financing

Great lender owned townhouse in great Chandler location. Two large bedrooms (one up, one down) with adjacent bathrooms. Tile throughout and neutral paint. Clean and move in ready. Nice complex with clubhouse and community pool. Close to shopping and restaurants. Don’t miss this great bank owned property before its gone.

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4964 E Harmony Ave Mesa Az 85206

Popular floorplan in great Mesa location.  Tile throuthout except in bedrooms and formal living room.  Seperate family room and living room.  Kitchen looks onto family room.  Large kitchen island.  Master bath features seperate tub and shower and double sinks.  North/South exposre.  Baulted ceilings.  Extended lenth back patio.  Close to 60 and tons of shopping.  Don’t miss this great bank owned opportunity.

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Tagged as: "ReMax Alliance", $100.001-$150.000, bank owned, Mesa, Single Family, Troy Reeves

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Recently, HUD has announced that you can now get access to the new home buyer tax credit of up to $8,000 to help pay for closing costs rather than wait for your refund to come from the IRS. To make the announcement, HUD issued an official Mortgagee Letter outlining how the “New Home Buyer Tax Credit Monetization Plan” works.

Using The 8000 Tax Credit For Closing Costs
According to the new rules, you must come up with the initial 3.5% required by FHA for your down payment, and then you can basically use the tax credit for your closing costs and more of a down payment if you choose to. For example, if you were going to be due the full $8000 tax credit from the IRS, and your total closing costs were going to be $5000, you could apply the other $3000 to your down payment (less administrative fees of the program).

From the official HUD announcement:

Pursuant to 12 U.S.C. 1709(b)(9), the homebuyer’s downpayment required for eligibility for FHA insurance may not consist of any funds (including funds derived from a sale of the homebuyer tax credit) provided by the mortgagee, the seller, or any other person or entity that financially benefits from the transaction (or by any third party or entity that is reimbursed, directly or indirectly, by the financially benefiting person or entity). Accordingly, the proceeds of the sale of the tax credit to FHA approved mortgagees, the seller, or any other person or entity that financially benefits from the transaction (or any third party or entity that is reimbursed, directly or indirectly, by the financing benefiting person or entity), may not be used to meet the 3.5% minimum downpayment, but may be used as additional downpayment, buying down of interest rate, or other closing costs.

Using the 8000 Tax Credit For Closing Costs
All closing costs are eligible for the new home buyer tax credit monetization plan - you can use the money for any “normal” closing costs that are associated with buying a home. Lender fees, title fees, inspection fees — these are all “normal” closing costs and you can use the 8000 tax credit monetization plan for these costs.

How To “Monetize” The 8000 Tax Credit
HUD has designated that organizations who are approved by FHA can administer the 8000 tax credit monetization plan. These include FHA approved lenders and other non profit organizations. HUD outlined clearly what was a “reasonable” fee - not more than 2.5% of the amount of the credit - so for a $6,000 credit, you could expect the fee to be about $250.
Many organizations are just now figuring out how to implement programs based on the guidelines - so if you speak with a loan officer at a FHA approved organization and they tell you that they don’t yet have the official mechanics in place, be aware that it may take some time. Also, the best place for more information about how this program works is probably to ask a loan officer at an FHA approved lender - they should at least know the basics!

Other Resources:
HUD Official Announcement
Official Mortgagee Letter 2009-15
New Home Buyer 8000 Tax Credit Down Payment: Answers To Questions
8000 Tax Credit Questions and Answers

Tagged as: "ReMax Alliance", 8000 Tax Credit, financing, home buyer credit, Justin McHood, Single Family

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As foreclosure properties begin to dominate the market more and more, we are seeing the banks are requiring buyers get pre-approved through their bank before making an offer. So what if you have your own lender, as you should before you even begin looking for a home? That means you still need to talk to the bank who is selling the home too.

If you were pre-approved through a lender first then you should not need to worry about get approved with the seller either. The requirements should not be that different. Their “reasoning” for wanting to get you pre-approved through them is they want to make sure you are good for the loan and they don’t want to take another lenders word for it. The whole story is they want to make you a customer. It is all about customer acquisition.

Large lenders often will originate loans with a loss and they know they can beat the small lenders by taking that loss up front. That is okay with them though as they know once you use them for your loan, they have a chance to convert you to a life-long customer and they get the lifetime value of the new account.

Do I like that a buyer who is pre-approved with a lender and qualifies for the loan needs to also get approved by the selling bank? No, it should not be that way. But now you know what it is required.

Tagged as: borrowing, pre-qualify

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President Barack Obama was in Arizona this week to lay out the guidelines to his new housing agenda. While the full details will not be released until the plan goes into effect on March 4th, there are some things we know.

If you currently live in a home where owe less than 105% of the current market value there is going to be opportunities coming for you to refinance to a lower interest rate. If that is not you there still may be a chance for you to get some relief too. While the details are still not clear, the government will be be offering a financial incentive for lenders to work with you and keep you in your home by possibly restructuring your loan. We will know more on March 4th, but for now you can look at our RelocateAZ.com blog for more details.

Tagged as: Loan Modifications, Stimulus

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Many times when buying a bank owned property, the home will “need a little work”. What is the difference between needing a “little bit of work” and needing “a lot of work”?

It depends.

If you are thinking of financing your home with a “normal” FHA loan (not the FHA 203k streamline loan program) it is important to know what things that FHA considers to be cosmetic and what things FHA requires to be repaired prior to insuring the loan.

Here is a brief list of repairs that are not required to be repaired under current FHA guidelines - they are considered to be cosmetic:

• Missing Handrails
• Cracked or damaged exit doors that are otherwise operable
• Cracked window glass
• Defective paint surfaces in homes constructed post 1978
• Minor plumbing leaks (such as leaky faucets)
• Defective floor finish/covering
• Evidence of previous (non-active) Wood Destroying
• Insect/Organism damage
• Rotten or worn-out counter tops - Damaged plaster, sheet rock or other wall and ceiling materials in homes
• Poor workmanship
• Trip hazards
• Crawl space with debris
• Lack of all-weather driveway surface

Does your new dream home need more than just a little bit of work done? The FHA 203k streamline program is designed for situations where the property needs more repairs than what FHA considers “cosmetic” damage and a little bit of work or a lot of work?

Justin McHood is a nationally published mortgage expert who lives and works right here in Arizona. You will normally find him wearing a blue starched shirt (he says that it goes well with is orange hair) and you can learn more about him at ArizonaMortgageTeam.com.

Tagged as: 203K, FHA, loans

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We had a great response from our previous post on loan modifications that we decided to bring you another entry. We asked Stephanie Boughton from State Mortgage to share her experience. Stephanie has done dozens of loan modifications and has the experience to speak first hand about the process.

A loan modification is a way to negotiate with your current servicer or original lender to get your payments reduced so that you can afford to keep your current home. The loan mod is not short. From our experience you can expect it to take approximately 2-4 months to complete the whole process.

We are often asked if the person applying needs to be late on their mortgage to be approved for a loan mod. While the answer is no, the lender is more likely to negotiate a lower payment if you are currently delinquent. The modification process usually lowers your interest rate or extends the term of your loan up to 40 years. Most lenders at this time are not willing to lower your principal balance.

Most of the modifications that are getting approved today are:

1. Primary residence
2. Have Negative Equity or no equity in home (Up-Side-Down)
3. Have had a hardship, such as a layoff, divorce, family death, major illness/surgery or reduction in income. The banks also are willing to work with those that have had their mortgage payments increased due to having an adjustable rate (usually right before or after the payment goes up).

The documentation required for a loan modification includes:

1. 2 years of federal tax returns & W2s (all pages & all schedules)
2. One complete month of paystubs
3. 2 Months of bank statements (all pages)
4. 401k, IRA, Stock, etc. Statements (all pages)
5. Driver’s license
6. Original Note
7. Original HUD1 Settlement Statement from when you purchased the home
8. Recent Mortgage Statement
9. Expense breakdown form using net income (not gross)

Recently I was able to help on client (Pam) work to achieve a successful loan modification on her home. Pam contacted us in October 2008 and she just closed her modification at the end of January 2009. Pam was a single parent working full-time who found out that she had breast cancer. While taking time off of work for 6 months to have 5 surgeries plus a double mastectomy, she continued to make her mortgage payments on-time by using up all of her savings. Now, she is in full recovery and has returned to work. Since she only makes $25k per year, she was unable to afford her $1650 month mortgage payment due to depleting her savings. After 3 months of negotiating with her lender, she lowered her payment by almost $400 per month & can now start saving again.

Tagged as: Loan Modifications

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In the southeast valley, there are currently more than “just a few” homes that are currently either in foreclosure or owned by banks. Some of these properties can be had for a great deal but they will require a little “TLC” before you might be ready to actually live in them.

If you are looking at buying a home that needs a few minor repairs before you live in it, the FHA 203k streamline program is designed to let you access repair money as part of the purchase of the home.

FHA 203k Streamline Program

The FHA 203k streamline loan is designed to allow people who want to purchase a home in need of a few repairs to buy the home using a base loan and then have money for planned repairs or improvements escrowed and paid directly to the contractors.

For the FHA 203k streamline program, you can have up to $35,000 set aside for repairs and while there are a few “extra” steps to the loan, it is not significantly more difficult to qualify for and get approved for a regular FHA loan.

Top FHA 203k Streamline Repairs

Some of most popular improvements that people use the FHA 203k streamline program for include:

• Kitchen remodeling
• Bathroom remodeling
• Termite damage repair
• New exterior work (stucco)
• Plumbing fixture repairs
• Upgraded or installing new flooring
• Roof repairs or an entirely new roof
• Installation of new smoke detectors
• Landscaping improvements

How FHA 203k Streamline Funding Works

When you buy a house using a FHA 203k streamline, up to 50% of the money set aside for property improvements disbursed immediately. Normally, if money is disbursed at closing, an instruction letter from the lender is issued with details of what is required for the second and final disbursement.

Once all work has been completed and approved, the final disbursement can be issued from the lender and paid directly to the contractors. If the work that has been done is $15,000 or more then a final inspection by an FHA appraiser is required. If the work is less than $15,000, then no final inspection is required.

Instant Equity: The FHA 203k Streamline Makes It Possible

Many times, if a home “needs a little work”, buyers will pass on it in favor of a home that is “perfect”. This provides you a real opportunity to build equity by “buying low” knowing that you can get the needed money for repairs as part of the normal FHA loan process.

So if you are in the market for a home and are willing to put a little bit of extra work in to improve the home, the FHA 203k streamline is a great option and can help you get the money needed to truly make improvements so that your new home becomes your dream home.

Justin McHood is a nationally published mortgage expert who lives and works right here in Arizona. You will normally find him wearing a blue starched shirt (he says that it goes well with is orange hair) and you can learn more about him at www.ArizonaMortgageTeam.com.

Tagged as: 203K, FHA, financing, loans

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