FHA plan will stimulate new Orlando home sales and help stabilize Orlando housing market

Today, while speaking to the National Association of Home Builders, U.S. Housing and Urban Development [HUD], Secretary Shaun Donovan announced that the Federal Housing Administration (FHA) will indeed allow homebuyers to apply the $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said today’s action will help stabilize the nation’s housing market by stimulating home sales… we will see.

The announcement details FHA’s rules allowing state Housing Finance Agencies and certain non-profits to ‘monetize’ up to the full amount of the tax credit so that borrowers can immediately apply those funds to their down payment. Home buyers using an Orlando FHA-approved lender can apply the tax credit to their down payment in excess of 3.5 percent of appraised value - or towards their closing costs, which can help achieve a low, below market, interest rate. To read the FHA’s new mortgagee letter, visit HUD’s website.

“We believe this is a real win for everyone,” said Donovan. “Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation’s housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away.”

Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 % downpayment on the purchase of their home. Current law does not permit approved lenders to ‘monetize’ the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today’s announcement, lenders can monetize the tax credit for use as additional down payment, for other closing costs, or buy down their low mortgage interest rate. In addition to the borrower’s own cash investment - which appears to still be the standard 3.5%, FHA allows Orlando First-time Home Buyer parents, employers and other governmental entities to contribute towards the downpayment over and above that 3.5%.

This is good news and can help the struggling housing sector. It should be interesting to see how they intend to implement this covertly complex initiative at the street level.

Chris is Florida’s #1 FHA Mortgage Broker and a syndicated mortgage blogger. He is regular contributor to the three leading industry blog-fronts including The Mortgage Chili Blog, My FHA Mortgage Blog, Top of Mind Networks, and is the resident “Money Guy” on Realty Resolve. Chris can be found at Orlando FHA Loans, Chris[at]OrlandoMortgagePro[dot]com, or by calling 407.377.0500 x 210

The country’s, including Orlando, mortgage rates rose by 0.625 percent yesterday [Wednesday] - Ouch! Yes, you read it right. Zero-point-six-two-five percent.

The surprise surge in pricing started shortly after 1:00 P.M. ET, then continued all the way until the market’s closing. It was the sharpest one-day surge in mortgage rates in recent history. Perhaps ever.

For Orlando mortgage rate shoppers swept up in the surge, monthly payments are now higher by $29 per $100,000 borrowed.

That’s a significant shift.

For as rare as Wednesday’s events were, though, middle-of-the-day, 0.625 percent rate changes don’t just happen. Yesterday, the action was the result of a confluence of factors, including:

• Rising oil prices and gas prices
• Optimistic predictions about the end of the recession
• Concerns over the U.S. total debt load
• Fears of inflation

In addition, momentum-trading played a role.

As markets worsened, selling begat more selling, amplifying Wall Street’s total losses. As mortgage bond prices fell, mortgage rates went up. By a lot.

Mortgage markets are notoriously fickle and yesterday’s events proved it. Days like Wednesday are precisely why insiders recommend shopping for mortgage rates in a compressed timeframe. The faster you finish, the lower the risk of losing low interest rates to new market conditions.

If nothing else, this illustrates why you need a trusted advisor watching for your best interest - we were able to lock in several people before the shift, others - that second guessed, got hammered.

________

Chris is Florida’s #1 FHA Mortgage Broker and a syndicated mortgage blogger. He is regular contributor to the three leading industry blog-fronts including The Mortgage Chili Blog, My FHA Mortgage Blog, Top of Mind Networks, and is the resident “Money Guy” on Realty Resolve.

Chris can be found at
Orlando FHA Loans,
Chris[at]OrlandoMortgagePro[dot]com,
or by calling 407.377.0500 x 210

Being an FHA licensed Longwood mortgage company, we at Trinity Mortgage feel honored to offer our First-Time Home Buyers with Longwood Government-backed FHA programs that can truly provide for the American Dream of home ownership.

With low down payment requirements, competitive mortgage interest rates, flexible credit history guidelines, and common sense underwriting practices, FHA mortgage loans are designed to meet the primary needs of many First-Time Home Buyers.

Buying your first home can be, simply put, overwhelming at times… that is why is is imperative to make sure that you are not solely focused on just rates, but in getting sound mortgage advice as well. Seeking only rate has been one of the main contributers to the mortgage mess we now find ourselves in.

There are literally hundreds of questions that our clients uncover as they start their initial mortgage and Longwood real estate related searches.We invest a significant amount of time and effort in updating our blogs and home buyer packets with the most relevant and valuable information necessary so you feel confident that you are making the most informed decisions. Our goal - earn your trust through communication and service and the lowest cost of borrowing money over time.Please feel free to contact us directly at any time via phone, email, or online FHA mortgage application form if you desire no-nonsense mortgage insight to gain a better understanding of some of these complex details.

Floridas 1 FHA Mortgage Lender 407-377-0500 x210

Chris is Florida’s #1 FHA Mortgage Broker and a syndicated mortgage blogger. He is regular contributor to the three leading industry blog-fronts including The Mortgage Chili Blog, My FHA Mortgage Blog, Top of Mind Networks, and is the resident “Money Guy” on Realty Resolve.

Chris can be found at
Orlando FHA Loans,
Chris[at]OrlandoMortgagePro[dot]com,
or by calling 407.377.0500 x 210

Phew - I am sure glad the last blog-post subject line had a question mark in it!

Guess what disappeared… the mortgagee letter that was on HUDs website about this ability to “use the $8000 First Time Home Buyer Tax Credit” - yeah… its gone!

As of today you can not use the tax credit for a down payment.  True, there has been a lot of discussion on this, but as of now it is not currently an option.    Those statements were made by the Secretary of HUD yesterday and a HUD/FHA letter was published on the website Monday night.

Then…the new Director of HUD pulled that Mortgagee letter this morning and is no longer even available on the HUD website.  [Notice ML 09-15 has been pulled]. This theoretical program is not something that is deliverable as of yet. Sometimes I wonder if they are intentionally trying to sabotage the marketplace. They, once again, have gotten people worked up in a frenzy over something that might - maybe - possibly - happen… then they act as if it was not said at all!?  OMG, are you kidding me?

This is why, more than ever, it is important to have a trusted mortgage broker in your corner.  I will deliver the news to you as it comes out and if/when they change it, you will know about it first - here.  Thank you for the trust you place in me, it is not something that I take lightly.  If you have any questions don’t hesitate to call me, for now…..and if anything should come to market officially you will see it here.

Just as an FYI - before this could happen, there would need to be:

• …State agencies approved and funded for the down payment ‘float’
  
• …a Change to the HUD guidelines on the time frame that is allowable for a loan. [Currently must be amortized over 10 years with no balloon.]
• …and a change to the IRS guidelines allowing your refund to be re-assigned to a state or non-profit entity

How long do these things take?  Oh my, your guess is as good as mine.  With the tax credit due to expire on Nov. 30th, 2009, this may never even see the light of day.  Wanna know what happens - Subscribe to the blog to keep in the loop

Is Zero-down back for Lake Mary’s First Time Home Buyers?  Could be.  This is the next best news to working with Florida’s #1 FHA Mortgage Broker.  This info was released right at the close of business yesterday - getting it to you ASAP!

Hot off the press!

4:47 PM ET -  Shaun Donovan, secretary of the U.S. Department of Housing and Urban  Development, said that the Federal Housing Administration [FHA] is going to permit its  lenders to allow homeowners to use the $8,000 First Time Home Buyer Tax Credit as a down payment.  According to Donovan, the FHA’s approved lenders will be permitted to ‘monetize’  the tax credit through short-term bridge loans. This will allow eligible home  buyers to access the funds immediately at the closing  table.

For more information on this email me, or call me at 407 377 0500 x 210.  Or, you can get prequalified now with the online mortgage application.

There is much speculation as to whether the best Orlando interest rates and Orlando home prices are going to be around 12-months from now. It is no secret that many of the recent steps taken by our government are highly inflationary.

The question on everyones mind is - what does that mean for me and my home buying ambitions? The question that is less well-known yet equally important is whether the current qualification guidelines are going to be the same 12-months from now.

As Florida’s #1 FHA Mortgage Broker, I would speculate no. Experience shows that inclination would be accurate… here is why. Mortgage guidelines, specifically FHA mortgage home loan guidelines rend to be a lagging indicator of mortgage defaults. In other words, as mortgage default continue to increase, guidelines will continue to be more restrictive.

So, while low Orlando interest rates may be available a year from now and Orlando real estate may still be reasonable, qualifying for a loan to buy that real estate may be harder. We have already seen many lenders apply strict guidelines on credit scores even though officially FHA home loans do not have credit score requirement.

For example, many lenders used to allow 580 scores. That number then increased to 600. Now all but one wholesaler I know of has moved to a minimum of 620 - that sole wholesaler is at 600 but expect that they follow suit in relatively short order.

The obvious question arises - “Where will the requirement be next year?” If you have a credit score over 700, you will be okay, but those with less than a 700 score may find that they are - unexpectedly - in need of Orlando credit repair in order to qualify for ANY FHA mortgage loans. The best bet is to get a mortgage pre-qualification now and get expert advice from a trusted Certified Mortgage Planning Specialist [CMPS]. Waiting could be the difference between being an Orlando home owner and being a renter for who knows how long!?

For unconditional yet sound mortgage advice, contact me to see where you fall in the current environment and if you are benefited by acting sooner rather than later.