Saturday, March 31, 2012

10 Reasons To Consider A USDA Mortgage

Established in 1949, the USDA Rural Housing Loans program of the US Department of Agriculture has helped more than 2.7 million rural citizens the take advantage of the opportunity of to own a home. For over half a century, the program has formed partnerships with carefully selected lenders in each state. In turn, the lenders provide the loans with a repayment guarantee from the USDA, in case the loan should ever default. The USDA backing means that loans are less risky to mortgage lenders who can proceed with confidence and offer home financing to those individuals who meet the USDA Rural Development guidelines.

For those who qualify a USDA mortgage can offer many advantages over other home loan programs available in the marketplace. Here are 10 reasons to consider a USDA Rural Housing Loan:

1. In 2009, changes were made by the USDA in conjunction with the American Recovery and Reinvestment Act that make even more potential home-buyers eligible for this type of loan.

2. USDA Rural Housing loans are not just for farmers. Individuals wishing to buy a home outside of a metropolitan area may qualify for this type of loan program.

3. This is one of few zero money down mortgage programs available to borrowers outside of the military. The 100% financing option is one of the most attractive features of a USDA mortgage, as it can be tough for first time home-buyers to come up with a five, ten, or even twenty percent down payment when purchasing a home.

4. Borrowers are not required to take out private mortgage insurance, and the required 2& guarantee fee can be financed into the loan.

5. Families with lower incomes and those with less than perfect credit may be able to qualify. In fact, this program is specifically for those with lower incomes, and borrowers who make above a certain amount (varies by county) may not qualify.

6. Secure, 30-year fixed rate loans, make for lower monthly payments that are geared towards ensuring the successful repayment by borrowers.

7. USDA mortgages are intended to finance "modest dwellings", which can help buyers avoid purchasing a home that is above their means.

8. Less restrictive guidelines mean that applicants can qualify with fewer cash reserves when compared to many other programs.

9. Seller paid closing costs are permitted, up to a certain percentage of the loan amount. This can enable a home purchase with few up front out of pocket expenses.

10. Homes that are "fixer-uppers" may qualify for extra funds for rehabilitation.

It is important to understand that not everyone will qualify for a USDA mortgage. The property must be located in an area that is designated as "rural" by the USDA, and the loan amount must fall within allowable limits (varies by county.) The borrower must meet the guidelines for eligibility and be able to show based on their income and credit history that they will be able to repay the loan as agreed. For those who qualify a USDA Rural Housing loan can help make cost effective home ownership a reality.

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Thursday, March 29, 2012

Simplified Summary of Fannie Mae Mortgages

Many people believe Fannie Mae mortgages are owned by the federal government. However, this enterprise is no longer owned by the government and is a now a government sponsored enterprise (GSE); meaning it is privately owned, but publicly chartered.

Fannie Mae mortgages make up almost half of the home loans in the U.S. market. Combined with real estate loans owned by Freddie Mac, these two GSE's have amassed a mortgage portfolio that exceeds $5 trillion.

This entity does not originate mortgage loans. Instead they purchase mortgages from banks and bundle them in packages to sell to investors. The Federal Reserve Board places limitations on how much credit banks can extend for real estate mortgages. To keep credit lines open, Fannie Mae purchases loans directly from banks. Essentially, this organization is the primary entity that keeps credit lines open so banks can engage in additional lending.

Fannie Mae was originated in 1938 under the leadership of President Franklin Roosevelt. Its intended function was to offer affordable housing opportunities to every American that wanted to own a house.

The enterprise was owned by the government until 1968 when it shifted to a private shareholder-owned enterprise. For the next 39 years, the company prospered and offered additional programs to help Americans achieve their dream of homeownership.

In 2007, Fannie Mae was nearly decimated by the abundance of foreclosures that erupted from subprime lending practices. In September 2008, the Federal Housing Finance Agency placed Fannie Mae and Freddie Mac into conservatorship and infused billions of dollars from taxpayers to keep the entities afloat.

While bank bailouts have been an explosive topic that enrages American taxpayers, the truth of the matter is if these GSEs hadn't been placed into conservatorship the U.S. real estate market would have completely fallen apart.

The controversy that encircles the government bailout not only involves using taxpayer money, but also the fact that the government agreed to provide unlimited funding to ensure neither entity failed again.

There is no doubt that many people view Fannie Mae in a negative light. However, this GSE has implemented several positive changes since the bailout. In addition to establishing programs to offer assistance to homeowners facing foreclosure, Homepath Mortgage was setup to help people buy bank foreclosures at reduced costs.

Homepath properties are comprised of residential houses that were repossessed via foreclosure or returned to banks using deed in lieu of foreclosure. Homepath Mortgage offers special incentives to buyers that purchase distressed properties including low down payment requirements and reduced interest rates.

Fannie Mae also set up the website of to provide information and resources to homeowners faced with foreclosure. The entity established mortgage help centers in various locations across the nation where homeowners can obtain complimentary housing counseling. Homeowners that don't reside near a mortgage help center can acquire counseling over the phone.

Available programs include: loan modification, mortgage refinance, deferred payments, real estate forbearance, principal reduction, and foreclosure alternatives of deed in lieu, real estate short sales, and deed for lease; a program that lets homeowners assign the deed to their home back to the bank and enter into a leasing agreement so they don't have to move.

One certainty is that Fannie Mae isn't likely to be dissolved in the near future. Homeowners that need help with home loans ought to consider making use of Fannie Mae mortgage programs that their tax dollars helped pay for.

Article Source:

Tuesday, March 27, 2012

FHA 203K Loans Bring New Life to Old Homes

The Federal Housing Administration (FHA), which is part of the Department of Housing and Urban Development (HUD), offers many home loan programs to help foster American home ownership. Perhaps one of the most unique programs is the FHA 203K loan. This program is designed to help communities revitalize their neighborhoods by providing loans to rehabilitate, repair or modernize homes.
According to HUD, an FHA 203K loan can be used to rehabilitate or improve a one-to-four unit dwelling in one of the following three ways:
  • 1) To purchase a piece of property and the land on which it is located and rehabilitate it.
  • 2) To purchase a piece of property on another site and move it onto a new foundation on a mortgaged property and rehabilitate it.
  • 3) To refinance existing liens on the property and rehabilitate it.
The maximum amount that one can borrow on an FHA 203K loan cannot exceed 110% of the home's value after the rehabilitation is complete. The minimum amount one can borrow is $5,000. Many homeowners find these loans so helpful because they can be used it for such a variety of improvements. A borrower can use it to completely rehabilitate an old home or remodel a bathroom, repair a chimney, improve flooring, build a skylight or even complete major landscape work!
When applying for an FHA 203k loan, one or two appraisals will be required. Some lenders will require an "As-Is" appraisal to be done before rehabilitation takes place. This initial appraisal will determine the current value of the home. However, some lenders may deem the "As-Is" appraisal not necessary and will use the contract sales price on a purchase transaction instead depending on when the property was purchased.
After the "As-Is" value is determined, the borrower must submit their planned repairs to the FHA. After these repairs are submitted, another appraisal called an "After Improved Value" appraisal will be done to determine the fair market value of the property once improvements are completed.
To obtain a correct "After Improved Value" appraisal, it's important to include all of the eligible expenses in the cost of the rehabilitation. Eligible expenses that can be included are: cost of materials, labor, contingency reserve, overhead and construction profit, up to 6 months of mortgage payments, permits, fees, inspection fees by a qualified home inspector, licenses and consultant and architectural/engineering fees. These expenses will help the lender determine the maximum mortgage amount that the borrower will receive. It's important to include all of the cost and expenses into the plan because this will help the lender determine how much money is really needed and allow them to correctly assess the necessary mortgage amount for the project.
Once the borrower receives the funds from the mortgage, repairs on the house must begin within 30 days after closing and be completed within six months of closing. An approved FHA official will verify that the project is complete and the borrower may begin enjoying their beautifully renovated home. Help bring new life into an old home with an FHA 203K loan!

Article Source:

Sunday, March 25, 2012

Home Buyer Tip: Home Warranties

Negotiating a home warranty at the seller's expense is a great way to take some of the worry out of home ownership

Thursday, March 22, 2012

Are You Ready To Be A Homeowner?

That time when you are ready to buy a home is probably one of the most exciting phases of life. If you are seriously planning to finally buy your first property, you have to first understand that buying a house is a sizable investment. That said, it means you don't just jump right in and buy the first house that you can afford. You have to be really ready to be a homeowner and would therefore need to know what to look at before you start on your home buying journey.

First off, ask yourself if you know what you want. First time home buyers sometimes fall into paying for a house that they would fall out of love with in a couple of years. Thus, they would be trapped into paying a house that they do not enjoy living in.

You have to understand that you should buy a home because you need it. Therefore you need to look for the things that you need more than things that you want. Sure, an indoor pool could be a great addition to any home but a house with that amenity could cost you a lot. Are you willing to sacrifice that much just for that single amenity?

Remember too that your lifestyle could change drastically as you go on with life. For example, you might enjoy living in the city today because it is near your office and there are plenty of places to go to. Further down the road though, you might think about having a quieter life thus requiring you move to a more rural setting.

Another instance when you would need to move is when you start to have a growing family. Today, you might not feel the need to move to an area with easily accessible schools but alter on, you could be forced to move just to be closer to a school for your kids.

Then, there's also the matter of your finances. Can you pay for a particular property with your current earnings? Can you categorically say that in a couple of years, you would be in a better financial situation? If you can, then you might be able to afford to buy a property that might seem out of your price range today.

Having a real estate agent working with you as you go through the process of buying a home would be of great help. A good agent could not only help you through the process but also help you decide whether you are ready to buy a home.

Article Source:

Monday, March 19, 2012

Saturday, March 17, 2012

Home Equity Loans With Bad Credit Are Available: Get the Facts

Those with a poor credit score and own their homes look at the prospect of a home equity loan as very appealing. Getting a home equity loan with bad credit, though not as simple as it once was, is still possible and happens every day. When you are in need of money for paying medical bills, settling debt with credit card companies or even if you want to finance a home improvement project, using the money you receive from a home equity loan can make a big difference. This secured loan option is the best choice for those whose credit scores are low.
Bad Credit: Know the Facts
No matter the reasons, having a poor credit score (anything lower than 600) is a major hurdle in acquiring a loan of any type. However, when looking for loans with bad credit, a secured home equity loan will be far easier to acquire. Why? Because secured loans have property (your home) attached to them that can be repossessed if you fail your repayment. This means that the lender is given a certain level of security in extending you this loan.
If you have poor credit, home equity loans, as a secured lending option, may be the only choices that you have that will still yield a reasonable interest rate and other terms. Therefore, asking for a home equity loan, rather than an unsecured personal loan, with bad credit can make the difference in terms of being accepted or rejected by a lender.
Make Changes to Improve Your Credit Score
Of course, using the value of your home as leverage any time that you want to borrow money can be a risky venture, and it is only possible for as long as you have equity (or value) in your home. Therefore, you want to make positive changes over time in order to improve your poor credit and get yourself into a better position to borrow in the future. In order to do this, take note of the major causes of a bad credit score:
1. Late Payments
The number one reason people have poor credit scores is the inability to make timely payments on the loans they already possess. Using a home equity loan to consolidate these payments can help to prevent late payments since you will only have one payment to make each month.
2. Too Many Different Payments
Similar to late payments, having too many open, active credit accounts makes lenders think you are constantly looking for money. Again, the use of a home equity loan can help reduce these payments and improve bad credit over time.
3. Bankruptcy
If you have filed for bankruptcy in the recent past (less than two year ago) you will not be able to get another loan. However, after this time has passed, you can show lenders that you have reformed through responsible loan payments and managing of debt.

Article Source: 

Thursday, March 15, 2012

Refinancing Your Home - Is It a Smart Choice?

If you currently have a mortgage, would you think about refinancing your home? Well, some might argue that there can be no need. However, there are a few others who would totally go for such an option.

The most common reason why many opt to refinance their homes is so that they will get lower rates for their new mortgages. To start, assess whether your current rates are worse or better than the other rates available out there. If you see that your mortgage rate is lower, then, there might be no need for you to refinance. However, a more common situation will be that the rates that are offered these days are significantly lower. This means that many will consider refinancing their homes as they will be able to benefit from the difference in rates.

In every month, you will be able to experience paying a lower rate. That will be a big blessing especially for a family that has a tight budget. The money that you will be able to get from this can be used to improve household conditions. You may also save it for whatever personal purpose you may have.

There might be people who will decide to refinance because they are looking for more stable rates. No one wants to be alarmed one day about a significant increase on your mortgage's rates. You would want to be sureness and consistency. Sometimes, this is also to show that you still have control over your current situation.

This will be the situation of those who first had adjustable rate mortgages. To reduce their risks they will decide to refinance and get stable and fixed interest rates. And even if you are already out of the discounter period, for example, you will have the peace of mind when it comes to your mortgage rate.

At other times, there are homeowners who refinance so that they can get mortgage from a property that is already paid-off. This can be possible as there are those who will cash out and choose to buy another property in some other place using cash. This can be a common practice. The situation will be that you wanted to acquire another property. And so, to be able to afford the estate that you are eyeing, you will be refinancing your current property. Actually, you can take the money and use it for any other reason that you have in mind.

For those who want to be able to shorten the term of their mortgage, they might also do this. These are those who are willing to increase their monthly payments. It can be that they want to be free of debts as soon as possible. Also, it should be noted that short-term loans have lower interest rates than long-term loans. And so, a lot can benefit from such a condition. In addition, when you want to have a better credit status, you will find means to pay off your debts and have access to better interest rates for your other plans.

Article Source:

Tuesday, March 13, 2012

Top 10 Reasons to Buy Instead of Rent

Whether you're a happily unattached working professional or a young couple with a couple of kids in tow, you are probably questioning the logic of buying your own house when you could just rent. Even though the process of acquiring a house may seem a lot more complicated compared to simply paying your monthly rent for an apartment, you'll eventually find many reasons on why buying a house actually works to your advantage. Here are just 10 things to look forward to when you finally decide to become a home owner:

A solid investment. Generally speaking, house prices increase over a given period of time. It's a good investment, because this means that if you buy a house today, you can sell it off at a higher cost in, say, two years from now.

Tax benefits. When you purchase a house, you can actually deduct your mortgage interest from your taxable income. Of course there are several determining factors for this, like mortgage size, interest rate, and your tax bracket. But even with all things in consideration, it's a given rule that the new the mortgage, the higher the amount of interest that you're required to pay - and that spells out a bigger tax break as well.

A real property. Imagine this: you'll actually be buying your very own property instead of continually paying for something that belongs to your landlord. Isn't that a nice thought?

Low interest rates. At the moment, interest rates in the real estate market are fortunately lower compared to the previous years. This spells out that you can pay off your mortgage easier - and get rid of it faster as well.

Equity in your own home. You can make use of your home equity to get more affordable loans which can help finance other things you need - maybe your much-deserved vacation or money to buy new home decorations.

Emotional security. With your very own home, you no longer have to fret about irate landlords or rent increases every so often. You will most likely have an idea of what your mortgage fee would be like for years, so you can have a measure of emotional security in that, instead of continuously worrying.

Decorate and renovate. It's your house, so it's your call. Add your personal touch to every corner of your home, or hire a designer for that professional flair. You can do whatever you want, and you only have yourself (and the people you live with) to consult.

Have a pet and garden. Here are two of the best things about having your very own house: owning a little garden in the backyard, and being able to keep pets. There are not many apartments that let you have both.

Putting down roots. Being a home owner makes you more established in many things. You can seriously get to know your neighbors, or let your kids meet new buddies at the park. Many people don't consider such things when they're renting.

A greater community voice. As a local homeowner, you can have more say in matters like school issues and traffic regulations.

Article Source:

Saturday, March 10, 2012

Using FHA 203K Loan to Purchase a Fixer-Upper

Across there are a large number of short sale homes available to buyers. A short sale is a home being sold for an amount less than the existing mortgage balance. These homes often have a few cosmetic repairs that need to be made in order to make the home more presentable, if not safe. For years the issue of repairing a home prior to purchase was a catch 22. The bank or seller was not willing to spend extra money on a home that they are selling. The buyer could not make the repairs because they did not legally own the home. The FHA 203k loan solves that problem with ease.
Two Kinds of Loans
The Federal Housing Authority (FHA) offers a loan called the 203k mortgage, named after the code section where the loan is found in the FHA guidelines. This loan is offered as a Streamline version and the regular version. The streamline was designed to offer lower amounts designated for repairs and slightly less paperwork. Both loans are ideal for homebuyers who wish to purchase a home in need of some repairs.
How the Loan Works
The loan program allows buyers to purchase a home based on the sales price. In addition, the buyers can borrow extra money to make the necessary repairs. Once the loan is approved and closed, the extra money is placed in an escrow account. The contractor that is doing the work will receive payment once the work is completed. This protects the borrower and the lender against problems with the repair process.
The amount needed for repairs is added to the loan for the purchase and the homebuyer makes one payment, at one interest rate, on the entire loan. Since mortgage rates are so cheap right now it is a wonderful way to buy a home that may be priced below market value due to some simple fix-ups.
Loan Amounts
The Streamline 203k loan will allow homebuyers to borrow a minimum of $5,000 and a maximum of $35,000 to be used towards the repairs. The regular 203k loan allows much more as a percentage of the sales price and the estimated appraised value after the proposed repairs have been made. The regular 203k loan will need the involvement of an appraiser, home contractor and loan officer from the very beginning to make sure the loan and repairs meet the guidelines of the program
What Can be Done with 203k?
Homebuyers often ask about the types of repairs that can be done with the Streamline 203k program. The following list shows some of the more popular tasks accomplished using this type of loan
  • New gutters and a new roof
  • New Heating and air conditioning system or repairs to the existing system
  • Plumbing updates and repairs
  • Electrical updates and repairs
  • Bath and kitchen remodels, to a lesser extent
  • New flooring of any type; wood, carpet, tile
  • Painting for both exterior and the interior
  • New windows and doors
  • Energy efficient appliances
The 203K loan allows many types of repairs and improvements that can greatly enhance the value of a home and give buyers a chance to purchase a place at a savings. This loan is ideal for short sales or foreclosures.

Article Source:

Thursday, March 8, 2012

VA Home Loans Provide Excellent Opportunities for Veterans

Those serving in the Armed Forces of the United States, or those who are veterans of that service, have an exquisite way to buy a home because of the care Uncle Sam bestows on those in uniform. These VA home loans are not handouts, the are rewards for service. These loans do not hand money to veterans, nor are they loans fomented by the government; they simply apply some rules that make it easier for the veteran or service member to realize the American dream of home ownership.
Rather than a cash grant or other similar transfer, the Veterans Administration puts a guarantee a Va home loans made by traditional financial institutions such as banks, credit unions or mortgage companies. The Veterans Administration underwrites these loans. Thus, should the home buyer default, the lender knows that the government will find the money to cover the cost of the loan. That is putting it simply, of course, but that is the base. This guarantee makes it more likely that the veteran or service member will be approved for the loan.
VA Home Loans Save Down Payments, Closing Costs
Va home loans save money for veterans and service members in that they replace the protection of a down payment that most lenders require with the protection of the full faith and power of the federal government. Unless the buyer opts to pay one, VA home loans require no down payment. Another way a veteran will see savings is that the government limits the amount of closing costs and all the other nit-picking costs and fees that a lender can charge a borrower.
Being overcharged with administrative fees is impossible. No up-front processing fees or other consideration fees can be charged. Closing costs become the expense of the seller. If some fees must be exacted on the veteran or service member taking the VA home loan, their amount is limited and are very much lower than found with non-VA home loans.
Lower Monthly Payments with VA Loans
The monthly mortgage payments for VA home loans are often considerably less than for standard home loans. A good part of the reason lies in the fact that no mortgage insurance is required. Mortgage insurance is another way lenders have of protecting themselves should a buyer default. With the government underwriting the loan, no insurance is required. There are restrictions on the rates of interest that can be charged.
Of course, with lower interest rates, monthly payments are lower. Another maddening fee that can beset standard home buyers is the pre-payment penalty. Why anyone would charge a fee for paying off a loan ahead of time is probably just an indicator of institutional greed. If a veteran has the money to pay off a loan before it has matured, he or she is not penalized for making good on the loan.
Bad Credit Borrowers Have an Advantage
Because of the governmental guarantees, veterans or service members can usually land a home loan. If the service member or veteran has been meeting their bill obligations for the past year to eighteen months, a VA home loan can still be approved. And interest rates for VA home loans cannot be adjusted due to credit ratings so they can remain reasonable.
Other Advantages of a VA Loan
If a veteran or service member choose to sell the home, the mortgage may be assumable by the buyer. The marketability of such a home is greater, making it easier for the veteran to sell. Appraisers for VA home loans must be picked at random rather than chosen by the lending institution. This makes it unlikely that appraised values will be skewed in favor of the lender. A veteran or service member has many advantages when it comes to buying a home. These advantages are rendered as a reward for service.

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Wednesday, March 7, 2012

HARP 2.0 Program - Solano Mortgage

Jim talks about HARP 2.0 (Home Affordabel Refinance Program) in the current market. Call them to day or check out

Sunday, March 4, 2012

Home Appraisals in the New Market - Solano Mortgage

Jim Porter explains how appraisals are done in the new home market. Her also gives some tips to ensure your property is appraised properly. See more at, or call 707-449-4777.

Friday, March 2, 2012

This Month in Real Estate (US) March 2012

Hello and welcome to This Month in Real Estate. I'm JAY PAPASAN.

Our top story: the secret to getting your house sold more than a month faster than the competition. 

According to KW research almost half of sellers who price their house according to their real estate agents' interpretation of its market value sold almost twice as fast and for more money than the competition. 

For more, we turn to News You Can Use.


Many sellers like the idea of pricing the house high at first to test the waters. This strategy certainly helps to sell houses. 

Unfortunately, the irony is that the houses that sell won't be yours. That's because pricing your house high only provides a high comparable for other houses for sale in your area.

The fact is that many buyers' agents will actually show your house to clients with the aim of showing what a steal the house down the street really is. For those buyers, seeing is believing.

Smart sellers price right in order to get good offers early—in the first couple of weeks. You do not want to do anything that risks your house becoming "old and stale" in the eyes of buyers and buyer agents. 

Yes, a buyer can always make an offer. You just want to make sure it's on your house. 

For more information on pricing your house to sell, talk to your local real estate agent.


That's all for This Month in Real Estate. Thank you for joining us.