HUD: New FHA loan limit takes effect Jan. 1

Beginning next year, homeowners with Federal Housing Administration loans will no longer be able to qualify for the $729,750 high-cost area loan limit.

Instead, the Department of Housing and Urban Development is implementing a rule passed a few years back that moves the agency's standard loan limit for high-cost areas down to $625,500 for all FHA loans.
The standard loan limit for areas where housing costs are low is expected to remain at $271,050, while the ceiling for FHA-insured reverse mortgages will stay at $625,500, HUD added.

The rule impacts all mortgage assignments issued on or after Jan. 1, 2014.
Approximately 650 counties will face lower loan limits when the standard takes effect, according to HUD.

HUD: New FHA loan limit takes effect Jan. 1

Big FHA changes this year in 2013!

Uncle Sam needs more money, so he’s hitting up FHA loans again. Here’s a break-down of the changes:

Big FHA changes this year in 2013!

Top 6 Most Popular Refinance Options

Top 6 Most Popular Refinance Options
 
HARP - For those people who are underwater (your loan amount is greater than the value on your home), the Home Affordable Refinance Program is an option that you can explore. It is a government instituted program to help those who are underwater on their homes to refinance.

FHA Streamline - Those who have currently been in an FHA  program and still have a high rate (above 4%), have found it beneficial to refinance under the same program into a lower interest rate, with one caveat; if your value on your home has gone up and/or the amount of your loan has been paid down considerably, it may be better for you to refinance into a Conventional loan.

VA Streamline - As with the FHA streamline, if your rate is above 4%, it could be beneficial to do a VA streamline program to get yourself a lower rate.

Lower Rate - If your rate is currently over 4%, then now would be the time to look into refinancing as we have been seeing a trend of rates rising.

Lower Term and Rate - You may be able to cut down your term and get a lower rate which could balance out to the same or even less of a payment than you are currently making.

Cash-Out - If you have equity in your home, you can get cash-out to reinvest into your home through upgrades, adding on rooms, etc., which will only make the value of your home go up even more as the values on homes are on the rise. It is estimated that values will go up by 7 to 12% by the end of the year and 36% over the course of the next 3-5 years.

If any of these are situations that you or someone you know has questions about, you can reach us at (941) 822-4696 or visit us on the web at www.KesslerHomeLoans.com . We would be happy to answer your questions and help in any way that we can. Have a great day!

Top 6 Most Popular Refinance Options

Getting Qualified for a Home Loan and being Self-Employed

It wasn’t too long ago that home loan officers could offer a so-called, “SISA” loan – which stood for, “Stated income, Stated assets.”  All a loan officer had to do was pull credit and make sure the borrower’s FICO score was decent, and they were off to the races!  As you can well imagine, those days are long gone.  Not only is SISA gone, but “No Doc” loans are gone too.  That is generally good news for responsible banking practices, but it can hurt self-employed borrowers with lots of legitimate write-offs.


Despite a radically different lending environment, it is still very possible for self-employed borrowers to qualify for a home loan.  Tax returns are still the gold-standard and necessary for underwriting, but that is something a highly qualified loan consultant can help you with.  If you’re a self-employed person applying for a loan, here are some things to keep in mind:

• If you are newly self-employed, you must have a two year history of self-employment before you can use that income to qualify.
• You will need to provide your last two years of Federal tax returns – business and personal.  Make sure you have K1′s available if you receive them.
• The chances are strong that you will also need to provide a YTD profit and loss statement along with bank statements to show that your business is stable.
• If your income has been declining, the underwriter will probably take a worst-case scenario calculation rather than an average of the past two years.
• Depreciation and depletion can usually be added back (because it is a non-cash expense), so if you are involved in a business with a lot of depreciating assets, this will help your qualifying numbers.
• If you have filed a tax extension we will need to see proof of the extension.
• If you have liabilities (such as a car payment) that are being paid by the business, if you have 12 months of cancelled checks to prove the business is paying, that liability can be removed so that you are not “double-dinged” for it.

There are many nuances to working through tax returns to help qualify self-employed borrowers, but it is totally doable for well-trained loan consultants.  If you have any questions, never hesitate to call us to talk it through or even get an analysis of your scenario.

Getting Qualified for a Home Loan and being Self-Employed

Buying a Home with only 3.5% down-payment

I run into a lot of folks who think they have to amass a huge down-payment in order to buy a home.  Nothing could be further from the truth.  With an FHA loan, you can put as little as 3.5% down – and with conventional you can put down as little as 5% if your credit is decent.  Take a look at how reasonable that number is relative to purchase price:

Purchase Price     3.5% Down

$150,000                  $5,250 down

$200,000                 $7,000 down

$250,000                  $8,750 down

$300,000                 $10,500 down

$350,000                 $12,250 down

$400,000                 $14,000 down

$450,000                 $15,750 down

$500,000                 $17,500 down

$550,000                 $19,250 down

$600,000                $21,000 down

$650,000                 $22,750 down

$700,000                 $24,500 down

$750,000                 $26,250 down

Think about that.  That gives you a lot of purchasing power!  You can even use gift funds towards the down-payment and non-occupying co-borrowers to qualify for the loan…  If you’ve been sitting on the sidelines because you don’t think you have enough saved up for a down-payment, think again.  There are many affordable options to consider.

Buying a Home with only 3.5% down-payment

Home Affordability Soars Again as 30 Year Rates Plunge Back Down to 3.99%

Home Affordability Soars Again
as 30 Year Rates Plunge

Back Down to 3.99%

There is good news for buyers and homeowners! Mortgage rates have plunged back down to 3.99% again on a conventional 30 year fixed mortgage rate, down from almost 5% from just over a month ago. The recent announcement by the Fed to NOT Taper their bond purchases, has resulted in mortgage rates dropping to a new 4 month low. So for any buyers who may have moved to the sidelines recently due to the spike in rates, they are getting a second chance to start looking again for that perfect home that was maybe unaffordable a month or two ago.

www.KesslerHomeLoans.com

Kessler Real Estate Financial Services - Meet the Team

Home Affordability Soars Again as 30 Year Rates Plunge Back Down to 3.99%

What is typically included in closing costs?

Recently I had someone ask me what they could expect in closing costs and they had a hard time understanding why certain costs were included and what the costs are exactly. This mostly explains what is itemized on the GFE or HUD-1. Whether you have to come out of pocket for any of these will depend on your specific situation, so keep that in mind while you are reading. In order to help others understand, here is a quick breakdown of what costs you may see on your Good Faith Estimate and Final HUD-1 Settlement Statement:

• Appraisal (up to $450) – This is paid to the appraisal company to confirm the fair market value of the home.
• Credit Report (up to $30) – A Tri-merge credit report is pulled to get your credit history and score.  You cannot supply your consumer pulled report and the scores pulled form the internet from any place other than myfico.com are not real scores nor are they accurate.
• Closing Fee or Escrow Fee (generally calculated a $2.00 per thousand of purchase price plus $250) – This is paid to the title company, escrow company or attorney for conducting the closing. The title company or escrow oversees the closing as an independent party in your home purchase. Some states require a real estate attorney be present at every closing.
• Title Company Title Search or Exam Fee (varies greatly) – This fee is paid to the title company for doing a thorough search of the property’s records. The title company researches the deed to your new home, ensuring that no one else has a claim to the property.
• Survey Fee (up to $400) – This fee goes to a survey company to verify all property lines and things like shared fences on the property.  This is not required in all states.
• Flood Determination or Life of Loan Coverage (up to $20) – This is paid to a third party to determine if the property is located in a flood zone. If the property is found to be located within a flood zone, you will need to buy flood insurance. The insurance, of course, is paid separately.
• Courier Fee (up to $30) – This covers the cost of transporting documents to complete the loan transaction as quickly as possible.
• Lender’s Policy Title Insurance (Calculated from the purchase price off a rate table. Varies by company) – This is insurance to assure the lender that you own the home and the lender’s mortgage is a valid lien. Similar to the title search, but sometimes a separate line item.
• Owner’s Policy Title Insurance (Calculated from the purchase price off a rate table. Varies by company) – This is an insurance policy protecting you in the event someone challenges your ownership of the home.
• Natural Hazards Disclosure Report - Required by law in the state of California for the seller to give the buyer.  Reports run between $90 to $150.  May be required by other states.
• Homeowners’ Insurance ($300 and up) – This covers possible damages to your home. Your first year’s insurance is often paid at closing.
• Buyer’s Attorney Fee (not required in all states – $400 and up).
• Lender’s Attorney Fee (not required in all states – $150 and up).
• Escrow Deposit for Property Taxes & Mortgage Insurance (varies widely) – Often you are asked to put down two months of property tax and mortgage insurance payments at closing.
• Transfer Taxes (varies widely by state & municipality) – This is the tax paid when the title passes from seller to buyer.
• Recording Fees (varies widely depending on municipality) – A fee charged by your local recording office, usually city or county, for the recording of public land records.
• Processing Fee (up to $1,000) – This goes to your lender. It reimburses the cost to process the information on your loan application.
• Underwriting Fee (up to $795) – This also goes to your lender, covering the cost of researching whether or not to approve you for the loan.
• Loan Discount Points (often zero to two percent of loan amount) – “Points” are prepaid interest. One point is one percent of your loan amount. This is a lump sum payment that lowers your monthly payment for the life of your loan.
• Pre-Paid Interest (varies depending on loan amount, interest rate and time of month you close on your loan) – This is money you pay at closing in order to get the interest paid up through the first of the month.
• Property Tax (usually 6 months of county property tax).
• Wood Destroying Pest Inspection and Allocation of Costs - If required by the lender or buyer, the inspection generally runs up to $125.00.  Repairs can get expensive if evidence of termites, dry rot or other wood damage is found.  example: Fumigation of a typical 1500 square foot house could run around $2,000.
• Home Owners Association Tranfer Fees - The Seller will pay for this transfer which will show that the dues are paid current, what the dues are, a copy of the association financial statements, minutes and notices.  The buyer should review these documents to determine if the Association has enough reserves in place to avert future special assessments, check to see if there are special assessments, legal action, or any other items that might be of concern.  Also included will be Association by-laws, rules and regulations and CCRs. The fee for the transfer varies per association ,but generally around $200-$300.

It is important to remember that you may qualify for a lender’s credit to make up for you having to come out of your pocket with any of these costs, but this is determined on a case-by-case basis. To get a free analysis of your specific situation, contact us for details.

What is typically included in closing costs?

It's a Great Day to Get a Mortgage Rate!

It's a Great Day to Get a Mortgage Rate! - CNBC



Source: CNCBC News

It's a Great Day to Get a Mortgage Rate!

Improved Equity Empowers Trade-up Buyers

Improved Equity Empowers Trade-up Buyers

Housing demand by trade-up buyers is rising as the home equity available to these prospective buyers is improving as foreclosures sales decline nationwide and are in high demand in many fast-rising markets.

Source: Real Estate Economy Watch

Improved Equity Empowers Trade-up Buyers

'Jumbo' Mortgage Rates Fall Below Traditional Ones

'Jumbo' Mortgage Rates Fall Below Traditional Ones

 As banks compete for affluent borrowers, an odd trend has emerged in the mortgage market: rates on loans for pricey homes -- "jumbo" mortgages -- have dropped below those for smaller mortgages.

...

Source: WSJ Live

Apply for your loan now at Kessler Real Estate Financial Services - www.KesslerHomeLoans.com

'Jumbo' Mortgage Rates Fall Below Traditional Ones

Credit reporting update will distinguish between short sales and foreclosures

A change in how distressed home sales are reported to federal mortgage backer Fannie Mae should make it easier for people who did a short sale to buy again faster.

Foreclosures are more financially damaging to a borrower’s credit than a short sale, but Fannie Mae didn’t have an automated way to differentiate between the two. This could be an especially important change in Florida where short sales made up 28 percent of all sales in June, according to RealtyTrac.

Typically, people who went through a foreclosure can’t buy again for seven years, while it’s just three years with a short sale.

 Sen. Bill Nelson, D-Fla., held a congressional hearing on the issue in May, urging the lending industry to update computer software used to report the distressed sales. “Regardless of the cause,

I’m glad Fannie Mae is fixing the problem,” Nelson said. “You can’t punish homeowners who went upside down solely because of the economic downturn and loss of value in their home.”

The change should begin in November.

Credit reporting update will distinguish between short sales and foreclosures

Mortgage Rates Holding Steady.

Mortgage Rates Holding Steady.

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