Some fortunate buyers, though, are getting up to 50% off the purchase price due to a new incentive called the Good Neighbor Next Door Program, which offers qualified borrowers the opportunity to buy HUD homes in approved neighborhoods for half off.  That’s right, half off.  To make these HUD homes even more affordable, buyers can apply for FHA-insured mortgages that require down payments of only $100.

WHO GETS THE DISCOUNT?

So who exactly qualifies for this excellent (and almost too good to be true) opportunity? HUD tells us:

“Law enforcement officers, pre-Kindergarten through 12th grade teachers and firefighters/emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD’s Good Neighbor Next Door Sales Program.  HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home.”

Why would they do this?  The purpose, is “to strengthen communities by encouraging employed, professional law enforcement officers, teachers and firefighters/emergency medical technicians to live in the community.”

ARE THERE ANY STIPULATIONS?

So what’s the catch?  The main requirement for the discount is a guarantee that you will occupy the home as your primary residence for at least 3 years.  After the 3 years have passed you are free to do whatever you want.  In fact, after you buy the home and live there for the full time period, you can legally sell it. All of the profit and equity from the sale are yours to keep! This means that not only is the program a great way to break into homeownership for people who otherwise couldn’t afford it, but it is also a great way to build up equity and make some money in the process.  Oh, and you can even refinance the mortgage down the road if it happens to be to get a lower rate or even to make repairs.

The other main requirement for the program has to do with the house itself.  Qualifying properties must be located in HUD approved neighborhoods, meaning you can’t just go out and find any house you would like.  Don’t worry though, qualifying neighborhoods are located all across Texas, including many areas in DFW.

Want to find out if you qualify for this type of loan?  Are you interested in seeing which properties qualify as approved neighborhoods?  Just contact any mortgage professional you are familiar with and they should be able to inform you accordingly.  The department of Housing and Urban Development updates the areas which are eligible quite frequently, so if you can’t find something you like immediately just give it some time.  You can also visit HUD’s website for more information.

What does this mean for Fort Worth and Dallas?  It means that if you are in this situation, your neighbors (and pretty much every taxpayer) may soon be footing the bill for your mortgage.  It also means that if you are currently waiting to refinance your loan, or if you are in the process of getting a new home, you might want to speak with your loan officer and see if they advise locking in your interest rate.  Some analysts are predicting a massive jump if this bill ends up getting passed.

As always, we will keep you updated on the progress of this situation as details come available to us.  If you have any questions about it, or if you are interested in getting a mortgage, don’t hesitate to CONTACT US and we will get back to you as soon as possible.  You can also SEND US AN EMAIL or FILL OUT THIS FORM and one of our loan officers will get back to you quickly.

These additional funds will also be available for consumers looking to purchase new homes, although there is one small change to the previous requirements for qualifying.  People are still eligible for the ever popular 100% financing the USDA RD loan offers, but the up front Funding Fee has been increased from 2% to 3.5%.  This is small potatoes considering that this funding fee can be rolled into the loan amount, so you don’t have to pay for anything out of pocket at closing (theoretically).

If you have questions about the USDA Rural Development loan, or what properties in Fort Worth or Dallas qualify, don’t hesitate to CONTACT US and we will review your situation.  You can also FILL OUT THIS FORM or SEND US AN EMAIL and we will get back to you as soon as possible!  Don’t miss out on this great opportunity!

For example, from April to July rates have been dropping quite steadily, but for the last several weeks they have leveled out, and don’t seem to be dropping again.  In fact, all signs point to rates going back UP before we see any type of drop again.

What does this mean to you?  It means that if you are on the fence about refinancing your mortgage you should take advantage of these low rates NOW before they go back up.  This is the best we have seen since 1972, and if you don’t feel like waiting another 40 years you should CONTACT US as soon as possible. You can also SEND US AN EMAIL or FILL OUT THIS FORM and we will review your situation.

We can get your loan refinanced faster than you could even imagine. OK maybe not faster than you could even imagine, but I can guarantee you it’s quick.

WHAT IS A HUD HOME?

In its most basic sense, a HUD home is a one to four unit property (residential) that is foreclosed upon and then acquired by HUD, who in turn offers it for sale to recover any loss it may have incurred on said foreclosure claim.  The houses are then sold to the public through internet listing sites that are ran by property management companies who are under contract from HUD.  CLICK HERE for local Dallas-Fort Worth HUD home listings.

HOW DO I GET ONE?

If you find a property you like, just notify your real estate agent who can make an offer for you on your behalf.  HUD will even pay the real estate agent’s commission (if it is included in the purchase contract).  If you need a real estate agent just contact us and we will find the best one for you!

WHAT ABOUT PRICE?

Based on the most recent appraisal, HUD homes are offered for sale at fair market value.  In general, HUD homes are put on the market and sold during a particular time, which is known as the “offer period.”  Many different borrowers or investors may submit their offer during this time period, at the end of which the most desirable offer is accepted.  If none are accepted then the property will be continued for sale on an indefinite “extended” basis. In the end, the mortgage broker or real estate agent will be notified within 48 hours of HUD’s acceptance of any offer.

WHAT ABOUT GETTING FINANCING?

In order to buy a HUD home, you must do so by paying cash or by obtaining financing through a traditional mortgage broker or loan officer.  In order to bring the least amount of money to closing, you would need to obtain financing from FHA, which (luckily) is possible on HUD homes.  HUD does not provide direct financing to buyers of HUD Homes, so if you need to get qualified for an FHA loan (or any other type) just FILL OUT THIS FORM and we will get back to you as soon as possible.

WHERE CAN I LEARN MORE ABOUT HUD PROPERTIES?

Luckily, any single family residence available that is acquired by HUD will display a sign that should identify the company who is listing the property.  You can also see internet listings HERE.  You can also CONTACT US and we can get you a list of HUD homes that are offered for sale in your area.

The bill will allow first time homebuyers and any eligible borrower until September 30^th to close on their home.  So if you recently put your home purchase on the back burner because you didn’t think you would get the tax credit, call your loan officer and get your mortgage moving again!

As always, if you have any questions about the tax credit (or home loans in general) please don’t hesitate to CONTACT US and we will get back to you as soon as possible.  You can also fill out this LOAN OFFICER CONTACT FORM and one of our representatives will review your situation and see if we can help you out!

As of today, to receive the tax credit for first time home buyers, you would need to meet two guidelines in regard to time.  First of all, you had to have your initial contract signed by the end of month in April, and you have to actually close on the transaction by the end of June.  Sounds simple enough, right?

Well, the problem arose when (just like always) people drug their feet and waited until the last minute to find a house or get a home loan.  Consequently, a bevy of loans went to the lenders, and due to the high volume they couldn’t close them in time.  Next thing you know, it is the end of June and literally thousands of loans are in danger of not closing in time.  You would think that there would be a contingency plan in place for just this type of situation, but unfortunately that’s not the case.

Meanwhile, on Wednesday, the Senate approved a three-month extension,which would give buyers until Sept. 30 to close, but it’s attached to another bill which has yet to be passed by the House.  The fact that the House may be in the process of a filibuster doesn’t help one bit.

According to the National Association of Realtors, as many as 180,000 buyers who were hoping to close by the end of June are more than likely to miss the deadline.  Ouch.  Rumors are swirling that if it takes a month to pass the extension home buyers would be able to apply for the credit after the fact, but this has neither been confirmed or denied as of yet.  So keep your fingers crossed, and we will let you all know as soon as we hear anything about it.

If you have questions about the tax credit (or getting a home loan in general) please don’t hesitate to CONTACT US and we will get back to you as soon as possible.  You can also fill out this LOAN OFFICER CONTACT FORM and one of our representatives will review your situation and see if we can help you out. 

This is somewhat surprising, being that April was the first month in recent history where the number of foreclosures actually fell from the previous month.  Long story short, this behavior is indicating somewhat that the overall number of foreclosed properties has peaked.  Only time will tell, though.

BENEFITS OF BUYING FORECLOSURES

According to the National Association of Realtors, the typical discount received from purchasing a distressed or foreclosed property is on average around 15 percent.  That’s amazing, as long as the condition of the property isn’t deplorable.  Why does this matter?  Generally, to receive financing for a home, the property has to meet certain conditions and requirements in regard to its physical state.  Bad roofs, wiring or plumbing all represent types of defects that would make a property essentially “un-lendable.”  So unless you are planning on paying with cash, you’re going to have to get an appraisal or in depth inspection to see if the property will meet lenders requirements of livability before you purchase.

DIFFERENCES BETWEEN BUYING A FORECLOSURE AND A TRADITIONAL PROPERTY

The main difference between buying a foreclosed property compared to a traditional home is that the home itself is owned by the bank, or lender.  Luckily for you, banks are much more eager to sell their foreclosures as soon as possible in effort to save money on taxes or other operational costs associated with home ownership, or in their case, management.

Another difference you will notice is the actual loan application process.  Even though legally you can work with any lender or loan officer you choose, often the bank who owns the house will require that you get pre-approved with their institution before they will accept your offer.  Overall they just want to be doubly sure that you can afford the house before they sell it to you.  Luckily though, you are still free to use any lender you choose once the process gets started.

Last of all, the bank who owns the house will likely require that you put more money down when you make an offer.  Known as “earnest money,” this compensation is paid at the time of closing to show that you (as the buyer) are serious about following through with your contract.  With foreclosed houses, you can expect to write a check for at least $500.

WHERE TO GET STARTED

Lucky for you, the process of buying a foreclosure starts the same place as a traditional home, which is getting pre-approved.  As mentioned earlier, the bank wants to make absolutely certain that you can afford to make the payments on the house before they go into negotiations with you.  They start by having a loan officer see how much you qualify for, as well as giving you estimates on closing costs or monthly payments so you know what to expect in regards to money issues.  This is totally normal, and will preemptively make sure that you don’t get into a mortgage that you can’t afford.

So, if you have any questions about the foreclosure process or getting pre-approved, don’t hesitate to CONTACT US and we will get back to you as soon as possible.  You can also fill out our QUICK LOAN APPLICATION FORM and I will review your situation to see if I can help you out. 

HOW LOW CAN THEY GO?

The amount of the rumored change would drop the allowable amount of seller concessions from 6% of the sales price down to 3%, which is still enough to cover all the closing costs on a loan of approximately $250,000, but anything less than this will force buyers to pay at least some of their costs out of pocket.

WHY WOULD THEY DO SUCH A THING?

The FHA is making this change in an effort to protect the value of the homes it has loans on.  When a seller agrees to pay concessions and closing costs, they are really inflating the sales price (and loan amount) on the property to cover these amounts.  If the home in questions doesn’t end up appraising for the inflated value you are then going to start running into problems.  Furthermore, by lowering the percentage of allowable seller concessions, the FHA is really attempting to  lower their overall risk at the same time.

WHEN DOES IT HAPPEN?

In its most recent Register Notice, the FHA said that the proposed change would likely occur by “early summer” although FHA spokesman Lemar C. Wooley recently backtracked and confirmed that there had been no official Federal Register announcement as of yet.  So is it just a bunch of rumors?  Possibly, but obviously we will keep you updated as we come across any new information.

If you have any questions about seller concessions or the home buying process in general, don’t hesitate to CONTACT US and we will get back to you as soon as possible.  You can also FILL OUT THIS FORM and one of our loan officers will review your situation and see if we can help you out. 

]]> http://www.dfwmortgageguide.com/all-catagories/fha-seller-concessions/feed/ 2 http://www.dfwmortgageguide.com/all-catagories/all-about-helocs/ http://www.dfwmortgageguide.com/all-catagories/all-about-helocs/#comments Thu, 10 Jun 2010 15:56:34 +0000 Mortgage Mike - Admin http://www.dfwmortgageguide.com/?p=1369 One of the good things about having a mortgage is the ability it gives you to build up equity in your home.  What’s equity you ask?  Well, you can click here or I can tell you really quick.  Quite simply, equity is the amount of money you have already paid against the value of your home, and it is an easy value to determine with a little bit of math.

HOW TO DETERMINE YOUR EQUITY

The easiest way to find out how much equity you have in your home is to subtract the amount of your mortgage balance (look on your mortgage statement for UPB, Unpaid Principle Balance, or just Principle Balance) from the current value of your home.  For example, if your home is worth $100,000 and you owe $40,000, then your equity is $60,000.  In other words, as you pay down the principle on your mortgage, your equity increases inversely.

HOW DOES EQUITY WORK FOR YOU?

What makes equity special?  Well, equity can actually work for you if you know how to do it.  Many people borrow against it and use the money they take out to pay for things such as home improvements, investments, or even paying for a child’s college tuition.  Other people use the money to purchase additional properties and, in turn, make even more money.  Nice.

Long story short, having a lot of equity in your property is a great thing, especially if you are all of a sudden in the need for cash.  But how do you actually get the money out to pay for things?  Well, that’s where the HELOC comes into play.

HOW DOES A HELOC WORK?

Opening a HELOC (which stands for Home Equity Line of Credit) allows you to access the built up equity in your house for when you need a quick influx of cash (without having to refinance your entire mortgage).  Let’s say you fall and break your arm, or your daughter needs braces.  Or maybe your car broke down and you need a few thousand dollars to pay for repairs.  A HELOC can give you the cash you want (your cash) to pay for the things that NEED to be paid.

The HELOC you take out functions basically like a second mortgage on your home.  Because of this, the interest rate you pay will be a little higher than that of your first mortgage.  This is common, being that second mortgages are traditionally more risky from the point of view of the lender.  Different factors can determine how much interest you pay, though.  Quite simply, the rate you get is also mostly determined by the amount of equity you are cashing out.  The more equity you take out, the higher your interest rate, and vice versa.

A LITTLE MORE INFO

Fortunately for you, there are quite a few different types of HELOCS available to you as a consumer and homeowner.  Just like a traditional first mortgage, you can get a HELOC with a fixed or an adjustable rate.  You can do it as a regular line of credit, or you can take out the entire amount in a lump sum.  You can also do a bit of both.  You can write checks from the HELOC (like a bank account) and some lenders will even grant you a debit or ATM card to use to make withdrawals too.  You’ve got lots of options is what I’m saying.

In conclusion, whatever your particular needs may be, there is more than likely a HELOC out there for you.  They can really help out in times of need, and the more people that are educated on their benefits the better.

If you would like to see if you qualify for a Home Equity Line of Credit, don’t hesitate to CONTACT US and we will get back to you as soon as possible.  You can also FILL OUT THIS FORM and one of our loan officers will review your situation to see if a HELOC is right for you.  Just tell us a little bit about yourself in the comments section