Monday, June 28, 2010

Loans at Risk For Some Buyers!

Fannie Mae's new "Loan Quality Initiative" went into effect on June 1, 2010... which means that loans may be at risk for some buyers. Here's what you need to know-and what you need to do- to keep your deals from blowing up right before closing.

Undisclosed debt is a leading cause of mortgage fraud and early payment loan defaults. That's why, as of June 1, lenders who originate mortgages that will be sold to Fannie Mae are being advised to pull a second credit report on many transactions just before the loan closes. By reviewing a second credit report, lenders can find out whether other creditors have recently requested information about the mortgage applicant, or uncover situations in which an applicant might be trying to obtain other loans for things like a new car, home furnishings, etc. If this creates any negative changes to the credit report, the result could be a higher interest rate and/or fees, or, even worse, the loan could be denied altogether!

So, please read below the top 10 credit don'ts during the loan process so you will know exactly what you need to do and not do when in the process of purchasing a home.

Please don't hesitate to contact me if I can answer any questions at all for you about this important news from Fannie Mae.

1. Don't do anything that will cause a red flag to be raised by the scoring system.
2. Don't apply for new credit of any kind.
3. Don't pay off collections or charge offs during the loan process.
4. Don't max out or over charge on your credit card accounts.
5. Don't consolidate your debt onto 1 or 2 credit cards. It appears your are maxed out.
6. Don't close credit card accounts. It will appear to the FICO that your debt ratio has gone up.
7. Don't pay late!
8. Don't allow any accounts to run past due-even 1 day!
9. Don't dispute anything on your credit report once the loan process has started.
10. Don't lose contact with your mortgage and real estate professionals.

Monday, June 21, 2010

You Can Afford to Buy and Haven't...Are You Crazy?

This may be the best buyer’s market that we’ll see in our lifetimes. There are lots of legitimate reasons why a person should be taking advantage of this market if they are able.

Obviously, if a person doesn’t have the down payment or credit score, they won’t be able to seize this opportunity. If a person is concerned about losing their job, that would be a valid reason for not buying now. If you are planning on relocating in the next year or two, maybe now isn’t the time to buy.

On the other hand, if a person doesn’t own a home, has good credit and job stability, they should seriously consider capitalizing on this unique combination of opportunities. A qualified real estate professional can explain all of the reasons and even suggest some very interesting financing alternatives.

Top Ten Reasons to Buy a Home NOW

1. Interest rates incredibly low – the rates are hovering at near historic lows. Interest rates play a huge part in the cost of housing together with the price and shouldn’t be overlooked. The average mortgage interest rates for the past four decades were: 1970’s 8.9%; 1980’s 12.7%; 1990’s 8.1%; 2000’s 6.3%. Most experts agree that they’re going to rise this year.

2. Lower Prices - Recent price adjustments have made good values that haven’t been available in some situations for years. Current buyers are able to take advantage of the discounted prices.

3. Selection is good – In a seller’s market, buyers sometimes have to accept a home that may not meet their needs completely because of short supply. Inventories in most markets and certain price ranges are higher which allow buyers better choices.

4. Negotiate financing concessions – FHA, VA, and Conventional allow the seller to contribute towards financing concessions for the buyer. The money can be used for buyer’s closing costs, pre-paid items or interest rate buy down.

5. Costs for FHA loan going up – Currently, a seller can pay up to 6% of the sales price in financing concessions but the number will be reduced to 3% later this year; the date has not been announced yet. The annual MIP for FHA loans will also probably be going up this year which will increase the monthly payment. Buyers who get in now will pay the lower fees.

6. Interest and property tax deduction – the U.S. is one of the few countries in the world that allow an interest and property tax deduction for homeowner/taxpayers.

7. Source of funds with deductible interest - a homeowner can borrow up to $100,000 above their acquisition debt and deduct the interest regardless of what purpose the money is used. This is a great opportunity to consolidate debt at a lower interest rate and be able to make the interest deductible that otherwise may not have been.

8. Capital gain exclusion – the U.S. allows qualified homeowners to make a profit on their home without having to pay tax on the gain.

9. Borrowing against equity is non-taxable event – taking money out of the equity in your home does not require recognizing capital gains income.

10. The combination of reasons to buy a home may never be stronger than now.

Interest rates are going up; it is just a matter of when. Inventories are starting to be absorbed by current demand. New home construction is down considerably which could lead to higher prices due to not enough annual housing units to keep up with the population. Prices have started to climb in some markets; others will surely follow.

A basic rule of investing is to buy low and sell high. There will be some buyers who take advantage of the current opportunities and will look back and remark how fortunate they were to act when they did. There will be others who look back on these conditions and say "We should have bought then." Hindsight is always 20/20. Evaluating the present and acting takes equally clear vision. The help of a trusted professional can make the difference.

Saturday, June 5, 2010

EXIT Realty Educates the Public in Free Webinar June 8: Real Estate After April 30th...What Now?

Company's U.S. President, Tami Bonnell, explains what home buyers, sellers should know now
So you didn't buy a home before the first time homebuyer tax credit expired on April 30th... what now? Are there still good deals to be had? EXIT Realty Corp. International will be hosting a free, live, public webinar designed to help consumers make smart decisions before they buy or sell a home. U.S. home buyers and sellers are encouraged to tune in for the discussion.

Entitled "Real Estate After April 30th - What Now?", the 30-minute webinar will be hosted by real estate expert and President of the US Organization of EXIT Realty Corp. International, Tami Bonnell, and will be held at two times, 4:00 pm ET and 7:00 pm ET on Tuesday, June 8th. This webinar is the second in the popular series hosted by Bonnell.

"There are still many good reasons to jump into the real estate market," says Bonnell, "but you really need to know what to look for. Educated buyers and sellers make the best decisions for their families and that's what we hope to do through this webinar series - educate. No hype, just the facts."

Bonnell will address low mortgage rates, tax deductions, 203k loans and affordability among other topics.

To register, click: for the 4:00 pm ET session or for the 7:00 pm ET session

About Tami Bonnell: Tami Bonnell is a thirty-year veteran of the real estate industry and was instrumental in building three major brands. Among her many achievements, she was recognized by real estate trend-watcher, Stefan Swanepoel, as one of the 100 Most Influential Women in Real Estate.

Ms Bonnell has been a featured speaker at the National Association of REALTORS® convention to the Top 500 Power Brokers, The Women’s Council of REALTORS®, Inman News Connect Conference and she will be speaking at the opening session of RISMedia’s Leadership Conference next week in New York. Along with several other national and local speaking engagements, Ms Bonnell hosts quarterly webinars educating the general public on real estate issues.

She is a wife, mother of three and grandmother of two. In her spare time she is a martial artist, coach, judge and referee.

Ms. Bonnell has been the President of the US Organization of EXIT Realty Corp. International since 2001.