U.S. will extend HARP home loan program

WASHINGTON – Sept. 2, 2016 – Seven years after the federal government first offered an option to help some homeowners refinance into more affordable mortgages, the program is being extended yet again, and plans for a new refinancing program are being completed.

The Home Affordable Refinance Program, or HARP, already had been extended at least twice and was scheduled to end at the end of this year. But HARP will continue through September 2017, the Federal Housing Finance Agency said.

The program, begun in response to the housing crisis, allows people who owe more than their home is worth, or who have little equity, to refinance into a loan at current low interest rates. (The average rate for a 30-year, fixed-rate mortgage has hovered below 3.5 percent for weeks. For much of 2008, it was about 6 percent.)

More than 3.4 million homeowners have refinanced their mortgages under the program since it began, according to the housing finance agency, which oversees the mortgage giants Fannie Mae and Freddie Mac. About 18,000 borrowers refinanced under HARP in the second quarter of this year, down from nearly 20,000 in the first quarter. Still, more than 323,000 loans are estimated to remain eligible for refinancing under HARP.

Erin Lantz, vice president for mortgages with the real estate site Zillow, said about 12 percent of mortgaged homes remained underwater at the end of June. But borrowers may still not be aware that the HARP program exists, she said. Or, because they may have failed to qualify in the programs early years because of missed or late payments, they may think they remain ineligible.

Cora Fulmore, coordinator of the Florida Housing Counselors Network, said some borrowers remained wary, perhaps because of past tussles with lenders. Housing counselors have tried various outreach efforts to get people to apply, she said, including going door-to-door and offering gift cards to borrowers.

There’s a lack of trust, she said. They’re not believing this program can help them.

Some borrowers may be suspicious that HARP is too good to be true, or they may simply not want to take the time to apply, said Jay Plum, head of consumer and mortgage lending at Huntington Bank in Columbus, Ohio. The bank has made overtures to eligible borrowers, he said, going so far as to send HARP document packages to homeowners by overnight delivery.

He urged borrowers who might think they do not have refinancing options to take a look at the program, noting that it offers a streamlined application process that often does not require an appraisal. It really is in their best interest, he said.

Madonna Barwick, 49, a teacher who lives in Canfield, Ohio, said a teller at a Huntington grocery store branch told her about HARP. She was able to refinance her mortgage last year, she said, lowering her monthly payment by more than $300 and easing her financial worries. Her rate dropped to just over 4 percent from more than 6.6 percent. It was a blessing, she said.

Here are some questions and answers about special refinancing options:

What loans are eligible for HARP refinancing?

Loans must have originated on or before May 31, 2009, and must be owned or guaranteed by either Fannie Mae or Freddie Mac. The property must have a loan-to-value ratio the mortgage divided by the homes value of 80 percent or higher. (A $140,000 house with a $130,000 mortgage would have a loan-to-value ratio of about 93 percent.) The borrower must have had no late payments in the previous six months, and no more than one late payment in the previous year.

Do I have to do a HARP refinancing with my current lender?

No. You should start by contacting your current loan servicer, but you should also check other lenders to compare rates and fees, said Ms. Lantz at Zillow. To find participating lenders in your area, search on the HARP website.

Bob Walters, chief economist with Quicken Loans, said borrowers should not hesitate to inquire about HARP if a loan officer does not mention it: They should certainly ask.

How will the new refinancing option available in October 2017 differ from HARP?

As with HARP, borrowers will generally have to be current on their payments. Unlike HARP, however, the new refinancing option will not have a cutoff date, so loans made after May 2009 may be eligible. And unlike with HARP, borrowers can use the new refinancing option more than once.

The new offering will generally focus on mortgages with loan-to-value ratios of 95 percent or higher. Freddie and Fannie say they will announce more details in November.

Copyright © 2016 Cihan News Agency; provided by SyndiGate Media Inc. All rights reserved.

 

How to Choose Your Listing Agent

interviewing realtor

Hiring a listing agent is crucial to your entire experience as a home seller. The person you choose will be involved in preparing your home for sale, establishing a listing price, marketing your property and negotiating the transaction.

While you might be tempted to hire a friend who has a real estate license or your co-worker’s sister, remember that the person you enjoy meeting for drinks isn’t always the best REALTOR® to represent your interests. That friend could turn out to be the right agent for you, but before you choose him or her, take the time to get recommendations for several agents and interview them.

You’ll be paying a significant commission to this person (often 6% of the sales price of your home), spending time with them, and relying on their advice to sell your home for the best possible price and as quickly as possible given market conditions.

What to Look for in an Agent

Many sellers are tempted to choose the REALTOR® who suggests the highest list price for their property and who gives their home the most compliments, but you’re better served by a realistic REALTOR®.

You need to find a REALTOR® with whom you can communicate easily, someone who knows your neighborhood well and has a good marketing plan to reach buyers who are not only interested in your home but are also qualified to buy it. Most REALTORS® have experience looking at homes and can offer advice about the condition of your home and ways to improve its appeal without overspending.

When you talk to neighbors and friends about their recommendations for a REALTOR®, ask them how easy it was to reach the agent when they had questions, and how much support and advice the agent gave them throughout the sales process.

Questions to Ask During the Interview

A REALTOR® typically has a listing presentation she provides for sellers—often in the sellers’ home so that she can get a look at the property and its condition. Some of your questions may be answered during the presentation, but if not, you may want to ask the following:

  • Are you a member of the National Association of Realtors? REALTORS® must abide by the NAR’s code of ethics. In addition, each state’s real estate license requires continuing education for agents.
  • How many sales did you complete last year?
  • In what price range do you sell most of your homes?
  • What was the average difference between sales price and list price? While this depends on your local market conditions, a REALTOR® who often sells homes well below list price may not be advising sellers to price their homes correctly or may be inadequately marketing homes.
  • What is your marketing plan for my home? How many websites will include information about my home? Where will you look for buyers?
  • Do you have advice for me about the condition of my home? Do you have expertise as a home stager or do you recommend that I hire a professional stager?
  • Can you recommend contractors and moving companies?
  • How often should I expect to hear from you when my home is on the market?
  • Will you provide me with regular feedback and updates about potential buyers?

Pricing Advice

The most important conversation you will have with your agent is about the price of your home. The REALTOR® you choose should present you with a comprehensive market analysis that compares similar homes that are on the market, have sold recently and have been taken off the market.

You are paying for your REALTOR®’s knowledge and expertise, so listen carefully to the advice you receive and choose your agent thoughtfully.

Source: http://www.realtor.com

Veterans Guide To Home Ownership

Chapter 1

Be on the Money—Get Your Finances in Order

Check (and Repair) Your Credit

Veterans and military buyers can face some unique credit challenges. Here’s how to whip your credit into shipshape before embarking on the home-buying process.

Prepare Your Finances

Get your fiscal house in order! Stability is key when it comes to showing a lender you’re a good candidate for financing. So here’s what you need to know to ensure you’re on the right track.

Loan Pre-Approval Is Key

Many real estate agents won’t even show homes to buyers who haven’t been vetted by a lender. Here’s why you should get pre-approved—today.

How Much Can You Afford?

How Much Can You Afford?

This is not your average mortgage calculator. It’s designed for veterans and active-duty military members, and can help you figure out what’s in your price range, and what isn’t.

Go to VA Home Loan Calculator

Discover the advantages of the VA loan for military home buyers.

Discover the advantages of the VA loan for military home buyers.

Visit our Veteran Home Loan Center

Chapter 2

Find the Right Home Loan for You

Understand Your Loan Options

VA loans are a huge benefit, but they’re not always the right fit for veterans and military buyers. Learning about all your loan options is key to getting the best deal possible.

Home-Buying Benefits for Veterans & Military Buyers

When it comes to buying a house, being a veteran or active-duty service member offers some distinct advantages.

Are You Eligible?

Check out our handy tool to see if you may be eligible for a $0 down VA home loan.

Some rent-to-own agreements questioned

NEW YORK – Aug. 23, 2016 – In an effort to turn more of their renters into homeowners, landlords increasingly turn to rent-to-own contracts.

But a recent investigation by The New York Times calls into question some rent-to-own agreements, arguing that some of these deals are risky, lack consumer protections and may not even be enforceable in some states.

Smaller firms, in particular, tend to offer renters the opportunity to lease less expensive homes with an option to buy. But housing lawyers are reporting an increase in disputes involving rent-to-own transactions and cautioning renters to read contracts carefully before they sign.

In one recent case, the city of Columbus filed a lawsuit against Vision Property Management. The company, which owns more than 5,500 homes nationwide, does not offer regular leases or mortgages but instead “rent-to-own” agreements that require tenants to make all repairs, no matter how big.

After signing the rent-to-own agreement, however, some renters discovered building code violations and major problems with their homes. One renter told The New York Times he received an $8,000 bill for the cost to install a new sewage system. The renter says Vision helped him find a contractor to make the repairs but then rolled the cost into a new contract, which then valued the property at $60,000 and increased his monthly cost by $65 a month.

Vision maintains that it offers a “full and unconditional refund” to tenants within the first 30 days of a contract.

“Our goal is to put people into houses and turn renters into homeowners,” Landlord Alex Szkaradek said, and such rent-to-own agreements help residents with poor credit to qualify for mortgages and obtain homeownership one day.

The recent New York Times investigation seems to dispute their lofty goal.

“Most tenants walk away with nothing, having sunk money for rent and repairs into homes they had once hoped to own,” The New York Times reports. “Others faced surprise evictions, having signed a contract that did not disclose what repairs were needed, yet set a deadline for making sure the home was up to local housing code. As different tenants move in and out of the same property over the course of years, many homes fall further into disrepair.”

“We’re seeing an influx in these contracts,” Katarina Karac, a city lawyer for Columbus, who is involved in one case the city has against Vision, said. “It looks like a landlord-tenant relationship, except instead of having the landlord take care of the property, they are putting that obligation on the tenant.”

Some renters now say they were confused by the contracts’ terms and requirements when they signed. They later found they were stuck with big, unexpected bills for repairs.

“They signed their leases and put down an initial payment to reserve the right to buy the house,” The New York Times reports. But “unlike most typical home purchases, rent-to-own contracts have no requirement to obtain an independent home inspection. The customers contend they were not informed of outstanding issues with Vision’s homes, many of which the company had bought for $10,000 or less.”

In addition, tenants who leave before the end of their seven-year contract leave with nothing. They don’t receive any credit for the money spent on repairs or renovations while they lived there, and they don’t receive legal title to the home until they make the last payment to the landlord. Even then, they still often need financing to complete the deal.

Most states require landlords to keep homes and apartments they lease in habitable condition. Housing experts argue that such landlord obligations cannot be waived.

“If it’s a lease and they are claiming that none of the landlord-tenant obligations apply, then I would argue they have to adhere to federal truth in lending rules,” says Judith Fox, a professor of law at the University of Notre Dame. “You can’t have it both ways.”

Source: “Rent-to-Own Homes: A Win-Win for Landlords, a Risk for Struggling Tenants,” The New York Times (Aug. 21, 2016)

© Copyright 2016 INFORMATION, INC. Bethesda, MD (301) 215-4688

Buyers want to build a home? It’ll take 7 months

CHICAGO – Aug. 17, 2016 – The average time it takes to complete a new single-family home is seven months in Florida and nationally, according to recent Census Bureau data. That completion time includes nearly a month for getting the permit to start the project – 27 days in Florida – and then another 6 months to complete the construction.

Houses built for sale took the shortest amount of time – 6 months to complete after obtaining building permits. On the other hand, homes built by owners averaged the longest time at nearly a year. Homes built for rent averaged about 9 months from permit to completion, the data shows.

Homebuyers generally have the longest waits for a new home in the New England area, which had the longest time from permit to completion at 10 months. On the other hand, the Mountain region had the shortest amount of time at 6 months. The region also has the shortest waiting period from permit to construction start.

Breakdown by region of the average months from permit to completion of a new single-family home

  • Pacific: 8 months
  • Mountain: 6 months
  • West North Central: 8 months
  • West South Central: 7 months
  • East North Central: 8 months
  • East South Central: 8 months
  • New England: 10 months
  • Middle Atlantic: 10 months
  • South Atlantic: 6 months

Average days by region from permit to start on a new home

  • Pacific: 31 days
  • Mountain: 15 days
  • West North Central: 20 days
  • West South Central: 35 days
  • East North Central: 23 days
  • East South Central: 25 days
  • New England: 28 days
  • Middle Atlantic: 27 days
  • South Atlantic: 27 days

Homes in metro areas took, on average, nearly 7.5 months to complete – about 2 months shorter than homes started in non-metro areas.

The 2015 Census data also found that 66 percent of single-family homes sold while under construction, 32 percent sold before construction started, and 12 percent sold within one month of completion.

The percentage of single-family homes completed last year that were not yet sold was only 6 percent, the same percentage as the first quarter of 2016.

Source: “Time to Build a Single-Family Home in 2015,” National Association of Home Builders’ Eye on Housing blog (July 20, 2016)

Why Student Debt May Not Hinder Homeownership

Rates BHStudent debt has long been thought to hinder new homeowners from entering the housing market, but recent data from Fannie Mae shows that this may not be a factor anymore.

The report says that according the Federal Reserve, total student debt in America has more than tripled in the last decade to more than $1.3 trillion in April. Meanwhile, the U.S. homeownership rate is near a 48-year low at 63.5 percent, according to the Commerce Department’s report for the first three months of this year.

According to the report and data from Fannie Mae’s National Housing Survey, potential buyers with student loans who received a bachelor’s degree, or a higher level of education, are found to be 27 percent more likely to be homeowners than those who are high school graduates who didn’t attend college and therefore have no student debts.

This study notes that the issue of student debt is likely to affect the homeownership rates of certain groups of people more than others. For example, those who completed at least a bachelor’s degree without student debt were 43 percent more likely to be homeowners than high school graduates who didn’t attend college and don’t have student debt.

“Before we ran this analysis, we knew [student debt] would likely hurt homeownership rate, but we didn’t know to what degree,” says Qiang Cai, an economist with Fannie Mae.

The report still states thought that while student debt may delay homeownership, it doesn’t eliminate the idea altogether. For example, renters ages 25 to 44 with student debt are shown to be 28 percent less likely to buy rather than rent their next home compared to those without student loans.

While graduating debt-free makes owning a home easier, the report states that economists across the board agree over the importance of a college degree when it comes to unemployment and income levels. Likewise, another study about homeownership and student debt by the Federal Reserve looked at credit reports and data on college attendance from the National Student Clearinghouse. The study shows there’s a major gap in homeownership between those who do and don’t go to college, similar to the results found from the Fannie Mae study.

Source http://www.dsnews.com

Buying a House, the First Steps

September 24, 2015 Home SearchMortgages

buying-a-house-first-steps

Now that the initial paperwork has been done, it’s time to find your new home. No doubt you’ve already been online and have probably seen a house or two. You may even have a good idea of what your new address will be.

But let’s take a couple of minutes and fine-tune the process a bit. There might be an idea or two here that hasn’t yet occurred to you.

Ready, set, house hunt!

Once you obtain a preapproval letter, you’ll know exactly the price range in which you should be house hunting, and sellers will negotiate with confidence that you can close the deal. This makes a big difference, especially when you’re looking for a home in a hot market. Plus, real estate agents want to spend most of their time only with preapproved buyers.

Another benefit of having that green light in hand: Since you’ve provided a lot of the initial information to qualify for a loan, you have a head start in completing the underwriting process. That can speed the process along once you have a contract for a particular home. Depending on how long your house hunting has been going on, it’s likely you’ll have to update some, if not all, of the financial information that you initially provided to obtain the preapproval.

So we’ve laid out the reasons why a preapproval is so important, provided guidance for obtaining a preapproval letter and discussed the benefits of having that piece of paper in your hand. Now it’s time to do what you’ve been waiting for: hit the streets and find your new home.

Target your potential neighborhoods

You probably have a neighborhood in mind, or at least an idea of what it should look like, how it will feel and its general location: in the city or away from it all; convenient to shopping or next to nothing. Once you start seriously house hunting, you might be surprised how much you learn — and where you want to be.

Don’t just walk through the house—make sure you spend time in the neighborhood, too. What’s within easy walking distance? Do you like the vibe? Most people just walk through the open house, but getting a sense of the neighborhood, during the day and night, can be just as important.

If you’re new to an area, you’ll need all the guidance you can get. In some cities you might be advised to live “in the Mission,” “within the Loop,” “south of the river” or “uptown.” Everybody has an opinion. It’s a good idea to find a trusted real estate agent to guide you through your new city to help find the home that’s just right for you.

If you’re already familiar with what will be your long-term hometown, the questions can be even more specific. Single-family or condo? Ranch or Victorian? New construction, “gently used” or well-worn?

If you have children, deciding on the right school district will help narrow down your neighborhood. If not, you may be more interested in proximity to mass transit, coffee shops or food trucks.

House-hunting tools you can use

Armed with apps, you’re the mighty house hunter of the subdivision safari. Check out these online tools:

  • Trulia and Zillow: These co-owned websites and related apps offer detailed maps of neighborhoods with lot-level prices, heat maps of crime statistics, school profiles and more. Zillow’s “Zestimates” of home values and future price forecasts are an interesting home-comparison gauge.
  • Doorsteps Swipe: It’s kind of like the Tinder for real estate. You can “like” your favorite listings, which then can be organized by location and even shared with friends. The app promises to “learn” your preferences and track what’s important to you: number of bedrooms, baths, price or location.
  • HomeSnap: Drive by a home and want to know more? Snap a photo and this app will offer more information, such as price, interior photos, prevailing property taxes, public school info and more.
  • House Hunter: This app helps keep you organized with notes, pictures and a scoring tool that lets you identify houses that best match what you’re looking for. You can prioritize among 80 different home features and add custom features that are important to you.
  • Realtor.com: Promises to update listings of millions of homes every 15 minutes. You can search houses for sale by school and school district and even get alerts on price changes.

Sliding into home

Few homes are perfect, but you can realistically shoot for finding a great home — one that you can truly love. Just know that there will be some compromises along the way.

The National Association of Realtors says the average homebuyer takes about 10 weeks to find what he or she is looking for. That means you’ll be doing a lot of research, walk-throughs, drive-bys and comparisons over coffee. Take your time; don’t make a rash decision and don’t get desperate. Your new home is out there waiting for you. It may just take a little time to find it.

Hal Bundrick is a staff writer at NerdWallet, a personal finance website.