Purpose of the FHA 203k streamlined rehab loan
Home buyers and home sellers across America have a friend and ally they may not be aware of. For many buyers the “perfect” location may not be the “perfect” home. Due to the recent downturn in the economy, which many agree will level out this year in spite of Congress’s best efforts to destroy it, there are many homes for sale either by private owners or lenders who have taken?possession.
Real estate owned is the common term for bank owned properties which many investors are well familiar with as REOs. The foreclosing lender rarely, if ever, will perform any upgrades or maintenance to the average home before putting it on the market. For buyers with 20% down and plenty of cash to cure the issue this is not a major concern. However with the increasing number of buyers using FHA for their fairly liberal 3.5% down payment this is an issue.
Georgia Area Median Income by County
Many home loan mortgage programs have different requirements for maximum income levels by borrower and or household. Each state has different areas and often a single MSA or AMI may cover multiple counties. It is always best to consult with your home loan mortgage professional but, only as a guideline, here is the HUD AMI (Area Median Income) list for Georgia as of November 2, 2009. In Georgia call Ken Cook at 678-439-8683
I Found Me! (At my new job)
While for the last several years I have been blogging as partner and “President” of a busy but small mortgage lender licensed in Georgia, Florida and for a time North Carolina things have changed mightily over the last few weeks. Many of you knew I was considering mothballing my Novation Mortgage and indeed had spoken to some about various opportunities around the industry.
Early on in the change process I decided if I were to continue with my experience in the mortgage industry it would be at Regional Director or above or good old Loan Officer. Several people contacted me through Active Rain or as a result of Active Rain I should say and others with whom I interviewed rapidly found my 3 plus years of blogging here as well as proliferated around the Internet. Some liked the idea and others did not – understandably – as keeper of the keys to my own company I was often more outspoken than I will be henceforth.
Home Loan Mortgage Rates Lowest Since May
Georgia FHA Mortgage Rates
We constantly keep our eyes on the rates wondering if and when they will move and which direction they will go. As a Georgia FHA home loan expert I am most interested in FHA but we offer VA, Fannie Mae and Freddie Mac loans as well. Of course any move higher invokes one response and any move lower another. It is amazing to me how a slight move higher gets people to call and a slight move lower gets people to hope the rate will go even lower.
Forbes is a great source for stories and news about mortgage interest rates and I can almost tell where my customers get their information when they get it from Forbes. Their article this morning titled “Mortgage Rates Lowest Since May” sparked a few emails and a couple of calls from people saying they saw rates had dropped to 4.57 – sure, on a 5 year adjustable!
It’s easy to skim articles and come up with a number like that so I don’t blame people for doing so. The reality is mortgage rates are lower today than they have been since May but chances of them going any lower or even hovering that low are very slim. Rates have been more volatile this year than they have in many years although the fluctuations, fortunately, have been small. My advice? If you are a first time home buyer and want to take advantage of the first time home buyer’s tax credit or even if you’re just looking to purchase or refinance an existing Georgia FHA home loan this is a great time to do so.
Call me directly at 678-946-0101
The Wii Fit, Starbucks and Home Loans
What do these three have in common? You! We live in a time when business and pop-culture are not longer separated by thick, gray walls of impenetrable social anti-matter. As a result service providers who once controlled the mortgage banking industry are doing everything they can to present their prospective companies a “the next big thing”. The reality of it is it is the small, local broker and lender who is on the very cutting edge.
Wii Fit is very much the rage among thirty-somethings. There are many thirty-somethings today who can say they met their mate at Starbucks. So why is it the biggest banks still have faith among this super-charged, highly intelligent home owners? The reason I even make that statement is because it is, after all, those very biggest names who did the most damage to the real estate industry. Even one super huge bank which bought the largest lender was also guilty of stuffing people into loans they could not afford.
What makes the local broker or lender more like Wii Fit or Starbucks? Because they are local to your neighborhood or community. The people who work there are people you may very well stand next to at Starbucks. They are the people who care about your community and are more likely to care about your financial health.
Having known many people who at one time or another worked for one of the behemoths by their testimony I can report any appearance of care is of a majority a joke. All they care about is volume and how much they can make on each loan. That goes for every major bank or lender you can name including the ones who are out of business.
We at Novation Mortgage adhere to strict limitations on commissions and earnings. We do not make more for one type of loan than another so no matter which solution you choose our earnings are almost identical. We plan on long term relationships where we are not afraid the borrower will find out how much we make because we never hide it. We are in business to feed our families and pay our own mortgages so we do not work for free like some former national brokers would have had you believe.
As for the so-called “up front” mortgage brokers (not even sure if any of those are still in business) we have never hidden our fees unlike every bank and national lender. We have always disclosed our fees and our income and explained to the home-owner or buyer what each mortgage fee represents.
When you are looking for a home loan in Georgia or Florida there is no higher integrity or commitment to you than Novation Mortgage.
First Time Home Buyer
To the seasoned home buyer today’s economy and real estate industry condition are a little frightening to say the least. One would assume, then, that this is not a good time to be a first time home buyer. The truth, however, is quite the opposite.
The existing home owner is more likely to have existing “baggage” to bring to their next purchase where the first time home buyer is not encumbered with such burdens. The first time home buyer will certainly not be in a negative equity position on their existing home. This is a great position to be in when the market is so full of opportunities to buy properties at well below the price they would have been just a few short months ago.
Financing is available for first time home buyers up to 100% of the purchase price – though 96.5% financing plus a gift or loan from a family member or employer is much more likely. Honestly I would not mind at all being in the position to buy my first home today instead of being in the position I am! There are thousands of deals in the Atlanta area and literally tens of thousands throughout Georgia, Florida and the southeast.
If you are conisdering buying your first home give me a call. I have helped hundreds of people buy their first home or first investment property over the last few years. Your real estate agent knows about real estate regulations and my staff and I are all seasoned experts in the mortgage and finance business. We know things your agent doesn’t even want or need to know.
Call today while home loan mortgage interest rates are still very VERY low and there are plenty of opportunities on the market. In the Atlanta area and north Georgia call 678-946-0100 and in south Georgia and Florida call 866-946-0120
FHA Streamline Refinance
Did you know if you have an existing FHA home loan that you can refinance to a lower rate using something called an FHA Streamline Refinance? The advantage of the FHA streamline refinance is to allow the home owner to refinance from an existing FHA home loan into a new FHA home loan with a lower interest rate resulting in a lower monthly payment. All Georgia and Florida home owners who have an existing FHA home loan are eligible for the FHA streamline refinance.
The most important fact to qualify for the FHA streamline refinance is that the borrower not have been late on any payments during the last 12 months and that the existing home loan be an FHA home loan. Some of the amazing features of the FHA streamline refinance, especially for borrowers in many areas of Georgia and Florida are:
- No appraisal may be needed under most circumstances
- No income verification is required
- Mortgage interest rates are very low right now
- Closing is quicker than a normal refinance
There are only a couple of “downsides” to the streamline refinance which really are not downsides. The most important is that this is not a cash-out refinance. The other is that if you cannot pay the closing costs out of pocket you will need an appraisal on your property.
Not needing an appraisal is huge right now because of the recent declining values in real estate all throughout the southeast and the rest of the nation. This allows the home owner to refinance to today’s lower home mortgage interest rates into a new FHA home loan even though the existing payoff may be more than the present value of the home.
Call my offices today at 678-946-0100 or 866-946-0120 to get more information and to start the process to take advantage of rates that really cannot get much lower if they get lower at all.
What is Most Important: Closing Costs or Interest Rate?
I recently wrote an article telling how the “no cost loan” works and in it I demonstrated there are always costs and the borrower always pays them. Of course only 132 people in the entire world have read that article and millions have seen the big bank’s nationwide advertisements showing how they can purchase a home or refinance a home without writing a check for the closing costs. Pretty silly considering most refinances do not require the buyer to write a check for the closing costs. But when we start talking about closing costs on a purchase that’s a different story.
So let’s quickly revisit: there are closing costs and the buyer always pays them. No matter what any big Bank in America tells you. For example, if you pay the closing costs the big Bank in America puts you into a 30 year loan (on that day) for 5.375 interest rate and about $3700 in fees on a $200,000 loan or a 6.875 interest rate and no fees on a $200,000 loan. Now when ARM loans were cheap and attainable they could have compared with no fees on an interest rate even lower than the rate for a fixed 30 year loan.
$1,313.86 would be the monthly P&I at 6.875
$1,119.94 would be the monthly P&I at 5.375
So if you are going to keep the loan for less than 35 months this could make sense but if you keep the home longer than 35 months you will now be paying an additional $94 per month in closing costs for the remaining life of the loan.
If you must assume then assume there is no free lunch and ask for a comparison chart from a trustworthy mortgage advisor.
Twitter Tweets about FHA November 19, 2008
As a part of my research for my BlogTalkRadio shows I collect data from all over the internet. I used to keep these quiet but now, at least from time to time, I share these with anyone who wants to read them. If you are unfamiliar with Twitter it is a
Is It Still Possible To Refinance?
The short answer is “yes”. The long answer is that for a few reasons it may be more difficult to acheive a refinance today but never assume it is or is not the right thing to do until you speak with a reputable home mortgage banker like one of the well trained and highly experienced lenders at Novation.
While it is true that housing values have declined in most markets it is also true that refinancing to shorten your repayment term or get out of an adjustable rate before it is too late to do so may be a smart idea and may be the right idea for you. Again you will need to consult with a trustworthy mortgage consultant to determine if a refinance will satisfy your needs.
Refinancing today is more restricted than it was in 2002 through 2007 but that is not necessarily a bad thing. The dangerous types of loans that plagued the industry through that period are gone and what we are left with are conservative loans for conservative buyers. Income is usually required to be fully documented as are assets and values have to be supported by unrelated third party appraisers who examine the property and determine its value by comparing it to recent sales in the immediate market area.
So, to refinance your home loan today can make sense if you are lowering your payment, consolidating other long term, high interest loans, or bettering the terms of your loan.
Live Desk
Daily Rates for Qualified Buyers
Today |
Last Week |
|
| 30 Year Fixed | 3.59% | 3.65% |
| 15 Year Fixed | 2.91% | 2.89% |
| 5/1 ARM | 2.81% | 2.57% |
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