How Many Homes Can Be Sold With a 3.25% Fixed Rate Mortgage That Ends Up at 5.25%???

Imagine this: You, as a Realtor have a house listed for sale and a motivated seller.  This seller is willing to pay up to 4% to 6% or higher towards the buyers’ closing costs and prepaids.  You have a prospective buyer that qualifies for a USDA Rural Housing Loan (the income limits starting January 20, 2009 are much higher than where they currently are).

Imagine now that you send your buyer to Northstar Mortgage Group for their financing.  They don’t have a lot of cash to use towards closing and their credit score is a 580.  Imagine that they are told that they can get a 30 year fixed rate mortgage and that the rate the first year will be 3.25%, the second year will be 4.25% and that years 3 through 30 will only be at 5.25% AND that they have to bring NO MONEY WHATSOEVER to closing.  Could you sell that house?????

We are able to offer this program in a large number of areas of Florida, Alabama, Georgia, Tennessee, North Carolina and South Carolina.  Many prospective buyers are fearful to even consider trying to get financing because of all that they are hearing in the national media but this program IS available!

If you are a buyer, you need to know that you can get financing as long as you qualify for the payment.  If you recently started a new job and know that in a couple of years your income will be higher, this is perfect for you!  If you recently graduated from college and are just getting started in your field, it is an ideal solution for you.  If you recently got married or divorced, this program works for you!  If you have owned before or have never owned before, this is a great way to buy a new primary home now.  Why wait?  Rates and prices are low and may start to go up.  You can actually own your own home for less money that you currently pay in rent!  STOP PAYING YOUR LANDLORDS’ MORTGAGES!

You can email me for additional information or make application at my website.  DON’T DELAY – the rates may never be this low again!

With Interest Rates So Low, What Happens if I Lock In a USDA Rural Housing Loan and Don’t Close by Expiration of the Lock?

Currently, the investor we use for our USDA Rural Housing loans offers two rate lock extensions up to 60 days each, so that you can actually get 120 days extension.  They do charge for this and we have been told that, effective today, December 18, 2008, the price (charge) to extend is going up.  This price is charged as a one-time fee and is NOT an increase to your current rate.

Here are the new costs for extending a rate lock in:

1 day extension – No Charge, but can only do 1 free 1-day extension, not 2

7 day extension – .125% (this remained the same as it was)

15 day extension – .375% (was .25%)

30 day extension – .500% (was .375%)

45 day extension – .625% (was .500%)

60 day extension – 1.00% (was .75%)

We have to request a lock extension ON OR BEFORE the current rate lock expires.  Once it has expired, it can’t be extended.  Loans may be extended a maximum of two times, which means that if a loan is extended for 1 day and then needs an additional 15 days, for example, the total cost will be .375% for 16 days.  The maximum extension time would be 120 days – can extend twice and 60 days is the max for each one.

If a lock expires, it has to be repriced subject to the higher of “worse case” pricing (were the rates higher on the day you locked or on the day you are repricing it – that is what the new pricing will be).  If expired less than 30 days, it will be locked at the existing locked price or the current market price, whichever is worse, PLUS THE COST OF AN EXTENSION FEE AS NOTED ABOVE for the number of days.  Obviously, it is a lot less costly to extend the loan rather than having to let it expire and relock it.

However, if the lock is expired for 30 days or more, it would be priced at the current market price with no extension fee.

Obviously, if you have a loan that is currently locked, it is very important that the borrower, the seller, the lender, the Realtor® and the title company all work together to try to get the loan closed prior to the rate expiring.  If that isn’t possible, there will be fees associated with extending so it is important that a loan not be locked in too early!

USDA Income Changes Go Into Effect Jan. 20, 2009

As long as nobody complains, the proposed income limits will go into effect on January, 20 for the USDA Rural Housing mortgage program.  The tables below are for FLORIDA only; other states will have the increases, as well, but the amounts will vary.  This is for 100% financing that also allows a buyer to finance their closing costs!

 

CURRENT TABLE

County	1-Person	2-Person	3-Person	4-Person	5-Person	6-Person	7-Person	8-Person
All counties except those listed below	49,950	56,600	63,700	70,750	76,400	82,050	87,750	93,400
Clay, Duval, Nassau, St Johns	51,400	58,750	66,100	73,450	79,350	85,200	91,100	96,950
Collier	56,200	64,250	72,250	80,300	86,700	93,150	99,550	106,000
Gadsden, Jefferson, Leon	50,000	57,150	64,300	71,450	77,150	82,900	88,600	94,300
Palm Beach	55,700	63,650	71,600	79,950	85,900	92,300	98,650	105,000
Okaloosa	50,850	58,100	65,400	72,650	78,450	84,250	90,100	95,900
Broward, Pinellas, Monroe are not eligible

 

PROPOSED TABLE

County	1-4 PERSONS	5-8 PERSONS
All counties except those listed below	70,750	93,400
Clay, Duval, Nassau, St Johns	73,450	96,950
Collier	80,300	106,000
Gadsden, Jefferson, Leon	71,450	94,300
Palm Beach	79,950	105,000
Okaloosa	72,650	95,900
Broward, Pinellas, Monroe are not eligible

For each person over 8-persons, add 8% of the 4-person limit.

NOTE:  This is not an income increase for the 4-person and 8-person households. It simply removes the tiers for the 1-3 and 5-7 person households.  It does have the effect similar to an income increase for those families in the 1-3 and 5-7 groups.

Reminder: These are NOT gross income limits.  THE TOTAL ADULT HOUSEHOLD INCOME CAN BE MUCH HIGHER THAN THE “ADJUSTED” INCOME LIMITS IN THE TABLE.  Deductions are allowed for: child care (12 yr old or less) to allow employment of the adult; $480/annual for each non-applicant under age 18; $480/annual for full time student over age 18; and $400 if anyone is elderly or handicapped.  If the gross adult household income is less than the limit, you are good to go.  If the income is over the limits, use the adjustments. 

Contact me right away and let’s get you or your clients into a new home by Christmas!!!!