Wednesday, March 31, 2010

Understanding the new FHA Loan changes

FHA Loan Changes - NOTE: NOW is the time to ACT on buying and/or selling real property!

In an effort to shore up its flailing balance sheet and dwindling capital reserves, the Federal Housing Authority is rolling out sweeping financial changes. FHA borrowers have to look better on paper and be better credit risks.

Mortgage insurance premiums are rising, too.

FHA Up Front Mortgage Insurance Premiums have increased from 1.75% to 2.25%. This translates to .50% added to the borrower’s loan amount. This change goes into effect for FHA Case Numbers ordered on or after 4/5/2010. FHA Case Numbers are ordered once the borrower has an executed Sales Contract and are ready to move forward w/the appraisal order. To put this into perspective, the increase shouldn’t affect a borrowers payment too much since it’s financed over 30 years like the following possible scenarios.

Assuming a $150,000 sales price
Old UFMIP 2533
after April 5th 3256
Difference $4/month

Assuming a $250,000 sales price
Old UFMIP 4221
after April 5th 5428
Difference $7/month

*assumption (5.25% rate, rounded #’s for simplicity, 3.5% down payment)

In its official announcement, the FHA said its trying to better position itself to "manage its risk while continuing to support the nation’s housing market".

The changes are effective with case numbers assigned starting April 5, 2010.

To find out how these changes may affect your real estate purchase or sell, contact a CENTURY 21 Judge Fite Company real estate professional today - 800-451-8055 or email

Thursday, March 11, 2010

Are you Ready to get off the Fence?

The Homebuyer's extended tax credit is about to come to an end - are you ready to get off the fence?

There hasn't been a time like this to buy a home in 40 years.

Interest rates are at historic lows but cyclical trends suggest they will soon rise. Home buyers may never see such a chance again

If you want to buy a house, now is the time, and if you don't act soon, you will regret it. Here's why: historically low interest rates!

The average 30-year fixed-rate loan with no points or fees is around 5.5%. That is the lowest the rate has been in nearly 40 years. In fact, rates are so well below historic averages that it should make all current and prospective homeowners take notice of this once-in-a-lifetime opportunity.

You can see how the trend upward began in the 70’s and peaked in the eighties. There has been a slow downward trend and we are now at the bottom. Experts agree that rates will begin to climb back up in the very near future.

What I'm trying to impress upon everyone is that if you are planning on being a homeowner now and/or in the foreseeable future, or if you are looking to move your family into a bigger home, then pay more attention to the interest rates than the price of the home. If you have a steady job, good credit, and the down payment, then you really are being offered the gift of a lifetime.

There is still time to get in on the Extended Homebuyer’s Tax Credit.

Now is the perfect time to revisit the extended and expanded Home Buyer's Tax Credit.

Why? Because now, as you calculate your tax bill or your tax refund, you can finally see in real terms just how beneficial a tax credit of up to $8,000 can be to your bottom line.

Here's the basics:

Qualified 2009 and 2010 first-time home buyers can get up to 10% of the home's purchase price or a maximum of $8,000. In November 2009, legislation extended a tax credit of up to $6,500 (or up 10% of the home's purchase price) to long-time residents of the same primary residence if they purchase a new main home. To qualify, eligible taxpayers must show that they lived in their previous homes for a five-consecutive-year period during the eight-year period ending on the closing date of the new home.

Important details to remember:

1) You don't have to pay it back (as long as you stay in your qualified home for at least 36 months).

2) If you qualify for the credit, you can still apply it to this year's taxes, even if you've already filed your returns, or save it for your 2010 returns.

3) This is a true tax credit, not a deduction. If you qualify for the full credit, there will be an actual dollar-for-dollar reduction of up to $8,000 (or up to $6,500 for qualified repeat buyers) on your tax bill now or in 2010.

4) New income qualification limits have been put in place that expanded the pool of qualified buyers.

5) If you purchased a qualified home or plan to after reading this article, you must have a contract in place by April 30, 2010 (with closing to take place by June 30, 2010), so don't wait!

There are, of course, other details and qualification requirements and restrictions that you'll need to consider – so please contact one of our real estate professionals or one of our in-house Loan Officers to find out if you are ready to get off the fence! Call 800-451-8055 or email