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FHA Back to Work Program

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FHA Back to Work Program

FHA Back to Work Program has been hitting the airways, internet and social media with a frenzy. Maybe you haven’t heard of it referred to as Jumping for joythe FHA back to work program, but have heard that FHA has lifted their time frame of when a buyer, who has gone through a short sale, bankruptcy or foreclosure, can purchase a home using a FHA insured loan. For example, a time frame of 3 years was required, if you had experienced a short sale, but that time frame has been reduced to 1 year.

Folks, I have to be honest here, when I first heard the change from 3 years to 1 year, I thought they were off their rocker. Why would they insure a loan from someone who only a year ago, had a short sale completed? I know that may tick some off and that’s not my intention, but having to do a short sale sometimes means there was some financial irresponsibility. Now, I did say sometimes, so please don’t send me any hate mail. 🙂

As I’ve told my kids and believe it for myself, if you do not take responsibility for the situation you are in, your situation will not get better, or you will continue repeating the same old mistakes. Ok, ok,  I will hop down from my soapbox now.

This 15 page letter from HUD, states that:

FHA is continuing its commitment to fully evaluate borrowers who have experienced periods of financial difficulty due to extenuating circumstances.
As a result of the recent recession many borrowers who experienced unemployment or other severe reductions in income, were unable to make their monthly mortgage payments, and ultimately lost their homes to a pre-foreclosure sale, deed-in-lieu, or foreclosure. Some borrowers were forced to file for bankruptcy to discharge or restructure their debts. Because of these recent recession-related periods of financial difficulty, borrowers’ credit has been negatively affected. FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage.

Before, with a short sale on your record, you had to wait 3 years before you could purchase a home using a FHA insured loan, now you can purchase in as little as a year. BUT WAIT! Before you jump for joy, there are hoops to jump through to make sure your situation has indeed improve.

As with any FHA insured mortgage, you must meet a couple of guidelines: The loan must be made by an approved FHA lender and the loan must meet the minimum standards of the FHA mortgage guidelines.

There’s more: To that end, FHA is allowing for the consideration of borrowers who have experienced an Economic Event and can document that:

  •  certain credit impairments were the result of a Loss of Employment or a significant loss of Household Income beyond the borrower’s control;
  •  the borrower has demonstrated full recovery from the event; and,
  •  the borrower has completed housing counseling

For more information check out this 15 page document from HUD.

So, this is good news if you meet their requirements. If you want to find out more, I have a list of quality FHA lenders who would be happy to talk to you about your situation and see if you could qualify for this program. Call me direct at 904-910-3516 or if you prefer, email me at pam@pamgraham.com

 

 

 

Why do I need to talk to a lender before I go looking for homes for sale in Fleming Island?

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Why do I need to talk to a lender before I go looking for homes for sale in Fleming Island?

That’s a great question buyers ask, especially first time home buyers. Here are few Why do I need to talk to a lender before I go looking for homes for sale in Fleming Island?reasons:

By getting pre-approve before searching for a home in Fleming Island, you will know how much you can afford, what loan you’re gonna do, how much you need for closing costs and down payment, plus how much your payments will be.

Skipping the pre-approval part before searching for homes, can cause you to walk away with a broken heart. You find that perfect house at x amount of dollars, then go talk to a lender, only to find out you qualify for 50k less. It really takes the wind out of your sails. You will always be comparing the homes you look at from then on to your dream home and that could make you want to quit looking all together.

In theClay County real estate market, we are seeing less and less inventory, more buyers, which causes multiple offers. Multiple offers give the seller more choices. If you are not approved, a seller isn’t gonna bother with your offer.

Less stress! Getting pre-approved is going to make your home buying process so much better! It may mean the difference of going bald, by pulling your hair out the whole time or closing on your dream home in the next 30-45 days with all your hair in tact and happy for this new chapter in your life to begin.

So, ask your agent for lender referrals if you don’t have one already. Heck, go talk to multiple lenders and compare not only interest rates, but also lender required closing costs.

And if you happened onto this page before you’ve started your search, feel free to search for homes in Fleming Island or homes for sale in all of Northeast Florida.

I’m also a phone call, text (904-910-3516)  or email (pam@pamgraham.com) away.

 

How much are the closing costs to buy a Home in Northeast Florida?

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How much are the closing costs  to Buy a Home in Northeast Florida Area?

  I know,  some may be saying: I gotta pay closing costs to buy a home? Yep, unfortunately you do. 🙂 I’m going to give H23 BB00934850 * ...my $100 'star note'a break down of what those closing costs are and how much you can roughly expect to pay. Some costs are directly related to how much the contract price is. Let’s jump right in:

 Recording Fees- There are some closing documents that are signed at closing and should be recorded. There fees to record them. $25 Depends on how many pages need to be recorded.

Intangible Tax-Required payment before a new mortgage is recorded. Mortgage amount x .002

 Note Stamps– Required payment of document stamps on notes for all executed mortgages and written promises to pay. Mortgage amount x .35=note stamps

Simultaneous mortgage title insurance policy– When both the lender’s title insurance policy and owner’s title insurance are purchased at the same time. Insures the title, so if you have someone come knock on your door saying they have ownership to your home, you have insurance to say that’s not the case.

 Title insurance endorsements-additional endorsements the lender may require if the property is part of an HOA, having an adjustable rate mortgage, being part of a platted subdivision, or properties abutting a navigable waterway. Usually about $25 each endorsement.

 Wood destroying organism report– Report that checks for wood rot, termites or other organisms that can destroy wood. $85-$125

 Lender’s flood certification fees– This is to determine if the property is in a flood zone or not. $20 and up

Tax service fee-a fee related to having your taxes on your property escrowed and then your lender making the payment for you. $75

Inspection and re-inspection fee– This is for an inspection of the property, checking the whole house for any issues. Roof, plumbing, HVAC, electrical, etc. $200-$350 (can be higher for bigger homes or homes with swimming pools)

Real estate brokerage fee– The commission is usually paid by the seller, then the listing agent pays the selling broker. Rarely paid by the buyer, but that is something agreed upon between buyer and buyer’s agent in writing. Some companies charge a fee sometimes called a transaction fee or storage fee.

Survey– This shows you your boundary of your property. Usually a seller’s cost, but if it’s a short sale situation, sometimes the seller’s lender won’t pay it. $250-$350

 Closing attorney/settlement fee-typically a seller cost. $300 and up

Buyer’s courier and /or wire fees– fees to overnight packages or to wire money $25 and up

Mortgage insurance premium– for mortgages where the down payment is less than 20%

Appraisal fee-This is required if you are getting a mortgage. An appraiser will do an appraisal to see what the value of the house is. Lenders require it to be at the purchase price or higher. $350 and up

Credit Report– fee for lender to pull your credit report. $20 and up

Title search– this is a search to see if there are any clouds or defects on the title that would need to be cured to convey title from the seller to the buyer. Typically a seller charge.

VA funding fee– this is only for VA loans, the fee the VA charges to fund the VA loan. Up to 2.155 of the loan amount.

 Home warranty– one year warranty that covers various systems of the house, for example HVAC, appliances, etc. $300 and up.

 The above list is pretty standard, but other costs could come up, depending on each individual situation.

 

Whoa! I know, that was a pretty long list. 🙂 Hope you have not been too scared off and not want to buy a house now. If you’re still wanting to keep the search going, continue your search here:

 

Homes For Sale in Northeast Florida:

Can a credit repair company really remove negative items on my credit report?

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You’ve seen the ads….”Credit repair 100% guarantee” “We can remove charge offs, bankruptcies, foreclosure” The list goes on and on. If you are credit challenged and you want to buy a car or a house, you may wonder if those companies are for real.  They are real and they want to take your hard earned money. Don’t get me wrong, there are legit credit repair companies that can help you, but if they tell you they can remove a bankruptcy when in fact that bankruptcy is completely accurate on your credit report, they are lying.

Here is an excerpt from The Federal Trade Commission’s website in regard to credit repair companies:

“No one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost.”

You can read the entire article by clicking here.

Now, what if you do have inaccurate information on your credit report(s)? You may wonder if you should hire a credit repair company, but with a little bit of fingertip work (get it…instead of leg work) on your part, you can dispute the items yourself online for free.

I’ll show you where to go. Let’s start with Equifax. When you visit their website, you’ll see two places to dispute. Online dispute (as of today, 2 clicks from the search button) and the tab that says: Free Report, Security Freeze, dispute and fraud protection.  You can start your dispute right there. Now let me back up, just for a second. Did you know, you can get your credit report from all 3 bureaus, free, once a year? Visit Annual Credit Report to get started.

Let’s visit Transunion. You’ll see their dispute button, at the bottom under the column titled “More for Consumers”

Last, but not least, is Experian. If you visit their main page, scroll towards the bottom and you will see disputes or click here.

A few years ago, I had some errors on my credit report. First, I printed my free credit reports from Annual Credit Report. I looked it over, making a mark next to each item that was incorrect and writing down what it should say. I went to each credit bureau and next to each incorrect item, I disputed it. It wasn’t the most fun thing in the world and it was tedious to say the least, HOWEVER when it was all said and done and the items were corrected my score jumped by about 75 points! Not bad, if I say so myself.

Now let me say this, these items were inaccurate from the beginning, I wasn’t trying to beat the system. If your goal is to try to beat the system, DON’T! You still have to answer the questions on a credit application honestly and accurately, no matter what your credit report states!

Lastly, and most important, time will raise your credit score, as long as you continue to pay your bills on time. So, PAY YOUR BILLS ON TIME!

 

 

 

 

Do NOT buy furniture or anything else on credit, before you close on your Northeast Florida Home!

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Do NOT buy furniture or anything else on credit, before you close on your Northeast Florida Home

You’re on the home stretch of buying your  home, inspections done, repairs finished, and the house appraised at the contract price. Just got a couple more weeks before you get the keys to your dream home, but wait! Your living room suit doesn’t match your new home’s decor. You gotta have brand new furniture in time for your closing, so you run down to the furniture store.Dream Home

You see the perfect living room set and you decide to buy it on credit. It looks so good in the showroom! Now, let’s fast forward another week, you get a call from your loan officer telling you that your loan has been denied. You can’t believe it, you have good credit! The reason: you bought your brand new furniture on credit, which caused your debt to income ratio to be out of whack. Or maybe your credit score was borderline and that credit inquiry brought it under.  Now, your closing falls through, and you have brand new furniture, but not a new house to put them in.

True story. That’s what happened to very good friends of mine, but they were on the other end of the story. They were the sellers, who were selling their home. Their buyers bought new furniture on credit and the deal went south. Thankfully for my friends, they were able to get another offer soon after and close it.

Doesn’t have to be furniture though, can be anything involving a line of credit. A new credit card, a new car loan, loan for a boat, you get the picture. A good loan officer will tell you to not buy anything on credit, plus you should also be hearing it from your real estate agent as well.

I know it doesn’t sound fair or make sense for some, but the bank is protecting their interest and if you’re monthly debt is too close to your income, the bank is concerned if something happens, you won’t be able to make your payments.

So, what if you do need want new furniture? Wait until you close. Or even better, pay cash! Then you won’t have a payment to worry about. Now, what if you don’t have enough cash to pay get new furniture? Simple, don’t get new furniture! Save your money. I know what I’m about to write may tick some off, but be smarter than the sellers who have defaulted on their homes. I know there are some situations where, it was out of their hands (to a point), but many home owners were up to their eyes in debt and no savings for that rainy day.

So, what if the above story is you? Well, as disappointed as you may be feeling, you can fix it. Work on paying off any debt you have. As you pay off your debt, it should help raise your credit score and get your debt to income back in line. Time helps too.

 

Haven’t started your search for your dream home?

Search for Homes in Fleming Island and Search for Homes in Northeast Florida

 

NO, It is NOT A Good Time To Buy Your Fleming Island Dream Home!!!!! 4 Reasons Why You Should Wait…..

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 Did I get your attention? I know what you’re thinking, a real estate agent in Fleming Island, not shouting it’s a good time to buy, when most What subprime crisis? Affordable houses are everywhere.agents are on rooftops shouting, that it’s a great time to buy. Prices are great, interest rates are low, but for some, it’s not a good time to buy. Here are 4 reasons you shouldn’t buy your Fleming Island home:
1. You have no money to put down. Yes, there is a no money down USDA loan (property and borrower must qualify) and some down payment assistance programs out there, but 100% financing gives you no wiggle room in equity, just in case you have to sell sooner than planned. Most down payment assistance programs are an interest free, no payment plan, unless you sell or refinance before 10 or 15 years, then you have to pay it back. Let’s not forget PMI, private mortgage insurance, that you will pay each month, making your payment higher.
 
2. Your entire offer hinges on the fact that the seller HAS to pay your closing costs, because you don’t have the money to pay them yourself. There’s nothing wrong with asking the seller to pay your closing costs to help keep more money in your pocket or nothing wrong with trying to get a good deal, but not having your own money to cover those costs puts you in a negative negotiation position.
3. You’re in debt up to your eyeballs. A house is more debt, that comes with property taxes, homeowner’s insurance and maintenance repairs.
4. You have no savings. What happens if your new home has an unsuspected repair and you have no money put away for a rainy day?

Do any of those apply to you? If you answered yes to even one, it’s NOT a good time for you to buy! I know that sounds harsh, but  let’s look at the past few years and what’s going on currently. Short sales are everywhere in the Jacksonville and the Fleming Island Florida market. At the end of the day, let’s be honest, the responsibility still lies with the homeowner and Not the banks, Not the government, and Not Wall Street. Many home owners have, not only a first mortgage, but a second or sometimes a third. I’ve seen a common trend amongst most short sale sellers.  Little or no down payment when they bought, no savings,  huge debt, multiple mortgages on their home and yes, there are some that have had unforeseen circumstances out of their control happened. Imagine though if they had no debt, and a savings, how much better off they would be, even with events happening outside their control!

Imagine yourself buying a home with 10-20% down. The seller agrees to pay your closing cost, so instead of paying them yourself (which you have the money in savings), you use that money to pay cash for new furniture. A 15 year mortgage, instead of a 30 year mortgage. No debt, so you can pay extra on your mortgage, so instead of paying it off in 15 years, you pay it off in 10? 3 to 6 months of expenses saved, so if an unforeseen event occurs, it’s not your family’s total downfall.

I write this, because I took the Financial Peace University by Dave Ramsey. I didn’t  take this class because I have all my ducks in a row, that’s for sure, but because I’ve been there, and I want a better way for my family. If I had followed those 4 reasons above, when I bought my house, things would have turned out a heck of alot different.

I also hate seeing families have to leave their homes to rent because of financial difficulties and hope that today’s buyers learn from the mistakes of current sellers, because really, we do have control over our own personal economy, even when our nation’s economy is weak.

So, if you made it this far without wanting to throw a shoe at me and you’re ready to buy, but not yet working with an agent, shoot me an email at pam@pamgraham.com or give me a call at 904-910-3516.

 

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