At the end of July, 2009 the Government will be IMPROVING the way consumer's receive documentation and disclosures for their mortgage loan... and in the short run, while everyone is getting use to it...it's not going to be pretty!
MDIA is the new Mortgage Disclosure Improvement Act, and here's what it will probably mean to you...
Delayed Closings.
The lender is required to disclose a new Truth In Lending to the Borrower if the TIL has changed by as much as .125%. That's not the difficult part - it must be done 3 days before you can close.
No More Last Minute Closings.
We will no longer be able to get a loan approved, and then close RIGHT away - because the "Final TIL" must be disclosed to the borrower.
Yes - there are other important items, like you can no longer close within a week of making loan application, but we don't run into that very often. the biggest change (while we are all getting use to this) will be, IMHO, Delayed Closings...
Your Title Company / Attorney Office needs to understand this PRONTO, as many times it will be the way those fees are reflected that could cause the TIL to change. After all, the loan officer gives the borrower an ESTIMATED TIL at application based upon what they THINK the fees will be... we're all going to have to communicate more, and make certain we know exactly what those fees are.
If you have questions about closing a mortgage loan in NC, please call Steve and Eleanor Thorne, Meridian Residential, 919-459-1313
USDA Home Loans have "special" qualifying guidelines that prohibit folks from purchasing if you make "too much" money!
In the past, that means that if you make more than the median income for your area - you might not qualify... but some recent "tweaks" to the system will allow more folks to qualify!!
Effective Immediately, USDA is looking at income "brackets." This means that if there are 1-4 people in the household, the maximum household income for Wake County, Johnston County is $88,400! To find out more about income rquirements for YOUR area, click here.
It's important to remember that USDA mortgages also have property location requirements. There are MANY places in the Triangle that qualify for USDA 100% financing - for more information on WHERE you can purchase a home and take advantage of this type of financing, click here!
If you are interested in purchasing a home in the Triangle, and you want to learn more about qualifying for a USDA home loan, please call Steve and Eleanor Thorne, Meridian Residential, 919-459-1313.
But the Federal Housing Administration (yep, FHA) now has a page on Facebook!
AND! If that wasn't cool enough (I mean you can leave questions on their WALL!) you can also follow them on Twitter!
Say what you might about Obama plans - but having access to information has never been this easy! Look at the Fianancial Stability Plan! (click here) and The Making Homes Affordable Details (click here)!
Website designers are BUSY in Washington - and I like it!
So often I hear this question! Sometimes it's because my client is purchasing new construction, sometimes it's because they feel they are qualified to tell what the condition of the home is on their own.. But honestly people whether you are buying or selling a home, you should have a professional home inspection performed. It's pretty cheap insurance really...
Using a home inspector (and I go so far as to say be sure they are ASHI certified) will give you the peace of mind that the electrical, mechanical, and structural elements are at least working to the extent of which they were intended (a phrase you'll hear often when discussing home inspection reports and requests for repairs).
The home inspector WILL not report on something cosmetic like a poorly painted room, or a scratch on those beautiful hardwood floors. But those items are easy fixes compared to some structural mishap with a chimney or support beam in the attic that shows up later.
When spending hundreds of thousands of dollars on a home why anyone would take the risk of not havingan inspection done is beyond me.. Oh I've even heard that they can't afford it because they need all the money they have for the closing and down payment. When in fact if you don't have an inspection completed you will risk considerably more than the few hundred dollars it costs to have one done.
And what about not getting an inspection done because it's a newly constructed home? Bad idea again and I'll give you a real life situation! During an inspection with one of my clients (who bought a wonderful custom built home in Holly Springs) their inspector Bill Delamar filled the luxurious jetted tub. He tested the jets and everything appeared to be working just fine. That was until he went to let the water drain out.
Drain out it did indeed, ALL onto the bathroom floor then making its way into the master bedroom. For you see the builder inadvertently neglected to connect the drain! Can you imagine that happening to YOU after a hectic day? Where they happy they had their home inspected? YOU BET THEY WERE!
It's customary here in the Raleigh Market to make an offer, negotiate, come to terms THEN have the home inspected. A home inspection is a contingency item in the offer. But I'm seeing more and more buyers that are going ahead and getting an inspection first before the deal is done. If you're not happy with what the inspector finds you're no worse off.
So what if your selling your home? Is it a wise decision to go ahead and have a home inspection done before putting the home on the market. You bet it is!! One important reason is that you can find and remedy any issues before they potentially become a deal breaker. Nothing gives a buyer warm fuzzies like a good home inspection report!
Home inspections - don't buy or sell without one!
About the author: Pamela is with The St. Peter HomeSelling Team at Prudential YSU Realty in the Triangle.
A team of passionate North Carolina Brokers dedicated to connecting their clients to success in home buying and selling in the Triangle.
With all the "Hoop Madness" going on - you might think of BASKETBALL!! And we love our basketball here in NC!!
But recently we were named the FASTEST growing area in the COUNTRY! "Raleigh, and its Cary suburb (where I live) make up the fastest growing metropolitan area in the country, according to federal statistics released last Thursday!"
The FASTEST GROWING! WOW!
My mom was an agent - and as kids, we routinely listened to her "speech." Today, we might call it the "elevator" speech, but my mom is also from the south - and there's NO WAY you could've heard the whole thing on an elevator ride in three floors! The essence of her speech to those considering moving to this area was this:
"We are in the middle of the State's Government. We are also in the center of one of the largest group of PHD's in the Country- since they teach at the more than 20 colleges and Universities that lie within 45 minutes of my house. There are 2 major teaching hospitals (UNC and Duke) that bring in people from all over the world for complex proceedures - and just with that base of employment alone - we are almost recession proof... In addition to that, my house is about 15 minutes away from the Research Triangle Park.
The Park was chartered to do RESEARCH, and draws off of the brightest minds at the Universites that surround it. Interenational and US based Companies love to base their Research Units here - because of the "Brain Trust"... but more importantly because of the TAX advantages!
We then have the manufacturing facilites for those research projects dotted all around the Triangle -and because we are not just focused on IBM, or telecom, and we're not just focused on "drugs" (pharmaceutical companies) ... we're pretty well recession proof. It's kinda' boring economics - and we haven't had the 10% to 15% annual appreciation in housing values, but it's a great place to live, work and grow a family. That's why people like to be HERE!"
Plus, I might add, we're 2 hours from the beach and 2 hours from our mountains. It's truly a wonderful area! It certainly explains why we have not had the same problems most of the country has!
So Ya'll Come On Down!! We're happy to make new friends!
The Obama administration is due to release details for the "Troubled Assets" on the Bank's books later this week. Those would be the "Mortgage Loans" that went on the bank books in 2006 before all of this mess happened.
It appears to me that the plan fall along the lines of this... If the assets have been sitting on the bank books for an extended period of time, and maybe they have had a few lates on the mortgages, then the government is going to loan money to Private Investors to purchase them. If the loans have been made under the newer, strict guidelines of the last 18 months, then the loans will be purchased through the new TALF program. This program means the government is purchasing the loans directly, we ("the people") will hold them, and sell them to banks once all of this mess is over.
If you are an Investor... purchasing mortgages from the banks, with government money, for pennies on the dollar seems like it would be a darn nice deal! I am NOT complaining here! Ohhh NO! We desperately need a plan for purchasing mortgages, so that we can get rates lower!
From Andy Lees at UBS:
The U.S. will give further details of the Geither public/private partnership plan to take bad assets off banks books, later this week a senior department official has said. The official said that the Treasury wants to put out enough information in the coming week so that the potential participants can better judge the proposal. It will also detail the timeframe in which it will become operational.
So far the plan is expected to leverage both public and private capital to buy assets using government financing. The initial funding would be from what remains of the USD700bn financial rescue fund, but a "placeholder" provision in President Obama's fiscal 2010 budget plan signals a possible request of around USD750bn in new funds.
Neel Kashkari, the Treasury's interim administrator for the USD700bn rescue fund told law makers last week that private investors are ready to invest in distressed mortgage assets if they can get financing.
With no private financing available, they could only pay prices that are too low for banks to be willing to accept. The bad asset plan is expected to be structured along similar lines to the TALF, which is scheduled to launch this week, although the TALF will be restricted to funds investing in highly rated asset-backed securities.
I wrote earlier that I believe one of the reasons that CREDIT SCORES are getting tighter in NC is because of a squeeze in values... This is a GREAT piece of information!
Okay first let me BUST a MYTH out there. The administration is telling people that even though YOU are not going to get bailed out while your neighbor who is going through foreclosure is, you should be happy because YOUR home will not suffer further loss in value if we can get these foreclosures sold and no longer sitting vacant, etc.
While there is truth to this it sure does not make those of us who have been working hard to keep our mortgage payments current feel a whole lot better. Many will start falling behind on their payments just to get bailout help...sad but true.
But here is the real deal on how appraisers are dealing with the valuation of your home in this foreclosure crisis. We DO NOT typically use foreclosed sales to compare against your home. We first evaluate your individual neighborhoods, streets, subdivisions and trust me when I tell you it can vary street by street in today's market.
If and only IF your subdivision, street or neighborhood is full of foreclosures, more so than your typical arms-length transactions, then we WILL using foreclosures as our primary source for analysis. WHY? because these sales have now defined your neighborhood. If there are more sales in your area which are not foreclosures then we will use those sales primarily.
Therefore your home may NOT necessarily decline in value due to a few scattered foreclosures in your area. Now here is where it gets a little muddy in the water....If you have a home right next to yours or a couple of doors down that has been foreclosed upon and especially if it looks "run down" and obviously vacant, this WILL have an effect on the value of your home to some degree regardless of the number of foreclosures in your area. WHY? because if you were looking to buy a home and the one next door to yours is quite frankly and eye sore, this has an impact on how the market perceives your home. Sad and not fair but true!
The foreclosures in your area or on your street and their proximity to yours has an effect from that point outward as if in a circle. The further the foreclosure/s are from your home, the better off you are!
Again, let me repeat, if you only have a few foreclosures scattered about your development, street (unless you only have a few homes on your street) or defined neighborhood, chances are you are not going to be heavily impacted as appraisers will use non-foreclosure sales whenever it is reasonable to do so and is not misleading to the lender to do so.
One thing I want to make clear! Appraisers do not determine the value of your home...Let me repeat this. Appraisers DO NOT determine the value of your home.....The MARKET DOES! We analyze the market and as long as we do this correctly and as long as we utilize properties that are truly comparable to yours and make the appropriate adjustments for any variances, then the market LEADS us to the appropriate opinion of value....So don't blame the appraiser for the value of your home okay? It is the market you need to blame.
One final note. Appraisers are supposed to protect banks from lending risks. Banks need appraisers to analyze NOW more than ever what the market is doing, what the value of the property is currently, what the trends have been and where they are likely headed.
Banks & Mortgage Companies in the past did not really care too much about the fact that we were trying to protect their interests as they wanted to close loans. Sad fact but true and that is why we are in this mess Today. Appraisers many times are considered a necessary evil and Lenders pressured many Appraisers to do what they wanted. Unfortunately many succumbed to that pressure.
Banks are now going the opposite direction and running scared. They are dictating to appraisers what the comparable properties should be. They are non believers in what our reports are telling them. Before they wanted the highest possible value, now they want the lowest. They are telling us based upon some National Report that we MUST report our area as declining! Well here in Georgia there are some area that are NOT declining but STABLE. I personally do not let lenders dictate to me and I know for a fact I have lost business over this...but I digress...
Bottom line is they are still not letting us do our jobs! We have no vested interest in these properties, if they had let us do our jobs from the start, we would not be looking at a Trillion Dollar plus spending bill. Can you tell I am just a little frustrated. I AM!
So as a consumer what can you take aways from all of this. Keep up with what is going on in your neighborhood and do not let lenders determine the value of your home. You get a copy of your appraisal report, review it carefully. If you do not agree with it, protest it! Many banks use review appraisers who either have not even seen your home or who have only driven by your home to refute the original appraisal report. Don't let that happen to you because these review appraisers do not know the home like the first appraiser!
As Realtors, you can do the same thing. You have access to the same information we as appraisers do and even more than we do as you guys see many of the INTERIORS of the comparable properties used by appraisers which we do not see. Sure we have photos of the interiors if you post them on MLS/FMLS but the pictures do not always tell the whole story! So help your clients in this lending process by not letting them reduce or change the value of the first appraisal report without good reason.
Okay I am off my soapbox now, I hope this has helped you to understand how appraisers operate in this market or at any time.
There is a silver lining to all of this Bailout Business (thank goodness!) and it applies all First Time Homebuyers! In the recent stimulus package, Congress, and President Obama wrote in a $8000 Tax Credit for First Time Homebuyer's who purchase a home between January 1, 2009 and December 1, 2009 (that's right, the actual law says DECEMBER ONE, so you need to close by November 30, 2009!)
The actual Credit is $8,000 or 10% of the purchase price, whichever is less. It is a CREDIT. This is much different than a Tax Deduction. If your total tax liability came to $6,000, but you had $7,000 withheld from your payroll, you would normally receive a $1,000 refund. With this credit, your refund would total $8,000!! Now that's a DEAL!
The definition of being a "first time home buyer" means that you have not owned a home in the past 3 years. You have to stay in the home for at least 3 years, or you have to pay this money back! This is an important difference from the $7500 credit offered by Congress last year. The $7500 credit had to be paid back over 15 years with no interest - the 2009 version, does not. It does state, however, that you must live in the property for 3 years.
Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)
You can apply for this credit using ANY mortgage loan program! If you are a Veteran, use your 100% VA benefits! You can purchase using FHA, maybe you would like to purchase a foreclosed property and "fix it up" with a FHA 203K loan... or maybe you want to live in a more rural area of NC? Then get a USDA 100% home loan!
The point is this - The Government is G-I-V-I-N-G you $8000! Don't waste this once in a lifetime opportunity to buy a home at ALL TIME LOW PRICES, get a loan with REALLY LOW interest rates and a $8000 gift back from the Government! The alignment of all of this is like Halley's Comet! Wow!
If you are considering a purchase in NC, please call Steve and Eleanor Thorne, Meridian Residential in Cary, NC 919-459-1313
FHA offers a great mortgage program for folks who want to make improvements to their home (through a refinance) or those who are purchasing a home that needs some "TLC!" The program's official name is 203k.
If you are not familiar with the loan, you can find basic program details, like how the FHA 203K loan works, by clicking here. If you want to know what Improvements are Eligablie (and not Eligable) with the FHA 203K mortgage program, please click here! This program works GREAT for folks purchasing foreclosed property!
BASIC INFO ABOUT FINDING AND HIRING
A CONTRACTOR TO DO WORK UNDER THE FHA 203K HOME LOAN PROGRAM:
All repairs/work must be completed within 3 months of the closing date.
Repairs must be completed by a contractor unless the borrower can demonstrate the required expertise/experience (ie: plumbing repairs would require a licensed plumber, electric work would require a licensed electrician).
The contractor making the repairs does not have to be a licensed general contractor; however, he must provide a resume along with two letters of references
"Cost Plus" or "Time and Material" contracts are prohibited.
Use of Contractors:
Contractors provide estimates for the work to be done. The buyer / owner and the Contractor must both sign and date this form.
Contractors provide a resume and two letters of references - these can not be emails. You need actual letters from actual people regarding the folks who are doing the work. They can say, "I had Joe's Roofing Company replace my roof last spring and thought they did a great job, showed up on time, and were very reasonably priced. I would recommend them for your roofing needs." They need to be signed, dated and have a telephone number on them.
The Underwriter will review the contractor's credentials verifying jurisdictional requirements for licensing, bonding & insurance are met (we will need a copy of all these docs). MEANING... you need to work with a "REAL" company. We are going to be looking at the NC Sec. of State site to verify that this is a COMPANY.
Each contractor must sign a homeowner/contractor agreement. (Different from the estimate provided by the contractor - this is a FHA form we will give you) The cost estimate(s) provided must clearly state the nature and type of repair and cost for completion of the work item. You can not have an agreement that says, "general miscellanious carpentry work $20,000." I need SPECIFIC details of what is going to be done.
If you do not provide a detailed estimate of work, the underwriter may require additional cost estimates from the borrower. We recommend you get estimates from 3 people and keep those estimates in your folder in case the underwriter asks for them!
"Cost Plus" or "Time and Material" contracts are prohibited.
Self Help (borrowers completing work):
The borrower is required to have the necessary expertise and experience to complete the work in a satisfactory manner (ie: borrower is a licensed plumber and will complete that portion of the work).
The cost of labor is included in the repair/rehabilitation cost (in case the borrower is unable to complete the work and a contractor must be hired).
The borrower may not be compensated for his/her labor. No sweat equity.
The borrower must provide written estimates of the repair/rehabilitation costs as well as written estimates from the suppliers of the materials that the borrower will purchase
The borrower must sign and complete the self help agreement that we provide them.
"Cost Plus" or "Time and Material" contracts are prohibited.
Once we have all of this paperwork, the signed Estimate, the signed Contractor Agreement, the Letters of Reference - then we will submit the information to the appraiser. It is important to know that once we submit your loan for approval - you can NOT change which contractor you use! Get the price settled, get the best deal you can - but don't try and change the contractor after the loan has been submitted for approval! Because getting all of this paperwork takes some time - we suggest that you expect at least a 45 day closing!
FHA 203K loans are for owner occupied properties, and the maximum loan is calculated based upon the limits in your county! Click Here to find the maximum loan limit in your county!
Did you know that if you are a FIRST TIME HOMEBUYER you might qualify for an $8,000 TAX CREDIT! To find out more about this great program, click here!
If you have questions about purchasing a home in NC, or refinancing so that you can use the FHA 203k mortgage loan program, please call Steve and Eleanor Thorne, Meridian Residential, in Cary, NC 919-459-1313.
FHA increased the loan limits in 2008, and then lowered them January 1, 2009 and THEN raised them back UP on February 24, 2009! WOW!
So, if you are considering a purchase in NC, you might want to check out the NEW FHA Loan Limit for the County you are interested in!
Wake County/ Johnston County Limit $295,000
Durham County/Orange County Limit $334,650
New Hanover County/ Brunswick County / Pender County $303,750
Onslow County $306,250
Guilford County /Forsyth County $271,050
Mecklenburg County/Union County/ Cabarrus County $303,750
Iredell County $271,050
Buncombe County $303,750
FHA loans do not have a limit on the amount of income your family earns (like USDA does) and they allow you to receive a gift for your downpayment! FHA Guidelines is a bit more forgiving when it comes to credit, and you can purchase a home with a foreclosure or bankruptcy in your credit history!
If you are interested in purchasing property in a NC county I didn't list - please click here to check the new limit in your area! Don't forget, you might qualify for an $8,000 check from the new stimulus plan if you purchase property this year! Please read this for more details on how to qualify for the Government's Tax Credit!!
Have questions about purchasing a home in NC using FHA financing? Give us a call! Steve and Eleanor Thorne, Meridian Residential, 919-459-1313.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
USDA Home Loans have "special" qualifying guidelines that prohibit folks from purchasing if you make "too much" money! 
And what about not getting an inspection done because it's a newly constructed home? Bad idea again and I'll give you a real life situation! During an inspection with one of my clients (who bought a wonderful custom built home in Holly Springs) their inspector 
About the author: Pamela is with The St. Peter HomeSelling Team at Prudential YSU Realty in the Triangle. 
With all the "Hoop Madness" going on - you might think of BASKETBALL!! And we love our basketball here in NC!! 
proceedures - and just with that base of employment alone - we are almost recession proof... In addition to that, my house is about 15 minutes away from the Research Triangle Park. 
There is a silver lining to all of this Bailout Business (thank goodness!) and it applies all First Time Homebuyers! In the recent stimulus package, Congress, and President Obama wrote in a $8000 Tax Credit for First Time Homebuyer's who purchase a home between January 1, 2009 and December 1, 2009 (that's right, the actual law says DECEMBER ONE, so you need to close by November 30, 2009!)
So, if you are considering a purchase in NC, you might want to check out the NEW FHA Loan Limit for the County you are interested in!
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