FHA Loan Requirements- How changes will effect the real estate market.
It was recently announced that FHA is going to change the current guidelines for FHA qualifications. One of the big changes is the reduction of seller assistance. The current seller contribution for a seller assist by FHA is 6% of the selling price of a home. The newly proposed cap on seller assistance is 3% and are scheduled to take place in spring of 2010. Many people think this will lessen the likelihood that a seller will go int foreclosure because they will be more vested financially into the sale.
So why change FHA loan requirements? The reason FHA wants to set a standard of lending guidelines is because Congress mandated that FHA has to maintain a cash reserve of at least 2% of it's outstanding loans. Currently, FHA's cash reserve is below 0.5%. They feel they have to do something to strengthen their finances.
Some other proposed changes include a minimum credit score of 580 and MIP (mortgage insurance premium) to be raised from 1.75% to 2.25% of the loan amount. This change is to take place on April 5, 2010. Many lenders already have a minimum score of over 600 and charge 2.25 MIP.
I feel the people who these changes will effect the most will be the first time home buyers. Many first time buyers struggle to come up with the thousands of dollars it takes to buy a home. They rely on a seller assist to help pay for some of the costs. The reduction of seller assist imposed by the new FHA loan requirements will keep many first time buyers from purchasing a home until they are able to save the additional 3% needed to pay for their closing costs. With these changes a buyer purchasing a home for $200,000 will need to save an additional $6,000 for closing costs. With the real estate sales down, these changes could have an even greater slowing effect on the real estate market.
The market statistics reports for October 2008 and October 2009 for the Philadelphia region (the region Trend MLS services and reports) are in. In 2008 there was a much larger inventory of homes on the market 8,825. In October of 2009 that number dropped to 8,034. In addition, the average median sold price in Oct. 2008 was $130,000. In Oct. 2009 that number increased to $132,000. While these numbers aren't earth shattering, they do show some improvement in the market. Home inventory was down and prices were higher as well. Sellers are receiving between 91% to 98% of their asking price when selling. The average days on market for the city is 73. That number is down slightly from the 2nd quarter of 2009 at 79 DOM. All of these numbers show a slow recovery to the damaged real estate market in Philadelphia. The government's tax credits for first time buyers (and now to some sellers) has helped push up some sales numbers and has helped overall to stimulate the real estate market in our area.
I do fear some of the positive information in this quarter's report is a false sense of hope. The numbers are inflated because of the government tax credit. What will happen when the tax credit goes away? I don't know for sure, however, I think the market recovery will slow when the tax credit expires. Homes will continue to sell, just at a slower pace and possibly add to the market inventory. Thanks for reading.
Real Estate is my life. I've been helping home sellers and home buyers in the Philadelphia, South Jersey and surrounding areas for the past seven years now and have been loving every minuite of it.
My Client-First Philosophy
There are many qualities and skills that go into being an excellent real estate professional - integrity, in-depth community and market knowledge, marketing savvy, effective negotiation skills and a high-quality professional network, all of which are hallmarks of how I work.
That said, in my experience as a Philadelphia real estate professional, I've also found that providing the very best service is essentially about putting my clients first. This means keeping myself accessible, being a good listener as well as a good communicator, and responding quickly to your needs.
This "client first" philosophy has always been my approach and it requires me to continually improve my skills and ways of doing business. In addition, I've found that the latest technologies are enabling me to do everything I've always done, only much more quickly and efficiently. They've also helped me to extend the range of services I provide to my clients.
So when you decide that you'd like to buy or sell a home in the Philadelphia areas, please contact me.
I work in the Philadelphia, South Jersey and surrounding areas. I specialize in working with first time buyers and sellers who are looking to relocate or who are looking to upgrade or downsize. I hold a Bachelor's and Master's degrees. I feel my experience as a former teacher enables me to better educate my clients on their real estate transaction.
I make sure that sales contracts comply with my client's instruction and best interest. I will also serve as your guide through the maze of appraisals, documents, marketing, loan requirements, inspections, disclosures and finally to the successful closing of your new home. My goal is to serve my clients in such a way that they will return to me as future real estate needs arise. I recognize the importance of a good name in the business community, as well as the value of customer referrals. I promise that I will work diligently to provide you a positive and professional experience. I will do so with honesty and integrity combined with "old fashioned" work ethic. I will represent your best interest from initial contact to closing.
If you or someone you know is in forclosure or about to go into forclosure, I have a large ammount of experience working with lenders to negotiate a short sale and stop forclosure. Please visit my wesight for helpfull information on shortsales and how to avoid forclosure. www.ChrisSellsMore.com
My Testimonials
"My wife and I would rate Christopher Rossmaier's expertise as a realtor at an A+. Upon our first meeting, he clearly presented an organized, concise layout of his plan. Professional graphs, concrete numbers, and terms/conditions were incorporated in his Remax packet. Also, Chris was able to explain the market and pricing in order for us to establish a fair market value for our home. His attention to detail and level of commitment throughout the entire experience of selling and buying a home were evident. He was abreast of the latest laws and fluctuations in the market. Chris also placed quality photos on the Internet and created vivid marketing materials and a virtual tour of our home.
Personally, we felt secure knowing he earned two college degrees in education, as well as being a family man with four children. With this background as a school teacher, Chris assisted in explaining the nuances of real estate to us. He clearly had our best interest at heart. Basically, he worked hard to sell our house and to find a new one for our growing family.
Lastly, on the day of settlement, Chris studied the paperwork diligently and discovered some hidden fees our untrained eyes would not have discovered. He fought for us in a professional manner, which we will never forget.
My wife and I would recommend the services of Christopher Rossmaier without reservation."
Sincerely,
Patrick and Mallon McCloskey
"Mr. Rossmaier came highly recommended to me by a family member. He had recently completed a real estate transaction with Chris that was done in a very efficient and timely manner.
I acted on that recommendation and I am equally impressed and satisfied with the manner in which my transaction was handled.
I contacted Chris on June 25, 2009. My property was put on the market about June 27, 2009 and was sold in 6 weeks. He did not promise me this kind of turn, however, in spite of the down housing market he sold my house and I couldn't have been more pleased.
Chris is a diligent, business-oriented, high achiever. He is also family oriented and is very pleasant to work with. Let him help you make your dream a reality.
I highly recommend Chris to handle all your real estate matters."
Sincerely,
Loretta H. Brown
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
Powered by the ActiveRain Real Estate Network
© 2012 ActiveRain Corp. All Rights Reserved
