Government Home Loan Pre-approval–How To

So what does it take to get pre approved for a USDA Rural housing loan in 2013?  It’s actually still pretty easy considering all the changes that have happened in the mortgage market over the past 5 years. Mortgages in 2013 are “back to basics” in most cases.  Long gone are the days of qualifying for a loan with no income, poor credit, etc.   Homebuyers today that have decent credit, stable documentable income and manageable debt usually have no issue getting pre qualified for a mortgage today.

All of the Government home loans ( FHA, VA and USDA) pretty much require the same things in order to get pre approved.  Below we have outlined some key points.

Credit – in most cases a 640 credit score is needed to be pre approved for any of the government home loan today – FHA, VA, USDA. But keep in mind that a 640 credit score does NOT guarantee loan approval as all lenders / banks have additional waiting requirements (overlays) in regards to home buyers with any past bankruptcy, foreclosure, or short sale.  Additional for USDA Rural loans, a clean 12 month payment history on all other credit trade lines is important.

Income – It has to be stable and documentable in 2013.  The days of stated income or no doc loans are long gone.  Documenting income properly can sometimes pose an issue with self employed or 1099 workers, especially those that have not been self employed for at least two years.  Banks and lenders generally want to see a 2 year employment history.  Small gaps in employment history are just fine, just as long the gap isn’t too long, or unexplainable.  Recent college grads are generally exempt from the 2 year employment rule.

100% USDA Loans –  these loans are available to any homebuyer looking to purchase a home in a rural defined locations. Click here for the USDA eligibility map.  USDA also have income limits based on the number of members in the household, county, etc.  Please click here for more information on FL USDA income limits. USDA, along with VA, are the only mortgages in Florida that offer 100% financing with NO down payment. All USDA FAQ’s are listed by clicking here.

FHA Loans –  these loans are available across Florida to any homebuyer that qualifies. FHA mortgages require a min 3.5% down payment, there are no income limits restrictions or property location restrictions.  Click here to learn all about FHA loan requirements in Florida.

VA Loans – available to all eligible past and present military personal.  Please click here to learn more about VA loans in Florida.

Homeowners that currently have a USDA, FHA or VA loan should also look into the verity of streamline refinance options available today. These programs allow homeowners to refinance REGARDLESS of the loan to value. If you currently have a USDA Mortgage, click here to learn about the Pilot program.  For FHA loans please click here,  VA loans can click here.  Interest rates are currently at all time low levels!

Please contact us at 904-302-6060 with questions, or visit www.UsdaMortgageSource.com for more information.

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Property Values are Expected to Continue to Rise

The S&P/Case-Shiller index of property values in 20 cities increased 4.3 percent from October 2011, the biggest 12-month advance since May 2010, the group said today in New York. The median forecast of 30 economists in a Bloomberg survey projected a 4 percent gain.

Property values will probably keep heading higher as record-low mortgage rates, a growing population and an improving economy spur demand for housing. The turnaround in real estate is buoying household confidence and wealth, one reason why consumer spending is improving even as concern mounts that lawmakers will fail to stave off looming tax increases.

“The housing market is definitely starting to recover,” said Ryan Wang, an economist with HSBC Securities USA Inc. in New York, who’s the second-best forecaster of the S&P/Case- Shiller index over the past two years, according to data compiled by Bloomberg. Higher property values have “added about a trillion dollars to household wealth just since the beginning of this year.”

Undervalued Appraisals Creating Problems

The real estate market is recovering but still faces hurdles from tight
mortgage credit, but problems with a sizeable share of real estate appraisals
also are holding back home sales.

Most appraisers are competent and provide good valuations that are compliant
with the Uniform Standards of Professional Appraisal Practice. However,
appraisals generally lag market conditions and some changes to the appraisal
process have been causing problems in recent years, including the use of
out-of-area valuators without local expertise.

I recently have had two transactions fall apart because of undervalued appraisals.

For more real estate news and information in the Destin-Niceville-30A area, go to www.DestinHomeRealty.com or contact me at 850-305-6256.

 

Mortgage Forgiveness Debt Relief Act Future?

NEW YORK (CNNMoney) — The clock is ticking on a taxbreak that saves struggling homeowners from paying thousands of dollars to the IRS.

If the Mortgage Forgiveness Debt Relief Act of 2007 does not get extended by Congress by the end of the year, homeowners will have to start paying income taxes on the portion of their mortgage that is forgiven in a foreclosure, short sale or principal reduction.

So if you owe $150,000 on your home and it sells for $100,000 in a foreclosure auction, the IRS could tax you on the remaining $50,000. For someone in the 25% tax bracket, that would mean paying $12,500 in taxes on the foreclosure.  Similar taxes would apply for forgiven amounts in short sales and principal reductions.

“People trying to do short sales are freaked out about it,” said Elizabeth Weintraub, a real estate agent in Sacramento, Calif. “They’re telling me they’ll do whatever it takes to close by the end of the year.”

Should the tax break expire, a large number of mortgage borrowers could be affected. More than 50,000 homeowners go through foreclosure each month.Meanwhile, the number of short saleshas tripled over the past three years to a rate of about half a million a year.And, under the terms of the $25 billion foreclosure abuse settlement, roughly one million borrowers may have their mortgage debt lowered through principal reductions over the next couple of years.

“If there ever was a no-brainer in housing policy, this would be it,” said Jaret Seiberg, a policy analyst for Guggenheim Securities.

Yet, Seiberg is skeptical the exemption will get extended. Now that the election is over, he thinks Congress will be heading into a “lame duck” session, with very little legislation moving forward through the end of the year.

In addition, the cost of the exemption could make it a point of contention, he said. The office of Sen. Max Baucus, who heads the finance committee, estimated the cost of a one-year extension at $1.3 billion.

Others disagree. Tom Kolpien, the press secretary forRep. Tom Reed of New York, said Congress will likely act before the end of the year. (Reed is currently pushing for the extension on the House Ways and Means Committee).

“Both parties, both houses of Congress agree it’s good policy and it needs to get done,” said Jamie Gregory, chief lobbyist for the National Association of Realtors, which supports an extension. “The hold up is the process. I’m confident it will get done. I just don’t know how.”

Even if Congress allowed the exemption to expire, not all borrowers withforgiven mortgage debt will take a tax hit. If the debt is discharged in a bankruptcy, no tax is due. And anyone who is insolvent — meaning they have more debt than assets — at the time the debt was forgiven — would not have to pay the tax.

Real Estate Prices on the Rise

For local information about the Destin, Santa Rosa Beach, Niceville, and Crestview areas, contact me at MykeSaysSold@aol.com  850-305-6256

Reasons To Buy a NEW Home–Santa Rosa Beach Area

Top 5 Reasons to buy a new home

I have been helping customers negotiate some great deals on new homes here in the Florida Panhandle.

I wanted to share the top 5 reasons to buy a new home compared to a re sale.

You have to look at the total savings or as I like to call it the total cost of
ownership.

New Homes usually come with special incentives that are not always advertised “Free Stuff
New Homes will have a lower cost to insure when compared to a re sale
New Homes must meet a very high level of energy efficiency
New homes can be bought with very attractive financing offers
New Homes have a lower cost of annual maintenance

When you stack up all the savings purchasing a New Home is something you want to take a closer look at.

Although a new home may have an initial higher purchase price the overall monthly cost of ownership can be much lower than a home only ten years old.

New home builders are always contacting realtors about specials that are about to become available before they are made available to the general public.

DR Horton has 13 new communities here in the Florida Panhandle–great homes at a great price!  Contact me today to take advantage of these deals.

October Statistics–Positive Employment, Low Interest!

Mortgage rates are performing surprisingly well after Friday’s release of the October 2012 Non-Farm Payrolls report. The Bureau of Labor Statistics’ monthly report beat Wall Street expectations, while also showing a giant revision to the previously-released job tallies of August and September.

171,000 net new jobs were created last month against calls for 125,000 and revisions for the two months prior totalled 84,000.

October also marked the 25th consecutive month of U.S. job growth — a period during which 3.8 million jobs have been reclaimed. This sum represents more than half of the 7.3 million jobs lost between 2008-2009.

Nationally, the Unemployment Rate rose by one-tenth of one percent last month to 7.9%. It may seem counter-intuitive to see unemployment rates rise even as job growth soars. However, it’s a sign of economic strength.

October’s rising Unemployment Rate is the result of more workers entering the U.S. workforce and actively looking for jobs, a manifestation of rising consumer confidence levels and optimism for the future.

Typically, mortgage rates in FL would worsen on a strong jobs report like this. This month, however, rates are improving. This is mostly the result of Hurricane Sandy, which is expected to create a drag on the U.S. economy with its $50 billion damage tag.

The storm has Wall Street looking past the strong jobs report, positioning itself for the next few months. Investors are moving into less risky assets until the uncertainty surrounding the storm’s effects subside. Mortgage-backed bonds are considered “safe” and are benefiting from this safe haven buying pattern.

For home owners and buyers in Parkland and nationwide, the shift is yielding an opportunity to lock mortgage rates at artifically-low levels. 30-year fixed rate mortgages remain well below 3.50% for borrowers willing to pay discount points, and home affordability is approaching an all-time high.

Home values are expected to rise through 2013 so consider this week’s low rates a gift. If you’re in a position to go to contract and/or lock a mortgage rate, you may want to take that step today.

New Short Sale Guidelines In Effect November 1

Starting today, Nov. 1, 2012, new short sale guidelines spearheaded by the
Federal Housing Finance Agency (FHFA) go into effect. The new rules impact all
mortgages under the federally controlled Fannie Mae and Freddie Mac.

One part of the change allows a handful of the nation’s larger mortgage servicers to
approve a short sale without needing Fannie or Freddie to sign off on it.
Servicers include in the agreement are:

CMG Mortgage Insurance
Company
• Essent Guaranty Inc.
• Genworth Mortgage Insurance
Corporation
• Mortgage Guaranty Insurance Corporation
• PMI Mortgage
Insurance Company
• Radian Guaranty, Inc., Republic Mortgage Insurance
Company

“We applaud the nation’s mortgage insurers for committing to work
with us and our servicers to help more borrowers obtain short sales and other
foreclosure alternatives,” says Tracy Mooney, senior vice president, servicing
and REO at Freddie Mac. “By paving the way for more borrowers to avoid
foreclosure, today’s announcement will support the housing recovery and help
reduce taxpayer losses.”

In addition to quicker short sale approval,
other changes become effective today. They including new guidelines for
homeowners hit by a financial hardship, moved by the military or held back by a
home’s second mortgage:

• Borrowers facing an approved hardship don’t
have to be delinquent.

• Service members with Permanent Change of Station
orders have greater flexibility, including the elimination of back-end
debt-to-income ratios or a cash contribution promissory note.

• Fannie
Mae and Freddie Mac won’t pursue deficiency judgments in certain cases under new
rules. Servicers will evaluate borrowers as part of the short sale approval
process.

• FHFA gave servicers more consistent guidelines to process and
execute short sales, and consolidate existing short sales programs into a single
uniform program.

• Fannie Mae and Freddie Mac will offer up to $6,000 to
second lien holders to expedite a short sale.

Homebuying after Default or Short Sale

According to a report from the Federal Reserve Bank of San Francisco, a mere 10 percent of borrowers with a history showing a serious delinquency were able to obtain a mortgage again within 10 years.

In addition, subprime borrowers, or those with credit scores lower than 650, have an even more difficult time returning to the market.

For borrowers who end their mortgage for a reason other than default, they were able to access mortgage credit about two-and-a-half times faster compared to those who went into default.

The report was based on analysis using Equifax data in the New York Federal Reserve Bank’s consumer loan file. Mortgages were counted as being in default if they were either 120 days past due or past due and reported to have a charge-off or foreclosure

Real Estate Investors Have Positive Effect!

The Washington Post

By Justin Pierce

Despite some shifts in the housing market that make it more difficult to earn money investing in residential real estate, a large majority of people in that field plan to buy as many or more properties in the next 12 months to rent out or sell for profit. That’s one of the findings of a study released last month that attempted to measure the impact people involved in income or speculative real estate are having on the housing market . The survey — sponsored by BiggerPockets.com, the nation’s leading social Web site for real estate investors, and Memphis Invest, one of the largest providers of single-family rentals — shows that 65 percent of investors plan to buy a lot more homes during the next 12 months. Still, from my experience in the Washington area, business conditions are changing with rising home prices, stiffening competition and shrinking margins. Anyone seeking to get into real estate investing should proceed with caution and not expect to earn the same money that has been made in the past few years. The report points out that investors played a fairly substantial role in the housing recovery. The housing crisis pushed nearly 4 million foreclosures onto the open market, devastating home values. This and the coinciding financial crisis squashed homebuyers’ confidence and their ability to buy. At that time, real estate investors began buying up the foreclosures when few other people could enter the market. They bought up so many properties that they established single-family rentals as a $100 billion business. In fact, the report says that single-family rentals now outnumber apartment units. They are also renovating the homes they buy and spending an average of $7,500 per home. That totals more than $9.2 billion every year in construction-related spending, according to the report. This is critical business for an industry that was hit hard by the recession