July 30th, 2008
President Bush has signed a massive housing bill intended to provide mortgage relief for 400,000 borrowers with $68 billion in loans. Many struggling homeowners will benefit from the program. Here’s what Idaho homeowners need to know.
Who’s eligible?
Qualified borrowers must live in their homes and have loans that were issued between January 2005 and June 2007. Additionally, they must be spending at least 31% of their gross monthly income on mortgage debt to be eligible for the program.
They can be up to date on their existing mortgage or in default, but either way borrowers must prove that they will not be able to keep paying their existing mortgage - and attest that they are not deliberately defaulting just to obtain lower payments.
Before homeowners can get FHA-backed mortgages, they must first retire any other debt on the home, such as a home equity loan or line of credit. Borrowers are not permitted to take out another home equity loan for at least five years, unless it’s to pay for necessary upkeep on the home.
To get a new home equity loan, borrowers will need approval from the FHA, and total debt cannot exceed 95% of the home’s appraised value at the time.
How can I apply?
Borrowers can contact their current mortgage servicer or go directly to an Idaho FHA-approved lender for help. Lisa Kratz at Apex Mortgage can help you right away at 208.888.9251 or www.myidahohomeloan.com
How does the refinancing process work?
This is a voluntary program, so lenders holding the original mortgage have to agree to rework a given loan before things can get started. The bill requires lenders to make major concessions, writing down the value of the loan to 90% of the home’s current value. In areas where prices have plummeted by as much as 20%, that will mean a substantial loss for the lender.
But lenders won’t sign off on a workout unless they think that they’ll lose less money on that than they would by allowing a home to go through the costly foreclosure process
Each loan will have to be underwritten by an Idaho FHA lender on a case-by-case basis. That means the banks will do a new appraisal to determine the home’s current value, as well as examine and verify income statements, bank accounts, job histories and credit scores.
Based on that new appraised home value, the FHA lender must determine how much the original lender has to reduce the original mortgage, so that it will reflect 90% of the home’s market value.
If the original lender agrees to the writedown, the new lender buys the old loan and takes over the reworked mortgage.
As part of the deal, the old lender writes off any fees and penalties on the original mortgage, including prepayment penalties, and accepts the proceeds from the new loan on a paid-in-full basis. Additionally, it pays the FHA an up-front premium equal to 3% of the mortgage principal.
What does it cost?
There should be little up-front costs for borrowers to bear. Loan origination fees will vary by lender, but these can usually be paid by the borrower over the life of the loan in the form of a slightly higher interest rate.
However, the refinanced loans do come with many strings. For one thing, borrowers are responsible for paying an insurance premium to the FHA guaranteeing the loan, which will be 1.5% of the principal annually.
Borrowers also agree to share any profits from future home-price appreciation with the FHA. To do that, they’ll pay a “3% exit fee” of the mortgage principal to the FHA when they resell or refinance.
Plus, they’ll agree to pay the FHA 100% of any profits they realize from higher home prices if they sell or refinance within a year. So if the original loan principal is $200,000 and the home sells for $250,000, the borrower will owe the FHA $50,000, minus costs.
After a year, borrowers will share 90% of the profits with the FHA. The percentage keeps dropping in 10% increments to 50% after the fifth year, where it stays.
What will I save?
Savings depend on what borrowers are paying for their present loan and where they live, but for most people it will be substantial, even after factoring in the FHA fees.
Additionally, the FHA loans carry reasonable interest rates, which are fixed for the life of the loan, as opposed to a subprime adjustable-rate mortgages.
By Jeanne Sahadi, CNNMoney.com senior writer
Last Updated: July 30, 2008: 7:47 AM EDT
Apex Mortgage | Meridian, Idaho | (208) 888-9251 | myIdahoHomeLoan.com
Whether you’re shopping for an automobile, electronics, travel services or Idaho real estate, the internet has revolutionized the way people gather information about products and services. For people who are thinking about buying a new home, the change is apparent, as well. The internet now is the number one source of information. With online listings of homes for sale featuring streaming videos, panoramic pictures, prices, recent comparable sales, real estate taxes, Idaho
mortgage loan options, and more. Indeed, potential home buyers who choose to use the Internet to access new listings and narrow their search may be the best informed and most efficient that today’s real estate professionals have ever dealt with!
The Roll of an Idaho Real Estate Agent
In your typical home sale, there are two real estate professionals: one who works with the seller — called the listing agent — and one who works with the buyer — called the selling agent or buyers agent. The listing agent generally shares the sales commission with the selling agent who finds the buyer for the home. But the seller pays
both agents, usually from the proceeds of the sale. In Idaho agents are required to disclose the type of relationship they have with you, and then, it’s up to you to decide whether you want them to represent you. Whether you meet an agent at an open house or get in touch with one on your own, be aware that they need to disclose important information about their business relationship with you. Just feel free to ask them upfront.
Think about this. If you hired a professional Idaho real estate agent, to sell your home at the highest most desirable price aren’t they ultimately working for you? If I were buying a home today, I would seek my own independent agent to work for me and help me secure the best possible deal in today’s buyers market.
Written by Lisa Kratz Apex Mortgage | Meridian, Idaho
| (208) 888-9251 | myIdahoHomeLoan.com
Not too long ago, no-down payment loans were at the peak of popularity for homebuyers.
With the recent credit crunch lenders have tightened their standards, borrowers once again are expected to “put some personal interest” into the transaction and cash down payments are definitely back in style.
The biggest advantage of a down payment today is simply the ability to qualify for a loan, since only a handful of so-called Idaho “zero-down” loan programs still exist. Yet down payments have other benefits, too!
One great way to look at investing from the start is the more money you put down to buy a home, the smaller your monthly payments will be, A down payment becomes a homeowner’s instant equity when the purchase transaction closes, and that equity can be borrowed against with a home equity loan or line of credit. Guidelines to qualify for these loans have become much stricter. Some loan programs require cash reserves for this very reason.
Benefits of a down payment:
• Borrow less money to buy the same-priced home.
• Get a better overall deal from your Idaho Mortgage Lender loan products and programs
• Get a lower interest rate, due to less risk
• Pay less for upfront and or monthly mortgage insurance.
• Simply avoid private mortgage insurance altogether, if the down payment is at least 20% of the purchase price.
Almost all Idaho Lenders require a down payment to be “sourced and seasoned,” meaning the lender needs to know how you obtained the funds and that you’ve had control of those funds for at least several months. Gifts and seller’s concessions are acceptable, up to the percentage allowed by the loan program, but borrowed money cannot be used as a down payment because it is debt that has to be repaid.
Many homebuyers have difficulty coming up with a down payment. Here are some ways to do it!
5 ways to get your Idaho Down Payment:
1. Get a gift from your parents, friends, or other family member
2. Sell your free and clear motorcycle, car, boat, guns or other assets
3. Liquidate your stocks, bonds and mutual funds
4. Take loan from your 401k and pay the interest each month to yourself
5. Get a gift from the seller in a form of down payment assistance
Government-backed programs allow smaller down payments.
Two government-run programs are designed to help homebuyers who haven’t saved much for a down payment. An Idaho FHA Loan (The Federal Housing Administration), offers mortgage insurance that allows qualified buyers to purchase a home with a 3-percent down payment, all of which may be a gift. An Idaho VA Loan (The U.S. Department of Veterans Affairs) offers a home-loan guarantee program that helps many veterans.
Written by Lisa Kratz
Apex Mortgage | Meridian, Idaho | (208) 888-9251 | myIdahoHomeLoan.com
The Process of Refinancing can seem not only confusing but daunting. When you refinance your Idaho Mortgage, you take out a new home loan and use some or all of the proceeds to pay off the existing one. If you obtain a lower interest rate on your new loan than you had on your old one, you’ll be saving money. If you refinance and payoff debt this could also save you money not only each month but hopefully at the end of the year come tax season when you write off your total mortgage interest.
When is it the best time to refinance?
There are two good times when it’s wise to refinance your mortgage. One good time to refinance your Idaho Mortgage Loan is when you’ll save money by getting a lower interest rate. In this case, you’ll want to make sure that your monthly savings will pay back your refinancing costs while you’re still living on the property.
If you are like the millions of other American’s experiencing difficult cash flow issues, you may be tempted to lower your monthly mortgage payments by refinancing to extend the term of the loan. Take a careful look at the overall picture and ask your mortgage loan officer to help you run the numbers to see if this will provide some overall comfort and stress relief immediately.
Another crucial time to refinance is when have an adjustable rate mortgage, and are coming due to adjust. More then likely your payment will increase. If you refinance to a fixed rate mortgage, particularly to a rate comparable to your present low adjustable rate, you’ll avoid the higher monthly mortgage payment before the adjustment even takes place.
How to pick the best Idaho Mortgage Broker
To get the best mortgage refinancing deal you need to deal with an honest broker that genuinely has your best interest in mind. Idaho Mortgage Brokers usually follow certain practices when dealing with their customers. Not favoring just their own loan product like big national lenders. Insuring complete understanding, an Idaho Mortgage Broker will explain this to you in a clear way, so you can understand it. This is so you can weigh it out and decide for yourself if refinancing is actually in your best interest!
Written by Lisa Kratz
Apex Mortgage | Meridian, Idaho | (208) 888-9251 | myIdahoHomeLoan.com
