What do the New FHA Lending Changes Mean to Buyers?

What do the new FHA lending changes mean to buyers?  The sweeping set of policy changes for FHA announced in late January were designed to strengthen the FHA's capital reserves to support the nation's housing market recovery, says David H. Stevens, US Dept. of HUD.  Included in those changes are:

1. An increase in the up-front MIP (Mortgage Insurance Premium) and a future increase on the annual MIP.  This will go into effect in the spring.
2. New borrowers will need a 580 or better credit score in order to only put 3.5% down on their loan.  If lower than 580 they will need a 10% down payment, beginning this summer.   This allows FHA to lower its risk and to be able to continue to provide loans to borrowers who have shown themselves to be good credit risks.
3. Increased FHA lender enforcement of adhering to FHA guidelines and standards, also going into effect this summer.
4. Reduction of seller concessions from 6% to 3%.  The current level exposes FHA to excess risk by creating incentives to inflate the appraised value of the home.  This, too, will go into effect this summer.

So what do these changes really mean for future borrowers?  It means a return to the sound business practices lenders used to follow whereby the borrower needed good credit and a substantial down payment before becoming a homeowner. 

The borrowers who benefit from future FHA loans will be more likely to be able to repay those loans and not end up in  foreclosure like many folks today.  Fewer people will be able to purchase homes through the FHA, but those that do, will be able to pay their bills!  And FHA should be financially stable and around many more years to help future home buyers.  It's a good thing.

Were You a First Time Homebuyer in 2009?

Were you a first-time homebuyer in 2009?  When you get around to doing your taxes this Spring, do you know what IRS will need from you in order to get your tax credit? 

According to the IRS website,  there are five items you need to have in order to verify the details of your home purchase for the purpose of getting your tax credit.  They are:

• A copy of the final closing contract (HUD-1 Statement)
• A copy of your most recent monthly mortgage statement 
• If the home was newly constructed, a copy of the occupancy permit

Plus two of the following four items:

• Copy of your current drivers license showing home address
• Copy of a recent pay statement showing your name and home address
• Copy of a recent bank statement showing your name and home address
• Copy of a current auto registration showing your name and home address

So, get your records in order, homebuyers, and enjoy the one-time benefit you are receiving.  And, welcome to the club of home-OWNERS!

Buyers, Considering the Move from Apartment Life to Home Ownership?

Buyers, are you thinking of losing the landlord, and owning your own home in San Antonio in the near future?  Are you considering a move from your nice newer apartment to an older, established neighborhood?  What adjustments can you expect in order to move into an affordable home? 

San Antonio is blessed with a lot of choices for first time buyers.  We still have builders actively constructing new homes, and a lot of them are in an affordable range for first time buyers.  But if a new home is not in your future, San Antonio has hundreds of neighborhoods in which you can find existing homes for sale that will be perfect for your first home.  But you may have to adjust your thinking a bit in what amenities you are looking for in a home.

• Need to update

For example, older existing homes may be not as new as your present apartment, and may have a kitchen or a bathroom that is in need of updating.  You may have to eventually invest money in newer appliances, or countertops to get the look you like. 

• Smaller rooms

Also, the room sizes may not be exactly what you have now.  Even though the home will most likely have more square feet than your apartment, some of the rooms may be smaller in an existing home, depending upon the age of the home.

• Less Open Floor Plan

The older homes may have dark paneled walls and standard 8 foot ceiling heights, and seem less bright than a newer home.  The floor plan in an older home may be more closed off or choppy, compared to a newer open plan.  The closets may be smaller, especially in the master bedroom than today's standards.

So why "settle" for an older home?  Look at the advantages.  There's a lot to be said for moving into an established neighborhood.  The area usually has a reputation for it's schools, crime rate, neighborhood associations, and the older areas are closer in to town usually, which makes for a shorter commute to work.  Also, the lots are generally larger and have mature trees and landscapes that give the homes a warm, lived in look.  You have more distance between your home and your neighbor's. 

Don't forget that your first home will probably be your smallest and will most likely have less features than your future homes, but you have to start somewhere to get the process going.  And what better time than now!

Buyers, Are You Ready to Buy a Home?

With the incentives offered by our government, in San Antonio we've seen a lot of younger, first time buyers out looking for a home to purchase.  Some have found their dream home and are enjoying their new lives as homeowners.  Others have decided they were just not ready to make such a big decision, even with the incentive dangled in front of them.  So, how do you know if you are ready for home ownership or not?  One way is to prepare!  Here are 10 guidlines to follow before jumping into action:

1. Decide what you can afford.  Generally, you can afford a home equal in value to between 2 and 3 times your gross income.
2. Develop your home wish list.  Then, prioritize the features on your list.
3. Select where you want to live.  Decide on three or four neighborhoods you'd like to live in, taking into account the distance from work, recreational facilities, schools, etc.
4. Start saving.  Do you have enough money saved to qualify for a mortgage and cover your down payment and closing costs?  Closing costs average between 2 and 7 percent of the home's price.
5. Get your credit in order.  Obtain a copy of your credit report to make sure it is accurate, and to correct any errors immediately.  A credit report provides a history of your credit, bad debts, and any late or slow payments.
6. Determine your mortgage qualifications.  Talk to a lender to find out how much mortgage you can qualify for, and what type of mortgage is best for your particular situation.
7. Get pre-approved.  Organize the documents the lender will need for the pre-approval.  Such things as W-2's, copies of pay stubs, account numbers, and bank statements are usually required.
8. Look for other sources of help with the down payment.  If you are short of cash for the closing costs, check to see if you qualify for any special mortgage or down payment assistance program.  Or, if you have an IRA account, you can use the money you've saved to buy your first home without paying a penalty for early withdrawl.  Also, ask family members for assistance to get you going.
9. Calculate the costs of homeownership.  This should include property taxes, insurance, maintenance and utilities, and HOA feew, if applicable.
10. Contact a Realtor.  An experienced Realtor can help make your purchase a smooth process from start to finish.

Coming Soon in San Antonio....

The Lebanese Festival

This Friday, November 6 at 6:00 p.m. - 11 p.m.

And Saturday, November 7 from noon - 11 p.m.

And Sunday, November 8 from noon - 6 p.m.

The St. George Maronite Catholic Community will host a Lebanese Festival to share the beautiful heritage of the Lebanese tradition with San Antonio and surrounding communities at-large. This promises to be a fun-filled family cultural celebration showcasing the Lebanese of San Antonio and the rich heritage that has been preserved since the Lebanese first immigrated in the 1880’s. Visitors will enjoy authentic Lebanese food, indoor stage performances by the Lebanese dance troupe, learn how to Dabke (the traditional folk dance of Lebanon), enjoy Friday and Saturday evening performances featuring a live band and so much more! New this year…. Relax in our ‘Oasis section’ featuring Lebanese hors d’ oeuvres and imported beer and wine!

Home Inspection - A Buyer's Best Friend (and Seller's too?)

In San Antonio, after a buyer has contracted with a seller to purchase their home, there's usually an option period during which the buyer can hire a home inspector to inspect the home.  During that period, the buyer has three options.  They can terminate the contract for any reason, or re-negotiate with the seller to do repairs or lower the price based upon what the inspector finds.  And, of course, the buyer can continue with the purchase without any further negotiations.

Sellers sometimes are alarmed at how "picky" the inspectors are, but it is actually to the seller's benefit for the inspector to identify problems with the home.  Just because a problem is not identified prior to the sale does not necessarily mean that the seller is no longer responsible.  So, the better the disclosure on the inspector's report, the better the seller is protected.

So what do the home inspectors look for?  They look for items that are in need of repair, and also inform the buyer when the current building codes have not been met in an older structure.  They check the overall structure of the home, such as the foundation and roof structure. 

The home inspectors also look at the exterior of the home, including siding, trim, drainage, windows, doors, decks and balconies. The inspectors normally will walk the roof to check it's condition and probable age, and look for any signs of poor drainage, leaks, damaged shingles, or problems with the chimneys or gutters.




Inside the home, the inspection includes the plumbing system, the electrical system, the heating and air conditioning systems, the hot water heater and the fireplaces. Kitchen appliances that are built-in are checked for proper operation, like the stove/oven, dishwasher and microwave oven.  Ceilings and floors, stairways and railings, and interior doors are inspected.  In the garage the inspector will check the operation of the garage door opening system.  If the home is built with crawlspaces underneath, the inspector will check that area of the home.
 
 

So, as a buyer, it is money well spent to have the home inspected.  It is also helpful for the buyers to be present at the inspection so the inspector can "de-brief" there on the spot and show you the items he is putting on the written report. 

If you are working with a Realtor in the purchase of your next home, ask your Realtor to recommend several inspectors they are familiar with, or if you are purchasing a home in the San Antonio area, contact SATAREI , the San Antonio Texas Association of Real Estate Inspectors to hire your next home inspector.

Welcome!

Welcome to my first posting! 

In future postings I'll give you lots of helpful information about the San Antonio area housing market, and tips for buyers and sellers that will make your next purchase or sale a pleasant experience, no matter where you live. 

In the meantime, check out available San Antonio homes at http://www.stevelinick.com/, and contact me if you'd like more info on any of those homes.