Ken Pederson, Certified Mortgage Planner

Here is a quick snapshot of what the market did last week and what's happening this week.

This is a good, quick read. Just Click Right Here.

Courtesy:

Ken Pederson
Certified Mortgage Planner, CMPS
FAIRWAY Independent Mortgage Corp.
717-431-9299

PA's Best Lender

What happened last week?
What to look out for this week?

And some financial tips on leasing versus buying an automobile.

Click on the link to my weekly "Market Update".

Courtesy of Ken Pederson
Certified Mortgage Planner, CMPS
www.FairwayPA.com
717-431-9299

Investment property purchases have been fairly strong this year, for good reason. Less people are buying homes which means more are renting and this trend may continue for a little while due to more standardized underwriting guidelines.

There is one change that has just happened to make it safer for the investor and that is a requirement for a minimum 20% down payment. As of today, there are no mortgage insurance companies that will insure an investment property. So, buyers will need at least 10% down payment and will be rewarded with lower rates if they put 25% down.

Now, many "buyers" like to purchase these properties with little down and they still can... they just need to use other collateral, such as their primary residence or second home. A buyer can use 10% cash and get 10% from a line of credit/home equity loan to complete their 20% down payment requirement. Of course, paying attention to cash-flow, rents and expenses is vitally important for the buyer to stay safe... but, there are ways to work around the larger cash down payment requirements.

Here are a few investment property guidelines for conventional lending.
1. No gift money is allowed for down payment or closing costs
2. Seller concessions are limited to 2% of the sales price
3. Buyer should have a minimum of 6 months PITI reserves remaining, after settlement
4. There is a limit to how many different properties you may own for conventional guidelines and there are still some "portfolio" lenders that do not have the same "# of property guidelines", which means you can own more than 4 and still get a mortgage.

Ken Pederson
Certified Mortgage Planner, CMPS
PA's Best Lender

In the past few months we have written a lot about FHA loans and the benefits of this "in vogue" mortgage product. We have also talked about the tightening of the industry, especially in the Freddie/ Fannie Conventional world.

So if I told you that there was a Conventional loan that had: NO down payment, NO monthly PMI, the seller is allowed to pay all reasonable closing cost and prepaids, and NO hit to the rate for the zero down, NOT a first time home buyer program and No reserves needed, what would you think? If I told you also that this particular mortgage also has a unique feature that all reasonable closing cost and prepaids can be rolled into the mortgage without the seller actually "paying" the cost (as long as the house appraises for the increased loan amount)? Think about how useful that would be in negotiations of contracts, especially when your buyer is purchasing a foreclosed property.

There IS a Conventional loan that has these great options and it is the USDA loan (yes, like the beef). It is area specific and income limited, so it is important that you work with a lender that is very knowledgeable with the loan guidelines!

We are a USDA Approved Lender throughout PA and most other States with our branch network. If you would like more information on this program... send me an email; kenp@fairwaymc.com and let me know where you are. If I can't help you directly, I'll put you in touch with one of someone in our branch network.

Ken Pederson
Certified Mortgage Planner, CMPS
FAIRWAY Independent Mortgage Corp.
Lancaster, PA 17603
717-431-9299

PA's Best Lender

Equal Housing Lender

If you read my other blog, MortgageScribe, you will know that I have been strongly in favor of purchasing real estate for quite some time now. There are too many strong factors that all point towards being a buyer or investor... Today, right now.

1. Strong supply of homes on the market in all price ranges.
2. Anxious sellers that are willing to negotiate prices, closing costs or both.
3. Crazy low interest rates
4. Tax Credits of up to $7,500. for first-time homebuyers!!! (this is HUGE)
5. Home prices are down and off their highs. (Buy low, sell high)
6. Mortgages are readily available with safe 30 year fixed rates for most buyers.

Now, because I'm in the mortgage business, I'm not sure many people listen to me. So, for you non-believers... listen in and watch this short video. If you are a Realtor, this is a MUST watch.

Just Click Here. Video is courtesy of www.Foxnews.com

Courtesy of Ken Pederson
Certified Mortgage Planner, CMPS
FAIRWAY Independent Mortgage Corp
717-431-9299
PA's Best Lender