First Time Home Buyers - USE IT OR LOSE IT!

Are you leaving money on the table?

 
If you are thinking about buying a new home and you have NOT started actively searching, and you qualify for the $8,000 first time home buyer tax credit, or the $6,500 long term resident tax credit then you might be leaving money on the table.

Please don't wait for the government to extend the program. It is highly unlikely that the tax credit will be extended. So why not use it, rather than lose it?

Pay attention to the deadline.... it is rapidly approaching. You must be under contract with a signed purchase and sales agreement on or before April 30, 2010, and close on or before June 30, 2010.

Created by OnePlusYou

Hopefully you have established a relationship with a qualified buyer's agent. You and your agent have had an opportunity to discuss your price range, wants and needs, and have matched up suitable properties in accordance with the current real estate market conditions in your area.

In my area, the average first time home buyer properties can range in price from $175,000 to $350,000. It doesn't take long to realize that the lowest priced homes generally fall into one of the "needs rehab"..."fixer-upper"...."handy man special"... "needs TLC"...or "tear down" categories. That pictures on-line do not always tell the true story and seeing is believing. You may need to make repairs and need to be aware of the potential costs, and whether or not it impacts your ability to qualify for a mortgage.

You have discussed the possibility reality that other buyers will be competing against you for the better priced homes that are in good condition. You have discussed the potential risks of short sale and bank owned properties and how these may or may not be options if you want to meet the tax credit deadline.

Did you know there is a timeline for purchasing a home? It is very difficult to say exactly what the timeline will be for your specific situation, but we will presume for the sake of urgency (tax credit deadline - 04/30/10) that you are qualified (met with a lender and have a pre-approval letter) and are ready to purchase within 0-3 months.

For many, finding the right home can be the longest part of the home buying process. It is rare that you will buy the first home you tour. At a minimum you will probably need a month or two to search for and tour homes. When you do find the "right one" it is most likely going to take a minimum of 30 days from offer to closing.

You understand the concept of supply and demand. As the tax credit deadline draws closer to an end with each passing day, the supply of first time homebuyer properties will be in greater demand and the supply will diminish. 

First time home buyers - USE IT OR LOST IT !

Imagine what you could do with $8,000 or $6,500!

---

Call on Judy Jennings for all your real estate needs. I proudly serve Plymouth county, Barnstable county and part of Bristol county in Massachusetts.

Call me: 508-947-2295, ext. 210
Email: Judy Jennings
Visit my website: FocusedonRealEstate.com

Sign up now to receive automatic listings:

 

PERMANENT Loan Modification Received in 30 Days!

Default| Foreclosure Prevention for Jackson County Homeowners in Southern Oregon

Default|Foreclosure Intervention for Josephine County, too!

Rogue Valley Homeowners! Next Default| Foreclosure Prevention Meeting February 15, 2010 at Olsrud Nutrition Center behind Costco

CHANGES AT FHA

I wanted to take a moment to make sure you are familiar with events surrounding a sweeping set of policy changes for FHA announced earlier this week. The announcement details the changes that Secretary Donovan promised to deliver by the end of January when he testified before Congress last month.

 

The new policies are designed to strengthen the FHA's capital reserves so we can continue to fulfill our mission of serving underserved communities.  In addition, we were determined that these changes should support, not disrupt, the nation's housing market recovery.  Bringing these changes to market has been the result of a lot of hard work and long hours.  And, I am proud to have worked with so many of you on this initiative.

 

What changes will be implemented?  We announced the following on January 20:

1. Increase the up-front mortgage insurance premium (MIP) to 2.25%;
2. Update credit score and down payment requirements for new borrowers;
3. Reduce seller concessions to three percent, from six percent; and
4. Implement a series of significant measures aimed at increasing lender enforcement. 

 

When combined with the risk management measures announced in September of last year, these new changes are among the most significant steps ever taken by FHA to address risk.  Additionally, by continuing to provide affordable, responsible mortgage products, FHA will support the housing market's recovery.  Importantly, FHA will remain the largest source of home purchase financing for underserved communities.

 

Let's go into more detail:

 

Announced FHA Policy Changes:

 

1.      Increase the MIP to build up capital reserves and bring back private lending.

o    The first step will be to raise the up-front MIP by 50 basis points to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.

o    If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.

o    This shift will allow for the capital reserves to increase with less impact on the consumer because the annual MIP is paid over the life of the loan instead of at the time of closing.

o    The initial up-front increase is included in Mortgagee Letter 2010-02 and will go into effect in the spring.

 

2.      Update the combination of credit scores and down payments for new borrowers.

o    New borrowers will now be required to have a minimum credit score of 580 to qualify for FHA's 3.5% down payment program.  New borrowers with less than a 580 credit score will be required to put down at least 10%.

o     This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.

o    This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.

 

3.      Reduce allowable seller concessions from 6% to 3%.

o   The current level exposes the FHA to excess risk by creating incentives to inflate appraised value.  This change will bring FHA into conformity with industry standards on seller concessions.

o   The change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.

 

4.      Increase FHA lender enforcement.

o    Publicly report lender performance rankings to complement currently available Neighborhood Watch data which will be accessible via www.hud.gov on February 1.

§  This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.

o    Enhance monitoring of lender performance and compliance with FHA guidelines and standards. 

§  Implement Credit Watch termination through lender underwriting ID in addition to originating ID.

§  This change is included in Mortgagee Letter 2010-03 and is effective immediately.

o    Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process.

§  Specifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer.

o    HUD is pursuing legislative authority to increase enforcement on FHA lenders.  Specific authority includes:

§  Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders.  This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite.

§  Legislative authority permitting HUD maximum flexibility to establish separate "areas" for purposes of review and termination under the Credit Watch initiative. 

 

Note:  This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches.

 

In addition to the changes I have outlined, we are continuing to review FHA's overall response to housing market conditions, to evaluate its mortgage insurance underwriting standards, and to improve its measures to help distressed and underwater borrowers through FHA/HAMP and other FHA initiatives going forward.

 

I know this is a lot of information to absorb.  Listed below are links to some of the major stories about the announcement.  I promise to keep you aware as we implement these changes going forward.

 

Wall Street Journal (Nick Timiraos, 1/20) "FHA Sets Tighter Lending Requirements" The Federal Housing Administration is implementing more-stringent lending requirements and higher borrower fees to cushion against rising defaults and stave off the need for a taxpayer bailout of the agency. LINK

  

Washington Post (Dina ElBoghady, 1/20) "FHA plans to require borrowers to produce more cash for downpayments" The Federal Housing Administration plans to increase the amount of up-front cash paid by all new borrowers and to require higher down payments from those with the poorest credit, according to agency officials. LINK

  

Chicago Tribune (Mary Ellen Podmolick, 1/20) "FHA homeownership rules to change" The Federal Housing Administration announced changes Wednesday that will make it more expensive for homebuyers to secure agency-backed mortgages while some consumers will be priced out of the housing market. LINK

  

CNNMoney.com (Tami Luhby, 1/20) "FHA loan requirements will make it harder to get a mortgage" It's going to be harder to get a government-backed mortgage from now on. LINK

CNBC.com (Diana Olick, 1/20) "FHA Boosts Insurance Premiums to Cushion Defaults" In a move to shore up the FHA's beleaguered balance sheet, Commissioner David Stevens on Wednesday announced big changes at the government mortgage insurer that now backs about half of all home loans to the nation's minorities. LINK

 

I want to thank you for your efforts to keep this housing system on track. The role of the Real Estate Agent, Mortgage Lender, Settlement Service Provider, and all who make the dream of homeownership a reality, is critical to stabilizing this economy.  Your work is for a good cause.  We really are making a difference in people's lives.  Thanks for the partnership!

Is Applying For A Loan Modification A Big Fat Waste of Your Time? For Some It Is

Southern Oregon Homeowners Receive Home Affordable Modification Program IN TEN DAYS!!!!

Where Have You Been, Karen Cooper| Mortgage Consultant| Ashland Medford Oregon?

Have You Been To Tin-Tin Buffet in Medford Oregon?