When marketing meets full disclosure, Someday this will be on the Standard Seller’s Disclosures.
FHA requires only 3.5% down payment, which can be a gift from a family
The seller can pay all of the buyer's closing costs.
The underwriting guidelines are very flexible.
Non occupying family members are allowed to co sign.
Appraisers inspect the property just like a conventional loan and report for
health, safety or structural issues.
For program details or if you have any questions, please feel free give us a
Last Week in Review
"I WILL ACT NOW. I WILL ACT NOW. I WILL ACT NOW." Og Mandino. And acting now - more than once - is exactly what Congress and the President did last week, as two major economic plans were released that impact the mortgage and housing industries.
The first plan, the Economic Stimulus Plan for 2009, was finally approved by Congress and signed by President Obama. In addition, the President unveiled the initial details of his Homeowner Affordability and Stability Plan, which is designed to help stabilize the housing market and keep millions of borrowers in their homes. Many of the details of these plans are still being worked out, but read this week's Mortgage Market View article below for an overview of some benefits that may impact you.
In other news, the Stock market plunged last week on continued fears of a deepening recession, a failing banking system, weak corporate earnings and forecasts. The 113 year old Dow Jones Industrial Average closed the week down almost 7%, reaching a six-year low, which you can see in the chart below.
Not accounting for dividends, the Dow is at a level equal to what it was twelve years ago. Oftentimes Stock prices rebound once previous lows are tested...so let's hope that happens now, as the Stock market is due for a rally! The plunge in the Stock market did not lead to any significant improvement for Bonds or home loans rates last week, but the week ended with Bonds and home loan rates unchanged to slightly better from where they began.
THE NEW INITIATIVES THAT WERE ENACTED THIS WEEK COULD MEAN NOW IS A GREAT TIME FOR YOU TO TAKE ACTION ON YOUR HOME LOAN! CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR MORE DETAILS!
Forecast for the Week
Several reports could cause some action in the markets this week. First, we'll get a look at the housing market with Wednesday's Existing Home Sales Report and Thursday's New Home Sales Report.
Thursday also brings the Durable Goods Report (i.e. items that are non-disposable, like cars, furniture, appliances, games, cameras, business equipment, etc), which will give us a read on consumer and business consumption and buying behavior. And we can't ignore Friday's Gross Domestic Product (GDP) Report, as GDP is the broadest measure of economic activity. Given the state of our economy, it might not be too much of a surprise if these reports are negative.
Remember: Weak economic news normally helps Bonds and home loan rates improve, as money flows out of Stocks and into Bonds. When Bond prices move higher, home loan rates move lower. As you can see in the chart below, Bonds and home loan rates continue to face some tough technical resistance overhead, hindering their path to improvement. I will be watching closely to see what happens this week.
Chart: Fannie Mae 4.5% Mortgage Bond (Friday Feb 20, 2009)
The Mortgage Market View...
Here is an overview of some benefits of the Economic Stimulus Plan for 2009 and the Homeowner Affordability and Stability Plan that may impact you.
Stimulus Plan - Tax Credit for Homebuyers
The $787 Billion stimulus bill is made up of tax cuts and spending programs aimed at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II. One of the major benefits of the plan is a tax credit for new homebuyers. According to the plan, first-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit.
It's important to remember that the $8,000 tax credit is just that... a tax credit. The benefit of a tax credit is that it's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if you were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, you would owe nothing.
Better still, the tax credit is refundable, which means you can receive a check for the credit even if you have little income tax liability. For example, if you're liable for $4,000 in income tax, you can offset that $4,000 with half of the tax credit... and still receive a check for the remaining $4,000!
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.
The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying "homes" include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify. Buyers will have to repay the credit if they sell their homes within three years.
While details are sketchy - we will expect to get some clarity soon as to an additional tier of conforming loan amounts which had been first established in 2008. This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750. These loans would be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard "jumbo" loan rates.
Homeowner Affordability and Stability Plan
President Obama unveiled his plan to help stabilize the housing market and keep millions of borrowers in their homes. The Homeowner Affordability and Stability Plan includes two initiatives to help struggling homeowners. One is a refinancing program for homeowners with less than 20% equity in their homes, or who owe more than their home is worth. The second program attempts to lower monthly payments for homeowners at risk of losing their home. Many of the plan's details are still being worked out and will not be announced until March 4. Here is an overview of the plan's main components.
Under current rules, those families who own less than 20% equity in their homes have a difficult time refinancing and taking advantage of the historically low interest rates. This initiative is open to homeowners who have conforming loans which are guaranteed by Fannie Mae and Freddie Mac, and who owe up to 5% more than their home is worth.
According to the plan, "credit-worthy" or "responsible" homeowners can refinance their mortgage into a 30- or 15-year, fixed-rate loan based on current market rates. The refinanced loan, however, cannot include prepayment penalties or balloon payments. For many families, this low-cost refinancing may help reduce their mortgage payments by up to thousands of dollars per year.
As with the rest of the plan, details about this initiative will be released at a future date--including what, if any, credit score requirements will be included.
This initiative aims at providing help to individual families as well as entire neighborhoods by helping reduce foreclosures and stabilize home prices. It is intended to help homeowners who are struggling to afford their mortgage payments, but cannot sell their homes because prices have fallen significantly.
The goal of this initiative is simple: "reduce the amount homeowners owe per month to sustainable levels." To accomplish this, lenders are encouraged to lower homeowners' payments to 31% of their income by lowering their interest rate to as low as 2% or by extending the terms of the loan. In addition, lenders can also lower the principal owed by the borrower, with Treasury sharing in the costs.
Homeowners who are current on their mortgages but are struggling can still apply for this program. As such, this is one of the few programs designed to help homeowners who may face delinquency soon, but are current at the moment.
This initiative also includes a number of additional elements and incentives, including an extra incentive for borrowers to keep paying on time. The initiative will provide a monthly balance reduction payment that goes straight towards reducing the principal balance of the mortgage loan. As long as a borrower stays current on his or her loan, he or she can get up to $1,000 each year for five years.
Since the focus of this initiative is on helping families and neighborhoods, investment properties do not qualify.
The Week's Economic Indicator Calendar
Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.
Economic Calendar for the Week of February 23 – February 27
You can see how this is a problem for sales people like me. REMEMBER: Cell Phone Numbers Go Public next month.
REMINDER.... all cell phone numbers are being released to telemarketing companies and you will start to receive sale calls.
.... YOU WILL BE CHARGED FOR THESE CALLS Even if the message is saved on your phone, you will be charged for the minutes to listen to it.
To prevent this, call the following number from your cell phone: 888-382-1222.
It is the National DO NOT CALL list. It will only take a minute of your time. It blocks your number for five (5) years. You must call from the cell phone number you want to have blocked. You cannot call from a different phone number.
Brad Bergamini (email@example.com) has invited you to add the "Housing Sector News and Analysis from Seeking Alpha" RSS Feed to Microsoft Office Outlook 2007.
You can subscribe to this RSS Feed on any computer with an RSS-compatible program installed, such as Microsoft Office Outlook 2007. To view and subscribe to this RSS Feed, copy and paste the following Web address into your Web browser:
The Index… What does that have to do with Prescott Arizona?
GRI, CBR, ABR, REALTOR
Realty Executives Northern Arizona
503 East Gurley Street
Prescott, Arizona 86301
Main: 928.777.0257 ext 43
"Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it." --Warren Buffett
I have to post this even if it may not be true… It made me laugh aloud.
1. I had a New Hampshire Congresswoman ask for an aisle seat so that her hair wouldn't get messed up by being near the window.
(On an airplane!)
2. I got a call from a candidate's staffer, who wanted to go to Capetown. While I started to explain the length of the flight and the passport information, she interrupted me with, ''I'm not trying to make you look stupid, but Capetown is in Massachusetts " Without trying to make her look stupid, I calmly explained, ''Cape Cod is in Massachusetts , Capetown is in Africa ''
Her response - click.
3. A senior Vermont Congressman called, furious about a Florida package we did. I asked what was wrong with the vacation in Orlando .
He said he was expecting an ocean-view room.
I tried to explain that is not possible, since Orlando is in the middle of the state. He replied, 'Don't lie to me, I looked on the map and Florida is a very thin state!'' (OMG)
4. I got a call from a lawmaker's wife who asked, ''Is it possible to see England from Canada ?'' I said, ''No.'' She said, ''But they look so close on the map.'' (OMG, again!)
5. An aide for a cabinet member once called and asked if he could rent a car in Dallas . When I pulled up the reservation, I noticed he had only a 1-hour layover in Dallas When I asked him why he wanted to rent a car, he said, ''I heard Dallas was a big airport, and we will need a car to drive between gates to save time.'' (Aghhhh)
6. An Illinois Congresswoman called last week. She needed to know how it was possible that her flight from Detroit left at 8:30 a.m., and got to Chicago at 8:33 a.m. I explained that Michigan was an hour ahead of Illinois , but she couldn't understand the concept of time zones. Finally, I told her the plane went fast, and she bought that.
7. A New York lawmaker called and asked, ''Do airlines put your physical description on your bag so they know whose luggage belongs to whom?'' I said, 'No, why do you ask?'
She replied, ''Well, when I checked in with the airline, they put a tag on my luggage that said (FAT), and I'm overweight. I think that's very rude!'' After putting her on hold for a minute, while I looked into it. (I was dying laughing). I came back and explained the city code for Fresno, CA is (FAT - Fresno Air Terminal), and the airline was just putting a destination tag on her luggage.
8. A Senator's aide called to inquire about a trip package to Hawaii . After going over all the cost info, she asked, ''Would it be cheaper to fly to California , and then take the train to Hawaii ?''
9. I just got off the phone with a freshman Congressman who asked, "How do I know which plane to get on?'' I asked him what exactly he meant, to which he replied, ''I was told my flight number is 823, but none of these planes have numbers on them.''
10. A lady Senator called and said, ''I need to fly to Pepsi-Cola , Florida . Do I have to get on one of those little computer planes?'' I asked if she meant fly to Pensacola , FL on a commuter plane. She said, ''Yeah, whatever, smarty!''
11. A senior Senator called and had a question about the documents he needed in order to fly to China . After a lengthy discussion about passports, I reminded him that he needed a visa. 'Oh, no I don't. I've been to China many times and never had to have one of those.'' I double checked and sure enough, his stay required a visa. When I told him this he said, ''Look, I've been to China four times and every time they have accepted my American Express!''
12. A New Mexico Congress woman called to make reservations, ''I want to go from Chicago to Rhino, New York.'' I was at a loss for words. Finally, I said, ''Are you sure that's the name of the town?'' ''Yes, what flights do you have?'' replied the lady. After some searching, I came back with, ''I'm sorry, ma'am, I've looked up every airport code in the country and can't find a Rhino anywhere.' ''The lady retorted, ''Oh, don't be silly! Everyone knows where it is. Check your map!''
So I scoured a map of the state of New York and finally offered, ''You don't mean Buffalo , do you?'' The reply?
''Whatever! I knew it was a big animal.''
Now you know why the Government is in the shape that it's in! Could anyone be this DUMB?
YES, THEY WALK AMONG US, ARE IN POLITICS, AND THEY CONTINUE TO BREED!
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Thanks Larry for the good information. I will pass it along.
SEAL IT UP
Adding insulation can help lower energy bills, but more is needed to really reduce energy costs and improve comfort.
AN OUNCE OF PREVENTION .
One of the biggest mistakes that homeowners make is letting small problems turn into big ones.
HEATING EQUIPMENT IS A LEADING CAUSE OF FIRES
Proper use of supplemental space heaters is especially important to prevent fires.
TEST YOUR HOME OWNERSHIP IQ.
Do you know some of the basic terms used to describe home components?
QUESTIONS AND ANSWERS
This month's focus is on some common issues related to a home's plumbing system.
CONTACT INFORMATION: for the House master Inspector that I use…
YavaNino Home Inspections, Inc.
3030 S. Rural Road, Suite 109 Tempe AZ 85282 USA