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For those who are considering a home purchase but do not have funds available for a large down payment time, is running out.
The FHA loan program allows buyers to purchase a home with a minimum down payment of 3% of a home’s purchase price. FHA currently allows the funds for the down payment to be “gifted” from a family member or from a non-profit organization. Sellers are not allowed to contribute towards a buyer’s down payment.
Two of the largest of the non-profit organizations assisting buyers with funds for down payments are Nehemiah and AmeriDream. Sellers make a contribution to the organization, which in turn donates the contributed funds to the buyer to be used as part or all of the required down payment. Nehemiah and AmeriDream have helped hundreds of thousands to become homeowners.
As of October 1, 2008, the New Housing Bill will ban down payment assistance from all non-profit organizations, including Nehemiah and AmeriDream.
FHA offers an excellent loan program for first-time home buyers. A first-time buyer is defined as anyone who has not owned a home within the past three years.
The FHA loan program offers down payments as low as 3% of the purchase price of a property. Most conventional loans are now requiring minimum down payments of 10% – 20%. FHA also offers flexible credit guidelines. Many conventional lenders are requiring that a borrower have a FICO score of no less than 680. FHA also allows a higher debt ratio than most conventional lenders. FHA offers some of the lowest interest rates available to buyers.
All of these factors and the additional benefit of down payment assistance from family or a non-profit organization makes FHA a very attractive loan program. Remember, time is running out for those who need down payment assistance. Your escrow must close by November 30, 2008.
Contact an FHA approved lender for pre-approval and guidelines regarding the Nehemiah or AmeriDream program requirements.
Real estate is a funny “game”. When prices are rising, everyone wants to buy but when prices are declining, buyers tend to hold back.
Folks, there is a reason it is called a buyer’s market. The market is in your favor! A buyer’s market means that prices and terms are to your benefit. A buyer’s market is the time for buyers to buy.
Due to the large inventory of homes, prices have become more competitive and, therefore, more affordable for buyers. Location is still a key factor when purchasing a home; some areas are over valued and will remain so because of the ageless rule: Supply and Demand. Prices may be fairly priced in one area, under valued in another neighborhood and still slightly over valued in yet another.
Currently, according to National City Corporation, the home prices in Calvert County are fairly priced. In fact, most of housing in the nation is now either fairly priced or slightly under value. In 2008, home prices declined by only 3% in Calvert County with most homes selling close to asking price (within 5%). This demonstrates that homes are now selling for what the market will bear and what buyers can afford.
I previously stated that “terms” are in your favor and that is true. Although there is a credit crunch in the mortgage industry, home loans are still being offered at affordable rates.
Conventional loan guidelines have tightened up making it harder for those with less than A1 credit (FICO score of 700+) to obtain loans. Many lenders are requiring higher down payments than a few years ago. Mortgage lenders have gone back to old-fashioned guidelines: good credit history and savings ability. For the strong borrower, these factors are not a hindrance.
For those with less than a 700 FICO score and with less than 20% down, there is still a lender that is willing to extend credit to those seeking home-ownership. That lender is FHA (Federal Housing Authority).
FHA offers loans requiring only 3% down with very competitive interest rates. FHA credit guidelines have not changed and are more flexible than most conventional mortgage loans allowing higher debt ratios and less than perfect credit. Even those with a bankruptcy in their background may find they can qualify for an FHA loan. In addition, FHA has temporarily raised its loan limits for Calvert County to $729,740. Unless Congress votes to make the loan limit permanent, it will revert back to its previous limit of $362,790 on December 31, 2008. That is a lot of buying power to lose.
Markets all over the nation are seeing an increase in sales and mortgage loan applications have increased steadily for the month of July. These are indicators that the housing market is making a shift.
I doubt that the “Glory Days of 2005 and 2006” are on the horizon, but the market will shift causing buyers to be in a less advantageous position. If homeownership is something that you have been considering, contact an FHA approved lender to determine your purchasing capability.
If you have been listening to the news the past few days, you have probably heard about the federal government’s offer to back Fannie Mae and Freddie Mac with emergency funds, if needed.
Fannie Mae and Freddie Mac own about half of all the mortgage loans in the country. According to those in the know, both Fannie Mae and Freddie Mac are financially sound and are not facing any crisis. They have definitely been affected by the current high rate of foreclosures across the nation, but that trend is on the wane which means their stability will be increasing rather than decreasing.
So, why did the Feds offer a “bail-out” option? To offset last week’s decrease in Fannie Mae and Freddie Mac stock values and to boost investor confidence in the financial sector of the economy. It is very unlikely that Fannie Mae or Freddie Mac will take advantage of the extension of credit lines or discounted interest rates offered by the government.
The negative news regarding Fannie Mae and Freddie Mac, along with other economic factors is enough to make anyone considering a home purchase very nervous, simply because they do no know how this affects them. I will try to boost your confidence by giving you a few facts.
Mortgage credit will remain tight but not unattainable. This will not affect interest rates. Mortgage interest rates are most affected by the bond market. Currently, more investors have moved their money to the bond market, feeling it is safer than the stock market. Because of the increase in bond market investors, rates have declined in the past few weeks and would have declined further if the stock market had fared better on Friday. The Feds are not expected to raise rates when they meet again on August 5th.
Current rates have been vacillating between 6.15% and 6.35% this week. Interest rates are lower than they were at this same time last year. Rates will remain volatile; so when you find an interest rate that works for your budget, lock it in. This is not the time to wait and see what the rates will be next week.
Your ability to purchase a home in Southern Maryland has not really changed. The ability to qualify for a home loan is still based on your personal credit history, income and funds available for a down payment.
According to all the reports I have read this week, the road to recovery is for more Americans to enter the real estate market as buyers. As home sales increase, the housing market reports will improve and investor confidence will increase. At this point in time, it is fear that will keep America from recovering. You can take advantage of some of the greatest real estate opportunities due both to continued low interest rates and home affordability.
After many years of planning and work, it appears that the Chesapeake Beach Railway Trail in Chesapeake Beach will soon become a reality.
Councilmen Bruce Wahl, a champion of the project since 1989, and Stewart Cumbo have obtained $3.3 million to complete the project. The project is part of the Calvert County’s plan to improve and expand the town’s public open space (Program Open Space).
The trail will be an asset to the community and visitors alike and is a demonstration of Chesapeake Beach’s commitment to keep and improve its natural resources.
The old Chesapeake Beach Railway will be a pedestrian, bike and equestrian path. The trail will begin in Chesapeake Beach’s town center near the water park. Eventually, a bridge will cross over Fishing Creek which will lead to the railway.
The 7.7 mile Chesapeake Beach Railway Trail will connect Bay View Hills and Richfield Station, allowing local residents the opportunity to walk or bike from their homes to town while enjoying the beauty of nature. The trail will connect North Beach and Chesapeake Beach
The Chesapeake Beach Railway Trail in Chesapeake Beach is part of a much larger picture. The route that once ran from Washington D.C. to the Town of Chesapeake Beach will be a series of trails (some completed and some in progress). The planned corridor will cross three counties, for a total of 39 miles.The trail will be managed and owned by the Chesapeake Beach Railway Museum
