As has been posted on this blog before, 1 in 4 buyers are using FHA loans for financing. Let us recap the important changes in the latter part of 2008 along with the big news heading into 2009 regarding loan limits for FHA buyers.
Please remember, the down payment effective January 1, 2009 is 3.5%, up from 3%. FHA still allows gifts for the down payment and non-occupying co-borrowers for those that need additional help with loan approval.
With regards to seller concessions, 6% is the maximum allowed for FHA.
One important update: the 2009 FHA loan limits are out and can be found below:
https://entp.hud.gov/idapp/html/hicostlook.cfm
Once you click on the link above, you click on Florida then put your county in. Then go down to the Limit Year and click on CY2009…hit send and there you have it.
As you know, especially in this market, get your buyers approved by a bank/mortgage broker before looking at homes..please make sure they are speaking to someone educated in the new loan limits or FHA in general.
Monday, December 29, 2008
Saturday, December 20, 2008
Foreign National Tidbits
In today’s market, foreign national buyers are under increased scrutiny, more than in the past several years. Many foreign buyers are required to produce income, employment and assets in order to purchase a home in the United States. Many banks or mortgage brokers you speak with will tell you depending upon which country the buyer is coming from makes a big difference. Some lenders will only fund loans for those coming from certain countries or require a larger down payment if proof of documentation is not possible.
As an alternative, hard money is now an option for many foreign buyers. The foreign buyers inability or unwillingness to prove documentation leaves them no alternative. The thought is they just take the hard money loan at a higher rate and after several years of ownership they will refinance into a more “stable" loan.
Something else to consider is the currency exchange rate for foreign buyers. With the value of the dollar fluctuating, the amount of down payment will differ as well. Finding and working with an exchange company, one that explains the process and your buyers options is of vital importance.
Should you need contacts for foreign national financing, hard money or a currency exchange company…do not hesitate to contact me.
As an alternative, hard money is now an option for many foreign buyers. The foreign buyers inability or unwillingness to prove documentation leaves them no alternative. The thought is they just take the hard money loan at a higher rate and after several years of ownership they will refinance into a more “stable" loan.
Something else to consider is the currency exchange rate for foreign buyers. With the value of the dollar fluctuating, the amount of down payment will differ as well. Finding and working with an exchange company, one that explains the process and your buyers options is of vital importance.
Should you need contacts for foreign national financing, hard money or a currency exchange company…do not hesitate to contact me.
Thursday, December 18, 2008
Interest Rates at Lowest Point in Nearly 40 Years
What you’ve been reading and hearing is true, interest rates have dropped significantly in the past couple of weeks. For those with equity in their properties, contact your bank or mortgage broker to find out about refinancing. For those looking to purchase but sitting on the “fence”, what a better opportunity to take advantage; low interest rates coupled with great deals.
As posted in earlier blogs, please make sure you get a Good Faith Estimate so you know the EXACT costs associated with your purchase/refinance transaction. Understanding up front how your interest rate differs from the competition in relation to closing costs is extremely important.
Do not hesitate to contact me if you have any questions or comments.
As posted in earlier blogs, please make sure you get a Good Faith Estimate so you know the EXACT costs associated with your purchase/refinance transaction. Understanding up front how your interest rate differs from the competition in relation to closing costs is extremely important.
Do not hesitate to contact me if you have any questions or comments.
Wednesday, December 3, 2008
Today's Jumbo Loans
The one area of the mortgage industry that has changed dramatically but does not get much air time is the Jumbo Loan market. Much is written about Government loans (FHA, VA, etc.) and how they are the key to getting the real estate market back on track.
In certain parts of the country, availability of Government Loans and other 1st time homebuyer programs are not attainable due to higher home values. If a buyer is seeking to obtain the best conventional rate they should have a loan amount lower than $417,000.
The truth is many lenders have stopped funding loans above the conventional limit. Not only will you face higher interest rates and higher down payments on Jumbo Loans but you will find proof of income, employment and assets are looked upon more stringently.
If you have a potential home buyer in need of a Jumbo Loan, it is best to focus on financing first as the criteria for approval is different at each lending institution. You might find one lender has a strong program up to a certain loan amount whereas another may have a niche product that is not available elsewhere.
In certain parts of the country, availability of Government Loans and other 1st time homebuyer programs are not attainable due to higher home values. If a buyer is seeking to obtain the best conventional rate they should have a loan amount lower than $417,000.
The truth is many lenders have stopped funding loans above the conventional limit. Not only will you face higher interest rates and higher down payments on Jumbo Loans but you will find proof of income, employment and assets are looked upon more stringently.
If you have a potential home buyer in need of a Jumbo Loan, it is best to focus on financing first as the criteria for approval is different at each lending institution. You might find one lender has a strong program up to a certain loan amount whereas another may have a niche product that is not available elsewhere.
Tuesday, December 2, 2008
Hard Money Rehab Loans?
As written in earlier blogs, Rehabilitation loans have seen a dramatic spike in use due to the purchase of foreclosed homes. The FHA 203k is seen as the perfect loan program for those looking to purchase a primary residence where the properties are in need of either minor and/or major repairs.
Well, it now looks like some hard money lenders are using similar features of the 203k for those looking to purchase investment properties. Although proof of income and employment is not a necessity, there are credit score requirements.
Much like the 203k, rehab funds go into an escrow account at closing to be disbursed once the work has been completed. The hard money lender will send out a 203k inspector to verify the work has been completed before disbursement.
The actual loan amount cannot exceed 65% of the after repair value. For rates, terms and any other specific questions you should contact a hard money lender.
Well, it now looks like some hard money lenders are using similar features of the 203k for those looking to purchase investment properties. Although proof of income and employment is not a necessity, there are credit score requirements.
Much like the 203k, rehab funds go into an escrow account at closing to be disbursed once the work has been completed. The hard money lender will send out a 203k inspector to verify the work has been completed before disbursement.
The actual loan amount cannot exceed 65% of the after repair value. For rates, terms and any other specific questions you should contact a hard money lender.
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