That is a great question and very timely. The value of assumability right now is as high as it is ever likely to go because of the broad consensus that interest rates in future years will be higher than they are now.
Loans insured by the Federal Housing Administration (FHA) are assumable, while conventional loans, with a few exceptions, are not. That means that a home purchaser today who finances the purchase with an FHA-insured loan and who sells his house later when interest rates are higher will be able to offer a potential buyer the right to assume his low-rate FHA loan.
After approval of the buyer by FHA, on sale of the property the buyer will assume all the obligations under the mortgage, just as if the loan had been made to her, and the seller will be relieved of liability.
The major driving force behind assumptions is the lower interest rate on the assumed mortgage relative to current market rates. If the home seller has a mortgage with a rate below the current market rate, both buyer and seller can be better off if the buyer assumes the seller's loan. The buyer enjoys a lower rate and also avoids the settlement costs on a new mortgage.
Assume a home purchaser today taking a $200,000 mortgage on a $250,000 house who is offered the choice between a conventional 30-year fixed-rate mortgage at 5 percent with no mortgage insurance and an FHA loan at 5 percent with mortgage insurance, and, of course, assumability.
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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 Estimate 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 that I have always adhered to, estimating realistic fees that a buyer should expect to pay at closing with no last minute surprises.
What are the important facts you should be aware of in having conversations with homebuyers? Below are some important points to know:
- 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.
- In the event fees are being charged to obtain a lower rate, these are to be broken out and itemized for the borrower's ease of comparison to other loan programs.
- Estimates for fees from government recording charges and third party settlement providers we 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.
- Estimates for services that the 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.
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Chris Wilson
The Mortgage Firm, Inc.
921 Douglas Ave. Ste. 200
Altamonte Springs, FL 32714
www.themortgagefirm.com to apply online!
4 bedroom Concrete block Pool Home
• 1,715 sq. ft., 3 bath, 4 bdrm ranch - 
MLS® افغانۍ149,900 Not a Short Sale
Park Manor Estates, Orlando - Not a short sale or foreclosure..just a great price on this adorable home, perfect for first-time homebuyers! 4 large bedrooms, 2 1/2 bath, large open living/kitchen/dining area, upgraded appliances, ceiling fans, updated light fixtures, new carpet in bedrooms, tile in all wet areas, and a ton of future potential. Enjoy Florida outdoor living in the screen patio, large pool, and fenced in back yard with space for your pets and your playsets. Concrete block walls with brick facade and shutters pull together a WELCOME home feel. Large shed in backyard also included with home. 2 car garage with cabinets for extra storage, fresh interior paint and the roof was recently replaced. No HOA. Located close to UCF, Valencia, shopping, public transportation, and restaurants. 15 minutes to downtown Orlando, 20 minutes to the Lake Nona Medical City. If you are looking for a move-in ready, charming house with no hassles of the distress sale, you have come to the right place.
Want MLS on the GO? Text MAPIT to 87778 and download free app to your cell phone. Search by location, address, school district or zip code. Get information immediately.
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The Obama administration is moving to tighten underwriting standards on FHA-backed loans by increasing the amount of upfront cash homebuyers must bring to the table, raising minimum FICO scores for new borrowers, and reducing maximum seller concessions from 6 percent to 3 percent.
The most obvious way to increase upfront cash requirements would be to raise the 3.5 percent minimum downpayment requirement for loans guaranteed by the Federal Housing Administration.
A bill introduced Oct. 1 by Rep. Scott Garrett, R-N.J., would raise the minimum downpayment for FHA loans to 5 percent and prohibit financing of closing costs. HR 3706, which has 27 co-sponsors, has been referred to the House Financial Services Committee.
Housing Secretary Shaun Donovan, briefing committee members on the administration's plans Wednesday, said there are several ways to make sure borrowers have more "skin in the game" currently under consideration.
HUD has "made the decision to exercise our authority to increase the upfront cash that a borrower has to bring to the table in an FHA-backed loan," Donovan said, but there "are several ways to accomplish this, and so we are currently analyzing various options to determine which is the most effective and consistent with our mission."
Testifying on behalf of the National Association of Realtors, Vicki Cox Golder urged Congress and the administration to "exercise caution before introducing proposals that may have a profound adverse impact on our economic recovery."
NAR is strongly opposed to HR 3706, she said, because increasing FHA's downpayment requirements would make it impossible for many borrowers to use the program, and "not add a penny to FHA's reserves."
Dan Green, a Cincinnati-based loan officer for Mobium Mortgage Group Inc., said an increase in minimum FICO could have "a much larger impact than increasing downpayment requirements from 3.5 to 5 percent."
The minimum FICO score for FHA-backed loans was raised from 500 to 580 earlier this year, he said, although most lenders already have even higher minimums.
"Most consumers are going to walk into their bank, and their bank will say 620" is the minimum score needed to obtain a mortgage, Green said.
FHA is in a difficult position, Green said, because Fannie Mae and Freddie Mac continue to tighten their guidelines, and that pushes more borrowers who are less creditworthy into FHA loans.
Click on the link above for full story.
Baldwin Park, Orlando - Announcing a price reduction on 2120 Meeting Place #201, a 1,801 sq. ft., 2 bath, 3 bdrm second floor unti, story "Living Space On One Level". Now MLS® $199,900 - Huge Price Reduction.
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Lake Pointe, St. Cloud - Announcing a price reduction on 4942 Oakway Dr, a 3,488 sq. ft., 3 bath, 5 bdrm 2 story "30x20 Bonus Room". Now MLS® $235,000 - BACK ON MARKET.
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Rare Find in Hammock Pointe2
• 2,142 sq. ft., 3 bath, 3 bdrm 2 story "Cathedral Ceilings" - MLS® $265,000 - Owner Motivated
Hammock Pointe, St. Cloud - Not a short sale or foreclosure. Quick closing and immediate occupancy available. 3 bedroom w/bonus room for den, 4th bedroom, or kids' retreat. Impressive entrance into foyer w/cathedral ceilings, fireplace and amazing 2 story windows to bring in natural light. Newly painted, wood floors, intercom system with multi-room sound, screened in porch. Located minutes from the new Medical City/Lake Nona and offers the small community feel. Home is nestled behind 100 year grandfather oaks and is full of charm. This is NOT your cookie cutter home on a "postage stamp" lot. Biking distance to A-rated Narcoossee elementary and middle schools.
OPEN HOUSE 11/14/09 8:30 am - 11 am during community garage sale event. All welcome!
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Housing Market Indicators:
Florida existing home sales:
(month-to-previous-year comparison)
Florida existing condo sales:
(month-to-previous-year comparison)
Florida existing home median price:
Florida existing condo median price:
Florida consumer confidence:
National existing home sales:
(month-to-previous-month comparison; all housing types)
National existing home median price
National (Freddie Mac) mortgage rate
(all housing types)
ORLANDO, Fla. – Oct. 23, 2009 – Florida’s existing home sales rose in September, which marks more than a year (13 months) that sales activity has increased in the year-to-year comparison, according to the latest housing data released by Florida Realtors®. September’s statewide sales also increased over sales activity in August in both the existing home and existing condominium markets.
Existing home sales rose 34 percent last month with a total of 14,419 homes sold statewide compared to 10,778 homes sold in September 2008, according to Florida Realtors. Statewide existing home sales last month increased 4.1 percent over statewide sales activity in August.
Florida Realtors also reported a 77 percent increase in statewide sales of existing condos in September compared to the previous year’s sales figure; statewide existing condo sales last month rose 8.9 percent over the total units sold in August.
All of Florida’s metropolitan statistical areas (MSAs) reported increased existing home sales in September; all but one MSA also showed a gain in condo sales. A majority of the state’s MSAs have reported increased sales for 15 consecutive months.
Florida’s median sales price for existing homes last month was $142,000; a year ago, it was $174,900 for a 19 percent decrease. Housing industry analysts with the National Association of Realtors® (NAR) note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in August 2009 was $177,500, down 12.1 percent from a year earlier, according to NAR. In Massachusetts, the statewide median resales price was $315,000 in August; in California, it was $292,960; in Maryland, it was $265,862; and in New York, it was $205,000.
NAR’s latest industry outlook notes positive signs in the housing sector, but adds that extension of the federal first-time homebuyer tax credit would help sustain a fragile recovery. “Now that the market is showing some momentum, we have an opportunity to achieve a more rapid and broader stabilization in home prices,” said NAR Chief Economist Lawrence Yun. The outlook for home sales and prices depends on whether the tax credit is extended, he said, describing it as “the best tool in our arsenal to encourage financially qualified buyers to stimulate the economy and help reduce the budget deficit.”
In Florida’s year-to-year comparison for condos, 5,088 units sold statewide last month compared to 2,870 units in September 2008 for a 77 percent increase. The statewide existing condo median sales price last month was $102,500; in September 2008 it was $153,500 for a 33 percent decrease. The national median existing condo price was $179,300 in August 2009, according to NAR.
Interest rates for a 30-year fixed-rate mortgage averaged 5.06 percent last month, a significant drop from the average rate of 6.04 percent in September 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Among the state’s smaller markets, the Pensacola MSA reported a total of 275 homes sold in September compared to 267 homes a year earlier for a 3 percent increase. The market’s existing home median sales price last month was $135,000; a year ago it was $146,900 for an 8 percent decrease. A total of 48 condos sold in the MSA in September, up 41 percent over the 34 units sold in September 2008. The existing condo median price last month was $190,000; a year earlier, it was $180,000 for a 6 percent gain.
© 2009 Florida Realtors®
Tax Credit for Homebuyers
First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.
Tax Credit Versus Tax Deduction
It’s important to remember that the tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing.
Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000!
Higher Income Caps
The amount of income someone can earn and qualify for the full amount of the credit has been increased.
Single tax filers who earn up to $125,000 are eligible for the total credit amount.. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible
Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sale price of $800,000.
------------------------
Remember, the new tax credit program includes a number of details and qualifications. For more information or answers to specific questions, please call or email me today.
In addition, you may be able to benefit from additional housing related provisions, including the following:
FIND AN AGENT THAT SPECIALIZES IN FIRST-TIME HOMEBUYERS
------------------------
Tax Incentives to Spur Energy Savings and Green Jobs
This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.
Landmark Energy Savings
This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.
Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing
This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs. Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.
Expanding Housing Assistance
This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.
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East Lake Reserve at Narcoossee, St. Cloud - We invite everyone to visit our open house at 123 Lena Ann on November 7 from 8:30 AM to 11:00 AM. There is also a community garage sale here along with Lake Pointe, Mill Stream, Lake Ajay, and East Park Cove. 4 bedroom, 3 bath pool home located on a 1/4 acre lot. Gourmet kitchen and huge master suite. Come view this gorgeous home.
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Rare 3 bedroom condo with 1800 livg area
• 1,801 sq. ft., 2 bath, 3 bdrm single story "Living Space On One Level" - 
MLS® $285,000 - Bring Your Offers
Baldwin Park, Orlando - Short sale. Here is your chance to own an amazing condo in Baldwin Park. 3-bedroom, 2-bath unit with wood floors, granite countertops, designer paint, upgraded tile in master, and wrap-around balcony. Bring your pickiest buyer as this property shows like a model.
OPEN HOUSE November 21st!
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$8,000 home credit still in play
Negotiations about whether and how to extend and expand the tax credit for homebuyers are moving quickly. Here are the latest developments.
NEW YORK (CNNMoney.com) -- Confused about whether lawmakers will extend the $8,000 first-time homebuyer credit and what it would look like?
That's understandable, since the situation is still very fluid.
Here's where things stand.
Support for the credit: There is still bipartisan support in Congress for extending the credit past Nov. 30 and making it available to more homebuyers.
Some of the issues still in play: Just how far past Nov. 30, the size of credit and how many more buyers would qualify.
It's still not clear where President Obama stands on the issue. Last week, Housing Secretary Shaun Donovan said the administration wanted to review more data to better assess the cost of the credit before weighing in.
What's on the table now: There appears to be movement toward a compromise deal that falls between the most and least generous proposals that have been put forth so far.
"There is bipartisan compromise to extend the credit through spring and expand it to existing homeowners who are stepping up to a different home," financial policy analyst Jaret Seiberg wrote in a research note for Concept Capital's Research Group.
The latest idea under discussion is a credit worth up to $8,000 for first-time homebuyers and up to $6,500 for homeowners looking to trade up to a bigger primary residence and who have already lived in their current home for five years.
To qualify for the full credit, however, homebuyers must have adjusted gross income of less than $125,000 ($225,000 for married couples filing jointly).
In addition, the credit would only apply to homes sold for $800,000 or less. Contracts to buy a home must be signed by April 30, 2010, and the deals must close by June 30 in order for a buyer to qualify for the credit.
Rationale for extending the credit: Supporters of the credit say it has helped to boost existing home sales in recent months. Extending the credit would help further support sales, stabilize housing prices and generate jobs in the face of an expected rise in foreclosures next year, which is expected to put downward pressure on prices.
If the credit is allowed to expire, they say, the housing market and the broader economy will grow moribund again.
"The most fundamental argument for the credit is that nothing works in the economy if housing is falling -- it hurts household wealth and credit becomes tight," said Mark Zandi, chief economist at Moody's Economy.com. "[The credit] is a good insurance policy. It's vital to stem the housing price declines."
What critics say: Though extending the credit has bipartisan support, it is not without its critics.
Critics, while acknowledging that the credit has helped to generate additional home sales, say it has been poorly targeted and therefore not cost-effective.
They point to estimates that only 10% to 20% of the nearly 2 million homebuyers who will have gotten the credit by Nov. 30 bought solely because of the tax break.
http://money.cnn.com/2009/10/28/real_estate/homebuyer_credit/index.htm?postversion=2009102816
In other words, a large majority of homebuyers who benefited from the credit would have bought their homes without it.
By one economist's estimate, the government may have spent $43,000 for each sale that occurred strictly because of the credit.
In a position paper published this week, the liberal Center on Budget and Policy Priorities said making the credit available to existing homeowners would not help stabilize housing prices or reduce inventory.
Latest on the $8,000 tax credit
Good morning, in case you have not received this from NAR, here is the latest on the $8,000 tax credit courtesy of Linda Goold, NARs tax counsel.
The Extended and Expanded Tax Credit agreement includes the following provisions:
Amount: $8,000
Who: First-time homebuyers -- same definition as current law
Amount: $6500
Who: Repeat purchasers. Have used previous home as principal residence 5 of the 8 previous years.
Income Limits: $125,000 for single filers/$225,000 for joint filers. Same for first-time & repeat/move-up buyers
Limitation on cost purchased home: $800,000
Time Frame: December 1, 2009 to April 30, 2010 plus 60 Day extension if binding contract is in place by April 30, 2010
Anti-fraud measures have been added.
NAR will be monitoring the progress and any potential changes to the bill. NAR will send out a notice when a vote has occurred. There has not been a final vote as of yet.
We have all heard the new dirty word of home building..Chinese Drywall. Homeowners that purchased homes with this type of drywall have been devastated and their home a total loss. What is it? Where does it come from? How can you tell if you have it? Download and view this powerpoint presentation given by HomePro Inspections which will take you through the history, show pictures, and provide you with the latest information on testing.
Click Here to be directed to the powerpoint presentation on information you should know before buying a home.
Attachment(s): Updated Chinese Drywall PresenttionABC.pps
Congratulations to my wonderful client and friend E.H and B.C.
Baldwin Park beauty with all the upgrades..granite counters, upgraded tile / cabinets; wood flooring, stainless appliances, wood blinds. Interior well maintained. Front porch with pillars, 3 bedroom, 2 bath, with bonus room. Over 1800 square feet of living space! Listing agent, Lisa Gould, Gould and Company, Selling Agent, Debbie Irons, Orlando Classic Homes, www.BuyAClassicHome.com, (407) 908-2890.
I am very happy for you both as you enjoy your dream home.
If you or anyone you know is looking to buy or sell real estate in the Baldwin Park, East Orlando, Lake Nona, or Saint Cloud, Florida area, please give me a call to discuss your options. I get them closed!