I have prospective buyers asking me if FHA mortgages are a good deal these days, or are they strictly for lower-income home buyers?
In the past, most Federal Housing Administration (FHA) loans were made to lower-income borrowers. In fact, that is why FHA was established. In the 1930s, a working person would have to save 50 percent of the value of a house before being able to get a mortgage. The FHA changed that with programs that guaranteed loans made to people with lower down payments.
FHA itself does not actually lend money or set interest rates. Instead, it guarantees loans, insuring that private lenders are protected against defaults on loans. Today the FHA has a variety of loan guarantee programs for first-time borrowers, reverse mortgages, and refinances. The percentage of FHA loans in the mortgage market is about 25 percent.
In fact, while FHA loans still require smaller down payments and often have low interest rates, not all FHA borrowers are low income. In areas where real estate is expensive, borrowers can take FHA mortgages for as much as $729,750 but the limits vary from place-to-place. I can discuss FHA limits and requirements with you if you think such a loan would be good for you.
There are a lot of reasons people look to FHA loans. Today, if you want to make a down payment of less than 10 percent, you almost certainly will have to do an FHA loan. Borrowers can get a home mortgage for as little as 3.5 percent down.
As a government-insured loan, an FHA mortgage has easier credit qualifying guidelines than most lenders. Today, nearly all lenders require a credit score of 700 or more to qualify for a conventional mortgage. FHA credit score requirements are slightly lower.
Nonetheless, there is no guarantee that an FHA mortgage is a better deal than a conventional one. As always, shop around and deal with a reputable lender.
Tags: mortgage loans, mortgages, mortgages types
Posted by
admin on Oct 1, 2009 in
Finances,
Real Estate Cherry Hill and Edgewater Park recently joined a state home ownership program where first-time homeowners can receive low-interest, 30 or 40 year fixed-rate loans and assistance with closing costs and mortgage down payments in exchange for buying a home in the town where they work. The goal of the program is to increase homeownership while easing congestion on the roads.
Under the “Live Where You Work” program, eligible properties include one-family units, condominiums, and 2- to 4-family unit properties that are more than 5 years old and located in a state-designated Smart Growth area. In the Burlington and Camden counties, households of up to two people earning up to $85,600 and larger families earning up to $98,440 qualify to participate. For more information on the ‘Live Where You Work’ program, visit Cherry Hill and Edgewater Park recently joined a state home ownership program where first-time homeowners can receive low-interest, 30 or 40 year fixed-rate loans and assistance with closing costs and mortgage down payments in exchange for buying a home in the town where they work. The goal of the program is to increase homeownership while easing congestion on the roads.
Under the “Live Where You Work” program, eligible properties include one-family units, condominiums, and 2- to 4-family unit properties that are more than 5 years old and located in a state-designated Smart Growth area. In the Burlington and Camden counties, households of up to two people earning up to $85,600 and larger families earning up to $98,440 qualify to participate. For more information on the ‘Live Where You Work’ program, visit http://www.state.nj.us/dca/hmfa/consu/buyers/close/live.html
Terry Iwaniw
REALTOR Associate
ReSales & Investment Realty, LLC
Off: 856-795-3111 x263
Cell: 609-417-1086
http://www.sellmysnjhome.com
http://snjrealestate.ning.com
http://www.snewjerseyhomes.com
Connect on Facebook – http://profile.to/terryiwaniw
Tags: first time home buyers, first timehome buyer program, live where you work, mortgages, new jersey program, real estate in atlantic county, real estate in camden county, real estate in gloucester county
Posted by
admin on Aug 11, 2009 in
Finances,
Mortgages I just received a reminder from one of the many mortgage reps that I get updates from. The reminder was about a loan program that is often forgotten. I’m even guilty of forgetting about it even though I had written an article about it previously. This forgotten loan program is the USDA Rural Home Loan. The best part of this loan program is that the buyer does not need a downpayment. That’s right, $0 downpayment. However, the home that you are planning to buy must be located in one of the eligible areas of New Jersey. The loan limits that USDA operates under are the same ones that Fannie Mae, Freddie Mac, and other have established.
So, if you’re ready to purchase your new home, give me a call to discuss your real estate needs in greater detail and that way I can help you determine if a USDA Rural Home Loan is for you. You do not have to be employed or affiliated with the USDA or even a governement employee. This is a great way for first time home buyers, that may not have enough funds to put as a downpayment, or even the non-first time home buyer who needs to move into a bigger home but lacks sufficient funds for the 3.5% downpayment needed for an FHA loan. First time home buyers, this is great opprotunity to get into your own home AND qualify to receive your $8000 First Time Home Buyer Tax Credit.
Terry Iwaniw
REALTOR Associate
ReSales & Investment Realty, LLC
Off: 856-795-3111 x263
Cell: 609-417-1086
http://snjrealestate.ning.com
http://www.snewjerseyhomes.com
Connect on Facebook – http://profile.to/terryiwaniw
Tags: first time buyers, first time home buyer tax credit, mortgage loans, mortgages, no downpayment loans, usda rural loans
Posted by
admin on Jun 12, 2009 in
Finances,
Mortgages A mortgage is a kind of an agreement made to pay the money, which was loaned, to a person by keeping the house as collateral. Mortgage is a promise made to pay the debts by putting it in writing basically. Mortgages have terms and interest rates which are either adjustable or fixed.
Mortgage terms:
Mortgages are designed in such a way that they can be paid in installments for a certain period. The time frame which allows the person to pay back his mortgage is called the term. The term may be 10 or 15 or even 30 years. The length of the term determines the amount of money to be paid, which is actually spread in installments.
Mortgage interest rate:
The interest rate depends on the percentage to be paid on the mortgage loan amount. The interest rates vary according to the credit score of the person. If the credit score of the person is very high, the interest rate and the amount of monthly installments are lower. If the credit score is lower then the interest rates and the monthly installment amount are higher. Hence a good credit score will help getting lower interest rates to the debtor.
Types of mortgages:
Mortgages – Adjustable rate of interest
Under this type of mortgages, the interest rate changes from period to period according to the fluctuations of the market. The degree of change of mortgage interest rate is directly associated with the index to which it is tied. Since index will differ as they may be tied to a foreign bank rate of interest in certain cases, it is good to ask to which index the adjustable rate of interest is tied to. Usually they are fixed for a period of 1-5 years and then become adjustable.
Mortgages – fixed rate:
The interest rate of the loan amount is fixed in the case of fixed rate mortgage till the end of the term regardless of the market fluctuations. The debtor will never have to pay more than the fixed interest rate at any cost. The only means by which a fixed rate mortgage can change is through Refinancing.
Refinancing:
It is a process of changing the existing mortgage terms of agreement. The debtor can go for refinancing when the interest rates are lower so that he can save money qualifying for the lower rate of interest. The length of the term can also be adjusted to be either long or short using refinance option. Care needs to be taken when going for refinancing of mortgages as it entails for new closing costs. Fees and closing costs are involved in this method.
Appraisal:
The crucial part of mortgage is the appraisal. Before going for a loan from a bank, the value of the house must be assessed properly. An appraiser can determine how much the house is worth actually by inspecting the features of the house and by comparing it with the neighborhood houses. If any addition or embellishment is made to the house, it can raise the value of the house, but may require to appraise the new value of the document.
Tags: home buying, home financing, mortgages, mortgages types
Posted by
admin on May 1, 2009 in
Finances,
Mortgages The proposed law allowing bankruptcy judges to modify mortgages, known as the cramdown bill, was voted down Thursday by the U.S. Senate.
The financial industry opposed the bill, arguing that the change would drive up interest rates and make the market less stable. Some senators also were concerned that their constituents who pay their bills on time would resent this measure.
Minority Leader Mitch McConnell, who led the opposition, says the vote “ensures that homeowners who pay their bills and follow the rules won’t see an interest-rate hike at the whim of a bankruptcy judge.”
The reform was a key part of President Obama’s foreclosure prevention plan, leaving some to question ultimate likelihood of its success.
“It won’t render the loan modification program useless, but it removed an important ingredient that would have helped realign everybody’s interests,” says Barry Zigas, director of housing policy for the Consumer Federation of America.
Source: CNNMoney.com, Tami Lubby (04/30/2009)
Tags: cramdown bill, Finances, home financing, mortgage modifications, mortgages
Posted by
admin on Apr 17, 2009 in
Buying,
Finances,
Housing,
Real Estate In the past few months we have written a lot about the different home loans available to the home buyers, specifically, FHA loans and the different benefits of this mortgage product. But we have also written about the tightening of requirements in the mortgage industry, especially with the Freddie/ Fannie Conventional loans.
We have previously highlighted another type of conventional loan that requires NO down payment, NO monthly PMI, where the seller is allowed to pay all reasonable closing cost and prepaids, and NO hit to the rate for the zero down, it is NOT a first time home buyer program and no reserves needed.
But did you know that this particular mortgage also has a unique feature that all reasonable closing cost and prepaids can be rolled into the mortgage without the seller actually having to “pay” the cost (as long as the house appraises for the increased loan amount)? Why is this a good thing? We have had buyers who have submitted offers for homes that included seller concessions for the home sellers to help with the closing costs, only to have those offers rejected. Now buyers have another option and are not at the mercy of the homes eller. It is a conventional loan that has these great options and it is government backed loan (like FHA loans) but is backed by the USDA.
The downside of this loan is that tt is area-specific and income-limited, so it is important that you work with a lender who is very knowledgeable with these loan guidelines. If you are interested to find out which areas are eligoible for USDA loans, click here.
If you need help in finding a knowledgable lender or to better understand how this loan can be of benefit to you, or just give you some assistance with your home search and loan pre-qualification steps, simply call us at 609-417-1084 or email us at info@i-teamhomes.com
.
Tags: government backed loans, mortgages, no downpayment loans, usda, usda rural loans
In the last two days we have received numerous flyers in our e-mail from local mortgage representatives telling us that First Time Home Buyers can receive their $8,000 credit UP FRONT and use this money as a DOWN PAYMENT. This sounded too good to be true so we checked it out and we were right, this was too good to be true.
We personally phoned the IRS this morning, February 27, 2009 and spoke with an IRS expert on the First Time Home Buyers Credit. This is what we learned:
The 2009 tax credit is for $8,000 and for properties purchased in 2009 by first time home buyers and does not have to be paid back provided the buyer lives there for 3 years.
The buyer can apply for the 2009 tax credit on their 2008 income tax return if they have not filed yet. If the buyer has already filed their 2008 return and received their refund or paid their taxes, they can file an amended return and receive the $8,000 tax credit without having to wait to file the 2009 taxes. Of course, the buyer can wait and apply for the $8,000 tax credit when they file their 2009 income taxes next year.
This provision, while a little confusing, was designed to jump start housing market. However, under NO CIRCUMSTANCES can a buyer apply for this $8,000 credit BEFORE THEY CLOSE ON THE PROPERTY AND USE THIS MONEY FOR A DOWNPAYMENT. They are not a FIRST TIME HOME BUYER until they have (bought) closed on the house and have the keys in their hands.
If you think about this logically, you would realize that if in fact this was an $8,000 gift for a down payment, it would be all over the news. We wouldn’t need some mortgage representative to tell us about it. This very loose interpretation of the First Time Home Buyers credit is just another attempt to get around the rules.
We can think of some serious ramifications of applying for a tax credit you have yet to earn. We can sum it up in two words TAX FRAUD. We do not want any mortgage representative telling our buyers to commit fraud. We can imagine some nightmare scenarios that we do not wish to be involved, the least of which the buyer does not settle, for whatever reason and has applied for and received the $8,000 credit. The worst of this is that when the ‘buyer’ is audited the following year, for applying for a tax credit that they did not earn and they tells the auditor that their real estate agent told them to file for the money.
We suggest that anyone who is interested in finding out the FACTS regarding this $8,000 tax credit for first time home buyers, that they call the IRS directly at 1-800-829-1040 and ask to speak to an agent who is familiar with the FIRST TIME HOME BUYERS CREDIT and ask the direct question, “Can a first time home buyer apply for the $8,000 credit before they close on a property and use this money for a down payment?” The answer will be NO. But check it out for yourself. If you have a buyer who has been told this by a mortgage rep and does not believe you when you tell them they cannot apply for this credit before they close on the property, give them the IRS number. Keep in mind that you are calling the Federal Government and will be on hold for 15-20 minutes. But it is worth the wait to learn the facts. Use your speaker phone, the time will fly by.
If something sounds too good to be true, it is our responsibility to wade through the muck and verify, verify, verify. The last thing we need is another mortgage catastrophe a few years out
Linda Kerr Iwaniw & Terry Iwaniw
RESALES & INVESTMENT REALTY, LLC
Haddonfield, NJ.
Tags: buying a home, first time buyers, first time home buyers, firstv time home buyer credit, homeowners, mortgages, tax credit
Posted by
admin on Feb 18, 2009 in
Announcements,
Mortgages 
I just read a news article that both Fannie Mae and Freddie Mac are planning on toughening up their credit score and downpayment rules. As of April 1, they will implement new guidelines for loans backed by them. The new guidelines will require buyers that are putting down less then 25% for a downpayment to be charged a penalty of 3/4 of a point (a point equals 1% of the loan amount). It won’t matter what the buyer’s credit score is, if they are putting less then 25% down for a mortgage loan, they will be penalized 3/4 (0.75%) of a point.
Buyers of duplexes, where one unit is owner-occupied and the other is rented, will be charged a 1 percent add-on as a penalty, while those who are refinancing their homes and who plan to take cash out will be charged as much as three points if they have a low to moderate equity stake in their homes.
Many major lenders are already factoring in these higher fees, which reduces the effectiveness of the stimulus efforts. Brad German, Freddie Mac’s spokesman, said that the loan categories & credit risk combinations targeted by these fees “default at four to eight times” the rate of other mortgages that were backed by Freddie Mac. The reason for these fees, according to German, “We have to manage these risks appropriately,”.
So, if you are seriously planning to buy a home, this may be an ideal time to make that offer on that special home, get under contract, and settled before your mortgage loan includes these new fees and charges. If you haven’t found that new home, yet…don’t delay! Call us NOW at 609-417-1084 so we can help you find that special new home in record time and get you moved in.
Linda & Terry Iwaniw
REALTOR Associates
First Time Home Buyer Specialist
Marketers of HUD Owned Homes
ReSales & Investment Realty, LLC
856-795-3111 x263
609-417-1084
http://www.snewjerseyhomes.com/
Tags: buyer credit, buyers, credit, credit risk, Fannie Mae, fees, Freddie Mac, loan defaults, loan limits, mortgage loans, mortgages, points
Posted by
admin on Dec 19, 2008 in
Uncategorized There is another news announcement that “Buyers Being Lured to 100% Loan Program” that was in the recent issues of The Wall Street Journal. The article states that more buyers in search of home loans are turning to an obscure program operated by the United States Department of Agriculture.
Well, we wrote about this program a few months back. The blog entry detailed this little know mortgage loan program. The program allows no-money-down purchases. For those that qualify, a borrower can seek up to 102 percent, including a mortgage insurance policy. To quality, buyers can’t have income that exceeds 115 percent of the median county income. Additionally, the loans are restricted to low-density areas (usually towns of no more than 25,000 residents). The loans are made by private lenders, which are then insured by the government.
For more information, contact your personal mortgage representative. Or, if you don’t have one, we can highly recommend a few that we have done business with and have been completely satisfied with their service, as have our clients. Just contact us by calling 609-417-1084.
Find your next home at our new and updated web site.
Tags: buyers, Finances, financial, loans, mortgage loans, mortgages, no downpayment, no money down
Stumble It!