Medford, MA Homes for Sale – Deb on the Web » financing

FHA Stricter When Buying Add’l Home

DebOnTheWeb — Wed, 24 Sep 2008 21:14:02 +0000

A new rule from the FHA (Federal Housing Administration) is aimed to stop people who currently own a home from buying a new, less expensive home and then walking away from the more expensive house. This tactic is known as “buy and bail”. In order to put a stop to this activity, FHA (which can only be used to purchase an owner occupied property) will no longer count rental income when determining if the borrower can qualify for the new house. This mean they must prove that they can qualify for both mortgages without using any of the rental income to help qualify. (This is waived if the owner has 25% equity or can prove they are relocating for their job and have a one year lease signed for the property.)

Buying a House? Use a Buyer’s Agent

DebOnTheWeb — Tue, 22 Jul 2008 11:55:46 +0000

If you’re looking to buy a house, there are 2 important steps to take. The first step is to get prequalified. With so many changes happening in the mortgage industry, you want to make sure that you can afford the houses you are looking at. Remember, there can be a difference between the amount of money that a bank will lend you and the amount of money you feel comfortable paying each month. You don’t want to be house poor – keep your monthly payment at a level that lets you sleep at night.

The second step is to interview until you find a buyer’s agent you are comfortable with. If you are buying, a buyer’s agent works for you. Their job is to help you get the best price and terms for the property and to guide you through the process, putting your needs first.

I recently talked to someone who started looking at houses for sale in Somerville, MA without doing either of the 2 important steps I recommend. By the time they had received my name as a referral, they had already seen the house they liked 3 times with the listing agent. The listing agent works for the seller. Don’t put yourself into this situation. Find a buyer’s agent you feel comfortable with before you start to shop for your new house.

Real Estate Market Like the Early 90′s

DebOnTheWeb — Wed, 18 Jun 2008 10:22:22 +0000

The current real estate market feels very much like when I first started helping people buy and sell real estate in 1991. Foreclosures are on the rise, prices have dropped significantly and everything the media has to say is doom and gloom. There is one big difference, though and that is interest rates. In 1991, a 30 year fixed rate mortgage was about 9% (and we were celebrating because this was the first time rates were in the single digits in a long time). Today you can get a 30 year mortgage for under 6.5%.

If you listen to the media, it seems like everyone is facing foreclosure, when in reality it’s approximately 2% of homeowners who are in trouble. The media knows that bad news sells. Let’s be realistic – we needed this price change. Massachusetts home prices couldn’t keep going up – we were losing population. Many students who come to the state for our wonderful colleges and universities used to decide to stay here after school, buy a house and settle down. Our high cost of housing was driving this (and many other) segments of the population away.

In the meantime:

If you are having financial problems paying your mortgage, contact me – there are options to help you.
If your would like to make a move to a bigger house, that makes a lot of sense in this market. Yes, you’ll sell your current home for less than you would have a few years ago, but you’ll make up for it by buying the more expensive house for less as well.
If you’re thinking of buying, interest rates are still low, prices have come down and you have plentiful choices.

History repeats itself and the lesson we can learn from the early 90′s is that the market will eventually rebound.

Fannie Mae Changes Down Payments

DebOnTheWeb — Fri, 16 May 2008 20:55:41 +0000

Fannie Mae, one of the nations largest players in the secondary market (where mortgages are bought and sold) has just changed its mind about requiring an additional 5% down payment in areas that it considers to have “declining market values”. Of course, a declining market encompasses most of the United States. So, the good news is that depending on a borrower’s credit score, Fannie Mae will consider financing a borrower with 3% down. However, any borrower who is putting down less than 20% will normally need private mortgage insurance, so just because Fannie Mae will allow less of a down payment, that doesn’t necessarily mean that the PMI company won’t require an additional down payment.

As with all financing situations, stay tuned!

Financing Rules Are Changing . . . Again

DebOnTheWeb — Thu, 24 Apr 2008 22:50:14 +0000

Stay tuned because soon there will be new financing rules whether you’re looking to buy, refinance or sell. Yes, if you’re looking to sell and not buy again, these changes will effect you as well, since your buyer will need to qualify with the new rules. Who’s making these new rules you ask? Good question! They are coming from a multitude of places. . . PMI companies as well as Fannie Mae and Freddie Mac. Although we don’t know everything yet, we’ll definitely be seeing higher downpayment requirements. (Many PMI companies have now changed their rules so that condo purchases need a minimum 10% downpayment.) I’ll update you as soon as I know more.