You Don't Need Perfect Credit to Buy a Home Today

Daily I hear in the media that Banks are not lending and you need to have Perfect credit to get a home loans. This is not true. Yes, minimum requirements have gone up, but when I look at what is actually takes for a First Time Home Buyer or a average person to get a loan it is not much harder. I think the general public remember 2005 when anyone could buy a home or refinance. Back then borrowers who had credit issue and lower credit scores did not want to wait to improve their credit scores because if they waited a month to improve their credit scores the home they wanted to buy was already off the market and the next property sales price went up 5%.
I think back to how easy it was back in 2005 to get a client a loan and think about the clients I have not been able to approve today. With respect to credit I do not see this to be as big of an issue as you might think. Most of the people who are not being approved today could not have been approved in 2005. Borrowers have to wait today if they have credit issues and I counsel them to improve their credit scores. This process can be as quick a a week or up to several months but it is worth it when the borrowers can get the best loan for them. Credit scores are forgiving given there is some time from when delinquencies are reported. Borrowers today are much better at knowing their own credit scores because of the online credit tracking and fraud prevention programs. Anyone who is thinking about buying a home or refinancing in the next year should talk to a Loan Officer and review there credit. We all know having the good credit scores is important, but knowing how your credit scores are effecting your borrowing power is more important.
Here are a few quick tip that can improve your scores.
Pay your bills on time
Keep credit card balances under 30% of the credit limits
Don't open new credit cards to take advantage of 0% offers. Reed the fine print of those offers to see what "transfer fees are"
Don't have more than 3 credit cards
Don't Co Sign For Anyone. unless you are controlling the monthly payments and you are making them.
Try to avoid using 'Finance Companies'

Home Value Issues

Do you know what your home worth? Well our definition of worth is different from what lenders think worth is. I use to say a home is only worth what a person would pay for it. Now I only look at the value of a home as what properties around it have sold for and that includes Foreclosed and Short Sale Homes. In the last year appraisers have started including properties that are foreclosures and short sales in as comparable values in the appraisal report. Foreclosures and Short Sales were the exception in the past but now they have become so common that they are driving down the values of home all around them. Since an appraisal is a report of what a property could sell for or what some one would buy the property for we have to see the effect of all properties that are being sold in the area. If you were selling a home that was identical to a home a bank was selling for 20,000 less your home, your home over priced.




Many people think just because a home was a foreclosure it should not be counted in the values of home that are being sold naturally. The fact, and a sad fact is why would a buyer spend more on your home when they can buy an identical home for less from a bank. Buyers are looking for the most value today. Not all foreclosed homes are run down and beat up.




If you’re not selling your home in the next 2-3 years I would not look at your home as an investment. Too often we looked at homes an investments tool and not what it really is. For most homeowners a home is just that, a HOME. A place to live and raise a family. I am not saying a home can not be an investment but I sleep much easier when I look at my home as a good sound place to live and not like my 401k, or lack of 401k.

FHA Loan limits have been raised!!!!

Today FHA increased loan limits in most counties. In Pima and Maricopa counties, loan limits were raised. This is a very positive sign from FHA that will allow FHA borrowers to buy or refinances larger loans. The housing market should see some positive movement because of these increase. FHA loans have very low fixed rates and do not have as many restrictions as conventional loans do at higher LTV’s (Loan to Values). Pima’s loan limits were raised to $316,250 and Maricopa’s was raised to $346,250


Now in Pima county, a buyer can take advantage is FHA financing that only requires a 3.5% down payment. With a minimum of 3.5% down payment a buyer can purchase a $327,720 home which is up from $280,880 under the old guidelines.


Please check out the link below for a list of all counties.


https://entp.hud.gov/idapp/html/hicost1.cfm


If you’re ready for a FHA loan apply here.

Fannie Mae’s HomePath Program

BEST CONVENTIONAL LOAN OUT THERE FOR BANK REPOS



Fannie Mae’s HomePath programs is a wonderful loan program to help home buyer get great financing on property for sale by Fannie Mae. Borrowers have the option of No Money Down or as little as 3% down payments for these homes. For investors and 2nd Homes only a 10% down payment is required. There are NO APPRISALS and the loan and NO MORTGAGE INSURANCE on these loans even without 20% down... Rates for these loans are low conventional fixed rates.


YES, NO APPRAISAL AND NO MORTGAGE INSURANCE.

Fannie Mae accepts the value of the home as it is and bases the loan amount off of the sales price. No more guess work for what the home is going to appraise for or if there are going to be any problems with the appraisal. I hope everyone understands how important this is. No Appraisal on a purchase with little or no money down is unheard of.


Most buyers who are looking for a great value in a homes look at Bank REPO’s. One major draw back to Bank REPO’s is the conditions these properties are in and the problem with the appraisals. Since Fannie Mae will be financing these homes, they are comfortable with the value and DO NOT REQUIRE AN APPRAISAL!! In today’s market not having to do an appraisal is a HUDE ADVANTAGE in buying a home.


No Mortgage Insurance for these loans is another advantage of this financing. Mortgage Insurance can add hundreds of dollars to your monthly payment. In Arizona it is almost impossible to get conventional financing with only 3% down. The reason for this is the Mortgage Insurance companies are not offering mortgage insurance for loans with less than 5% down, 95% Loan To Value Loans. Buyers of these HomePath homes will not find any better Conventional, VA, or FHA financing!!!


For those buyers who can receive a Community 2nd Mortgage, the HomePath Financing will allow a 2nd mortgage to pay all of the down payment and closing cost not to excide 105% of the sales price. Expanded interested party contributions allow up to 6% of the sales price. This makes it very affordable for buyers. Buyers can actually put no money down from their pocket and move in with 100% financing with NO MORTGAGE INSURANCE.


A list of home that Qualify for this Great Program is available at www.HomePath.com Currently in Tucson there are 156 homes for sale ranging in price from $35,500 to $319,900. In Phoenix there are 830 properties, and in Sierra Vista there are 5 properties. I am not a real estate agent but I looked at the pictures of these home and compared to the property I have see from other Bank REPO’s, these are by far nicer looking properties. This opportunity should be looked at by all buyers in today market.

If the $7500 tax credit was not good enough, It looks like a $15,000 tax credit is on it way..

The Senate has passed a bill the would give a $15,000 tax credit to buyers of a home this year. Last year there was a $7500 credit for first time home buyers (anyone who has not owned a home in the last 3 years). The $7500 tax credit would be paid back over the next 15 years. They new Tax Credit is up to $15,000 or 10% of the purchase price of a home purchased as a primary residence. The House may limit this to lower-incomers before the Bill is sent over to Obama to sign. The new Tax Credit will not be limited to First Time Home Buyers. This will help homeowners who want to buy up or down take advantage of this credit. It is hoped that this will give a jump start to the housing market and lower the supply of homes. Home owners could take advantage of this tax credit to buy an affordable home and with the $15,000 do many upgrades and improvements to the home to increase the value. Local companies and small business will benefit the most from this tax credit money when home owners spend it on their homes. This is the shot in the arm the housing market needs.