Best Loan Options for Buying a Home

If you’re in the market to buy a home, take advantage of rates while they’re still low.There are realtor and builder signs up everywhere, but what’s it going to take to get into one of these homes?

Like many young couples, buying your first home is a rite of passage as adults. Sometimes that big step in life isn’t always easy.
Many consumers need a little help and it often starts with the type of loan you choose. What is the best loan option for most consumers today?

There just might be a way to ‘Save a Buck’ with FHA loans.

Jack and Sara March went with an FHA loan and here’s why.

“[It was] just how easy it was to be approved for; the whole process and the down payment. The down payment was a lot lower than your standard loan. You don’t have to put the 20 percent down,” Jack March says.
Instead FHA loans only require 3.5 percent; a much more realistic and affordable option for many families.
March says, “That was just a lot easier for us to come up with the down payment.”

Professionals say FHA loans are a very popular option right now because Fannie Mae is in the process of eliminating their three percent down payment and for most consumers FHA is the only hope of owning a home.

What is seen in the industry is that a consumer who may have a lower credit score perhaps they’re a young buyer who hasn’t had time to build credit or someone who had a bankruptcy and their credit score was impacted by that tend to get a better rate on an FHA loan than they will on a conventional loan.
So if you’re in the market to for a home loan, FHA may be the way to go.

It’s the best with down payment assistance and is the lowest down payment option available.

The "Real Story" on Short Sales

With the exit of a few big firms from the short sale facilitation arena, they have not only left a hole in the market, but they’ve also allowed for some terrible misconceptions to spread across our profession.

Unfortunately, the reasons these firms gave out as to why they have stopped short sales have caused lots of misinformation to circulate. Here is the “THE REAL STORY” as to what the law for facilitation is.

The Law as of today:

Exemption for Real Estate Broker/Agent - Section 7-1-1001 was amended to add subparagraph (6) below went into effect July 1, 2013:

(6) A real estate broker or real estate salesperson not actively engaged in the business of negotiating mortgage loans; however, a real estate broker or real estate salesperson who directly or indirectly negotiates, places, or finds a mortgage for others shall not be exempt from the provisions of this article;

Exemption for Attorneys still in effect - Section 7-1-1001(5) HAS NOT CHANGED as of August 19,2013:

(5) A licensed attorney who negotiates the terms of a residential mortgage loan on behalf of a client as an ancillary matter to the attorney's representation of the client, unless the attorney is compensated by a lender, a mortgage broker, or other mortgage loan originator or by any agent of such lender, mortgage broker, or other mortgage loan originator;

There has also been concern that the Georgia Department of Banking and Finance (DBF) has changed its position and interpretation. That is simply not correct. You may search the DBF website for the only change relative to short sales --- which is the addition of (6) above. It is my understanding that DBF has been providing telephonic and email clarification since this became a hot topic back in August.

However, the operative word other law firms are hanging their hats on is “negotiating”. The law firms still doing facilitation, including Dickason Law Group, only facilitates the flow of information from the seller to their bank pursuant to the attorney’s role in title clearance. They do not represent the seller and they do not negotiate anything. This role has been reviewed and approved by Rod Carnes, the head of the Georgia Department of Banking and Finance. Dickason Law Group now has 9 full time facilitators, a dedicated closing team with 3 closers, and an account manager specifically for short sales. The existing firms doing facilitation without negotiating view the exit of the larger firms as an incredible business opportunity.

This is the DBF site with it's Mortgage Law and Rules:

http://dbf.georgia.gov/mortgage-laws-and-rules

The only change in the law with respect to short sales is the addition the amendment providing an exemption to real estate agents.  See DBF site:

http://dbf.georgia.gov/sites/dbf.georgia.gov/files/related_files/document/ChangestoGRMA-2013LegislativeSession.pdf

Tips for the Home Buying Process

As the housing market continues to rise and interest rates remaining attractive, first-time homebuyers are looking to purchase. Buying a home can be an easy and enjoyable process if well prepared.

Buying a home should not be a frustrating process. To be prepared and confident in the process, a mortgage applicant should know, roughly, what their credit score is before applying for a home loan. The difference between good credit score and an unappealing one is the interest rate offered to an applicant. All home buyers and investors want the lowest interest rate possible; the best way to ensure a low monthly payment on a mortgage is to apply for a loan when your credit score is strong. To reach a good credit score the individual must prove that they paid, on time, a range of financial obligations. If the applicant has missed a few large or important payments in the past, such as a car payment or credit card minimum payment then a credit risk will present itself causing the lender to raise the interest rate.

Once the credit check process is completed the applicant should know their mortgage rate and amount they may borrow. From this point he or she can filter their property and judge how much to spend in relation to a comfortable monthly payment. A good rule of thumb is to find a home no more expensive than the homebuyer's annual income times three. This way the homebuyer is not purchasing something that is not difficult to afford nor is there a great possibility of a large loss of equity in a market down cycle. With foreclosure rates declining, lenders are eager to hold the current market trend positive.

Katz Mortgage Team offers a number of tools and useful information to first time homebuyers on their website!