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Posts Tagged ‘Mortgages’

New “Quality” Guidelines for Fannie Mae Mortgages

I recently received the following doc from William Raveis Mortgage Company* regarding the new guidelines that went into effect on 6/1/20.

As you’ll see there are some new pieces of documentation that will be required for all FNMA loans. These are being adopted by Secondary Market Investors.

This does not necessarily mean that it will be harder to get through the mortgage process.  It does mean that you should be very vigilant in discussing ALL aspects of getting your loan with your lender.   Being prepared lessens the chances of last-minute surprises.

*William Raveis Mortgage Company is an affiliated company owned by the brokerage I work for – William Raveis Real Estate.

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Rick Schwartz,   REALTOR

Homes for sale in Danbury, Bethel, Brookfield, Newtown, New Fairfield, New Milford, Ridgefield and Redding CT.

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When is a Seagull like buying a house?

1/31/10

Updating an old post from about a year ago.  This is actually more timely than ever due the April 30th deadline for finding a house under the Expanded Home Buyer Tax Credit.

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I heard an interesting parabolic riddle (I always wanted to say that) by an author on one of the morning television shows today. I was also on the phone, tripping over the dog’s water bowl and trying to make breakfast at the same time so I didn’t catch the name of the man who was talking. When my brain processed it a little later on it really struck me though.

If there are four seagulls sitting on piece of driftwood and one of them decides to fly away, how many are left on the driftwood?

The answer is four. DECIDING to fly away is not the same as actually making the flight.

It’s really the same with a lot of folks today who are looking at houses. We all know this is a buyer’s market and a lot of people are taking advantage of it to get some of the great bargains that are out there. There are lot of folks I talk to though, who have made the decision to buy but they are waiting: for prices to bottom out, mortgage rates to drop below the historic lows that we have right now, or they keep hoping that the next new listing that comes on the market will be the perfect home.

The fact is that it is only a buyer’s market for those folks who actually buy a house. At some point, prices will go flat and then rise, mortgage rates will go up, and there will be fewer houses on the market to choose from. Nobody knows when these things will happen.

The simple truth is that the stars are aligned pretty nicely – right now – for qualified home buyers. So if you’ve made a decision to partake in the buyer’s market, there’s no time like the present.

Home Valuation Code of Conduct

May 6, 2009 1 comment

Effective on May 1, 2009 there is yet a new wrinkle involved in buying a home – specifically in the process of acquiring a mortgage. It is the HOME VALUATION CODE OF CONDUCT.   Although just now put into effect, the plan was developed in March and April of 2008.

The rationale behind this is to protect consumers and to help prevent inaccurate home appraisals that could over value a home which some believe to have been a factor in the current housing slump. Not everyone agrees that this will be of value, in fact, many believe it could slow down the process, and could even prevent some folks from getting loans that they otherwise might qualify for.

The code has a number of components but the big “new” thing is that in a lender’s organization the “Loan Production Staff” will not be involved in the selection of an appraiser. Basically it is creating a stronger division between the lender and the appraiser.  The appraisal will be ordered and the appraiser selected by a new entity called an Appraisal Management Company  – AMC.   Your loan officer, will have to pick up the phone and contact the AMC who will then select and order an appraisal.  Prior to HVCC, the  loan officer would order the appraisal directly from a local appraisal company.

The fear (isn’t everything based on fear these days) is that the appraiser, who is an independently licensed professional, could, in theory, be influenced by a lender to place a value on a home that is higher than it should be in order to match the selling price – thus making for a smoother loan approval process but, if this happened, could put a home buyer into a home that he purchased higher than the market value.

There is no evidence of any widespread fraud in the marketplace – this is just one of the new pieces of tighter control of the mortgage market being put in play. Whether we agree with it or not, it is now a factor in the process. You can read the details of the HVCC by clicking here.

Homebuyer Tax Credit Passes Senate

February 5, 2009 Leave a comment

The Senate last night passed an expansion of the tax credit proposal. The proposal would be available to all purchasers (not just first-time homebuyers). The key elements are:

• A tax credit in the amount of $15,000 or 10 percent of the purchase price (whichever is less), with the option to utilize all in one year or spread out over two years

• The tax credit is available to all purchases of any home from date of enactment for one full year. Able to claim the credit against the 2008 tax return

• Buyers must occupy the homes for two years as their principal residences

• Purchases of homes by investors are ineligible

• Terminates the previous $7,500 Housing Tax credit on the date of enactment

Sources indicate that the Senate is likely to pass its entire Stimulus Bill by this week-end. The House and Senate will then have a conference next week to work out the differences.

Home prices will stabilize in 2009 and then rise – or they won’t!

December 27, 2008 Leave a comment

Recently the number of times people ask me what the housing market is going to do in 2009 has increased.  It seems that is the number one thing to ask when speaking with a Realtor these days.

It’s no secret that if more people get mortgages they can afford and purchase houses, it could be the beginning of the fix for all things economic.

It’s also no secret that a lot of potential home buyers are waiting – for that single moment when prices have fallen to the lowest possible level so that they won’t buy a home only to have the value go down.

It’s also no secret that prices will stabilize when the home buyers start buying homes because inventory will go down, reversing the supply and demand direction.

So what’s going to happen?

From what I can see, the dam of people who need to buy homes has to start flowing soon.  After all, people who started shopping for homes did so for a reason.  At some point that reason becomes more urgent.  Maybe it’s a growing family – or a longer commute, or the waste of renting for those who qualify for mortgages.

At some point, folks who have been waiting – will make the decision that they’ve waited long enough and they will then make the decision to move ahead.  That will start the flow, and the cycle will be back in the direction we all love – up!

Prices are low, mortgage rates are low, selection is large, this is the time to buy.

SHOW ME THE MONEY

December 22, 2008 Leave a comment

So there’s this article on Fox News this morning asking the question that everyone seems to be asking. How are the banks spending the money that they’ve been given so far from TARP. Keep in mind that TARP stands for Troubled Asset Relief Program. The idea is that the banks would use the money to somehow offset the bad loans they made, giving the debt holders some relief – the plan being to get the money back into the economy so things will pick up all over.

Until the banks are given some relief and then pass it along to homeowners in trouble, we will still have a glut of housing inventory which continues to push prices down and causes the housing market to stay stalled – which, of course, stalls the entire economy.

According to this article, some of the banks won’t answer (or don’t know) where the money went. Interesting reading.

I hope that the new administration demands answers and takes the money back if it’s not being used the way it’s supposed be used.

Can I add the cost of renovations to my mortgage?

So you’ve been looking and looking for a home and you finally found one that you think will work for you and your family.  It has the right number of bedrooms and  bathrooms. The kitchen is a decent size. It’s in a good location. It has that fireplace you’ve always talked about and the yard is really nice. So what’s the problem?

The driveway is, well – non-existent really. It is rutted dirt and rocks and since you don’t drive a hummer, you will likely scrape the bottom of your car every time you come in or out. The kitchen, while spacious, has appliances, a floor and counter tops that look like they were picked out when June and Ward Cleaver were buying their first home. (For you younger folks, that’s a reference to a 1950s sitcom). The carpeting in the living room is a 1970s Rya Shag which you think is probably hosting an entire population of very small vermin. To top it off the central air, while functioning, appears to be on borrowed time.

All of these things, you decide, are fixable and do not really detract from the long-term desirability and functionality of the house. It’s just that once you move in, you won’t likely have the money to update and replace any of those things for years.

Good news! In many cases, based on your specific situation, you may able to borrow money right in your primary mortgage above and beyond the purchase price of the home so that you can fix things up.  There is a program from the U.S. Dept of HUD called 203(K) that lenders may allow you to take advantage of. It helps home buyers finance money above their purchase price in order to improve or upgrade their new home.

There are some limitations (of course) but typically it’s pretty liberal. The maximum amount you can borrow above the purchase price is $35,000. Basically it’s about improvements that will become a permanent part of the property – with the major exception of structural changes – for example you can gut and update a bathroom or kitchen but you probably cannot put an addition on the house to add an additional bathroom or expand the kitchen.

Here is a link which will give you  details – but if you think this is something you want to do, you must discuss it with your lender as to how it applies to your individual situation.

Good Luck and PLEASE BE CAREFUL with tools!!!!