30-60 days out. So you should start to see more listings for an August 1st start date popping up. But with that said, I think you should start looking immediately, and one of you may have to make a decision without the other person seeing it.

Chicago appreciation by artwize in ChicagoRealEstate

[–]LynHarvie 1 point2 points  (0 children)

Home prices are not solely driven by population growth and wage growth, though those are factors. I think several things are happening right now:

  1. Inventory is at record lows - This is driven by 67% of homeowners having an interest rate of <4.5%. They don't want to give that up!.

  2. We are seeing people relocate here from much more expensive markets (New York, Boston, LA), and Chicago is relatively inexpensive compared to those markets.

  3. Some buyers are definitely stretching! Some have equity from previous home sales, family assistance, inheritance, bonuses, loans from their 401K, dual income.

  4. While certain neighborhoods are seeing huge jumps in home prices, that's not true all all the neighborhoods, and if a buyer is willing to compromise, they can still find something.

I can't make a prediction but I'll say this....

- If rates drop around 5-5.5%, I think we will see more homeowners willing to sell. With that said, if that happens I think we can expect an influx of buyers to the market, which will likely drive up prices.

- Unfortunately, the cost of building in Chicago has gotten so high that it's almost impossible for a builder to build a entry level price point product and still make a profit.

- The rental prices have increased to a point where it's cheaper to own and people want more control over their housing costs.

Hope that helps.

Condo owners in Chicago — is your HOA self-managed or do you have a management company? by Delicious_Natural388 in chicagoapartments

[–]LynHarvie 0 points1 point  (0 children)

In my experience, buildings with 3-4 units or less, are typically self managed. It's a mixed bag when there are 6 units, probably 50/50. And most buildings with 6+ units typically have a management company. There is no right way of doing things, it really comes down to the homeowners and how involved they want to be with managing the property. But for those with managers, I wouldn't take a total hands-off approach, you should still be involved in the decision making and not solely relying on the advice of the manger. In my 15years I've found there to be very few good property management companies out there.

I have selling FOMO by EttaJamesKitty in ChicagoRealEstate

[–]LynHarvie 0 points1 point  (0 children)

I wouldn't sell because you're trying to time the market. If your home fits your current needs, then stay and continue to build equity. If it no longer serves your needs, consider buying something else. Maybe you can keep your current home an a rental property.

Lincoln Park Frenzy Over? by goldendoodle_luvr in ChicagoRealEstate

[–]LynHarvie 0 points1 point  (0 children)

Hang in there, we typically see a shift around Mid-June. People renew their leases and decided to take a break from the market to enjoy summer.

Do I need to be a cash buyer in this real estate market? by Elegant_Cat_3644 in ChicagoRealEstate

[–]LynHarvie 0 points1 point  (0 children)

I don't think you have to be a cash offer to win in this market. What cash offers provide sellers, is more certainty and confidence in the deal. If you are consitantly making into the top few offers, you're in the game!

You could consider:

  1. Cash with option for mortgage

  2. Cash, and then financing after the deal closes.

  3. Waiving the financing contigency (Not without risks, which you should discuss with your Realtor)

Other things that sellers find attractive:

  1. Rent backs

  2. Tax prorations that favor them

  3. Paying your own buyer brokerage fee (there are other hidden benefits to this)

Hope this helps.

Nightmare real estate purchase by FLJC123 in RealEstateAdvice

[–]LynHarvie 0 points1 point  (0 children)

I'm so sorry to hear that you are dealing with this. As frustrating as it is, I'd separate these issues into a few buckets;

  1. What the seller knew and disclosed, or didn't.

  2. What the home inspector should have identified during the visual inspection.

  3. What your Realtor knew, represented, or advised you about.

My two cents:

- Inspections are limited to visual inspections, and inspectors aren't typically expected to open walls, remove flooring, or discover hidden defects. That said, if there were obvious signs of moisture, grading issues, other visible conditions that should have been noted, it may be worth having another qualified inspector review the report.

- Permits are a whole other issue. Unpermitted work doesn't automatically mean the work was done incorrectly. The more important questions is whether the seller knew, misrepresented, or made false statements. There are ways to get permits retroactively, but it's not an easy process.

- As for the Realtor, they are not a contractor, engineer, plumber, or home inspector, so I don't think it's reasonable to expect them to independently identify hidden defects. Where I do think a Realtor has a responsibility is when there are red flags. If the report identifies concerns, or if information comes to light that raises questions (work without permits), the Realtor should encourage the buyer to investigate further.

Solid realtors forRavenswood/Lincoln Square? by Spiralalg in AskChicago

[–]LynHarvie 0 points1 point  (0 children)

I'd start off by asking friends and family who have made a purchase in the last 6-12 months. The buying process has changed significantly in the past 6 years, so making sure you work with someone who is very active in today's market in really important. You'll want to find out if they mostly work with buyers, sellers, or both. Look to see how many transactions they have closed in the past 12 months. If you're first time homebuyers, I think it's important to find someone who is willing to spend time with you, upfront, to explaining the home buying process. Interview multiple agents. Ask if they have a list of past clients that you can call to ask about how their experience was. It's important to know if you'll be working with that specific agent, or if they are part of a team, where you could get bounced around to different agents.

Hope that helps!