Archive for the 'Mortgage Updates' Category
Seller-Funded Downpayment Assistance for Pinellas Real Estate Purchases Soon to be a Thing of The Past
September 6th, 2008 categories: Mortgage Updates
Effective October 1st, you can no longer have the seller pay your down payment on your Palm Harbor real estate investment, or even a hut in Timbuktu. Unless you’re a veteran of the armed forces, you 
will need at least 3% of your own or gifted money to purchase a home anywhere in the US - with no exceptions. The reason? The recent approval of HR 3221 and all that it entails.
The passage of this bill eliminates ALL seller-funded down payment assistance with FHA-guaranteed loans. In addition, if you were thinking of buying a new home, home buyers will no longer be able to rely on nonprofits that funnel money from home-builders into seller-funded down payment assistance programs.
HR 3221 therefore finalizes HUD’s long quest to end that practice as well. The US Department of Housing and Urban Development (HUD) claims that the provision of monies from the seller causes an artificial inflation in the housing market statistics. This is because the record of the transaction at closing, (known also as the HUD), reflects the price of the home to be higher to compensate for the closing costs paid by the seller (a fair argument).
The belief is also that the odds of the homebuyer defaulting on the loan triples as they are basically buying the home with no money out of their pocket but with money provided by another party. Seller-funded down-payment assistance has become extremely popular as it was used on more than 35 percent of all home purchase loans insured by FHA in fiscal year 2007. This is a dramatic increase compared to less than 2 percent seven years ago. We want you to be aware of how the changes can affect you and your home purchase plans. Feel free to contact us regarding this pending change.
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Top Story: Interest Rates Creep Up
July 1st, 2008 categories: Mortgage Updates
A recent survey and a rate increase could mean more competion for Pinellas homes.
Recent indication is that first time home buyers are getting tired of sitting on the sidelines. According to a recent online poll taken by the National Apartment Association, 17 percent of renters plan to make the jump to home ownership in the next year; 41 percent of the 2,041 respondents planned to be home owners within two years. Only 31 percent planned to still be paying rent five years from now.
Another factor that could very soon contribute to an increase in Pinellas home buying could be rising mortgage costs. Fixed-rate mortgage rates rose to 6.32 percent, the highest it has been since October. After months of aggressively dropping interest rates, many lenders are worried that the Fed will be forced to raise rates back up. As interest rates rise, so do mortgage rates. According to a press release on freddiemac.com, Frank Nothaft, Freddie Mac vice president and chief economist said that, “Mortgage rates jumped this week after a number of Federal Reserve officials, most notably Chairman [Ben] Bernanke and Vice Chair [Donald] Kohn, expressed concern over a threat of inflation.” We may very well be seeing the beginning of the end of the super-low mortgage and potential buyers may realize that with rising rates, now may be the time to jump in. Nothaft added, “Moreover, pending home sales for April unexpectedly rose by 6.3% and mortgage applications for home purchases … were also up last week.”
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What’s Worse? Getting Struck by Lightening or Stuck with the Wrong Dunedin Home Loan For You?
June 14th, 2008 categories: Mortgage Updates
Does the fear of overpaying for your mortgage for the next 30 years have you concerned? It should. We all know better than to go ride the Pinellas Trail in the middle of a lightening storm, so why endanger your wallet for the next 30 years?
Given that purchasing a home is the largest investment most of us will ever make, know that you are not alone if you’re feeling overwhelmed with information. Choosing a lender and the right loan can seem pretty scary at first, especially if it’s your first Dunedin home purchase, but it’s easy enough to make a sound financial decision with little to no effort.
The sub-prime loans that got so many into trouble aren’t an option any more. There isn’t a bank out there that’s going to loan you money to buy a home today unless they are absolutely sure you can pay it back and that your Dunedin home is actually worth what you’re paying for it. So put that fear out of your mind.
Lending restrictions are tightening daily, and interest rates are on the rise. There are a number of options available - all of which are changing daily.
You need an ace on your team to help you decipher the madness.
Your lender must be knowledgeable and able to directly service ALL THREE OF THESE TYPES OF LOANS in order to truly determine your best overall loan structure:
1) Conventional - (Fannie Mae/Freddie Mac) - Currently requires a 10% down payment but that will pretty much be gone by next month and a 15% down will be needed.
2) FHA - These are loans backed by the Federal Housing Administration. The FHA guidelines are extensive, but they are nothing to fear. In fact, FHA loans are quickly becoming the loan of choice for most, as recently highlighted in this Washington Post article.
The best part of an FHA loan is that only a 3% down payment is required! There are some ins and outs to these loans, including understanding the 1.5% fee Read the rest of this entry »
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Warning: If You Plan on Buying a Pinellas County Home and Need 100% Financing - You’ve Only Got 17 Days Left to Get Under Contract - or You’ll be Waiting for Years
December 13th, 2007 categories: Mortgage Updates
You will not be able to get a 100% home loan with most major US banks after January 2, 2008, or ANYWHERE effective January 15, 2008.
It was just announced that there’s a very important change in the US mortgage industry that will be taking place. Fannie Mae (FNMA) lending guidelines are changing, and most most major banks are implementing the change at the 1st of the year before the January 15, 2008 deadline.
In just a few short weeks the standard 30 Year Fixed will now require at least a 5% down payment. FNMA will implement a 5% reduction in Loan to Values (LTVs) for all loans in a “Declining Market”. They are eliminating 100% financing through FNMA’s Flex 100 and My Community Loans. Currently FNMA is the only 100% financing loan in the market.
See Housing Wire’s Fannie Mae Introduces “Adverse Market Fees’ for other treats we have in store.
The Tampa Bay Market is affected by this change. If you’re in the market for a Palm Harbor Home or Dunedin Home - you’d better hire a Realtor today to help you get you approved and under contract now.
This news is yet another sign that the mortgage industry is altering how they do business.
If you want to buy a home…
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