FHA Announces Policy changes to address risk equal more money out of pocket for your closing

In this economic climate, every penny is being evaluated. From federal to local governments to kitchen tables across the country, ways to save money are being discussed daily.

So, it's understandable that the Federal Housing Administration (FHA) needs to strengthen its reserves and bring back private lending. The question is: are the FHA's pending changes going to make that a reality or will it stagnate the housing market to a screeching halt? The FHA has insured more than 37 million mortgages since 1934. Once 'the ugly duckling' of loans, FHA loans are now the darling of loan officers. They are truly the loans moving the marketplace.

I've semi-formed my own opinion but I want you to be the judge. Let's take a $250,000 home as an example. Joe wants to buy a home for $250,000. He calls me this week and wants to start his home search. I link him with a lender to get qualified and he receives a qualification for $275,000. Living under his means like the wise man he is, we find a home for $250,000 and calculate the money he will need to close on a home. Under current guidelines, he will have to pay 1.75% of the sales price for his Mortgage Insurance Premium (MIP). That would equal $4,375. In the spring, that amount will go up to 2.25% of the sales price which equals $5,625 or $1,250 more!

FREE MONEY! That got your attention right? Well, seller's concessions are a little like that - costs the seller's are willing to contribute to your bottom line. Currently, sellers are able to provide up to 6% of the closing costs. On a $250,000 sales price that equals $15,000. That's a great amount to help cover those costs!

Well, welcome to the new FHA policies where seller concessions are reduced to 3%!! That means you can receive up to $7,500 total from the seller. Now, let's do the math...you can receive $7,500 and your up-front MIP amount equals $5,625 - well that leaves only $1,875 towards your closing costs. Remember your closing costs include your lending fees, recording fees, escrows (for taxes and insurance), attorney fees (generally $450), etc.

You do the math. And, remember, this is in addition to the downpayment that you need to have.

Trust me, I agree that buyers should have skin in the game and lenders should responsibly issue loans to deserving borrowers but this does NOT seem like the path to making home affordable and keeping the housing market in motion.

So, I step down from my soapbox today to say that if you are mulling over, contemplating, toying around, or even have an inkling of a clue that you may want to purchase a home ~~ Talk to a lender NOW. Call me, NOW.

Remember, that I am always here as 'Your Advocate & Resource in Real Estate.' Contact me with your questions, inquiries and comments. I'd love to hear them all!

Yours in Success,
Christan

3551 Brycewood Drive Slideshare

A new rental in Decatur -- beautiful townhome that shows like a model home!

3551 Brycewood Drive Slideshare

View more presentations from Christan Ross & Associates, Atlanta’s Real Estate Maven.

How Long Should It Last?

We all know that replacing a home's windows, appliances, or roofing can be very pricey and dip into that emergency savings you have stashed away. So knowing how long before the water heater or refrigerator is likely to take its last breath is very valuable to buyers and home owners.

As a buyer, you may want to factor in replacement costs. As a seller, you may want to use replacements or warrantys as a negotiation tool. Remember, additionally as a seller, call me to help you 'green' your home as well and contact us to be advised of our next GREEN SEMINAR and check back on our calendar: http://www.atlantamaven.com/meet/event_calendar.htm

Well, a study conducted by the National Association of Home Builders provides us with some insight that can help you estimate the average useful life of household appliances and building materials.

Of course, the true longevity of any household material depends the use, quality of installation, climate conditions and timely maintenance - so let these averages serve as a general guide.

Let's take a look now and play our new game....'HOW LONG SHOULD IT ASK?' (Just imagine the Price is Right music in the background!)

100 YEARS OR MORE
Brick siding: Lifetime of the home (see why brick has more value?)
All wooden floors: Lifetime of the home
Cellulose insulation material: 100+ years

50-100 YEARS
Slate, copper, and clay and concreate roofs: 50+ years
Copper gutters: 50+ years
Kitchen cabinets: Up to 50 years
Modified acrylic kitchen sinks: 50 years
Modified acrylic kitchen sinks: 50 years
Vinyl floors: 50 years

30-50 YEARS
Thermostats: 35 years
Wooden windows: 30 years
Wood shake roofs: 30 years
French interior doors: 30-50 years

10-20 YEARS
Built-in audio system: 20 years
Aluminum windows: 15-20 years
Asphalt shingle roof: 20 years
Faucets, kitchen sinks: 15 years
Gas ranges: 15 years
Cultured marble countertops: 20 years
Dryers and refrigerators: 13 years
Air conditioning units: 10-15 years
Lighting controls: 10+ years
Interior and Exterior Paints: 15+ years
Electric or gas water hearters: 10+ years
Furnaces: 15-20 years

5-10 YEARS
Security systems: 5-10 years
Heat and smoke detectors: 5-10 years
Dishwashers: 9 years
Microwave ovens: 9 years (is it just me...these things seem to last forever)
Carpet: 8-10 years

Hope you had fun playing! If you ever need a review of the improvements you are planning to make, request a copy of our Vendor Directory or assess the value of the one's you've made, give me a call at 404.309.1098.

Yours in Success,
Christan Ross
Your Advocate & Resource in Real Estate

Happy New Year!

Happy New Year from us....to YOU!

Quarter one is going to mark numerous changes to HUD, FHA, Appraisals and more.

Don't worry....we'll be in the know to keep you advised of the changes.

Sincerely,

Your Advocate & Resource in Real Estate