home buyers
Securing an FHA mortgage is about to get more expensive. In a statement issued Wednesday, the Federal Housing Authority outlined policy changes to its mortgage assistance program. The shift is meant to both reduce the government group’s portfolio risk while strengthening its overall financials. FHA has announced new guidelines for financing to be in effect this spring. In an effort to beef up the reserves for FHA, new costs will be associated with an FHA loan. For homebuyers with a credit score less than 580, the minimum downpayment will be 10%. For credit scores above 580, the downpayment is still...
The new Good Faith Estimate makes its debut January 1, 2010. The new format will make it easier for Indianapolis home buyers to compare loans. Expanded from 1page to 3, the legislators responsible for the new Good Faith Estimate want it to be simpler for homeowners and home buyers to understand than the former version. By most accounts, Congress will meet this goal. The new Good Faith Estimate includes plain-English explanations of every fee, charge, and interest payment involved in a purchase or refinance. It also includes a section called “The Shopping Cart” in which applicants can compare lenders. The new...
APR is an acronym for Annual Percentage Rate. It’s a government-mandated calculation meant to simplify the comparison of mortgage options. A loan’s APR can always be found in the top-left corner of the Federal Truth-In-Lending Disclosure. Because APR is expressed as a percentage, many people confuse it for the loan’s interest rate. It’s not. APR represents the total cost of borrowing over the life of a loan. “Interest rate” is the basis for monthly mortgage repayments. The main advantage of APR is that it allows an “apples-to-apples” comparison between loan products. As an example, a 5.000 percent mortgage with origination points and fees will...
HUD Homes are a Good Value HUD homes in Indianapolis generally represent a great value for the home buyer’s. Since the inception of the $8000 tax credit for first time home buyers, HUD owned homes have literally been “flying off the MLS active list”, with many being sold in the first ten days. As we near the end of the time frame for first time home buyers to receive the tax credit, REALTORS® in Indianapolis are witnessing a surge in activity and prices of HUD homes. Why the sudden interest in HUD homes? Although HUD doesn’t go in and repair...
If you’re thinking about buying an Indianapolis home in the next few months, you may want to move your date up. New Fannie Mae guidelines will make getting approved for an Fannie Mae loan more difficult. For the second time in less than 3 months, Fannie Mae announced changes to its mortgage guidelines. Inits official announcement, Fannie Mae details the updates, meant to reduce the mortgage firm’s overall risk. The first major change is with respect to credit scoring. All Fannie Mae loans — whether underwritten electronically or manually — require a 620 credit score minimum. There are very few exceptions. A...
More commonly called “points”, discount points are up-front fees charged by mortgage lenders in exchange for lower mortgage rates. The cost of one point is one percent on the loan size and discount points appear on Line 802 of the HUD-1 Settlement Statement. As a general guideline, each point paid lowers a mortgage lender’s offered interest rate by 0.250%. For example, a $200,000 home loan offered at 6.000% can be had for 5.750% if the borrower agrees to make an up-front payment of one point ($2,000). Discount points can be an effective sales strategy for home sellers. In some areas...
The answer really depends on your personal objective and time frame. The longer you plan to live in a home, the more sense it makes to own. While I can’t simply answer the question for you, I have found this cool tool which can assist you in evaluating the costs involved for both options. By inserting a few details you can determine how long it would take to break even, depending on down payment, interest rate and costs to buy. You can also utilize the advanced settings to include more specific costs and deductions. This is simply a “numbers” tool...
There are many factors to consider when purchasing a home besides the size and location. When considering the purchase of a home which is governed by a Home Owners Association, you need to confirm the CC&R’s or Covenants, Conditions and Restrictions allow you the flexibility to live and enjoy the lifestyle you want. Every HOA has different guidelines and restrictions; some are much stricter than others. While many enjoy the benefits a Home Owner Association provides in the development and continuity of the neighborhood, there are others who refuse to live in such a neighborhood. Some of the more common...
