Tag Archives: FHA

The Three Most Popular Types of Mortgages


The Three Most Popular Types of Mortgages

Fixed-Rate Mortgage
This is the most common type of loan, and for good reason. With a fixed-rate loan, the interest rate remains the same throughout the loan’s duration, which is typically 15 or 30 years.
Who should use this loan?
Those who are interested in consistent housing payments or don’t plan to move anytime soon.

Adjustable-Rate Mortgage
Also known as a variable-rate mortgage, this is a loan with an interest rate that changes based on the prime rate and index rate. While you may start with lower monthly payments, you must be prepared to pay more at any given time.
Who should use this loan?
Those who have poor credit or plan to sell their home before their fixed-rate period is up.

FHA Loan
In an effort to make buying a home more attainable for Americans, the Federal Housing Administration offers FHA loans which allows buyers to put a minimum down payment for as little as 3.5 percent.
Who should use this loan?
Those who don’t have enough savings for a down payment. However, with a FHA loan comes private mortgage insurance (PMI), which hovers around 1 percent of the cost of your loan.

There are two other types of loans that home buyers should consider and that is the USDA Home Mortgage and the VA Mortgage.   USDA loans are not available in all areas, but if it is, it can be a great alternative, especially first-time home buyers.  The VA loan is a fantastic mortgage option for those who qualify.  Not only is a great interest rate, but the credit criteria is very workable.
At the end of the day, talking to a mortgage professional will help you decide which type of loan is best suited for you.

Application documents checklist
To be able to predict your financial future, lenders need to take a hard look at your past and present financial situations. With this checklist, the task of gathering the necessary paperwork won’t seem as burdensome.
• Bank statements
• W2s from current and past employers
• Pay check stubs
• List of all debts
• List of all assets
• Credit report
• Residential address for the past two years
• Landlord names and addresses for the past two years
• Proof of timely rental payments
• Divorce decree (if applicable)
• Gift letter (if using gift funds)
• Bankruptcy paperwork (if applicable)
If you are thinking of buying or selling, talk to a real estate professional – talk to a REALTOR® who can give you the information you need to make an informed decision.
As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712-8808 or email me at RolandLow1@gmail.com.
Roland

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What Every REALTOR® Wants You to Know About the Government Shutdown


What Every REALTOR® Wants You to Know About the Government Shutdown

 Several years ago, I broke the little toe on my left foot.  Not a serious injury, I’m sure you’ll agree, but a break never the less.  As a REALTOR® and not a doctor, the state of Maryland recognizes me as an “expert” in the field of real estate, but not in the field of medicine.  Never the less, I believe I can say with confidence that my medical advice is to avoid breaking a toe (or anything for that matter).

As my doctor was wrapping my broken little toe to the toe next to it, he said, half chuckling, “You are about to find out how your body is all interconnected.”  As I tried to stand, walk, or even balance myself I realized how the toes – even the little toe – was used to maintain balance.  The partial government shutdown is no different.  The government agencies are all interconnected.

When the partial government shutdown was first announced, FHA announced that they would stop processing mortgage loans insured by the FHA.  A few days later, the FHA reversed their decision and announced that they would process loan applications, although they would only process loan applications for single family homes, and not for condos.

That may sound like good news, but in reality, when a person applies for a mortgage, their income is verified by checking their income from their tax records.  During the partial government shutdown, the IRS workers are not working, making the verification of the tax records difficult, if not impossible.

The FHA announced that if the government shutdown is “brief”, the FHA does not expect the housing market to be “…significantly affected.”  Then the FHA stated that most employees of the Department of Housing and Urban Development are furloughed and not working and that applications for loans will be delayed.  The definition of “brief” as used by the FHA was not provided.

If you are thinking of buying or selling, talk to a real estate professional – talk to a REALTOR® who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712-8808 or email me at RolandLow1@gmail.com.

Roland

 

Real Estate Predictions for 2017


Real Estate Predictions for 2017

In the last several years the real estate market has been tumultuous at best.  Wild swings in every direction imaginable.  Although the market has settled down dramatically there are still factors outside the realm of real estate that has a significant influence on the direction real estate will go for 2017.

Real-Estate-News1

Like many REALTORS® I spend time reviewing real estate predictions in the hopes that I can get out in front of the curve of what is to come.  And like many real estate professionals – I find myself saying, “good luck with that”.

 

  1. Housing Prices Nationwide to rise 3 % – 5%.

The predictions range from 2.7% to 5.1% nationwide.  The report went on to say that “…we expect to see a broad spectrum of price increases and in some cases, price declines”.  That just about covers everything!

  1. The Pacific Northwest will continue to be a hot market.

The one forecast that is relatively consistent is that the hottest markets will continue to be in the Pacific Northwest.  Several models all predict the Pacific Northwest to continue to be a hot market going into 2017 with home prices increasing from 6.9% to 7.5%.

  1. Mortgage rates will continue to rise in 2017.

The Mortgage Bankers Association has predicted that home mortgage rates will rise in 2017 but will remain below 5%.  That is still a very low interest rate.  I should also add that the MBA also predicted that mortgages rates would increase in 2016, but that did not happen – rates actually declined in 2016.

  1. FHA and conforming loan limits could rise in some metro areas.

Most mortgage programs have size limits associated with them.  For instance, there are conforming loan limits that dictate the maximum size for mortgage loans that can be sold to Fannie Mae and Freddie Mac and FHA and VA loans as well.  All of these loan limits are based on median home prices, to some extent, and since prices have risen sharply in many cities, we could see some higher loan limits in 2017.

The most profound paragraph in the predictions that I reviewed stated: “Disclaimer: These U.S. housing market forecasts and predictions have been provided for your reading enjoyment.  But you shouldn’t bank on them…  They are the equivalent of an educated guess.” 

So let’s talk about what we know about the real estate market.  First of all, as with any investment it may go up and it may go down.  In fact, over the life of a mortgage it will most likely go up and down.  That is why a fixed rate is a better option.

But like most people, you are not buying this property just as an investment, you are buying a home where you will live and enjoy life.  Buy wisely.

If you are thinking of buying or selling, talk to a real estate professional – talk to a REALTOR® – who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712-8808 or email me at RolandLow1@gmail.com.

Roland