Jeff Thomas » Northern Virginia Real Estate

First-time homebuyer tax credit extended

Jeff Thomas — Wed, 14 Jul 2010 15:48:40 +0000

The Homebuyer Assistance and Improvement Act of 2010 extends the closing date requirement for the first-time homebuyer tax credit from June 30, 2010, to September 30, 2010. This gives qualifying individuals who, prior to May 1, 2010, entered into a binding written contract to purchase a home, an additional three months to close on the purchase. Click on the title above and watch the video for additional information.

FHA seller concession rules

Jeff Thomas — Wed, 02 Jun 2010 12:56:02 +0000

The Federal Housing Administration (FHA home loans in Virginia) is eliminating one of the mainstays to its program sometime this summer. Gone will be the 6 percent seller concession and in will be the 3 percent seller concession. The reason for eliminating the concession according to FHA is the 6 percent seller concession exposes them to too much risk. This has been one of the key selling points with FHA for decades. But if sellers and buyers move fast there is a possibility they can still take advantage of the higher seller concession.

The buyers must still save or be gifted the money for the down payment to purchase the home. The current minimum down payment is 3.50% of the sales price. The current guidelines on seller concession allow sellers to pay for all of or part of buyers closing costs when purchasing a property. Items connected with the transaction such as — loan origination and discount points, state and county transfer stamps and fees, an appraisal, inspections, attorney and title closing costs.

When it comes to lower priced homes, closing and loan expenses typically represent a higher percentage of the total loan closing costs than on higher prices homes. In Fairfax, Virginia and Northern Virginia, closing costs typically run between 2.50% and 3.50% of the sales price of the home. So on a $300,000 home purchase, that could be an extra $7,500 to $10,500 of out of pocket expenses for a home buyer. Current with FHA financing rules, the contract can be structured so the seller agrees to pay all closing costs up to 6% ($18,000) at settlement. This amount could even include some small required repairs. Once the rule change takes effect, the max concessions will be a flat 3% of the sales price.

If you use Fannie Mae or Freddie Mac financing, seller concessions is generally limited to 3% for down payments below 20% of the sales price. Although concessions can be much higher when larger down payments are being used.

Bottom line is this: the helping hand of an FHA home loan is getting smaller and smaller. First the down payment was increased from 2.25% (3% in the new home) to a flat 3.50% down payment. Then a minimum credit score, now a decrease of seller concessions from 6% to 3% of the sales price.

The First Two Steps in Buying a Home

Jeff Thomas — Tue, 01 Jun 2010 16:55:54 +0000

Fairfax, VA – Statistics suggest that the Internet is the first destination and source of information for potential home buyers. In fact, nearly 80% of potential buyers reportedly begin their home buying process online. And why not? The Internet has a wealth of information and resources that can aid in the beginnings of the home buyer’s search and make them feel more comfortable and confident about the process. However, when a potential buyer is ready to move forward and really begin to focus on his or her home buying goals, there are two very important steps to consider first in order to initiate a successful home buying experience.

Know the Score – Whether you like it or not, your credit score will play a major role in your ability to qualify for a mortgage and purchase a home. Your credit score will also help determine your mortgage rate and how much home you can really afford. That’s why if you’re looking to purchase a home in the next 6 to 18 months, you don’t want to wait to find out what surprises, pleasant or otherwise, might await you on your credit report. By reviewing your credit early on in the process, you have time to make adjustments and improve your score. Remember, a lot has changed in the credit industry in the last two years alone. A recent federal crackdown on credit card companies have led many creditors to take actions such as lowering credit limits. This one act can significantly upset your debt ratios, which is a major component in calculating your credit score.

Get Preapproved – Once you know where your credit stands, the next step in your home buying process is to get yourself pre-approved – not just pre-qualified. Why? Well, by becoming pre-approved you’ll know exactly how much money you can borrow down to the dime. This knowledge will allow you to focus on only those houses you can actually afford, making your search for the perfect home much easier. By being pre-approved you also become a “cash buyer” which demonstrates to sellers that you’re serious about your search and will allow you to negotiate more effectively than potential buyers who are not pre-approved.

Rates Have Hit All-Time Low Levels Again

Jeff Thomas — Wed, 26 May 2010 16:12:58 +0000

Interest rates have rallied and improved dramatically on the heels of the recent European debt concerns…and what is most important is that due to the highly unusual set of circumstances that exist in the market, those who are acting quickly are saving.

In fact, Freddie Mac reported last week that rates have met either all-time lows or 2010 lows. Bottom line, they are “smokin’ hot” right now – but won’t be for long.

Regardless of whether people want to convert their loan to a 15-Year fixed to potentially save over $100,000 in payments over the term…or drop their payment several hundred dollars a month, people are acting now!

However – one thing you have to know…rates are incredibly volatile and are not likely to hold these levels. We might only have a couple of days to lock people in at the best rates they will ever see.

I would love to look into your situation and see just what we can do to put some money back in your pocket. I never thought I would see rates this low across the board – so don’t miss this chance.

Home sales and home prices continue to improve. Monday, the NAR released information that shows strength in housing. If you are in the market to buy a home, act now before monthly payments increase as both prices and rates move higher.

Or, if you are looking to refinance and could not last year because of home values…you just might be able to now. Call me!

USDA Zero Down Home Loan In Jeopardy!

Jeff Thomas — Wed, 17 Mar 2010 14:02:18 +0000

Fairfax, Virginia: Although USDA loans are not a big deal in the northern Virginia area, but they are HUGH deal in the outlying counties of Fauquier, Prince William and Loudoun. It was recently been announced that the USDA 100% (zero down) loan program will be out of money by the end of April 2010. Typically the USDA program has sufficient funds to cover the needs of potential borrowers. But as with many home financing programs, money is in short supply. As lending guidelines have tightened over the past two years, the ability of a borrower finding a zero down home loan out side of the Veteran Department VA loan has disappeared almost completely. This is has caused homebuyers that wouldn’t typically consider a USDA loan for financing to not only consider it, but actually apply for and be approved for the USDA zero down home loan. The program has no mortgage insurance, great rates and flexible credit guidelines. So over the last few years, USDA has stepped up to fill the void and provide affordable zero down loans for qualified first time homebuyers across the nation.

Although Fairfax, Virginia doesn’t have many areas that work for the USDA program, the increased demand across the country for USDA loans has led to a shortfall of funds. Last year the stimulus money was used to bridge the funding gap and business went along as usual. The stimulus money helped fill the void the past couple of years, but without additional it is projected that funds for the program will dry up sometime in late April. When this happens the USDA will stop issuing loan commitments until their normal refunding takes place sometime next fall. Most economist suspect any slow down in the housing market could have drastic affects on the economy pulling out of the recession. Many first-time homebuyers could miss the $8,000 tax credit. The best idea would be to fund the USDA program now so as to try and prevent the economy from slipping back in to a recession.

Below is a list of the members of the committees that can help steer passage of the appropriation request:
United States Senate Committee on Appropriations
Subcommittee on Agriculture
Rural Development
Food and Drug Administration

Democratic Members

Republican Members

Market Snap Shot for Fairfax, Virginia

Jeff Thomas — Tue, 02 Mar 2010 22:21:31 +0000

Market Snap Shot for Fairfax, Virginia Mortgage Interest Rates and Local Real Estate

By Sigma Research
By Tuesday, March 02, 2010

Treasuries and mortgages started weaker this morning with the stock index futures pointing to a nice open in equities at 9:30. No real data this morning, the only thing on the schedule is Feb auto and truck sales that will be out this afternoon. At 9:00 the DJIA +44, 10 yr note -10/32 3.65% +3 BP and mortgage prices for 30 yr fixed -5/32 (.15 bp). At 9:30 the DJIA opened +38, 10 yr note -7/32 at 3.64% and mortgages -3/32 (.09 bp).Four days and counting to the Feb employment report for Fairfax, Virginia Interest Rates. Always the key report each month, and each time there is some event or circumstance that makes it even more important—if that is possible. This report has a lot of weather related elements with the continual snow that crippled the mid-Atlantic and East coast; but the main event that traders are thinking about is the huge decline in consumer confidence in Feb and the big fall in new and existing home sales. How, if at all, will all that impact the employment picture? There is the theory that consumer confidence plunged by 20% because of more job losses. Long ago we gave up trying to anticipated non-farm jobs data, throwing darts blind folded is more accurate. Current estimates continue to be a small decline of 20K jobs in the month with the unemployment rate at 9.8% up 0.1% from Jan.Greece’s financial problems are well documented; next up according to what we are seeing is Great Britain. Investment mangers in England are bracing for a run on the British pound as its economic outlook remains dire. Britain’s debt amounts to 12% of output, about the same as Greece’s debt to output. Moody’s Investors Service and Standard & Poor’s said last week they may cut Greece’s credit rating; now fund managers in Britain are worried the same fate may befall England as its economy is struggling to get some traction. The take away from the continuing debt problems in Europe (Spain and Portugal) and now Britain is adding support to US treasuries as a safe place for parking money.

Markets and traders continue to expect US interest rates will increase this year as the US economy solidifies and consumers and the housing sector slowly improve. The Fed, with the exception of one or two Fed officials, is dead set on keeping the Federal Funds rate at near zero for that “extended period” which is markets are beginning to quantify as no rate increases until the Nov FOMC meeting. We noted yesterday we were hearing four more FOMC meetings before the Fed moves. A recent survey by Bloomberg of bankers was 46% chance the increase would be at the Nov FOMC meeting. What must be kept in mind is that the bond and mortgage markets will be out front of the Fed on any increases; given the preemptive move interest rates will begin to discount the increase by August. We expect mortgage rates to increase in Fairfax, Virginia by year end will be 50 basis points higher than at present levels; the 10 yr note to move to 4.15%.

Through the later half of Jan and the early part of Feb the 10 yr note tried 10 times to move below 3.60%/3.58% range; each time it failed. Yesterday the 10 yr hit 3.58% at mid-day but again failed to crack the wall. This morning at 9:00 the 10 yr was back to 3.65%; the FNMA 4.5 coupon is registering overbought readings on the relative strength oscillator. The bond market today will, as is the case recently, take its lead from how stock indexes trade. No data until this afternoon with auto and truck sales; but the remainder of the week has data everyday with of course the Feb employment on Friday. On Thursday Treasury will announce next week’s auctions of 3 yr, 10 yr and 30 yr borrowings

New Home Affordable Foreclosure Alternatives Program

Jeff Thomas — Tue, 08 Dec 2009 15:04:32 +0000

Fairfax, Virginia: The Treasury Department released guidelines and updated forms on November 30, 2009 for its new Home Affordable Foreclosure Alternatives Program (HAFA) for homeowners in Fairfax, Virginia and Alexandria, Virginia area. The HAFA program is supposed to compliment the HAMP program and applies to loans not owned or guaranteed by Fannie Mae or Freddie Mac. The intent of the HAFA program is to assist additional homeowners that are in distress while setting out clear guidelines for mortgage servicers and mortgage holders. The HAFA program also provides incentives to servicers. The HAFA program is for homeowners in connection with the following situations:

A short sale
A deed-in-lieu of foreclosure (DIL) used to avoid foreclosure on a loan eligible for modification under the HAMP program.
Servicers participating in HAMP are also required to comply with HAFA when working with homeowners in the Fairfax, Virginia and Alexandria, Virginia areas.

The Governments home affordability plan has some new changes for loans not currently serviced by Fannie Mae or Freddie Mac.

Link to HAMP participating servicers: MakingHomeAffordable.gov.

Link to the website: www.hmpadmin.com

Link to the 43 page guidelines that could help homeowners the Fairfax, Virginia and Alexandria, Virginia areas: https://www.hmpadmin.com/portal/docs/hamp_servicer/sd0909.pdf

The supplemental directive 09-09, is effective April 5, 2010, but participating servicers may elect to implement HAFA prior to April 5, 2010, in accordance with the supplemental directive guidelines.

Program offers eligible homeowners viable alternatives to avoid foreclosure;
Preventing servicers from attempting to reduce real estate commissions established in the listing agreement as a condition for short sale approval;
Releasing borrowers from future liability for the debt; and
Providing financial incentives to borrowers, servicers and investors.
Provides a viable alternative for homeowners who are HAMP eligible but cannot keep their home.
Allows the use of financial information and forms already in the system in connection with a loan modification.
Enables the homeowner to seek pre-approved short sales terms before listing the property.
Requires borrowers in the Fairfax, Virginia and Alexandria, Virginia areas to be fully released from future liability for the first mortgage debt. At this time I am not sure how this applies release of second mortgages or HELOCs liability. (No cash contribution, promissory note, or deficiency judgment is allowed).
Provides a standardized time frame and process for handling alternatives;
Financial incentives:
- $1,500 for borrower relocation assistance
- $1,000 for servicers to cover administrative and processing costs
- Up to $1,000 for investors for allowing a total of up to $3,000 in short sale proceeds to be distributed to subordinate lien holders (on a one-for-three matching basis).

Home Sales Increasing

Jeff Thomas — Fri, 30 Oct 2009 13:26:28 +0000

Rebound in Existing-Home Sales Shows First-Time Buyer Momentum October 23, 2009 – Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months. House values seem to be turning around for our area. Check out the link below. http://www.realtor.org/research/research/ehsdata