FHA Mortgage Changes - Effective April 5th, 2010

New Year brings some minor changes to the FHA Program. FHA =(Federal Housing Administration).

What is FHA?

FHA loans have been helping people become homeowners since 1934.

How do they do it?

The Federal Housing Administration (FHA) – which is part of HUD – insures the loan, so your lender can offer you a better deal.

Low down payments
Low closing costs
Easy credit qualifying

CHANGES FOR 2010:

FHA Currently Collect a premium of 1.75%

Effective April 5th, 2010 FHA will now collect an upfront mortgage insurance premium of 2.25% for the following:

Purchase Money Mortgages and Full-Credit Qualifying Refinances = 2.25 percent
Streamline Refinances (all types) = 2.25 percent
HOPE for Homeowners (Delinquent Mortgagors) = 2.00 percent
Home Equity Conversion Mortgages = 2.00 percent

This might seem like a hit to the housing market. To buyers this will be a small increase in your monthly payment.

Is it too soon? You be the judge!

Please contact a HUD approved Lender for details!

CLICK HERE to Visit HUD's Website and Learn more!

Just Bought a Condo - Why do I need an HO-6 Policy?

Scenario: You have just purchased a Condo and the lender wants you to purchase an HO-6 Policy as a condition of lending you money.

**Please Consult your Insurance Agent for specific coverage in your area. The following information is deemed liable but George Langford takes no legal responsibility**


What is an HO-6 Policy?

If you think insurance for your condominium is covered by your association fees, think again. Typically, your monthly condo fees are used to fund a building insurance policy. If your unit is robbed or damaged, your building insurance will not provide any coverage for your personal possessions, nor will it offer you any protection from personal liability. An HO-6 Policy covers the interior of your unit compared to the exterior of your unit that is typically covered in your monthly dues.


What does the HO-6 Policy Cover?

Under the general terms of HO-6 condominium owner coverage, your policy should cover your personal property from 16 perils:

Fire or lightning

Windstorm or hail

Explosion

Riot or civil commotion

Damage caused by aircraft

Damage caused by vehicles

Smoke

Vandalism or malicious mischief

Theft

Volcanic eruption

Falling objects

Weight of ice, snow, or sleet

Accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning, or automatic fire-protective sprinkler system, or from a household appliance.

Sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water heating system, an air conditioning or automatic fire-protective system.

Freezing of a plumbing, heating, air conditioning or automatic, fire-protective sprinkler system, or of a household appliance.

Sudden and accidental damage from artificially generated electrical current (does not include loss to a tube, transistor or similar electronic component)

Why is the Bank requiring this Policy if the HOA (Home Owners Association) has an Insurance Policy in place already?

It varies from lender to lender but most banks are now requiring an HO-6 Policy when purchasing a home, and they may require it even with a refinance. This is just an extra step banks are taking to ensure their assets (Properties) they lend on. Most policy run on average a couple hundred dollars a year. I would consult with your Mortgage Broker or Banker for more details.

When Buying a Home should you get a Home Inspection?

YES!

What is a Home Inspection?

A Home inspection is a visual examination of the structure and systems of a building. If you are thinking of buying a single family home, condominium, or multi-unit building you should have it thoroughly inspected before the final purchase by an experienced and impartial professional inspector. A professional inspection is simply an examination into the current condition of your prospective real estate investment. It is not an appraisal or a Municipal Code inspection. An inspector, therefore, will not pass or fail a building, but will simply describe its condition and indicate which items will be in need of minor or major repairs or replacement. A complete inspection includes a visual examination of the building from top to bottom. The inspector evaluates and reports the condition of the structure, roof, foundation, drainage, plumbing, heating system, central air-conditioning system, visible insulation, walls, windows, and doors. Only those items that are visible and accessible by normal means are included in the report.

When Should I have an Inspection Done?

The best time to consult the inspector is right after you’ve made an offer on a property. The real estate contract allows for a grace period (Inspection Contingency) to inspect the building. Ask your professional agent to include this inspection clause in the contract, making your purchase obligation contingent upon the findings of a professional inspection.

What is my Duty as a Buyer?

You have an affirmative duty to exercise reasonable care to protect yourself, including discovery of the legal, practical and technical implications of disclosed facts, and the investigation and verification of information and facts that you know that are within your diligent attention and observation. This is the best way to protect yourself. It is extremely important for you to read all written reports provided by professionals and to discuss the results of the inspectionswith the professional who conducted the inspection. You have the right to ask the seller to make repairs, corrections or requests. After the inspoection if you feel you do not want to purchase the home based off of the findings you have the right to cancel the escrow.

San Francisco Real Estate Inspections
San Francisco Single Family Homes, Condos, Tenancy In Common, New Homes, Multi-Unit Buildings, Investment Properties.

George Langford - Zephyr Real Estate

New Year - New Bank Guidelines!

Ringing in the New Year seems like just another day, but 2010 will bring some changes to the lending guidelines. Below are some significant change that would affect a buyer's approval or the type of property you may purchase.

Change #1: Conventiaonal Loan Debt to Income (DTI)
2009 - DTI was 55% for Conventional
2010 - DTI is NOW 45%

**FHA will still allow DTI to be 55%

Definition for DTI: The ratio of monthly debt payments to monthly gross income. Lenders use a housing DTI ratio (house payment divided by monthly income) and a total DTI ratio (total debt payments including the house payment, divided by monthly income) to determine whether a borrower's income qualifies him or her for a mortgage.


Change #2: FHA Approved Properties
In order for FHA (Federal Housing Administration) to lend money on a property it first must be "FHA Apporved". As of February 2010 all properties that are FHA must get approved again.

What does this mean for you the bueyer?

This Process could take over a month to obtain an approval. Expect Longer escrow times in 2010 due to this change.

*** I do know of a Lender/Bank that once they approve a few of these properties FHA will allow them to administrate the approval process without getting the FHA Approval. Please feel free to contact me with further information.

2009-2010 Real Estate - What we had what to expect!

2010: The year of Growth

If 2009 was the year of economic recovery, 2010 will be the year of growth.

Existing-home sales in 2009 rose to an estimated 5 million units for the year, a 2 percent increase over the 4.9 million sales in 2008. For 2010, NAR *National Association of Realtors are forecasting sales of 5.7 million units, a 13.6 percent increase.

The key to recovery in 2009 was the lower end of existing-home market. Fueled by the huge number of distressed sales - which drove down prices and returned buyers to the market looking for bargains. Also helping were continuing low interest rates and the extension of the first time home buyer credit.

A look back at 2009 and a glance into the Future: (2009 Estimated & 2010 are projected numbers.)

Economic Indicators:
Inflation Rate 2009: -0.4% 2010: 1.6%
Unemployment rate 2009: 9.3% 2010: 9.8%

Housing:
Existing-Home Sales
Sales (in millions) 2009: 5.011 2010: 5.694
Prices: 2009: $172,600 2010: $178,800
Change (in price) 2009: -12.9% 2010: 3.6%

New Home Sales
Sales 2009: 397,000 2010: 549,000
Prices 2009: $211,100 2010: $219,900
Change (in price) 2009: -9.0% 2010: 4.2%

Affordability Index 2009: 166 2010: 147

Inventory:
Housing Starts 2009: 564,000 2010: 752,000
Month's supply 2009: 8.5 2010: 8.0


Please keep in mind that the San Francisco/ Bay Area is a different market. We have seen home prices rise in the past 6 months in the San Francisco Area. We are seeing multiple offers on properties well priced, good condition and great locations.