Are You A Florida Real Estate Speculator Or Investor?
By · CommentsGreat fortunes can be made and lost in Florida real estate. Speculators are generally prepared to take on more risk and usual have a short-term strategy. Investors tend to have a long-term approach, which tends to minimize the risk. A Certified Mortgage Planning Specialist is committed, qualified and equipped to help you implement the seven keys to profitable real estate investment:
Key 1 – Determine Level of Liquidity - liquidity is the ability to quickly convert an investment into cash, without losing any of the principal that you’ve invested. For example, a savings account is highly liquid. In contrast, real estate is considered to have low liquidity because of the time it takes to sell the property and the unpredictability of the market value at the time you are ready to sell. The greatest real estate fortunes have been lost by those who overextended themselves and didn’t have enough liquidity to weather the ups and downs in the Florida real estate market. A CMPS professional can help you implement strategies to maintain high levels of liquidity to be able to weather the storms in the marketplace and take advantage of profitable investment opportunities.
Key 2 - Determine Level of Marketability - marketability is the ability to convert an investment into cash quickly, at any price. For example, stocks can be sold anytime on an organized stock exchange at the prevailing market value. However, the price at which the stock is sold can produce a loss for the investor who is selling the stock. With real estate, not only will you need to deal with market conditions, there will be real costs to consider whenever you sell a property, such as brokerage fees, marketing fees and title insurance. A CMPS professional can help you invest with a business plan and avoid the marketability risks associated with real estate speculation.
Key 3 - Determine the Impact of Leverage - leverage is the use of borrowed funds to finance a portion of the purchase price of an investment. The ratio of borrowed funds to the total purchase price is known as the loan-to-value (or LTV) ratio. A high LTV would result in high leverage, while a low LTV would result in low leverage. Florida real estate investments can be more leveraged than most other types of investments. Sometimes, mortgage debt results in ‘negative leverage’. In this case, you should avoid mortgage debt or sell the investment. Other times, mortgage debt results in ‘positive leverage’ and can enhance your rate of return on investment. A CMPS professional can help you avoid the trap of negative leverage while maximizing the benefits of positive leverage.
Key 4 - Evaluate the Investment Management Issues – there are really two levels of monitoring and managing a real estate investment:
- Asset Management - this is where you monitor the financial performance of the investment and make changes as needed. With stocks and bonds, you consult with an investment advisor, and/or a CPA to determine when to buy and sell investments. With Florida real estate investments, A Certified Mortgage Planning Specialist is qualified to serve as Florida real estate investment advisor and give you solid advice in this area.
2. Property Management - involves the overall day-to-day operation of the property and the physical maintenance of the building or buildings. Property management can include rent collection, paying the taxes, insurance and utilities, the exterior maintenance such as landscaping, snow removal and roof issues, as well as interior maintenance such as plumbing, painting, flooring, walls, kitchens, etc. Property management can become a huge trap for you if you don’t give it the proper evaluation prior to purchasing an investment. Obviously, unless you want to fix leaky toilets and gets calls from tenants at all hours of the night, you should seriously consider engaging in a professional relationship with a management company. Remember, time is money. If you want to make money in Florida real estate, don’t waste or lose your time, as you are in effect losing money.
Key 5 - Consider the Tax Impact of Your Investment Decisions: This includes such issues as: Classifications of passive, active and portfolio income and losses, Capital gains taxes, Income taxes, Tax Credits, Tax deductions and Tax Deferments. A CMPS professional can help you determine your before and after-tax rate of return on real estate investments. A CMPS professional will also work with your CPA in determining the best tax strategies for your situation.
Key 6 - Evaluate and Reduce Investment Risk - risk is the possibility of losing either the principal invested and/or the potential income from the investment. A CMPS professional can help you reduce investment risk in several ways:
- Risk Analysis – This is the process of evaluating alternative investments based on their level of risk. Risk analysis can be done using industry accepted rates of return and allowances for risk, or on an individual basis. Each investor has a different tolerance for risk, depending on their tax status, capacity for leverage and personal financial situation. For example, if you can earn 15% per year on a investment with a tenant who signs a five year lease, versus 20% per year on an investment with a tenant who signs a two year lease, is it worth the extra risk of not having a tenant after two years?
- Shifting risk – Work with a professional Realtor to help you structure your leases and rent agreements to shift the exposure of increasing costs to the tenants. This can include shifting the risk of rising interest rates, operating expenses or tax increases.
- Due diligence prior to purchasing an investment property – This is the process of examining a property and related documents i.e., appraisals, inspections, environmental surveys, title work, rent rolls, etc. to reduce risk. Your professional Realtor can help you apply a consistent standard of inspection and investigation. This will help you decide if the property meets your investment objectives or whether you should move on to the next deal.
Key 7 - Investing with the right entity – A CMPS professional is qualified to work with your real estate attorney to help you structure different ‘entities’ such as LLCs, Partnerships and Corporations to limit losses to your initial capitalcontribution into the investment.
Always remember the golden rule of investing … “ Diversification “.
Investing in multiple investment properties with varying risk levels reduces the chance that all the investments will be affected by the same turn of events. By keeping all your Florida real estate equity in your primary residence, you are not diversifying your real estate portfolio. On the other hand, if you spread your Florida real estate equity and investment dollars over multiple properties, you would be hedging your Florida real estate risk and diversifying your portfolio. On the same token, you need to be careful not to spread yourself too thin and not to invest without a business plan. If you end up with 10 mortgage payments on 10 vacant properties with no tenants, you would most likely end up in a very precarious financial situation. A Certified Mortgage Planning Specialist can help you diversify your investment portfolio to include Florida real estate while also diversifying your Florida real estate investment portfolio itself.
What Happens to Florida Home Loan Rates From Here?
By · CommentsWhere Are Florida Home Loan Rates Headed, Up Or Down?
The most recent economic data would suggest that Florida home loan rates are poised to move up from their current lows. Existing home sales in April showed a 7.6% gain in April. Single family home sales rose 7.4%, while condominium sales jumped 9.1% for the month. Regionally, home sales in the South were up 8.6% from March and 23% higher on a year-to-year basis.
Housing analysts have been predicting Florida home loan rates to gradually rise to 6% by year end, as the economy begins to recover and government support for low interest rates wane. The recent release of Consumer Confidence numbers far exceeded market expectations. This was the highest reading in over two years and indicates that consumers are much more optimistic about their own financial situations than many had thought. This is bad news for the bond market and mortgage rates because it means that consumers are more willing to spend, which causes inflation worries and high Florida home loan rates.
Now that Tax Credits for home buyers are gone and new banking and financial regulation is on the horizon, I anticipate Florida home loan rates to stay low for an extended period. New tougher financial regulation will make loans to consumers more expensive due to costs that will be imposed on the banking industry. Again, this would suggest higher Florida home loan rates.
So, how is it possible that Florida home loan rates will remain low when the economy seems to be gaining some momentum, Consumer spending has increased and Consumer confidence is on the rise? These signs all point to higher Florida home loan rates.
Florida home loan demand will remain weak. Recent data from the Mortgage Bankers Association showed that demand for home loans fell to a 13 year low after the expiration of the Home Buyer Tax Credit. The current pool of First-time buyers and move-up buyers is very shallow. Most banks are reporting weaker demand for loans from both consumers and businesses.
Weak employment and an uncertain economic environment will keep Florida home loan demand low. The Federal Reserve won’t be raising interest rates any time soon and Florida home loan rates may be pressured even lower, until employment growth becomes a sustained trend.
Cheapest Florida Home Loan For Buyers
By · CommentsWhat’s the Best Fort Lauderdale Mortgage for Buyers?
If you are looking for a Ft Lauderdale mortgage and are on a tight budget, an FHA mortgage has traditionally been the most cost effective Florida home loan for buyers. The combination of a low 3.5% down payment, the seller being able to contribute up to 6% of the purchase price toward closing costs and the allowance of 100% gift funds has made an FHA mortgage the best Fort Lauderdale mortgage choice for many buyers.
Now there may be a better and more cost effective Florida home loan that is currently flying below most home buyer’s radar. The best Ft Lauderdale mortgage option may now be Fannie Mae HomePath financing.
A Fannie Mae HomePath mortgage is special financing only offered to purchase a Fannie Mae foreclosure property. Fannie Mae HomePath financing is available with as little as a 3% down payment. A Fannie Mae HomePath Fort Lauderdale mortgage has several advantages over a traditional FHA mortgage.
- Slightly lower down payment option.
- No mortgage insurance required.
- No appraisal required.
- Seller contribution up to 6% allowed (FHA will be reducing allowed seller concessions to 3% in the near future)
- Buyer can purchase a Fannie Mae HomePath property as a second home with a 10% down payment or even an investment property with a 15% down payment.
A Fannie Mae HomePath Ft Lauderdale mortgage is available in two varieties. Buyers can obtain a regular Fannie Mae HomePath loan to purchase their Fannie Mae foreclosure as is, or some Fannie Mae HomePath foreclosures have been designated as eligible for a Fannie Mae HomePath Renovation Loan. This special financing will allow a buyer to obtain a Fort Lauderdale mortgage to acquire and renovate a Fannie Mae foreclosure.
To find a Fannie Mae foreclosure to purchase visit their website at http://www.HomePath.com. When you find a property you are interested in, there will be a Fannie Mae HomePath mortgage logo next to the property. If the listing just shows Fannie Mae HomePath mortgage, then it’s only available to finance “as is”. If it shows the logo above, which includes the Fannie Mae HomePath Renovation Loan, then it is eligible for the special financing to renovate the property.
Once you’ve identified the Fannie Mae foreclosure you are interested in purchasing, your best Florida home loan option may just be a Fannie Mae HomePath mortgage or a Fannie Mae HomePath Renovation Loan.
First Trust Mortgage is an approved Fannie Mae HomePath mortgage lending source. First Trust Mortgage offers both types of the Fannie Mae HomePath mortgage. When you’re interested in the most cost effective ways to purchase a home and to finance it with a Florida home loan, get your best Fort Lauderdale mortgage options from First Trust Mortgage and Harvey Collier. Call today, 954-629-6151 for all your Fannie Mae HomePath mortgage choices.
So much has changed in the Fort Lauderdale mortgage environment over the past few years that I constantly find myself double checking underwriting guidelines before responding to the dozens of questions I receive each day. Many of the questions come from First-time buyers looking for suggestions about how they can qualify for a larger mortgage to get a home with an additional bedroom, garage, pool, better neighborhood, or many other factors that drive buyer needs and wants. These days, as a Fort Lauderdale mortgage broker, I’m very hesitant to let a First-time buyer over purchase, as I fear they could be one pay check away from disaster.
However, there are times that circumstances beyond the buyers control prevent them from qualifying for the Fort Lauderdale mortgage they can actually afford. As obvious as it may seem, a Fort Lauderdale mortgage co-signor is a viable option that should be explored. The part that’s not so obvious is how will FHA, Fannie Mae and Freddie Mac guidelines allow a co-signor to help a buyer purchase a home?
Conventional Loans (Fannie Mae and Freddie Mac) and FHA loans have different rules for using a co-signor to qualify for a Fort Lauderdale mortgage. Conventional guidelines are more restrictive and still rely mainly on the primary borrowers ability to qualify. You might say a Conventional loan co-signor can help a not so strong borrower get over the fence, but they can’t do all the qualifying. FHA guidelines are much more liberal, as a co-signor is allowed to bring more to the table. Here are the major differences:
- Conventional loans over 80% loan-to-value require all co-signors to occupy the home as their primary residence. FHA allows a co-signor to be a non-owner occupant and not reside in the property, as long as they are a blood relative or have a long standing family-type relationship with the borrower. Otherwise, FHA limits loan-to-value to 75%.
- Conventional loans less than or equal to 80% loan-to-value require the the occupant borrower not to exceed a 43% total debt ratio on their own. FHA does not require a stand alone ratio for the primary borrower and co-signor can have all the income.
- Conventional financing usually requires the borrower to have 5% of their own funds to contribute to the down payment. FHA financing allows the co-signor to contribute all funds if necessary.
Here are some additional misconceptions that you need to understand and be aware of:
- A co-signor will not help when the primary buyer has substandard credit. Conventional and FHA Fort Lauderdale mortgage loans require a minimum 620 credit score for all borrowers on the mortgage.
- Conventional and FHA guidelines both have some minimum credit requirements. Conventional loans require a minimum of five pieces of credit with a 24 month history for all borrowers. FHA requires a minimum of three pieces of credit with a 12 month history and in some cases you can create an alternative credit file with letters from rental payment, utilities, phone, cable, etc.
Responsible lending requires a Fort Lauderdale mortgage broker to determine when a co-signor is appropriate for the transaction. A co-signor can be a great tool to help a family member or key employee purchase a home. What’s really important is that the borrower can truly afford the home and isn’t buying over their head. Using a co-signor to help qualify for a Fort Lauderdale mortgage can be a great strategy when used in a responsible manner.
Ten Tips To Save For A Low Down Payment Mortgage
By · Comments10 Sure Fire Ways to Spend Less and Save More
Saving money for a home down payment doesn’t have to be painful or difficult. You can purchase a home with an FHA Fort Lauderdale mortgage with only a 3.5% down payment. It just takes planning, discipline and most of all, an awareness of how you spend your money. Just like going on a diet, it won’t work if you deprive yourself of everything you enjoy. It’s important to focus on the larger goal of owning your own home, so you don’t resent having to trade off some activities or meaningless desires to save a few dollars each month.
Here are ten tips you can use to help you save for a low down payment FHA Fort Lauderdale mortgage:
1.) Start an automatic savings or investment plan with a bank, a mutual fund or your retirement plan at work so money is taken off the top of your paycheck, before you see it or spend it.
2.) Deposit your paycheck directly into your savings rather than into your checking account. You can transfer money to pay your bills, but you’ll think twice about withdrawing additional cash.
3.) Limit yourself to one ATM withdrawal per week, and make your cash last.
4.) Subtract credit card purchases from your checking account immediately so you’re not surprised when the bill arrives.
5.) When you subtract a check from your account, round the amount up to the next dollar. That way, you’ll always have a slush fund.
6.) Can’t decide whether to buy something you’ve seen at a store? Give yourself a cooling-off a 24-hour cooling-off period. Chances are you won’t go back.
7.) Buy a couple of storage bins- even a shoebox will do- into which you can toss credit card and ATM receipts. That simple step will help you get organized- and give you a visual record of your spending.
8.) Toss spare change into a jar on your desk or dresser. You’ll watch your money grow to hundreds of dollars a year, which you can deposit into your savings account.
9.) Each time you resist the temptation to buy a latte or go to a movie; put the money you would have spent into your cash jar. It’s an immediate reward for self-discipline.
10.) Once you finish paying off a loan or credit card balance, keep making payments and put the money in a savings or investment account.
Follow these easy steps and you’ll be surprised how quickly your savings account grows. Remember, keep your goal of home ownership clearly in your sights and you’ll have your FHA Fort Lauderdale mortgage down payment saved before you know it.
“Household Reaction to the Financial Crisis”
The Mortgage Bankers Association recently commissioned a study to look into how Americans will be affected by the current economic crisis, as it relates to consumer attitudes about spending, saving, retirement and the economic recovery. The study was titled “Household Reaction to the Financial Crisis”. The sub-title appropriately read, “Scared or Scarred?”.
The research was completed by The Research Institute for Housing America. There findings stated, “While Americans and the economy are noted for their resilience, the current financial crisis and recession exceeded devastation created by all other post-World War II recessions. Savings rates have risen substantially and many Americans will continue to cut their spending sharply out of necessity, others out of fear of what the future holds. Since consumers account for two-thirds of GDP, we are facing the “paradox of thrift” as households try to rebuild their net worth. Reduced spending will likely delay and weaken the recovery, as consumer attitudes make startling changes.”
How will these attitude changes affect Home Buyers? The Fort Lauderdale real estate market along with many other areas of the country are unlikely to see a dramatic downturn of Fort Lauderdale foreclosures, loan delinquencies and bankruptcies. The unemployment situation and home prices are likely to remain depressed, while delinquent mortgages will continue to restrain lenders willingness and ability to provide credit.
The study was very sobering, as it predicted further cutbacks in consumer and business spending that would further under mind the recovery. One of the biggest take-aways from the study revealed that such strong headwinds to an economic recovery are likely to have lasting implications on the values and behavior of the current generation, much like the “Great Depression” had on its generation.
Another key point of the study revealed underemployment is much higher than the reported unemployment rate and the length of joblessness spells are getting longer. The report stated that people entering the labor force during recessions have lower lifetime incomes. Without a reasonably rapid recovery in employment, which is very doubtful at this point, there is a risk we will create a “lost generation” that may never catch up.
Fort Lauderdale realtors, Fort Lauderdale mortgage brokers and agents around the country will need to recognize and adapt to the “winds of change” this phenomenon will bring to the Fort Lauderdale FL real estate market. The severity and havoc caused by the recent financial crisis far exceeds what we experienced in past recessions. This has resulted in the disruption of millions of American lives.
We won’t fully know the full impact of these events yet, but it’s reasonable to expect that we will need to prepare for a world and local real estate market that will be irrevocably changed by this experience. For the reasons discussed in this study, Fort Lauderdale realtors and Fort Lauderdale mortgage brokers should expect hesitant Home Buyers, cautious businesses and conservative lenders in the years ahead.
Now is the time to recognize and adjust to these attitude changes. Home Buyers in the years ahead, will require more patience, understanding, education and convincing that home ownership is worth the risk and the investment.
How To Sell More Fort Lauderdale Homes
By · CommentsA Great Strategy to Sell Homes in 2010
If you watched HBO’s “Entourage” over the last few years, you might have seen Martin Landau as Old-school movie producer Bob Ryan, who has the habit of phrasing things as rhetorical questions: “If I told you there was a way to make a hit movie on a shoestring budget and get nominated for an Oscar for Best Picture, would that be something you’d be interested in?
Well, if I show you a way to get your listings moving and help your sellers avoid even deeper cuts to their asking prices, qualify more potential buyers and make you look like a hero by getting their property sold, is that something you would be interested in? If your answer is “Yes”, then meet Harvey Collier and the “Maximized Seller Buydown”, a new twist on an old concept that can brand you as one of the consummate Fort Lauderdale Realtors and the go-to Real Estate professional in your marketplace.
The “Maximized Seller Buydown” is a really simple idea that is best illustrated by an actual case study. I was recently involved in a Fort Lauderdale mortgage transaction with past clients whose house had been on the market for seven months and had already reduced the asking price by $80,000. Having a need to sell and as a result of the slow market, their agent was recommending they reduce their price by another $20,000. They called me to see if refinancing and taking their home off the market was a more viable option. I told them that due to the pullback in home prices over the past two years and the more restrictive lending policies, refinancing wasn’t an option for them. However, I related to them another strategy that might help them and their Fort Lauderdale Realtors sell their home without reducing their price another $20,000.
Instead of discounting the price $20,000, (which was currently at $300,000) the seller offered a sales concession of $17,800 to provide the buyer a special financing package including; a temporary buy down with a start rate of 3% the first year, 4% the second year, then graduating to 5% after two years and paying their closing costs. This would result in a lower payment that would qualify more buyers for the property and save the purchaser over $5,700 in cash at closing. The sales price would not be discounted further, saving the nearby comparable values and easing the concerns of the neighbors, while allowing their Fort Lauderdale Realtors to earn a larger commission based on the higher sales price. With a 20% down payment, the buyer would save $276.00 per month the first year, $142.00 per month the second year on their Fort Lauderdale mortgage. That’s an average payment savings of $209.00 per month over the first two years or over $5000.
Wait, it gets better, as they actually save $16,172.00 in total cost, as the buydown also provides a more aggressive pay down of principle that results in a lower ending mortgage balance. If the seller had reduced their price by $17,800 and a buyer financed 80% of the purchase price they would only save $76.00 per month, or $1800.00 over the first two years and would still be out the closing costs of $5,700. If that’s not enough, the buyer’s Fort Lauderdale mortgage actually gave them an extra tax deduction for the cost of the buydown the seller paid for (this amounted to an additional $2700 savings). The seller not only received a higher net on the transaction, but just as importantly sold the home quickly – just three weeks from the date they started marketing this “Maximized Seller Buydown Strategy”.
Builders have used this strategy for years and their problems are similar to other sellers out there. They can’t afford to sabotage the values in their own neighborhoods by slashing prices, so they use interest rate buydowns, free upgrades, or both to attract buyers. This powerful strategy has the potential to start things moving again in this shell-shocked real estate market. It can potentially elevate your career by showing buyers and sellers how they can benefit from this strategy. It will portray you as an out-of-the-box Fort Lauderdale Realtor that can make deals happen even in a difficult market.
Once again, if I can show you a way to stand out from the crowd and gain market share in a down market, is that something you would be interested in? If the answer is “Yes”, then give me a call and let’s get a Fort Lauderdale mortgage buy down strategy working for your sellers and buyers.
What Will Take The Place of The Home Buyer Tax Credit?
By · CommentsNew Perks Will Replace Home Buyer Tax Credit
Tonight’s expiration of the Home Buyer Tax Credit has many Fort Lauderdale Realtors and Agents around the country concerned about what’s next for real estate sales. The big question is whether or not demand for homes will wane without Government subsidies. Fort Lauderdale Realtors have been asking if the Home Buyer Tax Credit will be extended. The answer is –short of a housing collapse, no further Government incentives are planned or being discussed.
So, what will drive housing sales going forward? What about all the distressed property inventory still in the pipeline that will be added to the available inventory? Will home sales slow like auto sales once the incentives to purchase a home disappear?
The expiring credit—which gives first-time homebuyers and some current homeowners a tax credit of up to $8,000 if they sign a contract by midnight tonight and close the sale by June 30—has been widely viewed as helping boost home sales in recent months.
For that reason, some Fort Lauderdale Realtors and real estate firms around the country are not waiting to find out. Agents are being proactive and advising their home sellers to offer incentives of their own. Home sellers are being encouraged to use a variety of incentives to motivate buyers to purchase their home. Commonly, the homeowner agrees to refund some portion of the purchase price to the buyer to induce them to purchase. Some developers and builders are offering similar refunds to buyers of new homes or condos. Fannie Mae is currently offering a 3.5% appliance or closing cost incentive to purchase one of their foreclosed properties with a HomePath Loan.
Common sense tells us the usual way you motivate people to buy is to drop prices, but what do you do when the house is already well priced? The answer is create more value for the home by offering other incentives like new appliances, prepaid homeowner fees, closing cost credits, interest rate buy downs, club memberships, cruises, or anything else you can think of to motivate a buyer to purchase your home instead of your neighbors.
Fort Lauderdale Realtors will need to help sellers come up with creative ideas to keep home sales moving forward. People have a hard time resisting something that is free. Add value to your offer and you might just create the right incentive to place a “Sold Sign” on the property and keep the housing market moving ahead at the same time.
Whether you are a Real Estate professional or a home seller, contact your Fort Lauderdale mortgage broker, Harvey Collier for financing incentives to sell your home or listing.
Will FHA Require Higher Down Payment?
By · CommentsFHA Down Payment Increase Voted Down
In an effort to restore funds to the FHA Capital Reserve Fund, the House Financial Services Committee met to discuss raising the monthly premium on FHA mortgage insurance from the current level of .55 percent of the loan amount. To bolster the FHA Fund, a request was made earlier this year to increase FHA mortgage insurance premiums in an effort to build up its depleted capital reserves. When Congress created the Federal Housing Administration, it passed a law that FHA must maintain capital reserves of at least 2 percent of the loans it insures.
Last year, FHA announced that its current capital reserves were at .53 percent, well below what the law requires. On April 9th, FHA took the first step to recapitalize the fund by increasing the upfront mortgage insurance premium from 1.75 percent of the loan amount to 2.25 percent. The Congressional Budget Office estimates this will add close to $2 billion to the fund over the next few years.
Today, the House Financial Services Committee approved an increase to the FHA mortgage insurance monthly premium. The Federal Housing Administration plans to gradually increase the monthly FHA mortgage insurance premium from the current .55 percent to 1.50 percent. If Congress passes this bill, then FHA mortgage insurance costs will slowly adjust downward for upfront premiums and begin to increase more to the monthly premium to reduce the cost of the loan to the borrower
Most importantly, the Committee voted down a proposal sponsored by (R-NJ) Scott Garrett. This proposal would have increased the required down payment for an FHA insured loan from 3.5% to 5%. Additionally, it would have totally eliminated seller paid closing costs for a FHA transaction. Garrett has another proposal that will be presented to the Committee that would prohibit the buyer from financing the upfront FHA mortgage insurance premium into the loan amount. This would result in the buyer needing more cash to close on a loan with FHA mortgage insurance. Let’s hope the Committee vote on this one goes the same way.
If Congressman Garrett’s proposal had been passed by the Committee, it would have serious negative implications on an already fragile housing market. This would raise the bar significantly for buyers and require them to have much more of their own cash to purchase a home. Historically, loans with FHA mortgage insurance represented a small percentage of the total mortgage loans originated each year. The mortgage meltdown forced FHA to increase its loan volume and support for the housing market, as low down payment alternatives disappeared from the Conventional loan market. Mortgages with FHA mortgage insurance now stand at 25 percent of the total loan volume being originated. It also represents a much higher percentage of first-time buyer loans.
Maintaining low down payment and affordable loan products are not only FHA’s mission, but a vital part of the housing recovery. FHA mortgage insurance and a healthy capital reserve fund is what makes it all possible.
Fannie Mae Extends Incentives For HomePath Purchases
By · CommentsUse Fannie Mae HomePath Financing to Renovate a Lauderdale Foreclosure
Fort Lauderdale Realtors that haven’t discovered Fannie Mae HomePath properties and financing are missing out on a great opportunity. Fannie Mae markets its foreclosed property under the HomePath brand and even has special HomePath Financing to help complete the sale. Fannie Mae lists Lauderdale foreclosures with local Fort Lauderdale Realtors. HomePath Financing is available through selected banks and your locally approved Fort Lauderdale mortgage broker.
Fannie Mae announced today that it is extending its HomePath buyers incentive program until June 30, 2010. Buyers that purchase a Lauderdale foreclosure that is a HomePath property are eligible for a rebate of 3.5% of the purchase price. This incentive can be used toward closing costs, a choice of selected Whirlpool appliances, or a combination of the two.
Fort Lauderdale Florida Real Estate has more than its share of foreclosures. A buyer looking for a Lauderdale foreclosure with an excellent financing option would be well served to begin their search with a HomePath property and special HomePath Financing.
Fort Lauderdale Realtors can sign up with Fannie Mae HomePath to list these properties in their local market. Buyers can search for a Lauderdale foreclosure on-line at www.HomePath.com and find some very well priced Lauderdale homes with low down payment financing options.
Special HomePath Financing includes several benefits:
- Fixed or adjustable rate mortgage programs available.
- Available to owner occupants and investors.
- Credit scores as low as 660.
- Low down payment options down to 3% for owner occupants and 10% for investors.
- Gift funds acceptable for down payment
- No mortgage insurance required.
- No appraisal required.
- Up to 6% seller concessions allowed.
In addition to special HomePath Financing, Fannie Mae offers a HomePath Renovation Loan for some of its Lauderdale foreclosures. The HomePath Renovation Loan allows Fort Lauderdale Florida real estate buyers to purchase Lauderdale foreclosures and incorporate some repairs or upgrades into the mortgage financing. The ability to build-in improvements into the mortgage without a large out-of-pocket expense, makes the Fannie Mae HomePath Renovation Loan an excellent choice for buyers on a budget.
HomePath Renovation Loan benefits and restrictions:
- Financing to fund both purchase and light renovation.
- Low down payment options down to 3%.
- Gift funds acceptable for down payment.
- No mortgage insurance
- Available for owner-occupied properties only
- Appraisal required to validate repairs or upgrades
- Renovations available up to the lesser of $30,000 or 20% of the completed home value.
- HomePath properties must have “Renovation Mortgage” logo on listing to qualify.
HomePath properties and financing programs offer a unique opportunity to Fort Lauderdale Realtors to make more deals and sell more homes. Fort Lauderdale Florida real estate buyers can find an exceptional value and opportunity to purchase Lauderdale foreclosures with the ability to upgrade their Lauderdale homes on a tight budget.
Call your Fort Lauderdale mortgage broker HomePath expert, Harvey Collier of First Trust Mortgage. Discover how a Fannie Mae HomePath property and HomePath mortgage can create more opportunities to list and sell Lauderdale homes.
