Buy a House Fast

A couple months ago, we mentioned how changes to FHA rules were getting tougher in the future.  The future is almost upon us now – when considering the Mortgage Insurance Premium Factor.  so if you’ve not been assigned an FHA case number by April 5, you will be paying 2.25% rather than 1.75% for your home loan.

The 2.25% fee is an upfront fee for now, although it will annualize in the future.  It is still financed over the cost of the loan.

This rule is one of a series of changes meant to make FHA stronger in the face of growing delinquency.  Other rules include increasing the percentage of down payment for buyers with credit scores under 580 and lessening the amount a seller can contribute to closing costs. These will be effective this summer.

FHA is committed to helping more people have access to home ownership but according to Federal Housing Administration (FHA) Commissioner David Stevens, the changes are necessary to strengthen capital results while upholding other goals.

“Striking the right balance between managing the FHA’s risk, continuing to provide access to underserved communities, and supporting the nation’s economic recovery is critically important. When combined with the risk management measures announced in September, these changes are among the most significant steps to address risk in the agency’s history. Additionally, by continuing to provide affordable, responsible mortgage products, FHA will support the housing market’s recovery. Importantly, FHA will remain the largest source of home purchase financing for underserved communities.”

Despite the rate hike in mortgage insurance, FHA is still a good deal for most borrowers.

Express Realty Services can help you find a great affordable home in DC, Maryland, or Virginia.  Contact us today for details.

Real estate agents and everyone else connected with the housing industry are shaking in their boots.

Will a shadow inventory of low cost homes flood the market?

• Many foreclosures have not hit the market but are in lender’s inventories throughout the county.
• Many modified loans won’t make it past the trial period and will foreclose, while others will default again – as has been the case of 51% of loans modified in early 2009.
• More homes will foreclose when their adjustable rate mortgages reset this year, sometimes doubling house payments.
• Homeowners with negative equity may fall into foreclosure or may chose to strategically default.
• Many investors who bought foreclosure bargains to flip them may put them on the market rather than renting them out.

If these hit the market all at once, the results could be disastrous.  Housing values that have crept up in DC and throughout the country could be quickly undercut.  However, not all is lost.

There are potential reasons why this may not happen if all parties involved in foreclosures act just a little differently.

• Banks could offer meaningful modifications that would keep people out of foreclosure.  Some homeowners in over heads might still lose their homes, but the numbers would be way down.  The latest modification in Making Homes Affordable announced on March 26 might facilitate principal reductions for some.
• If new programs designed to bring underwater-homeowners back to shore are effective, people may have fewer reasons to walk away from their homes by choice or by circumstances.
• Investors might see the wisdom of renting out their properties, especially if they paid cash, in an economy where loans are harder to obtain.
• In the best of circumstances any or all of these factors will lessen the amount of shadow inventory on the market, which will allow continued improvement of the housing market.

Regardless of what’s lurking in the shadows of the housing market, Express Realty Services can help you find an affordable home in DC, Maryland, or Virginia.  Contact us today!