Economic Stimulus Plan Benefits the Housing and Mortgage Industries
Revised February 17, 2009
Just signed and sealed…a $787 Billion Stimulus Plan made up of tax cuts and spending programs aims at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II.
Home owners and potential homebuyers stand to gain from key provisions in this stimulus plan. Here is what we know as of today...
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Tax Credit for Homebuyers
First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.
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Additional Housing-Related Provisions
Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.
Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.
Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing—This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs. Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.
Expanding Housing Assistance—This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.
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More Help for Homeowners in the Future
Another thing to keep an eye on in the coming weeks is President Obama’s plan to help struggling borrowers before they are faced with a default on their mortgage.
According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.
While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That’s because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.
The Economic Stimulus Plan is huge, and impacts a number of industries. I’ve highlighted some of the major provisions that may impact you now and in the future.
As always, if you have any questions or would like to discuss how this may specifically impact you, I’d be happy to sit down with you. Just call or email me to set up an appointment.
Friday, December 18, 2009
Tuesday, December 15, 2009
New Tax Credit for Buyers
TAX CREDIT OVERVIEW
Who Gets What?
First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.
What are the Income Caps?
The amount of income someone can earn and qualify for the full amount of the credit has been increased.
Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible
Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
What is the Maximum Purchase Price?
Qualifying buyers may purchase a property with a maximum sale price of $800,000.
What is a Tax Credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.
How Much are First-Time Homebuyers (FTHB) Eligible to Receive?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.
Who is Eligible fort FTHB Tax Credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible.
This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.
As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.
How Much are Current Home Owners Eligible to Receive?
The tax credit program includes a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Can Homebuyers Claim the Tax Credit in Advance of Purchasing a Property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.
Can a Taxpayer Claim a Credit if the Property is Purchased from a Seller with Seller Financing and the Seller Retains Title to the Property?
Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Some examples of this would include a land contract or a contract for deed.
According to the IRS, factors that would demonstrate the ownership of the property would include:
1. Right of possession,
2. Right to obtain legal title upon full payment of the purchase price,
3. Right to construct improvements,
4. Obligation to pay property taxes,
5. Risk of loss,
6. Responsibility to insure the property, and
7. Duty to maintain the property.
Are There Other Restrictions to Taking the FTHB Credit?
Yes. According to the IRS, if any of the following describe a homebuyer’s situation, a credit would not be due:
They buy the home from a close relative. This includes a spouse, parent, grandparent, child or grandchild. (Please see the question below for details regarding purchases from “step-relatives.”)
They do not use the home as your principal residence.
They sell their home before the end of the year.
They are a nonresident alien.
They are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
Their home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
They owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2005, through July 1, 2008.
Can Homebuyers Purchase a Home from a Step-Relative and Still be Eligible for the Credit?
Yes. As long as the person they buy the home from is not a direct blood relative, the purchase would be allowed.
If a Parent (Who Will Not Live In The Property) Cosigns for a Mortgage, Will Their Child Still be Eligible for the Credit?
Yes, provided that the child meets the other requirements for the tax credit.
Who Gets What?
First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.
What are the Income Caps?
The amount of income someone can earn and qualify for the full amount of the credit has been increased.
Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible
Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
What is the Maximum Purchase Price?
Qualifying buyers may purchase a property with a maximum sale price of $800,000.
What is a Tax Credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.
How Much are First-Time Homebuyers (FTHB) Eligible to Receive?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.
Who is Eligible fort FTHB Tax Credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible.
This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.
As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.
How Much are Current Home Owners Eligible to Receive?
The tax credit program includes a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Can Homebuyers Claim the Tax Credit in Advance of Purchasing a Property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.
Can a Taxpayer Claim a Credit if the Property is Purchased from a Seller with Seller Financing and the Seller Retains Title to the Property?
Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Some examples of this would include a land contract or a contract for deed.
According to the IRS, factors that would demonstrate the ownership of the property would include:
1. Right of possession,
2. Right to obtain legal title upon full payment of the purchase price,
3. Right to construct improvements,
4. Obligation to pay property taxes,
5. Risk of loss,
6. Responsibility to insure the property, and
7. Duty to maintain the property.
Are There Other Restrictions to Taking the FTHB Credit?
Yes. According to the IRS, if any of the following describe a homebuyer’s situation, a credit would not be due:
They buy the home from a close relative. This includes a spouse, parent, grandparent, child or grandchild. (Please see the question below for details regarding purchases from “step-relatives.”)
They do not use the home as your principal residence.
They sell their home before the end of the year.
They are a nonresident alien.
They are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
Their home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
They owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2005, through July 1, 2008.
Can Homebuyers Purchase a Home from a Step-Relative and Still be Eligible for the Credit?
Yes. As long as the person they buy the home from is not a direct blood relative, the purchase would be allowed.
If a Parent (Who Will Not Live In The Property) Cosigns for a Mortgage, Will Their Child Still be Eligible for the Credit?
Yes, provided that the child meets the other requirements for the tax credit.
Monday, December 14, 2009
Your Way Home Arizona is running low on Money!
In 2009, Arizona Department of Housing started Your Way Home Arizon to help homeowners purchase forclosed homes. Over the last month Your Way Home Arizona has cut off several Arizona Counties form the progam and last week started limiting zip codes in the remaining counties. Your Way Home Arizona started out with $22 million for 2nd mortgages for buyers of forclosed propertes in Arizona. Hundreds of Arizona homeowners took advantage of this program to purchase these home but now this program is running out of money. Check with your loan officer for up to date details for Your Way Home Arizona.
Thursday, December 10, 2009
How Credit Scores are being lowered by your Credit Limits. Rescoring to the Rescue!!
Over the last 6 month, I have seen an alarming problem for borrower’s credit scores in which they have no control over. Many credit card companies are lowering the credit limit for card holders as the balances are being paid down. I have written several times about how the ratio of a credit card balance to the credit limit can affect your credit score negatively. One way to increase your credit scores is to have less than 30% usage of your credit limit. For example if you have a credit card that has a balance of $300 and your limit is $1000 your credit scores are not going to be affected. If your balance is $900 and your limit is $1000 then your scores are going to be lowered because you are “close to being Maxed” Credit Scores don’t like you being “Maxed Out”
With the “credit crunch” we are currently in many banks are lowering the credit limits on some of their card holders as the balances are being paid down. Banks are doing this to limit their credit exposure, reduce their risk. In doing this, it is directly having a negative effect on the card holder’s credit score because it looks as if they are maxed out even when they are paying down their balances. I am not sure how credit card companies decide on how to reduce theses card holder’s limits but if it is based on credit scores they are adding to the problem.
For several of my clients who are trying to increase their credit scores by paying down their credit usage to under 30%, I have figured out a solution that is not effected by the credit card companies attempts to lower balances.
Rescoring is a process that updates information on credit reports with current information. I pull a credit report on a client who has a credit card (more than one) with a balance that is above 30% usage of credit limit. We then ask the customer to pay down the balance to less than 30%. The customer provides us a statement (usually an on line statement) that show the new balance less than 30%. We take that statement and provide it to our credit reporting company and they forward it to the Credit Bureaus. They Credit Bureaus verify the balance and adds the new balance to the credit report. Then a new credit report is pulled with the new, higher scores. We do not update the credit card limit, so it is not reduced, only the balance is.
This process takes less than a week and can make the difference in receiving an approval or getting a lower rate on your home loan. I have had great success with this process, just yesterday I was able to issue a First Time Home Buyer an Approval after months of trying to pay down balances only to have the banks lower his credit limits. It is very important to work with a loan officer who is experience in this process. There are very specific steps that have to be followed and if they are not your scores will not increase.
With the “credit crunch” we are currently in many banks are lowering the credit limits on some of their card holders as the balances are being paid down. Banks are doing this to limit their credit exposure, reduce their risk. In doing this, it is directly having a negative effect on the card holder’s credit score because it looks as if they are maxed out even when they are paying down their balances. I am not sure how credit card companies decide on how to reduce theses card holder’s limits but if it is based on credit scores they are adding to the problem.
For several of my clients who are trying to increase their credit scores by paying down their credit usage to under 30%, I have figured out a solution that is not effected by the credit card companies attempts to lower balances.
Rescoring is a process that updates information on credit reports with current information. I pull a credit report on a client who has a credit card (more than one) with a balance that is above 30% usage of credit limit. We then ask the customer to pay down the balance to less than 30%. The customer provides us a statement (usually an on line statement) that show the new balance less than 30%. We take that statement and provide it to our credit reporting company and they forward it to the Credit Bureaus. They Credit Bureaus verify the balance and adds the new balance to the credit report. Then a new credit report is pulled with the new, higher scores. We do not update the credit card limit, so it is not reduced, only the balance is.
This process takes less than a week and can make the difference in receiving an approval or getting a lower rate on your home loan. I have had great success with this process, just yesterday I was able to issue a First Time Home Buyer an Approval after months of trying to pay down balances only to have the banks lower his credit limits. It is very important to work with a loan officer who is experience in this process. There are very specific steps that have to be followed and if they are not your scores will not increase.
Two Very Important Updates
I have two important announcements for you!
First, I am thrilled to announce that I can offer your qualified clients a 95% LTV on conventional primary residence financing and 90% LTV on conventional second home financing. Clients must meet certain requirements but this is an option that they will not be able to find anywhere else! Call me for more details.
Also, as you know, I am committed to keeping you up-to-date with all of the changes in the mortgage industry. Recently, Fannie Mae released an announcement that may affect your clients. The following changes will be implemented on new loan files submitted on December 12th.
• The minimum credit score required for loans underwritten using DU has increased from 580 to 620.
• The maximum debt to income ratio allowed for loans underwritten using DU is lowered to 45%, with flexibilities offered up to 50% for certain loan casefiles with strong compensating factors.
• Borrowers with foreclosure completion dates of more than 5 years, but less than 7 years from the credit report date will need 10% down and a minimum credit score of 680 to purchase a principal residence; the purchase of a second home or investment property will not be permitted; and cash-out refinances will not be permitted for any occupancy types.
• If a deed-in-lieu of foreclosure is reported within 4 years of the credit report date, the loan will receive a Refer with Caution recommendation; additionally, a principal residence, purchase transaction submitted to DU with an LTV or CTLV greater than 90% on a loan that has a deed-in-foreclosure action that was completed more than 4 years, but less than 7 years from the credit report date will receive an Ineligible recommendation.
• Loan files where DU identifies a Chapter 13 bankruptcy discharged within the last 24 months, dismissed within the last 48 months or filed within the last 48 months will receive a Refer with Caution recommendation. Loan files where DU identifies a non-Chapter 13 bankruptcy that was filed, discharged or dismissed within the last 48 months will receive a Refer with Caution Recommendation.
• Two-unit owner occupied property purchases or limited cash-out refinances must have an LTV less than or equal to 80%.
• Two Unit non-owner occupied property purchases and limited cash-out refinances must have an LTV less than or equal to 75%. Two Unit non-owner occupied property cash-out refinances must have an LTV less than or equal to 70%.
If you have any clients that have not yet been pre-approved and may be challenged by any of the issues above or if you have any clients that have been approved and an LSR has been issued, but they are still looking for a home, they may be affected by these new guidelines. Please have them call me immediately. If we open a loan file for them before December 12th, we may be able to avoid these new changes. Should you have any questions, please don't hesitate to contact me.
First, I am thrilled to announce that I can offer your qualified clients a 95% LTV on conventional primary residence financing and 90% LTV on conventional second home financing. Clients must meet certain requirements but this is an option that they will not be able to find anywhere else! Call me for more details.
Also, as you know, I am committed to keeping you up-to-date with all of the changes in the mortgage industry. Recently, Fannie Mae released an announcement that may affect your clients. The following changes will be implemented on new loan files submitted on December 12th.
• The minimum credit score required for loans underwritten using DU has increased from 580 to 620.
• The maximum debt to income ratio allowed for loans underwritten using DU is lowered to 45%, with flexibilities offered up to 50% for certain loan casefiles with strong compensating factors.
• Borrowers with foreclosure completion dates of more than 5 years, but less than 7 years from the credit report date will need 10% down and a minimum credit score of 680 to purchase a principal residence; the purchase of a second home or investment property will not be permitted; and cash-out refinances will not be permitted for any occupancy types.
• If a deed-in-lieu of foreclosure is reported within 4 years of the credit report date, the loan will receive a Refer with Caution recommendation; additionally, a principal residence, purchase transaction submitted to DU with an LTV or CTLV greater than 90% on a loan that has a deed-in-foreclosure action that was completed more than 4 years, but less than 7 years from the credit report date will receive an Ineligible recommendation.
• Loan files where DU identifies a Chapter 13 bankruptcy discharged within the last 24 months, dismissed within the last 48 months or filed within the last 48 months will receive a Refer with Caution recommendation. Loan files where DU identifies a non-Chapter 13 bankruptcy that was filed, discharged or dismissed within the last 48 months will receive a Refer with Caution Recommendation.
• Two-unit owner occupied property purchases or limited cash-out refinances must have an LTV less than or equal to 80%.
• Two Unit non-owner occupied property purchases and limited cash-out refinances must have an LTV less than or equal to 75%. Two Unit non-owner occupied property cash-out refinances must have an LTV less than or equal to 70%.
If you have any clients that have not yet been pre-approved and may be challenged by any of the issues above or if you have any clients that have been approved and an LSR has been issued, but they are still looking for a home, they may be affected by these new guidelines. Please have them call me immediately. If we open a loan file for them before December 12th, we may be able to avoid these new changes. Should you have any questions, please don't hesitate to contact me.
Tuesday, December 8, 2009
Nova Home Loans now offers Escrow Holdbacks
NOVA Home Loans is offering escrow holdbacks for purchases that require repairs and is the only mortgage company offering this. These escrow hold backs are for repairs that the appraiser requires and are not financed as they are on HUD $100 down FHA loans. Examples of escrow hold backs NOVA Home Loans are approving are for missing Heating and AC issues, Pool and other repair. These are great for homes that need a little “love” but the seller cannot do the repairs prior to closing. Buyers or Sellers can pay for the escrow holdback. This is a great opportunity for a seller to make their home more attractive and for buyers to purchase a home that might have otherwise had to be financed with a renovation loan. The repairs that are required will have to be completed within 7 days from closing. NOVA will have to approve the escrow hold back for repairs on a case by case basis.
Important Changes to new Fannie Mae Loans
On December 12th 2009 Fannie Mae will make some changes to the underwriting of many loans. Fannie Mae will now require a minimum of 620 FICO score for all borrowers. This will have a little impact on business since we have been helping our borrowers increase their credit score to 640 and above in order to receive better pricing. The major change will affect the maximum debt to income ration. The debt ratio will now be limited to 45% for the borrower’s gross income and for strong borrowers this will be expanded to 50%. Before, Fannie Mae has allowed ratios that were much higher. These changes go into effect for all new loans that are approved through using DU/DO automated findings. It is very important that all borrowers who are looking at buying or refinancing and have high debt to income rations contact their loan officer and get pre- approved before the 12th to insure they receive the finding before December 12th.
Realtors, this is a perfect time to remind your buyers who are on the “fence” that these changes could affect their buying ability. Loans under the old findings will need to be closed before January 30, 2010. Please contact your loan officer to learn about the other changes that go into effect on the 12th.
Realtors, this is a perfect time to remind your buyers who are on the “fence” that these changes could affect their buying ability. Loans under the old findings will need to be closed before January 30, 2010. Please contact your loan officer to learn about the other changes that go into effect on the 12th.
Friday, December 4, 2009
Please Join me for the SAMLA (Southern Arizona Mortgage Lenders Associations) 2010 Installation Lunch
I will on the Board of Directors for SAMLA in 2010. Please join me for this luncheon to see what SAMLA is doing in 2010. We will also have Barry Habib speaking at this event. Barry is one of Americas top Loan Officer. Please see the flyer below for more details.
SAMLA January Lunch Flyer
SAMLA January Lunch Flyer
Thursday, October 29, 2009
Looks like the $8,000 first time home buyers tax credit will be extended to April 30, 2010!!!
http://www.bloomberg.com/apps/news?pid=20601087&sid=aoI9KTlHpwzI
Tuesday, October 6, 2009
Come see me this weekend at the SAHBA Home and Garden Show!!!
Come see me at the Nova Home Loans booth this weekend at the SAHBA Home and Garden Show. I will be there Friday Oct. 9th between 4pm and 8pm, Saturday Oct. 10th 4pm to 8pm and Sunday Oct. 11th 12pm and 6pm.
I look forward to see you there!!
I look forward to see you there!!
Thursday, October 1, 2009
Freddie Mac Relief Open Access Program STARTS TODAY
Freddie Mac Relief Open Access Program STARTS TODAY. Borrowers who have a loan that was purchased by Freddie Mac in the past and is now upside down can refinance the balance up 125% of the appraised value to lower their interest rate and or convert a ARM loan to a fixed rate!!! This is great news that will help many home owners take advantage of the current low rates. BTW no minimum credit score required!!
Monday, September 28, 2009
Sikku??? What is Sikku?
If you are buying a home, know someone who is buying or just want to keep track of what is going on in the housing market, Sikku.com is for you. From your phone you can find out all the details on the listing price of a home, value of a home, public records on a property and Sikku will let you know if a sales price changes on homes you track. This all can be done by text. Go to http://www.sikku.com/default.aspx?tabname=Register%20Text&iaid=124511 to sign up today. I will credit my clients the cost of this service at closing when I close your loan. It is time to be informed and this is a wonderful tool that does just that!!!
Monday, June 29, 2009
Financial Market Updates June3 29th
Will Fed News Become Good News?
Click on this article to view.
http://www.mmgweekly.com/w/index.html?SID=e335123b12e0f5cec402ab04e2ea9870
Click on this article to view.
http://www.mmgweekly.com/w/index.html?SID=e335123b12e0f5cec402ab04e2ea9870
Wednesday, June 3, 2009
Up to 22% down payment assistance is on its way to Pima County home buyers!!
Stay tuned, but we are expecting a new program for Pima County home buyers that will help out with up to 22% of a borrower’s down payment and closing costs. The 22% will be a deferred low interest rate with a no payment 2nd mortgage. The 2nd mortgage can be forgiven after a period of time. More details should be out on June 19, 2009 and the program is expected to be up and running on July 1st. So far I know that it is going to come from the Arizona Department of Housing and will be for buyers for foreclosed and banked owned properties. I expect this to boost the number of foreclosed and banked own properties sales. These sales tend to drive down the values of homes in neighborhoods because the banks that own these homes are desperate to sell them. Now they can sell these homes for a little more because many more home owners will have access to down payment and closing cost money.
I do not have any details yet but as soon as I do I will post the info.
I do not have any details yet but as soon as I do I will post the info.
Friday, May 29, 2009
Home Path Financing is taking off
Over the last 3 weeks application for Home Path financing have picked up. Home Path is a program that Fannie Mae is offering to buyers who want to buy homes that Fannie Mae own from foreclosures. Fannie Mae’s Home Path Financing allows for a minimum of 5% down payment, NO MORTGAGE INSURANCE and does not require an appraisal. The fact that these loans do not require mortgage insurance is a major benefit to buyers ability to purchase affordable homes. Interest rates are low and coupled with the fact these home do not require an appraisal this is a very attractive option.
Many home owners who have thought about putting up to 20% down on a purchase of a home are finding it more resalable to take advantage of the minimum down payment and keep their cash for expenses once they move in. Many of my buyers of Home Path homes are telling my, they are amazed about the good conditions many of these homes are in. This makes buying a foreclosed home from Home Path more attractive compared to other foreclosed homes that are not in as good of condition.
For Home Path financing, Fannie Mae have been paying up to 6% of the Buyers closing costs. In most cases this is more than the needed closing costs and we are using the additional closing costs to buy down (paying discount points) the borrowers interest rate in order to get the buyers an even lower rate.
Qualifying for Home Path is pretty easy. We are looking for credit scores above 620 and be able to prove all income and assets. For borrowers who have less than 620 credit scores we are offering FHA loans and we will also help direct buyers in the right direction to improve their credit scores. This is a great program for First Time Home Buyers.
Many home owners who have thought about putting up to 20% down on a purchase of a home are finding it more resalable to take advantage of the minimum down payment and keep their cash for expenses once they move in. Many of my buyers of Home Path homes are telling my, they are amazed about the good conditions many of these homes are in. This makes buying a foreclosed home from Home Path more attractive compared to other foreclosed homes that are not in as good of condition.
For Home Path financing, Fannie Mae have been paying up to 6% of the Buyers closing costs. In most cases this is more than the needed closing costs and we are using the additional closing costs to buy down (paying discount points) the borrowers interest rate in order to get the buyers an even lower rate.
Qualifying for Home Path is pretty easy. We are looking for credit scores above 620 and be able to prove all income and assets. For borrowers who have less than 620 credit scores we are offering FHA loans and we will also help direct buyers in the right direction to improve their credit scores. This is a great program for First Time Home Buyers.
Saturday, May 2, 2009
HOME VALUATION CODE OF CONDUCT (HVCC)
In December 2008 the Federal Housing Finance Agency approved the Home Valuation Code of Conduct (Code) to be implemented May 1, 2009. The code modifies Fannie Mae and Freddie Mac seller-servicer guidelines to improve the reliability of home appraisals and to restore appraiser independence. The aim of the code is to assure that all parties involved in the mortgage market will receive fair and independent property valuations. Among other changes, the code sets in place new
rules and regulations governing
The process for ordering appraisals
Appraiser independence
Improper influences on appraisers
May 1st was the start of HVCC. This is Fannie Mae and Freddie Mac so called solutions to appraisers over estimating home values. Before May 1st Mortgage companies could directly order an appraisal from an appraiser. HVCC requires mortgage companies to order appraisals through and appraisal management company. It is thought that this will stop contact between loan officer/mortgage companies and appraiser. HVCC wants to stop loan officer/mortgage companies from influencing appraiser to bring in homes at certain inflated values.
What does this mean to borrowers. The cost of appraisals will go up. I am seeing a $25.00 increase. Turn around times will be longer and in many causes the quality of the appraisals will go down. The reason for this is most mortgage companies will use a national appraisal management company. National appraisal companies charge up to $400 for an appraisal and only pay the appraiser about $200 for an appraisal. Most of the best appraisers who have experience will not work for $200 for an appraisal. This leave allot of the work to be done by appraisers who are less experienced and will be forced to turn out appraisal like a factory.
Nova Home Loans works with Accurate Appraisal Management a Tucson based company who pays their appraisers more than a national management company, guaranties a 5 day turn around time and charges the borrower only $375 for most report. Accurate appraiser list is loaded with top quality appraisers who know the local ares and are proven appraisers. This insures Nova Home Loan borrowers receive the best quality appraisals available. This is another advantage of borrowers working with Nova Home Loans.
rules and regulations governing
The process for ordering appraisals
Appraiser independence
Improper influences on appraisers
May 1st was the start of HVCC. This is Fannie Mae and Freddie Mac so called solutions to appraisers over estimating home values. Before May 1st Mortgage companies could directly order an appraisal from an appraiser. HVCC requires mortgage companies to order appraisals through and appraisal management company. It is thought that this will stop contact between loan officer/mortgage companies and appraiser. HVCC wants to stop loan officer/mortgage companies from influencing appraiser to bring in homes at certain inflated values.
What does this mean to borrowers. The cost of appraisals will go up. I am seeing a $25.00 increase. Turn around times will be longer and in many causes the quality of the appraisals will go down. The reason for this is most mortgage companies will use a national appraisal management company. National appraisal companies charge up to $400 for an appraisal and only pay the appraiser about $200 for an appraisal. Most of the best appraisers who have experience will not work for $200 for an appraisal. This leave allot of the work to be done by appraisers who are less experienced and will be forced to turn out appraisal like a factory.
Nova Home Loans works with Accurate Appraisal Management a Tucson based company who pays their appraisers more than a national management company, guaranties a 5 day turn around time and charges the borrower only $375 for most report. Accurate appraiser list is loaded with top quality appraisers who know the local ares and are proven appraisers. This insures Nova Home Loan borrowers receive the best quality appraisals available. This is another advantage of borrowers working with Nova Home Loans.
Friday, May 1, 2009
Mortgage Update for the weekend
Mortgage bond prices fell last week applying upward pressure on mortgage interest rates. Trading remained extremely volatile with daily swings of 3/8’s in discount points a common occurrence. The economic data released was mixed with no clear indication of the direction of the US economy. The Federal Reserve met last week and the governing body indicated the pace of economic deterioration is slowing.
The employment report to be released next Friday will be the most significant data this coming week. Productivity data will be important also. Additional debt supply hits the market this week with the Fed auctioning $71 billion of 3, 10, and 30 year Treasuries. It will be interesting to see if the market can continue to absorb the additional debt.
So far the Fed has been able to keep mortgage interest rates relatively low while not destroying the functioning secondary market where investors buy and sell mortgage bonds. The potential negative is that the Fed has become the primary purchaser of these bonds. In the short term take advantage of these advantageous rates. There is uncertainty how things will play out once the Fed begins to unwind those positions in the futures.
FHA announced last month an increase in lending limits for both traditional loans as well as Reverse Mortgages. Pima County was raised from $271,050 back up to $316,250. Maricopa was raised to $346,250. Feel free to follow the link to HUD's website for all other counties in AZ. https://entp.hud.gov/idapp/html/hicost1.cfm This is welcomed news for your buyers looking to put down as little as 3.5% and for your sellers in these higher priced ranges. This will open up more properties that will be available for FHA financing. Keep in mind, Nova still does offer 95% financing for conforming limits up to $417k.
Please make note that Nova Home Loans still allows FICO scores as low as 580 for FHA & VA loans. However, Nova is considering increasing our minimum FICO score requirements from 580 to 600. This change can happen as early as next week. If you have any FHA or VA buyers that have a FICO score of 580-599, they need to identify a property and allow us to lock their loan in under current guidelines before they change.
The employment report to be released next Friday will be the most significant data this coming week. Productivity data will be important also. Additional debt supply hits the market this week with the Fed auctioning $71 billion of 3, 10, and 30 year Treasuries. It will be interesting to see if the market can continue to absorb the additional debt.
So far the Fed has been able to keep mortgage interest rates relatively low while not destroying the functioning secondary market where investors buy and sell mortgage bonds. The potential negative is that the Fed has become the primary purchaser of these bonds. In the short term take advantage of these advantageous rates. There is uncertainty how things will play out once the Fed begins to unwind those positions in the futures.
FHA announced last month an increase in lending limits for both traditional loans as well as Reverse Mortgages. Pima County was raised from $271,050 back up to $316,250. Maricopa was raised to $346,250. Feel free to follow the link to HUD's website for all other counties in AZ. https://entp.hud.gov/idapp/html/hicost1.cfm This is welcomed news for your buyers looking to put down as little as 3.5% and for your sellers in these higher priced ranges. This will open up more properties that will be available for FHA financing. Keep in mind, Nova still does offer 95% financing for conforming limits up to $417k.
Please make note that Nova Home Loans still allows FICO scores as low as 580 for FHA & VA loans. However, Nova is considering increasing our minimum FICO score requirements from 580 to 600. This change can happen as early as next week. If you have any FHA or VA buyers that have a FICO score of 580-599, they need to identify a property and allow us to lock their loan in under current guidelines before they change.
Friday, April 17, 2009
Fannie Mae Refinance Plus Yes Refinance without equity!!!!
Fannie Mae is offering home owners who have seen the value of their homes go down an option to refinance up to 105% of the current value of the home at rock bottom rates. The very best part of this is that if your current loan does not have mortgage insurance it will not need mortgage insurance even it the loan is over 80% of the appraised value. Some other great parts of Refinance Plus is if you had a “combo loan” like a 80/20 to avoid mortgage insurance you can still refinance the first mortgage up to 105% loan to value with out having mortgage insurance.
Many properties will not need an appraisal and the income documentation has been reduced also. There is no minimum credit scores required and most residential properties qualify.
For loans that currently have mortgage insurance, when you refinance your mortgage insurance rate will not go up. Most problems people are facing now when refinancing is not being able to receive mortgage insurance or the new mortgage insurance is so expensive that the savings are loss even with the lower rates. Refinance Plus keeps your mortgage insurance rate were they were before.
Contact me today to see if your loan will qualify for this wonderful money savings loan.
Many properties will not need an appraisal and the income documentation has been reduced also. There is no minimum credit scores required and most residential properties qualify.
For loans that currently have mortgage insurance, when you refinance your mortgage insurance rate will not go up. Most problems people are facing now when refinancing is not being able to receive mortgage insurance or the new mortgage insurance is so expensive that the savings are loss even with the lower rates. Refinance Plus keeps your mortgage insurance rate were they were before.
Contact me today to see if your loan will qualify for this wonderful money savings loan.
Tuesday, April 7, 2009
Rates could get better today!!
MBS (mortgage-backed securities) opened up today due to some more bad financial news about how wide the financial mess is. Stocks are lower on news that the International Monetary Fund will reportedly release new forecasts that suggest toxic assets in the US could reach about $3 Trillion, which is $1 Trillion more than the forecast three months ago. Investors will sell off stocks and move their money into more secure investments such as MBS. The more money coming into MBS the lowers the rates get on mortgage loans.
Friday, April 3, 2009
Mortgage Market News
Mortgage bond prices fell last week applying upward pressure on mortgage interest rates. The bond market continued to come under pressure from significantly stronger stocks. The DOW shot towards the 8,000 mark despite data releases that showed continued economic weakness. Most worrisome were the many reports that indicated people continue to lose jobs. Consumers find it difficult to spend without a job or with the fear their job may be in peril. The weaker than expected consumer sentiment data provided evidence of that fear.
Inflation is typically the most important focus for the mortgage interest rate market. Inflation remains a concern as the Federal Government continues to print and spend money in an effort to spur the economy. Unfortunately, mortgage interest rates also continue to be pushed around by gyrating stocks and weak demand as performance uncertainty looms and the Fed has become the primary buyer of mortgage-backed securities. Most of the recent increases in interest rates have come following stronger stocks. The Fed continues to pump billions of dollars into the market to try to keep mortgage interest rates relatively low and steady. Up until this past week they have done a pretty good job of accomplishing that task. Remember, the Fed is not the only player in the game and selling pressure continues.
The level of interest rates reflects the balance between the supply of money from investors and the demand for money by borrowers. Rising inflationary expectations and uncertainty about the performance of the debt cause investors to require higher rates of return on investments to compensate for the erosion of the principal that eventually is returned to them or the risk of non-performance. Regardless of inflation levels, though, rising economic activity can increase the demand for investors’ funds, and thereby lead to higher interest rates. Investors pulling money out of bonds and into stocks have recently pressured mortgage rates.
The demand for money diminishes as the economy struggles. The Fed lowers interest rates as an incentive to businesses and consumers to increase their borrowings. The Fed hopes manufacturers will increase their investments in plants, equipment and inventories and that consumers will push housing construction along with consumer spending and with that, consumer debt.
Analysts will monitor this next week’s consumer credit levels. There is much debate in the financial community about the future. Economists, market analysts, and traders all seem to have a different opinion about the future state of the economy and especially whether or not we have hit the bottom of the economic slide. One thing most market participants agree on is both the bond and stock markets are going to see additional volatility.
So far the Fed has been able to keep mortgage interest rates relatively low while not destroying the functioning secondary market where investors buy and sell mortgage bonds. The potential negative is that the Fed has become the primary purchaser of these bonds. In the short term take advantage of these advantageous rates. There is uncertainty how things will play out once the Fed begins to unwind those positions in the futures.
FHA announced last month an increase in lending limits for both traditional loans as well as Reverse Mortgages. Pima County was raised from $271,050 back up to $316,250. Maricopa was raised to $346,250. Feel free to follow the link to HUD's website for all other counties in AZ.
This is welcomed news for your buyers looking to put down as little as 3.5% and for your sellers in these higher priced ranges. This will open up more properties that will be available for FHA financing. Keep in mind, Nova still does offer 95% financing for conforming limits up to $417k.
Please give me a call if you have any financial questions or if you need a second opinion on a loan scenario.
Inflation is typically the most important focus for the mortgage interest rate market. Inflation remains a concern as the Federal Government continues to print and spend money in an effort to spur the economy. Unfortunately, mortgage interest rates also continue to be pushed around by gyrating stocks and weak demand as performance uncertainty looms and the Fed has become the primary buyer of mortgage-backed securities. Most of the recent increases in interest rates have come following stronger stocks. The Fed continues to pump billions of dollars into the market to try to keep mortgage interest rates relatively low and steady. Up until this past week they have done a pretty good job of accomplishing that task. Remember, the Fed is not the only player in the game and selling pressure continues.
The level of interest rates reflects the balance between the supply of money from investors and the demand for money by borrowers. Rising inflationary expectations and uncertainty about the performance of the debt cause investors to require higher rates of return on investments to compensate for the erosion of the principal that eventually is returned to them or the risk of non-performance. Regardless of inflation levels, though, rising economic activity can increase the demand for investors’ funds, and thereby lead to higher interest rates. Investors pulling money out of bonds and into stocks have recently pressured mortgage rates.
The demand for money diminishes as the economy struggles. The Fed lowers interest rates as an incentive to businesses and consumers to increase their borrowings. The Fed hopes manufacturers will increase their investments in plants, equipment and inventories and that consumers will push housing construction along with consumer spending and with that, consumer debt.
Analysts will monitor this next week’s consumer credit levels. There is much debate in the financial community about the future. Economists, market analysts, and traders all seem to have a different opinion about the future state of the economy and especially whether or not we have hit the bottom of the economic slide. One thing most market participants agree on is both the bond and stock markets are going to see additional volatility.
So far the Fed has been able to keep mortgage interest rates relatively low while not destroying the functioning secondary market where investors buy and sell mortgage bonds. The potential negative is that the Fed has become the primary purchaser of these bonds. In the short term take advantage of these advantageous rates. There is uncertainty how things will play out once the Fed begins to unwind those positions in the futures.
FHA announced last month an increase in lending limits for both traditional loans as well as Reverse Mortgages. Pima County was raised from $271,050 back up to $316,250. Maricopa was raised to $346,250. Feel free to follow the link to HUD's website for all other counties in AZ.
This is welcomed news for your buyers looking to put down as little as 3.5% and for your sellers in these higher priced ranges. This will open up more properties that will be available for FHA financing. Keep in mind, Nova still does offer 95% financing for conforming limits up to $417k.
Please give me a call if you have any financial questions or if you need a second opinion on a loan scenario.
Thursday, April 2, 2009
Changes to Mark to Market are coming.
For Months we have been saying once the Financial Accounting Standards Board (FASB) changed their stance on mark-to-market accounting there would be a large improvement in the ability of financial institutions to be profitable. Today FASB voted to relax the accounting methods financial institutions can use to mark assets. The big change is to allow financial companies to use alternate models, like cash flow analysis, in marking assets. This enormous change will significantly reduce the writedowns banks have been taking on investments like mortgage-backed securities. These writedowns had forced companies to sell good assets and write down bad one while they were still performing but the value of the asset (such as a appraised value of a home loan) had gone down.
FASB finally understood that there was still value in assets such as home loans if the loans were still performing. Today the stock market is up due to this ruling and we expect to see the market to rally off of this.
For mortgage rates this will be positive since investors will be willing to now invest in MBS (Mortgage Backed Securities) again and not have to worry about the forced writedowns of the FASB 157 ruling. Currently the Fed were the major buyers in MBS The Feds involvement in buying MBS had pushed rates down and now if there is additional cash flowing into MBS we can expect to see continued low rates and maybe more expansion of some mortgage products for homeowners.
FASB finally understood that there was still value in assets such as home loans if the loans were still performing. Today the stock market is up due to this ruling and we expect to see the market to rally off of this.
For mortgage rates this will be positive since investors will be willing to now invest in MBS (Mortgage Backed Securities) again and not have to worry about the forced writedowns of the FASB 157 ruling. Currently the Fed were the major buyers in MBS The Feds involvement in buying MBS had pushed rates down and now if there is additional cash flowing into MBS we can expect to see continued low rates and maybe more expansion of some mortgage products for homeowners.
2009 Tucson Home and Patio Show
Starting tomorrow the 2009 Tucson Home and Patio Show will be held at the TCC. I will be at the Nova Home Loan booth #1216 Friday April 3rd 2-8, Saturday April 4th 2-8 and Sunday April 5th 11-4. Stop by to register to win a $250 Target Gift Card.
I look forward to seeing you there.
I look forward to seeing you there.
Tuesday, March 31, 2009
FHA with less than 620 credit scores and cash out updates.
Over the last 3 months, most lenders have increased the minimum credit scores needed for an FHA loan to 620. Nova still have minimum credit scores of 580 for FHA loans and in many cases require no NO minimum credit scores for Streamlined refinances. We still have less than 30 day closings where most other lenders are 60-90 days in underwriting. Our FHA loans are still prices lower in rates and in fees compared to our competition. For several FHA loans we have seen rates as low as 4.625% for 30 year fixed rates. FHA Streamlines as low as 5%!!! If you have a FHA loan and your rate is 5.5% or higher you should have your loan reviewed.
FHA cash out loans will temporally have the maximum loan to value capped at 85%. FHA is trying to lower its exposure to being the only option for borrowers cashing out equity above 85%. We do no know when FHA will go back to allowing borrowers to cash out up to 95%. I would assume it will be several months before FHA will start 95% cash outs again.
FHA cash out loans will temporally have the maximum loan to value capped at 85%. FHA is trying to lower its exposure to being the only option for borrowers cashing out equity above 85%. We do no know when FHA will go back to allowing borrowers to cash out up to 95%. I would assume it will be several months before FHA will start 95% cash outs again.
Monday, March 9, 2009
How is your FICO Score Based?
Here are the Facts on what makes up your FICO score. This information is provided by Advantage Credit of Colorado.
Payment History = 35%
Do you pay your credit on time?
Length of Positive credit history.
Severity and quantity of delinquencies
Amount Owed = 30%
Quantity of credit Accounts – too many credit cards with balances can lower a score.
Keep balances to 10% of high credit.
Length of credit history = 15%
The longer the credit history, the better.
How long have your credit accounts been established?
How long has it been since you used certain accounts?
New Credit = 10%
Research shows that opening several credit accounts in a short period of time does represent greater risk – especially for people who do not have a long established credit history.
The Healthy Credit Mix
2 installment loans
3 revolving accounts with balances
Revolving debt balances below 10% of high credit
No collections accounts, public records, foreclosures or last payments
Accounts with long payments history and no balances
Payment History = 35%
Do you pay your credit on time?
Length of Positive credit history.
Severity and quantity of delinquencies
Amount Owed = 30%
Quantity of credit Accounts – too many credit cards with balances can lower a score.
Keep balances to 10% of high credit.
Length of credit history = 15%
The longer the credit history, the better.
How long have your credit accounts been established?
How long has it been since you used certain accounts?
New Credit = 10%
Research shows that opening several credit accounts in a short period of time does represent greater risk – especially for people who do not have a long established credit history.
The Healthy Credit Mix
2 installment loans
3 revolving accounts with balances
Revolving debt balances below 10% of high credit
No collections accounts, public records, foreclosures or last payments
Accounts with long payments history and no balances
Thursday, March 5, 2009
You may need to have a 580 credit score now for an FHA loan. Act Now!!
In the last 3 to 4 months many mortgage companies have increased the minimum credit score needed for an FHA loan. It is no surprise this is happening but I have not seen a much of a drop in volume due to increased minimum credit scores. It won’t be too long until the minimum is 620. What I am seeing are borrowers who have higher credit scores not being approved because FHA wants to see borrowers have a little in savings after closing. This is called ‘reserves’ and all it means is that after the borrower closes on a home loan they have a month or 2 of their monthly mortgage payments saved up.
Having a few months in ‘reserves’ will make a big difference for getting approved for a home loan or not. In the last week I have seen this first hand for two different borrowers. The first borrower has a 615 credit scores but has no money for reserves. I could not get his application approved for a FHA loan. If he had 2 months in reserves he would be approved. The 2nd borrower has a 589 credit score and had 3 months in reserves and was approved or a FHA loan.
Both borrowers are working on increasing their credit scores to get lower interest rates and the first borrower has actually asks his parents to gift him some money so he can have enough for the down payment and 2 months of reserves then he will be approved for the FHA loan.
For Borrowers with less than 580 credit score you need to get in and talk to me about increasing your scores. It won’t be to long before the minimum credit score for FHA loans 620. Call contact me today!!
Having a few months in ‘reserves’ will make a big difference for getting approved for a home loan or not. In the last week I have seen this first hand for two different borrowers. The first borrower has a 615 credit scores but has no money for reserves. I could not get his application approved for a FHA loan. If he had 2 months in reserves he would be approved. The 2nd borrower has a 589 credit score and had 3 months in reserves and was approved or a FHA loan.
Both borrowers are working on increasing their credit scores to get lower interest rates and the first borrower has actually asks his parents to gift him some money so he can have enough for the down payment and 2 months of reserves then he will be approved for the FHA loan.
For Borrowers with less than 580 credit score you need to get in and talk to me about increasing your scores. It won’t be to long before the minimum credit score for FHA loans 620. Call contact me today!!
Wednesday, March 4, 2009
Obama’s plan to head off millions of foreclosures??
Today Obama’s plan to save millions of homeowners from foreclosure was released. It appears to be an outline and more details are to come. The Treasury said that it is going to take some time to find out how many of the estimated 9 million borrowers this plan is targeted to help.
The plan is going to provide a standard for Mortgage Servicers to determine and to speed approval for more affordable loans to borrowers in trouble. Mortgage Servicers are the companies who receive mortgage payments for the investors of the mortgages. Currently Mortgage Servicers are over whelmed with borrowers requests for help to avoid the loss of their home. Many Mortgage Servicers will not help borrowers in trouble because the investors in the mortgage will not allow them.
The plan is hoping to help 2 groups of homeowners. First, homeowners who can no longer afford their homes because of loss of job/income, who are in loans that interest rate changed because of Adjustable Rate Mortgage, or borrower who did “liers” stated income loans to qualify for the home loan.
The 2nd group are borrowers who can not refinance because of their home is valued at less than what they currently owe. These borrowers are up side down and the Treasury is looking at allowing borrowers to refinance up to 150% of the current value of their home.
What you need to do to qualify for these “affordable loans”.
You must live in the house. Primary Residences only. No 2nd homes or investment propertied.
Borrowers in Bankruptcy may be eligible
The max loan is $729,750 Up to $1.4 million for multi family homes.
You will have to prove you are in default or facing default.
The plan will look at a 3 step process to lower your monthly mortgage payment to 31% of your gross income.
1st they will look at lowering your interest rate. The rate may be as low as 2%. The Treasury expects 70% of eligible borrowers to be offered these affordable terms.
2nd If lowering the interest rate is not enough then they will extend the term of the mortgage up to 40 years. This will help an estimated 20% of eligible borrowers.
3rd. And if the lower rate and longer term does not reduce the monthly payment to 31% of the borrowers income then they will look at reducing part of the principle balance and adding it to the end of the loan with a balloon payment.
There are many unanswered questions and major potential problems with this plan. The plan only addresses 1st mortgages and not 2nd mortgage and HELOC. It also is trying to help homeowners who did not buy more home than they could afford. It does not state how they will determine “more than they could afford”. It does not address homeowners who refinanced after they purchased their home. Mortgage Servicers my face law suites from investors who will have their returns lowered by reducing interest rates for these buyers. This is was not addressed and I would assume No Mortgage Servicers is going to lowers a borrowers interest rate to 2% with out the approval from the investor.
We don’t know when the plan will go into effect. I sure the Mortgage Servecers and Investors will have to come to agreements with the Treasury before this Plan goes into effect. Once this is done we will see how many homeowners this actually helps. I hope it is a lot because this could stop the problem with home values falling because of foreclosures and short sales.
Subscribe for My Market Blog or check back often for updates.
The plan is going to provide a standard for Mortgage Servicers to determine and to speed approval for more affordable loans to borrowers in trouble. Mortgage Servicers are the companies who receive mortgage payments for the investors of the mortgages. Currently Mortgage Servicers are over whelmed with borrowers requests for help to avoid the loss of their home. Many Mortgage Servicers will not help borrowers in trouble because the investors in the mortgage will not allow them.
The plan is hoping to help 2 groups of homeowners. First, homeowners who can no longer afford their homes because of loss of job/income, who are in loans that interest rate changed because of Adjustable Rate Mortgage, or borrower who did “liers” stated income loans to qualify for the home loan.
The 2nd group are borrowers who can not refinance because of their home is valued at less than what they currently owe. These borrowers are up side down and the Treasury is looking at allowing borrowers to refinance up to 150% of the current value of their home.
What you need to do to qualify for these “affordable loans”.
You must live in the house. Primary Residences only. No 2nd homes or investment propertied.
Borrowers in Bankruptcy may be eligible
The max loan is $729,750 Up to $1.4 million for multi family homes.
You will have to prove you are in default or facing default.
The plan will look at a 3 step process to lower your monthly mortgage payment to 31% of your gross income.
1st they will look at lowering your interest rate. The rate may be as low as 2%. The Treasury expects 70% of eligible borrowers to be offered these affordable terms.
2nd If lowering the interest rate is not enough then they will extend the term of the mortgage up to 40 years. This will help an estimated 20% of eligible borrowers.
3rd. And if the lower rate and longer term does not reduce the monthly payment to 31% of the borrowers income then they will look at reducing part of the principle balance and adding it to the end of the loan with a balloon payment.
There are many unanswered questions and major potential problems with this plan. The plan only addresses 1st mortgages and not 2nd mortgage and HELOC. It also is trying to help homeowners who did not buy more home than they could afford. It does not state how they will determine “more than they could afford”. It does not address homeowners who refinanced after they purchased their home. Mortgage Servicers my face law suites from investors who will have their returns lowered by reducing interest rates for these buyers. This is was not addressed and I would assume No Mortgage Servicers is going to lowers a borrowers interest rate to 2% with out the approval from the investor.
We don’t know when the plan will go into effect. I sure the Mortgage Servecers and Investors will have to come to agreements with the Treasury before this Plan goes into effect. Once this is done we will see how many homeowners this actually helps. I hope it is a lot because this could stop the problem with home values falling because of foreclosures and short sales.
Subscribe for My Market Blog or check back often for updates.
Saturday, February 28, 2009
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'
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'
Wednesday, February 25, 2009
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.
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.
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.
Tuesday, February 10, 2009
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.
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.
Sunday, February 8, 2009
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.
Monday, January 26, 2009
Refinancing with NO Equity
Today there are many homeowners who could benefit from the great low rates but feel they can not because of a lack of equity. Homeowners should know there are many options available to them for refinancing without equity. Depending on the type of the loan you have there are options to look at.
Homeowners with FHA and VA loans.
FHA and VA offer refinancing options for homeowners without having to go through the whole loan process. FHA offers the FHA Streamline Refinance. The streamline lets the homeowner refinance the balance of their current FHA loan into a lower rate loan without an appraisal, without proof of income or employment. Current Home Values do not matter!! Customer who can drop their rate by .5% or more should look into this option. Most lenders do not charge any origination fees and most times cover other closing cost. FHA borrowers will receive a refund of the previous up front mortgage insurance and on the new loan normal up front mortgage insurance will be charged. VA offers the Interest Rate Reduction Refinance Loan (IRRRL). This is very similar to the FHA streamline. The main difference is the VA IRRRL only charges a .5% funding fee.
Homeowners with 80/20 combo loans
Again we will take advantage of a FHA loan to refinance the 1st mortgage and leave the 2nd mortgage where it is. Many homeowners purchased homes in the past with the 80/20 combo loan to avoid mortgage insurance. Many of these 80/20 combo loans had adjustable 1st mortgages and a fixed rate 2nd mortgage. Since FHA allows for you to refinance the 1st mortgage up to 97% Loan to Value and still have a 2nd mortgage, this is a wonderful solution for homeowners. Your home does not need to appraise high enough to cover the 2nd mortgage. Here is a common example.
Homeowner has an 80/20 combo loan. They purchased the home for $100,000. Their 1st mortgage is for $80,000 and the 2nd for $20,000. Their rate for the 1st mortgage was 7.00% adjustable and the 2nd was 8% fixed. Today their home will only appraise for $90,000. We would refinance the 1st mortgage balance into a fixed rate at 5.125% today and ask the 2nd mortgage to subordinate their 2nd mortgage. In simple terms allow us to redo the 1st mortgage with out paying off the 2nd mortgage. If the 2nd mortgage company will allow this, it will be the best solution to having a high rate adjustable 1St mortgage. Since the 2nd Mortgage is a fixed rate and there is no equity in the property to pay off the 2nd mortgage, it is not important to refinance the 2nd mortgage as it is the 1st mortgage.
Before you give up on refinancing because you don’t think you have equity, call your loan officer and ask them about these options and other options that may be available to you. It may save you thousands of dollars in interest.
Homeowners with FHA and VA loans.
FHA and VA offer refinancing options for homeowners without having to go through the whole loan process. FHA offers the FHA Streamline Refinance. The streamline lets the homeowner refinance the balance of their current FHA loan into a lower rate loan without an appraisal, without proof of income or employment. Current Home Values do not matter!! Customer who can drop their rate by .5% or more should look into this option. Most lenders do not charge any origination fees and most times cover other closing cost. FHA borrowers will receive a refund of the previous up front mortgage insurance and on the new loan normal up front mortgage insurance will be charged. VA offers the Interest Rate Reduction Refinance Loan (IRRRL). This is very similar to the FHA streamline. The main difference is the VA IRRRL only charges a .5% funding fee.
Homeowners with 80/20 combo loans
Again we will take advantage of a FHA loan to refinance the 1st mortgage and leave the 2nd mortgage where it is. Many homeowners purchased homes in the past with the 80/20 combo loan to avoid mortgage insurance. Many of these 80/20 combo loans had adjustable 1st mortgages and a fixed rate 2nd mortgage. Since FHA allows for you to refinance the 1st mortgage up to 97% Loan to Value and still have a 2nd mortgage, this is a wonderful solution for homeowners. Your home does not need to appraise high enough to cover the 2nd mortgage. Here is a common example.
Homeowner has an 80/20 combo loan. They purchased the home for $100,000. Their 1st mortgage is for $80,000 and the 2nd for $20,000. Their rate for the 1st mortgage was 7.00% adjustable and the 2nd was 8% fixed. Today their home will only appraise for $90,000. We would refinance the 1st mortgage balance into a fixed rate at 5.125% today and ask the 2nd mortgage to subordinate their 2nd mortgage. In simple terms allow us to redo the 1st mortgage with out paying off the 2nd mortgage. If the 2nd mortgage company will allow this, it will be the best solution to having a high rate adjustable 1St mortgage. Since the 2nd Mortgage is a fixed rate and there is no equity in the property to pay off the 2nd mortgage, it is not important to refinance the 2nd mortgage as it is the 1st mortgage.
Before you give up on refinancing because you don’t think you have equity, call your loan officer and ask them about these options and other options that may be available to you. It may save you thousands of dollars in interest.
Tuesday, January 20, 2009
Helping your college student buy a home? FHA is your lender
With current house prices being at 10 years lows, many parents are finding it cheaper to buy their college student a home while they are in college. Formally know as the “Kiddy Condo” loan FHA allows for a minimum of 3.5% down payments for these loans. The Parent and Student are both on the loan and have title to the home. They Student must have sufficient credit and must be enrolled in school in the area of where the home is being purchased. The parents must also qualify for the loans and prove they can afford the new payments for the home.
FHA rates are currently in the low 5’s for fixed rate mortgages. The low rate in combination with the minimum down payments makes the FHA loan very attractive to buyers. I recently financed a home for a college student and parents who were paying rent for a house. They purchased a $160,000 home near the University of Arizona campus. Their total payments were under $1100.00. This was very attractive because next year their other child is going to the University of Arizona and will be living in the home.
Buying a home right now is a great investment in college student’s futures as home owners. After the school year many home around the University area will go on sale. It is smart to be pre approved for this loan before you go shopping. FHA has changed their guidelines for these “Kiddy Condo” type loans last years and you should work with a loan officer who is experienced in these transactions. While you can not count income from roommates to qualify for these loans, many clients rent out a room to off set the cost of home ownership. These loans are not for investments properties, the student must live in the property.
With FHA rates under 6% and currently near 5% parents who have these types of loans or any FHA loan should take advantage of the FHA Streamline refinance which allows the borrowers to refinance the balance of their loan to a lower rate without a new appraisal or going through the whole underwriting process. Take advantage of these great rates on FHA loans today.
FHA rates are currently in the low 5’s for fixed rate mortgages. The low rate in combination with the minimum down payments makes the FHA loan very attractive to buyers. I recently financed a home for a college student and parents who were paying rent for a house. They purchased a $160,000 home near the University of Arizona campus. Their total payments were under $1100.00. This was very attractive because next year their other child is going to the University of Arizona and will be living in the home.
Buying a home right now is a great investment in college student’s futures as home owners. After the school year many home around the University area will go on sale. It is smart to be pre approved for this loan before you go shopping. FHA has changed their guidelines for these “Kiddy Condo” type loans last years and you should work with a loan officer who is experienced in these transactions. While you can not count income from roommates to qualify for these loans, many clients rent out a room to off set the cost of home ownership. These loans are not for investments properties, the student must live in the property.
With FHA rates under 6% and currently near 5% parents who have these types of loans or any FHA loan should take advantage of the FHA Streamline refinance which allows the borrowers to refinance the balance of their loan to a lower rate without a new appraisal or going through the whole underwriting process. Take advantage of these great rates on FHA loans today.
Friday, January 16, 2009
FHA now requires 2 appraisals on some “Cash Out” Loans.
In the last year, the FHA loan became the leading loan in “Cash Out” refinances for home owner’s. FHA allows borrowers to refinance and take cash out up to 95% LTV (Loan to Value of the Home). Conventional loans from Fannie Mae and Freddie Mac have been limited to 80% in Arizona because Private Mortgage Insurance Companies had tightened there guidelines. Now FHA requires 2 appraisals for any cash out loan over 85% LTV. The 1st appraisal will require the appraiser to actually come into the home and inspect it( Full Appraisal). The 2nd appraisal can be a “Drive By” appraisal. This is done by the appraiser going to the property and taking pictures from the out side of the property. Homeowners are not required to be home when this is done. The 2nd appraisal will be ordered after the 1st appraisal is completed. The 2nd appraisal is done to support the value of the 1st appraisal. Closing time may be slightly affected by the need for an 2nd appraisal.
You loan officer should do more upfront research to prevent any problems with the 2nd appraisal supporting the value. Homeowners should tell the loan officer everything about the home. Loan officers should know of any improvements made to the home and all amenities the home has. One item FHA looks at is lead based paints. If the home was built prior to 1978, lead based paint may have been used. FHA requires that all painted areas be free from chips. If any painted areas are chipping you will be required to repaint those areas. There can also not be any paint chips in the ground around the property.
Requiring 2 appraisals for a FHA Cash Our Loan may increase the costs of the home loan. The 2nd appraisal will cost between $250-$300. Homeowners should not let this cost prevent them from taking advantage of the only loan product that allows homeowners from using up to 95% of their homes equity. With the current economic situation homeowners in Arizona are in I am paying for the 2nd appraisal for the homeowners at the closing of their loan*. FHA Cash Out Rates are in the low 5%. Arizona Homeowners should take advantage of this loan when ever they need to consolidate debt, take cash out for home improvements, cash for a vacation, money for school, or anything else.
You loan officer should do more upfront research to prevent any problems with the 2nd appraisal supporting the value. Homeowners should tell the loan officer everything about the home. Loan officers should know of any improvements made to the home and all amenities the home has. One item FHA looks at is lead based paints. If the home was built prior to 1978, lead based paint may have been used. FHA requires that all painted areas be free from chips. If any painted areas are chipping you will be required to repaint those areas. There can also not be any paint chips in the ground around the property.
Requiring 2 appraisals for a FHA Cash Our Loan may increase the costs of the home loan. The 2nd appraisal will cost between $250-$300. Homeowners should not let this cost prevent them from taking advantage of the only loan product that allows homeowners from using up to 95% of their homes equity. With the current economic situation homeowners in Arizona are in I am paying for the 2nd appraisal for the homeowners at the closing of their loan*. FHA Cash Out Rates are in the low 5%. Arizona Homeowners should take advantage of this loan when ever they need to consolidate debt, take cash out for home improvements, cash for a vacation, money for school, or anything else.
Thursday, January 15, 2009
JP Morgan Chase exits the Wholesale Mortgage Business
Last week JP Morgan closed its Wholesale Mortgage Division. There Wholesale Division worked with Mortgage Brokers to fund home loans for borrowers. Chase said that one of the major reasons for this move was because of the under performing loans Mortgage Brokers sent to Chase. Because Chase underwrote the loans they received from the Mortgage Brokers it is more likely Chase’s guidelines along with a drop in Mortgage Broker business lead to the closing of their wholesale division.
Today Wholesale Lenders face many problems from the Mortgage Broker Business. Mortgage Brokers are normally not as financial sound as Mortgage Banks and Mortgage Companies. Wholesale lenders do not have the same buy back policies for Mortgage Brokers as they do for other types of mortgage companies. Because the Mortgage Brokers are sending Wholesale Lenders loans one at a time, Mortgage Brokers are offered slightly higher rates than Mortgage Bankers and Mortgage Companies are offered. In this competitive market borrowers are shopping for the lowest rates and many times Mortgage Brokers and not compete with larger Mortgage Bankers or Mortgage Companies for these customers.
Another factor that causes problems for Wholesale Lenders and Mortgage Brokers is the increase need of FHA and VA financing and the lack of Convention Lending. Some lenders are reporting 300% increase in FHA and VA business. FHA and VA require Mortgage Brokers to have stronger financials than non FHA/VA approved Mortgage Brokers. Mortgage Brokers who are not approved for FHA and VA lending are limited to only a few convention loan products.
With the lack of volume from Mortgage Brokers, coupled with the current mortgage slow down, and lack of Brokers who are FHA and VA approved, JP Morgan Chase’s decision may be the beginning of the end of the Wholesale Business. If other Lenders like Countrywide decide to follow Chase’s lead closing their Wholesale Divisions it will be very difficult for Mortgage Brokers to have sources to fund their borrower’s loans. If there is more slow downs, this may cause the rest of the Wholesale Companies to stop this business channel.
Today Wholesale Lenders face many problems from the Mortgage Broker Business. Mortgage Brokers are normally not as financial sound as Mortgage Banks and Mortgage Companies. Wholesale lenders do not have the same buy back policies for Mortgage Brokers as they do for other types of mortgage companies. Because the Mortgage Brokers are sending Wholesale Lenders loans one at a time, Mortgage Brokers are offered slightly higher rates than Mortgage Bankers and Mortgage Companies are offered. In this competitive market borrowers are shopping for the lowest rates and many times Mortgage Brokers and not compete with larger Mortgage Bankers or Mortgage Companies for these customers.
Another factor that causes problems for Wholesale Lenders and Mortgage Brokers is the increase need of FHA and VA financing and the lack of Convention Lending. Some lenders are reporting 300% increase in FHA and VA business. FHA and VA require Mortgage Brokers to have stronger financials than non FHA/VA approved Mortgage Brokers. Mortgage Brokers who are not approved for FHA and VA lending are limited to only a few convention loan products.
With the lack of volume from Mortgage Brokers, coupled with the current mortgage slow down, and lack of Brokers who are FHA and VA approved, JP Morgan Chase’s decision may be the beginning of the end of the Wholesale Business. If other Lenders like Countrywide decide to follow Chase’s lead closing their Wholesale Divisions it will be very difficult for Mortgage Brokers to have sources to fund their borrower’s loans. If there is more slow downs, this may cause the rest of the Wholesale Companies to stop this business channel.
Wednesday, January 14, 2009
2009 A good year to start saving money with your home loan.
Here are some money saving tips so you can start saving money in 2009.
As simple as it might sound, pay your mortgage payment on time before the bank charges you a late fee. Most home loans have a late fees after the 14th or 15th day your late. These late fees are up to 5% of your mortgage payments. For a $1000 mortgage payment that is $50.00. Being last every month for a year is going to cost you $600 for a year.
Make sure you have the best rate and mortgage you can. Many home owners think they can't qualify for a better loan/rate because of the current economic mess we are in. That is not true. It will only take 20 minutes of your time to call a experience loan officer to take a quick look at your current mortgage. You might be impressed with what they might find to save you money.
Talk to your home owners insurance agent about your coverage and what your current deductables are. Having a $500 deductable will cause your insurance to be higher than having a $1000 deductable. Discuss this with your agent, they may be able to save you some money.
Look at your credit report and make sure everything is correct. Having the best credit rating will save you money on your mortgage rate and mortgage insurance if your required to have it. Take a few hours to review your credit report and fix any problems. You can request a report once a year for free from www.annualcreditreport.com If you need help understanding the credit report call me. I will help you understand all those numbers and terms.
Pay a little more on you mortgage every month. Paying more on your mortgage today will lower your balance today and you will pay less interest next month. For a $200,000 loan at 5.5% interest over 30 years your monthly principal and interest payments are $1135.58. If you could make a extra payment a year on your mortgage you would pay off your mortgage 5 years sooner, saving $68,134.80!!!
Don't pay for an appraisal. Save up to $400 on a appraisal when you apply online for a home loan with me. I will give you a coupon for a free appraisal you can use at closing.
Don not close a FHA stream line loan before the end of the month. When you pay off your FHA loan, your pay off is the same balance if you pay it of on the 5th or the 30th of the money. If you close on a FHA streamline loan before the end of the money you will be paying double interest. The new loan will collect interest from the new closing date to the end of the month. You have already paid interest to the end of the month on your FHA loan. So you are actually pay double the interest.
As simple as it might sound, pay your mortgage payment on time before the bank charges you a late fee. Most home loans have a late fees after the 14th or 15th day your late. These late fees are up to 5% of your mortgage payments. For a $1000 mortgage payment that is $50.00. Being last every month for a year is going to cost you $600 for a year.
Make sure you have the best rate and mortgage you can. Many home owners think they can't qualify for a better loan/rate because of the current economic mess we are in. That is not true. It will only take 20 minutes of your time to call a experience loan officer to take a quick look at your current mortgage. You might be impressed with what they might find to save you money.
Talk to your home owners insurance agent about your coverage and what your current deductables are. Having a $500 deductable will cause your insurance to be higher than having a $1000 deductable. Discuss this with your agent, they may be able to save you some money.
Look at your credit report and make sure everything is correct. Having the best credit rating will save you money on your mortgage rate and mortgage insurance if your required to have it. Take a few hours to review your credit report and fix any problems. You can request a report once a year for free from www.annualcreditreport.com If you need help understanding the credit report call me. I will help you understand all those numbers and terms.
Pay a little more on you mortgage every month. Paying more on your mortgage today will lower your balance today and you will pay less interest next month. For a $200,000 loan at 5.5% interest over 30 years your monthly principal and interest payments are $1135.58. If you could make a extra payment a year on your mortgage you would pay off your mortgage 5 years sooner, saving $68,134.80!!!
Don't pay for an appraisal. Save up to $400 on a appraisal when you apply online for a home loan with me. I will give you a coupon for a free appraisal you can use at closing.
Don not close a FHA stream line loan before the end of the month. When you pay off your FHA loan, your pay off is the same balance if you pay it of on the 5th or the 30th of the money. If you close on a FHA streamline loan before the end of the money you will be paying double interest. The new loan will collect interest from the new closing date to the end of the month. You have already paid interest to the end of the month on your FHA loan. So you are actually pay double the interest.
Values
Buying a home today may be your best financial move. With Mortgage rates at all time lows and prices of homes a 10 year lows, buyers have the advantage of finding the right home for them and a price and payments they can afford. I was reading a blog today form Mike Oliver’s web site www.sellingtucsonrealestate.com about a Foreclosure home that is for sale. Mike is a Real Estate Agent from Tierra Antigua Realty. This home is listed for $161,500 and is almost 1900 square feet in NorthWest Tucson. From the pictures it looks like a nice home. His article states it needs some landscape but other than that it is ready to move into. I am seeing more and more home that are ready to move in. Currently an approved buyer could purchase this home for monthly mortgage payments under $1100 with a 5% 30 Year FHA Mortgage with as little as 3.5% down payment. This would be a wonderful home for a first time home buyer.
There are many of these “deals” out there for buyers to take advantage of. There is great value in looking at home that has been foreclosed on. The banks are not in the business of owning homes and the longer the foreclosed home is “on their books” the more money they loose. Banks loose a tremendous amount in a foreclosured home . They want to sell that home as quickly as they can to move it off their inventory. Some banks are offering to pay buyers closing cost to purchase these foreclosed homes. The most popular financing that we are seeing right now for these foreclosed homes is the FHA loan. FHA allows the seller to pay up to 6% of the buyers closing costs and buyers are only required to put a down payment of 3.5%. For buyers who don’t have the 3.5% down payment, FHA will even allows the down payment to come from a family member/close friend, a church, employer or other agencies.
In Pima County the 2008 Pima County Bond Money Loan has been extended to April 2009 for buyer’s to take advantage of 100%, NO MONEY DOWN LOANS. The Rate for the Pima County Bond Money 1st Mortgage is 5.99% fixed for 30 years. There is no discount fees charged and all lenders fees have to meet the guidelines of the Pima County Bond Loan Program. The Pima County Bond Money Loan will even finance the buyers closing costs is needed. It is one of the BEST LOANS in Pima County for buyers with little or no down payments.
Another great place to look for value is propertied that have been foreclosed on buy HUD. HUD repos are the fasted moving properties for 3 reasons. First, HUD Repo’s have been priced to be sold ASAP. HUD can not allow properties to be up for sale too long. By the nature of the HUD Repos, there is normally great value in these properties. 2nd Financing terms offered by FHA for HUD home require buyers to come in with ONLY $100 down for a FHA loan with current rates in the 5% range for a 30 Year Fixed Rate Mortgage. 3rd HUD sometimes offers these homes under their “ Good Neighbor Next Door” Program. This allows Police, Firefighters, Teachers and some Medical professionals to purchase these propertied at ½ of the listing price and on top of that they give these buyers the $100 Down HUD Reop FHA financing. (best deal in the world to buy a home)
If you are interested in buying any type of Foreclosed or HUD Repo it is very important to be PRE QUALIIED by an FHA approved lender and in Tucson/Pima County and Loan officer who is approved to offer you the Pima County Bond Money Loan. HUD Repos properties do not last more that a few days on the market. You need to be able to move quickly to buy these homes. Work with a proven Agent like Mike Oliver who know the market in Pima County and can find value in homes for buyers.
There are many of these “deals” out there for buyers to take advantage of. There is great value in looking at home that has been foreclosed on. The banks are not in the business of owning homes and the longer the foreclosed home is “on their books” the more money they loose. Banks loose a tremendous amount in a foreclosured home . They want to sell that home as quickly as they can to move it off their inventory. Some banks are offering to pay buyers closing cost to purchase these foreclosed homes. The most popular financing that we are seeing right now for these foreclosed homes is the FHA loan. FHA allows the seller to pay up to 6% of the buyers closing costs and buyers are only required to put a down payment of 3.5%. For buyers who don’t have the 3.5% down payment, FHA will even allows the down payment to come from a family member/close friend, a church, employer or other agencies.
In Pima County the 2008 Pima County Bond Money Loan has been extended to April 2009 for buyer’s to take advantage of 100%, NO MONEY DOWN LOANS. The Rate for the Pima County Bond Money 1st Mortgage is 5.99% fixed for 30 years. There is no discount fees charged and all lenders fees have to meet the guidelines of the Pima County Bond Loan Program. The Pima County Bond Money Loan will even finance the buyers closing costs is needed. It is one of the BEST LOANS in Pima County for buyers with little or no down payments.
Another great place to look for value is propertied that have been foreclosed on buy HUD. HUD repos are the fasted moving properties for 3 reasons. First, HUD Repo’s have been priced to be sold ASAP. HUD can not allow properties to be up for sale too long. By the nature of the HUD Repos, there is normally great value in these properties. 2nd Financing terms offered by FHA for HUD home require buyers to come in with ONLY $100 down for a FHA loan with current rates in the 5% range for a 30 Year Fixed Rate Mortgage. 3rd HUD sometimes offers these homes under their “ Good Neighbor Next Door” Program. This allows Police, Firefighters, Teachers and some Medical professionals to purchase these propertied at ½ of the listing price and on top of that they give these buyers the $100 Down HUD Reop FHA financing. (best deal in the world to buy a home)
If you are interested in buying any type of Foreclosed or HUD Repo it is very important to be PRE QUALIIED by an FHA approved lender and in Tucson/Pima County and Loan officer who is approved to offer you the Pima County Bond Money Loan. HUD Repos properties do not last more that a few days on the market. You need to be able to move quickly to buy these homes. Work with a proven Agent like Mike Oliver who know the market in Pima County and can find value in homes for buyers.
Values
Buying a home today may be your best financial move. With Mortgage rates at all time lows and prices of homes a 10 year lows, buyers have the advantage of finding the right home for them and a price and payments they can afford. I was reading a blog today form Mike Oliver’s web site www.sellingtucsonrealestate.com about a Foreclosure home that is for sale. Mike is a Real Estate Agent from Tierra Antigua Realty. This home is listed for $161,500 and is almost 1900 square feet in NorthWest Tucson. From the pictures it looks like a nice home. His article states it needs some landscape but other than that it is ready to move into. I am seeing more and more home that are ready to move in. Currently an approved buyer could purchase this home for monthly mortgage payments under $1100 with a 5% 30 Year FHA Mortgage with as little as 3.5% down payment. This would be a wonderful home for a first time home buyer.
There are many of these “deals” out there for buyers to take advantage of. There is great value in looking at home that has been foreclosed on. The banks are not in the business of owning homes and the longer the foreclosed home is “on their books” the more money they loose. Banks loose a tremendous amount in a foreclosured home . They want to sell that home as quickly as they can to move it off their inventory. Some banks are offering to pay buyers closing cost to purchase these foreclosed homes. The most popular financing that we are seeing right now for these foreclosed homes is the FHA loan. FHA allows the seller to pay up to 6% of the buyers closing costs and buyers are only required to put a down payment of 3.5%. For buyers who don’t have the 3.5% down payment, FHA will even allows the down payment to come from a family member/close friend, a church, employer or other agencies.
In Pima County the 2008 Pima County Bond Money Loan has been extended to April 2009 for buyer’s to take advantage of 100%, NO MONEY DOWN LOANS. The Rate for the Pima County Bond Money 1st Mortgage is 5.99% fixed for 30 years. There is no discount fees charged and all lenders fees have to meet the guidelines of the Pima County Bond Loan Program. The Pima County Bond Money Loan will even finance the buyers closing costs is needed. It is one of the BEST LOANS in Pima County for buyers with little or no down payments.
Another great place to look for value is propertied that have been foreclosed on buy HUD. HUD repos are the fasted moving properties for 3 reasons. First, HUD Repo’s have been priced to be sold ASAP. HUD can not allow properties to be up for sale too long. By the nature of the HUD Repos, there is normally great value in these properties. 2nd Financing terms offered by FHA for HUD home require buyers to come in with ONLY $100 down for a FHA loan with current rates in the 5% range for a 30 Year Fixed Rate Mortgage. 3rd HUD sometimes offers these homes under their “ Good Neighbor Next Door” Program. This allows Police, Firefighters, Teachers and some Medical professionals to purchase these propertied at ½ of the listing price and on top of that they give these buyers the $100 Down HUD Reop FHA financing. (best deal in the world to buy a home)
If you are interested in buying any type of Foreclosed or HUD Repo it is very important to be PRE QUALIIED by an FHA approved lender and in Tucson/Pima County and Loan officer who is approved to offer you the Pima County Bond Money Loan. HUD Repos properties do not last more that a few days on the market. You need to be able to move quickly to buy these homes. Work with a proven Agent like Mike Oliver who know the market in Pima County and can find value in homes for buyers.
There are many of these “deals” out there for buyers to take advantage of. There is great value in looking at home that has been foreclosed on. The banks are not in the business of owning homes and the longer the foreclosed home is “on their books” the more money they loose. Banks loose a tremendous amount in a foreclosured home . They want to sell that home as quickly as they can to move it off their inventory. Some banks are offering to pay buyers closing cost to purchase these foreclosed homes. The most popular financing that we are seeing right now for these foreclosed homes is the FHA loan. FHA allows the seller to pay up to 6% of the buyers closing costs and buyers are only required to put a down payment of 3.5%. For buyers who don’t have the 3.5% down payment, FHA will even allows the down payment to come from a family member/close friend, a church, employer or other agencies.
In Pima County the 2008 Pima County Bond Money Loan has been extended to April 2009 for buyer’s to take advantage of 100%, NO MONEY DOWN LOANS. The Rate for the Pima County Bond Money 1st Mortgage is 5.99% fixed for 30 years. There is no discount fees charged and all lenders fees have to meet the guidelines of the Pima County Bond Loan Program. The Pima County Bond Money Loan will even finance the buyers closing costs is needed. It is one of the BEST LOANS in Pima County for buyers with little or no down payments.
Another great place to look for value is propertied that have been foreclosed on buy HUD. HUD repos are the fasted moving properties for 3 reasons. First, HUD Repo’s have been priced to be sold ASAP. HUD can not allow properties to be up for sale too long. By the nature of the HUD Repos, there is normally great value in these properties. 2nd Financing terms offered by FHA for HUD home require buyers to come in with ONLY $100 down for a FHA loan with current rates in the 5% range for a 30 Year Fixed Rate Mortgage. 3rd HUD sometimes offers these homes under their “ Good Neighbor Next Door” Program. This allows Police, Firefighters, Teachers and some Medical professionals to purchase these propertied at ½ of the listing price and on top of that they give these buyers the $100 Down HUD Reop FHA financing. (best deal in the world to buy a home)
If you are interested in buying any type of Foreclosed or HUD Repo it is very important to be PRE QUALIIED by an FHA approved lender and in Tucson/Pima County and Loan officer who is approved to offer you the Pima County Bond Money Loan. HUD Repos properties do not last more that a few days on the market. You need to be able to move quickly to buy these homes. Work with a proven Agent like Mike Oliver who know the market in Pima County and can find value in homes for buyers.
Saturday, January 10, 2009
No Equity, Bad Credit Scores...No Problems
VA (Veteran Administration) and FHA(Federal Housing Administration) both have loans that do not require equity or credit scores to refinance into a lower interest rate for existing VA and FHA borrowers. If you are currently paying over 5.5% on your VA or FHA loan then you need to call me. With fixed mortgage rates for FHA and VA loans at or under 5.5% and getting close to the 4’s, right now it is a great time to refinance. VA and FHA have made it simple for home owners who have this type of loans to take advantage of low rates. VA loans the IRRRL (interest rate reduction refinance loan) and FHA the Streamlined Refinance are the best loans to lower mortgage rates today. All VA and FHA require is that you have made your mortgage payment on time over the last 12 months and in some cased they just want to see you have made 11 of the last 12 mortgage payments made. If you recently closed on a FHA or VA loan we just need to see you made your payments on time since you closed. By on time we mean your mortgage was not more than 30 days past due. They do require the mortgage to be current at time of closing. No need to provide income and asset documentation. No appraisals to worry about, it not required. No need to worry if you spent too much over the holiday season and your credit card payments have gone up since you last refinance, they don’t even look and debt ratios. It is truly a worry free refinance that will save you money monthly on your mortgage payment and lower your interest rate.
Low credit scores is NOT A PROBLEM. FHA and VA do not require credit score to qualify for the FHA Streamlined Refinance or the VA IRRRL. Some lenders will offer better interest rates for loans with higher credit scores. I strongly recommend taking a look at customer credit scores to see if the customer can benefit from having higher credit scores. If you currently have a FHA or VA loan and you don’t think you can refinance because of no equity you need to contact me or apply on line for one of these great loan products that will lower your interest rate.
In the last two years FHA and VA rate have been up to 7%. Many customers did a FHA Streamlined or a VA IRRRL to drop their rate into the 6’s within the last year. There is no limit on doing these types of loan so these clients are dropping their rates again into the 5’s for 30 Year Fixed Rate Mortgage with another FHA Streamlined or VA IRRRL. Many people believe that if you can not save a full 1% on your interest rate it is not worth doing. Since I do not charge an origination, discount fee, or appraisal fee for these loans and in most loans the lender pays for your other closing costs it is actually financial smart to do and FHA Streamlined or VA IRRRL as soon as you can save a ½% or more from your current rate.
Low credit scores is NOT A PROBLEM. FHA and VA do not require credit score to qualify for the FHA Streamlined Refinance or the VA IRRRL. Some lenders will offer better interest rates for loans with higher credit scores. I strongly recommend taking a look at customer credit scores to see if the customer can benefit from having higher credit scores. If you currently have a FHA or VA loan and you don’t think you can refinance because of no equity you need to contact me or apply on line for one of these great loan products that will lower your interest rate.
In the last two years FHA and VA rate have been up to 7%. Many customers did a FHA Streamlined or a VA IRRRL to drop their rate into the 6’s within the last year. There is no limit on doing these types of loan so these clients are dropping their rates again into the 5’s for 30 Year Fixed Rate Mortgage with another FHA Streamlined or VA IRRRL. Many people believe that if you can not save a full 1% on your interest rate it is not worth doing. Since I do not charge an origination, discount fee, or appraisal fee for these loans and in most loans the lender pays for your other closing costs it is actually financial smart to do and FHA Streamlined or VA IRRRL as soon as you can save a ½% or more from your current rate.
Monday, January 5, 2009
Refinancing your JUMBO loan? Yes you can
Refinancing your JUMBO loan? Yes you can
Having Problems Refinancing your JUMBO loan?
Many JUMBO customers are having problems refinancing to get lower interest rates or refinancing to secure a fixed rate mortgage on their current ARM loan. For some JUMBO customers it is not as hard as you might have heard. Currently in Arizona, a JUMBO loan is defined as a loan amount over $417,000. For those JUMBO customers with some equity, there is a solution to their problem. Many of my clients are refinancing to the Conforming loan limit of $417,000 on a first mortgage (rates around 5% 30 year fixed) and using a 2nd mortgage for the remainder balance. A 2 loan "combo" is a great solution. There are a few lenders that still do 2nd mortgages. It is not as easy as it was 2 years ago, but it can still be done and can save a customer thousands of dollars in interest.
Current 2nd mortgage products that are still available are fixed rate loans with terms up to 30 years. Current rates 7%-8%+ and Lines of Credits that are as low a 3.5%.
These types of transactions can also be used to purchase a home. Lenders that we work with allow these "combo" loans to finance up to 90% of the appraised value or purchase price. You will need to have a minimum of 10% down payment.
Talk to an experienced loan officer who knows how to structure this type of transaction. Not every lender can offer these loans, so please make sure your loan officer knows this process. It is a confusing one and can take a few extra weeks to close.
If you have a JUMBO loan and the interest rate is above 6% ask your loan officer to look into this for you. You might be happy you made the call.
Having Problems Refinancing your JUMBO loan?
Many JUMBO customers are having problems refinancing to get lower interest rates or refinancing to secure a fixed rate mortgage on their current ARM loan. For some JUMBO customers it is not as hard as you might have heard. Currently in Arizona, a JUMBO loan is defined as a loan amount over $417,000. For those JUMBO customers with some equity, there is a solution to their problem. Many of my clients are refinancing to the Conforming loan limit of $417,000 on a first mortgage (rates around 5% 30 year fixed) and using a 2nd mortgage for the remainder balance. A 2 loan "combo" is a great solution. There are a few lenders that still do 2nd mortgages. It is not as easy as it was 2 years ago, but it can still be done and can save a customer thousands of dollars in interest.
Current 2nd mortgage products that are still available are fixed rate loans with terms up to 30 years. Current rates 7%-8%+ and Lines of Credits that are as low a 3.5%.
These types of transactions can also be used to purchase a home. Lenders that we work with allow these "combo" loans to finance up to 90% of the appraised value or purchase price. You will need to have a minimum of 10% down payment.
Talk to an experienced loan officer who knows how to structure this type of transaction. Not every lender can offer these loans, so please make sure your loan officer knows this process. It is a confusing one and can take a few extra weeks to close.
If you have a JUMBO loan and the interest rate is above 6% ask your loan officer to look into this for you. You might be happy you made the call.
Friday, January 2, 2009
FHA Now requires 3.5% Down Payment.
Starting today FHA will require a minimum down payment of 3.5% This is up from 3%. FHA has taken many losses from home loans with buyers having little or no money down . Up until October of 2008 buyers could have the sellers pay their closing costs and gift the buyers the down payment. Buyers could actually buy a house with less money out of their pocket then they could moving into an apartment. FHA felt that this was a major problem and stopped sellers from funding the buyers down payments and now FHA has increased the down payment requirement to 3.5%.
Many in the mortgage and real estate business thought this might limit the ability for new home buyers to qualify for a home. In my experience this is not the case. I have seen many first time home buyers who do not have the 3% or 3.5% down payment to use other resources to get into homes. FHA allows buyers to receive a gift form a family member or close friend, their church, or employer. In Pima county we have the Pima County Bond Loan that is 100% financing. See 100% Financing for more details. Nova Home Loans also has the Arizona Home Buyers Solutions for home buyers in Arizona. See 100% Financing.
Most buyers who do not have the down payment saved have been receiving gifts from family members. FHA feels this is a better than the seller giving the down payment because buyers will feel more responsible for the home when they know a family has invested in the home for them. When home buyers used the sellers money form down payment there was less of a feeling of responsibility for the property was easier to walk away from the property if there was trouble making the mortgage payments.
There are many ways for home buyers to get loans with little or no money down. There are HUD Repo programs that allow for buyers to only put down $100. USDA 102% home loans and VA do not require a down payment. Please talk to an experienced loan officer if you do not have the money saved for a down payment or you don't think you will qualify for a home loans. There are many solutions for you.
Many in the mortgage and real estate business thought this might limit the ability for new home buyers to qualify for a home. In my experience this is not the case. I have seen many first time home buyers who do not have the 3% or 3.5% down payment to use other resources to get into homes. FHA allows buyers to receive a gift form a family member or close friend, their church, or employer. In Pima county we have the Pima County Bond Loan that is 100% financing. See 100% Financing for more details. Nova Home Loans also has the Arizona Home Buyers Solutions for home buyers in Arizona. See 100% Financing.
Most buyers who do not have the down payment saved have been receiving gifts from family members. FHA feels this is a better than the seller giving the down payment because buyers will feel more responsible for the home when they know a family has invested in the home for them. When home buyers used the sellers money form down payment there was less of a feeling of responsibility for the property was easier to walk away from the property if there was trouble making the mortgage payments.
There are many ways for home buyers to get loans with little or no money down. There are HUD Repo programs that allow for buyers to only put down $100. USDA 102% home loans and VA do not require a down payment. Please talk to an experienced loan officer if you do not have the money saved for a down payment or you don't think you will qualify for a home loans. There are many solutions for you.
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