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Posts Tagged ‘Financing’
Refinancing under Obama’s Plan
Many people have seen or read reports about new programs being set up under the Obama administration to help with the housing market crisis. One of these programs is that help is being given to people that have little or no home equity which may make it hard or even impossible to refinance their home and save more money now and in the future. This program is a good idea, but many may not know if their mortgages will qualify for it or not. Here are some basics to help you know if you qualify or not and what to do once you know. This way the whole process is a little easier for everyone.
Contact you real estate agent and lender
It is part of their job to know about all new programs that may benefit current or future homeowners. They may be able to answer questions that you have or provide you with information of someone who can. They are a good starting point.
Qualify if you owe 80-105% of your current mortgage
If you owe this much on your current mortgage then you will qualify for refinancing under Obama’s plan. If you owe more, like many homeowners in Florida or California, you will not qualify under this plan and may need to consider alternatives.
Loan backed by Fannie Mae or Freddie Mac
More than half of single family loans are backed by either Fannie Mae or Freddie Mac, but many people do not know this. If you are unsure who backs your loan, it is a good idea to contact your lender for details and further help.
Have Conforming Loan
This means having a loan under a certain amount. In many places, it is under $417,000, but in areas such as San Francisco, Boston, or Washington, D.C., it may be up to $625,500.
Fill out a loan request
If you are still unsure if you qualify, you can fill out a loan request, gather up your paperwork, be informed, and be patient. Many people are filling out these requests, so it may take time to process your own.
Many people are struggling because of the economy and the housing market crisis, but some programs under Obama’s plans may help. Now that you have more information, it is important to follow these steps and to continue to stay informed about any updates or changes that may help you and your family in the future.
Things to Know about Real Estate in the New Year
The New Year has just begun and this brings hope and possibilities for many things. Maybe this will be the year of more jobs, economic recovery, ending wars, and maybe even the recovering of the housing market. Maybe this will be the year to buy or sell a house and get that perfect dream home or make that sale you have been waiting for. Here are some things about the real estate market that may help you to know whether to buy or sell that house this year.
The first thing anyone should do in trying to find out about real estate or the housing market in this New Year to consult a real estate agent. It is a real estate agent’s job to know about new housing trends, new things to look for or beware of and more. If you need to know whether to buy or sell that house this year or whether to wait, ask your real estate agent for advice first. They are an excellent resource and get help you get started and help you have a great new year.
Prices are more stable now than they had been and will continue to show improvement this year but first they may face some more declines in some areas before becoming more stable and reasonable for everyone. Also, people being late on their mortgage payments will most likely continue for a good portion of this year because the job market still needs to improve and until it does, many people are struggling to come up with their mortgage payments. There were also mortgage programs in place last year and in other years to give homeowners a good mortgage rate. Many of these programs will expire and this will mean that mortgage rates will once again rise.
Also, due to mortgage rates increasing and the job market not greatly improving yet, foreclosures are predicted to be higher at least in the beginning part of this year and until the job market improves. It will also continue to be a buyer’s market, especially with more foreclosures happening and seller’s willing to accept lower prices just to make a needed sale.
Plans to help the housing market and mortgage rates are also expected to be revised and tax credits may be extended through the summer. Also, depending on where you live will greatly affect how the housing market is.
These tips and information about real estate in the New Year will help you make better informed decisions about whether to buy or sell a home this year. Knowing this information can help you know what places to look in when looking to buy a home. They can also help you know how much to save for a home or whether you should just remodel an existing home. They can also help you stay updating on the housing market and continue to make informed decisions in the future.
Preapproval for a Mortgage
Before you buy your first home, your Syracuse real estate agent will probably recommend that you take the time to get preapproved for a mortgage. Taking the time to narrow down lenders and get a definite highest amount that you can spend on a home can save you a lot of time and frustration down the road.
Once you know what you can spend on a home, you no longer have to waste time on homes you can’t afford. Instead of looking out homes outside of your price range, you can concentrate on the ones will be able to buy. This will save you a lot of energy and probably even speed up your search for a home. It also allows you to worry about something besides the price of a home when you’re looking at it, freeing you up to pay more attention to the finer points of the homes you look at.
Once you have found the perfect home, you can make an offer, confident that you have the financing to back it. Sellers will appreciate knowing that you have already been approved for a mortgage for the home; they won’t be put into the situation of trying to close the property only to have financing fall through at the last minute. If there are multiple offers, this could give your offer the edge it needs over the others. This will work in your favor even more if the sellers are hoping to close as soon as possible. Instead of closing after a month or more, it may only take a couple of weeks. Being preapproved for a mortgage also gives you a great bargaining position. Because sellers know that your financing is a sure thing, they may be more willing to work with you during the negotiation process.
It is important to know that being preapproved is considerably different than being prequalified. When you are preapproved, you’ve essentially gone through the entire mortgage approval process. The preapproval letter you’re given states that you will be getting a mortgage for up to a certain amount. This is usually only good for a limited amount of time, depending on the lender, but you should have plenty of time in which to find a home.
A prequalification letter is based on a much simpler process. The lender looks at briefly at your current financial status, and lets you know how much of a loan you could afford. This is not the same as what you will actually be getting for a mortgage, and it is non-binding. There is no promise implied in any of the letter. The loan amount, interest rate and terms will all be determined when you apply for the actual loan.
Guidelines for Short Sales Set by Treasury
Last Monday the U.S. Treasury set guidelines to speed up short sales of homes and make other loan modifications to try to keep foreclosures from rising. The Home Affordable Foreclosure Alternatives program provides financial incentives for making short sales simpler. This program involves a lender to agreeing to pay the sale price of a home and pay off its mortgage even when the price is short of the price owned by the homebuyer.
This program also includes guidelines such as setting limits on the amount of time it takes a bank to accept an offer, helping borrowers with their debt and limiting claims from lenders. Even though this Home Affordable Foreclosure Alternatives program has good intentions to help, it has had limited success in doing so. Due to this limited success on Monday more pressure was put on mortgage companies to make the trial of 650,000 modifications permanent.
Short sales are a big favorite of real estate agents and other community group over foreclosure properties because they help with the borrower’s credit rating and leave the property in better condition than when the homeowner got evicted. However, agents have complained about short sales because of the lenders not following through and whether or not they will hold the buyer responsible for the debt in the future.
These new requirements and guidelines include mortgage servicers having ten days to approve or disapprove the request for a short sale and it also requires the lender to release the borrower from all debt. It also does not allow mortgage companies to reduce real estate agent’s commissions on a short sale.
This new program seems to have all the best intentions and if it is able to succeed further and in more areas, it could be very good news for homebuyers and also real estate agents. It may help the housing market as well because more people will be able to afford a home. So, home buyers and agents should look out for updates on this and other future programs to benefit homebuyers.
References and for more information visit:
http://news.yahoo.com/s/nm/20091130/bs_nm/us_treasury_shortsales
Is Paying off Your Mortgage A Good Idea?
The recent recession has taught most Americans one thing: there is no such thing as a sure thing when it comes to financial security.
This has also opened up a new awareness of credit and debt. To avoid falling behind in the case of a job loss, it pays to not have any major payments to make every month. The less you have to pay to others, the more of a cushion you have in case things go wrong. But should that mean rushing to pay off your home?
Probably not.
It’s really a numbers game. If you have an extra $200 dollars a month to put towards debt, you should be concentrating on the debt with the highest interest rate. If you have a credit card charging you 15%, and a mortgage charging you 8%, pay off the credit card first. Work your way down to the lower interest rates when trying to pay off debt.
Don’t assume that you should tackle the big ticket purchases (your home) first. Once the items with the highest interest rates are taken care of, go for the smallest balances. These bills are usually the quickest to pay off, and getting them taken care of can provide a sense of accomplishment. They can also keep you motivated on paying off futher debts.
After that has been taken care of, start putting together a savings account, if you don’t already have one. Having a cushion to cover you in case of a sudden reduction in income, due to illness or job loss, will do more good than being ahead on your mortgage. Ideally, you want to aim for 3 months worth of expenses, at the very least.
Instead of paying off your mortgage at this time, start putting money into investments. Stocks and bonds give you more for your money than paying off your mortgage would. If you can put $200 a month into an investment opportunity that gives out 8% interest, your money is working harder for you than if you were to pay off a mortgage with 7% interest. You should also be putting money into an IRA for retirement.
That being said, there is a pleasantly secure feeling knowing that you own your home outright, and even if a financial crisis happens down the road, there is no way to lose your home. If your going to pay off your loan, remember to check first for prepayment penalties, which can equal around $6,000 depending on your loan.
Home Sales Rising Due to Ending Tax Credit
Due to first time home buyers tax credit ending by April 30th instead of November 30th, home sales are rising as home owners rush to sign a purchase agreement by the end of April in order to qualify for the tax credit. Sales are expected to rise 1.4 percent which means an annual rate of 5.65 million which is up from September which was only 5.57 million. Even though sales are expected to drop in the winter months because the tax credit is not running out until later, this means an expected sales increase in the spring, which is also in most areas a better time for selling homes due to warmer weather.
Even though this is some good news for the housing market, there are still many people facing foreclosures. Fourteen percent of homeowners are either getting behind on their mortgage payments or were in foreclosure state by the end of September. Also, if unemployment keeps rising, than the housing market will continue to suffer. There are some plans to lower mortgage rates next year but the government is limited in being able to help the housing market.
The best thing that can be taken away from this news is that there is hope for the housing market because sales are expected to rise in the Spring, so even if things may seem slow this winter, don’t give up on getting that perfect house you want in the spring and if you are person selling your home, push more to sell in the Spring, when more homebuyers will be rushing to beat that tax credit deadline.
For more information, contact your real estate agent or visit: http://news.yahoo.com/s/ap/20091123/ap_on_bi_ge/us_home_sales
Incentives to offer a Buyer during a down Market
Even though the housing market is on its way to improving and is even improving in some areas more than others, the market has a whole is down because of the recent recession. Due to this, many buyers are holding off on buying and saving up their money for later and this can be bad news if you are a seller, but there are some things you can do, to help motivate a buyer. Here are some tips on incentives to offer a buyer to help make a sale.
Ask your Syracuse real estate agent for advice and help
As real estate agents, they have plenty of experience knowing what does and what does not motivate buyers to purchase a home. They will be able to offer you some advice and techniques to get you started.
Pay for inspections or repairs
In order to motivate a buyer to buy your home, one option is to offer to pay for an inspection and any repairs to the home up to a certain amount as agreed upon by both buyers and the sellers.
Help with financing
Another motivation is to help with the financing of the home up to a certain amount. If the buyer does not have to pay for all the financing, they will be more likely to purchase your home.
Offer appliance packages
These days many sellers are offering possible buyers free appliance package deals as an inventive to purchase the home. These packages may include washers and dryers, ovens, or even a new television. They are real incentives for any buyer, especially first time buyers.
Give Pre-paid utilities option
This option takes some of the burden off the buyer to pay the electric bill that first month or the gas bill or maybe even the cable bill. This helps motivate buyers to purchase homes and hopefully your home too.
These tips for offering incentives to buyers so they will be more motivated during a down market or recession can make both parties happy. The seller will not have to worry about the burden of paying for two homes in their future and the buyer can enjoy their new home with fewer worries about money and other move in details. It is really a good idea for everyone involved.
Tax Credit Extension Seems Likely
It seems likely that the U.S. Senate will approve a deal to extend the First-Time Homebuyer Tax Credit, but the devil is in the details.
Florida Democrat Sen. Bill Nelson told reporters traveling to Florida with President Obama on Monday that he thought that the extension would be approved, but both senators and representatives are among those who think that there should be some fiscal offset for the cost of the extension. Spending any more money on the stimulus effort also could stir up a hornets’ nest in some circles.
The proposal in the Senate that appears to have the most likelihood of passage would extend the $8,000 credit through March 31, then its value would drop by $2,000 for each of the subsequent three quarters of 2010. This plan was offered by Senate Majority Leader Harry Reid of Nevada and Senate Finance Committee Chairman Max Baucus, a Montana Democrat.
Source: Associated Press, Andrew Taylor (10/26/2009) and The Wall Street Journal, John D. McKinnon (10/27/2009)
Graduated Payment Mortgages
If you are a first time buyer or just a buying that only has a certain amount of income right now, finding financing to help you purchase that new home may be a challenge. You do have options though and one of them is a graduated payment mortgage. This type of mortgage has a lower payment in the beginning to help you get started. This may be a good option, especially if this is your first home. Here are some tips about graduated payment mortgages to help you out. This way you can have less to worry about and just enjoy your new home and future.
Ask your Syracuse real estate agent for advice
Real estate agents know that financing a home plays a big role in whether or not you can afford to purchase a home. They can help you go over your options or help you find a lender that can help you out. They are a great first resource.
Starts out with lower payments
Graduated payment mortgages start out with lower payments that increase over the next few years. This allows you to have more money while you are looking for a better job or waiting on a promotion.
Allows you to save for later
This loan allows you to save money for later for home repairs or remodeling or just to budget more for those later increased payments
Good for starter homes
If you only plan to stay in the home for a few years and then move, this is the loan for you, because it has those lower payments in the beginning and may not increase until your income does, so it is good for first homes or starter homes.
Has a fixed rate and maturity
This loan has a fixed interest rate and maturity so that is good since the payments may increase over the years. Just make sure you budget well for the increases that will happen.
If you are just starting out and this is your first home, there is so much to think about and consider. Following these tips and advice about graduated payment mortgages will at least help get you started and give you one less thing to worry about. This way you can focus more on your future and your new home.