Archive for September, 2008
USDA Rural Housing Mortgage Update (100% Financing)
As the end of Fiscal Year 2008 approaches (September 30, 2008), the USDA Rural Housing Mortgage Program will be temporarily “without funds”. This happens every year, as those of us that have been doing these for a while are aware. The program is funded with appropriations from Congress and as they have not yet signed the appropriations bill, there will be a lag for a week or two at the beginning of October. This is VERY NORMAL!
If you are buying a primary home in Florida, Alabama, Georgia, North Carolina, Tennesee or South Carolina, or are a Realtor with a client buying one, feel free to have them email me to get into their new home with ABSOLUTELY NO MONEY DOWN!!!!
Add comment September 24, 2008
What the ‘Experts’ Say about Housing Prices
Tracking the Track Record – What the ‘Experts’ Say about Housing Prices
“The prices of houses seem to have reached a plateau, and there is reasonable expectancy that prices will decline.”
- Time Magazine 1947
“Houses cost too much for the mass market. Today’s average price is out of reach for two-thirds of all buyers.”
- Science Digest 1948 (average price at the time: $8,000)
“The goal of owning a home seems to be getting beyond the reach of more and more Americans.”
-Business Week 1969 (average price at the time: $28,000)
“The era of easy profits in real estate may be drawing to a close.”
-Money Magazine 1981
“If you are looking to buy, be careful. Rising home values are not a sure thing anymore.”
-Miami Herald 1985
“Most economists agree…a home will become little more than a roof and a tax deduction, certainly not the lucrative investment it was…”
-Money Magazine 1986
“We’re starting to go back to the time when you bought a home not for its potential money-making abilities, but rather as a nesting spot.”
-Los Angeles Times 1993
Note that 1993 was the absolute low-point for real estate values in Los Angeles.
Prices have sky-rocketed since.
“Financial planners agree that houses will continue to be a poor investment.”
-Kiplinger’s Personal Financial Magazine 1993
“A home is where the bad investment is.”
-San Francisco Examiner 1996
Add comment September 19, 2008
How To Reduce Your Mortgage!
There’s a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars. The trick is to make one extra mortgage payment a year and apply that payment toward your loan’s principal.
This is the method being used by “Bi-Weekly Mortgage Reduction Services” and “Bi-Weekly Mortgage Savings Programs”. Only, when you do it yourself, you don’t pay a third party unnecessary set-up costs and fees!
Example: $100,000 loan, 30-year mortgage, 6.5% fixed interest rate
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One-time Payment
It may not be possible for you to increase your monthly mortgage payment. Keep in mind that most mortgages will permit you to make additional payments to your principal at anytime. Perhaps, five-years after moving into your home you receive a larger than expected tax return, or an inheritance or a non-taxable cash gift. You could apply this money toward your loan’s principal, resulting in significant savings and a shorter loan period.
Example:
With a $100,000, 30-year, 6.5% fixed interest rate mortgage loan, the borrower will pay a total of $227,542.98 to pay back the loan in 30 years. That equals $127,542.98 in interest payments.
If the same borrower makes a one-time $5,000 payment the first day of year 6, he/she will pay a total of $204,710.75 and pay off the loan in 27 years (324 months). That’s a savings of $22,832.23 in interest.
1 comment September 19, 2008
USDA Rural Housing Loan (Mortgage) Property and Income Eligibility – Okaloosa County, FL
Yellow = Eligible/Orange = NOT Eligible
The map above shows those areas in Okaloosa County, FL that are eligible for USDA Rural Housing loans. Basically, the only areas that aren’t eligible are “between the bases” – Ft. Walton Beach, Shalimar, and Mary Esther east of Hurlburt Field. Following is the income guidelines used to determine if a buyer would qualify for a USDA Rural Housing loan based on the number of people in their family. Please note that there are some deductions from a buyer’s income that may help those who are over these guidelines to qualify, ie: medical expenses for disabled family members, a credit for full-time students, a credit for those in the household under 18 years of age, child care expense credit, etc. If you aren’t sure if you or your client are eligible, please call me at 850-424-6866 or email me.
Income Limits for Guaranteed Rural Housing Loan based on number of people in household:
1 Person: $50,850
2 Person: $58,100
3 Person: $65,400
4 Person: $72,650
5 Person: $78,450
6 Person: $84,250
7 Person: $90,100
8 Person: $95,900
Add comment September 16, 2008
USDA Rural Housing Loan (Mortgage) Property and Income Eligibility in Walton County, FL
Yellow Areas are Eligible
The map above shows those areas in Walton County, FL that are eligible for USDA Rural Housing loans. Basically, the entire county is eligible! Under the map is the income guidelines used to determine if a buyer would qualify for a USDA Rural Housing loan based on the number of people in their family. Please note that there are some deductions from a buyer’s income that may help those who are over these guidelines to qualify, ie: medical expenses for disabled family members, a credit for full-time students, a credit for those in the household under 18 years of age, child care expense credit, etc. If you aren’t sure if you or your client are eligible, please call me at 850-424-6866 or email me.
Income Limits for Walton County, FL based on number of people in household:
1 person: $49,550
2 person: $56,600
3 person: $63,700
4 person: $70,750
5 person: $76,400
6 person: $82,050
7 person: $87,750
8 person: $93,400
Add comment September 16, 2008
USDA Rural Housing Loan (Mortgages) Still Offer 100% Financing
While many mortgage loan products are being scaled back due to associated credit risk, the USDA Rural Housing loan is still allowing borrowers to finance 100% AND THEN SOME to buy their homes.
The USDA Rural Housing loan works a lot like a VA loan with a couple of differences that are beneficial to buyers with little or no cash on hand. A VA loan has a 2.15% funding fee for the first use; USDA loans have a 2% funding fee for all uses (in both the VA and USDA loan, the funding fee can be added to the loan amount and financed into the loan). A VA loan has a 3.3% funding fee for all subsequent uses of a veteran’s eligibility; the USDA loan is always 2%. Because of the lower funding fee, a USDA loan will result in a lower mortgage amount and, thus, a lower monthly payment.
The biggest difference is that with a USDA Rural Housing loan, ANY AND ALL CLOSING COSTS AND PREPAIDS THAT AREN’T PAID BY THE SELLER CAN BE FINANCED INTO THE LOAN AMOUNT! The appraisal will need to support it but a USDA loan allows 102% financing. So let’s say you or your client is purchasing a home that is $150,000 and it appraises for $155,000. If you add the 2% fee, the loan amount would be $153,000. Let’s assume that closing costs and prepaids not being paid by the seller equal $2,500, which, on a VA loan, would have to be paid by the buyer at closing in these circumstances. On a USDA Rural Housing loan, the buyer in this case can finance up to $158,100 (102% of the appraised value of $155,000). Therefore, the buyer can finance $155,500 (100% of the sales price plus the 2% fee plus the $2,500 in closing costs and prepaids that aren’t being paid by the seller) and come to closing with ABSOLUTELY NO MONEY! In fact, we always try to make the numbers work to the point that a buyer gets their EMD back at closing.
Some people will say that a 100% loan “is part of the reason we are in the credit mess we are in in this country”; however, a USDA Rural Housing loan is 100% 30 YEAR FIXED RATE mortgage that ALL BUYERS must qualify for. They don’t allow stated income whatsoever and make sure that the buyer will qualify for the payment amount and they have a maximum debt to income ratio that is used to insure this.
One important factor to point out: Today’s rate on a 30 year fixed USDA loan is at 5.5% with no points and no origination fees! Today’s VA rate is at 6% with no points, no origination fees!
While there are restrictions on income and geographical locations of where the USDA Rural Housing loan will work, you will find them to be very lenient. A lot of areas in Florida are eligible for these loans and you may be pleasantly surprised to find that you have areas that you work with that are eligible.
If you have any listings in Alabama, Florida, Georgia, Tennessee, North Carolina or South Carolina and would like to see if you can use this loan program for those listings and advertise that a buyer can get in the house with absolutely no money down, please feel free to email me. I can look up the property and the maximum income a buyer can make in that specific area or county.
If you would like to apply for a USDA Rural Housing loan, please click here and it will automatically bring your application to my computer to get started. Don’t feel that you have to do an FHA loan with 3% down when you may can get a mortgage with absolutely no money down!
2 comments September 15, 2008
Hurricane Ike is Affecting Destin and Ft. Walton Beach in the Panhandle
I live in Ft. Walton Beach, FL and my office is in Destin, FL (on the Gulf Coast in the Panhandle of Florida). It normally takes me about 10 minutes to get to my office. This morning, had I gone to the office, it would have probably taken a couple of hours……US Highway 98 between Ft. Walton Beach and Destin is closed due to the storm! There is water over the road in the eastbound lane and I guess they anticipate it covering westbound, as well, as both directions are closed. Below are some photos from Okaloosa Island that I took by the pier of the waves. Keep in mind: if you look at the blog below (“What a Difference a Week Makes”), that’s how flat our seas normally are!
Add comment September 11, 2008
FHA New Down Payment and LTV Requirements
Add comment September 11, 2008
100% Financing
With the Federal Government taking conservatorship of FNMA and FHLMC, interest rates were expected to drop. In fact, some financial analysts predict that they will drop to the point where more people purchase and housing prices will RISE! NOW IS THE TIME TO BUY and you need to let all of your clients know!
As an example, today’s rate for a Rural Housing loan (100% financing and they can finance closing costs and prepaids into the loan) is at 5.5% (APR 5.643) with no points and no origination fees. Couple this with our September special (We are waiving our administrative fee ($150) and doc prep fee ($150) on all loan applications taken from September 1 through September 30, 2008) and your clients that are sitting on the fence may want to hop off QUICK!
The rate above is for loans closed in September and we can actually get a Rural Housing loan closed, from application to closing, in 2 weeks or less.
Please feel free to have your clients call us or if you prefer, you can send us their contact information and we can call them! Or, they can Apply Here!
Add comment September 8, 2008
What a Difference a Week Makes! Why it is SO AWESOME owning real estate in Florida
Last weekened, we were on the edge of Hurricane Gustav; this week, it was a beautiful weekend. While everybody knows that the real estate market nationally is down, and it is here, as well, the prices in our local market make buying real estate in Florida a great investment!
We have something that makes us different than say, Kansas or Oklahoma, or most of the rest of the U.S……a GORGEOUS COASTLINE! Here in the Destin/Ft. Walton Beach area, our sand truly looks like snow. It isn’t too hot to walk on like the Atlantic seaboard, and it even squeaks when you walk. And the water? Simply AMAZING! Today, we saw about 20 dolphins, and for a few minutes even had a show worthy of Seaworld with the jumping they were doing. The color of the water is something that you can’t believe until you see it, but there’s a reason this is called the “Emerald Coast”! It is a great place to vacation and an even better place to live. I didn’t have a great day yesterday so I took today to go to the beach and relax and that’s where I took this picture (yes, I used sunscreen!) It’s the same pier as in the blog from last week about Hurricane Gustav. What a difference a week makes??
In our area (the Panhandle), we have the best of both worlds – a great resort area with awesome beaches that are easily accessible and certainly not over-crowded, especially at this time of the year, and a “small town” feel, as well.
There is a true sense of community here. We have 3 military installations very close (Hurlburt Field, Eglin AFB, and Duke Field), we’re within driving distance of Biloxi, MS, (approx. 2 hours), New Orleans (approx. 3-1/2 hours), and Atlanta (5-1/2 hours). There is a new international airport being constructed in Bay County, and football is KING in the Fall!
I love living in a place where you can go to a high school football game on Friday night and the temperature is comfortable, then drive to see the Florida State Seminoles play on Saturday, and then go to the beach and spend the day Sunday and get a tan! We have world-class restaurants and shopping in Destin and the Sandestin/Santa Rosa Beach area, lots of saltwalter and freshwater fishing, and we still have that small town feel that makes living here an experience that most only get to dream of!
I can’t imagine living anywhere else and I am quite certain that our market will come back and our real estate will ALWAYS be valuable just becuase of where it is located!
Add comment September 8, 2008
