Thursday, March 31, 2011
www.homepath.com
Homepath.com is a site of Fannie Mae properties for which there are some great deals available. These home are eligible for 5% down financing. They also require NO appraisal and have NO mortgage insurance despite the low down. It's a great option to look at homes that can save you money on the purchase end and mortgage end.
Friday, February 19, 2010
Some general information about Short Sales.
Some general information about short sales.
What is a short sale? A short sale occurs when a mortgage lender allows a financially distressed homeowner to sell his home for less than what he owes on the mortgage. The short sale process varies by state, so it's very important that financially distressed homeowners who are considering a short sale contact a qualified real estate agent in their area.
Who qualifies for a short sale? Typically the homeowner must suffer a financial hardship that has prevented him from making his mortgage payments and lacks the financial means to correct the situation; the homeowner is in or facing foreclosure; and the homeowner has little equity, no equity or negative equity in the property. Investment property owners may also qualify for a short sale as long as an acceptable financial hardship is involved. Ultimately the lender will decide whether a homeowner or investor qualifies for a short sale and each lender has their own method for determining whether a property owner qualifies for this type of sale.
What are the benefits of a short sale? The homeowner is able avoid foreclosure, which is a stressful process that can have a significant negative effect on one's credit score. Depending on the terms of the short sale, the home seller may also be able to mitigate his financial obligations if the lender "forgives" the difference between the property sale price and amount owed on the mortgage. This would allow the home seller to walk away from the transaction free of debt related to the mortgage. Lenders also benefit from short sales because often times they are less costly and less work than the foreclosure process. The buyer also may benefit because a short sale is a distress sale and he may be able to purchase a property at a discount.
How much does a short sale cost the home seller? The closing costs and real estate commissions are typically paid by the lender; however these details are finalized in the short sale contract between the home seller and the lender. In some cases, the lender may require that the home seller pay the difference between the property's sale price and the amount owed on the mortgage. Usually, if the home seller can afford to pay the difference, the lender will require that they do pay the difference.
What do buyers need to know about purchasing a short sale property? Buyers interested in a short sale property must be patient. One way to expedite a short sale purchase is to be a cash buyer, but this isn't always possible. Being well-qualified with a substantial down payment and preapproved are second best. Buyers should also know that banks don't like to negotiate repairs or other contingencies. It's important that buyers considering the purchase of a short sale property hire a real estate agent who is very experienced at closing these types of transactions. Experienced agents can help alleviate much of the stress related to the short sale transaction by knowing what to look out for and how to best communicate with the lender.
How long does it take to complete a short sale? It depends on the complexity of the sale. Short sales can take several months to process – sometimes up to 120 days or longer. Banks aren't structured to efficiently sell properties. Financial institutions have many regulatory procedures that must be completed before a short sale can be closed. Oftentimes it's just a matter of cutting through a lot of red tape following the lender's various short sale policies, which usually include many people reviewing and approving specific aspects of the sale. If more than one lender is involved, the short sale can become more complicated and time consuming.
What is a short sale? A short sale occurs when a mortgage lender allows a financially distressed homeowner to sell his home for less than what he owes on the mortgage. The short sale process varies by state, so it's very important that financially distressed homeowners who are considering a short sale contact a qualified real estate agent in their area.
Who qualifies for a short sale? Typically the homeowner must suffer a financial hardship that has prevented him from making his mortgage payments and lacks the financial means to correct the situation; the homeowner is in or facing foreclosure; and the homeowner has little equity, no equity or negative equity in the property. Investment property owners may also qualify for a short sale as long as an acceptable financial hardship is involved. Ultimately the lender will decide whether a homeowner or investor qualifies for a short sale and each lender has their own method for determining whether a property owner qualifies for this type of sale.
What are the benefits of a short sale? The homeowner is able avoid foreclosure, which is a stressful process that can have a significant negative effect on one's credit score. Depending on the terms of the short sale, the home seller may also be able to mitigate his financial obligations if the lender "forgives" the difference between the property sale price and amount owed on the mortgage. This would allow the home seller to walk away from the transaction free of debt related to the mortgage. Lenders also benefit from short sales because often times they are less costly and less work than the foreclosure process. The buyer also may benefit because a short sale is a distress sale and he may be able to purchase a property at a discount.
How much does a short sale cost the home seller? The closing costs and real estate commissions are typically paid by the lender; however these details are finalized in the short sale contract between the home seller and the lender. In some cases, the lender may require that the home seller pay the difference between the property's sale price and the amount owed on the mortgage. Usually, if the home seller can afford to pay the difference, the lender will require that they do pay the difference.
What do buyers need to know about purchasing a short sale property? Buyers interested in a short sale property must be patient. One way to expedite a short sale purchase is to be a cash buyer, but this isn't always possible. Being well-qualified with a substantial down payment and preapproved are second best. Buyers should also know that banks don't like to negotiate repairs or other contingencies. It's important that buyers considering the purchase of a short sale property hire a real estate agent who is very experienced at closing these types of transactions. Experienced agents can help alleviate much of the stress related to the short sale transaction by knowing what to look out for and how to best communicate with the lender.
How long does it take to complete a short sale? It depends on the complexity of the sale. Short sales can take several months to process – sometimes up to 120 days or longer. Banks aren't structured to efficiently sell properties. Financial institutions have many regulatory procedures that must be completed before a short sale can be closed. Oftentimes it's just a matter of cutting through a lot of red tape following the lender's various short sale policies, which usually include many people reviewing and approving specific aspects of the sale. If more than one lender is involved, the short sale can become more complicated and time consuming.
Sunday, February 14, 2010
First time homebuyers tax credit fact sheet
2009-2010 Home Buyer Federal Tax Credit Fact SheetWho is Eligible
• First-time home buyers, who are defined by the law as buyers who have notowned a principal residence during the three-year period prior to the purchase,may be eligible for up to an $8,000 tax credit.
• Existing home owners who have been residing in their principal residence forfive consecutive years out of the last eight and are purchasing a home to betheir principal residence ("repeat buyer"), may be eligible for up to a $6,500tax credit.
• All U.S. citizens who file taxes are eligible to participate in the program.Income Limits
• Home buyers who file as single or head-of-household taxpayers can claim thefull credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if theirmodified adjusted gross income (MAGI) is less than $125,000.
• For married couples filing a joint return, the combined income limit is $225,000.
• Single or head-of-household taxpayers who earn between $125,000 and$145,000, and married couples who earn between $225,000 and $245,000are eligible to receive a partial credit.
• The credit is not available for single taxpayers whose MAGI is greater than$145,000 and married couples with a MAGI that exceeds $245,000.Effective Dates
• The eligibility period for the tax credit is for homes purchased afterNov. 6, 2009, and before May 1, 2010. However, home purchases subject toa binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.Types of Homes that Qualify
• All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.Tax Credit is Refundable
• A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.• For example:• A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time home buyer tax credit).
• A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).
• All qualified home buyers can take the tax credit on their 2009 or 2010 income tax return.Payback Provisions• The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.
• First-time home buyers, who are defined by the law as buyers who have notowned a principal residence during the three-year period prior to the purchase,may be eligible for up to an $8,000 tax credit.
• Existing home owners who have been residing in their principal residence forfive consecutive years out of the last eight and are purchasing a home to betheir principal residence ("repeat buyer"), may be eligible for up to a $6,500tax credit.
• All U.S. citizens who file taxes are eligible to participate in the program.Income Limits
• Home buyers who file as single or head-of-household taxpayers can claim thefull credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if theirmodified adjusted gross income (MAGI) is less than $125,000.
• For married couples filing a joint return, the combined income limit is $225,000.
• Single or head-of-household taxpayers who earn between $125,000 and$145,000, and married couples who earn between $225,000 and $245,000are eligible to receive a partial credit.
• The credit is not available for single taxpayers whose MAGI is greater than$145,000 and married couples with a MAGI that exceeds $245,000.Effective Dates
• The eligibility period for the tax credit is for homes purchased afterNov. 6, 2009, and before May 1, 2010. However, home purchases subject toa binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.Types of Homes that Qualify
• All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.Tax Credit is Refundable
• A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.• For example:• A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time home buyer tax credit).
• A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).
• All qualified home buyers can take the tax credit on their 2009 or 2010 income tax return.Payback Provisions• The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.
Thursday, February 4, 2010
Bad jobs loss report good for mortgage rates
As reported in Yahoo finance today, the US Government may have underestimated the job loss numbers in the us. While the Government estimated 7 million jobs had been lost since the downturn in dec of 2007, new evidence is suggesting that number is under by 1 million and the actual number of job losses is around 8 million.
This has of course had a negative effect on the stock market which is down around 268 points and has helped the bond rally as the yield has dropped to 3.60 on the 10 year note.
For anyone unfamiliar with the bond market's effects on mortgage rates, it is generally as follows. If the bond yield goes up rates will generally worsen. If the bond yield goes down rates will Generally improve. With a big move of .1 down to 3.6 we should see rates improve a good bit tomorrow when the lenders post their early morning rates.
Kind of unfortunate but what's bad for the economy a lot of times is good for mortgage rates.
This has of course had a negative effect on the stock market which is down around 268 points and has helped the bond rally as the yield has dropped to 3.60 on the 10 year note.
For anyone unfamiliar with the bond market's effects on mortgage rates, it is generally as follows. If the bond yield goes up rates will generally worsen. If the bond yield goes down rates will Generally improve. With a big move of .1 down to 3.6 we should see rates improve a good bit tomorrow when the lenders post their early morning rates.
Kind of unfortunate but what's bad for the economy a lot of times is good for mortgage rates.
Monday, February 1, 2010
Debt to income ratio
You've probably heard this term tossed around a bunch and maybe never really explained. Debt-to income ratio is used by lenders to qualify a borrower for how much they can afford. Quite simply it's as it sounds, the lender takes your debt and divides it by the monthly gross income you make and thats your DTI.
The lender will take and break it into 2 ratios, the front end and back end ratio. Front end ratio is just your montly housing costs which include principle, interest, taxes and home insurance. The back end ratio includes all your other consumer debt. (ie car payments, credit card payments, student loans, etc).
In general lenders are concerned with the back end ratio. Also in General they will lend on a back end ratio between 38 and 50%. The specific back end ratio guidelines vary from lender to lender and product to product. The guidelines can be flexible as Compensating Factors are condsidered. Ie, if an applicant has higher credit and a lot of equity the Fannie Mae underwriting system may allow a higher DTI than someone who has little equity and lower credit.
As a quick example if someone has a monthly income of 8,000, their back end ratio (total amount of expenses) can be 3040 at 38%DTI or 4,000 at 50%DTI.
The lender will take and break it into 2 ratios, the front end and back end ratio. Front end ratio is just your montly housing costs which include principle, interest, taxes and home insurance. The back end ratio includes all your other consumer debt. (ie car payments, credit card payments, student loans, etc).
In general lenders are concerned with the back end ratio. Also in General they will lend on a back end ratio between 38 and 50%. The specific back end ratio guidelines vary from lender to lender and product to product. The guidelines can be flexible as Compensating Factors are condsidered. Ie, if an applicant has higher credit and a lot of equity the Fannie Mae underwriting system may allow a higher DTI than someone who has little equity and lower credit.
As a quick example if someone has a monthly income of 8,000, their back end ratio (total amount of expenses) can be 3040 at 38%DTI or 4,000 at 50%DTI.
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