If you have never heard of the Value Gap Refinance, you probably will. The Value Gap Refinance program means that there is a guarantor making up the difference between the existing mortgage and the present value of the home. Sound like a dream come true? It will help those who are underwater but it certainly doesn’t change the economy….at least not at this moment.
The difference would need to be established by getting an appraisal of course, that way it is clear what the value is based on the current market. The homeowner would then obtain a new loan at 100 percent of the property’s value and at the current rates.
The homeowner is responsible for paying off the balance, but not the dollar figure that creates that gap. When the home is eventually resold to another buyer down the road, the government will pay the difference between the final selling price and the original loan balance. It’s a program that has been a long time coming, and helping people is what it’s all about.
-Mayer Dallal
Friday, October 29, 2010
More Home Sales in 2011 ?
Real estate experts seem to think that there will be more home sales next year, but the only way I see that happening is if we can get all foreclosures out, listed on the market. Whether they are purchased by an investor, first-time homebuyer or someone who is just looking to relocate, it doesn’t matter. The key is making sure that what needs to get filed is filed, and what needs to be listed is listed. Either way, I am hopeful that our sales will begin to increase now, but the foreclosure moratorium does tend to slow things down.
Commercial real estate lenders are looking for more sales next year as well, so long as plenty of jobs have been added. When that happens, getting more commercial sales should not be an issue. Everyone who has a rental property whether it is real property or commercial property will still need to ensure that they are able to cover the rent they have on their property.
Flipping no longer seems to be the way to go, and those who were looking to do so now appeared discourage. The fear is that when you buy a property, will you now be able to find someone to buy it after you sink money into it to fix it? It’s a tough call, and word has it that nearly $1.4 trillion in mortgages on malls and other commercial properties will be coming due.
-Mayer Dallal
Commercial real estate lenders are looking for more sales next year as well, so long as plenty of jobs have been added. When that happens, getting more commercial sales should not be an issue. Everyone who has a rental property whether it is real property or commercial property will still need to ensure that they are able to cover the rent they have on their property.
Flipping no longer seems to be the way to go, and those who were looking to do so now appeared discourage. The fear is that when you buy a property, will you now be able to find someone to buy it after you sink money into it to fix it? It’s a tough call, and word has it that nearly $1.4 trillion in mortgages on malls and other commercial properties will be coming due.
-Mayer Dallal
Wednesday, October 27, 2010
Is Real Estate Making a Comeback?
While things may look bleak to the consumer, I get a different view of what is happening everyday as I interact with borrowers on purchase loans and refinance deals. This is good, because it helps me keep things real with those I encounter daily. The media can be so negative, and naturally the more television we watch the worse things appear. There are some interesting things happening, and I will tell you about a few of them.
Foreclosures are slowly rolling in, which is good. I would rather see them go slowly over the hill than flood the banks paper reams. However, I don’t want to see any foreclosures because I don’t enjoy watching families lose their homes. One main benefit, and probably the only benefit is for those looking to buy a home that can now get more house for less money, and for less of a down payment upfront. FHA allows buyers to bring as little as 3.5% down on their new home purchase. This allows the buyer to make an investment, but not have to pull out all of their savings to do it.
Sales are up too, which is always good news. The buying seem to come to a halt after the tax credit expired, but in the end people realized that they can’t just sit on buying a home not knowing whether or not that tax credit would be implemented again. There is nothing worse than waiting, and while some people are good at it, most people hate it. This is still a great time to buy a home, or even refinance the one you are in. In regards to buying a home, there are so many homes out there for buyers to pick from. Whether this is your first time buying a home, or your second, there is still time to get a great deal on a house.
-Mayer Dallal
Foreclosures are slowly rolling in, which is good. I would rather see them go slowly over the hill than flood the banks paper reams. However, I don’t want to see any foreclosures because I don’t enjoy watching families lose their homes. One main benefit, and probably the only benefit is for those looking to buy a home that can now get more house for less money, and for less of a down payment upfront. FHA allows buyers to bring as little as 3.5% down on their new home purchase. This allows the buyer to make an investment, but not have to pull out all of their savings to do it.
Sales are up too, which is always good news. The buying seem to come to a halt after the tax credit expired, but in the end people realized that they can’t just sit on buying a home not knowing whether or not that tax credit would be implemented again. There is nothing worse than waiting, and while some people are good at it, most people hate it. This is still a great time to buy a home, or even refinance the one you are in. In regards to buying a home, there are so many homes out there for buyers to pick from. Whether this is your first time buying a home, or your second, there is still time to get a great deal on a house.
-Mayer Dallal
Monday, October 25, 2010
Unreasonable Requirements
In the past year FHA has made several changes, some of which borrowers thought were too strict. Lenders are now getting rules that are more strict as well, so it applies to everyone. You are probably wondering what makes or breaks a lender in the process of qualifying to do FHA loans, and so I will share a little bit of that information with you, and the reason why things are changing.
The FHA, or Federal Housing Administration doesn’t loan money, but they do insure loans for banks and lenders. Lenders and banks have always had to show that they have a strong and reasonable force behind them financially to do FHA loans. HUD is now asking lenders and banks to reimburse them for loans that were not done according to the agency’s guidelines. Sound odd? Not really, and it isn’t in force yet, but if an agency is insuring loans for that lender they should be doing things right. Insuring loans is risky, and means that if the borrower defaults on the loan then the FHA covers it. So, it makes sense that they would want to take every step possible to ensure that the loans are being done properly.
All in all, this may be part of the reason that the FHA took steps in January of this year to write new regulations and standards regarding their requirements, along with increases in mortgage insurance. The FHA simply needed to find a way to strengthen its insurance fund, and prepare to insure more loans. The FHA loan programs have been booming as a result of a bad economy, in which families were able to buy with less money down than they would have been required to come up with if doing a conventional loan. The major uncertainty was only in the fact that once someone bought a home could they maintain the payments and upkeep? This is the question that FHA is asking to ensure that lenders are calculating debt-to-income ratios properly meaning that families are able to afford the monthly payments after all other bills have been accounted for.
In the past, banks were letting families buy homes with a debt-to-income ratio of 50% or higher. This doesn’t even sound right when we already know that these families have hardly any disposable income left at all. When families have little left over, and they have to choose between feeding the children and paying the mortgage, then they are naturally going to feed the children. Tight monthly budgets have triggered defaults, and therefore this includes even FHA loans too. The FHA wants to make sure that the lenders are following their guidelines, and not just passing deals through to get them done. This will be a huge benefit to everyone.
To find out more about getting your FHA loan today, you can go to www.fhaloansnow.net. You are welcome to use my FHA calculator there to see what fits into your monthly budget before you spend.
-Mayer Dallal
The FHA, or Federal Housing Administration doesn’t loan money, but they do insure loans for banks and lenders. Lenders and banks have always had to show that they have a strong and reasonable force behind them financially to do FHA loans. HUD is now asking lenders and banks to reimburse them for loans that were not done according to the agency’s guidelines. Sound odd? Not really, and it isn’t in force yet, but if an agency is insuring loans for that lender they should be doing things right. Insuring loans is risky, and means that if the borrower defaults on the loan then the FHA covers it. So, it makes sense that they would want to take every step possible to ensure that the loans are being done properly.
All in all, this may be part of the reason that the FHA took steps in January of this year to write new regulations and standards regarding their requirements, along with increases in mortgage insurance. The FHA simply needed to find a way to strengthen its insurance fund, and prepare to insure more loans. The FHA loan programs have been booming as a result of a bad economy, in which families were able to buy with less money down than they would have been required to come up with if doing a conventional loan. The major uncertainty was only in the fact that once someone bought a home could they maintain the payments and upkeep? This is the question that FHA is asking to ensure that lenders are calculating debt-to-income ratios properly meaning that families are able to afford the monthly payments after all other bills have been accounted for.
In the past, banks were letting families buy homes with a debt-to-income ratio of 50% or higher. This doesn’t even sound right when we already know that these families have hardly any disposable income left at all. When families have little left over, and they have to choose between feeding the children and paying the mortgage, then they are naturally going to feed the children. Tight monthly budgets have triggered defaults, and therefore this includes even FHA loans too. The FHA wants to make sure that the lenders are following their guidelines, and not just passing deals through to get them done. This will be a huge benefit to everyone.
To find out more about getting your FHA loan today, you can go to www.fhaloansnow.net. You are welcome to use my FHA calculator there to see what fits into your monthly budget before you spend.
-Mayer Dallal
Saturday, August 28, 2010
So, MetLife Wants to do Warehouse Lending?
Just when we thought no one wanted to lend money, we got a surprise. MetLife has decided to try its hand at warehouse lending in addition to its securities, and financial planning that it offers. From insurance to mortgages, it has now truly broadened its horizons. MetLife in addition to many other insurance and financial planning firms have been looking for ways to expand their potential, and this was one way to do it.
The managing director the for the operation, Brian Lewand made the statement that it was a “good fit” for the firm. In order to launch the financing end properly, the company hired two executives from Sovereign Bank to head up the launch of their new product. Ultimately, it takes more than two to run an operation like this, so MetLife is currently in the process of looking to add staff, but a process like this takes careful time and selection. At the end of their third quarter, MetLife plans to release more information regarding the next steps and what is going to happen.
I hope that this operations is successful, as the nation has faced so much disappointment over the past few years. Our country just can’t take anymore. My hopes are that certainly, a company that focuses on financial planning and insurance, will take all the right steps to grow this endeavor to the best of its ability.
-Mayer Dallal
Friday, August 27, 2010
The Rise on Government Backed Loans
Can we do this without the government? What I meant to say was, can we make a recovery without their help? I guess the answer to that is both yes and no. What I mean by this, is with the increase of applications in government backed loans, we can be in a really good position to move forward and upward in our economy without needing or getting some sort of bail out.
At least with FHA loans it appears this way. Bill Gross, who operates the largest mutual fund at Pacific Investment Management Company, said that there could be as much as a 4 percent increase in mortgage yields. With that being said, we know that mortgage applications have increased by 12.4% from the previous week, and each week prior to that over the past month applications have gone up. Additionally, Gross said that 95% of mortgages that were closed over the past year, were government backed loans. This means that whether they were purchases or refinances, these loans were backed by Freddie Mac or Fannie Mae. I guess the private sector simply charges too much?
Think about the differences in FHA over the conventional loans. With FHA purchases, you can put down as little as 3.5%, or up to 10% depending on your credit score. This was one of the changes that came this year. With conventional loans, you would need to put as much as 10% to 30% down. A majority of families need the lesser of the two, and it’s critical that consumers know that they have options in these tough economic times. I have been able to help so many families get into homes with the lower down payments, and not only that but being able to direct them in the way of how FHA works. It is important in times like this that your clients understand what options are available, and I can get their loans closed in as little as ten to fourteen days. Who likes to wait?
For more information on FHA loans, and how to get your clients qualified, go to www.fhaloansnow.net and take a look around. I have an FHA calculator there where they can put in the information to determine their affordability and payments, and there is valuable information on guidelines and requirements. You can also email me directly at mdallal@fhaloansnow.net, or call me at 310-498-2700.
-Mayer Dallal
At least with FHA loans it appears this way. Bill Gross, who operates the largest mutual fund at Pacific Investment Management Company, said that there could be as much as a 4 percent increase in mortgage yields. With that being said, we know that mortgage applications have increased by 12.4% from the previous week, and each week prior to that over the past month applications have gone up. Additionally, Gross said that 95% of mortgages that were closed over the past year, were government backed loans. This means that whether they were purchases or refinances, these loans were backed by Freddie Mac or Fannie Mae. I guess the private sector simply charges too much?
Think about the differences in FHA over the conventional loans. With FHA purchases, you can put down as little as 3.5%, or up to 10% depending on your credit score. This was one of the changes that came this year. With conventional loans, you would need to put as much as 10% to 30% down. A majority of families need the lesser of the two, and it’s critical that consumers know that they have options in these tough economic times. I have been able to help so many families get into homes with the lower down payments, and not only that but being able to direct them in the way of how FHA works. It is important in times like this that your clients understand what options are available, and I can get their loans closed in as little as ten to fourteen days. Who likes to wait?
For more information on FHA loans, and how to get your clients qualified, go to www.fhaloansnow.net and take a look around. I have an FHA calculator there where they can put in the information to determine their affordability and payments, and there is valuable information on guidelines and requirements. You can also email me directly at mdallal@fhaloansnow.net, or call me at 310-498-2700.
-Mayer Dallal
Saturday, August 14, 2010
The Changes to Mortgage Insurance Premiums
Right at this moment upfront mortgage insurance on an FHA insured loan is 2.25%. Effective on new FHA loans October 4, 2010 and later, the new upfront mortgage insurance premium will be 1.00%. On a $400,000 loan the 2.25% premium pencils out to $9,000 which is typically financed (added to the FHA base loan amount); in a month the upfront premium will be reduced to $4,000.
This might sound like good news, and a break for those who wish things would let up; but there is a catch. The yearly mortgage insurance (paid monthly) is increasing to 85-90 basis points (currently it's 50-55%). An increase of 0.3% of the yearly premium will increase the monthly payment (based on a $400,000 loan amount) to $300 (0.90 x $400k =$3,600/12) from $183 (0.55 x $400k =$2,200/12) an increase of $116.47 per month.
Using an interest rate of 4.25% and a based loan amount of $400,000, this is how it breaks down.
FHA Case Number BEFORE October 10, 2010:
$400,000 plus $9,000 = $409,000 amortized for 30 years at 4.25% = principal and interest of $2012.03 plus the yearly mortgage insurance of $183 = $2,195.03
FHA Case Number issued October 4, 2010 and after:
$400,000 plus $4,000 = $404,000 amortized for 30 years at 4.25% = principal and interest of $1,987.44 plus the yearly mortgage insurance of $300 = $2,287.44.
The new FHA mortgage insurance premiums have an increase in payment of $92.41 based on this example. This impacts both purchases and refinances using FHA insured mortgages.
For more information on the changes, you can go to www.fhaloansnow.net, or you can call me directly at 310-498-2700.
-Mayer Dallal
This might sound like good news, and a break for those who wish things would let up; but there is a catch. The yearly mortgage insurance (paid monthly) is increasing to 85-90 basis points (currently it's 50-55%). An increase of 0.3% of the yearly premium will increase the monthly payment (based on a $400,000 loan amount) to $300 (0.90 x $400k =$3,600/12) from $183 (0.55 x $400k =$2,200/12) an increase of $116.47 per month.
Using an interest rate of 4.25% and a based loan amount of $400,000, this is how it breaks down.
FHA Case Number BEFORE October 10, 2010:
$400,000 plus $9,000 = $409,000 amortized for 30 years at 4.25% = principal and interest of $2012.03 plus the yearly mortgage insurance of $183 = $2,195.03
FHA Case Number issued October 4, 2010 and after:
$400,000 plus $4,000 = $404,000 amortized for 30 years at 4.25% = principal and interest of $1,987.44 plus the yearly mortgage insurance of $300 = $2,287.44.
The new FHA mortgage insurance premiums have an increase in payment of $92.41 based on this example. This impacts both purchases and refinances using FHA insured mortgages.
For more information on the changes, you can go to www.fhaloansnow.net, or you can call me directly at 310-498-2700.
-Mayer Dallal
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