Archive for the 'Lending' Category
Your’re going to give me money and I can have it now?
categories: First time home buyers, Lending, Stuff I like to talk about
Thanks Uncle Sam! As you all have probably heard, there are 2 tax credits available for home buyers right now.
The Federal government is offering an $8,000 tax credit (up to 10% of the purchase price) for first-time home buyers (anyone who has not owned a home in the last three years). To be eligible, you can’t make more than $75,000 per year as an individual or $150,000 per year filing married.
Also, as of May 11th, 2009, the State of Georgia is offering an $1800 tax credit (or 1.2% of the purchase price) which ever is less, for any home buyer. This will be received in installments over three years.
Here is where it gets interesting. First time home buyers can now borrow against their federal tax credit for down payment. The department of Housing and Urban Development recently announced that FHA approved lenders and other governmental agencies / non-profits can advance the amount of the tax credit coming to the buyer with short-term or “bridge loans.”
This is enourmous help for first-time home buyers who may not have the down payment necessary to buy a home. BUT - for the $8000 credit you must purchase a home by November 30th, 2009. The $1800 state tax credit is only for home buyers who purchase by November 11th, 2009.
Real estate will lead us out of this current economic crisis. While in my opinion these tax credits fall far short of what we could have (and should have) done to spur home purchases, it is a great opportunity in the next six months for those thinking about buying a home to make the leap.
Posted by Bob Strader | Currently No Comments »
Seller Financing and House Trade Program Aim to Break Real Estate Market Impasse | The Snorkel Business
categories: Alpharetta Real Estate, Buyers, Lending, New Construction, Real Estate Industry
ALPHARETTA - Expanding on yesterday’s post about house swaps and real estate log jams, here is a slightly different angle to this problem.
Take builders. I didn’t talk about them yesterday.
They are the opposite of the first time home buyer. They don’t have anything to buy, only a lot to sell - as opposed to not having anything to sell and only dealing with a single home to buy like a FTHB.
Builders, of course, are dependent on buyers. Builder are having trouble selling though because, as much as John Q. Public might like to buy, he either can’t sell his house or he is underwater in his house, in which case he needs a snorkel - I mean he might be selling in order to downsize.
The buyer might be credit challenged; sometimes the buyer has a sizable down payment but can’t get a loan because they are self-employed, or don’t have American credit because they are from another country.
So what do builders do about the situation?
Some of them don’t do anything. These are the ones you hear about going bankrupt.
Others get more creative and agressive. They partner with a lender to do low rate or “buy down” loans where the builder pays to buy the interest rate down for a period of time. I saw today where McCar homes is partnering with SunTrust for loans at 4.5% if they close by January 31st. The purchaser must have a 680 credit score to qualify, though.
Some builders will offer to purchase the buyer’s existing home so that they can buy the builder’s new home. This strategy could help, but sometimes the builder is just trading one head ache for another.
I was involved in a deal last year where a builder offered to buy my client’s house. He was going to pay them about 20% less than what it was listed for: His calculation was that my client would ultimately net about that once he paid real estate commission, price concessions and repairs. The deal didn’t work out, but the offer was certainly there and I know similar deals have been struck.
Finally, owner financing is another option that you see builders offering these days and owner financing is closer to what I feel is really going to help break the log jam.
We have a market failure where willing sellers and willing buyers can’t transact because prices are out of whack and credit is extremely tight. However, where there is a problem, there is always a solution in a free market.
What I’m seeing now is more sellers and particularly builders offering financing. In Cherokee, Forsyth and North Fulton counties, there are currently 222 properties for sale where the seller is offering to finance. Most of the same rules apply as a typical loan except your bank is the seller. Like a bank, the seller is assuming the risk that you pay on the loan. If not, they can foreclose…just like a traditional lender.
Even more interesting, now we are starting to offer seller financing coupled with a house trade program to help buyers and builders break the market impasse. Again, where there is a will, there is a way: a free market allows for creative solutions. The lenders screwed things up, so now other parties must assume the role of a bank to unscrew us all.
If you would like to buy a new construction house, but need to sell yours first, we can help with a trade program; or we can seller finance your new purchase if getting a loan is your roadblock. We could also privately finance the sale of your home so you could get it sold in order to buy the builder’s new house.
Our current inventory is sixty homes ranging from $285,000 to the $800’s throughout north Atlanta.
Builders are anxious in this market to understate the situation. They have asked us to do anything and everything to help break the log jam and get their inventory sold. I hate the expression “thinking outside the box” because I think it is thoughtlessly over used, but I do believe some new thinking is required in this market in order to get things done.
The alternative is not pretty. Reference the builder who does nothing. We are now in the snorkel business.
Posted by Kevin Warmath | Currently 3 Comments »
FHA Loan Opportunities for Alpharetta Home Buyers | 100% Financing is Still Available
I wanted to make a quick post regarding a subject near and dear to many of you, and one that has in the past, sent shivers down your spine. Yes, I am alluding to the infamous FHA loan. With the tightening credit market and many of the true 100% loans gone by the wayside, more and more borrowers are turning to the FHA loan as a way to get into their new home.
But don’t let these deals scare you!
- Most lenders have beefed up their FHA underwriting staff. We can close most FHA loans in 5-10 business days;
- Loan limits in the metro area are as high as $346K;
- The 3% down payment requirement still can come from a gift or a down payment assistance program for the 100% loans;
- Seller contributions on FHA can go as high as 6% of the sales price;
- The Monthly Mortgage insurance cost about 30% less than conventional loans;
- Rates are excellent with yesterday’s 30 year fixed around 5.75% for the 30 year.
FHA loans are great for first time home buyers. We have at least 10 lenders who offer FHA loans. If you have ANY questions regarding FHA procedures or policies, please drop me an email. With the market bottoming out, don’t let financing be a problem in achieving your home ownership goals.
Ted Fithian, Home Town Mortgage
Posted by Kevin Warmath | Currently 1 Comment »
LiveInAlpharetta.com Blog Speads its Wings and Welcomes Mortgage Lender, Ted Fithian as Contributor
categories: Alpharetta Real Estate, Lending, Real Estate Industry
After having blogged all by my lonesome for going on two years now, I thought you might be tiring of just my perspective. It is time to broaden the message at this humble real estate blog and to that end, I’ve invited Ted Fithian from Home Town Mortgage, a local lender in Alpharetta, to contribute.
Welcome, Ted Fithian, of Home Town Mortgage in Alpharetta
Ted’s first offering is timely now that Spring officially starts in ten days; and as Ted alludes, Spring started in the mortgage and real estate industries a little earlier this year. Take it away, Ted, and welcome to the blogsphere.
Spring Cleaning
One of the things I enjoy most about spring time is my annual ritual of opening up the windows on a Sunday afternoon and cleaning out the junk that has accumulated in the house over the winter. There is something very therapeutic about knowing that the garbage that has been in your way all winter is gone, and now you have more room for newer, fresher and better stuff. Let’s face it; many of us enjoy a good spring cleaning because it just makes us feel better!
Now, I have yet to start on my house, but I am already feeling pretty good about the spring cleaning that has occurred in the real estate and mortgage business.
Contrary to what you might believe or have heard, things in the mortgage business are not all that bad. In fact, I think the outlook is fairly rosy and I am exited to still be in the business. Why you might ask? Well the answer is simple: The garbage has been thrown out and there is more room for the good stuff.
Over the last six months, both the mortgage, and residential real estate industries have been experiencing its own spring cleaning of sorts. We are hopefully nearing the end of a market which has cleared out about 50% of the bottom feeders that jumped in this business during the refi boom in 2002-2003 in hopes of making a quick buck or two.
We are seeing the end of those lenders who, in hopes of grabbing some market share, have quit offering mortgage loans to anyone who could fog a mirror. Can you imagine that at this time last year there were lenders out there offering stated income loans with no money down if you had a 600 or better credit score?
Borrower: "Ok Mr. Mortgage lender, you say I need to make how much to qualify for this loan?"
Lender: "$225,000."
Borrower: "Oh, I made at least that much last year and I plan on making more next year, so I qualify, yeah!!!!"
Thankfully those days are gone, and I say good riddance.
So why all the joy? As we roll into 2008 there will be about half as many realtors and mortgage lenders as there were at this time last year. What that means to the consumer is: Those of us still in the business are more professional, harder working, and probably smarter than those that have not been able to sustain.
For those of us in the business it means less competition, a more traditional market, and hopefully a more professional environment in which to work. Everyone wins. In fact, after I finish cleaning the house, I think I will go start on my garage. That makes me feel better too!
Thanks, Ted, for joining me and I look forward to your contributions around mortgage issues that affect buyers in Alpharetta and the rest of North Fulton. To your point about the "weeding out" of the mortgage and real estate businesses, according to the National Association of Realtors, between 2006 and 2007, almost 20,000 realtors hung up their licenses. These people are now doing multi-level marketing…just joking ;->
Projections for 2008 are that there will only be about 1,000,000 realtors nationwide, down from about 1,350,000 in 2006. That is a 25% drop, definitely some good spring cleaning!
Of the national real estate franchises, according to REAL Trends, every one is down between December 2006 and December 2007 except Keller Williams.
| Company | Dec 2006 | Dec 2007 | Change |
| Keller Williams | 77,210 | 29,643 | 2,433 |
| Prudential | 70,450 | 69,990 | -550 |
| Re/Max | 119,459 | 115,858 | -3,601 |
| Century 21 | 146,070 | 139,895 | -6,175 |
| Coldwell Banker | 123,730 | 116,812 | -6,918 |
Given what is going on in the market, like Ted, I feel pretty good. Our business grew last year and we project it to grow again this year even in this "down" market. I love to clean house, just ask my wife!
Posted by Kevin Warmath | Currently No Comments »
