• Enter your email address to receive notifications of new posts by email.

  • Connect with me

203k Renovation Jumbo… This is HUGE

Posted on February 25, 2010 by Neil Sweren

“This is HUGE”

Three words by our regional manager got everyone reading the new product memo announcing we would be offering FHA 203k mortgages up to the expanded loan limits effective immediately.  A flurry of activity began almost immediately.

What is a 203k?

203(k) is HUD’s program code for an FHA loan program so well-known for its difficulty and paperwork that many… well… most lenders don’t even offer it.  What is special and unique about it is that it allows a buyer (or homeowner in the case of a refinance) to borrow with one loan the funds needed to purchase a home (or pay off existing loans if refinance) and renovate it.  The loan amount is based on the COMPLETED value of the property AFTER renovations are complete.  It is by all accounts a government  insured construction loan. 

Unlike construction programs offered by many local banks, this transaction is done with one loan with one closing.  Borrowers get low FHA rates with very low 3.5% minimum down payment requirements.   

What makes the announcement by Southern Trust HUGE is that it will offer expanded loan limits under this program.  That pushes the loan amount cap as high as $729,750 in some parts of the country.  Loan limits do vary depending on property location but as an example, a home located in Baltimore County Maryland would be eligible for a loan up to $560,000.  The limit in Frederick County Maryland is $729,750.  Call or email me for specific information in your neck of the woods.

FHA Good Neighbor Next Door

Even more exciting… is the combined use of this program in conjunction with FHA’s Good Neighbor Next Door program.  This program allows Police Officers, Firefighters, EMTs and Teachers to buy HUD owned property at a substantial 50% discount off the list price.  Eligible property listings are available on the HUD Homes site.   Use the link above to access HUD’s main GNND program page for more details on how the program works.

Opportunity is knocking, are you listening?

With the tremendous number of bank owned, foreclosed and distress sale property on the market needing renovation work, this is opportunity knocking as loud as it can.  Even if you don’t qualify for or can’t find a home in your area under the good neighbor 50% off program.  Homes that need renovation are typically offered at substantial discounts from market prices. Renovation financing like this will help turn a handyman special into your dream home.

Filed under: Mortgage | Leave a comment »

Maryland DHCD announces reduction in CDA mortgage interest rates

Posted on February 19, 2010 by Neil Sweren

The Maryland Department of Housing and Community Development announced today that it was reducing rates by 1/2% on CDA mortgage loans and eliminating the MMP+2% and MMP+3% grant programs. 

The new 30yr Fixed Rates will be:
4.875% & 3 Points
5.000% & 2 Points
5.125% & 1 Point
5.25% & 0 Points

More information about the program is available at www.mmprogram.com.  Call or email me for more information on qualifying for the Maryland CDA program.

Filed under: Mortgage | Leave a comment »

8,004 reasons now is a good time to buy a house

Posted on February 4, 2010 by Neil Sweren

Is real estate at the bottom?  Will rates ever be lower? Will you ever be able to qualify for a loan again?  I don’t know the answer to any of those questions.  There certainly may be a better time to buy a house but lets look at whether this is a GOOD time to buy (or maybe even really good).  Here are my reasons 1 – 8004 that now is a really good time to buy a house.   

Reason Numbers 1 – 8,000:  Cold Hard Cash

Our government wants you to buy a house so much they are going to give you up to $8,000 if you are under a contract by April 30th to buy a primary residence and close by June 30th.  As long as you meet those deadlines you will qualify for tax credits of up to $8,000 (for first time buyers or $6,500 for repeat buyers).  This is a tax CREDIT not a deduction.  The $8,000 is a direct reduction of the income tax you pay so it goes directly back in your pocket!  $8,000 in cold hard cash is yours for the taking.

Reason Number 8001: Really, Really Low Mortgage Rates

Ok, so this song sounds familiar but fortunately this is a good thing for you.  While not at absolute rock bottom, fixed rate mortgage rates are unbelievably low.  According to financial publisher HSH Associates, Nationally 30yr fixed rates averaged just under 5.5% for January 2010 while 15 year fixed rates dipped to 4.9%.  The likelihood of us seeing higher rates in the next few months is much higher than it is for them to drop further.  An increase of just 1/2% on a $300,000 loan means nearly $100.00 /mo increase in your monthly payment.  

Reason 8,002: Procrastinators will pay more in loan fees

As I mentioned in an earlier post, FHA is increasing the cost of its mortgage insurance by 1/2% to 2.25% for all loan case numbers issued on or after April 5th 2010.  That’s an extra $1,500 in up front cost on a $300,000 loan just for waiting.  There is no reduction for first time buyers. 

Reason 8,003: You may not get a loan later… really

According to the Wall Street Journal, Fannie Mae and Freddie Mac are stuck with about $300 billion in loans that are 90 or more days delinquent and they have unleashed armies of auditors to sift through files looking for underwriting flaws so they can force lenders to buy those loans back.  As lenders face increased loan buybacks, guidelines will continue to tighten.  Average credit scores for loans backed by Fannie and Freddie jumped 40 points from 720 just two years ago to a current level of 760.  What do you think happened to the people with scores in the lower range?  The answer is simple, they didn’t get loans.

Reason Number 8004: Great Deals are happening all around you

I’m going to keep this part simple.  There are some amazing deals to be had out there.  statistically speaking, home prices are beginning to stabilize in many parts of the country and buyers with a bit of patience remain in the driver’s seat when it comes to negotiating a great deal. 

What to do next?

  1. Gather all your financial information (w2’s, paystubs, bank statements, etc)
  2. Meet with lender (I am happy to recommend one) to get started with your loan approval
  3. Find a great agent that will help guide you through the negotiating and paperwork (can recommend one here as well)
  4. Make your best deal
  5. Figure out how to spend your $8,000 tax credit

Filed under: Mortgage | Tagged: , | 1 Comment »

Changes come to FHA mortgage programs!

Posted on January 21, 2010 by Neil Sweren

HUD announces big changes to its FHA lending program.  Cost to consumers to increase after April 5, 2010 

  1. Increased MIP Premiums for all purchase and refinance transactions [case numbers assigned on or after April 5, 2010]
  2. New FICO score policy addressing borrowers with scores under 580
  3. Reduced seller concessions from 6% to 3%
  4. Increased lender enforcement

The announcement is available HERE. 
Mortgagee letter 2010-2: Increase in Upfront Mortgage Insurance Premiums

This page will be updated as information becomes available.

Filed under: Mortgage | Leave a comment »

HUD Takes Action… Issues waiver on 90 day transfer prohibition

Posted on January 18, 2010 by Neil Sweren

Following is the text of HUD Press Release 10-011 dated Friday, January 15, 2010

HUD TAKES ACTION TO SPEED RESALE OF FORECLOSED PROPERTIES TO NEW OWNERS
Measure to help bring stability to home values and accelerate sale of vacant properties

WASHINGTON – In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan today announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure. Just yesterday, Secretary Donovan announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes. Continue reading →

Filed under: Mortgage | Tagged: , , | Leave a comment »

Pre-Qualification vs Pre-Approval… what difference does it make?

Posted on January 11, 2010 by Neil Sweren

Pre-Qualification vs Pre-Approval

Although the terms are often used interchangeably, the difference between a mortgage pre-approval and a pre-qualification is substantial.  One is a valuable tool in the home buying process, the other is only slightly more valuable than the paper it is written on.  Continue reading →

Filed under: Mortgage | Leave a comment »

New guidelines hold lenders accountable

Posted on January 6, 2010 by Neil Sweren

Big disclosure changes in 2010

The new year brings significant changes to consumer mortgage disclosure requirements.  Most notably… borrowers applying for a loan on or after January 1st will see a brand new 2010 HUD-1 Settlement Statement and 2010 Good Faith Estimate  as mandated by changes to the Real Estate Settlement Procedures Act (RESPA) in 2008.   The industry has been preparing for this day for some time but is still far from ready and HUD was still updating its (52 pages of) FAQ as recently as just a few days ago.  Continue reading →

Filed under: Mortgage | Leave a comment »

Yet another reason not to wait…

Posted on December 16, 2009 by Neil Sweren

Still considering buying or refinancing?  Well if you haven’t already applied, your chances of qualifying just went down… again.  Last weekend Fannie Mae released an updated version of its Desktop Underwriter program used by lenders across the nation.  Desktop Underwriter Version 8.0 made getting a conventional loan even tougher.   The changes likely to impact most borrowers are Continue reading →

Filed under: Mortgage | Leave a comment »

Mortgage Rates hit 38yr Low… but can you get one?

Posted on December 4, 2009 by Neil Sweren

Mortgage rates hit 38 year low!

The Wall Street Journal is reporting today that mortgage rates “generally” fell this week to the lowest level in 38 years according to the most recent Freddie Mac Survey after falling for the 5th straight week in a row.  Clearly this is great news for homeowners and home buyers but the question is, with today’s more stringent underwriting guidelines… will you qualify and can you get the lowest rate? Continue reading →

Filed under: Mortgage | Tagged: , | Leave a comment »

Two hit records from the mortgage market…

Posted on November 30, 2009 by Neil Sweren

Ho, Ho, Ho, Rates are LOW LOW LOW!

Maybe you didn’t notice but mortgage rates have slowly dropped to record lows.  According to a survey by mortgage giant Freddie Mac, mortgage rates nationwide continued to drop last week to an average 4.78% with just under 3/4 point for a 30 year fixed, down more than 1% from last year this time matching an all time low.

The 15 year fixed set an all time low in survey history averaging 4.29% last week with just over 1/2 point for a 15 year fixed rate mortgage.  A drop of nearly 1 1/2% since this time last year. 

Yes, there may be a few more hoops to jump through than you may have had to deal with last time around (full income and asset documentation will be required) and as the quick talking ad man says “your rates may vary” depending on your credit score, Loan to Value and a few other factors but for those that still qualify, this is clearly a great time to buy or refinance. 

Feel free to call or email me with specific qualification questions.  Our secure online application is available here.

Other Articles of Interest:

New Push on Mortgage Relief:  WSJ says Obama looks to help more borrowers with modifications. http://online.wsj.com/article/SB125952206832568569.html

More information about modifications can be found on the government’s official web site www.makinghomeaffordable.gov

Filed under: Mortgage | Leave a comment »

« Previous Page — Next Page »