Thursday, March 27, 2008

National REALTOR Association: Existing Home Sales Rise In February

Existing Home Sales Rise In February

WASHINGTON, March 24, 2008 -

Sales of existing homes increased in February and remain within a fairly stable range, according to the National Association of Realtors®. Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.9 percent to a seasonally adjusted annual rate (1) of 5.03 million units in February from a pace of 4.89 million in January, but remain 23.8 percent below the 6.60 million-unit level in February 2007. The sales pace has been in a fairly narrow range since last September.


Saturday, March 15, 2008

FHA Raises the Roof! New Loan Limits for Homebuyers

The FHA (Federal Housing Administration) has recently increased its loan limits for various areas. This announcement is great news for a lot of people. The FHA loan has become increasingly a very popular home loan solution for many folks. It is exciting news for homebuyers, realtors and the mortgage industry in general. And if you’re closing on a loan after March 21, 2008, you may want to take a look at the FHA loan.

You see, previously, FHA loans in the Knoxville and surrounding area were limited to $200,160 for the note amount. If you wanted to buy a $210,000 home, you had to pay the difference out of your own pocket. The new increase limit allows for a note amount of $271,050. That’s a remarkable leap. And that big jump means the FHA umbrella has widened. Again, great news.

What’s so fabulous about FHA? First and foremost, a FHA loan only requires a 3% contribution out of pocket from the buyer. And, FHA allows the seller to pay up to 6% of closing costs and pre-paid costs (“pre-paid costs” are the money held in reserves to pay for your taxes, insurance and per diem interest). Look at it this way. If you wanted to buy a $250,000 home now, you would only need to have $7500 into the deal if you could negotiate with the seller to pay the remainder of the closing costs and pre-paid items. On this particular example, that would mean the seller could pay up to $15,000 in closing costs for you. In reality, the closing costs/pre-paids would be more around $5,000-6,000, but you get the picture. It’s a very affordable program.

The other highlights of FHA? Flexibility from an underwriting stand point. Credit scores can be as low as 560 (with proper documentation) and medical collections accounts are ok. Judgments do have to have been satisfied. Also, there is no income limitation. You can make as much money as you want and still qualify for the program. And the monthly mortgage insurance that is required is at a reduced rate. An upfront mortgage insurance premium is collected, but it’s financed into the loan amount. The loans can only be for your primary residence, and you can get adjustable rate mortgages or buy downs (money collected upfront to make your payment less for the next year or so-usually seller paid) if you want, too. What else? No need to worry about a pre-payment penalty. They don’t apply to an FHA loan.

I’ve personally seen a huge increase for my customers in FHA loans lately. Where they previously may have qualified for conventional financing, they now prefer the FHA program. It better suits their goals and they qualify more easily for the program if they have minor credit challenges. Oftentimes, they are denied a conventional loan but obtain FHA underwriting approval.

Chrissi Rhea, President of Mortgage Investors Group, states, “We are so excited that these anticipated changes are now a reality for FHA borrowers. When we announced to our sales team that they could start taking applications for the higher loan limit beginning March 10, they were excited to communicate this information to their customers and realtors. It’s really going to open doors for many mortgage customers. It’s nice to see an underwriting limit expand when so many options have actually become extinct in the recent months.”

The new FHA loan limit should help many people in months to come. Also, look for the conventional conforming limit take a higher jump (it’s currently at $417K). That move will also allow more flexibility for purchasing and refinancing homes. I’ll write about that later. But right now, the FHA has raised the roof, so take advantage of it!


Let My Experience Work For You!
Email your home loan financing questions to Kristin Abouelata, Home Loan Specialist with Mortgage Investors Group, at or call direct: (865) 567-0113 Toll Free: 1-800-489-8910. For more information visit her website at Home Loans Plain Talk.

Wednesday, March 12, 2008

VA Loans – Thank You for Your Service

The VA home loan guaranty program allows lenders to offer long term affordable housing with zero to low down payments for veterans. It’s one of the benefits you receive as an acknowledgement of gratitude for your service……..

In 1930, Congress and the President established the “GI Bill” which allowed the Veteran Administration (VA) to coordinate benefits for its service people. One of these programs, known as the Home Loan Guaranty Program, was created to help returning veterans and their families assimilate back into civilian life after sacrificing so much personally for their country.

Who qualifies for VA loans? If you served in the military, naval or air service and are active duty or released from duty for reasons other than a dishonorable discharge, you may qualify. You had to serve for 90 days active duty or 181 days consecutively in peacetime. If you served less than the minimum requirement because of discharge or service connected disability, you may also qualify. In addition, if you are the surviving un-remarried wife or husband of an eligible service member who died for his/her country, you may too be eligible. This program was designed to reward you and your loved ones for your service.

“The VA program, in general, is an exceptional program. Many veterans don’t know it can even benefit them if he/she is overseas. We’ve been helping active duty service people by putting their families in homes, and giving them peace of mind that their loved ones and their immediate needs are being taken care of while they’re away”, reflects Jamie Utton, Director of Product Development at Mortgage Investors Group.

These loans are available only for a primary home you intend to occupy. You can’t go and buy a beach house for weekend use with it. However, you can also use your eligibility to refinance your primary residence and pay off debt (except for Texans, for some reason, they don’t allow it in that state). Or, if you had a VA loan prior, and the interest rates have dropped dramatically, you can do a “streamline” refinance – no worries about paying for a new appraisal or the hassle of verifying your income. You’re all set to go.

So what makes the VA loan stand out above other types of financing? It allows for 100% financing for loans up to $417,000 with no reserves (checking and savings money to burn) required. The loan amounts allowed go up to $1.5 million, but you’d have to put some type of down payment into the transaction if you want to borrow that much money, plus show you have enough money to pay your mortgage for two months sitting in the bank if you need it. And if you’re buying a home, the program allows for the seller to pay up to 4% of the closing costs, based upon the purchase price. Basically, you can get into a home for very little or no money at a more than affordable market rate.

And the best part? No extra money is added to your payment for mortgage insurance if you put a less than 20% down payment on the home. That’s a pretty unique feature that makes this loan more affordable than others. Most of the time, the veteran will be required to pay a VA Funding Fee, but it is financed into the loan amount. So, the funding fee is not an out of pocket expense for closing. A veteran can be exempt from paying the funding fee for different reasons, including service connected disability, or if he/she is a surviving spouse of a veteran who died in service or from a service related disability. And regarding credit scores, the VA loan program has more flexibility than some other programs offer.

If you think you may qualify for this loan, let me first of all say, “Thank you.” I really appreciate the sacrifices you’ve made for this country. And if you’re looking to purchase or refinance your home, call a lender today who specializes in VA loans, and take advantage of this great benefit.

Let My Experience Work For You!
Email your home loan financing questions to Kristin Abouelata, Home Loan Specialist with Mortgage Investors Group, at or call direct: (865) 567-0113 Toll Free: 1-800-489-8910. For more information visit her website at Home Loans Plain Talk.

Saturday, March 1, 2008

For Sale by Owner (FSBO), what do I need to know about home financing?

FSBO or For Sale by Owner can be a hugely successful endeavor and can save you money. But to be successful, this endeavor must be executed correctly. Below are a few tips that may help you be successful in this venture.

Price the Home Correctly: It is crucial that you research and place the correct price tag on your home when selling it. A reputable real estate agent is the first person to contact to help appraise your home. Many agents won’t lend you the time of day to assist you with this aspect since they aren’t listing your home. But a good agent will do it for you with no strings attached. They realize that their business is based on reputation and referrals. They may not get this listing, but you may want them to represent you in your next home purchase. Or your cousin may need a good realtor’s help in the future. Do your homework. Find similar homes in your area and compare their price tags. Are the homesas attractive as yours? Are they as large as yours? Pricing the home correctly is crucial.

Use your time: A FSBO property allows you to place your home on the market for the maximum price to see if it sells quickly. If you have a deadline to sell your home, market it yourself well in advance of this deadline. Later, if you feel you need a realtor’s help, you haven’t painted yourself into a corner. You still have time to market and sell the property correctly.

Market the Home: Make it easy for people to know more about your home without investing too much time. Put a For Sale by Owner sign in the front yard with contact numbers. Put a brochure with information out front so people can pre-screen the information and not waste your time. Talk to your local paper or other FSBO’s and investigate whether placing an ad in the local paper has had results. Different markets yield different results. Consider hosting an open house, but make sure you get the information out to the right market.

Put Your Home’s Best Foot Forward: You want to make sure your home sends the right message to prospective buyers. People have to be able to see themselves in that home. What is the first impression when driving up to the home? What’s the feeling inside? Take measure to provide maximum curb appeal. You want to make sure people want to come inside the house. The outside of your home should entice them to do so. The interior should be clean, airy and free of clutter. Try to make the home smell good and pack away personal effects that remind prospects someone else lives there. The realtor that helps you determine a market price should be able to make suggestions in this area that will make your home more marketable.

Is Your Prospect Qualified?: Make sure your buyer is pre-qualified before entertaining their offer. You can request that a preferred mortgage lender you trust or another reputable lender provide this service. If a person isn’t qualified to buy your home, you don’t want to lose valuable marketing opportunity to attract other prospects. Do not take verbal offers seriously. A serious prospect will sign a contract and provide earnest money as a show of good faith. Make sure you are using a legal contract and that it is executed properly and protects your interest. Again, that real estate agent who helped you earlier or an attorney may be a good idea at this juncture. A well executed sales contract is worth its weight in gold.

Of course all of the above is based upon my personal opinion and experience. Use these thoughts for informational purposes only. And good luck selling your home!