Take advantage of these limited Home Purchasing Incentives!

Those Who Wait Will Pay Thousands More This Spring

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

Coming just weeks before the April 30 deadline for the Home Buyer Tax Credit and just days after the March 31 expiration of the Federal Reserve Board's 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:

On 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 a $7,000 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.

It is important to note that in order to be eligible for the lower cost up-front mortgage insurance, a lender has to order a case number from the FHA before April 5th. A case number can only be generated for loan applications where a property is involved and a fully executed purchase contract exists. Home buyers who have been pre-approved but are not under contract will not be eligible for the reduced premium effective April 5th.

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 $6,000 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.

Call us today for more information!

Yoli and Sharon

How The Stimulus Can Help Your Wallet

Last week the House of Representatives passed its version of the stimulus package; on Tuesday, the Senate passed its version. Yesterday, the two groups announced they have reached a compromise and are expected to vote on the package this week. President Obama has urged lawmakers to present him with the bill prior to President’s Day, which is Monday, Feb. 16. MAKING SENSE OF THE STORY FOR CONSUMERS · It is likely that the final stimulus bill will closely resemble that of the Senate’s approved version, due to the number of votes needed. The Senate version garnered three Republican votes, while the House’s version did not receive support from any Republicans. If the package is too different than that of the Senate’s, the bill may not be passed. · Some of the provisions under consideration are a $500 credit per worker and a $1,000 credit per dual-earner couple to be paid to people making $70,000 or less; a one-year provision to protect middle- and upper-middle-income families from having to pay the Alternative Minimum Tax; a temporary tax credit to allow those who buy a car in 2009 to deduct the interest they pay on their car loan as well as the sales tax charged in the purchase; a $2,500 credit for higher education expenses; as well as health care, unemployment, and needy family provisions. · Another provision under consideration is a temporary $15,000 tax credit for home buyers. This would double the size of the existing temporary home-buyer credit, eliminate the first-time home buyer restriction, and remove the requirement that the credit be paid back. The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) and the NATIONAL ASSOCIATION OF REALTORS® (NAR) are lobbying for this provision’s inclusion in the final bill. · The House version of the stimulus package also contained a provision to increase the Fannie Mae, Freddie Mac, and FHA loan limits in every county in the state to 2008 levels. C.A.R. has long advocated for higher conforming loan limits, and believes this stimulus package is a step in the right direction for California’s homeowners. If approved, the conforming loan limits in high-cost areas would be increased from $625,500 to $729,750, enabling more home buyers to purchase at favorable interest rates

(Article by CNN Money)