Lora Coscia

This won't be as important to Realtors as much as it will for customers who need to refinance for whatever reason.

Effective November 1, 2009 HUD will enforce some new rules for FHA Streamline refinance loans. We're going to have a BIG meeting next Wednesday and I'll post more information afterwards but here are some of the highlights so far.

If subordinate financing is remaining in place, the maximum combined loan-to-value ratio is 125 percent.

For streamline refinance transactions WITHOUT an appraisal, the CLTV is based on the original appraised value of the property.

For streamline refinance transactions WITH an appraisal, the CLTV is based on the new appraised value.

Currently customers who have suffered a significant decrease in value can refi the 1st using and FHA loan and keep the second mortgage or HELOC in place with no consideration to the combined loan to value.

STREAMLINES WITHOUT AN APPRAISAL, WILL NOT BE ABLE TO ADD IN CLOSING COSTS; & EVEN WITH AN APPRAISAL, CANNOT ADD IN DISC PTS

Currently there is no need to obtain and appraisal for a streamline rate/term refinance. Some other factors must be met such as no late payment in the past 12 months, etc.

Keep in mind that should you need an appraisal and the value is not within the guidelines of maximum loan to value, you may have just wasted $425-$500 for an appraisal plus any other additional fees incurred in the process.

I'll post more details in about a week. I can't wait to see what else the "powers that be" can do to put us all in the poorhouse!

Have a great weekend! Lora

If you want to take advantage of the $8000 Federal Tax Credit you MUST CLOSE BY NOVEMBER 30, 2009!!!

There are still plenty of nice homes for sale! Take advantage of the negotiability in dealing with the seller, whether it be the current owners or the bank with a short sale or foreclosure.

Take advantage of the long weekend and call us to get pre-qualified to buy now! We'll be available so why wait any longer, DO IT NOW! We only need income information and credit information to determine your buying power. It's easy and painless!

Realtors want you to be pre-approved or pre-qualified prior to showing you a home. It's in YOUR best interest as well. You only want to look at homes you are able to purchase, not ones you can't afford. You set yourself up for disappointment by doing that. Save you and your realtor time and gas!

SPECIAL RATE for purchases only over $200K - 4.875% with 1 Origination Point FHA/CONV Fixed 30 year

FHA has the 3/1 ARM available at 3.875% with 1 Origination point too if needed.

VA buyers can get 100% financing and ask the seller to pay all closing costs!!!!

Make this a holiday weekend to remember!

FHA is now offering ARMS again!

Yes indeed! You heard right! Buyers now have the option to use either the 3/1 ARM or the 5/1 ARM when purchasing a new home which enables them to qualify for more house since they will qualify at the 1st year note rate.

Today's rate (5/2/09) is:

3.75% with 1 Origination point for a 54 day lock. Caps 1/1/5 Margin 2.0

THe 5/1 ARM is slightly higher of course but it has Caps of 2/2/6 which clearly makes the 3 year arm a much more attractive choice. Since the 3/1 ARM has the 1% per year cap in 2 years the rate at worst would be 5.75%. THe cap for the life of the loan would be maxed out at 8.75% but if the circumstances of the buyer would fit this type of situation the ARM might be a great alternative for them.

VA is also offering a ARM but we must call into marketing for quotes on these.

Just a reminder for everyone. We always hear to check your credit at least once a year. We see commercials advertising free credit reports on tv all the time.

Just in case you aren't aware, you can look at your credit report for free at www.annualcreditreport.com once a year. Since you are only permitted to pull it once a year, a good tip is to pull it on your birthday! You only have one per year, so it just makes sense.

The reporting scores that you get will vary from the scores that a Lender will receive on your report. This is due to the fact that it's a consumer report and those scores tend to be slightly higher than the scoring used for mortgages. It's a common misconception and often difficult to explain to consumers, especially when the lender gives them a negative response.

In today's marketplace, many credit providers are reducing the limits on consumers accounts. This could impact your credit score big time if you have a slightly high balance and they lower it to your current balance! When they lower your limit you might be over half the amount of high limit which in turn reduces your credit score. We always recommend that customers never take their balance over half the limit so as to not have any points reduced on your score. The computer brains at the credit bureau thinks you are maxing out your card and therefore the score gets reduced.

The next reason to check on that credit is identity theft. With today's economy the way it is and many, many people are out of work, often this generates increased crime statistics. Desperate people do desperate things. So now its more important than ever to keep an eye on that credit report, especially if you've gone green and aren't getting paper statements any longer.

FHA is changing its refinancing guideline again effective April 1, 2009. The loan to value cannot exceed 85% and MUST have 2 appraisals in order to do so. Credit scores continue to be a key factor as well. It's very hard to get any loan approved under 620 now.

FHA used to allow up to 95% loan to value and just recently added the 2nd appraisal stipulation. If it's a townhome two full appraisals are required, but if its an individual home a ride by is acceptable for the second valuation. This will certainly hinder a lot of homeowner's from utilizing their equity if necessary.

Homeowner's should continue to maintain their credit scores and not be late on any accounts that report to the credit bureau's. Credit scores and loan to value are a mandatory factor when purchasing or refinancing a home. Your excellent credit continues to open doors, but mediocre and poor credit can turn your dream into a nightmare nowadays.