Gloucester, NJ

Be prepared for the worse !!!!

Not sure if many of you know, but there is a possible government shutdown looming. This would affect FHA loans and possibly other mortgages. There are still talks on Capital Hill between the Democrats and the Republicans, if not solved, could shut down many parts of the government come Friday April 7th. The government funding bill expires on Friday at midnight.

Be aware this could affect the ability to get transcripts for IRS loans as well as more importantly, FHA case numbers. Not only could this delay the lender in obtaining a FHA case number, but FHA is increasing the annual mortgage insurance which goes into effect on April 18th, 2011. ~ FHA monthly mortgage insurance changes April 2011 ~

The ending result is that this could affect thousands of home buyers if this issue is not resolved. Especially because the usage of FHA loans have increased over the years. New mortgage numbers state that 35 percent of all mortgages are FHA loans. Many don’t realize that sometimes a buyer might need a few days before a specific deadline because the FHA case number could go into a “holds tracking” status. There are various reasons why this might happen., but the fact remaining, that file is placed on hold. So if a buyer is applying on April 17th and the result is a “holds tracking” status, and it takes 2 days for the case number to clear, that borrower would miss the deadline for the new change. This would result in a higher mortgage payment.

On another note, some of us are still trying to see if this will affect USDA loans also. From one source, I am told that it would shut down USDA loans, which means the USDA won't be able to underwrite the loans. I am waiting for some USDA officials to get back to me and I will update this post accordingly, unless someone knows otherwise.

Summary : Overall, this could affect so many other types of jobs. It still boggles my mind that the government is doing many things last minute. For a few years we had the national flood insurance issues that would come down to the last minute and so much more. People need to be aware of this, because this could affect thousands of home buyers and or delay closings, especially those applying for FHA loans.

On a side note, did you know that this would affect the military also? What about those military personnel with families in the United States who aren't working, depending on their spouses military checks. Again, why must we always wait until the last minute. Why can't we as a powerful nation, how some sort of emergency back up plan, for those that can't seem to agree on Capital Hill.

Here is an article by Kimberly Schwandt describing what jobs could be effected. ~ Administration paints picture of possible government shutdown ~

Key Reminder : Some lenders might take more risks than others, in what they will originate & close if the government shuts down.

MARK LAPP wrote this post today, 4/8/11 and gave some more details if the government shits down... what it will do to lending...

• The affect of a Government shutdown

For those that are interesting in buying a home, did you know that there are programs available from New Jersey State to help you attain your home ownership goals? The New Jersey Housing and Mortgage Finance Agency provides a variety of programs to help prospective homebuyers purchase a home. I will summarize some of the those programs.

First-Time Homebuyer Interest Rate - 4.50% with 0 points - 30 years!

New Jersey's HMFA provides for a below-market, fixed interest rate to first-time homebuyers and urban area buyers. The downpayments of as little as 3.5% are required and must come from the borrower's own assets. These loans are 30-year fixed rate. There are certain closing costs that can be gifted by family members, non-profit organizations or government agencies. Debt-to-income ratios are as high as 33 percent (housing debt, i.e., mortgage, taxes, insurance) and up to 38 percent (total monthly debt load). Properties that would be eligible for this program are one-family units, including condominiums (new and existing), 2- to 4-family dwellings which have been in existence for 5 or more years. For urban area buyers, Urban Target Areas (UTA) are based upon census data. Therefore, in order to find out if an address is located in a UTA, you will need to identify the census tract within which the address is located. To do this, you will need to give me a call so I can determine if the area you are interested in falls into a specific UTA.

Close to Home New Jersey

Close to Home New Jersey provides incentives for residents to purchase homes close to work. Through various HMFA programs and services, Close to Home helps residents achieve the dream of homeownership by providing them with attractive mortgage loans, downpayment assistance, or funding for the closing costs on a new home. Qualified employees benefit from competitive mortgage rates, while participating municipalities and employers benefit from having a committed workforce living nearby.

Smart Start

The Smart Start Program is available to participants in the Agency's first mortgage homebuyer's program who are purchasing homes in Smart Growth areas. The program helps these families by offering a second mortgage for downpayment and/or closing costs up to 4% of the first mortgage. Call me to find out if the home you are interested in is located in a Smart Start Area.

PFRS Mortgage Program

This program is available to active members of the New Jersey Police and Firemen's Retirement System (PFRS) with one year of creditable service are eligible for this program. Members may buy a home for the first-time or trading-up. The maximum mortgage amount is $417,000. Interest rate is 30 year fixed. Program rates are set semi-annually in February and August.

Home Plus Program

This is a fixed interest rate home mortgage available to qualified first-time and urban area homebuyers with immediate home improvement needs. Buyers are allowed to finance up to $15,000 toward home repairs and improvements as part of the first mortgage. Improvements that are allowed include replacing a roof, painting, installing improved heating or air conditioning systems, renovating a kitchen or bath, renovating plumbing or electrical systems and enlarging rooms. Energy conservation, solar energy improvements, and handicap accessibility improvements are also eligible. There are certain income and purchase prices limits, so call me to discuss your detailed needs.

Section 8 Home Choice Voucher

First of all, this is available to individuals only; corporations are not allowed to act as borrowers. The borrower must have a current Section 8 housing voucher from an issuing Public Housing Authority ("PHA") that has a HUD approved voucher payment administrative plan. The PHA administrative plan must permit vouchers for purchase of properties located in the place of purchase and the PHA may have to approve the financing terms offered by the Agency. Borrowers purchasing in Statewide areas must be first-time homebuyers. Borrowers purchasing properties located in the targeted areas do not have to be first-time homebuyers, however, at the time of loan closing no other residential properties may be owned. Combined housing and total debt ratio based on the Borrower's income (excluding Section 8 payments) can not exceed 41% of the Borrower's income. The voucher is for a 30 year maximum term, conventional, fixed rate, maximum 97% Loan-to-Value (LTV). Loans with greater than 80% LTV must have private mortgage insurance coverage or must have FHA, Rural Housing or VA coverage (note that government insured loans may not permit PITI write down option). Loan-to-value percentage is the unpaid balance of the mortgage principal to the appraised value or sale price (whichever is lower) of the property. Eligible properties are one-family units, including condominiums and cooperatives (new and existing). Properties must be pre-inspected and approved by the Public Housing Authority ("PHA"). The borrower must retain a qualified Home Inspector to perform a home inspection. All borrowers must participate in homeownership and personal finance counseling/education sessions sponsored by the Agency, the PHA or the lender. The PHA may impose additional counseling requirements. Borrowers must be issued a Completion Certificate after the counseling is completed. Some additional requirements are:

1. All loans require a minimum of 3% downpayment regardless of whether the loan has private mortgage insurance, FHA, Rural Housing or VA guaranties.
2. Borrower may fund closing costs with gifts or unsecured loans from non-profit organizations or public entities. Escrow payments must be paid from borrower's liquid assets. Borrowers whose monthly budgets have less than $900 remaining after making their monthly housing payment will be required to have in place a home warranty protection insurance policy for a period of at least one year following the date of the home purchase.
3. Income limits for all mortgage programs are determined by the area of purchase as well as family size.
4. Purchase price limits exist for both the statewide and target areas. Loans submitted using FHA, VA and/or RECD guidelines must adhere to FHA or HMFA guidelines (whichever is lower) regarding purchase price limits or mortgage loan limits.

These are just a quick summary of the programs available from the State of New Jersey. I am not guaranteeing that this is a complete list, but to discuss your current real estate needs give me a call.

I am more then willing to help home buyers and owners by providing information and direction, but if you already have a working relationship with a real estate agent or have any type of signed agreement with them then I would respectfully request that you contact them directly for details of the information summarized here.

It is exciting to find a home that you want to purchase. You may walk through the home and admire the floor plan, the architecture, or the style of the home and you may begin to picture yourself living in the space. You may decide that this is the house that you want to purchase. If so, then you will need to make a formal offer to purchase to the current owners of the property. In your excitement, it is important to remember to protect yourself in the home buying experience. While you want to present a strong and reasonable offer, you also want to provide some contingencies in your formal offer to purchase document that will allow you to back out of the sale without penalty under specific circumstances. This is where a professional REALTOR working for you can be invaluable to you. Although there may be any different number of contigencies that would depend in your personal circumstances, some of the most common offer to purchase contingencies include:

• A Low Appraisal: This one is basically unnecessary at the offer stage. I make sure that this contingency is included in all sales contracts that my buyeres enter into. Even theough there are a lot of emotions involved in buying a house but there are also important financial considerations, and this is a very important one. If the house appraisal comes in for significantly less than your purchase price then you might not wish to purchase the home.
• A Bad Home Inspection: This is another one that is really not necessary at the offer stage. There are many things that can go wrong in a home inspection and almost every inspection report will recommend some kind of improvement that should be made on the property. That said, if the home inspection comes back with many problems or a single expensive problem, then you might wish to cancel your offer to purchase unless the seller agrees to remedy the problem. I make sure that this clause with the proper and reasonable monetary limitations are included in any sales contracts that my buyers enter into.
• Being Denied a Mortgage: If your mortgage is not approved then you will not have the funds available to purchase the property and you will likely want to back out of the sale. This is one that I always makes sure is specified in each and every sales contract for all of my buyers that will require securing a mortgage to make the home purchase.
• Discovery of Title Problems: This is implied in any and all offers. You are making an offer to purchase a property that is unencumbered and free of liens. Your title search may reveal that the property is subject to numerous easements or has an encumbrance that you do not want. It could also reveal an uncertain chain of title. In either case you might wish to find another home to buy. I make a point of reviewing all of the title reports and will bring to your attention any issues that I feel may be a problem. You will have the final decision on this.
• Being Unable to Sell Your Existing Home: Some buyers make their purchase of a home contingent on the sale of their existing home so that they have the funds to purchase the new home and so that they do not carry two mortgages at the same time. If your existing home does not sell by a certain date then you might wish to back out of the sale of a new home.

When you've found the home that you would like to purchase, it is important that you make your offer to purchase with the contingencies described above so that you are truly getting the home of your dreams. In order to take advantage of these contingencies they must be explicitly included in your offer to purchase that is accepted by the seller. You can hire a professional REALTOR to help you establish a good price to offer and complete a standard offer to purchase document that is appropriate for your situation.

I'm sure as a homeowner you've asked yourself that question many times. You've even done some research into it. You've looked at the real estate transactions in the newspaper, talked with your neighbors and friends, and even tried to figure out if there is some sort of correlation between your home's value and the tax bill you get (there isn't).

Maybe you're trying to determine if this is the right time to sell your home. Is it worth enough to cover all of the costs in selling it? Will there be enough left over to put a substantial downpayment on your next home? There are definitely costs associated with selling your home...and a professional REALTOR's fees are NOT the lion's share. But before you can make an informed decision you want to make sure that you get the most accurate data possible. And you need to get this data from a professional REALTOR who knows the market in your area. You can look up the guestimated prices for your home on many of the online services that brag about having good information (no, they don't because they can't detail from where or how they arrived at their numbers). Remember one thing, these online services sole purpose is to get you to keep coming back to their web sites so that they can keep constantly feeding you ads from their site. I, on the other hand, have only one purpose. That is to provide you with the most reasonably accurate information possible so that you can make an informed decision. Why? Because it is my business to acquire as many satisfied customers as possible. If I don't do right by you, you won't be happy...and I don't have a satisfied customer.

So, if you are interested in getting the most reasonably accurate information about the market price of your home in relation to the market activity in your area. Call me or go to http://www.sellmysnjhome.com for a no-cost, no obligation Market Analysis.