HAFA Relief

Small Single-family home
Image via Wikipedia

Some of the pain of short sales may start to wain. The potential salve comes from the Home Affordable Foreclosure Alternatives (HAFA) program. It is designed to help homowners who couldn’ keep their home under the Home Affordable Modification Program (HAMP)

If the program works as planned, listing, selling and closing will get streamlined and documents will get streamlined for all parties, making short sales less excruciating than they are now for all parties. This new program runs until 12/31/2012.

HAFA eligibility is as follows:

  • Property must be borrower’s principal residence
  • It must be a first lien mortgage originated prior to 1/1/2009
  • The mortgage is delinquent or delinquency is reasonabley foreseable
  • The unpaid principal balance is no more thatn $729,750 for single family residences. Higher limits for duplexes or multi family properties.
  • Borrower’s total monthly mortgage payment exceeds 31 percent of their gross income
  • After notification of potential HAFA eligibility, borrower have 14 days to request HAFA consideration.
Enhanced by Zemanta

7 Things all borrowers should know about FHA loans

Logo of the Federal Housing Administration.
Image via Wikipedia

“We have seen home buyer interest in FHA loans go from practically zero three years ago to upwards of 87 percent today,” said Christopher Gardner, founder and president of FHA Pros, LLC. “Despite this rapid rise in popularity, many buyers still do not fully understand the benefits of these loans, and we believe it’s time to change that.”

1. FHA Loans Are Not Only For Lower-Income Borrowers. FHA loans are available to everyone. In fact, even Bill Gates can get one. There is no maximum income restriction associated with FHA loans. Borrowers do need to substantiate income and assets by submitting proper documentation. This requirement ensures that borrowers are well-vetted and truly able to afford their future homes.

2. FHA Loans Are Not Only For First-Time Buyers. Many people believe FHA loans are available only to first-time homebuyers. This is not the case. Whether borrowers are making their first home purchase or their fifth, they can look to FHA loans as a home financing option.

3. FHA Loans Are Not Just Small Loans; In Fact, Loan Amounts Can Be As High As Almost $800,000. The government recently raised the maximum loan amount from its original cap of $362,790 to $793,750 as a way to help stabilize the housing market. The amount a buyer can borrow varies from county to county. Later this summer, condo buyers interested in FHA loans can visit www.checkfhaapproval.com to instantly identify FHA-approved condo associations and review maximum loan amounts for a given location.

4. FHA Loans Are Not Affiliated With The Section 8 Housing Program. While both programs are administered by the U.S. Department of Housing and Urban Development (HUD), FHA loans have nothing to do with low-income subsidized housing. FHA loans are simply mortgages insured by FHA. This insurance provided by the federal government allows lenders to lend more freely by assuring them that they will be repaid in the event of default. Most traditional lenders, including Wells Fargo & Co., JP Morgan Chase and Citigroup are able to provide FHA loans to their customers.

5. FHA Loans Are Often More Affordable Than Conventional Loans. While FHA loans typically offer the same interest rates as other loans, borrowers benefit from a much lower down payment of as low as 3.5 percent.

6. FHA-Approved Condo Developments Are More Desirable To Buyers. With 87 percent of home buyers indicating that they plan to use FHA loans, condo associations that are not FHA approved are missing out on a significant pool of prospective buyers. Under rules in place since February 2010, an entire condominium development must now apply to HUD and be granted FHA approval before a buyer can purchase a unit in an association with an FHA loan or before an existing unit owner can refinance into an FHA loan.

Due to the general unwillingness of today’s lenders to extend credit with respect to conventional loans, many borrowers find that FHA is their best bet. Lenders don’t mind lending when the federal government (FHA) assures them of repayment.

Homeowners associations (HOAs) should note that although FHA-insured mortgages might be easier to obtain, they are not “risky” loans, due in large part to the strict “full documentation” requirements placed on borrowers.

Individual buyers or sellers can initiate the approval process or current owners can encourage their HOA to apply. More information about the FHA- approval process is available at www.getfhaapproval.com.

7. FHA Loans Are Assumable. In addition to lower down-payment and credit-qualifying requirements as compared to conventional loans, FHA loans are assumable. This means that when a seller with an FHA loan sells his or her property, the loan and its financing terms (interest rate) can be transferred to the new buyer. This unique feature will certainly make a property more valuable in times of rising interest rates.

(reprinted with permission)

Enhanced by Zemanta

Rent or buy? What works best for you?

Picture of the "Gingerbread House" i...
Image via Wikipedia

First time home buyers have a lot to consider this summer when making the decision to rent or buy a home: interest rates are at all-time lows and prices are at or near their lowest in years.

Still, deciding whether to buy a home or rent an apartment can be a complicated decision. How do you know what’s right for you? Potential buyers should ask themselves several key questions before making this important decision.

1. What will monthly costs be, and can I afford the payments?
Keeping mortgage payments under 30 percent of your monthly income is a good rule of thumb. If you can’t keep mortgage payments below that, you may be better off renting for awhile.

2. What other debt do I have?
Total rent or mortgage payments plus credit obligations should not exceed 35 to 40 percent of monthly income. Talk to your lender and they will help you get ready to buy a home. 

3. What is my credit score? Can I qualify for a good interest rate?
A high credit score indicates strong creditworthiness, and that qualifies you for better interest rates on a mortgage. Maxing out on your credit lines and paying bills late will lower your credit score. The impact of a credit score on interest rates can be significant. For instance, a borrower with a score of 760 could pay nearly two percentage points less in interest on a mortgage than someone with a score of 620. Lower interest rates also mean lower monthly payments. If your credit score is low, you may want to delay buying a home until you can improve your score. Work with your lender, they can tell you what to do to improve your credit score. Don’t have a lender? Ask your Realtor, they can refer you one or more lenders that they work with.

4. How much will taxes, monthly maintenance, or other fees cost?
Owning a home means you’ll have to pay real estate taxes and other costs like insurance and maintenance. On the other hand, owning a home brings big tax savings at the end of the year. 

5. How many years will I stay here? Generally, the longer you plan to live someplace, the more it makes sense to buy. You’ll build equity in your home and have the satisfaction of knowing it is yours and you can paint or redecorate any way you want. There have also been studies that show children do better in school if the parents are homeowners.

If you need any help with this decision, your Realtor or Lender can provide you with a Rent vs Buy analysis form.  

Enhanced by Zemanta

Ever heard of Energy Efficient Mortgages?

Coins and banknotes, two of the most common ph...
Image via Wikipedia

These are mortgages that mean comfort and savings whether your buying, selling, refinancing or remodeling your home. It is easy to use, federally recognized, and can be applied to most home mortgages. EEM’s provide special benefits when purchasing a home that is energy efficient or can be made efficient through the installation of energy saving improvements. With lower utility bills you will have more money in your pocket each month. You can afford to allocate a larger portion of your income to housing expenses. You can pay for the energy improvements easily through your mortgage.  Your lender can increase your loan to cover the energy improvement costs. Monthly mortgage payments increase slightly, but you actually save money because your energy bills will be lower.

Buyers benefits

  • Qualify for a larger loan on a better home
  • Get a more comfortable home
  • Save money every month from day one
  • Increase resale value of your home

Sellers benefits

  • Sell your home more quickly
  • Make your house affordable to more people
  • Attract attention in a competitive market

Remodeling/Refinances

  • Get all the EEM benefits without moving
  • Make improvements that save you money
  • Increase the potential resale value of your home

Energy efficient homes costs less to own than non-efficient homes. You may want to check out Energy Efficient Mortgages if you are interested in saving money.  

Reblog this post [with Zemanta]

Fannie Mae extends seller assistance program

Small Single-family home
Image via Wikipedia

Fannie Mae recently announced that is it extending it’s seller assistance incentive on all Fannie Mae Homepath properties. Buyers will received 3.5% of the final sales price as a credit towards closing costs or their choice of selected appliances. This offer is available to any owner occupant who closes on the purchase of a property listed on www.HomePath.com by June 30th.

Properties listed on www.HomePath.com are owned by Fannie Mae and include single family homes, condos and townhomes. Hompath properties also may be eligible for HomePath Renovation Mortgage financing, which gives the buyers an opportunity to purchase a home that needs repairs with as little as 3 percent down. 

Reblog this post [with Zemanta]