Those who wait will pay thousands more this spring...

Waiting a few extra days or weeks this spring could cost buyers thousands of extra dollars as the office of Housing & Urban Development (HUD) implements several changes for loans guaranteed by the Federal Housing Authority (FHA).

Coming just weeks before the April 30th deadline for the Home Buyer Tax Credit and just days after the March 31st expiration of the Federal Reserve Boards mortgage backed securities purchase program (which has kept home loan rates artificially low for over a year), these FHA changes make it even more important to act now to save big.

Here are a few reasons why:

One April 5th, the cost of required up-front mortgage insurance for loans guaranteed by the FHA will increase from 1.75% to 2.25%. For a borrower purchasing a $200,000. home with $7000. down payment, the up-front mortgage insurance will increase by $965. Up front mortgage insurance is typically financed in the final loan amount so the impact to a monthly payment will be minimal but overall, the increase is still borne by the borrower both upfront and monthly.

Later this spring, the amount of money that a seller can return to the buyer from their sale proceeds will be reduced from 6% to 3%. The reduction in these "seller concessions" can increase the amount of cash a buyer will be required to pay at closing by $6000. for a home purchase of $200,000.

There is only one way to avoid being affected by all of these costly changes that lie ahead-submit all FHA mortgage applications by the last week of March.

FHA Update...

HUD just announced that effective Feb. 1, 2010, they are suspending the 90 day Anti-Flipping Rule.

With certain exceptions, such as HUD-owned and bank-owned properties, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. However, beginning Feb. 1st buyers may use FHA-insured financing to purchase properties resold through private developers and investors, providing access to a broader array of recently foreclosed properties.

Under the temporary waiver, all transactions must be arm's length. In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.

For more information email us, and we can send you a LONG email explaining in detail.

Expect a rebound in new home construction this spring...

After three years of declines in home construction, Dallas/Ft. Worth's home building market has picked up. Home starts in the DFW area rose by 10 percent in the fourth quarter, the first increase since 2006.The number of vacant new homes on the market is falling to historic new lows (only about 4,200 houses) it's time for builders to start putting up more. Last year, they built only about 13, 500 single-famly homes. The number of new homes for sale on the market is as low as it's been since the 1970's. The DFW area has only about a three month supply of finished vacant new houses. That's less than half the nationwide average. A housing market is considered balanced with a supply of slightly less than 6 months.

Information from The Dallas Morning News 1/15 Steve Brown

2010 Good Faith Estimate High Lights

Recent guidelines from Washington have forced a change to the way that loan originators will disclose closing costs for all homebuyers. The purpose of the new Good Faith Estimates (GFE's as we like to call them) is to level the playing field for borrowers comparing loans to be able to make apples to apples comparisons for loan scenarios.

In essence, HUD is working to bring all lenders up to the same standard of excellence in reporting closing costs, estimating realistic fees that a buyer should expect to pay at closing with no last minute surprises.

So, what's important to you...

1. All fees paid to the lender/broker are to be consolidated in one line, including processing fees, origination fees, etc. These charges cannot change from the original estimate without a material change to the loan requested.

2. In the event fees are being charges to obtain a lower rate, these are to be broken out and itemized for the borrowers ease of comparison to other loan programs.

3. Estimates for fees from government recording charges and third party settlement providers they suggest are to be itemized and the lender is held to a tolerance of 10% for their accuracy. In the event the estimated charges exceed the amount listed by the allowable tolerance, the lender will be responsible for making up the difference.

4. Estimates for services that they buyer can shop for and do choose can change at settlement without the lender being held accountable. This can include title charges, homeowner's insurance, and initial deposits for an escrow account.

Let's us know if you have any questions regarding this, we would love to help!

Top 7 Reasons to Buy Your First Home Today...

1. Free Money. The $8000. tax credit for first time home buyers has been extended until April 30, 2010. This is a special tax credit from the government that you don't have to pay back, as long as you stay in the home for at least 36 months.

2. Affordability. Based on recent property declines and current interest rates, home affordability has not been higher since it was first tracked over 40 years ago. Your grandparents couldn't have received a better interest rate that you can today.

3. Tax Breaks. The IRS allows you to deduct the interest you pay on your mortgage, your property taxes, and in many cases for those who qualify, some of the costs to buy your home & mortgage insurance. Owning a home is a great way to lower your tax bill.

4. Build Wealth. Unlike paying rent, with each mortgage payment you make, you build equity and you decrease your income tax liability. Owning a home is still the best long-term investment.

5. Appreciation. As home prices have fallen in today's tough economy, the basis for realizing appreciation in future years is very strong. Historically, even with other periods of declining value, home prices have exceeded consumer inflation. From 1972 through 2005, home prices increased on average 6.5% according to the National Association of Realtors.

6. Stability. Knowing you can establish roots and raise a family in one location, free of the desires or needs of your landlord to sell the property you are living in. This is something no other investment provides. You can't live in a stock, and you can't raise your kids in a bond.

7. Independence. Enjoy the freedom to do what you want to your home. After all, it's yours to do what you wish. And, with any improvements you make, you have the ability to benefit from your investment. Try that with an apartment! :)

Happy New Year!!

Wishing you and your family a wonderful NEW YEAR!!