The World of Mortgage Blog - According to Kimberly and Cathy

Fun Facts about the Real Estate/Mortgage Market

In 2011 investors purchased 1.23 Million homes.  This is up 64% from 2010.

• Investment purchases made up 27% of all the activity in 2011
  • ½ were cash purchases. 
  • ½ were distressed homes
• In a recent survey by Transunion, a troubled homeowner is more likely to let their house payment slip BEFORE they are late on their auto loan or credit cards! Yikes!
  • 9.5% of the troubled homeowners were late on their auto loans and 17.3% were late on their credit cards
  • 40% of them were late on their mortgage.
• In January, more short sales were closed than foreclosures.  This means the banks are agreeing to more deals – good sign!
  • Short sales accounted for 24% of sales
  • Foreclosures accounted for 20% of sales
• The average loan closed in March has a FICO score of 749, and LTV of 77% and a debt-to-income of 35%. – that’s a nice loan. J
  • The average loan denied was a FICO of 699, 85% LTV and a DTI of 43% - this is surprising. 

 

FHA Changes and Exciting New Programs

Exciting New Programs – We can offer loans with the following situations: 

• Revocable or Irrevocable Trusts. 
• LLC, Partnerships and Corporations
• Job Transfers when job has NOT started.  Just need signed offer letter.
• Foreign Nationals – Requires a sizeable down payment.
• Asset-based loans for people who have a lot of cash and not job income.

FHA Changes: 

FHA buyers need an FHA Case Numbers before April 9, 2012 or they will be subject to the new higher upfront MI fee.  Increasing from 1% to 1.75% upfront MI that is added to buyer’s loan amount.  AND the monthly will increase from 1.15% to 1.25% monthly.  That will increase their monthly payment by approx $17 per month.

Fabulous news to report on FHA transactions!

Have you ever had a transaction fall apart because work was required on an appraisal?  The seller wouldn’t agree to pay for items and the buyer didn’t have money to cover the costs?  If so, we’ve got the perfect solution.  We now allow our buyers to add up to $5000 for small repairs that are required on an appraisal report.  These repairs include;  carpet, paint, appliances, roof repair, and any work order requested.  As an added benefit the buyer does NOT need to execute an FHA 203K program in order to add the $5000 to the loan amount.  Appraisal value must support the sales price plus the $5000 in upgrades.  Example:  Sales price $100,000 plus work orders of $5000, means appraisal must be at $105,000.   It’s that easy.  Call us for details.

Does Your Family Need More Space…But you Don’t Want to Sell in this Market?

Recently we helped a past client with a rehab loan and it made us realize there might be more of you out there trying to make your current home work for your growing family. Their original plan was to sell their existing home and buy new with another bedroom and a larger family room area. They were frustrated because they were unable to sell it for the price they needed in order to make the move.

So, instead of moving (and paying the expenses involved with selling) we got them the money to pay off their existing loan and the $50,000 they needed to get the work done.  Give us a call with Questions!

 

 

95% financing on Condos in Seattle

Because Evergreen has been rated a Tier One lender with our Mortgage insurance partner, we can now offer 95% financing on warrantable Condos.   Buyer must have 680 Fico and the Debt-to-income ratio MUST be under 41%. 

• Must other mortgage insurance companies still require 10% down. 
• 3% maximum seller contribution. 
• Primary Residence Only. 

*****Anticipated FHA updates on April 5th*******

• Up front MIP is increasing from 1.75% to 2.25%.  This is the amount that is financed into the total loan amount
• Seller paid closing costs max at 3% (vs. 6% currently)
• GOOD NEWS: 620 score will remain for the foreseeable future

Miscellaneous Programs:

• USDA nearly out of funds
• 203K Streamline rehab:  Evergreen is now releasing ½ of the rehab funds at closing so that the buyer can start the project immediately. 

Lastly, rates took a major hit yesterday for two reasons:

1. On March 26^th (instead of the anticipated March 31^st date) the feds will end the $1.25 Trillion program for purchasing Mortgage Backed Securities

2. The treasury auctions that sell our countries debt didn’t go as expected.  They had to raise the yield to entice investors.  (Remember raising yield = raising rates)

********TIP********** Help educate your buyers to lock in their interest rates.  It is not a time to “float” for potential lower rates

FHA Streamline Rehab Loan (203k)

Today we'd thought we would refresh your memory of the usefulness of the 203K Rehab loan and also educate you on the Streamline 203K rehab.

203K Rehab program allows a buyer to purchase a home and increase the loan amount to cover any necessary or voluntary repair or upgrades to the home. This includes appliances and house payments if the home can not be lived in during construction. This is a very useful tool in working with many of the homes on the market that are less than perfect condition because of foreclosure and neglect. This program requires the buyer to have an FHA consultant (supplied with the program).

203K Streamline program is intended to facilitate uncomplicated rehabilitation and or improvements to a home for which plans, consultants, engineers and or architects are not required. This program allows a buyer to close quickly, without red tape, up to $35,000 in work. Work can be completed by the buyer.

Kimberly and Cathy 206.774.7595