Home Buyers Archives - Page 4 of 5 - First Preston HTFirst Preston HT

22August

Wait Times Shorten for Past Foreclosure Borrowers Seeking FHA Loans

cedland
Comments Off on Wait Times Shorten for Past Foreclosure Borrowers Seeking FHA Loans

The financial crisis that began in 2008 affected most Americans in some big fashion or another. Whether it was the loss of a job, home, savings and/or retirement fund, or mounting student debt loans with no job prospects for new graduates, Americans are slowly regaining the financial foothold they lost.

The economy has shown traction in job creation. Unemployment claims have dropped to near 6 year lows and the housing market appears to be thriving; U.S. existing home sales, released this week, jumped to their highest level in over 3 years to 6.5% in July. The slight bump in mortgage rates does not seem to be deterring homebuyers just yet as rates are still historically very low.

But some have not been able to take advantage of this opportunity of low rates. Several Americans are still dealing with the effects from the massive foreclosures that ensued. As they work to rebuild their credit and finances, and once again attempt to lay claim to the American Dream of home ownership, a new change in the FHA loan rules should help make this easier to accomplish.

The Federal Housing Administration (FHA) has amended the waiting period for borrowers who foreclosed on their home and are seeking to qualify for an FHA loan. Originally, the wait time to qualify was 3 years after a foreclosure and 2 years after the conclusion of a bankruptcy. Now, borrowers who sought bankruptcy, foreclosure, short sale, or deed-in-lieu can hope to qualify for an FHA loan in as little as 12 months if they meet certain requirements.

Borrowers will have to show proof that household income fell at least 20% for the last 6 months and that this drop was attributed to unemployment or some other event out of the borrower’s control. Also required, proof of 12 months of house payments made on time, documentation showing at least 1 hour of approved home counseling completed and evidence the borrower has fully recovered from the event. This new change for FHA loans are applicable to case numbers assigned on or after August 15, 2013 and will be effective till September 30, 2016.

Upon announcement of these changes, Commissioner of the FHA, Carol Galante, stated that the “FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage.”

This may be the break that some borrowers were hoping to catch. It will be interesting to see how much this contributes to new and existing home sales over the coming months, if at all.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

Source:http://www.dsnews.com/articles/fha-trims-waiting-period-for-borrows-who-experienced-foreclosure-2013-08-19

15August

Mortgage Rates and the Purchasing Power of a Dollar

Recent testimony by Fed Chairman, Ben Bernanke, has indicated a desire to begin tapering quantitative easing (QE) over the next few months but has stressed that interest rates will remain unchanged until certain economic indicators reflect an improving job market. Interest rates have been held at record lows while the economy tries to get moving at full speed again. Bernanke has stressed that he will continue to keep interest rates close to zero percent at least until 2015.

But mortgage rates have already started to climb as the housing sector grows legs. The 30-year fixed-rate mortgage for this week is 4.56% and the 15-year fixed-rate mortgage is 3.62%. While historically this is still low, these rates have increased by about 1% over the last 3 months. Mortgage rates haven’t moved this much at such a quick pace since 2009. So what does this mean if you are looking to purchase a home in the near future and why should you care about mortgage rates and monetary policy decisions by the Fed?

When mortgage rates rise, the purchasing power of the dollar diminishes in regards to home buying. The degree to which it diminishes depends on how much mortgage rates fluctuate (inflation has a strong effect on purchasing power too, but that’s another conversation). A home buyer is more concerned with the monthly cost and affordability of the house rather than just the sticker price of the house. This is where mortgage rates can dictate how much home is actually affordable.

As Mortgage Rates Rise, Purchasing Power Falls

A 1% increase in mortgage rates will reduce purchasing power by 10.75%. Likewise, if rates decrease by 1%, a homebuyer will gain a 10.75% increase in your buying power. What does this look like? A homebuyer originally decided they could afford to purchase a $600,000 house when rates were at 4.5% (assuming a 30 year loan). If rates jumped to 5.5% they would now only be able to only afford a $535,000 house.

Even though mortgage rates are starting to creep up, they are still historically at all-time lows which translate into historically high purchasing power. Comparing rates from early 2011 to late 2012, purchasing power grew more than 22% and has continued to grow as mortgage rates have continued to fall.

The longevity of this current mortgage rate environment will be affected in part by Bernanke’s actions to begin tapering QE and raising the Federal Funds Rate, which could lead to further gains in mortgage rates. It will be interesting to see if the increase in mortgage rates recently have a negative effect on July’s Pending Home Sales from June’s Pending Home Sales number.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

Sources:

http://www.bankrate.com/finance/mortgages/mortgage-analysis.aspx http://themortgagereports.com/6354/mortgage-rates-purchasing-power

3February

Wells Fargo Seeks to “Lift” Atlanta, Los Angeles Homebuyer Prospects

Admin User
Comments Off on Wells Fargo Seeks to “Lift” Atlanta, Los Angeles Homebuyer Prospects

Homebuyers who are on the fence may soon find reason to buy a house. Wells Fargo recently made headlines by announcing plans to launch “Neighborhood LIFT”.

According to a Krista Franks DSNews article, “The bank established a goal of lending $10.5 billion to Los Angeles homebuyers and $1.3 billion to Atlanta buyers. In addition, Wells Fargo designated $15 million to assist homeowners with down payments in Los Angeles and $8 million in Atlanta.”

Launch plans call for two-day events to “bring important resources and information to prospective homebuyers” according to Franks.

DS News indicated that the Los Angeles event is set for “February 3 and 4.^” The Atlanta launch is scheduled for “February 10 and 11.^”

Important details for consumers, real estate professionals and non-profit organizations can be found at NeighborhoodLift.com.

For additional information, please join us at FirstPrestonHT.com or on our Facebook and Twitter pages.

8December

Mortgage Options: 3 Tips to Help Homeowners

Admin User
Comments Off on Mortgage Options: 3 Tips to Help Homeowners

Few things are as American as baseball, hot dogs, apple pie, and homeownership. Americans have always valued freedom, security and the pursuit of happiness… all traits that can be associated with owning a home. That’s why, as important as it is to carefully select the right house, it’s equally important to wisely finance that house. Here are three smart tips from real estate author and educator Tara-Nicholle Nelson to help homeowners avoid mortgage mistakes:

1. Consider Working with a Mortgage Broker or a Private Mortgage Banker

Many prospective homeowners think the only way to obtain a mortgage is through their personal bank branch. Even if your bank does a decent job with your credits and debits, and has ATMs conveniently scattered across the city, mortgage brokers and private mortgage bankers may have an edge because they can offer you a satisfactory personalized lending experience in terms of speed, customer service, or assertiveness.

By using a mortgage broker or a private mortgage banker, preferably referred from friends or relatives, chances are good that the prospective homeowner will find someone who understands the importance of personalized customer service, is familiar with the local area, and experienced with getting deals closed in a timely manner. Check to see if the mortgage broker’s company has its own bank, which can allow the financial professional to shop a variety of banks’ offerings to find the best options, and coordinate the transaction via a pool of local, experienced appraisers.

2. Don’t Automatically Avoid Long-Term Debt

Some people do not take the plunge of homeownership because they can’t stand the thought of having a 30-year debt and the payment on a 15-year mortgage is too high for them. There are affordable ways to pay off a mortgage quicker than the loan’s term, and these do not involve winning the lottery or hoping that some long-lost uncle leaves you an inheritance when he passes away!

Many financial institutions have special plans that allow people to pay half of their monthly mortgage payment every two weeks. Such a schedule results in a full extra payment every year, which can pay off a mortgage as much as five years early. Other homeowners decide to pay an extra $100 or so as often as they can, and ask their loan servicer to apply the overage to the principal. Another method involves using paycheck raises over the years, or amounts once paid to extinguish credit card debt, to pay mortgage balances off early.

3. Consider Refinancing a “High” Interest Rate even in an “Upside-Down” Situation

According to Ms. Nelson, about 11 million Americans (about 23% of all homes) are currently “upside-down” or have “negative equity” on their homes. This means they owe more on the home than what it’s worth. Many homeowners with negative equity feel they are trapped in their 6%, 7%, or even 8% interest mortgages. They think no lender will refinance their loans and thus pay hundreds of extra dollars each month because they can’t take advantage of today’s rates around 4%.

The good news is that some options exist for homeowners to lower their interest rate and monthly payments even if they are upside down. Banks are increasingly amenable to modifying existing mortgages to render them less prone to default and foreclosure. This is especially the case when the homeowner is trying to recover from a financial hardship like interrupted income due to job loss or illness. Many banks have a loss mitigation department which can offer loan modifications on mortgages as much as 25% underwater (so long as no payments have been missed) through the Making Home Affordable Program. In addition, many mortgage brokers have access to loans from the Federal Housing Administration’s Short Refinance Program.

Please visit us at FirstPrestonHT.com, or join us on our Facebook and Twitter pages. We are helping to get America’s homeownership back on the road!

15November

“It’s Time to Buy That House” – Wall Street Journal | Upside

Do you know a prospective buyer who is still analyzing the market and sitting on the fence? Help them out by sharing a recent article in The Wall Street Journal, simply entitled, “It’s Time to Buy That House.” The facts are presented by columnist Jack Hough of Smart Money.com who rounds out his analysis with this conclusion: “when prices are low, loans are cheap and plump investment yields are scarce, buyers should jump.”

Key points include: 1) the nation’s ratio of house prices to yearly rents is nearly restored to its pre-bubble average and 2) when mortgage rates are taken into consideration, houses are the most affordable they have been in decades. These and other factors have created a perfect opportunity in many markets for homeownership whether as owner occupant or investor.

All real estate is local and some markets are more attractive than others. Ten “Sweet Deal” markets are listed in the article along with their price/rent ratios. (Single digits suggest big value.)

The article also provides quick price/rent ratios and “back-of-the-envelope ways” to help buyers determine which markets and which properties are the best investments compared to yields from other assets.

The writer encourages due diligence, but not analysis paralysis. The analysis includes input from Yale economist Robert Shiller, Moody’s Analytics, Standard & Poor’s 500-stock index and The National Association of Realtors® Housing Affordability Index.

Overall, it’s a balanced look at the potential risks and rewards of buying real estate now.

For additional information, please join us at FirstPrestonHT.com or on our Facebook and Twitter pages.

10November

Lender Discounts – Review the Options Carefully

Admin User
Comments Off on Lender Discounts – Review the Options Carefully

Qualified buyer prospects as a group are highly sought after by lenders in all categories from credit unions to major banks. Many are offering a menu of snazzy sounding promotions, discounts and incentives. A SmartMoney article, New Discounts for Mortgage Borrowers, dated October 5, 2011, offers a cautionary note for borrowers.

In a nutshell, “Critics say the newest offers still stop short of the best deal for borrowers: Lower rates,” according to AnnaMaria Andriotis of SmartMoney.com. The bottom line is that some institutions offer such enticing incentives that buyers are distracted and fail to simply negotiate for a lower interest rate.

Offers and Incentives Some of the high profile buyer incentives noted in the article are:

“Capital One is waiving some closing fees for refinancers, which can save $3,300 on average.
Citi and Bank of America are discounting fees by as much as 0.75 percentage point.
Quicken Loans is telling customers who get a mortgage through December that if mortgage rates fall in the future, they’ll be able to get the lower rates with most refinancing costs covered.
The Navy Federal Credit Union (designated for Department of Defense employees and their families) began offering $2,500 off of closing costs for borrowers.
Capital One is eliminating on average $3,300 closing costs — including the appraisal and title-related charges — for homeowners who refinance into a 30-year mortgage in some locations, including New York, Texas and the Washington D.C. metro area.”

The Catch According to Keith Gumbinger, Vice President at HSH Associated, a mortgage data firm, “If you’re seeing incentives, there might be a catch. To qualify for the Bank of America discount, for example, consumers must have at least $50,000 socked away with the bank or its investment firm.”

There are exceptions. HUD’s $100 Down Payment program allows qualified buyers of HUD- owned homes in certain states to secure FHA mortgages with a $100 down payment. Buyers should ask their real estate professional if their state and dream home are eligible. Qualified buyers can use the program and still negotiate for the best interest rate.

Shop Around Prospective buyers are well advised to diligently shop the market for best interest rate deals. After all, the mortgage is the single most important component of the home buying transaction. The terms often dictate the buyer’s long term success or failure as a homeowner. While comparing terms from large banks don’t overlook neighborhood credit unions, small local banks, online banks or organizations like USAA – a resource for military personnel and military families.

For additional information, please join us at FirstPrestonHT.com or on our Facebook and Twitter pages.

25October

Smooth Moves: 2 Great Online Tools for First-time Homebuyers

With existing home sales increasing by nearly 19% in August 2011 over year ago and 32 percent of buyers as first-time homebuyers, we expect a lot of moving to take place in the near future. To keep headaches to a minimum, we are sharing some online moving tools. One is a website called movecentral.com, a resource affiliated with Move.com and Realtor.com®. The site offers a treasure chest of tools to help plan and execute a well-organized residential move. The second site is Lowe’s, the well- known home- improvement company.

Movecentral.com

This site offers numerous checklists and a moving calculator to expedite quotes from moving companies for full service, self-service or auto transport moving options. There are money saving and storage tips, mover inventory sheets, last-minute task reminders and instructions on having a yard sale and safely moving pets. They even remind you to save key moving expense receipts for maximum advantage on your next tax return. Check out the “Packing 101” segment for eight great packing techniques.

Lowe’s Movers Toolbox and Workbook

Most Realtors® are already aware of the Lowe’s “moving coupon,” which provides a 10% homebuyer and home seller discount. But did you know they also offer a free Mover’s Toolbox? It includes a collection of online “how to” tools that span the process from selling or buying to moving and maintaining a home. There is also a Mover’s Workbook for use in planning home improvement projects and organizing an entire house. To ensure a trouble-free move day, the site instructs you on how to stock a “Moving Day Survival Kit.”

A wise person once said “For every minute spent in organizing, an hour is earned.” If you or someone you know is facing a change of address, use these free tools for a smooth and efficient move.

For more information, please join us at FirstPrestonHT.com or on our Facebook and Twitter pages.

27September

5 Crucial Tips for First-Time Homebuyers in Today’s Market

These five checkpoints can help first-time buyers to strike the right housing match. Bankrate.com recently published an article that offers first-time homebuyers these insights regarding today’s housing market:

Check out FHA loans, which are still available and feature a minimum down payment of only 3.5 percent of the purchase price. In some areas, watch for the “$100 down” program for an even more economical down payment. If a substantial down payment is available, review the option of a conventional loan with PMI (private loan insurance).
1. Qualifying for conventional financing can be tough, including the down payment. If you are a first-time homebuyer, be sure to do an online search for “first-time homebuyer incentives.” There are numerous programs designed to put home ownership within your reach. If you have military ties, there are outstanding programs designed especially for the men and women who are serving or have served in the armed forces.
Read the lender’s GFE (Good Faith Estimate) and challenge any questionable fees. Compare the GFE to the HUD1 closing document 24 hours prior to closing to make sure no extra fees have been added.
1. Mortgage interest rates are the lowest they have been in 60 years. Shop the market and make sure that you get the terms that are the best fit for your budget and future plans.
Get a professional inspection and heed the report. Don’t be distracted by clever staging, which can camouflage housing flaws.
Traditional wisdom was that you should buy a “starter home” and wait for the value to appreciate and then upgrade to a larger home. Current wisdom is that a qualified buyer can often afford a “move up” home on the first outing. Experts now recommend that you plan to stay at your new address for at least five years before selling. Be sure that your chosen city/region has good prospects for long-term career/business growth and stability.
Do your due diligence if your dream home/condo has a Homeowner’s Association. Check the financial statements. If there are significant financial deficiencies, be prepared to ‘keep shopping.’

Homeownership is an exciting opportunity. With the right precautions, today’s market can provide extraordinary “dream home” opportunities for qualified homebuyers.

For more information, please join us at FirstPrestonHT.com or on our Facebook and Twitter pages.

19March

BidSelect targets local buyers with featured properties

Admin User
Comments Off on BidSelect targets local buyers with featured properties

With so many buyers starting their home search online, its critical for listing agents to market properties with a solutions provider that can serve up relevant information to the buying community. With this in mind, BidSelect has implemented technology so that featured properties displayed on the home page are more relevant to the end user. In addition, they have expand the number of featured properties providing greater opportunity for sellers to increase traffic to their listings.

Visit www.bidselect.com to see the new home page changes.

5February

Embracing Change

Admin User
Comments Off on Embracing Change

Buyers in the market have more tools available than ever before. One of the tools is a booklet that lenders are required under the Real Estate Settlement Procedures Act (RESPA) to give to buyers within three days of their application for a mortgage loan.

Because purchasing a home is an important financial decision that should be considered carefully, this booklet will assist the buyer to become more familiar with the different layers of the home buyer process. Included are suggestions of the decision making process on whether to purchase or not and the cost involved in owning a home. The Good Faith Estimate (GFE) is explained in detail along with the HUD 1 Settlement Statement that is received at closing. The information is essential for the buyer as well as to be used as a needed refresher for real estate agents everywhere. There are explanations of the roles of a real estate broker, choosing an attorney, the terms of the sales contract agreement, affiliated businesses, and incentives from builders. The booklet then addresses the different types of loans and insurances. The step by step process of the GFE covers important dates and all the cost involved. For example what cost cannot increase from what is stated in the GFE, what cost cannot have more than a10% increase at closing from what was stated in the GFE, and what cost/changes that could be different at closing than what was stated in the GFE. The table below is included in the booklet.

Embracing Change

I applauded the changes with the new HUD1 Settlement Statement as well. There are now three pages instead of two. The third page is set in layman’s terms via a comparison chart of the GFE and cost at closing as well as the buyer’s loan document information. Gone are the days of sitting at the closing table with the buyer’s eyes glazed over with confusion! I have said it before and I’ll say it again, “Education is power, and when you empower someone with education, you build trust and report”. I encourage all real estate professionals to become familiar with the GFE and the HUD1. Dive in, get your feet wet! Understanding the complexities of real estate and being able to communicate to your audience is one of the keys of a successful real estate professional. There will always be change, so embrace it, smother yourself and indulge in the learning atmosphere!