Thank you Veterans, I am always proud when I have an opportunity to help a Veteran and their family achieve the dream of homeownership!
What 2011 home buyer’s should know…NOW!
• Give yourself a head start by making sure you are pre-approved in advance. If it has been a while since your last pre-approval, Make sure that you get an updated approval and pre-approval letters, many lending guidelines have changed and you want to make sure you are pre-approved to the current underwriting guidelines.
• The monthly FHA mortgage insurance premium is now higher than it was earlier in the year. If you are an FHA buyer and haven’t been pre-approved or had your existing approval updated in the last 30 days, contact a mortgage lender to get a fresh approval.
• If you already know who you will be using as your Realtor, make sure that your lender and your Realtor are in communication often. As you begin to submit offers, it is critical that they work as a team to make sure you get the best performance possible giving you more strength as a buyer.
• If you know the neighborhoods you would like to live in. Start driving by the areas at different hours in the day and night, weekdays and weekends to get a feel for the community and to verify you can imagine yourself living there.
• Get serious about a budget and start now. If your current rent is lower than your future payment, begin to allocate your future mortgage payment towards housing. Whatever is left over after paying rent can go directly into savings so that you have sufficient funds to cover your down payment and closing costs.
• Be extremely cautious when filing your 2010 tax return. I have seen tax returns, where the non-CPA tax preparer just “threw in” some non-reimbursable business expenses to save the person some money on taxes. Make sure that you review all deductions and understand what you are signing and agreeing to when you file your 2010 tax returns. When possible, always consult with a CPA. My advice, talk to a CPA to make sure that you file the most accurate tax returns possible.
• Review any existing leases and consult with your landlord regarding your exit strategy, subleasing, move out requirements, etc. so that you know your exit strategy for your existing housing obligations.
• If you are a move up buyer, make sure that any existing home being converted into a rental is prepared and ready to be rented. Especially if future rent on the home is being used to qualify.
• Have fun with the process, it can be really exciting to know that each step closer is a step towards making a dream come true!
What Next Years Home Buyers Need to Know NOW
Rafael discusses a local radio promotion where the listeners all have multiple opportunities to win $500 by calling at specified times. One winner, reveals an insight as to market psychology when she wins $500. How does this relate to real estate and mortgages? Watch and find out! Rafael can be reached at rafael@thehomemap.com
However HUD is authorized to charge up to 3% up front mortgage insurance fee and up to 1.55% monthly mortgage insurance fee!
What really maters most to most homeowners? The affordability of the payment in most cases. This change give the HUD secretary the power to make these changes…. and drastically affect what homeowners pay for a FHA loan. In just over a week, it’s guaranteed that the monthly expense to finance a FHA loan will go up from .55% to .90%.
What will that do to consumers buying power?
Be informed, know your choices!
URGENT: FHA Homeowners and Buyers September 2010 Update
Back at the beginning of August the senate approved legislation that allowed FHA to increase their monthly mortgage insurance premium. This change was recently set to take effect on September 15th, but has since been pushed back once again to October 4th. What this means is that home buyers and homeowners looking to refinance have four weeks left to take out a new FHA loan under the current fee structure.
The cut off requires that a case number be assigned for the FHA loan, meaning a property address and loan application would be required prior to Friday October 1st to realistically have a chance of taking advantage of the lower current monthly premium.
The effect that the increase in premium will have to affordability for home buyers is by reducing a buyers buying power by increasing the total monthly expense on the home purchase. For current FHA loan holders, this will reduce the chances of being able to refinance an existing FHA mortgage to take advantage of a lower rate, as the monthly FHA premium increase will offset the savings caused by the lower interest rates. The following image illustrates an analysis of how the changes impact a loan scenario (*please note the original September 7th date has been pushed back to October 4th. Image can be found at http://jillwente.com )
The changes are in place and although pushed back a couple weeks, they are coming. This may be a window of opportunity for many people who are thinking of buying a home with a FHA loan or are considering refinancing their existing FHA loan. For those who have previously been qualified, this is a good opportunity to determine what your future “approval amount” will be after these changes.
-Rafael Perez
Rafael Perez, is a Mortgage Planner with imortgage specializing in FHA, Conforming, jumbo FHA/Conforming and other government loans (VA, CalPRS, CalSTRS) He can be reached at (619)928-0128 or by email. Licensed through the California Department of Corporations NMLS id 258379
There are currently many ways for a mortgage lender to restructure a FHA loan and refinance it through a FHA Streamline Refinance. Typically, this type of loan is more common in extremely low interest rate environments as there are still fee’s and expenses associated with the new mortgage. When interest rates fall low enough, lenders can absorb some, many or all of the costs associated with the new mortgage while still being able to offer the borrower a lower interest rate and payment.
One word of caution if you are considering a FHA streamline refinance, review your numbers. Consider how many months or years you have paid into your current loan. In addition when considering monthly savings, do you have a plan on what to do with the savings? A family that will be saving $300 per month could either invest or save it on a monthly basis or pay it towards the principle to accelerate the payoff and offset an increase in term.
If you have an existing FHA loan, you paid an up front mortgage insurance premium, this is partially refunded at the payoff of your current loan and a new mortgage insurance premium is added to the new mortgage. The up front premium will decrease after October 4th, but will increase the monthly mortgage insurance costs.
What does this mean? The window of opportunity to get locked in to the current FHA monthly expense structure will close in a month. The changes are real and it is unclear how long interest rates will remain low in this volatile economy.
We are seeing the lowest interest rates in the last 50+ years, the beauty of a 30 year fixed mortgage, is that you are guaranteed your rate and payment for 30 years. When you lock in the lowest rates in 50 years for 30 years, I am sure that external pressures like inflation will make the mortgage even more affordable along the way.
To put it into perspective, a 30 year fixed mortgage 30 years ago would have been around 13% interest, which is $2,250 a month for $200,000. Today, a 4.25% fixed rate mortgage would cost $1,001 per month. Or on the flip Side the buying power of $1,000 a month is $200,000, in 1980 @ 13% it would have been $90,000.
See how interest rate makes a difference?
At the end of the day, owning real estate is not easy or effortless, but there are rewards. You get to be your own landlord, there are attractive tax benefits, by paying off principle in your payment there is forced savings and you can bring pride of ownership to a community.
For more information please email: rafael@thehomemap.com or in California, you can apply directly at: Apply for a FHA Streamline Refinance
Licensed by the California Department of Corporations NMLS ID 258379
For more information about the CalSTRS mortgage loan please email rafael@thehomemap.com
Thank You Teachers for All YOU do!
Flip the House? Well not exactly, but similar opportunity for home buyers!
I once heard all the money in Real Estate is made when you buy it. At first I didn’t understand this statement, as clearly people cash out when they sell real estate at a profit. As I learned more about real estate, it became clear to me that the moment of purchase is the most critical financial moment in the life span of owning real estate. If you overpay for a home or buy in a deteriorating neighborhood you could start day 1 as a home owner with negative equity and will have some recovery to do before there is one cent of capital gain. If this same home is in an area with low rental prospects (or low rent amounts) your financial options are limited should you ever need to relocate or downsize/upsize. As opposed to someone who buy’s below market value, or in a neighborhood with high demand for rentals, not only do you have equity as a cushion, there are more options available when it comes to converting an existing home into a rental if selling doesn’t make sense.
Over the last 5 years many people saw the shows about “flipping” homes and sat their dreaming at the end of each episode of the possibility of making $50-$400 thousand dollars in a month. Many amateurs went out looking for any fixer they could find and for many people the “Dream” ended in disaster. If you compare the episodes where the home flipper ended in the green (at a profit) and those where the investor ended in the red, the key distinction could be made at the moment of purchase and the basic math used (or lack of it.) Those that bought the home at enough of a discount to account for repairs + acquisition costs + finance costs + resale expenses and still had room for miscellaneous expenses with a good profit margin ended up doing great while those who bought based on the “potential” they saw in the home rather than the financial viability of the project ended up walking away without a profit (if not a major loss.)
Something can be learned from those shows, it pays to take a moment and run the numbers before getting emotionally invested into the idea of owning a home. Buying a home can be a very wise financial move, but getting a great deal, being careful and creating some equity, can exponentially multiply the chances of the purchase becoming a great financial move. Unfortunately, people aren’t just giving away homes at a discount. The term “market rate” exists for a reason, that is the price the market is willing to pay for an average home in the area. So unless you are privy to some great information, the chances of walking into a home full of equity are very slim. This is true especially with the purchase of an average – above average home, someone else has already invested the resources to get “top dollar” for the home and it leaves little room for a buyer to make a profit at the point of purchase as well.
However, it is possible in today’s marketto get a great deal with room for some equity building right away. With a little bit of vision, some critical knowledge, patience and a vigilant eye great deals can be created in today’s market. In addition to “all the money in real estate is made when you buy it,” I have also heard “it’s smart to want the lowest priced home in a nice neighborhood, not the nicest home in a low priced neighborhood.” Another phrase is “location, location, location.” One may ask where these low priced homes, in great neighborhoods or locations can be found? The answer, in fixer upper homes. I know that many people don’t want to lift a finger with painting a home nor do they want to spend a day ripping out orange carpet. It is not commonly known that there are loan programs available that allow you to finance the repairs made by a contractor (or yourself) into the purchase price of a home.
An example of this is the FHA 203k rehab loan. You could purchase a home that needs a little help for below market value and finance the repairs. If the comparable sales are more than the acquisition amount (purchase price + repairs) then you could be setting yourself up to walk into some equity, as well as giving yourself the opportunity to select things like paint, carpet, cabinets and more. In essence, it’s like buying a “used” house with the “new” home experience of choosing flooring, colors, cabinets, etc.
This strategy does require patience and a good Realtor. It is not easy to actually get an accepted offer when you are competing against the same investors who are out there looking to flip the homes and make a quick profit (who happen to have large downpayments and cash.) However, with perserverance, preparation (being pre-approved in advance) and knowing what you want (and pulling the trigger when you find it) there are great deals to be had.
For more information on the FHA 203k loan in California please contact me at Rafael@theHomeMap.com or I can be reached at (619)928-0128.
Standard FHA guidelines do apply, 620 FICO minimum, 3.5% down payment of acquisition cost (purchase price + repairs.) Subject to underwriting approval of qualified buyers. Certain restrictions apply. Rafael Perez is a licnesed loan originator with imortgage, licensed by the California Department of Corporations 4130969 .
Posted via web from TheHomeMap
The informational flyer below has the details on eligibility for the Canadian foreign national vacation home program. Please email me with any questions, Rafael@theHomeMap.com
Snowbird Financing in Warm Southern California
Tags: 2nd home, Canadian, Laguna Beach, Malibu, Palm Springs, San Diego, US Mortgage, Vacation Home
“Going Green” seems to be a term we are hearing more often as the level of
awareness towards our impact on the environment is constantly increasing.
Cities are requiring recycling and utility companies are providing
incentives for improving the efficiency of your home. There could also be
financial benefits in being aware of the energy consumed by your home. When
buying a new home, there are loan programs that exist that allow you to
finance energy efficient improvements to you home (some without additional
income qualifications!) This is a relatively simple process that begins
with the new home intended to be purchased getting an energy efficiency
rating by an approved rater. This will identify the deficiencies in the
energy efficiency of the home and will prioritize them. Sometimes it doesn’t
take putting an expensive solar system to cut down energy usage (although
in many cases that can be financed too,) many times it is as simple as
properly insulating/sealing the home and ducts. As energy costs go up in the future, investing into the energy efficiency of
your home at the point of purchase, may turn out to be one of the best
financial AND environmental decisions you ever make. For more information on
California energy efficient mortgages please contact Rafael Perez with
imortgage, Rafael.Perez@imortgage.com (619)928-0128 direct.
