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Articles
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Real Estate Article
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t's apparent that changes in the home buying process will continue for awhile. First, we now have new RESPA (Real Estate Settlement Procedures Act) regulations which provide more thorough explanation and disclosure of key loan terms and settlement charges. The objective of these is to help every home buyer or owner make better financing decisions and avoid surprises at closing.
It is worth noting that closings may be delayed under certain, specific circumstances. For example, if the lender revises the Good Faith Estimate (GFE), which must be provided to the borrower, then the borrower must be allowed at least one business day to review it prior to closing. If the APR increases more than 1/8%, the Truth In Lending disclosure must be reissued at least 7 business days prior to closing. This allows 3 business days for mailing and provides the customer with the time necessary to determine if they are comfortable with their loan decision. Additionally, FHA has announced some updates to their policies that you should be aware of as you consider a new home purchase. They want higher-risk buyers to have more “skin in the game.” The most relevant of these are:
- Borrowers with a credit score below 580 will need at least 10% down payment. Those with credit scores above the 580 level will still qualify for 3.5% down.
- Mortgage insurance “up-front” premiums will increase from 1.75% to 2.25%. These premiums can still be financed back into the loan. Monthly mortgage insurance may also be increasing.
Also, HUD Secretary Shaun Donovan has announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days.
In today’s market, FHA research found that acquiring, rehabilitating and reselling these properties (often referred to as “flipping”) to prospective homeowners often takes less than 90 days. The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods.
This temporary waiver is set to expire in February, 2011. For more information regarding the above, go to www.hud.gov or drop me an email and I’ll send you the releases from HUD.
Rick Richardson
REMAX House of Brokers
For current info on the changing real estate market, check my blog at:
http://www.rickrichardson.net/remaxmidstates/modules/agent/agent.asp?p=agentblog.asp
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With the housing market showing real signs of stabilization, home buyers are seeing their leverage over sellers diminish, according to a new report from real estate information service Zillow. The report found that, nationally, buyers paid an average of 3.3 percent -- or about $7,000 -- less than final listing prices in July, which is a substantially smaller bargain than the 4.6 percent--or $10,260--discounts they landed in January. "The strong summer selling season in 2009 has led to a decreasing difference between the last listing price and final sale price," Stan Humphries, Zillow's chief economist, said in a news release issued Wednesday.
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Before you splurge on that pricey remodeling project, beware: It may not pay you back when it's time to sell. By Kara Wahlgren, FrontDoor.com | Published: 2/02/2009 Considering all the blood, sweat and tears (not to mention money) it takes to make your dream renovation a reality, you'd expect to be handsomely rewarded with a boost in your home's value. Unfortunately, not every remodeling project will bring a handsome return on investment -- and some might even repel future buyers. You might want to think twice about springing for these so-called upgrades. - Over-the-top improvements
- Home office overhauls
- Swimming pools
- New roofing
- Specialized spaces
View the article here >>> |
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Real Estate Article
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While the housing market news still isn't great, there have been a few rays of hope recently. If you've read any of these reports, you've heard some astronomical numbers regarding foreclosures. Some analysts are predicting that as many as 50% of the homes that sell in the next 2 years will be in some form of financial distress. Foreclosures can be financially and emotionally devastating. Credit scores are ruined (reduced by as much as 300 points) and likely will remain on credit reports forever. Unfortunately, many homeowners proceed into foreclosure without any guidance whatsoever, not realizing that they have options. You may have heard or read the term "short sale." A short sale is a real estate transaction where the property is sold for an amount that is less than what's owed against it. Among other benefits, a negotiated short sale can have minimal impact on ones precious credit rating, while reducing or even eliminating a huge debt-load. Buyers can also benefit from short sale situations. In many cases these properties are selling below market price. And because the homeowner still controls the property, they are usually better maintained than those in foreclosure. Short sales require more time and considerable communication with the lender.Closing these transactions can be tedious and require patience and knowledge of the entire process. For the past several weeks I've been in classes covering both foreclosure and short sale processes. In the next couple of weeks I will receive my Certified Distressed Property Expert (CDPE) designation. Further, I have now personally dealt with both sides of short sale transactions. If you know someone who is currently weighing the options of a financially distressed property sale, please pass along my contact information. Likewise, if you or someone you know is considering purchasing a home and would like to explore the short sale possibilities, I'm here to help. One other note-- the Missouri Housing Development Commission (MHDC) has received money to use for down payment assistance on purchases of foreclosed properties. This money -- up to $14,999 -- has a 0% interest rate and is forgivable after 5 years. It's not for everyone and the money designated for this program won't last long. If you or someone you know would like to know more about this program, don't hesitate to call me. Thanks for your time, Rick Richardson RE/MAX House of Brokers 417-841-1101
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Real Estate Article
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Buyers Should Consider FHA Financing Options With all the talk about stimulus money, bailouts and tax credits for this and that, one of the best buyer options is often being overlooked. FHA financing is not getting the press or discussion it deserves. Many buyers are convinced they can't be approved for a loan without a very high credit score and large downpayment. However, FHA loans are quite attainable -- they require only 3.5% down and decent credit. FHA puts far more emphasis on the borrower's debt-to-income ratios. And, FHA financing is not just for first-time buyers and can often be the perfect refinance solution for loan modification of subprime financing. Closing costs for these loans is low, in the 3% range and can be covered by the seller. These costs, as well as initial mortgage insurance premium can be financed into the monthly payments. The 3.5% downpayment can come from a gift or from government assistance programs. On top of the other favorable conditions of this loan, the first-time home buyer can still get their $8,000 tax credit. FHA financing isn't for everybody or every property but it's certainly an option that shouldn't be overlooked. Thanks for your time, Rick Richardson RE/MAX House of Brokers 417-841-1101
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