The FHA, or Federal Housing Administration, has helped many a homeowner buy a Orlando home for sale by providing mortgage insurance through FHA-approved lenders. However, a change in policy, announced in January, may make it harder for those with poor credit.
Before we talk about FHA's change in policy, let's cover a few of the basics about the FHA and how it might help you buy a Orlando home for sale.
What is the FHA?
The FHA is a government agency that provides mortgage insurance to approved lending institutions. It assists homebuyers by providing mortgage insurance to lenders to cover most losses that may occur when a borrower defaults. This encourages lenders to make loans to borrowers who might otherwise not be able to get a loan.
What is an FHA Loan?
An FHA loan is a loan provided by an FHA-approved lender and insured by the FHA. In other words, the FHA guarantees that a lender won’t have to write off a loan if the borrower defaults – the FHA will pay. Because of this guarantee, lenders are willing to make mortgage loans.
An FHA loan might help you get a mortgage by providing:
• Lower down payments
• Lower closing costs
• Easier credit qualifications
Now let's talk about the changes FHA is making…
The Future of FHA Loans
Until recently, the FHA has managed to weather the real estate turmoil rather well. In fact, the turbulence surrounding other lenders had potential homebuyers flocking to take advantage of FHA loans. However, even FHA's bank account is starting to suffer. In order to shore up capital reserves and keep 34 million families in their homes, the FHA is changing the rules.
Before the changes, borrowers were required to pay a down payment of 3.5% of the cost of the home. Now, borrowers with a credit rating below 580 will be required to pay at least a 10% down payment. As well, the good upfront mortgage insurance premiums of 1.75% are increasing to 2.25%. The FHA is now trying to get Congress' approval to raise the annual premiums from 0.55%, although the amount it will seek is still unknown.
What This Means for You
If you’re interested in buying a Orlando home for sale, but haven’t because you’re waiting for the market to bottom out, you may end up losing out on a great deal. With almost record low mortgage rates, home values lower than they’ve been for eight years, the first-time and upgrade homebuyer tax credits and a wide selection of homes, there may never be a better time to buy.
Whether you want to use an FHA loan or a traditional loan, I can help you cash in on this great buyer's market. Call us today at 407-876-5771
Thursday, February 11, 2010
Monday, February 08, 2010
Is 2010 the Year for You to Buy Orlando Real Estate?
Is it possible? Is this the year to buy Orlando real estate? Why would 2010 be special? Well, let’s look at the current house hunting conditions, which might give some insight:
• Home prices are lower than they’ve been since 2003. According to the National Association of REALTORS® (NAR), the median price of homes in the U.S. was around $170,000 by November of last year.
• Fixed mortgage rates have almost reached record lows. Although they are subject to change from week to week, at the time of this writing, 15 year fixed and 30 year fixed mortgages were 4.45% and 5.06%, respectively.
• The high number of foreclosures has been painful for many homeowners. However, it has also created great deals for those who want to buy Orlando real estate, but don’t want to spend their entire life savings at once.
• The extension and expansion of the Obama administration’s homebuyer tax credit has been a driving force for many home sales. The government has handed out a large amount of tax credits to many first-time buyers, and will be paying out more as the purchase date draws closer.
So, is it the year to buy a house? Only you know for sure. The economy is up and running once again, but the unemployment rate is still at 10%, and may go higher. The answer to “can I buy a home” depends on whether you have a stable job or not; look at your industry, company and job before answering. The good news is that, while unemployment may still rise, it’s expected to level off and start decreasing mid-year.
For those who can afford a home, want to buy one, but are waiting for the bottom of the market, don’t wait too long. The Orlando real estate around the corner with the “SOLD” sign might have been your dream home!
If this is a good year for YOU to buy a home, we can help. Call us at 407-876-5771 for more information.
• Home prices are lower than they’ve been since 2003. According to the National Association of REALTORS® (NAR), the median price of homes in the U.S. was around $170,000 by November of last year.
• Fixed mortgage rates have almost reached record lows. Although they are subject to change from week to week, at the time of this writing, 15 year fixed and 30 year fixed mortgages were 4.45% and 5.06%, respectively.
• The high number of foreclosures has been painful for many homeowners. However, it has also created great deals for those who want to buy Orlando real estate, but don’t want to spend their entire life savings at once.
• The extension and expansion of the Obama administration’s homebuyer tax credit has been a driving force for many home sales. The government has handed out a large amount of tax credits to many first-time buyers, and will be paying out more as the purchase date draws closer.
So, is it the year to buy a house? Only you know for sure. The economy is up and running once again, but the unemployment rate is still at 10%, and may go higher. The answer to “can I buy a home” depends on whether you have a stable job or not; look at your industry, company and job before answering. The good news is that, while unemployment may still rise, it’s expected to level off and start decreasing mid-year.
For those who can afford a home, want to buy one, but are waiting for the bottom of the market, don’t wait too long. The Orlando real estate around the corner with the “SOLD” sign might have been your dream home!
If this is a good year for YOU to buy a home, we can help. Call us at 407-876-5771 for more information.
Yes – You CAN Invest in Orlando Real Estate
With the ‘pop’ of the housing bubble, many investors in Orlando real estate put a hold on expanding their portfolios. Risk, that four-letter word, was the topic of every conversation. However, smart investors know they can still buy real estate and make a profit.
Short-term vs. Long-term Investments
Even now, Orlando real estate can be a short-term or long-term investment. Let’s take a moment to examine the market:
• There is still at least a seven-month supply of homes.
• More foreclosures are hitting the market, potentially driving down the prices of homes.
• Lenders have become stricter with their lending guidelines.
• Many first-time, second-home and upgrade homebuyers are unable to meet the stricter lending guidelines, even with good credit.
If only there was a way to lower the supply of homes, match credible buyers with the home of their dreams and make a profit…
Owner Financing as a Long-term Investment
Real estate is still a viable long-term investment, but, as with short-term, it comes down to owner financing. (This is not the same as “For Sale by Owner,” although some get the two terms confused). With owner financing, the investor steps into the roll of the lender. As with a traditional lender, the homebuyer signs a real estate note agreeing to pay a certain amount each month for the cost of the home, as well as interest.
Why is this a good long-term investment? Because owner financing provides residual income. The investor receives that amount every month for the life of the loan or until the home and interest is paid off. This is good for the buyer who can’t get a loan through traditional means, and it also benefits the investor who has the upper hand in sale negotiations.
Owner Financing as a Short-term Investment
Most investors want to make a profit right away; they don’t want to wait to make their money back. However, once signed, the real estate note is a negotiable instrument; in other words, it can be sold to the highest bidder.
No matter what the Orlando real estate market is like, there’s always opportunity. Look around at the great deals available and see what you can make happen in 2010!
If you’re looking for a great short or long-term investment property, we can help. Call us at 407-876-5771 for more information.
Short-term vs. Long-term Investments
Even now, Orlando real estate can be a short-term or long-term investment. Let’s take a moment to examine the market:
• There is still at least a seven-month supply of homes.
• More foreclosures are hitting the market, potentially driving down the prices of homes.
• Lenders have become stricter with their lending guidelines.
• Many first-time, second-home and upgrade homebuyers are unable to meet the stricter lending guidelines, even with good credit.
If only there was a way to lower the supply of homes, match credible buyers with the home of their dreams and make a profit…
Owner Financing as a Long-term Investment
Real estate is still a viable long-term investment, but, as with short-term, it comes down to owner financing. (This is not the same as “For Sale by Owner,” although some get the two terms confused). With owner financing, the investor steps into the roll of the lender. As with a traditional lender, the homebuyer signs a real estate note agreeing to pay a certain amount each month for the cost of the home, as well as interest.
Why is this a good long-term investment? Because owner financing provides residual income. The investor receives that amount every month for the life of the loan or until the home and interest is paid off. This is good for the buyer who can’t get a loan through traditional means, and it also benefits the investor who has the upper hand in sale negotiations.
Owner Financing as a Short-term Investment
Most investors want to make a profit right away; they don’t want to wait to make their money back. However, once signed, the real estate note is a negotiable instrument; in other words, it can be sold to the highest bidder.
No matter what the Orlando real estate market is like, there’s always opportunity. Look around at the great deals available and see what you can make happen in 2010!
If you’re looking for a great short or long-term investment property, we can help. Call us at 407-876-5771 for more information.
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