New RESPA rules take effect January 1st

RESPA (Real Estate Settlement Procedures Act) is a consumer protection statute that is designed to aid homebuyers during the home buying process and help them become better shoppers while protecting them at the same time. It outlaws things like “kickbacks” that would increase the overall cost in buying a home.

The revamped act will take effect Jan 1st, 2010 and is supposed to make it easier for home buyers to understand what is going on at closing. In my opinion more regulation and paperwork is not going to fix the already overcomplicated process. What is needed is for the Professionals that are involved in the transaction to take their time and make sure the consumer has a clear understanding of the process.

To read more about HUD and RESPA click here.

If you are in the market for a home and would like to experience the protection and advise that an Exclusive Buyer Agent provides please email me at cwhitehead@hbexperts.com or you can call us at 330-315-2552.

Many Real Estate Closing Costs ARE negotiable. A proper bid program can save thousands of dollars in both the long and short run.

The role of the HBE Mortgage Advisor is:

1. Has a second informational meeting to discuss your OTHER purchase. (We at HBE feel that your mortgage loan is also a purchase, and a very important one at that)

2. Review your financial situation.

3. Help you determine your ability to achieve financing.

4. Helps make clear the tax effects of your home purchase.

5. Determines the affordable home cost.

6. Helps identify your ideal home features.

7. Bids out your mortgage to different lenders.

8. Assists in lender selection.

9. Helps you get pre-qualified.

10. Helps with final mortgage lock.

11. Available to help understand final HUD statement.

12. Annual review of financing options.

HomeBuyer Experts does not own a mortgage company we have built relationships with some of Northeast Ohio's best lenders and use a bidding process to make sure that our clients (The Real Estate Buyer) get a mortgage that fits them not one that fits the company.

Home Buyer Experts (HBE) is a buyers only agency with 100% of it's team working for the Real Estate Buyer.

If you are buying a home in the next 6 months and want to learn more about the process from an Exclusive Buyer Agent (EBA). Call HomeBuyer Experts at 330-328-3170 or you can email us.

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Don’t wait, buy now!

I know it sounds like a pushy salesman trick taught on every car lot in the country…”It might not be here tomorrow!” But when it comes time to making a home purchase, there is never a better time than right now!

Let’s preface that with a couple of things.

1. You must get your credit in line

2. You must have income

3. You must be able to get qualified for a loan

I guess what I am trying to say is that if it is your time to buy then you need to be ready to buy.

What I am talking about in this post is the mentality of “I’m waiting for the bottom of the market to buy” or “I haven’t found the right house” or “I’m scared!”

All of these stall tactics or procrastination can end up costing you more than you realize.

Here are just a few of the areas where you could lose; interest rates could rise, area home prices could rise, you will miss out on the tax deduction and the right home for you could be purchased by someone else.

Lets look at real numbers. If rates increased by ½ of a percent on a $300,000 loan, your payment will go up $100 per month. That’s $36,000 over the life of the loan. That hundred sure could buy a nice dinner every month for you.  I'm still looking for the millionaire that doesn’t own some real estate!

Home Buyer Experts (HBE) is a buyers only agency with 100% of it's team working for the Real Estate Buyer.

If you are buying a home in the next 6 months and want to learn more about the process from an Exclusive Buyer Agent (EBA). Call HomeBuyer Experts at 330-328-3170 or you can email us.

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Be aware of the costs associated with purchasing a home!

Think it's bad to pay tax when you eat out? Wait until you're paying closing costs, which
can run 2 to 7 percent of the home's purchase price.

A mortgage lender should provide you with a good faith estimate of what costs will be. Keep in mind that it should include such things as origination (points) on a loan, escrow fees, title and homeowners insurance, legal costs, property taxes, fees to record your deed and notary fees.

Too many people come out from closing in shock, and they don't have too.

Home Buyer Experts (HBE) is a buyers only agency with 100% of it's team working for the Real Estate Buyer.

If you are buying a home in the next 6 months and want to learn more about the process from an Exclusive Buyer Agent (EBA). Call HomeBuyer Experts at 330-328-3170 or you can email us.

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The following was taken from an email received directly from OHFA.

OHIO FIRST-TIME HOMEBUYER PROGRAM
Effective 03/02/2009 @ 12:01am
 
Mortgage Rates
            5.625% for loans without 2.5% assistance grant
          6.125% for loans with 2.5% assistance grant
            5.375% for Ohio Heroes without 2.5% assistance grant
            5.875% for Ohio Heroes with 2.5% assistance grant
            30-year fixed rate FHA/VA/USDA-RD/conventional loans are eligible
2-1 buy downs are permitted, please see the Underwriting Guidelines for 
specific product
 
Fees
            1% origination fee
          $150 transfer fee to Servicer (US Bank fee)
          $79 tax service fee (US Bank fee) (not to exceed $90)
          .25% Adverse market fee (conventional loans only)
 
Qualified Borrowers
Non-target areas: First-time buyer (persons not owning and occupying their principal residence in past three years)
          Target areas: Anyone may purchase, but must reside in the property
          Everyone must meet certain household income limits
 
Acreage Limitation
Up to two acres inside a municipal corporation
Up to five acres outside a municipal corporation
(Unless additional acreage is required by local health or safety code)
 
Qualified Properties
Existing house: one-unit single-family dwelling and duplex up to four units, please see the Underwriting Guidelines for specific product
          Spec/Nearly completed house: one-unit single-family dwelling
Modular/Manufactured house: one-unit single-family dwelling, please see the Underwriting Guidelines for specific product
          Properties must meet certain sales price limits
 
Critical Dates
March 2, 2009 to September 2, 2009- Origination period: Loans must close during this period.     
September 16, 2009- Deliver mortgage file to master servicer by this date.
 
Note: The recapture tax provision applies to all loans in this program. View this IRS link for an explanation on recapture of federal subsidy.

Home Buyer Experts (HBE) is a buyers only agency with 100% of it's team working for the Real Estate Buyer.

If you are buying a home in the next 6 months and want to learn more about the process from an Exclusive Buyer Agent (EBA). Call HomeBuyer Experts at 330-328-3170 or you can email us.

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We are in historic low times for interest rates. There have been few if any markets that were this attractive to buyers in terms of both selection and housing prices.

Warren Buffett says “the rear view mirror is always clearer than the windshield.”.

And if you are a first time buyer add together great selection, low interest rates, lower housing prices, and the new $8,000 tax credit available for homes purchased after Jan 1st, 2009 and before Dec 1st, 2009 it all adds up to a great time to get off the sidelines and see if its your time to buy!

If you are buying a home in the next 6 months and want to learn more about the process from an Exclusive Buyer Agent. Call HomeBuyer Experts at 330-328-3170 or you can email us.

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 Don’t spend money on any “Big Purchases,” (over a couple of hundred dollars), while you are trying to buy a home!!

   This is a big no-no!

The reason for this is that if you are getting a loan, at the last minute before the lender funds your loan they may pull your credit again and if your credit score has changed because you have more debt or the ratios that you originally qualified under are different, you could lose the house!

So don’t buy furniture, appliances, cars, Harley’s, clothes or anything of the sort! Even if you are paying cash because your approval may be based on "reserve" money that you have in the bank.

Wait until your loan has funded, the property is closed and you have the keys and then go shopping!  

Also, don’t change jobs while going from approval to closing. This will cause the approval process to be redone and will cost time and, perhaps, money.

If you are buying a home in the next 6 months and want to learn more about the process from an Exclusive Buyer Agent. Call HomeBuyer Experts at 330-328-3170 or you can email us.

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When the Real Estate Settlement and Procedures Act went into effect in 1974 cosumers got a simplified process as well as a protection from abusive lending practices. The purpose that RESPA has according to HUD's web site is

1. to help consumers become better shoppers for settlement services by requiring that borrowers receive disclosures at various times. Some disclosures spell out the costs associated with the settlement, outline lender servicing and escrow account practices and describe business relationships between settlement service providers.

2. to eliminate kickbacks and referral fees that unnecessarily increase the costs of certain settlement services by prohibiting certain practices. Section 8 of RESPA prohibits a person from giving or accepting any thing of value for referrals of settlement service business related to a federally related mortgage loan. It also prohibits a person from giving or accepting any part of a charge for services that are not performed. Section 9 of RESPA prohibits home sellers from requiring home buyers to purchase title insurance from a particular company.

When a buyer applys for a loan the LO (Loan Officer) must give the potential client 3 things.

• a Special Information Booklet, which contains consumer information regarding various real estate settlement services. (Required for purchase transactions only
• a Good Faith Estimate (GFE) of settlement costs, which lists the charges the buyer is likely to pay at settlement. This is only an estimate and the actual charges may differ. If a lender requires the borrower to use a particular settlement provider, then the lender must disclose this requirement on the GFE.

• a Mortgage Servicing Disclosure Statement, which discloses to the borrower whether the lender intends to service the loan or transfer it to another lender. It also provides information about complaint resolution.

It is the requirements for disclosing settlement costs that HUD proposed changes to in March of 2008. The proposed rule change came because some in the industry as well as many consumers felt that RESPA as a whole needed updated. HUD received over 12,000 public comments regarding the proposed rule. Part of the original rule called for a closing script that was estimated to take 45 minutes to read. two thirds of the members of Congress requested that HUD withdraw the rule. Instead of withdrawing the rule HUD simply revised it.

On November 12th, 2008 filed its final rule. Below is a fact sheet from HUD's web site that outlines the final rule.

• For the first time ever, HUD will require mortgage lenders and brokers to provide borrowers with an easy-to-read standard Good Faith Estimate (GFE) that will clearly answer the key questions they have when applying for a mortgage including:
  
  
  • What's the term of the loan?
  • Is the interest rate fixed or can it change?
  • Is there a pre-payment penalty should the borrower choose to refinance at a later date?
  • Is there a balloon payment?
  • What are total closing costs?


• HUD estimates that by improving upfront disclosures on the GFE, and limiting the amount estimated charges can change, consumers will save nearly $700 in total closing costs.



• Based on substantial public comment, HUD withdrew a proposed requirement that closing agents read and provide a 'closing script' to borrowers in favor of a new page on the HUD-1 Settlement Statement that allows consumers to easily compare their final closing costs and loan terms with those listed on the GFE.



• HUD's new Good Faith Estimate has been reduced from four to three pages, including an instructional page to help borrowers better understand their loan offer. In addition, the GFE will consolidate closing costs into major categories to prevent junk fees and display total estimated settlement charges prominently on the first page so the consumer can easily compare loan offers. HUD will specify the closing costs that can and cannot change at settlement. If a fee changes, HUD will limit the amount it can change.



• To help borrowers compare their Good Faith Estimate with their HUD-1 Settlement Statement, each designated line on the final HUD-1 will now include a reference to the relevant line from the GFE. Borrowers will now be able to easily compare their estimated and actual costs in the same manner many commenters suggested.



• HUD will require lender payments to mortgage brokers (often called Yield Spread Premiums) to be disclosed in a more meaningful way. These payments are directly dependent on the interest rates that consumers agree to. To ensure that HUD's new requirement will not create a consumer bias against brokers, the Department did rigorous consumer testing and found the new Good Faith Estimate helped consumers to select the lowest cost loan nine-out-of-10 times, regardless of whether the loan was originated by a lender or a broker.



• Loan originators will be required to provide borrowers their Good Faith Estimate three days after the loan originator's receipt of all necessary information. To facilitate shopping, loan originators could not require verification of GFE information (tax returns etc.) until after the applicant makes the decision to proceed.



• HUD will allow lenders and settlement service providers to correct potential violations of RESPA's new disclosure and tolerance requirements. Lenders and settlement service providers will now have 30 days from the date of closing to correct errors or violations and repay consumers any overcharges.



• The new, standardized GFE and revised HUD-1 will not be required until January 1, 2010.

If you are buying a home in the next 6 months and want to learn more about the process from an Exclusive Buyer Agent. Call HomeBuyer Experts at 330-328-3170 or you can email us.

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As the economy struggles to come back into balance, potential first time homeowners sometimes need a little boost to their cash flow. The OHFA down payment assistance grant may be the answer. The grant will raise the interest rate by 1/2 of 1% so homebuyers should consider the length of time they plan on owning this home to determine if this is a good fit or not.

The following is taken directly from OHFA's web site.

In some cases, buyers need additional financial assistance to purchase a home. That is why OHFA is
offering the new Down Payment Assistance Grant that is up to 2.5 percent of the home’s purchase price.
This grant can be used for the down payment, closing costs or a number of prepaid expenses incurred
by the borrower prior to closing. However, homebuyers who use the grant pay a slightly higher rate of .5
percent on their mortgage for this added benefit. Many mortgage programs will require the borrower to
contribute some of their own funds, in addition to the OHFA grant.

To qualify for the Down Payment Assistance Grant through OHFA, the homebuyer must complete required
homebuyer education to prepare for sustainable homeownership.
Homebuyers may complete a course offered by any HUD-approved housing counseling agency, or use the
streamlined OHFA education program by following these simple steps:

1. Go to www.ohiohome.org and review the homebuyer guide found in the Homebuyer Education section.
Lenders may be able to provide you with printed information if the internet is unavailable to you.
2. Complete the 25-question homebuyer education test and the monthly budget form.
3. Fax the test and budget form by following the instructions on the website (or those provided by the
lender) to OHFA. The Agency will forward your information to a housing counseling agency serving your
county.
4. A housing counselor will contact you to arrange a one-hour telephone consultation to review the test,
budget, and to answer any questions you may have about the process.
5. Once the education requirement is met, a certificate of completion will be issued to the lender and
OHFA.  When all other documentation is completed and approved, the loan can close.

If you are a first time homebuyer and are buying a home in the next 6 months and want to learn more about the process from an Exclusive Buyer Agent. Call HomeBuyer Experts at 330-328-3170 or you can email us.

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